COVID-19 Resources

Congress has passed “phase 3” of its Coronavirus relief package. The $2 trillion economic rescue plan, known as the CARES Act, offers assistance to tens of millions of American households affected by the disease. Its components include stimulus payments to individuals, expanded unemployment coverage, student loan changes and more. Stimulus payments are expected to be delivered to American households within the next three weeks.

The CARES Act includes significant relief for travel industry businesses, including:

• $377 billion in loans and loan forgiveness for small travel businesses
• $454 billion in federally backed financial assistance for impacted businesses
• Tax relief to mitigate losses and allow businesses to use cash to pay employees and keep the lights on
• Grants for impacted tourism businesses and airports

Below is an outline of small business provisions in the CARES Act provided by Sen. Cassidy’s office, with additional input from LTA (This information is subject to change as final details become available; and should only be considered as our interpretation of the Act):

• The Payroll Protection Program (PPP) with Loan Forgiveness: The U.S. Small Business Administration is authorized to provide a new category of 7(a) loans to small businesses, self-employed individuals, and gig-workers. These loans of up to $10 million are 100% federally guaranteed with zero-fees.
  • Forgiveness: Up to 8 weeks of average payroll and other costs are eligible for forgiveness if the business retains (or rehires) its employees and maintains their pay levels.
  • Loan Amount: The maximum size of these loans will be $10 million; however, the size of these loans will be subject to a formula that is the equivalent of 250% of an employer’s average monthly payroll.
  • Access to Loans: Loans will be available immediately through existing SBA-certified lenders. Many additional lenders will be brought into the program over the next few weeks.
  • Other Terms: Principal and interest is deferred for up to a year. Any loan amount not forgiven will have a loan term of not more than ten years, with a maximum interest rate of 4%.
• Employee Retention Credit: This is an optional refundable employer payroll tax credit of 50% of wages on the first $10k of wages per employee. Eligible wages are those incurred March 13th through end of the year. Large businesses only qualify if they had to shut down, subject to a government order. Small businesses qualify if: 1) they had to close subject to a government shutdown order; or 2) their gross receipts dropped by 50% from the same period in 2019.
  • Intersection with paid leave. If the employer is paying sick or family leave under H.R. 6201, the employer doesn’t get to take the same wages into account for the purposes of this credit.
  • Health Coverage Plus-up. Employers can add a pro rata share of health expenses in addition to wages. Further guidance will be forthcoming from Treasury on how to make the calculation.
• Economic Injury Disaster Loans (EIDLs): The CARES Act establishes an emergency grant to allow small business and nonprofits that apply for an EIDL loan to request an advance on that loan, of up to $10,000, which the SBA must distribute within 3 days. These loans of up to $2 million include principal and interest deferment for up to 4 years. See Section 1110 of the CARES Act for more detail.
• Debt Relief for Existing and New SBA Borrowers: For small businesses with a standard SBA 7(a), 504, or microloan, SBA will cover all loan payments, including principal, interest, and fees, for six months. This relief is likewise available for new borrowers who take out an SBA loan within six months after the President signs the CARES Act into law. These borrowers can apply for PPP loans, but the six months of relief may not be applied to payments for PPP loans.
• Delays Payroll Tax Payments for Employers: Employers will be able to delay the payment of their 2020 payroll taxes until 2021 and 2022, leading to approximately $300 billion of extra cash flow for businesses.
• Restores Supports for Businesses Suffering Losses: The CARES Act also allows businesses to carry back losses from 2018, 2019, and 2020 to the previous 5 years, which will allow businesses access to immediate tax refunds.
• Encourages Businesses to Invest in Improvements: The CARES Act fixes cost recovery for investments in Qualified Improvement Properties, which will allow businesses to immediately expense these investments.
• Increases Allowable Amount of Business Interest Deduction: Increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30% limitation to 50% of the taxable income for 2019 and 2020.
• Entrepreneurial Assistance: The CARES Act provides $240 million in grants to SBA resource partners to enable them to offer counseling, training and related technical assistance to small businesses affected by COVID-19.
• Expanded unemployment benefits: The bill expands the amount of people eligible to receive unemployment benefits, including self-employed “gig” workers and part-time employees. It also makes benefits more generous by adding $600 per week on top of what the state normally pays in unemployment and provides an additional 13 weeks of benefits.

Note that employers can utilize the Payroll Protection Program with Loan Forgiveness, or they can utilize the Employee Retention Refundable Payroll Tax Credit, but they cannot utilize both benefits. The eligibility criteria differ. Employers eligible for both are encouraged to explore which makes the most sense for their respective facts and circumstances.

FFCRA expands paid leave

Over the last two weeks, your LTA staff has communicated our members’ needs to the Louisiana Congressional Delegation, utilizing your feedback on our business impact survey. This input has had significant bearing on many items, specifically determining eligibility for unemployment and SBA loans.

In the second phase of the congressional relief package, the Families First Coronavirus Response Act (FFCRA), which passed last week, requires certain employers to provide employees with paid sick leave or expanded family and medical leave for reasons related to COVID-19.

Per the Department of Labor, FFCRA provides that employees of covered employers are eligible for:

• Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
• Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and
• Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

State leaders consider travel industry priorities

This week, Louisiana Senate and House leadership reached out to LTA to ask for the travel industry’s priorities as they look to reconvene the legislative session on Tuesday, March 31. LTA President & CEO Jill Kidder discussed the following:

• Raise/lift LOT’s 10 percent cap on in-state marketing dollars: As this health crisis passes, LOT and the Lt. Governor’s office need the ability to market within the state, encouraging Louisianans to plan staycations and stimulate our local economy.
• Assistance on CDBG funding: The Lt. Governor’s office and CVBs throughout the state have been praised for their stewardship of federal grant funding for marketing after the BP oil spill. As these Community Development Block Grants are made available, the industry needs assistance in appropriately directing this funding to market Louisiana communities.
• Protect occupancy tax and Visitor Enterprise funding: Our CVBs are committed to the continual marketing of their communities and they need to protect their funding – which comes at no expense to the Louisiana taxpayers.
• Small business loans: Hotels and other small businesses need cash to keep their doors open. Approval of LED’s loan program will be a significant help.
• Business Interruption Insurance assistance: The travel industry needs state support to ensure that pandemics and government shut-downs are considered by insurance companies as triggers for Business Interruption Insurance.
• Support for hotel definition bill: With the unprecedented drop in hotel revenue, it is more important than ever for the hotel industry to have a level playing field. Adjusting the definition of a hotel to require short-term rentals to pay occupancy tax will remove the unfair tax advantage for these properties.

Next week, the legislature is expected to reconvene for a limited time to file new bills and send them to committee. They will likely suspend the session again after this work is accomplished, until the Governor’s stay at home order expires. The stay at home order currently expires on April 13. It is our best estimate the legislative session will reconvene sometime in May and will most likely take up a limited number of bills.

LTA has also participated in daily calls with the state secretaries, communicating the industry’s needs to the Department of Revenue, Louisiana Workforce Commission, Department of Economic Development and others.

State guaranteed, private funding is on its way! Louisiana Department of Economic Development (LED) is moving forward with the Louisiana Bankers Association to establish an LED-guaranteed small business loan program referred to as “LED Rapid Response Loans.” If approved as LED has currently outlined, the loan would be available for working capital and other needs up to a $100,000 limit for companies with 100 or less employees. These loans would be at a max rate of 3.5 percent. The Rapid Response Loans will be state driven, private capital loans available through approved Louisiana lending institutions and will not be considered duplication with any SBA loans. They estimate that this will be a $50 million loan pool. LED Secretary Pierson expects this will be approved and available within the week.

Hotels can offer to house health community

In an effort to connect hotel properties with federal and state initiatives to find housing and support for the health community, we are urging Louisiana hoteliers to reach out to the Lt. Governor and the Louisiana Business Emergency Operations Center. Please send the following details to Christophe.deguelle@louisiana.edu:

• Owners name
• Email address
• Hotel address
• Number of rooms
• Whether or not your property has individual room A/C units

Stay at home order

This week, Gov. Edwards has emphasized the need for all Louisianans to help “flatten the curve” by staying at home. President Trump approved his request for a federal disaster designation earlier this week, opening access to more federal aid for the state. The Governor’s Stay at Home order includes the closure of places of public amusement – both indoor and outdoor – and malls. The governor has previously ordered casinos, bars, movie theatres, gyms and fitness centers closed and restricted restaurants to take-out, drive-through and delivery orders only. However, it included hotels and motels as essential businesses.

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