II
119THCONGRESS
1
STSESSION S. 202
To require the Administrator of the Small Business Administration to estab-
lish a program to allow small business concerns to purchase certain
commodities futures, and for other purposes.
IN THE SENATE OF THE UNITED STATES
JANUARY23, 2025
Mrs. S
HAHEEN(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 Adminis-
tration 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 Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Helping Small Busi-4
nesses To Hedge Risk and Insure against Volatile Ex-5
penses Act’’ or the ‘‘Helping Small Businesses THRIVE 6
Act’’. 7
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SEC. 2. DEFINITIONS. 1
In this Act: 2
(1) A
DMINISTRATOR.—The term ‘‘Adminis-3
trator’’ means the Administrator of the Small Busi-4
ness Administration. 5
(2) C
OMMISSION; COMMODITY; COMMODITY 6
POOL; COMMODITY TRADING ADVISOR ; FUTURE DE-7
LIVERY; FUTURES COMMISSION MERCHANT .—The 8
terms ‘‘Commission’’, ‘‘commodity’’, ‘‘commodity 9
pool’’, ‘‘commodity trading advisor’’, ‘‘future deliv-10
ery’’, and ‘‘futures commission merchant’’ have the 11
meanings given those terms in section 1a of the 12
Commodity Exchange Act (7 U.S.C. 1a). 13
(3) C
OVERED COMMODITY .—The term ‘‘covered 14
commodity’’ means a commodity that the Adminis-15
trator, under section 4(b), determines is eligible to 16
be the subject of an agreement entered into under 17
section 4(a). 18
(4) E
LIGIBLE ENTITY.—The term ‘‘eligible enti-19
ty’’— 20
(A) means a small business concern; and 21
(B) does not include a small business con-22
cern that— 23
(i) is, or is owned or controlled by an 24
entity that is, a financial institution (as de-25
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fined in section 509 of the Gramm-Leach- 1
Bliley Act (15 U.S.C. 6809)); 2
(ii) is, or is owned or controlled by an 3
entity that is, with respect to any financial 4
activity, subject to the jurisdiction of the 5
Commission under the Commodity Ex-6
change Act (7 U.S.C. 1 et seq.); 7
(iii) is, or is owned or controlled by, 8
an investment adviser (as defined in sec-9
tion 202(a) of the Investment Advisers Act 10
of 1940 (15 U.S.C. 80b–2(a))) that is re-11
quired to register with the Securities and 12
Exchange Commission under section 203 13
of that Act (15 U.S.C. 80b–3); 14
(iv) is, or is owned or controlled by, a 15
broker (as defined in section 3(a) of the 16
Securities Exchange Act of 1934 (15 17
U.S.C. 78c(a))); 18
(v) has been in operation for less than 19
1 year, as of the date on which the small 20
business concern submits an application 21
under section 3(b); or 22
(vi) the Administrator otherwise de-23
termines should be excluded in order— 24
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(I) to preserve the integrity of 1
the Program; and 2
(II) to ensure that the focus of 3
the Program remains on small busi-4
ness concerns desiring to participate 5
in the Program to maximize stability 6
with respect to the direct operating 7
costs of those small business concerns. 8
(5) P
ROGRAM.—The term ‘‘Program’’ means 9
the Helping Small Businesses Thrive Program es-10
tablished under section 3(a). 11
(6) R
ESOURCE PARTNERS .—The term ‘‘re-12
source partners’’ means— 13
(A) small business development centers; 14
(B) women’s business centers described in 15
section 29 of the Small Business Act (15 16
U.S.C. 656); 17
(C) chapters of the Service Corps of Re-18
tired Executives established under section 19
8(b)(1)(B) of the Small Business Act (15 20
U.S.C. 637(b)(1)(B)); and 21
(D) Veteran Business Outreach Centers 22
described in section 32 of the Small Business 23
Act (15 U.S.C. 657b). 24
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(7) SMALL BUSINESS CONCERN ; SMALL BUSI-1
NESS DEVELOPMENT CENTER .—The terms ‘‘small 2
business concern’’ and ‘‘small business development 3
center’’ have the meanings given those terms in sec-4
tion 3 of the Small Business Act (15 U.S.C. 632). 5
SEC. 3. HELPING SMALL BUSINESSES THRIVE PROGRAM. 6
(a) E
STABLISHMENT AND PURPOSE.—Not later than 7
1 year after the date of enactment of this Act, the Admin-8
istrator shall, in consultation with the Commission, the 9
Secretary of the Treasury, and such other Federal officials 10
determined appropriate by the Administrator, establish 11
within the Small Business Administration a pilot pro-12
gram— 13
(1) which shall be known as the ‘‘Helping Small 14
Businesses Thrive Program’’; and 15
(2) the purpose of which shall be to assist eligi-16
ble entities in limiting the risk faced by those eligible 17
entities with respect to rising input costs from com-18
modities. 19
(b) A
PPLICATION.— 20
(1) I
N GENERAL.—An eligible entity seeking to 21
participate in the Program shall submit an applica-22
tion— 23
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(A) at such time, in such manner, and con-1
taining such information as the Administrator 2
determines to be necessary; 3
(B) that shall include information nec-4
essary to establish that the entity submitting 5
the application is an eligible entity; and 6
(C) that may include additional informa-7
tion to ensure that the Administrator, through 8
the Program, is able to properly assist the eligi-9
ble entity in determining whether entering into 10
an agreement under section 4(a) would be bene-11
ficial for the eligible entity, including a descrip-12
tion of expenses incurred by the eligible entity 13
relating to commodities. 14
(2) G
UIDANCE.—The Administrator shall de-15
velop guidance, which shall be posted on a publicly 16
available website of the Small Business Administra-17
tion, to assist an eligible entity in determining 18
whether the eligible entity should submit an applica-19
tion to participate in the Program and whether en-20
tering into an agreement under section 4(a) would 21
be beneficial for the eligible entity, including infor-22
mation regarding— 23
(A) the purpose of the Program, the prod-24
ucts the Program offers, and how those prod-25
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ucts can reduce exposure to price volatility for 1
eligible entities with respect to covered commod-2
ities; 3
(B) determining the cost of covered com-4
modities; 5
(C) the expenses of eligible entities relating 6
to each covered commodity, including when ex-7
penses for covered commodities incurred by an 8
eligible entity reach a level such that it might 9
not be beneficial for the eligible entity to par-10
ticipate in the Program; and 11
(D) the percentages of commodity-related 12
expenses for the eligible entity that are most 13
likely beneficial to offset through participation 14
in the Program; and 15
(E) the impact of the type of revenue of an 16
eligible entity, such as a cost-plus or highly 17
variable pricing model for revenue or long-term 18
recurring revenue. 19
(c) O
UTREACH AND CONSULTATION.—In carrying 20
out the Program, the Administrator shall conduct out-21
reach to small business concerns, including small business 22
concerns that are not eligible entities by operation of sec-23
tion 2(4)(B)(v), to share information regarding the Pro-24
gram and the benefits of the Program, including by— 25
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(1) providing informational materials to the 1
small business centers of the Small Business Admin-2
istration, small business stakeholders and trade as-3
sociations, and resource partners for distribution to 4
small business concerns; 5
(2) conducting webinars or in-person events 6
with small business concerns regarding the Program; 7
and 8
(3) operating a website and telephone line 9
that— 10
(A) offers additional information regarding 11
the Program; and 12
(B) allows a small business concern to ask 13
questions and obtain assistance in determining 14
whether the small business concern would ben-15
efit from participating in the Program. 16
(d) A
DMINISTRATION OFPROGRAM.—In carrying out 17
the Program, the following shall apply: 18
(1) The Administrator may— 19
(A) issue such rules as may be necessary; 20
and 21
(B) in consultation with the Commission, 22
form a commodity pool and apply for registra-23
tion as a commodity pool operator under the 24
Commodity Exchange Act (7 U.S.C. 1 et seq.). 25
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(2)(A) The Administrator may not take delivery 1
of any physical commodity except in extreme and ex-2
igent circumstances. 3
(B) The Administrator shall conduct such pur-4
chases and sales to close positions with respect to 5
covered commodities as are necessary to ensure that 6
the Administrator remains in compliance with the 7
prohibition under subparagraph (A). 8
(e) A
UTHORIZATION OF APPROPRIATIONS.—There 9
are authorized to be appropriated to the Administrator 10
such sums as may be necessary to establish and operate 11
the Program, which shall remain available until the date 12
that is 5 years after the date of enactment of this Act. 13
SEC. 4. ASSISTING SMALL BUSINESSES TRANSACTING IN 14
COMMODITY FUTURES MARKETS. 15
(a) A
GREEMENTS.— 16
(1) I
N GENERAL.—The Administrator, in ac-17
cordance with the other provisions of this subsection, 18
shall enter into agreements with eligible entities that 19
have been accepted for participation in the Program 20
for the purpose of assisting those eligible entities in 21
transacting in commodity futures markets with re-22
spect to any commodity selected by the Adminis-23
trator under subsection (b). 24
(2) R
EQUIREMENTS.— 25
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(A) IN GENERAL.—Subject to subpara-1
graphs (C) and (D), an eligible entity may 2
enter into 1 or more agreements under this 3
subsection under which the eligible entity 4
agrees to purchase a covered commodity (or a 5
derivative, the price of which is related to a cov-6
ered commodity) at a price established by the 7
Administrator for the duration of the agree-8
ment. 9
(B) A
GREEMENTS OFFERED .—In deter-10
mining which agreements to offer to an eligible 11
entity under this subsection, the Administrator 12
shall consider— 13
(i) how closely the agreement cor-14
relates with the actual costs of the eligible 15
entity and whether an agreement already 16
offered under this subsection provides simi-17
lar benefits; 18
(ii) how to minimize complexity for 19
the eligible entity; 20
(iii) how to reduce friction in trading 21
costs with respect to covered commodities; 22
and 23
(iv) how to minimize the number and 24
type of market positions of the Program in 25
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order to reduce costs and the potential for 1
errors. 2
(C) O
FFERED AT COST .—An agreement 3
under this subsection shall offer to the applica-4
ble eligible entity the covered commodity (or de-5
rivative, as applicable) that is the subject of the 6
agreement at cost, including any fees and com-7
missions incurred by the Administrator in pro-8
curing the covered commodity or derivative. 9
(D) T
YPES OF AGREEMENTS .— 10
(i) I
N GENERAL.—The Administrator, 11
through the Program, may offer to enter 12
into a call option purchase agreement with 13
an eligible entity to protect the eligible en-14
tity in any case in which the price of the 15
applicable covered commodity increases by 16
more than 5 percent. 17
(ii) P
AYMENT.—Each agreement 18
under this subsection shall clearly state 19
that— 20
(I) the applicable eligible entity 21
shall be responsible for all costs asso-22
ciated with the agreement; and 23
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(II) any initial costs shall be paid 1
at the time that the applicable eligible 2
entity enters into the agreement. 3
(E) D
URATION.— 4
(i) I
N GENERAL.—An agreement en-5
tered into under this subsection shall be 6
for a duration of not less than 60 days and 7
not more than 3 years. 8
(ii) R
EQUIREMENT.—The Adminis-9
trator shall ensure that the majority of 10
agreements entered into under this sub-11
section shall be for a duration of not less 12
than 120 days. 13
(b) C
OVEREDCOMMODITIES.— 14
(1) I
N GENERAL.—Subject to paragraph (2), 15
the Administrator shall determine which commod-16
ities shall be eligible to be the subject of agreements 17
entered into under subsection (a). 18
(2) R
EQUIREMENTS.—In carrying out para-19
graph (1), the Administrator— 20
(A) shall ensure that gasoline and diesel 21
gasoline are covered commodities; 22
(B) may offer agreements under subsection 23
(a) relating to not more than 3 covered com-24
modities in addition to gasoline and diesel gaso-25
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line during the 1-year period beginning on the 1
date on which the Administrator establishes the 2
Program, of which only 1 covered commodity 3
may be intended for specific industry use; 4
(C) may remove a commodity from being 5
eligible to be the subject of an agreement en-6
tered into subsection (a) only after providing 7
not less than 90 days notice to participants in 8
the Program; and 9
(D) shall use contracts available through 10
entities regulated by the Commission, such as 11
designated contract markets, to the maximum 12
extent practicable. 13
(3) F
ACTORS FOR CONSIDERATION .—In deter-14
mining additional commodities that can be the sub-15
ject of agreements entered into under subsection (a) 16
(beyond the commodities that are required to be in-17
cluded for that purpose under paragraph (2) of this 18
subsection), or in removing a commodity that is eli-19
gible to be the subject of an agreement entered into 20
under subsection (a), the Administrator, in consulta-21
tion with the Commission, shall— 22
(A) take into consideration— 23
(i) feedback from eligible entities and 24
stakeholders, including survey data that 25
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the Administrator may collect, relating to 1
demand from eligible entities for the Ad-2
ministrator to add to the list of covered 3
commodities (beyond the commodities that 4
are required to be classified as covered 5
commodities under paragraph (2) of this 6
subsection), including whether certain com-7
modities may see higher demand from eli-8
gible entities in specific industries, even if 9
demand is not as widespread across all in-10
dustries; 11
(ii) demand and transaction volume in 12
particular commodities; 13
(iii) available liquidity in new com-14
modity markets; and 15
(iv) the capacity of the Program with 16
respect to funding and staff expertise re-17
lating to commodities; and 18
(B) give particular consideration to 19
classifying standard utilities, such as electricity 20
and natural gas, as covered commodities. 21
(c) C
OMMODITY TRANSACTIONS BY ADMINIS-22
TRATOR.—The Administrator— 23
(1) shall conduct or facilitate such transactions 24
in commodity derivatives markets as the Adminis-25
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trator determines to be necessary to fulfill the obli-1
gations of the Program under agreements entered 2
into with eligible entities under subsection (a); and 3
(2) may enter into an agreement with a com-4
modity trading advisor or futures commission mer-5
chant to carry out paragraph (1). 6
(d) U
SE OFPROCEEDS.—The Administrator shall— 7
(1) use any proceeds earned by the Program in 8
a fiscal year to offset the operating costs of the Pro-9
gram for that fiscal year; and 10
(2) return any proceeds beyond the proceeds re-11
quired to carry out paragraph (1) to the general 12
fund of the Treasury. 13
SEC. 5. REPORTS. 14
(a) I
NITIALREPORT.—Not later than 120 days after 15
the date of enactment of this Act, the Administrator shall 16
submit to the Committee on Small Business and Entrepre-17
neurship of the Senate and the Committee on Small Busi-18
ness of the House of Representatives a report, which shall 19
include— 20
(1) a description of the structure of, and proce-21
dures for, the Program, including how covered com-22
modities are selected; 23
(2) a plan for management of the Program; and 24
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(3) a description of the merit-based review 1
process to be used in selecting eligible entities to 2
participate in the Program. 3
(b) A
NNUALREPORTS.— 4
(1) I
N GENERAL.—Not later than 1 year after 5
the date of enactment of this Act, and annually 6
thereafter, the Administrator shall submit to the 7
Committee on Small Business and Entrepreneurship 8
of the Senate and the Committee on Small Business 9
of the House of Representatives a report regarding 10
the Program, which shall include, for the period cov-11
ered by the report— 12
(A) the number of applications submitted 13
by eligible entities for participation in the Pro-14
gram; 15
(B) the number of agreements entered into 16
under section 4(a); 17
(C) the total notional value of the covered 18
commodities that were the subjects of the 19
agreements described in subparagraph (B), 20
which shall be disaggregated by covered com-21
modity; and 22
(D) the effect of the Program on the eligi-23
ble entities participating the Program, including 24
feedback from those eligible entities on any 25
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costs and benefits of the Program with respect 1
to the business operations of those eligible enti-2
ties, in particular with respect to expansion and 3
growth plans. 4
(2) L
IMITATION.— 5
(A) I
N GENERAL.—Except as provided in 6
subparagraph (B), in collecting information 7
from eligible entities for the purpose of carrying 8
out paragraph (1)(D), the Administrator may 9
not require an eligible entity to report to the 10
Administrator more frequently than upon the 11
termination of an agreement under section 4(a) 12
to which the eligible entity is a party or annu-13
ally, whichever is less frequent. 14
(B) E
XCEPTION.—For the first 2 fiscal 15
years after the fiscal year in which an eligible 16
entity enters into an agreement under section 17
4(a), the Administrator, for the purpose of car-18
rying out paragraph (1)(D), may not require an 19
eligible entity to report to the Administrator 20
more frequently than upon the termination of 21
an agreement under section 4(a) to which the 22
eligible entity is a party or annually, whichever 23
is more frequent. 24
Æ
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