NAEA Legislative Update on COVID-19 and the Cultural Sector
March 24, 2020
NAEA is actively engaged in monitoring possible support for the arts and cultural sector as part of a potential Federal Stimulus to offset the impact of COVID-19. U.S. Congressional discussions include:
- Additional support for the National Endowment for the Arts (NEA), National Endowment for the Humanities (NEH), and Institute of Museum and Library Services (IMLS).
- Many arts and cultural organizations may be eligible for support as small businesses and/or nonprofit organizations.
- Individual artists and staff may be eligible for unemployment (outside of usual requirements).
Note: This is a very fluid situation changing almost daily. Updates will be posted over time. The information will be shifting to help the field access relief vs. advocacy for including the arts and cultural sector in any stimulus funding packages once legislation is passed. There may also be a revisit of the universal charitable deduction for both itemizers and non-itemizers.
Additional Support for Federal Cultural Agencies: NEA and NEH
The national arts, arts education, and cultural organizations, including NAEA, have signed on to a request for an additional $4 billion for the Federal Cultural Agencies: National Endowment for the Arts and the National Endowment for the Humanities. So far, the U.S. House of Representatives is recommending a $300-million increase for each agency. The U.S. Senate is recommending a $100-million increase for each agency.
U.S. Senate Recommendations for Cultural Agencies in third Stimulus Package, so far:
- $100 million each for the National Endowment for the Arts and National Endowment for the Humanities
- $50 million for the Institute of Museum and Library Services
- $1 million for the John F. Kennedy Center for the Performing Arts
- $7.5 million for the Smithsonian Institution
Support for Arts and Cultural Organizations as Small Businesses or Nonprofits
The Federal government views nonprofit arts organizations as small businesses. Stimulus support may be geared to those small businesses working to keep people on their payrolls. The national arts, arts education, and cultural organizations, including NAEA, are requesting the following points be considered in any stimulus package to address the needs of the sector:
- Ensure that forgivable U.S. Small Business Administration disaster relief loans are streamlined and support all arts and culture workers by: specifying that access to forgivable loans is available for self-employed workers, increasing the employer eligibility threshold by applying the 500-employee cap to fulltime employees, and eliminating the employer size cap for nonprofit organizations.
- Support pandemic unemployment benefits for workers ineligible for state unemployment benefits, which will provide essential support for self-employed workers in the arts and culture sector.
- Support significant COVID-19 relief funding to be administered by the NEA, NEH, and IMLS. Waive matching requirements for grantees for the remainder of FY20 grantmaking, as well as for COVID-19-specific grantmaking.
- Encourage charitable giving by increasing the allowable amount of the proposed $300 above-the-line tax deduction, available to taxpayers that do not itemize their returns, and remove the adjusted gross income (AGI) limits on incentives for charitable giving.
- Ensure arts eligibility for additional forms of disaster relief that will support communities during the COVID-19 crisis, such as Community Development Block Grants, education and lifelong learning programs, and health and wellness initiatives.
Under discussion are employment benefits beyond those available to individuals employed fulltime who are laid off. This includes discussion of providing some support for self-employed workers. The U.S. Department of Labor is writing guidelines about paid-leave provisions. There will be a separate piece prepared by the U.S. Department of Treasury about nonprofits.
Here is a summary of what the House bill has proposed as part of the Third Stimulus package: H.R.748-Title II-Assistance for American Workers, Families, and Businesses-Subtitle A-Unemployment Insurance Provisions
- Covers up to 39 weeks of unemployment compensation rather than the normal 26 weeks.
- Includes workers in the 50 U.S. states; Washington, D.C.; and U.S. territories.
- Covers unemployment due to a wide range of causes related to COVID-19 virus, including illness, caregiving, caring for children, place of employment closed, and inability to work.
- However, it does not contemplate a worker who is able to work but cannot sell the product of that work because of cancelled or closed markets. Self-employed workers are covered by this bill:
- Workers compensated based the amount of net income reported on their 2018 Federal income tax return.
- Amounts are laid out in 20 CFR § which specifies weekly amounts for Disaster Unemployment Assistance (DUA). See https://www.law.cornell.edu/cfr/text/20/625.6.
Current NEA Grantees
The National Endowment for the Arts has made significant allowances for grant-funded projects currently underway. These allowances include: extended deadlines for filing project reports; extension of project timelines, budget changes, including unanticipated expenses due to the COVID-19 crisis; and if needed, reduction of the scope of the project. For a complete description of the NEA’s policies for grantees, see https://www.arts.gov/COVID-19-FAQs. The NEA does not anticipate changes in application deadlines at this time.