SBA Shuttered Venue Operators Grant Program (SVOG)

Changes from March 19, 2021 to April 9, 2021

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SBA Shuttered Venue Operators Grant
~~March 19~~April 9, 2021 , 2021
Program (SVOG)
Robert Jay Dilger
The Small Business Administration (SBA) administers several types of programs to support The Small Business Administration (SBA) administers several types of programs to support
Senior Specialist in Senior Specialist in
small businesses, including direct disaster loan programs to assist their recovery from natural small businesses, including direct disaster loan programs to assist their recovery from natural
American National American National
disasters; loan guaranty and venture capital programs to enhance their access to capital; disasters; loan guaranty and venture capital programs to enhance their access to capital;
Government Government
management and technical assistance training programs to assist business formation and management and technical assistance training programs to assist business formation and

expansion; and contracting programs to increase their opportunities in federal contracting. expansion; and contracting programs to increase their opportunities in federal contracting.
Sean Lowry
Analyst in Public Finance Analyst in Public Finance
Congressional interest in the SBA’s programs has always been high, but has become especially Congressional interest in the SBA’s programs has always been high, but has become especially

acute in the wake of the Coronavirus Disease 2019 (COVID-19) pandemic’s widespread adverse acute in the wake of the Coronavirus Disease 2019 (COVID-19) pandemic’s widespread adverse
economic impact on the U.S. economy. During the 116th Congress, in an effort to assist small economic impact on the U.S. economy. During the 116th Congress, in an effort to assist small

businesses adversely affected by COVID-19, Congress approved legislation that provided the businesses adversely affected by COVID-19, Congress approved legislation that provided the
SBA $1.088 trillion in appropriations, a 35,282% increase over the $3.075 billion the SBA received during the 115th SBA $1.088 trillion in appropriations, a 35,282% increase over the $3.075 billion the SBA received during the 115th
Congress. Congress.
Most of the SBA’s funding during the 116th Congress was provided through supplemental appropriations for new and Most of the SBA’s funding during the 116th Congress was provided through supplemental appropriations for new and
expanded programs, including the Paycheck Protection Program ($806.45 billion), Economic Injury Disaster Loans ($50.02 expanded programs, including the Paycheck Protection Program ($806.45 billion), Economic Injury Disaster Loans ($50.02
billion), Emergency Economic Injury Disaster Loan advance (grant) payments ($20 billion), Targeted Economic Injury billion), Emergency Economic Injury Disaster Loan advance (grant) payments ($20 billion), Targeted Economic Injury
Disaster Loan advance (grant) payments ($20 billion), and the Shuttered Venue Operators Grant (SVOG) program ($15 Disaster Loan advance (grant) payments ($20 billion), and the Shuttered Venue Operators Grant (SVOG) program ($15
billion). billion).
This report focuses on the new $16.25 billion SVOG program—authorized by P.L. 116-260, the Economic Aid to Hard-Hit This report focuses on the new $16.25 billion SVOG program—authorized by P.L. 116-260, the Economic Aid to Hard-Hit
Small Businesses, Nonprofits, and Venues Act (Division N, Title III of the Consolidated Appropriations Act, 2021), provided Small Businesses, Nonprofits, and Venues Act (Division N, Title III of the Consolidated Appropriations Act, 2021), provided
an additional $1.25 billion by P.L. 117-2, the American Rescue Plan Act of 2021, and administered by the SBA’s Office of an additional $1.25 billion by P.L. 117-2, the American Rescue Plan Act of 2021, and administered by the SBA’s Office of
Disaster Assistance—which provides grants to shuttered venues affected by the COVID-19 pandemic. Eligible participants Disaster Assistance—which provides grants to shuttered venues affected by the COVID-19 pandemic. Eligible participants
include live venue operators or promoters; theatrical producers; live performing arts organization operators; “relevant” include live venue operators or promoters; theatrical producers; live performing arts organization operators; “relevant”
museum operators, including zoos and aquariums; motion picture theater operators; talent representatives; and subsidiaries of museum operators, including zoos and aquariums; motion picture theater operators; talent representatives; and subsidiaries of
eligible entities that also meet the program’s eligibility requirements. eligible entities that also meet the program’s eligibility requirements.
Qualifying applicants can receive an initial grant equal to 45% of their gross earned revenue, up to $10 million. No less than Qualifying applicants can receive an initial grant equal to 45% of their gross earned revenue, up to $10 million. No less than
$2 billion in grant funding is reserved for eligible applicants with up to 50 full-time equivalent employees. Supplemental $2 billion in grant funding is reserved for eligible applicants with up to 50 full-time equivalent employees. Supplemental
grants equal to 50% of an initial grant (subject to the $10 million total cap) are also available under specified circumstances. grants equal to 50% of an initial grant (subject to the $10 million total cap) are also available under specified circumstances.
This report examines the SVOG’s legislative origins, implementation, eligibility requirements, grant amounts, statutory This report examines the SVOG’s legislative origins, implementation, eligibility requirements, grant amounts, statutory
requirements prioritizing the grant awards to qualified applicants who have suffered the greatest economic loss, allowable use requirements prioritizing the grant awards to qualified applicants who have suffered the greatest economic loss, allowable use
of proceeds, and recordkeeping requirements. It assesses the administrative challenges facing the SBA, which has a great deal of proceeds, and recordkeeping requirements. It assesses the administrative challenges facing the SBA, which has a great deal
of experience administering lending programs but much less experience administering grant programs for for-profit of experience administering lending programs but much less experience administering grant programs for for-profit
businesses. It also discusses congressional oversight issues likely to arise over the coming months, including assessing the businesses. It also discusses congressional oversight issues likely to arise over the coming months, including assessing the
program’s efficacy in assisting small businesses. program’s efficacy in assisting small businesses.
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SBA Shuttered Venue Operators Grant Program (SVOG)

Introduction
Congressional interest in the Small Business Administration (SBA) has become especially acute Congressional interest in the Small Business Administration (SBA) has become especially acute
in the wake of the Coronavirus Disease 2019 (COVID-19) pandemic’s widespread adverse in the wake of the Coronavirus Disease 2019 (COVID-19) pandemic’s widespread adverse
economic impact on the U.S. economy, including productivity losses, supply chain disruptions, economic impact on the U.S. economy, including productivity losses, supply chain disruptions,
major labor dislocation, and significant financial pressure on both businesses and households. major labor dislocation, and significant financial pressure on both businesses and households.
During the 116th Congress, in an effort to assist small businesses adversely affected by COVID- During the 116th Congress, in an effort to assist small businesses adversely affected by COVID-
19, Congress approved legislation that provided the SBA $1.088 trillion in appropriations, a 19, Congress approved legislation that provided the SBA $1.088 trillion in appropriations, a
35,282% increase over the $3.075 billion the SBA received during the 115th Congress.1 Most of 35,282% increase over the $3.075 billion the SBA received during the 115th Congress.1 Most of
the SBA’s funding during the 116th Congress was provided through supplemental appropriations the SBA’s funding during the 116th Congress was provided through supplemental appropriations
for new and expanded programs, including the Paycheck Protection Program (PPP; $806.45 for new and expanded programs, including the Paycheck Protection Program (PPP; $806.45
billion), Economic Injury Disaster Loans (EIDL; $50.02 billion), Emergency EIDL advance billion), Economic Injury Disaster Loans (EIDL; $50.02 billion), Emergency EIDL advance
(grant) payments ($20 billion), and Targeted EIDL advance (grant) payments ($20 billion).2 In (grant) payments ($20 billion), and Targeted EIDL advance (grant) payments ($20 billion).2 In
addition, Congress appropriated $15 billion for a new, Shuttered Venue Operators Grant (SVOG) addition, Congress appropriated $15 billion for a new, Shuttered Venue Operators Grant (SVOG)
program.3 program.3
During the 117th Congress, P.L. 117-2, the American Rescue Plan Act of 2021, provided the SBA During the 117th Congress, P.L. 117-2, the American Rescue Plan Act of 2021, provided the SBA
an additional $53.6 billion, including $1.25 billion for the SVOG.4 an additional $53.6 billion, including $1.25 billion for the SVOG.4
The $16.25 billion SVOG program, which provides grants to shuttered venues affected by the The $16.25 billion SVOG program, which provides grants to shuttered venues affected by the
COVID-19 pandemic, can be distinguished among these other economic relief programs, in part, COVID-19 pandemic, can be distinguished among these other economic relief programs, in part,
because it is targeted to certain types of entities in the arts and entertainment industry—live because it is targeted to certain types of entities in the arts and entertainment industry—live
performance venues, museums, and movie theaters—instead of “small businesses,” more performance venues, museums, and movie theaters—instead of “small businesses,” more
generally. These lines of business are among those most significantly affected by COVID-19 and generally. These lines of business are among those most significantly affected by COVID-19 and
are projected to be among the most delayed to recover to pre-pandemic levels of economic are projected to be among the most delayed to recover to pre-pandemic levels of economic
activity.5 activity.5
This report examines the SVOG’s legislative origins, implementation, eligibility requirements, This report examines the SVOG’s legislative origins, implementation, eligibility requirements,
grant amounts, statutory requirements prioritizing the grant awards to qualified applicants who grant amounts, statutory requirements prioritizing the grant awards to qualified applicants who
have suffered the greatest economic loss, allowable use of proceeds, and recordkeeping have suffered the greatest economic loss, allowable use of proceeds, and recordkeeping

1 The Small Business Administration (SBA) received $1.92 billion in regular appropriations and $1.086 trillion in 1 The Small Business Administration (SBA) received $1.92 billion in regular appropriations and $1.086 trillion in
supplemental appropriations during the 116th Congress and $1.416 billion in regular appropriations and $1.659 billion supplemental appropriations during the 116th Congress and $1.416 billion in regular appropriations and $1.659 billion
in supplemental appropriations for disaster assistance during the 115th Congress. in supplemental appropriations for disaster assistance during the 115th Congress.
For additional information and analysis of the SBA’s appropriations, see CRS Report R43846, For additional information and analysis of the SBA’s appropriations, see CRS Report R43846, Small Business
Administration (SBA) Funding: Overview and Recent Trends, by Robert Jay Dilger. , by Robert Jay Dilger.
2 For additional information and analysis of these programs, see CRS Report R46284, 2 For additional information and analysis of these programs, see CRS Report R46284, COVID-19 Relief Assistance to
Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry. , by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry.
3 Enacted as part of P.L. 116-260, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act 3 Enacted as part of P.L. 116-260, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act
(Division N, Title III of the Consolidated Appropriations Act, 2021, hereinafter P.L. 116-260). (Division N, Title III of the Consolidated Appropriations Act, 2021, hereinafter P.L. 116-260).
4 For additional information and analysis of these programs, see CRS Report R46284, 4 For additional information and analysis of these programs, see CRS Report R46284, COVID-19 Relief Assistance to
Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry. , by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry.
5 For example, the unemployment rate in the arts, entertainment, and recreation industry was 19.1% in January 2021 5 For example, the unemployment rate in the arts, entertainment, and recreation industry was 19.1% in January 2021
compared to 4.7% in January 2020. See U.S. Department of Labor Bureau of Labor Statistics, “Table A-31 compared to 4.7% in January 2020. See U.S. Department of Labor Bureau of Labor Statistics, “Table A-31
Unemployed Persons by Industry, Class of Worker, and Sex,” Unemployed Persons by Industry, Class of Worker, and Sex,” Labor Force Statistics from the Current Population
Survey (last modified February 5, 2021). According to one estimate, the arts, entertainment, and recreation industry is (last modified February 5, 2021). According to one estimate, the arts, entertainment, and recreation industry is
expected to take the longest time to recover (by 2024 or later) to the 2019 level of output. See McKinsey & Company, expected to take the longest time to recover (by 2024 or later) to the 2019 level of output. See McKinsey & Company,
Covid-19 Recovery in Hardest-hit Sectors Could Take More Than 5 Years, July 29, 2020, at , July 29, 2020, at
https://www.mckinsey.com/featured-insights/coronavirus-leading-through-the-crisis/charting-the-path-to-the-next-https://www.mckinsey.com/featured-insights/coronavirus-leading-through-the-crisis/charting-the-path-to-the-next-
normal/covid-19-recovery-in-hardest-hit-sectors-could-take-more-than-5-years#. normal/covid-19-recovery-in-hardest-hit-sectors-could-take-more-than-5-years#.
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requirements. It also discusses issues of likely interest to Congress, including oversight of the requirements. It also discusses issues of likely interest to Congress, including oversight of the
program’s implementation and ways to measure program performance. program’s implementation and ways to measure program performance.
Legislative Origins
P.L. 116-136, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), signed P.L. 116-136, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), signed
into law on March 27, 2020, among other provisions, created the $349 billion (now $806.45 into law on March 27, 2020, among other provisions, created the $349 billion (now $806.45
billion) Paycheck Protection Program (PPP), which provides low-interest, forgivable loans to billion) Paycheck Protection Program (PPP), which provides low-interest, forgivable loans to
small businesses adversely affected by the COVID-19 pandemic.6 small businesses adversely affected by the COVID-19 pandemic.6
Several organizations, including the National Independent Venue Association (NIVA), argued that Several organizations, including the National Independent Venue Association (NIVA), argued that
PPP loan requirements limited the program’s value for live venue operators. For example, they PPP loan requirements limited the program’s value for live venue operators. For example, they
pointed out that businesses must have a headcount of 500 or fewer employees to be eligible for a pointed out that businesses must have a headcount of 500 or fewer employees to be eligible for a
PPP loan. Each employee is counted regardless of the number of hours worked. Because live PPP loan. Each employee is counted regardless of the number of hours worked. Because live
venue operators typically depend on part-time employees, many of them were deemed ineligible venue operators typically depend on part-time employees, many of them were deemed ineligible
for PPP assistance, even though their full-time equivalent employee count was below 500 for PPP assistance, even though their full-time equivalent employee count was below 500
employees. These organizations also argued that live venue operators tend to have high overhead employees. These organizations also argued that live venue operators tend to have high overhead
expenses and lower payroll costs as a percentage of expenses than other businesses, making it expenses and lower payroll costs as a percentage of expenses than other businesses, making it
difficult for live venue operators to meet the PPP’s requirement that at least 60% of the loan difficult for live venue operators to meet the PPP’s requirement that at least 60% of the loan
proceeds have to be used on payroll to obtain full loan forgiveness.7 proceeds have to be used on payroll to obtain full loan forgiveness.7
In recognition of these arguments, on July 7, 2020, Representative Peter Welch introduced H.R. In recognition of these arguments, on July 7, 2020, Representative Peter Welch introduced H.R.
7806, the Save our Stages Act (SOS Act). The bill was cosponsored by Representative Roger 7806, the Save our Stages Act (SOS Act). The bill was cosponsored by Representative Roger
Williams, signaling that the bill had bipartisan support. The bill subsequently had 174 cosponsors. Williams, signaling that the bill had bipartisan support. The bill subsequently had 174 cosponsors.
The bill would have authorized the SBA to make grants to eligible live venue operators, The bill would have authorized the SBA to make grants to eligible live venue operators,
producers, promoters, or talent representatives with 500 or fewer full-time equivalent employees producers, promoters, or talent representatives with 500 or fewer full-time equivalent employees
who have demonstrated, through revenue losses, that they have been adversely affected by the who have demonstrated, through revenue losses, that they have been adversely affected by the
COVID-19 pandemic. Specifically, the SBA would have been authorized to make an initial grant COVID-19 pandemic. Specifically, the SBA would have been authorized to make an initial grant
to eligible operators, promoters, producers, or talent representatives equal to 45% of their 2019 to eligible operators, promoters, producers, or talent representatives equal to 45% of their 2019
gross revenue, capped at $12 million, and a supplemental grant equal to 50% of the initial grant gross revenue, capped at $12 million, and a supplemental grant equal to 50% of the initial grant
if, as of December 1, 2020, their revenue for the most recent calendar quarter is not more than if, as of December 1, 2020, their revenue for the most recent calendar quarter is not more than
20% of the revenue for the corresponding quarter during 2019. The initial grant award was to be 20% of the revenue for the corresponding quarter during 2019. The initial grant award was to be
used for eligible expenses incurred during the period beginning on March 1, 2020, through used for eligible expenses incurred during the period beginning on March 1, 2020, through
December 31, 2020. Supplemental grants could be used for eligible expenses incurred during the December 31, 2020. Supplemental grants could be used for eligible expenses incurred during the
period beginning on March 1, 2020, through June 30, 2021. Specified eligible expenses included, period beginning on March 1, 2020, through June 30, 2021. Specified eligible expenses included,
among others, payroll costs, rents, utilities, mortgage interest payments, and personal protective among others, payroll costs, rents, utilities, mortgage interest payments, and personal protective
equipment. The bill was referred to the House Committee on Small Business. equipment. The bill was referred to the House Committee on Small Business.
Senator John Cornyn introduced an identical companion bill (S. 4258) in the Senate on July 22, Senator John Cornyn introduced an identical companion bill (S. 4258) in the Senate on July 22,
2020. The bill was co-sponsored by Senator Amy Klobuchar, signaling that the bill had bipartisan 2020. The bill was co-sponsored by Senator Amy Klobuchar, signaling that the bill had bipartisan
support, and referred to the Committee on Small Business and Entrepreneurship. The bill support, and referred to the Committee on Small Business and Entrepreneurship. The bill
subsequently had 58 cosponsors. subsequently had 58 cosponsors.
Several organizations, including NIVA and the National Independent Talent Organization, Several organizations, including NIVA and the National Independent Talent Organization,
gathered support for the bills. For example, NIVA claimed that it was part of an effort that gathered support for the bills. For example, NIVA claimed that it was part of an effort that

6 For additional information and analysis of SBA-related COVID-19 programs, see CRS Report R46284, 6 For additional information and analysis of SBA-related COVID-19 programs, see CRS Report R46284, COVID-19
Relief Assistance to Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean , by Robert Jay Dilger, Bruce R. Lindsay, and Sean
Lowry. Lowry.
7 National Independent Venue Association (NIVA), “About NIVA,” accessed on February 2, 2021, at 7 National Independent Venue Association (NIVA), “About NIVA,” accessed on February 2, 2021, at
https://www.saveourstages.com/about-us. https://www.saveourstages.com/about-us.
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resulted in more than 2.1 million emails being sent to “elected officials expressing their support resulted in more than 2.1 million emails being sent to “elected officials expressing their support
for the Save Our Stages Act.”8 In addition, at a December 15, 2020, Senate congressional hearing for the Save Our Stages Act.”8 In addition, at a December 15, 2020, Senate congressional hearing
on the bill, several organizations’ representatives argued that the live events industry had suffered on the bill, several organizations’ representatives argued that the live events industry had suffered
major economic losses due to the COVID-19 pandemic, with many venues having no income for major economic losses due to the COVID-19 pandemic, with many venues having no income for
many months, and that the prognosis for the industry’s economic future was bleak. They also many months, and that the prognosis for the industry’s economic future was bleak. They also
argued that eligibility for the additional relief that the Save Our Stages Act would provide should argued that eligibility for the additional relief that the Save Our Stages Act would provide should
be expanded. As one witness testified, be expanded. As one witness testified,
Save Our Stages only provides funding for venues, managers, booking agents and Save Our Stages only provides funding for venues, managers, booking agents and
promotors. This is 8% of the Live Events Industry. All other segments of the industry promotors. This is 8% of the Live Events Industry. All other segments of the industry
receive no support via Save Our Stages. Here is a partial list of companies and people still receive no support via Save Our Stages. Here is a partial list of companies and people still
in need of funding: Artists, Actors, Performers, Sound, Lighting, Video, Pyrotechnics, in need of funding: Artists, Actors, Performers, Sound, Lighting, Video, Pyrotechnics,
Lasers, Caterers, Rigging, Trucking, Bussing, Staging, Wardrobe, Designers, Dancers, Lasers, Caterers, Rigging, Trucking, Bussing, Staging, Wardrobe, Designers, Dancers,
Opera, Theaters, Festivals, Tours, Orchestras, Corporate Shows, Trade Shows, Opera, Theaters, Festivals, Tours, Orchestras, Corporate Shows, Trade Shows,
Conventions, Speakers, TV Studios and Stations, Radio Stations, Film, Theme Parks and Conventions, Speakers, TV Studios and Stations, Radio Stations, Film, Theme Parks and
attractions, Museums, Movie Theaters, Labor Companies, Free Lance workers, Circuses, attractions, Museums, Movie Theaters, Labor Companies, Free Lance workers, Circuses,
Fairs, Rodeos, Water Shows, Freight, Drapes, Power, Radios, Manufacturers, and many Fairs, Rodeos, Water Shows, Freight, Drapes, Power, Radios, Manufacturers, and many
others. We urge you to pass Save Our Stages, but to also save the rest of the Live Events others. We urge you to pass Save Our Stages, but to also save the rest of the Live Events
Industry. All these industries need one another to survive. Venues will have no artists to Industry. All these industries need one another to survive. Venues will have no artists to
play in them or people to staff the events without holistic industry funding. Please Save All play in them or people to staff the events without holistic industry funding. Please Save All
Live Events.9 Live Events.9
A revised version of the Save Our Stages Act was added to the FY2021 Consolidated A revised version of the Save Our Stages Act was added to the FY2021 Consolidated
Appropriations Act (P.L. 116-260) during congressional negotiations on the act’s final Appropriations Act (P.L. 116-260) during congressional negotiations on the act’s final
provisions.10 The revised version included additional funding (from $12 billion to $15 billion) provisions.10 The revised version included additional funding (from $12 billion to $15 billion)
and expanded eligibility to other industry segments. The act included language targeting the and expanded eligibility to other industry segments. The act included language targeting the
grants to smaller entities with revenue losses. grants to smaller entities with revenue losses.
Eligibility Requirements
Eligible applicants include Eligible applicants include
 live venue operators or promoters;  live venue operators or promoters;
 theatrical producers;  theatrical producers;
 live performing arts organization operators;  live performing arts organization operators;
 relevant museum operators, including zoos and aquariums, who meet specific  relevant museum operators, including zoos and aquariums, who meet specific
criteria; criteria;
 motion picture theater operators;  motion picture theater operators;

8 NIVA, “Save Our Stages Act Has Passed as Part of the COVID-19 Relief Bill,” at https://www.saveourstages.com/; 8 NIVA, “Save Our Stages Act Has Passed as Part of the COVID-19 Relief Bill,” at https://www.saveourstages.com/;
Jon Blistein, “Save Our Stages: How an Industry Hail Mary Became Live Music’s $15 Billion Lifeline,” Jon Blistein, “Save Our Stages: How an Industry Hail Mary Became Live Music’s $15 Billion Lifeline,” Rolling Stone, ,
December 22, 2020, at https://www.rollingstone.com/music/music-features/live-music-save-our-stages-relief-1107081/; December 22, 2020, at https://www.rollingstone.com/music/music-features/live-music-save-our-stages-relief-1107081/;
and Dave Brooks, “Save Our Stages Passes With Stimulus Package: Where That $15B Is Going, What It Means for and Dave Brooks, “Save Our Stages Passes With Stimulus Package: Where That $15B Is Going, What It Means for
Live Music,” Live Music,” billboard, December 22, 2020, at https://www.billboard.com/articles/business/touring/9503986/save-our-, December 22, 2020, at https://www.billboard.com/articles/business/touring/9503986/save-our-
stages-stimulus-package-15-billion/. stages-stimulus-package-15-billion/.
9 Testimony of Michael Strickland, owner Bandit Lites, U.S. Congress, Senate Committee on Commerce, Science, and 9 Testimony of Michael Strickland, owner Bandit Lites, U.S. Congress, Senate Committee on Commerce, Science, and
Transportation, Subcommittee on Manufacturing, Trade, and Consumer Protection, Transportation, Subcommittee on Manufacturing, Trade, and Consumer Protection, Examining the Impact of COVID-
19 on the Live Event Entertainment Industry, hearing on S. 4258, 116th Cong., 2nd sess., December 15, 2020. , hearing on S. 4258, 116th Cong., 2nd sess., December 15, 2020.
10 Jem Aswad, “Senator Amy Klobuchar Explains $15 billion Save Our Stages Act,” 10 Jem Aswad, “Senator Amy Klobuchar Explains $15 billion Save Our Stages Act,” Chicago Tribune, December 21, , December 21,
2020, at https://www.chicagotribune.com/entertainment/ct-ent-amy-klobuchar-save-our-stages-act-20201221-2020, at https://www.chicagotribune.com/entertainment/ct-ent-amy-klobuchar-save-our-stages-act-20201221-
jpvwthm3tvabnonqtrhx3crr54-story.html. jpvwthm3tvabnonqtrhx3crr54-story.html.
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 talent representatives; and  talent representatives; and
 subsidiary businesses of eligible entities that also meet the eligibility  subsidiary businesses of eligible entities that also meet the eligibility
requirements on their own rights.11 requirements on their own rights.11
In addition, applicants must generally In addition, applicants must generally
 be located in, and primarily operate within, the United States;  be located in, and primarily operate within, the United States;
 make a significant contribution to the United States’ economy through the  make a significant contribution to the United States’ economy through the
payment of taxes or the use of American products, materials or labor; payment of taxes or the use of American products, materials or labor;
 have been in operation as of February 29, 2020;  have been in operation as of February 29, 2020;
 have not received a PPP loan on or after December 27, 2020;  have not received a PPP loan on or after December 27, 2020;
 not be a publicly traded corporation, or majority owned and controlled by a  not be a publicly traded corporation, or majority owned and controlled by a
publicly traded corporation; publicly traded corporation;
 not present live performances or sell products of a prurient sexual nature;  not present live performances or sell products of a prurient sexual nature;
 not have more than 10% of their 2019 gross revenue from the federal government  not have more than 10% of their 2019 gross revenue from the federal government
(not counting disaster assistance); (not counting disaster assistance);
 have a reduction of at least 25% in gross earned revenue during (at least) one  have a reduction of at least 25% in gross earned revenue during (at least) one
quarter of 2020 as compared to the corresponding quarter of 2019; and quarter of 2020 as compared to the corresponding quarter of 2019; and
 certify that the uncertainty of current economic conditions makes necessary the  certify that the uncertainty of current economic conditions makes necessary the
grant to support ongoing operations. grant to support ongoing operations.
As will be discussed, additional eligibility requirements also exist for specific types of individuals As will be discussed, additional eligibility requirements also exist for specific types of individuals
and entities. and entities.
Furthermore, an applicable entity cannot be owned or controlled by a parent entity with Furthermore, an applicable entity cannot be owned or controlled by a parent entity with more
than two of the following characteristics:12 of the following characteristics:12
 owning or operating venues, relevant museums, motion picture theatres, or talent  owning or operating venues, relevant museums, motion picture theatres, or talent
agencies or talent management companies in more than one country; agencies or talent management companies in more than one country;
 owning or operating venues, relevant museums, motion picture theaters, or talent  owning or operating venues, relevant museums, motion picture theaters, or talent
agencies or talent management companies in more than 10 states; or agencies or talent management companies in more than 10 states; or
 having more than 500 full-time equivalent employees (not counting employees  having more than 500 full-time equivalent employees (not counting employees
working fewer than 10 hours per week) as of February 29, 2020.13 working fewer than 10 hours per week) as of February 29, 2020.13

11 SBA, “Shuttered Venue Operators Grant,” at https://www.sba.gov/funding-programs/loans/coronavirus-relief-11 SBA, “Shuttered Venue Operators Grant,” at https://www.sba.gov/funding-programs/loans/coronavirus-relief-
options/shuttered-venue-operators-grant. options/shuttered-venue-operators-grant.
For entities with multiple subsidiaries, the parent entity must meet the eligibility criteria, but each subsidiary does not For entities with multiple subsidiaries, the parent entity must meet the eligibility criteria, but each subsidiary does not
need to meet the criteria independently. A maximum of five business affiliates can receive a grant (six grants in all). In need to meet the criteria independently. A maximum of five business affiliates can receive a grant (six grants in all). In
addition, an eligible museum, and all of its subsidiary museums, may receive no more than $10 million combined under addition, an eligible museum, and all of its subsidiary museums, may receive no more than $10 million combined under
the program. the program.
If a subsidiary wants to apply for its own grant, it must meet the eligibility requirements. Subsidiaries that qualify for If a subsidiary wants to apply for its own grant, it must meet the eligibility requirements. Subsidiaries that qualify for
grants on their own are not treated as affiliates of their parent entities or one another. grants on their own are not treated as affiliates of their parent entities or one another.
12 In determining ownership and control, the SBA’s affiliation rules generally apply to the 12 In determining ownership and control, the SBA’s affiliation rules generally apply to the ~~SVOG~~Shuttered Venue Operators Grant (SVOG) program. See 13 C.F.R. . See 13 C.F.R.
§121.301(f). P.L. 116-260 provides for a modified application of the affiliation rules to the SVOG. One example is that §121.301(f). P.L. 116-260 provides for a modified application of the affiliation rules to the SVOG. One example is that
a parent could employ more than 500 employees (possibly excluding it from being “small” under the SBA’s size a parent could employ more than 500 employees (possibly excluding it from being “small” under the SBA’s size
standards) but still receive an SVOG as long as it does not operate in more than 1 country or 10 states. Another standards) but still receive an SVOG as long as it does not operate in more than 1 country or 10 states. Another
exception to the general affiliation rules is explained in the exception to the general affiliation rules is explained in the “Initial Grant Amount” of this report. of this report.
13 Based on P.L. 116-260, full-time equivalent employees are determined according to the following rules: (1) any 13 Based on P.L. 116-260, full-time equivalent employees are determined according to the following rules: (1) any
employee working at least 30 hours per week is counted as a full-time employee; (2) any employee working at least 10 employee working at least 30 hours per week is counted as a full-time employee; (2) any employee working at least 10
~~hours and fewer than 30 hours per week is counted as one-half of a full-time employee; and (3) any employee working~~
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Live Venue Operator or Promoters, Theatrical Producers, and Live
Performing Arts Organization Operators
In addition to the program’s general eligibility criteria, a live venue operator or promoter, In addition to the program’s general eligibility criteria, a live venue operator or promoter,
theatrical producer, or live performing arts organization operator, which may be for-profit, theatrical producer, or live performing arts organization operator, which may be for-profit,
nonprofit, or publicly owned and operated, must nonprofit, or publicly owned and operated, must
 be, or intend to be, organizing, promoting, producing, managing, or hosting  be, or intend to be, organizing, promoting, producing, managing, or hosting
future live concerts, comedy shows, or theatrical productions or other events by future live concerts, comedy shows, or theatrical productions or other events by
performing artists as their principal business activity; performing artists as their principal business activity;
 have a defined performance and audience space, mixing equipment, a public  have a defined performance and audience space, mixing equipment, a public
address system, and a lighting rig; address system, and a lighting rig;
 engage one or more individuals to carry out not less than two of the following  engage one or more individuals to carry out not less than two of the following
roles: sound engineer, a booker, a promoter, a stage manager, security personnel, roles: sound engineer, a booker, a promoter, a stage manager, security personnel,
and a box office manager; and a box office manager;
 have a paid ticket or cover charge to attend most performances and paid artists  have a paid ticket or cover charge to attend most performances and paid artists
who do not play for free or solely for tips, except for fundraisers or similar who do not play for free or solely for tips, except for fundraisers or similar
charitable events. The performers must be paid in an amount that is based on a charitable events. The performers must be paid in an amount that is based on a
percentage of sales, a guarantee (in writing or standard contract), or another percentage of sales, a guarantee (in writing or standard contract), or another
mutually beneficial formal agreement. Venues owned or operated by nonprofit mutually beneficial formal agreement. Venues owned or operated by nonprofit
entities that produce free events must be produced and managed primarily by entities that produce free events must be produced and managed primarily by
paid employees, not volunteers; paid employees, not volunteers;
 generate at least 70% of revenue through cover charges or ticket sales, production  generate at least 70% of revenue through cover charges or ticket sales, production
fees or reimbursements, nonprofit educational initiatives, or the sale of event fees or reimbursements, nonprofit educational initiatives, or the sale of event
beverages, food, or merchandise; or beverages, food, or merchandise; or
 make tickets available for purchase by the public an average of not less than 60  make tickets available for purchase by the public an average of not less than 60
days in advance of the live concerts, comedy shows, theatrical productions, or days in advance of the live concerts, comedy shows, theatrical productions, or
other qualifying events and have performers who are paid in an amount that is other qualifying events and have performers who are paid in an amount that is
based on a percentage of sales, a guarantee, or another mutually beneficial formal based on a percentage of sales, a guarantee, or another mutually beneficial formal
agreement. agreement.
Relevant Museum Operators, including Zoos and Aquariums
In addition to the program’s general eligibility requirements, relevant museum operators, which In addition to the program’s general eligibility requirements, relevant museum operators, which
include aquariums, arboretums, botanical gardens, art museums, children’s museums, general include aquariums, arboretums, botanical gardens, art museums, children’s museums, general
museums, historic houses and sites, history museums, nature centers, natural history and museums, historic houses and sites, history museums, nature centers, natural history and
anthropology museums, planetariums, science and technology centers, specialized museums, and anthropology museums, planetariums, science and technology centers, specialized museums, and
zoological parks (see 20 U.S.C. §9172), must zoological parks (see 20 U.S.C. §9172), must
~~ operate as a public, tribal, or private nonprofit agency or institution organized on~~
~~a permanent basis for essentially educational, cultural heritage, or aesthetic~~

hours and fewer than 30 hours per week is counted as one-half of a full-time employee; and (3) any employee working fewer than 10 hours per week are not counted as an employee. Also, in determining employment, subsidiary entities fewer than 10 hours per week are not counted as an employee. Also, in determining employment, subsidiary entities
that otherwise qualify for grants are not treated as affiliates of their parent entities, or one another. The SBA has that otherwise qualify for grants are not treated as affiliates of their parent entities, or one another. The SBA has
indicated that once the qualifying employees are determined, the applicant calculates the average number of employees indicated that once the qualifying employees are determined, the applicant calculates the average number of employees
over the prior year in each individual pay period and divides that amount by the number of pay periods in the year to over the prior year in each individual pay period and divides that amount by the number of pay periods in the year to
determine if its average number of full-time equivalent employees is 500 or fewer. determine if its average number of full-time equivalent employees is 500 or fewer.
For rolling guidance on eligibility criteria, see SBA, “Shuttered Venue Operators Grants – FAQ,” accessed February For rolling guidance on eligibility criteria, see SBA, “Shuttered Venue Operators Grants – FAQ,” accessed February
16, 2021, at https://www.sba.gov/document/support-shuttered-venue-operators-grants-faq?utm_medium=email&16, 2021, at https://www.sba.gov/document/support-shuttered-venue-operators-grants-faq?utm_medium=email&
utm_source=govdelivery. utm_source=govdelivery.
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 operate as a public, tribal, or private nonprofit agency or institution organized on a permanent basis for essentially educational, cultural heritage, or aesthetic purposes; have a professional staff; own or utilize tangible objects, care for the purposes; have a professional staff; own or utilize tangible objects, care for the
tangible objects, and exhibit the tangible objects to the public on a regular basis; tangible objects, and exhibit the tangible objects to the public on a regular basis;
 be open or intend to reopen;  be open or intend to reopen;
 serve as a relevant museum as its principal business activity;  serve as a relevant museum as its principal business activity;
 have indoor exhibition spaces that are a component of the principal business  have indoor exhibition spaces that are a component of the principal business
activity and have been subjected to pandemic-related occupancy restrictions; and activity and have been subjected to pandemic-related occupancy restrictions; and
 have at least one auditorium, theater, or performance or lecture hall with fixed  have at least one auditorium, theater, or performance or lecture hall with fixed
seating and regular programming. seating and regular programming.
Motion Picture Theatre Operators
In addition to the program’s general eligibility requirements, a motion picture theater operator, In addition to the program’s general eligibility requirements, a motion picture theater operator,
which may be for-profit, nonprofit, or government-owned, must which may be for-profit, nonprofit, or government-owned, must
 have as its principal business activity the ownership or operation of at least one  have as its principal business activity the ownership or operation of at least one
place of public accommodation for the purpose of showing movies for a fee; place of public accommodation for the purpose of showing movies for a fee;
 be open or intend to reopen for the primary purpose of publicly exhibiting motion  be open or intend to reopen for the primary purpose of publicly exhibiting motion
pictures; pictures;
 have at least one auditorium that includes a motion picture screen and fixed  have at least one auditorium that includes a motion picture screen and fixed
audience seating, a projection booth or space containing at least one motion audience seating, a projection booth or space containing at least one motion
picture projector, and a paid ticket charge; and picture projector, and a paid ticket charge; and
 market motion pictures through show-time listings in printed or electronic  market motion pictures through show-time listings in printed or electronic
publications, on websites, by mass mail, or on social media. publications, on websites, by mass mail, or on social media.
Talent Representatives
In addition to the program’s general eligibility requirements, a talent representative (i.e., a In addition to the program’s general eligibility requirements, a talent representative (i.e., a
corporation, limited liability company, partnership, or sole proprietorship serving as an agent or corporation, limited liability company, partnership, or sole proprietorship serving as an agent or
manager for artists and entertainers) may be for-profit, nonprofit, or publicly owned and operated, manager for artists and entertainers) may be for-profit, nonprofit, or publicly owned and operated,
and must and must
 be representing or managing artists and entertainers;  be representing or managing artists and entertainers;
 have at least 70% of its operations involved in representing or managing artists  have at least 70% of its operations involved in representing or managing artists
and entertainers; and entertainers;
 book or represent musicians, comedians, actors, or similar performing artists  book or represent musicians, comedians, actors, or similar performing artists
primarily at live events in venues or at festivals; and primarily at live events in venues or at festivals; and
 represent performers that are paid in an amount that is based on the number of  represent performers that are paid in an amount that is based on the number of
tickets sold, or a similar basis (e.g., entrance fees). tickets sold, or a similar basis (e.g., entrance fees).
Grant Amounts
The SVOG program awards initial and, if funding is available, supplemental grants. The SVOG program awards initial and, if funding is available, supplemental grants.
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Initial Grant Amount
Eligible entities that were in operation on January 1, 2019, receive an initial grant equal to 45% of Eligible entities that were in operation on January 1, 2019, receive an initial grant equal to 45% of
their 2019 gross earned revenue, or $10 million, whichever is less.14 their 2019 gross earned revenue, or $10 million, whichever is less.14
Eligible entities that began operations after January 1, 2019, receive an initial grant equal to the Eligible entities that began operations after January 1, 2019, receive an initial grant equal to the
entity’s average monthly gross revenue for each full month it was in operation during 2019 entity’s average monthly gross revenue for each full month it was in operation during 2019
multiplied by six, or $10 million, whichever is less. multiplied by six, or $10 million, whichever is less.
A relevant museum operator may not receive grants in excess of $10 million for all relevant A relevant museum operator may not receive grants in excess of $10 million for all relevant
museums operated by the operator. Pursuant to the program’s affiliation rules, an applicant, museums operated by the operator. Pursuant to the program’s affiliation rules, an applicant,
together with its affiliates, cannot collectively receive more than $60 million in grants. together with its affiliates, cannot collectively receive more than $60 million in grants.
Supplemental Grant Amount
A supplemental grant equals 50% of the initial grant (subject to the total $10 million cap on all A supplemental grant equals 50% of the initial grant (subject to the total $10 million cap on all
SOVG grants received by the recipient). SOVG grants received by the recipient).
The SBA may not award a supplemental grant until all applications for initial grants submitted The SBA may not award a supplemental grant until all applications for initial grants submitted
within the program’s first 60 days have been processed. within the program’s first 60 days have been processed.
Individuals or entities that received an initial grant may receive a supplemental grant if, as of Individuals or entities that received an initial grant may receive a supplemental grant if, as of
April 1, 2021, the individuals’ or entities’ revenue (not including amounts received under the April 1, 2021, the individuals’ or entities’ revenue (not including amounts received under the
CARES Act and its amendments) for the most recent quarter (first quarter of 2021) is not more CARES Act and its amendments) for the most recent quarter (first quarter of 2021) is not more
than 30% of the revenue for the corresponding quarter in 2019 (first quarter of 2019). than 30% of the revenue for the corresponding quarter in 2019 (first quarter of 2019).
The SBA is authorized to establish alternative methods to calculate revenue losses for seasonal The SBA is authorized to establish alternative methods to calculate revenue losses for seasonal
employers that would be adversely affected if January, February, and March are excluded from employers that would be adversely affected if January, February, and March are excluded from
the calculation of year-over-year revenue. the calculation of year-over-year revenue.
Prioritization of Grant Disbursements
P.L. 116-260 requires the SBA to prioritize the awarding of initial grants in the following manner: P.L. 116-260 requires the SBA to prioritize the awarding of initial grants in the following manner:
First Priority Period—During the first 14 days of the program accepting applications, the SBA —During the first 14 days of the program accepting applications, the SBA
may only award grants to otherwise eligible applicants that have experienced a 90% or greater may only award grants to otherwise eligible applicants that have experienced a 90% or greater
revenue loss during the period beginning on April 1, 2020, through December 31, 2020, revenue loss during the period beginning on April 1, 2020, through December 31, 2020,
compared with the applicant’s revenue during the same period in 2019 due to the COVID-19 compared with the applicant’s revenue during the same period in 2019 due to the COVID-19
pandemic. pandemic.
Second Priority Period—During the next 14 days of the program, the SBA may only award —During the next 14 days of the program, the SBA may only award
grants to otherwise eligible applicants that have experienced a 70% or greater revenue loss during grants to otherwise eligible applicants that have experienced a 70% or greater revenue loss during
the period beginning on April 1, 2020, through December 31, 2020, compared with the the period beginning on April 1, 2020, through December 31, 2020, compared with the
applicant’s revenue during the same period in 2019 due to the COVID-19 pandemic. applicant’s revenue during the same period in 2019 due to the COVID-19 pandemic.
The SBA may award up to 80% ($12 billion) of the SVOG program’s funds during this 28-day The SBA may award up to 80% ($12 billion) of the SVOG program’s funds during this 28-day
priority period. priority period.

14 The SBA counts only funds received from the sale of goods or services as earned revenue. Revenue from other fund 14 The SBA counts only funds received from the sale of goods or services as earned revenue. Revenue from other fund
sources, such as donations, sponsorships, governmental assistance, or returns on investments are not counted. Gross sources, such as donations, sponsorships, governmental assistance, or returns on investments are not counted. Gross
earned revenue is the total of earned revenue from the various sales of goods and services, such as admission tickets, earned revenue is the total of earned revenue from the various sales of goods and services, such as admission tickets,
merchandise, food and beverages, advertising sales, and contracted presentation income. See SBA, “Shuttered Venue merchandise, food and beverages, advertising sales, and contracted presentation income. See SBA, “Shuttered Venue
Operators Grants – FAQ,” January 27, 2021, at https://www.sba.gov/document/support-shuttered-venue-operators-Operators Grants – FAQ,” January 27, 2021, at https://www.sba.gov/document/support-shuttered-venue-operators-
grants-faq?utm_medium=email&utm_source=govdelivery. grants-faq?utm_medium=email&utm_source=govdelivery.
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Third Priority Period—Thereafter, initial grants of remaining funds can be made to all other —Thereafter, initial grants of remaining funds can be made to all other
eligible applicants (entities that have experienced a 25% or greater revenue loss between one eligible applicants (entities that have experienced a 25% or greater revenue loss between one
quarter of 2019 and the corresponding quarter in 2020 due to the COVID-19 pandemic). quarter of 2019 and the corresponding quarter in 2020 due to the COVID-19 pandemic).
As mentioned, the SBA may not award a supplemental grant until all applications for initial As mentioned, the SBA may not award a supplemental grant until all applications for initial
grants submitted within the program’s first 60 days have been processed. In addition, the SBA is grants submitted within the program’s first 60 days have been processed. In addition, the SBA is
required to reserve no less than $2 billion of appropriated funds during the first 59 days of the required to reserve no less than $2 billion of appropriated funds during the first 59 days of the
opening of the SVOG program for grants to entities with 50 or fewer full-time equivalent opening of the SVOG program for grants to entities with 50 or fewer full-time equivalent
employees. employees.
Use of Grant Funds
The initial grant award may be used for eligible expenses incurred during the period beginning on The initial grant award may be used for eligible expenses incurred during the period beginning on
March 1, 2020, through December 31, 2021. Supplemental grants may be used for eligible March 1, 2020, through December 31, 2021. Supplemental grants may be used for eligible
expenses incurred during the period beginning on March 1, 2020, through June 30, 2022. expenses incurred during the period beginning on March 1, 2020, through June 30, 2022.
Any initial grant proceeds that are not spent (on allowable expenses) within one year and any Any initial grant proceeds that are not spent (on allowable expenses) within one year and any
supplemental grant proceeds not spent within 18 months of disbursement must be returned to the supplemental grant proceeds not spent within 18 months of disbursement must be returned to the
SBA. SBA.
Grant funds may be used for the following expenses: Grant funds may be used for the following expenses:
 payroll costs;  payroll costs;
 rent payments;  rent payments;
 utility payments;  utility payments;
 scheduled mortgage payments (not including the prepayment of principal);  scheduled mortgage payments (not including the prepayment of principal);
 scheduled debt payments (not including the prepayment of principal) on any  scheduled debt payments (not including the prepayment of principal) on any
indebtedness incurred in the ordinary course of business prior to February 15, indebtedness incurred in the ordinary course of business prior to February 15,
2020; 2020;
 worker protection expenditures;  worker protection expenditures;
 payments to independent contractors (not to exceed $100,00 in annual  payments to independent contractors (not to exceed $100,00 in annual
compensation per independent contractor); compensation per independent contractor);
 other ordinary and necessary business expenses, including maintenance costs,  other ordinary and necessary business expenses, including maintenance costs,
administrative costs (including fees and licensing costs); state and local taxes and administrative costs (including fees and licensing costs); state and local taxes and
licensing fees; operating leases in effect as of February 15, 2020, and insurance licensing fees; operating leases in effect as of February 15, 2020, and insurance
payments; and payments; and
 advertising, production transportation, and capital expenditures related to  advertising, production transportation, and capital expenditures related to
producing a theatrical or live performing arts production, concert, exhibition, or producing a theatrical or live performing arts production, concert, exhibition, or
comedy show.15 comedy show.15
Grant funds may not be used to Grant funds may not be used to
 purchase real estate;  purchase real estate;
 make payments on loans originated after February 15, 2020;  make payments on loans originated after February 15, 2020;
 make investments or loans;  make investments or loans;

15 P.L. 116-260 specifies that grant proceeds cannot be used primarily for advertising, production transportation, and 15 P.L. 116-260 specifies that grant proceeds cannot be used primarily for advertising, production transportation, and
capital expenditures related to producing a theatrical or live performing arts production, concert, exhibition, or comedy capital expenditures related to producing a theatrical or live performing arts production, concert, exhibition, or comedy
show. show.
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 make contributions or other payments to, or on behalf of, political parties,  make contributions or other payments to, or on behalf of, political parties,
political committees, or candidates for elective office; or political committees, or candidates for elective office; or
 cover any other expenditure prohibited by the SBA Administrator.16  cover any other expenditure prohibited by the SBA Administrator.16
Initial Program Rollout
The SBA has a long history of providing grants to marketing, management, and technical The SBA has a long history of providing grants to marketing, management, and technical
assistance training providers (e.g., Small Business Development Centers, Women Business assistance training providers (e.g., Small Business Development Centers, Women Business
Centers, SCORE, Microloan intermediaries), and, in recent years, with state governments through Centers, SCORE, Microloan intermediaries), and, in recent years, with state governments through
the State Trade Expansion Program.17 The SBA does not have directly comparable experience the State Trade Expansion Program.17 The SBA does not have directly comparable experience
administering grants to for-profit businesses. As such, the agency does not have as many administering grants to for-profit businesses. As such, the agency does not have as many
analogous programs or precedents to expedite the development of the SVOG program. analogous programs or precedents to expedite the development of the SVOG program.
P.L. 116-260 was signed into law on December 27, 2020. The act did not specify a deadline for P.L. 116-260 was signed into law on December 27, 2020. The act did not specify a deadline for
the SBA to implement the SVOG program, which the SBA typically does through the publication the SBA to implement the SVOG program, which the SBA typically does through the publication
of regulations in the of regulations in the Federal Register and the release of SBA guidance or procedural notices on and the release of SBA guidance or procedural notices on
the SBA website. the SBA website.
However, other statutorily required deadlines suggested that Congress expected the SBA to However, other statutorily required deadlines suggested that Congress expected the SBA to
implement the SVOG program expeditiously. For example, the SBA was given until February 10, implement the SVOG program expeditiously. For example, the SBA was given until February 10,
2021 (45 days from the date of enactment) to submit an oversight and audit plan to the House 2021 (45 days from the date of enactment) to submit an oversight and audit plan to the House
Committee on Small Business and Senate Committee on Small Business and Entrepreneurship Committee on Small Business and Senate Committee on Small Business and Entrepreneurship
“that details—(A) the policies and procedures of the Administrator for conducting oversight and “that details—(A) the policies and procedures of the Administrator for conducting oversight and
audits of grants under this section; and (B) the metrics that the Administrator shall use to audits of grants under this section; and (B) the metrics that the Administrator shall use to
determine which grants will be audited.” determine which grants will be audited.”
The act also specified that the SBA was to provide to the House and Senate Committees on Small The act also specified that the SBA was to provide to the House and Senate Committees on Small
Business, not later than February 25, 2021 (60 days after the date of enactment), the first of a Business, not later than February 25, 2021 (60 days after the date of enactment), the first of a
series of monthly oversight and audit reports of the initial grants approved and disbursed. series of monthly oversight and audit reports of the initial grants approved and disbursed.
Soon after P.L. 116-260’s enactment, the SBA created a SVOG program web page, providing a Soon after P.L. 116-260’s enactment, the SBA created a SVOG program web page, providing a
brief overview of the program’s details (when enacted, available funding, and a link to frequently brief overview of the program’s details (when enacted, available funding, and a link to frequently
asked questions), program eligibility, formulas for determining SVOG initial and supplemental asked questions), program eligibility, formulas for determining SVOG initial and supplemental
grant amounts, application instructions (initially just a table indicating how grant awards were to grant amounts, application instructions (initially just a table indicating how grant awards were to
be prioritized because the application portal was not yet available), and allowable uses for the be prioritized because the application portal was not yet available), and allowable uses for the
funds.18 funds.18
Recognizing that venue operators were anxious for the program to begin and eager to learn if they Recognizing that venue operators were anxious for the program to begin and eager to learn if they
would qualify for assistance, on January 14, 2021, the SBA held an informational webinar on the would qualify for assistance, on January 14, 2021, the SBA held an informational webinar on the

16 The SBA has not prohibited any other uses to date. 16 The SBA has not prohibited any other uses to date.
17 In addition, the SBA is authorized to provide grants to states to contract with small businesses to plant trees. The 17 In addition, the SBA is authorized to provide grants to states to contract with small businesses to plant trees. The
program was operational during the 1990s. See P.L. 101-515, the Departments of Commerce, Justice, and State, the program was operational during the 1990s. See P.L. 101-515, the Departments of Commerce, Justice, and State, the
Judiciary, and Related Agencies Appropriations Act, 1991. Judiciary, and Related Agencies Appropriations Act, 1991.
For additional information and analysis concerning the SBA’s management and technical assistance training programs, For additional information and analysis concerning the SBA’s management and technical assistance training programs,
see CRS Report R41352, see CRS Report R41352, Small Business Management and Technical Assistance Training Programs, by Robert Jay , by Robert Jay
Dilger. For additional information and analysis concerning the SBA’s trade and export promotion programs, see CRS Dilger. For additional information and analysis concerning the SBA’s trade and export promotion programs, see CRS
Report R43155, Report R43155, Small Business Administration Trade and Export Promotion Programs, by Sean Lowry. , by Sean Lowry.
18 The frequently asked questions document was updated on January 27, 2021, and February 5, 2021. See SBA, 18 The frequently asked questions document was updated on January 27, 2021, and February 5, 2021. See SBA,
“Shuttered Venue Operators Grants – FAQ,” January 27, 2021, at https://www.sba.gov/document/support-shuttered-“Shuttered Venue Operators Grants – FAQ,” January 27, 2021, at https://www.sba.gov/document/support-shuttered-
venue-operators-grants-faq?utm_medium=email&utm_source=govdelivery. venue-operators-grants-faq?utm_medium=email&utm_source=govdelivery.
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SVOG program.19 The webinar provided introductory information about the SVOG program, who SVOG program.19 The webinar provided introductory information about the SVOG program, who
can apply, how potential organizations can prepare, and additional details concerning program can apply, how potential organizations can prepare, and additional details concerning program
eligibility and the application process.20 A second informational webinar, provided by the Central eligibility and the application process.20 A second informational webinar, provided by the Central
Indiana Small Business Development Center, was held on February 2, 2021.21 Indiana Small Business Development Center, was held on February 2, 2021.21
The SBA provided a third informational webinar on the program on March 31, 2021.22 The SBA Office of Disaster Assistance expected that it would take some time for the program to The SBA Office of Disaster Assistance expected that it would take some time for the program to
become operational because the SBA’s disaster assistance electronic application processing become operational because the SBA’s disaster assistance electronic application processing
software is configured for loans, not grants. As a result, the SBA has to create new software to software is configured for loans, not grants. As a result, the SBA has to create new software to
process SVOG applications. SBA’s Office of Disaster Assistance had a similar challenge in process SVOG applications. SBA’s Office of Disaster Assistance had a similar challenge in
administering the Emergency Economic Injury Disaster Loan (EIDL) advance payment (grant) administering the Emergency Economic Injury Disaster Loan (EIDL) advance payment (grant)
program (authorized by P.L. 116-136) and the Targeted EIDL advance payment (grant) program program (authorized by P.L. 116-136) and the Targeted EIDL advance payment (grant) program
(authorized by P.L. 116-260). Although both of these programs are technically still a loan, the (authorized by P.L. 116-260). Although both of these programs are technically still a loan, the
SBA had to rewrite the software underpinning its disaster assistance electronic portal to account SBA had to rewrite the software underpinning its disaster assistance electronic portal to account
for the programs’ various eligibility requirements and loan (award) amounts. for the programs’ various eligibility requirements and loan (award) amounts.
As the SBA As the SBA ~~continues~~continued to build the SVOG program’s application portal and complete the to build the SVOG program’s application portal and complete the
program’s regulations and guidance, many venue operators program’s regulations and guidance, many venue operators ~~have~~ contacted both the SBA and contacted both the SBA and
congressional offices with questions about program eligibility and the application acceptance congressional offices with questions about program eligibility and the application acceptance
date. In response to these questions, some Members of Congress contacted the SBA, urging the date. In response to these questions, some Members of Congress contacted the SBA, urging the
agency to provide eligibility for specific types of venues. For example, Senators Marco Rubio, agency to provide eligibility for specific types of venues. For example, Senators Marco Rubio,
Jim Risch, and Mitt Romney sent a letter to the SBA on January 16, 2021, urging the agency to Jim Risch, and Mitt Romney sent a letter to the SBA on January 16, 2021, urging the agency to
include minor league sports venues in the program.include minor league sports venues in the program.2223 The SBA subsequently included in its The SBA subsequently included in its
SVOG Frequently Asked Questions (FAQs) document, updated on January 27, 2021, that minor SVOG Frequently Asked Questions (FAQs) document, updated on January 27, 2021, that minor
league sports venues generally would not be eligible because “sports are not a form of performing league sports venues generally would not be eligible because “sports are not a form of performing
art.”art.”2324
On March 5, 2021, the SBA published a preliminary SVOG application checklist on its website to On March 5, 2021, the SBA published a preliminary SVOG application checklist on its website to
help potential applicants identify documentation that will be needed once the application portal is help potential applicants identify documentation that will be needed once the application portal is
~~up and running (updated on March 11, 2021).24 The SBA also published on its website on March~~
~~5, 2021, a table summarizing the SVOG’s eligibility requirements (updated on March 16, 2021).25~~

19 SBA, “SBA to Host Shuttered Venue Operators Grant Webinar on Jan. 14,” at https://www.sba.gov/article/2021/jan/19 SBA, “SBA to Host Shuttered Venue Operators Grant Webinar on Jan. 14,” at https://www.sba.gov/article/2021/jan/
12/sba-host-shuttered-venue-operators-grant-webinar-jan-14-0. 12/sba-host-shuttered-venue-operators-grant-webinar-jan-14-0.
20 SBA, “Archived Webinar: Shuttered Venue Operators Grant Overview,” November 14, 2021, at 20 SBA, “Archived Webinar: Shuttered Venue Operators Grant Overview,” November 14, 2021, at
https://www.youtube.com/watch?v=PdfQGb6z-gg. https://www.youtube.com/watch?v=PdfQGb6z-gg.
21 SBA, “Shuttered Venue Operators Grant - Emergency Assistance for Eligible Venues Affected by the COVID 21 SBA, “Shuttered Venue Operators Grant - Emergency Assistance for Eligible Venues Affected by the COVID
Pandemic,” February 2, 2021, at https://www.eventbrite.com/e/qa-session-on-the-shuttered-venue-operators-grant-Pandemic,” February 2, 2021, at https://www.eventbrite.com/e/qa-session-on-the-shuttered-venue-operators-grant-
tickets-138490953169?aff=erelexpmlt. tickets-138490953169?aff=erelexpmlt.
22 22 SBA, “Archived Webinar: Shuttered Venue Operators Grant Information Session,” March 31, 2021, at https://www.youtube.com/watch?v=CNWsgR9ESUs. 23 Sen. Mitt Romney, “Romney Urges SBA to Include Minor League Sports Venues in Grant Eligibility: Would Permit Sen. Mitt Romney, “Romney Urges SBA to Include Minor League Sports Venues in Grant Eligibility: Would Permit
Ogden Raptors to Receive Grant Funds for Lindquist Field,” January 16, 2021, at https://www.romney.senate.gov/Ogden Raptors to Receive Grant Funds for Lindquist Field,” January 16, 2021, at https://www.romney.senate.gov/
romney-urges-sba-include-minor-league-sports-venues-grant-eligibility. romney-urges-sba-include-minor-league-sports-venues-grant-eligibility.
2324 The SBA indicated that “while sports are not a form of performing art, if the operator of a sports stadium or similar The SBA indicated that “while sports are not a form of performing art, if the operator of a sports stadium or similar
athletic arena can meet the statutory definition of an eligible entity under the Economic Aid Act, including the athletic arena can meet the statutory definition of an eligible entity under the Economic Aid Act, including the
requirement that its principal business activity must be the organization, promotion, management, or hosting of live requirement that its principal business activity must be the organization, promotion, management, or hosting of live
concerts, comedy shows, theatrical productions or other events by performing artists, it should be eligible to apply for concerts, comedy shows, theatrical productions or other events by performing artists, it should be eligible to apply for
an SVOG.” See SBA, “Shuttered Venue Operators Grants – FAQ,” January 27, 2021, at https://www.sba.gov/an SVOG.” See SBA, “Shuttered Venue Operators Grants – FAQ,” January 27, 2021, at https://www.sba.gov/
document/support-shuttered-venue-operators-grants-faq?utm_medium=email&utm_source=govdelivery. document/support-shuttered-venue-operators-grants-faq?utm_medium=email&utm_source=govdelivery.
~~24 SBA, “Shuttered Venue Operators Grant Preliminary Application Checklist,” at~~
~~https://www.sba.gov/document/support-shuttered-venue-operators-grant-preliminary-application-checklist. (updated~~
~~25 SBA, “Shuttered Venue Operators Grant Eligibility Requirements,” at https://www.sba.gov/document/support-~~
~~shuttered-venue-operators-grant-eligibility-requirements.~~
~~Congressional Research Service~~

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~~SBA Shuttered Venue Operators Grant Program (SVOG)~~

Congressional Research Service 10 SBA Shuttered Venue Operators Grant Program (SVOG) up and running (updated on March 11, 2021).25 The SBA also published on its website on March 5, 2021, a table summarizing the SVOG’s eligibility requirements (updated on March 16, 2021).26 On March 19, 2021, the SBA announced that it would start accepting SVOG applications on April On March 19, 2021, the SBA announced that it would start accepting SVOG applications on April
8, 2021.8, 2021.~~26 Once~~27 Now that the application portal is up and running, questions about SVOG program the application portal is up and running, questions about SVOG program
eligibility and the inevitable questions about the portal’s ease of use for applicants may shift to eligibility and the inevitable questions about the portal’s ease of use for applicants may shift to
questions about the portal’s ability to provide information of interest for evaluating the program’s questions about the portal’s ability to provide information of interest for evaluating the program’s
use and efficacy. For example, will this information enable Congress to assess the program’s (1) use and efficacy. For example, will this information enable Congress to assess the program’s (1)
output performance, as measured by the number and value of the grant awards, average grant output performance, as measured by the number and value of the grant awards, average grant
size, use of funds, and the distribution of grant awards by firm size, demographic characteristics, size, use of funds, and the distribution of grant awards by firm size, demographic characteristics,
or business location; and (2) outcome performance, as measured by the number of jobs retained or business location; and (2) outcome performance, as measured by the number of jobs retained
and created, or recipient survivability. and created, or recipient survivability.
Program Oversight and Reporting Requirements
P.L. 116-260 requires the SBA to increase its oversight of the SVOG program. To assist the P.L. 116-260 requires the SBA to increase its oversight of the SVOG program. To assist the
agency in this effort, grant recipients must retain employment records documenting their agency in this effort, grant recipients must retain employment records documenting their
compliance with the program’s employment requirements for four years after receiving grants. compliance with the program’s employment requirements for four years after receiving grants.
Other records necessary to document compliance with SVOG requirements must be retained for Other records necessary to document compliance with SVOG requirements must be retained for
three years after receiving the grant. The SBA is authorized to review and audit these records, and three years after receiving the grant. The SBA is authorized to review and audit these records, and
in the case of fraud, will require repayment of misspent funds or result in legal action to collect in the case of fraud, will require repayment of misspent funds or result in legal action to collect
the funds. the funds.
In addition, as mentioned, the SBA was given until February 10, 2021 (45 days from the date of In addition, as mentioned, the SBA was given until February 10, 2021 (45 days from the date of
enactment) to submit an oversight and audit plan to the House Committee on Small Business and enactment) to submit an oversight and audit plan to the House Committee on Small Business and
Senate Committee on Small Business and Entrepreneurship “that details—(A) the policies and Senate Committee on Small Business and Entrepreneurship “that details—(A) the policies and
procedures of the Administrator for conducting oversight and audits of grants under this section; procedures of the Administrator for conducting oversight and audits of grants under this section;
and (B) the metrics that the Administrator shall use to determine which grants will be audited.” and (B) the metrics that the Administrator shall use to determine which grants will be audited.”
The act also specified that the SBA was to provide to the House Committee on Small Business The act also specified that the SBA was to provide to the House Committee on Small Business
and Senate Committee on Small Business and Entrepreneurship, not later than February 25, 2021 and Senate Committee on Small Business and Entrepreneurship, not later than February 25, 2021
(60 days after the date of enactment) and each month thereafter until one year after the date on (60 days after the date of enactment) and each month thereafter until one year after the date on
which the grant funds have been expended, an oversight and audit report that includes which the grant funds have been expended, an oversight and audit report that includes
 the total number of initial grants approved and disbursed;  the total number of initial grants approved and disbursed;
 the total amount of grants received by each eligible person or entity, including  the total amount of grants received by each eligible person or entity, including
any supplemental grants; any supplemental grants;
 the number of active investigations and audits of grants;  the number of active investigations and audits of grants;
 the number of completed reviews and audits of grants, including a description of  the number of completed reviews and audits of grants, including a description of
any findings of fraud or other material noncompliance; and any findings of fraud or other material noncompliance; and
 any substantial changes made to the oversight and audit plan previously  any substantial changes made to the oversight and audit plan previously
submitted. submitted.
~~Concluding Observations~~
~~The SVOG program marks a departure from the typical structure of the SBA’s current programs.~~
~~The SBA has relatively little experience, let alone systems in place, to administer a grant program~~
~~to a large number of for-profit and nonprofit entities. The SBA’s programs have typically been~~

~~26 SBA, “SBA Launches Portal to Begin Accepting Shuttered Venue Operators Grant Applications on April 8 National~~
~~informational webinar to review application process on March 30,” March 19, 2021.~~
~~Congressional Research Service~~

11

~~SBA Shuttered Venue Operators Grant Program (SVOG)~~

~~targeted to “small business concerns,” as defined by the Small Business Act and implementing~~
~~regulations. In contrast, the SVOG uses unique sets of eligibility standards that are not tied to the~~
~~Congressional Research Service~~

12

~~SBA Shuttered Venue Operators Grant Program (SVOG)~~

25 SBA, “Shuttered Venue Operators Grant Preliminary Application Checklist,” at https://www.sba.gov/document/support-shuttered-venue-operators-grant-preliminary-application-checklist. 26 SBA, “Shuttered Venue Operators Grant Eligibility Requirements,” at https://www.sba.gov/document/support-shuttered-venue-operators-grant-eligibility-requirements. 27 SBA, “SBA Launches Portal to Begin Accepting Shuttered Venue Operators Grant Applications on April 8 National informational webinar to review application process on March 30,” March 19, 2021. Congressional Research Service 11 link to page 15 SBA Shuttered Venue Operators Grant Program (SVOG) In a related development, on April 7, 2021, the SBA’s Office of Inspector General (OIG) issued a management alert indicating “serious concerns with the control environment and the tracking of performance results in the Shuttered Venue Operators Grant (SVOG) requiring immediate attention and action.”28 The OIG indicated that the SBA had decided to take into account an assessment of the applicant’s level of risk (low, moderate, and high)29 and the award amount to determine the SVOG award payment schedule (from 1 to 4 payments) and the likelihood of the applicant being audited (see Table 1). Table 1. SBA’s Planned Risk Assessment for the SVOG Program’s Grant Recipients Risk Level Award Amount Payment Schedule Low Risk Less than $1 mil ion Lump Sum or 2 payments Moderate Risk Less than $1 mil ion 2 payments Moderate Risk $1 mil ion to $10 mil ion 2 or 3 payments High Risk $1 mil ion to $10 mil ion 3 or 4 payments Source: SBA, Office of Inspector General (SBA OIG), Management Alert Serious Concerns About SBA’s Control Environment and the Tracking of Performance Results in the Shuttered Venue Operators Grant Program, Report Number 21-13, April 7, 2021, p. 3, at https://www.sba.gov/sites/default/files/2021-04/SBA%20OIG%20Report%2021-13.pdf. The OIG noted that the SBA expected 15,000 applicants and an average award amount of $1 million. “In cases where disbursements have multiple payments, the grantee will be required to submit documentation to show how the funds were spent prior to receiving the next installment.”30 The OIG also noted that under the planned disbursement schedule the majority of awards will be categorized as low risk and as such, be disbursed in sweeping lump sum payments with minimal requirements and expectations for post-award accountability.... with the exception of auditing all grant recipients receiving $10 million, which is the maximum cap for any single award, the plan would likely result in a minimal number of recipients subject to an audit. Most notably at the low-risk level, ODA [SBA Office of Disaster Assistance] set a maximum number of 10 audits, despite program officials’ estimates that the majority of grant recipients would be in the low-risk level. Based on this framework, ODA’s audit plan exposes billions of dollars to potential misuse of funds because the bulk of grant funds will not be subject to a reasonable degree of scrutiny.31 The OIG recommended that the SBA “reassess the audit risk plan to identify vulnerabilities, commensurate with the expected volume of applications and average award amount, to strengthen 28 SBA, Office of Inspector General (SBA, OIG), Management Alert Serious Concerns About SBA’s Control Environment and the Tracking of Performance Results in the Shuttered Venue Operators Grant Program, Report Number 21-13, April 7, 2021, p. 1, at https://www.sba.gov/sites/default/files/2021-04/SBA%20OIG%20Report%2021-13.pdf (hereinafter SBA, OIG, Management Alert Serious Concerns About SBA’s Control Environment and the Tracking of Performance Results in the Shuttered Venue Operators Grant Program). 29 Before awarding a SVOG grant, the SBA reviews the applicant’s risk using factors such as the applicant’s financial stability, history of unsatisfactory performance, history of fulfilling the conditions of prior grants, and other evidence of responsibility. See SBA, “Applications for New Awards; Shuttered Venue Operators Grants (SVOG),” 86 Federal Register 16274, March 26, 2021. 30 SBA, OIG, Management Alert Serious Concerns About SBA’s Control Environment and the Tracking of Performance Results in the Shuttered Venue Operators Grant Program, p. 3. 31 SBA, OIG, Management Alert Serious Concerns About SBA’s Control Environment and the Tracking of Performance Results in the Shuttered Venue Operators Grant Program, p. 3. Congressional Research Service 12 SBA Shuttered Venue Operators Grant Program (SVOG) internal controls and reduce rise of misuse of federal funds.”32 The OIG’s management alerts do not require, and typically do not include, a written response from the SBA. As a result, the SBA’s rationale for, defense of, or reconsideration of its planned award payment schedule and auditing framework was not presented in the OIG’s report. Concluding Observations The SVOG program marks a departure from the typical structure of the SBA’s current programs. The SBA has relatively little experience, let alone systems in place, to administer a grant program to a large number of for-profit and nonprofit entities. The SBA’s programs have typically been targeted to “small business concerns,” as defined by the Small Business Act and implementing regulations. In contrast, the SVOG uses unique sets of eligibility standards that are not tied to the industry-specific size standards used in the SBA’s business loan programs. In addition, the SBA’s industry-specific size standards used in the SBA’s business loan programs. In addition, the SBA’s
programs have typically catered to all small businesses, regardless of industry. The SVOG could programs have typically catered to all small businesses, regardless of industry. The SVOG could
represent a shifting congressional interest in having the SBA target assistance at meeting the represent a shifting congressional interest in having the SBA target assistance at meeting the
needs of specific industries in economic distress. needs of specific industries in economic distress.
Over the coming months, congressional oversight will, most likely, focus on the SBA’s Over the coming months, congressional oversight will, most likely, focus on the SBA’s
implementation of the SVOG program and eligibility questions. As time passes, increased implementation of the SVOG program and eligibility questions. As time passes, increased
attention is likely to be focused on fraud detection and prevention and program performance. The attention is likely to be focused on fraud detection and prevention and program performance. The
SBA’s reporting requirements will provide Congress information related to the agency’s efforts to SBA’s reporting requirements will provide Congress information related to the agency’s efforts to
detect, prevent, and prosecute fraudulent behaviors. The reporting requirements will also provide detect, prevent, and prosecute fraudulent behaviors. The reporting requirements will also provide
information related to program outputs, such as the total number of initial and supplemental information related to program outputs, such as the total number of initial and supplemental
grants approved and disbursed and grant recipients. It remains to be determined whether Congress grants approved and disbursed and grant recipients. It remains to be determined whether Congress
will receive useful information for measuring program outcomes, such as how many jobs the will receive useful information for measuring program outcomes, such as how many jobs the
grants helped to create or retain, their impact on venue survivability and profit growth, and their grants helped to create or retain, their impact on venue survivability and profit growth, and their
impact on the artists who rely on these venues for their livelihoods. impact on the artists who rely on these venues for their livelihoods.

Author Information

Robert Jay Dilger Robert Jay Dilger
Sean Lowry Sean Lowry
Senior Specialist in American National Government Analyst in Public Finance Senior Specialist in American National Government Analyst in Public Finance

32 SBA, OIG, Management Alert Serious Concerns About SBA’s Control Environment and the Tracking of Performance Results in the Shuttered Venue Operators Grant Program, p. 6. Congressional Research Service 13 SBA Shuttered Venue Operators Grant Program (SVOG)

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Congressional Research Service Congressional Research Service
R46689 R46689 · VERSION 35 · UPDATED
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