California COVID Relief Grants Still Exclude 'Prurient' Businesses

California COVID Relief Grants Still Exclude 'Prurient' Businesses

SACRAMENTO — The California Office of the Small Business Advocate (CalOSBA) yesterday began distributing the sixth and final round of COVID relief business grants, but the application still includes a “prurient clause” which discourages adult businesses from applying.

According to the CalOSBA website, this funding round offers eligible grant awards of $5,000 to $25,000 and is intended for “current waitlisted small businesses and/or nonprofits not selected in [earlier rounds] and new applicants that meet eligibility criteria.”

But the “eligibility criteria” CalOSBA includes a copy of the “prurient clause” found in the federal SBA loan application, a disqualification intended against adult businesses.

Under “Ineligible Businesses,” CalOSBA lists “businesses of a prurient sexual nature, including businesses which present live performances of a prurient sexual nature and businesses which derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.”

An Antiquated, Discriminatory Term

As XBIZ has been reporting, the “prurient” clause on the SBA loan replicates mid-1990s language designed to discriminate against sexually oriented businesses.

The word “prurient” is an imprecise, obscure word that means “appealing to unhealthy sexual interests” and was used by the U.S. Supreme Court in a landmark 1973 ruling. Several members of the adult entertainment community and First Amendment lawyers have pointed out that people who do not consider their sexual expression “unhealthy” are exempt from application of the “prurient” clause.

Last year, several sexually oriented businesses across the country sued the SBA for discrimination based on the “prurient clause.”

XBIZ has repeatedly contacted the CalOSBA public information officer about the federal language on the State form, but we have not received a response.

Businesses that do not consider themselves “prurient” are encouraged to apply here until Tuesday at 5 p.m. (PDT). Notifications of the awarded grants will begin Friday, May 7.

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