H.R. 3867

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3867 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 3867

To amend titles 11 and 28, United States Code, to modify the 
compensation payable to trustees serving in cases under chapter 7 of 
title 11, United States Code, to extend the term of certain temporary 
offices of bankruptcy judges, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

June 10, 2025

Mr. Cline (for himself and Mr. Ivey) introduced the following bill; 
which was referred to the Committee on the Judiciary

_______________________________________________________________________

A BILL

To amend titles 11 and 28, United States Code, to modify the 
compensation payable to trustees serving in cases under chapter 7 of 
title 11, United States Code, to extend the term of certain temporary 
offices of bankruptcy judges, and for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Bankruptcy Administration 
Improvement Act of 2025''.

SEC. 2. FINDINGS.

Congress finds the following:
(1) Congress has amended the laws governing bankruptcy fees 
as necessary to ensure that the bankruptcy system remains self-
supporting, while also fairly allocating the costs of the 
system among those who use the system.
(2) Because of the importance for the bankruptcy system to 
be self-funded, at no cost to taxpayers, Congress has closely 
monitored the funding needs of the bankruptcy system, including 
by requiring periodic reporting by the Attorney General 
regarding the United States Trustee System Fund.
(3) Because the system governing bankruptcies of various 
types is interconnected, Congress has established fees, 
including filing fees, quarterly fees in chapter 11 cases, and 
other fees, that together fund the courts, judges, United 
States trustees, and trustees serving in bankruptcy cases under 
chapter 7 of title 11, United States Code.
(4) Trustees serving in bankruptcy cases under chapter 7 of 
title 11, United States Code, are vital to the functioning of 
the bankruptcy system, as they provide services at the front 
lines of the bankruptcy process, administering thousands of 
cases.
(5) Chapter 7 bankruptcy trustees provide valuable returns 
of assets to government creditors, including the Internal 
Revenue Service, the Department of Agriculture, the Small 
Business Administration, and other Federal, State, and 
municipal governments.
(6) Due to the work of the chapter 7 bankruptcy trustees, 
millions of dollars are also disbursed annually to private 
creditors of all types, including medical providers, unsecured 
creditors, small businesses, and micro-enterprises such as 
domestic support providers.
(7) Despite the essential role of chapter 7 bankruptcy 
trustees, since 1994 the amount of compensation paid to these 
trustees has not been increased. As in 1994, bankruptcy 
trustees receive only $60 per case (composed of $45 from 
subsection 330(b)(1), and $15 from subsection 330(b)(2), of 
title 11, United States Code) in nearly 90 percent of chapter 7 
cases, and bankruptcy trustees receive no compensation at all 
for cases in which the filing fee is waived by the bankruptcy 
court.
(8) Since 1994, there have been significant increases in 
salaries, attorney fees, budget appropriations, filing fees, 
and court-related fees associated with chapter 7 bankruptcies. 
In contrast, the $60 paid to chapter 7 trustees has remained 
the same and has not even been increased for inflation. In 
2021, Congress attempted to implement a mechanism that would 
give chapter 7 trustees a raise, but the trustees only received 
increased compensation for 1 fiscal year. Based on Consumer 
Price Index estimates, the $60 paid to trustees in 1994 would 
be the equivalent of over $125 today.
(9) This Act and the amendments made by this Act--
(A) increase the compensation of chapter 7 
bankruptcy trustees to the level that is appropriate, 
overdue, and proportionate with the level that was 
intended in 1994, by increasing the total compensation 
of trustees to $120 per case;
(B) ensure adequate funding of the United States 
trustee system through the increase of certain fees, 
which will also apply to districts that are not part of 
a United States trustee region as required by existing 
law; and
(C) support the preservation of existing bankruptcy 
judgeships that are urgently needed to handle existing 
and anticipated increases in business and consumer 
caseloads.
(10) This Act will not alter the filing fee under chapter 7 
of title 11, United States Code, and will not modify, impair, 
or supersede the current authority of the district courts of 
the United States, or of bankruptcy courts, to waive the 
payment of filing fees by indigent individuals.

SEC. 3. TRUSTEE COMPENSATION.

(a) Compensation of Officers.--Section 330 of title 11, United 
States Code, is amended--
(1) in subsection (b)(1) by striking ``$45'' and inserting 
``$105''; and
(2) by striking subsection (e).
(b) Remainder of Fees.--Notwithstanding any other provision of law, 
the remainder of fees collected under section 1930(a)(1)(A) of title 
28, United States Code, after compensating trustees under section 
330(b)(1) of title 11, United States Code, shall be deposited as 
follows:
(1) $63.51 in the special fund of the Treasury established 
under section 1931 of title 28, United States Code.
(2) $25.00 in the special fund established in accordance 
with section 10101(b) of the Deficit Reduction Act of 2005 (28 
U.S.C. 1931 note).
(3) $51.49 in the United States Trustee System Fund 
established under section 589a of title 28, United States Code.
(c) United States Trustee System Fund.--Section 589a of title 28, 
United States Code, is amended--
(1) in subsection (b), by striking paragraph (1) and 
inserting the following:
``(1) 28.33 percent of the fees collected under section 
1930(a)(1)(B);''; and
(2) in subsection (f)(1)--
(A) in subparagraph (D) by striking ``Fourth'' and 
inserting ``Second'';
(B) by striking subparagraphs (B) and (C); and
(C) by redesignating subparagraph (D) as 
subparagraph (B).

SEC. 4. BANKRUPTCY FEES.

(a) Quarterly Fees.--Section 1930(a)(6)(B) of title 28, United 
States Code, is amended--
(1) in clause (i), by striking ``5-year'' and inserting 
``10-year''; and
(2) in clause (ii)(II), by striking ``0.8'' and inserting 
``1.1''.
(b) Period for Deposits.--Section 589a(f) of title 28, United 
States Code, as amended by section 3(c)(2), is amended by striking 
``2026'' each place it appears and inserting ``2031''.
(c) Deposits of Certain Fees for Fiscal Years 2026 Through 2031.--
Notwithstanding section 589a(b) of title 28, United States Code, for 
each of fiscal years 2026 through 2031--
(1) the fees collected under section 1930(a)(6) of title 
28, United States Code, less the amount specified in 
subparagraph (2) of this subsection, shall be deposited as 
specified in section 589a(f) of title 28, United States Code, 
as amended by this Act; and
(2) $5,400,000 of the fees collected under section 
1930(a)(6) of title 28, United States Code, shall be deposited 
in the general fund of the Treasury.

SEC. 5. EXTENSION OF TERM OF CERTAIN TEMPORARY OFFICES OF BANKRUPTCY 
JUDGE.

(a) Bankruptcy Administration Improvement Act of 2020.--Section 4 
of the Bankruptcy Administration Improvement Act of 2020 (28 U.S.C. 152 
note) is amended--
(1) in subsection (a)(2)--
(A) in subparagraph (A)(i), by striking ``5 years'' 
and inserting ``10 years''; and
(B) in subparagraph (B)(i), by striking ``5 years'' 
and inserting ``10 years'';
(2) in subsection (b)(2)--
(A) in subparagraph (A)(i), by striking ``5 years'' 
and inserting ``10 years'';
(B) in subparagraph (B)(i), by striking ``5 years'' 
and inserting ``10 years'';
(C) in subparagraph (C)(i), by striking ``5 years'' 
and inserting ``10 years'';
(D) in subparagraph (D)(i), by striking ``5 years'' 
and inserting ``10 years'';
(E) in subparagraph (E)(i), by striking ``5 years'' 
and inserting ``10 years''; and
(F) in subparagraph (F)(i), by striking ``5 years'' 
and inserting ``10 years'';
(3) in subsection (c)(2)--
(A) in subparagraph (A)(i), by striking ``5 years'' 
and inserting ``10 years''; and
(B) in subparagraph (B)(i), by striking ``5 years'' 
and inserting ``10 years'';
(4) in subsection (d)(2)--
(A) in subparagraph (A)(i), by striking ``5 years'' 
and inserting ``10 years''; and
(B) in subparagraph (B)(i), by striking ``5 years'' 
and inserting ``10 years'';
(5) in subsection (e)(2)(A), by striking ``5 years'' and 
inserting ``10 years''; and
(6) in subsection (f)(2)(A), by striking ``5 years'' and 
inserting ``10 years''.
(b) Bankruptcy Judgeship Act of 2017.--Section 1003(b)(2)(A) of the 
Bankruptcy Judgeship Act of 2017 (28 U.S.C. 152 note) is amended by 
striking ``5 years'' and inserting ``10 years''.

SEC. 6. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

(a) In General.--Except as provided in paragraph (2), the 
amendments made by this Act shall take effect on October 1 that first 
occurs after the date of enactment of this Act.
(b) Exceptions.--
(1) Compensation of officers.--Section 3 and the amendments 
made by section 3 shall apply to any case under title 11, 
United States Code, commenced on or after October 1 that first 
occurs after the date of enactment of this Act--
(A) under chapter 7 of title 11, United States 
Code; or
(B) under chapter 11, 12, or 13 of title 11, United 
States Code, that is converted to a case under chapter 
7 of title 7, United States Code.
(2) Bankruptcy fees.--Section 4 and the amendments made by 
section 4 shall apply to--
(A) any case pending under chapter 11 of title 11, 
United States Code, on or after October 1 that first 
occurs after the date of enactment of this Act; and
(B) quarterly fees payable under section 1930(a)(6) 
of title 28, United States Code, for disbursements made 
in any calendar quarter that begins on or after October 
1 that first occurs after the date of enactment of this 
Act.
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