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108th Congress 
 1st Session            HOUSE OF REPRESENTATIVES           Rept. 108-40
                                                                 Part 1
_______________________________________________________________________
 
    BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2003

                               __________

                              R E P O R T

                                 of the

                       COMMITTEE ON THE JUDICIARY

                        HOUSE OF REPRESENTATIVES

                              to accompany

                                H.R. 975


                             together with

               DISSENTING AND ADDITIONAL DISSENTING VIEWS




 March 18, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed







108th Congress                                             Rept. 108-40
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

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

    BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2003

                                _______
                                

 March 18, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

               DISSENTING AND ADDITIONAL DISSENTING VIEWS

                        [To accompany H.R. 975]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 975) to amend title 11 of the United States Code, 
and for other purposes, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................   121
Background and Need for the Legislation..........................   122
Hearings.........................................................   136
Committee Consideration..........................................   137
Vote of the Committee............................................   137
Committee Oversight Findings.....................................   145
Performance Goals and Objectives.................................   145
New Budget Authority and Tax Expenditures........................   145
Congressional Budget Office Cost Estimate........................   145
Constitutional Authority Statement...............................   156
Section-by-Section Analysis and Discussion.......................   156
Changes in Existing Law Made by the Bill, as Reported............   256
Committee Jurisdiction Letters...................................   452
Markup Transcript................................................   455
Dissenting Views.................................................   557
Additional Dissenting Views......................................   595
    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

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

    (a) Short Title.--This Act may be cited as the ``Bankruptcy Abuse 
Prevention and Consumer Protection Act of 2003''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

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

                    TITLE I--NEEDS-BASED BANKRUPTCY

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

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

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

                   Subtitle B--Priority Child Support

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

                 Subtitle C--Other Consumer Protections

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

                TITLE III--DISCOURAGING BANKRUPTCY ABUSE

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

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

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

            Subtitle B--Small Business Bankruptcy Provisions

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

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

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

                       TITLE VI--BANKRUPTCY DATA

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

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

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

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

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

                TITLE IX--FINANCIAL CONTRACT PROVISIONS

Sec. 901. Treatment of certain agreements by conservators or receivers 
of insured depository institutions.
Sec. 902. Authority of the 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 law amendments.
Sec. 908. Recordkeeping requirements.
Sec. 909. Exemptions from contemporaneous execution requirement.
Sec. 910. Damage measure.
Sec. 911. SIPC stay.

       TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN

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

              TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

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

                    TITLE XII--TECHNICAL AMENDMENTS

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

                 TITLE XIII--CONSUMER CREDIT DISCLOSURE

Sec. 1301. Enhanced disclosures under an open end credit plan.
Sec. 1302. Enhanced disclosure for credit extensions secured by a 
dwelling.
Sec. 1303. Disclosures related to ``introductory rates''.
Sec. 1304. Internet-based credit card solicitations.
Sec. 1305. Disclosures related to late payment deadlines and penalties.
Sec. 1306. Prohibition on certain actions for failure to incur finance 
charges.
Sec. 1307. Dual use debit card.
Sec. 1308. Study of bankruptcy impact of credit extended to dependent 
students.
Sec. 1309. Clarification of clear and conspicuous.

      TITLE XIV--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 so redesignated by 
                subparagraph (A) of this paragraph--
                            (i) in the first sentence--
                                    (I) by striking ``but not at the 
                                request or suggestion of'' and 
                                inserting ``trustee (or bankruptcy 
                                administrator, if any), or'';
                                    (II) by inserting ``, or, with the 
                                debtor's consent, convert such a case 
                                to a case under chapter 11 or 13 of 
                                this title,'' after ``consumer debts''; 
                                and
                                    (III) by striking ``a substantial 
                                abuse'' and inserting ``an abuse''; and
                            (ii) by striking the next to last sentence; 
                        and
                    (C) by adding at the end the following:
    ``(2)(A)(i) In considering under paragraph (1) whether the granting 
of relief would be an abuse of the provisions of this chapter, the 
court shall presume abuse exists if the debtor's current monthly income 
reduced by the amounts determined under clauses (ii), (iii), and (iv), 
and multiplied by 60 is not less than the lesser of--
            ``(I) 25 percent of the debtor's nonpriority unsecured 
        claims in the case, or $6,000, whichever is greater; or
            ``(II) $10,000.
    ``(ii)(I) The debtor's monthly expenses shall be the debtor's 
applicable monthly expense amounts specified under the National 
Standards and Local Standards, and the debtor's actual monthly expenses 
for the categories specified as Other Necessary Expenses issued by the 
Internal Revenue Service for the area in which the debtor resides, as 
in effect on the date of the order for relief, for the debtor, the 
dependents of the debtor, and the spouse of the debtor in a joint case, 
if the spouse is not otherwise a dependent. Notwithstanding any other 
provision of this clause, the monthly expenses of the debtor shall not 
include any payments for debts. In addition, the debtor's monthly 
expenses shall include the debtor's reasonably necessary expenses 
incurred to maintain the safety of the debtor and the family of the 
debtor from family violence as identified under section 309 of the 
Family Violence Prevention and Services Act, or other applicable 
Federal law. The expenses included in the debtor's monthly expenses 
described in the preceding sentence shall be kept confidential by the 
court. In addition, if it is demonstrated that it is reasonable and 
necessary, the debtor's monthly expenses may also include an additional 
allowance for food and clothing of up to 5 percent of the food and 
clothing categories as specified by the National Standards issued by 
the Internal Revenue Service.
    ``(II) In addition, the debtor's monthly expenses may include, if 
applicable, the continuation of actual expenses paid by the debtor that 
are reasonable and necessary for care and support of an elderly, 
chronically ill, or disabled household member or member of the debtor's 
immediate family (including parents, grandparents, siblings, children, 
and grandchildren of the debtor, the dependents of the debtor, and the 
spouse of the debtor in a joint case who is not a dependent) and who is 
unable to pay for such reasonable and necessary expenses.
    ``(III) In addition, for a debtor eligible for chapter 13, the 
debtor's monthly expenses may include the actual administrative 
expenses of administering a chapter 13 plan for the district in which 
the debtor resides, up to an amount of 10 percent of the projected plan 
payments, as determined under schedules issued by the Executive Office 
for United States Trustees.
    ``(IV) In addition, the debtor's monthly expenses may include the 
actual expenses for each dependent child less than 18 years of age, not 
to exceed $1,500 per year per child, to attend a private or public 
elementary or secondary school if the debtor provides documentation of 
such expenses and a detailed explanation of why such expenses are 
reasonable and necessary, and why such expenses are not already 
accounted for in the National Standards, Local Standards, or Other 
Necessary Expenses referred to in subclause (I).
    ``(V) In addition, the debtor's monthly expenses may include an 
allowance for housing and utilities, in excess of the allowance 
specified by the Local Standards for housing and utilities issued by 
the Internal Revenue Service, based on the actual expenses for home 
energy costs if the debtor provides documentation of such actual 
expenses and demonstrates that such actual expenses are reasonable and 
necessary.
    ``(iii) The debtor's average monthly payments on account of secured 
debts shall be calculated as the sum of--
            ``(I) the total of all amounts scheduled as contractually 
        due to secured creditors in each month of the 60 months 
        following the date of the petition; and
            ``(II) any additional payments to secured creditors 
        necessary for the debtor, in filing a plan under chapter 13 of 
        this title, to maintain possession of the debtor's primary 
        residence, motor vehicle, or other property necessary for the 
        support of the debtor and the debtor's dependents, that serves 
        as collateral for secured debts;
divided by 60.
    ``(iv) The debtor's expenses for payment of all priority claims 
(including priority child support and alimony claims) shall be 
calculated as the total amount of debts entitled to priority, divided 
by 60.
    ``(B)(i) In any proceeding brought under this subsection, the 
presumption of abuse may only be rebutted by demonstrating special 
circumstances that justify additional expenses or adjustments of 
current monthly income for which there is no reasonable alternative.
    ``(ii) In order to establish special circumstances, the debtor 
shall be required to itemize each additional expense or adjustment of 
income and to provide--
            ``(I) documentation for such expense or adjustment to 
        income; and
            ``(II) a detailed explanation of the special circumstances 
        that make such expenses or adjustment to income necessary and 
        reasonable.
    ``(iii) The debtor shall attest under oath to the accuracy of any 
information provided to demonstrate that additional expenses or 
adjustments to income are required.
    ``(iv) The presumption of abuse may only be rebutted if the 
additional expenses or adjustments to income referred to in clause (i) 
cause the product of the debtor's current monthly income reduced by the 
amounts determined under clauses (ii), (iii), and (iv) of subparagraph 
(A) when multiplied by 60 to be less than the lesser of--
            ``(I) 25 percent of the debtor's nonpriority unsecured 
        claims, or $6,000, whichever is greater; or
            ``(II) $10,000.
    ``(C) As part of the schedule of current income and expenditures 
required under section 521, the debtor shall include a statement of the 
debtor's current monthly income, and the calculations that determine 
whether a presumption arises under subparagraph (A)(i), that show how 
each such amount is calculated.
    ``(3) In considering under paragraph (1) whether the granting of 
relief would be an abuse of the provisions of this chapter in a case in 
which the presumption in subparagraph (A)(i) of such paragraph does not 
arise or is rebutted, the court shall consider--
            ``(A) whether the debtor filed the petition in bad faith; 
        or
            ``(B) the totality of the circumstances (including whether 
        the debtor seeks to reject a personal services contract and the 
        financial need for such rejection as sought by the debtor) of 
        the debtor's financial situation demonstrates abuse.
    ``(4)(A) The court, on its own initiative or on the motion of a 
party in interest, in accordance with the procedures described in rule 
9011 of the Federal Rules of Bankruptcy Procedure, may order the 
attorney for the debtor to reimburse the trustee for all reasonable 
costs in prosecuting a motion filed under section 707(b), including 
reasonable attorneys' fees, if--
            ``(i) a trustee files a motion for dismissal or conversion 
        under this subsection; and
            ``(ii) the court--
                    ``(I) grants such motion; and
                    ``(II) finds that the action of the attorney for 
                the debtor in filing under this chapter violated rule 
                9011 of the Federal Rules of Bankruptcy Procedure.
    ``(B) If the court finds that the attorney for the debtor violated 
rule 9011 of the Federal Rules of Bankruptcy Procedure, the court, on 
its own initiative or on the motion of a party in interest, in 
accordance with such procedures, may order--
            ``(i) the assessment of an appropriate civil penalty 
        against the attorney for the debtor; and
            ``(ii) the payment of such civil penalty to the trustee, 
        the United States trustee (or the bankruptcy administrator, if 
        any).
    ``(C) The signature of an attorney on a petition, pleading, or 
written motion shall constitute a certification that the attorney has--
            ``(i) performed a reasonable investigation into the 
        circumstances that gave rise to the petition, pleading, or 
        written motion; and
            ``(ii) determined that the petition, pleading, or written 
        motion--
                    ``(I) is well grounded in fact; and
                    ``(II) is warranted by existing law or a good faith 
                argument for the extension, modification, or reversal 
                of existing law and does not constitute an abuse under 
                paragraph (1).
    ``(D) The signature of an attorney on the petition shall constitute 
a certification that the attorney has no knowledge after an inquiry 
that the information in the schedules filed with such petition is 
incorrect.
    ``(5)(A) Except as provided in subparagraph (B) and subject to 
paragraph (6), the court, on its own initiative or on the motion of a 
party in interest, in accordance with the procedures described in rule 
9011 of the Federal Rules of Bankruptcy Procedure, may award a debtor 
all reasonable costs (including reasonable attorneys' fees) in 
contesting a motion filed by a party in interest (other than a trustee 
or United States trustee (or bankruptcy administrator, if any)) under 
this subsection if--
            ``(i) the court does not grant the motion; and
            ``(ii) the court finds that--
                    ``(I) the position of the party that filed the 
                motion violated rule 9011 of the Federal Rules of 
                Bankruptcy Procedure; or
                    ``(II) the attorney (if any) who filed the motion 
                did not comply with the requirements of clauses (i) and 
                (ii) of paragraph (4)(C), and the motion was made 
                solely for the purpose of coercing a debtor into 
                waiving a right guaranteed to the debtor under this 
                title.
    ``(B) A small business that has a claim of an aggregate amount less 
than $1,000 shall not be subject to subparagraph (A)(ii)(I).
    ``(C) For purposes of this paragraph--
            ``(i) the term `small business' means an unincorporated 
        business, partnership, corporation, association, or 
        organization that--
                    ``(I) has fewer than 25 full-time employees as 
                determined on the date on which the motion is filed; 
                and
                    ``(II) is engaged in commercial or business 
                activity; and
            ``(ii) the number of employees of a wholly owned subsidiary 
        of a corporation includes the employees of--
                    ``(I) a parent corporation; and
                    ``(II) any other subsidiary corporation of the 
                parent corporation.
    ``(6) Only the judge or United States trustee (or bankruptcy 
administrator, if any) may file a motion under section 707(b), if the 
current monthly income of the debtor, or in a joint case, the debtor 
and the debtor's spouse, as of the date of the order for relief, when 
multiplied by 12, is equal to or less than--
            ``(A) in the case of a debtor in a household of 1 person, 
        the median family income of the applicable State for 1 earner;
            ``(B) in the case of a debtor in a household of 2, 3, or 4 
        individuals, the highest median family income of the applicable 
        State for a family of the same number or fewer individuals; or
            ``(C) in the case of a debtor in a household exceeding 4 
        individuals, the highest median family income of the applicable 
        State for a family of 4 or fewer individuals, plus $525 per 
        month for each individual in excess of 4.
    ``(7)(A) No judge, United States trustee (or bankruptcy 
administrator, if any), trustee, or other party in interest may file a 
motion under paragraph (2) if the current monthly income of the debtor 
and the debtor's spouse combined, as of the date of the order for 
relief when multiplied by 12, is equal to or less than--
            ``(i) in the case of a debtor in a household of 1 person, 
        the median family income of the applicable State for 1 earner;
            ``(ii) in the case of a debtor in a household of 2, 3, or 4 
        individuals, the highest median family income of the applicable 
        State for a family of the same number or fewer individuals; or
            ``(iii) in the case of a debtor in a household exceeding 4 
        individuals, the highest median family income of the applicable 
        State for a family of 4 or fewer individuals, plus $525 per 
        month for each individual in excess of 4.
    ``(B) In a case that is not a joint case, current monthly income of 
the debtor's spouse shall not be considered for purposes of 
subparagraph (A) if--
            ``(i)(I) the debtor and the debtor's spouse are separated 
        under applicable nonbankruptcy law; or
            ``(II) the debtor and the debtor's spouse are living 
        separate and apart, other than for the purpose of evading 
        subparagraph (A); and
            ``(ii) the debtor files a statement under penalty of 
        perjury--
                    ``(I) specifying that the debtor meets the 
                requirement of subclause (I) or (II) of clause (i); and
                    ``(II) disclosing the aggregate, or best estimate 
                of the aggregate, amount of any cash or money payments 
                received from the debtor's spouse attributed to the 
                debtor's current monthly income.''.
    (b) Definition.--Section 101 of title 11, United States Code, is 
amended by inserting after paragraph (10) the following:
            ``(10A) `current monthly income'--
                    ``(A) means the average monthly income from all 
                sources that the debtor receives (or in a joint case 
                the debtor and the debtor's spouse receive) without 
                regard to whether such income is taxable income, 
                derived during the 6-month period ending on--
                            ``(i) the last day of the calendar month 
                        immediately preceding the date of the 
                        commencement of the case if the debtor files 
                        the schedule of current income required by 
                        section 521(a)(1)(B)(ii); or
                            ``(ii) the date on which current income is 
                        determined by the court for purposes of this 
                        title if the debtor does not file the schedule 
                        of current income required by section 
                        521(a)(1)(B)(ii); and
                    ``(B) includes any amount paid by any entity other 
                than the debtor (or in a joint case the debtor and the 
                debtor's spouse), on a regular basis for the household 
                expenses of the debtor or the debtor's dependents (and 
                in a joint case the debtor's spouse if not otherwise a 
                dependent), but excludes benefits received under the 
                Social Security Act, payments to victims of war crimes 
                or crimes against humanity on account of their status 
                as victims of such crimes, and payments to victims of 
                international terrorism (as defined in section 2331 of 
                title 18) or domestic terrorism (as defined in section 
                2331 of title 18) on account of their status as victims 
                of such terrorism;''.
    (c) United States Trustee and Bankruptcy Administrator Duties.--
Section 704 of title 11, United States Code, is amended--
            (1) by inserting ``(a)'' before ``The trustee shall--''; 
        and
            (2) by adding at the end the following:
    ``(b)(1) With respect to a debtor who is an individual in a case 
under this chapter--
            ``(A) the United States trustee (or the bankruptcy 
        administrator, if any) shall review all materials filed by the 
        debtor and, not later than 10 days after the date of the first 
        meeting of creditors, file with the court a statement as to 
        whether the debtor's case would be presumed to be an abuse 
        under section 707(b); and
            ``(B) not later than 5 days after receiving a statement 
        under subparagraph (A), the court shall provide a copy of the 
        statement to all creditors.
    ``(2) The United States trustee (or bankruptcy administrator, if 
any) shall, not later than 30 days after the date of filing a statement 
under paragraph (1), either file a motion to dismiss or convert under 
section 707(b) or file a statement setting forth the reasons the United 
States trustee (or the bankruptcy administrator, if any) does not 
consider such a motion to be appropriate, if the United States trustee 
(or the bankruptcy administrator, if any) determines that the debtor's 
case should be presumed to be an abuse under section 707(b) and the 
product of the debtor's current monthly income, multiplied by 12 is not 
less than--
            ``(A) in the case of a debtor in a household of 1 person, 
        the median family income of the applicable State for 1 earner; 
        or
            ``(B) in the case of a debtor in a household of 2 or more 
        individuals, the highest median family income of the applicable 
        State for a family of the same number or fewer individuals.''.
    (d) Notice.--Section 342 of title 11, United States Code, is 
amended by adding at the end the following:
    ``(d) In a case under chapter 7 of this title in which the debtor 
is an individual and in which the presumption of abuse arises under 
section 707(b), the clerk shall give written notice to all creditors 
not later than 10 days after the date of the filing of the petition 
that the presumption of abuse has arisen.''.
    (e) Nonlimitation of Information.--Nothing in this title shall 
limit the ability of a creditor to provide information to a judge 
(except for information communicated ex parte, unless otherwise 
permitted by applicable law), United States trustee (or bankruptcy 
administrator, if any), or trustee.
    (f) Dismissal for Certain Crimes.--Section 707 of title 11, United 
States Code, is amended by adding at the end the following:
    ``(c)(1) In this subsection--
            ``(A) the term `crime of violence' has the meaning given 
        such term in section 16 of title 18; and
            ``(B) the term `drug trafficking crime' has the meaning 
        given such term in section 924(c)(2) of title 18.
    ``(2) Except as provided in paragraph (3), after notice and a 
hearing, the court, on a motion by the victim of a crime of violence or 
a drug trafficking crime, may when it is in the best interest of the 
victim dismiss a voluntary case filed under this chapter by a debtor 
who is an individual if such individual was convicted of such crime.
    ``(3) The court may not dismiss a case under paragraph (2) if the 
debtor establishes by a preponderance of the evidence that the filing 
of a case under this chapter is necessary to satisfy a claim for a 
domestic support obligation.''.
    (g) Confirmation of Plan.--Section 1325(a) of title 11, United 
States Code, is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) in paragraph (6), by striking the period and inserting 
        a semicolon; and
            (3) by inserting after paragraph (6) the following:
            ``(7) the action of the debtor in filing the petition was 
        in good faith;''.
    (h) Applicability of Means Test to Chapter 13.--Section 1325(b) of 
title 11, United States Code, is amended--
            (1) in paragraph (1)(B), by inserting ``to unsecured 
        creditors'' after ``to make payments''; and
            (2) by striking paragraph (2) and inserting the following:
            ``(2) For purposes of this subsection, the term `disposable 
        income' means current monthly income received by the debtor 
        (other than child support payments, foster care payments, or 
        disability payments for a dependent child made in accordance 
        with applicable nonbankruptcy law to the extent reasonably 
        necessary to be expended for such child) less amounts 
        reasonably necessary to be expended--
                    ``(A)(i) for the maintenance or support of the 
                debtor or a dependent of the debtor, or for a domestic 
                support obligation, that first becomes payable after 
                the date the petition is filed; and
                    ``(ii) for charitable contributions (that meet the 
                definition of `charitable contribution' under section 
                548(d)(3) to a qualified religious or charitable entity 
                or organization (as defined in section 548(d)(4)) in an 
                amount not to exceed 15 percent of gross income of the 
                debtor for the year in which the contributions are 
                made; and
                    ``(B) if the debtor is engaged in business, for the 
                payment of expenditures necessary for the continuation, 
                preservation, and operation of such business.
            ``(3) Amounts reasonably necessary to be expended under 
        paragraph (2) shall be determined in accordance with 
        subparagraphs (A) and (B) of section 707(b)(2), if the debtor 
        has current monthly income, when multiplied by 12, greater 
        than--
                    ``(A) in the case of a debtor in a household of 1 
                person, the median family income of the applicable 
                State for 1 earner;
                    ``(B) in the case of a debtor in a household of 2, 
                3, or 4 individuals, the highest median family income 
                of the applicable State for a family of the same number 
                or fewer individuals; or
                    ``(C) in the case of a debtor in a household 
                exceeding 4 individuals, the highest median family 
                income of the applicable State for a family of 4 or 
                fewer individuals, plus $525 per month for each 
                individual in excess of 4.''.
    (i) Special Allowance for Health Insurance.--Section 1329(a) of 
title 11, United States Code, is amended--
            (1) in paragraph (2) by striking ``or'' at the end;
            (2) in paragraph (3) by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(4) reduce amounts to be paid under the plan by the 
        actual amount expended by the debtor to purchase health 
        insurance for the debtor (and for any dependent of the debtor 
        if such dependent does not otherwise have health insurance 
        coverage) if the debtor documents the cost of such insurance 
        and demonstrates that--
                    ``(A) such expenses are reasonable and necessary;
                    ``(B)(i) if the debtor previously paid for health 
                insurance, the amount is not materially larger than the 
                cost the debtor previously paid or the cost necessary 
                to maintain the lapsed policy; or
                    ``(ii) if the debtor did not have health insurance, 
                the amount is not materially larger than the reasonable 
                cost that would be incurred by a debtor who purchases 
                health insurance, who has similar income, expenses, 
                age, and health status, and who lives in the same 
                geographical location with the same number of 
                dependents who do not otherwise have health insurance 
                coverage; and
                    ``(C) the amount is not otherwise allowed for 
                purposes of determining disposable income under section 
                1325(b) of this title;
        and upon request of any party in interest, files proof that a 
        health insurance policy was purchased.''.
    (j) Adjustment of Dollar Amounts.--Section 104(b) of title 11, 
United States Code, is amended by striking ``and 523(a)(2)(C)'' each 
place it appears and inserting ``523(a)(2)(C), 707(b), and 
1325(b)(3)''.
    (k) Definition of `Median Family Income'.--Section 101 of title 11, 
United States Code, is amended by inserting after paragraph (39) the 
following:
            ``(39A) `median family income' means for any year--
                    ``(A) the median family income both calculated and 
                reported by the Bureau of the Census in the then most 
                recent year; and
                    ``(B) if not so calculated and reported in the then 
                current year, adjusted annually after such most recent 
                year until the next year in which median family income 
                is both calculated and reported by the Bureau of the 
                Census, to reflect the percentage change in the 
                Consumer Price Index for All Urban Consumers during the 
                period of years occurring after such most recent year 
                and before such current year;''.
    (k) Clerical Amendment.--The table of sections for chapter 7 of 
title 11, United States Code, is amended by striking the item relating 
to section 707 and inserting the following:

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

SEC. 103. SENSE OF CONGRESS AND STUDY.

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

SEC. 104. NOTICE OF ALTERNATIVES.

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

SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.

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

SEC. 106. CREDIT COUNSELING.

    (a) Who May Be a Debtor.--Section 109 of title 11, United States 
Code, is amended by adding at the end the following:
    ``(h)(1) Subject to paragraphs (2) and (3), and notwithstanding any 
other provision of this section, an individual may not be a debtor 
under this title unless such individual has, during the 180-day period 
preceding the date of filing of the petition by such individual, 
received from an approved nonprofit budget and credit counseling agency 
described in section 111(a) an individual or group briefing (including 
a briefing conducted by telephone or on the Internet) that outlined the 
opportunities for available credit counseling and assisted such 
individual in performing a related budget analysis.
    ``(2)(A) Paragraph (1) shall not apply with respect to a debtor who 
resides in a district for which the United States trustee (or the 
bankruptcy administrator, if any) determines that the approved 
nonprofit budget and credit counseling agencies for such district are 
not reasonably able to provide adequate services to the additional 
individuals who would otherwise seek credit counseling from such 
agencies by reason of the requirements of paragraph (1).
    ``(B) The United States trustee (or the bankruptcy administrator, 
if any) who makes a determination described in subparagraph (A) shall 
review such determination not later than 1 year after the date of such 
determination, and not less frequently than annually thereafter. 
Notwithstanding the preceding sentence, a nonprofit budget and credit 
counseling agency may be disapproved by the United States trustee (or 
the bankruptcy administrator, if any) at any time.
    ``(3)(A) Subject to subparagraph (B), the requirements of paragraph 
(1) shall not apply with respect to a debtor who submits to the court a 
certification that--
            ``(i) describes exigent circumstances that merit a waiver 
        of the requirements of paragraph (1);
            ``(ii) states that the debtor requested credit counseling 
        services from an approved nonprofit budget and credit 
        counseling agency, but was unable to obtain the services 
        referred to in paragraph (1) during the 5-day period beginning 
        on the date on which the debtor made that request; and
            ``(iii) is satisfactory to the court.
    ``(B) With respect to a debtor, an exemption under subparagraph (A) 
shall cease to apply to that debtor on the date on which the debtor 
meets the requirements of paragraph (1), but in no case may the 
exemption apply to that debtor after the date that is 30 days after the 
debtor files a petition, except that the court, for cause, may order an 
additional 15 days.''.
    (b) Chapter 7 Discharge.--Section 727(a) of title 11, United States 
Code, is amended--
            (1) in paragraph (9), by striking ``or'' at the end;
            (2) in paragraph (10), by striking the period and inserting 
        ``; or''; and
            (3) by adding at the end the following:
            ``(11) after filing the petition, the debtor failed to 
        complete an instructional course concerning personal financial 
        management described in section 111, except that this paragraph 
        shall not apply with respect to a debtor who resides in a 
        district for which the United States trustee (or the bankruptcy 
        administrator, if any) determines that the approved 
        instructional courses are not adequate to service the 
        additional individuals who would otherwise be required to 
        complete such instructional courses under this section (The 
        United States trustee (or the bankruptcy administrator, if any) 
        who makes a determination described in this paragraph shall 
        review such determination not later than 1 year after the date 
        of such determination, and not less frequently than annually 
        thereafter.).''.
    (c) Chapter 13 Discharge.--Section 1328 of title 11, United States 
Code, is amended by adding at the end the following:
    ``(g)(1) The court shall not grant a discharge under this section 
to a debtor unless after filing a petition the debtor has completed an 
instructional course concerning personal financial management described 
in section 111.
    ``(2) Paragraph (1) shall not apply with respect to a debtor who 
resides in a district for which the United States trustee (or the 
bankruptcy administrator, if any) determines that the approved 
instructional courses are not adequate to service the additional 
individuals who would otherwise be required to complete such 
instructional course by reason of the requirements of paragraph (1).
    ``(3) The United States trustee (or the bankruptcy administrator, 
if any) who makes a determination described in paragraph (2) shall 
review such determination not later than 1 year after the date of such 
determination, and not less frequently than annually thereafter.''.
    (d) Debtor's Duties.--Section 521 of title 11, United States Code, 
is amended--
            (1) by inserting ``(a)'' before ``The debtor shall--''; and
            (2) by adding at the end the following:
    ``(b) In addition to the requirements under subsection (a), a 
debtor who is an individual shall file with the court--
            ``(1) a certificate from the approved nonprofit budget and 
        credit counseling agency that provided the debtor services 
        under section 109(h) describing the services provided to the 
        debtor; and
            ``(2) a copy of the debt repayment plan, if any, developed 
        under section 109(h) through the approved nonprofit budget and 
        credit counseling agency referred to in paragraph (1).''.
    (e) General Provisions.--
            (1) In general.--Chapter 1 of title 11, United States Code, 
        is amended by adding at the end the following:

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

    ``(a) The clerk shall maintain a publicly available list of--
            ``(1) nonprofit budget and credit counseling agencies that 
        provide 1 or more services described in section 109(h) 
        currently approved by the United States trustee (or the 
        bankruptcy administrator, if any); and
            ``(2) instructional courses concerning personal financial 
        management currently approved by the United States trustee (or 
        the bankruptcy administrator, if any), as applicable.
    ``(b) The United States trustee (or bankruptcy administrator, if 
any) shall only approve a nonprofit budget and credit counseling agency 
or an instructional course concerning personal financial management as 
follows:
            ``(1) The United States trustee (or bankruptcy 
        administrator, if any) shall have thoroughly reviewed the 
        qualifications of the nonprofit budget and credit counseling 
        agency or of the provider of the instructional course under the 
        standards set forth in this section, and the services or 
        instructional courses that will be offered by such agency or 
        such provider, and may require such agency or such provider 
        that has sought approval to provide information with respect to 
        such review.
            ``(2) The United States trustee (or bankruptcy 
        administrator, if any) shall have determined that such agency 
        or such instructional course fully satisfies the applicable 
        standards set forth in this section.
            ``(3) If a nonprofit budget and credit counseling agency or 
        instructional course did not appear on the approved list for 
        the district under subsection (a) immediately before approval 
        under this section, approval under this subsection of such 
        agency or such instructional course shall be for a probationary 
        period not to exceed 6 months.
            ``(4) At the conclusion of the applicable probationary 
        period under paragraph (3), the United States trustee (or 
        bankruptcy administrator, if any) may only approve for an 
        additional 1-year period, and for successive 1-year periods 
        thereafter, an agency or instructional course that has 
        demonstrated during the probationary or applicable subsequent 
        period of approval that such agency or instructional course--
                    ``(A) has met the standards set forth under this 
                section during such period; and
                    ``(B) can satisfy such standards in the future.
            ``(5) Not later than 30 days after any final decision under 
        paragraph (4), an interested person may seek judicial review of 
        such decision in the appropriate district court of the United 
        States.
    ``(c)(1) The United States trustee (or the bankruptcy 
administrator, if any) shall only approve a nonprofit budget and credit 
counseling agency that demonstrates that it will provide qualified 
counselors, maintain adequate provision for safekeeping and payment of 
client funds, provide adequate counseling with respect to client credit 
problems, and deal responsibly and effectively with other matters 
relating to the quality, effectiveness, and financial security of the 
services it provides.
    ``(2) To be approved by the United States trustee (or the 
bankruptcy administrator, if any), a nonprofit budget and credit 
counseling agency shall, at a minimum--
            ``(A) have a board of directors the majority of which--
                    ``(i) are not employed by such agency; and
                    ``(ii) will not directly or indirectly benefit 
                financially from the outcome of the counseling services 
                provided by such agency;
            ``(B) if a fee is charged for counseling services, charge a 
        reasonable fee, and provide services without regard to ability 
        to pay the fee;
            ``(C) provide for safekeeping and payment of client funds, 
        including an annual audit of the trust accounts and appropriate 
        employee bonding;
            ``(D) provide full disclosures to a client, including 
        funding sources, counselor qualifications, possible impact on 
        credit reports, and any costs of such program that will be paid 
        by such client and how such costs will be paid;
            ``(E) provide adequate counseling with respect to a 
        client's credit problems that includes an analysis of such 
        client's current financial condition, factors that caused such 
        financial condition, and how such client can develop a plan to 
        respond to the problems without incurring negative amortization 
        of debt;
            ``(F) provide trained counselors who receive no commissions 
        or bonuses based on the outcome of the counseling services 
        provided by such agency, and who have adequate experience, and 
        have been adequately trained to provide counseling services to 
        individuals in financial difficulty, including the matters 
        described in subparagraph (E);
            ``(G) demonstrate adequate experience and background in 
        providing credit counseling; and
            ``(H) have adequate financial resources to provide 
        continuing support services for budgeting plans over the life 
        of any repayment plan.
    ``(d) The United States trustee (or the bankruptcy administrator, 
if any) shall only approve an instructional course concerning personal 
financial management--
            ``(1) for an initial probationary period under subsection 
        (b)(3) if the course will provide at a minimum--
                    ``(A) trained personnel with adequate experience 
                and training in providing effective instruction and 
                services;
                    ``(B) learning materials and teaching methodologies 
                designed to assist debtors in understanding personal 
                financial management and that are consistent with 
                stated objectives directly related to the goals of such 
                instructional course;
                    ``(C) adequate facilities situated in reasonably 
                convenient locations at which such instructional course 
                is offered, except that such facilities may include the 
                provision of such instructional course by telephone or 
                through the Internet, if such instructional course is 
                effective; and
                    ``(D) the preparation and retention of reasonable 
                records (which shall include the debtor's bankruptcy 
                case number) to permit evaluation of the effectiveness 
                of such instructional course, including any evaluation 
                of satisfaction of instructional course requirements 
                for each debtor attending such instructional course, 
                which shall be available for inspection and evaluation 
                by the Executive Office for United States Trustees, the 
                United States trustee (or the bankruptcy administrator, 
                if any), or the chief bankruptcy judge for the district 
                in which such instructional course is offered; and
            ``(2) for any 1-year period if the provider thereof has 
        demonstrated that the course meets the standards of paragraph 
        (1) and, in addition--
                    ``(A) has been effective in assisting a substantial 
                number of debtors to understand personal financial 
                management; and
                    ``(B) is otherwise likely to increase substantially 
                the debtor's understanding of personal financial 
                management.
    ``(e) The district court may, at any time, investigate the 
qualifications of a nonprofit budget and credit counseling agency 
referred to in subsection (a), and request production of documents to 
ensure the integrity and effectiveness of such agency. The district 
court may, at any time, remove from the approved list under subsection 
(a) a nonprofit budget and credit counseling agency upon finding such 
agency does not meet the qualifications of subsection (b).
    ``(f) The United States trustee (or the bankruptcy administrator, 
if any) shall notify the clerk that a nonprofit budget and credit 
counseling agency or an instructional course is no longer approved, in 
which case the clerk shall remove it from the list maintained under 
subsection (a).
    ``(g)(1) No nonprofit budget and credit counseling agency may 
provide to a credit reporting agency information concerning whether a 
debtor has received or sought instruction concerning personal financial 
management from such agency.
    ``(2) A nonprofit budget and credit counseling agency that 
willfully or negligently fails to comply with any requirement under 
this title with respect to a debtor shall be liable for damages in an 
amount equal to the sum of--
            ``(A) any actual damages sustained by the debtor as a 
        result of the violation; and
            ``(B) any court costs or reasonable attorneys' fees (as 
        determined by the court) incurred in an action to recover those 
        damages.''.
            (2) Clerical amendment.--The table of sections for chapter 
        1 of title 11, United States Code, is amended by adding at the 
        end the following:

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

SEC. 107. SCHEDULES OF REASONABLE AND NECESSARY EXPENSES.

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

                 TITLE II--ENHANCED CONSUMER PROTECTION

          Subtitle A--Penalties for Abusive Creditor Practices

SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.

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

SEC. 202. EFFECT OF DISCHARGE.

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

SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION AGREEMENT PRACTICES.

    (a) In General.--Section 524 of title 11, United States Code, as 
amended section 202, is amended--
            (1) in subsection (c), by striking paragraph (2) and 
        inserting the following:
            ``(2) the debtor received the disclosures described in 
        subsection (k) at or before the time at which the debtor signed 
        the agreement;''; and
            (2) by adding at the end the following:
    ``(k)(1) The disclosures required under subsection (c)(2) shall 
consist of the disclosure statement described in paragraph (3), 
completed as required in that paragraph, together with the agreement 
specified in subsection (c), statement, declaration, motion and order 
described, respectively, in paragraphs (4) through (8), and shall be 
the only disclosures required in connection with entering into such 
agreement.
    ``(2) Disclosures made under paragraph (1) shall be made clearly 
and conspicuously and in writing. The terms `Amount Reaffirmed' and 
`Annual Percentage Rate' shall be disclosed more conspicuously than 
other terms, data or information provided in connection with this 
disclosure, except that the phrases `Before agreeing to reaffirm a 
debt, review these important disclosures' and `Summary of Reaffirmation 
Agreement' may be equally conspicuous. Disclosures may be made in a 
different order and may use terminology different from that set forth 
in paragraphs (2) through (8), except that the terms `Amount 
Reaffirmed' and `Annual Percentage Rate' must be used where indicated.
    ``(3) The disclosure statement required under this paragraph shall 
consist of the following:
            ``(A) The statement: `Part A: Before agreeing to reaffirm a 
        debt, review these important disclosures:';
            ``(B) Under the heading `Summary of Reaffirmation 
        Agreement', the statement: `This Summary is made pursuant to 
        the requirements of the Bankruptcy Code';
            ``(C) The `Amount Reaffirmed', using that term, which shall 
        be--
                    ``(i) the total amount of debt that the debtor 
                agrees to reaffirm by entering into an agreement of the 
                kind specified in subsection (c), and
                    ``(ii) the total of any fees and costs accrued as 
                of the date of the disclosure statement, related to 
                such total amount.
            ``(D) In conjunction with the disclosure of the `Amount 
        Reaffirmed', the statements--
                    ``(i) `The amount of debt you have agreed to 
                reaffirm'; and
                    ``(ii) `Your credit agreement may obligate you to 
                pay additional amounts which may come due after the 
                date of this disclosure. Consult your credit 
                agreement.'.
            ``(E) The `Annual Percentage Rate', using that term, which 
        shall be disclosed as--
                    ``(i) if, at the time the petition is filed, the 
                debt is an extension of credit under an open end credit 
                plan, as the terms `credit' and `open end credit plan' 
                are defined in section 103 of the Truth in Lending Act, 
                then--
                            ``(I) the annual percentage rate determined 
                        under paragraphs (5) and (6) of section 127(b) 
                        of the Truth in Lending Act, as applicable, as 
                        disclosed to the debtor in the most recent 
                        periodic statement prior to entering into an 
                        agreement of the kind specified in subsection 
                        (c) or, if no such periodic statement has been 
                        given to the debtor during the prior 6 months, 
                        the annual percentage rate as it would have 
                        been so disclosed at the time the disclosure 
                        statement is given to the debtor, or to the 
                        extent this annual percentage rate is not 
                        readily available or not applicable, then
                            ``(II) the simple interest rate applicable 
                        to the amount reaffirmed as of the date the 
                        disclosure statement is given to the debtor, or 
                        if different simple interest rates apply to 
                        different balances, the simple interest rate 
                        applicable to each such balance, identifying 
                        the amount of each such balance included in the 
                        amount reaffirmed, or
                            ``(III) if the entity making the disclosure 
                        elects, to disclose the annual percentage rate 
                        under subclause (I) and the simple interest 
                        rate under subclause (II);
                    ``(ii) if, at the time the petition is filed, the 
                debt is an extension of credit other than under an open 
                end credit plan, as the terms `credit' and `open end 
                credit plan' are defined in section 103 of the Truth in 
                Lending Act, then--
                            ``(I) the annual percentage rate under 
                        section 128(a)(4) of the Truth in Lending Act, 
                        as disclosed to the debtor in the most recent 
                        disclosure statement given to the debtor prior 
                        to the entering into an agreement of the kind 
                        specified in subsection (c) with respect to the 
                        debt, or, if no such disclosure statement was 
                        given to the debtor, the annual percentage rate 
                        as it would have been so disclosed at the time 
                        the disclosure statement is given to the 
                        debtor, or to the extent this annual percentage 
                        rate is not readily available or not 
                        applicable, then
                            ``(II) the simple interest rate applicable 
                        to the amount reaffirmed as of the date the 
                        disclosure statement is given to the debtor, or 
                        if different simple interest rates apply to 
                        different balances, the simple interest rate 
                        applicable to each such balance, identifying 
                        the amount of such balance included in the 
                        amount reaffirmed, or
                            ``(III) if the entity making the disclosure 
                        elects, to disclose the annual percentage rate 
                        under (I) and the simple interest rate under 
                        (II).
            ``(F) If the underlying debt transaction was disclosed as a 
        variable rate transaction on the most recent disclosure given 
        under the Truth in Lending Act, by stating `The interest rate 
        on your loan may be a variable interest rate which changes from 
        time to time, so that the annual percentage rate disclosed here 
        may be higher or lower.'.
            ``(G) If the debt is secured by a security interest which 
        has not been waived in whole or in part or determined to be 
        void by a final order of the court at the time of the 
        disclosure, by disclosing that a security interest or lien in 
        goods or property is asserted over some or all of the debts the 
        debtor is reaffirming and listing the items and their original 
        purchase price that are subject to the asserted security 
        interest, or if not a purchase-money security interest then 
        listing by items or types and the original amount of the loan.
            ``(H) At the election of the creditor, a statement of the 
        repayment schedule using 1 or a combination of the following--
                    ``(i) by making the statement: `Your first payment 
                in the amount of $______ is due on ______ but the 
                future payment amount may be different. Consult your 
                reaffirmation agreement or credit agreement, as 
                applicable.', and stating the amount of the first 
                payment and the due date of that payment in the places 
                provided;
                    ``(ii) by making the statement: `Your payment 
                schedule will be:', and describing the repayment 
                schedule with the number, amount, and due dates or 
                period of payments scheduled to repay the debts 
                reaffirmed to the extent then known by the disclosing 
                party; or
                    ``(iii) by describing the debtor's repayment 
                obligations with reasonable specificity to the extent 
                then known by the disclosing party.
            ``(I) The following statement: `Note: When this disclosure 
        refers to what a creditor ``may'' do, it does not use the word 
        ``may'' to give the creditor specific permission. The word 
        ``may'' is used to tell you what might occur if the law permits 
        the creditor to take the action. If you have questions about 
        your reaffirming a debt or what the law requires, consult with 
        the attorney who helped you negotiate this agreement 
        reaffirming a debt. If you don't have an attorney helping you, 
        the judge will explain the effect of your reaffirming a debt 
        when the hearing on the reaffirmation agreement is held.'.
            ``(J)(i) The following additional statements:
    `` `Reaffirming a debt is a serious financial decision. The law 
requires you to take certain steps to make sure the decision is in your 
best interest. If these steps are not completed, the reaffirmation 
agreement is not effective, even though you have signed it.
            `` `1. Read the disclosures in this Part A carefully. 
        Consider the decision to reaffirm carefully. Then, if you want 
        to reaffirm, sign the reaffirmation agreement in Part B (or you 
        may use a separate agreement you and your creditor agree on).
            `` `2. Complete and sign Part D and be sure you can afford 
        to make the payments you are agreeing to make and have received 
        a copy of the disclosure statement and a completed and signed 
        reaffirmation agreement.
            `` `3. If you were represented by an attorney during the 
        negotiation of your reaffirmation agreement, the attorney must 
        have signed the certification in Part C.
            `` `4. If you were not represented by an attorney during 
        the negotiation of your reaffirmation agreement, you must have 
        completed and signed Part E.
            `` `5. The original of this disclosure must be filed with 
        the court by you or your creditor. If a separate reaffirmation 
        agreement (other than the one in Part B) has been signed, it 
        must be attached.
            `` `6. If you were represented by an attorney during the 
        negotiation of your reaffirmation agreement, your reaffirmation 
        agreement becomes effective upon filing with the court unless 
        the reaffirmation is presumed to be an undue hardship as 
        explained in Part D.
            `` `7. If you were not represented by an attorney during 
        the negotiation of your reaffirmation agreement, it will not be 
        effective unless the court approves it. The court will notify 
        you of the hearing on your reaffirmation agreement. You must 
        attend this hearing in bankruptcy court where the judge will 
        review your reaffirmation agreement. The bankruptcy court must 
        approve your reaffirmation agreement as consistent with your 
        best interests, except that no court approval is required if 
        your reaffirmation agreement is for a consumer debt secured by 
        a mortgage, deed of trust, security deed, or other lien on your 
        real property, like your home.
    `` `Your right to rescind (cancel) your reaffirmation agreement. 
You may rescind (cancel) your reaffirmation agreement at any time 
before the bankruptcy court enters a discharge order, or before the 
expiration of the 60-day period that begins on the date your 
reaffirmation agreement is filed with the court, whichever occurs 
later. To rescind (cancel) your reaffirmation agreement, you must 
notify the creditor that your reaffirmation agreement is rescinded (or 
canceled).
    `` `What are your obligations if you reaffirm the debt? A 
reaffirmed debt remains your personal legal obligation. It is not 
discharged in your bankruptcy case. That means that if you default on 
your reaffirmed debt after your bankruptcy case is over, your creditor 
may be able to take your property or your wages. Otherwise, your 
obligations will be determined by the reaffirmation agreement which may 
have changed the terms of the original agreement. For example, if you 
are reaffirming an open end credit agreement, the creditor may be 
permitted by that agreement or applicable law to change the terms of 
that agreement in the future under certain conditions.
    `` `Are you required to enter into a reaffirmation agreement by any 
law? No, you are not required to reaffirm a debt by any law. Only agree 
to reaffirm a debt if it is in your best interest. Be sure you can 
afford the payments you agree to make.
    `` `What if your creditor has a security interest or lien? Your 
bankruptcy discharge does not eliminate any lien on your property. A 
``lien'' is often referred to as a security interest, deed of trust, 
mortgage or security deed. Even if you do not reaffirm and your 
personal liability on the debt is discharged, because of the lien your 
creditor may still have the right to take the security property if you 
do not pay the debt or default on it. If the lien is on an item of 
personal property that is exempt under your State's law or that the 
trustee has abandoned, you may be able to redeem the item rather than 
reaffirm the debt. To redeem, you make a single payment to the creditor 
equal to the current value of the security property, as agreed by the 
parties or determined by the court.'.
            ``(ii) In the case of a reaffirmation under subsection 
        (m)(2), numbered paragraph 6 in the disclosures required by 
        clause (i) of this subparagraph shall read as follows:
            `` `6. If you were represented by an attorney during the 
        negotiation of your reaffirmation agreement, your reaffirmation 
        agreement becomes effective upon filing with the court.'.
    ``(4) The form of such agreement required under this paragraph 
shall consist of the following:
    `` `Part B: Reaffirmation Agreement. I (we) agree to reaffirm the 
debts arising under the credit agreement described below.
    `` `Brief description of credit agreement:
    `` `Description of any changes to the credit agreement made as part 
of this reaffirmation agreement:
    `` `Signature:                    Date:
    `` `Borrower:
    `` `Co-borrower, if also reaffirming these debts:
    `` `Accepted by creditor:
    `` `Date of creditor acceptance:'.
    ``(5) The declaration shall consist of the following:
            ``(A) The following certification:
    `` `Part C: Certification by Debtor's Attorney (If Any).
    `` `I hereby certify that (1) this agreement represents a fully 
informed and voluntary agreement by the debtor; (2) this agreement does 
not impose an undue hardship on the debtor or any dependent of the 
debtor; and (3) I have fully advised the debtor of the legal effect and 
consequences of this agreement and any default under this agreement.
    `` `Signature of Debtor's Attorney:      Date:'.
            ``(B) If a presumption of undue hardship has been 
        established with respect to such agreement, such certification 
        shall state that in the opinion of the attorney, the debtor is 
        able to make the payment.
    ``(C) In the case of a reaffirmation agreement under subsection 
(m)(2), subparagraph (B) is not applicable.
    ``(6)(A) The statement in support of such agreement, which the 
debtor shall sign and date prior to filing with the court, shall 
consist of the following:
    `` `Part D: Debtor's Statement in Support of Reaffirmation 
Agreement.
    `` `1. I believe this reaffirmation agreement will not impose an 
undue hardship on my dependents or me. I can afford to make the 
payments on the reaffirmed debt because my monthly income (take home 
pay plus any other income received) is $______, and my actual current 
monthly expenses including monthly payments on post-bankruptcy debt and 
other reaffirmation agreements total $______, leaving $______ to make 
the required payments on this reaffirmed debt. I understand that if my 
income less my monthly expenses does not leave enough to make the 
payments, this reaffirmation agreement is presumed to be an undue 
hardship on me and must be reviewed by the court. However, this 
presumption may be overcome if I explain to the satisfaction of the 
court how I can afford to make the payments here: ______.
    `` `2. I received a copy of the Reaffirmation Disclosure Statement 
in Part A and a completed and signed reaffirmation agreement.'.
    ``(B) Where the debtor is represented by an attorney and is 
reaffirming a debt owed to a creditor defined in section 
19(b)(1)(A)(iv) of the Federal Reserve Act, the statement of support of 
the reaffirmation agreement, which the debtor shall sign and date prior 
to filing with the court, shall consist of the following:
    `` `I believe this reaffirmation agreement is in my financial 
interest. I can afford to make the payments on the reaffirmed debt. I 
received a copy of the Reaffirmation Disclosure Statement in Part A and 
a completed and signed reaffirmation agreement.'.
    ``(7) The motion that may be used if approval of such agreement by 
the court is required in order for it to be effective, shall be signed 
and dated by the movant and shall consist of the following:
    `` `Part E: Motion for Court Approval (To be completed only if the 
debtor is not represented by an attorney.). I (we), the debtor(s), 
affirm the following to be true and correct:
    `` `I am not represented by an attorney in connection with this 
reaffirmation agreement.
    `` `I believe this reaffirmation agreement is in my best interest 
based on the income and expenses I have disclosed in my Statement in 
Support of this reaffirmation agreement, and because (provide any 
additional relevant reasons the court should consider):
    `` `Therefore, I ask the court for an order approving this 
reaffirmation agreement.'.
    ``(8) The court order, which may be used to approve such agreement, 
shall consist of the following:
    `` `Court Order: The court grants the debtor's motion and approves 
the reaffirmation agreement described above.'.
    ``(l) Notwithstanding any other provision of this title the 
following shall apply:
            ``(1) A creditor may accept payments from a debtor before 
        and after the filing of an agreement of the kind specified in 
        subsection (c) with the court.
            ``(2) A creditor may accept payments from a debtor under 
        such agreement that the creditor believes in good faith to be 
        effective.
            ``(3) The requirements of subsections (c)(2) and (k) shall 
        be satisfied if disclosures required under those subsections 
        are given in good faith.
    ``(m)(1) Until 60 days after an agreement of the kind specified in 
subsection (c) is filed with the court (or such additional period as 
the court, after notice and a hearing and for cause, orders before the 
expiration of such period), it shall be presumed that such agreement is 
an undue hardship on the debtor if the debtor's monthly income less the 
debtor's monthly expenses as shown on the debtor's completed and signed 
statement in support of such agreement required under subsection 
(k)(6)(A) is less than the scheduled payments on the reaffirmed debt. 
This presumption shall be reviewed by the court. The presumption may be 
rebutted in writing by the debtor if the statement includes an 
explanation that identifies additional sources of funds to make the 
payments as agreed upon under the terms of such agreement. If the 
presumption is not rebutted to the satisfaction of the court, the court 
may disapprove such agreement. No agreement shall be disapproved 
without notice and a hearing to the debtor and creditor, and such 
hearing shall be concluded before the entry of the debtor's discharge.
    ``(2) This subsection does not apply to reaffirmation agreements 
where the creditor is a credit union, as defined in section 
19(b)(1)(A)(iv) of the Federal Reserve Act.''.
    (b) Law Enforcement.--
            (1) In general.--Chapter 9 of title 18, United States Code, 
        is amended by adding at the end the following:

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

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

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

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

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

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

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

                   Subtitle B--Priority Child Support

SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.

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

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

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

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

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

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

    Section 362(b) of title 11, United States Code, is amended by 
striking paragraph (2) and inserting the following:
            ``(2) under subsection (a)--
                    ``(A) of the commencement or continuation of a 
                civil action or proceeding--
                            ``(i) for the establishment of paternity;
                            ``(ii) for the establishment or 
                        modification of an order for domestic support 
                        obligations;
                            ``(iii) concerning child custody or 
                        visitation;
                            ``(iv) for the dissolution of a marriage, 
                        except to the extent that such proceeding seeks 
                        to determine the division of property that is 
                        property of the estate; or
                            ``(v) regarding domestic violence;
                    ``(B) of the collection of a domestic support 
                obligation from property that is not property of the 
                estate;
                    ``(C) with respect to the withholding of income 
                that is property of the estate or property of the 
                debtor for payment of a domestic support obligation 
                under a judicial or administrative order or a statute;
                    ``(D) of the withholding, suspension, or 
                restriction of a driver's license, a professional or 
                occupational license, or a recreational license, under 
                State law, as specified in section 466(a)(16) of the 
                Social Security Act;
                    ``(E) of the reporting of overdue support owed by a 
                parent to any consumer reporting agency as specified in 
                section 466(a)(7) of the Social Security Act;
                    ``(F) of the interception of a tax refund, as 
                specified in sections 464 and 466(a)(3) of the Social 
                Security Act or under an analogous State law; or
                    ``(G) of the enforcement of a medical obligation, 
                as specified under title IV of the Social Security 
                Act;''.

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

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

SEC. 216. CONTINUED LIABILITY OF PROPERTY.

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

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

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

SEC. 218. DISPOSABLE INCOME DEFINED.

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

SEC. 219. COLLECTION OF CHILD SUPPORT.

    (a) Duties of Trustee Under Chapter 7.--Section 704 of title 11, 
United States Code, as amended by section 102, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (8), by striking ``and'' at the 
                end;
                    (B) in paragraph (9), by striking the period and 
                inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(10) if with respect to the debtor there is a claim for a 
        domestic support obligation, provide the applicable notice 
        specified in subsection (c); and''; and
            (2) by adding at the end the following:
    ``(c)(1) In a case described in subsection (a)(10) to which 
subsection (a)(10) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of the claim 
        described in subsection (a)(10) of such claim and of the right 
        of such holder to use the services of the State child support 
        enforcement agency established under sections 464 and 466 of 
        the Social Security Act for the State in which such holder 
        resides, for assistance in collecting child support during and 
        after the case under this title;
            ``(ii) include in the notice provided under clause (i) the 
        address and telephone number of such State child support 
        enforcement agency; and
            ``(iii) include in the notice provided under clause (i) an 
        explanation of the rights of such holder to payment of such 
        claim under this chapter;
            ``(B)(i) provide written notice to such State child support 
        enforcement agency of such claim; and
            ``(ii) include in the notice provided under clause (i) the 
        name, address, and telephone number of such holder; and
            ``(C) at such time as the debtor is granted a discharge 
        under section 727, provide written notice to such holder and to 
        such State child support enforcement agency of--
                    ``(i) the granting of the discharge;
                    ``(ii) the last recent known address of the debtor;
                    ``(iii) the last recent known name and address of 
                the debtor's employer; and
                    ``(iv) the name of each creditor that holds a claim 
                that--
                            ``(I) is not discharged under paragraph 
                        (2), (4), or (14A) of section 523(a); or
                            ``(II) was reaffirmed by the debtor under 
                        section 524(c).
    ``(2)(A) The holder of a claim described in subsection (a)(10) or 
the State child support enforcement agency of the State in which such 
holder resides may request from a creditor described in paragraph 
(1)(C)(iv) the last known address of the debtor.
    ``(B) Notwithstanding any other provision of law, a creditor that 
makes a disclosure of a last known address of a debtor in connection 
with a request made under subparagraph (A) shall not be liable by 
reason of making such disclosure.''.
    (b) Duties of Trustee Under Chapter 11.--Section 1106 of title 11, 
United States Code, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (6), by striking ``and'' at the 
                end;
                    (B) in paragraph (7), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(8) if with respect to the debtor there is a claim for a 
        domestic support obligation, provide the applicable notice 
        specified in subsection (c).''; and
            (2) by adding at the end the following:
    ``(c)(1) In a case described in subsection (a)(8) to which 
subsection (a)(8) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of the claim 
        described in subsection (a)(8) of such claim and of the right 
        of such holder to use the services of the State child support 
        enforcement agency established under sections 464 and 466 of 
        the Social Security Act for the State in which such holder 
        resides, for assistance in collecting child support during and 
        after the case under this title; and
            ``(ii) include in the notice required by clause (i) the 
        address and telephone number of such State child support 
        enforcement agency;
            ``(B)(i) provide written notice to such State child support 
        enforcement agency of such claim; and
            ``(ii) include in the notice required by clause (i) the 
        name, address, and telephone number of such holder; and
            ``(C) at such time as the debtor is granted a discharge 
        under section 1141, provide written notice to such holder and 
        to such State child support enforcement agency of--
                    ``(i) the granting of the discharge;
                    ``(ii) the last recent known address of the debtor;
                    ``(iii) the last recent known name and address of 
                the debtor's employer; and
                    ``(iv) the name of each creditor that holds a claim 
                that--
                            ``(I) is not discharged under paragraph 
                        (2), (4), or (14A) of section 523(a); or
                            ``(II) was reaffirmed by the debtor under 
                        section 524(c).
    ``(2)(A) The holder of a claim described in subsection (a)(8) or 
the State child enforcement support agency of the State in which such 
holder resides may request from a creditor described in paragraph 
(1)(C)(iv) the last known address of the debtor.
    ``(B) Notwithstanding any other provision of law, a creditor that 
makes a disclosure of a last known address of a debtor in connection 
with a request made under subparagraph (A) shall not be liable by 
reason of making such disclosure.''.
    (c) Duties of Trustee Under Chapter 12.--Section 1202 of title 11, 
United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (4), by striking ``and'' at the 
                end;
                    (B) in paragraph (5), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(6) if with respect to the debtor there is a claim for a 
        domestic support obligation, provide the applicable notice 
        specified in subsection (c).''; and
            (2) by adding at the end the following:
    ``(c)(1) In a case described in subsection (b)(6) to which 
subsection (b)(6) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of the claim 
        described in subsection (b)(6) of such claim and of the right 
        of such holder to use the services of the State child support 
        enforcement agency established under sections 464 and 466 of 
        the Social Security Act for the State in which such holder 
        resides, for assistance in collecting child support during and 
        after the case under this title; and
            ``(ii) include in the notice provided under clause (i) the 
        address and telephone number of such State child support 
        enforcement agency;
            ``(B)(i) provide written notice to such State child support 
        enforcement agency of such claim; and
            ``(ii) include in the notice provided under clause (i) the 
        name, address, and telephone number of such holder; and
            ``(C) at such time as the debtor is granted a discharge 
        under section 1228, provide written notice to such holder and 
        to such State child support enforcement agency of--
                    ``(i) the granting of the discharge;
                    ``(ii) the last recent known address of the debtor;
                    ``(iii) the last recent known name and address of 
                the debtor's employer; and
                    ``(iv) the name of each creditor that holds a claim 
                that--
                            ``(I) is not discharged under paragraph 
                        (2), (4), or (14A) of section 523(a); or
                            ``(II) was reaffirmed by the debtor under 
                        section 524(c).
    ``(2)(A) The holder of a claim described in subsection (b)(6) or 
the State child support enforcement agency of the State in which such 
holder resides may request from a creditor described in paragraph 
(1)(C)(iv) the last known address of the debtor.
    ``(B) Notwithstanding any other provision of law, a creditor that 
makes a disclosure of a last known address of a debtor in connection 
with a request made under subparagraph (A) shall not be liable by 
reason of making that disclosure.''.
    (d) Duties of Trustee Under Chapter 13.--Section 1302 of title 11, 
United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (4), by striking ``and'' at the 
                end;
                    (B) in paragraph (5), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(6) if with respect to the debtor there is a claim for a 
        domestic support obligation, provide the applicable notice 
        specified in subsection (d).''; and
            (2) by adding at the end the following:
    ``(d)(1) In a case described in subsection (b)(6) to which 
subsection (b)(6) applies, the trustee shall--
            ``(A)(i) provide written notice to the holder of the claim 
        described in subsection (b)(6) of such claim and of the right 
        of such holder to use the services of the State child support 
        enforcement agency established under sections 464 and 466 of 
        the Social Security Act for the State in which such holder 
        resides, for assistance in collecting child support during and 
        after the case under this title; and
            ``(ii) include in the notice provided under clause (i) the 
        address and telephone number of such State child support 
        enforcement agency;
            ``(B)(i) provide written notice to such State child support 
        enforcement agency of such claim; and
            ``(ii) include in the notice provided under clause (i) the 
        name, address, and telephone number of such holder; and
            ``(C) at such time as the debtor is granted a discharge 
        under section 1328, provide written notice to such holder and 
        to such State child support enforcement agency of--
                    ``(i) the granting of the discharge;
                    ``(ii) the last recent known address of the debtor;
                    ``(iii) the last recent known name and address of 
                the debtor's employer; and
                    ``(iv) the name of each creditor that holds a claim 
                that--
                            ``(I) is not discharged under paragraph (2) 
                        or (4) of section 523(a); or
                            ``(II) was reaffirmed by the debtor under 
                        section 524(c).
    ``(2)(A) The holder of a claim described in subsection (b)(6) or 
the State child support enforcement agency of the State in which such 
holder resides may request from a creditor described in paragraph 
(1)(C)(iv) the last known address of the debtor.
    ``(B) Notwithstanding any other provision of law, a creditor that 
makes a disclosure of a last known address of a debtor in connection 
with a request made under subparagraph (A) shall not be liable by 
reason of making that disclosure.''.

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

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

                 Subtitle C--Other Consumer Protections

SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY FILINGS.

    Section 110 of title 11, United States Code, is amended--
            (1) in subsection (a)(1), by striking ``or an employee of 
        an attorney'' and inserting ``for the debtor or an employee of 
        such attorney under the direct supervision of such attorney'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by adding at the end the 
                following: ``If a bankruptcy petition preparer is not 
                an individual, then an officer, principal, responsible 
                person, or partner of the bankruptcy petition preparer 
                shall be required to--
            ``(A) sign the document for filing; and
            ``(B) print on the document the name and address of that 
        officer, principal, responsible person, or partner.''; and
                    (B) by striking paragraph (2) and inserting the 
                following:
    ``(2)(A) Before preparing any document for filing or accepting any 
fees from a debtor, the bankruptcy petition preparer shall provide to 
the debtor a written notice which shall be on an official form 
prescribed by the Judicial Conference of the United States in 
accordance with rule 9009 of the Federal Rules of Bankruptcy Procedure.
    ``(B) The notice under subparagraph (A)--
            ``(i) shall inform the debtor in simple language that a 
        bankruptcy petition preparer is not an attorney and may not 
        practice law or give legal advice;
            ``(ii) may contain a description of examples of legal 
        advice that a bankruptcy petition preparer is not authorized to 
        give, in addition to any advice that the preparer may not give 
        by reason of subsection (e)(2); and
            ``(iii) shall--
                    ``(I) be signed by the debtor and, under penalty of 
                perjury, by the bankruptcy petition preparer; and
                    ``(II) be filed with any document for filing.'';
            (3) in subsection (c)--
                    (A) in paragraph (2)--
                            (i) by striking ``(2) For purposes'' and 
                        inserting ``(2)(A) Subject to subparagraph (B), 
                        for purposes''; and
                            (ii) by adding at the end the following:
    ``(B) If a bankruptcy petition preparer is not an individual, the 
identifying number of the bankruptcy petition preparer shall be the 
Social Security account number of the officer, principal, responsible 
person, or partner of the bankruptcy petition preparer.''; and
                    (B) by striking paragraph (3);
            (4) in subsection (d)--
                    (A) by striking ``(d)(1)'' and inserting ``(d)''; 
                and
                    (B) by striking paragraph (2);
            (5) in subsection (e)--
                    (A) by striking paragraph (2); and
                    (B) by adding at the end the following:
    ``(2)(A) A bankruptcy petition preparer may not offer a potential 
bankruptcy debtor any legal advice, including any legal advice 
described in subparagraph (B).
    ``(B) The legal advice referred to in subparagraph (A) includes 
advising the debtor--
            ``(i) whether--
                    ``(I) to file a petition under this title; or
                    ``(II) commencing a case under chapter 7, 11, 12, 
                or 13 is appropriate;
            ``(ii) whether the debtor's debts will be discharged in a 
        case under this title;
            ``(iii) whether the debtor will be able to retain the 
        debtor's home, car, or other property after commencing a case 
        under this title;
            ``(iv) concerning--
                    ``(I) the tax consequences of a case brought under 
                this title; or
                    ``(II) the dischargeability of tax claims;
            ``(v) whether the debtor may or should promise to repay 
        debts to a creditor or enter into a reaffirmation agreement 
        with a creditor to reaffirm a debt;
            ``(vi) concerning how to characterize the nature of the 
        debtor's interests in property or the debtor's debts; or
            ``(vii) concerning bankruptcy procedures and rights.'';
            (6) in subsection (f)--
                    (A) by striking ``(f)(1)'' and inserting ``(f)''; 
                and
                    (B) by striking paragraph (2);
            (7) in subsection (g)--
                    (A) by striking ``(g)(1)'' and inserting ``(g)''; 
                and
                    (B) by striking paragraph (2);
            (8) in subsection (h)--
                    (A) by redesignating paragraphs (1) through (4) as 
                paragraphs (2) through (5), respectively;
                    (B) by inserting before paragraph (2), as so 
                redesignated, the following:
    ``(1) The Supreme Court may promulgate rules under section 2075 of 
title 28, or the Judicial Conference of the United States may prescribe 
guidelines, for setting a maximum allowable fee chargeable by a 
bankruptcy petition preparer. A bankruptcy petition preparer shall 
notify the debtor of any such maximum amount before preparing any 
document for filing for a debtor or accepting any fee from the 
debtor.'';
                    (C) in paragraph (2), as so redesignated--
                            (i) by striking ``Within 10 days after the 
                        date of the filing of a petition, a bankruptcy 
                        petition preparer shall file a'' and inserting 
                        ``A'';
                            (ii) by inserting ``by the bankruptcy 
                        petition preparer shall be filed together with 
                        the petition,'' after ``perjury''; and
                            (iii) by adding at the end the following: 
                        ``If rules or guidelines setting a maximum fee 
                        for services have been promulgated or 
                        prescribed under paragraph (1), the declaration 
                        under this paragraph shall include a 
                        certification that the bankruptcy petition 
                        preparer complied with the notification 
                        requirement under paragraph (1).'';
                    (D) by striking paragraph (3), as so redesignated, 
                and inserting the following:
    ``(3)(A) The court shall disallow and order the immediate turnover 
to the bankruptcy trustee any fee referred to in paragraph (2) found to 
be in excess of the value of any services--
            ``(i) rendered by the bankruptcy petition preparer during 
        the 12-month period immediately preceding the date of the 
        filing of the petition; or
            ``(ii) found to be in violation of any rule or guideline 
        promulgated or prescribed under paragraph (1).
    ``(B) All fees charged by a bankruptcy petition preparer may be 
forfeited in any case in which the bankruptcy petition preparer fails 
to comply with this subsection or subsection (b), (c), (d), (e), (f), 
or (g).
    ``(C) An individual may exempt any funds recovered under this 
paragraph under section 522(b).''; and
                    (E) in paragraph (4), as so redesignated, by 
                striking ``or the United States trustee'' and inserting 
                ``the United States trustee (or the bankruptcy 
                administrator, if any) or the court, on the initiative 
                of the court,'';
            (9) in subsection (i)(1), by striking the matter preceding 
        subparagraph (A) and inserting the following:
    ``(i)(1) If a bankruptcy petition preparer violates this section or 
commits any act that the court finds to be fraudulent, unfair, or 
deceptive, on the motion of the debtor, trustee, United States trustee 
(or the bankruptcy administrator, if any), and after notice and a 
hearing, the court shall order the bankruptcy petition preparer to pay 
to the debtor--'';
            (10) in subsection (j)--
                    (A) in paragraph (2)--
                            (i) in subparagraph (A)(i)(I), by striking 
                        ``a violation of which subjects a person to 
                        criminal penalty'';
                            (ii) in subparagraph (B)--
                                    (I) by striking ``or has not paid a 
                                penalty'' and inserting ``has not paid 
                                a penalty''; and
                                    (II) by inserting ``or failed to 
                                disgorge all fees ordered by the 
                                court'' after ``a penalty imposed under 
                                this section,'';
                    (B) by redesignating paragraph (3) as paragraph 
                (4); and
                    (C) by inserting after paragraph (2) the following:
    ``(3) The court, as part of its contempt power, may enjoin a 
bankruptcy petition preparer that has failed to comply with a previous 
order issued under this section. The injunction under this paragraph 
may be issued on the motion of the court, the trustee, or the United 
States trustee (or the bankruptcy administrator, if any).''; and
            (11) by adding at the end the following:
    ``(l)(1) A bankruptcy petition preparer who fails to comply with 
any provision of subsection (b), (c), (d), (e), (f), (g), or (h) may be 
fined not more than $500 for each such failure.
    ``(2) The court shall triple the amount of a fine assessed under 
paragraph (1) in any case in which the court finds that a bankruptcy 
petition preparer--
            ``(A) advised the debtor to exclude assets or income that 
        should have been included on applicable schedules;
            ``(B) advised the debtor to use a false Social Security 
        account number;
            ``(C) failed to inform the debtor that the debtor was 
        filing for relief under this title; or
            ``(D) prepared a document for filing in a manner that 
        failed to disclose the identity of the bankruptcy petition 
        preparer.
    ``(3) A debtor, trustee, creditor, or United States trustee (or the 
bankruptcy administrator, if any) may file a motion for an order 
imposing a fine on the bankruptcy petition preparer for any violation 
of this section.
    ``(4)(A) Fines imposed under this subsection in judicial districts 
served by United States trustees shall be paid to the United States 
trustee, who shall deposit an amount equal to such fines in a special 
account of the United States Trustee System Fund referred to in section 
586(e)(2) of title 28. Amounts deposited under this subparagraph shall 
be available to fund the enforcement of this section on a national 
basis.
    ``(B) Fines imposed under this subsection in judicial districts 
served by bankruptcy administrators shall be deposited as offsetting 
receipts to the fund established under section 1931 of title 28, and 
shall remain available until expended to reimburse any appropriation 
for the amount paid out of such appropriation for expenses of the 
operation and maintenance of the courts of the United States.''.

SEC. 222. SENSE OF CONGRESS.

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

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

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

SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

    (a) In General.--Section 522 of title 11, United States Code, is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (2)--
                            (i) in subparagraph (A), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (B), by striking the 
                        period at the end and inserting ``; and'';
                            (iii) by adding at the end the following:
            ``(C) retirement funds to the extent that those funds are 
        in a fund or account that is exempt from taxation under section 
        401, 403, 408, 408A, 414, 457, or 501(a) of the Internal 
        Revenue Code of 1986.''; and
                            (iv) by striking ``(2)(A) any property'' 
                        and inserting:
    ``(3) Property listed in this paragraph is--
            ``(A) any property'';
                    (B) by striking paragraph (1) and inserting:
    ``(2) Property listed in this paragraph is property that is 
specified under subsection (d), unless the State law that is applicable 
to the debtor under paragraph (3)(A) specifically does not so 
authorize.'';
                    (C) by striking ``(b) Notwithstanding'' and 
                inserting ``(b)(1) Notwithstanding'';
                    (D) by striking ``paragraph (2)'' each place it 
                appears and inserting ``paragraph (3)'';
                    (E) by striking ``paragraph (1)'' each place it 
                appears and inserting ``paragraph (2)'';
                    (F) by striking ``Such property is--''; and
                    (G) by adding at the end the following:
    ``(4) For purposes of paragraph (3)(C) and subsection (d)(12), the 
following shall apply:
            ``(A) If the retirement funds are in a retirement fund that 
        has received a favorable determination under section 7805 of 
        the Internal Revenue Code of 1986, and that determination is in 
        effect as of the date of the filing of the petition in a case 
        under this title, those funds shall be presumed to be exempt 
        from the estate.
            ``(B) If the retirement funds are in a retirement fund that 
        has not received a favorable determination under such section 
        7805, those funds are exempt from the estate if the debtor 
        demonstrates that--
                    ``(i) no prior determination to the contrary has 
                been made by a court or the Internal Revenue Service; 
                and
                    ``(ii)(I) the retirement fund is in substantial 
                compliance with the applicable requirements of the 
                Internal Revenue Code of 1986; or
                    ``(II) the retirement fund fails to be in 
                substantial compliance with the applicable requirements 
                of the Internal Revenue Code of 1986 and the debtor is 
                not materially responsible for that failure.
            ``(C) A direct transfer of retirement funds from 1 fund or 
        account that is exempt from taxation under section 401, 403, 
        408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 
        1986, under section 401(a)(31) of the Internal Revenue Code of 
        1986, or otherwise, shall not cease to qualify for exemption 
        under paragraph (3)(C) or subsection (d)(12) by reason of such 
        direct transfer.
            ``(D)(i) Any distribution that qualifies as an eligible 
        rollover distribution within the meaning of section 402(c) of 
        the Internal Revenue Code of 1986 or that is described in 
        clause (ii) shall not cease to qualify for exemption under 
        paragraph (3)(C) or subsection (d)(12) by reason of such 
        distribution.
            ``(ii) A distribution described in this clause is an amount 
        that--
                    ``(I) has been distributed from a fund or account 
                that is exempt from taxation under section 401, 403, 
                408, 408A, 414, 457, or 501(a) of the Internal Revenue 
                Code of 1986; and
                    ``(II) to the extent allowed by law, is deposited 
                in such a fund or account not later than 60 days after 
                the distribution of such amount.''; and
            (2) in subsection (d)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``subsection (b)(1)'' and inserting 
                ``subsection (b)(2)''; and
                    (B) by adding at the end the following:
            ``(12) Retirement funds to the extent that those funds are 
        in a fund or account that is exempt from taxation under section 
        401, 403, 408, 408A, 414, 457, or 501(a) of the Internal 
        Revenue Code of 1986.''.
    (b) Automatic Stay.--Section 362(b) of title 11, United States 
Code, is amended--
            (1) in paragraph (17), by striking ``or'' at the end;
            (2) in paragraph (18), by striking the period and inserting 
        a semicolon; and
            (3) by inserting after paragraph (18) the following:
            ``(19) under subsection (a), of withholding of income from 
        a debtor's wages and collection of amounts withheld, under the 
        debtor's agreement authorizing that withholding and collection 
        for the benefit of a pension, profit-sharing, stock bonus, or 
        other plan established under section 401, 403, 408, 408A, 414, 
        457, or 501(c) of the Internal Revenue Code of 1986, that is 
        sponsored by the employer of the debtor, or an affiliate, 
        successor, or predecessor of such employer--
                    ``(A) to the extent that the amounts withheld and 
                collected are used solely for payments relating to a 
                loan from a plan under section 408(b)(1) of the 
                Employee Retirement Income Security Act of 1974 or is 
                subject to section 72(p) of the Internal Revenue Code 
                of 1986; or
                    ``(B) a loan from a thrift savings plan permitted 
                under subchapter III of chapter 84 of title 5, that 
                satisfies the requirements of section 8433(g) of such 
                title;
        but nothing in this paragraph may be construed to provide that 
        any loan made under a governmental plan under section 414(d), 
        or a contract or account under section 403(b), of the Internal 
        Revenue Code of 1986 constitutes a claim or a debt under this 
        title;''.
    (c) Exceptions To Discharge.--Section 523(a) of title 11, United 
States Code, as amended by section 215, is amended by inserting after 
paragraph (17) the following:
            ``(18) owed to a pension, profit-sharing, stock bonus, or 
        other plan established under section 401, 403, 408, 408A, 414, 
        457, or 501(c) of the Internal Revenue Code of 1986, under--
                    ``(A) a loan permitted under section 408(b)(1) of 
                the Employee Retirement Income Security Act of 1974, or 
                subject to section 72(p) of the Internal Revenue Code 
                of 1986; or
                    ``(B) a loan from a thrift savings plan permitted 
                under subchapter III of chapter 84 of title 5, that 
                satisfies the requirements of section 8433(g) of such 
                title;
        but nothing in this paragraph may be construed to provide that 
        any loan made under a governmental plan under section 414(d), 
        or a contract or account under section 403(b), of the Internal 
        Revenue Code of 1986 constitutes a claim or a debt under this 
        title; or''.
    (d) Plan Contents.--Section 1322 of title 11, United States Code, 
is amended by adding at the end the following:
    ``(f) A plan may not materially alter the terms of a loan described 
in section 362(b)(19) and any amounts required to repay such loan shall 
not constitute `disposable income' under section 1325.''.
    (e) Asset Limitation.--
            (1) Limitation.--Section 522 of title 11, United States 
        Code, is amended by adding at the end the following:
    ``(n) For assets in individual retirement accounts described in 
section 408 or 408A of the Internal Revenue Code of 1986, other than a 
simplified employee pension under section 408(k) of such Code or a 
simple retirement account under section 408(p) of such Code, the 
aggregate value of such assets exempted under this section, without 
regard to amounts attributable to rollover contributions under section 
402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the Internal 
Revenue Code of 1986, and earnings thereon, shall not exceed $1,000,000 
in a case filed by a debtor who is an individual, except that such 
amount may be increased if the interests of justice so require.''.
            (2) Adjustment of dollar amounts.--Paragraphs (1) and (2) 
        of section 104(b) of title 11, United States Code, are amended 
        by inserting ``522(n),'' after ``522(d),''.

SEC. 225. PROTECTION OF EDUCATION SAVINGS IN BANKRUPTCY.

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

SEC. 226. DEFINITIONS.

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

SEC. 227. RESTRICTIONS ON DEBT RELIEF AGENCIES.

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

``Sec. 526. Restrictions on debt relief agencies

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

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

SEC. 228. DISCLOSURES.

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

``Sec. 527. Disclosures

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

``527. Disclosures.''.

SEC. 229. REQUIREMENTS FOR DEBT RELIEF AGENCIES.

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

``Sec. 528. Requirements for debt relief agencies

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

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

SEC. 230. GAO STUDY.

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

SEC. 231. PROTECTION OF PERSONALLY IDENTIFIABLE INFORMATION.

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

SEC. 232. CONSUMER PRIVACY OMBUDSMAN.

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

``Sec. 332. Consumer privacy ombudsman

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

``332. Consumer privacy ombudsman.''.

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

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

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

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

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

               TITLE III --DISCOURAGING BANKRUPTCY ABUSE

SEC. 301. TECHNICAL AMENDMENTS.

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

SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.

    Section 362(c) of title 11, United States Code, is amended--
            (1) in paragraph (1), by striking ``and'' at the end;
            (2) in paragraph (2), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(3) if a single or joint case is filed by or against 
        debtor who is an individual in a case under chapter 7, 11, or 
        13, and if a single or joint case of the debtor was pending 
        within the preceding 1-year period but was dismissed, other 
        than a case refiled under a chapter other than chapter 7 after 
        dismissal under section 707(b)--
                    ``(A) the stay under subsection (a) with respect to 
                any action taken with respect to a debt or property 
                securing such debt or with respect to any lease shall 
                terminate with respect to the debtor on the 30th day 
                after the filing of the later case;
                    ``(B) on the motion of a party in interest for 
                continuation of the automatic stay and upon notice and 
                a hearing, the court may extend the stay in particular 
                cases as to any or all creditors (subject to such 
                conditions or limitations as the court may then impose) 
                after notice and a hearing completed before the 
                expiration of the 30-day period only if the party in 
                interest demonstrates that the filing of the later case 
                is in good faith as to the creditors to be stayed; and
                    ``(C) for purposes of subparagraph (B), a case is 
                presumptively filed not in good faith (but such 
                presumption may be rebutted by clear and convincing 
                evidence to the contrary)--
                            ``(i) as to all creditors, if--
                                    ``(I) more than 1 previous case 
                                under any of chapters 7, 11, and 13 in 
                                which the individual was a debtor was 
                                pending within the preceding 1-year 
                                period;
                                    ``(II) a previous case under any of 
                                chapters 7, 11, and 13 in which the 
                                individual was a debtor was dismissed 
                                within such 1-year period, after the 
                                debtor failed to--
                                            ``(aa) file or amend the 
                                        petition or other documents as 
                                        required by this title or the 
                                        court without substantial 
                                        excuse (but mere inadvertence 
                                        or negligence shall not be a 
                                        substantial excuse unless the 
                                        dismissal was caused by the 
                                        negligence of the debtor's 
                                        attorney);
                                            ``(bb) provide adequate 
                                        protection as ordered by the 
                                        court; or
                                            ``(cc) perform the terms of 
                                        a plan confirmed by the court; 
                                        or
                                    ``(III) there has not been a 
                                substantial change in the financial or 
                                personal affairs of the debtor since 
                                the dismissal of the next most previous 
                                case under chapter 7, 11, or 13 or any 
                                other reason to conclude that the later 
                                case will be concluded--
                                            ``(aa) if a case under 
                                        chapter 7, with a discharge; or
                                            ``(bb) if a case under 
                                        chapter 11 or 13, with a 
                                        confirmed plan that will be 
                                        fully performed; and
                            ``(ii) as to any creditor that commenced an 
                        action under subsection (d) in a previous case 
                        in which the individual was a debtor if, as of 
                        the date of dismissal of such case, that action 
                        was still pending or had been resolved by 
                        terminating, conditioning, or limiting the stay 
                        as to actions of such creditor; and
            ``(4)(A)(i) if a single or joint case is filed by or 
        against a debtor who is an individual under this title, and if 
        2 or more single or joint cases of the debtor were pending 
        within the previous year but were dismissed, other than a case 
        refiled under section 707(b), the stay under subsection (a) 
        shall not go into effect upon the filing of the later case; and
            ``(ii) on request of a party in interest, the court shall 
        promptly enter an order confirming that no stay is in effect;
            ``(B) if, within 30 days after the filing of the later 
        case, a party in interest requests the court may order the stay 
        to take effect in the case as to any or all creditors (subject 
        to such conditions or limitations as the court may impose), 
        after notice and a hearing, only if the party in interest 
        demonstrates that the filing of the later case is in good faith 
        as to the creditors to be stayed;
            ``(C) a stay imposed under subparagraph (B) shall be 
        effective on the date of the entry of the order allowing the 
        stay to go into effect; and
            ``(D) for purposes of subparagraph (B), a case is 
        presumptively filed not in good faith (but such presumption may 
        be rebutted by clear and convincing evidence to the contrary)--
                    ``(i) as to all creditors if--
                            ``(I) 2 or more previous cases under this 
                        title in which the individual was a debtor were 
                        pending within the 1-year period;
                            ``(II) a previous case under this title in 
                        which the individual was a debtor was dismissed 
                        within the time period stated in this paragraph 
                        after the debtor failed to file or amend the 
                        petition or other documents as required by this 
                        title or the court without substantial excuse 
                        (but mere inadvertence or negligence shall not 
                        be substantial excuse unless the dismissal was 
                        caused by the negligence of the debtor's 
                        attorney), failed to provide adequate 
                        protection as ordered by the court, or failed 
                        to perform the terms of a plan confirmed by the 
                        court; or
                            ``(III) there has not been a substantial 
                        change in the financial or personal affairs of 
                        the debtor since the dismissal of the next most 
                        previous case under this title, or any other 
                        reason to conclude that the later case will not 
                        be concluded, if a case under chapter 7, with a 
                        discharge, and if a case under chapter 11 or 
                        13, with a confirmed plan that will be fully 
                        performed; or
                    ``(ii) as to any creditor that commenced an action 
                under subsection (d) in a previous case in which the 
                individual was a debtor if, as of the date of dismissal 
                of such case, such action was still pending or had been 
                resolved by terminating, conditioning, or limiting the 
                stay as to such action of such creditor.''.

SEC. 303. CURBING ABUSIVE FILINGS.

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

SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.

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

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

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

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

    (a) In General.--Section 1325(a)(5)(B)(i) of title 11, United 
States Code, is amended to read as follows:
                    ``(i) the plan provides that--
                            ``(I) the holder of such claim retain the 
                        lien securing such claim until the earlier of--
                                    ``(aa) the payment of the 
                                underlying debt determined under 
                                nonbankruptcy law; or
                                    ``(bb) discharge under section 
                                1328; and
                            ``(II) if the case under this chapter is 
                        dismissed or converted without completion of 
                        the plan, such lien shall also be retained by 
                        such holder to the extent recognized by 
                        applicable nonbankruptcy law; and''.
    (b) Restoring the Foundation for Secured Credit.--Section 1325(a) 
of title 11, United States Code, is amended by adding at the end the 
following:
``For purposes of paragraph (5), section 506 shall not apply to a claim 
described in that paragraph if the creditor has a purchase money 
security interest securing the debt that is the subject of the claim, 
the debt was incurred within the 910-day preceding the date of the 
filing of the petition, and the collateral for that debt consists of a 
motor vehicle (as defined in section 30102 of title 49) acquired for 
the personal use of the debtor, or if collateral for that debt consists 
of any other thing of value, if the debt was incurred during the 1-year 
period preceding that filing.''.
    (c) Definitions.--Section 101 of title 11, United States Code, is 
amended--
            (1) by inserting after paragraph (13) the following:
            ``(13A) `debtor's principal residence'--
                    ``(A) means a residential structure, including 
                incidental property, without regard to whether that 
                structure is attached to real property; and
                    ``(B) includes an individual condominium or 
                cooperative unit, a mobile or manufactured home, or 
                trailer;''; and
            (2) by inserting after paragraph (27), the following:
            ``(27A) `incidental property' means, with respect to a 
        debtor's principal residence--
                    ``(A) property commonly conveyed with a principal 
                residence in the area where the real property is 
                located;
                    ``(B) all easements, rights, appurtenances, 
                fixtures, rents, royalties, mineral rights, oil or gas 
                rights or profits, water rights, escrow funds, or 
                insurance proceeds; and
                    ``(C) all replacements or additions;''.

SEC. 307. DOMICILIARY REQUIREMENTS FOR EXEMPTIONS.

    Section 522(b)(3) of title 11, United States Code, as so designated 
by section 106, is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``180 days'' and inserting ``730 
                days''; and
                    (B) by striking ``, or for a longer portion of such 
                180-day period than in any other place'' and inserting 
                ``or if the debtor's domicile has not been located at a 
                single State for such 730-day period, the place in 
                which the debtor's domicile was located for 180 days 
                immediately preceding the 730-day period or for a 
                longer portion of such 180-day period than in any other 
                place''; and
            (2) by adding at the end the following:
``If the effect of the domiciliary requirement under subparagraph (A) 
is to render the debtor ineligible for any exemption, the debtor may 
elect to exempt property that is specified under subsection (d).''.

SEC. 308. REDUCTION OF HOMESTEAD EXEMPTION FOR FRAUD.

    Section 522 of title 11, United States Code, as amended by section 
224, is amended--
            (1) in subsection (b)(3)(A), as so designated by this Act, 
        by inserting ``subject to subsections (o) and (p),'' before 
        ``any property''; and
            (2) by adding at the end the following:
    ``(o) For purposes of subsection (b)(3)(A), and notwithstanding 
subsection (a), the value of an interest in--
            ``(1) real or personal property that the debtor or a 
        dependent of the debtor uses as a residence;
            ``(2) a cooperative that owns property that the debtor or a 
        dependent of the debtor uses as a residence;
            ``(3) a burial plot for the debtor or a dependent of the 
        debtor; or
            ``(4) real or personal property that the debtor or a 
        dependent of the debtor claims as a homestead;
shall be reduced to the extent that such value is attributable to any 
portion of any property that the debtor disposed of in the 10-year 
period ending on the date of the filing of the petition with the intent 
to hinder, delay, or defraud a creditor and that the debtor could not 
exempt, or that portion that the debtor could not exempt, under 
subsection (b), if on such date the debtor had held the property so 
disposed of.''.

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

    (a) Stopping Abusive Conversions From Chapter 13.--Section 
348(f)(1) of title 11, United States Code, is amended--
            (1) in subparagraph (A), by striking ``and'' at the end;
            (2) in subparagraph (B)--
                    (A) by striking ``in the converted case, with 
                allowed secured claims'' and inserting ``only in a case 
                converted to a case under chapter 11 or 12, but not in 
                a case converted to a case under chapter 7, with 
                allowed secured claims in cases under chapters 11 and 
                12''; and
                    (B) by striking the period and inserting ``; and''; 
                and
            (3) by adding at the end the following:
            ``(C) with respect to cases converted from chapter 13--
                    ``(i) the claim of any creditor holding security as 
                of the date of the petition shall continue to be 
                secured by that security unless the full amount of such 
                claim determined under applicable nonbankruptcy law has 
                been paid in full as of the date of conversion, 
                notwithstanding any valuation or determination of the 
                amount of an allowed secured claim made for the 
                purposes of the case under chapter 13; and
                    ``(ii) unless a prebankruptcy default has been 
                fully cured under the plan at the time of conversion, 
                in any proceeding under this title or otherwise, the 
                default shall have the effect given under applicable 
                nonbankruptcy law.''.
    (b) Giving Debtors the Ability To Keep Leased Personal Property by 
Assumption.--Section 365 of title 11, United States Code, is amended by 
adding at the end the following:
    ``(p)(1) If a lease of personal property is rejected or not timely 
assumed by the trustee under subsection (d), the leased property is no 
longer property of the estate and the stay under section 362(a) is 
automatically terminated.
    ``(2)(A) If the debtor in a case under chapter 7 is an individual, 
the debtor may notify the creditor in writing that the debtor desires 
to assume the lease. Upon being so notified, the creditor may, at its 
option, notify the debtor that it is willing to have the lease assumed 
by the debtor and may condition such assumption on cure of any 
outstanding default on terms set by the contract.
    ``(B) If, not later than 30 days after notice is provided under 
subparagraph (A), the debtor notifies the lessor in writing that the 
lease is assumed, the liability under the lease will be assumed by the 
debtor and not by the estate.
    ``(C) The stay under section 362 and the injunction under section 
524(a)(2) shall not be violated by notification of the debtor and 
negotiation of cure under this subsection.
    ``(3) In a case under chapter 11 in which the debtor is an 
individual and in a case under chapter 13, if the debtor is the lessee 
with respect to personal property and the lease is not assumed in the 
plan confirmed by the court, the lease is deemed rejected as of the 
conclusion of the hearing on confirmation. If the lease is rejected, 
the stay under section 362 and any stay under section 1301 is 
automatically terminated with respect to the property subject to the 
lease.''.
    (c) Adequate Protection of Lessors and Purchase Money Secured 
Creditors.--
            (1) Confirmation of plan.--Section 1325(a)(5)(B) of title 
        11, United States Code, as amended by section 306, is amended--
                    (A) in clause (i), by striking ``and'' at the end;
                    (B) in clause (ii), by striking ``or'' at the end 
                and inserting ``and''; and
                    (C) by adding at the end the following:
                    ``(iii) if--
                            ``(I) property to be distributed pursuant 
                        to this subsection is in the form of periodic 
                        payments, such payments shall be in equal 
                        monthly amounts; and
                            ``(II) the holder of the claim is secured 
                        by personal property, the amount of such 
                        payments shall not be less than an amount 
                        sufficient to provide to the holder of such 
                        claim adequate protection during the period of 
                        the plan; or''.
            (2) Payments.--Section 1326(a) of title 11, United States 
        Code, is amended to read as follows:
    ``(a)(1) Unless the court orders otherwise, the debtor shall 
commence making payments not later than 30 days after the date of the 
filing of the plan or the order for relief, whichever is earlier, in 
the amount--
            ``(A) proposed by the plan to the trustee;
            ``(B) scheduled in a lease of personal property directly to 
        the lessor for that portion of the obligation that becomes due 
        after the order for relief, reducing the payments under 
        subparagraph (A) by the amount so paid and providing the 
        trustee with evidence of such payment, including the amount and 
        date of payment; and
            ``(C) that provides adequate protection directly to a 
        creditor holding an allowed claim secured by personal property 
        to the extent the claim is attributable to the purchase of such 
        property by the debtor for that portion of the obligation that 
        becomes due after the order for relief, reducing the payments 
        under subparagraph (A) by the amount so paid and providing the 
        trustee with evidence of such payment, including the amount and 
        date of payment.
    ``(2) A payment made under paragraph (1)(A) shall be retained by 
the trustee until confirmation or denial of confirmation. If a plan is 
confirmed, the trustee shall distribute any such payment in accordance 
with the plan as soon as is practicable. If a plan is not confirmed, 
the trustee shall return any such payments not previously paid and not 
yet due and owing to creditors pursuant to paragraph (3) to the debtor, 
after deducting any unpaid claim allowed under section 503(b).
    ``(3) Subject to section 363, the court may, upon notice and a 
hearing, modify, increase, or reduce the payments required under this 
subsection pending confirmation of a plan.
    ``(4) Not later than 60 days after the date of filing of a case 
under this chapter, a debtor retaining possession of personal property 
subject to a lease or securing a claim attributable in whole or in part 
to the purchase price of such property shall provide the lessor or 
secured creditor reasonable evidence of the maintenance of any required 
insurance coverage with respect to the use or ownership of such 
property and continue to do so for so long as the debtor retains 
possession of such property.''.

SEC. 310. LIMITATION ON LUXURY GOODS.

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

SEC. 311. AUTOMATIC STAY.

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

SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.

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

SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.

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

SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.

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

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

    (a) Notice.--Section 342 of title 11, United States Code, as 
amended by section 102, is amended--
            (1) in subsection (c)--
                    (A) by inserting ``(1)'' after ``(c)'';
                    (B) by striking ``, but the failure of such notice 
                to contain such information shall not invalidate the 
                legal effect of such notice''; and
                    (C) by adding at the end the following:
    ``(2)(A) If, within the 90 days before the commencement of a 
voluntary case, a creditor supplies the debtor in at least 2 
communications sent to the debtor with the current account number of 
the debtor and the address at which such creditor requests to receive 
correspondence, then any notice required by this title to be sent by 
the debtor to such creditor shall be sent to such address and shall 
include such account number.
    ``(B) If a creditor would be in violation of applicable 
nonbankruptcy law by sending any such communication within such 90-day 
period and if such creditor supplies the debtor in the last 2 
communications with the current account number of the debtor and the 
address at which such creditor requests to receive correspondence, then 
any notice required by this title to be sent by the debtor to such 
creditor shall be sent to such address and shall include such account 
number.''; and
            (2) by adding at the end the following:
    ``(e)(1) In a case under chapter 7 or 13 of this title of a debtor 
who is an individual, a creditor at any time may both file with the 
court and serve on the debtor a notice of address to be used to provide 
notice in such case to such creditor.
    ``(2) Any notice in such case required to be provided to such 
creditor by the debtor or the court later than 5 days after the court 
and the debtor receive such creditor's notice of address, shall be 
provided to such address.
    ``(f)(1) An entity may file with any bankruptcy court a notice of 
address to be used by all the bankruptcy courts or by particular 
bankruptcy courts, as so specified by such entity at the time such 
notice is filed, to provide notice to such entity in all cases under 
chapters 7 and 13 pending in the courts with respect to which such 
notice is filed, in which such entity is a creditor.
    ``(2) In any case filed under chapter 7 or 13, any notice required 
to be provided by a court with respect to which a notice is filed under 
paragraph (1), to such entity later than 30 days after the filing of 
such notice under paragraph (1) shall be provided to such address 
unless with respect to a particular case a different address is 
specified in a notice filed and served in accordance with subsection 
(e).
    ``(3) A notice filed under paragraph (1) may be withdrawn by such 
entity.
    ``(g)(1) Notice provided to a creditor by the debtor or the court 
other than in accordance with this section (excluding this subsection) 
shall not be effective notice until such notice is brought to the 
attention of such creditor. If such creditor designates a person or an 
organizational subdivision of such creditor to be responsible for 
receiving notices under this title and establishes reasonable 
procedures so that such notices receivable by such creditor are to be 
delivered to such person or such subdivision, then a notice provided to 
such creditor other than in accordance with this section (excluding 
this subsection) shall not be considered to have been brought to the 
attention of such creditor until such notice is received by such person 
or such subdivision.
    ``(2) A monetary penalty may not be imposed on a creditor for a 
violation of a stay in effect under section 362(a) (including a 
monetary penalty imposed under section 362(k)) or for failure to comply 
with section 542 or 543 unless the conduct that is the basis of such 
violation or of such failure occurs after such creditor receives notice 
effective under this section of the order for relief.''.
    (b) Debtor's Duties.--Section 521 of title 11, United States Code, 
as amended by sections 106, 225, and 305, is amended--
            (1) in subsection (a), as so designated by section 106, by 
        amending paragraph (1) to read as follows:
            ``(1) file--
                    ``(A) a list of creditors; and
                    ``(B) unless the court orders otherwise--
                            ``(i) a schedule of assets and liabilities;
                            ``(ii) a schedule of current income and 
                        current expenditures;
                            ``(iii) a statement of the debtor's 
                        financial affairs and, if section 342(b) 
                        applies, a certificate--
                                    ``(I) of an attorney whose name is 
                                indicated on the petition as the 
                                attorney for the debtor, or a 
                                bankruptcy petition preparer signing 
                                the petition under section 110(b)(1), 
                                indicating that such attorney or the 
                                bankruptcy petition preparer delivered 
                                to the debtor the notice required by 
                                section 342(b); or
                                    ``(II) if no attorney is so 
                                indicated, and no bankruptcy petition 
                                preparer signed the petition, of the 
                                debtor that such notice was received 
                                and read by the debtor;
                            ``(iv) copies of all payment advices or 
                        other evidence of payment received within 60 
                        days before the date of the filing of the 
                        petition, by the debtor from any employer of 
                        the debtor;
                            ``(v) a statement of the amount of monthly 
                        net income, itemized to show how the amount is 
                        calculated; and
                            ``(vi) a statement disclosing any 
                        reasonably anticipated increase in income or 
                        expenditures over the 12-month period following 
                        the date of the filing of the petition;''; and
            (2) by adding at the end the following:
    ``(e)(1) If the debtor in a case under chapter 7 or 13 is an 
individual and if a creditor files with the court at any time a request 
to receive a copy of the petition, schedules, and statement of 
financial affairs filed by the debtor, then the court shall make such 
petition, such schedules, and such statement available to such 
creditor.
    ``(2)(A) The debtor shall provide--
            ``(i) not later than 7 days before the date first set for 
        the first meeting of creditors, to the trustee a copy of the 
        Federal income tax return required under applicable law (or at 
        the election of the debtor, a transcript of such return) for 
        the most recent tax year ending immediately before the 
        commencement of the case and for which a Federal income tax 
        return was filed; and
            ``(ii) at the same time the debtor complies with clause 
        (i), a copy of such return (or if elected under clause (i), 
        such transcript) to any creditor that timely requests such 
        copy.
    ``(B) If the debtor fails to comply with clause (i) or (ii) of 
subparagraph (A), the court shall dismiss the case unless the debtor 
demonstrates that the failure to so comply is due to circumstances 
beyond the control of the debtor.
    ``(C) If a creditor requests a copy of such tax return or such 
transcript and if the debtor fails to provide a copy of such tax return 
or such transcript to such creditor at the time the debtor provides 
such tax return or such transcript to the trustee, then the court shall 
dismiss the case unless the debtor demonstrates that the failure to 
provide a copy of such tax return or such transcript is due to 
circumstances beyond the control of the debtor.
    ``(3) If a creditor in a case under chapter 13 files with the court 
at any time a request to receive a copy of the plan filed by the 
debtor, then the court shall make available to such creditor a copy of 
the plan--
            ``(A) at a reasonable cost; and
            ``(B) not later than 5 days after such request is filed.
    ``(f) At the request of the court, the United States trustee, or 
any party in interest in a case under chapter 7, 11, or 13, a debtor 
who is an individual shall file with the court--
            ``(1) at the same time filed with the taxing authority, a 
        copy of each Federal income tax return required under 
        applicable law (or at the election of the debtor, a transcript 
        of such tax return) with respect to each tax year of the debtor 
        ending while the case is pending under such chapter;
            ``(2) at the same time filed with the taxing authority, 
        each Federal income tax return required under applicable law 
        (or at the election of the debtor, a transcript of such tax 
        return) that had not been filed with such authority as of the 
        date of the commencement of the case and that was subsequently 
        filed for any tax year of the debtor ending in the 3-year 
        period ending on the date of the commencement of the case;
            ``(3) a copy of each amendment to any Federal income tax 
        return or transcript filed with the court under paragraph (1) 
        or (2); and
            ``(4) in a case under chapter 13--
                    ``(A) on the date that is either 90 days after the 
                end of such tax year or 1 year after the date of the 
                commencement of the case, whichever is later, if a plan 
                is not confirmed before such later date; and
                    ``(B) annually after the plan is confirmed and 
                until the case is closed, not later than the date that 
                is 45 days before the anniversary of the confirmation 
                of the plan;
        a statement, under penalty of perjury, of the income and 
        expenditures of the debtor during the tax year of the debtor 
        most recently concluded before such statement is filed under 
        this paragraph, and of the monthly income of the debtor, that 
        shows how income, expenditures, and monthly income are 
        calculated.
    ``(g)(1) A statement referred to in subsection (f)(4) shall 
disclose--
            ``(A) the amount and sources of the income of the debtor;
            ``(B) the identity of any person responsible with the 
        debtor for the support of any dependent of the debtor; and
            ``(C) the identity of any person who contributed, and the 
        amount contributed, to the household in which the debtor 
        resides.
    ``(2) The tax returns, amendments, and statement of income and 
expenditures described in subsections (e)(2)(A) and (f) shall be 
available to the United States trustee (or the bankruptcy 
administrator, if any), the trustee, and any party in interest for 
inspection and copying, subject to the requirements of section 315(c) 
of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2003.
    ``(h) If requested by the United States trustee or by the trustee, 
the debtor shall provide--
            ``(1) a document that establishes the identity of the 
        debtor, including a driver's license, passport, or other 
        document that contains a photograph of the debtor; or
            ``(2) such other personal identifying information relating 
        to the debtor that establishes the identity of the debtor.''.
    (c)(1) Not later than 180 days after the date of the enactment of 
this Act, the Director of the Administrative Office of the United 
States Courts shall establish procedures for safeguarding the 
confidentiality of any tax information required to be provided under 
this section.
    (2) The procedures under paragraph (1) shall include restrictions 
on creditor access to tax information that is required to be provided 
under this section.
    (3) Not later than 540 days after the date of enactment of this 
Act, the Director of the Administrative Office of the United States 
Courts shall prepare and submit to the President pro tempore of the 
Senate and the Speaker of the House of Representatives a report that--
            (A) assesses the effectiveness of the procedures 
        established under paragraph (1); and
            (B) if appropriate, includes proposed legislation to--
                    (i) further protect the confidentiality of tax 
                information; and
                    (ii) provide penalties for the improper use by any 
                person of the tax information required to be provided 
                under this section.

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

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

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

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

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

    Title 11, United States Code, is amended--
            (1) by amending section 1322(d) to read as follows:
    ``(d)(1) If the current monthly income of the debtor and the 
debtor's spouse combined, when multiplied by 12, is not less than--
            ``(A) in the case of a debtor in a household of 1 person, 
        the median family income of the applicable State for 1 earner;
            ``(B) in the case of a debtor in a household of 2, 3, or 4 
        individuals, the highest median family income of the applicable 
        State for a family of the same number or fewer individuals; or
            ``(C) in the case of a debtor in a household exceeding 4 
        individuals, the highest median family income of the applicable 
        State for a family of 4 or fewer individuals, plus $525 per 
        month for each individual in excess of 4,
the plan may not provide for payments over a period that is longer than 
5 years.
    ``(2) If the current monthly income of the debtor and the debtor's 
spouse combined, when multiplied by 12, is less than--
            ``(A) in the case of a debtor in a household of 1 person, 
        the median family income of the applicable State for 1 earner;
            ``(B) in the case of a debtor in a household of 2, 3, or 4 
        individuals, the highest median family income of the applicable 
        State for a family of the same number or fewer individuals; or
            ``(C) in the case of a debtor in a household exceeding 4 
        individuals, the highest median family income of the applicable 
        State for a family of 4 or fewer individuals, plus $525 per 
        month for each individual in excess of 4,
the plan may not provide for payments over a period that is longer than 
3 years, unless the court, for cause, approves a longer period, but the 
court may not approve a period that is longer than 5 years.'';
            (2) in section 1325(b)(1)(B), by striking ``three-year 
        period'' and inserting ``applicable commitment period''; and
            (3) in section 1325(b), as amended by section 102, by 
        adding at the end the following:
    ``(4) For purposes of this subsection, the `applicable commitment 
period'--
            ``(A) subject to subparagraph (B), shall be--
                    ``(i) 3 years; or
                    ``(ii) not less than 5 years, if the current 
                monthly income of the debtor and the debtor's spouse 
                combined, when multiplied by 12, is not less than--
                            ``(I) in the case of a debtor in a 
                        household of 1 person, the median family income 
                        of the applicable State for 1 earner;
                            ``(II) in the case of a debtor in a 
                        household of 2, 3, or 4 individuals, the 
                        highest median family income of the applicable 
                        State for a family of the same number or fewer 
                        individuals; or
                            ``(III) in the case of a debtor in a 
                        household exceeding 4 individuals, the highest 
                        median family income of the applicable State 
                        for a family of 4 or fewer individuals, plus 
                        $525 per month for each individual in excess of 
                        4; and
            ``(B) may be less than 3 or 5 years, whichever is 
        applicable under subparagraph (A), but only if the plan 
        provides for payment in full of all allowed unsecured claims 
        over a shorter period.''; and
            (4) in section 1329(c), by striking ``three years'' and 
        inserting ``the applicable commitment period under section 
        1325(b)(1)(B)''.

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

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

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

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

SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.

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

``Sec. 1115. Property of the estate

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

``1115. Property of the estate.''.
    (b) Contents of Plan.--Section 1123(a) of title 11, United States 
Code, is amended--
            (1) in paragraph (6), by striking ``and'' at the end;
            (2) in paragraph (7), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(8) in a case in which the debtor is an individual, 
        provide for the payment to creditors under the plan of all or 
        such portion of earnings from personal services performed by 
        the debtor after the commencement of the case or other future 
        income of the debtor as is necessary for the execution of the 
        plan.''.
    (c) Confirmation of Plan.--
            (1) Requirements relating to value of property.--Section 
        1129(a) of title 11, United States Code, as amended by section 
        213, is amended by adding at the end the following:
            ``(15) In a case in which the debtor is an individual and 
        in which the holder of an allowed unsecured claim objects to 
        the confirmation of the plan--
                    ``(A) the value, as of the effective date of the 
                plan, of the property to be distributed under the plan 
                on account of such claim is not less than the amount of 
                such claim; or
                    ``(B) the value of the property to be distributed 
                under the plan is not less than the projected 
                disposable income of the debtor (as defined in section 
                1325(b)(2)) to be received during the 5-year period 
                beginning on the date that the first payment is due 
                under the plan, or during the period for which the plan 
                provides payments, whichever is longer.''.
            (2) Requirement relating to interests in property.--Section 
        1129(b)(2)(B)(ii) of title 11, United States Code, is amended 
        by inserting before the period at the end the following: ``, 
        except that in a case in which the debtor is an individual, the 
        debtor may retain property included in the estate under section 
        1115, subject to the requirements of subsection (a)(14) of this 
        section''.
    (d) Effect of Confirmation.--Section 1141(d) of title 11, United 
States Code, is amended--
            (1) in paragraph (2), by striking ``The confirmation of a 
        plan does not discharge an individual debtor'' and inserting 
        ``A discharge under this chapter does not discharge a debtor 
        who is an individual''; and
            (2) by adding at the end the following:
    ``(5) In a case in which the debtor is an individual--
            ``(A) unless after notice and a hearing the court orders 
        otherwise for cause, confirmation of the plan does not 
        discharge any debt provided for in the plan until the court 
        grants a discharge on completion of all payments under the 
        plan;
            ``(B) at any time after the confirmation of the plan, and 
        after notice and a hearing, the court may grant a discharge to 
        the debtor who has not completed payments under the plan if--
                    ``(i) the value, as of the effective date of the 
                plan, of property actually distributed under the plan 
                on account of each allowed unsecured claim is not less 
                than the amount that would have been paid on such claim 
                if the estate of the debtor had been liquidated under 
                chapter 7 on such date; and
                    ``(ii) modification of the plan under section 1127 
                is not practicable; and''.
    (e) Modification of Plan.--Section 1127 of title 11, United States 
Code, is amended by adding at the end the following:
    ``(e) If the debtor is an individual, the plan may be modified at 
any time after confirmation of the plan but before the completion of 
payments under the plan, whether or not the plan has been substantially 
consummated, upon request of the debtor, the trustee, the United States 
trustee, or the holder of an allowed unsecured claim, to--
            ``(1) increase or reduce the amount of payments on claims 
        of a particular class provided for by the plan;
            ``(2) extend or reduce the time period for such payments; 
        or
            ``(3) alter the amount of the distribution to a creditor 
        whose claim is provided for by the plan to the extent necessary 
        to take account of any payment of such claim made other than 
        under the plan.
    ``(f)(1) Sections 1121 through 1128 and the requirements of section 
1129 apply to any modification under subsection (a).
    ``(2) The plan, as modified, shall become the plan only after there 
has been disclosure under section 1125 as the court may direct, notice 
and a hearing, and such modification is approved.''.

SEC. 322. LIMITATIONS ON HOMESTEAD EXEMPTION.

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

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

    Section 541(b) of title 11, United States Code, as amended by 
section 225, is amended by adding after paragraph (6), as added by 
section 225(a)(1)(C), the following:
            ``(7) any amount--
                    ``(A) withheld by an employer from the wages of 
                employees for payment as contributions--
                            ``(i) to--
                                    ``(I) an employee benefit plan that 
                                is subject to title I of the Employee 
                                Retirement Income Security Act of 1974 
                                or under an employee benefit plan which 
                                is a governmental plan under section 
                                414(d) of the Internal Revenue Code of 
                                1986;
                                    ``(II) a deferred compensation plan 
                                under section 457 of the Internal 
                                Revenue Code of 1986; or
                                    ``(III) a tax-deferred annuity 
                                under section 403(b) of the Internal 
                                Revenue Code of 1986;
                        except that such amount under this subparagraph 
                        shall not constitute disposable income as 
                        defined in section 1325(b)(2); or
                            ``(ii) to a health insurance plan regulated 
                        by State law whether or not subject to such 
                        title; or
                    ``(B) received by an employer from employees for 
                payment as contributions--
                            ``(i) to--
                                    ``(I) an employee benefit plan that 
                                is subject to title I of the Employee 
                                Retirement Income Security Act of 1974 
                                or under an employee benefit plan which 
                                is a governmental plan under section 
                                414(d) of the Internal Revenue Code of 
                                1986;
                                    ``(II) a deferred compensation plan 
                                under section 457 of the Internal 
                                Revenue Code of 1986; or
                                    ``(III) a tax-deferred annuity 
                                under section 403(b) of the Internal 
                                Revenue Code of 1986;
                        except that such amount under this subparagraph 
                        shall not constitute disposable income, as 
                        defined in section 1325(b)(2); or
                            ``(ii) to a health insurance plan regulated 
                        by State law whether or not subject to such 
                        title;''.

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

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

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

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

SEC. 326. SHARING OF COMPENSATION.

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

SEC. 327. FAIR VALUATION OF COLLATERAL.

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

SEC. 328. DEFAULTS BASED ON NONMONETARY OBLIGATIONS.

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

SEC. 329. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.

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

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

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

       TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS

           Subtitle A--General Business Bankruptcy Provisions

SEC. 401. ADEQUATE PROTECTION FOR INVESTORS.

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

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

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

SEC. 403. PROTECTION OF REFINANCE OF SECURITY INTEREST.

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

SEC. 404. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

    (a) In General.--Section 365(d)(4) of title 11, United States Code, 
is amended to read as follows:
    ``(4)(A) Subject to subparagraph (B), an unexpired lease of 
nonresidential real property under which the debtor is the lessee shall 
be deemed rejected, and the trustee shall immediately surrender that 
nonresidential real property to the lessor, if the trustee does not 
assume or reject the unexpired lease by the earlier of--
            ``(i) the date that is 120 days after the date of the order 
        for relief; or
            ``(ii) the date of the entry of an order confirming a plan.
    ``(B)(i) The court may extend the period determined under 
subparagraph (A), prior to the expiration of the 120-day period, for 90 
days on the motion of the trustee or lessor for cause.
    ``(ii) If the court grants an extension under clause (i), the court 
may grant a subsequent extension only upon prior written consent of the 
lessor in each instance.''.
    (b) Exception.--Section 365(f)(1) of title 11, United States Code, 
is amended by striking ``subsection'' the first place it appears and 
inserting ``subsections (b) and''.

SEC. 405. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.

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

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

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

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

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

SEC. 408. POSTPETITION DISCLOSURE AND SOLICITATION.

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

SEC. 409. PREFERENCES.

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

SEC. 410. VENUE OF CERTAIN PROCEEDINGS.

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

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

    Section 1121(d) of title 11, United States Code, is amended--
            (1) by striking ``On'' and inserting ``(1) Subject to 
        paragraph (2), on''; and
            (2) by adding at the end the following:
    ``(2)(A) The 120-day period specified in paragraph (1) may not be 
extended beyond a date that is 18 months after the date of the order 
for relief under this chapter.
    ``(B) The 180-day period specified in paragraph (1) may not be 
extended beyond a date that is 20 months after the date of the order 
for relief under this chapter.''.

SEC. 412. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.

    Section 523(a)(16) of title 11, United States Code, is amended--
            (1) by striking ``dwelling'' the first place it appears;
            (2) by striking ``ownership or'' and inserting 
        ``ownership,'';
            (3) by striking ``housing'' the first place it appears; and
            (4) by striking ``but only'' and all that follows through 
        ``such period,'' and inserting ``or a lot in a homeowners 
        association, for as long as the debtor or the trustee has a 
        legal, equitable, or possessory ownership interest in such 
        unit, such corporation, or such lot,''.

SEC. 413. CREDITOR REPRESENTATION AT FIRST MEETING OF CREDITORS.

    Section 341(c) of title 11, United States Code, is amended by 
inserting at the end the following: ``Notwithstanding any local court 
rule, provision of a State constitution, any other Federal or State law 
that is not a bankruptcy law, or other requirement that representation 
at the meeting of creditors under subsection (a) be by an attorney, a 
creditor holding a consumer debt or any representative of the creditor 
(which may include an entity or an employee of an entity and may be a 
representative for more than 1 creditor) shall be permitted to appear 
at and participate in the meeting of creditors in a case under chapter 
7 or 13, either alone or in conjunction with an attorney for the 
creditor. Nothing in this subsection shall be construed to require any 
creditor to be represented by an attorney at any meeting of 
creditors.''.

SEC. 414. DEFINITION OF DISINTERESTED PERSON.

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

SEC. 415. FACTORS FOR COMPENSATION OF PROFESSIONAL PERSONS.

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

SEC. 416. APPOINTMENT OF ELECTED TRUSTEE.

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

SEC. 417. UTILITY SERVICE.

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

SEC. 418. BANKRUPTCY FEES.

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

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

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

            Subtitle B--Small Business Bankruptcy Provisions

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

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

SEC. 432. DEFINITIONS.

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

SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.

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

SEC. 434. UNIFORM NATIONAL REPORTING REQUIREMENTS.

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

``Sec. 308. Debtor reporting requirements

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

``308. Debtor reporting requirements.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect 60 days after the date on which rules are prescribed under 
section 2075 of title 28, United States Code, to establish forms to be 
used to comply with section 308 of title 11, United States Code, as 
added by subsection (a).

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

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

SEC. 436. DUTIES IN SMALL BUSINESS CASES.

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

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

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

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

SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.

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

SEC. 438. PLAN CONFIRMATION DEADLINE.

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

SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE.

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

SEC. 440. SCHEDULING CONFERENCES.

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

SEC. 441. SERIAL FILER PROVISIONS.

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

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

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

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

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

SEC. 444. PAYMENT OF INTEREST.

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

SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES.

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

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

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

SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EMPLOYEES.

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

                TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS

SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.

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

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

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

                       TITLE VI--BANKRUPTCY DATA

SEC. 601. IMPROVED BANKRUPTCY STATISTICS.

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

``Sec. 159. Bankruptcy statistics

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

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

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

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

``Sec. 589b. Bankruptcy data

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

``589b. Bankruptcy data.''.

SEC. 603. AUDIT PROCEDURES.

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

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

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

                  TITLE VII--BANKRUPTCY TAX PROVISIONS

SEC. 701. TREATMENT OF CERTAIN LIENS.

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

SEC. 702. TREATMENT OF FUEL TAX CLAIMS.

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

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

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

SEC. 704. RATE OF INTEREST ON TAX CLAIMS.

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

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

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

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

SEC. 705. PRIORITY OF TAX CLAIMS.

    Section 507(a)(8) of title 11, United States Code, is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by 
                inserting ``for a taxable year ending on or before the 
                date of the filing of the petition'' after ``gross 
                receipts'';
                    (B) in clause (i), by striking ``for a taxable year 
                ending on or before the date of the filing of the 
                petition''; and
                    (C) by striking clause (ii) and inserting the 
                following:
                            ``(ii) assessed within 240 days before the 
                        date of the filing of the petition, exclusive 
                        of--
                                    ``(I) any time during which an 
                                offer in compromise with respect to 
                                that tax was pending or in effect 
                                during that 240-day period, plus 30 
                                days; and
                                    ``(II) any time during which a stay 
                                of proceedings against collections was 
                                in effect in a prior case under this 
                                title during that 240-day period, plus 
                                90 days.''; and
            (2) by adding at the end the following:
        ``An otherwise applicable time period specified in this 
        paragraph shall be suspended for any period during which a 
        governmental unit is prohibited under applicable nonbankruptcy 
        law from collecting a tax as a result of a request by the 
        debtor for a hearing and an appeal of any collection action 
        taken or proposed against the debtor, plus 90 days; plus any 
        time during which the stay of proceedings was in effect in a 
        prior case under this title or during which collection was 
        precluded by the existence of 1 or more confirmed plans under 
        this title, plus 90 days.''.

SEC. 706. PRIORITY PROPERTY TAXES INCURRED.

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

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

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

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

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

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

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

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

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

SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.

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

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

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

SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.

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

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

    Section 523(a) of title 11, United States Code, as amended by 
sections 215 and 224, is amended--
            (1) in paragraph (1)(B)--
                    (A) in the matter preceding clause (i), by 
                inserting ``or equivalent report or notice,'' after ``a 
                return,'';
                    (B) in clause (i), by inserting ``or given'' after 
                ``filed''; and
                    (C) in clause (ii)--
                            (i) by inserting ``or given'' after 
                        ``filed''; and
                            (ii) by inserting ``, report, or notice'' 
                        after ``return''; and
            (2) by adding at the end the following:
``For purposes of this subsection, the term `return' means a return 
that satisfies the requirements of applicable nonbankruptcy law 
(including applicable filing requirements). Such term includes a return 
prepared pursuant to section 6020(a) of the Internal Revenue Code of 
1986, or similar State or local law, or a written stipulation to a 
judgment or a final order entered by a nonbankruptcy tribunal, but does 
not include a return made pursuant to section 6020(b) of the Internal 
Revenue Code of 1986, or a similar State or local law.''.

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

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

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

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

``Sec. 1308. Filing of prepetition tax returns

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

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

SEC. 717. STANDARDS FOR TAX DISCLOSURE.

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

SEC. 718. SETOFF OF TAX REFUNDS.

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

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

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

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

    ``(a) Whenever the Internal Revenue Code of 1986 provides that a 
separate taxable estate or entity is created in a case concerning a 
debtor under this title, and the income, gain, loss, deductions, and 
credits of such estate shall be taxed to or claimed by the estate, a 
separate taxable estate is also created for purposes of any State and 
local law imposing a tax on or measured by income and such income, 
gain, loss, deductions, and credits shall be taxed to or claimed by the 
estate and may not be taxed to or claimed by the debtor. The preceding 
sentence shall not apply if the case is dismissed. The trustee shall 
make tax returns of income required under any such State or local law.
    ``(b) Whenever the Internal Revenue Code of 1986 provides that no 
separate taxable estate shall be created in a case concerning a debtor 
under this title, and the income, gain, loss, deductions, and credits 
of an estate shall be taxed to or claimed by the debtor, such income, 
gain, loss, deductions, and credits shall be taxed to or claimed by the 
debtor under a State or local law imposing a tax on or measured by 
income and may not be taxed to or claimed by the estate. The trustee 
shall make such tax returns of income of corporations and of 
partnerships as are required under any State or local law, but with 
respect to partnerships, shall make such returns only to the extent 
such returns are also required to be made under such Code. The estate 
shall be liable for any tax imposed on such corporation or partnership, 
but not for any tax imposed on partners or members.
    ``(c) With respect to a partnership or any entity treated as a 
partnership under a State or local law imposing a tax on or measured by 
income that is a debtor in a case under this title, any gain or loss 
resulting from a distribution of property from such partnership, or any 
distributive share of any income, gain, loss, deduction, or credit of a 
partner or member that is distributed, or considered distributed, from 
such partnership, after the commencement of the case, is gain, loss, 
income, deduction, or credit, as the case may be, of the partner or 
member, and if such partner or member is a debtor in a case under this 
title, shall be subject to tax in accordance with subsection (a) or 
(b).
    ``(d) For purposes of any State or local law imposing a tax on or 
measured by income, the taxable period of a debtor in a case under this 
title shall terminate only if and to the extent that the taxable period 
of such debtor terminates under the Internal Revenue Code of 1986.
    ``(e) The estate in any case described in subsection (a) shall use 
the same accounting method as the debtor used immediately before the 
commencement of the case, if such method of accounting complies with 
applicable nonbankruptcy tax law.
    ``(f) For purposes of any State or local law imposing a tax on or 
measured by income, a transfer of property from the debtor to the 
estate or from the estate to the debtor shall not be treated as a 
disposition for purposes of any provision assigning tax consequences to 
a disposition, except to the extent that such transfer is treated as a 
disposition under the Internal Revenue Code of 1986.
    ``(g) Whenever a tax is imposed pursuant to a State or local law 
imposing a tax on or measured by income pursuant to subsection (a) or 
(b), such tax shall be imposed at rates generally applicable to the 
same types of entities under such State or local law.
    ``(h) The trustee shall withhold from any payment of claims for 
wages, salaries, commissions, dividends, interest, or other payments, 
or collect, any amount required to be withheld or collected under 
applicable State or local tax law, and shall pay such withheld or 
collected amount to the appropriate governmental unit at the time and 
in the manner required by such tax law, and with the same priority as 
the claim from which such amount was withheld or collected was paid.
    ``(i)(1) To the extent that any State or local law imposing a tax 
on or measured by income provides for the carryover of any tax 
attribute from one taxable period to a subsequent taxable period, the 
estate shall succeed to such tax attribute in any case in which such 
estate is subject to tax under subsection (a).
    ``(2) After such a case is closed or dismissed, the debtor shall 
succeed to any tax attribute to which the estate succeeded under 
paragraph (1) to the extent consistent with the Internal Revenue Code 
of 1986.
    ``(3) The estate may carry back any loss or tax attribute to a 
taxable period of the debtor that ended before the date of the order 
for relief under this title to the extent that--
            ``(A) applicable State or local tax law provides for a 
        carryback in the case of the debtor; and
            ``(B) the same or a similar tax attribute may be carried 
        back by the estate to such a taxable period of the debtor under 
        the Internal Revenue Code of 1986.
    ``(j)(1) For purposes of any State or local law imposing a tax on 
or measured by income, income is not realized by the estate, the 
debtor, or a successor to the debtor by reason of discharge of 
indebtedness in a case under this title, except to the extent, if any, 
that such income is subject to tax under the Internal Revenue Code of 
1986.
    ``(2) Whenever the Internal Revenue Code of 1986 provides that the 
amount excluded from gross income in respect of the discharge of 
indebtedness in a case under this title shall be applied to reduce the 
tax attributes of the debtor or the estate, a similar reduction shall 
be made under any State or local law imposing a tax on or measured by 
income to the extent such State or local law recognizes such 
attributes. Such State or local law may also provide for the reduction 
of other attributes to the extent that the full amount of income from 
the discharge of indebtedness has not been applied.
    ``(k)(1) Except as provided in this section and section 505, the 
time and manner of filing tax returns and the items of income, gain, 
loss, deduction, and credit of any taxpayer shall be determined under 
applicable nonbankruptcy law.
    ``(2) For Federal tax purposes, the provisions of this section are 
subject to the Internal Revenue Code of 1986 and other applicable 
Federal nonbankruptcy law.''.
            (2) Clerical Amendment.--The table of sections for chapter 
        3 of title 11, United States Code, is amended by striking the 
        item relating to section 346 and inserting the following:

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

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

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

           TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES

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

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

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

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

                   ``SUBCHAPTER I--GENERAL PROVISIONS

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

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

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

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

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

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

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

``Sec. 1501. Purpose and scope of application

    ``(a) The purpose of this chapter is to incorporate the Model Law 
on Cross-Border Insolvency so as to provide effective mechanisms for 
dealing with cases of cross-border insolvency with the objectives of--
            ``(1) cooperation between--
                    ``(A) courts of the United States, United States 
                trustees, trustees, examiners, debtors, and debtors in 
                possession; and
                    ``(B) the courts and other competent authorities of 
                foreign countries involved in cross-border insolvency 
                cases;
            ``(2) greater legal certainty for trade and investment;
            ``(3) fair and efficient administration of cross-border 
        insolvencies that protects the interests of all creditors, and 
        other interested entities, including the debtor;
            ``(4) protection and maximization of the value of the 
        debtor's assets; and
            ``(5) facilitation of the rescue of financially troubled 
        businesses, thereby protecting investment and preserving 
        employment.
    ``(b) This chapter applies where--
            ``(1) assistance is sought in the United States by a 
        foreign court or a foreign representative in connection with a 
        foreign proceeding;
            ``(2) assistance is sought in a foreign country in 
        connection with a case under this title;
            ``(3) a foreign proceeding and a case under this title with 
        respect to the same debtor are pending concurrently; or
            ``(4) creditors or other interested persons in a foreign 
        country have an interest in requesting the commencement of, or 
        participating in, a case or proceeding under this title.
    ``(c) This chapter does not apply to--
            ``(1) a proceeding concerning an entity, other than a 
        foreign insurance company, identified by exclusion in section 
        109(b);
            ``(2) an individual, or to an individual and such 
        individual's spouse, who have debts within the limits specified 
        in section 109(e) and who are citizens of the United States or 
        aliens lawfully admitted for permanent residence in the United 
        States; or
            ``(3) an entity subject to a proceeding under the 
        Securities Investor Protection Act of 1970, a stockbroker 
        subject to subchapter III of chapter 7 of this title, or a 
        commodity broker subject to subchapter IV of chapter 7 of this 
        title.
    ``(d) The court may not grant relief under this chapter with 
respect to any deposit, escrow, trust fund, or other security required 
or permitted under any applicable State insurance law or regulation for 
the benefit of claim holders in the United States.

                   ``SUBCHAPTER I--GENERAL PROVISIONS

``Sec. 1502. Definitions

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

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

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

``Sec. 1504. Commencement of ancillary case

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

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

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

``Sec. 1506. Public policy exception

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

``Sec. 1507. Additional assistance

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

``Sec. 1508. Interpretation

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

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

``Sec. 1509. Right of direct access

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

``Sec. 1510. Limited jurisdiction

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

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

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

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

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

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

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

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

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

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

``Sec. 1515. Application for recognition

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

``Sec. 1516. Presumptions concerning recognition

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

``Sec. 1517. Order granting recognition

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

``Sec. 1518. Subsequent information

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

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

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

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

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

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

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

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

    ``(a) The court may grant relief under section 1519 or 1521, or may 
modify or terminate relief under subsection (c), only if the interests 
of the creditors and other interested entities, including the debtor, 
are sufficiently protected.
    ``(b) The court may subject relief granted under section 1519 or 
1521, or the operation of the debtor's business under section 
1520(a)(3), to conditions it considers appropriate, including the 
giving of security or the filing of a bond.
    ``(c) The court may, at the request of the foreign representative 
or an entity affected by relief granted under section 1519 or 1521, or 
at its own motion, modify or terminate such relief.
    ``(d) Section 1104(d) shall apply to the appointment of an examiner 
under this chapter. Any examiner shall comply with the qualification 
requirements imposed on a trustee by section 322.

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

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

``Sec. 1524. Intervention by a foreign representative

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

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

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

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

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

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

``Sec. 1527. Forms of cooperation

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

                 ``SUBCHAPTER V--CONCURRENT PROCEEDINGS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                TITLE IX--FINANCIAL CONTRACT PROVISIONS

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

    (a) Definition of Qualified Financial Contract.--Section 
11(e)(8)(D) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(8)(D)) is amended--
            (1) by striking ``subsection--'' and inserting 
        ``subsection, the following definitions shall apply:''; and
            (2) in clause (i), by inserting ``, resolution, or order'' 
        after ``any similar agreement that the Corporation determines 
        by regulation''.
    (b) Definition of Securities Contract.--Section 11(e)(8)(D)(ii) of 
the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is 
amended to read as follows:
                            ``(ii) Securities contract.--The term 
                        `securities contract'--
                                    ``(I) means a contract for the 
                                purchase, sale, or loan of a security, 
                                a certificate of deposit, a mortgage 
                                loan, or any interest in a mortgage 
                                loan, a group or index of securities, 
                                certificates of deposit, or mortgage 
                                loans or interests therein (including 
                                any interest therein or based on the 
                                value thereof) or any option on any of 
                                the foregoing, including any option to 
                                purchase or sell any such security, 
                                certificate of deposit, mortgage loan, 
                                interest, group or index, or option, 
                                and including any repurchase or reverse 
                                repurchase transaction on any such 
                                security, certificate of deposit, 
                                mortgage loan, interest, group or 
                                index, or option;
                                    ``(II) does not include any 
                                purchase, sale, or repurchase 
                                obligation under a participation in a 
                                commercial mortgage loan unless the 
                                Corporation determines by regulation, 
                                resolution, or order to include any 
                                such agreement within the meaning of 
                                such term;
                                    ``(III) means any option entered 
                                into on a national securities exchange 
                                relating to foreign currencies;
                                    ``(IV) means the guarantee by or to 
                                any securities clearing agency of any 
                                settlement of cash, securities, 
                                certificates of deposit, mortgage loans 
                                or interests therein, group or index of 
                                securities, certificates of deposit, or 
                                mortgage loans or interests therein 
                                (including any interest therein or 
                                based on the value thereof) or option 
                                on any of the foregoing, including any 
                                option to purchase or sell any such 
                                security, certificate of deposit, 
                                mortgage loan, interest, group or 
                                index, or option;
                                    ``(V) means any margin loan;
                                    ``(VI) means any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                    ``(VII) means any combination of 
                                the agreements or transactions referred 
                                to in this clause;
                                    ``(VIII) means any option to enter 
                                into any agreement or transaction 
                                referred to in this clause;
                                    ``(IX) means a master agreement 
                                that provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), (V), (VI), (VII), or 
                                (VIII), together with all supplements 
                                to any such master agreement, without 
                                regard to whether the master agreement 
                                provides for an agreement or 
                                transaction that is not a securities 
                                contract under this clause, except that 
                                the master agreement shall be 
                                considered to be a securities contract 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (III), (IV), (V), (VI), 
                                (VII), or (VIII); and
                                    ``(X) means any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in this clause, 
                                including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in this clause.''.
    (c) Definition of Commodity Contract.--Section 11(e)(8)(D)(iii) of 
the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iii)) is 
amended to read as follows:
                            ``(iii) Commodity contract.--The term 
                        `commodity contract' means--
                                    ``(I) with respect to a futures 
                                commission merchant, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade;
                                    ``(II) with respect to a foreign 
                                futures commission merchant, a foreign 
                                future;
                                    ``(III) with respect to a leverage 
                                transaction merchant, a leverage 
                                transaction;
                                    ``(IV) with respect to a clearing 
                                organization, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade that is cleared by such clearing 
                                organization, or commodity option 
                                traded on, or subject to the rules of, 
                                a contract market or board of trade 
                                that is cleared by such clearing 
                                organization;
                                    ``(V) with respect to a commodity 
                                options dealer, a commodity option;
                                    ``(VI) any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                    ``(VII) any combination of the 
                                agreements or transactions referred to 
                                in this clause;
                                    ``(VIII) any option to enter into 
                                any agreement or transaction referred 
                                to in this clause;
                                    ``(IX) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (II), (III), (IV), (V), (VI), 
                                (VII), or (VIII), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                commodity contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a commodity 
                                contract under this clause only with 
                                respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in subclause (I), 
                                (II), (III), (IV), (V), (VI), (VII), or 
                                (VIII); or
                                    ``(X) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in this clause, including 
                                any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.''.
    (d) Definition of Forward Contract.--Section 11(e)(8)(D)(iv) of the 
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iv)) is amended 
to read as follows:
                            ``(iv) Forward contract.--The term `forward 
                        contract' means--
                                    ``(I) a contract (other than a 
                                commodity contract) for the purchase, 
                                sale, or transfer of a commodity or any 
                                similar good, article, service, right, 
                                or interest which is presently or in 
                                the future becomes the subject of 
                                dealing in the forward contract trade, 
                                or product or byproduct thereof, with a 
                                maturity date more than 2 days after 
                                the date the contract is entered into, 
                                including, a repurchase transaction, 
                                reverse repurchase transaction, 
                                consignment, lease, swap, hedge 
                                transaction, deposit, loan, option, 
                                allocated transaction, unallocated 
                                transaction, or any other similar 
                                agreement;
                                    ``(II) any combination of 
                                agreements or transactions referred to 
                                in subclauses (I) and (III);
                                    ``(III) any option to enter into 
                                any agreement or transaction referred 
                                to in subclause (I) or (II);
                                    ``(IV) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclauses 
                                (I), (II), or (III), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                forward contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a forward contract 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (II), or (III); or
                                    ``(V) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in subclause (I), (II), 
                                (III), or (IV), including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement or 
                                transaction referred to in any such 
                                subclause.''.
    (e) Definition of Repurchase Agreement.--Section 11(e)(8)(D)(v) of 
the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(v)) is 
amended to read as follows:
                            ``(v) Repurchase agreement.--The term 
                        `repurchase agreement' (which definition also 
                        applies to a reverse repurchase agreement)--
                                    ``(I) means an agreement, including 
                                related terms, which provides for the 
                                transfer of one or more certificates of 
                                deposit, mortgage-related securities 
                                (as such term is defined in the 
                                Securities Exchange Act of 1934), 
                                mortgage loans, interests in mortgage-
                                related securities or mortgage loans, 
                                eligible bankers' acceptances, 
                                qualified foreign government securities 
                                or securities that are direct 
                                obligations of, or that are fully 
                                guaranteed by, the United States or any 
                                agency of the United States against the 
                                transfer of funds by the transferee of 
                                such certificates of deposit, eligible 
                                bankers' acceptances, securities, 
                                mortgage loans, or interests with a 
                                simultaneous agreement by such 
                                transferee totransfer to the transferor 
thereof certificates of deposit, eligible bankers' acceptances, 
securities, mortgage loans, or interests as described above, at a date 
certain not later than 1 year after such transfers or on demand, 
against the transfer of funds, or any other similar agreement;
                                    ``(II) does not include any 
                                repurchase obligation under a 
                                participation in a commercial mortgage 
                                loan unless the Corporation determines 
                                by regulation, resolution, or order to 
                                include any such participation within 
                                the meaning of such term;
                                    ``(III) means any combination of 
                                agreements or transactions referred to 
                                in subclauses (I) and (IV);
                                    ``(IV) means any option to enter 
                                into any agreement or transaction 
                                referred to in subclause (I) or (III);
                                    ``(V) means a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (III), or (IV), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                repurchase agreement under this clause, 
                                except that the master agreement shall 
                                be considered to be a repurchase 
                                agreement under this subclause only 
                                with respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in subclause (I), 
                                (III), or (IV); and
                                    ``(VI) means any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), or (V), including any 
                                guarantee or reimbursement obligation 
                                in connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                        For purposes of this clause, the term 
                        `qualified foreign government security' means a 
                        security that is a direct obligation of, or 
                        that is fully guaranteed by, the central 
                        government of a member of the Organization for 
                        Economic Cooperation and Development (as 
                        determined by regulation or order adopted by 
                        the appropriate Federal banking authority).''.
    (f) Definition of Swap Agreement.--Section 11(e)(8)(D)(vi) of the 
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is amended 
to read as follows:
                            ``(vi) Swap agreement.--The term `swap 
                        agreement' means--
                                    ``(I) any agreement, including the 
                                terms and conditions incorporated by 
                                reference in any such agreement, which 
                                is an interest rate swap, option, 
                                future, or forward agreement, including 
                                a rate floor, rate cap, rate collar, 
                                cross-currency rate swap, and basis 
                                swap; a spot, same day-tomorrow, 
                                tomorrow-next, forward, or other 
                                foreign exchange or precious metals 
                                agreement; a currency swap, option, 
                                future, or forward agreement; an equity 
                                index or equity swap, option, future, 
                                or forward agreement; a debt index or 
                                debt swap, option, future, or forward 
                                agreement; a total return, credit 
                                spread or credit swap, option, future, 
                                or forward agreement; a commodity index 
                                or commodity swap, option, future, or 
                                forward agreement; or a weather swap, 
                                weather derivative, or weather option;
                                    ``(II) any agreement or transaction 
                                that is similar to any other agreement 
                                or transaction referred to in this 
                                clause and that is of a type that has 
                                been, is presently, or in the future 
                                becomes, the subject of recurrent 
                                dealings in the swap markets (including 
                                terms and conditions incorporated by 
                                reference in such agreement) and that 
                                is a forward, swap, future, or option 
                                on one or more rates, currencies, 
                                commodities, equity securities or other 
                                equity instruments, debt securities or 
                                other debt instruments, quantitative 
                                measures associated with an occurrence, 
                                extent of an occurrence, or contingency 
                                associated with a financial, 
                                commercial, or economic consequence, or 
                                economic or financial indices or 
                                measures of economic or financial risk 
                                or value;
                                    ``(III) any combination of 
                                agreements or transactions referred to 
                                in this clause;
                                    ``(IV) any option to enter into any 
                                agreement or transaction referred to in 
                                this clause;
                                    ``(V) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (II), (III), or (IV), together 
                                with all supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement contains an 
                                agreement or transaction that is not a 
                                swap agreement under this clause, 
                                except that the master agreement shall 
                                be considered to be a swap agreement 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (II), (III), or (IV); 
                                and
                                    ``(VI) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreements or 
                                transactions referred to in subclause 
                                (I), (II), (III), (IV), or (V), 
                                including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in any such subclause.
                        Such term is applicable for purposes of this 
                        subsection only and shall not be construed or 
                        applied so as to challenge or affect the 
                        characterization, definition, or treatment of 
                        any swap agreement under any other statute, 
                        regulation, or rule, including the Securities 
                        Act of 1933, the Securities Exchange Act of 
                        1934, the Public Utility Holding Company Act of 
                        1935, the Trust Indenture Act of 1939, the 
                        Investment Company Act of 1940, the Investment 
                        Advisers Act of 1940, the Securities Investor 
                        Protection Act of 1970, the Commodity Exchange 
                        Act, the Gramm-Leach-Bliley Act, and the Legal 
                        Certainty for Bank Products Act of 2000.''.
    (g) Definition of Transfer.--Section 11(e)(8)(D)(viii) of the 
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(viii)) is 
amended to read as follows:
                            ``(viii) Transfer.--The term `transfer' 
                        means every mode, direct or indirect, absolute 
                        or conditional, voluntary or involuntary, of 
                        disposing of or parting with property or with 
                        an interest in property, including retention of 
                        title as a security interest and foreclosure of 
                        the depository institution's equity of 
                        redemption.''.
    (h) Treatment of Qualified Financial Contracts.--Section 11(e)(8) 
of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is 
amended--
            (1) in subparagraph (A)--
                    (A) by striking ``paragraph (10)'' and inserting 
                ``paragraphs (9) and (10)'';
                    (B) in clause (i), by striking ``to cause the 
                termination or liquidation'' and inserting ``such 
                person has to cause the termination, liquidation, or 
                acceleration''; and
                    (C) by striking clause (ii) and inserting the 
                following:
                            ``(ii) any right under any security 
                        agreement or arrangement or other credit 
                        enhancement related to one or more qualified 
                        financial contracts described in clause (i);''; 
                        and
            (2) in subparagraph (E), by striking clause (ii) and 
        inserting the following:
                            ``(ii) any right under any security 
                        agreement or arrangement or other credit 
                        enhancement related to one or more qualified 
                        financial contracts described in clause (i);''.
    (i) Avoidance of Transfers.--Section 11(e)(8)(C)(i) of the Federal 
Deposit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is amended by 
inserting ``section 5242 of the Revised Statutes of the United States 
or any other Federal or State law relating to the avoidance of 
preferential or fraudulent transfers,'' before ``the Corporation''.

SEC. 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 contracts and related claims and property 
                under subparagraph (A)(i), the conservator or receiver 
                for the depository institution shall not make such 
                transfer to a foreign bank, financial institution 
                organized under the laws of a foreign country, or a 
                branch or agency of a foreign bank or financial 
                institution unless, under the law applicable to such 
                bank, financial institution, branch or agency, to the 
                qualified financial contracts, and to any netting 
                contract, any security agreement or arrangement or 
                other credit enhancement related to one or more 
                qualified financial contracts, the contractual rights 
                of the parties to such qualified financial contracts, 
                netting contracts, security agreements or arrangements, 
                or other credit enhancements are enforceable 
                substantially to the same extent as permitted under 
                this section.
                    ``(C) Transfer of contracts subject to the rules of 
                a clearing organization.--In the event that a 
                conservator or receiver transfers any qualified 
                financial contract and related claims, property, and 
                credit enhancements pursuant to subparagraph (A)(i) and 
                such contract is cleared by or subject to the rules of 
                a clearing organization, the clearing organization 
                shall not be required to accept the transferee as a 
                member by virtue of the transfer.
                    ``(D) Definitions.--For purposes of this paragraph, 
                the term `financial institution' means a broker or 
                dealer, a depository institution, a futures commission 
                merchant, or any other institution, as determined by 
                the Corporation by regulation to be a financial 
                institution, and the term `clearing organization' has 
                the same meaning as in section 402 of the Federal 
                Deposit Insurance Corporation Improvement Act of 
                1991.''.
    (b) Notice to Qualified Financial Contract Counterparties.--Section 
11(e)(10)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(10)(A)) is amended in the material immediately following clause 
(ii) by striking ``the conservator'' and all that follows through the 
period and inserting the following: ``the conservator or receiver shall 
notify any person who is a party to any such contract of such transfer 
by 5:00 p.m. (eastern time) on the business day following the date of 
the appointment of the receiver in the case of a receivership, or the 
business day following such transfer in the case of a 
conservatorship.''.
    (c) Rights Against Receiver and Treatment of Bridge Banks.--Section 
11(e)(10) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(10)) 
is amended--
            (1) by redesignating subparagraph (B) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (A) the following new 
        subparagraphs:
                    ``(B) Certain rights not enforceable.--
                            ``(i) Receivership.--A person who is a 
                        party to a qualified financial contract with an 
                        insured depository institution may not exercise 
                        any right that such person has to terminate, 
                        liquidate, or net such contract under paragraph 
                        (8)(A) of this subsection or section 403 or 404 
                        of the Federal Deposit Insurance Corporation 
                        Improvement Act of 1991, solely by reason of or 
                        incidental to the appointment of a receiver for 
                        the depository institution (or the insolvency 
                        or financial condition of the depository 
                        institution for which the receiver has been 
                        appointed)--
                                    ``(I) until 5:00 p.m. (eastern 
                                time) on the business day following the 
                                date of the appointment of the 
                                receiver; or
                                    ``(II) after the person has 
                                received notice that the contract has 
                                been transferred pursuant to paragraph 
                                (9)(A).
                            ``(ii) Conservatorship.--A person who is a 
                        party to a qualified financial contract with an 
                        insured depository institution may not exercise 
                        any right that such person has to terminate, 
                        liquidate, or net such contract under paragraph 
                        (8)(E) of this subsection or section 403 or 404 
                        of the Federal Deposit Insurance Corporation 
                        Improvement Act of 1991, solely by reason of or 
                        incidental to the appointment of a conservator 
                        for the depository institution (or the 
                        insolvency or financial condition of the 
                        depository institution for which the 
                        conservator has been appointed).
                            ``(iii) Notice.--For purposes of this 
                        paragraph, the Corporation as receiver or 
                        conservator of an insured depository 
                        institution shall be deemed to have notified a 
                        person who is a party to a qualified financial 
                        contract with such depository institution if 
                        the Corporation has taken steps reasonably 
                        calculated to provide notice to such person by 
                        the time specified in subparagraph (A).
                    ``(C) Treatment of bridge banks.--The following 
                institutions shall not be considered to be a financial 
                institution for which a conservator, receiver, trustee 
                in bankruptcy, or other legal custodian has been 
                appointed or which is otherwise the subject of a 
                bankruptcy or insolvency proceeding for purposes of 
                paragraph (9):
                            ``(i) A bridge bank.
                            ``(ii) A depository institution organized 
                        by the Corporation, for which a conservator is 
                        appointed either--
                                    ``(I) immediately upon the 
                                organization of the institution; or
                                    ``(II) at the time of a purchase 
                                and assumption transaction between the 
                                depository institution and the 
                                Corporation as receiver for a 
                                depository institution in default.''.

SEC. 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;
            (2) by inserting after paragraph (10) the following new 
        paragraph:
            ``(11) Disaffirmance or repudiation of qualified financial 
        contracts.--In exercising the rights of disaffirmance or 
        repudiation of a conservator or receiver with respect to any 
        qualified financial contract to which an insured depository 
        institution is a party, the conservator or receiver for such 
        institution shall either--
                    ``(A) disaffirm or repudiate all qualified 
                financial contracts between--
                            ``(i) any person or any affiliate of such 
                        person; and
                            ``(ii) the depository institution in 
                        default; or
                    ``(B) disaffirm or repudiate none of the qualified 
                financial contracts referred to in subparagraph (A) 
                (with respect to such person or any affiliate of such 
                person).''; and
            (3) by adding at the end the following new paragraph:
            ``(17) Savings clause.--The meanings of terms used in this 
        subsection are applicable for purposes of this subsection only, 
        and shall not be construed or applied so as to challenge or 
        affect the characterization, definition, or treatment of any 
        similar terms under any other statute, regulation, or rule, 
        including the Gramm-Leach-Bliley Act, the Legal Certainty for 
        Bank Products Act of 2000, the securities laws (as that term is 
        defined in section 3(a)(47) of the Securities Exchange Act of 
        1934), and the Commodity Exchange Act.''.

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

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

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

SEC. 907. BANKRUPTCY LAW AMENDMENTS.

    (a) Definitions of Forward Contract, Repurchase Agreement, 
Securities Clearing Agency, Swap Agreement, Commodity Contract, and 
Securities Contract.--Title 11, United States Code, is amended--
            (1) in section 101--
                    (A) in paragraph (25)--
                            (i) by striking ``means a contract'' and 
                        inserting ``means--
                    ``(A) a contract'';
                            (ii) by striking ``, or any combination 
                        thereof or option thereon;'' and inserting ``, 
                        or any other similar agreement;''; and
                            (iii) by adding at the end the following:
                    ``(B) any combination of agreements or transactions 
                referred to in subparagraphs (A) and (C);
                    ``(C) any option to enter into an agreement or 
                transaction referred to in subparagraph (A) or (B);
                    ``(D) a master agreement that provides for an 
                agreement or transaction referred to in subparagraph 
                (A), (B), or (C), together with all supplements to any 
                such master agreement, without regard to whether such 
                master agreement provides for an agreement or 
                transaction that is not a forward contract under this 
                paragraph, except that such master agreement shall be 
                considered to be a forward contract under this 
                paragraph only with respect to each agreement or 
                transaction under such master agreement that is 
                referred to in subparagraph (A), (B), or (C); or
                    ``(E) any security agreement or arrangement, or 
                other credit enhancement related to any agreement or 
                transaction referred to in subparagraph (A), (B), (C), 
                or (D), including any guarantee or reimbursement 
                obligation by or to a forward contract merchant or 
                financial participant in connection with any agreement 
                or transaction referred to in any such subparagraph, 
                but not to exceed the damages in connection with any 
                such agreement or transaction, measured in accordance 
                with section 562;'';
                    (B) in paragraph (46), by striking ``on any day 
                during the period beginning 90 days before the date 
                of'' and inserting ``at any time before'';
                    (C) by amending paragraph (47) to read as follows:
            ``(47) `repurchase agreement' (which definition also 
        applies to a reverse repurchase agreement)--
                    ``(A) means--
                            ``(i) an agreement, including related 
                        terms, which provides for the transfer of one 
                        or more certificates of deposit, mortgage 
                        related securities (as defined in section 3 of 
                        the Securities Exchange Act of 1934), mortgage 
                        loans, interests in mortgage related securities 
                        or mortgage loans, eligible bankers' 
                        acceptances, qualified foreign government 
                        securities (defined as a security that is a 
                        direct obligation of, or that is fully 
                        guaranteed by, the central government of a 
                        member of the Organization for Economic 
                        Cooperation and Development), or securities 
                        that are direct obligations of, or that are 
                        fully guaranteed by, the United States or any 
                        agency of the United States against the 
                        transfer of funds by the transferee of such 
                        certificates of deposit, eligible bankers' 
                        acceptances, securities, mortgage loans, or 
                        interests, with a simultaneous agreement by 
                        such transferee to transfer to the transferor 
                        thereof certificates of deposit, eligible 
                        bankers' acceptance, securities, mortgage 
                        loans, or interests of the kind described in 
                        this clause, at a date certain not later than 1 
                        year after such transfer or on demand, against 
                        the transfer of funds;
                            ``(ii) any combination of agreements or 
                        transactions referred to in clauses (i) and 
                        (iii);
                            ``(iii) an option to enter into an 
                        agreement or transaction referred to in clause 
                        (i) or (ii);
                            ``(iv) a master agreement that provides for 
                        an agreement or transaction referred to in 
                        clause (i), (ii), or (iii), together with all 
                        supplements to any such master agreement, 
                        without regard to whether such master agreement 
                        provides for an agreement or transaction that 
                        is not a repurchase agreement under this 
                        paragraph, except that such master agreement 
                        shall be considered to be a repurchase 
                        agreement under this paragraph only with 
                        respect to each agreement or transaction under 
                        the master agreement that is referred to in 
                        clause (i), (ii), or (iii); or
                            ``(v) any security agreement or arrangement 
                        or other credit enhancement related to any 
                        agreement or transaction referred to in clause 
                        (i), (ii), (iii), or (iv), including any 
                        guarantee or reimbursement obligation by or to 
                        a repo participant or financial participant in 
                        connection with any agreement or transaction 
                        referred to in any such clause, but not to 
                        exceed the damages in connection with any such 
                        agreement or transaction, measured in 
                        accordance with section 562 of this title; and
                    ``(B) does not include a repurchase obligation 
                under a participation in a commercial mortgage loan;'';
                    (D) in paragraph (48), by inserting ``, or exempt 
                from such registration under such section pursuant to 
                an order of the Securities and Exchange Commission,'' 
                after ``1934''; and
                    (E) by amending paragraph (53B) to read as follows:
            ``(53B) `swap agreement'--
                    ``(A) means--
                            ``(i) any agreement, including the terms 
                        and conditions incorporated by reference in 
                        such agreement, which is--
                                    ``(I) an interest rate swap, 
                                option, future, or forward agreement, 
                                including a rate floor, rate cap, rate 
                                collar, cross-currency rate swap, and 
                                basis swap;
                                    ``(II) a spot, same day-tomorrow, 
                                tomorrow-next, forward, or other 
                                foreign exchange or precious metals 
                                agreement;
                                    ``(III) a currency swap, option, 
                                future, or forward agreement;
                                    ``(IV) an equity index or equity 
                                swap, option, future, or forward 
                                agreement;
                                    ``(V) a debt index or debt swap, 
                                option, future, or forward agreement;
                                    ``(VI) a total return, credit 
                                spread or credit swap, option, future, 
                                or forward agreement;
                                    ``(VII) a commodity index or a 
                                commodity swap, option, future, or 
                                forward agreement; or
                                    ``(VIII) a weather swap, weather 
                                derivative, or weather option;
                            ``(ii) any agreement or transaction that is 
                        similar to any other agreement or transaction 
                        referred to in this paragraph and that--
                                    ``(I) is of a type that has been, 
                                is presently, or in the future becomes, 
                                the subject of recurrent dealings in 
                                the swap markets (including terms and 
                                conditions incorporated by reference 
                                therein); and
                                    ``(II) is a forward, swap, future, 
                                or option on one or more rates, 
                                currencies, commodities, equity 
                                securities, or other equity 
                                instruments, debt securities or other 
                                debt instruments, quantitative measures 
                                associated with an occurrence, extent 
                                of an occurrence, or contingency 
                                associated with a financial, 
                                commercial, or economic consequence, or 
                                economic or financial indices or 
                                measures of economic or financial risk 
                                or value;
                            ``(iii) any combination of agreements or 
                        transactions referred to in this subparagraph;
                            ``(iv) any option to enter into an 
                        agreement or transaction referred to in this 
                        subparagraph;
                            ``(v) a master agreement that provides for 
                        an agreement or transaction referred to in 
                        clause (i), (ii), (iii), or (iv), together with 
                        all supplements to any such master agreement, 
                        and without regard to whether the master 
                        agreement contains an agreement or transaction 
                        that is not a swap agreement under this 
                        paragraph, except that the master agreement 
                        shall be considered to be a swap agreement 
                        under this paragraph only with respect to each 
                        agreement or transaction under the master 
                        agreement that is referred to in clause (i), 
                        (ii), (iii), or (iv); or
                            ``(vi) any security agreement or 
                        arrangement or other credit enhancement related 
                        to any agreements or transactions referred to 
                        in clause (i) through (v), including any 
                        guarantee or reimbursement obligation by or to 
                        a swap participant or financial participant in 
                        connection with any agreement or transaction 
                        referred to in any such clause, but not to 
                        exceed the damages in connection with any such 
                        agreement or transaction, measured in 
                        accordance with section 562; and
                    ``(B) is applicable for purposes of this title 
                only, and shall not be construed or applied so as to 
                challenge or affect the characterization, definition, 
                or treatment of any swap agreement under any other 
                statute, regulation, or rule, including the Securities 
                Act of 1933, the Securities Exchange Act of 1934, the 
                Public Utility Holding Company Act of 1935, the Trust 
                Indenture Act of 1939, the Investment Company Act of 
                1940, the Investment Advisers Act of 1940, the 
                Securities Investor Protection Act of 1970, the 
                Commodity Exchange Act, the Gramm-Leach-Bliley Act, and 
                the Legal Certainty for Bank Products Act of 2000;'';
            (2) in section 741(7), by striking paragraph (7) and 
        inserting the following:
            ``(7) `securities contract'--
                    ``(A) means--
                            ``(i) a contract for the purchase, sale, or 
                        loan of a security, a certificate of deposit, a 
                        mortgage loan or any interest in a mortgage 
                        loan, a group or index of securities, 
                        certificates of deposit, or mortgage loans or 
                        interests therein (including an interest 
                        therein or based on the value thereof), or 
                        option on any of the foregoing, including an 
                        option to purchase or sell any such security, 
                        certificate of deposit, mortgage loan, 
                        interest, group or index, or option, and 
                        including any repurchase or reverse repurchase 
                        transaction on any such security, certificate 
                        of deposit, mortgage loan, interest, group or 
                        index, or option;
                            ``(ii) any option entered into on a 
                        national securities exchange relating to 
                        foreign currencies;
                            ``(iii) the guarantee by or to any 
                        securities clearing agency of a settlement of 
                        cash, securities, certificates of deposit, 
                        mortgage loans or interests therein, group or 
                        index of securities, or mortgage loans or 
                        interests therein (including any interest 
                        therein or based on the value thereof), or 
                        option on any of the foregoing, including an 
                        option to purchase or sell any such security, 
                        certificate of deposit, mortgage loan, 
                        interest, group or index, or option;
                            ``(iv) any margin loan;
                            ``(v) any other agreement or transaction 
                        that is similar to an agreement or transaction 
                        referred to in this subparagraph;
                            ``(vi) any combination of the agreements or 
                        transactions referred to in this subparagraph;
                            ``(vii) any option to enter into any 
                        agreement or transaction referred to in this 
                        subparagraph;
                            ``(viii) a master agreement that provides 
                        for an agreement or transaction referred to in 
                        clause (i), (ii), (iii), (iv), (v), (vi), or 
                        (vii), together with all supplements to any 
                        such master agreement, without regard to 
                        whether the master agreement provides for an 
                        agreement or transaction that is not a 
                        securities contract under this subparagraph, 
                        except that such master agreement shall be 
                        considered to be a securities contract under 
                        this subparagraph only with respect to each 
                        agreement or transaction under such master 
                        agreement that is referred to in clause (i), 
                        (ii), (iii), (iv), (v), (vi), or (vii); or
                            ``(ix) any security agreement or 
                        arrangement or other credit enhancement related 
                        to any agreement or transaction referred to in 
                        this subparagraph, including any guarantee or 
                        reimbursement obligation by or to a 
                        stockbroker, securities clearing agency, 
                        financial institution, or financial participant 
                        in connection with any agreement or transaction 
                        referred to in this subparagraph, but not to 
                        exceed the damages in connection with any such 
                        agreement or transaction, measured in 
                        accordance with section 562; and
                    ``(B) does not include any purchase, sale, or 
                repurchase obligation under a participation in a 
                commercial mortgage loan;''; and
            (3) in section 761(4)--
                    (A) by striking ``or'' at the end of subparagraph 
                (D); and
                    (B) by adding at the end the following:
                    ``(F) any other agreement or transaction that is 
                similar to an agreement or transaction referred to in 
                this paragraph;
                    ``(G) any combination of the agreements or 
                transactions referred to in this paragraph;
                    ``(H) any option to enter into an agreement or 
                transaction referred to in this paragraph;
                    ``(I) a master agreement that provides for an 
                agreement or transaction referred to in subparagraph 
                (A), (B), (C), (D), (E), (F), (G), or (H), together 
                with all supplements to such master agreement, without 
                regard to whether the master agreement provides for an 
                agreement or transaction that is not a commodity 
                contract under this paragraph, except that the master 
                agreement shall be considered to be a commodity 
                contract under this paragraph only with respect to each 
                agreement or transaction under the master agreement 
                that is referred to in subparagraph (A), (B), (C), (D), 
                (E), (F), (G), or (H); or
                    ``(J) any security agreement or arrangement or 
                other credit enhancement related to any agreement or 
                transaction referred to in this paragraph, including 
                any guarantee or reimbursement obligation by or to a 
                commodity broker or financial participant in connection 
                with any agreement or transaction referred to in this 
                paragraph, but not to exceed the damages in connection 
                with any such agreement or transaction, measured in 
                accordance with section 562;''.
    (b) Definitions of Financial Institution, Financial Participant, 
and Forward Contract Merchant.--Section 101 of title 11, United States 
Code, is amended--
            (1) by striking paragraph (22) and inserting the following:
            ``(22) `financial institution' means--
                    ``(A) a Federal reserve bank, or an entity 
                (domestic or foreign) that is a commercial or savings 
                bank, industrial savings bank, savings and loan 
                association, trust company, or receiver or conservator 
                for such entity and, when any such Federal reserve 
                bank, receiver, conservator or entity is acting as 
                agent or custodian for a customer in connection with a 
                securities contract (as defined in section 741) such 
                customer; or
                    ``(B) in connection with a securities contract (as 
                defined in section 741) an investment company 
                registered under the Investment Company Act of 1940;'';
            (2) by inserting after paragraph (22) the following:
            ``(22A) `financial participant' means--
                    ``(A) an entity that, at the time it enters into a 
                securities contract, commodity contract, swap 
                agreement, repurchase agreement, or forward contract, 
                or at the time of the date of the filing of the 
                petition, has one or more agreements or transactions 
                described in paragraph (1), (2), (3), (4), (5), or (6) 
                of section 561(a) with the debtor or any other entity 
                (other than an affiliate) of a total gross dollar value 
                of not less than $1,000,000,000 in notional or actual 
                principal amount outstanding on any day during the 
                previous 15-month period, or has gross mark-to-market 
                positions of not less than $100,000,000 (aggregated 
                across counterparties) in one or more such agreements 
                or transactions with the debtor or any other entity 
                (other than an affiliate) on any day during the 
                previous 15-month period; or
                    ``(B) a clearing organization (as defined in 
                section 402 of the Federal Deposit Insurance 
                Corporation Improvement Act of 1991);''; and
            (3) by striking paragraph (26) and inserting the following:
            ``(26) `forward contract merchant' means a Federal reserve 
        bank, or an entity the business of which consists in whole or 
        in part of entering into forward contracts as or with merchants 
        in a commodity (as defined in section 761) or any similar good, 
        article, service, right, or interest which is presently or in 
        the future becomes the subject of dealing in the forward 
        contract trade;''.
    (c) Definition of Master Netting Agreement and Master Netting 
Agreement Participant.--Section 101 of title 11, United States Code, is 
amended by inserting after paragraph (38) the following new paragraphs:
            ``(38A) `master netting agreement'--
                    ``(A) means an agreement providing for the exercise 
                of rights, including rights of netting, setoff, 
                liquidation, termination, acceleration, or close out, 
                under or in connection with one or more contracts that 
                are described in any one or more of paragraphs (1) 
                through (5) of section 561(a), or any security 
                agreement or arrangement or other credit enhancement 
                related to one or more of the foregoing, including any 
                guarantee or reimbursement obligation related to 1 or 
                more of the foregoing; and
                    ``(B) if the agreement contains provisions relating 
                to agreements or transactions that are not contracts 
                described in paragraphs (1) through (5) of section 
                561(a), shall be deemed to be a master netting 
                agreement only with respect to those agreements or 
                transactions that are described in any one or more of 
                paragraphs (1) through (5) of section 561(a);
            ``(38B) `master netting agreement participant' means an 
        entity that, at any time before the date of the filing of the 
        petition, is a party to an outstanding master netting agreement 
        with the debtor;''.
    (d) Swap Agreements, Securities Contracts, Commodity Contracts, 
Forward Contracts, Repurchase Agreements, and Master Netting Agreements 
Under the Automatic-Stay.--
            (1) In general.--Section 362(b) of title 11, United States 
        Code, as amended by sections 224, 303, 311, 401, and 718, is 
        amended--
                    (A) in paragraph (6), by inserting ``, pledged to, 
                under the control of,'' after ``held by'';
                    (B) in paragraph (7), by inserting ``, pledged to, 
                under the control of,'' after ``held by'';
                    (C) by striking paragraph (17) and inserting the 
                following:
            ``(17) under subsection (a), of the setoff by a swap 
        participant or financial participant of a mutual debt and claim 
        under or in connection with one or more swap agreements that 
        constitutes the setoff of a claim against the debtor for any 
        payment or other transfer of property due from the debtor under 
        or in connection with any swap agreement against any payment 
        due to the debtor from the swap participant or financial 
        participant under or in connection with any swap agreement or 
        against cash, securities,or other property held by, pledged to, 
under the control of, or due from such swap participant or financial 
participant to margin, guarantee, secure, or settle any swap 
agreement;''; and
                    (D) by inserting after paragraph (26) the 
                following:
            ``(27) under subsection (a), of the setoff by a master 
        netting agreement participant of a mutual debt and claim under 
        or in connection with one or more master netting agreements or 
        any contract or agreement subject to such agreements that 
        constitutes the setoff of a claim against the debtor for any 
        payment or other transfer of property due from the debtor under 
        or in connection with such agreements or any contract or 
        agreement subject to such agreements against any payment due to 
        the debtor from such master netting agreement participant under 
        or in connection with such agreements or any contract or 
        agreement subject to such agreements or against cash, 
        securities, or other property held by, pledged to, under the 
        control of, or due from such master netting agreement 
        participant to margin, guarantee, secure, or settle such 
        agreements or any contract or agreement subject to such 
        agreements, to the extent that such participant is eligible to 
        exercise such offset rights under paragraph (6), (7), or (17) 
        for each individual contract covered by the master netting 
        agreement in issue; and''.
            (2) Limitation.--Section 362 of title 11, United States 
        Code, as amended by sections 106, 305, 311, and 441, is amended 
        by adding at the end the following:
    ``(o) The exercise of rights not subject to the stay arising under 
subsection (a) pursuant to paragraph (6), (7), (17), or (27) of 
subsection (b) shall not be stayed by any order of a court or 
administrative agency in any proceeding under this title.''.
    (e) Limitation of Avoidance Powers Under Master Netting 
Agreement.--Section 546 of title 11, United States Code, is amended--
            (1) in subsection (g) (as added by section 103 of Public 
        Law 101-311)--
                    (A) by striking ``under a swap agreement'';
                    (B) by striking ``in connection with a swap 
                agreement'' and inserting ``under or in connection with 
                any swap agreement''; and
                    (C) by inserting ``or financial participant'' after 
                ``swap participant''; and
            (2) by adding at the end the following:
    ``(j) Notwithstanding sections 544, 545, 547, 548(a)(1)(B), and 
548(b) the trustee may not avoid a transfer made by or to a master 
netting agreement participant under or in connection with any master 
netting agreement or any individual contract covered thereby that is 
made before the commencement of the case, except under section 
548(a)(1)(A) and except to the extent that the trustee could otherwise 
avoid such a transfer made under an individual contract covered by such 
master netting agreement.''.
    (f) Fraudulent Transfers of Master Netting Agreements.--Section 
548(d)(2) of title 11, United States Code, is amended--
            (1) in subparagraph (C), by striking ``and'' at the end;
            (2) in subparagraph (D), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
            ``(E) a master netting agreement participant that receives 
        a transfer in connection with a master netting agreement or any 
        individual contract covered thereby takes for value to the 
        extent of such transfer, except that, with respect to a 
        transfer under any individual contract covered thereby, to the 
        extent that such master netting agreement participant otherwise 
        did not take (or is otherwise not deemed to have taken) such 
        transfer for value.''.
    (g) Termination or Acceleration of Securities Contracts.--Section 
555 of title 11, United States Code, is amended--
            (1) by amending the section heading to read as follows:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 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 by any insured depository 
                institution with respect to qualified financial 
                contracts (including market valuations) only if such 
                insured depository institution is in a troubled 
                condition (as such term is defined by the Corporation 
                pursuant to section 32).''.

SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION REQUIREMENT.

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

SEC. 910. DAMAGE MEASURE.

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

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

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

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

SEC. 911. SIPC STAY.

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

       TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN

SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.

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

SEC. 1002. DEBT LIMIT INCREASE.

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

SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.

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

SEC. 1004. DEFINITION OF FAMILY FARMER.

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

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

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

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

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

SEC. 1007. FAMILY FISHERMEN.

    (a) Definitions.--Section 101 of title 11, United States Code, is 
amended--
            (1) by inserting after paragraph (7) the following:
            ``(7A) `commercial fishing operation' means--
                    ``(A) the catching or harvesting of fish, shrimp, 
                lobsters, urchins, seaweed, shellfish, or other aquatic 
                species or products of such species; or
                    ``(B) for purposes of section 109 and chapter 12, 
                aquaculture activities consisting of raising for market 
                any species or product described in subparagraph (A);
            ``(7B) `commercial fishing vessel' means a vessel used by a 
        family fisherman to carry out a commercial fishing 
        operation;''; and
            (2) by inserting after paragraph (19) the following:
            ``(19A) `family fisherman' means--
                    ``(A) an individual or individual and spouse 
                engaged in a commercial fishing operation--
                            ``(i) whose aggregate debts do not exceed 
                        $1,500,000 and not less than 80 percent of 
                        whose aggregate noncontingent, liquidated debts 
                        (excluding a debt for the principal residence 
                        of such individual or such individual and 
                        spouse, unless such debt arises out of a 
                        commercial fishing operation), on the date the 
                        case is filed, arise out of a commercial 
                        fishing operation owned or operated by such 
                        individual or such individual and spouse; and
                            ``(ii) who receive from such commercial 
                        fishing operation more than 50 percent of such 
                        individual's or such individual's and spouse's 
                        gross income for the taxable year preceding the 
                        taxable year in which the case concerning such 
                        individual or such individual and spouse was 
                        filed; or
                    ``(B) a corporation or partnership--
                            ``(i) in which more than 50 percent of the 
                        outstanding stock or equity is held by--
                                    ``(I) 1 family that conducts the 
                                commercial fishing operation; or
                                    ``(II) 1 family and the relatives 
                                of the members of such family, and such 
                                family or such relatives conduct the 
                                commercial fishing operation; and
                            ``(ii)(I) more than 80 percent of the value 
                        of its assets consists of assets related to the 
                        commercial fishing operation;
                            ``(II) its aggregate debts do not exceed 
                        $1,500,000 and not less than 80 percent of its 
                        aggregate noncontingent, liquidated debts 
                        (excluding a debt for 1 dwelling which is owned 
                        by such corporation or partnership and which a 
                        shareholder or partner maintains as a principal 
                        residence, unless such debt arises out of a 
                        commercial fishing operation), on the date the 
                        case is filed, arise out of a commercial 
                        fishing operation owned or operated by such 
                        corporation or such partnership; and
                            ``(III) if such corporation issues stock, 
                        such stock is not publicly traded;
            ``(19B) `family fisherman with regular annual income' means 
        a family fisherman whose annual income is sufficiently stable 
        and regular to enable such family fisherman to make payments 
        under a plan under chapter 12 of this title;''.
    (b) Who May Be a Debtor.--Section 109(f) of title 11, United States 
Code, is amended by inserting ``or family fisherman'' after ``family 
farmer''.
    (c)  Chapter 12.--Chapter 12 of title 11, United States Code, is 
amended--
            (1) in the chapter heading, by inserting ``OR FISHERMAN'' 
        after ``FAMILY FARMER'';
            (2) in section 1203, by inserting ``or commercial fishing 
        operation'' after ``farm''; and
            (3) in section 1206, by striking ``if the property is 
        farmland or farm equipment'' and inserting ``if the property is 
        farmland, farm equipment, or property used to carry out a 
        commercial fishing operation (including a commercial fishing 
        vessel)''.
    (d) Clerical Amendment.--In the table of chapters for title 11, 
United States Code, the item relating to chapter 12, is amended to read 
as follows:

``12. Adjustments of Debts of a Family Farmer or Family         1201''.
                            Fisherman with Regular Annual 
                            Income.
    (e) Applicability.--Nothing in this section shall change, affect, 
or amend the Fishery Conservation and Management Act of 1976 (16 U.S.C. 
1801, et seq.).

              TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS

SEC. 1101. DEFINITIONS.

    (a) Health Care Business Defined.--Section 101 of title 11, United 
States Code, as amended by section 306, is amended--
            (1) by redesignating paragraph (27A) as paragraph (27B); 
        and
            (2) by inserting after paragraph (27) the following:
            ``(27A) `health care business'--
                    ``(A) means any public or private entity (without 
                regard to whether that entity is organized for profit 
                or not for profit) that is primarily engaged in 
                offering to the general public facilities and services 
                for--
                            ``(i) the diagnosis or treatment of injury, 
                        deformity, or disease; and
                            ``(ii) surgical, drug treatment, 
                        psychiatric, or obstetric care; and
                    ``(B) includes--
                            ``(i) any--
                                    ``(I) general or specialized 
                                hospital;
                                    ``(II) ancillary ambulatory, 
                                emergency, or surgical treatment 
                                facility;
                                    ``(III) hospice;
                                    ``(IV) home health agency; and
                                    ``(V) other health care institution 
                                that is similar to an entity referred 
                                to in subclause (I), (II), (III), or 
                                (IV); and
                            ``(ii) any long-term care facility, 
                        including any--
                                    ``(I) skilled nursing facility;
                                    ``(II) intermediate care facility;
                                    ``(III) assisted living facility;
                                    ``(IV) home for the aged;
                                    ``(V) domiciliary care facility; 
                                and
                                    ``(VI) health care institution that 
                                is related to a facility referred to in 
                                subclause (I), (II), (III), (IV), or 
                                (V), if that institution is primarily 
                                engaged in offering room, board, 
                                laundry, or personal assistance with 
                                activities of daily living and 
                                incidentals to activities of daily 
                                living;''.
    (b) Patient and Patient Records Defined.--Section 101 of title 11, 
United States Code, is amended by inserting after paragraph (40) the 
following:
            ``(40A) `patient' means any individual who obtains or 
        receives services from a health care business;
            ``(40B) `patient records' means any written document 
        relating to a patient or a record recorded in a magnetic, 
        optical, or other form of electronic medium;''.
    (c) Rule of Construction.--The amendments made by subsection (a) of 
this section shall not affect the interpretation of section 109(b) of 
title 11, United States Code.

SEC. 1102. DISPOSAL OF PATIENT RECORDS.

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

``Sec. 351. Disposal of patient records

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

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

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

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

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

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

``Sec. 333. Appointment of patient care ombudsman

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

``333. Appointment of ombudsman.''.

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

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

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

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

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

                    TITLE XII--TECHNICAL AMENDMENTS

SEC. 1201. DEFINITIONS.

    Section 101 of title 11, United States Code, as hereinbefore 
amended by this Act, is amended--
            (1) by striking ``In this title--'' and inserting ``In this 
        title the following definitions shall apply:'';
            (2) in each paragraph, by inserting ``The term'' after the 
        paragraph designation;
            (3) in paragraph (35)(B), by striking ``paragraphs (21B) 
        and (33)(A)'' and inserting ``paragraphs (23) and (35)'';
            (4) in each of paragraphs (35A), (38), and (54A), by 
        striking ``; and'' at the end and inserting a period;
            (5) in paragraph (51B)--
                    (A) by inserting ``who is not a family farmer'' 
                after ``debtor'' the first place it appears; and
                    (B) by striking ``thereto having aggregate'' and 
                all that follows through the end of the paragraph and 
                inserting a semicolon;
            (6) by striking paragraph (54) and inserting the following:
            ``(54) The term `transfer' means--
                    ``(A) the creation of a lien;
                    ``(B) the retention of title as a security 
                interest;
                    ``(C) the foreclosure of a debtor's equity of 
                redemption; or
                    ``(D) each mode, direct or indirect, absolute or 
                conditional, voluntary or involuntary, of disposing of 
                or parting with--
                            ``(i) property; or
                            ``(ii) an interest in property;'';
            (7) by indenting the left margin of paragraph (54A) 2 ems 
        to the right; and
            (8) in each of paragraphs (1) through (35), in each of 
        paragraphs (36), (37), (38A), (38B) and (39A), and in each of 
        paragraphs (40) through (55), by striking the semicolon at the 
        end and inserting a period.

SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.

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

SEC. 1203. EXTENSION OF TIME.

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

SEC. 1204. TECHNICAL AMENDMENTS.

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

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

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

SEC. 1206. LIMITATION ON COMPENSATION OF PROFESSIONAL PERSONS.

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

SEC. 1207. EFFECT OF CONVERSION.

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

SEC. 1208. ALLOWANCE OF ADMINISTRATIVE EXPENSES.

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

SEC. 1209. EXCEPTIONS TO DISCHARGE.

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

SEC. 1210. EFFECT OF DISCHARGE.

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

SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREATMENT.

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

SEC. 1212. PROPERTY OF THE ESTATE.

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

SEC. 1213. PREFERENCES.

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

SEC. 1214. POSTPETITION TRANSACTIONS.

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

SEC. 1215. DISPOSITION OF PROPERTY OF THE ESTATE.

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

SEC. 1216. GENERAL PROVISIONS.

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

SEC. 1217. ABANDONMENT OF RAILROAD LINE.

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

SEC. 1218. CONTENTS OF PLAN.

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

SEC. 1219. BANKRUPTCY CASES AND PROCEEDINGS.

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

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

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

SEC. 1221. TRANSFERS MADE BY NONPROFIT CHARITABLE CORPORATIONS.

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

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

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

SEC. 1223. BANKRUPTCY JUDGESHIPS.

    (a) Short Title.--This section may be cited as the ``Bankruptcy 
Judgeship Act of 2003''.
    (b) Temporary Judgeships.--
            (1) Appointments.--The following bankruptcy judges shall be 
        appointed in the manner prescribed in section 152(a)(1) of 
        title 28, United States Code, for the appointment of bankruptcy 
        judges provided for in section 152(a)(2) of such title:
                    (A) One additional bankruptcy judge for the eastern 
                district of California.
                    (B) Three additional bankruptcy judges for the 
                central district of California.
                    (C) Four additional bankruptcy judges for the 
                district of Delaware.
                    (D) Two additional bankruptcy judges for the 
                southern district of Florida.
                    (E) One additional bankruptcy judge for the 
                southern district of Georgia.
                    (F) Three additional bankruptcy judges for the 
                district of Maryland.
                    (G) One additional bankruptcy judge for the eastern 
                district of Michigan.
                    (H) One additional bankruptcy judge for the 
                southern district of Mississippi.
                    (I) One additional bankruptcy judge for the 
                district of New Jersey.
                    (J) One additional bankruptcy judge for the eastern 
                district of New York.
                    (K) One additional bankruptcy judge for the 
                northern district of New York.
                    (L) One additional bankruptcy judge for the 
                southern district of New York.
                    (M) One additional bankruptcy judge for the eastern 
                district of North Carolina.
                    (N) One additional bankruptcy judge for the eastern 
                district of Pennsylvania.
                    (O) One additional bankruptcy judge for the middle 
                district of Pennsylvania.
                    (P) One additional bankruptcy judge for the 
                district of Puerto Rico.
                    (Q) One additional bankruptcy judge for the western 
                district of Tennessee.
                    (R) One additional bankruptcy judge for the eastern 
                district of Virginia.
                    (S) One additional bankruptcy judge for the 
                district of South Carolina.
                    (T) One additional bankruptcy judge for the 
                district of Nevada.
            (2) Vacancies.--
                    (A) Districts with single appointments.--Except as 
                provided in subparagraphs (B), (C), (D), and (E), the 
                first vacancy occurring in the office of bankruptcy 
                judge in each of the judicial districts set forth in 
                paragraph (1)--
                            (i) occurring 5 years or more after the 
                        appointment date of the bankruptcy judge 
                        appointed under paragraph (1) to such office; 
                        and
                            (ii) resulting from the death, retirement, 
                        resignation, or removal of a bankruptcy judge;
                shall not be filled.
                    (B) Central district of california.--The 1st, 2d, 
                and 3d vacancies in the office of bankruptcy judge in 
                the central district of California--
                            (i) occurring 5 years or more after the 
                        respective 1st, 2d, and 3d appointment dates of 
                        the bankruptcy judges appointed under paragraph 
                        (1)(B); and
                            (ii) resulting from the death, retirement, 
                        resignation, or removal of a bankruptcy judge;
                shall not be filled.
                    (C) District of delaware.--The 1st, 2d, 3d, and 4th 
                vacancies in the office of bankruptcy judge in the 
                district of Delaware--
                            (i) occurring 5 years or more after the 
                        respective 1st, 2d, 3d, and 4th appointment 
                        dates of the bankruptcy judges appointed under 
                        paragraph (1)(F); and
                            (ii) resulting from the death, retirement, 
                        resignation, or removal of a bankruptcy judge;
                shall not be filled.
                    (D) Southern district of florida.--The 1st and 2d 
                vacancies in the office of bankruptcy judge in the 
                southern district of Florida--
                            (i) occurring 5 years or more after the 
                        respective 1st and 2d appointment dates of the 
                        bankruptcy judges appointed under paragraph 
                        (1)(D); and
                            (ii) resulting from the death, retirement, 
                        resignation, or removal of a bankruptcy judge;
                shall not be filled.
                    (E) District of maryland.--The 1st, 2d, and 3d 
                vacancies in the office of bankruptcy judge in the 
                district of Maryland--
                            (i) occurring 5 years or more after the 
                        respective 1st, 2d, and 3d appointment dates of 
                        the bankruptcy judges appointed under paragraph 
                        (1)(F); and
                            (ii) resulting from the death, retirement, 
                        resignation, or removal of a bankruptcy judge;
                shall not be filled.
    (c) Extensions.--
            (1) In general.--The temporary office of bankruptcy judges 
        authorized for the northern district of Alabama, the district 
        of Delaware, the district of Puerto Rico, and the eastern 
        district of Tennessee under paragraphs (1), (3), (7), and (9) 
        of section 3(a) of the Bankruptcy Judgeship Act of 1992 (28 
        U.S.C. 152 note) are extended until the first vacancy occurring 
        in the office of a bankruptcy judge in the applicable district 
        resulting from the death, retirement, resignation, or removal 
        of a bankruptcy judge and occurring 5 years after the date of 
        the enactment of this Act.
            (2) Applicability of other provisions.--All other 
        provisions of section 3 of the Bankruptcy Judgeship Act of 1992 
        (28 U.S.C. 152 note) remain applicable to the temporary office 
        of bankruptcy judges referred to in this subsection.
    (d) Technical Amendments.--Section 152(a) of title 28, United 
States Code, is amended--
            (1) in paragraph (1), by striking the first sentence and 
        inserting the following: ``Each bankruptcy judge to be 
        appointed for a judicial district, as provided in paragraph 
        (2), shall be appointed by the court of appeals of the United 
        States for the circuit in which such district is located.''; 
        and
            (2) in paragraph (2)--
                    (A) in the item relating to the middle district of 
                Georgia, by striking ``2'' and inserting ``3''; and
                    (B) in the collective item relating to the middle 
                and southern districts of Georgia, by striking ``Middle 
                and Southern . . . . . . 1''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 1224. COMPENSATING TRUSTEES.

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

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

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

SEC. 1226. JUDICIAL EDUCATION.

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

SEC. 1227. RECLAMATION.

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

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

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

SEC. 1229. ENCOURAGING CREDITWORTHINESS.

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

SEC. 1230. PROPERTY NO LONGER SUBJECT TO REDEMPTION.

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

SEC. 1231. TRUSTEES.

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

SEC. 1232. BANKRUPTCY FORMS.

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

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

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

SEC. 1234. INVOLUNTARY CASES.

    (a) Amendments.--Section 303 of title 11, United States Code, is 
amended--
            (1) in subsection (b)(1), by--
                    (A) inserting ``as to liability or amount'' after 
                ``bona fide dispute''; and
                    (B) striking ``if such claims'' and inserting ``if 
                such noncontingent, undisputed claims''; and
            (2) in subsection (h)(1), by inserting ``as to liability or 
        amount'' before the semicolon at the end.
    (b) Effective Date; Application of Amendments.--This section and 
the amendments made by this section shall take effect on the date of 
the enactment of this Act and shall not apply with respect to cases 
commenced under title 11 of the United States Code before such date.

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

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

                 TITLE XIII--CONSUMER CREDIT DISCLOSURE

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

    (a) Minimum Payment Disclosures.--Section 127(b) of the Truth in 
Lending Act (15 U.S.C. 1637(b)) is amended by adding at the end the 
following:
            ``(11)(A) In the case of an open end credit plan that 
        requires a minimum monthly payment of not more than 4 percent 
        of the balance on which finance charges are accruing, the 
        following statement, located on the front of the billing 
        statement, disclosed clearly and conspicuously: `Minimum 
        Payment Warning: Making only the minimum payment will increase 
        the interest you pay and the time it takes to repay your 
        balance. For example, making only the typical 2% minimum 
        monthly payment on a balance of $1,000 at an interest rate of 
        17% would take 88 months to repay the balance in full. For an 
        estimate of the time it would take to repay your balance, 
        making only minimum payments, call this toll-free number: 
        ____________.' (the blank space to be filled in by the 
        creditor).
            ``(B) In the case of an open end credit plan that requires 
        a minimum monthly payment of more than 4 percent of the balance 
        on which finance charges are accruing, the following statement, 
        in a prominent location on the front of the billing statement, 
        disclosed clearly and conspicuously: `Minimum Payment Warning: 
        Making only the required minimum payment will increase the 
        interest you pay and the time it takes to repay your balance. 
        Making a typical 5% minimum monthly payment on a balance of 
        $300 at an interest rate of 17% would take 24 months to repay 
        the balance in full. For an estimate of the time it would take 
        to repay your balance, making only minimum monthly payments, 
        call this toll-free number: ____________.' (the blank space to 
        be filled in by the creditor).
            ``(C) Notwithstanding subparagraphs (A) and (B), in the 
        case of a creditor with respect to which compliance with this 
        title is enforced by the Federal Trade Commission, the 
        following statement, in a prominent location on the front of 
        the billing statement, disclosed clearly and conspicuously: 
        `Minimum Payment Warning: Making only the required minimum 
        payment will increase the interest you pay and the time it 
        takes to repay your balance. For example, making only the 
        typical 5% minimum monthly payment on a balance of $300 at an 
        interest rate of 17% would take 24 months to repay the balance 
        in full. For an estimate of the time it would take to repay 
        your balance, making only minimum monthly payments, call the 
        Federal Trade Commission at this toll-free number: 
        ____________.' (the blank space to be filled in by the 
        creditor). A creditor who is subject to this subparagraph shall 
        not be subject to subparagraph (A) or (B).
            ``(D) Notwithstanding subparagraph (A), (B), or (C), in 
        complying with any such subparagraph, a creditor may substitute 
        an example based on an interest rate that is greater than 17 
        percent. Any creditor that is subject to subparagraph (B) may 
        elect to provide the disclosure required under subparagraph (A) 
        in lieu of the disclosure required under subparagraph (B).
            ``(E) The Board shall, by rule, periodically recalculate, 
        as necessary, the interest rate and repayment period under 
        subparagraphs (A), (B), and (C).
            ``(F)(i) The toll-free telephone number disclosed by a 
        creditor or the Federal Trade Commission under subparagraph 
        (A), (B), or (G), as appropriate, may be a toll-free telephone 
        number established and maintained by the creditor or the 
        Federal Trade Commission, as appropriate, or may be a toll-free 
        telephone number established and maintained by a third party 
        for use by the creditor or multiple creditors or the Federal 
        Trade Commission, as appropriate. The toll-free telephone 
        number may connect consumers to an automated device through 
        which consumers may obtain information described in 
        subparagraph (A), (B), or (C), by inputting information using a 
        touch-tone telephone or similar device, if consumers whose 
        telephones are not equipped to use such automated device are 
        provided the opportunity to be connected to an individual from 
        whom the information described in subparagraph (A), (B), or 
        (C), as applicable, may be obtained. A person that receives a 
        request for information described in subparagraph (A), (B), or 
        (C) from an obligor through the toll-free telephone number 
        disclosed under subparagraph (A), (B), or (C), as applicable, 
        shall disclose in response to such request only the information 
        set forth in the table promulgated by the Board under 
        subparagraph (H)(i).
            ``(ii)(I) The Board shall establish and maintain for a 
        period not to exceed 24 months following the effective date of 
        the Bankruptcy Abuse Prevention and Consumer Protection Act of 
        2003, a toll-free telephone number, or provide a toll-free 
        telephone number established and maintained by a third party, 
        for use by creditors that are depository institutions (as 
        defined in section 3 of the Federal Deposit Insurance Act), 
        including a Federal credit union or State credit union (as 
        defined in section 101 of the Federal Credit Union Act), with 
        total assets not exceeding $250,000,000. The toll-free 
        telephone number may connect consumers to an automated device 
        through which consumers may obtain information described in 
        subparagraph (A) or (B), as applicable, by inputting 
        information using a touch-tone telephone or similar device, if 
        consumers whose telephones are not equipped to use such 
        automated device are provided the opportunity to be connected 
        to an individual from whom the information described in 
        subparagraph (A) or (B), as applicable, may be obtained. A 
        person that receives a request for information described in 
        subparagraph (A) or (B) from an obligor through the toll-free 
        telephone number disclosed under subparagraph (A) or (B), as 
        applicable, shall disclose in response to such request only the 
        information set forth in the table promulgated by the Board 
        under subparagraph (H)(i). The dollar amount contained in this 
        subclause shall be adjusted according to an indexing mechanism 
        established by the Board.
            ``(II) Not later than 6 months prior to the expiration of 
        the 24-month period referenced in subclause (I), the Board 
        shall submit to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial Services 
        of the House of Representatives a report on the program 
        described in subclause (I).
            ``(G) The Federal Trade Commission shall establish and 
        maintain a toll-free number for the purpose of providing to 
        consumers the information required to be disclosed under 
        subparagraph (C).
            ``(H) The Board shall--
                    ``(i) establish a detailed table illustrating the 
                approximate number of months that it would take to 
                repay an outstanding balance if a consumer pays only 
                the required minimum monthly payments and if no other 
                advances are made, which table shall clearly present 
                standardized information to be used to disclose the 
                information required to be disclosed under subparagraph 
                (A), (B), or (C), as applicable;
                    ``(ii) establish the table required under clause 
                (i) by assuming--
                            ``(I) a significant number of different 
                        annual percentage rates;
                            ``(II) a significant number of different 
                        account balances;
                            ``(III) a significant number of different 
                        minimum payment amounts; and
                            ``(IV) that only minimum monthly payments 
                        are made and no additional extensions of credit 
                        are obtained; and
                    ``(iii) promulgate regulations that provide 
                instructional guidance regarding the manner in which 
                the information contained in the table established 
                under clause (i) should be used in responding to the 
                request of an obligor for any information required to 
                be disclosed under subparagraph (A), (B), or (C).
            ``(I) The disclosure requirements of this paragraph do not 
        apply to any charge card account, the primary purpose of which 
        is to require payment of charges in full each month.
            ``(J) A creditor that maintains a toll-free telephone 
        number for the purpose of providing customers with the actual 
        number of months that it will take to repay the customer's 
        outstanding balance is not subject to the requirements of 
        subparagraph (A) or (B).
            ``(K) A creditor that maintains a toll-free telephone 
        number for the purpose of providing customers with the actual 
        number of months that it will take to repay an outstanding 
        balance shall include the following statement on each billing 
        statement: `Making only the minimum payment will increase the 
        interest you pay and the time it takes to repay your balance. 
        For more information, call this toll-free number: ________.' 
        (the blank space to be filled in by the creditor).''.
    (b) Regulatory Implementation.--
            (1) In general.--The Board of Governors of the Federal 
        Reserve System (hereafter in this title referred to as the 
        ``Board'') shall promulgate regulations implementing the 
        requirements of section 127(b)(11) of the Truth in Lending Act, 
        as added by subsection (a) of this section.
            (2) Effective date.--Section 127(b)(11) of the Truth in 
        Lending Act, as added by subsection (a) of this section, and 
        the regulations issued under paragraph (1) of this subsection 
        shall not take effect until the later of--
                    (A) 18 months after the date of enactment of this 
                Act; or
                    (B) 12 months after the publication of such final 
                regulations by the Board.
    (c) Study of Financial Disclosures.--
            (1) In general.--The Board may conduct a study to determine 
        the types of information available to potential borrowers from 
        consumer credit lending institutions regarding factors 
        qualifying potential borrowers for credit, repayment 
        requirements, and the consequences of default.
            (2) Factors for consideration.--In conducting a study under 
        paragraph (1), the Board should, in consultation with the other 
        Federal banking agencies (as defined in section 3 of the 
        Federal Deposit Insurance Act), the National Credit Union 
        Administration, and the Federal Trade Commission, consider the 
        extent to which--
                    (A) consumers, in establishing new credit 
                arrangements, are aware of their existing payment 
                obligations, the need to consider those obligations in 
                deciding to take on new credit, and how taking on 
                excessive credit can result in financial difficulty;
                    (B) minimum periodic payment features offered in 
                connection with open end credit plans impact consumer 
                default rates;
                    (C) consumers make only the required minimum 
                payment under open end credit plans;
                    (D) consumers are aware that making only required 
                minimum payments will increase the cost and repayment 
                period of an open end credit obligation; and
                    (E) the availability of low minimum payment options 
                is a cause of consumers experiencing financial 
                difficulty.
            (3) Report to congress.--Findings of the Board in 
        connection with any study conducted under this subsection shall 
        be submitted to Congress. Such report shall also include 
        recommendations for legislative initiatives, if any, of the 
        Board, based on its findings.

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

    (a) Open End Credit Extensions.--
            (1) Credit applications.--Section 127A(a)(13) of the Truth 
        in Lending Act (15 U.S.C. 1637a(a)(13)) is amended--
                    (A) by striking ``consultation of tax adviser.--A 
                statement that the'' and inserting the following: ``tax 
                deductibility.--A statement that--
                    ``(A) the''; and
                    (B) by striking the period at the end and inserting 
                the following: ``; and
                    ``(B) in any case in which the extension of credit 
                exceeds the fair market value (as defined under the 
                Internal Revenue Code of 1986) of the dwelling, the 
                interest on the portion of the credit extension that is 
                greater than the fair market value of the dwelling is 
                not tax deductible for Federal income tax purposes.''.
            (2) Credit advertisements.--Section 147(b) of the Truth in 
        Lending Act (15 U.S.C. 1665b(b)) is amended--
                    (A) by striking ``If any'' and inserting the 
                following:
            ``(1) In general.--If any''; and
                    (B) by adding at the end the following:
            ``(2) Credit in excess of fair market value.--Each 
        advertisement described in subsection (a) that relates to an 
        extension of credit that may exceed the fair market value of 
        the dwelling, and which advertisement is disseminated in paper 
        form to the public or through the Internet, as opposed to by 
        radio or television, shall include a clear and conspicuous 
        statement that--
                    ``(A) the interest on the portion of the credit 
                extension that is greater than the fair market value of 
                the dwelling is not tax deductible for Federal income 
                tax purposes; and
                    ``(B) the consumer should consult a tax adviser for 
                further information regarding the deductibility of 
                interest and charges.''.
    (b) Non-Open End Credit Extensions.--
            (1) Credit applications.--Section 128 of the Truth in 
        Lending Act (15 U.S.C. 1638) is amended--
                    (A) in subsection (a), by adding at the end the 
                following:
            ``(15) In the case of a consumer credit transaction that is 
        secured by the principal dwelling of the consumer, in which the 
        extension of credit may exceed the fair market value of the 
        dwelling, a clear and conspicuous statement that--
                    ``(A) the interest on the portion of the credit 
                extension that is greater than the fair market value of 
                the dwelling is not tax deductible for Federal income 
                tax purposes; and
                    ``(B) the consumer should consult a tax adviser for 
                further information regarding the deductibility of 
                interest and charges.''; and
                    (B) in subsection (b), by adding at the end the 
                following:
    ``(3) In the case of a credit transaction described in paragraph 
(15) of subsection (a), disclosures required by that paragraph shall be 
made to the consumer at the time of application for such extension of 
credit.''.
            (2) Credit advertisements.--Section 144 of the Truth in 
        Lending Act (15 U.S.C. 1664) is amended by adding at the end 
        the following:
    ``(e) Each advertisement to which this section applies that relates 
to a consumer credit transaction that is secured by the principal 
dwelling of a consumer in which the extension of credit may exceed the 
fair market value of the dwelling, and which advertisement is 
disseminated in paper form to the public or through the Internet, as 
opposed to by radio or television, shall clearly and conspicuously 
state that--
            ``(1) the interest on the portion of the credit extension 
        that is greater than the fair market value of the dwelling is 
        not tax deductible for Federal income tax purposes; and
            ``(2) the consumer should consult a tax adviser for further 
        information regarding the deductibility of interest and 
        charges.''.
    (c) Regulatory Implementation.--
            (1) In general.--The Board shall promulgate regulations 
        implementing the amendments made by this section.
            (2) Effective date.--Regulations issued under paragraph (1) 
        shall not take effect until the later of--
                    (A) 12 months after the date of enactment of this 
                Act; or
                    (B) 12 months after the date of publication of such 
                final regulations by the Board.

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

    (a) Introductory Rate Disclosures.--Section 127(c) of the Truth in 
Lending Act (15 U.S.C. 1637(c)) is amended by adding at the end the 
following:
            ``(6) Additional notice concerning `introductory rates'.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an application or solicitation to 
                open a credit card account and all promotional 
                materials accompanying such application or solicitation 
                for which a disclosure is required under paragraph (1), 
                and that offers a temporary annual percentage rate of 
                interest, shall--
                            ``(i) use the term `introductory' in 
                        immediate proximity to each listing of the 
                        temporary annual percentage rate applicable to 
                        such account, which term shall appear clearly 
                        and conspicuously;
                            ``(ii) if the annual percentage rate of 
                        interest that will apply after the end of the 
                        temporary rate period will be a fixed rate, 
                        state in a clear and conspicuous manner in a 
                        prominent location closely proximate to the 
                        first listing of the temporary annual 
                        percentage rate (other than a listing of the 
                        temporary annual percentage rate in the tabular 
                        format described in section 122(c)), the time 
                        period in which the introductory period will 
                        end and the annual percentage rate that will 
                        apply after the end of the introductory period; 
                        and
                            ``(iii) if the annual percentage rate that 
                        will apply after the end of the temporary rate 
                        period will vary in accordance with an index, 
                        state in a clear and conspicuous manner in a 
                        prominent location closely proximate to the 
                        first listing of the temporary annual 
                        percentage rate (other than a listing in the 
                        tabular format prescribed by section 122(c)), 
                        the time period in which the introductory 
                        period will end and the rate that will apply 
                        after that, based on an annual percentage rate 
                        that was in effect within 60 days before the 
                        date of mailing the application or 
                        solicitation.
                    ``(B) Exception.--Clauses (ii) and (iii) of 
                subparagraph (A) do not apply with respect to any 
                listing of a temporary annual percentage rate on an 
                envelope or other enclosure in which an application or 
                solicitation to open a credit card account is mailed.
                    ``(C) Conditions for introductory rates.--An 
                application or solicitation to open a credit card 
                account for which a disclosure is required under 
                paragraph (1), and that offers a temporary annual 
                percentage rate of interest shall, if that rate of 
                interest is revocable under any circumstance or upon 
                any event, clearly and conspicuously disclose, in a 
                prominent manner on or with such application or 
                solicitation--
                            ``(i) a general description of the 
                        circumstances that may result in the revocation 
                        of the temporary annual percentage rate; and
                            ``(ii) if the annual percentage rate that 
                        will apply upon the revocation of the temporary 
                        annual percentage rate--
                                    ``(I) will be a fixed rate, the 
                                annual percentage rate that will apply 
                                upon the revocation of the temporary 
                                annual percentage rate; or
                                    ``(II) will vary in accordance with 
                                an index, the rate that will apply 
                                after the temporary rate, based on an 
                                annual percentage rate that was in 
                                effect within 60 days before the date 
                                of mailing the application or 
                                solicitation.
                    ``(D) Definitions.--In this paragraph--
                            ``(i) the terms `temporary annual 
                        percentage rate of interest' and `temporary 
                        annual percentage rate' mean any rate of 
                        interest applicable to a credit card account 
                        for an introductory period of less than 1 year, 
                        if that rate is less than an annual percentage 
                        rate that was in effect within 60 days before 
                        the date of mailing the application or 
                        solicitation; and
                            ``(ii) the term `introductory period' means 
                        the maximum time period for which the temporary 
                        annual percentage rate may be applicable.
                    ``(E) Relation to other disclosure requirements.--
                Nothing in this paragraph may be construed to supersede 
                subsection (a) of section 122, or any disclosure 
                required by paragraph (1) or any other provision of 
                this subsection.''.
    (b) Regulatory Implementation.--
            (1) In general.--The Board shall promulgate regulations 
        implementing the requirements of section 127(c)(6) of the Truth 
        in Lending Act, as added by this section.
            (2) Effective date.--Section 127(c)(6) of the Truth in 
        Lending Act, as added by this section, and regulations issued 
        under paragraph (1) of this subsection shall not take effect 
        until the later of--
                    (A) 12 months after the date of enactment of this 
                Act; or
                    (B) 12 months after the date of publication of such 
                final regulations by the Board.

SEC. 1304. INTERNET-BASED CREDIT CARD SOLICITATIONS.

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

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

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

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

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

SEC. 1307. DUAL USE DEBIT CARD.

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

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

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

SEC. 1309. CLARIFICATION OF CLEAR AND CONSPICUOUS.

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

      TITLE XIV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS

SEC. 1401. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

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

                          Purpose and Summary

    H.R. 975, the ``Bankruptcy Abuse Prevention and Consumer 
Protection Act of 2003,'' is a comprehensive package of reform 
measures pertaining to both consumer and business bankruptcy 
cases. The purpose of the bill is to improve bankruptcy law and 
practice by restoring personal responsibility and integrity in 
the bankruptcy system and by ensuring that the system is fair 
for both debtors and creditors.
    With respect to the interests of creditors, the proposed 
reforms respond to many of the factors contributing to the 
increase in consumer bankruptcy filings, such as lack of 
personal financial accountability,\1\ the proliferation of 
serial filings, and the absence of effective oversight to 
eliminate abuse in the system. The heart of the bill's consumer 
bankruptcy reforms consists of the implementation of an income/
expense screening mechanism (``needs-based bankruptcy relief'' 
or ``means testing''), which is intended to ensure that debtors 
repay creditors the maximum they can afford. H.R. 975 also 
establishes new eligibility standards for consumer bankruptcy 
relief and includes provisions intended to crackdown on serial 
and abusive bankruptcy filings. It substantially augments the 
responsibilities of those charged with administering consumer 
bankruptcy cases as well as those who counsel debtors with 
respect to obtaining such relief. In addition, the bill caps 
the amount of homestead equity a debtor may shield from 
creditors, under certain circumstances.
---------------------------------------------------------------------------
    \1\ As one academic explained:

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

Bankruptcy Reform: Joint Hearing Before the Subcomm. on Commercial and 
Administrative Law of the House Comm. on the Judiciary and the Subcomm. 
on Administrative Oversight and the Courts of the Senate Comm. on the 
Judiciary, 106th Cong. 98 (1999) (statement of Prof. Todd Zywicki).
    H.R. 975 also includes various consumer protection reforms. 
The bill penalizes a creditor who unreasonably refuses to 
negotiate a pre-bankruptcy debt repayment plan with a debtor. 
It strengthens the disclosure requirements for reaffirmation 
agreements (agreements by which debtors obligate themselves to 
repay otherwise dischargeable debts) so that debtors will be 
better informed about their rights and responsibilities. The 
legislation requires certain monthly credit card billing 
statements to include specified explanatory statements 
regarding the increased amount of interest and repayment time 
associated with making minimum payments. The bill requires 
certain home equity loan and credit card solicitations to 
include enhanced consumer disclosures. It also prohibits a 
creditor from terminating an open end consumer credit plan 
simply because the consumer has not incurred finance charges on 
the account. H.R. 975 allows debtors to shelter from the claims 
of creditors certain education IRA plans and retirement pension 
funds. It requires debtors to receive credit counseling before 
they can be eligible for bankruptcy relief so that they will 
make an informed choice about bankruptcy, its alternatives, and 
consequences. The bill also requires debtors, after they have 
filed for bankruptcy, to participate in financial management 
instructional courses so they can hopefully avoid future 
financial distress.
    With respect to business bankruptcy, H.R. 975 includes 
several significant provisions intended to heighten 
administrative scrutiny and judicial oversight of small 
business bankruptcy cases, which often are the least likely to 
reorganize successfully. In addition, it contains provisions 
designed to reduce systemic risk in the financial marketplace, 
the enactment of which Federal Reserve Board Chairman Alan 
Greenspan described as being ``extremely important.'' \2\ The 
bill includes heightened protections for family farmers facing 
financial distress and allows family fishermen to qualify for a 
specialized form of bankruptcy relief currently available only 
to family farmers. The bill also includes provisions concerning 
transnational insolvencies, bankrupt health care providers, the 
treatment of tax claims, and data collection. In response to 
the exponential increase in bankruptcy filings, the bill 
authorizes the creation of 28 additional bankruptcy judgeships.
---------------------------------------------------------------------------
    \2\ Letter from Alan Greenspan, Chairman, Federal Reserve Board, to 
F. James Sensenbrenner, Jr., Chairman, Committee on the Judiciary 
(Sept. 3, 2002) (on file with the Committee).
---------------------------------------------------------------------------
    H.R. 975, the ``Bankruptcy Abuse Prevention and Consumer 
Protection Act of 2003,'' as ordered reported in the form of a 
single amendment in the nature of a substitute, incorporates 
technical revisions adopted by unanimous consent. These 
revisions correct, for example, various grammatical, 
punctuation and spacing errors as well as other drafting 
errors.

                Background and Need for the Legislation

    Chairman F. James Sensenbrenner, Jr. (for himself and 50 
original cosponsors) introduced H.R. 975 on February 27, 2003. 
Except for the deletion of a controversial provision dealing 
with unlawful protest activities, H.R. 975, as introduced, is 
virtually identical to the conference report on H.R. 333, the 
``Bankruptcy Abuse Prevention and Consumer Protection Act of 
2001,'' considered in the last Congress.\3\ A modified version 
of this conference report \4\ was substituted for the text for 
H.R. 333 and the House, on the last day of the 107th Congress, 
passed H.R. 333, as amended, by a vote of 244 to 116.\5\ The 
Senate did not consider H.R. 333, as passed by the House, prior 
to the conclusion of the last Congress.
---------------------------------------------------------------------------
    \3\ H. Rep. No. 107-617 (2002).
    \4\ The modifications consisted of the deletion of two provisions, 
one dealing with unlawful protest activities and the other authorizing 
additional bankruptcy judgeships. The text of the conference report, as 
modified, was introduced as H.R. 5545, the ``Bankruptcy Abuse 
Prevention and Consumer Protection Act of 2003.'' H.R. 5545, 107th 
Cong. (2002). In turn, the text of H.R. 5545 was substituted as an 
amendment to H.R. 333. The House, thereafter, passed H.R. 333, as 
amended. 148 Cong. Rec. H8876-77 (daily ed. Nov. 14, 2002).
    \5\ 148 Cong. Rec. H8876-77 (daily ed. Nov. 14, 2002).
---------------------------------------------------------------------------
    Proposed reforms to bankruptcy law have been under 
consideration by Congress for nearly 6 years and have generally 
enjoyed broad support from the business community, banking and 
financial services industries as well as other groups such as 
family farmers and child support enforcement agencies.
    In the last three Congresses, support for bankruptcy reform 
legislation has been overwhelming and bipartisan. The House, in 
fact, has passed bankruptcy reform legislation on six separate 
occasions over the course of the preceding three Congresses. In 
the 105th Congress, for example, the House passed both H.R. 
3150, the ``Bankruptcy Reform Act of 1998,'' and the conference 
report on that bill by veto-proof margins.\6\ In the 106th 
Congress, the House passed H.R. 833, the successor to H.R. 
3150, by a veto-proof margin of 313 to 108 \7\ and agreed to 
the conference report \8\ by voice vote.\9\ Although the Senate 
subsequently passed this legislation by a vote of 70 to 28,\10\ 
President Clinton pocket-vetoed it.
---------------------------------------------------------------------------
    \6\ 144 Cong. Rec. H4442 (daily ed. June 10, 1998) (vote on final 
passage of H.R. 3150 was 306 to 118); 144 Cong. Rec. H10239-40 (daily 
ed. Oct. 9, 1998) (vote on final passage of the conference report on 
H.R. 3150 was 300 to 125).
    \7\ 145 Cong. Rec. H2771 (daily ed. May 5, 1999).
    \8\ H. Rep. No. 106-970 (2000).
    \9\ 146 Cong. Rec. H9840 (daily ed. Oct. 12, 2000).
    \10\ 146 Cong. Rec. S11730 (daily ed. Dec. 7, 2000).
---------------------------------------------------------------------------
    During the last Congress, the House, again, registered its 
overwhelming support for bankruptcy reform on two occasions. On 
March 1, 2001, the House passed H.R. 333, the ``Bankruptcy 
Abuse Prevention and Consumer Protection Act,'' by a vote of 
306 to 108.\11\ The House thereafter passed a modified version 
of the conference report on H.R. 333, as previously noted.\12\
---------------------------------------------------------------------------
    \11\ 147 Cong. Rec. H600-01 (daily ed. Mar. 1, 2001).
    \12\ See supra text accompanying notes 4-5.
---------------------------------------------------------------------------
    Representing the most comprehensive set of reforms in 
nearly 25 years, H.R 975's consumer bankruptcy provisions 
respond to several factors. First, consumer bankruptcy filings 
have in recent years generally escalated and their 
proliferation does not appear to be just a temporary event, but 
part of a fairly consistent upward trend.\13\ In 1998, for 
example, bankruptcy filings exceeded one million for the first 
time in our nation's history. Just 4 years later, however, the 
number of bankruptcy filings increased by 150% to 1.5 million 
cases in 2002.\14\ And, the upward trend is expected to 
continue.\15\ As a result, there is a growing perception that 
bankruptcy relief may be too readily available and that it 
sometimes is used as a first resort, rather than as a last 
resort.\16\
---------------------------------------------------------------------------
    \13\ Press Release, Administrative Office of the U.S. Courts, 
Record Breaking Bankruptcy Filings Reported in Calendar Year 2002, at 1 
(Feb. 14, 2003) (noting that ``[b]ankruptcy filings continue to break 
historic records'').
    \14\ Id. In the Eastern District of Michigan alone, bankruptcy 
filings for 2002 increased by 22 percent over the prior year. Becky 
Yerak, Bankrupt Filings in E. Mich. Skyrocket; High Debt, Slow Economy 
Spur 22% Increase in 2002, Biggest Jump in the United States, The 
Detroit News, Feb. 24, 2003, at 1A.
    \15\ See, e.g., Tami Luhby, Briefcase, Newsday, Mar. 3, 2003, at F2 
(noting, based on a recent report by Fitch Ratings, that ``consumer 
bankruptcies should hit a record high in 2003'' and ``should rise by 7% 
to 1.65 million in 2003'').
    \16\ See, e.g., Becky Yerak, Bankrupt Filings in E. Mich. 
Skyrocket; High Debt, Slow Economy Spur 22% Increase in 2002, Biggest 
Jump in the United States, The Detroit News, Feb. 24, 2003, at 1A 
(noting that ``[t]he stigma of filing for bankruptcy continues to abate 
while, at the same time, lenders impose few if any credit 
restrictions'').
---------------------------------------------------------------------------
    Second, there are significant losses asserted to be 
associated with bankruptcy filings. According to some analyses, 
the increase in consumer bankruptcy filings has adverse 
financial consequences for our nation's economy. For instance, 
it has been estimated that in 1997 alone, more than $44 billion 
of debt was discharged by debtors who filed for bankruptcy 
relief.\17\ The Committee has previously received testimony 
stating that this figure, when amortized on a daily basis, 
amounts to a loss of ``at least $110 million every day.'' \18\ 
These losses, according to one estimate, translate into a $400 
annual ``tax'' on every household in our nation.\19\ Earlier 
this year, the Nilson Report (a credit industry newsletter) 
announced that issuers of proprietary and general purpose 
credit cards ``lost $18.9 billion in 2002 from consumer 
bankruptcy filings last year,'' an increase of 15.1 percent 
over the prior year.\20\ The Credit Union National Association 
(CUNA) reported last year that credit unions have lost ``nearly 
$3 billion from bankruptcies'' since Congress began considering 
bankruptcy reform legislation in 1998.\21\
---------------------------------------------------------------------------
    \17\ Bankruptcy Reform Act of 1998 (Pt. I): Hearings on H.R. 3150 
Before the Subcomm. on Commercial and Administrative Law of the House 
Comm. on the Judiciary, 105th Cong. 147 (1998).
    \18\ Bankruptcy Reform: Joint Hearing Before the Subcomm. on 
Commercial and Administrative Law of the House Comm. on the Judiciary 
and the Subcomm. on Administrative Oversight and the Courts of the 
Senate Comm. on the Judiciary, 106th Cong. 26 (1999).
    \19\ Id.; Bankruptcy Reform Act of 1998 (Pt. I): Hearings on H.R. 
3150 Before the Subcomm. on Commercial and Administrative Law of the 
House Comm. on the Judiciary, 105th Cong. 147 (1998).
    \20\ Bankruptcy Losses on Cards, The Nilson Report, Jan. 2003, at 
1.
    \21\ John K. McKechnie, III, Letter to Editor, Credit Union J. 6 
(June 24, 2002); see William R. Mapother, Counseling Could Overturn 
Losses, Credit Union Mag. 34 (Dec. 2002) (quoting CUNA President Dan 
Mica).
---------------------------------------------------------------------------
    A third factor motivating comprehensive reform is that the 
present bankruptcy system has loopholes and incentives that 
allow and--sometimes--even encourage opportunistic personal 
filings and abuse. A civil enforcement initiative recently 
undertaken by the United States Trustee Program (a component of 
the Justice Department charged with administrative oversight of 
bankruptcy cases) has ``consistently identified'' such problems 
as ``debtor misconduct and abuse, misconduct by attorneys and 
other professionals, problems associated with bankruptcy 
petition preparers, and instances where a debtor's discharge 
should be challenged.'' \22\ According to the United States 
Trustee Program, ``Abuse of the system is more widespread than 
many would have estimated.'' \23\ Such abuse ultimately hurts 
consumers as well as creditors.
---------------------------------------------------------------------------
    \22\ Antonia G. Darling & Mark A. Redmiles, Protecting the 
Integrity of the System: the Civil Enforcement Initiative, Am. Bankr. 
Institute J. 12 (Sept. 2002).
    \23\ J. Christopher Marshall, Civil Enforcement: An Early Report, 
Journal of the Nat'l Ass'n of Bankr. Trustees (NABTalk) 39 (Fall 2002).
---------------------------------------------------------------------------
    A fourth factor relates to the fact that some bankruptcy 
debtors can repay a significant portion of their debts, 
according to several studies.\24\ Current law, however, has no 
clear mandate requiring these debtors to repay these debts. 
Accordingly, ``[w]hile there is a universal agreement among the 
courts that an individual debtor's ability to repay his or her 
debts from future earnings is, at the very least, a factor in 
determining whether substantial abuse would occur in a chapter 
7 case, there are differences among the courts as to the extent 
to which they rely on a debtor's ability to repay.'' \25\
---------------------------------------------------------------------------
    \24\ See, e.g., Bankruptcy Reform Act of 1999 (Pt. II): Hearing on 
H.R. 833 Before the Subcomm. on Commercial and Administrative Law of 
the House Comm. on the Judiciary, 106th Cong. 298 (1999) (statement of 
Thomas S. Neubig, Ernst & Young LLP--Policy Economics and Quantitative 
Analysis Group, concluding that ``large numbers of 1997 U.S. chapter 7 
filers have the ability to repay large portions of their debts''); Id. 
at 228-29 (statement of Michael E. Staten, Credit Research Center, 
concluding that ``about 25 percent of chapter 7 debtors could have 
repaid at least 30 percent of their non-housing debts over a 5-year 
repayment plan, after accounting for monthly expenses and housing 
payments'' and that ``[a]bout 5 percent of chapter 7 filers appeared 
capable of repaying all of their non-housing debt over a 5-year plan,'' 
although these ``calculations assumed income would remain unchanged 
relative to expenses over the 5 years''); Marianne B. Culhane & 
Michaela M. White, Taking the New Consumer Bankruptcy Model for a Test 
Drive: Means-Testing Real Chapter 7 Debtors, 7 Am. Bankr. L. J. 27, 31 
(1999) (concluding that 3.6% of sampled debtors ``emerged as apparent 
can-pays'').
    \25\ Robert C. Furr & Marc P. Barmat, 11 U.S.C. Section 707(b)--The 
U.S. Trustee's Weapon Against Abuse, Nat'l Ass'n Bankr. Trustees 
(NABTalk) 11, 14 (Winter 2002-03).
---------------------------------------------------------------------------
    The Committee commenced its consideration of bankruptcy 
reform early in 105th Congress. On April 16, 1997, the 
Subcommittee on Commercial and Administrative Law 
(Subcommittee) conducted a hearing on the operation of the 
bankruptcy system that was combined with a status report from 
the National Bankruptcy Review Commission.\26\ This would be 
the first of 18 hearings held on the subject of bankruptcy 
reform over the ensuing 6 years.\27\ Eleven of these hearings 
were devoted solely to consideration of H.R. 975 and its 
predecessors, H.R. 3150 (105th Congress), H.R. 833 (106th 
Congress), and H.R. 333 (107th Congress). Over the course of 
these hearings, more than 130 witnesses, representing nearly 
every major constituency in the bankruptcy community, 
testified. With regard to H.R. 833 alone, testimony was 
received from 69 witnesses, representing 23 organizations, with 
additional material submitted by other groups. In fact, the 
Subcommittee's inaugural hearing on H.R. 833 was held jointly 
with the Senate Subcommittee on Administrative Oversight and 
the Courts on March 11, 1999,\28\ which marked the first time 
in more than 60 years that a bicameral hearing was held on the 
subject of bankruptcy reform.\29\
---------------------------------------------------------------------------
    \26\ Operation of the Bankruptcy System and Status Report from the 
National Bankruptcy Review Commission: Hearing Before the Subcomm. on 
Commercial and Administrative Law of the House Comm. on the Judiciary, 
105th Cong. (1997).
    \27\ The dates and subject matters of these hearings were as 
follows:

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

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

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

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

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

March 10-11, 18-19, 1998: Hearings on H.R. 3150, the ``Bankruptcy 
Reform Act of 1998,'' H.R. 3146, the ``Consumer Lenders and Borrowers 
Bankruptcy Accountability Act of 1998,'' and H.R. 2500, the 
``Responsible Borrower Protection Bankruptcy Act.''

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

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

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

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

March 4, 2003: Hearing on H.R. 975, the ``Bankruptcy Abuse Prevention 
and Consumer Protection Act of 2003'' and the need for bankruptcy 
reform.
---------------------------------------------------------------------------
    \28\ Representatives on behalf of the Commercial Law League of 
America, CUNA, MBNA America Bank, N.A., National Retail Federation, and 
the National Consumer Law Center also testified. Some of the nation's 
leading jurists and academics presented testimony as well. Bankruptcy 
Reform: Hearing Before the Subcomm. on Commercial and Administrative 
Law of the House Comm. on the Judiciary and the Subcomm. on 
Administrative Oversight and the Courts of the Senate Comm. on the 
Judiciary, 106th Cong. (1999).
    \29\ Senators testifying at the hearing included Charles Grassley 
(R-IA), Joseph Biden (D-DE) and Christopher Dodd (D-CT). House Members 
included Jim Moran (D-VA), Pete Sessions (R-TX) and Nick Smith (R-MI). 
Id. The March 16, 1999 hearing provided an opportunity for the 
Subcommittee to hear divergent historical perspectives of consumer 
bankruptcy reform. Specific topics included an analysis of the history 
and significance of the ``fresh start'' discharge under American 
bankruptcy law, the impact of the Bankruptcy Reform Act of 1978, the 
historical underpinnings of needs-based bankruptcy relief, and how 
bankruptcy affects the rights of creditors. Another panel examined the 
need for consumer bankruptcy reform from various perspectives. 
Bankruptcy Reform Act of 1999 (Pt. I): Hearings Before the Subcomm. on 
Commercial and Administrative Law of the House Comm. on the Judiciary, 
106th Cong. (1999). At its third hearing, on March 17, 1999, the 
Subcommittee heard from many of the major organizations in the 
bankruptcy community, including the American Bankruptcy Institute, the 
American Financial Services Association, the National Association of 
Consumer Bankruptcy Attorneys, the National Bankruptcy Conference, the 
National Consumer Bankruptcy Coalition, the National Governors' 
Association, and the National Retail Federation, on the topic of 
consumer bankruptcy reform. A separate panel was devoted to judicial 
and administrative aspects of consumer bankruptcy reform. The hearing 
concluded with a statistical analysis of the needs-based reforms in 
H.R. 833. Bankruptcy Reform Act of 1999 (Pt. II): Hearings Before the 
Subcomm. on Commercial and Administrative Law of the House Comm. on the 
Judiciary, 106th Cong. (1999). The fourth and final hearing on H.R. 833 
was held on March 18, 1999. One panel focused on the treatment of 
domestic support obligations under the bill. Another panel offered 
various perspectives on business bankruptcy reform provisions in the 
bill from some of the major organizations in the bankruptcy community, 
including the AFL-CIO, American Bankers Association, American Bar 
Association/Business Bankruptcy Section, Commercial Law League of 
America, National Association of Credit Managers, and the Office of 
Chief Counsel for Advocacy at the Small Business Administration. The 
final panel examined a variety of other provisions in H.R. 833, 
including the treatment of tax claims in bankruptcy cases, 
international insolvencies, financial contracts, and chapter 12 (family 
farmer bankruptcy relief). Bankruptcy Reform Act of 1999 (Pt. III): 
Hearings Before the Subcomm. on Commercial and Administrative Law of 
the House Comm. on the Judiciary, 106th Cong. (1999).
---------------------------------------------------------------------------
    It is also important to note that bankruptcy reform 
legislation is the product of extensive negotiation and 
compromise. For example, conferees during the 106th Congress 
spent nearly 7 months engaged in what was initially an informal 
conference to reconcile differences between the House and 
Senate passed versions of bankruptcy reform legislation. In the 
107th Congress, conferees formally met on three occasions and 
ultimately agreed--after an 11-month period of negotiations--to 
a bipartisan conference report.\30\
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    \30\ H.R. Rep. No. 107-617 (2002). Signatories on behalf of the 
House included: F. James Sensenbrenner, Jr. (R-WI), Henry Hyde (R-IL), 
George Gekas (R-PA), Lamar Smith (R-TX), Steve Chabot (R-OH), Bob Barr 
(R-GA), Rick Boucher (D-VA), Michael Oxley (R-OH), Spencer Bachus (R-
AL), Billy Tauzin (R-LA), Joe Barton (R-TX), John Boehner (R-OH), and 
Michael Castle (R-DE). Signatories on behalf of the Senate included: 
Patrick Leahy (D-VT), Joe Biden (D-DE), Charles Schumer (D-NY), Orrin 
Hatch (R-UT), Chuck Grassley (R-IA), Jon Kyl (R-AZ), Mike DeWine (R-
OH), Jeff Sessions (R-AL), and Mitch McConnell (R-KY).
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              HIGHLIGHTS OF CONSUMER CREDITOR PROTECTIONS

    Means test reforms. Chapter 7 is a form of bankruptcy 
relief by which an individual debtor receives an immediate 
unconditional discharge of personal liability for certain debts 
in exchange for relinquishing his or her nonexempt assets to a 
bankruptcy trustee for liquidation and distribution to 
creditors.\31\ This ``unconditional discharge'' in chapter 7 
contrasts with the ``conditional discharge'' provisions of 
chapter 13, under which a debtor commits to repay some portion 
of his or her financial obligations in exchange for retaining 
nonexempt assets and receiving a broader discharge of debt than 
is available under chapter 7. Allowing consumer debtors in 
financial distress to choose voluntarily an ``unconditional 
discharge'' has been a part of American bankruptcy law since 
the enactment of the Bankruptcy Act of 1898.\32\
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    \31\ Under the Bankruptcy Code, only an individual may obtain a 
chapter 7 discharge. Thus, a corporation is not eligible to receive a 
discharge under chapter 7. 11 U.S.C. Sec. 727(a)(1).
    \32\ Bankruptcy Act of 1898, 30 Stat. 544 (1898) (repealed 1978). 
The rationale of an unconditional discharge was explained by Congress 
more than 100 years ago:

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

H.R. Rep. No. 55-65, at 43 (1897).
    The concept of needs-based bankruptcy relief has long been 
debated in the United States. President Herbert Hoover, for 
instance, recommended to Congress in 1932, ``The discretion of 
the courts in granting or refusing discharges should be 
broadened, and they should be authorized to postpone discharges 
for a time and require bankrupts, during the period of 
suspension, to make some satisfaction out of after-acquired 
property as a condition to the granting of a full discharge.'' 
\33\ In 1938, chapter XIII (the predecessor to chapter 13 of 
the Bankruptcy Code) was enacted as a purely voluntary form of 
bankruptcy relief that allowed a debtor to propose a plan to 
repay creditors out of future earnings.\34\
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    \33\ President's Special Message to the Congress on Reform of 
Judicial Procedure, 69 Pub. Papers 83, 90 (Feb. 29, 1932).
    \34\ Chandler Act of 1938, 52 Stat. 840 (1938).
---------------------------------------------------------------------------
    Over the ensuing years, there continued to be repeated 
expressions of support for and opposition to means-testing 
bankruptcy reform.\35\ In 1967, various organizations 
testifying before Congress in support of such reform included 
the American Bar Association, the American Bankers Association, 
the Chamber of Commerce of the United States, CUNA, the 
National Federation of Independent Businesses, and the American 
Industrial Bankers Association.\36\ The Commission on the 
Bankruptcy Laws of the United States, while supporting the 
concept that repayment plans should be ``fostered,'' 
nevertheless concluded in 1973 that ``forced participation by a 
debtor in a plan requiring contributions out of future income 
has so little prospect for success that it should not be 
adopted as a feature of the bankruptcy system.'' \37\ The 
Bankruptcy Reform Act of 1978 \38\ retained the principle that 
a debtor's decision to choose relief premised on repayment to 
creditors should be ``completely voluntary.'' \39\
---------------------------------------------------------------------------
    \35\ See, e.g., Report of the Commission on the Bankruptcy Laws of 
the United States--July 1973, H.R. Doc. No. 93 137, pt. I, at 158 
(1973) (observing that ``proposals have been made to Congress from time 
to time that a debtor able to obtain relief under chapter XIII 
[predecessor of chapter 13] should be denied relief in straight 
bankruptcy'').
    \36\ Hearings on H.R. 1057 and H.R. 5771 Before the Subcomm. No. 4 
of the House Comm. on the Judiciary, 90th Cong. (1967).
    \37\ See, e.g., Report of the Commission on the Bankruptcy Laws of 
the United States--July 1973, H.R. Doc. No. 93 137, pt. I, at 159 
(1973).
    \38\ Pub. L. No. 95-598, 92 Stat. 2549 (1978).
    \39\ H.R. Rep. No. 95-595, at 120 (1977) (observing that ``[t]he 
thirteenth amendment prohibits involuntary servitude'' and suggesting 
that ``a mandatory chapter 13, by forcing an individual to work for 
creditors, would violate this prohibition'').
---------------------------------------------------------------------------
    Although the Bankruptcy Code as originally enacted in 1978 
provided that a chapter 7 case could only be dismissed for 
``cause,'' the Code was amended in 1984 to permit the court to 
dismiss a chapter 7 case for ``substantial abuse.'' \40\ This 
provision, codified in section 707(b) of the Bankruptcy 
Code,\41\ was added ``as part of a package of consumer credit 
amendments designed to reduce perceived abuses in the use of 
chapter 7.'' \42\ It was intended to respond ``to concerns that 
some debtors who could easily pay their creditors might resort 
to chapter 7 to avoid their obligations.'' \43\ In 1986, 
section 707(b) was further amended to allow a United States 
trustee (a Department of Justice official) to move for 
dismissal.\44\
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    \40\ Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. 
L. No. 98-353, Sec. 312, 98 Stat. 333, 335 (1984).
    \41\ 11 U.S.C. Sec. 707(b).
    \42\ 6 Lawrence P. King et al., Collier on Bankruptcy 
Sec. 707.LH[2], at 707-30 (15th ed. rev. 2002).
    \43\ Id. at Sec. 707.04.
    \44\ Bankruptcy Judges, United States Trustees, and Family Farmer 
Bankruptcy Act of 1986, Pub. L. No. 99-554, Sec. 219, 100 Stat. 3088, 
3101 (1986).
---------------------------------------------------------------------------
    The utility of section 707(b) is limited for several 
reasons. Under current law, neither the court nor the United 
States trustee is required to file a motion to dismiss a 
chapter 7 case for substantial abuse under section 707(b). In 
addition, other parties in interest, such as chapter 7 trustees 
and creditors, are prohibited from filing such motions. In 
fact, section 707(b) specifies that a motion under that 
provision may not even be made ``at the request or suggestion 
of any party in interest.'' \45\ The standard for dismissal--
substantial abuse--is inherently vague, which has lead to its 
disparate interpretation and application by the bankruptcy 
bench.\46\ Some courts, for example, hold that a debtor's 
ability to repay a significant portion of his or her debts out 
of future income constitutes substantial abuse and therefore is 
cause for dismissal; \47\ others require some evidence of moral 
turpitude.\48\ A fourth reason militating against filing 
section 707(b) motions is that the Bankruptcy Code codifies a 
presumption that favors granting a debtor a discharge.\49\
---------------------------------------------------------------------------
    \45\ 11 U.S.C. Sec. 707(b).
    \46\ See, e.g., David White, Disorder in the Court: Section 707(b) 
of the Bankruptcy Code, 1995-96 Ann. Survey of Bankr. L. 333, 355 
(1996) (noting that the courts ``have taken divergent views in an 
attempt to define the term'' and have resorted to ``a variety of 
methods'' in applying it to specific cases); Robert C. Furr & Marc P. 
Barmat, 11 U.S.C. Section 707(b)--The U.S. Trustee's Weapon Against 
Abuse, Nat'l Ass'n Bankr. Trustees (NABTalk) 11, 14 (Winter 2002-03).
    \47\ See, e.g., Zolg v. Kelly (In re Kelly), 841 F.2d 908, 913-14 
(9th Cir. 1988) (observing that the ``principal factor to be considered 
in determining substantial abuse is the debtor's ability to repay debts 
for which a discharge is sought'').
    \48\ See, e.g., In re Braley, 103 B.R. 758 (Bankr. E.D. Va. 1989), 
aff'd, 110 B.R. 211 (E.D. Va. 1990). Notwithstanding the fact that the 
debtors in Braley had disposable monthly income of nearly $2,700, the 
bankruptcy court did not dismiss the case for substantial abuse. Id. at 
760. The court concluded, ``Based upon this legislative history, we are 
persuaded that no future income tests exists [sic] in 707(b) and if it 
did, as a finding of fact, the Braley family has insufficient future 
income to merit barring the door in light of the circumstances of this 
Navy family.'' Id. at 762.
    \49\ Section 707(b) of the Bankruptcy Code mandates that ``[t]here 
shall be a presumption in favor of granting the relief requested by the 
debtor.'' 11 U.S.C. Sec. 707(b).
---------------------------------------------------------------------------
    Over the course of its hearings in the last three 
Congresses, the Committee received testimony explaining that if 
means-test reforms and other measures were implemented, the 
rate of repayment to creditors would increase as more debtors 
were shifted into chapter 13 (a form of bankruptcy relief where 
the debtor commits to repay a portion or all of his debts in 
exchange for receiving a broad discharge of debt) as opposed to 
chapter 7 (a form of bankruptcy relief where the debtor 
receives an immediate discharge of personal liability on 
certain debts in exchange for turning over his or her nonexempt 
assets to the bankruptcy trustee for distribution to 
creditors).
    Means-test reforms would amend section 707(b) of the 
Bankruptcy Code to permit a court, on its own motion, or on 
motion of the United States trustee, private trustee, 
bankruptcy administrator, or other party in interest (including 
a creditor), to dismiss a chapter 7 case for abuse if it was 
filed by an individual debtor whose debts are primarily 
consumer debts. Alternatively, the chapter 7 case could be 
converted to a case under chapter 11 or chapter 13 on consent 
of the debtor.
    In addition, these reforms contemplate replacing the 
current law's presumption in favor of the debtor with a 
mandatory presumption of abuse that would arise under certain 
conditions. As amended, section 707(b) of the Bankruptcy Code 
would require a court to presume that abuse exists if the 
amount of the debtor's remaining income, after certain expenses 
and other specified amounts are deducted from the debtor's 
current monthly income (a defined term) \50\ when multiplied by 
60, exceeds the lower of the following: (1) 25 percent of the 
debtor's nonpriority unsecured claims, or $6000 (whichever is 
greater); or (2) $10,000. In addition to other specified 
expenses,\51\ the debtor's monthly expenses--exclusive of any 
payments for debts (unless otherwise permitted)--must be the 
applicable monthly amounts set forth in the Internal Revenue 
Service Financial Analysis Handbook \52\ as Necessary Expenses 
\53\ under the National \54\ and Local Standards \55\ 
categories and the debtor's actual monthly expenditures for 
items categorized as Other Necessary Expenses.\56\
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    \50\ Section 102(b) of the bill defines ``current monthly income'' 
as the average monthly income from all sources that the debtor receives 
(or, in a joint case, the debtor and the debtor's spouse receive), 
without regard to whether it is taxable income, in the 6-month period 
preceding the bankruptcy filing. It includes any amount paid on a 
regular basis by any entity (other than the debtor or, in a joint case, 
the debtor and the debtor's spouse) to the household expenses of the 
debtor or the debtor's dependents and, in a joint case, the debtor's 
spouse, if not otherwise a dependent. It excludes Social Security Act 
benefits and payments to victims of war crimes or crimes against 
humanity on account of their status as victims of such crimes. It also 
excludes payments to victims of international terrorism or domestic 
terrorism (as defined in 18 U.S.C. Sec. 2331) on account of their 
status as victims of such terrorism.
    \51\ Under section 102(a), a debtor's monthly expenses may also 
include:

 Greasonably necessary expenses incurred to maintain the safety 
of the debtor and the debtor's family from family violence as 
identified in section 309 of the Family Violence Prevention and 
---------------------------------------------------------------------------
Services Act or other applicable law;

 Gan additional 5 percent of the food and clothing expense 
allowances under the Internal Revenue Service National Standards 
expenses category, if demonstrated to be reasonable and necessary;

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

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

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

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

 Gthe actual administrative expenses (including reasonable 
attorneys' fees) of administering a chapter 13 plan for the district in 
which the debtor resides up to 10 percent of projected plan payments, 
as determined under schedules issued by the Executive Office for United 
States Trustees; and

 Gthe actual expenses for each dependent child under the age of 
18 years up to $1,500 per year per child to attend a private elementary 
or secondary school, under certain circumstances.
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    \52\ Internal Revenue Service, Internal Revenue Manual--Financial 
Analysis Handbook ch. 5.15.1 (rev. July 31, 2002).
    \53\ The Internal Revenue Manual defines the term ``necessary 
expenses'' as expenses:

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

Id. at ch. 5.15.1.3
---------------------------------------------------------------------------
    \54\ The Internal Revenue Manual's ``National Standards'' establish 
standards for five types of expenses: food, housekeeping supplies, 
apparel and services, personal care products and services, and 
miscellaneous. Except for miscellaneous expenses, these expense 
standards are derived from Bureau of Labor Statistics Consumer 
Expenditure Survey and are stratified by income and household size. Id. 
at ch. 5.15.1.3.2.1.
    \55\ ``Local Standards,'' under the Internal Revenue Manual, 
establish expense standards for housing and transportation 
expenditures. Utilities are included under the housing expense 
category. Housing standards are established for each county within a 
state. Transportation standards are determined on a regional basis. Id. 
at ch. 5.15.1.3.2.2.
    \56\ The Internal Revenue Manual does not establish monetary 
amounts with regard to necessary expenses that it characterizes as 
``Other.'' Rather, it provides a non-exclusive list of these expenses. 
The list includes expenditures for child care, dependent care for an 
elderly or disabled person, taxes, health care, court-ordered payments, 
life insurance, disability insurance for a self-employed person, union 
dues, professional association dues, charitable contributions, and 
certain education expenses. Id. at ch. 5.15.1.3.2.3.
---------------------------------------------------------------------------
    The means test permits the mandatory presumption of abuse 
to be rebutted only if: (1) the debtor demonstrates special 
circumstances justifying any additional expense or adjustment 
to the debtor's current monthly income for which there is no 
reasonable alternative; and (2) such additional expense or 
income adjustment caused the debtor's current monthly income 
(reduced by various amounts) when multiplied by 60 to be less 
than the lesser of either (i) 25 percent of the debtor's 
nonpriority unsecured claims, or $6,000 (whichever is greater), 
or (ii) $10,000.\57\ Where the mandatory presumption of abuse 
does not apply or has been rebutted, the court, in order to 
determine whether the granting of relief under chapter 7 would 
constitute an abuse, must consider: (1) whether the debtor 
filed the chapter 7 case in bad faith; or (2) whether the 
totality of circumstances of the debtor's financial situation 
(including whether the debtor seeks to reject a personal 
services contract and the financial need for such rejection) 
demonstrates abuse.
---------------------------------------------------------------------------
    \57\ The debtor must itemize and provide documentation of each 
additional expense or income adjustment as well as explain the special 
circumstances that make such expense or income adjustment reasonable 
and necessary. In addition, the debtor must attest under oath to the 
accuracy of any information provided to demonstrate that such 
additional expenses or adjustments to income are required.
---------------------------------------------------------------------------
    Should a court grant a section 707(b) motion made by a 
trustee and find that the action of debtor's counsel in filing 
the chapter 7 case violated Federal Rule of Bankruptcy 
Procedure 9011,\58\ H.R. 975 authorizes the court to order the 
attorney to reimburse the trustee for all reasonable costs in 
prosecuting the motion, including reasonable attorneys' fees. 
In addition, the court may assess an appropriate civil 
penalty.\59\
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    \58\ Fed. R. Bankr. P. 9011. This rule is the bankruptcy analog to 
Federal Rule of Civil Procedure 11, which authorizes a court to impose 
sanctions against an attorney or party who commences a frivolous action 
or files other inappropriate documents in violation of this Rule's 
requirements.
    \59\ Section 102(a) of H.R. 975 specifies that the signature of an 
attorney on a bankruptcy petition, pleading, or written motion 
constitutes a certification that the attorney has: (1) performed a 
reasonable investigation into the circumstances giving rise to such 
petition, pleading or motion; and (2) determined that the document is 
well grounded in fact and warranted by existing law or a good faith 
argument for the extension, modification, or reversal of existing law; 
and does not constitute an abuse under section 707(b)(1) of the 
Bankruptcy Code. Pursuant to section 102(a), the signature of an 
attorney on a bankruptcy petition constitutes a certification that the 
attorney has no knowledge after an inquiry that the information in the 
schedules filed with such petition is incorrect.
---------------------------------------------------------------------------
    Two types of ``safe harbors'' apply to the means test. One 
provides that only a judge, United States trustee, bankruptcy 
administrator, or private trustee may file a motion to dismiss 
a chapter 7 case under section 707(b) of the Bankruptcy Code if 
the debtor's income (or in a joint case, the income of debtor 
and the debtor's spouse) does not exceed the state median 
family income for a family of equal or lesser size (adjusted 
for larger sized families), or the state median family income 
for one earner in the case of a one-person household. The 
second safe harbor provides that no motion under section 
707(b)(2) (dismissal based on a chapter 7 debtor's ability to 
repay) may be filed by a judge, United States trustee, 
bankruptcy administrator, private trustee, or other party in 
interest if the debtor and the debtor's spouse combined have 
income that does not exceed the state median family income for 
a family of equal or lesser size (adjusted for larger sized 
families), or the state median family income for one earner in 
the case of a one-person household.\60\
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    \60\  In a case that is not a joint case, current monthly income of 
the debtor's spouse is not considered if the debtor and the debtor's 
spouse are separated under applicable nonbankruptcy law or the debtor 
and the debtor's spouse are living separate and apart (other than for 
the purpose of evading this provision) and the debtor files a statement 
under penalty of perjury containing certain specified information.
---------------------------------------------------------------------------
    Other reforms dealing with abuse. H.R. 975 contains various 
reforms tailored to remedy certain types of fraud and abuse 
within the present bankruptcy system. For example, the bill 
substantially limits a debtor's ability to file successive 
bankruptcy cases. It also addresses abusive practices by 
consumer debtors who, for example, knowingly load up with 
credit card purchases or recklessly obtain cash advances and 
then file for bankruptcy relief. In addition, H.R. 975 prevents 
the discharge of debts based on fraud, embezzlement, and 
malicious injury in a chapter 13 case. Other abuse reforms 
include a provision authorizing the court to dismiss a chapter 
7 case filed by an individual debtor convicted of a crime of 
violence or a drug trafficking crime on motion of the victim, 
under certain circumstances. And, the court, as a condition of 
confirming a chapter 13 plan, must find that the debtor filed 
the chapter 13 case in good faith.
    The bill also restricts the so-called ``mansion loophole.'' 
Under current bankruptcy law, debtors living in certain states 
can shield from their creditors virtually all of the equity in 
their homes. In light of this, some debtors actually relocate 
to these states just to take advantage of their ``mansion 
loophole'' laws. H.R. 975 closes this loophole for abuse by 
requiring a debtor to be a domiciliary in the state for at 
least 2 years before he or she can claim that state's homestead 
exemption; the current requirement can as little as 91 
days.\61\ The bill further reduces the opportunity for abuse by 
requiring a debtor to own the homestead for at least 40 months 
before he or she can use state exemption law--current law 
imposes no such requirement.\62\ H.R. 975 prevents securities 
law violators and others who have engaged in criminal conduct 
from shielding their homestead assets from those whom they have 
defrauded or injured. If a debtor was convicted of a felony, 
violated a securities law, or committed a criminal act, 
intentional tort, or engaged in reckless misconduct that caused 
serious physical injury or death, the bill overrides state 
homestead exemption law and caps the debtor's homestead 
exemption at $125,000. To the extent a debtor's homestead 
exemption was obtained through the fraudulent conversion of 
nonexempt assets (e.g., cash) during the 10-year period 
preceding the filing of the bankruptcy case, H.R. 975 requires 
such exemption to be reduced by the amount attributable to the 
debtor's fraud.
---------------------------------------------------------------------------
    \61\ See 11 U.S.C. Sec. 522(b)(2)(2)(A).
    \62\ If the debtor owns the homestead for less than 40 months, the 
provision imposes a $125,000 homestead cap. In effect, this provision 
overrides state exemption law authorizing a homestead exemption in 
excess of this amount and allows such law to control if it authorizes a 
homestead exemption in a lesser amount.
---------------------------------------------------------------------------
    Protections for creditors--in general. H.R. 975 includes 
provisions intended to provide greater protections for 
creditors, while ensuring that the claims of those creditors 
entitled to priority treatment, such as spousal and child 
support claimants, are not adversely impacted. These include 
provisions: (1) ensuring that creditors receive proper and 
timely notice of important events and proceedings in a 
bankruptcy case; (2) prohibiting abusive serial filings and 
extending the period between successive discharges; and (3) 
implementing various provisions designed to improve the 
accuracy of the information contained in debtors' schedules, 
statements of financial affairs. They also clarify that 
creditors holding consumer debts may participate without 
counsel at the section 341 meeting of creditors (which provides 
an opportunity for creditors to examine the debtor under oath).
    Protection of family support obligations. H.R. 975 accords 
domestic and child support claimants a broad spectrum of 
special protections. The legislation creates a uniform and 
expanded definition of domestic support obligations to include 
debts that accrue both before or after a bankruptcy case is 
filed. It gives the highest payment priority for these debts 
(current law only accords them a seventh-level priority),\63\ 
with allowance for the payment of trustee administrative 
expenses, under certain conditions. In addition, the bill 
mandates that a debtor must be current on postpetition domestic 
support obligations to confirm a chapter 11, chapter 12 (family 
farmer) or chapter 13 plan of reorganization. To facilitate the 
domestic support collection efforts by governmental units, the 
legislation creates various exceptions to automatic stay 
provisions of the Bankruptcy Code (which enjoin many forms of 
creditor collection activities). It also broadens the 
categories of nondischargeable family support obligations with 
the result that these debts will not be extinguished at the end 
of the bankruptcy process. The legislation, in addition, 
mandates that spousal and child support claimants as well as 
state child support agencies receive specified information and 
notices relevant to pending bankruptcy cases.
---------------------------------------------------------------------------
    \63\ 11 U.S.C. Sec. 507(a)(7).
---------------------------------------------------------------------------
    Protections for secured creditors. H.R. 975's protections 
for secured creditors include a prohibition against bifurcating 
a secured debt incurred within the 910-day period preceding the 
filing of a bankruptcy case if the debt is secured by a 
purchase money security interest in a motor vehicle acquired 
for the debtor's personal use. Where the collateral consists of 
any other type of property having value, H.R. 975 prohibits 
bifurcation of specified secured debts if incurred during the 
1-year period preceding the filing of the bankruptcy case. The 
bill clarifies current law to specify that the value of a claim 
secured by personal property is the replacement value of such 
property without deduction for the secured creditor's costs of 
sale or marketing. In addition, the bill terminates the 
automatic stay with respect to personal property if the debtor 
does not timely reaffirm the underlying obligation or redeem 
the property.\64\ H.R. 975 also specifies that a secured 
claimant retains its lien in a chapter 13 case until the 
underlying debt is paid or the debtor receives a discharge.
---------------------------------------------------------------------------
    \64\ Redemption is a method by which a chapter 7 debtor can retain 
certain types of personal property by paying the holder of a lien on 
such property the allowed amount of the holder's secured lien. 11 
U.S.C. Sec. 722.
---------------------------------------------------------------------------
    Protections for lessors. With respect to the interests of 
lessors, H.R. 975 requires chapter 13 debtors to remain current 
on their personal property leases and to provide proof of 
adequate insurance. The bill specifies that a lessor may 
condition assumption of a personal property lease on cure of 
any outstanding default and it provides that a lessor is not 
required to permit such assumption. The bill also addresses a 
problem faced by thousands of large and small residential 
landlords across the nation whose tenants file for bankruptcy 
relief solely for the purpose of staying pending eviction 
proceedings so that they can live ``rent free.''
    Consumer debtor protections. The bill's consumer 
protections include provisions strengthening the 
professionalism standards for attorneys and others who assist 
consumer debtors with their bankruptcy cases. H.R. 975 mandates 
that certain services and specified notices be given to 
consumers by professionals and others who provide bankruptcy 
assistance. To ensure compliance with these provisions, the 
bill institutes various enforcement mechanisms.
    In addition, H.R. 975 amends the Truth in Lending Act to 
require certain credit card solicitations, monthly billing 
statements, and related materials to include important 
disclosures and explanatory statements regarding introductory 
interest rates and minimum payments, among other matters. These 
additional disclosures are intended to give debtors important 
information to enable them to better manage their financial 
affairs.
    H.R. 975 contains provisions to help debtors better 
understand their rights and obligations with respect to 
reaffirmation agreements. To enforce these protections, the 
bill requires the Attorney General to designate a United States 
Attorney for each judicial district and a FBI agent for each 
field office to have primary law enforcement responsibility 
regarding abusive reaffirmation practices, among other matters.
    The legislation also expands a debtor's ability to exempt 
certain tax-qualified retirement accounts and pensions. It 
creates a new provision that allows a consumer debtor to exempt 
certain education IRA and state tuition plans for his or her 
child's postsecondary education from the claims of creditors.
    Most importantly, H.R. 975 requires debtors to participate 
in credit counseling programs before filing for bankruptcy 
relief (unless special circumstances do not permit such 
participation). The legislation's credit counseling provisions 
are intended to give consumers in financial distress an 
opportunity to learn about the consequences of bankruptcy--such 
as the potentially devastating effect it can have on their 
credit rating \65\--and guidance about how to manage their 
finances, so that they can avoid future financial difficulties.
---------------------------------------------------------------------------
    \65\ Under current law, for example, a bankruptcy filing may be 
reported on a consumer's credit report for 10 years. 15 U.S.C. 
Sec. 1681c (2002).
---------------------------------------------------------------------------
    Other debtor protections include expanded notice 
requirements for consumers. Under the bill, individuals with 
primarily consumer debts must receive notice of alternatives to 
bankruptcy relief before they file for bankruptcy and it 
requires them to be informed of other matters pertaining to the 
integrity of the bankruptcy system. The legislation also 
permits certain filing fees and related charges to be waived, 
in appropriate cases, for individuals who lack the ability to 
pay these costs.

               HIGHLIGHTS OF BUSINESS BANKRUPTCY REFORMS

    H.R. 975 contains a comprehensive set of reforms pertinent 
to business bankruptcies. They include provisions addressing 
the special problems presented by small business bankruptcies 
and single asset real estate debtors as well as provisions 
dealing with business bankruptcy cases in general. H.R. 975 
establishes a new form of bankruptcy relief for transnational 
insolvencies intended to promote international comity and 
greater certainty. It also includes provisions concerning the 
treatment of certain financial contracts under the banking laws 
as well as under the Bankruptcy Code. H.R. 975 responds to the 
special needs of family farmers by making chapter 12 of the 
Bankruptcy Code (a form of bankruptcy relief available only to 
eligible family farmers) permanent. For the first time, it also 
allows certain family fishermen to qualify for chapter 12 
relief.
    Small business/single asset real estate debtors. H.R. 975 
includes provisions with respect to small business and single 
asset real estate debtors largely derived from recommendations 
of the National Bankruptcy Review Commission.\66\
---------------------------------------------------------------------------
    \66\ See generally Report of the National Bankruptcy Review 
Commission, at 303-706 (Oct. 20, 1997).
---------------------------------------------------------------------------
    Most chapter 11 cases are filed by small business debtors. 
Although the Bankruptcy Code envisions that creditors should 
play a major role in the oversight of chapter 11 cases, this 
often does not occur with respect to small business debtors. 
The main reason is that creditors in these smaller cases do not 
have claims large enough to warrant the time and money to 
participate actively in these cases. The resulting lack of 
creditor oversight creates a greater need for the United States 
trustee to monitor these cases closely. Nevertheless, the 
monitoring of these debtors by United States trustees varies 
throughout the nation. H.R. 975 addresses the special problems 
presented by small business cases by instituting a variety of 
time frames and enforcement mechanisms designed to weed out 
small business debtors who are not likely to reorganize. It 
also requires these cases to be more actively monitored by 
United States trustees and the bankruptcy courts.
    With regard to the Bankruptcy Code's treatment of single 
asset real estate debtors, H.R. 975 makes several amendments. 
First, it eliminates the monetary cap from the single asset 
real estate debtor definition. Second, it makes these debtors 
subject to the bill's small business reforms. Third, H.R. 975 
amends the automatic stay provisions by permitting a single 
asset real estate debtor to make requisite interest payments 
out of rents or other proceeds generated by the real property.
    Financial contracts. H.R. 975 contains a series of 
provisions pertaining to the treatment of certain financial 
transactions under the Bankruptcy Code and relevant banking 
laws.\67\ These provisions are intended to reduce ``systemic 
risk'' in the banking system and financial marketplace.\68\ To 
minimize the risk of disruption when parties to these 
transactions become bankrupt or insolvent, the bill amends 
provisions of the banking and investment laws, as well as the 
Bankruptcy Code, to allow the expeditious termination or 
netting of certain types of financial transactions. Many of 
these provisions are derived from recommendations issued by the 
President's Working Group on Financial Markets \69\ and 
revisions espoused by the financial industry.
---------------------------------------------------------------------------
    \67\ In addition to the Bankruptcy Code, the bill amends the 
Federal Deposit Insurance Act, the Financial Institutions Reform, 
Recovery and Enforcement Act of 1989, the Federal Deposit Insurance 
Corporation Improvement Act of 1991, the Federal Reserve Act, and the 
Securities Investor Protection Act of 1971.
    \68\ The report on H.R. 4393, a bill substantially similar to title 
IX of H.R. 975 that was introduced in the 105th Congress, explained as 
follows:

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

H. Rep. No. 105-688, pt. 1, at 2 (1998).
---------------------------------------------------------------------------
    \69\ The Working Group's members included representatives from the 
Commodity Futures Trading Commission, the Federal Deposit Insurance 
Corporation, the Board of Governors of the Federal Reserve System, the 
Federal Reserve Bank of New York, the Securities and Exchange 
Commission, and the Department of the Treasury, including the Office of 
the Comptroller of the Currency. Id. at 1.
---------------------------------------------------------------------------
    Family farmers. H.R. 975 helps small family farmers facing 
financial distress. While current bankruptcy law has a 
specialized form of bankruptcy relief--chapter 12--that is 
specifically designed for family farmers, its benefits for 
farmers are limited because of its restrictive eligibility 
requirements. H.R. 975 responds to this problem in several key 
respects: it more than doubles the debt eligibility limit and 
requires it to be periodically adjusted for inflation; it 
lowers the requisite percentage of a farmer's income that must 
be derived from farming operations; and it gives farmers more 
flexibility with respect to how certain creditors can be 
repaid. As a result, many more deserving family farmers facing 
financial hard times will be able to avail themselves of 
chapter 12. In addition, H.R. 975 makes chapter 12 a permanent 
component of the bankruptcy laws and extends the benefits of 
this form of bankruptcy relief to family fishermen.
    Transnational insolvencies. In response to the increasing 
globalization of business enterprises and operations, H.R. 975 
establishes a separate chapter under the Bankruptcy Code 
devoted to transnational insolvencies. These provisions are 
intended to provide greater legal certainty for trade and 
investment as well as to provide for the fair and efficient 
administration of these cases. They reflect consensus 
recommendations of the National Bankruptcy Review 
Commission.\70\
---------------------------------------------------------------------------
    \70\ Report of the National Bankruptcy Review Commission, at 351-70 
(Oct. 20, 1997).
---------------------------------------------------------------------------
    Protections for small business owners. Under current 
bankruptcy law, a business can be sued by a bankruptcy trustee 
and forced to pay back--as a preferential transfer--monies 
previously paid to it by a firm that later files for bankruptcy 
protection. H.R. 975 contains provisions making it easier--
particularly for small businesses--to defend against these 
suits. These provisions largely reflect recommendations of the 
National Bankruptcy Review Commission.\71\
---------------------------------------------------------------------------
    \71\ Id. at 793-803.
---------------------------------------------------------------------------
    Health care providers. H.R. 975 adds a provision to the 
Bankruptcy Code intended to give patients of bankrupt health 
care providers various protections. These include provisions 
specifying requirements for the disposal of patient records so 
that a patient's privacy and the confidentiality of such 
records when they are in the custody of a health care business 
in bankruptcy are protected. In addition, the bill includes a 
provision according administrative expense priority to the 
actual, necessary costs and expenses of closing a health care 
business (including the disposal of patient records or 
transferral of patients) incurred by a trustee, Federal agency, 
or a department or state agency. If warranted, it also 
authorizes the court to order the appointment of an ombudsman 
to monitor the quality of patient care and to represent the 
interests of the patients. Other provisions include the 
requirement that a bankruptcy trustee use all reasonable and 
best efforts to transfer patients from a health care business 
that is being closed to an appropriate alternative facility 
that meets certain specified criteria.

                 OTHER PROVISIONS HAVING GENERAL IMPACT

    Privacy protections. Under current law, nearly every item 
of information supplied by a debtor in connection with his or 
her bankruptcy case is made available to the public. H.R. 975 
prohibits the disclosure of the names of the debtor's minor 
children and requires such information to be kept in a 
nonpublic record, which can be made available for inspection 
only by the court and certain other designated entities. In 
addition, H.R. 975 prohibits the sale of customers' personally 
identifiable information by a business debtor unless certain 
conditions are satisfied.
    Protections for employees. H.R. 975 requires certain back 
pay awards granted as a result of a debtor's violation of 
Federal or state law to receive one of the highest payment 
priorities in a bankruptcy case. In addition, the bill 
streamlines the appointment of an ERISA administrator for an 
employee benefit plan, under certain circumstances, to minimize 
the disruption that results when an employer files for 
bankruptcy relief.
    Additional bankruptcy judgeships. H.R. 975 authorizes 28 
additional bankruptcy judgeships on a temporary basis and 
extends three currently existing temporary judgeships.\72\ This 
provision responds to the 59 percent increase in the caseload 
of bankruptcy judges since 1992, reported by the Administrative 
Office of the United States Courts.\73\
---------------------------------------------------------------------------
    \72\ Districts authorized additional bankruptcy judgeships under 
H.R. 975 include the following: Eastern District of California (one), 
Central District of California (three), Delaware (four), Southern 
District of Florida (two), Southern District of Georgia (one), Maryland 
(three), Eastern District of Michigan (one), Southern District of 
Mississippi (one), New Jersey (one), Nevada (one), Eastern District of 
New York (one), Northern District of New York (one), Southern District 
of New York (one), Eastern District of North Carolina (one), Eastern 
District of Pennsylvania (one), Middle District of Pennsylvania (one), 
Puerto Rico (one), South Carolina (one), Western District of Tennessee 
(one), Eastern District of Virginia (one).
    \73\ Press Release, Administrative Office of the U.S. Courts, 
Record Breaking Bankruptcy Filings Reported in Calendar Year 2002 (Feb. 
14, 2003) (noting that ``no new bankruptcy judgeships have been created 
since 1992'').
---------------------------------------------------------------------------
    Miscellaneous provisions. Under current law, appeals from 
bankruptcy court decisions must be filed in and determined by 
Federal district courts or bankruptcy appellate panels before 
such appeals may be heard by a Federal court of appeals. H.R. 
975 authorizes direct appeals from bankruptcy court decisions 
to the court of appeals, under certain circumstances. The bill 
requires the United States Trustee Program to compile various 
statistics regarding chapter 7, 11 and 13 cases and to make 
these data available to the public. Other general provisions 
include allowing attorneys to share compensation with bona fide 
public service attorney referral programs, and mandating that a 
bankruptcy court conduct scheduling conferences in a bankruptcy 
case if necessary to further its expeditious and economical 
resolution.

                                Hearings

    The Committee's Subcommittee on Commercial and 
Administrative Law held 1 day of hearings on H.R. 975, the 
``Bankruptcy Abuse Prevention and Consumer Protection Act of 
2003,'' on March 4, 2003. The hearing provided an opportunity 
to review the reasons why the current bankruptcy system needs 
reform and how H.R. 975 would implement those reforms.
    Testimony was received from four witnesses, representing 
three organizations and the United States Department of 
Justice, with additional material submitted by 44 individuals 
and organizations. Witnesses at the hearing included a 
representative from the Executive Office for United States 
Trustees (a component of the United States Department of 
Justice charged with administrative oversight of bankruptcy 
cases), a credit union representative, a representative on 
behalf of the Coalition for Responsible Bankruptcy Laws (a 
coalition of consumer creditors that includes banks, credit 
unions, retailers, savings institutions, mortgage and sales 
finance companies, and diversified financial service 
providers), and a representative in behalf of the Commercial 
Law League of America (a creditors' rights organization 
comprised of attorneys and other professionals engaged in the 
fields of bankruptcy, insolvency, reorganization, and 
commercial law).
    Among the matters considered at the hearing were the 
following: (1) the adequacy of the current bankruptcy system 
with respect to the detection of fraud and abuse; (2) how abuse 
and fraud in the current bankruptcy system impact on American 
businesses and our nation's citizens generally; (3) whether 
proposed legislative reforms would assist those who are charged 
with administrative oversight of bankruptcy cases and law 
enforcement matters; and (4) whether, given current economic 
circumstances, the need for comprehensive bankruptcy reform 
still exists.

                        Committee Consideration

    On March 12, 2003, the Committee met in open session and 
ordered favorably reported the bill, H.R. 975, the ``Bankruptcy 
Abuse Prevention and Consumer Protection Act of 2003,'' with an 
amendment by a recorded vote of 18 to11, with one Member voting 
present, a quorum being present.

                         Vote of the Committee

    1. An amendment by Mr. Watt deleting provisions of section 
311 of the bill that except from the Bankruptcy Code's 
automatic stay certain eviction actions and related proceedings 
against a debtor who is a tenant residing in residential 
property under a lease or rental agreement. Defeated 5 to 15.

                                                   ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................
Mr. Chabot......................................................
Mr. Jenkins.....................................................                              X
Mr. Cannon......................................................                              X
Mr. Bachus......................................................                              X
Mr. Hostettler..................................................                              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................                              X
Mr. Flake.......................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Carter......................................................                              X
Mr. Feeney......................................................                              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................
Mr. Berman......................................................
Mr. Boucher.....................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................
Mr. Meehan......................................................              X
Mr. Delahunt....................................................              X
Mr. Wexler......................................................
Ms. Baldwin.....................................................
Mr. Weiner......................................................
Mr. Schiff......................................................
Ms. Sanchez.....................................................
Mr. Sensenbrenner, Chairman.....................................                              X
                                                                 -----------------------------------------------
    Total.......................................................              5              15
----------------------------------------------------------------------------------------------------------------

    2. An amendment by Mr. Bachus striking section 414 of the 
bill, which eliminates the disinterestedness requirement for 
investment bankers retained by a trustee in a bankruptcy case. 
Defeated 12 to 17.

                                                   ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................
Mr. Chabot......................................................                              X
Mr. Jenkins.....................................................              X
Mr. Cannon......................................................                              X
Mr. Bachus......................................................              X
Mr. Hostettler..................................................              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................                              X
Mr. Flake.......................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Carter......................................................                              X
Mr. Feeney......................................................                              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................
Mr. Berman......................................................              X
Mr. Boucher.....................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Meehan......................................................              X
Mr. Delahunt....................................................              X
Mr. Wexler......................................................              X
Ms. Baldwin.....................................................
Mr. Weiner......................................................                              X
Mr. Schiff......................................................
Ms. Sanchez.....................................................
Mr. Sensenbrenner, Chairman.....................................                              X
                                                                 -----------------------------------------------
    Total.......................................................             12              17
----------------------------------------------------------------------------------------------------------------

    3. An amendment offered by Mr. Delahunt disallowing as an 
administrative expense: (1) certain transfers made to or 
obligations incurred for the benefit of an insider of the 
debtor; (2) certain severance payments to a debtor's insider; 
and (3) other transfers or obligations that are outside the 
ordinary course of business and not justified by the facts and 
circumstances of the case. Defeated 7 to 18.

                                                   ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................
Mr. Chabot......................................................                              X
Mr. Jenkins.....................................................                              X
Mr. Cannon......................................................                              X
Mr. Bachus......................................................
Mr. Hostettler..................................................                              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................                              X
Mr. Flake.......................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Carter......................................................                              X
Mr. Feeney......................................................                              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................
Mr. Berman......................................................              X
Mr. Boucher.....................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................
Mr. Meehan......................................................              X
Mr. Delahunt....................................................              X
Mr. Wexler......................................................
Ms. Baldwin.....................................................
Mr. Weiner......................................................              X
Mr. Schiff......................................................
Ms. Sanchez.....................................................
Mr. Sensenbrenner, Chairman.....................................                              X
                                                                 -----------------------------------------------
    Total.......................................................              7              18
----------------------------------------------------------------------------------------------------------------

    4. An amendment offered by Mr. Delahunt modifying section 
322 of the bill to limit a debtor's homestead exemption to 
$125,000. Defeated 7 to 19.

                                                   ROLLCALL NO. 4
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................
Mr. Chabot......................................................                              X
Mr. Jenkins.....................................................                              X
Mr. Cannon......................................................                              X
Mr. Bachus......................................................
Mr. Hostettler..................................................                              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................                              X
Mr. Flake.......................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Carter......................................................                              X
Mr. Feeney......................................................                              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................
Mr. Berman......................................................
Mr. Boucher.....................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................                              X
Ms. Waters......................................................              X
Mr. Meehan......................................................              X
Mr. Delahunt....................................................              X
Mr. Wexler......................................................
Ms. Baldwin.....................................................
Mr. Weiner......................................................
Mr. Schiff......................................................              X
Ms. Sanchez.....................................................
Mr. Sensenbrenner, Chairman.....................................                              X
                                                                 -----------------------------------------------
    Total.......................................................              7              19
----------------------------------------------------------------------------------------------------------------

    5. An amendment offered by Ms. Lofgren reducing the 
reachback periods for which the anti-cramdown provisions in 
section 306(b) of the bill would apply. Defeated 6 to 15.

                                                   ROLLCALL NO. 5
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Chabot......................................................                              X
Mr. Jenkins.....................................................                              X
Mr. Cannon......................................................                              X
Mr. Bachus......................................................
Mr. Hostettler..................................................                              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................                              X
Mr. Flake.......................................................
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................
Mr. Carter......................................................
Mr. Feeney......................................................                              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................
Mr. Berman......................................................
Mr. Boucher.....................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................
Mr. Meehan......................................................              X
Mr. Delahunt....................................................
Mr. Wexler......................................................
Ms. Baldwin.....................................................
Mr. Weiner......................................................
Mr. Schiff......................................................              X
Ms. Sanchez.....................................................              X
Mr. Sensenbrenner, Chairman.....................................                              X
                                                                 -----------------------------------------------
    Total.......................................................              6              15
----------------------------------------------------------------------------------------------------------------

    6. An amendment by Ms. Lofgren expanding the safe harbor in 
section 102 of the bill (concerning motions to dismiss chapter 
7 cases based on the debtors' ability to repay debts) to 
situations where the debtor or a debtor's spouse meet certain 
criteria. Defeated 8 to 16.

                                                   ROLLCALL NO. 6
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Chabot......................................................                              X
Mr. Jenkins.....................................................                              X
Mr. Cannon......................................................                              X
Mr. Bachus......................................................
Mr. Hostettler..................................................                              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................                              X
Mr. Flake.......................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................
Mr. Carter......................................................
Mr. Feeney......................................................                              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................              X
Mr. Berman......................................................
Mr. Boucher.....................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Meehan......................................................
Mr. Delahunt....................................................
Mr. Wexler......................................................
Ms. Baldwin.....................................................
Mr. Weiner......................................................
Mr. Schiff......................................................              X
Ms. Sanchez.....................................................              X
Mr. Sensenbrenner, Chairman.....................................                              X
                                                                 -----------------------------------------------
    Total.......................................................              8              16
----------------------------------------------------------------------------------------------------------------

    7. An amendment offered by Mr. Nadler making certain debts 
arising from the violation of section 244 (relating to 
discrimination against a person wearing the uniform of the 
Armed Forces), section 245 (relating to federally protected 
rights), section 247 (relating to damage to religious property 
and obstruction of persons in the free exercise of religious 
belief), and section 248 (relating to the freedom of access to 
clinic entrances) of title 18 of the United States Code, among 
other specified debts, nondischargeable. Defeated 8 to 19.

                                                   ROLLCALL NO. 7
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Chabot......................................................                              X
Mr. Jenkins.....................................................                              X
Mr. Cannon......................................................                              X
Mr. Bachus......................................................                              X
Mr. Hostettler..................................................                              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................                              X
Mr. Flake.......................................................                              X
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Carter......................................................                              X
Mr. Feeney......................................................                              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................              X
Mr. Berman......................................................
Mr. Boucher.....................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................              X
Mr. Meehan......................................................              X
Mr. Delahunt....................................................
Mr. Wexler......................................................
Ms. Baldwin.....................................................
Mr. Weiner......................................................
Mr. Schiff......................................................              X
Ms. Sanchez.....................................................              X
Mr. Sensenbrenner, Chairman.....................................                              X
                                                                 -----------------------------------------------
    Total.......................................................              8              19
----------------------------------------------------------------------------------------------------------------

    8. An amendment offered by Mr. Nadler modifying section 203 
of the bill to strike the provision's credit union exception to 
the undue hardship presumption that applies to certain 
reaffirmation agreements. Defeated 8 to 18.

                                                   ROLLCALL NO. 8
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Chabot......................................................                              X
Mr. Jenkins.....................................................                              X
Mr. Cannon......................................................                              X
Mr. Bachus......................................................                              X
Mr. Hostettler..................................................                              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................                              X
Mr. Flake.......................................................
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Carter......................................................                              X
Mr. Feeney......................................................                              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................              X
Mr. Berman......................................................
Mr. Boucher.....................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................              X
Mr. Meehan......................................................              X
Mr. Delahunt....................................................              X
Mr. Wexler......................................................
Ms. Baldwin.....................................................
Mr. Weiner......................................................
Mr. Schiff......................................................
Ms. Sanchez.....................................................              X
Mr. Sensenbrenner, Chairman.....................................                              X
                                                                 -----------------------------------------------
    Total.......................................................              8              18
----------------------------------------------------------------------------------------------------------------

    9. An amendment offered by Mr. Nadler modifying section 102 
of the bill to eliminate its exception for small businesses 
with respect to the provision's authorization for a court to 
require a party to pay reasonable costs to a debtor for certain 
motions filed under Bankruptcy Code section 707(b) (as amended 
by the bill) that violate Federal Rule of Bankruptcy Procedure 
9011 or are made solely for the purpose of coercing a debtor 
into waiving a right guaranteed to the debtor under the 
Bankruptcy Code. Defeated 10 to 18.

                                                   ROLLCALL NO. 9
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................                              X
Mr. Smith.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Chabot......................................................                              X
Mr. Jenkins.....................................................                              X
Mr. Cannon......................................................                              X
Mr. Bachus......................................................                              X
Mr. Hostettler..................................................                              X
Mr. Green.......................................................                              X
Mr. Keller......................................................                              X
Ms. Hart........................................................                              X
Mr. Flake.......................................................
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Carter......................................................                              X
Mr. Feeney......................................................                              X
Mrs. Blackburn..................................................                              X
Mr. Conyers.....................................................              X
Mr. Berman......................................................              X
Mr. Boucher.....................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................
Mr. Meehan......................................................              X
Mr. Delahunt....................................................              X
Mr. Wexler......................................................              X
Ms. Baldwin.....................................................
Mr. Weiner......................................................              X
Mr. Schiff......................................................
Ms. Sanchez.....................................................              X
Mr. Sensenbrenner, Chairman.....................................                              X
                                                                 -----------------------------------------------
    Total.......................................................             10              18
----------------------------------------------------------------------------------------------------------------

    10. Motion to report favorably H.R. 975, as amended. Passed 
18 to 11, with one present.

                                                   ROLLCALL NO. 10
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Hyde........................................................
Mr. Coble.......................................................              X
Mr. Smith.......................................................              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................              X
Mr. Chabot......................................................              X
Mr. Jenkins.....................................................              X
Mr. Cannon......................................................              X
Mr. Bachus......................................................              X
Mr. Hostettler..................................................              X
Mr. Green.......................................................              X
Mr. Keller......................................................              X
Ms. Hart........................................................              X
Mr. Flake.......................................................
Mr. Pence.......................................................              X
Mr. Forbes......................................................              X
Mr. King........................................................              X
Mr. Carter......................................................              X
Mr. Feeney......................................................              X
Mrs. Blackburn..................................................              X
Mr. Conyers.....................................................                              X
Mr. Berman......................................................                              X
Mr. Boucher.....................................................
Mr. Nadler......................................................                              X
Mr. Scott.......................................................
Mr. Watt........................................................                              X
Ms. Lofgren.....................................................                              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................                              X
Mr. Meehan......................................................                              X
Mr. Delahunt....................................................                              X
Mr. Wexler......................................................                              X
Ms. Baldwin.....................................................
Mr. Weiner......................................................                              X
Mr. Schiff......................................................                                              X
Ms. Sanchez.....................................................                              X
Mr. Sensenbrenner, Chairman.....................................              X
                                                                 -----------------------------------------------
    Total.......................................................             18              11               1
----------------------------------------------------------------------------------------------------------------

                      Committee Oversight Findings

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

                    Performance Goals and Objectives

    The bill is intended to improve the bankruptcy system by 
deterring abuse, setting enhanced standards for bankruptcy 
professionals, and streamlining case administration. It 
authorizes the appointment of 28 temporary bankruptcy 
judgeships to address the 59 percent increase in the caseload 
of bankruptcy judges since 1992, when additional bankruptcy 
judgeships were last authorized.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House Rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 975, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                                    March 18, 2003.
Hon. F. James Sensenbrenner, Jr.,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 975, the 
Bankruptcy Abuse Prevention and Consumer Protection Act of 
2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark 
Grabowicz (for federal spending), Annabelle Bartsch (for 
federal revenues), Victoria Heid Hall (for the state and local 
impact), and Paige Piper/Bach (for the private-sector impact).
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 975--Bankruptcy Abuse Prevention and Consumer Protection Act of 
        2003

    Summary: CBO estimates that implementing H.R. 975 would 
increase discretionary costs primarily to the United States 
Trustees (U.S. Trustees) by $280 million over the 2003-2008 
period. At the same time, the bill would slightly increase the 
fees charged for filing a bankruptcy case and would change how 
some of these fees are currently recorded in the budget. We 
estimate that implementing the bill would increase the amount 
of bankruptcy fees that are treated as an offset to 
appropriations by $282 million over the five-year period, 
resulting in a net decrease in discretionary spending of $2 
million over this period.
    In addition, CBO estimates that enacting this bill would 
decrease governmental receipts (revenues) by $263 million over 
the 2003-2008 period because bankruptcy fees that are currently 
recorded as revenues would be reclassified as offsetting 
collections and offsetting receipts. Finally, enactment of H.R. 
975 would result in filling additional judgeships, and we 
estimate that their mandatory pay and benefits would cost $23 
million over the next five years. Assuming appropriation of the 
necessary amounts to implement the bill, CBO estimates that its 
enactment would increase budget deficits by $284 million over 
the 2003-2008 period.
    H.R. 975 contains two intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA), but CBO estimates 
the costs would be insignificant and would not exceed the 
threshold established in that act ($59 million in 2003, 
adjusted annually for inflation). Overall, CBO expects that 
enacting this bill would benefit state and local governments by 
enhancing their ability to collect outstanding obligations in 
bankruptcy cases.
    H.R. 975 would impose private-sector mandates as defined by 
UMRA on bankruptcy attorneys, creditors, bankruptcy petition 
preparers, debt-relief agencies, and credit and charge-card 
companies. CBO estimates that the direct costs of these 
mandates would exceed the annual threshold established by UMRA 
($117 million in 2003, adjusted annually for inflation).
    Major Provisions: In addition to establishing means-testing 
for determining eligibility for chapter 7 bankruptcy relief, 
H.R. 975 would:
           Require the Executive Office for the U.S. 
        Trustees to establish a test program to educate debtors 
        on financial management;
           Authorize 28 new temporary judgeships and 
        extend four existing judgeships in 22 federal 
        districts;
           Permit courts to waive chapter 7 filing fees 
        and other fees for debtors who could not pay such fees 
        in installments;
           Require that at least one of every 250 
        bankruptcy cases under chapter 13 or chapter 7 be 
        audited by an independent certified public accountant;
           Require the Administrative Office of the 
        United States Courts (AOUSC) to receive and maintain 
        tax returns for certain chapter 7 and chapter 13 
        debtors;
           Require the AOUSC and the U.S. Trustees to 
        collect and publish certain statistics on bankruptcy 
        cases; and
           Increase chapter 7 and chapter 13 bankruptcy 
        filing fees and change the budgetary treatment of such 
        fees.
    Other provisions would make various changes affecting the 
bankruptcy provisions for municipalities and the treatment of 
tax liabilities in bankruptcy cases.
    Estimated Cost to the Federal Government: As shown in the 
following table, CBO estimates that implementing H.R. 975 would 
result in a net decrease in discretionary spending of $2 
million over the 2003-2008 period, subject to appropriation 
actions. In addition, we estimate that mandatory spending for 
the salaries and benefits of bankruptcy judges would increase 
by less than $500,000 in 2003 and by $23 million over the 2003-
2008 period. Enacting the bill's provisions for adjusting 
filing fees would reduce revenues by $263 million over the next 
five years. That change in revenues would be more than offset, 
however, by increased collections to be credited against 
discretionary spending if future appropriation actions are 
consistent with the bill. (The estimated net decrease in 
discretionary spending of $2 million reflects an increase in 
spending totaling $280 million over the next five years, offset 
by collections of $282 million over those five years.) The 
costs of this legislation fall within budget function 750 
(administration of justice).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2003     2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Means-Testing (Section 102):
    Estimated Authorization Level.........................        0       12       11       11       11       10
    Estimated Outlays.....................................        0       10       11       11       11       10
GAO, SBA, and U.S. Trustees Studies (Sections 103, 230,
 and 443):
    Estimated Authorization Level.........................        0        1        a        0        0        0
    Estimated Outlays.....................................        0        1        a        0        0        0
Debtor Financial Management Training (Section 105):
    Estimated Authorization Level.........................        0        3        1        0        0        0
    Estimated Outlays.....................................        0        2        1        a        0        0
Credit Counseling Certification (Section 106):
    Estimated Authorization Level.........................        0        4        3        3        4        4
    Estimated Outlays.....................................        0        3        3        3        4        4
Maintenance of Tax Returns (Section 315):
    Estimated Authorization Level.........................        0        1        2        2        2        2
    Estimated Outlays.....................................        0        1        2        2        2        2
Changes in Bankruptcy Filing Fees (Sections 325 and 418):
    Estimated Authorization Level.........................        0      -52      -60      -60      -55      -55
    Estimated Outlays.....................................        0      -52      -60      -60      -55      -55
U.S. Trustee Site Visits (Section 439):
    Estimated Authorization Level.........................        0        3        2        2        2        3
    Estimated Outlays.....................................        0        2        2        2        2        3
Compiling and Publishing Data (Sections 601-602):
    Estimated Authorization Level.........................        0        0        9        9        8        8
    Estimated Outlays.....................................        0        0        9        9        8        8
Audit Procedures (Section 603):
    Estimated Authorization Level.........................        0        0       15       18       19       20
    Estimated Outlays.....................................        0        0       15       18       19       20
Additional Judgeships--Support Costs (Section 1223):
    Estimated Authorization Level.........................        a        9       16       17       18       17
    Estimated Outlays.....................................        a        9       16       17       18       17
FTC Toll-Free Hotline (Section 1301):
    Estimated Authorization Level.........................        0        2        1        1        1        1
    Estimated Outlays.....................................        0        2        1        1        1        1
Total Discretionary Changes:
    Estimated Budget Authority............................    (\1\)      -17        0        2        9       10
    Estimated Outlays.....................................    (\1\)      -22       -1        2        9       10

                                           CHANGES IN DIRECT SPENDING

Additional Judgeships (Section 1223):
    Estimated Budget Authority............................        a        3        5        5        5        5
    Estimated Outlays.....................................        a        3        5        5        5        5
                                               CHANGES IN REVENUES

Changes in Revenue from Filing Fees: Estimated Revenues...        0      -47      -54      -54      -54      -54
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.

Note:--GAO = General Accounting Office; SBA = Small Business Administration; and FTC = Federal Trade Commission.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
975 will be enacted by July 2003 and that the amounts necessary 
to implement the bill will be appropriated for each fiscal 
year.

Spending Subject to Appropriation

    Most of the estimated increases in discretionary spending 
would be required to fund the additional workload that would be 
imposed on the U.S. Trustees. Those increases would be more 
than offset by changes in bankruptcy filing fees that would be 
recorded as offsetting collections under the bill. CBO 
estimates that implementing H.R. 975 would result in a net 
reduction in discretionary costs of $2 million over the 2003-
2008 period.
    Means-Testing (Section 102). This section would establish a 
system of means-testing for determining a debtor's eligibility 
for relief under chapter 7. Under the means test, if the amount 
of debtor income remaining after certain expenses and other 
specified amounts are deducted from the debtor's current 
monthly income exceeds the threshold specified in section 102, 
then the debtor would be presumed ineligible for chapter 7 
relief. A debtor who could not demonstrate ``special 
circumstances,'' which would cause the expected disposable 
income to fall below the threshold, could file under other 
chapters of the bankruptcy code.
    Although the private trustees would be responsible for 
conducting the initial review of a debtor's income and expenses 
and filing the majority of motions for dismissal or conversion, 
CBO expects that the workload of the U.S. Trustees would 
increase under the means-testing provision. The U. S. Trustees 
would provide increased oversight of the work performed by the 
private trustees, file additional motions for dismissal or 
conversion, and take part in additional litigation that is 
expected to occur as the courts and debtors debate allowable 
expenses and other related issues. Although CBO cannot predict 
the amount of such litigation, we expect that, during the first 
few years following enactment of the bill, the amount of 
litigation could be significant as parties test the new law's 
standards. In subsequent years, litigation could begin to 
subside as precedents are established. Based on information 
from the U.S. Trustees, CBO estimates that the U.S. Trustees 
would require 115 additional attorneys, paralegals, and 
analysts to address the increased workload. As a result, CBO 
estimates that implementing this provision would cost $53 
million over the next five years.
    General Accounting Office (GAO), Small Business 
Administration (SBA), and U.S. Trustees Studies (Sections 103, 
205, 230, and 443). Section 103 would require the U.S. Trustees 
to conduct a study regarding the use of Internal Revenue 
Service expense standards for determining a debtor's current 
monthly expenses and the impact of those standards on debtors 
and bankruptcy courts. Section 230 would require GAO to conduct 
a study regarding the feasibility of requiring trustees to 
provide the Office of Child Support Enforcement information 
about outstanding child support obligations of debtors. Section 
205 would require GAO to conduct a study on the treatment of 
consumers by creditors with respect to reaffirmation 
agreements. Section 443 would require the Administrator of SBA, 
in consultation with the Attorney General, the U.S. Trustees, 
and the AOUSC, to conduct a study on small business bankruptcy 
issues. Based on information from U.S. Trustees, GAO, and SBA, 
CBO estimates that completing the necessary studies would cost 
about $1 million in 2004 and less than $500,000 in 2005.
    Debtor Financial Management Test Training Program (Section 
105). This section would require the U.S. Trustees to establish 
a test training program to educate debtors on financial 
management. The test training program would be authorized for 
six judicial districts over an 18-month period. Based on 
information from the U.S. Trustees, CBO estimates that about 
90,000 debtors would participate if such a program were 
administered by the U.S. Trustees in fiscal years 2004 and 
2005. At a projected cost of about $40 per debtor, CBO 
estimates that implementing this provision would cost about $4 
million over the 2004-2005 period.
    Credit Counseling Certification (Section 106). This section 
would require the U.S. Trustees to certify, on an annual basis, 
that certain credit counseling services could provide adequate 
services to potential debtors. Based on information from the 
U.S. Trustees, CBO estimates that the U.S. Trustees would 
require additional attorneys and analysts to handle the greater 
workload associated with certification. CBO estimates that 
implementing this provision would cost $20 million over the 
next five years.
    Maintenance of Tax Returns (Section 315). This section 
would authorize the AOUSC to receive and retain debtors' tax 
returns for the year prior to the commencement of the 
bankruptcy for chapter 7 and chapter 13 filings. Such 
collection and storage of tax returns would commence only at 
the request of a creditor. Based on information from the AOUSC, 
CBO expects that creditors will request tax information in 
about 25 percent of such cases. CBO estimates that implementing 
section 315 would cost $9 million over the next five years to 
store and provide access to over two million tax returns.
    Changes in Bankruptcy Filing Fees (Sections 325 and 418). 
Section 325 would increase chapter 7 and chapter 13 bankruptcy 
filing fees and change the distribution of such fees. In 
addition, the bill would allow the U.S. Trustee System Fund to 
collect 75 percent of chapter 11 filing fees. Under current 
law, the filing fee for chapter 7 and chapter 13 is $155 and is 
divided between the U.S. Trustee System Fund, the AOUSC, the 
private trustee assigned to the case, and the remainder is 
recorded as a governmental receipt (i.e., revenue). Under H.R. 
975, the filing fee for a chapter 7 case would be $160, and 
income from this fee would be recorded in two different places 
in the budget. Of the $160, $65 would be recorded as an 
offsetting collection to the appropriation for the U.S. Trustee 
System Fund, and $50 would be recorded as an offsetting receipt 
and spent without further appropriation by the AOUSC. The 
remainder of this fee would be spent by the private trustees 
assigned to each case. The bill would reduce the filing fee for 
a chapter 13 case to $150 and change how the fee is recorded in 
the budget. The U.S. Trustee System Fund would receive $105 and 
the AOUSC would receive $45 per case. Under H.R. 975, no 
portion of chapter 7, chapter 11, or chapter 13 filing fees 
would be recorded as governmental receipts.
    Section 418 would permit a bankruptcy court or district 
court to waive the chapter 7 filing fee and other fees for a 
debtor who is unable to pay such fees in installments. Based on 
information from the AOUSC, CBO expects that, in fiscal year 
2004, chapter 7 filing fees would be waived for about 3.5 
percent of all chapter 7 filers and that the percentage waived 
would gradually increase to about 10 percent by fiscal year 
2007.
    Considering the expected reduction in the use of chapter 7 
because of means-testing and the provision that would allow fee 
waivers, CBO estimates that implementing the new fee structure 
and changes in fee classifications would result in an increase 
in offsetting collections totaling $282 million over the 2003-
2008 period.
    U.S. Trustee Site Visits in Chapter 11 Cases (Section 439). 
This section would expand the responsibilities of the U.S. 
Trustees in small business bankruptcy cases to include site 
visits to inspect the debtor's premises, review records, and 
verify that the debtor has filed tax returns. Based on 
information from the U.S. Trustees, CBO estimates that 
implementing section 439 would require about 20 additional 
analysts to conduct over 2,300 site visits each year. CBO 
estimates that implementing this provision would cost about $11 
million over the next five years for the salaries, benefits, 
and travel expenses associated with those additional personnel.
    Compilation and Publication of Bankruptcy Data and 
Statistics (Sections 601-602). Beginning 18 months after 
enactment, H.R. 975 would require the AOUSC to collect data on 
chapter 7, chapter 11, and chapter 13 cases and the U.S. 
Trustees to make such information available to the public. CBO 
estimates that it would cost about $34 million over the 2003-
2008 period to meet these requirements. Of the total estimated 
cost, about $30 million would be required for additional legal 
clerks, analysts, and data base support. The remainder would be 
incurred by the U.S. Trustees for compiling data and providing 
Internet access to records pertaining to bankruptcy cases.
    Audit Procedures (Section 603). Beginning 18 months after 
enactment, H.R. 975 would require that at least one out of 
every 250 bankruptcy cases under chapter 7, chapter 11, and 
chapter 13, plus other selected cases under those chapters, be 
audited by an independent certified public accountant. Based on 
information from the U.S. Trustees, CBO estimates that about 
1.6 million cases would be subject to audits in fiscal year 
2005, increasing to about 1.9 million in fiscal year 2008. CBO 
assumes that about 0.8 percent of those cases would be audited 
and that each audit would cost roughly $1,000 (in 2003 
dollars). CBO also expects that the U.S. Trustees would need 
about 10 additional analysts and attorneys to support the 
follow-up work associated with the audits. We estimate that 
implementing this provision would cost $72 million over the 
2005-2008 period.
    Additional Judgeships--Support Costs (Section 1223). This 
provision would extend four temporary bankruptcy judgeships and 
authorize 28 new temporary bankruptcy judgeships for 22 federal 
judicial districts. Based on information from the AOUSC, CBO 
assumes that about half of the 28 new positions would be filled 
by the beginning of fiscal year 2004 and the rest would be 
filled by the start of fiscal year 2005. Also, we anticipate 
that all four temporary judgeships would be filled by fiscal 
year 2005. We expect that discretionary expenditures for 
support costs associated with each judgeship would average 
about $490,000 annually (in 2003 dollars). CBO estimates that 
the administrative support of additional bankruptcy judges 
would require an appropriation of less than $500,000 in fiscal 
year 2003 and $77 million over the 2004-2008 period. (Salaries 
and benefits for the judges are classified as mandatory 
spending, and those costs are described below.)
    Federal Trade Commission Toll-Free Hotline (Section 1301). 
This section would require the Federal Trade Commission (FTC) 
to operate a toll-free number for consumers to calculate how 
long it would take to pay off a credit card debt if they were 
to make only the minimum monthly payments. Based on information 
from the FTC about the demand for the agency's other credit-
related hotline, CBO expects that the FTC would receive about 
20,000 calls each month. CBO estimates that the equipment and 
personnel necessary to serve this volume of inquires would cost 
$2 million in 2004 and $6 million over the 2004-2008 period, 
subject to the appropriation of the necessary amounts.

Direct Spending and Revenues

    Additional Judgeships (Section 1223). CBO estimates that 
enacting the means-testing provision (section 102) would impose 
some additional workload on the courts. Section 128 would 
authorize 28 new temporary bankruptcy judgeships and extend 
four existing temporary judgeships. Based on information from 
the AOUSC and other bankruptcy experts, CBO expects that the 
increase in the number of bankruptcy judges would be sufficient 
to meet the increased workload. Assuming that the salary and 
benefits of a bankruptcy judge would average about $155,000 a 
year (in 2003 dollars), CBO estimates that the mandatory costs 
associated with the salaries and benefits of those additional 
judgeships would be less than $500,000 in fiscal year 2003 and 
about $23 million over the 2004-2008 period.
    Changes in Bankruptcy Filing Fees (Sections 102, 325, and 
418). Section 325 would change the classification of where 
bankruptcy filing fees are recorded in the budget. Under 
current law, filing fees are divided between the U.S. Trustee 
System Fund, the AOUSC, the private trustee assigned to the 
case, and the remainder is recorded as governmental receipts 
(i.e., revenues). The percentage of the fees allocated to those 
different parts of the budget varies by chapter. Under the fee 
structure specified in the bill, the portions of chapter 7, 
chapter 11, and chapter 13 filing fees that are now recorded as 
governmental receipts would be recorded as offsetting 
collections or offsetting receipts. Therefore, CBO estimates 
that enacting H.R. 975 would reduce governmental receipts by 
$263 million over the 2004-2008 period. (The change in 
offsetting receipts would be matched by additional spending, 
resulting in no net change in direct spending.)
    Tax Provisions (Title VII). Title VII of H.R. 975 would 
alter several provisions related to tax claims. It would alter 
the treatment of certain tax liens, disallow the discharge of 
taxes resulting from fraudulent tax returns under chapter 13 or 
chapter 11 of the bankruptcy code, require periodic cash 
payments of priority tax claims, and specify the rate of 
interest on tax claims. Title VII also would change the status 
of assessment periods for tax claims and would alter various 
administrative requirements. Based on information from the 
Internal Revenue Service and the Joint Committee on Taxation, 
CBO estimates that these provisions would increase revenues, 
but that any increase would be negligible.
    Estimated impact on state, local, and tribal governments: 
H.R. 975 contains intergovernmental mandates as defined in 
UMRA, but CBO estimates that any resulting costs would not be 
significant and would not exceed the threshold established in 
UMRA ($59 million in 2003, adjusted annually for inflation). 
Overall, CBO expects that enacting this bill would benefit 
state and local governments by enhancing their ability to 
collect outstanding obligations in bankruptcy cases.

Mandates

    Section 227 of the bill would preempt state laws governing 
contracts between a debt relief agency and a debtor, but only 
to the extent that those state laws are inconsistent with the 
federal requirements set forth in this bill. Such preemptions 
are mandates as defined in UMRA. Because the preemption would 
not require states to change their laws, CBO estimates that the 
costs to states of complying with this mandate would not be 
significant.
    Section 719 would require state and local income tax 
procedures to conform to the Internal Revenue Code with regard 
to dividing tax liabilities and responsibilities between the 
estate and the debtor, the tax consequences of partnerships and 
transfers of property, and the taxable period of the debtor. 
CBO estimates that this provision would increase costs for the 
administration of state and local tax laws but would not 
require state and local tax rates to conform to the federal 
rates. Such administrative costs would not be significant and 
would likely be offset by increased collections.

Other Impacts

    The changes to bankruptcy law in the bill would affect 
state and local governments primarily as creditors and holders 
of tax or child support claims against debtors. In addition, it 
would change some of the state statutes that govern which of a 
debtor's assets are protected from creditors in a bankruptcy 
proceeding.
    A 1996 survey, the most recent data available, of the 50 
states conducted by the Federation of Tax Administrators (FTA) 
and the States' Association of Bankruptcy Attorneys indicated 
that more than 360,000 taxpayers in bankruptcy owed claims 
totaling about $4 billion. Of those claims, states reported 
collecting only about $234 million. According to FTA, total 
bankruptcy filings have increased since 1996, and the 
proportion of claims collected by states has remained constant. 
While CBO cannot predict how much more money might be collected 
under this legislation, it is likely that states and local 
governments would collect a greater share of future claims than 
they would under current law.
    Domestic Support Obligations. The bill would enhance a 
state's ability to collect domestic support obligations, 
including child support. Domestic support obligations owed to 
state or local governments would be given priority over all 
other claims, except those same obligations owed to 
individuals. The bill would make those debts nondischargeable 
(not able to be written-off at the end of bankruptcy). The bill 
also would require that filers under chapter 11 and 13 cases 
pay domestic support obligations owed to government agencies or 
individuals in order to receive a discharge of outstanding 
debts. In addition, under this bill, the automatic stay that is 
triggered by filing bankruptcy would not apply to domestic 
support obligations owed by debtors or withheld from regular 
income as it currently does. The bill also would require 
bankruptcy trustees to notify individuals with domestic support 
claims of their right to use the services of a state child 
support enforcement agency and notify the agency that it has 
done so. The last known address of the debtor would be a part 
of the notification.
    Exemptions. Although bankruptcy is regulated according to 
federal statute, states are allowed to provide debtors with 
certain exemptions for property, insurance, and other items 
that are different from those allowed under the federal 
bankruptcy code. (Exempt property remains in possession of the 
debtor and is not available to pay off creditors.) In some 
states, debtors can choose the federal or state exemption; 
other states require a debtor to use only the state exemptions. 
The bill would reduce the value of a debtor's homestead 
exemption under certain circumstances. It also would place a 
monetary cap on the value of certain property that the debtor 
may claim as exempt under state or local law. The bill would 
exempt certain types of retirement and education savings, as 
well as contributions to specified employee benefit plans.
    Those exemption standards would apply regardless of the 
state policy on exemptions. The new property-value limitations 
could make more money available to creditors in some cases, 
while the exemptions on some retirement, education, and other 
savings generally would make less money available.
    Time Limits on Tax Collection. Under some circumstances, a 
tax claim can qualify for priority status, making it more 
likely that a state or local government can collect the debt. 
However, this status is granted only if a tax is assessed 
within a specific period of time from the date of the 
bankruptcy filing. If that filing is subsequently dismissed and 
a new filing is made, the tax claim may lose its priority 
status. The bill would make adjustments to this provision, 
allowing more time to pass in some circumstances, thus 
increasing the likelihood that state or local tax claims would 
maintain their priority status.
    Taxes and Administrative Expenses. Under current law, 
certain expenses and the priority of claims reduce the funds 
that would otherwise be available to pay tax liens on property. 
The bill would increase the priority of those liens in certain 
circumstances against certain expenses and claims, thereby 
making it more likely that funds would remain available to 
cover tax obligations. The bill would allow state and local 
governments to claim administrative expenses for costs incurred 
by closing a health care business. The bill would provide for a 
more uniform interest rate on all tax claims and administrative 
expenses, determined in accordance with applicable 
nonbankruptcy law rather than at the discretion of a bankruptcy 
judge.
    Tax Return Filing. A number of provisions in the bill would 
require debtors to have filed tax returns before a bankruptcy 
case may continue. Those provisions would help states identify 
potential claims in bankruptcy cases where they may be owed 
delinquent taxes.
    Priority of Payments. In some circumstances under current 
law, debtors have borrowed money or incurred some new 
obligation that is dischargeable (able to be written-off at the 
end of bankruptcy) to pay for an obligation that would not be 
dischargeable. This bill would give the new debt the same 
priority as the underlying debt. If the underlying debt had a 
priority higher than that of state or local tax liabilities, 
state and local governments could lose access to some funds. 
However, it is possible that the underlying debt could be for a 
tax claim, in which case, the taxing authority would face no 
loss. Because it is unclear what types of nondischargeable 
debts are covered by new debt and the degree to which this new 
provision would discourage such activity, CBO can estimate 
neither the direction nor the magnitude of the provision's 
impact on states and localities.
    Municipal Bankruptcy. Title V would clarify regulations 
governing municipal bankruptcy actions and allow municipalities 
that have filed for bankruptcy to liquidate certain financial 
contracts.
    Fuel Tax Claims. Under current law, all states owed fuel 
tax under the International Fuel Tax Agreement must file 
separate claims against debtors under the bankruptcy code. A 
provision in title VII would allow a state designated under the 
agreement to file a single claim on behalf of all states owed 
the fuel taxes. That provision would simplify the filing 
process.
    Single Asset Cases. Title XII includes a provision that 
would allow expedited bankruptcy proceedings in certain cases 
where the debtor's principal asset is some form of real estate. 
Enacting this provision could benefit state and local 
governments to the extent that real property is returned to 
productive tax rolls earlier.
    Estimated impact on the private sector: H.R. 975 would 
impose new private-sector mandates on bankruptcy attorneys, 
creditors, bankruptcy petition preparers, debt-relief agencies, 
and credit and charge-card companies. Consumer bankruptcy 
attorneys would be required to make reasonable inquiries to 
confirm that the information in documents they submit to the 
court or to the bankruptcy trustee is well grounded in fact. 
Creditors would be required to make disclosures in their 
agreements with debtors and to provide certain notices to 
courts and debtors. Bankruptcy petition preparers and debt-
relief agencies would also be required to provide certain 
notices to debtors. Credit and charge-card companies would be 
required to disclose specified information in monthly billing 
statements, new account introductory rate offers, and Internet-
based solicitations. CBO estimates that the direct costs of 
these mandates would exceed the annual threshold established by 
UMRA ($117 million in 2003, adjusted annually for inflation).
    Section 102 would make bankruptcy attorneys liable for 
misleading statements and inaccuracies in schedules and 
documents submitted to the court or to the trustee. To avoid 
sanctions and potential civil penalties, attorneys would need 
to verify the information given to them by their clients 
regarding the list of creditors, assets and liabilities, and 
income and expenditures. Completing a reasonable investigation 
of debtors' financial affairs and, for chapter 7 cases, 
computing debtor eligibility would require attorneys to expend 
additional effort. Information from the American Bar 
Association indicates that this requirement would increase 
attorney costs by $150 to $500 per case. Based on the 1.9 
million projected filings under chapter 7 (liquidation) and 
chapter 13 (rehabilitation), CBO estimates that the additional 
costs to bankruptcy attorneys would be between $280 million and 
$950 million beginning in fiscal year 2004 and remaining in 
that range over the next four years. The additional costs for 
attorneys would most likely be passed on to debtors.
    The bill would require certain notices to be disclosed as 
part of the bankruptcy process. Section 203 would require a 
creditor with an unsecured consumer debt seeking a 
reaffirmation agreement with a debtor to provide certain 
disclosures. A reaffirmation is an agreement between a debtor 
and a creditor that the debtor will pay all or a portion of the 
money owed despite the bankruptcy filing. Those disclosures 
must be made clearly and conspicuously in writing and include 
certain advisories and explanations. The required disclosures 
could be incorporated into existing standard reaffirmation 
agreements. Section 221 would require bankruptcy petition 
preparers who are not attorneys to give the debtor written 
notice explaining that the preparer may not provide legal 
advice. Section 228 would require a debt-relief agency 
providing bankruptcy assistance to a person to give certain 
written notices to the person and to execute a written 
contract. Such agencies also would be required to supply 
certain advisories and explanations regarding the bankruptcy 
process. Most attorneys and debt-relief counselors currently 
provide similar information. Based on information from 
attorneys and other bankruptcy practitioners, CBO estimates 
that the direct costs of complying with these mandates would 
not be substantial.
    H.R. 975 also would require credit lenders to provide 
additional disclosures to consumers. Credit and charge-card 
companies would be required to include certain disclosures in 
billing statements with respect to various open-end credit 
plans regarding the disadvantages of making only the minimum 
payment. Other disclosures would be required to be included in 
application and solicitation materials involving introductory 
rate offers, Internet-based credit card solicitations, and for 
late payment deadlines and penalties. Based on information from 
credit lenders, CBO estimates that the direct costs of these 
disclosure requirements would fall below the annual threshold.

Other Impacts

    H.R. 975 also contains many provisions that would benefit 
creditors. Most significant for creditors are provisions that 
would expand the types of debts that would be nondischargeable 
and provisions that would shift debtors from chapter 7 to 
chapter 13. By expanding the types of debts that are 
nondischargeable, some creditors would continue to receive 
payments on debts that would be discharged under current law. 
Means-testing in the bankruptcy system would result in more 
individuals being required to seek relief under chapter 13 
rather than chapter 7. Because chapter 13 requires debtors to 
develop a plan to repay creditors over a specified period, the 
total pool of funds available for distribution for creditors 
would likely increase. If the likelihood of repayment by 
debtors and the pool of funds increases by an amount greater 
than the cost to creditors of administering the new bankruptcy 
code, creditors would be made better off under the bill.
    Under UMRA, duties arising from participation in voluntary 
federal programs are not mandates. The bankruptcy process is 
largely voluntary for debtors, and debtor-initiated 
bankruptcies are equivalent to participation in a voluntary 
federal program. Consequently, new duties imposed by the bill 
on individuals who file as debtors do not meet the definition 
of private-sector mandates, and additional cost for debtors 
would not be counted as direct costs for purposes of UMRA.
    Estimate prepared by: Federal Spending: Mark Grabowicz, and 
Ken Johnson; Federal Revenues: Annabelle Bartsch; Impact on 
State, Local, and Tribal Governments: Victoria Heid Hall; and 
Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                   Constitutional Authority Statement

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

               Section-by-Section Analysis and Discussion

    Sec. 1. Short Title; References; Table of Contents. The 
short title of this measure is the Bankruptcy Abuse Prevention 
and Consumer Protection Act of 2003 ( the ``Act'').

                    TITLE I. NEEDS-BASED BANKRUPTCY

    Sec. 101. Conversion. Under current law, section 706(c) of 
the Bankruptcy Code provides that a court may not convert a 
chapter 7 case unless the debtor requests such conversion. 
Section 101 of the Act amends this provision to allow a chapter 
7 case to be converted to a case under chapter 12 or chapter 13 
on request or consent of the debtor.
    Section 102. Dismissal or Conversion. This provision 
implements the legislation's principal consumer bankruptcy 
reforms: needs-based debt relief. Under section 707(b) of the 
Bankruptcy Code, a chapter 7 case filed by a debtor who is an 
individual may be dismissed for substantial abuse only on 
motion of the court or the United States Trustee. It 
specifically prohibits such dismissal at the suggestion of any 
party in interest.
    Section 102 of the Act revises current law in several 
significant respects. First, it amends section 707(b) of the 
Bankruptcy Code to permit--in addition to the court and the 
United States trustee--a trustee, bankruptcy administrator, or 
a party in interest to seek dismissal or conversion of a 
chapter 7 case to one under chapter 11 or 13 on consent of the 
debtor, under certain circumstances. In addition, section 102 
of the Act changes the current standard for dismissal from 
``substantial abuse'' to ``abuse.'' Section 102 of the Act also 
amends Bankruptcy Code section 707(b) to mandate a presumption 
of abuse if the debtor's current monthly income (reduced by 
certain specified amounts) when multiplied by 60 is not less 
than the lesser of 25 percent of the debtor's nonpriority 
unsecured claims or $6,000 (whichever is greater), or $10,000.
    To determine whether the presumption of abuse applies under 
section 707(b) of the Bankruptcy Code, section 102(a) of the 
Act specifies certain monthly expense amounts that are to be 
deducted from the debtor's ``current monthly income'' (a 
defined term). These expense items include:

         Lthe applicable monthly expenses for the 
        debtor as well as for the debtor's dependents and 
        spouse in a joint case (if the spouse is not otherwise 
        a dependent) specified under the Internal Revenue 
        Service's National Standards (with provision for an 
        additional 5 percent for food and clothing if the 
        debtor can demonstrate that such additional amount is 
        reasonable and necessary) and the IRS Local Standards;

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

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

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

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

    With respect to secured debts, Section 102(a)(2)(C) of the 
Act specifies that the debtor's average monthly payments on 
account of secured debts is calculated as the sum of the 
following divided by 60: (1) all amounts scheduled as 
contractually due to secured creditors for each month of the 
60-month period following filing of the case; and (2) any 
additional payments necessary, in filing a plan under chapter 
13, to maintain possession of the debtor's primary residence, 
motor vehicle or other property necessary for the support of 
the debtor and the debtor's dependents, that serves as 
collateral for secured debts.
    With respect to priority claims, section 102(a)(2)(C) of 
the Act specifies that the debtor's expenses for payment of 
such claims (including child support and alimony claims) is 
calculated as the total of such debts divided by 60.
    The provision permits a debtor, if applicable, to deduct 
from current monthly income the continuation of actual expenses 
paid by the debtor that are reasonable and necessary for the 
care and support of an elderly, chronically ill, or disabled 
household member or member of the debtor's immediate family 
(providing such individual is unable to pay for these 
expenses).
    Under section 102, a debtor may also deduct the actual 
expenses for each dependent child of a debtor to attend a 
private or public elementary or secondary school of up to 
$1,500 per child if the debtor: (1) documents such expenses, 
and (2) provides a detailed explanation of why such expenses 
are reasonable and necessary. The debtor must explain why such 
expenses are not already accounted for under any of the 
Internal Revenue Service National and Local Standards, and 
Other Expenses categories.
    Other expenses that a debtor may claim include additional 
housing and utilities allowances based on the debtor's actual 
home energy expenses if the debtor documents such expenses and 
demonstrates that they are reasonable and necessary.
    While the Act replaces the current law's presumption in 
favor of granting relief requested by a chapter 7 debtor with a 
presumption of abuse (if applicable under the income and 
expense analysis previously described), this presumption may be 
rebutted only under certain circumstances. Section 102(a)(2)(C) 
of the Act amends Bankruptcy Code section 707(b) to provide 
that the presumption of abuse may be rebutted only if: (1) the 
debtor demonstrates special circumstances that justify 
additional expenses or adjustments of current monthly income 
for which there is no reasonable alternative; and (2) the 
additional expenses or adjustments cause the product of the 
debtor's current monthly income (reduced by the specified 
expenses) when multiplied by 60 to be less than the lesser of 
25 percent of the debtor's nonpriority unsecured claims, or 
$6,000 (whichever is greater); or $10,000. In addition, the 
debtor must itemize and document each additional expense or 
income adjustment as well as provide a detailed explanation of 
the special circumstances that make such expense or adjustment 
necessary and reasonable. In addition, the debtor must attest 
under oath to the accuracy of any information provided to 
demonstrate that such additional expense or adjustment is 
required.
    To implement these needs-based reforms, the Act requires 
the debtor to file, as part of the schedules of current income 
and current expenditures, a statement of current monthly 
income. This statement must show: (1) the calculations that 
determine whether a presumption of abuse arises under section 
707(b) (as amended), and (2) how each amount is calculated.
    In a case where the presumption of abuse does not apply or 
has been rebutted, section 102(a)(2)(C) of the Act amends 
Bankruptcy Code section 707(b) to require a court to consider 
whether: (1) the debtor filed the chapter 7 case in bad faith; 
or (2) the totality of the circumstances of the debtor's 
financial situation demonstrates abuse, including whether the 
debtor wants to reject a personal services contract and the 
debtor's financial need for such rejection.
    Under section 102(a)(2)(C) of the Act, a court may on its 
own initiative or on motion of a party in interest in 
accordance with rule 9011 of the Federal Rules of Bankruptcy 
Procedure, order a debtor's attorney to reimburse the trustee 
for all reasonable costs incurred in prosecuting a section 
707(b) motion if: (1) a trustee files such motion; (2) the 
motion is granted; and (3) the court finds that the action of 
the debtor's attorney in filing the case under chapter 7 
violated rule 9011. If the court determines that the debtor's 
attorney violated rule 9011, it may on its own initiative or on 
motion of a party in interest in accordance with such rule, 
order the assessment of an appropriate civil penalty against 
debtor's counsel and the payment of such penalty to the 
trustee, United States trustee, or bankruptcy administrator. 
This provision clarifies that a motion for costs or the 
imposition of a civil penalty must be made by a party in 
interest or by the court itself in accordance with rule 9011.
    Section 102(a)(2)(C) of the Act provides that the signature 
of an attorney on a petition, pleading or written motion shall 
constitute a certification that the attorney has: (1) performed 
a reasonable investigation into the circumstances that gave 
rise to such document; and (2) determined that such document is 
well-grounded in fact and warranted by existing law or a good 
faith argument for the extension, modification, or reversal of 
existing law and does not constitute an abuse under section 
707(b)(1). In addition, such attorney's signature on the 
petition constitutes a certification that the attorney has no 
knowledge after an inquiry that the information in the 
schedules filed with the petition is incorrect.
    Section 102(a)(2)(C) of the Act amends section 707(b) of 
the Bankruptcy Code to permit a court on its own initiative or 
motion by a party in interest in accordance with rule 9011 of 
the Federal Rules of Bankruptcy Procedure to award reasonable 
costs (including reasonable attorneys' fees) in contesting a 
section 707(b) motion filed by a party in interest (other than 
a trustee, United States trustee or bankruptcy administrator) 
if the court: (1) does not grant the section 707(b) motion; and 
(2) finds that either the movant violated rule 9011, or the 
attorney (if any) who filed the motion did not comply with 
section 707(b)(4)(C) and such was made solely for the purpose 
of coercing a debtor into waiving a right guaranteed under the 
Bankruptcy Code to such debtor. An exception applies with 
respect to a movant that is a ``small business'' with a claim 
in an aggregate amount of less than $1,000. A small business, 
for purposes of this provision, is defined as an unincorporated 
business, partnership, corporation, association or organization 
that engages in commercial or business activities and employs 
less than 25 full-time employees. The number of employees of a 
wholly owned subsidiary includes the employees of the parent 
and any other subsidiary corporation of the parent. Section 
102(a)(2)(C) of the Act clarifies that the motion for costs 
must be made by a party in interest or by the court. The use of 
the phraseology in this provision, ``in accordance with rule 
9011 of the Federal Rules of Bankruptcy Procedure,'' is 
intended to indicate that the procedures for the motion of a 
party in interest or a court acting on its own initiative are 
the procedures outlined in rule 9011(c).
    The Act includes two ``safe harbors'' with respect to its 
needs-based reforms. One safe harbor allows only a judge, 
United States trustee, or bankruptcy administrator to file a 
section 707(b) motion (based on the debtor's ability to repay, 
bad faith, or the totality of the circumstances) if the chapter 
7 debtor's current monthly income (or in a joint case, the 
income of the debtor and the debtor's spouse) falls below the 
state median family income for a family of equal or lesser size 
(adjusted for larger sized families), or the state median 
family income for one earner in the case of a one-person 
household.
    The Act's second safe harbor only pertains to a motion 
under section 707(b)(2), that is, a motion to dismiss based on 
a debtor's ability to repay. It does not allow a judge, United 
States trustee, bankruptcy administrator or party in interest 
to file such motion if the income of the debtor and the 
debtor's spouse is less than certain monetary thresholds. This 
provision does not consider the nonfiling spouse's income if 
the debtor and the debtor's spouse are separated under 
applicable nonbankruptcy law, or the debtor and the debtor's 
spouse are living separate and apart, other than for the 
purpose of evading section 707(b)(2). The debtor must file a 
statement under penalty of perjury specifying that he or she 
meets one of these criteria. In addition, the statement must 
disclose the aggregate (or best estimate) of the amount of any 
cash or money payments received from the debtor's spouse 
attributed to the debtor's current monthly income.
    Section 102(b) of the Act amends section 101 of the 
Bankruptcy Code to define ``current monthly income'' as the 
average monthly income that the debtor receives (or in a joint 
case, the debtor and debtor's spouse receive) from all sources, 
without regard to whether it is taxable income, in a specified 
6-month period preceding the filing of the bankruptcy case. The 
Act specifies that the 6-month period is determined as ending 
on the last day of the calendar month immediately preceding the 
filing of the bankruptcy case, if the debtor files the 
statement of current income required by Bankruptcy Code section 
521. If the debtor does not file such schedule, the court 
determines the date on which current income is calculated.
    ``Current monthly income'' includes any amount paid by any 
entity other than the debtor (or, in a joint case, the debtor 
and the debtor's spouse if not otherwise a dependent) on a 
regular basis for the household expenses of the debtor or the 
debtor's dependents (and, the debtor's spouse in a joint case, 
if not otherwise a dependent). It excludes Social Security Act 
benefits and payments to victims of war crimes or crimes 
against humanity on account of their status as victims of such 
crimes. In addition, the Act provides that current monthly 
income does not include payments to victims of international or 
domestic terrorism as defined in section 2331 of title 18 of 
the United States Code on account of their status as victims of 
such terrorism.
    Section 102(c) of the Act amends section 704 of the 
Bankruptcy Code to require the United States trustee or 
bankruptcy administrator in a chapter 7 case where the debtor 
is an individual to: (1) review all materials filed by the 
debtor; and (2) file a statement with the court (within 10 days 
following the meeting of creditors held pursuant to section 341 
of the Bankruptcy Code) as to whether or not the debtor's case 
should be presumed to be an abuse under section 707(b). The 
court must provide a copy of such statement to all creditors 
within 5 days after its filing. Within 30 days of the filing of 
such statement, the United States trustee or bankruptcy 
administrator must file either: (1) a motion under section 
707(b); or (2) a statement setting forth the reasons why such 
motion is not appropriate in any case where the debtor's filing 
should be presumed to be an abuse and the debtor's current 
monthly income exceeds certain monetary thresholds.
    In a chapter 7 case where the presumption of abuse applies 
under section 707(b), section 102(d) of the Act amends 
Bankruptcy Code section 342 to require the clerk to provide 
written notice to all creditors within 10 days after 
commencement of the case stating that the presumption of abuse 
applies in such case.
    Section 102(e) of the Act provides that nothing in the 
Bankruptcy Code limits the ability of a creditor to give 
information to a judge (except for information communicated ex 
parte, unless otherwise permitted by applicable law), United 
States trustee, bankruptcy administrator, or trustee.
    Section 102(f) of the Act adds a provision to Bankruptcy 
Code section 707 to permit the court to dismiss a chapter 7 
case filed by a debtor who is an individual on motion by a 
victim of a crime of violence (as defined in section 16 of 
title 18 of the United States Code) or a drug trafficking crime 
(as defined in section 924(c)(2) of title 18 of the United 
States Code). The case may be dismissed if the debtor was 
convicted of such crime and dismissal is in the best interest 
of the victims, unless the debtor establishes by a 
preponderance of the evidence that the filing of the case is 
necessary to satisfy a claim for a domestic support obligation.
    Section 102(g) of the Act amends section 1325(a) of the 
Bankruptcy Code to require the court, as a condition of 
confirming a chapter 13 plan, to find that the debtor's action 
in filing the case was in good faith.
    Section 102(h) of the Act amends section 1325(b)(1) of the 
Bankruptcy Code to specify that the court must find, in 
confirming a chapter 13 plan to which there has been an 
objection, that the debtor's disposable income will be paid to 
unsecured creditors. It also amends section 1325(b)(2)'s 
definition of disposable income. As defined under this 
provision, the term means income received by the debtor (other 
than child support payments, foster care payments, or certain 
disability payments for a dependent child) less amounts 
reasonably necessary to be expended for: (1) the maintenance or 
support of the debtor or the debtor's dependent; (2) a domestic 
support obligation that first becomes due after the case is 
filed; (3) charitable contributions (as defined in Bankruptcy 
Code section 548(d)(3)) to a qualified religious or charitable 
entity or organization (as defined in Bankruptcy Code section 
548(d)(4)) in an amount that does not exceed 15 percent of the 
debtor's gross income for the year in which the contributions 
are made; and (4) if the debtor is engaged in business, the 
payment of expenditures necessary for the continuation, 
preservation, and operation of the business. As amended, 
section 1325(b)(3) provides that the amounts reasonably 
necessary to be expended under section 1325(b)(2) are 
determined in accordance with section 707(b)(2)(A) and (B) if 
the debtor's income exceeds certain monetary thresholds.
    Section 102(i) of the Act amends Bankruptcy Code section 
1329(a) to require the amounts paid under a confirmed chapter 
13 plan to be reduced by the actual amount expended by the 
debtor to purchase health insurance for the debtor and the 
debtor's dependents (if those dependents do not otherwise have 
such insurance) if the debtor documents the cost of such 
insurance and demonstrates such expense is reasonable and 
necessary, and the amount is not otherwise allowed for purposes 
of determining disposable income under section 1325(b). If the 
debtor previously paid for health insurance, the debtor must 
demonstrate that the amount is not materially greater than the 
amount the debtor previously paid. If the debtor did not 
previously have such insurance, the amount may not be not 
materially larger than the reasonable cost that would be 
incurred by a debtor with similar characteristics. Upon request 
of any party in interest, the debtor must file proof that a 
health insurance policy was purchased.
    Section 102(j) of the Act amends section 104 of the 
Bankruptcy Code to provide for the periodic adjustment of 
monetary amounts specified in sections 707(b) and 1325(b)(3) of 
the Bankruptcy Code, as amended by this Act.
    Section 102(k) adds to section 101 of the Bankruptcy Code a 
definition of ``median family income.''
    Sec. 103. Sense of Congress and Study. Section 103(a) of 
the Act expresses the sense of Congress that the Secretary of 
the Treasury has the authority to alter the Internal Revenue 
Service expense standards to set guidelines for repayment plans 
as needed to accommodate their use under section 707(b) of the 
Bankruptcy Code, as amended. Section 103(b) requires the 
Executive Office for United States Trustees to submit a report 
within 2 years from the date of the Act's enactment regarding 
the utilization of the Internal Revenue Service expense 
standards for determining the current monthly expenses of a 
debtor under section 707(b) and the impact that the application 
of these standards has had on debtors and the bankruptcy 
courts. The report may include recommendations for amendments 
to the Bankruptcy Code that are consistent with the report's 
findings.
    Sec. 104. Notice of Alternatives. Section 104 of the Act 
amends section 342(b) of the Bankruptcy Code to require the 
clerk, before the commencement of a bankruptcy case by an 
individual whose debts are primarily consumer debts, to supply 
such individual with a written notice containing: (1) a brief 
description of chapters 7, 11, 12, and 13 and the general 
purpose, benefits, and costs of proceeding under each of these 
chapters; (2) the types of services available from credit 
counseling agencies; (3) a statement advising that a person who 
knowingly and fraudulently conceals assets or makes a false 
oath or statement under penalty of perjury in connection with a 
bankruptcy case shall be subject to fine, imprisonment, or 
both; and (4) a statement warning that all information supplied 
by a debtor in connection with the case is subject to 
examination by the Attorney General.
    Sec. 105. Debtor Financial Management Training Test 
Program. Section 105 of the Act requires the Director of the 
Executive Office for United States Trustees to: (1) consult 
with a wide range of debtor education experts who operate 
financial management education programs; and (2) develop a 
financial management training curriculum and materials that can 
be used to teach individual debtors how to manage their 
finances better. The Director must select six judicial 
districts to test the effectiveness of the financial management 
training curriculum and materials for an 18-month period 
beginning not later than 270 days after the Act's enactment 
date. For these six districts, the curricula and materials must 
be used as the instructional personal financial management 
course required under Bankruptcy Code section 111. Over the 
period of the study, the Director must evaluate the 
effectiveness of the curriculum and materials as well as 
consider a sample of existing consumer education programs (such 
as those described in the Report of the National Bankruptcy 
Review Commission) that are representative of consumer 
education programs sponsored by the credit industry, chapter 13 
trustees, and consumer counseling groups. Not later than 3 
months after concluding such evaluation, the Director must 
submit to Congress a report with findings regarding the 
effectiveness and cost of the curricula, materials, and 
programs.
    Sec. 106. Credit Counseling. Section 106(a) of the Act 
amends section 109 of the Bankruptcy Code to require an 
individual--as a condition of eligibility for bankruptcy 
relief--to receive credit counseling within the 180-day period 
preceding the filing of a bankruptcy case by such individual. 
The credit counseling must be provided by an approved nonprofit 
budget and credit counseling agency consisting of either an 
individual or group briefing (which may be conducted 
telephonically or via the Internet) that outlined opportunities 
for available credit counseling and assisted the individual in 
performing a budget analysis. This requirement does not apply 
to a debtor who resides in a district where the United States 
trustee or bankruptcy administrator has determined that 
approved nonprofit budget and credit counseling agencies in 
that district are not reasonably able to provide adequate 
services to such individuals. Although such determination must 
be reviewed annually, the United States trustee or bankruptcy 
administrator may disapprove a nonprofit budget and credit 
counseling agency at any time.
    A debtor may be temporarily exempted from this requirement 
if he or she submits to the court a certification that: (1) 
describes exigent circumstances meriting a waiver of this 
requirement; (2) states that the debtor requested credit 
counseling services from an approved nonprofit budget and 
credit counseling agency, but was unable to obtain such 
services within the 5-day period beginning on the date the 
debtor made the request; and (3) is satisfactory to the court. 
This exemption terminates when the debtor meets the 
requirements for credit counseling participation, but not 
longer than 30 days after the case is filed, unless the court, 
for cause, extends this period up to an additional 15 days.
    Section 106(b) of the Act amends section 727(a) of the 
Bankruptcy Code to deny a discharge to a chapter 7 debtor who 
fails to complete a personal financial management instructional 
course. This provision, however, does not apply if the debtor 
resides in a district where the United States trustee or 
bankruptcy administrator has determined that the approved 
instructional courses in that district are not adequate. Such 
determination must be reviewed annually by the United States 
trustee or bankruptcy administrator.
    Section 106(c) of the Act amends section 1328 of the 
Bankruptcy Code to deny a discharge to a chapter 13 debtor who 
fails to complete a personal financial management instructional 
course. This requirement does not apply if the debtor resides 
in a district where the United States trustee or bankruptcy 
administrator has determined that the approved instructional 
courses in that district are not adequate. Such determination 
must be reviewed annually by the United States trustee or 
bankruptcy administrator.
    Section 106(d) of the Act amends section 521 of the 
Bankruptcy Code to require a debtor who is an individual to 
file with the court: (1) a certificate from an approved 
nonprofit budget and credit counseling agency describing the 
services it provided the debtor pursuant to section 109(h); and 
(2) a copy of the repayment plan, if any, that was developed by 
the agency pursuant to section 109(h).
    Section 106(e) of the Act adds section 111 to the 
Bankruptcy Code requiring the clerk to maintain a publically 
available list of approved: (1) credit counseling agencies that 
provide the services described in section 109(h) of the 
Bankruptcy Code; and (2) personal financial management 
instructional courses. Section 106(e) further provides that the 
United States trustee or bankruptcy administrator may only 
approve an agency or course provider under this provision 
pursuant to certain specified criteria. If such agency or 
provider course is approved, the approval may only be for a 
probationary period of up to 6 months. At the conclusion of the 
probationary period, the United States trustee or bankruptcy 
administrator may only approve such agency or instructional 
course for an additional 1-year period and, thereafter for 
successive 1-year periods, which has demonstrated during such 
period that it met the standards set forth in this provision 
and can satisfy such standards in the future.
    Within 30 days after any final decision occurring after the 
expiration of the initial probationary period or after any 
subsequent 2-year period, an interested person may seek 
judicial review of such decision in the appropriate United 
States district court. In addition, the district court, at any 
time, may investigate the qualifications of a credit counseling 
agency and request the production of documents to ensure the 
agency's integrity and effectiveness. The district court may 
remove a credit counseling agency that does not meet the 
specified qualifications from the approved list. The United 
States trustee or bankruptcy administrator must notify the 
clerk that a credit counseling agency or instructional course 
is no longer approved and the clerk must remove such entity 
from the approved list.
    Section 106(e) prohibits a credit counseling agency from 
providing information to a credit reporting agency as to 
whether an individual debtor has received or sought personal 
financial management instruction. A credit counseling agency 
that willfully or negligently fails to comply with any 
requirement under the Bankruptcy Code with respect to a debtor 
shall be liable to the debtor for damages in an amount equal 
to: (1) actual damages sustained by the debtor as a result of 
the violation; and (2) any court costs or reasonable attorneys' 
fees incurred in an action to recover such damages.
    Section 106(f) of the Act amends section 362 of the 
Bankruptcy Code to provide that if a chapter 7, 11, or 13 case 
is dismissed due to the creation of a debt repayment plan, the 
presumption that a case was not filed in good faith under 
section 362(c)(3) shall not apply to any subsequent bankruptcy 
case commenced by the debtor. It also provides that the court, 
on request of a party in interest, must issue an order under 
section 362(c) confirming that the automatic stay has 
terminated.
    Sec. 107. Schedules of Reasonable and Necessary Expenses. 
For purposes of section 707(b) of the Bankruptcy Code, section 
107 of the Act requires the Director of the Executive Office 
for United States Trustees to issue schedules of reasonable and 
necessary administrative expenses (including reasonable 
attorneys' fees) relating to the administration of a chapter 13 
plan for each judicial district not later than 180 days after 
the date of enactment of the Act.

                 TITLE II. ENHANCED CONSUMER PROTECTION

Subtitle A. Penalties for Abusive Creditor Practices

    Sec. 201. Promotion of Alternative Dispute Resolution. 
Subsection (a) of section 201 of the Act amends section 502 of 
the Bankruptcy Code to permit the court, after a hearing on 
motion of the debtor, to reduce a claim based in whole on an 
unsecured consumer debt by up to 20 percent if: (1) the claim 
was filed by a creditor who unreasonably refused to negotiate a 
reasonable alternative repayment schedule proposed by an 
approved credit counseling agency on behalf of the debtor; (2) 
the debtor's offer was made at least 60 days before the filing 
of the case; (3) the offer provided for payment of at least 60 
percent of the debt over a period not exceeding the loan's 
repayment period or a reasonable extension thereof; and (4) no 
part of the debt is nondischargeable. The debtor has the burden 
of proving by clear and convincing evidence that: (1) the 
creditor unreasonably refused to consider the debtor's 
proposal; and (2) the proposed alternative repayment schedule 
was made prior to the expiration of the 60-day period. Section 
201(b) amends section 547 of the Bankruptcy Code to prohibit 
the avoidance as a preferential transfer a payment by a debtor 
to a creditor pursuant to an alternative repayment plan created 
by an approved credit counseling agency.
    Sec. 202. Effect of Discharge. Section 202 of the Act 
amends section 524 of the Bankruptcy Code in two respects. 
First, it provides that the willful failure of a creditor to 
credit payments received under a confirmed chapter 11, 12, or 
13 plan constitutes a violation of the discharge injunction if 
the creditor's action to collect and failure to credit payments 
in the manner required by the plan caused material injury to 
the debtor. This provision does not apply if the order 
confirming the plan is revoked, the plan is in default, or the 
creditor has not received payments required to be made under 
the plan in the manner prescribed by the plan. Second, section 
202 amends section 524 of the Bankruptcy Code to provide that 
the discharge injunction does not apply to a creditor having a 
claim secured by an interest in real property that is the 
debtor's principal residence if the creditor communicates with 
the debtor in the ordinary course of business between the 
creditor and the debtor and such communication is limited to 
seeking or obtaining periodic payments associated with a valid 
security interest in lieu of the pursuit of in rem relief to 
enforce the lien.
    Sec. 203. Discouraging Abuse of Reaffirmation Agreement 
Practices. Section 203 of the Act effectuates a comprehensive 
overhaul of the law applicable to reaffirmation agreements. 
Subsection (a) amends section 524 of the Bankruptcy Code to 
mandate that certain specified disclosures be provided to a 
debtor at or before the time he or she signs a reaffirmation 
agreement. These specified disclosures, which are the only 
disclosures required in connection with a reaffirmation 
agreement, must be in writing and be made clearly and 
conspicuously. In addition, the disclosure must include certain 
advisories and explanations. At the election of the creditor, 
the disclosure statement may include a repayment schedule. If 
the debtor is represented by counsel, section 203(a) mandates 
that the attorney file a certification stating that the 
agreement represents a fully informed and voluntary agreement 
by the debtor, that the agreement does not impose an undue 
hardship on the debtor or any dependent of the debtor, and that 
the attorney fully advised the debtor of the legal effect and 
consequences of such agreement as well as of any default 
thereunder. In those instances where the presumption of undue 
hardship applies, the attorney must also certify that the 
debtor is able to make the payments required under the 
reaffirmation agreement. Further, the debtor must submit a 
statement setting forth the debtor's monthly income and actual 
current monthly expenditures. If the debtor is represented by 
counsel and the debt being reaffirmed is owed to a credit 
union, a modified version of this statement may be used.
    Notwithstanding any other provision of the Bankruptcy Code, 
section 203(a) permits a creditor to accept payments from a 
debtor: (1) before and after the filing of a reaffirmation 
agreement with the court; or (2) pursuant to a reaffirmation 
agreement that the creditor believes in good faith to be 
effective. It further provides that the requirements specified 
in subsections (c)(2) and (k) of section 524 are satisfied if 
the disclosures required by these provisions are given in good 
faith.
    Where the amount of the scheduled payments due on the 
reaffirmed debt (as disclosed in the debtor's statement) 
exceeds the debtor's available income, it is presumed for 60 
days from the date on which the reaffirmation agreement is 
filed with the court that the agreement presents an undue 
hardship. The court must review such presumption, which can be 
rebutted by the debtor by a written statement explaining the 
additional sources of funds that would enable the debtor to 
make the required payments on the reaffirmed debt. If the 
presumption is not rebutted to the satisfaction of the court, 
the court may disapprove the reaffirmation agreement. No 
reaffirmation agreement may be disapproved without notice and 
hearing to the debtor and creditor. The hearing must be 
concluded before the entry of the debtor's discharge. The 
requirements set forth in this paragraph do not apply to 
reaffirmation agreements if the creditor is a credit union.
    Section 203(b) amends title 18 of the United States Code to 
require the Attorney General to designate a United States 
Attorney for each judicial district and to appoint a Federal 
Bureau of Investigation agent for each field office to have 
primary law enforcement responsibilities for violations of 
sections 152 and 157 of title 18 with respect to abusive 
reaffirmation agreements and materially fraudulent statements 
in bankruptcy schedules that are intentionally false or 
misleading. In addition, section 203(b) provides that the 
designated United States Attorney has primary responsibility 
with respect to bankruptcy investigations under section 3057 of 
title 18. Section 203(b) further provides that the bankruptcy 
courts must establish procedures for referring any case in 
which a materially fraudulent bankruptcy schedule has been 
filed.
    Sec. 204. Preservation of Claims and Defenses Upon Sale of 
Predatory Loans. Section 204 of the Act adds a provision to 
section 363 of the Bankruptcy Code with respect to sales of any 
interest in a consumer transaction that is subject to the Truth 
in Lending Act or any interest in a consumer credit contract 
(as defined in section 433.1 of title 16 of the Code of Federal 
Regulations). It provides that the purchaser of such interest 
remains subject to all claims and defenses that are related to 
such assets to the same extent as that person would be subject 
to if the sale was not conducted under section 363.
    Sec. 205. GAO Study and Report on Reaffirmation Agreement 
Process. Section 205 of the Act directs the Comptroller General 
of the United States to report to Congress on how consumers are 
treated in connection with the reaffirmation agreement process. 
This report must include: (1) the policies and activities of 
creditors with respect to reaffirmation agreements; and (2) 
whether such consumers are fully, fairly, and consistently 
informed of their rights under the Bankruptcy Code. The report, 
which must be completed not later than 18 months after the date 
of enactment of this Act, may include recommendations for 
legislation to address any abusive or coercive tactics found in 
connection with the reaffirmation process.

Subtitle B. Priority Child Support

    Sec. 211. Definition of Domestic Support Obligation. 
Section 211 of the Act amends section 101 of the Bankruptcy 
Code to define a domestic support obligation as a debt that 
accrues pre- or postpetition (including interest that accrues 
pursuant to applicable nonbankruptcy law) and is owed to or 
recoverable by: (1) a spouse, former spouse, or child of the 
debtor, or such child's parent, legal guardian, or responsible 
relative; or (2) a governmental unit. To qualify as a domestic 
support obligation, the debt must be in the nature of alimony, 
maintenance, or support (including assistance provided by a 
governmental unit), without regard to whether such debt is 
expressly so designated. It must be established or subject to 
establishment either pre- or postpetition pursuant to: (1) a 
separation agreement, divorce decree, or property settlement 
agreement; (2) an order of a court of record; or (3) a 
determination made in accordance with applicable nonbankruptcy 
law by a governmental unit. It does not apply to a debt 
assigned to a nongovernmental entity, unless it was assigned 
voluntarily by the spouse, former spouse, child, or parent 
solely for the purpose of collecting the debt.
    Sec. 212. Priorities for Claims for Domestic Support 
Obligations. Section 212 of the Act amends section 507(a) of 
the Bankruptcy Code to accord first priority in payment to 
allowed unsecured claims for domestic support obligations that, 
as of the petition date, are owed to or recoverable by a 
spouse, former spouse, or child of the debtor, or the parent, 
legal guardian, or responsible relative of such child, without 
regard to whether such claim is filed by the claimant or by a 
governmental unit on behalf of such claimant, on the condition 
that funds received by such unit under this provision be 
applied and distributed in accordance with nonbankruptcy law. 
Subject to these claims, section 212 accords the same payment 
priority to allowed unsecured claims for domestic support 
obligations that, as of the petition date, were assigned by a 
spouse, former spouse, child of the debtor, or such child's 
parent, legal guardian, or responsible relative to a 
governmental unit (unless the claimant assigned the claim 
voluntarily for the purpose of collecting the debt), or are 
owed directly to or recoverable by a governmental unit under 
applicable nonbankruptcy law, on the condition that funds 
received by such unit under this provision be applied and 
distributed in accordance with nonbankruptcy law. Where a 
trustee administers assets that may be available for payment of 
domestic support obligations under section 507(a)(1) (as 
amended), administrative expenses of the trustee allowed under 
section 503(b)(1)(A), (2) and (6) of the Bankruptcy Code must 
be paid before such claims to the extent the trustee 
administers assets that are otherwise available for the payment 
of these claims.
    Sec. 213. Requirements To Obtain Confirmation and Discharge 
in Cases Involving Domestic Support Obligations. With respect 
to chapter 11 cases, section 213(1) adds a condition for 
confirmation of a plan. It amends section 1129(a) of the 
Bankruptcy Code to provide that if a chapter 11 debtor is 
required by judicial or administrative order or statute to pay 
a domestic support obligation, then the debtor must pay all 
amounts payable under such order or statute that became payable 
postpetition as a prerequisite for confirmation.
    With respect to chapter 12 cases, section 213(2) of the Act 
amends section 1208(c) of the Bankruptcy Code to provide that 
the failure of a debtor to pay any domestic support obligation 
that first becomes payable postpetition is cause for conversion 
or dismissal of the case. Section 213(3) amends Bankruptcy Code 
section 1222(a) to permit a chapter 12 debtor to propose a plan 
paying less than full payment of all amounts owed for a claim 
entitled to priority under Bankruptcy Code section 507(a)(1)(B) 
if all of the debtor's projected disposable income for a 5-year 
period is applied to make payments under the plan. Section 
213(4) of the Act amends Bankruptcy Code section 1222(b) to 
permit a chapter 12 debtor to propose a plan that pays 
postpetition interest on claims that are nondischargeable under 
Section 1228(a), but only to the extent that the debtor has 
disposable income available to pay such interest after payment 
of all allowed claims in full. Section 213(5) amends Bankruptcy 
Code section 1225(a) to provide that if a chapter 12 debtor is 
required by judicial or administrative order or statute to pay 
a domestic support obligation, then the debtor must pay such 
obligations pursuant to such order or statute that became 
payable postpetition as a condition of confirmation. Section 
213(6) amends section Bankruptcy Code section 1228(a) to 
condition the granting of a chapter 12 discharge upon the 
debtor's payment of certain postpetition domestic support 
obligations.
    With respect to chapter 13 cases, section 213(7) of the Act 
amends Bankruptcy Code section 1307(c) to provide that the 
failure of a debtor to pay any domestic support obligation that 
first becomes payable postpetition is cause for conversion or 
dismissal of the debtor's case. Section 213(8) amends 
Bankruptcy Code section 1322(a) to permit a chapter 13 debtor 
to propose a plan paying less than the full amount of a claim 
entitled to priority under Bankruptcy Code section 507(a)(1)(B) 
if the plan provides that all of the debtor's projected 
disposable income over a 5-year period will be applied to make 
payments under the plan. Section 213(9) amends Bankruptcy Code 
section 1322(b) to permit a chapter 13 debtor to propose a plan 
that pays postpetition interest on nondischargeable debts under 
section 1328(a), but only to the extent that the debtor has 
disposable income available to pay such interest after payment 
in full of all allowed claims. Section 213(10) amends 
Bankruptcy Code section 1325(a) to provide that if a chapter 13 
debtor is required by judicial or administrative order or 
statute to pay a domestic support obligation, then the debtor 
must pay all such obligations pursuant to such order or statute 
that became payable postpetition as a condition of 
confirmation. Section 213(11) amends Bankruptcy Code section 
1328(a) to condition the granting of a chapter 13 discharge on 
the debtor's payment of certain postpetition domestic support 
obligations.
    Sec. 214. Exceptions To Automatic Stay in Domestic Support 
Proceedings. Under current law, section 362(b)(2) of the 
Bankruptcy Code excepts from the automatic stay the 
commencement or continuation of an action or proceeding: (1) 
for the establishment of paternity; or (2) the establishment or 
modification of an order for alimony, maintenance or support. 
It also permits the collection of such obligations from 
property that is not property of the estate. Section 214 makes 
several revisions to Bankruptcy Code section 362(b)(2). First, 
it replaces the reference to ``alimony, maintenance or 
support''with ``domestic support obligations.'' Second, it adds 
to section 362(b)(2) actions or proceedings concerning: (1) 
child custody or visitation; (2) the dissolution of a marriage 
(except to the extent such proceeding seeks division of 
property that is property of the estate); and (3) domestic 
violence. Third, it permits the withholding of income that is 
property of the estate or property of the debtor for payment of 
a domestic support obligation under a judicial or 
administrative order as well as the withholding, suspension, or 
restriction of a driver's license, or a professional, 
occupational or recreational license under state law, pursuant 
to section 466(a)(16) of the Social Security Act. Fourth, it 
authorizes the reporting of overdue support owed by a parent to 
any consumer reporting agency pursuant to section 466(a)(7) of 
the Social Security Act. Fifth, it permits the interception of 
tax refunds as authorized by sections 464 and 466(a)(3) of the 
Social Security Act or analogous state law. Sixth, it allows 
medical obligations, as specified under title IV of the Social 
Security Act, to be enforced notwithstanding the automatic 
stay.
    Sec. 215. Nondischargeability of Certain Debts for Alimony, 
Maintenance, and Support. Section 215 of the Act amends 
Bankruptcy Code section 523(a)(5) to provide that a ``domestic 
support obligation'' (as defined in section 211 of the Act) is 
nondischargeable and eliminates Bankruptcy Code section 
523(a)(18). Section 215(2) amends Bankruptcy Code section 
523(c) to delete the reference to section 523(a)(15) in that 
provision. Section 215(3) amends section 523(a)(15) to provide 
that obligations to a spouse, former spouse, or a child of the 
debtor (not otherwise described in section 523(a)(5)) incurred 
in connection with a divorce or separation or related action 
are nondischargeable irrespective of the debtor's inability to 
pay such debts.
    Sec. 216. Continued Liability of Property. Section 216(1) 
of the Act amends section 522(c) of the Bankruptcy Code to make 
exempt property liable for nondischargeable domestic support 
obligations notwithstanding any contrary provision of 
applicable nonbankruptcy law. Section 216(2) and (3) make 
conforming amendments to sections 522(f)(1)(A) and 522(g)(2) of 
the Bankruptcy Code.
    Sec. 217. Protection of Domestic Support Claims Against 
Preferential Transfer Motions. Section 217 of the Act makes a 
conforming amendment to Bankruptcy Code section 547(c)(7) to 
provide that a bona fide payment of a debt for a domestic 
support obligation may not be avoided as a preferential 
transfer.
    Sec. 218. Disposable Income Defined. Section 218 of the Act 
amends section 1225(b)(2)(A) of the Bankruptcy Code to provide 
that disposable income in a chapter 12 case does not include 
payments for postpetition domestic support obligations.
    Sec. 219. Collection of Child Support. Section 219 amends 
sections 704, 1106, 1202, and 1302 of the Bankruptcy Code to 
require trustees in chapter 7, 11, 12, and 13 cases to provide 
certain notices to child support claimants and governmental 
enforcement agencies. In addition, the Act conforms internal 
statutory cross references to Bankruptcy Code section 
523(a)(14A) and deletes the reference to Bankruptcy Code 
section 523(a)(14) with respect to chapter 13, as this 
provision is inapplicable to that chapter.
    Section 219(a) requires a chapter 7 trustee to provide 
written notice to a domestic support claimant of the right to 
use the services of a state child support enforcement agency 
established under sections 464 and 466 of the Social Security 
Act in the state where the claimant resides for assistance in 
collecting child support during and after the bankruptcy case. 
The notice must include the agency's address and telephone 
number as well as explain the claimant's right to payment under 
the applicable chapter of the Bankruptcy Code. In addition, the 
trustee must provide written notice to the claimant and the 
agency of such claim and include the name, address, and 
telephone number of the child support claimant. At the time the 
debtor is granted a discharge, the trustee must notify both the 
child support claimant and the agency that the debtor was 
granted a discharge as well as supply them with the debtor's 
last known address, the last known name and address of the 
debtor's employer, and the name of each creditor holding a debt 
that is not discharged under section 523(a)(2), (4) or (14A) or 
holding a debt that was reaffirmed pursuant to Bankruptcy Code 
section 524. A claimant or agency may request the debtor's last 
known address from a creditor holding a debt that is not 
discharged under section 523(a)(2), (4) or (14A) or that is 
reaffirmed pursuant to section 524 of the Bankruptcy Code. A 
creditor who discloses such information, however, is not liable 
to the debtor or any other person by reason of such disclosure. 
Subsections (b), (c), and (d) of section 219 of the Act impose 
comparable requirements for chapter 11, 12, and 13 trustees.
    Sec. 220. Nondischargeability of Certain Educational 
Benefits and Loans. Section 220 of the Act amends section 
523(a)(8) of the Bankruptcy Code to provide that a debt for a 
qualified education loan (as defined in section 221(e)(1) of 
the Internal Revenue Code) is nondischargeable, unless 
excepting such debt from discharge would impose an undue 
hardship on the debtor and the debtor's dependents.

Subtitle C. Other Consumer Protections

    Sec. 221. Amendments To Discourage Abusive Bankruptcy 
Filings. Section 221 of the Act makes a series of amendments to 
section 110 of the Bankruptcy Code. First, section 221 
clarifies that the definition of a bankruptcy petition preparer 
does not include an attorney for a debtor or an employee of an 
attorney under the direct supervision of such attorney. Second, 
it amends subsections (b) and (c) of section 110 to provide 
that if a bankruptcy petition preparer is not an individual, 
then an officer, principal, responsible person, or partner of 
the preparer must sign certain documents filed in connection 
with the bankruptcy case as well as state the person's name and 
address on such documents. Third, it requires a bankruptcy 
petition preparer to give the debtor written notice (as 
prescribed by the Judicial Conference of the United States) 
explaining that the preparer is not an attorney and may not 
practice law or give legal advice. The notice may include 
examples of legal advice that a preparer may not provide. Such 
notice must be signed by the preparer under penalty of perjury 
and the debtor and be filed with any document for filing. 
Fourth, the petition preparer is prohibited from giving legal 
advice, including with respect to certain specified items. 
Fifth, it permits the Supreme Court to promulgate rules or the 
Judicial Conference of the United States to issue guidelines 
for setting the maximum fees that a bankruptcy petition 
preparer may charge for services. Sixth, section 221 requires 
the preparer to notify the debtor of such maximum fees. 
Seventh, it specifies that the bankruptcy petition preparer 
must certify that it complied with this notification 
requirement. Eighth, it requires the court to order the 
turnover of any fees in excess of the value of the services 
rendered by the preparer within the 12-month period preceding 
the bankruptcy filing. Ninth, section 221 provides that all 
fees charged by a preparer may be forfeited if the preparer 
fails to comply with certain requirements specified in 
Bankruptcy Code section 110, as amended by this provision. 
Tenth, it allows a debtor to exempt fees recovered under this 
provision pursuant to Bankruptcy Code section 522(b). Eleventh, 
it specifically authorizes the court to enjoin a bankruptcy 
petition preparer who has violated a court order issued under 
section 110. Twelfth, it generally revises section 110's 
penalty provisions and requires such penalties to be paid into 
a special fund of the United States trustee for the purpose of 
funding the enforcement of section 110 on a national basis. 
With respect to Bankruptcy Administrator districts, the funds 
are to be deposited as offsetting receipts pursuant to section 
1931 of title 28 of the United States Code.
    Sec. 222. Sense of Congress. Section 222 of the Act 
expresses the sense of Congress that the states should develop 
personal finance curricula for use in elementary and secondary 
schools.
    Sec. 223. Additional Amendments to Title 11, United States 
Code. Section 223 of the Act amends section 507(a) of the 
Bankruptcy Code to accord a tenth-level priority to claims for 
death or personal injuries resulting from the debtor's 
operation of a motor vehicle or vessel while intoxicated.
    Sec. 224. Protection of Retirement Savings in Bankruptcy. 
The intent of section 224 is to expand the protection for tax-
favored retirement plans or arrangements that may not be 
already protected under Bankruptcy Code section 541(c)(2) 
pursuant to Patterson v. Shumate,\74\ or other state or Federal 
law. Subsection (a) of section 224 of the Act amends section 
522 of the Bankruptcy Code to permit a debtor to exempt certain 
retirement funds to the extent those monies are in a fund or 
account that is exempt from taxation under section 401, 403, 
408, 408A, 414, 457, or 501(a) of the Internal Revenue Code and 
that have received a favorable determination pursuant to 
Internal Revenue Code section 7805 that is in effect as of the 
date of the commencement of the case. If the retirement monies 
are in a retirement fund that has not received a favorable 
determination, those monies are exempt if the debtor 
demonstrates that no prior unfavorable determination has been 
made by a court or the Internal Revenue Service, and the 
retirement fund is in substantial compliance with the 
applicable requirements of the Internal Revenue Code. If the 
retirement fund fails to be in substantial compliance with 
applicable requirements of the Internal Revenue Code, the 
debtor may claim the retirement funds as exempt if he or she is 
not materially responsible for such failure. This section also 
applies to certain direct transfers and rollover distributions. 
In addition, this provision ensures that the specified 
retirement funds are exempt under state as well as Federal law.
---------------------------------------------------------------------------
    \74\ 504 U.S. 753 (1992).
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    Section 224(b) amends section 362(b) of the Bankruptcy Code 
to except from the automatic stay the withholding of income 
from a debtor's wages pursuant to an agreement authorizing such 
withholding for the benefit of a pension, profit-sharing, stock 
bonus, or other employer-sponsored plan established under 
Internal Revenue Code section 401, 403, 408, 408A, 414, 457, or 
501(c) to the extent that the amounts withheld are used solely 
to repay a loan from a plan as authorized by section 408(b)(1) 
of the Employee Retirement Income Security Act of 1974 or 
subject to Internal Revenue Code section 72(p) or with respect 
to a loan from certain thrift savings plans. Section 224(b) 
further provides that this exception may not be used to cause 
any loan made under a governmental plan under section 414(d) or 
a contract or account under section 403(b) of the Internal 
Revenue Code to be construed to be a claim or debt within the 
meaning of the Bankruptcy Code.
    Section 224(c) amends Bankruptcy Code section 523(a) to 
except from discharge any amount owed by the debtor to a 
pension, profit-sharing, stock bonus, or other plan established 
under Internal Revenue Code section 401, 403, 408, 408A, 414, 
457, or 501(c) under a loan authorized under section 408(b)(1) 
of the Employee Retirement Income Security Act of 1974 or 
subject to Internal Revenue Code section 72(p) or with respect 
to a loan from certain thrift savings plans. Section 224(c) 
further provides that this exception to discharge may not be 
used to cause any loan made under a governmental plan under 
section 414(d) or a contract or account under section 403(b) of 
the Internal Revenue Code to be construed to be a claim or debt 
within the meaning of the Bankruptcy Code.
    Section 224(d) amends Bankruptcy Code section 1322 to 
provide that a chapter 13 plan may not materially alter the 
terms of a loan described in section 362(b)(19) and that any 
amounts required to repay such loan shall not constitute 
``disposable income'' under section 1325 of the Bankruptcy 
Code.
    Section 224(e) amends section 522 of the Bankruptcy Code to 
impose a $1 million cap (periodically adjusted pursuant to 
section 104 of the Bankruptcy Code to reflect changes in the 
Consumer Price Index) on the value of the debtor's interest in 
an individual retirement account established under either 
section 408 or 408A of the Internal Revenue Code (other than a 
simplified employee pension account under section 408(k) or a 
simple retirement account under section 408(p) of the Internal 
Revenue Code) that a debtor may claim as exempt property. This 
limit applies without regard to amounts attributable to 
rollover contributions made pursuant to section 402(c), 
402(e)(6), 403(a)(4), 403(a)(5), or 403(b)(8) of the Internal 
Revenue Code and earnings thereon. The cap may be increased if 
required in the interest of justice.
    Sec. 225. Protection of Education Savings in Bankruptcy. 
Subsection (a) of section 225 of the Act amends section 541 of 
the Bankruptcy Code to provide that funds placed not later than 
365 days before the filing of the bankruptcy case in a 
education individual retirement account are not property of the 
estate if certain criteria are met. First, the designated 
beneficiary of such account must be a child, stepchild, 
grandchild or step-grandchild of the debtor for the taxable 
year during which funds were placed in the account. A legally 
adopted child or a foster child, under certain circumstances, 
may also qualify as a designated beneficiary. Second, such 
funds may not be pledged or promised to an entity in connection 
with any extension of credit and they may not be excess 
contributions (as described in section 4973(e) of the Internal 
Revenue Code). Funds deposited between 720 days and 365 days 
before the filing date are protected to the extent they do not 
exceed $5,000. Similar criteria apply with respect to funds 
used to purchase a tuition credit or certificate or to funds 
contributed to a qualified state tuition plan under section 
529(b)(1)(A) of the Internal Revenue Code. Section 225(b) 
amends Bankruptcy Code section 521 to require a debtor to file 
with the court a record of any interest that the debtor has in 
an education individual retirement account or qualified state 
tuition program.
    Sec. 226. Definitions. Subsection (a) of section 226 of the 
Act amends section 101 of the Bankruptcy Code to add certain 
definitions with respect to debt relief agencies. Section 
226(a)(1) defines an ``assisted person'' as a person whose 
debts consist primarily of consumer debts and whose nonexempt 
assets are less than $150,000. Section 226(a)(2) defines 
``bankruptcy assistance'' as any goods or services sold or 
otherwise provided with the express or implied purpose of 
giving information, advice, or counsel; preparing documents for 
filing; or attending a meeting of creditors pursuant to section 
341; appearing in a proceeding on behalf of a person; or 
providing legal representation in a case or proceeding under 
the Bankruptcy Code. Section 226(a)(3) defines a ``debt relief 
agency'' as any person (including a bankruptcy petition 
preparer) who provides bankruptcy assistance to an assisted 
person in return for the payment of money or other valuable 
consideration. The definition specifically excludes certain 
entities. First, it does not apply to a nonprofit organization 
exemption from taxation under section 501(c)(3) of the Internal 
Revenue Code. Second, it is inapplicable to a creditor who 
assisted such person to the extent the assistance pertained to 
the restructuring of any debt owed by the person to the 
creditor. Third, the definition does not apply to a depository 
institution (as defined in section 3 of the Federal Deposit 
Insurance Act), or any Federal or state credit union (as 
defined in section 101 of the Federal Credit Union Act), as 
well as any affiliate or subsidiary of such depository 
institution or credit union. Fourth, an author, publisher, 
distributor, or seller of works subject to copyright protection 
under title 17 of the United States Code when acting in such 
capacity is not within the ambit of this definition.
    Section 226(b) amends section 104(B)(1) of the Bankruptcy 
Code to permit the monetary amount set forth in the definition 
of an ``assisted person'' to be automatically adjusted to 
reflect the change in the Consumer Price Index.
    Sec. 227. Restrictions on Debt Relief Agencies. Section 227 
of the Act creates a new provision in the Bankruptcy Code 
intended to proscribe certain activities of a debt relief 
agency. It prohibits such agency from: (1) failing to perform 
any service that it informed an assisted person it would 
provide; (2) advising an assisted person to make an untrue and 
misleading statement (or that upon the exercise of reasonable 
case, should have been known to be untrue or misleading) in a 
document filed in a bankruptcy case; (3) misrepresenting the 
services it provides and the benefits that an assisted person 
may receive as a result of bankruptcy; and (4) advising an 
assisted person or prospective assisted person to incur 
additional debt in contemplation of filing for bankruptcy 
relief or for the purpose of paying fees for services rendered 
by an attorney or petition preparer in connection with the 
bankruptcy case. Any waiver by an assisted person of the 
protections under this provision are unenforceable, except 
against a debt relief agency.
    In addition, section 227 imposes penalties for the 
violation of section 526, 527 or 528 of the Bankruptcy Code. 
First, any contract between a debt relief agency and an 
assisted person that does not comply with these provisions is 
void and may not be enforced by any state or Federal court or 
by any person, except an assisted person. Second, a debt relief 
agency is liable to an assisted person, under certain 
circumstances, for any fees or charges paid by such person to 
the agency, actual damages, and reasonable attorneys' fees and 
costs. The chief law enforcement officer of a state who has 
reason to believe that a person has violated or is violating 
section 526 may seek to have such violation enjoined and 
recover actual damages. Third, section 227 provides that the 
United States district court has concurrent jurisdiction of 
certain actions under section 526. Fourth, section 227 provides 
that sections 526, 527 and 528 preempt inconsistent state law. 
In addition, it provides that these provisions do not limit or 
curtail the authority of a Federal court, a state, or a 
subdivision or instrumentality of a state, to determine and 
enforce qualifications for the practice of law before the 
Federal court or under the laws of that state.
    Sec. 228. Disclosures. Section 228 of the Act requires a 
debt relief agency to provide certain specified written notices 
to an assisted person. These include the notice required under 
section 342(b)(1) (as amended by this Act) as well as a notice 
advising that: (1) all information the assisted person provides 
in connection with the case must be complete, accurate and 
truthful; (2) all assets and liabilities must be completely and 
accurately disclosed in the documents filed to commence the 
case, including the replacement value of each asset (if 
required) after reasonable inquiry to establish such value; (3) 
current monthly income, monthly expenses and, in a chapter 13 
case, disposable income, must be stated after reasonable 
inquiry; and (4) the information an assisted person provides 
may be audited and that the failure to provide such information 
may result in dismissal of the case or other sanction 
including, in some instances, criminal sanctions. In addition, 
the agency must supply certain specified advisories and 
explanations regarding the bankruptcy process. Further, this 
provision requires the agency to advise an assisted person (to 
the extent permitted under nonbankruptcy law) concerning asset 
valuation, the calculation of disposable income, and the 
determination of exempt property.
    Sec. 229. Requirements for Debt Relief Agencies. Section 
229 adds a provision to the Bankruptcy Code requiring a debt 
relief agency--not later than five business days after the 
first date on which it provides any bankruptcy assistance 
services to an assisted person (but prior to such assisted 
person's bankruptcy petition being filed)--to execute a written 
contract with the assisted person. The contract must specify 
clearly and conspicuously the services the agency will provide, 
the basis on which fees will be charged for such services, and 
the terms of payment. The assisted person must be given a copy 
of the fully executed and completed contract in a form the 
person can retain. The debt relief agency must include certain 
specified mandatory statements in any advertisement of 
bankruptcy assistance services or regarding the benefits of 
bankruptcy that is directed to the general public whether 
through the general media, seminars, specific mailings, 
telephonic or electronic messages, or otherwise.
    Sec. 230. GAO Study. Section 230 of the Act directs the 
Comptroller General of the United States to study and prepare a 
report on the feasibility, efficacy and cost of requiring 
trustees to supply certain specified information about a 
debtor's bankruptcy case to the Office of Child Support 
Enforcement for the purpose of determining whether a debtor has 
outstanding child support obligations.
    Sec. 231. Protection of Personally Identifiable 
Information. Section 231 of the Act clarifies that it applies 
to personally identifiable information and does not preempt 
applicable nonbankruptcy law. In addition, the provision 
specifies that court approval must be preceded by the 
appointment of a privacy ombudsman to effectuate the intent of 
this provision.
    Subsection (a) amends Bankruptcy Code section 363(b)(1) to 
provide that if a debtor, in connection with offering a product 
or service, discloses to an individual a policy prohibiting the 
transfer of personally identifiable information to persons 
unaffiliated with the debtor, and the policy is in effect at 
the time of the bankruptcy filing, then the trustee may not 
sell or lease such information unless either of the following 
conditions is satisfied: (1) the sale is consistent with such 
policy; or (2) the court, after appointment of a consumer 
privacy ombudsman (pursuant to section 332 of the Bankruptcy 
Code, as amended) and notice and hearing, the court approves 
the sale or lease upon due consideration of the facts, 
circumstances, and conditions of the sale or lease.
    Section 231(b) amends Bankruptcy Code section 101 to add a 
definition of ``personally identifiable information.'' The term 
applies to information provided by an individual to the debtor 
in connection with obtaining a product or service from the 
debtor primarily for personal, family, or household purposes. 
It includes the individual's: (1) first name or initial and 
last name (whether given at birth or adoption or legally 
changed); (2) physical home address; (3) electronic address, 
including an e-mail address; (4) home telephone number; (5) 
Social Security account number; or (vi) credit card account 
number. The term also includes information if it is identified 
in connection with the above items: (1) an individual's birth 
date, birth or adoption certificate number, or place of birth; 
or (2) any other information concerning an identified 
individual that, if disclosed, will result in the physical or 
electronic contacting or identification of that person.
    Sec. 232. Consumer Privacy Ombudsman. Section 232 
implements the preceding provision of the Act with respect to 
the appointment and responsibilities of a consumer privacy 
ombudsman. It provides that if a hearing is required under 
section 363(b)(1)(B) (as amended), the court must order the 
United States trustee to appoint a disinterested person to 
serve as the consumer privacy ombudsman and to provide timely 
notice of the hearing to such person. It permits the ombudsman 
to appear and be heard at such hearing. The ombudsman must 
provide the court with information to assist its consideration 
of the facts, circumstances and conditions of the proposed sale 
or lease of personally identifiable information. The 
information may include a presentation of the debtor's privacy 
policy, potential losses or gains of privacy to consumers if 
the sale or lease is approved, potential costs or benefits to 
consumers if the sale or lease is approved, and possible 
alternatives that would mitigate potential privacy losses or 
costs to consumers. Section 232 prohibits the ombudsman from 
disclosing any personally identifiable information obtained in 
the case by such individual. In addition, the provision amends 
Bankruptcy Code section 330(a)(1) to permit an ombudsman to be 
compensated.
    Sec. 233. Prohibition on Disclosure of Name of Minor 
Children. Section 233 of the Act adds a new provision to the 
Bankruptcy Code (section 112) specifying that a debtor may be 
required to provide information regarding his or her minor 
child in connection with the bankruptcy case, but such debtor 
may not be required to disclose in the public records the 
child's name. It provides, however, that the debtor may be 
required to disclose this information in a nonpublic record 
maintained by the court, which must be available for inspection 
by the United States trustee, trustee or an auditor, if any. 
Section 233 prohibits the court, United States trustee, 
trustee, or auditor from disclosing such minor child's name. 
Section 233 clarifies that the prohibition against disclosure 
pertains to the minor child's name.

                TITLE III. DISCOURAGING BANKRUPTCY ABUSE

    Sec. 301. Technical Amendments. Section 301 of the Act 
makes a clarifying amendment to section 523(a)(17) of the 
Bankruptcy Code concerning the dischargeability of court fees 
incurred by prisoners. Section 523(a)(17) was added to the 
Bankruptcy Code by the Omnibus Consolidated Rescissions and 
Appropriations Act of 1996 \75\ to except from discharge the 
filing fees and related costs and expenses assessed by a court 
in a civil case or appeal. As the result of a drafting error, 
however, this provision might be construed to apply to filing 
fees, costs or expenses incurred by any debtor, not solely by 
those who are prisoners. The amendment eliminates this 
ambiguity and makes other conforming changes to narrow its 
application in accordance with its original intent.
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    \75\ Pub. L. No. 104-134, Sec. 804(b) (1996).
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    Sec. 302. Discouraging Bad Faith Repeat Filings. Section 
302 of the Act amends section 362(c) of the Bankruptcy Code to 
terminate the automatic stay within 30 days in a chapter 7, 11, 
or 13 case filed by or against an individual if such individual 
was a debtor in a previously dismissed case pending within the 
preceding 1-year period. The provision does not apply to a case 
refiled under a chapter other than chapter 7 after dismissal of 
the prior chapter 7 case pursuant to section 707(b) of the 
Bankruptcy Code. Upon motion of a party in interest, the court 
may continue the automatic stay after notice and a hearing 
completed prior to the expiration of the 30-day period if such 
party demonstrates that the latter case was filed in good faith 
as to the creditors who are stayed by the filing.
    For purposes of this provision, a case is presumptively not 
filed in good faith as to all creditors (but such presumption 
may be rebutted by clear and convincing evidence) if: (1) more 
than one bankruptcy case under chapter 7, 11 or 13 was 
previously filed by the debtor within the preceding 1-year 
period; (2) the prior chapter 7, 11, or 13 case was dismissed 
within the preceding year for the debtor's failure to (a) file 
or amend without substantial excuse a document required under 
the Bankruptcy Code or the court, (b) provide adequate 
protection ordered by the court, or (c) perform the terms of a 
confirmed plan; or (3) there has been no substantial change in 
the debtor's financial or personal affairs since the dismissal 
of the prior case, or there is no reason to conclude that the 
pending case will conclude either with a discharge (if a 
chapter 7 case) or confirmation (if a chapter 11 or 13 case). 
In addition, section 302 provides that a case is presumptively 
deemed not to be filed in good faith as to any creditor who 
obtained relief from the automatic stay in the prior case or 
sought such relief in the prior case and such action was 
pending at the time of the prior case's dismissal. The 
presumption may be rebutted by clear and convincing evidence. A 
similar presumption applies if two or more bankruptcy cases 
were pending in the 1-year preceding the filing of the pending 
case.
    Sec. 303. Curbing Abusive Filings. Section 303 of the Act 
is intended to reduce abusive filings. Subsection (a) amends 
Bankruptcy Code section 362(d) to add a new ground for relief 
from the automatic stay. Under this provision, cause for relief 
from the automatic stay may be established for a creditor whose 
claim is secured by an interest in real property, if the court 
finds that the filing of the bankruptcy case was part of a 
scheme to delay, hinder and defraud creditors that involved 
either: (1) a transfer of all or part of an ownership interest 
in real property without such creditor's consent or without 
court approval; or (2) multiple bankruptcy filings affecting 
the real property. If recorded in compliance with applicable 
state law governing notice of an interest in or a lien on real 
property, an order entered under this provision is binding in 
any other bankruptcy case for 2 years from the date of entry of 
such order. A debtor in a subsequent case may move for relief 
based upon changed circumstances or for good cause shown after 
notice and a hearing. Section 303(a) further provides that any 
federal, state or local governmental unit that accepts a notice 
of interest or a lien in real property, must accept a certified 
copy of an order entered under this provision.
    Section 303(b) amends Bankruptcy Code section 362(b) to 
except from the automatic stay an act to enforce any lien 
against or security interest in real property within 2 years 
following the entry of an order entered under section 
362(d)(4). A debtor, in a subsequent case, may move for relief 
from such order based upon changed circumstances or for other 
good cause shown after notice and a hearing. Section 303(b) 
also provides that the automatic stay does not apply in a case 
where the debtor: (1) is ineligible to be a debtor in a 
bankruptcy case pursuant to section 109(g) of the Bankruptcy 
Code; or (2) filed the bankruptcy case in violation of an order 
issued in a prior bankruptcy case prohibiting the debtor from 
being a debtor in a subsequent bankruptcy case.
    Sec. 304. Debtor Retention of Personal Property Security. 
Section 304(1) of the Act amends section 521(a) of the 
Bankruptcy Code to provide that an individual who is a chapter 
7 debtor may not retain possession of personal property 
securing, in whole or in part, a purchase money security 
interest unless the debtor, within 45 days after the first 
meeting of creditors, enters into a reaffirmation agreement 
with the creditor, or redeems the property. If the debtor fails 
to so act within the prescribed period, the property is not 
subject to the automatic stay and is no longer property of the 
estate. An exception applies if the court: (1) determines on 
motion of the trustee filed before the expiration of the 45-day 
period that the property has consequential value or would 
benefit the bankruptcy estate; (2) orders adequate protection 
of the creditor's interest; and (iii) directs the debtor to 
deliver any collateral in the debtor's possession. Section 
304(2) amends section 722 to clarify that a chapter 7 debtor 
must pay the redemption value in full at the time of 
redemption.
    Sec. 305. Relief from the Automatic Stay When the Debtor 
Does Not Complete Intended Surrender of Consumer Debt 
Collateral. Paragraph (1) of section 305 of the Act amends 
Bankruptcy Code section 362 to terminate the automatic stay 
with respect to personal property of the estate or of the 
debtor in a chapter 7, 11, or 13 case (where the debtor is an 
individual) that secures a claim (in whole or in part) or is 
subject to an unexpired lease if the debtor fails to: (1) file 
timely a statement of intention as required by section 
521(a)(2) of the Bankruptcy Code with respect to such property; 
or (2) indicate in such statement whether the property will be 
surrendered or retained, and if retained, whether the debtor 
will redeem the property or reaffirm the debt, or assume an 
unexpired lease, if the trustee does not. Likewise, the 
automatic stay is terminated if the debtor fails to take the 
action specified in the statement of intention in a timely 
manner, unless the statement specifies reaffirmation and the 
creditor refuses to enter into the reaffirmation agreement on 
the original contract terms. In addition to terminating the 
automatic stay, this provision renders such property no longer 
property of the estate An exception pertains where the court 
determines, on the motion of the trustee made prior to the 
expiration of the applicable time period under section 
521(a)(2), and after notice and a hearing, that such property 
is of consequential value or benefit to the estate, orders 
adequate protection of the creditor's interest, and directs the 
debtor to deliver any collateral in the debtor's possession.
    Section 305(2) amends section 521 of the Bankruptcy Code to 
make the requirement to file a statement of intention 
applicable to all secured debts, not just secured consumer 
debts. In addition, it requires the debtor to effectuate his or 
her stated intention within 30 days from the first date set for 
the meeting of creditors. If the debtor fails to timely 
undertake certain specified actions with respect to property 
that a lessor or bailor owns and has leased, rented or bailed 
to the debtor or in which a creditor has a security interest 
(not otherwise avoidable under section 522(f), 544, 545, 547, 
548 or 549 of the Bankruptcy Code), then nothing in the 
Bankruptcy Code shall prevent or limit the operation of a 
provision in a lease or agreement that places the debtor in 
default by reason of the debtor's bankruptcy or insolvency.
    Sec. 306. Giving Secured Creditors Fair Treatment in 
Chapter 13. Subsection (a) of section 306 of the Act amends 
Bankruptcy Code section 1325(a)(5)(B)(i) to require--as a 
condition of confirmation--that a chapter 13 plan provide that 
a secured creditor retain its lien until the earlier of when 
the underlying debt is paid or the debtor receives a discharge. 
If the case is dismissed or converted prior to completion of 
the plan, the secured creditor is entitled to retain its lien 
to the extent recognized under applicable nonbankruptcy law.
    Section 306(b) adds a new paragraph to section 1325(a) of 
the Bankruptcy Code specifying that Bankruptcy Code section 506 
does not apply to a debt incurred within the two and one-half 
year period preceding the filing of the bankruptcy case if the 
debt is secured by a purchase money security interest in a 
motor vehicle acquired for the personal use of the debtor. 
Where the collateral consists of any other type of property 
having value, section 306(b) provides that section 506 of the 
Bankruptcy Code does not apply if the debt was incurred during 
the 1-year period preceding the filing of the bankruptcy case.
    Section 306(c)(1) amends section 101 of the Bankruptcy Code 
to define the term ``debtor's principal residence'' as a 
residential structure (including incidental property) without 
regard to whether or not such structure is attached to real 
property. The term includes an individual condominium or 
cooperative unit as well as a mobile or manufactured home, and 
a trailer.
    Section 306(c)(2) amends section 101 of the Bankruptcy Code 
to define the term ``incidental property'' as property commonly 
conveyed with a principal residence in the area where the real 
property is located. The term includes all easements, rights, 
appurtenances, fixtures, rents, royalties, mineral rights, oil 
or gas rights or profits, water rights, escrow funds, and 
insurance proceeds. Further, the term encompasses all 
replacements and additions.
    Sec. 307. Domiciliary Requirements for Exemptions. Section 
307 of the Act amends section 522(b)(2)(A) of the Bankruptcy 
Code to extend the time that a debtor must be domiciled in a 
state from 180 days to 730 days before he or she may claim that 
state's exemptions. If the debtor's domicile has not been 
located in a single state for the 730-day period, then the 
state where the debtor was domiciled in the 180-day period 
preceding the 730-day period (or the longer portion of such 
180-day period) controls. If the effect of this provision is to 
render the debtor ineligible for any exemption, the debtor may 
elect to exempt property of the kind described in the Federal 
exemption notwithstanding state opt out.
    Sec. 308. Reduction of Homestead Exemption for Fraud. 
Section 308 amends section 522 of the Bankruptcy Code to reduce 
the value of a debtor's interest in the following property that 
may be claimed as exempt under certain circumstances: (i) real 
or personal property that the debtor or a dependent of the 
debtor uses as a residence, (ii) a cooperative that owns 
property that the debtor or a dependent of the debtor uses as a 
residence, (iii) a burial plot, or (iv) real or personal 
property that the debtor or dependent of the debtor claims as a 
homestead. Where nonexempt property is converted to the above-
specified exempt property within the 10-year period preceding 
the filing of the bankruptcy case, the exemption must be 
reduced to the extent such value was acquired with the intent 
to hinder, delay or defraud a creditor.
    Sec. 309. Protecting Secured Creditors in Chapter 13 Cases. 
Section 309(a) of the Act amends Bankruptcy Code section 
348(f)(1)(B) to provide that valuations of property and allowed 
secured claims in a chapter 13 case only apply if the case is 
subsequently converted to one under chapter 11 or 12. If the 
chapter 13 case is converted to one under chapter 7, then the 
creditor holding security as of the petition date shall 
continue to be secured unless its claim was paid in full as of 
the conversion date. In addition, unless a prebankruptcy 
default has been fully cured at the time of conversion, then 
the default in any bankruptcy proceeding shall have the effect 
given under applicable nonbankruptcy law.
    Section 309(b) amends section 365 of the Bankruptcy Code to 
provide that if a lease of personal property is rejected or not 
assumed by the trustee in a timely manner, such property is no 
longer property of the estate and the automatic stay under 
section 362 with respect to such property is terminated. With 
regard to a chapter 7 case in which the debtor is an 
individual, the debtor may notify the creditor in writing of 
his or her desire to assume the lease. Upon being so notified, 
the creditor may, at its option, inform the debtor that it is 
willing to have the lease assumed and condition such assumption 
on cure of any outstanding default on terms set by the 
contract. If within 30 days after such notice the debtor gives 
written notice to the lessor that the lease is assumed, the 
debtor (not the bankruptcy estate) assumes the liability under 
the lease. Section 309(b) provides that the automatic stay of 
section 362 and the discharge injunction of section 524 are not 
violated if the creditor notifies the debtor and negotiates a 
cure under section 365(p)(2) (as amended). In a chapter 11 or 
13 case where the debtor is an individual lessee with respect 
to a personal property lease and the lease is not assumed in 
the confirmed plan, the lease is deemed rejected as of the 
conclusion of the confirmation hearing. If the lease is 
rejected, the automatic stay under section 362 as well as the 
chapter 13 codebtor stay under section 1301 are automatically 
terminated with respect to such property.
    Section 309(c)(1) amends Bankruptcy Code section 
1325(a)(5)(B) to require that periodic payments pursuant to a 
chapter 13 plan with respect to a secured claim be made in 
equal monthly installments. Where the claim is secured by 
personal property, the amount of such payments shall not be 
less than the amount sufficient to provide adequate protection 
to the holder of such claim. Section 309(c)(2) amends section 
1326(a) of the Bankruptcy Code to require a chapter 13 debtor 
to commence making payments within 30 days after the filing of 
the plan or the order for relief, whichever is earlier. The 
amount of such payment must be the amount proposed in the plan, 
scheduled in a personal property lease for that portion of the 
obligation that becomes due postpetition (which amount shall 
reduce the payment required to be made to such lessor pursuant 
to the plan), and provides adequate protection directly to a 
creditor holding an allowed claim secured by personal property 
to the extent the claim is attributable to the purchase of such 
property (which amount shall reduce the payment required to be 
made to such secured creditor pursuant to the plan). Payments 
made pursuant to a plan must be retained by the chapter 13 
trustee until confirmation or denial of confirmation. Section 
309(c)(2) provides that if the plan is confirmed, the trustee 
must distribute payments received from the debtor as soon as 
practicable in accordance with the plan. If the plan is not 
confirmed, the trustee must return to the debtor payments not 
yet due and owing to creditors. Pending confirmation and 
subject to section 363, the court, after notice and a hearing, 
may modify the payments required under this provision. Section 
309(c)(2) requires the debtor, within 60 days following the 
filing of the bankruptcy case, to provide reasonable evidence 
of any required insurance coverage with respect to the use or 
ownership of leased personal property or property securing, in 
whole or in part, a purchase money security interest.
    Sec. 310. Limitation on Luxury Goods. Section 310 amends 
section 523(a)(2)(C) of the Bankruptcy Code. Under current law, 
consumer debts owed to a single creditor that, in the 
aggregate, exceed $1,075 for luxury goods or services incurred 
within 60 days before the commencement of the case are presumed 
to be nondischargeable. As amended, the presumption applies if 
the aggregate amount of consumer debts for luxury goods or 
services is more than $500 for luxury goods or services 
incurred by an individual debtor within 90 days before the 
order for relief. With respect to cash advances, current law 
provides that cash advances aggregating more than $1,075 that 
are extensions of consumer credit under an open-end credit plan 
obtained by an individual debtor within 60 days before the case 
is filed are presumed to be nondischargeable. As amended, 
section 523(a)(2)(C) presumes that cash advances aggregating 
more than $750 and that are incurred within 70 days are 
nondischargeable. The term, ``luxury goods or services,'' does 
not include goods or services reasonably necessary for the 
support or maintenance of the debtor or a dependent of the 
debtor. In addition, ``an extension of consumer credit under an 
open-end credit plan'' has the same meaning as this term has 
under the Consumer Credit Protection Act.
    Sec. 311. Automatic Stay. Section 311 of the Act amends 
section 362(b) of the Bankruptcy Code to except from the 
automatic stay a judgment of eviction with respect to a 
residential leasehold. It is the intent of this provision to 
create an exception to the automatic stay of section 362(a)(3) 
to permit the recovery of possession by rental housing 
providers of their property in certain circumstances where a 
judgment for possession has been obtained against a debtor/
resident before the filing of the petition for bankruptcy. 
Section 311 is intended to apply to manufactured housing 
communities, where tenants own their own homes and pay monthly 
rent to community owners for the land upon which their home 
sits. Tenants who fail to pay rent for the land beneath their 
homes located in manufactured housing communities would no 
longer be able to avoid their rental obligations under the 
protection of the automatic stay. It is also the intent of this 
section to permit eviction actions based on illegal use of 
controlled substances or endangering property to continue or to 
be commenced after the filing of the petition, in certain 
circumstances.
    Section 311 gives tenants a reasonable amount of time after 
filing the petition to cure the default giving rise to the 
judgment for possession as long as there are circumstances in 
which applicable non-bankruptcy law allows a default to be 
cured after a judgment has been obtained. Where non-bankruptcy 
law applicable in the jurisdiction does not permit a tenant to 
cure a monetary default after the judgment for possession has 
been obtained, the automatic stay of section 362(a)(3) does not 
operate to limit action by a rental housing provider to proceed 
with, or a marshal, sheriff, or similar local officer to 
execute, the judgment for possession. Where the debtor claims 
that applicable law permits a tenant to cure after the judgment 
for possession has been obtained, the automatic stay operates 
only where the debtor files a certification with the bankruptcy 
petition asserting that applicable law permits such action and 
that the debtor or an adult dependent of the debtor has paid to 
the court all rent that will come due during the 30 days 
following the filing of the petition. If, within thirty days 
following the filing of the petition, the debtor or an adult 
dependent of the debtor certifies that the entire monetary 
default that gave rise to the judgment for possession has been 
cured, the automatic stay remains in effect. If a lessor has 
filed or wishes to file an eviction action based on the use of 
illegal controlled substances or property endangerment, the 
section allows the lessor in certain cases to file a 
certification of such circumstance with the court and obtain an 
exception to the stay.
    For both the judgment based on monetary default and the 
controlled substance or endangerment exceptions, the section 
provides an opportunity for challenge by either the lessor or 
the tenant to certifications filed by the other party and a 
timely hearing for the court to resolve any disputed facts and 
rule on the factual or legal sufficiency of the certifications. 
Where the court finds for the lessor, the clerk shall 
immediately serve upon the parties a copy of the court's order 
confirming that an exception to the automatic stay is 
applicable. Where the court finds for the tenant, the stay 
shall remain in effect. It is the intent of this section that 
the clerk's certified copy of the docket or order shall be 
sufficient evidence that the exception under paragraph 22 or 
paragraph 23 is applicable for a marshal, sheriff, or similar 
local officer to proceed immediately to execute the judgment 
for possession if applicable law otherwise permits such action, 
or for an eviction action for use of illegal controlled 
substances or property endangerment to proceed. This section 
does not provide any new right to either landlords or tenants 
relating to evictions or defenses to eviction under otherwise 
applicable law.
    Section 311 also excepts from the automatic stay a transfer 
that is not avoidable under Bankruptcy Code section 544 and 
that is not avoidable under Bankruptcy Code section 548. This 
amendment responds to a 1997 Ninth Circuit case in which two 
purchase money lenders (without knowledge that the debtor had 
recently filed and undisclosed chapter 11 case that was later 
converted to chapter 7), funded the debtor's acquisition of an 
apartment complex and recorded their purchase-money deed of 
trust immediately following recordation of the deed to the 
debtors.\76\
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    \76\ Thompson v. Margen (In re McConville), 110 F.3d 47 (9th Cir.), 
cert. denied, 522 U.S. 966 (1997). The bankruptcy trustee sought to 
avoid the lien created by the lenders' deed of trust by asserting that 
the deed was an unauthorized, postpetition transfer under Bankruptcy 
Code section 549(a). The lenders claimed that the voluntary transfer to 
them was a transfer of real property to good faith purchasers for 
value, which thereby excepted it, under Bankruptcy Code section 549(c) 
from avoidance. The bankruptcy court held that the postpetition 
recordation of the lenders' deed of trust was without authorization 
under the Bankruptcy Code or by the court and was therefore avoidable 
under section 549(a) and that the lenders did not qualify under the 
section 549(c) exception as good faith purchasers of real property for 
value. The District Court subsequently affirmed the bankruptcy court's 
ruling granting the trustee the authority to avoid the lenders' lien. 
McConville v. David Margen and Lawton Associates (In re McConville), 
No. C 94-3308, 1994 U.S. Dist. Lexis 18095 (N.D. Cal. Dec. 14, 1994). 
On appeal, the lower court's decision in McConville was initially 
affirmed. Thompson v. Margen (In re McConville), 84 F.3d 340 (9th Cir. 
1996). The Ninth Circuit, however, subsequently issued an amended 
opinion, also affirming the lower court, Thompson v. Margen (**In re** 
McConville), 97 F.3d 316 (9th Cir. 1996), and finally issued an opinion 
withdrawing its prior opinion and deciding the case on other grounds. 
It held that by obtaining secured credit from the lenders after filing 
but before the appointment of a trustee, the debtors violated their 
fiduciary responsibility to their creditors. Thompson v. Margen (In re 
McConville), 110 F.3d 47 (9th Cir. 1997).
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    Sec. 312. Extension of Period Between Bankruptcy 
Discharges. Section 312 of the Act amends section 727(a)(8) of 
the Bankruptcy Code to extend the period before which a chapter 
7 debtor may receive a subsequent chapter 7 discharge from six 
to 8 years. It also amends section 1328 to prohibit the 
issuance of a discharge in a subsequent chapter 13 case if the 
debtor received a discharge in a prior chapter 7, 11, or 12 
case within 4 years preceding the filing of the subsequent 
chapter 13 case.
    Sec. 313. Definition of Household Goods and Antiques. 
Subsection (a) of section 313 of the Act amends section 522(f) 
of the Bankruptcy Code to codify a modified version of the 
Federal Trade Commission's definition of ``household goods'' 
for purposes of the avoidance of a nonpossessory, nonpurchase 
money lien in such property. It also specifies various items 
that are expressly not household goods. Section 313(b) requires 
the Director of the Executive Office for United States Trustees 
to prepare a report containing findings with respect to the use 
of this definition. The report may include recommendations for 
amendments to the definition of ``household goods'' as codified 
in section 522(f)(4). Section 313 specifies a monetary 
threshold for the exclusions pertaining to electronic 
entertainment equipment, antiques, and jewelry. In addition, it 
provides that works of art are not household goods, unless by 
or of the debtor or by any relative of the debtor.
    Sec. 314. Debt Incurred To Pay Nondischargeable Debts. 
Subsection (a) of section 314 of the Act amends section 523(a) 
of the Bankruptcy Code to make a debt incurred to pay a 
nondischargeable tax owed to a governmental unit (other than a 
tax owed to the United States) nondischargeable. Section 314(b) 
amends section 1328(a) of the Bankruptcy Code to make the 
following additional debts nondischargeable in a chapter 13 
case: (1) debts for money, property, services, or extensions of 
credit obtained through fraud or by a false statement in 
writing under section 523(a)(2)(A) and (B) of the Bankruptcy 
Code; (2) consumer debts owed to a single creditor that 
aggregate to more than $500 for luxury goods or services 
incurred by an individual debtor within 90 days before the 
filing of the bankruptcy case, and cash advances aggregating 
more than $750 that are extensions of consumer credit obtained 
by a debtor under an open-end credit plan within 70 days before 
the order for relief under section 523(a)(2)(C) (as amended); 
(3) pursuant to section 523(a)(3) of the Bankruptcy Code, debts 
that require timely request for a dischargeability 
determination, if the creditor lacks notice or does not have 
actual knowledge of the case in time to make such request; (4) 
debts resulting from fraud or defalcation by the debtor acting 
as a fiduciary under section 523(a)(4) of the Bankruptcy Code; 
and (5) debts for restitution or damages, awarded in a civil 
action against the debtor as a result of willful or malicious 
conduct by the debtor that caused personal injury to an 
individual or the death of an individual.
    Sec. 315. Giving Creditors Fair Notice in Chapters 7 and 13 
Cases. Section 315 of the Act amends several provisions of the 
Bankruptcy Code. Subsection (a) amends Bankruptcy Co