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SBA Allows Tribal Casinos to Apply to Newly Replenished Paycheck Protection Program

On April 24, 2020, the Small Business Administration (“SBA”) determined that tribal casinos are eligible for the Paycheck Protection Program (“PPP”), just as funding for the program is replenished.   In an Amended Interim Final Rule, SBA clarified that businesses receiving legal gaming revenue and otherwise meeting the qualification requirements for the PPP are now eligible to apply. The same day, President Trump signed the Paycheck Protection Program and Health Care Enhancement Act into law, providing, among other things, more than $250 billion in additional unrestricted funds for the PPP and an additional $60 billion for smaller lending institutions.  The SBA resumed accepting PPP applications on April 27, 2020 at 10:30am EST.

The SBA’s April 24th Amended Interim Final Rule removes some restrictions set out in the original SBA guidance that was published on April 2, 2020 to implement the initial $349 billion distribution.  The original Interim Final Rule excluded casinos and lenders from eligibility due to SBA’s incorporation of a 1953 rule (now found at 13 CFR 120.110) that barred granting Section 7(a) loans to certain entities, including financial businesses and gaming businesses.   Although the SBA soon released an FAQ on April 8th stating generally that “Tribal business concerns” were eligible, the additional April 14th Interim Final Rule failed to clarify the restriction and, as a result, tribal gaming and lending businesses were largely rejected by implementing banks.  The SBA still deems lending businesses ineligible for the PPP.

The exclusion of tribal gaming and lending businesses was a common concern of tribal leaders at an SBA consultation regarding implementation of the PPP held on April 14th.  Several members of Congress also identified the issue as problematic in a letter sent to Secretaries Mnuchin and Bernhardt on April 16th.  Ultimately, three tribes filed suit in U.S. District Court, claiming that the SBA violated the terms of a coronavirus relief bill when it barred lawfully operating tribal casinos and lenders from applying to the PPP.  (Flandreau Santee Sioux Tribe v. Carranza, No. 4:20-cv-04070 (D.S.D., filed Apr. 24, 2020).   Other non-tribal businesses have filed suit challenging only the exclusion of lenders.

It is unclear if the Flandreau lawsuit will continue or if any remedy exists for the tribal businesses’ exclusion from the first round of PPP funding.  It is also unclear if the applications of tribal businesses initially excluded by SBA’s implementing regulations will be given any priority in the second round of funding, given that SBA has a significant backlog from the first round of applications.

The one clear change is that tribal gaming is eligible to apply for the PPP.   For Tribal businesses seeking PPP funding, please see our Practical Tips for Tribal Organization Access to the SBA Paycheck Protection Program.

© 2020 Van Ness Feldman LLPNational Law Review, Volume X, Number 118
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About this Author

Maranda Compton, Van Ness Feldman Law Firm, Environmental and Litigation Law Attorney
Of Counsel

Maranda Compton focuses her practice on all aspects of Native American law and policy.  She is experienced in representing both tribal and non-tribal clients in a wide range of federal regulatory, environmental, energy, and natural resources issues, with particular knowledge of the oil and gas industry.

For her clients, Maranda provides a deep understanding of the diverse and complex factors involved in disputes, transactions and regulation arising in the tribal context.  Applying her intimate knowledge of Indian Country, she helps clients...

202-298-1806
Robert Conrad, Van Ness Feldman Law Firm, Washington DC, Energy and Environmental Law Attorney
Associate

Robert Conrad is a  graduate of American University Washington College of Law.  His areas of interest include natural resources, historic preservation, land use, energy and environmental law. Prior to law school, Robert participated in the Conservation and Diversity Project Internship Program with the Conservation Trust for North Carolina and interned at the United States Department of Agriculture through the Washington Internship for Native Students program.

Robert is an enrolled member of the United Keetoowah Band of Cherokee Indians in Oklahoma.

202-298-1927
Laura E. Jones American Indian Law Attorney Van Ness Feldman Denver, CO
Associate

Laura focuses her practice on American Indian law, including economic development work, federal regulatory issues, environmental compliance, and federal-tribal consultation, as well as a broad range of civil litigation.  Laura has represented tribal and non-tribal businesses with regulatory and compliance matters, land use issues, and commercial lending transactions.  

Prior to joining Van Ness Feldman, Laura served as legal counsel for a tribal e-commerce corporation and previously worked at an international law firm in their Denver, Colorado office. Laura is a citizen of the...

202-298-1918
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