H.R. 975 - The Bankruptcy Abuse Prevention and Consumer Protection Act of 2003

COMMITTEE ACTION: REPORTED BY VOICE VOTE on Tuesday, March 18, 2003.
FLOOR ACTION: ADOPTED BY VOICE VOTE on Wednesday, March 19, 2003.
MANAGERS: SESSIONS/FROST
108th Congress
1st Session

H.R. 975 – The Bankruptcy Abuse Prevention and Consumer Protection Act of 2003

1. Structured rule.

2. Provides one hour of general debate equally divided and controlled by the chairman and ranking minority member of the Committee on the Judiciary.

3. Waives all points of order against consideration of the bill.

4. Makes in order the amendment in the nature of a substitute recommended by the Committee on the Judiciary now printed in the bill as an original bill for the purpose of amendment, which shall be considered as read.

5. Makes in order only those amendments printed in the Rules Committee report accompanying the resolution.

6. Provides that the amendments made in order may be offered only in the order printed in the report, may be offered only by a Member designated in the report, shall be considered as read, shall be debatable for the time specified in the report equally divided and controlled by the proponent and an opponent, shall not be subject to amendment, and shall not be subject to a demand for a division of the question in the House or in the Committee of the Whole.

7. Waives all points of order against the amendments printed in the report.

8. Provides one motion to recommit with or without instructions.

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RESOLUTION

Resolved, That at any time after the adoption of this resolution the Speaker may, pursuant to clause 2(b) of rule XVIII, declare the House resolved into the Committee of the Whole House on the state of the Union for consideration of the bill (H.R. 975) to amend title 11 of the United States Code, and for other purposes. The first reading of the bill shall be dispensed with. All points of order against consideration of the bill are waived. General debate shall be confined to the bill and shall not exceed one hour equally divided and controlled by the chairman and ranking minority member of the Committee on the Judiciary. After general debate the bill shall be considered for amendment under the five-minute rule. It shall be in order to consider as an original bill for the purpose of amendment under the five-minute rule the amendment in the nature of a substitute recommended by the Committee on the Judiciary now printed in the bill. The committee amendment in the nature of a substitute shall be considered as read. All points of order against the committee amendment in the nature of a substitute are waived. No amendment to the committee amendment in the nature of a substitute shall be in order except those printed in the report of the Committee on Rules accompanying this resolution. Each amendment may be offered only in the order printed in the report, may be offered only by a Member designated in the report, shall be considered as read, shall be debatable for the time specified in the report equally divided and controlled by the proponent and an opponent, shall not be subject to amendment, and shall not be subject to a demand for division of the question in the House or in the Committee of the Whole. All points of order against such amendments are waived. At the conclusion of consideration of the bill for amendment the Committee shall rise and report the bill to the House with such amendments as may have been adopted. Any Member may demand a separate vote in the House on any amendment adopted in the Committee of the Whole to the bill or to the committee amendment in the nature of a substitute. The previous question shall be considered as ordered on the bill and amendments thereto to final passage without intervening motion except one motion to recommit with or without instructions.


SUMMARY OF THE AMENDMENTS MADE IN ORDER UNDER THE RULE

1. Toomey/Sherman- Redrafts Title IX so that the same provisions in Title IX are applicable to both the bank and credit union federal regulators that must manage these matters should a problem occur. (10 minutes)

2. Guiterrez- Provides that upon enactment, Section 1234 applies both prospectively and to involuntary cases now pending in the bankruptcy courts. (10 minutes)

3. Cannon/Delahunt- (1) Increases the monetary cap on wage and employee benefit claims entitled to priority under the Bankruptcy Code from $4,650 to $10,000 and lengthens the reachback period for wage claims form 90 days to 180 days;(2) increases the reachback period during which fraudulent transfers can be rescinded from one to two years and provides that certain compensation payments (e.g. bonuses) to a corporation’s insiders during this two-year reachback period can be rescinded, under certain circumstances; and (3) requires the court to reinstate retiree benefits that a corporate debtor modified within the 180-day period preceding the bankruptcy filing, unless the balance of the equities justifies the modification. (10 minutes)

4. Sherman- Requires corporations filing for bankruptcy to file their case in the district court of the district in which the corporation’s principal place of business in the United States is located. For cases in which the debtor is an affiliate, the bankruptcy case may be filed in the district in which the principal place of business of the affiliate with the greatest assets in the Untied States is located. (10 minutes)

5. Conyers- Amendment in the Nature of a Substitute. Modifies the means test and requires the court, in considering a motion to dismiss or convert a ch. 7 case, to take into account the debtor’s actual reasonable and necessary expenses and income, and determine whether the debtor can repay 30% of unsecured debt. Protects child and spousal support obligations by limiting the ability of creditors to deprive debtors of the right to a fresh start and emerge from bankruptcy able to pay their obligations to their children. Modifies changes to ch. 13 to make it more workable and increase the likelihood that debtors who choose ch. 13 will succeed. Makes restrictions on automobile cram-down more workable (1-year instead of 2-year lookback) and other personalty (6-month instead of 1-year lookback). Prevents debtors from using bankruptcy court to evade lawful debts for certain criminal civil rights violations. Provides enhanced protection for employee benefits, ensures fairness for employees, and provides a remedy for corporate wrongdoing in ch. 11. Provides bankruptcy courts with flexibility to protect small businesses from premature or unnecessary liquidation if they are able to reorganize successfully. Closes loophole in current law by preventing debtors from taking cases to courts far away from where the business is actually conducted. Protects the right of debtors to uphold contracts in bankruptcy. Provides for additional bankruptcy judges according to the most recent needs assessment by the Judicial Conference. Strikes pro-IRS amendments that would elevate the rights of taxing authorities over other creditors and debtors. Provides for enhanced disclosure on credit card statements to help consumers understand the cost to repay balances using their actual debts. Protects against corruption in bankruptcy proceedings by deleting amendments that would allow for abusive motions, allow for conflicts of interest on the part of investment bankers, and allow bankruptcy professionals to evade accountability in court for their wrongdoing. (40 minutes)

TEXT OF THE AMENDMENTS MADE IN ORDER UNDER THE RULE(.pdf)

1. Toomey/Sherman

2. Guiterrez

3. Cannon/Delahunt

4. Sherman