I 
111TH CONGRESS 
2D SESSION 
H. R. 6055 
To support and strengthen small businesses manufacturing in America, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 30, 2010 
Mr. MURPHY of Connecticut (for himself and Mr. RYAN of Ohio) introduced 
the following bill; which was referred to the Committee on Financial Services 
A BILL 
To support and strengthen small businesses manufacturing 
in America, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Accounts Receivable 
Insurance Program Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Small manufacturers are hurt much more 
than their larger competitors when delays in pay-
ments of accounts receivable occur. These small 
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firms hold millions of dollars in outstanding receiv-
ables. Especially in an economic slowdown, many 
larger firms delay payments to their downstream 
suppliers causing disruptions in the domestic indus-
trial supply chain, creating a greater need to insure 
payment on terms. 
(2) As the number and size of accounts receiv-
ables outstanding increases, these businesses have 
fewer resources to buy raw materials, hire workers, 
and access adequate lines of credit. Small manufac-
turers and their creditors need additional assurance 
that customers will pay their accounts on reasonable 
terms. 
(3) Failure of payment to downstream suppliers 
in a reasonable amount of time has had a significant 
negative impact on the cash flow of small suppliers. 
The moment a lender sees that a supplier is involved 
in a financially troubled industry such as the auto 
industry, they move the supplier into a high risk cat-
egory or will not extend credit. Government guaran-
teed account receivables insurance would allow the 
middle-market companies access to credit lines they 
need to continue day-to-day operations. 
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SEC. 3. DEFINITIONS. 
For the purpose of this Act the following definitions 
apply: 
(1) FINANCIAL
INSTITUTION.—The term ‘‘fi-
nancial institution’’ means an establishment engaged 
in financial transactions (transactions involving the 
creation, liquidation, or change in ownership of fi-
nancial assets) and/or in facilitating financial trans-
actions. 
(2) INSURANCE INSTITUTION.—The term ‘‘in-
surance institution’’ means an establishment that is 
primarily engaged in one of the following: 
(A) Underwriting (assuming the risk, as-
signing premiums, and so forth) annuities and 
insurance policies. 
(B) Facilitating such underwriting by sell-
ing insurance policies, and by providing other 
insurance and employee-benefit related services. 
(3) GUARANTEE.—The term ‘‘guarantee’’ has 
the same meaning as is given the term ‘‘loan guar-
antee’’ in section 502(3) of the Federal Credit Re-
form Act of 1990 (2 U.S.C. 661a(3)). 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury. 
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SEC. 4. ACCOUNTS RECEIVABLE INSURANCE. 
(a) ESTABLISHMENT OF PROGRAM.—There is estab-
lished within the Department of the Treasury a govern-
ment-backed private accounts receivable insurance pro-
gram to assist small manufacturers in the underwriting 
and guarantee of payment on terms through the insurance 
of their accounts receivable. 
(b) TERMS AND CONDITIONS.— 
(1) GUARANTEE.—The Secretary shall, to the 
extent amounts are made available under subsection 
(c), insure accounts receivable underwritten by fi-
nancial or insurance institutions for small manufac-
turing businesses. 
(2) APPLICATION.— 
(A) A small manufacturing business shall 
submit an application to a financial or insur-
ance institution for participation in the pro-
gram established under this section at such 
time, in such manner, and accompanied by such 
information as the Secretary may require. 
(B) A financial or insurance institution 
shall not deny an application solely based on a 
small manufacturing business’s lack of short 
term positive cash flow or solely on the nature 
of their customers’ industry classification. 
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(3) DEFAULT.—If a small manufacturing busi-
ness defaults on any portion of an obligation guar-
anteed under paragraph (1)— 
(A) the financial or insurance institution 
shall have the right to demand payment of the 
unpaid amount from the Secretary in exchange 
for payment of a fee equal to .5 percent of such 
amount; and 
(B) within such period as the Secretary 
shall specify, the Secretary shall pay to the fi-
nancial or insurance institution the remaining 
balance of the obligation, unless the Secretary 
determines that such small business or institu-
tion has not taken reasonable steps to seek col-
lection of such obligation in a reasonably timely 
manner, which steps shall include— 
(i) exhausting all efforts to enforce all 
terms and penalties set forth in the under-
lying contract; 
(ii) making successive efforts by reg-
istered mail or other similar method on a 
regular schedule; and 
(iii) pursuing legal action. 
(4) LIMITATION.—A financial or insurance in-
stitution shall not be eligible for a guarantee under 
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paragraph (1) if such institution insured the ac-
counts receivable of a small manufacturing business 
for less than 80 percent of the value of such ac-
counts receivable insured. 
(c) FUNDING.—Funding as may be necessary, not to 
exceed $500,000,000, for the cost of guarantees under this 
section shall be available to the Secretary, without further 
appropriation or fiscal year limitation, for the costs of 
such program. All funds received by the Secretary in con-
nection with purchases made pursuant to paragraph (1), 
including interest payments, dividend payments, and pro-
ceeds from the sale of any financial instrument, shall be 
paid into the general fund of the Treasury for reduction 
of the public debt. 
(d) SUNSET.—The Secretary may not enter into any 
contracts or agreements with financial institutions to 
make any guarantees under this section after December 
31, 2011, or on the date that is 1 year after the date 
of the enactment of this Act, whichever is later. 
(e) REGULATIONS.—Not later than 90 days after the 
date of the enactment of this Act, the Secretary shall issue 
regulations to carry out the purposes of this section. 
Æ 
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