    [House Report 109-31]
    [From the U.S. Government Publishing Office]

    109th Congress                                             Rept. 109-31
                            HOUSE OF REPRESENTATIVES
     1st Session                                                     Part 1
    _______________________________________________________________________

                                                      Union Calendar No. 14

        BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005

                                   ----------

                                  R E P O R T

                                     of the

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                                  to accompany

                                     S. 256

                                 together with

        DISSENTING, ADDITIONAL DISSENTING, AND ADDITIONAL MINORITY VIEWS

     April 8, 2005.--Committed to the Committee of the Whole House on the
                  State of the Union and ordered to be printed

        BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005

    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800
    Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001

    109th Congress                                             Rept. 109-31
                            HOUSE OF REPRESENTATIVES
     1st Session                                                     Part 1
    _______________________________________________________________________

                                                      Union Calendar No. 14

        BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005

                                   __________

                                  R E P O R T

                                     of the

                           COMMITTEE ON THE JUDICIARY

                            HOUSE OF REPRESENTATIVES

                                  to accompany

                                     S. 256

                                 together with

        DISSENTING, ADDITIONAL DISSENTING, AND ADDITIONAL MINORITY VIEWS

     April 8, 2005.--Committed to the Committee of the Whole House on the
                  State of the Union and ordered to be printed

                                                      Union Calendar No. 14
    109th Congress                                             Rept. 109-31
                            HOUSE OF REPRESENTATIVES
     1st Session                                                     Part 1

    ======================================================================

                        BANKRUPTCY ABUSE PREVENTION AND
                        CONSUMER PROTECTION ACT OF 2005

                                    _______

     April 8, 2005.--Committed to the Committee of the Whole House on the
                  State of the Union and ordered to be printed

                                    _______

     Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the
                                   following

                                  R E P O R T

                                 together with

                DISSENTING VIEWS, ADDITIONAL DISSENTING VIEWS,
                         AND ADDITIONAL MINORITY VIEWS

                             [To accompany S. 256]

          [Including cost estimate of the Congressional Budget Office]

      The Committee on the Judiciary, to whom was referred the bill
    (S. 256) to amend title 11 of the United States Code, and for
    other purposes, having considered the same, reports favorably
    thereon without amendment and recommends that the bill do pass.

                                    CONTENTS

                                                                       Page
    Purpose and Summary..............................................     2
    Background and Need for the Legislation..........................     3
    Hearings.........................................................    22
    Committee Consideration..........................................    22
    Votes of the Committee...........................................    22
    Committee Oversight Findings.....................................    33
    New Budget Authority and Tax Expenditures........................    33
    Congressional Budget Office Cost Estimate........................    33
    Performance Goals and Objectives.................................    47
    Constitutional Authority Statement...............................    47
    Section-by-Section Analysis and Discussion.......................    47
    Changes in Existing Law Made by the Bill, as Reported............   155
    Committee Jurisdiction Letters...................................   370
    Markup Transcript................................................   373
    Dissenting Views.................................................   537
    Additional Dissenting Views......................................   591
    Additional Minority Views........................................   597

                              Purpose and Summary

        S. 256, the ``Bankruptcy Abuse Prevention and Consumer
    Protection Act of 2005,'' is a comprehensive package of reform
    measures pertaining to both consumer and business bankruptcy
    cases. The purpose of the bill is to improve bankruptcy law and
    practice by restoring personal responsibility and integrity in
    the bankruptcy system and ensure that the system is fair for
    both debtors and creditors.
        With respect to the interests of creditors, the proposed
    reforms respond to many of the factors contributing to the
    increase in consumer bankruptcy filings, such as lack of
    personal financial accountability,\1\ the proliferation of
    serial filings, and the absence of effective oversight to
    eliminate abuse in the system. The heart of the bill's consumer
    bankruptcy reforms consists of the implementation of an income/
    expense screening mechanism (``needs-based bankruptcy relief''
    or ``means testing''), which is intended to ensure that debtors
    repay creditors the maximum they can afford. S. 256 also
    establishes new eligibility standards for consumer bankruptcy
    relief and includes provisions intended to deter serial and
    abusive bankruptcy filings. It substantially augments the
    responsibilities of those charged with administering consumer
    bankruptcy cases as well as those who counsel debtors with
    respect to obtaining such relief. In addition, the bill caps
    the amount of homestead equity a debtor may shield from
    creditors, under certain circumstances.
    ---------------------------------------------------------------------------
        \1\ As one academic explained:

          [S]hoplifting is wrong; bankruptcy is also a moral act.
          Bankruptcy is a moral as well as an economic act. There is
          a conscious decision not to keep one's promises. It is a
          decision not to reciprocate a benefit received, a good deed
          done on the promise that you will reciprocate. Promise-
          keeping and reciprocity are the foundation of an economy
    ---------------------------------------------------------------------------
          and healthy civil society.

    Bankruptcy Reform: Joint Hearing Before the Subcomm. on Commercial and
    Administrative Law of the House Comm. on the Judiciary and the Subcomm.
    on Administrative Oversight and the Courts of the Senate Comm. on the
    Judiciary, 106th Cong. 98 (1999) (statement of Prof. Todd Zywicki).
        S. 256 also includes various consumer protection reforms.
    The bill penalizes a creditor who unreasonably refuses to
    negotiate a pre-bankruptcy debt repayment plan with a debtor.
    It strengthens the disclosure requirements for reaffirmation
    agreements (agreements by which debtors obligate themselves to
    repay otherwise dischargeable debts) so that debtors will be
    better informed about their rights and responsibilities. The
    legislation requires certain monthly credit card billing
    statements to include specified explanatory statements
    regarding the increased amount of interest and repayment time
    associated with making minimum payments. The bill requires
    certain home equity loan and credit card solicitations to
    include enhanced consumer disclosures. It also prohibits a
    creditor from terminating an open end consumer credit plan
    simply because the consumer has not incurred finance charges on
    the account. S. 256 allows debtors to shelter from the claims
    of creditors certain education IRA plans and retirement pension
    funds. It requires debtors to receive credit counseling before
    they can be eligible for bankruptcy relief so that they will
    make an informed choice about bankruptcy, its alternatives, and
    consequences. The bill also requires debtors, after they have
    filed for bankruptcy, to participate in financial management
    instructional courses so they can hopefully avoid future
    financial distress.
        With respect to business bankruptcy, S. 256 includes
    several significant provisions intended to heighten
    administrative scrutiny and judicial oversight of small
    business bankruptcy cases, which often are the least likely to
    reorganize successfully. In addition, it contains provisions
    designed to reduce systemic risk in the financial marketplace,
    the enactment of which Federal Reserve Board Chairman Alan
    Greenspan described as being ``extremely important.'' \2\ The
    bill includes heightened protections for family farmers facing
    financial distress and allows family fishermen to qualify for a
    specialized form of bankruptcy relief currently available only
    to family farmers. The bill also includes provisions concerning
    transnational insolvencies, bankrupt health care providers, the
    treatment of tax claims, and data collection. In response to
    the exponential increase in bankruptcy filings, the bill
    authorizes the creation of 28 additional bankruptcy judgeships.
    ---------------------------------------------------------------------------
        \2\ Letter from Alan Greenspan, Chairman, Federal Reserve Board, to
    F. James Sensenbrenner, Jr., Chairman, Committee on the Judiciary
    (Sept. 3, 2002) (on file with the Subcommittee on Commercial and
    Administrative Law).
    ---------------------------------------------------------------------------

                    Background and Need for the Legislation

        On February 1, 2005, Senator Charles Grassley (R-IA) (for
    himself and seven original cosponsors) introduced S. 256, the
    ``Bankruptcy Abuse Prevention and Consumer Protection Act of
    2005.'' Thereafter, F. James Sensenbrenner, Jr., Chairman of
    the House Committee on the Judiciary, (for himself and 60
    original cosponsors) introduced legislation (H.R. 685)
    identical to S. 256 on February 9, 2005.
        S. 256, as introduced, is substantively identical to
    legislation that the House passed in the prior Congress on two
    separate occasions with overwhelming bipartisan support.\3\ It
    is also substantively similar to a modified version of a
    bankruptcy reform conference report that the House passed in
    the 107th Congress by a vote of 244 to 116.\4\
    ---------------------------------------------------------------------------
        \3\ On March 19, 2003, the House passed H.R. 975, the ``Bankruptcy
    Abuse Prevention and Consumer Prevention Act of 2003,'' by a vote of
    315 to 113. 149 Cong. Rec. H2099-00 (daily ed. Mar. 19, 2003).
    Thereafter, the House, on January 28, 2004, passed S. 1920, as amended,
    the text of which was substituted with the text of H.R. 975, as passed
    by the House, by a vote of 265 to 99. 150 Cong. Rec. H218-19 (daily ed.
    Jan. 28, 2004).
        \4\ H.R. Rep. No. 107-617 (2002). The modifications consisted of
    the deletion of two provisions, one dealing with unlawful protest
    activities and the other authorizing additional bankruptcy judgeships.
    The text of the conference report, as modified, was introduced as H.R.
    5545, the ``Bankruptcy Abuse Prevention and Consumer Protection Act of
    2003.'' H.R. 5545, 107th Cong. (2002). In turn, the text of H.R. 5545
    was substituted as an amendment to H.R. 333. The House, thereafter,
    passed H.R. 333, as amended. 148 Cong. Rec. H8876-77 (daily ed. Nov.
    14, 2002).
    ---------------------------------------------------------------------------

                      FACTORS SUPPORTING BANKRUPTCY REFORM

        Representing the most comprehensive set of reforms in more
    than 25 years, S. 256's consumer bankruptcy provisions respond
    to several factors. First, the recent escalation of consumer
    bankruptcy filings does not appear to be just a temporary
    event, but part of a generally consistent upward trend.\5\ In
    1998, for example, bankruptcy filings exceeded one million for
    the first time in our nation's history. Over the past decade,
    the number of bankruptcy filings has nearly doubled to more
    than 1.6 million cases filed in fiscal year 2004.\6\ As a
    result, there is a growing perception that bankruptcy relief
    may be too readily available and is sometimes used as a first
    resort, rather than a last resort.\7\ Despite the view of
    opponents of bankruptcy reform that abuse in the system is not
    widespread and that most bankruptcy filings result from causes
    beyond debtors' control, such as family illness, job loss or
    disruption, or divorce,\8\ the Committee concluded that reforms
    were nevertheless necessary.
    ---------------------------------------------------------------------------
        \5\ Press Release, Administrative Office of the U.S. Courts, Record
    Breaking Bankruptcy Filings Reported in Calendar Year 2002, at 1 (Feb.
    14, 2003) (noting that ``[b]ankruptcy filings continue to break
    historic records'').
        \6\ See Press Release, Administrative Office of the U.S. Courts,
    Bankruptcy Filings Down in Fiscal Year 2004, at 1 (Dec. 3, 2004)
    (noting that ``[d]espite the drop in filings, bankruptcies remain at
    historic highs, well above the 1.5 million record first set in 2002'');
    Becky Yerak, Bankrupt Filings in E. Mich. Skyrocket; High Debt, Slow
    Economy Spur 22% Increase in 2002, Biggest Jump in the United States,
    The Detroit News, Feb. 24, 2003, at 1A (noting that in the Eastern
    District of Michigan alone, bankruptcy filings for 2002 increased by 22
    percent over the prior year).
        \7\ See, e.g., Becky Yerak, Bankrupt Filings in E. Mich. Skyrocket;
    High Debt, Slow Economy Spur 22% Increase in 2002, Biggest Jump in the
    United States, The Detroit News, Feb. 24, 2003, at 1A (noting that
    ``[t]he stigma of filing for bankruptcy continues to abate while, at
    the same time, lenders impose few if any credit restrictions'').
        \8\ See, e.g., Bankruptcy Abuse Prevention and Consumer Protection
    Act of 2005: Hearing on S. 256 Before the Senate Comm. on the
    Judiciary, 109th Cong. (2005) (statement of Prof. Elizabeth Warren).
    ---------------------------------------------------------------------------
        Second, there are significant losses asserted to be
    associated with bankruptcy filings. As one witness explained
    during the Senate Judiciary Committee's hearing on S. 256
    earlier this year:

            Like all other business expenses, when creditors are
            unable to collect debts because of bankruptcy, some of
            those losses are inevitably passed on to responsible
            Americans who live up to their financial obligations.
            Every phone bill, electric bill, mortgage, furniture
            purchase, medical bill, and car loan contains an
            implicit bankruptcy ``tax'' that the rest of us pay to
            subsidize those who do not pay their bills. Exactly how
            much of these bankruptcy losses is passed on from
            lenders to consumer borrowers is unclear, but economics
            tells us that at least some of it is. We all pay for
            bankruptcy abuse in higher down payments, higher
            interest rates, and higher costs for goods and
            services.\9\
    ---------------------------------------------------------------------------
        \9\ Bankruptcy Abuse Prevention and Consumer Protection Act of
    2005: Hearing on S. 256 Before the Senate Comm. on the Judiciary, 109th
    Cong. (2005) (prepared statement of Prof. Todd Zywicki).

    According to some analyses, the increase in consumer bankruptcy
    filings has adverse financial consequences for our nation's
    economy. For instance, it was estimated that in 1997 alone more
    than $44 billion of debt was discharged by debtors who filed
    for bankruptcy relief,\10\ a figure when amortized on a yearly
    basis amounts to a loss of at least $110 million every day.\11\
    These losses, according to one estimate, translate into a $400
    annual ``tax'' on every household in our nation.\12\ In 2003,
    the Nilson Report (a credit industry newsletter) announced that
    issuers of proprietary and general purpose credit cards ``lost
    $18.9 billion in 2002 from consumer bankruptcy filings,'' an
    increase of 15.1 percent over the prior year.\13\ The Credit
    Union National Association (CUNA) reported that credit unions,
    as of 2002, lost ``nearly $3 billion from bankruptcies'' since
    Congress began its consideration of bankruptcy reform
    legislation in 1998.\14\ CUNA estimates that over 40% of all
    credit union losses in 2004 will be bankruptcy-related, and
    those losses will total approximately $900 million.\15\
    ---------------------------------------------------------------------------
        \10\ Bankruptcy Reform Act of 1998 (Pt. I): Hearings on H.R. 3150
    Before the Subcomm. on Commercial and Administrative Law of the House
    Comm. on the Judiciary, 105th Cong. 147 (1998) (statement of Mark
    Lauritano, Senior Vice President, WEFA, Inc.).
        \11\ Bankruptcy Reform: Joint Hearing Before the Subcomm. on
    Commercial and Administrative Law of the House Comm. on the Judiciary
    and the Subcomm. on Administrative Oversight and the Courts of the
    Senate Comm. on the Judiciary, 106th Cong. 26 (1999) (statement of Dean
    Sheaffer on behalf of the National Retail Federation).
        \12\ Bankruptcy Reform Act of 1998 (Pt. I): Hearings on H.R. 3150
    Before the Subcomm. on Commercial and Administrative Law of the House
    Comm. on the Judiciary, 105th Cong. 147 (1998) (statement of Mark
    Lauritano, Senior Vice President, WEFA, Inc.).
        \13\ Bankruptcy Losses on Cards, The Nilson Report, Jan. 2003, at
    1.
        \14\ John K. McKechnie, III, Letter to Editor, Credit Union J. 6
    (June 24, 2002); see William R. Mapother, Counseling Could Overturn
    Losses, Credit Union Mag. 34 (Dec. 2002) (quoting CUNA President Dan
    Mica).
        \15\ Bankruptcy Abuse Prevention and Consumer Protection Act of
    2005: Hearing on S. 256 Before the Senate Comm. on the Judiciary, 109th
    Cong. (2005) (prepared statement of Kenneth Beine).
    ---------------------------------------------------------------------------
        A third factor motivating comprehensive reform is that the
    present bankruptcy system has loopholes and incentives that
    allow and--sometimes--even encourage opportunistic personal
    filings and abuse. A civil enforcement initiative undertaken in
    2002 by the United States Trustee Program (a component of the
    Justice Department charged with administrative oversight of
    bankruptcy cases) has ``consistently identified'' such problems
    as ``debtor misconduct and abuse, misconduct by attorneys and
    other professionals, problems associated with bankruptcy
    petition preparers, and instances where a debtor's discharge
    should be challenged.'' \16\ According to the United States
    Trustee Program, ``Abuse of the system is more widespread than
    many would have estimated.'' \17\ Such abuse ultimately hurts
    consumers as well as creditors.
    ---------------------------------------------------------------------------
        \16\ Antonia G. Darling & Mark A. Redmiles, Protecting the
    Integrity of the System: the Civil Enforcement Initiative, Am. Bankr.
    Institute J. 12 (Sept. 2002).
        \17\ J. Christopher Marshall, Civil Enforcement: An Early Report,
    Journal of the Nat'l Ass'n of Bankr. Trustees (NABTalk) 39 (Fall 2002).
    ---------------------------------------------------------------------------
        A fourth factor relates to the fact that some bankruptcy
    debtors are able to repay a significant portion of their debts,
    according to several studies.\18\ Current law, however, has no
    clear mandate requiring these debtors to repay their debts.
    Accordingly, ``[w]hile there is a universal agreement among the
    courts that an individual debtor's ability to repay his or her
    debts from future earnings is, at the very least, a factor in
    determining whether substantial abuse would occur in a chapter
    7 case, there are differences among the courts as to the extent
    to which they rely on a debtor's ability to repay.'' \19\
    ---------------------------------------------------------------------------
        \18\ See, e.g., Bankruptcy Reform Act of 1999 (Pt. II): Hearing on
    H.R. 833 Before the Subcomm. on Commercial and Administrative Law of
    the House Comm. on the Judiciary, 106th Cong. 298 (1999) (statement of
    Thomas S. Neubig, Ernst & Young LLP--Policy Economics and Quantitative
    Analysis Group, concluding that ``large numbers of 1997 U.S. chapter 7
    filers have the ability to repay large portions of their debts''); id.
    at 228-29 (statement of Michael E. Staten, Credit Research Center,
    concluding that ``about 25 percent of chapter 7 debtors could have
    repaid at least 30 percent of their non-housing debts over a 5-year
    repayment plan, after accounting for monthly expenses and housing
    payments'' and that ``[a]bout 5 percent of chapter 7 filers appeared
    capable of repaying all of their non-housing debt over a 5-year plan,''
    although these ``calculations assumed income would remain unchanged
    relative to expenses over the 5 years''); Marianne B. Culhane &
    Michaela M. White, Taking the New Consumer Bankruptcy Model for a Test
    Drive: Means-Testing Real Chapter 7 Debtors, 7 AM. BANKR. L. J. 27, 31
    (1999) (concluding that 3.6% of sampled debtors ``emerged as apparent
    can-pays'').
        \19\ Robert C. Furr & Marc P. Barmat, 11 U.S.C. Section 707(b)--The
    U.S. Trustee's Weapon Against Abuse, Nat'l Ass'n Bankr. Trustees
    (NABTalk) 11, 14 (Winter 2002-03).
    ---------------------------------------------------------------------------

             PRIOR CONGRESSIONAL CONSIDERATION OF BANKRUPTCY REFORM

        Proposed reforms to bankruptcy law and practice have been
    under consideration by Congress for nearly eight years \20\ and
    have generally enjoyed broad support from the business
    community, banking and financial services industries as well as
    other groups such as family farmers and child support
    enforcement agencies. In Congress, support for bankruptcy
    reform legislation has likewise been overwhelming, bipartisan
    and bicameral.
    ---------------------------------------------------------------------------
        \20\ Comprehensive bankruptcy reform legislation (H.R. 2500, the
    ``Responsible Borrower Protection Bankruptcy Act'') was first formally
    introduced in the House on September 18, 1997. H.R. 2500, 105th Cong.
    (1997).
    ---------------------------------------------------------------------------
        Since the 105th Congress, the House has passed bankruptcy
    reform legislation on eight separate occasions. In the 105th
    Congress, for example, the House passed both H.R. 3150, the
    ``Bankruptcy Reform Act of 1998,'' and the conference report on
    that bill by veto-proof margins.\21\ In the 106th Congress, the
    House passed H.R. 833, the successor to H.R. 3150, by a veto-
    proof margin of 313 to 108 \22\ and agreed to the conference
    report \23\ by voice vote.\24\ Although the Senate subsequently
    passed this legislation by a vote of 70 to 28,\25\ President
    Clinton pocket-vetoed it. In the 107th Congress, the House
    again registered its overwhelming support for bankruptcy reform
    on two more occasions. On March 1, 2001, the House passed H.R.
    333, the ``Bankruptcy Abuse Prevention and Consumer Protection
    Act,'' by a vote of 306 to 108.\26\ The House thereafter passed
    a modified version of the conference report on H.R. 333, as
    previously noted.\27\ In the last Congress, the House passed
    H.R. 975, the ``Bankruptcy Abuse Prevention and Consumer
    Protection Act of 2003,'' by a vote of 315 to 113 and S. 1920,
    which consisted of the text of H.R. 975, as passed by the
    House, by a vote of 265 to 99.\28\
    ---------------------------------------------------------------------------
        \21\ 144 Cong. Rec. H4442 (daily ed. June 10, 1998) (vote on final
    passage of H.R. 3150 was 306 to 118); 144 Cong. Rec. H10239-40 (daily
    ed. Oct. 9, 1998) (vote on final passage of the conference report on
    H.R. 3150 was 300 to 125).
        \22\ 145 Cong. Rec. H2771 (daily ed. May 5, 1999).
        \23\ H.R. Rep. No. 106-970 (2000).
        \24\ 146 Cong. Rec. H9840 (daily ed. Oct. 12, 2000).
        \25\ 146 Cong. Rec. S11730 (daily ed. Dec. 7, 2000).
        \26\ 147 Cong. Rec. H600-01 (daily ed. Mar. 1, 2001).
        \27\ See supra note 3.
        \28\ 149 Cong. Rec. H2099-00 (daily ed. Mar. 19, 2003);150 Cong.
    Rec. H218-19 (daily ed. Jan. 28, 2004).
    ---------------------------------------------------------------------------
        Likewise, the Senate has on numerous occasions expressed
    strong bipartisan support for bankruptcy reform legislation. In
    the 105th Congress, the Senate passed bankruptcy reform
    legislation by a vote of 97 to 1.\29\ In the 106th Congress,
    the Senate passed similar legislation by a vote of 83 to 14
    \30\ and a subsequent conference report by a vote of 70 to
    28.\31\ In the 107th Congress, the Senate passed a bankruptcy
    reform bill by a vote of 82 to 16.\32\ Last month, the Senate
    passed S. 256, as amended, by a vote of 74 to 25.\33\
    ---------------------------------------------------------------------------
        \29\ 144 Cong. Rec. S10767 (daily ed. Sept. 23, 1998).
        \30\ 146 Cong. Rec. S255 (daily ed. Feb. 2, 2000).
        \31\ 146 Cong. Rec. S11730 (daily ed. Dec. 7, 2000).
        \32\ 147 Cong. Rec. S2379 (daily ed. Mar. 15, 2001).
        \33\ 151 Cong. Rec. S2474 (daily ed. Mar. 10, 2005).
    ---------------------------------------------------------------------------
        The Committee and the Subcommittee on Commercial and
    Administrative Law (Subcommittee), beginning in the 105th
    Congress, have held a total of 18 days of hearings on the
    operation of the bankruptcy system and the need for reform.\34\
    Eleven of these hearings were devoted solely to consideration
    of S. 256's predecessors, H.R. 3150 (105th Congress), H.R. 833
    (106th Congress), H.R. 333 (107th Congress), and H.R. 975
    (108th Congress). Over the course of these hearings, nearly 130
    witnesses, representing nearly every major constituency in the
    bankruptcy community, testified. With regard to H.R. 833 alone,
    testimony was received from 69 witnesses, representing 23
    organizations, with additional material submitted by other
    groups.
    ---------------------------------------------------------------------------
        \34\ The dates and subject matters of these hearings are as
    follows:

    April 16, 1997:
      Hearing on the operation of the bankruptcy system and status report
    from the National Bankruptcy Review Commission.

    April 30, 1997:
      Hearing on H.R. 764, the ``Bankruptcy Amendments of 1997,'' and H.R.
    120, the ``Bankruptcy Law Technical Corrections Act of 1997.''

    October 9, 1997:
      Hearing on H.R. 2592, the ``Private Trustee Reform Act of 1997'' and
    review of post-confirmation fees in chapter 11 cases.

    November 13, 1997:
      Hearing on the Report of the National Bankruptcy Review Commission.

    February 12, 1998:
      Hearing on H.R. 2604, the ``Religious Liberty and Charitable Donation
    Protection Act of 1997.''

    March 10-11, 18-19, 1998:

      Hearings on H.R. 3150, the ``Bankruptcy Reform Act of 1998,'' H.R.
    3146, the ``Consumer Lenders and Borrowers Bankruptcy Accountability
    Act of 1998,'' and H.R. 2500, the ``Responsible Borrower Protection
    Bankruptcy Act.''

    March 11-12, 18-19, 1999:
      Hearings on H.R. 833, the ``Bankruptcy Reform Act of 1999.''

    November 2, 1999:
      Joint oversight hearing on additional bankruptcy judgeship needs.

    April 11, 2000:
      Oversight hearing on the limits on regulatory powers under the
    Bankruptcy Code.

    February 7-8, 2001:
      Hearings on H.R. 333, the ``Bankruptcy Abuse Prevention and Consumer
    Protection Act of 2001.''

    March 4, 2003:
      Hearing on H.R. 975, the ``Bankruptcy Abuse Prevention and Consumer
    Protection Act of 2003'' and the need for bankruptcy reform.
        The Senate likewise has held numerous hearings on the
    subject of bankruptcy reform and related issues. Since the
    105th Congress, the Senate has held eleven hearings, including
    a hearing held earlier this year on S. 256.\35\ In fact, the
    inaugural hearing on H.R. 833 during the 106th Congress was
    held jointly by the Subcommittee together with the Senate
    Subcommittee on Administrative Oversight and the Courts on
    March 11, 1999,\36\ marking the first time in more than 60
    years that a bicameral hearing was held on the subject of
    bankruptcy reform.\37\
    ---------------------------------------------------------------------------
        \35\ The Subcommittee on Administrative Oversight and the Courts of
    the Senate Committee on the Judiciary conducted the following hearings:

    April 11, 1997:
      Hearing on the increase in personal bankruptcies and the crisis in
    consumer credit.

    August 1, 1997:
      Hearing to review the negative impact of bankruptcy on educational
    funding.

    August 8, 1997:
      Hearing regarding bankruptcy laws for family farmers.

    September 22, 1997:
      Hearing on the Bankruptcy Code's effect on religious freedom and a
    review of the need for additional bankruptcy judgeships.

    October 21, 1997:
      Hearing to review the recommendations of the National Bankruptcy
    Review Commission.

    December 7, 1997:
      Hearing regarding international bankruptcy laws.

    March 11, 1998:
      Hearing on S. 1301, ``The Consumer Bankruptcy Reform Act: Seeking
    Fair and Practical Solutions to the Consumer Bankruptcy Crisis.''

    May 19, 1998:
      Hearing to review business bankruptcy issues.

    March 11, 1999:
      Hearing on H.R. 833, the ``Bankruptcy Reform Act of 1999,'' held
    jointly with the Subcommittee on Commercial and Administrative Law of
    the House Committee on the Judiciary.

    November 2, 1999:
      Oversight hearing on additional bankruptcy judgeship needs held
    jointly with the Subcommittee on Commercial and Administrative Law of
    the House Committee on the Judiciary.

    February 10, 2005:
      Hearing on S. 256, the ``Bankruptcy Abuse Prevention and Consumer
    Protection Act of 2005.''
    ---------------------------------------------------------------------------
        \36\ Representatives on behalf of the Commercial Law League of
    America, CUNA, MBNA America Bank, N.A., National Retail Federation, and
    the National Consumer Law Center also testified. Some of the nation's
    leading jurists and academics presented testimony as well. Bankruptcy
    Reform: Hearing Before the Subcomm. on Commercial and Administrative
    Law of the House Comm. on the Judiciary and the Subcomm. on
    Administrative Oversight and the Courts of the Senate Comm. on the
    Judiciary, 106th Cong. (1999).
        \37\ Senators testifying at the hearing included Charles Grassley
    (R-IA), Joseph Biden (D-DE) and Christopher Dodd (D-CT). House Members
    included Jim Moran (D-VA), Pete Sessions (R-TX) and Nick Smith (R-MI).
    Id.
    ---------------------------------------------------------------------------
        It is also important to note that bankruptcy reform
    legislation is the product of extensive bipartisan and
    bicameral negotiation and compromise. For example, conferees
    during the 106th Congress spent nearly seven months engaged in
    an informal conference to reconcile differences between the
    House and Senate passed versions of bankruptcy reform
    legislation. In the 107th Congress, conferees formally met on
    three occasions and ultimately agreed--after an 11-month period
    of negotiations--to a bipartisan conference report.\38\
    ---------------------------------------------------------------------------
        \38\ H.R. Rep. No. 107-617 (2002). Signatories on behalf of the
    House included: F. James Sensenbrenner, Jr. (R-WI), Henry Hyde (R-IL),
    George Gekas (R-PA), Lamar Smith (R-TX), Steve Chabot (R-OH), Bob Barr
    (R-GA), Rick Boucher (D-VA), Michael Oxley (R-OH), Spencer Bachus (R-
    AL), Billy Tauzin (R-LA), Joe Barton (R-TX), John Boehner (R-OH), and
    Michael Castle (R-DE). Signatories on behalf of the Senate included:
    Patrick Leahy (D-VT), Joe Biden (D-DE), Charles Schumer (D-NY), Orrin
    Hatch (R-UT), Chuck Grassley (R-IA), Jon Kyl (R-AZ), Mike DeWine (R-
    OH), Jeff Sessions (R-AL), and Mitch McConnell (R-KY).
    ---------------------------------------------------------------------------
        On February 10, 2005, the Senate Committee on the Judiciary
    held a hearing on S. 256 that provided an opportunity to review
    the reasons why the current bankruptcy system needs reform and
    how this legislation would implement those reforms.\39\
    Testimony was received from eight witnesses, including: Kenneth
    Beine on behalf of CUNA; Maria Vullo, a partner with the New
    York law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP;
    Malcom Bennett on behalf of the National Multi Housing Council/
    National Apartment Association; Philip Strauss on behalf of the
    National Child Support Enforcement Association; Dave McCall on
    behalf of the United Steel Workers of America, AFL-CIO; R.
    Michael Stewart Menzies, Sr. on behalf of the Independent
    Community Bankers of America; Prof. Elizabeth Warren, Leo
    Gottlieb Professor of Law at Harvard Law School; and Prof. Todd
    J. Zywicki, Visiting Professor of Law at Georgetown University
    Law Center.
    ---------------------------------------------------------------------------
        \39\ Bankruptcy Abuse Prevention and Consumer Protection Act of
    2005: Hearing on S. 256 Before the Subcomm. on Administrative Oversight
    and the Courts of the Senate Comm. on the Judiciary, 109th Cong.
    (2005).
    ---------------------------------------------------------------------------
        Among the matters considered at the hearing were: (1) the
    adequacy of the current bankruptcy system with respect to the
    detection of fraud and abuse; (2) how abuse and fraud in the
    current bankruptcy system impact on American businesses and our
    nation's citizens generally; (3) whether the legislation
    adversely impacts individuals deserving of bankruptcy relief;
    (4) whether the proposed reforms would assist those who are
    charged with administrative oversight of bankruptcy cases and
    law enforcement matters; and (5) whether, given current
    economic circumstances, the need for comprehensive bankruptcy
    reform still exists.
        On February 17, 2005, the Senate Judiciary Committee marked
    up S. 256 and ordered the bill, as amended, to be favorably
    reported by a vote of 12 to 5. Over the course of the markup,
    five amendments were passed. These amendments consisted of the
    following:

            1. an amendment by Senator Edward Kennedy (D-MA)
            clarifying that a debtor's reasonably necessary
            expenses for health insurance, disability insurance,
            and health savings accounts for the debtor and for the
            debtor's spouse and dependents are allowed expenses
            under the bill's needs-based test;

            2. an amendment by Senator Kennedy limiting retention
            bonuses, severance pay, and other payments to insiders
            of the debtor, under certain circumstances;

            3. an amendment by Senator Russell Feingold (D-WI)
            increasing the monetary threshold with respect to the
            venue of a proceeding to recover a consumer debt;

            4. an amendment by Senator Patrick Leahy (D-VT)
            clarifying that a debt based on a Federal or state
            securities law violation is nondischargeable; and

            5. an amendment by Senator Kennedy requiring the
            United States trustee to apply to the court for the
            appointment of a chapter 11 trustee if there are
            reasonable grounds to suspect fraud, under certain
            circumstances.

        On March 10, 2005, the Senate passed S. 256, as amended, by
    a vote of 74 to 25. Nearly 130 amendments were filed. Of the
    amendments that were offered, 24 failed, 24 were withdrawn,
    eight were passed either by vote or unanimous consent. The
    amendments that were accepted consisted of the following:

            1. an amendment by Senator Jeff Sessions (R-AL)
            clarifying that the special circumstances exception to
            the bill's needs-based test includes a debtor with a
            serious medical condition or a debtor on active duty in
            the military to the extent these factors justify
            adjustment to income or expenses as well as clarifying
            the safe harbor from the needs-based test with respect
            to veterans;

            2. an amendment by Senator Leahy restricting public
            access to certain personal information regarding an
            individual contained in bankruptcy case files to the
            extent the court finds that disclosure of such
            information would create undue risk of identity theft
            or other unlawful injury to such individual or the
            individual's property;

            3. an amendment by Senator Arlen Specter (R-PA)
            increasing the filing fees for chapter 7 and chapter 11
            bankruptcy cases, reducing the filing fees for chapter
            13, and adjusting the allocation of such fees among
            various governmental entities;

            4. an amendment by Senator Feingold providing for the
            automatic periodic adjustment for inflation of certain
            monetary amounts specified in the Bankruptcy Code;

            5. an amendment by Senator Feingold authorizing a
            court to: (a) seal all public records pertaining to a
            fraudulent involuntary bankruptcy petition, under
            certain circumstances, (b) prohibit any consumer
            reporting agency from issuing any consumer report
            containing any reference to such petition; and (c)
            expunge all records pertaining to such petition upon
            the expiration of the statute of limitations for the
            crimes associated with the filing of a fraudulent
            involuntary bankruptcy petition. It also amends the
            Federal criminal statute to make it a criminal offense
            to file a fraudulent involuntary bankruptcy petition;
            \40\
    ---------------------------------------------------------------------------
        \40\ This amendment is similar to legislation considered by the
    House in the 108th Congress. H.R. 1529, 108th Cong. (2003). The bill
    was ordered favorably reported without amendment by the House Judiciary
    Committee, H.R. Rep. No. 108-110 (2003), and passed by voice vote by
    the House. 149 Cong. Rec. H5104 (daily ed. June 10, 2003). The
    principal difference between this legislation and section 332 of the
    Act is that the bill would have permitted the court to expunge the case
    upon dismissal of the fraudulent involuntary petition.

            6. an amendment by Senator Feingold creating an
            exception to the bill's mandatory consumer credit
            counseling and financial management training
            requirements for a debtor who is unable to complete
            these requirements because of incapacity, disability,
    ---------------------------------------------------------------------------
            or active duty in a military combat zone;

            7. an amendment by Senator Richard Durbin (D-IL)
            creating an exception from the bill's needs-based test
            for a disabled veteran whose indebtedness occurred
            primarily during a period when the individual was on
            active duty or performing a homeland defense activity;
            and

            8. an amendment by Senator James Talent (R-MO)
            authorizing a bankruptcy trustee to avoid any transfer
            of property by a debtor to a self-settled trust made
            within ten years preceding the filing of the debtor's
            bankruptcy case if the debtor is a beneficiary of such
            trust and the debtor made such transfer with actual
            intent to hinder, delay, or defraud a creditor.

                        HIGHLIGHTS OF BANKRUPTCY REFORMS

    Consumer Creditor Bankruptcy Protections.
        Needs-Based Reforms. Chapter 7 is a form of bankruptcy
    relief by which an individual debtor receives an immediate
    unconditional discharge of personal liability for certain debts
    in exchange for relinquishing his or her nonexempt assets to a
    bankruptcy trustee for liquidation and distribution to
    creditors.\41\ This ``unconditional discharge'' in chapter 7
    contrasts with the ``conditional discharge'' provisions of
    chapter 13, under which a debtor commits to repay some portion
    of his or her financial obligations in exchange for retaining
    nonexempt assets and receiving a broader discharge of debt than
    is available under chapter 7. Allowing consumer debtors in
    financial distress to choose voluntarily an ``unconditional
    discharge'' has been a part of American bankruptcy law since
    the enactment of the Bankruptcy Act of 1898.\42\
    ---------------------------------------------------------------------------
        \41\ Under the Bankruptcy Code, only an individual may obtain a
    chapter 7 discharge. Thus, a corporation is not eligible to receive a
    discharge under chapter 7. 11 U.S.C. Sec. 727(a)(1).
        \42\ Bankruptcy Act of 1898, 30 Stat. 544 (1898) (repealed 1978).
    The rationale of an unconditional discharge was explained by Congress
    more than 100 years ago:

          [W]hen an honest man is hopelessly down financially,
          nothing is gained for the public by keeping him down, but,
          on the contrary, the public good will be promoted by having
          his assets distributed ratably as far as they will go among
    ---------------------------------------------------------------------------
          his creditors and letting him start anew.

    H.R. Rep. No. 55-65, at 43 (1897).
        The concept of needs-based bankruptcy relief has long been
    debated in the United States. President Herbert Hoover, for
    instance, recommended to Congress in 1932, ``The discretion of
    the courts in granting or refusing discharges should be
    broadened, and they should be authorized to postpone discharges
    for a time and require bankrupts, during the period of
    suspension, to make some satisfaction out of after-acquired
    property as a condition to the granting of a full discharge.''
    \43\ In 1938, chapter XIII (the predecessor to chapter 13 of
    the Bankruptcy Code) was enacted as a purely voluntary form of
    bankruptcy relief that allowed a debtor to propose a plan to
    repay creditors out of future earnings.\44\
    ---------------------------------------------------------------------------
        \43\ President's Special Message to the Congress on Reform of
    Judicial Procedure, 69 Pub. Papers 83, 90 (Feb. 29, 1932).
        \44\ Chandler Act of 1938, 52 Stat. 840 (1938).
    ---------------------------------------------------------------------------
        Over the ensuing years, there continued to be repeated
    expressions of support for and opposition to means-testing
    bankruptcy reform.\45\ In 1967, various organizations
    testifying before Congress in support of such reform included
    the American Bar Association, the American Bankers Association,
    the Chamber of Commerce of the United States, CUNA, the
    National Federation of Independent Businesses, and the American
    Industrial Bankers Association.\46\ The Commission on the
    Bankruptcy Laws of the United States, while supporting the
    concept that repayment plans should be ``fostered,''
    nevertheless concluded in 1973 that ``forced participation by a
    debtor in a plan requiring contributions out of future income
    has so little prospect for success that it should not be
    adopted as a feature of the bankruptcy system.'' \47\ The
    Bankruptcy Reform Act of 1978 \48\ retained the principle that
    a debtor's decision to choose relief premised on repayment to
    creditors should be ``completely voluntary.'' \49\
    ---------------------------------------------------------------------------
        \45\ See, e.g., Report of the Commission on the Bankruptcy Laws of
    the United States--July 1973, H.R. Doc. No. 93 137, pt. I, at 158
    (1973) (observing that ``proposals have been made to Congress from time
    to time that a debtor able to obtain relief under chapter XIII
    [predecessor of chapter 13] should be denied relief in straight
    bankruptcy'').
        \46\ Hearings on H.R. 1057 and H.R. 5771 Before the Subcomm. No. 4
    of the House Comm. on the Judiciary, 90th Cong. (1967).
        \47\ See, e.g., Report of the Commission on the Bankruptcy Laws of
    the United States--July 1973, H.R. Doc. No. 93-137, pt. I, at 159
    (1973).
        \48\ Pub. L. No. 95-598, 92 Stat. 2549 (1978).
        \49\ H.R. Rep. No. 95-595, at 120 (1977) (observing that ``[t]he
    thirteenth amendment prohibits involuntary servitude'' and suggesting
    that ``a mandatory chapter 13, by forcing an individual to work for
    creditors, would violate this prohibition'').
    ---------------------------------------------------------------------------
        Although the Bankruptcy Code as originally enacted in 1978
    provided that a chapter 7 case could only be dismissed for
    ``cause,'' the Code was amended in 1984 to permit the court to
    dismiss a chapter 7 case for ``substantial abuse.'' \50\ This
    provision, codified in section 707(b) of the Bankruptcy
    Code,\51\ was added ``as part of a package of consumer credit
    amendments designed to reduce perceived abuses in the use of
    chapter 7.'' \52\ It was intended to respond ``to concerns that
    some debtors who could easily pay their creditors might resort
    to chapter 7 to avoid their obligations.'' \53\ In 1986,
    section 707(b) was further amended to allow a United States
    trustee (a Department of Justice official) to move for
    dismissal.\54\
    ---------------------------------------------------------------------------
        \50\ Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub.
    L. No. 98-353, Sec. 312, 98 Stat. 333, 335 (1984).
        \51\ 11 U.S.C. Sec. 707(b).
        \52\ 6 Lawrence P. King et al., Collier on Bankruptcy
    Sec. 707.LH[2], at 707-30 (15th ed. rev. 2002).
        \53\ Id. at Sec. 707.04.
        \54\ Bankruptcy Judges, United States Trustees, and Family Farmer
    Bankruptcy Act of 1986, Pub. L. No. 99-554, Sec. 219, 100 Stat. 3088,
    3101 (1986).
    ---------------------------------------------------------------------------
        The utility of section 707(b) is limited for several
    reasons. Under current law, neither the court nor the United
    States trustee is required to file a motion to dismiss a
    chapter 7 case for substantial abuse under section 707(b). In
    addition, other parties in interest, such as chapter 7 trustees
    and creditors, are prohibited from filing such motions. In
    fact, section 707(b) specifies that a motion under that
    provision may not even be made ``at the request or suggestion
    of any party in interest.'' \55\ The standard for dismissal--
    substantial abuse--is inherently vague, which has lead to its
    disparate interpretation and application by the bankruptcy
    bench.\56\ Some courts, for example, hold that a debtor's
    ability to repay a significant portion of his or her debts out
    of future income constitutes substantial abuse and therefore is
    cause for dismissal; \57\ others do not.\58\ A further reason
    militating against filing section 707(b) motions is that the
    Bankruptcy Code codifies a presumption that favors granting a
    debtor a discharge.\59\
    ---------------------------------------------------------------------------
        \55\ 11 U.S.C. Sec. 707(b).
        \56\ See, e.g., David White, Disorder in the Court: Section 707(b)
    of the Bankruptcy Code, 1995-96 ANN. SURVEY OF BANKR. L. 333, 355
    (1996) (noting that the courts ``have taken divergent views in an
    attempt to define the term'' and have resorted to ``a variety of
    methods'' in applying it to specific cases); Robert C. Furr & Marc P.
    Barmat, 11 U.S.C. Section 707(b)--The U.S. Trustee's Weapon Against
    Abuse, Nat'l Ass'n Bankr. Trustees (NABTalk) 11, 14 (Winter 2002-03).
        \57\ See, e.g., Zolg v. Kelly (In re Kelly), 841 F.2d 908, 913-14
    (9th Cir. 1988) (observing that the ``principal factor to be considered
    in determining substantial abuse is the debtor's ability to repay debts
    for which a discharge is sought'').
        \58\ See, e.g., In re Braley, 103 B.R. 758 (Bankr. E.D. Va. 1989),
    aff'd, 110 B.R. 211 (E.D. Va. 1990). Notwithstanding the fact that the
    debtors in Braley had disposable monthly income of nearly $2,700, the
    bankruptcy court did not dismiss the case for substantial abuse. Id. at
    760. The court concluded, ``Based upon this legislative history, we are
    persuaded that no future income tests exists [sic] in 707(b) and if it
    did, as a finding of fact, the Braley family has insufficient future
    income to merit barring the door in light of the circumstances of this
    Navy family.'' Id. at 762.
        \59\ Section 707(b) of the Bankruptcy Code mandates that ``[t]here
    shall be a presumption in favor of granting the relief requested by the
    debtor.'' 11 U.S.C. Sec. 707(b).
    ---------------------------------------------------------------------------
        Over the course of its hearings since the 105th Congress,
    the Committee received testimony explaining that if needs-based
    reforms and other measures were implemented, the rate of
    repayment to creditors would increase as more debtors were
    shifted into chapter 13 (a form of bankruptcy relief where the
    debtor commits to repay a portion or all of his debts in
    exchange for receiving a broad discharge of debt) as opposed to
    chapter 7 (a form of bankruptcy relief where the debtor
    receives an immediate discharge of personal liability on
    certain debts in exchange for turning over his or her nonexempt
    assets to the bankruptcy trustee for distribution to
    creditors).
        Needs-based reforms would amend section 707(b) of the
    Bankruptcy Code to permit a court, on its own motion, or on
    motion of the United States trustee, private trustee,
    bankruptcy administrator, or other party in interest (including
    a creditor), to dismiss a chapter 7 case for abuse if it was
    filed by an individual debtor whose debts are primarily
    consumer debts. Alternatively, the chapter 7 case could be
    converted to a case under chapter 11 or chapter 13 on consent
    of the debtor.
        In addition, these reforms contemplate replacing the
    current law's presumption in favor of the debtor with a
    mandatory presumption of abuse that would arise under certain
    conditions. As amended, section 707(b) of the Bankruptcy Code
    would require a court to presume that abuse exists if the
    amount of the debtor's remaining income, after certain expenses
    and other specified amounts are deducted from the debtor's
    current monthly income (a defined term) \60\ when multiplied by
    60, exceeds the lower of the following: (1) 25 percent of the
    debtor's nonpriority unsecured claims, or $6000 (whichever is
    greater); or (2) $10,000. Section 102 mandates that the
    debtor's expenses include reasonably necessary expenditures for
    health insurance, disability insurance, and health savings
    accounts for the debtor, the debtor's spouse, and dependents of
    the debtor. In addition, the debtor's expenses must include
    those incurred to maintain the safety of the debtor and the
    debtor's family from family violence as identified in section
    309 of the Family Violence Prevention and Services Act or other
    applicable law. In addition to other specified expenses,\61\
    the debtor's monthly expenses--exclusive of any payments for
    debts (unless otherwise permitted)--must be the applicable
    monthly amounts set forth in the Internal Revenue Service
    Financial Analysis Handbook \62\ as Necessary Expenses \63\
    under the National \64\ and Local Standards \65\ categories and
    the debtor's actual monthly expenditures for items categorized
    as Other Necessary Expenses.\66\
    ---------------------------------------------------------------------------
        \60\ Section 102(b) of the bill defines ``current monthly income''
    as 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 it is taxable income, in the six-month period
    preceding the bankruptcy filing. It includes any amount paid on a
    regular basis by any entity (other than the debtor or, in a joint case,
    the debtor and the debtor's spouse) to the household expenses of the
    debtor or the debtor's dependents and, in a joint case, the debtor's
    spouse, if not otherwise a dependent. It excludes Social Security Act
    benefits and payments to victims of war crimes or crimes against
    humanity on account of their status as victims of such crimes. It also
    excludes payments to victims of international terrorism or domestic
    terrorism (as defined in 18 U.S.C. Sec. 2331) on account of their
    status as victims of such terrorism.
        \61\ Under section 102(a), a debtor's monthly expenses may also
    include:

     an additional five percent of the food and clothing expense
    allowances under the Internal Revenue Service National Standards
    ---------------------------------------------------------------------------
    expenses category, if demonstrated to be reasonable and necessary;

     the debtor's average monthly payments on account of secured
    debts, including any additional payments to secured creditors that a
    chapter 13 debtor must make to retain possession of a debtor's primary
    residence, motor vehicle, or other property necessary for the support
    of the debtor and the debtor's dependents that collateralizes such
    debts;

     claims and expenses entitled to priority under section 507 of
    the Bankruptcy Code, such as child support and alimony;

     the continuation of actual expenses paid by the debtor that
    are reasonable and necessary for the care and support of an elderly,
    chronically ill, or disabled household member or member of the debtor's
    immediate family who is otherwise unable to pay such expenses;

     housing and utility expenses in excess of those specified by
    the Internal Revenue Service, under certain circumstances;

     the actual administrative expenses (including reasonable
    attorneys' fees) of administering a chapter 13 plan for the district in
    which the debtor resides up to ten percent of projected plan payments,
    as determined under schedules issued by the Executive Office for United
    States Trustees; and

     the actual expenses for each dependent child under the age of
    18 years up to $1,500 per year per child to attend a private elementary
    or secondary school, under certain circumstances.
    ---------------------------------------------------------------------------
        \62\ Internal Revenue Service, Internal Revenue Manual--Financial
    Analysis Handbook pt. 5.15.1 (rev. May 1, 2004).
        \63\ The Internal Revenue Manual defines the term ``necessary
    expenses'' as expenses:

          that are necessary to provide for a taxpayer's and his or
          her family's health and welfare and/or production of
          income. The expenses must be reasonable. The total
          necessary expenses establish the minimum a taxpayer and
    ---------------------------------------------------------------------------
          family need to live.

    Id. at pt. 5.15.1.7.
    ---------------------------------------------------------------------------
        \64\ The Internal Revenue Manual's ``National Standards'' establish
    standards for five types of expenses: food (includes all meals, home
    and away), housekeeping supplies (includes laundry and cleaning
    supplies; other household products such as cleaning and toilet tissue,
    paper towels and napkins; lawn and garden supplies; postage and
    stationary), apparel and services (includes shoes and clothing, laundry
    and dry cleaning, and shoe repair), personal care products and services
    (includes hair care products, haircuts, oral hygiene products, electric
    personal care appliances), and miscellaneous (a discretionary allowance
    of $100 for one person and $25 for each additional person in a
    taxpayer's family). Except for miscellaneous expenses, these expense
    standards are derived from Bureau of Labor Statistics Consumer
    Expenditure Survey and are stratified by income and household size. Id.
    at pt. 5.15.1.8.
        \65\ ``Local Standards,'' under the Internal Revenue Manual,
    establish expense standards for housing (e.g., mortgage or rent,
    property taxes, interest, parking, necessary maintenance and repair,
    homeowner's or renter's insurance, and homeowner dues and condominium
    fees) and transportation expenditures (e.g., vehicle insurance, vehicle
    payment, maintenance, fuel, state and local registration, parking fees,
    tolls, driver's license fees, and public transportation). Utilities
    (e.g., gas, electricity, water, fuel, oil, bottled gas, wood and other
    fuels, trash and garbage collection, septic cleaning, and telephone)
    are included under the housing expense category. Housing standards are
    established for each county within a state. Transportation standards
    are determined on a regional basis. Id. at pt. 5.15.1.9.
        \66\ The Internal Revenue Manual does not establish monetary
    amounts with regard to necessary expenses that it characterizes as
    ``Other Expenses.'' Rather, it provides a non-exclusive list of these
    expenses, that must otherwise satisfy the ``necessary expense test,''
    described in note 63 supra. The list includes expenditures for certain
    accounting and legal fees, child care, dependent care for an elderly or
    disabled person, health care, taxes, court-ordered payments, life
    insurance, involuntary deductions (e.g., union dues, uniforms, work
    shoes), charitable contributions, and certain education expenses. Id.
    at pt. 5.15.1.10.
    ---------------------------------------------------------------------------
        The means test permits the mandatory presumption of abuse
    to be rebutted only if: (1) the debtor demonstrates special
    circumstances justifying any additional expense or adjustment
    to the debtor's current monthly income for which there is no
    reasonable alternative; and (2) such additional expense or
    income adjustment caused the debtor's current monthly income
    (reduced by various amounts) when multiplied by 60 to be less
    than the lesser of either: (i) 25 percent of the debtor's
    nonpriority unsecured claims, or $6,000 (whichever is greater),
    or (ii) $10,000.\67\ Special circumstances include such factors
    as whether the debtor has a serious medical condition or is on
    active duty in the Armed Services to the extent these factors
    justify adjustment to income or expenses.
    ---------------------------------------------------------------------------
        \67\ The debtor must itemize and provide documentation of each
    additional expense or income adjustment as well as explain the special
    circumstances that make such expense or income adjustment reasonable
    and necessary. In addition, the debtor must attest under oath to the
    accuracy of any information provided to demonstrate that such
    additional expenses or adjustments to income are required.
    ---------------------------------------------------------------------------
        Where the mandatory presumption of abuse does not apply or
    has been rebutted, the court, in order to determine whether the
    granting of relief under chapter 7 would constitute an abuse,
    must consider: (1) whether the debtor filed the chapter 7 case
    in bad faith; or (2) whether the totality of circumstances of
    the debtor's financial situation (including whether the debtor
    seeks to reject a personal services contract and the financial
    need for such rejection) demonstrates abuse.
        Should a court grant a section 707(b) motion made by a
    trustee and find that the action of the debtor's counsel in
    filing the chapter 7 case violated Federal Rule of Bankruptcy
    Procedure 9011,\68\ S. 256 authorizes the court to order the
    attorney to reimburse the trustee for all reasonable costs in
    prosecuting the motion, including reasonable attorneys' fees.
    In addition, the court may assess an appropriate civil
    penalty.\69\
    ---------------------------------------------------------------------------
        \68\ Fed. R. Bankr. P. 9011. This rule is the bankruptcy analog to
    Federal Rule of Civil Procedure 11, which authorizes a court to impose
    sanctions against an attorney or party who commences a frivolous
    actions or files other inappropriate documents in violation of this
    Rule's requirements.
        \69\ Section 102(a) of S. 256 specifies that the signature of an
    attorney on a bankruptcy petition, pleading, or written motion
    constitutes a certification that the attorney has: (1) performed a
    reasonable investigation into the circumstances giving rise to such
    petition, pleading or motion; and (2) determined that the document is
    well grounded in fact and warranted by existing law or a good faith
    argument for the extension, modification, or reversal of existing law;
    and does not constitute an abuse under section 707(b)(1) of the
    Bankruptcy Code. Pursuant to section 102(a), the signature of an
    attorney on a bankruptcy petition constitutes a certification that the
    attorney has no knowledge after an inquiry that the information in the
    schedules filed with such petition is incorrect.
    ---------------------------------------------------------------------------
        Two types of ``safe harbors'' apply to the means test. One
    provides that only a judge, United States trustee, bankruptcy
    administrator, or private trustee may file a motion to dismiss
    a chapter 7 case under section 707(b) of the Bankruptcy Code if
    the debtor's income (or in a joint case, the income of debtor
    and the debtor's spouse) does not exceed the state median
    family income for a family of equal or lesser size (adjusted
    for larger sized families), or the state median family income
    for one earner in the case of a one-person household. The
    second safe harbor provides that no motion under section
    707(b)(2) (dismissal based on a chapter 7 debtor's ability to
    repay) may be filed by a judge, United States trustee,
    bankruptcy administrator, private trustee, or other party in
    interest if the debtor (including the circumstance where the
    debtor is a veteran) and the debtor's spouse combined have
    income that does not exceed the state median family income for
    a family of equal or lesser size (adjusted for larger sized
    families), or the state median family income for one earner in
    the case of a one-person household.\70\ In addition, the bill
    includes a safe harbor from the bill's needs-based test for a
    disabled veteran whose indebtedness occurred primarily during a
    period when the individual was on active duty (as defined in 10
    U.S.C. Sec. 101(d)(1)) or performing a homeland defense
    activity (as defined in 32 U.S.C. Sec. 901(1)).
    ---------------------------------------------------------------------------
        \70\  In a case that is not a joint case, current monthly income of
    the debtor's spouse is not considered if the debtor and the debtor's
    spouse are separated under applicable nonbankruptcy law or the debtor
    and the debtor's spouse are living separate and apart (other than for
    the purpose of evading this provision) and the debtor files a statement
    under penalty of perjury containing certain specified information.
    ---------------------------------------------------------------------------
        Other Reforms Dealing with Abuse. S. 256 contains various
    reforms tailored to remedy certain types of fraud and abuse
    within the present bankruptcy system. For example, the bill
    substantially limits a debtor's ability to file successive
    bankruptcy cases. It also addresses abusive practices by
    consumer debtors who, for example, knowingly load up with
    credit card purchases or recklessly obtain cash advances and
    then file for bankruptcy relief. In addition, S. 256 prevents
    the discharge of debts based on fraud, embezzlement, and
    malicious injury in a chapter 13 case. Other abuse reforms
    include a provision authorizing the court to dismiss a chapter
    7 case filed by an individual debtor convicted of a crime of
    violence or a drug trafficking crime on motion of the victim,
    under certain circumstances. And, the court, as a condition of
    confirming a chapter 13 plan, must find that the debtor filed
    the chapter 13 case in good faith.
        The bill also restricts the so-called ``mansion loophole.''
    Under current bankruptcy law, debtors living in certain states
    can shield from their creditors virtually all of the equity in
    their homes. In light of this, some debtors actually relocate
    to these states just to take advantage of their ``mansion
    loophole'' laws. S. 256 closes this loophole for abuse by
    requiring a debtor to be a domiciliary in the state for at
    least two years before he or she can claim that state's
    homestead exemption; the current requirement can be as little
    as 91 days.\71\ The bill further reduces the opportunity for
    abuse by requiring a debtor to own the homestead for at least
    40 months before he or she can use state exemption law; current
    law imposes no such requirement.\72\ S. 256 prevents securities
    law violators and others who have engaged in criminal conduct
    from shielding their homestead assets from those whom they have
    defrauded or injured. If a debtor was convicted of a felony,
    violated a securities law, or committed a criminal act,
    intentional tort, or engaged in reckless misconduct that caused
    serious physical injury or death, the bill overrides state
    homestead exemption law and caps the debtor's homestead
    exemption at $125,000. To the extent a debtor's homestead
    exemption was obtained through the fraudulent conversion of
    nonexempt assets (e.g., cash) during the ten-year period
    preceding the filing of the bankruptcy case, S. 256 requires
    such exemption to be reduced by the amount attributable to the
    debtor's fraud.
    ---------------------------------------------------------------------------
        \71\ See 11 U.S.C. Sec. 522(b)(2)(2)(A).
        \72\ If the debtor owns the homestead for less than 40 months, the
    provision imposes a $125,000 homestead cap. In effect, this provision
    overrides state exemption law authorizing a homestead exemption in
    excess of this amount and allows such law to control if it authorizes a
    homestead exemption in a lesser amount.
    ---------------------------------------------------------------------------
        S. 256 also authorizes a trustee to avoid any transfer of
    property that a debtor made to a self-settled trust (of which
    the debtor is a beneficiary) within the ten-year period
    preceding the filing of the debtor's bankruptcy case if the
    debtor made the transfer with actual intent to hinder, delay,
    or defraud a creditor of the debtor.
        Protections for Creditors--In General. S. 256 includes
    provisions intended to provide greater protections for
    creditors, while ensuring that the claims of those creditors
    entitled to priority treatment, such as spousal and child
    support claimants, are not adversely impacted. These include
    provisions: (1) ensuring that creditors receive proper and
    timely notice of important events and proceedings in a
    bankruptcy case; (2) prohibiting abusive serial filings and
    extending the period between successive discharges; and (3)
    implementing various provisions designed to improve the
    accuracy of the information contained in debtors' schedules,
    statements of financial affairs. They also clarify that
    creditors holding consumer debts may participate without
    counsel at the section 341 meeting of creditors (which provides
    an opportunity for creditors to examine the debtor under oath).
        Enforcement of Family Support Obligations. S. 256 accords
    domestic and child support claimants a broad spectrum of
    special protections. The legislation creates a uniform and
    expanded definition of domestic support obligations to include
    debts that accrue both before or after a bankruptcy case is
    filed. It gives the highest payment priority for these debts
    (current law only accords them a seventh-level priority),\73\
    with allowance for the payment of trustee administrative
    expenses, under certain conditions. In addition, the bill
    mandates that a debtor must be current on postpetition domestic
    support obligations to confirm a chapter 11, chapter 12 (family
    farmer) or chapter 13 plan of reorganization. To facilitate the
    domestic support collection efforts by governmental units, the
    legislation creates various exceptions to automatic stay
    provisions of the Bankruptcy Code (which enjoin many forms of
    creditor collection activities). It also broadens the
    categories of nondischargeable family support obligations with
    the result that these debts will not be extinguished at the end
    of the bankruptcy process. The legislation, in addition,
    mandates that spousal and child support claimants as well as
    state child support agencies receive specified information and
    notices relevant to pending bankruptcy cases.
    ---------------------------------------------------------------------------
        \73\ 11 U.S.C. Sec. 507(a)(7).
    ---------------------------------------------------------------------------
        Protections for Secured Creditors. S. 256's protections for
    secured creditors include a prohibition against bifurcating a
    secured debt incurred within the 910-day period preceding the
    filing of a bankruptcy case if the debt is secured by a
    purchase money security interest in a motor vehicle acquired
    for the debtor's personal use. Where the collateral consists of
    any other type of property having value, S. 256 prohibits
    bifurcation of specified secured debts if incurred during the
    one-year period preceding the filing of the bankruptcy case.
    The bill clarifies current law to specify that the value of a
    claim secured by personal property is the replacement value of
    such property without deduction for the secured creditor's
    costs of sale or marketing. In addition, the bill terminates
    the automatic stay with respect to personal property if the
    debtor does not timely reaffirm the underlying obligation or
    redeem the property.\74\ S. 256 also specifies that a secured
    claimant retains its lien in a chapter 13 case until the
    underlying debt is paid or the debtor receives a discharge.
    ---------------------------------------------------------------------------
        \74\ Redemption is a method by which a chapter 7 debtor can retain
    certain types of personal property by paying the holder of a lien on
    such property the allowed amount of the holder's secured lien. 11
    U.S.C. Sec. 722.
    ---------------------------------------------------------------------------
        Protections for Lessors. With respect to the interests of
    lessors, S. 256 requires chapter 13 debtors to remain current
    on their personal property leases and to provide proof of
    adequate insurance. The bill specifies that a lessor may
    condition assumption of a personal property lease on cure of
    any outstanding default and it provides that a lessor is not
    required to permit such assumption. The bill also addresses a
    problem faced by thousands of large and small residential
    landlords across the nation whose tenants file for bankruptcy
    relief solely for the purpose of staying pending eviction
    proceedings so that they can live ``rent free.''
        Consumer Debtor Bankruptcy Protections. The bill's consumer
    protections include provisions strengthening professionalism
    standards for attorneys and others who assist consumer debtors
    with their bankruptcy cases. S. 256 mandates that certain
    services and specified notices be given to consumers by
    professionals and others who provide bankruptcy assistance. To
    ensure compliance with these provisions, the bill institutes
    various enforcement mechanisms.
        In addition, S. 256 amends the Truth in Lending Act to
    require certain credit card solicitations, monthly billing
    statements, and related materials to include important
    disclosures and explanatory statements regarding introductory
    interest rates and minimum payments, among other matters. These
    additional disclosures are intended to give debtors important
    information to enable them to better manage their financial
    affairs.
        S. 256 contains provisions to help debtors better
    understand their rights and obligations with respect to
    reaffirmation agreements. To enforce these protections, the
    bill requires the Attorney General to designate a United States
    Attorney for each judicial district and a FBI agent for each
    field office to have primary law enforcement responsibility
    regarding abusive reaffirmation practices, among other matters.
        The legislation also expands a debtor's ability to exempt
    certain tax-qualified retirement accounts and pensions. It
    creates a new provision that allows a consumer debtor to exempt
    certain education IRAs and state tuition plans for his or her
    child's postsecondary education from the claims of creditors.
        Most importantly, S. 256 requires debtors to participate in
    credit counseling programs before filing for bankruptcy relief
    (unless special circumstances do not permit such
    participation). The legislation's credit counseling provisions
    are intended to give consumers in financial distress an
    opportunity to learn about the consequences of bankruptcy--such
    as the potentially devastating effect it can have on their
    credit rating \75\--before they decide to file for bankruptcy
    relief. The bill also requires debtors, after they file for
    bankruptcy relief, to receive financial management training
    that will provide them with guidance about how to manage their
    finances, so that they can avoid future financial difficulties.
    The mandatory credit counseling and financial management
    training requirements do not apply if the debtor is unable to
    complete these requirements because of incapacity or
    disability, or because he or she is on active duty in a
    military combat zone.
    ---------------------------------------------------------------------------
        \75\ Under current law, for example, a bankruptcy filing may be
    reported on a consumer's credit report for ten years. 15 U.S.C.
    Sec. 1681c (2002).
    ---------------------------------------------------------------------------
        Other debtor protections include expanded notice
    requirements for consumers. Under the bill, individuals with
    primarily consumer debts must receive notice of alternatives to
    bankruptcy relief before they file for bankruptcy and it
    requires them to be informed of other matters pertaining to the
    integrity of the bankruptcy system. The legislation also
    permits certain filing fees and related charges to be waived,
    in appropriate cases, for individuals who lack the ability to
    pay these costs.
    Highlights of Business Bankruptcy Reforms.
        S. 256 contains a comprehensive set of reforms pertinent to
    business bankruptcies. They include provisions addressing the
    special problems presented by small business bankruptcies and
    single asset real estate debtors as well as provisions dealing
    with business bankruptcy cases in general. S. 256 establishes a
    new form of bankruptcy relief for transnational insolvencies
    intended to promote international comity and greater certainty.
    It also includes provisions concerning the treatment of certain
    financial contracts under the banking laws as well as under the
    Bankruptcy Code. S. 256 responds to the special needs of family
    farmers by making chapter 12 of the Bankruptcy Code (a form of
    bankruptcy relief available only to eligible family farmers)
    permanent. For the first time, it also allows certain family
    fishermen to qualify for chapter 12 relief.
        Protections Against Excessive Payments To a Debtor's
    Insiders and Fraud by a Debtor's Management. S. 256
    significantly restricts a corporate debtor's ability to pay
    bonuses, severance payments, and other payments to insiders of
    the debtor after the bankruptcy case is filed and requires the
    court to approve any such payment. In addition, it requires the
    United States trustee to apply for the appointment of a trustee
    if there are reasonable grounds to suspect that current members
    of a chapter 11 debtor's governing body, chief executive
    officer, chief financial officer, or members of the debtor's
    governing body who selected the debtor's chief executive
    officer or chief financial officer participated in actual
    fraud, dishonesty, or criminal conduct in the management of the
    debtor or the debtor's public financial reporting.
        Protections for Employees. S. 256 provides heightened
    protections for employees. It requires certain back pay awards
    granted as a result of a debtor's violation of Federal or state
    law to receive one of the highest payment priorities in a
    bankruptcy case. In addition, the bill streamlines the
    appointment of an ERISA administrator for an employee benefit
    plan, under certain circumstances, to minimize the disruption
    that results when an employer files for bankruptcy relief. S.
    256 also 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. The bill amends the
    Bankruptcy Code to facilitate the recovery of avoidable
    transfers and excessive pre- and post-petition compensation,
    such as bonuses, paid to insiders of a debtor. In addition, S.
    256 limits the ability of chapter 11 debtors to unilaterally
    terminate retiree benefit plans on the eve of bankruptcy.
        Small Business/Single Asset Real Estate Debtors. S. 256
    includes provisions with respect to small business and single
    asset real estate debtors largely derived from recommendations
    of the National Bankruptcy Review Commission.\76\
    ---------------------------------------------------------------------------
        \76\ See generally Report of the National Bankruptcy Review
    Commission, at 303-706 (Oct. 20, 1997).
    ---------------------------------------------------------------------------
        Most chapter 11 cases are filed by small business debtors.
    Although the Bankruptcy Code envisions that creditors should
    play a major role in the oversight of chapter 11 cases, this
    often does not occur with respect to small business debtors.
    The main reason is that creditors in these smaller cases do not
    have claims large enough to warrant the time and money to
    participate actively in these cases. The resulting lack of
    creditor oversight creates a greater need for the United States
    trustee to monitor these cases closely. Nevertheless, the
    monitoring of these debtors by United States trustees varies
    throughout the nation. S. 256 addresses the special problems
    presented by small business cases by instituting a variety of
    time frames and enforcement mechanisms designed to weed out
    small business debtors who are not likely to reorganize. It
    also requires these cases to be more actively monitored by
    United States trustees and the bankruptcy courts.
        With regard to the Bankruptcy Code's treatment of single
    asset real estate debtors, S. 256 makes several amendments.
    First, it eliminates the monetary cap from the single asset
    real estate debtor definition. Second, it makes these debtors
    subject to the bill's small business reforms. Third, S. 256
    amends the automatic stay provisions by permitting a single
    asset real estate debtor to make requisite interest payments
    out of rents or other proceeds generated by the real property.
        Financial Contracts. S. 256 contains a series of provisions
    pertaining to the treatment of certain financial transactions
    under the Bankruptcy Code and relevant banking laws.\77\ These
    provisions are intended to reduce ``systemic risk'' in the
    banking system and financial marketplace.\78\ To minimize the
    risk of disruption when parties to these transactions become
    bankrupt or insolvent, the bill amends provisions of the
    banking and investment laws, as well as the Bankruptcy Code, to
    allow the expeditious termination or netting of certain types
    of financial transactions. Many of these provisions are derived
    from recommendations issued by the President's Working Group on
    Financial Markets \79\ and revisions espoused by the financial
    industry.
    ---------------------------------------------------------------------------
        \77\ In addition to the Bankruptcy Code, the bill amends the
    Federal Deposit Insurance Act, the Financial Institutions Reform,
    Recovery and Enforcement Act of 1989, the Federal Deposit Insurance
    Corporation Improvement Act of 1991, the Federal Reserve Act, and the
    Securities Investor Protection Act of 1971.
        \78\ The report on H.R. 4393, a bill substantially similar to title
    IX of S. 256 that was introduced in the 105th Congress, explained as
    follows:

          Systemic risk is the risk that the failure of a firm or
          disruption of a market or settlement system will cause
          widespread difficulties at other firms, in other market
          segments or in the financial system as a whole. If
          participants in certain financial activities are unable to
          enforce their rights to terminate financial contracts with
          an insolvent entity in a timely manner, or to offset or net
          their various contractual obligations, the resulting
          uncertainty and potential lack of liquidity could increase
    ---------------------------------------------------------------------------
          the risk of an inter-market disruption.

    H.R. Rep. No. 105-688, pt. 1, at 2 (1998).
    ---------------------------------------------------------------------------
        \79\ The Working Group's members included representatives from the
    Commodity Futures Trading Commission, the Federal Deposit Insurance
    Corporation, the Board of Governors of the Federal Reserve System, the
    Federal Reserve Bank of New York, the Securities and Exchange
    Commission, and the Department of the Treasury, including the Office of
    the Comptroller of the Currency. Id. at 1.
    ---------------------------------------------------------------------------
        Family Farmers and Family Fishermen. S. 256 helps small
    family farmers facing financial distress. While current
    bankruptcy law has a specialized form of bankruptcy relief--
    chapter 12--that is specifically designed for family farmers,
    its benefits for farmers are limited because of its restrictive
    eligibility requirements. S. 256 responds to this problem in
    several key respects: it more than doubles the debt eligibility
    limit and requires it to be periodically adjusted for
    inflation; it lowers the requisite percentage of a farmer's
    income that must be derived from farming operations; and it
    gives farmers more flexibility with respect to how certain
    creditors can be repaid. As a result, many more deserving
    family farmers facing financial hard times will be able to
    avail themselves of chapter 12. In addition, S. 256 makes
    chapter 12 a permanent component of the bankruptcy laws and
    extends the benefits of this form of bankruptcy relief to
    family fishermen.
        Transnational Insolvencies. In response to the increasing
    globalization of business enterprises and operations, S. 256
    establishes a separate chapter under the Bankruptcy Code
    devoted to transnational insolvencies. These provisions are
    intended to provide greater legal certainty for trade and
    investment as well as to provide for the fair and efficient
    administration of these cases. They reflect consensus
    recommendations of the National Bankruptcy Review
    Commission.\80\
    ---------------------------------------------------------------------------
        \80\ Report of the National Bankruptcy Review Commission, at 351-70
    (Oct. 20, 1997).
    ---------------------------------------------------------------------------
        Protections for Small Business Owners. Under current
    bankruptcy law, a business can be sued by a bankruptcy trustee
    and forced to pay back--as a preferential transfer--monies
    previously paid to it by a firm that later files for bankruptcy
    protection. S. 256 contains provisions making it easier--
    particularly for small businesses--to defend against these
    suits. These provisions largely reflect recommendations of the
    National Bankruptcy Review Commission.\81\
    ---------------------------------------------------------------------------
        \81\ Id. at 793-803.
    ---------------------------------------------------------------------------
        Health Care Providers. S. 256 adds a provision to the
    Bankruptcy Code intended to give patients of bankrupt health
    care providers various protections. These include provisions
    specifying requirements for the disposal of patient records so
    that a patient's privacy and the confidentiality of such
    records when they are in the custody of a health care business
    in bankruptcy are protected. In addition, the bill includes a
    provision according administrative expense priority to the
    actual, necessary costs and expenses of closing a health care
    business (including the disposal of patient records or
    transferral of patients) incurred by a trustee, Federal agency,
    or a department or state agency. If warranted, it also
    authorizes the court to order the appointment of an ombudsman
    to monitor the quality of patient care and to represent the
    interests of the patients. Other provisions include the
    requirement that a bankruptcy trustee use all reasonable and
    best efforts to transfer patients from a health care business
    that is being closed to an appropriate alternative facility
    that meets certain specified criteria.

    Other Provisions Having General Impact.
        Privacy Protections. Under current law, nearly every item
    of information filed in a bankruptcy case is made available to
    the public. S. 256 restricts public access to certain personal
    information pertaining to an individual contained a bankruptcy
    case file to the extent the court finds that disclosure of such
    information would create undue risk of identity theft or other
    unlawful injury to the individual or the individual's property.
    In addition, the bill prohibits the disclosure of the names of
    the debtor's minor children and requires such information to be
    kept in a nonpublic record, which can be made available for
    inspection only by the court and certain other designated
    entities. Further, S. 256 prohibits the sale of customers'
    personally identifiable information by a business debtor unless
    certain conditions are satisfied.
        Additional Bankruptcy Judgeships. S. 256 authorizes 28
    additional bankruptcy judgeships on a temporary basis and
    extends three currently existing temporary judgeships.\82\ This
    provision responds to the 59 percent increase in the caseload
    of bankruptcy judges since 1992, reported by the Administrative
    Office of the United States Courts.\83\
    ---------------------------------------------------------------------------
        \82\ Districts authorized additional bankruptcy judgeships under S.
    256 include the following: Eastern District of California (one),
    Central District of California (three), Delaware (four), Southern
    District of Florida (two), Southern District of Georgia (one), Maryland
    (three), Eastern District of Michigan (one), Southern District of
    Mississippi (one), New Jersey (one), Nevada (one), Eastern District of
    New York (one), Northern District of New York (one), Southern District
    of New York (one), Eastern District of North Carolina (one), Eastern
    District of Pennsylvania (one), Middle District of Pennsylvania (one),
    Puerto Rico (one), South Carolina (one), Western District of Tennessee
    (one), Eastern District of Virginia (one).
        \83\ Press Release, Administrative Office of the U.S. Courts,
    Record Breaking Bankruptcy Filings Reported in Calendar Year 2002 (Feb.
    14, 2003) (noting that ``no new bankruptcy judgeships have been created
    since 1992'').
    ---------------------------------------------------------------------------
        Miscellaneous Provisions. Under current law, an appeal from
    a bankruptcy court decision must be heard by a Federal district
    court or bankruptcy appellate panel before it may be heard by a
    Federal court of appeals. S. 256 authorizes a direct appeal
    from a bankruptcy court decision to the court of appeals, under
    certain circumstances. Other general provisions include
    allowing attorneys to share compensation with bona fide public
    service attorney referral programs, and mandating that a
    bankruptcy court conduct scheduling conferences in a bankruptcy
    case if necessary to further its expeditious and economical
    resolution. In addition, the bill requires the United States
    Trustee Program to compile various statistics regarding chapter
    7, 11 and 13 cases and to make these data available to the
    public. S. 256 also permits a court to seal all public records
    pertaining to a fraudulent involuntary bankruptcy petition,
    under certain circumstances, and to prohibit a consumer
    reporting agency from issuing a consumer report containing any
    reference to such petition.

                                    Hearings

        The Committee on the Judiciary held no hearings on S. 256.

                            Committee Consideration

        On March 16, 2005, the Committee met in open session and
    ordered favorably reported the bill S. 256 without an amendment
    by a recorded vote of 22 to 13, a quorum being present.

                             Votes of the Committee

        In compliance with clause 3(b) of rule XIII of the Rules of
    the House of Representatives, the Committee notes that the
    following roll call votes occurred during the Committee's
    consideration of S. 256.
        1. An amendment by Mr. Conyers disallowing: (a) claims
    resulting from an assignment of a debtor's right to receive
    military pay, or military pension or disability benefits; (b)
    certain claims owed by a servicemember or a dependent of a
    servicemember that are either secured or conditioned upon a
    personal check held for future deposit or electronic access to
    a bank account; or (3) claims owed by a servicemember or
    dependent of a servicemember requiring the payment of interest
    and other charges in excess of 36 percent. The amendment also
    allows the discharge of certain debts based on the debtor's
    right to receive military pay, or military pension or
    disability benefits. Defeated 15 to 20.

                                                       ROLLCALL NO. 1
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................                              X
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................
    Mr. Chabot......................................................                              X
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................                              X
    Mr. Inglis......................................................                              X
    Mr. Hostettler..................................................                              X
    Mr. Green.......................................................
    Mr. Keller......................................................                              X
    Mr. Issa........................................................                              X
    Mr. Flake.......................................................                              X
    Mr. Pence.......................................................                              X
    Mr. Forbes......................................................                              X
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................                              X
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................              X
    Mr. Boucher.....................................................
    Mr. Nadler......................................................              X
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................              X
    Ms. Jackson Lee.................................................              X
    Ms. Waters......................................................              X
    Mr. Meehan......................................................              X
    Mr. Delahunt....................................................              X
    Mr. Wexler......................................................
    Mr. Weiner......................................................              X
    Mr. Schiff......................................................              X
    Ms. Sanchez.....................................................              X
    Mr. Smith.......................................................              X
    Mr. Van Hollen..................................................              X
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................             15              20
    ----------------------------------------------------------------------------------------------------------------

        2. An amendment by Mr. Watt and Mr. Delahunt disallowing a
    claim for a debt based on an extension of credit on which the
    annual rate of interest in excess of 50 percent was imposed or
    in excess of a limit on allowable interest under applicable
    nonbankruptcy law. Defeated 9 to 15.

                                                       ROLLCALL NO. 2
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................                              X
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................
    Mr. Chabot......................................................                              X
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................
    Mr. Inglis......................................................
    Mr. Hostettler..................................................                              X
    Mr. Green.......................................................                              X
    Mr. Keller......................................................
    Mr. Issa........................................................                              X
    Mr. Flake.......................................................
    Mr. Pence.......................................................
    Mr. Forbes......................................................
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................                              X
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................
    Mr. Boucher.....................................................
    Mr. Nadler......................................................              X
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................              X
    Ms. Waters......................................................
    Mr. Meehan......................................................              X
    Mr. Delahunt....................................................              X
    Mr. Wexler......................................................
    Mr. Weiner......................................................
    Mr. Schiff......................................................              X
    Ms. Sanchez.....................................................              X
    Mr. Smith (Washington)..........................................
    Mr. Van Hollen..................................................
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................              9              15
    ----------------------------------------------------------------------------------------------------------------

        3. An amendment by Mr. Watt amending section 102 of the
    bill to permit a debtor to claim as an expense, in addition to
    elementary and secondary school educational expenses, the
    actual tuition costs per each child (exclusive of room and
    board) to attend a postsecondary education institution, and
    certain other educational programs. Defeated 10 to 17.

                                                       ROLLCALL NO. 3
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................
    Mr. Chabot......................................................                              X
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................                              X
    Mr. Inglis......................................................
    Mr. Hostettler..................................................                              X
    Mr. Green.......................................................                              X
    Mr. Keller......................................................                              X
    Mr. Issa........................................................                              X
    Mr. Flake.......................................................
    Mr. Pence.......................................................
    Mr. Forbes......................................................
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................                              X
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................
    Mr. Boucher.....................................................                              X
    Mr. Nadler......................................................              X
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................              X
    Ms. Waters......................................................
    Mr. Meehan......................................................              X
    Mr. Delahunt....................................................              X
    Mr. Wexler......................................................
    Mr. Weiner......................................................              X
    Mr. Schiff......................................................              X
    Ms. Sanchez.....................................................              X
    Mr. Smith (Washington)..........................................
    Mr. Van Hollen..................................................
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................             10              17
    ----------------------------------------------------------------------------------------------------------------

        4. An amendment by Mr. Nadler amending sections 404, 411,
    417, 436, 437, and 438 of the bill to permit the court, under
    specified circumstances, to extend certain time periods
    specified therein. Defeated 13 to 18.

                                                       ROLLCALL NO. 4
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................                              X
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................
    Mr. Chabot......................................................                              X
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................                              X
    Mr. Inglis......................................................                              X
    Mr. Hostettler..................................................                              X
    Mr. Green.......................................................                              X
    Mr. Keller......................................................                              X
    Mr. Issa........................................................                              X
    Mr. Flake.......................................................
    Mr. Pence.......................................................
    Mr. Forbes......................................................
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................                              X
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................              X
    Mr. Boucher.....................................................
    Mr. Nadler......................................................              X
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................
    Ms. Waters......................................................              X
    Mr. Meehan......................................................              X
    Mr. Delahunt....................................................              X
    Mr. Wexler......................................................              X
    Mr. Weiner......................................................              X
    Mr. Schiff......................................................              X
    Ms. Sanchez.....................................................              X
    Mr. Smith (Washington)..........................................              X
    Mr. Van Hollen..................................................
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................             13              18
    ----------------------------------------------------------------------------------------------------------------

        5. An amendment by Mr. Schiff amending section 102 of the
    bill to prohibit a judge, United States trustee, trustee, or
    other party in interest from dismissing a chapter 7 case on the
    basis of the debtor's ability to repay if the debtor is an
    identity theft victim, under certain circumstances. Defeated 13
    to 15.

                                                       ROLLCALL NO. 5
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................                              X
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................
    Mr. Chabot......................................................                              X
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................                              X
    Mr. Inglis......................................................                              X
    Mr. Hostettler..................................................
    Mr. Green.......................................................                              X
    Mr. Keller......................................................
    Mr. Issa........................................................
    Mr. Flake.......................................................
    Mr. Pence.......................................................
    Mr. Forbes......................................................
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................                              X
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................              X
    Mr. Boucher.....................................................
    Mr. Nadler......................................................              X
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................
    Ms. Waters......................................................              X
    Mr. Meehan......................................................              X
    Mr. Delahunt....................................................              X
    Mr. Wexler......................................................
    Mr. Weiner......................................................              X
    Mr. Schiff......................................................              X
    Ms. Sanchez.....................................................              X
    Mr. Smith (Washington)..........................................              X
    Mr. Van Hollen..................................................              X
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................             13              15
    ----------------------------------------------------------------------------------------------------------------

        6. An amendment by Mr. Delahunt amending Bankruptcy Code
    section 548 to authorize a trustee to avoid a transfer of an
    interest of a debtor made within the ten-year period preceding
    the bankruptcy filing to an asset protection trust if the
    amount of the transfer or aggregate amount of all transfers
    during such period exceeds $125,000, with certain exceptions.
    Defeated 10 to 15.

                                                       ROLLCALL NO. 6
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................
    Mr. Chabot......................................................                              X
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................
    Mr. Inglis......................................................
    Mr. Hostettler..................................................                              X
    Mr. Green.......................................................
    Mr. Keller......................................................                              X
    Mr. Issa........................................................
    Mr. Flake.......................................................                              X
    Mr. Pence.......................................................
    Mr. Forbes......................................................                              X
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................              X
    Mr. Boucher.....................................................                              X
    Mr. Nadler......................................................              X
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................              X
    Ms. Waters......................................................              X
    Mr. Meehan......................................................
    Mr. Delahunt....................................................              X
    Mr. Wexler......................................................
    Mr. Weiner......................................................              X
    Mr. Schiff......................................................              X
    Ms. Sanchez.....................................................
    Mr. Smith (Washington)..........................................
    Mr. Van Hollen..................................................
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................             10              15
    ----------------------------------------------------------------------------------------------------------------

        7. An amendment by Mr. Berman and Mr. Meehan amending
    Bankruptcy Code section 522 to create a uniform Federal
    homestead exemption floor in the amount of $150,000 for a
    medically distressed debtor. Defeated 13 to 18.

                                                       ROLLCALL NO. 7
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................
    Mr. Chabot......................................................
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................                              X
    Mr. Inglis......................................................                              X
    Mr. Hostettler..................................................                              X
    Mr. Green.......................................................                              X
    Mr. Keller......................................................                              X
    Mr. Issa........................................................                              X
    Mr. Flake.......................................................                              X
    Mr. Pence.......................................................
    Mr. Forbes......................................................                              X
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................              X
    Mr. Boucher.....................................................                              X
    Mr. Nadler......................................................              X
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................              X
    Ms. Waters......................................................              X
    Mr. Meehan......................................................              X
    Mr. Delahunt....................................................              X
    Mr. Wexler......................................................              X
    Mr. Weiner......................................................              X
    Mr. Schiff......................................................              X
    Ms. Sanchez.....................................................
    Mr. Smith (Washington)..........................................
    Mr. Van Hollen..................................................              X
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................             13              18
    ----------------------------------------------------------------------------------------------------------------

        8. An amendment by Mr. Nadler amending Bankruptcy Code
    section 523(a) to provide that a debt 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 that arises from: (a) the violation
    of certain specified offenses under title 18 of the United
    States Code; (b) an offense under state law that would be a
    civil rights crime (as described in the preceding clause); (c)
    a violation under 42 U.S.C. Sec. 1983; or (d) the intentional
    actions of a debtor that violate a valid court order enforcing
    a civil rights law described in (a) or (b). It also amends
    Bankruptcy Code section 523(a)(13) to include an order of
    restitution under the criminal law of a state. Defeated 11 to
    17.

                                                       ROLLCALL NO. 8
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................                              X
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................
    Mr. Chabot......................................................                              X
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................                              X
    Mr. Inglis......................................................
    Mr. Hostettler..................................................                              X
    Mr. Green.......................................................                              X
    Mr. Keller......................................................
    Mr. Issa........................................................
    Mr. Flake.......................................................
    Mr. Pence.......................................................
    Mr. Forbes......................................................                              X
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................                              X
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................              X
    Mr. Boucher.....................................................                              X
    Mr. Nadler......................................................              X
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................
    Ms. Waters......................................................              X
    Mr. Meehan......................................................              X
    Mr. Delahunt....................................................              X
    Mr. Wexler......................................................              X
    Mr. Weiner......................................................              X
    Mr. Schiff......................................................              X
    Ms. Sanchez.....................................................
    Mr. Smith (Washington)..........................................
    Mr. Van Hollen..................................................
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................             11              17
    ----------------------------------------------------------------------------------------------------------------

        9. An amendment by Mr. Meehan amending section 102 of the
    bill to provide that the needs-based requirements under
    Bankruptcy Code section 707(b)(2)(A) through (C) (as amended by
    section 102) shall not apply to, and the court may not dismiss
    or convert a chapter 7 case filed by, a debtor who is a
    disabled veteran based on any form of means testing, under
    certain specified circumstances. Defeated 12 to 19.

                                                       ROLLCALL NO. 9
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................                              X
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................
    Mr. Chabot......................................................                              X
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................                              X
    Mr. Inglis......................................................                              X
    Mr. Hostettler..................................................                              X
    Mr. Green.......................................................
    Mr. Keller......................................................                              X
    Mr. Issa........................................................                              X
    Mr. Flake.......................................................
    Mr. Pence.......................................................
    Mr. Forbes......................................................                              X
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................                              X
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................              X
    Mr. Boucher.....................................................                              X
    Mr. Nadler......................................................              X
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................              X
    Ms. Waters......................................................              X
    Mr. Meehan......................................................              X
    Mr. Delahunt....................................................
    Mr. Wexler......................................................
    Mr. Weiner......................................................              X
    Mr. Schiff......................................................              X
    Ms. Sanchez.....................................................              X
    Mr. Smith (Washington)..........................................
    Mr. Van Hollen..................................................              X
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................             12              19
    ----------------------------------------------------------------------------------------------------------------

        10. An amendment by Ms. Jackson Lee amending section 102 of
    the bill to increase the amount of actual expenses a chapter 7
    debtor may claim under the provision's needs-based test for
    certain educational costs for a debtor's dependent child from
    $1,500 to $3,000. Defeated 12 to 21.

                                                       ROLLCALL NO. 10
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................                              X
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................                              X
    Mr. Chabot......................................................                              X
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................                              X
    Mr. Inglis......................................................                              X
    Mr. Hostettler..................................................
    Mr. Green.......................................................                              X
    Mr. Keller......................................................                              X
    Mr. Issa........................................................                              X
    Mr. Flake.......................................................
    Mr. Pence.......................................................                              X
    Mr. Forbes......................................................                              X
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................                              X
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................              X
    Mr. Boucher.....................................................                              X
    Mr. Nadler......................................................              X
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................              X
    Ms. Waters......................................................              X
    Mr. Meehan......................................................
    Mr. Delahunt....................................................
    Mr. Wexler......................................................
    Mr. Weiner......................................................              X
    Mr. Schiff......................................................              X
    Ms. Sanchez.....................................................              X
    Mr. Smith (Was1hington).........................................              X
    Mr. Van Hollen..................................................              X
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................             12              21
    ----------------------------------------------------------------------------------------------------------------

        11. Three en bloc amendments by Ms. Jackson Lee as follows:
    (a) amending Bankruptcy Code section 523(a) to provide that a
    debt arising from certain sex offenses in which the victim was
    an individual who had not attained the age of 17 years is
    nondischargeable; (b) amending Bankruptcy Code section 523(a)
    to provide that a debt arising from a judicial, administrative,
    or other action related to the consumption or consumer purchase
    of a tobacco product that is based in whole or in part on false
    pretenses, a false representation, or actual fraud is
    nondischargeable; and (c) amending section 708 of the bill to
    provide that the confirmation of a chapter 11 plan under
    Bankruptcy Code section 1141 does not discharge a debtor that
    is corporation from a debt specified in Bankruptcy Code section
    523(a)(9). Defeated 9 to 20.

                                                       ROLLCALL NO. 11
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................                              X
    Mr. Smith (Texas)...............................................                              X
    Mr. Gallegly....................................................                              X
    Mr. Goodlatte...................................................                              X
    Mr. Chabot......................................................                              X
    Mr. Lungren.....................................................                              X
    Mr. Jenkins.....................................................                              X
    Mr. Cannon......................................................                              X
    Mr. Bachus......................................................                              X
    Mr. Inglis......................................................                              X
    Mr. Hostettler..................................................
    Mr. Green.......................................................
    Mr. Keller......................................................                              X
    Mr. Issa........................................................                              X
    Mr. Flake.......................................................
    Mr. Pence.......................................................                              X
    Mr. Forbes......................................................                              X
    Mr. King........................................................                              X
    Mr. Feeney......................................................                              X
    Mr. Franks......................................................                              X
    Mr. Gohmert.....................................................                              X
    Mr. Conyers.....................................................              X
    Mr. Berman......................................................              X
    Mr. Boucher.....................................................                              X
    Mr. Nadler......................................................
    Mr. Scott.......................................................              X
    Mr. Watt........................................................              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................              X
    Ms. Waters......................................................              X
    Mr. Meehan......................................................              X
    Mr. Delahunt....................................................
    Mr. Wexler......................................................
    Mr. Weiner......................................................              X
    Mr. Schiff......................................................
    Ms. Sanchez.....................................................
    Mr. Smith (Washington)..........................................
    Mr. Van Hollen..................................................              X
    Mr. Sensenbrenner, Chairman.....................................                              X
                                                                     -----------------------------------------------
        Total.......................................................              9              20
    ----------------------------------------------------------------------------------------------------------------

        12. Motion to report S. 256 favorably. Passed 22 to 13.

                                                       ROLLCALL NO. 12
    ----------------------------------------------------------------------------------------------------------------
                                                                           Ayes            Nays           Present
    ----------------------------------------------------------------------------------------------------------------
    Mr. Hyde........................................................
    Mr. Coble.......................................................              X
    Mr. Smith (Texas)...............................................              X
    Mr. Gallegly....................................................              X
    Mr. Goodlatte...................................................              X
    Mr. Chabot......................................................              X
    Mr. Lungren.....................................................              X
    Mr. Jenkins.....................................................              X
    Mr. Cannon......................................................              X
    Mr. Bachus......................................................              X
    Mr. Inglis......................................................              X
    Mr. Hostettler..................................................
    Mr. Green.......................................................              X
    Mr. Keller......................................................              X
    Mr. Issa........................................................              X
    Mr. Flake.......................................................              X
    Mr. Pence.......................................................              X
    Mr. Forbes......................................................              X
    Mr. King........................................................              X
    Mr. Feeney......................................................              X
    Mr. Franks......................................................              X
    Mr. Gohmert.....................................................              X
    Mr. Conyers.....................................................                              X
    Mr. Berman......................................................                              X
    Mr. Boucher.....................................................              X
    Mr. Nadler......................................................                              X
    Mr. Scott.......................................................                              X
    Mr. Watt........................................................                              X
    Ms. Lofgren.....................................................
    Ms. Jackson Lee.................................................                              X
    Ms. Waters......................................................                              X
    Mr. Meehan......................................................                              X
    Mr. Delahunt....................................................                              X
    Mr. Wexler......................................................
    Mr. Weiner......................................................                              X
    Mr. Schiff......................................................                              X
    Ms. Sanchez.....................................................                              X
    Mr. Smith (Washington)..........................................
    Mr. Van Hollen..................................................                              X
    Mr. Sensenbrenner, Chairman.....................................              X
                                                                     -----------------------------------------------
        Total.......................................................             22              13
    ----------------------------------------------------------------------------------------------------------------

                          Committee Oversight Findings

        In compliance with clause 3(c)(1) of Rule XIII of the Rules
    of the House of Representatives, the Committee reports that the
    findings and recommendations of the Committee, based on
    oversight activities under clause 2(b)(1) of Rule X of the
    Rules of the House of Representatives, are incorporated in the
    descriptive portions of this report.

                   New Budget Authority and Tax Expenditures

        In compliance with clause 3(c)(2) of Rule XIII of the Rules
    of the House of Representatives, the Committee adopts as its
    own the estimate of budget authority, or tax expenditures or
    revenues contained in the cost estimate prepared by the
    Director of the Congressional Budget Office pursuant to section
    402 of the Congressional Budget Act of 1974.

                   Congressional Budget Office Cost Estimate

        In compliance with clause 3(c)(3) of Rule XIII of the Rules
    of the House of Representatives, the Committee sets forth, with
    respect to the bill, S. 256, the following estimate and
    comparison prepared by the Director of the Congressional Budget
    Office under section 402 of the Congressional Budget Act of
    1974:

                                         U.S. Congress,
                                   Congressional Budget Office,
                                         Washington, DC, April 4, 2005.
    Hon. F. James Sensenbrenner, Jr., Chairman,
    Committee on the Judiciary,
    House of Representatives, Washington, DC.
        Dear Mr. Chairman: The Congressional Budget Office has
    prepared the enclosed cost estimate for S. 256, the
    ``Bankruptcy Abuse Prevention and Consumer Protection Act of
    2005,'' as reported by the House Committee on the Judiciary.
    This version of S. 256 is identical to the legislation as
    passed by the Senate on March 10, 2005.
        If you wish further details on this estimate, we will be
    pleased to provide them. The CBO staff contacts are Gregory
    Waring (for Federal spending), who can be reached at 226-2860,
    Annabelle Bartsch (for Federal revenues), who can be reached at
    226-2720, Melissa Merrell (for the State and local impact), who
    can be reached at 225-3220, and Paige Piper/Bach (for the
    private-sector impact), who can be reached at 226-2940.
                Sincerely,
                                           Douglas Holtz-Eakin.

    Enclosure

    cc:
            Honorable John Conyers, Jr.
            Ranking Member
    S. 256--Bankruptcy Abuse Prevention and Consumer Protection Act of
            2005.

                                    SUMMARY

        CBO estimates that implementing S. 256 would result in
    gross discretionary costs of $392 million over the 2006-2010
    period, primarily to pay for increased responsibilities of the
    United States Trustees (U.S. Trustees), assuming appropriation
    of the necessary amounts. At the same time, the act would
    increase the fees charged for filing certain bankruptcy cases
    and would change how some of these fees are currently recorded
    in the budget during the first 5 years after enactment. We
    estimate that implementing the act would increase the amount of
    bankruptcy fees that are treated as an offset to appropriations
    by $75 million over the 5-year period, resulting in an
    estimated net increase in discretionary spending of
    approximately $318 million over this period.
        In addition, CBO estimates that enacting S. 256 would
    increase revenues by about $60 million over the 2006-2010
    period and by about $140 million over the 2006-2015 period
    primarily because of provisions that temporarily amend the
    Treasury's allocation of filing fees. Finally, enactment of S.
    256 would authorize additional judgeships, and we estimate that
    the mandatory pay and benefits for those positions would cost
    $26 million over the next 5 years and $45 million over the
    2006-2015 period.
        On balance and assuming appropriation of the necessary
    amounts to implement the act, CBO estimates that its enactment
    would increase budget deficits by about $280 million over the
    2006-2010 period.
        S. 256 contains two intergovernmental mandates as defined
    in the Unfunded Mandates Reform Act (UMRA), but CBO estimates
    that the costs would be insignificant and would not exceed the
    threshold established in UMRA ($62 million in 2005, adjusted
    annually for inflation). Overall, CBO expects that enacting
    this bill would benefit State and local governments by
    enhancing their ability to collect outstanding obligations in
    bankruptcy cases.
        S. 256 would impose private-sector mandates, as defined in
    UMRA, on bankruptcy attorneys, creditors, bankruptcy petition
    preparers, debt-relief agencies, consumer reporting agencies,
    and credit and charge-card companies. CBO estimates that the
    direct costs of those mandates would exceed the annual
    threshold established by UMRA ($123 million in 2005, adjusted
    annually for inflation).

                                MAJOR PROVISIONS

        In addition to establishing means-testing for determining
    eligibility for chapter 7 bankruptcy relief, S. 256 would:

             Require the Executive Office for the U.S.
            Trustees to establish a test program to educate debtors
            on financial management;

             Authorize 28 new temporary judgeships and
            extend four existing judgeships;

             Permit courts to waive chapter 7 filing fees
            and other fees for debtors who could not pay such fees
            in installments;

             Require that at least one of every 250
            bankruptcy cases under chapter 13 or chapter 7 be
            audited by an independent certified public accountant;

             Require the Administrative Office of the
            United States Courts (AOUSC) to receive and maintain
            tax returns for certain chapter 7 and chapter 13
            debtors;

             Require the AOUSC and the U.S. Trustees to
            collect and publish certain statistics on bankruptcy
            cases; and

             Increase chapter 7 and chapter 11 bankruptcy
            filing fees, decrease chapter 13 filing fees, and
            change the budgetary treatment of such fees over a
            specified period of time.

        Other provisions would make various changes affecting the
    bankruptcy provisions for municipalities and the treatment of
    tax liabilities in bankruptcy cases.

                    ESTIMATED COST TO THE FEDERAL GOVERNMENT

        As shown in Table 1, CBO estimates that implementing S. 256
    would result in a net increase in discretionary spending of
    about $318 million over the 2006-2010 period, subject to future
    appropriation actions. In addition, we estimate that mandatory
    spending for the salaries and benefits of bankruptcy judges
    would increase by less than $100,000 in 2005 and by $26 million
    over the 2006-2010 period. Enacting the legislation's
    provisions for adjusting filing fees would increase revenues by
    about $60 million over the next 5 years. The costs of this
    legislation fall within budget function 750 (administration of
    justice).

                 TABLE 1. ESTIMATED BUDGETARY EFFECTS OF S. 256
                     By Fiscal Year, in Millions of Dollars
    ------------------------------------------------------------------------
                                     2005   2006   2007   2008   2009   2010
    ------------------------------------------------------------------------
    CHANGES IN SPENDING SUBJECT TO APPROPRIATION
    Means-Testing (Section 102)
      Estimated Authorization           0     16     24     39     39     36
     Level
      Estimated Outlays                 0     14     23     39     39     36

    Studies by U.S. Trustees, GAO,
     and SBA (Sections 103, 230,
     and 443)
      Estimated Authorization           0      1      *      0      0      0
     Level
      Estimated Outlays                 0      1      *      0      0      0

    Debtor Financial Management
     Training (Section 105)
      Estimated Authorization           0      3      1      0      0      0
     Level
      Estimated Outlays                 0      2      1      *      0      0

    Credit Counseling
     Certification (Section 106)
      Estimated Authorization           0      4      7      8      8      7
     Level
      Estimated Outlays                 0      4      6      8      8      7

    Maintenance of Tax Returns
     (Section 315)
      Estimated Authorization           0      2      2      2      2      2
     Level
      Estimated Outlays                 0      2      2      2      2      2

    Changes in Bankruptcy Filing
     Fees (Sections 325 and 418)
      Estimated Authorization           0    -46    -49      6      7      7
     Level
      Estimated Outlays                 0    -46    -49      6      7      7

    U.S. Trustee Site Visits
     (Section 439)
      Estimated Authorization           0      3      3      3      3      3
     Level
      Estimated Outlays                 0      3      3      3      3      3

    Compiling and Publishing Data
     (Sections 601-602)
      Estimated Authorization           0      1      7      8      8      8
     Level
      Estimated Outlays                 0      1      7      8      8      8

    Audit Procedures (Section 603)
      Estimated Authorization           0      0     16     17     17     16
     Level
      Estimated Outlays                 0      0     16     17     17     16

    Additional Judgeships--Support
     Costs (Section 1223)
      Estimated Authorization           *      8     17     17     18     18
     Level
      Estimated Outlays                 *      7     16     17     18     18

    FTC Toll-Free Hotline (Section
     1301)
      Estimated Authorization           0      2      1      1      1      1
     Level
      Estimated Outlays                 0      2      1      1      1      1

      Total Discretionary Changes
        Estimated Authorization         *     -6     29    101    103     98
     Level
        Estimated Outlays               *    -10     26    101    103     98

    CHANGES IN DIRECT SPENDING
    Additional Judgeships (Section
     1223)
      Estimated Budget Authority        *      3      6      6      6      6
      Estimated Outlays                 *      3      5      6      6      6

    CHANGES IN REVENUES
    Changes in Revenue from Filing
     Fees
      Estimated Revenues                0     -6    -12     30     24     24
    ------------------------------------------------------------------------
    NOTES: GAO = Government Accountability Office; SBA = Small Business
      Administration; FTC = Federal Trade Commission. * = less than
      $500,000.

                               BASIS OF ESTIMATE

        For this estimate, CBO assumes that S. 256 will be enacted
    by July 2005 and that the amounts necessary to implement the
    act will be appropriated for each fiscal year. Many of the
    act's new provisions would be effective 180 days after
    enactment. However, a few provisions would be effective 18
    months after enactment. CBO assumes those provisions would take
    effect in fiscal year 2007.
    Spending Subject to Appropriation
        Most of the estimated increases in discretionary spending
    under S. 256 would be required to fund the additional workload
    that would be imposed on the U.S. Trustees. Those increases
    would be partially offset for fiscal years 2006 and 2007 by
    changes in bankruptcy filing fees that would be recorded as
    offsetting collections under the act. CBO estimates that
    implementing S. 256 would result in a net increase in
    discretionary costs of about $318 million over the 2006-2010
    period, with most of the increase falling after 2007.
        Means-Testing (Section 102). This section would establish a
    system of means-testing for determining a debtor's eligibility
    for relief under chapter 7. Under the proposed means test, if
    the amount of debtor income remaining after certain expenses
    and other specified amounts are deducted from the debtor's
    current monthly income exceeds the threshold specified in
    section 102, then the debtor would be presumed ineligible for
    chapter 7 relief. A debtor who could not demonstrate ``special
    circumstances,'' which would cause the expected disposable
    income to fall below the threshold, could file under other
    chapters of the bankruptcy code.
        Although the private trustees would be responsible for
    conducting the initial review of a debtor's income and expenses
    and filing the majority of motions for dismissal or conversion,
    CBO expects that the workload of the U.S. Trustees would
    increase under the means-testing provision. The U. S. Trustees
    would provide increased oversight of the work performed by the
    private trustees, file additional motions for dismissal or
    conversion, and take part in additional litigation that is
    expected to occur as the courts and debtors debate allowable
    expenses and other related issues. Although CBO cannot predict
    the amount of such litigation, we expect that, during the first
    few years following enactment of the act, the amount of
    litigation could be significant as parties test the new law's
    standards. In subsequent years, litigation could begin to
    subside as precedents are established. Based on information
    from the U.S. Trustees, CBO estimates that the U.S. Trustees
    would require 200 additional attorneys, paralegals, and
    analysts to address the increased workload. As a result, CBO
    estimates that implementing this provision would cost about
    $150 million over the 2006-2010 period, assuming appropriation
    of the necessary funds.
        Studies by the U.S. Trustees, Government Accountability
    Office (GAO), and Small Business Administration (SBA) (Sections
    103, 205, 230, and 443). Section 103 would require the U.S.
    Trustees to conduct a study regarding the use of Internal
    Revenue Service expense standards for determining a debtor's
    current monthly expenses and the impact of those standards on
    debtors and bankruptcy courts. Section 230 would require GAO to
    conduct a study regarding the feasibility of requiring trustees
    to provide the Office of Child Support Enforcement information
    about outstanding child support obligations of debtors. Section
    205 would require GAO to conduct a study on the treatment of
    consumers by creditors with respect to reaffirmation
    agreements. Section 443 would require the Administrator of SBA,
    in consultation with the Attorney General, the U.S. Trustees,
    and the AOUSC, to conduct a study on small business bankruptcy
    issues. Based on information from the U.S. Trustees, GAO, and
    SBA, CBO estimates that completing the necessary studies would
    cost about $1 million in 2006 and less than $500,000 in 2007,
    subject to the availability of appropriated funds.
        Debtor Financial Management Test Training Program (Section
    105). This section would require the U.S. Trustees to establish
    a test training program to educate debtors on financial
    management. The test training program would be authorized for
    six judicial districts over an 18-month period. Based on
    information from the U.S. Trustees, CBO estimates that about
    90,000 debtors would participate if such a program were
    administered by the U.S. Trustees in fiscal years 2006 and
    2007. At a projected cost of about $40 per debtor, CBO
    estimates that implementing this provision would cost nearly $4
    million over the 2006-2007 period.
        Credit Counseling Certification (Section 106). This section
    would require the U.S. Trustees to certify, on an annual basis,
    that certain credit counseling services could provide adequate
    services to potential debtors. Based on information from the
    U.S. Trustees, CBO estimates that the U.S. Trustees would
    require additional attorneys and analysts to handle the greater
    workload associated with certification. CBO estimates that
    implementing this provision would cost $33 million over the
    2006-2010 period.
        Maintenance of Tax Returns (Section 315). This section
    would authorize the AOUSC to receive and retain debtors' tax
    returns for the year prior to the commencement of the
    bankruptcy for chapter 7 and chapter 13 filings. Such
    collection and storage of tax returns would commence only at
    the request of a creditor. Based on information from the AOUSC,
    CBO expects that creditors will request tax information in
    about 25 percent of such cases. CBO estimates that implementing
    section 315 would cost $10 million over the 2006-2010 period to
    store and provide access to about two million tax returns.
        Changes in Bankruptcy Filing Fees (Sections 325 and 418).
    Section 325 would increase chapter 7 and chapter 11 bankruptcy
    filing fees, decrease the chapter 13 filing fee, and change the
    distribution of such fees during the first 5 years after
    enactment. Considering the expected reduction in the use of
    chapter 7 because of means-testing and a provision in section
    418 that would allow fee waivers, CBO estimates that
    implementing the new fee structure and changes in fee
    classifications would result in a net increase in offsetting
    collections totaling $75 million over the 2006-2010 period.
        Current Law Filing Fees. Under current law, the filing fee
    for chapter 7 and chapter 13 is $155 and is divided between the
    U.S. Trustee System Fund (recorded as an offsetting
    collection), the AOUSC (recorded as an offsetting receipt), the
    private trustee assigned to the case, and the remainder is
    recorded as a governmental receipt (i.e., revenue). The filing
    fee for chapter 11 relief is currently set at $800 and is
    divided between the U.S. Trustee System Fund and the AOUSC, and
    the remainder is also recorded as a governmental receipt.
    Section 325 would change the filing fees for chapters 7, 13,
    and 11 to $200, $1,000, and $150, respectively.
        Distribution of Filing Fees. During the first 2 years after
    enactment, the S. 256 would allow the U.S. Trustee System Fund
    to retain (as an offset to appropriations) a larger portion of
    the current-law chapter 7, 13, and 11 filing fees. At the same
    time, the act would temporarily reduce for 2 years the
    percentage of current-law filing fees allocated to the AOUSC,
    and, because current law sets the private trustee's portion of
    the filing fee at a flat amount ($45), no portion of the
    current-law filing fees would be recorded as governmental
    receipts during fiscal years 2006 and 2007. After 2 years, the
    distribution of the filing fees under S. 256 would revert to
    the distribution formula in current law.
        Under S. 256, the general fund of the Treasury would
    receive any increase in bankruptcy filing fees due to enactment
    of the legislation over the 2006-2010 period. Beginning in
    2011, the full amount of the proposed fees would be allocated
    according to the formula specified in current law. Of the $200
    fee for chapter 7 filers, about $55 would be recorded as an
    offsetting collection to the appropriation for the U.S.
    Trustees System Fund, and almost $68 would be recorded as an
    offsetting receipt and spent without further appropriation by
    the AOUSC. The private trustee assigned to the case would
    receive $45 and the remainder of the fee would be recorded as a
    governmental receipt. Of the $150 fee for a chapter 13 case,
    the U.S. Trustee System Fund would receive about $41, and the
    AOUSC would receive almost $51 per case to spend without
    further appropriation. Finally, of the $1,000 fee per chapter
    11 case, the U.S. Trustee System Fund would receive $500, the
    AOUSC would receive $250, and the remainder of the fee would be
    recorded as a governmental receipt.
        Fee Waivers. Section 418 would permit a bankruptcy court or
    district court to waive the chapter 7 filing fee and other fees
    for a debtor who is unable to pay such fees in installments.
    Based on information from the AOUSC, CBO expects that, in
    fiscal year 2006, chapter 7 filing fees would be waived for
    about 3.5 percent of all chapter 7 filers and that the
    percentage waived would gradually increase to about 10 percent
    by fiscal year 2009.
        U.S. Trustee Site Visits in Chapter 11 Cases (Section 439).
    This section would expand the responsibilities of the U.S.
    Trustees in small business bankruptcy cases to include site
    visits to inspect the debtor's premises, review records, and
    verify that the debtor has filed tax returns. Based on
    information from the U.S. Trustees, CBO estimates that
    implementing section 439 would require about 20 additional
    analysts to conduct over 2,300 site visits each year. CBO
    estimates that implementing this provision would cost about $15
    million over the 2006-2010 period for the salaries, benefits,
    and travel expenses associated with those additional personnel.
        Compilation and Publication of Bankruptcy Data and
    Statistics (Sections 601-602). Beginning 18 months after
    enactment, the act would require the AOUSC to collect data on
    chapter 7, chapter 11, and chapter 13 cases and the U.S.
    Trustees to make such information available to the public. CBO
    estimates that it would cost about $32 million over the 2006-
    2010 period to meet these requirements. Of the total estimated
    cost, about $25 million would be required for additional legal
    clerks, analysts, and data base support. The remainder would be
    incurred by the U.S. Trustees for compiling data and providing
    Internet access to records pertaining to bankruptcy cases.
        Audit Procedures (Section 603). Beginning 18 months after
    enactment, S. 256 would require that at least one out of every
    250 bankruptcy cases under chapter 7 and chapter 13, plus other
    selected cases under those chapters, be audited by an
    independent certified public accountant. Based on information
    from the U.S. Trustees, CBO estimates that less than 1 percent
    of about 1.6 million cases a year would be subject to potential
    audits. Each audit would cost roughly $1,000 (in 2005 dollars).
    CBO also expects that the U.S. Trustees would need about 10
    additional analysts and attorneys to support the follow-up work
    associated with the audits. We estimate that implementing this
    provision would cost $66 million over the 2006-2010 period.
        Additional Judgeships--Support Costs (Section 1223). This
    provision would extend four temporary bankruptcy judgeships and
    authorize 28 new temporary bankruptcy judgeships. Based on
    information from the AOUSC, CBO assumes that about half of the
    28 new positions would be filled by the beginning of fiscal
    year 2006 and the rest would be filled by the start of fiscal
    year 2007. Also, we anticipate that all four temporary
    judgeships would be filled by fiscal year 2007. We expect that
    discretionary expenditures for support costs associated with
    each judgeship would average about $500,000 annually (in 2005
    dollars). CBO estimates that the administrative support of
    additional bankruptcy judges would cost less than $200,000 in
    fiscal year 2005 and $76 million over the 2006-2010 period.
    (Salaries and benefits for the judges are classified as
    mandatory spending, and those costs are described below.)
        Federal Trade Commission Toll-Free Hotline (Section 1301).
    This section would require the Federal Trade Commission (FTC)
    to operate a toll-free number for consumers to calculate how
    long it would take to pay off a credit card debt if they were
    to make only the minimum monthly payments. Based on information
    from the FTC about the demand for similar services, CBO expects
    that the FTC would receive about 20,000 calls each month. CBO
    estimates that the equipment and personnel necessary to serve
    this volume of inquires would cost $2 million in 2006 and $6
    million over the 2006-2010 period, subject to appropriation of
    the necessary amounts.
    Direct Spending and Revenues
        By adding additional judgeships and changing the budgetary
    classification of bankruptcy filing fees, CBO estimates that
    enacting S. 256 would increase direct spending by about $45
    million over the 2006-2015 period and increase revenues by
    approximately $140 million over the 2006-2015 period as shown
    in Table 2.

                         TABLE 2. ESTIMATED CHANGES IN DIRECT SPENDING AND REVENUES UNDER S. 256
                                         By Fiscal Year, in Millions of Dollars
    ----------------------------------------------------------------------------------------------------------------
                                          2005   2006   2007   2008   2009   2010   2011   2012   2013   2014   2015
    ----------------------------------------------------------------------------------------------------------------
    CHANGES IN DIRECT SPENDING
    Additional Judgeships (Section
     1223)
      Estimated Budget Authority             *      3      6      6      6      6      6      5      3      3      2
      Estimated Outlays                      *      3      5      6      6      6      6      5      3      3      2

    CHANGES IN REVENUES
    Changes in Revenue from Filing Fees
      Estimated Revenues                     0     -6    -12     30     24     24     16     16     16     16     16
    ----------------------------------------------------------------------------------------------------------------
    NOTE: * = less than $500,000.

        Additional Judgeships (Section 1223).  CBO estimates that
    enacting the means-testing provision (section 102) would impose
    some additional workload on the courts. Section 128 would
    authorize 28 new temporary bankruptcy judgeships and extend
    four existing temporary judgeships. Based on information from
    the AOUSC and other bankruptcy experts, CBO expects that the
    increase in the number of bankruptcy judges would be sufficient
    to meet the increased workload. Assuming that the salary and
    benefits of a bankruptcy judge would average about $177,000 a
    year (in 2005 dollars), CBO estimates that the mandatory costs
    associated with the salaries and benefits of those additional
    judgeships would be less than $100,000 in fiscal year 2005,
    about $26 million over the 2006-2010 period, and about $45
    million over the 2006-2015 period.
        Changes in Bankruptcy Filing Fees (Sections 102, 325, and
    418). Section 325 would increase the fees charged for filing
    bankruptcy cases and change the classification of where
    bankruptcy filing fees are recorded in the budget. Under
    current law, filing fees are divided between the U.S. Trustee
    System Fund, the AOUSC, the private trustee assigned to the
    case, and the remainder are recorded as governmental receipts
    (i.e., revenues). The percentage of the fees allocated to those
    different parts of the budget varies by chapter.
        During the first 5 years of the new fee structure proposed
    in S. 256, the increase in the chapter 7, chapter 11, and
    chapter 13 filing fees above the amounts expected to be
    collected under current law would be recorded as revenues.
    During the first 2 years after enactment of S. 256, however,
    the portion of the fees charged under current law for chapters
    7, 13, and 11 that are now recorded as revenues would be
    recorded as offsetting collections or offsetting receipts. The
    allocation of those fees would return to the same allocation as
    under current law after 2 years. In sum, CBO estimates that
    enacting S. 256 would increase revenues by about $60 million
    over the 2006-2010 period and by about $144 million over the
    2006-2015 period. (The change in offsetting receipts would be
    matched by additional spending, resulting in no net change in
    direct spending.)
        Tax Provisions (Title VII). Title VII of S. 256 would alter
    several provisions related to tax claims. It would alter the
    treatment of certain tax liens, disallow the discharge of taxes
    resulting from fraudulent tax returns under chapter 11 or
    chapter 13 of the bankruptcy code, require periodic cash
    payments of priority tax claims, and specify the rate of
    interest on tax claims. Title VII also would change the status
    of assessment periods for tax claims and would alter various
    administrative requirements. Based on information from the
    Internal Revenue Service and the Joint Committee on Taxation,
    CBO estimates that these provisions would increase revenues,
    but that any increase would be negligible.

            ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

        S. 256 contains intergovernmental mandates as defined in
    UMRA, but CBO estimates that any resulting costs would not be
    significant and would not exceed the threshold established in
    UMRA ($62 million in 2005, adjusted annually for inflation).
    Overall, CBO expects that enacting this act would benefit State
    and local governments by enhancing their ability to collect
    outstanding obligations in bankruptcy cases.
    Mandates
        Section 227 of the act would preempt State laws governing
    contracts between a debt relief agency and a debtor but only to
    the extent that those State laws are inconsistent with the
    Federal requirements set forth in S. 256. Such preemptions are
    mandates as defined in UMRA. Because the preemption would not
    require States to take any action, CBO estimates that the costs
    to comply with this mandate would not be significant.
        Section 719 would require State and local income tax
    procedures to conform to the Internal Revenue Code with regard
    to dividing tax liabilities and responsibilities between the
    estate and the debtor, the tax consequences of partnerships and
    transfers of property, and the taxable period of the debtor.
    CBO estimates that this provision would increase costs for the
    administration of State and local tax laws but would not
    require State and local tax rates to conform to the Federal
    rates. Such administrative costs would not be significant and
    would likely be offset by increased collections by State and
    local governments.
    Other Impacts
        The changes to bankruptcy law in the act would affect State
    and local governments primarily as creditors and holders of
    claims against debtors for taxes or child support payments. In
    addition, it would change some of the State statutes that
    govern which of a debtor's assets are protected from creditors
    in a bankruptcy proceeding.
        According to the Federation of Tax Administrators, while
    total bankruptcy filings have increased in the last decade, the
    proportion of claims collected by States from taxpayers in
    bankruptcy has remained relatively constant--about 5 percent of
    claims owed. CBO cannot predict how much more money might be
    collected under this legislation; however, we think that it is
    likely that State and local governments would collect a greater
    share of future claims than they would under current law.
        Domestic Support Obligations. S. 256 would enhance a
    State's ability to collect domestic support obligations,
    including child support. Domestic support obligations owed to
    State or local governments would be given priority over all
    other claims except those same obligations owed to individuals.
    The act would make those debts nondischargeable (not able to be
    written-off at the end of bankruptcy). The act also would
    require that filers under chapter 11 and 13 cases pay domestic
    support obligations owed to government agencies or individuals
    in order to receive a discharge of outstanding debts. In
    addition, under S. 256, the automatic stay that is triggered by
    filing bankruptcy would not apply to domestic support
    obligations owed by debtors or withheld from regular income as
    it currently does. The act also would require bankruptcy
    trustees to notify individuals with domestic support claims of
    their right to use the services of a State child support
    enforcement agency and to notify the agency that it has done
    so. The last known address of the debtor would be a part of the
    notification.
        Exemptions. Although bankruptcy is regulated according to
    Federal statute, States are allowed to provide debtors with
    certain exemptions for property, insurance, and other items
    that are different from those allowed under the Federal
    bankruptcy code. (Exempt property remains in possession of the
    debtor and is not available to pay off creditors.) In some
    States debtors can choose the Federal or State exemption; other
    States require a debtor to use only the State exemptions. The
    act would reduce the value of a debtor's homestead exemption
    under certain circumstances. It also would place a monetary cap
    on the value of certain property that the debtor may claim as
    exempt under State or local law. The act would exempt certain
    types of retirement and education savings as well as
    contributions to specified employee benefit plans.
        These exemption standards would apply regardless of the
    State policy on exemptions. The new property-value limitations
    could make more money available to creditors in some cases,
    while the exemptions on some retirement, education, and other
    savings generally would make less money available.
        Time Limits on Tax Collection. Under some circumstances, a
    tax claim can qualify for priority status, making it more
    likely that a State or local government can collect the debt.
    However, this status is granted only if a tax is assessed
    within a specific period of time from the date of the
    bankruptcy filing. If that filing is subsequently dismissed and
    a new filing is made, the tax claim may lose its priority
    status. The act would make adjustments to this provision,
    allowing more time to pass in some circumstances, thus
    increasing the likelihood that State or local tax claims would
    maintain their priority status.
        Taxes and Administrative Expenses. Under current law,
    certain expenses and the priority of claims reduce the funds
    that would otherwise be available to pay tax liens on property.
    The act would increase the priority of those liens in certain
    circumstances against certain expenses and claims, thereby
    making it more likely that funds would remain available to
    cover tax obligations. The act would allow State and local
    governments to claim administrative expenses for costs incurred
    by closing a health care business. The act would provide for a
    more uniform interest rate on all tax claims and administrative
    expenses, determined in accordance with applicable
    nonbankruptcy law rather than at the discretion of a bankruptcy
    judge.
        Tax Return Filing. A number of provisions in the act would
    require debtors to have filed tax returns before a bankruptcy
    case may continue. Those provisions would help States identify
    potential claims in bankruptcy cases where they may be owed
    delinquent taxes.
        Priority of Payments. In some circumstances under current
    law, debtors have borrowed money or incurred some new
    obligation that is dischargeable (able to be written-off at the
    end of bankruptcy) to pay for an obligation that would not be
    dischargeable. S. 256 would give the new debt the same priority
    as the underlying debt. If the underlying debt had a priority
    higher than that of State or local tax liabilities, State and
    local governments could lose access to some funds. However, it
    is possible that the underlying debt could be for a tax claim,
    in which case, the taxing authority would face no loss. Because
    it is unclear what types of nondischargeable debts are covered
    by new debt and the degree to which this new provision would
    discourage such activity, CBO can estimate neither the
    direction nor the magnitude of the provision's impact on States
    and localities.
        Municipal Bankruptcy. Title V would clarify regulations
    governing municipal bankruptcy actions and allow municipalities
    that have filed for bankruptcy to liquidate certain financial
    contracts.
        Fuel Tax Claims. Under current law, all States owed fuel
    tax under the International Fuel Tax Agreement must file
    separate claims against debtors under the bankruptcy code. A
    provision in title VII would allow a State designated under the
    agreement to file a single claim on behalf of all States owed
    the fuel taxes. That provision would simplify the filing
    process.
        Single Asset Cases. Title XII includes a provision that
    would allow expedited bankruptcy proceedings in certain cases
    where the debtor's principal asset is some form of real estate.
    Enacting this provision could benefit State and local
    governments to the extent that real property is returned to
    productive tax rolls earlier.

                     ESTIMATED IMPACT ON THE PRIVATE SECTOR

        S. 256 would establish means-testing of individual debtors
    for determining eligibility for relief under chapter 7 of the
    bankruptcy code. Under UMRA, duties arising from participation
    in voluntary Federal programs are not mandates. The bankruptcy
    process is largely voluntary for debtors, and debtor-initiated
    bankruptcies are equivalent to participation in a voluntary
    Federal program. Consequently, new duties imposed by the act on
    individuals who file as debtors do not meet the definition of
    private-sector mandates, and additional cost for debtors would
    not be counted as direct costs for purposes of UMRA.
    Mandates
        S. 256 would impose private-sector mandates on bankruptcy
    attorneys, creditors, preparers of bankruptcy petitions, debt-
    relief agencies, consumer reporting agencies, and credit and
    charge-card companies. Under the act:

             Consumer bankruptcy attorneys would have to
            make reasonable inquires to confirm that the
            information in documents they submit to the court or to
            the bankruptcy trustee is well-grounded in fact;

             Creditors would have to make disclosures in
            their agreements with debtors and provide certain
            notices to the courts and debtors;

             Preparers of bankruptcy petitions and debt-
            relief agencies would also have to provide certain
            notices to debtors;

             Federal bankruptcy judges would have the
            authority to prohibit consumer reporting agencies from
            issuing a report containing any information relating to
            certain involuntary bankruptcy petitions the court has
            dismissed; and

             Credit and charge-card companies would have
            to disclose specified information in monthly billing
            statements, introductory rate offers for new accounts,
            Internet-based solicitations, credit extensions secured
            by a dwelling, and for late payment deadlines and
            penalties.

        In addition, the act would prohibit credit and charge-card
    companies from terminating a consumer credit account before its
    expiration date because the consumer has not incurred finance
    charges. CBO estimates that the direct costs of the mandates in
    the act would exceed the annual threshold established by UMRA
    ($123 million in 2005, adjusted annually for inflation).
        Requirements For Attorneys. Section 102 of the act would
    make bankruptcy attorneys liable for misleading statements and
    inaccuracies in schedules and documents submitted to the court
    or to the trustee. To avoid sanctions and potential civil
    penalties, attorneys would need to verify the information given
    to them by their clients regarding the list of creditors,
    assets and liabilities, and income and expenditures. Completing
    a reasonable investigation of debtors' financial affairs and,
    for chapter 7 cases, computing debtor eligibility, would
    require attorneys to expend additional effort. Information from
    the American Bar Association indicates that this requirement
    would increase attorney costs by $150 to $500 per case. Based
    on the 1.6 million projected filings under chapter 7
    (liquidation) and chapter 13 (rehabilitation), CBO estimates
    that the direct cost of complying with this mandate would be
    between $240 million and $800 million in fiscal year 2007, the
    first full year of implementation, and would remain in that
    range through fiscal year 2010. CBO expects that some of the
    additional costs incurred by attorneys would most likely be
    passed on to their clients.
        Notice and Disclosure Requirements. The act would require
    certain notices to be disclosed as part of the bankruptcy
    process. Section 203 would require a creditor with an unsecured
    consumer debt seeking a reaffirmation agreement with a debtor
    to provide certain disclosures. The agreement reaffirms the
    debt discharged in bankruptcy between a holder of a claim and
    the debtor. Those disclosures must be made clearly and
    conspicuously in writing and include certain advisories and
    explanations. The required disclosures could be incorporated
    into existing standard reaffirmation agreements. Section 221
    would require preparers of bankruptcy petitions who are not
    attorneys to give debtors written notice explaining that the
    preparer may not provide legal advice. Section 228 would
    require a debt-relief agency providing bankruptcy assistance to
    give certain written notices to those assisted and to execute
    written contracts. The act also would require such agencies
    also to supply certain advisories and explanations regarding
    the bankruptcy process. Most attorneys and debt-relief
    counselors currently provide similar information, and CBO
    estimates that the direct costs of complying with those
    mandates would be small.
        S. 256 also would require credit lenders to provide
    additional disclosures to consumers. It would require credit
    and charge-card companies to include certain disclosures in
    billing statements with respect to various open-end credit
    plans regarding the disadvantages of making only the minimum
    payment. Other disclosures would be required to be included in
    application and solicitation materials involving introductory
    rate offers, Internet-based credit card solicitations, credit
    extensions secured by a dwelling, and for late payment
    deadlines and penalties. Based on information from credit
    lenders, CBO estimates that the incremental costs of complying
    with the additional disclosure requirements would not be
    substantial.
        Prohibition on Consumer Reporting Agencies. Section 332
    would give Federal bankruptcy judges the authority to prohibit
    consumer reporting agencies from issuing a report containing
    any information relating certain involuntary bankruptcy
    petitions the court has dismissed. In the event that the court
    uses such authority, the duty to comply with the prohibition
    would be considered a private-sector mandate under UMRA.
    According to industry representatives, the current practice of
    consumer reporting agencies is to not report any information
    when a court dismisses an involuntary bankruptcy petition.
    Therefore, CBO estimates that the cost of complying with such a
    mandate would be minimal if any.
        Requirement for Closing Credit Accounts. In addition, S.
    256 would prohibit termination of a credit account before its
    expiration date because the consumer has not incurred finance
    charges. According to industry representatives, credit and
    charge-card companies do not close accounts based solely on the
    fact that a consumer has not incurred any finance charges.
    Thus, CBO expects there would be no direct cost to comply with
    this prohibition.
    Other Impacts on the Private Sector
        S. 256 also contains many provisions that would benefit
    creditors. Most significant for creditors are provisions that
    are expected to shift some debtors from chapter 7 to chapter 13
    bankruptcy proceedings and provisions that would expand the
    types of debts that would be nondischargeable. By expanding the
    types of debts that are nondischargeable, some creditors would
    continue to receive payments on debts that would be discharged
    under current law. Means-testing in the bankruptcy system would
    likely result in more individuals being required to seek relief
    under chapter 13 rather than chapter 7. Because chapter 13
    requires debtors to develop a plan to repay creditors over a
    specified period, the total pool of funds available for
    distribution for creditors would likely increase. As long as
    the likelihood of repayment by debtors and the pool of funds
    increases by an amount greater than the cost to creditors of
    administering the new bankruptcy code, creditors would be made
    better off under the act.

                             PREVIOUS CBO ESTIMATE

        On February 28, 2005, CBO transmitted a cost estimate for
    S. 256 as ordered reported by the Senate Committee on the
    Judiciary on February 17, 2005. The House Committee on the
    Judiciary approved the same version of S. 256 as passed by the
    Senate on March 10, 2005. The Senate-passed version of the
    legislation and the version ordered reported by the Senate
    Judiciary Committee have different provisions regarding the
    distribution of bankruptcy filing fees. Our cost estimates
    reflect those differences.
        The private-sector mandates and cost estimates in the two
    versions of S. 256 are identical, except for the mandate in
    section 332 of the House Judiciary version. That mandate,
    prohibiting consumer reporting agencies from issuing a report
    containing any information relating to certain involuntary
    bankruptcy petitions the court has dismissed, was not in the
    previous version. CBO estimates that the aggregate cost of
    mandates in each version of S. 256 would exceed UMRA's annual
    threshold for private-sector mandates.

                             ESTIMATE PREPARED BY:

    Federal Spending: Gregory Waring (226-2860)
    Federal Revenues: Annabelle Bartsch (226-2720)
    Impact on State, Local, and Tribal Governments: Melissa Merrell
        (225-3220)
    Impact on the Private Sector: Paige Piper/Bach (226-2940)

                             ESTIMATE APPROVED BY:

    Peter H. Fontaine
    Deputy Assistant Director for Budget Analysis

                        Performance Goals and Objectives

        The Committee states that pursuant to clause 3(c)(4) of
    Rule XIII of the Rules of the House of Representatives, S. 256
    is intended to improve the bankruptcy system by deterring
    abuse, setting enhanced standards for bankruptcy professionals,
    and streamlining case administration. It authorizes the
    appointment of 28 temporary bankruptcy judgeships to address
    the 59 percent increase in the caseload of bankruptcy judges
    since 1992, when additional bankruptcy judgeships were last
    authorized.

                       Constitutional Authority Statement

        Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the
    House of Representatives, the Committee finds the authority for
    this legislation in Article I, Section 8, Clauses 3 and 4 of
    the Constitution.

                   Section-by-Section Analysis and Discussion

    Sec. 1. Short Title; References; Table of Contents. The short
    title of this measure is the Bankruptcy Abuse Prevention and
    Consumer Protection Act of 2005 ( the ``Act'').

                        TITLE I. NEEDS-BASED BANKRUPTCY

    Sec. 101. Conversion. Under current law, section 706(c) of the
    Bankruptcy Code provides that a court may not convert a chapter
    7 case unless the debtor requests such conversion. Section 101
    of the Act amends this provision to allow a chapter 7 case to
    be converted to a case under chapter 12 or chapter 13 on
    request or consent of the debtor.

    Section 102. Dismissal or Conversion. Section 102 implements
    needs-based debt relief, the legislation's principal consumer
    bankruptcy reform. Under section 707(b) of the Bankruptcy Code,
    a chapter 7 case filed by a debtor who is an individual may be
    dismissed for substantial abuse only on motion of the court or
    the United States trustee. It specifically prohibits such
    dismissal at the suggestion of any party in interest.
        Section 102 of the Act revises current law in several
    significant respects. First, it amends section 707(b) of the
    Bankruptcy Code to permit--in addition to the court and the
    United States trustee--a trustee, bankruptcy administrator, or
    a party in interest to seek dismissal or conversion of a
    chapter 7 case to one under chapter 11 or 13 on consent of the
    debtor, under certain circumstances. In addition, section 102
    of the Act changes the current standard for dismissal from
    ``substantial abuse'' to ``abuse.'' Section 102 of the Act also
    amends Bankruptcy Code section 707(b) to mandate a presumption
    of abuse if the debtor's current monthly income (reduced by
    certain specified amounts) when multiplied by 60 is not less
    than the lesser of 25 percent of the debtor's nonpriority
    unsecured claims or $6,000 (whichever is greater), or $10,000.
        To determine whether the presumption of abuse applies under
    section 707(b) of the Bankruptcy Code, section 102(a) of the
    Act specifies certain monthly expense amounts that are to be
    deducted from the debtor's ``current monthly income'' (a
    defined term). These expense items include:

             the applicable monthly expenses for the
            debtor as well as for the debtor's dependents and
            spouse in a joint case (if the spouse is not otherwise
            a dependent) specified under the Internal Revenue
            Service's National Standards (with provision for an
            additional five percent for food and clothing if the
            debtor can demonstrate that such additional amount is
            reasonable and necessary) and the IRS Local Standards;

             the actual monthly expenses for the debtor,
            the debtor's dependents, and the debtor's spouse in a
            joint case (if the spouse is not otherwise a dependent)
            for the categories specified by the Internal Revenue
            Service as Other Necessary Expenses;

             reasonably necessary expenses incurred to
            maintain the safety of the debtor and the debtor's
            family from family violence as specified in section 309
            of the Family Violence Prevention and Services Act or
            other applicable Federal law, with provision for the
            confidentiality of these expenses;

             reasonably necessary expenses for health
            insurance, disability insurance, and health savings
            account expenditures for the debtor, the debtor's
            spouse, and dependents of the debtor;

             the debtor's average monthly payments on
            account of secured debts and priority claims as
            explained below; and

             if the debtor is eligible to be a debtor
            under chapter 13, the actual administrative expenses of
            administering a chapter 13 plan for the district in
            which the debtor resides, up to 10 percent of projected
            plan payments, as determined under schedules issued by
            the Executive Office for United States Trustees.

        With respect to secured debts, Section 102(a)(2)(C) of the
    Act specifies that the debtor's average monthly payments on
    account of secured debts is calculated as the sum of the
    following divided by 60: (1) all amounts scheduled as
    contractually due to secured creditors for each month of the
    60-month period following filing of the case; and (2) any
    additional payments necessary, in filing a plan under chapter
    13, to maintain possession of the debtor's primary residence,
    motor vehicle or other property necessary for the support of
    the debtor and the debtor's dependents, that serves as
    collateral for secured debts.
        With respect to priority claims, section 102(a)(2)(C) of
    the Act specifies that the debtor's expenses for payment of
    such claims (including child support and alimony claims) is
    calculated as the total of such debts divided by 60.
        The provision permits a debtor, if applicable, to deduct
    from current monthly income the continuation of actual expenses
    paid by the debtor that are reasonable and necessary for the
    care and support of an elderly, chronically ill, or disabled
    household member or member of the debtor's immediate family
    (providing such individual is unable to pay for these
    expenses).
        Under section 102, a debtor may also deduct the actual
    expenses for each dependent child of a debtor to attend a
    private or public elementary or secondary school up to $1,500
    per child if the debtor: (1) documents such expenses, and (2)
    provides a detailed explanation of why such expenses are
    reasonable and necessary. In addition, the debtor must explain
    why such expenses are not already accounted for under any of
    the Internal Revenue Service National and Local Standards, and
    Other Expenses categories.
        Other expenses that a debtor may claim include additional
    housing and utilities allowances based on the debtor's actual
    home energy expenses if the debtor documents such expenses and
    demonstrates that they are reasonable and necessary.
        While the Act replaces the current law's presumption in
    favor of granting relief requested by a chapter 7 debtor with a
    presumption of abuse (if applicable under the income and
    expense analysis previously described), it does provide that
    this presumption may be rebutted under certain circumstances.
    Section 102(a)(2)(C) of the Act amends Bankruptcy Code section
    707(b) to provide that the presumption of abuse may be rebutted
    only if: (1) the debtor demonstrates special circumstances,
    such as a serious medical condition or a call or order to
    active duty in the Armed Forces, to the extent such special
    circumstances justify additional expenses or adjustments of
    current monthly income for which there is no reasonable
    alternative; and (2) the additional expenses or adjustments
    cause the product of the debtor's current monthly income
    (reduced by the specified expenses) when multiplied by 60 to be
    less than the lesser of 25 percent of the debtor's nonpriority
    unsecured claims, or $6,000 (whichever is greater); or $10,000.
    In addition, the debtor must itemize and document each
    additional expense or income adjustment as well as provide a
    detailed explanation of the special circumstances that make
    such expense or adjustment necessary and reasonable. Further,
    the debtor must attest under oath to the accuracy of any
    information provided to demonstrate that such additional
    expense or adjustment to income is required.
        To implement these needs-based reforms, the Act requires
    the debtor to file, as part of the schedules of current income
    and current expenditures, a statement of current monthly
    income. This statement must show: (1) the calculations that
    determine whether a presumption of abuse arises under section
    707(b) (as amended), and (2) how each amount is calculated.
        An exception to the needs-based test applies with respect
    to a debtor who is a disabled veteran whose indebtedness
    occurred primarily during a period when the individual was on
    active duty (as defined in 10 U.S.C. Sec. 101(d)(1)) or
    performing a homeland defense activity (as defined in 32 U.S.C.
    Sec. 901(1)).
        In a case where the presumption of abuse does not apply or
    has been rebutted, section 102(a)(2)(C) of the Act amends
    Bankruptcy Code section 707(b) to require a court to consider
    whether: (1) the debtor filed the chapter 7 case in bad faith;
    or (2) the totality of the circumstances of the debtor's
    financial situation demonstrates abuse, including whether the
    debtor wants to reject a personal services contract and the
    debtor's financial need for such rejection.
        Under section 102(a)(2)(C) of the Act, a court may on its
    own initiative or on motion of a party in interest in
    accordance with rule 9011 of the Federal Rules of Bankruptcy
    Procedure, order a debtor's attorney to reimburse the trustee
    for all reasonable costs incurred in prosecuting a section
    707(b) motion if: (1) a trustee files such motion; (2) the
    motion is granted; and (3) the court finds that the action of
    the debtor's attorney in filing the case under chapter 7
    violated rule 9011. If the court determines that the debtor's
    attorney violated rule 9011, it may on its own initiative or on
    motion of a party in interest in accordance with such rule,
    order the assessment of an appropriate civil penalty against
    debtor's counsel and the payment of such penalty to the
    trustee, United States trustee, or bankruptcy administrator.
    This provision clarifies that a motion for costs or the
    imposition of a civil penalty must be made by a party in
    interest or by the court itself in accordance with rule 9011.
        Section 102(a)(2)(C) of the Act provides that the signature
    of an attorney on a petition, pleading or written motion shall
    constitute a certification that the attorney has: (1) performed
    a reasonable investigation into the circumstances that gave
    rise to such document; and (2) determined that such document is
    well-grounded in fact and warranted by existing law or a good
    faith argument for the extension, modification, or reversal of
    existing law and does not constitute an abuse under section
    707(b)(1). In addition, such attorney's signature on the
    petition constitutes a certification that the attorney has no
    knowledge after an inquiry that the information in the
    schedules filed with the petition is incorrect.
        Section 102(a)(2)(C) of the Act amends section 707(b) of
    the Bankruptcy Code to permit a court on its own initiative or
    motion by a party in interest in accordance with rule 9011 of
    the Federal Rules of Bankruptcy Procedure to award a debtor
    reasonable costs (including reasonable attorneys' fees) in
    contesting a section 707(b) motion filed by a party in interest
    (other than a trustee, United States trustee or bankruptcy
    administrator) if the court: (1) does not grant the section
    707(b) motion; and (2) finds that either the movant violated
    rule 9011, or the attorney (if any) who filed the motion did
    not comply with section 707(b)(4)(C) and such was made solely
    for the purpose of coercing a debtor into waiving a right
    guaranteed under the Bankruptcy Code to such debtor. An
    exception applies with respect to a movant that is a ``small
    business'' with a claim in an aggregate amount of less than
    $1,000. A small business, for purposes of this provision, is
    defined as an unincorporated business, partnership,
    corporation, association or organization that engages in
    commercial or business activities and employs less than 25
    full-time employees. The number of employees of a wholly owned
    subsidiary includes the employees of the parent and any other
    subsidiary corporation of the parent. Section 102(a)(2)(C) of
    the Act clarifies that the motion for costs must be made by a
    party in interest or by the court. The use of the phraseology
    in this provision, ``in accordance with rule 9011 of the
    Federal Rules of Bankruptcy Procedure,'' is intended to
    indicate that the procedures for the motion of a party in
    interest or a court acting on its own initiative are the
    procedures outlined in rule 9011(c).
        The Act includes two ``safe harbors'' with respect to its
    needs-based reforms. One safe harbor allows only a judge,
    United States trustee, or bankruptcy administrator to file a
    section 707(b) motion (based on the debtor's ability to repay,
    bad faith, or the totality of the circumstances) if the chapter
    7 debtor's current monthly income (or in a joint case, the
    income of the debtor and the debtor's spouse) falls below the
    state median family income for a family of equal or lesser size
    (adjusted for larger sized families), or the state median
    family income for one earner in the case of a one-person
    household.
        The Act's second safe harbor only pertains to a motion
    under section 707(b)(2), that is, a motion to dismiss based on
    a debtor's ability to repay. It does not allow a judge, United
    States trustee, bankruptcy administrator or party in interest
    to file such motion if the income of the debtor (including a
    veteran, as that term is defined in 38 U.S.C. Sec. 101) and the
    debtor's spouse is less than certain monetary thresholds. This
    provision does not consider the nonfiling spouse's income if
    the debtor and the debtor's spouse are separated under
    applicable nonbankruptcy law, or the debtor and the debtor's
    spouse are living separate and apart, other than for the
    purpose of evading section 707(b)(2). The debtor must file a
    statement under penalty of perjury specifying that he or she
    meets one of these criteria. In addition, the statement must
    disclose the aggregate (or best estimate) of the amount of any
    cash or money payments received from the debtor's spouse
    attributed to the debtor's current monthly income.
        Section 102(b) of the Act amends section 101 of the
    Bankruptcy Code to define ``current monthly income'' as the
    average monthly income that the debtor receives (or in a joint
    case, the debtor and debtor's spouse receive) from all sources,
    without regard to whether it is taxable income, in a specified
    six-month period preceding the filing of the bankruptcy case.
    The Act specifies that the six-month period is determined as
    ending on the last day of the calendar month immediately
    preceding the filing of the bankruptcy case, if the debtor
    files the statement of current income required by Bankruptcy
    Code section 521. If the debtor does not file such schedule,
    the court determines the date on which current income is
    calculated.
        ``Current monthly income'' includes any amount paid by any
    entity other than the debtor (or, in a joint case, the debtor
    and the debtor's spouse if not otherwise a dependent) on a
    regular basis for the household expenses of the debtor or the
    debtor's dependents (and, the debtor's spouse in a joint case,
    if not otherwise a dependent). It excludes Social Security Act
    benefits and payments to victims of war crimes or crimes
    against humanity on account of their status as victims of such
    crimes. In addition, the Act provides that current monthly
    income does not include payments to victims of international or
    domestic terrorism as defined in section 2331 of title 18 of
    the United States Code on account of their status as victims of
    such terrorism.
        Section 102(c) of the Act amends section 704 of the
    Bankruptcy Code to require the United States trustee or
    bankruptcy administrator in a chapter 7 case where the debtor
    is an individual to: (1) review all materials filed by the
    debtor; and (2) file a statement with the court (within ten
    days following the meeting of creditors held pursuant to
    section 341 of the Bankruptcy Code) as to whether or not the
    debtor's case should be presumed to be an abuse under section
    707(b). The court must provide a copy of such statement to all
    creditors within five days after its filing. Within 30 days of
    the filing of such statement, the United States trustee or
    bankruptcy administrator must file either: (1) a motion under
    section 707(b); or (2) a statement setting forth the reasons
    why such motion is not appropriate in any case where the
    debtor's filing should be presumed to be an abuse and the
    debtor's current monthly income exceeds certain monetary
    thresholds.
        In a chapter 7 case where the presumption of abuse applies
    under section 707(b), section 102(d) of the Act amends
    Bankruptcy Code section 342 to require the clerk to provide
    written notice to all creditors within ten days after
    commencement of the case stating that the presumption of abuse
    applies in such case.
        Section 102(e) of the Act provides that nothing in the
    Bankruptcy Code limits the ability of a creditor to give
    information to a judge (except for information communicated ex
    parte, unless otherwise permitted by applicable law), United
    States trustee, bankruptcy administrator, or trustee.
        Section 102(f) of the Act adds a provision to Bankruptcy
    Code section 707 to permit the court to dismiss a chapter 7
    case filed by a debtor who is an individual on motion by a
    victim of a crime of violence (as defined in section 16 of
    title 18 of the United States Code) or a drug trafficking crime
    (as defined in section 924(c)(2) of title 18 of the United
    States Code). The case may be dismissed if the debtor was
    convicted of such crime and dismissal is in the best interest
    of the victim, unless the debtor establishes by a preponderance
    of the evidence that the filing of the case is necessary to
    satisfy a claim for a domestic support obligation.
        Section 102(g) of the Act amends section 1325(a) of the
    Bankruptcy Code to require the court, as a condition of
    confirming a chapter 13 plan, to find that the debtor's action
    in filing the case was in good faith.
        Section 102(h) of the Act amends section 1325(b)(1) of the
    Bankruptcy Code to specify that the court must find, in
    confirming a chapter 13 plan to which there has been an
    objection, that the debtor's disposable income will be paid to
    unsecured creditors. It also amends section 1325(b)(2)'s
    definition of disposable income. As defined under this
    provision, the term means income received by the debtor (other
    than child support payments, foster care payments, or certain
    disability payments for a dependent child) less amounts
    reasonably necessary to be expended for: (1) the maintenance or
    support of the debtor or the debtor's dependent; (2) a domestic
    support obligation that first becomes due after the case is
    filed; (3) charitable contributions (as defined in Bankruptcy
    Code section 548(d)(3)) to a qualified religious or charitable
    entity or organization (as defined in Bankruptcy Code section
    548(d)(4)) in an amount that does not exceed 15 percent of the
    debtor's gross income for the year in which the contributions
    are made; and (4) if the debtor is engaged in business, the
    payment of expenditures necessary for the continuation,
    preservation, and operation of the business. Section 1325(b)(3)
    provides that the amounts reasonably necessary to be expended
    under section 1325(b)(2) are determined in accordance with
    section 707(b)(2)(A) and (B) if the debtor's income exceeds
    certain monetary thresholds.
        Section 102(i) of the Act amends Bankruptcy Code section
    1329(a) to require the amounts paid under a confirmed chapter
    13 plan to be reduced by the actual amount expended by the
    debtor to purchase health insurance for the debtor and the
    debtor's dependents (if those dependents do not otherwise have
    such insurance) if the debtor documents the cost of such
    insurance and demonstrates such expense is reasonable and
    necessary, and the amount is not otherwise allowed for purposes
    of determining disposable income under section 1325(b). If the
    debtor previously paid for health insurance, the debtor must
    demonstrate that the amount is not materially greater than the
    amount the debtor previously paid. If the debtor did not
    previously have such insurance, the amount may not be not
    materially larger than the reasonable cost that would be
    incurred by a debtor with similar characteristics. Upon request
    of any party in interest, the debtor must file proof that a
    health insurance policy was purchased.
        Section 102(j) of the Act amends section 104 of the
    Bankruptcy Code to provide for the periodic adjustment of
    monetary amounts specified in sections 707(b) and 1325(b)(3) of
    the Bankruptcy Code, as amended by this Act.
        Section 102(k) adds to section 101 of the Bankruptcy Code a
    definition of ``median family income.''

    Sec. 103. Sense of Congress and Study. Section 103(a) of the
    Act expresses the sense of Congress that the Secretary of the
    Treasury has the authority to alter the Internal Revenue
    Service expense standards to set guidelines for repayment plans
    as needed to accommodate their use under section 707(b) of the
    Bankruptcy Code, as amended. Section 103(b) requires the
    Executive Office for United States Trustees to submit a report
    within two years from the date of the Act's enactment regarding
    the utilization of the Internal Revenue Service expense
    standards for determining the current monthly expenses of a
    debtor under section 707(b) and the impact that the application
    of these standards has had on debtors and the bankruptcy
    courts. The report may include recommendations for amendments
    to the Bankruptcy Code that are consistent with the report's
    findings.

    Sec. 104. Notice of Alternatives. Section 104 of the Act amends
    section 342(b) of the Bankruptcy Code to require the clerk,
    before the commencement of a bankruptcy case by an individual
    whose debts are primarily consumer debts, to supply such
    individual with a written notice containing: (1) a brief
    description of chapters 7, 11, 12, and 13 and the general
    purpose, benefits, and costs of proceeding under each of these
    chapters; (2) the types of services available from credit
    counseling agencies; (3) a statement advising that a person who
    knowingly and fraudulently conceals assets or makes a false
    oath or statement under penalty of perjury in connection with a
    bankruptcy case shall be subject to fine, imprisonment, or
    both; and (4) a statement warning that all information supplied
    by a debtor in connection with the case is subject to
    examination by the Attorney General.

    Sec. 105. Debtor Financial Management Training Test Program.
    Section 105 of the Act requires the Director of the Executive
    Office for United States Trustees to: (1) consult with a wide
    range of debtor education experts who operate financial
    management education programs; and (2) develop a financial
    management training curriculum and materials that can be used
    to teach individual debtors how to manage their finances
    better. The Director must select six judicial districts to test
    the effectiveness of the financial management training
    curriculum and materials for an 18-month period beginning not
    later than 270 days after the Act's enactment date. For these
    six districts, the curricula and materials must be used as the
    instructional personal financial management course required
    under Bankruptcy Code section 111. Over the period of the
    study, the Director must evaluate the effectiveness of the
    curriculum and materials as well as consider a sample of
    existing consumer education programs (such as those described
    in the Report of the National Bankruptcy Review Commission)
    that are representative of consumer education programs
    sponsored by the credit industry, chapter 13 trustees, and
    consumer counseling groups. Not later than three months after
    concluding such evaluation, the Director must submit to
    Congress a report with findings regarding the effectiveness and
    cost of the curricula, materials, and programs.

    Sec. 106. Credit Counseling. Section 106(a) of the Act amends
    section 109 of the Bankruptcy Code to require an individual--as
    a condition of eligibility for bankruptcy relief--to receive
    credit counseling within the 180-day period preceding the
    filing of a bankruptcy case by such individual. The credit
    counseling must be provided by an approved nonprofit budget and
    credit counseling agency consisting of either an individual or
    group briefing (which may be conducted telephonically or via
    the Internet) that outlined opportunities for available credit
    counseling and assisted the individual in performing a budget
    analysis. This requirement does not apply to a debtor who
    resides in a district where the United States trustee or
    bankruptcy administrator has determined that approved nonprofit
    budget and credit counseling agencies in that district are not
    reasonably able to provide adequate services to such
    individuals. Although such determination must be reviewed
    annually, the United States trustee or bankruptcy administrator
    may disapprove a nonprofit budget and credit counseling agency
    at any time.
        A debtor may be temporarily exempted from this requirement
    if he or she submits to the court a certification that: (1)
    describes exigent circumstances meriting a waiver of this
    requirement; (2) states that the debtor requested credit
    counseling services from an approved nonprofit budget and
    credit counseling agency, but was unable to obtain such
    services within the five-day period beginning on the date the
    debtor made the request; and (3) is satisfactory to the court.
    This exemption terminates when the debtor meets the
    requirements for credit counseling participation, but not
    longer than 30 days after the case is filed, unless the court,
    for cause, extends this period up to an additional 15 days.
        In addition, the mandatory credit counseling requirement
    does not apply to a debtor whom the court determines, after
    notice and a hearing, is unable to complete this requirement
    because of incapacity, disability, or active military duty in a
    military combat zone. Incapacity, under this provision, means
    the debtor is impaired by reason of mental illness or mental
    deficiency so that the debtor is incapable of realizing and
    making rational decisions with respect to his or her financial
    responsibilities. Disability, under this provision, means the
    debtor is so physically impaired as to be unable, after
    reasonable effort, to receive credit counseling whether by
    participating in person, or via telephone or Internet briefing.
        Section 106(b) of the Act amends section 727(a) of the
    Bankruptcy Code to deny a discharge to a chapter 7 debtor who
    fails to complete a personal financial management instructional
    course. This provision, however, does not apply if the debtor
    resides in a district where the United States trustee or
    bankruptcy administrator has determined that the approved
    instructional courses in that district are not adequate. Such
    determination must be reviewed annually by the United States
    trustee or bankruptcy administrator. In addition, it does not
    apply to a debtor whom the court determines, after notice and a
    hearing, is unable to complete this requirement because of
    incapacity, disability, or active military duty in a military
    combat zone.
        Section 106(c) of the Act amends section 1328 of the
    Bankruptcy Code to deny a discharge to a chapter 13 debtor who
    fails to complete a personal financial management instructional
    course. This requirement does not apply if the debtor resides
    in a district where the United States trustee or bankruptcy
    administrator has determined that the approved instructional
    courses in that district are not adequate. Such determination
    must be reviewed annually by the United States trustee or
    bankruptcy administrator. In addition, it does not apply to a
    debtor whom the court determines, after notice and a hearing,
    is unable to complete this requirement because of incapacity,
    disability, or active military duty in a military combat zone.
        Section 106(d) of the Act amends section 521 of the
    Bankruptcy Code to require a debtor who is an individual to
    file with the court: (1) a certificate from an approved
    nonprofit budget and credit counseling agency describing the
    services it provided the debtor pursuant to section 109(h); and
    (2) a copy of the repayment plan, if any, that was developed by
    the agency pursuant to section 109(h).
        Section 106(e) of the Act adds section 111 to the
    Bankruptcy Code requiring the clerk to maintain a publicly
    available list of approved: (1) credit counseling agencies that
    provide the services described in section 109(h) of the
    Bankruptcy Code; and (2) personal financial management
    instructional courses. Section 106(e) further provides that the
    United States trustee or bankruptcy administrator may only
    approve an agency or course provider under this provision
    pursuant to certain specified criteria. These include, for
    example, if a fee is charged for such services by the agency or
    course provider, the fee must be reasonable and such services
    must be provided without regard to ability to pay the fee. If
    such agency or provider course is approved, the approval may
    only be for a probationary period of up to six months. At the
    conclusion of the probationary period, the United States
    trustee or bankruptcy administrator may only approve such
    agency or instructional course for an additional one-year
    period and, thereafter for successive one-year periods, which
    has demonstrated during such period that it met the standards
    set forth in this provision and can satisfy such standards in
    the future.
        Within 30 days after any final decision occurring after the
    expiration of the initial probationary period or after any
    subsequent period, an interested person may seek judicial
    review of such decision in the appropriate United States
    district court. In addition, the district court, at any time,
    may investigate the qualifications of a credit counseling
    agency and request the production of documents to ensure the
    agency's integrity and effectiveness. The district court may
    remove a credit counseling agency that does not meet the
    specified qualifications from the approved list. The United
    States trustee or bankruptcy administrator must notify the
    clerk that a credit counseling agency or instructional course
    is no longer approved and the clerk must remove such entity
    from the approved list.
        Section 106(e) prohibits a credit counseling agency from
    providing information to a credit reporting agency as to
    whether an individual debtor has received or sought personal
    financial management instruction. A credit counseling agency
    that willfully or negligently fails to comply with any
    requirement under the Bankruptcy Code with respect to a debtor
    shall be liable to the debtor for damages in an amount equal
    to: (1) actual damages sustained by the debtor as a result of
    the violation; and (2) any court costs or reasonable attorneys'
    fees incurred in an action to recover such damages.
        Section 106(f) of the Act amends section 362 of the
    Bankruptcy Code to provide that if a chapter 7, 11, or 13 case
    is dismissed due to the creation of a debt repayment plan, the
    presumption that a case was not filed in good faith under
    section 362(c)(3) shall not apply to any subsequent bankruptcy
    case commenced by the debtor. It also provides that the court,
    on request of a party in interest, must issue an order under
    section 362(c) confirming that the automatic stay has
    terminated.

    Sec. 107. Schedules of Reasonable and Necessary Expenses. For
    purposes of section 707(b) of the Bankruptcy Code, section 107
    of the Act requires the Director of the Executive Office for
    United States Trustees to issue schedules of reasonable and
    necessary administrative expenses (including reasonable
    attorneys' fees) relating to the administration of a chapter 13
    plan for each judicial district not later than 180 days after
    the date of enactment of the Act.

                     TITLE II. ENHANCED CONSUMER PROTECTION

    Subtitle A. Penalties for Abusive Creditor Practices
    Sec. 201. Promotion of Alternative Dispute Resolution.
    Subsection (a) of section 201 of the Act amends section 502 of
    the Bankruptcy Code to permit the court, after a hearing on
    motion of the debtor, to reduce a claim based in whole on an
    unsecured consumer debt by up to 20 percent if: (1) the claim
    was filed by a creditor who unreasonably refused to negotiate a
    reasonable alternative repayment schedule proposed by an
    approved credit counseling agency on behalf of the debtor; (2)
    the debtor's offer was made at least 60 days before the filing
    of the case; (3) the offer provided for payment of at least 60
    percent of the debt over a period not exceeding the loan's
    repayment period or a reasonable extension thereof; and (4) no
    part of the debt is nondischargeable. The debtor has the burden
    of proving by clear and convincing evidence that: (1) the
    creditor unreasonably refused to consider the debtor's
    proposal; and (2) the proposed alternative repayment schedule
    was made prior to the expiration of the 60-day period. Section
    201(b) amends section 547 of the Bankruptcy Code to prohibit
    the avoidance as a preferential transfer a payment by a debtor
    to a creditor pursuant to an alternative repayment plan created
    by an approved credit counseling agency.

    Sec. 202. Effect of Discharge. Section 202 of the Act amends
    section 524 of the Bankruptcy Code in two respects. First, it
    provides that the willful failure of a creditor to credit
    payments received under a confirmed chapter 11, 12, or 13 plan
    constitutes a violation of the discharge injunction if the
    creditor's action to collect and failure to credit payments in
    the manner required by the plan caused material injury to the
    debtor. This provision does not apply if the order confirming
    the plan is revoked, the plan is in default, or the creditor
    has not received payments required to be made under the plan in
    the manner prescribed by the plan. Second, section 202 amends
    section 524 of the Bankruptcy Code to provide that the
    discharge injunction does not apply to a creditor having a
    claim secured by an interest in real property that is the
    debtor's principal residence if the creditor communicates with
    the debtor in the ordinary course of business between the
    creditor and the debtor and such communication is limited to
    seeking or obtaining periodic payments associated with a valid
    security interest in lieu of the pursuit of in rem relief to
    enforce the lien.

    Sec. 203. Discouraging Abuse of Reaffirmation Agreement
    Practices. Section 203 of the Act effectuates a comprehensive
    overhaul of the law applicable to reaffirmation agreements.
    Subsection (a) amends section 524 of the Bankruptcy Code to
    mandate that certain specified disclosures be provided to a
    debtor at or before the time he or she signs a reaffirmation
    agreement. These specified disclosures, which are the only
    disclosures required in connection with a reaffirmation
    agreement, must be in writing and be made clearly and
    conspicuously. In addition, the disclosure must include certain
    advisories and explanations. At the election of the creditor,
    the disclosure statement may include a repayment schedule. If
    the debtor is represented by counsel, section 203(a) mandates
    that the attorney file a certification stating that the
    agreement represents a fully informed and voluntary agreement
    by the debtor, that the agreement does not impose an undue
    hardship on the debtor or any dependent of the debtor, and that
    the attorney fully advised the debtor of the legal effect and
    consequences of such agreement as well as of any default
    thereunder. In those instances where the presumption of undue
    hardship applies, the attorney must also certify that the
    debtor is able to make the payments required under the
    reaffirmation agreement. Further, the debtor must submit a
    statement setting forth the debtor's monthly income and actual
    current monthly expenditures. If the debtor is represented by
    counsel and the debt being reaffirmed is owed to a credit
    union, a modified version of this statement must be used.
        Notwithstanding any other provision of the Bankruptcy Code,
    section 203(a) permits a creditor to accept payments from a
    debtor: (1) before and after the filing of a reaffirmation
    agreement with the court; or (2) pursuant to a reaffirmation
    agreement that the creditor believes in good faith to be
    effective. It further provides that the requirements specified
    in subsections (c)(2) and (k) of section 524 are satisfied if
    the disclosures required by these provisions are given in good
    faith.
        Where the amount of the scheduled payments due on the
    reaffirmed debt (as disclosed in the debtor's statement)
    exceeds the debtor's available income, it is presumed for 60
    days from the date on which the reaffirmation agreement is
    filed with the court that the agreement presents an undue
    hardship. The court must review such presumption, which can be
    rebutted by the debtor by a written statement explaining the
    additional sources of funds that would enable the debtor to
    make the required payments on the reaffirmed debt. If the
    presumption is not rebutted to the satisfaction of the court,
    the court may disapprove the reaffirmation agreement. No
    reaffirmation agreement may be disapproved without notice and
    hearing to the debtor and creditor. The hearing must be
    concluded before the entry of the debtor's discharge. The
    requirements set forth in this paragraph do not apply to
    reaffirmation agreements if the creditor is a credit union.
        Section 203(b) amends title 18 of the United States Code to
    require the Attorney General to designate a United States
    Attorney for each judicial district and to appoint a Federal
    Bureau of Investigation agent for each field office to have
    primary law enforcement responsibilities for violations of
    sections 152 and 157 of title 18 with respect to abusive
    reaffirmation agreements and materially fraudulent statements
    in bankruptcy schedules that are intentionally false or
    misleading. In addition, section 203(b) provides that the
    designated United States Attorney has primary responsibility
    with respect to bankruptcy investigations under section 3057 of
    title 18. Section 203(b) further provides that the bankruptcy
    courts must establish procedures for referring any case in
    which a materially fraudulent bankruptcy schedule has been
    filed.

    Sec. 204. Preservation of Claims and Defenses Upon Sale of
    Predatory Loans. Section 204 of the Act adds a provision to
    section 363 of the Bankruptcy Code with respect to sales of any
    interest in a consumer 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). It provides that the purchaser of such interest
    remains subject to all claims and defenses that are related to
    such assets to the same extent as that person would be subject
    to if the sale was not conducted under section 363.

    Sec. 205. GAO Study and Report on Reaffirmation Agreement
    Process. Section 205 of the Act directs the Comptroller General
    of the United States to report to Congress on how consumers are
    treated in connection with the reaffirmation agreement process.
    This report must include: (1) the policies and activities of
    creditors with respect to reaffirmation agreements; and (2)
    whether such consumers are fully, fairly, and consistently
    informed of their rights under the Bankruptcy Code. The report,
    which must be completed not later than 18 months after the date
    of enactment of this Act, may include recommendations for
    legislation to address any abusive or coercive tactics found in
    connection with the reaffirmation process.
    Subtitle B. Priority Child Support
    Sec. 211. Definition of Domestic Support Obligation. Section
    211 of the Act amends section 101 of the Bankruptcy Code to
    define a domestic support obligation as a debt that accrues
    before, on, or after the date of the order for relief and that
    it includes interest that accrues pursuant to applicable
    nonbankruptcy law. As defined in the Act, the term includes a
    debt owed to or recoverable by: (1) a spouse, former spouse, or
    child of the debtor, or such child's parent, legal guardian, or
    responsible relative; or (2) a governmental unit. To qualify as
    a domestic support obligation, the debt must be in the nature
    of alimony, maintenance, or support (including assistance
    provided by a governmental unit), without regard to whether
    such debt is expressly so designated. It must be established or
    subject to establishment before, on, or after the date of the
    order of relief pursuant to: (1) a separation agreement,
    divorce decree, or property settlement agreement; (2) an order
    of a court of record; or (3) a determination made in accordance
    with applicable nonbankruptcy law by a governmental unit. It
    does not apply to a debt assigned to a nongovernmental entity,
    unless it was assigned voluntarily by the spouse, former
    spouse, child, or parent solely for the purpose of collecting
    the debt.

    Sec. 212. Priorities for Claims for Domestic Support
    Obligations. Section 212 of the Act amends section 507(a) of
    the Bankruptcy Code to accord first priority in payment to
    allowed unsecured claims for domestic support obligations that,
    as of the petition date, are owed to or recoverable by a
    spouse, former spouse, or child of the debtor, or the parent,
    legal guardian, or responsible relative of such child, without
    regard to whether such claim is filed by the claimant or by a
    governmental unit on behalf of such claimant, on the condition
    that funds received by such unit under this provision be
    applied and distributed in accordance with nonbankruptcy law.
    Subject to these claims, section 212 accords the same payment
    priority to allowed unsecured claims for domestic support
    obligations that, as of the petition date, were 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 the claimant assigned the claim
    voluntarily 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 by such unit under this provision be applied and
    distributed in accordance with nonbankruptcy law. Where a
    trustee administers assets that may be available for payment of
    domestic support obligations under section 507(a)(1) (as
    amended), administrative expenses of the trustee allowed under
    section 503(b)(1)(A), (2) and (6) of the Bankruptcy Code must
    be paid before such claims to the extent the trustee
    administers assets that are otherwise available for the payment
    of these claims.

    Sec. 213. Requirements To Obtain Confirmation and Discharge in
    Cases Involving Domestic Support Obligations. With respect to
    chapter 11 cases, section 213(1) adds a condition for
    confirmation of a plan. It amends section 1129(a) of the
    Bankruptcy Code to provide that if a chapter 11 debtor is
    required by judicial or administrative order or statute to pay
    a domestic support obligation, then the debtor must pay all
    amounts payable under such order or statute that became payable
    postpetition as a prerequisite for confirmation.
        With respect to chapter 12 cases, section 213(2) of the Act
    amends section 1208(c) of the Bankruptcy Code to provide that
    the failure of a debtor to pay any domestic support obligation
    that first becomes payable postpetition is cause for conversion
    or dismissal of the case. Section 213(3) amends Bankruptcy Code
    section 1222(a) to permit a chapter 12 debtor to propose a plan
    paying less than full payment of all amounts owed for a claim
    entitled to priority under Bankruptcy Code section 507(a)(1)(B)
    if all of the debtor's projected disposable income for a five-
    year period is applied to make payments under the plan. Section
    213(4) of the Act amends Bankruptcy Code section 1222(b) to
    permit a chapter 12 debtor to propose a plan that pays
    postpetition interest on claims that are nondischargeable under
    Section 1228(a), but only to the extent that the debtor has
    disposable income available to pay such interest after payment
    of all allowed claims in full. Section 213(5) amends Bankruptcy
    Code section 1225(a) to provide that if a chapter 12 debtor is
    required by judicial or administrative order or statute to pay
    a domestic support obligation, then the debtor must pay such
    obligations pursuant to such order or statute that became
    payable postpetition as a condition of confirmation. Section
    213(6) amends Bankruptcy Code section 1228(a) to condition the
    granting of a chapter 12 discharge upon the debtor's payment of
    certain postpetition domestic support obligations.
        With respect to chapter 13 cases, section 213(7) of the Act
    amends Bankruptcy Code section 1307(c) to provide that the
    failure of a debtor to pay any domestic support obligation that
    first becomes payable postpetition is cause for conversion or
    dismissal of the debtor's case. Section 213(8) amends
    Bankruptcy Code section 1322(a) to permit a chapter 13 debtor
    to propose a plan paying less than the full amount of a claim
    entitled to priority under Bankruptcy Code section 507(a)(1)(B)
    if the plan provides that all of the debtor's projected
    disposable income over a five-year period will be applied to
    make payments under the plan. Section 213(9) amends Bankruptcy
    Code section 1322(b) to permit a chapter 13 debtor to propose a
    plan that pays postpetition interest on nondischargeable debts
    under section 1328(a), but only to the extent that the debtor
    has disposable income available to pay such interest after
    payment in full of all allowed claims. Section 213(10) amends
    Bankruptcy Code section 1325(a) to provide that if a chapter 13
    debtor is required by judicial or administrative order or
    statute to pay a domestic support obligation, then the debtor
    must pay all such obligations pursuant to such order or statute
    that became payable postpetition as a condition of
    confirmation. Section 213(11) amends Bankruptcy Code section
    1328(a) to condition the granting of a chapter 13 discharge on
    the debtor's payment of certain postpetition domestic support
    obligations.

    Sec. 214. Exceptions To Automatic Stay in Domestic Support
    Proceedings. Under current law, section 362(b)(2) of the
    Bankruptcy Code excepts from the automatic stay the
    commencement or continuation of an action or proceeding: (1)
    for the establishment of paternity; or (2) the establishment or
    modification of an order for alimony, maintenance or support.
    It also permits the collection of such obligations from
    property that is not property of the estate. Section 214 makes
    several revisions to Bankruptcy Code section 362(b)(2). First,
    it replaces the reference to ``alimony, maintenance or
    support'' with ``domestic support obligations.'' Second, it
    adds to section 362(b)(2) actions or proceedings concerning:
    (1) child custody or visitation; (2) the dissolution of a
    marriage (except to the extent such proceeding seeks division
    of property that is property of the estate); and (3) domestic
    violence. Third, it permits 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 as well as the withholding, suspension, or
    restriction of a driver's license, or a professional,
    occupational or recreational license under state law, pursuant
    to section 466(a)(16) of the Social Security Act. Fourth, it
    authorizes the reporting of overdue support owed by a parent to
    any consumer reporting agency pursuant to section 466(a)(7) of
    the Social Security Act. Fifth, it permits the interception of
    tax refunds as authorized by sections 464 and 466(a)(3) of the
    Social Security Act or analogous state law. Sixth, it allows
    medical obligations, as specified under title IV of the Social
    Security Act, to be enforced notwithstanding the automatic
    stay.

    Sec. 215. Nondischargeability of Certain Debts for Alimony,
    Maintenance, and Support. Section 215 of the Act amends
    Bankruptcy Code section 523(a)(5) to provide that a ``domestic
    support obligation'' (as defined in section 211 of the Act) is
    nondischargeable and eliminates Bankruptcy Code section
    523(a)(18). Section 215(2) amends Bankruptcy Code section
    523(c) to delete the reference to section 523(a)(15) in that
    provision. Section 215(3) amends section 523(a)(15) to provide
    that obligations to a spouse, former spouse, or a child of the
    debtor (not otherwise described in section 523(a)(5)) incurred
    in connection with a divorce or separation or related action
    are nondischargeable irrespective of the debtor's inability to
    pay such debts.

    Sec. 216. Continued Liability of Property. Section 216(1) of
    the Act amends section 522(c) of the Bankruptcy Code to make
    exempt property liable for nondischargeable domestic support
    obligations notwithstanding any contrary provision of
    applicable nonbankruptcy law. Section 216(2) and (3) make
    conforming amendments to sections 522(f)(1)(A) and 522(g)(2) of
    the Bankruptcy Code.

    Sec. 217. Protection of Domestic Support Claims Against
    Preferential Transfer Motions. Section 217 of the Act makes a
    conforming amendment to Bankruptcy Code section 547(c)(7) to
    provide that a bona fide payment of a debt for a domestic
    support obligation may not be avoided as a preferential
    transfer.

    Sec. 218. Disposable Income Defined. Section 218 of the Act
    amends section 1225(b)(2)(A) of the Bankruptcy Code to provide
    that disposable income in a chapter 12 case does not include
    payments for postpetition domestic support obligations.

    Sec. 219. Collection of Child Support. Section 219 amends
    sections 704, 1106, 1202, and 1302 of the Bankruptcy Code to
    require trustees in chapter 7, 11, 12, and 13 cases to provide
    certain notices to child support claimants and governmental
    enforcement agencies. In addition, the Act conforms internal
    statutory cross references to Bankruptcy Code section
    523(a)(14A) and deletes the reference to Bankruptcy Code
    section 523(a)(14) with respect to chapter 13, as this
    provision is inapplicable to that chapter.
        Section 219(a) requires a chapter 7 trustee to provide
    written notice to a domestic support claimant of the right to
    use the services of a state child support enforcement agency
    established under sections 464 and 466 of the Social Security
    Act in the state where the claimant resides for assistance in
    collecting child support during and after the bankruptcy case.
    The notice must include the agency's address and telephone
    number as well as explain the claimant's right to payment under
    the applicable chapter of the Bankruptcy Code. In addition, the
    trustee must provide written notice to the claimant and the
    agency of such claim and include the name, address, and
    telephone number of the child support claimant. At the time the
    debtor is granted a discharge, the trustee must notify both the
    child support claimant and the agency that the debtor was
    granted a discharge as well as supply them with the debtor's
    last known address, the last known name and address of the
    debtor's employer, and the name of each creditor holding a debt
    that is not discharged under section 523(a)(2), (4) or (14A) or
    holding a debt that was reaffirmed pursuant to Bankruptcy Code
    section 524. A claimant or agency may request the debtor's last
    known address from a creditor holding a debt that is not
    discharged under section 523(a)(2), (4) or (14A) or that is
    reaffirmed pursuant to section 524 of the Bankruptcy Code. A
    creditor who discloses such information, however, is not liable
    to the debtor or any other person by reason of such disclosure.
    Subsections (b), (c), and (d) of section 219 of the Act impose
    comparable requirements for chapter 11, 12, and 13 trustees.

    Sec. 220. Nondischargeability of Certain Educational Benefits
    and Loans. Section 220 of the Act amends section 523(a)(8) of
    the Bankruptcy Code to provide that a debt for a qualified
    education loan (as defined in section 221(e)(1) of the Internal
    Revenue Code) is nondischargeable, unless excepting such debt
    from discharge would impose an undue hardship on the debtor and
    the debtor's dependents.
    Subtitle C. Other Consumer Protections
    Sec. 221. Amendments To Discourage Abusive Bankruptcy Filings.
    Section 221 of the Act makes a series of amendments to section
    110 of the Bankruptcy Code. First, section 221 clarifies that
    the definition of a bankruptcy petition preparer does not
    include an attorney for a debtor or an employee of an attorney
    under the direct supervision of such attorney. Second, it
    amends subsections (b) and (c) of section 110 to provide that
    if a bankruptcy petition preparer is not an individual, then an
    officer, principal, responsible person, or partner of the
    preparer must sign certain documents filed in connection with
    the bankruptcy case as well as state the person's name and
    address on such documents. Third, it requires a bankruptcy
    petition preparer to give the debtor written notice (as
    prescribed by the Judicial Conference of the United States)
    explaining that the preparer is not an attorney and may not
    practice law or give legal advice. The notice may include
    examples of legal advice that a preparer may not provide. Such
    notice must be signed by the preparer under penalty of perjury
    and the debtor and be filed with any document for filing.
    Fourth, the petition preparer is prohibited from giving legal
    advice, including with respect to certain specified items.
    Fifth, it permits the Supreme Court to promulgate rules or the
    Judicial Conference of the United States to issue guidelines
    for setting the maximum fees that a bankruptcy petition
    preparer may charge for services. Sixth, section 221 requires
    the preparer to notify the debtor of such maximum fees.
    Seventh, it specifies that the bankruptcy petition preparer
    must certify that it complied with this notification
    requirement. Eighth, it requires the court to order the
    turnover of any fees in excess of the value of the services
    rendered by the preparer within the 12-month period preceding
    the bankruptcy filing. Ninth, section 221 provides that all
    fees charged by a preparer may be forfeited if the preparer
    fails to comply with certain requirements specified in
    Bankruptcy Code section 110, as amended by this provision.
    Tenth, it allows a debtor to exempt fees recovered under this
    provision pursuant to Bankruptcy Code section 522(b). Eleventh,
    it specifically authorizes the court to enjoin a bankruptcy
    petition preparer who has violated a court order issued under
    section 110. Twelfth, it generally revises section 110's
    penalty provisions and requires such penalties to be paid into
    a special fund of the United States trustee for the purpose of
    funding the enforcement of section 110 on a national basis.
    With respect to Bankruptcy Administrator districts, the funds
    are to be deposited as offsetting receipts pursuant to section
    1931 of title 28 of the United States Code.

    Sec. 222. Sense of Congress. Section 222 of the Act expresses
    the sense of Congress that the states should develop personal
    finance curricula for use in elementary and secondary schools.

    Sec. 223. Additional Amendments to Title 11, United States
    Code. Section 223 of the Act amends section 507(a) of the
    Bankruptcy Code to accord a tenth-level priority to claims for
    death or personal injuries resulting from the debtor's
    operation of a motor vehicle or vessel while intoxicated.

    Sec. 224. Protection of Retirement Savings in Bankruptcy. The
    intent of section 224 is to expand the protection for tax-
    favored retirement plans or arrangements that may not be
    already protected under Bankruptcy Code section 541(c)(2)
    pursuant to Patterson v. Shumate,\84\ or other state or Federal
    law. Subsection (a) of section 224 of the Act amends section
    522 of the Bankruptcy Code to permit a debtor to exempt certain
    retirement funds to the extent those monies 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 and
    that have received a favorable determination pursuant to
    Internal Revenue Code section 7805 that is in effect as of the
    date of the commencement of the case. If the retirement monies
    are in a retirement fund that has not received a favorable
    determination, those monies are exempt if the debtor
    demonstrates that no prior unfavorable determination has been
    made by a court or the Internal Revenue Service, and the
    retirement fund is in substantial compliance with the
    applicable requirements of the Internal Revenue Code. If the
    retirement fund fails to be in substantial compliance with
    applicable requirements of the Internal Revenue Code, the
    debtor may claim the retirement funds as exempt if he or she is
    not materially responsible for such failure. This section also
    applies to certain direct transfers and rollover distributions.
    In addition, this provision ensures that the specified
    retirement funds are exempt under state as well as Federal law.
    ---------------------------------------------------------------------------
        \84\ 504 U.S. 753 (1992).
    ---------------------------------------------------------------------------
        Section 224(b) amends section 362(b) of the Bankruptcy Code
    to except from the automatic stay the withholding of income
    from a debtor's wages pursuant to an agreement authorizing such
    withholding for the benefit of a pension, profit-sharing, stock
    bonus, or other employer-sponsored plan established under
    Internal Revenue Code section 401, 403, 408, 408A, 414, 457, or
    501(c) to the extent that the amounts withheld are used solely
    to repay a loan from a plan as authorized by section 408(b)(1)
    of the Employee Retirement Income Security Act of 1974 or
    subject to Internal Revenue Code section 72(p) or with respect
    to a loan from certain thrift savings plans. Section 224(b)
    further provides that this exception may not be used to cause
    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 to be construed to be a claim or debt within the
    meaning of the Bankruptcy Code.
        Section 224(c) amends Bankruptcy Code section 523(a) to
    except from discharge any amount owed by the debtor to a
    pension, profit-sharing, stock bonus, or other plan established
    under Internal Revenue Code section 401, 403, 408, 408A, 414,
    457, or 501(c) under a loan authorized under section 408(b)(1)
    of the Employee Retirement Income Security Act of 1974 or
    subject to Internal Revenue Code section 72(p) or with respect
    to a loan from certain thrift savings plans. Section 224(c)
    further provides that this exception to discharge may not be
    used to cause 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 to be construed to be a claim or debt
    within the meaning of the Bankruptcy Code.
        Section 224(d) amends Bankruptcy Code section 1322 to
    provide that a chapter 13 plan may not materially alter the
    terms of a loan described in section 362(b)(19) and that any
    amounts required to repay such loan shall not constitute
    ``disposable income'' under section 1325 of the Bankruptcy
    Code.
        Section 224(e) amends section 522 of the Bankruptcy Code to
    impose a $1 million cap (periodically adjusted pursuant to
    section 104 of the Bankruptcy Code to reflect changes in the
    Consumer Price Index) on the value of the debtor's interest in
    an individual retirement account established under either
    section 408 or 408A of the Internal Revenue Code (other than a
    simplified employee pension account under section 408(k) or a
    simple retirement account under section 408(p) of the Internal
    Revenue Code) that a debtor may claim as exempt property. This
    limit applies without regard to amounts attributable to
    rollover contributions made pursuant to section 402(c),
    402(e)(6), 403(a)(4), 403(a)(5), or 403(b)(8) of the Internal
    Revenue Code and earnings thereon. The cap may be increased if
    required in the interests of justice.

    Sec. 225. Protection of Education Savings in Bankruptcy.
    Subsection (a) of section 225 of the Act amends section 541 of
    the Bankruptcy Code to provide that funds placed not later than
    365 days before the filing of the bankruptcy case in an
    education individual retirement account are not property of the
    estate if certain criteria are met. First, the designated
    beneficiary of such account must be a child, stepchild,
    grandchild or step-grandchild of the debtor for the taxable
    year during which funds were placed in the account. A legally
    adopted child or a foster child, under certain circumstances,
    may also qualify as a designated beneficiary. Second, such
    funds may not be pledged or promised to an entity in connection
    with any extension of credit and they may not be excess
    contributions (as described in section 4973(e) of the Internal
    Revenue Code). Funds deposited between 720 days and 365 days
    before the filing date are protected to the extent they do not
    exceed $5,000. Similar criteria apply with respect to funds
    used to purchase a tuition credit or certificate or to funds
    contributed to a qualified state tuition plan under section
    529(b)(1)(A) of the Internal Revenue Code. Section 225(b)
    amends Bankruptcy Code section 521 to require a debtor to file
    with the court a record of any interest that the debtor has in
    an education individual retirement account or qualified state
    tuition program.

    Sec. 226. Definitions. Subsection (a) of section 226 of the Act
    amends section 101 of the Bankruptcy Code to add certain
    definitions with respect to debt relief agencies. Section
    226(a)(1) defines an ``assisted person'' as a person whose
    debts consist primarily of consumer debts and whose nonexempt
    assets are less than $150,000. Section 226(a)(2) defines
    ``bankruptcy assistance'' as any goods or services sold or
    otherwise provided to an assisted person with the express or
    implied purpose of giving information, advice, or counsel;
    preparing documents for filing; or attending a meeting of
    creditors pursuant to section 341; appearing in a case or
    proceeding on behalf of a person; or providing legal
    representation in a case or proceeding under the Bankruptcy
    Code. Section 226(a)(3) defines a ``debt relief agency'' as any
    person (including a bankruptcy petition preparer) who provides
    bankruptcy assistance to an assisted person in return for the
    payment of money or other valuable consideration. The
    definition specifically excludes certain entities. First, it
    does not apply to a person who is an officer, director,
    employee, or agent of a person who provides bankruptcy
    assistance or of a bankruptcy petition preparer. Second, it is
    not applicable to a nonprofit organization exemption from
    taxation under section 501(c)(3) of the Internal Revenue Code.
    Third, it is inapplicable to a creditor who assisted such
    person to the extent the assistance pertained to the
    restructuring of any debt owed by the person to the creditor.
    Fourth, the definition does not apply to a depository
    institution (as defined in section 3 of the Federal Deposit
    Insurance Act), or any Federal or state credit union (as
    defined in section 101 of the Federal Credit Union Act), as
    well as any affiliate or subsidiary of such depository
    institution or credit union. Fifth, an author, publisher,
    distributor, or seller of works subject to copyright protection
    under title 17 of the United States Code when acting in such
    capacity is not within the ambit of this definition.
        Section 226(b) amends section 104(B)(1) of the Bankruptcy
    Code to permit the monetary amount set forth in the definition
    of an ``assisted person'' to be automatically adjusted to
    reflect the change in the Consumer Price Index.

    Sec. 227. Restrictions on Debt Relief Agencies. Section 227 of
    the Act creates a new provision in the Bankruptcy Code intended
    to proscribe certain activities of a debt relief agency. It
    prohibits such agency from: (1) failing to perform any service
    that it informed an assisted person it would provide; (2)
    advising an assisted person to make an untrue and misleading
    statement (or that upon the exercise of reasonable care, should
    have been known to be untrue or misleading) in a document filed
    in a bankruptcy case; (3) misrepresenting the services it
    provides and the benefits and risks of bankruptcy; and (4)
    advising an assisted person or prospective assisted person to
    incur additional debt in contemplation of filing for bankruptcy
    relief or for the purpose of paying fees for services rendered
    by an attorney or petition preparer in connection with the
    bankruptcy case. Any waiver by an assisted person of the
    protections under this provision are unenforceable, except
    against a debt relief agency.
        In addition, section 227 imposes penalties for the
    violation of section 526, 527 or 528 of the Bankruptcy Code.
    First, any contract between a debt relief agency and an
    assisted person that does not comply with these provisions is
    void and may not be enforced by any state or Federal court or
    by any person, except an assisted person. Second, a debt relief
    agency is liable to an assisted person, under certain
    circumstances, for any fees or charges paid by such person to
    the agency, actual damages, and reasonable attorneys' fees and
    costs. The chief law enforcement officer of a state who has
    reason to believe that a person has violated or is violating
    section 526 may seek to have such violation enjoined and
    recover actual damages. Third, section 227 provides that the
    United States district court has concurrent jurisdiction of
    certain actions under section 526. Fourth, section 227 provides
    that sections 526, 527 and 528 preempt inconsistent state law.
    In addition, it provides that these provisions do not limit or
    curtail the authority of a Federal court, a state, or a
    subdivision or instrumentality of a state, to determine and
    enforce qualifications for the practice of law before the
    Federal court or under the laws of that state.

    Sec. 228. Disclosures. Section 228 of the Act requires a debt
    relief agency to provide certain specified written notices to
    an assisted person. These include the notice required under
    section 342(b)(1) (as amended by this Act) as well as a notice
    advising that: (1) all information the assisted person provides
    in connection with the case must be complete, accurate and
    truthful; (2) all assets and liabilities must be completely and
    accurately disclosed in the documents filed to commence the
    case, including the replacement value of each asset (if
    required) after reasonable inquiry to establish such value; (3)
    current monthly income, monthly expenses and, in a chapter 13
    case, disposable income, must be stated after reasonable
    inquiry; and (4) the information an assisted person provides
    may be audited and that the failure to provide such information
    may result in dismissal of the case or other sanction
    including, in some instances, criminal sanctions. In addition,
    the agency must supply certain specified advisories and
    explanations regarding the bankruptcy process. Further, this
    provision requires the agency to advise an assisted person (to
    the extent permitted under nonbankruptcy law) concerning asset
    valuation, the calculation of disposable income, and the
    determination of exempt property.

    Sec. 229. Requirements for Debt Relief Agencies. Section 229
    adds a provision to the Bankruptcy Code requiring a debt relief
    agency--not later than five business days after the first date
    on which it provides any bankruptcy assistance services to an
    assisted person (but prior to such assisted person's bankruptcy
    petition being filed)--to execute a written contract with the
    assisted person. The contract must specify clearly and
    conspicuously the services the agency will provide, the basis
    on which fees will be charged for such services, and the terms
    of payment. The assisted person must be given a copy of the
    fully executed and completed. The debt relief agency must
    include certain specified mandatory statements in any
    advertisement of bankruptcy assistance services or regarding
    the benefits of bankruptcy that is directed to the general
    public whether through the general media, seminars, specific
    mailings, telephonic or electronic messages, or otherwise.

    Sec. 230. GAO Study. Section 230 of the Act directs the
    Comptroller General of the United States to study and prepare a
    report on the feasibility, efficacy and cost of requiring
    trustees to supply certain specified information about a
    debtor's bankruptcy case to the Office of Child Support
    Enforcement for the purpose of determining whether a debtor has
    outstanding child support obligations.

    Sec. 231. Protection of Personally Identifiable Information.
    Section 231 of the Act clarifies that it applies to personally
    identifiable information and does not preempt applicable
    nonbankruptcy law. In addition, the provision specifies that
    court approval must be preceded by the appointment of a privacy
    ombudsman to effectuate the intent of this provision.
        Subsection (a) amends Bankruptcy Code section 363(b)(1) to
    provide that if a debtor, in connection with offering a product
    or service, discloses to an individual a policy prohibiting the
    transfer of personally identifiable information to persons
    unaffiliated with the debtor, and the policy is in effect at
    the time of the bankruptcy filing, then the trustee may not
    sell or lease such information unless either of the following
    conditions is satisfied: (1) the sale is consistent with such
    policy; or (2) the court, after appointment of a consumer
    privacy ombudsman (pursuant to section 332 of the Bankruptcy
    Code, as amended) and notice and hearing, the court approves
    the sale or lease upon due consideration of the facts,
    circumstances, and conditions of the sale or lease.
        Section 231(b) amends Bankruptcy Code section 101 to add a
    definition of ``personally identifiable information.'' The term
    applies to information provided by an individual to the debtor
    in connection with obtaining a product or service from the
    debtor primarily for personal, family, or household purposes.
    It includes the individual's: (1) first name or initial and
    last name (whether given at birth or adoption or legally
    changed); (2) physical home address; (3) electronic address,
    including an e-mail address; (4) home telephone number; (5)
    Social Security account number; or (vi) credit card account
    number. The term also includes information if it is identified
    in connection with the above items: (1) an individual's birth
    date, birth or adoption certificate number, or place of birth;
    or (2) any other information concerning an identified
    individual that, if disclosed, will result in the physical or
    electronic contacting or identification of that person.

    Sec. 232. Consumer Privacy Ombudsman. Section 232 implements
    the preceding provision of the Act with respect to the
    appointment and responsibilities of a consumer privacy
    ombudsman. It provides that if a hearing is required under
    section 363(b)(1)(B) (as amended), the court must order the
    United States trustee to appoint a disinterested person to
    serve as the consumer privacy ombudsman and to provide timely
    notice of the hearing to such person. It permits the ombudsman
    to appear and be heard at such hearing. The ombudsman must
    provide the court with information to assist its consideration
    of the facts, circumstances and conditions of the proposed sale
    or lease of personally identifiable information. The
    information may include a presentation of the debtor's privacy
    policy, potential losses or gains of privacy to consumers if
    the sale or lease is approved, potential costs or benefits to
    consumers if the sale or lease is approved, and possible
    alternatives that would mitigate potential privacy losses or
    costs to consumers. Section 232 prohibits the ombudsman from
    disclosing any personally identifiable information obtained in
    the case by such individual. In addition, the provision amends
    Bankruptcy Code section 330(a)(1) to permit an ombudsman to be
    compensated.

    Sec. 233. Prohibition on Disclosure of Name of Minor Children.
    Section 233 of the Act adds a new provision to the Bankruptcy
    Code (section 112) specifying that a debtor may be required to
    provide information regarding his or her minor child in
    connection with the bankruptcy case, but such debtor may not be
    required to disclose the child's name in the public records. It
    provides, however, that the debtor may be required to disclose
    this information in a nonpublic record maintained by the court,
    which may be available for inspection by the United States
    trustee, trustee or an auditor, if any. Section 233 prohibits
    the court, United States trustee, trustee, or auditor from
    disclosing such minor child's name.

    Sec. 234. Protection of Personal Information. Bankruptcy Code
    section 107, with certain exceptions, provides that all papers
    filed in a bankruptcy case are public records. Exceptions
    include trade secrets, confidential research, and scandalous or
    defamatory matter. Section 234(a) adds a new provision to
    section 107 that permits a bankruptcy court to prohibit the
    disclosure of certain types of information concerning an
    individual to the extent the court finds that disclosure of
    such information would create undue risk of identity theft or
    other unlawful injury to the individual or the individual's
    property. The protected information includes any means of
    identification as defined in 18 U.S.C. Sec. 1028(d) that is
    contained in a document filed in a bankruptcy case. The
    bankruptcy court must provide access to information protected
    under this new provision to an entity acting pursuant to the
    police or regulatory power of a domestic governmental unit upon
    ex parte application demonstrating cause. The provision also
    provides that the United States trustee, bankruptcy
    administrator, trustee, and any auditor serving pursuant to
    section 586(f) of title 28 of the United States Code shall have
    access to all information contained in a bankruptcy case and
    that such persons shall not disclose information specifically
    protected by the court. Section 234(b) amends Bankruptcy Code
    section 342(c), which requires a debtor to disclose in any
    notice required by the debtor to be given to a creditor to
    include the debtor's taxpayer identification number. Section
    234(b) requires the debtor only to supply the last four digits
    of the taxpayer identification number. If, however, the notice
    concerns an amendment that adds a creditor to the schedules of
    assets or liabilities, the debtor must include the full
    taxpayer identification number in the notice sent to such
    creditor. The notice filed with the court must only include the
    last four digits of such notice.

                    TITLE III. DISCOURAGING BANKRUPTCY ABUSE

    Sec. 301. Technical Amendments. Section 301 of the Act makes a
    clarifying amendment to section 523(a)(17) of the Bankruptcy
    Code concerning the dischargeability of court fees incurred by
    prisoners. Section 523(a)(17) was added to the Bankruptcy Code
    by the Omnibus Consolidated Rescissions and Appropriations Act
    of 1996 \85\ to except from discharge the filing fees and
    related costs and expenses assessed by a court in a civil case
    or appeal. As the result of a drafting error, however, this
    provision might be construed to apply to filing fees, costs or
    expenses incurred by any debtor, not solely by those who are
    prisoners. The amendment eliminates this ambiguity and makes
    other conforming changes to narrow its application in
    accordance with its original intent.
    ---------------------------------------------------------------------------
        \85\ Pub. L. No. 104-134, Sec. 804(b) (1996).

    Sec. 302. Discouraging Bad Faith Repeat Filings. Section 302 of
    the Act amends section 362(c) of the Bankruptcy Code to
    terminate the automatic stay within 30 days in a chapter 7, 11,
    or 13 case filed by or against an individual if such individual
    was a debtor in a previously dismissed case pending within the
    preceding one-year period. The provision does not apply to a
    case refiled under a chapter other than chapter 7 after
    dismissal of the prior chapter 7 case pursuant to section
    707(b) of the Bankruptcy Code. Upon motion of a party in
    interest, the court may continue the automatic stay after
    notice and a hearing completed prior to the expiration of the
    30-day period if such party demonstrates that the latter case
    was filed in good faith as to the creditors who are stayed by
    the filing.
        For purposes of this provision, a case is presumptively not
    filed in good faith as to all creditors (but such presumption
    may be rebutted by clear and convincing evidence) if: (1) more
    than one bankruptcy case under chapter 7, 11 or 13 was
    previously filed by the debtor within the preceding one-year
    period; (2) the prior chapter 7, 11, or 13 case was dismissed
    within the preceding year for the debtor's failure to (a) file
    or amend without substantial excuse a document required under
    the Bankruptcy Code or court order, (b) provide adequate
    protection ordered by the court, or (c) perform the terms of a
    confirmed plan; or (3) there has been no substantial change in
    the debtor's financial or personal affairs since the dismissal
    of the prior case, or there is no reason to conclude that the
    pending case will conclude either with a discharge (if a
    chapter 7 case) or confirmation (if a chapter 11 or 13 case).
    In addition, section 302 provides that a case is presumptively
    deemed not to be filed in good faith as to any creditor who
    obtained relief from the automatic stay in the prior case or
    sought such relief in the prior case and such action was
    pending at the time of the prior case's dismissal. The
    presumption may be rebutted by clear and convincing evidence. A
    similar presumption applies if two or more bankruptcy cases
    were pending in the one-year preceding the filing of the
    pending case.

    Sec. 303. Curbing Abusive Filings. Section 303 of the Act is
    intended to reduce abusive filings. Subsection (a) amends
    Bankruptcy Code section 362(d) to add a new ground for relief
    from the automatic stay. Under this provision, cause for relief
    from the automatic stay may be established for a creditor whose
    claim is secured by an interest in real property, if the court
    finds that the filing of the bankruptcy case was part of a
    scheme to delay, hinder and defraud creditors that involved
    either: (1) a transfer of all or part of an ownership interest
    in real property without such creditor's consent or without
    court approval; or (2) multiple bankruptcy filings affecting
    the real property. If recorded in compliance with applicable
    state law governing notice of an interest in or a lien on real
    property, an order entered under this provision is binding in
    any other bankruptcy case for two years from the date of entry
    of such order. A debtor in a subsequent case may move for
    relief based upon changed circumstances or for good cause shown
    after notice and a hearing. Section 303(a) further provides
    that any federal, state or local governmental unit that accepts
    a notice of interest or a lien in real property, must accept a
    certified copy of an order entered under this provision.
        Section 303(b) amends Bankruptcy Code section 362(b) to
    except from the automatic stay an act to enforce any lien
    against or security interest in real property within two years
    following the entry of an order entered under section
    362(d)(4). A debtor, in a subsequent case, may move for relief
    from such order based upon changed circumstances or for other
    good cause shown after notice and a hearing. Section 303(b)
    also provides that the automatic stay does not apply in a case
    where the debtor: (1) is ineligible to be a debtor in a
    bankruptcy case pursuant to section 109(g) of the Bankruptcy
    Code; or (2) filed the bankruptcy case in violation of an order
    issued in a prior bankruptcy case prohibiting the debtor from
    being a debtor in a subsequent bankruptcy case.

    Sec. 304. Debtor Retention of Personal Property Security.
    Section 304(1) of the Act amends section 521(a) of the
    Bankruptcy Code to provide that an individual who is a chapter
    7 debtor may not retain possession of personal property
    securing, in whole or in part, a purchase money security
    interest unless the debtor, within 45 days after the first
    meeting of creditors, enters into a reaffirmation agreement
    with the creditor, or redeems the property. If the debtor fails
    to so act within the prescribed period, the property is not
    subject to the automatic stay and is no longer property of the
    estate. An exception applies if the court: (1) determines on
    motion of the trustee filed before the expiration of the 45-day
    period that the property has consequential value or would
    benefit the bankruptcy estate; (2) orders adequate protection
    of the creditor's interest; and (3) directs the debtor to
    deliver any collateral in the debtor's possession. Section
    304(2) amends section 722 to clarify that a chapter 7 debtor
    must pay the redemption value in full at the time of
    redemption.

    Sec. 305. Relief from the Automatic Stay When the Debtor Does
    Not Complete Intended Surrender of Consumer Debt Collateral.
    Paragraph (1) of section 305 of the Act amends Bankruptcy Code
    section 362 to terminate the automatic stay with respect to
    personal property of the estate or of the debtor in a chapter
    7, 11, or 13 case (where the debtor is an individual) that
    secures a claim (in whole or in part) or is subject to an
    unexpired lease if the debtor fails to: (1) file timely a
    statement of intention as required by section 521(a)(2) of the
    Bankruptcy Code with respect to such property; or (2) indicate
    in such statement whether the property will be surrendered or
    retained, and if retained, whether the debtor will redeem the
    property or reaffirm the debt, or assume an unexpired lease, if
    the trustee does not. Likewise, the automatic stay is
    terminated if the debtor fails to take the action specified in
    the statement of intention in a timely manner, unless the
    statement specifies reaffirmation and the creditor refuses to
    enter into the reaffirmation agreement on the original contract
    terms. In addition to terminating the automatic stay, this
    provision renders such property to be no longer property of the
    estate. An exception pertains where the court determines, on
    the motion of the trustee made prior to the expiration of the
    applicable time period under section 521(a)(2), and after
    notice and a hearing, that such property is of consequential
    value or benefit to the estate, orders adequate protection of
    the creditor's interest, and directs the debtor to deliver any
    collateral in the debtor's possession.
        Section 305(2) amends section 521 of the Bankruptcy Code to
    make the requirement to file a statement of intention
    applicable to all secured debts, not just secured consumer
    debts. In addition, it requires the debtor to effectuate his or
    her stated intention within 30 days from the first date set for
    the meeting of creditors. If the debtor fails to timely
    undertake certain specified actions with respect to property
    that a lessor or bailor owns and has leased, rented or bailed
    to the debtor or in which a creditor has a security interest
    (not otherwise avoidable under section 522(f), 544, 545, 547,
    548 or 549 of the Bankruptcy Code), then nothing in the
    Bankruptcy Code shall prevent or limit the operation of a
    provision in a lease or agreement that places the debtor in
    default by reason of the debtor's bankruptcy or insolvency.

    Sec. 306. Giving Secured Creditors Fair Treatment in Chapter
    13. Subsection (a) of section 306 of the Act amends Bankruptcy
    Code section 1325(a)(5)(B)(i) to require--as a condition of
    confirmation--that a chapter 13 plan provide that a secured
    creditor retain its lien until the earlier of when the
    underlying debt is paid or the debtor receives a discharge. If
    the case is dismissed or converted prior to completion of the
    plan, the secured creditor is entitled to retain its lien to
    the extent recognized under applicable nonbankruptcy law.
        Section 306(b) adds a new paragraph to section 1325(a) of
    the Bankruptcy Code specifying that Bankruptcy Code section 506
    does not apply to a debt incurred within the two and one-half
    year period preceding the filing of the bankruptcy case if the
    debt is secured by a purchase money security interest in a
    motor vehicle acquired for the personal use of the debtor
    within 910 days preceding the filing of the petition. Where the
    collateral consists of any other type of property having value,
    section 306(b) provides that section 506 of the Bankruptcy Code
    does not apply if the debt was incurred during the one-year
    period preceding the filing of the bankruptcy case.
        Section 306(c)(1) amends section 101 of the Bankruptcy Code
    to define the term ``debtor's principal residence'' as a
    residential structure (including incidental property) without
    regard to whether or not such structure is attached to real
    property. The term includes an individual condominium or
    cooperative unit as well as a mobile or manufactured home, or a
    trailer.
        Section 306(c)(2) amends section 101 of the Bankruptcy Code
    to define the term ``incidental property'' as property commonly
    conveyed with a principal residence in the area where the real
    property is located. The term includes all easements, rights,
    appurtenances, fixtures, rents, royalties, mineral rights, oil
    or gas rights or profits, water rights, escrow funds, and
    insurance proceeds. Further, the term encompasses all
    replacements and additions.

    Sec. 307. Domiciliary Requirements for Exemptions. Section 307
    of the Act amends section 522(b)(2)(A) of the Bankruptcy Code
    to extend the time that a debtor must be domiciled in a state
    from 180 days to 730 days before he or she may claim that
    state's exemptions. If the debtor's domicile has not been
    located in a single state for the 730-day period, then the
    state where the debtor was domiciled in the 180-day period
    preceding the 730-day period (or the longer portion of such
    180-day period) controls. If the effect of this provision is to
    render the debtor ineligible for any exemption, the debtor may
    elect to exempt property of the kind described in the Federal
    exemption notwithstanding the state has opted out of the
    Federal exemption allowances.

    Sec. 308. Reduction of Homestead Exemption for Fraud. Section
    308 amends section 522 of the Bankruptcy Code to reduce the
    value of a debtor's interest in the following property that may
    be claimed as exempt under certain circumstances: (i) real or
    personal property that the debtor or a dependent of the debtor
    uses as a residence, (ii) a cooperative that owns property that
    the debtor or a dependent of the debtor uses as a residence,
    (iii) a burial plot, or (iv) real or personal property that the
    debtor or dependent of the debtor claims as a homestead. Where
    nonexempt property is converted to the above-specified exempt
    property within the ten-year period preceding the filing of the
    bankruptcy case, the exemption must be reduced to the extent
    such value was acquired with the intent to hinder, delay or
    defraud a creditor.

    Sec. 309. Protecting Secured Creditors in Chapter 13 Cases.
    Section 309(a) of the Act amends Bankruptcy Code section
    348(f)(1)(B) to provide that valuations of property and allowed
    secured claims in a chapter 13 case only apply if the case is
    subsequently converted to one under chapter 11 or 12. If the
    chapter 13 case is converted to one under chapter 7, then the
    creditor holding security as of the petition date shall
    continue to be secured unless its claim was paid in full as of
    the conversion date. In addition, unless a prebankruptcy
    default has been fully cured at the time of conversion, then
    the default in any bankruptcy proceeding shall have the effect
    given under applicable nonbankruptcy law.
        Section 309(b) amends section 365 of the Bankruptcy Code to
    provide that if a lease of personal property is rejected or not
    assumed by the trustee in a timely manner, such property is no
    longer property of the estate and the automatic stay under
    Bankruptcy Code section 362 with respect to such property is
    terminated. With regard to a chapter 7 case in which the debtor
    is an individual, the debtor may notify the creditor in writing
    of his or her desire to assume the lease. Upon being so
    notified, the creditor may, at its option, inform the debtor
    that it is willing to have the lease assumed and condition such
    assumption on cure of any outstanding default on terms set by
    the contract. If within 30 days after such notice the debtor
    gives written notice to the lessor that the lease is assumed,
    the debtor (not the bankruptcy estate) assumes the liability
    under the lease. Section 309(b) provides that the automatic
    stay of section 362 and the discharge injunction of section 524
    are not violated if the creditor notifies the debtor and
    negotiates a cure under section 365(p)(2) (as amended). In a
    chapter 11 or 13 case where the debtor is an individual lessee
    with respect to a personal property lease and the lease is not
    assumed in the confirmed plan, the lease is deemed rejected as
    of the conclusion of the confirmation hearing. If the lease is
    rejected, the automatic stay under section 362 as well as the
    chapter 13 codebtor stay under section 1301 are automatically
    terminated with respect to such property.
        Section 309(c)(1) amends Bankruptcy Code section
    1325(a)(5)(B) to require that periodic payments pursuant to a
    chapter 13 plan with respect to a secured claim be made in
    equal monthly installments. Where the claim is secured by
    personal property, the amount of such payments shall not be
    less than the amount sufficient to provide adequate protection
    to the holder of such claim. Section 309(c)(2) amends section
    1326(a) of the Bankruptcy Code to require a chapter 13 debtor
    to commence making payments within 30 days after the filing of
    the plan or the order for relief, whichever is earlier. The
    amount of such payment must be the amount proposed in the plan,
    scheduled in a personal property lease for that portion of the
    obligation that becomes due postpetition (which amount shall
    reduce the payment required to be made to such lessor pursuant
    to the plan), and provides adequate protection directly to a
    creditor holding an allowed claim secured by personal property
    to the extent the claim is attributable to the purchase of such
    property (which amount shall reduce the payment required to be
    made to such secured creditor pursuant to the plan). Payments
    made pursuant to a plan must be retained by the chapter 13
    trustee until confirmation or denial of confirmation. Section
    309(c)(2) provides that if the plan is confirmed, the trustee
    must distribute payments received from the debtor as soon as
    practicable in accordance with the plan. If the plan is not
    confirmed, the trustee must return to the debtor payments not
    yet due and owing to creditors. Pending confirmation and
    subject to section 363, the court, after notice and a hearing,
    may modify the payments required under this provision. Section
    309(c)(2) requires the debtor, within 60 days following the
    filing of the bankruptcy case, to provide reasonable evidence
    of any required insurance coverage with respect to the use or
    ownership of leased personal property or property securing, in
    whole or in part, a purchase money security interest.

    Sec. 310. Limitation on Luxury Goods. Section 310 amends
    section 523(a)(2)(C) of the Bankruptcy Code. Under current law,
    consumer debts owed to a single creditor that, in the
    aggregate, exceed $1,075 for luxury goods or services incurred
    within 60 days before the commencement of the case are presumed
    to be nondischargeable. As amended, the presumption applies if
    the aggregate amount of consumer debts for luxury goods or
    services is more than $500 for luxury goods or services
    incurred by an individual debtor within 90 days before the
    order for relief. With respect to cash advances, current law
    provides that cash advances aggregating more than $1,075 that
    are extensions of consumer credit under an open-end credit plan
    obtained by an individual debtor within 60 days before the case
    is filed are presumed to be nondischargeable. As amended,
    section 523(a)(2)(C) presumes that cash advances aggregating
    more than $750 and that are incurred within 70 days are
    nondischargeable. The term, ``luxury goods or services,'' does
    not include goods or services reasonably necessary for the
    support or maintenance of the debtor or a dependent of the
    debtor. In addition, ``an extension of consumer credit under an
    open-end credit plan'' has the same meaning as this term has
    under the Consumer Credit Protection Act.

    Sec. 311. Automatic Stay. Section 311 of the Act amends section
    362(b) of the Bankruptcy Code to except from the automatic stay
    a judgment of eviction with respect to a residential leasehold
    under certain circumstances. It is the intent of this provision
    to create an exception to the automatic stay of section
    362(a)(3) to permit the recovery of possession by rental
    housing providers of their property in certain circumstances
    where a judgment for possession has been obtained against a
    debtor/resident before the filing of the petition for
    bankruptcy. Section 311 is intended to apply to manufactured
    housing communities, where tenants own their own homes and pay
    monthly rent to community owners for the land upon which their
    home sits. Tenants who fail to pay rent for the land beneath
    their homes located in manufactured housing communities would
    no longer be able to avoid their rental obligations under the
    protection of the automatic stay. It is also the intent of this
    section to permit eviction actions based on illegal use of
    controlled substances or endangering property in certain
    circumstances.
        Section 311 gives tenants a reasonable amount of time after
    filing the petition to cure the default giving rise to the
    judgment for possession as long as there are circumstances in
    which applicable nonbankruptcy law allows a default to be cured
    after a judgment has been obtained. Where nonbankruptcy law
    applicable in the jurisdiction does not permit a tenant to cure
    a monetary default after the judgment for possession has been
    obtained, the automatic stay of section 362(a)(3) does not
    operate to limit action by a rental housing provider to proceed
    with, or a marshal, sheriff, or similar local officer to
    execute, the judgment for possession. Where the debtor claims
    that applicable law permits a tenant to cure after the judgment
    for possession has been obtained, the automatic stay operates
    only where the debtor files a certification with the bankruptcy
    petition asserting that applicable law permits such action and
    that the debtor or an adult dependent of the debtor has paid to
    the court all rent that will come due during the 30 days
    following the filing of the petition. If, within thirty days
    following the filing of the petition, the debtor or an adult
    dependent of the debtor certifies that the entire monetary
    default that gave rise to the judgment for possession has been
    cured, the automatic stay remains in effect. If a lessor has
    filed or wishes to file an eviction action based on the use of
    illegal controlled substances or property endangerment, the
    section allows the lessor in certain cases to file a
    certification of such circumstance with the court and obtain an
    exception to the stay.
        For both the judgment based on monetary default and the
    controlled substance or endangerment exceptions, the section
    provides an opportunity for challenge by either the lessor or
    the tenant to certifications filed by the other party and a
    timely hearing for the court to resolve any disputed facts and
    rule on the factual or legal sufficiency of the certifications.
    Where the court finds for the lessor, the clerk shall
    immediately serve upon the parties a copy of the court's order
    confirming that an exception to the automatic stay is
    applicable. Where the court finds for the tenant, the stay
    shall remain in effect. It is the intent of this section that
    the clerk's certified copy of the docket or order shall be
    sufficient evidence that the exception under paragraph 22 or
    paragraph 23 is applicable for a marshal, sheriff, or similar
    local officer to proceed immediately to execute the judgment
    for possession if applicable law otherwise permits such action,
    or for an eviction action for use of illegal controlled
    substances or property endangerment to proceed. This section
    does not provide any new right to either landlords or tenants
    relating to evictions or defenses to eviction under otherwise
    applicable law.
        Section 311 also excepts from the automatic stay a transfer
    that is not avoidable under Bankruptcy Code section 544 and
    that is not avoidable under Bankruptcy Code section 549. This
    amendment responds to a 1997 Ninth Circuit case in which two
    purchase money lenders (without knowledge that the debtor had
    recently filed an undisclosed chapter 11 case that was later
    converted to chapter 7), funded the debtor's acquisition of an
    apartment complex and recorded their purchase-money deed of
    trust immediately following recordation of the deed to the
    debtors.\86\
    ---------------------------------------------------------------------------
        \86\ Thompson v. Margen (In re McConville), 110 F.3d 47 (9th Cir.),
    cert. denied, 522 U.S. 966 (1997). The bankruptcy trustee sought to
    avoid the lien created by the lenders' deed of trust by asserting that
    the deed was an unauthorized, postpetition transfer under Bankruptcy
    Code section 549(a). The lenders claimed that the voluntary transfer to
    them was a transfer of real property to good faith purchasers for
    value, which thereby excepted it, under Bankruptcy Code section 549(c)
    from avoidance. The bankruptcy court held that the postpetition
    recordation of the lenders' deed of trust was without authorization
    under the Bankruptcy Code or by the court and was therefore avoidable
    under section 549(a) and that the lenders did not qualify under the
    section 549(c) exception as good faith purchasers of real property for
    value. The District Court subsequently affirmed the bankruptcy court's
    ruling granting the trustee the authority to avoid the lenders' lien.
    McConville v. David Margen and Lawton Associates (In re McConville),
    No. C 94-3308, 1994 U.S. Dist. LEXIS 18095 (N.D. Cal. Dec. 14, 1994).
    On appeal, the lower court's decision in McConville was initially
    affirmed. Thompson v. Margen (In re McConville), 84 F.3d 340 (9th Cir.
    1996). The Ninth Circuit, however, subsequently issued an amended
    opinion, also affirming the lower court, Thompson v. Margen (In re
    McConville), 97 F.3d 316 (9th Cir. 1996), and finally issued an opinion
    withdrawing its prior opinion and deciding the case on other grounds.
    It held that by obtaining secured credit from the lenders after filing
    but before the appointment of a trustee, the debtors violated their
    fiduciary responsibility to their creditors. Thompson v. Margen (In re
    McConville), 110 F.3d 47 (9th Cir. 1997).

    Sec. 312. Extension of Period Between Bankruptcy Discharges.
    Section 312 of the Act amends section 727(a)(8) of the
    Bankruptcy Code to extend the period before which a chapter 7
    debtor may receive a subsequent chapter 7 discharge from six to
    eight years. It also amends section 1328 to prohibit the
    issuance of a discharge in a subsequent chapter 13 case if the
    debtor received a discharge in a prior chapter 7, 11, or 12
    case within four years preceding the filing of the subsequent
    chapter 13 case. In addition, it prohibits the issuance of a
    discharge in a subsequent chapter 13 case if the debtor
    received a discharge in a chapter 13 case filed during the two-
    year period preceding the date of the filing of the subsequent
    ---------------------------------------------------------------------------
    chapter 13 case.

    Sec. 313. Definition of Household Goods and Antiques.
    Subsection (a) of section 313 of the Act amends section 522(f)
    of the Bankruptcy Code to codify a modified version of the
    Federal Trade Commission's definition of ``household goods''
    for purposes of the avoidance of a nonpossessory, nonpurchase
    money lien in such property. It also specifies various items
    that are expressly not household goods. Section 313 specifies a
    monetary threshold for the exclusions pertaining to electronic
    entertainment equipment, antiques, and jewelry. In addition, it
    provides that works of art are not household goods, unless by
    or of the debtor or by any relative of the debtor. Section
    313(b) requires the Director of the Executive Office for United
    States Trustees to prepare a report containing findings with
    respect to the use of this definition. The report may include
    recommendations for amendments to the definition of ``household
    goods'' as codified in section 522(f)(4).

    Sec. 314. Debt Incurred To Pay Nondischargeable Debts.
    Subsection (a) of section 314 of the Act amends section 523(a)
    of the Bankruptcy Code to make a debt incurred to pay a
    nondischargeable tax owed to a governmental unit (other than a
    tax owed to the United States) nondischargeable. Section 314(b)
    amends section 1328(a) of the Bankruptcy Code to make the
    following additional debts nondischargeable in a chapter 13
    case: (1) debts for money, property, services, or extensions of
    credit obtained through fraud or by a false statement in
    writing under section 523(a)(2)(A) and (B) of the Bankruptcy
    Code; (2) consumer debts owed to a single creditor that
    aggregate to more than $500 for luxury goods or services
    incurred by an individual debtor within 90 days before the
    filing of the bankruptcy case, and cash advances aggregating
    more than $750 that are extensions of consumer credit obtained
    by a debtor under an open-end credit plan within 70 days before
    the order for relief under section 523(a)(2)(C) (as amended);
    (3) pursuant to section 523(a)(3) of the Bankruptcy Code, debts
    that require a timely request for a dischargeability
    determination, if the creditor lacks notice or does not have
    actual knowledge of the case in time to make such request; (4)
    debts resulting from fraud or defalcation by the debtor acting
    as a fiduciary under section 523(a)(4) of the Bankruptcy Code;
    and (5) debts for restitution or damages, awarded in a civil
    action against the debtor as a result of willful or malicious
    conduct by the debtor that caused personal injury to an
    individual or the death of an individual.

    Sec. 315. Giving Creditors Fair Notice in Chapters 7 and 13
    Cases. Section 315 of the Act amends several provisions of the
    Bankruptcy Code. Subsection (a) amends Bankruptcy Code section
    342(c) to delete the provision specifying that the failure of a
    notice to include certain information required to be given by a
    debtor to a creditor does not invalidate the notice's legal
    effect. It adds a provision requiring a debtor to send any
    notice he or she must provide under the Bankruptcy Code to the
    address stated by the creditor and to include in such notice
    the current account number, if within 90 days prior to the date
    that the debtor filed for bankruptcy relief the creditor in at
    least two communications sent to the debtor set forth such
    address and account number. If the creditor would be in
    violation of applicable nonbankruptcy law by sending any such
    communication during this time period, then the debtor must
    send the notice to the address provided by the creditor stated
    in the last two communications containing the creditor's
    address and such notice shall include the current account
    number. Section 315(a) also permits a creditor in a chapter 7
    or 13 case (where the debtor is an individual) to file with the
    court and serve on the debtor the address to be used to notify
    such creditor in that case. Five days after receipt of such
    notice, the court and the debtor, respectively, must use the
    address so specified to provide notice to such creditor.
        In addition, section 315(a) specifies that an entity may
    file a notice with the court stating an address to be used
    generally by all bankruptcy courts for chapter 7 and 13 cases,
    or by particular bankruptcy courts, as specified by such
    entity. This address must be used by the court to supply notice
    in such cases within 30 days following the filing of such
    notice where the entity is a creditor. Notice given other than
    as provided in section 342 is not effective until it has been
    brought to the creditor's attention. If the creditor has
    designated a person or organizational subdivision to be
    responsible for receiving notices concerning bankruptcy cases
    and has established reasonable procedures so that these notices
    will be delivered to such person or subdivision, a notice will
    not be considered to have been brought to the attention of such
    creditor until it has been received by such person or
    subdivision. This provision also prohibits the imposition of
    any monetary penalty for violation of the automatic stay or for
    the failure to comply with the Bankruptcy Code sections 542 and
    543 unless the creditor has received effective notice under
    section 342.
        Section 315(b) amends section 521 to specify additional
    duties of a debtor. This provision requires the debtor to file
    a certificate executed by the debtor's attorney or bankruptcy
    petition preparer stating that the attorney or preparer
    supplied the debtor with the notice required under Bankruptcy
    Code section 342(b). If the debtor is not represented by
    counsel and did not use the services of a bankruptcy petition
    preparer, then the debtor must sign a certificate stating that
    he or she obtained and read such notice. In addition, the
    debtor must file: (1) copies of all payment advices or other
    evidence of payment, if any, from any employer within 60 days
    preceding the bankruptcy filing; (2) a statement of the amount
    of monthly net income, itemized to show how such amount is
    calculated; and (3) a statement disclosing any reasonably
    anticipated increase in income or expenditures in the 12-month
    period following the date of filing. Upon request of a
    creditor, section 315(b) of the Act requires the court to make
    the petition, schedules, and statement of financial affairs of
    an individual who is a chapter 7 or 13 debtor available to such
    creditor.
        In addition, section 315(b) requires such debtor to provide
    the trustee not later than seven days before the date first set
    for the meeting of creditors a copy of his or her Federal
    income tax return or transcript (at the election of the debtor)
    for the latest taxable period ending prior to the filing of the
    bankruptcy case for which a tax return was filed. Should the
    debtor fail to comply with this requirement, the case must be
    dismissed unless the debtor demonstrates that such failure was
    due to circumstances beyond the debtor's control. Upon request,
    the debtor must provide a copy of the tax return or transcript
    to the requesting creditor at the time the debtor supplies the
    return or transcript to the trustee. A creditor in a chapter 13
    case may, at any time, file a notice with the court requesting
    a copy of the plan. The court must supply a copy of the chapter
    13 plan at a reasonable cost not later than 5 days after such
    request. In addition, the Act clarifies that this provision
    applies to Federal income tax returns.
        During the pendency of a chapter 7, 11 or 13 case, the
    debtor must file with the court, at the request of the judge,
    United States trustee, or any party in interest, at the time
    filed with the taxing authority, copies of any Federal income
    tax returns (or transcripts thereof) that were not filed for
    the three-year period preceding the date on which the order for
    relief was entered. In addition, the debtor must file copies of
    any amendments to such tax returns.
        In a chapter 13 case, the debtor must file a statement,
    under penalty of perjury, of income and expenditures in the
    preceding tax year and monthly income showing how the amounts
    were calculated. The statement must be filed on the date that
    is the later of 90 days after the close of the debtor's tax
    year or one year after the order for relief, unless a plan has
    been confirmed. Thereafter, the statement must be filed on or
    before the date that is 45 days before the anniversary date of
    the plan's confirmation, until the case is closed. The
    statement must disclose the amount and sources of the debtor's
    income, the identity of any person responsible with the debtor
    for the support of the debtor's dependents, the identity of any
    person who contributed to the debtor's household expenses, and
    the amount of any such contributions.
        Section 315(b)(2) mandates that the tax returns, amendments
    thereto, and the statement of income and expenditures of an
    individual who is a chapter 7 or chapter 13 debtor be made
    available to the United States trustee or bankruptcy
    administrator, the trustee, and any party in interest for
    inspection and copying, subject to procedures established by
    the Director of the Administrative Office for United States
    Courts within 180 days from the date of enactment of this Act.
    The procedures must safeguard the confidentiality of any tax
    information required under this provision and include
    restrictions on creditor access to such information. In
    addition, the Director must, within 540 days from the Act's
    enactment date, prepare and submit to Congress a report that
    assesses the effectiveness of such procedures and, if
    appropriate, includes recommendations for legislation to
    further protect the confidentiality of such tax information and
    to impose penalties for its improper use. If requested by the
    United States trustee or trustee, the debtor must provide a
    document establishing the debtor's identity, which may include
    a driver's license, passport, or other document containing a
    photograph of the debtor, and such other personal identifying
    information relating to the debtor.

    Sec. 316. Dismissal for Failure To Timely File Schedules or
    Provide Required Information. Section 316 of the Act amends
    section 521 of the Bankruptcy Code to provide that if an
    individual debtor in a voluntary chapter 7 or chapter 13 case
    fails to file all of the information required under section
    521(a)(1) within 45 days of the date on which the case is
    filed, the case must be automatically dismissed, effective on
    the 46th day. The 45-day period may be extended for an
    additional 45-day period providing the debtor requests such
    extension prior to the expiration of the original 45-day period
    and the court finds justification for such extension. Upon
    request of a party in interest, the court must enter an order
    of dismissal within 5 days of such request. Section 316
    provides that a court may decline to dismiss the case if: (1)
    the trustee files a motion before the stated time periods; (2)
    the court finds, after notice and a hearing, that the debtor in
    good faith attempted to file all the information required under
    section 521(a)(1)(B)(iv); and (3) the court finds that the best
    interests of creditors would be served by continued
    administration of the case.

    Sec. 317. Adequate Time To Prepare for Hearing on Confirmation
    of the Plan. Section 317 of the Act amends section 1324 of the
    Bankruptcy Code to require the chapter 13 confirmation hearing
    to be held not earlier than 20 days following the first date
    set for the meeting of creditors and not later than 45 days
    from this date, unless the court determines that it would be in
    the best interests of creditors and the estate to hold such
    hearing at an earlier date and there is no objection to such
    earlier date.

    Sec. 318. Chapter 13 Plans To Have a 5-Year Duration in Certain
    Cases. Paragraph (1) of section 318 of the Act amends
    Bankruptcy Code sections 1322(d) and 1325(b) to specify that a
    chapter 13 plan may not provide for payments over a period that
    is not less than five years if the current monthly income of
    the debtor and the debtor's spouse combined exceeds certain
    monetary thresholds. If the current monthly income of the
    debtor and the debtor's spouse fall below these thresholds,
    then the duration of the plan may not be longer than three
    years, unless the court, for cause, approves a longer period up
    to five years. The applicable commitment period may be less if
    the plan provides for payment in full of all allowed unsecured
    claims over a shorter period. Section 318(2), (3), and (4) make
    conforming amendments to sections 1325(b) and 1329(c) of the
    Bankruptcy Code.

    Sec. 319. Sense of Congress Regarding Expansion of Rule 9011 of
    the Federal Rules of Bankruptcy Procedure. Section 319 of the
    Act expresses a sense of the Congress that Federal Rule of
    Bankruptcy Procedure 9011 be modified to require that all
    documents (including schedules), whether signed or unsigned,
    supplied to the court or the trustee by a debtor may be
    submitted only after the debtor or the debtor's attorney has
    made reasonable inquiry to verify that the information
    contained in such documents is well-grounded in fact and
    warranted by existing law or a good faith argument for the
    extension, modification, or reversal of existing law.

    Sec. 320. Prompt Relief from Stay in Individual Cases. Section
    320 of the Act amends section 362(e) of the Bankruptcy Code to
    terminate the automatic stay in a chapter 7, 11, or 13 case of
    an individual debtor within 60 days following a request for
    relief from the stay, unless the bankruptcy court renders a
    final decision prior to the expiration of the 60-day time
    period, such period is extended pursuant to agreement of all
    parties in interest, or a specific extension of time is
    required for good cause as described in findings made by the
    court.

    Sec. 321. Chapter 11 Cases Filed by Individuals. Section 321(a)
    of the Act creates a new provision under chapter 11 of the
    Bankruptcy Code specifying that property of the estate of an
    individual debtor includes, in addition to that identified in
    section 541 of the Bankruptcy Code, all property of the kind
    described in section 541 that the debtor acquires after
    commencement of the case, but before the case is closed,
    dismissed or converted to a case under chapter 7, 12, or 13
    (whichever occurs first). In addition, it includes earnings
    from services performed by the debtor after commencement of the
    case, but before the case is closed, dismissed or converted to
    a case under chapter 7, 12, or 13. Except as provided in
    section 1104 of the Bankruptcy Code or the order confirming a
    chapter 11 plan, section 321(a) provides that the debtor
    remains in possession of all property of the estate.
        Section 321(b) amends Bankruptcy Code section 1123 to
    require the chapter 11 plan of an individual debtor to provide
    for the payment to creditors of all or such portion of the
    debtor's earnings from personal services performed after
    commencement of the case or other future income that is
    necessary for the plan's execution.
        Section 321(c) amends Bankruptcy Code section 1129(a) to
    include an additional requirement for confirmation in a chapter
    11 case of an individual debtor upon objection to confirmation
    by a holder of an allowed unsecured claim. In such instance,
    the value of property to be distributed under the plan on
    account of such claim, as of the plan's effective date, must
    not be less than the amount of such claim; or be not less than
    the debtor's projected disposable income (as defined in section
    1325(b)(2)) to be received during the five-year period
    beginning on the date that the first payment is due under the
    plan or during the plan's term, whichever is longer. Section
    321(c) also amends section 1129(b)(2)(B)(ii) of the Bankruptcy
    Code to provide that an individual chapter 11 debtor may retain
    property included in the estate under section 1115 (as added by
    the Act), subject to section 1129(a)(14).
        Section 321(d)(1) amends Bankruptcy Code section 1141(d) to
    provide that a discharge under chapter 11 does not discharge a
    debtor who is an individual from any debt excepted from
    discharge under Bankruptcy Code section 523. Section 321(d)(2)
    of the Act provides that in a chapter 11 individual debtor is
    not discharged until all plan payments have been made. The
    court may grant a hardship discharge if the value of property
    actually distributed under the plan--as of the plan's effective
    date--is not less than the amount that would have been
    available for distribution if the case was liquidated under
    chapter 7 on such date, and modification of the plan is not
    practicable.
        Section 321(e) of the Act amends section 1127 to permit a
    plan in a chapter 11case of an individual debtor to be modified
    postconfirmation for the purpose of increasing or reducing the
    amount of payments, extending or reducing the time period for
    such payments, or altering the amount of distribution to a
    creditor whose claim is provided for by the plan. Such
    modification may be made at any time on request of the debtor,
    trustee, United States trustee, or holder of an allowed
    unsecured claim. The provision specifies that sections 1121
    through 1129 apply to such modification. In addition, it
    provides that the modified plan shall become the confirmed plan
    only if: (1) there has been disclosure pursuant to section 1125
    (as the court directs); (2) notice and a hearing; and (3) such
    modification is approved.

    Sec. 322. Limitations on Homestead Exemption. Section 322(a)
    amends section 522 of the Bankruptcy Code to impose an
    aggregate monetary limitation of $125,000, subject to
    Bankruptcy Code sections 544 and 548, on the value of property
    that the debtor may claim as exempt under State or local law
    pursuant to section 522(b)(3)(A) under certain circumstances.
    The monetary cap applies if the debtor acquired such property
    within the 1,215-day period preceding the filing of the
    petition and the property consists of any of the following: (1)
    real or personal property of the debtor or that a dependent of
    the debtor uses as a residence; (2) an interest in a
    cooperative that owns property, which the debtor or the
    debtor's dependent uses as a residence; (3) a burial plot for
    the debtor or the debtor's dependent; or (4) real or personal
    property that the debtor or dependent of the debtor claims as a
    homestead. This limitation does not apply to a principal
    residence claimed as exempt by a family farmer. In addition,
    the limitation does not apply to any interest transferred from
    a debtor's principal residence (which was acquired prior to the
    beginning of the specified time period) to the debtor's current
    principal residence, if both the previous and current
    residences are located in the same State.
        Section 322(a) further amends section 522 to add a
    provision that does not allow a debtor to exempt any amount of
    an interest in property described in the preceding paragraph in
    excess of $125,000 if any of the following applies:

            1. 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
            circumstance demonstrates that the filing of the case
            was an abuse of the provisions of the Bankruptcy Code;
            or

            2. debtor owes a debt arising from:

               a. any violation of the Federal securities laws
            defined in section 3(a)(47) of the Securities and
            Exchange Act of 1934, any state securities laws, or any
            regulation or order issued under Federal securities
            laws or state securities laws;

               b. 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;

               c. any civil remedy under section 1964 of title 18
            of the United States Code; or

               d. any criminal act, intentional tort, or willful
            or reckless misconduct that caused serious physical
            injury or death to another individual in the preceding
            five years.

        An exception to the monetary limit applies to the extent
    the value of the homestead property is reasonably necessary for
    the support of the debtor and any dependent of the debtor. The
    monetary limitation set forth in section 322(a) is subject to
    automatic adjustment pursuant to section 104 of the Bankruptcy
    Code.

    Sec. 323. Excluding Employee Benefit Plan Participant
    Contributions and Other Property from the Estate. Section 323
    of the Act amends section 541(b) of the Bankruptcy Code to
    exclude as property of the estate funds withheld or received by
    an employer from its employees' wages for payment as
    contributions to specified employee retirement plans, deferred
    compensation plans, and tax-deferred annuities. Such
    contributions do not constitute disposable income as defined in
    section 1325(b)(2) of the Bankruptcy Code. Section 323 also
    excludes as property of the estate funds withheld by an
    employer from the wages of its employees for payment as
    contributions to health insurance plans regulated by State law.

    Sec. 324. Exclusive Jurisdiction in Matters Involving
    Bankruptcy Professionals. Section 324 of the Act amends section
    1334 of title 28 of the United State Code to give a district
    court exclusive jurisdiction of all claims or causes of action
    involving the construction of section 327 of the Bankruptcy
    Code or rules relating to disclosure requirements under such
    provision.

    Sec. 325. United States Trustee Program Filing Fee Increase.
    Section 325(a) of the Act amends section 1930(a) of title 28 of
    the United States Code to increase the chapter 7 filing fee
    from $155 to $200 and decrease the chapter 13 filing fee from
    $155 to $150. It also increases the chapter 11 filing fee from
    $800 to $1,000. Subsection 325(b) amends section 589a of title
    28 of the United States Code to reallocate the percentage of
    certain filing fees collected for the United States Trustee
    Fund. Subsection 325(c) amends section 406(b) of the Judiciary
    Appropriations Act of 1990 to reallocate the percentage of
    certain filing fees collected under section 1930 of title 28 of
    the United States Code to fund the operation and maintenance of
    the Federal court system. Section 325(d) provides that the
    amendments made by subsections (b) and (c) are effective for
    the two-year period beginning on the Act's date of enactment.
    Section 325(e)(1) mandates that the amount of fees collected
    under 28 U.S.C. Sec. 1930(a)(1) (chapter 7 filing fees) and 28
    U.S.C. Sec. 1930(a)(3) (chapter 11 filing fees) that is greater
    than the amount that would have been collected if these
    provisions were not amended by section 325 be allocated to the
    extent necessary to pay for the salaries and benefits of judges
    appointed pursuant to section 1223 of this Act. Section
    325(e)(2) provides that any amount of fees in excess of that
    used to pay the salaries and benefits of judges appointed
    pursuant to section 1223 be deposited in the Treasury to the
    extent necessary to offset the decrease in governmental
    receipts resulting from the amendments made by section 325(b)
    (United States Trustee Fund) and section 325(c) (federal court
    system fund).

    Sec. 326. Sharing of Compensation. Section 326 amends
    Bankruptcy Code section 504 to create a limited exception to
    the prohibition against fee sharing. The provision allows the
    sharing of compensation with bona fide public service attorney
    referral programs that operate in accordance with non-federal
    law regulating attorney referral services and with rules of
    professional responsibility applicable to attorney acceptance
    of referrals.

    Sec. 327. Fair Valuation of Collateral. Section 327 of the Act
    amends section 506(a) of the Bankruptcy Code to provide that
    the value of an allowed claim secured by personal property that
    is an asset in an individual debtor's chapter 7 or 13 case is
    determined based on the replacement value of such property as
    of the filing date of the bankruptcy case without deduction for
    selling or marketing costs. With respect to property acquired
    for personal, family, or household purposes, replacement value
    is the price a retail merchant would charge for property of
    that kind considering the age and condition of the property at
    the time its value is determined.

    Sec. 328. Defaults Based on Nonmonetary Obligations. Subsection
    (a)(1) of section 328 of the Act amends section 365(b) to
    provide that a trustee does not have to cure a default that is
    a breach of a provision (other than a penalty rate or penalty
    provision) relating to a default arising from any failure to
    perform a nonmonetary obligation under an unexpired lease of
    real property, if it is impossible for the trustee to cure the
    default by performing such nonmonetary act at and after the
    time of assumption. If the default arises from a failure to
    operate in accordance with a nonresidential real property
    lease, the default must be cured by performance at and after
    the time of assumption in accordance with the lease. Pecuniary
    losses resulting from such default must be compensated pursuant
    to section 365(b)(1). In addition, section 328(a)(1) amends
    section 365(b)(2)(D) to clarify that it applies to penalty
    provisions. Section 328(a)(2) through (4) make technical
    revisions to section 365(c), (d) and (f) by deleting language
    that is no longer effective pursuant to the Rail Safety
    Enforcement and Review Act.\87\
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        \87\ Pub. L. No. 102-365, 106 Stat. 972 (1992).
    ---------------------------------------------------------------------------
        Section 328(b) amends section 1124(2)(A) of the Bankruptcy
    Code to clarify that a claim is not impaired if section
    365(b)(2) (as amended by this Act) expressly does not require a
    default with respect to such claim to be cured. In addition, it
    provides that any claim or interest that arises from the
    failure to perform a nonmonetary obligation (other than a
    default arising from the failure to operate a nonresidential
    real property lease subject to section 365(b)(1)(A)), is
    impaired unless the holder of such claim or interest (other
    than the debtor or an insider) is compensated for any actual
    pecuniary loss incurred by the holder as a result of such
    failure.

    Sec. 329. Clarification of Postpetition Wages and Benefits.
    Section 329 amends Bankruptcy Code section 503(b)(1)(A) to
    accord administrative expense status to certain back pay
    awards. This provision applies to a back pay award attributable
    to any period of time occurring postpetition as a result of a
    violation of Federal or state law by the debtor pursuant to an
    action brought in a court or before the National Labor
    Relations Board, providing the bankruptcy court determines that
    the award will not substantially increase the probability of
    layoff or termination of current employees or of nonpayment of
    domestic support obligations.

    Sec. 330. Delay of Discharge During Pendency of Certain
    Proceedings. Section 330(a) of the Act amends section 727(a) of
    the Bankruptcy Code to require the court to withhold the entry
    of a debtor's discharge order if the court, after notice and a
    hearing, finds that there is reasonable cause to believe that
    there is a pending proceeding in which the debtor may be found
    guilty of a felony of the kind described in Bankruptcy Code
    section 522(q)(1) or liable for a debt of the kind described in
    Bankruptcy Code section 522(q)(2). Subsections (b), (c), and
    (d) make comparable revisions to the discharge provisions under
    chapter 11, 12, and 13, respectively.

    Sec. 331. Limitation on Retention Bonuses, Severance Pay, and
    Certain Other Payments. Section 331 amends Bankruptcy Code
    section 503 to prohibit the allowance or payment of certain
    transfers or obligations, unless otherwise authorized by the
    court. It applies to transfers made to or obligations incurred
    for the benefit of an insider of the debtor for the purpose of
    inducing such person to remain with the debtor's business,
    unless the court makes certain specified findings. In addition,
    it prohibits a severance payment to an insider of a debtor,
    unless it satisfies certain criteria. Further, it prohibits the
    payment of other transfers or obligations that are outside the
    ordinary course of business and not justified by the facts and
    circumstances of the case, including transfers made to, or
    obligations incurred for the benefit of, officers, mangers, or
    consultants hired after the date of the filing of the petition.

    Sec. 332. Fraudulent Involuntary Bankruptcy. Bankruptcy Code
    section 303 permits a creditor to force an individual or
    business into bankruptcy by filing an involuntary bankruptcy
    petition against such entity. Before an order for relief is
    entered in the case, the court must make certain findings that
    support granting such relief (e.g., the debtor is generally not
    paying debts as they become due; or a custodian was appointed
    within the 120-day period preceding the filing of the
    petition). If such findings are not made, the court may dismiss
    the case. As with most documents filed in connection with a
    bankruptcy case, the filing of an involuntary bankruptcy
    petition is a matter of public record and is open for
    examination by any entity.\88\ In addition, the Fair Credit
    Reporting Act \89\ permits credit reporting agencies to note
    the involuntary bankruptcy filing on a person's credit report
    for up to ten years.\90\ Although the Fair Credit Reporting Act
    permits a consumer to have his or her credit report revised to
    reflect the fact, for instance, that the involuntary bankruptcy
    case was dismissed prior to the entry of an order for relief,
    the report may, nevertheless, still refer to the filing of the
    case.\91\
    ---------------------------------------------------------------------------
        \88\ 11 U.S.C. Sec. 107(a).
        \89\ 15 U.S.C. Sec. 1681.
        \90\ 15 U.S.C. Sec. 1681c(a)(1).
        \91\ See, e.g., 15 U.S.C. Sec. 1681i (2000); Letter from Ronald G.
    Isaac, Attorney, Federal Trade Commission--Division of Financial
    Practices/Bureau of Consumer Protection, to Anonymous (Nov. 5, 1999),
    available at http://www.ftc.gov/os/statutes/frca/anon.htm.
    ---------------------------------------------------------------------------
        Unfortunately, tax protesters and other extremists, in
    addition to other forms of obstreperous litigation (such as
    filing false liens), are now resorting to filing fraudulent
    involuntary bankruptcy petitions against public officials and
    other innocent parties. In 2002, for example, one tax protester
    filed fraudulent involuntary bankruptcy petitions against 36
    local public officials in Wisconsin,\92\ some of whom did not
    find out about the petitions until ``they attempted to use a
    credit card or execute some other financial transaction.'' \93\
    These fraudulent involuntary petition filings were subsequently
    dismissed by the bankruptcy court, which found that they were
    filed in bad faith without legal basis and were commenced ``for
    the sole purpose of harassment of the named public officials.''
    \94\ Nevertheless, ``[d]espite the fact that the [fraudulent
    involuntary bankruptcy] petitions are often dismissed,'' as one
    State assistant attorney general observed, ``the filings
    continue to cause financial problems for the victims.'' \95\
    The devastating effect of a fraudulent involuntary bankruptcy
    filing on an innocent person's credit rating is illustrated by
    what occurred in Wisconsin and its aftermath. Although the
    bankruptcy court in dismissing these cases also directed all
    credit reporting agencies to expunge any record of these
    filings from the officials' credit reports,\96\ the bankruptcy
    petition filings nevertheless ``caused some officials' credit
    cards to be canceled, almost caused the sale of one
    supervisor's house to be stopped, and caused continuing credit
    problems for other officials.'' \97\
    ---------------------------------------------------------------------------
        \92\ See In re Kenealy, No. 02-26100-MDM (Bankr. E.D. Wis. May 21,
    2002). Involuntary petitions ``were filed against all but one of the
    County Board supervisors,'' the county corporation counsel, county
    sheriff, clerk of courts, and county circuit judge. Jeff Cole,
    Paperwork Used for Revenge; Protester's Bogus Bankruptcy Petitions
    Temporarily Disrupt Officials' Credit, Milwaukee J. Sentinel, June 6,
    2002, at 1B. The protester also filed numerous liens in the amount of
    $15 million against these individuals as well. Jeff Cole, Man Charged
    with Filing False Documents; Town of Fredonia Protester's Case is 5th
    Brought by State, Milwaukee J. Sentinel, May 21, 2002, at 1B.
        \93\ Jeff Cole, Paperwork Used for Revenge; Protester's Bogus
    Bankruptcy Petitions Temporarily Disrupt Officials' Credit, Milwaukee
    J. Sentinel, June 6, 2002, at 1B.
        \94\ In re Kenealy, No. 02-26100-MDM (Bankr. E.D. Wis. May 21,
    2002).
        \95\ Roy Korte, Terrorism: A Law Enforcement Perspective, Anti-
    Defamation League (2002), available at http://www.adl.org/learn/
    columns/roy5%5korte.asp.
        \96\ In re Kenealy, No. 02-26100-MDM (Bankr. E.D. Wis. May 21,
    2002).
        \97\ Jeff Cole, ``Paper Terrorist'' Gets Five Years in Prison,
    Milwaukee J. Sentinel, Jan. 18, 2003, at 1B.
    ---------------------------------------------------------------------------
        Section 332 responds to these concerns by permitting the
    court to seal and subsequently expunge all records pertaining
    to a fraudulent involuntary petition. Section 332(a) sets forth
    the short title of the section as the ``Involuntary Bankruptcy
    Improvement Act of 2005.'' Section 332(b) amends Bankruptcy
    Code section 303 to permit the court, upon motion of the
    debtor, to seal all court records pertaining to an involuntary
    bankruptcy petition if: (1) the petition is false or contains
    any materially false, fictitious, or fraudulent statement; (2)
    the debtor is an individual; and (3) the court dismisses the
    petition. The provision further permits the court, if the
    debtor is an individual, to prohibit any consumer reporting
    agency from making any consumer report that contains any
    information relating to such petition or to the case commenced
    by the filing of such petition. It further provides that upon
    the expiration of the statute of limitations described in 18
    U.S.C. Sec. 3282 for a violation of 18 U.S.C. Sec. 152
    (concerning crimes for concealment of assets, false oaths and
    claims, and bribery) and 18 U.S.C. Sec. 157 (bankruptcy fraud),
    the court may, upon motion of the debtor and for good cause,
    expunge any records pertaining to such petition. Section 332(c)
    amends section 157 of title 18 to make it a criminal offense to
    file a fraudulent involuntary bankruptcy petition. Section 332
    is similar to legislation considered by the House in the 108th
    Congress.\98\
    ---------------------------------------------------------------------------
        \98\ H.R. 1529, 108th Cong. (2003). The bill was ordered favorably
    reported without amendment by the House Judiciary Committee, H.R. Rep.
    No. 108-110 (2003), and passed by voice vote by the House. 149 Cong.
    Rec. H5104 (daily ed. June 10, 2003). The principal difference between
    this legislation and section 332 of the Act is that the bill would have
    permitted the court to expunge the case upon dismissal of the
    fraudulent involuntary petition.
    ---------------------------------------------------------------------------

           TITLE IV. GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

    Subtitle A. General Business Bankruptcy Provisions
    Sec. 401. Adequate Protection for Investors. Subsection (a) of
    section 401 of the Act amends section 101 of the Bankruptcy
    Code to define ``securities self regulatory organization'' as a
    securities association or national securities exchange
    registered with the Securities and Exchange Commission. Section
    401(b) amends section 362 of the Bankruptcy Code to except from
    the automatic stay certain enforcement actions by a securities
    self regulatory organization.

    Sec. 402. Meetings of Creditors and Equity Security Holders.
    Section 402 amends section 341 of the Bankruptcy Code to permit
    a court, on request of a party in interest and after notice and
    a hearing, to order the United States trustee not to convene a
    meeting of creditors or equity security holders if a debtor has
    filed a plan for which the debtor solicited acceptances prior
    to the commencement of the case.

    Sec. 403. Protection of Refinance of Security Interest. Section
    403 amends section 547(e)(2) of the Bankruptcy Code to increase
    the perfection period from ten to 30 days for the purpose of
    determining whether a transfer is an avoidable preference.

    Sec. 404. Executory Contracts and Unexpired Leases. Subsection
    (a) of section 404 of the Act amends section 365(d)(4) of the
    Bankruptcy Code to establish a firm, bright line deadline by
    which an unexpired lease of nonresidential real property must
    be assumed or rejected. If such lease is not assumed or
    rejected by such deadline, then such lease shall be deemed
    rejected, and the trustee shall immediately surrender such
    property to the lessor. Section 404(a) permits a bankruptcy
    trustee to assume or reject a lease on a date which is the
    earlier of the date of confirmation of a plan or the date which
    is 120 days after the date of the order for relief. An
    extension of time may be granted, within the 120 day period,
    for an additional 90 days, for cause, upon motion of the
    trustee or lessor. Any subsequent extension can only be granted
    by the judge upon the prior written consent of the lessor
    either by the lessor's motion for an extension or on motion of
    the trustee, provided that the trustee has the prior written
    approval of the lessor. This provision is designed to remove
    the bankruptcy judge's discretion to grant extensions of the
    time for the retail debtor to decide whether to assume or
    reject a lease after a maximum possible period of 210 days from
    the time of entry of the order of relief. Beyond that maximum
    period, the judge has no authority to grant further time unless
    the lessor has agreed in writing to the extension.
        Section 404(b) amends section 365(f)(1) to assure that
    section 365(f) does not override any part of section 365(b).
    Thus, section 404(b) makes a trustee's authority to assign an
    executory contract or unexpired lease subject not only to
    section 365(c), but also to section 365(b), which is given full
    effect. Therefore, for example, assumption or assignment of a
    lease of real property in a shopping center must be subject to
    the provisions of the lease, such as use clauses.

    Sec. 405. Creditors and Equity Security Holders Committees.
    Subsection (a) of section 405 of the Act amends section
    1102(a)(2) of the Bankruptcy Code to permit, after notice and a
    hearing, a court, on request of a party in interest, to order a
    change in a committee's membership if necessary to ensure
    adequate representation of creditors or equity security holders
    in a chapter 11 case. It specifies that the court may direct
    the United States trustee to increase the membership of a
    committee for the purpose of including a small business concern
    if the court determines that such creditor's claim is of the
    kind represented by the committee and that, in the aggregate,
    is disproportionately large when compared to the creditor's
    annual gross revenue.
        Section 405(b) requires the committee to give creditors
    having claims of the kind represented by the committee access
    to information. In addition, the committee must solicit and
    receive comments from these creditors and, pursuant to court
    order, make additional reports or disclosures available to
    them.

    Sec. 406. Amendment to Section 546 of Title 11, United States
    Code. Section 406 of the Act corrects an erroneous subsection
    designation in section 546 of the Bankruptcy Code. It
    redesignates the second subsection (g) as subsection (i). In
    addition, section 406 amends section 546(i) (as redesignated)
    to subject that provision to the prior rights of security
    interest holders. Further, section 406 adds a new provision to
    section 546 that prohibits a trustee from avoiding a warehouse
    lien for storage, transportation, or other costs incidental to
    the storage and handling of goods. It specifies that this
    prohibition must be applied in a manner consistent with any
    applicable state statute that is similar to section 7-209 of
    the Uniform Commercial Code.

    Sec. 407. Amendments to Section 330(a) of Title 11, United
    States Code. Section 407 amends section 330(a)(3) of the
    Bankruptcy Code to clarify that this provision applies to
    examiners, chapter 11 trustees, and professional persons. This
    section also amends section 330(a) to add a provision that
    requires a court, in determining the amount of reasonable
    compensation to award to a trustee, to treat such compensation
    as a commission pursuant to section 326 of the Bankruptcy Code.

    Sec. 408. Postpetition Disclosure and Solicitation. Section 408
    amends section 1125 of the Bankruptcy Code to permit an
    acceptance or rejection of a chapter 11 plan to be solicited
    from the holder of a claim or interest if the holder was
    solicited before the commencement of the case in a manner that
    complied with applicable nonbankruptcy law.

    Sec. 409. Preferences. Section 409 amends section 547(c)(2) of
    the Bankruptcy Code to provide that a trustee may not avoid a
    transfer to the extent such transfer was in payment of a debt
    incurred by the debtor in the ordinary course of the business
    or financial affairs of the debtor and the transferee and such
    transfer was made either: (1) in the ordinary course of the
    debtor's and the transferee's business or financial affairs; or
    (2) in accordance with ordinary business terms. Present law
    requires the recipient of a preferential transfer to establish
    both of these grounds in order to sustain a defense to a
    preferential transfer proceeding. In a case in which the debts
    are not primarily consumer debts, section 409 provides that a
    transfer may not be avoided if the aggregate amount of all
    property constituting or affected by the transfer is less than
    $5,000.

    Sec. 410. Venue of Certain Proceedings. Section 1409(b) of
    title 28 of the United States Code provides that a proceeding
    to recover a money judgment of, or property worth less than,
    certain specified amounts must be commenced in the district
    where the defendant resides. Section 410 amends section 1409(b)
    to provide that a proceeding to recover a debt (excluding a
    consumer debt) against a noninsider of the debtor that is less
    than $10,000 must be commenced in the district where the
    defendant resides. In addition, section 410 increases the
    $5,000 threshold for a consumer debt \99\ to $15,000.
    ---------------------------------------------------------------------------
        \99\ A consumer debt is defined as a ``debt incurred by an
    individual primarily for a personal, family, or household purpose.'' 11
    U.S.C. Sec. 101(8).

    Sec. 411. Period for Filing Plan under Chapter 11. Section 411
    amends section 1121(d) of the Bankruptcy Code to mandate that a
    debtor's exclusive period for filing a plan may not be extended
    beyond a date that is 18 months after the order for relief in
    the chapter 11 case. In addition, it provides that the debtor's
    exclusive period for obtaining acceptances of the plan may not
    ---------------------------------------------------------------------------
    be extended beyond 20 months after the order for relief.

    Sec. 412. Fees Arising from Certain Ownership Interests.
    Section 412 amends section 523(a)(16) of the Bankruptcy Code to
    broaden the protections accorded to community associations with
    respect to fees or assessments arising from the debtor's
    interest in a condominium, cooperative, or homeowners'
    association. Irrespective of whether or not the debtor
    physically occupies such property, fees or assessments that
    accrue during the period the debtor or the trustee has a legal,
    equitable, or possessory ownership interest in such property
    are nondischargeable.

    Sec. 413. Creditor Representation at First Meeting of
    Creditors. Section 413 amends section 341(c) of the Bankruptcy
    Code to permit a creditor holding a consumer debt or any
    representative of such creditor, notwithstanding any local
    court rule, provision of a state constitution, or any otherwise
    applicable nonbankruptcy law, or any other requirement that
    such creditor must be represented by counsel, to appear at and
    participate in a section 341 meeting of creditors in chapter 7
    and chapter 13 cases either alone or in conjunction with an
    attorney. In addition, the provision clarifies that it cannot
    be construed to require a creditor to be represented by counsel
    at any meeting of creditors.

    Sec. 414. Definition of Disinterested Person. Section 414
    amends section 101(14) of the Bankruptcy Code to eliminate the
    requirement that an investment banker be a disinterested
    person.

    Sec. 415. Factors for Compensation of Professional Persons.
    Section 415 amends section 330(a)(3) of the Bankruptcy Code to
    permit the court to consider, in awarding compensation to a
    professional person, whether such person is board certified or
    otherwise has demonstrated skill and experience in the practice
    of bankruptcy law.

    Sec. 416. Appointment of Elected Trustee. Section 416 of the
    Act amends section 1104(b) of the Bankruptcy Code to clarify
    the procedure for the election of a trustee in a chapter 11
    case. Section 1104(b) permits creditors to elect an eligible,
    disinterested person to serve as the trustee in the case,
    provided certain conditions are met. Section 416 amends this
    provision to require the United States trustee to file a report
    certifying the election of a chapter 11 trustee. Upon the
    filing of the report, the elected trustee is deemed to be
    selected and appointed for purposes of section 1104 and the
    service of any prior trustee appointed in the case is
    terminated. Section 416 also clarifies that the court shall
    resolve any dispute arising out of a chapter 11 trustee
    election.

    Sec. 417. Utility Service. Section 417 amends section 366 of
    the Bankruptcy Code to provide that assurance of payment, for
    purposes of this provision, includes a cash deposit, letter of
    credit, certificate of deposit, surety bond, prepayment of
    utility consumption, or other form of security that is mutually
    agreed upon by the debtor or trustee and the utility. It also
    specifies that an administrative expense priority does not
    constitute an assurance of payment. With respect to chapter 11
    cases, section 417 permits a utility to alter, refuse or
    discontinue service if it does not receive adequate assurance
    of payment that is satisfactory to the utility within 30 days
    of the filing of the petition. The court, upon request of a
    party in interest, may modify the amount of this payment after
    notice and a hearing. In determining the adequacy of such
    payment, a court may not consider: (1) the absence of security
    before the case was filed; (2) the debtor's timely payment of
    utility service charges before the case was filed; or (3) the
    availability of an administrative expense priority.
    Notwithstanding any other provision of law, section 417 permits
    a utility to recover or set off against a security deposit
    provided prepetition by the debtor to the utility without
    notice or court order.

    Sec. 418. Bankruptcy Fees. Section 418 of the Act amends
    section 1930 of title 28 of the United States Code to permit a
    district court or a bankruptcy court, pursuant to procedures
    prescribed by the Judicial Conference of the United States, to
    waive the chapter 7 filing fee for an individual and certain
    other fees under subsections (b) and (c) of section 1930 if
    such individual's income is less than 150 percent of the
    official poverty level (as defined by the Office of Management
    and Budget) and the individual is unable to pay such fee in
    installments. Section 418 also clarifies that section 1930, as
    amended, does not prevent a district or bankruptcy court from
    waiving other fees for creditors and debtors, if in accordance
    with Judicial Conference policy.

    Sec. 419. More Complete Information Regarding Assets of the
    Estate. Section 419 of the Act directs the Judicial Conference
    of the United States, after consideration of the views of the
    Director of the Executive Office for United States Trustees, to
    propose official rules and forms directing chapter 11 debtors
    to disclose information concerning the value, operations, and
    profitability of any closely held corporation, partnership, or
    other entity in which the debtor holds a substantial or
    controlling interest. Section 419 is intended to ensure that
    the debtor's interest in any of these entities is used for the
    payment of allowed claims against debtor.
    Subtitle B. Small Business Bankruptcy Provisions
    Sec. 431. Flexible Rules for Disclosure Statement and Plan.
    Section 431 of the Act amends section 1125 of the Bankruptcy
    Code to streamline the disclosure statement process and to
    provide for more flexibility. Section 431(1) amends section
    1125(a)(1) of the Bankruptcy Code to require a bankruptcy
    court, in determining whether a disclosure statement supplies
    adequate information, to consider the complexity of the case,
    the benefit of additional information to creditors and other
    parties in interest, and the cost of providing such additional
    information. With regard to a small business case, section
    431(2) amends section 1125(f) to permit the court to dispense
    with a disclosure statement if the plan itself supplies
    adequate information. In addition, it provides that the court
    may approve a disclosure statement submitted on standard forms
    approved by the court or adopted under section 2075 of title 28
    of the United States Code. Further, section 431(2) provides
    that the court may conditionally approve a disclosure
    statement, subject to final approval after notice and a
    hearing, and allow the debtor to solicit acceptances of the
    plan based on such disclosure statement. The hearing on the
    disclosure statement may be combined with the confirmation
    hearing.

    Sec. 432. Definitions. Section 432 of the Act amends section
    101 of the Bankruptcy Code to define a ``small business case''
    as a chapter 11 case in which the debtor is a small business
    debtor. Section 432, in turn, defines a ``small business
    debtor'' as a person engaged in commercial or business
    activities (including an affiliate of such person that is also
    a debtor, but excluding a person whose primary activity is the
    business of owning or operating real property or activities
    incidental thereto) having aggregate noncontingent, liquidated
    secured and unsecured debts of not more than $2 million
    (excluding debts owed to affiliates or insiders of the debtor)
    as of the date of the petition or the order for relief. This
    monetary definition applies only in a case where the United
    States trustee has not appointed a creditors' committee or
    where the court has determined that the creditors' committee is
    not sufficiently active and representative to provide effective
    oversight of the debtor. It does not apply to any member of a
    group of affiliated debtors that has aggregate noncontingent,
    liquidated secured and unsecured debts in excess of $2 million
    (excluding debts owed to one or more affiliates or insiders).
    This provision also requires this monetary figure to be
    periodically adjusted for inflation pursuant to section 104 of
    the Bankruptcy Code.

    Sec. 433. Standard Form Disclosure Statement and Plan. Section
    433 of the Act directs the Judicial Conference of the United
    States to propose for adoption standard form disclosure
    statements and reorganization plans for small business debtors.
    The provision requires the forms to achieve a practical balance
    between the needs of the court, case administrators, and other
    parties in interest to have reasonably complete information as
    well as the debtor's need for economy and simplicity.

    Sec. 434. Uniform National Reporting Requirements. Subsection
    (a) of section 434 of the Act adds a provision to the
    Bankruptcy Code mandating additional reporting requirements for
    small business debtors. It requires a small business debtor to
    file periodic financial reports and other documents containing
    the following information with respect to the debtor's business
    operations: (1) profitability; (2) reasonable approximations of
    projected cash receipts and disbursements; (3) comparisons of
    actual cash receipts and disbursements with projections in
    prior reports; (4) whether the debtor is complying with
    postpetition requirements pursuant to the Bankruptcy Code and
    Federal Rules of Bankruptcy Procedure; (5) whether the debtor
    is timely filing tax returns and other government filings; and
    (6) whether the debtor is paying taxes and other administrative
    expenses when due. In addition, the debtor must report on such
    other matters that are in the best interests of the debtor and
    the creditors and in the public interest. If the debtor is not
    in compliance with any postpetition requirements pursuant to
    the Bankruptcy Code and Federal Rules of Bankruptcy Procedure,
    or is not filing tax returns or other required governmental
    filings, paying taxes and other administrative expenses when
    due, the debtor must report: (1) what the failures are, (2) how
    they will be cured; (3) the cost of their cure; and (4) when
    they will be cured. Section 434(b) specifies that the effective
    date of this provision is 60 days after the date on which the
    rules required under this provision are promulgated.

    Sec. 435. Uniform Reporting Rules and Forms for Small Business
    Cases. Subsection (a) of section 435 of the Act directs the
    Judicial Conference of the United States to propose official
    rules and forms with respect to the periodic financial reports
    and other information that a small business debtor must file
    concerning its profitability, cash receipts and disbursements,
    filing of its tax returns, and payment of its taxes and other
    administrative expenses.
        Section 435(b) requires the rules and forms to achieve a
    practical balance between the need for reasonably complete
    information by the bankruptcy court, United States trustee,
    creditors and other parties in interest, and the small business
    debtor's interest in having such forms be easy and inexpensive
    to complete. The forms should also be designed to help the
    small business debtor better understand its financial condition
    and plan its future.

    Sec. 436. Duties in Small Business Cases. Section 436 of the
    Act is intended to implement greater administrative oversight
    and controls over small business chapter 11. The provision
    requires a chapter 11 trustee or debtor to:

            1. file with a voluntary petition (or in an
            involuntary case, within seven days from the date of
            the order for relief) the debtor's most recent
            financial statements (including a balance sheet,
            statement of operations, cash flow statement, and
            Federal income tax return) or a statement explaining
            why such information is not available;

            2. attend, through its senior management personnel and
            counsel, meetings scheduled by the bankruptcy court or
            the United States trustee (including the initial debtor
            interview and meeting of creditors pursuant to section
            341 of the Bankruptcy Code), unless the court waives
            this requirement after notice and a hearing upon a
            finding of extraordinary and compelling circumstances;

            3.  timely file all requisite schedules and the
            statement of financial affairs, unless the court, after
            notice and a hearing, grants an extension of up to 30
            days from the order of 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. maintain insurance that is customary and
            appropriate for the industry, subject to section
            363(c)(2);

            6. timely file tax returns and other required
            government filings;

            7. timely pay all administrative expense taxes (except
            for certain contested claims), subject to section
            363(c)(2); and

            8. permit the United States trustee to inspect the
            debtor's business premises, books, and records at
            reasonable hours after appropriate prior written
            notice, unless notice is waived by the debtor.

    Sec. 437. Plan Filing and Confirmation Deadlines. Section 437
    of the Act amends section 1121(e) of the Bankruptcy Code with
    respect to the period of time within which a small business
    debtor must file and confirm a plan of reorganization. This
    provision provides that a small business debtor's exclusive
    period to file a plan is 180 days from the date of the order
    for relief, unless the period is extended after notice and a
    hearing, or the court, for cause, orders otherwise. It further
    provides that a small business debtor must file a plan and any
    disclosure statement not later than 300 days after the order
    for relief. These time periods and the time fixed in section
    1129(e) may be extended only if: (1) the debtor, after
    providing notice to parties in interest, 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; (2) a new deadline is imposed at the time the
    extension is granted; and (3) the order granting such extension
    is signed before the expiration of the existing deadline.

    Sec. 438. Plan Confirmation Deadline. Section 438 of the Act
    amends Bankruptcy Code section 1129 to require the court to
    confirm a plan not later than 45 days after it is filed if the
    plan complies with the applicable provisions of the Bankruptcy
    Code, unless this period is extended pursuant to section
    1121(e)(3).
        Sec. 439. Duties of the United States Trustee. Section 439
    of the Act amends section 586(a) of title 28 of the United
    States Code to require the United States trustee to perform the
    following additional duties with respect to small business
    debtors:

            1. conduct an initial debtor interview before the
            meeting of creditors for the purpose of (a)
            investigating the debtor's viability, (b) inquiring
            about the debtor's business plan, (c) explaining the
            debtor's obligation to file monthly operating reports,
            (d) attempting to obtain an agreed scheduling order
            setting various time frames (such as the date for
            filing a plan and effecting confirmation), and (e)
            informing the debtor of other obligations;

            2. if determined to be appropriate and advisable,
            inspect the debtor's business premises for the purpose
            of reviewing the debtor's books and records and
            verifying that the debtor has filed its tax returns;

            3. review and monitor diligently the debtor's
            activities to determine as promptly as possible whether
            the debtor will be unable to confirm a plan; and

            4. promptly apply to the court for relief in any case
            in which the United States trustee finds material
            grounds for dismissal or conversion of the case.

    Sec. 440. Scheduling Conferences. Section 440 amends section
    105(d) of the Bankruptcy Code to mandate that a bankruptcy
    court hold status conferences as are necessary to further the
    expeditious and economical resolution of a bankruptcy case.

    Sec. 441. Serial Filer Provisions. Paragraph (1) of section 441
    of the Act amends section 362 of the Bankruptcy Code to provide
    that a court may award only actual damages for a violation of
    the automatic stay committed by an entity in the good faith
    belief that subsection (h) of section 362 (as amended) applies
    to the debtor. Section 441(2) adds a new subsection to section
    362 of the Bankruptcy Code specifying that the automatic stay
    does not apply where the chapter 11 debtor: (1) is a debtor in
    a small business case pending at the time the subsequent case
    is filed; (2) was a debtor in a small business case dismissed
    for any reason pursuant to an order that became final in the
    two-year period ending on the date of the order for relief
    entered in the pending case; (3) was a debtor in small business
    case in which a plan was confirmed in the two-year period
    ending on the date of the order for relief entered in the
    pending case; or (4) is an entity that has acquired
    substantially all of the assets or business of a small business
    debtor described in the preceding paragraphs, unless such
    entity establishes by a preponderance of the evidence that it
    acquired the assets or business in good faith and not for the
    purpose of evading this provision.
        An exception to this provision applies to a chapter 11 case
    that is commenced involuntarily and involves no collusion
    between the debtor and the petitioning creditors. Also, it does
    not apply if the debtor proves by a preponderance of the
    evidence that: (1) the filing of the subsequent case resulted
    from circumstances beyond the debtor's control and which were
    not foreseeable at the time the prior case was filed; and (2)
    it is more likely than not that the court will confirm a
    feasible plan of reorganization (but not a liquidating plan)
    within a reasonable time.

    Sec. 442. Expanded Grounds for Dismissal or Conversion and
    Appointment of Trustee. Subsection (a) of section 442 of the
    Act amends section 1112(b) of the Bankruptcy Code to mandate
    that the court convert or dismiss a chapter 11 case, whichever
    is in the best interests of creditors and the estate, if the
    movant establishes cause, absent unusual circumstances. In this
    regard, the court must specify the circumstances that support
    the court's finding that conversion or dismissal is not in the
    best interests of creditors and the estate.
        In addition, the provision specifies an exception to the
    provision's mandatory requirement applies if: (1) the debtor or
    a party in interest objects and establishes that there is a
    reasonable likelihood that a plan will be confirmed within the
    time periods set forth in sections 1121(e) and 1129(e), or if
    these provisions are inapplicable, within a reasonable period
    of time; (2) the grounds for granting such relief include an
    act or omission of the debtor for which there exists a
    reasonable justification for such act or omission; and (3) such
    act or omission will be cured within a reasonable period of
    time.
        The court must commence the hearing on a section 1112(b)
    motion within 30 days of its filing and decide the motion not
    later than 15 days after commencement of the hearing unless the
    movant expressly consents to a continuance for a specified
    period of time or compelling circumstances prevent the court
    from meeting these time limits. Section 442 provides that the
    term ``cause'' under section 1112(b), as amended by this
    provision, includes the following:

             1. substantial or continuing loss to or diminution of
            the estate and the absence of a reasonable likelihood
            of rehabilitation;

             2. gross mismanagement of the estate;

             3. failure to maintain appropriate insurance that
            poses a material risk to the estate or the public;

             4. unauthorized use of cash collateral that is
            harmful to one or more creditors;

             5. failure to comply with a court order;

             6. unexcused failure to timely satisfy any filing or
            reporting requirement under the Bankruptcy Code or
            applicable rule;

             7. failure to attend the section 341 meeting of
            creditors or an examination pursuant to rule 2004 of
            the Federal Rules of Bankruptcy Procedure, without good
            cause shown by the debtor;

             8. failure to timely provide information or to attend
            meetings reasonably requested by the United States
            trustee or bankruptcy administrator;

             9. failure to timely pay taxes owed after the order
            for relief or to file tax returns due postpetition;

            10. failure to file a disclosure statement or to
            confirm a plan within the time fixed by the Bankruptcy
            Code or pursuant to court order;

            11. failure to pay any requisite fees or charges under
            chapter 123 of title 28 of the United States Code;

            12. revocation of a confirmation order;

            13. inability to effectuate substantial consummation
            of a confirmed plan;

            14. material default by the debtor with respect to a
            confirmed plan;

            15. termination of a plan by reason of the occurrence
            of a condition specified in the plan; and

            16. the debtor's failure to pay any domestic support
            obligation that first becomes payable postpetition

        Section 442(b) creates an additional ground for the
    appointment of a chapter 11 trustee or examiner under section
    1104(a). It provides that should the bankruptcy court determine
    cause exists to convert or dismiss a chapter 11 case, it may
    appoint a trustee or examiner if it is in the best interests of
    creditors and the bankruptcy estate.
        Section 442(b) is designed to benefit creditors when a
    chapter 11 case would otherwise be dismissed or converted to a
    chapter 7 case pursuant to section 1112 of the Bankruptcy Code.
    Section 442(b) allows the court to appoint a chapter 11 trustee
    or examiner, as an alternative to dismissing or converting the
    case to chapter 7, if in the best interest of creditors and the
    bankruptcy estate. Section 442(b) is not intended to ease the
    standards for appointing chapter 11 trustees. Practice under
    Chapter X of the Bankruptcy Act of 1898 demonstrated that
    routine appointment of trustees deters the use of
    reorganization statutes and increases the likelihood that by
    the time a company resorts to bankruptcy relief, it must
    liquidate. It is therefore important for section 442(b) to be
    used only for cases that would otherwise be dismissed or
    converted to chapter 7, and not as an alternative method for
    attaining the appointment of a chapter 11 trustee.

    Sec. 443. Study of Operation of Title 11, United States Code,
    with Respect to Small Businesses. Section 443 of the Act
    directs 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, to
    conduct a study to determine: (1) the internal and external
    factors that cause small businesses (particularly sole
    proprietorships) to seek bankruptcy relief and the factors that
    cause small businesses to successfully complete their chapter
    11 cases; and (2) how the bankruptcy laws may be made more
    effective and efficient in assisting small business to remain
    viable.

    Sec. 444. Payment of Interest. Paragraph (1) of section 444 of
    the Act amends section 362(d)(3) of the Bankruptcy Code to
    require a court to grant relief from the automatic stay within
    30 days after it determines that a single asset real estate
    debtor is subject to this provision. Section 444(2) amends
    section 362(d)(3)(B) to specify that relief from the automatic
    stay shall be granted unless the single asset real estate
    debtor has commenced making monthly payments to each creditor
    secured by the debtor's real property (other than a claim
    secured by a judgment lien or unmatured statutory lien) in an
    amount equal to the interest at the then applicable nondefault
    contract rate of interest on the value of the creditor's
    interest in the real estate. It allows a debtor in its sole
    discretion to make the requisite interest payments out of rents
    or other proceeds generated by the real property,
    notwithstanding section 363(c)(2).

    Sec. 445. Priority for Administrative Expenses. Section 445 of
    the Act amends section 503(b) of the Bankruptcy Code to add a
    new administrative expense priority for a nonresidential real
    property lease that is assumed under section 365 and then
    subsequently rejected. The amount of the priority is the sum of
    all monetary obligations due under the lease (excluding
    penalties and obligations arising from or relating to a failure
    to operate) for the two-year period following the rejection
    date or actual turnover of the premises (whichever is later),
    without reduction or setoff for any reason, except for sums
    actually received or to be received from a nondebtor. Any
    remaining sums due for the balance of the term of the lease are
    treated as a claim under section 502(b)(6) of the Bankruptcy
    Code.

    Sec. 446. Duties with Respect to a Debtor Who Is a Plan
    Administrator of an Employee Benefit Plan. Subsection (a) of
    section 446 of the Act amends Bankruptcy Code section 521(a) to
    require a debtor, unless a trustee is serving in the case, to
    serve as the administrator (as defined in the Employee
    Retirement Income Security Act of 1974) of an employee benefit
    plan if the debtor served in such capacity at the time the case
    was filed. Section 446(b) amends Bankruptcy Code section 704 to
    require the chapter 7 trustee to perform the obligations of
    such administrator in a case where the debtor or an entity
    designated by the debtor was required to perform such
    obligations. Section 446(c) amends Bankruptcy Code section
    1106(a) to require a chapter 11 trustee to perform these
    obligations.

    Sec. 447. Appointment of Committee of Retired Employees. This
    provision amends section 1114(d) of the Bankruptcy Code to
    clarify that it is the responsibility of the United States
    trustee to appoint members to a committee of retired employees.

                    TITLE V. MUNICIPAL BANKRUPTCY PROVISIONS

    Sec. 501. Petition and Proceedings Related to Petition. Section
    501 amends sections 921(d) and 301 of the Bankruptcy Code to
    clarify that the court must enter the order for relief in a
    chapter 9 case.

    Sec. 502. Applicability of Other Sections to Chapter 9. Section
    502 of the of the Act amends section 901 of the Bankruptcy Code
    to make the following sections applicable to chapter 9 cases:

            1. section 555 (contractual right to liquidate,
            terminate or accelerate a securities contract);

            2. section 556 (contractual right to liquidate,
            terminate or accelerate a commodities or forward
            contract);

            3. section 559 (contractual right to liquidate,
            terminate or accelerate a repurchase agreement);

            4. section 560 (contractual right to liquidate,
            terminate or accelerate a swap agreement);

            5. section 561 (contractual right to liquidate,
            terminate, accelerate, or offset under a master netting
            agreement and across contracts); and

            6. section 562 (damage measure in connection with swap
            agreements, securities contracts, forward contracts,
            commodity contracts, repurchase agreements, or master
            netting agreement).

                           TITLE VI. BANKRUPTCY DATA

    Sec. 601. Improved Bankruptcy Statistics. This provision amends
    chapter 6 of title 28 of the United States Code to require the
    clerk for each district (or the bankruptcy court clerk if one
    has been certified pursuant to section 156(b) of title 28 of
    the United States Code) to collect certain statistics for
    chapter 7, 11, and 13 cases in a standardized format prescribed
    by the Director of the Administrative Office of the United
    States Courts and to make this information available to the
    public. Not later than July 1, 2008, the Director must submit a
    report to Congress concerning the statistical information
    collected and then must report annually thereafter. The
    statistics must be itemized by chapter of the Bankruptcy Code
    and be presented in the aggregate for each district. The
    specific categories of information that must be gathered
    include the following:

            1. scheduled total assets and liabilities of debtors
            who are individuals with primarily consumer debts under
            chapters 7, 11 and 13 by category;

            2. such debtors' current monthly income, average
            income, and average expenses;

            3. the aggregate amount of debts discharged during the
            reporting period based on the difference between the
            total amount of scheduled debts and by categories that
            are predominantly nondischargeable;

            4. the average time between the filing of the
            bankruptcy case and the closing of the case;

            5. the number of cases in which reaffirmation
            agreements were filed, the total number of
            reaffirmation agreements filed, the number of cases in
            which the debtor was pro se and a reaffirmation
            agreement was filed, and the number of cases in which
            the reaffirmation agreement was approved by the court;

            6. for chapter 13 cases, information on the number of:
            (a) final orders determining the value of secured
            property in an amount less than the amount of the
            secured claim, (b) final orders that determined the
            value of property securing a claim, (c) cases
            dismissed, (d) cases dismissed for failure to make
            payments under the plan, (e) cases refiled after
            dismissal, (f) cases in which the plan was completed
            (separately itemized with respect to the number of
            modifications made before completion of the plan, and
            (g) cases in which the debtor had previously sought
            bankruptcy relief within the six years preceding the
            filing of the present case;

            7. the number of cases in which creditors were fined
            for misconduct and the amount of any punitive damages
            awarded for creditor misconduct; and

            8. the number of cases in which sanctions under rule
            9011 of the Federal Rules of Bankruptcy Procedure were
            imposed against a debtor's counsel and the damages
            awarded under this rule.

        Section 601 provides that the amendments in this provision
    take effect 18 months after the date of enactment of this Act.

    Sec. 602. Uniform Rules for the Collection of Bankruptcy Data.
    Section 602 of the Act amends chapter 39 of title 28 of the
    United States Code to require the Attorney General to
    promulgate rules mandating the establishment of uniform forms
    for final reports in chapter 7, 12 and 13 cases and periodic
    reports in chapter 11 cases. This provision also specifies that
    these reports be designed to facilitate compilation of data and
    to provide maximum public access by physical inspection at one
    or more central filing locations and by electronic access
    through the Internet or other appropriate media. The
    information should enable an evaluation of the efficiency and
    practicality of the bankruptcy system. In issuing rules, the
    Attorney General must consider: (1) the reasonable needs of the
    public for information about the Federal bankruptcy system; (2)
    the economy, simplicity, and lack of undue burden on persons
    obligated to file the reports; and (3) appropriate privacy
    concerns and safeguards.
        Section 602 provides that final reports by trustees in
    chapter 7, 12, and 13 cases include the following information:
    (1) the length of time the case was pending; (2) assets
    abandoned; (3) assets exempted; (4) receipts and disbursements
    of the estate; (5) administrative expenses, including those
    associated with section 707(b) of the Bankruptcy Code, and the
    actual costs of administering chapter 13 cases; (6) claims
    asserted; (7) claims allowed; and (8) distributions to
    claimants and claims discharged without payment. With regard to
    chapter 11 cases, section 602 provides that periodic reports
    include the following information regarding:

            1. the industry classification for businesses
            conducted by the debtor, as published by the Department
            of Commerce;

            2. the length of time that the case was pending;

            3. the number of full-time employees as of the date of
            the order for relief and at the end of each reporting
            period;

            4. cash receipts, cash disbursements, and
            profitability of the debtor for the most recent period
            and cumulatively from the date of the order for relief;

            5. the debtor's compliance with the Bankruptcy Code,
            including whether tax returns have been filed and taxes
            have been paid;

            6. professional fees approved by the court for the
            most recent period and cumulatively from the date of
            the order for relief; and

            7. plans filed and confirmed, including the aggregate
            recoveries of holders by class and as a percentage of
            total claims of an allowed class.

    Sec. 603. Audit Procedures. Subsection (a)(1) of section 603 of
    the Act requires the Attorney General (for judicial districts
    served by United States trustees) and the Judicial Conference
    of the United States (for judicial districts served by
    bankruptcy administrators) to establish procedures to determine
    the accuracy, veracity, and completeness of petitions,
    schedules and other information filed by debtors pursuant to
    sections 111, 521 and 1322 of the Bankruptcy Code. Section
    603(a)(1) requires the audits to be conducted in accordance
    with generally accepted auditing standards and performed by
    independent certified public accountants or independent
    licensed public accountants. It permits the Attorney General
    and the Judicial Conference to develop alternative auditing
    standards not later than two years after the date of enactment
    of this Act. Section 603(a)(2) requires these procedures to:
    (1) establish a method of selecting appropriate qualified
    contractors to perform these audits; (2) establish a method of
    randomly selecting cases for audit, and that a minimum of at
    least one case out of every 250 cases be selected for audit;
    (3) require audits in cases where the schedules of income and
    expenses reflect greater than average variances from the
    statistical norm for the district if they occur by reason of
    higher income or higher expenses than the statistical norm in
    which the schedules were filed; and (4) require the aggregate
    results of such audits, including the percentage of cases by
    district in which a material misstatement of income or
    expenditures is reported, to be made available to the public on
    an annual basis.
        Section 603(b) amends section 586 of title 28 of the United
    States Code to require the United States trustee to submit
    reports as directed by the Attorney General, including the
    results of audits performed under section 603(a). In addition,
    it authorizes the United States trustee to contract with
    auditors to perform the audits specified in this provision.
    Further, it requires the report of each audit to be filed with
    the court and transmitted to the United States trustee. The
    report must specify material misstatements of income,
    expenditures or assets. In a case where a material misstatement
    has been reported, the clerk must provide notice of such
    misstatement to creditors and the United States trustee must
    report it to the United States Attorney, if appropriate, for
    possible criminal prosecution. If advisable, the United States
    trustee must also take appropriate action, such as revoking the
    debtor's discharge.
        Section 603(c) amends section 521 of the Bankruptcy Code to
    make it a duty of the debtor to cooperate with an auditor.
    Section 603(d) amends section 727 of the Bankruptcy Code to
    add, as a ground for revocation of a chapter 7 discharge the
    debtor's failure to: (a) satisfactorily explain a material
    misstatement discovered as the result of an audit pursuant to
    this provision; or (b) make available for inspection all
    necessary documents or property belonging to the debtor that
    are requested in connection with such audit. Section 603(e)
    provides that the amendments made by this provision take effect
    18 months after the Act's date of enactment.
        Sec. 604. Sense of Congress Regarding Availability of
    Bankruptcy Data. Section 604 expresses a sense of the Congress
    that it is a national policy of the United States that all data
    collected by bankruptcy clerks in electronic form (to the
    extent such data relates to public records pursuant to section
    107 of the Bankruptcy Code) should be made available to the
    public in a useable electronic form in bulk, subject to
    appropriate privacy concerns and safeguards as determined by
    the Judicial Conference of the United States. It also states
    that a uniform bankruptcy data system should be established
    that uses a single set of data definitions and forms to collect
    such data and that data for any particular bankruptcy case
    should be aggregated in electronic format.

                      TITLE VII. BANKRUPTCY TAX PROVISIONS

    Sec. 701. Treatment of Certain Tax Liens. Subsection (a) of
    section 701 of the Act makes several amendments to section 724
    of the Bankruptcy Code to provide greater protection for
    holders of tax liens on real or personal property of the
    estate, particularly holders of ad valorem tax liens. Many
    school boards obtain liens on real property to ensure
    collection of unpaid ad valorem taxes. Under current law, local
    governments are sometimes unable to collect these taxes despite
    the presence of a lien because they may be subordinated to
    certain claims and expenses as a result of section 724.
    Pursuant to section 701(a), subordination of ad valorem tax
    liens is still possible under section 724(b), but limited to
    the payment of: (1) claims for wages, salaries, and commissions
    entitled to priority under section 507(a)(4); and (2) claims
    for contributions to employee benefit plans entitled to
    priority under section 507(a)(5). Section 701(a) will also
    protect the holders of these tax liens as well as Federal tax
    liens from erosion of their claims' status by expenses incurred
    under chapter 11 of the Bankruptcy Code. Before a tax lien on
    real or personal property may be subordinated pursuant to
    section 724, the chapter 7 trustee must exhaust all other
    unencumbered estate assets and, consistent with section 506,
    recover reasonably necessary costs and expenses of preserving
    or disposing of such property.
        Section 701(b) amends section 505(a)(2) of the Bankruptcy
    Code to prevent a bankruptcy court from determining the amount
    or legality of an ad valorem tax on real or personal property
    if the applicable period for contesting or redetermining the
    amount of the claim under nonbankruptcy law has expired.

    Sec. 702. Treatment of Fuel Tax Claims. Section 702 of the Act
    amends section 501 of the Bankruptcy Code to simplify the
    process for filing of claims by states for certain fuel taxes.
    Rather than requiring each state to file a claim for these
    taxes (as is the case under current law), section 702 permits
    the designated ``base jurisdiction'' under the International
    Fuel Tax Agreement to file a claim on behalf of all states,
    which would then be allowed as a single claim.

    Sec. 703. Notice of Request for a Determination of Taxes. Under
    current law, a trustee or debtor in possession may request a
    governmental unit to determine administrative tax liabilities
    in order to receive a discharge of those liabilities. There are
    no requirements as to the content or form of such notice to the
    government. Section 703 of the Act amends section 505(b) of the
    Bankruptcy Code to require the clerk of each district to
    maintain a list of addresses designated by governmental units
    for service of section 505 requests. In addition, the list may
    also include information concerning filing requirements
    specified by such governmental units. If a governmental entity
    does not designate an address and provide that address to the
    bankruptcy court clerk, any request made under section 505(b)
    of the Bankruptcy Code may be served at the address for the
    filing of a tax return or protest of the appropriate taxing
    authority of that governmental unit.

    Sec. 704. Rate of Interest on Tax Claims. Under current law,
    there is no uniform rate of interest applicable to tax claims.
    As a result, varying standards have been used to determine the
    applicable rate. Section 704 of the Act amends the Bankruptcy
    Code to add section 511 for the purpose of simplifying the
    interest rate calculation. It provides that for all tax claims
    (federal, state, and local), including administrative expense
    taxes, the interest rate shall be determined in accordance with
    applicable nonbankruptcy law. With respect to taxes paid under
    a confirmed plan, the rate of interest is determined as of the
    calendar month in which the plan is confirmed.

    Sec. 705. Priority of Tax Claims. Under current law, a tax
    claim is entitled to be treated as a priority claim if it
    arises within certain specified time periods. In the case of
    income taxes, a priority arises, among other time periods, if
    the tax return was due within three years of the filing of the
    bankruptcy petition or if the assessment of the tax was made
    within 240 days of the filing of the petition. The 240-day
    period is tolled during the time that an offer in compromise is
    pending (plus 30 days). Though the statute is silent, the
    Supreme Court in Young v. United States, 535 U.S. 93 (2002)
    held that the three-year period is tolled during the pendency
    of a previous bankruptcy case. Section 705 amends section
    507(a)(8) of the Bankruptcy Code to codify the rule tolling
    priority periods during the pendency of a previous bankruptcy
    case during that three-year or 240-day period together with an
    additional 90 days. It also includes tolling provisions to
    adjust for the collection due process rights provided by the
    Internal Revenue Service Restructuring and Reform Act of 1998.
    During any period in which the government is prohibited from
    collecting a tax as a result of a request by the debtor for a
    hearing and an appeal of any collection action taken against
    the debtor, the priority is tolled, plus 90 days. Also, during
    any time in which there was a stay of proceedings in a prior
    bankruptcy case or collection of an income tax was precluded by
    a confirmed bankruptcy plan, the priority is tolled, plus 90
    days.

    Sec. 706. Priority Property Taxes Incurred. Under current law,
    many provisions of the Bankruptcy Code are keyed to the word
    ``assessed.'' While this term has an accepted meaning in the
    Federal system, it is not used in many state and local statutes
    and has created some confusion. To eliminate this problem with
    respect to real property taxes, section 706 amends section
    507(a)(8)(B) of the Bankruptcy Code by replacing the word
    ``assessed'' with ``incurred.''

    Sec. 707. No Discharge of Fraudulent Taxes in Chapter 13. Under
    current law, a debtor's ability to discharge tax debts varies
    depending on whether the debtor is in chapter 7 or chapter 13.
    In a chapter 7 case, taxes that are not dischargeable include
    taxes from a return due within three years of the petition
    date, taxes assessed within 240 days, or taxes related to an
    unfiled return or false return. Chapter 13, on the other hand,
    allows these obligations to be discharged. Section 707 of the
    Act amends Bankruptcy Code section 1328(a)(2) to prohibit the
    discharge of tax claims described in section 523(a)(1)(B) and
    (C) as well as claims for a tax required to be collected or
    withheld and for which the debtor is liable in whatever
    capacity pursuant to section 507(a)(8)(C).

    Sec. 708. No Discharge of Fraudulent Taxes in Chapter 11. Under
    current law, the confirmation of a chapter 11 plan discharges a
    corporate debtor from most debts. Section 708 amends section
    1141(d) of the Bankruptcy Code to except from discharge in a
    corporate chapter 11 case a debt specified in subsections
    523(a)(2)(A) or (B) of the Bankruptcy Code owed to a domestic
    governmental unit. In addition, it excepts from discharge a
    debt owed to a person as the result of an action filed under
    subchapter III of chapter 37 of title 31 of the United States
    Code or any similar state statute. Section 708 excepts from
    discharge a debt for a tax or customs duty with respect to
    which the debtor made a fraudulent tax return or willfully
    attempted in any manner to evade or defeat such tax.

    Sec. 709. Stay of Tax Proceedings Limited to Prepetition Taxes.
    Under current law, the filing of a petition for relief under
    the Bankruptcy Code activates an automatic stay that enjoins
    the commencement or continuation of a case in the United States
    Tax Court. This rule was arguably extended in Halpern v.
    Commissioner,\100\ which held that the tax court did not have
    jurisdiction to hear a case involving a postpetition year. To
    address this issue, section 709 of the Act amends section
    362(a)(8) of the Bankruptcy Code to specify that the automatic
    stay is limited to an individual debtor's prepetition taxes
    (taxes incurred before entering bankruptcy). The amendment
    clarifies that the automatic stay does not apply to an
    individual debtor's postpetition taxes. In addition, section
    709 provides that the stay applies to both prepetition and
    postpetition tax liabilities of a corporation so long as it is
    a liability that the bankruptcy court may determine.
    ---------------------------------------------------------------------------
        \100\ 96 T.C. 895 (1991).

    Sec. 710. Periodic Payment of Taxes in Chapter 11 Cases.
    Section 710 of the Act amends section 1129(a)(9) of the
    Bankruptcy Code to provide that the allowed amount of priority
    tax claims (as of the plan's effective date) must be paid in
    regular cash installments within five years from the entry of
    the order for relief. The manner of payment may not be less
    favorable than that accorded the most favored nonpriority
    unsecured claim provided for by the plan (other than cash
    payments made to a class of creditors under section 1122(b)).
    In addition, it requires the same payment treatment to be
    accorded to a secured claim that would otherwise meet the
    ---------------------------------------------------------------------------
    description of an unsecured claim under section 507(a)(8).

    Sec. 711. Avoidance of Statutory Liens Prohibited. The Internal
    Revenue Code gives special protections to certain purchasers of
    securities and motor vehicles notwithstanding the existence of
    a filed tax lien. Section 711 of the Act amends section 545(2)
    of the Bankruptcy Code to prevent that provision's special
    protections from being used to avoid an otherwise valid lien.
    Specifically, it prevents the avoidance of unperfected liens
    against a bona fide purchaser, if the purchaser qualifies as
    such under section 6323 of the Internal Revenue Code or a
    similar provision under state or local law.

    Sec. 712. Payment of Taxes in the Conduct of Business. Although
    current law generally requires trustees and receivers to pay
    taxes in the ordinary course of the debtor's business, the
    payment of administrative expenses must first be authorized by
    the court. Section 712(a) of the Act amends section 960 of
    title 28 of the United States Code to clarify that postpetition
    taxes in the ordinary course of business must be paid on or
    before when such tax is due under applicable nonbankruptcy law,
    with certain exceptions. This requirement does not apply if the
    obligation is a property tax secured by a lien against property
    that is abandoned under section 554 within a reasonable time
    after the lien attaches. In addition, the requirement does not
    pertain where the payment is excused under the Bankruptcy Code.
    With respect to chapter 7 cases, section 712(a) provides that
    the payment of a tax claim may be deferred until final
    distribution pursuant to section 726 if the tax was not
    incurred by a chapter 7 trustee or if the court, prior to the
    due date of the tax, finds that the estate has insufficient
    funds to pay all administrative expenses in full. Section
    712(b) amends section 503(b)(1)(B)(i) of the Bankruptcy Code to
    clarify that this provision applies to secured as well as
    unsecured tax claims, including property taxes based on
    liability that is in rem, in personam or both. Section 712(c)
    amends section 503(b)(1) to exempt a governmental unit from the
    requirement to file a request for payment of an administrative
    expense. Section 712(d)(1) amends section 506(b) to provide
    that to the extent that an allowed claim is oversecured, the
    holder is entitled to interest and any reasonable fees, costs,
    or charges provided for under state law. Section 712(d)(2), in
    turn, amends section 506(c) to permit a trustee to recover from
    a secured creditor the payment of all ad valorem property
    taxes.

    Sec. 713. Tardily Filed Priority Tax Claims. Section 713 of the
    Act amends section 726(a)(1) of the Bankruptcy Code to require
    a claim under section 507 that is not timely filed pursuant to
    section 501 to be entitled to a distribution if such claim is
    filed the earlier of the date that is ten days following the
    mailing to creditors of the summary of the trustee's final
    report or before the trustee commences final distribution.

    Sec. 714. Income Tax Returns Prepared by Tax Authorities.
    Section 714 of the Act amends section 523(a) of the Bankruptcy
    Code to provide that a return prepared pursuant to section
    6020(a) of the Internal Revenue Code, or similar State or local
    law, constitutes filing a return (and the debt can be
    discharged), but that a return filed on behalf of a taxpayer
    pursuant to section 6020(b) of the Internal Revenue Code, or
    similar State or local law, does not constitute filing a return
    (and the debt cannot be discharged).

    Sec. 715. Discharge of the Estate's Liability for Unpaid Taxes.
    Under the Bankruptcy Code, a trustee or debtor in possession
    may request a prompt audit to determine postpetition tax
    liabilities incurred by the bankruptcy estate. If the
    government does not make a determination or request an
    extension of time to audit, then the trustee or debtor in
    possession is discharged from any such tax liability. Several
    court cases have held that while this protects the debtor and
    the trustee, it does not necessarily protect the estate.
    Section 715 of the Act amends section 505(b) of the Bankruptcy
    Code to clarify that the estate is also protected if the
    government does not make a determination or request an
    extension of time to audit the debtor's tax returns. Therefore,
    if the government does not make a determination of postpetition
    tax liabilities or request extension of time to audit, then the
    estate's liability for unpaid taxes is discharged.

    Sec. 716. Requirement to File Tax Returns to Confirm Chapter 13
    Plans. Under current law, a debtor may enjoy the benefits of
    chapter 13 even if delinquent in the filing of tax returns.
    Section 716 of the Act responds to this problem. Subsection (a)
    amends section 1325(a) of the Bankruptcy Code to require a
    chapter 13 debtor to file all applicable Federal, state, and
    local tax returns as a condition of confirmation as required by
    section 1308 (as added by section 716(b)). Section 716(b) adds
    section 1308 to chapter 13 to require a chapter 13 debtor to be
    current on the filing of tax returns for the four-year period
    preceding the filing of the case. If the returns are not filed
    by the date on which the meeting of creditors is first
    scheduled, the trustee may hold open that meeting for a
    reasonable period of time to allow the debtor to file any
    unfiled returns. The additional period of time may not extend
    beyond 120 days after the date of the meeting of the creditors
    or beyond the date on which the return is due under the last
    automatic extension of time for filing. The debtor, however,
    may obtain an extension of time from the court if the debtor
    demonstrates by a preponderance of the evidence that the
    failure to file was attributable to circumstances beyond the
    debtor's control.
        Section 716(c) amends section 1307 of the Bankruptcy Code
    to provide that if a chapter 13 debtor fails to file a tax
    return as required by section 1308, the court must dismiss the
    case or convert it to one under chapter 7 (whichever is in the
    best interests of creditors and the estate) on request of a
    party in interest or the United States trustee after notice and
    a hearing.
        Section 716(d) amends section 502(b)(9) of the Bankruptcy
    Code to provide that in a chapter 13 case, a governmental
    unit's tax claim based on a return filed under section 1308
    shall be deemed to be timely filed if the claim is filed within
    60 days from the date on which such return is filed. Section
    716(e) states the sense of the Congress that the Judicial
    Conference of the United States should propose for adoption
    official rules with respect an objection by a governmental unit
    to confirmation of a chapter 13 plan when such claim pertains
    to a tax return filed pursuant to section 1308.

    Sec. 717. Standards for Tax Disclosure. Before creditors and
    stockholders may be solicited to vote on a chapter 11 plan, the
    plan proponent must file a disclosure statement that provides
    adequate information to holders of claims and interests so they
    can make a decision as to whether or not to vote in favor of
    the plan. As the tax consequences of a plan can have a
    significant impact on the debtor's reorganization prospects,
    section 717 amends section 1125(a) of the Bankruptcy Code to
    require that a chapter 11 disclosure statement discuss the
    plan's potential material Federal tax consequences to the
    debtor, any successor to the debtor, and to a hypothetical
    investor that is representative of the claimants and interest
    holders in the case.

    Sec. 718. Setoff of Tax Refunds. Under current law, the filing
    of a bankruptcy petition automatically stays the setoff of a
    prepetition tax refund against a prepetition tax obligation
    unless the bankruptcy court approves the setoff. Interest and
    penalties that may continue to accrue may also be
    nondischargeable pursuant to section 523(a)(1) of the
    Bankruptcy Code and cause individual debtors undue hardship.
    Section 718 of the Act amends section 362(b) of the Bankruptcy
    Code to create an exception to the automatic stay whereby such
    setoff could occur without court order unless it would not be
    permitted under applicable nonbankruptcy law because of a
    pending action to determine the amount or legality of the tax
    liability. In that circumstance, the governmental authority may
    hold the refund pending resolution of the action, unless the
    court, on motion of the trustee and after notice and a hearing,
    grants the taxing authority adequate protection pursuant to
    section 361.

    Sec. 719. Special Provisions Related to the Treatment of State
    and Local Taxes. Section 719 of the Act conforms state and
    local income tax administrative issues to the Internal Revenue
    Code. For example, under Federal law, a bankruptcy petitioner
    filing on March 5 has two tax years (January 1 to March 4, and
    March 5 to December 31). Under the Bankruptcy Code, however,
    state and local tax years are divided differently (January 1 to
    March 5, and March 6 to December 31). Section 719 requires the
    states to follow the Federal convention. It conforms state and
    local tax administration to the Internal Revenue Code in the
    following areas: division of tax liabilities and
    responsibilities between the estate and the debtor, tax
    consequences with respect to partnerships and transfers of
    property, and the taxable period of a debtor. Section 719 does
    not conform state and local tax rates to Federal tax rates.

    Sec. 720. Dismissal for Failure to Timely File Tax Returns.
    Under existing law, there is no definitive rule with respect to
    whether a bankruptcy court may dismiss a bankruptcy case if the
    debtor fails to file returns for taxes incurred postpetition.
    Section 720 of the Act amends section 521 of the Bankruptcy
    Code to allow a taxing authority to request that the court
    dismiss or convert a bankruptcy case if the debtor fails to
    file a postpetition tax return or obtain an extension. If the
    debtor does not file the required return or obtain the
    extension within 90 days from the time of the request by the
    taxing authority to file the return, the court must convert or
    dismiss the case, whichever is in the best interest of
    creditors and the estate.

               TITLE VIII. ANCILLARY AND OTHER CROSS-BORDER CASES

        Title VIII of the Act adds a new chapter to the Bankruptcy
    Code for transnational bankruptcy cases. It incorporates the
    Model Law on Cross-Border Insolvency to encourage cooperation
    between the United States and foreign countries with respect to
    transnational insolvency cases. Title VIII is intended to
    provide greater legal certainty for trade and investment as
    well as to provide for the fair and efficient administration of
    cross-border insolvencies, which protects the interests of
    creditors and other interested parties, including the debtor.
    In addition, it serves to protect and maximize the value of the
    debtor's assets.

    Sec. 801. Amendment to Add Chapter 15 to Title 11, United
    States Code. Section 801 introduces chapter 15 to the
    Bankruptcy Code, which is the Model Law on Cross-Border
    Insolvency (``Model Law'') promulgated by the United Nations
    Commission on International Trade Law (``UNCITRAL'') at its
    Thirtieth Session on May 12-30, 1997.\101\ Cases brought under
    chapter 15 are intended to be ancillary to cases brought in a
    debtor's home country, unless a full United States bankruptcy
    case is brought under another chapter. Even if a full case is
    brought, the court may decide under section 305 to stay or
    dismiss the United States case under the other chapter and
    limit the United States' role to an ancillary case under this
    chapter.\102\ If the full case is not dismissed, it will be
    subject to the provisions of this chapter governing
    cooperation, communication and coordination with the foreign
    courts and representatives. In any case, an order granting
    recognition is required as a prerequisite to the use of
    sections 301 and 303 by a foreign representative.
    ---------------------------------------------------------------------------
        \101\ The text of the Model Law and the Report of UNCITRAL on its
    adoption are found at U.N. G.A., 52d Sess., Supp. No. 17 (A/52/17)
    (``Report''). That Report and the Guide to Enactment of the UNCITRAL
    Model Law on Cross-Border Insolvency, U.N. Gen. Ass., UNCITRAL 30th
    Sess. U.N. Doc. A/CN.9/442 (1997) (``Guide''), which was discussed in
    the negotiations leading to the Model Law and published by UNCITRAL as
    an aid to enacting countries, should be consulted for guidance as to
    the meaning and purpose of its provisions. The development of the
    provisions in the negotiations at UNCITRAL, in which the United States
    was an active participant, is recounted in the interim reports of the
    Working Group that are cited in the Report.
        \102\ See section 1529 and commentary.

    Sec. 1501. Purpose and scope of application. Section 1501
    combines the Preamble to the Model Law (subsection (1)) with
    its article 1 (subsections (2) and (3)).\103\ It largely tracks
    the language of the Model Law with appropriate United States
    references. However, it adds in subsection (3) an exclusion of
    certain natural persons who may be considered ordinary
    consumers. Although the consumer exclusion is not in the text
    of the Model Law, the discussions at UNCITRAL recognized that
    such exclusion would be necessary in countries like the United
    States where there are special provisions for consumer debtors
    in the insolvency laws.\104\
    ---------------------------------------------------------------------------
        \103\ Guide at 16-19.
        \104\ See id. at 18, para.60; 19 para.66.
    ---------------------------------------------------------------------------
        The reference to section 109(e) essentially defines
    ``consumer debtors'' for purposes of the exclusion by
    incorporating the debt limitations of that section, but not its
    requirement of regular income. The exclusion adds a requirement
    that the debtor or debtor couple be citizens or long-term legal
    residents of the United States. This ensures that residents of
    other countries will not be able to manipulate this exclusion
    to avoid recognition of foreign proceedings in their home
    countries or elsewhere.
        The first exclusion in subsection (c) constitutes, for the
    United States, the exclusion provided in article 1, subsection
    (2), of the Model Law.\105\ Foreign representatives of foreign
    proceedings which are excluded from the scope of chapter 15 may
    seek comity from courts other than the bankruptcy court since
    the limitations of section 1509(b)(2) and (3) would not apply
    to them.
    ---------------------------------------------------------------------------
        \105\ Id. at 17.
    ---------------------------------------------------------------------------
        The reference to section 109(b) interpolates into chapter
    15 the entities governed by specialized insolvency regimes
    under United States law which are currently excluded from
    liquidation proceedings under title 11. Section 1501 contains
    an exception to the section 109(b) exclusions so that foreign
    proceedings of foreign insurance companies are eligible for
    recognition and relief under chapter 15 as they had been under
    section 304. However, section 1501(d) has the effect of leaving
    to State regulation any deposit, escrow, trust fund or the like
    posted by a foreign insurer under State law.

    Sec. 1502. Definitions. ``Debtor'' is given a special
    definition for this chapter. This definition does not come from
    the Model Law, but is necessary to eliminate the need to refer
    repeatedly to ``the same debtor as in the foreign proceeding.''
    With certain exceptions, the term ``person'' used in the Model
    Law has been replaced with ``entity,'' which is defined broadly
    in section 101(15) to include natural persons and various legal
    entities, thus matching the intended breadth of the term
    ``person'' in the Model Law. The exceptions include contexts in
    which a natural person is intended and those in which the Model
    Law language already refers to both persons and entities other
    than persons. The definition of ``trustee'' for this chapter
    ensures that debtors in possession and debtors, as well as
    trustees, are included in the term.\106\
    ---------------------------------------------------------------------------
        \106\ See section 1505.
    ---------------------------------------------------------------------------
        The definition of ``within the territorial jurisdiction of
    the United States'' in subsection (7) is not taken from the
    Model Law. It has been added because the United States, like
    some other countries, asserts insolvency jurisdiction over
    property outside its territorial limits under appropriate
    circumstances. Thus a limiting phrase is useful where the Model
    Law and this chapter intend to refer only to property within
    the territory of the enacting state. In addition, a definition
    of ``recognition'' supplements the Model Law definitions and
    merely simplifies drafting of various other sections of chapter
    15.
        Two key definitions of ``foreign proceeding'' and ``foreign
    representative,'' are found in sections 101(23) and (24), which
    have been amended consistent with Model Law article 2.\107\ The
    definitions of ``establishment,'' ``foreign court,'' ``foreign
    main proceeding,'' and ``foreign non-main proceeding'' have
    been taken from Model Law article 2, with only minor language
    variations necessary to comport with United States terminology.
    Additionally, defined terms have been placed in alphabetical
    order.\108\ In order to be recognized as a foreign non-main
    proceeding, the debtor must at least have an establishment in
    that foreign country.\109\
    ---------------------------------------------------------------------------
        \107\ Guide at 19-21, para.para.67-68.
        \108\ See Guide at 19, (Model Law) 21 para.75 (concerning
    establishment); 21 para.74 (concerning foreign court); 21 para.para.72,
    73 and 75 (concerning foreign main and non-main proceedings).
        \109\ See id. at 21, para.75.

    Sec. 1503. International obligations of the United States. This
    section is taken exactly from the Model Law with only minor
    adaptations of terminology.\110\ Although this section makes an
    international obligation prevail over chapter 15, the courts
    will attempt to read the Model Law and the international
    obligation so as not to conflict, especially if the
    international obligation addresses a subject matter less
    directly related than the Model Law to a case before the court.
    ---------------------------------------------------------------------------
        \110\ See id. at 22, Art. 3.

    Sec. 1504. Commencement of ancillary case. Article 4 of the
    Model Law is designed for designation of the competent court
    which will exercise jurisdiction under the Model Law. In United
    States law, section 1334(a) of title 28 gives exclusive
    jurisdiction to the district courts in a ``case'' under this
    title.\111\ Therefore, since the competent court has been
    determined in title 28, this section instead provides that a
    petition for recognition commences a ``case,'' an approach that
    also invokes a number of other useful procedural provisions. In
    addition, a new subsection (P) to section 157 of title 28 makes
    cases under this chapter part of the core jurisdiction of
    bankruptcy courts if referred by the district courts, thus
    completing the designation of the competent court. Finally, the
    particular bankruptcy court that will rule on the petition is
    determined pursuant to a revised section 1410 of title 28
    governing venue and transfer.\112\
    ---------------------------------------------------------------------------
        \111\ See id. at 23, Art. 4.
        \112\ New section 1410 of title 28 provides as follows:

    A case under chapter 15 of title 11 may be commenced in the district
    ---------------------------------------------------------------------------
    court for the district----

        (1) Gin which the debtor has its principal place of business or
    principal assets in the United States;

        (2) Gif 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 or enforcement of judgment in a Federal or State
    court; or

        (3) Gin 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.
        The title ``ancillary'' in the title of this section and in
    the title of this chapter emphasizes the United States policy
    in favor of a general rule that countries other than the home
    country of the debtor, where a main proceeding would be
    brought, should usually act through ancillary proceedings in
    aid of the main proceedings, in preference to a system of full
    bankruptcies (often called ``secondary'' proceedings) in each
    state where assets are found. Under the Model Law,
    notwithstanding the recognition of a foreign main proceeding,
    full bankruptcy cases are permitted in each country (see
    sections 1528 and 1529). In the United States, the court will
    have the power to suspend or dismiss such cases where
    appropriate under section 305.

    Sec. 1505. Authorization to act in a foreign country. The
    language in this section varies from the wording of article 5
    of the Model Law as necessary to comport with United States law
    and terminology. The slight alteration to the language in the
    last sentence is meant to emphasize that the identification of
    the trustee or other entity entitled to act is under United
    States law, while the scope of actions that may be taken by the
    trustee or other entity under foreign law is limited by the
    foreign law.\113\
    ---------------------------------------------------------------------------
        \113\ See Guide at 24.
    ---------------------------------------------------------------------------
        The related amendment to section 586(a)(3) of title 28
    makes acting pursuant to authorization under this section an
    additional power of a trustee or debtor in possession. While
    the Model Law automatically authorizes an administrator to act
    abroad, this section requires all trustees and debtors to
    obtain court approval before acting abroad. That requirement is
    a change from the language of the Model Law, but one that is
    purely internal to United States law.\114\ Its main purpose is
    to ensure that the court has knowledge and control of possibly
    expensive activities, but it will have the collateral benefit
    of providing further assurance to foreign courts that the
    United States debtor or representative is under judicial
    authority and supervision. This requirement means that the
    first-day orders in reorganization cases should include
    authorization to act under this section where appropriate.
    ---------------------------------------------------------------------------
        \114\ See id. at 24, Art. 5.
    ---------------------------------------------------------------------------
        This section also contemplates the designation of an
    examiner or other natural person to act for the estate in one
    or more foreign countries where appropriate. One instance might
    be a case in which the designated person had a special
    expertise relevant to that assignment. Another might be where
    the foreign court would be more comfortable with a designated
    person than with an entity like a debtor in possession. Either
    are to be recognized under the Model Law.\115\
    ---------------------------------------------------------------------------
        \115\ See id. at 23-24, para.82.

    Sec. 1506. Public policy exception. This provision follows the
    Model Law article 5 exactly, is standard in UNCITRAL texts, and
    has been narrowly interpreted on a consistent basis in courts
    around the world. The word ``manifestly'' in international
    usage restricts the public policy exception to the most
    fundamental policies of the United States.\116\
    ---------------------------------------------------------------------------
        \116\ See id. at 25.

    Sec. 1507. Additional assistance. Subsection (1) follows the
    language of Model Law article 7.\117\ Subsection (2) makes the
    authority for additional relief (beyond that permitted under
    sections 1519-1521, below) subject to the conditions for relief
    heretofore specified in United States law under section 304,
    which is repealed. This section is intended to permit the
    further development of international cooperation begun under
    section 304, but is not to be the basis for denying or limiting
    relief otherwise available under this chapter. The additional
    assistance is made conditional upon the court's consideration
    of the factors set forth in the current subsection 304(c) in a
    context of a reasonable balancing of interests following
    current case law. The references to ``estate'' in section 304
    have been changed to refer to the debtor's property, because
    many foreign systems do not create an estate in insolvency
    proceedings of the sort recognized under this chapter. Although
    the case law construing section 304 makes it clear that comity
    is the central consideration, its physical placement as one of
    six factors in subsection (c) of section 304 is misleading,
    since those factors are essentially elements of the grounds for
    granting comity. Therefore, in subsection (2) of this section,
    comity is raised to the introductory language to make it clear
    that it is the central concept to be addressed.\118\
    ---------------------------------------------------------------------------
        \117\ Id. at 26.
        \118\ Id.

    Sec. 1508. Interpretation. This provision follows conceptually
    Model Law article 8 and is a standard one in recent UNCITRAL
    treaties and model laws. Changes to the language were made to
    express the concepts more clearly in United States
    vernacular.\119\ Interpretation of this chapter on a uniform
    basis will be aided by reference to the Guide and the Reports
    cited therein, which explain the reasons for the terms used and
    often cite their origins as well. Uniform interpretation will
    also be aided by reference to CLOUT, the UNCITRAL Case Law On
    Uniform Texts, which is a service of UNCITRAL. CLOUT receives
    reports from national reporters all over the world concerning
    court decisions interpreting treaties, model laws, and other
    text promulgated by UNCITRAL. Not only are these sources
    persuasive, but they advance the crucial goal of uniformity of
    interpretation. To the extent that the United States courts
    rely on these sources, their decisions will more likely be
    regarded as persuasive elsewhere.
    ---------------------------------------------------------------------------
        \119\ Id. at 26, para.91.

    Sec. 1509. Right of direct access. This section implements the
    purpose of article 9 of the Model Law, enabling a foreign
    representative to commence a case under this chapter by filing
    a petition directly with the court without preliminary
    formalities that may delay or prevent relief. It varies the
    language to fit United States procedural requirements and it
    imposes recognition of the foreign proceeding as a condition to
    further rights and duties of the foreign representative. If
    recognition is granted, the foreign representative will have
    full capacity under United States law (subsection (b)(1)), may
    request such relief in a state or Federal court other than the
    bankruptcy court (subsection (b)(2)), and shall be granted
    comity or cooperation by such non-bankruptcy court (subsection
    (b)(3) and (c)). Subsections (b)(2), (b)(3), and (c) make it
    clear that chapter 15 is intended to be the exclusive door to
    ancillary assistance to foreign proceedings. The goal is to
    concentrate control of these questions in one court. That goal
    is important in a Federal system like that of the United States
    with many different courts, state and federal, that may have
    pending actions involving the debtor or the debtor's property.
    This section, therefore, completes for the United States the
    work of article 4 of the Model Law (``competent court'') as
    well as article 9.\120\
    ---------------------------------------------------------------------------
        \120\ See id. at 23, Art. 4, para.para.79-83; 27 Art. 9, para.93.
    ---------------------------------------------------------------------------
        Although a petition under current section 304 is the proper
    method for achieving deference by a United States court to a
    foreign insolvency proceeding under present law, some cases in
    state and Federal courts under current law have granted comity
    suspension or dismissal of cases involving foreign proceedings
    without requiring a section 304 petition or even referring to
    the requirements of that section. Even if the result is correct
    in a particular case, the procedure is undesirable, because
    there is room for abuse of comity. Parties would be free to
    avoid the requirements of this chapter and the expert scrutiny
    of the bankruptcy court by applying directly to a state or
    Federal court unfamiliar with the statutory requirements. Such
    an application could be made after denial of a petition under
    this chapter. This section concentrates the recognition and
    deference process in one United States court, ensures against
    abuse, and empowers a court that will be fully informed of the
    current status of all foreign proceedings involving the
    debtor.\121\
    ---------------------------------------------------------------------------
        \121\ See id. at 27, Art. 9; 34-35, Art. 15 and para.para.116-119;
    39-40, Art. 18, para.para.133-134; see also sections 1515(3), 1518.
    ---------------------------------------------------------------------------
        Subsection (d) has been added to ensure that a foreign
    representative cannot seek relief in courts in the United
    States after being denied recognition by the court under this
    chapter. Subsection (e) makes activities in the United States
    by a foreign representative subject to applicable United States
    law, just as 28 U.S.C. section 959 does for a domestic trustee
    in bankruptcy.\122\ Subsection (f) provides a limited exception
    to the prior recognition requirement so that collection of a
    claim which is property of the debtor, for example an account
    receivable, by a foreign representative may proceed without
    commencement of a case or recognition under this chapter.
    ---------------------------------------------------------------------------
        \122\ Id. at 27, para.93.

    Sec. 1510. Limited jurisdiction. Section 1510, article 10 of
    the Model Law, is modeled on section 306 of the Bankruptcy
    Code. Although the language referring to conditional relief in
    section 306 is not included, the court has the power under
    section 1522 to attach appropriate conditions to any relief it
    may grant. Nevertheless, the authority in section 1522 is not
    intended to permit the imposition of jurisdiction over the
    foreign representative beyond the boundaries of the case under
    this chapter and any related actions the foreign representative
    may take, such as commencing a case under another chapter of
    ---------------------------------------------------------------------------
    this title.

    Sec. 1511. Commencement of Case Under Section 301 or 303. This
    section reflects the intent of article 11 of the Model Law, but
    adds language that conforms to United States law or that is
    otherwise necessary in the United States given its many
    bankruptcy court districts and the importance of full
    information and coordination among them.\123\ Article 11 does
    not distinguish between voluntary and involuntary proceedings,
    but seems to have implicitly assumed an involuntary
    proceeding.\124\ Subsection 1(a)(2) goes farther and permits a
    voluntary filing, with its much simpler requirements, if the
    foreign proceeding that has been recognized is a main
    proceeding.
    ---------------------------------------------------------------------------
        \123\ See id. at 28, Art. 11.
        \124\ Id. at 38, para.para.97-99.

    Sec. 1512. Participation of a foreign representative in a case
    under this title. This section tracks article 12 of the Model
    Law with a slight alteration to tie into United States
    procedural terminology.\125\ The effect of this section is to
    make the recognized foreign representative a party in interest
    in any pending or later commenced United States bankruptcy
    case.\126\ Throughout this chapter, the word ``case'' has been
    substituted for the word ``proceeding'' in the Model Law when
    referring to cases under the United States Bankruptcy Code, to
    conform to United States usage.
    ---------------------------------------------------------------------------
        \125\ Id. at 29, Art. 12.
        \126\ Id. at 29, para.para.10-102.

    Sec. 1513. Access of foreign creditors to a case under this
    title. This section mandates nondiscriminatory or ``national''
    treatment for foreign creditors, except as provided in
    subsection (b) and section 1514. It follows the intent of Model
    Law article 13, but the language required alteration to fit
    into the Bankruptcy Code.\127\ The law as to priority for
    foreign claims that fit within a class given priority treatment
    under section 507 (for example, foreign employees or spouses)
    is unsettled. This section permits the continued development of
    case law on that subject and its general principle of national
    treatment should be an important factor to be considered. At a
    minimum, under this section, foreign claims must receive the
    treatment given to general unsecured claims without priority,
    unless they are in a class of claims in which domestic
    creditors would also be subordinated.\128\ The Model Law allows
    for an exception to the policy of nondiscrimination as to
    foreign revenue and other public law claims.\129\ Such claims
    (such as tax and Social Security claims) have been
    traditionally denied enforcement in the United States, inside
    and outside of bankruptcy. The Bankruptcy Code is silent on
    this point, so the rule is purely a matter of traditional case
    law. It is not clear if this policy should be maintained or
    modified, so this section leaves this question to developing
    case law. It also allows the Department of the Treasury to
    negotiate reciprocal arrangements with our tax treaty partners
    in this regard, although it does not mandate any restriction of
    the evolution of case law pending such negotiations.
    ---------------------------------------------------------------------------
        \127\ Id. at 30, para.103.
        \128\ See id. at 30, para.104.
        \129\ See id. at 31, para.105.

    Sec. 1514. Notification of foreign creditors concerning a case
    under title 11. This section ensures that foreign creditors
    receive proper notice of cases in the United States.\130\ As
    ``foreign creditor'' is not a defined term, foreign addresses
    are used as the distinguishing factor. The Federal Rules of
    Bankruptcy Procedure (``Rules'') should be amended to conform
    to the requirements of this section, including a special form
    for initial notice to such creditors. In particular, the Rules
    must provide additional time for such creditors to file proofs
    of claim where appropriate and require the court to make
    specific orders in that regard in proper circumstances. The
    notice must specify that secured claims must be asserted,
    because in many countries such claims are not affected by an
    insolvency proceeding and need not be filed.\131\ If a foreign
    creditor has made an appropriate request for notice, it will
    receive notices in every instance where notices would be sent
    to other creditors who have made such requests. Subsection (d)
    replaces the reference to ``a reasonable time period'' in Model
    Law article 14(3)(a).\132\ It makes clear that the Rules, local
    rules, and court orders must make appropriate adjustments in
    time periods and bar dates so that foreign creditors have a
    reasonable time within which to receive notice or take an
    action.
    ---------------------------------------------------------------------------
        \130\ See Model Law, Art. 14; Guide at 31-32, para.para.106-109.
        \131\ Guide at 33, para.111.
        \132\ Id. at 31, Art. 14(3)(a).

    Sec. 1515. Application for recognition of a foreign proceeding.
    This section follows article 15 of the Model Law with minor
    changes.\133\ The Rules will require amendment to provide forms
    for some or all of the documents mentioned in this section, to
    make necessary additions to Rules 1000 and 2002 to facilitate
    appropriate notices of the hearing on the petition for
    recognition, and to require filing of lists of creditors and
    other interested persons who should receive notices. Throughout
    the Model Law, the question of notice procedure is left to the
    law of the enacting state.\134\
    ---------------------------------------------------------------------------
        \133\ Id. at 33.
        \134\ See id. at 36, para.121.

    Sec. 1516. Presumptions concerning recognition. This section
    follows article 16 of the Model Law with minor changes.\135\
    Although sections 1515 and 1516 are designed to make
    recognition as simple and expedient as possible, the court may
    hear proof on any element stated. The ultimate burden as to
    each element is on the foreign representative, although the
    court is entitled to shift the burden to the extent indicated
    in section 1516. The word ``proof'' in subsection (3) has been
    changed to ``evidence'' to make it clearer using United States
    terminology that the ultimate burden is on the foreign
    representative.\136\ ``Registered office'' is the term used in
    the Model Law to refer to the place of incorporation or the
    equivalent for an entity that is not a natural person.\137\ The
    presumption that the place of the registered office is also the
    center of the debtor's main interest is included for speed and
    convenience of proof where there is no serious controversy.
    ---------------------------------------------------------------------------
        \135\ Id. at 36
        \136\ Id. at 36, Art. 16(3).
        \137\ Id.

    Sec. 1517. Order granting recognition. This section closely
    tracks article 17 of the Model Law, with a few exceptions.\138\
    The decision to grant recognition is not dependent upon any
    findings about the nature of the foreign proceedings of the
    sort previously mandated by section 304(c) of the Bankruptcy
    Code. The requirements of this section, which incorporates the
    definitions in section 1502 and sections 101(23) and (24), are
    all that must be fulfilled to attain recognition. Reciprocity
    was specifically suggested as a requirement for recognition on
    more than one occasion in the negotiations that resulted in the
    Model Law. It was rejected by overwhelming consensus each time.
    The United States was one of the leading countries opposing the
    inclusion of a reciprocity requirement.\139\ In this regard,
    the Model Law conforms to section 304, which has no such
    requirement.
    ---------------------------------------------------------------------------
        \138\ Id. at 37.
        \139\ Report of the Working Group on Insolvency Law on the Work of
    Its Twentieth Session (Vienna, 7-18 Oct. 1996), at 6, para.para.16-20.
    ---------------------------------------------------------------------------
        The drafters of the Model Law understood that only a main
    proceeding or a non-main proceeding meeting the standards of
    section 1502 (that is, one brought where the debtor has an
    establishment) were entitled to recognition under this section.
    The Model Law has been slightly modified to make this point
    clear by referring to the section 1502 definition of main and
    non-main proceedings, as well as to the general definition of a
    foreign proceeding in section 101(23). A petition under section
    1515 must show that proceeding is a main or a qualifying non-
    main proceeding in order to obtain recognition under this
    section.
        Consistent with the position of various civil law
    representatives in the drafting of the Model Law, recognition
    creates a status with the effects set forth in section 1520, so
    those effects are not viewed as orders to be modified, as are
    orders granting relief under sections 1519 and 1521. Subsection
    (4) states the grounds for modifying or terminating
    recognition. On the other hand, the effects of recognition
    (found in section 1520 and including an automatic stay) are
    subject to modification under section 362(d), made applicable
    by section 1520(2), which permits relief from the automatic
    stay of section 1520 for cause.
        Paragraph 1(d) of section 17 of the Model Law has been
    omitted as an unnecessary requirement for United States
    purposes, because a petition submitted to the wrong court will
    be dismissed or transferred under other provisions of United
    States law.\140\ The reference to section 350 refers to the
    routine closing of a case that has been completed and will
    invoke requirements including a final report from the foreign
    representative in such form as the Rules may provide or a court
    may order.\141\
    ---------------------------------------------------------------------------
        \140\ Guide at 37, Art. 17(1)(d).
        \141\ Id.

    Sec. 1518. Subsequent information. This section follows the
    Model Law, except to eliminate the word ``same,'' which is
    rendered unnecessary by the definition of ``debtor'' in section
    1502, and to provide for a formal document to be filed with the
    court.\142\ Judges in several jurisdictions, including the
    United States, have reported a need for a requirement of
    complete and candid reports to the court of all proceedings,
    worldwide, involving the debtor. This section will ensure that
    such information is provided to the court on a timely basis.
    Any failure to comply with this section will be subject to the
    sanctions available to the court for violations of the statute.
    The section leaves to the Rules the form of the required notice
    and related questions of notice to parties in interest, the
    time for filing, and the like.
    ---------------------------------------------------------------------------
        \142\ Id. at 39-40, para.para.133, 134.

    Sec. 1519. Relief may be granted upon petition for recognition
    of a foreign proceeding. This section generally follows article
    19 of the Model Law.\143\ The bankruptcy court will have
    jurisdiction to grant emergency relief under Rule 7065 pending
    a hearing on the petition for recognition. This section does
    not expand or reduce the scope of section 105 as determined by
    cases under section 105 nor does it modify the sweep of
    sections 555 to 560. Subsection (d) precludes injunctive relief
    against police and regulatory action under section 1519,
    leaving section 105 as the only avenue for such relief.
    Subsection (e) makes clear that this section contemplates
    injunctive relief and that such relief is subject to specific
    rules and a body of jurisprudence. Subsection (f) was added to
    complement amendments to the Bankruptcy Code provisions dealing
    with financial contracts.
    ---------------------------------------------------------------------------
        \143\ Id. at 40.

    Sec. 1520. Effects of recognition of a foreign main proceeding.
    In general, this chapter sets forth all the relief that is
    available as a matter of right based upon recognition
    hereunder, although additional assistance may be provided under
    section 1507 and this chapter has no effect on any relief
    currently available under section 105. The stay created by
    article 20 of the Model Law is imported to chapter 15 from
    existing provisions of the Code. Subsection (a)(1) combines
    subsections 1(a) and (b) of article 20 of the Model Law,
    because section 362 imposes the restrictions required by those
    two subsections as well as additional restrictions.\144\
    ---------------------------------------------------------------------------
        \144\ Id. at 42, Art. 20 1(a), (b).
    ---------------------------------------------------------------------------
        Subsections (a)(2) and (4) apply the Bankruptcy Code
    sections that impose the restrictions called for by subsection
    1(c) of the Model Law. In both cases, the provisions are
    broader and more complete than those contemplated by the Model
    Law, but include all the restraints the Model Law provisions
    would impose.\145\ As the foreign proceeding may or may not
    create an ``estate'' similar to that created in cases under
    this title, the restraints are applicable to actions against
    the debtor under section 362(a) and with respect to the
    property of the debtor under the remaining sections. The only
    property covered by this section is property within the
    territorial jurisdiction of the United States as defined in
    section 1502. To achieve effects on property of the debtor
    which is not within the territorial jurisdiction of the United
    States, the foreign representative would have to commence a
    case under another chapter of this title.
    ---------------------------------------------------------------------------
        \145\ Id. at 42, 45.
    ---------------------------------------------------------------------------
        By applying sections 361 and 362, subsection (a) makes
    applicable the United States exceptions and limitations to the
    restraints imposed on creditors, debtors, and other in a case
    under this title, as stated in article 20(2) of the Model
    Law.\146\ It also introduces the concept of adequate protection
    provided in sections 362 and 363. These exceptions and
    limitations include those set forth in sections 362(b), (c) and
    (d). As a result, the court has the power to terminate the stay
    pursuant to section 362(d), for cause, including a failure of
    adequate protection.\147\
    ---------------------------------------------------------------------------
        \146\ Id. at 42, Art. 20(2); 44, para.para. 148, 150.
        \147\ Id. at 42, Art. 20(3); 44-45, para.para. 151 152.
    ---------------------------------------------------------------------------
        Subsection (a)(2), by its reference to sections 363 and 552
    adds to the powers of a foreign representative of a foreign
    main proceeding an automatic right to operate the debtor's
    business and exercise the power of a trustee under sections 363
    and 542, unless the court orders otherwise. A foreign
    representative of a foreign main proceeding may need to
    continue a business operation to maintain value and granting
    that authority automatically will eliminate the risk of delay.
    If the court is uncomfortable about this authority in a
    particular situation, it can ``order otherwise'' as part of the
    order granting recognition.
        Two special exceptions to the automatic stay are embodied
    in subsections (b) and (c). To preserve a claim in certain
    foreign countries, it may be necessary to commence an action.
    Subsection (b) permits the commencement of such an action, but
    would not allow for its further prosecution. Subsection (c)
    provides that there is no stay of the commencement of a full
    United States bankruptcy case. This essentially provides an
    escape hatch through which any entity, including the foreign
    representative, can flee into a full case. The full case,
    however, will remain subject to subchapters IV and V on
    cooperation and coordination of proceedings and to section 305
    providing for stay or dismissal. Section 108 of the Bankruptcy
    Code provides the tolling protection intended by Model Law
    article 20(3), so no exception is necessary for claims that
    might be extinguished under United States law.\148\
    ---------------------------------------------------------------------------
        \148\ Id.

    Sec. 1521. Relief that may be granted upon recognition of a
    foreign proceeding. This section follows article 21 of the
    Model Law, with detailed changes to conform to United States
    law.\149\ The exceptions in subsection (a)(7) relate to
    avoiding powers. The foreign representative's status as to such
    powers is governed by section 1523 below. The avoiding power in
    section 549 and the exceptions to that power are covered by
    section 1520(a)(2). The word ``adequately'' in the Model Law,
    articles 21(2) and 22(1), has been changed to ``sufficiently''
    in sections 1521(b) and 1522(a) to avoid confusion with a very
    specialized legal term in United States bankruptcy, ``adequate
    protection.'' \150\ Subsection (c) is designed to limit relief
    to assets having some direct connection with a non-main
    proceeding, for example where they were part of an operating
    division in the jurisdiction of the non-main proceeding when
    they were fraudulently conveyed and then brought to the United
    States.\151\ Subsections (d), (e) and (f) are identical to
    those same subsections of section 1519. This section does not
    expand or reduce the scope of relief currently available in
    ancillary cases under sections 105 and 304 nor does it modify
    the sweep of sections 555 through 560.
    ---------------------------------------------------------------------------
        \149\ Id. at 45-46, Art. 21.
        \150\ Id. at 46, Art. 21(2); 47, Art. 22(1).
        \151\ See id. at 46-47, para.para. 158, 160.

    Sec. 1522. Protection of creditors and other interested
    persons. This section follows article 22 of the Model Law with
    changes for United States usage and references to relevant
    Bankruptcy Code sections.\152\ It gives the bankruptcy court
    broad latitude to mold relief to meet specific circumstances,
    including appropriate responses if it is shown that the foreign
    proceeding is seriously and unjustifiably injuring United
    States creditors. For a response to a showing that the
    conditions necessary to recognition did not actually exist or
    have ceased to exist, see section 1517. Concerning the change
    of ``adequately'' in the Model Law to ``sufficiently'' in this
    section, see section 1521. Subsection (d) is new and simply
    makes clear that Bankruptcy Code section 1104(d) shall apply to
    the appointment of an examiner appointed in a case under
    chapter 15 and such examiner shall be subject to certain duties
    and bonding requirements based on those imposed on trustees and
    examiners under other chapters of this title.
    ---------------------------------------------------------------------------
        \152\ Id. at 47.

    Sec. 1523. Actions to avoid acts detrimental to creditors. This
    section follows article 23 of the Model Law, with wording to
    fit it within procedure under this title.\153\ It confers
    standing on a recognized foreign representative to assert an
    avoidance action but only in a pending case under another
    chapter of this title. The Model Law is not clear about whether
    it would grant standing in a recognized foreign proceeding if
    no full case were pending. This limitation reflects concerns
    raised by the United States delegation during the UNCITRAL
    debates that a simple grant of standing to bring avoidance
    actions neglects to address very difficult choice of law and
    forum issues. This limited grant of standing in section 1523
    does not create or establish any legal right of avoidance nor
    does it create or imply any legal rules with respect to the
    choice of applicable law as to the avoidance of any transfer of
    obligation.\154\ The courts will determine the nature and
    extent of any such action and what national law may be
    applicable to such action.
    ---------------------------------------------------------------------------
        \153\ Id. at 48-49.
        \154\ See id. at 49, para.166.

    Sec. 1524. Intervention by a foreign representative. The
    wording is the same as the Model Law, except for a few
    clarifying words.\155\ This section gives the foreign
    representative whose foreign proceeding has been recognized the
    right to intervene in United States cases, state or federal,
    where the debtor is a party. Recognition being an act under
    Federal bankruptcy law, it must take effect in state as well as
    Federal courts. This section does not require substituting the
    foreign representative for the debtor, although that result may
    be appropriate in some circumstances.
    ---------------------------------------------------------------------------
        \155\ Id. at 49.

    Sec. 1525. Cooperation and direct communication between the
    court and foreign courts or foreign representatives. The
    wording of this provision is nearly identical to that of the
    Model Law.\156\ The right of courts to communicate with other
    courts in worldwide insolvency cases is of central importance.
    This section authorizes courts to do so. This right must be
    exercised, however, with due regard to the rights of the
    parties. Guidelines for such communications are left to the
    Federal rules of bankruptcy procedure.
    ---------------------------------------------------------------------------
        \156\ Id. at 50.

    Sec. 1526 Cooperation and direct communication between the
    trustee and foreign courts or foreign representatives. This
    section closely tracks the Model Law.\157\ The language in
    Model Law article 26 concerning the trustee's function was
    eliminated as unnecessary because it is always implied under
    United States law. The section authorizes the trustee,
    including a debtor in possession, to cooperate with other
    proceedings.
    ---------------------------------------------------------------------------
        \157\ Id. at 51.

    Sec. 1527. Forms of cooperation. This section is identical to
    the Model Law.\158\ United States bankruptcy courts already
    engage in most of the forms of cooperation described here, but
    they now have explicit statutory authorization for acts like
    the approval of protocols of the sort used in cases.\159\
    ---------------------------------------------------------------------------
        \158\ Guide at 51, 53.
        \159\ See e.g., In re Maxwell Communication Corp., 93 F.2d 1036 (2d
    Cir. 1996).

    Sec. 1528. Commencement of a case under title 11 after
    recognition of a foreign main proceeding. This section follows
    the Model Law, with specifics of United States law replacing
    the general clause at the end of the section to cover assets
    normally included within the jurisdiction of the United States
    courts in bankruptcy cases, except where assets are subject to
    the jurisdiction of another recognized proceeding.\160\ In a
    full bankruptcy case, the United States bankruptcy court
    generally has jurisdiction over assets outside the United
    States. Here that jurisdiction is limited where those assets
    are controlled by another recognized proceeding, if it is a
    main proceeding.
    ---------------------------------------------------------------------------
        \160\ Guide at 54-55.
    ---------------------------------------------------------------------------
        The court may use section 305 of this title to dismiss,
    stay, or limit a case as necessary to promote cooperation and
    coordination in a cross-border case. In addition, although the
    jurisdictional limitation applies only to United States
    bankruptcy cases commenced after recognition of a foreign
    proceeding, the court has ample authority under the next
    section and section 305 to exercise its discretion to dismiss,
    stay, or limit a United States case filed after a petition for
    recognition of a foreign main proceeding has been filed but
    before it has been approved, if recognition is ultimately
    granted.

    Sec. 1529. Coordination of a case under title 11 and a foreign
    proceeding. This section follows the Model Law almost exactly,
    but subsection (4) adds a reference to section 305 to make it
    clear the bankruptcy court may continue to use that section, as
    under present law, to dismiss or suspend a United States case
    as part of coordination and cooperation with foreign
    proceedings.\161\ This provision is consistent with United
    States policy to act ancillary to a foreign main proceeding
    whenever possible.
    ---------------------------------------------------------------------------
        \161\ Id. at 55-56.

    Sec. 1530. Coordination of more than one foreign proceeding.
    This section follows article 30 of the Model Law exactly.\162\
    It ensures that a foreign main proceeding will be given primacy
    in the United States, consistent with the overall approach of
    the United States favoring assistance to foreign main
    proceedings.
    ---------------------------------------------------------------------------
        \162\ Id. at 57.

    Sec. 1531. Presumption of insolvency based on recognition of a
    foreign main proceeding. This section follows the Model Law
    exactly, inserting a reference to the standard for an
    involuntary case under this title.\163\ Where an insolvency
    proceeding has begun in the home country of the debtor, and in
    the absence of contrary evidence, the foreign representative
    should not have to make a new showing that the debtor is in the
    sort of financial distress requiring a collective judicial
    remedy. The word ``proof'' in this provision here means
    ``presumption.'' The presumption does not arise for any purpose
    outside this section.
    ---------------------------------------------------------------------------
        \163\ Id. at 58.

    Sec. 1532. Rule of payment in concurrent proceeding. This
    section follows the Model Law exactly and is very similar to
    prior section 508(a), which is repealed. The Model Law language
    is somewhat clearer and broader than the equivalent language of
    prior section 508(a).\164\
    ---------------------------------------------------------------------------
        \164\ Id. at 59.

    Sec. 802. Other Amendments to Titles 11 and 28, United States
    Code. Section 802(a) amends section 103 of the Bankruptcy Code
    to clarify the provisions of the Code that apply to chapter 15
    and to specify which portions of chapter 15 apply in cases
    under other chapters of title 11. Section 802(b) amends the
    Bankruptcy Code's definitions of foreign proceeding and foreign
    representative in section 101. The new definitions are nearly
    identical to those contained in the Model Law but add to the
    phrase ``under a law relating to insolvency'' the words ``or
    debt adjustment.'' This addition emphasizes that the scope of
    the Model Law and chapter 15 is not limited to proceedings
    involving only debtors which are technically insolvent, but
    broadly includes all proceedings involving debtors in severe
    financial distress, so long as those proceedings also meet the
    other criteria of section 101(24).\165\
    ---------------------------------------------------------------------------
        \165\ Id. at 51-52, 71.
    ---------------------------------------------------------------------------
        Section 802(c) amends section 157(b)(2) of title 28 to
    provide that proceedings under chapter 15 will be core
    proceedings while other amendments to title 28 provide that the
    United States trustee's standing extends to cases under chapter
    15 and that the United States trustee's duties include acting
    in chapter 15 cases. Although the United States will continue
    to assert worldwide jurisdiction over property of a domestic or
    foreign debtor in a full bankruptcy case under chapters 7 and
    13 of this title, subject to deference to foreign proceedings
    under chapter 15 and section 305, the situation is different in
    a case commenced under chapter 15. There the United States is
    acting solely in an ancillary position, so jurisdiction over
    property is limited to that stated in chapter 15.
        Section 802(d) amends section 109 of the Bankruptcy Code to
    permit recognition of foreign proceedings involving foreign
    insurance companies and involving foreign banks which do not
    have a branch or agency in the United States (as defined in 12
    U.S.C. 3101). While a foreign bank not subject to United States
    regulation will be eligible for chapter 15 as a consequence of
    the amendment to section 109, section 303 prohibits the
    commencement of a full involuntary case against such a foreign
    bank unless the bank is a debtor in a foreign proceeding.
        While section 304 is repealed and replaced by chapter 15,
    access to the jurisprudence which developed under section 304
    is preserved in the context of new section 1507. On deciding
    whether to grant the additional assistance contemplated by
    section 1507, the court must consider the same factors
    specified in former section 304. The venue provisions for cases
    ancillary to foreign proceedings have been amended to provide a
    hierarchy of choices beginning with principal place of business
    in the United States, if any. If there is no principal place of
    business in the United States, but there is litigation against
    a debtor, then the district in which the litigation is pending
    would be the appropriate venue. In any other case, venue must
    be determined with reference to the interests of justice and
    the convenience of the parties.

                    TITLE IX. FINANCIAL CONTRACT PROVISIONS

    Sec. 901. Treatment of Certain Agreements by Conservators of
    Receivers of Insured Depository Institutions. Subsections (a)
    through (f) of section 901 of the Act amend the definitions of
    ``qualified financial contract,'' ``securities contract,''
    ``commodity contract,'' ``forward contract,'' ``repurchase
    agreement'' and ``swap agreement'' contained in the Federal
    Deposit Insurance Act (FDIA) and the Federal Credit Union Act
    (FCUA) to make them consistent with the definitions in the
    Bankruptcy Code and to reflect the enactment of the Commodity
    Futures Modernization Act of 2000 (CFMA). It is intended that
    the legislative history and case law surrounding those terms,
    to the date of this amendment, be incorporated into the
    legislative history of the FDIA and the FCUA.
        Subsection (b) amends the definition of ``securities
    contract'' expressly to encompass margin loans, to clarify the
    coverage of securities options and to clarify the coverage of
    repurchase and reverse repurchase transactions. The inclusion
    of ``margin loans'' in the definition is intended to encompass
    only those loans commonly known in the securities industry as
    ``margin loans,'' such as credit permitted in a margin account
    under the Federal Reserve Board's Regulation T (whether or not
    effected in that account) or arrangements where a financial
    intermediary--a stockbroker, financial institution, financial
    participant, or securities agency--extends credit in connection
    with the purchase, sale, carrying, or trading of securities.
    ``Margin loans'' do not include, however, other loans that
    happen to be secured by securities collateral. The reference in
    subsection (b) to a ``guarantee by or to any securities
    clearing agency'' is intended to cover other arrangements, such
    as novation, that have an effect similar to a guarantee. The
    reference to a ``loan'' of a security in the definition is
    intended to apply to loans of securities, whether or not for a
    ``permitted purpose'' under margin regulations. The reference
    to ``repurchase and reverse repurchase transactions'' is
    intended to eliminate any inquiry under the qualified financial
    contract provisions of the FDIA or FCUA as to whether a
    repurchase or reverse repurchase transaction is a purchase and
    sale transaction or a secured financing. Repurchase and reverse
    repurchase transactions meeting certain criteria are already
    covered under the definition of ``repurchase agreement'' in the
    FDIA (and a regulation of the Federal Deposit Insurance
    Corporation (FDIC)). Repurchase and reverse repurchase
    transactions on all securities (including, for example, equity
    securities, asset-backed securities, corporate bonds and
    commercial paper) are included under the definition of
    ``securities contract.'' Subsection (b) also specifies that
    purchase, sale and repurchase obligations under a participation
    in a commercial mortgage loan do not constitute ``securities
    contracts.'' While a contract for the purchase, sale or
    repurchase of a participation may constitute a ``securities
    contract,'' the purchase, sale or repurchase obligation
    embedded in a participation agreement does not make that
    agreement a ``securities contract.''
        A number of terms used in the qualified financial contract
    provisions, but not defined therein, are intended to have the
    meanings set forth in the analogous provisions of the
    Bankruptcy Code or Federal Deposit Insurance Corporation
    Improvement Act (``FDICIA''), such as, for example,
    ``securities clearing agency.'' The term ``person,'' however,
    is not intended to be so interpreted. Instead, ``person'' is
    intended to have the meaning set forth in section 1 of title 1
    of the United States Code.
        Section 901(c) amends with respect the definition of
    ``commodity contract'' in section 11(e)(8)(D)(iii) of the FDIA
    and in section 207(c)(8)(D)(iii) of the FCUA. Section 901(d)
    amends section 11(e)(8)(D)(iv) of the FDIA and section
    207(c)(8)(D)(iv) of the FCUA with respect to the definition of
    a ``forward contract.''
        Subsection (e) amends the definition of ``repurchase
    agreement'' in the FDIA and the FCUA to codify the substance of
    the FDIC's 1995 regulation defining repurchase agreement to
    include those on qualified foreign government securities.\166\
    The term ``qualified foreign government securities'' is defined
    to include those that are direct obligations of, or fully
    guaranteed by, central governments of members of the
    Organization for Economic Cooperation and Development (OECD),
    as determined by rule, of the appropriate Federal banking
    agency. Subsection (e) reflects developments in the repurchase
    agreement markets, which increasingly use foreign government
    securities as the underlying asset. The securities are limited
    to those issued by or guaranteed by full members of the OECD,
    as well as countries that have concluded special lending
    arrangements with the International Monetary Fund associated
    with the Fund's General Arrangements to Borrow.
    ---------------------------------------------------------------------------
        \166\ See 12 C.F.R. Sec. 360.5.
    ---------------------------------------------------------------------------
        Subsection (e) also amends the definition of ``repurchase
    agreement'' to include those on mortgage-related securities,
    mortgage loans and interests therein, and expressly to include
    principal and interest-only U.S. government and agency
    securities as securities that can be the subject of a
    ``repurchase agreement.'' The reference in the definition to
    United States government- and agency-issued or fully guaranteed
    securities is intended to include obligations issued or
    guaranteed by Fannie Mae and the Federal Home Loan Mortgage
    Corporation (Freddie Mac) as well as all obligations eligible
    for purchase by Federal Reserve banks under the similar
    language of section 14(b) of the Federal Reserve Act. This
    amendment is not intended to affect the status of repos
    involving securities or commodities as securities contracts,
    commodity contracts, or forward contracts, and their consequent
    eligibility for similar treatment under the qualified financial
    contract provisions. In particular, an agreement for the sale
    and repurchase of a security would continue to be a securities
    contract as defined in the FDIA or FCUA, even if not a
    ``repurchase agreement'' as defined in the FDIA or FCUA.
    Similarly, an agreement for the sale and repurchase of a
    commodity, even though not a ``repurchase agreement'' as
    defined in the FDIA or FCUA, would continue to be a forward
    contract for purposes of the FDIA or FCUA.
        Subsection (e), like subsection (b) for ``securities
    contracts,'' specifies that repurchase obligations under a
    participation in a commercial mortgage loan do not make the
    participation agreement a ``repurchase agreement.'' Such
    repurchase obligations embedded in participations in commercial
    loans (such as recourse obligations) do not constitute a
    ``repurchase agreement.'' A repurchase agreement involving the
    transfer of participations in commercial mortgage loans with a
    simultaneous agreement to repurchase the participation on
    demand or at a date certain one year or less after such
    transfer, however, would constitute a ``repurchase agreement''
    as well as a ``securities contract.''
        Section 901(f) of the Act amends the definition of ``swap
    agreement'' to include an ``interest rate swap, option, future,
    or forward agreement, including a rate floor, rate cap, rate
    collar, cross-currency rate swap, and basis swap; a spot, same
    day-tomorrow, tomorrow-next, forward, or other foreign exchange
    or precious metals agreement; a currency swap, option, future,
    or forward agreement; an equity index or equity swap, option,
    future, or forward agreement; a debt index or debt swap,
    option, future, or forward agreement; a total return, credit
    spread or credit swap, option, future, or forward agreement; a
    commodity index or commodity swap, option, future, or forward
    agreement; or a weather swap, weather derivative, or weather
    option.'' As amended, the definition of ``swap agreement'' will
    update the statutory definition and achieve contractual netting
    across economically similar transactions that are the subject
    of recurring dealings in the swap agreements.
        The definition of ``swap agreement'' originally was
    intended to provide sufficient flexibility to avoid the need to
    amend the definition as the nature and uses of swap
    transactions matured. To that end, the phrase ``or any other
    similar agreement'' was included in the definition. (The phrase
    ``or any similar agreement'' has been added to the definitions
    of ``forward contract,'' ``commodity contract,'' ``repurchase
    agreement'' and ``securities contract'' for the same reason.)
    To clarify this, subsection (f) expands the definition of
    ``swap agreement'' to include ``any agreement or transaction
    that is similar to any other agreement or transaction referred
    to in [section 11(e)(8)(D)(vi) of the FDIA] and is of a type
    that has been, is presently, or in the future becomes, the
    subject of recurrent dealings in the swap markets . . . and
    that is a forward, swap, future, or option on one or more
    rates, currencies, commodities, equity securities or other
    equity instruments, debt securities or other debt instruments,
    quantitative measures associated with an occurrence, extent of
    an occurrence, or contingency associated with a financial,
    commercial, or economic consequence, or economic or financial
    indices or measures of economic or financial risk or value.''
        The definition of ``swap agreement,'' however, should not
    be interpreted to permit parties to document non-swaps as swap
    transactions. Traditional commercial arrangements, such as
    supply agreements, or other non-financial market transactions,
    such as commercial, residential or consumer loans, cannot be
    treated as ``swaps'' under the FDIA, the FCUA, or the
    Bankruptcy Code simply because the parties purport to document
    or label the transactions as ``swap agreements.'' In addition,
    these definitions apply only for purposes of the FDIA, the
    FCUA, and the Bankruptcy Code. These definitions, and the
    characterization of a certain transaction as a ``swap
    agreement,'' are not intended to affect the characterization,
    definition, or treatment of any instruments under any other
    statute, regulation, or rule including, but not limited to, the
    statutes, regulations or rules enumerated in subsection (f).
    Similarly, Section 17 and a new paragraph of Section 11(e) of
    the FDIA provide that the definitions of ``securities
    contract,'' ``repurchase agreement,'' ``forward contract,'' and
    ``commodity contract,'' and the characterization of certain
    transactions as such a contract or agreement, are not intended
    to affect the characterization, definition, or treatment of any
    instruments under any other statute, regulation, or rule
    including, but not limited to, the statutes, regulations or
    rules enumerated in subsection (f).
        The definition also includes any security agreement or
    arrangement, or other credit enhancement, related to a swap
    agreement, including any guarantee or reimbursement obligation
    related to a swap agreement. This ensures that any such
    agreement, arrangement or enhancement is itself deemed to be a
    swap agreement, and therefore eligible for treatment as such
    for purposes of termination, liquidation, acceleration, offset
    and netting under the FDIA, FCUA, and the Bankruptcy Code.
    Similar changes are made in the definitions of ``forward
    contract,'' ``commodity contract,'' ``repurchase agreement''
    and ``securities contract.''
        The use of the term ``forward'' in the definition of ``swap
    agreement'' is not intended to refer only to transactions that
    fall within the definition of ``forward contract.'' Instead, a
    ``forward'' transaction could be a ``swap agreement'' even if
    not a ``forward contract.''
        Section 901(g) amends the definition of ``transfer'' in the
    FDIA and FCUA, which is a key term used in both, to ensure that
    it is broadly construed to encompass dispositions of property
    or interests in property. The definition tracks the Bankruptcy
    Code's definition of this term in Bankruptcy Code section 101.
        Section 901(h) makes clarifying technical changes to
    conform the receivership and conservatorship provisions of the
    FDIA and the FCUA. It also clarifies that the FDIA and the FCUA
    expressly protect rights under security agreements,
    arrangements or other credit enhancements related to one or
    more qualified financial contracts (QFCs). An example of a
    security arrangement is a right of setoff, and examples of
    other credit enhancements are letters of credit, guarantees,
    reimbursement obligations and other similar agreements.
        Section 901(i) of the Act clarifies that no provision of
    Federal or state law relating to the avoidance of preferential
    or fraudulent transfers (including the anti-preference
    provision of the National Bank Act) can be invoked to avoid a
    transfer made in connection with any QFC of an insured
    depository institution in conservatorship or receivership,
    absent actual fraudulent intent on the part of the transferee.

    Sec. 902. Authority of the FDIC and NCUAB with Respect to
    Failed and Failing Institutions. Section 902 of the Act
    provides that no provision of law, including FDICIA, shall be
    construed to limit the power of the FDIC or the NCUAB to
    transfer or to repudiate any QFC in accordance with its powers
    under the FDIA or FCUA, respectively. As discussed below, there
    has been some uncertainty regarding whether or not FDICIA
    limits the authority of the FDIC or the NCUAB to transfer or to
    repudiate QFCs of an insolvent financial institution. Section
    902, as well as other provisions in the Act, clarify that
    FDICIA does not limit the transfer powers of the FDIC or the
    NCUAB with respect to QFCs. Section 902 denies enforcement to
    ``walkaway'' clauses in QFCs. A walkaway clause is defined as a
    provision that, after calculation of a value of a party's
    position or an amount due to or from one of the parties upon
    termination, liquidation or acceleration of the QFC, either
    does not create a payment obligation of a party or extinguishes
    a payment obligation of a party in whole or in part solely
    because of such party's status as a non-defaulting party.

    Sec. 903. Amendments Relating to Transfers of Qualified
    Financial Contracts. Section 903 of the Act amends the FDIA and
    the FCUA to expand the transfer authority of the FDIC and the
    NCUAB, respectively to permit transfers of QFCs to ``financial
    institutions'' as defined in FDICIA or in regulations. This
    provision will allow the FDIC and NCUAB to transfer QFCs to a
    non-depository financial institution, provided the institution
    is not subject to bankruptcy or insolvency proceedings.
        The new FDIA and FCUA provisions specify that when the FDIC
    and NCUAB transfer QFCs that are cleared on or subject to the
    rules of a particular clearing organization, the transfer will
    not require the clearing organization to accept the transferee
    as a member of the organization. This provision gives the FDIC
    and NCUAB flexibility in resolving QFCs cleared on or subject
    to the rules of a clearing organization, while preserving the
    ability of such organizations to enforce appropriate risk
    reducing membership requirements. The amendment does not
    require the clearing organization to accept for clearing any
    QFCs from the transferee, except on the terms and conditions
    applicable to other parties permitted to clear through that
    clearing organization. ``Clearing organization'' is defined to
    mean a ``clearing organization'' within the meaning of FDICIA
    (as amended both by the CFMA and by Section 906 of the Act).
        The new FDIA and FCUA provisions also permit transfers to
    an eligible financial institution that is a non-U.S. person, or
    the branch or agency of a non-U.S. person or a U.S. financial
    institution that is not an FDIC-insured institution if,
    following the transfer, the contractual rights of the parties
    would be enforceable substantially to the same extent as under
    the FDIA and the FCUA. It is expected that neither the FDIC nor
    the NCUAB would transfer QFCs to such a financial institution
    if there were an impending change of law that would impair the
    enforceability of the parties' contractual rights.
        Section 903 amends the notification requirements following
    a transfer of the QFCs of a failed depository institution to
    require the FDIC and NCUAB to notify any party to a transferred
    QFC of such transfer by 5:00 p.m. (Eastern Time) on the
    business day following the date of the appointment of the FDIC
    acting as receiver or following the date of such transfer by
    the FDIC or NCUAB acting as a conservator. This amendment is
    consistent with the policy statement on QFCs issued by the FDIC
    on December 12, 1989.
        Section 903 amends the FDIA to clarify the relationship
    between the FDIA and FDICIA. There has been some uncertainty
    whether FDICIA permits counterparties to terminate or liquidate
    a QFC before the expiration of the time period provided by the
    FDIA during which the FDIC may repudiate or transfer a QFC in a
    conservatorship or receivership. Subsection (c) provides that a
    party may not terminate a QFC based solely on the appointment
    of the FDIC as receiver until 5:00 p.m. (Eastern Time) on the
    business day following the appointment of the receiver or after
    the person has received notice of a transfer under FDIA section
    11(d)(9), or based solely on the appointment of the FDIC as
    conservator, notwithstanding the provisions of FDICIA. This
    provides the FDIC with an opportunity to undertake an orderly
    resolution of the insured depository institution. Section 903
    makes a similar change to the FCUA.
        Section 903 also prohibits the enforcement of rights of
    termination or liquidation that arise solely because of the
    insolvency of the institution or are based on the ``financial
    condition'' of the depository institution in receivership or
    conservatorship. For example, termination based on a cross-
    default provision in a QFC that is triggered upon a default
    under another contract could be rendered ineffective if such
    other default was caused by an acceleration of amounts due
    under that other contract, and such acceleration was based
    solely on the appointment of a conservator or receiver for that
    depository institution. Similarly, a provision in a QFC
    permitting termination of the QFC based solely on a downgraded
    credit rating of a party will not be enforceable in an FDIC or
    NCUAB receivership or conservatorship because the provision is
    based solely on the financial condition of the depository
    institution in default. However, any payment, delivery or other
    performance-based default, or breach of a representation or
    covenant putting in question the enforceability of the
    agreement, will not be deemed to be based solely on financial
    condition for purposes of this provision. The amendment is not
    intended to prevent counterparties from taking all actions
    permitted and recovering all damages authorized upon
    repudiation of any QFC by a conservator or receiver, or from
    taking actions based upon a receivership or other financial
    condition-triggered default in the absence of a transfer (as
    contemplated in Section 11(e)(10) of the FDIA). The amendment
    allows the FDIC or NCUAB to meet its obligation to provide
    notice to parties to transferred QFCs by taking steps
    reasonably calculated to provide notice to such parties by the
    required time. This is consistent with the existing policy
    statement on QFCs issued by the FDIC on December 12, 1989.
        Finally, the amendment permits the FDIC or NCUAB to
    transfer QFCs of a failed depository institution to a bridge
    bank or a depository institution organized by the FDIC or NCUAB
    for which a conservator is appointed either (i) immediately
    upon the organization of such institution or (ii) at the time
    of a purchase and assumption transaction between the FDIC or
    NCUAB and the institution. This provision clarifies that such
    institutions are not to be considered financial institutions
    that are ineligible to receive such transfers under FDIA
    section 11(e)(9). This is consistent with the existing policy
    statement on QFCs issued by the FDIC on December 12, 1989.

    Sec. 904. Amendments Relating to Disaffirmance or Repudiation
    of Qualified Financial Contracts. Section 904 of the Act limits
    the disaffirmance and repudiation authority of the FDIC and
    NCUAB with respect to QFCs so that such authority is consistent
    with their transfer authority under FDIA section 11(e)(9) or
    FCUA section 207(c). This ensures that no disaffirmance,
    repudiation or transfer authority of the FDIC or NCUAB may be
    exercised to ``cherry-pick'' or otherwise treat independently
    all the QFCs between a depository institution in default and a
    person or any affiliate of such person. The FDIC has announced
    that its policy is not to repudiate or disaffirm QFCs
    selectively. This unified treatment is fundamental to the
    reduction of systemic risk.

    Sec. 905. Clarifying Amendment Relating to Master Agreements.
    Section 905 of the Act specifies that a master agreement for
    one or more securities contracts, commodity contracts, forward
    contracts, repurchase agreements or swap agreements will be
    treated as a single QFC under the FDIA or the FCUA (but only
    with respect to the underlying agreements are themselves QFCs).
    This provision ensures that cross-product netting pursuant to a
    master agreement, or pursuant to an umbrella agreement for
    separate master agreements between the same parties, each of
    which is used to document one or more qualified financial
    contracts, will be enforceable under the FDIA and the FCUA.
    Cross-product netting permits a wide variety of financial
    transactions between two parties to be netted, thereby
    maximizing the present and potential future risk-reducing
    benefits of the netting arrangement between the parties.
    Express recognition of the enforceability of such cross-product
    master agreements furthers the policy of increasing legal
    certainty and reducing systemic risks in the case of an
    insolvency of a large financial participant.

    Sec. 906. Federal Deposit Insurance Corporation Improvement Act
    of 1991. Subsection (a)(1) of section 906 of the Act amends the
    definition of ``clearing organization'' in section 402 of the
    FDICIA to include clearinghouses that are subject to exemptions
    pursuant to orders of the Securities and Exchange Commission or
    the Commodity Futures Trading Commission and to include
    multilateral clearing organizations (the definition of which
    was added to FDICIA by the CFMA).
        FDICIA provides that a netting arrangement will be enforced
    pursuant to its terms, notwithstanding the failure of a party
    to the agreement. The current netting provisions of FDICIA,
    however, limit this protection to ``financial institutions,''
    which include depository institutions. Section 906(a)(2) amends
    the FDICIA definition of covered institutions to include (i)
    uninsured national and State member banks, irrespective of
    their eligibility for deposit insurance and (ii) foreign banks
    (including the foreign bank and its branches or agencies as a
    combined group, or only the foreign bank parent of a branch or
    agency). The latter change will extend the protections of
    FDICIA to ensure that U.S. financial organizations
    participating in netting agreements with foreign banks are
    covered by the Act, thereby enhancing the safety and soundness
    of these arrangements. It is intended that a non-defaulting
    foreign bank and its branches and agencies be considered to be
    a single financial institution for purposes of the bilateral
    netting provisions of FDICIA (except to the extent that the
    non-defaulting foreign bank and its branches and agencies on
    the one hand, and the defaulting financial institution, on the
    other, have entered into agreements that clearly evidence an
    intention that the non-defaulting foreign bank and its branches
    and agencies be treated as separate financial institutions for
    purposes of the bilateral netting provisions of FDICIA).
        Subsection (a)(3) amends the FDICIA to provide that, for
    purposes of FDICIA, two or more clearing organizations that
    enter into a netting contract are considered ``members'' of
    each other. This assures the enforceability of netting
    arrangements involving two or more clearing organizations and a
    member common to all such organizations, thus reducing systemic
    risk in the event of the failure of such a member. Under the
    current FDICIA provisions, the enforceability of such
    arrangements depends on a case-by-case determination that
    clearing organizations could be regarded as members of each
    other for purposes of FDICIA.
        Section 906(a)(4) of the Act amends the FDICIA definition
    of netting contract and the general rules applicable to netting
    contracts. The current FDICIA provisions require that the
    netting agreement must be governed by the law of the United
    States or a State to receive the protections of FDICIA. Many of
    these agreements, however, particularly netting arrangements
    covering positions taken in foreign exchange dealings, are
    governed by the laws of a foreign country. This subsection
    broadens the definition of ``netting contract'' to include
    those agreements governed by foreign law, and preserves the
    FDICIA requirement that a netting contract not be invalid
    under, or precluded by, Federal law.
        Section 906(b) and (c) establish two exceptions to FDICIA's
    protection of the enforceability of the provisions of netting
    contracts between financial institutions and among clearing
    organization members. First, the termination provisions of
    netting contracts will not be enforceable based solely on (i)
    the appointment of a conservator for an insolvent depository
    institution under the FDIA or FCUA, or (ii) the appointment of
    a receiver or liquidating agent for such institution under the
    FDIA or FCUA, if such receiver or liquidating agent transfers
    or repudiates QFCs in accordance with the FDIA or FCUA and
    gives notice of a transfer by 5:00 p.m. on the business day
    following such appointment. This change is made to confirm the
    FDIC's and FCUA's flexibility to transfer or repudiate the QFCs
    of an insolvent depository institution in accordance with the
    terms of the FDIA or FCUA. This modification also provides
    important legal certainty regarding the treatment of QFCs under
    the FDIA and FCUA, because the current relationship between
    these statutes and FDICIA is unclear.
        The second exception provides that FDICIA does not override
    a stay order under SIPA with respect to foreclosure on
    securities (but not cash) collateral of a debtor (section 911
    of the Act makes a conforming change to SIPA). There is also an
    exception relating to insolvent commodity brokers. Subsections
    (b) and (c) also clarify that a security agreement or other
    credit enhancement related to a netting contract is enforceable
    to the same extent as the underlying netting contract.
        Section 906(d) of the Act adds a new section 407 to FDICIA.
    This new section provides that, notwithstanding any other law,
    QFCs with uninsured national banks, uninsured Federal branches
    or agencies, or Edge Act corporations, or uninsured State
    member banks that operate, or operate as, a multilateral
    clearing organization and that are placed in receivership or
    conservatorship will be treated in the same manner as if the
    contract were with an insured national bank or insured Federal
    branch for which a receiver or conservator was appointed. This
    provision will ensure that parties to QFCs with these
    institutions will have the same rights and obligations as
    parties entering into the same agreements with insured
    depository institutions. The new section also specifically
    limits the powers of a receiver or conservator for such an
    institution to those contained in 12 U.S.C.
    Sec. Sec. 1821(e)(8), (9), (10), and (11), which address QFCs.
        While the amendment would apply the same rules that apply
    to insured institutions, the provision would not change the
    rules that apply to insured institutions. Nothing in this
    section would amend the International Banking Act, the Federal
    Deposit Insurance Act, the National Bank Act, or other
    statutory provisions with respect to receiverships of insured
    national banks or Federal branches.

    Sec. 907. Bankruptcy Law Amendments. Section 907 of the Act
    makes a series of amendments to the Bankruptcy Code. Subsection
    (a)(1) amends the Bankruptcy Code definitions of ``repurchase
    agreement'' and ``swap agreement'' to conform with the
    amendments to the FDIA contained in sections 901(e) and (f) of
    the Act.
        In connection with the definition of ``repurchase
    agreement,'' the term ``qualified foreign government
    securities'' is defined to include securities that are direct
    obligations of, or fully guaranteed by, central governments of
    members of the Organization for Economic Cooperation and
    Development (OECD). This language reflects developments in the
    repurchase agreement markets, which increasingly use foreign
    government securities as the underlying asset. The securities
    are limited to those issued by or guaranteed by full members of
    the OECD, as well as countries that have concluded special
    lending arrangements with the International Monetary Fund
    associated with the Fund's General Arrangements to Borrow.
        Subsection (a)(1) also amends the definition of
    ``repurchase agreement'' to include those on mortgage-related
    securities, mortgage loans and interests therein, and to
    include principal and interest-only U.S. government and agency
    securities as securities that can be the subject of a
    ``repurchase agreement.'' The reference in the definition to
    United States government- and agency-issued or fully guaranteed
    securities is intended to include obligations issued or
    guaranteed by Fannie Mae and the Federal Home Loan Mortgage
    Corporation (Freddie Mac) as well as all obligations eligible
    for purchase by Federal Reserve banks under the similar
    language of section 14(b) of the Federal Reserve Act.
        This amendment is not intended to affect the status of
    repos involving securities or commodities as securities
    contracts, commodity contracts, or forward contracts, and their
    consequent eligibility for similar treatment under other
    provisions of the Bankruptcy Code. In particular, an agreement
    for the sale and repurchase of a security would continue to be
    a securities contract as defined in the Bankruptcy Code and
    thus also would be subject to the Bankruptcy Code provisions
    pertaining to securities contracts, even if not a ``repurchase
    agreement'' as defined in the Bankruptcy Code. Similarly, an
    agreement for the sale and repurchase of a commodity, even
    though not a ``repurchase agreement'' as defined in the
    Bankruptcy Code, would continue to be a forward contract for
    purposes of the Bankruptcy Code and would be subject to the
    Bankruptcy Code provisions pertaining to forward contracts.
        Subsection (a)(1) specifies that repurchase obligations
    under a participation in a commercial mortgage loan do not make
    the participation agreement a ``repurchase agreement.'' These
    repurchase obligations embedded in participations in commercial
    loans (such as recourse obligations) do not constitute a
    ``repurchase agreement.'' However, a repurchase agreement
    involving the transfer of participations in commercial mortgage
    loans with a simultaneous agreement to repurchase the
    participation on demand or at a date certain one year or less
    after such transfer would constitute a ``repurchase agreement''
    (as well as a ``securities contract'').
        The definition of ``swap agreement'' is amended to include
    an ``interest rate swap, option, future, or forward agreement,
    including a rate floor, rate cap, rate collar, cross-currency
    rate swap, and basis swap; a spot, same day-tomorrow, tomorrow-
    next, forward, or other foreign exchange or precious metals
    agreement; a currency swap, option, future, or forward
    agreement; an equity index or equity swap, option, future, or
    forward agreement; a debt index or debt swap, option, future,
    or forward agreement; a total return, credit spread or credit
    swap, option, future, or forward agreement; a commodity index
    or commodity swap, option, future, or forward agreement; or a
    weather swap, weather derivative, or weather option.'' As
    amended, the definition of ``swap agreement'' will update the
    statutory definition and achieve contractual netting across
    economically similar transactions.
        The definition of ``swap agreement'' originally was
    intended to provide sufficient flexibility to avoid the need to
    amend the definition as the nature and uses of swap
    transactions matured. To that end, the phrase ``or any other
    similar agreement'' was included in the definition. (The phrase
    ``or any similar agreement'' has been added to the definitions
    of ``forward contract,'' ``commodity contract,'' ``repurchase
    agreement,'' and ``securities contract'' for the same reason.)
    To clarify this, subsection (a)(1) expands the definition of
    ``swap agreement'' to include ``any agreement or transaction
    that is similar to any other agreement or transaction referred
    to in [Section 101(53B) of the Bankruptcy Code] 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'' and
    [that] is a forward, swap, future, or option on one or more
    rates, currencies, commodities, equity securities or other
    equity instruments, debt securities or other debt instruments,
    quantitative measures associated with an occurrence, extent of
    an occurrence, or contingency associated with a financial,
    commercial, or economic consequence, or economic or financial
    indices or measures of economic or financial risk or value.''
        The definition of ``swap agreement'' in this subsection
    should not be interpreted to permit parties to document non-
    swaps as swap transactions. Traditional commercial
    arrangements, such as supply agreements, or other non-financial
    market transactions, such as commercial, residential or
    consumer loans, cannot be treated as ``swaps'' under the FDIA,
    the FCUA, or the Bankruptcy Code because the parties purport to
    document or label the transactions as ``swap agreements.''
    These definitions, and the characterization of a certain
    transaction as a ``swap agreement,'' are not intended to affect
    the characterization, definition, or treatment of any
    instruments under any other statute, regulation, or rule
    including, but not limited to, the statutes, regulations or
    rules enumerated in subsection (a)(1)(C). Similarly, the
    definitions of ``securities contract,'' ``repurchase
    agreement,'' and ``commodity contract'' and the
    characterization of certain transactions as such a contract or
    agreement, are not intended to affect the characterization,
    definition, or treatment of any instrument under any other
    statute, regulation, or rule including, but not limited to, the
    statutes, regulations or rules enumerated in subsection (f).
        The definition also includes any security agreement or
    arrangement, or other credit enhancement, related to a swap
    agreement, including any guarantee or reimbursement obligation
    related to a swap agreement. This ensures that any such
    agreement, arrangement or enhancement is itself deemed to be a
    swap agreement, and therefore eligible for treatment as such
    for purposes of termination, liquidation, acceleration, offset
    and netting under the Bankruptcy Code, the FDIA and the FCUA.
    Similar changes are made in the definitions of ``forward
    contract,'' ``commodity contract,'' ``repurchase agreement,''
    and ``securities contract.'' An example of a security
    arrangement is a right of setoff; examples of other credit
    enhancements are letters of credit and other similar
    agreements. A security agreement or arrangement or guarantee or
    reimbursement obligation related to a ``swap agreement,''
    ``forward contract,'' ``commodity contract,'' ``repurchase
    agreement'' or ``securities contract'' will be such an
    agreement or contract only to the extent of the damages in
    connection with such agreement measured in accordance with
    Section 562 of the Bankruptcy Code (added by the Act). This
    limitation does not affect, however, the other provisions of
    the Bankruptcy Code (including Section 362(b)) relating to
    security arrangements in connection with agreements or
    contracts that otherwise qualify as ``swap agreements,''
    ``forward contracts,'' ``commodity contracts,'' ``repurchase
    agreements'' or ``securities contracts.''
        The use of the term ``forward'' in the definition of ``swap
    agreement'' is not intended to refer only to transactions that
    fall within the definition of ``forward contract.'' Instead, a
    ``forward'' transaction could be a ``swap agreement'' even if
    not a ``forward contract.''
        Subsections (a)(2) and (a)(3) amend the Bankruptcy Code
    definitions of ``securities contract'' and ``commodity
    contract,'' respectively, to conform them to the definitions in
    the FDIA.
        Subsection (a)(2), like the amendments to the FDIA and the
    FCUA, amends the definition of ``securities contract''
    expressly to encompass margin loans, to clarify the coverage of
    securities options and to clarify the coverage of repurchase
    and reverse repurchase transactions. The inclusion of ``margin
    loans'' in the definition is intended to encompass only those
    loans commonly known in the securities industry as ``margin
    loans,'' such as credit permitted in a margin account under the
    Federal Reserve Board's Regulation T (whether or not effected
    in that account) or arrangements where a financial
    intermediary--a stockbroker, financial institution, financial
    participant, or securities clearing agency--extends credit in
    connection with the purchase, sale, carrying, or trading of
    securities. ``Margin loans'' do not include, however, other
    loans that happen to be secured by securities collateral. The
    reference in subsection (b) to a ``guarantee'' by or to a
    ``securities clearing agency'' is intended to cover other
    arrangements, such as novation, that have an effect similar to
    a guarantee. The reference to a ``loan'' of a security in the
    definition is intended to apply to loans of securities, whether
    or not for a ``permitted purpose'' under margin regulations.
    The reference to ``repurchase and reverse repurchase
    transactions'' is intended to eliminate any inquiry under
    section 555 and related provisions as to whether a repurchase
    or reverse repurchase transaction is a purchase and sale
    transaction or a secured financing. Repurchase and reverse
    repurchase transactions meeting certain criteria are already
    covered under the definition of ``repurchase agreement'' in the
    Bankruptcy Code. Repurchase and reverse repurchase transactions
    on all securities (including, for example, equity securities,
    asset-backed securities, corporate bonds and commercial paper)
    are included under the definition of ``securities contract.'' A
    repurchase or reverse repurchase transaction which is a
    ``securities contract'' but not a ``repurchase agreement''
    would thus be subject to the ``counterparty limitations''
    contained in section 555 of the Bankruptcy Code (i.e., only
    stockbrokers, financial institutions, securities clearing
    agencies and financial participants can avail themselves of
    section 555 and related provisions).
        Subsection (a)(2) also specifies that purchase, sale and
    repurchase obligations under a participation in a commercial
    mortgage loan do not constitute ``securities contracts.'' While
    a contract for the purchase, sale or repurchase of a
    participation may constitute a ``securities contract,'' the
    purchase, sale or repurchase obligation embedded in a
    participation agreement does not make that agreement a
    ``securities contract.'' Section 907(a) clarifies the reference
    to guarantee or reimbursement obligation.
        Section 907(b) amends the Bankruptcy Code definitions of
    ``financial institution'' and ``forward contract merchant.''
    The definition for ``financial institution'' includes Federal
    Reserve Banks and the receivers or conservators of insolvent
    depository institutions. With respect to securities contracts,
    the definition of ``financial institution'' expressly includes
    investment companies registered under the Investment Company
    Act of 1940.
        Subsection (b) also adds a new definition of ``financial
    participant'' to limit the potential impact of insolvencies
    upon other major market participants. This definition will
    allow such market participants to close-out and net agreements
    with insolvent entities under sections 362(b)(6), 555, and 556
    even if the creditor could not qualify as, for example, a
    commodity broker. Sections 362(b)(6), 555 and 556 preserve the
    limitations of the right to close-out and net such contracts,
    in most cases, to entities who qualify under the Bankruptcy
    Code's counterparty limitations. However, where the
    counterparty has transactions with a total gross dollar value
    of at least $1 billion in notional or actual principal amount
    outstanding on any day during the previous 15-month period, or
    has gross mark-to-market positions of at least $100 million
    (aggregated across counterparties) in one or more agreements or
    transactions on any day during the previous 15-month period,
    sections 362(b)(6), 555 and 556 and corresponding amendments
    would permit it to exercise netting and related rights
    irrespective of its inability otherwise to satisfy those
    counterparty limitations. This change will help prevent
    systemic impact upon the markets from a single failure, and is
    derived from threshold tests contained in Regulation EE
    promulgated by the Federal Reserve Board in implementing the
    netting provisions of the Federal Deposit Insurance Corporation
    Improvement Act. It is intended that the 15-month period be
    measured with reference to the 15 months preceding the filing
    of a petition by or against the debtor.
        ``Financial participant'' is also defined to include
    ``clearing organizations'' within the meaning of FDICIA (as
    amended by the CFMA and Section 906 of the Act). This
    amendment, together with the inclusion of ``financial
    participants'' as eligible counterparties in connection with
    ``commodity contracts,'' ``forward contracts'' and ``securities
    contracts'' and the amendments made in other Sections of the
    Act to include ``financial participants'' as counterparties
    eligible for the protections in respect of ``swap agreements''
    and ``repurchase agreements,'' take into account the CFMA and
    will allow clearing organizations to benefit from the
    protections of all of the provisions of the Bankruptcy Code
    relating to these contracts and agreements. This will further
    the goal of promoting the clearing of derivatives and other
    transactions as a way to reduce systemic risk. The definition
    of ``financial participant'' (as with the other provisions of
    the Bankruptcy Code relating to ``securities contracts,''
    ``forward contracts,'' ``commodity contracts,'' ``repurchase
    agreements'' and ``swap agreements'') is not mutually
    exclusive, i.e., an entity that qualifies as a ``financial
    participant'' could also be a ``swap participant,'' ``repo
    participant,'' ``forward contract merchant,'' ``commodity
    broker,'' ``stockbroker,'' ``securities clearing agency'' and/
    or ``financial institution.''
        Section 907(c) of the Act adds to the Bankruptcy Code new
    definitions for the terms ``master netting agreement'' and
    ``master netting agreement participant.'' The definition of
    ``master netting agreement'' is designed to protect the
    termination and close-out netting provisions of cross-product
    master agreements between parties. Such an agreement may be
    used: (i) to document a wide variety of securities contracts,
    commodity contracts, forward contracts, repurchase agreements
    and swap agreements, or (ii) as an umbrella agreement for
    separate master agreements between the same parties, each of
    which is used to document a discrete type of transaction. The
    definition includes security agreements or arrangements or
    other credit enhancements related to one or more such
    agreements and clarifies that a master netting agreement will
    be treated as such even if it documents transactions that are
    not within the enumerated categories of qualifying transactions
    (but the provisions of the Bankruptcy Code relating to master
    netting agreements and the other categories of transactions
    will not apply to such other transactions). A ``master netting
    agreement participant'' is any entity that is a party to an
    outstanding master netting agreement with a debtor before the
    filing of a bankruptcy petition.
        Subsection (d) amends section 362(b) of the Bankruptcy Code
    to protect enforcement, free from the automatic stay, of setoff
    or netting provisions in swap agreements and in master netting
    agreements and security agreements or arrangements related to
    one or more swap agreements or master netting agreements. This
    provision parallels the other provisions of the Bankruptcy Code
    that protect netting provisions of securities contracts,
    commodity contracts, forward contracts, and repurchase
    agreements. Because the relevant definitions include related
    security agreements, the references to ``setoff'' in these
    provisions, as well as in section 362(b)(6) and (7) of the
    Bankruptcy Code, are intended to refer also to rights to
    foreclose on, and to set off against obligations to return,
    collateral securing swap agreements, master netting agreements,
    repurchase agreements, securities contracts, commodity
    contracts, or forward contracts. Collateral may be pledged to
    cover the cost of replacing the defaulted transactions in the
    relevant market, as well as other costs and expenses incurred
    or estimated to be incurred for the purpose of hedging or
    reducing the risks arising out of such termination. Enforcement
    of these agreements and arrangements free from the automatic
    stay is consistent with the policy goal of minimizing systemic
    risk.
        Subsection (d) also clarifies that the provisions
    protecting setoff and foreclosure in relation to securities
    contracts, commodity contracts, forward contracts, repurchase
    agreements, swap agreements, and master netting agreements free
    from the automatic stay apply to collateral pledged by the
    debtor but that cannot technically be ``held by'' the creditor,
    such as receivables and book-entry securities, and to
    collateral that has been repledged by the creditor and
    securities re-sold pursuant to repurchase agreements.
        Subsections (e) and (f) of section 907 of the Act amend
    sections 546 and 548(d) of the Bankruptcy Code to provide that
    transfers made under or in connection with a master netting
    agreement may not be avoided by a trustee except where such
    transfer is made with actual intent to hinder, delay or defraud
    and not taken in good faith. This amendment provides the same
    protections for a transfer made under, or in connection with, a
    master netting agreement as currently is provided for margin
    payments, settlement payments and other transfers received by
    commodity brokers, forward contract merchants, stockbrokers,
    financial institutions, securities clearing agencies, repo
    participants, and swap participants under sections 546 and
    548(d), except to the extent the trustee could otherwise avoid
    such a transfer made under an individual contract covered by
    such master netting agreement.
        Subsections (g), (h), (i), and (j) of section 907 clarify
    that the provisions of the Bankruptcy Code that protect: (i)
    rights of liquidation under securities contracts, commodity
    contracts, forward contracts and repurchase agreements also
    protect rights of termination or acceleration under such
    contracts, and (ii) rights to terminate under swap agreements
    also protect rights of liquidation and acceleration.
        Section 907(k) of the Act adds a new section 561 to the
    Bankruptcy Code to protect the contractual right of a master
    netting agreement participant to enforce any rights of
    termination, liquidation, acceleration, offset or netting under
    a master netting agreement. These rights include rights
    arising: (i) from the rules of a derivatives clearing
    organization, multilateral clearing organization, securities
    clearing agency, securities exchange, securities association,
    contract market, derivatives transaction execution facility or
    board of trade; (ii) under common law, law merchant; or (iii)
    by reason of normal business practice. This reflects the
    enactment of the CFMA and the current treatment of rights under
    swap agreements under section 560 of the Bankruptcy Code.
    Similar changes to reflect the enactment of the CFMA have been
    made to the definition of ``contractual right'' for purposes of
    Sections 555, 556, 559, and 560 of the Bankruptcy Code.
        Subsections (b)(2)(A) and (b)(2)(B) of new Section 561
    limit the exercise of contractual rights to net or to offset
    obligations where the debtor is a commodity broker and one leg
    of the obligations sought to be netted relates to commodity
    contracts traded on or subject to the rules of a contract
    market designated under the Commodity Exchange Act or a
    derivatives transaction execution facility registered under the
    Commodity Exchange Act. Under subsection (b)(2)(A) netting or
    offsetting is not permitted in these circumstances if the party
    seeking to net or to offset has no positive net equity in the
    commodity accounts at the debtor. Subsection (b)(2)(B) applies
    only if the debtor is a commodity broker, acting on behalf of
    its own customer, and is in turn a customer of another
    commodity broker. In that case, the latter commodity broker may
    not net or offset obligations under such commodity contracts
    with other claims against its customer, the debtor. Subsections
    (b)(2)(A) and (b)(2)(B) limit the depletion of assets available
    for distribution to customers of commodity brokers. Subsection
    (b)(2)(C) provides an exception to subsections (b)(2)(A) and
    (b)(2)(B) for cross-margining and other similar arrangements
    approved by, or submitted to and not rendered ineffective by,
    the Commodity Futures Trading Commission, as well as certain
    other netting arrangements.
        For the purposes of Bankruptcy Code sections 555, 556, 559,
    560, and 561, it is intended that the normal business practice
    in the event of a default of a party based on bankruptcy or
    insolvency is to terminate, liquidate or accelerate securities
    contracts, commodity contracts, forward contracts, repurchase
    agreements, swap agreements and master netting agreements with
    the bankrupt or insolvent party. The protection of netting and
    offset rights in sections 560 and 561 is in addition to the
    protections afforded in sections 362(b)(6), (b)(7), (b)(17),
    and (b)(28) of the Bankruptcy Code.
        Under the Act, the termination, liquidation or acceleration
    rights of a master netting agreement participant are subject to
    limitations contained in other provisions of the Bankruptcy
    Code relating to securities contracts and repurchase
    agreements. In particular, if a securities contract or
    repurchase agreement is documented under a master netting
    agreement, a party's termination, liquidation and acceleration
    rights would be subject to the provisions of the Bankruptcy
    Code relating to orders authorized under the provisions of SIPA
    or any statute administered by the SEC. In addition, the
    netting rights of a party to a master netting agreement would
    be subject to any contractual terms between the parties
    limiting or waiving netting or set off rights. Similarly, a
    waiver by a bank or a counterparty of netting or set off rights
    in connection with QFCs would be enforceable under the FDIA.
        New section 561 of the Bankruptcy Code clarifies that the
    provisions of the Bankruptcy Code related to securities
    contracts, commodity contracts, forward contracts, repurchase
    agreements, swap agreements and master netting agreements apply
    in a proceeding ancillary to a foreign insolvency proceeding
    under new section 304 of the Bankruptcy Code.
        Subsections (l) and (m) of section 907 of the Act clarify
    that the exercise of termination and netting rights will not
    otherwise affect the priority of the creditor's claim after the
    exercise of netting, foreclosure and related rights.
        Subsection (n) amends section 553 of the Bankruptcy Code to
    clarify that the acquisition by a creditor of setoff rights in
    connection with swap agreements, repurchase agreements,
    securities contracts, forward contracts, commodity contracts
    and master netting agreements cannot be avoided as a
    preference. This subsection also adds setoff of the kinds
    described in sections 555, 556, 559, 560, and 561 of the
    Bankruptcy Code to the types of setoff excepted from section
    553(b).
        Section 907(o), as well as other subsections of the Act,
    adds references to ``financial participant'' in all the
    provisions of the Bankruptcy Code relating to securities,
    forward and commodity contracts and repurchase and swap
    agreements.

    Sec. 908. Recordkeeping Requirements. Section 908 of the Act
    amends section 11(e)(8) of the Federal Deposit Insurance Act to
    explicitly authorize the FDIC, in consultation with appropriate
    Federal banking agencies, to prescribe regulations on
    recordkeeping by any insured depository institution with
    respect to QFCs only if the insured financial institution is in
    a troubled condition (as such term is defined in the FDIA).

    Sec. 909. Exemptions from Contemporaneous Execution
    Requirement. Section 909 of the Act amends FDIA section
    13(e)(2) to provide that an agreement for the collateralization
    of governmental deposits, bankruptcy estate funds, Federal
    Reserve Bank or Federal Home Loan Bank extensions of credit or
    one or more QFCs shall not be deemed invalid solely because
    such agreement was not entered into contemporaneously with the
    acquisition of the collateral or because of pledges, delivery
    or substitution of the collateral made in accordance with such
    agreement.
        The amendment codifies portions of policy statements issued
    by the FDIC regarding the application of section 13(e), which
    codifies the ``D'Oench Duhme'' doctrine. With respect to QFCs,
    this codification recognizes that QFCs often are subject to
    collateral and other security arrangements that may require
    posting and return of collateral on an ongoing basis based on
    the mark-to-market values of the collateralized transactions.
    The codification of only portions of the existing FDIC policy
    statements on these and related issues should not give rise to
    any negative implication regarding the continued validity of
    these policy statements.

    Sec. 910. Damage Measure. Section 910 of the Act adds a new
    section 562 to the Bankruptcy Code providing that damages under
    any swap agreement, securities contract, forward contract,
    commodity contract, repurchase agreement or master netting
    agreement will be calculated as of the earlier of: (i) the date
    of rejection of such agreement by a trustee, or (ii) the date
    or dates of liquidation, termination or acceleration of such
    contract or agreement.
        Section 562 provides an exception to the rules in (i) and
    (ii) if there are no commercially reasonable determinants of
    value as of such date or dates, in which case damages are to be
    measured as of the earliest subsequent date or dates on which
    there are commercially reasonable determinants of value.
    Although it is expected that in most circumstances damages
    would be measured as of the date or dates of either rejection
    or liquidation, termination or acceleration, in certain unusual
    circumstances, such as dysfunctional markets or liquidation of
    very large portfolios, there may be no commercially reasonable
    determinants of value for liquidating any such agreements or
    contracts or for liquidating all such agreements and contracts
    in a large portfolio on a single day. It is expected that
    measuring damages as of a date or dates before the date of
    liquidation, termination, or acceleration will occur only in
    very unusual circumstances.
        The party determining damages is given limited discretion
    to determine the dates as of which damages are to be measured.
    Its actions are circumscribed unless there are no
    ``commercially reasonable'' determinants of value for it to
    measure damages on the date or dates of either rejection or
    liquidation, termination or acceleration. The references to
    ``commercially reasonable'' are intended to reflect existing
    state law standards relating to a creditor's actions in
    determining damages. New section 562 provides that if damages
    are not measured as of either the date of rejection or the date
    or dates of liquidation, termination or acceleration and the
    trustee challenges the timing of the measurement of damages by
    the non-defaulting party determining the damages, then the non-
    defaulting party, rather than the trustee, has the burden of
    proving the absence of any commercially reasonable determinants
    of value.
        New section 562 is not intended to have any impact on the
    determination under the Bankruptcy Code of the timing of
    damages for contracts and agreements other than those specified
    in section 562. Also, section 562 does not apply to proceedings
    under the FDIA, and it is not intended that Section 562 have
    any impact on the interpretation of the provisions of the FDIA
    relating to timing of damages in respect of QFCs or other
    contracts.

    Sec. 911. SIPC Stay. Section 911 of the Act amends SIPA to
    provide that an order or decree issued pursuant to SIPA shall
    not operate as a stay of any right of liquidation, termination,
    acceleration, offset or netting under one or more securities
    contracts, commodity contracts, forward contracts, repurchase
    agreements, swap agreements or master netting agreements (as
    defined in the Bankruptcy Code and including rights of
    foreclosure on collateral), except that such order or decree
    may stay any right to foreclose on or dispose of securities
    (but not cash) collateral pledged by the debtor or sold by the
    debtor under a repurchase agreement or lent by the debtor under
    a securities lending agreement. A corresponding amendment to
    FDICIA is made by section 906. A creditor that was stayed in
    exercising rights against such securities would be entitled to
    post-insolvency interest to the extent of the value of such
    securities.

           TITLE X. PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN

    Sec. 1001. Permanent Reenactment of Chapter 12. Chapter 12 is a
    specialized form of bankruptcy relief available only to a
    ``family farmer with regular annual income,'' \167\ a defined
    term.\168\ This form of bankruptcy relief permits eligible
    family farmers, under the supervision of a bankruptcy
    trustee,\169\ to reorganize their debts pursuant to a repayment
    plan.\170\ The special attributes of chapter 12 make it better
    suited to meet the particularized needs of family farmers in
    financial distress than other forms of bankruptcy relief, such
    as chapter 11 \171\ and chapter 13.\172\
    ---------------------------------------------------------------------------
        \167\ 11 U.S.C. Sec. 109(f).
        \168\ 11 U.S.C. Sec. 101(19).
        \169\ 11 U.S.C. Sec. 1202.
        \170\ 11 U.S.C. Sec. 1222.
        \171\ For example, chapter 12 is typically less complex and
    expensive than chapter 11, a form of bankruptcy relief generally
    utilized to effectuate large corporate reorganizations.
        \172\ Chapter 13, a form of bankruptcy relief for individuals
    seeking to reorganize their debts, limits its eligibility to debtors
    with debts in lower amounts than permitted for eligibility purposes
    under chapter 12. Cf. 11 U.S.C. Sec. Sec. 109(e), 101(18).
    ---------------------------------------------------------------------------
        Chapter 12 was enacted on a temporary 7-year basis as part
    of the Bankruptcy Judges, United States Trustees, and Family
    Farmer Bankruptcy Act of 1986 \173\ in response to the farm
    financial crisis of the early- to mid-1980's.\174\ It was
    subsequently reenacted and extended on several occasions. The
    most recent extension, authorized as part of the Farm Security
    and Rural Investment Act of 2002, provides that chapter remains
    in effect until December 31, 2002.\175\
    ---------------------------------------------------------------------------
        \173\ Pub. L. No. 99-554, Sec. 255, 100 Stat. 3088, 3105 (1986).
        \174\ See U.S. Dept. of Agriculture, Info. Bull. No. 724-09, Issues
    in Agricultural and Rural Finance: Do Farmers Need a Separate Chapter
    in the Bankruptcy Code? (Oct. 1997).

    As one of the principal proponents of this legislation explained:
      I doubt there will be anything that we do that will have such an
    immediate impact in the grassroots of our country with respect to the
    situation that exists in most of the heartland, and that is in the
    agricultural sector. . . .

      You know, William Jennings Bryan in his famous speech, the Cross of
    Gold, almost 60 years ago [sic], stated these words: ``Destroy our
    cities and they will spring up again as if by magic; but destroy our
    farms, and the grass will grow in every city in our country.''
      This legislation will hopefully stem the tide that we have seen so
    recently in the massive bankruptcies in the family farm area.

    132 Cong. Rec. 28,147 (1986) (statement of Rep. Mike Synar (D-Okla.)).
    ---------------------------------------------------------------------------
        \175\ Pub. L. No. 107-171, Sec. 10814 (2002).
    ---------------------------------------------------------------------------
        Section 1001(a) of the Act reenacts chapter 12 of the
    Bankruptcy Code and provides that such reenactment takes effect
    as of July 1, 2005. Section 1001(b) makes a conforming
    amendment to section 302 of the Bankruptcy Judges, United
    States Trustees, and Family Farmer Bankruptcy Act of 1986. As a
    result of this provision, chapter 12 becomes a permanent form
    of relief under the Bankruptcy Code.

    Sec. 1002. Debt Limit Increase. Section 1002 of the Act amends
    section 104(b) of the Bankruptcy Code to provide for periodic
    adjustments for inflation of the debt eligibility limit for
    family farmers.

    Sec. 1003. Certain Claims Owed to Governmental Units.
    Subsection (a) of section 1003 of the Act amends section
    1222(a) of the Bankruptcy Code to add an exception with respect
    to payments to a governmental unit for a debt entitled to
    priority under section 507 if such debt arises from the sale,
    transfer, exchange, or other disposition of an asset used in
    the debtor's farming operation, but only if the debtor receives
    a discharge. Section 1003(b) amends section 1231(b) of the
    Bankruptcy Code to have it apply to any governmental unit.
    Subsection (c) provides that section 1003 becomes effective on
    the date of enactment of this Act and applies to cases
    commenced after such effective date.

    Sec. 1004. Definition of Family Farmer. Section 1004 of the Act
    amends the definition of ``family farmer'' in section 101(18)
    of the Bankruptcy Code to increase the debt eligibility limit
    from $1,500,000 to $3,237,000. It also reduces the percentage
    of the farmer's liabilities that must arise out of the debtor's
    farming operation for eligibility purposes from 80 percent to
    50 percent.

    Sec. 1005. Elimination of Requirement that Family Farmer and
    Spouse Receive over 50 Percent of Income from Farming Operation
    in Year Prior to Bankruptcy. Section 1005 of the Act amends the
    Bankruptcy Code's definition of ``family farmer'' with respect
    to the determination of the farmer's income. Current law
    provides that a debtor, in order to be eligible to be a family
    farmer, must derive a specified percentage of his or her income
    from farming activities for the taxable year preceding the
    commencement of the bankruptcy case. Section 1005 adjusts the
    threshold percentage to be met during either: (1) the taxable
    year preceding the filing of the bankruptcy case; or (2) the
    taxable year in the second and third taxable years preceding
    the filing of the bankruptcy case.

    Sec. 1006. Prohibition of Retroactive Assessment of Disposable
    Income. Section 1006 of the Act amends the Bankruptcy Code in
    two respects concerning chapter 12 plans. Section 1006(a)
    amends Bankruptcy Code section 1225(b) to permit the court to
    confirm a plan even if the distribution proposed under the plan
    equal or exceed the debtor's projected disposable income for
    that period, providing the plan otherwise satisfies the
    requirements for confirmation. Section 1006(b) amends
    Bankruptcy Code section 1229 to restrict the bases for
    modifying a confirmed chapter 12 plan. Specifically, Section
    1006(b) to provide that a confirmed chapter 12 plan may not be
    modified to increase the amount of payments due prior to the
    date of the order modifying the confirmation of the plan. Where
    the modification is based on an increase in the debtor's
    disposable income, the plan may not be modified to require
    payments to unsecured creditors in any particular month in an
    amount greater than the debtor's disposable income for that
    month, unless the debtor proposes such a modification. Section
    1006(b) further provides that a modification of a plan shall
    not require payments that would leave the debtor with
    insufficient funds to carry on the farming operation after the
    plan is completed, unless the debtor proposes such a
    modification.

    Sec. 1007. Family Fishermen. Subsection (a) of section 1007 of
    the Act amends Bankruptcy Code section 101 to add definitions
    of ``commercial fishing operation,'' ``commercial fishing
    vessel,'' ``family fisherman'' and ``family fisherman with
    regular annual income.'' The definition of ``commercial fishing
    operation'' includes the catching or harvesting of fish,
    shrimp, lobsters, urchins, seaweed, shellfish, or other aquatic
    species or products. The term ``commercial fishing vessel'' is
    defined as a vessel used by a fisher to ``carry out a
    commercial fishing operation.'' The term ``family fisherman''
    is defined as an individual engaged in a commercial fishing
    operation, with an aggregate debt limit of $1.5 million. The
    definition specifies that at least 80 percent of those debts
    must be derived from a commercial fishing operation. The
    percentage of income that must be derived from such operation
    is specified to be more than 50 percent of the individual's
    gross income for the taxable year preceding the taxable year in
    which the case was filed. Similar provisions are included for
    corporations and partnerships. The term ``family fisherman with
    regular annual income'' is defined as a family fisherman whose
    annual income is sufficiently stable and regular to enable such
    person to make payments under a chapter 12 plan. Section
    1007(b) amends Bankruptcy Code section 109 to provide that a
    family fisherman is eligible to be a debtor under chapter 12.
    Section 1007(c) amends the heading of chapter 12 to include a
    reference to family fisherman and makes conforming revisions to
    Sections 1203 and 1206.

                  TITLE XI. HEALTH CARE AND EMPLOYEE BENEFITS

    Sec. 1101. Definitions. Subsection (a) of section 1101 of the
    Act amends section 101 of the Bankruptcy Code to add a
    definition of ``health care business.'' The definition includes
    any public or private entity (without regard to whether that
    entity is for or not for profit) that is primarily engaged in
    offering to the general public facilities and services for the
    diagnosis or treatment of injury, deformity or disease; and
    surgical, drug treatment, psychiatric or obstetric care. It
    also includes the following entities: (1) a general or
    specialized hospital; (2) an ancillary ambulatory, emergency,
    or surgical treatment facility; (3) a hospice; (d) a home
    health agency; (e) other health care institution that is
    similar to an entity referred to in (a) through (d); and other
    long-term care facility. These include a skilled nursing
    facility, intermediate care facility, assisted living facility,
    home for the aged, domiciliary care facility, or health care
    institution that is related to an aforementioned facility.
    Section 1101(b) amends Bankruptcy Code section 101 to add a
    definition of ``patient.'' The term means an individual who
    obtains or receives services from a health care business.
    Section 1101(c) amends section 101 of the Bankruptcy Code to
    add a definition of ``patient records.'' The term means any
    written document relating to a patient or record recorded in a
    magnetic, optical, or other form of electronic medium. Section
    1101(d) specifies that the amendments effectuated by new
    section 101(27A) do not affect the interpretation of section
    109(b).

    Sec. 1102. Disposal of Patient Records. Section 1102 of the Act
    adds a provision to the Bankruptcy Code specifying requirements
    for the disposal of patient records in a chapter 7, 9, or 11
    case of a health care business where the trustee lacks
    sufficient funds to pay for the storage of such records in
    accordance with applicable Federal or state law. The
    requirements chiefly consist of providing notice to the
    affected patients and specifying the method of disposal for
    unclaimed records. They are intended to protect the privacy and
    confidentiality of a patient's medical records when they are in
    the custody of a health care business in bankruptcy. The
    provision specifies the following requirements:

            1. The trustee shall: (a) publish notice in one or
            more appropriate newspapers stating that if the records
            are not claimed by the patient or an insurance provider
            (if permitted under applicable law) within 365 days of
            the date of such notice, then the trustee will destroy
            such records; and (b) during the first 180 days of such
            365-day period, attempt to directly notify by mail each
            patient and appropriate insurance carrier of the
            claiming or disposing of such records.

            2. If after providing such notice patient records are
            not claimed within the specified period, the trustee
            shall, upon the expiration of such period, send a
            request by certified mail to each appropriate Federal
            agency to request permission from such agency to
            deposit the records with the agency.

            3. If after providing the notice as set forth above,
            patient records are not claimed, the trustee shall
            destroy such records as follows: (a) by shredding or
            burning, if the records are written; or (b) by
            destroying the records so that their information cannot
            be retrieved, if the records are magnetic, optical or
            electronic.

        It is anticipated that if the estate of the debtor lacks
    the funds to pay for the costs and expenses related to the
    above, the trustee may recover such costs and expenses under
    section 506(c) of the Bankruptcy Code.

    Sec. 1103. Administrative Expense Claim for Costs of Closing a
    Health Care Business and Other Administrative Expenses. Section
    1103 of the Act amends section 503(b) of the Bankruptcy Code to
    provide that the actual, necessary costs and expenses of
    closing a health care business (including the disposal of
    patient records or transferral of patients) incurred by a
    trustee, Federal agency, or a department or agency of a state
    are allowed administrative expenses.

    Sec. 1104. Appointment of Ombudsman to Act as Patient Advocate.
    Section 1104 of the Act adds a provision to the Bankruptcy Code
    requiring the court to order the appointment of an ombudsman to
    monitor the quality of patient care within 30 days after
    commencement of a chapter 7, 9, or 11 health care business
    bankruptcy case, unless the court finds that such appointment
    is not necessary for the protection of patients under the
    specific facts of the case. The ombudsman must be a
    disinterested person. If the health care business is a long-
    term care facility, a person who is serving as a State Long-
    Term Care Ombudsman of the Older Americans Act of 1965 may be
    appointed as the ombudsman in such case. The ombudsman must:
    (1) monitor the quality of patient care to the extent necessary
    under the circumstances, including interviewing patients and
    physicians; (2) report to the court, not less than 60 days from
    the date of appointment and then every 60 days thereafter, at a
    hearing or in writing regarding the quality of patient care at
    the health care business involved; and (3) notify the court by
    motion or written report (with notice to appropriate parties in
    interest) if the ombudsman determines that the quality of
    patient care is declining significantly or is otherwise being
    materially compromised. The provision requires the ombudsman to
    maintain any information obtained that relates to patients
    (including patient records) as confidential. Section 1104(b)
    amends section 330(a)(1) of the Bankruptcy Code to authorize
    the payment of reasonable compensation to an ombudsman.

    Sec. 1105. Debtor in Possession; Duty of Trustee to Transfer
    Patients. Section 1105 of the Act amends section 704(a) of the
    Bankruptcy Code to require a trustee or debtor in possession to
    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. The transferee health care
    business should be in the vicinity of the transferor health
    care business, provide the patient with services that are
    substantially similar to those provided by the transferor
    health care business, and maintain a reasonable quality of
    care.

    Sec. 1106. Exclusion from Program Participation Not Subject to
    Automatic Stay. Section 1106 amends section 362(b) of the
    Bankruptcy Code to except from the automatic stay the exclusion
    by the Secretary of Health and Human Services of a debtor from
    participation in the medicare program or other specified
    Federal health care programs.

                        TITLE XII. TECHNICAL AMENDMENTS

    Sec. 1201. Definitions. Section 1201 of the Act amends the
    definitions contained in section 101 of the Bankruptcy Code.
    Paragraphs (1), (2), (4), and (7) of section 1201 make
    technical changes to section 101 to convert each definition
    into a sentence (thereby facilitating future amendments to the
    separate paragraphs) and to redesignate the definitions in
    correct and completely numerical sequence. Paragraph (3) of
    section 1101 makes necessary and conforming amendments to cross
    references to the newly redesignated definitions.
        Paragraph (5) of section 1201 concerns single asset real
    estate debtors. A single asset real estate chapter 11 case
    presents special concerns. As the name implies, the principal
    asset in this type of case consists of some form of real
    estate, such as undeveloped land. Typically, the form of
    ownership of a single asset real estate debtor is a corporation
    or limited partnership. The largest creditor in a single asset
    real estate case is typically the secured lender who advanced
    the funds to the debtor to acquire the real property. Often, a
    single asset real estate debtor resorts to filing for
    bankruptcy relief for the sole purpose of staying an impending
    foreclosure proceeding or sale commenced by the secured lender.
    Foreclosure actions are filed when the debtor lacks sufficient
    cash flow to service the debt and maintain the property. Taxing
    authorities may also have liens against the property. Based on
    the nature of its principal asset, a single asset real estate
    debtor often has few, if any, unsecured creditors. If unsecured
    creditors exist, they may have only nominal claims against the
    single asset real estate debtor. Depending on the nature and
    ownership of any business operating on the debtor's real
    property, the debtor may have few, if any, employees.
    Accordingly, there may be little interest on behalf of
    unsecured creditors in a single asset real estate case to serve
    on a creditors' committee.
        In 1994, the Bankruptcy Code was amended to accord special
    treatment for single asset real estate debtors. It defined this
    type of debtor as a bankruptcy estate comprised of a single
    piece of real property or project, other than residential real
    property with fewer than four residential units. The property
    or project must generate substantially all of the debtor's
    gross income. A debtor that conducts substantial business on
    the property beyond that relating to its operation is excluded
    from this definition. In addition, the definition fixed a
    monetary cap. To qualify as a single asset real estate debtor,
    the debtor could not have noncontingent, liquidated secured
    debts in excess of $4 million. Subparagraph (5)(A) amends the
    definition of ``single asset real estate'' to exclude family
    farmers from this definition. Paragraph (5)(B) amends section
    101(51B) of the Bankruptcy Code to eliminate the $4 million
    debt limitation on single asset real estate. The present $4
    million cap prevents the use of the expedited relief procedure
    in many commercial property reorganizations, and effectively
    provides an opportunity for a number of debtors to abusively
    file for bankruptcy in order to obtain the protection of the
    automatic stay against their creditors. As a result of this
    amendment, creditors in more cases will be able to obtain the
    expedited relief from the automatic stay which is made
    available under section 362(d)(3) of the Bankruptcy Code.
        Paragraph (6) of section 1201, together with section 1214,
    respond to a 1997 Ninth Circuit case, in which two purchase
    money lenders (without knowledge that the debtor had recently
    filed an undisclosed chapter 11 case that was subsequently
    converted to chapter 7), funded the debtor's acquisition of an
    apartment complex and recorded their purchase-money deed of
    trust immediately following recordation of the deed to the
    debtors.\176\ Specifically, it amends the definition of
    ``transfer'' in section 101(54) of the Bankruptcy Code to
    include the ``creation of a lien.'' This amendment gives
    expression to a widely held understanding since the enactment
    of the Bankruptcy Reform Act of 1978,\177\ that is, a transfer
    includes the creation of a lien.
    ---------------------------------------------------------------------------
        \176\ Thompson v. Margen (In re McConville), 110 F.3d 47 (9th
    Cir.), cert. denied, 522 U.S. 966 (1997).
        \177\ Pub. L. No. 95-598, 92 Stat. 2549 (1978).

    Sec. 1202. Adjustment of Dollar Amounts. Bankruptcy Code
    section 104 provides for the periodic automatic adjustment of
    certain dollar amounts specified in the Code to reflect the
    change in the Consumer Price Index. Section 1202 amends
    Bankruptcy Code section 104(b) to add a reference to certain
    other monetary amounts specified in the Bankruptcy Code
    section. These include: (1) section 522(f)(3) (pertaining to
    the avoidance of certain liens on implements and other personal
    property valued at less than $5,000); (2) section 101(19A)
    (definition of family fisherman); (3) section 522(f)(4)
    (definition of household goods); (4) section 541(b) (property
    items, such as certain educational individual retirement
    accounts and tuition credit or certificate programs, that do
    not constitute property of the bankruptcy estate); (5) section
    547(c)(9) (limits the avoidance of a preferential transfer,
    under certain circumstances); (6) section 1322(d) (concerning
    the applicability of the needs-based test to chapter 13 debtors
    with above median incomes); (7) section 1325(b) (determination
    of disposable income for chapter 13 debtors with above median
    incomes); and (8) section 1326(b)(3) (payments to a chapter 7
    trustee in a chapter 13 case). In addition, the provision adds
    a reference to section 1409(b) of title 28 of the United States
    Code, which pertains to the venue of proceedings to recover a
    ---------------------------------------------------------------------------
    money judgment or property.

    Sec. 1203. Extension of Time. Section 1203 of the Act makes a
    technical amendment to correct a reference error described in
    amendment notes contained in the United States Code. As
    specified in the amendment note relating to subsection (c)(2)
    of section 108 of the Bankruptcy Code, the amendment made by
    section 257(b)(2)(B) of Public Law 99-554 could not be executed
    as stated.

    Sec. 1204. Technical Amendments. Section 1204 of the Act makes
    technical amendments to Bankruptcy Code sections 109(b)(2) (to
    strike an statutory cross reference), 541(b)(2) (to add ``or''
    to the end of this provision), and 522(b)(1) (to replace
    ``product'' with ``products'').

    Sec. 1205. Penalty for Persons Who Negligently or Fraudulently
    Prepare Bankruptcy Petitions. Section 1205 of the Act amends
    section 110(j)(4) of the Bankruptcy Code to change the
    reference to attorneys from the singular possessive to the
    plural possessive.

    Sec. 1206. Limitation on Compensation of Professional Persons.
    Section 328(a) of the Bankruptcy Code provides that a trustee
    or a creditors' and equity security holders' committee may,
    with court approval, obtain the services of a professional
    person on any reasonable terms and conditions of employment,
    including on a retainer, on an hourly basis, or on a contingent
    fee basis. Section 1206 of the Act amends section 328(a) to
    include compensation ``on a fixed or percentage fee basis'' in
    addition to the other specified forms of reimbursement.

    Sec. 1207. Effect of Conversion. Section 1207 of the Act makes
    a technical correction in section 348(f)(2) of the Bankruptcy
    Code to clarify that the first reference to property, like the
    subsequent reference to property, is a reference to property of
    the estate.

    Sec. 1208. Allowance of Administrative Expenses. Section 1208
    of the Act amends section 503(b)(4) of the Bankruptcy Code to
    limit the types of compensable professional services rendered
    by an attorney or accountant that can qualify as administrative
    expenses in a bankruptcy case. Expenses for attorneys or
    accountants incurred by individual members of creditors' or
    equity security holders' committees are not recoverable, but
    expenses incurred for such professional services incurred by
    such committees themselves would be.

    Sec. 1209. Exceptions to Discharge. Section 1209 of the Act
    amends section 523(a) of the Bankruptcy Code to correct a
    technical error in the placement of paragraph (15), which was
    added to section 523 by section 304(e)(1) of the Bankruptcy
    Reform Act of 1994. Section 1209 also amends section 523(a)(9),
    which makes nondischargeable any debt resulting from death or
    personal injury arising from the debtor's unlawful operation of
    a motor vehicle while intoxicated, to add ``watercraft, or
    aircraft'' after ``motor vehicle.'' Neither additional term
    should be defined or included as a ``motor vehicle'' in section
    523(a)(9) and each is intended to comprise unpowered as well as
    motor-powered craft. Congress previously made the policy
    judgment that the equities of persons injured by drunk drivers
    outweigh the responsible debtor's interest in a fresh start,
    and here clarifies that the policy applies not only on land but
    also on the water and in the air. Viewed from a practical
    standpoint, this provision closes a loophole that gives
    intoxicated watercraft and aircraft operators preferred
    treatment over intoxicated motor vehicle drivers and denies
    victims of alcohol and drug related boat and plane accidents
    the same rights accorded to automobile accident victims under
    current law. Finally, this section corrects a grammatical error
    in section 523(e).

    Sec. 1210. Effect of Discharge. Section 1210 of the Act makes
    technical amendments to correct errors in section 524(a)(3) of
    the Bankruptcy Code caused by section 257(o)(2) of Public Law
    99-554 and section 501(d)(14)(A) of Public Law 103-394.\178\
    ---------------------------------------------------------------------------
        \178\ For a description of these errors, see the appropriate
    footnote and amendment notes in the United States Code.

    Sec. 1211. Protection Against Discriminatory Treatment. Section
    1211 of the Act conforms a reference to its antecedent
    reference in section 525(c) of the Bankruptcy Code. The
    omission of ``student'' before ``grant'' in the second place it
    appears in section 525(c) made possible the interpretation that
    a broader limitation on lender discretion was intended, so that
    no loan could be denied because of a prior bankruptcy if the
    lending institution was in the business of making student
    loans. Section 1211 is intended to make clear that lenders
    involved in making government guaranteed or insured student
    loans are not barred by this Bankruptcy Code provision from
    denying other types of loans based on an applicant's bankruptcy
    history; only student loans and grants, therefore, cannot be
    ---------------------------------------------------------------------------
    denied under section 525(c) because of a prior bankruptcy.

    Sec. 1212. Property of the Estate. Production payments are
    royalties tied to the production of a certain volume or value
    of oil or gas, determined without regard to production costs.
    They typically would be paid by an oil or gas operator to the
    owner of the underlying property on which the oil or gas is
    found. Under section 541(b)(4)(B)(ii) of the Bankruptcy Code,
    added by the Bankruptcy Reform Act of 1994, production payments
    are generally excluded from the debtor's estate, provided they
    could be included only by virtue of section 542 of the
    Bankruptcy Code, which relates generally to the obligation of
    those holding property which belongs in the estate to turn it
    over to the trustee. Section 1212 of the Act adds to this
    proviso a reference to section 365 of the Bankruptcy Code,
    which authorizes the trustee to assume or reject an executory
    contract or unexpired lease. It thereby clarifies the original
    Congressional intent to generally exclude production payments
    from the debtor's estate.

    Sec. 1213. Preferences. Section 547 of the Bankruptcy Code
    authorizes a trustee to avoid a preferential payment made to a
    creditor by a debtor within 90 days of filing, whether the
    creditor is an insider or an outsider. To address the concern
    that a corporate insider (such as an officer or director who is
    a creditor of his or her own corporation) has an unfair
    advantage over outside creditors, section 547 also authorizes a
    trustee to avoid a preferential payment made to an insider
    creditor between 90 days and one year before filing. Several
    recent cases, including DePrizio,\179\ allowed the trustee to
    ``reach-back'' and avoid a transfer to a noninsider creditor
    made within the 90-day to one-year time frame if an insider
    benefitted from the transfer in some way. This had the effect
    of discouraging lenders from obtaining loan guarantees, lest
    transfers to the lender be vulnerable to recapture by reason of
    the debtor's insider relationship with the loan guarantor.
    Section 202 of the Bankruptcy Reform Act of 1994 addressed the
    DePrizio problem by inserting a new section 550(c) into the
    Bankruptcy Code to prevent avoidance or recovery from a
    noninsider creditor during the 90-day to one-year period even
    though the transfer to the noninsider benefitted an insider
    creditor. The 1994 amendments, however, failed to make a
    corresponding amendment to section 547, which deals with the
    avoidance of preferential transfers. As a result, a trustee
    could still utilize section 547 to avoid a preferential lien
    given to a noninsider bank, more than 90 days but less than one
    year before bankruptcy, if the transfer benefitted an insider
    guarantor of the debtor's debt. Accordingly, section 1213 of
    the Act makes a perfecting amendment to section 547 to provide
    that if the trustee avoids a transfer given by the debtor to a
    noninsider for the benefit of an insider creditor between 90
    days and one year before filing, that avoidance is valid only
    with respect to the insider creditor. Thus both the previous
    amendment to section 550 and the perfecting amendment to
    section 547 protect the noninsider from the avoiding powers of
    the trustee exercised with respect to transfers made during the
    90-day to one year pre-filing period. This provision is
    intended to apply to any case, including any adversary
    proceeding, that is pending or commenced on or after the date
    of enactment of this Act.
    ---------------------------------------------------------------------------
        \179\ Levit v. Ingersoll Rand Fin. Corp., 874 F.2d 1186 (7th Cir.
    1989); see also Ray v. City Bank and Trust Co. (In re C-L Cartage Co.),
    899 F.2d 1490 (6th Cir. 1990); Manufacturers Hanover Leasing Corp. v.
    Lowrey (In re Robinson Bros. Drilling, Inc.), 892 F.2d 850 (10th Cir.
    1989).

    Sec. 1214. Postpetition Transactions. Section 1214 of the Act
    amends section 549(c) of the Bankruptcy Code to clarify its
    application to an interest in real property. This amendment
    should be construed in conjunction with section 1201 of the
    Act.\180\
    ---------------------------------------------------------------------------
        \180\ See supra notes 86 and 176 and accompanying text.

    Sec. 1215. Disposition of Property of the Estate. Section 1215
    of the Act amends section 726(b) of the Bankruptcy Code to
    strike an erroneous reference.\181\
    ---------------------------------------------------------------------------
        \181\ For a description of the error, see the appropriate footnote
    and amendment notes in the United States Code.

    Sec. 1216. General Provisions. Section 1216 of the Act amends
    section 901(a) of the Bankruptcy Code to correct an omission in
    a list of sections applicable to cases under chapter 9 of title
    ---------------------------------------------------------------------------
    11 of the United States Code.

    Sec. 1217. Abandonment of Railroad Line. Section 1217 of the
    Act amends section 1170(e)(1) of the Bankruptcy Code to reflect
    the fact that section 11347 of title 49 of the United States
    Code was repealed by section 102(a) of Public Law 104-88 and
    that provisions comparable to section 11347 appear in section
    11326(a) of title 49 of the United States Code.

    Sec. 1218. Contents of Plan. Section 1218 of the Act amends
    section 1172(c)(1) of the Bankruptcy Code to reflect the fact
    that section 11347 of title 49 of the United States Code was
    repealed by section 102(a) of Public Law 104-88 and that
    provisions comparable to section 11347 appear in section
    11326(a) of title 49 of the United States Code.

    Sec. 1219. Bankruptcy Cases and Proceedings. Section 1219 of
    the Act amends section 1334(d) of title 28 of the United States
    Code to make clarifying references.\182\
    ---------------------------------------------------------------------------
        \182\ For a description of the errors, see the appropriate footnote
    and amendment notes in the United States Code.

    Sec. 1220. Knowing Disregard of Bankruptcy Law or Rule. Section
    1220 of the Act amends section 156(a) of title 18 of the United
    States Code to make stylistic changes and correct a reference
    ---------------------------------------------------------------------------
    to the Bankruptcy Code.

    Sec. 1221. Transfers Made by Nonprofit Charitable Corporations.
    Section 1221 of the Act amends section 363(d) of the Bankruptcy
    Code to restrict the authority of a trustee to use, sell, or
    lease property by a nonprofit corporation or trust. First, the
    use, sell or lease of such property must be in accordance with
    applicable nonbankruptcy law and to the extent it is not
    inconsistent with any relief granted under certain specified
    provisions of section 362 of the Bankruptcy Code concerning the
    applicability of the automatic stay. Second, section 1221
    imposes similar restrictions with regard to plan confirmation
    requirements for chapter 11 cases. Third, it amends section 541
    of the Bankruptcy Code to provide that any property of a
    bankruptcy estate in which the debtor is a nonprofit
    corporation (as described in certain provisions of the Internal
    Revenue Code) may not be transferred to an entity that is not
    such a corporation, but only under the same conditions that
    would apply if the debtor was not in bankruptcy. The amendments
    made by this section apply to cases pending on the date of
    enactment or to cases filed after such date. Section 1221
    provides that a court may not confirm a plan without
    considering whether this provision would substantially affect
    the rights of a party in interest who first acquired rights
    with respect to the debtor postpetition. Nothing in this
    provision may be construed to require the court to remand or
    refer any proceeding, issue, or controversy to any other court
    or to require the approval of any other court for the transfer
    of property.

    Sec. 1222. Protection of Valid Purchase Money Security
    Interests. Section 1222 of the Act extends the applicable
    perfection period for a security interest in property of the
    debtor in section 547(c)(3)(B) of the Bankruptcy Code from 20
    to 30 days.

    Sec. 1223. Bankruptcy Judgeships. The substantial increase in
    bankruptcy case filings clearly creates a need for additional
    bankruptcy judgeships. In the 105th Congress, the House
    responded to this need by passing H.R. 1596, which would have
    created additional permanent and temporary bankruptcy
    judgeships and extended an existing temporary position. Section
    1223 extends four existing temporary judgeships and authorizes
    28 additional bankruptcy judgeships. In determining the
    official duty stations of bankruptcy judges and places of
    holding court pursuant to section 152(b)(1) of title 28 of the
    United States Code regarding the additional judgeships
    authorized in this section, the Judicial Conference should
    consider the convenience of the parties, the district's
    geography, and factors that would facilitate better
    administration of cases, such as may be presented in the
    Eastern District of California with respect to Bakersfield, for
    example.

    Sec. 1224. Compensating Trustees. Section 1224 of the Act
    amends section 1326 of the Bankruptcy Code to provide that if a
    chapter 7 trustee has been allowed compensation as a result of
    the conversion or dismissal of the debtor's prior case pursuant
    to section 707(b) and some portion of that compensation remains
    unpaid, the amount of any such unpaid compensation must be
    repaid in the debtor's subsequent chapter 13 case. This payment
    must be prorated over the term of the plan and paid on a
    monthly basis. The amount of the monthly payment may not exceed
    the greater of $25 or the amount payable to unsecured
    nonpriority creditors as provided by the plan, multiplied by
    five percent and the result divided by the number of months of
    the plan.
        Sec. 1225. Amendment to Section 362 of Titile11, United
    States Code. Section 1225 of the Act amends section 362(b) of
    the Bankruptcy Code to except from the automatic stay the
    creation or perfection of a statutory lien for an ad valorem
    property tax or for a special tax or special assessment on real
    property (whether or not ad valorem) that is imposed by a
    governmental unit, if such tax or assessment becomes due after
    the filing of the petition.

    Sec. 1226. Judicial Education. Section 1226 of the Act requires
    the Director of the Federal Judicial Center, in consultation
    with the Director of the Executive Office for United States
    Trustees, to develop materials and conduct training as may be
    useful to the courts in implementing this Act, including the
    needs-based reforms under section 707(b) (as amended by this
    Act) and amendments pertaining to reaffirmation agreements.

    Sec. 1227. Reclamation. Section 1227 of the Act amends section
    546(c) of the Bankruptcy Code to provide that the rights of a
    trustee under sections 544(a), 545, 547, and 549 are subject to
    the rights of a seller of goods to reclaim goods sold in the
    ordinary course of business to the debtor if: (1) the debtor,
    while insolvent, received these goods not later than 45 days
    prior to the commencement of the case, and (2) written demand
    for reclamation of the goods is made not later than 45 days
    after receipt of such goods by the debtor or not later than 20
    days after the commencement of the case, if the 45-day period
    expires after the commencement of the case. If the seller fails
    to provide notice in the manner provided in this provision, the
    seller may still assert the rights set forth in section
    503(b)(7) of the Bankruptcy Code. Section 1227(b) amends
    Bankruptcy Code section 503(b) to provide that the value of any
    goods received by a debtor not later than within 20 days prior
    to the commencement of a bankruptcy case in which the goods
    have been sold to the debtor in the ordinary course of the
    debtor's business is an allowed administrative expense.

    Sec. 1228. Providing Requested Tax Documents to the Court.
    Subsection (a) of section 1228 of the Act provides that the
    court may not grant a discharge to an individual in a case
    under chapter 7 unless requested tax documents have been
    provided to the court. Section 1228(b) similarly provides that
    the court may not confirm a chapter 11 or 13 plan unless
    requested tax documents have been filed with the court. Section
    1228(c) directs the court to destroy documents submitted in
    support of a bankruptcy claim not sooner than three years after
    the date of the conclusion of a bankruptcy case filed by an
    individual debtor under chapter 7, 11, or 13. In the event of a
    pending audit or enforcement action, the court may extend the
    time for destruction of such requested tax documents.

    Sec. 1229. Encouraging Creditworthiness. Subsection (a) of
    section 1229 of the Act expresses the sense of the Congress
    that certain lenders may sometimes offer credit to consumers
    indiscriminately and that resulting consumer debt may be a
    major contributing factor leading to consumer insolvency.
    Section 1229(b) directs the Board of Governors of the Federal
    Reserve to study certain consumer credit industry solicitation
    and credit granting practices as well as the effect of such
    practices on consumer debt and insolvency. The specified
    practices involve the solicitation and extension of credit on
    an indiscriminate basis that encourages consumers to accumulate
    additional debt and where the lender fails to ensure that the
    consumer borrower is capable of repaying the debt. Section
    1229(c) requires the study described in subsection (b) to be
    prepared within 12 months from the date of the Act's enactment.
    This provision authorizes the Board to issue regulations
    requiring additional disclosures to consumers and permits it to
    undertake any other actions consistent with its statutory
    authority, which are necessary to ensure responsible industry
    practices and to prevent resulting consumer debt and
    insolvency.

    Sec. 1230. Property No Longer Subject to Redemption. Section
    1230 of the Act amends section 541(b) of the Bankruptcy Code to
    provide that, under certain circumstances, an interest of the
    debtor in tangible personal property (other than securities, or
    written or printed evidences of indebtedness or title) that the
    debtor pledged or sold as collateral for a loan or advance of
    money given by a person licensed under law to make such loan or
    advance is not property of the estate. Subject to subchapter
    III of chapter 5 of the Bankruptcy Code, the provision applies
    where: (1) the property is in the possession of the pledgee or
    transferee; (2) the debtor has no obligation to repay the
    money, redeem the collateral, or buy back the property at a
    stipulated price; and (3) neither the debtor nor the trustee
    have exercised any right to redeem provided under the contract
    or State law in a timely manner as provided under state law and
    section 108(b) of the Bankruptcy Code.

    Sec. 1231. Trustees. Section 1231 of the Act establishes a
    series of procedural protections for chapter 7 and chapter 13
    trustees concerning final agency decisions relating to trustee
    appointments and future case assignments. Section 1231(a)
    amends section 586(d) of title 28 of the United States Code to
    allow a chapter 7 or chapter 13 trustee to obtain judicial
    review of such decisions by commencing an action in the United
    States district court after the trustee exhausts all available
    administrative remedies. Unless the trustee elects to have an
    administrative hearing on the record, the trustee is deemed to
    have exhausted all administrative remedies under this provision
    if the agency fails to make a final agency decision within 90
    days after the trustee requests an administrative remedy. The
    provision requires the Attorney General to promulgate
    procedures to implement this provision. It further provides
    that the agency's decision must be affirmed by the district
    court unless it is unreasonable and without cause based on the
    administrative record before the agency.
        Section 1231(b) amends section 586(e) of title 28 of the
    United States Code to permit a chapter 13 trustee to obtain
    judicial review of certain final agency actions relating to
    claims for actual, necessary expenses under section 586(e). The
    trustee may commence an action in the United States district
    court where the trustee resides. The agency's decision must be
    affirmed by the district court unless it is unreasonable and
    without cause based on the administrative record before the
    agency. It directs the Attorney General to prescribe procedures
    to implement this provision.

    Sec. 1232. Bankruptcy Forms. Section 1232 of the Act amends
    section 2075 of title 28 of the United States Code to a form to
    be prescribed for the statement specified under section
    707(b)(2)(C) of the Bankruptcy Code and to promulgate general
    rules on the content of such statement.

    Sec. 1233. Direct Appeals of Bankruptcy Matters to Courts of
    Appeals. Under current law, appeals from decisions rendered by
    the bankruptcy court are either heard by the district court or
    a bankruptcy appellate panel. In addition to the time and cost
    factors attendant to the present appellate system, decisions
    rendered by a district court as well as a bankruptcy appellate
    panel are generally not binding and lack stare decisis value.
        To address these problems, section 1233 of the Act amends
    section 158(d) of title 28 to establish a procedure to
    facilitate appeals of certain decisions, judgments, orders and
    decrees of the bankruptcy courts to the circuit courts of
    appeals by means of a two-step certification process. The first
    step is a certification by the bankruptcy court, district
    court, or bankruptcy appellate panel (acting on its own motion
    or on the request of a party, or the appellants and appellees
    acting jointly). Such certification must be issued by the lower
    court if: (1) the bankruptcy court, district court, or
    bankruptcy appellate panel determines that one or more of
    certain specified standards are met; or (2) a majority in
    number of the appellants and a majority in number of the
    appellees request certification and represent that one or more
    of the standards are met. The second step is authorization by
    the circuit court of appeals. Jurisdiction for the direct
    appeal would exist in the circuit court of appeals only if the
    court of appeals authorizes the direct appeal.
        This procedure is intended to be used to settle unresolved
    questions of law where there is a need to establish clear
    binding precedent at the court of appeals level, where the
    matter is one of public importance, where there is a need to
    resolve conflicting decisions on a question of law, or where an
    immediate appeal may materially advance the progress of the
    case or proceeding. The courts of appeals are encouraged to
    authorize direct appeals in these circumstances. While fact-
    intensive issues may occasionally offer grounds for
    certification even when binding precedent already exists on the
    general legal issue in question, it is anticipated that this
    procedure will rarely be used in that circumstance or in an
    attempt to bring to the circuit courts of appeals matters that
    can appropriately be resolved initially by district court
    judges or bankruptcy appellate panels.

    Sec. 1234. Involuntary Cases. Section 1234 of the Act amends
    the Bankruptcy Code's criteria for commencing an involuntary
    bankruptcy case. Current law renders a creditor ineligible if
    its claim is contingent as to liability or the subject of a
    bona fide dispute. This provision amends section 303(b)(1) to
    specify that a creditor would be ineligible to file an
    involuntary petition if the creditor's claim was the subject of
    a bona fide dispute as to liability or amount. It further
    provides that the claims needed to meet the monetary threshold
    must be undisputed. The provision makes a conforming revision
    to section 303(h)(1). Section 1234 becomes effective on the
    date of enactment of this Act and applies to cases commenced
    before, on, and after such date.

    Sec. 1235. Federal Election Law Fines and Penalties as
    Nondischargeable Debt. Section 1235 of the Act amends section
    523(a) of the Bankruptcy Code to make debts incurred to pay
    fines or penalties imposed under Federal election law
    nondischargeable.

                     TITLE XIII. CONSUMER CREDIT DISCLOSURE

    Sec. 1301. Enhanced Disclosures under an Open End Credit Plan.
    Section 1301 of the Act amends section 127(b) of the Truth in
    Lending Act to mandate the inclusion of certain specified
    disclosures in billing statements with respect to various open
    end credit plans. In general, these statements must contain an
    example of the time it would take to repay a stated balance at
    a specified interest rate. In addition, they must warn the
    borrower that making only the minimum payment will increase the
    amount of interest that must be paid and the time it takes to
    repay the balance. Further, a toll-free telephone number must
    be provided where the borrower can obtain an estimate of the
    time it would take to repay the balance if only minimum
    payments are made. With respect to a creditor whose compliance
    with title 15 of the United States Code is enforced by the
    Federal Trade Commission (FTC), the billing statement must
    advise the borrower to contact the FTC at a toll-free telephone
    number to obtain an estimate of the time it would take to repay
    the borrower's balance. Section 1301(a) permits the creditor to
    substitute an example based on a higher interest rate. As
    necessary, the provision requires the Board of Governors of the
    Federal Reserve System (``Board''), to periodically recalculate
    by rule the interest rate and repayment periods specified in
    Section 1301(a). With respect to the toll-free telephone
    number, section 1301(a) permits a third party to establish and
    maintain it. Under certain circumstances, the toll-free number
    may connect callers to an automated device.
        For a period not to exceed 24 months from the effective
    date of the Act, the Board is required to establish and
    maintain a toll-free telephone number (or provide a toll-free
    telephone number established and maintained by a third party)
    for use by creditors that are depository institutions (as
    defined in section 3 of the Federal Deposit Insurance Act),
    including a Federal or state credit union (as defined in
    section 101 of the Federal Credit Union Act), with total assets
    not exceeding $250 million. Not later than six months prior to
    the expiration of the 24-month period, the Board must submit a
    report on this program to the Committee on Banking, Housing,
    and Urban Affairs of the Senate, and the Committee on Financial
    Services of the House of Representatives. In addition, section
    1301(a) requires the Board to establish a detailed table
    illustrating the approximate number of months that it would
    take to repay an outstanding balance if a consumer pays only
    the required minimum month payments and if no other advances
    are made. The table should reflect a significant number of
    different annual percentage rates, and account balances,
    minimum payment amounts. The Board must also promulgate
    regulations providing instructional guidance regarding the
    manner in which the information contained in the tables should
    be used to respond to a request by an obligor under this
    provision. Section 1301(a) provides that the disclosure
    requirements of this provision are inapplicable to any charge
    card account where the primary purpose of which is to require
    payment of charges in full each month.
        Section 1301(b)(1) requires the Federal Reserve Board to
    promulgate regulations implementing section 1301(a)'s
    amendments to section 127. Section 1301(b)(2) specifies that
    the effective date of the amendments under subsection (a) and
    the regulations required under this provision shall not take
    effect until the later of 18 months after the date of enactment
    of this Act or 12 months after the publication of final
    regulations by the Board.
        Section 1301(c) authorizes the Federal Reserve Board to
    conduct a study to determine the types of information available
    to potential borrowers from consumer credit lending
    institutions regarding factors qualifying potential borrowers
    for credit, repayment requirements, and the consequences of
    default. The provision specifies the factors that should be
    considered. The study's findings must be submitted to Congress
    and include recommendations for legislative initiatives, based
    on the Board's findings.

    Sec. 1302. Enhanced Disclosure for Credit Extensions Secured by
    a Dwelling. Subsection (a)(1) of section 1302 of the Act amends
    section 127A(a)(13) of the Truth in Lending Act to require a
    statement in any case in which the extension of credit exceeds
    the fair market value of a dwelling specifying that 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. Section 1302(a)(2)
    amends section 147(b) of the Truth in Lending Act to require an
    advertisement relating to an extension of credit that may
    exceed the fair market value of a dwelling and such
    advertisement is disseminated in paper form to the public or
    through the Internet (as opposed to dissemination by radio or
    television) to include a specified statement. The statement
    must disclose that 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 that the consumer should consult a tax advisor for further
    information regarding the deductibility of interest and
    charges.
        With respect to non-open end credit extensions, section
    1302(b)(1) amends section 128 of the Truth in Lending Act to
    require that a consumer receive a specified statement at the
    time he or she applies for credit with respect to a consumer
    credit transaction secured by the consumer's principal dwelling
    and where the credit extension may exceed the fair market value
    of the dwelling. The statement must disclose that the interest
    on the portion of the credit extension that exceeds the
    dwelling's fair market value is not tax deductible for Federal
    income tax purposes and that the consumer should consult a tax
    advisor for further information regarding the deductibility of
    interest and charges. Section 1302(b)(2) requires certain
    advertisements disseminated in paper form to the public or
    through the Internet that relate to a consumer credit
    transaction secured by a consumer's principal dwelling where
    the extension of credit may exceed the dwelling's fair market
    value to contain specified statements. These statements advise
    that 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 that the
    consumer should consult a tax advisor for further information
    regarding the deductibility of interest and charges.
        Section 1302(c)(1) requires the Federal Reserve Board to
    promulgate regulations implementing the amendments effectuated
    by this provision. Section 1302(c)(2) provides that these
    regulations shall not take effect until the later of 12 months
    following the Act's enactment date or 12 months after the date
    of publication of such final regulations by the Board.

    Sec. 1303. Disclosures Related to ``Introductory Rates.''
    Subsection (a) of section 1303 of the Act amends section 127(c)
    of the Truth in Lending Act by adding a provision to specify
    further requirements for applications, solicitations and
    related materials that are subject to section 127(c)(1). With
    respect to an application or solicitation to open a credit card
    account and all promotional materials accompanying such
    application or solicitation involving an ``introductory rate''
    offer, such materials must do the following if they offer a
    temporary annual percentage rate of interest:

            1. the term ``introductory'' in immediate proximity to
            each listing of the temporary annual percentage
            interest rate applicable to such account;

            2. if the annual percentage interest rate that will
            apply after the end of the temporary rate period will
            be a fixed rate, 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 must be clearly and conspicuously stated in a
            prominent location closely proximate to the first
            listing of the temporary annual percentage rate;

            3. if the annual percentage rate that will apply after
            the end of the temporary rate period will vary in
            accordance with an index, 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 60 days before the date of mailing
            of the application or solicitation must be clearly and
            conspicuously stated in a prominent location closely
            proximate to the first listing of the temporary annual
            percentage rate.

        The second and third provisions described above do not
    apply 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. With
    respect to an application or solicitation to open a credit card
    account for which disclosure is required pursuant to section
    127(c)(1) of the Truth in Lending Act, section 1303(a)
    specifies that certain statements be made if the rate of
    interest is revocable under any circumstance or upon any event.
    The statements must clearly and conspicuously appear in a
    prominent manner on or with the application or solicitation.
    The disclosures include a general description of the
    circumstances that may result in the revocation of the
    temporary annual percentage rate and an explanation of the type
    of interest rate that will apply upon revocation of the
    temporary rate.
        To implement this provision, section 1303(b) amends section
    127(c) of the Truth in Lending Act to define various relevant
    terms and requires the Board to promulgate regulations. The
    provision does not become effective until the earlier of 12
    months after the Act's enactment date or 12 months after the
    date of publication of such final regulations.

    Sec. 1304. Internet-Based Credit Card Solicitations. Subsection
    (a) of section 1304 of the Act amends section 127(c) of the
    Truth in Lending Act to require any solicitation to open a
    credit card account for an open end consumer credit plan
    through the Internet or other interactive computer service to
    clearly and conspicuously include the disclosures required
    under section 127(c)(1)(A) and (B). It also specifies that the
    disclosure required pursuant to section 127(c)(1)(A) be readily
    accessible to consumers in close proximity to the solicitation
    and be updated regularly to reflect current policies, terms,
    and fee amounts applicable to the credit card account. Section
    1304(a) defines terms relevant to the Internet.
        Section 1304(b) requires the Federal Reserve Board to
    promulgate regulations implementing this provision. It also
    provides that the amendments effectuated by section 1304 do not
    take effect until the later of 12 months after the Act's
    enactment date or 12 months after the date of publication of
    such regulations.

    Sec. 1305. Disclosures Related to Late Payment Deadlines and
    Penalties. Subsection (a) of section 1305 of the Act amends
    section 127(b) of the Truth in Lending Act to provide that if a
    late payment fee is to be imposed due to the obligor's failure
    to make payment on or before a required payment due date, the
    billing statement must specify the date on which that payment
    is due (or if different the earliest date on which a late
    payment fee may be charged) and the amount of the late payment
    fee to be imposed if payment is made after such date.
        Section 1305(b) requires the Federal Reserve Board to
    promulgate regulations implementing this provision. The
    amendments effectuated by this provision and the regulations
    promulgated thereunder shall not take effect until the later of
    12 months after the Act's enactment date or 12 months after the
    date of publication of the regulations.

    Sec. 1306. Prohibition on Certain Actions for Failure to Incur
    Finance Charges. Subsection (a) of section 1306 of the Act
    amends section 127 of the Truth in Lending Act to add a
    provision prohibiting a creditor of an open end consumer credit
    plan from terminating an account prior to its expiration date
    solely because the consumer has not incurred finance charges on
    the account. The provision does not prevent the creditor from
    terminating such account for inactivity for three or more
    consecutive months.
        Section 1306(b) requires the Federal Reserve Board to
    promulgate regulations implementing the amendments effectuated
    by section 1306(a) and provides that they do not become
    effective until the later of 12 months after the Act's
    enactment date or 12 months after the date of publication of
    such final regulations.

    Sec. 1307. Dual Use Debit Card. Subsection (a) of section 1307
    of the act provides that the Federal Reserve Board may conduct
    a study and submit a report to Congress 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. The report must include recommendations
    for legislative initiatives, if any, based on its findings.
        Section 1307(b) provides that the Federal Reserve Board, in
    preparing its report, may include analysis of section 909 of
    the Electronic Fund Transfer Act to the extent this provision
    is in effect at the time of the report and the implementing
    regulations. In addition, the analysis may pertain to whether
    any voluntary industry rules have enhanced or may enhance the
    level of protection afforded consumers in connection with such
    unauthorized use liability and whether amendments to the
    Electronic Fund Transfer Act or implementing regulations 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. Section 1308 of the Act directs the Board
    of Governors of the Federal Reserve to study the impact that
    the extension of credit to dependents (defined under the
    Internal Revenue Code of 1986) who are enrolled in
    postsecondary educational institutions has on the rate of
    bankruptcy cases filed. The report must be submitted to the
    Senate and House of Representatives no later than one year from
    the Act's enactment date.

    Sec. 1309. Clarification of Clear and Conspicuous. Subsection
    (a) of section 1309 of the Act requires the Board (in
    consultation with other Federal banking agencies, the National
    Credit Union Administration Board, and the Federal Trade
    Commission) to promulgate regulations not later than six months
    after the Act's enactment date to provide guidance on the
    meaning of the term ``clear and conspicuous'' as it is used in
    section 127(b)(11)(A), (B) and (C) and section 127(c)(6)(A)(ii)
    and (iii) of the Truth in Lending Act.
        Section 1309(b) provides that regulations promulgated under
    section 1309(a) shall include examples of clear and conspicuous
    model disclosures for the purpose of disclosures required under
    the Truth in Lending Act provisions set forth therein.
        Section 1309(c) requires the Federal Reserve Board, in
    promulgating regulations under this provision, to ensure that
    the clear and conspicuous standard required for disclosures
    made under the Truth in Lending Act provisions set forth in
    section 1309(a) can be implemented in a manner that results in
    disclosures which are reasonably understandable and designed to
    call attention to the nature and significance of the
    information in the notice.

                TITLE XIV. PREVENTING CORPORATE BANKRUPTCY ABUSE

    Sec. 1401. Employee Wage and Benefit Priorities. Section 1401
    of the Act amends Bankruptcy Code section 507(a) to provide
    heightened protections for employees by increasing 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.
    As few employees will continue working without pay for an
    extended period, the principal effect of extending the time
    period to 180 days is that a greater portion of unpaid
    vacation, severance, and sick leave pay will be entitled to
    priority payment.

    Sec. 1402. Fraudulent Transfers and Obligations. Section 1402
    of the Act amends section 548 of the Bankruptcy Code to enhance
    the recovery of avoidable transfers and excessive prepetition
    compensation, such as bonuses, paid to insiders of a debtor. It
    effectuates two changes to current law that would make it
    easier for a trustee to avoid pre-petition transfers. First,
    section 1402(1) extends the one-year reachback period for
    fraudulent transfers to two years. Second, section 1402(2)
    amends Bankruptcy Code section 548(a) to clarify that it
    permits the recovery of any transfer to or an obligation
    incurred for the benefit of an insider under an employment
    contract, under certain conditions. In addition, section 1402
    adds a new provision to section 548 authorizing a bankruptcy
    trustee to avoid any transfer of an interest of the debtor in
    property that was made on or within the ten-year period
    preceding the filing of the debtor's bankruptcy case if: (a)
    the transfer was made to a self-settled trust or similar
    device; (b) the transfer was made by the debtor; (c) the debtor
    is a beneficiary of such trust or similar device; and (d) the
    debtor made such transfer with actual intent to hinder, delay,
    or defraud any entity to which the debtor was or became, on or
    after the date of such transfer, indebted. For purposes of this
    provision, a transfer includes a transfer made in anticipation
    of any money judgment, criminal fine, or similar obligation or
    which the debtor believed would be incurred as a result of: (1)
    a violation of Federal or state securities laws, regulations,
    or orders; or (2) fraud, deceit, or manipulation in fiduciary
    capacity or in connection with the purchase or sale of a
    security under specified provisions of the Federal securities
    laws.

    Sec. 1403. Payment of Insurance Benefits to Retired Employees.
    Current bankruptcy law prevents a chapter 11 debtor from
    unilaterally modifying certain retiree benefits, such as health
    insurance, during the pendency of the bankruptcy case unless an
    authorized retiree representative is appointed and agrees to
    the modification, or the court authorizes the modification.
    Section 1403 amends Bankruptcy Code section 1114 to prevent
    debtors from evading these requirements by terminating retiree
    benefit plans on the eve of bankruptcy. The amendment would
    require retroactive reinstatement of retiree benefits that were
    modified within 180 days before the debtor filed for bankruptcy
    protection, unless the court finds that the balance of the
    equities clearly favors the modification.

    Sec. 1404. Debts Nondischargeable If Incurred in Violation of
    Securities Fraud Laws. Bankruptcy Code section 523(a)(19) makes
    certain debts nondischargeable that result from the violation
    of Federal securities law, state securities law, or any
    regulation or order issued under such Federal or state
    securities law nondischargeable. Section 1404 amends Bankruptcy
    Code section 523(a)(19)(B) to provide that it applies to such
    debts that result before, on, or after the date on which the
    petition was filed from any judgment, order, consent order,
    decree, settlement agreement, or from any court or
    administrative order for damages or for other specified
    payments owed by the debtor. Section 1404 is effective as of
    July 30, 2002.

    Sec. 1405. Appointment of Trustee in Cases of Suspected Fraud.
    Section 1405 amends Bankruptcy Code section 1104 to require the
    United States trustee to move for the appointment of a trustee
    if there are reasonable grounds to suspect that current members
    of a chapter 11 debtor's governing body, chief executive
    officer, chief financial officer, or members of the debtor's
    governing body who selected the debtor's chief executive
    officer or chief financial officer participated in actual
    fraud, dishonesty, or criminal conduct in the management of the
    debtor or the debtor's public financial reporting.

    Sec. 1406. Effective Date; Application of Amendments. Section
    1406 provides that title XIV, with the exception of one
    provision, takes effect on the date of enactment of this Act
    and the amendments apply only to cases commenced after such
    date. The exception applies to section 1402(1) of the Act,
    which applies only to cases commenced under the Bankruptcy Code
    more than one year after the date of enactment of this Act.

          TITLE XV. GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

    Sec. 1501. Effective Date; Application of Amendments.
    Subsection (a) of section 1501 of the Act provides that the Act
    shall take effect 180 days after the date of enactment, unless
    otherwise specified in this Act. Section 1501(b) provides that
    the amendments made by this Act shall not apply to cases
    commenced under the Bankruptcy Code before the Act's effective
    date, unless otherwise specified in this Act. The provision
    specifies that the amendments made by sections 308, 322 and 330
    shall apply to cases commenced on or after the date of
    enactment of this Act.

    Sec. 1502. Technical Corrections. In light of the renumbering
    of a paragraph in Bankruptcy Code section 507 as effectuated by
    section 212 of this Act, section 1502 corrects various cross-
    references in the Bankruptcy Code to reflect such renumbering.

             Changes in Existing Law Made by the Bill, As Reported

      In compliance with clause 3(e) of rule XIII of the Rules of
    the House of Representatives, changes in existing law made by
    the bill, as reported, are shown as follows (existing law
    proposed to be omitted is enclosed in black brackets, new
    matter is printed in italics, existing law in which no change
    is proposed is shown in roman):

                          TITLE 11, UNITED STATES CODE

    Chap.                                                               Sec.

          General Provisions.............................................101
         * * * * * * *
          Adjustment of Debts of Family Farmers with Regular Annual Inc1201]
          Adjustments of Debts of a Family Farmer or Family Fisherman with .
            Regular Annual Income.......................................1201
         * * * * * * *
          Ancillary and Other Cross-Border Cases........................1501

                         CHAPTER 1--GENERAL PROVISIONS

    Sec.
    101.  Definitions.
         * * * * * * *
    111.  Nonprofit budget and credit counseling agencies; financial
              management instructional courses.
    112.  Prohibition on disclosure of name of minor children.

    Sec. 101. Definitions

        [In this title--] In this title the following definitions
    shall apply:
                (1) The term ``accountant'' means accountant
            authorized under applicable law to practice public
            accounting, and includes professional accounting
            association, corporation, or partnership, if so
            authorized[;].
                (2) The term ``affiliate'' means--
                        (A) * * *

               *       *       *       *       *       *       *

                        (D) entity that operates the business or
                    substantially all of the property of the debtor
                    under a lease or operating agreement[;].
                (3) The term ``assisted person'' means any person
            whose debts consist primarily of consumer debts and the
            value of whose nonexempt property is less than
            $150,000.
                (4) The term ``attorney'' means attorney,
            professional law association, corporation, or
            partnership, authorized under applicable law to
            practice law[;].
                (4A) The term ``bankruptcy assistance'' means any
            goods or services sold or otherwise provided to an
            assisted person with the express or implied purpose of
            providing information, advice, counsel, document
            preparation, or filing, or attendance at a creditors'
            meeting or appearing in a case or proceeding on behalf
            of another or providing legal representation with
            respect to a case or proceeding under this title.
                (5) The term ``claim'' means--
                        (A) * * *
                        (B) right to an equitable remedy for breach
                    of performance if such breach gives rise to a
                    right to payment, whether or not such right to
                    an equitable remedy is reduced to judgment,
                    fixed, contingent, matured, unmatured,
                    disputed, undisputed, secured, or unsecured[;].
                (6) The term ``commodity broker'' means futures
            commission merchant, foreign futures commission
            merchant, clearing organization, leverage transaction
            merchant, or commodity options dealer, as defined in
            section 761 of this title, with respect to which there
            is a customer, as defined in section 761 of this
            title[;].
                (7) The term ``community claim'' means claim that
            arose before the commencement of the case concerning
            the debtor for which property of the kind specified in
            section 541(a)(2) of this title is liable, whether or
            not there is any such property at the time of the
            commencement of the case[;].
                (7A) The term ``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) The term ``commercial fishing vessel'' means a
            vessel used by a family fisherman to carry out a
            commercial fishing operation.
                (8) The term ``consumer debt'' means debt incurred
            by an individual primarily for a personal, family, or
            household purpose[;].
                (9) The term ``corporation''--
                        (A) * * *
                        (B) does not include limited
                    partnership[;].
                (10) The term ``creditor'' means--
                        (A) * * *

               *       *       *       *       *       *       *

                        (C) entity that has a community claim[;].
                (10A) The term ``current monthly income''--
                        (A) means the average monthly income from
                    all sources that the debtor receives (or in a
                    joint case the debtor and the debtor's spouse
                    receive) without regard to whether such income
                    is taxable income, derived during the 6-month
                    period ending on--
                                (i) the last day of the calendar
                            month immediately preceding the date of
                            the commencement of the case if the
                            debtor files the schedule of current
                            income required by section
                            521(a)(1)(B)(ii); or
                                (ii) the date on which current
                            income is determined by the court for
                            purposes of this title if the debtor
                            does not file the schedule of current
                            income required by section
                            521(a)(1)(B)(ii); and
                        (B) includes any amount paid by any entity
                    other than the debtor (or in a joint case the
                    debtor and the debtor's spouse), on a regular
                    basis for the household expenses of the debtor
                    or the debtor's dependents (and in a joint case
                    the debtor's spouse if not otherwise a
                    dependent), but excludes benefits received
                    under the Social Security Act, payments to
                    victims of war crimes or crimes against
                    humanity on account of their status as victims
                    of such crimes, and payments to victims of
                    international terrorism (as defined in section
                    2331 of title 18) or domestic terrorism (as
                    defined in section 2331 of title 18) on account
                    of their status as victims of such terrorism.
                (11) The term ``custodian'' means--
                        (A) * * *

               *       *       *       *       *       *       *

                        (C) trustee, receiver, or agent under
                    applicable law, or under a contract, that is
                    appointed or authorized to take charge of
                    property of the debtor for the purpose of
                    enforcing a lien against such property, or for
                    the purpose of general administration of such
                    property for the benefit of the debtor's
                    creditors[;].
                (12) The term ``debt'' means liability on a
            claim[;].
                [(12A) ``debt for child support'' means a debt of a
            kind specified in section 523(a)(5) of this title for
            maintenance or support of a child of the debtor;]
                (12A) The term ``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.
                (13) The term ``debtor'' means person or
            municipality concerning which a case under this title
            has been commenced[;].
                (13A) The term ``debtor's principal residence''--
                        (A) means a residential structure,
                    including incidental property, without regard
                    to whether that structure is attached to real
                    property; and
                        (B) includes an individual condominium or
                    cooperative unit, a mobile or manufactured
                    home, or trailer.
                [(14) ``disinterested person'' means person that--
                        [(A) is not a creditor, an equity security
                    holder, or an insider;
                        [(B) is not and was not an investment
                    banker for any outstanding security of the
                    debtor;
                        [(C) has not been, within three years
                    before the date of the filing of the petition,
                    an investment banker for a security of the
                    debtor, or an attorney for such an investment
                    banker in connection with the offer, sale, or
                    issuance of a security of the debtor;
                        [(D) is not and was not, within two years
                    before the date of the filing of the petition,
                    a director, officer, or employee of the debtor
                    or of an investment banker specified in
                    subparagraph (B) or (C) of this paragraph; and
                        [(E) does not have an interest materially
                    adverse to the interest of the estate or of any
                    class of creditors or equity security holders,
                    by reason of any direct or indirect
                    relationship to, connection with, or interest
                    in, the debtor or an investment banker
                    specified in subparagraph (B) or (C) of this
                    paragraph, or for any other reason;]
                (14) The term ``disinterested person'' means a
            person that--
                        (A) is not a creditor, an equity security
                    holder, or an insider;
                        (B) is not and was not, within 2 years
                    before the date of the filing of the petition,
                    a director, officer, or employee of the debtor;
                    and
                        (C) does not have an interest materially
                    adverse to the interest of the estate or of any
                    class of creditors or equity security holders,
                    by reason of any direct or indirect
                    relationship to, connection with, or interest
                    in, the debtor, or for any other reason.
                (14A) The term ``domestic support obligation''
            means a debt that accrues before, on, or after the date
            of the order for relief in a case under this title,
            including interest that accrues on that debt as
            provided under applicable nonbankruptcy law
            notwithstanding any other provision of this title, that
            is--
                        (A) owed to or recoverable by--
                                (i) a spouse, former spouse, or
                            child of the debtor or such child's
                            parent, legal guardian, or responsible
                            relative; or
                                (ii) a governmental unit;
                        (B) in the nature of alimony, maintenance,
                    or support (including assistance provided by a
                    governmental unit) of such spouse, former
                    spouse, or child of the debtor or such child's
                    parent, without regard to whether such debt is
                    expressly so designated;
                        (C) established or subject to establishment
                    before, on, or after the date of the order for
                    relief in a case under this title, by reason of
                    applicable provisions of--
                                (i) a separation agreement, divorce
                            decree, or property settlement
                            agreement;
                                (ii) an order of a court of record;
                            or
                                (iii) a determination made in
                            accordance with applicable
                            nonbankruptcy law by a governmental
                            unit; and
                        (D) not assigned to a nongovernmental
                    entity, unless that obligation is assigned
                    voluntarily by the spouse, former spouse, child
                    of the debtor, or such child's parent, legal
                    guardian, or responsible relative for the
                    purpose of collecting the debt.
                (15) The term ``entity'' includes person, estate,
            trust, governmental unit, and United States trustee[;].
                (16) The term ``equity security'' means--
                        (A) * * *

               *       *       *       *       *       *       *

                        (C) warrant or right, other than a right to
                    convert, to purchase, sell, or subscribe to a
                    share, security, or interest of a kind
                    specified in subparagraph (A) or (B) of this
                    paragraph[;].
                (17) The term ``equity security holder'' means
            holder of an equity security of the debtor[;].
                (18) The term ``family farmer'' means--
                        (A) individual or individual and spouse
                    engaged in a farming operation whose aggregate
                    debts do not exceed [$1,500,000] $3,237,000 and
                    not less than [80] 50 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 farming
                    operation), on the date the case is filed,
                    arise out of a farming operation owned or
                    operated by such individual or such individual
                    and spouse, and such individual or such
                    individual and spouse receive from such farming
                    operation more than 50 percent of such
                    individual's or such individual and spouse's
                    gross income [for the taxable year preceding
                    the taxable year] for--
                                (i) the taxable year preceding; or
                                (ii) each of the 2d and 3d taxable
                            years preceding;
                    the taxable year in which the case concerning
                    such individual or such individual and spouse
                    was filed; or
                        (B) corporation or partnership in which
                    more than 50 percent of the outstanding stock
                    or equity is held by one family, or by one
                    family and the relatives of the members of such
                    family, and such family or such relatives
                    conduct the farming operation, and
                                (i) * * *
                                (ii) its aggregate debts do not
                            exceed [$1,500,000] $3,237,000 and not
                            less than [80] 50 percent of its
                            aggregate noncontingent, liquidated
                            debts (excluding a debt for one
                            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 farming operation), on
                            the date the case is filed, arise out
                            of the farming operation owned or
                            operated by such corporation or such
                            partnership; and
                                (iii) if such corporation issues
                            stock, such stock is not publicly
                            traded[;].
                (19) The term ``family farmer with regular annual
            income'' means family farmer whose annual income is
            sufficiently stable and regular to enable such family
            farmer to make payments under a plan under chapter 12
            of this title[;].
                (19A) The term ``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) The term ``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.
                (20) The term ``farmer'' means (except when such
            term appears in the term ``family farmer'') person that
            received more than 80 percent of such person's gross
            income during the taxable year of such person
            immediately preceding the taxable year of such person
            during which the case under this title concerning such
            person was commenced from a farming operation owned or
            operated by such person[;].
                (21) The term ``farming operation'' includes
            farming, tillage of the soil, dairy farming, ranching,
            production or raising of crops, poultry, or livestock,
            and production of poultry or livestock products in an
            unmanufactured state[;].
                (21A) The term ``farmout agreement'' means a
            written agreement in which--
                        (A) * * *
                        (B) such other entity (either directly or
                    through its agents or its assigns), as
                    consideration, agrees to perform drilling,
                    reworking, recompleting, testing, or similar or
                    related operations, to develop or produce
                    liquid or gaseous hydrocarbons on the
                    property[;].
                (21B) The term ``Federal depository institutions
            regulatory agency'' means--
                        (A) * * *

               *       *       *       *       *       *       *

                        (D) with respect to any insured depository
                    institution for which the Federal Deposit
                    Insurance Corporation has been appointed
                    conservator or receiver, the Federal Deposit
                    Insurance Corporation[;].
                [(22) the term ``financial institution''--
                        [(A) means--
                                [(i) 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 of this title, the
                            customer; or
                                [(ii) in connection with a
                            securities contract, as defined in
                            section 741 of this title, an
                            investment company registered under the
                            Investment Company Act of 1940; and
                        [(B) includes any person described in
                    subparagraph (A) which operates, or operates
                    as, a multilateral clearing organization
                    pursuant to section 409 of the Federal Deposit
                    Insurance Corporation Improvement Act of 1991;
                [(23) ``foreign proceeding'' means proceeding,
            whether judicial or administrative and whether or not
            under bankruptcy law, in a foreign country in which the
            debtor's domicile, residence, principal place of
            business, or principal assets were located at the
            commencement of such proceeding, for the purpose of
            liquidating an estate, adjusting debts by composition,
            extension, or discharge, or effecting a reorganization;
                [(24) ``foreign representative'' means duly
            selected trustee, administrator, or other
            representative of an estate in a foreign proceeding;]
                (22) The term ``financial institution'' means--
                        (A) a Federal reserve bank, or an entity
                    (domestic or foreign) that is a commercial or
                    savings bank, industrial savings bank, savings
                    and loan association, trust company, federally-
                    insured credit union, or receiver, liquidating
                    agent, or conservator for such entity and, when
                    any such Federal reserve bank, receiver,
                    liquidating agent, conservator or entity is
                    acting as agent or custodian for a customer in
                    connection with a securities contract (as
                    defined in section 741) such customer; or
                        (B) in connection with a securities
                    contract (as defined in section 741) an
                    investment company registered under the
                    Investment Company Act of 1940.
                (22A) The term ``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).
                (23) The term ``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) The term ``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.
                (25) The term ``forward contract'' [means a
            contract] means--
                        (A) a contract (other than a commodity
                    contract) for the purchase, sale, or transfer
                    of a commodity, as defined in section 761(8) of
                    this title, 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 two days after the date the contract is
                    entered into, including, but not limited to, a
                    repurchase transaction, reverse repurchase
                    transaction, consignment, lease, swap, hedge
                    transaction, deposit, loan, option, allocated
                    transaction, unallocated transaction[, or any
                    combination thereof or option thereon;], or any
                    other similar agreement;
                        (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.
                [(26) ``forward contract merchant'' means a person
            whose business consists in whole or in part of entering
            into forward contracts as or with merchants in a
            commodity, as defined in section 761(8) of this title,
            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;]
                (26) The term ``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.
                (27) The term ``governmental unit'' means United
            States; State; Commonwealth; District; Territory;
            municipality; foreign state; department, agency, or
            instrumentality of the United States (but not a United
            States trustee while serving as a trustee in a case
            under this title), a State, a Commonwealth, a District,
            a Territory, a municipality, or a foreign state; or
            other foreign or domestic government[;].
                (27A) The term ``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.
                (27B) The term ``incidental property'' means, with
            respect to a debtor's principal residence--
                        (A) property commonly conveyed with a
                    principal residence in the area where the real
                    property is located;
                        (B) all easements, rights, appurtenances,
                    fixtures, rents, royalties, mineral rights, oil
                    or gas rights or profits, water rights, escrow
                    funds, or insurance proceeds; and
                        (C) all replacements or additions.
                (28) The term ``indenture'' means mortgage, deed of
            trust, or indenture, under which there is outstanding a
            security, other than a voting-trust certificate,
            constituting a claim against the debtor, a claim
            secured by a lien on any of the debtor's property, or
            an equity security of the debtor[;].
                (29) The term ``indenture trustee'' means trustee
            under an indenture[;].
                (30) The term ``individual with regular income''
            means individual whose income is sufficiently stable
            and regular to enable such individual to make payments
            under a plan under chapter 13 of this title, other than
            a stockbroker or a commodity broker[;].
                (31) The term ``insider'' includes--
                        (A) * * *

               *       *       *       *       *       *       *

                        (F) managing agent of the debtor[;].
                (32) The term ``insolvent'' means--
                        (A) * * *

               *       *       *       *       *       *       *

                        (C) with reference to a municipality,
                    financial condition such that the municipality
                    is--
                                (i) * * *
                                (ii) unable to pay its debts as
                            they become due[;].
                (33) The term ``institution-affiliated party''--
                        (A) * * *
                        (B) with respect to an insured credit
                    union, has the meaning given it in section
                    206(r) of the Federal Credit Union Act[;].
                (34) The term ``insured credit union'' has the
            meaning given it in section 101(7) of the Federal
            Credit Union Act[;].
                (35) The term ``insured depository institution''--
                        (A) * * *
                        (B) includes an insured credit union
                    (except in the case of [paragraphs (21B) and
                    (33)(A)] paragraphs (23) and (35) of this
                    subsection)[;].
                (35A) The term ``intellectual property'' means--
                        (A) * * *

               *       *       *       *       *       *       *

            to the extent protected by applicable nonbankruptcy
            law[; and].
                (36) The term ``judicial lien'' means lien obtained
            by judgment, levy, sequestration, or other legal or
            equitable process or proceeding[;].
                (37) The term ``lien'' means charge against or
            interest in property to secure payment of a debt or
            performance of an obligation[;].
                (38) The term ``margin payment'' means, for
            purposes of the forward contract provisions of this
            title, payment or deposit of cash, a security or other
            property, that is commonly known in the forward
            contract trade as original margin, initial margin,
            maintenance margin, or variation margin, including
            mark-to-market payments, or variation payments[; and].
                (38A) The term ``master netting agreement''--
                        (A) means an agreement providing for the
                    exercise of rights, including rights of
                    netting, setoff, liquidation, termination,
                    acceleration, or 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) The term ``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.
                (39) The term ``mask work'' has the meaning given
            it in section 901(a)(2) of title 17.
                (39A) The term ``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.
                (40) The term ``municipality'' means political
            subdivision or public agency or instrumentality of a
            State[;].
                (40A) The term ``patient'' means any individual who
            obtains or receives services from a health care
            business.
                (40B) The term ``patient records'' means any
            written document relating to a patient or a record
            recorded in a magnetic, optical, or other form of
            electronic medium.
                (41) The term ``person'' includes individual,
            partnership, and corporation, but does not include
            governmental unit, except that a governmental unit
            that--
                        (A) * * *

               *       *       *       *       *       *       *

            shall be considered, for purposes of section 1102 of
            this title, to be a person with respect to such asset
            or such benefit[;].
                (41A) The term ``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.
                (42) The term ``petition'' means petition filed
            under section 301, 302, 303, or 304 of this title, as
            the case may be, commencing a case under this title[;].
                (42A) The term ``production payment'' means a term
            overriding royalty satisfiable in cash or in kind--
                        (A) * * *
                        (B) from a specified volume, or a specified
                    value, from the liquid or gaseous hydrocarbon
                    produced from such property, and determined
                    without regard to production costs[;].
                (43) The term ``purchaser'' means transferee of a
            voluntary transfer, and includes immediate or mediate
            transferee of such a transferee[;].
                (44) The term ``railroad'' means common carrier by
            railroad engaged in the transportation of individuals
            or property or owner of trackage facilities leased by
            such a common carrier[;].
                (45) The term ``relative'' means individual related
            by affinity or consanguinity within the third degree as
            determined by the common law, or individual in a step
            or adoptive relationship within such third degree[;].
                (46) The term ``repo participant'' means an entity
            that, [on any day during the period beginning 90 days
            before the date of] at any time before the filing of
            the petition, has an outstanding repurchase agreement
            with the debtor[;].
                [(47) ``repurchase agreement'' (which definition
            also applies to a reverse repurchase agreement) means
            an agreement, including related terms, which provides
            for the transfer of certificates of deposit, eligible
            bankers' acceptances, or securities that are direct
            obligations of, or that are fully guaranteed as to
            principal and interest 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, or securities
            with a simultaneous agreement by such transferee to
            transfer to the transferor thereof certificates of
            deposit, eligible bankers' acceptances, or securities
            as described above, at a date certain not later than
            one year after such transfers or on demand, against the
            transfer of funds;]
                (47) The term ``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.
                (48) The term ``securities clearing agency'' means
            person that is registered as a clearing agency under
            section 17A of the Securities Exchange Act of 1934, or
            exempt from such registration under such section
            pursuant to an order of the Securities and Exchange
            Commission, or whose business is confined to the
            performance of functions of a clearing agency with
            respect to exempted securities, as defined in section
            3(a)(12) of such Act for the purposes of such section
            17A[;].
                (48A) The term ``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.
                (49) The term ``security''--
                        (A) * * *

               *       *       *       *       *       *       *

                        (B) does not include--
                                (i) * * *

               *       *       *       *       *       *       *

                                (vii) debt or evidence of
                            indebtedness for goods sold and
                            delivered or services rendered[;].
                (50) The term ``security agreement'' means
            agreement that creates or provides for a security
            interest[;].
                (51) The term ``security interest'' means lien
            created by an agreement[;].
                (51A) The term ``settlement payment'' means, for
            purposes of the forward contract provisions of this
            title, a preliminary settlement payment, a partial
            settlement payment, an interim settlement payment, a
            settlement payment on account, a final settlement
            payment, a net settlement payment, or any other similar
            payment commonly used in the forward contract trade[;].
                (51B) The term ``single asset real estate'' means
            real property constituting a single property or
            project, other than residential real property with
            fewer than 4 residential units, which generates
            substantially all of the gross income of a debtor who
            is not a family farmer and on which no substantial
            business is being conducted by a debtor other than the
            business of operating the real property and activities
            incidental [thereto having aggregate noncontingent,
            liquidated secured debts in an amount no more than
            $4,000,000;].
                [(51C) ``small business'' means a person engaged in
            commercial or business activities (but does not include
            a person whose primary activity is the business of
            owning or operating real property and activities
            incidental thereto) whose aggregate noncontingent
            liquidated secured and unsecured debts as of the date
            of the petition do not exceed $2,000,000;]
                (51C) The term ``small business case'' means a case
            filed under chapter 11 of this title in which the
            debtor is a small business debtor.
                (51D) The term ``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).
                (52) The term ``State'' includes the District of
            Columbia and Puerto Rico, except for the purpose of
            defining who may be a debtor under chapter 9 of this
            title[;].
                (53) The term ``statutory lien'' means lien arising
            solely by force of a statute on specified circumstances
            or conditions, or lien of distress for rent, whether or
            not statutory, but does not include security interest
            or judicial lien, whether or not such interest or lien
            is provided by or is dependent on a statute and whether
            or not such interest or lien is made fully effective by
            statute[;].
                (53A) The term ``stockbroker'' means person--
                        (A) * * *
                        (B) that is engaged in the business of
                    effecting transactions in securities--
                                (i) * * *
                                (ii) with members of the general
                            public, from or for such person's own
                            account[;].
                [(53B) ``swap agreement'' means--
                        [(A) an agreement (including terms and
                    conditions incorporated by reference therein)
                    which is a rate swap agreement, basis swap,
                    forward rate agreement, commodity swap,
                    interest rate option, forward foreign exchange
                    agreement, spot foreign exchange agreement,
                    rate cap agreement, rate floor agreement, rate
                    collar agreement, currency swap agreement,
                    cross-currency rate swap agreement, currency
                    option, any other similar agreement (including
                    any option to enter into any of the foregoing);
                        [(B) any combination of the foregoing; or
                        [(C) a master agreement for any of the
                    foregoing together with all supplements;]
                (53B) The term ``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.
                (53C) The term ``swap participant'' means an entity
            that, at any time before the filing of the petition,
            has an outstanding swap agreement with the debtor[;].
                (56A) The term ``term overriding royalty'' means an
            interest in liquid or gaseous hydrocarbons in place or
            to be produced from particular real property that
            entitles the owner thereof to a share of production, or
            the value thereof, for a term limited by time,
            quantity, or value realized[;].
                (53D) The term ``timeshare plan'' means and shall
            include that interest purchased in any arrangement,
            plan, scheme, or similar device, but not including
            exchange programs, whether by membership, agreement,
            tenancy in common, sale, lease, deed, rental agreement,
            license, right to use agreement, or by any other means,
            whereby a purchaser, in exchange for consideration,
            receives a right to use accommodations, facilities, or
            recreational sites, whether improved or unimproved, for
            a specific period of time less than a full year during
            any given year, but not necessarily for consecutive
            years, and which extends for a period of more than
            three years. A ``timeshare interest'' is that interest
            purchased in a timeshare plan which grants the
            purchaser the right to use and occupy accommodations,
            facilities, or recreational sites, whether improved or
            unimproved, pursuant to a timeshare plan[;].
                [(54) ``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
            debtor's equity of redemption;]
                (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.
                (54A) [the term] The term ``uninsured State member
            bank'' means a State member bank (as defined in section
            3 of the Federal Deposit Insurance Act) the deposits of
            which are not insured by the Federal Deposit Insurance
            Corporation[; and].
                (55) The term ``United States'', when used in a
            geographical sense, includes all locations where the
            judicial jurisdiction of the United States extends,
            including territories and possessions of the United
            States[;].

               *       *       *       *       *       *       *

    Sec. 103. Applicability of chapters

        (a) Except as provided in section 1161 of this title,
    chapters 1, 3, and 5 of this title apply in a case under
    chapter 7, 11, 12, or 13 of this title, and this chapter,
    sections 307, 362(n), 555 through 557, and 559 through 562
    apply in a case under chapter 15.

               *       *       *       *       *       *       *

        (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.

    Sec. 104. Adjustment of dollar amounts

        (a) * * *
        (b)(1) On April 1, 1998, and at each 3-year interval ending
    on April 1 thereafter, each dollar amount in effect under
    sections 101(3), 101(18), 101(19A), 101(51D), 109(e), 303(b),
    507(a), 522(d), [and 523(a)(2)(C)] 522(f)(3) and 522(f)(4),
    522(n), 522(p), 522(q), 522(f)(3) and 522(f)(4), 523(a)(2)(C),
    541(b), 547(c)(9), 707(b), 1322(d), 1325(b), and 1326(b)(3) of
    this title and section 1409(b) of title 28 immediately before
    such April 1 shall be adjusted--
                (A) * * *

               *       *       *       *       *       *       *

        (2) Not later than March 1, 1998, and at each 3-year
    interval ending on March 1 thereafter, the Judicial Conference
    of the United States shall publish in the Federal Register the
    dollar amounts that will become effective on such April 1 under
    sections 101(3), 101(18), 101(19A), 101(51D), 109(e), 303(b),
    507(a), 522(d), [and 523(a)(2)(C) of this title] 522(f)(3) and
    522(f)(4), 522(n), 522(p), 522(q), 522(f)(3) and 522(f)(4),
    523(a)(2)(C), 541(b), 547(c)(9), 707(b), 1322(d), 1325(b), and
    1326(b)(3) of this title and section 1409(b) of title 28.

               *       *       *       *       *       *       *

    Sec. 105. Power of court

        (a) * * *

               *       *       *       *       *       *       *

        (d) The court, on its own motion or on the request of a
    party in interest[, may]--
                [(1) hold a status conference regarding any case or
            proceeding under this title after notice to the parties
            in interest; and]
                (1) shall hold such status conferences as are
            necessary to further the expeditious and economical
            resolution of the case; and

               *       *       *       *       *       *       *

    Sec. 107. Public access to papers

        (a) Except as provided in subsection (b) of this section
    and subject to section 112, a paper filed in a case under this
    title and the dockets of a bankruptcy court are public records
    and open to examination by an entity at reasonable times
    without charge.

               *       *       *       *       *       *       *

        (c)(1) The bankruptcy court, for cause, may protect an
    individual, with respect to the following types of information
    to the extent the court finds that disclosure of such
    information would create undue risk of identity theft or other
    unlawful injury to the individual or the individual's property:
                (A) Any means of identification (as defined in
            section 1028(d) of title 18) contained in a paper
            filed, or to be filed, in a case under this title.
                (B) Other information contained in a paper
            described in subparagraph (A).
        (2) Upon ex parte application demonstrating cause, the
    court shall provide access to information protected pursuant to
    paragraph (1) to an entity acting pursuant to the police or
    regulatory power of a domestic governmental unit.
        (3) The United States trustee, bankruptcy administrator,
    trustee, and any auditor serving under section 586(f) of title
    28--
                (A) shall have full access to all information
            contained in any paper filed or submitted in a case
            under this title; and
                (B) shall not disclose information specifically
            protected by the court under this title.

    Sec. 108. Extension of time

        (a) * * *

               *       *       *       *       *       *       *

        (c) Except as provided in section 524 of this title, if
    applicable nonbankruptcy law, an order entered in a
    nonbankruptcy proceeding, or an agreement fixes a period for
    commencing or continuing a civil action in a court other than a
    bankruptcy court on a claim against the debtor, or against an
    individual with respect to which such individual is protected
    under section 1201 or 1301 of this title, and such period has
    not expired before the date of the filing of the petition, then
    such period does not expire until the later of--
                (1) * * *
                (2) 30 days after notice of the termination or
            expiration of the stay under section 362, [922, 1201,
            or] 922, 1201, or 1301 of this title, as the case may
            be, with respect to such claim.

    Sec. 109. Who may be a debtor

        (a) * * *
        (b) A person may be a debtor under chapter 7 of this title
    only if such person is not--
                (1) a railroad;
                (2) a domestic insurance company, bank, savings
            bank, cooperative bank, savings and loan association,
            building and loan association, homestead association, a
            New Markets Venture Capital company as defined in
            section 351 of the Small Business Investment Act of
            1958, a small business investment company licensed by
            the Small Business Administration under [subsection (c)
            or (d) of] section 301 of the Small Business Investment
            Act of 1958, credit union, or industrial bank or
            similar institution which is an insured bank as defined
            in section 3(h) of the Federal Deposit Insurance Act,
            except that an uninsured State member bank, or a
            corporation organized under section 25A of the Federal
            Reserve Act, which operates, or operates as, a
            multilateral clearing organization pursuant to section
            409 of the Federal Deposit Insurance Corporation
            Improvement Act of 1991 may be a debtor if a petition
            is filed at the direction of the Board of Governors of
            the Federal Reserve System; or
                [(3) a foreign insurance company, bank, savings
            bank, cooperative bank, savings and loan association,
            building and loan association, homestead association,
            or credit union, engaged in such business in the United
            States.]
                (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.

               *       *       *       *       *       *       *

        (f) Only a family farmer or family fisherman with regular
    annual income may be a debtor under chapter 12 of this title.

               *       *       *       *       *       *       *

        (h)(1) Subject to paragraphs (2) and (3), and
    notwithstanding any other provision of this section, an
    individual may not be a debtor under this title unless such
    individual has, during the 180-day period preceding the date of
    filing of the petition by such individual, received from an
    approved nonprofit budget and credit counseling agency
    described in section 111(a) an individual or group briefing
    (including a briefing conducted by telephone or on the
    Internet) that outlined the opportunities for available credit
    counseling and assisted such individual in performing a related
    budget analysis.
        (2)(A) Paragraph (1) shall not apply with respect to a
    debtor who resides in a district for which the United States
    trustee (or the bankruptcy administrator, if any) determines
    that the approved nonprofit budget and credit counseling
    agencies for such district are not reasonably able to provide
    adequate services to the additional individuals who would
    otherwise seek credit counseling from such agencies by reason
    of the requirements of paragraph (1).
        (B) The United States trustee (or the bankruptcy
    administrator, if any) who makes a determination described in
    subparagraph (A) shall review such determination not later than
    1 year after the date of such determination, and not less
    frequently than annually thereafter. Notwithstanding the
    preceding sentence, a nonprofit budget and credit counseling
    agency may be disapproved by the United States trustee (or the
    bankruptcy administrator, if any) at any time.
        (3)(A) Subject to subparagraph (B), the requirements of
    paragraph (1) shall not apply with respect to a debtor who
    submits to the court a certification that--
                (i) describes exigent circumstances that merit a
            waiver of the requirements of paragraph (1);
                (ii) states that the debtor requested credit
            counseling services from an approved nonprofit budget
            and credit counseling agency, but was unable to obtain
            the services referred to in paragraph (1) during the 5-
            day period beginning on the date on which the debtor
            made that request; and
                (iii) is satisfactory to the court.
        (B) With respect to a debtor, an exemption under
    subparagraph (A) shall cease to apply to that debtor on the
    date on which the debtor meets the requirements of paragraph
    (1), but in no case may the exemption apply to that debtor
    after the date that is 30 days after the debtor files a
    petition, except that the court, for cause, may order an
    additional 15 days.
        (4) The requirements of paragraph (1) shall not apply with
    respect to a debtor whom the court determines, after notice and
    hearing, is unable to complete those requirements because of
    incapacity, disability, or active military duty in a military
    combat zone. For the purposes of this paragraph, incapacity
    means that the debtor is impaired by reason of mental illness
    or mental deficiency so that he is incapable of realizing and
    making rational decisions with respect to his financial
    responsibilities; and ``disability'' means that the debtor is
    so physically impaired as to be unable, after reasonable
    effort, to participate in an in person, telephone, or Internet
    briefing required under paragraph (1).

    Sec. 110. Penalty for persons who negligently or fraudulently prepare
                        bankruptcy petitions

        (a) In this section--
                (1) ``bankruptcy petition preparer'' means a
            person, other than an attorney [or an employee of an
            attorney] for the debtor or an employee of such
            attorney under the direct supervision of such attorney,
            who prepares for compensation a document for filing;
            and

               *       *       *       *       *       *       *

        (b)(1) A bankruptcy petition preparer who prepares a
    document for filing shall sign the document and print on the
    document the preparer's name and address. 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.
        [(2) A bankruptcy petition preparer who fails to comply
    with paragraph (1) may be fined not more than $500 for each
    such failure unless the failure is due to reasonable cause.]
        (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.
        (c)(1) * * *
        [(2) For purposes] (2)(A) Subject to subparagraph (B), for
    purposes of this section, the identifying number of a
    bankruptcy petition preparer shall be the Social Security
    account number of each individual who prepared the document or
    assisted in its preparation.
        (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.
        [(3) A bankruptcy petition preparer who fails to comply
    with paragraph (1) may be fined not more than $500 for each
    such failure unless the failure is due to reasonable cause.]
        [(d)(1)] (d) A bankruptcy petition preparer shall, not
    later than the time at which a document for filing is presented
    for the debtor's signature, furnish to the debtor a copy of the
    document.
        [(2) A bankruptcy petition preparer who fails to comply
    with paragraph (1) may be fined not more than $500 for each
    such failure unless the failure is due to reasonable cause.]
        (e)(1) * * *
        [(2) A bankruptcy petition preparer may be fined not more
    than $500 for each document executed in violation of paragraph
    (1).]
        (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.
        [(f)(1)] (f) A bankruptcy petition preparer shall not use
    the word ``legal'' or any similar term in any advertisements,
    or advertise under any category that includes the word
    ``legal'' or any similar term.
        [(2) A bankruptcy petition preparer shall be fined not more
    than $500 for each violation of paragraph (1).]
        [(g)(1)] (g) A bankruptcy petition preparer shall not
    collect or receive any payment from the debtor or on behalf of
    the debtor for the court fees in connection with filing the
    petition.
        [(2) A bankruptcy petition preparer shall be fined not more
    than $500 for each violation of paragraph (1).]
        (h)(1) The Supreme Court may promulgate rules under section
    2075 of title 28, or the Judicial Conference of the United
    States may prescribe guidelines, for setting a maximum
    allowable fee chargeable by a bankruptcy petition preparer. A
    bankruptcy petition preparer shall notify the debtor of any
    such maximum amount before preparing any document for filing
    for a debtor or accepting any fee from the debtor.
        [(1) Within 10 days after the date of the filing of a
    petition, a bankruptcy petition preparer shall file a] (2) A
    declaration under penalty of perjury by the bankruptcy petition
    preparer shall be filed together with the petition, disclosing
    any fee received from or on behalf of the debtor within 12
    months immediately prior to the filing of the case, and any
    unpaid fee charged to the debtor. 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).
        [(2) The court shall disallow and order the immediate
    turnover to the bankruptcy trustee of any fee referred to in
    paragraph (1) found to be in excess of the value of services
    rendered for the documents prepared. An individual debtor may
    exempt any funds so recovered under section 522(b).]
        (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).
        [(3)] (4) The debtor, the trustee, a creditor, [or the
    United States trustee] the United States trustee (or the
    bankruptcy administrator, if any) or the court, on the
    initiative of the court, may file a motion for an order under
    paragraph (2).
        [(4)] (5) A bankruptcy petition preparer shall be fined not
    more than $500 for each failure to comply with a court order to
    turn over funds within 30 days of service of such order.
        [(i)(1) If a bankruptcy case or related proceeding is
    dismissed because of the failure to file bankruptcy papers,
    including papers specified in section 521(1) of this title, the
    negligence or intentional disregard of this title or the
    Federal Rules of Bankruptcy Procedure by a bankruptcy petition
    preparer, or if a bankruptcy petition preparer violates this
    section or commits any fraudulent, unfair, or deceptive act,
    the bankruptcy court shall certify that fact to the district
    court, and the district court, on motion of the debtor, the
    trustee, or a creditor and after a hearing, shall order the
    bankruptcy petition preparer to pay to the debtor--]
        (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--
                (A) * * *

               *       *       *       *       *       *       *

        (j)(1) * * *
        (2)(A) In an action under paragraph (1), if the court finds
    that--
                (i) a bankruptcy petition preparer has--
                        (I) engaged in conduct in violation of this
                    section or of any provision of this title [a
                    violation of which subjects a person to
                    criminal penalty];

               *       *       *       *       *       *       *

        (B) If the court finds that a bankruptcy petition preparer
    has continually engaged in conduct described in subclause (I),
    (II), or (III) of clause (i) and that an injunction prohibiting
    such conduct would not be sufficient to prevent such person's
    interference with the proper administration of this title, [or
    has not paid a penalty] has not paid a penalty imposed under
    this section, or failed to disgorge all fees ordered by the
    court the court may enjoin the person from acting as a
    bankruptcy petition preparer.
        (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).
        [(3)] (4) The court shall award to a debtor, trustee, or
    creditor that brings a successful action under this subsection
    reasonable [attorney's] attorneys' fees and costs of the
    action, to be paid by the bankruptcy petition preparer.

               *       *       *       *       *       *       *

        (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. 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;
                        (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
                (E) if a fee is charged for the instructional
            course, charge a reasonable fee, and provide services
            without regard to ability to pay the fee.
                (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.

    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.

                         CHAPTER 3--CASE ADMINISTRATION

                      SUBCHAPTER I--COMMENCEMENT OF A CASE

    Sec.
    301.  Voluntary cases.
         * * * * * * *
    [304.  Cases ancillary to foreign proceedings.]
         * * * * * * *
    308.  Debtor reporting requirements.

                             SUBCHAPTER II--OFFICERS

    321.  Eligibility to serve as trustee.
         * * * * * * *
    332.  Consumer privacy ombudsman.
    333   Appointment of ombudsman.

                         SUBCHAPTER III--ADMINISTRATION

    341.  Meetings of creditors and equity security holders.
         * * * * * * *
    [346.  Special tax provisions.]
    346.  Special provisions related to the treatment of State and local
              taxes.
         * * * * * * *
    351.  Disposal of patient records.

                      SUBCHAPTER I--COMMENCEMENT OF A CASE

    Sec. 301. Voluntary cases

        (a) A voluntary case under a chapter of this title is
    commenced by the filing with the bankruptcy court of a petition
    under such chapter by an entity that may be a debtor under such
    chapter. [The commencement of a voluntary case under a chapter
    of this title constitutes an order for relief under such
    chapter.]
        (b) The commencement of a voluntary case under a chapter of
    this title constitutes an order for relief under such chapter.

               *       *       *       *       *       *       *

    Sec. 303. Involuntary cases

        (a) * * *
        (b) An involuntary case against a person is commenced by
    the filing with the bankruptcy court of a petition under
    chapter 7 or 11 of this title--
                (1) by three or more entities, each of which is
            either a holder of a claim against such person that is
            not contingent as to liability or the subject of a bona
            fide dispute as to liability or amount, or an indenture
            trustee representing such a holder, [if such claims] if
            such noncontingent, undisputed claims aggregate at
            least $10,000 more than the value of any lien on
            property of the debtor securing such claims held by the
            holders of such claims;

               *       *       *       *       *       *       *

        (h) If the petition is not timely controverted, the court
    shall order relief against the debtor in an involuntary case
    under the chapter under which the petition was filed.
    Otherwise, after trial, the court shall order relief against
    the debtor in an involuntary case under the chapter under which
    the petition was filed, only if--
                (1) the debtor is generally not paying such
            debtor's debts as such debts become due unless such
            debts are the subject of a bona fide dispute as to
            liability or amount; or

               *       *       *       *       *       *       *

        [(k) Notwithstanding subsection (a) of this section, an
    involuntary case may be commenced against a foreign bank that
    is not engaged in such business in the United States only under
    chapter 7 of this title and only if a foreign proceeding
    concerning such bank is pending.]
        (l)(1) If--
                (A) the petition under this section is false or
            contains any materially false, fictitious, or
            fraudulent statement;
                (B) the debtor is an individual; and
                (C) the court dismisses such petition,
    the court, upon the motion of the debtor, shall seal all the
    records of the court relating to such petition, and all
    references to such petition.
        (2) If the debtor is an individual and the court dismisses
    a petition under this section, the court may enter an order
    prohibiting all consumer reporting agencies (as defined in
    section 603(f) of the Fair Credit Reporting Act (15 U.S.C.
    1681a(f))) from making any consumer report (as defined in
    section 603(d) of that Act) that contains any information
    relating to such petition or to the case commenced by the
    filing of such petition.
        (3) Upon the expiration of the statute of limitations
    described in section 3282 of title 18, for a violation of
    section 152 or 157 of such title, the court, upon the motion of
    the debtor and for good cause, may expunge any records relating
    to a petition filed under this section.

    [Sec. 304. Cases ancillary to foreign proceedings

        [(a) A case ancillary to a foreign proceeding is commenced
    by the filing with the bankruptcy court of a petition under
    this section by a foreign representative.
        [(b) Subject to the provisions of subsection (c) of this
    section, if a party in interest does not timely controvert the
    petition, or after trial, the court may--
                [(1) enjoin the commencement or continuation of--
                        [(A) any action against--
                                [(i) a debtor with respect to
                            property involved in such foreign
                            proceeding; or
                                [(ii) such property; or
                        [(B) the enforcement of any judgment
                    against the debtor with respect to such
                    property, or any act or the commencement or
                    continuation of any judicial proceeding to
                    create or enforce a lien against the property
                    of such estate;
                [(2) order turnover of the property of such estate,
            or the proceeds of such property, to such foreign
            representative; or
                [(3) order other appropriate relief.
        [(c) In determining whether to grant relief under
    subsection (b) of this section, the court shall be guided by
    what will best assure an economical and expeditious
    administration of such estate, consistent with--
                [(1) just treatment of all holders of claims
            against or interests in such estate;
                [(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 such estate;
                [(4) distribution of proceeds of such estate
            substantially in accordance with the order prescribed
            by this title;
                [(5) comity; and
                [(6) if appropriate, the provision of an
            opportunity for a fresh start for the individual that
            such foreign proceeding concerns.]

    Sec. 305. Abstention

        (a) The court, after notice and a hearing, may dismiss a
    case under this title, or may suspend all proceedings in a case
    under this title, at any time if--
                (1) * * *
                [(2)(A) there is pending a foreign proceeding; and
                [(B) the factors specified in section 304(c) of
            this title warrant such dismissal or suspension.]
                (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.

               *       *       *       *       *       *       *

    Sec. 306. Limited appearance

        An appearance in a bankruptcy court by a foreign
    representative in connection with a petition or request under
    section 303[, 304,] or 305 of this title does not submit such
    foreign representative to the jurisdiction of any court in the
    United States for any other purpose, but the bankruptcy court
    may condition any order under section 303[, 304,] or 305 of
    this title on compliance by such foreign representative with
    the orders of such bankruptcy court.

               *       *       *       *       *       *       *

    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.

    SUBCHAPTER II--OFFICERS

               *       *       *       *       *       *       *

    Sec. 328. Limitation on compensation of professional persons

        (a) The trustee, or a committee appointed under section
    1102 of this title, with the court's approval, may employ or
    authorize the employment of a professional person under section
    327 or 1103 of this title, as the case may be, on any
    reasonable terms and conditions of employment, including on a
    retainer, on an hourly basis, on a fixed or percentage fee
    basis, or on a contingent fee basis. Notwithstanding such terms
    and conditions, the court may allow compensation different from
    the compensation provided under such terms and conditions after
    the conclusion of such employment, if such terms and conditions
    prove to have been improvident in light of developments not
    capable of being anticipated at the time of the fixing of such
    terms and conditions.

               *       *       *       *       *       *       *

    Sec. 330. Compensation of officers

        (a)(1) After notice to the parties in interest and the
    United States Trustee and a hearing, and subject to sections
    326, 328, and 329, the court may award to a trustee, a consumer
    privacy ombudsman appointed under section 332, an examiner, an
    ombudsman appointed under section 333, or a professional person
    employed under section 327 or 1103--
                (A) reasonable compensation for actual, necessary
            services rendered by the trustee, examiner, ombudsman,
            professional person, or attorney and by any
            paraprofessional person employed by any such person;
            and
                (B) reimbursement for actual, necessary expenses.
        (3)[(A) In] In determining the amount of reasonable
    compensation to be awarded to an examiner, trustee under
    chapter 11, or professional person, the court shall consider
    the nature, the extent, and the value of such services, taking
    into account all relevant factors, including--
                (A) * * *

               *       *       *       *       *       *       *

                (D) whether the services were performed within a
            reasonable amount of time commensurate with the
            complexity, importance, and nature of the problem,
            issue, or task addressed; [and]
                (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
                [(E)] (F) whether the compensation is reasonable
            based on the customary compensation charged by
            comparably skilled practitioners in cases other than
            cases under this title.

               *       *       *       *       *       *       *

        (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. 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.

    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.

                         SUBCHAPTER III--ADMINISTRATION

    Sec. 341. Meetings of creditors and equity security holders

        (a) * * *

               *       *       *       *       *       *       *

        (c) The court may not preside at, and may not attend, any
    meeting under this section including any final meeting of
    creditors. Notwithstanding any local court rule, provision of a
    State constitution, any otherwise applicable nonbankruptcy law,
    or any other requirement that representation at the meeting of
    creditors under subsection (a) be by an attorney, a creditor
    holding a consumer debt or any representative of the creditor
    (which may include an entity or an employee of an entity and
    may be a representative for more than 1 creditor) shall be
    permitted to appear at and participate in the meeting of
    creditors in a case under chapter 7 or 13, either alone or in
    conjunction with an attorney for the creditor. Nothing in this
    subsection shall be construed to require any creditor to be
    represented by an attorney at any meeting of creditors.

               *       *       *       *       *       *       *

        (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. 342. Notice

        (a) * * *
        [(b) Prior to the commencement of a case under this title
    by an individual whose debts are primarily consumer debts, the
    clerk shall give written notice to such individual that
    indicates each chapter of this title under which such
    individual may proceed.]
        (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.
        (c)(1) If notice is required to be given by the debtor to a
    creditor under this title, any rule, any applicable law, or any
    order of the court, such notice shall contain the name,
    address, and last 4 digits of the taxpayer identification
    number of the debtor[, but the failure of such notice to
    contain such information shall not invalidate the legal effect
    of such notice]. If the notice concerns an amendment that adds
    a creditor to the schedules of assets and liabilities, the
    debtor shall include the full taxpayer identification number in
    the notice sent to that creditor, but the debtor shall include
    only the last 4 digits of the taxpayer identification number in
    the copy of the notice filed with the court.
        (2)(A) If, within the 90 days before the commencement of a
    voluntary case, a creditor supplies the debtor in at least 2
    communications sent to the debtor with the current account
    number of the debtor and the address at which such creditor
    requests to receive correspondence, then any notice required by
    this title to be sent by the debtor to such creditor shall be
    sent to such address and shall include such account number.
        (B) If a creditor would be in violation of applicable
    nonbankruptcy law by sending any such communication within such
    90-day period and if such creditor supplies the debtor in the
    last 2 communications with the current account number of the
    debtor and the address at which such creditor requests to
    receive correspondence, then any notice required by this title
    to be sent by the debtor to such creditor shall be sent to such
    address and shall include such account number.
        (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)(1) In a case under chapter 7 or 13 of this title of a
    debtor who is an individual, a creditor at any time may both
    file with the court and serve on the debtor a notice of address
    to be used to provide notice in such case to such creditor.
        (2) Any notice in such case required to be provided to such
    creditor by the debtor or the court later than 5 days after the
    court and the debtor receive such creditor's notice of address,
    shall be provided to such address.
        (f)(1) An entity may file with any bankruptcy court a
    notice of address to be used by all the bankruptcy courts or by
    particular bankruptcy courts, as so specified by such entity at
    the time such notice is filed, to provide notice to such entity
    in all cases under chapters 7 and 13 pending in the courts with
    respect to which such notice is filed, in which such entity is
    a creditor.
        (2) In any case filed under chapter 7 or 13, any notice
    required to be provided by a court with respect to which a
    notice is filed under paragraph (1), to such entity later than
    30 days after the filing of such notice under paragraph (1)
    shall be provided to such address unless with respect to a
    particular case a different address is specified in a notice
    filed and served in accordance with subsection (e).
        (3) A notice filed under paragraph (1) may be withdrawn by
    such entity.
        (g)(1) Notice provided to a creditor by the debtor or the
    court other than in accordance with this section (excluding
    this subsection) shall not be effective notice until such
    notice is brought to the attention of such creditor. If such
    creditor designates a person or an organizational subdivision
    of such creditor to be responsible for receiving notices under
    this title and establishes reasonable procedures so that such
    notices receivable by such creditor are to be delivered to such
    person or such subdivision, then a notice provided to such
    creditor other than in accordance with this section (excluding
    this subsection) shall not be considered to have been brought
    to the attention of such creditor until such notice is received
    by such person or such subdivision.
        (2) A monetary penalty may not be imposed on a creditor for
    a violation of a stay in effect under section 362(a) (including
    a monetary penalty imposed under section 362(k)) or for failure
    to comply with section 542 or 543 unless the conduct that is
    the basis of such violation or of such failure occurs after
    such creditor receives notice effective under this section of
    the order for relief.

               *       *       *       *       *       *       *

    [Sec. 346. Special tax provisions

        [(a) Except to the extent otherwise provided in this
    section, subsections (b), (c), (d), (e), (g), (h), (i), and (j)
    of this section apply notwithstanding any State or local law
    imposing a tax, but subject to the Internal Revenue Code of
    1986.
        [(b)(1) In a case under chapter 7, 12, or 11 of this title
    concerning an individual, any income of the estate may be taxed
    under a State or local law imposing a tax on or measured by
    income only to the estate, and may not be taxed to such
    individual. Except as provided in section 728 of this title, if
    such individual is a partner in a partnership, any gain or loss
    resulting from a distribution of property from such
    partnership, or any distributive share of income, gain, loss,
    deduction, or credit of such individual that is distributed, or
    considered distributed, from such partnership, after the
    commencement of the case is gain, loss, income, deduction, or
    credit, as the case may be, of the estate.
        [(2) Except as otherwise provided in this section and in
    section 728 of this title, any income of the estate in such a
    case, and any State or local tax on or measured by such income,
    shall be computed in the same manner as the income and the tax
    of an estate.
        [(3) The estate in such a case shall use the same
    accounting method as the debtor used immediately before the
    commencement of the case.
        [(c)(1) The commencement of a case under this title
    concerning a corporation or a partnership does not effect a
    change in the status of such corporation or partnership for the
    purposes of any State or local law imposing a tax on or
    measured by income. Except as otherwise provided in this
    section and in section 728 of this title, any income of the
    estate in such case may be taxed only as though such case had
    not been commenced.
        [(2) In such a case, except as provided in section 728 of
    this title, the trustee shall make any tax return otherwise
    required by State or local law to be filed by or on behalf of
    such corporation or partnership in the same manner and form as
    such corporation or partnership, as the case may be, is
    required to make such return.
        [(d) In a case under chapter 13 of this title, any income
    of the estate or the debtor may be taxed under a State or local
    law imposing a tax on or measured by income only to the debtor,
    and may not be taxed to the estate.
        [(e) A claim allowed under section 502(f) or 503 of this
    title, other than a claim for a tax that is not otherwise
    deductible or a capital expenditure that is not otherwise
    deductible, is deductible by the entity to which income of the
    estate is taxed unless such claim was deducted by another
    entity, and a deduction for such a claim is deemed to be a
    deduction attributable to a business.
        [(f) The trustee shall withhold from any payment of claims
    for wages, salaries, commissions, dividends, interest, or other
    payments, or collect, any amount required to be withheld or
    collected under applicable State or local tax law, and shall
    pay such withheld or collected amount to the appropriate
    governmental unit at the time and in the manner required by
    such tax law, and with the same priority as the claim from
    which such amount was withheld was paid.
        [(g)(1) Neither gain nor loss shall be recognized on a
    transfer--
                [(A) by operation of law, of property to the
            estate;
                [(B) other than a sale, of property from the estate
            to the debtor; or
                [(C) in a case under chapter 11 or 12 of this title
            concerning a corporation, of property from the estate
            to a corporation that is an affiliate participating in
            a joint plan with the debtor, or that is a successor to
            the debtor under the plan, except that gain or loss may
            be recognized to the same extent that such transfer
            results in the recognition of gain or loss under
            section 371 of the Internal Revenue Code of 1986.
        [(2) The transferee of a transfer of a kind specified in
    this subsection shall take the property transferred with the
    same character, and with the transferor's basis, as adjusted
    under subsection (j)(5) of this section, and holding period.
        [(h) Notwithstanding sections 728(a) and 1146(a) of this
    title, for the purpose of determining the number of taxable
    periods during which the debtor or the estate may use a loss
    carryover or a loss carryback, the taxable period of the debtor
    during which the case is commenced is deemed not to have been
    terminated by such commencement.
        [(i)(1) In a case under chapter 7, 12, or 11 of this title
    concerning an individual, the estate shall succeed to the
    debtor's tax attributes, including--
                [(A) any investment credit carryover;
                [(B) any recovery exclusion;
                [(C) any loss carryover;
                [(D) any foreign tax credit carryover;
                [(E) any capital loss carryover; and
                [(F) any claim of right.
        [(2) After such a case is closed or dismissed, the debtor
    shall succeed to any tax attribute to which the estate
    succeeded under paragraph (1) of this subsection but that was
    not utilized by the estate. The debtor may utilize such tax
    attributes as though any applicable time limitations on such
    utilization by the debtor were suspended during the time during
    which the case was pending.
        [(3) In such a case, the estate may carry back any loss of
    the estate to a taxable period of the debtor that ended before
    the order for relief under such chapter the same as the debtor
    could have carried back such loss had the debtor incurred such
    loss and the case under this title had not been commenced, but
    the debtor may not carry back any loss of the debtor from a
    taxable period that ends after such order to any taxable period
    of the debtor that ended before such order until after the case
    is closed.
        [(j)(1) Except as otherwise provided in this subsection,
    income is not realized by the estate, the debtor, or a
    successor to the debtor by reason of forgiveness or discharge
    of indebtedness in a case under this title.
        [(2) For the purposes of any State or local law imposing a
    tax on or measured by income, a deduction with respect to a
    liability may not be allowed for any taxable period during or
    after which such liability is forgiven or discharged under this
    title. In this paragraph, ``a deduction with respect to a
    liability'' includes a capital loss incurred on the disposition
    of a capital asset with respect to a liability that was
    incurred in connection with the acquisition of such asset.
        [(3) Except as provided in paragraph (4) of this
    subsection, for the purpose of any State or local law imposing
    a tax on or measured by income, any net operating loss of an
    individual or corporate debtor, including a net operating loss
    carryover to such debtor, shall be reduced by the amount of
    indebtedness forgiven or discharged in a case under this title,
    except to the extent that such forgiveness or discharge
    resulted in a disallowance under paragraph (2) of this
    subsection.
        [(4) A reduction of a net operating loss or a net operating
    loss carryover under paragraph (3) of this subsection or of
    basis under paragraph (5) of this subsection is not required to
    the extent that the indebtedness of an individual or corporate
    debtor forgiven or discharged--
                [(A) consisted of items of a deductible nature that
            were not deducted by such debtor; or
                [(B) resulted in an expired net operating loss
            carryover or other deduction that--
                        [(i) did not offset income for any taxable
                    period; and
                        [(ii) did not contribute to a net operating
                    loss in or a net operating loss carryover to
                    the taxable period during or after which such
                    indebtedness was discharged.
        [(5) For the purposes of a State or local law imposing a
    tax on or measured by income, the basis of the debtor's
    property or of property transferred to an entity required to
    use the debtor's basis in whole or in part shall be reduced by
    the lesser of--
                [(A)(i) the amount by which the indebtedness of the
            debtor has been forgiven or discharged in a case under
            this title; minus
                [(ii) the total amount of adjustments made under
            paragraphs (2) and (3) of this subsection; and
                [(B) the amount by which the total basis of the
            debtor's assets that were property of the estate before
            such forgiveness or discharge exceeds the debtor's
            total liabilities that were liabilities both before and
            after such forgiveness or discharge.
        [(6) Notwithstanding paragraph (5) of this subsection,
    basis is not required to be reduced to the extent that the
    debtor elects to treat as taxable income, of the taxable period
    in which indebtedness is forgiven or discharged, the amount of
    indebtedness forgiven or discharged that otherwise would be
    applied in reduction of basis under paragraph (5) of this
    subsection.
        [(7) For the purposes of this subsection, indebtedness with
    respect to which an equity security, other than an interest of
    a limited partner in a limited partnership, is issued to the
    creditor to whom such indebtedness was owed, or that is
    forgiven as a contribution to capital by an equity security
    holder other than a limited partner in the debtor, is not
    forgiven or discharged in a case under this title--
                [(A) to any extent that such indebtedness did not
            consist of items of a deductible nature; or
                [(B) if the issuance of such equity security has
            the same consequences under a law imposing a tax on or
            measured by income to such creditor as a payment in
            cash to such creditor in an amount equal to the fair
            market value of such equity security, then to the
            lesser of--
                        [(i) the extent that such issuance has the
                    same such consequences; and
                        [(ii) the extent of such fair market
                    value.]

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

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

               *       *       *       *       *       *       *

    Sec. 348. Effect of conversion

        (a) * * *

               *       *       *       *       *       *       *

        (f)(1) Except as provided in paragraph (2), when a case
    under chapter 13 of this title is converted to a case under
    another chapter under this title--
                (A) property of the estate in the converted case
            shall consist of property of the estate, as of the date
            of filing of the petition, that remains in the
            possession of or is under the control of the debtor on
            the date of conversion; [and]
                (B) valuations of property and of allowed secured
            claims in the chapter 13 case shall apply [in the
            converted case, with allowed secured claims] only in a
            case converted to a case under chapter 11 or 12, but
            not in a case converted to a case under chapter 7, with
            allowed secured claims in cases under chapters 11 and
            12 reduced to the extent that they have been paid in
            accordance with the chapter 13 plan[.]; and
                (C) with respect to cases converted from chapter
            13--
                        (i) the claim of any creditor holding
                    security as of the date of the petition shall
                    continue to be secured by that security unless
                    the full amount of such claim determined under
                    applicable nonbankruptcy law has been paid in
                    full as of the date of conversion,
                    notwithstanding any valuation or determination
                    of the amount of an allowed secured claim made
                    for the purposes of the case under chapter 13;
                    and
                        (ii) unless a prebankruptcy default has
                    been fully cured under the plan at the time of
                    conversion, in any proceeding under this title
                    or otherwise, the default shall have the effect
                    given under applicable nonbankruptcy law.
        (2) If the debtor converts a case under chapter 13 of this
    title to a case under another chapter under this title in bad
    faith, the property of the estate in the converted case shall
    consist of the property of the estate as of the date of
    conversion.

               *       *       *       *       *       *       *

    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.

    SUBCHAPTER IV--ADMINISTRATIVE POWERS

               *       *       *       *       *       *       *

    Sec. 362. Automatic stay

        (a) Except as provided in subsection (b) of this section, a
    petition filed under section 301, 302, or 303 of this title, or
    an application filed under section 5(a)(3) of the Securities
    Investor Protection Act of 1970, operates as a stay, applicable
    to all entities, of--
                (1) * * *

               *       *       *       *       *       *       *

                (8) the commencement or continuation of a
            proceeding before the United States Tax Court
            concerning [the debtor] a corporate debtor's tax
            liability for a taxable period the bankruptcy court may
            determine or concerning the tax liability of a debtor
            who is an individual for a taxable period ending before
            the date of the order for relief under this title.
        (b) The filing of a petition under section 301, 302, or 303
    of this title, or of an application under section 5(a)(3) of
    the Securities Investor Protection Act of 1970, does not
    operate as a stay--
                (1) * * *
                [(2) under subsection (a) of this section--
                        [(A) of the commencement or continuation of
                    an action or proceeding for--
                                [(i) the establishment of
                            paternity; or
                                [(ii) the establishment or
                            modification of an order for alimony,
                            maintenance, or support; or
                        [(B) of the collection of alimony,
                    maintenance, or support from property that is
                    not property of the estate;]
                (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;

               *       *       *       *       *       *       *

                (6) under subsection (a) of this section, of the
            setoff by a commodity broker, forward contract
            merchant, stockbroker, [financial institutions,]
            financial institution, financial participant, or
            securities clearing agency of any mutual debt and claim
            under or in connection with commodity contracts, as
            defined in section 761 of this title, forward
            contracts, or securities contracts, as defined in
            section 741 of this title, that constitutes the setoff
            of a claim against the debtor for a margin payment, as
            defined in section 101, 741, or 761 of this title, or
            settlement payment, as defined in section 101 or 741 of
            this title, arising out of commodity contracts, forward
            contracts, or securities contracts against cash,
            securities, or other property held by, pledged to,
            under the control of, or due from such commodity
            broker, forward contract merchant, stockbroker,
            [financial institutions,] financial institution,
            financial participant, or securities clearing agency to
            margin, guarantee, secure, or settle commodity
            contracts, forward contracts, or securities contracts;
                (7) under subsection (a) of this section, of the
            setoff by a repo participant or financial participant,
            of any mutual debt and claim under or in connection
            with repurchase agreements that constitutes the setoff
            of a claim against the debtor for a margin payment, as
            defined in section 741 or 761 of this title, or
            settlement payment, as defined in section 741 of this
            title, arising out of repurchase agreements against
            cash, securities, or other property held by, pledged
            to, under the control of, or due from such repo
            participant or financial participant to margin,
            guarantee, secure or settle repurchase agreements;

               *       *       *       *       *       *       *

                [(17) under subsection (a) of this section, of the
            setoff by a swap participant, of any mutual debt and
            claim under or in connection with any swap agreement
            that constitutes the setoff of a claim against the
            debtor for any payment due from the debtor under or in
            connection with any swap agreement against any payment
            due to the debtor from the swap participant under or in
            connection with any swap agreement or against cash,
            securities, or other property of the debtor held by or
            due from such swap participant to guarantee, secure or
            settle any swap agreement; or
                [(18) under subsection (a) of the creation or
            perfection of a statutory lien for an ad valorem
            property tax imposed by the District of Columbia, or a
            political subdivision of a State, if such tax comes due
            after the filing of the petition.]
                (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;
                (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;
                (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;
                (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;
                (22) subject to subsection (l), under subsection
            (a)(3), of the continuation of any eviction, unlawful
            detainer action, or similar proceeding by a lessor
            against a debtor involving residential property in
            which the debtor resides as a tenant under a lease or
            rental agreement and with respect to which the lessor
            has obtained before the date of the filing of the
            bankruptcy petition, a judgment for possession of such
            property against the debtor;
                (23) subject to subsection (m), under subsection
            (a)(3), of an eviction action that seeks possession of
            the residential property in which the debtor resides as
            a tenant under a lease or rental agreement based on
            endangerment of such property or the illegal use of
            controlled substances on such property, but only if the
            lessor files with the court, and serves upon the
            debtor, a certification under penalty of perjury that
            such an eviction action has been filed, or that the
            debtor, during the 30-day period preceding the date of
            the filing of the certification, has endangered
            property or illegally used or allowed to be used a
            controlled substance on the property;
                (24) under subsection (a), of any transfer that is
            not avoidable under section 544 and that is not
            avoidable under section 549;
                (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;
                (26) under subsection (a), of the setoff under
            applicable nonbankruptcy law of an income tax refund,
            by a governmental unit, with respect to a taxable
            period that ended before the date of the order for
            relief against an income tax liability for a taxable
            period that also ended before the date of the order for
            relief, except that in any case in which the setoff of
            an income tax refund is not permitted under applicable
            nonbankruptcy law because of a pending action to
            determine the amount or legality of a tax liability,
            the governmental unit may hold the refund pending the
            resolution of the action, unless the court, on the
            motion of the trustee and after notice and a hearing,
            grants the taxing authority adequate protection (within
            the meaning of section 361) for the secured claim of
            such authority in the setoff under section 506(a);
                (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
                (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).
    The provisions of paragraphs (12) and (13) of this subsection
    shall apply with respect to any such petition filed on or
    before December 31, 1989.
        (c) Except as provided in subsections (d), [(e), and (f)]
    (e), (f), and (h) of this section--
                (1) the stay of an act against property of the
            estate under subsection (a) of this section continues
            until such property is no longer property of the
            estate; [and]
                (2) the stay of any other act under subsection (a)
            of this section continues until the earliest of--
                        (A) * * *

               *       *       *       *       *       *       *

                        (C) if the case is a case under chapter 7
                    of this title concerning an individual or a
                    case under chapter 9, 11, 12, or 13 of this
                    title, the time a discharge is granted or
                    denied[.];
                (3) if a single or joint case is filed by or
            against debtor who is an individual in a case under
            chapter 7, 11, or 13, and if a single or joint case of
            the debtor was pending within the preceding 1-year
            period but was dismissed, other than a case refiled
            under a chapter other than chapter 7 after dismissal
            under section 707(b)--
                        (A) the stay under subsection (a) with
                    respect to any action taken with respect to a
                    debt or property securing such debt or with
                    respect to any lease shall terminate with
                    respect to the debtor on the 30th day after the
                    filing of the later case;
                        (B) on the motion of a party in interest
                    for continuation of the automatic stay and upon
                    notice and a hearing, the court may extend the
                    stay in particular cases as to any or all
                    creditors (subject to such conditions or
                    limitations as the court may then impose) after
                    notice and a hearing completed before the
                    expiration of the 30-day period only if the
                    party in interest demonstrates that the filing
                    of the later case is in good faith as to the
                    creditors to be stayed; and
                        (C) for purposes of subparagraph (B), a
                    case is presumptively filed not in good faith
                    (but such presumption may be rebutted by clear
                    and convincing evidence to the contrary)--
                                (i) as to all creditors, if--
                                        (I) more than 1 previous
                                    case under any of chapters 7,
                                    11, and 13 in which the
                                    individual was a debtor was
                                    pending within the preceding 1-
                                    year period;
                                        (II) a previous case under
                                    any of chapters 7, 11, and 13
                                    in which the individual was a
                                    debtor was dismissed within
                                    such 1-year period, after the
                                    debtor failed to--
                                                (aa) file or amend
                                            the petition or other
                                            documents as required
                                            by this title or the
                                            court without
                                            substantial excuse (but
                                            mere inadvertence or
                                            negligence shall not be
                                            a substantial excuse
                                            unless the dismissal
                                            was caused by the
                                            negligence of the
                                            debtor's attorney);
                                                (bb) provide
                                            adequate protection as
                                            ordered by the court;
                                            or
                                                (cc) perform the
                                            terms of a plan
                                            confirmed by the court;
                                            or
                                        (III) there has not been a
                                    substantial change in the
                                    financial or personal affairs
                                    of the debtor since the
                                    dismissal of the next most
                                    previous case under chapter 7,
                                    11, or 13 or any other reason
                                    to conclude that the later case
                                    will be concluded--
                                                (aa) if a case
                                            under chapter 7, with a
                                            discharge; or
                                                (bb) if a case
                                            under chapter 11 or 13,
                                            with a confirmed plan
                                            that will be fully
                                            performed; and
                                (ii) as to any creditor that
                            commenced an action under subsection
                            (d) in a previous case in which the
                            individual was a debtor if, as of the
                            date of dismissal of such case, that
                            action was still pending or had been
                            resolved by terminating, conditioning,
                            or limiting the stay as to actions of
                            such creditor; and
                (4)(A)(i) if a single or joint case is filed by or
            against a debtor who is an individual under this title,
            and if 2 or more single or joint cases of the debtor
            were pending within the previous year but were
            dismissed, other than a case refiled under section
            707(b), the stay under subsection (a) shall not go into
            effect upon the filing of the later case; and
                (ii) on request of a party in interest, the court
            shall promptly enter an order confirming that no stay
            is in effect;
                (B) if, within 30 days after the filing of the
            later case, a party in interest requests the court may
            order the stay to take effect in the case as to any or
            all creditors (subject to such conditions or
            limitations as the court may impose), after notice and
            a hearing, only if the party in interest demonstrates
            that the filing of the later case is in good faith as
            to the creditors to be stayed;
                (C) a stay imposed under subparagraph (B) shall be
            effective on the date of the entry of the order
            allowing the stay to go into effect; and
                (D) for purposes of subparagraph (B), a case is
            presumptively filed not in good faith (but such
            presumption may be rebutted by clear and convincing
            evidence to the contrary)--
                        (i) as to all creditors if--
                                (I) 2 or more previous cases under
                            this title in which the individual was
                            a debtor were pending within the 1-year
                            period;
                                (II) a previous case under this
                            title in which the individual was a
                            debtor was dismissed within the time
                            period stated in this paragraph after
                            the debtor failed to file or amend the
                            petition or other documents as required
                            by this title or the court without
                            substantial excuse (but mere
                            inadvertence or negligence shall not be
                            substantial excuse unless the dismissal
                            was caused by the negligence of the
                            debtor's attorney), failed to provide
                            adequate protection as ordered by the
                            court, or failed to perform the terms
                            of a plan confirmed by the court; or
                                (III) there has not been a
                            substantial change in the financial or
                            personal affairs of the debtor since
                            the dismissal of the next most previous
                            case under this title, or any other
                            reason to conclude that the later case
                            will not be concluded, if a case under
                            chapter 7, with a discharge, and if a
                            case under chapter 11 or 13, with a
                            confirmed plan that will be fully
                            performed; or
                        (ii) as to any creditor that commenced an
                    action under subsection (d) in a previous case
                    in which the individual was a debtor if, as of
                    the date of dismissal of such case, such action
                    was still pending or had been resolved by
                    terminating, conditioning, or limiting the stay
                    as to such action of such creditor.
        (d) On request of a party in interest and after notice and
    a hearing, the court shall grant relief from the stay provided
    under subsection (a) of this section, such as by terminating,
    annulling, modifying, or conditioning such stay--
                (1) * * *
                (2) with respect to a stay of an act against
            property under subsection (a) of this section, if--
                        (A) * * *
                        (B) such property is not necessary to an
                    effective reorganization; [or]
                (3) with respect to a stay of an act against single
            asset real estate under subsection (a), by a creditor
            whose claim is secured by an interest in such real
            estate, unless, not later than the date that is 90 days
            after the entry of the order for relief (or such later
            date as the court may determine for cause by order
            entered within that 90-day period) or 30 days after the
            court determines that the debtor is subject to this
            paragraph, whichever is later--
                        (A) * * *
                        [(B) the debtor has commenced monthly
                    payments to each creditor whose claim is
                    secured by such real estate (other than a claim
                    secured by a judgment lien or by an unmatured
                    statutory lien), which payments are in an
                    amount equal to interest at a current fair
                    market rate on the value of the creditor's
                    interest in the real estate.]
                        (B) the debtor has commenced monthly
                    payments that--
                                (i) may, in the debtor's sole
                            discretion, notwithstanding section
                            363(c)(2), be made from rents or other
                            income generated before, on, or after
                            the date of the commencement of the
                            case by or from the property to each
                            creditor whose claim is secured by such
                            real estate (other than a claim secured
                            by a judgment lien or by an unmatured
                            statutory lien); and
                                (ii) are in an amount equal to
                            interest at the then applicable
                            nondefault contract rate of interest on
                            the value of the creditor's interest in
                            the real estate; or
                (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.
        (e)(1) Thirty days after a request under subsection (d) of
    this section for relief from the stay of any act against
    property of the estate under subsection (a) of this section,
    such stay is terminated with respect to the party in interest
    making such request, unless the court, after notice and a
    hearing, orders such stay continued in effect pending the
    conclusion of, or as a result of, a final hearing and
    determination under subsection (d) of this section. A hearing
    under this subsection may be a preliminary hearing, or may be
    consolidated with the final hearing under subsection (d) of
    this section. The court shall order such stay continued in
    effect pending the conclusion of the final hearing under
    subsection (d) of this section if there is a reasonable
    likelihood that the party opposing relief from such stay will
    prevail at the conclusion of such final hearing. If the hearing
    under this subsection is a preliminary hearing, then such final
    hearing shall be concluded not later than thirty days after the
    conclusion of such preliminary hearing, unless the 30-day
    period is extended with the consent of the parties in interest
    or for a specific time which the court finds is required by
    compelling circumstances.
        (2) Notwithstanding paragraph (1), in a case under chapter
    7, 11, or 13 in which the debtor is an individual, the stay
    under subsection (a) shall terminate on the date that is 60
    days after a request is made by a party in interest under
    subsection (d), unless--
                (A) a final decision is rendered by the court
            during the 60-day period beginning on the date of the
            request; or
                (B) such 60-day period is extended--
                        (i) by agreement of all parties in
                    interest; or
                        (ii) by the court for such specific period
                    of time as the court finds is required for good
                    cause, as described in findings made by the
                    court.

               *       *       *       *       *       *       *

        (h)(1) In a case in which the debtor is an individual, the
    stay provided by subsection (a) is terminated with respect to
    personal property of the estate or of the debtor securing in
    whole or in part a claim, or subject to an unexpired lease, and
    such personal property shall no longer be property of the
    estate if the debtor fails within the applicable time set by
    section 521(a)(2)--
                (A) to file timely any statement of intention
            required under section 521(a)(2) with respect to such
            personal property or to indicate in such statement that
            the debtor will either surrender such personal property
            or retain it and, if retaining such personal property,
            either redeem such personal property pursuant to
            section 722, enter into an agreement of the kind
            specified in section 524(c) applicable to the debt
            secured by such personal property, or assume such
            unexpired lease pursuant to section 365(p) if the
            trustee does not do so, as applicable; and
                (B) to take timely the action specified in such
            statement, as it may be amended before expiration of
            the period for taking action, unless such statement
            specifies the debtor's intention to reaffirm such debt
            on the original contract terms and the creditor refuses
            to agree to the reaffirmation on such terms.
        (2) Paragraph (1) does not apply if the court determines,
    on the motion of the trustee filed before the expiration of the
    applicable time set by section 521(a)(2), after notice and a
    hearing, that such personal property is of consequential value
    or benefit to the estate, and orders appropriate adequate
    protection of the creditor's interest, and orders the debtor to
    deliver any collateral in the debtor's possession to the
    trustee. If the court does not so determine, the stay provided
    by subsection (a) shall terminate upon the conclusion of the
    hearing on the motion.
        (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.
        [(h) An] (k)(1) Except as provided in paragraph (2), an
    individual injured by any willful violation of a stay provided
    by this section shall recover actual damages, including costs
    and attorneys' fees, and, in appropriate circumstances, may
    recover punitive damages.
        (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.
        (l)(1) Except as otherwise provided in this subsection,
    subsection (b)(22) shall apply on the date that is 30 days
    after the date on which the bankruptcy petition is filed, if
    the debtor files with the petition and serves upon the lessor a
    certification under penalty of perjury that--
                (A) under nonbankruptcy law applicable in the
            jurisdiction, there are circumstances under which the
            debtor would be permitted to cure the entire monetary
            default that gave rise to the judgment for possession,
            after that judgment for possession was entered; and
                (B) the debtor (or an adult dependent of the
            debtor) has deposited with the clerk of the court, any
            rent that would become due during the 30-day period
            after the filing of the bankruptcy petition.
        (2) If, within the 30-day period after the filing of the
    bankruptcy petition, the debtor (or an adult dependent of the
    debtor) complies with paragraph (1) and files with the court
    and serves upon the lessor a further certification under
    penalty of perjury that the debtor (or an adult dependent of
    the debtor) has cured, under nonbankrupcty law applicable in
    the jurisdiction, the entire monetary default that gave rise to
    the judgment under which possession is sought by the lessor,
    subsection (b)(22) shall not apply, unless ordered to apply by
    the court under paragraph (3).
        (3)(A) If the lessor files an objection to any
    certification filed by the debtor under paragraph (1) or (2),
    and serves such objection upon the debtor, the court shall hold
    a hearing within 10 days after the filing and service of such
    objection to determine if the certification filed by the debtor
    under paragraph (1) or (2) is true.
        (B) If the court upholds the objection of the lessor filed
    under subparagraph (A)--
                (i) subsection (b)(22) shall apply immediately and
            relief from the stay provided under subsection (a)(3)
            shall not be required to enable the lessor to complete
            the process to recover full possession of the property;
            and
                (ii) the clerk of the court shall immediately serve
            upon the lessor and the debtor a certified copy of the
            court's order upholding the lessor's objection.
        (4) If a debtor, in accordance with paragraph (5),
    indicates on the petition that there was a judgment for
    possession of the residential rental property in which the
    debtor resides and does not file a certification under
    paragraph (1) or (2)--
                (A) subsection (b)(22) shall apply immediately upon
            failure to file such certification, and relief from the
            stay provided under subsection (a)(3) shall not be
            required to enable the lessor to complete the process
            to recover full possession of the property; and
                (B) the clerk of the court shall immediately serve
            upon the lessor and the debtor a certified copy of the
            docket indicating the absence of a filed certification
            and the applicability of the exception to the stay
            under subsection (b)(22).
        (5)(A) Where a judgment for possession of residential
    property in which the debtor resides as a tenant under a lease
    or rental agreement has been obtained by the lessor, the debtor
    shall so indicate on the bankruptcy petition and shall provide
    the name and address of the lessor that obtained that pre-
    petition judgment on the petition and on any certification
    filed under this subsection.
        (B) The form of certification filed with the petition, as
    specified in this subsection, shall provide for the debtor to
    certify, and the debtor shall certify--
                (i) whether a judgment for possession of
            residential rental housing in which the debtor resides
            has been obtained against the debtor before the date of
            the filing of the petition; and
                (ii) whether the debtor is claiming under paragraph
            (1) that under nonbankruptcy law applicable in the
            jurisdiction, there are circumstances under which the
            debtor would be permitted to cure the entire monetary
            default that gave rise to the judgment for possession,
            after that judgment of possession was entered, and has
            made the appropriate deposit with the court.
        (C) The standard forms (electronic and otherwise) used in a
    bankruptcy proceeding shall be amended to reflect the
    requirements of this subsection.
        (D) The clerk of the court shall arrange for the prompt
    transmittal of the rent deposited in accordance with paragraph
    (1)(B) to the lessor.
        (m)(1) Except as otherwise provided in this subsection,
    subsection (b)(23) shall apply on the date that is 15 days
    after the date on which the lessor files and serves a
    certification described in subsection (b)(23).
        (2)(A) If the debtor files with the court an objection to
    the truth or legal sufficiency of the certification described
    in subsection (b)(23) and serves such objection upon the
    lessor, subsection (b)(23) shall not apply, unless ordered to
    apply by the court under this subsection.
        (B) If the debtor files and serves the objection under
    subparagraph (A), the court shall hold a hearing within 10 days
    after the filing and service of such objection to determine if
    the situation giving rise to the lessor's certification under
    paragraph (1) existed or has been remedied.
        (C) If the debtor can demonstrate to the satisfaction of
    the court that the situation giving rise to the lessor's
    certification under paragraph (1) did not exist or has been
    remedied, the stay provided under subsection (a)(3) shall
    remain in effect until the termination of the stay under this
    section.
        (D) If the debtor cannot demonstrate to the satisfaction of
    the court that the situation giving rise to the lessor's
    certification under paragraph (1) did not exist or has been
    remedied--
                (i) relief from the stay provided under subsection
            (a)(3) shall not be required to enable the lessor to
            proceed with the eviction; and
                (ii) the clerk of the court shall immediately serve
            upon the lessor and the debtor a certified copy of the
            court's order upholding the lessor's certification.
        (3) If the debtor fails to file, within 15 days, an
    objection under paragraph (2)(A)--
                (A) subsection (b)(23) shall apply immediately upon
            such failure and relief from the stay provided under
            subsection (a)(3) shall not be required to enable the
            lessor to complete the process to recover full
            possession of the property; and
                (B) the clerk of the court shall immediately serve
            upon the lessor and the debtor a certified copy of the
            docket indicating such failure.
        (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.
        (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.

    Sec. 363. Use, sale, or lease of property

        (a) * * *
        (b)(1) The trustee, after notice and a hearing, may use,
    sell, or lease, other than in the ordinary course of business,
    property of the estate[.], 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.

               *       *       *       *       *       *       *

        (d) The trustee may use, sell, or lease property under
    subsection (b) or (c) of this section [only to the extent not
    inconsistent with any relief granted under section 362(c),
    362(d), 362(e), or 362(f) of this title.] 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.

               *       *       *       *       *       *       *

        (o) Notwithstanding subsection (f), if a person purchases
    any interest in a consumer credit transaction that is subject
    to the Truth in Lending Act or any interest in a consumer
    credit contract (as defined in section 433.1 of title 16 of the
    Code of Federal Regulations (January 1, 2004), as amended from
    time to time), and if such interest is purchased through a sale
    under this section, then such person shall remain subject to
    all claims and defenses that are related to such consumer
    credit transaction or such consumer credit contract, to the
    same extent as such person would be subject to such claims and
    defenses of the consumer had such interest been purchased at a
    sale not under this section.
        [(o)] (p) In any hearing under this section--
                (1) * * *

               *       *       *       *       *       *       *

    Sec. 365. Executory contracts and unexpired leases

        (a) * * *
        (b)(1) If there has been a default in an executory contract
    or unexpired lease of the debtor, the trustee may not assume
    such contract or lease unless, at the time of assumption of
    such contract or lease, the trustee--
                (A) cures, or provides adequate assurance that the
            trustee will promptly cure, such default[;] 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;

               *       *       *       *       *       *       *

        (2) Paragraph (1) of this subsection does not apply to a
    default that is a breach of a provision relating to--
                (A) * * *

               *       *       *       *       *       *       *

                (D) the satisfaction of any [penalty rate or
            provision] penalty rate or penalty provision relating
            to a default arising from any failure by the debtor to
            perform nonmonetary obligations under the executory
            contract or unexpired lease.

               *       *       *       *       *       *       *

        (c) The trustee may not assume or assign any executory
    contract or unexpired lease of the debtor, whether or not such
    contract or lease prohibits or restricts assignment of rights
    or delegation of duties, if--
                (1) * * *
                (2) such contract is a contract to make a loan, or
            extend other debt financing or financial
            accommodations, to or for the benefit of the debtor, or
            to issue a security of the debtor; or
                (3) such lease is of nonresidential real property
            and has been terminated under applicable nonbankruptcy
            law prior to the order for relief[; or].
                [(4) such lease is of nonresidential real property
            under which the debtor is the lessee of an aircraft
            terminal or aircraft gate at an airport at which the
            debtor is the lessee under one or more additional
            nonresidential leases of an aircraft terminal or
            aircraft gate and the trustee, in connection with such
            assumption or assignment, does not assume all such
            leases or does not assume and assign all of such leases
            to the same person, except that the trustee may assume
            or assign less than all of such leases with the airport
            operator's written consent.]
        (d)(1) * * *

               *       *       *       *       *       *       *

        [(4) Notwithstanding paragraphs (1) and (2), in a case
    under any chapter of this title, if the trustee does not assume
    or reject an unexpired lease of nonresidential real property
    under which the debtor is the lessee within 60 days after the
    date of the order for relief, or within such additional time as
    the court, for cause, within such 60-day period, fixes, then
    such lease is deemed rejected, and the trustee shall
    immediately surrender such nonresidential real property to the
    lessor.
        [(5) Notwithstanding paragraphs (1) and (4) of this
    subsection, in a case under any chapter of this title, if the
    trustee does not assume or reject an unexpired lease of
    nonresidential real property under which the debtor is an
    affected air carrier that is the lessee of an aircraft terminal
    or aircraft gate before the occurrence of a termination event,
    then (unless the court orders the trustee to assume such
    unexpired leases within 5 days after the termination event), at
    the option of the airport operator, such lease is deemed
    rejected 5 days after the occurrence of a termination event and
    the trustee shall immediately surrender possession of the
    premises to the airport operator; except that the lease shall
    not be deemed to be rejected unless the airport operator first
    waives the right to damages related to the rejection. In the
    event that the lease is deemed to be rejected under this
    paragraph, the airport operator shall provide the affected air
    carrier adequate opportunity after the surrender of the
    premises to remove the fixtures and equipment installed by the
    affected air carrier.
        [(6) For the purpose of paragraph (5) of this subsection
    and paragraph (f)(1) of this section, the occurrence of a
    termination event means, with respect to a debtor which is an
    affected air carrier that is the lessee of an aircraft terminal
    or aircraft gate--
                [(A) the entry under section 301 or 302 of this
            title of an order for relief under chapter 7 of this
            title;
                [(B) the conversion of a case under any chapter of
            this title to a case under chapter 7 of this title; or
                [(C) the granting of relief from the stay provided
            under section 362(a) of this title with respect to
            aircraft, aircraft engines, propellers, appliances, or
            spare parts, as defined in section 40102(a) of title
            49, except for property of the debtor found by the
            court not to be necessary to an effective
            reorganization.
        [(7) Any order entered by the court pursuant to paragraph
    (4) extending the period within which the trustee of an
    affected air carrier must assume or reject an unexpired lease
    of nonresidential real property shall be without prejudice to--
                [(A) the right of the trustee to seek further
            extensions within such additional time period granted
            by the court pursuant to paragraph (4); and
                [(B) the right of any lessor or any other party in
            interest to request, at any time, a shortening or
            termination of the period within which the trustee must
            assume or reject an unexpired lease of nonresidential
            real property.
        [(8) The burden of proof for establishing cause for an
    extension by an affected air carrier under paragraph (4) or the
    maintenance of a previously granted extension under paragraph
    (7)(A) and (B) shall at all times remain with the trustee.
        [(9) For purposes of determining cause under paragraph (7)
    with respect to an unexpired lease of nonresidential real
    property between the debtor that is an affected air carrier and
    an airport operator under which such debtor is the lessee of an
    airport terminal or an airport gate, the court shall consider,
    among other relevant factors, whether substantial harm will
    result to the airport operator or airline passengers as a
    result of the extension or the maintenance of a previously
    granted extension. In making the determination of substantial
    harm, the court shall consider, among other relevant factors,
    the level of actual use of the terminals or gates which are the
    subject of the lease, the public interest in actual use of such
    terminals or gates, the existence of competing demands for the
    use of such terminals or gates, the effect of the court's
    extension or termination of the period of time to assume or
    reject the lease on such debtor's ability to successfully
    reorganize under chapter 11 of this title, and whether the
    trustee of the affected air carrier is capable of continuing to
    comply with its obligations under section 365(d)(3) of this
    title.]
        (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.
        [(10)] (5) The trustee shall timely perform all of the
    obligations of the debtor, except those specified in section
    365(b)(2), first arising from or after 60 days after the order
    for relief in a case under chapter 11 of this title under an
    unexpired lease of personal property (other than personal
    property leased to an individual primarily for personal,
    family, or household purposes), until such lease is assumed or
    rejected notwithstanding section 503(b)(1) of this title,
    unless the court, after notice and a hearing and based on the
    equities of the case, orders otherwise with respect to the
    obligations or timely performance thereof. This subsection
    shall not be deemed to affect the trustee's obligations under
    the provisions of subsection (b) or (f). Acceptance of any such
    performance does not constitute waiver or relinquishment of the
    lessor's rights under such lease or under this title.

               *       *       *       *       *       *       *

        (f)(1) Except as provided in [subsection] subsections (b)
    and (c) of this section, notwithstanding a provision in an
    executory contract or unexpired lease of the debtor, or in
    applicable law, that prohibits, restricts, or conditions the
    assignment of such contract or lease, the trustee may assign
    such contract or lease under paragraph (2) of this subsection[;
    except that the trustee may not assign an unexpired lease of
    nonresidential real property under which the debtor is an
    affected air carrier that is the lessee of an aircraft terminal
    or aircraft gate if there has occurred a termination event].

               *       *       *       *       *       *       *

        (p)(1) If a lease of personal property is rejected or not
    timely assumed by the trustee under subsection (d), the leased
    property is no longer property of the estate and the stay under
    section 362(a) is automatically terminated.
        (2)(A) If the debtor in a case under chapter 7 is an
    individual, the debtor may notify the creditor in writing that
    the debtor desires to assume the lease. Upon being so notified,
    the creditor may, at its option, notify the debtor that it is
    willing to have the lease assumed by the debtor and may
    condition such assumption on cure of any outstanding default on
    terms set by the contract.
        (B) If, not later than 30 days after notice is provided
    under subparagraph (A), the debtor notifies the lessor in
    writing that the lease is assumed, the liability under the
    lease will be assumed by the debtor and not by the estate.
        (C) The stay under section 362 and the injunction under
    section 524(a)(2) shall not be violated by notification of the
    debtor and negotiation of cure under this subsection.
        (3) In a case under chapter 11 in which the debtor is an
    individual and in a case under chapter 13, if the debtor is the
    lessee with respect to personal property and the lease is not
    assumed in the plan confirmed by the court, the lease is deemed
    rejected as of the conclusion of the hearing on confirmation.
    If the lease is rejected, the stay under section 362 and any
    stay under section 1301 is automatically terminated with
    respect to the property subject to the lease.

    Sec. 366. Utility service

        (a) Except as provided in [subsection (b)] subsections (b)
    and (c) of this section, a utility may not alter, refuse, or
    discontinue service to, or discriminate against, the trustee or
    the debtor solely on the basis of the commencement of a case
    under this title or that a debt owed by the debtor to such
    utility for service rendered before the order for relief was
    not paid when due.

               *       *       *       *       *       *       *

        (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.

               *       *       *       *       *       *       *

                CHAPTER 5--CREDITORS, THE DEBTOR, AND THE ESTATE

                       SUBCHAPTER I--CREDITORS AND CLAIMS

    Sec.
    501.  Filing of proofs of claims or interests.
         * * * * * * *
    511.  Rate of interest on tax claims.
         * * * * * * *

                   SUBCHAPTER II--DEBTOR'S DUTIES AND BENEFITS

    521.  Debtor's duties.
         * * * * * * *
    526.  Restrictions on debt relief agencies.
    527.  Disclosures.
    528.  Requirements for debt relief agencies.
         * * * * * * *

                           SUBCHAPTER III--THE ESTATE

    541.  Property of the estate.
         * * * * * * *
    [555.  Contractual right to liquidate a securities contract.
    [556.  Contractual right to liquidate a commodity contract or forward
              contract.]
    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.
         * * * * * * *
    [559.  Contractual right to liquidate a repurchase agreement.
    [560.  Contractual right to terminate a swap agreement.]
    559.  Contractual right to liquidate, terminate, or accelerate a
              repurchase agreement.
    560.  Contractual right to liquidate, terminate, or accelerate a swap
              agreement.
    561.  Contractual right to terminate, liquidate, accelerate, or offset
              under a master netting agreement and across contracts;
              proceedings under chapter 15.
    562.  Timing of damage measure in connection with swap agreements,
              securities contracts, forward contracts, commodity contracts,
              repurchase agreements, or master netting agreements.

                       SUBCHAPTER I--CREDITORS AND CLAIMS

    Sec. 501. Filing of proofs of claims or interests

        (a) * * *
              * * * * * * *
        (e) A claim arising from the liability of a debtor for fuel
    use tax assessed consistent with the requirements of section
    31705 of title 49 may be filed by the base jurisdiction
    designated pursuant to the International Fuel Tax Agreement (as
    defined in section 31701 of title 49) and, if so filed, shall
    be allowed as a single claim.

    Sec. 502. Allowance of claims or interests

        (a) * * *
        (b) Except as provided in subsections (e)(2), (f), (g), (h)
    and (i) of this section, if such objection to a claim is made,
    the court, after notice and a hearing, shall determine the
    amount of such claim in lawful currency of the United States as
    of the date of the filing of the petition, and shall allow such
    claim in such amount, except to the extent that--
                (1) * * *

               *       *       *       *       *       *       *

                (9) proof of such claim is not timely filed, except
            to the extent tardily filed as permitted under
            paragraph (1), (2), or (3) of section 726(a) of this
            title or under the Federal Rules of Bankruptcy
            Procedure, except that a claim of a governmental unit
            shall be timely filed if it is filed before 180 days
            after the date of the order for relief or such later
            time as the Federal Rules of Bankruptcy Procedure may
            provide, and except that in a case under chapter 13, a
            claim of a governmental unit for a tax with respect to
            a return filed under section 1308 shall be timely if
            the claim is filed on or before the date that is 60
            days after the date on which such return was filed as
            required.

               *       *       *       *       *       *       *

        (g)(1) A claim arising from the rejection, under section
    365 of this title or under a plan under chapter 9, 11, 12, or
    13 of this title, of an executory contract or unexpired lease
    of the debtor that has not been assumed shall be determined,
    and shall be allowed under subsection (a), (b), or (c) of this
    section or disallowed under subsection (d) or (e) of this
    section, the same as if such claim had arisen before the date
    of the filing of the petition.
        (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.

               *       *       *       *       *       *       *

        (k)(1) The court, on the motion of the debtor and after a
    hearing, may reduce a claim filed under this section based in
    whole on an unsecured consumer debt by not more than 20 percent
    of the claim, if--
                (A) the claim was filed by a creditor who
            unreasonably refused to negotiate a reasonable
            alternative repayment schedule proposed on behalf of
            the debtor by an approved nonprofit budget and credit
            counseling agency described in section 111;
                (B) the offer of the debtor under subparagraph
            (A)--
                        (i) was made at least 60 days before the
                    date of the filing of the petition; and
                        (ii) provided for payment of at least 60
                    percent of the amount of the debt over a period
                    not to exceed the repayment period of the loan,
                    or a reasonable extension thereof; and
                (C) no part of the debt under the alternative
            repayment schedule is nondischargeable.
        (2) The debtor shall have the burden of proving, by clear
    and convincing evidence, that--
                (A) the creditor unreasonably refused to consider
            the debtor's proposal; and
                (B) the proposed alternative repayment schedule was
            made prior to expiration of the 60-day period specified
            in paragraph (1)(B)(i).

    Sec. 503. Allowance of administrative expenses

        (a) * * *
        (b) After notice and a hearing, there shall be allowed
    administrative expenses, other than claims allowed under
    section 502(f) of this title, including--
                (1)[(A) the actual, necessary costs and expenses of
            preserving the estate, including wages, salaries, or
            commissions for services rendered after the
            commencement of the case;] (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;
                (B) any tax--
                        (i) incurred by the estate, whether secured
                    or unsecured, including property taxes for
                    which liability is in rem, in personam, or
                    both, except a tax of a kind specified in
                    section 507(a)(8) of this title; or
                        (ii) attributable to an excessive allowance
                    of a tentative carryback adjustment that the
                    estate received, whether the taxable year to
                    which such adjustment relates ended before or
                    after the commencement of the case; [and]
                (C) any fine, penalty, or reduction in credit
            relating to a tax of a kind specified in subparagraph
            (B) of this paragraph; and
                (D) notwithstanding the requirements of subsection
            (a), a governmental unit shall not be required to file
            a request for the payment of an expense described in
            subparagraph (B) or (C), as a condition of its being an
            allowed administrative expense;

               *       *       *       *       *       *       *

                (4) reasonable compensation for professional
            services rendered by an attorney or an accountant of an
            entity whose expense is allowable under subparagraph
            (A), (B), (C), (D), or (E) of paragraph (3) of this
            subsection, based on the time, the nature, the extent,
            and the value of such services, and the cost of
            comparable services other than in a case under this
            title, and reimbursement for actual, necessary expenses
            incurred by such attorney or accountant;
                (5) reasonable compensation for services rendered
            by an indenture trustee in making a substantial
            contribution in a case under chapter 9 or 11 of this
            title, based on the time, the nature, the extent, and
            the value of such services, and the cost of comparable
            services other than in a case under this title; [and]
                (6) the fees and mileage payable under chapter 119
            of title 28[.];
                (7) with respect to a nonresidential real property
            lease previously assumed under section 365, and
            subsequently rejected, a sum equal to all monetary
            obligations due, excluding those arising from or
            relating to a failure to operate or a penalty
            provision, for the period of 2 years following the
            later of the rejection date or the date of actual
            turnover of the premises, without reduction or setoff
            for any reason whatsoever except for sums actually
            received or to be received from an entity other than
            the debtor, and the claim for remaining sums due for
            the balance of the term of the lease shall be a claim
            under section 502(b)(6);
                (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
                (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.
        (c) Notwithstanding subsection (b), there shall neither be
    allowed, nor paid--
                (1) 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--
                        (A) 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;
                        (B) the services provided by the person are
                    essential to the survival of the business; and
                        (C) 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;
                (2) a severance payment to an insider of the
            debtor, unless--
                        (A) the payment is part of a program that
                    is generally applicable to all full-time
                    employees; and
                        (B) 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
                (3) other transfers or obligations that are outside
            the ordinary course of business and not justified by
            the facts and circumstances of the case, including
            transfers made to, or obligations incurred for the
            benefit of, officers, managers, or consultants hired
            after the date of the filing of the petition.

    Sec. 504. Sharing of compensation

        (a) * * *

               *       *       *       *       *       *       *

        (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. 505. Determination of tax liability

        (a)(1) * * *
        (2) The court may not so determine--
                (A) the amount or legality of a tax, fine, penalty,
            or addition to tax if such amount or legality was
            contested before and adjudicated by a judicial or
            administrative tribunal of competent jurisdiction
            before the commencement of the case under this title;
            [or]
                (B) any right of the estate to a tax refund, before
            the earlier of--
                        (i) * * *
                        (ii) a determination by such governmental
                    unit of such request[.]; or
                (C) the amount or legality of any amount arising in
            connection with an ad valorem tax on real or personal
            property of the estate, if the applicable period for
            contesting or redetermining that amount under any law
            (other than a bankruptcy law) has expired.
        (b)(1)(A) The clerk shall maintain a list under which a
    Federal, State, or local governmental unit responsible for the
    collection of taxes within the district may--
                (i) designate an address for service of requests
            under this subsection; and
                (ii) describe where further information concerning
            additional requirements for filing such requests may be
            found.
        (B) If such governmental unit does not designate an address
    and provide such address to the clerk under subparagraph (A),
    any request made under this subsection may be served at the
    address for the filing of a tax return or protest with the
    appropriate taxing authority of such governmental unit.
        [(b)] (2) A trustee may request a determination of any
    unpaid liability of the estate for any tax incurred during the
    administration of the case by submitting a tax return for such
    tax and a request for such a determination to the governmental
    unit charged with responsibility for collection or
    determination of such tax at the address and in the manner
    designated in paragraph (1). Unless such return is fraudulent,
    or contains a material misrepresentation, the estate, the
    trustee, the debtor, and any successor to the debtor are
    discharged from any liability for such tax--
                [(1)] (A) upon payment of the tax shown on such
            return, if--
                        [(A)] (i) such governmental unit does not
                    notify the trustee, within 60 days after such
                    request, that such return has been selected for
                    examination; or
                        [(B)] (ii) such governmental unit does not
                    complete such an examination and notify the
                    trustee of any tax due, within 180 days after
                    such request or within such additional time as
                    the court, for cause, permits;
                [(2)] (B) upon payment of the tax determined by the
            court, after notice and a hearing, after completion by
            such governmental unit of such examination; or
                [(3)] (C) upon payment of the tax determined by
            such governmental unit to be due.

    Sec. 506. Determination of secured status

        (a)(1) An allowed claim of a creditor secured by a lien on
    property in which the estate has an interest, or that is
    subject to setoff under section 553 of this title, is a secured
    claim to the extent of the value of such creditor's interest in
    the estate's interest in such property, or to the extent of the
    amount subject to setoff, as the case may be, and is an
    unsecured claim to the extent that the value of such creditor's
    interest or the amount so subject to setoff is less than the
    amount of such allowed claim. Such value shall be determined in
    light of the purpose of the valuation and of the proposed
    disposition or use of such property, and in conjunction with
    any hearing on such disposition or use or on a plan affecting
    such creditor's interest.
        (2) If the debtor is an individual in a case under chapter
    7 or 13, such value with respect to personal property securing
    an allowed claim shall be determined based on the replacement
    value of such property as of the date of the filing of the
    petition without deduction for costs of sale or marketing. With
    respect to property acquired for personal, family, or household
    purposes, replacement value shall mean the price a retail
    merchant would charge for property of that kind considering the
    age and condition of the property at the time value is
    determined.
        (b) To the extent that an allowed secured claim is secured
    by property the value of which, after any recovery under
    subsection (c) of this section, is greater than the amount of
    such claim, there shall be allowed to the holder of such claim,
    interest on such claim, and any reasonable fees, costs, or
    charges provided for under the agreement or State statute under
    which such claim arose.
        (c) The trustee may recover from property securing an
    allowed secured claim the reasonable, necessary costs and
    expenses of preserving, or disposing of, such property to the
    extent of any benefit to the holder of such claim, including
    the payment of all ad valorem property taxes with respect to
    the property.

               *       *       *       *       *       *       *

    Sec. 507. Priorities

        (a) The following expenses and claims have priority in the
    following order:
                (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.
                [(1) First] (2) Second, administrative expenses
            allowed under section 503(b) of this title, and any
            fees and charges assessed against the estate under
            chapter 123 of title 28.
                [(2) Second] (3) Third, unsecured claims allowed
            under section 502(f) of this title.
                [(3) Third] (4) Fourth, allowed unsecured claims,
            but only to the extent of [$4,000] $10,000 for each
            individual or corporation, as the case may be, earned
            within [90] 180 days before the date of the filing of
            the petition or the date of the cessation of the
            debtor's business, whichever occurs first, for--
                        (A) * * *
                        (B) sales commissions earned by an
                    individual or by a corporation with only 1
                    employee, acting as an independent contractor
                    in the sale of goods or services for the debtor
                    in the ordinary course of the debtor's business
                    if, and only if, during the 12 months preceding
                    that date, at least 75 percent of the amount
                    that the individual or corporation earned by
                    acting as an independent contractor in the sale
                    of goods or services was earned from the
                    debtor[;].
                [(4) Fourth] (5) Fifth, allowed unsecured claims
            for contributions to an employee benefit plan--
                        (A) * * *
                        (B) for each such plan, to the extent of--
                                (i) the number of employees covered
                            by each such plan multiplied by
                            [$4,000] $10,000; less
                                (ii) the aggregate amount paid to
                            such employees under paragraph [(3)]
                            (4) of this subsection, plus the
                            aggregate amount paid by the estate on
                            behalf of such employees to any other
                            employee benefit plan.
                [(5) Fifth] (6) Sixth, allowed unsecured claims of
            persons--
                        (A) * * *

               *       *       *       *       *       *       *

                [(6) Sixth] (7) Seventh, allowed unsecured claims
            of individuals, to the extent of $1,800 for each such
            individual, arising from the deposit, before the
            commencement of the case, of money in connection with
            the purchase, lease, or rental of property, or the
            purchase of services, for the personal, family, or
            household use of such individuals, that were not
            delivered or provided.
                [(7) Seventh, allowed claims for debts to a spouse,
            former spouse, or child of the debtor, for alimony to,
            maintenance for, or support of such spouse or child, in
            connection with a separation agreement, divorce decree
            or other order of a court of record, determination made
            in accordance with State or territorial law by a
            governmental unit, or property settlement agreement,
            but not to the extent that such debt--
                        [(A) is assigned to another entity,
                    voluntarily, by operation of law, or otherwise;
                    or
                        [(B) includes a liability designated as
                    alimony, maintenance, or support, unless such
                    liability is actually in the nature of alimony,
                    maintenance or support.]
                (8) Eighth, allowed unsecured claims of
            governmental units, only to the extent that such claims
            are for--
                        (A) a tax on or measured by income or gross
                    receipts for a taxable year ending on or before
                    the date of the filing of the petition--
                                (i) [for a taxable year ending on
                            or before the date of the filing of the
                            petition] for which a return, if
                            required, is last due, including
                            extensions, after three years before
                            the date of the filing of the petition;
                                [(ii) assessed within 240 days,
                            plus any time plus 30 days during which
                            an offer in compromise with respect to
                            such tax that was made within 240 days
                            after such assessment was pending,
                            before the date of the filing of the
                            petition; or]
                                (ii) assessed within 240 days
                            before the date of the filing of the
                            petition, exclusive of--
                                        (I) any time during which
                                    an offer in compromise with
                                    respect to that tax was pending
                                    or in effect during that 240-
                                    day period, plus 30 days; and
                                        (II) any time during which
                                    a stay of proceedings against
                                    collections was in effect in a
                                    prior case under this title
                                    during that 240-day period,
                                    plus 90 days.

               *       *       *       *       *       *       *

                        (B) a property tax [assessed] incurred
                    before the commencement of the case and last
                    payable without penalty after one year before
                    the date of the filing of the petition;

               *       *       *       *       *       *       *

                        (D) an employment tax on a wage, salary, or
                    commission of a kind specified in paragraph
                    [(3)] (4) of this subsection earned from the
                    debtor before the date of the filing of the
                    petition, whether or not actually paid before
                    such date, for which a return is last due,
                    under applicable law or under any extension,
                    after three years before the date of the filing
                    of the petition;

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

                (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.
        (b) If the trustee, under section 362, 363, or 364 of this
    title, provides adequate protection of the interest of a holder
    of a claim secured by a lien on property of the debtor and if,
    notwithstanding such protection, such creditor has a claim
    allowable under subsection [(a)(1)] (a)(2) of this section
    arising from the stay of action against such property under
    section 362 of this title, from the use, sale, or lease of such
    property under section 363 of this title, or from the granting
    of a lien under section 364(d) of this title, then such
    creditor's claim under such subsection shall have priority over
    every other claim allowable under such subsection.

               *       *       *       *       *       *       *

        (d) An entity that is subrogated to the rights of a holder
    of a claim of a kind specified in subsection [(a)(3)] (a)(1),
    (a)(4), (a)(5), (a)(6), (a)(7), (a)(8), or (a)(9) of this
    section is not subrogated to the right of the holder of such
    claim to priority under such subsection.

    Sec. 508. Effect of distribution other than under this title

        [(a) If a creditor receives, in a foreign proceeding,
    payment of, or a transfer of property on account of, a claim
    that is allowed under this title, such creditor may not receive
    any payment under this title on account of such claim until
    each of the other holders of claims on account of which such
    holders are entitled to share equally with such creditor under
    this title has received payment under this title equal in value
    to the consideration received by such creditor in such foreign
    proceeding.]
        [(b)] If a creditor of a partnership debtor receives, from
    a general partner that is not a debtor in a case under chapter
    7 of this title, payment of, or a transfer of property on
    account of, a claim that is allowed under this title and that
    is not secured by a lien on property of such partner, such
    creditor may not receive any payment under this title on
    account of such claim until each of the other holders of claims
    on account of which such holders are entitled to share equally
    with such creditor under this title has received payment under
    this title equal in value to the consideration received by such
    creditor from such general partner.

               *       *       *       *       *       *       *

    Sec. 511. Rate of interest on tax claims

        (a) If any provision of this title requires the payment of
    interest on a tax claim or on an administrative expense tax, or
    the payment of interest to enable a creditor to receive the
    present value of the allowed amount of a tax claim, the rate of
    interest shall be the rate determined under applicable
    nonbankruptcy law.
        (b) In the case of taxes paid under a confirmed plan under
    this title, the rate of interest shall be determined as of the
    calendar month in which the plan is confirmed.

                  SUBCHAPTER II--DEBTOR'S DUTIES AND BENEFITS

    Sec. 521. Debtor's duties

        (a) The debtor shall--
                [(1) file a list of creditors, and unless the court
            orders otherwise, a schedule of assets and liabilities,
            a schedule of current income and current expenditures,
            and a statement of the debtor's financial affairs;]
                (1) file--
                        (A) a list of creditors; and
                        (B) unless the court orders otherwise--
                                (i) a schedule of assets and
                            liabilities;
                                (ii) a schedule of current income
                            and current expenditures;
                                (iii) a statement of the debtor's
                            financial affairs and, if section
                            342(b) applies, a certificate--
                                        (I) of an attorney whose
                                    name is indicated on the
                                    petition as the attorney for
                                    the debtor, or a bankruptcy
                                    petition preparer signing the
                                    petition under section
                                    110(b)(1), indicating that such
                                    attorney or the bankruptcy
                                    petition preparer delivered to
                                    the debtor the notice required
                                    by section 342(b); or
                                        (II) if no attorney is so
                                    indicated, and no bankruptcy
                                    petition preparer signed the
                                    petition, of the debtor that
                                    such notice was received and
                                    read by the debtor;
                                (iv) copies of all payment advices
                            or other evidence of payment received
                            within 60 days before the date of the
                            filing of the petition, by the debtor
                            from any employer of the debtor;
                                (v) a statement of the amount of
                            monthly net income, itemized to show
                            how the amount is calculated; and
                                (vi) a statement disclosing any
                            reasonably anticipated increase in
                            income or expenditures over the 12-
                            month period following the date of the
                            filing of the petition;
                (2) if an individual debtor's schedule of assets
            and liabilities includes [consumer] debts which are
            secured by property of the estate--
                        (A)  * * *
                        (B) within [forty-five days after the
                    filing of a notice of intent under this
                    section] 30 days after the first date set for
                    the meeting of creditors under section 341(a),
                    or within such additional time as the court,
                    for cause, within such [forty-five day] 30-day
                    period fixes, the debtor shall perform his
                    intention with respect to such property, as
                    specified by subparagraph (A) of this
                    paragraph; and
                        (C) nothing in subparagraphs (A) and (B) of
                    this paragraph shall alter the debtor's or the
                    trustee's rights with regard to such property
                    under this title, except as provided in section
                    362(h);
                (3) if a trustee is serving in the case or an
            auditor serving under section 586(f) of title 28,
            cooperate with the trustee as necessary to enable the
            trustee to perform the trustee's duties under this
            title;
                (4) if a trustee is serving in the case or an
            auditor serving under section 586(f) of title 28,
            surrender to the trustee all property of the estate and
            any recorded information, including books, documents,
            records, and papers, relating to property of the
            estate, whether or not immunity is granted under
            section 344 of this title[, and];
                (5) appear at the hearing required under section
            524(d) of this title[.];
                (6) in a case under chapter 7 of this title in
            which the debtor is an individual, not retain
            possession of personal property as to which a creditor
            has an allowed claim for the purchase price secured in
            whole or in part by an interest in such personal
            property unless the debtor, not later than 45 days
            after the first meeting of creditors under section
            341(a), either--
                        (A) enters into an agreement with the
                    creditor pursuant to section 524(c) with
                    respect to the claim secured by such property;
                    or
                        (B) redeems such property from the security
                    interest pursuant to section 722.
                (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.
    If the debtor fails to so act within the 45-day period referred
    to in paragraph (6), the stay under section 362(a) is
    terminated with respect to the personal property of the estate
    or of the debtor which is affected, such property shall no
    longer be property of the estate, and the creditor may take
    whatever action as to such property as is permitted by
    applicable nonbankruptcy law, unless the court determines on
    the motion of the trustee filed before the expiration of such
    45-day period, and after notice and a hearing, that such
    property is of consequential value or benefit to the estate,
    orders appropriate adequate protection of the creditor's
    interest, and orders the debtor to deliver any collateral in
    the debtor's possession to the trustee.
        (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).
        (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).
        (d) If the debtor fails timely to take the action specified
    in subsection (a)(6) of this section, or in paragraphs (1) and
    (2) of section 362(h), with respect to property which a lessor
    or bailor owns and has leased, rented, or bailed to the debtor
    or as to which a creditor holds a security interest not
    otherwise voidable under section 522(f), 544, 545, 547, 548, or
    549, nothing in this title shall prevent or limit the operation
    of a provision in the underlying lease or agreement that has
    the effect of placing the debtor in default under such lease or
    agreement by reason of the occurrence, pendency, or existence
    of a proceeding under this title or the insolvency of the
    debtor. Nothing in this subsection shall be deemed to justify
    limiting such a provision in any other circumstance.
        (e)(1) If the debtor in a case under chapter 7 or 13 is an
    individual and if a creditor files with the court at any time a
    request to receive a copy of the petition, schedules, and
    statement of financial affairs filed by the debtor, then the
    court shall make such petition, such schedules, and such
    statement available to such creditor.
        (2)(A) The debtor shall provide--
                (i) not later than 7 days before the date first set
            for the first meeting of creditors, to the trustee a
            copy of the Federal income tax return required under
            applicable law (or at the election of the debtor, a
            transcript of such return) for the most recent tax year
            ending immediately before the commencement of the case
            and for which a Federal income tax return was filed;
            and
                (ii) at the same time the debtor complies with
            clause (i), a copy of such return (or if elected under
            clause (i), such transcript) to any creditor that
            timely requests such copy.
        (B) If the debtor fails to comply with clause (i) or (ii)
    of subparagraph (A), the court shall dismiss the case unless
    the debtor demonstrates that the failure to so comply is due to
    circumstances beyond the control of the debtor.
        (C) If a creditor requests a copy of such tax return or
    such transcript and if the debtor fails to provide a copy of
    such tax return or such transcript to such creditor at the time
    the debtor provides such tax return or such transcript to the
    trustee, then the court shall dismiss the case unless the
    debtor demonstrates that the failure to provide a copy of such
    tax return or such transcript is due to circumstances beyond
    the control of the debtor.
        (3) If a creditor in a case under chapter 13 files with the
    court at any time a request to receive a copy of the plan filed
    by the debtor, then the court shall make available to such
    creditor a copy of the plan--
                (A) at a reasonable cost; and
                (B) not later than 5 days after such request is
            filed.
        (f) At the request of the court, the United States trustee,
    or any party in interest in a case under chapter 7, 11, or 13,
    a debtor who is an individual shall file with the court--
                (1) at the same time filed with the taxing
            authority, a copy of each Federal income tax return
            required under applicable law (or at the election of
            the debtor, a transcript of such tax return) with
            respect to each tax year of the debtor ending while the
            case is pending under such chapter;
                (2) at the same time filed with the taxing
            authority, each Federal income tax return required
            under applicable law (or at the election of the debtor,
            a transcript of such tax return) that had not been
            filed with such authority as of the date of the
            commencement of the case and that was subsequently
            filed for any tax year of the debtor ending in the 3-
            year period ending on the date of the commencement of
            the case;
                (3) a copy of each amendment to any Federal income
            tax return or transcript filed with the court under
            paragraph (1) or (2); and
                (4) in a case under chapter 13--
                        (A) on the date that is either 90 days
                    after the end of such tax year or 1 year after
                    the date of the commencement of the case,
                    whichever is later, if a plan is not confirmed
                    before such later date; and
                        (B) annually after the plan is confirmed
                    and until the case is closed, not later than
                    the date that is 45 days before the anniversary
                    of the confirmation of the plan;
            a statement, under penalty of perjury, of the income
            and expenditures of the debtor during the tax year of
            the debtor most recently concluded before such
            statement is filed under this paragraph, and of the
            monthly income of the debtor, that shows how income,
            expenditures, and monthly income are calculated.
        (g)(1) A statement referred to in subsection (f)(4) shall
    disclose--
                (A) the amount and sources of the income of the
            debtor;
                (B) the identity of any person responsible with the
            debtor for the support of any dependent of the debtor;
            and
                (C) the identity of any person who contributed, and
            the amount contributed, to the household in which the
            debtor resides.
        (2) The tax returns, amendments, and statement of income
    and expenditures described in subsections (e)(2)(A) and (f)
    shall be available to the United States trustee (or the
    bankruptcy administrator, if any), the trustee, and any party
    in interest for inspection and copying, subject to the
    requirements of section 315(c) of the Bankruptcy Abuse
    Prevention and Consumer Protection Act of 2005.
        (h) If requested by the United States trustee or by the
    trustee, the debtor shall provide--
                (1) a document that establishes the identity of the
            debtor, including a driver's license, passport, or
            other document that contains a photograph of the
            debtor; or
                (2) such other personal identifying information
            relating to the debtor that establishes the identity of
            the debtor.
        (i)(1) Subject to paragraphs (2) and (4) and
    notwithstanding section 707(a), if an individual debtor in a
    voluntary case under chapter 7 or 13 fails to file all of the
    information required under subsection (a)(1) within 45 days
    after the date of the filing of the petition, the case shall be
    automatically dismissed effective on the 46th day after the
    date of the filing of the petition.
        (2) Subject to paragraph (4) and with respect to a case
    described in paragraph (1), any party in interest may request
    the court to enter an order dismissing the case. If requested,
    the court shall enter an order of dismissal not later than 5
    days after such request.
        (3) Subject to paragraph (4) and upon request of the debtor
    made within 45 days after the date of the filing of the
    petition described in paragraph (1), the court may allow the
    debtor an additional period of not to exceed 45 days to file
    the information required under subsection (a)(1) if the court
    finds justification for extending the period for the filing.
        (4) Notwithstanding any other provision of this subsection,
    on the motion of the trustee filed before the expiration of the
    applicable period of time specified in paragraph (1), (2), or
    (3), and after notice and a hearing, the court may decline to
    dismiss the case if the court finds that the debtor attempted
    in good faith to file all the information required by
    subsection (a)(1)(B)(iv) and that the best interests of
    creditors would be served by administration of the case.
        (j)(1) Notwithstanding any other provision of this title,
    if the debtor fails to file a tax return that becomes due after
    the commencement of the case or to properly obtain an extension
    of the due date for filing such return, the taxing authority
    may request that the court enter an order converting or
    dismissing the case.
        (2) If the debtor does not file the required return or
    obtain the extension referred to in paragraph (1) within 90
    days after a request is filed by the taxing authority under
    that paragraph, the court shall convert or dismiss the case,
    whichever is in the best interests of creditors and the estate.

    Sec. 522. Exemptions

        (a)  * * *
        [(b) Notwithstanding] (b)(1) Notwithstanding section 541 of
    this title, an individual debtor may exempt from property of
    the estate the property listed in either paragraph [(1)] (2)
    or, in the alternative, paragraph [(2)] (3) of this subsection.
    In joint cases filed under section 302 of this title and
    individual cases filed under section 301 or 303 of this title
    by or against debtors who are husband and wife, and whose
    estates are ordered to be jointly administered under Rule
    1015(b) of the Federal Rules of Bankruptcy Procedure, one
    debtor may not elect to exempt property listed in paragraph
    [(1)] (2) and the other debtor elect to exempt property listed
    in paragraph [(2)] (3) of this subsection. If the parties
    cannot agree on the alternative to be elected, they shall be
    deemed to elect paragraph [(1)] (2), where such election is
    permitted under the law of the jurisdiction where the case is
    filed. [Such property is--]
                [(1) property that is specified under subsection
            (d) of this section, unless the State law that is
            applicable to the debtor under paragraph (2)(A) of this
            subsection specifically does not so authorize; or, in
            the alternative,]
        (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.
                [(2)(A) any property]
        (3) Property listed in this paragraph is--
                (A) subject to subsections (o) and (p), any
            property that is exempt under Federal law, other than
            subsection (d) of this section, or State or local law
            that is applicable on the date of the filing of the
            petition at the place in which the debtor's domicile
            has been located for the [180 days] 730 days
            immediately preceding the date of the filing of the
            petition[, or for a longer portion of such 180-day
            period than in any other place] 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]
                (B) any interest in property in which the debtor
            had, immediately before the commencement of the case,
            an interest as a tenant by the entirety or joint tenant
            to the extent that such interest as a tenant by the
            entirety or joint tenant is exempt from process under
            applicable nonbankruptcy law[.]; and
                (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.
    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).
        (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.
        (c) Unless the case is dismissed, property exempted under
    this section is not liable during or after the case for any
    debt of the debtor that arose, or that is determined under
    section 502 of this title as if such debt had arisen, before
    the commencement of the case, except--
                [(1) a debt of a kind specified in section
            523(a)(1) or 523(a)(5) of this title;]
                (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));

               *       *       *       *       *       *       *

        (d) The following property may be exempted under subsection
    [(b)(1)] (b)(2) of this section:
                (1)  * * *

               *       *       *       *       *       *       *

                (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.

               *       *       *       *       *       *       *

        (f)(1) Notwithstanding any waiver of exemptions but subject
    to paragraph (3), the debtor may avoid the fixing of a lien on
    an interest of the debtor in property to the extent that such
    lien impairs an exemption to which the debtor would have been
    entitled under subsection (b) of this section, if such lien
    is--
                (A) a judicial lien, other than a judicial lien
            that secures a debt[--
                        [(i) to a spouse, former spouse, or child
                    of the debtor, for alimony to, maintenance for,
                    or support of such spouse or child, in
                    connection with a separation agreement, divorce
                    decree or other order of a court of record,
                    determination made in accordance with State or
                    territorial law by a governmental unit, or
                    property settlement agreement; and
                        [(ii) to the extent that such debt--
                                [(I) is not assigned to another
                            entity, voluntarily, by operation of
                            law, or otherwise; and
                                [(II) includes a liability
                            designated as alimony, maintenance, or
                            support, unless such liability is
                            actually in the nature of alimony,
                            maintenance or support.; or] of a kind
                            that is specified in section 523(a)(5);
                            or

               *       *       *       *       *       *       *

        (4)(A) Subject to subparagraph (B), for purposes of
    paragraph (1)(B), the term ``household goods'' means--
                (i) clothing;
                (ii) furniture;
                (iii) appliances;
                (iv) 1 radio;
                (v) 1 television;
                (vi) 1 VCR;
                (vii) linens;
                (viii) china;
                (ix) crockery;
                (x) kitchenware;
                (xi) educational materials and educational
            equipment primarily for the use of minor dependent
            children of the debtor;
                (xii) medical equipment and supplies;
                (xiii) furniture exclusively for the use of minor
            children, or elderly or disabled dependents of the
            debtor;
                (xiv) personal effects (including the toys and
            hobby equipment of minor dependent children and wedding
            rings) of the debtor and the dependents of the debtor;
            and
                (xv) 1 personal computer and related equipment.
        (B) The term ``household goods'' does not include--
                (i) works of art (unless by or of the debtor, or
            any relative of the debtor);
                (ii) electronic entertainment equipment with a fair
            market value of more than $500 in the aggregate (except
            1 television, 1 radio, and 1 VCR);
                (iii) items acquired as antiques with a fair market
            value of more than $500 in the aggregate;
                (iv) jewelry with a fair market value of more than
            $500 in the aggregate (except wedding rings); and
                (v) a computer (except as otherwise provided for in
            this section), motor vehicle (including a tractor or
            lawn tractor), boat, or a motorized recreational
            device, conveyance, vehicle, watercraft, or aircraft.

               *       *       *       *       *       *       *

        (g) Notwithstanding sections 550 and 551 of this title, the
    debtor may exempt under subsection (b) of this section property
    that the trustee recovers under section 510(c)(2), 542, 543,
    550, 551, or 553 of this title, to the extent that the debtor
    could have exempted such property under subsection (b) of this
    section if such property had not been transferred, if--
                (1)  * * *
                (2) the debtor could have avoided such transfer
            under [subsection (f)(2)] subsection (f)(1)(B) of this
            section.

               *       *       *       *       *       *       *

        (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.
        (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.
        (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.

    Sec. 523. Exceptions to discharge

        (a) A discharge under section 727, 1141, 1228(a), 1228(b),
    or 1328(b) of this title does not discharge an individual
    debtor from any debt--
                (1) for a tax or a customs duty--
                        (A) of the kind and for the periods
                    specified in section [507(a)(2)] 507(a)(3) or
                    507(a)(8) of this title, whether or not a claim
                    for such tax was filed or allowed;
                        (B) with respect to which a return, or
                    equivalent report or notice, if required--
                                (i) was not filed or given; or
                                (ii) was filed or given after the
                            date on which such return, report, or
                            notice was last due, under applicable
                            law or under any extension, and after
                            two years before the date of the filing
                            of the petition; or

               *       *       *       *       *       *       *

                (2) for money, property, services, or an extension,
            renewal, or refinancing of credit, to the extent
            obtained by--
                        (A)  * * *

               *       *       *       *       *       *       *

                        [(C) for purposes of subparagraph (A) of
                    this paragraph, consumer debts owed to a single
                    creditor and aggregating more than $1,000 for
                    ``luxury goods or services'' incurred by an
                    individual debtor on or within 60 days before
                    the order for relief under this title, or cash
                    advances aggregating more than $1,000 that are
                    extensions of consumer credit under an open end
                    credit plan obtained by an individual debtor on
                    or within 60 days before the order for relief
                    under this title, are presumed to be
                    nondischargeable; ``luxury goods or services''
                    do not include goods or services reasonably
                    acquired for the support or maintenance of the
                    debtor or a dependent of the debtor; an
                    extension of consumer credit under an open end
                    credit plan is to be defined for purposes of
                    this subparagraph as it is defined in the
                    Consumer Credit Protection Act;]
                        (C)(i) for purposes of subparagraph (A)--
                                (I) consumer debts owed to a single
                            creditor and aggregating more than $500
                            for luxury goods or services incurred
                            by an individual debtor on or within 90
                            days before the order for relief under
                            this title are presumed to be
                            nondischargeable; and
                                (II) cash advances aggregating more
                            than $750 that are extensions of
                            consumer credit under an open end
                            credit plan obtained by an individual
                            debtor on or within 70 days before the
                            order for relief under this title, are
                            presumed to be nondischargeable; and
                        (ii) for purposes of this subparagraph--
                                (I) the terms ``consumer'',
                            ``credit'', and ``open end credit
                            plan'' have the same meanings as in
                            section 103 of the Truth in Lending
                            Act; and
                                (II) the term ``luxury goods or
                            services'' does not include goods or
                            services reasonably necessary for the
                            support or maintenance of the debtor or
                            a dependent of the debtor.

               *       *       *       *       *       *       *

                [(5) to a spouse, former spouse, or child of the
            debtor, for alimony to, maintenance for, or support of
            such spouse or child, in connection with a separation
            agreement, divorce decree or other order of a court of
            record, determination made in accordance with State or
            territorial law by a governmental unit, or property
            settlement agreement, but not to the extent that--
                        [(A) such debt is assigned to another
                    entity, voluntarily, by operation of law, or
                    otherwise (other than debts assigned pursuant
                    to section 408(a)(3) of the Social Security
                    Act, or any such debt which has been assigned
                    to the Federal Government or to a State or any
                    political subdivision of such State); or
                        [(B) such debt includes a liability
                    designated as alimony, maintenance, or support,
                    unless such liability is actually in the nature
                    of alimony, maintenance, or support;]
                (5) for a domestic support obligation;

               *       *       *       *       *       *       *

                [(8) for an educational benefit overpayment or loan
            made, insured or guaranteed by a governmental unit, or
            made under any program funded in whole or in part by a
            governmental unit or nonprofit institution, or for an
            obligation to repay funds received as an educational
            benefit, scholarship or stipend, unless excepting such
            debt from discharge under this paragraph will impose an
            undue hardship on the debtor and the debtor's
            dependents;]
                (8) unless excepting such debt from discharge under
            this paragraph would impose an undue hardship on the
            debtor and the debtor's dependents, for--
                        (A)(i) an educational benefit overpayment
                    or loan made, insured, or guaranteed by a
                    governmental unit, or made under any program
                    funded in whole or in part by a governmental
                    unit or nonprofit institution; or
                        (ii) an obligation to repay funds received
                    as an educational benefit, scholarship, or
                    stipend; or
                        (B) any other educational loan that is a
                    qualified education loan, as defined in section
                    221(d)(1) of the Internal Revenue Code of 1986,
                    incurred by a debtor who is an individual;
                (9) for death or personal injury caused by the
            debtor's operation of a [motor vehicle] motor vehicle,
            vessel, or aircraft if such operation was unlawful
            because the debtor was intoxicated from using alcohol,
            a drug, or another substance;

               *       *       *       *       *       *       *

                (14A) incurred to pay a tax to a governmental unit,
            other than the United States, that would be
            nondischargeable under paragraph (1);
                (14B) incurred to pay fines or penalties imposed
            under Federal election law;
                (15) to a spouse, former spouse, or child of the
            debtor and not of the kind described in paragraph (5)
            that is incurred by the debtor in the course of a
            divorce or separation or in connection with a
            separation agreement, divorce decree or other order of
            a court of record, or a determination made in
            accordance with State or territorial law by a
            governmental unit [unless--
                        [(A) the debtor does not have the ability
                    to pay such debt from income or property of the
                    debtor not reasonably necessary to be expended
                    for the maintenance or support of the debtor or
                    a dependent of the debtor and, if the debtor is
                    engaged in a business, for the payment of
                    expenditures necessary for the continuation,
                    preservation, and operation of such business;
                    or
                        [(B) discharging such debt would result in
                    a benefit to the debtor that outweighs the
                    detrimental consequences to a spouse, former
                    spouse, or child of the debtor;];
                (16) for a fee or assessment that becomes due and
            payable after the order for relief to a membership
            association with respect to the debtor's interest in a
            [dwelling] unit that has condominium ownership [or], in
            a share of a cooperative [housing] corporation, [but
            only if such fee or assessment is payable for a period
            during which--
                        [(A) the debtor physically occupied a
                    dwelling unit in the condominium or cooperative
                    project; or
                        [(B) the debtor rented the dwelling unit to
                    a tenant and received payments from the tenant
                    for such period,] 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,
            but nothing in this paragraph shall except from
            discharge the debt of a debtor for a membership
            association fee or assessment for a period arising
            before entry of the order for relief in a pending or
            subsequent bankruptcy case;
                (17) for a fee imposed [by a court] on a prisoner
            by any court for the filing of a case, motion,
            complaint, or appeal, or for other costs and expenses
            assessed with respect to such filing, regardless of an
            assertion of poverty by the debtor under [section
            1915(b) or (f)] subsection (b) or (f)(2) of section
            1915 of title 28 (or a similar non-Federal law), or the
            debtor's status as a prisoner, as defined in section
            1915(h) of title 28 (or a similar non-Federal law);
                [(18) owed under State law to a State or
            municipality that is--
                        [(A) in the nature of support, and
                        [(B) enforceable under part D of title IV
                    of the Social Security Act (42 U.S.C. 601 et
                    seq.); or]
                (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
                (19) that--
                        (A) * * *
                        (B) results, before, on, or after the date
                    on which the petition was filed, from--
                                (i) * * *

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

        (c)(1) Except as provided in subsection (a)(3)(B) of this
    section, the debtor shall be discharged from a debt of a kind
    specified in paragraph (2), (4), [(6), or (15)] or (6) of
    subsection (a) of this section, unless, on request of the
    creditor to whom such debt is owed, and after notice and a
    hearing, the court determines such debt to be excepted from
    discharge under paragraph (2), (4), [(6), or (15)] or (6), as
    the case may be, of subsection (a) of this section.

               *       *       *       *       *       *       *

        (e) Any institution-affiliated party of [a insured] an
    insured depository institution shall be considered to be acting
    in a fiduciary capacity with respect to the purposes of
    subsection (a)(4) or (11).

    Sec. 524. Effect of discharge

        (a) A discharge in a case under this title--
                (1)  * * *

               *       *       *       *       *       *       *

                (3) operates as an injunction against the
            commencement or continuation of an action, the
            employment of process, or an act, to collect or recover
            from, or offset against, property of the debtor of the
            kind specified in section 541(a)(2) of this title that
            is acquired after the commencement of the case, on
            account of any allowable community claim, except a
            community claim that is excepted from discharge under
            [section 523, 1228(a)(1), or 1328(a)(1) of this title,
            or that] section 523, 1228(a)(1), or 1328(a)(1), or
            that would be so excepted, determined in accordance
            with the provisions of sections 523(c) and 523(d) of
            this title, in a case concerning the debtor's spouse
            commenced on the date of the filing of the petition in
            the case concerning the debtor, whether or not
            discharge of the debt based on such community claim is
            waived.

               *       *       *       *       *       *       *

        (c) An agreement between a holder of a claim and the
    debtor, the consideration for which, in whole or in part, is
    based on a debt that is dischargeable in a case under this
    title is enforceable only to any extent enforceable under
    applicable nonbankruptcy law, whether or not discharge of such
    debt is waived, only if--
                (1)  * * *
                [(2)(A) such agreement contains a clear and
            conspicuous statement which advises the debtor that the
            agreement may be rescinded at any time prior to
            discharge or within sixty days after such agreement is
            filed with the court, whichever occurs later, by giving
            notice of rescission to the holder of such claim; and
                [(B) such agreement contains a clear and
            conspicuous statement which advises the debtor that
            such agreement is not required under this title, under
            nonbankruptcy law, or under any agreement not in
            accordance with the provisions of this subsection;]
                (2) the debtor received the disclosures described
            in subsection (k) at or before the time at which the
            debtor signed the agreement;

               *       *       *       *       *       *       *

        (i) The willful failure of a creditor to credit payments
    received under a plan confirmed under this title, unless the
    order confirming the plan is revoked, the plan is in default,
    or the creditor has not received payments required to be made
    under the plan in the manner required by the plan (including
    crediting the amounts required under the plan), shall
    constitute a violation of an injunction under subsection (a)(2)
    if the act of the creditor to collect and failure to credit
    payments in the manner required by the plan caused material
    injury to the debtor.
        (j) Subsection (a)(2) does not operate as an injunction
    against an act by a creditor that is the holder of a secured
    claim, if--
                (1) such creditor retains a security interest in
            real property that is the principal residence of the
            debtor;
                (2) such act is in the ordinary course of business
            between the creditor and the debtor; and
                (3) such act is limited to seeking or obtaining
            periodic payments associated with a valid security
            interest in lieu of pursuit of in rem relief to enforce
            the lien.
        (k)(1) The disclosures required under subsection (c)(2)
    shall consist of the disclosure statement described in
    paragraph (3), completed as required in that paragraph,
    together with the agreement specified in subsection (c),
    statement, declaration, motion and order described,
    respectively, in paragraphs (4) through (8), and shall be the
    only disclosures required in connection with entering into such
    agreement.
        (2) Disclosures made under paragraph (1) shall be made
    clearly and conspicuously and in writing. The terms ``Amount
    Reaffirmed'' and ``Annual Percentage Rate'' shall be disclosed
    more conspicuously than other terms, data or information
    provided in connection with this disclosure, except that the
    phrases ``Before agreeing to reaffirm a debt, review these
    important disclosures'' and ``Summary of Reaffirmation
    Agreement'' may be equally conspicuous. Disclosures may be made
    in a different order and may use terminology different from
    that set forth in paragraphs (2) through (8), except that the
    terms ``Amount Reaffirmed'' and ``Annual Percentage Rate'' must
    be used where indicated.
        (3) The disclosure statement required under this paragraph
    shall consist of the following:
                (A) The statement: ``Part A: Before agreeing to
            reaffirm a debt, review these important disclosures:'';
                (B) Under the heading ``Summary of Reaffirmation
            Agreement'', the statement: ``This Summary is made
            pursuant to the requirements of the Bankruptcy Code'';
                (C) The ``Amount Reaffirmed'', using that term,
            which shall be--
                        (i) the total amount of debt that the
                    debtor agrees to reaffirm by entering into an
                    agreement of the kind specified in subsection
                    (c), and
                        (ii) the total of any fees and costs
                    accrued as of the date of the disclosure
                    statement, related to such total amount.
                (D) In conjunction with the disclosure of the
            ``Amount Reaffirmed'', the statements--
                        (i) ``The amount of debt you have agreed to
                    reaffirm''; and
                        (ii) ``Your credit agreement may obligate
                    you to pay additional amounts which may come
                    due after the date of this disclosure. Consult
                    your credit agreement.''.
                (E) The ``Annual Percentage Rate'', using that
            term, which shall be disclosed as--
                        (i) if, at the time the petition is filed,
                    the debt is an extension of credit under an
                    open end credit plan, as the terms ``credit''
                    and ``open end credit plan'' are defined in
                    section 103 of the Truth in Lending Act, then--
                                (I) the annual percentage rate
                            determined under paragraphs (5) and (6)
                            of section 127(b) of the Truth in
                            Lending Act, as applicable, as
                            disclosed to the debtor in the most
                            recent periodic statement prior to
                            entering into an agreement of the kind
                            specified in subsection (c) or, if no
                            such periodic statement has been given
                            to the debtor during the prior 6
                            months, the annual percentage rate as
                            it would have been so disclosed at the
                            time the disclosure statement is given
                            to the debtor, or to the extent this
                            annual percentage rate is not readily
                            available or not applicable, then
                                (II) the simple interest rate
                            applicable to the amount reaffirmed as
                            of the date the disclosure statement is
                            given to the debtor, or if different
                            simple interest rates apply to
                            different balances, the simple interest
                            rate applicable to each such balance,
                            identifying the amount of each such
                            balance included in the amount
                            reaffirmed, or
                                (III) if the entity making the
                            disclosure elects, to disclose the
                            annual percentage rate under subclause
                            (I) and the simple interest rate under
                            subclause (II); or
                        (ii) if, at the time the petition is filed,
                    the debt is an extension of credit other than
                    under an open end credit plan, as the terms
                    ``credit'' and ``open end credit plan'' are
                    defined in section 103 of the Truth in Lending
                    Act, then--
                                (I) the annual percentage rate
                            under section 128(a)(4) of the Truth in
                            Lending Act, as disclosed to the debtor
                            in the most recent disclosure statement
                            given to the debtor prior to the
                            entering into an agreement of the kind
                            specified in subsection (c) with
                            respect to the debt, or, if no such
                            disclosure statement was given to the
                            debtor, the annual percentage rate as
                            it would have been so disclosed at the
                            time the disclosure statement is given
                            to the debtor, or to the extent this
                            annual percentage rate is not readily
                            available or not applicable, then
                                (II) the simple interest rate
                            applicable to the amount reaffirmed as
                            of the date the disclosure statement is
                            given to the debtor, or if different
                            simple interest rates apply to
                            different balances, the simple interest
                            rate applicable to each such balance,
                            identifying the amount of such balance
                            included in the amount reaffirmed, or
                                (III) if the entity making the
                            disclosure elects, to disclose the
                            annual percentage rate under (I) and
                            the simple interest rate under (II).
                (F) If the underlying debt transaction was
            disclosed as a variable rate transaction on the most
            recent disclosure given under the Truth in Lending Act,
            by stating ``The interest rate on your loan may be a
            variable interest rate which changes from time to time,
            so that the annual percentage rate disclosed here may
            be higher or lower.''.
                (G) If the debt is secured by a security interest
            which has not been waived in whole or in part or
            determined to be void by a final order of the court at
            the time of the disclosure, by disclosing that a
            security interest or lien in goods or property is
            asserted over some or all of the debts the debtor is
            reaffirming and listing the items and their original
            purchase price that are subject to the asserted
            security interest, or if not a purchase-money security
            interest then listing by items or types and the
            original amount of the loan.
                (H) At the election of the creditor, a statement of
            the repayment schedule using 1 or a combination of the
            following--
                        (i) by making the statement: ``Your first
                    payment in the amount of $___ is due on ___ but
                    the future payment amount may be different.
                    Consult your reaffirmation agreement or credit
                    agreement, as applicable.'', and stating the
                    amount of the first payment and the due date of
                    that payment in the places provided;
                        (ii) by making the statement: ``Your
                    payment schedule will be:'', and describing the
                    repayment schedule with the number, amount, and
                    due dates or period of payments scheduled to
                    repay the debts reaffirmed to the extent then
                    known by the disclosing party; or
                        (iii) by describing the debtor's repayment
                    obligations with reasonable specificity to the
                    extent then known by the disclosing party.
                (I) The following statement: ``Note: When this
            disclosure refers to what a creditor `may' do, it does
            not use the word `may' to give the creditor specific
            permission. The word `may' is used to tell you what
            might occur if the law permits the creditor to take the
            action. If you have questions about your reaffirming a
            debt or what the law requires, consult with the
            attorney who helped you negotiate this agreement
            reaffirming a debt. If you don't have an attorney
            helping you, the judge will explain the effect of your
            reaffirming a debt when the hearing on the
            reaffirmation agreement is held.''.
                (J)(i) The following additional statements:
        ``Reaffirming a debt is a serious financial decision. The
    law requires you to take certain steps to make sure the
    decision is in your best interest. If these steps are not
    completed, the reaffirmation agreement is not effective, even
    though you have signed it.
                ``1. Read the disclosures in this Part A carefully.
            Consider the decision to reaffirm carefully. Then, if
            you want to reaffirm, sign the reaffirmation agreement
            in Part B (or you may use a separate agreement you and
            your creditor agree on).
                ``2. Complete and sign Part D and be sure you can
            afford to make the payments you are agreeing to make
            and have received a copy of the disclosure statement
            and a completed and signed reaffirmation agreement.
                ``3. If you were represented by an attorney during
            the negotiation of your reaffirmation agreement, the
            attorney must have signed the certification in Part C.
                ``4. If you were not represented by an attorney
            during the negotiation of your reaffirmation agreement,
            you must have completed and signed Part E.
                ``5. The original of this disclosure must be filed
            with the court by you or your creditor. If a separate
            reaffirmation agreement (other than the one in Part B)
            has been signed, it must be attached.
                ``6. If you were represented by an attorney during
            the negotiation of your reaffirmation agreement, your
            reaffirmation agreement becomes effective upon filing
            with the court unless the reaffirmation is presumed to
            be an undue hardship as explained in Part D.
                ``7. If you were not represented by an attorney
            during the negotiation of your reaffirmation agreement,
            it will not be effective unless the court approves it.
            The court will notify you of the hearing on your
            reaffirmation agreement. You must attend this hearing
            in bankruptcy court where the judge will review your
            reaffirmation agreement. The bankruptcy court must
            approve your reaffirmation agreement as consistent with
            your best interests, except that no court approval is
            required if your reaffirmation agreement is for a
            consumer debt secured by a mortgage, deed of trust,
            security deed, or other lien on your real property,
            like your home.
        ``Your right to rescind (cancel) your reaffirmation
    agreement. You may rescind (cancel) your reaffirmation
    agreement at any time before the bankruptcy court enters a
    discharge order, or before the expiration of the 60-day period
    that begins on the date your reaffirmation agreement is filed
    with the court, whichever occurs later. To rescind (cancel)
    your reaffirmation agreement, you must notify the creditor that
    your reaffirmation agreement is rescinded (or canceled).
        ``What are your obligations if you reaffirm the debt? A
    reaffirmed debt remains your personal legal obligation. It is
    not discharged in your bankruptcy case. That means that if you
    default on your reaffirmed debt after your bankruptcy case is
    over, your creditor may be able to take your property or your
    wages. Otherwise, your obligations will be determined by the
    reaffirmation agreement which may have changed the terms of the
    original agreement. For example, if you are reaffirming an open
    end credit agreement, the creditor may be permitted by that
    agreement or applicable law to change the terms of that
    agreement in the future under certain conditions.
        ``Are you required to enter into a reaffirmation agreement
    by any law? No, you are not required to reaffirm a debt by any
    law. Only agree to reaffirm a debt if it is in your best
    interest. Be sure you can afford the payments you agree to
    make.
        ``What if your creditor has a security interest or lien?
    Your bankruptcy discharge does not eliminate any lien on your
    property. A `lien' is often referred to as a security interest,
    deed of trust, mortgage or security deed. Even if you do not
    reaffirm and your personal liability on the debt is discharged,
    because of the lien your creditor may still have the right to
    take the security property if you do not pay the debt or
    default on it. If the lien is on an item of personal property
    that is exempt under your State's law or that the trustee has
    abandoned, you may be able to redeem the item rather than
    reaffirm the debt. To redeem, you make a single payment to the
    creditor equal to the current value of the security property,
    as agreed by the parties or determined by the court.''.
                (ii) In the case of a reaffirmation under
            subsection (m)(2), numbered paragraph 6 in the
            disclosures required by clause (i) of this subparagraph
            shall read as follows:
                ``6. If you were represented by an attorney during
            the negotiation of your reaffirmation agreement, your
            reaffirmation agreement becomes effective upon filing
            with the court.''.
        (4) The form of such agreement required under this
    paragraph shall consist of the following:
        ``Part B: Reaffirmation Agreement. I (we) agree to reaffirm
    the debts arising under the credit agreement described below.
        ``Brief description of credit agreement:
        ``Description of any changes to the credit agreement made
    as part of this reaffirmation agreement:
        ``Signature:                    Date:
        ``Borrower:
        ``Co-borrower, if also reaffirming these debts:
        ``Accepted by creditor:
        ``Date of creditor acceptance:''.
        (5) The declaration shall consist of the following:
                (A) The following certification:
        ``Part C: Certification by Debtor's Attorney (If Any).
        ``I hereby certify that (1) this agreement represents a
    fully informed and voluntary agreement by the debtor; (2) this
    agreement does not impose an undue hardship on the debtor or
    any dependent of the debtor; and (3) I have fully advised the
    debtor of the legal effect and consequences of this agreement
    and any default under this agreement.
        ``Signature of Debtor's Attorney:      Date:''.
                (B) If a presumption of undue hardship has been
            established with respect to such agreement, such
            certification shall state that in the opinion of the
            attorney, the debtor is able to make the payment.
        (C) In the case of a reaffirmation agreement under
    subsection (m)(2), subparagraph (B) is not applicable.
        (6)(A) The statement in support of such agreement, which
    the debtor shall sign and date prior to filing with the court,
    shall consist of the following:
        ``Part D: Debtor's Statement in Support of Reaffirmation
    Agreement.
        ``1. I believe this reaffirmation agreement will not impose
    an undue hardship on my dependents or me. I can afford to make
    the payments on the reaffirmed debt because my monthly income
    (take home pay plus any other income received) is $___, and my
    actual current monthly expenses including monthly payments on
    post-bankruptcy debt and other reaffirmation agreements total
    $___, leaving $___ to make the required payments on this
    reaffirmed debt. I understand that if my income less my monthly
    expenses does not leave enough to make the payments, this
    reaffirmation agreement is presumed to be an undue hardship on
    me and must be reviewed by the court. However, this presumption
    may be overcome if I explain to the satisfaction of the court
    how I can afford to make the payments here: ___.
        ``2. I received a copy of the Reaffirmation Disclosure
    Statement in Part A and a completed and signed reaffirmation
    agreement.''.
        (B) Where the debtor is represented by an attorney and is
    reaffirming a debt owed to a creditor defined in section
    19(b)(1)(A)(iv) of the Federal Reserve Act, the statement of
    support of the reaffirmation agreement, which the debtor shall
    sign and date prior to filing with the court, shall consist of
    the following:
        ``I believe this reaffirmation agreement is in my financial
    interest. I can afford to make the payments on the reaffirmed
    debt. I received a copy of the Reaffirmation Disclosure
    Statement in Part A and a completed and signed reaffirmation
    agreement.''.
        (7) The motion that may be used if approval of such
    agreement by the court is required in order for it to be
    effective, shall be signed and dated by the movant and shall
    consist of the following:
        ``Part E: Motion for Court Approval (To be completed only
    if the debtor is not represented by an attorney.). I (we), the
    debtor(s), affirm the following to be true and correct:
        ``I am not represented by an attorney in connection with
    this reaffirmation agreement.
        ``I believe this reaffirmation agreement is in my best
    interest based on the income and expenses I have disclosed in
    my Statement in Support of this reaffirmation agreement, and
    because (provide any additional relevant reasons the court
    should consider):
        ``Therefore, I ask the court for an order approving this
    reaffirmation agreement.''.
        (8) The court order, which may be used to approve such
    agreement, shall consist of the following:
        ``Court Order: The court grants the debtor's motion and
    approves the reaffirmation agreement described above.''.
        (l) Notwithstanding any other provision of this title the
    following shall apply:
                (1) A creditor may accept payments from a debtor
            before and after the filing of an agreement of the kind
            specified in subsection (c) with the court.
                (2) A creditor may accept payments from a debtor
            under such agreement that the creditor believes in good
            faith to be effective.
                (3) The requirements of subsections (c)(2) and (k)
            shall be satisfied if disclosures required under those
            subsections are given in good faith.
        (m)(1) Until 60 days after an agreement of the kind
    specified in subsection (c) is filed with the court (or such
    additional period as the court, after notice and a hearing and
    for cause, orders before the expiration of such period), it
    shall be presumed that such agreement is an undue hardship on
    the debtor if the debtor's monthly income less the debtor's
    monthly expenses as shown on the debtor's completed and signed
    statement in support of such agreement required under
    subsection (k)(6)(A) is less than the scheduled payments on the
    reaffirmed debt. This presumption shall be reviewed by the
    court. The presumption may be rebutted in writing by the debtor
    if the statement includes an explanation that identifies
    additional sources of funds to make the payments as agreed upon
    under the terms of such agreement. If the presumption is not
    rebutted to the satisfaction of the court, the court may
    disapprove such agreement. No agreement shall be disapproved
    without notice and a hearing to the debtor and creditor, and
    such hearing shall be concluded before the entry of the
    debtor's discharge.
        (2) This subsection does not apply to reaffirmation
    agreements where the creditor is a credit union, as defined in
    section 19(b)(1)(A)(iv) of the Federal Reserve Act.

    Sec. 525. Protection against discriminatory treatment

        (a)  * * *

               *       *       *       *       *       *       *

        (c)(1) A governmental unit that operates a student grant or
    loan program and a person engaged in a business that includes
    the making of loans guaranteed or insured under a student loan
    program may not deny a student grant, loan, loan guarantee, or
    loan insurance to a person that is or has been a debtor under
    this title or a bankrupt or debtor under the Bankruptcy Act, or
    another person with whom the debtor or bankrupt has been
    associated, because the debtor or bankrupt is or has been a
    debtor under this title or a bankrupt or debtor under the
    Bankruptcy Act, has been insolvent before the commencement of a
    case under this title or during the pendency of the case but
    before the debtor is granted or denied a discharge, or has not
    paid a debt that is dischargeable in the case under this title
    or that was discharged under the Bankruptcy Act.
        (2) In this section, ``student loan program'' means [the
    program operated under part B, D, or E of] any program operated
    under title IV of the Higher Education Act of 1965 or a similar
    program operated under State or local law.

    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.

    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.

    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.

                           SUBCHAPTER III--THE ESTATE

    Sec. 541. Property of the estate

        (a)  * * *
        (b) Property of the estate does not include--
                (1)  * * *

               *       *       *       *       *       *       *

                (4) any interest of the debtor in liquid or gaseous
            hydrocarbons to the extent that--
                        (A)  * * *
                        (B)(i)  * * *
                        (ii) but for the operation of this
                    paragraph, the estate could include the
                    interest referred to in clause (i) only by
                    virtue of section 365 or 542 of this title;
                    [or]
                (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;
                (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;
                (8) subject to subchapter III of chapter 5, any
            interest of the debtor in property where the debtor
            pledged or sold tangible personal property (other than
            securities or written or printed evidences of
            indebtedness or title) as collateral for a loan or
            advance of money given by a person licensed under law
            to make such loans or advances, where--
                        (A) the tangible personal property is in
                    the possession of the pledgee or transferee;
                        (B) the debtor has no obligation to repay
                    the money, redeem the collateral, or buy back
                    the property at a stipulated price; and
                        (C) neither the debtor nor the trustee have
                    exercised any right to redeem provided under
                    the contract or State law, in a timely manner
                    as provided under State law and section 108(b);
                    or
                [(5)] (9) any interest in cash or cash equivalents
            that constitute proceeds of a sale by the debtor of a
            money order that is made--
                        (A)  * * *

               *       *       *       *       *       *       *

        (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.
        (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.

               *       *       *       *       *       *       *

    Sec. 545. Statutory liens

        The trustee may avoid the fixing of a statutory lien on
    property of the debtor to the extent that such lien--
                (1)  * * *
                (2) is not perfected or enforceable at the time of
            the commencement of the case against a bona fide
            purchaser that purchases such property at the time of
            the commencement of the case, whether or not such a
            purchaser exists, except in any case in which a
            purchaser is a purchaser described in section 6323 of
            the Internal Revenue Code of 1986, or in any other
            similar provision of State or local law;

               *       *       *       *       *       *       *

    Sec. 546. Limitations on avoiding powers

        (a)  * * *

               *       *       *       *       *       *       *

        [(c) Except as provided in subsection (d) of this section,
    the rights and powers of a trustee under sections 544(a), 545,
    547, and 549 of this title are subject to any statutory or
    common-law 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, but--
                [(1) such a seller may not reclaim any such goods
            unless such seller demands in writing reclamation of
            such goods--
                        [(A) before 10 days after receipt of such
                    goods by the debtor; or
                        [(B) if such 10-day period expires after
                    the commencement of the case, before 20 days
                    after receipt of such goods by the debtor; and
                [(2) the court may deny reclamation to a seller
            with such a right of reclamation that has made such a
            demand only if the court--
                        [(A) grants the claim of such a seller
                    priority as a claim of a kind specified in
                    section 503(b) of this title; or
                        [(B) secures such claim by a lien.]
        (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).

               *       *       *       *       *       *       *

        (e) Notwithstanding sections 544, 545, 547, 548(a)(1)(B),
    and 548(b) of this title, the trustee may not avoid a transfer
    that is a margin payment, as defined in section 101, 741, or
    761 of this title, or settlement payment, as defined in section
    101 or 741 of this title, made by or to a commodity broker,
    forward contract merchant, stockbroker, financial institution,
    financial participant, or securities clearing agency, that is
    made before the commencement of the case, except under section
    548(a)(1)(A) of this title.
        (f) Notwithstanding sections 544, 545, 547, 548(a)(1)(B),
    and 548(b) of this title, the trustee may not avoid a transfer
    that is a margin payment, as defined in section 741 or 761 of
    this title, or settlement payment, as defined in section 741 of
    this title, made by or to a repo participant or financial
    participant, in connection with a repurchase agreement and that
    is made before the commencement of the case, except under
    section 548(a)(1)(A) of this title.
        (g) Notwithstanding sections 544, 545, 547, 548(a)(1)(B)
    and 548(b) of this title, the trustee may not avoid a transfer
    [under a swap agreement], made by or to a swap participant or
    financial participant, [in connection with a swap agreement]
    under or in connection with any swap agreement and that is made
    before the commencement of the case, except under section
    548(a)(1)(A) of this title.
        [(g)] (h) Notwithstanding the rights and powers of a
    trustee under sections 544(a), 545, 547, 549, and 553, if the
    court determines on a motion by the trustee made not later than
    120 days after the date of the order for relief in a case under
    chapter 11 of this title and after notice and a hearing, that a
    return is in the best interests of the estate, the debtor, with
    the consent of a creditor and subject to the prior rights of
    holders of security interests in such goods or the proceeds of
    such goods, may return goods shipped to the debtor by the
    creditor before the commencement of the case, and the creditor
    may offset the purchase price of such goods against any claim
    of the creditor against the debtor that arose before the
    commencement of the case.
        (i)(1) Notwithstanding paragraphs (2) and (3) of section
    545, the trustee may not avoid a warehouseman's lien for
    storage, transportation, or other costs incidental to the
    storage and handling of goods.
        (2) The prohibition under paragraph (1) shall be applied in
    a manner consistent with any State statute applicable to such
    lien that is similar to section 7-209 of the Uniform Commercial
    Code, as in effect on the date of enactment of the Bankruptcy
    Abuse Prevention and Consumer Protection Act of 2005, or any
    successor to such section 7-209.
        (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.

    Sec. 547. Preferences

        (a)  * * *
        (b) Except as provided in [subsection (c)] subsections (c)
    and (i) of this section, the trustee may avoid any transfer of
    an interest of the debtor in property--
                (1)  * * *

               *       *       *       *       *       *       *

        (c) The trustee may not avoid under this section a
    transfer--
                (1)  * * *
                [(2) to the extent that such transfer was--
                        [(A) in payment of a debt incurred by the
                    debtor in the ordinary course of business or
                    financial affairs of the debtor and the
                    transferee;
                        [(B) made in the ordinary course of
                    business or financial affairs of the debtor and
                    the transferee; and
                        [(C) made according to ordinary business
                    terms;]
                (2) to the extent that such transfer was in payment
            of a debt incurred by the debtor in the ordinary course
            of business or financial affairs of the debtor and the
            transferee, and such transfer was--
                        (A) made in the ordinary course of business
                    or financial affairs of the debtor and the
                    transferee; or
                        (B) made according to ordinary business
                    terms;
                (3) that creates a security interest in property
            acquired by the debtor--
                        (A)  * * *
                        (B) that is perfected on or before [20] 30
                    days after the debtor receives possession of
                    such property;

               *       *       *       *       *       *       *

                [(7) to the extent such transfer was a bona fide
            payment of a debt to a spouse, former spouse, or child
            of the debtor, for alimony to, maintenance for, or
            support of such spouse or child, in connection with a
            separation agreement, divorce decree or other order of
            a court of record, determination made in accordance
            with State or territorial law by a governmental unit,
            or property settlement agreement, but not to the extent
            that such debt--
                        [(A) is assigned to another entity,
                    voluntarily, by operation of law, or otherwise;
                    or
                        [(B) includes a liability designated as
                    alimony, maintenance, or support, unless such
                    liability is actually in the nature of alimony,
                    maintenance or support; or]
                (7) to the extent such transfer was a bona fide
            payment of a debt for a domestic support obligation;
                (8) if, in a case filed by an individual debtor
            whose debts are primarily consumer debts, the aggregate
            value of all property that constitutes or is affected
            by such transfer is less than $600[.]; or
                (9) if, in a case filed by a debtor whose debts are
            not primarily consumer debts, the aggregate value of
            all property that constitutes or is affected by such
            transfer is less than $5,000.

               *       *       *       *       *       *       *

        (e)(1)  * * *
        (2) For the purposes of this section, except as provided in
    paragraph (3) of this subsection, a transfer is made--
                (A) at the time such transfer takes effect between
            the transferor and the transferee, if such transfer is
            perfected at, or within [10] 30 days after, such time,
            except as provided in subsection (c)(3)(B);
                (B) at the time such transfer is perfected, if such
            transfer is perfected after such [10] 30 days; or
                (C) immediately before the date of the filing of
            the petition, if such transfer is not perfected at the
            later of--
                        (i)  * * *
                        (ii) [10] 30 days after such transfer takes
                    effect between the transferor and the
                    transferee.

               *       *       *       *       *       *       *

        (h) The trustee may not avoid a transfer if such transfer
    was made as a part of an alternative repayment schedule between
    the debtor and any creditor of the debtor created by an
    approved nonprofit budget and credit counseling agency.
        (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.

    Sec. 548. Fraudulent transfers and obligations

        (a)(1) The trustee may avoid any transfer (including any
    transfer to or for the benefit of an insider under an
    employment contract) of an interest of the debtor in property,
    or any obligation (including any obligation to or for the
    benefit of an insider under an employment contract) incurred by
    the debtor, that was made or incurred on or within [one year] 2
    years before the date of the filing of the petition, if the
    debtor voluntarily or involuntarily--
                (A) * * *

               *       *       *       *       *       *       *

                (B)(i) * * *
                (ii)(I) * * *
                (II) was engaged in business or a transaction, or
            was about to engage in business or a transaction, for
            which any property remaining with the debtor was an
            unreasonably small capital; [or]
                (III) intended to incur, or believed that the
            debtor would incur, debts that would be beyond the
            debtor's ability to pay as such debts matured[.]; or
                (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.

               *       *       *       *       *       *       *

        (b) The trustee of a partnership debtor may avoid any
    transfer of an interest of the debtor in property, or any
    obligation incurred by the debtor, that was made or incurred on
    or within [one year] 2 years before the date of the filing of
    the petition, to a general partner in the debtor, if the debtor
    was insolvent on the date such transfer was made or such
    obligation was incurred, or became insolvent as a result of
    such transfer or obligation.

               *       *       *       *       *       *       *

        (d)(1)  * * *
        (2) In this section--
                (A)  * * *
                (B) a commodity broker, forward contract merchant,
            stockbroker, financial institution, financial
            participant, or securities clearing agency that
            receives a margin payment, as defined in section 101,
            741, or 761 of this title, or settlement payment, as
            defined in section 101 or 741 of this title, takes for
            value to the extent of such payment;
                (C) a repo participant or financial participant
            that receives a margin payment, as defined in section
            741 or 761 of this title, or settlement payment, as
            defined in section 741 of this title, in connection
            with a repurchase agreement, takes for value to the
            extent of such payment; [and]
                (D) a swap participant or financial participant
            that receives a transfer in connection with a swap
            agreement takes for value to the extent of such
            transfer[.]; and
                (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.

               *       *       *       *       *       *       *

        (e)(1) In addition to any transfer that the trustee may
    otherwise avoid, the trustee may avoid any transfer of an
    interest of the debtor in property that was made on or within
    10 years before the date of the filing of the petition, if--
                (A) such transfer was made to a self-settled trust
            or similar device;
                (B) such transfer was by the debtor;
                (C) the debtor is a beneficiary of such trust or
            similar device; and
                (D) the debtor made such transfer with actual
            intent to hinder, delay, or defraud any entity to which
            the debtor was or became, on or after the date that
            such transfer was made, indebted.
        (2) For the purposes of this subsection, a transfer
    includes a transfer made in anticipation of any money judgment,
    settlement, civil penalty, equitable order, or criminal fine
    incurred by, or which the debtor believed would be incurred
    by--
                (A) any violation of the securities laws (as
            defined in section 3(a)(47) of the Securities Exchange
            Act of 1934 (15 U.S.C. 78c(a)(47))), any State
            securities laws, or any regulation or order issued
            under Federal securities laws or State securities laws;
            or
                (B) 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 (15 U.S.C. 78l and
            78o(d)) or under section 6 of the Securities Act of
            1933 (15 U.S.C. 77f).

               *       *       *       *       *       *       *

    Sec. 549. Postpetition transactions

        (a)  * * *

               *       *       *       *       *       *       *

        (c) The trustee may not avoid under subsection (a) of this
    section a transfer of an interest in real property to a good
    faith purchaser without knowledge of the commencement of the
    case and for present fair equivalent value unless a copy or
    notice of the petition was filed, where a transfer of an
    interest in such real property may be recorded to perfect such
    transfer, before such transfer is so perfected that a bona fide
    purchaser of [such property] such real property, against whom
    applicable law permits such transfer to be perfected, could not
    acquire an interest that is superior to [the interest] such
    interest of such good faith purchaser. A good faith purchaser
    without knowledge of the commencement of the case and for less
    than present fair equivalent value has a lien on the property
    transferred to the extent of any present value given, unless a
    copy or notice of the petition was so filed before such
    transfer was so perfected.

               *       *       *       *       *       *       *

    Sec. 552. Postpetition effect of security interest

        (a)  * * *
        (b)(1) Except as provided in sections 363, 506(c), 522,
    544, 545, 547, and 548 of this title, if the debtor and an
    entity entered into a security agreement before the
    commencement of the case and if the security interest created
    by such security agreement extends to property of the debtor
    acquired before the commencement of the case and to proceeds,
    [product] products, offspring, or profits of such property,
    then such security interest extends to such proceeds, [product]
    products, offspring, or profits acquired by the estate after
    the commencement of the case to the extent provided by such
    security agreement and by applicable nonbankruptcy law, except
    to any extent that the court, after notice and a hearing and
    based on the equities of the case, orders otherwise.

               *       *       *       *       *       *       *

    Sec. 553. Setoff

        (a) Except as otherwise provided in this section and in
    sections 362 and 363 of this title, this title does not affect
    any right of a creditor to offset a mutual debt owing by such
    creditor to the debtor that arose before the commencement of
    the case under this title against a claim of such creditor
    against the debtor that arose before the commencement of the
    case, except to the extent that--
                (1)  * * *
                (2) such claim was transferred, by an entity other
            than the debtor, to such creditor--
                        (A)  * * *
                        (B)(i)  * * *
                        (ii) while the debtor was insolvent (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); or
                (3) the debt owed to the debtor by such creditor
            was incurred by such creditor--
                        (A)  * * *

               *       *       *       *       *       *       *

                        (C) for the purpose of obtaining a right of
                    setoff against the debtor (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).
        (b)(1) Except with respect to a setoff of a kind described
    in section 362(b)(6), 362(b)(7), [362(b)(14),] 362(b)(17),
    362(b)(27), 555, 556, 559, 560, 561, 365(h), 546(h), or
    365(i)(2) of this title, if a creditor offsets a mutual debt
    owing to the debtor against a claim against the debtor on or
    within 90 days before the date of the filing of the petition,
    then the trustee may recover from such creditor the amount so
    offset to the extent that any insufficiency on the date of such
    setoff is less than the insufficiency on the later of--
                (A)  * * *

               *       *       *       *       *       *       *

    [Sec. 555. Contractual right to liquidate a securities contract]

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

        The exercise of a contractual right of a stockbroker,
    financial institution, financial participant, or securities
    clearing agency to cause the [liquidation] liquidation,
    termination, or acceleration of a securities contract, as
    defined in section 741 of this title, because of a condition of
    the kind specified in section 365(e)(1) of this title shall not
    be stayed, avoided, or otherwise limited by operation of any
    provision of this title or by order of a court or
    administrative agency in any proceeding under this title unless
    such order is authorized under the provisions of the Securities
    Investor Protection Act of 1970 or any statute administered by
    the Securities and Exchange Commission. [As used in this
    section, the term ``contractual right'' includes a right set
    forth in a rule or bylaw of a national securities exchange, a
    national securities association, or a securities clearing
    agency.] 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.

    [Sec. 556. Contractual right to liquidate a commodities contract or
                        forward contract]

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

        The contractual right of a commodity broker, financial
    participant, or forward contract merchant to cause the
    [liquidation] liquidation, termination, or acceleration of a
    commodity contract, as defined in section 761 of this title, or
    forward contract because of a condition of the kind specified
    in section 365(e)(1) of this title, and the right to a
    variation or maintenance margin payment received from a trustee
    with respect to open commodity contracts or forward contracts,
    shall not be stayed, avoided, or otherwise limited by operation
    of any provision of this title or by the order of a court in
    any proceeding under this title. [As used in this section, the
    term ``contractual right'' includes a right set forth in a rule
    or bylaw of a clearing organization or contract market or in a
    resolution of the governing board thereof and a right,] 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.

               *       *       *       *       *       *       *

    [Sec. 559. Contractual right to liquidate a repurchase agreement]

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

        The exercise of a contractual right of a repo participant
    or financial participant to cause the [liquidation]
    liquidation, termination, or acceleration of a repurchase
    agreement because of a condition of the kind specified in
    section 365(e)(1) of this title shall not be stayed, avoided,
    or otherwise limited by operation of any provision of this
    title or by order of a court or administrative agency in any
    proceeding under this title, unless, where the debtor is a
    stockbroker or securities clearing agency, such order is
    authorized under the provisions of the Securities Investor
    Protection Act of 1970 or any statute administered by the
    Securities and Exchange Commission. In the event that a repo
    participant or financial participant liquidates one or more
    repurchase agreements with a debtor and under the terms of one
    or more such agreements has agreed to deliver assets subject to
    repurchase agreements to the debtor, any excess of the market
    prices received on liquidation of such assets (or if any such
    assets are not disposed of on the date of liquidation of such
    repurchase agreements, at the prices available at the time of
    liquidation of such repurchase agreements from a generally
    recognized source or the most recent closing bid quotation from
    such a source) over the sum of the stated repurchase prices and
    all expenses in connection with the liquidation of such
    repurchase agreements shall be deemed property of the estate,
    subject to the available rights of setoff. [As used in this
    section, the term ``contractual right'' includes a right set
    forth in a rule or bylaw, applicable to each party to the
    repurchase agreement, of a national securities exchange, a
    national securities association, or a securities clearing
    agency, and a right,] 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.

    [Sec. 560. Contractual right to terminate a swap agreement]

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

        The exercise of any contractual right of any swap
    participant or financial participant to cause the [termination
    of a swap agreement] liquidation, termination, or acceleration
    of one or more swap agreements because of a condition of the
    kind specified in section 365(e)(1) of this title or to offset
    or net out any termination values or payment amounts arising
    under or [in connection with any swap agreement] in connection
    with the termination, liquidation, or acceleration of one or
    more swap agreements shall not be stayed, avoided, or otherwise
    limited by operation of any provision of this title or by order
    of a court or administrative agency in any proceeding under
    this title. [As used in this section, the term ``contractual
    right'' includes a right,] 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.

    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).

    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.

                             CHAPTER 7--LIQUIDATION

                    SUBCHAPTER I--OFFICERS AND ADMINISTRATION

    Sec.
    701.  Interim trustee.
         * * * * * * *
    [707.  Dismissal.]
    707.  Dismissal of a case or conversion to a case under chapter 11 or
              13.

     SUBCHAPTER II--COLLECTION, LIQUIDATION, AND DISTRIBUTION OF THE ESTATE

         * * * * * * *
    [728.  Special tax provisions.]

                     SUBCHAPTER III--STOCKBROKER LIQUIDATION

         * * * * * * *
    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.

                   SUBCHAPTER IV--COMMODITY BROKER LIQUIDATION

         * * * * * * *
    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.

               *       *       *       *       *       *       *

    SUBCHAPTER I--OFFICERS AND ADMINISTRATION

               *       *       *       *       *       *       *

    Sec. 704. Duties of trustee

        (a) The trustee shall--
                (1)  * * *

               *       *       *       *       *       *       *

                (8) if the business of the debtor is authorized to
            be operated, file with the court, with the United
            States trustee, and with any governmental unit charged
            with responsibility for collection or determination of
            any tax arising out of such operation, periodic reports
            and summaries of the operation of such business,
            including a statement of receipts and disbursements,
            and such other information as the United States trustee
            or the court requires; [and]
                (9) make a final report and file a final account of
            the administration of the estate with the court and
            with the United States trustee[.];
                (10) if with respect to the debtor there is a claim
            for a domestic support obligation, provide the
            applicable notice specified in subsection (c);
                (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
                (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)(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.
        (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.

               *       *       *       *       *       *       *

    Sec. 706. Conversion

        (a)  * * *

               *       *       *       *       *       *       *

        (c) The court may not convert a case under this chapter to
    a case under chapter 12 or 13 of this title unless the debtor
    requests or consents to such conversion.

               *       *       *       *       *       *       *

    [Sec. 707. Dismissal]

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

        (a)  * * *
        (b)(1) After notice and a hearing, the court, on its own
    motion or on a motion by the United States trustee, [but not at
    the request or suggestion of] trustee (or bankruptcy
    administrator, if any), or any party in interest, may dismiss a
    case filed by an individual debtor under this chapter whose
    debts are primarily consumer debts, or, with the debtor's
    consent, convert such a case to a case under chapter 11 or 13
    of this title, if it finds that the granting of relief would be
    [a substantial abuse] an abuse of the provisions of this
    chapter. [There shall be a presumption in favor of granting the
    relief requested by the debtor.] In making a determination
    whether to dismiss a case under this section, the court may not
    take into consideration whether a debtor has made, or continues
    to make, charitable contributions (that meet the definition of
    ``charitable contribution'' under section 548(d)(3)) to any
    qualified religious or charitable entity or organization (as
    that term is defined in section 548(d)(4)).
        (2)(A)(i) In considering under paragraph (1) whether the
    granting of relief would be an abuse of the provisions of this
    chapter, the court shall presume abuse exists if the debtor's
    current monthly income reduced by the amounts determined under
    clauses (ii), (iii), and (iv), and multiplied by 60 is not less
    than the lesser of--
                (I) 25 percent of the debtor's nonpriority
            unsecured claims in the case, or $6,000, whichever is
            greater; or
                (II) $10,000.
        (ii)(I) The debtor's monthly expenses shall be the debtor's
    applicable monthly expense amounts specified under the National
    Standards and Local Standards, and the debtor's actual monthly
    expenses for the categories specified as Other Necessary
    Expenses issued by the Internal Revenue Service for the area in
    which the debtor resides, as in effect on the date of the order
    for relief, for the debtor, the dependents of the debtor, and
    the spouse of the debtor in a joint case, if the spouse is not
    otherwise a dependent. Such expenses shall include reasonably
    necessary health insurance, disability insurance, and health
    savings account expenses for the debtor, the spouse of the
    debtor, or the dependents of the debtor. Notwithstanding any
    other provision of this clause, the monthly expenses of the
    debtor shall not include any payments for debts. In addition,
    the debtor's monthly expenses shall include the debtor's
    reasonably necessary expenses incurred to maintain the safety
    of the debtor and the family of the debtor from family violence
    as identified under section 309 of the Family Violence
    Prevention and Services Act, or other applicable Federal law.
    The expenses included in the debtor's monthly expenses
    described in the preceding sentence shall be kept confidential
    by the court. In addition, if it is demonstrated that it is
    reasonable and necessary, the debtor's monthly expenses may
    also include an additional allowance for food and clothing of
    up to 5 percent of the food and clothing categories as
    specified by the National Standards issued by the Internal
    Revenue Service.
        (II) In addition, the debtor's monthly expenses may
    include, if applicable, the continuation of actual expenses
    paid by the debtor that are reasonable and necessary for care
    and support of an elderly, chronically ill, or disabled
    household member or member of the debtor's immediate family
    (including parents, grandparents, siblings, children, and
    grandchildren of the debtor, the dependents of the debtor, and
    the spouse of the debtor in a joint case who is not a
    dependent) and who is unable to pay for such reasonable and
    necessary expenses.
        (III) In addition, for a debtor eligible for chapter 13,
    the debtor's monthly expenses may include the actual
    administrative expenses of administering a chapter 13 plan for
    the district in which the debtor resides, up to an amount of 10
    percent of the projected plan payments, as determined under
    schedules issued by the Executive Office for United States
    Trustees.
        (IV) In addition, the debtor's monthly expenses may include
    the actual expenses for each dependent child less than 18 years
    of age, not to exceed $1,500 per year per child, to attend a
    private or public elementary or secondary school if the debtor
    provides documentation of such expenses and a detailed
    explanation of why such expenses are reasonable and necessary,
    and why such expenses are not already accounted for in the
    National Standards, Local Standards, or Other Necessary
    Expenses referred to in subclause (I).
        (V) In addition, the debtor's monthly expenses may include
    an allowance for housing and utilities, in excess of the
    allowance specified by the Local Standards for housing and
    utilities issued by the Internal Revenue Service, based on the
    actual expenses for home energy costs if the debtor provides
    documentation of such actual expenses and demonstrates that
    such actual expenses are reasonable and necessary.
        (iii) The debtor's average monthly payments on account of
    secured debts shall be calculated as the sum of--
                (I) the total of all amounts scheduled as
            contractually due to secured creditors in each month of
            the 60 months following the date of the petition; and
                (II) any additional payments to secured creditors
            necessary for the debtor, in filing a plan under
            chapter 13 of this title, to maintain possession of the
            debtor's primary residence, motor vehicle, or other
            property necessary for the support of the debtor and
            the debtor's dependents, that serves as collateral for
            secured debts;
    divided by 60.
        (iv) The debtor's expenses for payment of all priority
    claims (including priority child support and alimony claims)
    shall be calculated as the total amount of debts entitled to
    priority, divided by 60.
        (B)(i) In any proceeding brought under this subsection, the
    presumption of abuse may only be rebutted by demonstrating
    special circumstances, such as a serious medical condition or a
    call or order to active duty in the Armed Forces, to the extent
    such special circumstances that justify additional expenses or
    adjustments of current monthly income for which there is no
    reasonable alternative.
        (ii) In order to establish special circumstances, the
    debtor shall be required to itemize each additional expense or
    adjustment of income and to provide--
                (I) documentation for such expense or adjustment to
            income; and
                (II) a detailed explanation of the special
            circumstances that make such expenses or adjustment to
            income necessary and reasonable.
        (iii) The debtor shall attest under oath to the accuracy of
    any information provided to demonstrate that additional
    expenses or adjustments to income are required.
        (iv) The presumption of abuse may only be rebutted if the
    additional expenses or adjustments to income referred to in
    clause (i) cause the product of the debtor's current monthly
    income reduced by the amounts determined under clauses (ii),
    (iii), and (iv) of subparagraph (A) when multiplied by 60 to be
    less than the lesser of--
                (I) 25 percent of the debtor's nonpriority
            unsecured claims, or $6,000, whichever is greater; or
                (II) $10,000.
        (C) As part of the schedule of current income and
    expenditures required under section 521, the debtor shall
    include a statement of the debtor's current monthly income, and
    the calculations that determine whether a presumption arises
    under subparagraph (A)(i), that show how each such amount is
    calculated.
        (D) Subparagraphs (A) through (C) shall not apply, and the
    court may not dismiss or convert a case based on any form of
    means testing, if the debtor is a disabled veteran (as defined
    in section 3741(1) of title 38), and the indebtedness occurred
    primarily during a period during which he or she was--
                (i) on active duty (as defined in section 101(d)(1)
            of title 10); or
                (ii) performing a homeland defense activity (as
            defined in section 901(1) of title 32).
        (3) In considering under paragraph (1) whether the granting
    of relief would be an abuse of the provisions of this chapter
    in a case in which the presumption in subparagraph (A)(i) of
    such paragraph does not arise or is rebutted, the court shall
    consider--
                (A) whether the debtor filed the petition in bad
            faith; or
                (B) the totality of the circumstances (including
            whether the debtor seeks to reject a personal services
            contract and the financial need for such rejection as
            sought by the debtor) of the debtor's financial
            situation demonstrates abuse.
        (4)(A) The court, on its own initiative or on the motion of
    a party in interest, in accordance with the procedures
    described in rule 9011 of the Federal Rules of Bankruptcy
    Procedure, may order the attorney for the debtor to reimburse
    the trustee for all reasonable costs in prosecuting a motion
    filed under section 707(b), including reasonable attorneys'
    fees, if--
                (i) a trustee files a motion for dismissal or
            conversion under this subsection; and
                (ii) the court--
                        (I) grants such motion; and
                        (II) finds that the action of the attorney
                    for the debtor in filing a case under this
                    chapter violated rule 9011 of the Federal Rules
                    of Bankruptcy Procedure.
        (B) If the court finds that the attorney for the debtor
    violated rule 9011 of the Federal Rules of Bankruptcy
    Procedure, the court, on its own initiative or on the motion of
    a party in interest, in accordance with such procedures, may
    order--
                (i) the assessment of an appropriate civil penalty
            against the attorney for the debtor; and
                (ii) the payment of such civil penalty to the
            trustee, the United States trustee (or the bankruptcy
            administrator, if any).
        (C) The signature of an attorney on a petition, pleading,
    or written motion shall constitute a certification that the
    attorney has--
                (i) performed a reasonable investigation into the
            circumstances that gave rise to the petition, pleading,
            or written motion; and
                (ii) determined that the petition, pleading, or
            written motion--
                        (I) is well grounded in fact; and
                        (II) is warranted by existing law or a good
                    faith argument for the extension, modification,
                    or reversal of existing law and does not
                    constitute an abuse under paragraph (1).
        (D) The signature of an attorney on the petition shall
    constitute a certification that the attorney has no knowledge
    after an inquiry that the information in the schedules filed
    with such petition is incorrect.
        (5)(A) Except as provided in subparagraph (B) and subject
    to paragraph (6), the court, on its own initiative or on the
    motion of a party in interest, in accordance with the
    procedures described in rule 9011 of the Federal Rules of
    Bankruptcy Procedure, may award a debtor all reasonable costs
    (including reasonable attorneys' fees) in contesting a motion
    filed by a party in interest (other than a trustee or United
    States trustee (or bankruptcy administrator, if any)) under
    this subsection if--
                (i) the court does not grant the motion; and
                (ii) the court finds that--
                        (I) the position of the party that filed
                    the motion violated rule 9011 of the Federal
                    Rules of Bankruptcy Procedure; or
                        (II) the attorney (if any) who filed the
                    motion did not comply with the requirements of
                    clauses (i) and (ii) of paragraph (4)(C), and
                    the motion was made solely for the purpose of
                    coercing a debtor into waiving a right
                    guaranteed to the debtor under this title.
        (B) A small business that has a claim of an aggregate
    amount less than $1,000 shall not be subject to subparagraph
    (A)(ii)(I).
        (C) For purposes of this paragraph--
                (i) the term ``small business'' means an
            unincorporated business, partnership, corporation,
            association, or organization that--
                        (I) has fewer than 25 full-time employees
                    as determined on the date on which the motion
                    is filed; and
                        (II) is engaged in commercial or business
                    activity; and
                (ii) the number of employees of a wholly owned
            subsidiary of a corporation includes the employees of--
                        (I) a parent corporation; and
                        (II) any other subsidiary corporation of
                    the parent corporation.
        (6) Only the judge or United States trustee (or bankruptcy
    administrator, if any) may file a motion under section 707(b),
    if the current monthly income of the debtor, or in a joint
    case, the debtor and the debtor's spouse, as of the date of the
    order for relief, when multiplied by 12, is equal to or less
    than--
                (A) in the case of a debtor in a household of 1
            person, the median family income of the applicable
            State for 1 earner;
                (B) in the case of a debtor in a household of 2, 3,
            or 4 individuals, the highest median family income of
            the applicable State for a family of the same number or
            fewer individuals; or
                (C) in the case of a debtor in a household
            exceeding 4 individuals, the highest median family
            income of the applicable State for a family of 4 or
            fewer individuals, plus $525 per month for each
            individual in excess of 4.
        (7)(A) No judge, United States trustee (or bankruptcy
    administrator, if any), trustee, or other party in interest may
    file a motion under paragraph (2) if the current monthly income
    of the debtor, including a veteran (as that term is defined in
    section 101 of title 38), 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.
        (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.

    SUBCHAPTER II--COLLECTION, LIQUIDATION, AND DISTRIBUTION OF THE ESTATE

               *       *       *       *       *       *       *

    Sec. 722. Redemption

        An individual debtor may, whether or not the debtor has
    waived the right to redeem under this section, redeem tangible
    personal property intended primarily for personal, family, or
    household use, from a lien securing a dischargeable consumer
    debt, if such property is exempted under section 522 of this
    title or has been abandoned under section 554 of this title, by
    paying the holder of such lien the amount of the allowed
    secured claim of such holder that is secured by such lien in
    full at the time of redemption.

               *       *       *       *       *       *       *

    Sec. 724. Treatment of certain liens

        (a)  * * *
        (b) Property in which the estate has an interest and that
    is subject to a lien that is not avoidable under this title
    (other than to the extent that there is a properly perfected
    unavoidable tax lien arising in connection with an ad valorem
    tax on real or personal property of the estate) and that
    secures an allowed claim for a tax, or proceeds of such
    property, shall be distributed--
                (1)  * * *
                (2) second, to any holder of a claim of a kind
            specified in section 507(a)(1) (except that such
            expenses, other than claims for wages, salaries, or
            commissions that arise after the date of the filing of
            the petition, shall be limited to expenses incurred
            under chapter 7 of this title and shall not include
            expenses incurred under chapter 11 of this title),
            507(a)(2), 507(a)(3), 507(a)(4), 507(a)(5), 507(a)(6),
            or 507(a)(7) of this title, to the extent of the amount
            of such allowed tax claim that is secured by such tax
            lien;

               *       *       *       *       *       *       *

        (e) Before subordinating a tax lien on real or personal
    property of the estate, the trustee shall--
                (1) exhaust the unencumbered assets of the estate;
            and
                (2) in a manner consistent with section 506(c),
            recover from property securing an allowed secured claim
            the reasonable, necessary costs and expenses of
            preserving or disposing of such property.
        (f) Notwithstanding the exclusion of ad valorem tax liens
    under this section and subject to the requirements of
    subsection (e), the following may be paid from property of the
    estate which secures a tax lien, or the proceeds of such
    property:
                (1) Claims for wages, salaries, and commissions
            that are entitled to priority under section 507(a)(4).
                (2) Claims for contributions to an employee benefit
            plan entitled to priority under section 507(a)(5).

               *       *       *       *       *       *       *

    Sec. 726. Distribution of property of the estate

        (a) Except as provided in section 510 of this title,
    property of the estate shall be distributed--
                (1) first, in payment of claims of the kind
            specified in, and in the order specified in, section
            507 of this title, proof of which is timely filed under
            section 501 of this title or tardily filed [before the
            date on which the trustee commences distribution under
            this section;] on or before the earlier of--
                        (A) the date that is 10 days after the
                    mailing to creditors of the summary of the
                    trustee's final report; or
                        (B) the date on which the trustee commences
                    final distribution under this section;

               *       *       *       *       *       *       *

        (b) Payment on claims of a kind specified in paragraph (1),
    (2), (3), (4), (5), (6), (7), or (8) of section 507(a) of this
    title, or in paragraph (2), (3), (4), or (5) of subsection (a)
    of this section, shall be made pro rata among claims of the
    kind specified in each such particular paragraph, except that
    in a case that has been converted to this chapter under section
    [1009,] 1112, 1208, or 1307 of this title, a claim allowed
    under section 503(b) of this title incurred under this chapter
    after such conversion has priority over a claim allowed under
    section 503(b) of this title incurred under any other chapter
    of this title or under this chapter before such conversion and
    over any expenses of a custodian superseded under section 543
    of this title.

               *       *       *       *       *       *       *

    Sec. 727. Discharge

        (a) The court shall grant the debtor a discharge, unless--
                (1)  * * *

               *       *       *       *       *       *       *

                (8) the debtor has been granted a discharge under
            this section, under section 1141 of this title, or
            under section 14, 371, or 476 of the Bankruptcy Act, in
            a case commenced within [six] 8 years before the date
            of the filing of the petition;
                (9) the debtor has been granted a discharge under
            section 1228 or 1328 of this title, or under section
            660 or 661 of the Bankruptcy Act, in a case commenced
            within six years before the date of the filing of the
            petition, unless payments under the plan in such case
            totaled at least--
                        (A)  * * *
                        (B)(i)  * * *
                        (ii) the plan was proposed by the debtor in
                    good faith, and was the debtor's best effort;
                    [or]
                (10) the court approves a written waiver of
            discharge executed by the debtor after the order for
            relief under this chapter[.];
                (11) after filing the petition, the debtor failed
            to complete an instructional course concerning personal
            financial management described in section 111, except
            that this paragraph shall not apply with respect to a
            debtor who is a person described in section 109(h)(4)
            or who resides in a district for which the United
            States trustee (or the bankruptcy administrator, if
            any) determines that the approved instructional courses
            are not adequate to service the additional individuals
            who would otherwise be required to complete such
            instructional courses under this section (The United
            States trustee (or the bankruptcy administrator, if
            any) who makes a determination described in this
            paragraph shall review such determination not later
            than 1 year after the date of such determination, and
            not less frequently than annually thereafter.); or
                (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).

               *       *       *       *       *       *       *

        (d) On request of the trustee, a creditor, or the United
    States trustee, and after notice and a hearing, the court shall
    revoke a discharge granted under subsection (a) of this section
    if--
                (1)  * * *
                (2) the debtor acquired property that is property
            of the estate, or became entitled to acquire property
            that would be property of the estate, and knowingly and
            fraudulently failed to report the acquisition of or
            entitlement to such property, or to deliver or
            surrender such property to the trustee; [or]
                (3) the debtor committed an act specified in
            subsection (a)(6) of this section[.]; or
                (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.

               *       *       *       *       *       *       *

    [Sec. 728. Special tax provisions

        [(a) For the purposes of any State or local law imposing a
    tax on or measured by income, the taxable period of a debtor
    that is an individual shall terminate on the date of the order
    for relief under this chapter, unless the case was converted
    under section 1112 or 1208 of this title.
        [(b) Notwithstanding any State or local law imposing a tax
    on or measured by income, the trustee shall make tax returns of
    income for the estate of an individual debtor in a case under
    this chapter or for a debtor that is a corporation in a case
    under this chapter only if such estate or corporation has net
    taxable income for the entire period after the order for relief
    under this chapter during which the case is pending. If such
    entity has such income, or if the debtor is a partnership, then
    the trustee shall make and file a return of income for each
    taxable period during which the case was pending after the
    order for relief under this chapter.
        [(c) If there are pending a case under this chapter
    concerning a partnership and a case under this chapter
    concerning a partner in such partnership, a governmental unit's
    claim for any unpaid liability of such partner for a State or
    local tax on or measured by income, to the extent that such
    liability arose from the inclusion in such partner's taxable
    income of earnings of such partnership that were not withdrawn
    by such partner, is a claim only against such partnership.
        [(d) Notwithstanding section 541 of this title, if there
    are pending a case under this chapter concerning a partnership
    and a case under this chapter concerning a partner in such
    partnership, then any State or local tax refund or reduction of
    tax of such partner that would have otherwise been property of
    the estate of such partner under section 541 of this title--
                [(1) is property of the estate of such partnership
            to the extent that such tax refund or reduction of tax
            is fairly apportionable to losses sustained by such
            partnership and not reimbursed by such partner; and
                [(2) is otherwise property of the estate of such
            partner.]

                    SUBCHAPTER III--STOCKBROKER LIQUIDATION

    Sec. 741. Definitions for this subchapter

        In this subchapter--
                (1)  * * *

               *       *       *       *       *       *       *

                [(7) ``securities contract'' means contract for the
            purchase, sale, or loan of a security, including an
            option for the purchase or sale of a security,
            certificate of deposit, or group or index of securities
            (including any interest therein or based on the value
            thereof), or any option entered into on a national
            securities exchange relating to foreign currencies, or
            the guarantee of any settlement of cash or securities
            by or to a securities clearing agency;]
                (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;

               *       *       *       *       *       *       *

    Sec. 752. Customer property

        (a) The trustee shall distribute customer property ratably
    to customers on the basis and to the extent of such customers'
    allowed net equity claims and in priority to all other claims,
    except claims of the kind specified in section [507(a)(1)]
    507(a)(2) of this title that are attributable to the
    administration of such customer property.

               *       *       *       *       *       *       *

    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.

                  SUBCHAPTER IV--COMMODITY BROKER LIQUIDATION

    Sec. 761. Definitions for this subchapter

        In this subchapter--
                (1)  * * *

               *       *       *       *       *       *       *

                (4) ``commodity contract'' means--
                        (A)  * * *

               *       *       *       *       *       *       *

                        (D) with respect to a clearing
                    organization, 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; [or]

               *       *       *       *       *       *       *

                        (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;

               *       *       *       *       *       *       *

    Sec. 766. Treatment of customer property

        (a) * * *

               *       *       *       *       *       *       *

        (h) Except as provided in subsection (b) of this section,
    the trustee shall distribute customer property ratably to
    customers on the basis and to the extent of such customers'
    allowed net equity claims, and in priority to all other claims,
    except claims of a kind specified in section [507(a)(1)]
    507(a)(2) of this title that are attributable to the
    administration of customer property. Such distribution shall be
    in the form of--
                (1) * * *

               *       *       *       *       *       *       *

        (i) If the debtor is a clearing organization, the trustee
    shall distribute--
                (1) customer property, other than member property,
            ratably to customers on the basis and to the extent of
            such customers' allowed net equity claims based on such
            customers' accounts other than proprietary accounts,
            and in priority to all other claims, except claims of a
            kind specified in section [507(a)(1)] 507(a)(2) of this
            title that are attributable to the administration of
            such customer property; and
                (2) member property ratably to customers on the
            basis and to the extent of such customers' allowed net
            equity claims based on such customers' proprietary
            accounts, and in priority to all other claims, except
            claims of a kind specified in section [507(a)(1)]
            507(a)(2) of this title that are attributable to the
            administration of member property or customer property.

               *       *       *       *       *       *       *

    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.

               *       *       *       *       *       *       *

    CHAPTER 9--ADJUSTMENT OF DEBTS OF A MUNICIPALITY

               *       *       *       *       *       *       *

                        SUBCHAPTER I--GENERAL PROVISIONS

    Sec. 901. Applicability of other sections of this title

        (a) Sections 301, 344, 347(b), 349, 350(b), 361, 362,
    364(c), 364(d), 364(e), 364(f), 365, 366, 501, 502, 503, 504,
    506, [507(a)(1)] 507(a)(2), 509, 510, 524(a)(1), 524(a)(2),
    544, 545, 546, 547, 548, 549(a), 549(c), 549(d), 550, 551, 552,
    553, 555, 556, 557, 559, 560, 561, 562, 1102, 1103, 1109,
    1111(b), 1122, 1123(a)(1), 1123(a)(2), 1123(a)(3), 1123(a)(4),
    1123(a)(5), 1123(b), 1123(d), 1124, 1125, 1126(a), 1126(b),
    1126(c), 1126(e), 1126(f), 1126(g), 1127(d), 1128, 1129(a)(2),
    1129(a)(3), 1129(a)(6), 1129(a)(8), 1129(a)(10), 1129(b)(1),
    1129(b)(2)(A), 1129(b)(2)(B), 1142(b), 1143, 1144, and 1145 of
    this title apply in a case under this chapter.

               *       *       *       *       *       *       *

                         SUBCHAPTER II--ADMINISTRATION

    Sec. 921. Petition and proceedings relating to petition

        (a)  * * *

               *       *       *       *       *       *       *

        (d) If the petition is not dismissed under subsection (c)
    of this section, the court shall order relief under this
    chapter notwithstanding section 301(b).

               *       *       *       *       *       *       *

    SUBCHAPTER III--THE PLAN

               *       *       *       *       *       *       *

    Sec. 943. Confirmation

        (a) * * *
        (b) The court shall confirm the plan if--
                (1) * * *

               *       *       *       *       *       *       *

                (5) except to the extent that the holder of a
            particular claim has agreed to a different treatment of
            such claim, the plan provides that on the effective
            date of the plan each holder of a claim of a kind
            specified in section [507(a)(1)] 507(a)(2) of this
            title will receive on account of such claim cash equal
            to the allowed amount of such claim;

               *       *       *       *       *       *       *

    CHAPTER 11--REORGANIZATION

               *       *       *       *       *       *       *

                    SUBCHAPTER I--OFFICERS AND ADMINISTRATION

    Sec.
    1101.  Definitions for this chapter.
         * * * * * * *
    1115.  Property of the estate.
    1116.  Duties of trustee or debtor in possession in small business
              cases.

               *       *       *       *       *       *       *

    SUBCHAPTER I--OFFICERS AND ADMINISTRATION

               *       *       *       *       *       *       *

    Sec. 1102. Creditors' and equity security holders' committees

        (a)(1)  * * *

               *       *       *       *       *       *       *

        (3) On request of a party in interest in a case in which
    the debtor is a small business debtor and for cause, the court
    may order that a committee of creditors not be appointed.
        (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)(1)  * * *

               *       *       *       *       *       *       *

        (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. 1104. Appointment of trustee or examiner

        (a) At any time after the commencement of the case but
    before confirmation of a plan, on request of a party in
    interest or the United States trustee, and after notice and a
    hearing, the court shall order the appointment of a trustee--
                (1) for cause, including fraud, dishonesty,
            incompetence, or gross mismanagement of the affairs of
            the debtor by current management, either before or
            after the commencement of the case, or similar cause,
            but not including the number of holders of securities
            of the debtor or the amount of assets or liabilities of
            the debtor; [or]
                (2) if such appointment is in the interests of
            creditors, any equity security holders, and other
            interests of the estate, without regard to the number
            of holders of securities of the debtor or the amount of
            assets or liabilities of the debtor[.]; or
                (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.
        (b)(1) Except as provided in section 1163 of this title, on
    the request of a party in interest made not later than 30 days
    after the court orders the appointment of a trustee under
    subsection (a), the United States trustee shall convene a
    meeting of creditors for the purpose of electing one
    disinterested person to serve as trustee in the case. The
    election of a trustee shall be conducted in the manner provided
    in subsections (a), (b), and (c) of section 702 of this title.
        (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).

               *       *       *       *       *       *       *

        (e) The United States trustee shall move for the
    appointment of a trustee under subsection (a) if there are
    reasonable grounds to suspect that current members of the
    governing body of the debtor, the debtor's chief executive or
    chief financial officer, or members of the governing body who
    selected the debtor's chief executive or chief financial
    officer, participated in actual fraud, dishonesty, or criminal
    conduct in the management of the debtor or the debtor's public
    financial reporting.

    Sec. 1106. Duties of trustee and examiner

        (a) A trustee shall--
                [(1) perform the duties of a trustee specified in
            sections 704(2), 704(5), 704(7), 704(8), and 704(9) of
            this title;]
                (1) perform the duties of the trustee, as specified
            in paragraphs (2), (5), (7), (8), (9), (10), (11), and
            (12) of section 704;

               *       *       *       *       *       *       *

                (6) for any year for which the debtor has not filed
            a tax return required by law, furnish, without personal
            liability, such information as may be required by the
            governmental unit with which such tax return was to be
            filed, in light of the condition of the debtor's books
            and records and the availability of such information;
            [and]
                (7) after confirmation of a plan, file such reports
            as are necessary or as the court orders[.]; and
                (8) if with respect to the debtor there is a claim
            for a domestic support obligation, provide the
            applicable notice specified in subsection (c).

               *       *       *       *       *       *       *

        (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.

               *       *       *       *       *       *       *

    Sec. 1112. Conversion or dismissal

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

               *       *       *       *       *       *       *

    Sec. 1114. Payment of insurance benefits to retired employees

        (a)  * * *

               *       *       *       *       *       *       *

        (d) The court, upon a motion by any party in interest, and
    after notice and a hearing, shall [appoint] order the
    appointment of a committee of retired employees if the debtor
    seeks to modify or not pay the retiree benefits or if the court
    otherwise determines that it is appropriate, to serve as the
    authorized representative, under this section, of those persons
    receiving any retiree benefits not covered by a collective
    bargaining agreement. The United States trustee shall appoint
    any such committee.

               *       *       *       *       *       *       *

        (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.
        [(l)] (m) This section shall not apply to any retiree, or
    the spouse or dependents of such retiree, if such retiree's
    gross income for the twelve months preceding the filing of the
    bankruptcy petition equals or exceeds $250,000, unless such
    retiree can demonstrate to the satisfaction of the court that
    he is unable to obtain health, medical, life, and disability
    coverage for himself, his spouse, and his dependents who would
    otherwise be covered by the employer's insurance plan,
    comparable to the coverage provided by the employer on the day
    before the filing of a petition under this title.

    Sec. 1115. Property of the estate

        (a) In a case in which the debtor is an individual,
    property of the estate includes, in addition to the property
    specified in section 541--
                (1) all property of the kind specified in section
            541 that the debtor acquires after the commencement of
            the case but before the case is closed, dismissed, or
            converted to a case under chapter 7, 12, or 13,
            whichever occurs first; and
                (2) earnings from services performed by the debtor
            after the commencement of the case but before the case
            is closed, dismissed, or converted to a case under
            chapter 7, 12, or 13, whichever occurs first.
        (b) Except as provided in section 1104 or a confirmed plan
    or order confirming a plan, the debtor shall remain in
    possession of all property of the estate.

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

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

                            SUBCHAPTER II--THE PLAN

    Sec. 1121. Who may file a plan

        (a)  * * *

               *       *       *       *       *       *       *

        (d) [On] (1) Subject to paragraph (2), on request of a
    party in interest made within the respective periods specified
    in subsections (b) and (c) of this section and after notice and
    a hearing, the court may for cause reduce or increase the 120-
    day period or the 180-day period referred to in this section.
        (2)(A) The 120-day period specified in paragraph (1) may
    not be extended beyond a date that is 18 months after the date
    of the order for relief under this chapter.
        (B) The 180-day period specified in paragraph (1) may not
    be extended beyond a date that is 20 months after the date of
    the order for relief under this chapter.
        [(e) In a case in which the debtor is a small business and
    elects to be considered a small business--
                [(1) only the debtor may file a plan until after
            100 days after the date of the order for relief under
            this chapter;
                [(2) all plans shall be filed within 160 days after
            the date of the order for relief; and
                [(3) on request of a party in interest made within
            the respective periods specified in paragraphs (1) and
            (2) and after notice and a hearing, the court may--
                        [(A) reduce the 100-day period or the 160-
                    day period specified in paragraph (1) or (2)
                    for cause; and
                        [(B) increase the 100-day period specified
                    in paragraph (1) if the debtor shows that the
                    need for an increase is caused by circumstances
                    for which the debtor should not be held
                    accountable.]
        (e) In a small business case--
                (1) only the debtor may file a plan until after 180
            days after the date of the order for relief, unless
            that period is--
                        (A) extended as provided by this
                    subsection, after notice and a hearing; or
                        (B) the court, for cause, orders otherwise;
                (2) the plan and a disclosure statement (if any)
            shall be filed not later than 300 days after the date
            of the order for relief; and
                (3) the time periods specified in paragraphs (1)
            and (2), and the time fixed in section 1129(e) within
            which the plan shall be confirmed, may be extended only
            if--
                        (A) the debtor, after providing notice to
                    parties in interest (including the United
                    States trustee), demonstrates by a
                    preponderance of the evidence that it is more
                    likely than not that the court will confirm a
                    plan within a reasonable period of time;
                        (B) a new deadline is imposed at the time
                    the extension is granted; and
                        (C) the order extending time is signed
                    before the existing deadline has expired.

               *       *       *       *       *       *       *

    Sec. 1123. Contents of plan

        (a) Notwithstanding any otherwise applicable nonbankruptcy
    law, a plan shall--
                (1) designate, subject to section 1122 of this
            title, classes of claims, other than claims of a kind
            specified in section [507(a)(1), 507(a)(2)] 507(a)(2),
            507(a)(3), or 507(a)(8) of this title, and classes of
            interests;

               *       *       *       *       *       *       *

                (6) provide for the inclusion in the charter of the
            debtor, if the debtor is a corporation, or of any
            corporation referred to in paragraph (5)(B) or (5)(C)
            of this subsection, of a provision prohibiting the
            issuance of nonvoting equity securities, and providing,
            as to the several classes of securities possessing
            voting power, an appropriate distribution of such power
            among such classes, including, in the case of any class
            of equity securities having a preference over another
            class of equity securities with respect to dividends,
            adequate provisions for the election of directors
            representing such preferred class in the event of
            default in the payment of such dividends; [and]
                (7) contain only provisions that are consistent
            with the interests of creditors and equity security
            holders and with public policy with respect to the
            manner of selection of any officer, director, or
            trustee under the plan and any successor to such
            officer, director, or trustee[.]; and
                (8) in a case in which the debtor is an individual,
            provide for the payment to creditors under the plan of
            all or such portion of earnings from personal services
            performed by the debtor after the commencement of the
            case or other future income of the debtor as is
            necessary for the execution of the plan.

               *       *       *       *       *       *       *

    Sec. 1124. Impairment of claims or interests

        Except as provided in section 1123(a)(4) of this title, a
    class of claims or interests is impaired under a plan unless,
    with respect to each claim or interest of such class, the
    plan--
                (1)  * * *
                (2) notwithstanding any contractual provision or
            applicable law that entitles the holder of such claim
            or interest to demand or receive accelerated payment of
            such claim or interest after the occurrence of a
            default--
                        (A) cures any such default that occurred
                    before or after the commencement of the case
                    under this title, other than a default of a
                    kind specified in section 365(b)(2) of this
                    title or of a kind that section 365(b)(2)
                    expressly does not require to be cured;

               *       *       *       *       *       *       *

                        (C) compensates the holder of such claim or
                    interest for any damages incurred as a result
                    of any reasonable reliance by such holder on
                    such contractual provision or such applicable
                    law; [and]
                        (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
                        [(D)] (E) does not otherwise alter the
                    legal, equitable, or contractual rights to
                    which such claim or interest entitles the
                    holder of such claim or interest.

    Sec. 1125. Postpetition disclosure and solicitation

        (a) In this section--
                (1) ``adequate information'' means information of a
            kind, and in sufficient detail, as far as is reasonably
            practicable in light of the nature and history of the
            debtor and the condition of the debtor's books and
            records, including a discussion of the potential
            material Federal tax consequences of the plan to the
            debtor, any successor to the debtor, and a hypothetical
            investor typical of the holders of claims or interests
            in the case, that would enable [a hypothetical
            reasonable investor typical of holders of claims or
            interests] such a hypothetical investor of the relevant
            class to make an informed judgment about the plan, but
            adequate information need not include such information
            about any other possible or proposed plan 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

               *       *       *       *       *       *       *

        [(f) Notwithstanding subsection (b), in a case in which the
    debtor has elected under section 1121(e) to be considered a
    small business--
                [(1) the court may conditionally approve a
            disclosure statement subject to final approval after
            notice and a hearing;
                [(2) acceptances and rejections of a plan may be
            solicited based on a conditionally approved disclosure
            statement as long as 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 at least 10 days prior to the
            date of the hearing on confirmation of the plan; and
                [(3) a hearing on the disclosure statement may be
            combined with a hearing on confirmation of a plan.]
        (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.
        (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. 1127. Modification of plan

        (a)  * * *

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

    Sec. 1129. Confirmation of plan

        (a) The court shall confirm a plan only if all of the
    following requirements are met:
                (1)  * * *

               *       *       *       *       *       *       *

                (9) Except to the extent that the holder of a
            particular claim has agreed to a different treatment of
            such claim, the plan provides that--
                        (A) with respect to a claim of a kind
                    specified in section [507(a)(1) or 507(a)(2)]
                    507(a)(2) or 507(a)(3) of this title, on the
                    effective date of the plan, the holder of such
                    claim will receive on account of such claim
                    cash equal to the allowed amount of such claim;
                        (B) with respect to a class of claims of a
                    kind specified in section [507(a)(3)]
                    507(a)(1), 507(a)(4), 507(a)(5), 507(a)(6), or
                    507(a)(7) of this title, each holder of a claim
                    of such class will receive--
                                (i)  * * *
                                (ii) if such class has not accepted
                            the plan, cash on the effective date of
                            the plan equal to the allowed amount of
                            such claim; [and]
                        (C) with respect to a claim of a kind
                    specified in section 507(a)(8) of this title,
                    the holder of such claim will receive on
                    account of such claim [deferred cash payments,
                    over a period not exceeding six years after the
                    date of assessment of such claim, of a value,
                    as of the effective date of the plan, equal to
                    the allowed amount of such claim.] regular
                    installment payments in cash--
                                (i) of a total value, as of the
                            effective date of the plan, equal to
                            the allowed amount of such claim;
                                (ii) over a period ending not later
                            than 5 years after the date of the
                            order for relief under section 301,
                            302, or 303; and
                                (iii) in a manner not less
                            favorable than the most favored
                            nonpriority unsecured claim provided
                            for by the plan (other than cash
                            payments made to a class of creditors
                            under section 1122(b)); and
                        (D) with respect to a secured claim which
                    would otherwise meet the description of an
                    unsecured claim of a governmental unit under
                    section 507(a)(8), but for the secured status
                    of that claim, the holder of that claim will
                    receive on account of that claim, cash
                    payments, in the same manner and over the same
                    period, as prescribed in subparagraph (C).

               *       *       *       *       *       *       *

                (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.
                (15) In a case in which the debtor is an individual
            and in which the holder of an allowed unsecured claim
            objects to the confirmation of the plan--
                        (A) the value, as of the effective date of
                    the plan, of the property to be distributed
                    under the plan on account of such claim is not
                    less than the amount of such claim; or
                        (B) the value of the property to be
                    distributed under the plan is not less than the
                    projected disposable income of the debtor (as
                    defined in section 1325(b)(2)) to be received
                    during the 5-year period beginning on the date
                    that the first payment is due under the plan,
                    or during the period for which the plan
                    provides payments, whichever is longer.
                (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.
        (b)(1)  * * *
        (2) For the purpose of this subsection, the condition that
    a plan be fair and equitable with respect to a class includes
    the following requirements:
                (A)  * * *
                (B) With respect to a class of unsecured claims--
                        (i)  * * *
                        (ii) the holder of any claim or interest
                    that is junior to the claims of such class will
                    not receive or retain under the plan on account
                    of such junior claim or interest any property,
                    except that in a case in which the debtor is an
                    individual, the debtor may retain property
                    included in the estate under section 1115,
                    subject to the requirements of subsection
                    (a)(14) of this section.

               *       *       *       *       *       *       *

        (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).

                    SUBCHAPTER III--POSTCONFIRMATION MATTERS

    Sec. 1141. Effect of confirmation

        (a)  * * *

               *       *       *       *       *       *       *

        (d)(1)  * * *
        (2) [The confirmation of a plan does not discharge an
    individual debtor] A discharge under this chapter does not
    discharge a debtor who is an individual from any debt excepted
    from discharge under section 523 of this title.

               *       *       *       *       *       *       *

        (5) In a case in which the debtor is an individual--
                (A) unless after notice and a hearing the court
            orders otherwise for cause, confirmation of the plan
            does not discharge any debt provided for in the plan
            until the court grants a discharge on completion of all
            payments under the plan;
                (B) at any time after the confirmation of the plan,
            and after notice and a hearing, the court may grant a
            discharge to the debtor who has not completed payments
            under the plan if--
                        (i) the value, as of the effective date of
                    the plan, of property actually distributed
                    under the plan on account of each allowed
                    unsecured claim is not less than the amount
                    that would have been paid on such claim if the
                    estate of the debtor had been liquidated under
                    chapter 7 on such date; and
                        (ii) modification of the plan under section
                    1127 is not practicable; and
                (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).
        (6) Notwithstanding paragraph (1), the confirmation of a
    plan does not discharge a debtor that is a corporation from any
    debt--
                (A) of a kind specified in paragraph (2)(A) or
            (2)(B) of section 523(a) that is owed to a domestic
            governmental unit, or owed to a person as the result of
            an action filed under subchapter III of chapter 37 of
            title 31 or any similar State statute; or
                (B) for a tax or customs duty with respect to which
            the debtor--
                        (i) made a fraudulent return; or
                        (ii) willfully attempted in any manner to
                    evade or to defeat such tax or such customs
                    duty.

               *       *       *       *       *       *       *

    Sec. 1146. Special tax provisions

        [(a) For the purposes of any State or local law imposing a
    tax on or measured by income, the taxable period of a debtor
    that is an individual shall terminate on the date of the order
    for relief under this chapter, unless the case was converted
    under section 706 of this title.
        [(b) The trustee shall make a State or local tax return of
    income for the estate of an individual debtor in a case under
    this chapter for each taxable period after the order for relief
    under this chapter during which the case is pending.]
        [(c)] (a) The issuance, transfer, or exchange of a
    security, or the making or delivery of an instrument of
    transfer under a plan confirmed under section 1129 of this
    title, may not be taxed under any law imposing a stamp tax or
    similar tax.
        [(d)] (b) The court may authorize the proponent of a plan
    to request a determination, limited to questions of law, by a
    State or local governmental unit charged with responsibility
    for collection or determination of a tax on or measured by
    income, of the tax effects, under section 346 of this title and
    under the law imposing such tax, of the plan. In the event of
    an actual controversy, the court may declare such effects after
    the earlier of--
                (1)  * * *

               *       *       *       *       *       *       *

    SUBCHAPTER IV--RAILROAD REORGANIZATION

               *       *       *       *       *       *       *

    Sec. 1170. Abandonment of railroad line

        (a)  * * *

               *       *       *       *       *       *       *

        (e)(1) In authorizing any abandonment of a railroad line
    under this section, the court shall require the rail carrier to
    provide a fair arrangement at least as protective of the
    interests of employees as that established under [section
    11347] section 11326(a) of title 49.

               *       *       *       *       *       *       *

    Sec. 1172. Contents of plan

        (a)  * * *

               *       *       *       *       *       *       *

        (c)(1) In approving an application under subsection (b) of
    this section, the Board shall require the rail carrier to
    provide a fair arrangement at least as protective of the
    interests of employees as that established under [section
    11347] section 11326(a) of title 49.

               *       *       *       *       *       *       *

     CHAPTER 12--ADJUSTMENT OF DEBTS OF A FAMILY FARMER OR FISHERMAN WITH
    REGULAR ANNUAL INCOME

               *       *       *       *       *       *       *

    SUBCHAPTER I--OFFICERS, ADMINISTRATION, AND THE ESTATE

               *       *       *       *       *       *       *

    Sec. 1202. Trustee

        (a)  * * *
        (b) The trustee shall--
                (1) * * *

               *       *       *       *       *       *       *

                (4) ensure that the debtor commences making timely
            payments required by a confirmed plan; [and]
                (5) if the debtor ceases to be a debtor in
            possession, perform the duties specified in sections
            704(8), 1106(a)(1), 1106(a)(2), 1106(a)(6), 1106(a)(7),
            and 1203[.]; and
                (6) if with respect to the debtor there is a claim
            for a domestic support obligation, provide the
            applicable notice specified in subsection (c).
        (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.

    Sec. 1203. Rights and powers of debtor

        Subject to such limitations as the court may prescribe, a
    debtor in possession shall have all the rights, other than the
    right to compensation under section 330, and powers, and shall
    perform all the functions and duties, except the duties
    specified in paragraphs (3) and (4) of section 1106(a), of a
    trustee serving in a case under chapter 11, including operating
    the debtor's farm or commercial fishing operation.

               *       *       *       *       *       *       *

    Sec. 1206. Sales free of interests

        After notice and a hearing, in addition to the
    authorization contained in section 363(f), the trustee in a
    case under this chapter may sell property under section 363(b)
    and (c) free and clear of any interest in such property of an
    entity other than the estate [if the property is farmland or
    farm equipment] if the property is farmland, farm equipment, or
    property used to carry out a commercial fishing operation
    (including a commercial fishing vessel), except that the
    proceeds of such sale shall be subject to such interest.

               *       *       *       *       *       *       *

    Sec. 1208. Conversion or dismissal

        (a) * * *

               *       *       *       *       *       *       *

        (c) On request of a party in interest, and after notice and
    a hearing, the court may dismiss a case under this chapter for
    cause, including--
                (1) * * *

               *       *       *       *       *       *       *

                (8) termination of a confirmed plan by reason of
            the occurrence of a condition specified in the plan;
            [or]
                (9) continuing loss to or diminution of the estate
            and absence of a reasonable likelihood of
            rehabilitation[.]; and
                (10) failure of the debtor to pay any domestic
            support obligation that first becomes payable after the
            date of the filing of the petition.

               *       *       *       *       *       *       *

    SUBCHAPTER II--THE PLAN

               *       *       *       *       *       *       *

    Sec. 1222. Contents of plan

        (a) The plan shall--
                (1) * * *
                [(2) provide for the full payment, in deferred cash
            payments, of all claims entitled to priority under
            section 507 of this title, unless the holder of a
            particular claim agrees to a different treatment of
            such claim; and]
                (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;
                (3) if the plan classifies claims and interests,
            provide the same treatment for each claim or interest
            within a particular class unless the holder of a
            particular claim or interest agrees to less favorable
            treatment[.]; and
                (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.
        (b) Subject to subsections (a) and (c) of this section, the
    plan may--
                (1) * * *

               *       *       *       *       *       *       *

                (10) provide for the vesting of property of the
            estate, on confirmation of the plan or at a later time,
            in the debtor or in any other entity; [and]
                (11) provide for the payment of interest accruing
            after the date of the filing of the petition on
            unsecured claims that are nondischargeable under
            section 1228(a), except that such interest may be paid
            only to the extent that the debtor has disposable
            income available to pay such interest after making
            provision for full payment of all allowed claims; and
                [(11)] (12) include any other appropriate provision
            not inconsistent with this title.

               *       *       *       *       *       *       *

    Sec. 1225. Confirmation of plan

        (a) Except as provided in subsection (b), the court shall
    confirm a plan if--
                (1) * * *

               *       *       *       *       *       *       *

                (5) with respect to each allowed secured claim
            provided for by the plan--
                        (A) * * *

               *       *       *       *       *       *       *

                        (C) the debtor surrenders the property
                    securing such claim to such holder; [and]
                (6) the debtor will be able to make all payments
            under the plan and to comply with the plan[.]; and
                (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.
        (b)(1) If the trustee or the holder of an allowed unsecured
    claim objects to the confirmation of the plan, then the court
    may not approve the plan unless, as of the effective date of
    the plan--
                (A) the value of the property to be distributed
            under the plan on account of such claim is not less
            than the amount of such claim; [or]
                (B) the plan provides that all of the debtor's
            projected disposable income to be received in the
            three-year period, or such longer period as the court
            may approve under section 1222(c), beginning on the
            date that the first payment is due under the plan will
            be applied to make payments under the plan[.]; or
                (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.
        (2) For purposes of this subsection, ``disposable income''
    means income which is received by the debtor and which is not
    reasonably necessary to be expended--
                (A) for the maintenance or support of the debtor or
            a dependent of the debtor or for a domestic support
            obligation that first becomes payable after the date of
            the filing of the petition; or

               *       *       *       *       *       *       *

    Sec. 1226. Payments

        (a) * * *
        (b) Before or at the time of each payment to creditors
    under the plan, there shall be paid--
                (1) any unpaid claim of the kind specified in
            section [507(a)(1)] 507(a)(2) of this title; and

               *       *       *       *       *       *       *

    Sec. 1228. Discharge

        (a) [As] Subject to subsection (d), as soon as practicable
    after completion by the debtor of all payments under the plan,
    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, other than payments to holders
    of allowed claims provided for under section 1222(b)(5) or
    1222(b)(10) of this title, unless the court approves a written
    waiver of discharge executed by the debtor after the order for
    relief under this chapter, the court shall grant the debtor a
    discharge of all debts provided for by the plan allowed under
    section 503 of this title or disallowed under section 502 of
    this title, except any debt--
                (1)  * * *

               *       *       *       *       *       *       *

        (b) [At] Subject to subsection (d), at any time after the
    confirmation of the plan and after notice and a hearing, the
    court may grant a discharge to a debtor that has not completed
    payments under the plan only if--
                (1)  * * *

               *       *       *       *       *       *       *

        (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).

    Sec. 1229. Modification of plan after confirmation

        (a)  * * *

               *       *       *       *       *       *       *

        (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. 1231. Special tax provisions

        [(a) For the purpose of any State or local law imposing a
    tax on or measured by income, the taxable period of a debtor
    that is an individual shall terminate on the date of the order
    for relief under this chapter, unless the case was converted
    under section 706 of this title.
        [(b) The trustee shall make a State or local tax return of
    income for the estate of an individual debtor in a case under
    this chapter for each taxable period after the order for relief
    under this chapter during which the case is pending.]
        [(c)] (a) The issuance, transfer, or exchange of a
    security, or the making or delivery of an instrument of
    transfer under a plan confirmed under section 1225 of this
    title, may not be taxed under any law imposing a stamp tax or
    similar tax.
        [(d)] (b) The court may authorize the proponent of a plan
    to request a determination, limited to questions of law, by [a
    State or local governmental unit] any governmental unit charged
    with responsibility for collection or determination of a tax on
    or measured by income, of the tax effects, under section 346 of
    this title and under the law imposing such tax, of the plan. In
    the event of an actual controversy, the court may declare such
    effects after the earlier of--
                (1)  * * *

               *       *       *       *       *       *       *

      CHAPTER 13--ADJUSTMENT OF DEBTS OF AN INDIVIDUAL WITH REGULAR INCOME

             SUBCHAPTER I--OFFICERS, ADMINISTRATION, AND THE ESTATE

    Sec.
    1301.  Stay of action against codebtor.
         * * * * * * *
    1308.  Filing of prepetition tax returns.
         * * * * * * *

    SUBCHAPTER I--OFFICERS, ADMINISTRATION, AND THE ESTATE

               *       *       *       *       *       *       *

    Sec. 1302. Trustee

        (a)  * * *
        (b) The trustee shall--
                (1)  * * *

               *       *       *       *       *       *       *

                (4) advise, other than on legal matters, and assist
            the debtor in performance under the plan; [and]
                (5) ensure that the debtor commences making timely
            payments under section 1326 of this title[.]; and
                (6) if with respect to the debtor there is a claim
            for a domestic support obligation, provide the
            applicable notice specified in subsection (d).

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

    Sec. 1307. Conversion or dismissal

        (a)  * * *

               *       *       *       *       *       *       *

        (c) Except as provided in subsection (e) of this section,
    on request of a party in interest or the United States trustee
    and after notice and a hearing, the court may convert a case
    under this chapter to a case under chapter 7 of this title, or
    may dismiss a case under this chapter, whichever is in the best
    interests of creditors and the estate, for cause, including--
                (1)  * * *

               *       *       *       *       *       *       *

                (9) only on request of the United States trustee,
            failure of the debtor to file, within fifteen days, or
            such additional time as the court may allow, after the
            filing of the petition commencing such case, the
            information required by paragraph (1) of section 521;
            [or]
                (10) only on request of the United States trustee,
            failure to timely file the information required by
            paragraph (2) of section 521[.]; or
                (11) failure of the debtor to pay any domestic
            support obligation that first becomes payable after the
            date of the filing of the petition.

               *       *       *       *       *       *       *

        (e) Upon the failure of the debtor to file a tax return
    under section 1308, on request of a party in interest or the
    United States trustee and after notice and a hearing, the court
    shall dismiss a case or convert a case under this chapter to a
    case under chapter 7 of this title, whichever is in the best
    interest of the creditors and the estate.
        [(e)] (f) The court may not convert a case under this
    chapter to a case under chapter 7, 11, or 12 of this title if
    the debtor is a farmer, unless the debtor requests such
    conversion.
        [(f)] (g) Notwithstanding any other provision of this
    section, a case may not be converted to a case under another
    chapter of this title unless the debtor may be a debtor under
    such chapter.

    Sec. 1308. Filing of prepetition tax returns

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

    SUBCHAPTER II--THE PLAN

               *       *       *       *       *       *       *

    Sec. 1322. Contents of plan

        (a) The plan shall--
                (1)  * * *
                (2) provide for the full payment, in deferred cash
            payments, of all claims entitled to priority under
            section 507 of this title, unless the holder of a
            particular claim agrees to a different treatment of
            such claim; [and]
                (3) if the plan classifies claims, provide the same
            treatment for each claim within a particular class[.];
            and
                (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.
        (b) Subject to subsections (a) and (c) of this section, the
    plan may--
                (1) * * *

               *       *       *       *       *       *       *

                (9) provide for the vesting of property of the
            estate, on confirmation of the plan or at a later time,
            in the debtor or in any other entity; [and]
                (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)] (11) include any other appropriate provision
            not inconsistent with this title.

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

        (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.

               *       *       *       *       *       *       *

    Sec. 1324. Confirmation hearing

        [After] (a) Except as provided in subsection (b) and after
    notice, the court shall hold a hearing on confirmation of the
    plan. A party in interest may object to confirmation of the
    plan.
        (b) The hearing on confirmation of the plan may be held not
    earlier than 20 days and not later than 45 days after the date
    of the meeting of creditors under section 341(a), unless the
    court determines that it would be in the best interests of the
    creditors and the estate to hold such hearing at an earlier
    date and there is no objection to such earlier date.

    Sec. 1325. Confirmation of plan

        (a) Except as provided in subsection (b), the court shall
    confirm a plan if--
                (1)  * * *

               *       *       *       *       *       *       *

                (5) with respect to each allowed secured claim
            provided for by the plan--
                        (A)  * * *
                        (B)[(i) the plan provides that the holder
                    of such claim retain the lien securing such
                    claim; and] (i) the plan provides that--
                                (I) the holder of such claim retain
                            the lien securing such claim until the
                            earlier of--
                                        (aa) the payment of the
                                    underlying debt determined
                                    under nonbankruptcy law; or
                                        (bb) discharge under
                                    section 1328; and
                                (II) if the case under this chapter
                            is dismissed or converted without
                            completion of the plan, such lien shall
                            also be retained by such holder to the
                            extent recognized by applicable
                            nonbankruptcy law;
                        (ii) the value, as of the effective date of
                    the plan, of property to be distributed under
                    the plan on account of such claim is not less
                    than the allowed amount of such claim; [or] and
                        (iii) if--
                                (I) property to be distributed
                            pursuant to this subsection is in the
                            form of periodic payments, such
                            payments shall be in equal monthly
                            amounts; and
                                (II) the holder of the claim is
                            secured by personal property, the
                            amount of such payments shall not be
                            less than an amount sufficient to
                            provide to the holder of such claim
                            adequate protection during the period
                            of the plan; or
                        (C) the debtor surrenders the property
                    securing such claim to such holder; [and]
                (6) the debtor will be able to make all payments
            under the plan and to comply with the plan[.];
                (7) the action of the debtor in filing the petition
            was in good faith;
                (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
                (9) the debtor has filed all applicable Federal,
            State, and local tax returns as required by section
            1308.
    For purposes of paragraph (5), section 506 shall not apply to a
    claim described in that paragraph if the creditor has a
    purchase money security interest securing the debt that is the
    subject of the claim, the debt was incurred within the 910-day
    preceding the date of the filing of the petition, and the
    collateral for that debt consists of a motor vehicle (as
    defined in section 30102 of title 49) acquired for the personal
    use of the debtor, or if collateral for that debt consists of
    any other thing of value, if the debt was incurred during the
    1-year period preceding that filing.
        (b)(1) If the trustee or the holder of an allowed unsecured
    claim objects to the confirmation of the plan, then the court
    may not approve the plan unless, as of the effective date of
    the plan--
                (A) the value of the property to be distributed
            under the plan on account of such claim is not less
            than the amount of such claim; or
                (B) the plan provides that all of the debtor's
            projected disposable income to be received in the
            [three-year period] applicable commitment period
            beginning on the date that the first payment is due
            under the plan will be applied to make payments to
            unsecured creditors under the plan.
        [(2) For purposes of this subsection, ``disposable income''
    means income which is received by the debtor and which is not
    reasonably necessary to be expended--
                [(A) for the maintenance or support of the debtor
            or a dependent of the debtor, including charitable
            contributions (that meet the definition of ``charitable
            contribution'' under section 548(d)(3)) to a qualified
            religious or charitable entity or organization (as that
            term is defined in section 548(d)(4)) in an amount not
            to exceed 15 percent of the gross income of the debtor
            for the year in which the contributions are made; and
                [(B) if the debtor is engaged in business, for the
            payment of expenditures necessary for the continuation,
            preservation, and operation of such business.]
                (2) For purposes of this subsection, the term
            ``disposable income'' means current monthly income
            received by the debtor (other than child support
            payments, foster care payments, or disability payments
            for a dependent child made in accordance with
            applicable nonbankruptcy law to the extent reasonably
            necessary to be expended for such child) less amounts
            reasonably necessary to be expended--
                        (A)(i) for the maintenance or support of
                    the debtor or a dependent of the debtor, or for
                    a domestic support obligation, that first
                    becomes payable after the date the petition is
                    filed; and
                        (ii) for charitable contributions (that
                    meet the definition of ``charitable
                    contribution'' under section 548(d)(3) to a
                    qualified religious or charitable entity or
                    organization (as defined in section 548(d)(4))
                    in an amount not to exceed 15 percent of gross
                    income of the debtor for the year in which the
                    contributions are made; and
                        (B) if the debtor is engaged in business,
                    for the payment of expenditures necessary for
                    the continuation, preservation, and operation
                    of such business.
                (3) Amounts reasonably necessary to be expended
            under paragraph (2) shall be determined in accordance
            with subparagraphs (A) and (B) of section 707(b)(2), if
            the debtor has current monthly income, when multiplied
            by 12, greater than--
                        (A) in the case of a debtor in a household
                    of 1 person, the median family income of the
                    applicable State for 1 earner;
                        (B) in the case of a debtor in a household
                    of 2, 3, or 4 individuals, the highest median
                    family income of the applicable State for a
                    family of the same number or fewer individuals;
                    or
                        (C) in the case of a debtor in a household
                    exceeding 4 individuals, the highest median
                    family income of the applicable State for a
                    family of 4 or fewer individuals, plus $525 per
                    month for each individual in excess of 4.
        (4) For purposes of this subsection, the ``applicable
    commitment period''--
                (A) subject to subparagraph (B), shall be--
                        (i) 3 years; or
                        (ii) not less than 5 years, if the current
                    monthly income of the debtor and the debtor's
                    spouse combined, when multiplied by 12, is not
                    less than--
                                (I) in the case of a debtor in a
                            household of 1 person, the median
                            family income of the applicable State
                            for 1 earner;
                                (II) in the case of a debtor in a
                            household of 2, 3, or 4 individuals,
                            the highest median family income of the
                            applicable State for a family of the
                            same number or fewer individuals; or
                                (III) in the case of a debtor in a
                            household exceeding 4 individuals, the
                            highest median family income of the
                            applicable State for a family of 4 or
                            fewer individuals, plus $525 per month
                            for each individual in excess of 4; and
                (B) may be less than 3 or 5 years, whichever is
            applicable under subparagraph (A), but only if the plan
            provides for payment in full of all allowed unsecured
            claims over a shorter period.

               *       *       *       *       *       *       *

    Sec. 1326. Payments

        [(a)(1) Unless the court orders otherwise, the debtor shall
    commence making the payments proposed by a plan within 30 days
    after the plan is filed.
        [(2) A payment made under this subsection shall be retained
    by the trustee until confirmation or denial of confirmation of
    a plan. If a plan is confirmed, the trustee shall distribute
    any such payment in accordance with the plan as soon as
    practicable. If a plan is not confirmed, the trustee shall
    return any such payment to the debtor, after deducting any
    unpaid claim allowed under section 503(b) of this title.]
        (a)(1) Unless the court orders otherwise, the debtor shall
    commence making payments not later than 30 days after the date
    of the filing of the plan or the order for relief, whichever is
    earlier, in the amount--
                (A) proposed by the plan to the trustee;
                (B) scheduled in a lease of personal property
            directly to the lessor for that portion of the
            obligation that becomes due after the order for relief,
            reducing the payments under subparagraph (A) by the
            amount so paid and providing the trustee with evidence
            of such payment, including the amount and date of
            payment; and
                (C) that provides adequate protection directly to a
            creditor holding an allowed claim secured by personal
            property to the extent the claim is attributable to the
            purchase of such property by the debtor for that
            portion of the obligation that becomes due after the
            order for relief, reducing the payments under
            subparagraph (A) by the amount so paid and providing
            the trustee with evidence of such payment, including
            the amount and date of payment.
        (2) A payment made under paragraph (1)(A) shall be retained
    by the trustee until confirmation or denial of confirmation. If
    a plan is confirmed, the trustee shall distribute any such
    payment in accordance with the plan as soon as is practicable.
    If a plan is not confirmed, the trustee shall return any such
    payments not previously paid and not yet due and owing to
    creditors pursuant to paragraph (3) to the debtor, after
    deducting any unpaid claim allowed under section 503(b).
        (3) Subject to section 363, the court may, upon notice and
    a hearing, modify, increase, or reduce the payments required
    under this subsection pending confirmation of a plan.
        (4) Not later than 60 days after the date of filing of a
    case under this chapter, a debtor retaining possession of
    personal property subject to a lease or securing a claim
    attributable in whole or in part to the purchase price of such
    property shall provide the lessor or secured creditor
    reasonable evidence of the maintenance of any required
    insurance coverage with respect to the use or ownership of such
    property and continue to do so for so long as the debtor
    retains possession of such property.
        (b) Before or at the time of each payment to creditors
    under the plan, there shall be paid--
                (1) any unpaid claim of the kind specified in
            section [507(a)(1)] 507(a)(2) of this title; [and]
                (2) if a standing trustee appointed under section
            586(b) of title 28 is serving in the case, the
            percentage fee fixed for such standing trustee under
            section 586(e)(1)(B) of title 28[.]; and
                (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.

               *       *       *       *       *       *       *

        (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. 1328. Discharge

        (a) [As] Subject to subsection (d), as soon as practicable
    after completion by the debtor of all payments under the plan,
    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, unless the court approves a
    written waiver of discharge executed by the debtor after the
    order for relief under this chapter, the court shall grant the
    debtor a discharge of all debts provided for by the plan or
    disallowed under section 502 of this title, except any debt--
                [(1) provided for under section 1322(b)(5) of this
            title;
                [(2) of the kind specified in paragraph (5), (8),
            or (9) of section 523(a) of this title; or
                [(3) for restitution, or a criminal fine, included
            in a sentence on the debtor's conviction of a crime.]
                (1) provided for under section 1322(b)(5);
                (2) of the kind specified in section 507(a)(8)(C)
            or in paragraph (1)(B), (1)(C), (2), (3), (4), (5),
            (8), or (9) of section 523(a);
                (3) for restitution, or a criminal fine, included
            in a sentence on the debtor's conviction of a crime; or
                (4) for restitution, or damages, awarded in a civil
            action against the debtor as a result of willful or
            malicious injury by the debtor that caused personal
            injury to an individual or the death of an individual.
        (b) [At] Subject to subsection (d), at any time after the
    confirmation of the plan and after notice and a hearing, the
    court may grant a discharge to a debtor that has not completed
    payments under the plan only if--
                (1)  * * *

               *       *       *       *       *       *       *

        (f) Notwithstanding subsections (a) and (b), the court
    shall not grant a discharge of all debts provided for in the
    plan or disallowed under section 502, if the debtor has
    received a discharge--
                (1) in a case filed under chapter 7, 11, or 12 of
            this title during the 4-year period preceding the date
            of the order for relief under this chapter, or
                (2) in a case filed under chapter 13 of this title
            during the 2-year period preceding the date of such
            order.
        (g)(1) The court shall not grant a discharge under this
    section to a debtor unless after filing a petition the debtor
    has completed an instructional course concerning personal
    financial management described in section 111.
        (2) Paragraph (1) shall not apply with respect to a debtor
    who is a person described in section 109(h)(4) or who resides
    in a district for which the United States trustee (or the
    bankruptcy administrator, if any) determines that the approved
    instructional courses are not adequate to service the
    additional individuals who would otherwise be required to
    complete such instructional course by reason of the
    requirements of paragraph (1).
        (3) The United States trustee (or the bankruptcy
    administrator, if any) who makes a determination described in
    paragraph (2) shall review such determination not later than 1
    year after the date of such determination, and not less
    frequently than annually thereafter.
        (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. 1329. Modification of plan after confirmation

        (a) At any time after confirmation of the plan but before
    the completion of payments under such plan, the plan may be
    modified, upon request of the debtor, the trustee, or the
    holder of an allowed unsecured claim, to--
                (1) increase or reduce the amount of payments on
            claims of a particular class provided for by the plan;
                (2) extend or reduce the time for such payments;
            [or]
                (3) alter the amount of the distribution to a
            creditor whose claim is provided for by the plan to the
            extent necessary to take account of any payment of such
            claim other than under the plan[.]; or
                (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.

               *       *       *       *       *       *       *

        (c) A plan modified under this section may not provide for
    payments over a period that expires after [three years] the
    applicable commitment period under section 1325(b)(1)(B) after
    the time that the first payment under the original confirmed
    plan was due, unless the court, for cause, approves a longer
    period, but the court may not approve a period that expires
    after five years after such time.

               *       *       *       *       *       *       *

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

    Sec. 1510. Limited jurisdiction

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

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

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

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

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

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

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

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

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

         SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF

    Sec. 1515. Application for recognition

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

    Sec. 1516. Presumptions concerning recognition

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

    Sec. 1517. Order granting recognition

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

    Sec. 1518. Subsequent information

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

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

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

               *       *       *       *       *       *       *

                                  ----------

                          TITLE 18, UNITED STATES CODE

               *       *       *       *       *       *       *
    PART I--CRIMES

               *       *       *       *       *       *       *

                             CHAPTER 9--BANKRUPTCY

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

               *       *       *       *       *       *       *

    Sec. 156. Knowing disregard of bankruptcy law or rule

        (a) Definitions.--In this section--
                 (1) the term  ``bankruptcy petition preparer''
            means a person, other than the debtor's attorney or an
            employee of such an attorney, who prepares for
            compensation a document for filing[.]; and
                 (2) the term ``document for filing'' means a
            petition or any other document prepared for filing by a
            debtor in a United States bankruptcy court or a United
            States district court in connection with a case under
            [this title] title 11.

               *       *       *       *       *       *       *

    Sec. 157. Bankruptcy fraud

        A person who, having devised or intending to devise a
    scheme or artifice to defraud and for the purpose of executing
    or concealing such a scheme or artifice or attempting to do
    so--
                (1) files a petition under title 11, including a
            fraudulent involuntary bankruptcy petition under
            section 303 of such title;
                (2) files a document in a proceeding under title
            11, including a fraudulent involuntary bankruptcy
            petition under section 303 of such title; or
                (3) makes a false or fraudulent representation,
            claim, or promise concerning or in relation to a
            proceeding under title 11, including a fraudulent
            involuntary bankruptcy petition under section 303 of
            such title, at any time before or after the filing of
            the petition, or in relation to a proceeding falsely
            asserted to be pending under such title,
    shall be fined under this title, imprisoned not more than 5
    years, or both.

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

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

               *       *       *       *       *       *       *

                                  ----------

                          TITLE 28--UNITED STATES CODE

               *       *       *       *       *       *       *
    Part I--Organization of Courts

               *       *       *       *       *       *       *

    CHAPTER 6--BANKRUPTCY JUDGES

               *       *       *       *       *       *       *

    Sec. 152. Appointment of bankruptcy judges

        (a)(1) [The United States court of appeals for the circuit
    shall appoint bankruptcy judges for the judicial districts
    established in paragraph (2) in such numbers as are established
    in such paragraph.] Each bankruptcy judge to be appointed for a
    judicial district, as provided in paragraph (2), shall be
    appointed by the court of appeals of the United States for the
    circuit in which such district is located. Such appointments
    shall be made after considering the recommendations of the
    Judicial Conference submitted pursuant to subsection (b). Each
    bankruptcy judge shall be appointed for a term of fourteen
    years, subject to the provisions of subsection (e). However,
    upon the expiration of the term, a bankruptcy judge may, with
    the approval of the judicial council of the circuit, continue
    to perform the duties of the office until the earlier of the
    date which is 180 days after the expiration of the term or the
    date of the appointment of a successor. Bankruptcy judges shall
    serve as judicial officers of the United States district court
    established under Article III of the Constitution.
                (2) The bankruptcy judges appointed pursuant to
            this section shall be appointed for the several
            judicial districts as follows:
                    Districts                                         Judges
         * * * * * * *
        Georgia:
            Northern..................................................     8
            Middle.................................................... [2] 3
            Southern..................................................     2
            [Middle and Southern......................................    1]
         * * * * * * *

                          CHAPTER 6--BANKRUPTCY JUDGES

    Sec.
    151.    Designation of bankruptcy courts.
         * * * * * * *
    159.    Bankruptcy statistics.

               *       *       *       *       *       *       *

    Sec. 157. Procedures

        (a) * * *
        (b)(1) * * *
                (2) Core proceedings include, but are not limited
            to--
                        (A) * * *

               *       *       *       *       *       *       *

                        (N) orders approving the sale of property
                    other than property resulting from claims
                    brought by the estate against persons who have
                    not filed claims against the estate; [and]
                        (O) other proceedings affecting the
                    liquidation of the assets of the estate or the
                    adjustment of the debtor-creditor or the equity
                    security holder relationship, except personal
                    injury tort or wrongful death claims[.]; and
                        (P) recognition of foreign proceedings and
                    other matters under chapter 15 of title 11.

               *       *       *       *       *       *       *

    Sec. 158. Appeals

        (a) * * *

               *       *       *       *       *       *       *

        (c)(1) [Subject to subsection (b),] Subject to subsections
    (b) and (d)(2), each appeal under subsection (a) shall be heard
    by a 3-judge panel of the bankruptcy appellate panel service
    established under subsection (b)(1) unless --
                        (A) * * *

               *       *       *       *       *       *       *

        (d)(1) The courts of appeals shall have jurisdiction of
    appeals from all final decisions, judgments, orders, and
    decrees entered under subsections (a) and (b) of this section.
        (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.

    Sec. 159. Bankruptcy statistics

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

               *       *       *       *       *       *       *

    Part II--Department of Justice

               *       *       *       *       *       *       *

                       CHAPTER 39--UNITED STATES TRUSTEES

    Sec.
    581.    United States trustees.
         * * * * * * *
    589b.    Bankruptcy data.

               *       *       *       *       *       *       *

    Sec. 586. Duties; supervision by Attorney General

        (a) Each United States trustee, within the region for which
    such United States trustee is appointed, shall--
                (1) * * *

               *       *       *       *       *       *       *

                (3) supervise the administration of cases and
            trustees in cases under chapter 7, 11, 12, [or 13] 13,
            or 15 of title 11 by, whenever the United States
            trustee considers it to be appropriate--
                        (A) * * *

               *       *       *       *       *       *       *

                        (G) monitoring the progress of cases under
                    title 11 and taking such actions as the United
                    States trustee deems to be appropriate to
                    prevent undue delay in such progress; [and]
                        (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
                        [(H)] (I) monitoring applications filed
                    under section 327 of title 11 and, whenever the
                    United States trustee deems it to be
                    appropriate, filing with the court comments
                    with respect to the approval of such
                    applications;

               *       *       *       *       *       *       *

                (5) perform the duties prescribed for the United
            States trustee under title 11 and this title, and such
            duties consistent with title 11 and this title as the
            Attorney General may prescribe; [and]
                [(6) make such reports as the Attorney General
            directs.]
                (6) make such reports as the Attorney General
            directs, including the results of audits performed
            under section 603(a) of the Bankruptcy Abuse Prevention
            and Consumer Protection Act of 2005;
                (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.

               *       *       *       *       *       *       *

        (d)(1) The Attorney General shall prescribe by rule
    qualifications for membership on the panels established by
    United States trustees under paragraph (a)(1) of this section,
    and qualifications for appointment under subsection (b) of this
    section to serve as standing trustee in cases under chapter 12
    or 13 of title 11. The Attorney General may not require that an
    individual be an attorney in order to qualify for appointment
    under subsection (b) of this section to serve as standing
    trustee in cases under chapter 12 or 13 of title 11.
        (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.
        (e)(1) * * *

               *       *       *       *       *       *       *

        (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.
        (f)(1) The United States trustee for each district is
    authorized to contract with auditors to perform audits in cases
    designated by the United States trustee, in accordance with the
    procedures established under section 603(a) of the Bankruptcy
    Abuse Prevention and Consumer Protection Act of 2005.
        (2)(A) The report of each audit referred to in paragraph
    (1) shall be filed with the court and transmitted to the United
    States trustee. Each report shall clearly and conspicuously
    specify any material misstatement of income or expenditures or
    of assets identified by the person performing the audit. In any
    case in which a material misstatement of income or expenditures
    or of assets has been reported, the clerk of the district court
    (or the clerk of the bankruptcy court if one is certified under
    section 156(b) of this title) shall give notice of the
    misstatement to the creditors in the case.
        (B) If a material misstatement of income or expenditures or
    of assets is reported, the United States trustee shall--
                (i) report the material misstatement, if
            appropriate, to the United States Attorney pursuant to
            section 3057 of title 18; and
                (ii) if advisable, take appropriate action,
            including but not limited to commencing an adversary
            proceeding to revoke the debtor's discharge pursuant to
            section 727(d) of title 11.

               *       *       *       *       *       *       *

    Sec. 589a. United States Trustee System Fund

        (a) * * *
        (b) For the purpose of recovering the cost of services of
    the United States Trustee System, there shall be deposited as
    offsetting collections to the appropriation ``United States
    Trustee System Fund'', to remain available until expended, the
    following--
                [(1) 27.42 percent of the fees collected under
            section 1930(a)(1) of this title;]
                (1)(A) 40.63 percent of the fees collected under
            section 1930(a)(1)(A) of this title; and
                (B) 70.00 percent of the fees collected under
            section 1930(a)(1)(B);
                (2) [one-half] 75 percent of the fees collected
            under section 1930(a)(3) of this title;

               *       *       *       *       *       *       *

                (4) [one-half] 100 percent of the fees collected
            under section 1930(a)(5) of this title;

               *       *       *       *       *       *       *

    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.

               *       *       *       *       *       *       *

    Part III--Court Officers and Employees

               *       *       *       *       *       *       *

        CHAPTER 57--GENERAL PROVISIONS APPLICABLE TO COURT OFFICERS AND
    EMPLOYEES

               *       *       *       *       *       *       *

    Sec. 960. Tax liability

        (a) Any officers and agents conducting any business under
    authority of a United States court shall be subject to all
    Federal, State and local taxes applicable to such business to
    the same extent as if it were conducted by an individual or
    corporation.
        (b) A tax under subsection (a) shall be paid on or before
    the due date of the tax under applicable nonbankruptcy law,
    unless--
                (1) the tax is a property tax secured by a lien
            against property that is abandoned under section 554 of
            title 11, within a reasonable period of time after the
            lien attaches, by the trustee in a case under title 11;
            or
                (2) payment of the tax is excused under a specific
            provision of title 11.
        (c) In a case pending under chapter 7 of title 11, payment
    of a tax may be deferred until final distribution is made under
    section 726 of title 11, if--
                (1) the tax was not incurred by a trustee duly
            appointed or elected under chapter 7 of title 11; or
                (2) before the due date of the tax, an order of the
            court makes a finding of probable insufficiency of
            funds of the estate to pay in full the administrative
            expenses allowed under section 503(b) of title 11 that
            have the same priority in distribution under section
            726(b) of title 11 as the priority of that tax.

               *       *       *       *       *       *       *

    Part IV--Jurisdiction and Venue

               *       *       *       *       *       *       *

    CHAPTER 85--DISTRICT COURTS; JURISDICTION

               *       *       *       *       *       *       *

    Sec. 1334. Bankruptcy cases and proceedings

        (a) * * *
        (b) [Notwithstanding] Except as provided in subsection
    (e)(2), and notwithstanding any Act of Congress that confers
    exclusive jurisdiction on a court or courts other than the
    district courts, the district courts shall have original but
    not exclusive jurisdiction of all civil proceedings arising
    under title 11, or arising in or related to cases under title
    11.
        (c)(1) [Nothing in] Except with respect to a case under
    chapter 15 of title 11, nothing in this section prevents a
    district court in the interest of justice, or in the interest
    of comity with State courts or respect for State law, from
    abstaining from hearing a particular proceeding arising under
    title 11 or arising in or related to a case under title 11.

               *       *       *       *       *       *       *

        (d) Any decision to abstain or not to abstain [made under
    this subsection] made under subsection (c) (other than a
    decision not to abstain in a proceeding described in subsection
    (c)(2)) is not reviewable by appeal or otherwise by the court
    of appeals under section 158(d), 1291, or 1292 of this title or
    by the Supreme Court of the United States under section 1254 of
    this title. [This subsection] Subsection (c) and this
    subsection shall not be construed to limit the applicability of
    the stay provided for by section 362 of title 11, United States
    Code, as such section applies to an action affecting the
    property of the estate in bankruptcy.
        [(e) The district court in which a case under title 11 is
    commenced or is pending shall have exclusive jurisdiction of
    all of the property, wherever located, of the debtor as of the
    commencement of such case, and of property of the estate.]
        (e) The district court in which a case under title 11 is
    commenced or is pending shall have exclusive jurisdiction--
                (1) of all the property, wherever located, of the
            debtor as of the commencement of such case, and of
            property of the estate; and
                (2) over all claims or causes of action that
            involve construction of section 327 of title 11, United
            States Code, or rules relating to disclosure
            requirements under section 327.

               *       *       *       *       *       *       *

    CHAPTER 87--DISTRICT COURTS; VENUE

               *       *       *       *       *       *       *

    Sec. 1409. Venue of proceedings arising under title 11 or arising in or
                        related to cases under title 11

        (a) * * *
        (b) Except as provided in subsection (d) of this section, a
    trustee in a case under title 11 may commence a proceeding
    arising in or related to such case to recover a money judgment
    of or property worth less than $1,000 or a consumer debt of
    less than [$5,000,] $15,000, or a debt (excluding a consumer
    debt) against a noninsider of less than $10,000, only in the
    district court for the district in which the defendant resides.

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

        [(a) A case under section 304 of title 11 to enjoin the
    commencement or continuation of an action or proceeding in a
    State or Federal court, or the enforcement of a judgment, may
    be commenced only in the district court for the district where
    the State or Federal court sits in which is pending the action
    or proceeding against which the injunction is sought.
        [(b) A case under section 304 of title 11 to enjoin the
    enforcement of a lien against a property, or to require the
    turnover of property of an estate, may be commenced only in the
    district court for the district in which such property is
    found.
                [(c) A case under section 304 of title 11, other
            than a case specified in subsection (a) or (b) of this
            section, may be commenced only in the district court
            for the district in which is located the principal
            place of business in the United States, or the
            principal assets in the United States, of the estate
            that is the subject of such case.]

    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.

               *       *       *       *       *       *       *

    Part V--Procedure

               *       *       *       *       *       *       *

                          CHAPTER 123--FEES AND COSTS

    Sec. 1930. Bankruptcy fees

        (a) [Notwithstanding section 1915 of this title, the] The
    parties commencing a case under title 11 shall pay to the clerk
    of the district court or the clerk of the bankruptcy court, if
    one has been certified pursuant to section 156(b) of this
    title, the following filing fees:
                [(1) For a case commenced under chapter 7 or 13 of
            title 11, $155.]
                (1) For a case commenced under--
                        (A) chapter 7 of title 11, $200; and
                        (B) chapter 13 of title 11, $150.

               *       *       *       *       *       *       *

                (3) For a case commenced under chapter 11 of title
            11 that doesnot concern a railroad, as defined in
            section 101 of title 11, [$800] $1000.

               *       *       *       *       *       *       *

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

               *       *       *       *       *       *       *

    CHAPTER 131--RULES OF COURTS

               *       *       *       *       *       *       *

    Sec. 2075. Bankruptcy rules

        The Supreme Court shall have the power to prescribe by
    general rules, the forms of process, writs, pleadings, and
    motions, and the practice and procedure in cases under title
    11. Such rules shall not abridge, enlarge, or modify any
    substantive right. The Supreme Court shall transmit to Congress
    not later than May 1 of the year in which a rule prescribed
    under this section is to become effective a copy of the
    proposed rule. The rule shall take effect no earlier than
    December 1 of the year in which it is transmitted to Congress
    unless otherwise provided by law. 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.

               *       *       *       *       *       *       *

                                  ----------

             SECTION 406 OF THE JUDICIARY APPROPRIATIONS ACT, 1990

        Sec. 406. (a) * * *
        (b) All fees as shall be hereafter collected for any
    service not of a kind described in any of the items enumerated
    as items 1 through 7 and as items 9 through 18, as in effect on
    November 21, 1989, of the bankruptcy miscellaneous fee schedule
    prescribed by the Judicial Conference of the United States
    [pursuant to 28 U.S.C. section 1930(b) and 33.87 percent of the
    fees hereafter collected under 28 U.S.C. section 1930(a)(1) and
    25 percent of the fees hererafter collected under 28 U.S.C.
    section 1930(a)(3) shall be deposited as offsetting receipts to
    the fund established under 28 U.S.C. section 1931] under
    section 1930(b) of title 28, United States Code, 31.25 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 and shall remain available to the Judiciary until
    expended to reimburse any appropriation for the amount paid out
    of such appropriation for expenses of the Courts of Appeals,
    District Courts, and other Judicial Services and the
    Administrative Office of the United States Courts. The Judicial
    Conference shall report to the Committees on Appropriations of
    the House of Representatives and the Senate on a quarterly
    basis beginning on the first day of each fiscal year regarding
    the sums deposited in said fund.

               *       *       *       *       *       *       *

                                  ----------

                         FEDERAL DEPOSIT INSURANCE ACT

               *       *       *       *       *       *       *
        Sec. 11. (a) * * *

               *       *       *       *       *       *       *

        (e) Provisions Relating to Contracts Entered Into Before
    Appointment of Conservator or Receiver.--
                (1) * * *

               *       *       *       *       *       *       *

                (8) Certain qualified financial contracts.--
                        (A) Rights of parties to contracts.--
                    Subject to [paragraph (10)] paragraphs (9) and
                    (10) of this subsection and notwithstanding any
                    other provision of this Act (other than
                    subsection (d)(9) of this section and section
                    13(e)), any other Federal law, or the law of
                    any State, no person shall be stayed or
                    prohibited from exercising--
                                (i) any right [to cause the
                            termination or liquidation] such person
                            has to cause the termination,
                            liquidation, or acceleration of any
                            qualified financial contract with an
                            insured depository institution which
                            arises upon the appointment of the
                            Corporation as receiver for such
                            institution at any time after such
                            appointment;
                                [(ii) any right under any security
                            arrangement relating to any contract or
                            agreement described in clause (i); or]
                                (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);

               *       *       *       *       *       *       *

                        (C) Certain transfers not avoidable.--
                                (i) In general.--Notwithstanding
                            paragraph (11), 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,
                            the Corporation, whether acting as such
                            or as conservator or receiver of an
                            insured depository institution, may not
                            avoid any transfer of money or other
                            property in connection with any
                            qualified financial contract with an
                            insured depository institution.

               *       *       *       *       *       *       *

                        (D) Certain contracts and agreements
                    defined.--For purposes of this [subsection--]
                    subsection, the following definitions shall
                    apply:
                                (i) Qualified financial contract.--
                            The term ``qualified financial
                            contract'' means any securities
                            contract, commodity contract, forward
                            contract, repurchase agreement, swap
                            agreement, and any similar agreement
                            that the Corporation determines by
                            regulation, resolution, or order to be
                            a qualified financial contract for
                            purposes of this paragraph.
                                [(ii) Securities contract.--The
                            term ``securities contract''--
                                        [(I) has the meaning given
                                    to such term in section 741 of
                                    title 11, United States Code,
                                    except that the term
                                    ``security'' (as used in such
                                    section) shall be deemed to
                                    include any mortgage loan, any
                                    mortgage-related security (as
                                    defined in section 3(a)(41) of
                                    the Securities Exchange Act of
                                    1934), and any interest in any
                                    mortgage loan or mortgage-
                                    related security; and
                                        [(II) does not include any
                                    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) Commodity contract.--The
                            term ``commodity contract'' has the
                            meaning given to such term in section
                            761 of title 11, United States Code.
                                [(iv) Forward contract.--The term
                            ``forward contract'' has the meaning
                            given to such term in section 101 of
                            title 11, United States Code.
                                [(v) Repurchase agreement.--The
                            term ``repurchase agreement''--
                                        [(I) has the meaning given
                                    to such term in section 101 of
                                    title 11, the United States
                                    Code, except that the items (as
                                    described in such section)
                                    which may be subject to any
                                    such agreement shall be deemed
                                    to include mortgage-related
                                    securities (as such term is
                                    defined in section 3(a)(41) of
                                    the Securities Exchange Act of
                                    1934), any mortgage loan, and
                                    any interest in any mortgage
                                    loan; and
                                        [(II) does not include any
                                    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.
                                [(vi) Swap agreement.--The term
                            ``swap agreement''--
                                        [(I) means any agreement,
                                    including the terms and
                                    conditions incorporated by
                                    reference in any such
                                    agreement, which is a rate swap
                                    agreement, basis swap,
                                    commodity swap, forward rate
                                    agreement, interest rate
                                    future, interest rate option
                                    purchased, forward foreign
                                    exchange agreement, rate cap
                                    agreement, rate floor
                                    agreement, rate collar
                                    agreement, currency swap
                                    agreement, cross-currency rate
                                    swap agreement, currency
                                    future, or currency option
                                    purchased or any other similar
                                    agreement, and
                                        [(II) includes any
                                    combination of such agreements
                                    and any option to enter into
                                    any such agreement.
                                [(vii) Treatment of master
                            agreement as 1 swap agreement.--Any
                            master agreement for any agreements
                            described in clause (vi)(I) together
                            with all supplements to such master
                            agreement shall be treated as 1 swap
                            agreement.
                                [(viii) Transfer.--The term
                            ``transfer'' has the meaning given to
                            such term in section 101 of title 11,
                            United States Code.]
                                (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.
                                (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.
                                (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.
                                (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).
                                (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.
                                (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.
                                (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.
                        (E) Certain protections in event of
                    appointment of conservator.--Notwithstanding
                    any other provision of this Act ([other than
                    paragraph (12) of this subsection, subsection
                    (d)(9)] other than subsections (d)(9) and
                    (e)(10) of this section, and section 13(e) of
                    this Act), any other Federal law, or the law of
                    any State, no person shall be stayed or
                    prohibited from exercising--
                                (i) * * *
                                [(ii) any right under any security
                            arrangement relating to such qualified
                            financial contracts; or]
                                (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);

               *       *       *       *       *       *       *

                        (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.
                        (H) Recordkeeping requirements.--The
                    Corporation, in consultation with the
                    appropriate Federal banking agencies and the
                    National Credit Union Administration Board, 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).
                [(9) Transfer of qualified financial contracts.--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--
                        [(A) transfer to 1 depository institution
                    (other than a depository institution in
                    default)--
                                [(i) all qualified financial
                            contracts between--
                                        [(I) any person or any
                                    affiliate of such person; and
                                        [(II) 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 any
                            claim described in clause (ii) or (iii)
                            under any such contract; or
                        [(B) transfer none of the financial
                    contracts, claims, or property referred to in
                    subparagraph (A) (with respect to such person
                    and any affiliate of such person).]
                (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.
                (10) Notification of transfer.--
                        (A) In general.--If--
                                (i) the conservator or receiver for
                            an insured depository institution in
                            default makes any transfer of the
                            assets and liabilities of such
                            institution; and
                                (ii) the transfer includes any
                            qualified financial contract,
                    [the conservator or receiver shall use such
                    conservator's or receiver's best efforts to
                    notify any person who is a party to any such
                    contract of such transfer by 12:00, noon (local
                    time) on the business day following such
                    transfer.] 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.
                        (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)] (D) Business day defined.--For
                    purposes of this paragraph, the term ``business
                    day'' means any day other than any Saturday,
                    Sunday, or any day on which either the New York
                    Stock Exchange or the Federal Reserve Bank of
                    New York is closed.
                (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).
                [(11)] (12) Certain security interests not
            avoidable.--No provision of this subsection shall be
            construed as permitting the avoidance of any legally
            enforceable or perfected security interest in any of
            the assets of any depository institution except where
            such an interest is taken in contemplation of the
            institution's insolvency or with the intent to hinder,
            delay, or defraud the institution or the creditors of
            such institution.
                [(12)] (13) Authority to enforce contracts.--
                        (A) In general.--The conservator or
                    receiver may enforce any contract, other than a
                    director's or officer's liability insurance
                    contract or a depository institution bond,
                    entered into by the depository institution
                    notwithstanding any provision of the contract
                    providing for termination, default,
                    acceleration, or exercise of rights upon, or
                    solely by reason of, insolvency or the
                    appointment of or the exercise of rights or
                    powers by a conservator or receiver.

               *       *       *       *       *       *       *

                [(13)] (14) Exception for federal reserve and
            federal home loan banks.--No provision of this
            subsection shall apply with respect to--
                        (A) * * *

               *       *       *       *       *       *       *

                [(14)] (15) Selling credit card accounts
            receivable.--
                        (A) * * *

               *       *       *       *       *       *       *

                [(15)] (16) Certain credit card customer lists
            protected.--
                        (A) * * *

               *       *       *       *       *       *       *

                (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. 13. (a) * * *

               *       *       *       *       *       *       *

        (e) Agreements Against Interests of Corporation.--
                (1) * * *
                [(2) Public deposits.--An agreement to provide for
            the lawful collateralization of deposits of a Federal,
            State, or local governmental entity or of any depositor
            referred to in section 11(a)(2) shall not be deemed to
            be invalid pursuant to paragraph (1)(B) solely because
            such agreement was not executed contemporaneously with
            the acquisition of the collateral or with any changes
            in the collateral made in accordance with such
            agreement.]
                (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.

               *       *       *       *       *       *       *

                                  ----------

                            FEDERAL CREDIT UNION ACT

    TITLE II--SHARE INSURANCE

               *       *       *       *       *       *       *

                              payment of insurance

        Sec. 207. (a) * * *

               *       *       *       *       *       *       *

        (c) Provisions Relating to Contracts Entered Into Before
    Appointment of Conservator or Liquidating Agent.--
                (1) * * *

               *       *       *       *       *       *       *

                (8) Certain qualified financial contracts.--
                        (A) Rights of parties to contracts.--
                    Subject to [paragraph (12)] paragraphs (9) and
                    (10) of this subsection and notwithstanding any
                    other provision of this Act (other than
                    subsection (b)(9) of this section and section
                    208(a)(3)), any other Federal law, or the law
                    of any State, no person shall be stayed or
                    prohibited from exercising--
                                (i) any right [to cause the
                            termination or liquidation] such person
                            has to cause the termination,
                            liquidation, or acceleration of any
                            qualified financial contract with an
                            insured credit union which arises upon
                            the appointment of the Board as
                            liquidating agent for such credit union
                            at any time after such appointment;
                                [(ii) any right under any security
                            arrangement relating to any contract or
                            agreement described in clause (i); or]
                                (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);

               *       *       *       *       *       *       *

                        (C) Certain transfers not avoidable.--
                                (i) In general.--Notwithstanding
                            paragraph (11), 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,
                            the Board, whether acting as such or as
                            conservator or liquidating agent of an
                            insured credit union, may not avoid any
                            transfer of money or other property in
                            connection with any qualified financial
                            contract with an insured credit union.

               *       *       *       *       *       *       *

                        (D) Certain contracts and agreements
                    defined.--For purposes of this [subsection--]
                    subsection, the following definitions shall
                    apply:
                                (i) Qualified financial contract.--
                            The term ``qualified financial
                            contract'' means any securities
                            contract, forward contract, repurchase
                            agreement, and any similar agreement
                            that the Board determines by
                            regulation, resolution, or order to be
                            a qualified financial contract for
                            purposes of this paragraph.
                                [(ii) Securities contract.--The
                            term ``securities contract''--
                                        [(I) has the meaning given
                                    to such term in section 741 of
                                    title 11, United States Code,
                                    except that the term
                                    ``security'' (as used in such
                                    section) shall be deemed to
                                    include any mortgage loan, any
                                    mortgage-related security (as
                                    defined in section 3(a)(41) of
                                    the Securities Exchange Act of
                                    1934, and any interest in any
                                    mortgage loan or mortgage-
                                    related security; and
                                        [(II) does not include any
                                    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) Forward contract.--The term
                            ``forward contract'' has the meaning
                            given to such term in section 101 of
                            title 11, United States Code.
                                [(iv) Repurchase agreement.--The
                            term ``repurchase agreement''--
                                        [(I) has the meaning given
                                    to such term in section 101 of
                                    title 11, the United States
                                    Code, except that the items (as
                                    described in such section)
                                    which may be subject to any
                                    such agreement shall be deemed
                                    to include mortgage-related
                                    securities (as such term is
                                    defined in section 3(a)(41) of
                                    the Securities Exchange Act of
                                    1934, any mortgage loan, and
                                    any interest in any mortgage
                                    loan; and
                                        [(II) does not include any
                                    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.
                                [(v) Transfer.--The term
                            ``transfer'' has the meaning given to
                            such term in section 101 of title 11,
                            United States Code.]
                                (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.
                                (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.
                                (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.
                                (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).
                                (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.
                                (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.
                                (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.
                        (E) Certain protections in event of
                    appointment of conservator.--Notwithstanding
                    any other provision of this Act ([other than
                    paragraph (12) of this subsection, subsection
                    (b)(9)] other than subsections (b)(9) and
                    (c)(10) of this section, and section 208(a)(3)
                    of this Act), any other Federal law, or the law
                    of any State, no person shall be stayed or
                    prohibited from exercising--
                                (i) * * *
                                [(ii) any right under any security
                            arrangement relating to such qualified
                            financial contracts; or]
                                (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);

               *       *       *       *       *       *       *

                        (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.
                        (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).
                [(9) Transfer of qualified financial contracts.--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--
                        [(A) transfer to 1 credit union (other than
                    a credit union in default)--
                                [(i) all qualified financial
                            contracts between--
                                        [(I) any person or any
                                    affiliate of such person; and
                                        [(II) 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 any
                            claim described in clause (ii) or (iii)
                            under any such contract; or
                        [(B) transfer none of the financial
                    contracts, claims, or property referred to in
                    subparagraph (A) (with respect to such person
                    and any affiliate of such person).]
                (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.
                (10) Notification of transfer.--
                        (A) In general.--If--
                                (i) * * *
                                (ii) the transfer includes any
                            qualified financial contract,
                    [the conservator or liquidating agent shall use
                    such conservator's or liquidating agent's best
                    efforts to notify any person who is a party to
                    any such contract of such transfer by 12:00,
                    noon (local time), on the business day
                    following such transfer.] 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.
                        (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.
                        [(B)] (D) Business day defined.--For
                    purposes of this paragraph, the term ``business
                    day'' means any day other than any Saturday,
                    Sunday, or any day on which either the New York
                    Stock Exchange or the Federal Reserve Bank of
                    New York is closed.
                (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).
                [(11)] (12) Certain security interests not
            avoidable.--No provision of this subsection shall be
            construed as permitting the avoidance of any legally
            enforceable or perfected security interest in any of
            the assets of any credit union except where such an
            interest is taken in contemplation of the credit
            union's insolvency or with the intent to hinder, delay,
            or defraud the credit union or the creditors of such
            credit union.
                [(12)] (13) Authority to enforce contracts.--
                        (A) In general.--The conservator or
                    liquidating agent may enforce any contract,
                    other than a director's or officer's liability
                    insurance contract or a credit union bond,
                    entered into by the credit union
                    notwithstanding any provision of the contract
                    providing for termination, default,
                    acceleration, or exercise of rights upon, or
                    solely by reason of, insolvency or the
                    appointment of or the exercise of rights or
                    powers by a conservator or liquidating agent.

               *       *       *       *       *       *       *

                [(13)] (14) Exception for federal reserve and
            federal home loan banks.--No provision of this
            subsection shall apply with respect to--
                        (A) * * *

               *       *       *       *       *       *       *

                (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.

               *       *       *       *       *       *       *

                                  ----------

    FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991

               *       *       *       *       *       *       *

                       TITLE IV--MISCELLANEOUS PROVISIONS

                   Subtitle A--Payment System Risk Reduction

    CHAPTER 1--BILATERAL AND CLEARING ORGANIZATION NETTING

               *       *       *       *       *       *       *

    SEC. 402. DEFINITIONS.

        For purposes of this chapter--
                (1)  * * *

               *       *       *       *       *       *       *

                (2) Clearing organization.--The term ``clearing
            organization'' means a clearinghouse, clearing
            association, clearing corporation, or similar
            organization--
                        (A) that provides clearing, netting, or
                    settlement services for its members and--
                                (i)  * * *
                                (ii) which is registered as a
                            clearing agency under the Securities
                            Exchange Act of 1934, or is exempt from
                            such registration by order of the
                            Securities and Exchange Commission; or
                        (B) that is registered as a derivatives
                    clearing organization under section 5b of the
                    Commodity Exchange Act, 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).

               *       *       *       *       *       *       *

                (6) Depository institution.--The term ``depository
            institution'' means--
                        (A) a depository institution as defined in
                    section 19(b)(1)(A) of the Federal Reserve Act
                    (other than clause (vii));
                        [(B) a branch or agency as defined in
                    section 1(b) of the International Banking Act
                    of 1978;]
                        (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;
                        (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;
                        [(C)] (D) a corporation chartered under
                    section 25(a) of the Federal Reserve Act; or
                        [(D)] (E) a corporation having an agreement
                    or undertaking with the Board of Governors of
                    the Federal Reserve System under section 25 of
                    the Federal Reserve Act.

               *       *       *       *       *       *       *

                (11) Member.--The term ``member'' means a member of
            or participant in a clearing organization, and includes
            the clearing organization and any other clearing
            organization with which such clearing organization has
            a netting contract.

               *       *       *       *       *       *       *

                (14) Netting contract.--
                        (A) In general.--The term ``netting
                    contract''--
                                [(i) means a contract or agreement
                            between 2 or more financial
                            institutions or members, that--
                                        [(I) is governed by the
                                    laws of the United States, any
                                    State, or any political
                                    subdivision of any State, and
                                        [(II) provides for netting
                                    present or future payment
                                    obligations or payment
                                    entitlements (including
                                    liquidation or close-out values
                                    relating to the obligations or
                                    entitlements) among the parties
                                    to the agreement; and]
                                (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

               *       *       *       *       *       *       *

                (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.

    SEC. 403. BILATERAL NETTING.

        [(a) General Rule.--Notwithstanding any other provision of
    law, 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.]
        (a) General Rule.--Notwithstanding any other provision of
    State or Federal law (other than paragraphs (8)(E), (8)(F), and
    (10)(B) of section 11(e) of the Federal Deposit Insurance Act,
    paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) of the
    Federal Credit Union Act, or any order authorized under section
    5(b)(2) of the Securities Investor Protection Act of 1970), the
    covered contractual payment obligations and the covered
    contractual payment entitlements between any 2 financial
    institutions shall be netted in accordance with, and subject to
    the conditions of, the terms of any applicable netting contract
    (except as provided in section 561(b)(2) of title 11, United
    States Code).

               *       *       *       *       *       *       *

        (f) Enforceability of Security Agreements.--The provisions
    of any security agreement or arrangement or other credit
    enhancement related to one or more netting contracts between
    any 2 financial institutions shall be enforceable in accordance
    with their terms (except as provided in section 561(b)(2) of
    title 11, United States Code), and shall not be stayed,
    avoided, or otherwise limited by any State or Federal law
    (other than paragraphs (8)(E), (8)(F), and (10)(B) of section
    11(e) of the Federal Deposit Insurance Act, paragraphs (8)(E),
    (8)(F), and (10)(B) of section 207(c) of the Federal Credit
    Union Act, and section 5(b)(2) of the Securities Investor
    Protection Act of 1970).

    SEC. 404. CLEARING ORGANIZATION NETTING.

        [(a) General Netting Rule.--Notwithstanding any other
    provision of law, the covered contractual payment obligations
    and 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.]
        (a) General Rule.--Notwithstanding any other provision of
    State or Federal law (other than paragraphs (8)(E), (8)(F), and
    (10)(B) of section 11(e) of the Federal Deposit Insurance Act,
    paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) of the
    Federal Credit Union Act, and any order authorized under
    section 5(b)(2) of the Securities Investor Protection Act of
    1970), the covered contractual payment obligations and the
    covered contractual payment entitlements of a member of a
    clearing organization to and from all other members of a
    clearing organization shall be netted in accordance with and
    subject to the conditions of any applicable netting contract
    (except as provided in section 561(b)(2) of title 11, United
    States Code).

               *       *       *       *       *       *       *

        (h) Enforceability of Security Agreements.--The provisions
    of any security agreement or arrangement or other credit
    enhancement related to one or more netting contracts between
    any 2 members of a clearing organization shall be enforceable
    in accordance with their terms (except as provided in section
    561(b)(2) of title 11, United States Code), and shall not be
    stayed, avoided, or otherwise limited by any State or Federal
    law (other than paragraphs (8)(E), (8)(F), and (10)(B) of
    section 11(e) of the Federal Deposit Insurance Act, paragraphs
    (8)(E), (8)(F), and (10)(B) of section 207(c) of the Federal
    Credit Union Act, and section 5(b)(2) of the Securities
    Investor Protection Act of 1970).

               *       *       *       *       *       *       *

    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. [407] 407A. NATIONAL EMERGENCIES.

        The provisions of this subtitle may not be construed to
    limit the authority of the President under the Trading With the
    Enemy Act (50 U.S.C. App. 1 et seq.) or the International
    Emergency Economic Powers Act (50 U.S.C. 1701 et seq.).

               *       *       *       *       *       *       *

                                  ----------

    SECURITIES INVESTOR PROTECTION ACT OF 1970

               *       *       *       *       *       *       *

    SEC. 5. PROTECTION OF CUSTOMERS.

        (a)  * * *
        (b) Court Action.--
                (1)  * * *
                (2) Jurisdiction and powers of court.--
                        (A)  * * *

               *       *       *       *       *       *       *

                        (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.

               *       *       *       *       *       *       *

    SEC. 6. GENERAL PROVISIONS OF A LIQUIDATION PROCEEDING.

        (a)  * * *

               *       *       *       *       *       *       *

        (e) Costs and Expenses of Administration.--All costs and
    expenses of administration of the estate of the debtor and of
    the liquidation proceeding shall be borne by the general estate
    of the debtor to the extent it is sufficient therefor, and the
    priorities of distribution from the general estate shall be as
    provided in section 726 of title 11 of the United States Code.
    Costs and expenses of administration shall include payments
    pursuant to section 8(e) and section 9(c)(1) (to the extent
    such payments recovered securities which were apportioned to
    the general estate pursuant to subsection (d)) and costs and
    expenses of SIPC employees utilized by the trustee pursuant to
    section 7(a)(2). All funds advanced by SIPC to a trustee for
    such costs and expenses of administration shall be recouped
    from the general estate under section [507(a)(1)] 507(a)(2) of
    title 11 of the United States Code.

               *       *       *       *       *       *       *

                                  ----------

       SECTION 302 OF THE BANKRUPTCY JUDGES, UNITED STATES TRUSTEES, AND
                      FAMILY FARMER BANKRUPTCY ACT OF 1986

    SEC. 302. EFFECTIVE DATES; APPLICATION OF AMENDMENTS.

        (a) * * *

               *       *       *       *       *       *       *

        [(f) Repeal of Chapter 12 of Title 11.--Chapter 12 of title
    11 of the United States Code is repealed on October 1, 1998.
    All cases commenced or pending under chapter 12 of title 11,
    United States Code, and all matters and proceedings in or
    relating to such cases, shall be conducted and determined under
    such chapter as if such chapter had not been repealed. The
    substantive rights of parties in connection with such cases,
    matters, and proceedings shall continue to be governed under
    the laws applicable to such cases, matters, and proceedings as
    if such chapter had not been repealed.]
                                  ----------

                              TRUTH IN LENDING ACT

               *       *       *       *       *       *       *
    CHAPTER 2--CREDIT TRANSACTIONS

               *       *       *       *       *       *       *

    Sec. 127. Open end consumer credit plans

        (a)  * * *

               *       *       *       *       *       *       *

        (b) The creditor of any account under an open end consumer
    credit plan shall transmit to the obligor, for each billing
    cycle at the end of which there is an outstanding balance in
    that account or with respect to which a finance charge is
    imposed, a statement setting forth each of the following items
    to the extent applicable:
                (1)  * * *

               *       *       *       *       *       *       *

                (11)(A) In the case of an open end credit plan that
            requires a minimum monthly payment of not more than 4
            percent of the balance on which finance charges are
            accruing, the following statement, located on the front
            of the billing statement, disclosed clearly and
            conspicuously: ``Minimum Payment Warning: Making only
            the minimum payment will increase the interest you pay
            and the time it takes to repay your balance. For
            example, making only the typical 2% minimum monthly
            payment on a balance of $1,000 at an interest rate of
            17% would take 88 months to repay the balance in full.
            For an estimate of the time it would take to repay your
            balance, making only minimum payments, call this toll-
            free number: ______.'' (the blank space to be filled in
            by the creditor).
                (B) In the case of an open end credit plan that
            requires a minimum monthly payment of more than 4
            percent of the balance on which finance charges are
            accruing, the following statement, in a prominent
            location on the front of the billing statement,
            disclosed clearly and conspicuously: ``Minimum Payment
            Warning: Making only the required minimum payment will
            increase the interest you pay and the time it takes to
            repay your balance. Making a typical 5% minimum monthly
            payment on a balance of $300 at an interest rate of 17%
            would take 24 months to repay the balance in full. For
            an estimate of the time it would take to repay your
            balance, making only minimum monthly payments, call
            this toll-free number: ______.'' (the blank space to be
            filled in by the creditor).
                (C) Notwithstanding subparagraphs (A) and (B), in
            the case of a creditor with respect to which compliance
            with this title is enforced by the Federal Trade
            Commission, the following statement, in a prominent
            location on the front of the billing statement,
            disclosed clearly and conspicuously: ``Minimum Payment
            Warning: Making only the required minimum payment will
            increase the interest you pay and the time it takes to
            repay your balance. For example, making only the
            typical 5% minimum monthly payment on a balance of $300
            at an interest rate of 17% would take 24 months to
            repay the balance in full. For an estimate of the time
            it would take to repay your balance, making only
            minimum monthly payments, call the Federal Trade
            Commission at this toll-free number: ______.'' (the
            blank space to be filled in by the creditor). A
            creditor who is subject to this subparagraph shall not
            be subject to subparagraph (A) or (B).
                (D) Notwithstanding subparagraph (A), (B), or (C),
            in complying with any such subparagraph, a creditor may
            substitute an example based on an interest rate that is
            greater than 17 percent. Any creditor that is subject
            to subparagraph (B) may elect to provide the disclosure
            required under subparagraph (A) in lieu of the
            disclosure required under subparagraph (B).
                (E) The Board shall, by rule, periodically
            recalculate, as necessary, the interest rate and
            repayment period under subparagraphs (A), (B), and (C).
                (F)(i) The toll-free telephone number disclosed by
            a creditor or the Federal Trade Commission under
            subparagraph (A), (B), or (G), as appropriate, may be a
            toll-free telephone number established and maintained
            by the creditor or the Federal Trade Commission, as
            appropriate, or may be a toll-free telephone number
            established and maintained by a third party for use by
            the creditor or multiple creditors or the Federal Trade
            Commission, as appropriate. The toll-free telephone
            number may connect consumers to an automated device
            through which consumers may obtain information
            described in subparagraph (A), (B), or (C), by
            inputting information using a touch-tone telephone or
            similar device, if consumers whose telephones are not
            equipped to use such automated device are provided the
            opportunity to be connected to an individual from whom
            the information described in subparagraph (A), (B), or
            (C), as applicable, may be obtained. A person that
            receives a request for information described in
            subparagraph (A), (B), or (C) from an obligor through
            the toll-free telephone number disclosed under
            subparagraph (A), (B), or (C), as applicable, shall
            disclose in response to such request only the
            information set forth in the table promulgated by the
            Board under subparagraph (H)(i).
                (ii)(I) The Board shall establish and maintain for
            a period not to exceed 24 months following the
            effective date of the Bankruptcy Abuse Prevention and
            Consumer Protection Act of 2005, a toll-free telephone
            number, or provide a toll-free telephone number
            established and maintained by a third party, for use by
            creditors that are depository institutions (as defined
            in section 3 of the Federal Deposit Insurance Act),
            including a Federal credit union or State credit union
            (as defined in section 101 of the Federal Credit Union
            Act), with total assets not exceeding $250,000,000. The
            toll-free telephone number may connect consumers to an
            automated device through which consumers may obtain
            information described in subparagraph (A) or (B), as
            applicable, by inputting information using a touch-tone
            telephone or similar device, if consumers whose
            telephones are not equipped to use such automated
            device are provided the opportunity to be connected to
            an individual from whom the information described in
            subparagraph (A) or (B), as applicable, may be
            obtained. A person that receives a request for
            information described in subparagraph (A) or (B) from
            an obligor through the toll-free telephone number
            disclosed under subparagraph (A) or (B), as applicable,
            shall disclose in response to such request only the
            information set forth in the table promulgated by the
            Board under subparagraph (H)(i). The dollar amount
            contained in this subclause shall be adjusted according
            to an indexing mechanism established by the Board.
                (II) Not later than 6 months prior to the
            expiration of the 24-month period referenced in
            subclause (I), the Board shall submit to the Committee
            on Banking, Housing, and Urban Affairs of the Senate
            and the Committee on Financial Services of the House of
            Representatives a report on the program described in
            subclause (I).
                (G) The Federal Trade Commission shall establish
            and maintain a toll-free number for the purpose of
            providing to consumers the information required to be
            disclosed under subparagraph (C).
                (H) The Board shall--
                        (i) establish a detailed table illustrating
                    the approximate number of months that it would
                    take to repay an outstanding balance if a
                    consumer pays only the required minimum monthly
                    payments and if no other advances are made,
                    which table shall clearly present standardized
                    information to be used to disclose the
                    information required to be disclosed under
                    subparagraph (A), (B), or (C), as applicable;
                        (ii) establish the table required under
                    clause (i) by assuming--
                                (I) a significant number of
                            different annual percentage rates;
                                (II) a significant number of
                            different account balances;
                                (III) a significant number of
                            different minimum payment amounts; and
                                (IV) that only minimum monthly
                            payments are made and no additional
                            extensions of credit are obtained; and
                        (iii) promulgate regulations that provide
                    instructional guidance regarding the manner in
                    which the information contained in the table
                    established under clause (i) should be used in
                    responding to the request of an obligor for any
                    information required to be disclosed under
                    subparagraph (A), (B), or (C).
                (I) The disclosure requirements of this paragraph
            do not apply to any charge card account, the primary
            purpose of which is to require payment of charges in
            full each month.
                (J) A creditor that maintains a toll-free telephone
            number for the purpose of providing customers with the
            actual number of months that it will take to repay the
            customer's outstanding balance is not subject to the
            requirements of subparagraph (A) or (B).
                (K) A creditor that maintains a toll-free telephone
            number for the purpose of providing customers with the
            actual number of months that it will take to repay an
            outstanding balance shall include the following
            statement on each billing statement: ``Making only the
            minimum payment will increase the interest you pay and
            the time it takes to repay your balance. For more
            information, call this toll-free number: ____.'' (the
            blank space to be filled in by the creditor).
                (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.
        (c) Disclosure in Credit and Charge Card Applications and
    Solicitations.--
                (1)  * * *

               *       *       *       *       *       *       *

                (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.
                (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.

               *       *       *       *       *       *       *

        (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.

    SEC. 127A. DISCLOSURE REQUIREMENTS FOR OPEN END CONSUMER CREDIT PLANS
                        SECURED BY THE CONSUMER'S PRINCIPAL DWELLING.

        (a) Application Disclosures.--In the case of any open end
    consumer credit plan which provides for any extension of credit
    which is secured by the consumer's principal dwelling, the
    creditor shall make the following disclosures in accordance
    with subsection (b):
                (1)  * * *

               *       *       *       *       *       *       *

                (13) Statement regarding [consultation of tax
            advisor.--A statement that the] tax deductibility.--A
            statement that--
                        (A) the consumer should consult a tax
                    advisor regarding the deductibility of interest
                    and charges under the plan[.]; 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.

               *       *       *       *       *       *       *

    Sec. 128. Consumer credit not under open end credit plans

        (a) For each consumer credit transaction other than under
    an open end credit plan, the creditor shall disclose each of
    the following items, to the extent applicable:
                (1)  * * *

               *       *       *       *       *       *       *

                (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.
        (b)(1)  * * *

               *       *       *       *       *       *       *

        (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.

               *       *       *       *       *       *       *

    CHAPTER 3--CREDIT ADVERTISING

               *       *       *       *       *       *       *

    Sec. 144. Advertising of credit other than open end plans

        (a)  * * *

               *       *       *       *       *       *       *

        (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.

               *       *       *       *       *       *       *

    SEC. 147. ADVERTISING OF OPEN END CONSUMER CREDIT PLANS SECURED BY THE
                        CONSUMER'S PRINCIPAL DWELLING.

        (a)  * * *
        (b) Tax Deductibility.--[If any]
                (1) In general.--If any advertisement described in
            subsection (a) contains a statement that any interest
            expense incurred with respect to the plan is or may be
            tax deductible, the advertisement shall not be
            misleading with respect to such deductibility.
                (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.

               *       *       *       *       *       *       *

                         Committee Jurisdiction Letters

                               Markup Transcript

                                BUSINESS MEETING

                                 MARCH 16, 2005

                      House of Representatives,
                                    Committee on the Judiciary,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:07 a.m., in
    Room 2141, Rayburn House Office Building, Hon. F. James
    Sensenbrenner, Jr. [Chairman of the Committee] presiding.
        Chairman Sensenbrenner. The Committee will be in order, and
    a working quorum is present.
        Pursuant to notice, I now call up the bill Senate 256, the
    ``Bankruptcy Abuse and Consumer Protection Act of 2005,'' for
    purposes of markup and move its favorable recommendation to the
    House. Without objection, the bill will be considered as read
    and open for amendment at any point.
        [The bill, S. 256, the ``Bankruptcy Abuse and Consumer
    Protection Act of 2005,'' is not reprinted here but can be
    accessed at http://frwebgate.access.gpo.gov/cgi-bin/
    getdoc.cgi?dbname=109_cong_bills&docid=f:s256rfh.txt.pdf:]
        Chairman Sensenbrenner. And the Chair recognizes himself
    for 5 minutes to explain the bill.
        Today we consider a bill with an extensive history before
    this Committee and the Congress. S. 256, the ``Bankruptcy Abuse
    Prevention and Consumer Protection Act of 2005'' represents the
    culmination of nearly 8 years of intense and detailed
    consideration by this Committee. Over the course of the last
    four Congresses, this legislation has benefitted immensely from
    an exhaustive hearing and amendment process as well as
    meaningful bipartisan and bicameral negotiations.
        Last week, the Senate passed this legislation by a vote of
    74 to 25, marking the fifth time that body has registered its
    overwhelming support for bankruptcy reform legislation in the
    last four Congresses. The House has also repeatedly expressed
    its overwhelming support. To date, the House has passed
    bankruptcy reform measures on eight occasions since the 105th
    Congress. This legislation reflects the product of intensive
    process before this Committee. Over the past four Congresses,
    the Judiciary Committee and the Subcommittee on Commercial and
    Administrative Law have held 18 hearings on the need for
    bankruptcy reform, 11 of which were devoted specifically to
    predecessors of S. 256. In addition, the Senate Judiciary
    Committee has held 11 hearings on bankruptcy reform, including
    a hearing held last month.
        During the 106th Congress, this Committee entertained 59
    amendments over the course of a 5-day markup on H.R. 833, which
    included 29 recorded votes. Of these amendments, 27 were agreed
    to. On the floor, 11 more amendments were considered. After
    passage on the House floor during the 106th Congress, conferees
    spent nearly 7 months engaged in an informal conference to
    reconcile differences between the House- and Senate-passed
    versions of bankruptcy reform legislation. During the 107th
    Congress, this Committee considered an additional 18 amendments
    during the course of its markup on S. 256 predecessor, and five
    more amendments were considered on the House floor.
        After House passage of bankruptcy reform legislation in the
    107th Congress, conferees formally met on three occasions and
    ultimately agreed, after an 11-month period of negotiation, to
    a bipartisan conference report. Finally, during the last
    Congress, the Judiciary Committee entertained nine amendments
    to bankruptcy legislation, and the House considered five more.
        It's no secret that I will strongly encourage Members of
    this Committee to vigorously oppose all amendments to S. 256 as
    passed by the Senate based on this extensive record. The
    reasons are obvious. As the record makes clear, this
    legislation is the product of exhaustive consideration by the
    Congress. It is a well-crafted package of extensive bipartisan
    and bicameral negotiation and compromise.
        As introduced, the bill is substantively identical to
    legislation that passed the House by an overwhelming vote
    margin, not on one but on two occasions in the last Congress.
    Although the Senate-passed bill we consider today includes a
    series of amendments, they all received bipartisan support and
    many were agreed to by unanimous consent.
        Second, and perhaps most importantly, the need for
    bankruptcy reform is long overdue and crucial to our Nation's
    economy and the well-being of our citizens. Every day that goes
    by without these reforms, more abuse and fraud goes undetected.
    Every abusive bankruptcy filing adversely affects hard-working
    Americans in the form of higher interest rates and increased
    cost of goods and services. America's economy should not suffer
    any longer from the billions of dollars of losses associated
    with profligate and abusive bankruptcy filings. We need to
    close the so-called mansion loophole now. We need to ensure
    that deadbeat parents can no longer use bankruptcy to shed
    their child and spousal support obligations. We need to make
    Chapter 12, a specialized form of bankruptcy relief for family
    farmers, a permanent component of the Bankruptcy Code and need
    to extend that relief to family fishermen. And we need to enact
    important administrative reforms by direct appeals, streamlined
    reorganization procedures, and additional bankruptcy judges
    that will reduce unnecessary burdens upon the current system by
    those who must administer and use it.
        In short, we need to restore a measure of personal
    responsibility and accountability to the bankruptcy system, and
    S. 256 advances this crucial goal. I will, accordingly, urge my
    colleagues to report this bill without amendment.
        I yield back the balance of my time and recognize the
    gentleman from Michigan for 5 minutes.
        Mr. Conyers. Thank you, Mr. Chairman and Members. This is
    the first time I've heard us urge that amendments be rejected
    before they've even been named, identified, or offered. So I
    suppose this is a very serious effort as the majority continues
    their assault on the American consumer. Last month, and
    starting from this Committee, we passed into law special
    interest class legislation--class action legislation which
    slams the door on court statehouses for millions of individuals
    harmed by fraud, deception, civil rights, and labor abuses.
        Now, today we take up the bankruptcy bill which massively
    tilts the playing field in favor of credit card companies and
    against ordinary workers and families.
        Last year, nearly 1.5 million ordinary working individuals
    filed for bankruptcy. Their average income was less than
    $25,000, and the principal causes for their filings were
    layoffs and medical bills. In my judgment, it would be a grave
    mistake to punish these individuals while rewarding credit card
    companies and business lobbyists at a time when corporate greed
    is being reported regularly and has already destroyed or harmed
    the lives of millions of American workers.
        To those who think the bill is a fair compromise that only
    punishes wealthy debtors, then check on how this bill gives
    creditors massive new rights to bring threatening motions
    against low-income debtors, how the bill permits credit card
    companies to reclaim common household goods, if anybody would
    want them, of little value to anybody but themselves but very
    important to the debtor's family.
        Check in this legislation we are considering how it makes
    next to impossible for people below the poverty line to keep
    their house or their car in bankruptcy. For those who might
    think that the bill protects alimony and child support problems
    in families, look and see if they find where the bill, as I
    have found, creates major new categories of non-dischargeable
    debt that compete directly against the collection of child
    support and alimony payments; whether they're--we're aware of
    the fact the bill allows landlords to evict even battered women
    without bankruptcy court approval, even if the eviction poses a
    threat to the woman's physical well-being.
        If you think the bill cracks down on creditor abuse, then
    look again because the bill does absolutely nothing to
    discourage abusive, underage lending, nothing to discourage
    reckless lending to the developmentally disabled, nothing to
    regulate the price of so-called sub-prime lending to persons
    with no means or little ability to repay their debt, and
    nothing to crack down on unscrupulous payday lenders that prey
    on the members of our Armed Forces.
        The bill--does the bill fix the problems of homestead
    exemption abuse? Well, look again, because there we don't
    repeal or even cap homestead--the homestead exemption. The bill
    does nothing to prevent the very worst abuses of the Bankruptcy
    Code, for example, avoiding claims for bilking seniors out of
    billions of dollars of their life savings or denying workers
    their hard-earned pension payments. It ignores in this
    legislation, after all these years, the asset trust loophole
    whereby high-income individuals stash away millions of dollars
    in special trusts to avoid their debts in bankruptcy as we go
    after ordinary workers who may have been forced into bankruptcy
    by medical bills.
        I urge every Member of this Committee to reconsider the
    real-life consequences of what we're doing in one of the worst
    consumer bills I have ever had the sorrow to have to speak
    against in this Committee. This is a bad bill. The time has
    come that we stop writing these bills for credit card companies
    and that these businesses that use their political muscle must
    be stopped. Here's a great place to do it today.
        I thank the Chairman.
        Chairman Sensenbrenner. The time of the gentleman has
    expired. Without objection, all Members may insert opening
    statements in the record at this point.
        Are there amendments?
        Mr. Watt. Mr. Chairman?
        Mr. Cannon. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from Utah.
        Mr. Cannon. If I could enter into colloquy with the
    Chairman, I am pleased that we are reporting this legislation
    today, but I would note that the bankruptcy judgeship numbers
    in the Senate bill are outdated and do not reflect the current
    numbers submitted by the Judicial Conference this year.
    Additional judgeships are sorely needed in a number of
    districts across the country, including in my State of Utah. I
    am wondering, Mr. Chairman, if we can deal with this issue in
    some manner, either a technical bill or a free-standing bill,
    and if the Chairman will commit to doing that in the near
    future.
        Chairman Sensenbrenner. Would the gentleman yield?
        Mr. Cannon. Certainly.
        Chairman Sensenbrenner. It is the hope of the Chairman that
    additional judgeships and not just bankruptcy judges can be
    dealt with later on this year in response to an updated
    Judicial Conference recommendation where the judgeships are
    needed, and this includes article III judges as well.
        Mr. Cannon. Thank you, Mr. Chairman. I yield back.
        Mr. Conyers. Mr. Chairman?
        Chairman Sensenbrenner. Are there amendments?
        Mr. Watt. Mr. Chairman?
        Mr. Conyers. I have an amendment.
        Chairman Sensenbrenner. The gentleman from Michigan. The
    clerk will report the amendment.
        The Clerk. Amendment to S. 256 offered by Mr. Conyers, page
    687, after line 18, insert the following: ``(and make such
    technical and conforming change as may be appropriate''----
        Mr. Conyers. Mr. Chairman, I ask that the amendment be
    considered as read.
        Chairman Sensenbrenner. Without objection.
        [The amendment follows:]

        Chairman Sensenbrenner. The gentleman is recognized for 5
    minutes.
        Mr. Conyers. Thank you very much.
        Ladies and gentlemen of the Committee, this is going to be
    the amendment that just checks where we all are and what the
    temperature is in the room. This is an amendment in support of
    our military personnel to crack down on unscrupulous payday
    lenders that circle our military bases, who target members of
    our armed services with high interest rate loans. It would deny
    these companies a claim in bankruptcy where they make a loan
    secured by a military paycheck, pension, or disability payment
    if the annual interest rate and fees exceed 36 percent a year,
    a number that I don't think anybody in this room would even
    think twice about signing up for.
        This is happening to our military personnel as we meet
    today. The military service constitutes a significant and real
    hardship for soldiers and their families that are called into
    action. We have had 16,000 active-duty members of the military
    who've had to file for bankruptcy relief over a 12-month
    period. The Pentagon found that 4 years ago nearly a third of
    all military families reported a drop in income, obviously,
    when a spouse was deployed. For members of the National Guard
    and Reserve, the rate was even higher. More than 40 percent
    reported lost income when a provider--a spouse provider was
    deployed to active duty.
        If you need another reason, it is this: The greedy payday
    lenders are directly and aggressively targeting our Nation's
    armed services. The National Consumer Law Center report found
    that scores of consumer-abusing businesses directly target the
    active-duty military men and women daily. These payday lenders
    are the loan sharks of the 21st century that offer small,
    short-term loans at interest rates that are incredible. They
    use deceptive names, like ``Force One Lending,'' ``Armed Forces
    Loans.'' They go after military members because they know they
    have a steady source of income, small as it is, and many of
    these military members are young, have family obligations, and
    are often strapped for cash and are easy to find.
        During a time of war, it's imperative that we go to the
    extra mile to protect the men and women of our armed forces.
    These individuals face not only the challenge of protecting our
    country, but the difficulty of managing their finances when
    they are called to service. When the Soldier and Sailors Relief
    Act can be used to delay tax payments, suspend legal
    proceedings, and reduce interest payments, none of the relief
    is automatic. Moreover, these protections only apply if the
    service member can establish that he or she has not been
    materially affected, quote-unquote, by being called to duty and
    ends as soon as the duty ends. Unlike the bankruptcy laws, the
    Relief Act buys some time, but not forgiveness.
        The last thing we should be doing is putting our military
    personnel into this kind of loan shark debacle, and I am urging
    the Members that if you want to disregard one of the Chairman's
    requests that you vote down all amendments, that this be the
    one amendment that you do support. And I return my time.
        Ms. Waters. Mr. Chairman, on the amendment? Mr. Chairman?
        Mr. Cannon. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from Utah.
        Mr. Cannon. Thank you, Mr. Chairman.
        Let me first express----
        Chairman Sensenbrenner. Recognized for 5 minutes.
        Mr. Cannon. Thank you. Let me first of all express my
    concern for the issue raised by the gentleman from Michigan,
    which is a profoundly important issue. I've been surprised
    around the country at the proliferation of these check-cashing,
    lending institutions which I think are a terrible problem, and
    I would hope that the gentleman would recognize that I and all
    the Members of this full Committee recognize the problem that
    our servicemen have. It is a difficult problem, a complex
    problem. We deal with it here in Congress on many different
    levels. For instance, we've dealt with the pay issue with
    legislation here. In the past we have amended recently the
    servicemen--Servicemembers Civil Relief Act, and that provides
    for a cap on interest rates at 6 percent on debts incurred
    prior to a person's active entry into military service and sets
    forth procedures for requesting a reduction and clarifies how
    that works.
        So we as a Congress, as a body, I don't think there's any
    question but that left and right, Republicans and Democrats,
    are all concerned about military and the burdens that they have
    as they serve our country. And so I want to first of all
    express my agreement with Mr. Conyers and about his expression
    of concern.
        But this is a complex issue, and as we deal with
    bankruptcy, I think we just need to be thoughtful and careful
    about how we deal with it. This amendment was included in Mr.
    Durbin's amendment in the Senate, and that was defeated 38 to
    58, not because people have a problem with military, but
    because of the complexity of the bill that we're dealing with
    today. The Sessions amendment, which was submitted in lieu of
    the Durbin amendment, passed by 63 to 32 on the other side. So
    we have dealt with the issue, I think, to some degree. But in
    this complex environment, I just think it's important that we
    recognize that we need to get a bill passed today. And I
    suspect in the end much of this debate is going to be--and Mr.
    Conyers himself has pointed out that the issue here is, you
    know, are we going to do something with this bill, and the
    answer is America needs a bill, and we need a bill that we can
    get signed by the President, which means I think there ought to
    be a fairly high threshold before we make changes.
        There are protections in the current bill. It has a needs-
    based test which includes numerous safe harbors and exceptions
    for special circumstances. As amended, the special
    circumstances exception specifically mentions a debtor who is
    subject to a call or order to active duty in the armed
    services. As amended, the needs-based test has a special
    exception just for debtors who are disabled veterans if the
    indebtedness occurred primarily during a period when the debtor
    was on active duty or performing a homeland defense activity.
        As amended, the bill specifies that the absolute safe
    harbor from all types of dismissal motions under section 707(b)
    applies to a veteran, and, as amended, the bill excuses a
    debtor if he or she is on active military duty in a military
    combat zone from the mandatory credit counseling and financial
    management training requirements.
        I think we have done a number of things along this line. I
    think the bill is good. We can't make--we can't legislate a
    perfect bill that is going to deal with all the circumstances
    of everybody in America.
        Mr. Conyers. Would the gentleman, my friend, yield for a
    moment?
        Mr. Cannon. I would be pleased to yield to the gentleman.
        Mr. Conyers. First of all, the Durbin bill--the Durbin
    amendment had lots of other things surrounded with it. That's
    why I took it out. I took out the military exemption.
        Number two, tell me what it is you don't like about
    exempting military people unequivocally, not playing around,
    from bankruptcy from these loan sharks?
        Mr. Cannon. Well, reclaiming my time, the gentleman has
    expressed the issue with great clarity. I appreciate that. And
    the answer is that all people who deal with debt have to have
    some responsibility. And a blanket exemption for any group,
    including a group as large as the military, I think is
    problematic. So what we need to do is deal with the
    possibilities for assisting and protecting them from extreme
    activities, but not removing any kind of personal
    responsibility from their lives which, as I understand your
    amendment, it would do.
        Ms. Waters. Mr. Chairman?
        Mr. Cannon. Thank you, Mr. Chairman. I yield back.
        Ms. Waters. On the amendment?
        Chairman Sensenbrenner. Does the gentleman yield back?
        Mr. Cannon. I yield back, Mr. Chairman.
        Chairman Sensenbrenner. The gentlewoman from California.
        Ms. Waters. Thank you very much, Mr. Chairman. I am so
    pleased and so happy about John Conyers' amendment. This is a
    subject that I've spent an awful lot of time on, and it's a
    subject that needs to be addressed by the Congress of the
    United States.
        I am shocked that the gentleman from Utah could even come
    up with any excuses about why we can't protect the military
    from these scavengers who surround our military bases and who
    place----
        Mr. Cannon. Would the gentlelady yield?
        Ms. Waters. No, I will not. Who place up neon signs about
    easy money, green money, come and get it as fast as you can.
    They have some of the most outrageous advertisements where they
    solicit our military. They have set them up as sitting ducks
    all over America at these military bases. They are paying
    between 400 and 1,000 percent interest when you calculate it on
    a yearly basis. For those people who wave the red, white, and
    blue flag and talk about how much they love America, how much
    they care about our military, how much they want to be of
    assistance to our military families, and yet cannot take this
    bill, this bankruptcy legislation, which is--actually should be
    named the ``Credit Card Company Protection Act of 2005,'' and
    do something for our military is just shameful. It is outright
    shameful.
        And I want every Member of this Committee and everybody
    that is looking or listening to pay attention today to what is
    going on. We have a very simple amendment by John Conyers that
    would deal with the fact that military families are ladened
    with debt from these scavengers, many of whom are supporters of
    too many Members of Congress with their big military--with
    their big contributions, and who seem to have some measure of
    protection from the Members of Congress who won't go after
    them. Whether it is this Committee or the Financial Services
    Committee, for those people who will not stand up for our
    military against these scavengers, it needs to be noted
    everywhere, and the press needs to pay an awful lot of
    attention to this, because this is a way by which we could give
    them some kind of help. These are unsuspecting families.
        Do you know that we are recruiting young people who are 19
    and 20 and 21 years old who have never managed any money, who
    have never had any debt, who have never had any credit? And the
    first thing that happens to them, they go into the military,
    some at 21 years old, with a wife and maybe two children, find
    out that the military pay does not carry them to the end of the
    month, and there the scavengers are waiting for them with bait.
    And they lend them money, and they have to sign a personal
    check. And if they don't come back within 2 weeks and pay that
    $200 or $300, then they threaten them with the personal check
    that they're going to put them in jail if they don't pay the
    money.
        And then they flip the loan if they can't pay it, and they
    pile on more interest to it, and that's where you get this 400
    to 1,000 percent interest that piles up for these military
    people.
        Unfortunately, my friend on the opposite side of the aisle
    from Utah has no excuse, and that which he pointed to, to try
    and make you believe that there is some protection for the
    military is not protection. There's nothing in this bill,
    unless we adopt John Conyers' amendment, that would protect
    these poor military families from these scavengers and these
    people who are gouging them for the meager pay that they get to
    take care of their families. And to tell you the truth,
    whenever someone who votes against this amendment stands up and
    talks about how much they love the military, I'm going to call
    them out on it, and I'm going to call them out on the fact that
    they had an opportunity here today to do just a little
    something for these military families.
        These payday loan scavengers are the worst.
        Mr. Cannon. Would the gentle----
        Ms. Waters. No, I will not yield----
        Mr. Conyers. Would the gentlelady yield?
        Ms. Waters. No, I will not yield. I will yield to the
    gentleman from Michigan.
        Mr. Conyers. I just want to make it clear what you said
    about what's in the bill helping military people get a break in
    bankruptcy. It applies only to the disabled military, only, and
    nobody else. So there is no protection in----
        Ms. Waters. On my own time, yes, Mr. Leader, I know. That's
    why I wanted to make it clear, because the gentleman from Utah
    tried to confuse the public and make them think that somehow it
    was already covered.
        Now, anybody who says it's too complicated, the bill, to
    cover them----
        Chairman Sensenbrenner. The time of----
        Ms. Waters.--does not make good sense.
        Chairman Sensenbrenner.--the gentlewoman has expired.
        Ms. Waters. And so I would ask everybody to please vote----
        Chairman Sensenbrenner. Who seeks recognition?
        Ms. Waters.--for this amendment?
        Chairman Sensenbrenner. The gentleman from California, Mr.
    Issa.
        Mr. Issa. Thank you, Mr. Chairman.
        Chairman Sensenbrenner. The gentleman is recognized for 5
    minutes.
        Mr. Issa. And I do rise--I won't stand, but I do rise in
    opposition to this amendment. And if the gentlelady will take
    note, I am a veteran. My brother is a disabled veteran. And I
    have 40,000 Marines, more than half of whom are serving in Iraq
    right now. And looking at this piece--this amendment, I have
    serious reservations on its merit. And I would like to speak to
    that. This fairly narrow piece of legislation looks good until
    you see that it is not talking about interest. It is talking
    about interest and fees. With all due respect to the
    gentlelady's example, if you were to borrow $200 for 2 weeks
    and they were simply to charge you $2 as a fee as part of
    writing up the paperwork, which is not an insignificant thing,
    that's 26 percent all by itself.
        The fact is that when you look at 36 percent--I have a
    problem with usury-type interest, but when you write a piece of
    legislation and you include fees on an extremely short-term
    loan--because if this were a 1-week loan on $200, and they
    said, well, you know, I'll give you $198 today for your $200
    promissory note, well, that's 52 percent. And that's the
    practical reality that on small loans for short periods of
    time, a very small fee, a reasonable fee, particularly
    considering the potential risk, can, in fact, end up being in
    excess of what seems to be an extraordinarily high number.
        I would love to deal with this piece of legislation--or
    this amendment in another piece of legislation, and I'd love to
    deal with it in a way in which it would clearly still allow the
    small loans, if appropriate, to go to somebody without
    including the fee language which makes it essentially----
        Mr. Conyers. Would my friend----
        Mr. Issa.--impossible to make small loans----
        Mr. Conyers.--from California yield for one question.
        Mr. Issa. I certainly would yield to----
        Mr. Conyers. And I thank you. Now, look, let's be frank
    here. Let's take the fee out of the amendment that I offered.
    Would you support it then?
        Mr. Issa. I look forward to----
        Mr. Conyers. Would you support it then?
        Mr. Issa. Reclaiming my time, I look forward to this type
    of reform being something that we work on in a comprehensive
    way. I would be more than happy to work with the gentleman to
    author a separate piece of legislation--I suspect the Chairman
    would help support it--that would look at these issues very
    specifically, as I said, without the fee or with some sort of a
    reasonable thing on the fee, and I think that would be
    wonderful.
        Mr. Cannon. Would the gentleman yield?
        Mr. Issa. I would be glad to yield to the gentleman.
        Mr. Cannon. Thank you. I suspect that the place to deal
    with this would be the Servicemembers Civil Relief Act, and I
    think it's highly appropriate to deal with it in that regard.
        If I might take another moment of the gentleman's time?
        Mr. Issa. Please.
        Mr. Cannon. I appreciate the fact that Ms. Waters referred
    to me as ``a friend'' because I think that she is. We've gained
    a significant amount of respect for each other, and I
    appreciate that. I think that the debate cast in harsh terms
    like ``shame'' is unfortunate because this is not a matter of
    shame. This is a matter of policy, and there may be a
    difference of opinion about how policy affects the world. But I
    think, Mr. Issa, what you're suggesting is that there needs to
    be ways for people to get credit who need credit. And the last
    thing we want to do on either side of the aisle is shove people
    out of the market either because the costs are too high or
    because the risks are so great that no one will take the cost.
    And so it's, I believe, a much more complicated issue, as
    you've able expressed, Mr. Issa, than it is portrayed to be at
    this point.
        Let me just point out that 19-year-olds who enter the
    military, and older people, may be young, may be inexperienced,
    but they're not dumb. And they have the ability to make
    decisions. And if we try and insulate them from the effects of
    the decisions, they will make bad decisions for their whole
    lives. I've trained my kids in their credit card usage--very
    painfully, I might point out, mostly for them. But if they
    don't have some pain in their lives over these issues, they
    don't learn.
        And I have enormous respect for the military, enormous
    respect for the young people who join the military. They come
    from all kinds of backgrounds and from all kinds of decision
    perspectives. And because of that, I think that we owe it to
    them to not include this----
        Ms. Jackson Lee. Mr. Chairman?
        Mr. Cannon.--amendment. I would request that the Committee
    vote against the amendment.
        Chairman Sensenbrenner. The time belongs to the gentleman
    from California.
        Mr. Issa. Reclaiming my time, and in conclusion, Mr.
    Chairman, I look forward to working with the gentleman from
    Michigan on these types of issues in the days to come, and will
    be voting against the amendment, urge my colleagues to vote
    against the amendment because this is not the right place,
    right time. But I would like us all to agree to work on this in
    the future, and I yield back.
        Chairman Sensenbrenner. The gentleman from New York, Mr.
    Nadler.
        Mr. Nadler. Thank you, Mr. Chairman.
        Mr. Chairman, I very much urge support for the gentleman's
    amendment. It illustrates just one of the imbalances in this
    bill, which is simply a collection of 60 or 70 different ways
    to stick one's hands into the pockets of low- and middle-income
    people in a time of distress and take the money out and give it
    to the big banks and credit card companies.
        One of the things this bill does in many different ways it
    to make a discharge in bankruptcy more elusive. Making
    discharge in bankruptcy more elusive will make it harder for
    consumers to get a fresh start and continue to make consumer
    purchases, which is one of the mainsprings of our economy.
    Household debt has reached record levels. With that come more
    bankruptcies, but no serious economist would argue that a
    precipitous drop in consumer spending would help our economy.
        Bankruptcy is a tradeoff. The safety net encourages risk
    taking in business, allows distressed families to remain in the
    economy, and maintains demand for products businesses must sell
    to survive. Bankruptcy doesn't cause default any more than a
    hospital causes people to be sick.
        We have been told as a justification for this bill that
    bankruptcy is a free ride. The facts are the contrary. A debtor
    in Chapter 7 must give up all non-exempt assets in order to
    obtain a discharge. Secured debts must be paid, or the property
    is subject to foreclosure. The bankruptcy remains on the
    debtor's record for 10 years, and the debtor may not refile for
    6 years. It is harder to get a job, an apartment, or a loan. As
    a majority witness who had been a debtor told the Committee a
    few years ago, had she known the consequences of filing, she
    might not have done so.
        No one believes that people should avoid paying their debts
    if they can afford to do so. The question is, rather, does this
    bill make sense? Members should ask themselves why the
    overwhelming majority of bankruptcy professionals, scholars,
    trustees, creditor lawyers, corporation lawyers, and judges are
    appalled with this bill. There is a terrible disconnect between
    Congress and the people who actually have to make the system
    function. Regardless of their role or interest, they almost
    universally oppose this bill. Yet here in Congress, the demands
    of the special interests who have a stake in some provision in
    this bill are generally viewed as a great idea that requires no
    further consideration.
        Over the years, we have heard from, among other people, Ken
    Klee, one of the leading bankruptcy scholars and business
    bankruptcy lawyers in the country, former Republican bankruptcy
    counsel to this Committee. He has drafted Supreme Court briefs
    signed by Members of this House, and he strongly opposed the
    bill.
        We have heard from consumer rights organizations, women's
    groups, child advocacy groups, unions, civil rights groups, and
    every national bankruptcy organization in the country that this
    bill will hurt consumers, businesses, families, children,
    employees, minorities, and the economy. It will raise costs to
    the system and disrupt the efficient management of bankruptcy
    proceedings. This bill would turn the Government into a debt
    collector for private industry.
        Let me remind you what George Wallace, a representative of
    the Creditors Coalition, told this Committee a few years ago. I
    asked him if he was familiar with the many ways under current
    law that a creditor could pursue his rights in bankruptcy,
    including obtaining documents, examining the debtor under oath,
    and objecting to a discharge of debts. He said, and I quote,
    ``I have done these things, and they take a fair amount of
    time, and I bill my clients for them. They're expensive.''
        I asked him, ``Why should the Government spend money to do
    the job that creditors should be doing?'' He responded,
    ``Because it is a Government program. It is not the job of the
    creditor.''
        That's what this bill is--a Government program for big
    banks who don't want to spend their own money to collect their
    own debts, the debts that they freely entered into. Talk about
    welfare cheats.
        Mr. Chairman, we know, unfortunately, this bill is going to
    pass. It's going to pass with a good number of votes. Someone
    asked me the other day why he should vote against this bill
    despite the manifold demerits in the bill, when it was clear it
    was going to pass anyway. And I think that the answer is that
    when this bill really takes hold, 2, 3, 4 years down the road,
    when middle-income people, low-income people, our constituents,
    start finding out it's impossible to get a fresh start, they
    cannot get out from under their credit card debts, they're
    paying higher and higher interest rates, more and more money,
    it costs more money to file, there are more and more coercive
    instruments on the part of the creditor's lawyers to force
    debtors to reaffirm debts and to surrender their rights, and
    the bankruptcy system becomes less and less usable for people,
    they're going to ask, ``Who the heck did this?'' And I hope
    that Members of Congress--that too many Members of Congress
    won't have to be ashamed in front of their constituents, as I
    am sure they will.
        So I urge adoption of this amendment and defeat of this
    bill because this is a day of shame, and when we pass it on the
    floor, it will be a day of worse shame that will probably go
    down in history as one of the worst days in the history of the
    Congress in this century.
        Thank you, Mr. Chairman. I yield back.
        Chairman Sensenbrenner. The question----
        Ms. Jackson Lee. Mr. Chairman? Mr. Chairman?
        Chairman Sensenbrenner. The gentlewoman from Texas, Ms.
    Jackson Lee.
        Ms. Jackson Lee. Thank you very much, Mr. Chairman, and
    thank you for the opportunity to participate in the legislative
    process. And I do not say this with reflection on the
    responsibility that we have inasmuch as the Senate has moved
    forward on this legislation. But I will say the speed at which
    we're now addressing this particular legislation, the speed in
    which it will find its way to the floor of the House, and the
    sense that I am getting from my colleagues on the other side of
    the aisle--and might I welcome two new Democrats who I see are
    sitting on this side. It gives us a good number. Thank you. Mr.
    Inglis, I am delighted, my Chairman. We welcome you and look
    forward to you supporting our amendments. But it gives me great
    hope and inspiration.
        But as I look at the speed in which we move to the floor of
    the House--I understand we might be on the floor as early as
    the beginning of April--might I simply say that the fix is in,
    that this is a prime example of class warfare, because this
    bill is wrapped with special interests. It clearly does not
    evidence thoughtfulness as it relates to the crux of the need
    for helping Americans save and helping Americans understand
    credit and balancing between Americans who consume credit and
    those who market credit. I would use a lesser word, but I think
    I'll keep it at a level of sophistication at this point.
        I support the Conyers amendment, and I am so disappointed
    and saddened, frankly, by my colleagues who I know have spent
    time in Iraq and Afghanistan, and if they have spent time in
    Iraq and Afghanistan, they have spoken not only to young
    soldiers, but they've spoken to reservists, Mr. Chairman. If
    you speak to reservists, you will know that they have been
    taken out of their prime of their life or they have been called
    into battle in the midst of their life where they have wives or
    husbands or family responsibility. In taking them out of their
    cycle of income, they have caused them to lose a major part of
    the breadwinner's contribution to the family, jeopardized them
    and put them in the line for bankruptcy.
        Therefore, many of them have turned to the scavengers who
    have accelerated the rates on payday loans. It is a conspicuous
    and large problem. It saddens me to think that because it was
    associated with Senator Durbin rather than an issue that might
    have come to the attention of my colleagues on the other side
    of the aisle, and now in the wisdom of our Ranking Member, Mr.
    Conyers has put it forward as a single standing amendment, we
    can't get the support.
        Allow me to put into the record the words of David Broder
    of The Washington Post. His headline says, ``A Bankrupt
    `Reform,' ''--``reform'' in quotes. ``A Bankrupt `Reform.' ''
        This reform, which parades as an effort to stop folks from
    spending lavishly and then stiffing creditors by filing for
    bankruptcy protection, is a perfect illustration of how the
    political money system tilts the law against average Americans.
    The simple fact that for 8 straight years it has gained a place
    on a crowded congressional calendar is testimony to the impact
    of the millions of dollars that banks and credit card companies
    have spent on lobbyists and campaign contributions. Two terms
    ago, it was $4 million that was utilized to lobby Members of
    Congress to vote for this legislation. I would imagine it is
    now double that amount.
        We have a long list of individuals who oppose this
    legislation, and the reason why it will pass with no amendments
    is because, as I said, the fix is in. The American middle class
    is the backbone of America, yet this bankrupt legislation is
    going to exercise a means test to stand in the doorway of
    disallowing individuals to come in and to file bankruptcy.
        One of the bloggers said, if this doesn't teach Americans
    not to have medical emergencies or get laid off, I don't know
    what will. Come to my city in 2003 and 2002, and watch the
    4,000 Enron employees that were laid off, losing most of their
    livelihood, putting them in a dastardly downspin, causing them
    to lose their homes, having college students to come out of
    college, and simply driving them to the depths of depression.
    How you can pass this legislation in the light of devastation
    of our communities, middle class and others, is a tragedy. I
    would only hope that this particular amendment would reach the
    levels of common sense and have you think back on the soldiers
    that are now on the front line without the resources to pay
    their bills, taken advantage of by payday loans, and then being
    denied--having these payday loan--loaners come after them in a
    bankruptcy proceeding.
        This is a common-sense amendment. This legislation will
    listen to us today. It will almost sound like blah, blah, blah,
    blah, blah, because, in fact, the legislation will pass out of
    this Committee. Very few amendments will pass out of this
    Committee. And the theme of class warfare will again be
    victorious, as this makes its way to the floor of the House and
    the people of America will suffer----
        Chairman Sensenbrenner. The gentlewoman's time has expired.
        Ms. Jackson Lee. I hope the amendment passes. I yield back.
        Chairman Sensenbrenner. The question is on the Conyers
    amendment. Those in favor will say aye? Opposed, no? In the----
        Mr. Conyers. Mr. Chairman, may I demand a record vote?
        Chairman Sensenbrenner. You may. The question is on
    agreeing to the Conyers amendment. Those in favor will, as your
    names are called, answer aye, those opposed, no, and the clerk
    will call the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        [No response.]
        The Clerk. Mr. Smith?
        Mr. Smith of Texas. No.
        The Clerk. Mr. Smith, no. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        [No response.]
        The Clerk. Mr. Chabot?
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no. Mr. Lungren?
        Mr. Lungren. No.
        The Clerk. Mr. Lungren, no. Mr. Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no. Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        [No response.]
        The Clerk. Mr. Inglis?
        Mr. Inglis. No.
        The Clerk. Mr. Inglis, no. Mr. Hostettler?
        Mr. Hostettler. No.
        The Clerk. Mr. Hostettler, no. Mr. Green?
        [No response.]
        The Clerk. Mr. Keller?
        [No response.]
        The Clerk. Mr. Issa?
        Mr. Issa. No.
        The Clerk. Mr. Issa, no. Mr. Flake?
        Mr. Flake. No.
        The Clerk. Mr. Flake, no. Mr. Pence?
        Mr. Pence. No.
        The Clerk. Mr. Pence, no. Mr. Forbes?
        [No response.]
        The Clerk. Mr. King?
        [No response.]
        The Clerk. Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no. Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no. Mr. Gohmert?
        Mr. Gohmert. No.
        The Clerk. Mr. Gohmert, no. Mr. Conyers?
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye. Mr. Berman?
        Mr. Berman. Aye.
        The Clerk. Mr. Berman, aye. Mr. Boucher?
        [No response.]
        The Clerk. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye. Mr. Scott?
        [No response.]
        The Clerk. Mr. Watt?
        Mr. Watt. Aye.
        The Clerk. Mr. Watt, aye. Ms. Lofgren?
        Ms. Lofgren. Aye.
        The Clerk. Ms. Lofgren, aye. Ms. Jackson Lee?
        Ms. Jackson Lee. Aye.
        The Clerk. Ms. Jackson Lee, aye. Ms. Waters?
        Ms. Waters. Aye.
        The Clerk. Ms. Waters, aye. Mr. Meehan?
        Mr. Meehan. Aye.
        The Clerk. Mr. Meehan, aye. Mr. Delahunt?
        Mr. Delahunt. Aye.
        The Clerk. Mr. Delahunt, aye. Mr. Wexler?
        [No response.]
        The Clerk. Mr. Weiner?
        [No response.]
        The Clerk. Mr. Schiff?
        Mr. Schiff. Aye.
        The Clerk. Mr. Schiff, aye. Ms. Sanchez?
        Ms. Sanchez. Aye.
        The Clerk. Ms. Sanchez, aye. Mr. Smith?
        Mr. Smith of Washington. Aye.
        The Clerk. Mr. Smith, aye. Mr. Van Hollen?
        Mr. Van Hollen. Aye.
        The Clerk. Mr. Van Hollen, aye. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their vote? The gentleman from North Carolina, Mr.
    Coble.
        Mr. Coble. No.
        The Clerk. Mr. Coble, no.
        Chairman Sensenbrenner. The gentleman from Alabama, Mr.
    Bachus?
        Mr. Bachus. No.
        The Clerk. Mr. Bachus, no.
        Chairman Sensenbrenner. The gentleman from Florida, Mr.
    Keller?
        Mr. Keller. No.
        The Clerk. Mr. Keller, no.
        Chairman Sensenbrenner. The gentleman from Iowa, Mr. King.
        Mr. King. No.
        The Clerk. Mr. King, no.
        Chairman Sensenbrenner. The gentleman from Virginia, Mr.
    Forbes?
        Mr. Forbes. No.
        The Clerk. Mr. Forbes, no.
        Chairman Sensenbrenner. The gentleman from Virginia, Mr.
    Scott?
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their votes? If not, the clerk will report.
        [Pause.].
        Chairman Sensenbrenner. The gentleman from New York, Mr.
    Weiner?
        The Clerk. Mr. Chairman, Mr. Weiner is not recorded.
        Mr. Weiner. I vote aye.
        The Clerk. Mr. Weiner, aye.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their vote?
        [No response.]
        Chairman Sensenbrenner. The clerk will try again to report.
        The Clerk. Mr. Chairman, there are 15 ayes and 20 noes.
        Chairman Sensenbrenner. And the amendment is not agreed to.
        Are there further amendments?
        Mr. Watt. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from North Carolina,
    Mr. Watt?
        Mr. Watt. Mr. Chairman, I wonder if I might be recognized
    to strike the last word.
        Chairman Sensenbrenner. The gentleman is recognized for 5
    minutes.
        Mr. Watt. I have some amendments, but there are a couple of
    things, points that I want to make that I really can't make in
    the context of an amendment, and I don't want to violate the
    rules.
        As the Ranking Member of the Subcommittee that this bill
    original--or some bankruptcy bill originally originated in,
    this one didn't make it to our Subcommittee because of the
    expedited consideration.
        I just want to express generally the major concern that I
    have with this legislation, and I can't do it in the context of
    an amendment because it would go so basically to the structure
    of the bill that it would just--basically dismantle the whole
    bill.
        The most troubling thing about this bill from my
    perspective--and I've said it before, and I hope people are
    listening to it--is that at the outset we acknowledge that
    there were major abuses and problems in the bankruptcy system
    and that those abuses needed to be addressed across the board.
        Because the industry knew that it was going to be
    impossible to get a bill passed without cutting a deal with the
    consumer groups on behalf of the poorest people, basically what
    happened was a deal was cut to encourage the consumer groups to
    go away and be quiet, and that deal was that we would impose
    something called a means test, which basically exempts people
    below the means test from virtually every provision in this
    bill.
        The result of that is very troubling in this sense: First
    of all, it goes absolutely contrary to everything I have heard
    my Republican colleagues say they stand for related to
    individual responsibility because basically what it says is if
    you fall below the means test, you are going to be exempted
    from worrying about the abuses that you engage in and so,
    therefore, we're just going to look the other way. And so
    abuses that are taking place in the system now for people who
    fall below the means test can continue unabated.
        At the same time, people above the means test get a bunch
    of rules applied to them regardless of whether they are abusing
    the bankruptcy system or not. So the whole purpose that we set
    out to achieve to do bankruptcy reform was missed because of
    this means test thing.
        But a more troubling thing is a public policy concern that
    I think is just--is devastating because the effect of this
    means test is that you're going to end up with two bankruptcy
    courts, in effect. You're going to end up with a pauper's
    bankruptcy court and a higher-income bankruptcy court, and it's
    going to give judges and courts the authority to treat people
    so differently even though their problems in bankruptcy
    theoretically should be viewed as the same.
        It is so contrary to our whole system of principles that it
    is just troubling as a matter of public policy.
        Mr. Cannon. Would the gentleman yield?
        Mr. Watt. No, let me just----
        Mr. Cannon. Because I agree with you.
        Mr. Watt. And I just--I couldn't----
        Chairman Sensenbrenner. The time of the gentleman----
        Mr. Watt. I ask unanimous consent for 30 seconds to take
    back the time that----
        Chairman Sensenbrenner. Without objection.
        Mr. Watt. I couldn't--I couldn't structure an amendment to
    deal with this, but I think the public needs to know how
    terrible a public policy we are creating in this bill. It has
    nothing to do with the content of the bill that you can amend
    and correct. But the structure of this bill is so contrary to
    everything that our legal system stands for and everything that
    our bankruptcy system has historically stood for that it is
    absolutely incredible.
        Chairman Sensenbrenner. The time of----
        Mr. Cannon. Mr. Chairman, I ask unanimous consent that the
    gentleman be granted another 30 seconds.
        Mr. Watt. And I'll yield it to my gentleman friend----
        Chairman Sensenbrenner. Reluctantly, without objection.
        Mr. Watt. I yield it to my----
        Mr. Cannon. I appreciate the yielding and also the
    Chairman's willingness to go on. Let me just say that what Mr.
    Watt has said is profound, and it's true, and it's very
    important. We disagree only on the point of creating two
    courts. I think as a practical matter that may happen. I hope
    that our bankruptcy judges are not--don't fall into that trap.
    But the issue truly for me is twofold here: personal
    responsibility--and a means test does exactly what Mr. Watt has
    suggested, and I think that's a problem, but it's a problem we
    have to deal with in a practical way.
        And so in the first place, a means test--or the individual
    responsibility is important. Secondly, availability of credit
    is important. That's fundamentally important in this process--
    --
        Chairman Sensenbrenner. The time of the gentleman has once
    again expired.
        Mr. Watt. I ask unanimous consent for 30 additional seconds
    and yield it to the gentleman from Utah.
        Chairman Sensenbrenner. Without objection.
        Mr. Cannon. And I will only finish by saying that the
    availability of credit to all people--you know, people start
    out poor in life. I started out very poor. Many people do. But
    the availability of credit is a way for people to get out of
    that trap, and in part, this bill is about reducing that cost.
        Thank you, Mr. Chairman. Thank you, Mr. Watt.
        Chairman Sensenbrenner. The time of all of the gentlemen
    have really expired.
        By my calculation, we have approximately an hour's worth of
    votes and a debate on a motion to recommit on the supplemental
    appropriation bill. And, thus, I think it is time to recess the
    Committee until either 12:30 or 30 minutes after the end of the
    last vote, whichever comes later.
        The Committee stands recessed.
        Mr. Watt. Did you say whichever comes later, Mr. Chairman?
        Chairman Sensenbrenner. Yes, sir.
        [Recess.]
        AFTERNOON SESSION
        [12:47 p.m.]
        Chairman Sensenbrenner. The Committee will be in order. A
    working quorum is present.
        When the Committee recessed for the lunch hour and the
    votes, pending was a motion to report the bill Senate 256
    favorably to the House. Are there further amendments? The
    gentleman from North Carolina.
        Mr. Watt. Thank you, Mr. Chairman. I have an amendment at
    the desk.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        Mr. Watt. Amendment 01a.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        Mr. Watt. 01a.
        Chairman Sensenbrenner. That's ``A'' as in apple?
        Mr. Watt. Yes.
        The Clerk. Amendment to S. 256, offered by Mr. Watt and Mr.
    Delahunt----
        Mr. Watt. Mr. Chairman, I ask unanimous consent----
        Chairman Sensenbrenner. Without objection, the amendment is
    considered as read.
        [The amendment follows:]

        Chairman Sensenbrenner. The gentleman from North Carolina
    is recognized for 5 minutes.
        Mr. Watt. Thank you, Mr. Chairman. And this actually
    follows very closely on with the Conyers amendment that was
    considered before we broke for the votes.
        I have the honor of serving both on this Judiciary
    Committee and on the Financial Services Committee, and
    Representative Miller from North Carolina and myself, also from
    North Carolina, have been trying to structure, in consultation
    with Republicans and Democrats, a bipartisan predatory lending
    bill in the Financial Services Committee so that we could
    create a national predatory lending standard. Some States have
    different standards, and we're trying to craft something that
    will be either a national floor or a national standard.
    Depending on who you talk to, there's some disagreement about
    whether it ought to be preemptive or not.
        But be that as it may, the gist of this amendment would be
    to exempt the predatory loans that have interest rates in
    excess of 50 percent. The gentleman from California had some
    concerns about fees. This interest is solely about interest
    rates. It doesn't involve fees.
        It's surprising to know that there are extensions of credit
    which are made where the interest rate is above 50 percent per
    year. And this bill does nothing to address that, obviously. If
    we had had hearings, we probably would have determined--gotten
    into the record that during the 8 years since this legislation
    was first introduced, the number of credit card solicitations
    in this country has doubled to 5 billion a year. Between 1993
    and 2000 consumers increased their credit from $77 billion to
    $3 trillion. During that 8-year period bankruptcy petitions
    increased by 17 percent. But credit card company profits
    increased by 163 percent. And while I don't indict the entire
    credit card industry, we can't ignore the evidence of
    exorbitant interest rates imposed on modest extensions of
    credit. Ordinary citizens desperate for help are being taken
    advantage of by companies charging from 300 to over 1,000
    percent interest on some loans.
        And so I think this is a problem that needs to be
    addressed, and we need to not make people have to pay or
    acknowledge in bankruptcy these predatory loans that there is a
    growing agreement within the industry and outside the industry
    are just getting out of control and out of hand.
        Now, I heard very clearly that the Chairman is not desirous
    of having any amendments to this bill, so I am patently aware
    that all of this is perhaps a charade. But if there's ever
    anything we're going to do to the bill, I certainly hope that
    we will send this message that interest rates of over 50
    percent per year just are unacceptable, and I would ask your
    support for this amendment in that regard.
        I yield back the balance of my time.
        Chairman Sensenbrenner. The gentleman from Utah.
        Mr. Cannon. Thank you, Mr. Chairman.
        Chairman Sensenbrenner. Recognized for 5 minutes.
        Mr. Cannon. Thank you. May I just direct a question to the
    Chair and the Ranking Member? In the prior amendment, I think
    we heard virtually all of the general arguments. I understand
    there are some technical arguments that may relate to some of
    the future amendments. But we've heard most of the arguments
    that were made last cycle.
        Has the Chair and the Ranking Member, have you come to any
    kind of a conclusion about how many amendments we might expect
    today?
        Chairman Sensenbrenner. Well, if the gentleman will yield,
    from the Chair's standpoint I know of no amendments on the
    Republican side of the aisle.
        Mr. Cannon. We're amazed at the discipline that you have
    created on this side. Do we have any----
        Mr. Watt. If the gentleman would yield, I will tell him how
    many I have.
        Mr. Cannon. Please.
        Mr. Watt. That's all I can speak for. I think I have six.
    And actually, a lot of them relate to things that have occurred
    in the interim since we started considering this bill 8 years
    ago. I mean, you all's argument has been that there's no need
    to make any--to have any hearings, but there are substantial
    changed conditions that have taken place over the--over the
    period of time that we've been debating this bill. And this
    bill has been kind of marching in place, same construct, same
    problems, same concerns, but times have changed. And some of
    those times involve industry practices such as increased
    predatory lending that hopefully all of us agree are just
    unacceptable. And if we had gone to a hearing and a markup in
    our Subcommittee, or--well, I understand you all started this
    bill on the other side so that you wouldn't make any amendments
    over here. But if somebody had had some hearings on it, maybe
    some of these things could have been done.
        Mr. Cannon. Well, reclaiming my time, if I might, Mr. Watt,
    just ask a question. When you talk about preemption, that
    refers to the--if there's a State interest limit law that is
    higher than 50 percent, then you would preempt that with this
    bill? I doubt that there are any State laws with a 50 percent
    rate, but when you mention preemption, that is, preempting
    State law, that is what you're referring to, I take it?
        Mr. Watt. No, that's--I was actually giving you all
    background about other things that are going on. This deals
    with outstanding loans that have interest rates of 50 percent
    or above.
        Mr. Cannon. Okay.
        Mr. Watt. It's not about preemption or non-preemption.
    We're going to deal with that issue when we do the general
    predatory lending bill in the Financial Services Committee.
    This is about bankruptcy and----
        Mr. Cannon. But it would----
        Mr. Watt.--whether you discharge loans that have interest
    rates above 50 percent or don't do that.
        Mr. Cannon. Let me just urge my colleagues to vote against
    the amendment. In the first place, on the Senate this was
    debated and a similar amendment with a 30-percent usury cap was
    voted down 24 to 74. I guess----
        Mr. Watt. That's why we raised it.
        Mr. Cannon. Pardon me. I guess part of the problem is what
    Mr. Issa talked about earlier, which is how do you calculate
    the interest rate when you've got costs involved and if you----
        Mr. Watt. Would the gentleman yield?
        Mr. Cannon. In just a moment. I think Mr. Issa pointed out
    that if you take a $2 fee on a $200 loan for a week because
    it's a paycheck loan, that is a 100%--or, no, it's a very high
    interest rate. And so--it's 52. I've got to do the numbers
    here. I'm not as quick as you, Darrell.
        So I am concerned about that. I don't think the amendment
    does what the gentleman would like it to do, which is, I think
    we have a general agreement that personal responsibility is
    significant, and people need to be responsible for what kind of
    loans they are. In our market what we--what I'm trying to do
    here is create a market for loans where people get much, much
    lower-cost capital because they are responsible for themselves.
    And I have a few seconds left. I'd be happy to yield.
        Mr. Watt. I thank the gentleman for yielding. I would just
    point out to him that this says nothing about fees. This is all
    about interest rates. And if the credit card companies and the
    lenders don't know how to calculate interest, we're in real,
    real trouble. We know what interest is. And if the construct of
    the bill really dealt with personal responsibility for
    everybody, I mean, we had that discussion before we----
        Mr. Cannon. Could I reclaim my time just briefly on this
    point? Because what will happen then is that short-term lenders
    will raise their costs, their fees, and so you'll have a lower
    interest rate. I mean, how do we deal with that for the record
    here today? Since what will happen is you'll get a higher fee--
    --
        Chairman Sensenbrenner. The gentleman----
        Mr. Watt. Would the gentleman yield? I ask unanimous
    consent for 30 additional seconds.
        Chairman Sensenbrenner. Without objection.
        Mr. Watt. So I can answer to the--answer the question that
    was asked. Does the gentleman yield?
        Mr. Cannon. Certainly.
        Mr. Watt. I would just say to you that we are dealing with
    an existing problem, not what happens in the future. These are
    outstanding loans, not prospective loans, right?
        Mr. Cannon. But people will make loans this week and next
    week and the week after that, and as soon as we pass this law,
    I think----
        Mr. Watt. I mean, you----
        Mr. Cannon. I would urge the Members of the Committee to
    reject this amendment. Thank you. I yield back.
        Chairman Sensenbrenner. The gentleman----
        Mr. Delahunt. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman's time has expired.
        The gentleman from Massachusetts, Mr. Delahunt.
        Mr. Delahunt. I mean, as I sit here listening to the
    debate, I think Mr. Watt has been very clear that this does not
    involve fees. It doesn't involve penalties. It simply involves
    interest. I mean, we're talking about 50 percent interest. And
    we should remind ourselves that, you know, 3-month Treasury
    bills are now about 2.75 percent, a 30-year mortgage is 5.6
    percent. How can we really in good conscience reject this? I
    mean, 50 percent interest, I mean, that's--that's Mafia
    figures. I mean, this should be the--let's crack down on the
    Mafia amendment offered by the gentleman from North Carolina. I
    mean, this isn't interest. Maybe you're right. This isn't
    interest. This is the vig.
        Mr. Cannon. Would the gentleman yield just for a question?
        Mr. Delahunt. Of course.
        Mr. Cannon. I don't have to go cash my check--in fact, I
    think ours is--mine is done electronically. But many, many
    people in America are doing that. Are you familiar with that
    system and what's going on there? I mean, I don't understand
    how this quite general language helps poor people who are in a
    State where they need to get a check cashed or have some other
    very short-term, high-cost credit?
        Mr. Delahunt. Reclaiming my time, because the gentleman has
    been very clear, I think, in indicating that those costs, as
    you just described them now, are not part of the calculation
    that goes into interest. Now, we talked a lot about personal
    responsibility, and I concur. But I think why we have a
    division in terms of whether this bill is good sound policy is
    that there has been no discussion about corporate
    responsibility.
        Mr. Watt. Would the gentleman yield for a second?
        Mr. Delahunt. I yield.
        Mr. Watt. I just want to make clear, you make it sound like
    I'm trying to do something to help poor people. If somebody
    poor is abusing the bankruptcy system--I made this point before
    we left for lunch--I think that's a real problem with this
    bill. There's really no way to deal with that because you've
    exempted them under the means test.
        This is about personal responsibility or corporate
    responsibility of lenders that are charging 50 percent per
    year, and so it's not about personal responsibility of
    individuals. I don't think it is reasonable for lenders to be
    charging 50 percent a year. And so to turn the question to one
    as if it's about personal responsibility of individuals is to
    just acknowledge that personal responsibility or corporate
    responsibility of lenders is somehow sacrosanct and off limits;
    whereas, personal responsibility of individuals is the highest
    priority.
        I just don't understand that. That doesn't fit in my value
    system. Now, if it fits in yours, then I think you ought to
    vote against this amendment.
        Mr. Delahunt. Reclaiming my time, I think what we're saying
    to those lenders that have no scruples, have no parameters,
    just go to it, by rejecting this amendment. And again, we're
    talking about 50-percent interest. We're saying the door is
    open, do whatever you want. And it sends a message to the
    American people that large credit companies do not have to be
    concerned because Congress is with them and supports them, and
    yet somebody who has an income of $25,000 a year and is trying
    to pay off a credit card bill of $10,000, given the kind of
    interest rates that we all know are assessed, as well as the
    fees and the penalties, they can't do it.
        Chairman Sensenbrenner. Does the gentleman yield back?
        Mr. Delahunt. I yield back.
        Ms. Jackson Lee. Mr. Chairman?
        Chairman Sensenbrenner. The gentlewoman from Texas.
        Ms. Jackson Lee. Mr. Chairman, let me rise to support the
    gentleman from North Carolina's and Mr. Delahunt's amendment on
    predatory lending and utilize the terminology that I used
    earlier today, which is the unfortunateness of this legislation
    being a poster child for class warfare.
        The middle class happened to be known as the backbone of
    America. These predatory lending incidences or opportunities
    really do confront the working and middle class, particularly
    in African American communities and other communities that
    happen to be minority or urban-centered. And it would seem, if
    this is going to be a bill that talks about responsibility,
    that we should take responsibility for the abusive, usurious
    rates that plague communities who are attempting to secure,
    whether it be loans to pay off other bills or whether it be to
    take advantage of a credit system that allows them to buy
    furniture or to secure a property, we should be responsible for
    allowing the recklessness of this system to burden individuals
    who are simply trying to participate in the American dream. And
    then they wind up waking up one morning with a family of four
    or six or seven or eight, and the property that they bought or
    the washing machine that they thought they would get, making
    payments on a weekly basis or a monthly basis because of the
    way they have to do it, maybe their income, maybe they are the
    working poor, maybe they are lower middle class, and then to
    come up against this usurious rate, some catastrophic incident
    has occurred, a medical need, a divorce, and they wind up with
    this debt. And the bulk of the debt is interest.
        If we are trying to put forward legislation that is
    thoughtful and really does answer the concerns of those who are
    coming to the debtors court, if we want to take away all of the
    jurisdiction of the judges which might look at this burdensome
    process, then this is an appropriate amendment.
        So I'd ask my colleagues in the course of their
    deliberation--and, again, the fix is in, but we're going to
    process ourselves through the process. I think the
    gentlemen's--plural--Mr. Watt and Mr. Delahunt's amendment is
    completely appropriate because it does provide some balance to
    this legislation for those who would be severely burdened by
    usurious rates not of their causing, because they attempted
    simply to participate in this credit system and to pay off
    debts by getting another loan or to buy furniture or to buy
    property.
        With that, I yield back my time.
        Mr. Cannon. Would the gentlelady yield? Would the
    gentlelady yield?
        Ms. Jackson Lee. I'd be happy to yield for an inquiry.
        Mr. Cannon. I'd actually just like to make a couple
    comments. You have a little bit of time left, and that would
    save an extra 5 minutes, I think, of time, if----
        Ms. Jackson Lee. I'm yielding to the gentleman.
        Mr. Cannon. Thank you. I appreciate that.
        You know, we have a really interesting discussion here, and
    I expressed my appreciation earlier for what Mr. Watt said,
    which I thought was very, very thoughtful. To add to that,
    people are poor for many reasons. The biggest reason for being
    poor is because people are young, because they're getting their
    education, they're getting started, they're maybe having a
    family early. Many, many people started out life poor. There
    are other reasons--people who have mental incapacity or who
    have lack of education. A lot of things affect poverty.
        In the environment of personal responsibility, what I want
    to see and what I think this bill does to a very large degree
    is create a market that is unfettered, and in that market
    people have choices, and they have a choice to prepare
    themselves for good credit and lower-cost credit over time. You
    expect as a young person to pay more for your credit than you
    do when you're older and you have more opportunities because
    you've been careful with your credit.
        It seems to me that that's the core of the kind of debate
    that we ought to be dealing with here.
        Ms. Jackson Lee. Would the gentleman--I'd like to reclaim
    my time.
        Mr. Cannon. Could I make just one other comment?
        Ms. Jackson Lee. If you'd make it quickly. I want to
    reclaim my time.
        Mr. Cannon. You're almost out. Thank you. I----
        Ms. Jackson Lee. I have to respond to the gentleman on that
    point. I didn't not hear Mr. Watt's earlier point. But let me
    just say this: Your focus on responsibility is somewhat
    distorted. People are vulnerable in coming to the bankruptcy
    courts because they've been taken advantage by the bombardment
    of credit cards, with no criteria, usurious rates, and a system
    of capitalism that encourages people to purchase. I don't know
    how you can--I believe in personal responsibility as well. But
    when you issue out credit cards like candy, when you don't
    allow people to pay for a rent-a-car with cash, and every
    system of government or every process of purchase people are
    asking for a credit card, then you are building us on a house
    of cards of credit. And, therefore, I think it is wrong to
    suggest that people are irresponsible or should be responsible
    when they are being victimized by this onslaught of credit card
    poisoning.
        And so I would simply say this bill is unbalanced, Mr.
    Chairman, and it needs to be balanced toward those who are
    victimized by those who use them as simply puppets to their
    system.
        Thank you for the credit cards that do good things, but let
    them realize that this bill does not regulate them. It just
    allows them to burden and to up the usurious rates and----
        Chairman Sensenbrenner. The time of the gentlewoman has
    expired.
        Ms. Jackson Lee. I thank the Chairman for his indulgence. I
    yield back.
        Chairman Sensenbrenner. The question is on the amendment
    offered by the gentleman from North Carolina, Mr. Watt. Those
    in favor will say aye? Opposed, no? The noes appear to have it.
        Mr. Watt. Mr. Chairman, I ask for a recorded vote.
        Chairman Sensenbrenner. A recorded vote will be ordered.
    Those in favor of the Watt amendment will, as your names are
    called, answer aye, those opposed, no, and the clerk will call
    the roll.
        Mr. Watt. Mr. Chairman, do we have a quorum, a voting
    quorum on an amendment?
        Chairman Sensenbrenner. We have a working quorum, which is
    14.
        Mr. Watt. Is that enough to vote on an amendment? I don't
    know. I'm not----
        Chairman Sensenbrenner. Yes. A working quorum is necessary
    to debate and vote on amendments. A reporting quorum, which is
    21, is necessary to report the bill.
        The clerk will call the roll. The question is on the Watt
    amendment.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        Mr. Coble. No.
        The Clerk. Mr. Coble, no. Mr. Smith?
        Mr. Smith of Texas. No.
        The Clerk. Mr. Smith, no. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        [No response.]
        The Clerk. Mr. Chabot?
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no. Mr. Lungren?
        Mr. Lungren. No.
        The Clerk. Mr. Lungren, no. Mr. Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no. Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        [No response.]
        The Clerk. Mr. Inglis?
        [No response.]
        The Clerk. Mr. Hostettler?
        Mr. Hostettler. No.
        The Clerk. Mr. Hostettler, no. Mr. Green?
        [No response.]
        The Clerk. Mr. Keller?
        [No response.]
        The Clerk. Mr. Issa?
        Mr. Issa. No.
        The Clerk. Mr. Issa, no. Mr. Flake?
        [No response.]
        The Clerk. Mr. Pence?
        [No response.]
        The Clerk. Mr. Forbes?
        [No response.]
        The Clerk. Mr. King?
        Mr. King. No.
        The Clerk. Mr. King, no. Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no. Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no. Mr. Gohmert?
        Mr. Gohmert. No.
        The Clerk. Mr. Gohmert, no. Mr. Conyers?
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye. Mr. Berman?
        [No response.]
        The Clerk. Mr. Boucher?
        [No response.]
        The Clerk. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye. Mr. Scott?
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye. Mr. Watt?
        Mr. Watt. Aye.
        The Clerk. Mr. Watt, aye. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        Ms. Jackson Lee. Aye.
        The Clerk. Ms. Jackson Lee, aye. Ms. Waters?
        [No response.]
        The Clerk. Mr. Meehan?
        Mr. Meehan. Aye.
        The Clerk. Mr. Meehan, aye. Mr. Delahunt?
        Mr. Delahunt. Aye.
        The Clerk. Mr. Delahunt, aye. Mr. Wexler?
        [No response.]
        The Clerk. Mr. Weiner?
        [No response.]
        The Clerk. Mr. Schiff?
        Mr. Schiff. Aye.
        The Clerk. Mr. Schiff, aye. Ms. Sanchez?
        Ms. Sanchez. Aye.
        The Clerk. Ms. Sanchez, aye. Mr. Smith?
        [No response.]
        The Clerk. Mr. Van Hollen?
        [No response.]
        The Clerk. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Are there Members who wish to cast
    or change their vote? The gentleman from Wisconsin, Mr. Green.
        Mr. Green. No.
        The Clerk. Mr. Green, no.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their vote? If not, the clerk will report.
        The Clerk. Mr. Chairman, there are 9 ayes and 15 noes.
        Chairman Sensenbrenner. And the amendment is not agreed to.
        Are there further amendments?
        Mr. Watt. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from North Carolina,
    Mr. Watt.
        Mr. Watt. Mr. Chairman, I have an amendment at the desk.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        Mr. Watt. Watt 02.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        The Clerk. Amendment to S. 256, offered by Mr. Watt----
        Mr. Watt. I ask unanimous consent the amendment be
    considered as read.
        Chairman Sensenbrenner. The gentleman will hold off until
    the amendment is at least distributed to some Members.
        The Clerk. On page 10----
        Chairman Sensenbrenner. Without objection, the amendment is
    considered as read.
        [The amendment follows:]

        Chairman Sensenbrenner. And the gentleman is recognized for
    5 minutes.
        Mr. Watt. Thank you, Mr. Chairman. And my good friend from
    Utah couldn't have provided a more appropriate segue into this
    amendment than to remind us that most people are poor because
    they are young and uneducated. And this amendment goes directly
    to that point.
        Under the current version of this bill, school expenses for
    minor children up to $1,500 per child annually are allowable as
    expenses under the means test. My amendment expands----
        Chairman Sensenbrenner. The gentleman will suspend. We have
    a problem with your microphone.
        Mr. Watt. That is probably a blessing, considered a
    blessing by most people.
        Chairman Sensenbrenner. Well, we do have the court reporter
    to record your comments for posterity.
        [Pause.]
        Mr. Watt. Are we okay? Testing. ``O, say can you see''----
        [Laughter.]
        Chairman Sensenbrenner. I think the gentleman from North
    Carolina is auditioning for a free ticket to the Nationals to
    sing the National Anthem there.
        Mr. Watt. I was trying to see if you all would stand.
        Chairman Sensenbrenner. The gentleman is recognized.
        [Laughter.]
        Mr. Watt. Trying to get people to stand, Mr. Chairman.
    That's all.
        I'm not sure where you all ceased to hear me, but I wanted
    to thank my friend from Utah for setting the stage for this
    amendment by reminding us that most people are poor because
    they are young and uneducated. The current version of the bill
    allows up to $1,500 per child for school expenses under the
    means test. However, most college-age students remain dependent
    on their parents and rely upon parental support to attend
    college or other postsecondary institutions. A college degree
    is a valuable investment? I think Mister--my good friend from
    Utah would agree with that, and often is the key for lower-
    income Americans to break the cycle of poverty.
        Unfortunately, the average cost of a year's tuition, room
    and board, and fees at a private college last year was $22,541.
    The average cost of a year's tuition, room and board, and fees
    at a public university last year was $8,470. That information,
    by the way, comes from the College Board, not from me. I didn't
    make it up. For 2004-2005 school year, tuition fees in 4-year
    public universities soared at 11 percent, while at private
    universities they rose 6 percent, according to the College
    Board. And if I can just give you a personal experience, when
    my kids went to college, the increase in their tuition from 1
    year to the next was more than I paid per year to go to the
    State university that I went to. So that gives you some
    appreciation that I have some personal appreciation for this.
        So all we're doing is trying to get you all to allow us to
    help people break this cycle of poverty that my good friend
    from Utah referred to that keeps so many people poor, and not
    visit the sins of parents--if you think that incurring debt and
    going into bankruptcy is a sin, don't visit the sins of the
    parents on the children, because then you are punishing other
    folks who--they didn't incur these debts.
        So, please, consider this amendment and I ask for your
    support and yield back. Sorry I serenaded you.
        Chairman Sensenbrenner. The gentleman from Utah.
        Mr. Cannon. Thank you. I enjoyed----
        Chairman Sensenbrenner. He does not have to sing, by the
    way.
        Mr. Cannon. I enjoyed the music, but Mel does this a lot
    better than I do so I'm not going to sing. Thank you.
        I appreciate what the gentleman is saying. College costs
    have gone up. Just two points.
        One is that this eliminates any kind of cap--there's a
    $1,500 cap in the current bill, and it's for essentially
    adults. Now, I grant you that 18-year-olds are young people,
    but, again, I hope that my children have a rough experience
    with the world as they get to be 18 and beyond so that they
    realize that there's nothing out there to protect them other
    than their own wit and capabilities and that Government, I
    think, is not a very good protector. And so I would urge people
    to vote against this amendment. This is a finely crafted bill.
    I think what we have in the bill is really a very appropriate
    number, and while I'd like to be able to solve all the problems
    of everyone in the world of getting access to education, we've
    done much with Pell grants and with loans and other support,
    and I think that the place to deal with that issue is not in
    this bill but in other aspects of what we're doing here in
    Congress generally.
        So I would urge people to vote against this amendment and
    yield back the balance of my time.
        Chairman Sensenbrenner. The question is on the Watt
    amendment. Those in favor will say aye? Opposed, no? The noes
    appear to have it.
        Mr. Watt. Mr. Chairman, I ask for a recorded vote.
        Chairman Sensenbrenner. A recorded vote will be ordered.
    Those in favor of the Watt amendment will, as your names are
    called, answer aye, those opposed, no, and the clerk will call
    the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        [No response.]
        The Clerk. Mr. Smith?
        [No response.]
        The Clerk. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        [No response.]
        The Clerk. Mr. Chabot?
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no. Mr. Lungren?
        [No response.]
        The Clerk. Mr. Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no. Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        Mr. Bachus. No.
        The Clerk. Mr. Bachus, no. Mr. Inglis?
        [No response.]
        The Clerk. Mr. Hostettler?
        Mr. Hostettler. No.
        The Clerk. Mr. Hostettler, no. Mr. Green?
        [No response.]
        The Clerk. Mr. Keller?
        [No response.]
        The Clerk. Mr. Issa?
        Mr. Issa. No.
        The Clerk. Mr. Issa, no. Mr. Flake?
        [No response.]
        The Clerk. Mr. Pence?
        [No response.]
        The Clerk. Mr. Forbes?
        [No response.]
        The Clerk. Mr. King?
        Mr. King. No.
        The Clerk. Mr. King, no. Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no. Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no. Mr. Gohmert?
        Mr. Gohmert. No.
        The Clerk. Mr. Gohmert, no. Mr. Conyers?
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye. Mr. Berman?
        [No response.]
        The Clerk. Mr. Boucher?
        Mr. Boucher. No.
        The Clerk. Mr. Boucher, no. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye. Mr. Scott?
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye. Mr. Watt?
        Mr. Watt. Aye.
        The Clerk. Mr. Watt, aye. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        Ms. Jackson Lee. Aye.
        The Clerk. Ms. Jackson Lee, aye. Ms. Waters?
        [No response.]
        The Clerk. Mr. Meehan?
        Mr. Meehan. Aye.
        The Clerk. Mr. Meehan, aye. Mr. Delahunt?
        Mr. Delahunt. Aye.
        The Clerk. Mr. Delahunt, aye. Mr. Wexler?
        [No response.]
        The Clerk. Mr. Weiner?
        Mr. Weiner. Aye.
        The Clerk. Mr. Weiner, aye. Mr. Schiff?
        Mr. Schiff. Aye.
        The Clerk. Mr. Schiff, aye. Ms. Sanchez?
        Ms. Sanchez. Aye.
        The Clerk. Ms. Sanchez, aye. Mr. Smith?
        [No response.]
        The Clerk. Mr. Van Hollen?
        [No response.]
        The Clerk. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Members who wish to cast or change
    their votes? The gentleman from North Carolina, Mr. Coble.
        Mr. Coble. No.
        The Clerk. Mr. Coble, no.
        Chairman Sensenbrenner. The gentleman from Florida, Mr.
    Keller.
        Mr. Keller. No.
        The Clerk. Mr. Keller, no.
        Chairman Sensenbrenner. The gentleman from Wisconsin, Mr.
    Green.
        Mr. Green. No.
        The Clerk. Mr. Green, no.
        Chairman Sensenbrenner. The gentleman from California, Mr.
    Lungren.
        Mr. Lungren. No.
        The Clerk. Mr. Lungren, no.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their vote? If not, the clerk will report.
        The Clerk. Mr. Chairman, there are 10 ayes and 17 noes.
        Chairman Sensenbrenner. And the amendment is not agreed to.
        Are there further amendments?
        Mr. Watt. Mr. Chairman, may I be recognized for a unanimous
    consent request?
        Chairman Sensenbrenner. The gentleman from North Carolina,
    for what purpose do you seek recognition?
        Mr. Watt. To ask unanimous consent to insert in the record
    at this point a copy of a report entitled ``Robbing Perkins to
    Pay Pell: The Bush College Aid Proposal,'' and a letter from
    Ranking Member Obey and Ranking Member George Miller talking
    about the results of that report.
        Chairman Sensenbrenner. Without objection, the material
    referred to by the gentleman from North Carolina will be
    included in the record.
        [The material referred to follows:]

        Mr. Nadler. Mr. Chairman?
        Chairman Sensenbrenner. Are there further amendments? The
    gentleman from New York, Mr. Nadler.
        Mr. Nadler. Thank you, Mr. Chairman. I have an amendment at
    the desk, Nadler number 1.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        Mr. Nadler. Nadler number 1.
        The Clerk. Amendment to S. 256 offered by Mr. Nadler. At an
    appropriate place, insert the following (``and''----
        Mr. Nadler. Mr. Chairman, move to dispense with the
    reading.
        Chairman Sensenbrenner. Let's look at it first.
        Mr. Nadler. Okay.
        The Clerk. ``(and make such technical and conforming
    changes as may be appropriate): Section--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 strike `or'
    at the end; (2) in paragraph (19) by striking the period at the
    end and inserting''----
        Chairman Sensenbrenner. Without objection, the amendment is
    considered as read.
        [The amendment follows:]

        Chairman Sensenbrenner. The gentleman from Utah?
        Mr. Nadler. Excuse me. Don't I have a chance to explain the
    bill.
        Chairman Sensenbrenner. The gentleman from Utah?
        Mr. Cannon. Mr. Chairman, I would like to reserve a point
    of order.
        Chairman Sensenbrenner. The gentleman--a point of order is
    reserved. The gentleman is recognized for 5 minutes.
        Mr. Nadler. Thank you, Mr. Chairman.
        This amendment would make debts arising from civil--from
    judgments from civil rights violations nondischargeable. The
    amendment includes every civil rights violation listed in the
    Federal criminal code, any civil judgment arising under a civil
    rights violation, including a section 1983 action, which is to
    say a judgment against someone for violating someone's civil
    rights under color of law, or an intentional violation of a
    valid court order enforcing a civil rights law described in the
    amendment. It also includes offenses under State law that
    consist of conduct that would be a civil rights crime described
    in the Federal criminal codes. Finally, it repairs an omission
    in the current code that makes fines and restitution ordered
    under the Federal criminal code nondischargeable, but does not
    make fines and restitution ordered under State law
    nondischargeable. My amendment would add the State law.
        So if you violate the right to vote, the right to work, the
    rights of a person wearing the uniform of the United States
    military, the right to the free exercise of religion, the right
    of freedom of access to clinic entrances, or any other
    federally protected civil rights, you will not be able to abuse
    the Bankruptcy Code either to escape your debts or to force
    your victims to chase you across the country through bankruptcy
    courts trying to collect lawful judgments.
        We know that is a common strategy, and even where it fails,
    the uncertainty in the law gives the tort feasors the
    opportunity to inflict more damage and more expense on their
    victims. This bill expands the types of nondischargeable debts.
    It makes nondischargeable even small cash advances leading up
    to the filing of a case. It's not enough money to keep your
    kids in Huggies, Mr. Chairman, but we're protecting the
    helpless credit card companies.
        If you use--anyway, this is the wrong page. This amendment
    simply makes all these different judgments arising from State
    or Federal civil rights violations not dischargeable in
    bankruptcy, including violations of 1983, which is a violation
    of civil rights under color of law, and that's an abuse of the
    code and we should not allow it, and I urge the amendment.
        Chairman Sensenbrenner. Does the gentleman from Utah insist
    upon his point of order?
        Mr. Cannon. Thank you, Mr. Chairman. I'd make a point of
    order that the amendment does not amend a specific section or
    specific text.
        Chairman Sensenbrenner. You wish to argue in favor of your
    point of order?
        Mr. Nadler. I don't understand the point of order. What do
    you mean it doesn't amend a specific section?
        Chairman Sensenbrenner. The gentleman from Utah has the
    right to argue in favor of his point of order.
        Mr. Nadler. I'm just asking a question.
        Mr. Cannon. I think it's fairly obvious. The amendment on
    its face says that ``at the appropriate place insert,'' and
    makes--I believe that the rules of Committee----
        Mr. Nadler. It doesn't say that.
        Mr. Cannon. No, the amendment says ``at an appropriate
    place insert the following (and make such technical and
    conforming changes as may be appropriate.'' I believe the rules
    of the Committee require that an amendment specifically amend a
    section or particular language within a section.
        Mr. Nadler. Mr. Chairman?
        Chairman Sensenbrenner. Does the gentleman from New York
    wish to be heard in opposition to the point of order?
        Mr. Nadler. Yes. This----
        Chairman Sensenbrenner. Or does he wish to concede the
    point of order?
        Mr. Nadler. No. I wish to contest the point of order. This
    is a standard form of amendment. We do it all the time in this
    Committee, and I'm not aware of the rule you're talking about.
    And if there is such a rule, it's never enforced. This is a
    standard form that is done every week in this Committee. If you
    look at all the amendments we've done, probably half of them
    are done in this form.
        Chairman Sensenbrenner. Well, the Chair is prepared to
    rule.
        Mr. Watt. Mr. Chairman, may I be heard?
        Chairman Sensenbrenner. The Chair is prepared to rule.
    Chapter 27 of Deschler's Precedents, Section 1.2/8, says that
    an amendment must contain instructions to the clerk as to the
    portion of the text it seeks to amend. This amendment does not
    do that, and the Chair is prepared to sustain the point of
    order----
        Mr. Nadler. Mr. Chairman, I'll withdraw the amendment.
    It'll be resubmitted in a few minutes.
        Chairman Sensenbrenner. Okay. The amendment----
        Mr. Nadler. In proper form.
        Chairman Sensenbrenner. The amendment is withdrawn.
        Are there further amendments?
        Mr. Nadler. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from New York.
        Mr. Nadler. I have an--now, let me make sure that this is
    drafted in the same--not in the same way. No, it's okay.
        I have an amendment at the desk, amendment number 2.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        Mr. Nadler. Number 2.
        Chairman Sensenbrenner. The clerk will report Nadler number
    2.
        The Clerk. Amendment to S. 256, offered by Mr. Nadler,
    ``Page 213, line 11, strike the close quotation marks and the
    period at the end.''
        ``Page 213, after Line 11, inst the following (and make
    such technical and conforming changes as may be appropriate):''
        Chairman Sensenbrenner. Without objection, the amendment is
    considered as read.
        [The amendment follows:]

        Chairman Sensenbrenner. And the gentleman from New York is
    recognized for 5 minutes.
        Mr. Nadler. Thank you. Thank you, Mr. Chairman.
        Mr. Chairman, the Judiciary Committee has received
    testimony from many sources, most recently from the Commercial
    Law League of America, the Nation's oldest creditors rights
    organization, that the business provisions in this bill will
    destroy businesses, especially small businesses. The
    substitute--that is, this amendment--would correct this problem
    by giving distressed companies the needed flexibility that will
    enable many of them to reorganize successfully as opposed to
    liquidate in a Chapter 11 proceeding.
        Organized labor has also spoken out against the small
    business provisions of this bill because they recognize that a
    failed reorganization hits workers the hardest. They're the
    ones who lose their jobs. They're the ones who lose their
    benefits. They're the ones who see their pensions evaporate.
        If you have had a large and small business bankruptcy in
    your district, you know what happens when a company goes under.
    Preserving value in a company through successful rehabilitation
    where it is possible benefits everyone--the employees, the
    creditors, the communities. This bill, however, has rigid and
    inflexible deadlines that is not found in the current code,
    especially those dealing with the time in which a company may
    propose a plan of reorganization. It also places absolute
    limits on the time in which a business must decide whether to
    assume or reject a commercial lease, even if they are current
    in their rent payments. That limit could prove disastrous in
    cases involving businesses with hundreds of stores. Does anyone
    know about the Kmart bankruptcy or the Cinema Multiplex
    bankruptcies? How would arbitrary deadlines have affected those
    cases?
        Other arbitrary rules that would force the conversion of a
    case to liquidation are dangerous to our economy and to
    American business, especially small businesses. When this bill
    first appeared in 1997, everyone was singing ``Happy days are
    here again.'' There were few fears that massive bankruptcies in
    our airline industry, the collapse of much of our tech
    industry, the implosion of such market bellwethers as Enron and
    WorldCom or the coal or steel industries were just over the
    horizon.
        It would be foolhardy for the Members of this Committee to
    ignore what is going on in the real world just because we have
    voted for this bill in the past. In the case of these business
    provisions, they could mean the loss of thousands of jobs, the
    unnecessary liquidation as opposed to reorganization of
    valuable and still viable businesses, and the loss of business
    and value for trade creditors and communities.
        Let's take an example from the business pages--from the
    financial pages. The last time we marked up this bill, I noted
    that that morning's New York Times had reported that United
    Airlines was seeking an extension on its April 8th deadline for
    filing a plan of reorganization until October 6th. Why were
    they seeking this extension? According to the report, the extra
    time would give United the chance to gauge the consequences of
    any war with Iraq on the airline industry, unquote.
        Is there anyone here other than one of United's competitors
    who does not think that that made sense at that time? Would we
    have wanted to insist that United file a plan without getting a
    handle on what is about to happen? Would the Members of the
    Committee prefer to just liquidate the whole thing?
        According to the Times, ``The Air Transport Association
    said in a report yesterday that a long conflict could prompt
    the industry to cut 70,000 more jobs on top of the 100,000 lost
    since the September 11th attacks in 2001.'' It said, ``Several
    carriers could be forced in bankruptcy along with United and US
    Airways, which had filed for Chapter 11 protection last
    summer.'' In fact, an ATA spokesman was quoted in the London
    Financial Times as stating that the war could add another $4
    billion to airline losses on top of the $5.7 billion forecast
    and cut a further 2,200 daily flights.
        In court papers, United requested the extension to avoid
    premature formulation of a Chapter 11 plan and to ensure that
    the formulated plan takes into account the interests of the
    company, its employees, and its creditors. That was then.
        Judge Weidoff is still keeping United in the air and people
    are still working. Could you imagine what would have happened
    if we had tied his hands the way this bill would? Is there any
    doubt what would have happened to that case? United would have
    been liquidated, the employees laid off, and the creditors not
    gotten their debts repaid. Shouldn't the law allow courts to
    review the facts and decide whether or not such flexibility as
    in the Bankruptcy Code has long required in the best interest
    of the creditors and the estate?
        Mr. Chairman, our job is to make the system work better,
    not to wreck it. Chapter 11 is a model that other countries are
    trying to emulate. They look to our system of rehabilitating
    going concerns values where possible as preferable to their
    emphasis on liquidation. Just as the rest of the world is
    realizing that our system encourages risk taking and promotes
    the rehabilitation of distressed businesses, this bill--or this
    provision would take our system back in the other direction.
    Perhaps this Committee could listen to the sound of the market
    forces before acting.
        I urge the adoption of this amendment to allow the system
    to remain somewhat flexible so that businesses can be saved
    instead of liquidated. Thank you. I yield back.
        Chairman Sensenbrenner. The gentleman from Utah.
        Mr. Cannon. Thank you, Mr. Chairman.
        Section 404 of the bill, under current law, Chapter--this
    refers to section 404. Under current law, a Chapter 11 debtor
    or lessee must assume or reject a nonresidential lease within
    60 days. This 60-day period, however, can be and often is
    routinely extended by the court. Section 404 of the current
    bill fixes the deadline by which the debtor must assume or
    reject a lease. It requires a nonresidential lessee to either
    assume or reject within 120 days of the filing of bankruptcy or
    by the date that the court confirms the plan of reorganization.
    This period can be extended for an additional 90 days on the
    motion of the lessee or the lessor. And then there are further
    provisions for extension.
        Let me just point out that section 404 is a result of
    extensive negotiation over the preceding three Congresses. This
    bill is not hostile to lessees. As a matter of fact one of the
    principal groups of nonresidential lessees, the National Retail
    Federation, is one of the bill's strongest supporters on this
    particular point.
        The provision gives landowners greater certainty in dealing
    with bankrupt tenants because it sets a firm time frame by
    which the debtor must decide whether to continue with a lease
    of a shopping center and the ability it produces means
    ultimately we get better rates more equitable rates, and
    promotes competition among landlords. Bankruptcy Code section
    502 limits the amount of damages that a landlord can claim as
    an administrative expense, priority if a tenant assumes a
    lease, and then rejects the lease at a later time. This
    prevents landlords from getting a financial windfall at the
    expense of unsecured creditors. It's a well-thought-out and
    well-balanced part of the whole bill.
        Now, many of these issues deal with small businesses, and
    we have very, very wide-ranging groups supporting these small
    business provisions, like the National Bankruptcy Review
    Commission, Executive Office of the United States Trustees,
    bankruptcy judges, the National Association of Credit
    Management, and the American Bankruptcy Institute.
        This section gives teeth to those charged with the
    oversight of these cases, including the courts, the United
    States trustees and parties in interest. It only requires small
    business debtors to do what they should do and be doing while
    they're in Chapter 11, that is, pay their post-petition
    obligations as they become due and make progress toward
    confirmation.
        Deadlines in these provisions are not absolute. Most can be
    extended upon a proper showing of cause. And this streamlines
    the process by providing for flexible rules for disclosure
    statements and plans.
        Again, the bill can be criticized at various points and
    narrow perspectives, but as a whole, and in particular with
    this section, the section that's attempted to be amended here
    by Mr. Nadler, the bill is well considered and well balanced,
    and I would urge my colleagues to reject this amendment.
        Thank you, Mr. Chairman. I yield back.
        Mr. Berman. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from California, Mr.
    Berman.
        Mr. Berman. Thank you, Mr. Chairman. Move to strike the
    last word.
        Chairman Sensenbrenner. The gentleman is recognized for 5
    minutes.
        Mr. Berman. I yield to the gentleman from New York.
        Mr. Nadler. Thank you. Mr. Chairman, the provisions--what's
    wrong with the provisions in the bill that this seeks to enact
    is that they are rigid. One, first of all, most of what
    Mister--the gentleman from Utah talked about was lessees.
    Lessees and lessors are only one part of what we're talking
    about here. And if you look at the amendment, it says
    repeatedly the court may extend the time period specified in
    this paragraph if the debtor established by clear and
    convincing evidence that an extension is justified by
    circumstances beyond the debtor's control that were not
    foreseeable on the date for the order of relief.
        Again, unless the debtor established 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. Unless the debtor established by clear and
    convincing evidence that there are--et cetera.
        The court may extend the time period specified in paragraph
    2 if the debtor established by clear and convincing evidence
    that an extension is justified by circumstances beyond the
    debtor's control that were not foreseeable.
        In other words, we're giving the judge in this amendment
    the ability--in the interest of the creditors, in the interest
    of the debtors, in the interest of the employees, in the
    interest of everybody, the ability in case of unforeseeable
    developments, the ability to extend otherwise rigid deadlines,
    deadlines that in the abstract may make sense. Deadlines that
    may say 90 days and then a one-time extension of another 60
    days may sound reasonable but in a given case may not prove to
    be reasonable.
        The code has always given the judges some discretion, and
    all this amendment says, the burden of proof is on the debtor.
    The burden of proof for a debtor who wants an extension of time
    is on the debtor to prove by clear and convincing evidence. The
    second highest standard of evidence that he needs the extension
    because of circumstances beyond his control that were not
    foreseeable at the time of the order.
        And if the judge believes that he has established that
    beyond--by clear and convincing evidence, at that point why
    shouldn't the judge have the ability to extend a deadline and
    maybe save a company, save the jobs, save the community, get
    the creditors the ability to have more of their debts repaid?
    It doesn't make sense to be this rigid.
        Now, judges are going to be reluctant to extend deadlines
    repeatedly, especially when you put the burden of proof on the
    debtor and say not only does it have to be clear and convincing
    evidence, but it has to be circumstances that are beyond his
    control and totally unforeseeable at the time the order was
    given. I don't see what sense it makes to deny some flexibility
    when you may save 20,000 jobs or a community or get--or for
    that matter, that may redound to the benefit of the creditor,
    too.
        So why wouldn't we give this kind of flexibility--I
    shouldn't say ``give''--keep this kind of flexibility in the
    system?
        I yield back to the gentleman. I thank him for yielding.
        Chairman Sensenbrenner. Does the gentleman from California
    yield back?
        Mr. Berman. I do.
        Mr. Watt. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from North Carolina,
    Mr. Watt.
        Mr. Watt. I won't take 5 minutes. I just want to make the
    point that this discussion has pointed up once again how we
    miss opportunities to address problems by not having hearings
    and going through regular order. I don't think either one of
    these gentlemen is trying to do anything unreasonable, but we
    are operating in a system here that you all have set that
    basically is making a mockery of the legislative process. It's
    clear that you're not going to allow one comma, one period, one
    capital letter, anything to be done to this bill because you
    don't want it to go to conference. I understand that. But it
    makes this markup a charade. And it makes us look like we're
    just--this is just an irrelevant process, that the Senate has
    shaped this bill, and this bill is too important to the
    American consumer, debtor, and creditor to have this happen to
    it. And our institution is too important for us to make our
    institution have this kind of impact.
        So, I mean, I--if I sound a little frustrated, it's because
    I am a little frustrated, because we're just playing games
    here. And so I yield back.
        Chairman Sensenbrenner. The question is on the amendment
    offered by the gentleman from New York, Mr. Nadler. Those in
    favor will say aye? Opposed, no? The noes appear to have it.
    The noes--a rollcall will be ordered. Those in favor of the
    Nadler amendment will, as your names are called, answer aye,
    those opposed, no, and the clerk will call the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        Mr. Coble. No.
        The Clerk. Mr. Coble, no. Mr. Smith?
        Mr. Smith of Texas. No.
        The Clerk. Mr. Smith, no. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        [No response.]
        The Clerk. Mr. Chabot?
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no. Mr. Lungren?
        Mr. Lungren. No.
        The Clerk. Mr. Lungren, no. Mr. Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no. Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        [No response.]
        The Clerk. Mr. Inglis?
        Mr. Inglis. No.
        The Clerk. Mr. Inglis, no. Mr. Hostettler?
        Mr. Hostettler. No.
        The Clerk. Mr. Hostettler, no. Mr. Green?
        [No response.]
        The Clerk. Mr. Keller?
        Mr. Keller. No.
        The Clerk. Mr. Keller, no. Mr. Issa?
        Mr. Issa. No.
        The Clerk. Mr. Issa, no. Mr. Flake?
        [No response.]
        The Clerk. Mr. Pence?
        [No response.]
        The Clerk. Mr. Forbes?
        [No response.]
        The Clerk. Mr. King?
        Mr. King. No.
        The Clerk. Mr. King, no. Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no. Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no. Mr. Gohmert?
        Mr. Gohmert. No.
        The Clerk. Mr. Gohmert, no. Mr. Conyers?
        [No response.]
        The Clerk. Mr. Berman?
        Mr. Berman. Aye.
        The Clerk. Mr. Berman, aye. Mr. Boucher?
        [No response.]
        The Clerk. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye. Mr. Scott?
        [No response.]
        The Clerk. Mr. Watt?
        Mr. Watt. Aye.
        The Clerk. Mr. Watt, aye. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        [No response.]
        The Clerk. aye. Ms. Waters?
        Ms. Waters. Aye.
        The Clerk. Ms. Waters, aye. Mr. Meehan?
        Mr. Meehan. Aye.
        The Clerk. Mr. Meehan, aye. Mr. Delahunt?
        Mr. Delahunt. Aye.
        The Clerk. Mr. Delahunt, aye. Mr. Wexler?
        Mr. Wexler. Aye.
        The Clerk. Mr. Wexler, aye. Mr. Weiner?
        [No response.]
        The Clerk. Mr. Schiff?
        Mr. Schiff. Aye.
        The Clerk. Mr. Schiff, aye. Ms. Sanchez?
        Ms. Sanchez. Aye.
        The Clerk. Ms. Sanchez, aye. Mr. Smith?
        Mr. Smith of Washington. Aye.
        The Clerk. Mr. Smith, aye. Mr. Van Hollen?
        [No response.]
        The Clerk. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Members who wish to cast or change
    their vote? The gentleman from Alabama, Mr. Bachus.
        Mr. Bachus. No.
        The Clerk. Mr. Bachus, no.
        Chairman Sensenbrenner. The gentleman from Wisconsin, Mr.
    Green.
        Mr. Green. No.
        The Clerk. Mr. Green, no.
        Chairman Sensenbrenner. The gentleman from New York, Mr.
    Weiner.
        Mr. Weiner. Aye.
        The Clerk. Mr. Weiner, aye.
        Chairman Sensenbrenner. The gentleman from Virginia, Mr.
    Scott.
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye.
        Chairman Sensenbrenner. The gentleman from Michigan, Mr.
    Conyers.
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their vote? If not, the clerk will report.
        The Clerk. Mr. Chairman, there are 13 ayes and 18 noes.
        Chairman Sensenbrenner. And the amendment is not agreed to.
    Are there further amendments?
        Mr. Schiff. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from California, Mr.
    Smith.
        Mr. Schiff. Schiff.
        Chairman Sensenbrenner. Schiff. I'm sorry.
        Mr. Schiff. It is going to be very confusing on this
    Committee now.
        Mr. Chairman, I have an amendment at the desk numbered 006.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        The Clerk. Amendment to S. 256 offered by Mr. Schiff. Page
    19, after line 21, insert the following (and make such
    technical and conforming changes as may be appropriate):
        ``(8)(A) No judge, United States trustee''----
        Chairman Sensenbrenner. Without objection the amendment
    will be considered as read and the gentleman from California is
    recognized for 5 minutes.
        [The amendment follows:]

        Mr. Schiff. Mr. Chairman, I thank you. My amendment would
    simply provide that if at least 51 percent of the creditor
    claims against you in bankruptcy are the result of identity
    theft, you should not be forced out of the protections of
    Chapter 7. This is an amendment similar to that offered by
    Senator Nelson of Florida, but is significantly narrower than
    the amendment that was offered in the Senate.
        A few years ago the manager of an identity theft program at
    the FTC commented on how identity theft was becoming rampant in
    the country. She commented that not only can identity theft
    wreak havoc on the credit of a victim, but it can even force
    them into bankruptcy. Since then the problem has grown at
    epidemic rates. Identity theft has now topped the list of
    consumer complaints filed with the FTC for the last 4 years in
    a row. In September 2003 the FTC released a comprehensive
    survey concluding that a staggering 27 million Americans have
    been the victims of identity theft in at least the 5 years,
    costing consumers and businesses an estimated $53 billion in
    2002 alone.
        In fact, the home States of several Members of this
    Committee are at the top of the list of identity theft victims,
    with Texas ranking No. 4, Florida ranking No. 5, and my own
    home State of California ranking No. 3 in the number of victims
    of identity theft per capita, with over 37,000 complaints
    reported by consumers, costing over $40 million just last year.
        We've also heard of the recent breaches of massive
    databases holding personal information. Identity thieves posing
    as legitimate customers gained access to ChoicePoint's database
    of 19 billion public records. The company has acknowledged that
    hackers had access to data on 145,000 people and that stolen
    information has since been used in at least 750 identity theft
    scams.
        Just last week databases belonging to LexisNexis were also
    compromised with hackers stealing information on at least
    32,000 people. With these epidemic level increases comes the
    likelihood that more innocent individuals will be forced to
    file bankruptcy.
        Just last month a man was sentenced in New York to 2 years
    in prison for using a former girlfriend's identity to commit
    fraud. The scheme lasted several months, during which the
    perpetrator took out three personal loans from private loan
    agencies in the victim's name, purchased an Audi and a Chevy
    pickup truck. Ultimately the fraud resulted in the theft of
    over 300,000, forcing the victim to declare bankruptcy.
        There are a great many examples of this. November of last
    year a women in Pennsylvania similarly victimized, similarly
    forced to file bankruptcy right before Christmas.
        We shouldn't turn our backs on these individuals. Last year
    this Committee supported legislation Mr. Carter and I sponsored
    to crack down on criminals who perpetrate identity theft. Now
    this Committee has the opportunity to directly address the
    plight of some of the victims of this crime forced into
    bankruptcy. The amendment is simple and very narrowly drawn. It
    merely says that if at least 51 percent, slightly more than
    half of the claims against you in bankruptcy are the result of
    bankruptcy--the result of identity theft, something you had no
    control over, you should not be forced out of the protections
    of Chapter 7.
        I know that there has been a desire among the majority to
    keep the bill in its pristine state, but this is a good
    amendment. I think it's one that ought to enjoy bipartisan
    support, as our identity theft did last year, and I would urge
    you to accept it. This is more narrow than what was offered in
    the Senate. It would specifically address the problem where the
    major reason why you would be forced out of Chapter 7 is
    because you are a victim of identity theft, and I urge my
    colleagues to join support, and I reserve the balance of my
    time.
        Chairman Sensenbrenner. The gentleman will have to yield
    back.
        Mr. Schiff. I yield back, Mr. Chairman.
        Chairman Sensenbrenner. The gentleman from Utah, Mr.
    Cannon.
        Mr. Cannon. Thank you, Mr. Chairman.
        I'm just sort of working through this amendment now, and
    it's obviously--it's obvious to me that it's an important idea
    and maybe something that we'd want to consider in the context
    of future changes, a technical blurb, something like that. For
    the purposes of this bill, besides the fact that we want to do
    a reasonable bill, and I think that this bill is available to
    amend if we get new reasons. Thus far I don't think we've heard
    many.
        But this is a new issue, and I appreciate the fact that it
    is more narrowly drafted than the Senate counterpart, but
    there's some problems that I have in this bill, and I think
    those are substantial, and that's why I think if we do anything
    with this we'd have to do it--I would encourage the Members to
    vote against it so we can deal with it at some future time.
        In the first place we're fairly vague about the identity
    theft and how it's established and what that means. In the
    second place, what happens if a person has a significant amount
    of identity theft--losses caused by identity theft and then
    becomes wealthy and has the ability to otherwise deal with
    these things? And so----
        [Laughter.]
        Mr. Schiff. Would the gentleman yield?
        Mr. Cannon. Yes, in just a moment. Let me just say in
    summary from my perspective, I don't, I don't have a handle on
    how we deal with this, how it would fit in, and it would
    clearly disrupt the whole process of moving forward a bill. So
    I would encourage my colleagues to reject this amendment. And
    who asked to----
        Mr. Schiff. I asked the gentleman if he would yield.
        Mr. Cannon. Oh, certainly, Mr. Schiff.
        Mr. Schiff. This is a, you know, rough replay of a scenario
    that took place in this Committee a couple years ago when I
    offered and amendment to this bill, to just do a study of
    whether those trying to get child support would be adversely
    impacted by the bill. It just called for a GAO study of the
    issue. The author of the bill at that time was Mr. Gekas. He
    made comments very similar to yours, along the lines of this
    may not be a bad idea, this may be a good idea, but we don't
    want anything added to the bill.
        Mr. Cannon. Reclaiming my time, I think the point between
    the time that Mr. Gekas was here and now is there's been a lot
    of time to develop that idea, and if somebody wanted to do it,
    it could have been developed. I don't know that this issue has
    come up in the hearings that we've had or in the negotiations
    or discussions we've had anywhere. This has been an issue out
    there, but that hasn't had an advocate in the context of this
    bill.
        Mr. Schiff. Will the gentleman yield again?
        Mr. Cannon. Certainly.
        Mr. Schiff. You know, I know the gentleman, with all due
    respect, is really reaching for a rationale to vote down the
    amendment, and, you know, I--Mr. Gekas, in the last scenario,
    offered to take up my amendment in the manager's amendment. It
    went up to the Rules Committee as part of this package. It came
    down from the Rules Committee, having been deleted from the
    package. And when I asked him why, he said, ``You know, I
    thought I was the author of this bill, but it essentially is
    being controlled by the interest behind the bill,'' and he
    could not even succeed with an amendment he supported.
        I hope we're not to that point. This is a very simple
    amendment that says----
        Mr. Cannon. Reclaiming my time, I just--Mr. Gekas is not
    here to defend himself. That is an extraordinary statement. I
    knew Mr. Gekas very well. I've taken over the Subcommittee that
    he chaired earlier. I don't mean to challenge your credibility
    on the issue, but beyond Mr. Gekas we need to have a process,
    and we have not talked about this issue. I don't know if you've
    talked with other people that are engaged in the bill, but the
    issue has not, that is the issue of identity theft and how we
    fit it in the bill, has not been raised in a context where we
    could vet it and deal with it.
        So part of the reason I'm stretching is because it's a new
    issue, and I don't know how it fits into--and I grant that I'm
    stretching. I don't know how it fits in. I don't know what it
    does to the bill. If it's going to be dealt with, it needs to
    be dealt with in the context to determine----
        Mr. Schiff. Will the----
        Mr. Cannon. Pardon me, just if I can finish. We need to
    deal with it in a context where we can consider the
    implications for the whole bill. And so I have a little bit of
    time left.
        Mr. Schiff. I appreciate the gentleman yielding, and I'm
    not impugning at all Mr. Gekas' credibility, who fought for my
    amendment, and I'm appreciative to him. But I do challenge the
    process that's going on here where we have a markup. We spend
    hours here. And if the majority has made the decision that we
    will accept no amendments no matter how meritorious, then this
    really is a futile exercise, and we are all too busy to engage
    in a futile exercise.
        Mr. Cannon. Reclaiming the last few moments that I have, it
    is a futile exercise if there's nothing new or if we can't make
    a clear and compelling case for something, which I don't think
    you can do with an issue like this at this time with the
    limited debate here. But we have a process.
        Chairman Sensenbrenner. The gentleman's time has expired.
        Mr. Watt. Mr. Chairman?
        Chairman Sensenbrenner. The question is on the----
        Mr. Watt. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from North Carolina,
    Mr. Watt.
        Mr. Watt. I move to strike the last word.
        Senator Carper. The gentleman's recognized for 5 minutes.
        Mr. Watt. And I really didn't intend to just get on this
    and stay on it, but we're getting to the point of just being
    ridiculous here, and you know, I think we all are beginning to
    have our sensibilities insulted. And to be honest with you and
    very blunt, the Republicans are beginning to do a disservice to
    themselves by looking like robots, and that's unfortunate.
        This bill and the substance of this bill is too important
    to the American people to treat it like this, and I, I mean I
    think there's more integrity just to say, ``Look, we're not
    going to amend this bill, you know, call the previous
    question,'' you know, which you all have done before. You try
    to do it when you can blame it on us. We're trying to be
    constructive here, offer really good amendments that a number
    of people have said are really good amendments, and--but
    there's no flexibility here, and I don't know what we are
    doing. This is a charade.
        And I'm embarrassed because this is out of--I mean
    bankruptcy started out--I guess I'm taking the lead on this
    because bankruptcy is the subject matter of Commercial and
    Administrative Law, which I am the Ranking Member of, and I
    don't want to see my Chair, Mr. Cannon, continue to embarrass
    himself like this. There's no rational reason for what's
    being----
        Mr. Cannon. Would the gentleman yield?
        Mr. Watt. I'm happy to yield to him if he can tell me he's
    not embarrassing himself.
        Mr. Cannon. You know, I actually find it embarrassing that
    we make an issue out of, out of the failure of an amendment
    that hasn't had any development. This is not a heavy-handed
    process that has culminated over 7 years to where we are today.
        Mr. Watt. Reclaiming my time.
        Mr. Cannon. This is a 7-year process.
        Mr. Watt. Reclaiming my time, I am making an issue of the
    fact that you all are making a charade of the legislative
    process on an important public policy such as bankruptcy. I'm
    embarrassed by this, and I think you should be embarrassed by
    it. So I, you know, I'm--this is not the first time I've said
    this today. This is not about this particular amendment but the
    cumulative effect of what you are doing is embarrassing to
    yourself, and, you know, I'm going to keep offering these
    amendments as long as you all sit here and embarrass yourself,
    but at some point you're going to have to just say to the
    American people, ``Regardless of how meritorious an amendment
    is on this bill, we are not going to amend the bill because our
    leadership has told us that. Mr. Delay or whoever is calling
    the shots has told us we are not going to amend this bill.''
        And I don't know why we fight for the jurisdiction of our
    Committee if our Committee can't do anything with the
    jurisdiction. What good is jurisdiction if you're not going to
    do anything?
        Mr. Bachus. Would the gentleman yield?
        Mr. Watt. We are legislators.
        Mr. Bachus. Would the gentleman yield?
        Mr. Watt. I'm happy to yield to the gentleman.
        Mr. Bachus. We've been amending this bill for 8 years, have
    we not? I mean this bill, we amended this bill this year and
    last year and the year before. So I mean it's not----
        Mr. Watt. Keep embarrassing yourself.
        Mr. Berman. Would the gentleman yield?
        Mr. Watt. I'm happy to yield to the gentleman from
    California.
        Mr. Berman. Would the gentleman--if the gentleman from
    North Carolina would yield to the gentleman from Alabama, could
    he explain to me why an amendment that says if 51 percent of
    your debts occurred because somebody stole your identity and
    that the ripple implications of accepting that amendment will
    so upset the delicate balance of this pristine bill that--in
    ways that we can never know. Just give us a coherent reason why
    an amendment as narrow and specific as this should be rejected
    on its face? I can understand accepting it and fine tuning it.
    I can understand--but you see the impression that we get over
    here?
        Mr. Bachus. I appreciate the gentleman----
        Chairman Sensenbrenner. The time of the gentleman from
    North Carolina has expired.
        Mr. Berman. Mr. Chairman?
        Chairman Sensenbrenner. The Chair moves to strike the last
    word----
        Mr. Berman. Mr. Chairman?
        Chairman Sensenbrenner.--and recognizes himself.
        First, there has been plenty of process on this bill over 8
    years, and all of the paper that has been generated, hearings,
    markups, Committee reports and debates on the floor are on the
    clerk's desk. And if you're having trouble seeing the clerk
    over the pile of papers, it shows that there has been plenty of
    information that has been submitted.
        Now, second, relative to the amendment that has been
    offered by the gentleman from California, Mr. Schiff, a person
    is not responsible for debts that he or she did not incur. So
    if the debt was run up by somebody else as a result of identity
    theft, the person in whose name the debt was run up is not
    responsible for it. And if there is identity theft, that is a
    factual issue that the bankruptcy judge can determine, and even
    without this amendment, the bankruptcy judge can disallow the
    claim that has been made against the bankrupt's estate. That is
    simple law.
        Now, everybody knows what the process is here. The people
    who don't like this bill want to amend it to send it back to
    the other body because they know the other body will have to
    spend two more weeks jumping through the hoops to get a piece
    of legislation passed.
        This bill has been hanging around here for 8 years. It is a
    bill that has gotten overwhelming support in both the Senate
    and the House of Representatives. There has been rollcall after
    rollcall, and I've added up the score in both the House and the
    Senate. Since the 105th Congress the aggregate total of votes
    on bankruptcy legislation has been 2,455 ayes to 871 nays.
        We're getting close to the goal line on this. Most of these
    arguments have been ventilated repeatedly in the past. I think
    that this amendment is merely an attempt to try to kill the
    bill because everybody knows that a debtor is not responsible
    for the debts he didn't incur. The amendment should be voted
    down.
        Ms. Waters. Mr. Chairman?
        Chairman Sensenbrenner. The gentlewoman from California,
    Ms. Waters.
        Ms. Waters. I move to strike the last word.
        Chairman Sensenbrenner. And the gentlewoman is recognized
    for 5 minutes.
        Ms. Waters. Mr. Chairman, if in fact this amendment does no
    harm, and if in fact it would be a restatement of existing law,
    then I don't see why it could not be considered for adoption.
        However, I think there are a few things that you, Mr.
    Chairman, said that would help everyone here to understand that
    you have no intentions of accepting any amendments on this bill
    today. You talk about the number of votes that have been taken.
    You talk about how high the paper is stacked before the clerk,
    and you basically have said to us that we're here today
    convened simply to vote this bill out, and that you will do
    that because you have the numbers, you have the majority of
    this Committee. You're not going to accept any amendments. And
    why then are we going through allowing us to take our good time
    to offer these amendments when you have decided the fate of our
    amendments already?
        I think it is worse than a charade, and I think it is, as
    Mr. Watt has said, embarrassing to us all, and I feel a little
    bit bad for the jockey of the bill over there from Idaho, who
    cannot defend--from Iowa--who cannot--where's he from? I'm
    sorry, Utah, somewhere out there. Who cannot defend his
    objections to the--cannot defend his objections to the
    amendment.
        So, Mr. Chairman, is a motion in order to move that we
    close down the Committee and we just vote the bill out?
        Chairman Sensenbrenner. Does the gentlewoman move the
    previous question on the bill and the amendments?
        Mr. Delahunt. Would the gentlelady--Mr. Chairman?
        Chairman Sensenbrenner. Does the gentlewoman make that
    motion?
        Mr. Delahunt. Mr. Chairman?
        Ms. Waters. The gentlewoman is prepared to make the motion.
    I hear some objections from my colleagues on this side of the
    aisle.
        Chairman Sensenbrenner. Well, then should we vote on it and
    see what----
        Ms. Waters. Well, let me just--let me, let me just get a
    nod from--where's my leader on this? Where's Mr. Conyers? Is he
    here?
        Mr. Conyers. Yes, he is here.
        Ms. Waters. Mr. Conyers, what would you have me do?
        Mr. Conyers. Well, I'd ask you to yield to me first.
        Ms. Waters. I will yield to you on this before I offer this
    motion.
        Mr. Conyers. I'd like to point out about this large number
    of reports and other documents that have been put on the table,
    the witness table, that I've counted 1, 2, 3, 4, 5, 6 new
    Members on this Committee for the 109th session. I can't recall
    how many are new Members from the 108th session. But for the
    years that this bill has been going on, to now come up in the
    first part of the 109th session and say we've been working on
    this bill for 6 or 7 or 8 years, and so therefore, we've had
    enough discussion, let's get this on with, is perhaps not the
    best congressional or legislative procedure that we can engage
    in.
        Mr. Inglis. Would the gentleman yield?
        Mr. Conyers. No. I know you're a, you're a new old Member,
    and so we'll give you the credit you deserve.
        But I think that that should be--I think that this should
    be taken into consideration. The amendment I offered earlier
    about veterans, I don't recall it being offered before. We
    haven't had any hearings in this session.
        Ms. Waters. Reclaiming my time. I think what I hear the
    Ranking Member advising me is not to offer the motion, so, Mr.
    Conyers, what I would like to do is make a suggestion to the
    Members on our side of the aisle, and that is, take up all your
    amendments, find some more, put your staffs to work so that
    they can create some more, and let's just stay here for a
    couple of days.
        Chairman Sensenbrenner. Does the gentlewoman yield back the
    balance of her time so that she can do that?
        Ms. Waters. If the gentlewoman had intended to do that, she
    would have let you know.
        Chairman Sensenbrenner. The time of the gentleman has--
    gentlewoman has expired. We're about 10 minutes away from four
    votes on the floor.
        Mr. Lungren. Mr. Chairman?
        Chairman Sensenbrenner. Who seeks recognition? The
    gentleman from California, Mr. Lungren.
        Mr. Lungren. Mr. Chairman, I'm one of those old new or new
    old Members that the Ranking Member referred to, and I consider
    very importantly my obligation to act in the best interest of
    my constituents and the people of this Nation. I must remark
    that I'm surprised that the gentlelady from California is
    yielding to the iron clad rule of a Ranking Member. I thought
    we should independently make our decisions as to what is best.
        But let me just say this. I have----
        Ms. Waters. They dare not take independence when they are
    doing what they are told.
        Mr. Lungren. I understand, I understand. I might say that I
    have been absent from this chamber for 16 years, although
    interestingly enough, one of the elevator operators noted me on
    the elevator the other day, and asked where I'd been because
    she hadn't seen me around for a little while. So I told her it
    had been 16 years.
        And I understand the frustration of the minority because I
    was there for 10 years, and I understand being on the losing
    side of votes. But, you know, it's not a charade when the votes
    are taken and you're on the losing side because there's more on
    the other side than there are on your side. That's sort of the
    result of what happened in November.
        The frustration that you feel is probably a mirror image of
    the frustration that those of us feel on this side who have
    seen this work done on a major effort to reform a Bankruptcy
    Code that drastically needs to be reformed. There's a consensus
    in this country. And to see that happen year after year after
    year and be tangled up in disputes, I mean, let's be real. The
    reason we don't have a reform of the Bankruptcy Code over the
    last number of years was because of actions taken by some in
    the other body on the abortion issue, and there was an effort
    to make sure that that social issue was driven and driven and
    driven and driven and driven, despite all of the facts, despite
    all of the necessity for us to do something with the Bankruptcy
    Code.
        And so that's why we're here now. We know that there's a
    need to have a Bankruptcy Code reform. We know that the best
    chance we have of doing that is to basically minimize any
    differences between ourselves and the Senate, particularly on a
    piece of work that has really the earmarks of Members of this
    body, Members of this Committee over the last number of years.
    As I understand it--and I stand to be corrected--this product
    has a number of amendments brought by both the majority and the
    minority over the last number of years that have been voted on
    either by recorded vote or voice vote.
        So that's what we're talking about, and I understand what
    my friends on the other side are doing, trying to make sure
    that we're put in a position of voting against the aged and the
    poor and the young and kids and veterans and everybody else.
    And we understand that's being done, and you have every right
    to do it, and I wouldn't refer to it as a charade. But the fact
    of the matter is we are either going to have a major reform of
    the Bankruptcy Code or we are not, And if we repeat what's been
    done in this Congress over the last five or six congresses, we
    will not have it, and that ill serves the American people, it
    ill serves the people I represent.
        So, yes, I am exercising some discipline not to offer
    amendments, and not to support certain amendments that I might
    otherwise wish to because I do not want to see my pursuit of
    the perfect ensure that we defeat the good. And we have made a
    good job of defeating the good in this Congress in the last
    number of years. And so I appreciate what my friends have said,
    but, frankly, it's not a charade when one makes a judgment that
    in order to actually have a bill on the President's desk that
    does a lot of good, rather than no bill once again, that we
    exercise discipline individually, and not support some things
    that we may otherwise wish to support.
        Mr. Conyers. Would my friend, Mr. Lungren yield?
        Mr. Lungren. I would be happy.
        Mr. Conyers. And I thank you.
        Mr. Lungren. And I want to say one thing. In the time that
    I was out of this chamber, whenever I visited, the Ranking
    Member was probably the most gracious in recognizing me when I
    was here, and I just wanted to say that for the record. I
    appreciate that.
        Mr. Conyers. I thank the gentleman. Would you review, at
    your leisure, sir, the organizations that are supporting the
    position that has been made clear by those of us on this side
    of the Committee room and the names of the organizations,
    lobbyists, banks and credit card organizations, commercial
    organizations that represent what you asserted was a majority
    of people. I think you'd find, my friend from California, that
    when the National Bankruptcy Conference, the American
    Bankruptcy Institute, the National Conference of Bankruptcy
    Judges, the National Association of Chapter 13 Trustees, the
    National Association of----
        Mr. Lungren. Okay, reclaiming my time, I object to----
        Chairman Sensenbrenner. The gentleman's time has expired.
        The question is on the amendment offered by the gentleman--
    --
        Mr. Delahunt. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from Massachusetts,
    Mr. Delahunt.
        Mr. Delahunt. Yes. I'm going to yield in just 30 seconds to
    the gentleman from--Schiff, who's the author of this particular
    amendment. But in response to what--the observations by Mr.
    Lungren, I mean I would suggest that the amendments that have
    been offered today deal with obvious issues and egregious
    problems that I would concluded that if there was not the
    exercise of discipline, there would be nearly unanimous
    agreement in terms of the adoption of these particular
    amendments.
        You know, I'm listening to Mr. Cannon, whom I consider a
    friend and one of the better Members of this Committee, you
    know, speak about his children and the fact that Government is
    not a good protector. And yet today we're here rejecting the
    amendment put forth by Mr. Watt and myself relative to the
    discharge, the dischargeability of debts implicating interest
    over 50 percent. I mean we haven't protected the American
    citizen today from the predatory lender. And to speak about the
    marketplace in terms of the need for credit and suggesting that
    putting some boundaries, in imposing some accountability in
    terms of the lending community, I would suggest that's not
    doing what we ought to be doing. That's not protecting the
    people, all of the people of this country.
        And that's not about the marketplace. As I said earlier,
    that is right up there with, you know, what the mafia did, we
    reject it. How--if we adopted that amendment, how could the
    other body, other body not agree to that particular amendment?
    And the reality is--and we have heard example after example
    over the course of the last three or 4 months, that that in
    fact is happening to people all over the country. With that,
    I'll yield to the gentleman from California.
        Mr. Schiff. I thank the gentleman for yielding, and somehow
    my amendment seems to have provoked a disagreement between the
    Chair of the Subcommittee and the Chair of the full Committee.
    The Chair of the Subcommittee maintaining that my amendment,
    the problem with my amendment is that it may somehow do harm,
    the Chairman maintaining that the problem with my amendment is
    that it does nothing at all, that is the existing law. The
    Chairman of the Subcommittee maintaining that the problem is
    that this issue has never been explored, the problem as
    addressed by the Chairman is that this issue and every other
    has already been explored. It can't be both.
        And the charade that my colleagues from California refers
    to--and charade is a stronger term than I would use--is not
    that you win a vote or we lose a vote. The illusion is that
    this is a markup, that this is a Committee that today is really
    deliberating the amendments and making decisions. That's the
    illusion. The reality is that the deal was made before we ever
    came into the Committee room.
        And the reason I brought up the history, at least my little
    amendment some years ago in the 107th Congress, is that this
    has been the history as long as I've been here, on this bill.
    When I offered an amendment in the 107th Congress, two
    congresses ago, I was given much the same response, which is
    this issue has already been decided before the markup, so why
    are you offering something in the markup, good idea, bad idea,
    no idea at all? Where were you when we decided this in the back
    room before we got into the Committee?
        And you know, for most of us in the minority we're not part
    of that discussion. The financial interests are part of the
    discussion, the majority is part of the discussion, the
    minority is not. My colleague from California referred to his
    years in the minority, and I can only say, as we found in 1994,
    majorities are fleeting. Ours was, yours may be as well, and it
    would be worthwhile to consider what it's like to stand in your
    colleague's shoes.
        And I would only urge that if you feel the amendment has
    weight, support it. If you feel the amendment is somehow
    superfluous, vote against it, but let's have a real markup
    where the Committee can do real work, where those of us who are
    not invited to the back room can have input in the work product
    that goes out of the Committee.
        Mr. Chairman, I yield back.
        Chairman Sensenbrenner. The time of the gentleman from
    Massachusetts has expired.
        The question is on the amendment offered by the gentleman
    from California, Mr. Schiff. Those in favor will say aye.
        Opposed, no.
        The noes appear to have it.
        Mr. Chairman, I request a recorded vote.
        Chairman Sensenbrenner. A recorded vote will be ordered.
    Those in favor of the Schiff amendment will, as your names are
    called, answer aye, those opposed no, and the clerk will call
    the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        Mr. Coble. No.
        The Clerk. Mr. Coble, no. Mr. Smith?
        [No response.]
        The Clerk. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        [No response.]
        The Clerk. Mr. Chabot?
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no. Mr. Lungren?
        [No response.]
        The Clerk. Mr. Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no. Mr. Cannon?
        Mr. Schiff. Mr. Lungren said no.
        The Clerk. Oh, I'm sorry. Mr. Lungren, no. Mr. Jenkins, no.
    Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        Mr. Bachus. No.
        The Clerk. Mr. Bachus, no. Mr. Inglis?
        Mr. Inglis. No.
        The Clerk. Mr. Inglis, no. Mr. Hostettler?
        [No response.]
        The Clerk. Mr. Green?
        Mr. Green. No.
        The Clerk. Mr. Green, no. Mr. Keller?
        [No response.]
        The Clerk. Mr. Issa?
        [No response.]
        The Clerk. Mr. Flake?
        [No response.]
        The Clerk. Mr. Pence?
        [No response.]
        The Clerk. Mr. Forbes?
        [No response.]
        The Clerk. Mr. King?
        Mr. King. No.
        The Clerk. Mr. King, no. Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no. Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no. Mr. Gohmert?
        Mr. Gohmert. No.
        The Clerk. Mr. Gohmert, no. Mr. Conyers?
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye. Mr. Berman?
        Mr. Berman. Aye.
        The Clerk. Mr. Berman, aye. Mr. Boucher?
        [No response.]
        The Clerk. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye. Mr. Scott?
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye. Mr. Watt?
        [No response.]
        The Clerk. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        [No response.]
        The Clerk. Ms. Waters?
        [No response.]
        The Clerk. Mr. Meehan?
        Mr. Meehan. Aye.
        The Clerk. Mr. Meehan, aye. Mr. Delahunt?
        Mr. Delahunt. Aye.
        The Clerk. Mr. Delahunt, aye. Mr. Wexler?
        [No response.]
        The Clerk. Mr. Weiner?
        Mr. Weiner. Aye.
        The Clerk. Mr. Weiner, aye. Mr. Schiff?
        Mr. Schiff. Aye.
        The Clerk. Mr. Schiff, aye. Ms. Sanchez?
        Ms. Sanchez. Aye.
        The Clerk. Ms. Sanchez, aye. Mr. Smith?
        Mr. Smith of Washington. Aye.
        The Clerk. Mr. Smith, aye. Mr. Van Hollen?
        Mr. Van Hollen. Aye.
        The Clerk. Mr. Van Hollen, aye. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their votes? The gentleman from Texas, Mr. Smith.
        Mr. Smith of Texas. Mr. Chairman, I vote no.
        The Clerk. Mr. Smith, no.
        Chairman Sensenbrenner. Any further Members? Gentlewoman
    from California, Ms. Waters?
        Ms. Waters. Aye.
        The Clerk. Ms. Waters, aye.
        Chairman Sensenbrenner. The clerk will report. Oh, the
    gentleman from Alabama, Mr. Bachus?
        The Clerk. Mr. Chairman, Mr. Bachus is--Mr. Bachus votes
    no, has voted no.
        Chairman Sensenbrenner. The gentleman from North Carolina,
    Mr. Watt?
        Mr. Watt. Aye. I wanted to be recorded. I wasn't recorded.
    Is that all right?
        Chairman Sensenbrenner. Of course.
        Mr. Watt. Thank you.
        The Clerk. Mr. Watt, aye.
        Chairman Sensenbrenner. Anybody else who wishes to cast or
    change their vote? Going once, going twice, and the clerk will
    report.
        The Clerk. Mr. Chairman, there are 13 ayes and 15 noes.
        Chairman Sensenbrenner. And the amendment is not agreed to.
        We have four votes on the floor. The Chair asks Members to
    return promptly after the last vote so that we can get going.
    There is a hearing that has been noticed for 2:00 p.m. in the
    Subcommittee on the Constitution. That will be postponed until
    after the markup is completed today, and the Committee stands
    recessed.
        [Recess.]
        Chairman Sensenbrenner. The Committee will be in order. A
    working quorum is present. Pending at the time of the recess
    was a motion to report the bill, Senate 256 favorably. Are
    there further amendments?
        Mr. Delahunt. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from Massachusetts.
        Mr. Delahunt. Thank you, Mr. Chairman. I have an amendment
    at the desk. It's numbered Delahunt 003.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        The Clerk. Amendment to S. 256 offered by Mr. Delahunt.
    Page 507, after line 6, insert the following (and make such
    technical and conforming changes as may be appropriate):
        Chairman Sensenbrenner. Without objection, the amendment is
    considered as read, and the gentleman from Massachusetts is
    recognized for 5 minutes.
        [The amendment follows:]

        Mr. Delahunt. I thank the Chairman, and I think my final
    comment prior to the vote was that we haven't protected
    citizens today because we will be passing a bankruptcy bill
    that while there is a focus on personal responsibility, there
    is none on corporate responsibility. But I'm also concerned
    that we're establishing, for lack or failure to address a
    particularly egregious abuse that favors the affluent in this
    country, for failure to do that we're creating two bankruptcy
    systems, one for the more affluent and one for the rest of
    America.
        So I would hope that all of my colleagues would support me
    in this change to eliminate what has been described
    euphemistically as a millionaire's loophole by addressing the
    issue of so-called asset protection trust. They are trusts that
    a person creates to shield assets for his or her own benefit.
    In other words, it's a financial planning to design for the
    more well to do who are concerned about potential bankruptcy.
    And currently there is no limit to the value of assets that can
    be shielded from bankruptcy by this particular device. The
    amendment is simple. It seeks to limit that value of assets up
    to $125,000. Now, let me emphasize that this amendment does not
    adversely affect retired Americans or take anything away from
    their retirement secretary such as IRAs, et cetera.
        It also protects charitable, educational and other trusts
    set aside for legitimate purposes. As some experts have said,
    asset protection is just another term for making one self
    judgment proof. I would suggest that it is simply abuse of the
    existing system, or better yet, it's nothing more than gaming
    the current bankruptcy system.
        This is a new development that has occurred in the last
    several years. The loophole is the result of laws that were
    adopted in five States exempting the so-called asset protection
    trusts from the Federal Bankruptcy Code. So for those that are
    interested, take note that in Alaska, Delaware, Nevada, Rhode
    Island and Utah, all have laws protecting stashed assets, and
    what's really amazing to me is you don't even have to live
    there to take advantage of them. Now, that's a good deal if you
    have a lot of money.
        So if we're truly serious about abuse, bankruptcy law
    should not allow individuals to decide how much they want to
    keep away from creditors by setting up a self-created trust to
    do exactly that. That is doing financial planning and taking
    advantage of the current system to secure advantages.
        This loophole is, in my judgment, evidence of how the
    current system provides two bankruptcy laws, one for the well
    connected and one for middle class families. Remember, more
    than half of middle class Americans who declare bankruptcy do
    so because of massive hospital bills or other catastrophic
    health care costs that they didn't expect or could not
    anticipate. Another third of all bankruptcies are the result of
    job losses. Nonetheless, the bill before this Committee today
    creates a special rule for millionaires. Whether the assets are
    villas or yachts or sport cars, investments or just suitcases
    full of cash, they're untouchable in the bankruptcy
    reorganizations of the well to do, who utilize these asset
    protection trusts, and neither creditors nor the courts can
    reach them.
        The right way to address this bill is to put forth--this
    problem rather, is to put forward a bankruptcy protection bill
    with one standard, one standard for everyone that treats all
    Americans the same regardless of income and regardless of
    circumstances. You know, what message does it send when
    Congress submits middle class debtors to a means test
    irrespective of State law, while permitting the wealthy to
    continue to place huge sums out of reach of creditors. I don't
    believe we want to do that. And we can address it here today.
        And I would hope that my colleagues on the other side of
    the aisle would listen, would reflect. I dare say if this
    particular amendment was passed and it was returned to the
    Senate, you would have your bill, and at the same time we would
    eliminate this mechanism for abuse from the system as it now is
    constituted and we could hold our heads high. I see my time has
    expired.
        Chairman Sensenbrenner. That it is.
        The gentleman from Utah.
        Mr. Cannon. Thank you, Mr. Chairman. In fact, I appreciate
    your clarifying the State from which I come.
        [Laughter.]
        Mr. Cannon. This is an issue that has been debated in the
    Senate and soundly defeated. And let me just talk a little bit
    about background here. The Bankruptcy Code, section 541,
    generally defines what assets constitute property of the
    bankruptcy estate that can be made available to pay the claims
    of creditors. It also specifies what assets do not constitute
    property of the bankruptcy estate. For example, section
    541(c)(2) provides that a trust is not property of the estate
    if the debtor's access to the trust is restricted. Thus, for
    example, a spendthrift trust, which is defined as a trust by
    the terms of the trust or by statute, a valid restraint on the
    voluntary and involuntary transfer of the interest that the
    beneficiary's imposed--pardon me for all the ``legalese'' but
    it gets to the point of where we're going I think--is
    established by the debtor before filing for bankruptcy relief,
    it would not constitute the property of the bankruptcy estate.
        Under the Restatement of Trusts, a self-settled trust is a
    trust created by a person for his or her own benefit with a
    provision restraining the voluntary or involuntary transfer of
    person's interest, so the Restatement provides that such trust
    can be pierced by the person's creditors. Nevertheless, five
    States, Alaska, Delaware, Nevada, Rhode Island and Utah, have
    enacted laws that permit their citizens to establish self-
    settled trusts where they can place their assets outside the
    reach of their creditors including their homes as permitted
    under Delaware law. The State laws provide that property placed
    in such trust cannot be reached by creditors with exceptions
    that vary by State. Some except child, spousal support
    claimants and persons who suffered injury or death as a result
    of the settler's actions, for example.
        It also appears that fraudulent transfers made by the
    settler to an asset protection trust may be avoided under
    applicable State laws as well as pursuant to Bankruptcy Code
    section 548. Alaska appears to allow such transfers to be set
    aside upon the showing of actual fraud. Delaware, on the other
    hand, appears to allow such transfers to be set aside based on
    either actual or constructive fraud, including a transfer of
    property for less than reasonably equivalent value which is
    similar to Bankruptcy Code section 548.
        The bill as amended closes the self-settled trust loophole.
    An amendment by Senator Talent authorizing the bankruptcy
    trustee to avoid any transfer of property by a debtor to a
    self-settled trust made within 10 years preceding the filing--
    which is the same period that the amendment suggests, by the
    way--preceding the filing of the debtor's bankruptcy case if
    the debtor is a beneficiary of such trust, and the debtor made
    such transfer with actual intent to hinder, delay or defraud a
    creditor.
        So what is an asset protection trust or self-settled trust?
    Neither the Internal Revenue Code nor the entire United States
    Code contain any reference to either of these terms. This is a
    matter of State law. To the extent that a--or an asset
    protection trust is a creature of State law, then this issue
    inherently involves States rights. The States should be able to
    determine for themselves what property their citizens can
    protect from the claims of creditors. This is not only implicit
    in the homestead exemption, but with regard to the status of
    all types of items of property including household goods and
    furnishings, livestock, family Bibles and church pews is
    determined under State law to be exempt property.
        For example, according to CRS, Delaware only gives its
    citizens $5,000 homestead exemption, while Utahans only have a
    $10,000 homestead exemption. Why should these States be
    allowed--why shouldn't these States be allowed to have their
    citizens provide for their retirement nest egg by placing their
    assets in a trust fund, when in other States like Texas you
    have a huge homestead exemption?
        States that have authorized asset protection trusts appear
    to be extremely supportive of them. Alaska's legislature
    announced that it had hoped to become the financial service
    center for the world as s result of authorizing such trusts. So
    why do we have such outrage? Senator Kennedy successfully had a
    provision included in the pending bankruptcy legislation,
    section 224, that protects up to $1 million in IRAs and other
    similar pension plans. An asset protection trust may be the
    only way for some individuals who live in a State with a
    nominal homestead exemption and no IRA exemption to protect
    assets from creditors. The issue should be studied and
    determined. We need to work on this. The fact is if we're going
    to move a bill out today, this is an issue that has been dealt
    with, has been debated, has been argued. It's been considered.
    The bill has been amended to include the basic provisions here,
    and I urge my colleagues to vote no on the amendment.
        Thank you, Mr. Chairman. I yield back.
        Mr. Watt. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from North Carolina.
        Mr. Watt. I move to strike the last word.
        Chairman Sensenbrenner. The gentleman's recognized for 5
    minutes.
        Mr. Watt. Mr. Chairman and Members, all of what Mr. Cannon
    said would probably be a lot more rational if the underlying
    bill didn't set a national standard for homesteads too, and so
    we set a national standard for homestead exemptions at
    $125,000, yet what he's saying is that people ought to be able
    to be allowed to pour all of their non-homestead assets into
    these trusts and have them exempt because it's a matter of
    State law.
        That is just absolutely inconsistent. I mean if you're
    going to have a national standard on homestead exemptions, it
    seems to me rational that you would have a national standard on
    non-homestead assets, and I think that's the only thing that
    Mr. Delahunt's trying to get at here. It is interesting that
    when some of us were trying to protect States' rights in many,
    many, many other contexts, it didn't mean a hill of beans to
    the people on this Committee. Yet when it's convenient to hide
    behind States' rights, all of a sudden we're out here talking
    about States' rights again, and you know, I thought we had this
    debate on the homestead. We resolved this debate on the
    homestead. So why would we have a different standard for non-
    homestead assets than we have for homestead assets?
        I for the life of me can't understand that. So I would just
    encourage my colleagues to at least try to be consistent about
    this stuff, and encourage them to support this amendment. And I
    yield back.
        Chairman Sensenbrenner. The question is on the amendment
    offered by the gentleman from Massachusetts, Mr. Delahunt.
    Those in favor will say aye.
        Opposed, no.
        The noes appear to have it. The noes have it. The
    amendment's not agreed to.
        Are there further amendments?
        Ms. Jackson Lee. Mr. Chairman?
        Chairman Sensenbrenner. A recorded vote is ordered. Those
    in favor of the Delahunt amendment will, as your name are
    called, answer aye. Those opposed, no, and the clerk will call
    the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        Mr. Coble. No.
        The Clerk. Mr. Coble, no. Mr. Smith?
        [No response.]
        The Clerk. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        [No response.]
        The Clerk. Mr. Chabot?
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no. Mr. Lungren?
        Mr. Lungren. No.
        The Clerk. Mr. Lungren, no. Mr. Jenkins?
        [No response.]
        The Clerk. Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        [No response.]
        The Clerk. Mr. Inglis?
        [No response.]
        The Clerk. Mr. Hostettler?
        Mr. Hostettler. No.
        The Clerk. Mr. Hostettler, no. Mr. Green?
        [No response.]
        The Clerk. Mr. Keller?
        [No response.]
        The Clerk. Mr. Issa?
        [No response.]
        The Clerk. Mr. Flake?
        Mr. Flake. No.
        The Clerk. Mr. Flake, no. Mr. Pence?
        [No response.]
        The Clerk. Mr. Forbes?
        Mr. Forbes. No.
        The Clerk. Mr. Forbes, no. Mr. King?
        Mr. King. No.
        The Clerk. Mr. King, no. Mr. Feeney?
        [No response.]
        The Clerk. Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no. Mr. Gohmert?
        [No response.]
        The Clerk. Mr. Conyers?
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye. Mr. Berman?
        Mr. Berman. Aye.
        The Clerk. Mr. Berman, aye. Mr. Boucher?
        Mr. Boucher. No.
        The Clerk. Mr. Boucher, no. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye. Mr. Scott?
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye. Mr. Watt?
        [No response.]
        The Clerk. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        Ms. Jackson Lee. Aye.
        The Clerk. Ms. Jackson Lee, aye. Ms. Waters?
        Ms. Waters. Aye.
        The Clerk. Ms. Waters, aye. Mr. Meehan?
        [No response.]
        The Clerk. Mr. Delahunt?
        Mr. Delahunt. Aye.
        The Clerk. Mr. Delahunt, aye. Mr. Wexler?
        [No response.]
        The Clerk. Mr. Weiner?
        Mr. Weiner. Yes.
        The Clerk. Mr. Weiner, aye. Mr. Schiff?
        Mr. Schiff. Aye.
        The Clerk. Mr. Schiff, aye. Ms. Sanchez?
        [No response.]
        The Clerk. Mr. Smith?
        [No response.]
        The Clerk. Mr. Van Hollen?
        [No response.]
        The Clerk. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Members in the chamber who wish to
    cast or change their votes? Gentleman from Florida, Mr. Keller?
        Mr. Keller. No.
        The Clerk. Mr. Keller, no.
        Chairman Sensenbrenner. Gentleman from Tennessee, Mr.
    Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no.
        Chairman Sensenbrenner. Gentleman from Florida, Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no.
        Chairman Sensenbrenner. Gentleman from North Carolina, Mr.
    Watt?
        Mr. Watt. I reported. I shouted out from the back and I
    wasn't clear whether she got it.
        The Clerk. Mr. Chairman, I did not have Mr. Watt.
        Mr. Watt. Aye.
        The Clerk. Mr. Watt, aye.
        Chairman Sensenbrenner. Further Members in the chamber who
    wish to cast or change their votes? If not, the clerk will
    report.
        The Clerk. Mr. Chairman, there are 10 ayes and 15 noes.
        Chairman Sensenbrenner. And the amendment is not agreed to.
    Are there further amendments?
        Mr. Berman. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from California, Mr.
    Berman.
        Mr. Berman. Mr. Chairman, I have an amendment, Berman-
    Meehan amendment at the desk.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        The Clerk. Amendment to S. 256 offered by Mr. Berman and
    Mr. Meehan. Page 194, after line 2, insert the following (and
    make such technical and conforming changes as may be
    appropriate): section 322----
        Mr. Berman. Mr. Chairman, I ask unanimous consent----
        Chairman Sensenbrenner. The clerk will continue to read
    until some of the Members get the amendment.
        The Clerk. Exemption for medically distressed debtors.
    Section 522 of title XI, United States Code as amended by
    sections 224, 308 and 322, is amended by adding at the end the
    following: R(1), for a debtor who is a medically distressed
    debtor, if the debtor elects to exempt property----
        Chairman Sensenbrenner. Without objection, the amendment is
    considered as read and the gentleman from California will be
    recognized for 5 minutes.
        [The amendment follows:]

        Mr. Berman. Thank you, Mr. Chairman.
        Basically this is about creating a uniform Federal floor
    for homestead exemptions of $150,000 or less, $150,000
    basically for medically distressed debtors. The statistics
    clearly point out that there have been large increases in
    medical debt and bankruptcy cases, caused by medical debts,
    coupled with significant increases in real estate prices, and
    that has led to a new and rapidly-growing problem ignored by
    this bill.
        This amendment would create a uniform Federal floor for
    homestead exemptions of $150,000, applicable only to debtors
    who have had very substantial medical debts or a very
    substantial loss of income due to medical problems, losses of
    over 50 percent of household income. This amendment would
    simply permit those homeowners who have suffered serious
    medical problems under the standards of this bill, with losses
    again over 50 percent of household income to file for
    bankruptcy without having to give us homes where they have
    $150,000 or less of equity.
        The notion of forcing people out of their homes after
    illnesses or accidents is made more outrageous by the fact that
    this bill does nothing to deal with the handful of States where
    debtors of all kinds, famous sports figures, physicians who
    drop their medical malpractice insurance, real estate tycoons,
    can save millions of dollars in homestead. Americans,
    particularly those who face serious medical problems, are
    entitled to a more evenhanded justice. Families who face
    insurmountable debt problems following serious medical problems
    are confronted with the fact that they can obtain relief from
    their debts and bankruptcy only if they give up their homes. In
    nearly half of all States homestead exemptions are under
    $25,000. There are no escapes for families with high debts and
    home equity that exceeds that for instance very low homestead
    exemption. In a Chapter 7 bankruptcy case a family with equity
    greater than the State exemption limits, which in some States
    are under $10,000, must give up its home. In Chapter 13 the
    family must pay the creditors the amount equal to the greater
    equity which it can usually not afford. A family should not
    have to lose its home to obtain relief from debts caused by
    serious medical problems.
        The amount of equity a homeowner can protect in bankruptcy
    has not kept up with the rise in home prices. While the value
    of even modest homes climbs in some areas, the protection of
    the law does not, leaving even people of modest means with a
    choice between a home or discharging medical debts. This falls
    particularly hard on elderly and disabled homeowners who often
    live solely on Social Security benefits. With incomes of 800 or
    $1,000 per month they could live in their current homes which
    may be paid off or have low monthly costs, but if they are
    forced out of these homes, they cannot afford to rent a decent
    place to live, and in fact, these homeowners would have no
    bankruptcy relief available to them.
        The purpose of this amendment is to rectify it.
        Mr. Conyers. Would the gentleman yield?
        Mr. Berman. I'd be happy to yield.
        Mr. Conyers. I want to commend the gentleman for this
    amendment because it specifically covers the problem of people
    with severe health care, and the recent study in bankruptcy
    revealed that one half of the people forced into bankruptcy is
    because of medical bills or immediate hospital costs, and I
    wanted the gentleman to know that the gentlelady from
    California, Zoe Lofgren, is entirely supportive of this
    amendment and will submit her own statement in support of it.
    She's unduly delayed and in----
        Chairman Sensenbrenner. Without objection, the statement of
    Ms. Lofgren will appear in the record at this time.
        [The prepared statement of Ms. Lofgren follows:]

     Prepared Statement of the Honorable Zoe Lofgren, a Representative in
                     Congress from the State of California

        Many of us have loved ones who have battled a grave illness or
    serious injury. If you've ever had the misfortune of being in that
    situation, you know that it is an incredibly stressful experience, both
    on the mind and the pocketbook. But incredibly, this bill chooses to
    treat those families the same as spendthrifts.
        A recent study conducted by professors at Harvard Medical and Law
    Schools demonstrated that about half of all personal bankruptcies today
    can be traced to severe medical illnesses or injuries. Among those,
    average unreimbursed medical costs totaled nearly $12,000.
    Nevertheless, the study found that these families did everything they
    could to pay their medical bills and avoid bankruptcy. One in five
    skipped meals. One-third had their electricity cut off. Almost half
    lost their phone service.
        Incredibly, these families also cut back on needed medications. In
    fact, half went without needed prescriptions, and a full 60% went
    without a needed doctor appointment.
        I cannot understand why the proponents of this bill want to treat
    these families the same as irresponsible spendthrifts. They are hard-
    working, middle class Americans who have had the misfortune of facing
    illness without adequate medical insurance. Yet this bill treats them
    the same as those who went on a spending spree. I think we should
    distinguish between a parent who has to pay for their child's cancer
    treatments and a 22-year-old who bought too many plasma screen
    televisions.
        I had planned to offer an amendment today that would have exempted
    from the harsh means test those families facing bankruptcy due to a
    serious medical hardship. Unfortunately, I was not able to do so
    because of a conflicting commitment. However, I have no doubt that the
    Majority would have rejected that amendment just as they rejected Rep.
    Berman and Rep. Meehan's medical homestead amendment and every other
    reasonable amendment offered to this bill.
        I am extremely disappointed that the Committee chose to abrogate
    its responsibilities and ignore families struggling to make ends meet
    in the face of a medical crisis. Unfortunately, once again, the power
    and influence of large corporations took precedence over average
    Americans in the Republican-controlled Congress.

        Mr. Conyers. Thank you, Mr. Chairman.
        Mr. Berman. Mr. Chairman, I yield back.
        Chairman Sensenbrenner. Gentleman from Utah. Gentleman from
    Utah.
        Mr. Cannon. Thank you, Mr. Chairman.
        Let me just begin by saying we are, everyone on this
    Committee is extraordinarily aware of the particular burden
    that medical problems cause and the resulting bankruptcies. But
    if I could clarify a couple of things, Mr. Berman, by asking a
    couple of questions.
        As I read this, this overrides State law and creates a new
    Federal exemption for people that have medical emergencies that
    cause bankruptcy; is that right?
        Mr. Berman. And I amends the Federal Bankruptcy Bill that
    will become Federal bankruptcy law, to provide a $150,000
    equity exemptions so that people--for those people who have
    over 50 percent of their income lost because of medical bills
    or because of an injury that costs----
        Mr. Cannon. Right. But that would preempt State laws in
    those cases that have a different homestead?
        Mr. Berman. For purposes of bankruptcy, not for purposes of
    other issues, just for purposes of bankruptcy, which is a
    Federal issue.
        Mr. Cannon. Certainly bankruptcy is, but bankruptcy has
    always recognized homestead as a State issue, and the effect of
    this, if I understand it--I'm just looking it over now--but the
    effect would be that a couple filing jointly for bankruptcy
    would have a $300,000 exemption as I read your language.
        Mr. Berman. $150,000.
        Mr. Cannon. But if you had a joint filing would that not
    double to 300,000?
        Mr. Berman. No, no.
        Mr. Cannon. Can you help me with where the language is that
    makes it the single, because you talk about the debtor's
    aggregate interest.
        Mr. Berman. You have to get back to the base bill. Why
    don't we do it the other way around? Why don't you show me why
    it would?
        Mr. Cannon. Okay. We'll----
        Mr. Berman. You got a base bill----
        Mr. Cannon. I actually don't think I have the burden. It
    seems to me--and I'll let just the Members of the Committee
    make the judgment--that, as I read it very quickly here----
        Mr. Berman. It deals with household and the home equity.
    It's not, in other words it's about----
        Mr. Cannon. Reclaiming my time, we disagree and we'll just
    have to have people exercise their judgment on that.
        It also--you know, people sometimes get ill and then get
    healthy and they overcome their problems.
        Mr. Berman. Yeah, that's a real problem.
        Mr. Cannon. I don't see how we--well, it is a wonderful
    thing that happens I guess occasionally and maybe even often.
    We agree, I might say, that home prices have gone up, but the
    States have the responsibility under the homestead relationship
    with the Bankruptcy Act to deal with that.
        And just I'd like to submit for the record, Mr. Chairman, a
    letter to the Honorable Charles E. Grassley, from the U.S.
    Department of Justice, signed by Mr. Will Moschella, that
    relates to the study that Mr. Conyers referred to, and if I
    could just read one paragraph of that----
        Chairman Sensenbrenner. Without objection. The letter will
    be included in the record.
        [The material referred to follows:]

        Mr. Cannon. ``In general, the data describing medical-
    related expenses contained in official documents filed by
    chapter 7 debtors reveal that slightly more than 5 percent of
    their general unsecured debt is medical-related. The conclusion
    that almost 50 percent of consumer bankruptcies are `medical
    related' requires a broad definition and generally is not
    substantiated by the official documents filed by debtors.''
        So I----
        Mr. Berman. Will the gentleman yield?
        Mr. Cannon. Yes.
        Mr. Berman. Two points. One, although the gentleman is
    wrong on the larger issue, he, it turns out, is correct. If
    they are filing jointly, then each gets the $150,000 exemption,
    so I wanted to clarify that.
        And who wrote that report? That's a very familiar name.
        Mr. Cannon. Yes. I think everybody here would know Will
    Moschella----
        Mr. Berman. Used to work on the majority side, right?
        Mr. Cannon. He certainly, because we have a Republican
    President who has--who names people to political positions, but
    I think everyone here would also recognize that Mr. Moschella
    is a very thoughtful and reasonable person and he's gone down
    on record, so if you disagree with the conclusion you might
    want to check with him.
        Mr. Smith, did you want----
        Mr. Smith of Texas. If the gentleman will yield just for a
    minute.
        Mr. Chairman, I just wanted to add a couple of other
    points. One is that this amendment was offered in the Senate
    last week and was defeated on a bipartisan vote of 58-39, so
    that's a good example of an amendment that received bipartisan
    opposition. Second of all, it does override States' rights. And
    third of all, as the Chairman has pointed out repeatedly today,
    this fractures the very closely crafted compromise that existed
    to try to get this bill through today.
        Mr. Berman. Does the gentleman promise----
        Mr. Smith of Texas. And for those reasons I'd oppose the
    amendment as well.
        Mr. Cannon. Reclaiming my time I urge my colleagues to vote
    no on the----
        Mr. Delahunt. Mr. Chairman?
        Chairman Sensenbrenner. The time of the gentleman has
    expired. Gentleman from Massachusetts.
        Mr. Delahunt. I move to strike the last word.
        Chairman Sensenbrenner. The gentleman is recognized for 5
    minutes.
        Mr. Delahunt. I just can't allow that comment about this
    overrules States' rights. I think it was my friend from Texas
    that made that comment, when over the course of the past
    months, years, this Committee has preempted State law in terms
    of torts, securities litigation, they want to do it in terms of
    medical malpractice. They want to do it in terms of whatever--
    class actions. I mean with all due respect to my friend from
    Texas, give me a break. I mean that argument, that dog just
    simply doesn't hunt, as the Chairman of the Crime Subcommittee
    would understand.
        Mr. Watt. Would the gentleman yield?
        Mr. Delahunt. And I'll yield to my friend from North
    Carolina.
        Mr. Watt. Isn't it true that this bill already sets a
    national standard for bankruptcy--for homesteads? It doesn't do
    that?
        Mr. Berman. No. It allows----
        Mr. Watt. It caps it, doesn't it?
        Mr. Berman. No, it allow--well, it does in certain
    situations, but basically----
        Mr. Watt. It caps it I mean.
        Mr. Berman. In limited situations, but it allows States
    with enormous homestead exemptions that allow wealthy people to
    avoid paying off their debts and still keep huge mansions in
    those States like I think Texas, to continue to do so.
        It's just another one of the deficiencies in a bill which I
    actually am happy is being pushed through in the fashion that
    it is, because it--in a perverse way it reminds me of why I'm a
    Democrat.
        Mr. Delahunt. The time is still mine, and----
        Ms. Jackson Lee. Mr. Delahunt?
        Mr. Delahunt. I could always count on the gentlelady from
    Texas, my friend, Sheila Jackson Lee. I yield to her what time
    I have left.
        Ms. Jackson Lee. You certainly can, Mr. Delahunt. Thank you
    and you were amazed at the comment regarding States' rights.
    I'm amazed at the comments that seem to suggest a particularly
    orchestrated process that we can't do anything to improve the
    legislation because there's some sort of external commitment to
    riding the backs of the Senate. And I've always had the
    understanding that these are two distinct bodies with two
    distinct lines of reasoning. And if this is all that we're
    doing in the Judiciary Committee, then shame on us again.
        I think the gentleman's amendment is a very thoughtful
    amendment, and the reason is it is well documented that the
    middle class are most burdened in the instances of bankruptcies
    by catastrophic illnesses. It is clear.
        Now, we can either concede today and ignore this amendment,
    and say that what we want to do is to put every family out in
    the streets, and continue then the pathway of destruction, or
    we can be reasoned and establish ourselves as an independent
    thinking body and support Mr. Berman's amendment. I think Mr.
    Meehan--I'm not sure--is that on that amendment.
        Mr. Meehan. Yes.
        Ms. Jackson Lee. And make a very good point about what this
    bill should be standing for. It's helping people rebuild their
    lives, not helping people destroy their lives.
        With that, I yield to the distinguished gentleman his time
    if he desires to have it. Mr. Delahunt, I yield back to you if
    you desire to have it.
        Chairman Sensenbrenner. The question is on the amendment.
        Mr. Meehan. Mr. Chairman, I move to strike the last word.
        Chairman Sensenbrenner. Who is moving?
        Mr. Meehan. It's me.
        Chairman Sensenbrenner. Oh, the other gentleman from
    Massachusetts is recognized for 5 minutes.
        Mr. Meehan. I am also a cosponsor of this amendment, and I
    was out at another hearing when the amendment was brought up. I
    want to correct something that Mr. Smith said, and this is not
    the same amendment that was debated in the Senate. In the
    Senate it was a quarter, the standard was a quarter of the
    income on medical bills. This is one-half a person's income
    towards medical bills.
        We're saying that medical costs are not spending sprees,
    not personal irresponsibility, but the single largest causes of
    bankruptcy. About half of the filers cite medical costs as a
    major factor of their bankruptcy. The average unreimbursed
    medical costs were $12,000. 45 million people in America go
    without health insurance every day. They are one accident or
    one illness away from financial ruin. But as this study found
    done by Harvard University, most people whose health care costs
    drove them to bankruptcy were uninsured but still had thousands
    of dollars in medical bills.
        I believe that the Congress's failure to expand health care
    coverage in America and bring down health care costs are one of
    the reasons why medical bankruptcies have increased 2,200
    percent since 1980. This amendment inserts a teeny bit of
    compassion and common sense to this bill. For debtors who are
    medically distressed, it provides a modest homestead exemption.
    Under this bill wealthy people can move to States with
    unlimited homestead exemptions, declare bankruptcy and shield
    their assets, even if they have mansions. But a family who has
    someone who falls ill can't afford the hospital bills, would
    lose their modest home, and that's entirely unfair. This
    amendment is narrowly tailored to apply only to--with majority
    medical expense.
        To be defined here as medically distressed, you either have
    to be out of work for more than a month due to an illness in
    your family, or have medical bills that are more than 50
    percent of your household income, which is different than the
    Senate bill. The amendment gives a reasonable household
    exemption of $150,000 for medically distressed debtors.
        Nearly half of all States, the homestead exemption is less
    than 25,000, and several States don't have any homestead
    exemption. So this bill sets the floor at 150,000 in home
    equity, and despite what proponents of this bill would like to
    suggest, most people who file for bankruptcy because of medical
    expenses are not irresponsible. They're families who have had
    complications with the birth of a child. They're working men
    and women caring for a sick spouse or an elderly parent, or
    they're seniors who are living on a fixed Social Security
    check.
        So I support this amendment, would urge my colleagues to
    support the amendment. And I yield back the balance of my time,
    Mr. Chairman.
        Chairman Sensenbrenner. The question is on the amendment
    offered by the gentleman from California, Mr. Berman. Those in
    favor will say aye.
        Opposed, no.
        The noes appear to have it. rollcall is ordered. All those
    in favor of the Berman amendment will as your names are called
    answer aye, those opposed no, and the clerk will call the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        Mr. Coble. No.
        The Clerk. Mr. Coble, no. Mr. Smith?
        [No response.]
        The Clerk. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        [No response.]
        The Clerk. Mr. Chabot?
        [No response.]
        The Clerk. Mr. Lungren?
        Mr. Lungren. No.
        The Clerk. Mr. Lungren, no. Mr. Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no. Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        Mr. Bachus. No.
        The Clerk. Mr. Bachus, no. Mr. Inglis?
        Mr. Inglis. No.
        The Clerk. Mr. Inglis, no. Mr. Hostettler?
        Mr. Hostettler. No.
        The Clerk. Mr. Hostettler, no. Mr. Green?
        [No response.]
        The Clerk. Mr. Keller?
        Mr. Keller. No.
        The Clerk. Mr. Keller, no. Mr. Issa?
        Mr. Issa. No.
        The Clerk. Mr. Issa, no. Mr. Flake?
        Mr. Flake. No.
        The Clerk. Mr. Flake, no. Mr. Pence?
        [No response.]
        The Clerk. Mr. Forbes?
        Mr. Forbes. No.
        The Clerk. Mr. Forbes, no. Mr. King?
        Mr. King. No.
        The Clerk. Mr. King, no. Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no. Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no. Mr. Gohmert?
        [No response.]
        The Clerk. Mr. Conyers?
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye. Mr. Berman?
        Mr. Berman. Aye.
        The Clerk. Mr. Berman, aye. Mr. Boucher?
        [No response.]
        The Clerk. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye.
        [Pause.]
        The Clerk. Oh. Mr. Boucher, no. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye. Mr. Scott?
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye. Mr. Watt?
        Mr. Watt. Aye.
        The Clerk. Mr. Watt, aye. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        Ms. Jackson Lee. Aye.
        The Clerk. Ms. Jackson Lee, aye. Ms. Waters?
        Ms. Waters. Aye.
        The Clerk. Ms. Waters, aye. Mr. Meehan?
        Mr. Meehan. Aye.
        The Clerk. Mr. Meehan, aye. Mr. Delahunt?
        Mr. Delahunt. Aye.
        The Clerk. Mr. Delahunt, aye. Mr. Wexler?
        Mr. Wexler. Aye.
        The Clerk. Mr. Wexler, aye. Mr. Weiner?
        Mr. Weiner. Aye.
        The Clerk. Mr. Weiner, aye. Mr. Schiff?
        Mr. Schiff. Aye.
        The Clerk. Mr. Schiff, aye. Ms. Sanchez?
        [No response.]
        The Clerk. Mr. Smith?
        [No response.]
        The Clerk. Mr. Van Hollen?
        Mr. Van Hollen. Aye.
        The Clerk. Mr. Van Hollen, aye. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Members in the chamber who wish to
    cast or change their vote? Gentleman from Wisconsin, Mr. Green?
        Mr. Green. No.
        The Clerk. Mr. Green, no.
        Chairman Sensenbrenner. Further Members in the chamber who
    wish to cast or change their vote? If not, the clerk will
    report.
        The Clerk. Mr. Chairman, there are 13 ayes and 18 noes.
        Chairman Sensenbrenner. And the amendment is not agreed to.
    Are there further amendments? The gentleman from New York, Mr.
    Nadler.
        Mr. Nadler. Mr. Chairman, I have an amendment at the desk.
    We'll try again on the redrafted amendment No. 1 that hopefully
    will satisfy Mr.----
        Chairman Sensenbrenner. The clerk will report.
        Mr. Nadler.--Cannon.
        Chairman Sensenbrenner. Second attempt.
        The Clerk. Amendment to S. 256 offered by Mr. Nadler. Page
    210, after line 13, insert the following (and make such
    technical and conforming----
        Chairman Sensenbrenner. Without objection, the amendment is
    considered as read and the gentleman from New York will be
    recognized for 5 minutes.
        [The amendment follows:]

        Mr. Nadler. Thank you. Mr. Chairman, I'll be brief. I
    started describing this amendment earlier before the point of
    order.
        This amendment would make debts arising from civil rights
    violations nondischargeable. It includes in the amendment the
    civil rights violations listed in the Federal Criminal Code,
    any civil judgment arising under civil rights violation
    including a 1983 violation action that is an action for
    violation of civil rights under color of law, or an intentional
    violation of a valid court order enforcing civil rights law
    described in the amendment.
        It also includes offenses under State law that consists of
    conduct that would be a civil rights crime described in the
    Federal Criminal Code.
        Finally, it repairs an omission in the current code that
    makes fines and restitution ordered under the Federal Criminal
    Code nondischargeable, but not under State law. My amendment
    would clarify that that includes fines and restitution ordered
    under State law.
        So if you violate the right to vote, the right to work, the
    rights of a person wearing the uniform of the United States
    military, the right to the free exercise of religion, freedom
    of--access to clinic entrances or any other federally protected
    rights, you will not be able to abuse the Bankruptcy Code
    either to escape your debts or to force your victims to chase
    you across the country through bankruptcy courts trying to
    collect lawful judgments.
        We know that that is now a common strategy, and even where
    it fails, the uncertainty in the law gives tort fees as the
    opportunity to inflict more damage and more expense on the
    victims through abuse of the Bankruptcy Code.
        Mr. Chairman, this bill, the underlying bill greatly
    expands the kinds of debts that are deemed nondischargeable. It
    makes nondischargeable even small cash advances on credit cards
    prior to the filing of a case. It may not be enough money to
    keep your kids in Huggies, but it's enough to be
    nondischargeable. We're protecting the helpless credit card
    companies. If you use your credit card to pay your taxes
    online, something the IRS has been urging us to do for years,
    that would become a nondischargeable debt. We seem to have
    found ways to make all sorts of debts nondischargeable in this
    bill.
        I would hope that with this amendment we could go on record
    and make the law crystal clear that if all these other things
    can become nondischargeable, then debts incurred as a result of
    the deliberate violations of Federal or State law to violate
    people's civil rights should also be nondischargeable so that
    you cannot violate people's civil rights and use the bankruptcy
    courts to evade your responsibilities under the law.
        Thank you, Mr. Chairman.
        Mr. Chabot. Mr. Chairman?
        Chairman Sensenbrenner. Gentleman from Ohio, Mr. Chabot.
        Mr. Chabot. I move to strike the last word.
        Chairman Sensenbrenner. The gentleman's recognized for 5
    minutes.
        Mr. Chabot. Thank you, Mr. Chairman. I won't use the 5
    minutes. My colleague indicated that he wouldn't be real
    extensive in his arguments, so I won't be either. I'll keep
    mine brief.
        I would rise in opposition to this amendment. This really,
    this amendment is just a revised version of the Schumer
    amendment, which has been responsible for scuttling the
    bankruptcy--passage of the entire bankruptcy bill for some time
    now. And it was defeated, this amendment was defeated in the
    Senate last week by a vote of 46 yeas and 53 noes.
        The Bankruptcy Code already prevents the discharge of most
    types of debts resulting from violent or destructive
    activities. Current law already clearly applies to willful and
    malicious acts of violence committed by, for example, pro-life
    activists at an abortion clinic, that would result in injury
    either to a person or to property. In fact, there is no
    reported case specifying otherwise. CRS, for example, has
    stated that the specific intent requirement necessary to
    establish a violation of face would arise from behavior
    comparable to an intentional tort, and thus would be
    nondischargeable under 11 USC 532(a)(6). That provides that a
    debt for willful and malicious injury by a debtor to another
    entity or to the property of another entity is
    nondischargeable.
        So in other words, willful or wanton acts, malicious acts,
    would already be nondischargeable under the Bankruptcy Code, so
    this amendment is unnecessary and really adds nothing. And as I
    indicated originally, this was the very amendment which
    scuttled the passage of this very important legislation before,
    so I would urge my colleagues to vote no.
        Mr. Berman. Mr. Chairman?
        Chairman Sensenbrenner. Gentleman yield back?
        Mr. Berman. Mr. Chairman?
        Chairman Sensenbrenner. Gentleman from Ohio yield back?
    Gentleman from Ohio, do you yield back?
        Mr. Chabot. I yield back, yes.
        Mr. Berman. Mr. Chairman?
        Chairman Sensenbrenner. Gentleman from California.
        Mr. Berman. Move to strike the last word.
        Chairman Sensenbrenner. The gentleman's recognized for 5
    minutes.
        Mr. Berman. Yield to the gentleman from New York.
        Mr. Nadler. Thank you, Mr. Chairman.
        Mr. Chairman, the remarks that we just heard from the
    distinguished Chairman of the Constitution Subcommittee really
    don't bear on this amendment. It is true the current code makes
    nondischargeable malicious and violent torts, but we're not
    talking necessarily about malicious and violent torts. We're
    talking about deliberate violations of civil rights of all
    kinds. And, yes, this would include within it some of what the
    Schumer amendment in the Senate--which I would remind the
    distinguished Chairman originated in this Committee a number of
    years ago as the Nadler amendment before they took it up in the
    Senate--would cover.
        But this considerably broader and it is saying that if you
    deliberately the civil rights of someone else and there is a--
    and violates the law, the Federal or State law, and there's a
    judgment against you, you cannot abuse the bankruptcy courts to
    get rid of that judgment.
        Now, the argument that this scuttles the bill, that's not
    an argument to the policy. The bill ought to say if credit
    cards debt incurred to pay your taxes on line is
    nondischargeable, then certainly you shouldn't be able to get
    rid of a court judgment against you for a deliberate offense
    against someone else's civil rights by use of the Bankruptcy
    Code.
        The principle is sound, and we are to improve the bill,
    which is a bad enough bill, but make it a little better, by
    adopting this amendment.
        I yield back. I thank the gentleman and I yield back to
    him.
        Chairman Sensenbrenner. The gentleman from California yield
    back? The time belongs to the gentleman from California.
        The question is on the Berman--excuse me--the Nadler
    amendment. Now, this is the Nadler amendment, it's not the
    Schumer amendment. Those in favor will say aye.
        Opposed, no?
        The noes appear to have it. The noes--okay, a rollcall will
    be ordered. Those in favor of the Nadler amendment will as your
    names are called answer aye, those opposed no, and the clerk
    will call the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        Mr. Coble. No.
        The Clerk. Mr. Coble, no. Mr. Smith?
        Mr. Smith of Texas. No.
        The Clerk. Mr. Smith, no. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        [No response.]
        The Clerk. Mr. Chabot?
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no. Mr. Lungren?
        Mr. Lungren. No.
        The Clerk. Mr. Lungren, no. Mr. Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no. Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        Mr. Bachus. No.
        The Clerk. Mr. Bachus, no. Mr. Inglis?
        [No response.]
        The Clerk. Mr. Hostettler?
        Mr. Hostettler. No.
        The Clerk. Mr. Hostettler, no. Mr. Green?
        [No response.]
        The Clerk. Mr. Keller?
        [No response.]
        The Clerk. Mr. Issa?
        [No response.]
        The Clerk. Mr. Flake?
        [No response.]
        The Clerk. Mr. Pence?
        [No response.]
        The Clerk. Mr. Forbes?
        Mr. Forbes. No.
        The Clerk. Mr. Forbes, no. Mr. King?
        Mr. King. No.
        The Clerk. Mr. King, no. Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no. Mr. Franks?
        [No response.]
        The Clerk. Mr. Gohmert?
        Mr. Gohmert. No.
        The Clerk. Mr. Gohmert, no. Mr. Conyers?
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye. Mr. Berman?
        Mr. Berman. Aye.
        The Clerk. Mr. Berman, aye. Mr. Boucher?
        Mr. Boucher. No.
        The Clerk. Mr. Boucher, no. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye. Mr. Scott?
        [No response.]
        The Clerk. Mr. Watt?
        Mr. Watt. Aye.
        The Clerk. Mr. Watt, aye. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        [No response.]
        The Clerk. Ms. Waters?
        [No response.]
        The Clerk. Mr. Meehan?
        Mr. Meehan. Aye.
        The Clerk. Mr. Meehan, aye. Mr. Delahunt?
        Mr. Delahunt. Aye.
        The Clerk. Mr. Delahunt, aye. Mr. Wexler?
        Mr. Wexler. Aye.
        The Clerk. Mr. Wexler, aye. Mr. Weiner?
        Mr. Weiner. Aye.
        The Clerk. Mr. Weiner, aye. Mr. Schiff?
        Mr. Schiff. Aye.
        The Clerk. Mr. Schiff, aye. Ms. Sanchez?
        [No response.]
        The Clerk. Mr. Smith?
        [No response.]
        The Clerk. Mr. Van Hollen?
        [No response.]
        The Clerk. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Members who wish to cast or change
    their vote? The gentleman from Wisconsin, Mr. Green.
        Mr. Green. No.
        The Clerk. Mr. Green, no.
        Chairman Sensenbrenner. Gentleman from Arizona, Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no.
        Chairman Sensenbrenner. Gentlewoman from California, Ms.
    Waters?
        Ms. Waters. Aye.
        The Clerk. Ms. Waters, aye.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their votes? If not, the clerk will report. Gentleman
    from Virginia, Mr. Scott?
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their vote? The clerk will try again to report.
        The Clerk. Mr. Chairman, there are 11 ayes and 17 noes.
        Chairman Sensenbrenner. And the amendment is not agreed to.
    Are there further amendments?
        Mr. Scott. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from Virginia, Mr.
    Scott?
        Mr. Scott. Thank you, Mr. Chairman. I have an amendment at
    the desk, No. 004.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        The Clerk. Amendment to S. 256 offered by Mr. Scott of
    Virginia. Page 13, after line 23, insert the following (and
    make such technical and conforming changes as may be
    appropriate): E, subparagraphs (a) through (c) shall not
    apply----
        Chairman Sensenbrenner. Without objection the amendment is
    considered as read, the gentleman from Virginia will be
    recognized for 5 minutes.
        [The amendment follows:]

        Mr. Scott. Thank you, Mr. Chairman. Mr. Chairman, the rest
    of the reading would have said that the court may not dismiss
    or convert a case based on any form of means testing if the
    substantial portion of the indebtedness was incurred as a
    result of illness of the debtor, a dependent of the debtor or
    the debtor's spouse if not the dependent of the debtor.
        Mr. Chairman, we're talking about bankruptcy abuse.
    Bankruptcy filings have increased lately in recent years, and
    some of the people who file for bankruptcy haven't been
    financially responsible, but the more likely explanation is
    that the consumer bankruptcy results were something beyond
    their control such as a divorce, major illness or job loss.
        The truth is that many people are just one paycheck away or
    a job loss away or an uncovered medical catastrophe away from
    bankruptcy. We know at the present time there are about 1.5
    million people who go into bankruptcy every year. Half of those
    people who go into bankruptcy go into bankruptcy because of
    medical bills. About three-fourths of those who go into
    bankruptcy because of medical bills even have insurance. But
    nonetheless the explosion of health care costs have added such
    a burden to these families that they've ended up in bankruptcy.
        Mr. Chairman, if the purpose of the legislation is to deal
    with spendthrifts who are abusers of credit, we ought to
    distinguish them from the hard working Americans, basically
    middle class working families who have health insurance, or
    those on the right of the margin who wish they had health
    insurance, and those who are irresponsible in acquiring debt.
        Mr. Chairman, if we don't adopt this amendment we'll be
    sending the message that if you get sick, you're abusing the
    system. Mr. Chairman, we need to make sure that individuals who
    are afforded the protection of Chapter 7 bankruptcy, if a
    substantial portion of their bills were incurred as a result of
    illness, and I would hope we would adopt the amendment.
        Chairman Sensenbrenner. Gentlemen from Utah.
        Mr. Cannon. Thank you, Mr. Chairman. If I might ask, Mr.
    Scott, on line 3 it says ``on any form of means testing if, the
    a substantial portion,'' but I take it the comma and the
    ``the'' should be stricken? I don't know that it makes sense
    otherwise.
        Mr. Scott. Yes, Mr. Chairman. I think the after--``if'' the
    comma should not be there.
        Mr. Cannon. And the ``the'' should not be there either?
        Mr. Scott. If the--right.
        Mr. Cannon. So it means testing----
        Chairman Sensenbrenner. Without objection the amendment is
    modified.
        Mr. Scott. To delete the comma and the ``the'' on line 3.
        Chairman Sensenbrenner. Gentleman from Utah.
        Mr. Cannon. Thank you, Mr. Chairman.
        Again we're dealing with issues that are similar to what we
    just dealt with prior to the last amendment, and I'm not going
    to belabor it except to encourage my--Members of the Committee
    to vote against this amendment. It prevents the--which prevents
    the case filed by a debtor from being dismissed under the means
    test. The special circumstances provision in section 102(a)
    addresses the concerns that are raised by this amendment I
    believe, and the amendment does not address circumstances where
    the debtor is currently healthy, and what happens if the
    debtor's a millionaire? That we're not dealing with--that's
    been raised significantly here.
        This is on page 12 of the bill. The paragraph beginning
    with line 5 deals with those special medical--those
    circumstances such as a serious medical condition which I think
    deals with this issue appropriately.
        Mr. Scott. Would the gentleman make that citation again,
    please?
        Mr. Cannon. Yeah. On page 12 of the printed bill, it's a--
    line 5, capital B(i) or 1, and it's really line 7 that says
    ``such as a serious medical condition'' is one of those special
    circumstances. So I think that we've actually dealt with this
    issue in this bill. So I would encourage the Members of the
    Committee to vote against this amendment, and yield back the
    balance of my time.
        Chairman Sensenbrenner. The question is on the adoption of
    the amendment offered by the gentleman from Virginia, Mr.
    Scott. Those in favor will say aye.
        Opposed, no.
        The noes appear to have it. The noes have it and the
    amendment is not agreed to. Are there further amendments?
        Mr. Scott. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from Virginia, Mr.
    Scott.
        Mr. Scott. I have an amendment at the desk, 003.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        Mr. Scott. And, Mr. Chairman, under the--in light of the
    actions of the majority I'd want to take up 005 at the same
    time and take them en bloc.
        Chairman Sensenbrenner. The clerk will report amendments
    003 and 005, and while the clerk is doing that, the staff will
    distribute both amendments. The clerk will read.
        The Clerk. Amendment to S. 256 offered by Mr. Scott of
    Virginia. Page 13, after line 23, insert the following (and
    make such technical and conforming changes as may be
    appropriate:) E, subparagraphs (a) through (c) shall not apply
    and the court may not dismiss or----
        Chairman Sensenbrenner. Without objection the amendments
    will be considered en bloc and without objection the amendments
    will be considered as read, and the gentleman from Virginia is
    recognized for 5 minutes.
        [The en bloc amendments follow:]

        Mr. Scott. Thank you, Mr. Chairman. 003 allows a spouse to
    file for bankruptcy if their--a person to file for bankruptcy
    if their spouse--if a substantial of the bills are due to
    business losses incurred by a spouse who has died or deserted.
    For example, if a wife co-signs some business loans on behalf
    of her husband, and the husband--the business fails because the
    husband died or disappears and deserts the wife, the wife is
    left holding the bag and bills she can never pay.
        The bill would deny bankruptcy relief for the spouse if the
    person is making more than the median amount, say, $50,000. If
    they co-signed $500,000 worth of bills that spouse would be
    left holding the bag and unable to declare bankruptcy. If they
    can pay a couple hundred dollars a month, $10,000 over 5 years,
    they would not be able to file bankruptcy. That essentially
    means that everything over food and rent would be garnisheed
    from the person because they had the bad judgment to co-sign
    their spouse's business loans. It may be bad judgment but it's
    certainly not abusive.
        The other amendment, Mr. Chairman, is if your bills are
    due, if you've gotten into financial difficulty because you
    lost your job through no fault of your own, you shouldn't be
    denied the opportunity to file for bankruptcy. After Enron and
    WorldCom we found that a lot of people lose their jobs through
    no fault of their own because their companies went bankrupt.
    Traditionally in the midst of--or if it's a downward economy,
    traditionally we deal with widespread job loss by protecting
    the employees by doing such things as extending unemployment
    benefits. Now we're punishing the employee by protecting the
    creditors and bills they can't pay. American families would be
    well served if Congress addressed the widespread economic
    insecurity that households face rather than close this door to
    an option of last resort.
        Mr. Chairman, this job loss amendment would apply if the
    indebtedness was a result of unforeseen loss of employment
    through no fault of the debtor. So, Mr. Chairman, we should not
    deny bankruptcy relief if you lose your job through no fault of
    your own, or because you had the bad judgment to co-sign your
    spouse's business loan and you got deserted, or the spouse died
    and the business went under.
        I would hope the we would adopt these two amendments.
        Chairman Sensenbrenner. The gentleman yield back?
        Mr. Scott. I yield back. Thank you.
        Chairman Sensenbrenner. The gentleman from Utah, Mr.
    Cannon.
        Mr. Cannon. Thank you, Mr. Chairman. I'm working hard on
    understanding this. As the other side knows, I'm a slow reader
    and relatively dim-witted, and I'll acknowledge that but still
    try and help get an understanding of where we're going and why
    I don't think these amendments are necessary.
        As I understand this, this would create an exemption to the
    needs based test as a grounds for dismissal so people would not
    be dismissed if this happened. I have a couple of problems with
    them in particular. In first place they are vague, so that what
    if the debtor is Mr. or Mrs. Trump or a widowed Mr. or Mrs.
    Trump? Why are we dealing with business losses in the first----
        Mr. Scott. Will the gentleman yield on that point, on that
    point?
        Mr. Cannon. Certainly.
        Mr. Scott. If it's Mrs. Trump and she's co-signed the bills
    and he deserts here and she's left with billions of dollars or
    indebtedness, she would be unable to file for bankruptcy
    because she can pay $2,000 a year for the next 5 years.
        Mr. Cannon. I think this amendment, as I understand it, Mr.
    Scott, is dealing with the same section and deals with a
    similar situation as the last amendment, and I believe that
    that would be taken care of by the special needs section that
    we just quoted a few moments ago, so that we already have the
    situation where the debtor can be discharged of the
    indebtedness under these circumstances as I read them.
        Mr. Scott. So a spouse deserting you as part of a special
    circumstance is defined?
        Mr. Cannon. If you're looking at that section B(i), and as
    you go down to line 9, to the extent that such special
    circumstances that justify additional expenses or adjustments
    of current monthly income for which there is no reasonable
    alternative. So if a spouse dies, if there's a huge business
    debt, I believe that would be covered by the language that is
    currently in the bill, and specifically the job loss. So you
    have adjustments of current monthly income which is job loss,
    as I read----
        Mr. Scott. Would the gentleman yield?
        Mr. Cannon. Certainly.
        Mr. Scott. Is it your statement that the legislative intent
    of the bill is to cover people in this--as a special
    circumstance who lose their job through no fault of their own?
        Mr. Cannon. Well, I think yes. I'm comfortable with that
    given the language of the section on line 10 that justifies. So
    you have to prove it, but I think that's a relatively
    straightforward process and deals with the issues that you've--
    that you're suggesting here, and so I would ask my colleagues
    on the Committee to reject these amendments, and yield back the
    balance of my time.
        Chairman Sensenbrenner. The question is on the amendments
    en bloc offered by the gentleman from Virginia, Mr. Scott.
    Those in favor will say aye.
        Opposed, no.
        The noes appear to have it, the noes have it. The
    amendment's not agreed to.
        Are there further amendments?
        Mr. Meehan. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from Massachusetts,
    Mr. Meehan.
        Mr. Meehan. Mr. Chairman, I have an amendment at the desk.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        Mr. Meehan. Designated 001, Conyers 001.
        The Clerk. Amendment to S. 256 offered by Mr. Meehan. Page
    13, strike lines 14 through 23, and insert the following (and
    make such technical and conforming changes as may be
    appropriate:) D, subparagraphs (a) through (c) shall not----
        Chairman Sensenbrenner. Without objection the amendment
    will be considered as read, and the gentleman from
    Massachusetts is recognized for 5 minutes.
        [The amendment follows:]

        Mr. Meehan. Thank you, Mr. Chairman. This amendment is
    intended to protect injured or disabled veterans from the harsh
    and humiliating procedures established for debtors under the
    newly established means test.
        This bankruptcy bill is based on the presumption that
    people who go into bankruptcy are just trying to abuse the
    system, and that's why it sets up an artificial means test to
    prevent people from trying to get a fresh start under Chapter
    7. I believe that members of the military who swear to defend
    this country and risk their lives overseas, the presumption
    should be that they are responsible people. And so this
    amendment aims to exempt, all veterans returning home disabled,
    from the artificial means test.
        According to the GAO in recent years about 16,000 active
    duty service members have filed for bankruptcy annually. But
    with our military extended from Iraq to Afghanistan and
    reservists separated from their families and jobs for long
    stretches of time, that number is sure to increase.
        There were efforts in the Senate to protect all service
    members from the means test and the abusive practices by
    lenders, but many of them were turned back. Ultimately the
    Senate agreed on a more narrowly tailored protection for only
    disabled service members. The Senate amendment said that
    disabled veterans filing for bankruptcy, whose indebtedness
    occurred primarily while on active duty are exempt from means
    test. But the Senate amendment fails to exempt disabled service
    members who accumulated, amounted debt after their return home
    but because of the injury or the disability sustained while on
    active duty.
        We all know that the members of the military who serve
    oftentimes have injuries that are diagnosed when they get back
    to the United States. There's been a lot of attention on PTSD,
    post traumatic stress syndrome. This amendment builds on the
    Senate compromise. It protects disabled veterans whose
    indebtedness occurred while on active duty as well as those
    whose indebtedness primarily as a result of their injuries or
    disabilities. More than a million service members have served
    in Iraq. More than 11,000 have been wounded. According to the
    New England Journal of Medicine, 16 percent of Iraq combat
    veterans are returning home with post traumatic stress disorder
    or other psychological conditions.
        Now, I've gone to Walter Reed Hospital and visited kids who
    are missing arms and missing legs. They're struggling to
    recover. They might be unable to work for months or years, and
    they may have enormous personal costs associated with their
    ongoing medical treatments. This means test in this bill
    establish its completely arbitrary cost for expenses that have
    nothing to do with the kinds of new expenses that disabled
    service members might actually be facing. All this amendment
    does is protect the rights that disabled service members have
    when they file for bankruptcy. It gives judges the discretion
    to determine whether they should be eligible for Chapter 11,
    Chapter 7 or Chapter 13, and does not presume that they are
    trying to game the system.
        I urge my colleagues to adapt--to adopt this amendment, and
    I urge them to look at the language that we're talking about,
    the indebted--what the Senate language says is the indebtedness
    occurred primarily during a period when he or she was in active
    duty. This language simply says that the indebtedness occurred
    primarily as a result of an injury or disability resulting from
    active duty. Clearly, a minimum we ought to be able to do for a
    man or a woman who's injured in Iraq, who comes home only to
    find out they have injuries that they weren't aware of, that we
    can excuse them from this means test, this arbitrary means test
    set up in this bill.
        Now, surely, even a rush to get this bill out no matter
    what the amendments that are offered, surely we can consider
    this amendment.
        Mr. Conyers. Would the gentleman yield?
        Mr. Meehan. I would yield to the ranking----
        Mr. Conyers. I only want to underscore the importance of us
    supporting those members of the armed services who are not just
    protecting us but putting their lives at risk in an effort to
    fight a very difficult kind of war, unlike any that we've been
    forced to deal with before. And I concur completely in the
    excellent way that he has put forward the logic in this
    amendment.
        Chairman Sensenbrenner. The time of the gentleman has
    expired.
        Mr. Meehan. And again, it's overwhelming evidence that----
        Chairman Sensenbrenner. The gentleman from Utah, Mr.
    Cannon.
        Mr. Meehan.--these members get PTSD and everything else.
        Chairman Sensenbrenner. The gentleman from Utah.
        Mr. Cannon. Thank you, Mr. Chairman. I apologize just for a
    moment here. We apparently got the wrong amendment initially
    here, so I've just been looking this over. And if I might ask
    Mr. Meehan just one question.
        On line 12 of your amendment it says: result of an injury
    or disability resulting from (1) active duty and then
    performing homeland defense. Does ``resulting from'' mean that
    it happened while on either active or performing, or----
        Mr. Meehan. No. The question----
        Mr. Cannon. Does it have to be something involved--that,
    you know, if a guy is on active duty but he's out at a bar and
    he gets in a fistfight and gets disabled, do you have--what do
    you mean by that?
        Mr. Meehan. No. The injury would be resulting from active
    duty. In other words, if somebody, as we all know from veterans
    coming back develop PTSD, and the question also is when the
    indebtedness occurred. But, no, this is anyone whose injured
    primarily as a result of, injury primarily the result of active
    duty. And oftentimes when a service member comes home and it's
    determined that they have PTSD, for example, then that is an
    injury that occurred as a result of active duty. Yet, if the
    indebtedness was not incurred while they were on active duty,
    then they don't get any relief under this amendment. That's a
    fundamental flaw in what the Senate adopted, and I think we
    ought to correct it here.
        Mr. Cannon. May I just ask, so if someone who is on active
    duty is in a bar and gets in a fight, does that result from the
    active duty since it's--you know, he's in the theater, but
    it's, you know, a different circumstance than what we normally
    think of as post--PTSD. I don't--I'm just trying to understand
    where you're going with----
        Mr. Meehan. Well, I can tell you that PTSD, the military
    has changed their policy. We now require, when soldiers come
    back, to have a full examination----
        Mr. Cannon. Reclaiming my time, I'm not talking about PTSD
    so much as trying to understand, do you intend to cover
    everything that happens while a person is on active duty----
        Mr. Meehan. Only if the injury is as a result of their
    service on active duty. In other words----
        Mr. Cannon. So the fight in a bar in Iraq is not going to
    qualify--that is a fight with another American----
        Mr. Meehan. Well, if it's in Iraq, it may well qualify, it
    may well qualify. But here's--you're missing the point. What
    this is about is when the indebtedness occurred, so even under
    the Senate amendment if the indebtedness occurred while this
    soldier was in Iraq, I believe he's covered by the Senate
    language.
        However, if a soldier comes back to the United States, it's
    determined he has PTSD, and the indebtedness occurs after that
    disability has been diagnosed, and the indebtedness starts to
    build once a soldier comes back to the United States, they
    wouldn't get relief under the Senate language.
        Mr. Cannon. Reclaiming my time, I think I understand where
    you're coming from on that. I'm unclear as to the scope, but
    let me just point out that the bill already has very
    substantial protections for the military in it. The bill's
    needs-based test includes numerous safe harbors and exceptions
    for special circumstances. As amended, the special
    circumstances exception specifically mentions a debtor who is
    subject to a call or order to active duty in the armed forces.
    And, as amended, the needs-based test has a special exception
    just for debtors who are disabled veterans if indebtedness
    occurred primarily during a period when the debtor was on
    active duty or performing a homeland defense activity.
        As amended, the bill specifies that the absolute safe
    harbor from all types of dismissal motions, under section
    707(b), applies to a veteran. As amended, the bill excuses a
    debtor if he or she is on active military duty in a military
    combat zone from the mandatory credit counseling and financial
    management training requirements.
        I think we've done what we can do for our members of the
    military, and so I would encourage the Members of the Committee
    to vote no on this amendment.
        Mr. Meehan. Would the gentleman yield?
        Mr. Cannon. Certainly.
        Mr. Meehan. But what I'm talking about here is people who
    have been injured or have a disability as a result of service,
    for example, in Iraq. If you want language, for example, to
    exempt anyone who gets in a bar fight in Iraq, I would be glad
    to do that, but what----
        Mr. Cannon. No. I'm just trying to understand what you want
    to do but----
        Mr. Meehan. What I'm talking about is if a soldier who
    serves in Iraq and comes home without a leg or another--without
    an arm, as they have at Walter Reed Hospital, literally
    thousands of them, and they have PTSD, as many of them do, and
    their indebtedness starts to grow when they get back from
    active duty, they ought to be covered by the same kind of
    exemption here.
        Mr. Cannon. Are you suggesting that--you've talked about
    post traumatic stress syndrome----
        Mr. Meehan. As one example.
        Mr. Cannon. As an example, but is that because----
        Chairman Sensenbrenner. Time of the gentleman has expired.
        Mr. Cannon. Thank you, yield back.
        Chairman Sensenbrenner. The question is on the amendment
    offered by the gentleman from Massachusetts, Mr. Meehan. Those
    in favor will say aye.
        Opposed, no.
        The noes appear to have it.
        Mr. Meehan. rollcall, Mr. Chairman.
        Chairman Sensenbrenner. rollcall will be ordered. The
    question is on the Meehan amendment. Those in favor will as
    your names are called answer aye, those opposed, no, and the
    clerk will call the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        Mr. Coble. No.
        The Clerk. Mr. Coble, no. Mr. Smith?
        [No response.]
        The Clerk. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        [No response.]
        The Clerk. Mr. Chabot?
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no. Mr. Lungren?
        Mr. Lungren. No.
        The Clerk. Mr. Lungren, no. Mr. Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no. Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        Mr. Bachus. No.
        The Clerk. Mr. Bachus, no. Mr. Inglis?
        [No response.]
        The Clerk. Mr. Hostettler?
        Mr. Hostettler. No.
        The Clerk. Mr. Hostettler, no. Mr. Green?
        [No response.]
        The Clerk. Mr. Keller?
        Mr. Keller. No.
        The Clerk. Mr. Keller, no. Mr. Issa?
        Mr. Issa. No.
        The Clerk. Mr. Issa, no. Mr. Flake?
        [No response.]
        The Clerk. Mr. Pence?
        [No response.]
        The Clerk. Mr. Forbes?
        Mr. Forbes. No.
        The Clerk. Mr. Forbes, no. Mr. King?
        Mr. King. No.
        The Clerk. Mr. King, no. Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no. Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no. Mr. Gohmert?
        Mr. Gohmert. No.
        The Clerk. Mr. Gohmert, no. Mr. Conyers?
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye. Mr. Berman?
        [No response.]
        The Clerk. Mr. Boucher?
        [No response.]
        The Clerk. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye. Mr. Scott?
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye. Mr. Watt?
        Mr. Watt. Aye.
        The Clerk. Mr. Watt, aye. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        [No response.]
        The Clerk. Ms. Waters?
        Ms. Waters. Aye.
        The Clerk. Ms. Waters, aye. Mr. Meehan?
        Mr. Meehan. Aye.
        The Clerk. Mr. Meehan, aye. Mr. Delahunt?
        [No response.]
        The Clerk. Mr. Wexler?
        [No response.]
        The Clerk. Mr. Weiner?
        Mr. Weiner. Aye.
        The Clerk. Mr. Weiner, aye. Mr. Schiff?
        Mr. Schiff. Aye.
        The Clerk. Mr. Schiff, aye. Ms. Sanchez?
        Ms. Sanchez. Aye.
        The Clerk. Ms. Sanchez, aye. Mr. Smith?
        [No response.]
        The Clerk. Mr. Van Hollen?
        Mr. Van Hollen. Aye.
        The Clerk. Mr. Van Hollen, aye. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Members in the chamber who wish to
    cast or change their votes? Gentleman from Virginia, Mr.
    Boucher?
        Mr. Boucher. Votes no.
        The Clerk. Mr. Boucher, no.
        Chairman Sensenbrenner. Gentleman from California, Mr.
    Berman?
        Mr. Berman. Aye.
        The Clerk. Mr. Berman, aye.
        Chairman Sensenbrenner. Gentlewoman from Texas, Ms. Jackson
    Lee?
        Ms. Jackson Lee. Am I recorded?
        The Clerk. Mr. Chairman, Ms. Jackson Lee is not recorded.
        Ms. Jackson Lee. Aye.
        The Clerk. Ms. Jackson Lee, aye.
        Chairman Sensenbrenner. Further Members in the--gentleman
    from Texas, Mr. Smith.
        Mr. Smith of Texas. Mr. Chairman, I vote no.
        The Clerk. Mr. Smith, no.
        Chairman Sensenbrenner. Gentleman from South Carolina, Mr.
    Inglis.
        Mr. Inglis. No.
        The Clerk. Mr. Inglis, no.
        Chairman Sensenbrenner. Any other Members in the chamber
    who wish to cast or change their votes? If not, the clerk will
    report. The gentlewoman from California, Ms. Waters?
        Ms. Waters. Aye.
        Chairman Sensenbrenner. Is Ms. Waters recorded?
        The Clerk. Mr. Chairman, Ms. Waters is recorded with aye.
        Chairman Sensenbrenner. The clerk will report.
        The Clerk. Mr. Chairman, there are 12 ayes and 19 noes.
        Chairman Sensenbrenner. And the amendment is not agreed to.
    Are there further amendments?
        Mr. Schiff. Mr. Chairman, I have an amendment.
        Chairman Sensenbrenner. The gentleman from California, Mr.
    Schiff?
        Mr. Schiff. Mr. Chairman, I have an amendment----
        Ms. Jackson Lee. Can I have a parliamentary inquiry,
    pleases? What is the order of selecting people to do
    amendments?
        Chairman Sensenbrenner. The order is at the discretion of
    the Chair. The gentleman from California, Mr. Schiff.
        Ms. Jackson Lee. That's what I notice, so let me say that I
    reject the discretion of the Chair. I've had my hand up forever
    and ever----
        Chairman Sensenbrenner. The gentlewoman from Texas is out
    of order.
        Ms. Jackson Lee. You need to be fair.
        Chairman Sensenbrenner. The gentleman from--the Chair has
    always been fair and----
        Ms. Jackson Lee. Not really.
        Chairman Sensenbrenner. Well, the clerk will report the
    amendment of the gentleman from California, Mr. Schiff.
        Ms. Jackson Lee. I'm planning on staying here all evening
    till you call on me.
        Chairman Sensenbrenner. The gentlewoman from Texas will be
    called on in due course. Which amendment does the----
        Ms. Jackson Lee. Well, it will be 12 tonight and I'll be
    right here waiting to be called on. You're rudely unfair.
        Mr. Schiff. Mr. Chairman----
        Ms. Jackson Lee. Had my hand up forever.
        Mr. Schiff. The amendment is numbered 002.
        Chairman Sensenbrenner. The clerk will report the amendment
    of the gentleman from California.
        Mr. Schiff. Amendment to S. 256 offered by Mr. Schiff. Page
    92, after line 5, insert the following (and make such technical
    and conforming changes as may be appropriate:).
        Chairman Sensenbrenner. Without objection, the amendment is
    considered as read, and the gentleman from California is
    recognized for 5 minutes.
        [The amendment follows:]

        Mr. Schiff. Mr. Chairman, I will keep this very brief and
    it won't consume 5 minutes.
        This amendment would authorize a study by the GAO to
    determine any effects the bill may have on the ability of a
    parent to pay child support or the ability of a parent to
    collect child support. Probably the most significant concern
    about the bill for me is the collateral consequence of the
    bill, where those trying to collect child support may be placed
    in indirect or direct competition with credit card companies or
    others who are in a much stronger position to collect on
    outstanding debts than those who are entitled to child support.
        This amendment is identical to the one I offered 4 years
    ago that made it into the manager's amendment but was later
    removed from the manager's amendment. It would merely require
    that a study be conducted so that we can determine, after a
    suitable period of time elapses, if there has been an adverse
    impact in this area. Some have asserted that portions of the
    bill will actually help those attempting to collect child
    support, but I think it is still unclear what the impact will
    be on those who are entitled to child support and maybe unable
    to collect it. This amendment will provide for a good and
    objective analysis to help us determine whether subsequent
    legislation as a follow up would be prudent.
        The bill only calls for a study. It does not impede the
    date of enactment of the bill or implementation of the bill.
        With that, Mr. Chairman, I will yield the balance of my
    time.
        Chairman Sensenbrenner. The gentleman from Utah, Mr.
    Cannon.
        Mr. Cannon. Thank you, Mr. Chairman.
        Let me respond by just submitting for the record a National
    Child Support Enforcement Association statement supporting the
    bill. This is from, I think this is from 2002, but I think the
    principles are the same.
        Let me just point out that this study can be had just by a
    request from Congress. We could even do a bipartisan request of
    GAO, and I assure the gentleman from California that I would be
    happy to sign that request with him if he'd like to do that.
        We do not need to amend the study--or amend the bill to get
    a study like this, and so I would encourage my colleagues to
    vote against this amendment, and I yield back the balance of my
    time.
        [The material referred to follows:]

        Mr. Conyers. Could the gentleman from Utah yield, please?
        Mr. Cannon. Mr. Conyers, I'd be happy to yield to you in
    just a moment, but may I suggest to the gentleman that he might
    want to withdraw the amendment. And I'd be happy to sign a
    letter asking for the study.
        Mr. Schiff. If the gentleman will yield, I'd be happy to
    yield to the--I was going to say I'm--unless my colleague
    objects, I'd be happy to withdraw the amendment and join my
    colleague in----
        Chairman Sensenbrenner. Without objection, the amendment is
    withdrawn.
        Mr. Conyers. Thank you.
        Chairman Sensenbrenner. Are there further amendments? The
    gentleman from Michigan, Mr. Conyers.
        Mr. Conyers. I wanted to just make--strike the last word.
        Chairman Sensenbrenner. The gentleman is recognized for 5
    minutes.
        Mr. Conyers. After the distinguished gentlelady from Texas
    is recognized, and after the Ranking Member of Commercial and
    Administrative Law Subcommittee, Mr. Watt, makes an important
    presentation on his amendment, it is my inclination to call for
    the previous question. And I yield back my time.
        Chairman Sensenbrenner. Does the gentleman from Michigan
    yield back?
        Mr. Conyers. Yes, sir. I do.
        Chairman Sensenbrenner. For what purpose does the
    gentlewoman from Texas seek recognition?
        Ms. Jackson Lee. I have an amendment at the desk.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        Ms. Jackson Lee. It is 001, and I have five amendments.
        Chairman Sensenbrenner. Without objection, the amendments
    are considered en bloc.
        Ms. Jackson Lee. Mr. Chairman, I am not asking him for them
    to be considered en bloc.
        Chairman Sensenbrenner. The clerk will report the
    amendment.
        Ms. Jackson Lee. 001, please.
        The Clerk. Amendment to S. 256 offer by Ms. Jackson Lee of
    Texas. Page 10, line 22, strike ``$1,500'' and insert
    ``$3,000.''
        Chairman Sensenbrenner. The gentlewoman is recognized for 5
    minutes.
        [The amendment follows:]

        Ms. Jackson Lee. I thank the Chairman very much. I would
    like to have recorded--well, let me just make a statement. I
    was unavoidably detained for the Schiff amendment dealing with
    identity theft. I'd like to be recorded as voting aye if I had
    been present. And I was detained for the Nadler amendment. I'd
    like to be recorded as having voted yes.
        With that in mind, to my colleagues, I think that this
    amendment is a very straightforward and simple amendment, and
    would generate, I would hope, bipartisan support. My amendment
    simply increases the amount of relief that is given to those
    parents who have children in private and parochial schools,
    raising the amount that is protected from $1,500 to $3,000.
        Let me share with my colleagues what has been recently
    noted as private school dollars. In looking at a list of
    schools from Texas, you will find that most private schools,
    that is, primary schools, are anywhere from $3,500 to $5,000.
    The $1,500 would simply throw children out of school and
    eliminate--or burden children who are not responsible for the
    difficulties of their parents. The mean test mechanism, the
    principal mechanism aimed at the bankruptcy filing rate is the
    means test under section 11, which denies access to Chapter 7
    bankruptcy to those debtors who are deemed able to repay their
    debts. The test has been described by proponents as a flexible
    test to assess an individual's ability to repay his debts and
    as a remedy to irresponsible consumerism and lax bankruptcy
    law.
        The Jackson Lee amendment seeks to remove one aspect of its
    inflexibility and outdatedness. The means test limits private
    or parochial school tuition expenses up to $1,500 per year.
    According to a study by the National Center for Educational
    Statistics, even in 1993, $1,500 would not have covered the
    average tuition for virtually any category of parochial
    school--of any parochial school or private school. Today it
    would not come close for any particular school. In order to
    yield a few dollars for credit card issuers, this bill would
    force many struggling families to take their children from
    private or parochial school, often in violation of deeply held
    religious beliefs, for 3 to 5 years in order to conform or
    confirm a Chapter 13 plan.
        My amendment, as I indicated, would simply increase this
    tuition payment ceiling to $3,000 to account for inflation as
    well as the current cost of parochial tuition. The average cost
    to educate one elementary school student is $3,100, which is
    double what it was 10 years ago.
        As I look at the crisis of education in America, it would
    certainly be shameful if we stood in this room to deny
    individuals the opportunity to be educated.
        Let me share as well some food for thought for my
    colleagues in their understanding or in their deliberation on
    the final resolution of this particular legislation. We realize
    that if you are with a bad credit score and you do accept a
    credit card, which they are given to anyone that literally
    breathes in America, you are usually paying usurious rates, 29
    percent, 24 percent. Those interest rates are in essence an
    insurance against those who may get themselves into trouble.
    That means this is the insurance that is given to the credit
    card company when there are those who default. And what is
    strange about this is that the credit card companies collect
    this risk premium year in and year out, but when the risk
    actually happens and the borrower cannot pay, the lenders want
    the Federal Government to intervene to force the debtor to pay.
    That is the ludicrous--the ridiculousness of this legislation.
    Credit card companies go off scot free, and those who are
    victimized have to pay.
        I would like to--and that is by Elizabeth Warren, at least
    the comment that I read. I don't want to put the other
    comments--the comment that I read about the risk actually
    happens is a notation by Elizabeth Warren.
        I would like to put into the record what was written by
    David Broder, and I'd ask unanimous consent to put his entire
    article into the record.
        Chairman Sensenbrenner. Without objection.
        [The material referred to follows:]

        Ms. Jackson Lee. One of the paragraphs reads, ``For 2 weeks
    the Senate sponsors shot down virtually every attempt to
    separate the sheep from the goats and carve out protections for
    the average family trapped by circumstances. The dry language
    of the Congressional Record recites a series of one-sided votes
    rejecting amendments `to protect service members and veterans .
    . . to exempt debtors whose financial problems were caused by
    serious medical problems . . . to preserve existing bankruptcy
    protections for individuals experiencing''----
        Chairman Sensenbrenner. The gentlewoman's time has----
        Ms. Jackson Lee. I don't want to follow the----
        Chairman Sensenbrenner.--expired.
        Ms. Jackson Lee.--Senate. I'd ask you to support my
    amendment.
        Chairman Sensenbrenner. The gentlewoman's time has expired.
    The question is on the Jackson Lee amendment. Those in favor
    will say aye?
        Those opposed, no?
        The noes appear to have it. The noes----
        Ms. Jackson Lee. rollcall vote.
        Chairman Sensenbrenner. Those in favor of the Jackson Lee
    amendment will, as your names are called, answer aye, those
    opposed, no, and the clerk will call the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        Mr. Coble. No.
        The Clerk. Mr. Coble, no. Mr. Smith?
        Mr. Smith of Texas. No.
        The Clerk. Mr. Smith, no. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        [No response.]
        The Clerk. Mr. Chabot?
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no. Mr. Lungren?
        Mr. Lungren. No.
        The Clerk. Mr. Lungren, no. Mr. Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no. Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        Mr. Bachus. No.
        The Clerk. Mr. Bachus, no. Mr. Inglis?
        Mr. Inglis. No.
        The Clerk. Mr. Inglis, no. Mr. Hostettler?
        [No response.]
        The Clerk. Mr. Green?
        [No response.]
        The Clerk. Mr. Keller?
        Mr. Keller. No.
        The Clerk. Mr. Keller, no. Mr. Issa?
        [No response.]
        The Clerk. Mr. Flake?
        [No response.]
        The Clerk. Mr. Pence?
        Mr. Pence. No.
        The Clerk. Mr. Pence, no. Mr. Forbes?
        Mr. Forbes. No.
        The Clerk. Mr. Forbes, no. Mr. King?
        Mr. King. No.
        The Clerk. Mr. King, no. Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no. Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no. Mr. Gohmert?
        Mr. Gohmert. No.
        The Clerk. Mr. Gohmert, no. Mr. Conyers?
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye. Mr. Berman?
        Mr. Berman. Aye.
        The Clerk. Mr. Berman, aye. Mr. Boucher?
        Mr. Boucher. No.
        The Clerk. Mr. Boucher, no. Mr. Nadler?
        Mr. Nadler. Aye.
        The Clerk. Mr. Nadler, aye. Mr. Scott?
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye. Mr. Watt?
        Mr. Watt. Aye.
        The Clerk. Mr. Watt, aye. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        Ms. Jackson Lee. Aye.
        The Clerk. Ms. Jackson Lee, aye. Ms. Waters?
        Ms. Waters. Aye.
        The Clerk. Ms. Waters, aye. Mr. Meehan?
        [No response.]
        The Clerk. Mr. Delahunt?
        [No response.]
        The Clerk. Mr. Wexler?
        [No response.]
        The Clerk. Mr. Weiner?
        Mr. Weiner. Aye.
        The Clerk. Mr. Weiner, aye. Mr. Schiff?
        Mr. Schiff. Aye.
        The Clerk. Mr. Schiff, aye. Ms. Sanchez?
        Ms. Sanchez. Aye.
        The Clerk. Ms. Sanchez, aye. Mr. Smith?
        Mr. Smith. Aye.
        The Clerk. Mr. Smith, aye. Mr. Van Hollen?
        Mr. Van Hollen. Aye.
        The Clerk. Mr. Van Hollen, aye. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Members in the chamber who wish to
    cast or change their vote? The gentleman from Wisconsin, Mr.
    Green.
        Mr. Green. No.
        The Clerk. Mr. Green, no.
        Chairman Sensenbrenner. The gentleman from Virginia, Mr.
    Goodlatte.
        Mr. Goodlatte. No.
        The Clerk. Mr. Goodlatte, no.
        Chairman Sensenbrenner. Further Members in the chamber who
    wish to cast or change their vote? The gentleman from
    California, Mr. Issa.
        Mr. Issa. Aye.
        The Clerk. Mr. Issa, aye.
        Chairman Sensenbrenner. Further Members in the chamber who
    wish to cast or change their vote? If not, the clerk will
    report.
        The Clerk. Mr. Chairman, there are 12 ayes and 21 noes.
        Chairman Sensenbrenner. And the amendment is not agreed to.
        Are there further amendments?
        Ms. Jackson Lee. I have an amendment at the desk, Mr.
    Chairman.
        Chairman Sensenbrenner. The gentlewoman from Texas. The
    clerk will report the amendment.
        Ms. Jackson Lee. It is 003.
        The Clerk. Amendment to S. 256, offered by Ms. Jackson Lee
    of Texas. Page 20, line 24, insert ``assistance funds received
    by the debtor as a victim of a natural disaster''----
        Chairman Sensenbrenner. Without objection, the amendment is
    considered as read.
        [The amendment follows:]

        Chairman Sensenbrenner. The gentlewoman is recognized for 5
    minutes.
        Ms. Jackson Lee. I thank the Chairman, and I thank the
    Ranking Member.
        Mr. Conyers. Would the gentlelady yield to the Ranking
    Member momentarily?
        Ms. Jackson Lee. I'd be happy to yield. I'd be happy to
    yield to the gentleman.
        Mr. Conyers. I'd ask all of my colleagues to either put all
    of their amendments en bloc or strike the last word, put the
    amendment and the argument in so that it will be there, because
    we have two other very important pieces of legislation after we
    finish this bill. If you could consider that, I'd be grateful.
        Ms. Jackson Lee. Mr. Chairman, I'd be delighted, if I could
    do this one, and I'll put the other en bloc and be finished.
    Would that meet--how can I accommodate----
        Mr. Conyers. That would delight me no end.
        Ms. Jackson Lee. All right. I will do this very quickly,
    and then I have three others and I will put them en bloc.
        Mr. Conyers. Thank you.
        Ms. Jackson Lee. I thank the gentleman very much for his
    kindness.
        Mr. Conyers. Thank you very much.
        Ms. Jackson Lee. My friends, this is a circumstance that
    will confront all of our States, whether it is a flood, a
    hurricane, certainly any natural disaster that we can imagine
    has confronted individual States. We know recently that--we
    know recently that Florida suffered a historic three hurricanes
    or more in 2004. Families that are affected by natural
    disasters such as a hurricane in Florida or the mudslides in
    California should not have to apply their scarce relief effort
    monies to bankruptcy debt. The intent in providing Federal and
    State monies to families who are victims of such natural
    disasters is to relieve the burden that the disaster has
    caused, not to increase their net worth.
        Bankruptcy reform should address many specific issues, such
    as the negligent mismanagement of money, but hurt those who are
    already suffering from flooding or collapsed roof or house that
    has gone out to sea is absolutely ridiculous.
        I'd ask my colleagues to support this, which exempts the
    benefits that you've received if you have suffered a natural
    disaster. Again, I started out my concern about this
    legislation in that it is class warfare. I simply ask my
    colleagues to find some sense of balance to be able to balance
    this legislation with those middle-class and working families
    who are simply trying to make ends meet. We have already denied
    veterans and those returning from Iraq. We've denied those with
    catastrophic injuries. I can't imagine that there's not one of
    us that has not been in a community that has suffered a natural
    disaster.
        I ask my colleagues to support this amendment.
        Chairman Sensenbrenner. Does the gentlewoman yield back?
        Ms. Jackson Lee. I yield back.
        Chairman Sensenbrenner. The question is on the amendment.
    Those in favor will say aye? Opposed, no? The noes appear to
    have it. The noes have it. The amendment is not agreed to.
        The gentlewoman from Texas.
        Ms. Jackson Lee. I have three amendments at the desk, 002,
    004, and 006.
        Chairman Sensenbrenner. Without objection, the----
        Ms. Jackson Lee. Excuse me----
        Chairman Sensenbrenner.--amendments will be considered en
    bloc. Hearing none, so ordered. The clerk will report the
    amendments.
        The Clerk. Amendments to S. 256 offered by Ms. Jackson Lee
    of Texas. At an appropriate place, insert the following ``(and
    make such technical and conforming changes as may be
    appropriate):''
        ``Section. Debts incurred as a result of sex offenses
    against minors.''
        ``Section 523(a) of title 11, United States Code, as
    amended by section''----
        Chairman Sensenbrenner. Without objection, the amendments
    are considered as read en bloc.
        [The en bloc amendments follow:]

        Chairman Sensenbrenner. And the gentlewoman is recognized
    for 5 minutes.
        Ms. Jackson Lee. Although we may have an opportunity to
    address this on the floor of the House, I think my amendments
    are self-explanatory. Might I make note for the audience that I
    have a great deal of respect for the Chairman of the
    Subcommittee, but I think it is beneath the process of this
    body when you offer an amendment and there is not even the
    courtesy and the respect to have a response by the opposition.
        But this is the low level of which we have reached in this
    body, and I always believed that when you reach to go over the
    edge, when you abuse your power, I can assure you that it's
    going to come back to you. We're here debating the lives of
    people, the lives of people who are simply going to be crushed
    by this oppressive, destructive, and special interest
    legislation. And if there are any credit card companies in the
    audience, it's not personal. But for you to spend this amount
    of money to generate this kind of ugly, one-sided legislative
    initiative is an absolute disgrace.
        Let me cite the testimony from Elizabeth Warren, who spoke
    before the Committee on the Judiciary on February 10, 2005, an
    outstanding scholar at Harvard University Law School: ``The
    overreaching problem with this bill is that time and the
    American economy has passed it by. We don't need this
    legislation. It is a complete misnomer. It is nothing but a
    payoff to credit card companies who have spent $4 million and
    more for this legislation.''
        In the 8 years since this bill was introduced, new cases
    have burst on the scene. The names are burned into our
    collective memories: Enron, WorldCom, Adelphia, United
    Airlines, US Airways, TWA, LTV Steel, Kmart, Polaroid, Global
    Crossing. While the number of consumer bankruptcy cases have
    declined slightly in the past year, many of the largest
    corporate bankruptcy cases in American history have occurred
    since the Senate has last re-evaluated the bankruptcy laws, and
    some of those cases are already legend for the corporate
    scandals that accompany them.
        My friends on the other side of the aisle, my amendments
    are simple. Do not eliminate the debt of someone or allow
    someone to stand behind bankruptcy when they have a liability
    because of a sexual assault. Do not allow those who receive
    dollars because they're injured in cases relating to tobacco to
    have to use those dollars in getting rid of their credit debt
    or their other debt. And if someone is impacted by--though we
    wish they would not, by some nuclear accident, under the Price-
    Anderson Act, the PAA, let us not have those dollars subjected
    to the bankruptcy laws, meaning that they would have to utilize
    them to pay off their debt.
        In this instance, I would simply say that Elizabeth Warren
    is right. She was right 8 years ago, and she is right now. We
    have seen a decrease in consumer bankruptcies. We already have
    an insurance plan as it relates to the credit card companies by
    their charging of usurious rates. You get any credit card
    invitation, and what you get in the mail is a complete, if you
    will, scandalous request for you to join their family. It is in
    blind need that you sign up for it, 30 percent, 29 percent.
        And so we have this 512-page document that gives little
    relief to anyone other than those who simply want to break the
    backs of the middle class. Let me tell you, my friends, that
    this company runs--excuse me, this country, this Nation runs on
    the backs of the middle class. They are the working people.
    They're the ones that generate the economy. And, yes, they are
    the consumers. I already said that the credit card companies
    create a house of cards. That's what they do. You can't buy or
    sell without a credit card. This country is going to find
    itself overridden by not debt but by the system that doesn't
    allow you to use your simple dollars to buy and sell.
        This bill makes it happen for sure, and all I would say is
    that I'd ask for the thoughtfulness in this process. This is
    not about whether the Chairman likes you or doesn't like you,
    likes your philosophy or doesn't like your philosophy, likes
    your style or doesn't like your style. This is the legislative
    process, and I'm representing people who cannot speak for
    themselves.
        Mr. Conyers. Would the gentlelady----
        Ms. Jackson Lee. And I will not be silenced on that basis.
    I'd be happy to yield.
        Mr. Conyers. I'd like to say that you've presented three
    very important amendments that have not been considered in any
    way, and I don't want anyone to confuse the fact that you have
    introduced them en bloc with the fact that they are any less
    important than any of the other amendments that you have put
    forward today. And I thank the lady for cooperating with the
    parliamentary process, and I support the amendments without
    exception.
        Ms. Jackson Lee. I thank you for your leadership. I ask my
    colleagues to support the three amendments and speak on behalf
    of the American people.
        Chairman Sensenbrenner. The gentlewoman's time has expired.
    The question is on agreeing to the Jackson Lee amendments en
    bloc. Those in favor will say aye? Opposed, no? The noes----
        Ms. Jackson Lee. rollcall.
        Chairman Sensenbrenner.--appear to have it--rollcall will
    be ordered. The question is on agreeing to the three Jackson
    Lee amendments en bloc. Those in favor will, as your names are
    called, answer aye, those opposed, no, and the clerk will call
    the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        Mr. Coble. No.
        The Clerk. Mr. Coble, no. Mr. Smith?
        Mr. Smith. No.
        The Clerk. Mr. Smith, no. Mr. Gallegly?
        Mr. Gallegly. No.
        The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
        Mr. Goodlatte. No.
        The Clerk. Mr. Goodlatte, no. Mr. Chabot?
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no. Mr. Lungren?
        Mr. Lungren. No.
        The Clerk. Mr. Lungren, no. Mr. Jenkins?
        Mr. Jenkins. No.
        The Clerk. Mr. Jenkins, no. Mr. Cannon?
        Mr. Cannon. No.
        The Clerk. Mr. Cannon, no. Mr. Bachus?
        Mr. Bachus. No.
        The Clerk. Mr. Bachus, no. Mr. Inglis?
        Mr. Inglis. No.
        The Clerk. Mr. Inglis, no. Mr. Hostettler?
        [No response.]
        The Clerk. Mr. Green?
        [No response.]
        The Clerk. Mr. Keller?
        Mr. Keller. No.
        The Clerk. Mr. Keller, no. Mr. Issa?
        Mr. Issa. No.
        The Clerk. Mr. Issa, no. Mr. Flake?
        [No response.]
        The Clerk. Mr. Pence?
        Mr. Pence. No.
        The Clerk. Mr. Pence, no. Mr. Forbes?
        Mr. Forbes. No.
        The Clerk. Mr. Forbes, no. Mr. King?
        Mr. King. No.
        The Clerk. Mr. King, no. Mr. Feeney?
        Mr. Feeney. No.
        The Clerk. Mr. Feeney, no. Mr. Franks?
        Mr. Franks. No.
        The Clerk. Mr. Franks, no. Mr. Gohmert?
        Mr. Gohmert. No.
        The Clerk. Mr. Gohmert, no. Mr. Conyers?
        Mr. Conyers. Aye.
        The Clerk. Mr. Conyers, aye. Mr. Berman?
        Mr. Berman. Aye.
        The Clerk. Mr. Berman, aye. Mr. Boucher?
        Mr. Boucher. No.
        The Clerk. Mr. Boucher, no. Mr. Nadler?
        [No response.]
        The Clerk. Mr. Scott?
        Mr. Scott. Aye.
        The Clerk. Mr. Scott, aye. Mr. Watt?
        Mr. Watt. Aye.
        The Clerk. Mr. Watt, aye. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        Ms. Jackson Lee. Aye.
        The Clerk. Ms. Jackson Lee, aye. Ms. Waters?
        Ms. Waters. Aye.
        The Clerk. Ms. Waters, aye. Mr. Meehan?
        Mr. Meehan. Aye.
        The Clerk. Mr. Meehan, aye. Mr. Delahunt?
        [No response.]
        The Clerk. Mr. Wexler?
        [No response.]
        The Clerk. Mr. Weiner?
        Mr. Weiner. Aye.
        The Clerk. Mr. Weiner, aye. Mr. Schiff?
        [No response.]
        The Clerk. Ms. Sanchez?
        [No response.]
        The Clerk. Mr. Smith?
        [No response.]
        The Clerk. Mr. Van Hollen?
        Mr. Van Hollen. Aye.
        The Clerk. Mr. Van Hollen, aye. Mr. Chairman?
        Chairman Sensenbrenner. No.
        The Clerk. Mr. Chairman, no.
        Chairman Sensenbrenner. Further Members in the chamber who
    wish to cast or change their vote? The gentleman from Ohio, Mr.
    Chabot.
        Mr. Chabot. No.
        The Clerk. Mr. Chabot, no.
        Chairman Sensenbrenner. The gentleman from California, Mr.
    Issa.
        Mr. Issa. No.
        The Clerk. Mr. Issa, no.
        Chairman Sensenbrenner. Other Members in the chamber who
    wish to cast or change their vote? If not, the clerk will
    report.
        The Clerk. Mr. Chairman, Ms. Jackson Lee--Mr. Chairman, Ms.
    Jackson Lee is recorded as aye.
        Chairman Sensenbrenner. The clerk will report.
        The Clerk. Mr. Chairman, there are 9 ayes and 20 noes.
        Chairman Sensenbrenner. And the amendments en bloc are not
    agreed to.
        For what purpose does the gentlewoman from California, Ms.
    Waters, seek recognition?
        Ms. Waters. Mr. Chairman, I have three amendments that I
    will offer en bloc.
        Chairman Sensenbrenner. The clerk----
        Ms. Waters. They're at the desk, and if I may identify them
    as stay of eviction for victims of domestic abuse, homestead
    exemption for seniors, and under-age credit card amendment.
        Chairman Sensenbrenner. Without objection, the----
        Mr. Bachus. Mr. Chairman, as to the last amendment, I'd
    like to reserve a point of order.
        Chairman Sensenbrenner. A point of order is--well, without
    objection, the first two amendments are considered en bloc, and
    the clerk will report them.
        The Clerk. Amendments to S. 256 offered by Ms. Waters. Page
    159, line 13, insert the following before the semicolon:
    ``unless the debtor certifies under penalty of perjury that the
    debtor is a victim of domestic violence and that the physical
    well-being of the debtor or of a child of the debtor would be
    threatened if''----
        Chairman Sensenbrenner. Without objection, the two
    amendments considered en bloc are considered as read. Without
    objection, the third amendment will be considered en bloc, and
    a point of order is reserved against the third amendment.
        [The en bloc amendments follow:]

        Chairman Sensenbrenner. And the gentlewoman from California
    is recognized for 5 minutes.
        Ms. Waters. Thank you very much. Mr. Chairman and Members,
    the homestead exemption for seniors is pretty self-explanatory.
    My amendment would set a mandatory $30,000 Federal minimum
    homestead exemption for debtors who are 62 or older and would
    allow such debtors in bankruptcy to protect some or all of the
    value of their homes from credentials.
        It seems to me that we're forever talking about protecting
    seniors. If we cannot protect seniors and keep them in their
    homes, then we have done nothing. So without going any further,
    that's what that amendment is all about. I would ask for an aye
    vote en bloc on that amendment also.
        The second amendment is a stay of eviction for victims of
    domestic abuse. My amendment would modify the Bankruptcy Code
    to secure better protection for domestic abuse victims by
    granting them relief from summary eviction from their housing.
    This relief would only be available if a domestic violence
    debtor certifies under penalty of perjury that the debtor is,
    in fact, a victim of domestic abuse and that their physical
    well-being or the physical well-being of the debtor's child
    would be threatened if this debtor were evicted. This amendment
    would provide a safe harbor for those victims who face the
    threat of more violence and extreme danger if their homes were
    taken.
        I would ask for an aye vote for these two amendments en
    bloc.
        Mr. Conyers. Would the gentlelady yield to me?
        Ms. Waters. Yes, I yield.
        Mr. Conyers. I want to make a point here, that these three
    amendments are original and are not duplicative of any of the
    amendments that have occurred before: homestead exemption for
    seniors, abuse, domestic violence, victims of abuse, which is a
    large area, not understood by all, and that they are valid,
    each of them in their own right, and I urge the careful
    consideration of the Committee in support of these amendments.
    And thank the gentlelady.
        Chairman Sensenbrenner. Does the gentlelady yield back her
    time?
        Ms. Waters. The gentlelady yields back the time.
        Chairman Sensenbrenner. Does the gentleman from Alabama
    insist on his point of order against the third amendment being
    considered en bloc?
        Mr. Bachus. Yes, I do, Mr. Chairman.
        Chairman Sensenbrenner. The gentleman will make his point
    of order, quickly.
        Mr. Bachus. Mr. Chairman, the amendment--the credit card
    amendment violates house rule XVI(7) and is not germane. The
    fundamental purpose of the amendment is not germane to the
    fundamental purpose of the bill. The amendment, in fact, amends
    the Truth in Lending statute, and jurisdiction for that statute
    is outside the jurisdiction of this Committee. And as such, the
    amendment is not germane.
        Chairman Sensenbrenner. Does the gentlewoman from
    California wish to speak on the point of order?
        Ms. Waters. Well, Mr. Chairman, I do wish to speak on the
    point of order, and I really don't know why I'm going through
    this charade because it really doesn't make any difference.
    We're not allowed any amendments here today anyway. They're
    going to be voted down. So I guess it doesn't make any
    difference whether it's done on a point of order or whether you
    call the roll for the vote. But----
        Chairman Sensenbrenner. Okay. The----
        Ms. Waters. But I think--I have not finished, Mr. Chairman.
    I think it is important to note that I think the gentleman from
    Alabama is opposing it because he knows that when this
    Committee hears about these under-age students who are being
    solicited by these credit card companies, running up this debt,
    and basically setting up all kind of obstacles to their being
    able to be successful when they graduate from college, then he
    knows he's embarrassed by that. So he may have a point of order
    that you probably will rule in his favor. So be it. It doesn't
    matter how it dies. It's going to die one way or the other.
        Chairman Sensenbrenner. The Chair--the Chair is prepared to
    rule. One of the tests of germaneness of an amendment is
    whether the amendment, if introduced as free-standing
    legislation, would be referred by the parliamentarians and the
    Speaker to the Committee that is considering the bill for
    amendment. The amendment--the third amendment that is proposed
    by the gentlewoman from California, Ms. Waters, is an amendment
    to the Fair Credit Reporting Act, I believe, which is not in
    the jurisdiction of the Judiciary Committee, but is in the
    jurisdiction of the Financial Services Committee. Therefore,
    the amendment is not germane, and the Chair sustains the point
    of order by the gentleman from Alabama relative to the third
    amendment being considered en bloc. The question is on agreeing
    to the other two amendments----
        Mr. Bachus. Mr. Chairman, it's the Truth in Lending Act.
        Chairman Sensenbrenner. The Chair stands corrected on that.
    The question is on agreeing to the other two amendments offered
    en bloc by the gentlewoman from California, Ms. Waters. Those
    in favor will say aye? Opposed, no? The noes appear to have it.
    The noes have it, and the amendment is not agreed to.
        Are there further amendments? The gentleman from North
    Carolina, Mr. Watt.
        Mr. Watt. Thank you, Mr. Chairman. I call up amendments--
    Watt amendments 04, 06, and 06 and request their consideration
    en bloc.
        Chairman Sensenbrenner. Without objection, the amendments
    will be considered en bloc, and the clerk will report the
    amendments.
        The Clerk. Mr. Chairman, I have 03 and 04.
        Chairman Sensenbrenner. The gentleman from North Carolina?
        Mr. Watt. I'm looking at 04, 05, and 06.
        Chairman Sensenbrenner. Would the gentleman from North
    Carolina briefly describe the subject matter? That might help
    the clerk.
        Does the clerk have them now? No.
        Mr. Watt. 04 is the one that says ``04'' in the corner. 05
    is the one that says----
        The Clerk. Mr. Chairman, I have 03, 04, and 06.
        Mr. Watt.--``05'' in the corner. 06 is the one that says
    ``06'' in the corner.
        Chairman Sensenbrenner. I believe the clerk's got what the
    gentleman from North Carolina wishes to offer, and the clerk
    will report the amendments considered en bloc.
        The Clerk. Amendments to S. 256
        Mr. Watt. I ask unanimous consent the amendments be
    considered as read.
        Chairman Sensenbrenner. Without objection.
        [The en bloc amendments follow:]

        Chairman Sensenbrenner. And the gentleman is recognized for
    5 minutes.
        Mr. Watt. Thank you, Mr. Chairman.
        Amendment 04, which is supported by the American Bar
    Association and a whole host of other people, accomplishes two
    things. It eliminates provisions in the bill that would require
    the debtor's attorney to certify the accuracy of the debtor's
    schedules under penalty of harsh court sanctions, and it
    modifies provisions that would require attorneys to certify a
    debtor's ability to make future payments under a reaffirmation
    agreement.
        Section 102 unnecessarily imposes a harsher standard on
    debtor attorneys to certify pleadings filed on behalf of the
    debtor. No similar heightened standard is imposed on credential
    attorneys, nor for attorneys outside the bankruptcy context. By
    holding the debtor's attorney personally liable for the
    accuracy of their clients' schedules, these provisions would
    force the attorney to hire private investigators and appraisers
    to verify information, adding thousands of dollars to the cost
    of representing a debtor in bankruptcy. Without this amendment,
    I believe that the bankruptcy representation--that bankruptcy
    representation would become unaffordable for most debtors.
        Also, the impact on the pro bono bar providing bankruptcy
    services would dwindle with the likely result that thousands of
    pro se debtors would clog up the court system or debtors will
    not seek the relief they need at all.
        Amendment 05 corrects the provisions that would require
    bankruptcy attorneys to identify and advertise themselves as
    debt relief agencies and comply with intrusive new regulations
    that would interfere with the confidential attorney-client
    relationship. Sections 227 and two twenty--through 229 of the
    bill would seriously interfere with the attorney-client
    relationship by prohibiting debtor's bankruptcy attorneys and
    many non-bankruptcy attorneys from giving their clients certain
    proper bankruptcy planning advice. These provisions would also
    have a chilling effect on debtor's lawyers and their firms by
    requiring all of their newsletters, seminars, advertising
    materials to include awkward and misleading statements
    identifying themselves as debt relief agencies.
        Amendment 06 would make a--is a technical amendment that
    seeks to close an unintended, I suppose, loophole in the
    current bill that would allow sensitive personal consumer
    information to be sold on the eve of a corporate bankruptcy.
    The sale of consumer lists is not a new method to increase the
    capital available to failing companies, and as we have seen
    with the recent debacle with ChoicePoint, such lists are highly
    sensitive and the distribution of personal information included
    can be disastrous to consumers. Lists of consumer information
    can be worth millions of dollars, a tempting asset to liquidate
    when a company is on the way into bankruptcy.
        It is for these reasons that the privacy policy enforcement
    in the Bankruptcy Act of 2000 sought to exclude personally
    identifiable information from the assets of the debtor----
        Mr. Cannon. Would the gentleman yield----
        Mr. Watt. The bill prohibited--let me just finish and I'll
    be through, and then you'll have 5 minutes.
        The bill prohibits the sale or disclosure--the amendment--
    I'm sorry. The bill prohibited the sale or disclosure of
    personally identifiable information if doing so violates a
    privacy policy of the debtor in effect at the time at which
    such information was collected. The Consumer Privacy Act also
    protected consumer information in the same manner. However,
    this bill doesn't do that, and I'm happy to yield to the
    gentleman----
        Mr. Cannon. Thank you. I might suggest, you know, I have
    concerns about some of these issues. I don't want to see the
    bill amended at this point in time. If the gentleman----
        Mr. Watt. That is quite obvious at the end of the day.
        Mr. Cannon. If the gentleman would consider withdrawing the
    amendments, I can assure him that I'd be willing to work with
    him in the Subcommittee without making any commitments for the
    full Committee on the issue to take a look at some of these
    things.
        Mr. Watt. Well, I would hope that the gentleman will just
    do as he has all throughout the day and just vote these things
    down and still if it's a problem take them up in the
    Subcommittee. I hope the gentleman is not saying he's going to
    punish me for offering an amendment by not----
        Mr. Cannon. Absolutely no.
        Mr. Watt.--taking up something that he thinks is important.
        Mr. Cannon. Let me just suggest these are--there are issues
    here that we need to consider. We'll look at those in the
    order----
        Mr. Watt. Well, I'm not going to ask for a recorded vote.
    You all are going to vote them down and--you know.
        Chairman Sensenbrenner. The gentleman's time has expired.
    The question is on the amendments en bloc offered by the
    gentleman from North Carolina, Mr. Watt. Those in favor will
    say aye? Opposed, no? The noes appear to have it. The----
        Mr. Watt. See, I told you.
        [Laughter.]
        Chairman Sensenbrenner. The noes do have it, and the
    amendments en bloc are not agreed to.
        Are there further amendments? If there are no further
    amendments, the question----
        Ms. Jackson Lee. Mr. Chairman? I don't have an amendment.
    I'd like to put something in the record. I ask to strike the
    last word for submission----
        Chairman Sensenbrenner. The gentlewoman is recognized for 5
    minutes.
        Ms. Jackson Lee. I wanted to add into the record, Mr.
    Chairman, the complete testimony of Professor Elizabeth Warren,
    Leo Gottlieb Professor of Law at Harvard Law School, February
    10, 19--excuse me, February 10, 2005. And I wanted to----
        Chairman Sensenbrenner. Where--well, if the gentlewoman
    will yield, where was this testimony presented?
        Ms. Jackson Lee. In the United States Senate.
        Chairman Sensenbrenner. Because the rules prohibit us
    including in the record proceedings in the other body, I would
    ask the gentlewoman to withdraw her unanimous consent request.
    The Senate has published that hearing, and it is a part of the
    record of the Senate consideration of this legislation.
        Ms. Jackson Lee. I will at this time withdraw that request,
    Mr. Chairman, and I've made mention of it. I want to make sure
    that I did have included, however, a bankrupt reform article. I
    believe I did, but I want to double check, and that's by David
    S. Broder, and that's Sunday, March 13, 2005.
        Chairman Sensenbrenner. The gentlewoman has already asked
    unanimous consent to include that in the record and has
    received it from the Committee.
        Ms. Jackson Lee. Thank you.
        Chairman Sensenbrenner. Are there further----
        Ms. Waters. Mr. Chairman?
        Chairman Sensenbrenner. The gentlewoman from California,
    Ms. Waters.
        Ms. Waters. I, too, would seek unanimous consent to submit
    for the record my statements on the bills that I introduced. I
    did not give the complete statements in the interest of time,
    and I----
        Chairman Sensenbrenner. Without objection, the statements
    of the gentlewoman from California will be included in the
    record.
        [The prepared statements of Ms. Waters follow:]

    Prepared Statement of the Honorable Maxine Waters, a Representative in
                     Congress from the State of California

        Mr. Chairman, I have an amendment at the desk.
        Mr. Chairman, I ask unanimous consent that the reading be dispensed
    with so that I may explain my amendment.
        Mr. Chairman, the very modest amendment I am now offering will help
    protect seniors who have to file for bankruptcy from losing their
    homes. My amendment sets a mandatory $30,000 federal minimum
    ``homestead exemption'' for debtors who are 62 or older, and would
    allow such debtors in bankruptcy to protect some or all of the value of
    their homes from creditors. It also would substantially decrease the
    likelihood that many of these seniors must sell their homes.
        Mr. Chairman, many of our seniors have been driven into bankruptcy
    because of huge medical expenses that they could not pay, job losses,
    and other events beyond their control.
        When these seniors face the misfortune of bankruptcy because of
    medical expenses, they should not also have to lose virtually all of
    the equity in their home, equity that many of them have saved and
    struggled throughout their lifetime to build.
        Nor should they be forced to sell their home if they file for a
    bankruptcy, a result that frequently is the case in states with low
    homestead exemptions. In many cases, a home may be an older person's
    only significant asset, representing an entire life savings.
        My amendment sets a $30,000 nationwide floor on the homestead
    exemption for seniors, debtors who are 62 years old or older. States,
    like California, that have a more generous homestead exemption would
    not be affected by my amendment, but my amendment would protect more of
    the equity of older debtors who live in states like Ohio, with low
    homestead exemptions.
        Mr. Chairman, some states have very low homestead exemptions. Ohio
    has an exemption of $5,000, and North Carolina has an exemption of
    $10,000. Currently, only two states have a higher exemption for the
    elderly. California's regular exemption is $50,000, but it is $150,000
    for seniors. Maine's exemption is $35,000, but $70,000 for the elderly.
    Wisconsin's homestead exemption is $40,000 across the board. Florida
    and Texas have an unlimited dollar value homestead exemption while many
    states, like Ohio, have exemptions as low as $5,000.
        Mr. Chairman, I believe that Federal law should provide additional
    protection to seniors in states where the homestead exemption is very
    low. A senior debtor should be entitled to a decent degree of basic
    protection for his home equity, wherever that senior happens to live.
        Many of our seniors have scrimped and saved for a lifetime to buy
    their homes. We should do all that we can to help protect them from
    having to sell their home because illness or job loss required them to
    file for bankruptcy.
        Mr. Chairman, the pain and burden for our seniors of dealing with
    huge, unexpected medical expenses or job loss is enormous. Let's not
    add insult to injury by making them suffer the loss of their homes as
    well. Please join me in preserving the dignity of our seniors by
    supporting my homestead exemption for seniors' amendment.
        I yield back the balance of my time.
                                   __________

    Prepared Statement of the Honorable Maxine Waters, a Representative in
                     Congress from the State of California

        Mr. Chairman, I have an amendment at the desk.
        Mr. Chairman, I ask unanimous consent that the reading be dispensed
    with so that I may explain my amendment.
        Mr. Chairman, this is an unbalanced, unfair anti-consumer bill that
    is tilted way too far in favor of the credit card companies. My
    amendment makes a modest attempt at restoring some balance by holding
    credit card companies responsible for their reckless extensions of
    credit to young people without regard to their capacity to handle such
    credit card debt.
        My amendment would that an application for a credit card by someone
    under 21 have the signature of the young person's parent or guardian,
    that is, that there be a co-signer, or the submission of financial
    information by the under 21 year old consumer that demonstrates that
    this young applicant has the financial capacity to repay the credit
    sought. Under my amendment, no credit card could be issued to anyone
    under twenty one whose application did not meet this requirement.
        Mr. Chairman, I am very concerned that because of the reckless
    practices of the credit card companies, many young people with little
    financial education or sophistication end up with huge debts that they
    simply cannot handle. The credit card companies, with their relentless
    marketing campaigns and endless television ads, seduce our young people
    with promises of the good life, without taking any responsibility for
    those who cannot responsibly handle the credit that they extend.
        In recent years, there has been a huge effort by the credit card
    companies to market their cards to college students, and many students
    just starting out are being saddled with huge credit card debts that
    they cannot repay, debts that drive some of them into bankruptcy.
        All of us know about the t-shirt giveaways, the low ``teaser''
    rates that are used to entice young people, and the large number of
    marketing representatives who appear on college campuses at sporting
    events and other venues to push credit cards.
        Mr. Chairman, for all too many of our young people, these cards are
    not so-called ``convenience'' cards that are paid in full every month.
    They often result in the creation of long term debt that these students
    lack the means to repay. My amendment would provide a means to
    significantly decrease the chance that a young borrower would get into
    financial trouble.
        Let's do something meaningful to protect our young people from
    being victimized by the credit card companies. I urge all of my
    colleagues to support this common sense amendment.
        I yield back the balance of my time.
                                   __________

    Prepared Statement of the Honorable Maxine Waters, a Representative in
                     Congress from the State of California

        Mr. Chairman, I have an amendment at the desk.
        Mr. Chairman, I ask unanimous consent that the reading be dispensed
    with so that I may explain my amendment.
        Mr. Chairman, my amendment would provide a safe harbor for the many
    victims of domestic abuse whose physical well-being or their children's
    well-being would be greatly threatened by summary eviction procedures
    authorized under this bill.
        Mr. Chairman, women and children who are victims of domestic
    violence join the ranks of the homeless every day. For women are so
    desperate to flee domestic abuse that they too often find themselves
    without funds with which to support themselves and their children.
    Victims often have a difficult time finding room at domestic violence
    shelters. Furthermore, domestic violence victims have a difficult time
    finding affordable long term housing because of the severe shortage of
    long-term affordable housing.
        Mr. Chairman, domestic violence victims also find it extremely
    difficult to find and keep jobs. Their batterers often harass them at
    their places of work, which frequently results in the loss of their
    jobs. This directly affects their economic stability and often results
    in the inability to pay for life's basic necessities--such as housing.
        Mr. Chairman, my amendment would provide protection for the
    overwhelming number of women and children who are trying to escape and
    survive domestic abuse and would greatly aid in allowing these victims
    to start a new life for themselves and their children. It would keep
    more of them in a safe and secure home.
        Mr. Chairman, my amendment would modify the bankruptcy code to
    secure better protection for domestic abuse victims by granting them
    relief from summary eviction from their housing. Please note, this
    relief would only be available if a domestic violence debtor certifies,
    under penalty of perjury, that the debtor is, in fact, a victim of
    domestic abuse and that their physical well-being or the physical well-
    being of the debtor's child would be threatened if this debtor were
    evicted. This amendment would provide a safe harbor for those victims
    who face the threat of more violence and extreme danger if their homes
    were taken.
        Mr. Chairman, we must recognize that these victims face the threat
    of losing their lives due to abuse and violence. They should not be
    forced from their homes dues to financial difficulties that are often
    out of their hands. Domestic abuse victims need the chance to start a
    new life free from violence, in a safe and secure home. Please support
    my amendment to carve out an exemption for domestic violence victims
    from summary eviction procedures authorized by this bill.
        I yield back the balance of my time.

        Mr. Watt. Mr. Chairman?
        Chairman Sensenbrenner. The gentleman from North Carolina.
        Mr. Watt. I ask unanimous consent to submit for the record
    a letter from the American Bar Association dated March 11,
    2005, to Chairman Sensenbrenner and to John Conyers related to
    one of the three amendments.
        Chairman Sensenbrenner. Without objection, that letter will
    be included in the record.
        [The material referred to follows:]

        Chairman Sensenbrenner. Are there further amendments? If
    there are no further amendments, a reporting quorum is present.
    The question is on reporting the bill Senate 256 favorably to
    the full House. Those in favor will say aye? Opposed, no?
        Mr. Conyers. Mr. Chairman, I ask for a recorded vote?
        Chairman Sensenbrenner. The ayes appear to have it, and a
    recorded vote will be ordered. Those in favor of reporting the
    bill favorably to the full House will, as your names are
    called, answer aye, those opposed, no, and the clerk will call
    the roll.
        The Clerk. Mr. Hyde?
        [No response.]
        The Clerk. Mr. Coble?
        Mr. Coble. Aye.
        The Clerk. Mr. Coble, aye. Mr. Smith?
        Mr. Smith of Texas. Aye.
        The Clerk. Mr. Smith, aye. Mr. Gallegly?
        Mr. Gallegly. Aye.
        The Clerk. Mr. Gallegly, aye. Mr. Goodlatte?
        Mr. Goodlatte. Aye.
        The Clerk. Mr. Goodlatte, aye. Mr. Chabot?
        Mr. Chabot. Aye.
        The Clerk. Mr. Chabot, aye. Mr. Lungren?
        Mr. Lungren. Aye.
        The Clerk. Mr. Lungren, aye. Mr. Jenkins?
        Mr. Jenkins. Aye.
        The Clerk. Mr. Jenkins, aye. Mr. Cannon?
        Mr. Cannon. Aye.
        The Clerk. Mr. Cannon, aye. Mr. Bachus?
        Mr. Bachus. Aye.
        The Clerk. Mr. Bachus, aye. Mr. Inglis?
        Mr. Inglis. Aye.
        The Clerk. Mr. Inglis, aye. Mr. Hostettler?
        [No response.]
        The Clerk. Mr. Green?
        Mr. Green. Aye.
        The Clerk. Mr. Green, aye. Mr. Keller?
        Mr. Keller. Aye.
        The Clerk. Mr. Keller, aye. Mr. Issa?
        [No response.]
        The Clerk. Mr. Flake?
        [No response.]
        The Clerk. Mr. Pence?
        Mr. Pence. Aye.
        The Clerk. Mr. Pence, aye. Mr. Forbes?
        Mr. Forbes. Aye.
        The Clerk. Mr. Forbes, aye. Mr. King?
        Mr. King. Aye.
        The Clerk. Mr. King, aye. Mr. Feeney?
        Mr. Feeney. Aye.
        The Clerk. Mr. Feeney, aye. Mr. Franks?
        Mr. Franks. Aye.
        The Clerk. Mr. Franks, aye. Mr. Gohmert?
        Mr. Gohmert. Aye.
        The Clerk. Mr. Gohmert, aye. Mr. Conyers?
        Mr. Conyers. No.
        The Clerk. Mr. Conyers, no. Mr. Berman?
        Mr. Berman. No.
        The Clerk. Mr. Boucher?
        Mr. Boucher. Aye.
        The Clerk. Mr. Boucher, aye. Mr. Nadler?
        Mr. Nadler. No.
        The Clerk. Mr. Nadler, no. Mr. Scott?
        Mr. Scott. No.
        The Clerk. Mr. Scott, no. Mr. Watt?
        Mr. Watt. No.
        The Clerk. Mr. Watt, no. Ms. Lofgren?
        [No response.]
        The Clerk. Ms. Jackson Lee?
        [No response.]
        The Clerk. Ms. Waters?
        Ms. Waters. No.
        The Clerk. Ms. Waters, no. Mr. Meehan?
        Mr. Meehan. No.
        The Clerk. Mr. Meehan, no. Mr. Delahunt?
        [No response.]
        The Clerk. Mr. Wexler?
        [No response.]
        The Clerk. Mr. Weiner?
        Mr. Weiner. No.
        The Clerk. Mr. Weiner, no. Mr. Schiff?
        Mr. Schiff. No.
        The Clerk. Mr. Schiff, no. Ms. Sanchez?
        Ms. Sanchez. No.
        The Clerk. Ms. Sanchez, no. Mr. Smith?
        [No response.]
        The Clerk. Mr. Van Hollen?
        Mr. Van Hollen. No.
        The Clerk. Mr. Van Hollen, no. Mr. Chairman?
        Chairman Sensenbrenner. Aye.
        The Clerk. Mr. Chairman, aye.
        Chairman Sensenbrenner. Are there Members who wish to cast
    or change their vote? The gentleman from Arizona, Mr. Flake.
        Mr. Flake. Aye.
        The Clerk. Mr. Flake, aye.
        Chairman Sensenbrenner. Further Members who wish--the
    gentlewoman from Texas, Ms. Jackson Lee.
        Ms. Jackson Lee. No.
        The Clerk. Ms. Jackson Lee, no.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their votes? If not, the clerk will report. And while
    the clerk is adding up, I would remind the Members that we have
    one more bill that needs to be considered that will go very
    briefly. It's a resolution of--is the gentleman from
    California, Mr. Issa, recorded?
        Mr. Issa. On final passage?
        Chairman Sensenbrenner. Yes.
        Mr. Issa. Aye.
        The Clerk. Mr. Issa, aye.
        Chairman Sensenbrenner. Okay. The clerk will report--the
    gentleman from Massachusetts, Mr. Delahunt.
        Mr. Delahunt. No.
        The Clerk. Mr. Delahunt, no.
        Chairman Sensenbrenner. Further Members who wish to cast or
    change their vote?
        [No response.]
        Chairman Sensenbrenner. The clerk will report.
        The Clerk. Mr. Chairman, there are 22 ayes and 13 noes.
        Chairman Sensenbrenner. And the motion to report favorably
    is agreed to. Without objection, the staff is directed to make
    any technical and conforming changes, and all Members will be
    given 2 days, as provided by the House rules, in which to
    submit additional dissenting, supplemental, or minority views.
        [Intervening business.]
        The business scheduled before the Committee having been
    completed, the Committee stands adjourned.
        [Whereupon, at 5:42 p.m., the Committee was adjourned.]

                                Dissenting Views

                          Additional Dissenting Views

        In addition to the concerns raised in the general
    dissenting views, we remain disappointed by the Committee's
    consistent refusal to put an end to two of the most notorious
    abuses of the bankruptcy system--the financial planning
    strategy by which debtors are able to purchase expensive homes
    in States which allow a debtor to exempt an interest in a
    primary residence of a unlimited dollar value,\1\ and the
    development of ``asset protection trusts,'' which would allow
    individuals to set up a trust for which they are the sole
    beneficiaries, and potentially place substantial assets outside
    the estate, and beyond the reach of the creditors.
    ---------------------------------------------------------------------------
        \1\ The following are the States that have unlimited homestead
    exemptions: Florida, Iowa, Kansas, South Dakota, Texas, and the
    District of Colombia.
    ---------------------------------------------------------------------------

                     I. THE UNLIMITED HOMESTEAD EXEMPTION.

        The unlimited homestead exemption, known s the
    ``millionaires' loophole,'' has allowed the very wealthy to
    shield from their creditors vast sums of money in palatial
    homes. The current Code allows a debtor to claim a State's
    exemptions.\2\ A State may ``opt out'' and bar a debtor from
    using the federal exemptions in sec. 522(d), which are, in many
    cases, lower than exemptions allowed under State law.\3\
    ---------------------------------------------------------------------------
        \2\ 11 U.S.C. 522(b)(2)(A).
        \3\ 11 U.S.C. 522(b)(1).
    ---------------------------------------------------------------------------
        Over the years, many of us have offered amendments that
    would have placed an overall limit on State homestead
    exemptions, or repealed State opt-out so that debtors would be
    able to avail themselves of the federal exemptions if they are
    higher than applicable State law.\4\ In each case, these
    proposals have been rejected. A proposal to place an absolute
    cap on State homestead exemptions in the amount of $1 million
    was even rejected by House conferees to H.R. 333 in the 107th
    Congress. Apparently, the proponents of this legislation
    believe that there is no amount too high for the wealthiest
    debtors to shelter in their homesteads, and that the poorest
    debtors are not entitled to even the modest floor provided by
    federal law.\5\
    ---------------------------------------------------------------------------
        \4\ Rep. Waters offered an amendment setting a $30,000 Federal
    minimum homestead exemption for debtors 62 and older to protect some or
    all of the value of their homes from credentials in bankruptcy. The
    amendment was rejected by voice vote. Rep. Berman and Rep. Meehan
    offered an amendment to create a uniform Federal floor for homestead
    exemptions of $150,000 for debtors with substantial medical debts or a
    substantial loss in income, alimony, or child support due to medical
    problems. The amendment was rejected with 13 ayes and 18 noes.
        \5\ 11 U.S.C. 522(d)(1) allows a debtor to exempt up to $18,450 in
    value in the debtor's residence.
    ---------------------------------------------------------------------------
        These proposals would have, respectively, helped to
    eliminate the biggest loophole in the Bankruptcy Code, and
    eliminate a significant inequity for homeowners of the most
    modest means. The proposals reflect the recommendations of the
    National Bankruptcy Review Commission, that Congress provide a
    meaningful cap on homestead exemptions as well as a federal
    floor.\6\
    ---------------------------------------------------------------------------
        \6\ Bankruptcy: The Next Twenty Years, Final Report of the National
    Bankruptcy Review Commission, Recommendation 1.2.2, at 125-133 (Oct.
    20, 1997). The Commssion recommended a national cap of $100,000, and a
    national floor of $20,000.
    ---------------------------------------------------------------------------
        The rationale that has been given for the so-called
    ``needs-based'' reforms proposed in S. 256 is to eliminate
    abuses of the bankruptcy laws-abuses which proponents of the
    legislation have characterized as the use of the Bankruptcy
    Code as a ``financial planning tool.''
        Yet while the bill would presume that debtors of modest
    means are abusing the system if they can pay general unsecured
    creditors as little as $100 a month in chapter 13, it continues
    to permit, indeed it endorses--the most notorious abuse of the
    consumer bankruptcy system of all.
        If the sponsors were truly serious about curtailing abuses
    in bankruptcy, this is the place to start. Some of the more
    notorious cases have included:

             Marvin Warner, a former ambassador to
            Switzerland and the owner of a failed Ohio Savings &
            Loan, who paid off only a fraction of $300 million in
            bankruptcy claims while keeping his multi-million-
            dollar horse ranch near Ocala, Florida.\7\
    ---------------------------------------------------------------------------
        \7\ Larry Rohter, ``Rich Debtors Finding Shelter Under a Populist
    Florida Law,'' N.Y. Times A-1 (July 25, 1993).

             Martin A. Siegel, a former Wall Street
            investment banker convicted of insider trading. While
            facing a $2.75 billion civil suit, he bought a $3.25
            million, 7,000-square-foot beachfront home in Ponte
            Vedra Beach.\8\
    ---------------------------------------------------------------------------
        \8\ Id.

             Former baseball commissioner Bowie Kuhn,
            whose Manhattan law firm went into bankruptcy. After
            creditors seized his weekend house in the Hamptons and
            were about to attach his $1.2 million home in
            Ridgewood, New Jersey, Kuhn acquired a million-dollar
            house in Florida with five bedrooms and five baths.\9\
    ---------------------------------------------------------------------------
        \9\ Id.

             Dr. Carlos Garcia-Rivera, a Miami physician
            with no malpractice insurance, who was named in four
            separate malpractice actions, filed for bankruptcy
            protection, and kept a $500,000 home with a 100-foot
            swimming pool.\10\
    ---------------------------------------------------------------------------
        \10\ David J. Morrow, ``Key to a Cozier Bankruptcy: Location,
    Location, Location,'' N.Y. Times, A-1 (Jan. 7, 1998).

             Dallas developer, Talmadge Wayne Tinsley, who
            filed under chapter 7 after incurring $60 million in
            debts. Tinsley objected to the Texas law that permitted
            him to keep only one acre of his $3.5 million, 3.1-acre
            magnolia-lined estate. But that acre included a five-
            bedroom, six-and-a-half-bath mansion with two studies,
            a pool and a guest house.\11\
    ---------------------------------------------------------------------------
        \11\ Id.

             Movie actor, Burt Reynolds, who declared
            bankruptcy in 1996, claiming more than $10 million in
            debt. Reynolds kept a $2.5 million home--appropriately
            named ``Valhalla''--while his creditors received 20
            cents on the dollar.\12\
    ---------------------------------------------------------------------------
        \12\ Eliot Kleinberg, ``Reynolds Gets Out from under Bankruptcy,''
    The Palm Beach Post, (Oct. 8, 1998)

             Paul Bilzerian, who used Florida's unlimited
            homestead exemption to avoid his creditors. He filed
            for bankruptcy in 1991, and filed again last month. He
            retains his $5 million Florida home, and can completely
            avoid the $200 million in debt owed his creditors,
            including the IRS.\13\
    ---------------------------------------------------------------------------
        \13\ Hearing Before the Senate Committee on the Judiciary on S.
    220, (Written statement of Brady C. Williamson), at 6 (Feb. 8, 2001).

        The situation in Florida has become so notorious that one
    Miami bankruptcy judge told the New York Times, ``You could
    shelter the Taj Mahal in this State and no one could do
    anything about it.'' \14\
    ---------------------------------------------------------------------------
        \14\ Judge A. Jay Cristol, quoted in Rohter, supra note 6.
    ---------------------------------------------------------------------------
        As the Wall Street Journal noted recently concerning the
    Kuhn case, ``the bill that Congress will soon send to a
    welcoming President Bush would make [pre-bankruptcy planning
    using the unlimited homestead exemption] more difficult, but
    that's symbolic. Few people anticipating bankruptcy have the
    cash to pull off that maneuver. This is a national problem that
    demands a uniform solution. Without a nationwide cap, debtors
    who live in the 45 States that cap the exemption at $200,000 or
    less are free to relocate to one of the five so-called
    ``debtors'' paradises ``that have no cap at all.'' \15\
    ---------------------------------------------------------------------------
        \15\ Footnote 10: David Wessel, ``A Law's Muddled Course,'' The
    Wall Street Journal, at 1 (Feb. 22, 2001).
    ---------------------------------------------------------------------------
        Indeed, the Florida Supreme Court has ruled that even
    fraudulent transfers are protected by the unlimited homestead
    exemption under that State's constitution.\16\
    ---------------------------------------------------------------------------
        \16\ Havoco of America, Ltd. v. Hill, No. SC 99-98 (June 21, 2001).
    ---------------------------------------------------------------------------
        The sponsors try to claim that they have closed the
    loophole by placing certain restrictions on State homestead
    exemptions. While true, these restrictions still leave the
    unlimited homestead exemption largely intact for most wealthy
    debtors. To the extent that the restrictions may prevent some
    forms of abuse, they will also have unintended consequences
    that might harm innocent debtors who inadvertently run afoul of
    the complex new rules attached to exempt property.
        The bill does not place an absolute national dollar cap on
    homestead exemptions. People who, with the exceptions made in
    the bill as described below, would otherwise be entitled to an
    unlimited homestead exemption, would still be able to claim the
    exemption.
        The bill does not alter the opt out rule in the Bankruptcy
    Code, so there is still no federal floor.
        Domiciliary Requirement: The domiciliary requirement
    determines which State's exemptions the debtor is allowed to
    claim.
        Sec. 307 of the bill requires a debtor to claim as a
    domiciliary the place of residence for the greater part of the
    730 days preceding the date of the filing of the petition. This
    applies for claiming any property exemptions, not just the
    homestead exemption. Current law is 180 days.
        While it would make pre-bankruptcy planning more difficult
    for a wealthy debtor seeking a jurisdiction with generous
    property exemptions, it would also have a substantial impact on
    a debtor who moves from a jurisdiction with a low exemption to
    a jurisdiction with a high exemption.
        For example, a debtor who lives in New York and retires to
    Florida would get caught in this net. If the debtor sold her
    home in New York, moved to Florida, and purchased a home in
    Florida with the proceeds of the sale, became sick and had to
    file for bankruptcy (which is a common occurrence) within the
    730 period, she would not be able to use the Florida exemption
    and keep the full value of her home. Instead, she would have to
    use the New York exemption of $10,000. The rest would be
    available to pay her creditors. If there is excess value (above
    the equity and transaction costs) the trustee would have a duty
    to sell the home to generate funds to pay creditors. The debtor
    would get a check for $10,000, and lose her home. This would be
    even less than the federal exemption of $18,450, so she would
    be harmed even more by the failure of Congress to adopt a
    federal floor.
        Converting a non-exempt asset into an exempt homestead
    asset: The bill provides, in sec. 308, that a debtor who
    converted a non-exempt asset into an interest in an exempt
    homestead within the ten year period ending on the date of the
    filing of the petition, would have the allowed exemption
    reduced by the amount of that additional interest. This
    provision requires proof that the debtor did so with the intent
    to hinder, delay or defraud a creditor. Because this is such a
    high standard of proof, it is likely that this provision will
    be rarely enforced.
        Example: Debtor has $100,000 in a bank account. Debtor
    closes the account and uses it to pay down a mortgage on her
    residence. She now $150,000 in the home, all of which is
    exempt. The debtor would get to claim the full amount as exempt
    unless a creditor is able to prove that the debtor moved the
    funds from the non-exempt asset (the bank account) to the
    exempt asset (the homestead) with the intent to hinder delay
    and defraud a creditor. If the creditor is able to meet that
    burden of proof, the debtor may claim only the $50,000 interest
    in the homestead as exempt.
        Another domiciliary requirement and conversion of non-
    exempt assets limitation: Sec. 322 limits a debtor to $125,000
    in a homestead exemption for any interest in a homestead that
    was acquired 1215 days before the date of the filing of the
    petition that exceeds in the aggregate $125,000 in value. It
    does not apply to a debtor who is a family farmer under ch. 12
    of the Code, or a debtor who acquires the interest within the
    same State. It only applies to a debtor who acquires the
    interest in a homestead in a State other than the State in
    which the debtor lived within the look-back period. Thus, if a
    debtor who lived in Texas acquired an interest in a homestead
    in Texas during the look-back period, the $125,000 cap would
    not apply. It would, however, apply to a New York senior who
    sold her home, moved to Florida, purchased a home in Florida
    with the proceeds from the sale of the New York home, got sick
    and had to file within the 1,215-day period. Because she would
    have acquired an interest in the property in excess of
    $125,000, she would be limited to $125,000. The rest of her
    equity could be used to pay her creditors.
        Cap on homestead exemption for certain types of wrongdoing:
    Sec. 322 also caps a debtor's homestead exemption at $125,000,
    if:

             The court, after notice and a hearing,
            determines that the debtor has been convicted of a
            felony, as defined in 18 U.S.C. 3156, which, under the
            circumstances, demonstrating that the filing of the
            case was an abuse of the provisions of the Code;

             The debtor owes a debt arising from a
            violation of the Federal or State securities laws;
            fraud, deceit or manipulation in a fiduciary capacity
            or in connection with he purchase or sale fo any
            security registered under section 12 or 15(d) of the
            Securities Exchange Act of 1934, or section 6 of the
            Securities Act of ``1933; any civil remedy under 18
            U.S.C. 1964 [the RICO statute]; 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. The last clause
            does not include simple negligence resulting in serious
            physical injury or death. This reflects a concern among
            some proponents of the bill that doctors whose
            malpractice caused serious physical injury or death not
            lose their unlimited homestead exemption. The
            limitations due to securities violations and the RICO
            judgments were added in response to concerns that
            former Enron Chairman Kenneth Lay would be entitled to
            an unlimited homestead exemption in his native Texas
            should he file for bankruptcy. Mr. Lay has not,
            however, filed for bankruptcy, and it is not yet clear
            whether he will be found by a court to have run afoul
            of any of the enumerated offenses.

        There is also a savings clause that a debtor who owes a
    debt of the kind described above would not lose her homestead
    exemption over $125,000, to the extent that the equity is
    reasonably necessary for the support of the debtor and any
    dependent of the debtor. It is an outrage that the same
    ``reasonably necessary standard'' that would protect the
    unlimited homestead exemption is the same one that the drafters
    of the bill specifically chose to remove from the Code, in
    favor the means test in sec. 102 of the bill, and the IRS
    standards to determine a debtor's allowed expenses.
        While these amendments may eliminate a few of the abuses,
    they do not solve the problem. Wealthy debtors who are able to
    afford skillful legal advice, and are sophisticated enough to
    engage in complex pre-bankruptcy planning, will, in many cases,
    will be able to evade the paltry restrictions in this bill.
    Truly needy debtors, the kind whose life savings may be bound
    up in their residence, and who can afford neither sophisticated
    legal advice, or complex pre-bankruptcy planning, will get
    caught in the many twists and turns that will now be added to
    the Code. Far from eliminating the abuse of the unlimited
    homestead exemption, this bill will have the perverse effect of
    perpetuating it while creating new traps for the truly needy
    unsophisticated debtor.
        What message does it send when Congress subjects middle-
    class debtors to a means test and other onerous changes to the
    Code, while permitting the wealthy to continue to place their
    millions out of reach of their creditors? A bill this rife with
    favoritism toward wealthy debtors and against middle class
    families is anything but a ``Bankruptcy Abuse Prevention and
    Consumer Protection Act.''
        If Congress is serious about curbing abuse, a national,
    absolute dollar amount cap, without any loopholes, is the only
    way to do it. The bill, as reported, fails this test and so
    bears the burden of treating poor and middle class families
    harshly while letting the wealthiest individuals, who are
    clearly abusing the system and defrauding their creditors,
    shelter millions of dollars.

                       II. THE BILL DOES NOT ADDRESS THE
                        ASSET PROTECTION TRUST LOOPHOLE.

        Although this legislation is exceedingly draconian with
    respect to low and middle income debtors, the sponsors have
    consistently resisted amendments that would close loopholes for
    the wealthiest debtors.
        One such loophole is the so-called ``asset protection
    trusts,'' which, under the law of five States, allows an
    individual to set up a trust account for which the person
    establishing the trust would also be the beneficiary.\17\
    Trusts, established under non-bankruptcy law, are not treated a
    property of the bankruptcy estate, and so are beyond the reach
    of creditors.\18\ A debtor may, under the laws of these five
    States, establish such a trust, solely for the benefit of the
    debtor, and may be able to shield unlimited amounts of money
    from creditors. So long as the funds were not placed in the
    trust by means of a fraudulent transfer, the trustee might have
    no power to recover them for the benefit of the creditors.
    ---------------------------------------------------------------------------
        \17\ Gretchen Morgenson, Proposed Law on Bankruptcy Has Loophole,
    N. Y. Times, Mar. 2, 2005, at C1.
        \18\ 11 U.S.C. 541(c)(2) (2004).
    ---------------------------------------------------------------------------
        Senator Schumer offered an amendment that would have
    limited the value of assets that could be shielded in these
    trusts to $125,000, if transferred within the ten years
    preceding the filing of the petition.\19\ Rep. Delahunt offered
    a similar amendment during the Judiciary Committee's markup,
    limiting such trusts up to $125,000, while protecting
    conventional retirement funds currently exempt from federal
    taxation, charitable trusts, and educational trusts. The
    amendment was rejected with 10 ayes and 15 noes.
    ---------------------------------------------------------------------------
        \19\ 151 Cong. Rec. S1981 (daily ed. March 2, 2005) (statement of
    Sen. Schumer). The amendment excludes from its coverage trusts not for
    the benefit of the debtor that would otherwise be excluded from the
    estate, and trusts established for retirement purposes under the new 11
    U.S.C. 522(d)(12).
    ---------------------------------------------------------------------------
        The rejection of these reasonable amendments by the Senate
    and by the House Judiciary Committee again demonstrate that,
    despite its lofty title, the bill does not target bankruptcy
    abuse by the wealthy and well connected.
        Bankruptcy should provide a safety net for families truly
    in need of relief. This legislation, which imposes stringent
    new rules on financially distressed families, should not leave
    the most notorious loopholes for the very wealthy.

                                       John Conyers, Jr.
                                       Jerrold Nadler.
                                       Robert C. Scott.
                                       Melvin L. Watt.
                                       Martin T. Meehan.
                                       Anthony D. Weiner.
                                       Chris Van Hollen.
                           Additional Minority Views

        While I agree with the Minority Views to S. 256, I want to
    submit additional views to explain my dissent.
        Once again we are attempting to push through the Bankruptcy
    Abuse Prevention and Consumer Protection Act, which despite its
    name provides little meaningful protection for consumers. We
    all can agree that the system needs revision, but this
    legislation is not the answer.
        Bankruptcy filings have risen slightly in recent years and
    while some who file for bankruptcy have not been financially
    responsible, the overwhelming majority of people who file for
    bankruptcy do so as the result of a divorce, major illness or
    job loss. Many people are just one paycheck, job loss or
    medical catastrophe away from bankruptcy. We know at the
    present time there are 1.6 million people who go into
    bankruptcy every year. Half of those people go into bankruptcy
    because of medical bills. About three-quarters of those
    individuals who go into bankruptcy because of medical bills
    have health insurance, but nonetheless, the explosion of costs
    in health care have added such a burden to these families that
    they have had to go into bankruptcy.
        If the purpose of this legislation is to try to deal with
    spendthrifts and those who are abusers of credit, we ought to
    be able to distinguish them from hard-working Americans who
    unfortunately became ill, those who have had an unforeseen
    change in their employment, and those whose spouses experienced
    business failures. Unfortunately, this legislation does not
    make those distinctions.
        I believe that any meaningful bankruptcy reform ought to
    ensure that individuals are afforded the protection of Chapter
    7 bankruptcy and are exempt from dismissal or conversion if:
    (1) a substantial portion of the indebtedness is due to
    business losses incurred by a spouse who has died or deserted
    the debtor; (2) a substantial portion of the indebtedness was
    incurred as a result of illness of the debtor, a dependant of
    the debtor, or the debtor's spouse if not a dependant of the
    debtor; or (3) a substantial portion of the indebtedness was a
    result of unforeseen loss of employment through no fault of the
    debtor.
        Another category of citizens who will be adversely impacted
    by this legislation are small business entrepreneurs who go
    into business considering a risk/benefit ratio that includes
    the possibility of making a lot of money but also includes the
    possibility of losing everything and ending up in bankruptcy.
    With the passage of this legislation, those entrepreneurs and
    their families risk not only losing everything, but also
    remaining destitute.
        Finally, we should consider the impact on society of
    increasing the number of people who conclude that they have
    nothing left to lose. It is ironic that the last time we
    debated bankruptcy reform on the Floor of the House of
    Representatives, a farmer had driven his tractor into a pond
    near Washington's monuments, tying up traffic in D.C. for
    several days. He was quoted as saying, ``I'm broke. I'm
    busted.'' He was also quoted as saying, ``I've got the rest of
    my life to stay right here. I'm not going anywhere.'' People
    who feel they have nothing left to lose often lack any
    incentive to be a productive member of society, and this can
    also create a potential danger to society. Denying bankruptcy
    protection to people who need a fresh start will only increase
    this category of citizens. Instead we should be providing them
    with the assistance they need to get back on their feet.
        While the bankruptcy code clearly could benefit from reform
    and modernization, this legislation does not differentiate
    between those who abuse the system and those who truly need the
    aid it provides.

                                       Robert C. Scott.