CRS Report for Congress
S. 625, The Bankruptcy Reform Act, in the Senate:
Selected Amendments
Robin Jeweler
Legislative Attorney
American Law Division
On November 4, 1999, shortly before adjournment of the first session of the 106th
Congress, S. 625, 106th Cong., 1st Sess. (1999), the Bankruptcy Reform Act, was
brought to the floor of the Senate for consideration. More than 300 germane and
nongermane amendments were offered. This report surveys selected amendments to the
bill which were passed prior to adjournment. Consideration of S. 625 is likely to be
resumed by the Senate in the second session of the 106th Congress.
On May 5, 1999, the House passed its version of bankruptcy reform, H.R. 833, 106th
Cong., 1st Sess. (1999), by a vote of 313-108.
On November 4, 1999, the Senate brought its bill, S. 625, to the floor. More than
300 germane and nongermane amendments were offered. Prior to bringing the bill to the
floor, the Senate defeated a cloture motion to limit debate.1
Many amendments, including a modified manager’s amendment,2 were passed.
Others failed or were tabled. Among the nongermane amendments that passed was one
which increased the federal minimum wage and amended provisions in the Internal
Revenue Code dealing with small business taxes, long term health care insurance, and
pensions.3 Another nongermane amendment, entitled the “Methamphetamine Anti-4
Proliferation Act,” involves criminal enforcement of drug laws.

1 145 Cong Rec. S11096 (daily edition Nov. 4, 1999).
2 S.Amdt. 2515, 145 Cong. Rec. S14490 (daily edition Nov. 10, 1999).
3 S.Amdt. 2547, id. at S14129 (daily edition Nov. 5, 1999).
4 S.Amdt. 2771, id. at S14193.
Congressional Research Service ˜ The Library of Congress

Two controversial amendments, requiring respectively nondischargeability of liability
for gun-related claims against gun manufacturers,5 and nondischargeable liability for
abortion clinic violence claims,6 were not brought up prior to adjournment. Although
Majority Leader Lott had filed a cloture motion to limit further debate, with a vote initially
scheduled for Tuesday, January 25, 2000,7 Senate leadership was able to work out an
agreement and the Senate is now poised to resume debate and vote on the bill during the
week of February 1, 2000.
Several of the amendments to S. 625 accepted by the Senate prior to adjournment
appear to be duplicative, and in the case of provisions to increase bankruptcy filing fees,
possibly unnecessary. If the Senate passes the bill, there will still be a significant variance
between its and the House’s version of bankruptcy reform that will need to be addressed
in a conference.
Selected amendments that passed prior to adjournment are surveyed below:
!Managers’ amendment. Extensive provisions designated as “technical
and conforming” are encompassed in the managers’ amendment to S.
625.8 These include provisions: incorporating a “safe harbor” in the
means test for a debtor earning less than the national or state median
household monthly income; directing the Executive Office of the U.S.
Trustee (EOUST) to evaluate and report on the Internal Revenue Service
(IRS) living standards; adding new criteria for nonprofit budget and credit
counseling agencies; addressing the treatment of domestic support
obligations in chapters 11 and 12; excluding from a debtor’s estate of
specified funds placed in an education individual retirement account or
used to purchase a tuition credit or certificate; addressing individual
filings under chapter 11; amending chapter 12 to include family fishermen,
as defined; and, amending the definition of a chapter 11 “small business
debtor” to one who owes no more than $3,000,000 rather than
$4,000,000 in indebtedness.
!Federal cap on homestead exemption. S. 625 as reported by the Senate
Judiciary Committee did not impose a cap on homestead exemptions in
opt-out states.9 The Senate passed an amendment which imposes a10
$100,000 cap on state homestead exemptions; it rejected amendments
to permit states to opt-out of the cap.

5 S.Amdt. 2658, id. at S14160.
6 S.Amdt. 2763, id. at S14191.
7 145 Cong. Rec. S15060 (daily edition Nov. 19, 1999).
8 S.Amdt. 2515 as modified, supra note 2.
9 For a brief survey comparison of the consumer provisions of S. 625 as reported by the Senate
Judiciary Committee and originally brought to the floor with H.R. 833, 106th Cong., 1st Sess., the
Bankruptcy Reform bill passed by the House, see CRS Report RS20196 (Aug. 9, 1999).
10 S.Amdt. 2516, 145 Cong. Rec. S14481 (daily edition, Nov. 10, 1999).

!Adjustments to the means test, authorized living expenses, and the
debtor’s estate. The means test would be liberalized to create a “safe
harbor” and permit a trustee to decline to challenge a debtor for abusing
the Code if the debtor’s monthly income exceeds 100% but does not
exceed 150% of the national or state median household income.11
Several amendments effected changes that identify specific items that
must be factored into the means test or permitted as living expenses. For
example, monthly expenses are amended to include: actual expenses paid
by the debtor for the care and support of an elderly, chronically ill, or
disabled household member or member of the debtor’s immediate family
who is not a dependent;12 and, those incurred to maintain the safety of the
debtor and the debtor’s family from family violence as defined under
federal law.13 The debtor’s estate is amended to exclude employer and
employee contributions to specified retirement and health insurance
plans.14 And debtors who are homeowners may include the cost of
utilities, maintenance, repair, and homeowner’s insurance and property
tax in living expenses.15 The Executive Office for the U.S. Trustees is
charged with developing appropriate bankruptcy-related living standards
within one year.16
!Jurisdictional pre-filing requirements. Debtors would not be subject to
a mandatory requirement to produce tax returns in the bankruptcy case,
but would be required to do so pursuant to an authorized request from a17
party in interest. Mandatory pre-filing credit counseling could take place
telephonically or on the Internet.18
!Attorney sanction. A debtor’s attorney will be required to reimburse a
trustee for the costs of prosecuting a motion demonstrating abuse of the
Code when counsel’s filing is found to be “frivolous” rather than “not
substantially justified.”19
!Consumer credit information disclosure requirements. Several
amendments were adopted which would amend the Truth in Lending Act,
15 U.S.C. § 1601 et seq. Open-ended credit plan electronic solicitations
would be required to be accompanied by information from the Federal

11 S.Amdt. 2661, id. at S14674 (daily edition Nov. 17, 1999).
12 S.Amdt. 2522 , id. at S14665 (daily edition Nov. 17, 1999).
13 S.Amdt. 2528, id. at S14111 (daily edition Nov. 5, 1999).
14 S.Amdt. 2664, id. at S14161.
15 S.Amdt. 2759, id. at S14189.
16 Id.
17 S.Amdt. 2529, id. at S14608 (daily edition Nov. 16, 1999).
18 S.Amdt. 2659, id. at S14679 (daily edition Nov. 17, 1999).
19 S.Amdt. 2743, id. at S14170 (daily edition Nov. 5, 1999).

Trade Commission (FTC) about selecting and using credit cards.20 Credit
statements would require a “minimum payment warning” to advise
customers about the financial consequences of making minimum payments
under open-ended credit plans, with additional information being provided
by the FTC, and regulatory implementation by the Board of Governors of
the Federal Reserve System. Additional disclosures would be required for
credit extensions secured by a dwelling, introductory rates, late payment21
deadlines and penalties, and Internet-based credit card solicitations. An
additional provision would prohibit specified retroactive finance charges
during applicable grace periods.22
!Criminal referrals for materially fraudulent bankruptcy schedules.
Bankruptcy courts would be directed to establish a procedure for the
referral of a fraudulently filed statement in a bankruptcy schedule to a
U.S. Attorney’s office or the FBI.23 Section 204 of S. 625 currently
contains a provision discouraging abusive and illegal reaffirmation
practices by giving these designated authorities responsibility for specified
enforcement activities.
!Dismissal of bankruptcy filings by criminals and drug traffickers. The
court would be directed to dismiss a voluntary chapter 7 filing of specified
criminals upon motion by a victim unless the debtor could establish that
the filing is necessary to satisfy a domestic support obligation.24
!Expanded student loan nondischargeability. Educational loans as defined
under § 221(e)(1) of the Internal Revenue Code would be added to those
that are currently nondischargeable except upon proof of “undue25
!Definition of “family farmer.” The jurisdictional debt limit for a chapter
12 “family farmer” would be raised.26 Currently a family farmer is
defined as an individual engaged in a farming operation whose debts do
not exceed $1,500,00, of which not less that 80 percent arises from the
farming operation, and who derives more than 50 percent of income from
farming. The debt limit would be raised to $3,000,000, of which not less27
than 50 percent is farming-related.

20 S.Amdt. 2530, id. at S14383 (daily edition, Nov. 9, 1999).
21 S.Amdt. 2655, id. at S14671-74 (daily edition, Nov. 17, 1999)
22 S.Amdt. 2768, id. at S14192 (daily edition Nov. 5, 1999).
23 S.Amdt. 1714, id. at S11150 (daily edition Sept. 21, 1999).
24 S.Amdt. 1715, id.
25 S.Amdt. 1727, id. at S11152.
26 Pursuant to P.L. 106-70 (Oct. 9, 1999), chapter 12 will expire on July 1, 2000.
27 S.Amdt. 2746, id. at S14171 (daily edition Nov. 5, 1999). See also, S.Amdt. 2745, id. at

!Addition of “family fishermen” to chapter 12. Chapter 12 would be
amended to include family fishermen engaged in commercial fishing
operations. A “family fisherman,” as defined, would be included under
chapter 12, with an additional statutory provision that would treat
specified liens on commercial fishing vessels as unsecured claims.28
!Health care and employee benefits. This amendment restores provisions
in Title XI of S. 625 which existed prior to their omission at committee
mark up. It amends the Code to address health care facility bankruptcies
and includes provisions conferring administrative priority status on the
costs of closing a facility, including disposal of patient records and
transfer of patients to different facilities; and court appointment of a
patient care ombudsman.29
!Specified prepetition wages made an administrative expense. Wages and
benefits awarded as “back pay” as a result of a debtor’s violation of
federal or state law are made administrative expenses regardless of when
the unlawful act occurred or the services were rendered.30
!Bankruptcy filing fees. An amendment to 28 U.S.C. § 1930 to increase
bankruptcy filing fees was accepted.31 However, filing fees were recently
increased pursuant to § 1000(a)(1) of the Consolidated Appropriations
Act, P.L. 106-113 (Nov. 29, 1999).
!In forma pauperis bankruptcy filings. Directs the Judicial Conference to
prescribe procedures for waiving chapter 7 filing and other fees for a
debtor whose income is less than 125 percent of the income official
poverty line as determined by the Office of Management and Budget.32
!Extension of small business reorganization period of exclusivity to file
a reorganization plan. The bill is amended to permit small businesses in
reorganization between 180 and 300 days of exclusivity to file a plan,
rather than 90 days.33

27 (...continued)
S14170, which prohibits specified chapter 12 plan modification based upon an increase in the
debtor’s disposable income.
28 S.Amdt. 1726, id. at S14355 (daily edition Nov. 9, 1999). See also, S.Amdt. 2515, supra note


29 S.Amdt. 1730, id. at S14266 (daily edition Nov. 8, 1999).
30 S.Amdt. 2665, id. at S14161 (daily edition Nov. 5, 1999).
31 S.Amdt. 1695, id. at S14664 (daily edition Nov. 17, 1999). See also, S. Amdt. 2515, supra.
32 S.Amdt. 1731, id. at S11162 (daily edition Sept. 21, 1999).
33 S.Amdt. 1725, id. at S11151.

!Jurisdiction over the trustee’s or debtor’s employment of professionals.
Amends 28 U.S.C. § 1334 to vest exclusive jurisdiction in federal district
court over all causes of action or claims involving 11 U.S.C. § 327, which34
governs the trustee’s employment of professionals.
!Bankruptcy Tax Provisions. The amendment substitutes current Title VII
of S. 625 entitled “Bankruptcy Tax Provisions” with a revised subtitle of35
the same name.
!Trustee compensation. Amends the Code to authorize trustee
compensation in cases that have been dismissed, converted, or denied.36
!Timing of trustee payments under chapter 13. If a debtor makes
payments into a chapter 13 plan that is not confirmed, the trustee must
return to the debtor payments not previously paid to creditors “and not37
yet due and owing.”
!Political committees and election activity. A political committee subject
to the Federal Election Commission’s jurisdiction would not be permitted38
to file in bankruptcy. Fines and penalties imposed under federal election
law would be nondischargeable.39

34 S. Amdt. 2478, id. at S14608 (daily edition Nov. 16, 1999).
35 S. Amdt. 2758, id. at S14383 (daily edition Nov. 9, 1999). See also, S. Amdt. 2514, id. at
S14097 (daily edition Nov. 5, 1999)(automatic stay does not apply to creation or perfection of
specified tax liens.)
36 S. Amdt. 2520, id. at S14104 (daily edition Nov. 5, 1999). See also, S. Amdt. 2654., id. at
37 S. Amdt. 1723, id. at S11151 (daily edition Sept. 21, 1999).
38 S. Amdt. 2749, id. at S14171 (daily edition Nov. 5, 1999).
39 S. Amdt. 2750, id.