Legislators heard today about a plan to put $50 million of CARES Act money in a business interruption grant program to reimburse people in the service and hospitality business for interruptions caused by the coronavirus pandemic.
The state envisions a 10-day window to apply beginning Nov. 16. The state parks and tourism agency is the lead on the program.
The proposal approved this morning by the Legislative Council’s executive subcommittee said it would offset losses for temporary closure or reduced capacity of businesses in the “personal care, tourism, travel, recreation, and hospitality industries.”
“Eligible Business” under this grant program, means a for-profit corporation, partnership, sole proprietorship (including independent contractors), limited liability company, joint venture or non-profit 501(c)(3) organization that meets the following criteria:
A. Operates primarily within the Arkansas personal care, tourism, travel, recreation, hospitality or related industries;
B. Was established on or before March 1, 2020;
C. Has an established tax identification number in the state of Arkansas;
D. Current Economic Uncertainty makes this assistance necessary to support the ongoing operations of the Applicant;
E. If formally organized, is incorporated under the laws of Arkansas or is registered to do business in Arkansas with the Arkansas Secretary of State and, in any case, is listed as being in “Good Standing.” If not incorporated, a business/professional license, sales tax permit, utility bill or bank statement in the name of the business is required as supporting documentation that the business is a bona fide business;
F. Is headquartered in Arkansas or has employees working in Arkansas;
G. Employed an average of two hundred fifty (250), or fewer, Full Time Arkansas Employees per Eligible Business as of September 30, 2020;
H. Must either have: a. Customers and/or employees physically coming to their Arkansas business premises; or b. Must conduct business on customer premises in Arkansas;
I. Is not under a bankruptcy order and does not have a pending bankruptcy filing at the time the Application is submitted. An Applicant that files for bankruptcy while the Application is pending shall notify the grant program and withdraw its Application under the program.
J. Does not presently have any tax liens with respect to any unpaid tax owing to the State of Arkansas except for those businesses that have applied for and received a repayment plan from the State of Arkansas and are not in default of that payment plan;
Government and festivals and fairs are not covered.
Awards up to $250,000 are allowed.
Eligible expenses, broadly, are
A. Business expenses incurred as a direct result of COVD-19 mitigation; or B. Certain ordinary business expenses incurred by an Eligible Business as a direct result of a government mandated business closure or restriction due to COVID-19; or C. Business expenses incurred due to diminished capacity of operations that are likely to continue until health conditions allow functioning at full capacity.
The Joint Public Health Committee discussed the plan at a meeting later with Caleb Osborne of Parks, Heritage and Tourism explaning details. There were some questions, including how “hospitality” is defined. Sen. Linda Chesterfield wondered, for example, if a church that provides food to the needy could qualify. Sen. Missy Irvin, co-chair of the committee, said the program was targeted at businesses that were ordered to shut down. Available tax data will demonstrate that businesses that really suffered, she said.