[House Report 111-430]
[From the U.S. Government Publishing Office]
111th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 111-430
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BANKRUPTCY JUDGESHIP ACT OF 2010
_______
March 9, 2010.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Conyers, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 4506]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 4506) to authorize the appointment of additional
bankruptcy judges, and for other purposes, having considered
the same, reports favorably thereon without amendment and
recommends that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for the Legislation.......................... 2
Hearings......................................................... 7
Committee Consideration.......................................... 8
Committee Votes.................................................. 8
Committee Oversight Findings..................................... 8
New Budget Authority and Tax Expenditures........................ 8
Congressional Budget Office Cost Estimate........................ 8
Performance Goals and Objectives................................. 11
Constitutional Authority Statement............................... 11
Advisory on Earmarks............................................. 11
Section-by-Section Analysis...................................... 11
Changes in Existing Law Made by the Bill, as Reported............ 12
Purpose and Summary
H.R. 4506 authorizes 13 new bankruptcy judgeships on a
permanent basis, converts 22 temporarily authorized bankruptcy
judgeships to permanent status, and extends the temporary
authorization for 2 bankruptcy judgeships for another 5 years.
These additional bankruptcy judgeships reflect the
recommendations of the Judicial Conference of the United States
(``Judicial Conference'').\1\ H.R. 4506 also increases
bankruptcy filing fees by $1.00 for filings under Chapter 7 and
Chapter 13 of the Bankruptcy Code and by $42.00 for filings
under Chapter 11 of the Code to pay for the 13 new permanent
bankruptcy judgeships.
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\1\The Judicial Conference is charged with making policy concerning
the administration of the Federal courts. 28 U.S.C. Sec. 331 (2006).
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Background and Need for the Legislation
A. AUTHORITY AND FUNCTION OF BANKRUPTCY JUDGES
Congress conferred jurisdiction over bankruptcy issues upon
Federal district courts, with bankruptcy courts deriving their
power from that jurisdictional grant and functioning as units
of the district court.\2\ Unlike Federal district or circuit
judges or Supreme Court justices, bankruptcy judges are not
appointed pursuant to Article III of the Constitution, and
therefore lack the tenure and salary protections that Article
III judges enjoy.\3\ Also, unlike Article III judges,
bankruptcy judges are not chosen by the President subject to
Senate confirmation.\4\ Instead, bankruptcy judges are
appointed to 14-year terms by the Court of Appeals for each
circuit, and serve as judicial officers of the district
court.\5\ Bankruptcy judges may be reappointed upon the
expiration of their terms, and can be removed prior to the
expiration of their terms only for incompetence, misconduct, or
disability, and only by the judicial council of the circuit in
which the judge's official duty station is located.\6\ A
bankruptcy judgeship can be authorized on either a permanent or
temporary basis.\7\
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\2\28 U.S.C. Sec. 151 (2006).
\3\U.S. Const., art. III, Sec. 1.
\4\See U.S. Const., art. II, Sec. 2 (outlining President's judicial
appointment power and Senate confirmation requirement).
\5\28 U.S.C. Sec. 152(a)(1) (2006).
\6\28 U.S.C. Sec. 152(a)(1), 152(e) (2006).
\7\See 28 U.S.C. Sec. 152 hist. nn. (2006) (noting temporary
bankruptcy judgeships authorized in 2005 and 1992). All bankruptcy
judges are appointed for 14-year terms. The term ``temporary
judgeships'' refer to offices of bankruptcy judges that are authorized
on a temporary basis (usually 5 years). During that temporary
authorization period, any vacancy in that office can be filled. After
that time period lapses, the first vacancy in the office cannot be
filled unless Congress extends the temporary authorization or converts
the temporary authorization to a permanent one. Bankruptcy Judgeship
Needs: Hearing Before the Subcomm. on Commercial and Admin. Law of the
H. Comm. on the Judiciary, 111th Cong. 3, n.1 (2009) [hereinafter
``Bankruptcy Judgeship Hearing''] (statement of the Honorable Barbara
M.G. Lynn, Chair, Committee on the Administration of the Bankruptcy
System, Judicial Conference of the United States [hereinafter ``Lynn
Statement'']).
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Bankruptcy judges receive compensation that is equal to 92
percent of a district judge's salary.\8\ They are also
authorized to hire law clerks and other assistants.\9\
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\8\28 U.S.C. Sec. 153 (2006).
\9\28 U.S.C. Sec. 156 (2006).
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The scope of issues that a bankruptcy judge must address
can be somewhat broad. Jurisdiction over bankruptcy matters is
conferred on Federal district courts by 28 U.S.C. Sec. 1334,
while 28 U.S.C. Sec. 157 provides for the referral of
bankruptcy matters from district courts to bankruptcy courts.
With respect to the bankruptcy case (i.e., the bankruptcy
petition and its adjudication) and proceedings ``arising
under'' the Bankruptcy Code or ``arising in'' a bankruptcy
case, bankruptcy judges can issue final determinations and the
role of the district court is limited to appellate review.\10\
With respect to matters that are ``related to'' a bankruptcy
case (e.g., determination of lien priority under state law),
bankruptcy judges can issue recommendations, but only the
district court can enter a final order or judgment.\11\
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\10\28 U.S.C. Sec. Sec. 157(b)(1), 158 (2006).
\11\28 U.S.C. Sec. 157(c)(1) (2006). Parties, however, may consent
to allow the bankruptcy court to make a final disposition of these
matters. 28 U.S.C. Sec. 157(c)(2) (2006).
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B. NEED FOR ADDITIONAL BANKRUPTCY JUDGES
1. Growing Volume and Complexity of Cases
In testimony before the House Committee on the Judiciary
Subcommittee on Commercial and Administrative Law
(``Subcommittee'') in her capacity as Chair of the Judicial
Conference's Committee on the Administration of the Bankruptcy
System (``Bankruptcy Committee''), United States District Judge
Barbara M.G. Lynn stated that the need for additional
bankruptcy judgeships is ``critical, with filings increasing to
near-record levels and the bankruptcy courts in peril of losing
many of their judicial resources.''\12\ Recent bankruptcy
statistics appear to confirm the growing volume of cases.
According to the Administrative Office of the United States
Courts, bankruptcy filings increased from 1,042,086 in fiscal
year 2008 to 1,402,816 in fiscal year 2009, a 34.5%
increase.\13\ Between fiscal year 2007 and fiscal year 2008,
bankruptcy filings increased by 30.2%.\14\
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\12\Bankruptcy Judgeship Hearing (Lynn Statement at 2).
\13\Administrative Office of the United States Courts, Bankruptcy
Statistics, 2008-2009 Fiscal Year Comparison, available at http://
www.uscourts.gov/bnkrpctystats/statistics.htm#fiscal.
\14\Id.
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The enactment of the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 (``BAPCPA'')\15\ further added
to judges' workload. As Chief Judge David S. Kennedy of the
United States Bankruptcy Court for the Western District of
Tennessee testified before the Subcommittee, the workload of
bankruptcy judges has become ``more complex and more time
consuming'' in part because of the ``approximately 35
additional proceedings (i.e., new motions) that have been added
by virtue of the enactment of [BAPCPA].''\16\ Judge Lynn
concurred, testifying that ``BAPCPA increased the work required
of bankruptcy judges in each case'' and that case ``filings
have increased steadily since BAPCPA took effect.''\17\
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\15\Pub. L. No. 109-8, 119 Stat. 23 (2005).
\16\Bankruptcy Judgeship Hearing (statement of the Honorable David
S. Kennedy, Chief Judge, United States Bankruptcy Court for the Western
District of Tennessee, on behalf of the National Conference of
Bankruptcy Judges [hereinafter ``Kennedy Statement''] at 4 and
attachment A).
\17\Id. (Lynn Statement at 3).
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In addition to the growing volume of work, Judge Lynn also
noted that bankruptcy courts ``now face bankruptcy cases that
are more complex and time consuming than anything previously
handled. Cases such as Chrysler, Circuit City, and other
national and international corporate reorganizations consume a
tremendous amount of a bankruptcy court's time.''\18\ Similar
recent examples of complex, high-profile business bankruptcy
cases include the bankruptcies of CIT Group, General Motors,
Lehman Brothers, Linens 'n Things, Delphi, and Delta Air
Lines.\19\
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\18\Id. at 4.
\19\Tomoeh Murakami Tse, Taxpayers on Hook as Some Bailed Out Firms
Prove Frail, Washington Post, Nov. 16, 2009, available at http://
www.washingtonpost.com/wp-dyn/content/article/2009/11/15/
AR2009111502280.html; Bill Vlasic and Nick Bunkley, Obama is Upbeat for
G.M.'s Future, N.Y. Times, June 1, 2009, available at http://
www.nytimes.com/2009/06/02/business/02auto.html; Andrew Ross Sorkin,
Lehman Files for Bankruptcy; Merrill is Sold, N.Y. Times, Sept. 14,
2008, available at http://www.nytimes.com/2008/09/15/business/
15lehman.html?_r=1; Mae Anderson, Linens 'n Things Files for
Bankruptcy, Associated Press, May 2, 2008, http://www.usatoday.com/
money/industries/retail/2008-05-02-linens_N.htm; Delphi Files for
Bankruptcy, CNNMoney.com, October 8, 2005, available at http://
money.cnn.com/2005/10/08/news/fortune500/delphi_bankrupt/index.htm;
Chris Isidore, Delta Air Lines Files for Bankruptcy, CNNMoney.com,
Sept. 15, 2005, available at http://money.cnn.com/2005/09/14/news/
fortune500/delta/index.htm.
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Bankruptcy judges' growing workload ultimately impacts all
other participants in the bankruptcy process, including other
court staff, debtors and creditors. As Judge Kennedy noted, a
``full docket means that court staffs are fielding more
inquiries from debtors and creditors[,] taking their time away
from processing the case work that they are each
assigned.''\20\ Judge Kennedy further noted that the increase
in consumer bankruptcy cases in particular has led to a growing
number of pro se debtors, who require more assistance from
court staff in navigating the bankruptcy process.\21\ Judge
Kennedy also maintained that even debtors and creditors with
counsel are impacted by the increased workload on bankruptcy
courts because final rulings on disputed matters may be
deferred for an extended time period, delaying payment for
creditors and financial relief for debtors.\22\
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\20\Bankruptcy Judgeship Hearing (Kennedy Statement at 9).
\21\Id.
\22\Id. at 9-10.
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While the workload of bankruptcy courts is increasing, the
authorizations for many bankruptcy judgeships are about to
lapse. Bankruptcy judgeships were last authorized in 2005 by
BAPCPA, and Congress authorized those judgeships only on a
temporary basis.\23\ These judgeships are set to expire
soon.\24\ The last time Congress authorized permanent
bankruptcy judgeships was in 1992.\25\
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\23\28 U.S.C. Sec. 152, hist. n. (2006); Bankruptcy Judgeship
Hearing (Lynn Statement at 3).
\24\Bankruptcy Judgeship Hearing (Lynn Statement at 3).
\25\Id.; Pub. L. No. 102-361, 106 Stat. 965 (1992).
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2. Judicial Conference Recommendations
Pursuant to 28 U.S.C. Sec. 152(b)(2), the Judicial
Conference is required periodically to submit to Congress
recommendations regarding the number of bankruptcy judges
needed and to identify in which districts they are needed.\26\
On February 9, 2009, the Judicial Conference transmitted
recommendations concerning additional bankruptcy judgeships to
the Chairman and Ranking Member of the House Judiciary
Committee and to the Majority and Minority Leaders of the House
of Representatives.\27\
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\26\28 U.S.C. Sec. 152(b)(2) (2006).
\27\Letter from James C. Huff, Secretary of the Judicial Conference
of the United States, to the Honorable John Conyers, Jr., Chairman of
the H. Comm. on the Judiciary (February 9, 2009) (on file with
Subcommittee).
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The Judicial Conference's bankruptcy judgeship
recommendations are the result of a thorough process for
assessing bankruptcy judgeship needs. The process begins with a
survey of all the Federal judicial circuits and then, applying
several factors to determine the workload in a given district,
the Judicial Conference formulates its recommendations for
Congress.
The Judicial Conference conducts a survey of all the
Federal judicial circuits to consider whether a particular
circuit needs to add new bankruptcy judgeships, convert
existing temporary judgeships to permanent status, or extend
the terms of existing temporary judgeships. This survey process
consists of five steps:
(1) LEach bankruptcy court seeking additional
judgeships, or conversions or extensions of existing
temporary judgeships, submits its request to the
district court, which then forwards the request to the
circuit court; alternatively, the district court may
submit a judgeship request to the circuit court on its
own.
(2) LThe circuit's judicial council considers the
request; approves, disapproves, or modifies it; and
then, if it approves the request, or approves it with
modification, submits the request to the Bankruptcy
Committee and its Subcommittee on Judgeships.
(3) LThe Subcommittee on Judgeships reviews the
circuit's requests, conducts on-site evaluations, and
submits its findings and recommendations to the
Bankruptcy Committee.
(4) LThe Bankruptcy Committee considers the
Subcommittee's findings, and makes recommendations to
the Judicial Conference.
(5) LThe Judicial Conference submits its
recommendations to Congress.\28\
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\28\Bankruptcy Judgeship Hearing (Lynn Statement, attachment 4;
Kennedy Statement at 7-8).
At every step of the five-step survey process, the Judicial
Conference applies judicial workload factors in assessing
bankruptcy judgeship requests. These factors include: (1)
weighted case filing data; (2) the nature and mix of the
court's caseload; (3) historical caseload data and filing
trends; (4) district-specific geographic, demographic, and
economic factors; (5) the bankruptcy court's case management
efforts; (6) the availability of alternatives to additional
judgeships, or converted or extended temporary judgeships; and
(7) the impact of additional resources on the court's per
judgeship caseload.\29\
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\29\Id. (Lynn Statement, attachment 5; Kennedy Statement at 7).
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Of the workload factors, the case weights used to determine
weighted case filing data are the most significant. The Federal
Judicial Center devised the case weight formula in 1991 based
on workload data collected over a 1-year period in 1988-89.\30\
The case weights are intended to more faithfully and accurately
measure judicial work than raw case filing numbers alone would
indicate. In total, the Judicial Conference categorizes cases
into one of 17 different case types based on the form of
bankruptcy relief under which a case is filed, the size of the
case based on estate assets, and whether the case involves a
business or non-business bankruptcy.\31\ In testimony before
the Subcommittee, William Jenkins, Jr., Director of Homeland
Security and Justice Issues for the Government Accountability
Office, stated that the 1991 case weights were ``likely to be a
reasonably accurate means of measuring the case-related
workload of bankruptcy judges.''\32\
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\30\Id. (Lynn Statement, attachment 5; statement of William
Jenkins, Jr., Director, Homeland Security and Justice Issues,
Government Accountability Office [hereinafter ``Jenkins Statement''] at
4).
\31\Id. (Lynn Statement, attachment 5).
\32\Id. (Jenkins Statement at 2).
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To support the creation of a new judgeship or the
conversion of a temporary judgeship to a permanent one, a
bankruptcy court should have weighted caseload filings of 1,500
per judgeship to justify additional resources.\33\ This 1,500
weighted caseload threshold for additional resources is based
on the Judicial Conference's estimate of an average weighted
caseload of 1,280.\34\
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\33\Id. (Lynn Statement, attachment 5). In the case of temporary
judgeships, if the per-judgeship weighted caseload in a district would
exceed 1,500 should the temporary judgeship expire, the Conference
would recommend conversion of the judgeship from temporary to permanent
status. If, under the same scenario, the per-judgeship weighted
caseload would exceed 1,000 but not 1,500, the Conference would
recommend extension of the temporary judgeship. Id.
\34\Id.
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The Judicial Conference also considers actions taken to
maximize the use of existing bankruptcy judgeships when
determining judgeship recommendations. These actions include
the assignment of bankruptcy judges to districts other than
their own in order to assist other bankruptcy courts with
larger caseloads, recalling retired bankruptcy judges to assist
overburdened districts, sharing judgeships with other
districts, and employing technology to create better time and
workload efficiency.\35\ Where these alternatives to additional
judgeships have been exhausted, additional judgeships or
converted or extended temporary judgeships may be warranted.
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\35\Id. (Lynn Statement, attachment 3; Kennedy Statement at 7).
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Based on this exhaustive process, the Judicial Conference
proposed the addition of 13 permanent bankruptcy judgeships in
10 judicial districts and the conversion of 22 existing
temporary bankruptcy judgeships in 15 judicial districts to
permanent status.\36\ Additionally, the Judicial Conference
proposed to extend the temporary authorization for two
judgeships for an additional 5 years.\37\ Overall, the proposal
affected 25 judicial districts in 9 of the 12 geographically
based Federal judicial circuits (all except the Seventh, Tenth,
and District of Columbia Circuits.)\38\
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\36\Id. (Lynn Statement, attachment 1).
\37\Id.
\38\Id.
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3. H.R. 4506
H.R. 4506 adopts the Judicial Conference's 2009 bankruptcy
judgeship recommendations in full. Accordingly, the bill
creates 13 new permanent judgeships, converts 22 temporary
judgeships to permanent judgeships, and extends 2 temporary
judgeships for 5 more years.\39\
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\39\H.R. 4506, 111th Cong. Sec. Sec. 2, 3, 4.
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As noted by both Judge Lynn and Judge Kennedy, the Judicial
Conference's recommendations may, in fact, understate
bankruptcy judges' workload, because the recommendations rely
in substantial part on the 1991 case weights, which do not
account for any increase in workload as a result of BAPCPA's
enactment in 2005.\40\ While the Judicial Conference is in the
process of developing new case weights to account for the
changes in judicial workload imposed by BAPCPA,\41\ the
Committee takes heed of Judge Lynn's response to the question
of whether Congress should wait to authorize new bankruptcy
judgeships until the Judicial Conference adopts new case
weights. As Judge Lynn noted, ``the judicial districts for
which the Conference has recommended additional bankruptcy
judgeships have a sustained and pressing need and cannot wait
longer for relief.''\42\ Moreover, ``the judgeship needs in the
districts for which judgeships are recommended are so
longstanding that many of them existed long before 2005.''\43\
Given that the ``current judgeship recommendation is extremely
conservative'' because it does not account for the increased
work required by BAPCPA, the Committee concludes that delay in
authorizing new bankruptcy judgeships is not warranted based on
the fact that the case weights used in determining the Judicial
Conference's current recommendations were developed in
1991.\44\
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\40\Bankruptcy Judgeship Hearing (Kennedy Statement at 4; responses
to questions for the record of the Honorable Barbara M.G. Lynn).
\41\Id. (Jenkins Statement at 9).
\42\Id. (responses to questions for the record of the Honorable
Barbara M.G. Lynn).
\43\Id.
\44\Id.
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H.R. 4506 would increase filing fees to pay for the 13 new
permanent judgeships it creates. Filing fees would be raised by
$1.00 for Chapter 7 and Chapter 13 cases and by $42.00 for
Chapter 11 cases.\45\
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\45\H.R. 4506, 111th Cong. Sec. 5.
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The Committee recommends that in the future, a mechanism
other than a bankruptcy filing fee increase be adopted to pay
for additional bankruptcy judgeships. The Committee is
particularly concerned about the already disproportionate
burden that high filing fees for Chapter 7 and Chapter 13 cases
place on consumer debtors. Any significant increase in filing
fees for these types of bankruptcy cases threatens to deny
honest but financially distressed debtors the opportunity to
obtain bankruptcy relief.
In this instance, the Committee concluded that the filing
fee increases contained in H.R. 4506 were necessary to
guarantee that bankruptcy courts obtained needed judicial
resources in a timely manner in order to ensure the continued
efficiency and effectiveness of the Nation's bankruptcy system.
As noted, authorizations for numerous temporary judgeships are
set to lapse in the near future at a moment when the workload
for bankruptcy judges is increasing. Moreover, Congress has not
authorized any permanent bankruptcy judgeships since 1992.
Finally, the $1.00 increase on consumer bankruptcy filing fees
is relatively minimal. In light of these considerations, the
Committee determined that, in this case, filing fee increases
were appropriate. The filing fee increases contained in H.R.
4506, however, should not be taken as a model for determining
how to pay for future bankruptcy judgeships. Rather, filing fee
increases should be avoided if at all possible.
Hearings
The Committee's Subcommittee on Commercial and
Administrative Law held a hearing on ``Bankruptcy Judgeship
Needs'' on June 16, 2009. At that hearing, the Subcommittee
considered the Judicial Conference's bankruptcy judgeship
recommendations, as reflected in H.R. 4506. Testimony was
received from the Honorable Barbara M.G. Lynn, Judge, United
States District Court for the Northern District of Texas, on
behalf of the Judicial Conference of the United States; the
Honorable David S. Kennedy, Chief Judge of the United States
Bankruptcy Court for the Western District of Tennessee, on
behalf of the National Conference of Bankruptcy Judges; William
Jenkins, Jr., Director, Homeland Security and Justice Issues,
Government Accountability Office; and Carey D. Ebert, President
of the National Association of Consumer Bankruptcy Attorneys.
No separate legislative hearing was held on H.R. 4506.
Committee Consideration
On January 27, 2010, the Committee met in open session and
ordered the bill H.R. 4506 favorably reported without
amendment, 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. 4506.
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.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 4506, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 3, 2010.
Hon. John Conyers, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4506, the
Bankruptcy Judgeship Act of 2010.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Daniel
Hoople, who can be reached at 226-2860.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure
cc:
Honorable Lamar S. Smith.
Ranking Member
H.R. 4506--Bankruptcy Judgeship Act of 2010.
SUMMARY
H.R. 4506 would establish 35 permanent bankruptcy
judgeships, increase fees collected by individuals and
businesses filing for bankruptcy, and alter how those fees are
distributed among government entities. The bill would increase
direct spending, revenues, and costs subject to appropriation.
CBO estimates that the mandatory pay and benefits for
judgeships not otherwise provided for under current law would
increase direct spending by $12 million through 2015 and $24
million over the 2010-2020 period. We estimate that changes
made to the collection and disposition of filing fees under the
bill would increase revenues by about $13 million through 2015
and by about $27 million over the 2010-2020 period. In total,
the changes to direct spending and revenue made by H.R. 4506
would reduce future budget deficits by about $1 million over
the 2010-2015 period and about $3 million over the 2010-2020
period.\1\
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\1\Different time periods apply for enforcing pay-as-you-go rules.
CBO estimates that the changes in direct spending and revenues from
enacting the legislation would result in a net decrease of $1 million
in future budget deficits over the 2010-2014 period and a net decrease
of $2 million over the 2010-2019 period.
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CBO estimates that discretionary expenditures for support
staff and office space associated with the additional
judgeships would cost $45 million over the 2010-2015 period,
subject to appropriation of the necessary funds.
H.R. 4506 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on State, local, or tribal
governments.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 4506 is shown in the
following table. The costs of this legislation fall within
budget function 750 (administration of justice).
By Fiscal Year, in Millions of Dollars
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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010- 2015 2010- 2020
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CHANGES IN DIRECT SPENDING
Estimated Budget Authority * 2 3 3 3 3 3 3 3 3 3 12 24
Estimated Outlays * 2 3 3 3 3 3 3 3 3 3 12 24
CHANGES IN REVENUES
Estimated Revenues 0 2 3 3 3 3 3 3 3 3 3 13 27
NET CHANGE IN THE BUDGET DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
Impact on Deficit\1\ * * * * * * * * * * * 1 3
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level 0 14 9 7 7 7 7 7 7 7 7 45 81
Estimated Outlays 0 12 10 8 7 7 7 7 7 7 7 45 81
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Note: * = less than $500,000. Amounts may not sum to totals because of rounding.
1. Positive numbers indicate decreases in deficits; negative numbers indicate increases in deficits.
BASIS OF ESTIMATE
For this estimate, CBO assumes that the legislation will be
enacted during fiscal year 2010, that the additional judgeships
created by the bill will be filled within one year, and that
the amounts estimated to be necessary for additional staff and
support will be appropriated in each fiscal year.
Changes in Direct Spending
H.R. 4506 would authorize 13 new permanent judgeships to be
added to the bankruptcy courts. Salaries and benefits of
bankruptcy judges are provided annually without the need for
appropriations. Based on the current-law salaries of bankruptcy
judges (about $160,000) as well as information from the
Administrative Office of the U.S. Courts (AOUSC) on the cost of
benefits of Federal judges, CBO estimates that the mandatory
pay and benefits for those additional judges would total about
$2.5 million a year once all judges have been confirmed,
increasing direct spending by $12 million through 2015 and by
$24 million over the 2010-2020 period.
H.R. 4506 also would make 22 judgeships on the bankruptcy
courts that are currently temporary positions permanent. Under
current law, those temporary judgeships will remain filled for
five years or until a vacancy occurs, whichever is later. CBO
cannot predict the timing of vacancies. Therefore, we cannot
estimate how the conversion of the 22 judgeships into permanent
positions under the legislation would affect the Federal budget
over the next 10 years. (The same is true for temporary
judgeships that are extended but not made permanent under the
bill.) For this estimate, CBO assumes that there would be no
effect on the Federal budget from this provision over the next
10 years. However, if any of the temporary judges were to die,
retire, resign, or be removed during the next 10 years, the
bill would require that position be filled at an additional
cost that would not be incurred under current law.
Changes in Revenues
H.R. 4506 would increase the amount collected by the
Federal Government from businesses and individuals filing
bankruptcy cases. Filing fees for individuals under Chapters 7
and 13 of the bankruptcy statute would increase by $1 (to $246
and $236, respectively). Filing fees for Chapter 11 would
increase by $42 (to $1,042).
Under current law, amounts collected from those fees are
distributed among the judiciary, the U.S. trustees system,
private trustees, and the Treasury. H.R. 4506 would adjust the
formula that divides the proceeds from filing fees so that
additional amounts collected as a result of this bill would be
deposited in the Treasury and recorded in the budget as
additional revenues. Based on information from the AOUSC, CBO
estimates that revenues from bankruptcy filings under the bill
would increase by about $13 million over the 2010-2015 period,
and by about $27 million over the 2010-2020 period.
Changes in Spending Subject to Appropriation
Based on information from AOUSC, CBO estimates that
implementing H.R. 4506 would cost $45 million over the 2010-
2015 period for administrative support and office space for 13
new judges. Of that amount, about $10 million would be incurred
in the first few years for startup costs, including office
construction, furniture, and law books. The remaining amount-
$35 million-would be for annual expenditures (about $560,000
per judge) for administrative needs, such as support staff and
court operations.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
H.R. 4506 contains no intergovernmental or private-sector
mandates as defined in UMRA and would impose no costs on State,
local, or tribal governments.
ESTIMATE PREPARED BY:
Federal Costs: Daniel Hoople
Impact on State, Local, and Tribal Governments: Melissa Merrell
Impact on the Private Sector: Paige Piper/Bach
ESTIMATE APPROVED BY:
Theresa Gullo
Deputy Assistant Director for Budget Analysis
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.
4506 authorizes 13 new permanent bankruptcy judgeships,
converts 22 temporary judgeships to permanent judgeships, and
extends authorization for 2 temporary judgeships for 5 more
years.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8 of the Constitution.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 4506 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9 of Rule XXI.
Section-by-Section Analysis
Section 1. Short Title. Section 1 sets forth the short
title of the bill as the ``Bankruptcy Judgeship Act of 2010.''
Section 2. Additional Permanent Offices of Bankruptcy
Judges. Section 2 amends 28 U.S.C. Sec. 152(a)(2) to reflect
the creation of 13 new permanent bankruptcy judgeships and the
conversion of 22 temporary bankruptcy judgeships to permanent
bankruptcy judgeships, resulting in the following additional
permanent bankruptcy judgeships: 1 additional judge in the
Eastern and Western Districts of Arkansas; 2 additional judges
in the Eastern District of California; 5 additional judges in
the District of Delaware; 1 additional judge in the Middle
District of Florida; 1 additional judge in the Northern
District of Florida; 2 additional judges in the Southern
District of Florida; 2 additional judges in the Northern
District of Georgia; 1 additional judge in the Southern
District of Georgia; 3 additional judges in the District of
Maryland; 3 additional judges in the Eastern District of
Michigan; 1 additional judge in the Northern District of
Mississippi; 2 additional judges in the District of Nevada; 1
additional judge in the District of New Hampshire; 1 additional
judge in the District of New Jersey; 1 additional judge in the
Northern District of New York; 1 additional judge in the
Southern District of New York; 1 additional judge in the
Eastern District of North Carolina; 1 additional judge in the
Western District of North Carolina; 1 additional judge in the
Middle District of Pennsylvania; 1 additional judge in the
Eastern District of Tennessee; 1 additional judge in the
Western District of Tennessee; 1 additional judge in the
Eastern District of Virginia; and 1 additional judge in the
Southern District of West Virginia.
Section 3. Conversion of Certain Temporary Offices of
Bankruptcy Judges to Permanent Offices. Subsection (a) converts
a total of 19 temporary bankruptcy judgeships authorized by the
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
(``BAPCPA'') to permanent judgeships. Subsection (b) converts
three temporary bankruptcy judgeships authorized by the
Bankruptcy Judgeship Act of 1992 to permanent judgeships. These
conversions are reflected in the additional judgeships outlined
in section 2 of the bill.
Section 4. Extension of Certain Temporary Offices of
Bankruptcy Judges Established by Public Law 109-8. Subsection
(a) extends BAPCPA's temporary authorization for two bankruptcy
judgeships (one in the Eastern District of Pennsylvania, one in
the Middle District of North Carolina) by another 5 years.
Subsection (b) clarifies that, except as noted in subsection
(a), BAPCPA's provisions relating to temporary judgeships
remain in force.
Section 5. Paygo Offset. Subsection (a)(1) increases the
filing fees for Chapter 7 and Chapter 13 filings by $1.00 each
($245.00 to $246.00 for Chapter 7 filings and $235.00 to
$236.00 for Chapter 13 filings.) Subsection (a)(2) increases
the filing fee for Chapter 11 filings by $42.00 (from $1,000.00
to $1,042.00.) Subsection (b) reduces the percentage allocation
of filing fees for Chapter 7, Chapter 11, and Chapter 13 cases
to the United States Trustee System Fund in proportion to the
increased filing fees so that the actual dollar amounts of the
allocations remain the same. Similarly, subsection (c) reduces
the percentage allocation of filing fees to the Federal
judiciary in proportion to the amount of the filing fee
increases.
Section 6. Effective Dates. Subsection (a) sets the
enactment date as the Act's effective date except with respect
to section 5, which increases filing fees. Subsection (b)
specifies that the increase in filing fees pursuant to section
5 will take effect 180 days after the enactment date.
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, 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) * * *
(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] 4
California:
Northern.................................................... 9
Eastern..................................................... [6] 8
Central..................................................... 21
Southern.................................................... 4
* * * * * * *
Delaware...................................................... [1] 6
District of Columbia.......................................... 1
Florida:
Northern.................................................... [1] 2
Middle...................................................... [8] 9
Southern.................................................... [5] 7
Georgia:
Northern.................................................... [8] 10
Middle...................................................... 3
Southern.................................................... [2] 3
* * * * * * *
Maryland...................................................... [4] 7
* * * * * * *
Michigan:
Eastern..................................................... [4] 7
Western..................................................... 3
* * * * * * *
Mississippi:
Northern.................................................... [1] 2
Southern.................................................... 2
* * * * * * *
Nevada........................................................ [3] 5
New Hampshire................................................. [1] 2
New Jersey.................................................... [8] 9
* * * * * * *
New York:
Northern.................................................... [2] 3
Southern.................................................... [9] 10
Eastern..................................................... 6
Western..................................................... 3
North Carolina:
Eastern..................................................... [2] 3
Middle...................................................... 2
Western..................................................... [2] 3
* * * * * * *
Pennsylvania:
Eastern..................................................... 5
Middle...................................................... [2] 3
Western..................................................... 4
* * * * * * *
Tennessee:
Eastern..................................................... [3] 4
Middle...................................................... 3
Western..................................................... [4] 5
* * * * * * *
Virginia:
Eastern..................................................... [5] 6
Western..................................................... 3
Washington:
Eastern..................................................... 2
Western..................................................... 5
West Virginia:
Northern.................................................... 1
Southern.................................................... [1] 2
* * * * * * *
PART II--DEPARTMENT OF JUSTICE
* * * * * * *
CHAPTER 39--UNITED STATES TRUSTEES
* * * * * * *
Sec. 589a. United States Trustee System Fund
(a) * * *
(b) For the purpose of recovering the cost of services of the
United States Trustee System, there shall be deposited as
offsetting collections to the appropriation ``United States
Trustee System Fund'', to remain available until expended, the
following--
(1)(A) [40.46] 40.28 percent of the fees collected
under section 1930(a)(1)(A); and
(B) [28.33] 28.15 percent of the fees collected under
section 1930(a)(1)(B);
(2) [55] 52.78 percent of the fees collected under
section 1930(a)(3) of this title;
* * * * * * *
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] $246; and
(B) chapter 13 of title 11, [$235] $236.
* * * * * * *
(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, [$1,000] $1,042.
* * * * * * *
----------
JUDICIARY APPROPRIATIONS ACT, 1990
(Title IV of Public Law 101-162)
* * * * * * *
TITLE IV--THE JUDICIARY
* * * * * * *
General Provisions--The Judiciary
* * * * * * *
Sec. 406. (a) * * *
(b) All fees as shall be hereafter collected for any service
not of a kind described in any of the items enumerated as items
1 through 7 and as items 9 through 18, as in effect on November
21, 1989, of the bankruptcy miscellaneous fee schedule
prescribed by the Judicial Conference of the United States
under section 1930(b) of title 28, United States Code, [28.87]
28.74 percent of the fees collected under section 1930(a)(1)(A)
of that title, [35.00] 34.77 percent of the fees collected
under section 1930(a)(1)(B) of that title, and [25] 23.99
percent of the fees collected under section 1930(a)(3) of that
title shall be deposited as offsetting receipts to the fund
established under section 1931 of that title and shall remain
available to the Judiciary until expended to reimburse any
appropriation for the amount paid out of such appropriation for
expenses of the Courts of Appeals, District Courts, and other
Judicial Services and the Administrative Office of the United
States Courts. The Judicial Conference shall report to the
Committees on Appropriations of the House of Representatives
and the Senate on a quarterly basis beginning on the first day
of each fiscal year regarding the sums deposited in said fund.
* * * * * * *