Implementation of CARES Act

  • Post author:
  • Post category:Uncategorized
  • Post comments:0 Comments

The federal and state governments are working to implement the provisions of the
CARES Act, signed by President Trump on 3/27/20. ACRA (American Car Association) is following the implementation of the following CARES programs for its members:
Payroll Protection Program (PPP) – CARES
program for small businesses (500 or fewer
employees) for SBA loans up to $10 million.
Loans can be forgiven completely if the
business maintains its workforce and uses
the loan proceeds to pay wages (at least
75% of loan amount), rent, utilities and other
approved expenses.
• Title IV Loan Facility for Smalland Mid-Sized Businesses –                                  Department of Treasury
and the Federal Reserve Board are
charged under CARES with establishing a
loan or financing program for small- and
medium-sized businesses (1 – 10,000
employees). The Fed on 4/9/20 issued a
two “term sheets”  for the “Main Street Program” new and expanded
loan facility that all ACRA members should
review to determine if it could assist your
company weather the economic storm of
the pandemic.
• Title IV Loan Facility for Large Businesses –
For large businesses, CARES established a
loan program to offset impacts of the
pandemic. Treasury and the Fed provided
guidance on this CARES Title IV program on
4/9/20 as well.
Next Steps for Congress and the Administration
• CARES 1.5 – Treasury and congressional
leaders have already signaled that the
$350 billion for the PPP program and the
$450 billion for the Title IV programs will be
insufficient. Treasury is expected to ask that
the PPP program be increased in size by
$200 – 250 billion and the Title IV program
be doubled in size. Congress is expected
to take up a “CARES 1.5” bill the week of
4/20/20.
• CARES 2.0 – With CARES 1.5 likely being an
expansion of existing programs under the
original CARES Act, Congress also is
discussing a “CARES 2.0” stimulus bill with
new policy initiatives. The timing for the
CARES 2.0 is not yet clear.
ACRA Ideas on CARES 2.0
ACRA’s “COVID-19 Special Task Force”, appointed by ACRA’s President, has been
discussing ideas for policy initiatives to assist the car rental industry specifically for CARES 2.0. Among the ideas being considered are:
• Tax credits for individuals and corporations
to encourage them to start travelling again
after the pandemic is over; e.g., 20% tax
for airline tickets and 15% for hotels
and car rentals;
• A vehicle buyback program similar to prior “cash for clunkers” programs;
• Protection for the industry from lawsuits
alleging an individual contracted the virus
during a rental;
• Federal pandemic business interruption
insurance, similar to the terrorism insurance
underwritten by the federal government
after 9/11;
• Federal funding of relief from Minimum
Annual Guarantees under airport
concession agreements for all airport
concessionaires); and,
• Establishment of a travel industry “rainy day
fund” to prepare for future major travel
industry disruptions like 9/11 and this pandemic.

Source:  ACRA: Bill Plamondon, President; Sharon Faulkner, Executive Director; Greg Scott, Editor.

Leave a Reply