HOUSE REPORT 109-31 - Pages 1-10

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

CONTENTS	PAGE
Purpose and Summary	2
Background and Need for the Legislation	3
Factors Supporting Bankruptcy Reform	3
Prior Congressional Consideration of Bankruptcy Reform	6
Highlights of Bankruptcy Reforms	10
Consumer Creditor Bankruptcy Protections	10
Needs-Based Reforms	10
Other Reforms Dealing with Abuse	15
Protections for Creditors—In General	16
Enforcement of Family Support Obligations	16
Protections for Secured Creditors	17
Protections for Lessors	17
Consumer Debtor Bankruptcy Protections	17
Highlights of Business Bankruptcy Reforms	18
Protections Against Excessive Payments To a Debtor's Insiders and Fraud by a Debtor's Management	19
Protections for Employees	19
Small Business/Single Asset Real Estate Debtors	19
Financial Contracts	20
Family Farmers and Family Fishermen	20
Transnational Insolvencies	20
Protections for Small Business Owners	21
Health Care Providers	21
Other Provisions Having General Impact	21
Privacy Protections	21
Additional Bankruptcy Judgeships	21
Miscellaneous Provisions	22
Hearings	22
Committee Consideration	22
Votes of the Committee	22
1. Conyers — pay day loans made to servicemembers	22
2. Watt and Delahunt — disallowing certain claims	23
3. Watt — postsecondary education expenses	24
4. Nadler — extension of time to assume or reject nonresidential real property	25
5. Schiff — no 707(b)(2) dismissal for identity theft victims	26
6. Delahunt — avoidance of transfers made within 10 years of the bankruptcy filing to an asset protection trust (BC § 548)	27
7. Berman & Meehan — exemption for medically distressed debtors (BC § 522)	27
8. Nadler — nondischarge of debts related to civil rights violations (BC § 523(a) (resubmitted)	28
9. Meehan — no 707(b)(2) dismissal for certain disabled veterans	29
10. Jackson Lee — increase expense allowance for private schools	30
11. Jackson Lee — en bloc amendments - debts related to (1) sex offenses against minors; (2) tobacco claims (BC 523(a)	31
12. Motion to report S. 256 favorably	32
Committee Oversight Findings	33
New Budget Authority and Tax Expenditures	33
Congressional Budget Office Cost Estimate	33
Summary	34
Major Provisions	34
Estimated Cost to the Federal Government	35
Basis of Estimate	36
Spending Subject to Appropriation	37
Means-Testing (Section 102)	37
Studies by the U.S. Trustees, Government Accountability Office (GAO), and Small Business Administration (SBA) (Sections 103, 205, 230, and 443)	37
Debtor Financial Management Test Training Program (Section 105)	38
Credit Counseling Certification (Section 106)	38
Maintenance of Tax Returns (Section 315)	38
Changes in Bankruptcy Filing Fees (Sections 325 and 418)	38
Current Law Filing Fees	38
Distribution of Filing Fees	39
Fee Waivers	39
U.S. Trustee Site Visits in Chapter 11 Cases (Section 439)	39
Compilation and Publication of Bankruptcy Data and Statistics (Sections 601-602)	39
Audit Procedures (Section 603)	40
Additional Judgeships—Support Costs (Section 1223)	40
Federal Trade Commission Toll-Free Hotline (Section 1301)	40
Direct Spending and Revenues	40
Additional Judgeships (Section 1223)	41
Changes in Bankruptcy Filing Fees (Sections 102, 325, and 418))	41
Tax Provisions (Title VII)	42
Estimated Impact on State, Local, and Tribal Governments	42
Mandates	42
Other Impacts	42
Domestic Support Obligations	42
Exemptions	43
Time Limits on Tax Collection	43
Taxes and Administrative Expenses	43
Tax Return Filing	43
Priority of Payments	44
Municipal Bankruptcy	44
Fuel Tax Claims	44
Single Asset Cases	44
Estimated Impact on the Private Sector	44
Mandates	44
Requirements For Attorneys	45
Notice and Disclosure Requirements	45
Prohibition on Consumer Reporting Agencies	46
Requirement for Closing Credit Accounts	46
Other Impacts on the Private Sector	46
Previous CBO Estimate	46
Estimate Prepared By	47
Estimate Approved By	47
Performance Goals and Objectives	47
Constitutional Authority Statement	47
Section-by-Section Analysis and Discussion	47
101. Conversion	47
102. Dismissal or Conversion	48
103. Sense of Congress and Study	53
104. Notice of Alternatives	53
105. Debtor Financial Management Training Test Program	54
106. Credit Counseling	54
107. Schedules of Reasonable and Necessary Expenses	56
201. Promotion of Alternative Dispute Resolution	57
202. Effect of Discharge	57
203. Discouraging Abuse of Reaffirmation Agreement Practices	57
204. Preservation of Claims and Defenses Upon Sale of Predatory Loans	58
205. GAO Study and Report on Reaffirmation Agreement Process	59
211. Definition of Domestic Support Obligation	59
212. Priorities for Claims for Domestic Support Obligations	59
213. Requirements To Obtain Confirmation and Discharge in Cases Involving Domestic Support Obligations	60
214. Exceptions To Automatic Stay in Domestic Support Proceedings	61
215. Nondischargeability of Certain Debts for Alimony, Maintenance, and Support	61
216. Continued Liability of Property	61
217. Protection of Domestic Support Claims Against Preferential Transfer Motions	62
218. Disposable Income Defined	62
219. Collection of Child Support	62
220. Nondischargeability of Certain Educational Benefits and Loans	62
221. Amendments To Discourage Abusive Bankruptcy Filings	62
222. Sense of Congress	63
223. Additional Amendments to Title 11, United States Code	63
224. Protection of Retirement Savings in Bankruptcy	63
225. Protection of Education Savings in Bankruptcy	65
226. Definitions.	65
227. Restrictions on Debt Relief Agencies	66
229. Requirements for Debt Relief Agencies	66
230. GAO Study	67
231. Protection of Personally Identifiable Information	67
232. Consumer Privacy Ombudsman	68
233. Prohibition on Disclosure of Name of Minor Children	68
234. Protection of Personal Information	68
301. Technical Amendments	69
302. Discouraging Bad Faith Repeat Filings	69
303. Curbing Abusive Filings	70
304. Debtor Retention of Personal Property Security	70
305. Relief from the Automatic Stay When the Debtor Does Not Complete Intended Surrender of Consumer Debt Collateral	71
306. Giving Secured Creditors Fair Treatment in Chapter 13.Subsection	71
307. Domiciliary Requirements for Exemptions	72
308. Reduction of Homestead Exemption for Fraud	72
309. Protecting Secured Creditors in Chapter 13 Cases	73
310. Limitation on Luxury Goods.	74
311. Automatic Stay	74
312. Extension of Period Between Bankruptcy Discharges	76
313. Definition of Household Goods and Antiques	76
314. Debt Incurred To Pay Nondischargeable Debts	76
315. Giving Creditors Fair Notice in Chapters 7 and 13 Cases	77
316. Dismissal for Failure To Timely File Schedules or Provide Required Information	79
317.Adequate Time To Prepare for Hearing on Confirmation of the Plan	79
318. Chapter 13 Plans To Have a 5-Year Duration in Certain Cases	79
319. Sense of Congress Regarding Expansion of Rule 9011 of the Federal Rules of Bankruptcy Procedure	80
320. Prompt Relief from Stay in Individual Cases	80
321. Chapter 11 Cases Filed by Individuals	80
322. Limitations on Homestead Exemption	81
323. Excluding Employee Benefit Plan Participant Contributions and Other Property from the Estate	82
324. Exclusive Jurisdiction in Matters Involving Bankruptcy Professionals	82
325. United States Trustee Program Filing Fee Increase	82
326. Sharing of Compensation	83
327. Fair Valuation of Collateral	83
328. Defaults Based on Nonmonetary Obligations	83
329. Clarification of Postpetition Wages and Benefits	84
330. Delay of Discharge During Pendency of Certain Proceedings	84
331. Limitation on Retention Bonuses, Severance Pay, and Certain Other Payments	84
332. Fraudulent Involuntary Bankruptcy	84
401. Adequate Protection for Investors	86
402. Meetings of Creditors and Equity Security Holders	86
403. Protection of Refinance of Security Interest	86
404. Executory Contracts and Unexpired Leases	86
405. Creditors and Equity Security Holders Committees	87
406. Amendment to Section 546 of Title 11, United States Code	87
407. Amendments to Section 330(a) of Title 11, United States Code	87
408. Postpetition Disclosure and Solicitation	87
409. Preferences.	88
410. Venue of Certain Proceedings	88
411. Period for Filing Plan under Chapter 11	88
412. Fees Arising from Certain Ownership Interests	88
413. Creditor Representation at First Meeting of Creditors	88
414. Definition of Disinterested Person	89
415. Factors for Compensation of Professional Persons	89
416. Appointment of Elected Trustee	89
417. Utility Service. Section	89
418. Bankruptcy Fees	89
419. More Complete Information Regarding Assets of the Estate	90
431. Flexible Rules for Disclosure Statement and Plan	90
432. Definitions	90
433. Standard Form Disclosure Statement and Plan	91
434.Uniform National Reporting Requirements	91
435.Uniform Reporting Rules and Forms for Small Business Cases	91
436. Duties in Small Business Cases	91
437. Plan Filing and Confirmation Deadlines	92
438. Plan Confirmation Deadline	92
439. Duties of the United States Trustee	92
440. Scheduling Conferences	93
441. Serial Filer Provisions	93
442. Expanded Grounds for Dismissal or Conversion and Appointment of Trustee	94
443. Study of Operation of Title 11, United States Code, with Respect to Small Businesses	95
444. Payment of Interest	95
445. Priority for Administrative Expenses	96
446. Duties with Respect to a Debtor Who Is a Plan Administrator of an Employee Benefit Plan	96
447. Appointment of Committee of Retired Employees	96
501. Petition and Proceedings Related to Petition	96
502. Applicability of Other Sections to Chapter 9	96
601. Improved Bankruptcy Statistics	97
602. Uniform Rules for the Collection of Bankruptcy Data	98
603. Audit Procedures	98
604. Sense of Congress Regarding Availability of Bankruptcy Data	99
701. Treatment of Certain Tax Liens	100
702. Treatment of Fuel Tax Claims	100
703.Notice of Request for a Determination of Taxes	100
704. Rate of Interest on Tax Claims	101
705. Priority of Tax Claims	101
706. Priority Property Taxes Incurred	101
707. No Discharge of Fraudulent Taxes in Chapter 13	101
708. No Discharge of Fraudulent Taxes in Chapter 11	102
709. Stay of Tax Proceedings Limited to Prepetition Taxes	102
710. Periodic Payment of Taxes in Chapter 11 Cases	102
711. Avoidance of Statutory Liens Prohibited	102
712. Payment of Taxes in the Conduct of Business	102
713. Tardily Filed Priority Tax Claims	103
714. Income Tax Returns Prepared by Tax Authorities	103
715. Discharge of the Estate's Liability for Unpaid Taxes	103
716. Requirement to File Tax Returns to Confirm Chapter 13 Plans	104
717. Standards for Tax Disclosure	104
718. Setoff of Tax Refunds	104
719. Special Provisions Related to the Treatment of State and Local Taxes	105
720. Dismissal for Failure to Timely File Tax Returns	105
801. Amendment to add chapter 15 to title 11, United States Code	105
1501. Purpose and scope of application	106
1502. Definitions	107
1503. International obligations of the United States	107
1504. Commencement of ancillary case	107
1505. Authorization to act in a foreign country	109
1506. Public policy exception	109
1507. Additional assistance	109
1508. Interpretation	109
1509. Right of direct access	110
1510. Limited jurisdiction	111
1511. Commencement of Case Under Section 301 or 303	111