|
|
TITLE
IV — GENERAL AND SMALL BUSINESS BANKRUPTCY PROVISIONS
Subtitle A — General
Business Bankruptcy Provisions
SEC. 401. ADEQUATE PROTECTION
FOR INVESTORS.
(a) DEFINITION.—Section
101 of title
11, United States Code, is amended by inserting after paragraph (48)
the following:
"(48A)
'securities self regulatory organization' means either a securities
association registered with the Securities and Exchange Commission
under section 15A of the Securities Exchange Act of 1934 or a national
securities exchange registered with the Securities and Exchange
Commission under section 6 of the Securities Exchange Act of 1934;".
(b) AUTOMATIC STAY.—Section
362(b)
of title 11, United States Code, as amended by sections
224,
303, and 311, is amended by inserting
after paragraph
(24)
the following:
"(25)
under subsection (a), of—
"(A)
the commencement or continuation of an investigation or action
by a securities self regulatory organization to enforce such
organization's regulatory power;
"(B)
the enforcement of an order or decision, other than for monetary
sanctions, obtained in an action by such securities self
regulatory organization to enforce such organization's regulatory
power; or
"(C)
any act taken by such securities self regulatory organization
to delist, delete, or refuse to permit quotation of any stock
that does not meet applicable regulatory requirements;".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 402. MEETINGS OF CREDITORS
AND EQUITY SECURITY HOLDERS.
Section 341
of title 11, United States Code, is amended by adding at the end the
following:
"(e) Notwithstanding
subsections (a) and (b), the court, on the request of a party in interest
and after notice and a hearing, for cause may order that the United
States trustee not convene a meeting of creditors or equity security
holders if the debtor has filed a plan as to which the debtor solicited
acceptances prior to the commencement of the case.".
|
|
|
SEC. 403. PROTECTION OF REFINANCE
OF SECURITY INTEREST.
Subparagraphs
(A),
(B),
and (C)
of section
547(e)(2)
of title 11, United States Code, are each amended by striking "10"
each place it appears and inserting "30".
|
|
|
SEC. 404. EXECUTORY CONTRACTS
AND UNEXPIRED LEASES.
(a) IN GENERAL.—Section
365(d)(4)
of title 11, United States Code, is amended to read as follows:
"(4)(A)
Subject to subparagraph (B), an unexpired lease of nonresidential
real property under which the debtor is the lessee shall be deemed
rejected, and the trustee shall immediately surrender that nonresidential
real property to the lessor, if the trustee does not assume or reject
the unexpired lease by the earlier of—
"(B)(i)
The court may extend the period determined under subparagraph (A),
prior to the expiration of the 120-day period, for 90 days on the motion
of the trustee or lessor for cause.
"(ii)
If the court grants an extension under clause (i), the court may
grant a subsequent extension only upon prior written consent of the
lessor in each instance.".
(b) EXCEPTION.—Section 365(f)(1) of title 11, United States
Code, is amended by striking "subsection" the first place it appears
and inserting "subsections (b) and".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 405. CREDITORS AND EQUITY
SECURITY HOLDERS COMMITTEES.
(a) APPOINTMENT.—Section
1102(a)
of title 11, United States Code, is amended by adding at the end the
following:
"(4)
On request of a party in interest and after notice and a hearing,
the court may order the United States trustee to change the membership
of a committee appointed under this subsection, if the court determines
that the change is necessary to ensure adequate representation of
creditors or equity security holders. The court may order the
United States trustee to increase the number of members of a committee
to include a creditor that is a small business concern (as described
in section 3(a)(1) of the Small Business Act), if the court determines
that the creditor holds claims (of the kind represented by the committee)
the aggregate amount of which, in comparison to the annual gross revenue
of that creditor, is disproportionately large.".
(b) INFORMATION.—Section
1102(b)
of title 11, United States Code, is amended by adding at the end the
following:
"(3)
A committee appointed under subsection (a) shall—
"(A)
provide access to information for creditors who—
"(i) hold claims of the kind represented by that committee;
and
"(ii) are not appointed to the committee;
"(B)
solicit and receive comments from the creditors described in subparagraph
(A); and
"(C)
be subject to a court order that compels any addition al report
or disclosure to be made to the creditors described in subparagraph
(A).".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 406. AMENDMENT TO SECTION
546 OF TITLE 11, UNITED STATES CODE.
Section 546
of title 11, United States Code, is amended —
(1) by redesignating the second subsection (g) (as added
by section 222(a) of Public Law
103-394) as subsection
(h);
(2) in subsection
(h),
as so redesignated, by inserting "and subject to the prior rights
of holders of security interests in such goods or the proceeds
of such goods" after "consent of a creditor"; and
(3) by adding at the end the following:
"(i)(1)
Notwithstanding paragraphs (2) and (3) of section 545, the trustee may
not avoid a warehouseman's lien for storage, transportation, or other
costs incidental to the storage and handling of goods.
"(2)
The prohibition under paragraph (1) shall be applied in a manner consistent
with any State statute applicable to such lien that is similar to
section 7-209 of the Uniform Commercial Code, as in effect on the date
of enactment of the Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005, or any successor to such section 7-209.".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 407. AMENDMENTS TO SECTION
330(a) OF TITLE 11, UNITED STATES CODE.
Section 330(a)
of title 11, United States Code, is amended —
(A) by striking "(A) In" and inserting "In"; and
(B) by inserting "to an examiner, trustee under chapter
11, or professional person" after "awarded"; and
(2) by adding at the end the following:
"(7)
In determining the amount of reasonable compensation to be awarded to
a trustee, the court shall treat such compensation as a commission,
based on section 326.".
|
|
|
SEC. 408. POSTPETITION DISCLOSURE
AND SOLICITATION.
Section 1125
of title 11, United States Code, is amended by adding at the end the
following:
"(g)
Notwithstanding subsection (b), an acceptance or rejection of the plan
may be solicited from a holder of a claim or interest if such solicitation
complies with applicable nonbankruptcy law and if such holder was
solicited before the commencement of the case in a manner complying
with applicable nonbankruptcy law.".
|
|
|
SEC. 409. PREFERENCES.
Section 547(c)
of title 11, United States Code, is amended —
(1) by striking paragraph
(2)
and inserting the following:
"(2)
to the extent that such transfer was in payment of a debt incurred
by the debtor in the ordinary course of business or financial
affairs of the debtor and the transferee, and such transfer
was—
"(A)
made in the ordinary course of business or financial affairs
of the debtor and the transferee; or
"(B)
made according to ordinary business terms;";
(2) in paragraph
(8),
by striking the period at the end and inserting "; or"; and
(3) by adding at the end the following:
"(9)
if, in a case filed by a debtor whose debts are not primarily
consumer debts, the aggregate value of all property that constitutes
or is affected by such transfer is less than $5,000.".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 410. VENUE OF CERTAIN PROCEEDINGS.
Section
1409(b) of title
28,
United States Code, is amended by inserting ", or a debt (excluding
a consumer debt) against a noninsider of less than $10,000," after
"$5,000". Section 1409(b) of title 28, United States Code, is further
amended by striking "$5,000" and inserting "$15,000".
|
|
|
SEC. 411. PERIOD FOR FILING
PLAN UNDER CHAPTER 11.
Section
1121(d) of title 11, United States Code, is amended —
(1) by striking "On" and inserting "(1) Subject to paragraph
(2), on"; and
(2) by adding at the end the following:
"(2)(A)
The 120-day period specified in paragraph (1) may not be extended
beyond a date that is 18 months after the date of the order for relief
under this chapter.
"(B)
The 180-day period specified in paragraph (1) may not be extended
beyond a date that is 20 months after the date of the order for relief
under this chapter.".
|
|
|
SEC. 412. FEES ARISING FROM
CERTAIN OWNERSHIP INTERESTS.
Section
523(a)(16) of title 11, United States Code, is amended —
(1) by striking "dwelling" the first place it appears;
(2) by striking "ownership or" and inserting "ownership
,";
(3) by striking "housing" the first place it appears; and
(4) by striking "but only" and all that follows through "such
period," and inserting "or a lot in a homeowners association, for
as long as the debtor or the trustee has a legal, equitable, or
possessory ownership interest in such unit, such corporation,
or such lot,".
|
|
|
SEC. 413. CREDITOR REPRESENTATION
AT FIRST MEETING OF CREDITORS.
Section 341(c)
of title 11, United States Code, is amended by inserting at the end
the following: "Notwithstanding any local court rule, provision of
a State constitution, any otherwise applicable nonbankruptcy law,
or any other requirement that representation at the meeting of creditors
under subsection (a) be by an attorney, a creditor holding a consumer
debt or any representative of the creditor (which may include
an entity or an employee of an entity and may be a representative
for more than 1 creditor) shall be permitted to appear at and participate
in the meeting of creditors in a case under chapter 7 or 13, either
alone or in conjunction with an attorney for the creditor. Nothing in
this subsection shall be construed to require any creditor to be represented
by an attorney at any meeting of creditors.".
|
|
|
SEC. 414. DEFINITION OF DISINTERESTED
PERSON.
Section
101(14) of title 11, United States Code, is amended to read as
follows:
"(14)
'disinterested person' means a person that—
"(A)
is not a creditor, an equity security holder, or an insider;
"(B)
is not and was not, within 2 years before the date of the
filing of the petition, a director, officer, or employee
of the debtor; and
"(C)
does not have an interest materially adverse to the interest
of the estate or of any class of creditors or equity security
holders, by reason of any direct or indirect relationship
to, connection with, or interest in, the debtor, or for any
other reason;".
|
|
|
SEC. 415. FACTORS FOR COMPENSATION
OF PROFESSIONAL PERSONS.
Section 330(a)(3)
of title 11, United States Code, is amended —
(1) in subparagraph
(D),
by striking "and" at the end;
(2) by redesignating subparagraph (E) as subparagraph
(F);
and
(3) by inserting after subparagraph
(D)
the following:
"(E)
with respect to a professional person, whether the person is board
certified or otherwise has demonstrated skill and experience in
the bankruptcy field; and".
|
|
|
SEC. 416. APPOINTMENT OF ELECTED
TRUSTEE.
Section
1104(b) of title 11, United States Code, is amended —
(1) by inserting "(1)" after "(b)"; and
(2) by adding at the end the following:
"(2)(A)
If an eligible, disinterested trustee is elected at a meeting of creditors
under paragraph (1), the United States trustee shall file a report
certifying that election.
"(C)
The court shall resolve any dispute arising out of an election described
in subparagraph (A).".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 417. UTILITY SERVICE.
Section 366
of title 11, United States Code, is amended —
(1) in subsection
(a),
by striking "subsection (b)" and inserting "subsections (b) and
(c)"; and
(2) by adding at the end the following:
"(c)(1)(A)
For purposes of this subsection, the term "assurance of payment" means—
"(B)
For purposes of this subsection an administrative expense priority shall
not constitute an assurance of payment.
"(2)
Subject to paragraphs (3) and (4), with respect to a case filed under
chapter 11, a utility referred to in subsection (a) may alter, refuse,
or discontinue utility service, if during the 30-day period beginning
on the date of the filing of the petition, the utility does not receive
from the debtor or the trustee adequate assurance of payment for utility
service that is satisfactory to the utility.
"(3)(A)
On request of a party in interest and after notice and a hearing,
the court may order modification of the amount of an assurance of payment
under paragraph (2).
"(B)
In making a determination under this paragraph whether an assurance
of payment is adequate, the court may not consider—
"(4)
Notwithstanding any other provision of law, with respect to a case subject
to this subsection, a utility may recover or set off against a security
deposit provided to the utility by the debtor before the date of
the filing of the petition without notice or order of the court.".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 418. BANKRUPTCY FEES.
Section
1930
of title
28,
United States Code, is amended —
(1) in subsection
(a), by striking "Notwithstanding section 1915 of this title,
the" and inserting "The"; and
(2) by adding at the end the following:
"(f)(1)
Under the procedures prescribed by the Judicial Conference of the
United States, the district court or the bankruptcy court may waive
the filing fee in a case under chapter 7 of title 11 for an individual
if the court determines that such individual has income less than
150 percent of the income official poverty line (as defined by the
Office of Management and Budget, and revised annually in accordance
with section 673(2) of the Omnibus Budget Reconciliation Act of 1981)
applicable to a family of the size involved and is unable to pay
that fee in installments. For purposes of this paragraph, the term
"filing fee" means the filing fee required by subsection (a), or
any other fee prescribed by the Judicial Conference under subsections
(b) and (c) that is payable to the clerk upon the commencement of a
case under chapter 7.
"(2)
The district court or the bankruptcy court may waive for such debtors
other fees prescribed under subsections (b) and (c).
"(3)
This subsection does not restrict the district court or the bankruptcy
court from waiving, in accordance with Judicial Conference policy,
fees prescribed under this section for other debtors and creditors.".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 419. MORE COMPLETE INFORMATION
REGARDING ASSETS OF THE ESTATE.
(1) DISCLOSURE.—The Judicial Conference of the United
States, in accordance with section 2075 of title 28 of the United
States Code and after consideration of the views of the Director
of the Executive Office for United States Trustees, shall propose
amended Federal Rules of Bankruptcy Procedure and in accordance
with rule 9009 of the Federal Rules of Bankruptcy Procedure shall
prescribe official bankruptcy forms directing debtors under
chapter 11 of title 11 of United States Code, to disclose the
information described in paragraph (2) by filing and serving
periodic financial and other reports designed to provide such
information.
(2) INFORMATION.—The information referred to in paragraph
(1) is the value, operations, and profitability of any closely held
corporation, partnership, or of any other entity in which the
debtor holds a substantial or controlling interest.
(b) PURPOSE.—The purpose of the rules and reports under subsection
(a) shall be to assist parties in interest taking steps to ensure
that the debtor's interest in any entity referred to in subsection
(a)(2) is used for the payment of allowed claims against debtor.
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtitle B—Small
Business Bankruptcy Provisions
SEC. 431. FLEXIBLE RULES
FOR DISCLOSURE STATEMENT AND PLAN.
Section 1125
of title 11, United States Code, is amended —
(1) in subsection
(a)(1),
by inserting before the semicolon "and in determining whether a
disclosure statement provides adequate information, the court
shall consider the complexity of the case, the benefit of addition
al information to creditors and other parties in interest,
and the cost of providing addition al information"; and
(2) by striking subsection
(f),
and inserting the following:
"(f)
Notwithstanding subsection (b), in a small business case—
"(1)
the court may determine that the plan itself provides adequate
information and that a separate disclosure statement is not
necessary;
"(2)
the court may approve a disclosure statement submitted on standard
forms approved by the court or adopted under section 2075 of title
28; and
"(B)
acceptances and rejections of a plan may be solicited based on
a conditionally approved disclosure statement if the debtor provides
adequate information to each holder of a claim or interest
that is solicited, but a conditionally approved disclosure statement
shall be mailed not later than 25 days before the date of the hearing
on confirmation of the plan; and
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 432. DEFINITIONS.
(a) DEFINITIONS.—Section
101 of title
11, United States Code, is amended by striking paragraph
(51C)
and inserting the following:
"(51C)
'small business case' means a case filed under chapter 11 of
this title in which the debtor is a small business debtor;
"(51D)
'small business debtor'—
"(A)
subject to subparagraph (B), means a person engaged in commercial
or business activities (including any affiliate of such person
that is also a debtor under this title and excluding a person
whose primary activity is the business of owning or operating
real property or activities incidental thereto) that has aggregate
noncontingent liquidated secured and unsecured debts as of
the date of the petition or the date of the order for relief
in an amount not more than $2,000,000 (excluding debts owed
to 1 or more affiliates or insiders) for a case in which the
United States trustee has not appointed under section 1102(a)(1)
a committee of unsecured creditors or where the court has
determined that the committee of unsecured creditors is
not sufficiently active and representative to provide effective
oversight of the debtor; and
"(B)
does not include any member of a group of affiliated debtors
that has aggregate noncontingent liquidated secured and unsecured
debts in an amount greater than $2,000,000 (excluding debt owed
to 1 or more affiliates or insiders);".
(b) CONFORMING AMENDMENT.—Section
1102(a)(3)
of title 11, United States Code, is amended by inserting "debtor"
after "small business".
(c) ADJUSTMENT OF DOLLAR AMOUNTS.—Section
104(b) of title
11, United States Code, as amended by section
226, is amended by inserting "101(51D),"
after "101(3)," each place it appears.
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 433. STANDARD FORM DISCLOSURE
STATEMENT AND PLAN.
Within a reasonable period of time after the date of enactment of this
Act, the Judicial Conference of the United States shall prescribe
in accordance with rule 9009 of the Federal Rules of Bankruptcy Procedure
official standard form disclosure statements and plans of reorganization
for small business debtors (as defined in section 101 of title 11,
United States Code, as amended by this Act), designed to achieve a
practical balance between—
(1) the reasonable needs of the courts, the United States
trustee, creditors, and other parties in interest for reasonably
complete information; and
(2) economy and simplicity for debtors.
|
|
|
SEC. 434. UNIFORM NATIONAL REPORTING
REQUIREMENTS.
(1) IN GENERAL.—Chapter 3 of title 11, United States Code,
is amended by inserting after section
307
the following:
"Sec. 308.
Debtor reporting requirements
"(a) For
purposes of this section, the term "profitability" means, with respect
to a debtor, the amount of money that the debtor has earned or lost
during current and recent fiscal periods.
"(b) A
small business debtor shall file periodic financial and other reports
containing information including—
"(1)
the debtor's profitability;
"(2)
reasonable approximations of the debtor's projected cash receipts
and cash disbursements over a reasonable period;
"(3)
comparisons of actual cash receipts and disbursements with projections
in prior reports;
"(B)
if the debtor is not in compliance with the requirements referred
to in subparagraph (A)(i) or filing tax returns and other required
government filings and making the payments referred to in subparagraph
(A)(ii), what the failures are and how, at what cost, and when the
debtor intends to remedy such failures; and
(2) CLERICAL AMENDMENT.—The table of sections for chapter
3 of title 11, United States Code, is amended by inserting after
the item relating to section 307 the following:
"308.
Debtor reporting requirements.".
(b) EFFECTIVE DATE.—The amendments made by subsection (a) shall
take effect 60 days after the date on which rules are prescribed under
section 2075 of title 28, United States Code, to establish forms to
be used to comply with section 308 of title 11, United States Code,
as added by subsection (a).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 435. UNIFORM REPORTING
RULES AND FORMS FOR SMALL BUSINESS CASES.
(a) PROPOSAL OF RULES AND FORMS.—The Judicial Conference of
the United States shall propose in accordance with section 2073 of
title 28 of the United States Code amended Federal Rules of Bankruptcy
Procedure, and shall prescribe in accordance with rule 9009 of the
Federal Rules of Bankruptcy Procedure official bankruptcy forms, directing
small business debtors to file periodic financial and other reports
containing information, including information relating to—
(1) the debtor's profitability;
(2) the debtor's cash receipts and disbursements; and
(3) whether the debtor is timely filing tax returns and
paying taxes and other administrative expenses when due.
(b) PURPOSE.—The rules and forms proposed under subsection
(a) shall be designed to achieve a practical balance among—
(1) the reasonable needs of the bankruptcy court, the United
States trustee, creditors, and other parties in interest for
reasonably complete information;
(2) a small business debtor's interest that required
reports be easy and inexpensive to complete; and
(3) the interest of all parties that the required reports
help such debtor to understand such debtor's financial condition
and plan the such debtor's future.
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 436. DUTIES IN SMALL BUSINESS
CASES.
(a) DUTIES IN CHAPTER 11 CASES.—Subchapter I of chapter 11
of title 11, United States Code, as amended by section 321, is amended
by adding at the end the following:
"Sec. 1116.
Duties of trustee or debtor in possession in small business cases
"In a small business case, a trustee or the debtor in possession,
in addition to the duties provided in this title and as otherwise
required by law, shall—
"(1)
append to the voluntary petition or, in an involuntary case,
file not later than 7 days after the date of the order for relief—
"(A)
its most recent balance sheet, statement of operations, cash-flow
statement, and Federal income tax return; or
"(B)
a statement made under penalty of perjury that no balance
sheet, statement of operations, or cash-flow statement has
been prepared and no Federal tax return has been filed;
"(2)
attend, through its senior management personnel and counsel, meetings
scheduled by the court or the United States trustee, including
initial debtor interviews, scheduling conferences, and meetings
of creditors convened under section 341 unless the court, after
notice and a hearing, waives that requirement upon a finding
of extraordinary and compelling circumstances;
"(3)
timely file all schedules and statements of financial affairs,
unless the court, after notice and a hearing, grants an extension,
which shall not extend such time period to a date later than 30
days after the date of the order for relief, absent extraordinary
and compelling circumstances;
"(4)
file all postpetition financial and other reports required
by the Federal Rules of Bankruptcy Procedure or by local rule of
the district court;
"(5)
subject to section 363(c)(2), maintain insurance customary and appropriate
to the industry;
"(7)
allow the United States trustee, or a designated representative
of the United States trustee, to inspect the debtor's business
premises, books, and records at reasonable times, after reasonable
prior written notice, unless notice is waived by the debtor.".
(b) CLERICAL AMENDMENT.—The table of sections for chapter 11
of title 11, United States Code, as amended by section 321, is amended
by inserting after the item relating to section 1115 the following:
"1116.
Duties of trustee or debtor in possession in small business cases.".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 437. PLAN FILING AND CONFIRMATION
DEADLINES.
Section 1121
of title 11, United States Code, is amended by striking subsection
(e) and inserting the following:
"(e)
In a small business case—
"(1)
only the debtor may file a plan until after 180 days after the
date of the order for relief, unless that period is—
"(A)
extended as provided by this subsection, after notice and
a hearing; or
"(B)
the court, for cause, orders otherwise;
"(2)
the plan and a disclosure statement (if any) shall be filed not
later than 300 days after the date of the order for relief; and
"(3)
the time periods specified in paragraphs (1) and (2), and the
time fixed in section 1129(e) within which the plan shall be confirmed,
may be extended only if—
"(A)
the debtor, after providing notice to parties in interest
(including the United States trustee), demonstrates by a preponderance
of the evidence that it is more likely than not that the court
will confirm a plan within a reasonable period of time;
"(B)
a new deadline is imposed at the time the extension is granted;
and
"(C)
the order extending time is signed before the existing deadline
has expired.".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 438. PLAN CONFIRMATION
DEADLINE.
Section 1129
of title 11, United States Code, is amended by adding at the end the
following:
"(e)
In a small business case, the court shall confirm a plan that complies
with the applicable provisions of this title and that is filed in
accordance with section 1121(e) not later than 45 days after the
plan is filed unless the time for confirmation is extended in accordance
with section 1121(e)(3).".
|
|
|
SEC. 439. DUTIES OF THE UNITED
STATES TRUSTEE.
Section
586(a)
of title
28,
United States Code, is amended —
(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 addition al duties specified in title
11 pertaining to such cases; and";
(2) in paragraph
(5), by striking "and" at the end;
(3) in paragraph
(6), by striking the period at the end and inserting a semicolon;
and
(4) by adding at the end the following:
"(7)
in each of such small business cases—
"(A)
conduct an initial debtor interview as soon as practicable
after the date of the order for relief but before the first
meeting scheduled under section 341(a) of title 11, at which
time the United States trustee shall—
"(i)
begin to investigate the debtor's viability;
"(ii)
inquire about the debtor's business plan;
"(iii)
explain the debtor's obligations to file monthly operating
reports and other required reports;
"(iv)
attempt to develop an agreed scheduling order; and
"(v)
inform the debtor of other obligations;
"(B)
if determined to be appropriate and advisable, visit the
appropriate business premises of the debtor, ascertain
the state of the debtor's books and records, and verify that
the debtor has filed its tax returns; and
"(C)
review and monitor diligently the debtor's activities, to identify
as promptly as possible whether the debtor will be unable
to confirm a plan; and
"(8)
in any case in which the United States trustee finds material grounds
for any relief under section 1112 of title 11, the United States
trustee shall apply promptly after making that finding to the
court for relief.".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 440. SCHEDULING CONFERENCES.
Section 105(d)
of title 11, United States Code, is amended —
(1) in the matter preceding paragraph
(1),
by striking ", may"; and
(2) by striking paragraph
(1)
and inserting the following:
"(1)
shall hold such status conferences as are necessary to further the
expeditious and economical resolution of the case; and".
|
|
|
SEC. 441. SERIAL FILER PROVISIONS.
Section 362
of title 11, United States Code, as amended by sections
106,
305, and 311, is amended —
(1) in subsection
(k),
as so redesignated by section 305—
(A)
by striking "An" and inserting "(1) Except as provided in paragraph
(2), an"; and
(B)
by adding at the end the following:
"(2)
If such violation is based on an action taken by an entity in the
good faith belief that subsection (h) applies to the debtor, the recovery
under paragraph (1) of this subsection against such entity shall
be limited to actual damages."; and
(2) by adding at the end the following:
"(n)(1)
Except as provided in paragraph (2), subsection (a) does not apply
in a case in which the debtor—
"(D)
is an entity that has acquired substantially all of the assets
or business of a small business debtor described in subparagraph
(A), (B), or (C), unless such entity establishes by a preponderance
of the evidence that such entity acquired substantially all
of the assets or business of such small business debtor in good
faith and not for the purpose of evading this paragraph.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 442. EXPANDED GROUNDS FOR
DISMISSAL OR CONVERSION AND APPOINTMENT OF TRUSTEE.
(a) EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION.—Section
1112 of title
11, United States Code, is amended by striking subsection (b) and inserting
the following:
"(b)(1)
Except as provided in paragraph (2) of this subsection, subsection
(c) of this section, and section 1104(a)(3), on request of a party
in interest, and after notice and a hearing, absent unusual circumstances
specifically identified by the court that establish that the requested
conversion or dismissal is not in the best interests of creditors
and the estate, the court shall convert a case under this chapter
to a case under chapter 7 or dismiss a case under this chapter,
whichever is in the best interests of creditors and the estate, if
the movant establishes cause.
"(2)
The relief provided in paragraph (1) shall not be granted absent unusual
circumstances specifically identified by the court that establish
that such relief is not in the best interests of creditors and the
estate, if the debtor or another party in interest objects and establishes
that—
"(A)
there is a reasonable likelihood that a plan will be confirmed within
the timeframes established in sections 1121(e) and 1129(e) of this
title, or if such sections do not apply, within a reasonable period
of time; and
"(3)
The court shall commence the hearing on a motion under this subsection
not later than 30 days after filing of the motion, and shall decide
the motion not later than 15 days after commencement of such hearing,
unless the movant expressly consents to a continuance for a specific
period of time or compelling circumstances prevent the court from
meeting the time limits established by this paragraph.
"(4)
For purposes of this subsection, the term "cause" includes—
(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF TRUSTEE.—Section
1104(a)
of title 11, United States Code, is amended —
(1) in paragraph
(1),
by striking "or" at the end;
(2) in paragraph
(2),
by striking the period at the end and inserting "; or"; and
(3) by adding at the end the following:
"(3)
if grounds exist to convert or dismiss the case under section 1112,
but the court determines that the appointment of a trustee or an
examiner is in the best interests of creditors and the estate.".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 443. STUDY OF OPERATION
OF TITLE 11, UNITED STATES CODE, WITH RESPECT TO SMALL BUSINESSES.
Not later than 2 years after the date of enactment of this Act, the
Administrator of the Small Business Administration, in consultation
with the Attorney General, the Director of the Executive Office for
United States Trustees, and the Director of the Administrative Office
of the United States Courts, shall—
(1) conduct a study to determine—
(A) the internal and external factors that cause small
businesses, especially sole proprietorships, to become debtors
in cases under title 11, United States Code, and that cause
certain small businesses to successfully complete cases under
chapter 11 of such title; and
(B) how Federal laws relating to bankruptcy may be made
more effective and efficient in assisting small businesses
to remain viable; and
(2) submit to the President pro tempore of the Senate and
the Speaker of the House of Representatives a report summarizing
that study.
|
|
|
SEC. 444. PAYMENT OF INTEREST.
Section 362(d)(3)
of title 11, United States Code, is amended —
(1) by inserting "or 30 days after the court determines
that the debtor is subject to this paragraph, whichever is later"
after "90-day period)"; and
(2) by striking subparagraph
(B)
and inserting the following:
"(B)
the debtor has commenced monthly payments that—
"(i)
may, in the debtor's sole discretion, notwithstanding section
363(c)(2), be made from rents or other income generated
before, on, or after the date of the commencement of the
case by or from the property to each creditor whose claim
is secured by such real estate (other than a claim secured
by a judgment lien or by an unmatured statutory lien);
and
"(ii)
are in an amount equal to interest at the then applicable
nondefault contract rate of interest on the value of
the creditor's interest in the real estate; or".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 445. PRIORITY FOR ADMINISTRATIVE
EXPENSES.
Section 503(b)
of title 11, United States Code, is amended —
(1) in paragraph
(5),
by striking "and" at the end;
(2) in paragraph
(6),
by striking the period at the end and inserting a semicolon; and
(3) by adding at the end the following:
"(7)
with respect to a nonresidential real property lease previously
assumed under section 365, and subsequently rejected, a sum equal
to all monetary obligations due, excluding those arising from or
relating to a failure to operate or a penalty provision, for the
period of 2 years following the later of the rejection date or
the date of actual turnover of the premises, without reduction or
setoff for any reason whatsoever except for sums actually received
or to be received from an entity other than the debtor, and
the claim for remaining sums due for the balance of the term of
the lease shall be a claim under section 502(b)(6);".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 446. DUTIES WITH RESPECT
TO A DEBTOR WHO IS A PLAN ADMINISTRATOR OF AN EMPLOYEE BENEFIT PLAN.
(a) IN GENERAL.—Section
521(a)
of title 11, United States Code, as amended by sections
106 and
304, is amended —
(1) in paragraph
(5),
by striking "and" at the end;
(2) in paragraph
(6),
by striking the period at the end and inserting "; and"; and
(3) by adding after paragraph
(6)
the following:
"(7)
unless a trustee is serving in the case, continue to perform the
obligations required of the administrator (as defined in section
3 of the Employee Retirement Income Security Act of 1974) of
an employee benefit plan if at the time of the commencement of the
case the debtor (or any entity designated by the debtor) served
as such administrator.".
(b) DUTIES OF TRUSTEES.—Section
704(a)
of title 11, United States Code, as amended by sections
102 and
219, is amended —
(1) in paragraph
(10),
by striking "and" at the end; and
(2) by adding at the end the following:
"(11)
if, at the time of the commencement of the case, the debtor (or
any entity designated by the debtor) served as the administrator
(as defined in section 3 of the Employee Retirement Income Security
Act of 1974) of an employee benefit plan, continue to perform the
obligations required of the administrator; and".
(c) CONFORMING AMENDMENT.—Section
1106(a)(1)
of title 11, United States Code, is amended to read as follows:
"(1)
perform the duties of the trustee, as specified in paragraphs
(2), (5), (7), (8), (9), (10), and (11) of section 704;".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 447. APPOINTMENT OF COMMITTEE
OF RETIRED EMPLOYEES.
Section
1114(d) of title 11, United States Code, is amended —
(1) by striking "appoint" and inserting "order the appointment
of", and
(2) by adding at the end the following: "The United States
trustee shall appoint any such committee.".
|
|
|
TITLE V—MUNICIPAL
BANKRUPTCY PROVISIONS
SEC. 501. PETITION AND PROCEEDINGS
RELATED TO PETITION.
(a) TECHNICAL AMENDMENT RELATING TO MUNICIPALITIES.—Section 921(d)
of title 11, United States Code, is amended by inserting "notwithstanding
section 301(b)" before the period at the end.
(b) CONFORMING AMENDMENT.—Section
301 of title
11, United States Code, is amended —
(1) by inserting "(a)" before "A voluntary"; and
(2) by striking the last sentence and inserting the following:
"(b) The
commencement of a voluntary case under a chapter of this title constitutes
an order for relief under such chapter.".
|
|
|
SEC. 502. APPLICABILITY OF OTHER
SECTIONS TO CHAPTER 9.
Section 901(a) of title 11, United States Code, is amended —
(1) by inserting "555, 556," after "553,"; and
(2) by inserting "559, 560, 561, 562," after "557,".
|
|
|
TITLE VI—BANKRUPTCY
DATA
SEC. 601. IMPROVED BANKRUPTCY
STATISTICS.
(a) IN GENERAL.—Chapter 6 of title
28,
United States Code, is amended by adding at the end the following:
"Sec.
159.
Bankruptcy statistics
"(a)
The clerk of the district court, or the clerk of the bankruptcy court
if one is certified pursuant to section 156(b) of this title, shall
collect statistics regarding debtors who are individuals with primarily
consumer debts seeking relief under chapters 7, 11, and 13 of title
11. Those statistics shall be in a standardized format prescribed by
the Director of the Administrative Office of the United States Courts
(referred to in this section as the "Director").
"(1)
compile the statistics referred to in subsection (a);
"(2)
make the statistics available to the public; and
"(3)
not later than July 1, 2008, and annually thereafter, prepare,
and submit to Congress a report concerning the information collected
under subsection (a) that contains an analysis of the information.
"(c)
The compilation required under subsection (b) shall—
"(1)
be itemized, by chapter, with respect to title 11;
"(2)
be presented in the aggregate and for each district; and
"(3)
include information concerning—
"(A)
the total assets and total liabilities of the debtors
described in subsection (a), and in each category of assets
and liabilities, as reported in the schedules prescribed
pursuant to section 2075 of this title and filed by debtors;
"(B)
the current monthly income, average income, and average expenses
of debtors as reported on the schedules and statements that
each such debtor files under sections 521 and 1322 of title
11;
"(C)
the aggregate amount of debt discharged in cases filed during
the reporting period, determined as the difference between
the total amount of debt and obligations of a debtor reported
on the schedules and the amount of such debt reported in categories
which are predominantly nondischargeable;
"(D)
the average period of time between the date of the filing of
the petition and the closing of the case for cases closed
during the reporting period;
"(E)
for cases closed during the reporting period—
"(i)
the number of cases in which a reaffirmation agreement
was filed; and
"(F)
with respect to cases filed under chapter 13 of title 11,
for the reporting period—
"(ii)
the number of cases dismissed, the number of cases dismissed
for failure to make payments under the plan, the number
of cases refiled after dismissal, and the number of cases
in which the plan was completed, separately itemized with
respect to the number of modifications made before completion
of the plan, if any; and
"(iii)
the number of cases in which the debtor filed another
case during the 6-year period preceding the filing;
"(G)
the number of cases in which creditors were fined for misconduct
and any amount of punitive damages awarded by the court for
creditor misconduct; and
"(H)
the number of cases in which sanctions under rule 9011 of
the Federal Rules of Bankruptcy Procedure were imposed against
debtor's attorney or damages awarded under such Rule.".
(b) CLERICAL AMENDMENT.—The table of sections for chapter 6
of title 28, United States Code, is amended by adding at the end the
following:
"159.
Bankruptcy statistics.".
(c) EFFECTIVE DATE.—The amendments made by this section shall
take effect 18 months after the date of enactment of this Act.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 602. UNIFORM RULES FOR
THE COLLECTION OF BANKRUPTCY DATA.
(a) AMENDMENT.—Chapter 39 of title
28,
United States Code, is amended by adding at the end the following:
"Sec.
589b.
Bankruptcy data
"(a)
RULES.—The Attorney General shall, within a reasonable time after
the effective date of this section, issue rules requiring uniform forms
for (and from time to time thereafter to appropriately modify and
approve)—
"(1)
final reports by trustees in cases under chapters 7, 12, and 13
of title 11; and
"(2)
periodic reports by debtors in possession or trustees in cases
under chapter 11 of title 11.
"(b)
REPORTS.—Each report referred to in subsection (a) shall be designed
(and the requirements as to place and manner of filing shall be established)
so as to facilitate compilation of data and maximum possible access
of the public, both by physical inspection at one or more central filing
locations, and by electronic access through the Internet or other appropriate
media.
"(c)
REQUIRED INFORMATION.—The information required to be filed in the
reports referred to in subsection (b) shall be that which is in the
best interests of debtors and creditors, and in the public interest
in reasonable and adequate information to evaluate the efficiency
and practicality of the Federal bankruptcy system. In issuing rules
proposing the forms referred to in subsection (a), the Attorney General
shall strike the best achievable practical balance between—
"(1)
the reasonable needs of the public for information about the
operational results of the Federal bankruptcy system;
"(2)
economy, simplicity, and lack of undue burden on persons with a
duty to file reports; and
"(3)
appropriate privacy concerns and safeguards.
"(d)
FINAL REPORTS.—The uniform forms for final reports required under
subsection (a) for use by trustees under chapters 7, 12, and 13 of
title 11 shall, in addition to such other matters as are required
by law or as the Attorney General in the discretion of the Attorney
General shall propose, include with respect to a case under such title—
"(1)
information about the length of time the case was pending;
"(4)
receipts and disbursements of the estate;
"(5)
expenses of administration, including for use under section 707(b),
actual costs of administering cases under chapter 13 of title
11;
"(8)
distributions to claimants and claims discharged without payment,
in each case by appropriate category and, in cases under chapters
12 and 13 of title 11, date of confirmation of the plan, each modification
thereto, and defaults by the debtor in performance under the plan.
"(e)
PERIODIC REPORTS.—The uniform forms for periodic reports required under
subsection (a) for use by trustees or debtors in possession under
chapter 11 of title 11 shall, in addition to such other matters as
are required by law or as the Attorney General in the discretion of
the Attorney General shall propose, include—
"(1)
information about the industry classification, published by the
Department of Commerce, for the businesses conducted by the debtor;
"(2)
length of time the case has been pending;
"(3)
number of full-time employees as of the date of the order for
relief and at the end of each reporting period since the case was
filed;
"(4)
cash receipts, cash disbursements and profitability of the debtor
for the most recent period and cumulatively since the date of the
order for relief;
"(5)
compliance with title 11, whether or not tax returns and tax payments
since the date of the order for relief have been timely filed
and made;
"(6)
all professional fees approved by the court in the case for the
most recent period and cumulatively since the date of the order
for relief (separately reported, for the professional fees incurred
by or on behalf of the debtor, between those that would have been
incurred absent a bankruptcy case and those not); and
"(7)
plans of reorganization filed and confirmed and, with respect
thereto, by class, the recoveries of the holders, expressed in
aggregate dollar values and, in the case of claims, as a percentage
of total claims of the class allowed.".
(b) CLERICAL AMENDMENT.—The table of sections for chapter 39
of title 28, United States Code, is amended by adding at the end the
following:
"589b.
Bankruptcy data.".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 603. AUDIT PROCEDURES.
(1) ESTABLISHMENT OF PROCEDURES.—The Attorney General (in
judicial districts served by United States trustees) and the Judicial
Conference of the United States (in judicial districts served
by bankruptcy administrators) shall establish procedures to
determine the accuracy, veracity, and complete ness of petitions,
schedules, and other information that the debtor is required
to provide under sections 521 and 1322 of title 11, United States
Code, and, if applicable, section 111 of such title, in cases
filed under chapter 7 or 13 of such title in which the debtor
is an individual. Such audits shall be in accordance with
generally accepted auditing standards and performed by independent
certified public accountants or independent licensed public accountants,
provided that the Attorney General and the Judicial Conference,
as appropriate, may develop alternative auditing standards not
later than 2 years after the date of enactment of this Act.
(2) PROCEDURES.—Those procedures required by paragraph (1)
shall—
(A) establish a method of selecting appropriate qualified
persons to contract to perform those audits;
(B) establish a method of randomly selecting cases to
be audited, except that not less than 1 out of every 250 cases
in each Federal judicial district shall be selected for audit;
(C) require audits of schedules of income and expenses
that reflect greater than average variances from the statistical
norm of the district in which the schedules were filed if
those variances occur by reason of higher income or higher
expenses than the statistical norm of the district in which
the schedules were filed; and
(D) establish procedures for providing, not less frequently
than annually, public information concerning the aggregate
results of such audits including the percentage of cases, by
district, in which a material misstatement of income or expenditures
is reported.
(b) AMENDMENTS.—Section
586
of title
28,
United States Code, is amended —
(1) in subsection
(a), by striking paragraph
(6) and inserting the following:
"(6)
make such reports as the Attorney General directs, including the
results of audits performed under section 603(a) of the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005;"; and
(2) by adding at the end the following:
"(f)(1)
The United States trustee for each district is authorized to contract
with auditors to perform audits in cases designated by the United States
trustee, in accordance with the procedures established under section
603(a) of the Bankruptcy Abuse Prevention and Consumer Protection Act
of 2005.
"(2)(A)
The report of each audit referred to in paragraph (1) shall be filed
with the court and transmitted to the United States trustee. Each report
shall clearly and conspicuously specify any material misstatement of
income or expenditures or of assets identified by the person performing
the audit. In any case in which a material misstatement of income
or expenditures or of assets has been reported, the clerk of the
district court (or the clerk of the bankruptcy court if one is certified
under section 156(b) of this title) shall give notice of the misstatement
to the creditors in the case.
"(B)
If a material misstatement of income or expenditures or of assets
is reported, the United States trustee shall—
(c) AMENDMENTS TO SECTION 521 OF TITLE 11, U.S.C.—Section
521(a)
of title 11, United States Code, as so designated by section
106, is amended in each of paragraphs
(3) and (4) by inserting "or an auditor serving under section 586(f)
of title 28" after "serving in the case".
(d) AMENDMENTS TO SECTION 727 OF TITLE 11, U.S.C.—Section
727(d)
of title 11, United States Code, is amended —
(1) in paragraph
(2),
by striking "or" at the end;
(2) in paragraph
(3),
by striking the period at the end and inserting "; or"; and
(3) by adding at the end the following:
"(4)
the debtor has failed to explain satisfactorily—
"(A)
a material misstatement in an audit referred to in section
586(f) of title 28; or
"(B)
a failure to make available for inspection all necessary accounts,
papers, documents, financial records, files, and all other
papers, things, or property belonging to the debtor that are
requested for an audit referred to in section 586(f) of title
28.".
(e) EFFECTIVE DATE.—The amendments made by this section shall
take effect 18 months after the date of enactment of this Act.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 604. SENSE OF CONGRESS
REGARDING AVAILABILITY OF BANKRUPTCY DATA.
It is the sense of Congress that—
(1) the national policy of the United States should be that
all data held by bankruptcy clerks in electronic form, to the extent
such data reflects only public records (as defined in section 107
of title 11, United States Code), should be released in a usable
electronic form in bulk to the public, subject to such appropriate
privacy concerns and safeguards as Congress and the Judicial Conference
of the United States may determine; and
(2) there should be established a bankruptcy data system
in which—
(A) a single set of data definitions and forms are used
to collect data nationwide; and
(B) data for any particular bankruptcy case are aggregated
in the same electronic record.
|
|
|
|
|
|
|
|
|
|
|
|
|
TITLE VII—BANKRUPTCY
TAX PROVISIONS
SEC. 701. TREATMENT OF CERTAIN
LIENS.
(a) TREATMENT OF CERTAIN LIENS.—Section
724 of
title 11, United States Code, is amended —
(1) in subsection
(b),
in the matter preceding paragraph
(1),
by inserting "(other than to the extent that there is a properly
perfected unavoidable tax lien arising in connection with an ad
valorem tax on real or personal property of the estate)" after
"under this title";
(2) in subsection
(b)(2),
by inserting "(except that such expenses, other than claims for
wages, salaries, or commissions that arise after the date of the
filing of the petition, shall be limited to expenses incurred
under chapter 7 of this title and shall not include expenses
incurred under chapter 11 of this title)" after "507(a)(1)";
and
(3) by adding at the end the following:
"(e) Before
subordinating a tax lien on real or personal property of the estate,
the trustee shall—
"(1)
exhaust the unencumbered assets of the estate; and
"(2)
in a manner consistent with section 506(c), recover from property
securing an allowed secured claim the reasonable, necessary costs
and expenses of preserving or disposing of such property.
"(f) Notwithstanding
the exclusion of ad valorem tax liens under this section and subject
to the requirements of subsection (e), the following may be paid
from property of the estate which secures a tax lien, or the proceeds
of such property:
"(1)
Claims for wages, salaries, and commissions that are entitled to
priority under section 507(a)(4).
"(2)
Claims for contributions to an employee benefit plan entitled to
priority under section 507(a)(5).".
(b) DETERMINATION OF TAX LIABILITY.—Section
505(a)(2)
of title 11, United States Code, is amended —
(1) in subparagraph
(A),
by striking "or" at the end;
(2) in subparagraph
(B),
by striking the period at the end and inserting "; or"; and
(3) by adding at the end the following:
"(C)
the amount or legality of any amount arising in connection with
an ad valorem tax on real or personal property of the estate, if
the applicable period for contesting or redetermining that amount
under any law (other than a bankruptcy law) has expired.".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 702. TREATMENT OF FUEL
TAX CLAIMS.
Section 501
of title 11, United States Code, is amended by adding at the end the
following:
"(e) A
claim arising from the liability of a debtor for fuel use tax assessed
consistent with the requirements of section 31705 of title 49 may
be filed by the base jurisdiction designated pursuant to the International
Fuel Tax Agreement (as defined in section 31701 of title 49) and, if
so filed, shall be allowed as a single claim.".
|
|
|
SEC. 703. NOTICE OF REQUEST
FOR A DETERMINATION OF TAXES.
Section
505(b) of title 11, United States Code, is amended —
(1)
in the first sentence, by inserting "at the address and in the
manner designated in paragraph (1)" after "determination of
such tax";
(2)
by striking "(1) upon payment" and inserting "(A) upon payment";
(3) by striking "(A) such governmental unit" and inserting
"(i) such governmental unit";
(4) by striking "(B) such governmental unit" and inserting
"(ii) such governmental unit";
(5)
by striking "(2) upon payment" and inserting "(B) upon payment";
(6)
by striking "(3) upon payment" and inserting "(C) upon payment";
(7)
by striking "(b)" and inserting "(2)"; and
(8)
by inserting before paragraph
(2),
as so designated, the following:
"(b)(1)(A)
The clerk shall maintain a list under which a Federal, State, or local
governmental unit responsible for the collection of taxes within
the district may—
"(i)
designate an address for service of requests under this subsection;
and
"(ii)
describe where further information concerning addition al requirements
for filing such requests may be found.
"(B)
If such governmental unit does not designate an address and provide
such address to the clerk under subparagraph (A), any request made
under this subsection may be served at the address for the filing
of a tax return or protest with the appropriate taxing authority
of such governmental unit.".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 704. RATE OF INTEREST ON
TAX CLAIMS.
(a) IN GENERAL.—Subchapter I of chapter 5 of title 11, United
States Code, is amended by adding at the end the following:
"Sec. 511.
Rate of interest on tax claims
"(a) If
any provision of this title requires the payment of interest on
a tax claim or on an administrative expense tax, or the payment of
interest to enable a creditor to receive the present value of the
allowed amount of a tax claim, the rate of interest shall be the rate
determined under applicable nonbankruptcy law.
"(b) In
the case of taxes paid under a confirmed plan under this title, the
rate of interest shall be determined as of the calendar month in
which the plan is confirmed.".
(b) CLERICAL AMENDMENT.—The table of sections for subchapter
I of chapter 5 of title 11, United States Code, is amended by adding
at the end the following:
"511.
Rate of interest on tax claims.".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 705. PRIORITY OF TAX CLAIMS.
Section 507(a)(8)
of title 11, United States Code, is amended —
(A) in the matter preceding clause
(i), by inserting "for a taxable year ending on or before
the date of the filing of the petition" after "gross receipts";
(B) in clause
(i), by striking "for a taxable year ending on or before
the date of the filing of the petition"; and
(C) by striking clause
(ii) and inserting the following:
"(ii)
assessed within 240 days before the date of the filing
of the petition, exclusive of—
"(I)
any time during which an offer in compromise with respect
to that tax was pending or in effect during that 240-day
period, plus 30 days; and
"(II)
any time during which a stay of proceedings against
collections was in effect in a prior case under this
title during that 240-day period, plus 90 days."; and
(2) by adding at the end the following:
"An otherwise applicable time period specified in this paragraph
shall be suspended for any period during which a governmental
unit is prohibited under applicable nonbankruptcy law from collecting
a tax as a result of a request by the debtor for a hearing and
an appeal of any collection action taken or proposed against the
debtor, plus 90 days; plus any time during which the stay of proceedings
was in effect in a prior case under this title or during which
collection was precluded by the existence of 1 or more confirmed
plans under this title, plus 90 days.".
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 706. PRIORITY PROPERTY
TAXES INCURRED.
Section
507(a)(8)(B) of title 11, United States Code, is amended by striking
"assessed" and inserting "incurred".
|
|
|
SEC. 707. NO DISCHARGE OF FRAUDULENT
TAXES IN CHAPTER 13.
Section
1328(a)(2) of title 11, United States Code, as amended by section
314, is amended by striking "paragraph"
and inserting "section 507(a)(8)(C) or in paragraph (1)(B), (1)(C),".
|
|
|
SEC. 708. NO DISCHARGE OF FRAUDULENT
TAXES IN CHAPTER 11.
Section
1141(d) of title 11, United States Code, as amended by sections
321 and
330, is amended by adding at the end
the following:
"(6)
Notwithstanding paragraph (1), the confirmation of a plan does not discharge
a debtor that is a corporation from any debt—
"(A)
of a kind specified in paragraph (2)(A) or (2)(B) of section 523(a)
that is owed to a domestic governmental unit, or owed to a person
as the result of an action filed under subchapter III of chapter
37 of title 31 or any similar State statute; or
"(B)
for a tax or customs duty with respect to which the debtor—
"(i)
made a fraudulent return; or
"(ii)
willfully attempted in any manner to evade or to defeat such
tax or such customs duty.".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 709. STAY OF TAX PROCEEDINGS
LIMITED TO PREPETITION TAXES.
Section 362(a)(8)
of title 11, United States Code, is amended by striking "the debtor"
and inserting "a corporate debtor's tax liability for a taxable
period the bankruptcy court may determine or concerning the tax liability
of a debtor who is an individual for a taxable period ending before
the date of the order for relief under this title".
|
|
|
SEC. 710. PERIODIC PAYMENT OF
TAXES IN CHAPTER 11 CASES.
Section
1129(a)(9) of title 11, United States Code, is amended —
(1) in subparagraph
(B),
by striking "and" at the end;
(2) in subparagraph
(C),
by striking "deferred cash payments," and all that follows through
the end of the subparagraph, and inserting "regular installment
payments in cash—
"(i)
of a total value, as of the effective date of the plan,
equal to the allowed amount of such claim;
"(ii)
over a period ending not later than 5 years after the date
of the order for relief under section 301, 302, or 303;
and
"(iii)
in a manner not less favorable than the most favored nonpriority
unsecured claim provided for by the plan (other than cash
payments made to a class of creditors under section 1122(b));
and"; and
(3) by adding at the end the following:
"(D)
with respect to a secured claim which would otherwise meet
the description of an unsecured claim of a governmental unit
under section 507(a)(8), but for the secured status of that
claim, the holder of that claim will receive on account of
that claim, cash payments, in the same manner and over the
same period, as prescribed in subparagraph (C).".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 711. AVOIDANCE OF STATUTORY
TAX LIENS PROHIBITED.
Section 545(2)
of title 11, United States Code, is amended by inserting before the
semicolon at the end the following: ", except in any case in which
a purchaser is a purchaser described in section 6323 of the Internal
Revenue Code of 1986, or in any other similar provision of State or
local law".
|
|
|
SEC. 712. PAYMENT OF TAXES IN
THE CONDUCT OF BUSINESS.
(a) PAYMENT OF TAXES REQUIRED.—Section
960
of title
28,
United States Code, is amended —
(1) by inserting "(a)" before "Any"; and
(2) by adding at the end the following:
"(b)
A tax under subsection (a) shall be paid on or before the due date
of the tax under applicable nonbankruptcy law, unless—
"(1)
the tax is a property tax secured by a lien against property that
is abandoned under section 554 of title 11, within a reasonable
period of time after the lien attaches, by the trustee in a case
under title 11; or
"(2)
payment of the tax is excused under a specific provision of title
11.
"(c)
In a case pending under chapter 7 of title 11, payment of a tax
may be deferred until final distribution is made under section 726
of title 11, if—
"(1)
the tax was not incurred by a trustee duly appointed or elected
under chapter 7 of title 11; or
"(2)
before the due date of the tax, an order of the court makes a
finding of probable insufficiency of funds of the estate to pay
in full the administrative expenses allowed under section 503(b)
of title 11 that have the same priority in distribution under section
726(b) of title 11 as the priority of that tax.".
(b) PAYMENT OF AD VALOREM TAXES REQUIRED.—Section
503(b)(1)(B)(i)
of title 11, United States Code, is amended by inserting "whether secured
or unsecured, including property taxes for which liability is in
rem, in personam, or both," before "except".
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE EXPENSE TAXES ELIMINATED.—Section
503(b)(1)
of title 11, United States Code, is amended —
(1) in subparagraph
(B),
by striking "and" at the end;
(2) in subparagraph
(C),
by adding "and" at the end; and
(3) by adding at the end the following:
"(D)
notwithstanding the requirements of subsection (a), a governmental
unit shall not be required to file a request for the payment
of an expense described in subparagraph (B) or (C), as a condition
of its being an allowed administrative expense;".
(d) PAYMENT OF TAXES AND FEES AS SECURED CLAIMS.—Section
506 of title
11, United States Code, is amended —
(1) in subsection
(b),
by inserting "or State statute" after "agreement"; and
(2) in subsection
(c),
by inserting ", including the payment of all ad valorem property
taxes with respect to the property" before the period at the end.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 713. TARDILY FILED PRIORITY
TAX CLAIMS.
Section 726(a)(1)
of title 11, United States Code, is amended by striking "before the
date on which the trustee commences distribution under this section;"
and inserting the following: "on or before the earlier of—
"(A)
the date that is 10 days after the mailing to creditors of
the summary of the trustee's final report; or
"(B)
the date on which the trustee commences final distribution under
this section;".
|
|
|
SEC. 714. INCOME TAX RETURNS
PREPARED BY TAX AUTHORITIES.
Section 523(a)
of title 11, United States Code, as amended by sections
215 and
224, is amended —
(A) in the matter preceding clause
(i), by inserting "or equivalent report or notice," after
"a return,";
(B) in clause
(i), by inserting "or given" after "filed"; and
(i) by inserting "or given" after "filed"; and
(ii) by inserting ", report, or notice" after "return";
and
(2) by adding at
the
end the following:
"For purposes of this subsection, the term "return" means a return that
satisfies the requirements of applicable nonbankruptcy law (including
applicable filing requirements). Such term includes a return
prepared pursuant to section 6020(a) of the Internal Revenue Code
of 1986, or similar State or local law, or a written stipulation to
a judgment or a final order entered by a nonbankruptcy tribunal, but
does not include a return made pursuant to section 6020(b) of the
Internal Revenue Code of 1986, or a similar State or local law.".
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 715. DISCHARGE OF THE ESTATE'S
LIABILITY FOR UNPAID TAXES.
Section 505(b)(2)
of title 11, United States Code, as amended by section
703, is amended by inserting "the estate," after
"misrepresentation,".
|
|
|
SEC. 716. REQUIREMENT TO FILE
TAX RETURNS TO CONFIRM CHAPTER 13 PLANS.
(a) FILING OF PREPETITION TAX RETURNS REQUIRED FOR PLAN CONFIRMATION.—Section
1325(a)
of title 11, United States Code, as amended by sections
102,
213, and 306, is amended by inserting
after paragraph (8) the following:
"(9)
the debtor has filed all applicable Federal, State, and local
tax returns as required by section 1308.".
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX RETURNS.—
IN GENERAL.—Subchapter I of chapter 13 of title 11,
United States Code, is amended by adding at the end the following:
"Sec. 1308.
Filing of prepetition tax returns
"(a)
Not later than the day before the date on which the meeting of the
creditors is first scheduled to be held under section 341(a), if
the debtor was required to file a tax return under applicable
nonbankruptcy law, the debtor shall file with appropriate tax authorities
all tax returns for all taxable periods ending during the 4-year period
ending on the date of the filing of the petition.
"(b)(1)
Subject to paragraph (2), if the tax returns required by subsection
(a) have not been filed by the date on which the meeting of creditors
is first scheduled to be held under section 341(a), the trustee may
hold open that meeting for a reasonable period of time to allow the
debtor an addition al period of time to file any unfiled returns,
but such addition al period of time shall not extend beyond—
"(ii)
the date on which the return is due under the last automatic
extension of time for filing that return to which the debtor
is entitled, and for which request is timely made, in accordance
with applicable nonbankruptcy law.
"(2)
After notice and a hearing, and order entered before the tolling
of any applicable filing period determined under this subsection,
if the debtor demonstrates by a preponderance of the evidence that
the failure to file a return as required under this subsection is
attributable to circumstances beyond the control of the debtor, the
court may extend the filing period established by the trustee under
this subsection for—
"(c)
For purposes of this section, the term "return" includes a return prepared
pursuant to subsection (a) or (b) of section 6020 of the Internal
Revenue Code of 1986, or a similar State or local law, or a written
stipulation to a judgment or a final order entered by a nonbankruptcy
tribunal.".
(2) CONFORMING AMENDMENT.—The table of sections for subchapter
I of chapter 13 of title 11, United States Code, is amended by
adding at the end the following:
"1308.
Filing of prepetition tax returns.".
(c) DISMISSAL OR CONVERSION ON FAILURE TO COMPLY.—Section
1307 of title
11, United States Code, is amended —
(1) by redesignating subsections (e) and
(f)
as subsections (f) and
(g),
respectively; and
(2) by inserting after subsection
(d)
the following:
"(e)
Upon the failure of the debtor to file a tax return under section
1308, on request of a party in interest or the United States trustee
and after notice and a hearing, the court shall dismiss a case or
convert a case under this chapter to a case under chapter 7 of this
title, whichever is in the best interest of the creditors and the
estate.".
(d) TIMELY FILED CLAIMS.—Section
502(b)(9)
of title 11, United States Code, is amended by inserting before the
period at the end the following: ", and except that in a case under
chapter 13, a claim of a governmental unit for a tax with respect
to a return filed under section 1308 shall be timely if the claim is
filed on or before the date that is 60 days after the date on which
such return was filed as required".
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO CONFIRMATION.—It is
the sense of Congress that the Judicial Conference of the United
States should, as soon as practicable after the date of enactment of
this Act, propose amended Federal Rules of Bankruptcy Procedure that
provide—
(1) notwithstanding the provisions of Rule
3015(f), in cases under chapter 13 of title 11, United States
Code, that an objection to the confirmation of a plan filed by a
governmental unit on or before the date that is 60 days after
the date on which the debtor files all tax returns required under
sections 1308 and 1325(a)(7) of title 11, United States Code, shall
be treated for all purposes as if such objection had been timely
filed before such confirmation; and
(2) in addition to the provisions of Rule
3007, in a case under chapter 13 of title 11, United States
Code, that no objection to a claim for a tax with respect to which
a return is required to be filed under section 1308 of title 11,
United States Code, shall be filed until such return has been filed
as required.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 717. STANDARDS FOR TAX
DISCLOSURE.
Section
1125(a)(1) of title 11, United States Code, is amended —
(1) by inserting "including a discussion of the potential
material Federal tax consequences of the plan to the debtor, any
successor to the debtor, and a hypothetical investor typical of
the holders of claims or interests in the case," after "records,";
and
(2) by striking "a hypothetical reasonable investor typical
of holders of claims or interests" and inserting "such a hypothetical
investor".
|
|
|
SEC. 718. SETOFF OF TAX REFUNDS.
Section 362(b)
of title 11, United States Code, as amended by sections
224, 303, 311, and 401, is amended
by inserting after paragraph (25) the following:
"(26)
under subsection (a), of the setoff under applicable nonbankruptcy
law of an income tax refund, by a governmental unit, with respect
to a taxable period that ended before the date of the order for
relief against an income tax liability for a taxable period
that also ended before the date of the order for relief, except
that in any case in which the setoff of an income tax refund is
not permitted under applicable nonbankruptcy law because of
a pending action to determine the amount or legality of a tax liability,
the governmental unit may hold the refund pending the resolution
of the action, unless the court, on the motion of the trustee
and after notice and a hearing, grants the taxing authority adequate
protection (within the meaning of section 361) for the secured
claim of such authority in the setoff under section 506(a);".
|
|
|
SEC. 719. SPECIAL PROVISIONS
RELATED TO THE TREATMENT OF STATE AND LOCAL TAXES.
(1) SPECIAL PROVISIONS.—Section
346 of
title 11, United States Code, is amended to read as follows:
"Sec. 346.
Special provisions related to the treatment of State and local taxes
"(a) Whenever
the Internal Revenue Code of 1986 provides that a separate taxable
estate or entity is created in a case concerning a debtor under
this title, and the income, gain, loss, deductions, and credits of
such estate shall be taxed to orclaimed 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 orclaimed by the estate and may not
be taxed to orclaimed 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 orclaimed by the debtor, such income, gain, loss, deductions,
and credits shall be taxed to orclaimed by the debtor under a State
or local law imposing a tax on or measured by income and may not be
taxed to orclaimed by the estate. The trustee shall make such tax returns
of income of corporations and of partnerships as are required under
any State or local law, but with respect to partnerships, shall make
such returns only to the extent such returns are also required to be
made under such Code. The estate shall be liable for any tax imposed
on such corporation or partnership, but not for any tax imposed on
partners or members.
"(c) With
respect to a partnership or any entity treated as a partnership under
a State or local law imposing a tax on or measured by income that is
a debtor in a case under this title, any gain or loss resulting from
a distribution of property from such partnership, or any distributive
share of any income, gain, loss, deduction, or credit of a partner
or member that is distributed, or considered distributed, from such
partnership, after the commencement of the case, is gain, loss, income,
deduction, or credit, as the case may be, of the partner or member,
and if such partner or member is a debtor in a case under this title,
shall be subject to tax in accordance with subsection (a) or (b).
"(d) For
purposes of any State or local law imposing a tax on or measured by
income, the taxable period of a debtor in a case under this title
shall terminate only if and to the extent that the taxable period of
such debtor terminates under the Internal Revenue Code of 1986.
"(e) The
estate in any case described in subsection (a) shall use the same accounting
method as the debtor used immediately before the commencement of the
case, if such method of accounting complies with applicable nonbankruptcy
tax law.
"(f) For
purposes of any State or local law imposing a tax on or measured by
income, a transfer of property from the debtor to the estate or from
the estate to the debtor shall not be treated as a disposition for
purposes of any provision assigning tax consequences to a disposition,
except to the extent that such transfer is treated as a disposition
under the Internal Revenue Code of 1986.
"(g) Whenever
a tax is imposed pursuant to a State or local law imposing a tax on
or measured by income pursuant to subsection (a) or (b), such tax
shall be imposed at rates generally applicable to the same types
of entities under such State or local law.
"(h) The
trustee shall withhold from any payment of claims for wages, salaries,
commissions, dividends, interest, or other payments, or collect,
any amount required to be withheld or collected under applicable
State or local tax law, and shall pay such withheld or collected amount
to the appropriate governmental unit at the time and in the manner
required by such tax law, and with the same priority as the claim from
which such amount was withheld or collected was paid.
"(i)(1)
To the extent that any State or local law imposing a tax on or measured
by income provides for the carryover of any tax attribute from one
taxable period to a subsequent taxable period, the estate shall succeed
to such tax attribute in any case in which such estate is subject to
tax under subsection (a).
"(2)
After such a case is closed or dismissed, the debtor shall succeed
to any tax attribute to which the estate succeeded under paragraph
(1) to the extent consistent with the Internal Revenue Code of 1986.
"(3)
The estate may carry back any loss or tax attribute to a taxable period
of the debtor that ended before the date of the order for relief
under this title to the extent that—
"(B)
the same or a similar tax attribute may be carried back by the estate
to such a taxable period of the debtor under the Internal Revenue
Code of 1986.
"(j)(1)
For purposes of any State or local law imposing a tax on or measured
by income, income is not realized by the estate, the debtor, or a
successor to the debtor by reason of discharge of indebtedness in a
case under this title, except to the extent, if any, that such income
is subject to tax under the Internal Revenue Code of 1986.
"(2)
Whenever the Internal Revenue Code of 1986 provides that the amount
excluded from gross income in respect of the discharge of indebtedness
in a case under this title shall be applied to reduce the tax attributes
of the debtor or the estate, a similar reduction shall be made under
any State or local law imposing a tax on or measured by income to the
extent such State or local law recognizes such attributes. Such State
or local law may also provide for the reduction of other attributes
to the extent that the full amount of income from the discharge of
indebtedness has not been applied.
"(k)(1)
Except as provided in this section and section 505, the time and manner
of filing tax returns and the items of income, gain, loss, deduction,
and credit of any taxpayer shall be determined under applicable
nonbankruptcy law.
"(2)
For Federal tax purposes, the provisions of this section are subject
to the Internal Revenue Code of 1986 and other applicable Federal
nonbankruptcy law.".
(2) CLERICAL AMENDMENT.—The table of sections for chapter
3 of title 11, United States Code, is amended by striking the item
relating to section 346 and inserting the following:
"346.
Special provisions related to the treatment of State and local taxes.".
(b) CONFORMING AMENDMENTS.—Title 11 of the United States Code
is amended —
(1) by striking section
728;
(2) in the table of sections for chapter 7 by striking the
item relating to section
728;
(A) by striking subsections
(a) and
(b); and
(B) by redesignating subsections (c) and (d) as subsections
(a) and
(b), respectively; and
(A) by striking subsections
(a) and
(b); and
(B) by redesignating subsections (c) and (d) as subsections
(a) and
(b), respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEC. 720. DISMISSAL FOR FAILURE
TO TIMELY FILE TAX RETURNS.
Section 521
of title 11, United States Code, as amended by sections
106,
225, 305,
315, and
316, is amended by adding at the end
the following:
"(j)(1)
Notwithstanding any other provision of this title, if the debtor fails
to file a tax return that becomes due after the commencement of the
case or to properly obtain an extension of the due date for filing
such return, the taxing authority may request that the court enter
an order converting or dismissing the case.
"(2)
If the debtor does not file the required return or obtain the extension
referred to in paragraph (1) within 90 days after a request is filed
by the taxing authority under that paragraph, the court shall convert
or dismiss the case, whichever is in the best interests of creditors
and the estate.".
|
|
|
