Bankruptcy Administration Improvement Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 8895 To ensure funding of the United States trustees, extend temporary bankruptcy judgeships, and for other purposes. IN THE HOUSE OF REPRESENTATIVES DECEMBER 8, 2020 Mr. CICILLINE (for himself, Mr. SENSENBRENNER, and Mr. PERLMUTTER) in- troduced the following bill; which was referred to the Committee on the Judiciary A BILL To ensure funding of the United States trustees, extend temporary bankruptcy judgeships, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Bankruptcy Adminis- 4 tration Improvement Act of 2020’’. 5 SEC. 2. FINDINGS AND PURPOSE. 6 (a) FINDINGS.—Congress finds the following: 7 (1) Because of the importance of the goal that 8 the bankruptcy system is self-funded, at no cost to 9 the taxpayer, Congress has closely monitored the 10 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 8895 IH funding needs of the bankruptcy system, including 1 by requiring periodic reporting by the Attorney Gen- 2 eral regarding the United States Trustee System 3 Fund. 4 (2) Congress has amended the various bank- 5 ruptcy fees as necessary to ensure that the bank- 6 ruptcy system remains self-supporting, while also 7 fairly allocating the costs of the system among those 8 who use the system. 9 (3) Because the bankruptcy system is inter- 10 connected, the result has been a system of fees, in- 11 cluding filing fees, quarterly fees in chapter 11 12 cases, and other fees, that together fund the courts, 13 judges, United States trustees, and chapter 7 case 14 trustees necessary for the bankruptcy system to 15 function. 16 (4) This Act and the amendments made by this 17 Act— 18 (A) ensure adequate funding of the United 19 States trustees, supports the preservation of ex- 20 isting bankruptcy judgeships that are urgently 21 needed to handle existing and anticipated in- 22 creases in business and consumer caseloads, 23 and provides long-overdue additional compensa- 24 tion for chapter 7 case trustees whose caseloads 25 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 8895 IH include chapter 11 reorganization cases that 1 were converted to chapter 7 liquidation cases; 2 and 3 (B) confirm the longstanding intention of 4 Congress that quarterly fee requirements re- 5 main consistent across all Federal judicial dis- 6 tricts. 7 (b) PURPOSE.—The purpose of this Act and the 8 amendments made by this Act is to further the long-stand- 9 ing goal of Congress of ensuring that the bankruptcy sys- 10 tem is self-funded, at no cost to the taxpayer. 11 SEC. 3. UNITED STATES TRUSTEE SYSTEM FUND; BANK- 12 RUPTCY FEES. 13 (a) DEPOSITS OF CERTAIN FEES FOR FISCAL YEARS 14 2021 THROUGH 2026.—Notwithstanding section 589a(b) 15 of title 28, United States Code, for each of fiscal years 16 2021 through 2026— 17 (1) the fees collected under section 1930(a)(6) 18 of such title, less the amount specified in subpara- 19 graph (2), shall be deposited as specified in sub- 20 section (b); and 21 (2) $5,400,000 of the fees collected under sec- 22 tion 1930(a)(6) of such title shall be deposited in 23 the general fund of the Treasury. 24 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 8895 IH (b) UNITED STATES TRUSTEE SYSTEM FUND.—Sec- 1 tion 589a of title 28, United States Code, is amended by 2 adding at the end the following: 3 ‘‘(f)(1) During each of fiscal years 2021 through 4 2026 and notwithstanding subsections (b) and (c), the fees 5 collected under section 1930(a)(6), less the amount speci- 6 fied in paragraph (2), shall be deposited as follows, in the 7 following order: 8 ‘‘(A) First, the amounts specified in the De- 9 partment of Justice appropriations for that fiscal 10 year, shall be deposited as discretionary offsetting 11 collections to the ‘‘United States Trustee System 12 Fund’’, pursuant to subsection (a), to remain avail- 13 able until expended. 14 ‘‘(B) Second, the amounts determined annually 15 by the Director of the Administrative Office of the 16 United States Courts that are necessary to reim- 17 burse the judiciary for the costs of administering 18 payments under section 330(e) of title 11, shall be 19 deposited as mandatory offsetting collections to the 20 ‘United States Trustee System Fund’, and trans- 21 ferred and deposited into the special fund estab- 22 lished under section 1931(a), and notwithstanding 23 subsection (a), shall be available for expenditure 24 without further appropriation. 25 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 8895 IH ‘‘(C) Third, the amounts determined annually 1 by the Director of the Administrative Office of the 2 United States Courts that are necessary to pay 3 trustee compensation authorized by section 4 330(e)(2) of title 11, shall be deposited as manda- 5 tory offsetting collections to the ‘United States 6 Trustee System Fund’, and transferred and depos- 7 ited into the Chapter 7 Trustee Fund established 8 under section 330(e) of title 11 for payment to 9 trustees serving in cases under chapter 7 of title 11 10 (in addition to the amounts paid under section 11 330(b) of title 11), in accordance with that section, 12 and notwithstanding subsection (a), shall be avail- 13 able for expenditure without further appropriation. 14 ‘‘(D) Fourth, any remaining amounts shall be 15 deposited as discretionary offsetting collections to 16 the ‘United States Trustee System Fund’, to remain 17 available until expended. 18 ‘‘(2) Notwithstanding subsection (b), for each of fis- 19 cal years 2021 through 2026, $5,400,000 of the fees col- 20 lected under section 1930(a)(6) shall be deposited in the 21 general fund of the Treasury.’’. 22 (c) COMPENSATION OF OFFICERS.—Section 330 of 23 title 11, United States Code, is amended by adding at the 24 end the following: 25 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 8895 IH ‘‘(e)(1) There is established a fund in the Treasury 1 of the United States, to be known as the ‘Chapter 7 Trust- 2 ee Fund’, which shall be administered by the Director of 3 the Administrative Office of the United States Courts. 4 ‘‘(2) Deposits into the Chapter 7 Trustee Fund under 5 section 589a(f)(1)(C) of title 28 shall be available until 6 expended for the purposes described in paragraph (3). 7 ‘‘(3) For fiscal years 2021 through 2026, the Chapter 8 7 Trustee Fund shall be available to pay the trustee serv- 9 ing in a case that is filed under chapter 7 or a case that 10 is converted to a chapter 7 case in the most recent fiscal 11 year (referred to in this subsection as a ‘chapter 7 case’) 12 the amount described in paragraph (4) for the chapter 7 13 case in which the trustee has rendered services in that fis- 14 cal year. 15 ‘‘(4) The amount described in this paragraph shall 16 be the lesser of— 17 ‘‘(A) $60; or 18 ‘‘(B) a pro rata share, for each chapter 7 case, 19 of the fees collected under section 1930(a)(6) of title 20 28 and deposited to the United States Trustee Sys- 21 tem Fund under section 589a(f)(1) of title 28, less 22 the amounts specified in section 589a(f)(1)(A) and 23 (B) of title 28. 24 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 8895 IH ‘‘(5) The payment received by a trustee under para- 1 graph (3) shall be paid in addition to the amount paid 2 under subsection (b). 3 ‘‘(6) Not later than September 30, 2021, the Director 4 of the Administrative Office of the United States Courts 5 shall promulgate regulations for the administration of this 6 subsection.’’. 7 (d) BANKRUPTCY FEES.—Section 1930(a) of title 28, 8 United States Code, is amended— 9 (1) by striking paragraph (6)(B) and inserting 10 the following: 11 ‘‘(B)(i) During the 5-year period beginning 12 on January 1, 2021, in addition to the filing fee 13 paid to the clerk, a quarterly fee shall be paid 14 to the United States trustee, for deposit in the 15 Treasury, in each open and reopened case 16 under chapter 11 of title 11, other than under 17 subchapter V, for each quarter (including any 18 fraction thereof) until the case is closed, con- 19 verted, or dismissed, whichever occurs first. 20 ‘‘(ii) The fee shall be the greater of— 21 ‘‘(I) 0.4 percent of disbursements or 22 $250 for each quarter in which disburse- 23 ments total less than $1,000,000; and 24 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 8895 IH ‘‘(II) 0.8 percent of disbursements but 1 not more than $250,000 for each quarter 2 in which disbursements total at least 3 $1,000,000. 4 ‘‘(iii) The fee shall be payable on the last 5 day of the calendar month following the cal- 6 endar quarter for which the fee is owed.’’; and 7 (2) in paragraph (7), in the first sentence, by 8 striking ‘‘may’’ and inserting ‘‘shall’’. 9 (e) APPLICABILITY.— 10 (1) IN GENERAL.—Except as provided in para- 11 graph (2), the amendments made by this section 12 shall take effect on the date of enactment of this 13 Act. 14 (2) EXCEPTIONS.— 15 (A) COMPENSATION OF OFFICERS.—The 16 amendments made by subsection (c) shall apply 17 to any case filed on or after the date of enact- 18 ment of this Act— 19 (i) under chapter 7 of title 11, United 20 States Code; or 21 (ii)(I) under chapter 11, 12, or 13 of 22 that title; and 23 (II) converted to a chapter 7 case 24 under that title. 25 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 8895 IH (B) BANKRUPTCY FEES.—The amend- 1 ments made by subsection (d) shall apply to— 2 (i) any case pending under chapter 11 3 of title 11, United States Code, on or after 4 the date of enactment of this Act; and 5 (ii) quarterly fees payable under sec- 6 tion 1930(a)(6) of title 28, United States 7 Code, as amended by subsection (d), for 8 disbursements made in any calendar quar- 9 ter that begins on or after the date of en- 10 actment of this Act. 11 SEC. 4. EXTENSION OF TEMPORARY OFFICE OF BANK- 12 RUPTCY JUDGES IN CERTAIN JUDICIAL DIS- 13 TRICTS. 14 (a) TEMPORARY OFFICE OF BANKRUPTCY JUDGES 15 AUTHORIZED BY THE BANKRUPTCY JUDGESHIP ACT OF 16 2017.— 17 (1) EXTENSIONS.—The temporary office of 18 bankruptcy judges authorized by section 1003(a) of 19 the Bankruptcy Judgeship Act of 2017 (28 U.S.C. 20 152 note) for the district of Delaware and the east- 21 ern district of Michigan are extended until the appli- 22 cable vacancy specified in paragraph (2) in the office 23 of a bankruptcy judge for the respective district oc- 24 curs. 25 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 8895 IH (2) VACANCIES.— 1 (A) DISTRICT OF DELAWARE.—The 1st 2 and 2d vacancies in the office of a bankruptcy 3 judge for the district of Delaware— 4 (i) occurring 5 years or more after the 5 date established by section 1003(b)(1) of 6 the Bankruptcy Judgeship Act of 2017 (28 7 U.S.C. 152 note), and 8 (ii) resulting from the death, retire- 9 ment, resignation, or removal of a bank- 10 ruptcy judge, 11 shall not be filled. 12 (B) EASTERN DISTRICT OF MICHIGAN.— 13 The 1st vacancy in the office of a bankruptcy 14 judge for the eastern district of Michigan— 15 (i) occurring 5 years or more after the 16 date established by section 1003(b)(3) of 17 the Bankruptcy Judgeship Act of 2017 (28 18 U.S.C. 152 note), and 19 (ii) resulting from the death, retire- 20 ment, resignation, or removal of a bank- 21 ruptcy judge, 22 shall not be filled. 23 (3) APPLICABILITY OF OTHER PROVISIONS.— 24 Except as provided in paragraphs (1) and (2), all 25 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 8895 IH other provisions of section 1003 of the Bankruptcy 1 Judgeship Act of 2017 (28 U.S.C. 152 note) remain 2 applicable to the temporary office of bankruptcy 3 judges referred to in paragraph (1). 4 (b) TEMPORARY OFFICE OF BANKRUPTCY JUDGES 5 AUTHORIZED BY THE BANKRUPTCY JUDGESHIP ACT OF 6 2005 AND EXTENDED BY THE TEMPORARY BANKRUPTCY 7 JUDGESHIPS EXTENSION ACT OF 2012 AND THE BANK- 8 RUPTCY JUDGESHIP ACT OF 2017.— 9 (1) EXTENSIONS.—The temporary office of 10 bankruptcy judges authorized for the following dis- 11 tricts by section 1223(b) of the Bankruptcy Judge- 12 ship Act of 2005 (28 U.S.C. 152 note), extended by 13 section 2(a) of the Temporary Bankruptcy Judge- 14 ships Extension Act of 2012 (28 U.S.C. 152 note), 15 and further extended by section 1002(a) of the 16 Bankruptcy Judgeship Act of 2017 (28 U.S.C. 152 17 note) are extended until the applicable vacancy spec- 18 ified in paragraph (2) in the office of a bankruptcy 19 judge for the respective district occurs: 20 (A) The district of Delaware. 21 (B) The southern district of Florida. 22 (C) The district of Maryland. 23 (D) The eastern district of Michigan. 24 (E) The district of Nevada. 25 VerDate Sep 11 2014 16:11 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H8895.IH H8895 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 8895 IH (F) The eastern district of North Carolina. 1 (G) The district of Puerto Rico. 2 (H) The eastern district of Virginia. 3 (2) VACANCIES.— 4 (A) SINGLE VACANCIES.—Except as pro- 5 vided in subparagraphs (B), (C), (D), (E), and 6 (F), the 1st vacancy in the office of a bank- 7 ruptcy judge for each district specified in para- 8 graph (1)— 9 (i) occurring 5 years or more after the 10 date established by section 1002(a)(2) of 11 the Bankruptcy Judgeship Act of 2017 (28 12 U.S.C. 152 note), and 13 (ii) resulting from the death, retire- 14 ment, resignation, or removal of a bank- 15 ruptcy judge, 16 shall not be filled. 17 (B) DISTRICT OF DELAWARE.—The 3d, 18 4th, 5th, and 6th vacancies in the office of a 19 bankruptcy judge for the district of Delaware— 20 (i) occurring 5 years or more after the 21 date established by section 1002(a)(2) of 22 Bankruptcy Judgeship Act of 2017 (28 23 U.S.C. 152 note), and 24 [Text truncated for display. 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