[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 202 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 202
To require the Administrator of the Small Business Administration to
establish a program to allow small business concerns to purchase
certain commodities futures, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 23, 2025
Mrs. Shaheen (for herself and Mr. Cassidy) introduced the following
bill; which was read twice and referred to the Committee on Small
Business and Entrepreneurship
_______________________________________________________________________
A BILL
To require the Administrator of the Small Business Administration to
establish a program to allow small business concerns to purchase
certain commodities futures, 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 ``Helping Small Businesses To Hedge
Risk and Insure against Volatile Expenses Act'' or the ``Helping Small
Businesses THRIVE Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Small Business Administration.
(2) Commission; commodity; commodity pool; commodity
trading advisor; future delivery; futures commission
merchant.--The terms ``Commission'', ``commodity'', ``commodity
pool'', ``commodity trading advisor'', ``future delivery'', and
``futures commission merchant'' have the meanings given those
terms in section 1a of the Commodity Exchange Act (7 U.S.C.
1a).
(3) Covered commodity.--The term ``covered commodity''
means a commodity that the Administrator, under section 4(b),
determines is eligible to be the subject of an agreement
entered into under section 4(a).
(4) Eligible entity.--The term ``eligible entity''--
(A) means a small business concern; and
(B) does not include a small business concern
that--
(i) is, or is owned or controlled by an
entity that is, a financial institution (as
defined in section 509 of the Gramm-Leach-
Bliley Act (15 U.S.C. 6809));
(ii) is, or is owned or controlled by an
entity that is, with respect to any financial
activity, subject to the jurisdiction of the
Commission under the Commodity Exchange Act (7
U.S.C. 1 et seq.);
(iii) is, or is owned or controlled by, an
investment adviser (as defined in section
202(a) of the Investment Advisers Act of 1940
(15 U.S.C. 80b-2(a))) that is required to
register with the Securities and Exchange
Commission under section 203 of that Act (15
U.S.C. 80b-3);
(iv) is, or is owned or controlled by, a
broker (as defined in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C.
78c(a)));
(v) has been in operation for less than 1
year, as of the date on which the small
business concern submits an application under
section 3(b); or
(vi) the Administrator otherwise determines
should be excluded in order--
(I) to preserve the integrity of
the Program; and
(II) to ensure that the focus of
the Program remains on small business
concerns desiring to participate in the
Program to maximize stability with
respect to the direct operating costs
of those small business concerns.
(5) Program.--The term ``Program'' means the Helping Small
Businesses Thrive Program established under section 3(a).
(6) Resource partners.--The term ``resource partners''
means--
(A) small business development centers;
(B) women's business centers described in section
29 of the Small Business Act (15 U.S.C. 656);
(C) chapters of the Service Corps of Retired
Executives established under section 8(b)(1)(B) of the
Small Business Act (15 U.S.C. 637(b)(1)(B)); and
(D) Veteran Business Outreach Centers described in
section 32 of the Small Business Act (15 U.S.C. 657b).
(7) Small business concern; small business development
center.--The terms ``small business concern'' and ``small
business development center'' have the meanings given those
terms in section 3 of the Small Business Act (15 U.S.C. 632).
SEC. 3. HELPING SMALL BUSINESSES THRIVE PROGRAM.
(a) Establishment and Purpose.--Not later than 1 year after the
date of enactment of this Act, the Administrator shall, in consultation
with the Commission, the Secretary of the Treasury, and such other
Federal officials determined appropriate by the Administrator,
establish within the Small Business Administration a pilot program--
(1) which shall be known as the ``Helping Small Businesses
Thrive Program''; and
(2) the purpose of which shall be to assist eligible
entities in limiting the risk faced by those eligible entities
with respect to rising input costs from commodities.
(b) Application.--
(1) In general.--An eligible entity seeking to participate
in the Program shall submit an application--
(A) at such time, in such manner, and containing
such information as the Administrator determines to be
necessary;
(B) that shall include information necessary to
establish that the entity submitting the application is
an eligible entity; and
(C) that may include additional information to
ensure that the Administrator, through the Program, is
able to properly assist the eligible entity in
determining whether entering into an agreement under
section 4(a) would be beneficial for the eligible
entity, including a description of expenses incurred by
the eligible entity relating to commodities.
(2) Guidance.--The Administrator shall develop guidance,
which shall be posted on a publicly available website of the
Small Business Administration, to assist an eligible entity in
determining whether the eligible entity should submit an
application to participate in the Program and whether entering
into an agreement under section 4(a) would be beneficial for
the eligible entity, including information regarding--
(A) the purpose of the Program, the products the
Program offers, and how those products can reduce
exposure to price volatility for eligible entities with
respect to covered commodities;
(B) determining the cost of covered commodities;
(C) the expenses of eligible entities relating to
each covered commodity, including when expenses for
covered commodities incurred by an eligible entity
reach a level such that it might not be beneficial for
the eligible entity to participate in the Program; and
(D) the percentages of commodity-related expenses
for the eligible entity that are most likely beneficial
to offset through participation in the Program; and
(E) the impact of the type of revenue of an
eligible entity, such as a cost-plus or highly variable
pricing model for revenue or long-term recurring
revenue.
(c) Outreach and Consultation.--In carrying out the Program, the
Administrator shall conduct outreach to small business concerns,
including small business concerns that are not eligible entities by
operation of section 2(4)(B)(v), to share information regarding the
Program and the benefits of the Program, including by--
(1) providing informational materials to the small business
centers of the Small Business Administration, small business
stakeholders and trade associations, and resource partners for
distribution to small business concerns;
(2) conducting webinars or in-person events with small
business concerns regarding the Program; and
(3) operating a website and telephone line that--
(A) offers additional information regarding the
Program; and
(B) allows a small business concern to ask
questions and obtain assistance in determining whether
the small business concern would benefit from
participating in the Program.
(d) Administration of Program.--In carrying out the Program, the
following shall apply:
(1) The Administrator may--
(A) issue such rules as may be necessary; and
(B) in consultation with the Commission, form a
commodity pool and apply for registration as a
commodity pool operator under the Commodity Exchange
Act (7 U.S.C. 1 et seq.).
(2)(A) The Administrator may not take delivery of any
physical commodity except in extreme and exigent circumstances.
(B) The Administrator shall conduct such purchases and
sales to close positions with respect to covered commodities as
are necessary to ensure that the Administrator remains in
compliance with the prohibition under subparagraph (A).
(e) Authorization of Appropriations.--There are authorized to be
appropriated to the Administrator such sums as may be necessary to
establish and operate the Program, which shall remain available until
the date that is 5 years after the date of enactment of this Act.
SEC. 4. ASSISTING SMALL BUSINESSES TRANSACTING IN COMMODITY FUTURES
MARKETS.
(a) Agreements.--
(1) In general.--The Administrator, in accordance with the
other provisions of this subsection, shall enter into
agreements with eligible entities that have been accepted for
participation in the Program for the purpose of assisting those
eligible entities in transacting in commodity futures markets
with respect to any commodity selected by the Administrator
under subsection (b).
(2) Requirements.--
(A) In general.--Subject to subparagraphs (C) and
(D), an eligible entity may enter into 1 or more
agreements under this subsection under which the
eligible entity agrees to purchase a covered commodity
(or a derivative, the price of which is related to a
covered commodity) at a price established by the
Administrator for the duration of the agreement.
(B) Agreements offered.--In determining which
agreements to offer to an eligible entity under this
subsection, the Administrator shall consider--
(i) how closely the agreement correlates
with the actual costs of the eligible entity
and whether an agreement already offered under
this subsection provides similar benefits;
(ii) how to minimize complexity for the
eligible entity;
(iii) how to reduce friction in trading
costs with respect to covered commodities; and
(iv) how to minimize the number and type of
market positions of the Program in order to
reduce costs and the potential for errors.
(C) Offered at cost.--An agreement under this
subsection shall offer to the applicable eligible
entity the covered commodity (or derivative, as
applicable) that is the subject of the agreement at
cost, including any fees and commissions incurred by
the Administrator in procuring the covered commodity or
derivative.
(D) Types of agreements.--
(i) In general.--The Administrator, through
the Program, may offer to enter into a call
option purchase agreement with an eligible
entity to protect the eligible entity in any
case in which the price of the applicable
covered commodity increases by more than 5
percent.
(ii) Payment.--Each agreement under this
subsection shall clearly state that--
(I) the applicable eligible entity
shall be responsible for all costs
associated with the agreement; and
(II) any initial costs shall be
paid at the time that the applicable
eligible entity enters into the
agreement.
(E) Duration.--
(i) In general.--An agreement entered into
under this subsection shall be for a duration
of not less than 60 days and not more than 3
years.
(ii) Requirement.--The Administrator shall
ensure that the majority of agreements entered
into under this subsection shall be for a
duration of not less than 120 days.
(b) Covered Commodities.--
(1) In general.--Subject to paragraph (2), the
Administrator shall determine which commodities shall be
eligible to be the subject of agreements entered into under
subsection (a).
(2) Requirements.--In carrying out paragraph (1), the
Administrator--
(A) shall ensure that gasoline and diesel gasoline
are covered commodities;
(B) may offer agreements under subsection (a)
relating to not more than 3 covered commodities in
addition to gasoline and diesel gasoline during the 1-
year period beginning on the date on which the
Administrator establishes the Program, of which only 1
covered commodity may be intended for specific industry
use;
(C) may remove a commodity from being eligible to
be the subject of an agreement entered into subsection
(a) only after providing not less than 90 days notice
to participants in the Program; and
(D) shall use contracts available through entities
regulated by the Commission, such as designated
contract markets, to the maximum extent practicable.
(3) Factors for consideration.--In determining additional
commodities that can be the subject of agreements entered into
under subsection (a) (beyond the commodities that are required
to be included for that purpose under paragraph (2) of this
subsection), or in removing a commodity that is eligible to be
the subject of an agreement entered into under subsection (a),
the Administrator, in consultation with the Commission, shall--
(A) take into consideration--
(i) feedback from eligible entities and
stakeholders, including survey data that the
Administrator may collect, relating to demand
from eligible entities for the Administrator to
add to the list of covered commodities (beyond
the commodities that are required to be
classified as covered commodities under
paragraph (2) of this subsection), including
whether certain commodities may see higher
demand from eligible entities in specific
industries, even if demand is not as widespread
across all industries;
(ii) demand and transaction volume in
particular commodities;
(iii) available liquidity in new commodity
markets; and
(iv) the capacity of the Program with
respect to funding and staff expertise relating
to commodities; and
(B) give particular consideration to classifying
standard utilities, such as electricity and natural
gas, as covered commodities.
(c) Commodity Transactions by Administrator.--The Administrator--
(1) shall conduct or facilitate such transactions in
commodity derivatives markets as the Administrator determines
to be necessary to fulfill the obligations of the Program under
agreements entered into with eligible entities under subsection
(a); and
(2) may enter into an agreement with a commodity trading
advisor or futures commission merchant to carry out paragraph
(1).
(d) Use of Proceeds.--The Administrator shall--
(1) use any proceeds earned by the Program in a fiscal year
to offset the operating costs of the Program for that fiscal
year; and
(2) return any proceeds beyond the proceeds required to
carry out paragraph (1) to the general fund of the Treasury.
SEC. 5. REPORTS.
(a) Initial Report.--Not later than 120 days after the date of
enactment of this Act, the Administrator shall submit to the Committee
on Small Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives a report, which shall
include--
(1) a description of the structure of, and procedures for,
the Program, including how covered commodities are selected;
(2) a plan for management of the Pro