On Friday night (2/12), the Small Business Administration released a new list of FAQs. You can find them here along with downloadable PDFs of past versions.
Some of the updated FAQs have been listed below:
Does a ticket broker or reseller qualify as a live venue operator or promoter? No. The Economic Aid Act’s live venue operator or promoter definition requires an entity to have as its principal business activity either: (1) Organizing, promoting, producing, managing, or hosting events by performing artists for which admission fees are charged and performers are paid based on a percentage of sales, a guarantee, or other mutually beneficial formal arrangement; or (2) Publicly selling tickets on average 60 days in advance of performing arts events for which performers are paid based on a percentage of sales, a guarantee, or other mutually beneficial formal arrangement. While ticket brokers or resellers do deal in tickets to performing arts events and may do so 60 days in advance, performers are not paid from these transactions as the SBA reads the second prong of the live venue operator or promoter definition to require. Further, as one of their commonly used names implies and because they operate in the aftermarket, ticket brokers or resellers may be viewed not as 6 | Page being principally in the business of selling tickets, but instead as being principally in the business of reselling them. As such, ticket brokers or resellers do not meet the criteria found in the definition of live venue operator or promoter.
What criteria will the SBA apply when determining whether a particular form of live entertainment constitutes a performing arts event for an SVOG? The SBA believes performing arts as related to the SVOG program means events such as musical concerts, comedy shows, theatrical productions, dance performances, or other live renderings of similarly artistic works. This is based on review of the Economic Aid Act text, SBA’s consultation with other Federal agencies with area expertise and examination of definitions of what constitutes the performing arts under Federal law.
Is an air show operator eligible to apply? No. The live venue operator or promoter definition under the Economic Aid Act requires an entity to either put on performing arts events at qualifying venues or sell advance tickets to performing arts events at qualifying venues. While an air show is a form of live entertainment, in SBA’s opinion it does not constitute a performing art. As such, air show operators do not qualify as live venue operators or promoters.
If a venue’s box office is staffed by volunteers is it eligible to apply? Yes. Among the criteria included in the live venue operator or promoter definition is a requirement that a qualifying venue must engage at least one individual to perform at least two of the following roles: sound engineer, booker, promoter, stage manager security personnel, and box office manager. The Economic Aid Act does not reference any hired box office staff other than a box office manager and does not absolutely require even that position. As such, the use of volunteers to staff a venue’s box office would not preclude it from being eligible to apply for an SVOG.
Is a theatrical producer that stages performances in multiple venues eligible to apply? Yes. Provided the venues a theatrical producer uses meet the qualifications listed in the Economic Aid Act (e.g., defined performance and audience spaces, sound mixing equipment, a lighting rig, etc.) there is no limit upon the number of venues at which a producer may host events.
How should an entity determine its employee count?
For employee count, the SBA is drawing on the Economic Aid Act’s specific provisions re: the calculation of employees and decades of agency experience in counting employees under the SBA size regulations (13 C.F.R. § 121.106). Employees that work at least 30 hours per week are considered full-time. Employees that work between 10-29 hours per week are considered one-half of a full-time employee. Employees that work less than 10 hours per week are not considered an employee. Once the qualifying employees are determined, an entity must then calculate the average number of employees it had over the prior year by adding up the number of qualifying employees in each individual pay period and dividing that amount by the number of pay periods over the 12-month
period from Mar. 1, 2019 to Feb. 29, 2020. For example, assume a firm paid its employees monthly and had the following number of qualifying employees each pay period:
Mar 2019 – 9.5 full-time employees
Apr 2019 – 8 full-time employees
May 2019 – 9.5 full-time employees
Jun 2019 – 8.5 full-time employees
Jul 2019 – 10 full-time employees
Aug 2019 – 10 full-time employees
Sep 2019 – 7 full-time employees
Oct 2019 – 8.5 full-time employees
Nov 2019 – 7 full-time employees
Dec 2019 – 6 full-time employees
Jan 2020 – 7.5 full-time employees
Feb 2020 – 6 full-time employees
The sum of the firm’s full-time employees is 97.5. The firm would then divide 97.5 by 12 (the number of pay periods) to determine its average number of full-time employees was eight.
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In this post, NJIVA does not give any legal advice, nor does it indicate any best practices that will assure success in any government-run programs. NJIVA merely provides the best available information at the time of writing.
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