119-s202

[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 Program; and

    (3) a description of the merit-based review process to be 
 used in selecting eligible entities to participate in the 
 Program.

    (b) Annual Reports.--

    (1) In general.--Not later than 1 year after the date of 
 enactment of this Act, and annually thereafter, 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 regarding the 
 Program, which shall include, for the period covered by the 
 report--
        (A) the number of applications submitted by 
 eligible entities for participation in the Program;
        (B) the number of agreements entered into under 
 

section 4

    (a) ;
            (C) the total notional value of the covered 
 commodities that were the subjects of the agreements 
 described in subparagraph
        (B) , which shall be 
 disaggregated by covered commodity; and
            (D) the effect of the Program on the eligible 
 entities participating the Program, including feedback 
 from those eligible entities on any costs and benefits 
 of the Program with respect to the business operations 
 of those eligible entities, in particular with respect 
 to expansion and growth plans.

    (2) Limitation.--
        (A) In general.--Except as provided in subparagraph
        (B) , in collecting information from eligible entities 
 for the purpose of carrying out paragraph

    (1)
            (D) , the 
 Administrator may not require an eligible entity to 
 report to the Administrator more frequently than upon 
 the termination of an agreement under 

section 4

    (a) to 
 which the eligible entity is a party or annually, 
 whichever is less frequent.
        (B) Exception.--For the first 2 fiscal years after 
 the fiscal year in which an eligible entity enters into 
 an agreement under 

section 4

    (a) , the Administrator, for 
 the purpose of carrying out paragraph

    (1)
            (D) , may not 
 require an eligible entity to report to the 
 Administrator more frequently than upon the termination 
 of an agreement under 

section 4

    (a) to which the 
 eligible entity is a party or annually, whichever is 
 more frequent.
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