House Report 115-130 - BANKRUPTCY JUDGESHIP ACT OF 2017

[House Report 115-130]
[From the U.S. Government Publishing Office]

115th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 115-130

======================================================================

BANKRUPTCY JUDGESHIP ACT OF 2017

_______

May 17, 2017.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Goodlatte, from the Committee on the Judiciary, submitted the
following

R E P O R T

[To accompany H.R. 2266]

The Committee on the Judiciary, to whom was referred the
bill (H.R. 2266) to amend title 28 of the United States Code to
authorize the appointment of additional bankruptcy judges; and
for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.

CONTENTS

Page
The Amendment.................................................... 1
Purpose and Summary.............................................. 3
Background and Need for the Legislation.......................... 4
Hearings......................................................... 8
Committee Consideration.......................................... 8
Committee Votes.................................................. 8
Committee Oversight Findings..................................... 8
New Budget Authority and Tax Expenditures........................ 8
Committee Cost Estimate.......................................... 9
Duplication of Federal Programs.................................. 9
Disclosure of Directed Rule Makings.............................. 9
Performance Goals and Objectives................................. 9
Advisory on Earmarks............................................. 9
Section-by-Section Analysis...................................... 9
Changes in Existing Law Made by the Bill, as Reported............ 10

The Amendment

The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Bankruptcy Judgeship Act of 2017''.

SEC. 2. CONVERSION OF THE TEMPORARY OFFICE OF BANKRUPTCY JUDGE TO THE
PERMANENT OFFICE OF BANKRUPTCY JUDGE IN CERTAIN
JUDICIAL DISTRICTS.

(a) District of Delaware.--
(1) The temporary office of 4 bankruptcy judges authorized
for the district of Delaware by section 1223(b)(1)(C) of Public
Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note), and extended by
section 2(a)(1)(C) of Public Law 112-121 (126 Stat. 346; 28
U.S.C. 152 note), is converted hereby to the permanent office
of bankruptcy judge and represented in the amendment made by
section 3(1) of this Act, and may be filled.
(2) The temporary office of bankruptcy judge authorized for
the district of Delaware by section 3(a)(3) of Public Law 102-
361 (106 Stat. 966; 28 U.S.C. 152 note), and extended by
section 1223(c)(1) of Public Law 109-8 (119 Stat. 198; 28
U.S.C. 152 note) and section 2(b)(1) of Public Law 112-121 (126
Stat. 347; 28 U.S.C. 152 note), is converted hereby to the
permanent office of bankruptcy judge and represented in the
amendment made by section 3(1) of this Act, and may be filled.
(b) Southern District of Florida.--The temporary office of 2
bankruptcy judges authorized for the southern district of Florida by
section 1223(b)(1)(D) of Public Law 109-8 (119 Stat. 197; 28 U.S.C. 152
note), and extended by section 2(a)(1)(D) of Public Law 112-121 (126
Stat. 346; 28 U.S.C. 152 note), is converted hereby to the permanent
office of bankruptcy judge and represented in the amendment made by
section 3(3) of this Act, and may be filled.
(c) District of Maryland.--The temporary office of 1 bankruptcy judge
first appointed as authorized for the district of Maryland by section
1223(b)(1)(F) of Public Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note),
and extended by section 2(a)(1)(F) of Public Law 112-121 (126 Stat.
346; 28 U.S.C. 152 note), is converted hereby to the permanent office
of bankruptcy judge and represented in the amendment made by section
3(4) of this Act, and may be filled.
(d) Eastern District of Michigan.--The temporary office of bankruptcy
judge authorized for the eastern district of Michigan by section
1223(b)(1)(G) of Public Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note),
and extended by section 2(a)(1)(G) of Public Law 112-121 (126 Stat.
346; 28 U.S.C. 152 note), is converted hereby to the permanent office
of bankruptcy judge and represented in the amendment made by section
3(5) of this Act, and may be filled.
(e) District of Nevada.--The temporary office of bankruptcy judge
authorized for the district of Nevada by section 1223(b)(1)(T) of
Public Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note), and extended by
section 2(a)(1)(Q) of Public Law 112-121 (126 Stat. 346; 28 U.S.C. 152
note), is converted hereby to the permanent office of bankruptcy judge
and represented in the amendment made by section 3(6) of this Act, and
may be filled.
(f) Eastern District of North Carolina.--The temporary office of
bankruptcy judge authorized for the eastern district of North Carolina
by section 1223(b)(1)(M) of Public Law 109-8 (119 Stat. 197; 28 U.S.C.
152 note), and extended by section 2(a)(1)(J) of Public Law 112-121
(126 Stat. 346; 28 U.S.C. 152 note), is converted hereby to the
permanent office of bankruptcy judge and represented in the amendment
made by section 3(7) of this Act, and may be filled.
(g) District of Puerto Rico.--
(1) The temporary office of bankruptcy judge authorized for
the district of Puerto Rico by section 1223(b)(1)(P) of Public
Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note), and extended by
section 2(a)(1)(M) of Public Law 112-121 (126 Stat. 346; 28
U.S.C. 152 note), is converted hereby to the permanent office
of bankruptcy judge and represented in the amendment made by
section 3(8) of this Act, and may be filled.
(2) The temporary office of bankruptcy judge authorized for
the district of Puerto Rico by section 3(a)(7) of Public Law
102-361 (106 Stat. 966; 28 U.S.C. 152 note), and extended by
section 1223(c)(1) of Public Law 109-8 (119 Stat. 198; 28
U.S.C. 152 note) and section 2(b)(1) of Public Law 112-121 (126
Stat. 347; 28 U.S.C. 152 note), is converted hereby to the
permanent office of bankruptcy judge and is represented in the
amendment made by section 3(8) of this Act, and may be filled.
(h) Eastern District of Virginia.--The temporary office of bankruptcy
judge authorized for the eastern district of Virginia by section
1223(b)(1)(R) of Public Law 109-8 (119 Stat. 197; 28 U.S.C. 152 note),
and extended by section 2(a)(1)(P) of Public Law 112-121 (126 Stat.
346; 28 U.S.C. 152 note), is converted hereby to the permanent office
of bankruptcy judge and is represented in the amendment made by section
3(9) of this Act, and may be filled.

SEC. 3. PERMANENT OFFICE OF BANKRUPTCY JUDGE AUTHORIZED.

To reflect the conversion of the temporary office of bankruptcy judge
to the permanent office of bankruptcy judge made by the operation of
section 2, and to authorize the appointment of additional bankruptcy
judges, section 152(a)(2) of title 28 of the United States Code is
amended--
(1) in the item relating to the district of Delaware by
striking ``1'' and inserting ``8'',
(2) in the item relating to the middle district of Florida by
striking ``8'' and inserting ``9'',
(3) in the item relating to the southern district of Florida
by striking ``5'' and inserting ``7'',
(4) in the item relating to the district of Maryland by
striking ``4'' and inserting ``5'',
(5) in the item relating to the eastern district of Michigan
by striking ``4'' and inserting ``6'',
(6) in the item relating to the district of Nevada by
striking ``3'' and inserting ``4'',
(7) in the item relating to the eastern district of North
Carolina by striking ``2'' and inserting ``3'',
(8) in the item relating to the district of Puerto Rico by
striking ``2'' and inserting ``4'', and
(9) in the item relating to the eastern district of Virginia
by striking ``5'' and inserting ``6''.

SEC. 4. BANKRUPTCY FEES.

(a) Amendments to Title 28 of the United States Code.--Section
1930(a)(6) of title 28 of the United States Code is amended--
(1) by striking ``(6) In'' and inserting ``(6)(A) Except as
provided in subparagraph (B), in'', and
(2) by adding at the end the following:
``(B) In any fiscal year, the quarterly fee payable for a
quarter in which disbursements equal or exceed $1,000,000 shall
be 1 percent of such disbursements or $250,000, whichever is
less, unless the balance in the United States Trustee System
Fund as of September 30 immediately preceding such fiscal year
exceeds $200,000,000.''.
(b) Deposits of Certain Fees for Fiscal Years 2018 Through 2022.--
Notwithstanding section 589a(b) of title 28 of the United States Code,
for each of the fiscal years 2018 through 2022--
(1) 97.5 percent of the fees collected under section
1930(a)(6) of such title shall be deposited as offsetting
collections to the appropriation ``United States Trustee System
Fund'', to remain available until expended, and
(2) 2.5 percent of the fees collected under section
1930(a)(6) of such title shall be deposited in the general fund
of the Treasury.
(c) Effective Date; Application Amendments.--
(1) Effective date.--Except as provided in paragraph (2),
this section shall take effect on July 1, 2017, or on the date
of the enactment of this Act, whichever is later.
(2) Application of amendments.--The amendments made by this
section shall apply to quarterly fees payable under section
1930(a)(6) of title 28 of the United States Code, as amended by
this section, for disbursements made in any calendar quarter
that begins on or after the effective date of the amendments
made by this section.

Purpose and Summary

H.R. 2266, the ``Bankruptcy Judgeship Act of 2017,'' as
amended, converts 14 temporary bankruptcy judgeships to
permanent status and authorizes four new bankruptcy judgeships
for certain federal judicial districts listed in the bill.
Temporary bankruptcy judgeships were authorized for these
districts by Pub. L. Nos. 102-361 and 109-8. The lapse date for
certain of these judgeships was extended by Pub. L. No. 109-8
and further extended by Pub. L. No. 112-121. All 14 of the
temporary judgeships converted under this bill are scheduled to
lapse on May 25, 2017. Additionally, the Bankruptcy Judgeship
Act provides for an increase in the U.S. Trustee's Quarterly
Fees for large chapter 11 cases.

Background and Need for the Legislation

A. BRIEF OVERVIEW OF TEMPORARY BANKRUPTCY JUDGESHIPS

The United States bankruptcy court is a court of limited
jurisdiction established pursuant to Article I of the
Constitution.\1\ The bankruptcy court is constituted to be a
``unit'' of the United States district court,\2\ which is
established under Article III of the Constitution.\3\ Pursuant
to the Bankruptcy Amendments and Federal Judgeship Act of
1984,\4\ bankruptcy judges are judicial officers of the United
States district court.\5\ In contrast to Article III judges
(who are nominated by the President and confirmed by the Senate
to life-tenured appointment),\6\ bankruptcy judges are
appointed for 14-year terms by the United States court of
appeals for the applicable circuit, with eligibility for
reappointment.\7\
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\1\U.S. CONST., art. I, Sec. 8, cl. 4.
\2\28 U.S.C. Sec. 151.
\3\U.S. CONST., art. III, Sec. 1.
\4\Pub. L. No. 98-353, 98 Stat. 333 (1984).
\5\28 U.S.C. Sec. 151.
\6\U.S. CONST., art. II, Sec. 2, cl. 2.
\7\28 U.S.C. Sec. 152(a)(1).
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Congress authorizes the number of bankruptcy judgeships.\8\
In 1992, Congress authorized the first 10 temporary bankruptcy
judgeships.\9\ In 2005, 28 additional temporary bankruptcy
judgeships were created and four of the 1992 temporary
bankruptcy judgeships were extended, under the Bankruptcy Abuse
Prevention and Consumer Protection Act (BAPCPA).\10\ Congress
provided that, at the expiration of the five years, the
additional judgeships would be lost following the first
vacancies thereafter, bringing the districts back to their
prior judgeship levels. After the lapse of these positions, new
legislation would be necessary to create any new judgeship
positions. As discussed in more detail below, filings have
stayed fairly consistent and these temporary judgeships have
required further extensions over the past several years.\11\
Despite these extensions, certain of the temporary bankruptcy
judgeships have expired prior to Congressional action,
including one temporary judgeship in the Southern District of
New York.
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\8\28 U.S.C. Sec. 152.
\9\Pub. L. No. 102-361, 106 Stat. 965 (1992).
\10\See Pub. L. No. 109-8, 119 Stat. 23 (2005).
\11\See generally Judicial Conference of the United States, 2017
Bankruptcy Judgeship Recommendations (on file with Committee).
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There are presently 29 temporary bankruptcy judgeships
scheduled to lapse on May 25, 2017.\12\ These temporary
judgeships comprise more than eight percent of the current
bankruptcy judgeships nationwide. A judge sitting in a
temporary position can sit in that district to fulfill his or
her term after May 25, 2017, and can seek reappointment.
However, if any sitting judge in that district retires, dies,
resigns, or becomes disabled after May 25, 2017, the temporary
position lapses, permanently reducing the number of judgeships
in that district.
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\12\See Pub. L. No. 112-121, 126 Stat. 349 (2012).
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B. JUDICIAL CONFERENCE RECOMMENDATIONS

Congressional authorization of bankruptcy judgeships is
typically premised on recommendations required to be made, from
time to time, by the Judicial Conference of the United
States,\13\ the principal policymaking body concerned with the
administration of the federal judiciary.\14\ On April 3, 2017,
the Judicial Conference made its most recent recommendation for
bankruptcy judgeship needs.\15\ The recommendation is for the
conversion of 14 temporary judgeships to permanent status and
the authorization of four new bankruptcy judgeships.\16\ The 14
judgeship conversions include the following: five for the
District of Delaware; two for the Southern District of Florida;
one for the District of Maryland; one for the Eastern District
of Michigan; one for the District of Nevada; one for the
Eastern District of North Carolina; two for the District of
Puerto Rico; and one for the Eastern District of Virginia. The
four additional permanent bankruptcy judgeships include the
following: two for the District of Delaware; one for the
Eastern District of Michigan; and one for the Middle District
of Florida.
---------------------------------------------------------------------------
\13\28 U.S.C. Sec. 152(b) (2). In addition, the Judicial Conference
must biennially conduct a ``comprehensive review'' of all judicial
districts for the purpose of assessing the ``continuing need'' for
authorized bankruptcy judges as well as for the elimination of any
authorized position when a vacancy occurs as a result of a judge's
resignation, retirement, removal, or death. 28 U.S.C. Sec. 152(b) (3).
For example, a bankruptcy judge may be removed for incompetence,
misconduct, neglect of duty or physical or mental disability. 28 U.S.C.
Sec. 152(e).
\14\See generally 28 U.S.C. Sec. 331.
\15\Letter from James C. Duff, Secretary, Judicial Conference of
the United States, to Chairman Bob Goodlatte, H. Comm. on the Judiciary
(Apr. 3, 2017) (on file with Committee).
\16\Judicial Conference of the United States, 2017 Bankruptcy
Judgeship Recommendations (on file with Committee).
---------------------------------------------------------------------------
The Judicial Conference's recommendation to Congress
concerning the need for bankruptcy judgeships is the product of
a multi-step process. First, a bankruptcy court submits a
request for additional bankruptcy judgeships to the district
court, which transmits the request to the circuit court. Then,
the circuit's judicial council considers the request and either
approves it, with or without modification, or disapproves it.
Approved requests are then sent to the Judicial Conference's
Bankruptcy Committee's Subcommittee on Judgeships for
consideration. The Subcommittee reviews the circuit court's
recommendation, conducts on-site evaluations of judicial needs,
and makes a recommendation to the full Bankruptcy Committee.
The Bankruptcy Committee reviews the Subcommittee's findings
and makes a recommendation to the full Judicial Conference.
Upon final approval, the recommendation is then transmitted by
the Judicial Conference to Congress in a biennial report.
It is the practice of the Judicial Conference to use a
``weighted case filing'' method to determine judicial needs.
This method assigns a case weight to each new case filed based
on its complexity, the number of parties involved, and other
data relevant to assessing how the case will affect judicial
workload. It should be noted that the Judicial Conference's
policy is to consider additional judgeships only for those
courts that request them. Thus, if a district's weighted
caseload would support requesting another judgeship but the
district does not submit a request, the Judicial Conference
will not recommend to Congress that the judgeship be created.
Additionally, if a vacancy arises that could be filled under
the authorizing statute, but the Judicial Conference determines
the need is not sufficient to fill that position or an
alternative approach is available, the Conference does not
recommend to Congress that it be filled.
Although bankruptcy filings nationwide have been declining
in recent years, the districts included in the Conference's
recommendation generally have experienced a sustained increase
in filings.\17\ Indeed, since the enactment of BAPCPA, the last
time additional judgeship resources were authorized for most of
the courts included in the Conference's recommendation, these
districts have seen weighted filings increase by more than 55
percent.\18\ These temporary judgeships have existed for at
least 12 years and the need does not show signs of abating.
Moreover, the Judicial Conference has demonstrated that, while
a district may have a permanent judgeship, it will not be
filled unless completely necessary. There are currently eight
vacancies which the Judicial Conference has not sought to be
filled and another 12 judgeships which may not be filled once a
vacancy arises.
---------------------------------------------------------------------------
\17\Letter from James C. Duff, Secretary, Judicial Conference of
the United States, to Chairman Bob Goodlatte, H. Comm. on the Judiciary
(Apr. 3, 2017) (on file with Committee).
\18\Id.
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C. LEGISLATIVE HISTORY

The Bankruptcy Judgeship Act of 2017 is very similar to a
bill introduced during the 111th Congress by then Judiciary
Chairman Lamar Smith (R-TX), Judiciary Ranking Member John
Conyers, Jr. (D-MI) and Rep. Steve Cohen (D-TN), which would
have authorized new permanent judgeships, converted some
temporary judgeships to permanent status, and extended some
temporary judgeships.\19\
---------------------------------------------------------------------------
\19\H.R. 4506, (111th Congress).
---------------------------------------------------------------------------
When a majority of the temporary judgeships were first
created, they were paid for through an increase in chapter 11
filing fees.\20\ However, through a unique interpretation by
the Congressional Budget Office, the funding from the fee
increases was not able to be used to offset the conversion or
further extension of the temporary judgeships once they hit
their initial expiration date.\21\ As such, when the temporary
judgeships were set to expire in 2011, a similar funding issue
arose. To offset the cost, H.R. 4506 increased filing fees in
chapter 7 and 13 bankruptcy cases by one dollar and in chapter
11 cases by $42.\22\ The bill passed the House by a vote of
345-5. The Senate did not vote on the bill.
---------------------------------------------------------------------------
\20\See Pub. L. No. 109-8, 119 Stat. 23 (2005).
\21\CBO's reasoning is based on the fact that the fee increases
were permanent but the judgeships were temporary. They focus on what
the law is at the time of the request. Because the current law includes
the permanent fee increase, it cannot be used to pay for the
conversions.
\22\H.R. 4506, 111th Congress.
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During the 112th Congress, Reps. Smith, Conyers and Cohen
introduced a scaled back bill which did not create any new
judgeships or convert any temporary judgeships, but extended
the existing temporary judgeships for an additional five
years.\23\ The extension was paid for once again by increasing
the filing fees in chapter 11 cases by $167.\24\ The bill
passed the House under suspension of the rules by voice vote,
passed the Senate by unanimous consent, and was signed into
law.\25\
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\23\H.R. 1021, 112th Congress.
\24\Id.
\25\Pub. L. No. 112-121, 126 Stat. 349 (2012).
---------------------------------------------------------------------------
In addition, the Judicial Conference previously requested
consideration of a one-year extension of seven judgeships in
the Fiscal Year 2017 appropriations bill. The Judicial
Conference identified districts that combine high caseloads
with even higher likelihood of judicial vacancies soon after
the lapse date. This group included two positions in the
District of Delaware, two in the Southern District of Florida,
one in the Eastern District of Virginia, one in the Eastern
District of Michigan and one in the District of Puerto Rico.
This request was made again in the Fiscal Year 2018
appropriations bill, for the same judgeships, but with a
corresponding two-year extension.

D. INCREASE IN QUARTERLY U.S. TRUSTEE FEES

Historically, the U.S. Trustee Program has been funded by
fees collected in bankruptcy cases.\26\ However, the manner in
which the fees are routed to the U.S. Trustee Program is a bit
circuitous. Simply, the U.S. Trustee Program gets appropriated
funds every year. Those appropriated funds are offset by past
fees collected through bankruptcy cases that are deposited into
a fund at Treasury. Most years, the fees collected exceed the
appropriated funds. However, in recent years, due to overall
declining bankruptcy filings nationwide, the appropriations
have exceeded the fees collected and the surplus created by
years past has been dwindling. However, as mentioned
previously, the districts included in the Conference's
recommendation generally have experienced a sustained increase
in filings. In response, over the past couple of years the U.S.
Trustee has proposed to increase one of the fees collected in
chapter 11 bankruptcy cases that is collected quarterly and
corresponds with the size of the company in bankruptcy. More
recently, this type of fee increase was included in the
President's ``skinny'' budget.\27\
---------------------------------------------------------------------------
\26\28 U.S.C. 589a. Approximately 38 percent of the Program's
revenue is derived from filing fees paid in chapters 7, 11, 12, and 13
cases while about 61 percent comes from quarterly fees in chapter 11
cases.
\27\See America First, A Budget Blueprint to Make America Great
Again, Office of Management and Budget, at 30, available at https://
www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/
2018_blueprint.pdf
---------------------------------------------------------------------------

E. THE BANKRUPTCY JUDGESHIP ACT

In the 115th Congress, Judiciary Ranking Member Conyers and
Senator Chris Coons (D-DE) introduced companion bills that
sought to implement the then-current recommendation of the
Judicial Conference for 16 conversions and 6 new
authorizations.\28\ Importantly, the bills did not include an
offset for the judgeships.
---------------------------------------------------------------------------
\28\See H.R. 136, 115th Cong.; S. 632, 115th Cong.
---------------------------------------------------------------------------
On May 1, 2017, Mr. Conyers, Judiciary Chairman Bob
Goodlatte (R-VA), Tom Marino (R-PA), and David N. Cicilline (D-
RI), introduced a new version of the Bankruptcy Judgeship Act
that contained the following changes: (a) alignment of the bill
with the Judicial Conference's latest recommendation of 14
conversions and four new appointments, which the committee
believe to be a sound recommendation; and, (b) inclusion of an
increase in the quarterly U.S. Trustee fees for large chapter
11 cases to serve as a funding offset for the cost of the
judgeships. The affected districts, number of judgeship
conversions, and new appointments under H.R. 2266 are as
follows:

------------------------------------------------------------------------
Judgeships New Judgeship
Judicial District Converted Authorization
------------------------------------------------------------------------
District of Puerto Rico................. 2
District of Delaware.................... 5 2
District of Maryland.................... 1 ..............
Eastern District of North Carolina...... 1
Eastern District of Virginia............ 1
Eastern District of Michigan............ 1 1
District of Nevada...................... 1
Middle District of Florida.............. .............. 1
Southern District of Florida............ 2
------------------------------------------------------------------------

The Bankruptcy Judgeship Act of 2017 also provides for an
increase in the U.S. Trustee fees for the largest chapter 11
debtors (i.e., excluding small businesses). The fee increase is
directly tied to the balance of the United States Trustee
System Fund and will only be applied when the balance of the
fund falls below a $200 million threshold. The funds generated
by the fee increase will cover both the costs of this bill and
separately needed funds for the operations of the U.S. Trustee
Program.

Hearings

The Committee on the Judiciary held no hearings on H.R.
2266.

Committee Consideration

On May 3, 2017, the Committee met in open session to
consider the bill H.R. 2266. Ranking Member Conyers offered an
amendment to correct certain typographical errors, clarify that
notwithstanding an intervening vacancy in an authorized
judgeship, the position can nevertheless be filled, and ensure
the U.S. Trustee fee increase will offset the cost of the new
and converted judgeships. Mr. Conyers' amendment was agreed to
by voice vote and H.R. 2266 was favorably reported, by voice
vote, a quorum being present.

Committee Votes

In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that there
were no recorded votes during the Committee's consideration of
H.R. 2266.

Committee Oversight Findings

In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.

New Budget Authority and Tax Expenditures

Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.

Committee Cost Estimate

A Congressional Budget Office cost estimate was not
available at the time of filing of this report. In compliance
with clause 3(d) of Rule XIII of the Rules of the House of
Representatives, the Committee estimates, based on informal
estimations made available to it by CBO, that enacting H.R.
2266 would increase direct spending by approximately $20
million over the next ten years. Therefore, pay-as-you-go
procedures apply. The Committee also expects, based on informal
estimates by CBO, that enacting H.R. 2266 would increase
revenues from quarterly U.S. Trustee filing fees by an amount
sufficient to fully offset the increases in direct spending
caused by the bill.

Duplication of Federal Programs

No provision of H.R. 2266 establishes or reauthorizes a
program of the Federal government known to be duplicative of
another Federal program, a program that was included in any
report from GAO to Congress pursuant to section 21 of Public
Law 111-139, or a program related to a program identified in
the most recent Catalog of Federal Domestic Assistance.

Disclosure of Directed Rule Makings

The Committee estimates that H.R. 2266 specifically directs
to be completed no specific rule makings within the meaning of
5 U.S.C. 551.

Performance Goals and Objectives

The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
2266 converts 14 temporary bankruptcy judgeships to permanent
status, authorizes four new bankruptcy judgeships, and
increases the U.S. Trustee's Quarterly Fees for large chapter
11 cases.

Advisory on Earmarks

In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 2266 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.

Section-by-Section Analysis

The following discussion describes the bill as reported by
the Committee.

Section 1. Short Title.

Section 1 sets forth the short title of the bill as the
``Bankruptcy Judgeship Act of 2017.''

Section 2. Conversion of the Temporary Office of Bankruptcy Judge to
the Permanent Office of Bankruptcy Judge in Certain Judicial
Districts.

Section 2(a) converts to permanent status the five
temporary judgeships in the District of Delaware. Section 2(b)
converts to permanent status the two temporary judgeships in
the Southern District of Florida. Section 2(c) converts to
permanent status the temporary bankruptcy judgeship for the
District of Maryland. Section 2(d) converts to permanent status
the temporary bankruptcy judgeship for the Eastern District of
Michigan. Section 2(e) converts to permanent status the
temporary bankruptcy judgeship for the District of Nevada.
Section 2(f) converts to permanent status the temporary
bankruptcy judgeship for the Eastern District of North
Carolina. Section 2(g) converts to permanent status the two
temporary bankruptcy judgeships for the District of Puerto
Rico. Section 2(h) converts to permanent status the bankruptcy
judgeship for the Eastern District of Virginia.

Section 3. Permanent Office of Bankruptcy Judge Authorized.

Section 3 amends section 152(a)(2) of title 28 of the
United States Code to reflect the changes in temporary to
permanent status as effectuated by section 2 of the bill. Also,
section 3 authorizes two additional permanent bankruptcy
judgeships for the District of Delaware, one additional
permanent bankruptcy judgeship for the Eastern District of
Michigan, and one additional permanent bankruptcy judgeship for
the Middle District of Florida.

Section 4. Bankruptcy Fees.

Section 4(a) amends section 1930(a)(6) of title 28 of the
United States Code to provide that the chapter 11 fee payable
for a quarter in which a debtor's disbursements equal or exceed
$1 million must be either one percent of such disbursements or
$250,000, whichever is less, in a fiscal year unless the
balance in the United States Trustee System Fund as of
September 30 preceding such fiscal year exceeds $200 million.
Section 4(b) provides that, notwithstanding section 589a(b)
of title 28 of the United States Code, for each of the fiscal
years 2018 through 2012, 97.5 percent of the quarterly U.S.
Trustee fees shall be deposited as offsetting collections to
the United States Trustee System Fund and 2.5 percent of the
quarterly U.S. Trustee fees shall be deposited in the general
fund of the Treasury.
Section 4(c)(1) provides that section 4 takes effect on
July 1, 2017, or the date of enactment, whichever is later,
subject to subsection 4(c)(2). Section 4(c)(2) provides that
section 4 applies to quarterly fees payable for any quarter
that begins on or after the effective date of this legislation.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):

TITLE 28, UNITED STATES CODE

* * * * * * *
PART I--ORGANIZATION OF COURTS

* * * * * * *

CHAPTER 6--BANKRUPTCY JUDGES

* * * * * * *

Sec. 152. Appointment of bankruptcy judges

(a)(1) Each bankruptcy judge to be appointed for a judicial
district, as provided in paragraph (2), shall be appointed by
the court of appeals of the United States for the circuit in
which such district is located. Such appointments shall be made
after considering the recommendations of the Judicial
Conference submitted pursuant to subsection (b). Each
bankruptcy judge shall be appointed for a term of fourteen
years, subject to the provisions of subsection (e). However,
upon the expiration of the term, a bankruptcy judge may, with
the approval of the judicial council of the circuit, continue
to perform the duties of the office until the earlier of the
date which is 180 days after the expiration of the term or the
date of the appointment of a successor. Bankruptcy judges shall
serve as judicial officers of the United States district court
established under Article III of the Constitution.
(2) The bankruptcy judges appointed pursuant to this
section shall be appointed for the several judicial
districts as follows:

----------------------------------------------------------------------------------------------------------------
Districts Judges
----------------------------------------------------------------------------------------------------------------
Alabama:
Northern 5
Middle 2
Southern 2
Alaska 2
Arizona 7
Arkansas:
Eastern and Western 3
California:
Northern 9
Eastern 6
Central 21
Southern 4
Colorado 5
Connecticut 3
Delaware [1] 8
District of Columbia 1
Florida:
Northern 1
Middle [8] 9
Southern [5] 7
Georgia:
Northern 8
Middle 3
Southern 2
Hawaii 1
Idaho 2
Illinois:
Northern 10
Central 3
Southern 1
Indiana:
Northern 3
Southern 4
Iowa:
Northern 2
Southern 2
Kansas 4
Kentucky:
Eastern 2
Western 3
Louisiana:
Eastern 2
Middle 1
Western 3
Maine 2
Maryland [4] 5
Massachusetts 5
Michigan:
Eastern [4] 6
Western 3
Minnesota 4
Mississippi:
Northern 1
Southern 2
Missouri:
Eastern 3
Western 3
Montana 1
Nebraska 2
Nevada [3] 4
New Hampshire 1
New Jersey 8
New Mexico 2
New York:
Northern 2
Southern 9
Eastern 6
Western 3
North Carolina:
Eastern [2] 3
Middle 2
Western 2
North Dakota 1
Ohio:
Northern 8
Southern 7
Oklahoma:
Northern 2
Eastern 1
Western 3
Oregon 5
Pennsylvania:
Eastern 5
Middle 2
Western 4
Puerto Rico [2] 4
Rhode Island 1
South Carolina 2
South Dakota 2
Tennessee:
Eastern 3
Middle 3
Western 4
Texas:
Northern 6
Eastern 2
Southern 6
Western 4
Utah 3
Vermont 1
Virginia:
Eastern [5] 6
Western 3
Washington:
Eastern 2
Western 5
West Virginia:
Northern 1
Southern 1
Wisconsin:
Eastern 4
Western 2
Wyoming 1

----------------------------------------------------------------------------------------------------------------

(3) Whenever a majority of the judges of any court
of appeals cannot agree upon the appointment of a
bankruptcy judge, the chief judge of such court shall
make such appointment.
(4) The judges of the district courts for the
territories shall serve as the bankruptcy judges for
such courts. The United States court of appeals for the
circuit within which such a territorial district court
is located may appoint bankruptcy judges under this
chapter for such district if authorized to do so by the
Congress of the United States under this section.
(b)(1) The Judicial Conference of the United States shall,
from time to time, and after considering the recommendations
submitted by the Director of the Administrative Office of the
United States Courts after such Director has consulted with the
judicial council of the circuit involved, determine the
official duty stations of bankruptcy judges and places of
holding court.
(2) The Judicial Conference shall, from time to
time, submit recommendations to the Congress regarding
the number of bankruptcy judges needed and the
districts in which such judges are needed.
(3) Not later than December 31, 1994, and not later
than the end of each 2-year period thereafter, the
Judicial Conference of the United States shall conduct
a comprehensive review of all judicial districts to
assess the continuing need for the bankruptcy judges
authorized by this section, and shall report to the
Congress its findings and any recommendations for the
elimination of any authorized position which can be
eliminated when a vacancy exists by reason of
resignation, retirement, removal, or death.
(c)(1) Each bankruptcy judge may hold court at such places
within the judicial district, in addition to the official duty
station of such judge, as the business of the court may
require.
(2)(A) Bankruptcy judges may hold court at such
places within the United States outside the judicial
district as the nature of the business of the court may
require, and upon such notice as the court orders, upon
a finding by either the chief judge of the bankruptcy
court (or, if the chief judge is unavailable, the most
senior available bankruptcy judge) or by the judicial
council of the circuit that, because of emergency
conditions, no location within the district is
reasonably available where the bankruptcy judges could
hold court.
(B) Bankruptcy judges may transact any
business at special sessions of court held
outside the district pursuant to this paragraph
that might be transacted at a regular session.
(C) If a bankruptcy court issues an order
exercising its authority under subparagraph
(A), the court--
(i) through the Administrative
Office of the United States Courts,
shall--
(I) send notice of such
order, including the reasons
for the issuance of such order,
to the Committee on the
Judiciary of the Senate and the
Committee on the Judiciary of
the House of Representatives;
and
(II) not later than 180 days
after the expiration of such
court order submit a brief
report to the Committee on the
Judiciary of the Senate and the
Committee on the Judiciary of
the House of Representatives
describing the impact of such
order, including--
(aa) the reasons for
the issuance of such
order;
(bb) the duration of
such order;
(cc) the impact of
such order on
litigants; and
(dd) the costs to
the judiciary resulting
from such order; and
(ii) shall provide reasonable notice
to the United States Marshals Service
before the commencement of any special
session held pursuant to such order.
(d) With the approval of the Judicial Conference and of each
of the judicial councils involved, a bankruptcy judge may be
designated to serve in any district adjacent to or near the
district for which such bankruptcy judge was appointed.
(e) A bankruptcy judge may be removed during the term for
which such bankruptcy judge is appointed, only for
incompetence, misconduct, neglect of duty, or physical or
mental disability and only by the judicial council of the
circuit in which the judge's official duty station is located.
Removal may not occur unless a majority of all of the judges of
such council concur in the order of removal. Before any order
of removal may be entered, a full specification of charges
shall be furnished to such bankruptcy judge who shall be
accorded an opportunity to be heard on such charges.

* * * * * * *

PART V--PROCEDURE

* * * * * * *

CHAPTER 123--FEES AND COSTS

* * * * * * *

Sec. 1930. Bankruptcy fees

(a) The parties commencing a case under title 11 shall pay
to the clerk of the district court or the clerk of the
bankruptcy court, if one has been certified pursuant to section
156(b) of this title, the following filing fees:
(1) For a case commenced under--
(A) chapter 7 of title 11, $245, and
(B) chapter 13 of title 11, $235.
(2) For a case commenced under chapter 9 of title
11, equal to the fee specified in paragraph (3) for
filing a case under chapter 11 of title 11. The amount
by which the fee payable under this paragraph exceeds
$300 shall be deposited in the fund established under
section 1931 of this title.
(3) For a case commenced under chapter 11 of title
11 that does not concern a railroad, as defined in
section 101 of title 11, $1,167.
(4) For a case commenced under chapter 11 of title
11 concerning a railroad, as so defined, $1,000.
(5) For a case commenced under chapter 12 of title
11, $200.
[(6) In] (6) (A) Except as provided in subparagraph
(B), in addition to the filing fee paid to the clerk, a
quarterly fee shall be paid to the United States
trustee, for deposit in the Treasury, in each case
under chapter 11 of title 11 for each quarter
(including any fraction thereof) until the case is
converted or dismissed, whichever occurs first. The fee
shall be $325 for each quarter in which disbursements
total less than $15,000; $650 for each quarter in which
disbursements total $15,000 or more but less than
$75,000; $975 for each quarter in which disbursements
total $75,000 or more but less than $150,000; $1,625
for each quarter in which disbursements total $150,000
or more but less than $225,000; $1,950 for each quarter
in which disbursements total $225,000 or more but less
than $300,000; $4,875 for each quarter in which
disbursements total $300,000 or more but less than
$1,000,000; $6,500 for each quarter in which
disbursements total $1,000,000 or more but less than
$2,000,000; $9,750 for each quarter in which
disbursements total $2,000,000 or more but less than
$3,000,000; $10,400 for each quarter in which
disbursements total $3,000,000 or more but less than
$5,000,000; $13,000 for each quarter in which
disbursements total $5,000,000 or more but less than
$15,000,000; $20,000 for each quarter in which
disbursements total $15,000,000 or more but less than
$30,000,000; $30,000 for each quarter in which
disbursements total more than $30,000,000. The fee
shall be payable on the last day of the calendar month
following the calendar quarter for which the fee is
owed.
(B) In any fiscal year, the quarterly fee payable
for a quarter in which disbursements equal or exceed
$1,000,000 shall be 1 percent of such disbursements or
$250,000, whichever is less, unless the balance in the
United States Trustee System Fund as of September 30
immediately preceding such fiscal year exceeds
$200,000,000.
(7) In districts that are not part of a United
States trustee region as defined in section 581 of this
title, the Judicial Conference of the United States may
require the debtor in a case under chapter 11 of title
11 to pay fees equal to those imposed by paragraph (6)
of this subsection. Such fees shall be deposited as
offsetting receipts to the fund established under
section 1931 of this title and shall remain available
until expended.
An individual commencing a voluntary case or a joint case under
title 11 may pay such fee in installments. For converting, on
request of the debtor, a case under chapter 7, or 13 of title
11, to a case under chapter 11 of title 11, the debtor shall
pay to the clerk of the district court or the clerk of the
bankruptcy court, if one has been certified pursuant to section
156(b) of this title, a fee of the amount equal to the
difference between the fee specified in paragraph (3) and the
fee specified in paragraph (1).
(b) The Judicial Conference of the United States may
prescribe additional fees in cases under title 11 of the same
kind as the Judicial Conference prescribes under section
1914(b) of this title.
(c) Upon the filing of any separate or joint notice of
appeal or application for appeal or upon the receipt of any
order allowing, or notice of the allowance of, an appeal or a
writ of certiorari $5 shall be paid to the clerk of the court,
by the appellant or petitioner.
(d) Whenever any case or proceeding is dismissed in any
bankruptcy court for want of jurisdiction, such court may order
the payment of just costs.
(e) The clerk of the court may collect only the fees
prescribed under this section.
(f)(1) Under the procedures prescribed by the Judicial
Conference of the United States, the district court or the
bankruptcy court may waive the filing fee in a case under
chapter 7 of title 11 for an individual if the court determines
that such individual has income less than 150 percent of the
income official poverty line (as defined by the Office of
Management and Budget, and revised annually in accordance with
section 673(2) of the Omnibus Budget Reconciliation Act of
1981) applicable to a family of the size involved and is unable
to pay that fee in installments. For purposes of this
paragraph, the term ``filing fee'' means the filing fee
required by subsection (a), or any other fee prescribed by the
Judicial Conference under subsections (b) and (c) that is
payable to the clerk upon the commencement of a case under
chapter 7.
(2) The district court or the bankruptcy court may waive for
such debtors other fees prescribed under subsections (b) and
(c).
(3) This subsection does not restrict the district court or
the bankruptcy court from waiving, in accordance with Judicial
Conference policy, fees prescribed under this section for other
debtors and creditors.

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