(a) The Performing Arts Equitable Payroll Fund is hereby created in the State Treasury.

(b) Upon appropriation by the Legislature, the office shall do each of the following:

(1) Establish and administer a grant program using moneys in the fund to award grants for the purpose of enabling small nonprofit performing arts organizations to hire and retain employees. The organization shall pay these employees not less than the minimum wage of the city, county, or city and county of which it is subject to jurisdiction or not less than the state minimum wage, whichever is greater.

(2) Administer each grant for a term of one year.

(c) (1) The office shall develop criteria to evaluate eligibility for the grant program in accordance with this chapter. Included in that criteria, a small nonprofit performing arts organization shall be deemed eligible by the office if it submits the following:

(A) A demonstration that its production and advertisement of performing arts events are open to the public by providing to the office at least three of the following documents from three of the small nonprofit performing arts organization’s productions:

(i) A box office report.

(ii) Evidence of paid advertisements.

(iii) Social media posts and internet website listings advertising the production.

(iv) Email blasts advertising the production.

(v) Reviews of the production.

(vi) A copy of the playbill for the production.

(B) Demonstrate its eligibility by providing to the office all of the following information about, policies of, and statements of the organization:

(i) Certification of compliance with the California requirement on sexual harassment training pursuant to Section 12950.1.

(ii) Diversity, equity, and inclusion policy with the dates the policy was created and last updated.

(iii) Harassment policy with the dates the policy was created and last updated.

(iv) Internet website hyperlink.

(v) Mission statement.

(2) The office shall deem a nonprofit performing arts organization eligible when it submits, in addition to the requirements listed in paragraph (1), all of the following:

(A) The Internal Revenue Service (IRS) determination letter recognizing the organization as tax-exempt under the subsection for which it applied.

(B) The articles of incorporation for the organization, including any amendments.

(C) A certified Business Entity Certificate of Status showing an active status of the organization from the Secretary of State.

(D) (i) Financial records, including the organization’s filed IRS Form 990 documents from the previous three years.

(ii) Where a nonprofit performing arts organization cannot produce filed IRS Form 990 documents from the previous three years, it shall attest it actively produced qualifying work in three of the previous five years and provide the filed IRS Form 990 documentation that corresponds to those years.

(3) The office shall deem a fiscally sponsored performing arts organization eligible for the grant program when it submits, in addition to the requirements listed in paragraph (1), all of the following:

(A) A letter evidencing the agreement between the organization and its fiscal sponsor.

(B) The board minutes of the fiscal sponsor that show the date the fiscal sponsor approved the sponsorship.

(C) A certified Business Entity Certificate of Status showing an active status of the fiscal sponsor from the Secretary of State.

(D) An attestation by the fiscal sponsor that the sponsored organization is a performing arts organization.

(E) Financial records, including the following:

(i) Detailed financial information for passthrough funds going to the fiscally sponsored organization.

(ii) Profit and Loss statements of fiscally sponsored organization corresponding to the same period.

(iii) (I) The filed IRS Form 990 documents of the fiscal sponsor from the previous three years.

(II) Where a fiscally sponsored performing arts organization did not actively produce qualifying work in the previous three years, the fiscal sponsor shall do all of the following:

(ia) Attest that the fiscally sponsored performing arts organization was active in three of the previous five years.

(ib) Provide its IRS Form 990 documents for the years in which the fiscally sponsored performing arts organization did actively produce qualifying work.

(ic) Provide detailed information regarding passthrough funds going to the fiscally sponsored performing arts organization.

(id) Provide profit and loss statements of the fiscally sponsored performing arts organization that correspond to the years in which it was active.

(d)  The office shall not consider applications from the following organizations, as the following organizations shall not be eligible for the grant program:

(1) After school programs for youth.

(2) A nonprofit organization that is exempt from taxation pursuant to Section 501(c)(3) of the Internal Revenue Code and that raises money for a single arts organization.

(3) Conservatory programs.

(4) Foundations.

(5) Individual artists who are fiscally sponsored.

(6) Model A, Model B, Model D, Model F, or Model L fiscally sponsored organizations or projects.

(7) Social clubs.

(8) Summer camps.

(9) Youth educational programs or schools.

(10) Youth performing arts groups, including, but not limited to, youth symphonies, youth choirs, and youth theater groups.

(e) As a condition of the receipt of grant funds, a recipient of a grant described in this section shall provide the following information to the office:

(1) Certification providing that the funds were used for only the following purposes:

(A) The payroll expenses, as defined in subdivision (f) of Section 8757, excluding payroll taxes and unemployment insurance of any qualifying employee. A qualifying employee shall include, but shall not be limited to, any actor, administrator, choreographer, dancer, designer, director, musician, producer, stage manager, technician, or worker hired by the organization as an employee. An independent contractor, volunteer, or intern shall not be considered a qualifying employee for the purposes of a grant awarded pursuant to this section.

(B) Maintaining compliance with all protections owed under state and federal law to workers classified as employees.

(2) Organizational information, including venue size where applicable, annual budget, the number of employees and independent contractors in the last budget year, and the percentage of budget spent on payroll expenses.

(3) Certification that the organization has no final judgments relating to employee misclassification at any time after the effective date of this section.

(f) (1) Any organization that has received a grant from the fund may apply for grants in any future years for which the organization maintains eligibility pursuant to the terms set forth herein.

(2) Any organization that has received a grant from the fund shall, when applying for any subsequent grant from the fund, provide any additional information that the office deems necessary for ensuring that the organization has not used moneys from the fund for purposes other than those set forth in paragraph (1) of subdivision (e).

(g) (1) The office shall adopt regulations as are necessary for each of the following:

(A) Ensuring that grant recipients have not used moneys for other purposes.

(B) Validating the accuracy of certifications provided pursuant to paragraph (3) of subdivision (e).

(2) Any organization that the office finds has used moneys for other purposes, or that has provided inaccurate certification, shall be ineligible to receive any further grants from the fund. The office may also require those organizations to repay previous funding.

(h) The office shall award a grant to a small nonprofit performing arts organization in an amount pursuant to the following reimbursement schedule:

(1) For organizations with an adjusted gross revenue of up to two hundred fifty thousand dollars ($250,000), the fund shall reimburse 80 percent of the first ten thousand dollars ($10,000) of the organization’s payroll expenses for work performed in the State of California per employee per quarter.

(2) For organizations with an adjusted gross revenue of not less than two hundred fifty thousand one dollars ($250,001) and not more than four hundred fifty thousand dollars ($450,000), the fund shall reimburse 75 percent of the first ten thousand dollars ($10,000) of the organization’s payroll expenses for work performed in the State of California per employee per quarter.

(3) For organizations with an adjusted gross revenue of not less than four hundred fifty thousand one dollars ($450,001) and not more than six hundred fifty thousand dollars ($650,000), the fund shall reimburse 70 percent of the first ten thousand dollars ($10,000) of the organization’s payroll expenses for work performed in the State of California per employee per quarter.

(4) For organizations with an adjusted gross revenue of not less than six hundred fifty thousand one dollars ($650,001) and not more than eight hundred fifty thousand dollars ($850,000), the fund shall reimburse 60 percent of the first ten thousand dollars ($10,000) of the organization’s payroll expenses for work performed in the State of California per employee per quarter.

(5) For organizations with an adjusted gross revenue of not less than eight hundred fifty thousand one dollars ($850,001) and not more than one million dollars ($1,000,000), the fund shall reimburse 50 percent of the first ten thousand dollars ($10,000) of the organization’s payroll expenses for work performed in the State of California per employee per quarter.

(6) For organizations with an adjusted gross revenue of not less than one million one dollars ($1,000,001) and not more than one million two hundred fifty thousand dollars ($1,250,000), the fund shall reimburse 40 percent of the first ten thousand dollars ($10,000) of the organization’s payroll expenses for work performed in the State of California per employee per quarter.

(7) For organizations with an adjusted gross revenue of not less than one million two hundred fifty thousand one dollars ($1,250,001) and not more than one million five hundred thousand dollars ($1,500,000), the fund shall reimburse 30 percent of the first ten thousand dollars ($10,000) of the organization’s payroll expenses for work performed in the State of California per employee per quarter.

(8) For organizations with an adjusted gross revenue of not less than one million five hundred thousand one dollars ($1,500,001) and not more than one million seven hundred fifty thousand dollars ($1,750,000), the fund shall reimburse 25 percent of the first ten thousand dollars ($10,000) of the organization’s payroll expenses for work performed in the State of California per employee per quarter.

(9) For organizations with an adjusted gross revenue of not less than one million seven hundred fifty thousand one dollars ($1,750,001) and not more than two million dollars ($2,000,000), the fund shall reimburse 20 percent of the first ten thousand dollars ($10,000) of the organization’s payroll expenses for work performed in the State of California per employee per quarter.

(Added by Stats. 2022, Ch. 731, Sec. 2. (SB 1116) Effective January 1, 2023.)