Bipartisan Bill Introduced to Include 501(c)(6)s in PPP
ASAE - May 7, 2020
As the House readies to return to Washington next week to iron out a “CARES 2” COVID-19 relief package, Reps. Chris Pappas (D-NH), Brian Fitzpatrick (R-PA), Gil Cisneros (D-CA) and Greg Steube (R-FL) introduced legislation May 6 to ensure Section 501(c)(6) trade and professional associations receive federal assistance to weather the economic downturn resulting from the ongoing pandemic.
The bill, titled “The Local Chamber, Tourism and 501(c)(6) Protection Act,” would expand eligibility for the Paycheck Protection Program (PPP) to include 501(c)(6) entities and destination marketing organizations with 300 or fewer employees to enable these groups to continue serving industries and professions vital to America’s economic recovery.
“Our local chambers, associations, and nonprofits will continue to play an instrumental role in ensuring our Main Street businesses and regional economies can weather this storm,” Pappas said. “This bipartisan legislation will expand crucial small business assistance to the groups whose mission it is to support them. It is going to take all of us doing our part to get our economy back up and running in a safe and orderly fashion.”
The Pappas-Fitzpatrick bill has over 50 co-sponsors and, while ASAE does not view it as perfect due to the bill’s restrictions on staff size and use of loans to pay salaries of registered association lobbyists, ASAE has endorsed it. ASAE been urging Congress for weeks to extend PPP eligibility to America’s associations that are working to meet the needs of their members with diminishing financial resources as a result of the COVID-19 crisis. The bill is also endorsed by the U.S. Chamber of Commerce and the U.S. Travel Association.
Momentum for including 501(c)(6) associations in the PPP in the forthcoming CARES 2 package has grown over the past couple of weeks, with multiple letters of support from lawmakers on both sides of the aisle.
Details of the CARES 2 package are still taking shape but House Democrats are envisioning a trillion-dollar-plus bill that would serve as the next wave of relief for the beleaguered U.S. economy. House leaders have said bill language could be completed by the end of next week. Tweaking the PPP is almost certainly on the list of priorities, as Speaker Nancy Pelosi (D-CA) has talked about extending the eight-week loan forgiveness period for PPP loan recipients and making other changes to get relief to smaller businesses with 25 employees or less. Pelosi and other Democrats have also specifically mentioned the need to assist 501(c)(6) associations.
Other priorities for Democrats in CARES 2 include direct aid for state and local governments, increased funding for COVID-19 testing and for hospitals and health providers, another round of stimulus checks for individuals and funding for the U.S. Postal Service. “We have to think big,” Pelosi said earlier this week.
House Democrats are hoping for bipartisan support, but Senate leaders have signaled they might be a roadblock to quick passage. Senate Majority Leader Mitch McConnell (R-KY) said he wants liability protections for businesses in the next round of talks. President Trump is also demanding a payroll tax cut in the bill, something both Republicans and Democrats have resisted. Republican leaders have also expressed a desire to slow-walk the next phase of relief, especially given the $3 trillion Congress has already allocated to address the economic downturn resulting from COVID-19.
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