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The New Consolidated Appropriations Act: How it Affects Churches

01.27.2021 Written by: Henningson & Snoxell, Ltd.

The New Consolidated Appropriations Act: How it Affects Churches

After many months of waiting and speculation, the COVID-19 Emergency Relief Package, officially known as the Consolidated Appropriations Act (“CAA”) became law on December 27, 2020. Below, we want to bring your attention to three provisions of the CAA directly affecting Minnesota churches.

1. Extension of Paycheck Protection Loans

First off, a second “round” of Payroll Protection Program (“PPP”) loans is now available, even to those churches that previously received a PPP loan. To receive a “new” PPP loan, churches must meet new qualification standards different from the previous PPP loans authorized under the CARES Act. These new qualifications standards include, amongst others:

  • Employing no more than 300 employees; and
  • Able to document a 25% or more drop in gross receipts between comparable quarters in 2019 and 2020, excluding any funds received from a first PPP loan.

The loan application deadline is March 31, 2021, but you may deplete available loan funds before then. To apply, consult your church’s banker or another lender offering PPP loans.

2. Extension of the Families First Coronavirus Leave Tax Credits, NOT Leave Entitlements

The Families First Coronavirus Response Act (“FFCRA”) required employers to provide paid sick leave and expanded family and medical leave to their employees. This requirement expired on December 31, 2020. The CAA permits employers to continue to provide these FFCRA-created paid leaves for their employees and extends the associated refundable payroll tax credits for these leaves through March 31, 2021. The payroll tax credits help to offset the cost of providing these leave benefits.

3. Copyright Infringement Claims

The Copyright Alternative in Small-Claims Enforcement (CASE) Act was enacted as part of the CAA. The new CASE Act is likely to increase the number of copyright infringement claims across the U.S., including claims against churches, due to its affordability and simplified process. Churches need to know their copyright law obligations and remain diligent in upholding legal obligations.

Churches must obtain a license to use copyrighted works on their websites, publications, worship, and other activities. Although some exceptions to copyright law exist under the “Religious Services” exemption to copyright law, this protection does not apply to broadcasting or other transmissions to the public at large, including online worship services. Such unauthorized streaming may be considered copyright infringement, and the CASE Act has made legal action less costly and more efficient. We could see a rise in legal action as a result.

Moreover, under this new law, claims of copyright infringement of $30,000 and under can be brought before the Copyright Claims Board without an attorney. The Copyright Claims Board is described as a voluntary alternative for resolving copyright claims, but a defendant (likely to be your church) can reject or opt out of this new process and have the claims decided in federal courts. This “opt-out” must occur within 60 days of receiving notice of a claim. Failure to do so will result in consent to the Copyright Claims Board proceedings and may include the loss of important legal rights. It is important to contact an attorney upon receiving any copyright infringement claim notice to discuss the case’s specifics.

Jim Snoxell chairs the Henningson & Snoxell, Ltd. Business Law and Nonprofit Organizations Department. He works primarily with the firm’s business and nonprofit clients by advising about business and corporate law issues. Jim assists nonprofit organizations with their special legal concerns and needs.Virginia (Ginny) Cronin is an attorney at the firm of Henningson & Snoxell, Ltd. located in Maple Grove, Minnesota, practicing exclusively in the area of nonprofit organizations.

Virginia Cronin

Virginia (Ginny) Cronin is an attorney at the firm of Henningson & Snoxell, Ltd. located in Maple Grove, Minnesota, practicing exclusively in the area of nonprofit organizations.

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