What’s in the new federal relief bill?

Congress Passes Billions in Arts Relief:
More PPP and Unemployment, Grants for Performing Arts Venues,
Cultural Organizations, Museums and Cinemas
updated 2-17-2021

About the relief bill
On Monday December 21, 2020 both the US Senate and US House of Representatives passed H.R. 133, a massive $2.3 trillion spending bill that included a more than $900 billion pandemic relief package joined with a $1.4 trillion spending bill for FY2021.  President Trump signed it into law on December 27.

The legislation passed by Congress at the end of December will provide relevant resources that will be administered by the SBA. SBA and the Department of the Treasury are in the process of writing the rules and regulations to manage these programs. here is significant relief for the arts industry contained in the bill, including:

  • an extension of Federal Pandemic Unemployment programs (with an additional $300 to all weekly benefits)
  • $284 billion for forgivable Paycheck Protection Program (PPP) loans (allowing many apply for a second loan)
  • $15 billion in relief grants for entities and individuals operating live performance venues, performing arts organizations, museums, independent movie theaters, and talent agencies
  • an increase of $5.2 million each in funding for the National Endowment for the Arts and National Endowment for the Humanities ($167.5 million each in FY2021).

Arts Wisconsin has been advocating for much of the relief  in the bill, with Americans for the ArtsNational Independent Venue Association and many other statewide and national organizations. This represent the single largest amount of funding for the arts ever passed by Congress.   The bill includes:

“Save Our Stages” Grants- $15 Billion through SBA

This program will be administered and funding distributed by the Small Business Administration (SBA). The SBA will interpret this law and define eligibility, priority, and allowable expenses for all grants awarded under this program.  NIVA has created a dedicated web-page with information on the bill. They will continue to update the page as more information becomes available.  Applications will start when SBA is ready to administer this new program – most likely by the end of January 2021.

Who is Eligible?

  • Eligible persons or entities are for-profit or nonprofit live performance venue operators or promoters, performing arts organizations, museums, talent representatives, theatrical producers, and independent movie theaters operating before February 29, 2020 that can show gross earned revenue in any calendar quarter of 2020 that was 25% less than the same calendar quarter of 2019. On the date the grant is issued, eligible entities must be operating or intending to operate in the future.
  • Live performance venues, performing arts organizations and producers must make at least 70% of their earned revenue from tickets or admission charges for live events, concessions or merchandise at those events, and/or nonprofit educational activities. Events must be marketed through print or online media, admission must be charged, staff and performers must be fairly paid, and venues must have a clearly defined audience and performance areas (stage), employ certain positions (one or more persons doing at least two of the following: sound engineer, stage manager, security personnel, box office manager, booker, or promoter) and use certain equipment (mixing equipment, PA system, and lighting rig).
  • Museums must operate a museum as its principal business with indoor exhibition spaces subject to pandemic restrictions, and have at least one regularly programmed auditorium, lecture hall, etc. with fixed seating.
  • Talent Representatives must have 70% of operations be representing professional artists for live performances as described for live performance venues.
  • Movies theaters must have at least one screen with a projection booth, a seating area for an audience, market show-time listings by print or electronic means, and charge admission.
  • Eligible independent entities cannot be issuer of securities on a national securities exchange, receive more than 10% of gross revenue from the federal government, or offer performances, services, or merchandise of an excessive sexual nature. Eligible businesses may not have more than two of the following three characteristics: have venues in more than one country, or more than ten states, or have had more than 500 FTE employees as of February 29, 2020.
  • Calculations: Full Time Equivalent Employees are 30+hr./wk. = 1 FTE and 10-30 hrs./wk. =.5 FTE. CARES Act funding should not be counted toward gross revenue. Accrual accounting should be used to determine revenue. SBA may use alternate methods to determine loss of seasonal employers.

What is the Priority of Initial Grant Awards?

  • In the first 14 days, to be awarded initial grant funding from the SBA, the entity or individual must have total revenue during the period beginning April 1, 2020 and ending December 31, 2020 that is not more than 10% of the total revenue during the period beginning April 1, 2019 and ending December 31, 2019 due to the COVID-19 pandemic.
  • In the second 14 days, to be awarded initial grant funding from the SBA, the entity or individual must have total revenue during the period beginning April 1, 2020 and ending December 31, 2020 that is not more than 30% of the total revenue during the period beginning April 1, 2019 and ending December 31, 2019 due to the COVID-19 pandemic.
  • After the first 28 days, other initial grants will be awarded through the Small Business Administration (SBA), which may spend no more than 80% of the total funding during the 28-day priority period. Also, $2 billion will be set aside for entities with fewer than 50 full-time employees. No more than five affiliates of an individual or entity may receive funding.

How much are the Grant Amounts?

  • Initial grants will be equal to 45% of gross earned revenue during 2019 or 10 million, whichever is less. Entities that began operations after January 1, 2019 will receive 45% of the average monthly gross earned revenue multiplied by the number of months in operation.
  • Additional grants of 50% of the initial grant amount may be awarded if the entity or individual can show as of April 1, 2021 they made 30% or less in total revenue for the most recent calendar quarter than that same period in 2019 due to the COVID-19 pandemic.
  • The total of the initial and additional grants awarded may not exceed $10 million.

What are the Allowable Expenses?

  • Initial grants must be used for allowable expenses incurred between March 1, 2020 and December 31, 2021.
  • Additional grants must be used for allowable expenses incurred before June 30, 2022.
  • Allowable expenses include payroll, equipment, rent, insurance, worker protection expenditures, most mortgage payments, and utilities, as well as advertising, travel and capital expenditures for live performances.
  • Prohibited expenses include the purchase of real estate of any payment on a mortgage initiated after February 15, 2020. The funds may not be re-loaned or invested, or used to make political contributions.
  • Grant use will be reviewed by the SBA to determine fraud, noncompliance, or misspent funds and grant recipients will need to retain 4 years of employment record and 3 years of other records following receipt of the grant.

Paycheck Protection Program (PPP) Loans- $284 Billion

This program will be administered by the Small Business Administration (SBA) and funding distributed by qualified lenders. The SBA will interpret this law and define eligibility, forgiveness, and allowable expenses for all loans awarded under this program.

  • Entities with fewer than 300 employees that can show a 30% reduction of revenue from any single quarter of 2019 to the corresponding quarter of 2020 as a result of the pandemic, may receive a second forgivable Paycheck Protection Program (PPP) loan equal to 2.5 times that entity’s average monthly payroll, up to $2 million. Separate calculations are required for those not in operation for all of 2019.
  • Forgivable expenses are expanded to include software or cloud computing services for a wide variety of business purposes, property damage caused by riots vandalism or looting in 2020 and not covered by insurance, supplier costs necessary for business, and investments in facility modifications and personal protective equipment to operate safely during the COVID-19 pandemic.
  • Gross taxable income does not include first and second PPP loans.
  • Loan forgiveness process is simplified for borrowers with PPP loans of $150,000 or less. SBA is required within 24 days of passage of this Act, to provide a forgiveness form for these loans less than one page in length, requiring only the number of employees the recipient was able to retain because of the covered loan, the estimated amount of the covered loan amount spent on payroll costs, and the total loan value.
  • $25 billion set aside for PPP loans no greater than $250,000 for small businesses with 10 or fewer employees.

Federal Unemployment Assistance

These programs will be administered, and benefits distributed, by the Wisconsin Department of Workforce Development.  Click here for updated info as it is available.

  • Pandemic Unemployment Assistance (PUA) is extended by 11 weeks (from 39 to 50 possible weeks) until March 14, 2021. PUA provides federal funding to states for weekly unemployment insurance (UI) benefits to the self-employed and independent contractors (1099 “gig” workers) who are unemployed as a result of the pandemic.
  • Federal Pandemic Unemployment Compensation (FPUC) is reinstated for 11 weeks beginning December 26, 2020 through March 14, 2021. During that period FPUC will provide federal funding for a $300 increase to all UI weekly benefits resulting from the pandemic.
  • Pandemic Emergency Unemployment Compensation (PEUC) is extended by 11 weeks until March 14, 2021. PEUC will now provide federal funding for 24 weeks (increased form 13 weeks) of UI benefits after state UI benefits have been exhausted. If an individual has unused PEUC benefits on a claim after March 14, 2021, they may continue to receive those weekly benefits until they expire, or for weeks claimed prior to April 5, 2021.
  • Mixed Earnings of wages and self-employed earnings shall be accounted for with Pandemic Emergency Unemployment Compensation (PEUC) by adding an additional $100 to the weekly benefit of claimants that earned at least $5,000 in self-employed income in the most recent taxable year.
  • Extended Benefits (EB) which provides federal funding for 6 weeks of UI benefits after both state UI benefits and PEUC benefits have been exhausted, will need to be exhausted before a claimant may receive the additional 11 weeks of PEUC added in this Act. Unemployed claimants that have exhausted 12 weeks of state UI, 13 weeks of PEUC and have used only some of the 6 weeks of Extended Benefits will need to exhaust all EB weeks before receiving the additional 11 weeks of PEUC benefits.
  • Emergency Unemployment Relief for Non-Profits is extended by 11 weeks until March 14, 2021 and pays 50% of unemployment expenses incurred by nonprofits due to the pandemic.

Thanks to the Americans for the Arts, State Arts Action Network, Cultural Advocacy Group, Be An #ArtsHero,#SaveOurStages, Broadway League, League of American Orchestras, Black Theatre United, Department of Professional Employees, AFL-CIO, and National Independent Venue Association, Association of Chambers of Commerce Executives, Small Business Administration (SBA), and The United States Conference of Mayors, and to advocates throughout Wisconsin, for helping to make this landmark legislation happen and move it forward.

updated 1-6-2021