[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 540 Referred in House (RFH)]
103d CONGRESS
2d Session
S. 540
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 26, 1994
Referred to the Committee on the Judiciary
_______________________________________________________________________
AN ACT
To improve the administration of the bankruptcy system, address certain
commercial issues and consumer issues in bankruptcy, and establish a
commission to study and make recommendations on problems with the
bankruptcy system, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title Improvement.--This Act may be cited as the
``Bankruptcy Amendments Act of 1994''.
(b) Table of Contents.--The table of contents is as follows:
Sec. 1. Short title; table of contents.
TITLE I--IMPROVED BANKRUPTCY ADMINISTRATION
Sec. 101. Expedited hearing on automatic stay.
Sec. 102. Expedited filing of plans under chapter 11.
Sec. 103. Expedited procedure for reaffirmation of debts.
Sec. 104. Powers of bankruptcy courts.
Sec. 105. Participation by bankruptcy administrator at meetings of
creditors and equity security holders.
Sec. 106. Definition relating to eligibility to serve on chapter 11
committees.
Sec. 107. Increased incentive compensation for trustees.
Sec. 108. Dollar adjustments.
Sec. 109. Premerger notification.
Sec. 110. Allowance of creditor committee expenses.
Sec. 111. Judicial conference report.
Sec. 112. Service of process in bankruptcy proceedings on an insured
depository institution.
Sec. 113. Meetings of creditors and equity security holders.
Sec. 114. Tax assessment.
Sec. 115. Additional trustee compensation.
Sec. 116. Extension to certain judicial officials of life insurance
rules currently applicable to Federal
judges.
Sec. 117. Settlement of claims and demands for payment.
Sec. 118. Recommendations of the judicial conference for the
appointment of bankruptcy judges.
TITLE II--COMMERCIAL ISSUES IN BANKRUPTCY
Sec. 201. Small businesses.
Sec. 202. Single asset real estate.
Sec. 203. Aircraft equipment, vessels, and rolling stock equipment.
Sec. 204. Unexpired leases of personal property in chapter 11 cases.
Sec. 205. Protection of assignees of executory contracts and unexpired
leases approved by court order in cases
reversed on appeal.
Sec. 206. Protection of security interest in post-petition rents.
Sec. 207. Anti-alienation.
Sec. 208. Exemption.
Sec. 209. Indenture trustee compensation.
Sec. 210. Payment of taxes with borrowed funds.
Sec. 211. Return of goods.
Sec. 212. Exception to discharge.
Sec. 213. Proceeds of money order agreements.
Sec. 214. Limitation on liability of noninsider transferee for avoided
transfer.
Sec. 215. Perfection of purchase-money security interest.
Sec. 216. Airport gate leases.
Sec. 217. Trustee duties.
Sec. 218. Payments.
Sec. 219. Continued perfection.
Sec. 220. Notices to creditors.
Sec. 221. Supplemental injunctions.
Sec. 222. Rejection of unexpired leases of real property or timeshare
interests.
Sec. 223. Contents of plan.
Sec. 224. Priority for independent sales representatives.
Sec. 225. Amend Bankruptcy Code.
TITLE III--CONSUMER BANKRUPTCY ISSUES
Sec. 301. Period for curing default relating to principal residence.
Sec. 302. Nondischargeability of fine under chapter 13.
Sec. 303. Impairment of exemptions.
Sec. 304. Protection of child support and alimony.
Sec. 305. Bankruptcy petition preparers.
Sec. 306. Conversion or dismissal.
Sec. 307. Contents of plan.
Sec. 308. Stay of action against codebtor.
Sec. 309. Exemption for household goods.
Sec. 310. Professional fees.
Sec. 311. Interest on interest.
Sec. 312. Fairness to condominium and cooperative owners.
Sec. 313. Nonavoidability of fixing of lien on tools and implements of
trade, animals, and crops.
Sec. 314. Nondischargeability of debt for money, property, services, or
credit obtained by false pretense, false
representation, or fraud.
Sec. 315. Conversion of case under chapter 13.
Sec. 316. Rent-to-own contracts.
TITLE IV--BANKRUPTCY REVIEW COMMISSION
Sec. 401. Short title.
Sec. 402. Establishment.
Sec. 403. Duties of the commission.
Sec. 404. Membership.
Sec. 405. Compensation of the commission.
Sec. 406. Staff of commission; experts and consultants.
Sec. 407. Powers of the commission.
Sec. 408. Report.
Sec. 409. Termination.
Sec. 410. Authorization of appropriations.
TITLE V--BANKRUPTCY FRAUD
Sec. 501. Bankruptcy fraud.
TITLE VI--TECHNICAL CORRECTIONS
Sec. 601. Title 11, United States Code.
Sec. 602. Title 28, United States Code.
TITLE VII--SEVERABILITY; EFFECTIVE DATE; APPLICATION OF AMENDMENTS
Sec. 701. Severability.
Sec. 702. Effective date; application of amendments.
TITLE VIII--MISCELLANEOUS PROVISIONS
Sec. 801. Limitation on State taxation of certain pension income.
Sec. 802. Protection against discriminatory treatment of applications
for student loans.
Sec. 803. Chicago Housing Authority.
TITLE I--IMPROVED BANKRUPTCY ADMINISTRATION
SEC. 101. EXPEDITED HEARING ON AUTOMATIC STAY.
The last sentence of section 362(e) of title 11, United States
Code, is amended--
(1) by striking ``commenced'' and inserting ``concluded'';
and
(2) by inserting ``, unless the 30-day period is extended
with the consent of the parties in interest or for a specific
time which the court finds is required by compelling
circumstances'' before the period at the end.
SEC. 102. EXPEDITED FILING OF PLANS 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 new paragraph:
``(2) Under paragraph (1)--
``(A) the 120-day period referred to in this section may
not be increased beyond the 1-year period beginning on the date
of the order for relief under this chapter; and
``(B) the 180-day period referred to in this section may
not be increased beyond the 425-day period beginning on the
date of the order for relief under this chapter,
unless the need for such an increase is attributable to circumstances
for which the debtor should not justly be held accountable.''.
SEC. 103. EXPEDITED PROCEDURE FOR REAFFIRMATION OF DEBTS.
(a) Reaffirmation.--Section 524(c) of title 11, United States Code,
is amended--
(1) in paragraph (2)--
(A) by inserting ``(A)'' after ``(2)'';
(B) by adding ``and'' at the end; and
(C) by inserting after subparagraph (A), as
designated by subparagraph (A), the following new
subparagraph:
``(B) such agreement contains a clear and
conspicuous statement that advises the debtor that the
agreement is not required under this title, under
nonbankruptcy law, or under any agreement that is not
in accordance with the provisions of this
subsection;''; and
(2) in paragraph (3)--
(A) in the matter preceding subparagraph (A) by
striking ``such agreement'' the last place it appears;
(B) in subparagraph (A)--
(i) by inserting ``such agreement'' after
``(A)''; and
(ii) by striking ``and'' at the end; and
(C) in subparagraph (B)--
(i) by inserting ``such agreement'' after
``(B)''; and
(ii) by adding ``and'' at the end; and
(3) by adding at the end the following new subparagraph:
``(C) the attorney fully advised the debtor of the
legal effect and consequences of--
``(i) an agreement of the kind described in
this subsection; and
``(ii) any default under such an
agreement;''.
(b) Effect of Discharge.--The third sentence of section 524(d) of
title 11, United States Code, is amended in the matter preceding
paragraph (1) by inserting ``and was not represented by an attorney
during the course of negotiating the agreement'' after ``this
section''.
SEC. 104. POWERS OF BANKRUPTCY COURTS.
(a) Status Conferences.--Section 105 of title 11, United States
Code, is amended by adding at the end the following new subsection:
``(d) The court, on its own motion or on the motion of any party in
interest, may--
``(1) hold a status conference regarding any case or
proceeding under this title after notice to the parties in
interest; and
``(2) unless it would be inconsistent with another
provision of this title or with applicable Bankruptcy Rules,
issue an order at any such conference prescribing such
limitations and conditions as the court deems to be appropriate
to ensure that the case is handled expeditiously and
economically, including an order that--
``(A) sets the date by which the debtor must accept
or reject an executory contract or unexpired lease; or
``(B) in a case under chapter 11--
``(i) sets a date by which the debtor, or
the trustee if one has been appointed, shall
file a disclosure statement and plan;
``(ii) sets a date by which the debtor, or
the trustee if one has been appointed, shall
solicit acceptances of a plan;
``(iii) sets the date by which a party in
interest other than a debtor may file a plan;
``(iv) fixes the notice to be provided
regarding the hearing on approval of the
disclosure statement;
``(v) provides that the hearing on approval
of the disclosure statement may be combined
with the hearing on confirmation of the plan;
and
``(vi) directs the use of standard-form
disclosure statements, plans, or other forms
that have been adopted by the court.''.
(b) Establishment, Operation, and Termination of Bankruptcy
Appellate Panel Service.--Section 158(b) of title 28, United States
Code, is amended--
(1) by striking paragraphs (3) and (4);
(2) by redesignating paragraph (2) as paragraph (4);
(3) by striking paragraph (1) and inserting the following
new paragraphs:
``(1)(A) Except as provided in subparagraph (B), the judicial
council of a circuit shall establish a bankruptcy appellate panel
service composed of bankruptcy judges of the districts in the circuit
who are appointed by the judicial council in accordance with paragraph
(3), to hear and determine, with the consent of all parties to an
appeal, appeals under subsection (a).
``(B) The judicial council of a circuit need not establish a
bankruptcy appellate panel service if the judicial council finds that--
``(i) there are insufficient judicial resources available
in the circuit;
``(ii) establishment of such a service would result in
undue delay or increased cost to parties in cases under title
11; or
``(iii)(I) other factors of sound judicial administration
make the creation of such a service inappropriate; and
``(II) bankruptcy appeals are being heard and decided by
the district courts in a timely manner.
``(2)(A)(i) A judicial council may at any time reconsider its
decision to create or not to create a bankruptcy appellate panel
service.
``(ii) A decision on reconsideration under clause (i) shall be
submitted to the Judicial Conference of the United States within 90
days after it is made.
``(B) If the judicial council of a circuit finds that a
circumstance described in paragraph (1)(B) (i), (ii), or (iii) exists,
the judicial council may provide for the completion of the appeals then
pending before a bankruptcy appellate panel service and the orderly
termination of the service.
``(3) Bankruptcy judges appointed under paragraph (1) shall be
appointed for a term of 2 years and may be reappointed under that
paragraph.''; and
(4) by inserting after paragraph (4), as redesignated by
paragraph (2), the following new paragraphs:
``(5) An appeal to be heard under this subsection shall be heard by
a panel of 3 members of the bankruptcy appellate panel service, except
that a member of the service may not hear an appeal originating in the
district for which the member is appointed or designated under section
152.
``(6) Appeals may not be heard under this subsection by a panel of
the bankruptcy appellate panel service unless the district judges for
the district in which the appeals occur, by majority vote, have
authorized the service to hear and determine appeals originating in
that district.''.
(c) Appeals To Be Heard by Bankruptcy Appellate Panel Service.--
Section 158 of title 28, United States Code, is amended--
(1) in subsection (c) by striking ``(c) An appeal'' and
inserting the following:
``(c)(1) Subject to subsection (b), an appeal under subsection (a)
shall be heard by a 3-judge panel of the bankruptcy appellate panel
service established under subsection (b)(1) unless--
``(A) the appellant elects, at the time of filing the
appeal; or
``(B) any other party elects, not later than 30 days after
service of notice of the appeal,
to have the appeal heard by the district court.
``(2) An appeal''.
(d) Rules of Procedure and Evidence; Method of Prescribing.--
Section 2073 of title 28, United States Code, is amended--
(1) in subsection (a)(2) by striking ``section 2072'' and
inserting ``sections 2072 and 2075''; and
(2) in subsections (d) and (e) by inserting ``or 2075''
after ``2072'' each place it appears.
(f) Effective Date of Bankruptcy Rules.--The third undesignated
paragraph of section 2075 of title 28, United States Code, is amended
to read as follows:
``The Supreme Court shall transmit to Congress not later than May 1
of the year in which a rule prescribed under this section is to become
effective a copy of the proposed rule. The rule shall take effect no
earlier than December 1 of the year in which it is transmitted to
Congress unless otherwise provided by law.''.
SEC. 105. PARTICIPATION BY BANKRUPTCY ADMINISTRATOR AT MEETINGS OF
CREDITORS AND EQUITY SECURITY HOLDERS.
(a) Presiding Officer.--A bankruptcy administrator appointed under
section 302(d)(3)(I) of the Bankruptcy Judges, United States Trustees,
and Family Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note; 100 Stat.
3123), or the bankruptcy administrator's designee, may preside at--
(1) a meeting of creditors convened under section 341(a) of
title 11, United States Code; and
(2) a meeting of equity security holders convened under
section 341(b) of title 11, United States Code.
(b) Examination of the Debtor.--The bankruptcy administrator or the
bankruptcy administrator's designee may examine the debtor at the
meeting of creditors and may administer the oath required under section
343 of title 11, United States Code.
SEC. 106. DEFINITION RELATING TO ELIGIBILITY TO SERVE ON CHAPTER 11
COMMITTEES.
The definition of ``person'' in section 101 of title 11, United
States Code, as amended by section 501(a), is amended to read as
follows:
```person' includes an individual, partnership, and
corporation, but does not include a governmental unit, except
that a governmental unit that--
``(A) acquires an asset from a person--
``(i) as a result of the operation of a
loan guarantee agreement; or
``(ii) as receiver or liquidating agent of
a person;
``(B) is a guarantor of a pension benefit payable
by or on behalf of the debtor or an affiliate of the
debtor; or
``(C) is the legal or beneficial owner of an asset
of--
``(i) an employee pension benefit plan that
is a governmental plan, as defined in section
414(d) of the Internal Revenue Code of 1986; or
``(ii) an eligible deferred compensation
plan, as defined in section 457(b) of the
Internal Revenue Code of 1986,
shall be considered, for purposes of section 1102, to be a
person with respect to such asset or such benefit.''.
SEC. 107. INCREASED INCENTIVE COMPENSATION FOR TRUSTEES.
Section 326(a) of title 11, United States Code, is amended to read
as follows:
``(a)(1) In a case under chapter 7 or 11, the court may allow
reasonable compensation of the trustee under section 330 for the
trustee's services, payable after the trustee renders such services, in
an amount that does not exceed--
``(A) the value of the funds and other property disbursed
or turned over by the trustee to parties in interest in the
case (excluding the debtor but including holders of secured
claims), multiplied by
``(B) the applicable percentage stated in paragraph (2).
``(2) The applicable percentage stated in this paragraph is the
following percentage of the value of the funds and other property
disbursed or turned over by the trustee:
``(A) 25 percent of any amount up to $4,999.
``(B) 10 percent of any amount between $5,000 and $49,999
inclusive.
``(C) 5 percent of any amount between $50,000 and $999,999
inclusive.
``(D) A reasonable percentage, not to exceed 3 percent, of
any amount greater than $999,999.''.
SEC. 108. DOLLAR ADJUSTMENTS.
(a) Who May Be a Debtor Under Chapter 13.--Section 109(e) of title
11, United States Code, is amended--
(1) by striking ``unsecured debts of less than $100,000 and
noncontingent, liquidated, secured debts of less than
$350,000'' and inserting ``debts of less than $1,000,000''; and
(2) by striking ``unsecured debts that aggregate less than
$100,000 and noncontingent, liquidated, secured debts of less
than $350,000'' and inserting ``debts in the aggregate of less
than $1,000,000''.
(b) Involuntary Cases.--Section 303(b) of title 11, United States
Code, is amended--
(1) in paragraph (1) by striking ``$5,000'' and inserting
``$10,000''; and
(2) in paragraph (2) by striking ``$5,000'' and inserting
``$10,000''.
(c) Priorities.--Section 507(a) of title 11, United States Code, is
amended--
(1) in paragraph (3)(B) by striking ``$2,000'' and
inserting ``$4,000'';
(2) in paragraph (4)(B)(i) by striking ``$2,000'' and
inserting ``$4,000'';
(3) in paragraph (5) by striking ``$2,000'' and inserting
``$4,000''; and
(4) in paragraph (6)--
(A) by striking ``, to the extent of $900 for each
such individual,''; and
(B) by inserting ``, to the extent of $1,800 for
each such individual or, in the case of a deposit made
jointly by 2 or more individuals with respect to the
same purchase, lease, or rental, for each such group of
individuals'' before the period.
(d) Exemptions.--Section 522(d) of title 11, United States Code, is
amended--
(1) in paragraph (1) by striking ``$7,500'' and inserting
``$15,000'';
(2) in paragraph (2) by striking ``$1,200'' and inserting
``$2,400'';
(3) in paragraph (3)--
(A) by striking ``$200'' and inserting ``$400'';
and
(B) by striking ``$4,000'' and inserting
``$8,000'';
(4) in paragraph (4) by striking ``$500'' and inserting
``$1,000'';
(5) in paragraph (5)--
(A) by striking ``$400'' and inserting ``$800'';
and
(B) by striking ``$3,750'' and inserting
``$7,500'';
(6) in paragraph (6) by striking ``$750'' and inserting
``$1,500'';
(7) in paragraph (8) by striking ``$4,000'' and inserting
``$8,000''; and
(8) in paragraph (11)(D) by striking ``$7,500'' and
inserting ``$15,000''.
(e) Appointment of Examiner in Certain Circumstances.--Section
1104(b)(2) of title 11, United States Code, is amended by striking
``$5,000,000'' and inserting ``$10,000,000''.
SEC. 109. PREMERGER NOTIFICATION.
Sections 363(b)(2) (A) and (B) of title 11, United States Code, are
amended to read as follows:
``(A) notwithstanding subsection (a) of that
section, the notification required to be given by the
debtor shall be given by the trustee; and
``(B) notwithstanding subsection (b) of that
section, the required waiting period shall end on the
15th day after the date of receipt of the notification,
unless the waiting period is extended--
``(i) pursuant to subsection (e)(2) (as it
applies to a cash tender offer) or (g)(2) of
that section; or
``(ii) by the court, after notice and a
hearing.''.
SEC. 110. ALLOWANCE OF CREDITOR COMMITTEE EXPENSES.
Section 503(b) of title 11, United States Code, is amended--
(1) by striking ``and'' at the end of paragraph (5);
(2) by striking the period at the end of paragraph (6) and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(7) the actual, necessary expenses incurred by a member
of a committee appointed under section 1102 in the performance
of the duties of the committee (including fees of an attorney
or accountant for professional services rendered for the member
to the extent allowable under paragraph (4)), other than claims
for compensation for services rendered as a member of the
committee.''.
SEC. 111. JUDICIAL CONFERENCE REPORT.
Not later than 1 year after the date of enactment of this Act, the
Judicial Conference of the United States shall produce and submit to
the appropriate committees of Congress a report containing a
description of--
(1) the efforts of the Federal judiciary to automate and
computerize the Federal bankruptcy courts;
(2) the types of information that are currently available
to Congress and the public regarding the number, size, and
types of bankruptcy cases filed in the Federal courts;
(3) the types of additional information that the Federal
judiciary believes are necessary and desirable to enhance its
ability to manage the affairs of the bankruptcy system; and
(4) the projected timetable for being able to supply those
additional types of information to Congress and the public in
the future.
SEC. 112. SERVICE OF PROCESS IN BANKRUPTCY PROCEEDINGS ON AN INSURED
DEPOSITORY INSTITUTION.
Rule 7004 of Bankruptcy Rules is amended--
(1) in subsection (b) by striking ``In addition'' and
inserting ``Except as provided in subdivision (h), in
addition''; and
(2) by adding at the end the following new subdivision:
``(h) Service of Process on an Insured Depository Institution.--
Notwithstanding any other provision of this rule or any other rule or
law, service on an insured depository institution (as defined in
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) shall
be made by certified mail addressed to an officer of the institution
unless--
``(1) the institution has appeared by its attorney, in
which case the attorney shall be served by first class mail;
``(2) the court orders otherwise after service upon the
institution by certified mail of notice of an application to
permit service on the institution by first class mail sent to
an officer of the institution designated by the institution; or
``(3) the institution has waived in writing its entitlement
to service by certified mail by designating an officer to
receive service.''.
SEC. 113. MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS.
Section 341 of title 11, United States Code, is amended by adding
at the end the following new subsection:
``(d) Prior to the conclusion of the meeting of creditors or equity
security holders, the United States trustee shall orally examine the
debtor under oath and make recommendations on a preserved record
regarding the debtor's knowledge of--
``(1) the potential consequences of seeking a discharge in
bankruptcy, including the effects on credit history;
``(2) the debtor's ability to file a petition under a
different chapter of this title;
``(3) the effect of receiving a discharge of debts under
this title;
``(4) the effect of reaffirming a debt, including the
debtor's knowledge of the provisions of section 524(d);
``(5) the debtor's duties under section 521; and
``(6) the potential penalties and fines for committing
fraud or other abuses of this title.''.
SEC. 114. TAX ASSESSMENT.
Section 362(b)(9) of title 11, United States Code, is amended to
read as follows:
``(9) under subsection (a), of--
``(A) an audit by a governmental unit to determine
tax liability;
``(B) the issuance to the debtor by a governmental
unit of a notice of tax deficiency;
``(C) a demand for tax returns; an assessment of an
uncontested or agreed upon tax liability; or
``(D) the making of an assessment for any tax and
issuance of a notice and demand for payment of such an
assessment (but any tax lien that would otherwise
attach to property of the estate by reason of such an
assessment shall not take effect until the property is
no longer property of the estate).''.
SEC. 115. ADDITIONAL TRUSTEE COMPENSATION.
Section 330(b) of title 11, United States Code, is amended--
(1) by inserting ``(1)'' after ``(b)''; and
(2) by adding at the end thereof the following new
paragraph:
``(2) The Judicial Conference of the United States shall prescribe
additional fees of the same kind as prescribed under section 1914(b) of
title 28, to pay $15 to the trustee serving in such case after such
trustee's services are rendered. Such $15 shall be paid in addition to
the amount paid under paragraph (1).''.
SEC. 116. EXTENSION TO CERTAIN JUDICIAL OFFICIALS OF LIFE INSURANCE
RULES CURRENTLY APPLICABLE TO FEDERAL JUDGES.
(a) Eligibility.--Section 8701(a) of title 5, United States Code,
is amended--
(1) in paragraph (9) by striking ``and'' after the
semicolon;
(2) in paragraph (10) by adding ``and'' after the
semicolon; and
(3) by inserting after paragraph (10) and preceding the
matter before subparagraph (A) the following new paragraph:
``(11) a judicial official (as defined in section 376(a)(1)
of title 28), including--
``(i) a judge of the United States Court of Federal
Claims--
``(I) who is in regular active service, or
``(II) who is retired from regular active
service under section 178 of title 28;
``(ii) a judge of the District Court of Guam, the
District Court of the Northern Mariana Islands, or the
District Court of the Virgin Islands--
``(I) who is in regular active service, or
``(II) who is retired from regular active
service under section 373 of title 28; and
``(iii) a bankruptcy judge or a magistrate judge--
``(I) who is in regular active service, or
``(II) who retired after attaining age 65
from regular active service under chapter 83 or
84 of this title, section 377 of title 28, or
section 2(c) of the Retirement and Survivors'
Annuities for Bankruptcy Judges and Magistrates
Act of 1988 (28 U.S.C. 377 note; Public Law
100-659);''.
(b) Continuation of Coverage.--
(1) Termination; optional insurance.--(A) Sections 8706(a)
and 8714b(c)(1) of title 5, United States Code, are each
amended in the second sentence by inserting ``and judicial
officials specifically included under section 8701(a)(11)''
after ``section 8701(a)(5) (ii) and (iii)''.
(B) Sections 8714a(c)(1) and 8714c(c)(1) of title 5, United
States Code, are each amended by adding after the first
sentence ``Justices and judges described under section
8701(a)(5) (ii) and (iii) and judicial officials specifically
included under section 8701(a)(11) of this chapter are deemed
to continue in active employment for purposes of this
chapter.''.
(2) Application of amendments.--The amendments made by
paragraph (1) shall apply to a judicial officer described in
section 8701(a)(11) of title 5, United States Code (as amended
by this section) who--
(A) is retired under chapter 83 or 84 of title 5,
United States Code, section 178, 373, or 377 of title
28, United States Code, or section 2(c) of the
Retirement and Survivors' Annuities for Bankruptcy
Judges and Magistrates Act of 1988 (28 U.S.C. 377
note); and
(B) retires on or after August 1, 1987.
(c) Technical Amendments.--
(1) Section 8714a.--Section 8714a(c) of title 5, United
States Code, is amended by striking paragraph (3).
(2) Section 8714b.--Section 8714b(c)(1) is amended by
striking the third sentence.
SEC. 117. SETTLEMENT OF CLAIMS AND DEMANDS FOR PAYMENT.
Section 105 of title 11, United States Code, is amended by adding
at the end the following new subsection:
``(d) A court may issue an injunction that requires claims and
demands to be presented for payment solely to a trust or other vehicle
that is established for the purpose of settling such claims and demands
and is approved by the court and entered into pursuant to an order
approving a plan of reorganization.''.
SEC. 118. RECOMMENDATIONS OF THE JUDICIAL CONFERENCE FOR THE
APPOINTMENT OF BANKRUPTCY JUDGES.
Section 152(b) of title 28, United States Code, is amended by
adding at the end the following new paragraph:
``(4)(A) If, as a result of a review of judicial districts under
paragraph (3), the Judicial Conference determines that there is a need
for a number (including a fractional number) of additional bankruptcy
judges for any judicial district, but the Judicial Conference
determines to submit to Congress a recommendation that the appointment
of a lesser number of bankruptcy judges be authorized for that
district, the Judicial Conference shall submit with the recommendation
a statement detailing--
``(i) the difference between the number of additional
bankruptcy judges that has been determined to be needed and the
number recommended to be authorized; and
``(ii) the methods by which those numbers were determined.
``(B) If the Judicial Conference has submitted to Congress a
recommendation that a lesser number of additional bankruptcy judges be
authorized to be appointed than a review of judicial districts shows is
needed for a judicial district, the Judicial Conference shall submit a
subsequent recommendation that satisfies the continuing need for
additional bankruptcy judges for that judicial district unless--
``(i) the Congress, without having received such a
recommendation, authorizes the requisite number of additional
bankruptcy judges to be appointed for that district; or
``(ii) a subsequent review of judicial districts shows that
that number of additional bankruptcy judges is no longer needed
for that district.''.
TITLE II--COMMERCIAL ISSUES IN BANKRUPTCY
SEC. 201. SMALL BUSINESSES.
(a) Definition.--Section 101 of title 11, United States Code, as
amended by section 501, is amended by inserting in its proper
alphabetical position the following new definition:
`` `small business' means a person engaged in commercial or
business activities (but does not include a person whose
primary activity is the business of owning or operating real
property and activities incidental thereto) whose aggregate
liquidated secured and unsecured debts as of the date of the
petition do not exceed $2,500,000.''.
(b) Creditors' Committees.--Section 1102(a) of title 11, United
States Code, is amended--
(1) in paragraph (1) by striking ``As'' and inserting
``Except as provided in paragraph (3), as''; and
(2) by adding at the end the following new paragraph:
``(3) On request of a party in interest in a case in which the
debtor is a small business, the court may order that a committee of
creditors not be appointed.''.
(c) Conversion or Dismissal.--Section 1112(b) of title 11, United
States Code, is amended by inserting ``or bankruptcy administrator''
after ``United States trustee''.
(d) Who May File a Plan.--Section 1121 of title 11, United States
Code, is amended by adding at the end the following new subsection:
``(d) In a case in which the debtor is a small business--
``(A) only the debtor may file a plan until after 90 days
after the date of the order for relief under this chapter;
``(B) all plans for relief shall be filed within 150 days
after the date of the order for relief; and
``(C) on request of a party in interest made within the
respective periods specified in subparagraphs (A) and (B) and
after notice and a hearing, the court may--
``(i) reduce the 90-day period or the 150-day
period specified in subparagraph (A) or (B) for cause;
and
``(ii) increase the 90-day period specified in
subparagraph (A) if the debtor shows that the need for
an increase is caused by circumstances for which the
debtor should not be held accountable.''.
(e) Postpetition Disclosure.--Section 1125 of title 11, United
States Code, is amended by adding at the end the following new
subsection:
``(f) Notwithstanding subsection (b), in a case in which the debtor
is a small business--
``(1) the court may conditionally approve a disclosure
statement subject to final approval after notice and a hearing;
``(2) acceptances and rejections of a plan may be solicited
based on a conditionally approved disclosure statement so long
as the debtor provides adequate information to each holder of a
claim or interest that is solicited, but a conditionally
approved disclosure statement shall be mailed at least 10 days
prior to the date of the hearing on confirmation of the plan;
and
``(3) a hearing on the disclosure statement may be combined
with a hearing on confirmation of a plan.''.
SEC. 202. SINGLE ASSET REAL ESTATE.
(a) Definition.--Section 101 of title 11, United States Code, is
amended by inserting in its proper alphabetical position the following
new definition:
`` `single asset real estate' means real property
constituting a single property or project, other than
residential real property with fewer than 4 residential units,
which generates substantially all of the gross income of a
debtor and on which no substantial business is being conducted
by a debtor other than the business of operating the real
property and activities incidental thereto.''.
(b) Automatic Stay.--Section 362 of title 11, United States Code,
is amended--
(1) in subsection (d)--
(A) in paragraph (1) by striking ``or'' at the end;
(B) in paragraph (2) by striking the period at the
end and inserting ``; or''; and
(C) by adding at the end the following new
paragraph:
``(3) with respect to a stay of an act against single asset
real estate under subsection (a), by a creditor whose claim is
secured by an interest in such real estate, unless, not later
than the date that is 90 days after the entry of the order for
relief (or such later date as the court may determine for cause
by order entered within that 90-day period)--
``(A) the debtor has filed a plan of reorganization
that has a reasonable possibility of being confirmed
within a reasonable time; or
``(B) the debtor has commenced monthly payments to
each creditor whose claim is secured by such real
estate, which payments are in an amount equal to
interest at a current fair market rate on the value of
the creditor's interest in the real estate.''; and
(2) by adding at the end the following new subsection:
``(i)(1) Upon request of a creditor whose claim is secured by an
interest in single asset real estate, if the interest has more than de
minimis value, the court shall issue an order granting limited relief
from the stay provided under subsection (a) to permit the creditor to
continue a foreclosure proceeding commenced before the commencement of
the case up to, but not including, the point of sale.
``(2) An order under paragraph (1) shall not issue before the date
that is 30 days after the date of entry of the order for relief, but
thereafter shall issue promptly after such a request.
``(3) A hearing shall not be required for the granting of relief
under paragraph (1) unless the debtor files an objection to the request
and shows the court extraordinary circumstances requiring such a
hearing.''.
SEC. 203. AIRCRAFT EQUIPMENT, VESSELS, AND ROLLING STOCK EQUIPMENT.
(a) Amendment of Section 1110.--Section 1110 of title 11, United
States Code, is amended to read as follows:
``Sec. 1110. Aircraft equipment and vessels
``(a)(1) The right of a secured party with a security interest in
equipment described in paragraph (2) or of a lessor or conditional
vendor of such equipment to take possession of such equipment in
compliance with a security agreement, lease, or conditional sale
contract is not affected by section 362, 363, or 1129 or by any power
of the court to enjoin the taking of possession unless--
``(A) before the date that is 60 days after the date of the
order for relief under this chapter, the trustee, subject to
the court's approval, agrees to perform all obligations of the
debtor that become due on or after the date of the order under
such security agreement, lease, or conditional sale contract;
and
``(B) any default, other than a default of a kind specified
in section 365(b)(2), under such security agreement, lease, or
conditional sale contract--
``(i) that occurs before the date of the order is
cured before the expiration of such 60-day period; and
``(ii) that occurs after the date of the order is
cured before the later of--
``(I) the date that is 30 days after the
date of the default; or
``(II) the expiration of such 60-day
period.
``(2) Equipment is described in this paragraph if it is--
``(A) an aircraft, aircraft engine, propeller, appliance,
or spare part (as defined in section 101 of the Federal
Aviation Act of 1958 (49 U.S.C. App. 1301)) that is subject to
a security interest granted by, leased to, or conditionally
sold to a debtor that is an air carrier (as defined in that
section, except that for the purposes of this section the term
also includes an air carrier in intrastate commerce); or
``(B) a documented vessel (as defined in section 30101(1)
of title 46, United States Code) that is subject to a security
interest granted by, leased to, or conditionally sold to a
debtor that is a water carrier that holds a certificate of
public convenience and necessity or permit issued by the
Interstate Commerce Commission.
``(3) Paragraph (1) applies to a secured party, lessor, or
conditional vendor acting in its own behalf or acting as trustee or
otherwise in behalf of another party.
``(b) The trustee and the secured party, lessor, or conditional
vendor whose right to take possession is protected under subsection (a)
may agree, subject to the court's approval, to extend the 60-day period
specified in subsection (a)(1).
``(c) If the trustee makes an agreement of the kind described in
subsection (a)(1)(A) with respect to a security agreement, lease, or
conditional sale contract, any costs and expenses incurred by the
secured party, lessor, or conditional vendor to remedy the failure of
the trustee to perform the obligations of the estate to maintain or
return equipment in accordance with the security agreement, lease, or
conditional sale contract constitute administrative expenses under
section 503(b)(1)(A).
``(d) With respect to equipment first placed in service on or prior
to the date of enactment of this subsection, for purposes of this
section--
``(1) the term `lease' includes any written agreement with
respect to which the lessor and the debtor, as lessee, have
expressed in the agreement or in a substantially
contemporaneous writing that the agreement is to be treated as
a lease for Federal income tax purposes; and
``(2) the term `security interest' means a purchase-money
equipment security interest.''.
(b) Amendment of Section 1168.--Section 1168 of title 11, United
States Code, is amended to read as follows:
``Sec. 1168. Rolling stock equipment
``(a)(1) The right of a secured party with a security interest in
or of a lessor or conditional vendor of equipment described in
paragraph (2) to take possession of such equipment in compliance with
an equipment security agreement, lease, or conditional sale contract is
not affected by section 362, 363, or 1129 or by any power of the court
to enjoin the taking of possession, unless--
``(A) before the date that is 60 days after the date of
commencement of a case under this chapter, the trustee, subject
to the court's approval, agrees to perform all obligations of
the debtor that become due on or after the date of commencement
of the case under such security agreement, lease, or
conditional sale contract; and
``(B) any default, other than a default of a kind described
in section 365(b)(2), under such security agreement, lease, or
conditional sale contract--
``(i) that occurs before the date of commencement
of the case and is an event of default therewith is
cured before the expiration of such 60-day period; and
``(ii) that occurs or becomes an event of default
after the date of commencement of the case is cured
before the later of--
``(I) the date that is 30 days after the
date of the default or event of default; or
``(II) the expiration of such 60-day
period.
``(2) Equipment is described in this paragraph if it is rolling
stock equipment or accessories used on such equipment, including
superstructures and racks, that is subject to a security interest
granted by, leased to, or conditionally sold to the debtor.
``(3) Paragraph (1) applies to a secured party, lessor, or
conditional vendor acting in its own behalf or acting as trustee or
otherwise in behalf of another party.
``(b) The trustee and the secured party, lessor, or conditional
vendor whose right to take possession is protected under subsection (a)
may agree, subject to the court's approval, to extend the 60-day period
specified in subsection (a)(1).
``(c) If the trustee makes an agreement of the kind described in
subsection (a)(1)(A) with respect to a security agreement, lease, or
conditional sale contract, any costs and expenses incurred by the
secured party, lessor, or conditional vendor to remedy the failure of
the trustee to perform the obligations of the estate to maintain or
return equipment in accordance with the security agreement, lease, or
conditional sale contract constitute administrative expenses under
section 503(b)(1)(A).
``(d) With respect to equipment first placed in service on or prior
to the date of enactment of this subsection, for purposes of this
section--
``(1) the term `lease' includes any written agreement with
respect to which the lessor and the debtor, as lessee, have
expressed in the agreement or in a substantially
contemporaneous writing that the agreement is to be treated as
a lease for Federal income tax purposes; and
``(2) the term `security interest' means a purchase-money
equipment security interest.''.
(c) Application of Amendments.--
(1) In general.--The amendment of sections 1110 and 1168 of
title 11, United States Code, made by subsections (a) and (b)
shall not apply to cases commenced under title 11, United
States Code, prior to the date of enactment of this Act.
(2) Placement in service.--The amendment of section 1168(a)
of title 11, United States Code, made by subsection (b) shall
take effect with respect to equipment that is first placed in
service after the date of enactment of this Act, including
rolling stock equipment that is substantially rebuilt after
that date and accessories used on such equipment.
SEC. 204. UNEXPIRED LEASES OF PERSONAL PROPERTY IN CHAPTER 11 CASES.
Section 365(d)(3) of title 11, United States Code, is amended in
the first sentence by inserting after ``real property'' the following:
``and, in a case under chapter 11, under an unexpired lease of personal
property''.
SEC. 205. PROTECTION OF ASSIGNEES OF EXECUTORY CONTRACTS AND UNEXPIRED
LEASES APPROVED BY COURT ORDER IN CASES REVERSED ON
APPEAL.
Section 365 of title 11, United States Code, is amended by adding
at the end the following new subsection:
``(p)(1) Except as provided in paragraph (2), the reversal or
modification on appeal of an authorization under this section of an
assignment of an executory contract or unexpired lease does not affect
the validity of the assignment to an entity that obtained the
assignment in good faith, whether or not the entity knew of the
pendency of the appeal, unless the authorization and the assignment
were stayed pending appeal.
``(2) This subsection does not apply to an executory contract that
is related to, or to an unexpired lease of real property in, a shopping
center.''.
SEC. 206. PROTECTION OF SECURITY INTEREST IN POST-PETITION RENTS.
Postpetition Effect of Security Interest.--Section 552(b) of title
11, United States Code, is amended--
(1) by inserting ``(1)'' after ``(b)'';
(2) by striking ``rents,'' each place it appears; and
(3) by adding at the end the following new paragraph:
``(2)(A) Except as provided in sections 363, 506(c), 522, 544, 545,
547, and 548, if--
``(i) the debtor and an entity entered into a security
agreement that was duly recorded in the public records before
the commencement of the case; and
``(ii) the security interest created by the security
agreement extends to--
``(I) property of the debtor acquired before the
commencement of the case; and
``(II)(aa) to amounts paid as rents of such
property; or
``(bb) to amounts paid for the use or occupancy of
such property (including fees, charges, accounts, or
other payments for the use or occupancy of rooms and
other public facilities in a property such as a hotel,
motel, or other lodging),
the security interest extends to such amounts paid to the estate as
rents or as fees, charges, accounts, or other payments after the
commencement of the case to the extent provided in the security
agreement, whether or not the security interest in such rents or such
fees, charges, accounts, or other payments is perfected under
applicable nonbankruptcy law, except to the extent that the court,
after notice and a hearing and based on the equities of the case,
orders otherwise.
``(B) If a security interest extends under subparagraph (A) to
rents acquired by the estate after the commencement of the case, the
security interest in such rents shall be deemed to be perfected for the
purpose of section 544(a).''.
(b) Use Sale, or Lease of Property.--Section 363(a) of title 11,
United States Code, is amended by inserting: ``and the fees, charges,
accounts or other payments for the use or occupancy of rooms and other
public facilities in hotels, motels, or other lodging properties''
after ``property''.
SEC. 207. ANTI-ALIENATION.
(a) Automatic Stay.--Section 362(b) of title 11, United States
Code, as amended by section 501(a), is amended--
(1) by striking ``or'' at the end of paragraph (16);
(2) by striking the period at the end of paragraph (17) and
inserting ``; or''; and
(3) by adding at the end the following new paragraph:
``(18) under subsection (a), of withholding of income from
a debtor's wages and collection of amounts withheld, pursuant
to statute or the debtor's agreement authorizing such
withholding and collection for the benefit of a qualified
employer plan (within the meaning of section 72(p)(4) of the
Internal Revenue Code of 1986), to the extent that the amounts
withheld and collected are used solely for payments relating to
a loan from the plan secured by the debtor's nonforfeitable
accrued benefit under the plan.''.
(b) Exceptions to Discharge.--Section 523(a) of title 11, United
States Code, is amended--
(1) by striking ``or'' at the end of paragraph (11);
(2) by striking the period at the end of paragraph (12) and
inserting ``; or''; and
(3) by adding at the end the following new paragraph:
``(13) owed to a qualified employer plan (within the
meaning of section 72(p)(4) of the Internal Revenue Code of
1986) pursuant to a loan from the plan secured by the debtor's
nonforfeitable accrued benefit under the plan.''.
(c) Property of the Estate.--Section 541(b) of title 11, United
States Code, as amended by section 501(d)(12), is amended in paragraph
(1)--
(1) by striking ``or'' at the end of subparagraph (C);
(2) by striking the period at the end of subparagraph (D)
and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(E) any nontransferable interest of the debtor in a
qualified employer plan (within the meaning of section 72(p)(4)
of the Internal Revenue Code of 1986) to the extent not
otherwise excluded from the debtor's estate pursuant to
subsection (c)(2).''.
(d) Plan Contents.--Section 1322 of title 11, United States Code,
is amended by adding at the end the following new subsection:
``(d) The plan may not materially alter the terms of a loan
described in section 362(b)(18).''.
(e) Plan Confirmation.--Section 1325 of title 11, United States
Code, is amended--
(1) in subsection (b)(2) by striking ``debtor and'' and
inserting ``debtor (not including income that is withheld from
the debtor's wages for the purposes stated in section
362(b)(18)) and''; and
(2) in subsection (c) by striking ``income to'' and
inserting ``income (except income that is withheld from a
debtor's wages for the purposes stated in section 362(b)(18)
after confirmation of a plan) to''.
SEC. 208. EXEMPTION.
Section 109(b)(2) of title 11, United States Code, is amended by
inserting after ``homestead association,'' the following: ``a small
business investment company licensed by the Small Business
Administration under section 301 (c) or (d) of the Small Business
Investment Act of 1958 (15 U.S.C. 681 (c) and (d)),''.
SEC. 209. INDENTURE TRUSTEE COMPENSATION.
Section 503(b) of title 11, United States Code, is amended--
(1) in paragraph (3)--
(A) by redesignating subparagraphs (D) and (E) as
subparagraphs (E) and (F), respectively;
(B) by inserting after subparagraph (C) the
following new subparagraph;
``(D) an indenture trustee;''; and
(C) in subparagraph (E), as redesignated by
subparagraph (A), by striking ``an indenture
trustee,''; and
(2) in paragraph (5) by striking ``for services rendered by
an indenture trustee in making a substantial contribution'' and
inserting ``for reasonable and necessary services rendered by
an indenture trustee''.
SEC. 210. PAYMENT OF TAXES WITH BORROWED FUNDS.
Section 523(a) of title 11, United States Code, as amended by
section 207(b), is amended--
(1) by striking ``or'' at the end of paragraph (12);
(2) by adding ``or'' at the end of paragraph (13); and
(3) by adding at the end the following new paragraph:
``(14) incurred to pay a tax or customs duty that would be
nondischargeable pursuant to paragraph (1).''.
SEC. 211. RETURN OF GOODS.
(a) Limitation on Avoiding Powers.--Section 546 of title 11, United
States Code, is amended by adding at the end the following new
subsection:
``(h) Notwithstanding the rights and powers of a trustee under
sections 544(a), 545, 547, 549, and 553, if the court determines, after
notice and a hearing, that a return is in the best interests of the
estate, the debtor, with the consent of a creditor, may return goods
shipped to the debtor by the creditor before the commencement of the
case, and the creditor may offset the purchase price of such goods
against any claim of the creditor against the debtor that arose before
the commencement of the case.''.
(b) Setoff.--Section 553(b)(1) is amended by inserting ``546(h),''
after ``365(h)(2),''.
SEC. 212. EXCEPTION TO DISCHARGE.
Section 523(a)(2)(C) of title 11, United States Code, is amended by
striking ``forty'' and inserting ``60''.
SEC. 213. PROCEEDS OF MONEY ORDER AGREEMENTS.
Section 541(b) of title 11, United States Code, as amended by
section 207(c), is amended in paragraph (1)--
(1) by striking ``or'' at the end of subparagraph (D);
(2) by striking the period at the end of subparagraph (E)
and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(F) any interest in cash or cash equivalents that
constitute proceeds of a sale by the debtor of a money order
that is made--
``(i) on or after the date that is 14 days prior to
the date on which the petition is filed; and
``(ii) under an agreement with a money order issuer
that prohibits the commingling of such proceeds with
property of the debtor (notwithstanding that, contrary
to the agreement, the proceeds may have been commingled
with property of the debtor),
unless the money order issuer had not taken action, prior to
the filing of the petition, to require compliance with the
prohibition.''.
SEC. 214. LIMITATION ON LIABILITY OF NONINSIDER TRANSFEREE FOR AVOIDED
TRANSFER.
Section 550 of title 11, United States Code, is amended--
(1) by redesignating subsections (b), (c), (d), and (e) as
subsections (c), (d), (e), and (f), respectively; and
(2) by inserting after subsection (a) the following new
subsection:
``(b) The trustee may recover under subsection (a) a transfer
avoided under section 547(b) from a first transferee or an immediate or
mediate transferee of a first transferee only to the extent that--
``(1) all the elements of section 547(b) are satisfied as
to the first transferee; and
``(2) the exceptions in section 547(c) do not protect the
first transferee.''.
SEC. 215. PERFECTION OF PURCHASE-MONEY SECURITY INTEREST.
Section 547 of title 11, United States Code, is amended in
subsection (c)(3)(B) and subsection (e)(2) by striking ``10'' and
inserting ``20''.
SEC. 216. AIRPORT GATE LEASES.
Section 365(d) of title 11, United States Code, is amended by
adding at the end the following new paragraph:
``(5)(A) Notwithstanding paragraphs (1), (2), and (4), and subject
to subparagraph (B) of this paragraph, if the trustee in a case under
any chapter of this title does not assume or reject an unexpired lease
or executory contract with an airport operator under which the debtor
has a right to the use or possession of an airport terminal, aircraft
gate, or related facility within 60 days after the date of the order
for relief, or within such additional time (not to exceed 120
additional days) as the court sets during such 60-day period, such
lease or executory contract is deemed rejected, and the trustee shall
immediately surrender the airport terminal, gate, or related facility
to the airport operator.
``(B)(i) The court may enter an order extending beyond 180 days
after the date of the order for relief the time for assumption or
rejection of an unexpired lease or executory contract described in
subparagraph (A) only after finding that such an extension of time does
not cause substantial harm to the airport operator or to airline
passengers.
``(ii) In making the determination of substantial harm, the court
shall consider, among other relevant factors--
``(I) the level of use of airport terminals, gates, or
related facilities subject to the unexpired lease or executory
contract;
``(II) the existence of competing demands for the use of
the airport terminals, gates, or related facilities;
``(III) the size and complexity of the case; and
``(IV) air carrier competition at the airport.
``(iii) The burden of proof for establishing cause for an extension
of time under this subparagraph shall be on the trustee.
``(iv) An order entered under this subparagraph shall be without
prejudice to the right of a party in interest to request, at any time,
a shortening or termination of the extension of time granted under this
subparagraph.''.
SEC. 217. TRUSTEE DUTIES.
Section 586(a)(3)(A) of title 28, United States Code, is amended to
read as follows:
``(A)(i) reviewing, in accordance with procedural
and substantive guidelines adopted by the Executive
Office of the United States Trustee (which guidelines
shall be applied uniformly by the United States trustee
except when circumstances warrant different treatment),
applications filed for compensation and reimbursement
under section 330 of title 11; and
``(ii) filing with the court comments with respect
to each such an application and, if the United States
Trustee considers it to be appropriate, objections to
such application.''.
SEC. 218. PAYMENTS.
Section 1326(a)(2) of title 11, United States Code, is amended in
the second sentence by striking the period and inserting ``as soon as
practicable.''.
SEC. 219. CONTINUED PERFECTION.
(a) Automatic Stay.--Section 362(b)(3) of title 11, United States
Code, is amended by inserting ``, or to maintain or continue the
perfection of,'' after ``to perfect''.
(b) Limitations On Avoiding Powers.--Section 546(b) of title 11,
United States Code, is amended to read as follows:
``(b)(1) The rights and powers of a trustee under sections 544,
545, and 549 of this title are subject to any generally applicable law
that--
``(A) permits perfection of an interest in property to be
effective against an entity that acquires rights in the
property before the date of perfection; or
``(B) provides for the maintenance or continuation of
perfection of an interest in property to be effective against
an entity that acquires rights in the property before the date
on which action is taken to effect such maintenance or
continuation.
``(2) If--
``(A) a law described in paragraph (1) requires seizure of
property that is subject to a perfected interest or
commencement of an action to accomplish perfection or
maintenance or continuation of an interest in property; and
``(B) the property has not been seized or an action has not
been commenced before the date of the filing of the petition,
the interest in such property shall be perfected, or perfection of such
interest shall be maintained or continued, by notice within the time
fixed by that law for the seizure of property or commencement of an
action.''.
SEC. 220. NOTICES TO CREDITORS.
Section 342 of title 11, United States Code, is amended by adding
at the end the following new subsection:
``(c) If notice is required to be given by the debtor to a creditor
under this title, any rule, any applicable law, or any order of the
court, such notice shall contain the name and address of the debtor and
the account number, if any, of the debt owed to the creditor if the
account number is known to or reasonably ascertainable by the
debtor.''.
SEC. 221. SUPPLEMENTAL INJUNCTIONS.
Section 524 of title 11, United States Code, is amended by adding
at the end the following new subsection:
``(g)(1)(A) After notice and hearing, a court that enters an order
confirming a plan of reorganization under chapter 11 may issue an
injunction to supplement the injunctive effect of a discharge under
this section.
``(B) An injunction may be issued under subparagraph (A) to enjoin
persons and governmental units from taking legal action for the purpose
of directly or indirectly collecting, recovering, or receiving payment
or recovery of, on, or with respect to any claim or demand that, under
a plan of reorganization, is to be paid in whole or in part by a trust
described in paragraph (2)(B)(i), except such legal actions as are
expressly allowed by the injunction, the confirmation order, or the
plan of reorganization.
``(2)(A) If the requirements of subparagraph (B) are met at any
time, then, after entry of an injunction under paragraph (1), any
proceeding that involves the validity, application, construction, or
modification of the injunction or of this subsection with respect to
the injunction may be commenced only in the district court in which the
injunction was entered, and such court shall have exclusive
jurisdiction over any such proceeding without regard to the amount in
controversy.
``(B) The requirements of this subparagraph are that--
``(i) the injunction is to be implemented in connection
with a trust that, pursuant to the plan of reorganization--
``(I) is to assume the liabilities of a debtor
which at the time of entry of the order for relief has
been named as a defendant in personal injury, wrongful
death, or property-damage actions seeking recovery for
damages allegedly caused by the presence of, or
exposure to, asbestos or asbestos-containing products;
``(II) is to be funded in whole or in part by the
securities of 1 or more debtors involved in the plan of
reorganization and by the obligation of such debtor or
debtors to make future payments;
``(III) is to own, or by the exercise of rights
granted under the plan could own, a majority of the
voting shares of--
``(aa) each such debtor;
``(bb) the parent corporation of each such
debtor; or
``(cc) a subsidiary of each such debtor
that is also a debtor; and
``(IV) is to use its assets or income to pay claims
and demands; and
``(ii) the court, at any time pursuant to its authority
under the plan, over the trust, or otherwise, determines that--
``(I) the debtor may be subject to substantial
future demands for payment arising out of the same or
similar conduct or events that gave rise to the claims
that are addressed by the injunction;
``(II) the actual amounts, numbers, and timing of
such future demands cannot be determined;
``(III) pursuit of such demands outside the
procedures prescribed by the plan may threaten the
plan's purpose to deal equitably with claims and future
demands;
``(IV) as part of the process of seeking approval
of the plan of reorganization--
``(aa) the terms of the injunction proposed
to be issued under paragraph (1)(A), including
any provisions barring actions against third
parties pursuant to paragraph (4)(A), shall be
set out in the plan of reorganization and in
any disclosure statement supporting the plan;
and
``(bb) a separate class or classes of the
claimants whose claims are to be addressed by a
trust described in clause (i) is established
and votes, by at least 75 percent of those
voting, in favor of the plan; and
``(V) pursuant to court orders or otherwise, the
trust will operate through mechanisms such as
structured, periodic or supplemental payments, pro rata
distributions, matrices, or periodic review of
estimates of the numbers and values of present claims
and future demands or other comparable alternates, that
provide reasonable assurance that the trust will value,
and be in a financial position to pay, present claims
and future demands that involve similar claims in
substantially the same manner.
``(3)(A) If the requirements of paragraph (2)(B) are met and the
order approving the plan of reorganization was issued or affirmed by
the district court that has jurisdiction over the reorganization
proceedings, then after the time for appeal of the order that issues or
affirms the plan of reorganization--
``(i) the injunction shall be valid and enforceable and may
not be revoked or modified by any court except through appeal
in accordance with paragraph (6);
``(ii) no entity that pursuant to the plan of
reorganization or thereafter becomes a direct or indirect
transferee of, or successor to any assets of, a debtor or trust
that is the subject of the injunction shall be liable with
respect to any claim or demand made against it by reason of its
becoming such a transferee or successor; and
``(iii) no entity that pursuant to the plan of
reorganization or thereafter makes a loan to such a debtor or
trust or to such a successor or transferee shall, by reason of
making the loan, be liable with respect to any claim or demand
made against it, nor shall any pledge of assets made in
connection with such a loan be upset or impaired for that
reason;
``(B) Subparagraph (A) shall not be construed to--
``(i) imply that an entity described in subparagraph (A)
(ii) or (iii) would, if this paragraph were not applicable,
have liability by reason of any of the acts described in
subparagraph (A);
``(ii) relieve any such entity of the duty to comply with,
or of liability under, any Federal or State law regarding the
making of a fraudulent conveyance in a transaction described in
subparagraph (A) (ii) or (iii); or
``(iii) relieve a debtor of the debtor's obligation to
comply with the terms of the plan of reorganization or affect
the power of the court to exercise its authority under sections
1141 and 1142 to compel the debtor to do so.
``(4)(A)(i) Subject to subparagraph (B), an injunction under
paragraph (1) shall be valid and enforceable against all persons and
governmental units that it addresses.
``(ii) Notwithstanding section 524(e), such an injunction may bar
any action directed against a third party who--
``(I) is identifiable from the terms of the injunction (by
name or as part of an identifiable group); and
``(II) is alleged to be directly or indirectly liable for
the conduct of, claims against, or demands on the debtor.
``(B) With respect to a demand (including a demand directed against
a third party who is identifiable from the terms of the injunction
(either by name or as part of an identifiable group) and who is alleged
to be directly or indirectly liable for the conduct of, claims against,
or demands on the debtor) that is made subsequent to the confirmation
of a plan against any person or entity that is the subject of an
injunction issued under paragraph (1), the injunction shall be valid
and enforceable if, as part of the proceedings leading to its issuance,
the court appointed a legal representative for the purpose of
protecting the rights of persons that might subsequently assert such a
demand.
``(5) In this subsection, the term `demand' means a demand for
payment, present or future, that--
``(A) was not a claim during the proceedings leading to the
confirmation of a plan of reorganization;
``(B) arises out of the same or similar conduct or events
that gave rise to the claims addressed by the injunction issued
under paragraph (1); and
``(C) pursuant to the plan, is to be paid by a trust
described in paragraph (2)(B)(i).
``(6) Paragraph (3)(A)(i) does not bar an action taken by or at the
direction of an appellate court on appeal of an injunction issued under
paragraph (1) or of the order of confirmation that relates to the
injunction.
``(7) This subsection applies to any injunction of the nature
described in paragraph (1)(B) in effect, and any trust of the nature
described in paragraph (2)(B) in existence, on or after the date of
enactment of this subsection.
``(8) This subsection does not affect the operation of section 1144
or the power of the district court to refer a proceeding under section
157 of title 28 or any reference of a proceeding made prior to the date
of enactment of this subsection.
``(9) Nothing in subsection (g) shall affect the court's authority
to issue an injunction (including an injunction that requires claims
and demands to be presented for payment solely to a trust or any other
type of court approved settlement vehicle) which is entered pursuant to
an order approving a plan of reorganization.
``(10)(A) If, upon a motion by a representative appointed by the
court identified in paragraph (1)(A) to protect the interests of
persons with demands of the kind described in paragraph (2)(B)(ii)(I)
or on its own motion, the court finds, as a result of enhanced credible
estimating procedures with respect to such demands, inequities in the
distribution process of a trust of the nature described in paragraph
(2)(B), the court shall have, in addition to the powers over the trust
that the court may lawfully exercise under applicable nonbankruptcy
law, plenary equitable power to reform, restructure, or modify the
trust, the procedures under which it operates, or the timing, manner,
and amount of distributions to its beneficiaries and other rights of
the beneficiaries, giving special attention to cases presenting exigent
circumstances, as it shall determine to be fair, just, and reasonable
in light of the circumstances prevailing at the time of reformation,
restructure or modification.
``(B) Nothing in this paragraph shall be construed to grant the
court authority to modify or in any way alter the debtor's obligation
to comply with the terms of the plan of reorganization.''.
SEC. 222. REJECTION OF UNEXPIRED LEASES OF REAL PROPERTY OR TIMESHARE
INTERESTS.
(a) Amendment of Section 365.--Section 365(h) of title 11, United
States Code, is amended to read as follows:
``(h)(1)(A) If the trustee rejects an unexpired lease of real
property under which the debtor is the lessor--
``(i) if the rejection by the trustee amounts to such a
breach as would entitle the lessee to treat the lease as
terminated by virtue of its own terms, applicable nonbankruptcy
law, or any other lease or agreement that the lessee has made
with another party, the lessee under the lease may treat the
lease as terminated by the rejection; or
``(ii) if the term of the lease has commenced, the lessee
may retain its rights under the lease that are in or
appurtenant to the leasehold estate (including lease provisions
such as those relating to the amount and timing of payment of
rent and other amounts payable by the lessee or to any right of
use, possession, quiet enjoyment, subletting, assignment, or
hypothecation) for the balance of the term of the lease and for
any renewal or extension of such term as is enforceable under
applicable nonbankruptcy law.
``(B) If the lessee retains its rights under subparagraph (A)(ii),
the lessee may set off against the rent reserved under the lease for
the balance of the term after the date of the rejection of the lease,
and any renewal or extension of the lease, any damages occurring after
the date of rejection caused by the nonperformance of any obligation of
the debtor under the lease after that date, but the lessee does not
have any rights against the estate on account of any damages arising
after that date from the rejection, other than the setoff.
``(C) The rejection of a lease of real property in a shopping
center with respect to which the lessee elects to retain its rights
under subparagraph (A)(ii) does not affect the enforceability under
applicable nonbankruptcy law of any provision in the lease pertaining
to radius, location, use, exclusivity, or tenant mix or balance.
``(D) In this paragraph, `lessee' includes any successor, assign,
or mortgagee permitted by the lease.
``(2)(A) If the trustee rejects a timeshare interest under a
timeshare plan under which the debtor is the timeshare interest
seller--
``(i) the timeshare interest purchaser under the timeshare
plan may treat the timeshare plan as terminated by the
rejection if the rejection amounts to such a breach as would
entitle the timeshare interest purchaser to treat the timeshare
plan as terminated by virtue of its own terms, applicable
nonbankruptcy law, or any other agreement that the timeshare
interest purchaser has made with another party; or
``(ii) the timeshare interest purchaser may retain its
rights in the timeshare interest under any timeshare plan the
term of which has commenced for the balance of such term and
for any renewal or extension of such term as is enforceable
under applicable nonbankruptcy law.
``(B) If the timeshare interest purchaser retains its rights under
subparagraph (A), the timeshare interest purchaser may set off against
the moneys due for the timeshare interest for the balance of the term
after the date of the rejection of the timeshare interest, and any
renewal or extension thereof, any damages occurring after the date of
rejection caused by the nonperformance of any obligation of the debtor
under the timeshare plan after that date, but the timeshare interest
purchaser does not have any rights against the estate on account of any
damages arising after that date from the rejection, other than the
setoff.''.
(b) Technical Amendment.--Section 553(b)(1) of title 11, United
States Code, is amended by striking ``365(h)(2)'' and inserting
``365(h)''.
SEC. 223. CONTENTS OF PLAN.
Section 1123(b) of title 11, United States Code, is amended--
(1) by striking ``and'' at the end of paragraph (4);
(2) by redesignating paragraph (5) as paragraph (6); and
(3) by inserting after paragraph (4) the following new
paragraph:
``(5) in a case in which the debtor is a small business,
modify the rights of holders of secured claims, other than a
claim secured only by a security interest in real property that
is the debtor's principal residence, or of holders of unsecured
claims, or leave unaffected the rights of holders of any class
of claims, but the plan may not modify a claim pursuant to
section 506 of a person holding a primary or a junior security
interest in real property or a manufactured home (as defined in
section 603(6) of the National Manufactured Housing
Construction and Safety Standards Act of 1974 (42 U.S.C.
5402(6)) that is the debtor's principal residence, except that
the plan may modify the claim of a person holding such a junior
security interest that was undersecured at the time the
interest attached to the extent that the interest remains
undersecured;''.
SEC. 224. PRIORITY FOR INDEPENDENT SALES REPRESENTATIVES.
Section 507(a)(3) of title 11, United States Code, is amended to
read as follows:
``(3) Third, allowed unsecured claims, but only to the
extent of $2,000 for each individual or corporation, as the
case may be, earned within 90 days before the date of the
filing of the petition or the date of the cessation of the
debtor's business, whichever occurs first, for--
``(A) wages, salaries, or commissions, including
vacation, severance, and sick leave pay earned by an
individual; or
``(B) sales commissions earned by an individual or
by a corporation with only 1 employee, acting as an
independent contractor in the sale of goods or services
for the debtor in the ordinary course of the debtor's
business if, and only if, during the 12 months
preceding that date, at least 75 percent of the amount
that the individual or corporation earned by acting as
an independent contractor in the sale of goods or
services was earned from the debtor;''.
SEC. 225. AMEND BANKRUPTCY CODE.
(a) Amend section 541(b)(4), of title 11, United States Code to
read as follows:
``(4) any interest of the debtor in liquid or gaseous
hydrocarbons to the extent--
``(A)(i) the debtor has transferred or has agreed
to transfer such interest pursuant to a farmout
agreement or any written agreement directly related to
a farmout agreement; and
``(ii) but for the operation of this paragraph, the
estate could include such interest only by virtue of
section 365 or 544(a) of this title; or
``(B) the debtor has transferred such interest
pursuant to a conveyance of a production payment or an
oil and gas lease.
Paragraph (4) shall not be construed to exclude from the estate
any consideration the debtor retains, receives, or is entitled
to receive for transferring an interest in liquid or gaseous
hydrocarbons pursuant to a farmout agreement, production
payment, or oil and gas lease.''.
(b) Amend section 101, of title 11, United States Code by adding
after paragraph (42) the following:
``(43) `production payment' is not a gross royalty. A
production payment is a term overriding royalty which is an
interest in liquid or gaseous hydrocarbons in place or to be
produced from a property or properties, that entitles the owner
thereof to a share of production, or the value thereof, for a
term limited by time, quantity, or value realized, or any
formula based on one or more of such factors.''.
TITLE III--CONSUMER BANKRUPTCY ISSUES
SEC. 301. PERIOD FOR CURING DEFAULT RELATING TO PRINCIPAL RESIDENCE.
Section 1322 of title 11, United States Code, as amended by section
207(d), is amended--
(1) by redesignating subsections (c) and (d) as subsections
(d) and (e); and
(2) by inserting after subsection (b) the following new
subsection:
``(c) Notwithstanding State law and subsection (b)(2), and whether
or not a claim is matured or reduced to judgment prior to consummation
of a foreclosure sale, a debtor who at the time of filing a petition
under this title possesses any legal or equitable interest, including a
right of redemption, in real property securing a claim--
``(1) may cure a default and maintain payments on the claim
pursuant to subsection (b) (3) or (5); or
``(2) in a case in which the last payment on the original
payment schedule for the claim is due before the date on which
the final payment under the plan is due, may provide for the
payment of the claim pursuant to section 1325(a)(5).''.
SEC. 302. NONDISCHARGEABILITY OF FINE UNDER CHAPTER 13.
(a) In General.--Section 1328(a)(3) of title 11, United States
Code, is amended by inserting ``, or a fine to the extent such fine
exceeds $500, '' after ``restitution''.
(b) Technical Amendment.--Section 3613(f) of title 18, United
States Code, is amended by striking ``No'' and inserting ``Except as
provided in section 1328(a)(3) of title 11, no''.
SEC. 303. IMPAIRMENT OF EXEMPTIONS.
(a) In General.--Section 522(f) of title 11, United States Code, is
amended--
(1) by inserting ``(1)'' before ``Notwithstanding'';
(2) by redesignating paragraph (1) as subparagraph (A);
(3) by redesignating paragraph (2) as subparagraph (B) and
subparagraphs (A), (B), and (C) of that paragraph as clauses
(i), (ii), and (iii); and
(4) by adding at the end the following new paragraph:
``(2)(A) For the purposes of this subsection, a lien shall
be considered to impair an exemption to the extent that the sum
of--
``(i) the lien;
``(ii) all other liens on the property that are
equal or greater in seniority to the lien; and
``(iii) the amount of the exemption that the debtor
could claim if there were no liens on the property,
exceeds the value that the debtor's interest in the property
would have in the absence of any liens.
``(B) In the case of a property subject to more than 1
lien, a lien that has been avoided shall not be considered in
making the calculation under subparagraph (A) with respect to
other liens.''.
(b) Rule of Construction; Application of Amendment.--Section
522(f)(2) of title 11, United States Code, as added by subsection (a)--
(1) shall not be construed to apply with respect to a
judgment arising out of a mortgage foreclosure; and
(2) shall not apply with respect to a nonpossessory,
nonpurchase-money security interest given before the date of
enactment of this Act (including a security interest with
respect to which the value of the collateral increases after a
case under that title is commenced).
SEC. 304. PROTECTION OF CHILD SUPPORT AND ALIMONY.
(a) Relief From Automatic Stay.--Section 362(b)(2) of title 11,
United States Code, is amended to read as follows:
``(2) under subsection (a) of this section--
``(A) of the commencement or continuation of an
action or proceeding for--
``(i) the establishment of paternity; or
``(ii) the establishment or modification of
an order for alimony, maintenance, or support;
or
``(B) of the collection of alimony, maintenance, or
support from property that is not property of the
estate;''.
(b) Priority of Claims.--
(1) Alimony or support.--Section 507(a) of title 11, United
States Code, is amended--
(A) in paragraph (7) by striking ``(7) Seventh''
and inserting ``(8) Eighth'';
(B) in paragraph (8) by striking ``(8) Eighth'' and
inserting ``(9) Ninth''; and
(C) by inserting after paragraph (6) the following
new paragraph:
``(7) Seventh, allowed claims for debts to a spouse, former
spouse, or child of the debtor, for alimony to, maintenance
for, or support of such spouse or child, in connection with a
separation agreement, divorce decree or other order of a court
of record, determination made in accordance with State or
territorial law by a governmental unit, or property settlement
agreement, but not to the extent that such debt--
``(A) is assigned to another entity, voluntarily,
by operation of law, or otherwise; or
``(B) includes a liability designated as alimony,
maintenance, or support, unless such liability is
actually in the nature of alimony, maintenance or
support.''.
(2) Technical amendments.--Title 11, United States Code, is
amended--
(A) in section 502(i) by striking ``507(a)(7)'' and
inserting ``507(a)(8)'';
(B) in section 503(b)(1)(B)(i) by striking
``507(a)(7)'' and inserting ``507(a)(8)'';
(C) in section 523(a)(1)(A) by striking
``507(a)(7)'' and inserting ``507(a)(8)'';
(D) in section 724(b)(2) by striking ``or
507(a)(6)'' and inserting ``507(a)(6), or 507(a)(7)'';
(E) in section 726(b) by striking ``or (7)'' and
inserting ``, (7), or (8)'';
(F) in section 1123(a)(1) by striking ``507(a)(7)''
and inserting ``507(a)(8)'';
(G) in section 1129(a)(9)--
(i) in subparagraph (B) by striking ``or
507(a)(6)'' and inserting ``, 507(a)(6), or
507(a)(7)''; and
(ii) in subparagraph (C) by striking
``507(a)(7)'' and inserting ``507(a)(8)''.
(c) Protection of Liens.--Section 522(f) of title 11, United States
Code, as amended by section 303, is amended by amending paragraph
(1)(A) to read as follows:
``(A) a judicial lien (other than a judicial lien that
secures a debt to a spouse, former spouse, or child of the
debtor, for alimony to, maintenance for, or support of the
spouse or child, in connection with a separation agreement,
divorce decree or other order of a court of record,
determination made in accordance with State or territorial law
by a governmental unit, or property settlement agreement, to
the extent that the debt--
``(i) is not assigned to another entity,
voluntarily, by operation of law, or otherwise; and
``(ii) includes a liability designated as alimony,
maintenance, or support, unless such liability is
actually in the nature of alimony, maintenance or
support); or''.
(d) Protection Against Trustee Avoidance.--Section 547(c) of title
11, United States Code, is amended--
(1) by striking ``or'' at the end of paragraph (6);
(2) by redesignating paragraph (7) as paragraph
(8); and
(3) by inserting after paragraph (6) the following
new paragraph:
``(7) to the extent that the transfer was a bona fide
payment of a debt to a spouse, former spouse, or child of the
debtor, for alimony to, maintenance for, or support of such
spouse or child, in connection with a separation agreement,
divorce decree or other order of a court of record,
determination made in accordance with State or territorial law
by a governmental unit, or property settlement agreement, but
not to the extent that such debt--
``(A) is assigned to another entity, voluntarily,
by operation of law, or otherwise; or
``(B) includes a liability designated as alimony,
maintenance, or support, unless such liability is
actually in the nature of alimony, maintenance or
support; or''.
(e) Appearance Before Court.--A child support creditor or its
representative shall be permitted to appear and intervene without
charge and without meeting any special local court rule requirement for
attorney appearances in any bankruptcy proceeding in any bankruptcy
court or district court of the United States if the creditor or
representative files with the court a statement describing in detail
the child support debt, its status, and other characteristics.
SEC. 305. BANKRUPTCY PETITION PREPARERS.
(a) Amendment of Chapter 1.--
(1) In general.--Chapter 1 of title 11, United States Code,
is amended by adding at the end the following new section:
``SEC. 110. PENALTY FOR PERSONS WHO NEGLIGENTLY OR FRAUDULENTLY PREPARE
BANKRUPTCY PETITIONS.
``(a) Definition.--In this section--
```bankruptcy petition preparer' means a person, other than
an attorney or an employee of an attorney, who prepares for
compensation a document for filing.
```document for filing' means a petition or any other
document prepared for filing by a debtor in a United States
bankruptcy court or a United States district court in
connection with a case under this title.
``(b) Signing of Documents.--(1) A bankruptcy petition preparer who
prepares a document for filing shall sign the document and print on the
document the preparer's name and address.
``(2) A bankruptcy petition preparer who fails to comply with
paragraph (1) may be fined not more than $500 for each such failure
unless the failure is due to reasonable cause.
``(c) Furnishing of Identifying Number.--(1) A bankruptcy petition
preparer who prepares a document for filing shall place on the
document, after the preparer's signature, an identifying number that
identifies the individuals who prepared the document.
``(2) For purposes of this section, the identifying number of a
bankruptcy petition preparer shall be the Social Security account
number of each individual who prepared the document or assisted in its
preparation.
``(3) A bankruptcy petition preparer who fails to comply with
paragraph (1) may be fined not more than $500 for each such failure
unless the failure is due to reasonable cause.
``(d) Furnishing of Copy to the Debtor.--(1) A bankruptcy petition
preparer shall, not later than the time at which a document for filing
is presented for the debtor's signature, furnish to the debtor a copy
of the document.
``(2) A bankruptcy petition preparer who fails to comply with
paragraph (1) may be fined not more than $500 for each such failure
unless the failure is due to reasonable cause.
``(e) No Authorization To Execute Documents.--(1) A bankruptcy
petition preparer shall not execute any document on behalf of a debtor.
``(2) A bankruptcy petition preparer may be fined not more than
$500 for each document executed in violation of paragraph (1).
``(f) Advertising.--(1) A bankruptcy petition preparer shall not
use the word ``legal'' or any similar term in any advertisements, or
advertise under any category that includes the word ``legal'' or any
similar term.
``(2) A bankruptcy petition preparer shall be fined not more than
$500 for each violation of paragraph (1).
``(g) Court Fees.--(1) A bankruptcy petition preparer shall not
collect or receive any payment from the debtor or on behalf of the
debtor for the court fees in connection with filing the petition.
``(2) A bankruptcy petition preparer shall be fined not more than
$500 for each violation of paragraph (1).
``(h) Fees for Services.--(1) Within 10 days after the date of the
filing of a petition, a bankruptcy petition preparer shall file a
declaration under penalty of perjury disclosing any fee received from
or on behalf of the debtor within 12 months immediately prior to the
filing of the case, and any unpaid fee charged to the debtor.
``(2) The court shall disallow and order the immediate turnover to
the bankruptcy trustee of any fee referred to in paragraph (1) found to
be in excess of the value of typing services for the documents
prepared. The debtor may exempt any funds so recovered under section
522(b).
``(3) The debtor, the trustee, a creditor, or the United States
trustee may file a motion for an order under paragraph (2).
``(4) A bankruptcy petition preparer shall be fined not more than
$500 for each failure to comply with a court order to turn over funds
within 30 days of service of such order.
``(i) Damages.--(1) If a bankruptcy case or related proceeding is
dismissed because of the failure to file bankruptcy forms, the
negligence or intentional disregard of this title or the bankruptcy
rules by a bankruptcy petition preparer, or if a bankruptcy petition
preparer violates this section or commits any fraudulent, unfair, or
deceptive act, the bankruptcy court shall certify that fact to the
district court, and the district court, on motion of the debtor, the
trustee, or a creditor and after a hearing, shall order the bankruptcy
petition preparer to pay to the debtor--
``(A) the debtor's actual damages;
``(B) the greater of--
``(i) $2,000; or
``(ii) twice the amount paid by the debtor to the
bankruptcy petition preparer for the preparer's
services; and
``(C) reasonable attorneys' fees and costs in moving for
damages under this subsection.
``(2) If the trustee or creditor moves for damages on behalf of the
debtor under this subsection, the bankruptcy petition preparer shall be
ordered to pay the movant the additional amount of $1,000 plus
reasonable attorneys' fees and costs incurred.
``(j) Injunctive Relief.--
``(1) In general.--A debtor for whom a bankruptcy petition
preparer has prepared a document for filing, the trustee, a
creditor, or the United States trustee in the district in which
the bankruptcy petition preparer resides, has conducted
business, or the United States trustee in any other district in
which the debtor resides may bring a civil action to enjoin a
bankruptcy petition preparer from engaging in any conduct in
violation of this section or from further acting as a
bankruptcy petition preparer.
``(2) Conduct.--(A) In an action under paragraph (1), if
the court finds that--
``(i) a bankruptcy petition preparer has--
``(I) engaged in conduct in violation of
this section or of any provision of this title
a violation of which subjects a person to
criminal penalty;
``(II) misrepresented the preparer's
experience or education as a bankruptcy
petition preparer; or
``(III) engaged in any other fraudulent,
unfair, or deceptive conduct; and
``(ii) injunctive relief is appropriate to prevent
the recurrence of such conduct,
the court may enjoin the bankruptcy petition preparer from
engaging in such conduct.
``(B) If the court finds that a bankruptcy petition
preparer has continually engaged in conduct described in clause
(i) (I), (II), or (III) and that an injunction prohibiting such
conduct would not be sufficient to prevent such person's
interference with the proper administration of this title, or
has not paid a penalty imposed under this section, the court
may enjoin the person from acting as a bankruptcy petition
preparer.
``(3) Attorney's fee.--The court shall award to a debtor,
trustee, or creditor that brings a successful action under this
subsection reasonable attorney's fees and costs of the action,
to be paid by the bankruptcy petition preparer.
``(k) Unauthorized Practice of Law.--Nothing in this section shall
be construed to permit activities that are otherwise prohibited by law,
including rules and laws that prohibit the unauthorized practice of
law.''.
(2) Technical amendment.--The chapter analysis for chapter
1 of title 11, United States Code, is amended by adding at the
end the following new item:
``110. Penalty for persons who negligently or fraudulently prepare
bankruptcy petitions.''.
(b) Amendment of Title 18, United States Code.--
(1) Offenses.--Chapter 9 of title 18, United States Code,
is amended--
(A) by amending sections 152, 153, and 154 to read
as follows:
``Sec. 152. Concealment of assets; false oaths and claims; bribery
``A person who--
``(1) knowingly and fraudulently conceals from a custodian,
trustee, marshal, or other officer of the court charged with
the control or custody of property, or, in connection with a
case under title 11, from creditors or the United States
Trustee, any property belonging to the estate of a debtor;
``(2) knowingly and fraudulently makes a false oath or
account in or in relation to any case under title 11;
``(3) knowingly and fraudulently makes a false declaration,
certificate, verification, or statement under penalty of
perjury as permitted under section 1746 of title 28, in or in
relation to any case under title 11;
``(4) knowingly and fraudulently presents any false claim
for proof against the estate of a debtor, or uses any such
claim in any case under title 11, in a personal capacity or as
or through an agent, proxy, or attorney;
``(5) knowingly and fraudulently receives any material
amount of property from a debtor after the filing of a case
under title 11, with intent to defeat the provisions of title
11;
``(6) knowingly and fraudulently gives, offers, receives,
or attempts to obtain any money or property, remuneration,
compensation, reward, advantage, or promise thereof for acting
or forbearing to act in any case under title 11;
``(7) in a personal capacity or as an agent or officer of
any person or corporation, in contemplation of a case under
title 11 by or against the person or any other person or
corporation, or with intent to defeat the provisions of title
11, knowingly and fraudulently transfers or conceals any of his
property or the property of such other person or corporation;
``(8) after the filing of a case under title 11 or in
contemplation thereof, knowingly and fraudulently conceals,
destroys, mutilates, falsifies, or makes a false entry in any
recorded information (including books, documents, records, and
papers) relating to the property or financial affairs of a
debtor; or
``(9) after the filing of a case under title 11, knowingly
and fraudulently withholds from a custodian, trustee, marshal,
or other officer of the court or a United States Trustee
entitled to its possession, any recorded information (including
books, documents, records, and papers) relating to the property
or financial affairs of a debtor,
shall be fined not more than $5,000, imprisoned not more than 5 years,
or both.
``Sec. 153. Embezzlement against estate
``(a) Offense.--A person described in subsection (b) who knowingly
and fraudulently appropriates to the person's own use, embezzles,
spends, or transfers any property or secretes or destroys any document
belonging to the estate of a debtor shall be fined not more than
$5,000, imprisoned not more than 5 years, or both.
``(b) Person to Whom Section Applies.--A person described in this
subsection is one who has access to property or documents belonging to
an estate by virtue of the person's participation in the administration
of the estate as a trustee, custodian, marshal, attorney, or other
officer of the court or as an agent, employee, or other person engaged
by such an officer to perform a service with respect to the estate.
``Sec. 154. Adverse interest and conduct of officers
``A person who, being a custodian, trustee, marshal, or other
officer of the court--
``(1) knowingly purchases, directly or indirectly, any
property of the estate of which the person is such an officer
in a case under title 11;
``(2) knowingly refuses to permit a reasonable opportunity
for the inspection by parties in interest of the documents and
accounts relating to the affairs of estates in the person's
charge by parties when directed by the court to do so; or
``(3) knowingly refuses to permit a reasonable opportunity
for the inspection by the United States Trustee of the
documents and accounts relating to the affairs of states in the
person's charge,
shall be fined not more than $5,000 and shall forfeit the person's
office, which shall thereupon become vacant.''; and
(B) by adding at the end the following new section:
``Sec. 156. Willful disregard of bankruptcy law or rule
``(a) Definitions.--In this section--
```bankruptcy petition preparer' means a person, other than
an attorney or an employee of an attorney, who prepares for
compensation a document for filing.
```document for filing' means a petition or any other
document prepared for filing by a debtor in a United States
bankruptcy court or a United States district court in
connection with a case under this title.
``(b) Offense.--If a bankruptcy case or related proceeding is
dismissed because of a willful attempt by a bankruptcy petition
preparer in any manner to disregard the requirements of title 11,
United States Code, or the Bankruptcy Rules, the bankruptcy petition
preparer shall be fined $5,000.''.
(2) Technical amendments.--The chapter analysis for chapter
9 of title 18, United States Code, is amended--
(A) by amending the item relating to section 153 to
read as follows:
``Sec. 153. Embezzlement against estate.'';
and
(B) by adding at the end the following new item:
``Sec. 156. Willful disregard of bankruptcy law or rule.''.
SEC. 306. CONVERSION OR DISMISSAL.
Section 1307 of title 11, United States Code, is amended by adding
at the end the following new subsection:
``(g) The clerk of the court shall give notice to all creditors not
later than 30 days after the entry of an order of conversion or
dismissal.''.
SEC. 307. CONTENTS OF PLAN.
Section 1322(b)(2) of title 11, United States Code, is amended by
striking ``claims;'' and inserting ``claims, but the plan may not
modify a claim pursuant to section 506 of a person holding a primary or
a junior security interest in real property or a manufactured home (as
defined in section 603(6) of the National Manufactured Housing
Construction and Safety Standards Act of 1974 (42 U.S.C. 5402(6)) that
is the debtor's principal residence, except that the plan may modify
the claim of a person holding such a junior security interest that was
undersecured at the time the interest attached to the extent that the
interest remains undersecured;''.
SEC. 308. STAY OF ACTION AGAINST CODEBTOR.
Section 1301 of title 11, United States Code, is amended--
(1) in subsection (c)--
(A) by striking ``or'' at the end of paragraph (2);
(B) by striking the period at the end of paragraph
(3) and inserting ``; or''; and
(C) by adding at the end the following new
paragraph:
``(4) the claim is for an amount valued at not greater than
$25,000, and such relief is not a substantial impediment to an
effective reorganization by the debtor, and unless the codebtor
has demonstrated an inability to pay such claim or a
substantial portion of such claim.''; and
(2) by adding at the end the following new subsection:
``(e) If the relief sought by the creditor pursuant to subsection
(c)(4) is granted by the court, the codebtor shall by subrogation have
the same rights as the creditor, under this title, against the debtor
to the extent of the amount of relief obtained from the codebtor.
Pending any delay in obtaining relief from the codebtor, after the
court order, payment by the debtor shall continue to be paid to the
creditor, but subject to the developing subrogation rights of the
codebtor.''.
SEC. 309. EXEMPTION FOR HOUSEHOLD GOODS.
Section 522(a) of title 11, United States Code, is amended--
(1) by striking ``and'' at the end of paragraph (1) and
redesignating that paragraph as paragraph (2);
(2) by inserting before paragraph (2), as redesignated by
paragraph (1), the following new paragraph:
``(1) `antique', for purposes of subsection (d), means an
item that was more than 100 years old at the time it was
acquired by the debtor, including such an item that has been
repaired or renovated without changing its original form or
character;'';
(3) by redesignating paragraph (2), as designated prior to
the date of enactment of this Act, as paragraph (4); and
(4) by inserting after paragraph (2), as redesignated by
paragraph (1), the following new paragraph:
``(3) `household goods', for purposes of subsection (d),
means clothing, furniture, appliances, linens, china, crockery,
kitchenware, and personal effects of the debtor and the
debtor's dependents, but does not include--
``(A) works of art;
``(B) electronic entertainment equipment (except to
the extent of 1 television and 1 radio);
``(C) antiques; and
``(D) jewelry other than wedding rings; and
SEC. 310. PROFESSIONAL FEES.
Section 330(a) of title 11, United States Code, is amended to read
as follows:
``(a)(1) After notice to the parties in interest and the United
States trustee and a hearing, and subject to sections 326, 328, and
329, the court may award to a trustee, an examiner, a professional
person employed under section 327 or 1103--
``(A) reasonable compensation for actual, necessary
services rendered by the trustee, examiner, professional
person, or attorney and by any paraprofessional person employed
by any such person; and
``(B) reimbursement for actual, necessary expenses.
``(2) The court may, on its own motion or on the motion of the
United States Trustee, the United States Trustee for the District or
Region, the trustee for the estate, or any other party in interest,
award compensation that is less than the amount of compensation that is
requested.
``(3)(A) In determining the amount of reasonable compensation to be
awarded, the court shall consider the nature, the extent, and the value
of such services, taking into account all relevant factors, including--
``(A) the time spent on such services;
``(B) the rates charged for such services;
``(C) whether the services were necessary to the
administration of, or beneficial at the time at which the
service was rendered toward the completion of, a case under
this title;
``(D) the total value of the estate and the amount of funds
or other property available for distribution to all creditors,
both secured and unsecured;
``(E) whether the services were performed within a
reasonable amount of time commensurate with the complexity,
importance, and nature of the problem, issue, or task
addressed; and
``(F) whether the compensation is reasonable based on the
customary compensation charged by comparably skilled
practitioners in cases other than cases under this title.
``(4)(A) Except as provided in subparagraph (B), the court shall
not allow compensation for--
``(i) unnecessary duplication of services; or
``(ii) services that were not--
``(I) reasonably likely to benefit the debtor's
estate; or
``(II) necessary to the administration of the case.
``(B) In a chapter 12 or chapter 13 case in which the debtor is an
individual, the court may allow reasonable compensation to the debtor's
attorney for representing the interests of the debtor in connection
with the bankruptcy case based on a consideration of the benefit and
necessity of such services to the debtor and the other factors set
forth in this section.
``(5) The court shall reduce the amount of compensation awarded
under this section by the amount of any interim compensation awarded
under section 331, and, if the amount of such interim compensation
exceeds the amount of compensation awarded under this section, may
order the return of the excess to the estate.
``(6) Any compensation awarded for the preparation of a fee
application shall be based on the level and skill reasonably required
to prepare the application.''.
SEC. 311. INTEREST ON INTEREST.
(a) Chapter 11.--Section 1123 of title 11, United States Code, is
amended by adding at the end the following new subsection:
``(d) Notwithstanding subsection (a) of this section and sections
506(b), 1129(a)(7), and 1129(b) of this title, if it is proposed in a
plan to cure a default, the amount necessary to cure the default, shall
be determined in accordance with the underlying agreement and
applicable nonbankruptcy law.''.
(b) Chapter 12.--Section 1222 of title 11, United States Code, is
amended by adding at the end the following new subsection:
``(d) Notwithstanding subsection (b)(2) of this section and
sections 506(b) and 1225(a)(5) of this title, if it is proposed in a
plan to cure a default, the amount necessary to cure the default, shall
be determined in accordance with the underlying agreement and
applicable nonbankruptcy law.''.
(c) Chapter 13.--Section 1322 of title 11, United States Code, is
amended by adding at the end the following new subsection:
``(f) Notwithstanding subsection (b)(2) of this section and
sections 506(b) and 1325(a)(5) of this title, if it is proposed in a
plan to cure a default, the amount necessary to cure the default, shall
be determined in accordance with the underlying agreement and
applicable nonbankruptcy law.''.
(d) Effective Date.--The amendments made by this section shall
apply to agreements described in sections 1123(d), 1222(d), and 1322(f)
of title 11, United States Code, as added by this section, that are
entered into after the date of enactment of this Act.
SEC. 312. FAIRNESS TO CONDOMINIUM AND COOPERATIVE OWNERS.
Section 523(a) of title 11, United States Code, as amended by
section 210, is amended--
(1) by striking ``or'' at the end of paragraph (13);
(2) by adding ``or'' at the end of paragraph (14); and
(3) by adding at the end the following new paragraph:
``(15) for a fee that becomes due and payable after the
order for relief to a membership association with respect to
the debtor's interest in a dwelling unit that has condominium
ownership or in a share of a cooperative housing corporation,
if such fee is payable for a period during a substantial
portion of which--
``(A) the debtor physically occupied a dwelling
unit in the condominium or cooperative project; or
``(B) the debtor rented the dwelling unit to a
tenant and received payments from the tenant for such
period,
but nothing in this paragraph shall except from discharge the
debt of a debtor for a membership association fee for a period
arising before entry of the order for relief in a pending or
subsequent bankruptcy proceeding.''.
SEC. 313. NONAVOIDABILITY OF FIXING OF LIEN ON TOOLS AND IMPLEMENTS OF
TRADE, ANIMALS, AND CROPS.
(a) Amendment.--Section 522(f) of title 11, United States Code, as
amended by section 303(c), is amended--
(1) by striking ``Notwithstanding any waiver of
exemptions,'' and inserting ``(1) Notwithstanding any waiver of
exemptions but subject to paragraph (2)'';
(2) by striking ``(1) a judicial'' and inserting ``(A) a
judicial'';
(3) by striking ``(A) is not assigned'' and inserting ``(i)
is not assigned'';
(4) by striking ``(B) includes a liability'' and inserting
``(ii) includes a liability'';
(5) by striking ``(2) a nonpossessory'' and inserting ``(B)
a nonpossessory'';
(6) by striking ``(A) household'' and inserting ``(i)
household'';
(7) by striking ``(B) implements, professional books, or
tools,'' and inserting ``(ii) implements, professional books,
or tools''
(8) by striking ``(C) professionally'' and inserting
``(iii) professionally''; and
(9) by adding at the end the following new paragraph:
``(2) In a case in which State law that is applicable to the
debtor--
``(A) permits a person to voluntarily waive a right to
claim exemptions under subsection (d) or prohibits a debtor
from claiming exemptions under subsection (d); and
``(B) permits the debtor to claim exemptions under State
law without limitation in amount, except to the extent that the
debtor has permitted the fixing of a consensual lien on any
property,
the debtor may not avoid the fixing of a lien on an interest of the
debtor or a dependent of the debtor in property if the lien is a
nonpossessory, nonpurchase-money security interest in implements,
professional books, or tools of the trade of the debtor or a dependent
of the debtor or farm animals or crops of the debtor or a dependent of
the debtor.''.
(b) Application of Amendment.--The amendments made by subsection
(a) shall not apply with respect to a case commenced under title 11,
United States Code, before the date of enactment of this Act.
SEC. 314. NONDISCHARGEABILITY OF DEBT FOR MONEY, PROPERTY, SERVICES, OR
CREDIT OBTAINED BY FALSE PRETENSE, FALSE REPRESENTATION,
OR FRAUD.
Section 1328(a)(2) of title 11, United States Code, is amended by
inserting ``(2)(A),'' after ``paragraph''.
SEC. 315. CONVERSION OF CASE UNDER CHAPTER 13.
Section 348 of title 11, United States Code, is amended by adding
at the end the following new subsection:
``(f) When a case under chapter 13 is converted to another
chapter--
``(1) property of the estate in the converted case shall
consist of property of the estate, as of the date of filing of
the petition, that remains in the possession of or is under the
control of the debtor on the date of conversion; and
``(2) valuations of property and of allowed secured claims
in the chapter 13 case shall apply in the converted case, with
allowed secured claims reduced to the extent that they have
been paid in accordance with the chapter 13 plan.''.
SEC. 316. RENT-TO-OWN CONTRACTS.
(a) Definition.--Section 101 of title 11, United States Code, is
amended by inserting in their proper alphabetical positions the
following new definitions:
`` `consumer good' means an item of personal property (not
including a motor vehicle) acquired by an individual primarily
for a personal, family, or household purpose.''.
`` `rent-to-own contract' means an agreement, in the form
of a terminable lease or bailment of a consumer good, between a
person regularly engaged in the business of making consumer
goods available to individuals and an individual, under which--
``(A) the lessee or bailee--
``(i) has the right of possession and use
of the consumer good; and
``(ii) has the option to renew the
agreement periodically by making payments
specified in the agreement; and
``(B) the lessor or bailor agrees, orally or in
writing, to transfer ownership of the consumer good to
the lessee or bailee upon the fulfillment of all
obligations of the lessee or bailee for the transfer
under the agreement.''.
(b) Treatment of Rent-To-Own Contracts as Secured Purchase
Contracts.--
(1) Chapter 7.--Subchapter II of chapter 7 of title 11,
United States Code, is amended by adding at the end the
following new section:
``Sec. 729. Rent-to-own contracts
``In a proceeding under this chapter in which the debtor is in
possession of a consumer good under a rent-to-own contract, the debtor
and the lessor or bailor shall be accorded the same rights and
obligations with respect to the consumer good, respectively, as they
would be accorded if the rent-to-own contract had been a purchase
contract.''.
(2) Chapter 13.--Subchapter I of chapter 13 of title 11,
United States Code, is amended by adding at the end the
following new section:
``Sec. 1308. Rent-to-own contracts
``In a proceeding under this chapter in which the debtor is in
possession of a consumer good under a rent-to-own contract, the debtor
and the lessor or bailor shall be accorded the same rights and
obligations with respect to the consumer good, respectively, as they
would be accorded if the rent-to-own contract had been a purchase
contract.''.
(c) Technical Amendments.--
(1) Chapter 7.--The chapter analysis for chapter 7 of title
11, United states Code, is amended by inserting after the item
for section 728 the following new item:
``729. Rent-To-Own Contracts.''.
(2) Chapter 13.--The chapter analysis for chapter 13 of
title 11, United states Code, is amended by inserting after the
item for section 1307 the following new item:
``1308. Rent-To-Own Contracts.''.
TITLE IV--BANKRUPTCY REVIEW COMMISSION
SEC. 401. SHORT TITLE.
This title may be cited as the ``National Bankruptcy Review
Commission Act''.
SEC. 402. ESTABLISHMENT.
There is established the National Bankruptcy Review Commission
(referred to as the ``Commission'').
SEC. 403. DUTIES OF THE COMMISSION.
The duties of the Commission are--
(1) to investigate and study issues and problems relating
to title 11, United States Code (commonly known as the
``Bankruptcy Code'');
(2) to evaluate the advisability of proposals and current
arrangements with respect to such issues and problems;
(3) to prepare and submit to the Congress, the Chief
Justice, and the President a report in accordance with section
408; and
(4) to solicit divergent views of all parties concerned
with the operation of the bankruptcy system.
SEC. 404. MEMBERSHIP.
(a) Number and Appointment.--The Commission shall be composed of 9
members as follows:
(1) Three members appointed by the President, 1 of whom
shall be designated as chairman by the President.
(2) One member shall be appointed by the President pro
tempore of the Senate.
(3) One member shall be appointed by the Minority Leader of
the Senate.
(4) One member shall be appointed by the Speaker of the
House of Representatives.
(5) One member shall be appointed by the Minority Leader of
the House of Representatives.
(6) Two members appointed by the Chief Justice.
(b) Term.--Members of the Commission shall be appointed for the
life of the Commission.
(c) Quorum.--Five members of the Commission shall constitute a
quorum, but a lesser number may conduct meetings.
(d) Appointment Deadline.--The first appointments made under
subsection (a) shall be made within 60 days after the date of enactment
of this Act.
(e) First Meeting.--The first meeting of the Commission shall be
called by the chairman and shall be held within 90 days after the date
of enactment of this Act.
(f) Vacancy.--A vacancy on the Commission resulting from the death
or resignation of a member shall not affect its powers and shall be
filled in the same manner in which the original appointment was made.
(g) Continuation of Membership.--If any member of the Commission
who was appointed to the Commission as a member of Congress or as an
officer or employee of a government leaves that office, or if any
member of the Commission who was not appointed in such a capacity
becomes an officer or employee of a government, the member may continue
as a member of the Commission for not longer than the 90-day period
beginning on the date the member leaves that office or becomes such an
officer or employee, as the case may be.
(h) Consultation Prior to Appointment.--Prior to the appointment of
members of the Commission, the President, the President pro tempore of
the Senate, the Speaker of the House of Representatives, and the Chief
Justice shall consult with each other to ensure fair and equitable
representation of various points of view in the Commission and its
staff.
SEC. 405. COMPENSATION OF THE COMMISSION.
(a) Pay.--
(1) Nongovernment employees.--Each member of the Commission
who is not otherwise employed by the United States Government
shall be entitled to receive the daily equivalent of the annual
rate of basic pay payable for level IV of the Executive
Schedule under section 5315 of title 5, United States Code, for
each day (including travel time) during which he or she is
engaged in the actual performance of duties as a member of the
Commission.
(2) Government employees.--A member of the Commission who
is an officer or employee of the United States Government shall
serve without additional compensation.
(b) Travel.--Members of the Commission shall be reimbursed for
travel, subsistence, and other necessary expenses incurred by them in
the performance of their duties.
SEC. 406. STAFF OF COMMISSION; EXPERTS AND CONSULTANTS.
(a) Staff.--
(1) Appointment.--The chairman of the Commission may,
without regard to the civil service laws and regulations,
appoint, and terminate an executive director and such other
personnel as are necessary to enable the Commission to perform
its duties. The employment of an executive director shall be
subject to confirmation by the Commission.
(2) Compensation.--The chairman of the Commission may fix
the compensation of the executive director and other personnel
without regard to the provisions of chapter 51 and subchapter
II of chapter 53 of title 5, United States Code, relating to
classification of positions and General Schedule pay rates,
except that the rate of pay for the executive director and
other personnel may not exceed the rate payable for level V of
the Executive Schedule under section 5316 of that title.
(b) Experts and Consultants.--The Commission may procure temporary
and intermittent services of experts and consultants under section
3109(b) of title 5, United States Code.
SEC. 407. POWERS OF THE COMMISSION.
(a) Hearings and Meetings.--The Commission or, on authorization of
the Commission, a member of the Commission, may hold such hearings, sit
and act at such time and places, take such testimony, and receive such
evidence, as the Commission considers appropriate. The Commission or a
member of the Commission may administer oaths or affirmations to
witnesses appearing before it.
(b) Official Data.--The Commission may secure directly from any
Federal department, agency, or court information necessary to enable it
to carry out this title. Upon request of the chairman of the
Commission, the head of a Federal department or agency or chief judge
of a Federal court shall furnish such information, consistent with law,
to the Commission.
(c) Facilities and Support Services.--The Administrator of General
Services shall provide to the Commission on a reimbursable basis such
facilities and support services as the Commission may request. Upon
request of the Commission, the head of a Federal department or agency
may make any of the facilities or services of the agency available to
the Commission to assist the Commission in carrying out its duties
under this title.
(d) Expenditures and Contracts.--The Commission or, on
authorization of the Commission, a member of the Commission may make
expenditures and enter into contracts for the procurement of such
supplies, services, and property as the Commission or member considers
appropriate for the purposes of carrying out the duties of the
Commission. Such expenditures and contracts may be made only to such
extent or in such amounts as are provided in appropriation Acts.
(e) Mails.--The Commission may use the United States mails in the
same manner and under the same conditions as other Federal departments
and agencies of the United States.
(f) Gifts.--The Commission may accept, use, and dispose of gifts or
donations of services or property.
SEC. 408. REPORT.
The Commission shall submit to the Congress, the Chief Justice, and
the President a report not later than 2 years after the date of its
first meeting. The report shall contain a detailed statement of the
findings and conclusions of the Commission, together with its
recommendations for such legislative or administrative action as it
considers appropriate.
SEC. 409. TERMINATION.
The Commission shall cease to exist on the date that is 30 days
after the date on which it submits its report under section 408.
SEC. 410. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated $1,500,000 to carry out this
title.
TITLE V--BANKRUPTCY FRAUD
SEC. 501. BANKRUPTCY FRAUD.
(a) In General.--
(1) Offenses.--Chapter 9 of title 18, United States Code,
is amended--
(A) by amending sections 152, 153, and 154 to read
as follows:
``Sec. 152. Concealment of assets; false oaths and claims; bribery
``A person who--
``(1) knowingly and fraudulently conceals from a custodian,
trustee, marshal, or other officer of the court charged with
the control or custody of property, or, in connection with a
case under title 11, from creditors or the United States
Trustee, any property belonging to the estate of a debtor;
``(2) knowingly and fraudulently makes a false oath or
account in or in relation to any case under title 11;
``(3) knowingly and fraudulently makes a false declaration,
certificate, verification, or statement under penalty of
perjury as permitted under section 1746 of title 28, in or in
relation to any case under title 11;
``(4) knowingly and fraudulently presents any false claim
for proof against the estate of a debtor, or uses any such
claim in any case under title 11, in a personal capacity or as
or through an agent, proxy, or attorney;
``(5) knowingly and fraudulently receives any material
amount of property from a debtor after the filing of a case
under title 11, with intent to defeat the provisions of title
11;
``(6) knowingly and fraudulently gives, offers, receives,
or attempts to obtain any money or property, remuneration,
compensation, reward, advantage, or promise thereof for acting
or forbearing to act in any case under title 11;
``(7) in a personal capacity or as an agent or officer of
any person or corporation, in contemplation of a case under
title 11 by or against the person or any other person or
corporation, or with intent to defeat the provisions of title
11, knowingly and fraudulently transfers or conceals any of his
property or the property of such other person or corporation;
``(8) after the filing of a case under title 11 or in
contemplation thereof, knowingly and fraudulently conceals,
destroys, mutilates, falsifies, or makes a false entry in any
recorded information (including books, documents, records, and
papers) relating to the property or financial affairs of a
debtor; or
``(9) after the filing of a case under title 11, knowingly
and fraudulently withholds from a custodian, trustee, marshal,
or other officer of the court or a United States Trustee
entitled to its possession, any recorded information (including
books, documents, records, and papers) relating to the property
or financial affairs of a debtor,
shall be fined not more than $5,000, imprisoned not more than 5 years,
or both.
``Sec. 153. Embezzlement against estate
``(a) Offense.--A person described in subsection (b) who knowingly
and fraudulently appropriates to the person's own use, embezzles,
spends, or transfers any property or secretes or destroys any document
belonging to the estate of a debtor shall be fined not more than
$5,000, imprisoned not more than 5 years, or both.
``(b) Person to Whom Section Applies.--A person described in this
subsection is one who has access to property or documents belonging to
an estate by virtue of the person's participation in the administration
of the estate as a trustee, custodian, marshal, attorney, or other
officer of the court or as an agent, employee, or other person engaged
by such an officer to perform a service with respect to the estate.
``Sec. 154. Adverse interest and conduct of officers
``A person who, being a custodian, trustee, marshal, or other
officer of the court--
``(1) knowingly purchases, directly or indirectly, any
property of the estate of which the person is such an officer
in a case under title 11;
``(2) knowingly refuses to permit a reasonable opportunity
for the inspection by parties in interest of the documents and
accounts relating to the affairs of estates in the person's
charge by parties when directed by the court to do so; or
``(3) knowingly refuses to permit a reasonable opportunity
for the inspection by the United States Trustee of the
documents and accounts relating to the affairs of an estate in
the person's charge,
shall be fined not more than $5,000 and shall forfeit the person's
office, which shall thereupon become vacant.''; and
(B) by adding at the end the following new
sections:
``Sec. 156. Knowing disregard of bankruptcy law or rule
``(a) Definitions.--In this section--
```bankruptcy petition preparer' means a person, other than
the debtor's attorney or an employee of such an attorney, who
prepares for compensation a document for filing.
```document for filing' means a petition or any other
document prepared for filing by a debtor in a United States
bankruptcy court or a United States district court in
connection with a case under this title.
``(b) Offense.--If a bankruptcy case or related proceeding is
dismissed because of a knowing attempt by a bankruptcy petition
preparer in any manner to disregard the requirements of title 11,
United States Code, or the Bankruptcy Rules, the bankruptcy petition
preparer shall be fined under this title, imprisoned not more than 1
year, or both.
``Sec. 157. Bankruptcy fraud
``(a) Offense.--A person who, having devised or intending to devise
a scheme or artifice to defraud, or for obtaining money or property by
means of a false or fraudulent pretense, representation, or promise,
for the purpose of executing or concealing such a scheme or artifice or
attempting to do so--
``(1) files a petition under title 11;
``(2) files a document in a proceeding under title 11; or
``(3) makes a false or fraudulent representation, claim, or
promise concerning or in relation to a proceeding under title
11, at any time before or after the filing of the petition, or
in relation to a proceeding falsely asserted to be pending
under that title,
shall be fined under this title, imprisoned not more than 5 years, or
both.
``(b) Requirement of Intent.--
``(1) In general.--The degree of intent required to be
shown in the case of an offense described in subsection (a) is
that which is generally required to be shown in cases of fraud.
``(2) Violation not established.--A violation of subsection
(a) is not established if the defendant committed the act that
is alleged to constitute fraud for a lawful purpose.
``(3) Violation established.--A violation of subsection (a)
may be established if the defendant committed the act that is
alleged to constitute fraud with a purpose of--
``(A) preventing the proper application of title 11
in a particular case; or
``(B) using a proceeding under title 11 in a manner
that, while on its face may appear to be legitimate, is
in fact part of a scheme to defraud.''.
(2) Technical amendments.--The chapter analysis for chapter
9 of title 18, United States Code, is amended--
(A) by amending the item relating to section 153 to
read as follows:
``Sec. 153. Embezzlement against estate.'';
and
(B) by adding at the end the following new item:
``Sec. 156. Knowing disregard of bankruptcy law or rule.
``Sec. 157. Bankruptcy fraud.''.
(b) RICO.--Section 1961(1)(D) of title 18, United States Code, is
amended by inserting ``(except a case under section 157 of that
title)'' after ``title 11''.
TITLE VI--TECHNICAL CORRECTIONS
SEC. 601. TITLE 11, UNITED STATES CODE.
(a) Alphabetization and Elimination of Paragraph Designations.--
Section 101 of title 11, United States Code, is amended to read as
follows:
``Sec. 101. Definitions
``In this title--
```accountant' means an accountant authorized under
applicable law to practice public accounting, and includes
professional accounting association, corporation, or
partnership, if so authorized.
```affiliate' means--
``(A) an entity that directly or indirectly owns,
controls, or holds with power to vote, 20 percent or
more of the outstanding voting securities of the
debtor, other than an entity that holds such
securities--
``(i) in a fiduciary or agency capacity
without sole discretionary power to vote such
securities; or
``(ii) solely to secure a debt, if such
entity has not in fact exercised such power to
vote;
``(B) a corporation 20 percent or more of whose
outstanding voting securities are directly or
indirectly owned, controlled, or held with power to
vote, by the debtor, or by an entity that directly or
indirectly owns, controls, or holds with power to vote,
20 percent or more of the outstanding voting securities
of the debtor, other than an entity that holds such
securities--
``(i) in a fiduciary or agency capacity
without sole discretionary power to vote such
securities; or
``(ii) solely to secure a debt, if such
entity has not in fact exercised such power to
vote;
``(C) a person whose business is operated under a
lease or operating agreement by a debtor, or person
substantially all of whose property is operated under
an operating agreement with the debtor; or
``(D) an entity that operates the business or
substantially all of the property of the debtor under a
lease or operating agreement.
```attorney' means an attorney, professional law
association, corporation, or partnership, authorized under
applicable law to practice law.
```claim' means--
``(A) a right to payment, whether or not such right
is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured; or
``(B) a right to an equitable remedy for breach of
performance if such breach gives rise to a right to
payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured, or
unsecured.
```commodity broker' means a futures commission merchant,
foreign futures commission merchant, clearing organization,
leverage transaction merchant, or commodity options dealer (as
defined in section 761) with respect to which there is a
customer (as defined in section 761).
```community claim' means a claim that arose before the
commencement of the case concerning the debtor for which
property of the kind specified in section 541(a)(2) is liable,
whether or not there is any such property at the time of the
commencement of the case.
```consumer debt' means debt incurred by an individual
primarily for a personal, family, or household purpose.
```corporation'--
``(A) includes--
``(i) an association having a power or
privilege that a private corporation, but not
an individual or a partnership, possesses;
``(ii) a partnership association organized
under a law that makes only the capital
subscribed responsible for the debts of such
association;
``(iii) a joint-stock company;
``(iv) an unincorporated company or
association; or
``(v) a business trust; but
``(B) does not include a limited partnership.
```creditor' means--
``(A) an entity that has a claim against the debtor
that arose at the time of or before the order for
relief concerning the debtor;
``(B) an entity that has a claim against the estate
of a kind specified in section 348(d), 502(f), 502(g),
502(h), or 502(i); or
``(C) an entity that has a community claim.
```custodian' means--
``(A) a receiver or trustee of any of the property
of the debtor, appointed in a case or proceeding not
under this title;
``(B) an assignee under a general assignment for
the benefit of the debtor's creditors; or
``(C) a trustee, receiver, or agent under
applicable law, or under a contract, that is appointed
or authorized to take charge of property of the debtor
for the purpose of enforcing a lien against such
property, or for the purpose of general administration
of such property for the benefit of the debtor's
creditors.
```debt' means liability on a claim.
```debtor' means a person or municipality concerning which
a case under this title has been commenced.
```disinterested person' means a person that--
``(A) is not a creditor, an equity security holder,
or an insider;
``(B) is not and was not an investment banker for
any outstanding security of the debtor;
``(C) has not been, within 3 years before the date
of the filing of the petition, an investment banker for
a security of the debtor, or an attorney for such an
investment banker in connection with the offer, sale,
or issuance of a security of the debtor;
``(D) is not and was not, within 2 years before the
date of the filing of the petition, a director,
officer, or employee of the debtor or of an investment
banker specified in subparagraph (B) or (C); and
``(E) does not have an interest materially adverse
to the interest of the estate or of any class of
creditors or equity security holders, by reason of any
direct or indirect relationship to, connection with, or
interest in, the debtor or an investment banker
specified in subparagraph (B) or (C), or for any other
reason.
```entity' includes a person, estate, trust, governmental
unit, and United States trustee.
```equity security' means--
``(A) a share in a corporation, whether or not
transferable or denominated `stock', or similar
security;
``(B) an interest of a limited partner in a limited
partnership; or
``(C) a warrant or right, other than a right to
convert, to purchase, sell, or subscribe to a share,
security, or interest of a kind specified in
subparagraph (A) or (B).
```equity security holder' means a holder of an equity
security of the debtor.
```family farmer' means--
``(A) an individual or individual and spouse
engaged in a farming operation 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 farming operation), on the date
the case is filed, arise out of a farming operation
owned or operated by such individual or such individual
and spouse, and such individual or such individual and
spouse receive from such farming operation more than 50
percent of such individual's or such individual and
spouse's gross income for the taxable year preceding
the taxable year in which the case concerning such
individual or such individual and spouse was filed; or
``(B) a corporation or partnership in which more
than 50 percent of the outstanding stock or equity is
held by one family, or by one family and the relatives
of the members of such family, and such family or such
relatives conduct the farming operation--
``(i) more than 80 percent of the value of
its assets consists of assets related to the
farming 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 one dwelling which is
owned by such corporation or partnership and
which a shareholder or partner maintains as a
principal residence, unless such debt arises
out of a farming operation), on the date the
case is filed, arise out of the farming
operation owned or operated by such corporation
or such partnership; and
``(iii) if such corporation issues stock,
such stock is not publicly traded.
```family farmer with regular annual income' means a family
farmer whose annual income is sufficiently stable and regular
to enable such family farmer to make payments under a plan
under chapter 12.
```farmer' means (except when such term appears in the term
`family farmer') a person that received more than 80 percent of
such person's gross income during the taxable year of such
person immediately preceding the taxable year of such person
during which the case under this title concerning such person
was commenced from a farming operation owned or operated by
such person.
```farming operation' includes farming, tillage of the
soil, dairy farming, ranching, production or raising of crops,
poultry, or livestock, and production of poultry or livestock
products in an unmanufactured state.
```Federal depository institutions regulatory agency'
means--
``(A) with respect to an insured depository
institution (as defined in section 3(c)(2) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(c)(2))
for which no conservator or receiver has been
appointed, the appropriate Federal banking agency (as
defined in section 3(q) of that Act);
``(B) with respect to an insured credit union
(including an insured credit union for which the
National Credit Union Administration has been appointed
conservator or liquidating agent), the National Credit
Union Administration;
``(C) with respect to any insured depository
institution for which the Resolution Trust Corporation
has been appointed conservator or receiver, the
Resolution Trust Corporation; and
``(D) with respect to any insured depository
institution for which the Federal Deposit Insurance
Corporation has been appointed conservator or receiver,
the Federal Deposit Insurance Corporation.
```financial institution' means a person that is a
commercial or savings bank, industrial savings bank, savings
and loan association, or trust company and, when any such
person is acting as agent or custodian for a customer in
connection with a securities contract (as defined in section
741(a)), the customer.
```foreign proceeding' means a proceeding, whether judicial
or administrative and whether or not under bankruptcy law, in a
foreign country in which the debtor's domicile, residence,
principal place of business, or principal assets were located
at the commencement of such proceeding, for the purpose of
liquidating an estate, adjusting debts by composition,
extension, or discharge, or effecting a reorganization.
```foreign representative' means a duly selected trustee,
administrator, or other representative of an estate in a
foreign proceeding.
```forward contract' means a contract (other than a
commodity contract) for the purchase, sale, or transfer of 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, or product or byproduct thereof, with a
maturity date more than 2 days after the date the contract is
entered into, including, but not limited to, a repurchase
transaction, reverse repurchase transaction, consignment,
lease, swap, hedge transaction, deposit, loan, option,
allocated transaction, unallocated transaction, or any
combination thereof or option thereon.
```forward contract merchant' means a person whose business
consists in whole or in part of entering into forward contracts
as or with merchants in a commodity (as defined in section 761)
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.
```governmental unit' means--
``(A) the United States, a State, Commonwealth, or
Territory, the District of Columbia, a municipality,
and a foreign state;
``(B) a department, agency, or instrumentality of
the United States (but not a United States trustee
while serving as a trustee in a case under this title),
a State, Commonwealth, or Territory, the District of
Columbia, a municipality, a foreign state; or
``(C) any other foreign or domestic government.
```indenture' means a mortgage, deed of trust, or
indenture, under which there is outstanding a security, other
than a voting-trust certificate, constituting a claim against
the debtor, a claim secured by a lien on any of the debtor's
property, or an equity security of the debtor.
```indenture trustee' means a trustee under an indenture.
```individual with regular income' means an individual
whose income is sufficiently stable and regular to enable such
individual to make payments under a plan under chapter 13,
other than a stockbroker or a commodity broker.
```insider' includes--
``(A) if the debtor is an individual--
``(i) a relative of the debtor or of a
general partner of the debtor;
``(ii) a partnership in which the debtor is
a general partner;
``(iii) a general partner of the debtor; or
``(iv) a corporation of which the debtor is
a director, officer, or person in control;
``(B) if the debtor is a corporation--
``(i) a director of the debtor;
``(ii) an officer of the debtor;
``(iii) a person in control of the debtor;
``(iv) a partnership in which the debtor is
a general partner;
``(v) a general partner of the debtor; or
``(vi) a relative of a general partner,
director, officer, or person in control of the
debtor;
``(C) if the debtor is a partnership--
``(i) a general partner in the debtor;
``(ii) a relative of a general partner in,
general partner of, or person in control of the
debtor;
``(iii) a partnership in which the debtor
is a general partner;
``(iv) a general partner of the debtor; or
``(v) a person in control of the debtor;
``(D) if the debtor is a municipality, an elected
official of the debtor or relative of an elected
official of the debtor;
``(E) an affiliate, or insider of an affiliate as
if such affiliate were the debtor; and
``(F) a managing agent of the debtor.
```insolvent' means--
``(A) with reference to an entity other than a
partnership and a municipality, being in a financial
condition such that the sum of the entity's debts is
greater than all of the entity's property, at a fair
valuation, exclusive of--
``(i) property transferred, concealed, or
removed with intent to hinder, delay, or
defraud such entity's creditors; and
``(ii) property that may be exempted from
property of the estate under section 522;
``(B) with reference to a partnership, being in a
financial condition such that the sum of the
partnership's debts is greater than the aggregate of,
at a fair valuation--
``(i) all of the partnership's property,
exclusive of property of the kind specified in
subparagraph (A)(i); and
``(B) the sum of the excess of the value of
each general partner's nonpartnership property,
exclusive of property of the kind specified in
subparagraph (A), over such partner's
nonpartnership debts; and
``(C) with reference to a municipality, being in a
financial condition such that the municipality is--
``(i) generally not paying its debts as
they become due unless such debts are the
subject of a bona fide dispute; and
``(ii) unable to pay its debts as they
become due.
```institution-affiliated party'--
``(A) with respect to an insured depository
institution (as defined in section 3(c)(2) of the
Federal Deposit Insurance Act) (12 U.S.C. 1813(c)(2)),
has the meaning given it in section 3(u) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(u)); and
``(2) with respect to an insured credit union, has
the meaning given it in section 206(r) of the Federal
Credit Union Act (12 U.S.C. 1786(r)).
```insured credit union' has the meaning given it in
section 101(7) of the Federal Credit Union Act (12 U.S.C.
1752(7)).
```insured depository institution'--
``(A) has the meaning given it in section 3(c)(2)
of the Federal Deposit Insurance Act (12 U.S.C.
1813(c)(2)); and
``(B) includes an insured credit union (except as
provided in the definition of `Federal depository
institutions regulatory agency' and in subparagraph (B)
of the definition of `institution-affiliated party').
```intellectual property' means--
``(A) a trade secret;
``(B) an invention, process, design, or plant
protected under title 35;
``(C) a patent application;
``(D) a plant variety;
``(E) a work of authorship protected under title
17; and
``(F) a mask work protected under chapter 9 of
title 17, to the extent protected by applicable
nonbankruptcy law.
```judicial lien' means a lien obtained by judgment, levy,
sequestration, or other legal or equitable process or
proceeding.
```lien' means a charge against or interest in property to
secure payment of a debt or performance of an obligation.
```margin payment', as used in sections 362(b)(6), 546 (e)
and (f), 548 (d)(2) (B) and (C), 556, 741(5), 761(15), 764(b),
766(a), and any other provision of this title in relation to
forward contracts, means a payment or deposit of cash, a
security, or other property that is commonly known in the
forward contract trade as original margin, initial margin,
maintenance margin, or variation margin, including market-to-
market payments or variation payments.
```mask work' has the meaning given it in section 901(a)(2)
of title 17.
```municipality' means a political subdivision or public
agency or instrumentality of a State.
```person' includes an individual, partnership, and
corporation, but does not include a governmental unit, except
that a governmental unit that acquires an asset from a person
as a result of operation of a loan guarantee agreement, or as
receiver or liquidating agent of a person, shall be considered
to be a person for purposes of section 1102.
```petition' means a petition filed under section 301, 302,
303, or 304 commencing a case under this title.
```purchaser' means a transferee of a voluntary transfer,
and includes an immediate or mediate transferee of such a
transferee.
```railroad' means a common carrier by railroad engaged in
the transportation of individuals or property or owner of
trackage facilities leased by such a common carrier.
```relative' means an individual related by affinity or
consanguinity within the third degree as determined by the
common law and an individual in a step or adoptive relationship
within such third degree.
```repo participant' means an entity that, on any day
during the period beginning 90 days before the date of the
filing of a petition, has an outstanding repurchase agreement
with the debtor.
```repurchase agreement' and `reverse repurchase agreement'
mean an agreement, including related terms, which provides for
the transfer of certificates of deposit, eligible bankers'
acceptances, or securities that are direct obligations of, or
that are fully guaranteed as to principal and interest by, the
United States or any agency of the United States against the
transfer of funds by the transferee of such certificates of
deposit, eligible bankers' acceptances, or securities with a
simultaneous agreement by such transferee to transfer to the
transferor thereof certificates of deposit, eligible bankers'
acceptances, or securities as described above, at a date
certain not later than 1 year after such transfers or on
demand, against the transfer of funds.
```security'--
``(A) includes--
``(i) a note;
``(ii) stock;
``(iii) treasury stock;
``(iv) a bond;
``(v) a debenture;
``(vi) a collateral trust certificate;
``(vii) a preorganization certificate or
subscription;
``(viii) a transferable share;
``(ix) a voting-trust certificate;
``(x) a certificate of deposit;
``(xi) a certificate of deposit for
security;
``(xii) an investment contract or
certificate of interest or participation in a
profit-sharing agreement or in an oil, gas, or
mineral royalty or lease, if such contract or
interest is required to be the subject of a
registration statement filed with the
Securities and Exchange Commission under the
provisions of the Securities Act of 1933 (15
U.S.C. 77a et seq.), or is exempt under section
3(b) of that Act (15 U.S.C. 77c(b)) from the
requirement to file such a statement;
``(xiii) an interest of a limited partner
in a limited partnership;
``(xiv) another claim or interest commonly
known as a `security'; and
``(xv) a certificate of interest or
participation in, temporary or interim
certificate for, receipt for, or warrant or
right to subscribe to or purchase or sell, a
security; but
``(B) does not include--
``(i) currency or a check, draft, bill of
exchange, or bank letter of credit;
``(ii) a leverage transaction (as defined
in section 761);
``(iii) a commodity futures contract or
forward contract;
``(iv) an option, warrant, or right to
subscribe to or purchase or sell a commodity
futures contract;
``(v) an option to purchase or sell a
commodity;
``(vi) a contract or certificate of a kind
specified in subparagraph (A)(xii) that is not
required to be the subject of a registration
statement filed with the Securities and
Exchange Commission and is not exempt under
section 3(b) of the Securities Act of 1933 (15
U.S.C. 77c(b)) from the requirement to file
such a statement; or
``(vii) debt or an evidence of indebtedness
for goods sold and delivered or services
rendered.
```security agreement' means an agreement that creates or
provides for a security interest.
```securities clearing agency' means a person that is
registered as a clearing agency under section 17A of the
Securities Exchange Act of 1934 (15 U.S.C. 78q-1) or whose
business is confined to the performance of functions of a
clearing agency with respect to exempted securities (as defined
in section 3(a)(12) of that Act (15 U.S.C. 78c(12)) for the
purposes of that section 17A.
```security interest' means a lien created by an agreement.
```settlement payment' means, for purposes of the forward
contract provisions of this title, a preliminary settlement
payment, partial settlement payment, interim settlement
payment, settlement payment on account, final settlement
payment, net settlement payment, or any other similar payment
commonly used in the forward contract trade.
```State' includes the District of Columbia and Puerto
Rico, except for the purpose of defining who may be a debtor
under chapter 9.
```statutory lien' means a lien arising solely by force of
a statute on specified circumstances or conditions, or lien of
distress for rent, whether or not statutory, but does not
include a security interest or judicial lien, whether or not
such interest or lien is provided by or is dependent on a
statute and whether or not such interest or lien is made fully
effective by statute.
```stockbroker' means a person--
``(A) with respect to which there is a customer (as
defined in section 741); and
``(B) that is engaged in the business of effecting
transactions in securities--
``(i) for the account of others; or
``(ii) with members of the general public,
from or for such person's own account.
```swap agreement' means--
``(A) an agreement (including terms and conditions
incorporated by reference therein) which is a rate swap
agreement, basis swap, forward rate agreement,
commodity swap, interest rate option, forward foreign
exchange agreement, rate cap agreement, rate floor
agreement, rate collar agreement, currency swap
agreement, cross-currency rate swap agreement, currency
option, or any other similar agreement (including any
option to enter into any of the foregoing);
``(2) any combination of the foregoing; or
``(3) a master agreement for any of the foregoing
together with all supplements.
```swap participant' means an entity that, at any time
before the filing of a petition, has an outstanding swap
agreement with the debtor.
```timeshare interest' means an interest purchased in a
timeshare plan which grants the purchaser the right to use and
occupy accommodations, facilities, or recreational sites,
whether improved or unimproved, pursuant to a timeshare plan.
```timeshare plan' means an interest in any arrangement,
plan, scheme, or similar device (but not including an exchange
program), whether by membership, agreement, tenancy in common,
sale, lease, deed, rental agreement, license, right to use
agreement, or by any other means, whereby a purchaser of the
interest, in exchange for consideration, receives a right to
use accommodations, facilities, or recreational sites, whether
improved or unimproved, for a specific period of time less than
a full year during any given year, but not necessarily for
consecutive years, and which extends for a period of more than
3 years.
```transfer' means a mode, direct or indirect, absolute or
conditional, voluntary or involuntary, of disposing of or
parting with property or with an interest in property,
including retention of title as a security interest and
foreclosure of the debtor's equity of redemption.
```United States', when used in a geographical sense,
includes all locations where the judicial jurisdiction of the
United States extends, including territories and possessions of
the United States.
(b) References to Definitions in Title XI.--
(1) Section 362.--Section 362(b) of title 11, United States
Code, is amended--
(A) in paragraph (6)--
(i) by striking ``section 761(4)'' and
inserting ``section 761'';
(ii) by striking ``section 741(7)'' and
inserting ``section 741'';
(iii) by striking ``section 101(34),
741(5), or 761(15)'' and inserting ``section
101, 741, or 761''; and
(iv) by striking ``section 101(35) or
741(8)'' and inserting ``section 101 or 741'';
and
(B) in paragraph (7)--
(i) by striking ``section 741(5) or
761(15)'' and inserting ``section 741 or 761'';
and
(ii) by striking ``section 741(8)'' and
inserting ``section 741''.
(2) Section 507.--Section 507(a)(5) of title 11, United
States Code, is amended--
(A) by striking ``section 557(b)(1)'' and inserting
``section 557(b)''; and
(B) by striking ``section 557(b)(2)'' and inserting
``section 557(b)''.
(3) Section 546 of title 11, United States Code, is
amended--
(A) in subsection (e)--
(i) by striking ``section 101(34), 741(5),
or 761(15)'' and inserting ``section 101, 741,
or 761''; and
(ii) by striking ``section 101(35) or
741(8)'' and inserting ``section 101 or 741'';
and
(B) in subsection (f)--
(i) by striking ``section 741(5) or
761(15)'' and inserting ``section 741 or 761'';
and
(ii) by striking ``section 741(8)'' and
inserting ``section 741''.
(4) Section 548.--Section 548(d)(2) of title 11, United
States Code, is amended--
(A) in subparagraph (B)--
(i) by striking ``section 101(34), 741(5)
or 761(15)'' and inserting ``section 101, 741,
or 761''; and
(ii) by striking ``section 101(35) or
741(8)'' and inserting ``section 101 or 741'';
and
(B) in subparagraph (C)--
(i) by striking ``section 741(5) or
761(15)'' and inserting ``section 741 or 761'';
and
(ii) by striking ``section 741(8)'' and
inserting ``section 741''.
(5) Section 555.--Section 555 of title 11, United States
Code, is amended by striking ``section 741(7)'' and inserting
``section 741''.
(6) Section 556.--Section 556 of title 11, United States
Code, is amended by striking ``section 761(4)'' and inserting
``section 761''.
(c) References to Definitions in Other Laws.--
(1) Federal credit union act.--Section 207(c)(8)(D) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)) is amended--
(A) in clause (ii)(I) by striking ``section
741(7)'' and inserting ``section 741'';
(B) in clause (iii) by striking ``section 101(24)''
and inserting ``section 101'';
(C) in clause (iv)(I) by striking ``section
101(41)'' and inserting ``section 101''; and
(D) in clause (v) by striking ``section 101(50)''
and inserting ``section 101''.
(2) Federal deposit insurance act.--Section 11(e)(8)(D) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)) is
amended--
(A) in clause (ii)(I) by striking ``section
741(7)'' and inserting ``section 741'';
(B) in clause (iii) by striking ``section 761(4)''
and inserting ``section 761'';
(C) in clause (iv) by striking ``section 101(24)''
and inserting ``section 101'';
(D) in clause (v)(I) by striking ``section
101(41)'' and inserting ``section 101''; and
(E) in clause (viii) by striking ``section
101(50)'' and inserting ``section 101''.
(d) Other Technical Amendments.--Title 11 of the United States Code
is amended--
(1) in section 322(a) by striking ``1302, or 1202'' and
inserting ``1202, or 1302'',
(2) in section 346--
(A) in subsection (a) by striking ``Internal
Revenue Code of 1954 (26 U.S.C. 1 et seq.)'' and
inserting ``Internal Revenue Code of 1986''; and
(B) in subsection (g)(1)(C) by striking ``Internal
Revenue Code of 1954 (26 U.S.C. 371)'' and inserting
``Internal Revenue Code of 1986'';
(3) in section 348--
(A) in subsection (b) by striking ``728(a), 728(b),
1102(a), 1110(a)(1), 1121(b), 1121(c), 1141(d)(4),
1146(a), 1146(b), 1301(a), 1305(a), 1201(a), 1221, and
1228(a)'' and inserting ``728 (a) and (b), 1021, 1028,
1102(a), 1110(a)(1), 1121 (b) and (c), 1141(d)(4), 1146
(a) and (b), 1201(a), 1221, 1228(a), 1301(a), and
1305(a)''; and
(B) in subsections (b), (c), (d), and (e) by
striking ``1307, or 1208'' each place it appears and
inserting ``1208, or 1307'';
(4) in section 349(a) by striking ``109(f)'' and inserting
``109(g)'';
(5) in section 362(b)--
(A) by striking ``or'' at the end of paragraph
(10);
(B) in paragraph (12) by striking ``the Ship
Mortgage Act, 1920 (46 App. U.S.C. 911 et seq.)'' and
inserting ``section 31325 of title 46, United States
Code'';
(C) in paragraph (13)--
(i) by striking ``the Ship Mortgage Act,
1920 (46 App. U.S.C. 911 et seq.)'' and
inserting ``section 31325 of title 46, United
States Code''; and
(ii) by striking ``or'' at the end;
(D) in paragraph (14), as added by section 102 of
Public Law 101-311 (104 Stat. 267) at the end of the
subsection, by removing it from the end of the
subsection, inserting it after paragraph (13), and
striking the period at the end and inserting a
semicolon; and
(E) by redesignating paragraphs (14), (15), and
(16), as added by section 3007(a) of the Student Loan
Default Prevention Initiative Act of 1990 (104 Stat.
1388-28), as paragraphs (15), (16), and (17);
(6) in section 363(c)(1) by striking ``1304, 1203, or
1204'' and inserting ``1203, 1204, or 1304'';
(7) in section 364(a) by striking ``1304, 1203, or 1204''
and inserting ``1203, 1204, or 1304'';
(8) in section 365--
(A) in subsection (g)(2) (A) and (B) by striking
``1307, or 1208'' each place it appears and inserting
``1208, or 1307'';
(B) in subsection (n)(1)(B) by striking ``to to''
and inserting ``to''; and
(C) in subsection (o) by striking ``the Federal''
the first place it appears and all that follows through
``successors,'' and inserting ``a Federal depository
institutions regulatory agency (or predecessor to such
an agency)'';
(9) in section 507--
(A) in subsection (a)(9), as redesignated by
section 304(b)(1)(B), by striking ``the Federal'' the
first place it appears and all that follows through
``successors,'' and inserting ``a Federal depository
institutions regulatory agency (or predecessor to such
an agency)''; and
(B) in subsection (d) by striking ``(a)(3), (a)(4),
(a)(5), or (a)(6)'' and inserting ``(a) (3), (4), (6),
or (7)'';
(10) in section 522(d)(10)(E)(iii) by striking ``401(a),
403(a), 403(b), 408, or 409 Internal Revenue Code of 1954 (26
U.S.C. 401(a), 403(a), 403(b), 408, or 409)'' and inserting
``section 401(a), 403 (a) or (b), 408, or 409 of the Internal
Revenue Code of 1986'';
(11) in section 523(a) --
(A) in subsection (a)--
(i) by striking ``1141,, 1228(a),
1228(b),'' and inserting ``1141, 1228 (a) or
(b),''; and
(ii) in paragraph (12) by striking the
semicolon at the end and inserting a period;
and
(B) in subsection (e) by striking ``depository
institution or insured credit union'' and inserting
``insured depository institution'';
(12) in section 524--
(A) in subsection (a)(3) by striking ``or
1328(c)(1)'' and inserting ``1228(a)(1), or
1328(a)(1)'';
(B) in subsection (c)(4) by striking ``recission''
and inserting ``rescission''; and
(C) in subsection (d)(1)(B)(ii) by adding ``and''
at the end;
(12) in section 541(b)--
(A) by inserting ``(1)'' after ``(b)'' and
redesignating paragraphs (1), (2), (3), and (4) as
subparagraphs (A), (B), (C), and (D), respectively;
(B) in subparagraph (D) of paragraph (1), as
redesignated by subparagraph (A), by redesignating
subparagraphs (A) and (B) as clauses (i) and (ii),
respectively;
(C) in subparagraph (C) of paragraph (1), as
redesignated by subparagraph (A), by striking
``institution or'' and inserting ``institution; or'';
and
(D) in the matter following subparagraph (D) of
paragraph (1), as redesignated by subparagraph (A), by
striking ``Paragraph (4) shall not'' and inserting the
following:
``(2) Paragraph (1)(D) shall not''.
(13) in section 542(e) by striking ``to to'' and inserting
``to'';
(14) in section 543(d)(1) by striking ``of equity'' and
inserting ``if equity'';
(15) in section 546(a)(1) by striking ``1302, or 1202'' and
inserting ``1202, or 1302'';
(16) in section 549(b) by inserting ``the trustee may not
avoid under subsection (a) of this section'' after
``involuntary case,'';
(17) in section 553--
(A) in subsection (a)(1) by striking ``other than
under section 502(b)(3) of this title''; and
(B) in subsection (b)(1) by striking
``362(b)(14),'' and inserting ``362(b)(14),'';
(18) in section 706(a) by striking ``1307, or 1208'' and
inserting ``1208, or 1307'';
(19) in section 724(d) by striking ``Internal Revenue Code
of 1954 (26 U.S.C. 6323)'' and inserting ``Internal Revenue
Code of 1986'';
(20) in section 726(b) by inserting a comma after ``section
1112'';
(21) in section 743 by striking ``342(a)'' and inserting
``342'';
(22) in section 745(c) by striking ``Internal Revenue Code
of 1954 (26 U.S.C. 1 et seq.)'' and inserting ``Internal
Revenue Code of 1986'';
(23) in section 1104(c) inserting a comma after
``interest'';
(24) in section 1123(a)(1) inserting a comma after
``title'' the last place it appears;
(25) in section 1129(a)--
(A) in paragraph (4) by striking the semicolon at
the end and inserting a period; and
(B) in paragraph (12) by inserting ``of title 28''
after ``section 1930'';
(26) in section 1145(a) by striking ``does'' and inserting
``do'';
(27) in section 1226(b)(2)--
(A) by striking ``1202(d) of this title'' and
inserting ``1202(c)''; and
(B) by striking ``1202(e) of this title'' and
inserting ``1202(d)'';
(28) in section 1302(b)(3) by striking ``and'' at the end;
(29) in section 1328(a)(2) by striking ``(5) or (8)'' and
inserting ``(5), (8), or (9)''; and
(30) in the table of chapters by striking the item relating
to chapter 15.
SEC. 602. TITLE 28, UNITED STATES CODE.
Section 586(a)(3) of title 28, United States Code, is amended in
the matter preceding subparagraph (A) by inserting ``12,'' after
``11,''.
TITLE VII--SEVERABILITY; EFFECTIVE DATE; APPLICATION OF AMENDMENTS
SEC. 701. SEVERABILITY.
If any provision of this Act or amendment made by this Act or the
application of such provision or amendment to any person or
circumstance is held to be unconstitutional, the remaining provisions
of and amendments made by this Act and the application of such other
provisions and amendments to any person or circumstance shall not be
affected thereby.
SEC. 702. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b), this Act
and the amendments made by this Act shall take effect on the date of
enactment of this Act.
(b) Application of Amendments.--
(1) In general.--Except as provided in section 115(c) and
in paragraph (2) of this subsection, the amendments made by
this Act shall not apply with respect to cases commenced under
title 11, United States Code, before the date of enactment of
this Act.
(2) Section 1110 of title 11.--Section 1110 of title 11,
United States Code, as amended by section 203, shall apply with
respect to any lease (as defined in section 1110(c)), entered
into in connection with a settlement of any litigation in any
case pending under title 11, United States Code, on the date of
enactment of this Act.
TITLE VIII--MISCELLANEOUS PROVISIONS
SEC. 801. LIMITATION ON STATE TAXATION OF CERTAIN PENSION INCOME.
(a) In General.--Chapter 4 of title 4 of the United States Code is
amended by adding at the end thereof the following new section:
``Sec. 114. Limitation on State income taxation of pension income
``(a) No State may impose an income tax (as defined in section
110(c)) on the qualified pension income of any individual who is not a
resident or domiciliary of such State.
``(b)(1) For purposes of subsection (a), the term `qualified
pension income' means any payment from a qualified plan--
``(A) which is part of a series of substantially equal
periodic payments (not less frequently than annually) made
for--
``(i) the life or life expectancy of the recipient
or for the joint lives or joint life expectancies of
the recipient and the recipient's designated
beneficiary, or
``(ii) a period of not less than 10 years, or
``(B) which is not described in subparagraph (A) and
which--
``(i) is received in a taxable year for which an
election under this subsection is in effect, and
``(ii) is received on or after the date on which
the recipient has attained the age of 59\1/2\,
except that the aggregate amount of payments to which this
subparagraph may apply for any taxable year shall not exceed
$25,000.
``(2) For purposes of paragraph (1), the term `qualified plan'
means--
``(A) an employees' trust described in section 401(a) of
the Internal Revenue Code of 1986 which is exempt from tax
under section 501(a) of such Code,
``(B) a simplified employee pension described in section
408(k) of such Code,
``(C) an annuity plan described in section 403(a) of such
Code,
``(D) an annuity contract described in section 403(b) of
such Code,
``(E) an individual retirement plan described in section
7701(a)(37) of such Code,
``(F) an eligible deferred compensation plan under section
457 of such Code, or
``(G) a governmental plan described in section 414(d) of
such Code, other than a plan established and maintained by a
State or political subdivision of a State, or an agency or
instrumentality of either.
``(3) For purposes of paragraph (1), any retired or retainer pay of
a member or former member of a uniform service computed under chapter
71 of title 10, United States Code, shall be treated as a payment from
a qualified plan.
``(4)(A) An election under paragraph (1)(B), once made for a
taxable year, may not be made for any other taxable year.
``(B) In calendar years beginning after 1994, the $25,000 amount
referred to in paragraph (1)(B) shall be increased by an amount equal
to such dollar amount, multiplied by the cost-of-living adjustment
determined under section 1(f)(3) of such Code for such calendar year by
substituting `calendar year 1993' for `calendar year 1992' in
subparagraph (B) thereof.
``(c) For purposes of subsection (a), the term `State' includes any
political subdivision of a State, the District of Columbia, and the
possessions of the United States.''
(b) Clerical Amendment.--The table of sections for such chapter 4
is amended by adding at the end thereof the following new item:
``114. Limitation on State income taxation of pension income.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 802. PROTECTION AGAINST DISCRIMINATORY TREATMENT OF APPLICATIONS
FOR STUDENT LOANS.
Section 525 of title 11, United States Code, is amended by adding
at the end the following new subsection:
``(c)(1) A governmental unit that operates a student grant or loan
program and a person engaged in a business that includes the making of
loans guaranteed or insured under a student loan program may not deny a
grant, loan, loan guarantee, or loan insurance to a person that is or
has been a debtor under this title or a bankrupt or debtor under the
Bankruptcy Act, or another person with whom the debtor or bankrupt has
been associated, because the debtor or bankrupt is or has been a debtor
under this title or a bankrupt or debtor under the Bankruptcy Act, has
been insolvent before the commencement of a case under this title or
during the pendency of the case but before the debtor is granted or
denied a discharge, or has not paid a debt that is dischargeable in the
case under this title or that was discharged under the Bankruptcy Act.
``(2) In this section, `student loan program' means the program
operated under part B, D, or E of title IV of the Higher Education Act
of 1965 (20 U.S.C. 1070 et seq.) or a similar program operated under
State or local law.''.
SEC. 803. CHICAGO HOUSING AUTHORITY.
(a) Findings.--The Senate finds that--
(1) It is the fundamental obligation of government to
protect its citizens;
(2) In many federally-financed public housing projects, the
level of violence has reached epidemic proportions, threatening
on a daily basis the lives of the majority of the tenants, who
are law-abiding;
(3) In an effort to combat gang and drug-related violence,
the Chicago Housing Authority (``CHA'') instituted a policy of
conducting warrantless, apartment-to-apartment searches of CHA
projects, including the Robert Taylor Homes;
(4) On April 7, 1994, Federal district court judge Warren
Andersen ruled that CHA's search policy violated the Fourth
Amendment to the Constitution of the United States and enjoined
CHA officials from undertaking these searches;
(5) After the court decision, President Clinton directed
Attorney General Janet Reno and Secretary of Housing and Urban
Development Henry Cisneros to develop law enforcement measures
that would be both constitutionally valid and effective in
reducing violent crime in public housing projects; and
(6) President Clinton subsequently announced new Federal
guidelines designed to assist public housing officials in
maintaining order and protecting the security of their law-
abiding tenants.
(b) Therefore, it is the sense of the Senate that the Senate fully
endorses the new Administration guidelines, outlined in a letter to
President Clinton from Attorney General Reno and Secretary of Housing
and Urban Development Cisneros, dated April 14, 1994, including the
guidelines allowing public housing officials to (1) erect fences around
public housing buildings, issue identification cards to tenants, and
install metal detectors or magnetometers at the building entrances; (2)
search the packages and clothing of anyone seeking to enter public
housing buildings and refuse entry to anyone who does not submit to
inspection; (3) conduct weapons searches without consent or a warrant
in common areas of the buildings, such as stairwells, and in vacant
apartments; (4) frisk ``suspicious-looking'' individuals for weapons,
if police or security personnel have a reason to believe that the
individuals are involved in criminal activity and are armed; (5)
include noncoercive consent clauses in lease agreements permitting
routine warrantless apartment-by-apartment police searches for illegal
weapons and illegal drugs, so long as residency or continued residency
in public housing is not contingent upon the inclusion of such consent
clause as a provision of a lease agreement; and (6) conduct warrantless
searches of individual units where there is justification for a search
but insufficient time to obtain a judicial warrant.
Passed the Senate April 21 (legislative day, April 11),
1994.
Attest:
MARTHA S. POPE,
Secretary.
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