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Dear Friends and Colleagues:
On Monday, July 27, Senate Republican leadership released its proposal for the next COVID-19 relief package in the form of the HEALS Act which, combined with the House's HEROES Act (passed in May), and numerous stand-alone bills introduced in both chambers, form a mountain of proposals that may be incorporated, adapted, and shaped into a final package for passage before Congress adjourns for the August recess.
With thanks to PAA member organization, the League of American Orchestras, we have summarized several key components for your review. Please also check with the PAA Member website, relevant to your performance genre, for additional information and take action now.
- Pandemic Unemployment Benefits: House leadership has proposed extending the CARES Act's $600/week pandemic unemployment compensation through January 31, 2021, however, the Senate proposal reduces the federal benefit to $200/week through September, and then in October, this would be replaced with a payment (up to $500) that, when combined with the state unemployment payment, would amount to 70% of lost wages. For nonprofits that self-insure for unemployment benefits, the Senate leadership proposal would increase the reimbursement to nonprofits from 50% to 75% of the costs they incur through December 31, 2020.
We are asking Congress to immediately expand the duration of Federal Pandemic Unemployment Compensation and improve guidelines for Pandemic Unemployment Assistance to better support all individual artists and all those making a living from the arts on a pay per service arrangement with mixed W-2 and 1099 income sources. We are also asking Congress to increase the federal unemployment insurance reimbursement for self-funded nonprofits to 100% of costs.
- PPP and Forgivable Loan Eligibility:
Highlights from the Senate leadership's Paycheck Protection Program proposal would:
- simplify loan forgiveness procedures
- combine $100 billion in remaining PPP funding and $90 billion in new funding to support new and second forgivable loans
- open a new round of applications through December 31, 2020, while expanding allowable expenses and providing greater flexibility in selecting a loan's covered period and reducing the maximum loan amount to $2 million
- establish a "second draw opportunity" for current PPP recipients, applying new eligibility restrictions that include organizational size limits, a 300-employee cap, and a minimum 50% gross revenue decline comparing one of the first two quarters of 2020 to the same quarter in 2019
- sets aside $25 billion in funds for entities employing 10 or fewer employees
The House leadership's Paycheck Protection Program proposal, outlined in the HEROES Act passed in May, includes provisions that would:
- allow access to loans for nonprofit organizations of all sizes
- create a 25% set-aside of remaining PPP funds for business with 10 or fewer employees
- create a 25% set-aside of remaining PPP funds for all nonprofits, half of which would be reserved for those with fewer than 500 employees
We are asking Congress to expand and recapitalize the Paycheck Protection Program resources, provide new opportunities for those that have exhausted initial PPP funds, and ensure support for nonprofits of all sizes to support the arts workforce and its service to communities.
- Tax Credits: number of new and expanded tax credits that would apply to employee retention/rehiring, offsetting fixed costs amidst closures, personal protective equipment costs, COVID-19 adaptations for workplaces and public spaces, business interruptions for self-employed workers, and more are included in both the House HEROES Act and Senate tax proposals. The Senate proposal would increase the Employee Retention Tax Credit's percentage of covered wages to 65% of up to $10,000 in employee compensation per quarter for three quarters (up to $19,500 in credits per employee for the calendar year), and the House proposal would increase the percentage to 80% of up to $15,000 per quarter for three quarters, (up to $36,000 in credits per employee for the calendar year).
We are asking Congress to ensure that tax credits take the form of refundable payroll tax credits to ensure full nonprofit eligibility, and that they are compatible with access to PPP funding and other forms of federal relief.
- Charitable Giving Incentives: While not yet included in the proposals from House and Senate leadership, advocates are asking that final negotiations include the Universal Giving Pandemic Response Act (S. 4032/H.R. 7324). This provision has gained bipartisan support and would expand the current above-the-line deduction for charitable giving created under the CARES Act, lifting the current $300 cap and making available an above-the-line deduction for charitable giving on federal income taxes valued at up to one-third of the standard deduction (around $4,000 for an individual filer and $8,000 for married joint filers).
We are asking Congress to incentivize new and increased charitable giving by including an expanded Universal Charitable Deduction in the next COVID-19 relief package.
- Federal Funding: Senate leadership is aiming for $1 trillion in new expenditures, while the House approach calls for $3 trillion in new COVID-19 relief. House and Senate negotiators will also need to work out differences in proposals to increase public education funding, improve equitable broadband access, and create new job training programs. While the House proposal includes $10 million in additional COVID-19 relief administered by the National Endowment for the Arts, the Senate leadership proposal does not. For a more detailed explanation of this topic, please visit the League's website.
We are asking Congress to include federal funding that will support the arts sector and its service to communities, support a complete education for all students through federal education funding and distance learning resources, provide relief administered through state and local governments, and adopt an emergency broadband benefit to support more equitable participation in artistic, educational, and cultural activity taking place online.
Please see the PAA COVID-19 Resources Page for additional information on all the above topics, along with helpful links for your specific arts area.
Thank you for all your support and advocacy on behalf of all those who work in the arts.
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