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.