This bankruptcy bill has the full text of S. 486, the "Methamphetamine Antiproliferation Act of 2000" attached to it as an amendment,
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HR 833 EAS
In the Senate of the United States,
February 2, 2000.
Resolved, That the bill from the House of Representatives (H.R. 833) entitled `An Act to amend title 11 of the United States Code, and for other purposes.', do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Bankruptcy Reform Act of 2000'.
(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--NEEDS-BASED BANKRUPTCY
Sec. 102. Dismissal or conversion.
Sec. 103. Findings and study.
Sec. 104. Notice of alternatives.
Sec. 105. Debtor financial management training test program.
Sec. 106. Credit counseling.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
Sec. 201. Promotion of alternative dispute resolution.
Sec. 202. Effect of discharge.
Sec. 203. Discouraging abuse of reaffirmation practices.
Subtitle B--Priority Child Support
Sec. 211. Definition of domestic support obligation.
Sec. 212. Priorities for claims for domestic support obligations.
Sec. 213. Requirements to obtain confirmation and discharge in cases involving domestic support obligations.
Sec. 214. Exceptions to automatic stay in domestic support obligation proceedings.
Sec. 215. Nondischargeability of certain debts for alimony, maintenance, and support.
Sec. 216. Continued liability of property.
Sec. 217. Protection of domestic support claims against preferential transfer motions.
Sec. 218. Disposable income defined.
Sec. 219. Collection of child support.
Sec. 220. Nondischargeability of certain educational benefits and loans.
Subtitle C--Other Consumer Protections
Sec. 221. Amendments to discourage abusive bankruptcy filings.
Sec. 222. Sense of Congress.
Sec. 223. Additional amendments to title 11, United States Code.
Sec. 224. Protection of retirement savings in bankruptcy.
Sec. 225. Protection of education savings.
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
Sec. 301. Reinforcement of the fresh start.
Sec. 302. Discouraging bad faith repeat filings.
Sec. 303. Curbing abusive filings.
Sec. 304. Debtor retention of personal property security.
Sec. 305. Relief from the automatic stay when the debtor does not complete intended surrender of consumer debt collateral.
Sec. 306. Giving secured creditors fair treatment in chapter 13.
Sec. 308. Residency requirement for homestead exemption.
Sec. 309. Protecting secured creditors in chapter 13 cases.
Sec. 310. Limitation on luxury goods.
Sec. 311. Automatic stay.
Sec. 312. Extension of period between bankruptcy discharges.
Sec. 313. Definition of household goods and antiques.
Sec. 314. Debt incurred to pay nondischargeable debts.
Sec. 315. Giving creditors fair notice in chapters 7 and 13 cases.
Sec. 316. Dismissal for failure to timely file schedules or provide required information.
Sec. 317. Adequate time to prepare for hearing on confirmation of the plan.
Sec. 318. Chapter 13 plans to have a 5-year duration in certain cases.
Sec. 319. Sense of the Congress regarding expansion of rule 9011 of the Federal Rules of Bankruptcy Procedure.
Sec. 320. Prompt relief from stay in individual cases.
Sec. 321. Chapter 11 cases filed by individuals.
Sec. 322. Excluding employee benefit plan participant contributions and other property from the estate.
Sec. 323. Clarification of postpetition wages and benefits.
Sec. 325. Exclusive jurisdiction in matters involving bankruptcy professionals.
Sec. 326. United States trustee program filing fee increase.
Sec. 327. Compensation of trustees in certain cases under chapter 7 of title 11, United States Code.
Sec. 328. Nondischargeability of debts incurred through the commission of violence at clinics.
TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A--General Business Bankruptcy Provisions
Sec. 401. Rolling stock equipment.
Sec. 402. Adequate protection for investors.
Sec. 403. Meetings of creditors and equity security holders.
Sec. 404. Protection of refinance of security interest.
Sec. 405. Executory contracts and unexpired leases.
Sec. 406. Creditors and equity security holders committees.
Sec. 407. Amendment to section 546 of title 11, United States Code.
Sec. 409. Amendment to section 330(a) of title 11, United States Code.
Sec. 410. Postpetition disclosure and solicitation.
Sec. 412. Venue of certain proceedings.
Sec. 413. Period for filing plan under chapter 11.
Sec. 414. Fees arising from certain ownership interests.
Sec. 415. Creditor representation at first meeting of creditors.
Sec. 416. Definition of disinterested person.
Sec. 417. Factors for compensation of professional persons.
Sec. 418. Appointment of elected trustee.
Sec. 419. Utility service.
Sec. 420. Bankruptcy fees.
Sec. 421. More complete information regarding assets of the estate.
Subtitle B--Small Business Bankruptcy Provisions
Sec. 431. Flexible rules for disclosure statement and plan.
Sec. 432. Definitions; effect of discharge.
Sec. 433. Standard form disclosure statement and plan.
Sec. 434. Uniform national reporting requirements.
Sec. 435. Uniform reporting rules and forms for small business cases.
Sec. 436. Duties in small business cases.
Sec. 437. Plan filing and confirmation deadlines.
Sec. 438. Plan confirmation deadline.
Sec. 439. Duties of the United States trustee.
Sec. 440. Scheduling conferences.
Sec. 441. Serial filer provisions.
Sec. 442. Expanded grounds for dismissal or conversion and appointment of trustee.
Sec. 443. Study of operation of title 11, United States Code, with respect to small businesses.
Sec. 444. Payment of interest.
Sec. 445. Technical correction.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
Sec. 501. Petition and proceedings related to petition.
Sec. 502. Applicability of other sections to chapter 9.
TITLE VI--IMPROVED BANKRUPTCY STATISTICS AND DATA
Sec. 601. Audit procedures.
Sec. 602. Improved bankruptcy statistics.
Sec. 603. Uniform rules for the collection of bankruptcy data.
Sec. 604. Sense of Congress regarding availability of bankruptcy data.
TITLE VII--BANKRUPTCY TAX PROVISIONS
Sec. 701. Treatment of certain liens.
Sec. 702. Treatment of fuel tax claims.
Sec. 703. Notice of request for a determination of taxes.
Sec. 704. Rate of interest on tax claims.
Sec. 705. Priority of tax claims.
Sec. 706. Priority property taxes incurred.
Sec. 707. No discharge of fraudulent taxes in chapter 13.
Sec. 708. No discharge of fraudulent taxes in chapter 11.
Sec. 709. Stay of tax proceedings limited to prepetition taxes.
Sec. 710. Periodic payment of taxes in chapter 11 cases.
Sec. 711. Avoidance of statutory tax liens prohibited.
Sec. 712. Payment of taxes in the conduct of business.
Sec. 713. Tardily filed priority tax claims.
Sec. 714. Income tax returns prepared by tax authorities.
Sec. 715. Discharge of the estate's liability for unpaid taxes.
Sec. 716. Requirement to file tax returns to confirm chapter 13 plans.
Sec. 717. Standards for tax disclosure.
Sec. 718. Setoff of tax refunds.
Sec. 719. Special provisions related to the treatment of State and local taxes.
Sec. 720. Dismissal for failure to timely file tax returns.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 801. Amendment to add chapter 15 to title 11, United States Code.
Sec. 802. Amendments to other chapters in title 11, United States Code.
Sec. 803. Claims relating to insurance deposits in cases ancillary to foreign proceedings.
TITLE IX--FINANCIAL CONTRACT PROVISIONS
Sec. 901. Bankruptcy Code amendments.
Sec. 902. Damage measure.
Sec. 903. Asset-backed securitizations.
Sec. 904. Effective date; application of amendments.
TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN
Sec. 1001. Reenactment of chapter 12.
Sec. 1002. Debt limit increase.
Sec. 1003. Elimination of requirement that family farmer and spouse receive over 50 percent of income from farming operation in year prior to bankruptcy.
Sec. 1004. Certain claims owed to governmental units.
Sec. 1005. Prohibition of retroactive assessment of disposable income.
Sec. 1006. Family fishermen.
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
Sec. 1102. Disposal of patient records.
Sec. 1103. Administrative expense claim for costs of closing a health care business.
Sec. 1104. Appointment of ombudsman to act as patient advocate.
Sec. 1105. Debtor in possession; duty of trustee to transfer patients.
Sec. 1106. Establishment of policy and protocols relating to bankruptcies of health care businesses.
Sec. 1107. Exclusion from program participation not subject to automatic stay.
TITLE XII--AMENDMENTS TO FAIR LABOR STANDARDS ACT OF 1938
Sec. 1202. Regular rate for overtime purposes.
TITLE XIII--TAX RELIEF
Sec. 1300. Amendment of 1986 code.
Subtitle A--Small Business Tax Relief
Sec. 1301. Increase in expensing limitation to $30,000.
Sec. 1302. Repeal of temporary unemployment tax.
Sec. 1303. Full deduction of health insurance costs for self-employed individuals.
Sec. 1304. Permanent extension of work opportunity tax credit.
Sec. 1305. Small businesses allowed increased deduction for meal and entertainment expenses.
Subtitle B--Deduction for Health and Long-Term Care Insurance
Sec. 1311. Deduction for health and long-term care insurance costs of individuals not participating in employer-subsidized health plans.
Subtitle C--Pension Tax Relief
Part I--Expanding Coverage
Sec. 1321. Increase in benefit and contribution limits.
Sec. 1322. Plan loans for subchapter s owners, partners, and sole proprietors.
Sec. 1323. Modification of top-heavy rules.
Sec. 1324. Elective deferrals not taken into account for purposes of deduction limits.
Sec. 1325. Repeal of coordination requirements for deferred compensation plans of State and local governments and tax-exempt organizations.
Sec. 1326. Elimination of user fee for requests to IRS regarding pension plans.
Sec. 1327. Deduction limits.
Sec. 1328. Option to treat elective deferrals as after-tax contributions.
Part II--Enhancing Fairness for Women
Sec. 1331. Catchup contributions for individuals age 50 or over.
Sec. 1332. Equitable treatment for contributions of employees to defined contribution plans.
Sec. 1333. Faster vesting of certain employer matching contributions.
Sec. 1334. Simplify and update the minimum distribution rules.
Sec. 1335. Clarification of tax treatment of division of section 457 plan benefits upon divorce.
Sec. 1336. Modification of safe harbor relief for hardship withdrawals from cash or deferred arrangements.
Part III--Increasing Portability for Participants
Sec. 1341. Rollovers allowed among various types of plans.
Sec. 1342. Rollovers of IRAs into workplace retirement plans.
Sec. 1343. Rollovers of after-tax contributions.
Sec. 1344. Hardship exception to 60-day rule.
Sec. 1345. Treatment of forms of distribution.
Sec. 1346. Rationalization of restrictions on distributions.
Sec. 1347. Purchase of service credit in governmental defined benefit plans.
Sec. 1348. Employers may disregard rollovers for purposes of cash-out amounts.
Sec. 1349. Minimum distribution and inclusion requirements for section 457 plans.
Part IV--Strengthening Pension Security and Enforcement
Sec. 1351. Repeal of 150 percent of current liability funding limit.
Sec. 1352. Maximum contribution deduction rules modified and applied to all defined benefit plans.
Sec. 1353. Excise tax relief for sound pension funding.
Sec. 1354. Excise tax on failure to provide notice by defined benefit plans significantly reducing future benefit accruals.
Sec. 1355. Protection of investment of employee contributions to 401(K) plans.
Sec. 1356. Treatment of multiemployer plans under section 415.
Part V--Reducing Regulatory Burdens
Sec. 1361. Modification of timing of plan valuations.
Sec. 1362. ESOP dividends may be reinvested without loss of dividend deduction.
Sec. 1363. Repeal of transition rule relating to certain highly compensated employees.
Sec. 1364. Employees of tax-exempt entities.
Sec. 1365. Clarification of treatment of employer-provided retirement advice.
Sec. 1366. Reporting simplification.
Sec. 1367. Improvement of employee plans compliance resolution system.
Sec. 1368. Modification of exclusion for employer-provided transit passes.
Sec. 1369. Repeal of the multiple use test.
Sec. 1370. Flexibility in nondiscrimination, coverage, and line of business rules.
Sec. 1371. Extension to international organizations of moratorium on application of certain nondiscrimination rules applicable to State and local plans.
Part VI--Plan Amendments
Sec. 1381. Provisions relating to plan amendments.
Subtitle D--Revenue Provisions
Sec. 1391. Modification of installment method and repeal of installment method for accrual method taxpayers.
Sec. 1392. Modification of estimated tax rules for closely held real estate investment trusts.
TITLE XIV--TECHNICAL AMENDMENTS
Sec. 1402. Adjustment of dollar amounts.
Sec. 1403. Extension of time.
Sec. 1404. Technical amendments.
Sec. 1405. Penalty for persons who negligently or fraudulently prepare bankruptcy petitions.
Sec. 1406. Limitation on compensation of professional persons.
Sec. 1407. Effect of conversion.
Sec. 1408. Allowance of administrative expenses.
Sec. 1409. Exceptions to discharge.
Sec. 1410. Effect of discharge.
Sec. 1411. Protection against discriminatory treatment.
Sec. 1412. Property of the estate.
Sec. 1414. Postpetition transactions.
Sec. 1415. Disposition of property of the estate.
Sec. 1416. General provisions.
Sec. 1417. Abandonment of railroad line.
Sec. 1418. Contents of plan.
Sec. 1419. Discharge under chapter 12.
Sec. 1420. Bankruptcy cases and proceedings.
Sec. 1421. Knowing disregard of bankruptcy law or rule.
Sec. 1422. Transfers made by nonprofit charitable corporations.
Sec. 1423. Protection of valid purchase money security interests.
Sec. 1425. Bankruptcy judgeships.
Sec. 1426. Family fishermen.
Sec. 1427. Compensating trustees.
Sec. 1428. Amendment to section 362 of title 11, United States Code.
Sec. 1429. Provision of electronic FTC pamphlet with electronic credit card applications and solicitations.
Sec. 1430. No bankruptcy for insolvent political committees.
Sec. 1431. Federal election law fines and penalties as nondischargeable debt.
Sec. 1432. Prohibition on certain retroactive finance charges.
Sec. 1433. Sense of Senate concerning credit worthiness.
Sec. 1434. Judicial education.
Sec. 1435. United States trustee program filing fee increase.
Sec. 1436. Providing requested tax documents to the court.
Sec. 1437. Definition of family farmer.
Sec. 1438. Encouraging creditworthiness.
Sec. 1439. Property no longer subject to redemption.
Sec. 1440. Availability of toll-free access to information.
TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
Sec. 1501. Effective date; application of amendments.
TITLE XVI--FINANCIAL INSTITUTIONS INSOLVENCY IMPROVEMENT
Sec. 1602. Treatment of certain agreements by conservators or receivers of insured depository institutions.
Sec. 1603. Authority of the corporation with respect to failed and failing institutions.
Sec. 1604. Amendments relating to transfers of qualified financial contracts.
Sec. 1605. Amendments relating to disaffirmance or repudiation of qualified financial contracts.
Sec. 1606. Clarifying amendment relating to master agreements.
Sec. 1607. Federal Deposit Insurance Corporation Improvement Act of 1991.
Sec. 1608. Recordkeeping requirements.
Sec. 1609. Exemptions from contemporaneous execution requirement.
Sec. 1611. Federal Reserve collateral requirements.
Sec. 1612. Effective date; application of amendments.
TITLE XVII--METHAMPHETAMINE AND OTHER CONTROLLED SUBSTANCES
Subtitle A--Methamphetamine Production, Trafficking, and Abuse
Chapter 1--Criminal Penalties
Sec. 1711. Enhanced punishment of amphetamine laboratory operations.
Sec. 1712. Enhanced punishment of amphetamine or methamphetamine laboratory operators.
Sec. 1713. Mandatory restitution for violations of Controlled Substances Act and Controlled Substances Import and Export Act relating to amphetamine and methamphetamine.
Sec. 1714. Methamphetamine paraphernalia.
Chapter 2--Enhanced Law Enforcement
Sec. 1721. Environmental hazards associated with illegal manufacture of amphetamine and methamphetamine.
Sec. 1722. Reduction in retail sales transaction threshold for non-safe harbor products containing pseudoephedrine or phenlypropanolamine.
Sec. 1723. Training for Drug Enforcement Administration and State and local law enforcement personnel relating to clandestine laboratories.
Sec. 1724. Combating methamphetamine and amphetamine in high intensity drug trafficking areas.
Sec. 1725. Combating amphetamine and methamphetamine manufacturing and trafficking.
Chapter 3--Abuse Prevention and Treatment
Sec. 1731. Expansion of methamphetamine research.
Sec. 1732. Methamphetamine and amphetamine treatment initiative by Center for Substance Abuse Treatment.
Sec. 1733. Expansion of methamphetamine abuse prevention efforts.
Sec. 1734. Study of methamphetamine treatment.
Chapter 4--Reports
Sec. 1741. Reports on consumption of methamphetamine and other illicit drugs in rural areas, metropolitan areas, and consolidated metropolitan areas.
Sec. 1742. Report on diversion of ordinary over-the-counter pseudoephedrine and phenylpropanolamine products.
Subtitle B--Controlled Substances Generally
Chapter 1--Criminal Matters
Sec. 1751. Enhanced punishment for trafficking in list I chemicals.
Sec. 1752. Mail order requirements.
Sec. 1753. Increased penalties for distributing drugs to minors.
Sec. 1754. Increased penalty for drug trafficking in or near a school or other protected location.
Sec. 1755. Advertisments for drug paraphernalia and schedule I controlled substances.
Sec. 1756. Theft and transportation of anhydrous ammonia for purposes of illicit production of controlled substances.
Sec. 1757. Criminal prohibition on distribution of certain information relating to the manufacture of controlled substances.
Chapter 2--Other Matters
Sec. 1761. Waiver authority for physicians who dispense or prescribe certain narcotic drugs for maintenance treatment or detoxification treatment.
Subtitle C--Cocaine Powder
Sec. 1772. Sentencing for violations involving cocaine powder.
Subtitle D--Education Matters
Sec. 1782. Student safety and family school choice.
Sec. 1783. Transfer of revenues.
Subtitle E--Miscellaneous
Sec. 1791. Notice; clarification.
Sec. 1792. Domestic terrorism assessment and recovery.
Sec. 1793. Antidrug messages on Federal Government Internet websites.
Sec. 1794. State schools.
Sec. 1795. Student safety and family school choice.
Sec. 1796. Transfer of revenues.
Sec. 1797. Increased penalties for distributing drugs to minors.
Sec. 1798. Increased penalty for drug trafficking in or near a school or other protected location.
TITLE XVIII--PROTECTION FROM THE IMPACT OF BANKRUPTCY OF CERTAIN ELECTRIC UTILITIES
Sec. 1802. Findings and purposes.
Sec. 1803. Unlawful contract and amended contract.
Sec. 1804. Exclusive enforcement.
TITLE XIX--CONSUMER CREDIT DISCLOSURE
Sec. 1901. Enhanced disclosures under an open end credit plan.
Sec. 1902. Enhanced disclosure for credit extensions secured by a dwelling.
Sec. 1903. Disclosures related to `introductory rates'.
Sec. 1904. Internet-based credit card solicitations.
Sec. 1905. Disclosures related to late payment deadlines and penalties.
Sec. 1906. Prohibition on certain actions for failure to incur finance charges.
Sec. 1907. Dual use debit card.
Sec. 1908. Study of bankruptcy impact of credit extended to dependent students.
TITLE I--NEEDS-BASED BANKRUPTCY
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is amended by inserting `or consents to' after `requests'.
SEC. 102. DISMISSAL OR CONVERSION.
(a) IN GENERAL- Section 707 of title 11, United States Code, is amended--
(1) by striking the section heading and inserting the following:
`Sec. 707. Dismissal of a case or conversion to a case under chapter 11 or 13';
(A) by inserting `(1)' after `(b)';
(B) in paragraph (1), as redesignated by subparagraph (A) of this paragraph--
(i) in the first sentence--
(I) by striking `but not at the request or suggestion' and inserting `, panel trustee or';
(II) by inserting `, or, with the debtor's consent, convert such a case to a case under chapter 11 or 13 of this title,' after `consumer debts'; and
(III) by striking `substantial abuse' and inserting `abuse'; and
(ii) by striking the next to last sentence; and
(C) by adding at the end the following:
`(2)(A)(i) In considering under paragraph (1) whether the granting of relief would be an abuse of the provisions of this chapter, the court shall presume abuse exists if the debtor's current monthly income reduced by the amounts determined under clauses (ii), (iii), and (iv), and multiplied by 60 is not less than the lesser of--
`(I) 25 percent of the debtor's nonpriority unsecured claims in the case; or
`(ii)(I) The debtor's monthly expenses shall be the applicable monthly (excluding payments for debts) expenses under standards issued by the Internal Revenue Service for the area in which the debtor resides, as in effect on the date of the entry of the order for relief, for the debtor, the dependents of the debtor, and the spouse of the debtor in a joint case, if the spouse is not otherwise a dependent. In addition, the debtor's monthly expenses shall include the debtor's reasonably necessary expenses incurred to maintain the safety of the debtor and the family of the debtor from family violence as identified under section 309 of the Family Violence Prevention and Services Act (42 U.S.C. 10408), or other applicable Federal law. The expenses included in the debtor's monthly expenses described in the preceding sentence shall be kept confidential by the court.
`(II) In addition, the debtor's monthly expenses may include, if applicable, the continuation of actual expenses paid by the debtor that are reasonable and necessary for care and support of an elderly, chronically ill, or disabled household member or member of the debtor's immediate family (including parents, grandparents, and siblings of the debtor, the dependents of the debtor, and the spouse of the debtor in a joint case) who is not a dependent and who is unable to pay for such reasonable and necessary expenses.
`(iii) The debtor's average monthly payments on account of secured debts shall be calculated as--
`(aa) the total of all amounts scheduled as contractually due to secured creditors in each month of the 60 months following the date of the petition; and
`(bb) any additional payments to secured creditors necessary for the debtor, in filing a plan under chapter 13 of this title, to maintain possession of the debtor's primary residence, motor vehicle, or other property necessary for the support of the debtor and the debtor's dependents, that serves as collateral for secured debts; divided by
`(iv) The debtor's expenses for payment of all priority claims (including priority child support and alimony claims) shall be calculated as--
`(I) the total amount of debts entitled to priority; divided by
`(B)(i) In any proceeding brought under this subsection, the presumption of abuse may be rebutted by demonstrating special circumstances that justify additional expenses or adjustments of current monthly total income. In order to establish special circumstances, the debtor shall be required to--
`(I) itemize each additional expense or adjustment of income; and
`(aa) documentation for such expenses; and
`(bb) a detailed explanation of the special circumstances that make such expenses necessary and reasonable.
`(ii) The debtor, and the attorney for the debtor if the debtor has an attorney, shall attest under oath to the accuracy of any information provided to demonstrate that additional expenses or adjustments to income are required.
`(iii) The presumption of abuse may be rebutted if the additional expenses or adjustments to income referred to in clause (i) cause the product of the debtor's current monthly income reduced by the amounts determined under clauses (ii), (iii), and (iv) of subparagraph (A) multiplied by 60 to be less than the lesser of--
`(I) 25 percent of the debtor's nonpriority unsecured claims; or
`(C)(i) As part of the schedule of current income and expenditures required under section 521, the debtor shall include a statement of the debtor's current monthly income, and the calculations that determine whether a presumption arises under subparagraph (A)(i), that shows how each such amount is calculated.
`(ii) The Supreme Court shall promulgate rules under section 2075 of title 28, that prescribe a form for a statement under clause (i) and may provide general rules on the content of the statement.
`(3) In considering under paragraph (1) whether the granting of relief would be an abuse of the provisions of this chapter in a case in which the presumption in subparagraph (A)(i) of such paragraph does not apply or has been rebutted, the court shall consider--
`(A) whether the debtor filed the petition in bad faith; or
`(B) the totality of the circumstances (including whether the debtor seeks to reject a personal services contract and the financial need for such rejection as sought by the debtor) of the debtor's financial situation demonstrates abuse.'.
(b) DEFINITION- Title 11, United States Code, is amended--
(1) in section 101, by inserting after paragraph (10) the following:
`(10A) `current monthly income'--
`(A) means the average monthly income from all sources which the debtor, or in a joint case, the debtor and the debtor's spouse, receive without regard to whether the income is taxable income, derived during the 180-day period preceding the date of determination; and
`(B) includes any amount paid by any entity other than the debtor (or, in a joint case, the debtor and the debtor's spouse), on a regular basis to the household expenses of the debtor or the debtor's dependents (and, in a joint case, the debtor's spouse if not otherwise a dependent), but excludes benefits received under the Social Security Act;'; and
(A) by inserting `(a)' before `The trustee shall--'; and
(B) by adding at the end the following:
`(b)(1) With respect to an individual debtor under this chapter--
`(A) the United States trustee or bankruptcy administrator shall review all materials filed by the debtor and, not later than 10 days before the first meeting of creditors, file with the court a statement as to whether the debtor's case would be presumed to be an abuse under section 707(b); and
`(B) not later than 5 days after receiving a statement under subparagraph (A), the court shall provide a copy of the statement to all creditors.
`(2) The United States trustee or bankruptcy administrator shall not later than 30 days after receiving a statement filed under paragraph (1) file a motion to dismiss or convert under section 707(b), or file a statement setting forth the reasons the United States trustee or bankruptcy administrator does not believe that such a motion would be appropriate, if based on the filing of such statement with the court, the United States trustee or bankruptcy administrator determines that the debtor's case should be presumed to be an abuse under section 707(b) and the product of the debtor's current monthly income, multiplied by 12 is not less than--
`(A) the highest national or applicable State median family income reported for a family of equal or lesser size, whichever is greater; or
`(B) in the case of a household of 1 person, the national or applicable State median household income for 1 earner, whichever is greater.
`(3) In any case in which a motion to dismiss or convert, or a statement is required to be filed by this subsection, the United States trustee or bankruptcy administrator may decline to file a motion to dismiss or convert pursuant to section 704(b)(2) or if the product of the debtor's current monthly income multiplied by 12--
`(A)(i) exceeds 100 percent, but does not exceed 150 percent of the national or applicable State median household income reported for a household of equal size, whichever is greater; or
`(ii) in the case of a household of 1 person, exceeds 100 percent but does not exceed 150 percent of the national or applicable State median household income reported for 1 earner, whichever is greater; and
`(B) the product of the debtor's current monthly income (reduced by the amounts determined under section 707(b)(2)(A)(ii)) (except for the amount calculated under the other necessary expenses standard issued by the Internal Revenue Service and section 707(b)(2)(A) (iii) and (iv)) multiplied by 60 is less than the greater of--
`(i) 25 percent of the debtor's nonpriority unsecured claims in the case; or
`(4)(A) The court shall order the counsel for the debtor to reimburse the panel trustee for all reasonable costs in prosecuting a motion brought under section 707(b), including reasonable attorneys' fees, if--
`(i) a panel trustee appointed under section 586(a)(1) of title 28 brings a motion for dismissal or conversion under this subsection; and
`(I) grants that motion; and
`(II) finds that the action of the counsel for the debtor in filing under this chapter was frivolous.
`(B) If the court finds that the attorney for the debtor violated Rule 9011, at a minimum, the court shall order--
`(i) the assessment of an appropriate civil penalty against the counsel for the debtor; and
`(ii) the payment of the civil penalty to the panel trustee or the United States trustee.
`(C) In the case of a petition referred to in subparagraph (B), the signature of an attorney shall constitute a certificate that the attorney has--
`(i) performed a reasonable investigation into the circumstances that gave rise to the petition; and
`(ii) determined that the petition--
`(I) is well grounded in fact; and
`(II) is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law and does not constitute an abuse under paragraph (1).
`(5)(A) Except as provided in subparagraph (B) and subject to paragraph (6), the court may award a debtor all reasonable costs in contesting a motion brought by a party in interest (other than a panel trustee or United States trustee) under this subsection (including reasonable attorneys' fees) if--
`(i) the court does not grant the motion; and
`(ii) the court finds that--
`(I) the position of the party that brought the motion was not substantially justified; or
`(II) the party brought the motion solely for the purpose of coercing a debtor into waiving a right guaranteed to the debtor under this title.
`(B) A party in interest that has a claim of an aggregate amount less than $1,000 shall not be subject to subparagraph (A).
`(6)(A) Only the judge, United States trustee, bankruptcy administrator, or panel trustee may bring a motion under section 707(b), if the current monthly income of the debtor, or in a joint case, the debtor and the debtor's spouse, as of the date of the order for relief, when multiplied by 12, is equal to or less than--
`(i) the national or applicable State median family income reported for a family of equal or lesser size, whichever is greater; or
`(ii) in the case of a household of 1 person, the national or applicable State median household income last reported by the Bureau of the Census for 1 earner, whichever is greater.
`(B) Notwithstanding subparagraph (A), the national or applicable State median family income for a family of more than 4 individuals shall be the national or applicable State median family income last reported by the Bureau of the Census for a family of 4 individuals, whichever is greater, plus $583 for each additional member of that family.'.
(c) NONLIMITATION OF INFORMATION- Nothing in this title shall limit the ability of a creditor to provide information to a judge, United States trustee, bankruptcy administrator or panel trustee.
(d) DISMISSAL FOR CERTAIN CRIMES- Section 707 of title 11, United States Code, as amended by subsection (a) of this section, is amended by adding at the end the following:
`(c)(1) In this subsection--
`(A) the term `crime of violence' has the meaning given that term in section 16 of title 18; and
`(B) the term `drug trafficking crime' has the meaning given that term in section 924(c)(2) of title 18.
`(2) Except as provided in paragraph (3), after notice and a hearing, the court, on a motion by the victim of a crime of violence or a drug trafficking crime, or at the request of a party in interest, shall dismiss a voluntary case filed by an individual debtor under this chapter if that individual was convicted of that crime.
`(3) The court may not dismiss a case under paragraph (2) if the debtor establishes by a preponderance of the evidence that the filing of a case under this chapter is necessary to satisfy a claim for a domestic support obligation.'.
(e) CLERICAL AMENDMENT- The table of sections for chapter 7 of title 11, United States Code, is amended by striking the item relating to section 707 and inserting the following:
`707. Dismissal of a case or conversion to a case under chapter 11 or 13.'.
SEC. 103. FINDINGS AND STUDY.
(a) FINDINGS- Congress finds that the Secretary of the Treasury has the inherent authority to alter the Internal Revenue Service standards established to set guidelines for repayment plans as needed to accommodate their use under section 707(b) of title 11, United States Code.
(1) IN GENERAL- Not later than 3 years after the date of enactment of this Act, the Secretary of the Treasury, in consultation with the Director of the Executive Office of United States Trustees, shall submit a report to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives containing the findings of the Secretary concerning the utilization of Internal Revenue Service standards for determining--
(A) the current monthly expenses of a debtor under section 707(b) of title 11, United States Code; and
(B) the impact that the application of those standards has had on debtors and on the bankruptcy courts.
(2) RECOMMENDATION- The report under paragraph (1) may include recommendations for amendments to title 11, United States Code, that are consistent with the findings of the Secretary of the Treasury under paragraph (1).
SEC. 104. NOTICE OF ALTERNATIVES.
Section 342(b) of title 11, United States Code, is amended to read as follows:
`(b)(1) Before the commencement of a case under this title by an individual whose debts are primarily consumer debts, that individual shall be given or obtain (as required in section 521(a)(1), as part of the certification process under subchapter I of chapter 5) a written notice prescribed by the United States trustee for the district in which the petition is filed under section 586 of title 28.
`(2) The notice shall contain the following:
`(A) A brief description of chapters 7, 11, 12, and 13 and the general purpose, benefits, and costs of proceeding under each of those chapters.
`(B) A brief description of services that may be available to that individual from a nonprofit budget and credit counseling agency that is approved by the United States trustee for that district.'.
SEC. 105. DEBTOR FINANCIAL MANAGEMENT TRAINING TEST PROGRAM.
(a) DEVELOPMENT OF FINANCIAL MANAGEMENT AND TRAINING CURRICULUM AND MATERIALS- The Director of the Executive Office for United States Trustees (in this section referred to as the `Director') shall--
(1) consult with a wide range of individuals who are experts in the field of debtor education, including trustees who are appointed under chapter 13 of title 11, United States Code, and who operate financial management education programs for debtors; and
(2) develop a financial management training curriculum and materials that may be used to educate individual debtors concerning how to better manage their finances.
(1) IN GENERAL- The Director shall select 3 judicial districts of the United States in which to test the effectiveness of the financial management training curriculum and materials developed under subsection (a).
(2) AVAILABILITY OF CURRICULUM AND MATERIALS- For a 1-year period beginning not later than 270 days after the date of enactment of this Act, the curriculum and materials referred to in paragraph (1) shall be made available by the Director, directly or indirectly, on request to individual debtors in cases filed during that 1-year period under chapter 7 or 13 of title 11, United States Code.
(1) IN GENERAL- During the 1-year period referred to in subsection (b), the Director shall evaluate the effectiveness of--
(A) the financial management training curriculum and materials developed under subsection (a); and
(B) a sample of existing consumer education programs such as those described in the report of the National Bankruptcy Review Commission issued on October 20, 1997, that are representative of consumer education programs carried out by--
(ii) trustees serving under chapter 13 of title 11, United States Code; and
(iii) consumer counseling groups.
(2) REPORT- Not later than 3 months after concluding the evaluation under paragraph (1), the Director shall submit a report to the Speaker of the House of Representatives and the President pro tempore of the Senate, for referral to the appropriate committees of Congress, containing the findings of the Director regarding the effectiveness of such curriculum, such materials, and such programs.
SEC. 106. CREDIT COUNSELING.
(a) WHO MAY BE A DEBTOR- Section 109 of title 11, United States Code, is amended by adding at the end the following:
`(h)(1) Subject to paragraphs (2) and (3), and notwithstanding any other provision of this section, an individual may not be a debtor under this title unless that individual has, during the 180-day period preceding the date of filing of the petition of that individual, received from an approved nonprofit budget and credit counseling agency described in section 111(a) an individual or group briefing (including a briefing conducted by telephone or on the Internet) that outlined the opportunities for available credit counseling and assisted that individual in performing a related budget analysis.
`(2)(A) Paragraph (1) shall not apply with respect to a debtor who resides in a district for which the United States trustee or bankruptcy administrator of the bankruptcy court of that district determines that the approved nonprofit budget and credit counseling agency for that district is not reasonably able to provide adequate services to the additional individuals who would otherwise seek credit counseling from that agency by reason of the requirements of paragraph (1).
`(B) Each United States trustee or bankruptcy administrator that makes a determination described in subparagraph (A) shall review that determination not later than 1 year after the date of that determination, and not less frequently than every year thereafter. Notwithstanding the preceding sentence, a nonprofit budget and credit counseling service may be disapproved by the United States trustee or bankruptcy administrator at any time.
`(3)(A) Subject to subparagraph (B), the requirements of paragraph (1) shall not apply with respect to a debtor who submits to the court a certification that--
`(i) describes exigent circumstances that merit a waiver of the requirements of paragraph (1);
`(ii) states that the debtor requested credit counseling services from an approved nonprofit budget and credit counseling agency, but was unable to obtain the services referred to in paragraph (1) during the 5-day period beginning on the date on which the debtor made that request; and
`(iii) is satisfactory to the court.
`(B) With respect to a debtor, an exemption under subparagraph (A) shall cease to apply to that debtor on the date on which the debtor meets the requirements of paragraph (1), but in no case may the exemption apply to that debtor after the date that is 30 days after the debtor files a petition, except that the court, for cause, may order an additional 15 days.'.
(b) CHAPTER 7 DISCHARGE- Section 727(a) of title 11, United States Code, is amended--
(1) in paragraph (9), by striking `or' at the end;
(2) in paragraph (10), by striking the period and inserting `; or'; and
(3) by adding at the end the following:
`(11) after the filing of the petition, the debtor failed to complete an instructional course concerning personal financial management described in section 111.'.
(c) CHAPTER 13 DISCHARGE- Section 1328 of title 11, United States Code, is amended by adding at the end the following:
`(g) The court shall not grant a discharge under this section to a debtor, unless after filing a petition the debtor has completed an instructional course concerning personal financial management described in section 111.
`(h) Subsection (g) shall not apply with respect to a debtor who resides in a district for which the United States trustee or bankruptcy administrator of the bankruptcy court of that district determines that the approved instructional courses are not adequate to service the additional individuals who would be required to complete the instructional course by reason of the requirements of this section.
`(i) Each United States trustee or bankruptcy administrator that makes a determination described in subsection (h) shall review that determination not later than 1 year after the date of that determination, and not less frequently than every year thereafter.'.
(d) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, is amended--
(1) by inserting `(a)' before `The debtor shall--'; and
(2) by adding at the end the following:
`(b) In addition to the requirements under subsection (a), an individual debtor shall file with the court--
`(1) a certificate from the approved nonprofit budget and credit counseling agency that provided the debtor services under section 109(h); and
`(2) a copy of the debt repayment plan, if any, developed under section 109(h) through the approved nonprofit budget and credit counseling agency referred to in paragraph (1).'.
(1) IN GENERAL- Chapter 1 of title 11, United States Code, is amended by adding at the end the following:
`Sec. 111. Nonprofit budget and credit counseling agencies; financial management instructional courses
`(a) The clerk of each district shall maintain a list of nonprofit budget and credit counseling ageancies that provide 1 or more programs described in section 109(h) and a list of instructional courses concerning personal financial management that have been approved by--
`(1) the United States trustee; or
`(2) the bankruptcy administrator for the district.
`(b) For inclusion on the approved list under subsection (a), the United States trustee or bankruptcy administrator shall require the credit counseling service, at a minimum--
`(1) to be a nonprofit budget and credit counseling agency, the majority of the board of directors of which--
`(A) are not employed by the agency; and
`(B) will not directly or indirectly benefit financially from the outcome of a credit counseling session;
`(2) if a fee is charged for counseling services, to charge a reasonable fee, and to provide services without regard to ability to pay the fee;
`(3) to provide for safekeeping and payment of client funds, including an annual audit of the trust accounts and appropriate employee bonding;
`(4) to provide full disclosures to clients, including funding sources, counselor qualifications, and possible impact on credit reports;
`(5) to provide adequate counseling with respect to client credit problems that includes an analysis of their current situation, what brought them to that financial status, and how they can develop a plan to handle the problem without incurring negative amortization of their debts; and
`(6) to provide trained counselors who receive no commissions or bonuses based on the counseling session outcome.
`(c)(1) No credit counseling service may provide to a credit reporting agency information concerning whether an individual debtor has received or sought instruction concerning personal financial management from the credit counseling service.
`(2) A credit counseling service that willfully or negligently fails to comply with any requirement under this title with respect to a debtor shall be liable for damages in an amount equal to the sum of--
`(A) any actual damages sustained by the debtor as a result of the violation; and
`(B) any court costs or reasonable attorneys' fees (as determined by the court) incurred in an action to recover those damages.'.
(2) CLERICAL AMENDMENT- The table of sections for chapter 1 of title 11, United States Code, is amended by adding at the end the following:
`111. Nonprofit budget and credit counseling agencies; financial management instructional courses.'.
(f) LIMITATION- Section 362 of title 11, United States Code, is amended by adding at the end the following:
`(i) If a case commenced under chapter 7, 11, or 13 is dismissed due to the creation of a debt repayment plan, for purposes of subsection (c)(3), any subsequent case commenced by the debtor under any such chapter shall not be presumed to be filed not in good faith.'.
TITLE II--ENHANCED CONSUMER PROTECTION
Subtitle A--Penalties for Abusive Creditor Practices
SEC. 201. PROMOTION OF ALTERNATIVE DISPUTE RESOLUTION.
(a) REDUCTION OF CLAIM- Section 502 of title 11, United States Code, is amended by adding at the end the following:
`(k)(1) The court, on the motion of the debtor and after a hearing, may reduce a claim filed under this section based in whole on unsecured consumer debts by not more than 20 percent of the claim, if--
`(A) the claim was filed by a creditor who unreasonably refused to negotiate a reasonable alternative repayment schedule proposed by an approved credit counseling agency acting on behalf of the debtor;
`(B) the offer of the debtor under subparagraph (A)--
`(i) was made at least 60 days before the filing of the petition; and
`(ii) provided for payment of at least 60 percent of the amount of the debt over a period not to exceed the repayment period of the loan, or a reasonable extension thereof; and
`(C) no part of the debt under the alternative repayment schedule is nondischargeable.
`(2) The debtor shall have the burden of proving, by clear and convincing evidence, that--
`(A) the creditor unreasonably refused to consider the debtor's proposal; and
`(B) the proposed alternative repayment schedule was made in the 60-day period specified in paragraph (1)(B)(i).'.
(b) LIMITATION ON AVOIDABILITY- Section 547 of title 11, United States Code, is amended by adding at the end the following:
`(h) The trustee may not avoid a transfer if such transfer was made as a part of an alternative repayment plan between the debtor and any creditor of the debtor created by an approved credit counseling agency.'.
SEC. 202. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is amended by adding at the end the following:
`(i) The willful failure of a creditor to credit payments received under a plan confirmed under this title (including a plan of reorganization confirmed under chapter 11 of this title) in the manner required by the plan (including crediting the amounts required under the plan) shall constitute a violation of an injunction under subsection (a)(2).'.
SEC. 203. DISCOURAGING ABUSE OF REAFFIRMATION PRACTICES.
(a) IN GENERAL- Section 524 of title 11, United States Code, as amended by section 202 of this Act, is amended--
(1) in subsection (c) by striking paragraph (2) and inserting the following:
`(2) the debtor received the disclosures described in subsection (i) at or before the time the debtor signed the agreement.';
(2) by inserting at the end of the section the following:
`(i)(1) The disclosures required under subsection (c) paragraph (2) of this section shall consist of the disclosure statement described in paragraph (3), completed as required in that paragraph, together with the agreement, statement, declaration, motion and order described, respectively, in paragraphs (4) through (8) of this subsection, and shall be the only disclosures required in connection with the reaffirmation.
`(2) Disclosures made under this paragraph shall be made clearly and conspicuously and in writing. The terms `Amount Reaffirmed' and `Annual Percentage Rate' shall be disclosed more conspicuously than other terms, data or information provided in connection with this disclosure, except that the phrases `Before agreeing to reaffirm a debt, review these important disclosures' and `Summary of Reaffirmation Agreement' may be equally conspicuous. Disclosures may be made in a different order and may use terminology different from that set forth in paragraphs (2) through (8), except that the terms `Amount Reaffirmed' and `Annual Percentage Rate' must be used where indicated.
`(3) The disclosure statement required under this paragraph shall consist of the following:
`(A) The statement: `Part A: Before agreeing to reaffirm a debt, review these important disclosures:';
`(B) Under the heading `Summary of Reaffirmation Agreement', the statement: `This Summary is made pursuant to the requirements of the Bankruptcy Code';
`(C) The `Amount Reaffirmed', using that term, which shall be--
`(i) the total amount which the debtor agrees to reaffirm, and
`(ii) the total of any other fees or cost accrued as of the date of the disclosure statement.
`(D) In conjunction with the disclosure of the `Amount Reaffirmed', the statements--
`(i) `The amount of debt you have agreed to reaffirm'; and
`(ii) `Your credit agreement may obligate you to pay additional amounts which may come due after the date of this disclosure. Consult your credit agreement.'.
`(E) The `Annual Percentage Rate', using that term, which shall be disclosed as--
`(i) if, at the time the petition is filed, the debt is open end credit as defined pursuant to the Truth in Lending Act, title 15, United States Code, section 1601 et. seq., then--
`(I) the annual percentage rate determined pursuant to title 15, United States Code, section 1637(b) (5) and (6), as applicable, as disclosed to the debtor in the most recent periodic statement prior to the agreement or, if no such periodic statement has been provided the debtor during the prior six months, the annual percentage rate as it would have been so disclosed at the time the disclosure statement is given the debtor, or to the extent this annual percentage rate is not readily available or not applicable, then
`(II) the simple interest rate applicable to the amount reaffirmed as of the date the disclosure statement is given to the debtor, or if different simple interest rates apply to different balances, the simple interest rate applicable to each such balance, identifying the amount of each such balance included in the amount reaffirmed, or
`(III) if the entity making the disclosure elects, to disclose the annual percentage rate under (I) and the simple interest rate under (II);
`(ii) if, at the time the petition is filed, the debt is closed end credit as defined pursuant to the Truth in Lending Act, title 15, United States Code, section 1601 et seq., then--
`(I) the annual percentage rate pursuant to title 15, United States Code, section 1638(a)(4) as disclosed to the debtor in the most recent disclosure statement given the debtor prior to the reaffirmation agreement with respect to the debt, or, if no such disclosure statement was provided the debtor, the annual percentage rate as it would have been so disclosed at the time the disclosure statement is given the debtor, or to the extent this annual percentage rate is not readily available or not applicable, then
`(II) the simple interest rate applicable to the amount reaffirmed as of the date the disclosure statement is given the debtor, or if different simple interest rates apply to different balances, the simple interest rate applicable to each such balance, identifying the amount of such balance included in the amount reaffirmed, or
`(III) if the entity making the disclosure elects, to disclose the annual percentage rate under (I) and the simple interest rate under (II).
`(F) If the underlying debt transaction was disclosed as a variable rate transaction on the most recent disclosure given pursuant to the Truth in Lending Act, title 15, United States Code, section 1601 et seq., by stating `The interest rate on your loan may be a variable interest rate which changes from time to time, so that the annual percentage rate disclosed here may be higher or lower.'.
`(G) If the debt is secured by a security interest which has not been waived in whole or in part or determined to be void by a final order of the court at the time of the disclosure, by disclosing that a security interest or lien in goods or property is asserted over some or all of the obligations you are reaffirming and listing the items and their original purchase price that are subject to the asserted security interest, or if not a purchase-money security interest then listing by items or types and the original amount of the loan.
`(H) At the election of the creditor, a statement of the repayment schedule using one or a combination of the following--
`(i) by making the statement: `Your first payment in the amount $XXX is due on XXX but the future payment amount may be different. Consult your reaffirmation or credit agreement, as applicable.', and stating the amount of the first payment and the due date of that payment in the places provided;
`(ii) by making the statement: `Your payment schedule will be:', and describing the repayment schedule with the number, amount and due dates or period of payments scheduled to repay the obligations reaffirmed to the extent then known by the disclosing party; or
`(iii) by describing the debtor's repayment obligations with reasonable specificity to the extent then known by the disclosing party.
`(I) The following statement: `Note: When this disclosure talks about what a creditor `may' do, it does not use the word `may' to give the creditor specific permission. The word `may' is used to tell you what might occur if the law permits the creditor to take the action. If you have questions about your reaffirmation or what the law requires, talk to the attorney who helped you negotiate this agreement. If you don't have an attorney helping you, the judge will explain the effect of your reaffirmation when the reaffirmation hearing is held.'.
`(J) The following additional statements:
`Reaffirming a debt is a serious financial decision. The law requires you to take certain steps to make sure the decision is in your best interest. If these steps are not completed, the reaffirmation agreement is not effective, even though you have signed it.
`1. Read the disclosures in this Part A carefully. Consider the decision to reaffirm carefully. Then, if you want to reaffirm, sign the reaffirmation agreement in Part B (or you may use a separate agreement you and your creditor agree on).
`2. Complete and sign Part D and be sure you can afford to make the payments you are agreeing to make and have received a copy of the disclosure statement and a completed and signed reaffirmation agreement.
`3. If you were represented by an attorney during the negotiation of the reaffirmation agreement, the attorney must have signed the certification in Part C.
`4. If you were not represented by an attorney during the negotiation of the reaffirmation agreement, you must have completed and signed Part E.
`5. The original of this disclosure must be filed with the court by you or your creditor. If a separate reaffirmation agreement (other than the one in Part B) has been signed, it must be attached.
`6. If you were represented by an attorney during the negotiation of the reaffirmation agreement, your reaffirmation agreement becomes effective upon filing with the court unless the reaffirmation is presumed to be an undue hardship as explained in Part D.
`7. If you were not represented by an attorney during the negotiation of the reaffirmation agreement, it will not be effective unless the court approves it. The court will notify you of the hearing on your reaffirmation agreement. You must attend this hearing in bankruptcy court where the judge will review your agreement. The bankruptcy court must approve the agreement as consistent with your best interests, except that no court approval is required if the agreement is for a consumer debt secured by a mortgage, deed of trust, security deed or other lien on your real property, like your home.
`Your right to rescind a reaffirmation. You may rescind (cancel) your reaffirmation at any time before the bankruptcy court enters a discharge order or within 60 days after the agreement is filed with the court, whichever is longer. To rescind or cancel, you must notify the creditor that the agreement is canceled.
`What are your obligations if you reaffirm the debt? A reaffirmed debt remains your personal legal obligation. It is not discharged in your bankruptcy. That means that if you default on your reaffirmed debt after your bankruptcy is over, your creditor may be able to take your property or your wages. Otherwise, your obligations will be determined by the reaffirmation agreement which may have changed the terms of the original agreement. For example, if you are reaffirming an open end credit agreement, the creditor may be permitted by that agreement and/or applicable law to change the terms of the agreement in the future under certain conditions.
`Are you required to enter into a reaffirmation agreement by any law? No, you are not required to reaffirm a debt by any law. Only agree to reaffirm a debt if it is in your best interest. Be sure you can afford the payments you agree to make.
`What if your creditor has a security interest or lien? Your bankruptcy discharge does not eliminate any lien on your property. A `lien' is often referred to as a security interest, deed of trust, mortgage or security deed. Even if you do not reaffirm and your personal liability on the debt is discharged, because of the lien your creditor may still have the right to take the security property if you do not pay the debt or default on it. If the lien is on an item of personal property that is exempt under your State's law or that the trustee has abandoned, you may be able to redeem the item rather than reaffirm the debt. To redeem, you make a single payment to the creditor equal to the current value of the security property, as agreed by the parties or determined by the court.'.
`(4) The form of reaffirmation agreement required under this paragraph shall consist of the following:
`Part B: Reaffirmation Agreement. I/we agree to reaffirm the obligations arising under the credit agreement described below.
`Brief description of credit agreement:
`Description of any changes to the credit agreement made as part of this reaffirmation agreement:
`Co-borrower, if also reaffirming:
`Date of creditor acceptance:'.
`(5)(A) The declaration shall consist of the following:
`Part C: Certification by Debtor's Attorney (If Any).
`I hereby certify that (1) this agreement represents a fully informed and voluntary agreement by the debtor(s); (2) this agreement does not impose an undue hardship on the debtor or any dependent of the debtor; and (3) I have fully advised the debtor of the legal effect and consequences of this agreement and any default under this agreement.
`Signature of Debtor's Attorney: Date:'.
`(B) In the case of reaffirmations in which a presumption of undue hardship has been established, the certification shall state that in the opinion of the attorney, the debtor is able to make the payment.
`(6) The statement in support of reaffirmation agreement, which the debtor shall sign and date prior to filing with the court, shall consist of the following:
`Part D: Debtor's Statement in Support of Reaffirmation Agreement.
`1. I believe this agreement will not impose an undue hardship on my dependents or me. I can afford to make the payments on the reaffirmed debt because my monthly income (take home pay plus any other income received) is $XXX, and my actual current monthly expenses including monthly payments on post-bankruptcy debt and other reaffirmation agreements total $XXX, leaving $XXX to make the required payments on this reaffirmed debt. I understand that if my income less my monthly expenses does not leave enough to make the payments, this reaffirmation agreement is presumed to be an undue hardship on me and must be reviewed by the court. However, this presumption may be overcome if I explain to the satisfaction of the court how I can afford to make the payments here: XXX.
`2. I received a copy of the Reaffirmation Disclosure Statement in Part A and a completed and signed reaffirmation agreement.'.
`(7) The motion, which may be used if approval of the agreement by the court is required in order for it to be effective and shall be signed and dated by the moving party, shall consist of the following:
`Part E: Motion for Court Approval (To be completed only where debtor is not represented by an attorney.). I (we), the debtor, affirm the following to be true and correct:
`I am not represented by an attorney in connection with this reaffirmation agreement.
`I believe this agreement is in my best interest based on the income and expenses I have disclosed in my Statement in Support of this reaffirmation agreement above, and because (provide any additional relevant reasons the court should consider):
`Therefore, I ask the court for an order approving this reaffirmation agreement.'.
`(8) The court order, which may be used to approve a reaffirmation, shall consist of the following:
`Court Order: The court grants the debtor's motion and approves the reaffirmation agreement described above.'.
`(j) Notwithstanding any other provision of this title:
`(1) A creditor may accept payments from a debtor before and after the filing of a reaffirmation agreement with the court.
`(2) A creditor may accept payments from a debtor under a reaffirmation agreement which the creditor believes in good faith to be effective.
`(3) The requirements of subsections (c)(2) and (i) shall be satisfied if disclosures required under those subsections are given in good faith.
`(k) Until 60 days after a reaffirmation agreement is filed with the court (or such additional period as the court, after notice and hearing and for cause, orders before the expiration of such period), it shall be presumed that the reaffirmation agreement is an undue hardship on the debtor if the debtor's monthly income less the debtor's monthly expenses as shown on the debtor's completed and signed statement in support of the reaffirmation agreement required under subsection (i)(6) of this section is less than the scheduled payments on the reaffirmed debt. This presumption must be reviewed by the court. The presumption may be rebutted in writing by the debtor if the statement includes an explanation which identifies additional sources of funds to make the payments as agreed upon under the terms of the reaffirmation agreement. If the presumption is not rebutted to the satisfaction of the court, the court may disapprove the agreement. However, no agreement shall be disapproved without notice and hearing to the debtor and creditor and such hearing must be concluded before the entry of the debtor's discharge.'.
(1) IN GENERAL- Chapter 9 of title 18, United States Code, is amended by adding at the end the following:
`Sec. 158. Designation of United States attorneys and agents of the Federal Bureau of Investigation to address abusive reaffirmations of debt and materially fraudulent statements in bankruptcy schedules
`(a) IN GENERAL- The Attorney General of the United States shall designate the individuals described in subsection (b) to have primary responsibility in carrying out enforcement activities in addressing violations of section 152 or 157 relating to abusive reaffirmations of debt. In addition to addressing the violations referred to in the preceding sentence, the individuals described under subsection (b) shall address violations of section 152 or 157 relating to materially fraudulent statements in bankruptcy schedules that are intentionally false or intentionally misleading.
`(b) UNITED STATES DISTRICT ATTORNEYS AND AGENTS OF THE FEDERAL BUREAU OF INVESTIGATION--The individuals referred to in subsection (a) are--
`(1) a United States attorney for each judicial district of the United States; and
`(2) an agent of the Federal Bureau of Investigation (within the meaning of section 3107) for each field office of the Federal Bureau of Investigation.
`(c) BANKRUPTCY INVESTIGATIONS- Each United States attorney designated under this section shall have primary responsibility for carrying out the duties of a United States attorney under section 3057.
`(d) BANKRUPTCY PROCEDURES- The bankruptcy courts shall establish procedures for referring any case which may contain a materially fraudulent statement in a bankruptcy schedule to the individuals designated under this section.'.
(2) CLERICAL AMENDMENT- The analysis for chapter 9 of title 18, United States Code, is amended by adding at the end the following:
`158. Designation of United States attorneys and agents of the Federal Bureau of Investigation to address abusive reaffirmations of debt and materially fraudulent statements in bankruptcy schedules.'.
Subtitle B--Priority Child Support
SEC. 211. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.
Section 101 of title 11, United States Code, is amended--
(1) by striking paragraph (12A); and
(2) by inserting after paragraph (14) the following:
`(14A) `domestic support obligation' means a debt that accrues before or after the entry of an order for relief under this title, including interest that accrues on that debt as provided under applicable nonbankruptcy law notwithstanding any other provision of this title, that is--
`(A) owed to or recoverable by--
`(i) a spouse, former spouse, or child of the debtor or such child's parent, legal guardian, or responsible relative; or
`(ii) a governmental unit;
`(B) in the nature of alimony, maintenance, or support (including assistance provided by a governmental unit) of such spouse, former spouse, or child of the debtor or such child's parent, without regard to whether such debt is expressly so designated;
`(C) established or subject to establishment before or after entry of an order for relief under this title, by reason of applicable provisions of--
`(i) a separation agreement, divorce decree, or property settlement agreement;
`(ii) an order of a court of record; or
`(iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit; and
`(D) not assigned to a nongovernmental entity, unless that obligation is assigned voluntarily by the spouse, former spouse, child, or parent, legal guardian, or responsible relative of the child for the purpose of collecting the debt.'.
SEC. 212. PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT OBLIGATIONS.
Section 507(a) of title 11, United States Code, is amended--
(1) by striking paragraph (7);
(2) by redesignating paragraphs (1) through (6) as paragraphs (2) through (7), respectively;
(3) in paragraph (2), as redesignated, by striking `First' and inserting `Second';
(4) in paragraph (3), as redesignated, by striking `Second' and inserting `Third';
(5) in paragraph (4), as redesignated, by striking `Third' and inserting `Fourth';
(6) in paragraph (5), as redesignated, by striking `Fourth' and inserting `Fifth';
(7) in paragraph (6), as redesignated, by striking `Fifth' and inserting `Sixth';
(8) in paragraph (7), as redesignated, by striking `Sixth' and inserting `Seventh'; and
(9) by inserting before paragraph (2), as redesignated, the following:
`(A) Allowed unsecured claims for domestic support obligations that, as of the date of the filing of the petition, are owed to or recoverable by a spouse, former spouse, or child of the debtor, or the parent, legal guardian, or responsible relative of such child, without regard to whether the claim is filed by such person or is filed by a governmental unit on behalf of that person, on the condition that funds received under this paragraph by a governmental unit under this title after the date of filing of the petition shall be applied and distributed in accordance with applicable nonbankruptcy law.
`(B) Subject to claims under subparagraph (A), allowed unsecured claims for domestic support obligations that, as of the date the petition was filed are assigned by a spouse, former spouse, child of the debtor, or such child's parent, legal guardian, or responsible relative to a governmental unit (unless such obligation is assigned voluntarily by the spouse, former spouse, child, parent, legal guardian, or responsible relative of the child for the purpose of collecting the debt) or are owed directly to or recoverable by a government unit under applicable nonbankruptcy law, on the condition that funds received under this paragraph by a governmental unit under this title after the date of filing of the petition be applied and distributed in accordance with applicable nonbankruptcy law.'.
SEC. 213. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE IN CASES INVOLVING DOMESTIC SUPPORT OBLIGATIONS.
Title 11, United States Code, is amended--
(1) in section 1129(a), by adding at the end the following:
`(14) If the debtor is required by a judicial or administrative order or statute to pay a domestic support obligation, the debtor has paid all amounts payable under such order or statute for such obligation that first become payable after the date on which the petition is filed.';
(A) in paragraph (8), by striking `or' at the end;
(B) in paragraph (9), by striking the period at the end and inserting `; and'; and
(C) by adding at the end the following:
`(10) failure of the debtor to pay any domestic support obligation that first becomes payable after the date on which the petition is filed.';
(A) in paragraph (2), by striking `and' at the end;
(B) in paragraph (3), by striking the period at the end and inserting `; and'; and
(C) by adding at the end the following:
`(4) notwithstanding any other provision of this section, a plan may provide for less than full payment of all amounts owed for a claim entitled to priority under section 507(a)(1)(B) only if the plan provides that all of the debtor's projected disposable income for a 5-year period, beginning on the date that the first payment is due under the plan, will be applied to make payments under the plan.';
(A) by redesignating paragraph (10) as paragraph (11); and
(B) by inserting after paragraph (9) the following:
`(10) provide for the payment of interest accruing after the date of the filing of the petition on unsecured claims that are nondischargeable under section 1328(a), except that such interest may be paid only to the extent that the debtor has disposable income available to pay such interest after making provision for full payment of all allowed claims;';
(A) in paragraph (5), by striking `and' at the end;
(B) in paragraph (6), by striking the period at the end and inserting `; and'; and
(C) by adding at the end the following:
`(7) if the debtor is required by a judicial or administrative order or statute to pay a domestic support obligation, the debtor has paid all amounts payable under such order for such obligation that first become payable after the date on which the petition is filed.';
(6) in section 1228(a), in the matter preceding paragraph (1), by inserting `, and in the case of a debtor who is required by a judicial or administrative order to pay a domestic support obligation, after such debtor certifies that all amounts payable under such order or statute that are due on or before the date of the certification (including amounts due before the petition was filed, but only to the extent provided for in the plan) have been paid' after `completion by the debtor of all payments under the plan';
(A) in paragraph (9), by striking `or' at the end;
(B) in paragraph (10), by striking the period at the end and inserting `; or'; and
(C) by adding at the end the following:
`(11) failure of the debtor to pay any domestic support obligation that first becomes payable after the date on which the petition is filed.';
(A) in paragraph (2), by striking `and' at the end;
(B) in paragraph (3), by striking the period at the end and inserting `; and'; and
(C) by adding in the end the following:
`(4) notwithstanding any other provision of this section, a plan may provide for less than full payment of all amounts owed for a claim entitled to priority under section 507(a)(1)(B) only if the plan provides that all of the debtor's projected disposable income for a 5-year period beginning on the date that the first payment is due under the plan will be applied to make payments under the plan.';
(A) in paragraph (9), by striking `; and' and inserting a semicolon;
(B) by redesignating paragraph (10) as paragraph (11); and
(C) inserting after paragraph (9) the following:
`(10) provide for the payment of interest accruing after the date of the filing of the petition on unsecured claims that are nondischargeable under section 1328(a), except that such interest may be paid only to the extent that the debtor has disposable income available to pay such interest after making provision for full payment of all allowed claims; and';
(10) in section 1325(a)--
(A) in paragraph (5), by striking `and' at the end;
(B) in paragraph (6), by striking the period at the end and inserting `; and'; and
(C) by adding at the end the following:
`(7) if the debtor is required by a judicial or administrative order or statute to pay a domestic support obligation, the debtor has paid amounts payable after the date on which the petition is filed.'; and
(11) in section 1328(a), in the matter preceding paragraph (1), by inserting `, and in the case of a debtor who is required by a judicial or administrative order to pay a domestic support obligation, after such debtor certifies that all amounts payable under such order or statute that are due on or before the date of the certification (including amounts due before the petition was filed, but only to the extent provided for in the plan) have been paid' after `completion by the debtor of all payments under the plan'.
SEC. 214. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT OBLIGATION PROCEEDINGS.
Section 362(b) of title 11, United States Code, is amended by striking paragraph (2) and inserting the following:
`(2) under subsection (a)--
`(A) of the commencement or continuation of a civil action or proceeding--
`(i) for the establishment of paternity;
`(ii) for the establishment or modification of an order for domestic support obligations;
`(iii) concerning child custody or visitation;
`(iv) for the dissolution of a marriage except to the extent that such a proceeding seeks to determine the division of property which is property of the estate; or
`(v) regarding domestic violence;
`(B) the collection of a domestic support obligation from property that is not property of the estate;
`(C) with respect to the withholding of income that is property of the estate or property of the debtor for payment of a domestic support obligation pursuant to a judicial or administrative order;
`(D) the withholding, suspension, or restriction of drivers' licenses, professional and occupational licenses, and recreational licenses under State law, as specified in section 466(a)(16) of the Social Security Act (42 U.S.C. 666(a)(16));
`(E) the reporting of overdue support owed by a parent to any consumer reporting agency as specified in section 466(a)(7) of the Social Security Act (42 U.S.C. 666(a)(7));
`(F) the interception of tax refunds, as specified in sections 464 and 466(a)(3) of the Social Security Act (42 U.S.C. 664 and 666(a)(3)) or under an analogous State law; or
`(G) the enforcement of medical obligations as specified under title IV of the Social Security Act (42 U.S.C. 601 et seq.).';
SEC. 215. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR ALIMONY, MAINTENANCE, AND SUPPORT.
Section 523 of title 11, United States Code, is amended--
(A) by striking paragraph (5) and inserting the following:
`(5) for a domestic support obligation;';
(i) by inserting `to a spouse, former spouse, or child of the debtor and' before `not of the kind';
(ii) by inserting `or' after `court of record'; and
(iii) by striking `unless--' and all that follows through the end of the paragraph and inserting a semicolon; and
(C) by striking paragraph (18); and
(2) in subsection (c), by striking `(6), or (15)' and inserting `or (6)'.
SEC. 216. CONTINUED LIABILITY OF PROPERTY.
Section 522 of title 11, United States Code, is amended--
(1) in subsection (c), by striking paragraph (1) and inserting the following:
`(1) a debt of a kind specified in paragraph (1) or (4) of section 523(a) (in which case, notwithstanding any provision of applicable nonbankruptcy law to the contrary, such property shall be liable for a debt of a kind specified in section 523(a)(4));'; and
(2) in subsection (f)(1)(A), by striking the dash and all that follows through the end of the subparagraph and inserting `of a kind that is specified in section 523(a)(4); or'.
SEC. 217. PROTECTION OF DOMESTIC SUPPORT CLAIMS AGAINST PREFERENTIAL TRANSFER MOTIONS.
Section 547(c)(7) of title 11, United States Code, is amended to read as follows:
`(7) to the extent such transfer was a bona fide payment of a debt for a domestic support obligation; or'.
SEC. 218. DISPOSABLE INCOME DEFINED.
(a) CONFIRMATION OF PLAN UNDER CHAPTER 12- Section 1225(b)(2)(A) of title 11, United States Code, is amended by inserting `or for a domestic support obligation that first becomes payable after the date on which the petition is filed' after `dependent of the debtor'.
(b) CONFIRMATION OF PLAN UNDER CHAPTER 13- Section 1325(b)(2)(A) of title 11, United States Code, is amended by inserting `or for a domestic support obligation that first becomes payable after the date on which the petition is filed' after `dependent of the debtor'.
SEC. 219. COLLECTION OF CHILD SUPPORT.
(a) DUTIES OF TRUSTEE UNDER CHAPTER 7- Section 704 of title 11, United States Code, as amended by section 102(b) of this Act, is amended--
(A) in paragraph (8), by striking `and' at the end;
(B) in paragraph (9), by striking the period and inserting `; and'; and
(C) by adding at the end the following:
`(10) if, with respect to an individual debtor, there is a claim for a domestic support obligation, provide the applicable notification specified in subsection (c).'; and
(2) by adding at the end the following:
`(c)(1) In any case described in subsection (a)(10), the trustee shall--
`(A)(i) notify in writing the holder of the claim of the right of that holder to use the services of a State child support enforcement agency established under sections 464 and 466 of the Social Security Act (42 U.S.C. 664 and 666, respectively) for the State in which the holder resides for assistance in collecting child support during and after the bankruptcy procedures;
`(ii) include in the notice under this paragraph the address and telephone number of the child support enforcement agency; and
`(iii) include in the notice an explanation of the rights of the holder of the claim to payment of the claim under this chapter; and
`(B)(i) notify in writing the State child support agency of the State in which the holder of the claim resides of the claim;
`(ii) include in the notice under this paragraph the name, address, and telephone number of the holder of the claim; and
`(iii) at such time as the debtor is granted a discharge under section 727, notify the holder of that claim and the State child support agency of the State in which that holder resides of--
`(I) the granting of the discharge;
`(II) the last recent known address of the debtor;
`(III) the last recent known name and address of the debtor's employer; and
`(IV) with respect to the debtor's case, the name of each creditor that holds a claim that--
`(aa) is not discharged under paragraph (2), (4), or (14A) of section 523(a); or
`(bb) was reaffirmed by the debtor under section 524(c).
`(2)(A) A holder of a claim or a State child support agency may request from a creditor described in paragraph (1)(B)(iii)(IV) the last known address of the debtor.
`(B) Notwithstanding any other provision of law, a creditor that makes a disclosure of a last known address of a debtor in connection with a request made under subparagraph (A) shall not be liable to the debtor or any other person by reason of making that disclosure.'.
(b) DUTIES OF TRUSTEE UNDER CHAPTER 11- Section 1106 of title 11, United States Code, is amended--
(A) in paragraph (6), by striking `and' at the end;
(B) in paragraph (7), by striking the period and inserting `; and'; and
(C) by adding at the end the following:
`(8) if, with respect to an individual debtor, there is a claim for a domestic support obligation, provide the applicable notification specified in subsection (c).'; and
(2) by adding at the end the following:
`(c)(1) In any case described in subsection (a)(7), the trustee shall--
`(A)(i) notify in writing the holder of the claim of the right of that holder to use the services of a State child support enforcement agency established under sections 464 and 466 of the Social Security Act (42 U.S.C. 664 and 666) for the State in which the holder resides; and
`(ii) include in the notice under this paragraph the address and telephone number of the child support enforcement agency; and
`(B)(i) notify, in writing, the State child support agency (of the State in which the holder of the claim resides) of the claim;
`(ii) include in the notice under this paragraph the name, address, and telephone number of the holder of the claim; and
`(iii) at such time as the debtor is granted a discharge under section 1141, notify the holder of the claim and the State child support agency of the State in which that holder resides of--
`(I) the granting of the discharge;
`(II) the last recent known address of the debtor;
`(III) the last recent known name and address of the debtor's employer; and
`(IV) with respect to the debtor's case, the name of each creditor that holds a claim that--
`(aa) is not discharged under paragraph (2), (3), or (14) of section 523(a); or
`(bb) was reaffirmed by the debtor under section 524(c).
`(2)(A) A holder of a claim or a State child support agency may request from a creditor described in paragraph (1)(B)(iii)(IV) the last known address of the debtor.
`(B) Notwithstanding any other provision of law, a creditor that makes a disclosure of a last known address of a debtor in connection with a request made under subparagraph (A) shall not be liable to the debtor or any other person by reason of making that disclosure.'.
(c) DUTIES OF TRUSTEE UNDER CHAPTER 12- Section 1202 of title 11, United States Code, is amended--
(A) in paragraph (4), by striking `and' at the end;
(B) in paragraph (5), by striking the period and inserting `; and'; and
(C) by adding at the end the following:
`(6) if, with respect to an individual debtor, there is a claim for a domestic support obligation, provide the applicable notification specified in subsection (c).'; and
(2) by adding at the end the following:
`(c)(1) In any case described in subsection (b)(6), the trustee shall--
`(A)(i) notify in writing the holder of the claim of the right of that holder to use the services of a State child support enforcement agency established under sections 464 and 466 of the Social Security Act (42 U.S.C. 664 and 666) for the State in which the holder resides; and
`(ii) include in the notice under this paragraph the address and telephone number of the child support enforcement agency; and
`(B)(i) notify, in writing, the State child support agency (of the State in which the holder of the claim resides) of the claim;
`(ii) include in the notice under this paragraph the name, address, and telephone number of the holder of the claim; and
`(iii) at such time as the debtor is granted a discharge under section 1228, notify the holder of the claim and the State child support agency of the State in which that holder resides of--
`(I) the granting of the discharge;
`(II) the last recent known address of the debtor;
`(III) the last recent known name and address of the debtor's employer; and
`(IV) with respect to the debtor's case, the name of each creditor that holds a claim that--
`(aa) is not discharged under paragraph (2), (3), or (14) of section 523(a); or
`(bb) was reaffirmed by the debtor under section 524(c).
`(2)(A) A holder of a claim or a State child support agency may request from a creditor described in paragraph (1)(B)(iii)(IV) the last known address of the debtor.
`(B) Notwithstanding any other provision of law, a creditor that makes a disclosure of a last known address of a debtor in connection with a request made under subparagraph (A) shall not be liable to the debtor or any other person by reason of making that disclosure.'.
(d) DUTIES OF TRUSTEE UNDER CHAPTER 13- Section 1302 of title 11, United States Code, is amended--
(A) in paragraph (4), by striking `and' at the end;
(B) in paragraph (5), by striking the period and inserting `; and'; and
(C) by adding at the end the following:
`(6) if, with respect to an individual debtor, there is a claim for a domestic support obligation, provide the applicable notification specified in subsection (d); and
`(7) provide information relating to the administration of cases that is practical to any not-for-profit entity which shall provide information to parties in interest in a timely and convenient manner, including telephonic and Internet access, at no cost or a nominal cost.
An entity described in paragraph (7) shall provide parties in interest with reasonable information about each case on behalf of the trustee of that case, including the status of the debtor's payments to the plan, the unpaid balance payable to each creditor treated by the plan, and the amount and date of payments made under the plan. The trustee shall have no duty to provide information under paragraph (7) if no such entity has been established.'; and
(2) by adding at the end the following:
`(d)(1) In any case described in subsection (b)(6), the trustee shall--
`(A)(i) notify in writing the holder of the claim of the right of that holder to use the services of a State child support enforcement agency established under sections 464 and 466 of the Social Security Act (42 U.S.C. 664 and 666, respectively) for the State in which the holder resides; and
`(ii) include in the notice under this paragraph the address and telephone number of the child support enforcement agency; and
`(B)(i) notify in writing the State child support agency of the State in which the holder of the claim resides of the claim;
`(ii) include in the notice under this paragraph the name, address, and telephone number of the holder of the claim; and
`(iii) at such time as the debtor is granted a discharge under section 1328, notify the holder of the claim and the State child support agency of the State in which that holder resides of--
`(I) the granting of the discharge;
`(II) the last recent known address of the debtor;
`(III) the last recent known name and address of the debtor's employer; and
`(IV) with respect to the debtor's case, the name of each creditor that holds a claim that--
`(aa) is not discharged under paragraph (2), (3), or (14) of section 523(a); or
`(bb) was reaffirmed by the debtor under section 524(c).
`(2)(A) A holder of a claim or a State child support agency may request from a creditor described in paragraph (1)(B)(iii)(IV) the last known address of the debtor.
`(B) Notwithstanding any other provision of law, a creditor that makes a disclosure of a last known address of a debtor in connection with a request made under subparagraph (A) shall not be liable to the debtor or any other person by reason of making that disclosure.'.
SEC. 220. NONDISCHARGEABILITY OF CERTAIN EDUCATIONAL BENEFITS AND LOANS.
Section 523(a) of title 11, United States Code, is amended by striking paragraph (8) and inserting the following:
`(8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents, for--
`(A)(i) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or
`(ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or
`(B) any other educational loan that is a qualified education loan, as that term is defined in section 221(e)(1) of the Internal Revenue Code of 1986, incurred by an individual debtor;'.
Subtitle C--Other Consumer Protections
SEC. 221. AMENDMENTS TO DISCOURAGE ABUSIVE BANKRUPTCY FILINGS.
Section 110 of title 11, United States Code, is amended--
(1) in subsection (a)(1), by inserting `, under the direct supervision of an attorney,' after `who';
(A) in paragraph (1), by adding at the end the following: `If a bankruptcy petition preparer is not an individual, then an officer, principal, responsible person, or partner of the preparer shall be required to--
`(A) sign the document for filing; and
`(B) print on the document the name and address of that officer, principal, responsible person or partner.';
(B) by striking paragraph (2) and inserting the following:
`(2)(A) Before preparing any document for filing or accepting any fees from a debtor, the bankruptcy petition preparer shall provide to the debtor a written notice to debtors concerning bankruptcy petition preparers, which shall be on an official form issued by the Judicial Conference of the United States.
`(B) The notice under subparagraph (A)--
`(i) shall inform the debtor in simple language that a bankruptcy petition preparer is not an attorney and may not practice law or give legal advice;
`(ii) may contain a description of examples of legal advice that a bankruptcy petition preparer is not authorized to give, in addition to any advice that the preparer may not give by reason of subsection (e)(2); and
`(bb) the bankruptcy petition preparer, under penalty of perjury; and
`(II) be filed with any document for filing.';
(i) by striking `(2) For purposes' and inserting `(2)(A) Subject to subparagraph (B), for purposes'; and
(ii) by adding at the end the following:
`(B) If a bankruptcy petition preparer is not an individual, the identifying number of the bankruptcy petition preparer shall be the Social Security account number of the officer, principal, responsible person, or partner of the preparer.'; and
(B) by striking paragraph (3);
(A) by striking `(d)(1)' and inserting `(d)'; and
(B) by striking paragraph (2);
(A) by striking paragraph (2); and
(B) by adding at the end the following:
`(2)(A) A bankruptcy petition preparer may not offer a potential bankruptcy debtor any legal advice, including any legal advice described in subparagraph (B).
`(B) The legal advice referred to in subparagraph (A) includes advising the debtor--
`(I) to file a petition under this title; or
`(II) commencing a case under chapter 7, 11, 12, or 13 is appropriate;
`(ii) whether the debtor's debts will be eliminated or discharged in a case under this title;
`(iii) whether the debtor will be able to retain the debtor's home, car, or other property after commencing a case under this title;
`(I) the tax consequences of a case brought under this title; or
`(II) the dischargeability of tax claims;
`(v) whether the debtor may or should promise to repay debts to a creditor or enter into a reaffirmation agreement with a creditor to reaffirm a debt;
`(vi) concerning how to characterize the nature of the debtor's interests in property or the debtor's debts; or
`(vii) concerning bankruptcy procedures and rights.';
(A) by striking `(f)(1)' and inserting `(f)'; and
(B) by striking paragraph (2);
(A) by striking `(g)(1)' and inserting `(g)'; and
(B) by striking paragraph (2);
(A) by redesignating paragraphs (1) through (4) as paragraphs (2) through (5), respectively;
(B) by inserting before paragraph (2), as so redesignated, the following:
`(h)(1) The Supreme Court may promulgate rules under section 2075 of title 28, or the Judicial Conference of the United States may prescribe guidelines, for setting a maximum allowable fee chargeable by a bankruptcy petition preparer. A bankruptcy petition preparer shall notify the debtor of any such maximum amount before preparing any document for filing for a debtor or accepting any fee from the debtor.';
(C) in paragraph (2), as redesignated by subparagraph (A) of this paragraph--
(i) by striking `Within 10 days after the date of filing a petition, a bankruptcy petition preparer shall file a' and inserting `A';
(ii) by inserting `by the bankruptcy petition preparer shall be filed together with the petition,' after `perjury'; and
(iii) by adding at the end the following: `If rules or guidelines setting a maximum fee for services have been promulgated or prescribed under paragraph (1), the declaration under this paragraph shall include a certification that the bankruptcy petition preparer complied with the notification requirement under paragraph (1).';
(D) by striking paragraph (3), as redesignated by subparagraph (A) of this paragraph, and inserting the following:
`(3)(A) The court shall disallow and order the immediate turnover to the bankruptcy trustee any fee referred to in paragraph (2) found to be in excess of the value of any services--
`(i) rendered by the preparer during the 12-month period immediately preceding the date of filing of the petition; or
`(ii) found to be in violation of any rule or guideline promulgated or prescribed under paragraph (1).
`(B) All fees charged by a bankruptcy petition preparer may be forfeited in any case in which the bankruptcy petition preparer fails to comply with this subsection or subsection (b), (c), (d), (e), (f), or (g).
`(C) An individual may exempt any funds recovered under this paragraph under section 522(b).'; and
(E) in paragraph (4), as redesignated by subparagraph (A) of this paragraph, by striking `or the United States trustee' and inserting `the United States trustee, or the court, on the initiative of the court,';
(9) in subsection (i)(1), by striking the matter preceding subparagraph (A) and inserting the following:
`(i) If a bankruptcy petition preparer violates this section or commits any act that the court finds to be fraudulent, unfair, or deceptive, on motion of the debtor, trustee, or United States trustee, and after the court holds a hearing with respect to that violation or act, the court shall order the bankruptcy petition preparer to pay to the debtor--';
(i) in subparagraph (A)(i)(I), by striking `a violation of which subjects a person to criminal penalty';
(ii) in subparagraph (B)--
(I) by striking `or has not paid a penalty' and inserting `has not paid a penalty'; and
(II) by inserting `or failed to disgorge all fees ordered by the court' after `a penalty imposed under this section,';
(B) by redesignating paragraph (3) as paragraph (4); and
(C) by inserting after paragraph (2) the following:
`(3) The court, as part of its contempt power, may enjoin a bankruptcy petition preparer that has failed to comply with a previous order issued under this section. The injunction under this paragraph may be issued upon motion of the court, the trustee, or the United States trustee.'; and
(11) by adding at the end the following:
`(l)(1) A bankruptcy petition preparer who fails to comply with any provision of subsection (b), (c), (d), (e), (f), (g), or (h) may be fined not more than $500 for each such failure.
`(2) The court shall triple the amount of a fine assessed under paragraph (1) in any case in which the court finds that a bankruptcy petition preparer--
`(A) advised the debtor to exclude assets or income that should have been included on applicable schedules;
`(B) advised the debtor to use a false Social Security account number;
`(C) failed to inform the debtor that the debtor was filing for relief under this title; or
`(D) prepared a document for filing in a manner that failed to disclose the identity of the preparer.
`(3) The debtor, the trustee, a creditor, or the United States trustee may file a motion for an order imposing a fine on the bankruptcy petition preparer for each violation of this section.
`(4) All fines imposed under this section shall be paid to the United States trustee, who shall deposit an amount equal to such fines in a special account of the United States Trustee System Fund referred to in section 586(e)(2) of title 28. Amounts deposited under this paragraph shall be available to fund the enforcement of this section on a national basis.'.
SEC. 222. SENSE OF CONGRESS.
It is the sense of Congress that States should develop curricula relating to the subject of personal finance, designed for use in elementary and secondary schools.
SEC. 223. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES CODE.
(a) IN GENERAL- Section 507(a) of title 11, United States Code, as amended by section 212 of this Act, is amended by inserting after paragraph (9) the following:
`(10) Tenth, allowed claims for death or personal injuries resulting from the operation of a motor vehicle or vessel if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance.'.
(b) VESSELS- Section 523(a)(8) of title 11, United States Code, is amended by inserting `or vessel' after `vehicle'.
SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.
(a) IN GENERAL- Section 522 of title 11, United States Code, as amended by section 215 of this Act, is amended--
(i) by striking `(2)(A) any property' and inserting:
`(3) Property listed in this paragraph is--
(ii) in subparagraph (A), by striking `and' at the end;
(iii) in subparagraph (B), by striking the period at the end and inserting `; and'; and
(iv) by adding at the end the following:
`(C) retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986.';
(B) by striking paragraph (1) and inserting:
`(2) Property listed in this paragraph is property that is specified under subsection (d), unless the State law that is applicable to the debtor under paragraph (3)(A) specifically does not so authorize.';
(C) in the matter preceding paragraph (2)--
(i) by striking `(b)' and inserting `(b)(1)';
(ii) by striking `paragraph (2)' both places it appears and inserting `paragraph (3)';
(iii) by striking `paragraph (1)' each place it appears and inserting `paragraph (2)'; and
(iv) by striking `Such property is--'; and
(D) by adding at the end of the subsection the following:
`(4) For purposes of paragraph (3)(C) and subsection (d)(12), the following shall apply:
`(A) If the retirement funds are in a retirement fund that has received a favorable determination pursuant to section 7805 of the Internal Revenue Code of 1986, and that determination is in effect as of the date of the commencement of the case under section 301, 302, or 303 of this title, those funds shall be presumed to be exempt from the estate.
`(B) If the retirement funds are in a retirement fund that has not received a favorable determination pursuant to such section 7805, those funds are exempt from the estate if the debtor demonstrates that--
`(i) no prior determination to the contrary has been made by a court or the Internal Revenue Service; and
`(ii)(I) the retirement fund is in substantial compliance with the applicable requirements of the Internal Revenue Code of 1986; or
`(II) the retirement fund fails to be in substantial compliance with the applicable requirements of the Internal Revenue Code of 1986 and the debtor is not materially responsible for that failure.
`(C) A direct transfer of retirement funds from 1 fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986, pursuant to section 401(a)(31) of the Internal Revenue Code of 1986, or otherwise, shall not cease to qualify for exemption under paragraph (3)(C) or subsection (d)(12) by reason of that direct transfer.
`(D)(i) Any distribution that qualifies as an eligible rollover distribution within the meaning of section 402(c) of the Internal Revenue Code of 1986 or that is described in clause (ii) shall not cease to qualify for exemption under paragraph (3)(C) or subsection (d)(12) by reason of that distribution.
`(ii) A distribution described in this clause is an amount that--
`(I) has been distributed from a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986; and
`(II) to the extent allowed by law, is deposited in such a fund or account not later than 60 days after the distribution of that amount.'; and
(A) in the matter preceding paragraph (1), by striking `subsection (b)(1)' and inserting `subsection (b)(2)'; and
(B) by adding at the end the following:
`(12) Retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986.'.
(b) AUTOMATIC STAY- Section 362(b) of title 11, United States Code, as amended by section 214 of this Act, is amended--
(1) in paragraph (18), by striking `or' at the end;
(2) in paragraph (19), by striking the period and inserting `; or';
(3) by inserting after paragraph (19) the following:
`(20) under subsection (a), of withholding of income from a debtor's wages and collection of amounts withheld, pursuant to the debtor's agreement authorizing that withholding and collection for the benefit of a pension, profit-sharing, stock bonus, or other plan established under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986 that is sponsored by the employer of the debtor, or an affiliate, successor, or predecessor of such employer--
`(A) to the extent that the amounts withheld and collected are used solely for payments relating to a loan from a plan that satisfies the requirements of section 408(b)(1) of the Employee Retirement Income Security Act of 1974 or is subject to section 72(p) of the Internal Revenue Code of 1986; or
`(B) in the case of a loan from a thrift savings plan described in subchapter III of title 5, that satisfies the requirements of section 8433(g) of such title;'; and
(4) by adding at the end of the flush material at the end of the subsection, the following: `Nothing in paragraph (20) may be construed to provide that any loan made under a governmental plan under section 414(d), or a contract or account under section 403(b), of the Internal Revenue Code of 1986 constitutes a claim or a debt under this title.'.
(c) EXCEPTIONS TO DISCHARGE- Section 523(a) of title 11, United States Code, is amended by adding at the end the following:
`(18) owed to a pension, profit-sharing, stock bonus, or other plan established under section 401, 403, 408, 408A, 414, 457, or 501(c) of the Internal Revenue Code of 1986, pursuant to--
`(A) a loan permitted under section 408(b)(1) of the Employee Retirement Income Security Act of 1974, or subject to section 72(p) of the Internal Revenue Code of 1986; or
`(B) a loan from the thrift savings plan described in subchapter III of title 5, that satisfies the requirements of section 8433(g) of such title.
Nothing in paragraph (19) may be construed to provide that any loan made under a governmental plan under section 414(d), or a contract or account under section 403(b), of the Internal Revenue Code of 1986 constitutes a claim or a debt under this title.'
(d) PLAN CONTENTS- Section 1322 of title 11, United States Code, is amended by adding at the end the following:
`(f) A plan may not materially alter the terms of a loan described in section 362(b)(20).'.
SEC. 225. PROTECTION OF EDUCATION SAVINGS.
(a) EXCLUSIONS- Section 541 of title 11, United States Code, as amended by section 903, is amended--
(A) by redesignating paragraph (6) as paragraph (8); and
(B) by inserting after paragraph (5) the following:
`(6) funds placed in an education individual retirement account (as defined in section 530(b)(1) of the Internal Revenue Code of 1986) not later than 365 days before the date of filing of the petition, but--
`(A) only if the designated beneficiary of such account was a son, daughter, stepson, stepdaughter, grandchild, or step-grandchild of the debtor for the taxable year for which funds were placed in such account;
`(B) only to the extent that such funds--
`(i) are not pledged or promised to any entity in connection with any extension of credit; and
`(ii) are not excess contributions (as described in section 4973(e) of the Internal Revenue Code of 1986); and
`(C) in the case of funds placed in all such accounts having the same designated beneficiary not earlier than 720 days nor later than 365 days before such date, only so much of such funds as does not exceed $5,000;
`(7) funds used to purchase a tuition credit or certificate or contributed to an account in accordance with section 529(b)(1)(A) of the Internal Revenue Code of 1986 under a qualified State tuition program (as defined in section 529(b)(1) of such Code) not later than 365 days before the date of filing of the petition, but--
`(A) only if the designated beneficiary of the amounts paid or contributed to such tuition program was a son, daughter, stepson, stepdaughter, grandchild, or step-grandchild of the debtor for the taxable year for which funds were paid or contributed;
`(B) with respect to the aggregate amount paid or contributed to such program having the same designated beneficiary, only so much of such amount as does not exceed the total contributions permitted under section 529(b)(7) of such Code with respect to such beneficiary, as adjusted beginning on the date of the filing of the petition by the annual increase or decrease (rounded to the nearest tenth of 1 percent) in the education expenditure category of the Consumer Price Index prepared by the Department of Labor; and
`(C) in the case of funds paid or contributed to such program having the same designated beneficiary not earlier than 720 days nor later than 365 days before such date, only so much of such funds as does not exceed $5,000; or'; and
(2) by adding at the end the following:
`(g) In determining whether any of the relationships specified in paragraph (6)(A) or (7)(A) of subsection (b) exists, a legally adopted child of an individual (and a child who is a member of an individual's household, if placed with such individual by an authorized placement agency for legal adoption by such individual), or a foster child of an individual (if such child has as the child's principal place of abode the home of the debtor and is a member of the debtor's household) shall be treated as a child of such individual by blood.'.
(b) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, as amended by sections 105(d), 304(c)(1), 305(2), 315(b), and 316 of this Act, is amended by adding at the end the following:
`(k) In addition to meeting the requirements under subsection (a), a debtor shall file with the court a record of any interest that a debtor has in an education individual retirement account (as defined in section 530(b)(1) of the Internal Revenue Code of 1986) or under a qualified State tuition program (as defined in section 529(b)(1) of such Code).'.
TITLE III--DISCOURAGING BANKRUPTCY ABUSE
SEC. 301. REINFORCEMENT OF THE FRESH START.
Section 523(a)(17) of title 11, United States Code, is amended--
(1) by striking `by a court' and inserting `on a prisoner by any court',
(2) by striking `section 1915(b) or (f)' and inserting `subsection (b) or (f)(2) of section 1915', and
(3) by inserting `(or a similar non-Federal law)' after `title 28' each place it appears.
SEC. 302. DISCOURAGING BAD FAITH REPEAT FILINGS.
Section 362(c) of title 11, United States Code, is amended--
(1) in paragraph (1), by striking `and' at the end;
(2) in paragraph (2), by striking the period at the end and inserting a semicolon; and
(3) by adding at the end the following:
`(3) if a single or joint case is filed by or against an individual debtor under chapter 7, 11, or 13, and if a single or joint case of the debtor was pending within the preceding 1-year period but was dismissed, other than a case refiled under a chapter other than chapter 7 after dismissal under section 707(b)--
`(A) the stay under subsection (a) with respect to any action taken with respect to a debt or property securing such debt or with respect to any lease will terminate with respect to the debtor on the 30th day after the filing of the later case;
`(B) upon motion by a party in interest for continuation of the automatic stay and upon notice and a hearing, the court may extend the stay in particular cases as to any or all creditors (subject to such conditions or limitations as the court may then impose) after notice and a hearing completed before the expiration of the 30-day period only if the party in interest demonstrates that the filing of the later case is in good faith as to the creditors to be stayed; and
`(C) for purposes of subparagraph (B), a case is presumptively filed not in good faith (but such presumption may be rebutted by clear and convincing evidence to the contrary)--
`(i) as to all creditors, if--
`(I) more than 1 previous case under any of chapter 7, 11, or 13 in which the individual was a debtor was pending within the preceding 1-year period;
`(II) a previous case under any of chapter 7, 11, or 13 in which the individual was a debtor was dismissed within such 1-year period, after the debtor failed to--
`(aa) file or amend the petition or other documents as required by this title or the court without substantial excuse (but mere inadvertence or negligence shall not be a substantial excuse unless the dismissal was caused by the negligence of the debtor's attorney);
`(bb) provide adequate protection as ordered by the court; or
`(cc) perform the terms of a plan confirmed by the court; or
`(III) there has not been a substantial change in the financial or personal affairs of the debtor since the dismissal of the next most previous case under chapter 7, 11, or 13 or any other reason to conclude that the later case will be concluded--
`(aa) if a case under chapter 7, with a discharge; or
`(bb) if a case under chapter 11 or 13, with a confirmed plan which will be fully performed; and
`(ii) as to any creditor that commenced an action under subsection (d) in a previous case in which the individual was a debtor if, as of the date of dismissal of such case, that action was still pending or had been resolved by terminating, conditioning, or limiting the stay as to actions of such creditor; and
`(4)(A)(i) if a single or joint case is filed by or against an individual debtor under this title, and if 2 or more single or joint cases of the debtor were pending within the previous year but were dismissed, other than a case refiled under section 707(b), the stay under subsection (a) shall not go into effect upon the filing of the later case; and
`(ii) on request of a party in interest, the court shall promptly enter an order confirming that no stay is in effect;
`(B) if, within 30 days after the filing of the later case, a party in interest requests the court may order the stay to take effect in the case as to any or all creditors (subject to such conditions or limitations as the court may impose), after notice and hearing, only if the party in interest demonstrates that the filing of the later case is in good faith as to the creditors to be stayed;
`(C) a stay imposed under subparagraph (B) shall be effective on the date of entry of the order allowing the stay to go into effect; and
`(D) for purposes of subparagraph (B), a case is presumptively not filed in good faith (but such presumption may be rebutted by clear and convincing evidence to the contrary)--
`(i) as to all creditors if--
`(I) 2 or more previous cases under this title in which the individual was a debtor were pending within the 1-year period;
`(II) a previous case under this title in which the individual was a debtor was dismissed within the time period stated in this paragraph after the debtor failed to file or amend the petition or other documents as required by this title or the court without substantial excuse (but mere inadvertence or negligence shall not be substantial excuse unless the dismissal was caused by the negligence of the debtor's attorney), failed to pay adequate protection as ordered by the court, or failed to perform the terms of a plan confirmed by the court; or
`(III) there has not been a substantial change in the financial or personal affairs of the debtor since the dismissal of the next most previous case under this title, or any other reason to conclude that the later case will not be concluded, if a case under chapter 7, with a discharge, and if a case under chapter 11 or 13, with a confirmed plan that will be fully performed; or
`(ii) as to any creditor that commenced an action under subsection (d) in a previous case in which the individual was a debtor if, as of the date of dismissal of such case, such action was still pending or had been resolved by terminating, conditioning, or limiting the stay as to action of such creditor.'.
SEC. 303. CURBING ABUSIVE FILINGS.
(a) IN GENERAL- Section 362(d) of title 11, United States Code, is amended--
(1) in paragraph (2), by striking `or' at the end;
(2) in paragraph (3), by striking the period at the end and inserting `; or'; and
(3) by adding at the end the following:
`(4) with respect to a stay of an act against real property under subsection (a), by a creditor whose claim is secured by an interest in such real estate, if the court finds that the filing of the bankruptcy petition was part of a scheme to delay, hinder, and defraud creditors that involved either--
`(A) transfer of all or part ownership of, or other interest in, the real property without the consent of the secured creditor or court approval; or
`(B) multiple bankruptcy filings affecting the real property.
If recorded in compliance with applicable State laws governing notices of interests or liens in real property, an order entered under this subsection shall be binding in any other case under this title purporting to affect the real property filed not later than 2 years after that recording, except that a debtor in a subsequent case may move for relief from such order based upon changed circumstances or for good cause shown, after notice and a hearing.'.
(b) AUTOMATIC STAY- Section 362(b) of title 11, United States Code, as amended by section 224 of this Act, is amended--
(1) in paragraph (19), by striking `or' at the end;
(2) in paragraph (20), by striking the period at the end; and
(3) by inserting after paragraph (20) the following:
`(21) under subsection (a), of any act to enforce any lien against or security interest in real property following the entry of an order under section 362(d)(4) as to that property in any prior bankruptcy case for a period of 2 years after entry of such an order, except that the debtor, in a subsequent case, may move the court for relief from such order based upon changed circumstances or for other good cause shown, after notice and a hearing; or
`(22) under subsection (a), of any act to enforce any lien against or security interest in real property--
`(A) if the debtor is ineligible under section 109(g) to be a debtor in a bankruptcy case; or
`(B) if the bankruptcy case was filed in violation of a bankruptcy court order in a prior bankruptcy case prohibiting the debtor from being a debtor in another bankruptcy case.'.
(c) MODIFICATION OF A RESTRICTION RELATING TO WAIVERS- Section 522(e) of title 11, United States Code, is amended--
(1) in the first sentence, by striking `subsection (b) of this section' and inserting `subsection (b), other than under paragraph (3)(C) of that subsection'; and
(2) in the second sentence--
(A) by inserting `(other than property described in subsection (b)(3)(C))' after `property' each place it appears; and
(B) by inserting `(other than a transfer of property described in subsection (b)(3)(C))' after `transfer' each place it appears.
SEC. 304. DEBTOR RETENTION OF PERSONAL PROPERTY SECURITY.
Title 11, United States Code, is amended--
(1) in section 521(a), as so redesignated by section 106(d) of this Act--
(A) in paragraph (4), by striking `and' at the end;
(B) in paragraph (5), by striking the period at the end and inserting `; and'; and
(C) by adding at the end the following:
`(6) in an individual case under chapter 7, not retain possession of personal property as to which a creditor has an allowed claim for the purchase price secured in whole or in part by an interest in that personal property unless, in the case of an individual debtor, the debtor within 45 days after the first meeting of creditors under section 341(a)--
`(A) enters into an agreement with the creditor under section 524(c) with respect to the claim secured by such property; or
`(B) redeems such property from the security interest under section 722.'; and
(D) by adding at the end the following:
`(c) For purposes of subsection (a)(6), if the debtor fails to so act within the 45-day period specified in subsection (a)(6), the personal property affected shall no longer be property of the estate, and the creditor may take whatever action as to such property as is permitted by applicable nonbankruptcy law, unless the court determines on the motion of the trustee, and after notice and a hearing, that such property is of consequential value or benefit to the estate.'; and
(2) in section 722, by inserting `in full at the time of redemption' before the period at the end.
SEC. 305. RELIEF FROM THE AUTOMATIC STAY WHEN THE DEBTOR DOES NOT COMPLETE INTENDED SURRENDER OF CONSUMER DEBT COLLATERAL.
Title 11, United States Code, is amended--
(A) in subsection (c), by striking `(e), and (f)' and inserting `(e), (f), and (h)'; and
(B) by redesignating subsection (h), as amended by section 227 of this Act, as subsection (j) and by inserting after subsection (g) the following:
`(h)(1) Subject to paragraph (2), in an individual case under chapter 7, 11, or 13 the stay provided by subsection (a) is terminated with respect to property of the estate securing in whole or in part a claim, or subject to an unexpired lease, if the debtor fails within the applicable period of time set by section 521(a)(2) to--
`(A) file timely any statement of intention required under section 521(a)(2) with respect to that property or to indicate therein that the debtor--
`(i) will either surrender the property or retain the property; and
`(ii) if retaining the property, will, as applicable--
`(I) redeem the property under section 722;
`(II) reaffirm the debt the property secures under section 524(c); or
`(III) assume the unexpired lease under section 365(p) if the trustee does not do so; or
`(B) take timely the action specified in that statement of intention, as the statement may be amended before expiration of the period for taking action, unless the statement of intention specifies reaffirmation and the creditor refuses to reaffirm on the original contract terms.
`(2) Paragraph (1) shall not apply if the court determines on the motion of the trustee, and after notice and a hearing, that such property is of consequential value or benefit to the estate.'; and
(2) in section 521, as amended by section 304 of this Act--
(A) in subsection (a)(2), as redesignated by section 106(d) of this Act--
(i) by striking `consumer';
(ii) in subparagraph (B)--
(I) by striking `forty-five days after the filing of a notice of intent under this section' and inserting `30 days after the first date set for the meeting of creditors under section 341(a)'; and
(II) by striking `forty-five day period' and inserting `30-day period'; and
(iii) in subparagraph (C), by inserting `except as provided in section 362(h)' before the semicolon; and
(B) by adding at the end the following:
`(d) If the debtor fails timely to take the action specified in subsection (a)(6), or in paragraph (1) or (2) of section 362(h), with respect to property which a lessor or bailor owns and has leased, rented, or bailed to the debtor or as to which a creditor holds a security interest not otherwise voidable under section 522(f), 544, 545, 547, 548, or 549, nothing in this title shall prevent or limit the operation of a provision in the underlying lease or agreement that has the effect of placing the debtor in default under that lease or agreement by reason of the occurrence, pendency, or existence of a proceeding under this title or the insolvency of the debtor. Nothing in this subsection shall be deemed to justify limiting such a provision in any other circumstance.'.
SEC. 306. GIVING SECURED CREDITORS FAIR TREATMENT IN CHAPTER 13.
(a) IN GENERAL- Section 1325(a)(5)(B)(i) of title 11, United States Code, is amended to read as follows:
`(i) the plan provides that--
`(I) the holder of such claim retain the lien securing such claim until the earlier of--
`(aa) the payment of the underlying debt determined under nonbankruptcy law; or
`(bb) discharge under section 1328; and
`(II) if the case under this chapter is dismissed or converted without completion of the plan, such lien shall also be retained by such holder to the extent recognized by applicable nonbankruptcy law; and'.
(b) RESTORING THE FOUNDATION FOR SECURED CREDIT- Section 1325(a) of title 11, United States Code, is amended by adding at the end the following flush sentence:
`For purposes of paragraph (5), section 506 shall not apply to a claim described in that paragraph if the debt that is the subject of the claim was incurred within the 5-year period preceding the filing of the petition and the collateral for that debt consists of a motor vehicle (as defined in section 30102 of title 49) acquired for the personal use of the debtor, or if collateral for that debt consists of any other thing of value, if the debt was incurred during the 6-month period preceding that filing.'.
(c) DEFINITIONS- Section 101 of title 11, United States Code, as amended by section 211 of this Act, is amended--
(1) by inserting after paragraph (13) the following:
`(13A) `debtor's principal residence'--
`(A) means a residential structure, including incidental property, without regard to whether that structure is attached to real property; and
`(B) includes an individual condominium or cooperative unit;'; and
(2) by inserting after paragraph (27), the following:
`(27A) `incidental property' means, with respect to a debtor's principal residence--
`(A) property commonly conveyed with a principal residence in the area where the real estate is located;
`(B) all easements, rights, appurtenances, fixtures, rents, royalties, mineral rights, oil or gas rights or profits, water rights, escrow funds, or insurance proceeds; and
`(C) all replacements or additions;'.
SEC. 307. EXEMPTIONS.
Section 522(b)(3)(A) of title 11, United States Code, as so designated by section 224 of this Act, is amended--
(1) by striking `180' and inserting `730'; and
(2) by striking `, or for a longer portion of such 180-day period than in any other place'.
SEC. 308. RESIDENCY REQUIREMENT FOR HOMESTEAD EXEMPTION.
Section 522 of title 11, United States Code, as amended by section 307 of this Act, is amended--
(1) in subsection (b)(3)(A), by inserting `subject to subsection (n),' before `any property'; and
(2) by adding at the end the following:
`(n) For purposes of subsection (b)(3)(A), and notwithstanding subsection (a), the value of an interest in--
`(1) real or personal property that the debtor or a dependent of the debtor uses as a residence;
`(2) a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence; or
`(3) a burial plot for the debtor or a dependent of the debtor;
shall be reduced to the extent such value is attributable to any portion of any property that the debtor disposed of in the 730-day period ending on the date of the filing of the petition, with the intent to hinder, delay, or defraud a creditor and that the debtor could not exempt, or that portion that the debtor could not exempt, under subsection (b) if on such date the debtor had held the property so disposed of.'.
SEC. 309. PROTECTING SECURED CREDITORS IN CHAPTER 13 CASES.
(a) STOPPING ABUSIVE CONVERSIONS FROM CHAPTER 13- Section 348(f)(1) of title 11, United States Code, is amended--
(1) in subparagraph (A), by striking `and' at the end;
(2) in subparagraph (B)--
(A) by striking `in the converted case, with allowed secured claims' and inserting `only in a case converted to chapter 11 or 12 but not in a case converted to chapter 7, with allowed secured claims in cases under chapters 11 and 12'; and
(B) by striking the period and inserting `; and'; and
(3) by adding at the end the following:
`(C) with respect to cases converted from chapter 13--
`(i) the claim of any creditor holding security as of the date of the petition shall continue to be secured by that security unless the full amount of such claim determined under applicable nonbankruptcy law has been paid in full as of the date of conversion, notwithstanding any valuation or determination of the amount of an allowed secured claim made for the purposes of the chapter 13 proceeding; and
`(ii) unless a prebankruptcy default has been fully cured under the plan at the time of conversion, in any proceeding under this title or otherwise, the default shall have the effect given under applicable nonbankruptcy law.'.
(b) GIVING DEBTORS THE ABILITY TO KEEP LEASED PERSONAL PROPERTY BY ASSUMPTION- Section 365 of title 11, United States Code, is amended by adding at the end the following:
`(p)(1) If a lease of personal property is rejected or not timely assumed by the trustee under subsection (d), the leased property is no longer property of the estate and the stay under section 362(a) is automatically terminated.
`(2)(A) In the case of an individual under chapter 7, the debtor may notify the creditor in writing that the debtor desires to assume the lease. Upon being so notified, the creditor may, at its option, notify the debtor that it is willing to have the lease assumed by the debtor and may condition such assumption on cure of any outstanding default on terms set by the contract.
`(B) If within 30 days after notice is provided under subparagraph (A), the debtor notifies the lessor in writing that the lease is assumed, the liability under the lease will be assumed by the debtor and not by the estate.
`(C) The stay under section 362 and the injunction under section 524(a)(2) shall not be violated by notification of the debtor and negotiation of cure under this subsection.
`(3) In a case under chapter 11 in which the debtor is an individual and in a case under chapter 13, if the debtor is the lessee with respect to personal property and the lease is not assumed in the plan confirmed by the court, the lease is deemed rejected as of the conclusion of the hearing on confirmation. If the lease is rejected, the stay under section 362 and any stay under section 1301 is automatically terminated with respect to the property subject to the lease.'.
(c) ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY SECURED CREDITORS-
(1) CONFIRMATION OF PLAN- Section 1325(a)(5)(B) of title 11, United States Code, is amended--
(A) in clause (i), by striking `and' at the end;
(B) in clause (ii), by striking `or' at the end and inserting `and'; and
(C) by adding at the end the following:
`(I) property to be distributed pursuant to this subsection is in the form of periodic payments, such payments shall be in equal monthly amounts; and
`(II) the holder of the claim is secured by personal property the amount of such payments shall not be less than an amount sufficient to provide to the holder of such claim adequate protection during the period of the plan; or'.
(2) PAYMENTS- Section 1326(a) of title 11, United States Code, is amended to read as follows:
`(a)(1) Unless the court orders otherwise, the debtor shall--
`(A) commence making the payments proposed by a plan within 30 days after the plan is filed; or
`(B) if no plan is filed then as specified in the proof of claim, within 30 days after the order for relief or within 15 days after the plan is filed, whichever is earlier.
`(2) A payment made under this section shall be retained by the trustee until confirmation, denial of confirmation, or paid by the trustee as adequate protection payments in accordance with paragraph (3). If a plan is confirmed, the trustee shall distribute any such payment in accordance with the plan as soon as is practicable. If a plan is not confirmed, the trustee shall return any such payments not previously paid and not yet due and owing to creditors pursuant to paragraph (3) to the debtor, after deducting any unpaid claim allowed under section 503(b).
`(3)(A) As soon as is practicable, and not later than 40 days after the filing of the case, the trustee shall--
`(i) pay from payments made under this section the adequate protection payments proposed in the plan; or
`(ii) if no plan is filed then, according to the terms of the proof of claim.
`(B) The court may, upon notice and a hearing, modify, increase, or reduce the payments required under this paragraph pending confirmation of a plan.'.
SEC. 310. LIMITATION ON LUXURY GOODS.
Section 523(a)(2)(C) of title 11, United States Code, is amended to read as follows:
`(C)(i) for purposes of subparagraph (A)--
`(I) consumer debts owed to a single creditor and aggregating more than $250 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
`(II) cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and
`(ii) for purposes of this subparagraph--
`(I) the term `extension of credit under an open end credit plan' means an extension of credit under an open end credit plan, within the meaning of the Consumer Credit Protection Act (15 U.S.C. 1601 et seq.);
`(II) the term `open end credit plan' has the meaning given that term under section 103 of Consumer Credit Protection Act (15 U.S.C. 1602); and
`(III) the term `luxury goods or services' does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.'.
SEC. 311. AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, as amended by section 303(b) of this Act, is amended--
(1) in paragraph (21), by striking `or' at the end;
(2) in paragraph (22), by striking the period at the end and inserting a semicolon; and
(3) by inserting after paragraph (22) the following:
`(23) under subsection (a)(3), of the continuation of any eviction, unlawful detainer action, or similar proceeding by a lessor against a debtor involving residential real property in which the debtor resides as a tenant under a rental agreement;
`(24) under subsection (a)(3), of the commencement of any eviction, unlawful detainer action, or similar proceeding by a lessor against a debtor involving residential real property in which the debtor resides as a tenant under a rental agreement that has terminated under the lease agreement or applicable State law; or
`(25) under subsection (a)(3), of eviction actions based on endangerment to property or person or the use of illegal drugs.'.
SEC. 312. EXTENSION OF PERIOD BETWEEN BANKRUPTCY DISCHARGES.
Title 11, United States Code, is amended--
(1) in section 727(a)(8), by striking `six' and inserting `8'; and
(2) in section 1328, by inserting after subsection (e) the following:
`(f) Notwithstanding subsections (a) and (b), the court shall not grant a discharge of all debts provided for by the plan or disallowed under section 502 if the debtor has received a discharge in any case filed under this title within 5 years before the order for relief under this chapter.'.
SEC. 313. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.
Section 522(f) of title 11, United States Code, is amended by adding at the end the following:
`(4)(A) Subject to subparagraph (B), for purposes of paragraph (1)(B), the term `household goods' means--
`(xi) educational materials and educational equipment primarily for the use of minor dependent children of the debtor, but only 1 personal computer only if used primarily for the education or entertainment of such minor children;
`(xii) medical equipment and supplies;
`(xiii) furniture exclusively for the use of minor children, or elderly or disabled dependents of the debtor; and
`(xiv) personal effects (including wedding rings and the toys and hobby equipment of minor dependent children) of the debtor and the dependents of the debtor.
`(B) The term `household goods' does not include--
`(i) works of art (unless by or of the debtor or the dependents of the debtor);
`(ii) electronic entertainment equipment (except 1 television, 1 radio, and 1 VCR);
`(iii) items acquired as antiques;
`(iv) jewelry (except wedding rings); and
`(v) a computer (except as otherwise provided for in this section), motor vehicle (including a tractor or lawn tractor), boat, or a motorized recreational device, conveyance, vehicle, watercraft, or aircraft.'.
SEC. 314. DEBT INCURRED TO PAY NONDISCHARGEABLE DEBTS.
(a) IN GENERAL- Section 523(a) of title 11, United States Code, is amended by inserting after paragraph (14) the following:
`(14A)(A) incurred to pay a debt that is nondischargeable by reason of section 727, 1141, 1228(a), 1228(b), or 1328(b), or any other provision of this subsection, if the debtor incurred the debt to pay such a nondischargeable debt with the intent to discharge in bankruptcy the newly created debt; except that
`(B) all debts incurred to pay nondischargeable debts shall be presumed to be nondischargeable debts if incurred within 70 days before the filing of the petition (except that, in any case in which there is an allowed claim under section 502 for child support or spousal support entitled to priority under section 507(a)(1) and that was filed in a timely manner, debts that would otherwise be presumed to be nondischargeable debts by reason of this subparagraph shall be treated as dischargeable debts);'.
(b) DISCHARGE UNDER CHAPTER 13- Section 1328(a) of title 11, United States Code, is amended by striking paragraphs (1) through (3) and inserting the following:
`(1) provided for under section 1322(b)(5);
`(2) of the kind specified in paragraph (2), (3), (4), (7), or (8), of section 523(a);
`(3) for restitution, or a criminal fine, included in a sentence on the debtor's conviction of a crime; or
`(4) for restitution, or damages, awarded in a civil action against the debtor as a result of willful or malicious injury by the debtor that caused personal injury to an individual or the death of an individual.'.
SEC. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7 AND 13 CASES.
(a) NOTICE- Section 342 of title 11, United States Code, is amended--
(A) by inserting `(1)' after `(c)'; and
(B) by striking `, but the failure of such notice to contain such information shall not invalidate the legal effect of such notice'; and
(2) by adding at the end the following:
`(d) At any time, a creditor, in a case of an individual debtor under chapter 7 or 13, may file with the court and serve on the debtor a notice of the address to be used to notify the creditor in that case. Five days after receipt of such notice, if the court or the debtor is required to give the creditor notice, such notice shall be given at that address.
`(e) An entity may file with the court a notice stating its address for notice in cases under chapters 7 and 13. After 30 days following the filing of such notice, any notice in any case filed under chapter 7 or 13 given by the court shall be to that address unless specific notice is given under subsection (d) with respect to a particular case.
`(f)(1) Notice given to a creditor other than as provided in this section shall not be effective notice until that notice has been brought to the attention of the creditor. If the creditor designates a person or department to be responsible for receiving notices concerning bankruptcy cases and establishes reasonable procedures so that bankruptcy notices received by the creditor are to be delivered to such department or person, notice shall not be considered to have been brought to the attention of the creditor until received by such person or department.
`(2) No sanction under section 362(h) or any other sanction that a court may impose on account of violations of the stay under section 362(a) or failure to comply with section 542 or 543 may be imposed on any action of the creditor unless the action takes place after the creditor has received notice of the commencement of the case effective under this section.'.
(b) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, as amended by section 305 of this Act, is amended--
(1) in subsection (a), by striking paragraph (1) and inserting the following:
`(A) a list of creditors; and
`(B) unless the court orders otherwise--
`(i) a schedule of assets and liabilities;
`(ii) a schedule of current income and current expenditures;
`(iii) a statement of the debtor's financial affairs and, if applicable, a certificate--
`(I) of an attorney whose name is on the petition as the attorney for the debtor or any bankruptcy petition preparer signing the petition under section 110(b)(1) indicating that such attorney or bankruptcy petition preparer delivered to the debtor any notice required by section 342(b); or
`(II) if no attorney for the debtor is indicated and no bankruptcy petition preparer signed the petition, of the debtor that such notice was obtained and read by the debtor;
`(iv) copies of all payment advices or other evidence of payment, if any, received by the debtor from any employer of the debtor in the period 60 days before the filing of the petition;
`(v) a statement of the amount of projected monthly net income, itemized to show how the amount is calculated; and
`(vi) a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of filing'; and
(2) by adding at the end the following:
`(e)(1) At any time, a creditor, in the case of an individual under chapter 7 or 13, may file with the court notice that the creditor requests the petition, schedules, and a statement of affairs filed by the debtor in the case and the court shall make those documents available to the creditor who request those documents.
`(2)(A) At any time, a creditor in a case under chapter 13 may file with the court notice that the creditor requests the plan filed by the debtor in the case.
`(B) The court shall make such plan available to the creditor who request such plan--
`(i) at a reasonable cost; and
`(ii) not later than 5 days after such request.
`(f) An individual debtor in a case under chapter 7, 11, or 13 shall file with the court at the request of any party in interest--
`(1) at the time filed with the taxing authority, all tax returns required under applicable law, including any schedules or attachments, with respect to the period from the commencement of the case until such time as the case is closed;
`(2) at the time filed with the taxing authority, all tax returns required under applicable law, including any schedules or attachments, that were not filed with the taxing authority when the schedules under subsection (a)(1) were filed with respect to the period that is 3 years before the order of relief;
`(3) any amendments to any of the tax returns, including schedules or attachments, described in paragraph (1) or (2); and
`(4) in a case under chapter 13, a statement subject to the penalties of perjury by the debtor of the debtor's income and expenditures in the preceding tax year and monthly income, that shows how the amounts are calculated--
`(A) beginning on the date that is the later of 90 days after the close of the debtor's tax year or 1 year after the order for relief, unless a plan has been confirmed; and
`(B) thereafter, on or before the date that is 45 days before each anniversary of the confirmation of the plan until the case is closed.
`(g)(1) A statement referred to in subsection (f)(4) shall disclose--
`(A) the amount and sources of income of the debtor;
`(B) the identity of any person responsible with the debtor for the support of any dependent of the debtor; and
`(C) the identity of any person who contributed, and the amount contributed, to the household in which the debtor resides.
`(2) The tax returns, amendments, and statement of income and expenditures described in paragraph (1) shall be available to the United States trustee, any bankruptcy administrator, any trustee, and any party in interest for inspection and copying, subject to the requirements of subsection (h).
`(h)(1) Not later than 30 days after the date of enactment of the Bankruptcy Reform Act of 2000, the Director of the Administrative Office of the United States Courts shall establish procedures for safeguarding the confidentiality of any tax information required to be provided under this section.
`(2) The procedures under paragraph (1) shall include restrictions on creditor access to tax information that is required to be provided under this section.
`(3) Not later than 1 year after the date of enactment of the Bankruptcy Reform Act of 2000, the Director of the Administrative Office of the United States Courts shall prepare and submit to Congress a report that--
`(A) assesses the effectiveness of the procedures under paragraph (1); and
`(B) if appropriate, includes proposed legislation to--
`(i) further protect the confidentiality of tax information; and
`(ii) provide penalties for the improper use by any person of the tax information required to be provided under this section.
`(i) If requested by the United States trustee or a trustee serving in the case, the debtor shall provide--
`(1) a document that establishes the identity of the debtor, including a driver's license, passport, or other document that contains a photograph of the debtor; and
`(2) such other personal identifying information relating to the debtor that establishes the identity of the debtor.'.
SEC. 316. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR PROVIDE REQUIRED INFORMATION.
Section 521 of title 11, United States Code, as amended by section 315 of this Act, is amended by adding at the end the following:
`(j)(1) Notwithstanding section 707(a), and subject to paragraph (2), if an individual debtor in a voluntary case under chapter 7 or 13 fails to file all of the information required under subsection (a)(1) within 45 days after the filing of the petition commencing the case, the case shall be automatically dismissed effective on the 46th day after the filing of the petition.
`(2) With respect to a case described in paragraph (1), any party in interest may request the court to enter an order dismissing the case. If requested, the court shall enter an order of dismissal not later than 5 days after such request.
`(3) Upon request of the debtor made within 45 days after the filing of the petition commencing a case described in paragraph (1), the court may allow the debtor an additional period of not to exceed 45 days to file the information required under subsection (a)(1) if the court finds justification for extending the period for the filing.'.
SEC. 317. ADEQUATE TIME TO PREPARE FOR HEARING ON CONFIRMATION OF THE PLAN.
(a) HEARING- Section 1324 of title 11, United States Code, is amended--
(1) by striking `After' and inserting the following:
`(a) Except as provided in subsection (b) and after'; and
(2) by adding at the end the following:
`(b) The hearing on confirmation of the plan may be held not later than 45 days after the meeting of creditors under section 341(a).'.
(b) FILING OF PLAN- Section 1321 of title 11, United States Code, is amended to read as follows:
`Sec. 1321. Filing of plan
`Not later than 90 days after the order for relief under this chapter, the debtor shall file a plan, except that the court may extend such period if the need for an extension is attributable to circumstances for which the debtor should not justly be held accountable.'.
SEC. 318. CHAPTER 13 PLANS TO HAVE A 5-YEAR DURATION IN CERTAIN CASES.
Section 1322(d) of title 11, United States Code, is amended to read as follows:
`(d)(1) Except as provided in paragraph (2), the plan may not provide for payments over a period that is longer than 3 years.
`(2) The plan may provide for payments over a period that is longer than 3 years if--
`(A) the plan is for a case that was converted to a case under this chapter from a case under chapter 7, or the plan is for a debtor who has been dismissed from chapter 7 by reason of section 707(b), in which case the plan shall provide for payments over a period of 5 years; or
`(B) the plan is for a case that is not described in subparagraph (A), and the court, for cause, approves a period longer than 3 years, but not to exceed 5 years.'.
SEC. 319. SENSE OF THE CONGRESS REGARDING EXPANSION OF RULE 9011 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE.
It is the sense of Congress that Rule 9011 of the Federal Rules of Bankruptcy Procedure (11 U.S.C. App.) should be modified to include a requirement that all documents (including schedules), signed and unsigned, submitted to the court or to a trustee by debtors who represent themselves and debtors who are represented by an attorney be submitted only after the debtor or the debtor's attorney has made reasonable inquiry to verify that the information contained in such documents is--
(1) well grounded in fact; and
(2) warranted by existing law or a good-faith argument for the extension, modification, or reversal of existing law.
SEC. 320. PROMPT RELIEF FROM STAY IN INDIVIDUAL CASES.
Section 362(e) of title 11, United States Code, is amended--
(1) by inserting `(1)' after `(e)'; and
(2) by adding at the end the following:
`(2) Notwithstanding paragraph (1), in the case of an individual filing under chapter 7, 11, or 13, the stay under subsection (a) shall terminate on the date that is 60 days after a request is made by a party in interest under subsection (d), unless--
`(A) a final decision is rendered by the court during the 60-day period beginning on the date of the request; or
`(B) that 60-day period is extended--
`(i) by agreement of all parties in interest; or
`(ii) by the court for such specific period of time as the court finds is required for good cause, as described in findings made by the court.'.
SEC. 321. CHAPTER 11 CASES FILED BY INDIVIDUALS.
(a) PROPERTY OF THE ESTATE-
(1) IN GENERAL- Subchapter I of chapter 11 of title 11, United States Code, is amended by adding at the end the following:
`Sec. 1115. Property of the estate
`In a case concerning an individual, property of the estate includes, in addition to the property specified in section 541--
`(1) all property of the kind specified in section 541 that the debtor acquires after the commencement of the case but before the case is closed, dismissed, or converted to a case under chapter 7, 12, or 13, whichever occurs first; and
`(2) earnings from services performed by the debtor after the commencement of the case but before the case is closed, dismissed, or converted to a case under chapter 7, 12, or 13, whichever occurs first.'.
(2) CLERICAL AMENDMENT- The table of sections for chapter 11 of title 11, United States Code, is amended by adding at the end of the matter relating to subchapter I the following:
`1115. Property of the estate.'.
(b) CONTENTS OF PLAN- Section 1123(a) of title 11, United States Code, is amended--
(1) in paragraph (6), by striking `and' at the end;
(2) in paragraph (7), by striking the period and inserting `; and'; and
(3) by adding at the end the following:
`(8) in a case concerning an individual, provide for the payment to creditors through the plan of all or such portion of earnings from personal services performed by the debtor after the commencement of the case or other future income of the debtor as is necessary for the execution of the plan.'.
(c) CONFIRMATION OF PLAN-
(1) REQUIREMENTS RELATING TO VALUE OF PROPERTY- Section 1129(a) of title 11, United States Code, is amended by adding at the end the following:
`(14) In a case concerning an individual in which the holder of an allowed unsecured claim objects to the confirmation of the plan--
`(A) the value of the property to be distributed under the plan on account of such claim is, as of the effective date of the plan, not less than the amount of such claim; or
`(B) the value of the property to be distributed under the plan is not less than the debtor's projected disposable income (as that term is defined in section 1325(b)(2)) to be received during the 3-year period beginning on the date that the first payment is due under the plan, or during the term of the plan, whichever is longer.'.
(2) REQUIREMENT RELATING TO INTERESTS IN PROPERTY- Section 1129(b)(2)(B)(ii) of title 11, United States Code, is amended by inserting before the period at the end the following: `, except that in a case concerning an individual, the debtor may retain property included in the estate under section 1115, subject to the requirements of subsection (a)(14)'.
(d) EFFECT OF CONFIRMATION--Section 1141(d) of title 11, United States Code, is amended--
(1) in paragraph (2), by striking `The confirmation of a plan does not discharge an individual debtor' and inserting `A discharge under this chapter does not discharge a debtor'; and
(2) by adding at the end the following:
`(5) In a case concerning an individual--
`(A) except as otherwise ordered for cause shown, the discharge is not effective until completion of all payment under the plan; and
`(B) at any time after the confirmation of the plan and after notice and a hearing, the court may grant a discharge to a debtor that has not completed payments under the plan only if--
`(i) for each allowed unsecured claim, the value as of the effective date of the plan, of property actually distributed under the plan on account of that claim is not less than the amount that would have been paid on such claim if the estate of the debtor had been liquidated under chapter 7 of this title on such date; and
`(ii) modification of the plan under 1127 of this title is not practicable.'.
(e) MODIFICATION OF PLAN- Section 1127 of title 11, United States Code, is amended by adding at the end the following:
`(e) In a case concerning an individual, the plan may be modified at any time after confirmation of the plan but before the completion of payments under the plan, whether or not the plan has been substantially consummated, upon request of the debtor, the trustee, the United States trustee, or the holder of an allowed unsecured claim, to--
`(1) increase or reduce the amount of payments on claims of a particular class provided for by the plan;
`(2) extend or reduce the time period for such payments; or
`(3) alter the amount of the distribution to a creditor whose claim is provided for by the plan to the extent necessary to take account of any payment of such claim made other than under the plan.
`(f)(1) Sections 1121 through 1128 of this title and the requirements of section 1129 of this title apply to any modification under subsection (a).
`(2) The plan, as modified, shall become the plan only after there has been disclosure under section 1125, as the court may direct, notice and a hearing, and such modification is approved.'.
SEC. 322. EXCLUDING EMPLOYEE BENEFIT PLAN PARTICIPANT CONTRIBUTIONS AND OTHER PROPERTY FROM THE ESTATE.
(a) IN GENERAL- Section 541(b) of title 11, United States Code, as amended by section 903 of this Act, is amended--
(1) by striking `or' at the end of paragraph (5);
(2) by redesignating paragraph (6) as paragraph (7); and
(3) by inserting after paragraph (5) the following:
`(A) withheld by an employer from the wages of employees for payment as contributions to--
`(i) an employee benefit plan subject to title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.); or
`(ii) a health insurance plan regulated by State law whether or not subject to such title; or
`(B) received by the employer from employees for payment as contributions to--
`(i) an employee benefit plan subject to title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.); or
`(ii) a health insurance plan regulated by State law whether or not subject to such title;'.
(b) APPLICATION OF AMENDMENT- The amendment made by this section shall not apply to cases commenced under title 11, United States Code, before the expiration of the 180-day period beginning on the date of the enactment of this Act.
SEC. 323. CLARIFICATION OF POSTPETITION WAGES AND BENEFITS.
Section 503(b)(1)(A) of title 11, United States Code, is amended to read as follows:
`(A) the actual, necessary costs and expenses of preserving the estate, including wages, salaries, or commissions for services rendered after the commencement of the case, and wages and benefits awarded as back pay attributable to any period of time after commencement of the case as a result of the debtor's violation of Federal or State law, without regard to when the original unlawful act occurred or to whether any services were rendered;'.
SEC. 324. LIMITATION.
(a) EXEMPTIONS- Section 522 of title 11, United States Code, as amended by sections 224 and 307 of this Act, is amended--
(1) in subsection (b)(3)(A), by inserting `subject to subsection (n),' before `any property'; and
(2) by adding at the end the following:
`(n)(1) Except as provided in paragraph (2), as a result of electing under subsection (b)(3)(A) to exempt property under State or local law, a debtor may not exempt any amount of interest that exceeds in the aggregate $100,000 in value in--
`(A) real or personal property that the debtor or a dependent of the debtor uses as a residence;
`(B) a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence; or
`(C) a burial plot for the debtor or a dependent of the debtor.
`(2) The limitation under paragraph (1) shall not apply to an exemption claimed under subsection (b)(3)(A) by a family farmer for the principal residence of that farmer.'.
(b) ADJUSTMENT OF DOLLAR AMOUNTS- Section 104(b) of title 11, United States Code, is amended--
(1) in paragraph (1), by striking `522(d),' and inserting `522 (d) or (n),'; and
(2) in paragraph (3), by striking `522(d),' and inserting `522 (d) or (n),'.
SEC. 325. EXCLUSIVE JURISDICTION IN MATTERS INVOLVING BANKRUPTCY PROFESSIONALS.
Section 1334 of title 28, United States Code, is amended--
(1) in subsection (b) by striking `Notwithstanding' and inserting `Except as provided in subsection (e)(2), and notwithstanding'; and
(2) amending subsection (e) to read as follows:
`(e) The district court in which a case under title 11 is commenced or is pending shall have exclusive jurisdiction--
`(1) of all the property, wherever located, of the debtor as of the commencement of such case, and of property of the estate; and
`(2) over all claims or causes of action that involve construction of section 327 of title 11, United States Code, or rules relating to disclosure requirements under section 327.'.
SEC. 326. UNITED STATES TRUSTEE PROGRAM FILING FEE INCREASE.
(a) ACTIONS UNDER CHAPTER 7 OR 13 OF TITLE 11, UNITED STATES CODE- Section 1930(a) of title 28, United States Code, is amended by striking paragraph (1) and inserting the following:
`(1) For a case commenced--
`(A) under chapter 7 of title 11, $160; or
`(B) under chapter 13 of title 11, $150.'.
(b) UNITED STATES TRUSTEE SYSTEM FUND- Section 589a(b) of title 28, United States Code, is amended--
(1) by striking paragraph (1) and inserting the following:
`(1)(A) 40.63 percent of the fees collected under section 1930(a)(1)(A) of this title in cases commenced under chapter 7 of title 11; and
`(B) 70.00 percent of the fees collected under section 1930(a)(1)(B) of this title in cases commenced under chapter 13 of title 11;';
(2) in paragraph (2) by striking `one-half' and inserting `three-fourths'; and
(3) in paragraph (4) by striking `one-half' and inserting `100 percent'.
(c) COLLECTION AND DEPOSIT OF MISCELLANEOUS BANKRUPTCY FEES- Section 406(b) of the Judiciary Appropriations Act, 1990 (28 U.S.C. 1931 note) is amended by striking `pursuant to 28 U.S.C. section 1930(b) and 30.76 per centum of the fees hereafter collected under 28 U.S.C. section 1930(a)(1) and 25 percent of the fees hereafter collected under 28 U.S.C. section 1930(a)(3) shall be deposited as offsetting receipts to the fund established under 28 U.S.C. section 1931' and inserting `under section 1930(b) of title 28, United States Code, and 31.25 percent of the fees collected under section 1930(a)(1)(A) of that title, 30.00 percent of the fees collected under section 1930(a)(1)(B) of that title, and 25 percent of the fees collected under section 1930(a)(3) of that title shall be deposited as offsetting receipts to the fund established under section 1931 of that title'.
SEC. 327. COMPENSATION OF TRUSTEES IN CERTAIN CASES UNDER CHAPTER 7 OF TITLE 11, UNITED STATES CODE.
Section 326 of title 11, United States Code, is amended by adding at the end the following:
`(e) In a case that has been converted under section 706, or after a case has been converted or dismissed under section 707 or the debtor has been denied a discharge under section 727--
`(1) the court may allow reasonable compensation under section 330 for the trustee's services rendered, payable after the trustee renders services; and
`(2) any allowance made by a court under paragraph (1) shall not be subject to the limitations under subsection (a).'.
SEC. 328. NONDISCHARGEABILITY OF DEBTS INCURRED THROUGH THE COMMISSION OF VIOLENCE AT CLINICS.
Section 523(a) of title 11, United States Code, as amended by section 224 of this Act, is amended--
(1) in paragraph (18), by striking `or' at the end;
(2) in paragraph (19)(B), by striking the period and inserting `; or'; and
(3) by adding at the end the following:
`(20) that results from any judgment, order, consent order, or decree entered in any Federal or State court, or contained in any settlement agreement entered into by the debtor, including any damages, fine, penalty, citation, or attorney fee or cost owed by the debtor, arising from--
`(A) an actual or potential action under section 248 of title 18;
`(B) an actual or potential action under any Federal, State, or local law, the purpose of which is to protect--
`(i) access to a health care facility, including a facility providing reproductive health services, as defined in section 248(e) of title 18 (referred to in this paragraph as a `health care facility'); or
`(ii) the provision of health services, including reproductive health services (referred to in this paragraph as `health services');
`(C) an actual or potential action alleging the violation of any Federal, State, or local statutory or common law, including chapter 96 of title 18 and the Federal civil rights laws (including sections 1977 through 1980 of the Revised Statutes) that results from the debtor's actual, attempted, or alleged--
`(i) harassment of, intimidation of, interference with, obstruction of, injury to, threat to, or violence against any person--
`(I) because that person provides or has provided health services;
`(II) because that person is or has been obtaining health services; or
`(III) to deter that person, any other person, or a class of persons from obtaining or providing health services; or
`(ii) damage or destruction of property of a health care facility; or
`(D) an actual or alleged violation of a court order or injunction that protects access to a health care facility or the provision of health services.'.
TITLE IV--GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A--General Business Bankruptcy Provisions
SEC. 401. ROLLING STOCK EQUIPMENT.
(a) IN GENERAL- 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, and to enforce any of its other rights or remedies under such security agreement, lease, or conditional sale contract, to sell, lease, or otherwise retain or dispose of such equipment, is not limited or otherwise affected by any other provision of this title or by any power of the court, except that the right to take possession and enforce those other rights and remedies shall be subject to section 362, if--
`(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 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 that--
`(i) 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;
`(ii) occurs or becomes an event of default after the date of commencement of the case and before the expiration of such 60-day period is cured before the later of--
`(I) the date that is 30 days after the date of the default or event of the default; or
`(II) the expiration of such 60-day period; and
`(iii) occurs on or after the expiration of such 60-day period is cured in accordance with the terms of such security agreement, lease, or conditional sale contract, if cure is permitted under that agreement, lease, or conditional sale contract.
`(2) The equipment described in this paragraph--
`(A) is rolling stock equipment or accessories used on rolling stock equipment, including superstructures or racks, that is subject to a security interest granted by, leased to, or conditionally sold to a debtor; and
`(B) includes all records and documents relating to such equipment that are required, under the terms of the security agreement, lease, or conditional sale contract, to be surrendered or returned by the debtor in connection with the surrender or return of such equipment.
`(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)(1) In any case under this chapter, the trustee shall immediately surrender and return to a secured party, lessor, or conditional vendor, described in subsection (a)(1), equipment described in subsection (a)(2), if at any time after the date of commencement of the case under this chapter such secured party, lessor, or conditional vendor is entitled under subsection (a)(1) to take possession of such equipment and makes a written demand for such possession of the trustee.
`(2) At such time as the trustee is required under paragraph (1) to surrender and return equipment described in subsection (a)(2), any lease of such equipment, and any security agreement or conditional sale contract relating to such equipment, if such security agreement or conditional sale contract is an executory contract, shall be deemed rejected.
`(d) With respect to equipment first placed in service on or before October 22, 1994, 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.
`(e) With respect to equipment first placed in service after October 22, 1994, for purposes of this section, the term `rolling stock equipment' includes rolling stock equipment that is substantially rebuilt and accessories used on such equipment.'.
(b) AIRCRAFT EQUIPMENT AND VESSELS- Section 1110 of title 11, United States Code, is amended to read as follows:
`Sec. 1110. Aircraft equipment and vessels
`(a)(1) Except as provided in paragraph (2) and subject to subsection (b), the right of a secured party with a security interest in equipment described in paragraph (3), 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, and to enforce any of its other rights or remedies, under such security agreement, lease, or conditional sale contract, to sell, lease, or otherwise retain or dispose of such equipment, is not limited or otherwise affected by any other provision of this title or by any power of the court.
`(2) The right to take possession and to enforce the other rights and remedies described in paragraph (1) shall be subject to section 362 if--
`(A) before the date that is 60 days after the date of the order for relief under this chapter, the trustee, subject to the approval of the court, agrees to perform all obligations of the debtor 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 that occurs--
`(i) before the date of the order is cured before the expiration of such 60-day period;
`(ii) after the date of the order and before the expiration of such 60-day period 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; and
`(iii) on or after the expiration of such 60-day period is cured in compliance with the terms of such security agreement, lease, or conditional sale contract, if a cure is permitted under that agreement, lease, or contract.
`(3) The equipment described in this paragraph--
`(i) an aircraft, aircraft engine, propeller, appliance, or spare part (as defined in section 40102 of title 49) that is subject to a security interest granted by, leased to, or conditionally sold to a debtor that, at the time such transaction is entered into, holds an air carrier operating certificate issued under chapter 447 of title 49 for aircraft capable of carrying 10 or more individuals or 6,000 pounds or more of cargo; or
`(ii) a documented vessel (as defined in section 30101(1) of title 46) that is subject to a security interest granted by, leased to, or conditionally sold to a debtor that is a water carrier that, at the time such transaction is entered into, holds a certificate of public convenience and necessity or permit issued by the Department of Transportation; and
`(B) includes all records and documents relating to such equipment that are required, under the terms of the security agreement, lease, or conditional sale contract, to be surrendered or returned by the debtor in connection with the surrender or return of such equipment.
`(4) 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 approval of the court, to extend the 60-day period specified in subsection (a)(1).
`(c)(1) In any case under this chapter, the trustee shall immediately surrender and return to a secured party, lessor, or conditional vendor, described in subsection (a)(1), equipment described in subsection (a)(3), if at any time after the date of the order for relief under this chapter such secured party, lessor, or conditional vendor is entitled under subsection (a)(1) to take possession of such equipment and makes a written demand for such possession to the trustee.
`(2) At such time as the trustee is required under paragraph (1) to surrender and return equipment described in subsection (a)(3), any lease of such equipment, and any security agreement or conditional sale contract relating to such equipment, if such security agreement or conditional sale contract is an executory contract, shall be deemed rejected.
`(d) With respect to equipment first placed in service on or before October 22, 1994, 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.'.
SEC. 402. ADEQUATE PROTECTION FOR INVESTORS.
(a) DEFINITION- Section 101 of title 11, United States Code, as amended by section 306(c) of this Act, is amended by inserting after paragraph (48) the following:
`(48A) `securities self regulatory organization' means either a securities association registered with the Securities and Exchange Commission under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3) or a national securities exchange registered with the Securities and Exchange Commission under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f);'.
(b) AUTOMATIC STAY- Section 362(b) of title 11, United States Code, as amended by section 311 of this Act, is amended--
(1) in paragraph (24), by striking `or' at the end;
(2) in paragraph (25), by striking the period at the end and inserting `; or'; and
(3) by inserting after paragraph (25) the following:
`(26) under subsection (a), of--
`(A) the commencement or continuation of an investigation or action by a securities self regulatory organization to enforce such organization's regulatory power;
`(B) the enforcement of an order or decision, other than for monetary sanctions, obtained in an action by the securities self regulatory organization to enforce such organization's regulatory power; or
`(C) any act taken by the securities self regulatory organization to delist, delete, or refuse to permit quotation of any stock that does not meet applicable regulatory requirements.'.
SEC. 403. MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS.
Section 341 of title 11, United States Code, is amended by adding at the end the following:
`(e) Notwithstanding subsections (a) and (b), the court, on the request of a party in interest and after notice and a hearing, for cause may order that the United States trustee not convene a meeting of creditors or equity security holders if the debtor has filed a plan as to which the debtor solicited acceptances prior to the commencement of the case.'.
SEC. 404. PROTECTION OF REFINANCE OF SECURITY INTEREST.
Subparagraphs (A), (B), and (C) of section 547(e)(2) of title 11, United States Code, are each amended by striking `10' each place it appears and inserting `30'.
SEC. 405. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
Section 365(d)(4) of title 11, United States Code, is amended to read as follows:
`(4)(A) Subject to subparagraph (B), in any case under any chapter of this title, an unexpired lease of nonresidential real property under which the debtor is the lessee shall be deemed rejected and the trustee shall immediately surrender that nonresidential real property to the lessor if the trustee does not assume or reject the unexpired lease by the earlier of--
`(i) the date that is 120 days after the date of the order for relief; or
`(ii) the date of the entry of an order confirming a plan.
`(B) The court may extend the period determined under subparagraph (A) only upon a motion of the lessor.'.
SEC. 406. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.
(a) APPOINTMENT- Section 1102(a)(2) of title 11, United States Code, is amended by inserting before the first sentence the following: `On its own motion or on request of a party in interest, and after notice and hearing, the court may order a change in the membership of a committee appointed under this subsection, if the court determines that the change is necessary to ensure adequate representation of creditors or equity security holders. The court may increase the number of members of a committee to include a creditor that is a small business concern (as described in section 3(a)(1) of the Small Business Act (15 U.S.C. 632(a)(1))), if the court determines that the creditor holds claims (of the kind represented by the committee) the aggregate amount of which, in comparison to the annual gross revenue of that creditor, is disproportionately large.'.
(b) INFORMATION- Section 1102(b) of title 11, United States Code, is amended by adding at the end the following:
`(3) A committee appointed under subsection (a) shall--
`(A) provide access to information for creditors who--
`(i) hold claims of the kind represented by that committee; and
`(ii) are not appointed to the committee;
`(B) solicit and receive comments from the creditors described in subparagraph (A); and
`(C) be subject to a court order that compels any additional report or disclosure to be made to the creditors described in subparagraph (A).'.
SEC. 407. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES CODE.
Section 546 of title 11, United States Code, is amended--
(1) by redesignating the second subsection designated as subsection (g) (as added by section 222(a) of Public Law 103-394) as subsection (i); and
(2) by adding at the end the following:
`(j)(1) Notwithstanding section 545 (2) and (3), the trustee may not avoid a warehouseman's lien for storage, transportation or other costs incidental to the storage and handling of goods.
`(2) The prohibition under paragraph (1) shall be applied in a manner consistent with any applicable State statute that is similar to section 7-209 of the Uniform Commercial Code.'.
SEC. 408. LIMITATION.
Section 546(c)(1)(B) of title 11, United States Code, is amended by striking `20' and inserting `45'.
SEC. 409. AMENDMENT TO SECTION 330(a) OF TITLE 11, UNITED STATES CODE.
Section 330(a)(3) of title 11, United States Code, is amended--
(1) by striking `(A) the; and inserting `(i) the';
(2) by striking `(B)' and inserting `(ii)';
(3) by striking `(C)' and inserting `(iii)';
(4) by striking `(D)' and inserting `(iv)';
(5) by striking `(E)' and inserting `(v)';
(6) in subparagraph (A), by inserting `to an examiner, trustee under chapter 11, or professional person' after `awarded'; and
(7) by adding at the end the following:
`(B) In determining the amount of reasonable compensation to be awarded a trustee, the court shall treat such compensation as a commission based on the results achieved.'.
SEC. 410. POSTPETITION DISCLOSURE AND SOLICITATION.
Section 1125 of title 11, United States Code, is amended by adding at the end the following:
`(g) Notwithstanding subsection (b), an acceptance or rejection of the plan may be solicited from a holder of a claim or interest if such solicitation complies with applicable nonbankruptcy law and if such holder was solicited before the commencement of the case in a manner complying with applicable nonbankruptcy law.'.
SEC. 411. PREFERENCES.
Section 547(c) of title 11, United States Code, is amended--
(1) by striking paragraph (2) and inserting the following:
`(2) to the extent that such transfer was in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee, and such transfer was--
`(A) made in the ordinary course of business or financial affairs of the debtor and the transferee; or
`(B) made according to ordinary business terms;';
(2) in paragraph (7) by striking `or' at the end;
(3) in paragraph (8) by striking the period at the end and inserting `; or'; and
(4) by adding at the end the following:
`(9) if, in a case filed by a debtor whose debts are not primarily consumer debts, the aggregate value of all property that constitutes or is affected by such transfer is less than $5,000.'.
SEC. 412. VENUE OF CERTAIN PROCEEDINGS.
Section 1409(b) of title 28, United States Code, is amended by inserting `, or a nonconsumer debt against a noninsider of less than $10,000,' after `$5,000'.
SEC. 413. PERIOD FOR FILING PLAN UNDER CHAPTER 11.
Section 1121(d) of title 11, United States Code, is amended--
(1) by striking `On' and inserting `(1) Subject to paragraph (1), on'; and
(2) by adding at the end the following:
`(2)(A) The 120-day period specified in paragraph (1) may not be extended beyond a date that is 18 months after the date of the order for relief under this chapter.
`(B) The 180-day period specified in paragraph (1) may not be extended beyond a date that is 20 months after the date of the order for relief under this chapter.'.
SEC. 414. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.
Section 523(a)(16) of title 11, United States Code, is amended--
(1) by striking `dwelling' the first place it appears;
(2) by striking `ownership or' and inserting `ownership,';
(3) by striking `housing' the first place it appears; and
(4) by striking `but only' and all that follows through `but nothing in this paragraph' and inserting `or a lot in a homeowners association, for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot, and until such time as the debtor or trustee has surrendered any legal, equitable or possessory interest in such unit, such corporation, or such lot, but nothing in this paragraph'.
SEC. 415. CREDITOR REPRESENTATION AT FIRST MEETING OF CREDITORS.
Section 341(c) of title 11, United States Code, is amended by inserting after the first sentence the following: `Notwithstanding any local court rule, provision of a State constitution, any other Federal or State law that is not a bankruptcy law, or other requirement that representation at the meeting of creditors under subsection (a) be by an attorney, a creditor holding a consumer debt or any representative of the creditor (which may include an entity or an employee of an entity and may be a representative for more than 1 creditor) shall be permitted to appear at and participate in the meeting of creditors in a case under chapter 7 or 13, either alone or in conjunction with an attorney for the creditor. Nothing in this subsection shall be construed to require any creditor to be represented by an attorney at any meeting of creditors.'.
SEC. 416. DEFINITION OF DISINTERESTED PERSON.
Section 101(14) of title 11, United States Code, is amended to read as follows:
`(14) `disinterested person' means a person that--
`(A) is not a creditor, an equity security holder, or an insider;
`(B) is not and was not, within 2 years before the date of the filing of the petition, a director, officer, or employee of the debtor; and
`(C) does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the debtor, or for any other reason;'.
SEC. 417. FACTORS FOR COMPENSATION OF PROFESSIONAL PERSONS.
Section 330(a)(3)(A) of title 11, United States Code, as amended by section 409 of this Act, is amended--
(1) in clause (i), by striking `and' at the end;
(2) by redesignating clause (v) as clause (vi); and
(3) by inserting after clause (iv) the following:
`(v) with respect to a professional person, whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field;'.
SEC. 418. APPOINTMENT OF ELECTED TRUSTEE.
Section 1104(b) of title 11, United States Code, is amended--
(1) by inserting `(1)' after `(b)'; and
(2) by adding at the end the following:
`(2)(A) If an eligible, disinterested trustee is elected at a meeting of creditors under paragraph (1), the United States trustee shall file a report certifying that election.
`(B) Upon the filing of a report under subparagraph (A)--
`(i) the trustee elected under paragraph (1) shall be considered to have been selected and appointed for purposes of this section; and
`(ii) the service of any trustee appointed under subsection (d) shall terminate.
`(C) In the case of any dispute arising out of an election described in subparagraph (A), the court shall resolve the dispute.'.
SEC. 419. UTILITY SERVICE.
Section 366 of title 11, United States Code, is amended--
(1) in subsection (a), by striking `subsection (b)' and inserting `subsections (b) and (c)'; and
(2) by adding at the end the following:
`(c)(1)(A) For purposes of this subsection, the term `assurance of payment' means--
`(ii) a letter of credit;
`(iii) a certificate of deposit;
`(v) a prepayment of utility consumption; or
`(vi) another form of security that is mutually agreed on between the utility and the debtor or the trustee.
`(B) For purposes of this subsection an administrative expense priority shall not constitute an assurance of payment.
`(2) Subject to paragraphs (3) through (5), with respect to a case filed under chapter 11, a utility referred to in subsection (a) may alter, refuse, or discontinue utility service, if during the 20-day period beginning on the date of filing of the petition, the utility does not receive from the debtor or the trustee adequate assurance of payment for utility service that is satisfactory to the utility.
`(3)(A) On request of a party in interest and after notice and a hearing, the court may order modification of the amount of an assurance of payment under paragraph (2).
`(B) In making a determination under this paragraph whether an assurance of payment is adequate, the court may not consider--
`(i) the absence of security before the date of filing of the petition;
`(ii) the payment by the debtor of charges for utility service in a timely manner before the date of filing of the petition; or
`(iii) the availability of an administrative expense priority.
`(4) Notwithstanding any other provision of law, with respect to a case subject to this subsection, a utility may recover or set off against a security deposit provided to the utility by the debtor before the date of filing of the petition without notice or order of the court.'.
SEC. 420. BANKRUPTCY FEES.
Section 1930 of title 28, United States Code, is amended--
(1) in subsection (a), by striking `Notwithstanding section 1915 of this title, the parties' and inserting `Subject to subsection (f), the parties'; and
(2) by adding at the end the following:
`(f)(1) The Judicial Conference of the United States shall prescribe procedures for waiving fees under this subsection.
`(2) Under the procedures described in paragraph (1), the district court or the bankruptcy court may waive a filing fee described in paragraph (3) for a case commenced under chapter 7 of title 11 if the court determines that an individual debtor whose income is less than 125 percent of the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved is unable to pay that fee in installments.
`(3) A filing fee referred to in paragraph (2) is--
`(A) a filing fee under subsection (a)(1); or
`(B) any other fee prescribed by the Judicial Conference of the United States under subsection (b) that is payable to the clerk of the district court or the clerk of the bankruptcy court upon the commencement of a case under chapter 7 of title 11.
`(4) In addition to waiving a fee under paragraph (2), the district court or the bankruptcy court may waive any other fee prescribed under subsection (b) or (c) if the court determines that the individual with an income at a level described in paragraph (2) is unable to pay that fee in installments.'.
SEC. 421. MORE COMPLETE INFORMATION REGARDING ASSETS OF THE ESTATE.
(1) DISCLOSURE- The Advisory Committee on Bankruptcy Rules of the Judicial Conference of the United States, after consideration of the views of the Director of the Executive Office for the United States Trustees, shall propose for adoption amended Federal Rules of Bankruptcy Procedure and Official Bankruptcy Forms directing debtors under chapter 11 of title 11, United States Code, to disclose the information described in paragraph (2) by filing and serving periodic financial and other reports designed to provide such information.
(2) INFORMATION- The information referred to in paragraph (1) is the value, operations, and profitability of any closely held corporation, partnership, or of any other entity in which the debtor holds a substantial or controlling interest.
(b) PURPOSE- The purpose of the rules and reports under subsection (a) shall be to assist parties in interest taking steps to ensure that the debtor's interest in any entity referred to in subsection (a)(2) is used for the payment of allowed claims against debtor.
Subtitle B--Small Business Bankruptcy Provisions
SEC. 431. FLEXIBLE RULES FOR DISCLOSURE STATEMENT AND PLAN.
Section 1125 of title 11, United States Code, is amended by striking subsection (f) and inserting the following:
`(f) Notwithstanding subsection (b), in a small business case--
`(1) in determining whether a disclosure statement provides adequate information, the court shall consider the complexity of the case, the benefit of additional information to creditors and other parties in interest, and the cost of providing additional information;
`(2) the court may determine that the plan itself provides adequate information and that a separate disclosure statement is not necessary;
`(3) the court may approve a disclosure statement submitted on standard forms approved by the court or adopted under section 2075 of title 28; and
`(4)(A) the court may conditionally approve a disclosure statement subject to final approval after notice and a hearing;
`(B) acceptances and rejections of a plan may be solicited based on a conditionally approved disclosure statement if the debtor provides adequate information to each holder of a claim or interest that is solicited, but a conditionally approved disclosure statement shall be mailed not later than 20 days before the date of the hearing on confirmation of the plan; and
`(C) the hearing on the disclosure statement may be combined with the hearing on confirmation of a plan.'.
SEC. 432. DEFINITIONS; EFFECT OF DISCHARGE.
(a) DEFINITIONS- Section 101 of title 11, United States Code, as amended by section 402 of this Act, is amended by striking paragraph (51C) and inserting the following:
`(51C) `small business case' means a case filed under chapter 11 of this title in which the debtor is a small business debtor;
`(51D) `small business debtor'--
`(A) subject to subparagraph (B), means a person (including any affiliate of such person that is also a debtor under this title and excluding a person whose primary activity is the business of owning and operating real property and activities incidental thereto) that has aggregate noncontingent, liquidated secured and unsecured debts as of the date of the petition or the order for relief in an amount not more than $3,000,000 (excluding debts owed to 1 or more affiliates or insiders) for a case in which the United States trustee has appointed under section 1102(a)(1) a committee of unsecured creditors that the court has determined is sufficiently active and representative to provide effective oversight of the debtor; and
`(B) does not include any member of a group of affiliated debtors that has aggregate noncontingent liquidated secured and unsecured debts in an amount greater than $4,000,000 (excluding debt owed to 1 or more affiliates or insiders);'.
(b) CONFORMING AMENDMENT- Section 1102(a)(3) of title 11, United States Code, is amended by inserting `debtor' after `small business'.
SEC. 433. STANDARD FORM DISCLOSURE STATEMENT AND PLAN.
Within a reasonable period of time after the date of the enactment of this Act, the Advisory Committee on Bankruptcy Rules of the Judicial Conference of the United States shall propose for adoption standard form disclosure statements and plans of reorganization for small business debtors (as defined in section 101 of title 11, United States Code, as amended by this Act), designed to achieve a practical balance between--
(1) the reasonable needs of the courts, the United States trustee, creditors, and other parties in interest for reasonably complete information; and
(2) economy and simplicity for debtors.
SEC. 434. UNIFORM NATIONAL REPORTING REQUIREMENTS.
(1) IN GENERAL- Chapter 3 of title 11, United States Code, is amended by inserting after section 307 the following:
`Sec. 308. Debtor reporting requirements
`(1) For purposes of this section, the term `profitability' means, with respect to a debtor, the amount of money that the debtor has earned or lost during current and recent fiscal periods.
`(2) A small business debtor shall file periodic financial and other reports containing information including--
`(A) the debtor's profitability;
`(B) reasonable approximations of the debtor's projected cash receipts and cash disbursements over a reasonable period;
`(C) comparisons of actual cash receipts and disbursements with projections in prior reports;
`(D)(i) whether the debtor is--
`(I) in compliance in all material respects with postpetition requirements imposed by this title and the Federal Rules of Bankruptcy Procedure; and
`(II) timely filing tax returns and other required government filings and paying taxes and other administrative claims when due; and
`(ii) if the debtor is not in compliance with the requirements referred to in clause (i)(I) or filing tax returns and other required government filings and making the payments referred to in clause (i)(II), what the failures are and how, at what cost, and when the debtor intends to remedy such failures; and
`(iii) such other matters as are in the best interests of the debtor and creditors, and in the public interest in fair and efficient procedures under chapter 11 of this title.'.
(2) CLERICAL AMENDMENT- The table of sections for chapter 3 of title 11, United States Code, is amended by inserting after the item relating to section 307 the following:
`308. Debtor reporting requirements.'.
(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect 60 days after the date on which rules are prescribed under section 2075 of title 28, United States Code, to establish forms to be used to comply with section 308 of title 11, United States Code, as added by subsection (a).
SEC. 435. UNIFORM REPORTING RULES AND FORMS FOR SMALL BUSINESS CASES.
(a) PROPOSAL OF RULES AND FORMS- The Advisory Committee on Bankruptcy Rules of the Judicial Conference of the United States shall propose for adoption amended Federal Rules of Bankruptcy Procedure and Official Bankruptcy Forms to be used by small business debtors to file periodic financial and other reports containing information, including information relating to--
(1) the debtor's profitability;
(2) the debtor's cash receipts and disbursements; and
(3) whether the debtor is timely filing tax returns and paying taxes and other administrative claims when due.
(b) PURPOSE- The rules and forms proposed under subsection (a) shall be designed to achieve a practical balance among--
(1) the reasonable needs of the bankruptcy court, the United States trustee, creditors, and other parties in interest for reasonably complete information;
(2) the small business debtor's interest that required reports be easy and inexpensive to complete; and
(3) the interest of all parties that the required reports help the small business debtor to understand the small business debtor's financial condition and plan the small business debtor's future.
SEC. 436. DUTIES IN SMALL BUSINESS CASES.
(a) DUTIES IN CHAPTER 11 CASES- Subchapter I of title 11, United States Code, as amended by section 321 of this Act, is amended by adding at the end the following:
`Sec. 1116. Duties of trustee or debtor in possession in small business cases
`In a small business case, a trustee or the debtor in possession, in addition to the duties provided in this title and as otherwise required by law, shall--
`(1) append to the voluntary petition or, in an involuntary case, file within 7 days after the date of the order for relief--
`(A) its most recent balance sheet, statement of operations, cash-flow statement, Federal income tax return; or
`(B) a statement made under penalty of perjury that no balance sheet, statement of operations, or cash-flow statement has been prepared and no Federal tax return has been filed;
`(2) attend, through its senior management personnel and counsel, meetings scheduled by the court or the United States trustee, including initial debtor interviews, scheduling conferences, and meetings of creditors convened under section 341 unless the court waives that requirement after notice and hearing, upon a finding of extraordinary and compelling circumstances;
`(3) timely file all schedules and statements of financial affairs, unless the court, after notice and a hearing, grants an extension, which shall not extend such time period to a date later than 30 days after the date of the order for relief, absent extraordinary and compelling circumstances;
`(4) file all postpetition financial and other reports required by the Federal Rules of Bankruptcy Procedure or by local rule of the district court;
`(5) subject to section 363(c)(2), maintain insurance customary and appropriate to the industry;
`(6)(A) timely file tax returns and other required government filings; and
`(B) subject to section 363(c)(2), timely pay all administrative expense tax claims, except those being contested by appropriate proceedings being diligently prosecuted; and
`(7) allow the United States trustee, or a designated representative of the United States trustee, to inspect the debtor's business premises, books, and records at reasonable times, after reasonable prior written notice, unless notice is waived by the debtor.'.
(b) CLERICAL AMENDMENT- The table of sections for chapter 11 of title 11, United States Code, is amended by adding at the end of the matter relating to subchapter I the following:
`1116. Duties of trustee or debtor in possession in small business cases.'.
SEC. 437. PLAN FILING AND CONFIRMATION DEADLINES.
Section 1121 of title 11, United States Code, is amended by striking subsection (e) and inserting the following:
`(e) In a small business case--
`(1) only the debtor may file a plan until after 180 days after the date of the order for relief, unless that period is--
`(A) extended as provided by this subsection, after notice and hearing; or
`(B) the court, for cause, orders otherwise;
`(2) the plan, and any necessary disclosure statement, shall be filed not later than 300 days after the date of the order for relief; and
`(3) the time periods specified in paragraphs (1) and (2), and the time fixed in section 1129(e), within which the plan shall be confirmed, may be extended only if--
`(A) the debtor, after providing notice to parties in interest (including the United States trustee), demonstrates by a preponderance of the evidence that it is more likely than not that the court will confirm a plan within a reasonable period of time;
`(B) a new deadline is imposed at the time the extension is granted; and
`(C) the order extending time is signed before the existing deadline has expired.'.
SEC. 438. PLAN CONFIRMATION DEADLINE.
Section 1129 of title 11, United States Code, is amended by adding at the end the following:
`(e) In a small business case, the plan shall be confirmed not later than 175 days after the date of the order for relief, unless such 175-day period is extended as provided in section 1121(e)(3).'.
SEC. 439. DUTIES OF THE UNITED STATES TRUSTEE.
Section 586(a) of title 28, United States Code, is amended--
(A) in subparagraph (G), by striking `and' at the end;
(B) by redesignating subparagraph (H) as subparagraph (I); and
(C) by inserting after subparagraph (G) the following:
`(H) in small business cases (as defined in section 101 of title 11), performing the additional duties specified in title 11 pertaining to such cases;';
(2) in paragraph (5), by striking `and' at the end;
(3) in paragraph (6), by striking the period at the end and inserting `; and'; and
(4) by inserting after paragraph (6) the following:
`(7) in each of such small business cases--
`(A) conduct an initial debtor interview as soon as practicable after the entry of order for relief but before the first meeting scheduled under section 341(a) of title 11, at which time the United States trustee shall--
`(i) begin to investigate the debtor's viability;
`(ii) inquire about the debtor's business plan;
`(iii) explain the debtor's obligations to file monthly operating reports and other required reports;
`(iv) attempt to develop an agreed scheduling order; and
`(v) inform the debtor of other obligations;
`(B) if determined to be appropriate and advisable, visit the appropriate business premises of the debtor and ascertain the state of the debtor's books and records and verify that the debtor has filed its tax returns; and
`(C) review and monitor diligently the debtor's activities, to identify as promptly as possible whether the debtor will be unable to confirm a plan; and
`(8) in any case in which the United States trustee finds material grounds for any relief under section 1112 of title 11, the United States trustee shall apply promptly after making that finding to the court for relief.'.
SEC. 440. SCHEDULING CONFERENCES.
Section 105(d) of title 11, United States Code, is amended--
(1) in the matter preceding paragraph (1), by striking `, may';
(2) by striking paragraph (1) and inserting the following:
`(1) shall hold such status conferences as are necessary to further the expeditious and economical resolution of the case; and'; and
(3) in paragraph (2), by striking `unless inconsistent with another provision of this title or with applicable Federal Rules of Bankruptcy Procedure,'.
SEC. 441. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, is amended--
(1) in subsection (j), as redesignated by section 305(1) of this Act--
(A) by striking `An' and inserting `(1) Except as provided in paragraph (2), an'; and
(B) by adding at the end the following:
`(2) If such violation is based on an action taken by an entity in the good faith belief that subsection (h) applies to the debtor, the recovery under paragraph (1) against such entity shall be limited to actual damages.'; and
(2) by inserting after subsection (j) the following:
`(k)(1) Except as provided in paragraph (2), the filing of a petition under chapter 11 operates as a stay of the acts described in subsection (a) only in an involuntary case involving no collusion by the debtor with creditors and in which the debtor--
`(A) is a debtor in a small business case pending at the time the petition is filed;
`(B) was a debtor in a small business case that was dismissed for any reason by an order that became final in the 2-year period ending on the date of the order for relief entered with respect to the petition;
`(C) was a debtor in a small business case in which a plan was confirmed in the 2-year period ending on the date of the order for relief entered with respect to the petition; or
`(D) is an entity that has succeeded to substantially all of the assets or business of a small business debtor described in subparagraph (A), (B), or (C).
`(2) Paragraph (1) does not apply to the filing of a petition if the debtor proves by a preponderance of the evidence that--
`(A) the filing of that petition resulted from circumstances beyond the control of the debtor not foreseeable at the time the case then pending was filed; and
`(B) it is more likely than not that the court will confirm a feasible plan, but not a liquidating plan, within a reasonable period of time.'.
SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND APPOINTMENT OF TRUSTEE.
(a) EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION- Section 1112 of title 11, United States Code, is amended by striking subsection (b) and inserting the following:
`(b)(1) Except as provided in paragraph (2), in subsection (c), and section 1104(a)(3), on request of a party in interest, and after notice and a hearing, the court shall convert a case under this chapter to a case under chapter 7 or dismiss a case under this chapter, whichever is in the best interest of creditors and the estate, if the movant establishes cause.
`(2) The relief provided in paragraph (1) shall not be granted if the debtor or another party in interest objects and establishes by a preponderance of the evidence that--
`(A) a plan with a reasonable possibility of being confirmed will be filed within a reasonable period of time; and
`(B) if the grounds include an act or omission of the debtor--
`(i) for which there exists a reasonable justification for the act or omission; and
`(ii) which will be cured within a reasonable period of time fixed by the court.
`(3) The court shall commence the hearing on any motion under this subsection not later than 30 days after filing of the motion, and shall decide the motion within 15 days after commencement of the hearing, unless the movant expressly consents to a continuance for a specific period of time or compelling circumstances prevent the court from meeting the time limits established by this paragraph.
`(4) For purposes of this subsection, cause includes--
`(A) substantial or continuing loss to or diminution of the estate;
`(B) gross mismanagement of the estate;
`(C) failure to maintain appropriate insurance that poses a risk to the estate or to the public;
`(D) unauthorized use of cash collateral harmful to 1 or more creditors;
`(E) failure to comply with an order of the court;
`(F) repeated failure timely to satisfy any filing or reporting requirement established by this title or by any rule applicable to a case under this chapter;
`(G) failure to attend the meeting of creditors convened under section 341(a) or an examination ordered under Rule 2004 of the Federal Rules of Bankruptcy Procedure;
`(H) failure timely to provide information or attend meetings reasonably requested by the United States trustee;
`(I) failure timely to pay taxes due after the date of the order for relief or to file tax returns due after the order for relief;
`(J) failure to file a disclosure statement, or to file or confirm a plan, within the time fixed by this title or by order of the court;
`(K) failure to pay any fees or charges required under chapter 123 of title 28;
`(L) revocation of an order of confirmation under section 1144;
`(M) inability to effectuate substantial consummation of a confirmed plan;
`(N) material default by the debtor with respect to a confirmed plan;
`(O) termination of a confirmed plan by reason of the occurrence of a condition specified in the plan; and
`(P) failure of the debtor to pay any domestic support obligation that first becomes payable after the date on which the petition is filed.
`(5) The court shall commence the hearing on any motion under this subsection not later than 30 days after filing of the motion, and shall decide the motion within 15 days after commencement of the hearing, unless the movant expressly consents to a continuance for a specific period of time or compelling circumstances prevent the court from meeting the time limits established by this paragraph.'.
(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF TRUSTEE- Section 1104(a) of title 11, United States Code, is amended--
(1) in paragraph (1), by striking `or' at the end;
(2) in paragraph (2), by striking the period at the end and inserting `; or'; and
(3) by adding at the end the following:
`(3) if grounds exist to convert or dismiss the case under section 1112, but the court determines that the appointment of a trustee or an examiner is in the best interests of creditors and the estate.'.
SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED STATES CODE, WITH RESPECT TO SMALL BUSINESSES.
Not later than 2 years after the date of the enactment of this Act, the Administrator of the Small Business Administration, in consultation with the Attorney General of the United States, the Director of the Administrative Office of United States Trustees, and the Director of the Administrative Office of the United States Courts, shall--
(1) conduct a study to determine--
(A) the internal and external factors that cause small businesses, especially sole proprietorships, to become debtors in cases under title 11, United States Code, and that cause certain small businesses to successfully complete cases under chapter 11 of such title; and
(B) how Federal laws relating to bankruptcy may be made more effective and efficient in assisting small businesses to remain viable; and
(2) submit to the President pro tempore of the Senate and the Speaker of the House of Representatives a report summarizing that study.
SEC. 444. PAYMENT OF INTEREST.
Section 362(d)(3) of title 11, United States Code, is amended--
(1) by inserting `or 30 days after the court determines that the debtor is subject to this paragraph, whichever is later' after `90-day period)'; and
(2) by striking subparagraph (B) and inserting the following:
`(B) the debtor has commenced monthly payments that--
`(i) may, in the debtor's sole discretion, notwithstanding section 363(c)(2), be made from rents or other income generated before or after the commencement of the case by or from the property to each creditor whose claim is secured by such real estate (other than a claim secured by a judgment lien or by an unmatured statutory lien); and
`(ii) are in an amount equal to interest at the then applicable nondefault contract rate of interest on the value of the creditor's interest in the real estate; or'.
SEC. 445. TECHNICAL CORRECTION.
Section 365(b)(2)(D) of title 11, United States Code, is amended by striking `penalty rate or provision' and inserting `penalty rate or penalty provision'.
TITLE V--MUNICIPAL BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETITION.
(a) TECHNICAL AMENDMENT RELATING TO MUNICIPALITIES- Section 921(d) of title 11, United States Code, is amended by inserting `, notwithstanding section 301(b)' before the period at the end.
(b) CONFORMING AMENDMENT- Section 301 of title 11, United States Code, is amended--
(1) by inserting `(a)' before `A voluntary';
(2) by striking the last sentence; and
(3) by adding at the end the following:
`(b) The commencement of a voluntary case under a chapter of this title constitutes an order for relief under such chapter.'.
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAPTER 9.
Section 901(a) of title 11, United States Code, is amended--
(1) by inserting `555, 556,' after `553,'; and
(2) by inserting `559, 560,' after `557,'.
TITLE VI--IMPROVED BANKRUPTCY STATISTICS AND DATA
SEC. 601. AUDIT PROCEDURES.
(a) AMENDMENTS- Section 586 of title 28, United States Code, is amended--
(1) in subsection (a), by striking paragraph (6) and inserting the following:
`(6) make such reports as the Attorney General directs, including the results of audits performed under subsection (f); and'; and
(2) by adding at the end the following:
`(f)(1)(A) The Attorney General shall establish procedures to determine the accuracy, veracity, and completeness of petitions, schedules, and other information which the debtor is required to provide under sections 521 and 1322 of title 11, and, if applicable, section 111 of title 11, in individual cases filed under chapter 7 or 13 of such title.
`(B) Those procedures shall--
`(i) establish a method of selecting appropriate qualified persons to contract to perform those audits;
`(ii) establish a method of randomly selecting cases to be audited, except that not less than 1 out of every 250 cases in each Federal judicial district shall be selected for audit;
`(iii) require audits for schedules of income and expenses which reflect greater than average variances from the statistical norm of the district in which the schedules were filed if those variances occur by reason of higher income or higher expenses than the statistical norm of the district in which the schedules were filed; and
`(iv) include procedures for providing, not less frequently than annually, public information concerning the aggregate results of the audits referred to in this subparagraph, including the percentage of cases, by district, in which a material misstatement of income or expenditures is reported.
`(2) The United States trustee for each district may contract with auditors to perform audits in cases designated by the United States trustee according to the procedures established under paragraph (1).
`(3)(A) The report of each audit conducted under this subsection shall be filed with the court and transmitted to the United States trustee. Each report shall clearly and conspicuously specify any material misstatement of income or expenditures or of assets identified by the person performing the audit. In any case where a material misstatement of income or expenditures or of assets has been reported, the clerk of the bankruptcy court shall give notice of the misstatement to the creditors in the case.
`(B) If a material misstatement of income or expenditures or of assets is reported, the United States trustee shall--
`(i) report the material misstatement, if appropriate, to the United States Attorney under section 3057 of title 18; and
`(ii) if advisable, take appropriate action, including commencing an adversary proceeding to revoke the debtor's discharge under section 727(d) of title 11.'.
(b) AMENDMENTS TO SECTION 521 OF TITLE 11, UNITED STATES CODE- Paragraphs (3) and (4) of section 521(a) of title 11, United States Code, as amended by section 315 of this Act, are each amended by inserting `or an auditor appointed under section 586 of title 28' after `serving in the case' each place that term appears.
(c) AMENDMENTS TO SECTION 727 OF TITLE 11, UNITED STATES CODE- Section 727(d) of title 11, United States Code, is amended--
(1) in paragraph (2), by striking `or' at the end;
(2) in paragraph (3), by striking the period at the end and inserting `; or'; and
(3) by adding at the end the following:
`(4) the debtor has failed to explain satisfactorily--
`(A) a material misstatement in an audit performed under section 586(f) of title 28; or
`(B) a failure to make available for inspection all necessary accounts, papers, documents, financial records, files, and any other papers, things, or property belonging to the debtor that are requested for an audit conducted under section 586(f).'.
(d) EFFECTIVE DATE- The amendments made by this section shall take effect 18 months after the date of enactment of this Act.
SEC. 602. IMPROVED BANKRUPTCY STATISTICS.
(a) AMENDMENT- Chapter 6 of title 28, United States Code, is amended by adding at the end the following:
`Sec. 159. Bankruptcy statistics
`(a) The clerk of each district court shall compile statistics regarding individual debtors with primarily consumer debts seeking relief under chapters 7, 11, and 13 of title 11. Those statistics shall be in a form prescribed by the Director of the Administrative Office of the United States Courts (referred to in this section as the `Office').
`(b) The Director shall--
`(1) compile the statistics referred to in subsection (a);
`(2) make the statistics available to the public; and
`(3) not later than October 31, 1999, and annually thereafter, prepare, and submit to Congress a report concerning the information collected under subsection (a) that contains an analysis of the information.
`(c) The compilation required under subsection (b) shall--
`(1) be itemized, by chapter, with respect to title 11;
`(2) be presented in the aggregate and for each district; and
`(3) include information concerning--
`(A) the total assets and total liabilities of the debtors described in subsection (a), and in each category of assets and liabilities, as reported in the schedules prescribed under section 2075 and filed by those debtors;
`(B) the total current monthly income, projected monthly net income, and average income, and average expenses of those debtors as reported on the schedules and statements that each such debtor files under sections 111, 521, and 1322 of title 11;
`(C) the aggregate amount of debt discharged in the reporting period, determined as the difference between the total amount of debt and obligations of a debtor reported on the schedules and the amount of such debt reported in categories which are predominantly nondischargeable;
`(D) the average period of time between the filing of the petition and the closing of the case;
`(E) for the reporting period--
`(i) the number of cases in which a reaffirmation was filed; and
`(ii)(I) the total number of reaffirmations filed;
`(II) of those cases in which a reaffirmation was filed, the number in which the debtor was not represented by an attorney; and
`(III) of the cases under each of subclauses (I) and (II), the number of cases in which the reaffirmation was approved by the court;
`(F) with respect to cases filed under chapter 13 of title 11, for the reporting period--
`(i)(I) the number of cases in which a final order was entered determining the value of property securing a claim in an amount less than the amount of the claim; and
`(II) the number of final orders determining the value of property securing a claim issued;
`(ii) the number of cases dismissed for failure to make payments under the plan; and
`(iii) the number of cases in which the debtor filed another case during the 6-year period preceding the date of filing;
`(G) the number of cases in which creditors were fined for misconduct and any amount of punitive damages awarded by the court for creditor misconduct; and
`(H) the number of cases in which sanctions under Rule 9011 of the Federal Rules of Bankruptcy Procedure were imposed against debtor's counsel and damages awarded under such rule.'.
(b) CLERICAL AMENDMENT- The table of sections for chapter 6 of title 28, United States Code, is amended by adding at the end the following:
`159. Bankruptcy statistics.'.
(c) EFFECTIVE DATE- The amendments made by this section shall take effect 18 months after the date of enactment of this Act.
SEC. 603. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY DATA.
(a) AMENDMENT- Chapter 39 of title 28, United States Code, is amended by inserting after section 589a the following:
`Sec. 589b. Bankruptcy data
`(a) Within a reasonable period of time after the effective date of this section, the Attorney General of the United States shall issue rules requiring uniform forms for (and from time to time thereafter to appropriately modify and approve)--
`(1) final reports by trustees in cases under chapters 7, 12, and 13 of title 11; and
`(2) periodic reports by debtors in possession or trustees, as the case may be, in cases under chapter 11 of title 11.
`(b) Each report referred to in subsection (a) shall be designed (and the requirements as to place and manner of filing shall be established) so as to facilitate compilation of data and maximum practicable access of the public, by--
`(1) physical inspection at 1 or more central filing locations; and
`(2) electronic access through the Internet or other appropriate media.
`(c)(1) The information required to be filed in the reports referred to in subsection (b) shall be information that is--
`(A) in the best interests of debtors and creditors, and in the public interest; and
`(B) reasonable and adequate information to evaluate the efficiency and practicality of the Federal bankruptcy system.
`(2) In issuing rules proposing the forms referred to in subsection (a), the Attorney General shall strike the best achievable practical balance between--
`(A) the reasonable needs of the public for information about the operational results of the Federal bankruptcy system; and
`(B) economy, simplicity, and lack of undue burden on persons with a duty to file reports.
`(d)(1) Final reports proposed for adoption by trustees under chapters 7, 12, and 13 of title 11 shall include with respect to a case under such title, by appropriate category--
`(A) information about the length of time the case was pending;
`(D) receipts and disbursements of the estate;
`(E) expenses of administration;
`(H) distributions to claimants and claims discharged without payment.
`(2) In cases under chapters 12 and 13 of title 11, final reports proposed for adoption by trustees shall include--
`(A) the date of confirmation of the plan;
`(B) each modification to the plan; and
`(C) defaults by the debtor in performance under the plan.
`(3) The information described in paragraphs (1) and (2) shall be in addition to such other matters as are required by law for a final report or as the Attorney General, in the discretion of the Attorney General, may propose for a final report.
`(e)(1) Periodic reports proposed for adoption by trustees or debtors in possession under chapter 11 of title 11 shall include--
`(A) information about the standard industry classification, published by the Department of Commerce, for the businesses conducted by the debtor;
`(B) the length of time the case has been pending;
`(C) the number of full-time employees--
`(i) as of the date of the order for relief; and
`(ii) at the end of each reporting period since the case was filed;
`(D) cash receipts, cash disbursements, and profitability of the debtor for the most recent period and cumulatively since the date of the order for relief;
`(E) compliance with title 11, whether or not tax returns and tax payments since the date of the order for relief have been timely filed and made;
`(F) all professional fees approved by the court in the case for the most recent period and cumulatively since the date of the order for relief (separately reported, for the professional fees incurred by or on behalf of the debtor, between those that would have been incurred absent a bankruptcy case and those that would not have been so incurred); and
`(G) plans of reorganization filed and confirmed and, with respect thereto, by class, the recoveries of the holders, expressed in aggregate dollar values and, in the case of claims, as a percentage of total claims of the class allowed.
`(2) The information described in paragraph (1) shall be in addition to such other matters as are required by law for a periodic report or as the Attorney General, in the discretion of the Attorney General, may propose for a periodic report.'.
(b) TECHNICAL AMENDMENT- The table of sections for chapter 39 of title 28, United States Code, is amended by adding at the end the following:
`589b. Bankruptcy data.'.
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY OF BANKRUPTCY DATA.
It is the sense of Congress that--
(1) it should be the national policy of the United States that all data held by bankruptcy clerks in electronic form, to the extent such data reflects only public records (as defined in section 107 of title 11, United States Code), should be released in a usable electronic form in bulk to the public subject to such appropriate privacy concerns and safeguards as the Judicial Conference of the United States may determine; and
(2) there should be established a bankruptcy data system in which--
(A) a single set of data definitions and forms are used to collect data nationwide; and
(B) data for any particular bankruptcy case are aggregated in the same electronic record.
TITLE VII--BANKRUPTCY TAX PROVISIONS
SEC. 701. TREATMENT OF CERTAIN LIENS.
(a) TREATMENT OF CERTAIN LIENS- Section 724 of title 11, United States Code, is amended--
(1) in subsection (b), in the matter preceding paragraph (1), by inserting `(other than to the extent that there is a properly perfected unavoidable tax lien arising in connection with an ad valorem tax on real or personal property of the estate)' after `under this title';
(2) in subsection (b)(2), by inserting `(except that such expenses, other than claims for wages, salaries, or commissions which arise after the filing of a petition, shall be limited to expenses incurred under chapter 7 of this title and shall not include expenses incurred under chapter 11 of this title)' after `507(a)(1)'; and
(3) by adding at the end the following:
`(e) Before subordinating a tax lien on real or personal property of the estate, the trustee shall--
`(1) exhaust the unencumbered assets of the estate; and
`(2) in a manner consistent with section 506(c), recover from property securing an allowed secured claim the reasonable, necessary costs and expenses of preserving or disposing of that property.
`(f) Notwithstanding the exclusion of ad valorem tax liens under this section and subject to the requirements of subsection (e), the following may be paid from property of the estate which secures a tax lien, or the proceeds of such property:
`(1) Claims for wages, salaries, and commissions that are entitled to priority under section 507(a)(4).
`(2) Claims for contributions to an employee benefit plan entitled to priority under section 507(a)(5).'.
(b) DETERMINATION OF TAX LIABILITY- Section 505(a)(2) of title 11, United States Code, is amended--
(1) in subparagraph (A), by striking `or' at the end;
(2) in subparagraph (B), by striking the period at the end and inserting `; or'; and
(3) by adding at the end the following:
`(C) the amount or legality of any amount arising in connection with an ad valorem tax on real or personal property of the estate, if the applicable period for contesting or redetermining that amount under any law (other than a bankruptcy law) has expired.'.
SEC. 702. TREATMENT OF FUEL TAX CLAIMS.
Section 501 of title 11, United States Code, is amended by adding at the end the following:
`(e) A claim arising from the liability of a debtor for fuel use tax assessed consistent with the requirements of section 31705 of title 49 may be filed by the base jurisdiction designated pursuant to the International Fuel Tax Agreement and, if so filed, shall be allowed as a single claim.'.
SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.
Section 505(b) of title 11, United States Code, is amended--
(1) in the first sentence, by inserting `at the address and in the manner designated in paragraph (1)' after `determination of such tax';
(2) by striking `(1) upon payment' and inserting `(2)(A) upon payment';
(3) by striking `(A) such governmental unit' and inserting `(i) such governmental unit';
(4) by striking `(B) such governmental unit' and inserting `(ii) such governmental unit';
(5) by striking `(2) upon payment' and inserting `(B) upon payment';
(6) by striking `(3) upon payment' and inserting `(C) upon payment';
(7) by striking `(b)' and inserting `(2)'; and
(8) by inserting before paragraph (2), as so designated, the following:
`(b)(1)(A) The clerk of each district shall maintain a listing under which a Federal, State, or local governmental unit responsible for the collection of taxes within the district may--
`(i) designate an address for service of requests under this subsection; and
`(ii) describe where further information concerning additional requirements for filing such requests may be found.
`(B) If a governmental unit referred to in subparagraph (A) does not designate an address and provide that address to the clerk under that subparagraph, any request made under this subsection may be served at the address for the filing of a tax return or protest with the appropriate taxing authority of that governmental unit.'.
SEC. 704. RATE OF INTEREST ON TAX CLAIMS.
(a) IN GENERAL- Subchapter I of chapter 5 of title 11, United States Code, is amended by adding at the end the following:
`Sec. 511. Rate of interest on tax claims
`(a) If any provision of this title requires the payment of interest on a tax claim or the payment of interest to enable a creditor to receive the present value of the allowed amount of a tax claim, the rate of interest shall be the rate shall be determined under applicable nonbankruptcy law.
`(b) In the case of taxes paid under a confirmed plan under this title, the rate of interest shall be determined as of the calendar month in which the plan is confirmed.'.
(b) CLERICAL AMENDMENT- The table of sections for chapter 5 of title 11, United States Code, is amended by inserting after the item relating to section 510 the following:
`511. Rate of interest on tax claims.'.
SEC. 705. PRIORITY OF TAX CLAIMS.
Section 507(a)(8) of title 11, United States Code, is amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by inserting `for a taxable year ending on or before the date of filing of the petition' after `gross receipts';
(i) by striking `for a taxable year ending on or before the date of filing of the petition'; and
(ii) by inserting before the semicolon at the end, the following: `, plus any time during which the stay of proceedings was in effect in a prior case under this title or during which collection was precluded by the existence of 1 or more confirmed plans under this title, plus 90 days'; and
(C) by striking clause (ii) and inserting the following:
`(ii) assessed within 240 days before the date of the filing of the petition, exclusive of--
`(I) any time during which an offer in compromise with respect to that tax was pending or in effect during that 240-day period, plus 30 days; and
`(II) any time during which a stay of proceedings against collections was in effect in a prior case under this title during that 240-day period; plus 90 days.'; and
(2) by adding at the end the following:
`(H) An otherwise applicable time period specified in this paragraph shall be suspended for--
`(i) any period during which a governmental unit is prohibited under applicable nonbankruptcy law from collecting a tax as a result of a request by the debtor for a hearing and an appeal of any collection action taken or proposed against the debtor; plus
SEC. 706. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(9)(B) of title 11, United States Code, is amended by striking `assessed' and inserting `incurred'.
SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 13.
Section 1328(a)(2) of title 11, United States Code, as amended by sections 105, 213, and 314 of this Act, is amended--
(1) by inserting `(1)(B), (1)(C),' after `paragraph'; and
(2) by inserting `and in section 507(a)(8)(C)' after `section 523(a)'.
SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 11.
Section 1141(d) of title 11, United States Code, is amended by adding at the end the following:
`(5) Notwithstanding paragraph (1), the confirmation of a plan does not discharge a debtor that is a corporation from any debt for a tax or customs duty with respect to which the debtor--
`(A) made a fraudulent return; or
`(B) willfully attempted in any manner to evade or defeat that tax or duty.'.
SEC. 709. STAY OF TAX PROCEEDINGS LIMITED TO PREPETITION TAXES.
Section 362(a)(8) of title 11, United States Code, is amended by inserting `, with respect to a tax liability for a taxable period ending before the order for relief under this title' before the semicolon at the end.
SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 CASES.
Section 1129(a)(9) of title 11, United States Code, is amended--
(1) in subparagraph (B), by striking `and' at the end;
(2) in subparagraph (C), by striking `deferred cash payments, over a period not exceeding six years after the date of assessment of such claim,' and all that follows through the end of the subparagraph, and inserting `regular installment payments in cash--
`(i) of a total value, as of the effective date of the plan, equal to the allowed amount of such claim;
`(ii) with interest thereon calculated at the rate provided in section 6621(a)(2) of the Internal Revenue Code of 1986;
`(iii) over a period ending not later than 5 years after the date of the entry of the order for relief under section 301, 302, or 303; and
`(iv) in a manner not less favorable than the most favored nonpriority unsecured claim provided for in the plan (other than cash payments made to a class of creditors under section 1122(b)); and'; and
(3) by adding at the end the following:
`(D) with respect to a secured claim which would otherwise meet the description of an unsecured claim of a governmental unit under section 507(a)(8), but for the secured status of that claim, the holder of that claim will receive on account of that claim, cash payments, in the same manner and over the same period, as prescribed in subparagraph (C).'.
SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.
Section 545(2) of title 11, United States Code, is amended by striking the semicolon at the end and inserting `, except in any case in which a purchaser is a purchaser described in section 6323 of the Internal Revenue Code of 1986, or in any other similar provision of State or local law;'.
SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSINESS.
(a) PAYMENT OF TAXES REQUIRED- Section 960 of title 28, United States Code, is amended--
(1) by inserting `(a)' before `Any'; and
(2) by adding at the end the following:
`(b) A tax under subsection (a) shall be paid on or before the due date of the tax under applicable nonbankruptcy law, unless--
`(1) the tax is a property tax secured by a lien against property that is abandoned within a reasonable period of time after the lien attaches by the trustee of a bankruptcy estate under section 554 of title 11; or
`(2) payment of the tax is excused under a specific provision of title 11.
`(c) In a case pending under chapter 7 of title 11, payment of a tax may be deferred until final distribution is made under section 726 of title 11, if--
`(1) the tax was not incurred by a trustee duly appointed under chapter 7 of title 11; or
`(2) before the due date of the tax, an order of the court makes a finding of probable insufficiency of funds of the estate to pay in full the administrative expenses allowed under section 503(b) of title 11 that have the same priority in distribution under section 726(b) of title 11 as the priority of that tax.'.
(b) PAYMENT OF AD VALOREM TAXES REQUIRED- Section 503(b)(1)(B)(i) of title 11, United States Code, is amended by inserting `whether secured or unsecured, including property taxes for which liability is in rem, in personam, or both,' before `except'.
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE EXPENSE TAXES ELIMINATED- Section 503(b)(1) of title 11, United States Code, is amended--
(1) in subparagraph (B), by striking `and' at the end;
(2) in subparagraph (C), by adding `and' at the end; and
(3) by adding at the end the following:
`(D) notwithstanding the requirements of subsection (a), a governmental unit shall not be required to file a request for the payment of an expense described in subparagraph (B) or (C), as a condition of its being an allowed administrative expense;'.
(d) PAYMENT OF TAXES AND FEES AS SECURED CLAIMS- Section 506 of title 11, United States Code, is amended--
(1) in subsection (b), by inserting `or State statute' after `agreement'; and
(2) in subsection (c), by inserting `, including the payment of all ad valorem property taxes with respect to the property' before the period at the end.
SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS.
Section 726(a)(1) of title 11, United States Code, is amended by striking `before the date on which the trustee commences distribution under this section;' and inserting the following: `on or before the earlier of--
`(A) the date that is 10 days after the mailing to creditors of the summary of the trustee's final report; or
`(B) the date on which the trustee commences final distribution under this section;'.
SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AUTHORITIES.
Section 523(a) of title 11, United States Code, is amended--
(1) in paragraph (1)(B)--
(A) in the matter preceding clause (i), by inserting `or equivalent report or notice,' after `a return,';
(i) by inserting `or given' after `filed'; and
(ii) by striking `or' at the end; and
(i) by inserting `or given' after `filed'; and
(ii) by inserting `, report, or notice' after `return'; and
(2) by adding at the end the following flush sentences:
`For purposes of this subsection, the term `return' means a return that satisfies the requirements of applicable nonbankruptcy law (including applicable filing requirements). Such term includes a return prepared pursuant to section 6020(a) of the Internal Revenue Code of 1986, or similar State or local law, or a written stipulation to a judgment or a final order entered by a nonbankruptcy tribunal, but does not include a return made pursuant to section 6020(b) of the Internal Revenue Code of 1986, or a similar State or local law.'.
SEC. 715. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID TAXES.
The second sentence of section 505(b) of title 11, United States Code, as amended by section 703 of this Act, is amended by inserting `the estate,' after `misrepresentation,'.
SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER 13 PLANS.
(a) FILING OF PREPETITION TAX RETURNS REQUIRED FOR PLAN CONFIRMATION- Section 1325(a) of title 11, United States Code, as amended by section 213 of this Act, is amended--
(1) in paragraph (6), by striking `and' at the end;
(2) in paragraph (7), by striking the period at the end and inserting `; and'; and
(3) by inserting after paragraph (7) the following:
`(8) if the debtor has filed all applicable Federal, State, and local tax returns as required by section 1308.'.
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX RETURNS-
(1) IN GENERAL- Chapter 13 of title 11, United States Code, is amended by adding at the end the following:
`Sec. 1308. Filing of prepetition tax returns
`(a) Not later than the day before the date on which the meeting of the creditors is first scheduled to be held under section 341(a), the debtor shall file with appropriate tax authorities all tax returns for all taxable periods ending during the 4-year period ending on the date of the filing of the petition.
`(b)(1) Subject to paragraph (2), if the tax returns required by subsection (a) have not been filed by the date on which the meeting of creditors is first scheduled to be held under section 341(a), the trustee may hold open that meeting for a reasonable period of time to allow the debtor an additional period of time to file any unfiled returns, but such additional period of time shall not extend beyond--
`(A) for any return that is past due as of the date of the filing of the petition, the date that is 120 days after the date of that meeting; or
`(B) for any return that is not past due as of the date of the filing of the petition, the later of--
`(i) the date that is 120 days after the date of that meeting; or
`(ii) the date on which the return is due under the last automatic extension of time for filing that return to which the debtor is entitled, and for which request is timely made, in accordance with applicable nonbankruptcy law.
`(2) Upon notice and hearing, and order entered before the tolling of any applicable filing period determined under this subsection, if the debtor demonstrates by clear and convincing evidence that the failure to file a return as required under this subsection is attributable to circumstances beyond the control of the debtor, the court may extend the filing period established by the trustee under this subsection for--
`(A) a period of not more than 30 days for returns described in paragraph (1); and
`(B) a period not to extend after the applicable extended due date for a return described in paragraph (2).
`(c) For purposes of this section, the term `return' includes a return prepared pursuant to section 6020 (a) or (b) of the Internal Revenue Code of 1986, or a similar State or local law, or a written stipulation to a judgment or a final order entered by a nonbankruptcy tribunal.'.
(2) CONFORMING AMENDMENT- The table of sections for chapter 13 of title 11, United States Code, is amended by inserting after the item relating to section 1307 the following:
`1308. Filing of prepetition tax returns.'.
(c) DISMISSAL OR CONVERSION ON FAILURE TO COMPLY- Section 1307 of title 11, United States Code, is amended--
(1) by redesignating subsections (e) and (f) as subsections (f) and (g), respectively; and
(2) by inserting after subsection (d), the following:
`(e) Upon the failure of the debtor to file a tax return under section 1308, on request of a party in interest or the United States trustee and after notice and a hearing, the court shall dismiss a case or convert a case under this chapter to a case under chapter 7 of this title, whichever is in the best interest of the creditors and the estate.'.
(d) TIMELY FILED CLAIMS- Section 502(b)(9) of title 11, United States Code, is amended by inserting before the period at the end the following `, and except that in a case under chapter 13, a claim of a governmental unit for a tax with respect to a return filed under section 1308 shall be timely if the claim is filed on or before the date that is 60 days after the date on which such return was filed as required'.
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO CONFIRMATION- It is the sense of Congress that the Advisory Committee on Bankruptcy Rules of the Judicial Conference should, as soon as practicable after the date of enactment of this Act, propose for adoption amended Federal Rules of Bankruptcy Procedure which provide that--
(1) notwithstanding the provisions of Rule 3015(f), in cases under chapter 13 of title 11, United States Code, an objection to the confirmation of a plan filed by a governmental unit on or before the date that is 60 days after the date on which the debtor files all tax returns required under sections 1308 and 1325(a)(7) of title 11, United States Code, shall be treated for all purposes as if such objection had been timely filed before such confirmation; and
(2) in addition to the provisions of Rule 3007, in a case under chapter 13 of title 11, United States Code, no objection to a tax with respect to which a return is required to be filed under section 1308 of title 11, United States Code, shall be filed until such return has been filed as required.
SEC. 717. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a)(1) of title 11, United States Code, is amended--
(1) by inserting `including a discussion of the potential material Federal tax consequences of the plan to the debtor, any successor to the debtor, and a hypothetical investor typical of the holders of claims or interests in the case,' after `records'; and
(2) by striking `a hypothetical reasonable investor typical of holders of claims or interests' and inserting `such a hypothetical investor'.
SEC. 718. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as amended by section 402 of this Act, is amended--
(1) in paragraph (25), by striking `or' at the end;
(2) in paragraph (26), by striking the period at the end and inserting `; or'; and
(3) by inserting after paragraph (26) the following:
`(27) under subsection (a), of the setoff under applicable nonbankruptcy law of an income tax refund, by a governmental unit, with respect to a taxable period that ended before the order for relief against an income tax liability for a taxable period that also ended before the order for relief, except that in any case in which the setoff of an income tax refund is not permitted under applicable nonbankruptcy law because of a pending action to determine the amount or legality of a tax liability, the governmental unit may hold the refund pending the resolution of the action, unless the court, upon motion of the trustee and after notice and hearing, grants the taxing authority adequate protection (within the meaning of section 361) for the secured claim of that authority in the setoff under section 506(a).'.
SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREATMENT OF STATE AND LOCAL TAXES.
(a) IN GENERAL- Section 346 of title 11, United States Code, is amended to read as follows:
`SEC. 346. SPECIAL PROVISIONS RELATED TO THE TREATMENT OF STATE AND LOCAL TAXES.
`(a) Whenever the Internal Revenue Code of 1986 provides that a separate taxable estate or entity is created in a case concerning a debtor under this title, and the income, gain, loss, deductions, and credits of such estate shall be taxed to or claimed by the estate, a separate taxable estate is also created for purposes of any State and local law imposing a tax on or measured by income and such income, gain, loss, deductions, and credits shall be taxed to or claimed by the estate and may not be taxed to or claimed by the debtor. The preceding sentence shall not apply if the case is dismissed. The trustee shall make tax returns of income required under any such State or local law.
`(b) Whenever the Internal Revenue Code of 1986 provides that no separate taxable estate shall be created in a case concerning a debtor under this title, and the income, gain, loss, deductions, and credits of an estate shall be taxed to or claimed by the debtor, such income, gain, loss, deductions, and credits shall be taxed to or claimed by the debtor under a State or local law imposing a tax on or measured by income and may not be taxed to or claimed by the estate. The trustee shall make such tax returns of income of corporations and of partnerships as are required under any State or local law, but with respect to partnerships, shall make said returns only to the extent such returns are also required to be made under such Code. The estate shall be liable for any tax imposed on such corporation or partnership, but not for any tax imposed on partners or members.
`(c) With respect to a partnership or any entity treated as a partnership under a State or local law imposing a tax on or measured by income that is a debtor in a case under this title, any gain or loss resulting from a distribution of property from such partnership, or any distributive share of any income, gain, loss, deduction, or credit of a partner or member that is distributed, or considered distributed, from such partnership, after the commencement of the case, is gain, loss, income, deduction, or credit, as the case may be, of the partner or member, and if such partner or member is a debtor in a case under this title, shall be subject to tax in accordance with subsection (a) or (b).
`(d) For purposes of any State or local law imposing a tax on or measured by income, the taxable period of a debtor in a case under this title shall terminate only if and to the extent that the taxable period of such debtor terminates under the Internal Revenue Code of 1986.
`(e) The estate in any case described in subsection (a) shall use the same accounting method as the debtor used immediately before the commencement of the case, if such method of accounting complies with applicable nonbankruptcy tax law.
`(f) For purposes of any State or local law imposing a tax on or measured by income, a transfer of property from the debtor to the estate or from the estate to the debtor shall not be treated as a disposition for purposes of any provision assigning tax consequences to a disposition, except to the extent that such transfer is treated as a disposition under the Internal Revenue Code of 1986.
`(g) Whenever a tax is imposed pursuant to a State or local law imposing a tax on or measured by income pursuant to subsection (a) or (b), such tax shall be imposed at rates generally applicable to the same types of entities under such State or local law.
`(h) The trustee shall withhold from any payment of claims for wages, salaries, commissions, dividends, interest, or other payments, or collect, any amount required to be withheld or collected under applicable State or local tax law, and shall pay such withheld or collected amount to the appropriate governmental unit at the time and in the manner required by such tax law, and with the same priority as the claim from which such amount was withheld or collected was paid.
`(i)(1) To the extent that any State or local law imposing a tax on or measured by income provides for the carryover of any tax attribute from one taxable period to a subsequent taxable period, the estate shall succeed to such tax attribute in any case in which such estate is subject to tax under subsection (a).
`(2) After such a case is closed or dismissed, the debtor shall succeed to any tax attribute to which the estate succeeded under paragraph (1) to the extent consistent with the Internal Revenue Code of 1986.
`(3) The estate may carry back any loss or tax attribute to a taxable period of the debtor that ended before the order for relief under this title to the extent that--
`(A) applicable State or local tax law provides for a carryback in the case of the debtor; and
`(B) the same or a similar tax attribute may be carried back by the estate to such a taxable period of the debtor under the Internal Revenue Code of 1986.
`(j)(1) For purposes of any State or local law imposing a tax on or measured by income, income is not realized by the estate, the debtor, or a successor to the debtor by reason of discharge of indebtedness in a case under this title, except to the extent, if any, that such income is subject to tax under the Internal Revenue Code of 1986.
`(2) Whenever the Internal Revenue Code of 1986 provides that the amount excluded from gross income in respect of the discharge of indebtedness in a case under this title shall be applied to reduce the tax attributes of the debtor or the estate, a similar reduction shall be made under any State or local law imposing a tax on or measured by income to the extent such State or local law recognizes such attributes. Such State or local law may also provide for the reduction of other attributes to the extent that the full amount of income from the discharge of indebtedness has not been applied.
`(k)(1) Except as provided in this section and section 505, the time and manner of filing tax returns and the items of income, gain, loss, deduction, and credit of any taxpayer shall be determined under applicable nonbankruptcy law.
`(2) For Federal tax purposes, the provisions of this section are subject to the Internal Revenue Code of 1986 and other applicable Federal nonbankruptcy law.'.
(b) CONFORMING AMENDMENTS-
(1) Section 728 of title 11, United States Code, is repealed.
(2) Section 1146 of title 11, United States Code, is amended by striking subsections (a) and (b) and by redesignating subsections (c) and (d) as subsections (a) and (b), respectively.
(3) Section 1231 of title 11, United States Code, is amended by striking subsections (a) and (b) and by redesignating subsections (c) and (d) as subsections (a) and (b), respectively.
SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX RETURNS.
Section 521 of title 11, United States Code, as amended by this Act, is amended by adding at the end the following:
`(k)(1) Notwithstanding any other provision of this title, if the debtor fails to file a tax return that becomes due after the commencement of the case or to properly obtain an extension of the due date for filing such return, the taxing authority may request that the court enter an order converting or dismissing the case.
`(2) If the debtor does not file the required return or obtain the extension referred to in paragraph (1) within 90 days after a request is filed by the taxing authority under that paragraph, the court shall convert or dismiss the case, whichever is in the best interests of creditors and the estate.'.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, UNITED STATES CODE.
(a) IN GENERAL- Title 11, United States Code, is amended by inserting after chapter 13 the following:
`CHAPTER 15--ANCILLARY AND OTHER CROSS-BORDER CASES
`Sec.
`1501. Purpose and scope of application.
`SUBCHAPTER I--GENERAL PROVISIONS
`1503. International obligations of the United States.
`1504. Commencement of ancillary case.
`1505. Authorization to act in a foreign country.
`1506. Public policy exception.
`1507. Additional assistance.
`SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE COURT
`1509. Right of direct access.
`1510. Limited jurisdiction.
`1511. Commencement of case under section 301 or 303.
`1512. Participation of a foreign representative in a case under this title.
`1513. Access of foreign creditors to a case under this title.
`1514. Notification to foreign creditors concerning a case under this title.
`SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
`1515. Application for recognition of a foreign proceeding.
`1516. Presumptions concerning recognition.
`1517. Order recognizing a foreign proceeding.
`1518. Subsequent information.
`1519. Relief that may be granted upon petition for recognition of a foreign proceeding.
`1520. Effects of recognition of a foreign main proceeding.
`1521. Relief that may be granted upon recognition of a foreign proceeding.
`1522. Protection of creditors and other interested persons.
`1523. Actions to avoid acts detrimental to creditors.
`1524. Intervention by a foreign representative.
`SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN REPRESENTATIVES
`1525. Cooperation and direct communication between the court and foreign courts or foreign representatives.
`1526. Cooperation and direct communication between the trustee and foreign courts or foreign representatives.
`1527. Forms of cooperation.
`SUBCHAPTER V--CONCURRENT PROCEEDINGS
`1528. Commencement of a case under this title after recognition of a foreign main proceeding.
`1529. Coordination of a case under this title and a foreign proceeding.
`1530. Coordination of more than 1 foreign proceeding.
`1531. Presumption of insolvency based on recognition of a foreign main proceeding.
`1532. Rule of payment in concurrent proceedings.
`Sec. 1501. Purpose and scope of application
`(a) The purpose of this chapter is to incorporate the Model Law on Cross-Border Insolvency so as to provide effective mechanisms for dealing with cases of cross-border insolvency with the objectives of--
`(1) cooperation between--
`(A) United States courts, United States Trustees, trustees, examiners, debtors, and debtors in possession; and
`(B) the courts and other competent authorities of foreign countries involved in cross-border insolvency cases;
`(2) greater legal certainty for trade and investment;
`(3) fair and efficient administration of cross-border insolvencies that protects the interests of all creditors, and other interested entities, including the debtor;
`(4) protection and maximization of the value of the debtor's assets; and
`(5) facilitation of the rescue of financially troubled businesses, thereby protecting investment and preserving employment.
`(b) This chapter applies if--
`(1) assistance is sought in the United States by a foreign court or a foreign representative in connection with a foreign proceeding;
`(2) assistance is sought in a foreign country in connection with a case under this title;
`(3) a foreign proceeding and a case under this title with respect to the same debtor are taking place concurrently; or
`(4) creditors or other interested persons in a foreign country have an interest in requesting the commencement of, or participating in, a case or proceeding under this title.
`(c) This chapter does not apply to--
`(1) a proceeding concerning an entity identified by exclusion in subsection 109(b);
`(2) an individual, or to an individual and such individual's spouse, who have debts within the limits specified in section 109(e) and who are citizens of the United States or aliens lawfully admitted for permanent residence in the United States; or
`(3) an entity subject to a proceeding under the Securities Investor Protection Act of 1970 (84 Stat. 1636 et seq.), a stockbroker subject to subchapter III of chapter 7 of this title, or a commodity broker subject to subchapter IV of chapter 7 of this title.
`SUBCHAPTER I--GENERAL PROVISIONS
`Sec. 1502. Definitions
`For the purposes of this chapter, the term--
`(1) `debtor' means an entity that is the subject of a foreign proceeding;
`(2) `establishment' means any place of operations where the debtor carries out a nontransitory economic activity;
`(3) `foreign court' means a judicial or other authority competent to control or supervise a foreign proceeding;
`(4) `foreign main proceeding' means a foreign proceeding taking place in the country where the debtor has the center of its main interests;
`(5) `foreign nonmain proceeding' means a foreign proceeding, other than a foreign main proceeding, taking place in a country where the debtor has an establishment;
`(6) `trustee' includes a trustee, a debtor in possession in a case under any chapter of this title, or a debtor under chapter 9 of this title; and
`(7) `within the territorial jurisdiction of the United States' when used with reference to property of a debtor refers to tangible property located within the territory of the United States and intangible property deemed under applicable nonbankruptcy law to be located within that territory, including any property subject to attachment or garnishment that may properly be seized or garnished by an action in a Federal or State court in the United States.
`Sec. 1503. International obligations of the United States
`To the extent that this chapter conflicts with an obligation of the United States arising out of any treaty or other form of agreement to which it is a party with 1 or more other countries, the requirements of the treaty or agreement prevail.
`Sec. 1504. Commencement of ancillary case
`A case under this chapter is commenced by the filing of a petition for recognition of a foreign proceeding under section 1515.
`Sec. 1505. Authorization to act in a foreign country
`A trustee or another entity, including an examiner, may be authorized by the court to act in a foreign country on behalf of an estate created under section 541. An entity authorized to act under this section may act in any way permitted by the applicable foreign law.
`Sec. 1506. Public policy exception
`Nothing in this chapter prevents the court from refusing to take an action governed by this chapter if the action would be manifestly contrary to the public policy of the United States.
`Sec. 1507. Additional assistance
`(a) Subject to the specific limitations under other provisions of this chapter, the court, upon recognition of a foreign proceeding, may provide additional assistance to a foreign representative under this title or under other laws of the United States.
`(b) In determining whether to provide additional assistance under this title or under other laws of the United States, the court shall consider whether such additional assistance, consistent with the principles of comity, will reasonably assure--
`(1) just treatment of all holders of claims against or interests in the debtor's property;
`(2) protection of claim holders in the United States against prejudice and inconvenience in the processing of claims in such foreign proceeding;
`(3) prevention of preferential or fraudulent dispositions of property of the debtor;
`(4) distribution of proceeds of the debtor's property substantially in accordance with the order prescribed by this title; and
`(5) if appropriate, the provision of an opportunity for a fresh start for the individual that such foreign proceeding concerns.
`Sec. 1508. Interpretation
`In interpreting this chapter, the court shall consider its international origin, and the need to promote an application of this chapter that is consistent with the application of similar statutes adopted by foreign jurisdictions.
`SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE COURT
`Sec. 1509. Right of direct access
`(a) A foreign representative is entitled to commence a case under section 1504 by filing a petition for recognition under section 1515, and upon recognition, to apply directly to other Federal and State courts for appropriate relief in those courts.
`(b) Upon recognition, and subject to section 1510, a foreign representative shall have the capacity to sue and be sued, and shall be subject to the laws of the United States of general applicability.
`(c) Subject to section 1510, a foreign representative is subject to laws of general application.
`(d) Recognition under this chapter is prerequisite to the granting of comity or cooperation to a foreign representative in any Federal or State court in the United States. Any request for comity or cooperation by a foreign representative in any court shall be accompanied by a sworn statement setting forth whether recognition under section 1515 has been sought and the status of any such petition.
`(e) Upon denial of recognition under this chapter, the court may issue appropriate orders necessary to prevent an attempt to obtain comity or cooperation from courts in the United States without such recognition.
`Sec. 1510. Limited jurisdiction
`The sole fact that a foreign representative files a petition under section 1515 does not subject the foreign representative to the jurisdiction of any court in the United States for any other purpose.
`Sec. 1511. Commencement of case under section 301 or 303
`(a) Upon recognition, a foreign representative may commence--
`(1) an involuntary case under section 303; or
`(2) a voluntary case under section 301 or 302, if the foreign proceeding is a foreign main proceeding.
`(b) The petition commencing a case under subsection (a) must be accompanied by a statement describing the petition for recognition and its current status. The court where the petition for recognition has been filed must be advised of the foreign representative's intent to commence a case under subsection (a) prior to such commencement.
`Sec. 1512. Participation of a foreign representative in a case under this title
`Upon recognition of a foreign proceeding, the foreign representative in that proceeding is entitled to participate as a party in interest in a case regarding the debtor under this title.
`Sec. 1513. Access of foreign creditors to a case under this title
`(a) Foreign creditors have the same rights regarding the commencement of, and participation in, a case under this title as domestic creditors.
`(b)(1) Subsection (a) does not change or codify law in effect on the date of enactment of this chapter as to the priority of claims under section 507 or 726, except that the claim of a foreign creditor under section 507 or 726 shall not be given a lower priority than that of general unsecured claims without priority solely because the holder of such claim is a foreign creditor.
`(2)(A) Subsection (a) and paragraph (1) do not change or codify law in effect on the date of enactment of this chapter as to the allowability of foreign revenue claims or other foreign public law claims in a proceeding under this title.
`(B) Allowance and priority as to a foreign tax claim or other foreign public law claim shall be governed by any applicable tax treaty of the United States, under the conditions and circumstances specified therein.
`Sec. 1514. Notification to foreign creditors concerning a case under this title
`(a) Whenever in a case under this title notice is to be given to creditors generally or to any class or category of creditors, such notice shall also be given to the known creditors generally, or to creditors in the notified class or category, that do not have addresses in the United States. The court may order that appropriate steps be taken with a view to notifying any creditor whose address is not yet known.
`(b) Such notification to creditors with foreign addresses described in subsection (a) shall be given individually, unless the court considers that, under the circumstances, some other form of notification would be more appropriate. No letters rogatory or other similar formality is required.
`(c) When a notification of commencement of a case is to be given to foreign creditors, the notification shall--
`(1) indicate the time period for filing proofs of claim and specify the place for their filing;
`(2) indicate whether secured creditors need to file their proofs of claim; and
`(3) contain any other information required to be included in such a notification to creditors pursuant to this title and the orders of the court.
`(d) Any rule of procedure or order of the court as to notice or the filing of a claim shall provide such additional time to creditors with foreign addresses as is reasonable under the circumstances.
`SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
`Sec. 1515. Application for recognition of a foreign proceeding
`(a) A foreign representative applies to the court for recognition of the foreign proceeding in which the foreign representative has been appointed by filing a petition for recognition.
`(b) A petition for recognition shall be accompanied by--
`(1) a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative;
`(2) a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or
`(3) in the absence of evidence referred to in paragraphs (1) and (2), any other evidence acceptable to the court of the existence of the foreign proceeding and of the appointment of the foreign representative.
`(c) A petition for recognition shall also be accompanied by a statement identifying all foreign proceedings with respect to the debtor that are known to the foreign representative.
`(d) The documents referred to in paragraphs (1) and (2) of subsection (b) must be translated into English. The court may require a translation into English of additional documents.
`Sec. 1516. Presumptions concerning recognition
`(a) If the decision or certificate referred to in section 1515(b) indicates that the foreign proceeding is a foreign proceeding as defined in section 101 and that the person or body is a foreign representative as defined in section 101, the court is entitled to so presume.
`(b) The court is entitled to presume that documents submitted in support of the petition for recognition are authentic, whether or not they have been legalized.
`(c) In the absence of evidence to the contrary, the debtor's registered office, or habitual residence in the case of an individual, is presumed to be the center of the debtor's main interests.
`Sec. 1517. Order recognizing a foreign proceeding
`(a) Subject to section 1506, after notice and a hearing an order recognizing a foreign proceeding shall be entered if--
`(1) the foreign proceeding is a foreign main proceeding or foreign nonmain proceeding within the meaning of section 1502;
`(2) the foreign representative applying for recognition is a person or body as defined in section 101; and
`(3) the petition meets the requirements of section 1515.
`(b) The foreign proceeding shall be recognized--
`(1) as a foreign main proceeding if it is taking place in the country where the debtor has the center of its main interests; or
`(2) as a foreign nonmain proceeding if the debtor has an establishment within the meaning of section 1502 in the foreign country where the proceeding is pending.
`(c) A petition for recognition of a foreign proceeding shall be decided upon at the earliest possible time. Entry of an order recognizing a foreign proceeding shall constitute recognition under this chapter.
`(d) The provisions of this subchapter do not prevent modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist, but in considering such action the court shall give due weight to possible prejudice to parties that have relied upon the granting of recognition. The case under this chapter may be closed in the manner prescribed for a case under section 350.
`Sec. 1518. Subsequent information
`After the petition for recognition of the foreign proceeding is filed, the foreign representative shall file with the court promptly a notice of change of status concerning--
`(1) any substantial change in the status of the foreign proceeding or the status of the foreign representative's appointment; and
`(2) any other foreign proceeding regarding the debtor that becomes known to the foreign representative.
`Sec. 1519. Relief that may be granted upon petition for recognition of a foreign proceeding
`(a) Beginning on the date on which a petition for recognition is filed and ending on the date on which the petition is decided upon, the court may, at the request of the foreign representative, where relief is urgently needed to protect the assets of the debtor or the interests of the creditors, grant relief of a provisional nature, including--
`(1) staying execution against the debtor's assets;
`(2) entrusting the administration or realization of all or part of the debtor's assets located in the United States to the foreign representative or another person authorized by the court, including an examiner, in order to protect and preserve the value of assets that, by their nature or because of other circumstances, are perishable, susceptible to devaluation, or otherwise in jeopardy; and
`(3) any relief referred to in paragraph (3), (4), or (7) of section 1521(a).
`(b) Unless extended under section 1521(a)(6), the relief granted under this section terminates when the petition for recognition is decided upon.
`(c) It is a ground for denial of relief under this section that such relief would interfere with the administration of a foreign main proceeding.
`(d) The court may not enjoin a police or regulatory act of a governmental unit, including a criminal action or proceeding, under this section.
`(e) The standards, procedures, and limitations applicable to an injunction shall apply to relief under this section.
`Sec. 1520. Effects of recognition of a foreign main proceeding
`(a) Upon recognition of a foreign proceeding that is a foreign main proceeding--
`(1) section 362 applies with respect to the debtor and that property of the debtor that is within the territorial jurisdiction of the United States;
`(2) a transfer, an encumbrance, or any other disposition of an interest of the debtor in property within the territorial jurisdiction of the United States is restrained as and to the extent that is provided for property of an estate under sections 363, 549, and 552; and
`(3) unless the court orders otherwise, the foreign representative may operate the debtor's business and may exercise the powers of a trustee under section 549, subject to sections 363 and 552.
`(b) The scope, and the modification or termination, of the stay and restraints referred to in subsection (a) are subject to the exceptions and limitations provided in subsections (b), (c), and (d) of section 362, subsections (b) and (c) of section 363, and sections 552, 555 through 557, 559, and 560.
`(c) Subsection (a) does not affect the right to commence individual actions or proceedings in a foreign country to the extent necessary to preserve a claim against the debtor.
`(d) Subsection (a) does not affect the right of a foreign representative or an entity to file a petition commencing a case under this title or the right of any party to file claims or take other proper actions in such a case.
`Sec. 1521. Relief that may be granted upon recognition of a foreign proceeding
`(a) Upon recognition of a foreign proceeding, whether main or nonmain, where necessary to effectuate the purpose of this chapter and to protect the assets of the debtor or the interests of the creditors, the court may, at the request of the foreign representative, grant any appropriate relief, including--
`(1) staying the commencement or continuation of individual actions or individual proceedings concerning the debtor's assets, rights, obligations or liabilities to the extent the actions or proceedings have not been stayed under section 1520(a);
`(2) staying execution against the debtor's assets to the extent the execution has not been stayed under section 1520(a);
`(3) suspending the right to transfer, encumber or otherwise dispose of any assets of the debtor to the extent that right has not been suspended under section 1520(a);
`(4) providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor's assets, affairs, rights, obligations or liabilities;
`(5) entrusting the administration or realization of all or part of the debtor's assets within the territorial jurisdiction of the United States to the foreign representative or another person, including an examiner, authorized by the court;
`(6) extending relief granted under section 1519(a); and
`(7) granting any additional relief that may be available to a trustee, except for relief available under sections 522, 544, 545, 547, 548, 550, and 724(a).
`(b) Upon recognition of a foreign proceeding, whether main or nonmain, the court may, at the request of the foreign representative, entrust the distribution of all or part of the debtor's assets located in the United States to the foreign representative or another person, including an examiner, authorized by the court, if the court is satisfied that the interests of creditors in the United States are sufficiently protected.
`(c) In granting relief under this section to a representative of a foreign nonmain proceeding, the court must be satisfied that the relief relates to assets that, under the law of the United States, should be administered in the foreign nonmain proceeding or concerns information required in that proceeding.
`(d) The court may not enjoin a police or regulatory act of a governmental unit, including a criminal action or proceeding, under this section.
`(e) The standards, procedures, and limitations applicable to an injunction shall apply to relief under paragraphs (1), (2), (3), and (6) of subsection (a).
`Sec. 1522. Protection of creditors and other interested persons
`(a) The court may grant relief under section 1519 or 1521, or may modify or terminate relief under subsection (c), only if the interests of the creditors and other interested entities, including the debtor, are sufficiently protected.
`(b) The court may subject relief granted under section 1519 or 1521, or the operation of the debtor's business under section 1520(a)(2), to conditions that the court considers to be appropriate, including the giving of security or the filing of a bond.
`(c) The court may, at the request of the foreign representative or an entity affected by relief granted under section 1519 or 1521, or at its own motion, modify or terminate the relief referred to in subsection (b).
`(d) Section 1104(d) shall apply to the appointment of an examiner under this chapter. Any examiner shall comply with the qualification requirements imposed on a trustee by section 322.
`Sec. 1523. Actions to avoid acts detrimental to creditors
`(a) Upon recognition of a foreign proceeding, the foreign representative has standing in a case concerning the debtor pending under another chapter of this title to initiate actions under sections 522, 544, 545, 547, 548, 550, and 724(a).
`(b) In any case in which the foreign proceeding is a foreign nonmain proceeding, the court must be satisfied that an action under subsection (a) relates to assets that, under United States law, should be administered in the foreign nonmain proceeding.
`Sec. 1524. Intervention by a foreign representative
`Upon recognition of a foreign proceeding, the foreign representative may intervene in any proceedings in a State or Federal court in the United States in which the debtor is a party.
`SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN REPRESENTATIVES
`Sec. 1525. Cooperation and direct communication between the court and foreign courts or foreign representatives
`(a) Consistent with section 1501, the court shall cooperate to the maximum extent possible with foreign courts or foreign representatives, either directly or through the trustee.
`(b) The court is entitled to communicate directly with, or to request information or assistance directly from, foreign courts or foreign representatives, subject to the rights of parties in interest to notice and participation.
`Sec. 1526. Cooperation and direct communication between the trustee and foreign courts or foreign representatives
`(a) Consistent with section 1501, the trustee or other person, including an examiner, authorized by the court, shall, subject to the supervision of the court, cooperate to the maximum extent possible with foreign courts or foreign representatives.
`(b) The trustee or other person, including an examiner, authorized by the court is entitled, subject to the supervision of the court, to communicate directly with foreign courts or foreign representatives.
`Sec. 1527. Forms of cooperation
`Cooperation referred to in sections 1525 and 1526 may be implemented by any appropriate means, including--
`(1) appointment of a person or body, including an examiner, to act at the direction of the court;
`(2) communication of information by any means considered appropriate by the court;
`(3) coordination of the administration and supervision of the debtor's assets and affairs;
`(4) approval or implementation of agreements concerning the coordination of proceedings; and
`(5) coordination of concurrent proceedings regarding the same debtor.
`SUBCHAPTER V--CONCURRENT PROCEEDINGS
`Sec. 1528. Commencement of a case under this title after recognition of a foreign main proceeding
`After recognition of a foreign main proceeding, a case under another chapter of this title may be commenced only if the debtor has assets in the United States. The effects of such case shall be restricted to the assets of the debtor that are within the territorial jurisdiction of the United States and, to the extent necessary to implement cooperation and coordination under sections 1525, 1526, and 1527, to other assets of the debtor that are within the jurisdiction of the court under sections 541(a), and 1334(e) of title 28, to the extent that such other assets are not subject to the jurisdiction and control of a foreign proceeding that has been recognized under this chapter.
`Sec. 1529. Coordination of a case under this title and a foreign proceeding
`In any case in which a foreign proceeding and a case under another chapter of this title are taking place concurrently regarding the same debtor, the court shall seek cooperation and coordination under sections 1525, 1526, and 1527, and the following shall apply:
`(1) If the case in the United States is taking place at the time the petition for recognition of the foreign proceeding is filed--
`(A) any relief granted under sections 1519 or 1521 must be consistent with the relief granted in the case in the United States; and
`(B) even if the foreign proceeding is recognized as a foreign main proceeding, section 1520 does not apply.
`(2) If a case in the United States under this title commences after recognition, or after the filing of the petition for recognition, of the foreign proceeding--
`(A) any relief in effect under sections 1519 or 1521 shall be reviewed by the court and shall be modified or terminated if inconsistent with the case in the United States; and
`(B) if the foreign proceeding is a foreign main proceeding, the stay and suspension referred to in section 1520(a) shall be modified or terminated if inconsistent with the relief granted in the case in the United States.
`(3) In granting, extending, or modifying relief granted to a representative of a foreign nonmain proceeding, the court must be satisfied that the relief relates to assets that, under the law of the United States, should be administered in the foreign nonmain proceeding or concerns information required in that proceeding.
`(4) In achieving cooperation and coordination under sections 1528 and 1529, the court may grant any of the relief authorized under section 305.
`Sec. 1530. Coordination of more than 1 foreign proceeding
`In matters referred to in section 1501, with respect to more than 1 foreign proceeding regarding the debtor, the court shall seek cooperation and coordination under sections 1525, 1526, and 1527, and the following shall apply:
`(1) Any relief granted under section 1519 or 1521 to a representative of a foreign nonmain proceeding after recognition of a foreign main proceeding must be consistent with the foreign main proceeding.
`(2) If a foreign main proceeding is recognized after recognition, or after the filing of a petition for recognition, of a foreign nonmain proceeding, any relief in effect under section 1519 or 1521 shall be reviewed by the court and shall be modified or terminated if inconsistent with the foreign main proceeding.
`(3) If, after recognition of a foreign nonmain proceeding, another foreign nonmain proceeding is recognized, the court shall grant, modify, or terminate relief for the purpose of facilitating coordination of the proceedings.
`Sec. 1531. Presumption of insolvency based on recognition of a foreign main proceeding
`In the absence of evidence to the contrary, recognition of a foreign main proceeding is for the purpose of commencing a proceeding under section 303, proof that the debtor is generally not paying its debts as such debts become due.
`Sec. 1532. Rule of payment in concurrent proceedings
`Without prejudice to secured claims or rights in rem, a creditor who has received payment with respect to its claim in a foreign proceeding pursuant to a law relating to insolvency may not receive a payment for the same claim in a case under any other chapter of this title regarding the debtor, so long as the payment to other creditors of the same class is proportionately less than the payment the creditor has already received.'.
(b) CLERICAL AMENDMENT- The table of chapters for title 11, United States Code, is amended by inserting after the item relating to chapter 13 the following:
1501'.
SEC. 802. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11, UNITED STATES CODE.
(a) APPLICABILITY OF CHAPTERS- Section 103 of title 11, United States Code, is amended--
(1) in subsection (a), by inserting before the period the following: `, and this chapter, sections 307, 304, 555 through 557, 559, and 560 apply in a case under chapter 15'; and
(2) by adding at the end the following:
`(j) Chapter 15 applies only in a case under such chapter, except that--
`(1) sections 1513 and 1514 apply in all cases under this title; and
`(2) section 1505 applies to trustees and to any other entity (including an examiner) authorized by the court under chapter 7, 11, or 12, to debtors in possession under chapter 11 or 12, and to debtors under chapter 9 who are authorized to act under section 1505.'.
(b) DEFINITIONS- Paragraphs (23) and (24) of section 101 of title 11, United States Code, are amended to read as follows:
`(23) `foreign proceeding' means a collective judicial or administrative proceeding in a foreign country, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation;
`(24) `foreign representative' means a person or body, including a person or body appointed on an interim basis, authorized in a foreign proceeding to administer the reorganization or the liquidation of the debtor's assets or affairs or to act as a representative of the foreign proceeding;'.
(c) AMENDMENTS TO TITLE 28, UNITED STATES CODE-
(1) PROCEDURES- Section 157(b)(2) of title 28, United States Code, is amended--
(A) in subparagraph (N), by striking `and' at the end;
(B) in subparagraph (O), by striking the period at the end and inserting `; and'; and
(C) by adding at the end the following:
`(P) recognition of foreign proceedings and other matters under chapter 15 of title 11.'.
(2) BANKRUPTCY CASES AND PROCEEDINGS- Section 1334(c)(1) of title 28, United States Code, is amended by striking `Nothing in' and inserting `Except with respect to a case under chapter 15 of title 11, nothing in'.
(3) DUTIES OF TRUSTEES- Section 586(a)(3) of title 28, United States Code, is amended by inserting `15,' after `chapter'.
SEC. 803. CLAIMS RELATING TO INSURANCE DEPOSITS IN CASES ANCILLARY TO FOREIGN PROCEEDINGS.
Section 304 of title 11, United States Code, is amended to read as follows:
`Sec. 304. Cases ancillary to foreign proceedings
`(a) For purposes of this section--
`(1) the term `domestic insurance company' means a domestic insurance company, as such term is used in section 109(b)(2);
`(2) the term `foreign insurance company' means a foreign insurance company, as such term is used in section 109(b)(3);
`(3) the term `United States claimant' means a beneficiary of any deposit referred to in subsection (b) or any multibeneficiary trust referred to in subsection (b);
`(4) the term `United States creditor' means, with respect to a foreign insurance company--
`(i) a United States claimant; or
`(ii) any business entity that operates in the United States and that is a creditor; and
`(5) the term `United States policyholder' means a holder of an insurance policy issued in the United States.
`(b) The court may not grant relief under chapter 15 of this title with respect to any deposit, escrow, trust fund, or other security required or permitted under any applicable State insurance law or regulation for the benefit of claim holders in the United States.'.
TITLE IX--FINANCIAL CONTRACT PROVISIONS
SEC. 901. BANKRUPTCY CODE AMENDMENTS.
(a) DEFINITIONS OF FORWARD CONTRACT, REPURCHASE AGREEMENT, SECURITIES CLEARING AGENCY, SWAP AGREEMENT, COMMODITY CONTRACT, AND SECURITIES CONTRACT- Title 11, United States Code, is amended--
(i) by striking `means a contract' and inserting `means--
(ii) by striking `, or any combination thereof or option thereon;' and inserting `, or any other similar agreement;'; and
(iii) by adding at the end the following:
`(B) a combination of agreements or transactions referred to in subparagraphs (A) and (C);
`(C) an option to enter into an agreement or transaction referred to in subparagraph (A) or (B);
`(D) a master netting agreement that provides for an agreement or transaction referred to in subparagraph (A), (B), or (C), together with all supplements to such master netting agreement, without regard to whether such master netting agreement provides for an agreement or transaction that is not a forward contract under this paragraph, except that such master netting agreement shall be considered to be a forward contract under this paragraph only with respect to each agreement or transaction under such master netting agreement that is referred to in subparagraph (A), (B) or (C); or
`(E) a security agreement or arrangement, or other credit enhancement, directly pertaining to a contract, option, agreement, or transaction referred to in subparagraph (A), (B), (C), or (D), but not to exceed the actual value of such contract, option, agreement, or transaction on the date of the filing of the petition;';
(B) by striking paragraph (47) and inserting the following:
`(47) `repurchase agreement' and `reverse repurchase agreement'--
`(i) an agreement, including related terms, which provides for the transfer of--
`(I) a certificate of deposit, mortgage related security (as defined in section 3 of the Securities Exchange Act of 1934), mortgage loan, interest in a mortgage related security or mortgage loan, eligible bankers' acceptance, or qualified foreign government security (defined for purposes of this paragraph to mean a security that is a direct obligation of, or that is fully guaranteed by, the central government of a member of the Organization for Economic Cooperation and Development); or
`(II) a security that is a direct obligation of, or that is fully guaranteed by, the United States or an agency of the United States against the transfer of funds by the transferee of such certificate of deposit, eligible bankers' acceptance, security, loan, or interest;
with a simultaneous agreement by such transferee to transfer to the transferor thereof a certificate of deposit, eligible bankers' acceptance, security, loan, or interest of the kind described in subclause (I) or (II), at a date certain that is not later than 1 year after the date of the transferor's transfer or on demand, against the transfer of funds;
`(ii) a combination of agreements or transactions referred to in clauses (i) and (iii);
`(iii) an option to enter into an agreement or transaction referred to in clause (i) or (ii); or
`(iv) a master netting agreement that provides for an agreement or transaction referred to in clause (i), (ii), or (iii), together with all supplements to such master netting agreement, without regard to whether such master netting agreement provides for an agreement or transaction that is not a repurchase agreement under this subparagraph, except that such master netting agreement shall be considered to be a repurchase agreement under this subparagraph only with respect to each agreement or transaction under such master netting agreement that is referred to in clause (i), (ii), or (iii); or
`(v) a security agreement or arrangement, or other credit enhancement, directly pertaining to a contract referred to in clause (i), (ii), (iii), or (iv), but not to exceed the actual value of such contract on the date of the filing of the petition; and
`(B) do not include a repurchase obligation under a participation in a commercial mortgage loan;';
(C) in paragraph (48) by inserting `, or exempt from such registration under such section pursuant to an order of the Securities and Exchange Commission' after `1934'; and
(D) by striking paragraph (53B) and inserting the following:
`(53B) `swap agreement'--
`(i) an agreement, including the terms and conditions incorporated by reference in such agreement, that is--
`(I) an interest rate swap, option, future, or forward agreement, including a rate floor, rate cap, rate collar, cross-currency rate swap, and basis swap;
`(II) a spot, same day-tomorrow, tomorrow-next, forward, or other foreign exchange or precious metals agreement;
`(III) a currency swap, option, future, or forward agreement;
`(IV) an equity index or an equity swap, option, future, or forward agreement;
`(V) a debt index or a debt swap, option, future, or forward agreement;
`(VI) a credit spread or a credit swap, option, future, or forward agreement; or
`(VII) a commodity index or a commodity swap, option, future, or forward agreement;
`(ii) an agreement or transaction that is similar to an agreement or transaction referred to in clause (i) that--
`(I) is currently, or in the future becomes, regularly entered into in the swap market (including terms and conditions incorporated by reference therein); and
`(II) is a forward, swap, future, or option on a rate, currency, commodity, equity security, or other equity instrument, on a debt security or other debt instrument, or on an economic index or measure of economic risk or value;
`(iii) a combination of agreements or transactions referred to in clauses (i) and (ii);
`(iv) an option to enter into an agreement or transaction referred to in this subparagraph;
`(v) a master netting agreement that provides for an agreement or transaction referred to in clause (i), (ii), (iii), or (iv), together with all supplements to such master netting agreement and without regard to whether such master netting agreement contains an agreement or transaction described in any such clause, but only with respect to each agreement or transaction referred to in any such clause that is under such master netting agreement; except that
`(B) the definition under subparagraph (A) is applicable for purposes of this title only, and shall not be construed or applied so as to challenge or affect the characterization, definition, or treatment of any swap agreement under any other statute, regulation, or rule, including the Securities Act of 1933, the Securities Exchange Act of 1934, the Public Utility Holding Company Act of 1935, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Securities Investor Protection Act of 1970, the Commodity Exchange Act, and the regulations prescribed by the Securities and Exchange Commission or the Commodity Futures Trading Commission.';
(2) in section 741, by striking paragraph (7) and inserting the following:
`(7) `securities contract'--
`(i) a contract for the purchase, sale, or loan of a security, a mortgage loan or an interest in a mortgage loan, a group or index of securities, or mortgage loans or interests therein (including an interest therein or based on the value thereof), or option on any of the foregoing, including an option to purchase or sell any of the foregoing;
`(ii) an option entered into on a national securities exchange relating to foreign currencies;
`(iii) the guarantee by or to a securities clearing agency of a settlement of cash, securities, mortgage loans or interests therein, group or index of securities, or mortgage loans or interests therein (including any interest therein or based on the value thereof), or option on any of the foregoing, including an option to purchase or sell any of the foregoing;
`(v) any other agreement or transaction that is similar to an agreement or transaction referred to in this subparagraph;
`(vi) a combination of the agreements or transactions referred to in this subparagraph;
`(vii) an option to enter into an agreement or transaction referred to in this subparagraph;
`(viii) a master netting agreement that provides for an agreement or transaction referred to in clause (i), (ii), (iii), (iv), (v), (vi), or (vii), together with all supplements to such master netting agreement, without regard to whether such master netting agreement provides for an agreement or transaction that is not a securities contract under this subparagraph, except that such master netting agreement shall be considered to be a securities contract under this subparagraph only with respect to each agreement or transaction under such master netting agreement that is referred to in clause (i), (ii), (iii), (iv), (v), (vi), or (vii); or
`(ix) a security agreement or arrangement, or other credit enhancement, directly pertaining to a contract referred to in this subparagraph, but not to exceed the actual value of such contract on the date of the filing of the petition; and
`(B) does not include a purchase, sale, or repurchase obligation under a participation in a commercial mortgage loan;'; and
(A) by striking `or' at the end of subparagraph (D); and
(B) by adding at the end the following:
`(F) any other agreement or transaction that is similar to an agreement or transaction referred to in this paragraph;
`(G) a combination of the agreements or transactions referred to in this paragraph;
`(H) an option to enter into an agreement or transaction referred to in this paragraph;
`(I) a master netting agreement that provides for an agreement or transaction referred to in subparagraph (A), (B), (C), (D), (E), (F), (G), or (H), together with all supplements to such master netting agreement, without regard to whether such master netting agreement provides for an agreement or transaction that is not a commodity contract under this paragraph, except that such master netting agreement shall be considered to be a commodity contract under this paragraph only with respect to each agreement or transaction under such master netting agreement that is referred to in subparagraph (A), (B), (C), (D), (E), (F), (G), or (H); or
`(J) a security agreement or arrangement, or other credit enhancement, directly pertaining to a contract referred to in this paragraph, but not to exceed the actual value of such contract on the date of the filing of the petition.'.
(b) DEFINITIONS OF FINANCIAL INSTITUTION, FINANCIAL PARTICIPANT, AND FORWARD CONTRACT MERCHANT- Section 101 of title 11, United States Code, as amended by section 802(b) of this Act, is amended--
(1) by striking paragraph (22) and inserting the following:
`(22) `financial institution' means--
`(A)(i) a Federal reserve bank, or an entity that is a commercial or savings bank, industrial savings bank, savings and loan association, trust company, or receiver or conservator for such entity; and
`(ii) if such Federal reserve bank, receiver, or conservator or entity is acting as agent or custodian for a customer in connection with a securities contract, as defined in section 741, such customer; or
`(B) in connection with a securities contract, as defined in section 741 of this title, an investment company registered under the Investment Company Act of 1940;';
(2) by inserting after paragraph (22) the following:
`(22A) `financial participant' means an entity that is a party to a securities contract, commodity contract or forward contract, or on the date of the filing of the petition, has a commodity contract (as defined in section 761) with the debtor or any other entity (other than an affiliate) of a total gross dollar value of not less than $1,000,000,000 in notional or actual principal amount outstanding on any day during the previous 15-month period, or has gross mark-to-market positions of not less than $100,000,000 (aggregated across counterparties) in any such agreement or transaction with the debtor or any other entity (other than an affiliate) on any day during the previous 15-month period;'; and
(3) by striking paragraph (26) and inserting the following:
`(26) `forward contract merchant' means a Federal reserve bank, or an entity, the business of which consists in whole or in part of entering into forward contracts as or with merchants or in a commodity, as defined or in section 761, or any similar good, article, service, right, or interest that is presently or in the future becomes the subject of dealing or in the forward contract trade;'.
(c) DEFINITION OF MASTER NETTING AGREEMENT AND MASTER NETTING AGREEMENT PARTICIPANT- Section 101 of title 11, United States Code, as amended by subsection (b) of this section, is amended by inserting after paragraph (38) the following new paragraphs:
`(38A) the term `master netting agreement'--
`(A) means an agreement providing for the exercise of rights, including rights of netting, setoff, liquidation, termination, acceleration, or closeout, under or in connection with 1 or more contracts that are described in any 1 or more of paragraphs (1) through (5) of section 561(a), or any security agreement or arrangement or other credit enhancement related to 1 or more of the foregoing; except that
`(B) if a master netting agreement contains provisions relating to agreements or transactions that are not contracts described in paragraphs (1) through (5) of section 561(a), the master netting agreement shall be deemed to be a master netting agreement only with respect to those agreements or transactions that are described in any 1 or more of the paragraphs (1) through (5) of section 561(a);
`(38B) the term `master netting agreement participant' means an entity that, at any time before the filing of the petition, is a party to an outstanding master netting agreement with the debtor;'.
(d) SWAP AGREEMENTS, SECURITIES CONTRACTS, COMMODITY CONTRACTS, FORWARD CONTRACTS, REPURCHASE AGREEMENTS, AND MASTER NETTING AGREEMENTS UNDER THE AUTOMATIC STAY-
(1) IN GENERAL- Section 362(b) of title 11, United States Code, as amended by section 718 of this Act, is amended--
(A) in paragraph (6), by inserting `, pledged to, and under the control of,' after `held by';
(B) in paragraph (7), by inserting `, pledged to, and under the control of,' after `held by';
(C) by striking paragraph (17) and inserting the following:
`(17) under subsection (a), of the setoff by a swap participant of a mutual debt and claim under or in connection with a swap agreement that constitutes the setoff of a claim against the debtor for a payment or transfer due from the debtor under or in connection with a swap agreement against a payment due to the debtor from the swap participant under or in connection with a swap agreement or against cash, securities, or other property held by, pledged to, and under the control of, or due from such swap participant to guarantee, secure, or settle a swap agreement;';
(D) in paragraph (26), by striking `or' at the end;
(E) in paragraph (27), by striking the period at the end and inserting `; or'; and
(F) by inserting after paragraph (27) the following:
`(28) under subsection (a), of the setoff by a master netting agreement participant of a mutual debt and claim under or in connection with 1 or more master netting agreements or any contract or agreement subject to such agreements that constitutes the setoff of a claim against the debtor for any payment or other transfer of property due from the debtor under or in connection with such agreements or any contract or agreement subject to such agreements against any payment due to the debtor from such master netting agreement participant under or in connection with such agreements or any contract or agreement subject to such agreements or against cash, securities, or other property held by, pledged or and under the control of, or due from such master netting agreement participant to margin, guarantee, secure, or settle such agreements or any contract or agreement subject to such agreements, to the extent such participant is eligible to exercise such offset rights under paragraph (6), (7), or (17) for each individual contract covered by the master netting agreement in issue.'.
(2) LIMITATION- Section 362 of title 11, United States Code, as amended by section 441(2) of this Act, is amended by adding at the end the following:
`(l) LIMITATION- The exercise of rights not subject to the stay arising under subsection (a) pursuant to paragraph (6), (7), or (17) of subsection (b) shall not be stayed by an order of a court or administrative agency in any proceeding under this title.'.
(e) LIMITATION OF AVOIDANCE POWERS UNDER MASTER NETTING AGREEMENT- Section 546 of title 11, United States Code, is amended--
(1) in subsection (g) (as added by section 103 of Public Law 101-311 (104 Stat. 267 et seq.))--
(A) by striking `under a swap agreement'; and
(B) by striking `in connection with a swap agreement' and inserting `under or in connection with any swap agreement'; and
(2) by inserting before subsection (i) (as redesignated by section 407 of this Act) the following new subsection:
`(h) Notwithstanding sections 544, 545, 547, 548(a)(2)(B), and 548(b), the trustee may not avoid a transfer made by or to a master netting agreement participant under or in connection with any master netting agreement or any individual contract covered thereby that is made before the commencement of the case, and except to the extent that the trustee could otherwise avoid such a transfer made under an individual contract covered by such master netting agreement (except under section 548(a)(1)(A)).'.
(f) FRAUDULENT TRANSFERS OF MASTER NETTING AGREEMENTS- Section 548(d)(2) of title 11, United States Code, is amended--
(1) in subparagraph (C), by striking `and';
(2) in subparagraph (D), by striking the period at the end and inserting `; and'; and
(3) by adding at the end the following new subparagraph:
`(E) a master netting agreement participant that receives a transfer in connection with a master netting agreement or any individual contract covered thereby takes for value to the extent of such transfer, except, with respect to a transfer under any individual contract covered thereby, to the extent that such master netting agreement participant otherwise did not take (or is otherwise not deemed to have taken) such transfer for value.'.
(g) TERMINATION OR ACCELERATION OF SECURITIES CONTRACTS- Section 555 of title 11, United States Code, is amended--
(1) by striking the section heading and inserting the following:
`Sec. 555. Contractual right to liquidate, terminate, or accelerate a securities contract';
(2) in the first sentence, by striking `liquidation' and inserting `liquidation, termination, or acceleration'.
(h) TERMINATION OR ACCELERATION OF COMMODITIES OR FORWARD CONTRACTS- Section 556 of title 11, United States Code, is amended--
(1) by striking the section heading and inserting the following:
`Sec. 556. Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract';
(2) in the first sentence, by striking `liquidation' and inserting `liquidation, termination, or acceleration'.
(i) TERMINATION OR ACCELERATION OF REPURCHASE AGREEMENTS- Section 559 of title 11, United States Code, is amended--
(1) by striking the section heading and inserting the following:
`Sec. 559. Contractual right to liquidate, terminate, or accelerate a repurchase agreement';
(2) in the first sentence, by striking `liquidation' and inserting `liquidation, termination, or acceleration'.
(j) LIQUIDATION, TERMINATION, OR ACCELERATION OF SWAP AGREEMENTS- Section 560 of title 11, United States Code, is amended--
(1) by striking the section heading and inserting following:
`Sec. 560. Contractual right to liquidate, terminate, or accelerate a swap agreement';
(2) in the first sentence, by striking `termination of a swap agreement' and inserting `liquidation, termination, or acceleration of a swap agreement'; and
(3) by striking `in connection with any swap agreement' and inserting `in connection with the termination, liquidation, or acceleration of a swap agreement'.
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR OFFSET UNDER A MASTER NETTING AGREEMENT AND ACROSS CONTRACTS- Title 11, United States Code, is amended by inserting after section 560 the following:
`Sec. 561. Contractual right to terminate, liquidate, accelerate, or offset under a master netting agreement and across contracts
`(a) Subject to subsection (b), the exercise of any contractual right, because of a condition of the kind specified in section 365(e)(1), to cause the termination, liquidation, or acceleration of or to offset or net termination values, payment amounts or other transfer obligations arising under or in connection with 1 or more (or the termination, liquidation, or acceleration of 1 or more)--
`(1) securities contracts, as defined in section 741(7);
`(2) commodity contracts, as defined in section 761(4);
`(4) repurchase agreements;
`(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by operation of any provision of this title or by any order of a court or administrative agency in any proceeding under this title.
`(b)(1) A party may exercise a contractual right described in subsection (a) to terminate, liquidate, or accelerate only to the extent that such party could exercise such a right under section 555, 556, 559, or 560 for each individual contract covered by the master netting agreement in issue.
`(2) If a debtor is a commodity broker subject to subchapter IV of chapter 7--
`(A) a party may not net or offset an obligation to the debtor arising under, or in connection with, a commodity contract against any claim arising under, or in connection with, other instruments, contracts, or agreements listed in subsection (a), except to the extent that the party has positive net equity in the commodity accounts at the debtor, as calculated under such subchapter IV; and
`(B) another commodity broker may not net or offset an obligation to the debtor arising under, or in connection with, a commodity contract entered into or held on behalf of a customer of the debtor against any claim arising under, or in connection with, other instruments, contracts, or agreements referred to in subsection (a).
`(c) As used in this section, the term `contractual right' includes a right set forth in a rule or bylaw of a national securities exchange, a national securities association, or a securities clearing agency, a right set forth in a bylaw of a clearing organization or contract market or in a resolution of the governing board thereof, and a right, whether or not evidenced in writing, arising under common law, under law merchant, or by reason of normal business practice.'.
(l) ANCILLARY PROCEEDINGS- Section 304 of title 11, United States Code, is amended by adding at the end the following:
`(d) Any provisions of this title relating to securities contracts, commodity contracts, forward contracts, repurchase agreements, swap agreements, or master netting agreements shall apply in a case ancillary to a foreign proceeding under this section or any other section of this title, so that enforcement of contractual provisions of such contracts and agreements in accordance with their terms--
`(1) shall not be stayed or otherwise limited by--
`(A) operation of any provision of this title; or
`(B) order of a court in any case under this title;
`(2) shall limit avoidance powers to the same extent as in a proceeding under chapter 7 or 11; and
`(3) shall not be limited based on the presence or absence of assets of the debtor in the United States.'.
(m) COMMODITY BROKER LIQUIDATIONS- Title 11, United States Code, is amended by inserting after section 766 the following:
`Sec. 767. Commodity broker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, securities clearing agencies, swap participants, repo participants, and master netting agreement participants
`Notwithstanding any other provision of this title, the exercise of rights by a forward contract merchant, commodity broker, stockbroker, financial institution, securities clearing agency, swap participant, repo participant, or master netting agreement participant under this title shall not affect the priority of any unsecured claim it may have after the exercise of such rights.'.
(n) STOCKBROKER LIQUIDATIONS- Title 11, United States Code, is amended by inserting after section 752 the following:
`Sec. 753. Stockbroker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, securities clearing agencies, swap participants, repo participants, and master netting agreement participants
`Notwithstanding any other provision of this title, the exercise of rights by a forward contract merchant, commodity broker, stockbroker, financial institution, securities clearing agency, swap participant, repo participant, financial participant, or master netting agreement participant under this title shall not affect the priority of any unsecured claim it may have after the exercise of such rights.'.
(o) SETOFF- Section 553 of title 11, United States Code, is amended--
(1) in subsection (a)(3)(C), by inserting `(except for a setoff of a kind described in section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(28), 555, 556, 559, or 560)' before the period; and
(2) in subsection (b)(1), by striking `362(b)(14),' and inserting `362(b)(17), 362(b)(28), 555, 556, 559, 560,'.
(p) SECURITIES CONTRACTS, COMMODITY CONTRACTS, AND FORWARD CONTRACTS- Title 11, United States Code, is amended--
(1) in section 362(b)(6), by striking `financial institutions,' each place such term appears and inserting `financial institution, financial participant';
(2) in section 546(e), by inserting `financial participant' after `financial institution,';
(3) in section 548(d)(2)(B), by inserting `financial participant' after `financial institution,';
(A) by inserting `financial participant' after `financial institution,'; and
(B) by inserting before the period `, a right set forth in a bylaw of a clearing organization or contract market or in a resolution of the governing board thereof, and a right, whether or not in writing, arising under common law, under law merchant, or by reason of normal business practice'; and
(5) in section 556, by inserting `, financial participant' after `commodity broker'.
(q) CONFORMING AMENDMENTS- Title 11, United States Code, is amended--
(1) in the table of sections for chapter 5--
(A) by striking the items relating to sections 555 and 556 and inserting the following:
`555. Contractual right to liquidate, terminate, or accelerate a securities contract.
`556. Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract.';
(B) by striking the items relating to sections 559 and 560 and inserting the following:
`559. Contractual right to liquidate, terminate, or accelerate a repurchase agreement.
`560. Contractual right to liquidate, terminate, or accelerate a swap agreement.';
(C) by adding after the item relating to section 560 the following:
`561. Contractual right to terminate, liquidate, accelerate, or offset under a master netting agreement and across contracts.';
(2) in the table of sections for chapter 7--
(A) by inserting after the item relating to section 766 the following:
`767. Commodity broker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, securities clearing agencies, swap participants, repo participants, and master netting agreement participants.';
(B) by inserting after the item relating to section 752 the following:
`753. Stockbroker liquidation and forward contract merchants, commodity brokers, stockbrokers, financial institutions, securities clearing agencies, swap participants, repo participants, and master netting agreement participants.'.
SEC. 902. DAMAGE MEASURE.
(a) IN GENERAL- Title 11, United States Code, is amended--
(1) by inserting after section 561 the following:
`Sec. 562. Damage measure in connection with swap agreements, securities contracts, forward contracts, commodity contracts, repurchase agreements, or master netting agreements
`If the trustee rejects a swap agreement, securities contract (as defined in section 741), forward contract, commodity contract (as defined in section 761) repurchase agreement, or master netting agreement under section 365(a), or if a forward contract merchant, stockbroker, financial institution, securities clearing agency, repo participant, financial participant, master netting agreement participant, or swap participant liquidates, terminates, or accelerates such contract or agreement, damages shall be measured as of the earlier of--
`(1) the date of such rejection; or
`(2) the date of such liquidation, termination, or acceleration.'; and
(2) in the table of sections for chapter 5 by inserting after the item relating to section 561 the following:
`562. Damage measure in connection with swap agreements, securities contracts, forward contracts, commodity contracts, repurchase agreements, or master netting agreements.'.
(b) CLAIMS ARISING FROM REJECTION- Section 502(g) of title 11, United States Code, is amended--
(1) by inserting `(1)' after `(g)'; and
(2) by adding at the end the following:
`(2) A claim for damages calculated in accordance with section 561 shall be allowed under subsection (a), (b), or (c) of this section, or disallowed under subsection (d) or (e) of this section, as if such claim had arisen before the date of the filing of the petition.'.
SEC. 903. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, is amended--
(1) in subsection (b), by striking `or' at the end of paragraph (4);
(2) by redesignating paragraph (5) of subsection (b) as paragraph (6);
(3) by inserting after paragraph (4) of subsection (b) the following new paragraph:
`(5) any eligible asset (or proceeds thereof), to the extent that such eligible asset was transferred by the debtor, before the date of commencement of the case, to an eligible entity in connection with an asset-backed securitization, except to the extent that such asset (or proceeds or value thereof) may be recovered by the trustee under section 550 by virtue of avoidance under section 548(a); or'; and
(4) by adding at the end the following:
`(e) For purposes of this section, the following definitions shall apply:
`(1) The term `asset-backed securitization' means a transaction in which eligible assets transferred to an eligible entity are used as the source of payment on securities, the most senior of which are rated investment grade by 1 or more nationally recognized securities rating organizations, issued by an issuer.
`(2) The term `eligible asset' means--
`(A) financial assets (including interests therein and proceeds thereof), either fixed or revolving, including residential and commercial mortgage loans, consumer receivables, trade receivables, and lease receivables, that, by their terms, convert into cash within a finite time period, plus any rights or other assets designed to assure the servicing or timely distribution of proceeds to security holders;
`(3) The term `eligible entity' means--
`(B) a trust, corporation, partnership, or other entity engaged exclusively in the business of acquiring and transferring eligible assets directly or indirectly to an issuer and taking actions ancillary thereto.
`(4) The term `issuer' means a trust, corporation, partnership, or other entity engaged exclusively in the business of acquiring and holding eligible assets, issuing securities backed by eligible assets, and taking actions ancillary thereto.
`(5) The term `transferred' means the debtor, under a written agreement, represented and warranted that eligible assets were sold, contributed, or otherwise conveyed with the intention of removing them from the estate of the debtor pursuant to subsection (b)(5), irrespective, without limitation of--
`(A) whether the debtor directly or indirectly obtained or held an interest in the issuer or in any securities issued by the issuer;
`(B) whether the debtor had an obligation to repurchase or to service or supervise the servicing of all or any portion of such eligible assets; or
`(C) the characterization of such sale, contribution, or other conveyance for tax, accounting, regulatory reporting, or other purposes.'.
SEC. 904. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) EFFECTIVE DATE- This title shall take effect on the date of enactment of this Act.
(b) APPLICATION OF AMENDMENTS- The amendments made by this title shall apply with respect to cases commenced or appointments made under any Federal or State law after the date of enactment of this Act, but shall not apply with respect to cases commenced or appointments made under any Federal or State law before the date of enactment of this Act.
TITLE X--PROTECTION OF FAMILY FARMERS AND FAMILY FISHERMEN
SEC. 1001. REENACTMENT OF CHAPTER 12.
(1) IN GENERAL- Chapter 12 of title 11, United States Code, as reenacted by section 149 of division C of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999 (Public Law 105-277), and amended by this Act, is reenacted.
(2) EFFECTIVE DATE- Subsection (a) shall take effect on October 1, 1999.
(b) CONFORMING AMENDMENT- Section 302 of the Bankruptcy, Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is amended by striking subsection (f).
SEC. 1002. DEBT LIMIT INCREASE.
Section 104(b) of title 11, United States Code, is amended by adding at the end the following:
`(4) The dollar amount in section 101(18) shall be adjusted at the same times and in the same manner as the dollar amounts in paragraph (1) of this subsection, beginning with the adjustment to be made on April 1, 2001.'.
SEC. 1003. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND SPOUSE RECEIVE OVER 50 PERCENT OF INCOME FROM FARMING OPERATION IN YEAR PRIOR TO BANKRUPTCY.
Section 101(18)(A) of title 11, United States Code, is amended by striking `the taxable year preceding the taxable year' and inserting `at least 1 of the 3 calendar years preceding the year'.
SEC. 1004. CERTAIN CLAIMS OWED TO GOVERNMENTAL UNITS.
(a) CONTENTS OF PLAN- Section 1222(a)(2) of title 11, United States Code, is amended to read as follows:
`(2) provide for the full payment, in deferred cash payments, of all claims entitled to priority under section 507, unless--
`(A) the claim is a claim owed to a governmental unit that arises as a result of the sale, transfer, exchange, or other disposition of any farm asset used in the debtor's farming operation, in which case the claim shall be treated as an unsecured claim that is not entitled to priority under section 507, but the debt shall be treated in such manner only if the debtor receives a discharge; or
`(B) the holder of a particular claim agrees to a different treatment of that claim; and'.
(b) SPECIAL NOTICE PROVISIONS- Section 1231(b) of title 11, United States Code, is amended by striking `a State or local governmental unit' and inserting `any governmental unit'.
SEC. 1005. PROHIBITION OF RETROACTIVE ASSESSMENT OF DISPOSABLE INCOME.
(a) IN GENERAL- Section 1225(b) of title 11, United States Code, is amended by adding at the end the following:
`(3) If the plan provides for specific amounts of property to be distributed on account of allowed unsecured claims as required by paragraph (1)(B), those amounts equal or exceed the debtor's projected disposable income for that period, and the plan meets the requirements for confirmation other than those of this subsection, the plan shall be confirmed.'.
(b) MODIFICATION- Section 1229 of title 11, United States Code, is amended by adding at the end the following:
`(d)(1) A modification of the plan under this section may not increase the amount of payments that were due prior to the date of the order modifying the plan.
`(2) A modification of the plan under this section to increase payments based on an increase in the debtor's disposable income may not require payments to unsecured creditors in any particular month greater than the debtor's disposable income for that month unless the debtor proposes such a modification.
`(3) A modification of the plan in the last year of the plan shall not require payments that would leave the debtor with insufficient funds to carry on the farming operation after the plan is completed unless the debtor proposes such a modification.'.
SEC. 1006. FAMILY FISHERMEN.
(a) DEFINITIONS- Section 101 of title 11, United States Code, is amended--
(1) by inserting after paragraph (7) the following:
`(7A) `commercial fishing operation' includes--
`(A) the catching or harvesting of fish, shrimp, lobsters, urchins, seaweed, shellfish, or other aquatic species or products; and
`(B) for purposes of section 109 and chapter 12, aquaculture activities consisting of raising for market any species or product described in subparagraph (A);';
`(7B) `commercial fishing vessel' means a vessel used by a fisherman to carry out a commercial fishing operation;';
(2) by inserting after paragraph (19) the following:
`(19A) `family fisherman' means--
`(A) an individual or individual and spouse engaged in a commercial fishing operation (including aquiculture for purposes of chapter 12)--
`(i) whose aggregate debts do not exceed $1,500,000 and not less than 80 percent of whose aggregate noncontingent, liquidated debts (excluding a debt for the principal residence of such individual or such individual and spouse, unless such debt arises out of a commercial fishing operation), on the date the case is filed, arise out of a commercial fishing operation owned or operated by such individual or such individual and spouse; and
`(ii) who receive from such commercial fishing operation more than 50 percent of such individual's or such individual's and spouse's gross income for the taxable year preceding the taxable year in which the case concerning such individual or such individual and spouse was filed; or
`(B) a corporation or partnership--
`(i) in which more than 50 percent of the outstanding stock or equity is held by--
`(I) 1 family that conducts the commercial fishing operation; or
`(II) 1 family and the relatives of the members of such family, and such family or such relatives conduct the commercial fishing operation; and
`(ii)(I) more than 80 percent of the value of its assets consists of assets related to the commercial fishing operation;
`(II) its aggregate debts do not exceed $1,500,000 and not less than 80 percent of its aggregate noncontingent, liquidated debts (excluding a debt for 1 dwelling which is owned by such corporation or partnership and which a shareholder or partner maintains as a principal residence, unless such debt arises out of a commercial fishing operation), on the date the case is filed, arise out of a commercial fishing operation owned or operated by such corporation or such partnership; and
`(III) if such corporation issues stock, such stock is not publicly traded;'; and
(3) by inserting after paragraph (19A) the following:
`(19B) `family fisherman with regular annual income' means a family fisherman whose annual income is sufficiently stable and regular to enable such family fisherman to make payments under a plan under chapter 12 of this title;'.
(b) WHO MAY BE A DEBTOR- Section 109(f) of title 11, United States Code, is amended by inserting `or family fisherman' after `family farmer'.
(c) CHAPTER 12- Chapter 12 of title 11, United States Code, is amended--
(1) in the chapter heading, by inserting `OR FISHERMAN' after `FAMILY FARMER';
(2) in section 1201, by adding at the end the following:
`(e)(1) Notwithstanding any other provision of law, for purposes of this subsection, a guarantor of a claim of a creditor under this section shall be treated in the same manner as a creditor with respect to the operation of a stay under this section.
`(2) For purposes of a claim that arises from the ownership or operation of a commercial fishing operation, a co-maker of a loan made by a creditor under this section shall be treated in the same manner as a creditor with respect to the operation of a stay under this section.';
(3) in section 1203, by inserting `or commercial fishing operation' after `farm';
(4) in section 1206, by striking `if the property is farmland or farm equipment' and inserting `if the property is farmland, farm equipment, or property of a commercial fishing operation (including a commercial fishing vessel)'; and
(5) by adding at the end the following:
`Sec. 1232. Additional provisions relating to family fishermen
`(a)(1) Notwithstanding any other provision of law, except as provided in subsection (c), with respect to any commercial fishing vessel of a family fisherman, the debts of that family fisherman shall be treated in the manner prescribed in paragraph (2).
`(2)(A) For purposes of this chapter, a claim for a lien described in subsection (b) for a commercial fishing vessel of a family fisherman that could, but for this subsection, be subject to a lien under otherwise applicable maritime law, shall be treated as an unsecured claim.
`(B) Subparagraph (A) applies to a claim for a lien resulting from a debt of a family fisherman incurred on or after the date of enactment of this chapter.
`(b) A lien described in this subsection is--
`(1) a maritime lien under subchapter III of chapter 313 of title 46, United States Code, without regard to whether that lien is recorded under section 31343 of title 46, United States Code; or
`(2) a lien under applicable State law (or the law of a political subdivision thereof).
`(c) Subsection (a) shall not apply to--
`(1) a claim made by a member of a crew or a seaman including a claim made for--
`(A) wages, maintenance, or cure; or
`(2) a preferred ship mortgage that has been perfected under subchapter II of chapter 313 of title 46, United States Code.
`(d) For purposes of this chapter, a mortgage described in subsection (c)(2) shall be treated as a secured claim.'.
(1) TABLE OF CHAPTERS- In the table of chapters for title 11, United States Code, the item relating to chapter 12, is amended to read as follows:
1201'.
(2) TABLE OF SECTIONS- The table of sections for chapter 12 of title 11, United States Code, is amended by adding at the end the following new item:
`1232. Additional provisions relating to family fishermen.'.
TITLE XI--HEALTH CARE AND EMPLOYEE BENEFITS
SEC. 1101. DEFINITIONS.
(a) HEALTH CARE BUSINESS DEFINED- Section 101 of title 11, United States Code, as amended by section 1003(a) of this Act, is amended--
(1) by redesignating paragraph (27A) as paragraph (27B); and
(2) inserting after paragraph (27) the following:
`(27A) `health care business'--
`(A) means any public or private entity (without regard to whether that entity is organized for profit or not for profit) that is primarily engaged in offering to the general public facilities and services for--
`(i) the diagnosis or treatment of injury, deformity, or disease; and
`(ii) surgical, drug treatment, psychiatric or obstetric care; and
`(I) general or specialized hospital;
`(II) ancillary ambulatory, emergency, or surgical treatment facility;
`(IV) home health agency; and
`(V) other health care institution that is similar to an entity referred to in subclause (I), (II), (III), or (IV); and
`(ii) any long-term care facility, including any--
`(I) skilled nursing facility;
`(II) intermediate care facility;
`(III) assisted living facility;
`(V) domiciliary care facility; and
`(VI) health care institution that is related to a facility referred to in subclause (I), (II), (III), (IV), or (V), if that institution is primarily engaged in offering room, board, laundry, or personal assistance with activities of daily living and incidentals to activities of daily living;'.
(b) PATIENT DEFINED- Section 101 of title 11, United States Code, as amended by subsection (a) of this section, is amended by inserting after paragraph (40) the following:
`(40A) `patient' means any person who obtains or receives services from a health care business;'.
(c) PATIENT RECORDS DEFINED- Section 101 of title 11, United States Code, as amended by subsection (b) of this section, is amended by inserting after paragraph (40A) the following:
`(40B) `patient records' means any written document relating to a patient or a record recorded in a magnetic, optical, or other form of electronic medium;'.
(d) RULE OF CONSTRUCTION- The amendments made by subsection (a) of this section shall not affect the interpretation of section 109(b) of title 11, United States Code.
SEC. 1102. DISPOSAL OF PATIENT RECORDS.
(a) IN GENERAL- Subchapter III of chapter 3 of title 11, United States Code, is amended by adding at the end the following:
`Sec. 351. Disposal of patient records
`If a health care business commences a case under chapter 7, 9, or 11, and the trustee does not have a sufficient amount of funds to pay for the storage of patient records in the manner required under applicable Federal or State law, the following requirements shall apply:
`(A) publish notice, in 1 or more appropriate newspapers, that if patient records are not claimed by the patient or an insurance provider (if applicable law permits the insurance provider to make that claim) by the date that is 90 days after the date of that notification, the trustee will destroy the patient records; and
`(B) during the 90-day period described in subparagraph (A), attempt to notify directly each patient that is the subject of the patient records and appropriate insurance carrier concerning the patient records by mailing to the last known address of that patient and appropriate insurance carrier an appropriate notice regarding the claiming or disposing of patient records.
`(2) If after providing the notification under paragraph (1), patient records are not claimed during the 90-day period described under that paragraph, the trustee shall mail, by certified mail, at the end of such 90-day period a written request to each appropriate Federal agency to request permission from that agency to deposit the patient records with that agency.
`(3) If, following the period in paragraph (2) and after providing the notification under paragraph (1), patient records are not claimed during the 90-day period described in paragraph (1)(A) or in any case in which a notice is mailed under paragraph (1)(B), during the 90-day period beginning on the date on which the notice is mailed, by a patient or insurance provider in accordance with that paragraph, the trustee shall destroy those records by--
`(A) if the records are written, shredding or burning the records; or
`(B) if the records are magnetic, optical, or other electronic records, by otherwise destroying those records so that those records cannot be retrieved.'.
(b) CLERICAL AMENDMENT- The chapter analysis for chapter 3 of title 11, United States Code, is amended by inserting after the item relating to section 350 the following:
`351. Disposal of patient records.'.
SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS OF CLOSING A HEALTH CARE BUSINESS.
Section 503(b) of title 11, United States Code, is amended--
(1) in paragraph (5), by striking `and' at the end;
(2) in paragraph (6), by striking the period at the end and inserting `; and'; and
(3) by adding at the end the following:
`(7) the actual, necessary costs and expenses of closing a health care business incurred by a trustee or by a Federal agency (as that term is defined in section 551(1) of title 5) or a department or agency of a State or political subdivision thereof, including any cost or expense incurred--
`(A) in disposing of patient records in accordance with section 351; or
`(B) in connection with transferring patients from the health care business that is in the process of being closed to another health care business.'.
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PATIENT ADVOCATE.
(1) APPOINTMENT OF OMBUDSMAN- Subchapter II of chapter 3 of title 11, United States Code, is amended by inserting after section 331 the following:
`Sec. 332. Appointment of ombudsman
`(a) Not later than 30 days after a case is commenced by a health care business under chapter 7, 9, or 11, the court shall appoint an ombudsman with appropriate expertise in monitoring the quality of patient care to represent the interests of the patients of the health care business. The court may appoint as an ombudsman a person who is serving as a State Long-Term Care Ombudsman appointed under title III or VII of the Older Americans Act of 1965 (42 U.S.C. 3021 et seq. and 3058 et seq.).
`(b) An ombudsman appointed under subsection (a) shall--
`(1) monitor the quality of patient care, to the extent necessary under the circumstances, including interviewing patients and physicians;
`(2) not later than 60 days after the date of appointment, and not less frequently than every 60 days thereafter, report to the court, at a hearing or in writing, regarding the quality of patient care at the health care business involved; and
`(3) if the ombudsman determines that the quality of patient care is declining significantly or is otherwise being materially compromised, notify the court by motion or written report, with notice to appropriate parties in interest, immediately upon making that determination.
`(c) An ombudsman shall maintain any information obtained by the ombudsman under this section that relates to patients (including information relating to patient records) as confidential information.'.
(2) CLERICAL AMENDMENT- The chapter analysis for chapter 3 of title 11, United States Code, is amended by inserting after the item relating to section 331 the following:
`332. Appointment of ombudsman.'.
(b) COMPENSATION OF OMBUDSMAN- Section 330(a)(1) of title 11, United States Code, is amended--
(1) in the matter proceeding subparagraph (A), by inserting `an ombudsman appointed under section 331, or' before `a professional person'; and
(2) in subparagraph (A), by inserting `ombudsman,' before `professional person'.
SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO TRANSFER PATIENTS.
(a) IN GENERAL- Section 704(a) of title 11, United States Code, as amended by section 219 of this Act, is amended--
(1) in paragraph (9), by striking `and' at the end;
(2) in paragraph (10), by striking the period and inserting `; and'; and
(3) by adding at the end the following:
`(11) use all reasonable and best efforts to transfer patients from a health care business that is in the process of being closed to an appropriate health care business that--
`(A) is in the vicinity of the health care business that is closing;
`(B) provides the patient with services that are substantially similar to those provided by the health care business that is in the process of being closed; and
`(C) maintains a reasonable quality of care.'.
(b) CONFORMING AMENDMENT- Section 1106(a)(1) of title 11, United States Code, is amended by striking `704(2), 704(5), 704(7), 704(8), and 704(9)' and inserting `704(a) (2), (5), (7), (8), (9), and (11)'.
SEC. 1106. ESTABLISHMENT OF POLICY AND PROTOCOLS RELATING TO BANKRUPTCIES OF HEALTH CARE BUSINESSES.
Not later than 30 days after the date of enactment of this Act, the Attorney General of the United States, in consultation with the Secretary of Health and Human Services and the National Association of Attorneys General, shall establish a policy and protocols for coordinating a response to bankruptcies of health care businesses (as that term is defined in section 101 of title 11, United States Code), including assessing the appropriate time frame for disposal of patient records under section 1102 of this Act.
SEC. 1107. EXCLUSION FROM PROGRAM PARTICIPATION NOT SUBJECT TO AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, as amended by section 901(d) of this Act, is amended--
(1) in paragraph (27), by striking `or' at the end;
(2) in paragraph (28), by striking the period at the end and inserting `; or'; and
(3) by inserting after paragraph (28) the following:
`(29) under subsection (a), of the exclusion by the Secretary of Health and Human Services of the debtor from participation in the medicare program or any other Federal health care program (as defined in section 1128B(f) of the Social Security Act (42 U.S.C. 1320a-7b(f)) pursuant to title XI of such Act (42 U.S.C. 1301 et seq.) or title XVIII of such Act (42 U.S.C. 1395 et seq.).'.
TITLE XII--AMENDMENTS TO FAIR LABOR STANDARDS ACT OF 1938
SEC. 1201. MINIMUM WAGE.
Section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended to read as follows:
`(1) except as otherwise provided in this section, not less than--
`(A) $5.15 an hour beginning September 1, 1997,
`(B) $5.50 an hour during the year beginning March 1, 2000,
`(C) $5.85 an hour during the year beginning March 1, 2001, and
`(D) $6.15 an hour during the year beginning March 1, 2002.'.
SEC. 1202. REGULAR RATE FOR OVERTIME PURPOSES.
Section 7(e) of the Fair Labor Standards Act of 1938 (29 U.S.C. 207(e)) is amended--
(1) by inserting before the semicolon at the end of paragraph (3) the following: `; or (d) the payments are made to reward an employee or group of employees for meeting or exceeding the productivity, quality, efficiency, or sales goals as specified in a gainsharing, incentive bonus, commission, or performance contingent bonus plan'; and
(2) by inserting after and below paragraph (7) the following:
`A plan described in paragraph (3)(d) shall be in writing and made available to employees, provide that the amount of the payments to be made under the plan be based upon a formula that is stated in the plan, and be established and maintained in good faith for the purpose of distributing to employees additional remuneration over and above the wages and salaries that are not dependent upon the existence of such plan or payments made pursuant to such plan.'.
TITLE XIII--TAX RELIEF
SEC. 1300. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.
Subtitle A--Small Business Tax Relief
SEC. 1301. INCREASE IN EXPENSING LIMITATION TO $30,000.
(a) IN GENERAL- Paragraph (1) of section 179(b) (relating to limitations) is amended to read as follows:
`(1) DOLLAR LIMITATION- The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $30,000.'
(b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after December 31, 2000.
SEC. 1302. REPEAL OF TEMPORARY UNEMPLOYMENT TAX.
Section 3301 (relating to rate of unemployment tax) is amended--
(1) by striking `2007' in paragraph (1) and inserting `2000'; and
(2) by striking `2008' in paragraph (2) and inserting `2001'.
SEC. 1303. FULL DEDUCTION OF HEALTH INSURANCE COSTS FOR SELF-EMPLOYED INDIVIDUALS.
(a) IN GENERAL- Section 162(l)(1) (relating to allowance of deduction) is amended to read as follows:
`(1) ALLOWANCE OF DEDUCTION- In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer and the taxpayer's spouse and dependents.'
(b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after December 31, 1999.
SEC. 1304. PERMANENT EXTENSION OF WORK OPPORTUNITY TAX CREDIT.
(a) IN GENERAL- Section 51(c) (defining wages) is amended by striking paragraph (4).
(b) EFFECTIVE DATE- The amendment made by this section shall apply to individuals who begin work for the employer after June 30, 1999.
SEC. 1305. SMALL BUSINESSES ALLOWED INCREASED DEDUCTION FOR MEAL AND ENTERTAINMENT EXPENSES.
(a) IN GENERAL- Subsection (n) of section 274 (relating to only 50 percent of meal and entertainment expenses allowed as deduction) is amended by adding at the end the following:
`(4) SPECIAL RULE FOR SMALL BUSINESSES-
`(A) IN GENERAL- In the case of any taxpayer which is a small business, paragraph (1) shall be applied by substituting `the applicable percentage' for `50 percent'. For purposes of the preceding sentence, the term `applicable percentage' means 55 percent in the case of taxable years beginning in 2001, increased (but not above 80 percent) by 5 percentage points for each succeeding calendar year after 2001 with respect to taxable years beginning in each such calendar year.
`(B) SMALL BUSINESS- For purposes of this paragraph, the term `small business' means, with respect to expenses paid or incurred during any taxable year--
`(i) any C corporation which meets the requirements of section 55(e)(1) for such year, and
`(ii) any S corporation, partnership, or sole proprietorship which would meet such requirements if it were a C corporation.'
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2000.
Subtitle B--Deduction for Health and Long-Term Care Insurance
SEC. 1311. DEDUCTION FOR HEALTH AND LONG-TERM CARE INSURANCE COSTS OF INDIVIDUALS NOT PARTICIPATING IN EMPLOYER-SUBSIDIZED HEALTH PLANS.
(a) IN GENERAL- Part VII of subchapter B of chapter 1 is amended by redesignating section 222 as section 223 and by inserting after section 221 the following new section:
`SEC. 222. HEALTH AND LONG-TERM CARE INSURANCE COSTS.
`(a) IN GENERAL- In the case of an individual, there shall be allowed as a deduction an amount equal to the applicable percentage of the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer and the taxpayer's spouse and dependents.
`(b) APPLICABLE PERCENTAGE- For purposes of subsection (a), the applicable percentage shall be determined in accordance with the following table:
`For taxable years beginning
The applicable
in calendar year--
percentage is--
2002, 2003, and 2004
25
2005
35
2006
65
2007 and thereafter
100.
`(c) LIMITATION BASED ON OTHER COVERAGE-
`(1) COVERAGE UNDER CERTAIN SUBSIDIZED EMPLOYER PLANS-
`(A) IN GENERAL- Subsection (a) shall not apply to any taxpayer for any calendar month for which the taxpayer participates in any health plan maintained by any employer of the taxpayer or of the spouse of the taxpayer if 50 percent or more of the cost of coverage under such plan (determined under section 4980B and without regard to payments made with respect to any coverage described in subsection (e)) is paid or incurred by the employer.
`(B) EMPLOYER CONTRIBUTIONS TO CAFETERIA PLANS, FLEXIBLE SPENDING ARRANGEMENTS, AND MEDICAL SAVINGS ACCOUNTS- Employer contributions to a cafeteria plan, a flexible spending or similar arrangement, or a medical savings account which are excluded from gross income under section 106 shall be treated for purposes of subparagraph (A) as paid by the employer.
`(C) AGGREGATION OF PLANS OF EMPLOYER- A health plan which is not otherwise described in subparagraph (A) shall be treated as described in such subparagraph if such plan would be so described if all health plans of persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 were treated as one health plan.
`(D) SEPARATE APPLICATION TO HEALTH INSURANCE AND LONG-TERM CARE INSURANCE- Subparagraphs (A) and (C) shall be applied separately with respect to--
`(i) plans which include primarily coverage for qualified long-term care services or are qualified long-term care insurance contracts, and
`(ii) plans which do not include such coverage and are not such contracts.
`(2) COVERAGE UNDER CERTAIN FEDERAL PROGRAMS-
`(A) IN GENERAL- Subsection (a) shall not apply to any amount paid for any coverage for an individual for any calendar month if, as of the first day of such month, the individual is covered under any medical care program described in--
`(i) title XVIII, XIX, or XXI of the Social Security Act,
`(ii) chapter 55 of title 10, United States Code,
`(iii) chapter 17 of title 38, United States Code,
`(iv) chapter 89 of title 5, United States Code, or
`(v) the Indian Health Care Improvement Act.
`(i) QUALIFIED LONG-TERM CARE- Subparagraph (A) shall not apply to amounts paid for coverage under a qualified long-term care insurance contract.
`(ii) CONTINUATION COVERAGE OF FEHBP- Subparagraph (A)(iv) shall not apply to coverage which is comparable to continuation coverage under section 4980B.
`(d) LONG-TERM CARE DEDUCTION LIMITED TO QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS- In the case of a qualified long-term care insurance contract, only eligible long-term care premiums (as defined in section 213(d)(10)) may be taken into account under subsection (a).
`(e) DEDUCTION NOT AVAILABLE FOR PAYMENT OF ANCILLARY COVERAGE PREMIUMS- Any amount paid as a premium for insurance which provides for--
`(1) coverage for accidents, disability, dental care, vision care, or a specified illness, or
`(2) making payments of a fixed amount per day (or other period) by reason of being hospitalized,
shall not be taken into account under subsection (a).
`(1) COORDINATION WITH DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED INDIVIDUALS- The amount taken into account by the taxpayer in computing the deduction under section 162(l) shall not be taken into account under this section.
`(2) COORDINATION WITH MEDICAL EXPENSE DEDUCTION- The amount taken into account by the taxpayer in computing the deduction under this section shall not be taken into account under section 213.
`(g) REGULATIONS- The Secretary shall prescribe such regulations as may be appropriate to carry out this section, including regulations requiring employers to report to their employees and the Secretary such information as the Secretary determines to be appropriate.'.
(b) DEDUCTION ALLOWED WHETHER OR NOT TAXPAYER ITEMIZES OTHER DEDUCTIONS- Subsection (a) of section 62 is amended by inserting after paragraph (17) the following new item:
`(18) HEALTH AND LONG-TERM CARE INSURANCE COSTS- The deduction allowed by section 222.'.
(c) CLERICAL AMENDMENT- The table of sections for part VII of subchapter B of chapter 1 is amended by striking the last item and inserting the following new items:
`Sec. 222. Health and long-term care insurance costs.
`Sec. 223. Cross reference.'.
(d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2000.
Subtitle C--Pension Tax Relief
PART I--EXPANDING COVERAGE
SEC. 1321. INCREASE IN BENEFIT AND CONTRIBUTION LIMITS.
(a) DEFINED BENEFIT PLANS-
(A) Subparagraph (A) of section 415(b)(1) (relating to limitation for defined benefit plans) is amended by striking `$90,000' and inserting `$160,000'.
(B) Subparagraphs (C) and (D) of section 415(b)(2) are each amended by striking `$90,000' each place it appears in the headings and the text and inserting `$160,000'.
(C) Paragraph (7) of section 415(b) (relating to benefits under certain collectively bargained plans) is amended by striking `the greater of $68,212 or one-half the amount otherwise applicable for such year under paragraph (1)(A) for `$90,000' and inserting `one-half the amount otherwise applicable for such year under paragraph (1)(A) for `$160,000'.
(2) LIMIT REDUCED WHEN BENEFIT BEGINS BEFORE AGE 62- Subparagraph (C) of section 415(b)(2) is amended by striking `the social security retirement age' each place it appears in the heading and text and inserting `age 62'.
(3) LIMIT INCREASED WHEN BENEFIT BEGINS AFTER AGE 65- Subparagraph (D) of section 415(b)(2) is amended by striking `the social security retirement age' each place it appears in the heading and text and inserting `age 65'.
(4) COST-OF-LIVING ADJUSTMENTS- Subsection (d) of section 415 (related to cost-of-living adjustments) is amended--
(A) by striking `$90,000' in paragraph (1)(A) and inserting `$160,000', and
(B) in paragraph (3)(A)--
(i) by striking `$90,000' in the heading and inserting `$160,000', and
(ii) by striking `October 1, 1986' and inserting `July 1, 2000'.
(5) CONFORMING AMENDMENT- Section 415(b)(2) is amended by striking subparagraph (F).
(b) DEFINED CONTRIBUTION PLANS-
(1) DOLLAR LIMIT- Subparagraph (A) of section 415(c)(1) (relating to limitation for defined contribution plans) is amended by striking `$30,000' and inserting `$40,000'.
(2) COST-OF-LIVING ADJUSTMENTS- Subsection (d) of section 415 (related to cost-of-living adjustments) is amended--
(A) by striking `$30,000' in paragraph (1)(C) and inserting `$40,000', and
(B) in paragraph (3)(D)--
(i) by striking `$30,000' in the heading and inserting `$40,000', and
(ii) by striking `October 1, 1993' and inserting `July 1, 2000'.
(1) COMPENSATION LIMIT- Sections 401(a)(17), 404(l), 408(k), and 505(b)(7) are each amended by striking `$150,000' each place it appears and inserting `$200,000'.
(2) BASE PERIOD AND ROUNDING OF COST-OF-LIVING ADJUSTMENT- Subparagraph (B) of section 401(a)(17) is amended--
(A) by striking `October 1, 1993' and inserting `July 1, 2000', and
(B) by striking `$10,000' both places it appears and inserting `$5,000'.
(1) IN GENERAL- Paragraph (1) of section 402(g) (relating to limitation on exclusion for elective deferrals) is amended to read as follows:
`(A) LIMITATION- Notwithstanding subsections (e)(3) and (h)(1)(B), the elective deferrals of any individual for any taxable year shall be included in such individual's gross income to the extent the amount of such deferrals for the taxable year exceeds the applicable dollar amount.
`(B) APPLICABLE DOLLAR AMOUNT- For purposes of subparagraph (A), the applicable dollar amount shall be the amount determined in accordance with the following table:
`For taxable years beginning
The applicable
in calendar year:
dollar amount:
2001
$11,000
2002
$12,000
2003
$13,000
2004
$14,000
2005 or thereafter
$15,000.'.
(2) COST-OF-LIVING ADJUSTMENT- Paragraph (5) of section 402(g) is amended to read as follows:
`(5) COST-OF-LIVING ADJUSTMENT- In the case of taxable years beginning after December 31, 2005, the Secretary shall adjust the $15,000 amount under paragraph (1)(B) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2004, and any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500.'.
(3) CONFORMING AMENDMENTS-
(A) Section 402(g) (relating to limitation on exclusion for elective deferrals), as amended by paragraphs (1) and (2), is further amended by striking paragraph (4) and redesignating paragraphs (5), (6), (7), (8), and (9) as paragraphs (4), (5), (6), (7), and (8), respectively.
(B) Paragraph (2) of section 457(c) is amended by striking `402(g)(8)(A)(iii)' and inserting `402(g)(7)(A)(iii)'.
(C) Clause (iii) of section 501(c)(18)(D) is amended by striking `(other than paragraph (4) thereof)'.
(e) DEFERRED COMPENSATION PLANS OF STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANIZATIONS-
(1) IN GENERAL- Section 457 (relating to deferred compensation plans of State and local governments and tax-exempt organizations) is amended--
(A) in subsections (b)(2)(A) and (c)(1) by striking `$7,500' each place it appears and inserting `the applicable dollar amount', and
(B) in subsection (b)(3)(A) by striking `$15,000' and inserting `twice the dollar amount in effect under subsection (b)(2)(A)'.
(2) APPLICABLE DOLLAR AMOUNT; COST-OF-LIVING ADJUSTMENT- Paragraph (15) of section 457(e) is amended to read as follows:
`(15) APPLICABLE DOLLAR AMOUNT-
`(A) IN GENERAL- The applicable dollar amount shall be the amount determined in accordance with the following table:
`For taxable years beginning
The applicable
in calendar year:
dollar amount:
2001
$11,000
2002
$12,000
2003
$13,000
2004
$14,000
2005 or thereafter
$15,000.
`(B) COST-OF-LIVING ADJUSTMENTS- In the case of taxable years beginning after December 31, 2005, the Secretary shall adjust the $15,000 amount specified in the table in subparagraph (A) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2004, and any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500.'.
(f) SIMPLE RETIREMENT ACCOUNTS-
(1) LIMITATION- Clause (ii) of section 408(p)(2)(A) (relating to general rule for qualified salary reduction arrangement) is amended by striking `$6,000' and inserting `the applicable dollar amount'.
(2) APPLICABLE DOLLAR AMOUNT- Subparagraph (E) of 408(p)(2) is amended to read as follows:
`(E) APPLICABLE DOLLAR AMOUNT; COST-OF-LIVING ADJUSTMENT-
`(i) IN GENERAL- For purposes of subparagraph (A)(ii), the applicable dollar amount shall be the amount determined in accordance with the following table:
`For taxable years beginning
The applicable
in calendar year:
dollar amount:
2001
$7,000
2002
$8,000
2003
$9,000
2004 or thereafter
$10,000.
`(ii) COST-OF-LIVING ADJUSTMENT- In the case of a year beginning after December 31, 2004, the Secretary shall adjust the $10,000 amount under clause (i) at the same time and in the same manner as under section 415(d), except that the base period taken into account shall be the calendar quarter beginning July 1, 2003, and any increase under this subparagraph which is not a multiple of $500 shall be rounded to the next lower multiple of $500.'.
(3) CONFORMING AMENDMENTS-
(A) Clause (I) of section 401(k)(11)(B)(i) is amended by striking `$6,000' and inserting `the amount in effect under section 408(p)(2)(A)(ii)'.
(B) Section 401(k)(11) is amended by striking subparagraph (E).
(g) ROUNDING RULE RELATING TO DEFINED BENEFIT PLANS AND DEFINED CONTRIBUTION PLANS- Paragraph (4) of section 415(d) is amended to read as follows:
`(A) $160,000 AMOUNT- Any increase under subparagraph (A) of paragraph (1) which is not a multiple of $5,000 shall be rounded to the next lowest multiple of $5,000.
`(B) $40,000 AMOUNT- Any increase under subparagraph (C) of paragraph (1) which is not a multiple of $1,000 shall be rounded to the next lowest multiple of $1,000.'.
(h) EFFECTIVE DATE- The amendments made by this section shall apply to years beginning after December 31, 2000.
SEC. 1322. PLAN LOANS FOR SUBCHAPTER S OWNERS, PARTNERS, AND SOLE PROPRIETORS.
(a) AMENDMENT TO 1986 CODE- Subparagraph (B) of section 4975(f)(6) (relating to exemptions not to apply to certain transactions) is amended by adding at the end the following new clause:
`(iii) LOAN EXCEPTION- For purposes of subparagraph (A)(i), the term `owner-employee' shall only include a person described in subclause (II) or (III) of clause (i).'.
(b) AMENDMENT TO ERISA- Section 408(d)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1108(d)(2)) is amended by adding at the end the following new subparagraph:
`(C) For purposes of paragraph (1)(A), the term `owner-employee' shall only include a person described in clause (ii) or (iii) of subparagraph (A).'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to loans made after December 31, 2000.
SEC. 1323. MODIFICATION OF TOP-HEAVY RULES.
(a) SIMPLIFICATION OF DEFINITION OF KEY EMPLOYEE-
(1) IN GENERAL- Section 416(i)(1)(A) (defining key employee) is amended--
(A) by striking `or any of the 4 preceding plan years' in the matter preceding clause (i),
(B) by striking clause (i) and inserting the following:
`(i) an officer of the employer having an annual compensation greater than $150,000,',
(C) by striking clause (ii) and redesignating clauses (iii) and (iv) as clauses (ii) and (iii), respectively, and
(D) by striking the second sentence in the matter following clause (iii), as redesignated by subparagraph (C).
(2) CONFORMING AMENDMENT- Section 416(i)(1)(B)(iii) is amended by striking `and subparagraph (A)(ii)'.
(b) MATCHING CONTRIBUTIONS TAKEN INTO ACCOUNT FOR MINIMUM CONTRIBUTION REQUIREMENTS- Section 416(c)(2)(A) (relating to defined contribution plans) is amended by adding at the end the following: `Employer matching contributions (as defined in section 401(m)(4)(A)) shall be taken into account for purposes of this subparagraph.'.
(c) DISTRIBUTIONS DURING LAST YEAR BEFORE DETERMINATION DATE TAKEN INTO ACCOUNT-
(1) IN GENERAL- Paragraph (3) of section 416(g) is amended to read as follows:
`(3) DISTRIBUTIONS DURING LAST YEAR BEFORE DETERMINATION DATE TAKEN INTO ACCOUNT-
`(A) IN GENERAL- For purposes of determining--
`(i) the present value of the cumulative accrued benefit for any employee, or
`(ii) the amount of the account of any employee,
such present value or amount shall be increased by the aggregate distributions made with respect to such employee under the plan during the 1-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which if it had not been terminated would have been required to be included in an aggregation group.
`(B) 5-YEAR PERIOD IN CASE OF IN-SERVICE DISTRIBUTION- In the case of any distribution made for a reason other than separation from service, death, or disability, subparagraph (A) shall be applied by substituting `5-year period' for `1-year period'.'.
(2) BENEFITS NOT TAKEN INTO ACCOUNT- Subparagraph (E) of section 416(g)(4) is amended--
(A) by striking `LAST 5 YEARS' in the heading and inserting `LAST YEAR BEFORE DETERMINATION DATE', and
(B) by striking `5-year period' and inserting `1-year period'.
(d) DEFINITION OF TOP-HEAVY PLANS- Paragraph (4) of section 416(g) (relating to other special rules for top-heavy plans) is amended by adding at the end the following new subparagraph:
`(H) CASH OR DEFERRED ARRANGEMENTS USING ALTERNATIVE METHODS OF MEETING NONDISCRIMINATION REQUIREMENTS- The term `top-heavy plan' shall not include a plan which consists solely of--
`(i) a cash or deferred arrangement which meets the requirements of section 401(k)(12), and
`(ii) matching contributions with respect to which the requirements of section 401(m)(11) are met.
If, but for this subparagraph, a plan would be treated as a top-heavy plan because it is a member of an aggregation group which is a top-heavy group, contributions under the plan may be taken into account in determining whether any other plan in the group meets the requirements of subsection (c)(2).'.
(e) FROZEN PLAN EXEMPT FROM MINIMUM BENEFIT REQUIREMENT- Subparagraph (C) of section 416(c)(1) (relating to defined benefit plans) is amended--
(A) by striking `clause (ii)' in clause (i) and inserting `clause (ii) or (iii)', and
(B) by adding at the end the following:
`(iii) EXCEPTION FOR FROZEN PLAN- For purposes of determining an employee's years of service with the employer, any service with the employer shall be disregarded to the extent that such service occurs during a plan year when the plan benefits (within the meaning of section 410(b)) no employee or former employee.'.
(f) ELIMINATION OF FAMILY ATTRIBUTION- Section 416(i)(1)(B) (defining 5-percent owner) is amended by adding at the end the following new clause:
`(iv) FAMILY ATTRIBUTION DISREGARDED- Solely for purposes of applying this paragraph (and not for purposes of any provision of this title which incorporates by reference the definition of a key employee or 5-percent owner under this paragraph), section 318 shall be applied without regard to subsection (a)(1) thereof in determining whether any person is a 5-percent owner.'.
(g) EFFECTIVE DATE- The amendments made by this section shall apply to years beginning after December 31, 2000.
SEC. 1324. ELECTIVE DEFERRALS NOT TAKEN INTO ACCOUNT FOR PURPOSES OF DEDUCTION LIMITS.
(a) IN GENERAL- Section 404 (relating to deduction for contributions of an employer to an employees' trust or annuity plan and compensation under a deferred payment plan) is amended by adding at the end the following new subsection:
`(n) ELECTIVE DEFERRALS NOT TAKEN INTO ACCOUNT FOR PURPOSES OF DEDUCTION LIMITS- Elective deferrals (as defined in section 402(g)(3)) shall not be subject to any limitation contained in paragraph (3), (7), or (9) of subsection (a), and such elective deferrals shall not be taken into account in applying any such limitation to any other contributions.'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to years beginning after December 31, 2000.
SEC. 1325. REPEAL OF COORDINATION REQUIREMENTS FOR DEFERRED COMPENSATION PLANS OF STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANIZATIONS.
(a) IN GENERAL- Subsection (c) of section 457 (relating to deferred compensation plans of State and local governments and tax-exempt organizations), as amended by section 1321, is amended to read as follows:
`(c) LIMITATION- The maximum amount of the compensation of any one individual which may be deferred under subsection (a) during any taxable year shall not exceed the amount in effect under subsection (b)(2)(A) (as modified by any adjustment provided under subsection (b)(3)).'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to years beginning after December 31, 2000.
SEC. 1326. ELIMINATION OF USER FEE FOR REQUESTS TO IRS REGARDING PENSION PLANS.
(a) ELIMINATION OF CERTAIN USER FEES- The Secretary of the Treasury or the Secretary's delegate shall not require payment of user fees under the program established under section 7527 of the Internal Revenue Code of 1986 for requests to the Internal Revenue Service for determination letters with respect to the qualified status of a pension benefit plan maintained solely by one or more eligible employers or any trust which is part of the plan. The preceding sentence shall not apply to any request--
(1) made after the 5th plan year the pension benefit plan is in existence, or
(2) made by the sponsor of any prototype or similar plan which the sponsor intends to market to participating employers.
(b) PENSION BENEFIT PLAN- For purposes of this section, the term `pension benefit plan' means a pension, profit-sharing, stock bonus, annuity, or employee stock ownership plan.
(c) ELIGIBLE EMPLOYER- For purposes of this section, the term `eligible employer' has the same meaning given such term in section 408(p)(2)(C)(i)(I) of the Internal Revenue Code of 1986. The determination of whether an employer is an eligible employer under this section shall be made as of the date of the request described in subsection (a).
(d) EFFECTIVE DATE- The provisions of this section shall apply with respect to requests made after December 31, 2000.
SEC. 1327. DEDUCTION LIMITS.
(a) IN GENERAL- Section 404(a) (relating to general rule) is amended by adding at the end the following:
`(12) DEFINITION OF COMPENSATION- For purposes of paragraphs (3), (7), (8), and (9), the term `compensation' shall include amounts treated as participant's compensation under subparagraph (C) or (D) of section 415(c)(3).'.
(b) CONFORMING AMENDMENT- Subparagraph (B) of section 404(a)(3) is amended by striking the last sentence thereof.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to years beginning after December 31, 2000.
SEC. 1328. OPTION TO TREAT ELECTIVE DEFERRALS AS AFTER-TAX CONTRIBUTIONS.
(a) IN GENERAL- Subpart A of part I of subchapter D of chapter 1 (relating to deferred compensation, etc.) is amended by inserting after section 402 the following new section:
`SEC. 402A. OPTIONAL TREATMENT OF ELECTIVE DEFERRALS AS PLUS CONTRIBUTIONS.
`(a) GENERAL RULE- If an applicable retirement plan includes a qualified plus contribution program--
`(1) any designated plus contribution made by an employee pursuant to the program shall be treated as an elective deferral for purposes of this chapter, except that such contribution shall not be excludable from gross income, and
`(2) such plan (and any arrangement which is part of such plan) shall not be treated as failing to meet any requirement of this chapter solely by reason of including such program.
`(b) QUALIFIED PLUS CONTRIBUTION PROGRAM- For purposes of this section--
`(1) IN GENERAL- The term `qualified plus contribution program' means a program under which an employee may elect to make designated plus contributions in lieu of all or a portion of elective deferrals the employee is otherwise eligible to make under the applicable retirement plan.
`(2) SEPARATE ACCOUNTING REQUIRED- A program shall not be treated as a qualified plus contribution program unless the applicable retirement plan--
`(A) establishes separate accounts (`designated plus accounts') for the designated plus contributions of each employee and any earnings properly allocable to the contributions, and
`(B) maintains separate recordkeeping with respect to each account.
`(c) DEFINITIONS AND RULES RELATING TO DESIGNATED PLUS CONTRIBUTIONS- For purposes of this section--
`(1) DESIGNATED PLUS CONTRIBUTION- The term `designated plus contribution' means any elective deferral which--
`(A) is excludable from gross income of an employee without regard to this section, and
`(B) the employee designates (at such time and in such manner as the Secretary may prescribe) as not being so excludable.
`(2) DESIGNATION LIMITS- The amount of elective deferrals which an employee may designate under paragraph (1) shall not exceed the excess (if any) of--
`(A) the maximum amount of elective deferrals excludable from gross income of the employee for the taxable year (without regard to this section), over
`(B) the aggregate amount of elective deferrals of the employee for the taxable year which the employee does not designate under paragraph (1).
`(3) ROLLOVER CONTRIBUTIONS-
`(A) IN GENERAL- A rollover contribution of any payment or distribution from a designated plus account which is otherwise allowable under this chapter may be made only if the contribution is to--
`(i) another designated plus account of the individual from whose account the payment or distribution was made, or
`(ii) a Roth IRA of such individual.
`(B) COORDINATION WITH LIMIT- Any rollover contribution to a designated plus account under subparagraph (A) shall not be taken into account for purposes of paragraph (1).
`(d) DISTRIBUTION RULES- For purposes of this title--
`(1) EXCLUSION- Any qualified distribution from a designated plus account shall not be includible in gross income.
`(2) QUALIFIED DISTRIBUTION- For purposes of this subsection--
`(A) IN GENERAL- The term `qualified distribution' has the meaning given such term by section 408A(d)(2)(A) (without regard to clause (iv) thereof).
`(B) DISTRIBUTIONS WITHIN NONEXCLUSION PERIOD- A payment or distribution from a designated plus account shall not be treated as a qualified distribution if such payment or distribution is made within the 5-taxable-year period beginning with the earlier of--
`(i) the first taxable year for which the individual made a designated plus contribution to any designated plus account established for such individual under the same applicable retirement plan, or
`(ii) if a rollover contribution was made to such designated plus account from a designated plus account previously established for such individual under another applicable retirement plan, the first taxable year for which the individual made a designated plus contribution to such previously established account.
`(C) DISTRIBUTIONS OF EXCESS DEFERRALS AND EARNINGS- The term `qualified distribution' shall not include any distribution of any excess deferral under section 402(g)(2) and any income on the excess deferral.
`(3) AGGREGATION RULES- Section 72 shall be applied separately with respect to distributions and payments from a designated plus account and other distributions and payments from the plan.
`(e) OTHER DEFINITIONS- For purposes of this section--
`(1) APPLICABLE RETIREMENT PLAN- The term `applicable retirement plan' means--
`(A) an employees' trust described in section 401(a) which is exempt from tax under section 501(a), and
`(B) a plan under which amounts are contributed by an individual's employer for an annuity contract described in section 403(b).
`(2) ELECTIVE DEFERRAL- The term `elective deferral' means any elective deferral described in subparagraph (A) or (C) of section 402(g)(3).'.
(b) EXCESS DEFERRALS- Section 402(g) (relating to limitation on exclusion for elective deferrals) is amended--
(1) by adding at the end of paragraph (1) the following new sentence: `The preceding sentence shall not apply to so much of such excess as does not exceed the designated plus contributions of the individual for the taxable year.', and
(2) by inserting `(or would be included but for the last sentence thereof)' after `paragraph (1)' in paragraph (2)(A).
(c) ROLLOVERS- Subparagraph (B) of section 402(c)(8) is amended by adding at the end the following:
`If any portion of an eligible rollover distribution is attributable to payments or distributions from a designated plus account (as defined in section 402A), an eligible retirement plan with respect to such portion shall include only another designated plus account and a Roth IRA.'.
(d) REPORTING REQUIREMENTS-
(1) W-2 INFORMATION- Section 6051(a)(8) is amended by inserting `, including the amount of designated plus contributions (as defined in section 402A)' before the comma at the end.
(2) INFORMATION- Section 6047 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection:
`(f) DESIGNATED PLUS CONTRIBUTIONS- The Secretary shall require the plan administrator of each applicable retirement plan (as defined in section 402A) to make such returns and reports regarding designated plus contributions (as so defined) to the Secretary, participants and beneficiaries of the plan, and such other persons as the Secretary may prescribe.'.
(e) CONFORMING AMENDMENTS-
(1) Section 408A(e) is amended by adding after the first sentence the following new sentence: `Such term includes a rollover contribution described in section 402A(c)(3)(A).'.
(2) The table of sections for subpart A of part I of subchapter D of chapter 1 is amended by inserting after the item relating to section 402 the following new item:
`Sec. 402A. Optional treatment of elective deferrals as plus contributions.'.
(f) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2000.
PART II--ENHANCING FAIRNESS FOR WOMEN
SEC. 1331. CATCHUP CONTRIBUTIONS FOR INDIVIDUALS AGE 50 OR OVER.
(a) IN GENERAL- Section 414 (relating to definitions and special rules) is amended by adding at the end the following new subsection:
`(v) CATCHUP CONTRIBUTIONS FOR INDIVIDUALS AGE 50 OR OVER-
`(1) IN GENERAL- An applicable employer plan shall not be treated as failing to meet any requirement of this title solely because the plan permits an eligible participant to make additional elective deferrals in any plan year.
`(2) LIMITATION ON AMOUNT OF ADDITIONAL DEFERRALS-
`(A) IN GENERAL- A plan shall not permit additional elective deferrals under paragraph (1) for any year in an amount greater than the lesser of--
`(i) the applicable percentage of the applicable dollar amount for such elective deferrals for such year, or
`(ii) the excess (if any) of--
`(I) the participant's compensation for the year, over
`(II) any other elective deferrals of the participant for such year which are made without regard to this subsection.
`(B) APPLICABLE PERCENTAGE- For purposes of this paragraph, the applicable percentage shall be determined in accordance with the following table:
`For taxable years
The applicable
beginning in:
percentage is:
2001
10 percent
2002
20 percent
2003
30 percent
2004
40 percent
2005 and thereafter
50 percent.
`(3) TREATMENT OF CONTRIBUTIONS- In the case of any contribution to a plan under paragraph (1)--
`(A) such contribution shall not, with respect to the year in which the contribution is made--
`(i) be subject to any otherwise applicable limitation contained in section 402(g), 402(h), 403(b), 404(a), 404(h), 408, 415, or 457, or
`(ii) be taken into account in applying such limitations to other contributions or benefits under such plan or any other such plan, and
`(B) such plan shall not be treated as failing to meet the requirements of section 401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12), 401(m), 403(b)(12), 408(k), 408(p), 408B, 410(b), or 416 by reason of the making of (or the right to make) such contribution.
`(4) ELIGIBLE PARTICIPANT- For purposes of this subsection, the term `eligible participant' means, with respect to any plan year, a participant in a plan--
`(A) who has attained the age of 50 before the close of the plan year, and
`(B) with respect to whom no other elective deferrals may (without regard to this subsection) be made to the plan for the plan year by reason of the application of any limitation or other restriction described in paragraph (3) or contained in the terms of the plan.
`(5) OTHER DEFINITIONS AND RULES- For purposes of this subsection--
`(A) APPLICABLE DOLLAR AMOUNT- The term `applicable dollar amount' means, with respect to any year, the amount in effect under section 402(g)(1)(B), 408(p)(2)(E)(i), or 457(e)(15)(A), whichever is applicable to an applicable employer plan, for such year.
`(B) APPLICABLE EMPLOYER PLAN- The term `applicable employer plan' means--
`(i) an employees' trust described in section 401(a) which is exempt from tax under section 501(a),
`(ii) a plan under which amounts are contributed by an individual's employer for an annuity contract described in section 403(b),
`(iii) an eligible deferred compensation plan under section 457 of an eligible employer as defined in section 457(e)(1)(A), and
`(iv) an arrangement meeting the requirements of section 408 (k) or (p).
`(C) ELECTIVE DEFERRAL- The term `elective deferral' has the meaning given such term by subsection (u)(2)(C).
`(D) EXCEPTION FOR SECTION 457 PLANS- This subsection shall not apply to an applicable employer plan described in subparagraph (B)(iii) for any year to which section 457(b)(3) applies.'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to contributions in taxable years beginning after December 31, 2000.
SEC. 1332. EQUITABLE TREATMENT FOR CONTRIBUTIONS OF EMPLOYEES TO DEFINED CONTRIBUTION PLANS.
(1) IN GENERAL- Subparagraph (B) of section 415(c)(1) (relating to limitation for defined contribution plans) is amended by striking `25 percent' and inserting `100 percent'.
(2) APPLICATION TO SECTION 403(b)- Section 403(b) is amended--
(A) by striking `the exclusion allowance for such taxable year' in paragraph (1) and inserting `the applicable limit under section 415',
(B) by striking paragraph (2), and
(C) by inserting `or any amount received by a former employee after the 5th taxable year following the taxable year in which such employee was terminated' before the period at the end of the second sentence of paragraph (3).
(3) CONFORMING AMENDMENTS-
(A) Subsection (f) of section 72 is amended by striking `section 403(b)(2)(D)(iii))' and inserting `section 403(b)(2)(D)(iii), as in effect before the enactment of the Taxpayer Refund and Relief Act of 1999)'.
(B) Section 404(a)(10)(B) is amended by striking `, the exclusion allowance under section 403(b)(2),'.
(C) Section 415(a)(2) is amended by striking `, and the amount of the contribution for such portion shall reduce the exclusion allowance as provided in section 403(b)(2)'.
(D) Section 415(c)(3) is amended by adding at the end the following new subparagraph:
`(E) ANNUITY CONTRACTS- In the case of an annuity contract described in section 403(b), the term `participant's compensation' means the participant's includible compensation determined under section 403(b)(3).'.
(E) Section 415(c) is amended by striking paragraph (4).
(F) Section 415(c)(7) is amended to read as follows:
`(7) CERTAIN CONTRIBUTIONS BY CHURCH PLANS NOT TREATED AS EXCEEDING LIMIT-
`(A) IN GENERAL- Notwithstanding any other provision of this subsection, at the election of a participant who is an employee of a church or a convention or association of churches, including an organization described in section 414(e)(3)(B)(ii), contributions and other additions for an annuity contract or retirement income account described in section 403(b) with respect to such participant, when expressed as an annual addition to such participant's account, shall be treated as not exceeding the limitation of paragraph (1) if such annual addition is not in excess of $10,000.
`(B) $40,000 AGGREGATE LIMITATION- The total amount of additions with respect to any participant which may be taken into account for purposes of this subparagraph for all years may not exceed $40,000.
`(C) ANNUAL ADDITION- For purposes of this paragraph, the term `annual addition' has the meaning given such term by paragraph (2).'.
(G) Subparagraph (B) of section 402(g)(7) (as redesignated by section 1201) is amended by inserting before the period at the end the following: `(as in effect before the enactment of the Taxpayer Refund and Relief Act of 1999)'.
(3) EFFECTIVE DATE- The amendments made by this subsection shall apply to years beginning after December 31, 2000.
(b) SPECIAL RULES FOR SECTIONS 403(b) AND 408-
(1) IN GENERAL- Subsection (k) of section 415 is amended by adding at the end the following new paragraph:
`(4) SPECIAL RULES FOR SECTIONS 403(b) AND 408- For purposes of this section, any annuity contract described in section 403(b) for the benefit of a participant shall be treated as a defined contribution plan maintained by each employer with respect to which the participant has the control required under subsection (b) or (c) of section 414 (as modified by subsection (h)). For purposes of this section, any contribution by an employer to a simplified employee pension plan for an individual for a taxable year shall be treated as an employer contribution to a defined contribution plan for such individual for such year.'.
(A) IN GENERAL- The amendment made by paragraph (1) shall apply to limitation years beginning after December 31, 1999.
(B) EXCLUSION ALLOWANCE- Effective for limitation years beginning in 2000, in the case of any annuity contract described in section 403(b) of the Internal Revenue Code of 1986, the amount of the contribution disqualified by reason of section 415(g) of such Code shall reduce the exclusion allowance as provided in section 403(b)(2) of such Code.
(3) MODIFICATION OF 403(b) EXCLUSION ALLOWANCE TO CONFORM TO 415 MODIFICATION- The Secretary of the Treasury shall modify the regulations regarding the exclusion allowance under section 403(b)(2) of the Internal Revenue Code of 1986 to render void the requirement that contributions to a defined benefit pension plan be treated as previously excluded amounts for purposes of the exclusion allowance. For taxable years beginning after December 31, 1999, such regulations shall be applied as if such requirement were void.
(c) DEFERRED COMPENSATION PLANS OF STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANIZATIONS-
(1) IN GENERAL- Subparagraph (B) of section 457(b)(2) (relating to salary limitation on eligible deferred compensation plans) is amended by striking `33 1/3 percent' and inserting `100 percent'.
(2) EFFECTIVE DATE- The amendment made by this subsection shall apply to years beginning after December 31, 2000.
SEC. 1333. FASTER VESTING OF CERTAIN EMPLOYER MATCHING CONTRIBUTIONS.
(a) AMENDMENTS TO 1986 CODE- Section 411(a) (relating to minimum vesting standards) is amended--
(1) in paragraph (2), by striking `A plan' and inserting `Except as provided in paragraph (12), a plan', and
(2) by adding at the end the following:
`(12) FASTER VESTING FOR MATCHING CONTRIBUTIONS- In the case of matching contributions (as defined in section 401(m)(4)(A)), paragraph (2) shall be applied--
`(A) by substituting `3 years' for `5 years' in subparagraph (A), and
`(B) by substituting the following table for the table contained in subparagraph (B):
The nonforfeitable
`Years of service:
percentage is:
2
20
3
40
4
60
5
80
6
100.'.
(b) AMENDMENTS TO ERISA- Section 203(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(a)) is amended--
(1) in paragraph (2), by striking `A plan' and inserting `Except as provided in paragraph (4), a plan', and
(2) by adding at the end the following:
`(4) FASTER VESTING FOR MATCHING CONTRIBUTIONS- In the case of matching contributions (as defined in section 401(m)(4)(A) of the Internal Revenue Code of 1986), paragraph (2) shall be applied--
`(A) by substituting `3 years' for `5 years' in subparagraph (A), and
`(B) by substituting the following table for the table contained in subparagraph (B):
The nonforfeitable
`Years of service:
percentage is:
2
20
3
40
4
60
5
80
6
100.'.
(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to contributions for plan years beginning after December 31, 2000.
(2) COLLECTIVE BARGAINING AGREEMENTS- In the case of a plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified by the date of the enactment of this Act, the amendments made by this section shall not apply to contributions on behalf of employees covered by any such agreement for plan years beginning before the earlier of--
(i) the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof on or after such date of the enactment), or
(3) SERVICE REQUIRED- With respect to any plan, the amendments made by this section shall not apply to any employee before the date that such employee has 1 hour of service under such plan in any plan year to which the amendments made by this section apply.
SEC. 1334. SIMPLIFY AND UPDATE THE MINIMUM DISTRIBUTION RULES.
(a) SIMPLIFICATION AND FINALIZATION OF MINIMUM DISTRIBUTION REQUIREMENTS-
(1) IN GENERAL- The Secretary of the Treasury shall--
(A) simplify and finalize the regulations relating to minimum distribution requirements under sections 401(a)(9), 408(a)(6) and (b)(3), 403(b)(10), and 457(d)(2) of the Internal Revenue Code of 1986, and
(B) modify such regulations to--
(i) reflect current life expectancy, and
(ii) revise the required distribution methods so that, under reasonable assumptions, the amount of the required minimum distribution does not decrease over a participant's life expectancy.
(2) FRESH START- Notwithstanding subparagraph (D) of section 401(a)(9) of such Code, during the first year that regulations are in effect under this subsection, required distributions for future years may be redetermined to reflect changes under such regulations. Such redetermination shall include the opportunity to choose a new designated beneficiary and to elect a new method of calculating life expectancy.
(3) EFFECTIVE DATE FOR REGULATIONS- Regulations referred to in paragraph (1) shall be effective for years beginning after December 31, 2000, and shall apply in such years without regard to whether an individual had previously begun receiving minimum distributions.
(b) REPEAL OF RULE WHERE DISTRIBUTIONS HAD BEGUN BEFORE DEATH OCCURS-
(1) IN GENERAL- Subparagraph (B) of section 401(a)(9) is amended by striking clause (i) and redesignating clauses (ii), (iii), and (iv) as clauses (i), (ii), and (iii), respectively.
(A) Clause (i) of section 401(a)(9)(B) (as so redesignated) is amended--
(i) by striking `FOR OTHER CASES' in the heading, and
(ii) by striking `the distribution of the employee's interest has begun in accordance with subparagraph (A)(ii)' and inserting `his entire interest has been distributed to him,'.
(B) Clause (ii) of section 401(a)(9)(B) (as so redesignated) is amended by striking `clause (ii)' and inserting `clause (i)'.
(C) Clause (iii) of section 401(a)(9)(B) (as so redesignated) is amended--
(i) by striking `clause (iii)(I)' and inserting `clause (ii)(I)',
(ii) by striking `clause (iii)(III)' in subclause (I) and inserting `clause (ii)(III)',
(iii) by striking `the date on which the employee would have attained the age 70 1/2 ,' in subclause (I) and inserting `April 1 of the calendar year following the calendar year in which the spouse attains 70 1/2 ,', and
(iv) by striking `the distributions to such spouse begin,' in subclause (II) and inserting `his entire interest has been distributed to him,'.
(3) EFFECTIVE DATE- The amendments made by this subsection shall apply to years beginning after December 31, 2000.
(c) REDUCTION IN EXCISE TAX-
(1) IN GENERAL- Subsection (a) of section 4974 is amended by striking `50 percent' and inserting `10 percent'.
(2) EFFECTIVE DATE- The amendment made by this subsection shall apply to years beginning after December 31, 2000.
SEC. 1335. CLARIFICATION OF TAX TREATMENT OF DIVISION OF SECTION 457 PLAN BENEFITS UPON DIVORCE.
(a) IN GENERAL- Section 414(p)(11) (relating to application of rules to governmental and church plans) is amended--
(1) by inserting `or an eligible deferred compensation plan (within the meaning of section 457(b))' after `subsection (e))', and
(2) in the heading, by striking `GOVERNMENTAL AND CHURCH PLANS' and inserting `CERTAIN OTHER PLANS'.
(b) WAIVER OF CERTAIN DISTRIBUTION REQUIREMENTS- Paragraph (10) of section 414(p) is amended by striking `and section 409(d)' and inserting `section 409(d), and section 457(d)'.
(c) TAX TREATMENT OF PAYMENTS FROM A SECTION 457 PLAN- Subsection (p) of section 414 is amended by redesignating paragraph (12) as paragraph (13) and inserting after paragraph (11) the following new paragraph:
`(12) TAX TREATMENT OF PAYMENTS FROM A SECTION 457 PLAN- If a distribution or payment from an eligible deferred compensation plan described in section 457(b) is made pursuant to a qualified domestic relations order, rules similar to the rules of section 402(e)(1)(A) shall apply to such distribution or payment.'.
(d) EFFECTIVE DATE- The amendments made by this section shall apply to transfers, distributions, and payments made after December 31, 2000.
SEC. 1336. MODIFICATION OF SAFE HARBOR RELIEF FOR HARDSHIP WITHDRAWALS FROM CASH OR DEFERRED ARRANGEMENTS.
(a) IN GENERAL- The Secretary of the Treasury shall revise the regulations relating to hardship distributions under section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 1986 to provide that the period an employee is prohibited from making elective and employee contributions in order for a distribution to be deemed necessary to satisfy financial need shall be equal to 6 months.
(b) EFFECTIVE DATE- The revised regulations under subsection (a) shall apply to years beginning after December 31, 2000.
PART III--INCREASING PORTABILITY FOR PARTICIPANTS
SEC. 1341. ROLLOVERS ALLOWED AMONG VARIOUS TYPES OF PLANS.
(a) ROLLOVERS FROM AND TO SECTION 457 PLANS-
(1) ROLLOVERS FROM SECTION 457 PLANS-
(A) IN GENERAL- Section 457(e) (relating to other definitions and special rules) is amended by adding at the end the following:
`(A) GENERAL RULE- In the case of an eligible deferred compensation plan established and maintained by an employer described in subsection (e)(1)(A), if--
`(i) any portion of the balance to the credit of an employee in such plan is paid to such employee in an eligible rollover distribution (within the meaning of section 402(c)(4) without regard to subparagraph (C) thereof),
`(ii) the employee transfers any portion of the property such employee receives in such distribution to an eligible retirement plan described in section 402(c)(8)(B), and
`(iii) in the case of a distribution of property other than money, the amount so transferred consists of the property distributed,
then such distribution (to the extent so transferred) shall not be includible in gross income for the taxable year in which paid.
`(B) CERTAIN RULES MADE APPLICABLE- The rules of paragraphs (2) through (7) (other than paragraph (4)(C)) and (9) of section 402(c) and section 402(f) shall apply for purposes of subparagraph (A).
`(C) REPORTING- Rollovers under this paragraph shall be reported to the Secretary in the same manner as rollovers from qualified retirement plans (as defined in section 4974(c)).'.
(B) DEFERRAL LIMIT DETERMINED WITHOUT REGARD TO ROLLOVER AMOUNTS- Section 457(b)(2) (defining eligible deferred compensation plan) is amended by inserting `(other than rollover amounts)' after `taxable year'.
(C) DIRECT ROLLOVER- Paragraph (1) of section 457(d) is amended by striking `and' at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting `, and', and by inserting after subparagraph (B) the following:
`(C) in the case of a plan maintained by an employer described in subsection (e)(1)(A), the plan meets requirements similar to the requirements of section 401(a)(31).
Any amount transferred in a direct trustee-to-trustee transfer in accordance with section 401(a)(31) shall not be includible in gross income for the taxable year of transfer.'.
(i) Paragraph (12) of section 3401(a) is amended by adding at the end the following:
`(E) under or to an eligible deferred compensation plan which, at the time of such payment, is a plan described in section 457(b) maintained by an employer described in section 457(e)(1)(A); or'.
(ii) Paragraph (3) of section 3405(c) is amended to read as follows:
`(3) ELIGIBLE ROLLOVER DISTRIBUTION- For purposes of this subsection, the term `eligible rollover distribution' has the meaning given such term by section 402(f)(2)(A).'.
(iii) LIABILITY FOR WITHHOLDING- Subparagraph (B) of section 3405(d)(2) is amended by striking `or' at the end of clause (ii), by striking the period at the end of clause (iii) and inserting `, or', and by adding at the end the following:
(2) ROLLOVERS TO SECTION 457 PLANS-
(A) IN GENERAL- Section 402(c)(8)(B) (defining eligible retirement plan) is amended by striking `and' at the end of clause (iii), by striking the period at the end of clause (iv) and inserting `, and', and by inserting after clause (iv) the following new clause:
`(v) an eligible deferred compensation plan described in section 457(b) of an employer described in section 457(e)(1)(A).'.
(B) SEPARATE ACCOUNTING- Section 402(c) is amended by adding at the end the following new paragraph:
`(11) SEPARATE ACCOUNTING- Unless a plan described in clause (v) of paragraph (8)(B) agrees to separately account for amounts rolled into such plan from eligible retirement plans not described in such clause, the plan described in such clause may not accept transfers or rollovers from such retirement plans.'.
(C) 10 PERCENT ADDITIONAL TAX- Subsection (t) of section 72 (relating to 10-percent additional tax on early distributions from qualified retirement plans) is amended by adding at the end the following new paragraph:
`(9) SPECIAL RULE FOR ROLLOVERS TO SECTION 457 PLANS- For purposes of this subsection, a distribution from an eligible deferred compensation plan (as defined in section 457(b)) of an employer described in section 457(e)(1)(A) shall be treated as a distribution from a qualified retirement plan described in 4974(c)(1) to the extent that such distribution is attributable to an amount transferred to an eligible deferred compensation plan from a qualified retirement plan (as defined in section 4974(c)).'.
(b) ALLOWANCE OF ROLLOVERS FROM AND TO 403 (b) PLANS-
(1) ROLLOVERS FROM SECTION 403 (b) PLANS- Section 403(b)(8)(A)(ii) (relating to rollover amounts) is amended by striking `such distribution' and all that follows and inserting `such distribution to an eligible retirement plan described in section 402(c)(8)(B), and'.
(2) ROLLOVERS TO SECTION 403 (b) PLANS- Section 402(c)(8)(B) (defining eligible retirement plan), as amended by subsection (a), is amended by striking `and' at the end of clause (iv), by striking the period at the end of clause (v) and inserting `, and', and by inserting after clause (v) the following new clause:
`(vi) an annuity contract described in section 403(b).'.
(c) EXPANDED EXPLANATION TO RECIPIENTS OF ROLLOVER DISTRIBUTIONS- Paragraph (1) of section 402(f) (relating to written explanation to recipients of distributions eligible for rollover treatment) is amended by striking `and' at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting `, and', and by adding at the end the following new subparagraph:
`(E) of the provisions under which distributions from the eligible retirement plan receiving the distribution may be subject to restrictions and tax consequences which are different from those applicable to distributions from the plan making such distribution.'.
(d) SPOUSAL ROLLOVERS- Section 402(c)(9) (relating to rollover where spouse receives distribution after death of employee) is amended by striking `; except that' and all that follows up to the end period.
(e) CONFORMING AMENDMENTS-
(1) Section 72(o)(4) is amended by striking `and 408(d)(3)' and inserting `403(b)(8), 408(d)(3), and 457(e)(16)'.
(2) Section 219(d)(2) is amended by striking `or 408(d)(3)' and inserting `408(d)(3), or 457(e)(16)'.
(3) Section 401(a)(31)(B) is amended by striking `and 403(a)(4)' and inserting `, 403(a)(4), 403(b)(8), and 457(e)(16)'.
(4) Subparagraph (A) of section 402(f)(2) is amended by striking `or paragraph (4) of section 403(a)' and inserting `, paragraph (4) of section 403(a), subparagraph (A) of section 403(b)(8), or subparagraph (A) of section 457(e)(16)'.
(5) Paragraph (1) of section 402(f) is amended by striking `from an eligible retirement plan'.
(6) Subparagraphs (A) and (B) of section 402(f)(1) are amended by striking `another eligible retirement plan' and inserting `an eligible retirement plan'.
(7) Subparagraph (B) of section 403(b)(8) is amended to read as follows:
`(B) CERTAIN RULES MADE APPLICABLE- The rules of paragraphs (2) through (7) and (9) of section 402(c) and section 402(f) shall apply for purposes of subparagraph (A), except that section 402(f) shall be applied to the payor in lieu of the plan administrator.'.
(8) Section 408(a)(1) is amended by striking `or 403(b)(8)' and inserting `, 403(b)(8), or 457(e)(16)'.
(9) Subparagraphs (A) and (B) of section 415(b)(2) are each amended by striking `and 408(d)(3)' and inserting `403(b)(8), 408(d)(3), and 457(e)(16)'.
(10) Section 415(c)(2) is amended by striking `and 408(d)(3)' and inserting `408(d)(3), and 457(e)(16)'.
(11) Section 4973(b)(1)(A) is amended by striking `or 408(d)(3)' and inserting `408(d)(3), or 457(e)(16)'.
(f) EFFECTIVE DATE; SPECIAL RULE-
(1) EFFECTIVE DATE- The amendments made by this section shall apply to distributions after December 31, 2000.
(2) SPECIAL RULE- Notwithstanding any other provision of law, subsections (h)(3) and (h)(5) of section 1122 of the Tax Reform Act of 1986 shall not apply to any distribution from an eligible retirement plan (as defined in clause (iii) or (iv) of section 402(c)(8)(B) of the Internal Revenue Code of 1986) on behalf of an individual if there was a rollover to such plan on behalf of such individual which is permitted solely by reason of any amendment made by this section.
SEC. 1342. ROLLOVERS OF IRAS INTO WORKPLACE RETIREMENT PLANS.
(a) IN GENERAL- Subparagraph (A) of section 408(d)(3) (relating to rollover amounts) is amended by adding `or' at the end of clause (i), by striking clauses (ii) and (iii), and by adding at the end the following:
`(ii) the entire amount received (including money and any other property) is paid into an eligible retirement plan for the benefit of such individual not later than the 60th day after the date on which the payment or distribution is received, except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross income (determined without regard to this paragraph).
For purposes of clause (ii), the term `eligible retirement plan' means an eligible retirement plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B).'.
(b) CONFORMING AMENDMENTS-
(1) Paragraph (1) of section 403(b) is amended by striking `section 408(d)(3)(A)(iii)' and inserting `section 408(d)(3)(A)(ii)'.
(2) Clause (i) of section 408(d)(3)(D) is amended by striking `(i), (ii), or (iii)' and inserting `(i) or (ii)'.
(3) Subparagraph (G) of section 408(d)(3) is amended to read as follows:
`(G) SIMPLE RETIREMENT ACCOUNTS- In the case of any payment or distribution out of a simple retirement account (as defined in subsection (p)) to which section 72(t)(6) applies, this paragraph shall not apply unless such payment or distribution is paid into another simple retirement account.'.
(c) EFFECTIVE DATE; SPECIAL RULE-
(1) EFFECTIVE DATE- The amendments made by this section shall apply to distributions after December 31, 2000.
(2) SPECIAL RULE- Notwithstanding any other provision of law, subsections (h)(3) and (h)(5) of section 1122 of the Tax Reform Act of 1986 shall not apply to any distribution from an eligible retirement plan (as defined in clause (iii) or (iv) of section 402(c)(8)(B) of the Internal Revenue Code of 1986) on behalf of an individual if there was a rollover to such plan on behalf of such individual which is permitted solely by reason of the amendments made by this section.
SEC. 1343. ROLLOVERS OF AFTER-TAX CONTRIBUTIONS.
(a) ROLLOVERS FROM EXEMPT TRUSTS- Paragraph (2) of section 402(c) (relating to maximum amount which may be rolled over) is amended by adding at the end the following: `The preceding sentence shall not apply to such distribution to the extent--
`(A) such portion is transferred in a direct trustee-to-trustee transfer to a qualified trust which is part of a plan which is a defined contribution plan and which agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible, or
`(B) such portion is transferred to an eligible retirement plan described in clause (i) or (ii) of paragraph (8)(B).'.
(b) OPTIONAL DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS- Subparagraph (B) of section 401(a)(31) (relating to limitation) is amended by adding at the end the following: `The preceding sentence shall not apply to such distribution if the plan to which such distribution is transferred--
`(i) agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible, or
`(ii) is an eligible retirement plan described in clause (i) or (ii) of section 402(c)(8)(B).'.
(c) RULES FOR APPLYING SECTION 72 TO IRAS- Paragraph (3) of section 408(d) (relating to special rules for applying section 72) is amended by inserting at the end the following:
`(H) APPLICATION OF SECTION 72-
`(I) a distribution is made from an individual retirement plan, and
`(II) a rollover contribution is made to an eligible retirement plan described in section 402(c)(8)(B)(iii), (iv), (v), or (vi) with respect to all or part of such distribution,
then, notwithstanding paragraph (2), the rules of clause (ii) shall apply for purposes of applying section 72.
`(ii) APPLICABLE RULES- In the case of a distribution described in clause (i)--
`(I) section 72 shall be applied separately to such distribution,
`(II) notwithstanding the pro rata allocation of income on, and investment in, the contract to distributions under section 72, the portion of such distribution rolled over to an eligible retirement plan described in clause (i) shall be treated as from income on the contract (to the extent of the aggregate income on the contract from all individual retirement plans of the distributee), and
`(III) appropriate adjustments shall be made in applying section 72 to other distributions in such taxable year and subsequent taxable years.'.
(d) EFFECTIVE DATE- The amendments made by this section shall apply to distributions made after December 31, 2000.
SEC. 1344. HARDSHIP EXCEPTION TO 60-DAY RULE.
(a) EXEMPT TRUSTS- Paragraph (3) of section 402(c) (relating to transfer must be made within 60 days of receipt) is amended to read as follows:
`(3) TRANSFER MUST BE MADE WITHIN 60 DAYS OF RECEIPT-
`(A) IN GENERAL- Except as provided in subparagraph (B), paragraph (1) shall not apply to any transfer of a distribution made after the 60th day following the day on which the distributee received the property distributed.
`(B) HARDSHIP EXCEPTION- The Secretary may waive the 60-day requirement under subparagraph (A) where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to such requirement.'.
(b) IRAS- Paragraph (3) of section 408(d) (relating to rollover contributions), as amended by section 1343, is amended by adding after subparagraph (H) the following new subparagraph:
`(I) WAIVER OF 60-DAY REQUIREMENT- The Secretary may waive the 60-day requirement under subparagraphs (A) and (D) where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to such requirement.'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to distributions after December 31, 2000.
SEC. 1345. TREATMENT OF FORMS OF DISTRIBUTION.
(1) AMENDMENT TO INTERNAL REVENUE CODE OF 1986- Paragraph (6) of section 411(d) (relating to accrued benefit not to be decreased by amendment) is amended by adding at the end the following:
`(i) A defined contribution plan (in this subparagraph referred to as the `transferee plan') shall not be treated as failing to meet the requirements of this subsection merely because the transferee plan does not provide some or all of the forms of distribution previously available under another defined contribution plan (in this subparagraph referred to as the `transferor plan') to the extent that--
`(I) the forms of distribution previously available under the transferor plan applied to the account of a participant or beneficiary under the transferor plan that was transferred from the transferor plan to the transferee plan pursuant to a direct transfer rather than pursuant to a distribution from the transferor plan,
`(II) the terms of both the transferor plan and the transferee plan authorize the transfer described in subclause (I),
`(III) the transfer described in subclause (I) was made pursuant to a voluntary election by the participant or beneficiary whose account was transferred to the transferee plan,
`(IV) the election described in subclause (III) was made after the participant or beneficiary received a notice describing the consequences of making the election,
`(V) if the transferor plan provides for an annuity as the normal form of distribution under the plan in accordance with section 417, the transfer is made with the consent of the participant's spouse (if any), and such consent meets requirements similar to the requirements imposed by section 417(a)(2), and
`(VI) the transferee plan allows the participant or beneficiary described in clause (iii) to receive any distribution to which the participant or beneficiary is entitled under the transferee plan in the form of a single sum distribution.
`(ii) Clause (i) shall apply to plan mergers and other transactions having the effect of a direct transfer, including consolidations of benefits attributable to different employers within a multiple employer plan.
`(E) ELIMINATION OF FORM OF DISTRIBUTION- Except to the extent provided in regulations, a defined contribution plan shall not be treated as failing to meet the requirements of this section merely because of the elimination of a form of distribution previously available thereunder. This subparagraph shall not apply to the elimination of a form of distribution with respect to any participant unless--
`(i) a single sum payment is available to such participant at the same time or times as the form of distribution being eliminated, and
`(ii) such single sum payment is based on the same or greater portion of the participant's account as the form of distribution being eliminated.'.
(2) AMENDMENT TO ERISA- Section 204(g) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1054(g)) is amended by adding at the end the following:
`(4)(A) A defined contribution plan (in this subparagraph referred to as the `transferee plan') shall not be treated as failing to meet the requirements of this subsection merely because the transferee plan does not provide some or all of the forms of distribution previously available under another defined contribution plan (in this subparagraph referred to as the `transferor plan') to the extent that--
`(i) the forms of distribution previously available under the transferor plan applied to the account of a participant or beneficiary under the transferor plan that was transferred from the transferor plan to the transferee plan pursuant to a direct transfer rather than pursuant to a distribution from the transferor plan;
`(ii) the terms of both the transferor plan and the transferee plan authorize the transfer described in clause (i);
`(iii) the transfer described in clause (i) was made pursuant to a voluntary election by the participant or beneficiary whose account was transferred to the transferee plan;
`(iv) the election described in clause (iii) was made after the participant or beneficiary received a notice describing the consequences of making the election;
`(v) if the transferor plan provides for an annuity as the normal form of distribution under the plan in accordance with section 205, the transfer is made with the consent of the participant's spouse (if any), and such consent meets requirements similar to the requirements imposed by section 205(c)(2); and
`(vi) the transferee plan allows the participant or beneficiary described in clause (iii) to receive any distribution to which the participant or beneficiary is entitled under the transferee plan in the form of a single sum distribution.
`(B) Subparagraph (A) shall apply to plan mergers and other transactions having the effect of a direct transfer, including consolidations of benefits attributable to different employers within a multiple employer plan.
`(5) ELIMINATION OF FORM OF DISTRIBUTION- Except to the extent provided in regulations, a defined contribution plan shall not be treated as failing to meet the requirements of this section merely because of the elimination of a form of distribution previously available thereunder. This paragraph shall not apply to the elimination of a form of distribution with respect to any participant unless--
`(A) a single sum payment is available to such participant at the same time or times as the form of distribution being eliminated; and
`(B) such single sum payment is based on the same or greater portion of the participant's account as the form of distribution being eliminated.'.
(3) EFFECTIVE DATE- The amendments made by this subsection shall apply to years beginning after December 31, 2000.
(1) AMENDMENT TO INTERNAL REVENUE CODE OF 1986- The last sentence of paragraph (6)(B) of section 411(d) (relating to accrued benefit not to be decreased by amendment) is amended to read as follows: `The Secretary shall by regulations provide that this subparagraph shall not apply to any plan amendment that does not adversely affect the rights of participants in a material manner.'.
(2) AMENDMENT TO ERISA- The last sentence of section 204(g)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1054(g)(2)) is amended to read as follows: `The Secretary of the Treasury shall by regulations provide that this paragraph shall not apply to any plan amendment that does not adversely affect the rights of participants in a material manner.'.
(3) SECRETARY DIRECTED- Not later than December 31, 2001, the Secretary of the Treasury is directed to issue final regulations under section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974, including the regulations required by the amendments made by this subsection. Such regulations shall apply to plan years beginning after December 31, 2001, or such earlier date as is specified by the Secretary of the Treasury.
SEC. 1346. RATIONALIZATION OF RESTRICTIONS ON DISTRIBUTIONS.
(a) MODIFICATION OF SAME DESK EXCEPTION-
(A) Section 401(k)(2)(B)(i)(I) (relating to qualified cash or deferred arrangements) is amended by striking `separation from service' and inserting `severance from employment'.
(B) Subparagraph (A) of section 401(k)(10) (relating to distributions upon termination of plan or disposition of assets or subsidiary) is amended to read as follows:
`(A) IN GENERAL- An event described in this subparagraph is the termination of the plan without establishment or maintenance of another defined contribution plan (other than an employee stock ownership plan as defined in section 4975(e)(7)).'.
(C) Section 401(k)(10) is amended--
(i) in subparagraph (B)--
(I) by striking `An event' in clause (i) and inserting `A termination', and
(II) by striking `the event' in clause (i) and inserting `the termination',
(ii) by striking subparagraph (C), and
(iii) by striking `OR DISPOSITION OF ASSETS OR SUBSIDIARY' in the heading.
(A) Paragraphs (7)(A)(ii) and (11)(A) of section 403(b) are each amended by striking `separates from service' and inserting `has a severance from employment'.
(B) The heading for paragraph (11) of section 403(b) is amended by striking `SEPARATION FROM SERVICE' and inserting `SEVERANCE FROM EMPLOYMENT'.
(3) SECTION 457- Clause (ii) of section 457(d)(1)(A) is amended by striking `is separated from service' and inserting `has a severance from employment'.
(b) EFFECTIVE DATE- The amendments made by this section shall apply to distributions after December 31, 2000.
SEC. 1347. PURCHASE OF SERVICE CREDIT IN GOVERNMENTAL DEFINED BENEFIT PLANS.
(a) 403(b) PLANS- Subsection (b) of section 403 is amended by adding at the end the following new paragraph:
`(13) TRUSTEE-TO-TRUSTEE TRANSFERS TO PURCHASE PERMISSIVE SERVICE CREDIT- No amount shall be includible in gross income by reason of a direct trustee-to-trustee transfer to a defined benefit governmental plan (as defined in section 414(d)) if such transfer is--
`(A) for the purchase of permissive service credit (as defined in section 415(n)(3)(A)) under such plan, or
`(B) a repayment to which section 415 does not apply by reason of subsection (k)(3) thereof.'.
(1) Subsection (e) of section 457 is amended by adding after paragraph (16) the following new paragraph:
`(17) TRUSTEE-TO-TRUSTEE TRANSFERS TO PURCHASE PERMISSIVE SERVICE CREDIT- No amount shall be includible in gross income by reason of a direct trustee-to-trustee transfer to a defined benefit governmental plan (as defined in section 414(d)) if such transfer is--
`(A) for the purchase of permissive service credit (as defined in section 415(n)(3)(A)) under such plan, or
`(B) a repayment to which section 415 does not apply by reason of subsection (k)(3) thereof.'.
(2) Section 457(b)(2) is amended by striking `(other than rollover amounts)' and inserting `(other than rollover amounts and amounts received in a transfer referred to in subsection (e)(17))'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to trustee-to-trustee transfers after December 31, 2000.
SEC. 1348. EMPLOYERS MAY DISREGARD ROLLOVERS FOR PURPOSES OF CASH-OUT AMOUNTS.
(1) AMENDMENT TO INTERNAL REVENUE CODE OF 1986- Section 411(a)(11) (relating to restrictions on certain mandatory distributions) is amended by adding at the end the following:
`(D) SPECIAL RULE FOR ROLLOVER CONTRIBUTIONS- A plan shall not fail to meet the requirements of this paragraph if, under the terms of the plan, the present value of the nonforfeitable accrued benefit is determined without regard to that portion of such benefit which is attributable to rollover contributions (and earnings allocable thereto). For purposes of this subparagraph, the term `rollover contributions' means any rollover contribution under sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).'.
(2) AMENDMENT TO ERISA- Section 203(e) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(c)) is amended by adding at the end the following:
`(4) A plan shall not fail to meet the requirements of this subsection if, under the terms of the plan, the present value of the nonforfeitable accrued benefit is determined without regard to that portion of such benefit which is attributable to rollover contributions (and earnings allocable thereto). For purposes of this subparagraph, the term `rollover contributions' means any rollover contribution under sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Internal Revenue Code of 1986.'.
(b) ELIGIBLE DEFERRED COMPENSATION PLANS- Clause (i) of section 457(e)(9)(A) is amended by striking `such amount' and inserting `the portion of such amount which is not attributable to rollover contributions (as defined in section 411(a)(11)(D))'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to distributions after December 31, 2000.
SEC. 1349. MINIMUM DISTRIBUTION AND INCLUSION REQUIREMENTS FOR SECTION 457 PLANS.
(a) MINIMUM DISTRIBUTION REQUIREMENTS- Paragraph (2) of section 457(d) (relating to distribution requirements) is amended to read as follows:
`(2) MINIMUM DISTRIBUTION REQUIREMENTS- A plan meets the minimum distribution requirements of this paragraph if such plan meets the requirements of section 401(a)(9).'.
(b) INCLUSION IN GROSS INCOME-
(1) YEAR OF INCLUSION- Subsection (a) of section 457 (relating to year of inclusion in gross income) is amended to read as follows:
`(a) YEAR OF INCLUSION IN GROSS INCOME-
`(1) IN GENERAL- Any amount of compensation deferred under an eligible deferred compensation plan, and any income attributable to the amounts so deferred, shall be includible in gross income only for the taxable year in which such compensation or other income--
`(A) is paid to the participant or other beneficiary, in the case of a plan of an eligible employer described in subsection (e)(1)(A), and
`(B) is paid or otherwise made available to the participant or other beneficiary, in the case of a plan of an eligible employer described in subsection (e)(1)(B).
`(2) SPECIAL RULE FOR ROLLOVER AMOUNTS- To the extent provided in section 72(t)(9), section 72(t) shall apply to any amount includible in gross income under this subsection.'.
(2) CONFORMING AMENDMENTS-
(A) So much of paragraph (9) of section 457(e) as precedes subparagraph (A) is amended to read as follows:
`(9) BENEFITS OF TAX EXEMPT ORGANIZATION PLANS NOT TREATED AS MADE AVAILABLE BY REASON OF CERTAIN ELECTIONS, ETC- In the case of an eligible deferred compensation plan of an employer described in subsection (e)(1)(B)--'.
(B) Section 457(d) is amended by adding at the end the following new paragraph:
`(3) SPECIAL RULE FOR GOVERNMENT PLAN- An eligible deferred compensation plan of an employer described in subsection (e)(1)(A) shall not be treated as failing to meet the requirements of this subsection solely by reason of making a distribution described in subsection (e)(9)(A).'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to distributions after December 31, 2000.
PART IV--STRENGTHENING PENSION SECURITY AND ENFORCEMENT
SEC. 1351. REPEAL OF 150 PERCENT OF CURRENT LIABILITY FUNDING LIMIT.
(a) AMENDMENT TO INTERNAL REVENUE CODE OF 1986- Section 412(c)(7) (relating to full-funding limitation) is amended--
(1) by striking `the applicable percentage' in subparagraph (A)(i)(I) and inserting `in the case of plan years beginning before January 1, 2004, the applicable percentage', and
(2) by amending subparagraph (F) to read as follows:
`(F) APPLICABLE PERCENTAGE- For purposes of subparagraph (A)(i)(I), the applicable percentage shall be determined in accordance with the following table:
`In the case of any plan year
The applicable
beginning in--
percentage is--
2001
160
2002
165
2003
170.'.
(b) AMENDMENT TO ERISA- Section 302(c)(7) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1082(c)(7)) is amended--
(1) by striking `the applicable percentage' in subparagraph (A)(i)(I) and inserting `in the case of plan years beginning before January 1, 2004, the applicable percentage', and
(2) by amending subparagraph (F) to read as follows:
`(F) APPLICABLE PERCENTAGE- For purposes of subparagraph (A)(i)(I), the applicable percentage shall be determined in accordance with the following table:
`In the case of any plan year
The applicable
beginning in--
percentage is--
2001
160
2002
165
2003
170.'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to plan years beginning after December 31, 2000.
SEC. 1352. MAXIMUM CONTRIBUTION DEDUCTION RULES MODIFIED AND APPLIED TO ALL DEFINED BENEFIT PLANS.
(a) IN GENERAL- Subparagraph (D) of section 404(a)(1) (relating to special rule in case of certain plans) is amended to read as follows:
`(D) SPECIAL RULE IN CASE OF CERTAIN PLANS-
`(i) IN GENERAL- In the case of any defined benefit plan, except as provided in regulations, the maximum amount deductible under the limitations of this paragraph shall not be less than the unfunded termination liability (determined as if the proposed termination date referred to in section 4041(b)(2)(A)(i)(II) of the Employee Retirement Income Security Act of 1974 were the last day of the plan year).
`(ii) PLANS WITH LESS THAN 100 PARTICIPANTS- For purposes of this subparagraph, in the case of a plan which has less than 100 participants for the plan year, termination liability shall not include the liability attributable to benefit increases for highly compensated employees (as defined in section 414(q)) resulting from a plan amendment which is made or becomes effective, whichever is later, within the last 2 years before the termination date.
`(iii) RULE FOR DETERMINING NUMBER OF PARTICIPANTS- For purposes of determining whether a plan has more than 100 participants, all defined benefit plans maintained by the same employer (or any member of such employer's controlled group (within the meaning of section 412(l)(8)(C))) shall be treated as one plan, but only employees of such member or employer shall be taken into account.
`(iv) PLANS ESTABLISHED AND MAINTAIN BY PROFESSIONAL SERVICE EMPLOYERS- Clause (i) shall not apply to a plan described in section 4021(b)(13) of the Employee Retirement Income Security Act of 1974.'.
(b) CONFORMING AMENDMENT- Paragraph (6) of section 4972(c) is amended to read as follows:
`(6) EXCEPTIONS- In determining the amount of nondeductible contributions for any taxable year, there shall not be taken into account so much of the contributions to one or more defined contribution plans which are not deductible when contributed solely because of section 404(a)(7) as does not exceed the greater of--
`(A) the amount of contributions not in excess of 6 percent of compensation (within the meaning of section 404(a)) paid or accrued (during the taxable year for which the contributions were made) to beneficiaries under the plans, or
`(i) the amount of contributions described in section 401(m)(4)(A), plus
`(ii) the amount of contributions described in section 402(g)(3)(A).
For purposes of this paragraph, the deductible limits under section 404(a)(7) shall first be applied to amounts contributed to a defined benefit plan and then to amounts described in subparagraph (B).'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to plan years beginning after December 31, 2000.
SEC. 1353. EXCISE TAX RELIEF FOR SOUND PENSION FUNDING.
(a) IN GENERAL- Subsection (c) of section 4972 (relating to nondeductible contributions) is amended by adding at the end the following new paragraph:
`(7) DEFINED BENEFIT PLAN EXCEPTION- In determining the amount of nondeductible contributions for any taxable year, an employer may elect for such year not to take into account any contributions to a defined benefit plan except to the extent that such contributions exceed the full-funding limitation (as defined in section 412(c)(7), determined without regard to subparagraph (A)(i)(I) thereof). For purposes of this paragraph, the deductible limits under section 404(a)(7) shall first be applied to amounts contributed to defined contribution plans and then to amounts described in this paragraph. If an employer makes an election under this paragraph for a taxable year, paragraph (6) shall not apply to such employer for such taxable year.'.
(b) EFFECTIVE DATE- The amendments made by this section shall apply to years beginning after December 31, 2000.
SEC. 1354. EXCISE TAX ON FAILURE TO PROVIDE NOTICE BY DEFINED BENEFIT PLANS SIGNIFICANTLY REDUCING FUTURE BENEFIT ACCRUALS.
(a) AMENDMENT TO 1986 CODE- Chapter 43 of subtitle D (relating to qualified pension, etc., plans) is amended by adding at the end the following new section:
`SEC. 4980F. FAILURE OF APPLICABLE PLANS REDUCING BENEFIT ACCRUALS TO SATISFY NOTICE REQUIREMENTS.
`(a) IMPOSITION OF TAX- There is hereby imposed a tax on the failure of any applicable pension plan to meet the requirements of subsection (e) with respect to any applicable individual.
`(1) IN GENERAL- The amount of the tax imposed by subsection (a) on any failure with respect to any applicable individual shall be $100 for each day in the noncompliance period with respect to such failure.
`(2) NONCOMPLIANCE PERIOD- For purposes of this section, the term `noncompliance period' means, with respect to any failure, the period beginning on the date the failure first occurs and ending on the date the failure is corrected.
`(c) LIMITATIONS ON AMOUNT OF TAX-
`(1) OVERALL LIMITATION FOR UNINTENTIONAL FAILURES- In the case of failures that are due to reasonable cause and not to willful neglect, the tax imposed by subsection (a) for failures during the taxable year of the employer (or, in the case of a multiemployer plan, the taxable year of the trust forming part of the plan) shall not exceed $500,000. For purposes of the preceding sentence, all multiemployer plans of which the same trust forms a part shall be treated as one plan. For purposes of this paragraph, if not all persons who are treated as a single employer for purposes of this section have the same taxable year, the taxable years taken into account shall be determined under principles similar to the principles of section 1561.
`(2) WAIVER BY SECRETARY- In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the tax imposed by subsection (a) to the extent that the payment of such tax would be excessive relative to the failure involved.
`(d) LIABILITY FOR TAX- The following shall be liable for the tax imposed by subsection (a):
`(1) In the case of a plan other than a multiemployer plan, the employer.
`(2) In the case of a multiemployer plan, the plan.
`(e) NOTICE REQUIREMENTS FOR PLANS SIGNIFICANTLY REDUCING BENEFIT ACCRUALS-
`(1) IN GENERAL- If an applicable pension plan is amended to provide for a significant reduction in the rate of future benefit accrual, the plan administrator shall provide written notice to each applicable individual (and to each employee organization representing applicable individuals).
`(2) NOTICE- The notice required by paragraph (1) shall be written in a manner calculated to be understood by the average plan participant and shall provide sufficient information (as determined in accordance with regulations prescribed by the Secretary) to allow applicable individuals to understand the effect of the plan amendment.
`(3) TIMING OF NOTICE- Except as provided in regulations, the notice required by paragraph (1) shall be provided within a reasonable time before the effective date of the plan amendment.
`(4) DESIGNEES- Any notice under paragraph (1) may be provided to a person designated, in writing, by the person to which it would otherwise be provided.
`(5) NOTICE BEFORE ADOPTION OF AMENDMENT- A plan shall not be treated as failing to meet the requirements of paragraph (1) merely because notice is provided before the adoption of the plan amendment if no material modification of the amendment occurs before the amendment is adopted.
`(f) APPLICABLE INDIVIDUAL; APPLICABLE PENSION PLAN- For purposes of this section--
`(1) APPLICABLE INDIVIDUAL- The term `applicable individual' means, with respect to any plan amendment--
`(A) any participant in the plan, and
`(B) any beneficiary who is an alternate payee (within the meaning of section 414(p)(8)) under an applicable qualified domestic relations order (within the meaning of section 414(p)(1)(A)),
who may reasonably be expected to be affected by such plan amendment.
`(2) APPLICABLE PENSION PLAN- The term `applicable pension plan' means--
`(A) any defined benefit plan, or
`(B) an individual account plan which is subject to the funding standards of section 412,
which had 100 or more participants who had accrued a benefit, or with respect to whom contributions were made, under the plan (whether or not vested) as of the last day of the plan year preceding the plan year in which the plan amendment becomes effective. Such term shall not include a governmental plan (within the meaning of section 414(d)) or a church plan (within the meaning of section 414(e)) with respect to which the election provided by section 410(d) has not been made.'.
(b) AMENDMENT TO ERISA- Section 204(h) of the Employee Retirement Income Security Act or 1974 (29 U.S.C. 1054(h)) is amended by adding at the end the following new paragraph:
`(3)(A) A plan to which paragraph (1) applies shall not be treated as meeting the requirements of such paragraph unless, in addition to any notice required to be provided to an individual or organization under such paragraph, the plan administrator provides the notice described in subparagraph (B).
`(B) The notice required by subparagraph (A) shall be written in a manner calculated to be understood by the average plan participant and shall provide sufficient information (as determined in accordance with regulations prescribed by the Secretary of the Treasury) to allow individuals to understand the effect of the plan amendment.
`(C) Except as provided in regulations prescribed by the Secretary of the Treasury, the notice required by subparagraph (A) shall be provided within a reasonable time before the effective date of the plan amendment.
`(D) A plan shall not be treated as failing to meet the requirements of subparagraph (A) merely because notice is provided before the adoption of the plan amendment if no material modification of the amendment occurs before the amendment is adopted.'.
(c) CLERICAL AMENDMENT- The table of sections for chapter 43 of subtitle D is amended by adding at the end the following new item:
`Sec. 4980F. Failure of applicable plans reducing benefit accruals to satisfy notice requirements.'.
(1) IN GENERAL- The amendments made by this section shall apply to plan amendments taking effect on or after the date of the enactment of this Act.
(2) TRANSITION- Until such time as the Secretary of the Treasury issues regulations under sections 4980F(e)(2) and (3) of the Internal Revenue Code of 1986 and section 204(h)(3) of the Employee Retirement Income Security Act of 1974 (as added by the amendments made by this section), a plan shall be treated as meeting the requirements of such sections if it makes a good faith effort to comply with such requirements.
(3) SPECIAL RULE- The period for providing any notice required by the amendments made by this section shall not end before the date which is 3 months after the date of the enactment of this Act.
SEC. 1355. PROTECTION OF INVESTMENT OF EMPLOYEE CONTRIBUTIONS TO 401(K) PLANS.
(a) IN GENERAL- Section 1524(b) of the Taxpayer Relief Act of 1997 is amended to read as follows:
`(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to elective deferrals for plan years beginning after December 31, 1998.
`(2) NONAPPLICATION TO PREVIOUSLY ACQUIRED PROPERTY- The amendments made by this section shall not apply to any elective deferral which is invested in assets consisting of qualifying employer securities, qualifying employer real property, or both, if such assets were acquired before January 1, 1999.'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply as if included in the provision of the Taxpayer Relief Act of 1997 to which it relates.
SEC. 1356. TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 415.
(a) COMPENSATION LIMIT- Paragraph (11) of section 415(b) (relating to limitation for defined benefit plans) is amended to read as follows:
`(11) SPECIAL LIMITATION RULE FOR GOVERNMENTAL AND MULTIEMPLOYER PLANS- In the case of a governmental plan (as defined in section 414(d)) or a multiemployer plan (as defined in section 414(f)), subparagraph (B) of paragraph (1) shall not apply.'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to years beginning after December 31, 2000.
PART V--REDUCING REGULATORY BURDENS
SEC. 1361. MODIFICATION OF TIMING OF PLAN VALUATIONS.
(a) IN GENERAL- Section 412(c)(9) (relating to annual valuation) is amended--
(1) by striking `For purposes' and inserting the following:
`(A) IN GENERAL- For purposes', and
(2) by adding at the end the following:
`(B) ELECTION TO USE PRIOR YEAR VALUATION-
`(i) IN GENERAL- Except as provided in clause (ii), if, for any plan year--
`(I) an election is in effect under this subparagraph with respect to a plan, and
`(II) the assets of the plan are not less than 125 percent of the plan's current liability (as defined in paragraph (7)(B)), determined as of the valuation date for the preceding plan year,
then this section shall be applied using the information available as of such valuation date.
`(I) ACTUAL VALUATION EVERY 3 YEARS- Clause (i) shall not apply for more than 2 consecutive plan years and valuation shall be under subparagraph (A) with respect to any plan year to which clause (i) does not apply by reason of this subclause.
`(II) REGULATIONS- Clause (i) shall not apply to the extent that more frequent valuations are required under the regulations under subparagraph (A).
`(iii) ADJUSTMENTS- Information under clause (i) shall, in accordance with regulations, be actuarially adjusted to reflect significant differences in participants.
`(iv) ELECTION- An election under this subparagraph, once made, shall be irrevocable without the consent of the Secretary.'.
(b) AMENDMENTS TO ERISA- Paragraph (9) of section 302(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(c)) is amended--
(1) by inserting `(A)' after `(9)', and
(2) by adding at the end the following:
`(B)(i) Except as provided in clause (ii), if, for any plan year--
`(I) an election is in effect under this subparagraph with respect to a plan, and
`(II) the assets of the plan are not less than 125 percent of the plan's current liability (as defined in paragraph (7)(B)), determined as of the valuation date for the preceding plan year,
then this section shall be applied using the information available as of such valuation date.
`(ii)(I) Clause (i) shall not apply for more than 2 consecutive plan years and valuation shall be under subparagraph (A) with respect to any plan year to which clause (i) does not apply by reason of this subclause.
`(II) Clause (i) shall not apply to the extent that more frequent valuations are required under the regulations under subparagraph (A).
`(iii) Information under clause (i) shall, in accordance with regulations, be actuarially adjusted to reflect significant differences in participants.
`(iv) An election under this subparagraph, once made, shall be irrevocable without the consent of the Secretary of the Treasury.'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to plan years beginning after December 31, 2000.
SEC. 1362. ESOP DIVIDENDS MAY BE REINVESTED WITHOUT LOSS OF DIVIDEND DEDUCTION.
(a) IN GENERAL- Section 404(k)(2)(A) (defining applicable dividends) is amended by striking `or' at the end of clause (ii), by redesignating clause (iii) as clause (iv), and by inserting after clause (ii) the following new clause:
`(iii) is, at the election of such participants or their beneficiaries--
`(I) payable as provided in clause (i) or (ii), or
`(II) paid to the plan and reinvested in qualifying employer securities, or'.
(b) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2000.
SEC. 1363. REPEAL OF TRANSITION RULE RELATING TO CERTAIN HIGHLY COMPENSATED EMPLOYEES.
(a) IN GENERAL- Paragraph (4) of section 1114(c) of the Tax Reform Act of 1986 is hereby repealed.
(b) EFFECTIVE DATE- The repeal made by subsection (a) shall apply to plan years beginning after December 31, 1999.
SEC. 1364. EMPLOYEES OF TAX-EXEMPT ENTITIES.
(a) IN GENERAL- The Secretary of the Treasury shall modify Treasury Regulations section 1.410(b)-6(g) to provide that employees of an organization described in section 403(b)(1)(A)(i) of the Internal Revenue Code of 1986 who are eligible to make contributions under section 403(b) of such Code pursuant to a salary reduction agreement may be treated as excludable with respect to a plan under section 401 (k) or (m) of such Code that is provided under the same general arrangement as a plan under such section 401(k), if--
(1) no employee of an organization described in section 403(b)(1)(A)(i) of such Code is eligible to participate in such section 401(k) plan or section 401(m) plan, and
(2) 95 percent of the employees who are not employees of an organization described in section 403(b)(1)(A)(i) of such Code are eligible to participate in such plan under such section 401 (k) or (m).
(b) EFFECTIVE DATE- The modification required by subsection (a) shall apply as of the same date set forth in section 1426(b) of the Small Business Job Protection Act of 1996.
SEC. 1365. CLARIFICATION OF TREATMENT OF EMPLOYER-PROVIDED RETIREMENT ADVICE.
(a) IN GENERAL- Subsection (a) of section 132 (relating to exclusion from gross income) is amended by striking `or' at the end of paragraph (5), by striking the period at the end of paragraph (6) and inserting `, or', and by adding at the end the following new paragraph:
`(7) qualified retirement planning services.'.
(b) QUALIFIED RETIREMENT PLANNING SERVICES DEFINED- Section 132 is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following:
`(m) QUALIFIED RETIREMENT PLANNING SERVICES-
`(1) IN GENERAL- For purposes of this section, the term `qualified retirement planning services' means any retirement planning service provided to an employee and his spouse by an employer maintaining a qualified employer plan.
`(2) NONDISCRIMINATION RULE- Subsection (a)(7) shall apply in the case of highly compensated employees only if such services are available on substantially the same terms to each member of the group of employees normally provided education and information regarding the employer's qualified employer plan.
`(3) QUALIFIED EMPLOYER PLAN- For purposes of this subsection, the term `qualified employer plan' means a plan, contract, pension, or account described in section 219(g)(5).'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to years beginning after December 31, 2000.
SEC. 1366. REPORTING SIMPLIFICATION.
(a) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR OWNERS AND THEIR SPOUSES-
(1) IN GENERAL- The Secretary of the Treasury shall modify the requirements for filing annual returns with respect to one-participant retirement plans to ensure that such plans with assets of $250,000 or less as of the close of the plan year need not file a return for that year.
(2) ONE-PARTICIPANT RETIREMENT PLAN DEFINED- For purposes of this subsection, the term `one-participant retirement plan' means a retirement plan that--
(A) on the first day of the plan year--
(i) covered only the employer (and the employer's spouse) and the employer owned the entire business (whether or not incorporated), or
(ii) covered only one or more partners (and their spouses) in a business partnership (including partners in an S or C corporation),
(B) meets the minimum coverage requirements of section 410(b) of the Internal Revenue Code of 1986 without being combined with any other plan of the business that covers the employees of the business,
(C) does not provide benefits to anyone except the employer (and the employer's spouse) or the partners (and their spouses),
(D) does not cover a business that is a member of an affiliated service group, a controlled group of corporations, or a group of businesses under common control, and
(E) does not cover a business that leases employees.
(3) OTHER DEFINITIONS- Terms used in paragraph (2) which are also used in section 414 of the Internal Revenue Code of 1986 shall have the respective meanings given such terms by such section.
(b) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR PLANS WITH FEWER THAN 25 EMPLOYEES- In the case of a retirement plan which covers less than 25 employees on the first day of the plan year and meets the requirements described in subparagraphs (B), (D), and (E) of subsection (a)(2), the Secretary of the Treasury shall provide for the filing of a simplified annual return that is substantially similar to the annual return required to be filed by a one-participant retirement plan.
(c) EFFECTIVE DATE- The provisions of this section shall take effect on January 1, 2001.
SEC. 1367. IMPROVEMENT OF EMPLOYEE PLANS COMPLIANCE RESOLUTION SYSTEM.
The Secretary of the Treasury shall continue to update and improve the Employee Plans Compliance Resolution System (or any successor program) giving special attention to--
(1) increasing the awareness and knowledge of small employers concerning the availability and use of the program,
(2) taking into account special concerns and circumstances that small employers face with respect to compliance and correction of compliance failures,
(3) extending the duration of the self-correction period under the Administrative Policy Regarding Self-Correction for significant compliance failures,
(4) expanding the availability to correct insignificant compliance failures under the Administrative Policy Regarding Self-Correction during audit, and
(5) assuring that any tax, penalty, or sanction that is imposed by reason of a compliance failure is not excessive and bears a reasonable relationship to the nature, extent, and severity of the failure.
SEC. 1368. MODIFICATION OF EXCLUSION FOR EMPLOYER-PROVIDED TRANSIT PASSES.
(a) IN GENERAL- Section 132(f)(3) (relating to cash reimbursements) is amended by striking the last sentence.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after December 31, 1999.
SEC. 1369. REPEAL OF THE MULTIPLE USE TEST.
(a) IN GENERAL- Paragraph (9) of section 401(m) is amended to read as follows:
`(9) REGULATIONS- The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection and subsection (k), including regulations permitting appropriate aggregation of plans and contributions.'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to years beginning after December 31, 2000.
SEC. 1370. FLEXIBILITY IN NONDISCRIMINATION, COVERAGE, AND LINE OF BUSINESS RULES.
(1) IN GENERAL- The Secretary of the Treasury shall, by regulation, provide that a plan shall be deemed to satisfy the requirements of section 401(a)(4) of the Internal Revenue Code of 1986 if such plan satisfies the facts and circumstances test under section 401(a)(4) of such Code, as in effect before January 1, 1994, but only if--
(A) the plan satisfies conditions prescribed by the Secretary to appropriately limit the availability of such test, and
(B) the plan is submitted to the Secretary for a determination of whether it satisfies such test.
Subparagraph (B) shall only apply to the extent provided by the Secretary.
(A) REGULATIONS- The regulation required by paragraph (1) shall apply to years beginning after December 31, 2000.
(B) CONDITIONS OF AVAILABILITY- Any condition of availability prescribed by the Secretary under paragraph (1)(A) shall not apply before the first year beginning not less than 120 days after the date on which such condition is prescribed.
(1) IN GENERAL- Section 410(b)(1) (relating to minimum coverage requirements) is amended by adding at the end the following:
`(D) In the case that the plan fails to meet the requirements of subparagraphs (A), (B) and (C), the plan--
`(i) satisfies subparagraph (B), as in effect immediately before the enactment of the Tax Reform Act of 1986,
`(ii) is submitted to the Secretary for a determination of whether it satisfies the requirement described in clause (i), and
`(iii) satisfies conditions prescribed by the Secretary by regulation that appropriately limit the availability of this subparagraph.
Clause (ii) shall apply only to the extent provided by the Secretary.'.
(A) IN GENERAL- The amendment made by paragraph (1) shall apply to years beginning after December 31, 2000.
(B) CONDITIONS OF AVAILABILITY- Any condition of availability prescribed by the Secretary under regulations prescribed by the Secretary under section 410(b)(1)(D) of the Internal Revenue Code of 1986 shall not apply before the first year beginning not less than 120 days after the date on which such condition is prescribed.
(c) LINE OF BUSINESS RULES- The Secretary of the Treasury shall, on or before December 31, 2000, modify the existing regulations issued under section 414(r) of the Internal Revenue Code of 1986 in order to expand (to the extent that the Secretary determines appropriate) the ability of a pension plan to demonstrate compliance with the line of business requirements based upon the facts and circumstances surrounding the design and operation of the plan, even though the plan is unable to satisfy the mechanical tests currently used to determine compliance.
SEC. 1371. EXTENSION TO INTERNATIONAL ORGANIZATIONS OF MORATORIUM ON APPLICATION OF CERTAIN NONDISCRIMINATION RULES APPLICABLE TO STATE AND LOCAL PLANS.
(a) IN GENERAL- Subparagraph (G) of section 401(a)(5), subparagraph (H) of section 401(a)(26), subparagraph (G) of section 401(k)(3), and paragraph (2) of section 1505(d) of the Taxpayer Relief Act of 1997 are each amended by inserting `or by an international organization which is described in section 414(d)' after `or instrumentality thereof)'.
(b) CONFORMING AMENDMENTS-
(1) The headings for subparagraph (G) of section 401(a)(5) and subparagraph (H) of section 401(a)(26) are each amended by inserting `AND INTERNATIONAL ORGANIZATION' after `GOVERNMENTAL'.
(2) Subparagraph (G) of section 401(k)(3) is amended by inserting `STATE AND LOCAL GOVERNMENTAL AND INTERNATIONAL ORGANIZATION PLANS- ' after `(G)'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to years beginning after December 31, 2000.
PART VI--PLAN AMENDMENTS
SEC. 1381. PROVISIONS RELATING TO PLAN AMENDMENTS.
(a) IN GENERAL- If this section applies to any plan or contract amendment--
(1) such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A), and
(2) such plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 by reason of such amendment.
(b) AMENDMENTS TO WHICH SECTION APPLIES-
(1) IN GENERAL- This section shall apply to any amendment to any plan or annuity contract which is made--
(A) pursuant to any amendment made by this title, or pursuant to any regulation issued under this title, and
(B) on or before the last day of the first plan year beginning on or after January 1, 2003.
In the case of a government plan (as defined in section 414(d) of the Internal Revenue Code of 1986), this paragraph shall be applied by substituting `2005' for `2003'.
(2) CONDITIONS- This section shall not apply to any amendment unless--
(i) beginning on the date the legislative or regulatory amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amendment, the effective date specified by the plan), and
(ii) ending on the date described in paragraph (1)(B) (or, if earlier, the date the plan or contract amendment is adopted),
the plan or contract is operated as if such plan or contract amendment were in effect, and
(B) such plan or contract amendment applies retroactively for such period.
Subtitle D--Revenue Provisions
SEC. 1391. MODIFICATION OF INSTALLMENT METHOD AND REPEAL OF INSTALLMENT METHOD FOR ACCRUAL METHOD TAXPAYERS.
(a) REPEAL OF INSTALLMENT METHOD FOR ACCRUAL BASIS TAXPAYERS-
(1) IN GENERAL- Subsection (a) of section 453 (relating to installment method) is amended to read as follows:
`(a) USE OF INSTALLMENT METHOD-
`(1) IN GENERAL- Except as otherwise provided in this section, income from an installment sale shall be taken into account for purposes of this title under the installment method.
`(2) ACCRUAL METHOD TAXPAYER- The installment method shall not apply to income from an installment sale if such income would be reported under an accrual method of accounting without regard to this section. The preceding sentence shall not apply to a disposition described in subparagraph (A) or (B) of subsection (l)(2).'.
(2) CONFORMING AMENDMENTS- Sections 453(d)(1), 453(i)(1), and 453(k) of such Code are each amended by striking `(a)' each place it appears and inserting `(a)(1)'.
(b) MODIFICATION OF PLEDGE RULES- Paragraph (4) of section 453A(d) (relating to pledges, etc., of installment obligations) is amended by adding at the end the following: `A payment shall be treated as directly secured by an interest in an installment obligation to the extent an arrangement allows the taxpayer to satisfy all or a portion of the indebtedness with the installment obligation.'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to sales or other dispositions occurring on or after the date of the enactment of this Act.
SEC. 1392. MODIFICATION OF ESTIMATED TAX RULES FOR CLOSELY HELD REAL ESTATE INVESTMENT TRUSTS.
(a) IN GENERAL- Subsection (e) of section 6655 (relating to estimated tax by corporations) is amended by adding at the end the following new paragraph:
`(5) TREATMENT OF CERTAIN REIT DIVIDENDS-
`(A) IN GENERAL- Any dividend received from a closely held real estate investment trust by any person which owns (after application of subsections (d)(5) and (l)(3)(B) of section 856) 10 percent or more (by vote or value) of the stock or beneficial interests in the trust shall be taken into account in computing annualized income installments under paragraph (2) in a manner similar to the manner under which partnership income inclusions are taken into account.
`(B) CLOSELY HELD REIT- For purposes of subparagraph (A), the term `closely held real estate investment trust' means a real estate investment trust with respect to which 5 or fewer persons own (after application of subsections (d)(5) and (l)(3)(B) of section 856) 50 percent or more (by vote or value) of the stock or beneficial interests in the trust.'
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to estimated tax payments due on or after November 15, 1999.
TITLE XIV--TECHNICAL AMENDMENTS
SEC. 1401. DEFINITIONS.
Section 101 of title 11, United States Code, as amended by section 1003 of this Act, is amended--
(1) by striking `In this title--' and inserting `In this title:';
(2) in each paragraph, by inserting `The term' after the paragraph designation;
(3) in paragraph (35)(B), by striking `paragraphs (21B) and (33)(A)' and inserting `paragraphs (23) and (35)';
(4) in each of paragraphs (35A) and (38), by striking `; and' at the end and inserting a period;
(A) by inserting `who is not a family farmer' after `debtor' the first place it appears; and
(B) by striking `thereto having aggregate' and all that follows through the end of the paragraph;
(6) by striking paragraph (54) and inserting the following:
`(54) The term `transfer' means--
`(A) the creation of a lien;
`(B) the retention of title as a security interest;
`(C) the foreclosure of a debtor's equity of redemption; or
`(D) each mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with--
`(ii) an interest in property;';
(7) in each of paragraphs (1) through (35), in each of paragraphs (36) and (37), and in each of paragraphs (40) through (55) (including paragraph (54), as amended by paragraph (6) of this section), by striking the semicolon at the end and inserting a period; and
(8) by redesignating paragraphs (4) through (55), including paragraph (54), as amended by paragraph (6) of this section, in entirely numerical sequence.
SEC. 1402. ADJUSTMENT OF DOLLAR AMOUNTS.
Section 104 of title 11, United States Code, is amended by inserting `522(f)(3),' after `522(d),' each place it appears.
SEC. 1403. EXTENSION OF TIME.
Section 108(c)(2) of title 11, United States Code, is amended by striking `922' and all that follows through `or', and inserting `922, 1201, or'.
SEC. 1404. TECHNICAL AMENDMENTS.
Title 11, United States Code, is amended--
(1) in section 109(b)(2), by striking `subsection (c) or (d) of'; and
(2) in section 552(b)(1), by striking `product' each place it appears and inserting `products'.
SEC. 1405. PENALTY FOR PERSONS WHO NEGLIGENTLY OR FRAUDULENTLY PREPARE BANKRUPTCY PETITIONS.
Section 110(j)(3) of title 11, United States Code, is amended by striking `attorney's' and inserting `attorneys'.
SEC. 1406. LIMITATION ON COMPENSATION OF PROFESSIONAL PERSONS.
Section 328(a) of title 11, United States Code, is amended by inserting `on a fixed or percentage fee basis,' after `hourly basis,'.
SEC. 1407. EFFECT OF CONVERSION.
Section 348(f)(2) of title 11, United States Code, is amended by inserting `of the estate' after `property' the first place it appears.
SEC. 1408. ALLOWANCE OF ADMINISTRATIVE EXPENSES.
Section 503(b)(4) of title 11, United States Code, is amended by inserting `subparagraph (A), (B), (C), (D), or (E) of' before `paragraph (3)'.
SEC. 1409. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, as amended by section 714 of this Act, is amended--
(1) as amended by section 304(e) of Public Law 103-394 (108 Stat. 4133), in paragraph (15), by transferring such paragraph so as to insert such paragraph after paragraph (14) of subsection (a);
(2) in subsection (a)(9), by striking `motor vehicle or vessel' and inserting `motor vehicle, vessel, or aircraft'; and
(3) in subsection (e), by striking `a insured' and inserting `an insured'.
SEC. 1410. EFFECT OF DISCHARGE.
Section 524(a)(3) of title 11, United States Code, is amended by striking `section 523' and all that follows through `or that' and inserting `section 523, 1228(a)(1), or 1328(a)(1), or that'.
SEC. 1411. PROTECTION AGAINST DISCRIMINATORY TREATMENT.
Section 525(c) of title 11, United States Code, is amended--
(1) in paragraph (1), by inserting `student' before `grant' the second place it appears; and
(2) in paragraph (2), by striking `the program operated under part B, D, or E of' and inserting `any program operated under'.
SEC. 1412. PROPERTY OF THE ESTATE.
Section 541(b)(4)(B)(ii) of title 11, United States Code, is amended by inserting `365 or' before `542'.
SEC. 1413. PREFERENCES.
(a) IN GENERAL- Section 547 of title 11, United States Code, as amended by section 201(b) of this Act, is amended--
(1) in subsection (b), by striking `subsection (c)' and inserting `subsections (c) and (i)'; and
(2) by adding at the end the following:
`(i) If the trustee avoids under subsection (b) a security interest given between 90 days and 1 year before the date of the filing of the petition, by the debtor to an entity that is not an insider for the benefit of a creditor that is an insider, such security interest shall be considered to be avoided under this section only with respect to the creditor that is an insider.'.
(b) APPLICABILITY- The amendments made by this section shall apply to any case that pending or commenced on or after the date of enactment of this Act.
SEC. 1414. POSTPETITION TRANSACTIONS.
Section 549(c) of title 11, United States Code, is amended--
(1) by inserting `an interest in' after `transfer of';
(2) by striking `such property' and inserting `such real property'; and
(3) by striking `the interest' and inserting `such interest'.
SEC. 1415. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is amended by striking `1009,'.
SEC. 1416. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, as amended by section 502 of this Act, is amended by inserting `1123(d),' after `1123(b),'.
SEC. 1417. ABANDONMENT OF RAILROAD LINE.
Section 1170(e)(1) of title 11, United States Code, is amended by striking `section 11347' and inserting `section 11326(a)'.
SEC. 1418. CONTENTS OF PLAN.
Section 1172(c)(1) of title 11, United States Code, is amended by striking `section 11347' and inserting `section 11326(a)'.
SEC. 1419. DISCHARGE UNDER CHAPTER 12.
Subsections (a) and (c) of section 1228 of title 11, United States Code, are amended by striking `1222(b)(10)' each place it appears and inserting `1222(b)(9)'.
SEC. 1420. BANKRUPTCY CASES AND PROCEEDINGS.
Section 1334(d) of title 28, United States Code, is amended--
(1) by striking `made under this subsection' and inserting `made under subsection (c)'; and
(2) by striking `This subsection' and inserting `Subsection (c) and this subsection'.
SEC. 1421. KNOWING DISREGARD OF BANKRUPTCY LAW OR RULE.
Section 156(a) of title 18, United States Code, is amended--
(1) in the first undesignated paragraph--
(A) by inserting `(1) the term' before `bankruptcy'; and
(B) by striking the period at the end and inserting `; and'; and
(2) in the second undesignated paragraph--
(A) by inserting `(2) the term' before `document'; and
(B) by striking `this title' and inserting `title 11'.
SEC. 1422. TRANSFERS MADE BY NONPROFIT CHARITABLE CORPORATIONS.
(a) SALE OF PROPERTY OF ESTATE- Section 363(d) of title 11, United States Code, is amended by striking `only' and all that follows through the end of the subsection and inserting `only--
`(1) in accordance with applicable nonbankruptcy law that governs the transfer of property by a corporation or trust that is not a moneyed, business, or commercial corporation or trust; and
`(2) to the extent not inconsistent with any relief granted under subsection (c), (d), (e), or (f) of section 362.'.
(b) CONFIRMATION OF PLAN FOR REORGANIZATION- Section 1129(a) of title 11, United States Code, as amended by section 212 of this Act, is amended by adding at the end the following:
`(15) All transfers of property of the plan shall be made in accordance with any applicable provisions of nonbankruptcy law that govern the transfer of property by a corporation or trust that is not a moneyed, business, or commercial corporation or trust.'.
(c) TRANSFER OF PROPERTY- Section 541 of title 11, United States Code, is amended by adding at the end the following:
`(f) Notwithstanding any other provision of this title, property that is held by a debtor that is a corporation described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code may be transferred to an entity that is not such a corporation, but only under the same conditions as would apply if the debtor had not filed a case under this title.'.
(d) APPLICABILITY- The amendments made by this section shall apply to a case pending under title 11, United States Code, on the date of enactment of this Act, except that the court shall not confirm a plan under chapter 11 of this title without considering whether this section would substantially affect the rights of a party in interest who first acquired rights with respect to the debtor after the date of the petition. The parties who may appear and be heard in a proceeding under this section include the attorney general of the State in which the debtor is incorporated, was formed, or does business.
(e) RULE OF CONSTRUCTION- Nothing in this section shall be construed to require the court in which a case under chapter 11 is pending to remand or refer any proceeding, issue, or controversy to any other court or to require the approval of any other court for the transfer of property.
SEC. 1423. PROTECTION OF VALID PURCHASE MONEY SECURITY INTERESTS.
Section 547(c)(3)(B) of title 11, United States Code, is amended by striking `20' and inserting `30'.
SEC. 1424. EXTENSIONS.
Section 302(d)(3) of the Bankruptcy, Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is amended--
(1) in subparagraph (A), in the matter following clause (ii), by striking `or October 1, 2002, whichever occurs first'; and
(2) in subparagraph (F)--
(i) in subclause (II), by striking `or October 1, 2002, whichever occurs first'; and
(ii) in the matter following subclause (II), by striking `October 1, 2003, or'; and
(B) in clause (ii), in the matter following subclause (II)--
(i) by striking `before October 1, 2003, or'; and
(ii) by striking `, whichever occurs first'.
SEC. 1425. BANKRUPTCY JUDGESHIPS.
(a) SHORT TITLE- This section may be cited as the `Bankruptcy Judgeship Act of 2000'.
(b) TEMPORARY JUDGESHIPS-
(1) APPOINTMENTS- The following judgeship positions shall be filled in the manner prescribed in section 152(a)(1) of title 28, United States Code, for the appointment of bankruptcy judges provided for in section 152(a)(2) of such title:
(A) One additional bankruptcy judgeship for the eastern district of California.
(B) Four additional bankruptcy judgeships for the central district of California.
(C) One additional bankruptcy judgeship for the southern district of Florida.
(D) Two additional bankruptcy judgeships for the district of Maryland.
(E) One additional bankruptcy judgeship for the eastern district of Michigan.
(F) One additional bankruptcy judgeship for the southern district of Mississippi.
(G) One additional bankruptcy judgeship for the district of New Jersey.
(H) One additional bankruptcy judgeship for the eastern district of New York.
(I) One additional bankruptcy judgeship for the northern district of New York.
(J) One additional bankruptcy judgeship for the southern district of New York.
(K) One additional bankruptcy judgeship for the eastern district of Pennsylvania.
(L) One additional bankruptcy judgeship for the middle district of Pennsylvania.
(M) One additional bankruptcy judgeship for the western district of Tennessee.
(N) One additional bankruptcy judgeship for the eastern district of Virginia.
(2) VACANCIES- The first vacancy occurring in the office of a bankruptcy judge in each of the judicial districts set forth in paragraph (1) that--
(A) results from the death, retirement, resignation, or removal of a bankruptcy judge; and
(B) occurs 5 years or more after the appointment date of a bankruptcy judge appointed under paragraph (1);
(1) IN GENERAL- The temporary bankruptcy judgeship positions authorized for the northern district of Alabama, the district of Delaware, the district of Puerto Rico, the district of South Carolina, and the eastern district of Tennessee under section 3(a) (1), (3), (7), (8), and (9) of the Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note) are extended until the first vacancy occurring in the office of a bankruptcy judge in the applicable district resulting from the death, retirement, resignation, or removal of a bankruptcy judge and occurring--
(A) 8 years or more after November 8, 1993, with respect to the northern district of Alabama;
(B) 10 years or more after October 28, 1993, with respect to the district of Delaware;
(C) 8 years or more after August 29, 1994, with respect to the district of Puerto Rico;
(D) 8 years or more after June 27, 1994, with respect to the district of South Carolina; and
(E) 8 years or more after November 23, 1993, with respect to the eastern district of Tennessee.
(2) APPLICABILITY OF OTHER PROVISIONS- All other provisions of section 3 of the Bankruptcy Judgeship Act of 1992 remain applicable to such temporary judgeship positions.
(d) TECHNICAL AMENDMENT- The first sentence of section 152(a)(1) of title 28, United States Code, is amended to read as follows: `Each bankruptcy judge to be appointed for a judicial district as provided in paragraph (2) shall be appointed by the United States court of appeals for the circuit in which such district is located.'.
SEC. 1426. FAMILY FISHERMEN.
(a) DEFINITIONS- Section 101 of title 11, United States Code, is amended--
(1) by inserting after paragraph (7) the following:
`(7A) `commercial fishing operation' includes--
`(A) the catching or harvesting of fish, shrimp, lobsters, urchins, seaweed, shellfish, or other aquatic species or products;
`(B) for purposes of section 109 and chapter 12, aquaculture activities consisting of raising for market any species or product described in subparagraph (A); and
`(C) the transporting by vessel of a passenger for hire (as defined in section 2101 of title 46) who is engaged in recreational fishing;
`(7B) `commercial fishing vessel' means a vessel used by a fisherman to carry out a commercial fishing operation;';
(2) by inserting after paragraph (19) the following:
`(19A) `family fisherman' means--
`(A) an individual or individual and spouse engaged in a commercial fishing operation (including aquaculture for purposes of chapter 12)--
`(i) whose aggregate debts do not exceed $1,500,000 and not less than 80 percent of whose aggregate noncontingent, liquidated debts (excluding a debt for the principal residence of such individual or such individual and spouse, unless such debt arises out of a commercial fishing operation), on the date the case is filed, arise out of a commercial fishing operation owned or operated by such individual or such individual and spouse; and
`(ii) who receive from such commercial fishing operation more than 50 percent of such individual's or such individual's and spouse's gross income for the taxable year preceding the taxable year in which the case concerning such individual or such individual and spouse was filed; or
`(B) a corporation or partnership--
`(i) in which more than 50 percent of the outstanding stock or equity is held by--
`(I) 1 family that conducts the commercial fishing operation; or
`(II) 1 family and the relatives of the members of such family, and such family or such relatives conduct the commercial fishing operation; and
`(ii)(I) more than 80 percent of the value of its assets consists of assets related to the commercial fishing operation;
`(II) its aggregate debts do not exceed $1,500,000 and not less than 80 percent of its aggregate noncontingent, liquidated debts (excluding a debt for 1 dwelling which is owned by such corporation or partnership and which a shareholder or partner maintains as a principal residence, unless such debt arises out of a commercial fishing operation), on the date the case is filed, arise out of a commercial fishing operation owned or operated by such corporation or such partnership; and
`(III) if such corporation issues stock, such stock is not publicly traded;'; and
(3) by inserting after paragraph (19A) the following:
`(19B) `family fisherman with regular annual income' means a family fisherman whose annual income is sufficiently stable and regular to enable such family fisherman to make payments under a plan under chapter 12 of this title;'.
(b) WHO MAY BE A DEBTOR- Section 109(f) of title 11, United States Code, is amended by inserting `or family fisherman' after `family farmer'.
(c) CHAPTER 12- Chapter 12 of title 11, United States Code, is amended--
(1) in the chapter heading, by inserting `OR FISHERMAN' after `FAMILY FARMER';
(2) in section 1201, by adding at the end the following:
`(e)(1) Notwithstanding any other provision of law, for purposes of this subsection, a guarantor of a claim of a creditor under this section shall be treated in the same manner as a creditor with respect to the operation of a stay under this section.
`(2) For purposes of a claim that arises from the ownership or operation of a commercial fishing operation, a co-maker of a loan made by a creditor under this section shall be treated in the same manner as a creditor with respect to the operation of a stay under this section.';
(3) in section 1203, by inserting `or commercial fishing operation' after `farm';
(4) in section 1206, by striking `if the property is farmland or farm equipment' and inserting `if the property is farmland, farm equipment, or property of a commercial fishing operation (including a commercial fishing vessel)'; and
(5) by adding at the end the following:
`Sec. 1232. Additional provisions relating to family fishermen
`(a)(1) Notwithstanding any other provision of law, except as provided in subsection (c), with respect to any commercial fishing vessel of a family fisherman, the debts of that family fisherman shall be treated in the manner prescribed in paragraph (2).
`(2)(A) For purposes of this chapter, a claim for a lien described in subsection (b) for a commercial fishing vessel of a family fisherman that could, but for this subsection, be subject to a lien under otherwise applicable maritime law, shall be treated as an unsecured claim.
`(B) Subparagraph (A) applies to a claim for a lien resulting from a debt of a family fisherman incurred on or after the date of enactment of this chapter.
`(b) A lien described in this subsection is--
`(1) a maritime lien under subchapter III of chapter 313 of title 46 without regard to whether that lien is recorded under section 31343 of title 46; or
`(2) a lien under applicable State law (or the law of a political subdivision thereof).
`(c) Subsection (a) shall not apply to--
`(1) a claim made by a member of a crew or a seaman including a claim made for--
`(A) wages, maintenance, or cure; or
`(2) a preferred ship mortgage that has been perfected under subchapter II of chapter 313 of title 46.
`(d) For purposes of this chapter, a mortgage described in subsection (c)(2) shall be treated as a secured claim.'.
(1) TABLE OF CHAPTERS- In the table of chapters for title 11, United States Code, the item relating to chapter 12, is amended to read as follows:
1201'.
(2) TABLE OF SECTIONS- The table of sections for chapter 12 of title 11, United States Code, is amended by adding at the end the following new item:
`1232. Additional provisions relating to family fishermen.'.
(e) MAGNUSON-STEVENS FISHERY CONSERVATION AND MANAGEMENT ACT- Nothing in this title is intended to change, affect, or amend the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1801 et seq.).
SEC. 1427. COMPENSATING TRUSTEES.
Title 11, United States Code, is amended--
(1) in section 104(b)(1) in the matter preceding subparagraph (A) by--
(A) striking `and 523(a)(2)(C)'; and
(B) inserting `523(a)(2)(C), and 1326(b)(3)' before `immediately';
(2) in section 326, by inserting at the end the following:
`(e) Notwithstanding any other provision of this section, if a trustee in a chapter 7 case commences a motion to dismiss or convert under section 707(b) and such motion is granted, the court shall allow reasonable compensation under section 330(a) of this title for the services and expenses of the trustee and the trustee's counsel in preparing and presenting such motion and any related appeals.'; and
(A) in paragraph (1), by striking `and';
(B) in paragraph (2), by striking the period at the end and inserting `; and'; and
(C) by adding at the end the following:
`(3) if a chapter 7 trustee has been allowed compensation under section 326(e) in a case converted to this chapter or in a case dismissed under section 707(b) in which the debtor in this case was a debtor--
`(A) the amount of such unpaid compensation which shall be paid monthly by prorating such amount over the remaining duration of the plan, but a monthly payment shall not exceed the greater of--
`(ii) the amount payable to unsecured nonpriority creditors as provided by the plan multiplied by 5 percent, and the result divided by the number of months in the plan; and
`(B) notwithstanding any other provision of this title--
`(i) such compensation is payable and may be collected by the trustee under this paragraph even if such amount has been discharged in a prior proceeding under this title; and
`(ii) such compensation is payable in a case under this chapter only to the extent permitted by this paragraph.'.
SEC. 1428. AMENDMENT TO SECTION 362 OF TITLE 11, UNITED STATES CODE.
Section 362(b)(18) of title 11, United States Code, is amended to read as follows:
`(18) under subsection (a) of the creation or perfection of a statutory lien for an ad valorem property tax, or a special tax or special assessment on real property whether or not ad valorem, imposed by a governmental unit, if such tax or assessment comes due after the filing of the petition.'.
SEC. 1429. PROVISION OF ELECTRONIC FTC PAMPHLET WITH ELECTRONIC CREDIT CARD APPLICATIONS AND SOLICITATIONS.
Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is amended--
(1) by redesignating paragraph (5) as paragraph (6); and
(2) by inserting after paragraph (4) the following:
`(5) INCLUSION OF FEDERAL TRADE COMMISSION PAMPHLET-
`(A) IN GENERAL- Any application to open a credit card account for any person under an open end consumer credit plan, or a solicitation or an advertisement to open such an account without requiring an application, that is electronically transmitted to or accessed by a consumer shall be accompanied by an electronic version (or an electronic link thereto) of the pamphlet published by the Federal Trade Commission relating to choosing and using credit cards.
`(B) COSTS- The card issuer with respect to an account described in subparagraph (A) shall be responsible for all costs associated with compliance with that subparagraph.'.
SEC. 1430. NO BANKRUPTCY FOR INSOLVENT POLITICAL COMMITTEES.
Section 105 of title 11, United States Code, is amended by inserting at the end the following:
`(e) A political committee subject to the jurisdiction of the Federal Election Commission under Federal election laws may not file for bankruptcy under this title.'.
SEC. 1431. FEDERAL ELECTION LAW FINES AND PENALTIES AS NONDISCHARGEABLE DEBT.
Section 523(a) of title 11, United States Code, is amended by inserting after paragraph (14A) the following:
`(14B) fines or penalties imposed under Federal election law;'.
SEC. 1432. PROHIBITION ON CERTAIN RETROACTIVE FINANCE CHARGES.
Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following:
`(h) PROHIBITION ON RETROACTIVE FINANCE CHARGES-
`(1) IN GENERAL- In the case of any credit card account under an open end credit plan, if the creditor provides a grace period applicable to any new extension of credit under the account, no finance charge may be imposed subsequent to the grace period with regard to any amount that was paid on or before the end of that grace period.
`(2) DEFINITION- For purposes of this subsection, the term `grace period' means a period during which the extension of credit may be repaid, in whole or in part, without incurring a finance charge for the extension of credit.'.
SEC. 1433. SENSE OF SENATE CONCERNING CREDIT WORTHINESS.
The Board of Governors of the Federal Reserve System shall report to the Senate Committee on Banking, Housing, and Urban Affairs and the House of Representatives Committee on Banking and Financial Services within 6 months of enactment of this Act as to whether and how the location of the residence of an applicant for a credit card is considered by financial institutions in deciding whether an applicant should be granted such credit card.
SEC. 1434. JUDICIAL EDUCATION.
The Director of the Administrative Office of the United States Courts, in consultation with the Director of the Executive Office for United States Trustees, shall develop materials and conduct such training as may be useful to courts in implementing this Act, including the requirements relating to the 707(b) means test and reaffirmations.
SEC. 1435. UNITED STATES TRUSTEE PROGRAM FILING FEE INCREASE.
(a) RIGHTS AND POWERS OF THE TRUSTEE- Section 546(c) of title 11, United States Code, is amended to read as follows:
`(c)(1) Except as provided in subsection (d) of this section, and except as provided in subsection (c) of section 507, the rights and powers of the trustee under sections 544(a), 545, 547, and 549 are subject to the right of a seller of goods that has sold goods to the debtor, in the ordinary course of the business of the seller, to reclaim such goods if the debtor has received such goods within 45 days prior to the commencement of a case under this title, but such seller may not reclaim any such goods unless the seller demands in writing the reclamation of such goods--
`(A) before 45 days after the date of receipt of such goods by the debtor; or
`(B) if such 45-day period expires after the commencement of the case, before 20 days after the date of commencement of the case.
`(2) Notwithstanding the failure of the seller to provide notice in a manner consistent with this subsection, the seller shall be entitled to assert the rights established in section 503(b)(7) of this title.'.
(b) ADMINISTRATIVE EXPENSES- Section 503(b) of title 11, United States Code, is amended--
(1) in paragraph (5), by striking `and' at the end;
(2) in paragraph (6), by striking the period at the end and inserting `; and'; and
(3) by adding at the end the following:
`(7) the invoice price of any goods received by the debtor within 20 days of the date of filing of a case under this title where the goods have been sold to the debtor in the ordinary course of such seller's business.'.
SEC. 1436. PROVIDING REQUESTED TAX DOCUMENTS TO THE COURT.
In the case of an individual under chapter 7, the court shall not grant a discharge unless requested tax documents have been provided to the court. In the case of an individual under chapter 11 or 13, the court shall not confirm a plan of reorganization unless requested tax documents have been filed with the court.
SEC. 1437. DEFINITION OF FAMILY FARMER.
Section 101(18) of title 11, United States Code, is amended--
(1) in subparagraph (A) by--
(A) striking `$1,500,000' and inserting `$3,000,000'; and
(B) striking `80' and inserting `50'; and
(2) in subparagraph (B)(ii) by striking `$1,500,000' and inserting `$3,000,000'.
SEC. 1438. ENCOURAGING CREDITWORTHINESS.
(a) SENSE OF THE CONGRESS- It is the sense of the Congress that--
(1) certain lenders may sometimes offer credit to consumers indiscriminately, without taking steps to ensure that consumers are capable of repaying the resulting debt, and in a manner which may encourage certain consumers to accumulate additional debt; and
(2) resulting consumer debt may increasingly be a major contributing factor to consumer insolvency.
(b) STUDY REQUIRED- The Board of Governors of the Federal Reserve System (hereafter in this section referred to as the `Board') shall conduct a study of--
(1) consumer credit industry practices of soliciting and extending credit--
(B) without taking steps to ensure that consumers are capable of repaying the resulting debt; and
(C) in a manner that encourages consumers to accumulate additional debt; and
(2) the effects of such practices on consumer debt and insolvency.
(c) REPORT AND REGULATIONS- Not later than 12 months after the date of enactment of this Act, the Board--
(1) shall make public a report on its findings with respect to the indiscriminate solicitation and extension of credit by the credit industry;
(2) may issue regulations that would require additional disclosures to consumers; and
(3) may take any other actions, consistent with its existing statutory authority, that the Board finds necessary to ensure responsible industrywide practices and to prevent resulting consumer debt and insolvency.
SEC. 1439. PROPERTY NO LONGER SUBJECT TO REDEMPTION.
Section 541(b) of title 11 of the United States Code is amended by adding at the end the following:
`(6) any interest of the debtor in property where the debtor pledged or sold tangible personal property (other than securities or written or printed evidences of indebtedness or title) as collateral for a loan or advance of money, where--
`(A) the tangible personal property is in the possession of the pledgee or transferee;
`(B) the debtor has no obligation to repay the money, redeem the collateral, or buy back the property at a stipulated price; and
`(C) neither the debtor nor the trustee have exercised any right to redeem provided under the contract or State law, in a timely manner as provided under State law and section 108(b) of this title.'.
SEC. 1440. AVAILABILITY OF TOLL-FREE ACCESS TO INFORMATION.
Section 127(b)(11) of the Truth in Lending Act (15 U.S.C. 1637(b)), as added by this Act, is amended by adding at the end the following:
`(K) A creditor that maintains a toll-free telephone number for the purpose of providing customers with the actual number of months that it will take to repay an outstanding balance shall include the following statement on each billing statement: `Making only the minimum payment will increase the interest you pay and the time it takes to repay your balance. For more information, call this toll-free number: XXXX.'. '.
TITLE XV--GENERAL EFFECTIVE DATE; APPLICATION OF AMENDMENTS
SEC. 1501. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) EFFECTIVE DATE- Except as provided otherwise in this Act, this Act and the amendments made by this Act shall take effect 180 days after the date of enactment of this Act.
(b) APPLICATION OF AMENDMENTS- The amendments made by this Act shall not apply with respect to cases commenced under title 11, United States Code, before the effective date of this Act.
TITLE XVI--FINANCIAL INSTITUTIONS INSOLVENCY IMPROVEMENT
SEC. 1601. SHORT TITLE.
This title may be cited as the `Financial Institutions Insolvency Improvement Act of 2000'.
SEC. 1602. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR RECEIVERS OF INSURED DEPOSITORY INSTITUTIONS.
(a) DEFINITION OF QUALIFIED FINANCIAL CONTRACT- Section 11(e)(8)(D)(i) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(i)) is amended by inserting `, resolution, or order' after `any similar agreement that the Corporation determines by regulation'.
(b) DEFINITION OF SECURITIES CONTRACT- Section 11(e)(8)(D)(ii) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is amended to read as follows:
`(ii) SECURITIES CONTRACT- The term `securities contract'--
`(I) means a contract for the purchase, sale, or loan of a security, a certificate of deposit, a mortgage loan, or any interest in a mortgage loan, a group or index of securities, certificates of deposit, or mortgage loans or interests therein (including any interest therein or based on the value thereof) or any option on any of the foregoing, including any option to purchase or sell any such security, certificate of deposit, loan, interest, group or index, or option;
`(II) does not include any purchase, sale, or repurchase obligation under a participation in a commercial mortgage loan unless the Corporation determines by regulation, resolution, or order to include any such agreement within the meaning of such term;
`(III) means any option entered into on a national securities exchange relating to foreign currencies;
`(IV) means the guarantee by or to any securities clearing agency of any settlement of cash, securities, certificates of deposit, mortgage loans or interests therein, group or index of securities, certificates of deposit, or mortgage loans or interests therein (including any interest therein or based on the value thereof) or option on any of the foregoing, including any option to purchase or sell any such security, certificate of deposit, loan, interest, group or index or option;
`(V) means any margin loan;
`(VI) means any other agreement or transaction that is similar to any agreement or transaction referred to in this clause (other than subclause (II));
`(VII) means any combination of the agreements or transactions referred to in this clause (other than subclause (II));
`(VIII) means any option to enter into any agreement or transaction referred to in this clause (other than subclause (II));
`(IX) means a master agreement that provides for an agreement or transaction referred to in subclause (I), (III), (IV), (V), (VI), (VII), or (VIII), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a securities contract under this clause, except that the master agreement shall be considered to be a securities contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (III), (IV), (V), (VI), (VII), or (VIII); and
`(X) means any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in this clause (other than subclause (II)).'.
(c) DEFINITION OF COMMODITY CONTRACT- Section 11(e)(8)(D)(iii) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iii)) is amended to read as follows:
`(iii) COMMODITY CONTRACT- The term `commodity contract' means--
`(I) with respect to a futures commission merchant, a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade;
`(II) with respect to a foreign futures commission merchant, a foreign future;
`(III) with respect to a leverage transaction merchant, a leverage transaction;
`(IV) with respect to a clearing organization, a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization, or commodity option traded on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization;
`(V) with respect to a commodity options dealer, a commodity option;
`(VI) any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;
`(VII) any combination of the agreements or transactions referred to in this clause;
`(VIII) any option to enter into any agreement or transaction referred to in this clause;
`(IX) a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), (III), (IV), (V), (VI), (VII), or (VIII), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a commodity contract under this clause, except that the master agreement shall be considered to be a commodity contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), (III), (IV), (V), (VI), (VII), or (VIII); or
`(X) a security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in this clause.'.
(d) DEFINITION OF FORWARD CONTRACT- Section 11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iv)) is amended to read as follows:
`(iv) FORWARD CONTRACT- The term `forward contract' means--
`(I) a contract (other than a commodity contract) for the purchase, sale, or transfer of a commodity or any similar good, article, service, right, or interest which is presently or in the future becomes the subject of dealing in the forward contract trade, or product or byproduct thereof, with a maturity date that is more than 2 days after the date on which the contract is entered into, including a repurchase agreement, reverse repurchase agreement, consignment, lease, swap, hedge transaction, deposit, loan, option, allocated transaction, unallocated transaction, or any other similar agreement;
`(II) any combination of agreements or transactions referred to in subclauses (I) and (III);
`(III) any option to enter into any agreement or transaction referred to in subclause (I) or (II);
`(IV) a master agreement that provides for an agreement or transaction referred to in subclauses (I), (II), or (III), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a forward contract under this clause, except that the master agreement shall be considered to be a forward contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), or (III); or
`(V) a security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (II), (III), or (IV).'.
(e) DEFINITION OF REPURCHASE AGREEMENT AND REVERSE REPURCHASE AGREEMENT- Section 11(e)(8)(D)(v) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(v)) is amended to read as follows:
`(v) REPURCHASE AGREEMENT; REVERSE REPURCHASE AGREEMENT- The terms `repurchase agreement' and `reverse repurchase agreement'--
`(I) mean an agreement, including related terms, which provides for the transfer of 1 or more certificates of deposit, mortgage-related securities (as such term is defined in the Securities Exchange Act of 1934), mortgage loans, interests in mortgage-related securities or mortgage loans, eligible bankers' acceptances, qualified foreign government securities or securities that are direct obligations of, or that are fully guaranteed by, the United States or any agency of the United States against the transfer of funds by the transferee of such certificates of deposit, eligible bankers' acceptances, securities, loans, or interests with a simultaneous agreement by such transferee to transfer to the transferor thereof certificates of deposit, eligible bankers' acceptances, securities, loans, or interests as described in this subclause, at a date certain that is not later than 1 year after the date of such transfers or on demand, against the transfer of funds, or any other similar agreement;
`(II) does not include any repurchase obligation under a participation in a commercial mortgage loan unless the Corporation determines by regulation, resolution, or order to include any such participation within the meaning of such term;
`(III) means any combination of agreements or transactions referred to in subclauses (I) and (IV);
`(IV) means any option to enter into any agreement or transaction referred to in subclause (I) or (III);
`(V) means a master agreement that provides for an agreement or transaction referred to in subclause (I), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a repurchase agreement under this clause, except that the master agreement shall be considered to be a repurchase agreement under this subclause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (III), or (IV); and
`(VI) means a security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (III), (IV), or (V).
For purposes of this clause, the term `qualified foreign government security' means a security that is a direct obligation of, or that is fully guaranteed by, the central government of a member of the Organization for Economic Cooperation and Development (as determined by regulation or order adopted by the appropriate Federal banking authority).'.
(f) DEFINITION OF SWAP AGREEMENT- The Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is amended to read as follows:
`(vi) SWAP AGREEMENT- The term `swap agreement'--
`(I) means any agreement, including the terms and conditions incorporated by reference in any such agreement, that is--
`(aa) an interest rate swap, option, future, or forward agreement, including a rate floor, rate cap, rate collar, cross-currency rate swap, and basis swap;
`(bb) a spot, same day-tomorrow, tomorrow-next, forward, or other foreign exchange or precious metals agreement;
`(cc) a currency swap, option, future, or forward agreement;
`(dd) an equity index or equity swap, option, future, or forward agreement;
`(ee) a debt index or debt swap, option, future, or forward agreement;
`(ff) a credit spread or credit swap, option, future, or forward agreement; or
`(gg) a commodity index or commodity swap, option, future, or forward agreement;
`(II) means any agreement or transaction that is similar to any other agreement or transaction referred to in this clause, that is presently, or in the future becomes, regularly entered into in the swap market (including terms and conditions incorporated by reference in such agreement), and that is a forward, swap, future, or option on 1 or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, or economic indices or measures of economic risk or value;
`(III) means any combination of agreements or transactions referred to in this clause;
`(IV) means any option to enter into any agreement or transaction referred to in this clause;
`(V) means a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement contains an agreement or transaction that is not a swap agreement under this clause, except that the master agreement shall be considered to be a swap agreement under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), (III), or (IV);
`(VI) means any security agreement or arrangement or other credit enhancement related to any agreements or transactions referred to in subparagraph (I), (II), (III), or (IV); and
`(VII) is applicable for purposes of this Act only, and shall not be construed or applied so as to challenge or affect the characterization, definition, or treatment of any swap agreement under any other statute, regulation, or rule, including the Securities Act of 1933, the Securities Exchange Act of 1934, the Public Utility Holding Company Act of 1935, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Securities Investor Protection Act of 1970, the Commodity Exchange Act, and the regulations promulgated by the Securities and Exchange Commission or the Commodity Futures Trading Commission.'.
(g) DEFINITION OF TRANSFER- Section 11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(viii)) is amended to read as follows:
`(viii) TRANSFER- The term `transfer' means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, including retention of title as a security interest and foreclosure of the depository institutions's equity of redemption.'.
(h) TREATMENT OF QUALIFIED FINANCIAL CONTRACTS- Section 11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
(1) in subparagraph (A), by striking `paragraph (10)' and inserting `paragraphs (9) and (10)';
(2) in subparagraph (A)(i), by striking `to cause the termination or liquidation' and inserting `such person has to cause the termination, liquidation, or acceleration';
(3) by striking clause (ii) of subparagraph (A) and inserting the following:
`(ii) any right under any security agreement or arrangement or other credit enhancement related to 1 or more qualified financial contracts described in clause (i); or'; and
(4) by striking clause (ii) of subparagraph (E) and inserting the following:
`(ii) any right under any security agreement or arrangement or other credit enhancement related to 1 or more qualified financial contracts described in clause (i); or'.
(i) AVOIDANCE OF TRANSFERS- Section 11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is amended by inserting `section 5242 of the Revised Statutes (12 U.S.C. 91), or any other Federal or State law relating to the avoidance of preferential or fraudulent transfers,' before `the Corporation'.
SEC. 1603. AUTHORITY OF THE CORPORATION WITH RESPECT TO FAILED AND FAILING INSTITUTIONS.
(a) IN GENERAL- Section 11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is amended--
(1) in subparagraph (E), by striking `other than paragraph (12) of this subsection, subsection (d)(9)' and inserting `other than subsections (d)(9) and (e)(10)'; and
(2) by adding at the end the following:
`(F) CLARIFICATION- No provision of law shall be construed as limiting the right or power of the Corporation, or authorizing any court or agency to limit or delay, in any manner, the right or power of the Corporation to transfer any qualified financial contract in accordance with paragraphs (9) and (10) or to disaffirm or repudiate any such contract in accordance with subsection (e)(1).
`(G) WALKAWAY CLAUSES NOT EFFECTIVE-
`(i) IN GENERAL- Notwithstanding the provisions of subparagraphs (A) and (E), and sections 403 and 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991, no walkaway clause shall be enforceable in a qualified financial contract of an insured depository institution in default.
`(ii) WALKAWAY CLAUSE DEFINED- For purposes of this subparagraph, the term `walkaway clause' means a provision in a qualified financial contract that, after calculation of a value of a party's position or an amount due to or from 1 of the parties in accordance with its terms upon termination, liquidation, or acceleration of the qualified financial contract, either does not create a payment obligation of a party or extinguishes a payment obligation of a party in whole or in part solely because of such party's status as a nondefaulting party.'.
(b) TECHNICAL AND CONFORMING AMENDMENT- Section 11(e)(12)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(12)(A)) is amended by inserting `or the exercise of rights or powers by' after `the appointment of'.
SEC. 1604. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED FINANCIAL CONTRACTS.
(a) TRANSFERS OF QUALIFIED FINANCIAL CONTRACTS TO FINANCIAL INSTITUTIONS- Section 11(e)(9) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(9)) is amended to read as follows:
`(9) TRANSFER OF QUALIFIED FINANCIAL CONTRACTS-
`(A) IN GENERAL- In making any transfer of assets or liabilities of a depository institution in default which includes any qualified financial contract, the conservator or receiver for such depository institution shall either--
`(i) transfer to 1 financial institution, other than a financial institution for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed or which is otherwise the subject of a bankruptcy or insolvency proceeding--
`(I) all qualified financial contracts between any person or any affiliate of such person and the depository institution in default;
`(II) all claims of such person or any affiliate of such person against such depository institution under any such contract (other than any claim which, under the terms of any such contract, is subordinated to the claims of general unsecured creditors of such institution);
`(III) all claims of such depository institution against such person or any affiliate of such person under any such contract; and
`(IV) all property securing or any other credit enhancement for any contract described in subclause (I) or any claim described in subclause (II) or (III) under any such contract; or
`(ii) transfer none of the qualified financial contracts, claims, property, or other credit enhancement referred to in clause (i) (with respect to such person and any affiliate of such person).
`(B) TRANSFER TO FOREIGN BANK, FOREIGN FINANCIAL INSTITUTION, OR BRANCH OR AGENCY OF A FOREIGN BANK OR FINANCIAL INSTITUTION- In transferring any qualified financial contract and related claims and property pursuant to subparagraph (A)(i), the conservator or receiver for the depository institution shall not make such transfer to a foreign bank, financial institution organized under the laws of a foreign country, or a branch or agency of a foreign bank or financial institution unless, under the law applicable to such bank, financial institution, branch, or agency, to the qualified financial contract, and to any netting contract, any security agreement or arrangement or other credit enhancement related to 1 or more qualified financial contracts the contractual rights of the parties to such qualified financial contracts, netting contracts, security agreements, or arrangements, or other credit enhancements are enforceable substantially to the same extent as permitted under this section.
`(C) TRANSFER OF CONTRACT SUBJECT TO THE RULES OF A CLEARING ORGANIZATION- If a conservator or receiver transfers any qualified financial contract and related claims, property, and credit enhancements pursuant to subparagraph (A)(i) and such contract is subject to the rules of a clearing organization, the clearing organization shall not be required to accept the transferee as a member by virtue of the transfer.
`(D) DEFINITION- For purposes of this paragraph, the term `financial institution' means a broker or dealer, a depository institution, a futures commission merchant, or any other institution that the Corporation determines, by regulation, to be a financial institution.'.
(b) NOTICE TO QUALIFIED FINANCIAL CONTRACT COUNTERPARTIES- Section 11(e)(10)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is amended by striking the flush material immediately following clause (ii) and inserting the following:
`the conservator or receiver shall notify any person who is a party to any such contract of such transfer by 5:00 p.m. (eastern time) on the business day following the date of the appointment of the receiver in the case of a receivership, or the business day following such transfer in the case of a conservatorship.'.
(c) RIGHTS AGAINST RECEIVER AND TREATMENT OF BRIDGE BANKS- Section 11(e)(10) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(10)) is amended--
(1) by redesignating subparagraph (B) as subparagraph (D); and
(2) by inserting after subparagraph (A) the following:
`(B) CERTAIN RIGHTS NOT ENFORCEABLE-
`(i) RECEIVERSHIP- A person who is a party to a qualified financial contract with an insured depository institution may not exercise any right such person has to terminate, liquidate, or net such contract under paragraph (8)(A) or section 403 or 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991, solely by reason of or incidental to the appointment of a receiver for the depository institution (or the insolvency or financial condition of the depository institution for which the receiver has been appointed)--
`(I) until 5:00 p.m. (eastern time) on the business day following the date of the appointment of the receiver; or
`(II) after the person has received notice that the contract has been transferred pursuant to paragraph (9)(A).
`(ii) CONSERVATORSHIP- A person who is a party to a qualified financial contract with an insured depository institution may not exercise any right such person has to terminate, liquidate, or net such contract under paragraph (8)(E) or section 403 or 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991, solely by reason of or incidental to the appointment of a conservator for the depository institution (or the insolvency or financial condition of the depository institution for which the conservator has been appointed).
`(iii) NOTICE- For purposes of this paragraph, the Corporation as receiver or conservator of an insured depository institution shall be deemed to have notified a person who is a party to a qualified financial contract with such depository institution if the Corporation has taken steps reasonably calculated to provide notice to such person by the time specified in subparagraph (A).
`(C) TREATMENT OF BRIDGE BANKS- A financial institution for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed or that is otherwise the subject of a bankruptcy or insolvency proceeding for purposes of subsection (e)(9) does not include--
`(ii) a depository institution organized by the Corporation, for which a conservator is appointed either--
`(I) immediately upon the organization of the institution; or
`(II) at the time of a purchase and assumption transaction between such institution and the Corporation as receiver for a depository institution in default.'.
SEC. 1605. AMENDMENTS RELATING TO DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINANCIAL CONTRACTS.
Section 11(e) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)) is amended--
(1) by redesignating paragraphs (11) through (15) as paragraphs (12) through (16), respectively;
(2) in paragraph (8)(C)(i), by striking `(11)' and inserting `(12)';
(3) in paragraph (8)(E), by striking `(12)' and inserting `(13)'; and
(4) by inserting after paragraph (10) the following:
`(11) DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINANCIAL CONTRACTS- In exercising the right to disaffirm or repudiate with respect to any qualified financial contract to which an insured depository institution is a party, the conservator or receiver for such institution shall either--
`(A) disaffirm or repudiate all qualified financial contracts between--
`(i) any person or any affiliate of such person; and
`(ii) the depository institution in default; or
`(B) disaffirm or repudiate none of the qualified financial contracts referred to in subparagraph (A) (with respect to such person or any affiliate of such person).'.
SEC. 1606. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.
Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to read as follows:
`(vii) TREATMENT OF MASTER AGREEMENT AS 1 AGREEMENT- Any master agreement for any contract or agreement described in any preceding clause of this subparagraph (or any master agreement for such master agreement or agreements), together with all supplements to such master agreement, shall be treated as a single agreement and a single qualified financial contract. If a master agreement contains provisions relating to agreements or transactions that are not themselves qualified financial contracts, the master agreement shall be deemed to be a qualified financial contract only with respect to those transactions that are themselves qualified financial contracts.'.
SEC. 1607. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991.
(a) DEFINITIONS- Section 402 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4402) is amended--
(A) by redesignating subparagraphs (B) through (D) as subparagraphs (C) through (E), respectively;
(B) by inserting after subparagraph (A) the following:
`(B) an uninsured national bank or an uninsured State bank that is a member of the Federal Reserve System, if the national bank or State member bank is not eligible to make application to become an insured bank under section 5 of the Federal Deposit Insurance Act;'; and
(C) by striking subparagraph (C) (as redesignated) and inserting the following:
`(C) a branch or agency of a foreign bank, a foreign bank and any branch or agency of the foreign bank, or the foreign bank that established the branch or agency, as those terms are defined in section 1(b) of the International Banking Act of 1978;';
(2) in paragraph (11), by inserting before the period `and any other clearing organization with which such clearing organization has a netting contract';
(3) in paragraph (14)(A), by striking clause (i) and inserting the following:
`(i) means a contract or agreement between 2 or more financial institutions, clearing organizations, or members that provides for netting present or future payment obligations or payment entitlements (including liquidation or closeout values relating to such obligations or entitlements) among the parties to the agreement; and'; and
(4) by adding at the end the following:
`(15) PAYMENT- The term `payment' means a payment of United States dollars, another currency, or a composite currency, and a noncash delivery, including a payment or delivery to liquidate an unmatured obligation.'.
(b) ENFORCEABILITY OF BILATERAL NETTING CONTRACTS- Section 403 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4403) is amended--
(1) by striking subsection (a) and inserting the following:
`(a) GENERAL RULE- Notwithstanding any other provision of Federal or State law (other than paragraphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal Deposit Insurance Act or any order authorized under section 5(b)(2) of the Securities Investor Protection Act of 1970, the covered contractual payment obligations and the covered contractual payment entitlements between any 2 financial institutions shall be netted in accordance with, and subject to the conditions of, the terms of any applicable netting contract (except as provided in section 561(b)(2) of title 11, United States Code).'; and
(2) by adding at the end the following:
`(f) ENFORCEABILITY OF SECURITY AGREEMENTS- The provisions of any security agreement or arrangement or other credit enhancement related to 1 or more netting contracts between any 2 financial institutions shall be enforceable in accordance with their terms (except as provided in section 561(b)(2) of title 11, United States Code) and shall not be stayed, avoided, or otherwise limited by any State or Federal law (other than paragraphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal Deposit Insurance Act and section 5(b)(2) of the Securities Investor Protection Act of 1970).'.
(c) ENFORCEABILITY OF CLEARING ORGANIZATION NETTING CONTRACTS- Section 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4404) is amended--
(1) by striking subsection (a) and inserting the following:
`(a) GENERAL RULE- Notwithstanding any other provision of Federal or State law (other than paragraphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal Deposit Insurance Act or any order authorized under section 5(b)(2) of the Securities Investor Protection Act of 1970) the covered contractual payment obligations and the covered contractual payment entitlements of a member of a clearing organization to and from all other members of the clearing organization shall be netted in accordance with, and subject to the conditions of, the terms of any applicable netting contract (except as provided in section 561(b)(2) of title 11, United States Code).'; and
(2) by adding at the end the following:
`(h) ENFORCEABILITY OF SECURITY AGREEMENTS- The provisions of any security agreement or arrangement or other credit enhancement related to 1 or more netting contracts between any 2 members of a clearing organization shall be enforceable in accordance with their terms (except as provided in section 561(b)(2) of title 11, United States Code) and shall not be stayed, avoided, or otherwise limited by any State or Federal law (other than paragraphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal Deposit Insurance Act and section 5(b)(2) of the Securities Investor Protection Act of 1970).'.
(d) ENFORCEABILITY OF CONTRACTS WITH UNINSURED NATIONAL BANKS AND UNINSURED FEDERAL BRANCHES AND AGENCIES- The Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4401 et seq.) is amended by adding at the end the following:
`SEC. 408. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL BANKS AND UNINSURED FEDERAL BRANCHES AND AGENCIES.
`(a) IN GENERAL- Notwithstanding any other provision of law, paragraphs (8), (9), (10), and (11) of section 11(e) of the Federal Deposit Insurance Act shall apply to an uninsured national bank or uninsured Federal branch or Federal agency, except that for such purpose--
`(1) any reference to the `Corporation as receiver' or `the receiver or the Corporation' shall refer to the receiver of an uninsured national bank or uninsured Federal branch or Federal agency appointed by the Comptroller of the Currency;
`(2) any reference to the `Corporation' (other than in section 11(e)(8)(D) of that Act), the `Corporation, whether acting as such or as conservator or receiver', a `receiver', or a `conservator' shall refer to the receiver or conservator of an uninsured national bank or uninsured Federal branch or Federal agency appointed by the Comptroller of the Currency; and
`(3) any reference to an `insured depository institution' or `depository institution' shall refer to an uninsured national bank or an uninsured Federal branch or Federal agency.
`(b) LIABILITY- The liability of a receiver or conservator of an uninsured national bank or uninsured Federal branch or agency shall be determined in the same manner and subject to the same limitations that apply to receivers and conservators of insured depository institutions under section 11(e) of the Federal Deposit Insurance Act.
`(c) REGULATORY AUTHORITY-
`(1) IN GENERAL- The Comptroller of the Currency, in consultation with the Federal Deposit Insurance Corporation, may promulgate regulations to implement this section.
`(2) SPECIFIC REQUIREMENT- In promulgating regulations to implement this section, the Comptroller of the Currency shall ensure that the regulations generally are consistent with the regulations and policies of the Federal Deposit Insurance Corporation adopted pursuant to the Federal Deposit Insurance Act.
`(d) DEFINITIONS- For purposes of this section, the terms `Federal branch', `Federal agency', and `foreign bank' have the same meanings as in section 1(b) of the International Banking Act of 1978.'.
SEC. 1608. RECORDKEEPING REQUIREMENTS.
Section 11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is amended by adding at the end the following:
`(H) RECORDKEEPING REQUIREMENTS- The Corporation, in consultation with the appropriate Federal banking agencies, may prescribe regulations requiring more detailed recordkeeping with respect to qualified financial contracts (including market valuations) by insured depository institutions.'.
SEC. 1609. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION REQUIREMENT.
Section 13(e)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1823(e)(2)) is amended to read as follows:
`(2) EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION REQUIREMENT-
`(A) IN GENERAL- An agreement described in subparagraph (B) shall not be deemed to be invalid pursuant to paragraph (1)(B) solely on the basis--
`(i) that the agreement was not executed contemporaneously with the acquisition of the collateral; or
`(ii) of any pledge, delivery, or substitution of the collateral made in accordance with the agreement.
`(B) AGREEMENT DESCRIBED- An agreement is described in this subparagraph if it is an agreement to provide for the lawful collateralization of--
`(i) deposits of, or other credit extension by, a Federal, State, or local governmental entity, or of any depositor referred to in section 11(a)(2), including an agreement to provide collateral in lieu of a surety bond;
`(ii) securities deposited under section 345(b)(2) of title 11, United States Code;
`(iii) extensions of credit, including an overdraft, from a Federal reserve bank or Federal home loan bank; or
`(iv) 1 or more qualified financial contracts (as defined in section 11(e)(8)(D)).'.
SEC. 1610. SIPC STAY.
Section 5(b)(2) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding at the end the following:
`(C) EXCEPTION FROM STAY-
`(i) IN GENERAL- Notwithstanding section 362 of title 11, United States Code, neither the filing of an application under subsection (a)(3) of this section nor any order or decree obtained by SIPC from the court shall operate as a stay of any contractual right of a creditor to liquidate, terminate, or accelerate a securities contract, commodity contract, forward contract, repurchase agreement, swap agreement, or master netting agreement, each as defined in title 11, United States Code, to offset or net termination values, payment amounts, or other transfer obligations arising under or in connection with 1 or more of such contracts or agreements, or to foreclose on any cash collateral pledged by the debtor, whether or not with respect to 1 or more of such contracts or agreements.
`(ii) STAYS ON FORECLOSURE- Notwithstanding clause (i), an application, order, or decree described therein may operate as a stay of the foreclosure on securities collateral pledged by the debtor, whether or not with respect to 1 or more of such contracts or agreements, securities sold by the debtor under a repurchase agreement or securities lent under a securities lending agreement.
`(iii) DEFINITION- As used in this section, the term `contractual right' includes--
`(I) a right set forth in a rule or bylaw of a national securities exchange, a national securities association, or a securities clearing agency;
`(II) a right set forth in a bylaw of a clearing organization or contract market or in a resolution of the governing board thereof; and
`(III) a right, whether or not in writing, arising under common law, under law merchant, or by reason of normal business practice.'.
SEC. 1611. FEDERAL RESERVE COLLATERAL REQUIREMENTS.
Section 16 of the Federal Reserve Act (12 U.S.C. 412) is amended in the third sentence of the second undesignated paragraph, by striking `acceptances acquired under section 13 of this Act' and inserting `acceptances acquired under section 10A, 10B, 13, or 13A'.
SEC. 1612. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) SEVERABILITY- If any provision of this title or any amendment made by this title, or the application of any such provision or amendment to any person or circumstance, is held to be unconstitutional, the remaining provisions of and amendments made by this title and the application of such other provisions and amendments to any person or circumstance shall not be affected thereby.
(b) EFFECTIVE DATE- This title and the amendments made by this title shall take effect on the date of enactment of this Act.
(c) APPLICATION OF AMENDMENTS- The amendments made by this title shall apply with respect to cases commenced or appointments made under any Federal or State law after the date of enactment of this Act, but shall not apply with respect to cases commenced or appointments made under any Federal or State law before the date of enactment of this Act.
TITLE XVII--METHAMPHETAMINE AND OTHER CONTROLLED SUBSTANCES
SEC. 1701. SHORT TITLE.
This title may be cited as the `Methamphetamine Anti-Proliferation Act of 2000'.
Subtitle A--Methamphetamine Production, Trafficking, and Abuse
CHAPTER 1--CRIMINAL PENALTIES
SEC. 1711. ENHANCED PUNISHMENT OF AMPHETAMINE LABORATORY OPERATORS.
(a) AMENDMENT TO FEDERAL SENTENCING GUIDELINES- Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall amend the Federal sentencing guidelines in accordance with this section with respect to any offense relating to the manufacture, importation, exportation, or trafficking in amphetamine (including an attempt or conspiracy to do any of the foregoing) in violation of--
(1) the Controlled Substances Act (21 U.S.C. 801 et seq.);
(2) the Controlled Substances Import and Export Act (21 U.S.C. 951 et seq.); or
(3) the Maritime Drug Law Enforcement Act (46 U.S.C. App. 1901 et seq.).
(b) GENERAL REQUIREMENT- In carrying out this section, the United States Sentencing Commission shall, with respect to each offense described in subsection (a) relating to amphetamine--
(1) review and amend its guidelines to provide for increased penalties such that those penalties are comparable to the base offense level for methamphetamine; and
(2) take any other action the Commission considers necessary to carry out this subsection.
(c) ADDITIONAL REQUIREMENTS- In carrying out this section, the United States Sentencing Commission shall ensure that the sentencing guidelines for offenders convicted of offenses described in subsection (a) reflect the heinous nature of such offenses, the need for aggressive law enforcement action to fight such offenses, and the extreme dangers associated with unlawful activity involving amphetamines, including--
(1) the rapidly growing incidence of amphetamine abuse and the threat to public safety that such abuse poses;
(2) the high risk of amphetamine addiction;
(3) the increased risk of violence associated with amphetamine trafficking and abuse; and
(4) the recent increase in the illegal importation of amphetamine and precursor chemicals.
(d) EMERGENCY AUTHORITY TO SENTENCING COMMISSION- The United States Sentencing Commission shall promulgate amendments pursuant to this section as soon as practicable after the date of the enactment of this Act in accordance with the procedure set forth in section 21(a) of the Sentencing Act of 1987 (Public Law 100-182), as though the authority under that Act had not expired.
SEC. 1712. ENHANCED PUNISHMENT OF AMPHETAMINE OR METHAMPHETAMINE LABORATORY OPERATORS.
(a) FEDERAL SENTENCING GUIDELINES-
(1) IN GENERAL- Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall amend the Federal sentencing guidelines in accordance with paragraph (2) with respect to any offense relating to the manufacture, attempt to manufacture, or conspiracy to manufacture amphetamine or methamphetamine in violation of--
(A) the Controlled Substances Act (21 U.S.C. 801 et seq.);
(B) the Controlled Substances Import and Export Act (21 U.S.C. 951 et seq.); or
(C) the Maritime Drug Law Enforcement Act (46 U.S.C. App. 1901 et seq.).
(2) REQUIREMENTS- In carrying out this paragraph, the United States Sentencing Commission shall--
(A) if the offense created a substantial risk of harm to human life (other than a life described in subparagraph (B)) or the environment, increase the base offense level for the offense--
(i) by not less than 3 offense levels above the applicable level in effect on the date of the enactment of this Act; or
(ii) if the resulting base offense level after an increase under clause (i) would be less than level 27, to not less than level 27; or
(B) if the offense created a substantial risk of harm to the life of a minor or incompetent, increase the base offense level for the offense--
(i) by not less than 6 offense levels above the applicable level in effect on the date of the enactment of this Act; or
(ii) if the resulting base offense level after an increase under clause (i) would be less than level 30, to not less than level 30.
(3) EMERGENCY AUTHORITY TO SENTENCING COMMISSION- The United States Sentencing Commission shall promulgate amendments pursuant to this subsection as soon as practicable after the date of enactment of this Act in accordance with the procedure set forth in section 21(a) of the Sentencing Act of 1987 (Public Law 100-182), as though the authority under that Act had not expired.
(b) EFFECTIVE DATE- The amendments made pursuant to this section shall apply with respect to any offense occurring on or after the date that is 60 days after the date of enactment of this Act.
SEC. 1713. MANDATORY RESTITUTION FOR VIOLATIONS OF CONTROLLED SUBSTANCES ACT AND CONTROLLED SUBSTANCES IMPORT AND EXPORT ACT RELATING TO AMPHETAMINE AND METHAMPHETAMINE.
(a) MANDATORY RESTITUTION- Section 413(q) of the Controlled Substances Act (21 U.S.C. 853(q)) is amended--
(1) in the matter preceding paragraph (1), by striking `may' and inserting `shall';
(2) by inserting `amphetamine or' before `methamphetamine' each place it appears;
(A) by inserting `, the State or local government concerned, or both the United States and the State or local government concerned' after `United States' the first place it appears; and
(B) by inserting `or the State or local government concerned, as the case may be,' after `United States' the second place it appears; and
(4) in paragraph (3), by striking `section 3663 of title 18, United States Code' and inserting `section 3663A of title 18, United States Code'.
(b) DEPOSIT OF AMOUNTS IN DEPARTMENT OF JUSTICE ASSETS FORFEITURE FUND- Section 524(c)(4) of title 28, United States Code, is amended--
(1) by striking `and' at the end of subparagraph (B);
(2) by striking the period at the end of subparagraph (C) and inserting `; and'; and
(3) by adding at the end the following:
`(D) all amounts collected--
`(i) by the United States pursuant to a reimbursement order under paragraph (2) of section 413(q) of the Controlled Substances Act (21 U.S.C. 853(q)); and
`(ii) pursuant to a restitution order under paragraph (1) or (3) of section 413(q) of the Controlled Substances Act for injuries to the United States.'.
(c) CLARIFICATION OF CERTAIN ORDERS OF RESTITUTION- Section 3663(c)(2)(B) of title 18, United States Code, is amended by inserting `which may be' after `the fine'.
(d) EXPANSION OF APPLICABILITY OF MANDATORY RESTITUTION- Section 3663A(c)(1)(A)(ii) of title 18, United States Code, is amended by inserting `or under section 416(a) of the Controlled Substances Act (21 U.S.C. 856(a)),' after `under this title,'.
(e) TREATMENT OF ILLICIT SUBSTANCE MANUFACTURING OPERATIONS AS CRIMES AGAINST PROPERTY- Section 416 of the Controlled Substances Act (21 U.S.C. 856) is amended by adding at the end the following new subsection:
`(c) A violation of subsection (a) shall be considered an offense against property for purposes of section 3663A(c)(1)(A)(ii) of title 18, United States Code.'.
SEC. 1714. METHAMPHETAMINE PARAPHERNALIA.
Section 422(d) of the Controlled Substances Act (21 U.S.C. 863(d)) is amended in the matter preceding paragraph (1) by inserting `methamphetamine,' after `PCP,'.
CHAPTER 2--ENHANCED LAW ENFORCEMENT
SEC. 1721. ENVIRONMENTAL HAZARDS ASSOCIATED WITH ILLEGAL MANUFACTURE OF AMPHETAMINE AND METHAMPHETAMINE.
(a) USE OF AMOUNTS OR DEPARTMENT OF JUSTICE ASSETS FORFEITURE FUND- Section 524(c)(1)(E) of title 28, United States Code, is amended--
(1) by inserting `(i) for' before `disbursements';
(2) by inserting `and' after the semicolon; and
(3) by adding at the end the following:
`(I) costs incurred by or on behalf of the Department of Justice in connection with the removal, for purposes of Federal forfeiture and disposition, of any hazardous substance or pollutant or contaminant associated with the illegal manufacture of amphetamine or methamphetamine; and
`(II) costs incurred by or on behalf of a State or local government in connection with such removal in any case in which such State or local government has assisted in a Federal prosecution relating to amphetamine or methamphetamine, to the extent such costs exceed equitable sharing payments made to such State or local government in such case;'.
(b) GRANTS UNDER DRUG CONTROL AND SYSTEM IMPROVEMENT GRANT PROGRAM- Section 501(b)(3) of the Omnibus Crime Control and Safe Streets Act of 1968 is amended by inserting before the semicolon the following: `and to remove any hazardous substance or pollutant or contaminant associated with the illegal manufacture of amphetamine or methamphetamine'.
(c) AMOUNTS SUPPLEMENT AND NOT SUPPLANT-
(1) ASSETS FORFEITURE FUND- Any amounts made available from the Department of Justice Assets Forfeiture Fund in a fiscal year by reason of the amendment made by subsection (a) shall supplement, and not supplant, any other amounts made available to the Department of Justice in such fiscal year from other sources for payment of costs described in section 524(c)(1)(E)(ii) of title 28, United States Code, as so amended.
(2) GRANT PROGRAM- Any amounts made available in a fiscal year under the grant program under section 501(b)(3) of the Omnibus Crime Control and Safe Streets Act of 1968 for the removal of hazardous substances or pollutants or contaminants associated with the illegal manufacture of amphetamine or methamphetamine by reason of the amendment made by subsection (b) shall supplement, and not supplant, any other amounts made available in such fiscal year from other sources for such removal.
SEC. 1722. REDUCTION IN RETAIL SALES TRANSACTION THRESHOLD FOR NON-SAFE HARBOR PRODUCTS CONTAINING PSEUDOEPHEDRINE OR PHENLYPROPANOLAMINE.
(a) REDUCTION IN TRANSACTION THRESHOLD- Section 102(39)(A)(iv)(II) of the Controlled Substances Act (21 U.S.C. 802(39)(A)(iv)(II) is amended--
(1) by striking `24 grams' both places it appears and inserting `9 grams'; and
(2) by inserting before the semicolon at the end the following: `and sold in package sizes of not more than 3 grams of pseudoephedrine base or 3 grams of phenylpropanolamine base'.
(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect one year after the date of the enactment of this Act.
SEC. 1723. TRAINING FOR DRUG ENFORCEMENT ADMINISTRATION AND STATE AND LOCAL LAW ENFORCEMENT PERSONNEL RELATING TO CLANDESTINE LABORATORIES.
(1) REQUIREMENT- The Administrator of the Drug Enforcement Administration shall carry out the programs described in subsection (b) with respect to the law enforcement personnel of States and localities determined by the Administrator to have significant levels of methamphetamine-related or amphetamine-related crime or projected by the Administrator to have the potential for such levels of crime in the future.
(2) DURATION- The duration of any program under that subsection may not exceed 3 years.
(b) COVERED PROGRAMS- The programs described in this subsection are as follows:
(1) ADVANCED MOBILE CLANDESTINE LABORATORY TRAINING TEAMS- A program of advanced mobile clandestine laboratory training teams, which shall provide information and training to State and local law enforcement personnel in techniques utilized in conducting undercover investigations and conspiracy cases, and other information designed to assist in the investigation of the illegal manufacturing and trafficking of amphetamine and methamphetamine.
(2) BASIC CLANDESTINE LABORATORY CERTIFICATION TRAINING- A program of basic clandestine laboratory certification training, which shall provide information and training--
(A) to Drug Enforcement Administration personnel and State and local law enforcement personnel for purposes of enabling such personnel to meet any certification requirements under law with respect to the handling of wastes created by illegal amphetamine and methamphetamine laboratories; and
(B) to State and local law enforcement personnel for purposes of enabling such personnel to provide the information and training covered by subparagraph (A) to other State and local law enforcement personnel.
(3) CLANDESTINE LABORATORY RECERTIFICATION AND AWARENESS TRAINING- A program of clandestine laboratory recertification and awareness training, which shall provide information and training to State and local law enforcement personnel for purposes of enabling such personnel to provide recertification and awareness training relating to clandestine laboratories to additional State and local law enforcement personnel.
(c) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated for each of fiscal years 2000, 2001, and 2002 amounts as follows:
(1) $1,500,000 to carry out the program described in subsection (b)(1).
(2) $3,000,000 to carry out the program described in subsection (b)(2).
(3) $1,000,000 to carry out the program described in subsection (b)(3).
SEC. 1724. COMBATING METHAMPHETAMINE AND AMPHETAMINE IN HIGH INTENSITY DRUG TRAFFICKING AREAS.
(1) IN GENERAL- The Director of National Drug Control Policy shall use amounts available under this section to combat the trafficking of methamphetamine and amphetamine in areas designated by the Director as high intensity drug trafficking areas.
(2) ACTIVITIES- In meeting the requirement in paragraph (1), the Director shall provide funds for--
(A) employing additional Federal law enforcement personnel, or facilitating the employment of additional State and local law enforcement personnel, including agents, investigators, prosecutors, laboratory technicians, chemists, investigative assistants, and drug-prevention specialists; and
(B) such other activities as the Director considers appropriate.
(b) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section--
(1) $15,000,000 for fiscal year 2000; and
(2) such sums as may be necessary for each of fiscal years 2001 through 2004.
(c) APPORTIONMENT OF FUNDS-
(1) FACTORS IN APPORTIONMENT- The Director shall apportion amounts appropriated for a fiscal year pursuant to the authorization of appropriations in subsection (b) for activities under subsection (a) among and within areas designated by the Director as high intensity drug trafficking areas based on the following factors:
(A) The number of methamphetamine manufacturing facilities and amphetamine manufacturing facilities discovered by Federal, State, or local law enforcement officials in the previous fiscal year.
(B) The number of methamphetamine prosecutions and amphetamine prosecutions in Federal, State, or local courts in the previous fiscal year.
(C) The number of methamphetamine arrests and amphetamine arrests by Federal, State, or local law enforcement officials in the previous fiscal year.
(D) The amounts of methamphetamine, amphetamine, or listed chemicals (as that term is defined in section 102(33) of the Controlled Substances Act (21 U.S.C. 802(33)) seized by Federal, State, or local law enforcement officials in the previous fiscal year.
(E) Intelligence and predictive data from the Drug Enforcement Administration and the Department of Health and Human Services showing patterns and trends in abuse, trafficking, and transportation in methamphetamine, amphetamine, and listed chemicals (as that term is so defined).
(2) CERTIFICATION- Before the Director apportions any funds under this subsection to a high intensity drug trafficking area, the Director shall certify that the law enforcement entities responsible for clandestine methamphetamine and amphetamine laboratory seizures in that area are providing laboratory seizure data to the national clandestine laboratory database at the El Paso Intelligence Center.
(d) LIMITATION ON ADMINISTRATIVE COSTS- Not more than 5 percent of the amount appropriated in a fiscal year pursuant to the authorization of appropriations for that fiscal year in subsection (b) may be available in that fiscal year for administrative costs associated with activities under subsection (a).
SEC. 1725. COMBATING AMPHETAMINE AND METHAMPHETAMINE MANUFACTURING AND TRAFFICKING.
(a) ACTIVITIES- In order to combat the illegal manufacturing and trafficking in amphetamine and methamphetamine, the Administrator of the Drug Enforcement Administration may--
(1) assist State and local law enforcement in small and mid-sized communities in all phases of investigations related to such manufacturing and trafficking, including assistance with foreign-language interpretation;
(2) staff additional regional enforcement and mobile enforcement teams related to such manufacturing and trafficking;
(3) establish additional resident offices and posts of duty to assist State and local law enforcement in rural areas in combating such manufacturing and trafficking;
(4) provide the Special Operations Division of the Administration with additional agents and staff to collect, evaluate, interpret, and disseminate critical intelligence targeting the command and control operations of major amphetamine and methamphetamine manufacturing and trafficking organizations;
(5) enhance the investigative and related functions of the Chemical Control Program of the Administration to implement more fully the provisions of the Comprehensive Methamphetamine Control Act of 1996 (Public Law 104-237);
(6) design an effective means of requiring an accurate accounting of the import and export of list I chemicals, and coordinate investigations relating to the diversion of such chemicals;
(7) develop a computer infrastructure sufficient to receive, process, analyze, and redistribute time-sensitive enforcement information from suspicious order reporting to field offices of the Administration and other law enforcement and regulatory agencies, including the continuing development of the Suspicious Order Reporting and Tracking System (SORTS) and the Chemical Transaction Database (CTRANS) of the Administration;
(8) establish an education, training, and communication process in order to alert the industry to current trends and emerging patterns in the illegal manufacturing of amphetamine and methamphetamine; and
(9) carry out such other activities as the Administrator considers appropriate.
(b) ADDITIONAL POSITIONS AND PERSONNEL-
(1) IN GENERAL- In carrying out activities under subsection (a), the Administrator may establish in the Administration not more than 50 full-time positions, including not more than 31 special-agent positions, and may appoint personnel to such positions.
(2) PARTICULAR POSITIONS- In carrying out activities under paragraphs (5) through (8) of subsection (a), the Administrator may establish in the Administration not more than 15 full-time positions, including not more than 10 diversion investigator positions, and may appoint personnel to such positions. Any positions established under this paragraph are in addition to any positions established under paragraph (1).
(c) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated for the Drug Enforcement Administration for each fiscal year after fiscal year 1999, $9,500,000 for purposes of carrying out the activities authorized by subsection (a) and employing personnel in positions established under subsection (b), of which $3,000,000 shall be available for activities under paragraphs (5) through (8) of subsection (a) and employing personnel in positions established under subsection (b)(2).
CHAPTER 3--ABUSE PREVENTION AND TREATMENT
SEC. 1731. EXPANSION OF METHAMPHETAMINE RESEARCH.
Section 464N of the Public Health Service Act (42 U.S.C. 285o-2) is amended by adding at the end the following:
`(c) METHAMPHETAMINE RESEARCH-
`(1) GRANTS OR COOPERATIVE AGREEMENTS- The Director of the Institute may make grants or enter into cooperative agreements to expand the current and on-going interdisciplinary research and clinical trials with treatment centers of the National Drug Abuse Treatment Clinical Trials Network relating to methamphetamine abuse and addiction and other biomedical, behavioral, and social issues related to methamphetamine abuse and addiction.
`(2) USE OF FUNDS- Amounts made available under a grant or cooperative agreement under paragraph (1) for methamphetamine abuse and addiction may be used for research and clinical trials relating to--
`(A) the effects of methamphetamine abuse on the human body, including the brain;
`(B) the addictive nature of methamphetamine and how such effects differ with respect to different individuals;
`(C) the connection between methamphetamine abuse and mental health;
`(D) the identification and evaluation of the most effective methods of prevention of methamphetamine abuse and addiction;
`(E) the identification and development of the most effective methods of treatment of methamphetamine addiction, including pharmacological treatments;
`(F) risk factors for methamphetamine abuse;
`(G) effects of methamphetamine abuse and addiction on pregnant women and their fetuses; and
`(H) cultural, social, behavioral, neurological and psychological reasons that individuals abuse methamphetamine, or refrain from abusing methamphetamine.
`(3) RESEARCH RESULTS- The Director shall promptly disseminate research results under this subsection to Federal, State and local entities involved in combating methamphetamine abuse and addiction.
`(4) AUTHORIZATION OF APPROPRIATIONS-
`(A) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out paragraph (1), such sums as may be necessary for each fiscal year.
`(B) SUPPLEMENT NOT SUPPLANT- Amounts appropriated pursuant to the authorization of appropriations in subparagraph (A) for a fiscal year shall supplement and not supplant any other amounts appropriated in such fiscal year for research on methamphetamine abuse and addiction.'.
SEC. 1732. METHAMPHETAMINE AND AMPHETAMINE TREATMENT INITIATIVE BY CENTER FOR SUBSTANCE ABUSE TREATMENT.
Subpart 1 of part B of title V of the Public Health Service Act (42 U.S.C. 290bb et seq.) is amended by adding at the end the following new section:
`METHAMPHETAMINE AND AMPHETAMINE TREATMENT INITIATIVE
`(1) AUTHORITY TO MAKE GRANTS- The Director of the Center for Substance Abuse Treatment may make grants to States and Indian tribes recognized by the United States that have a high rate, or have had a rapid increase, in methamphetamine or amphetamine abuse or addiction in order to permit such States and Indian tribes to expand activities in connection with the treatment of methamphetamine or amphetamine abuser or addiction in the specific geographical areas of such States or Indian tribes, as the case may be, where there is such a rate or has been such an increase.
`(2) RECIPIENTS- Any grants under paragraph (1) shall be directed to the substance abuse directors of the States, and of the appropriate tribal government authorities of the Indian tribes, selected by the Director to receive such grants.
`(3) NATURE OF ACTIVITIES- Any activities under a grant under paragraph (1) shall be based on reliable scientific evidence of their efficacy in the treatment of methamphetamine or amphetamine abuse or addiction.
`(b) GEOGRAPHIC DISTRIBUTION- The Director shall ensure that grants under subsection (a) are distributed equitably among the various regions of the country and among rural, urban, and suburban areas that are affected by methamphetamine or amphetamine abuse or addiction.
`(c) ADDITIONAL ACTIVITIES- The Director shall--
`(1) evaluate the activities supported by grants under subsection (a);
`(2) disseminate widely such significant information derived from the evaluation as the Director considers appropriate to assist States, Indian tribes, and private providers of treatment services for methamphetamine or amphetamine abuser or addiction in the treatment of methamphetamine or amphetamine abuse or addiction; and
`(3) provide States, Indian tribes, and such providers with technical assistance in connection with the provision of such treatment.
`(d) AUTHORIZATION OF APPROPRIATIONS-
`(1) IN GENERAL- There are authorized to be appropriated to carry out this section $10,000,000 for fiscal year 2000 and such sums as may be necessary for each of fiscal years 2001 and 2002.
`(2) USE OF CERTAIN FUNDS- Of the funds appropriated to carry out this section in any fiscal year, the lesser of 5 percent of such funds or $1,000,000 shall be available to the Director for purposes of carrying out subsection (c).'.
SEC. 1733. EXPANSION OF METHAMPHETAMINE ABUSE PREVENTION EFFORTS.
(a) EXPANSION OF EFFORTS- Section 515 of the Public Health Service Act (42 U.S.C. 290bb-21) is amended by adding at the end the following:
`(e)(1) The Administrator may make grants to and enter into contracts and cooperative agreements with public and nonprofit private entities to enable such entities--
`(A) to carry out school-based programs concerning the dangers of abuse of and addiction to methamphetamine and other illicit drugs, using methods that are effective and science-based, including initiatives that give students the responsibility to create their own anti-drug abuse education programs for their schools; and
`(B) to carry out community-based abuse and addiction prevention programs relating to methamphetamine and other illicit drugs that are effective and science-based.
`(2) Amounts made available under a grant, contract or cooperative agreement under paragraph (1) shall be used for planning, establishing, or administering prevention programs relating to methamphetamine and other illicit drugs in accordance with paragraph (3).
`(3)(A) Amounts provided under this subsection may be used--
`(i) to carry out school-based programs that are focused on those districts with high or increasing rates of methamphetamine abuse and addiction and targeted at populations which are most at risk to start abuse of methamphetamine and other illicit drugs;
`(ii) to carry out community-based prevention programs that are focused on those populations within the community that are most at-risk for abuse of and addiction to methamphetamine and other illicit drugs;
`(iii) to assist local government entities to conduct appropriate prevention activities relating to methamphetamine and other illicit drugs;
`(iv) to train and educate State and local law enforcement officials, prevention and education officials, members of community anti-drug coalitions and parents on the signs of abuse of and addiction to methamphetamine and other illicit drugs, and the options for treatment and prevention;
`(v) for planning, administration, and educational activities related to the prevention of abuse of and addiction to methamphetamine and other illicit drugs;
`(vi) for the monitoring and evaluation of prevention activities relating to methamphetamine and other illicit drugs, and reporting and disseminating resulting information to the public; and
`(vii) for targeted pilot programs with evaluation components to encourage innovation and experimentation with new methodologies.
`(B) The Administrator shall give priority in making grants under this subsection to rural and urban areas that are experiencing a high rate or rapid increases in methamphetamine abuse and addiction.
`(4)(A) Not less than $500,000 of the amount available in each fiscal year to carry out this subsection shall be made available to the Administrator, acting in consultation with other Federal agencies, to support and conduct periodic analyses and evaluations of effective prevention programs for abuse of and addiction to methamphetamine and other illicit drugs and the development of appropriate strategies for disseminating information about and implementing these programs.
`(B) The Administrator shall submit to the committees of Congress referred to in subparagraph (C) an annual report with the results of the analyses and evaluation under subparagraph (A).
`(C) The committees of Congress referred to in this subparagraph are the following:
`(i) The Committees on Health, Education, Labor, and Pensions, the Judiciary, and Appropriations of the Senate.
`(ii) The Committees on Commerce, the Judiciary, and Appropriations of the House of Representatives.'.
(b) AUTHORIZATION OF APPROPRIATIONS FOR EXPANSION OF ABUSE PREVENTION EFFORTS AND PRACTITIONER REGISTRATION REQUIREMENTS- There is authorized to be appropriated to carry out section 515(e) of the Public Health Service Act (as added by subsection (a)) and section 303(g)(2) of the Controlled Substances Act (as added by section 18(a) of this Act), $15,000,000 for fiscal year 2000, and such sums as may be necessary for each succeeding fiscal year.
SEC. 1734. STUDY OF METHAMPHETAMINE TREATMENT.
(1) REQUIREMENT- The Secretary of Health and Human Services shall, in consultation with the Institute of Medicine of the National Academy of Sciences, conduct a study on the development of medications for the treatment of addiction to amphetamine and methamphetamine.
(2) REPORT- Not later than nine months after the date of the enactment of this Act, the Secretary shall submit to the Committees on the Judiciary of the Senate and House of Representatives a report on the results of the study conducted under paragraph (1).
(b) AUTHORIZATION OF APPROPRIATIONS- There are hereby authorized to be appropriated for the Department of Health and Human Services for fiscal year 2000 such sums as may be necessary to meet the requirements of subsection (a).
CHAPTER 4--REPORTS
SEC. 1741. REPORTS ON CONSUMPTION OF METHAMPHETAMINE AND OTHER ILLICIT DRUGS IN RURAL AREAS, METROPOLITAN AREAS, AND CONSOLIDATED METROPOLITAN AREAS.
The Secretary of Health and Human Services shall include in each National Household Survey on Drug Abuse appropriate prevalence data and information on the consumption of methamphetamine and other illicit drugs in rural areas, metropolitan areas, and consolidated metropolitan areas.
SEC. 1742. REPORT ON DIVERSION OF ORDINARY OVER-THE-COUNTER PSEUDOEPHEDRINE AND PHENYLPROPANOLAMINE PRODUCTS.
(a) STUDY- The Attorney General shall conduct a study of the use of ordinary over-the-counter pseudoephedrine and phenylpropanolamine products in the clandestine production of illicit drugs. Sources of data for the study shall include the following:
(1) Information from Federal, State, and local clandestine laboratory seizures and related investigations identifying the source, type, or brand of drug products being utilized and how they were obtained for the illicit production of methamphetamine and amphetamine.
(2) Information submitted voluntarily from the pharmaceutical and retail industries involved in the manufacture, distribution, and sale of drug products containing ephedrine, pseudoephedrine, and phenylpropanolamine, including information on changes in the pattern, volume, or both, of sales of ordinary over-the-counter pseudoephedrine and phenylpropanolamine products.
(1) REQUIREMENT- Not later than April 1, 2001, the Attorney General shall submit to Congress a report on the study conducted under subsection (a).
(2) ELEMENTS- The report shall include--
(A) the findings of the Attorney General as a result of the study; and
(B) such recommendations on the need to establish additional measures to prevent diversion of ordinary over-the-counter pseudoephedrine and phenylpropanolamine (such as a threshold on ordinary over-the-counter pseudoephedrine and phenylpropanolamine products) as the Attorney General considers appropriate.
(3) MATTERS CONSIDERED- In preparing the report, the Attorney General shall consider the comments and recommendations of State and local law enforcement and regulatory officials and of representatives of the industry described in subsection (a)(2).
Subtitle B--Controlled Substances Generally
CHAPTER 1--CRIMINAL MATTERS
SEC. 1751. ENHANCED PUNISHMENT FOR TRAFFICKING IN LIST I CHEMICALS.
(a) AMENDMENTS TO FEDERAL SENTENCING GUIDELINES- Pursuant to its authority under section 994(p) of title 28, United States, the United States Sentencing Commission shall amend the Federal sentencing guidelines in accordance with this section with respect to any violation of paragraph (1) or (2) of section 401(d) of the Controlled Substances Act (21 U.S.C. 841(d)) involving a list I chemical and any violation of paragraph (1) or (3) of section 1010(d) of the Controlled Substance Import and Export Act (21 U.S.C. 960(d)) involving a list I chemical.
(b) EPHEDRINE, PHENYLPROPANOLAMINE, AND PSEUDOEPHEDRINE-
(1) IN GENERAL- In carrying this section, the United States Sentencing Commission shall, with respect to each offense described in subsection (a) involving ephedrine, phenylpropanolamine, or pseudoephedrine (including their salts, optical isomers, and salts of optical isomers), review and amend its guidelines to provide for increased penalties such that those penalties corresponded to the quantity of controlled substance that could reasonably have been manufactured using the quantity of ephedrine, phenylpropanolamine, or pseudoephedrine possessed or distributed.
(2) CONVERSION RATIOS- For the purposes of the amendments made by this subsection, the quantity of controlled substance that could reasonably have been manufactured shall be determined by using a table of manufacturing conversion ratios for ephedrine, phenylpropanolamine, and pseudoephedrine, which table shall be established by the Sentencing Commission based on scientific, law enforcement, and other data the Sentencing Commission considers appropriate.
(c) OTHER LIST I CHEMICALS- In carrying this section, the United States Sentencing Commission shall, with respect to each offense described in subsection (a) involving any list I chemical other than ephedrine, phenylpropanolamine, or pseudoephedrine, review and amend its guidelines to provide for increased penalties such that those penalties reflect the dangerous nature of such offenses, the need for aggressive law enforcement action to fight such offenses, and the extreme dangers associated with unlawful activity involving methamphetamine and amphetamine, including--
(1) the rapidly growing incidence of controlled substance manufacturing;
(2) the extreme danger inherent in manufacturing controlled substances;
(3) the threat to public safety posed by manufacturing controlled substances; and
(4) the recent increase in the importation, possession, and distribution of list I chemicals for the purpose of manufacturing controlled substances.
(d) EMERGENCY AUTHORITY TO SENTENCING COMMISSION- The United States Sentencing Commission shall promulgate amendments pursuant to this section as soon as practicable after the date of the enactment of this Act in accordance with the procedure set forth in section 21(a) of the Sentencing Act of 1987 (Public Law 100-182), as though the authority under that Act had not expired.
SEC. 1752. MAIL ORDER REQUIREMENTS.
Section 310(b)(3) of the Controlled Substances Act (21 U.S.C. 830(b)(3)) is amended--
(1) by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively;
(2) by inserting before subparagraph (B), as so redesignated, the following new subparagraph (A):
`(A) As used in this paragraph:
`(i) The term `drug product' means an active ingredient in dosage form that has been approved or otherwise may be lawfully marketed under the Food, Drug, and Cosmetic Act for distribution in the United States.
`(ii) The term `valid prescription' means a prescription which is issued for a legitimate medical purpose by an individual practitioner licensed by law to administer and prescribe the drugs concerned and acting in the usual course of the practitioner's professional practice.';
(3) in subparagraph (B), as so redesignated, by inserting `or who engages in an export transaction' after `nonregulated person'; and
(4) adding at the end the following:
`(D) Except as provided in subparagraph (E), the following distributions to a nonregulated person, and the following export transactions, shall not be subject to the reporting requirement in subparagraph (B):
`(i) Distributions of sample packages of drug products when such packages contain not more than 2 solid dosage units or the equivalent of 2 dosage units in liquid form, not to exceed 10 milliliters of liquid per package, and not more than one package is distributed to an individual or residential address in any 30-day period.
`(ii) Distributions of drug products by retail distributors that may not include face-to-face transactions to the extent that such distributions are consistent with the activities authorized for a retail distributor as specified in section 102(46).
`(iii) Distributions of drug products to a resident of a long term care facility (as that term is defined in regulations prescribed by the Attorney General) or distributions of drug products to a long term care facility for dispensing to or for use by a resident of that facility.
`(iv) Distributions of drug products pursuant to a valid prescription.
`(v) Exports which have been reported to the Attorney General pursuant to section 1004 or 1018 or which are subject to a waiver granted under section 1018(e)(2).
`(vi) Any quantity, method, or type of distribution or any quantity, method, or type of distribution of a specific listed chemical (including specific formulations or drug products) or of a group of listed chemicals (including specific formulations or drug products) which the Attorney General has excluded by regulation from such reporting requirement on the basis that such reporting is not necessary for the enforcement of this title or title III.
`(E) The Attorney General may revoke any or all of the exemptions listed in subparagraph (D) for an individual regulated person if he finds that drug products distributed by the regulated person are being used in violation of this title or title III. The regulated person shall be notified of the revocation, which will be effective upon receipt by the person of such notice, as provided in section 1018(c)(1), and shall have the right to an expedited hearing as provided in section 1018(c)(2).'.
SEC. 1753. INCREASED PENALTIES FOR DISTRIBUTING DRUGS TO MINORS.
Section 418 of the Controlled Substances Act (21 U.S.C. 859) is amended--
(1) in subsection (a), by striking `one year' and inserting `3 years'; and
(2) in subsection (b), by striking `one year' and inserting `5 years'.
SEC. 1754. INCREASED PENALTY FOR DRUG TRAFFICKING IN OR NEAR A SCHOOL OR OTHER PROTECTED LOCATION.
Section 419 of the Controlled Substances Act (21 U.S.C. 860) is amended--
(1) in subsection (a), by striking `one year' and inserting `3 years'; and
(2) in subsection (b), by striking `three years' each place that term appears and inserting `5 years'.
SEC. 1755. ADVERTISEMENTS FOR DRUG PARAPHERNALIA AND SCHEDULE I CONTROLLED SUBSTANCES.
(a) DRUG PARAPHERNALIA- Subsection (a)(1) of section 422 of the Controlled Substances Act (21 U.S.C. 863) is amended by inserting `, directly or indirectly advertise for sale,' after `sell'.
(b) DIRECTLY OR INDIRECTLY ADVERTISE FOR SALE DEFINED- Such section 422 is further amended by adding at the end the following new subsection:
`(g) In this section, the term `directly or indirectly advertise for sale' means the use of any communication facility (as that term is defined in section 403(b)) to post, publicize, transmit, publish, link to, broadcast, or otherwise advertise any matter (including a telephone number or electronic or mail address) with the intent to facilitate or promote a transaction in.'.
(c) SCHEDULE I CONTROLLED SUBSTANCES- Section 403(c) of such Act (21 U.S.C. 843(c)) is amended--
(1) by inserting `(1)' after `(c)'; and
(2) in paragraph (1), as so designated--
(A) in the first sentence, by inserting before the period the following: `, or to directly or indirectly advertise for sale (as that term is defined in section 422(g)) any Schedule I controlled substance'; and
(B) in the second sentence, by striking `term `advertisement' and inserting `term `written advertisement'.
SEC. 1756. THEFT AND TRANSPORTATION OF ANHYDROUS AMMONIA FOR PURPOSES OF ILLICIT PRODUCTION OF CONTROLLED SUBSTANCES.
(a) IN GENERAL- Part D of the Controlled Substances Act (21 U.S.C. 841 et seq.) is amended by adding at the end the following:
`ANHYDROUS AMMONIA
`SEC. 423. (a) It is unlawful for any person--
`(1) to steal anhydrous ammonia, or
`(2) to transport stolen anhydrous ammonia across State lines,
knowing, intending, or having reasonable cause to believe that such anhydrous ammonia will be used to manufacture a controlled substance in violation of this part.
`(b) Any person who violates subsection (a) shall be imprisoned or fined, or both, in accordance with section 403(d) as if such violation were a violation of a provision of section 403.'.
(b) CLERICAL AMENDMENT- The table of contents for that Act is amended by inserting after the item relating to section 421 the following new items:
`Sec. 422. Drug paraphernalia.
`Sec. 423. Anhydrous ammonia.'.
(c) ASSISTANCE FOR CERTAIN RESEARCH-
(1) AGREEMENT- The Administrator of the Drug Enforcement Administration shall seek to enter into an agreement with Iowa State University in order to permit the University to continue and expand its current research into the development of inert agents that, when added to anhydrous ammonia, eliminate the usefulness of anhydrous ammonia as an ingredient in the production of methamphetamine.
(2) REIMBURSABLE PROVISION OF FUNDS- The agreement under paragraph (1) may provide for the provision to Iowa State University, on a reimbursable basis, of $500,000 for purposes the activities specified in that paragraph.
(3) AUTHORIZATION OF APPROPRIATIONS- There is hereby authorized to be appropriated for the Drug Enforcement Administration for fiscal year 2000, $500,000 for purposes of carrying out the agreement under this subsection.
SEC. 1757. CRIMINAL PROHIBITION ON DISTRIBUTION OF CERTAIN INFORMATION RELATING TO THE MANUFACTURE OF CONTROLLED SUBSTANCES.
(a) IN GENERAL- Part I of title 18, United States Code, is amended by inserting after chapter 21 the following new chapter:
`CHAPTER 22--CONTROLLED SUBSTANCES
`421. Distribution of information relating to manufacture of controlled substances.
`Sec. 421. Distribution of information relating to manufacture of controlled substances
`(a) PROHIBITION ON DISTRIBUTION OF INFORMATION RELATING TO MANUFACTURE OF CONTROLLED SUBSTANCES-
`(1) CONTROLLED SUBSTANCE DEFINED- In this subsection, the term `controlled substance' has the meaning given that term in section 102(6) of the Controlled Substances Act (21 U.S.C. 802(6)).
`(2) PROHIBITION- It shall be unlawful for any person--
`(A) to teach or demonstrate the manufacture of a controlled substance, or to distribute by any means information pertaining to, in whole or in part, the manufacture of a controlled substance, with the intent that the teaching, demonstration, or information be used for, or in furtherance of, an activity that constitutes a Federal crime; or
`(B) to teach or demonstrate to any person the manufacture of a controlled substance, or to distribute to any person, by any means, information pertaining to, in whole or in part, the manufacture of a controlled substance, knowing that such person intends to use the teaching, demonstration, or information for, or in furtherance of, an activity that constitutes a Federal crime.
`(b) PENALTY- Any person who violates subsection (a) shall be fined under this title, imprisoned not more than 10 years, or both.'.
(b) CLERICAL AMENDMENT- The table of chapters at the beginning of part I of title 18, United States Code, is amended by inserting after the item relating to chapter 21 the following new item:
421'.
CHAPTER 2--OTHER MATTERS
SEC. 1761. WAIVER AUTHORITY FOR PHYSICIANS WHO DISPENSE OR PRESCRIBE CERTAIN NARCOTIC DRUGS FOR MAINTENANCE TREATMENT OR DETOXIFICATION TREATMENT.
(a) REQUIREMENTS- Section 303(g) of the Controlled Substances Act (21 U.S.C. 823(g)) is amended--
(1) in paragraph (2), by striking `(A) security' and inserting `(i) security', and by striking `(B) the maintenance' and inserting `(ii) the maintenance';
(2) by redesignating paragraphs (1) through (3) as subparagraphs (A) through (C), respectively;
(3) by inserting `(1)' after `(g)';
(4) by striking `Practitioners who dispense' and inserting `Except as provided in paragraph (2), practitioners who dispense and prescribe'; and
(5) by adding at the end the following:
`(2)(A) Subject to subparagraphs (D), the requirements of paragraph (1) are waived in the case of the dispensing or prescribing, by a physician, of narcotic drugs in schedule III, IV, or V, or combinations of such drugs, if the physician meets the conditions specified in subparagraph (B) and the narcotic drugs or combinations of such drugs meet the conditions specified in subparagraph (C).
`(B)(i) For purposes of subparagraph (A), the conditions specified in this subparagraph with respect to a physician are that, before dispensing or prescribing narcotic drugs in schedule III, IV, or V, or combinations of such drugs, to patients for maintenance or detoxification treatment, the physician submit to the Secretary and the Attorney General a notification of the intent of the physician to begin dispensing or prescribing the drugs or combinations for such purpose, and that the notification to the Secretary also contain the following certifications by the physician:
`(aa) is a physician licensed under State law; and
`(bb) has training or experience and the ability to treat and manage opiate-dependent patients.
`(II) With respect to patients to whom the physician will provide such drugs or combinations of drugs, the physician has the capacity to refer the patients for appropriate counseling and other appropriate ancillary services.
`(III) In any case in which the physician is not in a group practice, the total number of such patients of the physician at any one time will not exceed the applicable number. For purposes of this subclause, the applicable number is 20, except that the Secretary may by regulation change such total number.
`(IV) In any case in which the physician is in a group practice, the total number of such patients of the group practice at any one time will not exceed the applicable number. For purposes of this subclause, the applicable number is 20, except that the Secretary may by regulation change such total number, and the Secretary for such purposes may by regulation establish different categories on the basis of the number of physicians in a group practice and establish for the various categories different numerical limitations on the number of such patients that the group practice may have.
`(ii)(I) The Secretary may, in consultation with the Administrator of the Drug Enforcement Administration, the Administrator of the Substance Abuse and Mental Health Services Administration, the Director of the Center for Substance Abuse Treatment, the Director of the National Institute on Drug Abuse, and the Commissioner of Food and Drugs, issue regulations through notice and comment rulemaking or practice guidelines to implement this paragraph. The regulations or practice guidelines shall address the following:
`(aa) Approval of additional credentialing bodies and the responsibilities of credentialing bodies.
`(bb) Additional exemptions from the requirements of this paragraph and any regulations under this paragraph.
`(II) Nothing in the regulations or practice guidelines under this clause may authorize any Federal official or employee to exercise supervision or control over the practice of medicine or the manner in which medical services are provided.
`(III)(aa) The Secretary shall issue a Treatment Improvement Protocol containing best practice guidelines for the treatment and maintenance of opiate-dependent patients. The Secretary shall develop the protocol in consultation with the Director of the National Institute on Drug Abuse, the Director of the Center for Substance Abuse Treatment, the Administrator of the Drug Enforcement Administration, the Commissioner of Food and Drugs, the Administrator of the Substance Abuse and Mental Health Services Administration, and other substance abuse disorder professionals. The protocol shall be guided by science.
`(bb) The protocol shall be issued not later than 120 days after the date of the enactment of the Methamphetamine Anti-Proliferation Act of 2000.
`(IV) For purposes of the regulations or practice guidelines under subclause (I), a physician shall have training or experience under clause (i)(I)(bb) if the physician meets one or more of the following conditions:
`(aa) The physician is certified in addiction treatment by the American Society of Addiction Medicine, the American Board of Medical Specialties, the American Osteopathic Academy of Addiction Medicine, or any other certified body accredited by the Secretary.
`(bb) The physician has been a clinical investigator in a clinical trial conducted for purposes of securing approval under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or section 351 of the Public Health Service Act (42 U.S.C. 262) of a narcotic drug in schedule III, IV, or V for the treatment of addiction, if such approval was granted.
`(cc) The physician has completed training (through classroom situations, seminars, professional society meetings, electronic communications, or otherwise) provided by the American Society of Addiction Medicine, the American Academy of Addiction Psychiatry, the American Osteopathic Academy of Addiction Medicine, the American Medical Association, the American Osteopathic Association, the American Psychiatric Association, or any other organization that the Secretary determines appropriate for purposes of this item. The curricula may include training in patient need for counseling regarding HIV, Hepatitis C, and other infectious diseases, substance abuse counseling, random drug testing, medical evaluation, annual assessment, prenatal care, diagnosis of addiction, rehabilitation services, confidentiality, and other appropriate topics.
`(dd) The physician has training or experience in the treatment and management of opiate-dependent, which training or experience shall meet such criteria as the Secretary may prescribe. Any such criteria shall be effective for a period of three years after the effective date of such criteria, but the Secretary may extend the effective period of such criteria by additional periods of three years for each extension if the Secretary determines that such extension is appropriate for purposes of this item. Any such extension shall go into effect only if the Secretary publishes a notice of such extension in the Federal Register during the 30-day period ending on the date of the end of the three-year effective period of such criteria to which such extension will apply.
`(ee) The physician is certified in addiction treatment by a State medical licensing board, or an entity accredited by such board, unless the Secretary determines (after an opportunity for a hearing) that the training provided by such board or entity was inadequate for the treatment and management of opiate-dependent patients.
`(C) For purposes of subparagraph (A), the conditions specified in this subparagraph with respect to narcotic drugs in schedule III, IV, or V, or combinations of such drugs, are as follows:
`(i) The drugs or combinations of drugs have, under the Federal Food, Drug and Cosmetic Act or section 351 of the Public Health Service Act, been approved for use in maintenance or detoxification treatment.
`(ii) The drugs or combinations of drugs have not been the subject of an adverse determination. For purposes of this clause, an adverse determination is a determination published in the Federal Register and made by the Secretary, after consultation with the Attorney General, that experience since the approval of the drug or combinations of drugs has shown that the use of the drugs or combinations of drugs for maintenance or detoxification treatment requires additional standards respecting the qualifications of physicians to provide such treatment, or requires standards respecting the quantities of the drugs that may be provided for unsupervised use.
`(D)(i) A waiver under subparagraph (A) with respect to a physician is not in effect unless (in addition to conditions under subparagraphs (B) and (C)) the following conditions are met:
`(I) The notification under subparagraph (B) is in writing and states the name of the physician.
`(II) The notification identifies the registration issued for the physician pursuant to subsection (f).
`(III) If the physician is a member of a group practice, the notification states the names of the other physicians in the practice and identifies the registrations issued for the other physicians pursuant to subsection (f).
`(IV) A period of 45 days has elapsed after the date on which the notification was submitted, and during such period the physician does not receive from the Secretary a written notice that one or more of the conditions specified in subparagraph (B), subparagraph (C), or this subparagraph, have not been met.
`(ii) The Secretary shall provide to the Attorney General such information contained in notifications under subparagraph (B) as the Attorney General may request.
`(E) If in violation of subparagraph (A) a physician dispenses or prescribes narcotic drugs in schedule III, IV, or V, or combinations of such drugs, for maintenance treatment or detoxification treatment, the Attorney General may, for purposes of section 304(a)(4), consider the physician to have committed an act that renders the registration of the physician pursuant to subsection (f) to be inconsistent with the public interest.
`(F)(i) Upon determining that a physician meets the conditions specified in subparagraph (B), the Secretary shall notify the physician and the Attorney General.
`(ii) Upon receiving notice with respect to a physician under clause (i), the Attorney General shall assign the physician an identification number under this paragraph for inclusion with the physician's current registration to prescribe narcotics. An identification number assigned a physician under this clause shall be appropriate to preserve the confidentiality of a patient prescribed narcotic drugs covered by this paragraph by the physician.
`(iii) If the Secretary fails to make a determination described in clause (i) by the end of the 45-day period beginning on the date of the receipt by the Secretary of a notification from a physician under subparagraph (B), the Attorney General shall assign the physician an identification number described in clause (ii) at the end of such period.
`(i) The term `group practice' has the meaning given such term in section 1877(h)(4) of the Social Security Act.
`(ii) The term `physician' has the meaning given such term in section 1861(r) of the Social Security Act.
`(H)(i) This paragraph takes effect on the date of the enactment of the Methamphetamine Anti-Proliferation Act of 2000, and remains in effect thereafter except as provided in clause (iii) (relating to a decision by the Secretary or the Attorney General that this paragraph should not remain in effect).
`(ii) For the purposes relating to clause (iii), the Secretary and the Attorney General shall, during the 3-year period beginning on the date of the enactment of the Methamphetamine Anti-Proliferation Act of 2000, make determinations in accordance with the following:
`(I)(aa) The Secretary shall--
`(aaa) make a determination of whether treatments provided under waivers under subparagraph (A) have been effective forms of maintenance treatment and detoxification treatment in clinical settings;
`(bbb) make a determination regarding whether such waivers have significantly increased (relative to the beginning of such period) the availability of maintenance treatment and detoxification treatment; and
`(ccc) make a determination regarding whether such waivers have adverse consequences for the public health.
`(bb) In making determinations under this subclause, the Secretary--
`(aaa) may collect data from the practitioners for whom waivers under subparagraph (A) are in effect;
`(bbb) shall issue appropriate guidelines or regulations (in accordance with procedures for substantive rules under section 553 of title 5, United States Code) specifying the scope of the data that will be required to be provided under this subclause and the means through which the data will be collected; and
`(ccc) shall, with respect to collecting such data, comply with applicable provisions of chapter 6 of title 5, United States Code (relating to a regulatory flexibility analysis), and of chapter 8 of such title (relating to congressional review of agency rulemaking).
`(II) The Attorney General shall--
`(aa) make a determination of the extent to which there have been violations of the numerical limitations established under subparagraph (B) for the number of individuals to whom a practitioner may provide treatment; and
`(bb) make a determination regarding whether waivers under subparagraph (A) have increased (relative to the beginning of such period) the extent to which narcotic drugs in schedule III, IV, or V, or combinations of such drugs, are being dispensed or prescribed, or possessed, in violation of this Act.
`(iii) If, before the expiration of the period specified in clause (ii), the Secretary or the Attorney General publishes in the Federal Register a decision, made on the basis of determinations under such clause, that this paragraph should not remain in effect, this paragraph ceases to be in effect 60 days after the date on which the decision is so published. The Secretary shall, in making any such decision, consult with the Attorney General, and shall, in publishing the decision in the Federal Register, include any comments received from the Attorney General for inclusion in the publication. The Attorney General shall, in making any such decision, consult with the Secretary, and shall, in publishing the decision in the Federal Register, include any comments received from the Secretary for inclusion in the publication.
`(I) During the 3-year period beginning on the date of the enactment of the Methamphetamine Anti-Proliferation Act of 2000, a State may not preclude a practitioner from dispensing or prescribing narcotic drugs in schedule III, IV, or V, or combinations of such drugs, to patients for maintenance or detoxification treatment in accordance with this paragraph, or the other amendments made by section 22 of that Act, unless, before the expiration of that 3-year period, the State enacts a law prohibiting a practitioner from dispensing or prescribing such drugs or combination of drugs.'.
(b) CONFORMING AMENDMENTS- Section 304 of the Controlled Substances Act (21 U.S.C. 824) is amended--
(1) in subsection (a), in the matter following paragraph (5), by striking `section 303(g)' each place the term appears and inserting `section 303(g)(1)'; and
(2) in subsection (d), by striking `section 303(g)' and inserting `section 303(g)(1)'.
(c) AUTHORIZATION OF APPROPRIATIONS- There is hereby authorized to be appropriated for purposes of activities under section 303(g)(2) of the Controlled Substances Act, as added by subsection (a), amounts as follows:
(1) For fiscal year 2000, $3,000,000.
(2) For each fiscal year after fiscal year 2000, such sums as may be necessary for such fiscal year.
Subtitle C--Cocaine Powder
SEC. 1771. SHORT TITLE.
This subtitle may be cited as the `Powder Cocaine Sentencing Act of 2000'.
SEC. 1772. SENTENCING FOR VIOLATIONS INVOLVING COCAINE POWDER.
(a) AMENDMENT OF CONTROLLED SUBSTANCES ACT-
(1) LARGE QUANTITIES- Section 401(b)(1)(A)(ii) of the Controlled Substances Act (21 U.S.C. 841(b)(1)(A)(ii)) is amended by striking `5 kilograms' and inserting `500 grams'.
(2) SMALL QUANTITIES- Section 401(b)(1)(B)(ii) of the Controlled Substances Act (21 U.S.C. 841(b)(1)(B)(ii)) is amended by striking `500 grams' and inserting `50 grams'.
(b) AMENDMENT OF CONTROLLED SUBSTANCES IMPORT AND EXPORT ACT-
(1) LARGE QUANTITIES- Section 1010(b)(1)(B) of the Controlled Substances Import and Export Act (21 U.S.C. 960(b)(1)(B)) is amended by striking `5 kilograms' and inserting `500 grams'.
(2) SMALL QUANTITIES- Section 1010(b)(2)(B) of the Controlled Substances Import and Export Act (21 U.S.C. 960(b)(2)(B)) is amended by striking `500 grams' and inserting `50 grams'.
(c) AMENDMENT OF SENTENCING GUIDELINES- Pursuant to section 994 of title 28, United States Code, the United States Sentencing Commission shall amend the Federal sentencing guidelines to reflect the amendments made by this section.
Subtitle D--Education Matters
SEC. 1781. SAFE SCHOOLS.
(a) AMENDMENTS- Part F of title XIV of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8921 et seq.) is amended as follows:
(1) SHORT TITLE- Section 14601(a) is amended by replacing `Gun-Free' with `Safe', and `1994' with `1999'.
(2) REQUIREMENTS- Section 14601(b)(1) is amended by inserting after `determined' the following: `to be in possession of felonious quantities of an illegal drug, on school property under the jurisdiction of, or in a vehicle operated by an employee or agent of, a local educational agency in that State, or'.
(3) DEFINITIONS- Section 14601(b)(4) is amended by replacing `Definition' with `Definitions' in the catchline, by replacing `section' in the matter under the catchline with `part', by redesignating the matter under the catchline after the comma as subparagraph (A), by replacing the period with a semicolon, and by adding new subparagraphs (B), (C), and (D) as follows:
`(B) the term `illegal drug' means a controlled substance, as defined in section 102(6) of the Controlled Substances Act (21 U.S.C. 802(6)), the possession of which is unlawful under the Act (21 U.S.C. 801 et seq.) or under the Controlled Substances Import and Export Act (21 U.S.C. 951 et seq.), but does not mean a controlled substance used pursuant to a valid prescription or as authorized by law; and
`(C) the term `illegal drug paraphernalia' means drug paraphernalia, as defined in section 422(d) of the Controlled Substances Act (21 U.S.C. 863(d)), except that the first sentence of that section shall be applied by inserting `or under the Controlled Substances Import and Export Act (21 U.S.C. 951 et seq.)', before the period.
`(D) the term `felonious quantities of an illegal drug' means any quantity of an illegal drug--
`(i) possession of which quantity would, under Federal, State, or local law, either constitute a felony or indicate an intent to distribute; or
`(ii) that is possessed with an intent to distribute.'.
(4) REPORT TO STATE- Section 14601(d)(2)(C) is amended by inserting `illegal drugs or' before `weapons'.
(5) REPEALER- Section 14601 is amended by striking subsection (f).
(6) POLICY REGARDING CRIMINAL JUSTICE SYSTEM REFERRAL- Section 14602(a) is amended by replacing `served by' with `under the jurisdiction of', and by inserting after `who' the following: `is in possession of an illegal drug, or illegal drug paraphernalia, on school property under the jurisdiction of, or in a vehicle operated by an employee or agent of, such agency, or who'.
(7) DATA AND POLICY DISSEMINATION UNDER IDEA- Section 14603 is amended by inserting `current' before `policy', by striking `in effect on October 20, 1994', by striking all the matter after `schools' and inserting a period thereafter, and by inserting before `engaging' the following: `possessing illegal drugs, or illegal drug paraphernalia, on school property, or in vehicles operated by employees or agents of, schools or local educational agencies, or'.
(b) COMPLIANCE DATE; REPORTING- (1) States shall have 2 years from the date of the enactment of this Act to comply with the requirements established in the amendments made by subsection (a).
(2) Not later than 3 years after the date of the enactment of this Act, the Secretary of Education shall submit to Congress a report on any State that is not in compliance with the requirements of this section.
(3) Not later than 2 years after the date of the enactment of this Act, the Secretary of Education shall submit to Congress a report analyzing the strengths and weaknesses of approaches regarding the disciplining of children with disabilities.
SEC. 1782. STUDENT SAFETY AND FAMILY SCHOOL CHOICE.
Subpart 1 of part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.) is amended by inserting after section 1115A of such Act (20 U.S.C. 6316) the following:
`SEC. 1115B. STUDENT SAFETY AND FAMILY SCHOOL CHOICE.
`(a) IN GENERAL- Notwithstanding any other provision of law, if a student is eligible to be served under section 1115(b), or attends a school eligible for a schoolwide program under section 1114, and becomes a victim of a violent criminal offense, including drug-related violence, while in or on the grounds of a public elementary school or secondary school that the student attends and that receives assistance under this part, then the local educational agency may use funds provided under this part or under any other Federal education program to pay the supplementary costs for such student to attend another school. The agency may use the funds to pay for the supplementary costs of such student to attend any other public or private elementary school or secondary school, including a religious school, in the same State as the school where the criminal offense occurred, that is selected by the student's parent. The State educational agency shall determine what actions constitute a violent criminal offense for purposes of this section.
`(b) SUPPLEMENTARY COSTS- The supplementary costs referred to in subsection (a) shall not exceed--
`(1) in the case of a student for whom funds under this section are used to enable the student to attend a public elementary school or secondary school served by a local educational agency that also serves the school where the violent criminal offense occurred, the costs of supplementary educational services and activities described in section 1114(b) or 1115(c) that are provided to the student;
`(2) in the case of a student for whom funds under this section are used to enable the student to attend a public elementary school or secondary school served by a local educational agency that does not serve the school where the violent criminal offense occurred but is located in the same State--
`(A) the costs of supplementary educational services and activities described in section 1114(b) or 1115(c) that are provided to the student; and
`(B) the reasonable costs of transportation for the student to attend the school selected by the student's parent; and
`(3) in the case of a student for whom funds under this section are used to enable the student to attend a private elementary school or secondary school, including a religious school, the costs of tuition, required fees, and the reasonable costs of such transportation.
`(c) CONSTRUCTION- Nothing in this Act or any other Federal law shall be construed to prevent a parent assisted under this section from selecting the public or private, including religious, elementary school or secondary school that a child of the parent will attend within the State.
`(d) CONSIDERATION OF ASSISTANCE- Subject to subsection (h), assistance made available under this section that is used to pay the costs for a student to attend a private or religious school shall not be considered to be Federal aid to the school, and the Federal Government shall have no authority to influence or regulate the operations of a private or religious school as a result of assistance received under this section.
`(e) CONTINUING ELIGIBILITY- A student assisted under this section shall remain eligible to continue receiving assistance under this section for at least 3 academic years without regard to whether the student is eligible for assistance under section 1114 or 1115(b).
`(f) TUITION CHARGES- Assistance under this section may not be used to pay tuition or required fees at a private elementary school or secondary school in an amount that is greater than the tuition and required fees paid by students not assisted under this section at such school.
`(g) SPECIAL RULE- Any school receiving assistance provided under this section shall comply with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) and not discriminate on the basis race, color, or national origin.
`(h) ASSISTANCE; TAXES AND OTHER FEDERAL PROGRAMS-
`(1) ASSISTANCE TO FAMILIES, NOT SCHOOLS- Assistance provided under this section shall be considered to be aid to families, not schools. Use of such assistance at a school shall not be construed to be Federal financial aid or assistance to that school.
`(2) TAXES AND DETERMINATIONS OF ELIGIBILITY FOR OTHER FEDERAL PROGRAMS- Assistance provided under this section to a student shall not be considered to be income of the student or the parent of such student for Federal, State, or local tax purposes or for determining eligibility for any other Federal program.
`(i) PART B OF THE INDIVIDUALS WITH DISABILITIES EDUCATION ACT- Nothing in this section shall be construed to affect the requirements of part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.).
`(j) MAXIMUM AMOUNT- Notwithstanding any other provision of this section, the amount of assistance provided under this part for a student shall not exceed the per pupil expenditure for elementary or secondary education, as appropriate, by the local educational agency that serves the school where the criminal offense occurred for the fiscal year preceding the fiscal year for which the determination is made.'.
SEC. 1783. TRANSFER OF REVENUES.
(a) IN GENERAL- Notwithstanding any other provision of Federal law, a State, a State educational agency, or a local educational agency may transfer any non-Federal public funds associated with the education of a student who is a victim of a violent criminal offense while in or on the grounds of a public elementary school or secondary school served by a local educational agency to another local educational agency or to a private elementary school or secondary school, including a religious school.
(b) DEFINITIONS- For the purpose of subsection (a), the terms `elementary school', `secondary school', `local educational agency', and `State educational agency' have the meanings given such terms in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801).
Subtitle E--Miscellaneous
SEC. 1791. NOTICE; CLARIFICATION.
(a) NOTICE OF ISSUANCE- Section 3103a of title 18, United States Code, is amended by adding at the end the following new sentence: `With respect to any issuance under this section or any other provision of law (including section 3117 and any rule), any notice required, or that may be required, to be given may be delayed pursuant to the standards, terms, and conditions set forth in section 2705, unless otherwise expressly provided by statute.'.
(b) CLARIFICATION- (1) Section 2(e) of Public Law 95-78 (91 Stat. 320) is amended by adding at the end the following:
`Subdivision (d) of such rule, as in effect on this date, is amended by inserting `tangible' before `property' each place it occurs.'.
(2) The amendment made by paragraph (1) shall take effect on the date of the enactment of this Act.
SEC. 1792. DOMESTIC TERRORISM ASSESSMENT AND RECOVERY.
(a) IN GENERAL- The Federal Bureau of Investigation shall prepare a study assessing--
(1) the threat posed by the Fuerzas Armadas de Liberacion Nacional Puertorriquena (FALN) and Los Macheteros terrorist organizations to the United States and its territories as of July 31, 1999; and
(2) what effect the President's offer of clemency to 16 FALN and Los Macheteros members on August 11, 1999, and the subsequent release of 11 of those members, will have on the threat posed by those terrorist organizations to the United States and its territories.
(b) ISSUES EXAMINED- In conducting and preparing the study under subsection (a), the Federal Bureau of Investigation shall address--
(1) the threat posed by the FALN and Los Macheteros organizations to law enforcement officers, prosecutors, defense attorneys, witnesses, and judges involved in the prosecution of members of the FALN and Los Macheteros, both in the United States and its territories;
(2) the roles played by each the 16 members offered clemency by the President on August 11, 1999, in the FALN and Los Macheteros organizations;
(3) the extent to which the FALN and Los Macheteros organizations are associated with other known terrorist organizations or countries suspected of sponsoring terrorism;
(4) the threat posed to the national security interests of the United States by the FALN and Los Macheteros organizations;
(5) whether the offer of clemency to, or release of, any of the 16 FALN or Los Macheteros members would violate, or be inconsistent with, the United States' obligations under international treaties and agreements governing terrorist activity; and
(6) the effect on law enforcement's ability to solve open cases and apprehend fugitives resulting from the offer of clemency to the 16 FALN and Los Macheteros members, without first requiring each of them to provide the government all truthful information and evidence he or she has concerning open investigations and fugitives associated with the FALN and Los Macheteros organizations.
(c) REPORT- Not later than 30 days after the date of the enactment of this Act, the Federal Bureau of Investigation shall submit to Congress a report on the study conducted under subsection (a).
SEC. 1793. ANTIDRUG MESSAGES ON FEDERAL GOVERNMENT INTERNET WEBSITES.
Not later than 90 days after the date of the enactment of this Act, the head of each department, agency, and establishment of the Federal Government shall, in consultation with the Director of the Office of National Drug Control Policy, place antidrug messages on appropriate Internet websites controlled by such department, agency, or establishment which messages shall, where appropriate, contain an electronic hyperlink to the Internet website, if any, of the Office.
SEC. 1794. STATE SCHOOLS.
(a) AMENDMENTS- Part F of title XIV of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8921 et seq.) is amended as follows:
(1) SHORT TITLE- Section 14601(a) is amended by replacing `Gun-Free' with `Safe', and `1994' with `1999'.
(2) REQUIREMENTS- Section 14601(b)(1) is amended by inserting after `determined' the following: `to be in possession of felonious quantities of an illegal drug, on school property under the jurisdiction of, or in a vehicle operated by an employee or agent of, a local educational agency in that State, or'.
(3) DEFINITIONS- Section 14601(b)(4) is amended by replacing `Definition' with `Definitions' in the catchline, by replacing `section' in the matter under the catchline with `part', by redesignating the matter under the catchline after the comma as subparagraph (A), by replacing the period with a semicolon, and by adding new subparagraphs (B), (C), and (D) as follows:
`(B) The term `illegal drug' means a controlled substance, as defined in section 102(6) of the Controlled Substances Act (21 U.S.C. 802(6)), the possession of which is unlawful under the Act (21 U.S.C. 801 et seq.) or under the Controlled Substances Import and Export Act (21 U.S.C. 951 et seq.), but does not mean a controlled substance used pursuant to a valid prescription or as authorized by law.
`(C) The term `illegal drug paraphernalia' means drug paraphernalia, as defined in section 422(d) of the Controlled Substances Act (21 U.S.C. 863(d)), except that the first sentence of that section shall be applied by inserting `or under the Controlled Substances Import and Export Act (21 U.S.C. 951 et seq.)', before the period.
`(D) The term `felonious quantities of an illegal drug' means any quantity of an illegal drug--
`(i) possession of which quantity would, under Federal, State, or local law, either constitute a felony or indicate an intent to distribute; or
`(ii) that is possessed with an intent to distribute.'.
(4) REPORT TO STATE- Section 14601(d)(2)(C) is amended by inserting `illegal drugs or' before `weapons'.
(5) REPEALER- Section 14601 is amended by striking subsection (f).
(6) POLICY REGARDING CRIMINAL JUSTICE SYSTEM REFERRAL- Section 14602(a) is amended by replacing `served by' with `under the jurisdiction of', and by inserting after `who' the following: `is in possession of an illegal drug, or illegal drug paraphernalia, on school property under the jurisdiction of, or in a vehicle operated by an employee or agent of, such agency, or who'.
(7) DATA AND POLICY DISSEMINATION UNDER IDEA- Section 14603 is amended by inserting `current' before `policy', by striking `in effect on October 20, 1994', by striking all the matter after `schools' and inserting a period thereafter, and by inserting before `engaging' the following: `possessing illegal drugs, or illegal drug paraphernalia, on school property, or in vehicles operated by employees or agents of, schools or local educational agencies, or'.
(b) COMPLIANCE DATE; REPORTING- (1) States shall have 2 years from the date of enactment of this Act to comply with the requirements established in the amendments made by subsection (a).
(2) Not later than 3 years after the date of enactment of this Act, the Secretary of Education shall submit to Congress a report on any State that is not in compliance with the requirements of this part.
(3) Not later than 2 years after the date of enactment of this Act, the Secretary of Education shall submit to Congress a report analyzing the strengths and weaknesses of approaches regarding the disciplining of children with disabilities.
SEC. 1795. STUDENT SAFETY AND FAMILY SCHOOL CHOICE.
Subpart 1 of part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.) is amended by inserting after section 1115A of such Act (20 U.S.C. 6316) the following:
`SEC. 1115B. STUDENT SAFETY AND FAMILY SCHOOL CHOICE.
`(a) IN GENERAL- Notwithstanding any other provision of law, if a student is eligible to be served under section 1115(b), or attends a school eligible for a schoolwide program under section 1114, and becomes a victim of a violent criminal offense, including drug-related violence, while in or on the grounds of a public elementary school or secondary school that the student attends and that receives assistance under this part, then the local educational agency may use funds provided under this part or under any other Federal education program to pay the supplementary costs for such student to attend another school. The agency may use the funds to pay for the supplementary costs of such student to attend any other public or private elementary school or secondary school, including a religious school, in the same State as the school where the criminal offense occurred, that is selected by the student's parent. The State educational agency shall determine what actions constitute a violent criminal offense for purposes of this section.
`(b) SUPPLEMENTARY COSTS- The supplementary costs referred to in subsection (a) shall not exceed--
`(1) in the case of a student for whom funds under this section are used to enable the student to attend a public elementary school or secondary school served by a local educational agency that also serves the school where the violent criminal offense occurred, the costs of supplementary educational services and activities described in section 1114(b) or 1115(c) that are provided to the student;
`(2) in the case of a student for whom funds under this section are used to enable the student to attend a public elementary school or secondary school served by a local educational agency that does not serve the school where the violent criminal offense occurred but is located in the same State--
`(A) the costs of supplementary educational services and activities described in section 1114(b) or 1115(c) that are provided to the student; and
`(B) the reasonable costs of transportation for the student to attend the school selected by the student's parent; and
`(3) in the case of a student for whom funds under this section are used to enable the student to attend a private elementary school or secondary school, including a religious school, the costs of tuition, required fees, and the reasonable costs of such transportation.
`(c) CONSTRUCTION- Nothing in this Act or any other Federal law shall be construed to prevent a parent assisted under this section from selecting the public or private, including religious, elementary school or secondary school that a child of the parent will attend within the State.
`(d) CONSIDERATION OF ASSISTANCE- Subject to subsection (h), assistance made available under this section that is used to pay the costs for a student to attend a private or religious school shall not be considered to be Federal aid to the school, and the Federal Government shall have no authority to influence or regulate the operations of a private or religious school as a result of assistance received under this section.
`(e) CONTINUING ELIGIBILITY- A student assisted under this section shall remain eligible to continue receiving assistance under this section for at least 3 academic years without regard to whether the student is eligible for assistance under section 1114 or 1115(b).
`(f) TUITION CHARGES- Assistance under this section may not be used to pay tuition or required fees at a private elementary school or secondary school in an amount that is greater than the tuition and required fees paid by students not assisted under this section at such school.
`(g) SPECIAL RULE- Any school receiving assistance provided under this section shall comply with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) and not discriminate on the basis of race, color, or national origin.
`(h) ASSISTANCE; TAXES AND OTHER FEDERAL PROGRAMS-
`(1) ASSISTANCE TO FAMILIES, NOT SCHOOLS- Assistance provided under this section shall be considered to be aid to families, not schools. Use of such assistance at a school shall not be construed to be Federal financial aid or assistance to that school.
`(2) TAXES AND DETERMINATIONS OF ELIGIBILITY FOR OTHER FEDERAL PROGRAMS- Assistance provided under this section to a student shall not be considered to be income of the student or the parent of such student for Federal, State, or local tax purposes or for determining eligibility for any other Federal program.
`(i) PART B OF THE INDIVIDUALS WITH DISABILITIES EDUCATION ACT- Nothing in this section shall be construed to affect the requirements of part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.).
`(j) MAXIMUM AMOUNT- Notwithstanding any other provision of this section, the amount of assistance provided under this part for a student shall not exceed the per pupil expenditure for elementary or secondary education, as appropriate, by the local educational agency that serves the school where the criminal offense occurred for the fiscal year preceding the fiscal year for which the determination is made.'.
SEC. 1796. TRANSFER OF REVENUES.
(a) IN GENERAL- Notwithstanding any other provision of Federal law, a State, a State educational agency, or a local educational agency may transfer any non-Federal public funds associated with the education of a student who is a victim of a violent criminal offense while in or on the grounds of a public elementary school or secondary school served by a local educational agency to another local educational agency or to a private elementary school or secondary school, including a religious school.
(b) DEFINITIONS- For the purpose of subsection (a), the terms `elementary school', `secondary school', `local educational agency', and `State educational agency' have the meanings given such terms in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801).
SEC. 1797. INCREASED PENALTIES FOR DISTRIBUTING DRUGS TO MINORS.
Section 418 of the Controlled Substances Act (21 U.S.C. 859) is amended--
(1) in subsection (a), by strking `one year' and inserting `3 years'; and
(2) in subsection (b), by striking `one year' and inserting `5 years'.
SEC. 1798. INCREASED PENALTY FOR DRUG TRAFFICKING IN OR NEAR A SCHOOL OR OTHER PROTECTED LOCATION.
Section 419 of the Controlled Substances Act (21 U.S.C. 860) is amended--
(1) in subsection (a), by striking `one year' and inserting `3 years'; and
(2) in subsection (b), by striking `three years' each place that term appears and inserting `5 years'.
SEC. 1799. SEVERABILITY.
Any provision of this title held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, shall be construed as to give the maximum effect permitted by law, unless such provision is held to be utterly invalid or unenforceable, in which event such provision shall be severed from this title and shall not affect the applicability of the remainder of this title, or of such provision, to other persons not similarly situated or to other, dissimilar circumstances.
TITLE XVIII--PROTECTION FROM THE IMPACT OF BANKRUPTCY OF CERTAIN ELECTRIC UTILITIES
SEC. 1801. SHORT TITLE.
This title may be cited as the `Emergency Imported Electric Power Price Reduction Act of 2000'.
SEC. 1802. FINDINGS AND PURPOSES.
(a) FINDINGS- Congress finds that--
(1) the protection of the public health and welfare, the preservation of national security, and the regulation of interstate and foreign commerce require that electric power imported into the United States be priced fairly and competitively;
(2) the importation of electric power into the United States is a matter vested with the public interest that--
(A) involves an essential and extensively regulated infrastructure industry; and
(B) affects consumers, the cost of goods manufactured and services rendered, and the economic well-being and livelihood of individuals and society;
(3) it is essential that imported electric power be priced--
(A) in a manner that is competitive with domestic electric power and thereby contribute to robust and sound national and regional economies; and
(B) not at a rate that is so high as to result in the imminent bankruptcy of electric utilities in a State; and
(4) the purchase of imported electric power by the Vermont Joint Owners under the Firm Power and Energy Contract with Hydro-Quebec dated December 4, 1987--
(A) is not consistent with the findings stated in paragraphs (1), (2), and (3); and
(B) threatens the economic well-being of the States and regions in which the imported electric power is provided contrary to the public policy of the United States as set forth in the findings stated in paragraphs (1), (2), and (3).
(b) PURPOSES- The purposes of this title are--
(1) to facilitate the public policy of the United States as set forth in the findings stated in paragraphs (1), (2), and (3) of subsection (a);
(2) to remove a serious threat to the economic well-being of the States and regions in which imported electric power is provided under the contract referred to in section 1802(a)(4); and
(3) to facilitate revisions to the price elements of the contract referred to in section 1802(a)(4) by declaring and making unlawful, effective 180 days after the date of enactment of this Act, the contract as it exists on the date of enactment of this Act.
SEC. 1803. UNLAWFUL CONTRACT AND AMENDED CONTRACT.
(a) IN GENERAL- Effective on the date that is 180 days after the date of enactment of this Act, the contract referred to in section 1802(a)(4), as the contract exists on the date of enactment of this Act, shall be void.
(b) AMENDMENT OF CONTRACT- This title does not preclude the parties to the contract referred to in section 1802(a)(4) from amending the contract or entering into a new contract after the date of enactment of this Act in a manner that is consistent with the findings and purposes of this title.
SEC. 1804. EXCLUSIVE ENFORCEMENT.
(a) IN GENERAL- Only the Attorney General of a State in which electric power is provided under the contract referred to in section 1802(a)(4), as the contract may be amended after the date of enactment of this Act, may bring a civil action in United States district court for an order that--
(1) declares the amended contract not consistent with the findings and purposes of this title and is therefore void;
(2) enjoins performance of the amended contract; and
(3) relieves the electric utilities that are party to the amended contract of any liability under the contract.
(b) TIMING- A civil action under subsection (a) shall be brought not later than 1 year after the date of the amended contract or new contract.
TITLE XIX--CONSUMER CREDIT DISCLOSURE
SEC. 1901. ENHANCED DISCLOSURES UNDER AN OPEN END CREDIT PLAN.
(a) MINIMUM PAYMENT DISCLOSURES- Section 127(b) of the Truth in Lending Act (15 U.S.C. 1637(b)) is amended by adding at the end the following:
`(11)(A) In the case of an open end credit plan that requires a minimum monthly payment of not more than 4 percent of the balance on which finance charges are accruing, the following statement, located on the front of the billing statement, disclosed clearly and conspicuously, in typeface no smaller than the largest typeface used to make other clear and conspicuous disclosures required under this subsection: `Minimum Payment Warning: Making only the minimum payment will increase the interest you pay and the time it takes to repay your balance. For example, making only the typical 2% minimum monthly payment on a balance of $1,000 at an interest rate of 17% would take 88 months to repay the balance in full. For an estimate of the time it would take to repay your balance, making only minimum payments, call this toll-free number: XXXXXX.'.
`(B) In the case of an open end credit plan that requires a minimum monthly payment of more than 4 percent of the balance on which finance charges are accruing, the following statement, in a prominent location on the front of the billing statement, disclosed clearly and conspicuously, in typeface no smaller than the largest typeface used to make other clear and conspicuous disclosures required under this subsection: `Minimum Payment Warning: Making only the required minimum payment will increase the interest you pay and the time it takes to repay your balance. Making a typical 5% minimum monthly payment on a balance of $300 at an interest rate of 17% would take 24 months to repay the balance in full. For an estimate of the time it would take to repay your balance, making only minimum monthly payments, call this toll-free number: XXXXXX.'.
`(C) Notwithstanding subparagraphs (A) and (B), in the case of a creditor with respect to which compliance with this title is enforced by the Federal Trade Commission, the following statement, in a prominent location on the front of the billing statement, disclosed clearly and conspicuously, in typeface no smaller than the largest typeface used to make other clear and conspicuous disclosures under this subsection: `Minimum Payment Warning: Making only the required minimum payment will increase the interest you pay and the time it takes to repay your balance. For example, making only the typical 5% minimum monthly payment on a balance of $300 at an interest rate of 17% would take 24 months to repay the balance in full. For an estimate of the time it would take to repay your balance, making only minimum monthly payments, call the Federal Trade Commission at this toll-free number: XXXXXX.' A creditor who is subject to this subparagraph shall not be subject to subparagraph (A) or (B).
`(D) Notwithstanding subparagraph (A), (B), or (C), in complying with any such subparagraph, a creditor may substitute an example based on an interest rate that is greater than 17 percent. Any creditor who is subject to subparagraph (B) may elect to provide the disclosure required under subparagraph (A) in lieu of the disclosure required under subparagraph (B).
`(E) The Board shall, by rule, periodically recalculate, as necessary, the interest rate and repayment period under subparagraphs (A), (B), and (C).
`(F) The toll-free telephone number disclosed by a creditor or the Federal Trade Commission under subparagraph (A), (B), or (G), as appropriate, may be a toll-free telephone number established and maintained by the creditor or the Federal Trade Commission, as appropriate, or may be a toll-free telephone number established and maintained by a third party for use by the creditor or multiple creditors or the Federal Trade Commission, as appropriate. The toll-free telephone number may connect consumers to an automated device through which consumers may obtain information described in subparagraph (A), (B), or (C), by inputting information using a touch-tone telephone or similar device, if consumers whose telephones are not equipped to use such automated device are provided the opportunity to be connected to an individual from whom the information described in subparagraph (A), (B), or (C), as applicable, may be obtained. A person that receives a request for information described in subparagraph (A), (B), or (C) from an obligor through the toll-free telephone number disclosed under subparagraph (A), (B), or (C), as applicable, shall disclose in response to such request only the information set forth in the table promulgated by the Board under subparagraph (H)(i).
`(G) The Federal Trade Commission shall establish and maintain a toll-free number for the purpose of providing to consumers the information required to be disclosed under subparagraph (C).
`(i) establish a detailed table illustrating the approximate number of months that it would take to repay an outstanding balance if the consumer pays only the required minimum monthly payments and if no other advances are made, which table shall clearly present standardized information to be used to disclose the information required to be disclosed under subparagraph (A), (B), or (C), as applicable;
`(ii) establish the table required under clause (i) by assuming--
`(I) a significant number of different annual percentage rates;
`(II) a significant number of different account balances;
`(III) a significant number of different minimum payment amounts; and
`(IV) that only minimum monthly payments are made and no additional extensions of credit are obtained; and
`(iii) promulgate regulations that provide instructional guidance regarding the manner in which the information contained in the table established under clause (i) should be used in responding to the request of an obligor for any information required to be disclosed under subparagraph (A), (B), or (C).
`(I) The disclosure requirements of this paragraph do not apply to any charge card account, the primary purpose of which is to require payment of charges in full each month.
`(J) A creditor that maintains a toll-free telephone number for the purpose of providing customers with the actual number of months that it will take to repay the consumer's outstanding balance is not subject to the requirements of subparagraphs (A) and (B).'.
(b) REGULATORY IMPLEMENTATION- The Board of Governors of the Federal Reserve System (hereafter in this Act referred to as the `Board') shall promulgate regulations implementing the requirements of section 127(b)(11) of the Truth in Lending Act, as added by subsection (a) of this section. Section 127(b)(11) of the Truth in Lending Act, as added by subsection (a) of this section, and the regulations issued under this subsection shall not take effect until the later of 18 months after the date of enactment of this Act or 12 months after the publication of such regulations by the Board.
(c) STUDY OF FINANCIAL DISCLOSURES-
(1) IN GENERAL- The Board may conduct a study to determine whether consumers have adequate information about borrowing activities that may result in financial problems.
(2) FACTORS FOR CONSIDERATION- In conducting a study under paragraph (1), the Board should, in consultation with the other Federal banking agencies (as defined in section 3 of the Federal Deposit Insurance Act), the National Credit Union Administration, and the Federal Trade Commission, consider the extent to which--
(A) consumers, in establishing new credit arrangements, are aware of their existing payment obligations, the need to consider those obligations in deciding to take on new credit, and how taking on excessive credit can result in financial difficulty;
(B) minimum periodic payment features offered in connection with open end credit plans impact consumer default rates;
(C) consumers make only the minimum payment under open end credit plans;
(D) consumers are aware that making only minimum payments will increase the cost and repayment period of an open end credit obligation; and
(E) the availability of low minimum payment options is a cause of consumers experiencing financial difficulty.
(3) REPORT TO CONGRESS- Findings of the Board in connection with any study conducted under this subsection shall be submitted to Congress. Such report shall also include recommendations for legislative initiatives, if any, of the Board, based on its findings.
SEC. 1902. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED BY A DWELLING.
(a) OPEN END CREDIT EXTENSIONS-
(1) CREDIT APPLICATIONS- Section 127A(a)(13) of the Truth in Lending Act (15 U.S.C. 1637a(a)(13)) is amended--
(A) by striking `CONSULTATION OF TAX ADVISOR- A statement that the' and inserting the following: `TAX DEDUCTIBILITY- A statement that--
(B) by striking the period at the end and inserting the following: `; and
`(B) in any case in which the extension of credit exceeds the fair market value (as defined under the Federal Internal Revenue Code) of the dwelling, the interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes.'.
(2) CREDIT ADVERTISEMENTS- Section 147(b) of the Truth in Lending Act (15 U.S.C. 1665b(b)) is amended--
(A) by striking `If any' and inserting the following:
`(1) IN GENERAL- If any'; and
(B) by adding at the end the following:
`(2) CREDIT IN EXCESS OF FAIR MARKET VALUE- Each advertisement described in subsection (a) that relates to an extension of credit that may exceed the fair market value of the dwelling, and which advertisement is disseminated in paper form to the public or through the Internet, as opposed to by radio or television, shall include a clear and conspicuous statement that--
`(A) the interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and
`(B) the consumer should consult a tax advisor for further information regarding the deductibility of interest and charges.'.
(b) NON-OPEN END CREDIT EXTENSIONS-
(1) CREDIT APPLICATIONS- Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is amended--
(A) in subsection (a), by adding at the end the following:
`(15) In the case of a consumer credit transaction that is secured by the principal dwelling of the consumer, in which the extension of credit may exceed the fair market value of the dwelling, a clear and conspicuous statement that--
`(A) the interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and
`(B) the consumer should consult a tax advisor for further information regarding the deductibility of interest and charges.'; and
(B) in subsection (b), by adding at the end the following:
`(3) In the case of a credit transaction described in paragraph (15) of subsection (a), disclosures required by that paragraph shall be made to the consumer at the time of application for such extension of credit.'.
(2) CREDIT ADVERTISEMENTS- Section 144 of the Truth in Lending Act (15 U.S.C. 1664) is amended by adding at the end the following:
`(e) Each advertisement to which this section applies that relates to a consumer credit transaction that is secured by the principal dwelling of a consumer in which the extension of credit may exceed the fair market value of the dwelling, and which advertisement is disseminated in paper form to the public or through the Internet, as opposed to by radio or television, shall clearly and conspicuously state that--
`(1) the interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and
`(2) the consumer should consult a tax advisor for further information regarding the deductibility of interest and charges.'.
(c) REGULATORY IMPLEMENTATION- The Board of Governors of the Federal Reserve System (hereafter in this title referred to as the `Board') shall promulgate regulations implementing the requirements of subsections (a) and (b) of this section. Such regulations shall not take effect until the later of 12 months after the date of enactment of this Act or 12 months after the publication of such regulations by the Board.
SEC. 1903. DISCLOSURES RELATED TO `INTRODUCTORY RATES'.
(a) INTRODUCTORY RATE DISCLOSURES- Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding at the end the following:
`(6) ADDITIONAL NOTICE CONCERNING `INTRODUCTORY RATES'-
`(A) IN GENERAL- Except as provided in subparagraph (B), an application or solicitation to open a credit card account and all promotional materials accompanying such application or solicitation, for which a disclosure is required under paragraph (1), and that offers a temporary annual percentage rate of interest, shall--
`(i) use the term `introductory' in immediate proximity to each listing of the temporary annual percentage rate applicable to such account, which term shall appear clearly and conspicuously;
`(ii) if the annual percentage rate of interest that will apply after the end of the temporary rate period will be a fixed rate, state the following in a clear and conspicuous manner in a prominent location closely proximate to the first listing of the temporary annual percentage rate (other than a listing of the temporary annual percentage rate in the tabular format described in section 122(c)) or, if the first listing is not the most prominent listing, then closely proximate to the most prominent listing of the temporary annual percentage rate, in each document and in no smaller type size than the smaller of the type size in which the proximate temporary annual percentage rate appears or a 12-point type size, the time period in which the introductory period will end and the annual percentage rate that will apply after the end of the introductory period; and
`(iii) if the annual percentage rate that will apply after the end of the temporary rate period will vary in accordance with an index, state the following in a clear and conspicuous manner in a prominent location closely proximate to the first listing of the temporary annual percentage rate (other than a listing in the tabular format prescribed by section 122(c)) or, if the first listing is not the most prominent listing, then closely proximate to the most prominent listing of the temporary annual percentage rate, in each document and in no smaller type size than the smaller of the type size in which the proximate temporary annual percentage rate appears or a 12-point type size, the time period in which the introductory period will end and the rate that will apply after that, based on an annual percentage rate that was in effect within 60 days before the date of mailing the application or solicitation.
`(B) EXCEPTION- Clauses (ii) and (iii) of subparagraph (A) do not apply with respect to any listing of a temporary annual percentage rate on an envelope or other enclosure in which an application or solicitation to open a credit card account is mailed.
`(C) CONDITIONS FOR INTRODUCTORY RATES- An application or solicitation to open a credit card account for which a disclosure is required under paragraph (1), and that offers a temporary annual percentage rate of interest shall, if that rate of interest is revocable under any circumstance or upon any event, clearly and conspicuously disclose, in a prominent manner on or with such application or solicitation--
`(i) a general description of the circumstances that may result in the revocation of the temporary annual percentage rate; and
`(ii) if the annual percentage rate that will apply upon the revocation of the temporary annual percentage rate--
`(I) will be a fixed rate, the annual percentage rate that will apply upon the revocation of the temporary annual percentage rate; or
`(II) will vary in accordance with an index, the rate that will apply after the temporary rate, based on an annual percentage rate that was in effect within 60 days before the date of mailing the application or solicitation.
`(D) DEFINITIONS- In this paragraph--
`(i) the terms `temporary annual percentage rate of interest' and `temporary annual percentage rate' mean any rate of interest applicable to a credit card account for an introductory period of less than 1 year, if that rate is less than an annual percentage rate that was in effect within 60 days before the date of mailing the application or solicitation; and
`(ii) the term `introductory period' means the maximum time period for which the temporary annual percentage rate may be applicable.
`(E) RELATION TO OTHER DISCLOSURE REQUIREMENTS- Nothing in this paragraph may be construed to supersede subsection (a) of section 122, or any disclosure required by paragraph (1) or any other provision of this subsection.'.
(b) REGULATORY IMPLEMENTATION- The Board of Governors of the Federal Reserve System (hereafter in this title referred to as the (`Board') shall promulgate regulations implementing the requirements of section 127 of the Truth in Lending Act, as amended by subsection (a) of this section. Any provision set forth in subsection (a) and such regulations shall not take effect until the later of 12 months after the date of enactment of this Act or 12 months after the publication of such regulations by the Board.
SEC. 1904. INTERNET-BASED CREDIT CARD SOLICITATIONS.
(a) INTERNET-BASED APPLICATIONS AND SOLICITATIONS- Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is amended by adding at the end the following:
`(7) INTERNET-BASED APPLICATIONS AND SOLICITATIONS-
`(A) IN GENERAL- In any solicitation to open a credit card account for any person under an open end consumer credit plan using the Internet or other interactive computer service, the person making the solicitation shall clearly and conspicuously disclose--
`(i) the information described in subparagraphs (A) and (B) of paragraph (1); and
`(ii) the disclosures described in paragraph (6).
`(B) FORM OF DISCLOSURE- The disclosures required by subparagraph (A) shall be--
`(i) readily accessible to consumers in close proximity to the solicitation to open a credit card account; and
`(ii) updated regularly to reflect the current policies, terms, and fee amounts applicable to the credit card account.
`(C) DEFINITIONS- For purposes of this paragraph--
`(i) the term `Internet' means the international computer network of both Federal and non-Federal interoperable packet switched data networks; and
`(ii) the term `interactive computer service' means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions.'.
(b) REGULATORY IMPLEMENTATION- The Board of Governors of the Federal Reserve System (hereafter in this title referred to as the (`Board') shall promulgate regulations implementing the requirements of section 127 of the Truth in Lending Act, as amended by subsection (a) of this section. Any provision set forth in subsection (a) and such regulations shall not take effect until the later of 12 months after the date of enactment of this Act or 12 months after the publication of such regulations by the Board.
SEC. 1905. DISCLOSURES RELATED TO LATE PAYMENT DEADLINES AND PENALTIES.
(a) DISCLOSURES RELATED TO LATE PAYMENT DEADLINES AND PENALTIES- Section 127(b) of the Truth in Lending Act (15 U.S.C. 1637(b)) is amended by adding at the end the following:
`(12) If a late payment fee is to be imposed due to the failure of the obligor to make payment on or before a required payment due date the following shall be stated clearly and conspicuously on the billing statement:
`(A) The date on which that payment is due or, if different, the earliest date on which a late payment fee may be charged.
`(B) The amount of the late payment fee to be imposed if payment is made after such date.'.
(b) REGULATORY IMPLEMENTATION- The Board of Governors of the Federal Reserve System (hereafter in this title referred to as the (`Board') shall promulgate regulations implementing the requirements of section 127 of the Truth in Lending Act, as amended by subsection (a) of this section. Any provision set forth in subsection (a) and such regulations shall not take effect until the later of 12 months after the date of enactment of this Act or 12 months after the publication of such regulations by the Board.
SEC. 1906. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO INCUR FINANCE CHARGES.
(a) PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO INCUR FINANCE CHARGES- Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following:
`(h) PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO INCUR FINANCE CHARGES- A creditor of an account under an open end consumer credit plan may not terminate an account prior to its expiration date solely because the consumer has not incurred finance charges on the account. Nothing in this subsection shall prohibit a creditor from terminating an account for inactivity in 3 or more consecutive months.'.
(b) REGULATORY IMPLEMENTATION- The Board of Governors of the Federal Reserve System (hereafter in this title referred to as the (`Board') shall promulgate regulations implementing the requirements of section 127 of the Truth in Lending Act, as amended by subsection (a) of this section. Any provision set forth in subsection (a) and such regulations shall not take effect until the later of 12 months after the date of enactment of this Act or 12 months after the publication of such regulations by the Board.
SEC. 1907. DUAL USE DEBIT CARD.
(a) REPORT- The Board may conduct a study of, and present to Congress a report containing its analysis of, consumer protections under existing law to limit the liability of consumers for unauthorized use of a debit card or similar access device. Such report, if submitted, shall include recommendations for legislative initiatives, if any, of the Board, based on its findings.
(b) CONSIDERATIONS- In preparing a report under subsection (a), the Board may include--
(1) the extent to which section 909 of the Electronic Fund Transfer Act (15 U.S.C. 1693g), as in effect at the time of the report, and the implementing regulations promulgated by the Board to carry out that section provide adequate unauthorized use liability protection for consumers;
(2) the extent to which any voluntary industry rules have enhanced or may enhance the level of protection afforded consumers in connection with such unauthorized use liability; and
(3) whether amendments to the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.), or revisions to regulations promulgated by the Board to carry out that Act, are necessary to further address adequate protection for consumers concerning unauthorized use liability.
SEC. 1908. STUDY OF BANKRUPTCY IMPACT OF CREDIT EXTENDED TO DEPENDENT STUDENTS.
(1) IN GENERAL- The Comptroller General of the United States shall conduct a study regarding the impact that the extension of credit described in paragraph (2) has on the rate of bankruptcy cases filed under title 11, United States Code.
(2) EXTENSION OF CREDIT- The extension of credit referred to in paragraph (1) is the extension of credit to individuals who are--
(A) claimed as dependents for purposes of the Internal Revenue Code of 1986; and
(B) enrolled in postsecondary educational institutions.
(b) REPORT- Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Senate and the House of Representatives a report summarizing the results of the study conducted under subsection (a).
Attest:
Secretary.
106th CONGRESS
2d Session
H. R. 833
AMENDMENT
END
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