Calendar No. 7

107th CONGRESS

1st Session

S. 220

To amend title 11, United States Code, and for other purposes.

IN THE SENATE OF THE UNITED STATES

January 30, 2001

Mr. GRASSLEY (for himself, Mr. SESSIONS, Mr. HATCH, and Mr. JOHNSON)

introduced the following bill; which was read the first time

January 31, 2001

Read the second time and placed on the calendar

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A BILL

To amend title 11, United States Code, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United

States of America in Congress assembled,

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

(a) SHORT TITLE- This Act may be cited as the `Bankruptcy Reform Act

of 2001'.

(b) TABLE OF CONTENTS- The table of contents for this Act is as

follows:

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

TITLE I--NEEDS-BASED BANKRUPTCY

Sec. 101. Conversion.

Sec. 102. Dismissal or conversion.

Sec. 103. Sense of Congress and study.

Sec. 104. Notice of alternatives.

Sec. 105. Debtor financial management training test program.

Sec. 106. Credit counseling.

Sec. 107. Schedules of reasonable and necessary expenses.

TITLE II--ENHANCED CONSUMER PROTECTION

Subtitle A--Penalties for Abusive Creditor Practices

Sec. 201. Promotion of alternative dispute resolution.

Sec. 202. Effect of discharge.

Sec. 203. Discouraging abuse of reaffirmation practices.

Subtitle B--Priority Child Support

Sec. 211. Definition of domestic support obligation.

Sec. 212. Priorities for claims for domestic support obligations.

Sec. 213. Requirements to obtain confirmation and discharge in

cases involving domestic support obligations.

Sec. 214. Exceptions to automatic stay in domestic support

obligation proceedings.

Sec. 215. Nondischargeability of certain debts for alimony,

maintenance, and support.

Sec. 216. Continued liability of property.

Sec. 217. Protection of domestic support claims against

preferential transfer motions.

Sec. 218. Disposable income defined.

Sec. 219. Collection of child support.

Sec. 220. Nondischargeability of certain educational benefits and

loans.

Subtitle C--Other Consumer Protections

Sec. 221. Amendments to discourage abusive bankruptcy filings.

Sec. 222. Sense of Congress.

Sec. 223. Additional amendments to title 11, United States Code.

Sec. 224. Protection of retirement savings in bankruptcy.

Sec. 225. Protection of education savings in bankruptcy.

Sec. 226. Definitions.

Sec. 227. Restrictions on debt relief agencies.

Sec. 228. Disclosures.

Sec. 229. Requirements for debt relief agencies.

Sec. 230. GAO study.

TITLE III--DISCOURAGING BANKRUPTCY ABUSE

Sec. 301. Reinforcement of the fresh start.

Sec. 302. Discouraging bad faith repeat filings.

Sec. 303. Curbing abusive filings.

Sec. 304. Debtor retention of personal property security.

Sec. 305. Relief from the automatic stay when the debtor does not

complete intended surrender of consumer debt collateral.

Sec. 306. Giving secured creditors fair treatment in chapter 13.

Sec. 307. Domiciliary requirements for exemptions.

Sec. 308. Residency requirement for homestead exemption.

Sec. 309. Protecting secured creditors in chapter 13 cases.

Sec. 310. Limitation on luxury goods.

Sec. 311. Automatic stay.

Sec. 312. Extension of period between bankruptcy discharges.

Sec. 313. Definition of household goods and antiques.

Sec. 314. Debt incurred to pay nondischargeable debts.

Sec. 315. Giving creditors fair notice in chapters 7 and 13

cases.

Sec. 316. Dismissal for failure to timely file schedules or

provide required information.

Sec. 317. Adequate time to prepare for hearing on confirmation of

the plan.

Sec. 318. Chapter 13 plans to have a 5-year duration in certain

cases.

Sec. 319. Sense of Congress regarding expansion of rule 9011 of

the Federal Rules of Bankruptcy Procedure.

Sec. 320. Prompt relief from stay in individual cases.

Sec. 321. Chapter 11 cases filed by individuals.

Sec. 322. Limitation.

Sec. 323. Excluding employee benefit plan participant

contributions and other property from the estate.

Sec. 324. Exclusive jurisdiction in matters involving bankruptcy

professionals.

Sec. 325. United States trustee program filing fee increase.

Sec. 326. Sharing of compensation.

Sec. 327. Fair valuation of collateral.

Sec. 328. Defaults based on nonmonetary obligations.

TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

Subtitle A--General Business Bankruptcy Provisions

Sec. 401. Adequate protection for investors.

Sec. 402. Meetings of creditors and equity security holders.

Sec. 403. Protection of refinance of security interest.

Sec. 404. Executory contracts and unexpired leases.

Sec. 405. Creditors and equity security holders committees.

Sec. 406. Amendment to section 546 of title 11, United States

Code.

Sec. 407. Amendments to section 330(a) of title 11, United States

Code.

Sec. 408. Postpetition disclosure and solicitation.

Sec. 409. Preferences.

Sec. 410. Venue of certain proceedings.

Sec. 411. Period for filing plan under chapter 11.

Sec. 412. Fees arising from certain ownership interests.

Sec. 413. Creditor representation at first meeting of creditors.

Sec. 414. Definition of disinterested person.

Sec. 415. Factors for compensation of professional persons.

Sec. 416. Appointment of elected trustee.

Sec. 417. Utility service.

Sec. 418. Bankruptcy fees.

Sec. 419. More complete information regarding assets of the

estate.

Subtitle B--Small Business Bankruptcy Provisions

Sec. 431. Flexible rules for disclosure statement and plan.

Sec. 432. Definitions.

Sec. 433. Standard form disclosure statement and plan.

Sec. 434. Uniform national reporting requirements.

Sec. 435. Uniform reporting rules and forms for small business

cases.

Sec. 436. Duties in small business cases.

Sec. 437. Plan filing and confirmation deadlines.

Sec. 438. Plan confirmation deadline.

Sec. 439. Duties of the United States trustee.

Sec. 440. Scheduling conferences.

Sec. 441. Serial filer provisions.

Sec. 442. Expanded grounds for dismissal or conversion and

appointment of trustee.

Sec. 443. Study of operation of title 11, United States Code,

with respect to small businesses.

Sec. 444. Payment of interest.

Sec. 445. Priority for administrative expenses.

TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

Sec. 501. Petition and proceedings related to petition.

Sec. 502. Applicability of other sections to chapter 9.

TITLE VI--BANKRUPTCY DATA

Sec. 601. Improved bankruptcy statistics.

Sec. 602. Uniform rules for the collection of bankruptcy data.

Sec. 603. Audit procedures.

Sec. 604. Sense of Congress regarding availability of bankruptcy

data.

TITLE VII--BANKRUPTCY TAX PROVISIONS

Sec. 701. Treatment of certain liens.

Sec. 702. Treatment of fuel tax claims.

Sec. 703. Notice of request for a determination of taxes.

Sec. 704. Rate of interest on tax claims.

Sec. 705. Priority of tax claims.

Sec. 706. Priority property taxes incurred.

Sec. 707. No discharge of fraudulent taxes in chapter 13.

Sec. 708. No discharge of fraudulent taxes in chapter 11.

Sec. 709. Stay of tax proceedings limited to prepetition taxes.

Sec. 710. Periodic payment of taxes in chapter 11 cases.

Sec. 711. Avoidance of statutory tax liens prohibited.

Sec. 712. Payment of taxes in the conduct of business.

Sec. 713. Tardily filed priority tax claims.

Sec. 714. Income tax returns prepared by tax authorities.

Sec. 715. Discharge of the estate's liability for unpaid taxes.

Sec. 716. Requirement to file tax returns to confirm chapter 13

plans.

Sec. 717. Standards for tax disclosure.

Sec. 718. Setoff of tax refunds.

Sec. 719. Special provisions related to the treatment of State

and local taxes.

Sec. 720. Dismissal for failure to timely file tax returns.

TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

Sec. 801. Amendment to add chapter 15 to title 11, United States

Code.

Sec. 802. Other amendments to titles 11 and 28, United States

Code.

TITLE IX--FINANCIAL CONTRACT PROVISIONS

Sec. 901. Treatment of certain agreements by conservators or

receivers of insured depository institutions.

Sec. 902. Authority of the corporation with respect to failed and

failing institutions.

Sec. 903. Amendments relating to transfers of qualified financial

contracts.

Sec. 904. Amendments relating to disaffirmance or repudiation of

qualified financial contracts.

Sec. 905. Clarifying amendment relating to master agreements.

Sec. 906. Federal Deposit Insurance Corporation Improvement Act

of 1991.

Sec. 907. Bankruptcy Code amendments.

Sec. 908. Recordkeeping requirements.

Sec. 909. Exemptions from contemporaneous execution requirement.

Sec. 910. Damage measure.

Sec. 911. SIPC stay.

Sec. 912. Asset-backed securitizations.

Sec. 913. Effective date; application of amendments.

TITLE X--PROTECTION OF FAMILY FARMERS

Sec. 1001. Permanent reenactment of chapter 12.

Sec. 1002. Debt limit increase.

Sec. 1003. Certain claims owed to governmental units.

TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

Sec. 1101. Definitions.

Sec. 1102. Disposal of patient records.

Sec. 1103. Administrative expense claim for costs of closing a

health care business and other administrative expenses.

Sec. 1104. Appointment of ombudsman to act as patient advocate.

Sec. 1105. Debtor in possession; duty of trustee to transfer

patients.

Sec. 1106. Exclusion from program participation not subject to

automatic stay.

TITLE XII--TECHNICAL AMENDMENTS

Sec. 1201. Definitions.

Sec. 1202. Adjustment of dollar amounts.

Sec. 1203. Extension of time.

Sec. 1204. Technical amendments.

Sec. 1205. Penalty for persons who negligently or fraudulently

prepare bankruptcy petitions.

Sec. 1206. Limitation on compensation of professional persons.

Sec. 1207. Effect of conversion.

Sec. 1208. Allowance of administrative expenses.

Sec. 1209. Exceptions to discharge.

Sec. 1210. Effect of discharge.

Sec. 1211. Protection against discriminatory treatment.

Sec. 1212. Property of the estate.

Sec. 1213. Preferences.

Sec. 1214. Postpetition transactions.

Sec. 1215. Disposition of property of the estate.

Sec. 1216. General provisions.

Sec. 1217. Abandonment of railroad line.

Sec. 1218. Contents of plan.

Sec. 1219. Discharge under chapter 12.

Sec. 1220. Bankruptcy cases and proceedings.

Sec. 1221. Knowing disregard of bankruptcy law or rule.

Sec. 1222. Transfers made by nonprofit charitable corporations.

Sec. 1223. Protection of valid purchase money security interests.

Sec. 1224. Extensions.

Sec. 1225. Bankruptcy judgeships.

Sec. 1226. Compensating trustees.

Sec. 1227. Amendment to section 362 of title 11, United States

Code.

Sec. 1228. Judicial education.

Sec. 1229. Reclamation.

Sec. 1230. Providing requested tax documents to the court.

Sec. 1231. Encouraging creditworthiness.

Sec. 1232. Property no longer subject to redemption.

Sec. 1233. Trustees.

Sec. 1234. Bankruptcy forms.

Sec. 1235. Expedited appeals of bankruptcy cases to courts of

appeals.

Sec. 1236. Exemptions.

TITLE XIII--CONSUMER CREDIT DISCLOSURE

Sec. 1301. Enhanced disclosures under an open end credit plan.

Sec. 1302. Enhanced disclosure for credit extensions secured by a

dwelling.

Sec. 1303. Disclosures related to `introductory rates'.

Sec. 1304. Internet-based credit card solicitations.

Sec. 1305. Disclosures related to late payment deadlines and

penalties.

Sec. 1306. Prohibition on certain actions for failure to incur

finance charges.

Sec. 1307. Dual use debit card.

Sec. 1308. Study of bankruptcy impact of credit extended to

dependent students.

Sec. 1309. Clarification of clear and conspicuous.

Sec. 1310. Enforcement of certain foreign judgments barred.

TITLE XIV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

Sec. 1401. Effective date; application of amendments.

TITLE I--NEEDS-BASED BANKRUPTCY

SEC. 101. CONVERSION.

Section 706(c) of title 11, United States Code, is amended by

inserting `or consents to' after `requests'.

SEC. 102. DISMISSAL OR CONVERSION.

(a) IN GENERAL- Section 707 of title 11, United States Code, is

amended--

(1) by striking the section heading and inserting the following:

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

13';

and

(2) in subsection (b)--

(A) by inserting `(1)' after `(b)';

(B) in paragraph (1), as redesignated by subparagraph (A) of

this paragraph--

(i) in the first sentence--

(I) by striking `but not at the request or

suggestion of' and inserting `trustee, bankruptcy

administrator, or';

(II) by inserting `, or, with the debtor's

consent, convert such a case to a case under

chapter 11 or 13 of this title,' after `consumer

debts'; and

(III) by striking `a substantial abuse' and

inserting `an abuse'; and

(ii) by striking the next to last sentence; and

(C) by adding at the end the following:

`(2)(A)(i) In considering under paragraph (1) whether the granting of

relief would be an abuse of the provisions of this chapter, the court

shall presume abuse exists if the debtor's current monthly income

reduced by the amounts determined under clauses (ii), (iii), and (iv),

and multiplied by 60 is not less than the lesser of--

`(I) 25 percent of the debtor's nonpriority unsecured claims in

the case, or $6,000, whichever is greater; or

`(II) $10,000.

`(ii)(I) The debtor's monthly expenses shall be the debtor's

applicable monthly expense amounts specified under the National

Standards and Local Standards, and the debtor's actual monthly

expenses for the categories specified as Other Necessary Expenses

issued by the Internal Revenue Service for the area in which the

debtor resides, as in effect on the date of the entry of the order for

relief, for the debtor, the dependents of the debtor,

and the spouse of the debtor in a joint case, if the spouse is not

otherwise a dependent. Notwithstanding any other provision of this clause,

the monthly expenses of the debtor shall not include any payments for

debts. In addition, the debtor's monthly expenses shall include the

debtor's reasonably necessary expenses incurred to maintain the safety of

the debtor and the family of the debtor from family violence as identified

under section 309 of the Family Violence Prevention and Services Act (42

U.S.C. 10408), or other applicable Federal law. The expenses included in

the debtor's monthly expenses described in the preceding sentence shall be

kept confidential by the court. In addition, if it is demonstrated that it

is reasonable and necessary, the debtor's monthly expenses may also include

an additional allowance for food and clothing of up to 5 percent of the

food and clothing categories as specified by the National Standards issued

by the Internal Revenue Service.

`(II) In addition, the debtor's monthly expenses may include, if

applicable, the continuation of actual expenses paid by the debtor

that are reasonable and necessary for care and support of an elderly,

chronically ill, or disabled household member or member of the

debtor's immediate family (including parents, grandparents, and

siblings of the debtor, the dependents of the debtor, and the spouse

of the debtor in a joint case) who is not a dependent and who is

unable to pay for such reasonable and necessary expenses.

`(III) In addition, for a debtor eligible for chapter 13, the debtor's

monthly expenses may include the actual administrative expenses of

administering a chapter 13 plan for the district in which the debtor

resides, up to an

amount of 10 percent of the projected plan payments, as determined under

schedules issued by the Executive Office for United States Trustees.

`(IV) In addition, the debtor's monthly expenses may include the

actual expenses for each dependent child under the age of 18 years up

to $1,500 per year per child to attend a private elementary or

secondary school, if the debtor provides documentation of such

expenses and a detailed explanation of why such expenses are

reasonable and necessary.

`(iii) The debtor's average monthly payments on account of secured

debts shall be calculated as--

`(I) the sum of--

`(aa) the total of all amounts scheduled as contractually

due to secured creditors in each month of the 60 months

following the date of the petition; and

`(bb) any additional payments to secured creditors necessary

for the debtor, in filing a plan under chapter 13 of this

title, to maintain possession of the debtor's primary

residence, motor vehicle, or other property necessary for

the support of the debtor and the debtor's dependents, that

serves as collateral for secured debts; divided by

`(II) 60.

`(iv) The debtor's expenses for payment of all priority claims

(including priority child support and alimony claims) shall be

calculated as--

`(I) the total amount of debts entitled to priority; divided by

`(II) 60.

`(B)(i) In any proceeding brought under this subsection, the

presumption of abuse may only be rebutted by demonstrating special

circumstances that justify additional expenses or adjustments of

current monthly income for which there is no reasonable alternative.

`(ii) In order to establish special circumstances, the debtor shall be

required to--

`(I) itemize each additional expense or adjustment of income; and

`(II) provide--

`(aa) documentation for such expense or adjustment to

income; and

`(bb) a detailed explanation of the special circumstances

that make such expenses or adjustment to income necessary

and reasonable.

`(iii) The debtor shall attest under oath to the accuracy of any

information provided to demonstrate that additional expenses or

adjustments to income are required.

`(iv) The presumption of abuse may only be rebutted if the additional

expenses or adjustments to income referred to in clause (i) cause the

product of the debtor's current monthly income reduced by the amounts

determined under clauses (ii), (iii), and (iv) of subparagraph (A)

when multiplied by 60 to be less than the lesser of--

`(I) 25 percent of the debtor's nonpriority unsecured claims, or

$6,000, whichever is greater; or

`(II) $10,000.

`(C) As part of the schedule of current income and expenditures

required under section 521, the debtor shall include a statement of

the debtor's current monthly income, and the calculations that

determine whether a presumption arises under subparagraph (A)(i), that

shows how each such amount is calculated.

`(3) In considering under paragraph (1) whether the granting of relief

would be an abuse of the provisions of this chapter in a case in which

the presumption in subparagraph (A)(i) of such paragraph does not

apply or has been rebutted, the court shall consider--

`(A) whether the debtor filed the petition in bad faith; or

`(B) the totality of the circumstances (including whether the

debtor seeks to reject a personal services contract and the

financial need for such rejection as sought by the debtor) of the

debtor's financial situation demonstrates abuse.

`(4)(A) The court shall order the counsel for the debtor to reimburse

the trustee for all reasonable costs in prosecuting a motion brought

under section 707(b), including reasonable attorneys' fees, if--

`(i) a trustee appointed under section 586(a)(1) of title 28 or

from a panel of private trustees maintained by the bankruptcy

administrator brings a motion for dismissal or conversion under

this subsection; and

`(ii) the court--

`(I) grants that motion; and

`(II) finds that the action of the counsel for the debtor in

filing under this chapter violated rule 9011 of the Federal

Rules of Bankruptcy Procedure.

`(B) If the court finds that the attorney for the debtor violated rule

9011 of the Federal Rules of Bankruptcy Procedure, at a minimum, the

court shall order--

`(i) the assessment of an appropriate civil penalty against the

counsel for the debtor; and

`(ii) the payment of the civil penalty to the trustee, the United

States trustee, or the bankruptcy administrator.

`(C) In the case of a petition, pleading, or written motion, the

signature of an attorney shall constitute a certification that the

attorney has--

`(i) performed a reasonable investigation into the circumstances

that gave rise to the petition, pleading, or written motion; and

`(ii) determined that the petition, pleading, or written motion--

`(I) is well grounded in fact; and

`(II) is warranted by existing law or a good faith argument

for the extension, modification, or reversal of existing law

and does not constitute an abuse under paragraph (1).

`(D) The signature of an attorney on the petition shall constitute a

certification that the attorney has no knowledge after an inquiry that

the information in the schedules filed with such petition is

incorrect.

`(5)(A) Except as provided in subparagraph (B) and subject to

paragraph (6), the court may award a debtor all reasonable costs

(including reasonable attorneys' fees) in contesting a motion brought

by a party in interest (other than a trustee, United States trustee,

or bankruptcy administrator) under this subsection if--

`(i) the court does not grant the motion; and

`(ii) the court finds that--

`(I) the position of the party that brought the motion

violated rule 9011 of the Federal Rules of Bankruptcy

Procedure; or

`(II) the party brought the motion solely for the purpose of

coercing a debtor into waiving a right guaranteed to the

debtor under this title.

`(B) A small business that has a claim of an aggregate amount less

than $1,000 shall not be subject to subparagraph (A)(ii)(I).

`(C) For purposes of this paragraph--

`(i) the term `small business' means an unincorporated business,

partnership, corporation, association, or organization that--

`(I) has less than 25 full-time employees as determined on

the date the motion is filed; and

`(II) is engaged in commercial or business activity; and

`(ii) the number of employees of a wholly owned subsidiary of a

corporation includes the employees of--

`(I) a parent corporation; and

`(II) any other subsidiary corporation of the parent

corporation.

`(6) Only the judge, United States trustee, or bankruptcy

administrator may bring a motion under section 707(b), if the current

monthly income of the debtor, or in a joint case, the debtor and the

debtor's spouse, as of the date of the order for relief, when

multiplied by 12, is equal to or less than--

`(A) in the case of a debtor in a household of 1 person, the

median family income of the applicable State for 1 earner last

reported by the Bureau of the Census;

`(B) in the case of a debtor in a household of 2, 3, or 4

individuals, the highest median family income of the applicable

State for a family of the same number or fewer individuals last

reported by the Bureau of the Census; or

`(C) in the case of a debtor in a household exceeding 4

individuals, the highest median family income of the applicable

State for a family of 4 or fewer individuals last reported by the

Bureau of the Census, plus $525 per month for each individual in

excess of 4.

`(7) No judge, United States trustee, panel trustee, bankruptcy

administrator or other party in interest may bring a motion under

paragraph (2), if the current monthly income of the debtor and the

debtor's spouse combined, as of the date of the order for relief when

multiplied by 12, is equal to or less than--

`(A) in the case of a debtor in a household of 1 person, the

median family income of the applicable State for 1 earner last

reported by the Bureau of the Census;

`(B) in the case of a debtor in a household of 2, 3, or 4

individuals, the highest median family income of the applicable

State for a family of the same number or fewer individuals last

reported by the Bureau of the Census; or

`(C) in the case of a debtor in a household exceeding 4

individuals, the highest median family income of the applicable

State for a family of 4 or fewer individuals last reported by the

Bureau of the Census, plus $525 per month for each individual in

excess of 4.'.

(b) DEFINITION- Section 101 of title 11, United States Code, is

amended by inserting after paragraph (10) the following:

`(10A) `current monthly income'--

`(A) means the average monthly income from all sources which

the debtor, or in a joint case, the debtor and the debtor's

spouse, receive without regard to whether the income is

taxable income, derived during the 6-month period preceding

the date of determination; and

`(B) includes any amount paid by any entity other than the

debtor (or, in a joint case, the debtor and the debtor's

spouse), on a regular basis to the household expenses of the

debtor or the debtor's dependents (and, in a joint case, the

debtor's spouse if not otherwise a dependent), but excludes

benefits received under the Social Security Act and payments

to victims of war crimes or crimes against humanity on

account of their status as victims of such crimes;'.

(c) UNITED STATES TRUSTEE AND BANKRUPTCY ADMINISTRATOR DUTIES- Section

704 of title 11, United States Code, is amended--

(1) by inserting `(a)' before `The trustee shall--'; and

(2) by adding at the end the following:

`(b)(1) With respect to an individual debtor under this chapter--

`(A) the United States trustee or bankruptcy administrator shall

review all materials filed by the debtor and, not later than 10

days after the date of the first meeting of creditors, file with

the court a statement as to whether the debtor's case would be

presumed to be an abuse under section 707(b); and

`(B) not later than 5 days after receiving a statement under

subparagraph (A), the court shall provide a copy of the statement

to all creditors.

`(2) The United States trustee or bankruptcy administrator shall, not

later than 30 days after the date of filing a statement under

paragraph (1), either file a motion to dismiss or convert under

section 707(b) or file a statement setting forth the reasons the

United States trustee or bankruptcy administrator does not believe

that such a motion would be appropriate, if the United States trustee

or bankruptcy administrator determines that the debtor's case should

be presumed to be an abuse under section 707(b) and the product of the

debtor's current monthly income, multiplied by 12 is not less than--

`(A) in the case of a debtor in a household of 1 person, the

median family income of the applicable State for 1 earner last

reported by the Bureau of the Census; or

`(B) in the case of a debtor in a household of 2 or more

individuals, the highest median family income of the applicable

State for a family of the same number or fewer individuals last

reported by the Bureau of the Census.

`(3) In any case in which a motion to dismiss or convert, or a

statement is required to be filed by this subsection, the United

States trustee or bankruptcy administrator may decline to file a

motion to dismiss or convert pursuant to section 704(b)(2) if the

product of the debtor's current monthly income multiplied by 12

exceeds 100 percent, but does not exceed 150 percent of--

`(A)(i) in the case of a debtor in a household of 1 person, the

median family income of the applicable State for 1 earner last

reported by the Bureau of the Census; or

`(ii) in the case of a debtor in a household of 2 or more

individuals, the highest median family income of the applicable

State for a family of the same number or fewer individuals last

reported by the Bureau of the Census; and

`(B) the product of the debtor's current monthly income, reduced

by the amounts determined under section 707(b)(2)(A)(ii) (except

for the amount calculated under the other necessary expenses

standard issued by the Internal Revenue Service) and clauses

(iii) and (iv) of section 707(b)(2)(A), multiplied by 60 is less

than the lesser of--

`(i) 25 percent of the debtor's nonpriority unsecured claims

in the case or $6,000, whichever is greater; or

`(ii) $10,000.'.

(d) NOTICE- Section 342 of title 11, United States Code, is amended by

adding at the end the following:

`(d) In an individual case under chapter 7 in which the presumption of

abuse is triggered under section 707(b), the clerk shall give written

notice to all creditors not later than 10 days after the date of the

filing of the petition that the presumption of abuse has been

triggered.'.

(e) NONLIMITATION OF INFORMATION- Nothing in this title shall limit

the ability of a creditor to provide information to a judge (except

for information communicated ex parte, unless otherwise permitted by

applicable law), United States trustee, bankruptcy administrator or

trustee.

(f) DISMISSAL FOR CERTAIN CRIMES- Section 707 of title 11, United

States Code, as amended by this section, is amended by adding at the

end the following:

`(c)(1) In this subsection--

`(A) the term `crime of violence' has the meaning given that term

in section 16 of title 18; and

`(B) the term `drug trafficking crime' has the meaning given that

term in section 924(c)(2) of title 18.

`(2) Except as provided in paragraph (3), after notice and a hearing,

the court, on a motion by the victim of a crime of violence or a drug

trafficking crime, may when it is in the best interest of the victims

dismiss a voluntary case filed by an individual debtor under this

chapter if that individual was convicted of that crime.

`(3) The court may not dismiss a case under paragraph (2) if the

debtor establishes by a preponderance of the evidence that the filing

of a case under this chapter is necessary to satisfy a claim for a

domestic support obligation.'.

(g) CONFIRMATION OF PLAN- Section 1325(a) of title 11, United States

Code, is amended--

(1) in paragraph (5), by striking `and' at the end;

(2) in paragraph (6), by striking the period and inserting a

semicolon; and

(3) by adding at the end the following:

`(7) the action of the debtor in filing the petition was in good

faith;'.

(h) APPLICABILITY OF MEANS TEST TO CHAPTER 13- Section 1325(b) of

title 11, United States Code, is amended--

(1) in paragraph (1)(B), by inserting `to unsecured creditors'

after `to make payments'; and

(2) by striking paragraph (2) and inserting the following:

`(2) For purposes of this subsection, the term `disposable

income' means current monthly income received by the debtor

(other than child support payments, foster care payments, or

disability payments for a dependent child made in accordance with

applicable nonbankruptcy law to the extent reasonably necessary

to be expended for such child) less amounts reasonably necessary

to be expended--

`(A) for the maintenance or support of the debtor or a

dependent of the debtor or for a domestic support obligation

that first becomes payable after the date the petition is

filed and for charitable contributions (that meet the

definition of `charitable contribution' under section

548(d)(3) to a qualified religious or charitable entity or

organization (as that term is defined in section 548(d)(4))

in an amount not to exceed 15 percent of gross income of the

debtor for the year in which the contributions are made; and

`(B) if the debtor is engaged in business, for the payment

of expenditures necessary for the continuation,

preservation, and operation of such business.

`(3) Amounts reasonably necessary to be expended under paragraph

(2) shall be determined in accordance with subparagraphs (A) and

(B) of section 707(b)(2), if the debtor has current monthly

income, when multiplied by 12, greater than--

`(A) in the case of a debtor in a household of 1 person, the

median family income of the applicable State for 1 earner

last reported by the Bureau of the Census;

`(B) in the case of a debtor in a household of 2, 3, or 4

individuals, the highest median family income of the

applicable State for a family of the same number or fewer

individuals last reported by the Bureau of the Census; or

`(C) in the case of a debtor in a household exceeding 4

individuals, the highest median family income of the

applicable State for a family of 4 or fewer individuals last

reported by the

Bureau of the Census, plus $525 per month for each individual in excess of

4.'.

(i) CLERICAL AMENDMENT- The table of sections for chapter 7 of title

11, United States Code, is amended by striking the item relating to

section 707 and inserting the following:

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

11 or 13.'.

SEC. 103. SENSE OF CONGRESS AND STUDY.

(a) SENSE OF CONGRESS- It is the sense of Congress that the Secretary

of the Treasury has the authority to alter the Internal Revenue

Service standards established to set guidelines for repayment plans as

needed to accommodate their use under section 707(b) of title 11,

United States Code.

(b) STUDY-

(1) IN GENERAL- Not later than 2 years after the date of

enactment of this Act, the Director of the Executive Office for

United States Trustees shall submit a report to the Committee on

the Judiciary of the Senate and the Committee on the Judiciary of

the House of Representatives containing the findings of the

Director regarding the utilization of Internal Revenue Service

standards for determining--

(A) the current monthly expenses of a debtor under section

707(b) of title 11, United States Code; and

(B) the impact that the application of such standards has

had on debtors and on the bankruptcy courts.

(2) RECOMMENDATION- The report under paragraph (1) may include

recommendations for amendments to title 11, United States Code,

that are consistent with the findings of the Director under

paragraph (1).

SEC. 104. NOTICE OF ALTERNATIVES.

Section 342(b) of title 11, United States Code, is amended to read as

follows:

`(b) Before the commencement of a case under this title by an

individual whose debts are primarily consumer debts, the clerk shall

give to such individual written notice containing--

`(1) a brief description of--

`(A) chapters 7, 11, 12, and 13 and the general purpose,

benefits, and costs of proceeding under each of those

chapters; and

`(B) the types of services available from credit counseling

agencies; and

`(2) statements specifying that--

`(A) a person who knowingly and fraudulently conceals assets

or makes a false oath or statement under penalty of perjury

in connection with a bankruptcy case shall be subject to

fine, imprisonment, or both; and

`(B) all information supplied by a debtor in connection with

a bankruptcy case is subject to examination by the Attorney

General.'.

SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.

(a) DEVELOPMENT OF FINANCIAL MANAGEMENT AND TRAINING CURRICULUM AND

MATERIALS- The Director of the Executive Office for United States

Trustees (in this section referred to as the `Director') shall consult

with a wide range of individuals who are experts in the field of

debtor education, including trustees who are appointed under chapter

13 of title 11, United States Code, and who operate financial

management education programs for debtors, and shall develop a

financial management training curriculum and materials that can be

used to educate individual debtors on how to better manage their

finances.

(b) TEST-

(1) SELECTION OF DISTRICTS- The Director shall select 6 judicial

districts of the United States in which to test the effectiveness

of the financial management training curriculum and materials

developed under subsection (a).

(2) USE- For an 18-month period beginning not later than 270 days

after the date of enactment of this Act, such curriculum and

materials shall be, for the 6 judicial districts selected under

paragraph (1), used as the instructional course concerning

personal financial management for purposes of section 111 of

title 11, United States Code.

(c) EVALUATION-

(1) IN GENERAL- During the 18-month period referred to in

subsection (b), the Director shall evaluate the effectiveness

of--

(A) the financial management training curriculum and

materials developed under subsection (a); and

(B) a sample of existing consumer education programs such as

those described in the Report of the National Bankruptcy

Review Commission (October 20, 1997) that are representative

of consumer education programs carried out by the credit

industry, by trustees serving under chapter 13 of title 11,

United States Code, and by consumer counseling groups.

(2) REPORT- Not later than 3 months after concluding such

evaluation, the Director shall submit a report to the Speaker of

the House of Representatives and the President pro tempore of the

Senate, for referral to the appropriate committees of the

Congress, containing the findings of the Director regarding the

effectiveness of such curriculum, such materials, and such

programs and their costs.

SEC. 106. CREDIT COUNSELING.

(a) WHO MAY BE A DEBTOR- Section 109 of title 11, United States Code,

is amended by adding at the end the following:

`(h)(1) Subject to paragraphs (2) and (3), and notwithstanding any

other provision of this section, an individual may not be a debtor

under this title unless that individual has, during the 180-day period

preceding the date of filing of the petition of that individual,

received from an approved nonprofit budget and credit counseling

agency described in section 111(a) an individual or group briefing

(including a briefing conducted by telephone or on the Internet) that

outlined the opportunities for available credit counseling and

assisted that individual in performing a related budget analysis.

`(2)(A) Paragraph (1) shall not apply with respect to a debtor who

resides in a district for which the United States trustee or

bankruptcy administrator of the bankruptcy court of that district

determines that the approved

nonprofit budget and credit counseling agencies for that district are not

reasonably able to provide adequate services to the additional individuals

who would otherwise seek credit counseling from that agency by reason of

the requirements of paragraph (1).

`(B) Each United States trustee or bankruptcy administrator that makes

a determination described in subparagraph (A) shall review that

determination not later than 1 year after the date of that

determination, and not less frequently than every year thereafter.

Notwithstanding the preceding sentence, a nonprofit budget and credit

counseling service may be disapproved by the United States trustee or

bankruptcy administrator at any time.

`(3)(A) Subject to subparagraph (B), the requirements of paragraph (1)

shall not apply with respect to a debtor who submits to the court a

certification that--

`(i) describes exigent circumstances that merit a waiver of the

requirements of paragraph (1);

`(ii) states that the debtor requested credit counseling services

from an approved nonprofit budget and credit counseling agency,

but was unable to obtain the services referred to in paragraph

(1) during the 5-day period beginning on the date on which the

debtor made that request; and

`(iii) is satisfactory to the court.

`(B) With respect to a debtor, an exemption under subparagraph (A)

shall cease to apply to that debtor on the date on which the debtor

meets the requirements of paragraph (1), but in no case may the

exemption apply to that debtor after the date that is 30 days after

the debtor files a petition, except that the court, for cause, may

order an additional 15 days.'.

(b) CHAPTER 7 DISCHARGE- Section 727(a) of title 11, United States

Code, is amended--

(1) in paragraph (9), by striking `or' at the end;

(2) in paragraph (10), by striking the period and inserting `;

or'; and

(3) by adding at the end the following:

`(11) after the filing of the petition, the debtor failed to

complete an instructional course concerning personal financial

management described in section 111.

`(12)(A) Paragraph (11) shall not apply with respect to a debtor

who resides in a district for which the United States trustee or

bankruptcy administrator of that district determines that the

approved instructional courses are not adequate to service the

additional individuals required to complete such instructional

courses under this section.

`(B) Each United States trustee or bankruptcy administrator that

makes a determination described in subparagraph (A) shall review

that determination not later than 1 year after the date of that

determination, and not less frequently than every year

thereafter.'.

(c) CHAPTER 13 DISCHARGE- Section 1328 of title 11, United States

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

`(g) The court shall not grant a discharge under this section to a

debtor, unless after filing a petition the debtor has completed an

instructional course concerning personal financial management

described in section 111.

`(h) Subsection (g) shall not apply with respect to a debtor who

resides in a district for which the United States trustee or

bankruptcy administrator of the bankruptcy court of that district

determines that the approved instructional courses are not adequate to

service the additional individuals who would be required to complete

the instructional course by reason of the requirements of this

section.

`(i) Each United States trustee or bankruptcy administrator that makes

a determination described in subsection (h) shall review that

determination not later than 1 year after the date of that

determination, and not less frequently than every year thereafter.'.

(d) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, is

amended--

(1) by inserting `(a)' before `The debtor shall--'; and

(2) by adding at the end the following:

`(b) In addition to the requirements under subsection (a), an

individual debtor shall file with the court--

`(1) a certificate from the approved nonprofit budget and credit

counseling agency that provided the debtor services under section

109(h) describing the services provided to the debtor; and

`(2) a copy of the debt repayment plan, if any, developed under

section 109(h) through the approved nonprofit budget and credit

counseling agency referred to in paragraph (1).'.

(e) GENERAL PROVISIONS-

(1) IN GENERAL- Chapter 1 of title 11, United States Code, is

amended by adding at the end the following:

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

courses

`(a) The clerk of each district shall maintain a publicly available

list of--

`(1) credit counseling agencies that provide 1 or more programs

described in section 109(h) currently approved by the United

States trustee or the bankruptcy administrator for the district,

as applicable; and

`(2) instructional courses concerning personal financial

management currently approved by the United States trustee or the

bankruptcy administrator for the district, as applicable.

`(b) The United States trustee or bankruptcy administrator shall only

approve a credit counseling agency or instructional course concerning

personal financial management as follows:

`(1) The United States trustee or bankruptcy administrator shall

have thoroughly reviewed the qualifications of the credit

counseling agency or of the provider of the instructional course

under the standards set forth in this section, and the programs

or instructional courses which will be offered by such agency or

provider, and may require an agency or provider of an

instructional course which has sought

approval to provide information with respect to such review.

`(2) The United States trustee or bankruptcy administrator shall

have determined that the credit counseling agency or course of

instruction fully satisfies the applicable standards set forth in

this section.

`(3) When an agency or course of instruction is initially

approved, such approval shall be for a probationary period not to

exceed 6 months. An agency or course of instruction is initially

approved if it did not appear on the approved list for the

district under subsection (a) immediately prior to approval.

`(4) At the conclusion of the probationary period under paragraph

(3), the United States trustee or bankruptcy administrator may

only approve for an additional 1-year period, and for successive

1-year periods thereafter, any agency or course of instruction

which has demonstrated during the probationary or subsequent

period that such agency or course of instruction--

`(A) has met the standards set forth under this section

during such period; and

`(B) can satisfy such standards in the future.

`(5) Not later than 30 days after any final decision under

paragraph (4), that occurs either after the expiration of the

initial probationary period, or after any 2-year period

thereafter, an interested person may seek judicial review of such

decision in the appropriate United States District Court.

`(c)(1) The United States trustee or bankruptcy administrator shall

only approve a credit counseling agency that demonstrates that it will

provide qualified counselors, maintain adequate provision for

safekeeping and payment of client funds, provide adequate counseling

with respect to client credit problems, and deal responsibly and

effectively with other matters as relate to the quality,

effectiveness, and financial security of such programs.

`(2) To be approved by the United States trustee or bankruptcy

administrator, a credit counseling agency shall, at a minimum--

`(A) be a nonprofit budget and credit counseling agency, the

majority of the board of directors of which--

`(i) are not employed by the agency; and

`(ii) will not directly or indirectly benefit financially

from the outcome of a credit counseling session;

`(B) if a fee is charged for counseling services, charge a

reasonable fee, and provide services without regard to ability to

pay the fee;

`(C) provide for safekeeping and payment of client funds,

including an annual audit of the trust accounts and appropriate

employee bonding;

`(D) provide full disclosures to clients, including funding

sources, counselor qualifications, possible impact on credit

reports, and any costs of such program that will be paid by the

debtor and how such costs will be paid;

`(E) provide adequate counseling with respect to client credit

problems that includes an analysis of their current situation,

what brought them to that financial status, and how they can

develop a plan to handle the problem without incurring negative

amortization of their debts;

`(F) provide trained counselors who receive no commissions or

bonuses based on the counseling session outcome, and who have

adequate experience, and have been adequately trained to provide

counseling services to individuals in financial difficulty,

including the matters described in subparagraph (E);

`(G) demonstrate adequate experience and background in providing

credit counseling; and

`(H) have adequate financial resources to provide continuing

support services for budgeting plans over the life of any

repayment plan.

`(d) The United States trustee or bankruptcy administrator shall only

approve an instructional course concerning personal financial

management--

`(1) for an initial probationary period under subsection (b)(3)

if the course will provide at a minimum--

`(A) trained personnel with adequate experience and training

in providing effective instruction and services;

`(B) learning materials and teaching methodologies designed

to assist debtors in understanding personal financial

management and that are consistent with stated objectives

directly related to the goals of such course of instruction;

`(C) adequate facilities situated in reasonably convenient

locations at which such course of instruction is offered,

except that such facilities may include the provision of

such course of instruction or program by telephone or

through the Internet, if the course of instruction or

program is effective; and

`(D) the preparation and retention of reasonable records

(which shall include the debtor's bankruptcy case number) to

permit evaluation of the effectiveness of such course of

instruction or program, including any evaluation of

satisfaction of course of instruction or program

requirements for each debtor attending such course of

instruction or program, which shall be available for

inspection and evaluation by the Executive Office for United

States Trustees, the United States trustee, bankruptcy

administrator, or chief bankruptcy judge for the district in

which such course of instruction or program is offered; and

`(2) for any 1-year period if the provider thereof has

demonstrated that the course meets the standards of paragraph (1)

and, in addition--

`(A) has been effective in assisting a substantial number of

debtors to understand personal financial management; and

`(B) is otherwise likely to increase substantially debtor

understanding of personal financial management.

`(e) The District Court may, at any time, investigate the

qualifications of a credit counseling agency referred to in subsection

(a), and request production of documents to ensure the integrity and

effectiveness of such credit counseling agencies. The District Court

may, at any time, remove from the approved list under subsection (a) a

credit counseling agency upon finding such agency does not meet the

qualifications of subsection (b).

`(f) The United States trustee or bankruptcy administrator shall

notify the clerk that a credit counseling agency or an instructional

course is no longer approved, in which case the clerk shall remove it

from the list maintained under subsection (a).

`(g)(1) No credit counseling service may provide to a credit reporting

agency information concerning whether an individual debtor has

received or sought instruction concerning personal financial

management from the credit counseling service.

`(2) A credit counseling service that willfully or negligently fails

to comply with any requirement under this title with respect to a

debtor shall be liable for damages in an amount equal to the sum of--

`(A) any actual damages sustained by the debtor as a result of

the violation; and

`(B) any court costs or reasonable attorneys' fees (as determined

by the court) incurred in an action to recover those damages.'.

(2) CLERICAL AMENDMENT- The table of sections for chapter 1 of

title 11, United States Code, is amended by adding at the end the

following:

`111. Credit counseling services; financial management

instructional courses.'.

(f) LIMITATION- Section 362 of title 11, United States Code, is

amended by adding at the end the following:

`(i) If a case commenced under chapter 7, 11, or 13 is dismissed due

to the creation of a debt repayment plan, for purposes of subsection

(c)(3), any subsequent case commenced by the debtor under any such

chapter shall not be presumed to be filed not in good faith.

`(j) On request of a party in interest, the court shall issue an order

under subsection (c) confirming that the automatic stay has been

terminated.'.

SEC. 107. SCHEDULES OF REASONABLE AND NECESSARY EXPENSES.

For purposes of section 707(b) of title 11, United States Code, as

amended by this Act, the Director of the Executive Office for United

States Trustees shall, not later than 180 days after the date of

enactment of this

Act, issue schedules of reasonable and necessary administrative expenses of

administering a chapter 13 plan for each judicial district of the United

States.

TITLE II--ENHANCED CONSUMER PROTECTION

Subtitle A--Penalties for Abusive Creditor Practices

SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.

(a) REDUCTION OF CLAIM- Section 502 of title 11, United States Code,

is amended by adding at the end the following:

`(k)(1) The court, on the motion of the debtor and after a hearing,

may reduce a claim filed under this section based in whole on

unsecured consumer debts by not more than 20 percent of the claim,

if--

`(A) the claim was filed by a creditor who unreasonably refused

to negotiate a reasonable alternative repayment schedule proposed

by an approved credit counseling agency described in section 111

acting on behalf of the debtor;

`(B) the offer of the debtor under subparagraph (A)--

`(i) was made at least 60 days before the filing of the

petition; and

`(ii) provided for payment of at least 60 percent of the

amount of the debt over a period not to exceed the repayment

period of the loan, or a reasonable extension thereof; and

`(C) no part of the debt under the alternative repayment schedule

is nondischargeable.

`(2) The debtor shall have the burden of proving, by clear and

convincing evidence, that--

`(A) the creditor unreasonably refused to consider the debtor's

proposal; and

`(B) the proposed alternative repayment schedule was made prior

to expiration of the 60-day period specified in paragraph

(1)(B)(i).'.

(b) LIMITATION ON AVOIDABILITY- Section 547 of title 11, United States

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

`(h) The trustee may not avoid a transfer if such transfer was made as

a part of an alternative repayment plan between the debtor and any

creditor of the debtor created by an approved credit counseling

agency.'.

SEC. 202. EFFECT OF DISCHARGE.

Section 524 of title 11, United States Code, is amended by adding at

the end the following:

`(i) The willful failure of a creditor to credit payments received

under a plan confirmed under this title (including a plan of

reorganization confirmed under chapter 11 of this title), unless the

plan is dismissed, in default, or the creditor has not received

payments required to be made under the plan in the manner required by

the plan (including crediting the amounts required under the plan),

shall constitute a violation of an injunction under subsection (a)(2)

if the act of the creditor to collect and failure to credit payments

in the manner required by the plan caused material injury to the

debtor.

`(j) Subsection (a)(2) does not operate as an injunction against an

act by a creditor that is the holder of a secured claim, if--

`(1) such creditor retains a security interest in real property

that is the principal residence of the debtor;

`(2) such act is in the ordinary course of business between the

creditor and the debtor; and

`(3) such act is limited to seeking or obtaining periodic

payments associated with a valid security interest in lieu of

pursuit of in rem relief to enforce the lien.'.

SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION PRACTICES.

(a) IN GENERAL- Section 524 of title 11, United States Code, as

amended by this Act, is amended--

(1) in subsection (c), by striking paragraph (2) and inserting

the following:

`(2) the debtor received the disclosures described in subsection

(k) at or before the time at which the debtor signed the

agreement;';

(2) by adding at the end the following:

`(k)(1) The disclosures required under subsection (c)(2) shall consist

of the disclosure statement described in paragraph (3), completed as

required in that paragraph, together with the agreement, statement,

declaration, motion and order described, respectively, in paragraphs

(4) through (8), and shall be the only disclosures required in

connection with the reaffirmation.

`(2) Disclosures made under paragraph (1) shall be made clearly and

conspicuously and in writing. The terms `Amount Reaffirmed' and

`Annual Percentage Rate' shall be disclosed more conspicuously than

other terms, data or information provided in connection with this

disclosure, except that the phrases `Before agreeing to reaffirm a

debt, review these important disclosures' and `Summary of

Reaffirmation Agreement' may be equally conspicuous. Disclosures may

be made in a different order and may use terminology different from

that set forth in paragraphs (2) through (8), except that the terms

`Amount Reaffirmed' and `Annual Percentage Rate' must be used where

indicated.

`(3) The disclosure statement required under this paragraph shall

consist of the following:

`(A) The statement: `Part A: Before agreeing to reaffirm a debt,

review these important disclosures:';

`(B) Under the heading `Summary of Reaffirmation Agreement', the

statement: `This Summary is made pursuant to the requirements of

the Bankruptcy Code';

`(C) The `Amount Reaffirmed', using that term, which shall be--

`(i) the total amount which the debtor agrees to reaffirm,

and

`(ii) the total of any other fees or cost accrued as of the

date of the disclosure statement.

`(D) In conjunction with the disclosure of the `Amount

Reaffirmed', the statements--

`(i) `The amount of debt you have agreed to reaffirm'; and

`(ii) `Your credit agreement may obligate you to pay

additional amounts which may come due after the date of this

disclosure. Consult your credit agreement.'.

`(E) The `Annual Percentage Rate', using that term, which shall

be disclosed as--

`(i) if, at the time the petition is filed, the debt is open

end credit as defined under the Truth in Lending Act (15

U.S.C. 1601 et seq.), then--

`(I) the annual percentage rate determined under

paragraphs (5) and (6) of section 127(b) of the Truth

in Lending Act (15 U.S.C. 1637(b)(5) and (6)), as

applicable, as disclosed to the debtor in the most

recent periodic statement prior to the agreement or, if

no such periodic statement has been provided the debtor

during the prior 6 months, the annual percentage rate

as it would have been so disclosed at the time the

disclosure statement is given the debtor, or to the

extent this annual percentage rate is not readily

available or not applicable, then

`(II) the simple interest rate applicable to the amount

reaffirmed as of the date the disclosure statement is

given to the debtor, or if different simple interest

rates apply to different balances, the simple interest

rate applicable to each such balance, identifying the

amount of each such balance included in the amount

reaffirmed, or

`(III) if the entity making the disclosure elects, to

disclose the annual percentage rate under subclause (I)

and the simple interest rate under subclause (II);

`(ii) if, at the time the petition is filed, the debt is

closed end credit as defined under the Truth in Lending Act

(15 U.S.C. 1601 et seq.), then--

`(I) the annual percentage rate under section 128(a)(4)

of the Truth in Lending Act (15 U.S.C. 1638(a)(4)), as

disclosed to the debtor in the most recent disclosure

statement given the debtor prior to the reaffirmation

agreement with respect to the debt, or, if no such

disclosure statement was provided the debtor, the

annual percentage rate as it would have been so

disclosed at the time the disclosure statement is given

the debtor, or to the extent this annual percentage

rate is not readily available or not applicable, then

`(II) the simple interest rate applicable to the amount

reaffirmed as of the date the disclosure statement is

given the debtor, or if different simple interest rates

apply to different balances, the simple interest rate

applicable to each such balance, identifying the amount

of such balance included in the amount reaffirmed, or

`(III) if the entity making the disclosure elects, to

disclose the annual percentage rate under (I) and the

simple interest rate under (II).

`(F) If the underlying debt transaction was disclosed as a

variable rate transaction on the most recent disclosure given

under the Truth in Lending Act (15 U.S.C. 1601 et seq.), by

stating `The interest rate on your loan may be a variable

interest rate which changes from time to time, so that the annual

percentage rate disclosed here may be higher or lower.'.

`(G) If the debt is secured by a security interest which has not

been waived in whole or in part or determined to be void by a

final order of the court at the time of the disclosure, by

disclosing that a security interest or lien in goods or property

is asserted over some or all of the obligations you are

reaffirming and listing the items and their original purchase

price that are subject to the asserted security interest, or if

not a purchase-money security interest then listing by items or

types and the original amount of the loan.

`(H) At the election of the creditor, a statement of the

repayment schedule using 1 or a combination of the following--

`(i) by making the statement: `Your first payment in the

amount of $XXX is due on XXX but the future payment amount

may be different. Consult your reaffirmation or credit

agreement, as applicable.', and stating the amount of the

first payment and the due date of that payment in the places

provided;

`(ii) by making the statement: `Your payment schedule will

be:', and describing the repayment schedule with the number,

amount and due dates or period of payments scheduled to

repay the obligations reaffirmed to the extent then known by

the disclosing party; or

`(iii) by describing the debtor's repayment obligations with

reasonable specificity to the extent then known by the

disclosing party.

`(I) The following statement: `Note: When this disclosure refers

to what a creditor `may' do, it does not use the word `may' to

give the creditor specific permission. The word `may' is used to

tell you what might occur if the law permits the creditor to take

the action. If you have questions about your reaffirmation or

what the law requires, talk to the attorney who helped you

negotiate this agreement. If you don't have an attorney helping

you, the judge will explain the effect of your reaffirmation when

the reaffirmation hearing is held.'.

`(J)(i) The following additional statements:

`Reaffirming a debt is a serious financial decision. The law requires

you to take certain steps to make sure the decision is in your best

interest. If these steps are not completed, the reaffirmation

agreement is not effective, even though you have signed it.

`1. Read the disclosures in this Part A carefully. Consider the

decision to reaffirm carefully. Then, if you want to reaffirm,

sign the reaffirmation agreement in Part B (or you may use a

separate agreement you and your creditor agree on).

`2. Complete and sign Part D and be sure you can afford to make

the payments you are agreeing to make and have received a copy of

the disclosure

statement and a completed and signed reaffirmation agreement.

`3. If you were represented by an attorney during the negotiation

of the reaffirmation agreement, the attorney must have signed the

certification in Part C.

`4. If you were not represented by an attorney during the

negotiation of the reaffirmation agreement, you must have

completed and signed Part E.

`5. The original of this disclosure must be filed with the court

by you or your creditor. If a separate reaffirmation agreement

(other than the one in Part B) has been signed, it must be

attached.

`6. If you were represented by an attorney during the negotiation

of the reaffirmation agreement, your reaffirmation agreement

becomes effective upon filing with the court unless the

reaffirmation is presumed to be an undue hardship as explained in

Part D.

`7. If you were not represented by an attorney during the

negotiation of the reaffirmation agreement, it will not be

effective unless the court approves it. The court will notify you

of the hearing on your reaffirmation agreement. You must attend

this hearing in bankruptcy court where the judge will review your

agreement. The bankruptcy court must approve the agreement as

consistent with your best interests, except that no court

approval is required if the agreement is for a consumer debt

secured by a mortgage, deed of trust, security deed or other lien

on your real property, like your home.

`Your right to rescind a reaffirmation. You may rescind (cancel) your

reaffirmation at any time before the bankruptcy court enters a

discharge order or within 60 days after the agreement is filed with

the court, whichever is longer. To rescind or cancel, you must notify

the creditor that the agreement is canceled.

`What are your obligations if you reaffirm the debt? A reaffirmed debt

remains your personal legal obligation. It is not discharged in your

bankruptcy. That means that if you default on your reaffirmed debt

after your bankruptcy is over, your creditor may be able to take your

property or your wages. Otherwise, your obligations will be determined

by the reaffirmation agreement which may have changed the terms of the

original agreement. For example, if you are reaffirming an open end

credit agreement, the creditor may be permitted by that agreement or

applicable law to change the terms of the agreement in the future

under certain conditions.

`Are you required to enter into a reaffirmation agreement by any law?

No, you are not required to reaffirm a debt by any law. Only agree to

reaffirm a debt if it is in your best interest. Be sure you can afford

the payments you agree to make.

`What if your creditor has a security interest or lien? Your

bankruptcy discharge does not eliminate any lien on your property. A

`lien' is often referred to as a security interest, deed of trust,

mortgage or security deed. Even if you do not reaffirm and your

personal liability on the debt is discharged, because of the lien your

creditor may still have the right to take the security property if you

do not pay the debt or default on it. If the lien is on an item of

personal property that is exempt under your State's law or that the

trustee has abandoned, you may be able to redeem the item rather than

reaffirm the debt. To redeem, you make a single payment to the

creditor equal to the current value of the security property, as

agreed by the parties or determined by the court.'.

`(ii) In the case of a reaffirmation under subsection (m)(2),

numbered paragraph 6 in the disclosures required by clause (i) of

this subparagraph shall read as follows:

`6. If you were represented by an attorney during the negotiation

of the reaffirmation agreement, your reaffirmation agreement

becomes effective upon filing with the court.'.

`(4) The form of reaffirmation agreement required under this paragraph

shall consist of the following:

`Part B: Reaffirmation Agreement. I/we agree to reaffirm the

obligations arising under the credit agreement described below.

`Brief description of credit agreement:

`Description of any changes to the credit agreement made as part of

this reaffirmation agreement:

`Signature: Date:

`Borrower:

`Co-borrower, if also reaffirming:

`Accepted by creditor:

`Date of creditor acceptance:'.

`(5)(A) The declaration shall consist of the following:

`Part C: Certification by Debtor's Attorney (If Any).

`I hereby certify that (1) this agreement represents a fully informed

and voluntary agreement by the debtor(s); (2) this agreement does not

impose an undue hardship on the debtor or any dependent of the debtor;

and (3) I have fully advised the debtor of the legal effect and

consequences of this agreement and any default under this agreement.

`Signature of Debtor's Attorney: Date:'.

`(B) In the case of reaffirmations in which a presumption of undue

hardship has been established, the certification shall state that in

the opinion of the attorney, the debtor is able to make the payment.

`(C) In the case of a reaffirmation agreement under subsection (m)(2),

subparagraph (B) is not applicable.

`(6)(A) The statement in support of reaffirmation agreement, which the

debtor shall sign and date prior to filing with the court, shall

consist of the following:

`Part D: Debtor's Statement in Support of Reaffirmation Agreement.

`1. I believe this agreement will not impose an undue hardship on my

dependents or me. I can afford to make the payments on the reaffirmed

debt because my monthly income (take home pay plus any other income

received) is $XXX, and my actual current monthly expenses including

monthly payments on post-bankruptcy debt and other reaffirmation

agreements total $XXX, leaving $XXX 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: XXX.

`2. I received a copy of the Reaffirmation Disclosure Statement in

Part A and a completed and signed reaffirmation agreement.'.

`(B) Where the debtor is represented by counsel and is reaffirming a

debt owed to a creditor defined in section 19(b)(1)(A)(iv) of the

Federal Reserve Act (12 U.S.C. 461(b)(1)(A)(iv)), the statement of

support of the reaffirmation agreement, which the debtor shall sign

and date prior to filing with the court, shall consist of the

following:

`I believe this agreement is in my financial interest. I can afford to

make the payments on the reaffirmed debt. I received a copy of the

Reaffirmation Disclosure Statement in Part A and a completed and

signed reaffirmation agreement.'

`(7) The motion, which may be used if approval of the agreement by the

court is required in order for it to be effective and shall be signed

and dated by the moving party, shall consist of the following:

`Part E: Motion for Court Approval (To be completed only where debtor

is not represented by an attorney.). I (we), the debtor, affirm the

following to be true and correct:

`I am not represented by an attorney in connection with this

reaffirmation agreement.

`I believe this agreement is in my best interest based on the income

and expenses I have disclosed in my Statement in Support of this

reaffirmation agreement above, and because (provide any additional

relevant reasons the court should consider):

`Therefore, I ask the court for an order approving this reaffirmation

agreement.'.

`(8) The court order, which may be used to approve a reaffirmation,

shall consist of the following:

`Court Order: The court grants the debtor's motion and approves the

reaffirmation agreement described above.'.

`(9) Subsection (a)(2) does not operate as an injunction against an

act by a creditor that is the holder of a secured claim, if--

`(A) such creditor retains a security interest in real property

that is the debtor's principal residence;

`(B) such act is in the ordinary course of business between the

creditor and the debtor; and

`(C) such act is limited to seeking or obtaining periodic

payments associated with a valid security interest in lieu of

pursuit of in rem relief to enforce the lien.

`(l) Notwithstanding any other provision of this title:

`(1) A creditor may accept payments from a debtor before and

after the filing of a reaffirmation agreement with the court.

`(2) A creditor may accept payments from a debtor under a

reaffirmation agreement which the creditor believes in good faith

to be effective.

`(3) The requirements of subsections (c)(2) and (k) shall be

satisfied if disclosures required under those subsections are

given in good faith.

`(m)(1) Until 60 days after a reaffirmation agreement is filed with

the court (or such additional period as the court, after notice and

hearing and for cause, orders before the expiration of such period),

it shall be presumed that the reaffirmation agreement is an undue

hardship on the debtor if the debtor's monthly income less the

debtor's monthly expenses as shown on the debtor's completed and

signed statement in support of the reaffirmation agreement required

under subsection (k)(6)(A) is less than the scheduled payments on the

reaffirmed debt. This presumption shall be reviewed by the court. The

presumption may be rebutted in writing by the debtor if the statement

includes an explanation which identifies additional sources of funds

to make the payments as agreed upon under the terms of the

reaffirmation agreement. If the presumption is not rebutted to the

satisfaction of the court, the court may disapprove the agreement. No

agreement shall be disapproved without notice and hearing to the

debtor and creditor and such hearing shall be concluded before the

entry of the debtor's discharge.

`(2) This subsection does not apply to reaffirmation agreements where

the creditor is a credit union, as defined in section 19(b)(1)(A)(iv)

of the Federal Reserve Act (12 U.S.C. 461(b)(1)(A)(iv)).'.

(b) LAW ENFORCEMENT-

(1) IN GENERAL- Chapter 9 of title 18, United States Code, is

amended by adding at the end the following:

`Sec. 158. Designation of United States attorneys and agents of the Federal

Bureau of Investigation to address abusive reaffirmations of debt and

materially fraudulent statements in bankruptcy schedules

`(a) IN GENERAL- The Attorney General of the United States shall

designate the individuals described in subsection (b) to have primary

responsibility in carrying out enforcement activities in addressing

violations of section 152 or 157 relating to abusive reaffirmations of

debt. In addition to addressing the violations referred to in the

preceding sentence, the individuals described under subsection (b)

shall address violations of section 152 or 157 relating to materially

fraudulent statements in bankruptcy schedules that are intentionally

false or intentionally misleading.

`(b) UNITED STATES DISTRICT ATTORNEYS AND AGENTS OF THE FEDERAL BUREAU

OF INVESTIGATION--The individuals referred to in subsection (a) are--

`(1) a United States attorney for each judicial district of the

United States; and

`(2) an agent of the Federal Bureau of Investigation (within the

meaning of section 3107) for each field office of the Federal

Bureau of Investigation.

`(c) BANKRUPTCY INVESTIGATIONS- Each United States attorney designated

under this section shall, in addition to any other responsibilities,

have primary responsibility for carrying out the duties of a United

States attorney under section 3057.

`(d) BANKRUPTCY PROCEDURES- The bankruptcy courts shall establish

procedures for referring any case which may contain a materially

fraudulent statement in a bankruptcy schedule to the individuals

designated under this section.'.

(2) CLERICAL AMENDMENT- The analysis for chapter 9 of title 18,

United States Code, is amended by adding at the end the

following:

`158. Designation of United States attorneys and agents of the

Federal Bureau of Investigation to address abusive reaffirmations

of debt and materially fraudulent statements in bankruptcy

schedules.'.

Subtitle B--Priority Child Support

SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.

Section 101 of title 11, United States Code, is amended--

(1) by striking paragraph (12A); and

(2) by inserting after paragraph (14) the following:

`(14A) `domestic support obligation' means a debt that accrues

before or after the entry of an order for relief under this

title, including interest that accrues on that debt as provided

under applicable nonbankruptcy law notwithstanding any other

provision of this title, that is--

`(A) owed to or recoverable by--

`(i) a spouse, former spouse, or child of the debtor or

such child's parent, legal guardian, or responsible

relative; or

`(ii) a governmental unit;

`(B) in the nature of alimony, maintenance, or support

(including assistance provided by a governmental unit) of

such spouse, former spouse, or child of the debtor or such

child's parent, without regard to whether such debt is

expressly so designated;

`(C) established or subject to establishment before or after

entry of an order for relief under this title, by reason of

applicable provisions of--

`(i) a separation agreement, divorce decree, or

property settlement agreement;

`(ii) an order of a court of record; or

`(iii) a determination made in accordance with

applicable nonbankruptcy law by a governmental unit;

and

`(D) not assigned to a nongovernmental entity, unless that

obligation is assigned voluntarily by the spouse, former

spouse, child, or parent, legal guardian, or responsible

relative of the child for the purpose of collecting the

debt;'.

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

Section 507(a) of title 11, United States Code, is amended--

(1) by striking paragraph (7);

(2) by redesignating paragraphs (1) through (6) as paragraphs (2)

through (7), respectively;

(3) in paragraph (2), as redesignated, by striking `First' and

inserting `Second';

(4) in paragraph (3), as redesignated, by striking `Second' and

inserting `Third';

(5) in paragraph (4), as redesignated--

(A) by striking `Third' and inserting `Fourth'; and

(B) by striking the semicolon at the end and inserting a

period;

(6) in paragraph (5), as redesignated, by striking `Fourth' and

inserting `Fifth';

(7) in paragraph (6), as redesignated, by striking `Fifth' and

inserting `Sixth';

(8) in paragraph (7), as redesignated, by striking `Sixth' and

inserting `Seventh'; and

(9) by inserting before paragraph (2), as redesignated, the

following:

`(1) First:

`(A) Allowed unsecured claims for domestic support

obligations that, as of the date of the filing of the

petition, are owed to or recoverable by a spouse, former

spouse, or child of the debtor, or the parent, legal

guardian, or responsible relative of such child, without

regard to whether the claim is filed by such person or is

filed by a governmental unit on behalf of that person, on

the condition that funds received under this paragraph by a

governmental unit under this title after the date of filing

of the petition shall be applied and distributed in

accordance with applicable nonbankruptcy law.

`(B) Subject to claims under subparagraph (A), allowed

unsecured claims for domestic support obligations that, as

of the date the petition was filed are assigned by a spouse,

former spouse, child of the debtor, or such child's parent,

legal guardian, or responsible relative to a governmental

unit (unless such obligation is assigned voluntarily by the

spouse, former spouse, child, parent, legal guardian, or

responsible relative of the child for the purpose of

collecting the debt) or are owed directly to or recoverable

by a government unit under applicable nonbankruptcy law, on

the condition that funds received under this paragraph by a

governmental unit under this title after the date of filing

of the petition be applied and distributed in accordance

with applicable nonbankruptcy law.'.

SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE IN CASES

INVOLVING DOMESTIC SUPPORT OBLIGATIONS.

Title 11, United States Code, is amended--

(1) in section 1129(a), by adding at the end the following:

`(14) If the debtor is required by a judicial or administrative

order or statute to pay a domestic support obligation, the debtor

has paid all amounts payable under such order or statute for such

obligation that first become payable after the date on which the

petition is filed.';

(2) in section 1208(c)--

(A) in paragraph (8), by striking `or' at the end;

(B) in paragraph (9), by striking the period at the end and

inserting `; and'; and

(C) by adding at the end the following:

`(10) failure of the debtor to pay any domestic support

obligation that first becomes payable after the date on which the

petition is filed.';

(3) in section 1222(a)--

(A) in paragraph (2), by striking `and' at the end;

(B) in paragraph (3), by striking the period at the end and

inserting `; and'; and

(C) by adding at the end the following:

`(4) notwithstanding any other provision of this section, a plan

may provide for less than full payment of all amounts owed for a

claim entitled to priority under section 507(a)(1)(B) only if the

plan provides that all of the debtor's projected disposable

income for a 5-year period, beginning on the date that the first

payment is due under the plan, will be applied to make payments

under the plan.';

(4) in section 1222(b)--

(A) by redesignating paragraph (11) as paragraph (12); and

(B) by inserting after paragraph (10) the following:

`(11) provide for the payment of interest accruing after the date

of the filing of the petition on unsecured claims that are

nondischargeable under section 1328(a), except that such interest

may be paid only to the extent that the debtor has disposable

income available to pay such interest after making provision for

full payment of all allowed claims;';

(5) in section 1225(a)--

(A) in paragraph (5), by striking `and' at the end;

(B) in paragraph (6), by striking the period at the end and

inserting `; and'; and

(C) by adding at the end the following:

`(7) if the debtor is required by a judicial or administrative

order or statute to pay a domestic support obligation, the debtor

has paid all amounts payable under such order for such obligation

that first become payable after the date on which the petition is

filed.';

(6) in section 1228(a), in the matter preceding paragraph (1), by

inserting `, and in the case of a debtor who is required by a

judicial or administrative order to pay a domestic support

obligation, after such debtor certifies that all amounts payable

under such order or statute that are due on or before the date of

the certification (including amounts due before the petition was

filed, but only to the extent provided for in the plan) have been

paid' after `completion by the debtor of all payments under the

plan';

(7) in section 1307(c)--

(A) in paragraph (9), by striking `or' at the end;

(B) in paragraph (10), by striking the period at the end and

inserting `; or'; and

(C) by adding at the end the following:

`(11) failure of the debtor to pay any domestic support

obligation that first becomes payable after the date on which the

petition is filed.';

(8) in section 1322(a)--

(A) in paragraph (2), by striking `and' at the end;

(B) in paragraph (3), by striking the period at the end and

inserting `; and'; and

(C) by adding in the end the following:

`(4) notwithstanding any other provision of this section, a plan

may provide for less than full payment of all amounts owed for a

claim entitled to priority under section 507(a)(1)(B) only if the

plan provides that all of the debtor's projected disposable

income for a 5-year period beginning on the date that the first

payment is due under the plan will be applied to make payments

under the plan.';

(9) in section 1322(b)--

(A) in paragraph (9), by striking `; and' and inserting a

semicolon;

(B) by redesignating paragraph (10) as paragraph (11); and

(C) inserting after paragraph (9) the following:

`(10) provide for the payment of interest accruing after the date

of the filing of the petition on unsecured claims that are

nondischargeable under section 1328(a), except that such interest

may be paid only to the extent that the debtor has disposable

income available to pay such interest after making provision for

full payment of all allowed claims; and';

(10) in section 1325(a) (as amended by this Act), by adding at

the end the following:

`(8) the debtor is required by a judicial or administrative order

or statute to pay a domestic support obligation, the debtor has

paid all amounts payable under such order or statute for such

obligation that first becomes payable after the date on which the

petition is filed; and';

(11) in section 1328(a), in the matter preceding paragraph (1),

by inserting `, and in the case of a debtor who is required by a

judicial or administrative order to pay a domestic support

obligation, after such debtor certifies that all amounts payable

under such order or statute that are due on or before the date of

the certification (including amounts due before the petition was

filed, but only to the extent provided for in the plan) have been

paid' after `completion by the debtor of all payments under the

plan'.

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

PROCEEDINGS.

Section 362(b) of title 11, United States Code, is amended by striking

paragraph (2) and inserting the following:

`(2) under subsection (a)--

`(A) of the commencement or continuation of a civil action

or proceeding--

`(i) for the establishment of paternity;

`(ii) for the establishment or modification of an order

for domestic support obligations;

`(iii) concerning child custody or visitation;

`(iv) for the dissolution of a marriage, except to the

extent that such proceeding seeks to determine the

division of property that is property of the estate; or

`(v) regarding domestic violence;

`(B) the collection of a domestic support obligation from

property that is not property of the estate;

`(C) with respect to the withholding of income that is

property of the estate or property of the debtor for payment

of a domestic support obligation under a judicial or

administrative order;

`(D) the withholding, suspension, or restriction of drivers'

licenses, professional and occupational licenses, and

recreational licenses under State law, as specified in

section 466(a)(16) of the Social Security Act (42 U.S.C.

666(a)(16));

`(E) the reporting of overdue support owed by a parent to

any consumer reporting agency as specified in section

466(a)(7) of the Social Security Act (42 U.S.C. 666(a)(7));

`(F) the interception of tax refunds, as specified in

sections 464 and 466(a)(3) of the Social Security Act (42

U.S.C. 664 and 666(a)(3)) or under an analogous State law;

or

`(G) the enforcement of medical obligations as specified

under title IV of the Social Security Act (42 U.S.C. 601 et

seq.);'.

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

AND SUPPORT.

Section 523 of title 11, United States Code, is amended--

(1) in subsection (a)--

(A) by striking paragraph (5) and inserting the following:

`(5) for a domestic support obligation;';

(B) in paragraph (15)--

(i) by inserting `to a spouse, former spouse, or child

of the debtor and' before `not of the kind';

(ii) by inserting `or' after `court of record,'; and

(iii) by striking `unless--' and all that follows

through the end of the paragraph and inserting a

semicolon; and

(C) by striking paragraph (18); and

(2) in subsection (c), by striking `(6), or (15)' each place it

appears and inserting `or (6)'.

SEC. 216. CONTINUED LIABILITY OF PROPERTY.

Section 522 of title 11, United States Code, is amended--

(1) in subsection (c), by striking paragraph (1) and inserting

the following:

`(1) a debt of a kind specified in paragraph (1) or (5) of

section 523(a) (in which case, notwithstanding any provision of

applicable nonbankruptcy law to the contrary, such property shall

be liable for a debt of a kind specified in section 523(a)(5));';

(2) in subsection (f)(1)(A), by striking the dash and all that

follows through the end of the subparagraph and inserting `of a

kind that is specified in section 523(a)(5); or'; and

(3) in subsection (g)(2), by striking `subsection (f)(2)' and

inserting `subsection (f)(1)(B)'.

SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS AGAINST PREFERENTIAL

TRANSFER MOTIONS.

Section 547(c)(7) of title 11, United States Code, is amended to read

as follows:

`(7) to the extent such transfer was a bona fide payment of a

debt for a domestic support obligation;'.

SEC. 218. DISPOSABLE INCOME DEFINED.

(a) CONFIRMATION OF PLAN UNDER CHAPTER 12- Section 1225(b)(2)(A) of

title 11, United States Code, is amended by inserting `or for a

domestic support obligation that first becomes payable after the date

on which the petition is filed' after `dependent of the debtor'.

(b) CONFIRMATION OF PLAN UNDER CHAPTER 13- Section 1325(b)(2)(A) of

title 11, United States Code, is amended by inserting `or for a

domestic support obligation that first becomes payable after the date

on which the petition is filed' after `dependent of the debtor'.

SEC. 219. COLLECTION OF CHILD SUPPORT.

(a) DUTIES OF TRUSTEE UNDER CHAPTER 7- Section 704 of title 11, United

States Code, as amended by this Act, is amended--

(1) in subsection (a)--

(A) in paragraph (8), by striking `and' at the end;

(B) in paragraph (9), by striking the period and inserting a

semicolon; and

(C) by adding at the end the following:

`(10) if, with respect to an individual debtor, there is a claim

for a domestic support obligation, provide the applicable

notification specified in subsection (c); and'; and

(2) by adding at the end the following:

`(c)(1) In any case described in subsection (a)(10), the trustee

shall--

`(A)(i) notify in writing the holder of the claim of the right of

that holder to use the services of a State child support

enforcement agency established under sections 464 and 466 of the

Social Security Act (42 U.S.C. 664, 666) for the State in which

the holder resides for assistance in collecting child support

during and after the bankruptcy procedures;

`(ii) include in the notice under this paragraph the address and

telephone number of the child support enforcement agency; and

`(iii) include in the notice an explanation of the rights of the

holder of the claim to payment of the claim under this chapter;

and

`(B)(i) notify in writing the State child support agency of the

State in which the holder of the claim resides of the claim;

`(ii) include in the notice under this paragraph the name,

address, and telephone number of the holder of the claim; and

`(iii) at such time as the debtor is granted a discharge under

section 727, notify the holder of that claim and the State child

support agency of the State in which that holder resides of--

`(I) the granting of the discharge;

`(II) the last recent known address of the debtor;

`(III) the last recent known name and address of the

debtor's employer; and

`(IV) with respect to the debtor's case, the name of each

creditor that holds a claim that--

`(aa) is not discharged under paragraph (2), (4), or

(14A) of section 523(a); or

`(bb) was reaffirmed by the debtor under section

524(c).

`(2)(A) A holder of a claim or a State child support agency may

request from a creditor described in paragraph (1)(B)(iii)(IV) the

last known address of the debtor.

`(B) Notwithstanding any other provision of law, a creditor that makes

a disclosure of a last known address of a debtor in connection with a

request made under subparagraph (A) shall not be liable to the debtor

or any other person by reason of making that disclosure.'.

(b) DUTIES OF TRUSTEE UNDER CHAPTER 11- Section 1106 of title 11,

United States Code, is amended--

(1) in subsection (a)--

(A) in paragraph (6), by striking `and' at the end;

(B) in paragraph (7), by striking the period and inserting

`; and'; and

(C) by adding at the end the following:

`(8) if, with respect to an individual debtor, there is a claim

for a domestic support obligation, provide the applicable

notification specified in subsection (c).'; and

(2) by adding at the end the following:

`(c)(1) In any case described in subsection (a)(7), the trustee

shall--

`(A)(i) notify in writing the holder of the claim of the right of

that holder to use the services of a State child support

enforcement agency established under sections 464 and 466 of the

Social Security Act (42 U.S.C. 664, 666) for the State in which

the holder resides; and

`(ii) include in the notice under this paragraph the address and

telephone number of the child support enforcement agency; and

`(B)(i) notify, in writing, the State child support agency (of

the State in which the holder of the claim resides) of the claim;

`(ii) include in the notice under this paragraph the name,

address, and telephone number of the holder of the claim; and

`(iii) at such time as the debtor is granted a discharge under

section 1141, notify the holder of the claim and the State child

support agency of the State in which that holder resides of--

`(I) the granting of the discharge;

`(II) the last recent known address of the debtor;

`(III) the last recent known name and address of the

debtor's employer; and

`(IV) with respect to the debtor's case, the name of each

creditor that holds a claim that--

`(aa) is not discharged under paragraph (2), (3), or

(14) of section 523(a); or

`(bb) was reaffirmed by the debtor under section

524(c).

`(2)(A) A holder of a claim or a State child support agency may

request from a creditor described in paragraph (1)(B)(iii)(IV) the

last known address of the debtor.

`(B) Notwithstanding any other provision of law, a creditor that makes

a disclosure of a last known address of a debtor in connection with a

request made under subparagraph (A) shall not be liable to the debtor

or any other person by reason of making that disclosure.'.

(c) DUTIES OF TRUSTEE UNDER CHAPTER 12- Section 1202 of title 11,

United States Code, is amended--

(1) in subsection (b)--

(A) in paragraph (4), by striking `and' at the end;

(B) in paragraph (5), by striking the period and inserting

`; and'; and

(C) by adding at the end the following:

`(6) if, with respect to an individual debtor, there is a claim

for a domestic support obligation, provide the applicable

notification specified in subsection (c).'; and

(2) by adding at the end the following:

`(c)(1) In any case described in subsection (b)(6), the trustee

shall--

`(A)(i) notify in writing the holder of the claim of the right of

that holder to use the services of a State child support

enforcement agency established under sections 464 and 466 of the

Social Security Act (42 U.S.C. 664, 666) for the State in which

the holder resides; and

`(ii) include in the notice under this paragraph the address and

telephone number of the child support enforcement agency; and

`(B)(i) notify, in writing, the State child support agency (of

the State in which the holder of the claim resides) of the claim;

`(ii) include in the notice under this paragraph the name,

address, and telephone number of the holder of the claim; and

`(iii) at such time as the debtor is granted a discharge under

section 1228, notify the holder of the claim and the State child

support agency of the State in which that holder resides of--

`(I) the granting of the discharge;

`(II) the last recent known address of the debtor;

`(III) the last recent known name and address of the

debtor's employer; and

`(IV) with respect to the debtor's case, the name of each

creditor that holds a claim that--

`(aa) is not discharged under paragraph (2), (4), or

(14) of section 523(a); or

`(bb) was reaffirmed by the debtor under section

524(c).

`(2)(A) A holder of a claim or a State child support agency may

request from a creditor described in paragraph (1)(B)(iii)(IV) the

last known address of the debtor.

`(B) Notwithstanding any other provision of law, a creditor that makes

a disclosure of a last known address of a debtor in connection with a

request made under subparagraph (A) shall not be liable to the debtor

or any other person by reason of making that disclosure.'.

(d) DUTIES OF TRUSTEE UNDER CHAPTER 13- Section 1302 of title 11,

United States Code, is amended--

(1) in subsection (b)--

(A) in paragraph (4), by striking `and' at the end;

(B) in paragraph (5), by striking the period and inserting

`; and'; and

(C) by adding at the end the following:

`(6) if, with respect to an individual debtor, there is a claim

for a domestic support obligation, provide the applicable

notification specified in subsection (d).'; and

(2) by adding at the end the following:

`(d)(1) In any case described in subsection (b)(6), the trustee

shall--

`(A)(i) notify in writing the holder of the claim of the right of

that holder to use the services of a State child support

enforcement agency established under sections 464 and 466 of the

Social Security Act (42 U.S.C. 664, 666) for the State in which

the holder resides; and

`(ii) include in the notice under this paragraph the address and

telephone number of the child support enforcement agency; and

`(B)(i) notify in writing the State child support agency of the

State in which the holder of the claim resides of the claim;

`(ii) include in the notice under this paragraph the name,

address, and telephone number of the holder of the claim; and

`(iii) at such time as the debtor is granted a discharge under

section 1328, notify the holder of the claim and the State child

support agency of the State in which that holder resides of--

`(I) the granting of the discharge;

`(II) the last recent known address of the debtor;

`(III) the last recent known name and address of the

debtor's employer; and

`(IV) with respect to the debtor's case, the name of each

creditor that holds a claim that--

`(aa) is not discharged under paragraph (2), (4), or

(14) of section 523(a); or

`(bb) was reaffirmed by the debtor under section

524(c).

`(2)(A) A holder of a claim or a State child support agency may

request from a creditor described in paragraph (1)(B)(iii)(IV) the

last known address of the debtor.

`(B) Notwithstanding any other provision of law, a creditor that makes

a disclosure of a last known address of a debtor in connection with a

request made under subparagraph (A) shall not be liable to the debtor

or any other person by reason of making that disclosure.'.

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

Section 523(a) of title 11, United States Code, is amended by striking

paragraph (8) and inserting the following:

`(8) unless excepting such debt from discharge under this

paragraph would impose an undue hardship on the debtor and the

debtor's dependents, for--

`(A)(i) an educational benefit overpayment or loan made,

insured, or guaranteed by a governmental unit, or made under

any program funded in whole or in part by a governmental

unit or nonprofit institution; or

`(ii) an obligation to repay funds received as an

educational benefit, scholarship, or stipend; or

`(B) any other educational loan that is a qualified

education loan, as that term is defined in section 221(e)(1)

of the Internal Revenue Code of 1986, incurred by an

individual debtor;'.

Subtitle C--Other Consumer Protections

SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY FILINGS.

Section 110 of title 11, United States Code, is amended--

(1) in subsection (a)(1), by striking `a person, other than an

attorney or an employee of an attorney' and inserting `the

attorney for the debtor or an employee of such attorney under the

direct supervision of such attorney';

(2) in subsection (b)--

(A) in paragraph (1), by adding at the end the following:

`If a bankruptcy petition preparer is not an individual,

then an officer, principal, responsible person, or partner

of the preparer shall be required to--

`(A) sign the document for filing; and

`(B) print on the document the name and address of that officer,

principal, responsible person or partner.'; and

(B) by striking paragraph (2) and inserting the following:

`(2)(A) Before preparing any document for filing or accepting any fees

from a debtor, the bankruptcy petition preparer shall provide to the

debtor a written notice to debtors concerning bankruptcy petition

preparers, which shall be on an official form issued by the Judicial

Conference of the United States.

`(B) The notice under subparagraph (A)--

`(i) shall inform the debtor in simple language that a bankruptcy

petition preparer is not an attorney and may not practice law or

give legal advice;

`(ii) may contain a description of examples of legal advice that

a bankruptcy petition preparer is not authorized to give, in

addition to any advice that the preparer may not give by reason

of subsection (e)(2); and

`(iii) shall--

`(I) be signed by--

`(aa) the debtor; and

`(bb) the bankruptcy petition preparer, under penalty

of perjury; and

`(II) be filed with any document for filing.';

(3) in subsection (c)--

(A) in paragraph (2)--

(i) by striking `(2) For purposes' and inserting

`(2)(A) Subject to subparagraph (B), for purposes'; and

(ii) by adding at the end the following:

`(B) If a bankruptcy petition preparer is not an individual, the

identifying number of the bankruptcy petition preparer shall be the

Social Security account number of the officer, principal, responsible

person, or partner of the preparer.'; and

(B) by striking paragraph (3);

(4) in subsection (d)--

(A) by striking `(d)(1)' and inserting `(d)'; and

(B) by striking paragraph (2);

(5) in subsection (e)--

(A) by striking paragraph (2); and

(B) by adding at the end the following:

`(2)(A) A bankruptcy petition preparer may not offer a potential

bankruptcy debtor any legal advice, including any legal advice

described in subparagraph (B).

`(B) The legal advice referred to in subparagraph (A) includes

advising the debtor--

`(i) whether--

`(I) to file a petition under this title; or

`(II) commencing a case under chapter 7, 11, 12, or 13 is

appropriate;

`(ii) whether the debtor's debts will be eliminated or discharged

in a case under this title;

`(iii) whether the debtor will be able to retain the debtor's

home, car, or other property after commencing a case under this

title;

`(iv) concerning--

`(I) the tax consequences of a case brought under this

title; or

`(II) the dischargeability of tax claims;

`(v) whether the debtor may or should promise to repay debts to a

creditor or enter into a reaffirmation agreement with a creditor

to reaffirm a debt;

`(vi) concerning how to characterize the nature of the debtor's

interests in property or the debtor's debts; or

`(vii) concerning bankruptcy procedures and rights.';

(6) in subsection (f)--

(A) by striking `(f)(1)' and inserting `(f)'; and

(B) by striking paragraph (2);

(7) in subsection (g)--

(A) by striking `(g)(1)' and inserting `(g)'; and

(B) by striking paragraph (2);

(8) in subsection (h)--

(A) by redesignating paragraphs (1) through (4) as

paragraphs (2) through (5), respectively;

(B) by inserting before paragraph (2), as redesignated, the

following:

`(1) The Supreme Court may promulgate rules under section 2075 of

title 28, or the Judicial Conference of the United States may

prescribe guidelines, for setting a maximum allowable fee chargeable

by a bankruptcy petition preparer. A bankruptcy petition preparer

shall notify the debtor of any such maximum amount before preparing

any document for filing for a debtor or accepting any fee from the

debtor.';

(C) in paragraph (2), as redesignated--

(i) by striking `Within 10 days after the date of

filing a petition, a bankruptcy petition preparer shall

file a' and inserting `A';

(ii) by inserting `by the bankruptcy petition preparer

shall be filed together with the petition,' after

`perjury'; and

(iii) by adding at the end the following: `If rules or

guidelines setting a maximum fee for services have been

promulgated or prescribed under paragraph (1), the

declaration under this paragraph shall include a

certification that the bankruptcy petition preparer

complied with the notification requirement under

paragraph (1).';

(D) by striking paragraph (3), as redesignated, and

inserting the following:

`(3)(A) The court shall disallow and order the immediate turnover

to the bankruptcy trustee any fee referred to in paragraph (2)

found to be in excess of the value of any services--

`(i) rendered by the preparer during the 12-month period

immediately preceding the date of filing of the petition; or

`(ii) found to be in violation of any rule or guideline

promulgated or prescribed under paragraph (1).

`(B) All fees charged by a bankruptcy petition preparer may be

forfeited in any case in which the bankruptcy petition preparer

fails to comply with this subsection or subsection (b), (c), (d),

(e), (f), or (g).

`(C) An individual may exempt any funds recovered under this

paragraph under section 522(b).'; and

(E) in paragraph (4), as redesignated, by striking `or the

United States trustee' and inserting `the United States

trustee, the bankruptcy administrator, or the court, on the

initiative of the court,';

(9) in subsection (i)(1), by striking the matter preceding

subparagraph (A) and inserting the following:

`(i)(1) If a bankruptcy petition preparer violates this section or

commits any act that the court finds to be fraudulent, unfair, or

deceptive, on motion of the debtor, trustee, United States trustee, or

bankruptcy administrator, and after the court holds a hearing with

respect to that violation or act, the court shall order the bankruptcy

petition preparer to pay to the debtor--';

(10) in subsection (j)--

(A) in paragraph (2)--

(i) in subparagraph (A)(i)(I), by striking `a violation

of which subjects a person to criminal penalty';

(ii) in subparagraph (B)--

(I) by striking `or has not paid a penalty' and

inserting `has not paid a penalty'; and

(II) by inserting `or failed to disgorge all fees

ordered by the court' after `a penalty imposed

under this section,';

(B) by redesignating paragraph (3) as paragraph (4); and

(C) by inserting after paragraph (2) the following:

`(3) The court, as part of its contempt power, may enjoin a bankruptcy

petition preparer that has failed to comply with a previous order

issued under this section. The injunction under this paragraph may be

issued upon motion of the court, the trustee, the United States

trustee, or the bankruptcy administrator.'; and

(11) by adding at the end the following:

`(l)(1) A bankruptcy petition preparer who fails to comply with any

provision of subsection (b), (c), (d), (e), (f), (g), or (h) may be

fined not more than $500 for each such failure.

`(2) The court shall triple the amount of a fine assessed under

paragraph (1) in any case in which the court finds that a bankruptcy

petition preparer--

`(A) advised the debtor to exclude assets or income that should

have been included on applicable schedules;

`(B) advised the debtor to use a false Social Security account

number;

`(C) failed to inform the debtor that the debtor was filing for

relief under this title; or

`(D) prepared a document for filing in a manner that failed to

disclose the identity of the preparer.

`(3) The debtor, the trustee, a creditor, the United States trustee,

or the bankruptcy administrator may file a motion for an order

imposing a fine on the bankruptcy petition preparer for each violation

of this section.

`(4)(A) Fines imposed under this subsection in judicial districts

served by United States trustees shall be paid to the United States

trustee, who shall deposit an amount equal to such fines in a special

account of the United States Trustee System Fund referred to in

section 586(e)(2) of title 28. Amounts deposited under this

subparagraph shall be available to fund the enforcement of this

section on a national basis.

`(B) Fines imposed under this subsection in judicial districts served

by bankruptcy administrators shall be deposited as offsetting receipts

to the fund established under section 1931 of title 28, and shall

remain available until expended to reimburse any appropriation for the

amount paid out of such appropriation for expenses of the operation

and maintenance of the courts of the United States.'.

SEC. 222. SENSE OF CONGRESS.

It is the sense of Congress that States should develop curricula

relating to the subject of personal finance, designed for use in

elementary and secondary schools.

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

Section 507(a) of title 11, United States Code, is amended by

inserting after paragraph (9) the following:

`(10) Tenth, allowed claims for death or personal injuries

resulting from the operation of a motor vehicle or vessel if such

operation was unlawful because the debtor was intoxicated from

using alcohol, a drug, or another substance.'.

SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

(a) IN GENERAL- Section 522 of title 11, United States Code, is

amended--

(1) in subsection (b)--

(A) in paragraph (2)--

(i) in subparagraph (A), by striking `and' at the end;

(ii) in subparagraph (B), by striking the period at the

end and inserting `; and';

(iii) by adding at the end the following:

`(C) retirement funds to the extent that those funds are in a

fund or account that is exempt from taxation under section 401,

403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code

of 1986.'; and

(iv) by striking `(2)(A) any property' and inserting:

`(3) Property listed in this paragraph is--

`(A) any property';

(B) by striking paragraph (1) and inserting:

`(2) Property listed in this paragraph is property that is specified

under subsection (d), unless the State law that is applicable to the

debtor under paragraph (3)(A) specifically does not so authorize.';

(C) by striking `(b) Notwithstanding' and inserting `(b)(1)

Notwithstanding';

(D) by striking `paragraph (2)' each place it appears and

inserting `paragraph (3)';

(E) by striking `paragraph (1)' each place it appears and

inserting `paragraph (2)';

(F) by striking `Such property is--'; and

(G) by adding at the end the following:

`(4) For purposes of paragraph (3)(C) and subsection (d)(12), the

following shall apply:

`(A) If the retirement funds are in a retirement fund that has

received a favorable determination under section 7805 of the

Internal Revenue Code of 1986, and that determination is in

effect as of the date of the commencement of the case under

section 301, 302, or 303 of this title, those funds shall be

presumed to be exempt from the estate.

`(B) If the retirement funds are in a retirement fund that has

not received a favorable determination under such section 7805,

those funds are exempt from the estate if the debtor demonstrates

that--

`(i) no prior determination to the contrary has been made by

a court or the Internal Revenue Service; and

`(ii)(I) the retirement fund is in substantial compliance

with the applicable requirements of the Internal Revenue

Code of 1986; or

`(II) the retirement fund fails to be in substantial

compliance with the applicable requirements of the Internal

Revenue Code of 1986 and the debtor is not materially

responsible for that failure.

`(C) A direct transfer of retirement funds from 1 fund or account

that is exempt from taxation under section 401, 403, 408, 408A,

414, 457, or 501(a) of the Internal Revenue Code of 1986, under

section 401(a)(31) of the Internal Revenue Code of 1986, or

otherwise, shall not cease to qualify for exemption under

paragraph (3)(C) or subsection (d)(12) by reason of that direct

transfer.

`(D)(i) Any distribution that qualifies as an eligible rollover

distribution within the meaning of section 402(c) of the Internal

Revenue Code of 1986 or that is described in clause (ii) shall

not cease to

qualify for exemption under paragraph (3)(C) or subsection (d)(12) by

reason of that distribution.

`(ii) A distribution described in this clause is an amount that--

`(I) has been distributed from a fund or account that is

exempt from taxation under section 401, 403, 408, 408A, 414,

457, or 501(a) of the Internal Revenue Code of 1986; and

`(II) to the extent allowed by law, is deposited in such a

fund or account not later than 60 days after the

distribution of that amount.'; and

(2) in subsection (d)--

(A) in the matter preceding paragraph (1), by striking

`subsection (b)(1)' and inserting `subsection (b)(2)'; and

(B) by adding at the end the following:

`(12) Retirement funds to the extent that those funds are in a fund or

account that is exempt from taxation under section 401, 403, 408,

408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986.'.

(b) AUTOMATIC STAY- Section 362(b) of title 11, United States Code, is

amended--

(1) in paragraph (17), by striking `or' at the end;

(2) in paragraph (18), by striking the period and inserting a

semicolon;

(3) by inserting after paragraph (18) the following:

`(19) under subsection (a), of withholding of income from a

debtor's wages and collection of amounts withheld, under the

debtor's agreement authorizing that withholding and collection

for the benefit of a pension, profit-sharing, stock bonus, or

other plan established under section 401, 403, 408, 408A, 414,

457, or 501(a) of the Internal Revenue Code of 1986, that is

sponsored by the employer of the debtor, or an affiliate,

successor, or predecessor of such employer--

`(A) to the extent that the amounts withheld and collected

are used solely for payments relating to a loan from a plan

that satisfies the requirements of section 408(b)(1) of the

Employee Retirement Income Security Act of 1974 or is

subject to section 72(p) of the Internal Revenue Code of

1986; or

`(B) in the case of a loan from a thrift savings plan

described in subchapter III of chapter 84 of title 5, that

satisfies the requirements of section 8433(g) of such

title;'; and

(4) by adding at the end of the flush material at the end of the

subsection, the following: `Nothing in paragraph (19) may be

construed to provide that any loan made under a governmental plan

under section 414(d), or a contract or account under section

403(b) of the Internal Revenue Code of 1986 constitutes a claim

or a debt under this title.'.

(c) EXCEPTIONS TO DISCHARGE- Section 523(a) of title 11, United States

Code, as amended by this Act, is amended by adding at the end the

following:

`(18) owed to a pension, profit-sharing, stock bonus, or other

plan established under section 401, 403, 408, 408A, 414, 457, or

501(c) of the Internal Revenue Code of 1986, under--

`(A) a loan permitted under section 408(b)(1) of the

Employee Retirement Income Security Act of 1974, or subject

to section 72(p) of the Internal Revenue Code of 1986; or

`(B) a loan from the thrift savings plan described in

subchapter III of chapter 84 of title 5, that satisfies the

requirements of section 8433(g) of such title.

Nothing in paragraph (18) may be construed to provide that any

loan made under a governmental plan under section 414(d), or a

contract or account under

section 403(b), of the Internal Revenue Code of 1986 constitutes a claim or

a debt under this title.'.

(d) PLAN CONTENTS- Section 1322 of title 11, United States Code, is

amended by adding at the end the following:

`(f) A plan may not materially alter the terms of a loan described in

section 362(b)(19) and any amounts required to repay such loan shall

not constitute `disposable income' under section 1325.'.

(e) ASSET LIMITATION- Section 522 of title 11, United States Code, is

amended by adding at the end the following:

`(n) For assets in individual retirement accounts described in section

408 or 408A of the Internal Revenue Code of 1986, other than a

simplified employee pension under section 408(k) of that Code or a

simple retirement account under section 408(p) of that Code, the

aggregate value of such assets exempted under this section, without

regard to amounts attributable to rollover contributions under section

402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the Internal

Revenue Code of 1986, and earnings thereon, shall not exceed

$1,000,000 (which amount shall be adjusted as provided in section 104

of this title) in a case filed by an individual debtor, except that

such amount may be increased if the interests of justice so require.'.

SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.

(a) EXCLUSIONS- Section 541 of title 11, United States Code, is

amended--

(1) in subsection (b)--

(A) in paragraph (4), by striking `or' at the end;

(B) by redesignating paragraph (5) as paragraph (10); and

(C) by inserting after paragraph (4) the following:

`(5) funds placed in an education individual retirement account

(as defined in section 530(b)(1) of the Internal Revenue Code of

1986) not later than 365 days before the date of filing of the

petition, but--

`(A) only if the designated beneficiary of such account was

a son, daughter, stepson, stepdaughter, grandchild, or

step-grandchild of the debtor for the taxable year for which

funds were placed in such account;

`(B) only to the extent that such funds--

`(i) are not pledged or promised to any entity in

connection with any extension of credit; and

`(ii) are not excess contributions (as described in

section 4973(e) of the Internal Revenue Code of 1986);

and

`(C) in the case of funds placed in all such accounts having

the same designated beneficiary not earlier than 720 days

nor later than 365 days before such date, only so much of

such funds as does not exceed $5,000;

`(6) funds used to purchase a tuition credit or certificate or

contributed to an account in accordance with section 529(b)(1)(A)

of the Internal Revenue Code of 1986 under a qualified State

tuition program (as defined in section 529(b)(1) of such Code)

not later than 365 days before the date of filing of the

petition, but--

`(A) only if the designated beneficiary of the amounts paid

or contributed to such tuition program was a son, daughter,

stepson, stepdaughter, grandchild, or step-grandchild of the

debtor for the taxable year for which funds were paid or

contributed;

`(B) with respect to the aggregate amount paid or

contributed to such program having the same designated

beneficiary, only so much of such amount as does not exceed

the total contributions permitted under section 529(b)(7) of

such Code with respect to such beneficiary, as adjusted

beginning on the date of the filing of the petition by the

annual increase or decrease (rounded to the nearest tenth of

1 percent) in the education expenditure category of the

Consumer Price Index prepared by the Department of Labor;

and

`(C) in the case of funds paid or contributed to such

program having the same designated beneficiary not earlier

than 720 days nor later than 365 days before such date, only

so much of such funds as does not exceed $5,000;'; and

(2) by adding at the end the following:

`(e) In determining whether any of the relationships specified in

paragraph (5)(A) or (6)(A) of subsection (b) exists, a legally adopted

child of an individual (and a child who is a member of an individual's

household, if placed with such individual by an authorized placement

agency for legal adoption by such individual), or a foster child of an

individual (if such child has as the child's principal place of abode

the home of the debtor and is a member of the debtor's household)

shall be treated as a child of such individual by blood.'.

(b) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, as

amended by this Act, is amended by adding at the end the following:

`(c) In addition to meeting the requirements under subsection (a), a

debtor shall file with the court a record of any interest that a

debtor has in an education individual retirement account (as defined

in section 530(b)(1) of the Internal Revenue Code of 1986) or under a

qualified State tuition program (as defined in section 529(b)(1) of

such Code).'.

SEC. 226. DEFINITIONS.

(a) DEFINITIONS- Section 101 of title 11, United States Code, is

amended--

(1) by inserting after paragraph (2) the following:

`(3) `assisted person' means any person whose debts consist

primarily of consumer debts and whose non-exempt assets are less

than $150,000;';

(2) by inserting after paragraph (4) the following:

`(4A) `bankruptcy assistance' means any goods or services sold or

otherwise provided to an assisted person with the express or

implied purpose of providing information, advice, counsel,

document preparation, or filing, or attendance at a creditors'

meeting or appearing in a proceeding on behalf of another or

providing legal representation with respect to a case or

proceeding under this title;'; and

(3) by inserting after paragraph (12) the following:

`(12A) `debt relief agency' means any person who provides any

bankruptcy assistance to an assisted person in return for the

payment of money or other valuable consideration, or who is a

bankruptcy petition preparer under section 110, but does not

include--

`(A) any person that is an officer, director, employee or

agent of that person;

`(B) a nonprofit organization which is exempt from taxation

under section 501(c)(3) of the Internal Revenue Code of

1986;

`(C) a creditor of the person, to the extent that the

creditor is assisting the person to restructure any debt

owed by the person to the creditor;

`(D) a depository institution (as defined in section 3 of

the Federal Deposit Insurance Act) or any Federal credit

union or State credit union (as those terms are defined in

section 101 of the Federal Credit Union Act), or any

affiliate or subsidiary of such a depository institution or

credit union; or

`(E) an author, publisher, distributor, or seller of works

subject to copyright protection under title 17, when acting

in such capacity.'.

(b) CONFORMING AMENDMENT- Section 104(b)(1) of title 11, United States

Code, is amended by inserting `101(3),' after `sections'.

SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.

(a) ENFORCEMENT- Subchapter II of chapter 5 of title 11, United States

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

`Sec. 526. Restrictions on debt relief agencies

`(a) A debt relief agency shall not--

`(1) fail to perform any service that such agency informed an

assisted person or prospective assisted person it would provide

in connection with a case or proceeding under this title;

`(2) make any statement, or counsel or advise any assisted person

or prospective assisted person to

make a statement in a document filed in a case or proceeding under this

title, that is untrue and misleading, or that upon the exercise of

reasonable care, should have been known by such agency to be untrue or

misleading;

`(3) misrepresent to any assisted person or prospective assisted

person, directly or indirectly, affirmatively or by material

omission, with respect to--

`(i) the services that such agency will provide to such

person; or

`(ii) the benefits and risks that may result if such person

becomes a debtor in a case under this title; or

`(4) advise an assisted person or prospective assisted person to

incur more debt in contemplation of such person filing a case

under this title or to pay an attorney or bankruptcy petition

preparer fee or charge for services performed as part of

preparing for or representing a debtor in a case under this

title.

`(b) Any waiver by any assisted person of any protection or right

provided under this section shall not be enforceable against the

debtor by any Federal or State court or any other person, but may be

enforced against a debt relief agency.

`(c)(1) Any contract for bankruptcy assistance between a debt relief

agency and an assisted person that does not comply with the material

requirements of this section, section 527, or section 528 shall be

void and may not be enforced by any Federal or State court or by any

other person, other than such assisted person.

`(2) Any debt relief agency shall be liable to an assisted person in

the amount of any fees or charges in connection with providing

bankruptcy assistance to such person that such debt relief agency has

received, for actual damages, and for reasonable attorneys' fees and

costs if such agency is found, after notice and hearing, to have--

`(A) intentionally or negligently failed to comply with any

provision of this section, section 527, or section 528 with

respect to a case or proceeding under this title for such

assisted person;

`(B) provided bankruptcy assistance to an assisted person in a

case or proceeding under this title that is dismissed or

converted to a case under another chapter of this title because

of such agency's intentional or negligent failure to file any

required document including those specified in section 521; or

`(C) intentionally or negligently disregarded the material

requirements of this title or the Federal Rules of Bankruptcy

Procedure applicable to such agency.

`(3) In addition to such other remedies as are provided under State

law, whenever the chief law enforcement officer of a State, or an

official or agency designated by a State, has reason to believe that

any person has violated or is violating this section, the State--

`(A) may bring an action to enjoin such violation;

`(B) may bring an action on behalf of its residents to recover

the actual damages of assisted persons arising from such

violation, including any liability under paragraph (2); and

`(C) in the case of any successful action under subparagraph (A)

or (B), shall be awarded the costs of the action and reasonable

attorney fees as determined by the court.

`(4) The United States District Court for any district located in the

State shall have concurrent jurisdiction of any action under

subparagraph (A) or (B) of paragraph (3).

`(5) Notwithstanding any other provision of Federal law and in

addition to any other remedy provided under

Federal or State law, if the court, on its own motion or on motion of the

United States trustee or the debtor, finds that a person intentionally

violated this section, or engaged in a clear and consistent pattern or

practice of violating this section, the court may--

`(A) enjoin the violation of such section; or

`(B) impose an appropriate civil penalty against such person.'.

`(d) No provision of this section, section 527, or section 528 shall--

`(1) annul, alter, affect, or exempt any person subject to such

sections from complying with any law of any State except to the

extent that such law is inconsistent with those sections, and

then only to the extent of the inconsistency; or

`(2) be deemed to limit or curtail the authority or ability--

`(A) of a State or subdivision or instrumentality thereof,

to determine and enforce qualifications for the practice of

law under the laws of that State; or

`(B) of a Federal court to determine and enforce the

qualifications for the practice of law before that court.'.

(b) CONFORMING AMENDMENT- The table of sections for chapter 5 of title

11, United States Code, is amended by inserting before the item

relating to section 527, the following:

`526. Debt relief enforcement.'.

SEC. 228. DISCLOSURES.

(a) DISCLOSURES- Subchapter II of chapter 5 of title 11, United States

Code, as amended by this Act, is amended by adding at the end the

following:

`Sec. 527. Disclosures

`(a) A debt relief agency providing bankruptcy assistance to an

assisted person shall provide--

`(1) the written notice required under section 342(b)(1) of this

title; and

`(2) to the extent not covered in the written notice described in

paragraph (1), and not later than 3 business days after the first

date on which a debt relief agency first offers to provide any

bankruptcy assistance services to an assisted person, a clear and

conspicuous written notice advising assisted persons that--

`(A) all information that the assisted person is required to

provide with a petition and thereafter during a case under

this title is required to be complete, accurate, and

truthful;

`(B) all assets and all liabilities are required to be

completely and accurately disclosed in the documents filed

to commence the case, and the replacement value of each

asset as defined in section 506 of this title must be stated

in those documents where requested after reasonable inquiry

to establish such value;

`(C) current monthly income, the amounts specified in

section 707(b)(2), and, in a case under chapter 13,

disposable income (determined in accordance with section

707(b)(2)), are required to be stated after reasonable

inquiry; and

`(D) information that an assisted person provides during

their case may be audited pursuant to this title, and that

failure to provide such information may result in dismissal

of the proceeding under this title or other sanction

including, in some instances, criminal sanctions.

`(b) A debt relief agency providing bankruptcy assistance to an

assisted person shall provide each assisted person at the same time as

the notices required under subsection (a)(1) with the following

statement, to the extent applicable, or one substantially similar. The

statement shall be clear and conspicuous and shall be in a single

document separate from other documents or notices provided to the

assisted person:

`IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN

ATTORNEY OR BANKRUPTCY PETITION PREPARER.

`If you decide to seek bankruptcy relief, you can represent yourself,

you can hire an attorney to represent you, or you can get help in some

localities from a bankruptcy petition preparer who is not an attorney.

THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE

YOU A WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY

PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to

see the contract before you hire anyone.

`The following information helps you understand what must be done in a

routine bankruptcy case to help you evaluate how much service you

need. Although bankruptcy can be complex, many cases are routine.

`Before filing a bankruptcy case, either you or your attorney should

analyze your eligibility for different forms of debt relief made

available by the Bankruptcy Code and which form of relief is most

likely to be beneficial for you. Be sure you understand the relief you

can obtain and its limitations.

To file a bankruptcy case, documents called a Petition, Schedules and

Statement of Financial Affairs, as well as in some cases a Statement of

Intention need to be prepared correctly and filed with the bankruptcy

court. You will have to pay a filing fee to the bankruptcy court. Once your

case starts, you will have to attend the required first meeting of

creditors where you may be questioned by a court official called a

`trustee' and by creditors.

`If you choose to file a chapter 7 case, you may be asked by a

creditor to reaffirm a debt. You may want help deciding whether to do

so and a creditor is not permitted to coerce you into reaffirming your

debts.

`If you choose to file a chapter 13 case in which you repay your

creditors what you can afford over 3 to 5 years, you may also want

help with preparing your chapter 13 plan and with the confirmation

hearing on your plan which will be before a bankruptcy judge.

`If you select another type of relief under the Bankruptcy Code other

than chapter 7 or chapter 13, you will want to find out what needs to

be done from someone familiar with that type of relief.

`Your bankruptcy case may also involve litigation. You are generally

permitted to represent yourself in litigation in bankruptcy court, but

only attorneys, not bankruptcy petition preparers, can give you legal

advice.'.

`(c) Except to the extent the debt relief agency provides the required

information itself after reasonably diligent inquiry of the assisted

person or others so as to obtain such information reasonably

accurately for inclusion on the petition, schedules or statement of

financial affairs, a debt relief agency providing bankruptcy

assistance to an assisted person, to the extent permitted by

nonbankruptcy law, shall provide each assisted person at the time

required for the notice required under subsection (a)(1) reasonably

sufficient information (which shall be provided in a clear and

conspicuous writing) to the assisted person on how to provide all the

information the assisted person is required to provide under this

title pursuant to section 521, including--

`(1) how to value assets at replacement value, determine current

monthly income, the amounts specified in section 707(b)(2)) and,

in a chapter 13 case, how to determine disposable income in

accordance with section 707(b)(2) and related calculations;

`(2) how to complete the list of creditors, including how to

determine what amount is owed and what address for the creditor

should be shown; and

`(3) how to determine what property is exempt and how to value

exempt property at replacement value as defined in section 506 of

this title.

`(d) A debt relief agency shall maintain a copy of the notices

required under subsection (a) of this section for 2 years after the

date on which the notice is given the assisted person.'.

(b) CONFORMING AMENDMENT- The table of sections for chapter 5 of title

11, United States Code, as amended by this Act, is amended by

inserting after the item relating to section 526 the following:

`527. Disclosures.'.

SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.

(a) ENFORCEMENT- Subchapter II of chapter 5 of title 11, United States

Code, as amended by this Act, is amended by adding at the end the

following:

`Sec. 528. Requirements for debt relief agencies

`(a) A debt relief agency shall--

`(1) not later than 5 business days after the first date such

agency provides any bankruptcy assistance services to an assisted

person, but prior to such assisted person's petition under this

title being filed, execute a written contract with such assisted

person that explains clearly and conspicuously--

`(A) the services such agency will provide to such assisted

person; and

`(B) the fees or charges for such services for such

services, and the terms of payment;

`(2) provide the assisted person with a copy of the fully

executed and completed contract;

`(3) clearly and conspicuously disclose in any advertisement of

bankruptcy assistance services or of the benefits of bankruptcy

directed to the general public (whether in general media,

seminars or specific mailings, telephonic or electronic messages,

or otherwise) that the services or benefits are with respect to

bankruptcy relief under this title; and

`(4) clearly and conspicuously using the following statement: `We

are a debt relief agency. We help people file for bankruptcy

relief under the Bankruptcy Code.' or a substantially similar

statement.

`(b)(1) An advertisement of bankruptcy assistance services or of the

benefits of bankruptcy directed to the general public includes--

`(A) descriptions of bankruptcy assistance in connection with a

chapter 13 plan whether or not chapter 13 is specifically

mentioned in such advertisement; and

`(B) statements such as `federally supervised repayment plan' or

`Federal debt restructuring help' or other similar statements

that could lead a reasonable consumer to believe that debt

counseling was being offered when in fact the services were

directed to providing bankruptcy assistance with a chapter 13

plan or other form of bankruptcy relief under this title.

`(2) An advertisement, directed to the general public, indicating that

the debt relief agency provides assistance with respect to credit

defaults, mortgage foreclosures, eviction proceedings, excessive debt,

debt collection pressure, or inability to pay any consumer debt

shall--

`(A) disclose clearly and conspicuously in such advertisement

that the assistance may involve bankruptcy relief under this

title; and

`(B) include the following statement: `We are a debt relief

agency. We help people file for bankruptcy relief under the

Bankruptcy Code,' or a substantially similar statement.'.

(b) CONFORMING AMENDMENT- The table of sections for chapter 5 of title

11, United States Code, as amended by this Act, is amended by

inserting after the item relating to section 527, the following:

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

SEC. 230. GAO STUDY.

(a) STUDY- Not later than 270 days after the date of enactment of this

Act, the Comptroller General of the

United States shall conduct a study of the feasibility, effectiveness, and

cost of requiring trustees appointed under title 11, United States Code, or

the bankruptcy courts, to provide to the Office of Child Support

Enforcement promptly after the commencement of cases by individual debtors

under such title, the names and social security numbers of such debtors for

the purposes of allowing such Office to determine whether such debtors have

outstanding obligations for child support (as determined on the basis of

information in the Federal Case Registry or other national database).

(b) REPORT- Not later than 300 days after the date of enactment of

this Act, the Comptroller General shall submit to the President pro

tempore of the Senate and the Speaker of the House of Representatives

a report containing the results of the study required by subsection

(a).

TITLE III--DISCOURAGING BANKRUPTCY ABUSE

SEC. 301. REINFORCEMENT OF THE FRESH START.

Section 523(a)(17) of title 11, United States Code, is amended--

(1) by striking `by a court' and inserting `on a prisoner by any

court',

(2) by striking `section 1915(b) or (f)' and inserting

`subsection (b) or (f)(2) of section 1915', and

(3) by inserting `(or a similar non-Federal law)' after `title

28' each place it appears.

SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.

Section 362(c) of title 11, United States Code, is amended--

(1) in paragraph (1), by striking `and' at the end;

(2) in paragraph (2), by striking the period at the end and

inserting a semicolon; and

(3) by adding at the end the following:

`(3) if a single or joint case is filed by or against an

individual debtor under chapter 7, 11, or 13, and if a single or

joint case of the debtor was pending within the preceding 1-year

period but was dismissed, other than a case refiled under a

chapter other than chapter 7 after dismissal under section

707(b)--

`(A) the stay under subsection (a) with respect to any

action taken with respect to a debt or property securing

such debt or with respect to any lease shall terminate with

respect to the debtor on the 30th day after the filing of

the later case;

`(B) upon motion by a party in interest for continuation of

the automatic stay and upon notice and a hearing, the court

may extend the stay in particular cases as to any

or all creditors (subject to such conditions or limitations as the court

may then impose) after notice and a hearing completed before the expiration

of the 30-day period only if the party in interest demonstrates that the

filing of the later case is in good faith as to the creditors to be stayed;

and

`(C) for purposes of subparagraph (B), a case is

presumptively filed not in good faith (but such presumption

may be rebutted by clear and convincing evidence to the

contrary)--

`(i) as to all creditors, if--

`(I) more than 1 previous case under any of

chapter 7, 11, or 13 in which the individual was a

debtor was pending within the preceding 1-year

period;

`(II) a previous case under any of chapter 7, 11,

or 13 in which the individual was a debtor was

dismissed

within such 1-year period, after the debtor failed to--

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

title or the court without substantial excuse (but mere inadvertence or

negligence shall not be a substantial excuse unless the dismissal was

caused by the negligence of the debtor's attorney);

`(bb) provide adequate protection as ordered by the court; or

`(cc) perform the terms of a plan confirmed by the court; or

`(III) there has not been a substantial change in

the financial or personal affairs of the debtor

since the dismissal of the next most previous case

under chapter 7, 11, or 13 or any other reason to

conclude that the later case will be concluded--

`(aa) if a case under chapter 7, with a discharge; or

`(bb) if a case under chapter 11 or 13, with a confirmed plan which will be

fully performed; and

`(ii) as to any creditor that commenced an action under

subsection (d) in a previous case in which the

individual was a debtor if, as of the date of dismissal

of such case, that action was still pending or had been

resolved by terminating, conditioning, or limiting the

stay as to actions of such creditor; and

`(4)(A)(i) if a single or joint case is filed by or against an

individual debtor under this title, and if 2 or more single or

joint cases of the debtor were pending within the previous year

but were dismissed, other than a case refiled under section

707(b), the stay under subsection (a) shall not go into effect

upon the filing of the later case; and

`(ii) on request of a party in interest, the court shall promptly

enter an order confirming that no stay is in effect;

`(B) if, within 30 days after the filing of the later case, a

party in interest requests the court may order the stay to take

effect in the case as to any or all creditors (subject to such

conditions or limitations as the court may impose), after notice

and hearing, only if the party in interest demonstrates that the

filing of the later case is in good faith as to the creditors to

be stayed;

`(C) a stay imposed under subparagraph (B) shall be effective on

the date of entry of the order allowing the stay to go into

effect; and

`(D) for purposes of subparagraph (B), a case is presumptively

not filed in good faith (but such presumption may be rebutted by

clear and convincing evidence to the contrary)--

`(i) as to all creditors if--

`(I) 2 or more previous cases under this title in which

the individual was a debtor were pending within the

1-year period;

`(II) a previous case under this title in which the

individual was a debtor was dismissed within the time

period stated in this paragraph after the debtor failed

to file or amend the petition or other documents as

required by this title or the court without substantial

excuse (but mere inadvertence or negligence shall not

be substantial excuse unless the dismissal was caused

by the negligence of the debtor's attorney), failed to

pay adequate protection as ordered by the court, or

failed to perform the terms of a plan confirmed by the

court; or

`(III) there has not been a substantial change in the

financial or personal affairs of the debtor since the

dismissal of the next most previous case under this

title, or any other reason to conclude that the later

case will not be concluded, if a case under chapter 7,

with a discharge, and if a case under chapter 11 or 13,

with a confirmed plan that will be fully performed; or

`(ii) as to any creditor that commenced an action under

subsection (d) in a previous case in which the individual

was a debtor if, as of the date of dismissal of such case,

such action was still pending or had been resolved by

terminating, conditioning, or limiting the stay as to action

of such creditor.'.

SEC. 303. CURBING ABUSIVE FILINGS.

(a) IN GENERAL- Section 362(d) of title 11, United States Code, is

amended--

(1) in paragraph (2), by striking `or' at the end;

(2) in paragraph (3), by striking the period at the end and

inserting `; or'; and

(3) by adding at the end the following:

`(4) with respect to a stay of an act against real property under

subsection (a), by a creditor whose claim is secured by an

interest in such real estate, if the court finds that the filing

of the bankruptcy petition was part of a scheme to delay, hinder,

and defraud creditors that involved either--

`(A) transfer of all or part ownership of, or other interest

in, the real property without the consent of the secured

creditor or court approval; or

`(B) multiple bankruptcy filings affecting the real

property.

If recorded in compliance with applicable State laws governing notices

of interests or liens in real property, an order entered under this

subsection shall be binding in any other case under this title

purporting to affect the real property filed not later than 2 years

after the date of entry of such order by the court, except that a

debtor in a subsequent case may move for relief from such order based

upon changed circumstances or for good cause shown, after notice and a

hearing. Any Federal, State, or local governmental unit that accepts

notices of interests or liens in real property shall accept any

certified copy of an order described in this subsection for indexing

and recording.'.

(b) AUTOMATIC STAY- Section 362(b) of title 11, United States Code, is

amended by inserting after paragraph (19), as added by this Act, the

following:

`(20) under subsection (a), of any act to enforce any lien

against or security interest in real property following the entry

of an order under section 362(d)(4) as to that property in any

prior bankruptcy case for a period of 2 years after entry of such

an order, except that the debtor, in a subsequent case, may move

the court for relief from such order based upon changed

circumstances or for other good cause shown, after notice and a

hearing;

`(21) under subsection (a), of any act to enforce any lien

against or security interest in real property--

`(A) if the debtor is ineligible under section 109(g) to be

a debtor in a bankruptcy case; or

`(B) if the bankruptcy case was filed in violation of a

bankruptcy court order in a prior bankruptcy case

prohibiting the debtor from being a debtor in another

bankruptcy case;'.

SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

Title 11, United States Code, is amended--

(1) in section 521(a) (as so designated by this Act)--

(A) in paragraph (4), by striking `, and' at the end and

inserting a semicolon;

(B) in paragraph (5), by striking the period at the end and

inserting `; and'; and

(C) by adding at the end the following:

`(6) in an individual case under chapter 7 of this title, not

retain possession of personal property as to which a creditor has

an allowed claim for the purchase price secured in whole or in

part by an interest in that personal property unless, in the case

of an individual debtor, the debtor, not later than 45 days after

the first meeting of creditors under section 341(a), either--

`(A) enters into an agreement with the creditor pursuant to

section 524(c) of this title

with respect to the claim secured by such property; or

`(B) redeems such property from the security interest

pursuant to section 722 of this title.

If the debtor fails to so act within the 45-day period referred to in

paragraph (6), the stay under section 362(a) of this title is

terminated with respect to the personal property of the estate or of

the debtor which is affected, such property shall no longer be

property of the estate, and the creditor may take whatever action as

to such property as is permitted by applicable nonbankruptcy law,

unless the court determines on the motion of the trustee brought

before the expiration of such 45-day period, and after notice and a

hearing, that such property is of consequential value or benefit to

the estate, orders appropriate adequate protection of the creditor's

interest, and orders the debtor to deliver any collateral in the

debtor's possession to the trustee.'; and

(2) in section 722, by inserting `in full at the time of

redemption' before the period at the end.

SEC. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES NOT COMPLETE

INTENDED SURRENDER OF CONSUMER DEBT COLLATERAL.

Title 11, United States Code, is amended--

(1) in section 362--

(A) in subsection (c), by striking `(e), and (f)' inserting

`(e), (f), and (h)';

(B) by redesignating subsection (h) as subsection (k); and

(C) by inserting after subsection (g) the following:

`(h)(1) In an individual case under chapter 7, 11, or 13, the stay

provided by subsection (a) is terminated with respect to personal

property of the estate or of the debtor securing in whole or in part a

claim, or subject to an unexpired lease, and such personal property

shall no longer be property of the estate if the debtor fails within

the applicable time set by section 521(a)(2) of this title--

`(A) to file timely any statement of intention required under

section 521(a)(2) of this title with respect to that property or

to indicate in that statement that the debtor will either

surrender the property or retain it and, if retaining it, either

redeem the property pursuant to section 722 of this title,

reaffirm the debt it secures pursuant to section 524(c) of this

title, or assume the unexpired lease pursuant to section 365(p)

of this title if the trustee does not do so, as applicable; and

`(B) to take timely the action specified in that statement of

intention, as it may be amended before expiration of the period

for taking action, unless the statement of intention specifies

reaffirmation and the creditor refuses to reaffirm on the

original contract terms.

`(2) Paragraph (1) does not apply if the court determines, on the

motion of the trustee filed before the expiration of the applicable

time set by section 521(a)(2), after notice and a hearing, that such

property is of consequential value or benefit to the estate, and

orders appropriate adequate protection of the creditor's interest, and

orders the debtor to deliver any collateral in the debtor's possession

to the trustee. If the court does not so determine, the stay provided

by subsection (a) shall terminate upon the conclusion of the

proceeding on the motion.'; and

(2) in section 521--

(A) in subsection (a)(2), as so designated by this Act, by

striking `consumer';

(B) in subsection (a)(2)(B), as so designated by this Act--

(i) by striking `forty-five days after the filing of a

notice of intent under this section' and inserting `30

days after the first date set for the meeting of

creditors under section 341(a) of this title'; and

(ii) by striking `forty-five day' and inserting

`30-day';

(C) in subsection (a)(2)(C), as so designated by this Act,

by inserting `, except as provided in section 362(h) of this

title' before the semicolon; and

(D) by adding at the end the following:

`(d) If the debtor fails timely to take the action specified in

subsection (a)(6) of this section, or in paragraphs (1) and (2) of

section 362(h) of this title, with respect to property which a lessor

or bailor owns and has leased, rented, or bailed to the debtor or as

to which a creditor holds a security interest not otherwise voidable

under section 522(f), 544, 545, 547, 548, or 549 of this title,

nothing in this title shall prevent or limit the operation of a

provision in the underlying lease or agreement which has the effect of

placing the debtor in default under such lease or agreement by reason

of the occurrence, pendency, or existence of a proceeding under this

title or the insolvency of the debtor. Nothing in this subsection

shall be deemed

to justify limiting such a provision in any other circumstance.'.

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

(a) IN GENERAL- Section 1325(a)(5)(B)(i) of title 11, United States

Code, is amended to read as follows:

`(i) the plan provides that--

`(I) the holder of such claim retain the lien securing

such claim until the earlier of--

`(aa) the payment of the underlying debt

determined under nonbankruptcy law; or

`(bb) discharge under section 1328; and

`(II) if the case under this chapter is dismissed or

converted without completion of the plan, such lien

shall also be retained by such holder to the extent

recognized by applicable nonbankruptcy law; and'.

(b) RESTORING THE FOUNDATION FOR SECURED CREDIT- Section 1325(a) of

title 11, United States Code, is amended by adding at the end the

following flush sentence:

`For purposes of paragraph (5), section 506 shall not apply to a claim

described in that paragraph if the creditor has a purchase money

security interest securing the debt that is the subject of the claim,

the debt was incurred within the 5-year period preceding the filing of

the petition, and the collateral for that debt consists of a motor

vehicle (as defined in section 30102 of title 49) acquired for the

personal use of the debtor, or if collateral for that debt consists of

any other thing of value, if the debt was incurred during the 1-year

period preceding that filing.'.

(c) DEFINITIONS- Section 101 of title 11, United States Code, as

amended by this Act, is amended--

(1) by inserting after paragraph (13) the following:

`(13A) `debtor's principal residence'--

`(A) means a residential structure, including incidental

property, without regard to whether that structure is

attached to real property; and

`(B) includes an individual condominium or cooperative unit,

a mobile or manufactured home, or trailer;'; and

(2) by inserting after paragraph (27), the following:

`(27A) `incidental property' means, with respect to a debtor's

principal residence--

`(A) property commonly conveyed with a principal residence

in the area where the real estate is located;

`(B) all easements, rights, appurtenances, fixtures, rents,

royalties, mineral rights, oil or gas rights or profits,

water rights, escrow funds, or insurance proceeds; and

`(C) all replacements or additions;'.

SEC. 307. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.

Section 522(b)(3)(A) of title 11, United States Code, as so designated

by this Act, is amended--

(1) by striking `180 days' and inserting `730 days'; and

(2) by striking `, or for a longer portion of such 180-day period

than in any other place' and inserting `or if the debtor's

domicile has not been located at a single State for such 730-day

period, the place in which the debtor's domicile was located for

180 days immediately preceding the 730-day period or for a longer

portion of such 180-day period than in any other place'.

SEC. 308. RESIDENCY REQUIREMENT FOR HOMESTEAD EXEMPTION.

Section 522 of title 11, United States Code, is amended--

(1) in subsection (b)(3)(A), as so designated by this Act, by

inserting `subject to subsections (o) and (p),' before `any

property'; and

(2) by adding at the end the following:

`(o) For purposes of subsection (b)(3)(A), and notwithstanding

subsection (a), the value of an interest in--

`(1) real or personal property that the debtor or a dependent of

the debtor uses as a residence;

`(2) a cooperative that owns property that the debtor or a

dependent of the debtor uses as a residence; or

`(3) a burial plot for the debtor or a dependent of the debtor;

shall be reduced to the extent that such value is attributable to any

portion of any property that the debtor disposed of in the 7-year

period ending on the date of the filing of the petition with the

intent to hinder, delay, or defraud a creditor and that the debtor

could not exempt, or that portion that the debtor could not exempt,

under subsection (b), if on such date the debtor had held the property

so disposed of.'.

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

(a) STOPPING ABUSIVE CONVERSIONS FROM CHAPTER 13- Section 348(f)(1) of

title 11, United States Code, is amended--

(1) in subparagraph (A), by striking `and' at the end;

(2) in subparagraph (B)--

(A) by striking `in the converted case, with allowed secured

claims' and inserting `only in a case converted to a case

under chapter 11 or 12, but not in a case converted to a

case under chapter 7, with allowed secured claims in cases

under chapters 11 and 12'; and

(B) by striking the period and inserting `; and'; and

(3) by adding at the end the following:

`(C) with respect to cases converted from chapter 13--

`(i) the claim of any creditor holding security as of the

date of the petition shall continue to be secured by that

security unless the full amount of such claim determined

under applicable nonbankruptcy law has been paid in full as

of the date of conversion, notwithstanding any valuation or

determination of the amount

of an allowed secured claim made for the purposes of the chapter 13

proceeding; and

`(ii) unless a prebankruptcy default has been fully cured

under the plan at the time of conversion, in any proceeding

under this title or otherwise, the default shall have the

effect given under applicable nonbankruptcy law.'.

(b) GIVING DEBTORS THE ABILITY TO KEEP LEASED PERSONAL PROPERTY BY

ASSUMPTION- Section 365 of title 11, United States Code, is amended by

adding at the end the following:

`(p)(1) If a lease of personal property is rejected or not timely

assumed by the trustee under subsection (d), the leased property is no

longer property of the estate and the stay under section 362(a) is

automatically terminated.

`(2)(A) In the case of an individual under chapter 7, the debtor may

notify the creditor in writing that the debtor desires to assume the

lease. Upon being so notified, the creditor may, at its option, notify

the debtor that it is willing to have the lease assumed by the debtor

and may condition such assumption on cure of any outstanding default

on terms set by the contract.

`(B) If, not later than 30 days after notice is provided under

subparagraph (A), the debtor notifies the lessor in writing that the

lease is assumed, the liability under

the lease will be assumed by the debtor and not by the estate.

`(C) The stay under section 362 and the injunction under section

524(a)(2) shall not be violated by notification of the debtor and

negotiation of cure under this subsection.

`(3) In a case under chapter 11 in which the debtor is an individual

and in a case under chapter 13, if the debtor is the lessee with

respect to personal property and the lease is not assumed in the plan

confirmed by the court, the lease is deemed rejected as of the

conclusion of the hearing on confirmation. If the lease is rejected,

the stay under section 362 and any stay under section 1301 is

automatically terminated with respect to the property subject to the

lease.'.

(c) ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY SECURED

CREDITORS-

(1) CONFIRMATION OF PLAN- Section 1325(a)(5)(B) of title 11,

United States Code, is amended--

(A) in clause (i), by striking `and' at the end;

(B) in clause (ii), by striking `or' at the end and

inserting `and'; and

(C) by adding at the end the following:

`(iii) if--

`(I) property to be distributed pursuant to this

subsection is in the form of periodic payments,

such payments shall be in equal monthly amounts;

and

`(II) the holder of the claim is secured by

personal property, the amount of such payments

shall not be less than an amount sufficient to

provide to the holder of such claim adequate

protection during the period of the plan; or'.

(2) PAYMENTS- Section 1326(a) of title 11, United States Code, is

amended to read as follows:

`(a)(1) Unless the court orders otherwise, the debtor shall commence

making payments not later than 30 days after the date of the filing of

the plan or the order for relief, whichever is earlier, in the

amount--

`(A) proposed by the plan to the trustee;

`(B) scheduled in a lease of personal property directly to the

lessor for that portion of the obligation that becomes due after

the order for relief, reducing the payments under subparagraph

(A) by the amount so paid and providing the trustee with evidence

of such payment, including the amount and date of payment; and

`(C) that provides adequate protection directly to a creditor

holding an allowed claim secured by personal property to the

extent the claim is attributable to the purchase of such property

by the debtor for that portion of the obligation that becomes due

after the order for relief, reducing the payments under

subparagraph (A) by the amount so paid and providing the trustee

with evidence of such payment, including the amount and date of

payment.

`(2) A payment made under paragraph (1)(A) shall be retained by the

trustee until confirmation or denial of confirmation. If a plan is

confirmed, the trustee shall distribute any such payment in accordance

with the plan as soon as is practicable. If a plan is not confirmed,

the trustee shall return any such payments not previously paid and not

yet due and owing to creditors pursuant to paragraph (3) to the

debtor, after deducting any unpaid claim allowed under section 503(b).

`(3) Subject to section 363, the court may, upon notice and a hearing,

modify, increase, or reduce the payments required under this

subsection pending confirmation of a plan.

`(4) Not later than 60 days after the date of filing of a case under

this chapter, a debtor retaining possession of personal property

subject to a lease or securing a claim attributable in whole or in

part to the purchase price of such property shall provide the lessor

or secured creditor reasonable evidence of the maintenance of any

required insurance coverage with respect to the use or ownership of

such property and continue to do so for so long as the debtor retains

possession of such property.'.

SEC. 310. LIMITATION ON LUXURY GOODS.

Section 523(a)(2)(C) of title 11, United States Code, is amended to

read as follows:

`(C)(i) for purposes of subparagraph (A)--

`(I) consumer debts owed to a single creditor and

aggregating more than $250 for luxury goods or services

incurred by an individual debtor on or within 90 days before

the order for relief under this title are presumed to be

nondischargeable; and

`(II) cash advances aggregating more than $750 that are

extensions of consumer credit under an open end credit plan

obtained by an individual debtor on or within 70 days before

the order for relief under this title, are presumed to be

nondischargeable; and

`(ii) for purposes of this subparagraph--

`(I) the term `extension of credit under an open end credit

plan' means an extension of credit under an open end credit

plan, within the meaning of the Consumer Credit Protection

Act (15 U.S.C. 1601 et seq.);

`(II) the term `open end credit plan' has the meaning given

that term under section 103 of Consumer Credit Protection

Act (15 U.S.C. 1602); and

`(III) the term `luxury goods or services' does not include

goods or services reasonably necessary for the support or

maintenance of the debtor or a dependent of the debtor.'.

SEC. 311. AUTOMATIC STAY.

Section 362(b) of title 11, United States Code, is amended by

inserting after paragraph (21), as added by this Act, the following:

`(22) under subsection (a)(3), of the continuation of any

eviction, unlawful detainer action,

or similar proceeding by a lessor against a debtor involving residential

real property in which the debtor resides as a tenant under a rental

agreement;

`(23) under subsection (a)(3), of the commencement of any

eviction, unlawful detainer action, or similar proceeding by a

lessor against a debtor involving residential real property in

which the debtor resides as a tenant under a rental agreement

that has terminated under the lease agreement or applicable State

law;

`(24) under subsection (a)(3), of eviction actions based on

endangerment to property or person or the use of illegal drugs;

`(25) under subsection (a) of any transfer that is not avoidable

under section 544 and that is not avoidable under section 549;'.

SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.

Title 11, United States Code, is amended--

(1) in section 727(a)(8), by striking `six' and inserting `8';

and

(2) in section 1328, by inserting after subsection (e) the

following:

`(f) Notwithstanding subsections (a) and (b), the court shall not

grant a discharge of all debts provided for by the plan or disallowed

under section 502 if the debtor has received a discharge in any case

filed under this title within 5 years before the order for relief

under this chapter.'.

SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.

(a) DEFINITION- Section 522(f) of title 11, United States Code, is

amended by adding at the end the following:

`(4)(A) Subject to subparagraph (B), for purposes of paragraph (1)(B),

the term `household goods' means--

`(i) clothing;

`(ii) furniture;

`(iii) appliances;

`(iv) 1 radio;

`(v) 1 television;

`(vi) 1 VCR;

`(vii) linens;

`(viii) china;

`(ix) crockery;

`(x) kitchenware;

`(xi) educational materials and educational equipment primarily

for the use of minor dependent children of the debtor, but only 1

personal computer only if used primarily for the education or

entertainment of such minor children;

`(xii) medical equipment and supplies;

`(xiii) furniture exclusively for the use of minor children, or

elderly or disabled dependents of the debtor; and

`(xiv) personal effects (including the toys and hobby equipment

of minor dependent children and wedding rings) of the debtor and

the dependents of the debtor.

`(B) The term `household goods' does not include--

`(i) works of art (unless by or of the debtor or the dependents

of the debtor);

`(ii) electronic entertainment equipment (except 1 television, 1

radio, and 1 VCR);

`(iii) items acquired as antiques;

`(iv) jewelry (except wedding rings); and

`(v) a computer (except as otherwise provided for in this

section), motor vehicle (including a tractor or lawn tractor),

boat, or a motorized recreational device, conveyance, vehicle,

watercraft, or aircraft.'.

(b) STUDY- Not later than 2 years after the date of enactment of this

Act, the Director of the Executive Office for United States Trustees

shall submit a report to the Committee on the Judiciary of the Senate

and the Committee on the Judiciary of the House of Representatives

containing its findings regarding utilization of the definition of

household goods, as defined in section 522(f)(4) of title 11, United

States Code, as added by this section, with respect to the avoidance

of nonpossessory, nonpurchase money security interests in household

goods under section 522(f)(1)(B) of title 11, United States Code, and

the impact that section 522(f)(4) of that title, as added by this

section, has had on debtors and on the bankruptcy courts. Such report

may include recommendations for amendments to section 522(f)(4) of

title 11, United States Code, consistent with the Director's findings.

SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.

(a) IN GENERAL- Section 523(a) of title 11, United States Code, is

amended by inserting after paragraph (14) the following:

`(14A) incurred to pay a tax to a governmental unit, other than

the United States, that would be nondischargeable under paragraph

(1);'.

(b) DISCHARGE UNDER CHAPTER 13- Section 1328(a) of title 11, United

States Code, is amended by striking paragraphs (1) through (3) and

inserting the following:

`(1) provided for under section 1322(b)(5);

`(2) of the kind specified in paragraph (2), (3), (4), (5), (8),

or (9) of section 523(a);

`(3) for restitution, or a criminal fine, included in a sentence

on the debtor's conviction of a crime; or

`(4) for restitution, or damages, awarded in a civil action

against the debtor as a result of willful or malicious injury by

the debtor that caused personal injury to an individual or the

death of an individual.'.

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

(a) NOTICE- Section 342 of title 11, United States Code, as amended by

this Act, is amended--

(1) in subsection (c)--

(A) by inserting `(1)' after `(c)';

(B) by striking `, but the failure of such notice to contain

such information shall not invalidate the legal effect of

such notice'; and

(C) by adding at the end the following:

`(2) If, within the 90 days prior to the date of the filing of a

petition in a voluntary case, the creditor supplied the debtor in

at least 2 communications sent to the debtor with the current

account number of the debtor and the address at which the

creditor wishes to receive correspondence, then the debtor shall

send any notice required under this title to the address provided

by the creditor and such notice shall include the account number.

In the event the creditor would be in violation of applicable

nonbankruptcy law by sending any such communication within such

90-day period and if the creditor supplied the debtor in the last

2 communications with the current account number of the debtor

and the address at which the creditor wishes to receive

correspondence, then the debtor shall send any notice required

under this title to the address provided by the creditor and such

notice shall include the account number.'; and

(2) by adding at the end the following:

`(e) At any time, a creditor, in a case of an individual debtor under

chapter 7 or 13, may file with the court and serve on the debtor a

notice of the address to be used to notify the creditor in that case.

Five days after receipt of such notice, if the court or the debtor is

required to give the creditor notice, such notice shall be given at

that address.

`(f) An entity may file with the court a notice stating its address

for notice in cases under chapters 7 and 13. After 30 days following

the filing of such notice, any notice in any case filed under chapter

7 or 13 given by the court shall be to that address unless specific

notice is given under subsection (e) with respect to a particular

case.

`(g)(1) Notice given to a creditor other than as provided in this

section shall not be effective notice until that

notice has been brought to the attention of the creditor. If the creditor

designates a person or department to be responsible for receiving notices

concerning bankruptcy cases and establishes reasonable procedures so that

bankruptcy notices received by the creditor are to be delivered to such

department or person, notice shall not be considered to have been brought

to the attention of the creditor until received by such person or

department.

`(2) No sanction under section 362(k) or any other sanction that a

court may impose on account of violations of the stay under section

362(a) or failure to comply with section 542 or 543 may be imposed on

any action of the creditor unless the action takes place after the

creditor has received notice of the commencement of the case effective

under this section.'.

(b) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, as

amended by this Act, is amended--

(1) in subsection (a), as so designated by this Act, by striking

paragraph (1) and inserting the following:

`(1) file--

`(A) a list of creditors; and

`(B) unless the court orders otherwise--

`(i) a schedule of assets and liabilities;

`(ii) a schedule of current income and current

expenditures;

`(iii) a statement of the debtor's financial affairs

and, if applicable, a certificate--

`(I) of an attorney whose name is on the petition

as the attorney for the debtor or any bankruptcy

petition preparer signing the petition under

section 110(b)(1) indicating that such attorney or

bankruptcy petition preparer delivered to the

debtor any notice required by section 342(b); or

`(II) if no attorney for the debtor is indicated

and no bankruptcy petition preparer signed the

petition, of the debtor that such notice was

obtained and read by the debtor;

`(iv) copies of all payment advices or other evidence

of payment, if any, received by the debtor from any

employer of the debtor in the period 60 days before the

filing of the petition;

`(v) a statement of the amount of monthly net income,

itemized to show how the amount is calculated; and

`(vi) a statement disclosing any reasonably anticipated

increase in income or expenditures over the 12-month

period following the date of filing;'; and

(2) by adding at the end the following:

`(e)(1) At any time, a creditor, in the case of an individual under

chapter 7 or 13, may file with the court notice that the creditor

requests the petition, schedules, and a statement of affairs filed by

the debtor in the case, and the court shall make those documents

available to the creditor who requests those documents.

`(2)(A) The debtor shall provide either a tax return or transcript at

the election of the debtor, for the latest taxable period prior to

filing for which a tax return has been or should have been filed, to

the trustee, not later than 7 days before the date first set for the

first meeting of creditors, or the case shall be dismissed, unless the

debtor demonstrates that the failure to file a return as required is

due to circumstances beyond the control of the debtor.

`(B) If a creditor has requested a tax return or transcript referred

to in subparagraph (A), the debtor shall

provide such tax return or transcript to the requesting creditor at the

time the debtor provides the tax return or transcript to the trustee, or

the case shall be dismissed, unless the debtor demonstrates that the debtor

is unable to provide such information due to circumstances beyond the

control of the debtor.

`(3)(A) At any time, a creditor in a case under chapter 13 may file

with the court notice that the creditor requests the plan filed by the

debtor in the case.

`(B) The court shall make such plan available to the creditor who

request such plan--

`(i) at a reasonable cost; and

`(ii) not later than 5 days after such request.

`(f) An individual debtor in a case under chapter 7, 11, or 13 shall

file with the court at the request of any party in interest--

`(1) at the time filed with the taxing authority, all tax returns

required under applicable law, including any schedules or

attachments, with respect to the period from the commencement of

the case until such time as the case is closed;

`(2) at the time filed with the taxing authority, all tax returns

required under applicable law, including any schedules or

attachments, that were not filed with the taxing authority when

the schedules under subsection (a)(1) were filed with respect to

the period that is 3 years before the order of relief;

`(3) any amendments to any of the tax returns, including

schedules or attachments, described in paragraph (1) or (2); and

`(4) in a case under chapter 13, a statement subject to the

penalties of perjury by the debtor of the debtor's income and

expenditures in the preceding tax year and monthly income, that

shows how the amounts are calculated--

`(A) beginning on the date that is the later of 90 days

after the close of the debtor's tax year or 1 year after the

order for relief, unless a plan has been confirmed; and

`(B) thereafter, on or before the date that is 45 days

before each anniversary of the confirmation of the plan

until the case is closed.

`(g)(1) A statement referred to in subsection (f)(4) shall disclose--

`(A) the amount and sources of income of the debtor;

`(B) the identity of any person responsible with the debtor for

the support of any dependent of the debtor; and

`(C) the identity of any person who contributed, and the amount

contributed, to the household in which the debtor resides.

`(2) The tax returns, amendments, and statement of income and

expenditures described in subsection (e)(2)(A) and subsection (f)

shall be available to the United States trustee, any bankruptcy

administrator, any trustee, and any party in interest for inspection

and copying, subject to the requirements of subsection (h).

`(h)(1) Not later than 180 days after the date of enactment of the

Bankruptcy Reform Act of 2001, the Director of the Administrative

Office of the United States Courts shall establish procedures for

safeguarding the confidentiality of any tax information required to be

provided under this section.

`(2) The procedures under paragraph (1) shall include restrictions on

creditor access to tax information that is required to be provided

under this section.

`(3) Not later than 1 year and 180 days after the date of enactment of

the Bankruptcy Reform Act of 2001, the Director of the Administrative

Office of the United States Courts shall prepare and submit to

Congress a report that--

`(A) assesses the effectiveness of the procedures under paragraph

(1); and

`(B) if appropriate, includes proposed legislation to--

`(i) further protect the confidentiality of tax information;

and

`(ii) provide penalties for the improper use by any person

of the tax information required to be provided under this

section.

`(i) If requested by the United States trustee or a trustee serving in

the case, the debtor shall provide--

`(1) a document that establishes the identity of the debtor,

including a driver's license, passport, or other document that

contains a photograph of the debtor; and

`(2) such other personal identifying information relating to the

debtor that establishes the identity of the debtor.'.

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

REQUIRED INFORMATION.

Section 521 of title 11, United States Code, as amended by this Act,

is amended by adding at the end the following:

`(j)(1) Notwithstanding section 707(a), and subject to paragraph (2),

if an individual debtor in a voluntary case under chapter 7 or 13

fails to file all of the information required under subsection (a)(1)

within 45 days after the filing of the petition commencing the case,

the case shall be automatically dismissed effective on the 46th day

after the filing of the petition.

`(2) With respect to a case described in paragraph (1), any party in

interest may request the court to enter an order dismissing the case.

If requested, the court shall enter an order of dismissal not later

than 5 days after such request.

`(3) Upon request of the debtor made within 45 days after the filing

of the petition commencing a case described in paragraph (1), the

court may allow the debtor an additional period of not to exceed 45

days to file the information required under subsection (a)(1) if the

court finds justification for extending the period for the filing.'.

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

Section 1324 of title 11, United States Code, is amended--

(1) by striking `After' and inserting the following:

`(a) Except as provided in subsection (b) and after'; and

(2) by adding at the end the following:

`(b) The hearing on confirmation of the plan may be held not earlier

than 20 days and not later than 45

days after the date of the meeting of creditors under section 341(a).'.

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

Title 11, United States Code, is amended--

(1) by amending section 1322(d) to read as follows:

`(d)(1) If the current monthly income of the debtor and the debtor's

spouse combined, when multiplied by 12, is not less than--

`(A) in the case of a debtor in a household of 1 person, the

median family income of the applicable State for 1 earner last

reported by the Bureau of the Census;

`(B) in the case of a debtor in a household of 2, 3, or 4

individuals, the highest median family income of the applicable

State for a family of the same number or fewer individuals last

reported by the Bureau of the Census; or

`(C) in the case of a debtor in a household exceeding 4

individuals, the highest median family income of the applicable

State for a family of 4 or fewer individuals last reported by the

Bureau of the Census, plus $525 per month for each individual in

excess of 4,

the plan may not provide for payments over a period that is longer

than 5 years.

`(2) If the current monthly income of the debtor and the debtor's

spouse combined, when multiplied by 12, is less than--

`(A) in the case of a debtor in a household of 1 person, the

median family income of the applicable State for 1 earner last

reported by the Bureau of the Census;

`(B) in the case of a debtor in a household of 2, 3, or 4

individuals, the highest median family income of the applicable

State for a family of the same number or fewer individuals last

reported by the Bureau of the Census; or

`(C) in the case of a debtor in a household exceeding 4

individuals, the highest median family income of the applicable

State for a family of 4 or fewer individuals last reported by the

Bureau of the Census, plus $525 per month for each individual in

excess of 4,

the plan may not provide for payments over a period that is longer

than 3 years, unless the court, for cause, approves a longer period,

but the court may not approve a period that is longer than 5 years.';

(2) in section 1325(b)(1)(B), by striking `three-year period' and

inserting `applicable commitment period'; and

(3) in section 1325(b), as amended by this Act, by adding at the

end the following:

`(4) For purposes of this subsection, the `applicable commitment

period'--

`(A) subject to subparagraph (B), shall be--

`(i) 3 years; or

`(ii) not less than 5 years, if the current monthly income

of the debtor and the debtor's spouse combined, when

multiplied by 12, is not less than--

`(I) in the case of a debtor in a household of 1

person, the median family income of the applicable

State for 1 earner last reported by the Bureau of the

Census;

`(II) in the case of a debtor in a household of 2, 3,

or 4 individuals, the highest median family income of

the applicable State for a family of the same number or

fewer individuals last reported by the Bureau of the

Census; or

`(III) in the case of a debtor in a household exceeding

4 individuals, the highest median family income of the

applicable State for a family of 4 or fewer individuals

last reported by the Bureau of the Census, plus $525

per month for each individual in excess of 4; and

`(B) may be less than 3 or 5 years, whichever is applicable under

subparagraph (A), but only if the plan provides for payment in

full of all allowed unsecured claims over a shorter period.'; and

(4) in section 1329(c), by striking `three years' and inserting

`the applicable commitment period under section 1325(b)(1)(B)'.

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

RULES OF BANKRUPTCY PROCEDURE.

It is the sense of Congress that rule 9011 of the Federal Rules of

Bankruptcy Procedure (11 U.S.C. App.) should be modified to include a

requirement that all documents (including schedules), signed and

unsigned, submitted to the court or to a trustee by debtors who

represent themselves and debtors who are represented by an attorney be

submitted only after the debtor or the debtor's attorney has made

reasonable inquiry to verify that the information contained in such

documents is--

(1) well grounded in fact; and

(2) warranted by existing law or a good-faith argument for the

extension, modification, or reversal of existing law.

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

Section 362(e) of title 11, United States Code, is amended--

(1) by inserting `(1)' after `(e)'; and

(2) by adding at the end the following:

`(2) Notwithstanding paragraph (1), in the case of an individual

filing under chapter 7, 11, or 13, the stay under subsection (a) shall

terminate on the date that is 60 days after a request is made by a

party in interest under subsection (d), unless--

`(A) a final decision is rendered by the court during the 60-day

period beginning on the date of the request; or

`(B) that 60-day period is extended--

`(i) by agreement of all parties in interest; or

`(ii) by the court for such specific period of time as the

court finds is required for good cause, as described in

findings made by the court.'.

SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.

(a) PROPERTY OF THE ESTATE-

(1) IN GENERAL- Subchapter I of chapter 11 of title 11, United

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

`Sec. 1115. Property of the estate

`(a) In a case concerning an individual debtor, property of the estate

includes, in addition to the property specified in section 541--

`(1) all property of the kind specified in section 541 that the

debtor acquires after the commencement of the case but before the

case is closed, dismissed, or converted to a case under chapter

7, 12, or 13, whichever occurs first; and

`(2) earnings from services performed by the debtor after the

commencement of the case but before the case is closed,

dismissed, or converted to a case under chapter 7, 12, or 13,

whichever occurs first.'.

`(b) Except as provided in section 1104 or a confirmed plan or order

confirming a plan, the debtor shall remain in possession of all

property of the estate.'.

(2) CLERICAL AMENDMENT- The table of sections for chapter 11 of

title 11, United States Code, is amended by adding at the end of

the matter relating to subchapter I the following:

`1115. Property of the estate.'.

(b) CONTENTS OF PLAN- Section 1123(a) of title 11, United States Code,

is amended--

(1) in paragraph (6), by striking `and' at the end;

(2) in paragraph (7), by striking the period and inserting `;

and'; and

(3) by adding at the end the following:

`(8) in a case concerning an individual, provide for the payment

to creditors through the plan of all or such portion of earnings

from personal services performed by the debtor after the

commencement of the case or other future income of the debtor as

is necessary for the execution of the plan.'.

(c) CONFIRMATION OF PLAN-

(1) REQUIREMENTS RELATING TO VALUE OF PROPERTY- Section 1129(a)

of title 11, United States Code, is amended by adding at the end

the following:

`(15) In a case concerning an individual in which the holder of

an allowed unsecured claim objects to the confirmation of the

plan--

`(A) the value of the property to be distributed under the

plan on account of such

claim is, as of the effective date of the plan, not less than the amount of

such claim; or

`(B) the value of the property to be distributed under the

plan is not less than the debtor's projected disposable

income (as that term is defined in section 1325(b)(2)) to be

received during the 5-year period beginning on the date that

the first payment is due under the plan, or during the term

of the plan, whichever is longer.'.

(2) REQUIREMENT RELATING TO INTERESTS IN PROPERTY- Section

1129(b)(2)(B)(ii) of title 11, United States Code, is amended by

inserting before the period at the end the following: `, except

that in a case concerning an individual, the debtor may retain

property included in the estate under section 1115, subject to

the requirements of subsection (a)(14)'.

(d) EFFECT OF CONFIRMATION--Section 1141(d) of title 11, United States

Code, is amended--

(1) in paragraph (2), by striking `The confirmation of a plan

does not discharge an individual debtor' and inserting `A

discharge under this chapter does not discharge a debtor'; and

(2) by adding at the end the following:

`(5) In a case concerning an individual--

`(A) except as otherwise ordered for cause shown, the discharge

is not effective until completion of all payments under the plan;

and

`(B) at any time after the confirmation of the plan and after

notice and a hearing, the court may grant a discharge to a debtor

that has not completed payments under the plan only if--

`(i) for each allowed unsecured claim, the value, as of the

effective date of the plan, of property actually distributed

under the plan on account of that claim is not less than the

amount that would have been paid on such claim if the estate

of the debtor had been liquidated under chapter 7 of this

title on such date; and

`(ii) modification of the plan under 1127 of this title is

not practicable.'.

(e) MODIFICATION OF PLAN- Section 1127 of title 11, United States

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

`(e) In a case concerning an individual, the plan may be modified at

any time after confirmation of the plan but before the completion of

payments under the plan, whether or not the plan has been

substantially consummated, upon request of the debtor, the trustee,

the United States trustee, or the holder of an allowed unsecured

claim, to--

`(1) increase or reduce the amount of payments on claims of a

particular class provided for by the plan;

`(2) extend or reduce the time period for such payments; or

`(3) alter the amount of the distribution to a creditor whose

claim is provided for by the plan to the extent necessary to take

account of any payment of such claim made other than under the

plan.

`(f)(1) Sections 1121 through 1128 of this title and the requirements

of section 1129 of this title apply to any modification under

subsection (a).

`(2) The plan, as modified, shall become the plan only after there has

been disclosure under section 1125, as the court may direct, notice

and a hearing, and such modification is approved.'.

SEC. 322. LIMITATION.

(a) EXEMPTIONS- Section 522 of title 11, United States Code, as

amended by this Act, is amended by adding at the end the following:

`(p)(1) Except as provided in paragraph (2) of this subsection and

sections 544 and 548 of this title, as a result of electing under

subsection (b)(3)(A) to exempt

property under State or local law, a debtor may not exempt any amount of

interest that was acquired by the debtor during the 2-year period preceding

the filing of the petition which exceeds in the aggregate $100,000 in value

in--

`(A) real or personal property that the debtor or a dependent of

the debtor uses as a residence;

`(B) a cooperative that owns property that the debtor or a

dependent of the debtor uses as a residence; or

`(C) a burial plot for the debtor or a dependent of the debtor.

`(2)(A) The limitation under paragraph (1) shall not apply to an

exemption claimed under subsection (b)(3)(A) by a family farmer for

the principal residence of that farmer.

`(B) For purposes of paragraph (1), any amount of such interest does

not include any interest transferred from a debtor's previous

principal residence (which was acquired prior to the beginning of the

2-year period) into the debtor's current principal residence, where

the debtor's previous and current residences are located in the same

State.'.

(b) ADJUSTMENT OF DOLLAR AMOUNTS- Section 104(b) of title 11, United

States Code, is amended--

(1) in paragraph (1), by striking `522(d),' and inserting

`522(d), 522(n), 522(p),'; and

(2) in paragraph (3), by striking `522(d),' and inserting

`522(d), 522(n), 522(p),'.

SEC. 323. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT CONTRIBUTIONS AND

OTHER PROPERTY FROM THE ESTATE.

(a) IN GENERAL- Section 541(b) of title 11, United States Code, is

amended by inserting after paragraph (6), as added by this Act, the

following:

`(7) any amount--

`(A) withheld by an employer from the wages of employees for

payment as contributions to--

`(i) an employee benefit plan subject to title I of the

Employee Retirement Income Security Act of 1974 (29

U.S.C. 1001 et seq.) or under an employee benefit plan

which is a governmental plan under section 414(d) of

the Internal Revenue Code of 1986, a deferred

compensation plan under section 457 of the Internal

Revenue Code of 1986, or a tax-deferred annuity under

section 403(b) of the Internal Revenue Code of 1986,

except that

amount shall not constitute disposable income, as defined in section

1325(b)(2) of this title; or

`(ii) a health insurance plan regulated by State law

whether or not subject to such title; or

`(B) received by the employer from employees for payment as

contributions to--

`(i) an employee benefit plan subject to title I of the

Employee Retirement Income Security Act of 1974 (29

U.S.C. 1001 et seq.) or under an employee benefit plan

which is a governmental plan under section 414(d) of

the Internal Revenue Code of 1986, a deferred

compensation plan under section 457 of the Internal

Revenue Code of 1986, or a tax-deferred annuity under

section 403(b) of the Internal Revenue Code of 1986,

except that amount shall not constitute disposable

income, as defined in section 1325(b)(2) of this title;

or

`(ii) a health insurance plan regulated by State law

whether or not subject to such title;'.

(b) APPLICATION OF AMENDMENT- The amendments made by this section

shall not apply to cases commenced under title 11, United States Code,

before the expiration of the 180-day period beginning on the date of

enactment of this Act.

SEC. 324. EXCLUSIVE JURISDICTION IN MATTERS INVOLVING BANKRUPTCY

PROFESSIONALS.

(a) IN GENERAL- Section 1334 of title 28, United States Code, is

amended--

(1) in subsection (b), by striking `Notwithstanding' and

inserting `Except as provided in subsection (e)(2), and

notwithstanding'; and

(2) by striking subsection (e) and inserting the following:

`(e) The district court in which a case under title 11 is commenced or

is pending shall have exclusive jurisdiction--

`(1) of all the property, wherever located, of the debtor as of

the date of commencement of such case, and of property of the

estate; and

`(2) over all claims or causes of action that involve

construction of section 327 of title 11, United States Code, or

rules relating to disclosure requirements under section 327.'.

(b) APPLICABILITY- This section shall only apply to cases filed after

the date of enactment of this Act.

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

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

Section 1930(a) of title 28, United States Code, is amended by

striking paragraph (1) and inserting the following:

`(1) For a case commenced--

`(A) under chapter 7 of title 11, $160; or

`(B) under chapter 13 of title 11, $150.'.

(b) UNITED STATES TRUSTEE SYSTEM FUND- Section 589a(b) of title 28,

United States Code, is amended--

(1) by striking paragraph (1) and inserting the following:

`(1)(A) 40.63 percent of the fees collected under section

1930(a)(1)(A) of this title in cases commenced under chapter 7 of

title 11; and

`(B) 70.00 percent of the fees collected under section

1930(a)(1)(B) of this title in cases commenced under chapter 13

of title 11;';

(2) in paragraph (2), by striking `one-half' and inserting

`three-fourths'; and

(3) in paragraph (4), by striking `one-half' and inserting `100

percent'.

(c) COLLECTION AND DEPOSIT OF MISCELLANEOUS BANKRUPTCY FEES- Section

406(b) of the Judiciary Appropriations Act, 1990 (28 U.S.C. 1931 note)

is amended by striking `pursuant to 28 U.S.C. section 1930(b) and

30.76 per centum of the fees hereafter collected under 28 U.S.C.

section 1930(a)(1) and 25 percent of the fees hereafter collected

under 28 U.S.C. section 1930(a)(3) shall be deposited as offsetting

receipts to the fund established under 28 U.S.C. section 1931' and

inserting `under section 1930(b) of title 28, United States Code, and

31.25 percent of the fees collected under section 1930(a)(1)(A) of

that title, 30.00 percent of the fees collected under section

1930(a)(1)(B) of that title, and 25 percent of the fees collected

under section 1930(a)(3) of that title shall be deposited as

offsetting receipts to the fund established under section 1931 of that

title'.

SEC. 326. SHARING OF COMPENSATION.

Section 504 of title 11, United States Code, is amended by adding at

the end the following:

`(c) This section shall not apply with respect to sharing, or agreeing

to share, compensation with a bona fide public service attorney

referral program that operates in accordance with non-Federal law

regulating attorney referral services and with rules of professional

responsibility applicable to attorney acceptance of referrals.'.

SEC. 327. FAIR VALUATION OF COLLATERAL.

Section 506(a) of title 11, United States Code, is amended by--

(1) inserting `(1)' after `(a)'; and

(2) by adding at the end the following:

`(2) In the case of an individual debtor under chapters 7 and 13, such

value with respect to personal property securing an allowed claim

shall be determined based on the replacement value of such property as

of the date of filing the petition without deduction for costs of sale

or marketing. With respect to property acquired for personal, family,

or household purpose, replacement value shall mean the price a retail

merchant would charge for property of that kind considering the age

and condition of the property at the time value is determined.'.

SEC. 328. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.

(a) EXECUTORY CONTRACTS AND UNEXPIRED LEASES- Section 365 of title 11,

United States Code, is amended--

(1) in subsection (b)--

(A) in paragraph (1)(A), by striking the semicolon at the

end and inserting the following: `other than a default that

is a breach of a provision relating to the satisfaction of

any provision (other than a penalty rate or penalty

provision) relating to a default arising from any failure to perform

nonmonetary obligations under an unexpired lease of real property, if it is

impossible for the trustee to cure such default by performing nonmonetary

acts at and after the time of assumption, except that if such default

arises from a failure to operate in accordance with a nonresidential real

property lease, then such default shall be cured by performance at and

after the time of assumption in accordance with such lease, and pecuniary

losses resulting from such default shall be compensated in accordance with

the provisions of paragraph (b)(l);'; and

(B) in paragraph (2)(D), by striking `penalty rate or

provision' and inserting `penalty rate or penalty

provision';

(2) in subsection (c)--

(A) in paragraph (2), by inserting `or' at the end;

(B) in paragraph (3), by striking `; or' at the end and

inserting a period; and

(C) by striking paragraph (4);

(3) in subsection (d)--

(A) by striking paragraphs (5) through (9); and

(B) by redesignating paragraph (10) as paragraph (5); and

(4) in subsection (f)(1) by striking `; except that' and all that

follows through the end of the paragraph and inserting a period.

(b) IMPAIRMENT OF CLAIMS OR INTERESTS- Section 1124(2) of title 11,

United States Code, is amended--

(1) in subparagraph (A), by inserting `or of a kind that section

365(b)(2) of this title expressly does not require to be cured'

before the semicolon at the end;

(2) in subparagraph (C), by striking `and' at the end;

(3) by redesignating subparagraph (D) as subparagraph (E); and

(4) by inserting after subparagraph (C) the following:

`(D) if such claim or such interest arises from any failure

to perform a nonmonetary obligation, other than a default

arising from failure to operate a non-residential real

property lease subject to section 365(b)(1)(A), compensates

the holder of such claim or such interest (other than the

debtor or an insider) for any actual pecuniary loss incurred

by such holder as a result of such failure; and'.

TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

Subtitle A--General Business Bankruptcy Provisions

SEC. 401. ADEQUATE PROTECTION FOR INVESTORS.

(a) DEFINITION- Section 101 of title 11, United States Code, as

amended by this Act, is amended by inserting after paragraph (48) the

following:

`(48A) `securities self regulatory organization' means either a

securities association registered with the Securities and

Exchange Commission under section 15A of the Securities Exchange

Act of 1934 (15 U.S.C. 78o-3) or a national securities exchange

registered with the Securities and Exchange Commission under

section 6 of the Securities Exchange Act of 1934 (15 U.S.C.

78f);'.

(b) AUTOMATIC STAY- Section 362(b) of title 11, United States Code, is

amended by inserting after paragraph (25), as added by this Act, the

following:

`(26) under subsection (a), of--

`(A) the commencement or continuation of an investigation or

action by a securities self regulatory organization to

enforce such organization's regulatory power;

`(B) the enforcement of an order or decision, other than for

monetary sanctions, obtained in an action by the securities

self regulatory organization to enforce such organization's

regulatory power; or

`(C) any act taken by the securities self regulatory

organization to delist, delete, or refuse to permit

quotation of any stock that does not meet applicable

regulatory requirements;'.

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

Section 341 of title 11, United States Code, is amended by adding at

the end the following:

`(e) Notwithstanding subsections (a) and (b), the court, on the

request of a party in interest and after notice and a hearing, for

cause may order that the United States trustee not convene a meeting

of creditors or equity security holders if the debtor has filed a plan

as to which the debtor solicited acceptances prior to the commencement

of the case.'.

SEC. 403. PROTECTION OF REFINANCE OF SECURITY INTEREST.

Subparagraphs (A), (B), and (C) of section 547(e)(2) of title 11,

United States Code, are each amended by striking `10' each place it

appears and inserting `30'.

SEC. 404. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

(a) IN GENERAL- Section 365(d)(4) of title 11, United States Code, is

amended to read as follows:

`(4)(A) Subject to subparagraph (B), in any case under any chapter of

this title, an unexpired lease of nonresidential real property under

which the debtor is the lessee shall be deemed rejected, and the

trustee shall immediately surrender that nonresidential real property

to the lessor, if the trustee does not assume or reject the unexpired

lease by the earlier of--

`(i) the date that is 120 days after the date of the order for

relief; or

`(ii) the date of the entry of an order confirming a plan.

`(B)(i) The court may extend the period determined under subparagraph

(A), prior to the expiration of the 120-day period, for 90 days upon

motion of the trustee or lessor for cause.

`(ii) If the court grants an extension under clause (i), the court may

grant a subsequent extension only upon prior written consent of the

lessor in each instance.'.

(b) EXCEPTION- Section 365(f)(1) of title 11, United States Code, is

amended by striking `subsection' the first place it appears and

inserting `subsections (b) and'.

SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

(a) APPOINTMENT- Section 1102(a) of title 11, United States Code, is

amended by adding at the end the following:

`(4) On request of a party in interest and after notice and a hearing,

the court may order the United States trustee to change the membership

of a committee appointed under this subsection, if the court

determines that the change is necessary to ensure adequate

representation of creditors or equity security holders. The court may

order the United States trustee to increase the number of members of a

committee to include a creditor that is a small business concern (as

described in section 3(a)(1) of the Small Business Act (15 U.S.C.

632(a)(1))), if the court determines that the creditor holds claims

(of the kind represented by the committee) the aggregate amount of

which, in comparison to the annual gross revenue of that creditor, is

disproportionately large.'.

(b) INFORMATION- Section 1102(b) of title 11, United States Code, is

amended by adding at the end the following:

`(3) A committee appointed under subsection (a) shall--

`(A) provide access to information for creditors who--

`(i) hold claims of the kind represented by that committee;

and

`(ii) are not appointed to the committee;

`(B) solicit and receive comments from the creditors described in

subparagraph (A); and

`(C) be subject to a court order that compels any additional

report or disclosure to be made to the creditors described in

subparagraph (A).'.

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

Section 546 of title 11, United States Code, is amended--

(1) by redesignating the second subsection designated as

subsection (g) (as added by section 222(a) of Public Law 103-394)

as subsection (i); and

(2) by adding at the end the following:

`(j)(1) Notwithstanding paragraphs (2) and (3) of section 545, the

trustee may not avoid a warehouseman's lien for storage,

transportation, or other costs incidental to the storage and handling

of goods.

`(2) The prohibition under paragraph (1) shall be applied in a manner

consistent with any applicable State statute that is similar to

section 7-209 of the Uniform Commercial Code, as in effect on the date

of enactment of the Bankruptcy Reform Act of 2001, or any successor

thereto.'.

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

Section 330(a) of title 11, United States Code, is amended--

(1) in paragraph (3)--

(A) by striking `(A) In' and inserting `In'; and

(B) by inserting `to an examiner, trustee under chapter 11,

or professional person' after `awarded'; and

(2) by adding at the end the following:

`(7) In determining the amount of reasonable compensation to be

awarded to a trustee, the court

shall treat such compensation as a commission, based on section 326 of this

title.'.

SEC. 408. POSTPETITION DISCLOSURE AND SOLICITATION.

Section 1125 of title 11, United States Code, is amended by adding at

the end the following:

`(g) Notwithstanding subsection (b), an acceptance or rejection of the

plan may be solicited from a holder of a claim or interest if such

solicitation complies with applicable nonbankruptcy law and if such

holder was solicited before the commencement of the case in a manner

complying with applicable nonbankruptcy law.'.

SEC. 409. PREFERENCES.

Section 547(c) of title 11, United States Code, is amended--

(1) by striking paragraph (2) and inserting the following:

`(2) to the extent that such transfer was in payment of a debt

incurred by the debtor in the ordinary course of business or

financial affairs of the debtor and the transferee, and such

transfer was--

`(A) made in the ordinary course of business or financial

affairs of the debtor and the transferee; or

`(B) made according to ordinary business terms;';

(2) in paragraph (8), by striking the period at the end and

inserting `; or'; and

(3) by adding at the end the following:

`(9) if, in a case filed by a debtor whose debts are not

primarily consumer debts, the aggregate value of all property

that constitutes or is affected by such transfer is less than

$5,000.'.

SEC. 410. VENUE OF CERTAIN PROCEEDINGS.

Section 1409(b) of title 28, United States Code, is amended by

inserting `, or a nonconsumer debt against a noninsider of less than

$10,000,' after `$5,000'.

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

Section 1121(d) of title 11, United States Code, is amended--

(1) by striking `On' and inserting `(1) Subject to paragraph (2),

on'; and

(2) by adding at the end the following:

`(2)(A) The 120-day period specified in paragraph (1) may not be

extended beyond a date that is 18 months after the date of the order

for relief under this chapter.

`(B) The 180-day period specified in paragraph (1) may not be extended

beyond a date that is 20 months after the date of the order for relief

under this chapter.'.

SEC. 412. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.

Section 523(a)(16) of title 11, United States Code, is amended--

(1) by striking `dwelling' the first place it appears;

(2) by striking `ownership or' and inserting `ownership,';

(3) by striking `housing' the first place it appears; and

(4) by striking `but only' and all that follows through `such

period' and inserting `or a lot in a homeowners association, for

as long as the debtor or the trustee has a legal, equitable, or

possessory ownership interest in such unit, such corporation, or

such lot,'.

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

Section 341(c) of title 11, United States Code, is amended by

inserting at the end the following: `Notwithstanding any local court

rule, provision of a State constitution, any other Federal or State

law that is not a bankruptcy law, or other requirement that

representation at the meeting of creditors under subsection (a) be by

an attorney, a creditor holding a consumer debt or any representative

of the creditor (which may include an entity or an employee of an

entity and may be a representative for more than 1 creditor) shall be

permitted to appear at and participate in the meeting of creditors in

a case under chapter 7 or 13, either alone or in conjunction with an

attorney for the creditor. Nothing in this subsection shall be

construed to require any creditor to be represented by an attorney at

any meeting of creditors.'.

SEC. 414. DEFINITION OF DISINTERESTED PERSON.

Section 101(14) of title 11, United States Code, is amended to read as

follows:

`(14) `disinterested person' means a person that--

`(A) is not a creditor, an equity security holder, or an

insider;

`(B) is not and was not, within 2 years before the date of

the filing of the petition, a director, officer, or employee

of the debtor; and

`(C) does not have an interest materially adverse to the

interest of the estate or of any class of creditors or

equity security holders, by reason of any direct or indirect

relationship to, connection with, or interest in, the

debtor, or for any other reason;'.

SEC. 415. FACTORS FOR COMPENSATION OF PROFESSIONAL PERSONS.

Section 330(a)(3) of title 11, United States Code, as amended by this

Act, is amended--

(1) in subparagraph (D), by striking `and' at the end;

(2) by redesignating subparagraph (E) as subparagraph (F); and

(3) by inserting after subparagraph (D) the following:

`(E) with respect to a professional person, whether the

person is board certified or otherwise has demonstrated

skill and experience in the bankruptcy field; and'.

SEC. 416. APPOINTMENT OF ELECTED TRUSTEE.

Section 1104(b) of title 11, United States Code, is amended--

(1) by inserting `(1)' after `(b)'; and

(2) by adding at the end the following:

`(2)(A) If an eligible, disinterested trustee is elected at a meeting

of creditors under paragraph (1), the United States trustee shall file

a report certifying that election.

`(B) Upon the filing of a report under subparagraph (A)--

`(i) the trustee elected under paragraph (1) shall be considered

to have been selected and appointed for purposes of this section;

and

`(ii) the service of any trustee appointed under subsection (d)

shall terminate.

`(C) In the case of any dispute arising out of an election described

in subparagraph (A), the court shall resolve the dispute.'.

SEC. 417. UTILITY SERVICE.

Section 366 of title 11, United States Code, is amended--

(1) in subsection (a), by striking `subsection (b)' and inserting

`subsections (b) and (c)'; and

(2) by adding at the end the following:

`(c)(1)(A) For purposes of this subsection, the term `assurance of

payment' means--

`(i) a cash deposit;

`(ii) a letter of credit;

`(iii) a certificate of deposit;

`(iv) a surety bond;

`(v) a prepayment of utility consumption; or

`(vi) another form of security that is mutually agreed on between

the utility and the debtor or the trustee.

`(B) For purposes of this subsection an administrative expense

priority shall not constitute an assurance of payment.

`(2) Subject to paragraphs (3) through (5), with respect to a case

filed under chapter 11, a utility referred to in subsection (a) may

alter, refuse, or discontinue utility service, if during the 30-day

period beginning on the date of filing of the petition, the utility

does not receive from the debtor or the trustee adequate assurance of

payment for utility service that is satisfactory to the utility.

`(3)(A) On request of a party in interest and after notice and a

hearing, the court may order modification of the amount of an

assurance of payment under paragraph (2).

`(B) In making a determination under this paragraph whether an

assurance of payment is adequate, the court may not consider--

`(i) the absence of security before the date of filing of the

petition;

`(ii) the payment by the debtor of charges for utility service in

a timely manner before the date of filing of the petition; or

`(iii) the availability of an administrative expense priority.

`(4) Notwithstanding any other provision of law, with respect to a

case subject to this subsection, a utility may recover or set off

against a security deposit provided to the utility by the debtor

before the date of filing of the petition without notice or order of

the court.'.

SEC. 418. BANKRUPTCY FEES.

Section 1930 of title 28, United States Code, is amended--

(1) in subsection (a), by striking `Notwithstanding section 1915

of this title, the' and inserting `The'; and

(2) by adding at the end the following:

`(f)(1) Under the procedures prescribed by the Judicial Conference of

the United States, the district court or the bankruptcy court may

waive the filing fee in a case under chapter 7 of title 11 for an

individual if the court determines that such debtor has income less

than 150 percent of the income official poverty line (as defined by

the Office of Management and Budget, and revised annually in

accordance with section 673(2) of the Omnibus Budget Reconciliation

Act of 1981) applicable to a family of the size involved and is unable

to pay that fee in installments. For purposes of this paragraph, the

term `filing fee' means the filing required by subsection (a), or any

other fee prescribed by the Judicial Conference under subsections (b)

and (c) that is payable to the clerk upon the commencement of a case

under chapter 7.

`(2) The district court or the bankruptcy court may waive for such

debtors other fees prescribed under subsections (b) and (c).

`(3) This subsection does not restrict the district court or the

bankruptcy court from waiving, in accordance with Judicial Conference

policy, fees prescribed under this section for other debtors and

creditors.'.

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

(a) IN GENERAL-

(1) DISCLOSURE- The Advisory Committee on Bankruptcy Rules of the

Judicial Conference of the United States, after consideration of

the views of the Director of the Executive Office for United

States Trustees, shall propose for adoption amended Federal Rules

of Bankruptcy Procedure and Official Bankruptcy Forms directing

debtors under chapter 11 of title 11, United States Code, to

disclose the information described in paragraph (2) by filing and

serving periodic financial and other reports designed to provide

such information.

(2) INFORMATION- The information referred to in paragraph (1) is

the value, operations, and profitability of any closely held

corporation, partnership, or of any other entity in which the

debtor holds a substantial or controlling interest.

(b) PURPOSE- The purpose of the rules and reports under subsection (a)

shall be to assist parties in interest taking steps to ensure that the

debtor's interest in any entity referred to in subsection (a)(2) is

used for the payment of allowed claims against debtor.

Subtitle B--Small Business Bankruptcy Provisions

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

Section 1125 of title 11, United States Code, is amended--

(1) in subsection (a)(1), by inserting before the semicolon `and

in determining whether a disclosure statement provides adequate

information, the court shall consider the complexity of the case,

the benefit of additional information to creditors and other

parties in interest, and the cost of providing additional

information'; and

(2) by striking subsection (f), and inserting the following:

`(f) Notwithstanding subsection (b), in a small business case--

`(1) the court may determine that the plan itself provides

adequate information and that a separate disclosure statement is

not necessary;

`(2) the court may approve a disclosure statement submitted on

standard forms approved by the court or adopted under section

2075 of title 28; and

`(3)(A) the court may conditionally approve a disclosure

statement subject to final approval after notice and a hearing;

`(B) acceptances and rejections of a plan may be solicited based

on a conditionally approved disclosure statement if the debtor

provides adequate information to each holder of a claim or

interest that is solicited, but a conditionally approved

disclosure statement shall be mailed not later than 20 days

before the date of the hearing on confirmation of the plan; and

`(C) the hearing on the disclosure statement may be combined with

the hearing on confirmation of a plan.'.

SEC. 432. DEFINITIONS.

(a) DEFINITIONS- Section 101 of title 11, United States Code, as

amended by this Act, is amended by striking paragraph (51C) and

inserting the following:

`(51C) `small business case' means a case filed under chapter 11

of this title in which the debtor is a small business debtor;

`(51D) `small business debtor'--

`(A) subject to subparagraph (B), means a person engaged in

commercial or business activities (including any affiliate

of such person that is also a debtor under this title and

excluding a person whose primary activity is the business of

owning or operating real property or activities incidental

thereto) that has aggregate noncontingent, liquidated

secured and unsecured debts as of the date of the petition

or the order for relief in an amount not more than

$3,000,000 (excluding debts owed to 1 or more affiliates or

insiders) for a case in which the United States trustee has

not appointed under section 1102(a)(1) a committee of

unsecured creditors or where the court has determined that

the committee of unsecured creditors is not sufficiently

active and representative to provide effective oversight of

the debtor; and

`(B) does not include any member of a group of affiliated

debtors that has aggregate noncontingent liquidated secured

and unsecured

debts in an amount greater than $3,000,000 (excluding debt owed to 1 or

more affiliates or insiders);'.

(b) CONFORMING AMENDMENT- Section 1102(a)(3) of title 11, United

States Code, is amended by inserting `debtor' after `small business'.

SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.

Within a reasonable period of time after the date of enactment of this

Act, the Advisory Committee on Bankruptcy Rules of the Judicial

Conference of the United States shall propose for adoption standard

form disclosure statements and plans of reorganization for small

business debtors (as defined in section 101 of title 11, United States

Code, as amended by this Act), designed to achieve a practical balance

between--

(1) the reasonable needs of the courts, the United States

trustee, creditors, and other parties in interest for reasonably

complete information; and

(2) economy and simplicity for debtors.

SEC. 434. UNIFORM NATIONAL REPORTING REQUIREMENTS.

(a) REPORTING REQUIRED-

(1) IN GENERAL- Chapter 3 of title 11, United States Code, is

amended by inserting after section 307 the following:

`Sec. 308. Debtor reporting requirements

`(a) For purposes of this section, the term `profitability' means,

with respect to a debtor, the amount of money that the debtor has

earned or lost during current and recent fiscal periods.

`(b) A small business debtor shall file periodic financial and other

reports containing information including--

`(1) the debtor's profitability;

`(2) reasonable approximations of the debtor's projected cash

receipts and cash disbursements over a reasonable period;

`(3) comparisons of actual cash receipts and disbursements with

projections in prior reports;

`(4)(A) whether the debtor is--

`(i) in compliance in all material respects with

postpetition requirements imposed by this title and the

Federal Rules of Bankruptcy Procedure; and

`(ii) timely filing tax returns and other required

government filings and paying taxes and other administrative

claims when due;

`(B) if the debtor is not in compliance with the requirements

referred to in subparagraph (A)(i) or filing tax returns and

other required government filings and making the payments

referred to in subparagraph (A)(ii), what the failures are and

how, at what cost, and when the debtor intends to remedy such

failures; and

`(C) such other matters as are in the best interests of the

debtor and creditors, and in the public interest in fair and

efficient procedures under chapter 11 of this title.'.

(2) CLERICAL AMENDMENT- The table of sections for chapter 3 of

title 11, United States Code, is amended by inserting after the

item relating to section 307 the following:

`308. Debtor reporting requirements.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take

effect 60 days after the date on which rules are prescribed under

section 2075 of title 28, United States Code, to establish forms to be

used to comply with section 308 of title 11, United States Code, as

added by subsection (a).

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

(a) PROPOSAL OF RULES AND FORMS- The Advisory Committee on Bankruptcy

Rules of the Judicial Conference of the United States shall propose

for adoption amended Federal Rules of Bankruptcy Procedure and

Official Bankruptcy Forms to be used by small business debtors to file

periodic financial and other reports containing information, including

information relating to--

(1) the debtor's profitability;

(2) the debtor's cash receipts and disbursements; and

(3) whether the debtor is timely filing tax returns and paying

taxes and other administrative claims when due.

(b) PURPOSE- The rules and forms proposed under subsection (a) shall

be designed to achieve a practical balance among--

(1) the reasonable needs of the bankruptcy court, the United

States trustee, creditors, and other parties in interest for

reasonably complete information;

(2) the small business debtor's interest that required reports be

easy and inexpensive to complete; and

(3) the interest of all parties that the required reports help

the small business debtor to understand the small business

debtor's financial condition and plan the small business debtor's

future.

SEC. 436. DUTIES IN SMALL BUSINESS CASES.

(a) DUTIES IN CHAPTER 11 CASES- Subchapter I of title 11, United

States Code, as amended by this Act, is amended by adding at the end

the following:

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

cases

`In a small business case, a trustee or the debtor in possession, in

addition to the duties provided in this title and as otherwise

required by law, shall--

`(1) append to the voluntary petition or, in an involuntary case,

file not later than 7 days after the date of the order for

relief--

`(A) its most recent balance sheet, statement of operations,

cash-flow statement, Federal income tax return; or

`(B) a statement made under penalty of perjury that no

balance sheet, statement of operations, or cash-flow

statement has been prepared and no Federal tax return has

been filed;

`(2) attend, through its senior management personnel and counsel,

meetings scheduled by the court or the United States trustee,

including initial debtor interviews, scheduling conferences, and

meetings of creditors convened under section 341 unless the court

waives that requirement after notice and

hearing, upon a finding of extraordinary and compelling circumstances;

`(3) timely file all schedules and statements of financial

affairs, unless the court, after notice and a hearing, grants an

extension, which shall not extend such time period to a date

later than 30 days after the date of the order for relief, absent

extraordinary and compelling circumstances;

`(4) file all postpetition financial and other reports required

by the Federal Rules of Bankruptcy Procedure or by local rule of

the district court;

`(5) subject to section 363(c)(2), maintain insurance customary

and appropriate to the industry;

`(6)(A) timely file tax returns and other required government

filings; and

`(B) subject to section 363(c)(2), timely pay all administrative

expense tax claims, except those being contested by appropriate

proceedings being diligently prosecuted; and

`(7) allow the United States trustee, or a designated

representative of the United States trustee, to inspect the

debtor's business premises, books, and records at reasonable

times, after reasonable prior written notice, unless notice is

waived by the debtor.'.

(b) CLERICAL AMENDMENT- The table of sections for chapter 11 of title

11, United States Code, is amended by adding at the end of the matter

relating to subchapter I the following:

`1116. Duties of trustee or debtor in possession in small

business cases.'.

SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.

Section 1121 of title 11, United States Code, is amended by striking

subsection (e) and inserting the following:

`(e) In a small business case--

`(1) only the debtor may file a plan until after 180 days after

the date of the order for relief, unless that period is--

`(A) extended as provided by this subsection, after notice

and hearing; or

`(B) the court, for cause, orders otherwise;

`(2) the plan, and any necessary disclosure statement, shall be

filed not later than 300 days after the date of the order for

relief; and

`(3) the time periods specified in paragraphs (1) and (2), and

the time fixed in section 1129(e), within which the plan shall be

confirmed, may be extended only if--

`(A) the debtor, after providing notice to parties in

interest (including the United States trustee), demonstrates

by a preponderance of the evidence that it is more likely

than not that the court will confirm a plan within a

reasonable period of time;

`(B) a new deadline is imposed at the time the extension is

granted; and

`(C) the order extending time is signed before the existing

deadline has expired.'.

SEC. 438. PLAN CONFIRMATION DEADLINE.

Section 1129 of title 11, United States Code, is amended by adding at

the end the following:

`(e) In a small business case, the plan shall be confirmed not later

than 175 days after the date of the order for relief, unless such

175-day period is extended as provided in section 1121(e)(3).'.

SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE.

Section 586(a) of title 28, United States Code, is amended--

(1) in paragraph (3)--

(A) in subparagraph (G), by striking `and' at the end;

(B) by redesignating subparagraph (H) as subparagraph (I);

and

(C) by inserting after subparagraph (G) the following:

`(H) in small business cases (as defined in section 101 of

title 11), performing the additional duties specified in

title 11 pertaining to such cases; and';

(2) in paragraph (5), by striking `and' at the end;

(3) in paragraph (6), by striking the period at the end and

inserting a semicolon; and

(4) by adding at the end the following:

`(7) in each of such small business cases--

`(A) conduct an initial debtor interview as soon as

practicable after the entry of order for relief but before

the first meeting scheduled under section 341(a) of title

11, at which time the United States trustee shall--

`(i) begin to investigate the debtor's viability;

`(ii) inquire about the debtor's business plan;

`(iii) explain the debtor's obligations to file monthly

operating reports and other required reports;

`(iv) attempt to develop an agreed scheduling order;

and

`(v) inform the debtor of other obligations;

`(B) if determined to be appropriate and advisable, visit

the appropriate business premises of the debtor and

ascertain the state of the debtor's books and records and

verify that the debtor has filed its tax returns; and

`(C) review and monitor diligently the debtor's activities,

to identify as promptly as possible whether the debtor will

be unable to confirm a plan; and

`(8) in any case in which the United States trustee finds

material grounds for any relief under section 1112 of title 11,

the United States trustee shall apply promptly after making that

finding to the court for relief.'.

SEC. 440. SCHEDULING CONFERENCES.

Section 105(d) of title 11, United States Code, is amended--

(1) in the matter preceding paragraph (1), by striking `, may';

and

(2) by striking paragraph (1) and inserting the following:

`(1) shall hold such status conferences as are necessary to

further the expeditious and economical resolution of the case;

and'.

SEC. 441. SERIAL FILER PROVISIONS.

Section 362 of title 11, United States Code, as amended by this Act is

amended--

(1) in subsection (k), as redesignated by this Act--

(A) by striking `An' and inserting `(1) Except as provided

in paragraph (2), an'; and

(B) by adding at the end the following:

`(2) If such violation is based on an action taken by an entity in the

good faith belief that subsection (h) applies to the debtor, the

recovery under paragraph (1) of this subsection against such entity

shall be limited to actual damages.'; and

(2) by adding at the end the following:

`(l)(1) Except as provided in paragraph (2) of this subsection, the

provisions of subsection (a) do not apply in a case in which the

debtor--

`(A) is a debtor in a small business case pending at the time the

petition is filed;

`(B) was a debtor in a small business case that was dismissed for

any reason by an order that became final in the 2-year period

ending on the date of the order for relief entered with respect

to the petition;

`(C) was a debtor in a small business case in which a plan was

confirmed in the 2-year period ending on the date of the order

for relief entered with respect to the petition; or

`(D) is an entity that has succeeded to substantially all of the

assets or business of a small business debtor described in

subparagraph (A), (B), or (C).

`(2) This subsection does not apply--

`(A) to an involuntary case involving no collusion by the debtor

with creditors; or

`(B) to the filing of a petition if--

`(i) the debtor proves by a preponderance of the evidence

that the filing of that petition resulted from circumstances

beyond the control of the debtor not foreseeable at the time

the case then pending was filed; and

`(ii) it is more likely than not that the court will confirm

a feasible plan, but not a liquidating plan, within a

reasonable period of time.'.

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

TRUSTEE.

(a) EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION- Section 1112 of

title 11, United States Code, is amended by striking subsection (b)

and inserting the following:

`(b)(1) Except as provided in paragraph (2) of this subsection,

subsection (c) of this section, and section 1104(a)(3), on request of

a party in interest, and after notice and a hearing, the court shall

convert a case under this chapter to a case under chapter 7 or dismiss

a case under this chapter, whichever is in the best interest of

creditors and the estate, if the movant establishes cause.

`(2) The relief provided in paragraph (1) shall not be granted if the

debtor or another party in interest objects and establishes by a

preponderance of the evidence that--

`(A) a plan with a reasonable possibility of being confirmed will

be filed within a reasonable period of time; and

`(B) the grounds include an act or omission of the debtor--

`(i) for which there exists a reasonable justification for

the act or omission; and

`(ii) that will be cured within a reasonable period of time

fixed by the court.

`(3) The court shall commence the hearing on any motion under this

subsection not later than 30 days after filing of the motion, and

shall decide the motion not later than 15 days after commencement of

the hearing, unless the movant expressly consents to a continuance for

a specific period of time or compelling circumstances prevent the

court from meeting the time limits established by this paragraph.

`(4) For purposes of this subsection, the term `cause' includes--

`(A) substantial or continuing loss to or diminution of the

estate;

`(B) gross mismanagement of the estate;

`(C) failure to maintain appropriate insurance that poses a risk

to the estate or to the public;

`(D) unauthorized use of cash collateral harmful to 1 or more

creditors;

`(E) failure to comply with an order of the court;

`(F) repeated failure timely to satisfy any filing or reporting

requirement established by this title or by any rule applicable

to a case under this chapter;

`(G) failure to attend the meeting of creditors convened under

section 341(a) or an examination ordered under rule 2004 of the

Federal Rules of Bankruptcy Procedure;

`(H) failure timely to provide information or attend meetings

reasonably requested by the United States trustee or the

bankruptcy administrator;

`(I) failure timely to pay taxes due after the date of the order

for relief or to file tax returns due after the order for relief;

`(J) failure to file a disclosure statement, or to file or

confirm a plan, within the time fixed by this title or by order

of the court;

`(K) failure to pay any fees or charges required under chapter

123 of title 28;

`(L) revocation of an order of confirmation under section 1144;

`(M) inability to effectuate substantial consummation of a

confirmed plan;

`(N) material default by the debtor with respect to a confirmed

plan;

`(O) termination of a confirmed plan by reason of the occurrence

of a condition specified in the plan; and

`(P) failure of the debtor to pay any domestic support obligation

that first becomes payable after the date on which the petition

is filed.

`(5) The court shall commence the hearing on any motion under this

subsection not later than 30 days after filing of the motion, and

shall decide the motion not later than 15 days after commencement of

the hearing, unless the movant expressly consents to a continuance for

a specific period of time or compelling circumstances prevent the

court from meeting the time limits established by this paragraph.'.

(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF TRUSTEE- Section 1104(a) of

title 11, United States Code, is amended--

(1) in paragraph (1), by striking `or' at the end;

(2) in paragraph (2), by striking the period at the end and

inserting `; or'; and

(3) by adding at the end the following:

`(3) if grounds exist to convert or dismiss the case under

section 1112, but the court determines that the appointment of a

trustee or an examiner is in the best interests of creditors and

the estate.'.

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

TO SMALL BUSINESSES.

Not later than 2 years after the date of enactment of this Act, the

Administrator of the Small Business Administration, in consultation

with the Attorney General, the Director of the Administrative Office

of United States Trustees, and the Director of the Administrative

Office of the United States Courts, shall--

(1) conduct a study to determine--

(A) the internal and external factors that cause small

businesses, especially sole proprietorships, to become

debtors in cases under title 11, United States Code, and

that cause certain small businesses to successfully complete

cases under chapter 11 of such title; and

(B) how Federal laws relating to bankruptcy may be made more

effective and efficient in assisting small businesses to

remain viable; and

(2) submit to the President pro tempore of the Senate and the

Speaker of the House of Representatives a report summarizing that

study.

SEC. 444. PAYMENT OF INTEREST.

Section 362(d)(3) of title 11, United States Code, is amended--

(1) by inserting `or 30 days after the court determines that the

debtor is subject to this paragraph, whichever is later' after

`90-day period)'; and

(2) by striking subparagraph (B) and inserting the following:

`(B) the debtor has commenced monthly payments that--

`(i) may, in the debtor's sole discretion,

notwithstanding section 363(c)(2), be made from rents

or other income generated before or after the

commencement of the case by or from the property to

each creditor whose claim is secured by such real

estate (other than a claim secured by a judgment lien

or by an unmatured statutory lien); and

`(ii) are in an amount equal to interest at the then

applicable nondefault contract rate of interest on the

value of the creditor's interest in the real estate;

or'.

SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES.

Section 503(b) of title 11, United States Code, is amended--

(1) in paragraph (5), by striking `and' at the end;

(2) in paragraph (6), by striking the period at the end and

inserting a semicolon; and

(3) by adding at the end the following:

`(7) with respect to a nonresidential real property lease

previously assumed under section 365, and subsequently rejected,

a sum equal to all monetary obligations due, excluding those

arising from or relating to a failure to operate or penalty

provisions, for the period of 2 years following the later of the

rejection date or the date of actual turnover of the premises,

without reduction or setoff for any reason whatsoever except for

sums actually received or to be received from a nondebtor, and

the claim for remaining sums due for the balance of the term of

the lease shall be a claim under section 502(b)(6);'.

TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

(a) TECHNICAL AMENDMENT RELATING TO MUNICIPALITIES- Section 921(d) of

title 11, United States Code, is amended by inserting `notwithstanding

section 301(b)' before the period at the end.

(b) CONFORMING AMENDMENT- Section 301 of title 11, United States Code,

is amended--

(1) by inserting `(a)' before `A voluntary'; and

(2) by striking the last sentence and inserting the following:

`(b) The commencement of a voluntary case under a chapter of this

title constitutes an order for relief under such chapter.'.

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

Section 901(a) of title 11, United States Code, is amended--

(1) by inserting `555, 556,' after `553,'; and

(2) by inserting `559, 560, 561, 562' after `557,'.

TITLE VI--BANKRUPTCY DATA

SEC. 601. IMPROVED BANKRUPTCY STATISTICS.

(a) IN GENERAL- Chapter 6 of title 28, United States Code, is amended

by adding at the end the following:

`Sec. 159. Bankruptcy statistics

`(a) The clerk of each district shall collect statistics regarding

individual debtors with primarily consumer debts seeking relief under

chapters 7, 11, and 13 of title 11. Those statistics shall be on a

standardized form prescribed by the Director of the Administrative

Office of the United States Courts (referred to in this section as the

`Director').

`(b) The Director shall--

`(1) compile the statistics referred to in subsection (a);

`(2) make the statistics available to the public; and

`(3) not later than October 31, 2002, and annually thereafter,

prepare, and submit to Congress a report concerning the

information collected under subsection (a) that contains an

analysis of the information.

`(c) The compilation required under subsection (b) shall--

`(1) be itemized, by chapter, with respect to title 11;

`(2) be presented in the aggregate and for each district; and

`(3) include information concerning--

`(A) the total assets and total liabilities of the debtors

described in subsection (a), and in each category of assets

and liabilities, as reported in the schedules prescribed

pursuant to section 2075 of this title and filed by those

debtors;

`(B) the current monthly income, average income, and average

expenses of those debtors as reported on the schedules and

statements that each such debtor files under sections 521

and 1322 of title 11;

`(C) the aggregate amount of debt discharged in the

reporting period, determined as the difference between the

total amount of debt and obligations of a debtor reported on

the schedules and the amount of such debt reported in

categories which are predominantly nondischargeable;

`(D) the average period of time between the filing of the

petition and the closing of the case;

`(E) for the reporting period--

`(i) the number of cases in which a reaffirmation was

filed; and

`(ii)(I) the total number of reaffirmations filed;

`(II) of those cases in which a reaffirmation was

filed, the number of cases in which the debtor was not

represented by an attorney; and

`(III) of those cases in which a reaffirmation was

filed, the number of cases in which the reaffirmation

was approved by the court;

`(F) with respect to cases filed under chapter 13 of title

11, for the reporting period--

`(i)(I) the number of cases in which a final order was

entered determining the value of property securing a

claim in an amount less than the amount of the claim;

and

`(II) the number of final orders determining the value

of property securing a claim issued;

`(ii) the number of cases dismissed, the number of

cases dismissed for failure to make payments under the

plan, the number of cases refiled after dismissal, and

the number of cases in which the plan was completed,

separately itemized with respect to the number of

modifications made before completion of the plan, if

any; and

`(iii) the number of cases in which the debtor filed

another case during the 6-year period preceding the

filing;

`(G) the number of cases in which creditors were fined for

misconduct and any amount of punitive damages awarded by the

court for creditor misconduct; and

`(H) the number of cases in which sanctions under rule 9011

of the Federal Rules of Bankruptcy Procedure were imposed

against debtor's counsel or damages awarded under such

Rule.'.

(b) CLERICAL AMENDMENT- The table of sections for chapter 6 of title

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

`159. Bankruptcy statistics.'.

(c) EFFECTIVE DATE- The amendments made by this section shall take

effect 18 months after the date of enactment of this Act.

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

(a) AMENDMENT- Chapter 39 of title 28, United States Code, is amended

by adding at the end the following:

`Sec. 589b. Bankruptcy data

`(a) RULES- The Attorney General shall, within a reasonable time after

the effective date of this section, issue rules requiring uniform

forms for (and from time to time thereafter to appropriately modify

and approve)--

`(1) final reports by trustees in cases under chapters 7, 12, and

13 of title 11; and

`(2) periodic reports by debtors in possession or trustees, as

the case may be, in cases under chapter 11 of title 11.

`(b) REPORTS- Each report referred to in subsection (a) shall be

designed (and the requirements as to place and manner of filing shall

be established) so as to facilitate compilation of data and maximum

possible access of the public, both by physical inspection at one or

more central filing locations, and by electronic access through the

Internet or other appropriate media.

`(c) REQUIRED INFORMATION- The information required to be filed in the

reports referred to in subsection (b) shall be that which is in the

best interests of debtors and creditors, and in the public interest in

reasonable and adequate information to evaluate the efficiency and

practicality of the Federal bankruptcy system. In issuing rules

proposing the forms referred to in subsection (a), the Attorney

General shall strike the best achievable practical balance between--

`(1) the reasonable needs of the public for information about the

operational results of the Federal bankruptcy system;

`(2) economy, simplicity, and lack of undue burden on persons

with a duty to file reports; and

`(3) appropriate privacy concerns and safeguards.

`(d) FINAL REPORTS- Final reports proposed for adoption by trustees

under chapters 7, 12, and 13 of title 11 shall, in addition to such

other matters as are required by law or as the Attorney General in the

discretion of the Attorney General, shall propose, include with

respect to a case under such title--

`(1) information about the length of time the case was pending;

`(2) assets abandoned;

`(3) assets exempted;

`(4) receipts and disbursements of the estate;

`(5) expenses of administration, including for use under section

707(b), actual costs of administering cases under chapter 13 of

title 11;

`(6) claims asserted;

`(7) claims allowed; and

`(8) distributions to claimants and claims discharged without

payment,

in each case by appropriate category and, in cases under chapters 12

and 13 of title 11, date of confirmation of the plan, each

modification thereto, and defaults by the debtor in performance under

the plan.

`(e) PERIODIC REPORTS- Periodic reports proposed for adoption by

trustees or debtors in possession under chapter 11 of title 11 shall,

in addition to such other matters as are required by law or as the

Attorney General, in the discretion of the Attorney General, shall

propose, include--

`(1) information about the standard industry classification,

published by the Department of Commerce, for the businesses

conducted by the debtor;

`(2) length of time the case has been pending;

`(3) number of full-time employees as of the date of the order

for relief and at the end of each reporting period since the case

was filed;

`(4) cash receipts, cash disbursements and profitability of the

debtor for the most recent period and cumulatively since the date

of the order for relief;

`(5) compliance with title 11, whether or not tax returns and tax

payments since the date of the order for relief have been timely

filed and made;

`(6) all professional fees approved by the court in the case for

the most recent period and cumulatively since the date of the

order for relief (separately reported, for the professional fees

incurred by or on behalf of the debtor, between those that would

have been incurred absent a bankruptcy case and those not); and

`(7) plans of reorganization filed and confirmed and, with

respect thereto, by class, the recoveries of the holders,

expressed in aggregate dollar values and, in the case of claims,

as a percentage of total claims of the class allowed.'.

(b) CLERICAL AMENDMENT- The table of sections at the beginning of

chapter 39 of title 28, United States Code, is amended by adding at

the end the following:

`589b. Bankruptcy data.'.

SEC. 603. AUDIT PROCEDURES.

(a) IN GENERAL-

(1) ESTABLISHMENT OF PROCEDURES- The Attorney General (in

judicial districts served by United States trustees) and the

Judicial Conference of the United States (in judicial districts

served by bankruptcy administrators) shall establish procedures

to determine the accuracy, veracity, and completeness of

petitions, schedules, and other information which the debtor is

required to provide under sections 521 and 1322 of title 11, and,

if applicable, section 111 of title 11, in individual cases filed

under chapter 7 or 13 of such title. Such audits shall be in

accordance with generally accepted auditing standards and

performed by independent certified public accountants or

independent licensed public accountants, provided that the

Attorney General and the Judicial Conference, as appropriate, may

develop alternative auditing standards not later than 2 years

after the date of enactment of this Act.

(2) PROCEDURES- Those procedures required by paragraph (1)

shall--

(A) establish a method of selecting appropriate qualified

persons to contract to perform those audits;

(B) establish a method of randomly selecting cases to be

audited, except that not less than 1 out of every 250 cases

in each Federal judicial district shall be selected for

audit;

(C) require audits for schedules of income and expenses

which reflect greater than average variances from the

statistical norm of the district in which the schedules were

filed if those variances occur by reason of higher income or

higher expenses than the statistical norm of the district in

which the schedules were filed; and

(D) establish procedures for providing, not less frequently

than annually, public information concerning the aggregate

results of such audits including the percentage of cases, by

district, in which a material misstatement of income or

expenditures is reported.

(b) AMENDMENTS- Section 586 of title 28, United States Code, is

amended--

(1) in subsection (a), by striking paragraph (6) and inserting

the following:

`(6) make such reports as the Attorney General directs, including

the results of audits performed under section 603(a) of the

Bankruptcy Reform Act of 2001; and'; and

(2) by adding at the end the following:

`(f)(1) The United States trustee for each district is authorized to

contract with auditors to perform audits in cases designated by the

United States trustee, in accordance with the procedures established

under section 603(a) of the Bankruptcy Reform Act of 2001.

`(2)(A) The report of each audit referred to in paragraph (1) shall be

filed with the court and transmitted to the United States trustee.

Each report shall clearly and conspicuously specify any material

misstatement of income or expenditures or of assets identified by the

person performing the audit. In any case in which a material

misstatement of income or expenditures or of assets has

been reported, the clerk of the bankruptcy court shall give notice of the

misstatement to the creditors in the case.

`(B) If a material misstatement of income or expenditures or of assets

is reported, the United States trustee shall--

`(i) report the material misstatement, if appropriate, to the

United States Attorney pursuant to section 3057 of title 18; and

`(ii) if advisable, take appropriate action, including but not

limited to commencing an adversary proceeding to revoke the

debtor's discharge pursuant to section 727(d) of title 11.'.

(c) AMENDMENTS TO SECTION 521 OF TITLE 11, U.S.C- Section 521(a) of

title 11, United States Code, as so designated by this Act, is amended

in each of paragraphs (3) and (4) by inserting `or an auditor

appointed under section 586(f) of title 28' after `serving in the

case'.

(d) AMENDMENTS TO SECTION 727 OF TITLE 11, U.S.C- Section 727(d) of

title 11, United States Code, is amended--

(1) in paragraph (2), by striking `or' at the end;

(2) in paragraph (3), by striking the period at the end and

inserting `; or'; and

(3) by adding at the end the following:

`(4) the debtor has failed to explain satisfactorily--

`(A) a material misstatement in an audit referred to in

section 586(f) of title 28; or

`(B) a failure to make available for inspection all

necessary accounts, papers, documents, financial records,

files, and all other papers, things, or property belonging

to the debtor that are requested for an audit referred to in

section 586(f) of title 28.'.

(e) EFFECTIVE DATE- The amendments made by this section shall take

effect 18 months after the date of enactment of this Act.

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

It is the sense of Congress that--

(1) the national policy of the United States should be that all

data held by bankruptcy clerks in electronic form, to the extent

such data reflects only public records (as defined in section 107

of title 11, United States Code), should be released in a usable

electronic form in bulk to the public, subject to such

appropriate privacy concerns and safeguards as Congress and the

Judicial Conference of the United States may determine; and

(2) there should be established a bankruptcy data system in

which--

(A) a single set of data definitions and forms are used to

collect data nationwide; and

(B) data for any particular bankruptcy case are aggregated

in the same electronic record.

TITLE VII--BANKRUPTCY TAX PROVISIONS

SEC. 701. TREATMENT OF CERTAIN LIENS.

(a) TREATMENT OF CERTAIN LIENS- Section 724 of title 11, United States

Code, is amended--

(1) in subsection (b), in the matter preceding paragraph (1), by

inserting `(other than to the extent that there is a properly

perfected unavoidable tax lien arising in connection with an ad

valorem tax on real or personal property of the estate)' after

`under this title';

(2) in subsection (b)(2), by inserting `(except that such

expenses, other than claims for wages, salaries, or commissions

which arise after the filing of a petition, shall be limited to

expenses incurred under chapter 7 of this title and shall not

include expenses incurred under chapter 11 of this title)' after

`507(a)(1)'; and

(3) by adding at the end the following:

`(e) Before subordinating a tax lien on real or personal property of

the estate, the trustee shall--

`(1) exhaust the unencumbered assets of the estate; and

`(2) in a manner consistent with section 506(c), recover from

property securing an allowed secured claim the reasonable,

necessary costs and expenses of preserving or disposing of that

property.

`(f) Notwithstanding the exclusion of ad valorem tax liens under this

section and subject to the requirements of subsection (e), the

following may be paid from property of the estate which secures a tax

lien, or the proceeds of such property:

`(1) Claims for wages, salaries, and commissions that are

entitled to priority under section 507(a)(4).

`(2) Claims for contributions to an employee benefit plan

entitled to priority under section 507(a)(5).'.

(b) DETERMINATION OF TAX LIABILITY- Section 505(a)(2) of title 11,

United States Code, is amended--

(1) in subparagraph (A), by striking `or' at the end;

(2) in subparagraph (B), by striking the period at the end and

inserting `; or'; and

(3) by adding at the end the following:

`(C) the amount or legality of any amount arising in connection

with an ad valorem tax on real or personal property of the

estate, if the applicable period for contesting or redetermining

that amount under any law (other than a bankruptcy law) has

expired.'.

SEC. 702. TREATMENT OF FUEL TAX CLAIMS.

Section 501 of title 11, United States Code, is amended by adding at

the end the following:

`(e) A claim arising from the liability of a debtor for fuel use tax

assessed consistent with the requirements of section 31705 of title 49

may be filed by the base jurisdiction designated pursuant to the

International Fuel Tax Agreement and, if so filed, shall be allowed as

a single claim.'.

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

Section 505(b) of title 11, United States Code, is amended--

(1) in the first sentence, by inserting `at the address and in

the manner designated in paragraph (1)' after `determination of

such tax';

(2) by striking `(1) upon payment' and inserting `(A) upon

payment';

(3) by striking `(A) such governmental unit' and inserting `(i)

such governmental unit';

(4) by striking `(B) such governmental unit' and inserting `(ii)

such governmental unit';

(5) by striking `(2) upon payment' and inserting `(B) upon

payment';

(6) by striking `(3) upon payment' and inserting `(C) upon

payment';

(7) by striking `(b)' and inserting `(2)'; and

(8) by inserting before paragraph (2), as so designated, the

following:

`(b)(1)(A) The clerk of each district shall maintain a listing under

which a Federal, State, or local governmental unit responsible for the

collection of taxes within the district may--

`(i) designate an address for service of requests under this

subsection; and

`(ii) describe where further information concerning additional

requirements for filing such requests may be found.

`(B) If a governmental unit referred to in subparagraph (A) does not

designate an address and provide that address to the clerk under that

subparagraph, any request made under this subsection may be served at

the address for the filing of a tax return or protest with the

appropriate taxing authority of that governmental unit.'.

SEC. 704. RATE OF INTEREST ON TAX CLAIMS.

(a) IN GENERAL- Subchapter I of chapter 5 of title 11, United States

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

`Sec. 511. Rate of interest on tax claims

`(a) If any provision of this title requires the payment of interest

on a tax claim or on an administrative expense tax, or the payment of

interest to enable a creditor to receive the present value of the

allowed amount of a tax claim, the rate of interest shall be the rate

determined under applicable nonbankruptcy law.

`(b) In the case of taxes paid under a confirmed plan under this

title, the rate of interest shall be determined as of the calendar

month in which the plan is confirmed.'.

(b) CLERICAL AMENDMENT- The table of sections for chapter 5 of title

11, United States Code, is amended by inserting after the item

relating to section 510 the following:

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

SEC. 705. PRIORITY OF TAX CLAIMS.

Section 507(a)(8) of title 11, United States Code, is amended--

(1) in subparagraph (A)--

(A) in the matter preceding clause (i), by inserting `for a

taxable year ending on or before the date of filing of the

petition' after `gross receipts';

(B) in clause (i), by striking `for a taxable year ending on

or before the date of filing of the petition'; and

(C) by striking clause (ii) and inserting the following:

`(ii) assessed within 240 days before the date of the

filing of the petition, exclusive of--

`(I) any time during which an offer in compromise

with respect to that tax was pending or in effect

during that 240-day period, plus 30 days; and

`(II) any time during which a stay of proceedings

against collections was in effect in a prior case

under this title during that 240-day period; plus

90 days.'; and

(2) by adding at the end the following:

`An otherwise applicable time period specified in this paragraph

shall be suspended for (i) any period during which a governmental

unit is prohibited under applicable nonbankruptcy law from

collecting a tax as a result of a request by the debtor for a

hearing and an appeal of any collection action taken or proposed

against the debtor, plus 90 days; plus (ii) any time during which

the stay of proceedings was in effect in a prior case under this

title or during which collection was precluded by the existence

of 1 or more confirmed plans under this title, plus 90 days.'.

SEC. 706. PRIORITY PROPERTY TAXES INCURRED.

Section 507(a)(8)(B) of title 11, United States Code, is amended by

striking `assessed' and inserting `incurred'.

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

Section 1328(a)(2) of title 11, United States Code, as amended by

section 314 of this Act, is amended by striking `paragraph' and

inserting `section 507(a)(8)(C) or in paragraph (1)(B), (1)(C),'.

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

Section 1141(d) of title 11, United States Code, as amended by this

Act, is amended by adding at the end the following:

`(6) Notwithstanding paragraph (1), the confirmation of a plan does

not discharge a debtor that is a corporation from any debt described

in section 523(a)(2) or for a tax or customs duty with respect to

which the debtor--

`(A) made a fraudulent return; or

`(B) willfully attempted in any manner to evade or defeat that

tax or duty.'.

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

Section 362(a)(8) of title 11, United States Code, is amended by

striking `the debtor' and inserting `a corporate debtor's tax

liability for a taxable period the bankruptcy court may determine or

concerning an individual debtor's tax liability for a taxable period

ending before the order for relief under this title'.

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

Section 1129(a)(9) of title 11, United States Code, is amended--

(1) in subparagraph (B), by striking `and' at the end;

(2) in subparagraph (C), by striking `deferred cash payments,'

and all that follows through the end of the subparagraph, and

inserting `regular installment payments in cash--

`(i) of a total value, as of the effective date of the

plan, equal to the allowed amount of such claim;

`(ii) over a period ending not later than 5 years after

the date of the entry of the order for relief under

section 301, 302, or 303; and

`(iii) in a manner not less favorable than the most

favored nonpriority unsecured claim provided for in the

plan (other than cash payments made to a class of

creditors under section 1122(b)); and'; and

(3) by adding at the end the following:

`(D) with respect to a secured claim which would otherwise

meet the description of an unsecured claim of a governmental

unit under section 507(a)(8), but for the secured status of

that claim, the holder of that claim will receive on account

of that claim, cash payments, in the same manner and over

the same period, as prescribed in subparagraph (C).'.

SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

Section 545(2) of title 11, United States Code, is amended by

inserting before the semicolon at the end the following: `, except in

any case in which a purchaser is a purchaser described in section 6323

of the Internal Revenue Code of 1986, or in any other similar

provision of State or local law'.

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

(a) PAYMENT OF TAXES REQUIRED- Section 960 of title 28, United States

Code, is amended--

(1) by inserting `(a)' before `Any'; and

(2) by adding at the end the following:

`(b) A tax under subsection (a) shall be paid on or before the due

date of the tax under applicable nonbankruptcy law, unless--

`(1) the tax is a property tax secured by a lien against property

that is abandoned within a reasonable period of time after the

lien attaches by the trustee of a bankruptcy estate under section

554 of title 11; or

`(2) payment of the tax is excused under a specific provision of

title 11.

`(c) In a case pending under chapter 7 of title 11, payment of a tax

may be deferred until final distribution is made under section 726 of

title 11, if--

`(1) the tax was not incurred by a trustee duly appointed under

chapter 7 of title 11; or

`(2) before the due date of the tax, an order of the court makes

a finding of probable insufficiency of funds of the estate to pay

in full the administrative expenses allowed under section 503(b)

of title 11 that have the same priority in distribution under

section 726(b) of title 11 as the priority of that tax.'.

(b) PAYMENT OF AD VALOREM TAXES REQUIRED- Section 503(b)(1)(B)(i) of

title 11, United States Code, is amended by inserting `whether secured

or unsecured, including property taxes for which liability is in rem,

in personam, or both,' before `except'.

(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE EXPENSE TAXES ELIMINATED-

Section 503(b)(1) of title 11, United States Code, is amended--

(1) in subparagraph (B), by striking `and' at the end;

(2) in subparagraph (C), by adding `and' at the end; and

(3) by adding at the end the following:

`(D) notwithstanding the requirements of subsection (a), a

governmental unit shall not be required to file a request for the

payment of an expense described in subparagraph (B) or (C), as a

condition of its being an allowed administrative expense;'.

(d) PAYMENT OF TAXES AND FEES AS SECURED CLAIMS- Section 506 of title

11, United States Code, is amended--

(1) in subsection (b), by inserting `or State statute' after

`agreement'; and

(2) in subsection (c), by inserting `, including the payment of

all ad valorem property taxes with respect to the property'

before the period at the end.

SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.

Section 726(a)(1) of title 11, United States Code, is amended by

striking `before the date on which the trustee commences distribution

under this section;' and inserting the following: `on or before the

earlier of--

`(A) the date that is 10 days after the mailing to creditors

of the summary of the trustee's final report; or

`(B) the date on which the trustee commences final

distribution under this section;'.

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

Section 523(a) of title 11, United States Code, as amended by this

Act, is amended--

(1) in paragraph (1)(B)--

(A) in the matter preceding clause (i), by inserting `or

equivalent report or notice,' after `a return,';

(B) in clause (i), by inserting `or given' after `filed';

and

(C) in clause (ii)--

(i) by inserting `or given' after `filed'; and

(ii) by inserting `, report, or notice' after `return';

and

(2) by adding at the end the following:

`For purposes of this subsection, the term `return' means a return

that satisfies the requirements of applicable nonbankruptcy law

(including applicable filing requirements). Such term includes a

return prepared pursuant to section

6020(a) of the Internal Revenue Code of 1986, or similar State or local

law, or a written stipulation to a judgment or a final order entered by a

nonbankruptcy tribunal, but does not include a return made pursuant to

section 6020(b) of the Internal Revenue Code of 1986, or a similar State or

local law.'.

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

Section 505(b)(2) of title 11, United States Code, as amended by this

Act, is amended by inserting `the estate,' after `misrepresentation,'.

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

(a) FILING OF PREPETITION TAX RETURNS REQUIRED FOR PLAN CONFIRMATION-

Section 1325(a) of title 11, United States Code, as amended by this

Act, is amended by adding at the end the following:

`(9) the debtor has filed all applicable Federal, State, and

local tax returns as required by section 1308.'.

(b) ADDITIONAL TIME PERMITTED FOR FILING TAX RETURNS-

(1) IN GENERAL- Subchapter I of chapter 13 of title 11, United

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

`Sec. 1308. Filing of prepetition tax returns

`(a) Not later than the day before the date on which the meeting of

the creditors is first scheduled to be held under section 341(a), if

the debtor was required to file a tax return under applicable

nonbankruptcy law, the debtor shall file with appropriate tax

authorities all tax returns for all taxable periods ending during the

4-year period ending on the date of the filing of the petition.

`(b)(1) Subject to paragraph (2), if the tax returns required by

subsection (a) have not been filed by the date on which the meeting of

creditors is first scheduled to be held under section 341(a), the

trustee may hold open that meeting for a reasonable period of time to

allow the debtor an additional period of time to file any unfiled

returns, but such additional period of time shall not extend beyond--

`(A) for any return that is past due as of the date of the filing

of the petition, the date that is 120 days after the date of that

meeting; or

`(B) for any return that is not past due as of the date of the

filing of the petition, the later of--

`(i) the date that is 120 days after the date of that

meeting; or

`(ii) the date on which the return is due under the last

automatic extension of time for filing that return to which

the debtor is entitled, and for which request is timely

made, in accordance with applicable nonbankruptcy law.

`(2) Upon notice and hearing, and order entered before the tolling of

any applicable filing period determined under this subsection, if the

debtor demonstrates by a preponderance of the evidence that the

failure to file a return as required under this subsection is

attributable to circumstances beyond the control of the debtor, the

court may extend the filing period established by the trustee under

this subsection for--

`(A) a period of not more than 30 days for returns described in

paragraph (1); and

`(B) a period not to extend after the applicable extended due

date for a return described in paragraph (2).

`(c) For purposes of this section, the term `return' includes a return

prepared pursuant to subsection (a) or (b) of section 6020 of the

Internal Revenue Code of 1986, or a similar State or local law, or a

written stipulation to a judgment or a final order entered by a

nonbankruptcy tribunal.'.

(2) CONFORMING AMENDMENT- The table of sections at the beginning

of chapter 13 of title 11, United States Code, is amended by

inserting after the item relating to section 1307 the following:

`1308. Filing of prepetition tax returns.'.

(c) DISMISSAL OR CONVERSION ON FAILURE TO COMPLY- Section 1307 of

title 11, United States Code, is amended--

(1) by redesignating subsections (e) and (f) as subsections (f)

and (g), respectively; and

(2) by inserting after subsection (d) the following:

`(e) Upon the failure of the debtor to file a tax return under section

1308, on request of a party in interest or the United States trustee

and after notice and a hearing, the court shall dismiss a case or

convert a case under this chapter to a case under chapter 7 of this

title, whichever is in the best interest of the creditors and the

estate.'.

(d) TIMELY FILED CLAIMS- Section 502(b)(9) of title 11, United States

Code, is amended by inserting before the period at the end the

following `, and except that in a case under chapter 13, a claim of a

governmental unit for a tax with respect to a return filed under

section 1308 shall be timely if the claim is filed on or before the

date that is 60 days after the date on which such return was filed as

required'.

(e) RULES FOR OBJECTIONS TO CLAIMS AND TO CONFIRMATION- It is the

sense of Congress that the Advisory Committee on Bankruptcy Rules of

the Judicial Conference of the United States should, as soon as

practicable after the date of enactment of this Act, propose for

adoption amended Federal Rules of Bankruptcy Procedure which provide

that--

(1) notwithstanding the provisions of Rule 3015(f), in cases

under chapter 13 of title 11, United States Code, an objection to

the confirmation of a plan filed by a governmental unit on or

before the date that is 60 days after the date on which the

debtor files all tax returns required under sections 1308 and

1325(a)(7) of title 11, United States Code, shall be treated for

all purposes as if such objection had been timely filed before

such confirmation; and

(2) in addition to the provisions of Rule 3007, in a case under

chapter 13 of title 11, United States Code, no objection to a tax

with respect to which a return is required to be filed under

section 1308 of title 11, United States Code, shall be filed

until such return has been filed as required.

SEC. 717. STANDARDS FOR TAX DISCLOSURE.

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

(1) by inserting `including a discussion of the potential

material Federal tax consequences of the plan to the debtor, any

successor to the debtor, and

a hypothetical investor typical of the holders of claims or interests in

the case,' after `records'; and

(2) by striking `a hypothetical reasonable investor typical of

holders of claims or interests' and inserting `such a

hypothetical investor'.

SEC. 718. SETOFF OF TAX REFUNDS.

Section 362(b) of title 11, United States Code, is amended by

inserting after paragraph (26), as added by this Act, the following:

`(27) under subsection (a), of the setoff under applicable

nonbankruptcy law of an income tax refund, by a governmental

unit, with respect to a taxable period that ended before the

order for relief against an income tax liability for a taxable

period that also ended before the order for relief, except that

in any case in which the setoff of an income tax refund is not

permitted under applicable nonbankruptcy law because of a pending

action to determine the amount or legality of a tax liability,

the governmental unit may hold the refund pending the resolution

of the action, unless the court, upon motion of the trustee and

after notice and hearing, grants the taxing authority adequate

protection (within the meaning of section 361) for the secured

claim of that authority in the setoff under section 506(a);'.

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

TAXES.

(a) IN GENERAL- Section 346 of title 11, United States Code, is

amended to read as follows:

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

taxes

`(a) Whenever the Internal Revenue Code of 1986 provides that a

separate taxable estate or entity is created in a case concerning a

debtor under this title, and the income, gain, loss, deductions, and

credits of such estate shall be taxed to or claimed by the estate, a

separate taxable estate is also created for purposes of any State and

local law imposing a tax on or measured by income and such income,

gain, loss, deductions, and credits shall be taxed to or claimed by

the estate and may not be taxed to or claimed by the debtor. The

preceding sentence shall not apply if the case is dismissed. The

trustee shall make tax returns of income required under any such State

or local law.

`(b) Whenever the Internal Revenue Code of 1986 provides that no

separate taxable estate shall be created in a case concerning a debtor

under this title, and the income, gain, loss, deductions, and credits

of an estate shall be taxed to or claimed by the debtor, such income,

gain, loss, deductions, and credits shall be taxed to or claimed by

the debtor under a State or local law imposing a tax on or measured by

income and may not be taxed to or claimed by the estate. The trustee

shall make such tax returns of income of corporations and of

partnerships as are required under any State or local law, but with

respect to partnerships, shall make said returns only to the extent

such returns are also required to be made under such Code. The estate

shall be liable for any tax imposed on such corporation or

partnership, but not for any tax imposed on partners or members.

`(c) With respect to a partnership or any entity treated as a

partnership under a State or local law imposing a tax on or measured

by income that is a debtor in a case under this title, any gain or

loss resulting from a distribution of property from such partnership,

or any distributive share of any income, gain, loss, deduction, or

credit of a partner or member that is distributed, or considered

distributed, from such partnership, after the commencement of the

case, is gain, loss, income, deduction, or credit, as the case may be,

of the partner or member, and if such partner or member is a debtor in

a case under this title, shall be subject to tax in accordance with

subsection (a) or (b).

`(d) For purposes of any State or local law imposing a tax on or

measured by income, the taxable period of a debtor in a case under

this title shall terminate only if and to the extent that the taxable

period of such debtor terminates under the Internal Revenue Code of

1986.

`(e) The estate in any case described in subsection (a) shall use the

same accounting method as the debtor used immediately before the

commencement of the case, if such method of accounting complies with

applicable nonbankruptcy tax law.

`(f) For purposes of any State or local law imposing a tax on or

measured by income, a transfer of property from the debtor to the

estate or from the estate to the debtor shall not be treated as a

disposition for purposes of any provision assigning tax consequences

to a disposition, except to the extent that such transfer is treated

as a disposition under the Internal Revenue Code of 1986.

`(g) Whenever a tax is imposed pursuant to a State or local law

imposing a tax on or measured by income pursuant to subsection (a) or

(b), such tax shall be imposed at rates generally applicable to the

same types of entities under such State or local law.

`(h) The trustee shall withhold from any payment of claims for wages,

salaries, commissions, dividends, interest, or other payments, or

collect, any amount required to be withheld or collected under

applicable State or local tax law, and shall pay such withheld or

collected amount to the appropriate governmental unit at the time and

in the manner required by such tax law, and with the same priority as

the claim from which such amount was withheld or collected was paid.

`(i)(1) To the extent that any State or local law imposing a tax on or

measured by income provides for the carryover of any tax attribute

from one taxable period to a subsequent taxable period, the estate

shall succeed to such tax attribute in any case in which such estate

is subject to tax under subsection (a).

`(2) After such a case is closed or dismissed, the debtor shall

succeed to any tax attribute to which the estate succeeded under

paragraph (1) to the extent consistent with the Internal Revenue Code

of 1986.

`(3) The estate may carry back any loss or tax attribute to a taxable

period of the debtor that ended before the order for relief under this

title to the extent that--

`(A) applicable State or local tax law provides for a carryback

in the case of the debtor; and

`(B) the same or a similar tax attribute may be carried back by

the estate to such a taxable period of the debtor under the

Internal Revenue Code of 1986.

`(j)(1) For purposes of any State or local law imposing a tax on or

measured by income, income is not realized by the estate, the debtor,

or a successor to the debtor by

reason of discharge of indebtedness in a case under this title, except to

the extent, if any, that such income is subject to tax under the Internal

Revenue Code of 1986.

`(2) Whenever the Internal Revenue Code of 1986 provides that the

amount excluded from gross income in respect of the discharge of

indebtedness in a case under this title shall be applied to reduce the

tax attributes of the debtor or the estate, a similar reduction shall

be made under any State or local law imposing a tax on or measured by

income to the extent such State or local law recognizes such

attributes. Such State or local law may also provide for the reduction

of other attributes to the extent that the full amount of income from

the discharge of indebtedness has not been applied.

`(k)(1) Except as provided in this section and section 505, the time

and manner of filing tax returns and the items of income, gain, loss,

deduction, and credit of any taxpayer shall be determined under

applicable nonbankruptcy law.

`(2) For Federal tax purposes, the provisions of this section are

subject to the Internal Revenue Code of 1986 and other applicable

Federal nonbankruptcy law.'.

(b) CONFORMING AMENDMENTS-

(1) Section 728 of title 11, United States Code, is repealed.

(2) Section 1146 of title 11, United States Code, is amended--

(A) by striking subsections (a) and (b); and

(B) by redesignating subsections (c) and (d) as subsections

(a) and (b), respectively.

(3) Section 1231 of title 11, United States Code, is amended--

(A) by striking subsections (a) and (b); and

(B) by redesignating subsections (c) and (d) as subsections

(a) and (b), respectively.

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

Section 521 of title 11, United States Code, as amended by this Act,

is amended by adding at the end the following:

`(k)(1) Notwithstanding any other provision of this title, if the

debtor fails to file a tax return that becomes due after the

commencement of the case or to properly obtain an extension of the due

date for filing such return, the taxing authority may request that the

court enter an order converting or dismissing the case.

`(2) If the debtor does not file the required return or obtain the

extension referred to in paragraph (1) within 90 days after a request

is filed by the taxing authority under that paragraph, the court shall

convert or dismiss the case, whichever is in the best interests of

creditors and the estate.'.

TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

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

(a) IN GENERAL- Title 11, United States Code, is amended by inserting

after chapter 13 the following:

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

`Sec.

`1501. Purpose and scope of application.

`SUBCHAPTER I--GENERAL PROVISIONS

`1502. Definitions.

`1503. International obligations of the United States.

`1504. Commencement of ancillary case.

`1505. Authorization to act in a foreign country.

`1506. Public policy exception.

`1507. Additional assistance.

`1508. Interpretation.

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

COURT

`1509. Right of direct access.

`1510. Limited jurisdiction.

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

`1512. Participation of a foreign representative in a case under

this title.

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

`1514. Notification to foreign creditors concerning a case under

this title.

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

`1515. Application for recognition.

`1516. Presumptions concerning recognition.

`1517. Order granting recognition.

`1518. Subsequent information.

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

recognition.

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

`1521. Relief that may be granted upon recognition.

`1522. Protection of creditors and other interested persons.

`1523. Actions to avoid acts detrimental to creditors.

`1524. Intervention by a foreign representative.

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

`1525. Cooperation and direct communication between the court and

foreign courts or foreign representatives.

`1526. Cooperation and direct communication between the trustee

and foreign courts or foreign representatives.

`1527. Forms of cooperation.

`SUBCHAPTER V--CONCURRENT PROCEEDINGS

`1528. Commencement of a case under this title after recognition

of a foreign main proceeding.

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

proceeding.

`1530. Coordination of more than 1 foreign proceeding.

`1531. Presumption of insolvency based on recognition of a

foreign main proceeding.

`1532. Rule of payment in concurrent proceedings.

`Sec. 1501. Purpose and scope of application

`(a) The purpose of this chapter is to incorporate the Model Law on

Cross-Border Insolvency so as to provide effective mechanisms for

dealing with cases of cross-border insolvency with the objectives of--

`(1) cooperation between--

`(A) United States courts, United States trustees, trustees,

examiners, debtors, and debtors in possession; and

`(B) the courts and other competent authorities of foreign

countries involved in cross-border insolvency cases;

`(2) greater legal certainty for trade and investment;

`(3) fair and efficient administration of cross-border

insolvencies that protects the interests of all creditors, and

other interested entities, including the debtor;

`(4) protection and maximization of the value of the debtor's

assets; and

`(5) facilitation of the rescue of financially troubled

businesses, thereby protecting investment and preserving

employment.

`(b) This chapter applies where--

`(1) assistance is sought in the United States by a foreign court

or a foreign representative in connection with a foreign

proceeding;

`(2) assistance is sought in a foreign country in connection with

a case under this title;

`(3) a foreign proceeding and a case under this title with

respect to the same debtor are taking place concurrently; or

`(4) creditors or other interested persons in a foreign country

have an interest in requesting the commencement of, or

participating in, a case or proceeding under this title.

`(c) This chapter does not apply to--

`(1) a proceeding concerning an entity, other than a foreign

insurance company, identified by exclusion in section 109(b);

`(2) an individual, or to an individual and such individual's

spouse, who have debts within the limits specified in section

109(e) and who are citizens of the United States or aliens

lawfully admitted for permanent residence in the United States;

or

`(3) an entity subject to a proceeding under the Securities

Investor Protection Act of 1970, a stockbroker subject to

subchapter III of chapter 7 of this title, or a commodity broker

subject to subchapter IV of chapter 7 of this title.

`(d) The court may not grant relief under this chapter with respect to

any deposit, escrow, trust fund, or other security required or

permitted under any applicable State insurance law or regulation for

the benefit of claim holders in the United States.

`SUBCHAPTER I--GENERAL PROVISIONS

`Sec. 1502. Definitions

`For the purposes of this chapter, the term--

`(1) `debtor' means an entity that is the subject of a foreign

proceeding;

`(2) `establishment' means any place of operations where the

debtor carries out a nontransitory economic activity;

`(3) `foreign court' means a judicial or other authority

competent to control or supervise a foreign proceeding;

`(4) `foreign main proceeding' means a foreign proceeding taking

place in the country where the debtor has the center of its main

interests;

`(5) `foreign nonmain proceeding' means a foreign proceeding,

other than a foreign main proceeding, taking place in a country

where the debtor has an establishment;

`(6) `trustee' includes a trustee, a debtor in possession in a

case under any chapter of this title, or a debtor under chapter 9

of this title;

`(7) `recognition' means the entry of an order granting

recognition of a foreign main proceeding or foreign nonmain

proceeding under this chapter; and

`(8) `within the territorial jurisdiction of the United States',

when used with reference to property of a debtor, refers to

tangible property located within the territory of the United

States and intangible property deemed under applicable

nonbankruptcy law to be located within that territory, including

any property subject to attachment or garnishment that may

properly be seized or garnished by an action in a Federal or

State court in the United States.

`Sec. 1503. International obligations of the United States

`To the extent that this chapter conflicts with an obligation of the

United States arising out of any treaty or other form of agreement to

which it is a party with one or more other countries, the requirements

of the treaty or agreement prevail.

`Sec. 1504. Commencement of ancillary case

`A case under this chapter is commenced by the filing of a petition

for recognition of a foreign proceeding under section 1515.

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

`A trustee or another entity (including an examiner) may be authorized

by the court to act in a foreign country on behalf of an estate

created under section 541. An entity authorized to act under this

section may act in any way permitted by the applicable foreign law.

`Sec. 1506. Public policy exception

`Nothing in this chapter prevents the court from refusing to take an

action governed by this chapter if the action would be manifestly

contrary to the public policy of the United States.

`Sec. 1507. Additional assistance

`(a) Subject to the specific limitations stated elsewhere in this

chapter the court, if recognition is granted, may provide additional

assistance to a foreign representative under this title or under other

laws of the United States.

`(b) In determining whether to provide additional assistance under

this title or under other laws of the United States, the court shall

consider whether such additional assistance, consistent with the

principles of comity, will reasonably assure--

`(1) just treatment of all holders of claims against or interests

in the debtor's property;

`(2) protection of claim holders in the United States against

prejudice and inconvenience in the processing of claims in such

foreign proceeding;

`(3) prevention of preferential or fraudulent dispositions of

property of the debtor;

`(4) distribution of proceeds of the debtor's property

substantially in accordance with the order prescribed by this

title; and

`(5) if appropriate, the provision of an opportunity for a fresh

start for the individual that such foreign proceeding concerns.

`Sec. 1508. Interpretation

`In interpreting this chapter, the court shall consider its

international origin, and the need to promote an application of this

chapter that is consistent with the application of similar statutes

adopted by foreign jurisdictions.

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

COURT

`Sec. 1509. Right of direct access

`(a) A foreign representative may commence a case under section 1504

by filing directly with the court a petition for recognition of a

foreign proceeding under section 1515.

`(b) If the court grants recognition under section 1515, and subject

to any limitations that the court may impose consistent with the

policy of this chapter--

`(1) the foreign representative has the capacity to sue and be

sued in a court in the United States;

`(2) the foreign representative may apply directly to a court in

the United States for appropriate relief in that court; and

`(3) a court in the United States shall grant comity or

cooperation to the foreign representative.

`(c) A request for comity or cooperation by a foreign representative

in a court in the United States other than the court which granted

recognition shall be accompanied

by a certified copy of an order granting recognition under section 1517.

`(d) If the court denies recognition under this chapter, the court may

issue any appropriate order necessary to prevent the foreign

representative from obtaining comity or cooperation from courts in the

United States.

`(e) Whether or not the court grants recognition, and subject to

sections 306 and 1510, a foreign representative is subject to

applicable nonbankruptcy law.

`(f) Notwithstanding any other provision of this section, the failure

of a foreign representative to commence a case or to obtain

recognition under this chapter does not affect any right the foreign

representative may have to sue in a court in the United States to

collect or recover a claim which is the property of the debtor.

`Sec. 1510. Limited jurisdiction

`The sole fact that a foreign representative files a petition under

section 1515 does not subject the foreign representative to the

jurisdiction of any court in the United States for any other purpose.

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

`(a) Upon recognition, a foreign representative may commence--

`(1) an involuntary case under section 303; or

`(2) a voluntary case under section 301 or 302, if the foreign

proceeding is a foreign main proceeding.

`(b) The petition commencing a case under subsection (a) must be

accompanied by a certified copy of an order granting recognition. The

court where the petition for recognition has been filed must be

advised of the foreign representative's intent to commence a case

under subsection (a) prior to such commencement.

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

title

`Upon recognition of a foreign proceeding, the foreign representative

in the recognized proceeding is entitled to participate as a party in

interest in a case regarding the debtor under this title.

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

`(a) Foreign creditors have the same rights regarding the commencement

of, and participation in, a case under this title as domestic

creditors.

`(b)(1) Subsection (a) does not change or codify present law as to the

priority of claims under section 507 or 726 of this title, except that

the claim of a foreign creditor under those sections shall not be

given a lower priority than that of general unsecured claims without

priority solely because the holder of such claim is a foreign

creditor.

`(2)(A) Subsection (a) and paragraph (1) do not change or codify

present law as to the allowability of foreign revenue claims or other

foreign public law claims in a proceeding under this title.

`(B) Allowance and priority as to a foreign tax claim or other foreign

public law claim shall be governed by any applicable tax treaty of the

United States, under the conditions and circumstances specified

therein.

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

title

`(a) Whenever in a case under this title notice is to be given to

creditors generally or to any class or category of creditors, such

notice shall also be given to the known creditors generally, or to

creditors in the notified class or category, that do not have

addresses in the United States. The court may order that appropriate

steps be taken with a view to notifying any creditor whose address is

not yet known.

`(b) Such notification to creditors with foreign addresses described

in subsection (a) shall be given individually, unless the court

considers that, under the circumstances, some other form of

notification would be more appropriate. No letter or other formality

is required.

`(c) When a notification of commencement of a case is to be given to

foreign creditors, the notification shall--

`(1) indicate the time period for filing proofs of claim and

specify the place for their filing;

`(2) indicate whether secured creditors need to file their proofs

of claim; and

`(3) contain any other information required to be included in

such a notification to creditors under this title and the orders

of the court.

`(d) Any rule of procedure or order of the court as to notice or the

filing of a claim shall provide such additional time to creditors with

foreign addresses as is reasonable under the circumstances.

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

`Sec. 1515. Application for recognition

`(a) A foreign representative applies to the court for recognition of

the foreign proceeding in which the foreign representative has been

appointed by filing a petition for recognition.

`(b) A petition for recognition shall be accompanied by--

`(1) a certified copy of the decision commencing the foreign

proceeding and appointing the foreign representative;

`(2) a certificate from the foreign court affirming the existence

of the foreign proceeding and of the appointment of the foreign

representative; or

`(3) in the absence of evidence referred to in paragraphs (1) and

(2), any other evidence acceptable to the court of the existence

of the foreign proceeding and of the appointment of the foreign

representative.

`(c) A petition for recognition shall also be accompanied by a

statement identifying all foreign proceedings with respect to the

debtor that are known to the foreign representative.

`(d) The documents referred to in paragraphs (1) and (2) of subsection

(b) shall be translated into English. The court may require a

translation into English of additional documents.

`Sec. 1516. Presumptions concerning recognition

`(a) If the decision or certificate referred to in section 1515(b)

indicates that the foreign proceeding is a foreign proceeding (as

defined in section 101) and that the person or body is a foreign

representative (as defined in section 101), the court is entitled to

so presume.

`(b) The court is entitled to presume that documents submitted in

support of the petition for recognition are authentic, whether or not

they have been legalized.

`(c) In the absence of evidence to the contrary, the debtor's

registered office, or habitual residence in the case of an individual,

is presumed to be the center of the debtor's main interests.

`Sec. 1517. Order granting recognition

`(a) Subject to section 1506, after notice and a hearing, an order

recognizing a foreign proceeding shall be entered if--

`(1) the foreign proceeding for which recognition is sought is a

foreign main proceeding or foreign nonmain proceeding within the

meaning of section 1502;

`(2) the foreign representative applying for recognition is a

person or body as defined in section 101; and

`(3) the petition meets the requirements of section 1515.

`(b) The foreign proceeding shall be recognized--

`(1) as a foreign main proceeding if it is taking place in the

country where the debtor has the center of its main interests; or

`(2) as a foreign nonmain proceeding if the debtor has an

establishment within the meaning of section 1502 in the foreign

country where the proceeding is pending.

`(c) A petition for recognition of a foreign proceeding shall be

decided upon at the earliest possible time. Entry of an order

recognizing a foreign proceeding constitutes recognition under this

chapter.

`(d) The provisions of this subchapter do not prevent modification or

termination of recognition if it is shown that the grounds for

granting it were fully or partially lacking or have ceased to exist,

but in considering such action the court shall give due weight to

possible prejudice to parties that have relied upon the order granting

recognition. The case under this chapter may be closed in the manner

prescribed under section 350.

`Sec. 1518. Subsequent information

`From the time of filing the petition for recognition of the foreign

proceeding, the foreign representative shall file with the court

promptly a notice of change of status concerning--

`(1) any substantial change in the status of the foreign

proceeding or the status of the foreign representative's

appointment; and

`(2) any other foreign proceeding regarding the debtor that

becomes known to the foreign representative.

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

`(a) From the time of filing a petition for recognition until the

court rules on the petition, the court may, at the request of the

foreign representative, where relief is urgently needed to protect the

assets of the debtor or the interests of the creditors, grant relief

of a provisional nature, including--

`(1) staying execution against the debtor's assets;

`(2) entrusting the administration or realization of all or part

of the debtor's assets located in the United States to the

foreign representative or another person authorized by the court,

including an examiner, in order to protect and preserve the value

of assets that, by their nature or because of other

circumstances, are perishable, susceptible to devaluation or

otherwise in jeopardy; and

`(3) any relief referred to in paragraph (3), (4), or (7) of

section 1521(a).

`(b) Unless extended under section 1521(a)(6), the relief granted

under this section terminates when the petition for recognition is

granted.

`(c) It is a ground for denial of relief under this section that such

relief would interfere with the administration of a foreign main

proceeding.

`(d) The court may not enjoin a police or regulatory act of a

governmental unit, including a criminal action or proceeding, under

this section.

`(e) The standards, procedures, and limitations applicable to an

injunction shall apply to relief under this section.

`(f) The exercise of rights not subject to the stay arising under

section 362(a) pursuant to paragraph (6), (7), (17), or (28) of

section 362(b) or pursuant to section 362(l) shall not be stayed by

any order of a court or administrative agency in any proceeding under

this chapter.

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

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

proceeding--

`(1) sections 361 and 362 apply with respect to the debtor and

that property of the debtor that is within the territorial

jurisdiction of the United States;

`(2) sections 363, 549, and 552 of this title apply to a transfer

of an interest of the debtor in property that is within the

territorial jurisdiction of the United States to the same extent

that the sections would apply to property of an estate;

`(3) unless the court orders otherwise, the foreign

representative may operate the debtor's business and may exercise

the rights and powers of a trustee under and to the extent

provided by sections 363 and 552; and

`(4) section 552 applies to property of the debtor that is within

the territorial jurisdiction of the United States.

`(b) Subsection (a) does not affect the right to commence an

individual action or proceeding in a foreign country to the extent

necessary to preserve a claim against the debtor.

`(c) Subsection (a) does not affect the right of a foreign

representative or an entity to file a petition commencing a case under

this title or the right of any party to file claims or take other

proper actions in such a case.

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

`(a) Upon recognition of a foreign proceeding, whether main or

nonmain, where necessary to effectuate the purpose of this chapter and

to protect the assets of the

debtor or the interests of the creditors, the court may, at the request of

the foreign representative, grant any appropriate relief, including--

`(1) staying the commencement or continuation of an individual

action or proceeding concerning the

debtor's assets, rights, obligations or liabilities to the extent they have

not been stayed under section 1520(a);

`(2) staying execution against the debtor's assets to the extent

it has not been stayed under section 1520(a);

`(3) suspending the right to transfer, encumber or otherwise

dispose of any assets of the debtor to the extent this right has

not been suspended under section 1520(a);

`(4) providing for the examination of witnesses, the taking of

evidence or the delivery of information concerning the debtor's

assets, affairs, rights, obligations or liabilities;

`(5) entrusting the administration or realization of all or part

of the debtor's assets within the territorial jurisdiction of the

United States to the foreign representative or another person,

including an examiner, authorized by the court;

`(6) extending relief granted under section 1519(a); and

`(7) granting any additional relief that may be available to a

trustee, except for relief available under sections 522, 544,

545, 547, 548, 550, and 724(a).

`(b) Upon recognition of a foreign proceeding, whether main or

nonmain, the court may, at the request of the foreign representative,

entrust the distribution of all or part of the debtor's assets located

in the United States to the foreign representative or another person,

including an examiner, authorized by the court, provided that the

court is satisfied that the interests of creditors in the United

States are sufficiently protected.

`(c) In granting relief under this section to a representative of a

foreign nonmain proceeding, the court must be satisfied that the

relief relates to assets that, under the law of the United States,

should be administered in the foreign nonmain proceeding or concerns

information required in that proceeding.

`(d) The court may not enjoin a police or regulatory act of a

governmental unit, including a criminal action or proceeding, under

this section.

`(e) The standards, procedures, and limitations applicable to an

injunction shall apply to relief under paragraphs (1), (2), (3), and

(6) of subsection (a).

`(f) The exercise of rights not subject to the stay arising under

section 362(a) pursuant to paragraph (6), (7), (17), or (28) of

section 362(b) or pursuant to section 362(l) shall not be stayed by

any order of a court or administrative agency in any proceeding under

this chapter.

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

`(a) The court may grant relief under section 1519 or 1521, or may

modify or terminate relief under subsection (c), only if the interests

of the creditors and other interested entities, including the debtor,

are sufficiently protected.

`(b) The court may subject relief granted under section 1519 or 1521,

or the operation of the debtor's business under section 1520(a)(3) of

this title, to conditions it considers appropriate, including the

giving of security or the filing of a bond.

`(c) The court may, at the request of the foreign representative or an

entity affected by relief granted under section 1519 or 1521, or at

its own motion, modify or terminate such relief.

`(d) Section 1104(d) shall apply to the appointment of an examiner

under this chapter. Any examiner shall comply with the qualification

requirements imposed on a trustee by section 322.

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

`(a) Upon recognition of a foreign proceeding, the foreign

representative has standing in a case concerning the debtor pending

under another chapter of this title to initiate actions under sections

522, 544, 545, 547, 548, 550, 553, and 724(a).

`(b) When the foreign proceeding is a foreign nonmain proceeding, the

court must be satisfied that an action under subsection (a) relates to

assets that, under United States law, should be administered in the

foreign nonmain proceeding.

`Sec. 1524. Intervention by a foreign representative

`Upon recognition of a foreign proceeding, the foreign representative

may intervene in any proceedings in a State or Federal court in the

United States in which the debtor is a party.

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

`Sec. 1525. Cooperation and direct communication between the court and

foreign courts or foreign representatives

`(a) Consistent with section 1501, the court shall cooperate to the

maximum extent possible with foreign courts or foreign

representatives, either directly or through the trustee.

`(b) The court is entitled to communicate directly with, or to request

information or assistance directly from, foreign courts or foreign

representatives, subject to the rights of parties in interest to

notice and participation.

`Sec. 1526. Cooperation and direct communication between the trustee and

foreign courts or foreign representatives

`(a) Consistent with section 1501, the trustee or other person,

including an examiner, authorized by the court, shall, subject to the

supervision of the court, cooperate to the maximum extent possible

with foreign courts or foreign representatives.

`(b) The trustee or other person, including an examiner, authorized by

the court is entitled, subject to the supervision of the court, to

communicate directly with foreign courts or foreign representatives.

`Sec. 1527. Forms of cooperation

`Cooperation referred to in sections 1525 and 1526 may be implemented

by any appropriate means, including--

`(1) appointment of a person or body, including an examiner, to

act at the direction of the court;

`(2) communication of information by any means considered

appropriate by the court;

`(3) coordination of the administration and supervision of the

debtor's assets and affairs;

`(4) approval or implementation of agreements concerning the

coordination of proceedings; and

`(5) coordination of concurrent proceedings regarding the same

debtor.

`SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

foreign main proceeding

`After recognition of a foreign main proceeding, a case under another

chapter of this title may be commenced only if the debtor has assets

in the United States. The effects of such case shall be restricted to

the assets of the debtor that are within the territorial jurisdiction

of the United States and, to the extent necessary to implement

cooperation and coordination under sections 1525, 1526, and 1527, to

other assets of the debtor that are within the jurisdiction of the

court under sections 541(a) of this title, and 1334(e) of title 28, to

the extent that such other assets are not subject to the jurisdiction

and control of a foreign proceeding that has been recognized under

this chapter.

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

proceeding

`If a foreign proceeding and a case under another chapter of this

title are taking place concurrently regarding the same debtor, the

court shall seek cooperation and coordination under sections 1525,

1526, and 1527, and the following shall apply:

`(1) If the case in the United States is taking place at the time

the petition for recognition of the foreign proceeding is filed--

`(A) any relief granted under sections 1519 or 1521 must be

consistent with the relief granted in the case in the United

States; and

`(B) even if the foreign proceeding is recognized as a

foreign main proceeding, section 1520 does not apply.

`(2) If a case in the United States under this title commences

after recognition, or after the filing of the petition for

recognition, of the foreign proceeding--

`(A) any relief in effect under sections 1519 or 1521 shall

be reviewed by the court and shall be modified or terminated

if inconsistent with the case in the United States; and

`(B) if the foreign proceeding is a foreign main proceeding,

the stay and suspension referred to in section 1520(a) shall

be modified or terminated if inconsistent with the relief

granted in the case in the United States.

`(3) In granting, extending, or modifying relief granted to a

representative of a foreign nonmain proceeding, the court must be

satisfied that the relief relates to assets that, under the laws

of the United States, should be administered in the foreign

nonmain proceeding or concerns information required in that

proceeding.

`(4) In achieving cooperation and coordination under sections

1528 and 1529, the court may grant any of the relief authorized

under section 305.

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

`In matters referred to in section 1501, with respect to more than 1

foreign proceeding regarding the debtor, the court shall seek

cooperation and coordination under sections 1525, 1526, and 1527, and

the following shall apply:

`(1) Any relief granted under section 1519 or 1521 to a

representative of a foreign nonmain proceeding after recognition

of a foreign main proceeding must be consistent with the foreign

main proceeding.

`(2) If a foreign main proceeding is recognized after

recognition, or after the filing of a petition for recognition,

of a foreign nonmain proceeding, any relief in effect under

section 1519 or 1521 shall be reviewed by the court and shall be

modified or terminated if inconsistent with the foreign main

proceeding.

`(3) If, after recognition of a foreign nonmain proceeding,

another foreign nonmain proceeding is recognized, the court shall

grant, modify, or terminate relief for the purpose of

facilitating coordination of the proceedings.

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

main proceeding

`In the absence of evidence to the contrary, recognition of a foreign

main proceeding is, for the purpose of commencing a proceeding under

section 303, proof that the debtor is generally not paying its debts

as such debts become due.

`Sec. 1532. Rule of payment in concurrent proceedings

`Without prejudice to secured claims or rights in rem, a creditor who

has received payment with respect to its claim in a foreign proceeding

pursuant to a law relating to insolvency may not receive a payment for

the same claim in a case under any other chapter of this title

regarding the debtor, so long as the payment to other creditors of the

same class is proportionately less than the payment the creditor has

already received.'.

(b) CLERICAL AMENDMENT- The table of chapters for title 11, United

States Code, is amended by inserting after the item relating to

chapter 13 the following:

1501'.

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

(a) APPLICABILITY OF CHAPTERS- Section 103 of title 11, United States

Code, is amended--

(1) in subsection (a), by inserting before the period the

following: `, and this chapter, sections 307, 362(l), 555 through

557, and 559 through 562 apply in a case under chapter 15'; and

(2) by adding at the end the following:

`(j) Chapter 15 applies only in a case under such chapter, except

that--

`(1) sections 1505, 1513, and 1514 apply in all cases under this

title; and

`(2) section 1509 applies whether or not a case under this title

is pending.'.

(b) DEFINITIONS- Section 101 of title 11, United States Code, is

amended by striking paragraphs (23) and (24) and inserting the

following:

`(23) `foreign proceeding' means a collective judicial or

administrative proceeding in a foreign country, including an

interim proceeding, under a law relating to insolvency or

adjustment of debt in which

proceeding the assets and affairs of the debtor are subject to control or

supervision by a foreign court, for the purpose of reorganization or

liquidation;

`(24) `foreign representative' means a person or body, including

a person or body appointed on an interim basis, authorized in a

foreign proceeding to administer the reorganization or the

liquidation of the debtor's assets or affairs or to act as a

representative of the foreign proceeding;'.

(c) AMENDMENTS TO TITLE 28, UNITED STATES CODE-

(1) PROCEDURES- Section 157(b)(2) of title 28, United States

Code, is amended--

(A) in subparagraph (N), by striking `and' at the end;

(B) in subparagraph (O), by striking the period at the end

and inserting `; and'; and

(C) by adding at the end the following:

`(P) recognition of foreign proceedings and other matters under

chapter 15 of title 11.'.

(2) BANKRUPTCY CASES AND PROCEEDINGS- Section 1334(c) of title

28, United States Code, is amended by striking `Nothing in' and

inserting `Except with respect to a case under chapter 15 of

title 11, nothing in'.

(3) DUTIES OF TRUSTEES- Section 586(a)(3) of title 28, United

States Code, is amended by striking `or 13' and inserting `13, or

15,'.

(4) VENUE OF CASES ANCILLARY TO FOREIGN PROCEEDINGS- Section 1410

of title 28, United States Code, is amended to read as follows:

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

`A case under chapter 15 of title 11 may be commenced in the district

court for the district--

`(1) in which the debtor has its principal place of business or

principal assets in the United States;

`(2) if the debtor does not have a place of business or assets in

the United States, in which there is pending against the debtor

an action or proceeding in a Federal or State court; or

`(3) in a case other than those specified in paragraph (1) or

(2), in which venue will be consistent with the interests of

justice and the convenience of the parties, having regard to the

relief sought by the foreign representative.'.

(d) OTHER SECTIONS OF TITLE 11-

(1) Section 109(b)(3) of title 11, United States Code, is amended

to read as follows:

`(3)(A) a foreign insurance company, engaged in such business in

the United States; or

`(B) a foreign bank, savings bank, cooperative bank, savings and

loan association, building and loan association, or credit union,

that has a branch or agency (as defined in section 1(b) of the

International Banking Act of 1978 (12 U.S.C. 3101) in the United

States.'.

(2) Section 303(k) of title 11, United States Code, is repealed.

(3)(A) Section 304 of title 11, United States Code, is repealed.

(B) The table of sections at the beginning of chapter 3 of title

11, United States Code, is amended by striking the item relating

to section 304.

(C) Section 306 of title 11, United States Code, is amended by

striking `, 304,' each place it appears.

(4) Section 305(a)(2) of title 11, United States Code, is amended

to read as follows:

`(2)(A) a petition under section 1515 of this title for

recognition of a foreign proceeding has been granted; and

`(B) the purposes of chapter 15 of this title would be best

served by such dismissal or suspension.'.

(5) Section 508 of title 11, United States Code, is amended--

(A) by striking subsection (a); and

(B) in subsection (b), by striking `(b)'.

TITLE IX--FINANCIAL CONTRACT PROVISIONS

SEC. 901. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR RECEIVERS OF

INSURED DEPOSITORY INSTITUTIONS.

(a) DEFINITION OF QUALIFIED FINANCIAL CONTRACT- Section 11(e)(8)(D)(i)

of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(i)) is

amended by inserting `, resolution, or order' after `any similar

agreement that the Corporation determines by regulation'.

(b) DEFINITION OF SECURITIES CONTRACT- Section 11(e)(8)(D)(ii) of the

Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is amended

to read as follows:

`(ii) SECURITIES CONTRACT- The term `securities

contract'--

`(I) means a contract for the purchase, sale, or

loan of a security, a certificate of deposit, a

mortgage loan, or any interest in a mortgage loan,

a group or index of securities, certificates of

deposit, or mortgage loans or interests therein

(including any interest therein or based on the

value thereof) or any option on any of the

foregoing, including any option to purchase or

sell any such security, certificate of deposit,

loan, interest, group or index, or option;

`(II) does not include any purchase, sale, or

repurchase obligation under a participation in a

commercial mortgage loan unless the Corporation

determines by regulation, resolution, or order to

include any such agreement within the meaning of

such term;

`(III) means any option entered into on a national

securities exchange relating to foreign

currencies;

`(IV) means the guarantee by or to any securities

clearing agency of any settlement of cash,

securities, certificates of deposit, mortgage

loans or interests therein, group or index of

securities, certificates of deposit, or mortgage

loans or interests therein (including any interest

therein or based on the value thereof) or option

on any of the foregoing, including any option to

purchase or sell any such security, certificate of

deposit, loan, interest, group or index or option;

`(V) means any margin loan;

`(VI) means any other agreement or transaction

that is similar to any agreement or transaction

referred to in this clause;

`(VII) means any combination of the agreements or

transactions referred to in this clause;

`(VIII) means any option to enter into any

agreement or transaction referred to in this

clause;

`(IX) means a master agreement that provides for

an agreement or transaction referred to in

subclause (I), (III), (IV), (V), (VI), (VII), or

(VIII), together with all supplements to any such master agreement, without

regard to whether the master agreement provides for an agreement or

transaction that is not a securities contract under this clause, except

that the master agreement shall be considered to be a securities contract

under this clause only with respect to each agreement or transaction under

the master agreement that is referred to in subclause (I), (III), (IV),

(V), (VI), (VII), or (VIII); and

`(X) means any security agreement or arrangement

or other credit enhancement related to any

agreement or transaction referred to in this

clause.'.

(c) DEFINITION OF COMMODITY CONTRACT- Section 11(e)(8)(D)(iii) of the

Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iii)) is

amended to read as follows:

`(iii) COMMODITY CONTRACT- The term `commodity

contract' means--

`(I) with respect to a futures commission

merchant, a contract for the purchase or sale of a

commodity for future delivery on, or subject to

the rules of, a contract market or board of trade;

`(II) with respect to a foreign futures commission

merchant, a foreign future;

`(III) with respect to a leverage transaction

merchant, a leverage transaction;

`(IV) with respect to a clearing organization, a

contract for the purchase or sale of a commodity

for future delivery on, or subject to the rules

of, a contract market or board of trade that is

cleared by such clearing organization, or

commodity option traded on, or subject to the

rules of, a contract market or board of trade that

is cleared by such clearing organization;

`(V) with respect to a commodity options dealer, a

commodity option;

`(VI) any other agreement or transaction that is

similar to any agreement or transaction referred

to in this clause;

`(VII) any combination of the agreements or

transactions referred to in this clause;

`(VIII) any option to enter into any agreement or

transaction referred to in this clause;

`(IX) a master agreement that provides for an

agreement or transaction referred to in subclause

(I), (II), (III), (IV), (V), (VI), (VII), or

(VIII), together with all supplements to any such

master agreement, without regard to whether the

master agreement provides for an agreement or

transaction that is not a commodity contract under

this clause, except that the master agreement

shall be considered to be a commodity contract

under this clause only with respect to each

agreement or transaction under the master

agreement that is referred to in subclause (I),

(II), (III), (IV), (V), (VI), (VII), or (VIII); or

`(X) any security agreement or arrangement or

other credit enhancement related to any agreement

or transaction referred to in this clause.'.

(d) DEFINITION OF FORWARD CONTRACT- Section 11(e)(8)(D)(iv) of the

Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iv)) is amended

to read as follows:

`(iv) FORWARD CONTRACT- The term `forward contract'

means--

`(I) a contract (other than a commodity contract)

for the purchase, sale, or transfer of a commodity

or any similar good, article, service, right, or

interest which is presently or in the future

becomes the subject of dealing in the forward

contract trade, or product or byproduct thereof,

with a maturity date more than 2 days after the

date the contract is entered into, including, a

repurchase transaction, reverse repurchase

transaction, consignment, lease, swap, hedge

transaction, deposit, loan, option, allocated

transaction, unallocated transaction, or any other

similar agreement;

`(II) any combination of agreements or

transactions referred to in subclauses (I) and

(III);

`(III) any option to enter into any agreement or

transaction referred to in subclause (I) or (II);

`(IV) a master agreement that provides for an

agreement or transaction referred to in subclauses

(I), (II), or (III), together with all supplements

to any such master agreement, without regard to

whether the master agreement provides for an

agreement or transaction that is not a forward

contract under this clause, except that the master

agreement shall be considered to be a forward

contract under this clause only with respect to

each agreement or transaction under the

master agreement that is referred to in subclause (I), (II), or (III); or

`(V) any security agreement or arrangement or

other credit enhancement related to any agreement

or transaction referred to in subclause (I), (II),

(III), or (IV).'.

(e) DEFINITION OF REPURCHASE AGREEMENT- Section 11(e)(8)(D)(v) of the

Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(v)) is amended

to read as follows:

`(v) REPURCHASE AGREEMENT- The term `repurchase

agreement' (which definition also applies to a reverse

repurchase agreement)--

`(I) means an agreement, including related terms,

which provides for the transfer of one or more

certificates of deposit, mortgage-related

securities (as such term is defined in the

Securities Exchange Act of 1934), mortgage loans,

interests in mortgage-related securities or

mortgage loans, eligible bankers' acceptances,

qualified foreign government securities or

securities that are direct obligations of, or that

are fully guaranteed by, the United States or any

agency of the United States against the transfer

of funds by the transferee of such certificates of

deposit, eligible bankers' acceptances,

securities, loans, or interests with a

simultaneous agreement by such transferee to

transfer to the transferor thereof certificates of

deposit, eligible bankers' acceptances,

securities, loans, or interests as described

above, at a date certain not later than 1 year

after such transfers or on demand, against the

transfer of funds, or any other similar agreement;

`(II) does not include any repurchase obligation

under a participation in a commercial mortgage

loan unless the Corporation determines by

regulation, resolution, or order to include any

such participation within the meaning of such

term;

`(III) means any combination of agreements or

transactions referred to in subclauses (I) and

(IV);

`(IV) means any option to enter into any agreement

or transaction referred to in subclause (I) or

(III);

`(V) means a master agreement that provides for an

agreement or transaction referred to in subclause

(I), (III), or (IV), together with all supplements

to any such master agreement, without regard to

whether the master agreement provides for an

agreement or transaction that is not a repurchase

agreement under this clause, except that the

master agreement shall be considered to be a

repurchase agreement under this subclause only

with respect to each agreement or transaction

under the master agreement that is referred to in

subclause (I), (III), or (IV); and

`(VI) means any security agreement or arrangement

or other credit enhancement related to any

agreement or transaction referred to in subclause

(I), (III), (IV), or (V).

For purposes of this clause, the term `qualified

foreign government security' means a security that is a

direct obligation of, or that is fully guaranteed by,

the central government of a member of the Organization

for Economic Cooperation and Development (as determined

by regulation or order adopted by the appropriate

Federal banking authority).'.

(f) DEFINITION OF SWAP AGREEMENT- Section 11(e)(8)(D)(vi) of the

Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is amended

to read as follows:

`(vi) SWAP AGREEMENT- The term `swap agreement' means--

`(I) any agreement, including the terms and

conditions incorporated by reference in any such

agreement, which is an interest rate swap, option,

future, or forward agreement, including a rate

floor, rate cap, rate collar, cross-currency rate

swap, and basis swap; a spot, same day-tomorrow,

tomorrow-next, forward, or other foreign exchange

or precious metals agreement; a currency swap,

option, future, or forward agreement; an equity

index or equity swap, option, future, or forward

agreement; a debt index or debt swap, option,

future, or forward agreement; a credit spread or

credit swap, option, future, or forward agreement;

a commodity index or commodity swap, option,

future, or forward agreement; or a weather swap,

weather derivative, or weather option;

`(II) any agreement or transaction similar to any

other agreement or transaction referred to in this

clause that is presently, or in the future

becomes, regularly entered into in the swap market

(including terms and conditions incorporated by

reference in such agreement) and that is a

forward, swap, future, or option on one or more

rates, currencies, commodities, equity securities

or other equity instruments, debt securities or

other debt instruments, or economic indices or

measures of economic risk or value;

`(III) any combination of agreements or

transactions referred to in this clause;

`(IV) any option to enter into any agreement or

transaction referred to in this clause;

`(V) a master agreement that provides for an

agreement or transaction referred to in subclause

(I), (II), (III), or (IV), together with all

supplements to any such master agreement, without

regard to whether the master agreement contains an

agreement or transaction that is not a swap

agreement under this clause, except that the

master agreement shall be considered to be a swap

agreement under this clause only with respect to

each agreement or transaction under the master

agreement that is referred to in subclause (I),

(II), (III), or (IV); and

`(VI) any security agreement or arrangement or

other credit enhancement related to any agreements

or transactions referred to in subparagraph (I),

(II), (III), (IV), or (V).

Such term is applicable for purposes of this title only

and shall not be construed or applied so as to

challenge or affect the characterization, definition,

or treatment of any swap agreement under any other

statute, regulation, or rule, including the Securities

Act of 1933, the Securities Exchange Act of 1934, the

Public Utility Holding Company Act of 1935, the Trust

Indenture Act of 1939, the Investment Company Act of

1940, the Investment Advisers Act of 1940, the

Securities Investor Protection Act of 1970, the

Commodity Exchange Act, and the regulations promulgated

by the Securities and Exchange Commission or the

Commodity Futures Trading Commission.'.

(g) DEFINITION OF TRANSFER- Section 11(e)(8)(D)(viii) of the Federal

Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(viii)) is amended to

read as follows:

`(viii) TRANSFER- The term `transfer' means every mode,

direct or indirect, absolute or conditional, voluntary

or involuntary, of disposing of or parting with

property or with an interest in property, including

retention of title as a security interest and

foreclosure of the depository institutions's equity of

redemption.'.

(h) TREATMENT OF QUALIFIED FINANCIAL CONTRACTS- Section 11(e)(8) of

the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is amended--

(1) in subparagraph (A)--

(A) by striking `paragraph (10)' and inserting `paragraphs

(9) and (10)';

(B) in clause (i), by striking `to cause the termination or

liquidation' and inserting `such person has to cause the

termination, liquidation, or acceleration'; and

(C) by striking clause (ii) and inserting the following:

`(ii) any right under any security agreement or

arrangement or other credit enhancement related to one

or more qualified financial contracts described in

clause (i);'; and

(2) in subparagraph (E), by striking clause (ii) and inserting

the following:

`(ii) any right under any security agreement or

arrangement or other credit enhancement related to one

or more qualified financial contracts described in

clause (i);'.

(i) AVOIDANCE OF TRANSFERS- Section 11(e)(8)(C)(i) of the Federal

Deposit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is amended by

inserting `section 5242 of the Revised Statutes of the United States

(12 U.S.C. 91) or any other Federal or State law relating to the

avoidance of preferential or fraudulent transfers,' before `the

Corporation'.

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

INSTITUTIONS.

(a) IN GENERAL- Section 11(e)(8) of the Federal Deposit Insurance Act

(12 U.S.C. 1821(e)(8)) is amended--

(1) in subparagraph (E), by striking `other than paragraph (12)

of this subsection, subsection (d)(9)' and inserting `other than

subsections (d)(9) and (e)(10)'; and

(2) by adding at the end the following new subparagraphs:

`(F) CLARIFICATION- No provision of law shall be construed

as limiting the right or power of the Corporation, or

authorizing any court or agency to limit or delay, in any

manner, the right or power of the Corporation to transfer

any qualified financial contract in accordance with

paragraphs (9) and (10) of this subsection or to disaffirm

or repudiate any such contract in accordance with subsection

(e)(1) of this section.

`(G) WALKAWAY CLAUSES NOT EFFECTIVE-

`(i) IN GENERAL- Notwithstanding the provisions of

subparagraphs (A) and (E), and sections 403 and 404 of

the Federal Deposit Insurance Corporation Improvement

Act of 1991, no walkaway clause shall be enforceable in

a qualified financial contract of an insured depository

institution in default.

`(ii) WALKAWAY CLAUSE DEFINED- For purposes of this

subparagraph, the term `walkaway clause' means a

provision in a qualified financial contract that, after

calculation of a value of a party's position or an

amount due to or from 1 of the parties in accordance

with its terms upon termination, liquidation, or

acceleration of the qualified financial contract,

either does not create a payment obligation of a party

or extinguishes a payment obligation of a party in

whole or in part solely because of such party's status

as a nondefaulting party.'.

(b) TECHNICAL AND CONFORMING AMENDMENT- Section 11(e)(12)(A) of the

Federal Deposit Insurance Act (12 U.S.C. 1821(e)(12)(A)) is amended by

inserting `or the exercise of rights or powers by' after `the

appointment of'.

SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED FINANCIAL

CONTRACTS.

(a) TRANSFERS OF QUALIFIED FINANCIAL CONTRACTS TO FINANCIAL

INSTITUTIONS- Section 11(e)(9) of the Federal Deposit Insurance Act

(12 U.S.C. 1821(e)(9)) is amended to read as follows:

`(9) TRANSFER OF QUALIFIED FINANCIAL CONTRACTS-

`(A) IN GENERAL- In making any transfer of assets or

liabilities of a depository institution in default which

includes any qualified financial contract, the conservator

or receiver for such depository institution shall either--

`(i) transfer to one financial institution, other than

a financial institution for which a conservator,

receiver, trustee in bankruptcy, or other legal

custodian has been appointed or which is otherwise the

subject of a bankruptcy or insolvency proceeding--

`(I) all qualified financial contracts between any

person or any affiliate of such person and the

depository institution in default;

`(II) all claims of such person or any affiliate

of such person against such depository institution

under any such contract (other than any claim

which, under the terms of any such contract, is

subordinated to the claims of general unsecured

creditors of such institution);

`(III) all claims of such depository institution

against such person or any affiliate of such

person under any such contract; and

`(IV) all property securing or any other credit

enhancement for any contract described in

subclause (I) or any claim described in subclause

(II) or (III) under any such contract; or

`(ii) transfer none of the qualified financial

contracts, claims, property or other credit enhancement

referred to in clause (i) (with respect to such person

and any affiliate of such person).

`(B) TRANSFER TO FOREIGN BANK, FOREIGN FINANCIAL

INSTITUTION, OR BRANCH OR AGENCY OF A FOREIGN BANK OR

FINANCIAL INSTITUTION- In transferring any qualified

financial contract and related claims and property under

subparagraph (A)(i), the conservator or receiver for the

depository institution shall not make such transfer to a

foreign bank, financial institution organized under the laws

of a foreign country, or a branch or agency of a foreign

bank or financial institution unless, under the law

applicable to such bank, financial institution, branch or

agency, to the qualified financial contracts, and to any

netting contract, any security agreement or arrangement or

other credit enhancement related to one or more qualified

financial contracts, the contractual rights of the parties

to such qualified financial contracts, netting contracts,

security agreements or arrangements, or other credit

enhancements are enforceable substantially to the same

extent as permitted under this section.

`(C) TRANSFER OF CONTRACTS SUBJECT TO THE RULES OF A

CLEARING ORGANIZATION- In the event that a conservator or

receiver transfers any qualified financial contract and

related claims, property, and credit enhancements pursuant

to subparagraph (A)(i) and such contract is subject to the

rules of a clearing organization, the clearing organization

shall not be required to accept the transferee as a member

by virtue of the transfer.

`(D) DEFINITION- For purposes of this paragraph, the term

`financial institution' means a broker or dealer, a

depository institution, a futures commission merchant, or

any other institution, as determined by the Corporation by

regulation to be a financial institution.'.

(b) NOTICE TO QUALIFIED FINANCIAL CONTRACT COUNTERPARTIES- Section

11(e)(10)(A) of the Federal Deposit Insurance Act (12 U.S.C.

1821(e)(10)(A)) is amended in the material immediately following

clause (ii) by striking `the conservator' and all that follows through

the period and inserting the following: `the conservator or receiver

shall notify any person who is a party to any such contract of such

transfer by 5:00 p.m. (eastern time) on the business day following the

date of the appointment of the receiver in the case of a receivership,

or the business day following such transfer in the case of a

conservatorship.'.

(c) RIGHTS AGAINST RECEIVER AND TREATMENT OF BRIDGE BANKS- Section

11(e)(10) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(10))

is amended--

(1) by redesignating subparagraph (B) as subparagraph (D); and

(2) by inserting after subparagraph (A) the following new

subparagraphs:

`(B) CERTAIN RIGHTS NOT ENFORCEABLE-

`(i) RECEIVERSHIP- A person who is a party to a

qualified financial contract with an insured depository

institution may not exercise any right that such person

has to terminate, liquidate, or net such contract under

paragraph (8)(A) of this subsection or section 403 or

404 of the Federal Deposit Insurance Corporation

Improvement Act of 1991, solely by reason of or

incidental to the appointment of a receiver for the

depository institution (or the insolvency or financial

condition of the depository institution for which the

receiver has been appointed)--

`(I) until 5:00 p.m. (eastern time) on the

business day following the date of the appointment

of the receiver; or

`(II) after the person has received notice that

the contract has been transferred pursuant to

paragraph (9)(A).

`(ii) CONSERVATORSHIP- A person who is a party to a

qualified financial contract with an insured depository

institution

may not exercise any right that such person has to terminate, liquidate, or

net such contract under paragraph (8)(E) of this subsection or sections 403

or 404 of the Federal Deposit Insurance Corporation Improvement Act of

1991, solely by reason of or incidental to the appointment of a conservator

for the depository institution (or the insolvency or financial condition of

the depository institution for which the conservator has been appointed).

`(iii) NOTICE- For purposes of this paragraph, the

Corporation as receiver or conservator of an insured

depository institution shall be deemed to have notified

a person who is a party to a qualified financial

contract with such depository institution if the

Corporation has taken steps reasonably calculated to

provide notice to such person by the time specified in

subparagraph (A).

`(C) TREATMENT OF BRIDGE BANKS- The following institutions

shall not be considered to be a financial institution for

which a conservator, receiver, trustee in bankruptcy, or

other legal custodian has been appointed or which is

otherwise the subject of a bankruptcy or insolvency

proceeding for purposes of paragraph (9):

`(i) A bridge bank.

`(ii) A depository institution organized by the

Corporation, for which a conservator is appointed

either--

`(I) immediately upon the organization of the

institution; or

`(II) at the time of a purchase and assumption

transaction between the depository institution and

the Corporation as receiver for a depository

institution in default.'.

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

FINANCIAL CONTRACTS.

Section 11(e) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e))

is amended--

(1) by redesignating paragraphs (11) through (15) as paragraphs

(12) through (16), respectively; and

(2) by inserting after paragraph (10) the following new

paragraph:

`(11) DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINANCIAL

CONTRACTS- In exercising the rights of disaffirmance or

repudiation of a conservator or receiver with respect to any

qualified financial contract to which an insured depository

institution is a party, the conservator or receiver for such

institution shall either--

`(A) disaffirm or repudiate all qualified financial

contracts between--

`(i) any person or any affiliate of such person; and

`(ii) the depository institution in default; or

`(B) disaffirm or repudiate none of the qualified financial

contracts referred to in subparagraph (A) (with respect to

such person or any affiliate of such person).'.

SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.

Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance Act (12

U.S.C. 1821(e)(8)(D)(vii)) is amended to read as follows:

`(vii) TREATMENT OF MASTER AGREEMENT AS ONE AGREEMENT-

Any master agreement for any contract or agreement

described in any preceding clause of this subparagraph

(or any master agreement for such master agreement or

agreements), together with all supplements to such

master agreement, shall be treated as a single

agreement and a single qualified financial contract. If

a master agreement contains provisions relating to

agreements or transactions that are not themselves

qualified financial contracts, the master agreement

shall be deemed to be a qualified financial contract

only with respect to those transactions that are

themselves qualified financial contracts.'.

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

(a) DEFINITIONS- Section 402 of the Federal Deposit Insurance

Corporation Improvement Act of 1991 (12 U.S.C. 4402) is amended--

(1) in paragraph (2)--

(A) in subparagraph (A)(ii), by inserting before the

semicolon `, or is exempt from such registration by order of

the Securities and Exchange Commission'; and

(B) in subparagraph (B), by inserting before the period `or

that has been granted an exemption under section 4(c)(1) of

the Commodity Exchange Act';

(2) in paragraph (6)--

(A) by redesignating subparagraphs (B) through (D) as

subparagraphs (C) through (E), respectively;

(B) by inserting after subparagraph (A) the following new

subparagraph:

`(B) an uninsured national bank or an uninsured State bank

that is a member of the Federal Reserve System, if the

national bank or State member bank is not eligible to make

application to become an insured bank under section 5 of the

Federal Deposit Insurance Act;'; and

(C) by amending subparagraph (C) (as redesignated) to read

as follows:

`(C) a branch or agency of a foreign bank, a foreign bank

and any branch or agency of the foreign bank, or the foreign

bank that established the branch or agency, as those terms

are defined in section 1(b) of the International Banking Act

of 1978;';

(3) in paragraph (11), by inserting before the period `and any

other clearing organization with which such clearing organization

has a netting contract';

(4) by amending paragraph (14)(A)(i) to read as follows:

`(i) means a contract or agreement between 2 or more

financial institutions, clearing organizations, or

members that provides for netting present or future

payment obligations or payment entitlements (including

liquidation or closeout values relating to such

obligations or entitlements) among the parties to the

agreement; and'; and

(5) by adding at the end the following new paragraph:

`(15) PAYMENT- The term `payment' means a payment of United

States dollars, another currency, or a composite currency, and a

noncash delivery, including a payment or delivery to liquidate an

unmatured obligation.'.

(b) ENFORCEABILITY OF BILATERAL NETTING CONTRACTS- Section 403 of the

Federal Deposit Insurance Corporation Improvement Act of 1991 (12

U.S.C. 4403) is amended--

(1) by striking subsection (a) and inserting the following:

`(a) GENERAL RULE- Notwithstanding any other provision of State or

Federal law (other than paragraphs (8)(E), (8)(F), and (10)(B) of

section 11(e) of the Federal Deposit Insurance Act or any order

authorized under section 5(b)(2) of the Securities Investor Protection

Act of 1970), the covered contractual payment obligations and the

covered contractual payment entitlements between any 2 financial

institutions shall be netted in accordance with, and subject to the

conditions of, the terms of any applicable netting contract (except as

provided in section 561(b)(2) of title 11, United States Code).'; and

(2) by adding at the end the following new subsection:

`(f) ENFORCEABILITY OF SECURITY AGREEMENTS- The provisions of any

security agreement or arrangement or other credit enhancement related

to one or more netting contracts between any 2 financial institutions

shall be enforceable in accordance with their terms (except as

provided in section 561(b)(2) of title 11, United States Code), and

shall not be stayed, avoided, or otherwise limited by any State or

Federal law (other than paragraphs (8)(E), (8)(F), and (10)(B) of

section 11(e) of the Federal Deposit Insurance Act and section 5(b)(2)

of the Securities Investor Protection Act of 1970).'.

(c) ENFORCEABILITY OF CLEARING ORGANIZATION NETTING CONTRACTS- Section

404 of the Federal Deposit Insurance Corporation Improvement Act of

1991 (12 U.S.C. 4404) is amended--

(1) by striking subsection (a) and inserting the following:

`(a) GENERAL RULE- Notwithstanding any other provision of State or

Federal law (other than paragraphs (8)(E), (8)(F), and (10)(B) of

section 11(e) of the Federal Deposit Insurance Act and any order

authorized under section 5(b)(2) of the Securities Investor Protection

Act of 1970), the covered contractual payment obligations and the

covered contractual payment entitlements of a member of a clearing

organization to and from all other members of a clearing organization

shall be netted in accordance with and subject to the conditions of

any applicable netting contract (except as provided in section

561(b)(2) of title 11, United States Code).'; and

(2) by adding at the end the following new subsection:

`(h) ENFORCEABILITY OF SECURITY AGREEMENTS- The provisions of any

security agreement or arrangement or other credit enhancement related

to one or more netting contracts between any 2 members of a clearing

organization shall be enforceable in accordance with their terms

(except as provided in section 561(b)(2) of title 11, United States

Code), and shall not be stayed, avoided, or otherwise limited by any

State or Federal law (other than paragraphs (8)(E), (8)(F), and

(10)(B) of section 11(e) of the Federal Deposit Insurance Act and

section 5(b)(2) of the Securities Investor Protection Act of 1970).'.

(d) ENFORCEABILITY OF CONTRACTS WITH UNINSURED NATIONAL BANKS AND

UNINSURED FEDERAL BRANCHES AND AGENCIES- The Federal Deposit Insurance

Corporation Improvement Act of 1991 (12 U.S.C. 4401 et seq.) is

amended--

(1) by redesignating section 407 as section 408; and

(2) by inserting after section 406 the following new section:

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

UNINSURED FEDERAL BRANCHES AND AGENCIES.

`(a) IN GENERAL- Notwithstanding any other provision of law,

paragraphs (8), (9), (10), and (11) of section 11(e) of the Federal

Deposit Insurance Act shall apply to an uninsured national bank or

uninsured Federal branch or Federal agency, except that for such

purpose--

`(1) any reference to the `Corporation as receiver' or `the

receiver or the Corporation' shall refer to the receiver of an

uninsured national bank or uninsured Federal branch or Federal

agency appointed by the Comptroller of the Currency;

`(2) any reference to the `Corporation' (other than in section

11(e)(8)(D) of such Act), the `Corporation, whether acting as

such or as conservator or receiver', a `receiver', or a

`conservator' shall refer to the receiver or conservator of an

uninsured national bank or uninsured Federal branch or Federal

agency appointed by the Comptroller of the Currency; and

`(3) any reference to an `insured depository institution' or

`depository institution' shall refer to an uninsured national

bank or an uninsured Federal branch or Federal agency.

`(b) LIABILITY- The liability of a receiver or conservator of an

uninsured national bank or uninsured Federal branch or agency shall be

determined in the same manner and subject to the same limitations that

apply to receivers and conservators of insured depository institutions

under section 11(e) of the Federal Deposit Insurance Act.

`(c) REGULATORY AUTHORITY-

`(1) IN GENERAL- The Comptroller of the Currency, in consultation

with the Federal Deposit Insurance Corporation, may promulgate

regulations to implement this section.

`(2) SPECIFIC REQUIREMENT- In promulgating regulations to

implement this section, the Comptroller of the Currency shall

ensure that the regulations generally are consistent with the

regulations and policies of the Federal Deposit Insurance

Corporation adopted pursuant to the Federal Deposit Insurance

Act.

`(d) DEFINITIONS- For purposes of this section, the terms `Federal

branch', `Federal agency', and `foreign bank' have the same meanings

as in section 1(b) of the International Banking Act of 1978.'.

SEC. 907. BANKRUPTCY CODE AMENDMENTS.

(a) DEFINITIONS OF FORWARD CONTRACT, REPURCHASE AGREEMENT, SECURITIES

CLEARING AGENCY, SWAP AGREEMENT, COMMODITY CONTRACT, AND SECURITIES

CONTRACT- Title 11, United States Code, is amended--

(1) in section 101--

(A) in paragraph (25)--

(i) by striking `means a contract' and inserting

`means--

`(A) a contract';

(ii) by striking `, or any combination thereof or

option thereon;' and inserting `, or any other similar

agreement;'; and

(iii) by adding at the end the following:

`(B) any combination of agreements or transactions referred

to in subparagraphs (A) and (C);

`(C) any option to enter into an agreement or transaction

referred to in subparagraph (A) or (B);

`(D) a master agreement that provides for an agreement or

transaction referred to in subparagraph (A), (B), or (C),

together with all supplements to any such master agreement,

without regard to whether such master agreement provides for

an agreement or transaction that is not a forward contract

under this paragraph, except that such master agreement

shall be considered to be a forward contract under this

paragraph only with respect to each agreement or transaction

under such master agreement that is referred to in

subparagraph (A), (B), or (C); or

`(E) any security agreement or arrangement, or other credit

enhancement related to any agreement or transaction referred

to in subparagraph (A), (B), (C), or (D), but not to exceed

the actual value of such contract on the date of the filing

of the petition;';

(B) in paragraph (46), by striking `on any day during the

period beginning 90 days before the date of' and inserting

`at any time before';

(C) by amending paragraph (47) to read as follows:

`(47) `repurchase agreement' (which definition also applies to a

reverse repurchase agreement)--

`(A) means--

`(i) an agreement, including related terms, which

provides for the transfer of one or more certificates

of deposit, mortgage related securities (as defined in

section 3 of the Securities Exchange Act of 1934),

mortgage loans, interests in mortgage related

securities or mortgage loans, eligible bankers'

acceptances, qualified foreign government securities

(defined as a security that is a direct obligation of,

or that is fully guaranteed by, the central government

of a member of the Organization for Economic

Cooperation and Development), or securities that are

direct obligations of, or that are fully guaranteed by,

the United States or any agency of the United States

against the transfer of funds by the transferee of such

certificates of deposit, eligible bankers' acceptances,

securities, loans, or interests, with a simultaneous

agreement by such transferee to transfer to the

transferor thereof certificates of deposit, eligible

bankers' acceptance, securities, loans, or interests of

the kind described in this clause, at a date certain

not later than 1 year after such transfer or on demand,

against the transfer of funds;

`(ii) any combination of agreements or transactions

referred to in clauses (i) and (iii);

`(iii) an option to enter into an agreement or

transaction referred to in clause (i) or (ii);

`(iv) a master agreement that provides for an agreement

or transaction referred to in clause (i), (ii), or

(iii), together with all supplements to any such master

agreement, without regard to whether such master

agreement provides for an agreement or transaction that

is not a repurchase agreement under this paragraph,

except that such master agreement shall be considered

to be a repurchase agreement under this paragraph only

with respect to each agreement or transaction under the

master agreement that is referred to in clause (i),

(ii), or (iii); or

`(v) any security agreement or arrangement or other

credit enhancement related to any agreement or

transaction referred to in clause (i), (ii), (iii), or

(iv), but not to exceed the actual value of such

contract on the date of the filing of the petition; and

`(B) does not include a repurchase obligation under a

participation in a commercial mortgage loan;';

(D) in paragraph (48), by inserting `, or exempt from such

registration under such section pursuant to an order of the

Securities and Exchange Commission,' after `1934'; and

(E) by amending paragraph (53B) to read as follows:

`(53B) `swap agreement'--

`(A) means--

`(i) any agreement, including the terms and conditions

incorporated by reference in such agreement, which is

an interest rate swap, option, future, or forward

agreement, including--

`(I) a rate floor, rate cap, rate collar,

cross-currency rate swap, and basis swap;

`(II) a spot, same day-tomorrow, tomorrow-next,

forward, or other foreign exchange or precious

metals agreement;

`(III) a currency swap, option, future, or forward

agreement;

`(IV) an equity index or an equity swap, option,

future, or forward agreement;

`(V) a debt index or a debt swap, option, future,

or forward agreement;

`(VI) a credit spread or a credit swap, option,

future, or forward agreement;

`(VII) a commodity index or a commodity swap,

option, future, or forward agreement; or

`(VIII) a weather swap, weather derivative, or

weather option;

`(ii) any agreement or transaction similar to any other

agreement or transaction referred to in this paragraph

that--

`(I) is presently, or in the future becomes,

regularly entered into in the swap market

(including terms and conditions incorporated by

reference therein); and

`(II) is a forward, swap, future, or option on one

or more rates, currencies, commodities, equity

securities, or other equity instruments, debt

securities or other debt instruments, or economic

indices or measures of economic risk or value;

`(iii) any combination of agreements or transactions

referred to in this subparagraph;

`(iv) any option to enter into an agreement or

transaction referred to in this subparagraph;

`(v) a master agreement that provides for an agreement

or transaction referred to in clause (i), (ii), (iii),

or (iv), together with all supplements to any such

master agreement, and without regard to whether the

master agreement contains an agreement or transaction

that is not a swap agreement under this paragraph,

except that the master agreement shall be considered to

be a swap agreement under this paragraph only with

respect to each agreement or transaction under the

master agreement that is referred to in clause (i),

(ii), (iii), or (iv); or

`(vi) any security agreement or arrangement or other

credit enhancement related to any agreements or

transactions referred to in clause (i) through (v), but

do not to exceed the actual value of such contract on

the date of the filing of the petition; and

`(B) is applicable for purposes of this title only, and

shall not be construed or applied so as to challenge or

affect the characterization, definition, or treatment of any

swap agreement under any other statute, regulation, or rule,

including the Securities Act of 1933, the Securities

Exchange Act of 1934, the Public Utility Holding Company Act

of 1935, the Trust Indenture Act of 1939, the Investment

Company Act of 1940, the Investment Advisers Act of 1940,

the Securities Investor Protection Act of 1970, the

Commodity Exchange Act, and the regulations prescribed by

the Securities and Exchange Commission or the Commodity

Futures Trading Commission.';

(2) in section 741(7), by striking paragraph (7) and inserting

the following:

`(7) `securities contract'--

`(A) means--

`(i) a contract for the purchase, sale, or loan of a

security, a certificate of deposit, a mortgage loan or

any interest in a mortgage loan, a group or index of

securities, certificates of deposit, or mortgage loans

or interests therein (including an interest therein or

based on the value thereof), or option on any of the

foregoing, including an option to purchase or sell any

such security, certificate of deposit, loan, interest,

group or index, or option;

`(ii) any option entered into on a national securities

exchange relating to foreign currencies;

`(iii) the guarantee by or to any securities clearing

agency of a settlement of cash, securities,

certificates of deposit, mortgage loans or interests

therein, group or index of securities, or mortgage

loans or interests therein (including any interest

therein or based on the value thereof), or option on

any of the foregoing, including an option to purchase

or sell any such security, certificate of deposit,

loan, interest, group or index, or option;

`(iv) any margin loan;

`(v) any other agreement or transaction that is similar

to an agreement or

transaction referred to in this subparagraph;

`(vi) any combination of the agreements or transactions

referred to in this subparagraph;

`(vii) any option to enter into any agreement or

transaction referred to in this subparagraph;

`(viii) a master agreement that provides for an

agreement or transaction referred to in clause (i),

(ii), (iii), (iv), (v), (vi), or (vii), together with

all supplements to any such master agreement, without

regard to whether the master agreement provides for an

agreement or transaction that is not a securities

contract under this subparagraph, except that such

master agreement shall be considered to be a securities

contract under this subparagraph only with respect to

each agreement or transaction under such master

agreement that is referred to in clause (i), (ii),

(iii), (iv), (v), (vi), or (vii); or

`(ix) any security agreement or arrangement or other

credit enhancement, related to any agreement or

transaction referred to in this subparagraph, but not

to exceed the actual value of such contract on the date

of the filing of the petition; and

`(B) does not include any purchase, sale, or repurchase

obligation under a participation in a commercial mortgage

loan.'; and

(3) in section 761(4)--

(A) by striking `or' at the end of subparagraph (D); and

(B) by adding at the end the following:

`(F) any other agreement or transaction that is similar to

an agreement or transaction referred to in this paragraph;

`(G) any combination of the agreements or transactions

referred to in this paragraph;

`(H) any option to enter into an agreement or transaction

referred to in this paragraph;

`(I) a master agreement that provides for an agreement or

transaction referred to in subparagraph (A), (B), (C), (D),

(E), (F), (G), or (H), together with all supplements to such

master agreement, without regard to whether the master

agreement provides for an agreement or

transaction that is not a commodity contract under this paragraph, except

that the master agreement shall be considered to be a commodity contract

under this paragraph only with respect to each agreement or transaction

under the master agreement that is referred to in subparagraph (A), (B),

(C), (D), (E), (F), (G), or (H); or

`(J) any security agreement or arrangement or other credit

enhancement related to any agreement or transaction referred

to in this paragraph, but not to exceed the actual value of

such contract on the date of the filing of the petition;'.

(b) DEFINITIONS OF FINANCIAL INSTITUTION, FINANCIAL PARTICIPANT, AND

FORWARD CONTRACT MERCHANT- Section 101 of title 11, United States

Code, is amended--

(1) by striking paragraph (22) and inserting the following:

`(22) `financial institution' means--

`(A) a Federal reserve bank, or an entity (domestic or

foreign) that is a commercial or savings bank, industrial

savings bank, savings and loan association, trust company,

or receiver or conservator for such entity and, when any

such Federal reserve bank, receiver, conservator or entity

is acting as agent or custodian for a customer in connection

with a securities contract, as defined in section 741, such

customer; or

`(B) in connection with a securities contract, as defined in

section 741, an investment company registered under the

Investment Company Act of 1940;';

(2) by inserting after paragraph (22) the following:

`(22A) `financial participant' means an entity that, at the time

it enters into a securities contract, commodity contract, or

forward contract, or at the time of the filing of the petition,

has one or more agreements or transactions described in paragraph

(1), (2), (3), (4), (5), or (6) of section 561(a) with the debtor

or any other entity (other than an affiliate) of a total gross

dollar value of not less than $1,000,000,000 in notional or

actual principal amount outstanding on any day during the

previous 15-month period, or has gross mark-to-market positions

of not less than $100,000,000 (aggregated across counterparties)

in one or more such agreements or transactions with the debtor or

any other entity (other than an affiliate) on any day during the

previous 15-month period;'; and

(3) by striking paragraph (26) and inserting the following:

`(26) `forward contract merchant' means a Federal reserve bank,

or an entity, the business of which consists in whole or in part

of entering into forward contracts as or with merchants or in a

commodity, as defined or in section 761 or any similar good,

article, service, right, or interest which is presently or in the

future becomes the subject of dealing in the forward contract

trade;'.

(c) DEFINITION OF MASTER NETTING AGREEMENT AND MASTER NETTING

AGREEMENT PARTICIPANT- Section 101 of title 11, United States Code, is

amended by inserting after paragraph (38) the following new

paragraphs:

`(38A) `master netting agreement'--

`(A) means an agreement providing for the exercise of

rights, including rights of netting, setoff, liquidation,

termination, acceleration, or closeout, under or in

connection with one or more contracts that are described in

any one or more of paragraphs (1) through (5) of

section 561(a), or any security agreement or arrangement or other credit

enhancement related to one or more of the foregoing; and

`(B) if the agreement contains provisions relating to

agreements or transactions that are not contracts described

in paragraphs (1) through (5) of section 561(a), shall be

deemed to be a master netting agreement only with respect to

those agreements or transactions that are described in any

one or more of paragraphs (1) through (5) of section 561(a);

`(38B) `master netting agreement participant' means an entity

that, at any time before the filing of the petition, is a party

to an outstanding master netting agreement with the debtor;'.

(d) SWAP AGREEMENTS, SECURITIES CONTRACTS, COMMODITY CONTRACTS,

FORWARD CONTRACTS, REPURCHASE AGREEMENTS, AND MASTER NETTING

AGREEMENTS UNDER THE AUTOMATIC-STAY-

(1) IN GENERAL- Section 362(b) of title 11, United States Code,

as amended by this Act, is amended--

(A) in paragraph (6), by inserting `, pledged to, and under

the control of,' after `held by';

(B) in paragraph (7), by inserting `, pledged to, and under

the control of,' after `held by';

(C) by striking paragraph (17) and inserting the following:

`(17) under subsection (a), of the setoff by a swap participant

of a mutual debt and claim under or in connection with one or

more swap agreements that constitutes the setoff of a claim

against the debtor for any payment or other transfer of property

due from the debtor under or in connection with any swap

agreement against any payment due to the debtor from the swap

participant under or in connection with any swap agreement or

against cash, securities, or other property held by, pledged to,

and under the control of, or due from such swap participant to

margin, guarantee, secure, or settle any swap agreement;'; and

(D) by inserting after paragraph (27), as added by this Act,

the following new paragraph:

`(28) under subsection (a), of the setoff by a master netting

agreement participant of a mutual debt and claim under or in

connection with one or more master netting agreements or any

contract or agreement subject to such agreements that constitutes

the setoff of a claim against the debtor for any payment or other

transfer of property due from the debtor under or in connection

with such agreements or any contract or agreement subject to such

agreements against any payment due to the debtor from such master

netting agreement participant under or in connection with such

agreements or any contract or agreement subject to such

agreements or against cash, securities, or other property held

by, pledged to, and under the control of, or due from such master

netting agreement participant to margin, guarantee, secure, or

settle such agreements or any contract or agreement subject to

such agreements, to the extent that such participant is eligible

to exercise such offset rights under paragraph (6), (7), or (17)

for each individual contract covered by the master netting

agreement in issue; or'.

(2) LIMITATION- Section 362 of title 11, United States Code, as

amended by this Act, is amended by adding at the end the

following:

`(l) LIMITATION- The exercise of rights not subject to the stay

arising under subsection (a) pursuant to paragraph (6), (7), (17), or

(28) of subsection (b) shall not be stayed by any order of a court or

administrative agency in any proceeding under this title.'.

(e) LIMITATION OF AVOIDANCE POWERS UNDER MASTER NETTING AGREEMENT-

Section 546 of title 11, United States Code, as amended by this Act,

is amended--

(1) in subsection (g) (as added by section 103 of Public Law

101-311)--

(A) by striking `under a swap agreement'; and

(B) by striking `in connection with a swap agreement' and

inserting `under or in connection with any swap agreement';

and

(2) by adding at the end the following:

`(k) Notwithstanding sections 544, 545, 547, 548(a)(1)(B), and 548(b)

the trustee may not avoid a transfer made by or to a master netting

agreement participant under or in connection with any master netting

agreement or any individual contract covered thereby that is made

before the commencement of the case, except under section 548(a)(1)(A)

and except to the extent that the trustee could otherwise avoid such a

transfer made under an individual contract covered by such master

netting agreement.'.

(f) FRAUDULENT TRANSFERS OF MASTER NETTING AGREEMENTS- Section

548(d)(2) of title 11, United States Code, is amended--

(1) in subparagraph (C), by striking `and' at the end;

(2) in subparagraph (D), by striking the period and inserting `;

and'; and

(3) by adding at the end the following new subparagraph:

`(E) a master netting agreement participant that receives a

transfer in connection with a master netting agreement or any

individual contract covered thereby takes for value to the extent

of such transfer, except that, with respect to a transfer under

any individual contract covered thereby, to the extent that such

master netting agreement participant otherwise did not take (or

is otherwise not deemed to have taken) such transfer for value.'.

(g) TERMINATION OR ACCELERATION OF SECURITIES CONTRACTS- Section 555

of title 11, United States Code, is amended--

(1) by amending the section heading to read as follows:

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

securities contract';

and

(2) in the first sentence, by striking `liquidation' and

inserting `liquidation, termination, or acceleration'.

(h) TERMINATION OR ACCELERATION OF COMMODITIES OR FORWARD CONTRACTS-

Section 556 of title 11, United States Code, is amended--

(1) by amending the section heading to read as follows:

`Sec. 556. Contractual right to liquidate, terminate, or accelerate a

commodities contract or forward contract';

and

(2) in the first sentence, by striking `liquidation' and

inserting `liquidation, termination, or acceleration'.

(i) TERMINATION OR ACCELERATION OF REPURCHASE AGREEMENTS- Section 559

of title 11, United States Code, is amended--

(1) by amending the section heading to read as follows:

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

repurchase agreement';

and

(2) in the first sentence, by striking `liquidation' and

inserting `liquidation, termination, or acceleration'.

(j) LIQUIDATION, TERMINATION, OR ACCELERATION OF SWAP AGREEMENTS-

Section 560 of title 11, United States Code, is amended--

(1) by amending the section heading to read as follows:

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

agreement';

(2) in the first sentence, by striking `termination of a swap

agreement' and inserting `liquidation, termination, or

acceleration of one or more swap agreements'; and

(3) by striking `in connection with any swap agreement' and

inserting `in connection with the termination, liquidation, or

acceleration of one or more swap agreements'.

(k) LIQUIDATION, TERMINATION, ACCELERATION, OR OFFSET UNDER A MASTER

NETTING AGREEMENT AND ACROSS CONTRACTS-

(1) IN GENERAL- Title 11, United States Code, is amended by

inserting after section 560 the following:

`Sec. 561. Contractual right to terminate, liquidate, accelerate, or offset

under a master netting agreement and across contracts

`(a) IN GENERAL- Subject to subsection (b), the exercise of any

contractual right, because of a condition of the kind specified in

section 365(e)(1), to cause the termination, liquidation, or

acceleration of or to offset or net termination values, payment

amounts, or other transfer obligations arising under or in connection

with one or more (or the termination, liquidation, or acceleration of

one or more)--

`(1) securities contracts, as defined in section 741(7);

`(2) commodity contracts, as defined in section 761(4);

`(3) forward contracts;

`(4) repurchase agreements;

`(5) swap agreements; or

`(6) master netting agreements,

shall not be stayed, avoided, or otherwise limited by operation of any

provision of this title or by any order of a court or administrative

agency in any proceeding under this title.

`(b) EXCEPTION-

`(1) IN GENERAL- A party may exercise a contractual right

described in subsection (a) to terminate, liquidate, or

accelerate only to the extent that such party could exercise such

a right under section 555, 556, 559, or 560 for each individual

contract covered by the master netting agreement in issue.

`(2) COMMODITY BROKERS- If a debtor is a commodity broker subject

to subchapter IV of chapter 7--

`(A) a party may not net or offset an obligation to the

debtor arising under, or in connection with, a commodity

contract against any claim arising under, or in connection

with, other instruments, contracts, or agreements listed in

subsection (a) except to the extent that the party has

positive net equity in the commodity accounts at the debtor,

as calculated under that subchapter IV; and

`(B) another commodity broker may not net or offset an

obligation to the debtor arising under, or in connection

with, a commodity contract entered into or held on behalf of

a customer of the debtor against any claim arising under, or

in connection with, other instruments, contracts, or

agreements listed in subsection (a).

`(3) CONSTRUCTION- No provision of subparagraph (A) or (B) of

paragraph (2) shall prohibit the offset of claims and obligations

that arise under--

`(A) a cross-margining agreement that has been approved by

the Commodity Futures Trading Commission or submitted to the

Commodity Futures Trading Commission under section

5(a)(12)(A) of the Commodity Exchange Act and has been

approved; or

`(B) any other netting agreement between a clearing

organization, as defined in section 761, and another entity

that has been approved by the Commodity Futures Trading

Commission.

`(c) DEFINITION- As used in this section, the term `contractual right'

includes a right set forth in a rule or bylaw of a national securities

exchange, a national securities association, or a securities clearing

agency, a right set forth in a bylaw of a clearing organization or

contract market or in a resolution of the governing board thereof, and

a right, whether or not evidenced in writing, arising under common

law, under law merchant, or by reason of normal business practice.

`(d) CASES ANCILLARY TO FOREIGN PROCEEDINGS- Any provisions of this

title relating to securities contracts, commodity contracts, forward

contracts, repurchase agreements, swap agreements, or master netting

agreements shall apply in a case under chapter 15 of this title, so

that enforcement of contractual provisions of such contracts and

agreements in accordance with their terms will not be stayed or

otherwise limited by operation of any provision of this title or by

order of a court in any case under this title, and to limit avoidance

powers to the same extent as in a proceeding under chapter 7 or 11 of

this title (such enforcement not to be limited based on the presence

or absence of assets of the debtor in the United States).'.

(2) CONFORMING AMENDMENT- The table of sections for chapter 5 of

title 11, United States Code, is amended by inserting after the

item relating to section 560 the following:

`561. Contractual right to terminate, liquidate, accelerate, or

offset under a master netting agreement and across contracts.'.

(l) COMMODITY BROKER LIQUIDATIONS- Title 11, United States Code, is

amended by inserting after section 766 the following:

`Sec. 767. Commodity broker liquidation and forward contract merchants,

commodity brokers, stockbrokers, financial institutions, financial

participants, securities clearing agencies, swap participants, repo

participants, and master netting agreement participants

`Notwithstanding any other provision of this title, the exercise of

rights by a forward contract merchant, commodity broker, stockbroker,

financial institution, financial participant, securities clearing

agency, swap participant, repo participant, or master netting

agreement participant under this title shall not affect the priority

of any unsecured claim it may have after the exercise of such

rights.'.

(m) STOCKBROKER LIQUIDATIONS- Title 11, United States Code, is amended

by inserting after section 752 the following:

`Sec. 753. Stockbroker liquidation and forward contract merchants,

commodity brokers, stockbrokers, financial institutions, securities

clearing agencies, swap participants, repo participants, and master netting

agreement participants

`Notwithstanding any other provision of this title, the exercise of

rights by a forward contract merchant, commodity broker, stockbroker,

financial institution, securities clearing agency, swap participant,

repo participant, financial participant, or master netting agreement

participant under this title shall not affect the priority of any

unsecured claim it may have after the exercise of such rights.'.

(n) SETOFF- Section 553 of title 11, United States Code, is amended--

(1) in subsection (a)(3)(C), by inserting before the period the

following: `(except for a setoff of a kind described in section

362(b)(6), 362(b)(7), 362(b)(17), 362(b)(28), 555, 556, 559, 560,

or 561 of this title)'; and

(2) in subsection (b)(1), by striking `362(b)(14),' and inserting

`362(b)(17), 362(b)(28), 555, 556, 559, 560, 561'.

(o) SECURITIES CONTRACTS, COMMODITY CONTRACTS, AND FORWARD CONTRACTS-

Title 11, United States Code, is amended--

(1) in section 362(b)(6), by striking `financial institutions,'

each place such term appears and inserting `financial

institution, financial participant,';

(2) in section 546(e), by inserting `financial participant,'

after `financial institution,';

(3) in section 548(d)(2)(B), by inserting `financial

participant,' after `financial institution,';

(4) in section 555--

(A) by inserting `financial participant,' after `financial

institution,'; and

(B) by inserting before the period at the end `, a right set

forth in a bylaw of a clearing organization or contract

market or in a resolution of the governing board thereof,

and a right, whether or not in writing, arising under common

law, under law merchant, or by reason of normal business

practice'; and

(5) in section 556, by inserting `, financial participant,' after

`commodity broker'.

(p) CONFORMING AMENDMENTS- Title 11, United States Code, is amended--

(1) in the table of sections for chapter 5--

(A) by amending the items relating to sections 555 and 556

to read as follows:

`555. Contractual right to liquidate, terminate, or accelerate a

securities contract.

`556. Contractual right to liquidate, terminate, or accelerate a

commodities contract or forward contract.';

and

(B) by amending the items relating to sections 559 and 560

to read as follows:

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

repurchase agreement.

`560. Contractual right to liquidate, terminate, or accelerate a

swap agreement.';

and

(2) in the table of sections for chapter 7--

(A) by inserting after the item relating to section 766 the

following:

`767. Commodity broker liquidation and forward contract

merchants, commodity brokers, stockbrokers, financial

institutions, securities clearing agencies, swap participants,

repo participants, and master netting agreement participants.';

and

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

following:

`753. Stockbroker liquidation and forward contract merchants,

commodity brokers, stockbrokers, financial institutions,

securities clearing agencies, swap participants, repo

participants, and master netting agreement participants.'.

SEC. 908. RECORDKEEPING REQUIREMENTS.

Section 11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C.

1821(e)(8)) is amended by adding at the end the following new

subparagraph:

`(H) RECORDKEEPING REQUIREMENTS- The Corporation, in

consultation with the appropriate Federal banking agencies,

may prescribe regulations requiring more detailed

recordkeeping with respect to qualified financial contracts

(including market valuations) by insured depository

institutions.'.

SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION REQUIREMENT.

Section 13(e)(2) of the Federal Deposit Insurance Act (12 U.S.C.

1823(e)(2)) is amended to read as follows:

`(2) EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION REQUIREMENT- An

agreement to provide for the lawful collateralization of--

`(A) deposits of, or other credit extension by, a Federal,

State, or local governmental entity, or of any depositor

referred to in section 11(a)(2), including an agreement to

provide collateral in lieu of a surety bond;

`(B) bankruptcy estate funds pursuant to section 345(b)(2)

of title 11, United States Code;

`(C) extensions of credit, including any overdraft, from a

Federal reserve bank or Federal home loan bank; or

`(D) one or more qualified financial contracts, as defined

in section 11(e)(8)(D),

shall not be deemed invalid pursuant to paragraph (1)(B) solely

because such agreement was not executed contemporaneously with

the acquisition of the collateral or because of pledges,

delivery, or substitution of the collateral made in accordance

with such agreement.'.

SEC. 910. DAMAGE MEASURE.

(a) IN GENERAL- Title 11, United States Code, is amended--

(1) by inserting after section 561, as added by this Act, the

following:

`Sec. 562. Damage measure in connection with swap agreements, securities

contracts, forward contracts, commodity contracts, repurchase agreements,

or master netting agreements

`If the trustee rejects a swap agreement, securities contract (as

defined in section 741), forward contract, commodity contract (as

defined in section 761), repurchase agreement, or master netting

agreement pursuant to section 365(a), or if a forward contract

merchant, stockbroker, financial institution, securities clearing

agency, repo participant, financial participant, master netting

agreement participant, or swap participant liquidates, terminates, or

accelerates such contract or agreement, damages shall be measured as

of the earlier of--

`(1) the date of such rejection; or

`(2) the date of such liquidation, termination, or

acceleration.'; and

(2) in the table of sections for chapter 5, by inserting after

the item relating to section 561 (as added by this Act) the

following:

`562. Damage measure in connection with swap agreements,

securities contracts, forward contracts, commodity contracts,

repurchase agreements, or master netting agreements.'.

(b) CLAIMS ARISING FROM REJECTION- Section 502(g) of title 11, United

States Code, is amended--

(1) by inserting `(1)' after `(g)'; and

(2) by adding at the end the following:

`(2) A claim for damages calculated in accordance with section 562 of

this title shall be allowed under subsection (a), (b), or (c), or

disallowed under subsection (d) or (e), as if such claim had arisen

before the date of the filing of the petition.'.

SEC. 911. SIPC STAY.

Section 5(b)(2) of the Securities Investor Protection Act of 1970 (15

U.S.C. 78eee(b)(2)) is amended by adding at the end the following new

subparagraph:

`(C) EXCEPTION FROM STAY-

`(i) Notwithstanding section 362 of title 11, United

States Code, neither the filing of an application under

subsection (a)(3) nor any order or decree obtained by

SIPC from the court shall operate as a stay of any

contractual rights of a creditor to liquidate,

terminate, or accelerate a securities contract,

commodity contract, forward contract, repurchase

agreement, swap agreement, or master netting agreement,

as those terms are defined in sections 101 and 741 of

title 11, United States Code, to offset or net

termination values, payment amounts, or other transfer

obligations arising under or in connection with one or

more of such contracts or agreements, or to foreclose

on any cash collateral pledged by the debtor, whether

or not with respect to one or more of such contracts or

agreements.

`(ii) Notwithstanding clause (i), such application,

order, or decree may operate as a stay of the

foreclosure on, or disposition of, securities

collateral pledged by the debtor, whether or not with

respect to one or more of such contracts or agreements,

securities sold by the debtor under a repurchase

agreement, or securities lent under a securities

lending agreement.

`(iii) As used in this subparagraph, the term

`contractual right' includes a right set forth in a

rule or bylaw of a national securities exchange, a

national securities association, or a securities

clearing agency, a right set forth in a bylaw of a

clearing organization or contract market or in a resolution of the

governing board thereof, and a right, whether or not in writing, arising

under common law, under law merchant, or by reason of normal business

practice.'.

SEC. 912. ASSET-BACKED SECURITIZATIONS.

Section 541 of title 11, United States Code, is amended--

(1) in subsection (b), by inserting after paragraph (7), as added

by this Act, the following:

`(8) any eligible asset (or proceeds thereof), to the extent that

such eligible asset was transferred by the debtor, before the

date of commencement of the case, to an eligible entity in

connection with an asset-backed securitization, except to the

extent such asset (or proceeds or value thereof) may be recovered

by the trustee under section 550 by virtue of avoidance under

section 548(a);'; and

(2) by adding at the end the following new subsection:

`(f) For purposes of this section--

`(1) the term `asset-backed securitization' means a transaction

in which eligible assets transferred to an eligible entity are

used as the source of payment on securities, including, without

limitation, all securities issued by governmental units, at least

one class or tranche of which was rated investment grade by one

or more nationally recognized securities rating organizations,

when the securities were initially issued by an issuer;

`(2) the term `eligible asset' means--

`(A) financial assets (including interests therein and

proceeds thereof), either fixed or revolving, whether or not

the same are in existence as of the date of the transfer,

including residential and commercial mortgage loans,

consumer receivables, trade receivables, assets of

governmental units, including payment obligations relating

to taxes, receipts, fines, tickets, and other sources of

revenue, and lease receivables, that, by their terms,

convert into cash within a finite time period, plus any

residual interest in property subject to receivables

included in such financial assets plus any rights or other

assets designed to assure the servicing or timely

distribution of proceeds to security holders;

`(B) cash; and

`(C) securities, including without limitation, all

securities issued by governmental units;

`(3) the term `eligible entity' means--

`(A) an issuer; or

`(B) a trust, corporation, partnership, governmental unit,

limited liability company (including a single member limited

liability company), or other entity engaged exclusively in

the business of acquiring and transferring eligible assets

directly or indirectly to an issuer and taking actions

ancillary thereto;

`(4) the term `issuer' means a trust, corporation, partnership,

or other entity engaged exclusively in the business of acquiring

and holding eligible assets, issuing securities backed by

eligible assets, and taking actions ancillary thereto; and

`(5) the term `transferred' means the debtor, under a written

agreement, represented and warranted that eligible assets were

sold, contributed, or otherwise conveyed with the intention of

removing them from the estate of the debtor pursuant to

subsection (b)(8) (whether or not reference is made to this title

or any section hereof), irrespective and without limitation of--

`(A) whether the debtor directly or indirectly obtained or

held an interest in the issuer or in any securities issued

by the issuer;

`(B) whether the debtor had an obligation to repurchase or

to service or supervise the servicing of all or any portion

of such eligible assets; or

`(C) the characterization of such sale, contribution, or

other conveyance for tax, accounting, regulatory reporting,

or other purposes.'.

SEC. 913. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

(a) EFFECTIVE DATE- This title shall take effect on the date of

enactment of this Act.

(b) APPLICATION OF AMENDMENTS- The amendments made by this title shall

apply with respect to cases commenced or appointments made under any

Federal or State law after the date of enactment of this Act, but

shall not apply with respect to cases commenced or appointments made

under any Federal or State law before the date of enactment of this

Act.

TITLE X--PROTECTION OF FAMILY FARMERS

SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.

(a) REENACTMENT-

(1) IN GENERAL- Chapter 12 of title 11, United States Code, as

reenacted by section 149 of division C of the Omnibus

Consolidated and Emergency Supplemental Appropriations Act, 1999

(Public Law 105-277, 112 Stat. 2681-610), and amended by this

Act, is reenacted.

(2) EFFECTIVE DATE- Subsection (a) shall be deemed to have taken

effect on July 1, 2000.

(b) CONFORMING AMENDMENT- Section 302 of the Bankruptcy, Judges,

United States Trustees, and Family Farmer Bankruptcy Act of 1986 (28

U.S.C. 581 note) is amended by striking subsection (f).

SEC. 1002. DEBT LIMIT INCREASE.

(a) IN GENERAL- Section 104(b) of title 11, United States Code, is

amended by adding at the end the following:

`(4) The dollar amount in section 101(18) shall be adjusted at the

same times and in the same manner as the dollar amounts in paragraph

(1) of this subsection.'.

(b) EFFECTIVE DATE- The first adjustment required by section 104(b)(4)

of title 11, United States Code, as added by subsection (a) of this

section, shall occur on the later of--

(1) April 1, 2001; or

(2) 60 days after the date of enactment of this Act.

SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.

(a) CONTENTS OF PLAN- Section 1222(a)(2) of title 11, United States

Code, is amended to read as follows:

`(2) provide for the full payment, in deferred cash payments, of

all claims entitled to priority under section 507, unless--

`(A) the claim is a claim owed to a governmental unit that

arises as a result of the sale, transfer, exchange, or other

disposition of any farm asset used in the debtor's farming

operation, in which case the claim shall be treated as an

unsecured claim that is not entitled to priority under

section 507, but the debt shall be treated in such manner

only if the debtor receives a discharge; or

`(B) the holder of a particular claim agrees to a different

treatment of that claim;'.

(b) SPECIAL NOTICE PROVISIONS- Section 1231(b) of title 11, United

States Code, as so designated by this Act, is amended by striking `a

State or local governmental unit' and inserting `any governmental

unit'.

TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

SEC. 1101. DEFINITIONS.

(a) HEALTH CARE BUSINESS DEFINED- Section 101 of title 11, United

States Code, is amended--

(1) by redesignating paragraph (27A), as added by this Act, as

paragraph (27B); and

(2) by inserting after paragraph (27) the following:

`(27A) `health care business'--

`(A) means any public or private entity (without regard to

whether that entity is organized for profit or not for

profit) that is primarily engaged in offering to the general

public facilities and services for--

`(i) the diagnosis or treatment of injury, deformity,

or disease; and

`(ii) surgical, drug treatment, psychiatric, or

obstetric care; and

`(B) includes--

`(i) any--

`(I) general or specialized hospital;

`(II) ancillary ambulatory, emergency, or surgical

treatment facility;

`(III) hospice;

`(IV) home health agency; and

`(V) other health care institution that is similar

to an entity referred to in subclause (I), (II),

(III), or (IV); and

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

`(I) skilled nursing facility;

`(II) intermediate care facility;

`(III) assisted living facility;

`(IV) home for the aged;

`(V) domiciliary care facility; and

`(VI) health care institution that is related to a

facility referred to in subclause (I), (II),

(III), (IV), or (V), if that institution is

primarily engaged in offering room, board,

laundry, or personal assistance with activities of

daily living and incidentals to activities of

daily living;'.

(b) PATIENT AND PATIENT RECORDS DEFINED- Section 101 of title 11,

United States Code, is amended by inserting after paragraph (40) the

following:

`(40A) `patient' means any person who obtains or receives

services from a health care business;

`(40B) `patient records' means any written document relating to a

patient or a record recorded in a magnetic, optical, or other

form of electronic medium;'.

(c) RULE OF CONSTRUCTION- The amendments made by subsection (a) of

this section shall not affect the interpretation of section 109(b) of

title 11, United States Code.

SEC. 1102. DISPOSAL OF PATIENT RECORDS.

(a) IN GENERAL- Subchapter III of chapter 3 of title 11, United States

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

`Sec. 351. Disposal of patient records

`If a health care business commences a case under chapter 7, 9, or 11,

and the trustee does not have a sufficient amount of funds to pay for

the storage of patient records in the manner required under applicable

Federal or State law, the following requirements shall apply:

`(1) The trustee shall--

`(A) promptly publish notice, in 1 or more appropriate

newspapers, that if patient records are not claimed by the

patient or an insurance provider (if applicable law permits

the insurance provider to make that claim) by the date that

is 365 days after the date of that notification, the trustee

will destroy the patient records; and

`(B) during the first 180 days of the 365-day period

described in subparagraph (A), promptly attempt to notify

directly each patient that is the subject of the patient

records and appropriate insurance carrier concerning the

patient records by mailing to the last known address of that

patient, or a family member or contact person for that

patient, and to the appropriate insurance carrier an

appropriate notice regarding the claiming or disposing of

patient records.

`(2) If, after providing the notification under paragraph (1),

patient records are not claimed during the 365-day period

described under that paragraph, the trustee shall mail, by

certified mail, at the end of such 365-day period a written

request to each appropriate Federal agency to request permission

from that agency to deposit the patient records with that agency,

except that no Federal agency is required to accept patient

records under this paragraph.

`(3) If, following the 365-day period described in paragraph (2)

and after providing the notification under paragraph (1), patient

records are not claimed by a patient or insurance provider, or

request is not granted by a Federal agency to deposit such

records with that agency, the trustee shall destroy those records

by--

`(A) if the records are written, shredding or burning the

records; or

`(B) if the records are magnetic, optical, or other

electronic records, by otherwise destroying those records so

that those records cannot be retrieved.'.

(b) CLERICAL AMENDMENT- The table of sections for chapter 3 of title

11, United States Code, is amended by inserting after the item

relating to section 350 the following:

`351. Disposal of patient records.'.

SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING A HEALTH CARE

BUSINESS AND OTHER ADMINISTRATIVE EXPENSES.

Section 503(b) of title 11, United States Code, as amended by this

Act, is amended by adding at the end the following:

`(8) the actual, necessary costs and expenses of closing a health

care business incurred by a trustee or by a Federal agency (as

that term is defined in section 551(1) of title 5) or a

department or agency of a State or political subdivision thereof,

including any cost or expense incurred--

`(A) in disposing of patient records in accordance with

section 351; or

`(B) in connection with transferring patients from the

health care business that is in the process of being closed

to another health care business;

`(9) with respect to a nonresidential real property lease

previously assumed under section 365, and subsequently rejected,

a sum equal to all monetary obligations due, excluding those

arising from or related to a failure to operate or penalty

provisions, for the period of 2 years following the later of the

rejection date or date of actual turnover of the premises,

without reduction or setoff for any reason whatsoever except for

sums actually received or to be received from a nondebtor, and

the claim for remaining sums due for the balance of the term of

the lease shall be a claim under section 502(b)(6); and'.

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

(a) IN GENERAL-

(1) APPOINTMENT OF OMBUDSMAN- Subchapter II of chapter 3 of title

11, United States Code, is amended by inserting after section 331

the following:

`Sec. 332. Appointment of ombudsman

`(a) IN GENERAL-

`(1) AUTHORITY TO APPOINT- Not later than 30 days after a case is

commenced by a health care business under chapter 7, 9, or 11,

the court shall order the appointment of an ombudsman to monitor

the quality of patient care to represent the interests of the

patients of the health care business, unless the court finds that

the appointment of the ombudsman is not necessary for the

protection of patients under the specific facts of the case.

`(2) QUALIFICATIONS- If the court orders the appointment of an

ombudsman, the United States trustee shall appoint 1

disinterested person, other than the United States trustee, to

serve as an ombudsman, including a person who is serving as a

State Long-Term Care Ombudsman appointed under title III or VII

of the Older Americans Act of 1965 (42 U.S.C. 3021 et seq., 3058

et seq.).

`(b) DUTIES- An ombudsman appointed under subsection (a) shall--

`(1) monitor the quality of patient care, to the extent necessary

under the circumstances, including interviewing patients and

physicians;

`(2) not later than 60 days after the date of appointment, and

not less frequently than every 60 days thereafter, report to the

court, at a hearing or in writing, regarding the quality of

patient care at the health care business involved; and

`(3) if the ombudsman determines that the quality of patient care

is declining significantly or is otherwise being materially

compromised, notify the court by motion or written report, with

notice to appropriate parties in interest, immediately upon

making that determination.

`(c) CONFIDENTIALITY- An ombudsman shall maintain any information

obtained by the ombudsman under this section that relates to patients

(including information relating to patient records) as confidential

information. The ombudsman may not review confidential patient

records, unless the court provides prior approval, with restrictions

on the ombudsman to protect the confidentiality of patient records.'.

(2) CLERICAL AMENDMENT- The table of sections for chapter 3 of

title 11, United Stat