What is Next for Creators?
Now that many of the provisions contained in the $2 trillion CARES Act are set to expire, many creators are still in desperate need of additional financial assistance to overcome the lost wages due to the COVID-19 pandemic.
Here are several key areas of relief that must be included in any future stimulus bill:
1. Appropriate funding for existing and new small business programs:
- While businesses can still apply for emergency loans, the SBA is no longer accepting new applications for Economic Injury Disaster Loan (EIDL) advance grants as of July 1. We call on Congress to allow individual, self-employed music makers to receive a second EIDL disbursement, including a special advance grant up to $10,000 that can be used to pay for expenses and does not have to be repaid.
- The CARES Act included important provisions that helped many affected businesses tread water in the spring, but did not go far enough to aid businesses most drastically hurt by COVID-19 closures, including those in the music industry. The RESTART Act (S. 3814) helps to ensure that small businesses--including self-employed creators, music venues, and recording studios--survive the pandemic. The RESTART Act responds to the urgent needs of hard-hit small businesses and individuals by creating a loan program to help keep music creators afloat through the remainder of 2020 and provide loan forgiveness as a backstop against continuing economic challenges. With tours, performances, and studio sessions likely closed for the remainder of the year--and into 2021--the financial impacts will only worsen and Congress must include this program to ensure that the industry survives and venues will not close forever.
- Congress should also provide a substantial dedicated fund for supporting minority-owned businesses, including extending the Paycheck Protection Program and creating grants that will allow Black-owned businesses to retain and rehire their workforce.
2. Fund unemployment programs for eligible self-employed workers
- The Pandemic Unemployment Assistance (PUA) program must be fixed so that gig workers can receive their full unemployment benefits. During the program’s implementation under the CARES Act, many gig workers did not receive their entire benefit since many unemployment systems were unable to process mixed-income streams. The Mixed Earner Pandemic Unemployment Assistance Act (H.R. 7961), which was introduced by Reps. Schiff (D-Calif.) and Chu (D-Calif.), was designed to fix this problem and to ensure that gig workers were not excluded from critical financial assistance.
- Under the CARES Act, individuals received an additional $600 per week for a period of four months, ending July 31. Congress must extend the Federal Pandemic Unemployment Compensation (FPUC) payments until the job market rebounds for all Americans, and ensure states have the resources and guidance to equitably aid all workers.
3. Ease the financial burden placed on independent artists
- Individual recording artists and record producers are required to amortize production expenses for tax purposes over the economic life of a sound recording. These artists and producers should be allowed an election to deduct 100% of their production expenses for records created in the United States in the year such expenses are incurred, in the same manner that qualified film and television production expenses are allowed to be expensed.
- The Help Independent Tracks Succeed (HITS) Act was created to help independent artists get back into the studio to create new music. The HITS Act would allow an individual to fully expense the cost of new studio recordings on their taxes, up to $150,000.
4. Establish substantial emergency funds for the National Endowment for the Arts
- The CARES Act appropriated $75M in funding for the NEA in addition to the $162M already appropriated for the fiscal year. While that increase was welcomed by the music community, Congress must continue to invest in creators and assist with financial recovery.
- Congress also must give the NEA greater flexibility to award grants that more directly help individual creators in need. Restrictions on grant awardees limit the impact COVID-19 funds can truly have on the creative workforce.
WHAT IS THE RECORDING ACADEMY DOING?
Congressional leaders are in active negotiations on a subsequent relief package. Academy lobbyists in Washington are working with a broad coalition of entertainment organizations to lobby key Senators and Congressional leadership to include the provisions listed above in the new COVID legislation. Help us achieve these goals by calling on your representative to take action for the creative community.