The new Covid congressional relief bill aims to provide gig employees and freelancers with ongoing financial assistance, including those dramatists who do not apply for conventional unemployment relief. The COVID Relief Bill is over 5,600 pages long; there was not enough time for either the Assembly, the Senate, or the theatre world at large to examine it entirely.
In its present form, though, it has been stated that it provides provisions for relief such as:
- Extension of the Pandemic Unemployment Assistance (PUA) program to 5 April 2021 (starting in mid-March with phase-out), including an extension to 50 weeks of the qualifying period;
- An expansion of the salaried/hourly employers' Pandemic Unemployment Emergency Compensation (PEUC) scheme to April 5, 2021, after the claimant has expended his Federal Unemployment Benefits (UI);
- "Mixed earners" who were ineligible for PUA with 1099/W2 wages will receive a $100 weekly incentive for the length of their state UI/PEUC benefits;
- And all unemployment applicants (State UI, PUA, PEUC) will receive an additional $300 a week from 26 December 2020 to 14 March 2021.
The proposed bill would also ensure that the National Endowment for the Arts and the National Endowment for the Humanities remain federally funded for another year. An appropriation of $167.5 million will be earned from each agency, which is $5.25 million higher than the amount adopted in 2020. This relief bill contains language that would allow grant funds that were appropriated for operational costs in both 2019 and 2020 to be used. Another round of the Paycheck Security Program (PPP) and the bipartisan Save Our Stages Act are both scheduled to be included in this bill. As part of Congress' overall $900 billion relief program, Save Our Stages will offer nearly $15 billion in federal relief to entertainment centers, including concert halls and theater operators.
The Save our Stages grant scheme will contain the following terms:
- Using a full-time comparable estimate, $2 billion in overall funds would be allocated for grants to companies with 50 or less workers.
- In 2019, candidates may measure their grant volume based on 45 percent of the received income of an individual.
- Net grants earned from a qualifying agency per beneficiary are capped at $10 million.
- Grants may be used from 1 March 2020 to 31 December 2021 for expenses incurred (and supplemental grants may be used from March 1, 2020 to June 30, 2022).
- Payroll, including fees to independent contractors, covers allowable expenses; rent; fixed costs such as mortgage and interest payments; as well as repair, administrative and other expenses.
For the grants, theatres meeting the following requirements would be eligible to apply:
- Theatres may qualify to apply, even though their performance space is not owned by them. "Operators of live performing arts organizations" are clearly eligible and are defined as a person or company that "organizes, promotes, produces, manages or hosts live concerts, comedy shows, theatrical productions, other performing artist events as a principal business activity."
- For-profit and non-profit candidates, as well as independent owners of motion picture theatres, museum operators, and talent members, are given eligibility.
- In order to continue to apply, applicants must show a minimum 25 percent reduction in gross earned revenue in one calendar quarter of 2020 relative to the same quarter in 2019.
- An borrower may have obtained a forgivable PPP loan in 2020, but must consider whether to apply for an SOS grant or to apply for a second PPP loan after signing into law the new bill.
- Eligible applicants must apply a certificate in good faith specifying that "the uncertainty of current economic conditions makes necessary the grant to support the ongoing operations," and that those applicants must comply with the provisions that the beneficiary "will not abrogate existing collective bargaining agreements" and "will remain neutral in any union organizing effort."
Since March 2020, many theatres around the nation have been closed, and will remain closed for many more months to come. Live theatre will potentially not return until the fall of 2021, at the earliest, according to Dr. Fauci's estimates. "This bill gives [theatres] a fighting chance," Senate Minority Leader Chuck Schumer said on Sunday, December 20, during a congressional floor address. Hopefully, the latest Covid relief bill will prove to be a step forward, but we do have a lot of work to do to ensure that the theatre industry enjoys complete federal funding during this extraordinary period in American history that it urgently needs. In a landmark letter writing campaign to the new government, we are calling on DG representatives to support us.
FY21 Year-End Omnibus Provisions and COVID-19 Relief
In the coming weeks, more information about the timing of access to relief and specific eligibility requirements will be discussed in guidelines produced by the Small Business Administration, the U.S. Treasury Department, and other federal and state departments. As soon as more information is available, TCG will be offering more updates.
More than $900 billion in COVID-19 resources, along with $1.4 trillion in FY21 annual federal financing, will be available. The bill provides additional tools to fund arts groups, artists, and urban communities alongside funding for vaccination delivery and immediate relief payments.
The full text of the legislation amounts to nearly 5,600 pages. Below is an overview, with PDF page numbers for each section of the bill noted below:
Save Our Stages (begins p.2124):
The Small Business Administration will implement a new $15 billion grant program dedicated to providing support for “shuttered venue operators” and will write the rules for how to administer the program within 10 days after the bill is signed into law.
Eligible entities:
- Theatres can qualify to apply, even if they do not own their performance space. “Live performing arts organization operators” are specifically eligible and are defined as an individual or entity that “as a principal business activity, organizes, promotes, produces, manages, or hosts live concerts, comedy shows, theatrical productions, other events by performing artists."
- Eligibility is offered to for-profit and nonprofit applicants, as well as independent motion picture theatre operators, museum operators, and talent representatives.
- Applicants must demonstrate a minimum 25% decline in gross earned revenue in one calendar quarter of 2020, compared to the same quarter in 2019, to qualify to apply.
- An applicant may have received a PPP forgivable loan in 2020, but must choose whether to seek an SOS grant or apply for a second PPP loan after the new bill is signed into law.
Grant amounts:
- Applicants will calculate their grant amount based on 45% of an entity's earned revenue in 2019.
- Total grants received by an eligible entity are capped at $10 million per recipient.
- After receiving an initial grant, qualifying applicants that are experiencing a 70% revenue decline as of April 1, 2021 can receive a supplemental grant equal to half of their initial grant award. Supplemental grant awards will only be awarded after applications received in the first 60 days of the program have been processed.
Eligible costs:
Grants may be used for costs incurred from March 1, 2020 through December 31, 2021 (and supplemental grants may be used from March 1, 2020 to June 30, 2022).
Allowable expenses include payroll, including payments to independent contractors; rent; fixed costs like mortgage and debt payments; as well as maintenance expenses, administrative costs, and other expenses.
Priority period and non-priority reserve:
- $2 billion of overall funding will be reserved for grants to entities with 50 or fewer employees, using a full-time equivalent calculation.
- The program will include two priority application periods that may be difficult for theatres to access, due to ongoing contributed revenue received throughout the pandemic.
- The first 14 days will limit access to applicants that demonstrate a revenue decline of 90% or more from April 1 to December 31, 2020, compared to the same time period in 2019.
- The second 14 days will be limited to those with a revenue decline of 70% or more.
- Relief funds already accessed through the CARES act will not count as revenue for this calculation, and seasonal organizations will use an alternate time period for the comparison.
- At the request of nonprofit advocates, 20% of funds will be reserved for availability after the conclusion of the priority period.
Certifications:
Paycheck Protection Program (PPP) (begins p.2043):
More than $280 billion in new PPP relief will be available, including a second opportunity to apply for forgivable loans, accessible through March 31, 2021. The SBA is directed to issue complete guidelines within 10 days after passage for implementing the next phase of PPP, which will include important details.
Eligible expenses:
This expansion applies to prior PPP loans that have not yet been forgiven, as well as new PPP loans.
Loan forgiveness (begins p.2043; 2055; 4929):
The bill maintains the current requirement that 60% of costs be attributed to payroll in order to achieve full loan forgiveness.
The prior requirement that borrowers deduct an Economic Injury Disaster Loan amount from their forgivable PPP loan amount has been repealed.
Borrowers will be eligible for loan forgiveness equal to the amount of allowable costs spent during a period of their choosing, between 8 and 24 weeks following the origination date of the loan.
The SBA will rapidly set in place a new streamlined loan forgiveness process for borrowers with loans of $150,000 and under.
Second round (begins p.2064):
As with the first round of PPP, loan amounts equal 2.5 times average monthly payroll costs.
Employee Retention Tax Credits (ERTC) (begins p.4927):
The Employee Retention Tax Credits (ERTC) will be extended through July 1, 2021 and significantly expanded, raising the credit from 50% to 70% of qualified wages. The value of the credit will increase from up to $10,000 in wages/year to $10,000 in wages/quarter per employee for the first two quarters of 2021, amounting to up to $14,000 in refundable payroll tax credits per employee. Employers that receive Paycheck Protection Program loans will qualify for the ERTC for wages that are not paid for with a forgivable PPP loan. The ERTC’s quarterly minimum 20% gross receipts decline requirement continues to be waived for “an employer whose trade or business operations are fully or partially suspended during a calendar quarter due to a governmental order.”
Charitable Giving Incentives (begins p.4951):
The new universal charitable deduction for non-itemizers that was created under the CARES Act has been extended to apply throughout the 2021 tax year. Taxpayers who do not itemize deductions will once again be incentivized to give more, as single filers may take up to a $300 deduction for giving, and now joint filers who were limited to a $300 deduction in 2020 will be eligible for a $600 deduction for cash contributions in 2021. Also extended through 2021, the limitation on the percentage of Adjusted Gross Income (AGI) eligible for the charitable deduction has been lifted for those who itemize their tax returns, and the limit on deductions for corporate contributions is raised to 25% of taxable income.
Relief for Nonprofits Self-Insuring Unemployment Benefits (begins p.1933):
Many theatres are among nonprofits that self-insure unemployment benefits rather than pay state unemployment taxes. Nonprofit liability was reduced by 50% under the CARES Act, and this form of relief is now extended through March 14, 2021.
Pandemic Unemployment Assistance and Compensation (begins p.1928):
Pandemic Unemployment Assistance will be extended, providing federal unemployment benefits for self-employed and gig workers who are affected directly by the pandemic but are not typically eligible for state unemployment benefits. Federal Pandemic Unemployment Compensation benefits that expired earlier this year are reinstated at $300 per week, through March 14, 2021. An extra $100 per week will be available for workers who have both W-2 and self-employment income but whose base benefit calculation doesn’t take their self-employment into account.
Paid Sick and Family Leave (begins p.2033; 2438):
The refundable payroll tax credits for paid sick and family leave that were established in the Families First Coronavirus Response Act, are extended through March 31, 2021.
National Endowment for the Arts (begins p.869, 885):
For FY21, the National Endowment for the Arts and the National Endowment for the Humanities each receive an appropriation of $167.5 million, $5.25 million more than the 2020 enacted levels. The bill includes language that permits grant funds appropriated this year and in fiscal years 2019 and 2020 to be used for operating expenses.
Education Funding (begins p.1859):
The bill provides an $82 billion Education Stabilization Fund to support the educational needs of States, school districts, and institutions of higher education and the students they serve in response to coronavirus. The FY21 annual funding for the U.S. Department of Education’s Arts in Education program fund has been approved at $30.5 million.
Broadband Funding (begins p.2417):
$7 billion for broadband, including funding for those struggling to afford internet access, $1 billion for broadband on tribal lands, and $300 million for rural broadband deployment.
Public Broadcasting (begins p.1074):
$475 million for the Corporation for Public Broadcasting (CPB), in 2023 advance funding, an increase of $10 million above the 2020 enacted level. In addition, the bill includes $20 million for the interconnection system and system wide infrastructure, the same as the 2020 enacted level.
