by George Schroeder and Jonathan Howe, posted Thursday April 02, 2020 (12 hours ago)
EDITOR’S NOTE: A few hours after the publication of this story, an interim final rule was issued by the US Small Business Association which made churches and other departments eligible to receive paycheck protection program loans and ensured that organizations Denominational nonprofits will not face a potential conflict with the protections of religious freedom. See the related story here.
NASHVILLE (BP) – While many churches and other ministries are eligible to receive loans as part of a massive financial stimulus bill passed by Congress last week, concerns have been raised about federal regulations that could create a conflict with the protections of religious freedom.
The paycheck protection program, adopted as part of the $ 2 trillion CARES law to alleviate economic hardship caused by the COVID-19 pandemic, has set aside $ 350 billion to secure loans to businesses employing less than 500 employees for expenses such as payroll, utilities and rent or mortgage. Payments. Non-profit organizations, including churches and religious ministries, are eligible to receive funds covering up to 2.5 times their average monthly payroll, with a ceiling of $ 10 million per loan.
An example application for the program, which is administered by the US Small Business Administration (SBA), requires that applicants “agree not to discriminate in any business practice, including employment practices and services to the public” in the categories set out in Title 13 of the Code of Federal Regulations. These categories include religion and gender.
Although churches are protected by the Constitution, organizations such as the Ethics & Religious Liberty Commission of the Southern Baptist Convention have worked to clarify the issue.
In the meantime, Jonathan Whitehead, a lawyer specializing in first amendment law, said he had advised churches seeking his lawyer to “wait and see” what the SBA guidelines say to churches before asking for a ready under the program. But Whitehead, an ERLC administrator, conceded, “There is a question of whether you should be the first online (to make sure the funds are available). “
Travis Wussow, ERLC general counsel and vice president of public policy, said that the Trump administration was aware of the concerns and was making efforts to provide advice and assurances that churches would not lose their constitutional protections by participating in the program.
“We are working closely with the Senate and the White House to ensure respect and respect for the constitutional rights of places of worship,” said Wussow. “This is a rapidly evolving process, but we are confident that these problems will be resolved by the administration. “
In another issue, several members of Congress urged the SBA to advise lenders that non-profit organizations, including churches and affiliated religious organizations, were eligible to apply for loans.
In a letter to the head of the SBA, Jovita Carranza, Senator Josh Hawley (R-Mo.) Noted the expanded access of the CARES law to section 7 (a) of the SBA loans which “exclude certain organizations because of their main religious purpose. ” . “
Hawley wrote in support of churches and other religious organizations, saying they should be eligible for the paycheck protection program because he “asks lenders to consider only the size of the organization, if the organization was operational on February 15 and the organization paid wages and payroll taxes. at that time “instead of disqualifying certain candidates on the basis of their” main objective “as could be the case with other loans from section 7 (a) of the SBA.
This intention of eligibility for churches was echoed by a quartet of congressmen on both sides of the aisle.
Cedric Richmond (D-La.), Mike Johnson (R-La.), James E. Clyburn (DS.C.) and Steve Scalise (R-La.) Have written in a separate letter to Carranza, the Secretary of the Treasury Steven Mnuchin and The Secretary of Labor, Eugene Scalia, that “although the definition of non-profit organization in section 1102 applies explicitly only to the paycheck protection program under section 7 (a) of the Small Business Act established by this section, we can assure you that Congress did not intend to require that not-for-profit organizations have an exemption determination letter to be eligible for assistance from the through any other article of the CARES Law. “
The letter also stated that “many places of worship and their congregations would suffer great harm if they were not eligible to receive the assistance that Congress had intended for them.”
Although the issue of the requirements of non-discrimination is likely to be resolved soon, it has highlighted the concerns of some pastors and other religious leaders who are reluctant to accept government assistance due to possible entanglement with the government. ‘State.
Even if churches choose not to apply for the loans, Whitehead noted that the paycheck protection program could still provide indirect assistance to churches because some church members who own small businesses could participate.