When it rains it pours—this will be a long update, so bear with me.
Derek Harley and I have spent the last few days on the phone with members of congress and staff pushing for the inclusion of 501(c)(6) in the SBA program. Derek has penned an update for everyone to let you all know how the conversation is going. I am also including links to the US travel Association’s “Power of Travel” page. Click the link and make sure you join the national list of DMO’s supporting the change.
Remember, signing the national letter is in addition to sending a personal letter to your members of Congress. If you have not yet sent the form letter we sent around last week, please make sure you do that as well. We are using the letter as a reason for Derek Harley to reach out to offices and find out what the individual members think about including either 501(c)(6)’s or adding DMO’s.
In addition to the push to expand the SBA PPP, we have been contacted by two CVB’s who have been contacted about their audits this year. The state auditors are including language in specific audits regarding sunshine laws. The OACVB position is well established—we do not believe that CVB’s are public entities and therefore should not be subjected to the sunshine laws. I have spoken directly with State Auditor Faber regarding this matter, and we are working on a legal opinion that supports our long held position. We will be working with those entities directly involved and will share the opinions with the group as soon as they are available.
Below is Derek’s insight into the current debate on the SBA PPP. In it you will see the timeline for additional action by Congress:
Andy,
I see from the ListServ that there have been some questions, and possibly some confusion, about the status of (c)(6) organizations within the Paycheck Protection Program (PPP); specifically, whether they are eligible to participate and receive the forgivable loans.
Regina Joseph’s (partner at Shumaker) email to you of yesterday, Monday, April 13, provides the best legal opinion on the matter that I’ve seen. She notes toward the end of her message, “[w]ithout any legislative or proper administrative amendment, Shumaker cannot render advice that, at the present time, 501(c)(6) organization are eligible to submit a PPP application. The effort would be better directed to joining in lobbying efforts that seek an amendment to the CARES Act.”
In that vein, there is indeed an active lobbying effort in D.C. to convince Congress to adopt legislation to expand the program to include (c)(6) organizations. We (Shumaker Advisors) have been working the issue on behalf of the OACVB here in Ohio, communicating with members of Congress and letting them know about the strong support of local DMOs in Ohio for that change. That dovetails with a much larger national push (by the U.S. Chamber of Commerce, local chambers of commerce, the U.S. Travel Association, etc.) to convince Congress to include legislative language in a potential “Phase 4” coronavirus relief measure that would expand the PPP to include (c)(6)s. While there was discussion last week (and continuing this week) surrounding an interim funding measure – what some people in D.C. are calling “Phase Three and A Half” – that could pass the Senate by unanimous consent (since members are still back in their states and districts), Senate Republicans want that to be a “clean” effort with no policy changes beyond simply injecting money into the existing PPP program (and perhaps other programs authorized by the CARES Act). Thus, any expansion of the PPP would most likely have to be done in a separate “Phase 4” coronavirus relief bill. People in D.C. are confident there will be a Phase 4 bill, but the timeline is unclear. At this point, with the House not planning to return to D.C. until May 4, it likely won’t be considered until mid-May.
The message about the need for a fix is definitely getting through to D.C. and to members of Congress – my feedback is that legislators are indeed hearing about the issue – but it is still very much a work in progress. I understand there is some support for that change, but like so many issues before Congress, it does not seem to be a “slam dunk.” In other words, it doesn’t appear as if the failure to include (c)(6)s in the PPP was an oversight, but rather by design – a compromise, probably – to specifically limit it to (c)(3)s and (c)(19)s. Whether the limitation was due to concerns about a lack of funding, or a concern that if you open it up to (c)(6)s it also means you have to open it up to other nonprofits which could get more complicated politically, is not entirely clear. But the bottom line is, DMOs should continue to communicate with their elected representatives – as we will continue to do on their behalf – to keep the issue at the forefront as discussions on a Phase 4 bill continue these next few weeks.
