[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5063 Introduced in Senate (IS)]

<DOC>






118th CONGRESS
  2d Session
                                S. 5063

 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

                           September 17, 2024

  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;
                    (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 
expended.

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 any of the 
                        following types of agreements with an eligible 
                        entity:
                                    (I) A futures purchase agreement 
                                under which the direct cost of the 
                                applicable covered commodity is 
                                established and maintained for the 
                                duration of the agreement.
                                    (II) A call option purchase 
                                agreement to protect the eligible 
                                entity in any case in which the price 
                                of the applicable covered commodity 
                                increases by more than 10 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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