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Small businesses and nonprofits to receive $65M in COVID aid allocated by SC lawmakers

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Rep. Mike Sottile, R-Isle of Palms, gives his farewell speech Tuesday, Sept. 22, 2020, while surrounded by his colleagues who represent parts of Charleston County. Sottile is leaving the House after 12 years. Rep. Shannon Erickson, R-Beaufort, records his farewell. Seanna Adcox/Staff

COLUMBIA — Small businesses struggling to stay open and nonprofits trying to keep families afloat can apply for federally funded grants approved Wednesday by the state Legislature.

Lawmakers allocated $40 million for small businesses and $25 million for nonprofits — capping grants at $25,000 and $50,000 each, respectively — under a compromise that spends what's left of a $1.9 billion chunk of federal COVID-19 aid for South Carolina that Congress approved in late March.

The biggest priority for the Legislature's $693 million in phase-two funding is again replenishing the state fund that pays for unemployment benefits. The latest $420 million allocation to the jobless fund, combined with another $500 million sent there in May, is expected to cover payouts made during this year's historically high layoffs. 

"That will prevent a rate increase on businesses as they lead the way" in reviving the state's economy, said Sen. Thomas Alexander, R-Walhalla. 

Legislators made sure of that with a separate clause specifically barring the state Department of Employment and Workforce from raising businesses' unemployment taxes in 2021.

Many lawmakers have repeatedly said replenishing the trust fund is the best way to help businesses of all sizes and their employees because a tax increase could be the death knell for employers trying to bring back the workers they were forced to lay off during the shutdowns. 

The compromise put an additional $93.1 million toward statewide testing for COVID-19. It also allows for interviewing people who test positive to identify who else potentially needs to quarantine even if they don't feel sick, to prevent spreading the virus.

That's on top of the $42.4 million for testing in round one.    

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The small business grant program puts a priority on minority owned businesses and those with fewer than 15 employees, which haven't received other federal coronavirus relief. 

"These businesses are hanging on," many seeing a fraction of their normal sales, said Rep. Kirkman Finlay, R-Columbia, who was on the negotiating committee. "They're trying to survive."

Without some help, family businesses that have been around for generations could disappear, said House Ways and Means Chairman Murrell Smith, R-Sumter.  

The nonprofit grant program is aimed at helping organizations that help South Carolina's residents, such as providing food, assistance in paying bills, shelter for victims of abuse, and mental health counseling and other health care services. The federal Coronavirus Aid, Relief and Economic Security, or CARES, Act specifies the aid can't go directly to individuals.

Eligible expenses for both grant programs include two month's worth of rent, payroll, utilities and protective items.

The law allows state Education Superintendent Molly Spearman to redirect money intended for in-person summer learning — which largely didn't happen as COVID-19 cases spiked across the state — for tutoring, school safety measures, more online teachers and full-time nurses, as she requested earlier this month. 

The $693 million in Wednesday's bill redirects $25 million not spent from what was doled out in May. 

Under the CARES Act, any of the $1.9 billion under the Legislature's control must be spent by Dec. 31, or it reverts to federal coffers.

Follow Seanna Adcox on Twitter at @seannaadcox_pc.

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