Senate bill would deliver relief to small biz owners with a record

*UPDATE (7/7/20):  “SBA throws in the towel and Congress extends the PPP deadline”

After Congress authorized hundreds of billions of dollars for small business relief during COVID-19, the Small Business Administration (SBA) imposed restrictions on applicants with an arrest or conviction history.  These barriers, neither required nor contemplated by Congress, impede access to the two major relief programs for small businesses, nonprofits, and independent contractors: the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program.

A major development in Congress signals the likely elimination of most of these restrictions, which would make crucial economic assistance newly available to many small business owners with a record.  On June 4, Senators Rob Portman (R-OH), Ben Cardin (D-MD), James Lankford (R-OK), and Cory Booker (D-NJ) introduced the Paycheck Protection Program Second Chance Act.

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CCRC statement on recent events

CCRC stands with those opposing police violence against black people and other forms of racism throughout society.  Black lives matter.

Our organization promotes public discussion of how criminal records are used to hold people back in civil society.  Discrimination based on a record hits the black community harder than any other, thanks to the long history of officials using the criminal law as a weapon to keep black people marginalized and subjugated.

Most recently, we have documented the Small Business Administration’s decisions to exclude many people from COVID-19 relief due to arrest or conviction, which disproportionately harms minority business owners during an already precarious moment.  We have also covered felony disenfranchisement litigation in Florida, where a federal judge held unconstitutional the denial of voting rights to people who have served their time but still owe restitution and fines they cannot afford to pay.

In this time of national turmoil, many protesters have been and will continued to be arrested. Most will be released without charges, some will be charged, and some will be convicted.  But every single one of them will end up with a criminal record.

Very few states make it easy to avoid the stigma that even a bare arrest record produces, even when it is not accompanied or followed by any charges.  Our flagship resource, the Restoration of Rights Project, documents that even those protesters who are released without charges will need to petition a court or agency to seal or expunge the record of their arrest in order to avoid a lifelong record that can create barriers in housing, employment, and education.  In some states, courts or agencies have discretion to deny relief even where the government found no basis to prosecute.

Our Model Law on Non-Conviction Records (2019) recommends that states automatically expunge arrest records that do not result in charges or conviction, as well as charges that do not result in conviction, and that they do it promptly.  While 15 states do provide for automatic or expedited relief following a non-conviction disposition in court, 35 do not.  And, only a handful of states automatically expunge arrests where no charges are filed.  The filing of expungement petitions, costly and cumbersome in normal times, will be especially difficult due to limited access to courts during COVID-19.

It is especially wrong to saddle people who have never even been charged with a lifelong record.  This should be one of the first changes in the criminal law to work for in coming months, and it should be an easy one to accomplish.

For people who are convicted, 38 states have laws that allow at least some misdemeanors to be expunged or sealed; 31 of these states also make certain felonies eligible.  Waiting periods, filing fees, and other requirements apply.  In recent years, 7 states have enacted automatic relief for certain misdemeanors, dispensing with the petition requirement for those who qualify.  But there is no authority to expunge or seal federal records, including records of uncharged arrests; and, the laws on record sealing in the District of Columbia are some of the most restrictive in the country.

In two forthcoming posts, we will survey the laws pertaining to non-conviction and conviction record relief across the country.  At least with respect to non-conviction records, a menu of recommended reforms is already readily available in our Model Law.

Florida felony disenfranchisement law held unconstitutional

This evening the district court issued its opinion in Jones v. DeSantis finding, as expected, that Florida’s system for restoring voting rights to those convicted of a felony is unconstitutional. The opinion is at this link, and its summary by the court is below. Additional details of the decision and the court’s order are reported in this article from the New York Times, and we will report further on the case, including next steps, in a few days.

The State of Florida has adopted a system under which nearly a million otherwise-eligible citizens will be allowed to vote only if they pay an amount of money. Most of the citizens lack the financial resources to make the required payment. Many do not know, and some will not be able to find out, how much they must pay. For most, the required payment will consist only of charges the State imposed to fund government operations—taxes in substance though not in name.

The State is on pace to complete its initial screening of the citizens by 2026, or perhaps later, and only then will have an initial opinion about which citizens must pay, and how much they must pay, to be allowed to vote. In the meantime, year after year, federal and state elections will pass. The uncertainty will cause some citizens who are eligible to vote, even on the State’s own view of the law, not to vote, lest they risk criminal prosecution.

This pay-to-vote system would be universally decried as unconstitutional but for one thing: each citizen at issue was convicted, at some point in the past, of a felony offense. A state may disenfranchise felons and impose conditions on their reenfranchisement. But the conditions must pass constitutional scrutiny. Whatever might be said of a rationally constructed system, this one falls short in substantial respects.

The United States Court of Appeals for the Eleventh Circuit has already ruled, in affirming a preliminary injunction in this very case, that the State cannot condition voting on payment of an amount a person is genuinely unable to pay. See Jones v. Governor of Fla., 950 F.3d 795 (11th Cir. 2020). Now, after a full trial on the merits, the plaintiffs’ evidence has grown stronger. This order holds that the State can condition voting on payment of fines and restitution that a person is able to pay but cannot condition voting on payment of amounts a person is unable to pay or on payment of taxes, even those labeled fees or costs. This order puts in place administrative procedures that comport with the Constitution and are less burdensome, on both the State and the citizens, than those the State is currently using to administer the unconstitutional pay-to-vote system.

 

Upgrades to the Restoration of Rights Project

We are pleased to announce the completion of a major project to upgrade our flagship resource, the Restoration of Rights Project (RRP).  The RRP is a free on-line compendium of legal research that describes and analyzes the laws and practices relating to criminal record relief in the United States.  The improvements we have made will make it easier for our readers to gain both a snapshot and more detailed understanding of how record relief laws and policies operate within each of the 50 states, D.C., 2 territories, and the federal system.  They will also facilitate comparisons of how different states address various types of relief, producing a national-level picture against which each state can measure its progress.

This major undertaking was a collaboration between CCRC staff and four students at Yale Law School: Jordan Dannenberg, Kallie Klein, Jackson Skeen, and Tor Tarantola.  We thank these students, as well as YLS Professor Kate Stith, for their excellent contributions to our mission of promoting public engagement on the issues raised by the collateral consequences of arrest or conviction.

The state-by-state profiles, summaries and 50-state comparison charts from the RRP are what we rely on in preparing periodic and year-end summary reports on new legislation, which we track and add to the RRP in real time throughout the year.  The research and analysis in the RRP also informs our commentary on everything from new court decisions and scholarship to politics and practice, as well as the amicus briefs we file from time to time in significant litigation.  It is the foundation of our work on model legislation.  The RRP provided the raw material for a national overview report of record relief laws and policies, Forgiving and Forgetting in American Justice, which was last revised in August 2018.  Because of this report’s value in identifying overall patterns and emerging trends, we are already at work bringing it up to date with the more than 200 new laws passed since it was last revised.

Through the upgrade project we reorganized and expanded the RRP in three major ways.

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New efforts to channel federal relief to small business owners with a record

*UPDATE (7/7/20):  “SBA throws in the towel and Congress extends the PPP deadline”

After Congress authorized hundreds of billions of dollars in funds for small business relief during COVID-19, the Small Business Administration (SBA) imposed restrictions on applicants with an arrest or conviction history.  These barriers, neither required nor contemplated by Congress, impede access to the two major relief programs for small businesses, nonprofits, and independent contractors during the COVID-19 crisis.  The two programs are the newly created Paycheck Protection Program (PPP) and the ramped-up Economic Injury Disaster Loan (EIDL) program.

Three developments within the past week signal major pushback against or the possible reversal of at least some of these burdensome restrictions, which unfairly deny relief to worthy applicants.

First, at least 65 organizations submitted five public comments in opposition to the SBA’s criminal history restrictions for PPP relief.  Our organization joined 25 other groups in submitting a comment asking the SBA to rescind or modify the regulation on legal and policy grounds, citing recent court decisions that suggest the SBA may lack authority to impose record-based disqualifications at all.

These comments are the most recent expression of what has become a wave of bipartisan opposition to the SBA’s exclusionary policies, and growing coverage of the issues in the press.  We have been collecting relevant documents on our small business relief resource page.

Second, Treasury Secretary Steven Mnuchin signaled in a recent conversation with key Senators that he may be open to easing restrictions on PPP applicants with felony records from the last five years.

Third, the HEROES Act, passed by the House on Friday, includes provisions that would significantly constrain the SBA’s authority to deny applicants based on a record of arrest or conviction in both the PPP and EIDL programs.  If enacted into law, these provisions would mark a turning point in how federal law deals with discrimination based on criminal record.

We discuss these developments in detail after the jump.  Read more