Source: United States House of Representatives – Congressman Ted Lieu (33 District of California)
WASHINGTON – Today, Congressman Ted W. Lieu (D-Los Angeles County) sent a letter to Congressional leadership calling for nonprofits to be included as eligible beneficiaries of the Paycheck Protection Program.
In the letter, Mr. Lieu writes:
Dear Speaker Pelosi, Minority Leader McCarthy, Majority Leader McConnell, and Minority Leader Schumer: Thank you for your continued leadership during the COVID-19 pandemic. As you consider additional legislation, I request that 501(c)(5), 501(c)(6), and 501(c)(7) nonprofits organizations be included as eligible beneficiaries of the Paycheck Protection Program (PPP) created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
As you know, the PPP is a guaranteed loan program administered by the Small Business Administration (SBA) that allows small businesses to cover payroll and other short-term operating expenses during this pandemic. The program offers guaranteed, low-interest, no-fee loans of up to $10 million with repayment deferred for at least six months and forgives up to 100 percent of the loan if the employer of a small business has retained the same number of employees as when they received the loan. By aiding small businesses and non-profit institutions, this program aims to ensure the American people and economy weather these difficult times.
Since the enactment of the CARES Act, I have heard from various nonprofits in my district that have not been able to apply for loans through the PPP. Particularly, the exclusion of 501(c)(5), 501(c)(6), and 501(c)(7) nonprofits is a serious barrier to achieving the objective of the PPP program, which is to provide immediate relief to help small businesses and non-profits facing financial hardship due to COVID-19:
· 501(c)(5) – Labor, Agricultural and Horticultural Organizations: The Bureau of Labor Statistics reported in January 2020 that labor unions represented more than 14 million workers, some of whom have been laid off or furloughed, resulting in a substantial dip in union membership. Labor unions play a critical role in representing workers and fighting for their rights. Unions and their members are crucial in our path to economic recovery.
· 501(c)(6) – Business Leagues, Chambers of Commerce, Real Estate Boards: These organizations support individuals and small businesses working on the front lines of the COVID-19 response and in critical infrastructure sectors. The 4,000 local chambers of commerce across the country further the interests of small businesses, offer educational opportunities for them to grow and thrive, and give their members a strong voice in government to address important policy issues affecting business communities. California’s 501(c)(6) organizations have a collective budget of more than $4 billion, and they include Convention & Visitor Bureaus that provides support for the hospitality and tourism industry.
· 501(c)(7) – Social and Recreational Clubs: Social and recreational clubs are our friends and neighbors, and they foster strong, close-knit networks within local communities. Clubs around the country generate more than $21 billion in economic activity each year and employ more than 500,000 workers.
These organizations, through no fault of their own, should not be in this predicament. It is imperative that these organizations are able to come out the other side of this pandemic. At this critical juncture, organizations working to promote the welfare of America’s economy, workers, and families should have equal access to the relief funds.
Thank you for considering this request.
Sincerely, Ted W. Lieu Member of Congress