Section 105(d) of title 11, United States Code, is amended--
(1) in the matter preceding paragraph (1), by striking `, may'; and
(2) by striking paragraph (1) and inserting the following:
`(1) shall hold such status conferences as are necessary to further the
expeditious and economical resolution of the case; and'.
SEC. 441. SERIAL FILER PROVISIONS.
Section 362 of title 11, United States Code, as amended by sections 106, 305, and 311, is amended--
(1) in subsection (k), as so redesignated by section 305--
(A) by striking `An' and inserting `(1) Except as provided in paragraph (2), an'; and
(B) by adding at the end the following:
`(2) If such violation is based on an action taken by an entity in the
good faith belief that subsection (h) applies to the debtor, the
recovery under paragraph (1) of this subsection against such entity
shall be limited to actual damages.'; and
(2) by adding at the end the following:
`(n)(1) Except as provided in paragraph (2), subsection (a) does not apply in a case in which the debtor--
`(A) is a debtor in a small business case pending at the time the petition is filed;
`(B) was a debtor in a small business case that was dismissed for any
reason by an order that became final in the 2-year period ending on the
date of the order for relief entered with respect to the petition;
`(C) was a debtor in a small business case in which a plan was
confirmed in the 2-year period ending on the date of the order for
relief entered with respect to the petition; or
`(D) is an entity that has acquired substantially all of the assets or
business of a small business debtor described in subparagraph (A), (B),
or (C), unless such entity establishes by a preponderance of the
evidence that such entity acquired substantially all of the assets or
business of such small business debtor in good faith and not for the
purpose of evading this paragraph.
`(2) Paragraph (1) does not apply--
`(A) to an involuntary case involving no collusion by the debtor with creditors; or
`(B) to the filing of a petition if--
`(i) the debtor proves by a preponderance of the evidence that the
filing of the petition resulted from circumstances beyond the control
of the debtor not foreseeable at the time the case then pending was
filed; and
`(ii) it is more likely than not that the court will confirm a feasible
plan, but not a liquidating plan, within a reasonable period of time.'.
SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION AND APPOINTMENT OF TRUSTEE.
(a) EXPANDED GROUNDS FOR DISMISSAL OR CONVERSION- Section 1112 of title
11, United States Code, is amended by striking subsection (b) and
inserting the following:
`(b)(1) Except as provided in paragraph (2) of this subsection,
subsection (c) of this section, and section 1104(a)(3), on request of a
party in interest, and after notice and a hearing, absent unusual
circumstances specifically identified by the court that establish that
the requested conversion or dismissal is not in the best interests of
creditors and the estate, the court shall convert a case under this
chapter to a case under chapter 7 or dismiss a case under this chapter,
whichever is in the best interests of creditors and the estate, if the
movant establishes cause.
`(2) The relief provided in paragraph (1) shall not be granted absent
unusual circumstances specifically identified by the court that
establish that such relief is not in the best interests of creditors
and the estate, if the debtor or another party in interest objects and
establishes that--
`(A) there is a reasonable likelihood that a plan will be confirmed
within the timeframes established in sections 1121(e) and 1129(e) of
this title, or if such sections do not apply, within a reasonable
period of time; and
`(B) the grounds for granting such relief include an act or omission of the debtor other than under paragraph (4)(A)--
`(i) for which there exists a reasonable justification for the act or omission; and
`(ii) that will be cured within a reasonable period of time fixed by the court.
`(3) The court shall commence the hearing on a motion under this
subsection not later than 30 days after filing of the motion, and shall
decide the motion not later than 15 days after commencement of such
hearing, unless the movant expressly consents to a continuance for a
specific period of time or compelling circumstances prevent the court
from meeting the time limits established by this paragraph.
`(4) For purposes of this subsection, the term `cause' includes--
`(A) substantial or continuing loss to or diminution of the estate and
the absence of a reasonable likelihood of rehabilitation;
`(B) gross mismanagement of the estate;
`(C) failure to maintain appropriate insurance that poses a risk to the estate or to the public;
`(D) unauthorized use of cash collateral substantially harmful to 1 or more creditors;
`(E) failure to comply with an order of the court;
`(F) unexcused failure to satisfy timely any filing or reporting
requirement established by this title or by any rule applicable to a
case under this chapter;
`(G) failure to attend the meeting of creditors convened under section
341(a) or an examination ordered under rule 2004 of the Federal Rules
of Bankruptcy Procedure without good cause shown by the debtor;
`(H) failure timely to provide information or attend meetings
reasonably requested by the United States trustee (or the bankruptcy
administrator, if any);
`(I) failure timely to pay taxes owed after the date of the order for
relief or to file tax returns due after the date of the order for
relief;
`(J) failure to file a disclosure statement, or to file or confirm a
plan, within the time fixed by this title or by order of the court;
`(K) failure to pay any fees or charges required under chapter 123 of title 28;
`(L) revocation of an order of confirmation under section 1144;
`(M) inability to effectuate substantial consummation of a confirmed plan;
`(N) material default by the debtor with respect to a confirmed plan;
`(O) termination of a confirmed plan by reason of the occurrence of a condition specified in the plan; and
`(P) failure of the debtor to pay any domestic support obligation that
first becomes payable after the date of the filing of the petition.'.
(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').
`(b) The Director shall--
`(1) compile the statistics referred to in subsection (a);
`(2) make the statistics available to the public; and
`(3) not later than July 1, 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
`(ii)(I) the total number of reaffirmation agreements filed;
`(II) of those cases in which a reaffirmation agreement was filed, the
number of cases in which the debtor was not represented by an attorney;
and
`(III) of those cases in which a reaffirmation agreement was filed, the
number of cases in which the reaffirmation agreement was approved by
the court;
`(F) with respect to cases filed under chapter 13 of title 11, for the reporting period--
`(i)(I) the number of cases in which a final order was entered
determining the value of property securing a claim in an amount less
than the amount of the claim; and
`(II) the number of final orders entered determining the value of property securing a claim;
`(ii) the number of cases dismissed, the number of cases dismissed for
failure to make payments under the plan, the number of cases refiled
after dismissal, and the number of cases in which the plan was
completed, separately itemized with respect to the number of
modifications made before completion of the plan, if any; and
`(iii) the number of cases in which the debtor filed another case during the 6-year period preceding the filing;
`(G) the number of cases in which creditors were fined for misconduct
and any amount of punitive damages awarded by the court for creditor
misconduct; and
`(H) the number of cases in which sanctions under rule 9011 of the
Federal Rules of Bankruptcy Procedure were imposed against debtor's
attorney or damages awarded under such Rule.'.
(b) CLERICAL AMENDMENT- The table of sections for chapter 6 of title
28, United States Code, is amended by adding at the end the following:
`159. Bankruptcy statistics.'.
(c) EFFECTIVE DATE- The amendments made by this section shall take effect 18 months after the date of enactment of this Act.
SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANKRUPTCY DATA.
(a) AMENDMENT- Chapter 39 of title 28, United States Code, is amended by adding at the end the following:
`Sec. 589b. Bankruptcy data
`(a) RULES- The Attorney General shall, within a reasonable time after
the effective date of this section, issue rules requiring uniform forms
for (and from time to time thereafter to appropriately modify and
approve)--
`(1) final reports by trustees in cases under chapters 7, 12, and 13 of title 11; and
`(2) periodic reports by debtors in possession or trustees in cases under chapter 11 of title 11.
`(b) REPORTS- Each report referred to in subsection (a) shall be
designed (and the requirements as to place and manner of filing shall
be established) so as to facilitate compilation of data and maximum
possible access of the public, both by physical inspection at one or
more central filing locations, and by electronic access through the
Internet or other appropriate media.
`(c) REQUIRED INFORMATION- The information required to be filed in the
reports referred to in subsection (b) shall be that which is in the
best interests of debtors and creditors, and in the public interest in
reasonable and adequate information to evaluate the efficiency and
practicality of the Federal bankruptcy system. In issuing rules
proposing the forms referred to in subsection (a), the Attorney General
shall strike the best achievable practical balance between--
`(1) the reasonable needs of the public for information about the operational results of the Federal bankruptcy system;
`(2) economy, simplicity, and lack of undue burden on persons with a duty to file reports; and
`(3) appropriate privacy concerns and safeguards.
`(d) FINAL REPORTS- The uniform forms for final reports required under
subsection (a) for use by trustees under chapters 7, 12, and 13 of
title 11 shall, in addition to such other matters as are required by
law or as the Attorney General in the discretion of the Attorney
General shall propose, include with respect to a case under such
title--
`(1) information about the length of time the case was pending;
`(2) assets abandoned;
`(3) assets exempted;
`(4) receipts and disbursements of the estate;
`(5) expenses of administration, including for use under section
707(b), actual costs of administering cases under chapter 13 of title
11;
`(6) claims asserted;
`(7) claims allowed; and
`(8) distributions to claimants and claims discharged without payment,
in each case by appropriate category and, in cases under chapters 12
and 13 of title 11, date of confirmation of the plan, each modification
thereto, and defaults by the debtor in performance under the plan.
`(e) PERIODIC REPORTS- The uniform forms for periodic reports required
under subsection (a) for use by trustees or debtors in possession under
chapter 11 of title 11 shall, in addition to such other matters as are
required by law or as the Attorney General in the discretion of the
Attorney General shall propose, include--
`(1) information about the industry classification, published by the
Department of Commerce, for the businesses conducted by the debtor;
`(2) length of time the case has been pending;
`(3) number of full-time employees as of the date of the order for
relief and at the end of each reporting period since the case was
filed;
`(4) cash receipts, cash disbursements and profitability of the debtor
for the most recent period and cumulatively since the date of the order
for relief;
`(5) compliance with title 11, whether or not tax returns and tax
payments since the date of the order for relief have been timely filed
and made;
`(6) all professional fees approved by the court in the case for the
most recent period and cumulatively since the date of the order for
relief (separately reported, for the professional fees incurred by or
on behalf of the debtor, between those that would have been incurred
absent a bankruptcy case and those not); and
`(7) plans of reorganization filed and confirmed and, with respect
thereto, by class, the recoveries of the holders, expressed in
aggregate dollar values and, in the case of claims, as a percentage of
total claims of the class allowed.'.
(b) CLERICAL AMENDMENT- The table of sections for chapter 39 of title
28, United States Code, is amended by adding at the end the following:
`589b. Bankruptcy data.'.
SEC. 603. AUDIT PROCEDURES.
(a) IN GENERAL-
(1) ESTABLISHMENT OF PROCEDURES- The Attorney General (in judicial
districts served by United States trustees) and the Judicial Conference
of the United States (in judicial districts served by bankruptcy
administrators) shall establish procedures to determine the accuracy,
veracity, and completeness of petitions, schedules, and other
information that the debtor is required to provide under sections 521
and 1322 of title 11, United States Code, and, if applicable, section
111 of such title, in cases filed under chapter 7 or 13 of such title
in which the debtor is an individual. Such audits shall be in
accordance with generally accepted auditing standards and performed by
independent certified public accountants or independent licensed public
accountants, provided that the Attorney General and the Judicial
Conference, as appropriate, may develop alternative auditing standards
not later than 2 years after the date of enactment of this Act.
(2) PROCEDURES- Those procedures required by paragraph (1) shall--
(A) establish a method of selecting appropriate qualified persons to contract to perform those audits;
(B) establish a method of randomly selecting cases to be audited,
except that not less than 1 out of every 250 cases in each Federal
judicial district shall be selected for audit;
(C) require audits of schedules of income and expenses that reflect
greater than average variances from the statistical norm of the
district in which the schedules were filed if those variances occur by
reason of higher income or higher expenses than the statistical norm of
the district in which the schedules were filed; and
(D) establish procedures for providing, not less frequently than
annually, public information concerning the aggregate results of such
audits including the percentage of cases, by district, in which a
material misstatement of income or expenditures is reported.
(b) AMENDMENTS- Section 586 of title 28, United States Code, is amended--
(1) in subsection (a), by striking paragraph (6) and inserting the following:
`(6) make such reports as the Attorney General directs, including the
results of audits performed under section 603(a) of the Bankruptcy
Abuse Prevention and Consumer Protection Act of 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--
`(i) report the material misstatement, if appropriate, to the United
States Attorney pursuant to section 3057 of title 18; and
`(ii) if advisable, take appropriate action, including but not limited
to commencing an adversary proceeding to revoke the debtor's discharge
pursuant to section 727(d) of title 11.'.
(c) AMENDMENTS TO SECTION 521 OF TITLE 11, U.S.C- Section 521(a) of
title 11, United States Code, as so designated by section 106, is
amended in each of paragraphs (3) and (4) by inserting `or an auditor
serving under section 586(f) of title 28' after `serving in the case'.
(d) AMENDMENTS TO SECTION 727 OF TITLE 11, U.S.C- Section 727(d) of title 11, United States Code, is amended--
(1) in paragraph (2), by striking `or' at the end;
(2) in paragraph (3), by striking the period at the end and inserting `; or'; and
(3) by adding at the end the following:
`(4) the debtor has failed to explain satisfactorily--
`(A) a material misstatement in an audit referred to in section 586(f) of title 28; or
`(B) a failure to make available for inspection all necessary accounts,
papers, documents, financial records, files, and all other papers,
things, or property belonging to the debtor that are requested for an
audit referred to in section 586(f) of title 28.'.
(e) EFFECTIVE DATE- The amendments made by this section shall take effect 18 months after the date of enactment of this Act.
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY OF BANKRUPTCY DATA.
It is the sense of Congress that--
(1) the national policy of the United States should be that all data
held by bankruptcy clerks in electronic form, to the extent such data
reflects only public records (as defined in section 107 of title 11,
United States Code), should be released in a usable electronic form in
bulk to the public, subject to such appropriate privacy concerns and
safeguards as Congress and the Judicial Conference of the United States
may determine; and
(2) there should be established a bankruptcy data system in which--
(A) a single set of data definitions and forms are used to collect data nationwide; and
(B) data for any particular bankruptcy case are aggregated in the same electronic record.
TITLE VII--BANKRUPTCY TAX PROVISIONS
SEC. 701. TREATMENT OF CERTAIN LIENS.
(a) TREATMENT OF CERTAIN LIENS- Section 724 of title 11, United States Code, is amended--
(1) in subsection (b), in the matter preceding paragraph (1), by
inserting `(other than to the extent that there is a properly perfected
unavoidable tax lien arising in connection with an ad valorem tax on
real or personal property of the estate)' after `under this title';
(2) in subsection (b)(2), by inserting `(except that such expenses,
other than claims for wages, salaries, or commissions that arise after
the date of the filing of the petition, shall be limited to expenses
incurred under chapter 7 of this title and shall not include expenses
incurred under chapter 11 of this title)' after `507(a)(1)'; and
(3) by adding at the end the following:
`(e) Before subordinating a tax lien on real or personal property of the estate, the trustee shall--
`(1) exhaust the unencumbered assets of the estate; and
`(2) in a manner consistent with section 506(c), recover from property
securing an allowed secured claim the reasonable, necessary costs and
expenses of preserving or disposing of such property.
`(f) Notwithstanding the exclusion of ad valorem tax liens under this
section and subject to the requirements of subsection (e), the
following may be paid from property of the estate which secures a tax
lien, or the proceeds of such property:
`(1) Claims for wages, salaries, and commissions that are entitled to priority under section 507(a)(4).
`(2) Claims for contributions to an employee benefit plan entitled to priority under section 507(a)(5).'.
(b) DETERMINATION OF TAX LIABILITY- Section 505(a)(2) of title 11, United States Code, is amended--
(1) in subparagraph (A), by striking `or' at the end;
(2) in subparagraph (B), by striking the period at the end and inserting `; or'; and
(3) by adding at the end the following:
`(C) the amount or legality of any amount arising in connection with an
ad valorem tax on real or personal property of the estate, if the
applicable period for contesting or redetermining that amount under any
law (other than a bankruptcy law) has expired.'.
SEC. 702. TREATMENT OF FUEL TAX CLAIMS.
Section 501 of title 11, United States Code, is amended by adding at the end the following:
`(e) A claim arising from the liability of a debtor for fuel use tax
assessed consistent with the requirements of section 31705 of title 49
may be filed by the base jurisdiction designated pursuant to the
International Fuel Tax Agreement (as defined in section 31701 of title
49) and, if so filed, shall be allowed as a single claim.'.
SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF TAXES.
Section 505(b) of title 11, United States Code, is amended--
(1) in the first sentence, by inserting `at the address and in the
manner designated in paragraph (1)' after `determination of such tax';
(2) by striking `(1) upon payment' and inserting `(A) upon payment';
(3) by striking `(A) such governmental unit' and inserting `(i) such governmental unit';
(4) by striking `(B) such governmental unit' and inserting `(ii) such governmental unit';
(5) by striking `(2) upon payment' and inserting `(B) upon payment';
(6) by striking `(3) upon payment' and inserting `(C) upon payment';
(7) by striking `(b)' and inserting `(2)'; and
(8) by inserting before paragraph (2), as so designated, the following:
`(b)(1)(A) The clerk shall maintain a list under which a Federal,
State, or local governmental unit responsible for the collection of
taxes within the district may--
`(i) designate an address for service of requests under this subsection; and
`(ii) describe where further information concerning additional requirements for filing such requests may be found.
`(B) If such governmental unit does not designate an address and
provide such address to the clerk under subparagraph (A), any request
made under this subsection may be served at the address for the filing
of a tax return or protest with the appropriate taxing authority of
such governmental unit.'.
SEC. 704. RATE OF INTEREST ON TAX CLAIMS.
(a) IN GENERAL- Subchapter I of chapter 5 of title 11, United States Code, is amended by adding at the end the following:
`Sec. 511. Rate of interest on tax claims
`(a) If any provision of this title requires the payment of interest on
a tax claim or on an administrative expense tax, or the payment of
interest to enable a creditor to receive the present value of the
allowed amount of a tax claim, the rate of interest shall be the rate
determined under applicable nonbankruptcy law.
`(b) In the case of taxes paid under a confirmed plan under this title,
the rate of interest shall be determined as of the calendar month in
which the plan is confirmed.'.
(b) CLERICAL AMENDMENT- The table of sections for subchapter I of
chapter 5 of title 11, United States Code, is amended by adding at the
end the following:
`511. Rate of interest on tax claims.'.
SEC. 705. PRIORITY OF TAX CLAIMS.
Section 507(a)(8) of title 11, United States Code, is amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by inserting `for a taxable
year ending on or before the date of the filing of the petition' after
`gross receipts';
(B) in clause (i), by striking `for a taxable year ending on or before the date of the filing of the petition'; and
(C) by striking clause (ii) and inserting the following:
`(ii) assessed within 240 days before the date of the filing of the petition, exclusive of--
`(I) any time during which an offer in compromise with respect to that
tax was pending or in effect during that 240-day period, plus 30 days;
and
`(II) any time during which a stay of proceedings against collections
was in effect in a prior case under this title during that 240-day
period, plus 90 days.'; and
(2) by adding at the end the following:
`An otherwise applicable time period specified in this paragraph shall
be suspended for any period during which a governmental unit is
prohibited under applicable nonbankruptcy law from collecting a tax as
a result of a request by the debtor for a hearing and an appeal of any
collection action taken or proposed against the debtor, plus 90 days;
plus any time during which the stay of proceedings was in effect in a
prior case under this title or during which collection was precluded by
the existence of 1 or more confirmed plans under this title, plus 90
days.'.
SEC. 706. PRIORITY PROPERTY TAXES INCURRED.
Section 507(a)(8)(B) of title 11, United States Code, is amended by striking `assessed' and inserting `incurred'.
SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 13.
Section 1328(a)(2) of title 11, United States Code, as amended by
section 314, is amended by striking `paragraph' and inserting `section
507(a)(8)(C) or in paragraph (1)(B), (1)(C),'.
SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAPTER 11.
Section 1141(d) of title 11, United States Code, as amended by sections
321 and 330, is amended by adding at the end the following:
`(6) Notwithstanding paragraph (1), the confirmation of a plan does not
discharge a debtor that is a corporation from any debt--
`(A) of a kind specified in paragraph (2)(A) or (2)(B) of section
523(a) that is owed to a domestic governmental unit, or owed to a
person as the result of an action filed under subchapter III of chapter
37 of title 31 or any similar State statute; or
`(B) for a tax or customs duty with respect to which the debtor--
`(i) made a fraudulent return; or
`(ii) willfully attempted in any manner to evade or to defeat such tax or such customs duty.'.
SEC. 709. STAY OF TAX PROCEEDINGS LIMITED TO PREPETITION TAXES.
Section 362(a)(8) of title 11, United States Code, is amended by
striking `the debtor' and inserting `a corporate debtor's tax liability
for a taxable period the bankruptcy court may determine or concerning
the tax liability of a debtor who is an individual for a taxable period
ending before the date of the order for relief under this title'.
SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 CASES.
Section 1129(a)(9) of title 11, United States Code, is amended--
(1) in subparagraph (B), by striking `and' at the end;
(2) in subparagraph (C), by striking `deferred cash payments,' and all
that follows through the end of the subparagraph, and inserting
`regular installment payments in cash--
`(i) of a total value, as of the effective date of the plan, equal to the allowed amount of such claim;
`(ii) over a period ending not later than 5 years after the date of the order for relief under section 301, 302, or 303; and
`(iii) in a manner not less favorable than the most favored nonpriority
unsecured claim provided for by the plan (other than cash payments made
to a class of creditors under section 1122(b)); and'; and
(3) by adding at the end the following:
`(D) with respect to a secured claim which would otherwise meet the
description of an unsecured claim of a governmental unit under section
507(a)(8), but for the secured status of that claim, the holder of that
claim will receive on account of that claim, cash payments, in the same
manner and over the same period, as prescribed in subparagraph (C).'.
SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIBITED.
Section 545(2) of title 11, United States Code, is amended by inserting
before the semicolon at the end the following: `, except in any case in
which a purchaser is a purchaser described in section 6323 of the
Internal Revenue Code of 1986, or in any other similar provision of
State or local law'.
SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSINESS.
(a) PAYMENT OF TAXES REQUIRED- Section 960 of title 28, United States Code, is amended--
(1) by inserting `(a)' before `Any'; and
(2) by adding at the end the following:
`(b) A tax under subsection (a) shall be paid on or before the due date
of the tax under applicable nonbankruptcy law, unless--
`(1) the tax is a property tax secured by a lien against property that
is abandoned under section 554 of title 11, within a reasonable period
of time after the lien attaches, by the trustee in a case under title
11; or
`(2) payment of the tax is excused under a specific provision of title 11.
`(c) In a case pending under chapter 7 of title 11, payment of a tax
may be deferred until final distribution is made under section 726 of
title 11, if--
`(1) the tax was not incurred by a trustee duly appointed 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--
(1) in paragraph (1)(B)--
(A) in the matter preceding clause (i), by inserting `or equivalent report or notice,' after `a return,';
(B) in clause (i), by inserting `or given' after `filed'; and
(C) in clause (ii)--
(i) by inserting `or given' after `filed'; and
(ii) by inserting `, report, or notice' after `return'; and
(2) by adding at the end the following:
`For purposes of this subsection, the term `return' means a return that
satisfies the requirements of applicable nonbankruptcy law (including
applicable filing requirements). Such term includes a return prepared
pursuant to section 6020(a) of the Internal Revenue Code of 1986, or
similar State or local law, or a written stipulation to a judgment or a
final order entered by a nonbankruptcy tribunal, but does not include a
return made pursuant to section 6020(b) of the Internal Revenue Code of
1986, or a similar State or local law.'.
SEC. 715. DISCHARGE OF THE ESTATE'S LIABILITY FOR UNPAID TAXES.
Section 505(b)(2) of title 11, United States Code, as amended by
section 703, is amended by inserting `the estate,' after
`misrepresentation,'.
SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CONFIRM CHAPTER 13 PLANS.
(a) FILING OF PREPETITION TAX RETURNS REQUIRED FOR PLAN CONFIRMATION-
Section 1325(a) of title 11, United States Code, as amended by sections
102, 213, and 306, is amended by inserting after paragraph (8) the
following:
`(9) the debtor has filed all applicable Federal, State, and local tax returns as required by section 1308.'.
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX RETURNS-
(1) IN GENERAL- Subchapter I of chapter 13 of title 11, United States Code, is amended by adding at the end the following:
`Sec. 1308. Filing of prepetition tax returns
`(a) Not later than the day before the date on which the meeting of the
creditors is first scheduled to be held under section 341(a), if the
debtor was required to file a tax return under applicable nonbankruptcy
law, the debtor shall file with appropriate tax authorities all tax
returns for all taxable periods ending during the 4-year period ending
on the date of the filing of the petition.
`(b)(1) Subject to paragraph (2), if the tax returns required by
subsection (a) have not been filed by the date on which the meeting of
creditors is first scheduled to be held under section 341(a), the
trustee may hold open that meeting for a reasonable period of time to
allow the debtor an additional period of time to file any unfiled
returns, but such additional period of time shall not extend beyond--
`(A) for any return that is past due as of the date of the filing of
the petition, the date that is 120 days after the date of that meeting;
or
`(B) for any return that is not past due as of the date of the filing of the petition, the later of--
`(i) the date that is 120 days after the date of that meeting; or
`(ii) the date on which the return is due under the last automatic
extension of time for filing that return to which the debtor is
entitled, and for which request is timely made, in accordance with
applicable nonbankruptcy law.
`(2) After notice and a hearing, and order entered before the tolling
of any applicable filing period determined under this subsection, if
the debtor demonstrates by a preponderance of the evidence that the
failure to file a return as required under this subsection is
attributable to circumstances beyond the control of the debtor, the
court may extend the filing period established by the trustee under
this subsection for--
`(A) a period of not more than 30 days for returns described in paragraph (1); and
`(B) a period not to extend after the applicable extended due date for a return described in paragraph (2).
`(c) For purposes of this section, the term `return' includes a return
prepared pursuant to subsection (a) or (b) of section 6020 of the
Internal Revenue Code of 1986, or a similar State or local law, or a
written stipulation to a judgment or a final order entered by a
nonbankruptcy tribunal.'.
(2) CONFORMING AMENDMENT- The table of sections for subchapter I of
chapter 13 of title 11, United States Code, is amended by adding at the
end the following:
`1308. Filing of prepetition tax returns.'.
(c) DISMISSAL OR CONVERSION ON FAILURE TO COMPLY- Section 1307 of title 11, United States Code, is amended--
(1) by redesignating subsections (e) and (f) as subsections (f) and (g), respectively; and
(2) by inserting after subsection (d) the following:
`(e) Upon the failure of the debtor to file a tax return under section
1308, on request of a party in interest or the United States trustee
and after notice and a hearing, the court shall dismiss a case or
convert a case under this chapter to a case under chapter 7 of this
title, whichever is in the best interest of the creditors and the
estate.'.
(d) TIMELY FILED CLAIMS- Section 502(b)(9) of title 11, United States
Code, is amended by inserting before the period at the end the
following: `, and except that in a case under chapter 13, a claim of a
governmental unit for a tax with respect to a return filed under
section 1308 shall be timely if the claim is filed on or before the
date that is 60 days after the date on which such return was filed as
required'.
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO CONFIRMATION- It is the sense
of Congress that the Judicial Conference of the United States should,
as soon as practicable after the date of enactment of this Act, propose
amended Federal Rules of Bankruptcy Procedure that provide--
(1) notwithstanding the provisions of Rule 3015(f), in cases under
chapter 13 of title 11, United States Code, that an objection to the
confirmation of a plan filed by a governmental unit on or before the
date that is 60 days after the date on which the debtor files all tax
returns required under sections 1308 and 1325(a)(7) of title 11, United
States Code, shall be treated for all purposes as if such objection had
been timely filed before such confirmation; and
(2) in addition to the provisions of Rule 3007, in a case under chapter
13 of title 11, United States Code, that no objection to a claim for a
tax with respect to which a return is required to be filed under
section 1308 of title 11, United States Code, shall be filed until such
return has been filed as required.
SEC. 717. STANDARDS FOR TAX DISCLOSURE.
Section 1125(a)(1) of title 11, United States Code, is amended--
(1) by inserting `including a discussion of the potential material
Federal tax consequences of the plan to the debtor, any successor to
the debtor, and a hypothetical investor typical of the holders of
claims or interests in the case,' after `records,'; and
(2) by striking `a hypothetical reasonable investor typical of holders
of claims or interests' and inserting `such a hypothetical investor'.
SEC. 718. SETOFF OF TAX REFUNDS.
Section 362(b) of title 11, United States Code, as amended by sections
224, 303, 311, and 401, is amended by inserting after paragraph (25)
the following:
`(26) under subsection (a), of the setoff under applicable
nonbankruptcy law of an income tax refund, by a governmental unit, with
respect to a taxable period that ended before the date of the order for
relief against an income tax liability for a taxable period that also
ended before the date of the order for relief, except that in any case
in which the setoff of an income tax refund is not permitted under
applicable nonbankruptcy law because of a pending action to determine
the amount or legality of a tax liability, the governmental unit may
hold the refund pending the resolution of the action, unless the court,
on the motion of the trustee and after notice and a hearing, grants the
taxing authority adequate protection (within the meaning of section
361) for the secured claim of such authority in the setoff under
section 506(a);'.
SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREATMENT OF STATE AND LOCAL TAXES.
(a) IN GENERAL-
(1) SPECIAL PROVISIONS- Section 346 of title 11, United States Code, is amended to read as follows:
`Sec. 346. Special provisions related to the treatment of State and local taxes
`(a) Whenever the Internal Revenue Code of 1986 provides that a
separate taxable estate or entity is created in a case concerning a
debtor under this title, and the income, gain, loss, deductions, and
credits of such estate shall be taxed to or claimed by the estate, a
separate taxable estate is also created for purposes of any State and
local law imposing a tax on or measured by income and such income,
gain, loss, deductions, and credits shall be taxed to or claimed by the
estate and may not be taxed to or claimed by the debtor. The preceding
sentence shall not apply if the case is dismissed. The trustee shall
make tax returns of income required under any such State or local law.
`(b) Whenever the Internal Revenue Code of 1986 provides that no
separate taxable estate shall be created in a case concerning a debtor
under this title, and the income, gain, loss, deductions, and credits
of an estate shall be taxed to or claimed by the debtor, such income,
gain, loss, deductions, and credits shall be taxed to or claimed by the
debtor under a State or local law imposing a tax on or measured by
income and may not be taxed to or claimed by the estate. The trustee
shall make such tax returns of income of corporations and of
partnerships as are required under any State or local law, but with
respect to partnerships, shall make such returns only to the extent
such returns are also required to be made under such Code. The estate
shall be liable for any tax imposed on such corporation or partnership,
but not for any tax imposed on partners or members.
`(c) With respect to a partnership or any entity treated as a
partnership under a State or local law imposing a tax on or measured by
income that is a debtor in a case under this title, any gain or loss
resulting from a distribution of property from such partnership, or any
distributive share of any income, gain, loss, deduction, or credit of a
partner or member that is distributed, or considered distributed, from
such partnership, after the commencement of the case, is gain, loss,
income, deduction, or credit, as the case may be, of the partner or
member, and if such partner or member is a debtor in a case under this
title, shall be subject to tax in accordance with subsection (a) or
(b).
`(d) For purposes of any State or local law imposing a tax on or
measured by income, the taxable period of a debtor in a case under this
title shall terminate only if and to the extent that the taxable period
of such debtor terminates under the Internal Revenue Code of 1986.
`(e) The estate in any case described in subsection (a) shall use the
same accounting method as the debtor used immediately before the
commencement of the case, if such method of accounting complies with
applicable nonbankruptcy tax law.
`(f) For purposes of any State or local law imposing a tax on or
measured by income, a transfer of property from the debtor to the
estate or from the estate to the debtor shall not be treated as a
disposition for purposes of any provision assigning tax consequences to
a disposition, except to the extent that such transfer is treated as a
disposition under the Internal Revenue Code of 1986.
`(g) Whenever a tax is imposed pursuant to a State or local law
imposing a tax on or measured by income pursuant to subsection (a) or
(b), such tax shall be imposed at rates generally applicable to the
same types of entities under such State or local law.
`(h) The trustee shall withhold from any payment of claims for wages,
salaries, commissions, dividends, interest, or other payments, or
collect, any amount required to be withheld or collected under
applicable State or local tax law, and shall pay such withheld or
collected amount to the appropriate governmental unit at the time and
in the manner required by such tax law, and with the same priority as
the claim from which such amount was withheld or collected was paid.
`(i)(1) To the extent that any State or local law imposing a tax on or
measured by income provides for the carryover of any tax attribute from
one taxable period to a subsequent taxable period, the estate shall
succeed to such tax attribute in any case in which such estate is
subject to tax under subsection (a).
`(2) After such a case is closed or dismissed, the debtor shall succeed
to any tax attribute to which the estate succeeded under paragraph (1)
to the extent consistent with the Internal Revenue Code of 1986.
`(3) The estate may carry back any loss or tax attribute to a taxable
period of the debtor that ended before the date of the order for relief
under this title to the extent that--
`(A) applicable State or local tax law provides for a carryback in the case of the debtor; and
`(B) the same or a similar tax attribute may be carried back by the
estate to such a taxable period of the debtor under the Internal
Revenue Code of 1986.
`(j)(1) For purposes of any State or local law imposing a tax on or
measured by income, income is not realized by the estate, the debtor,
or a successor to the debtor by reason of discharge of indebtedness in
a case under this title, except to the extent, if any, that such income
is subject to tax under the Internal Revenue Code of 1986.
`(2) Whenever the Internal Revenue Code of 1986 provides that the
amount excluded from gross income in respect of the discharge of
indebtedness in a case under this title shall be applied to reduce the
tax attributes of the debtor or the estate, a similar reduction shall
be made under any State or local law imposing a tax on or measured by
income to the extent such State or local law recognizes such
attributes. Such State or local law may also provide for the reduction
of other attributes to the extent that the full amount of income from
the discharge of indebtedness has not been applied.
`(k)(1) Except as provided in this section and section 505, the time
and manner of filing tax returns and the items of income, gain, loss,
deduction, and credit of any taxpayer shall be determined under
applicable nonbankruptcy law.
`(2) For Federal tax purposes, the provisions of this section are
subject to the Internal Revenue Code of 1986 and other applicable
Federal nonbankruptcy law.'.
(2) CLERICAL AMENDMENT- The table of sections for chapter 3 of title
11, United States Code, is amended by striking the item relating to
section 346 and inserting the following:
`346. Special provisions related to the treatment of State and local taxes.'.
(b) CONFORMING AMENDMENTS- Title 11 of the United States Code is amended--
(1) by striking section 728;
(2) in the table of sections for chapter 7 by striking the item relating to section 728;
(3) in section 1146--
(A) by striking subsections (a) and (b); and
(B) by redesignating subsections (c) and (d) as subsections (a) and (b), respectively; and
(4) in section 1231--
(A) by striking subsections (a) and (b); and
(B) by redesignating subsections (c) and (d) as subsections (a) and (b), respectively.
SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX RETURNS.
Section 521 of title 11, United States Code, as amended by sections
106, 225, 305, 315, and 316, is amended by adding at the end the
following:
`(j)(1) Notwithstanding any other provision of this title, if the
debtor fails to file a tax return that becomes due after the
commencement of the case or to properly obtain an extension of the due
date for filing such return, the taxing authority may request that the
court enter an order converting or dismissing the case.
`(2) If the debtor does not file the required return or obtain the
extension referred to in paragraph (1) within 90 days after a request
is filed by the taxing authority under that paragraph, the court shall
convert or dismiss the case, whichever is in the best interests of
creditors and the estate.'.
TITLE VIII--ANCILLARY AND OTHER CROSS-BORDER CASES
SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, UNITED STATES CODE.
(a) IN GENERAL- Title 11, United States Code, is amended by inserting after chapter 13 the following:
`CHAPTER 15--ANCILLARY AND OTHER CROSS-BORDER CASES
`Sec.
`1501. Purpose and scope of application.
`SUBCHAPTER I--GENERAL PROVISIONS
`1502. Definitions.
`1503. International obligations of the United States.
`1504. Commencement of ancillary case.
`1505. Authorization to act in a foreign country.
`1506. Public policy exception.
`1507. Additional assistance.
`1508. Interpretation.
`SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE COURT
`1509. Right of direct access.
`1510. Limited jurisdiction.
`1511. Commencement of case under section 301 or 303.
`1512. Participation of a foreign representative in a case under this title.
`1513. Access of foreign creditors to a case under this title.
`1514. Notification to foreign creditors concerning a case under this title.
`SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
`1515. Application for recognition.
`1516. Presumptions concerning recognition.
`1517. Order granting recognition.
`1518. Subsequent information.
`1519. Relief that may be granted upon filing petition for recognition.
`1520. Effects of recognition of a foreign main proceeding.
`1521. Relief that may be granted upon recognition.
`1522. Protection of creditors and other interested persons.
`1523. Actions to avoid acts detrimental to creditors.
`1524. Intervention by a foreign representative.
`SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN REPRESENTATIVES
`1525. Cooperation and direct communication between the court and foreign courts or foreign representatives.
`1526. Cooperation and direct communication between the trustee and foreign courts or foreign representatives.
`1527. Forms of cooperation.
`SUBCHAPTER V--CONCURRENT PROCEEDINGS
`1528. Commencement of a case under this title after recognition of a foreign main proceeding.
`1529. Coordination of a case under this title and a foreign proceeding.
`1530. Coordination of more than 1 foreign proceeding.
`1531. Presumption of insolvency based on recognition of a foreign main proceeding.
`1532. Rule of payment in concurrent proceedings.
`Sec. 1501. Purpose and scope of application
`(a) The purpose of this chapter is to incorporate the Model Law on
Cross-Border Insolvency so as to provide effective mechanisms for
dealing with cases of cross-border insolvency with the objectives of--
`(1) cooperation between--
`(A) courts of the United States, United States trustees, trustees, examiners, debtors, and debtors in possession; and
`(B) the courts and other competent authorities of foreign countries involved in cross-border insolvency cases;
`(2) greater legal certainty for trade and investment;
`(3) fair and efficient administration of cross-border insolvencies
that protects the interests of all creditors, and other interested
entities, including the debtor;
`(4) protection and maximization of the value of the debtor's assets; and
`(5) facilitation of the rescue of financially troubled businesses, thereby protecting investment and preserving employment.
`(b) This chapter applies where--
`(1) assistance is sought in the United States by a foreign court or a
foreign representative in connection with a foreign proceeding;
`(2) assistance is sought in a foreign country in connection with a case under this title;
`(3) a foreign proceeding and a case under this title with respect to the same debtor are pending concurrently; or
`(4) creditors or other interested persons in a foreign country have an
interest in requesting the commencement of, or participating in, a case
or proceeding under this title.
`(c) This chapter does not apply to--
`(1) a proceeding concerning an entity, other than a foreign insurance company, identified by exclusion in section 109(b);
`(2) an individual, or to an individual and such individual's spouse,
who have debts within the limits specified in section 109(e) and who
are citizens of the United States or aliens lawfully admitted for
permanent residence in the United States; or
`(3) an entity subject to a proceeding under the Securities Investor
Protection Act of 1970, a stockbroker subject to subchapter III of
chapter 7 of this title, or a commodity broker subject to subchapter IV
of chapter 7 of this title.
`(d) The court may not grant relief under this chapter with respect to
any deposit, escrow, trust fund, or other security required or
permitted under any applicable State insurance law or regulation for
the benefit of claim holders in the United States.
`SUBCHAPTER I--GENERAL PROVISIONS
`Sec. 1502. Definitions
`For the purposes of this chapter, the term--
`(1) `debtor' means an entity that is the subject of a foreign proceeding;
`(2) `establishment' means any place of operations where the debtor carries out a nontransitory economic activity;
`(3) `foreign court' means a judicial or other authority competent to control or supervise a foreign proceeding;
`(4) `foreign main proceeding' means a foreign proceeding pending in
the country where the debtor has the center of its main interests;
`(5) `foreign nonmain proceeding' means a foreign proceeding, other
than a foreign main proceeding, pending in a country where the debtor
has an establishment;
`(6) `trustee' includes a trustee, a debtor in possession in a case
under any chapter of this title, or a debtor under chapter 9 of this
title;
`(7) `recognition' means the entry of an order granting recognition of
a foreign main proceeding or foreign nonmain proceeding under this
chapter; and
`(8) `within the territorial jurisdiction of the United States', when
used with reference to property of a debtor, refers to tangible
property located within the territory of the United States and
intangible property deemed under applicable nonbankruptcy law to be
located within that territory, including any property subject to
attachment or garnishment that may properly be seized or garnished by
an action in a Federal or State court in the United States.
`Sec. 1503. International obligations of the United States
`To the extent that this chapter conflicts with an obligation of the
United States arising out of any treaty or other form of agreement to
which it is a party with one or more other countries, the requirements
of the treaty or agreement prevail.
`Sec. 1504. Commencement of ancillary case
`A case under this chapter is commenced by the filing of a petition for
recognition of a foreign proceeding under section 1515.
`Sec. 1505. Authorization to act in a foreign country
`A trustee or another entity (including an examiner) may be authorized
by the court to act in a foreign country on behalf of an estate created
under section 541. An entity authorized to act under this section may
act in any way permitted by the applicable foreign law.
`Sec. 1506. Public policy exception
`Nothing in this chapter prevents the court from refusing to take an
action governed by this chapter if the action would be manifestly
contrary to the public policy of the United States.
`Sec. 1507. Additional assistance
`(a) Subject to the specific limitations stated elsewhere in this
chapter the court, if recognition is granted, may provide additional
assistance to a foreign representative under this title or under other
laws of the United States.
`(b) In determining whether to provide additional assistance under this
title or under other laws of the United States, the court shall
consider whether such additional assistance, consistent with the
principles of comity, will reasonably assure--
`(1) just treatment of all holders of claims against or interests in the debtor's property;
`(2) protection of claim holders in the United States against prejudice
and inconvenience in the processing of claims in such foreign
proceeding;
`(3) prevention of preferential or fraudulent dispositions of property of the debtor;
`(4) distribution of proceeds of the debtor's property substantially in
accordance with the order prescribed by this title; and
`(5) if appropriate, the provision of an opportunity for a fresh start
for the individual that such foreign proceeding concerns.
`Sec. 1508. Interpretation
`In interpreting this chapter, the court shall consider its
international origin, and the need to promote an application of this
chapter that is consistent with the application of similar statutes
adopted by foreign jurisdictions.
`SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE COURT
`Sec. 1509. Right of direct access
`(a) A foreign representative may commence a case under section 1504 by
filing directly with the court a petition for recognition of a foreign
proceeding under section 1515.
`(b) If the court grants recognition under section 1517, and subject to
any limitations that the court may impose consistent with the policy of
this chapter--
`(1) the foreign representative has the capacity to sue and be sued in a court in the United States;
`(2) the foreign representative may apply directly to a court in the United States for appropriate relief in that court; and
`(3) a court in the United States shall grant comity or cooperation to the foreign representative.
`(c) A request for comity or cooperation by a foreign representative in
a court in the United States other than the court which granted
recognition shall be accompanied by a certified copy of an order
granting recognition under section 1517.
`(d) If the court denies recognition under this chapter, the court may
issue any appropriate order necessary to prevent the foreign
representative from obtaining comity or cooperation from courts in the
United States.
`(e) Whether or not the court grants recognition, and subject to
sections 306 and 1510, a foreign representative is subject to
applicable nonbankruptcy law.
`(f) Notwithstanding any other provision of this section, the failure
of a foreign representative to commence a case or to obtain recognition
under this chapter does not affect any right the foreign representative
may have to sue in a court in the United States to collect or recover a
claim which is the property of the debtor.
`Sec. 1510. Limited jurisdiction
`The sole fact that a foreign representative files a petition under
section 1515 does not subject the foreign representative to the
jurisdiction of any court in the United States for any other purpose.
`Sec. 1511. Commencement of case under section 301 or 303
`(a) Upon recognition, a foreign representative may commence--
`(1) an involuntary case under section 303; or
`(2) a voluntary case under section 301 or 302, if the foreign proceeding is a foreign main proceeding.
`(b) The petition commencing a case under subsection (a) must be
accompanied by a certified copy of an order granting recognition. The
court where the petition for recognition has been filed must be advised
of the foreign representative's intent to commence a case under
subsection (a) prior to such commencement.
`Sec. 1512. Participation of a foreign representative in a case under this title
`Upon recognition of a foreign proceeding, the foreign representative
in the recognized proceeding is entitled to participate as a party in
interest in a case regarding the debtor under this title.
`Sec. 1513. Access of foreign creditors to a case under this title
`(a) Foreign creditors have the same rights regarding the commencement
of, and participation in, a case under this title as domestic
creditors.
`(b)(1) Subsection (a) does not change or codify present law as to the
priority of claims under section 507 or 726, except that the claim of a
foreign creditor under those sections shall not be given a lower
priority than that of general unsecured claims without priority solely
because the holder of such claim is a foreign creditor.
`(2)(A) Subsection (a) and paragraph (1) do not change or codify
present law as to the allowability of foreign revenue claims or other
foreign public law claims in a proceeding under this title.
`(B) Allowance and priority as to a foreign tax claim or other foreign
public law claim shall be governed by any applicable tax treaty of the
United States, under the conditions and circumstances specified
therein.
`Sec. 1514. Notification to foreign creditors concerning a case under this title
`(a) Whenever in a case under this title notice is to be given to
creditors generally or to any class or category of creditors, such
notice shall also be given to the known creditors generally, or to
creditors in the notified class or category, that do not have addresses
in the United States. The court may order that appropriate steps be
taken with a view to notifying any creditor whose address is not yet
known.
`(b) Such notification to creditors with foreign addresses described in
subsection (a) shall be given individually, unless the court considers
that, under the circumstances, some other form of notification would be
more appropriate. No letter or other formality is required.
`(c) When a notification of commencement of a case is to be given to foreign creditors, such notification shall--
`(1) indicate the time period for filing proofs of claim and specify the place for filing such proofs of claim;
`(2) indicate whether secured creditors need to file proofs of claim; and
`(3) contain any other information required to be included in such
notification to creditors under this title and the orders of the court.
`(d) Any rule of procedure or order of the court as to notice or the
filing of a proof of claim shall provide such additional time to
creditors with foreign addresses as is reasonable under the
circumstances.
`SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
`Sec. 1515. Application for recognition
`(a) A foreign representative applies to the court for recognition of a
foreign proceeding in which the foreign representative has been
appointed by filing a petition for recognition.
`(b) A petition for recognition shall be accompanied by--
`(1) a certified copy of the decision commencing such foreign proceeding and appointing the foreign representative;
`(2) a certificate from the foreign court affirming the existence of
such foreign proceeding and of the appointment of the foreign
representative; or
`(3) in the absence of evidence referred to in paragraphs (1) and (2),
any other evidence acceptable to the court of the existence of such
foreign proceeding and of the appointment of the foreign
representative.
`(c) A petition for recognition shall also be accompanied by a
statement identifying all foreign proceedings with respect to the
debtor that are known to the foreign representative.
`(d) The documents referred to in paragraphs (1) and (2) of subsection
(b) shall be translated into English. The court may require a
translation into English of additional documents.
`Sec. 1516. Presumptions concerning recognition
`(a) If the decision or certificate referred to in section 1515(b)
indicates that the foreign proceeding is a foreign proceeding and that
the person or body is a foreign representative, the court is entitled
to so presume.
`(b) The court is entitled to presume that documents submitted in
support of the petition for recognition are authentic, whether or not
they have been legalized.
`(c) In the absence of evidence to the contrary, the debtor's
registered office, or habitual residence in the case of an individual,
is presumed to be the center of the debtor's main interests.
`Sec. 1517. Order granting recognition
`(a) Subject to section 1506, after notice and a hearing, an order recognizing a foreign proceeding shall be entered if--
`(1) such foreign proceeding for which recognition is sought is a
foreign main proceeding or foreign nonmain proceeding within the
meaning of section 1502;
`(2) the foreign representative applying for recognition is a person or body; and
`(3) the petition meets the requirements of section 1515.
`(b) Such foreign proceeding shall be recognized--
`(1) as a foreign main proceeding if it is pending in the country where the debtor has the center of its main interests; or
`(2) as a foreign nonmain proceeding if the debtor has an establishment
within the meaning of section 1502 in the foreign country where the
proceeding is pending.
`(c) A petition for recognition of a foreign proceeding shall be
decided upon at the earliest possible time. Entry of an order
recognizing a foreign proceeding constitutes recognition under this
chapter.
`(d) The provisions of this subchapter do not prevent modification or
termination of recognition if it is shown that the grounds for granting
it were fully or partially lacking or have ceased to exist, but in
considering such action the court shall give due weight to possible
prejudice to parties that have relied upon the order granting
recognition. A case under this chapter may be closed in the manner
prescribed under section 350.
`Sec. 1518. Subsequent information
`From the time of filing the petition for recognition of a foreign
proceeding, the foreign representative shall file with the court
promptly a notice of change of status concerning--
`(1) any substantial change in the status of such foreign proceeding or
the status of the foreign representative's appointment; and
`(2) any other foreign proceeding regarding the debtor that becomes known to the foreign representative.
`Sec. 1519. Relief that may be granted upon filing petition for recognition
`(a) From the time of filing a petition for recognition until the court
rules on the petition, the court may, at the request of the foreign
representative, where relief is urgently needed to protect the assets
of the debtor or the interests of the creditors, grant relief of a
provisional nature, including--
`(1) staying execution against the debtor's assets;
`(2) entrusting the administration or realization of all or part of the
debtor's assets located in the United States to the foreign
representative or another person authorized by the court, including an
examiner, in order to protect and preserve the value of assets that, by
their
