S. 202 — Helping Small Businesses THRIVE Act

This section defines terms used in the Act, including (1) Administrator as the Small Business Administration Administrator; (2) covered commodity as a commodity eligible under section 4(b) for agreements under section 4(a); (3) eligible entity as a small business concern (as defined in 15 U.S.C. 632) excluding financial institutions, certain Commission-regulated entities, investment advisers or brokers required to register with the SEC, businesses operating less than one year, or others necessary to preserve program integrity; (4) Program as the Helping Small Businesses Thrive Program established under section 3(a); and (5) resource partners as small business development centers, women's business centers (15 U.S.C. 656), SCORE chapters (15 U.S.C. 637(b)(1)(B)), and Veteran Business Outreach Centers (15 U.S.C. 657b).

This section establishes within the Small Business Administration (SBA), not later than one year after enactment and in consultation with the Federal Trade Commission, Treasury Secretary, and other officials, the Helping Small Businesses Thrive Program—a pilot program to assist eligible entities (i.e., certain small businesses incurring covered commodity costs) in limiting risks from rising input costs. The section requires the SBA Administrator to (1) accept applications from eligible entities, including information on commodity expenses to assess benefits of program agreements; (2) post public guidance on the SBA website to help entities evaluate program participation, covering program purpose, commodity cost determination, expense thresholds, optimal hedging percentages, and revenue model impacts; and (3) conduct outreach to small businesses—including non-eligible ones—via informational materials to small business centers and partners, webinars or events, and a website and hotline for questions and assistance. In administering the program, the Administrator may issue rules, form and register a commodity pool as a commodity pool operator under the Commodity Exchange Act, and conduct necessary purchases and sales of covered commodities without taking physical delivery except in extreme circumstances. The section authorizes appropriations to the SBA Administrator as necessary to establish and operate the program, to remain available until five years after enactment.

This section establishes a program under which the Administrator enters into agreements with eligible entities (small businesses) to assist them in transacting in commodity futures markets for covered commodities, including purchase agreements for commodities or related derivatives at cost (with all costs paid upfront by the entity) and call option purchase agreements to protect against price increases exceeding 5 percent, for durations of 60 days to 3 years (with the majority at least 120 days). The Administrator must designate gasoline and diesel as covered commodities and may add up to 3 more during the program's first year (of which only 1 for specific industry use), with removals requiring 90 days' notice; selections prioritize feedback from entities, market demand and liquidity, program capacity, and utilities such as electricity and natural gas, using contracts from Commission-regulated entities (e.g., designated contract markets). The Administrator conducts necessary derivative transactions to fulfill agreements (potentially via commodity trading advisors or futures commission merchants) and uses program proceeds to offset operating costs, returning excess proceeds to the Treasury general fund.

This section directs the Administrator to submit to the Senate Committee on Small Business and Entrepreneurship and the House Committee on Small Business (1) an initial report not later than 120 days after enactment describing the program's structure and procedures (including covered commodity selection), management plan, and merit-based review process for selecting eligible entities; and (2) annual reports beginning one year after enactment detailing, for the covered period, the number of applications received, agreements executed under section 4(a), total notional value of covered commodities in those agreements (disaggregated by commodity), and program effects on participants (including costs, benefits, and expansion plans). The section limits collection of participant effect information to no more frequently than annually or upon agreement termination under section 4(a), whichever is less frequent generally, or more frequent during the first two fiscal years of an entity's participation.