Coronavirus

  • NAFA Administrator posted an article
    Flight Staffing in the Time of Coronavirus see more

    NAFA member, PNC Aviation Finance, shares the latest on flight staffing during the coronavirus crisis.

    The coronavirus has changed the global aviation industry, and is resulting in an upheaval in employment that will re-shape the business.

    Highlights:

    • Effect on Pilot Training is Mixed
    • Business Aviation Positioned Well for Recovery
    • Retirements May Rise
    • Pandemic Increases Business Aviation

    At the beginning of this year, all of aviation was facing a severe pilot shortage, with business aviation competing against commercial aviation to recruit a limited pool of qualified candidates. Now, established pilots face furloughs, or even job losses, as airlines adjust their operations for a long recovery period.

    Impact on Pilot Training

    Before the coronavirus crisis, the industry had invested heavily in promoting aviation careers and education. In February, United Airlines had bought a flight school in Phoenix to support its Aviat pilot recruiting program.[1] The airline had plans to train up to 10,000 new pilots over the next decade. The current instability might discourage some student pilots from completing their careers, and persuade others that aviation is too unstable a field of study.

    Regional pilot Mike Czarnecki told FightGlobal,[1] “I worry more about the next generation, because we will come out of this smaller than before.” His own son is currently training as a pilot.

    But the reality both for Czarnecki and his son is that, in time, aviation will recover. Those specialized skills will still be in demand. The question is how long the recovery will take and which jobs will attract the greatest share of existing pilots and new recruits.

    Recovery May Favor Business Aviation

    It is expected that the recovery for airlines returning to 2019 levels of traffic may take anywhere from 3 to 5 years. During that time, job security and growth prospects in commercial aviation will be in doubt.

    While business aviation has suffered through many of the same disruptions of service as airlines, it may be better poised to recover more quickly as more high net worth individuals opt to acquire aircraft or to fly private charter in future.

    For those pilots who welcome more flexible work schedules, a career working as a pilot in business aviation could be attractive.

    Alerion Aviation, an aviation services company that offers aircraft management, charter, maintenance and FBO services to owners and operators of private jet aircraft, saw an initial retraction in business resulting from the coronavirus pandemic, but has kept its flight staff on the payroll in expectation of a rapid return to service once people can start traveling again.

    “If we furlough our pilots and they went off to do other things, then they might not be available,” says Bob Seidel, CEO of Alerion, and a pilot himself. “Recruiting, hiring and training would take months that would add to the injury that we already suffered from the loss of business.”

    Seidel, who has been active in raising awareness of the pilot shortage, and supporting recruiting of new pilots for the industry through his work with the State University of New York (SUNY), believes that there are still good prospects for future pilots in the long term.

    Effects of Retirement

    For one thing, this latest downturn may persuade more senior pilots to retire. Those who are at the senior level are not going to go through another furlough cycle, he tells us. There may be wave of retirements and early retirements taken because of this latest shock. If pilots aren't flying airplanes by June, then United is going to be accepting retirements. That makes room for people to come up, and we've seen a tremendous interest in aviation careers. SUNY's flight school was struggling to find students and is now full to capacity.

    Aviation journalist Victoria Bryan decided to take her passion for the skies further by pursuing a career as a pilot. Nearly two years ago, she left Germany for New Zealand to study at a local flight school there.

    The crisis has put her dream on hold, but she remains hopeful of completing her training. One positive result from the current crisis, as she points out in an article she wrote about her current flight school experience,[2] is that there may finally be enough retired and furloughed pilots available to adequately staff flight schools.

    “Our school lost instructors to airlines hungry for flight crew and we endured delays to our training. The 18-month timeframe to get qualified was out the window,” Bryan writes.[2] “Ironically, flight schools are now in a better position than in the past few years.

    “With no airlines seeking crew, there are now enough qualified pilots to work as flight instructors to train their cadets. So once lockdown restrictions are lifted in New Zealand, my training should progress faster than previously anticipated.”

    It will be important to keep those students committed to their career as pilots to avoid coming out of the coronavirus recovery with a greater pilot shortage than before the pandemic.

    And that won't be easy, considering the costs of study for cadets, and the slow jobs recovery which will see experienced pilots more likely to get hired before recent graduates.

    Some of those experienced pilots will want to shift from airlines to business aviation, and graduates may welcome opportunities in business aviation too. While airlines offer more regular work-schedules than charter operations, the financial vulnerabilities of the airline industry have been on full display. Airlines may no longer be in a position to offer the same tempting work packages that saw them lure pilots away from business aviation before the pandemic.

    “We lost five people to the airlines last year and three of them have contacted us wanting to come back,” Alerion's Seidel tell us. “And there is a possibility that recovery may be faster for business aviation, as those who have the resources to fly private now choose to do so.”

    Private Flight Considered Essential

    Seidel has seen some signs of a change in the wind that favors private aviation, with some people who might previously have thought private flight a luxury now considering it essential. There may be a greater willingness to abandon commercial air travel in order to avoid crowds at airports and crowded cabins, and to have greater control over travel companions.

    “Last year, at this time, we were working on one acquisition deal. This year, we are working on six. I don't think the industry is up 600%, but our little corner of the business is so active that it tells me something,” Seidel says.

    “Whatever the shape of recovery, pilots will be needed. The key, at least for now, is to be flexible to get through the crisis. People are going to have to remain agile,” he tells us. “They're going to have to be pragmatic, but the opportunity is still there.”

    Let's Talk

    PNC has been a steady source of flexible financing for more than 160 years. Our solutions are uniquely designed to meet the needs of sophisticated corporate aircraft owners - from high net-worth individuals to Fortune 500 companies. Contact Us »

    This article was originally published by PNC Equipment Finance on May 27, 2020.

     

  • NAFA Administrator posted an article
    Filing Aircraft Registration Documents With The FAA Registry During The COVID-19 Pandemic: What You see more

    NAFA member, Greg Reigel, Partner with Shackelford, Bowen, McKinley & Norton, LLP, discusses filing documents with the FAA Registry during the COVID-19 Pandemic.

    In another instance of a “new-normal” resulting from COVID-19, the window at the FAA Registry, where real-time filing of aircraft registration documents used to occur, has closed.  Although the FAA Registry is still open (for now), it has implemented new procedures for filing of aircraft registration documents.  Three options are now available for recording documents:

    Document Drop Bins.

    The FAA has placed two bins outside the Public Documents room.   One bin will be marked “Priority” and one bin will be for “Normal” processing (i.e. not priority).  The FAA will retrieve documents from the Priority Bin every hour. It will retrieve documents submitted for normal processing twice a day.

    Documents are filed when they are placed in one of the bins. However, will not be possible to obtain an immediate filing time for the documents as was the case in the past.  Actual filing times will only be available after the documents are indexed in, scanned and available for viewing online.  It is presently unclear how long that process will take.

    E-Mail Filing To An Electronic Portal.

    The FAA has a new e-mail filing process available subject to a number of limitations. Submitted documents must be digitally signed (i.e. Docusign, Adobe Sign, etc.) and each document must be 20 pages or less. Only one aircraft may be submitted in each e-mail and filing fees must be pre-paid at Pay.gov.

    After submission, FAA will send an e-mail acknowledging receipt.  However, documents will be processed during normal business hours with filing times available the same as when documents are filed via the bins.

    Filing Via Mail.

    As has always been the case, documents can still be filed via U.S. Mail, FedEx and UPS. And similar to the bin and e-mail filing, actual filing times will only be available once the documents are processed and in the FAA Registry’s system.

    These new processes will also impact timing for receiving a “fly-wire” and for receiving Form 135 needed to accomplish International Registry filings.  But it is unclear how much longer it will take to receive these back from the FAA.

    Conclusion.

    The good news:  The FAA Registry is still open and processing aircraft registration documents (for now). The bad news:  These updated procedures will result in some delays in closing transactions, and a little less certainty regarding when documents were actually “filed” by the FAA. For example, in a transaction transferring risk of loss at the time of filing, that could present a problem.

    Parties to aircraft transactions should review their documents to determine whether they are consistent with the new procedures. If they aren’t, parties should amend as needed.

    This article was originally published by Shackelford, Bowen, McKinley & Norton, LLP. on March 23, 2020.

  • NAFA Administrator posted an article
    How is the Coronavirus Affecting Used Aircraft Prices? see more

    NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, discusses how the coronavirus pandemic has affected pricing of used aircraft. 

    As of this writing, the coronavirus pandemic has not resulted in any measurable decline in used aircraft prices. That's not to say it won't over time, but in the near term, prices are holding steady.

    Why aren’t we seeing values lower? Despite being blindsided by the consequences surrounding the coronavirus pandemic, the aviation market was already in a unique situation because inventory was pretty thin. Traditionally, when supply is constrained, market pricing will stay roughly the same. That holds true now, despite any drop-in demand that we may be witnessing.

    Another reason prices have remained steady is because fewer owners are listing planes right now. There is so much uncertainty surrounding the ability to close deals (financing, the logistics of inspections and aircraft delivery) that folks are more comfortable sitting on the sidelines than taking the risk of losing out on a deal.

    While the coronavirus pandemic might spur some people to sell, as of yet, there’s been no noticeable uptick in these situations. AOPA Aviation Finance, (“AAF”) is working on a deal right now with a pilot-owner who’s trying to close on a TBM turboprop single. He's buying from an 80-year-old gentleman, but such transactions are rarer than they are regular.

    The bottom line is if you're thinking this might be a good time to pick up something cheap, our answer is, it’s always worth looking, but the markets are efficient and the professionals in the industry help to keep it way, so you’ll have to look hard for those gems.

    This article was originally published by AOPA Finance on April 30, 2020.

  • NAFA Administrator posted an article
    How is the Coronavirus Affecting the Closing Process for Aircraft? see more

    NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, discusses the challenges of aircraft closings during the Coronavirus pandemic.

    Unlike real estate, where the exchanged property does not move, the challenge with closing on an aircraft is that eventually it must be flown to its new home. It’s a rare transaction where buyers purchase an airplane from their home airfield. Therefore, how to legally move the aircraft is one major concern for buyers during the coronavirus pandemic. Another is how to get a pre-buy inspection done.

    First, there is the sticky problem of getting an aircraft inspected. It’s not clear whether maintenance and repair shops are currently open to perform pre-buy inspections, or whether their employees can even report to work. Some states have not deemed aviation techs “essential.” What jobs are deemed “essential,” how, and by whom such job designations will be enforced remains up in the air. Even if aviation techs are, parts suppliers might not be. That means needed parts may not get delivered. In normal times, a closing might take 30 days. In these abnormal times, plan on the process stretching to 45 days or more.

    Beyond that, is it legal for a ferry pilot or the new owner to fly an airplane from the airport where it is hangared to its new home base?  State laws vary on the subject. How complicated it will be to transport the aircraft may depend on factors like the route of flight and the number of states involved. Is the airplane going from California to Maine? Or from Wisconsin to Indiana? One has to ask oneself, “Am I going to have a challenge from this state?” Other questions follow, including, “Which governing body would enforce such a challenge — state or federal?” “Is it within FAA or state jurisdiction?” None of that is easy to navigate.

    If you can imagine the difficulty of flying from one European country to another and having to deal with the balkanized ATC system there, then you have some idea of the current complexity surrounding moving an aircraft across state lines during this pandemic. At AOPA Aviation Finance, (“AAF”), our advice is to call AOPA’s Legal Services to get better clarity on your specific situation.

    That is a great benefit of AOPA, having multiple resources all in one place. This complex situation is the perfect time to tap into them.

    Great advice. Great rates. From helpful and responsive reps you can trust. Three good reasons to turn to AOPA Aviation Finance when you are buying an airplane. If you need a dependable source of financing with people who are on your side, just call 800.62.PLANE (800.627.5263), or click here to request a quote.

    This article was originally published by AOPA Aviation Finance Company on April 30, 2020.

  • Tracey Cheek posted an article
    Bizav Traffic Stays Down as Charter Demand Stabilizes see more

    NAFA shares AIN's continuing coverage of the impact of the coronavirus on aviation.

    Business aviation traffic volumes have continued to fall this week in the wake Covid-19-driven reductions in economic activity and travel restrictions. As of this morning, the continually updated traffic data published by aviation services group Argus showed the number of flights in North America and Europe to be 65 percent lower this month versus April 2019. Year-to-date activity is about 12 percent less than at this time last year, according to the Argus TraqPak data.

    Data analyst WingX reported business aviation departures in the U.S. dropped 60 percent year-over-year in the first week of this month. Elaborating on the data, the company said that reductions were “consistently acute” across most types of operators and that the “busiest” aircraft types being the Cessna Caravan and the Pilatus PC-12 turboprops. It said that airports in Florida were somewhat less affected than those in other parts of the U.S.

    On April 6, WingX released data showing that in the first five days of April, just over 18,000 business aviation sectors were flown globally. This was around 50,000 less than the same period in 2019.

    Meanwhile, online charter marketplace Avinode today reported that forward-looking demand in the U.S. and Europe, as measured by trip requests, has flattened out somewhat since the “drastic decline” seen following an initial spike around mid-March. The company described this trend as “the temporary normal.”

    In Asia, demand for charter flights for the next seven days showed an upward trend that was larger than “the initial Covid-19 spike” when the virus outbreak was sweeping through the region in January. However, this uptick now appears to be reversing. Arrival and departure demand for Africa has been up in recent days.

    Overall trip requests for the next couple of months show demand in April to be 14 percent lower than in April 2019 and 38 percent lower for May. “There is still lots of time to recover summer demand, when restrictions allow,” concluded Harry Clarke, Avinode’s head of insight.

    This article was originally published by AIN on April 9, 2020.


  • Tracey Cheek posted an article
    Stimulus Package Includes $100 Million for GA Airports see more

    NAFA member, AOPA works to support GA Airports across the country.

    A $2 trillion stimulus package passed unanimously by the Senate to support the economy during the coronavirus pandemic includes $100 million to protect general aviation airports and maintain small and rural communities’ access to aviation services.

    The funding for GA airports—which the Aircraft Owners and Pilots Association (AOPA) made a top advocacy priority for fighting the pandemic’s impact—is part of a $10 billion emergency appropriation for airports in the stimulus plan that passed the Senate by a vote of 96 to zero on March 25. The package is expected to be approved by the House and sent to President Donald Trump on March 27 for signing.

    Of the more than 3,300 airports in the federal system, 2,815 airports that have no scheduled air service or have fewer than 2,500 passengers per year on scheduled routes will be eligible for the $100 million in grant awards—roughly $36,000 per airport.

    The money will come from the general fund, not the Airport and Airway Trust Fund, and may be used for any purpose on which airport revenue may lawfully be spent.

    No local match will be required as the federal government’s share of the grants will be 100 percent. Non-hub and small airports were exempted from a condition requiring airports receiving the grant funding to retain at least 90-percent of their workforce through the end of the year.

    “We need these airports and I just want to thank those in Congress who understand the importance of them, especially the thousands of small airports across the country. I appreciate the fact that they ensured this emergency funding is a priority as the nation works to meet the challenges caused by this pandemic,” said AOPA President Mark Baker. “These airports provide critical services to many communities and account for millions of operations each year, while also doing distinguished service during emergencies including natural disasters.”

    Other provisions of the stimulus package related to aviation require the Department of Transportation to take into consideration the air transportation needs of small and remote communities.

    The legislation suspends certain aviation excise taxes through the end of 2020 including the passenger ticket tax, cargo tax, and fuel taxes on kerosene used in commercial aviation, including Part 135 operations.

    AOPA is continuously updating its coverage of the coronavirus pandemic’s impact on general aviation. For more information please visit this page.

    This article was originally published by AOPA on March 26, 2020.

  • Tracey Cheek posted an article
    CARES Act Provisions to Benefit General Aviation see more

    NAFA member, GKG Law, shares CARES Act provisions for General Aviation.

    On March 25, 2020, the Senate passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2 trillion stimulus bill. The House of Representatives is expected to approve the legislation, and President Trump has indicated he will quickly sign the bill into law. In addition to general loan programs for small and mid-size businesses that are made available, the CARES Act contains provisions that will benefit general aviation specifically. The business aviation community should take note of the following provisions included in the CARES Act:

    • Relief from the 7.5% air transportation federal excise tax for general aviation commercial operations (including flights operated under FAR Part 135), and from the commercial fuel tax through December 31, 2020 (This will not apply to amounts paid for transportation on or before the date of enactment of the CARES Act.);
       
    • Loans and grants to passenger and cargo air carriers, including 
      • $25 billion in direct loans and loan guarantees for FAR Part 135 Operators providing passenger operations and an additional $25 billion for wages, salaries and benefits for employees;
      • $4 billion in direct loans and loan guarantees for FAR Part 135 Operators providing air cargo operations and an additional $4 billion for wages, salaries and benefits for employees;
         
    • $25 billion in loans and loan guarantees for Part 145 maintenance facilities;
       
    • $10 billion for airport grants, with $100 million specifically allocated to general aviation airports.

    Note that companies receiving loan and loan guarantees under the CARES Act will be subject to certain requirements, such as maintaining March 24, 2020 employment levels to the extent practicable through the end of September and limits on employment level cuts, limits on executives’ compensation and stock buybacks, and the Department of Transportation would have authority until March 1, 2022 to order any carrier accepting federal assistance to maintain certain air routes.

    Please do not hesitate to contact a member of our Business Aviation team with your CARES Act questions or concerns in the days to come.

    This article was originally published by GKG Law on March 26, 2020.

  • Tracey Cheek posted an article
    Jetcraft: Answering Your Questions During COVID-19 see more

    NAFA member, Peter Antonenko with Jetcraft, answers some of your COVID-19 questions.

    Coronavirus (COVID-19) has brought much uncertainty to the world and, unfortunately, the future is still unclear. On behalf of the Jetcraft team, I want to personally reassure you that we are in a strong position to remain open for business and we are ready to transact. Moreover, our team is available to help you navigate your important aircraft-related decisions during this period. Here are some of the most popular questions we’ve recently been answering for our clients.

    Should I consider an aircraft purchase now?

    If you are in the position to do so, absolutely.  While these are challenging times, we encourage those who can to take a long-term view and consider aircraft purchases or upgrades to meet their needs.  However, it’s important to understand how to maximize your benefits and navigate the current market.

    Good quality inventory is becoming available, interest rates are low and bonus depreciation still applies, so there is plenty to take advantage of if this is an option open to you. At Jetcraft, we are well-versed on how to leverage the current market to negotiate the best deal for our buyers.

    Minimizing downside exposure is critical for many of our customers. To help mitigate this, avoid holding a second aircraft on your books when upgrading to a new model. Jetcraft is one of few companies with the ability to take in trades, and we can help customers avoid a risky crossover period.

    All our aircraft are marketed using the most up to date and highest quality photos and videos and we can facilitate on-the-ground virtual aircraft viewings as needed, while travel restrictions are in place.

    I’m not using my aircraft.  Will it lose value?  Should I sell it?

    Not necessarily.  Many factors affect resale price. An aircraft’s value tends to diminish the more it flies and the more hours it accumulates, which is comparable to mileage on a car. Engine hours are another contributor, meaning the closer an engine is to its recommended time between overhaul, the less value it holds.

    By not flying your aircraft, these factors are put on pause and you may in fact experience a slower rate of depreciation. Aircraft are designed to be able to remain grounded if required. Like other modern vehicles, they will not be majorly affected if not used for a period of months. If properly maintained and hangared, the value can be significantly preserved.

    While you’re not using your aircraft, take the opportunity to schedule it in for any maintenance or refurbishments, so it’s in perfect condition for when you next fly. Many facilities remain open and ready to assist customers with their service requirements.

    If you do decide to sell, we are well-equipped to match you with buyers around the world through our global network or help you find a maintenance facility to perform upcoming work that could improve the saleability of your aircraft.

    Will business aviation remain crucial?

    In one word, yes.  It’s at times like these where the speed, efficiency, flexibility and safety of business aviation comes to the fore. The ability to fly anywhere at a moment’s notice and get home quickly is proving invaluable.  By avoiding large crowds of people and minimizing contact with others, business aviation can help limit the spread of infection for those who must travel.

    Sadly, some buyers will be financially impaired by the effects of the COVID-19 outbreak, and yet there will be others who will come through this experience even more convinced of the value of aircraft ownership.

    Who do I contact if I have additional questions about my aircraft? 

    Our Jetcraft representatives around the globe are available to assist you. Contact us for the latest market data, to find out what your aircraft is worth or to discuss your options.

    And remember, stop hoarding, wash your hands and cover that cough.

    This article was originally published by Jetcraft on March 20, 2020.

  • Tracey Cheek posted an article
    The COVID-19 Impact on Your Company and Employees see more

    NAFA members, Douglas Stuart and Stephen Hofer, with Aerlex Law Group, discuss managing the impact of COVID-19 on your company and employees.

    All of us have received numerous e-mails in recent days from companies and organizations describing the steps each is taking to try and prevent or slow the spread of the Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2) and the disease it causes, Coronavirus Disease 2019 (COVID-19). By now, we all have a basic understanding of what the coronavirus is and are aware of the recommendations for limiting its spread.

    But as companies with employees, we also have to figure out how to keep our businesses functioning while, at the same time, protecting the people who operate and manage them, our customers and patrons – and we have to do it while acting in a lawful manner. For that reason, Aerlex Law Group is offering guidance regarding the legal ramifications of COVID-19 and some information regarding the latest developments in this rapidly evolving area. 

    Coronavirus Emergency Bill Passed by House of Representatives

    On Saturday, the U.S. House of Representatives passed the “Families First Corona Virus Response Act,” a legislative package negotiated by House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin which is intended to help soften the economic blow many Americans are expected to suffer as a result of the COVID-19 outbreak. The bill passed the House on a bipartisan 363-40 vote; all 40 votes against the legislative package were cast by Republicans, but President Trump tweeted his support of the resolution.

    The emergency legislation covers a number of different areas, including free coronavirus testing and expanded funding for food security programs, state unemployment insurance programs and Medicaid, but the portion of the new law that this Aerlex report focuses on is called the Emergency Family and Medical Leave Expansion Act, which amends the Federal Family and Medical Leave Act of 1993 (FMLA).

    Initial reports indicate that the new law will require companies with 500 or fewer employees to provide their employees with paid emergency leave, up to 12 weeks of paid family and medical leave, including 14 days of paid sick leave at full pay, with any additional weeks taken with no less than two-thirds of the employee’s usual pay up to $4,000.00 per month, to either quarantine or seek preventative care. These benefits are available if the employee has been diagnosed with COVID-19, or if they are caring for a family member who has it, or if they are caring for a child or another dependent due to a school or care facility closing. The benefits can be paid retroactively and will be available for those who had to leave work starting January 19th. Small businesses, which are defined as those having 50 employees or less, will receive subsidies, in the form of tax credits, to reimburse them for up to 100% of the wages they have to pay out to employees for medical and family leave. For businesses that already provide their employees with paid sick leave, the 14 days of sick pay are in addition to whatever the company presently provides. Self-employed individuals also will be entitled to tax credits equating to paid leave, but Persons working for companies with 500 or more employees will not be eligible to receive any of these benefits.

    The final bill passed by the House represents a significant expansion of the federal government’s existing sick leave requirements, but expressly limits the new benefits to those affected by the current coronavirus outbreak and does not apply to future public health emergencies. It is expected, though not yet certain, that the Senate will vote to approve the bill this week and that the President will sign it into law.

    Family and Medical Leave Act

    Senate Majority Leader Mitch McConnell said over the weekend that the Republican majority in the Senate will have to take a careful look at the 110-page bill before it agrees to adopt it and send it on to the President. In the meantime, employers should remember that the Federal Family and Medical Leave Act of 1993 (FMLA) still remains in full force and effect. FMLA allows eligible employees to take up to 12 work weeks of unpaid leave during any 12-month period to care for a new child, care for a seriously ill family member, or recover from a serious illness. In order to be eligible for FMLA leave, an employee must have worked for the employer for at least 12 months, have worked at least 1,250 hours over the past 12 months, and work for an employer with at least 50 employees.

    Several states have passed laws providing additional family and medical leave protections for workers. For example, California’s Paid Family Leave (PFL) insurance program, which is also known as the Family Temporary Disability Insurance (FTDI) program, is a law enacted in 2002 that extends unemployment disability compensation to cover individuals who take time off work to care for a seriously ill family member or bond with a new minor child. Benefits equal approximately 70% of earnings and have a maximum per week, for a total of up to six weeks.

    The California statute states that PFL must be taken concurrently with leave under the federal FMLA and the California Family Rights Act (CFRA), both of which provide for 12 weeks of unpaid leave in a 12-month period. In other words, the FMLA and CFRA offer job protection for up to 12 weeks of family leave whereas PFL offers compensation for up to eight weeks.

    At this time, it does not appear that an employee will be eligible for these benefits unless they or a family member is actually ill. It is unlikely that they will be able to recover benefits simply if they do not want to work out of fear of being exposed to the coronavirus without having actually contracted it.

    Leave for an employee to care for children who are out of school because of the crisis would not trigger coverage unless the child had a serious medical condition. Some states, like New York and California, requires unpaid leave for parents in the event of a school closure. California employees at worksites with 25 or more employees may also be provided up to 40 hours of leave per year for specific school-related emergencies, such as the coronavirus, because it was mandated by civil authorities. Whether that leave is paid or unpaid depends on the employer’s paid leave, vacation or other paid time off policies. Employers may require employees use their vacation or paid time off benefits before they are allowed to take unpaid leave, but cannot mandate that employees use paid sick leave. However, a parent may choose to use any available paid sick leave to be with their child as preventative care.

    Do Workers Have to be Paid if Work is Cancelled Due to the Emergency Declaration?

    The United States Equal Employment Opportunity Commission (EEOC) has previously expressed the view that telework is an effective infection-control strategy. The EEOC also has stated that employees with disabilities that put them at high risk of developing complications as a result of pandemic influenza may request telework as a reasonable accommodation to reduce their chances of infection during a pandemic. It seems reasonable, therefore, to assume the EEOC will take the same view when it comes to COVID-19.

    If workers are able to “telework” and perform their job duties outside of the office, then they are considered “on the clock” and must be paid. However, if they hold a job that cannot be performed outside of their regular employment location, the following general rules apply:

    (1) If the employees are nonexempt hourly workers, they must be paid only for the hours actually worked. If work is cancelled as a result of the emergency, the workers can take paid time off they have accrued or sick pay, depending on the employer’s company policy and local and state laws.
    (2) If the employees are exempt and salaried, pursuant to federal law they must be paid unless the business is closed for at least a full workweek and the employee performs no work at all. If the employee works part of the week, they must be paid for the full week.

    Employees Who Refuse to Work

    There are several federal and state laws that may protect employees who refuse to work due to the fear of the virus. OSHA protects employees who refuse to perform “unsafe work” if the refusal is in good faith and reasonable. The ADA protects disabled employees who refuse to perform certain work as part of a reasonable accommodation request. In addition to these federal laws, several states have laws that protect employees from terminating employees in violation of public policy.

    The key to this issue is whether the employee’s refusal to work is reasonable.

    Workers’ Compensation Benefits

    On March 6th, Stephen R. Hofer, President of Aerlex Law Group, was asked by the National Business Aviation Association (NBAA) to participate in a webinar along with Dr. Robert Haddon of the Mayo Clinic, regarding COVID-19 and its impact on business aviation. More than 600 people were in the online audience for the NBAA webinar and several listeners posed questions regarding the role workers’ compensation insurance might play in the event an employee contracts the novel coronavirus.

    Workers’ compensation is designed to take care of employers who are injured or become sick as a direct result of work-related activities. Therefore, as a general rule, state workers’ compensation statutes usually will not cover workers who contract an illness such as the coronavirus. An exception to this general rule will be for workers who might contract the virus as a natural consequence of their jobs, for example, health care workers and first responders who are working directly with infected patients. The State of Washington already has taken action to expand the reach of its workers’ compensation program to cover such employees.

    That being said, the more widespread COVID-19 becomes, the more difficult it may be for an employee to show that an infection is specifically a work-related condition rather than an ordinary disease contracted as part of daily life.

    Based on these general propositions, we can foresee a situation where a flight or cabin crew member might argue that he or she was infected as a direct result of their job. Proving that would be difficult, however, as the employee would have to show that another crew member or a passenger was infected and the employee had sufficient contact with the infected person.

    While a few states apply the test of whether a disease arises out of and in the course of employment to determine if benefits are available, several states exclude any disease that is not specifically listed in their workers’ compensation statute. Since COVID-19 is new, it will not be listed – at least not yet.

    Some states limit “occupational diseases” to diseases specific to their occupation, such as lung diseases resulting from mining jobs. Yet other states exclude from workers’ compensation coverage any disease contracted by a worker which results from exposure to other employees or customers if it is a disease the worker could have contracted from the general public.

    Based on all of these factors, we believe it is highly unlikely that an employee will be eligible for workers’ compensation benefits as a result of contracting the COVID-19 coronavirus. That could change if state governments take action to change their workers’ compensation laws.

    Sending Potentially Contagious Employees Home

    An employer may send an employee home who displays symptoms of contagious illnesses and such an action would not violate the restrictions on disability-related actions set forth in the Americans with Disabilities Act (ADA). The Centers for Disease Control and Prevention encourages employers to “actively encourage sick employees to stay home.” The CDC’s website provides helpful guidelines and can be found at https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html.

    Special Considerations for Aircraft Charter Operators Flying Under Part 135

    Charter operators flying under Title 14 of the Code of Federal Regulations (14 CFR) Part 135 are required to follow many of the same rules and regulation as other air carriers. On March 12, 2020, the U.S. Department of Transportation and Federal Aviation Administration issued a Safety Alert for Operators (“SAFO”) entitled Interim Health Guidance for Air Carriers and Crews.

    The purpose of the SAFO is to provide interim health guidance from the CDC and FAA regarding COVID-19 to protect crew members from exposure and reduce the risk of transmission of COVID-19 onboard aircraft or through air travel. Because of the rapidly evolving situation, the information otherwise provided by the CDC cannot be relied on to accurately judge the risk to crew members in any given location. Therefore, FAA and CDC recommend that air carriers and crew members take precautions to avoid exposure to COVID-19 and to ensure crew members do not work while symptomatic, regardless of crew members’ places of residence or flight itineraries.

    Guidance for Flight and Cabin Crews on Passenger or Cargo Flights

    The SAFO provides a great deal of information to pass along to crew members, including how to minimize the risk of contracting the virus and what to do if they do not feel well. A full copy of the guide can be found online and Aerlex will also be happy to provide clients with a copy upon request. In addition to the guidance, the CDC and FAA make the following recommendations to air carrier employers.

    Guidance for U.S. Air Carriers 

    Regardless of residence or travel history, crew members who have known exposure to persons with COVID-19 should be assessed and managed on a case-by-case basis. Crew members with high-risk exposures may need to be excluded from work.

    Housing flight and cabin crews on layovers (in the United States or internationally):

    • Arrange to move crew members as a group between the airport and the hotel aboard private ground transport that has been sanitized in advance. Advise your crews to avoid public transport unless it is an emergency.

    • Arrange to house flight crews in hotels that are in close proximity to the airport. Ensure that the hotel rooms are sanitized in advance of the crews’ arrival.

    • Provide crew with at least a 60% alcohol-based hand sanitizer.

    • Encourage crews to:

    o Avoid contact with sick people
    o Stay in their hotel rooms to the extent possible
    o Minimize going out into the general population
    o Use social distancing (maintain a distance of approximately 6 feet, if possible) whenever out in public
    o Avoid crowds, stores, sporting or mass entertainment events, and other situations likely to attract large numbers of people
    o Eat in their hotel rooms with either room service or delivery service. If in room dining options are not available, they should eat at a restaurant located in the hotel. If not available at the hotel, they should eat at a restaurant located close to the hotel.

    • Crew members may commute to their residence when they return to their home bases.

    Supervising self-monitoring of flight and cabin crews:

    • Develop a plan in the event a crew member becomes symptomatic during an overnight layover.

    o Know how to contact public health authorities in locations where crew remain overnight.
    o Provide information to crew members regarding medical facilities in the vicinity of cities in which crew members remain overnight.

    • Develop a plan in the event a crew member becomes symptomatic while in the crew member’s lodging or personal residence.

    o Ensure crew members know how to contact their state or local health department.
    o Advise crew members to notify their state or local health department if they become symptomatic, in addition to reporting to the employer’s occupational health program.

    • Crew members may continue to work flight segments as long as they remain asymptomatic.

    • Supervise crew members self-monitoring of their health condition through the air carrier’s occupational health program.

    o Direct crew members to take their temperature twice daily during periods when they are working.

    Consider providing crew members with thermometers.

    o Remind crew members to immediately report a fever, cough, or any difficulty breathing.
    o Check in with crew members periodically to make sure they continue to self-monitor and are not symptomatic.
    o Ensure crew members are asymptomatic before they board a flight.

    • Crew members who are symptomatic with fever, cough or difficulty breathing should not work subsequent flight segments until they have been cleared by occupational health and public health officials.

    o Notify the state or local health department where the crew member is located at the time (if the crew member is located in the United States). If the crew member is in an international location, notify the public health authority for that location.
    o Immediately report to CDC any crew member who has a fever, cough, difficulty breathing, or other flu-like symptoms or is diagnosed with COVID-19 if the crew member worked one or more flight segments while symptomatic. Additionally, consult with CDC if a crew member is identified to have a high-risk exposure to COVID-19, such as a sick household member with a confirmed or suspected case of COVID-19.

    Contact CDC by calling the CDC quarantine station with jurisdiction for the airport where the crew member is located or by calling the CDC Emergency Operations Center at 770-488-7100.


    The spread of COVID-19 is a rapidly evolving situation and it is important for employers to protect their employees and do so in a lawful manner. This article presents general guidelines and is not intended to be, and should not be construed as, or relied upon as, legal advice for any particular fact situation. If you have specific questions, please email either Douglas Stuart, Aerlex’s employment counsel, directly at dstuart@aerlex.com, or Aerlex’s President, Stephen Hofer, at shofer@aerlex.com.

    This article was originally published by Aerlex Law Group on March 15, 2020.

  • Tracey Cheek posted an article
    Congress Passes CARES Act: Overview of the Relief Available to Small and Other Business Concerns see more

    NAFA member, Greenberg Traurig, LLP, shares the latest update on the CARES Act Interim Final Rule.

    On April 2, 2020, the Department of Treasury and the Small Business Administration (SBA) posted the Interim Final Rule implementing Sections 1102 and 1106 of the CARES Act in advance of its publication in the Federal Register.  On April 3, 2020, SBA also released an overhauled Paycheck Protection Program loan application form.

    The new Interim Final Rule and SBA Form 2483 reflect significant developments since the promulgation of the CARES Act and our prior guidance.  Updates based on these developments are included below in red text for ease of reference. 

    In the midst of a global pandemic and the highest unemployment rates the United States has seen since 1933, President Trump signed into law the $2 trillion Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), providing economic relief to businesses, States and municipalities, and individuals affected by COVID-19. While the scope of the CARES Act is wide-ranging, this alert is limited to providing a high-level overview of the relief available for qualifying business concerns (generally small businesses with certain limited exceptions).  We will publish additional alerts as the SBA issues implementing regulations over the next 15 days. 

    Which businesses will be eligible for relief under the CARES Act? 

    Under Title I of the CARES Act (“Keeping American Workers Employed and Paid”), qualifying businesses that have suffered significant disruption as a result of COVID-19 will be able to receive no-fee “small business interruption loans.” Qualifying small businesses include “any business concern, nonprofit organization, veteran’s organization, religious organizations or Tribal business” that have:

    • 500 employees or fewer, whether employed on a full-time, part-time, or other basis; or
       
    • meet the SBA’s industry-based “size standard” requirements for the applicable North American Industry Classification System (NAICS) code, which are based either on number of employees or annual receipts, if larger than 500 employees, in which the concern operates.[1]

    The Interim Final Rule clarifies that only concerns that “either had employees for whom you paid salaries and payroll taxes or paid independent contractors, as reported on a Form 1099-MISC,” are eligible for PPP loans, and that “no eligible borrower may receive more than one PPP loan.”

    SBA Form 2483 indicates that applicants will not be eligible to receive loans if the Applicants or their owners: are presently or are proposed for suspension or debarment, presently involved in any bankruptcy, delinquent or in default on any direct or guaranteed loan by a Federal agency, or subject to formal criminal charges or probation; or that have within the past 5 years been convicted of any felony or placed on parole or probation.

    What are the exceptions to the “500 employees” rule? How do the SBA’s affiliation rules come into play?

    The updated SBA Form 2483 requires applicants to certify that the “Applicant is eligible to receive a loan under the rules in effect at the time this application is submitted that have been issued by the [SBA] implementing the Paycheck Protection Program.”  The Interim Final Rule states that “SBA intends to promptly issue additional guidance with regard to the applicability of affiliation rules at 13 CFR §§ 121.103 and 121.301 to the PPP loans.” 

    To determine an applicant’s receipts or number of employees, each applicant can generally expect that it must aggregate all employees on an affiliate basis, including subsidiaries and, in the context of private equity-backed and venture capital-backed businesses, portfolio companies. Exceptions are made in the legislation for:

    • independently owned franchises,[2] who are approved by the SBA, and hospitality businesses that fall within NAICS code 72, “Accommodation and Food Services,” and each of location with 500 or fewer employees; and
       
    • any business receiving financial assistance from a Small Business Investment Company (“SBIC”).

    What about independent contractor or gig economy workers? 

    Yes, sole proprietors, independent contractors, gig economy workers, and self-employed individuals are all eligible for the Paycheck Protection Program.

    The Interim Final Rule clarifies “independent contractors” do not count as employees “for purposes of a borrower’s PPP loan calculation,” or “PPP loan forgiveness,” because “independent contractors have the ability to apply for a PPP loan.”

    Who will provide and administer the loans?

    Loans will be administered pursuant to SBA’s section 7(a) loan program, as modified by the CARES Act. Loans will be made and serviced by existing banks and lenders enrolled in the SBA 7(a) program, as well as any other lenders determined by the SBA “to have the necessary qualifications to process, close, disburse and service loans made with the guarantee of the Administration.” 

    What is the maximum loan size? 

    The CARES Act sets the maximum loan amount under the Paycheck Protection Program as 250 percent of average monthly payroll costs, up to a total of $10 million.  The amount is intended to cover eight weeks of payroll expenses and any additional amounts for making payments towards debt obligations.  This eight-week period may be applied to any time frame between February 15, 2020 and June 30, 2020.  Seasonal business expenses will be measured using a 12-week period beginning February 15, 2019, or March 1, 2019, whichever the seasonal employer chooses.

    The Interim Final Rule clarifies that the maximum loan amount should be calculated based on the applicant’s “[a]ggregate payroll costs . . . from the last twelve months for employees whose principal place of residence is the United States,” less “any compensation paid to an employee in excess of an annual salary of $100,000.” 

    The Interim Final Rule further clarifies that the “outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any ‘advance’ under an EIDL COVID 19 loan,” may be included in the maximum loan amount for PPP loans.

    The terms of the loan may differ on a case-by-case basis.  However, the maximum terms of the loan can be up to ten years with an interest rate capped at 4% per annum and there shall be no prepayment penalties. The SBA will also reimburse lenders for origination or underwriting fees in an amount of: (i) 5% for loans of not more than $350,000, (ii) 3% for loans of more than $350,000 and less than $2 million and (iii) 1% for loans equal to or greater than $2 million. The SBA will issue additional regulations and guidance with respect to other terms and conditions of the program.

    The Interim Final rule clarifies that the interest rate “will be 100 basis points or one percent,” and that the “maturity is two years,” for PPP loans.  The Interim Final Rule further clarifies that “there will be no up-front guarantee fee payable to the SBA by the Borrower,” and that “Agent fees will be paid by the lender out of the fees the lender receives from SBA.”

    Any other restrictions on loan terms?

    Yes, the CARES Act limits the use of Paycheck Protection Program loans to: (1) payroll costs, excluding the prorated portion of any compensation above $100,000 per year for any person; (2) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums; (3) employee salaries, commissions, or similar compensations; (4) payments of interest on any mortgage obligation that existed on February 15, 2020 (which shall not include any prepayment of or payment of principal on a mortgage obligation); (5) rent payments (including rent under a lease agreement); (6) interest on any other debt obligations that were incurred before February 15, 2020; and (7) utility payments, including electricity, gas, water,  transportation, and phone and Internet access for service incurred in the ordinary course of business prior to February 15, 2020, in each case, paid during the eight-week period commencing on the date of origination of the loan.

    The Interim Final Rule clarifies that “Payroll costs” shall not include “Federal employment taxes imposed or withheld,” “including the employee’s and employer’s share of FICA (Federal Insurance Contribution Act) and Railroad Retirement Act taxes,” “income taxes required to be withheld from employees,” and “qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.”

    In addition, the Interim Final Rule further clarifies that if a borrower uses “PPP funds for unauthorized purposes, SBA will direct [the borrower] to repay those amounts,” and that borrowers that “knowingly” misuse the funds “will be subject to additional liability such as charges of fraud.”

    Will interest payments be deferred for any period?

    Yes, loan payments (including principal, interest and fees) will be deferred for at least six months and up to one year starting at the origination of the loan.

    The Interim Final Rule clarifies the deferment period will be for 6 months “following the date of the disbursement of the loan,” and that while borrowers will not have to make any interest payments during the deferment period, “interest will continue to accrue on PPP loans during this six-month deferment.”

    What portion of the loans will be eligible for forgiveness?  

    The loan will be eligible for forgiveness to the extent that the loan proceeds have been used for the following costs incurred and payments made during the eight-week period after the loan is made: (1) payroll costs, excluding the prorated portion of any compensation above $100,000 per year for any person; (2) group healthcare benefits and insurance premiums; (3) mortgage interest (but not on any prepayment of or payment of principal on a covered mortgage obligation); (4) rent payments and leases in existence prior to February 15, 2020, and; (5) certain utility payments, including electricity, gas, water,  transportation, and phone and Internet access for service incurred in the ordinary course of business prior to February 15, 2020, in each case, paid during the eight-week period commencing on the date of origination of the loan.  The Paycheck Protection Program can be used for other business-related expenses, like inventory, but that portion will not be forgiven.

    The Interim Final Rule clarifies that the amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest, and that “not more than 25 percent of the loan forgiveness amount may be attributable to non-payroll costs.”

    The Interim Final Rule states that “SBA will issue additional guidance on loan forgiveness.”

    A borrower will be required to submit a detailed application in support of loan forgiveness directly to the lender (see chart here). The lender will make a determination on the application within 60 days of receipt of the application; the loan is forgiven at the end of the 8-week period after the borrower takes the loan.  Borrowers will work with lenders to verify covered expenses and the proper amount of forgiveness.   The SBA will reimburse the lender directly for the principal amount of any forgiven debt, plus interest accrued through the date of repayment. SBA will issue additional implementation guidance and regulations regarding the loan forgiveness process within 30 days after enactment of the CARES Act.

    Forgiven amounts will not constitute cancellation of indebtedness income for federal tax purposes.

    The Interim Final Rule clarifies that a “lender does not need to conduct any verification if the borrower submits documentation supporting its request for loan forgiveness and attests that it has accurately verified the payments for eligible costs.  The Administrator will hold harmless any lender that relies on such borrower documents and attestation from a borrower.”

    What portions of the loan will not be eligible for forgiveness?

    The purpose of the Paycheck Protection Program is to help businesses retain employees, at their current base pay. If all employees are retained at their current salary, the entirety of the loan will be forgiven. If employees are laid off, the forgiveness will be reduced by the percent decrease in the number of employees.  If the borrower reduces the salary or wages of an employee no more than $100,000 per year by more than 25%, loan forgiveness will be reduced by the same amount.  If borrowers make staff or covered salary reductions between February 15, 2020 and April 26, 2020, the loan can still be forgiven for the full amount of payroll costs if those reductions are eliminated by June 30, 2020.  

    Is the borrower responsible for interest on the forgiven loan amount? 

    No, if the full principal of the Paycheck Protection Program loan is forgiven, the borrower is not responsible for the interest accrued in the 8-week covered period. The remainder of the loan that is not forgiven will operate according to the loan terms agreed upon by the borrower and the lender.

    What can the loans be used for?  Are there any restrictions?  

    Payroll, rent, mortgage payments, utilities, sick leave, insurance benefits and healthcare premiums are among the permitted uses.  Proceeds of loans may also be used to make interest payments on other debt obligations that were incurred prior to February 15, 2020.  However, loan proceeds may not be used to make any payment or prepayment of principal of existing debt obligations (e.g., mortgages).

    SBA Form 2483 requires applicants to certify that PPP loan “funds will be used to retain workers, maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule.”

    Will these loans be secured? Where would these loans rank in security and priority as compared to any pre-existing third-party debt instruments?

    No, the loans will be unsecured and will not take precedence over existing debt instruments in terms of payment priority. The loans will also not require collateral or personal guarantees from owners of borrowers.  There will be no recourse to owners or borrowers for nonpayment, except to the extent proceeds are used for an unauthorized purpose. The SBA has also waived prepayment penalties and has waived the guaranty fee and annual fee applicable to other 7(a) loans.

    What is the deadline to apply to the program?

    June 30, 2020.

    The Interim Final Rule clarifies that the PPP loans will be available on a “first-come, first-served” basis through June 30, 2020, or “until funds made available for this purpose are exhausted.”

    Will these loans trade on the secondary market?

    Yes.

    In addition, the Interim Final Rule clarifies that a “PPP loan may be sold on the secondary market after the loan is fully disbursed,” and that a “lender may request that the SBA purchase the expected forgiveness amount of a PPP loan or pool of PPP loans at the end of week seven of the covered period.”

    Are the small business interruption loans the same as the small business “disaster” loans I have read about?

    No, the “disaster” loans are relief in addition to the small business interruption loans. Under existing authority, the SBA will also provide smaller “Economic Injury Disaster Loans” (EIDLs) in an amount up to $2 million to businesses with not more than 500 employees, and agricultural cooperatives, that meet the SBA’s industry-specific business size limitations in declared disaster areas (a growing list of states) and have suffered substantial economic damage as a result of COVID-19 for the period of January 31, 2020 to December 31, 2020.  Most private non-profit organizations, of any size, will also be eligible EIDL Loans.

    Can I get a Paycheck Protection Act loan if I received an EIDL Loan?

    Yes, if an EIDL loan was obtained related to COVID-19 between January 31, 2020 and the date at which the Paycheck Protection Program becomes available, borrowers will be able to refinance the EIDL into the Paycheck Protection Program for loan forgiveness purposes. However, borrowers may not take out an EIDL and a Paycheck Protection Program for the same purposes. Remaining portions of the EIDL, for purposes other than those laid out in loan forgiveness terms for a Paycheck Protection Program loan, would remain a loan. If a borrower took advantage of an emergency EIDL grant award of up to $10,000, that amount would be subtracted from the amount forgiven under Paycheck Protection Program.

    The Interim Final Rule clarifies that borrowers that “received an SBA EIDL loan made between January 31, 2020 and April 3, 2020,” may “apply for a PPP loan.”  If the EIDL loan was not used for payroll costs, the EIDL loan will not effect the borrower’s eligibility for a PPP loan.  However, if the borrower’s EIDL loan was used for payroll costs, the borrower’s “PPP loan must be used to refinance [the] EIDL loan.” 

    Did the Care Act relax other EIDL Program Requirements?

    Yes, the CARES Act also: (1) waives any requirement for a personal guarantee for loans that are less than $200,000; (2) replaces the requirement that eligible businesses be in business for the 1-year period before the disaster with a requirement that businesses must have been in operation on January 31, 2020, and; (3) waives requirement that applicants are unable to obtain credit elsewhere.

    The Interim Final Rule clarifies that no collateral or personal guarantees by borrowers are required for PPP loans.

    What about advances?  

    The CARES Act also allows businesses, that self-certify as eligible, to apply for an EIDL advance/ grant, in an amount up to $10,000, to be provided within 3 days after receipt of the application.  Advances can be applied to any allowable purpose under the section 7(b) program, including: (1) providing paid sick leave to employees unable to work due to the direct effect of COVID–19; (2) maintaining payroll to retain employees during business disruptions or substantial slowdowns; (3) meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains; (4) making rent or mortgage payments, and; (5) repaying obligations that cannot be met due to revenue losses.  If an applicant that receives an advance is subsequently denied an EIDL loan, the advance does not need to be repaid.  If an applicant receives an advance under the EIDL program and “transfers into, or is approved for, the loan program under” the 7(a) program, “the advance amount shall be reduced from the loan forgiveness amount for a loan for payroll costs made under such section 7(a).  The CARES Act designates $10 billion for these immediate EIDL grants. 

    What about tax credits?

    Certain employers will be eligible for a payroll tax credit in each applicable quarter in an amount equal to 50% of the first $10,000 of qualified wages paid to employees (including health benefits) between March 13, 2020 and December 31, 2020. However, this credit is not available to employers who participate in the Paycheck Protection Program. This credit will be available to employers whose business (i) was fully or partially suspended due to a government shutdown order or (ii) experienced a decline of gross receipts of at least 50% vs. the same calendar quarter in the prior year (until such time as gross receipts for a quarter are greater than 80% vs. the same calendar quarter in the prior year). For businesses with greater than 100 full-time employees, the tax credit is only available to the extent wages are paid to employees who are unable to work as a result of a government shutdown order. For businesses with fewer than 100 full-time employees, the tax credit is available for all employees, even if the employee works from home during the business closure. This relief is set forth in Title II (Section 2301) rather than Title I of the CARES Act. Because this 50% tax credit FOR wages paid is not available to employers who participate in the Paycheck Protection Program, an employer would need to choose between taking this credit or obtaining a loan under the Paycheck Protection Program.

    Where can I apply for the Paycheck Protection Program?

    Businesses can apply for the Paycheck Protection Program at any lending institution that is approved to participate in the program through the existing SBA 7(a) lending program and additional lenders approved by the Department of Treasury. There are thousands of banks that already participate in the SBA’s lending programs, including numerous community banks. You do not have to visit any government institution to apply for the program. You can call your bank or find SBA-approved lenders in your area through SBA’s online Lender Match tool.[3]

    The Interim Final Rule clarifies that (i) “[a]ny federally insured depository institution or any federally insured credit union,” (ii) certain “Farm Credit System institution[s],” and (iii) certain “depository or non-depository financing” providers meeting specifically enumerated requirements “will be automatically qualified” to issue PPP loans unless currently designated as in Troubled Condition or subject to a formal enforcement action by their primary federal regulator. 

    National CARES Act Infographic

    For a detailed overview of the loan options available under the CARES Act, see our chart.

    For more information and updates on the developing situation, visit GT’s Health Emergency Preparedness Task Force: Coronavirus Disease 2019.

    *Special thanks to Steven M. FelsensteinBarbara A. JonesPeter LiebermanMichael J. SchaengoldScott SchipmaBrittany E. AllisonBrett CastellatDanielle K. Muenzfeld,  and Caroline E. Thee‡ for their assistance with this Alert.

    ‡Admitted in Indiana. Not admitted in Illinois.


    [1] Small business size standards vary by industry and are generally based on the number of employees or the amount of annual receipts the business has.  Small business size regulations can be found in Title 13 Part 121 of the Electronic Code of Federal Regulations (eCFR). 

    [2] Eligible franchises van be found through the SBA’s Franchise Directory

    [3] https://www.sba.gov/funding-programs/loans/lender-match.

    ATTACHMENTS

    This article was originally published by Greenberg Traurig, LLP, on April 3, 2020.

  • Tracey Cheek posted an article
    Five Guidelines for Successful Aircraft Financing and Leasing During the Covid-19 Crisis see more

    NAFA member, David G. Mayer, Partner at Shackelford, Bowen, McKinley & Norton, LLP, shares guidelines for aircraft financing during the Covid-19 crisis.

    With the availability of surprisingly low financing rates, aircraft owners may be able to reduce cash flow demands and/or create an extra cash resource during and after the Covid-19 crisis. Owners and others may be able to do so by aircraft refinancing, borrowing and leasing, cashing out aircraft equity or entering into sale leasebacks. 

    If you have purchased an aircraft for cash and you can wait out the crisis without stress or still prefer to and can purchase an aircraft with cash, read no further – except number 4 below.

    Otherwise, you may find the following five guidelines useful to qualify for and close these transactions during the Covid-19 crisis:

    1. Be thorough; be patient. You can apply for and facilitate a credit review process by providing all lender or lessor (financier) requested information promptly and thoroughly. In this unprecedented environment, financiers still generally assess your financial capability during and beyond the crisis based on typical criteria such as aircraft attributes, cash flow, business prospects, net worth and total debt obligations. However, with current business disruption, you should expect slower credit review and documentation processes.
    2. Ask for payments that match your expected crisis and post-crisis cash flow. You may need or want several months of no payments, interest only or other lower payments during the crisis followed by increasing payments or other amortization changes thereafter. Financiers can customize your financing within policy and regulatory parameters. 
    3. Realize that a durable relationship with your financier is crucial.  Your transparency and high quality of integrity and character will go a long way toward building a strong and lasting relationship with a financier, especially during the current health emergency. The relationship is likely begin with some uncertainty during crisis period but, if all goes well, last for years after the corona virus ends. Stay in touch with and be responsive to your financier – by voice – not just email.
    4. Structure your transaction to align with the FARs. Spare yourself additional anxiety of operating illegal charters or other illegal flight department companies (often LLC holding companies). Your violations may cost you significant sums in attorney’s fees as a result of potential FAA scrutiny or action against you. Use loan or lease credit review time and/or any pause in flight operations during the crisis to structure or restructure your agreements to comply with the Federal Aviation Regulations (FARs). Aligning your aircraft ownership, leasing and operations within the FARs is a frequent task for experienced aviation lawyers.
    5. Search broadly for insurance coverage at credit application. In your financing proposal, specify commercially available liability insurance that you have secured or expect to buy. It is important to add this term so that financiers do not ask for more coverage than you can deliver in an insurance market that is still in turmoil due to, among other difficulties, past underwriting losses and the tragic Kobe Bryant accident.

    This information was provided by David G. Mayer with Shackelford, Bowen, McKinley & Norton, LLP on April 7, 2020.

  • Tracey Cheek posted an article
    Treasury Establishes COVID-19 Emergency Payroll Support to Air Carriers and Contractors see more

    NAFA member, Greenberg Traurig, LLP, shares the latest information on the U.S. Department of the Treasury's COVID-19 Emergency Payroll Support to Air Carriers and Contractors.

    On March 30, 2020, the U.S. Department of the Treasury (Treasury) issued guidance on assistance to the air carrier industry as contemplated by the emergency relief provisions of Section 4112 of the Coronavirus Aid, Relief, and Economic Security Act (Cares Act). The guidance provides guidelines and application procedures for payroll support to air carriers and contractors. 

    The Program

    Under Section 4112(a) of the CARES Act, Treasury is authorized to provide payments to passenger air carriers, cargo air carriers, and certain contractors up to the following aggregate amounts:

    • Passenger air carriers: $25 billion
    • Cargo air carriers: $4 billion
    • Contractors: $3 billion.

    Basic Definitions

    Who is an air carrier?

    • an individual who is a citizen of the United States;
    • a partnership, each of whose partners is an individual who is a citizen of the United States; or
    • a corporation or association organized under the laws of the United States or a state, the District of Columbia, or a territory or possession of the United States, of which the president and at least two-thirds of the board of directors and other managing officers are citizens of the United States, which is under the actual control of citizens of the United States, and in which at least 75% of the voting interest is owned or controlled by persons that are citizens of the United States, in each case undertaking by any means, directly or indirectly, to provide foreign air transportation, interstate air transportation, or the transportation of mail by aircraft.

    Who is a cargo air carrier?  An air carrier that, during the time period from April 1, 2019, to September 30, 2019, derived more than 50% of its air transportation revenue from the transportation of property or mail, or both.

    Who is a contractor?

    • a person that performs, under contract with a passenger air carrier conducting operations under 14 C.F.R. Part 121:
      • catering functions, or
      • functions on the property of an airport that are directly related to the air transportation of persons, property, or mail, including but not limited to the loading and unloading of property on aircraft; assistance to passengers under 14 C.F.R. Part 382; security; airport ticketing and check-in functions; ground-handling of aircraft; or aircraft cleaning and sanitization functions and waste removal; or
    • a subcontractor that performs the above functions.

    What are catering functions?  The preparation, assembly, or both, of food, beverage, provisions, and related supplies for delivery, and the delivery of such items, directly to aircraft or to a location on or near airport property for subsequent delivery to aircraft.

    Who is an employee?  An individual, other than a corporate officer, who is employed by an air carrier or a contractor in the United States (including its territories and possessions).

    Who is a passenger air carrier?  An air carrier that, during the period from April 1, 2019, to September 30, 2019, derived more than 50% of its air transportation revenue from the transportation of passengers.

    What are wages, salaries, benefits, and other compensation? For purposes of Section 4113(a)(2) and (3) of the CARES Act, remuneration paid by the applicant to its employees for personal services and includes salaries, wages, overtime pay, cost-of-living differentials, and other similar compensation, as distinguished from per diem allowances or reimbursement for expenses incurred by personnel for the benefit of the applicant.

    Program Eligibility

    To be eligible to receive payments under the payroll support program, an applicant must agree to:

    • use such payments exclusively for the continuation of employee wages, salaries, and benefits;
    • refrain from conducting involuntary layoffs or furloughs, or reducing pay rates and benefits, of employees of the applicant and its subsidiaries (or, in the discretion of the Secretary of the Treasury, any affiliated entity) until September 30, 2020;
    • through September 30, 2021, ensure that neither the applicant nor any subsidiary or affiliate thereof purchases, in any transaction, an equity security of the applicant or the direct or indirect parent company of the applicant that is listed on a national securities exchange; and
    • through September 30, 2021, ensure that the applicant shall not pay dividends, or make other capital distributions, with respect to the common stock (or equivalent interest) of the applicant or any subsidiary thereof.

    Awardable Amounts

    The amount that may be awarded to an approved applicant is an amount equal to the compensation paid by the applicant to its employees, as determined by the Secretary of Treasury in his sole discretion, for the period April 1, 2019, through September 30, 2019 (Awardable Amount).

    The Awardable Amount is determined in one of three ways:

    • For an air carrier that reports salaries and benefits to the Department of Transportation pursuant to 14 C.F.R. Part 241, the Awardable Amount is an amount equal to the salaries and benefits reported by such air carrier on such reports pertaining to the time period.
    • For an air carrier that does not transmit reports under 14 C.F.R. Part 241, the Awardable Amount is an amount that such carrier certifies, using sworn financial statements or other appropriate data, as the amount of wages, salaries, benefits, and other compensation paid by such carrier during the time period.
    • For a contractor, the Awardable Amount is an amount that such contractor certifies, using sworn financial statements or other appropriate data, as the amount of wages, salaries, benefits, and other compensation that such contractor paid its employees during the time period.

    In the event that Awardable Amounts payable to approved applicants in any category (passenger air carriers, cargo air carriers, or contractors) exceed the aggregate amount authorized to be provided to such category, Treasury may reduce, on a pro rata basis, the amounts payable to approved applicants in such category in order to address such shortfall.

    Other Restrictions

    Additional restrictions on applicants include undertakings with respect to other items specified in the CARES Act, including:

    • collective bargaining agreements;
    • limitations on certain employee compensation;
    • the issuance of financial instruments to Treasury to compensate it for the award of funds;
    • audit and reporting requirements;
    • prohibitions on suspension or debarment;
    • limitations or prohibitions on insolvent or nearly insolvent applicants;
    • disclosure of information to the Department of Transportation; and
    • continuation of certain air service.

    How to Apply

    An applicant must complete the Payroll Support Application Form, including a proposal identifying a financial instrument (or instruments) and proposed terms for such instruments that would provide appropriate compensation to the federal government in exchange for payroll support. If the applicant is not an air carrier that reports salaries and benefits to the U.S. Department of Transportation under 14 C.F.R. Part 241, the applicant must also include a sworn financial statement certifying the amount of compensation paid to its employees during the period from April 1, 2019, through September 30, 2019. Treasury may request appropriate documentation in support of the sworn financial statement at a later time.

    An applicant must also complete a Payroll Support Agreement, which will be provided by Treasury after an application is received. The Payroll Support Agreement will include terms containing:

    • the assurances described above;
    • the compensation limitations in Section 4116 of the CARES Act;
    • certain other conditions and covenants; and
    • provisions for the clawback of payments upon the applicant’s failure to satisfy its assurances, conditions, or agreements.

    Timing

    To receive approval of their applications as soon as possible, applicants should submit their completed application materials not later than 5:00 p.m. EDT on April 3, 2020. Applicants may submit their application materials to PayrollSupportApplications@treasury.gov. In the coming days, Treasury will provide a web-based form for application submissions.  Applications received after 5:00 p.m. EDT on April 3 will be considered, but may not receive approval as quickly. Applications received after 11:59 p.m. EDT on April 27, 2020, may not be considered, but the Secretary of the Treasury may, in his discretion and subject to the availability of funds, consider such applications for approval.

    Application Form

    The application form, as well as additional guidance on the program, is available on Treasury’s website.

    For more information and updates on the developing COVID-19 situation, visit GT’s Health Emergency Preparedness Task Force: Coronavirus Disease 2019.

    ATTACHMENTS

    This article was originally published by Greenberg Traurig, LLP on April 1, 2020.

  • Tracey Cheek posted an article
    COVID-19 Federal Legislative and Regulatory Economic Stabilization Programs - What You Need to Know see more

    NAFA member, Greenberg Traurig, LLP, shares what your business needs to know about the COVID-19 Federal Legislative and Regulatory Economic Stabilization Programs.

    As the Coronavirus Disease 2019 (COVID-19) pandemic continues in the United States, the U.S. Congress and the U.S. federal financial regulatory agencies – the Federal Reserve, U.S. Department of the Treasury, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, National Credit Union Administration, and the Consumer Financial Protection Bureau (collectively, the Financial Agencies) – have introduced a number of financial stimulus programs or provided guidance designed to stabilize the U.S. economy and provide relief to U.S. debtors, both corporate and individual.

    Each of the stimulus programs is outlined below.

    Title IV of the CARES Act

    On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Title IV of the CARES Act titled, “Economic Stabilization and Assistance to Severely Distressed Sectors of the United States Economy,” includes several financial stimulus programs for U.S. businesses, other than programs earmarked by Title I of the CARES Act for small businesses.[1]Some of the key financial stimulus programs of the CARES Act include: U.S. Department of the Treasury Direct Support (Including Legislative Authority to Establish Facilities)

    The CARES Act authorizes the U.S. Department of the Treasury (Treasury) to make up to $500 billion of emergency loans, loan guarantees, or investments to be allocated as follows:

    • Up to $25 billion in loans and guarantees will be allocated for passenger air carriers;
    • Up to $4 billion in loans and guarantees will be allocated for cargo air carriers;
    • Up to $17 billion in loans and guarantees will be allocated for businesses critical to maintaining national security (the foregoing, Specific Industry Assistance); and
    • Up to $454 billion for loans, loan guarantees, and investments will be allocated to facilities established by the Federal Reserve to support lending to eligible businesses, states,[2] and municipalities ((b)(4) Assistance).

    Midsized Business Lending Program

    The CARES Act authorizes Treasury to endeavor to implement a program or facility of (b)(4) Assistance to provide funds to banks and other lenders to make direct loans to non-profit organizations and businesses between 500 and 10,000 employees. Loan interest cannot exceed 2% per year and no principal or interest payments will be due for the first six months (or such longer period as determined by Treasury). To qualify, the eligible borrower must self-certify in good faith to Treasury, among other things, that:

    • the loan is necessary to support the borrower’s ongoing operations because of the uncertainty of the economic conditions as of the date of the loan application;
    • the borrower will retain at least 90% of its workforce at full compensation and benefits until September 30, 2020;
    • the borrower intends to restore (x) at least 90% of the workforce of the borrower as it existed as of February 1, 2020 and (y) all compensation and benefits to the workers of the borrower no later than four months after the termination of the public health emergency declared by the U.S. Secretary of Health and Human Services;
    • the borrower is domiciled in the United States with “significant operations and employees” in the United States;
    • the borrower is not a debtor in bankruptcy proceedings;
    • the recipient is created or organized in the United States or under the laws of the United States and has significant operations in, and a majority of its employees are located in, the United States;
    • the borrower will not pay dividends with respect to its business or repurchase an equity security listed on a national securities exchange of itself or its parent company unless required by existing contractual arrangements;
    • the borrower will not outsource or offshore jobs for a period of time ending two years after repayment of the loan;
    • the recipient will not abrogate existing collective bargaining agreements during the term of the loan and for two years thereafter; and
    • the borrower will remain neutral in any union-organizing effort.

    Main Street Lending Program 

    The CARES Act does not limit the discretion of the Federal Reserve to establish a “Main Street Lending Program” or other similar program or facility that supports lending to small- and mid-sized businesses on terms consistent with the authority given to the Federal Reserve by Section 13(3) of the Federal Reserve Act.

    State and Municipal Borrower Lending Program

    The CARES Act directs Treasury to endeavor to implement a program or facility that provides liquidity to the financial system by lending to states[3] and municipalities.

    Conditions on Specific Industry Assistance Programs

    The Act directs Treasury to publish procedures for applications and minimum requirements for Specific Industry Assistance not more than 10 days after the date of enactment of the CARES Act (i.e., by April 6, 2020). Loans and guarantees under this program are conditioned on Treasury determining that:

    • the borrower is an eligible business for which credit is not otherwise reasonably available at the time of the transaction;
    • the intended obligation by the borrower is prudently incurred;
    • the loan or guarantee is sufficiently secured or made at a rate that reflects the risk of the loan or guarantee and, to the extent practicable, is not less than the interest rate based on market conditions for comparable obligations prior to the COVID-19 outbreak;
    • the duration of the loan or guarantee is as short as practicable and not longer than five years;
    • neither the borrower nor its affiliates may purchase an equity security that is listed on a national securities exchange of the borrower or its parent, except pursuant to existing contractual obligations for 12 months after the loan or guarantee is no longer outstanding;
    • the borrower cannot pay dividends or make other capital distributions on its common stock for 12 months after the loan or guarantee is no longer outstanding;
    • the borrower must maintain its employment levels as of March 24, 2020, to the extent practicable, and in any case cannot reduce its employment levels by more than 10% from the levels on such date;
    • the borrower must certify that it is created or organized in the United States or under the laws of the United States and has significant operations in, and a majority of employees based in, the United States;
    • the borrower must have incurred or is expected to incur covered losses, as defined in the CARES Act, such that the continued operations of the business are jeopardized, as determined by Treasury;
    • the borrower must comply with the limitations on certain employee compensation set forth below; and
    • if the business has securities that are traded on a national securities exchange, Treasury must receive a warrant or other equity interest in the eligible business or, in the case of any other eligible business, Treasury can receive, in its discretion, a warrant or equity interest in the business or a senior debt instrument issued by the eligible business. The terms and conditions of these instruments will be set by Treasury and must meet the requirements set forth in the CARES Act.

    Conditions on (b)(4) Assistance Programs

    Recipients of direct loans from lenders under (b)(4) Assistance programs must agree:

    • not to purchase an equity security that is listed on a national securities exchange of the borrower or its parent, except pursuant to existing contractual obligations for 12 months after the direct loan is no longer outstanding;
    • not to pay dividends or make other capital distributions on its common stock for 12 months after the direct loan is no longer outstanding, unless waived by Treasury upon a determination that a waiver is necessary to protect the interests of the Federal Government; and
    • to comply with the limitations on certain employee compensation set forth below.

    Employee Compensation Limitations on Specific Industry Assistance and (b)(4) Assistance

    The CARES Act places limitations on compensation of certain employees of eligible businesses receiving Specific Industry Assistance and (b)(4) Assistance. These limits require the eligible business to agree to cap all employee compensation (including salary, stock, bonuses, and other financial benefits) for a period ending one year after the loan is repaid. For employees receiving more than $425,000 per year: (i) these employees cannot receive more compensation than they received in 2019; and (ii) severance pay or other benefits upon termination cannot exceed twice the 2019 compensation amount. Officers or employees receiving more than $3 million per year cannot receive total compensation more than the sum of (i) $3 million plus (ii) 50% of the excess over $3 million.

    Public Reporting Requirement

    The CARES Act requires Treasury to publish on its website a plain language description about each loan and loan guarantee within 72 hours of the transaction, including the date of application, date of application approval, and identity of the counterparty. Additionally, Treasury and the Federal Reserve must report to the relevant congressional committees on transactions and the authorization of new facilities, respectively. In other words, Title IV-authorized financing transactions will not be confidential.

    Continuation of Certain Air Service or Air Carrier Borrowers

    The CARES Act requires the U.S. Secretary of Transportation to require, to the extent feasible, that loan or loan guarantee recipient air carriers maintain their scheduled air transportation until March 1, 2022, taking into consideration the air transportation needs of small and remote communities and the need to maintain well-functioning health care and pharmaceutical supply chains.

    Unlimited Deposit Insurance Coverage on Transactional Deposit Accounts Through December 31, 2020

    The CARES Act amends Section 1105 of the Dodd-Frank Act of 2010 and authorizes the Federal Deposit Insurance Corporation (FDIC) to guarantee, through December 31, 2020, the obligations of solvent insured depository institutions and their affiliates, including noninterest-bearing demand deposit accounts, without limit. This provision effectively resurrects the Transaction Account Guarantee Program of the FDIC, which the FDIC launched in October 2008 at the start of the Great Recession. The CARES Act would also give the National Credit Union Administration (NCUA) authority to increase share insurance coverage on noninterest-bearing demand deposit accounts at federally insured credit unions through December 31, 2020.

    Temporary Capital Ratio Reduction for Community Banks

    The CARES Act authorizes federal banking regulators to issue an interim rule that reduces the community bank leverage capital ratio from 9% to 8% and obligates regulators to provide a reasonable grace period for a qualifying community bank that falls out of compliance to regain compliance with the ratio requirements.

    Temporary Relief from Troubled Debt Restructurings

    The CARES Act temporarily relieves insured depository institutions from categorizing loan modifications related to the COVID-19 disease as troubled debt restructurings for purposes of compliance with the requirements of the Federal Deposit Insurance Act of 1933, as amended (12 U.S.C. §§ 1811 et seq.), until such time and under such circumstances as the appropriate federal banking agency or the NCUA determines appropriate. This provision in Title IV provides statutory endorsement to the short-term loan modification guidance published by the Financial Agencies on March 23, 2020, as discussed more fully in the next section of this Alert.

    Temporary Lending Limit Waiver

    The CARES Act will allow the Office of the Comptroller of the Currency (OCC) to temporarily waive the applicable loan limits for loans to non-bank financial companies (as defined in the Dodd-Frank Act) until the earlier of the: (i) the date on which the designated national emergency period terminates; and (ii) December 31, 2020.

    Temporary Relief from Current Expected Credit Losses (CECL) 

    The CARES Act temporarily relieves insured depository institutions, bank holding companies, and any affiliates from complying with the Financial Accounting Standards Board Accounting Standards Update No. 2016–13 (Measurement of Credit Losses on Financial Instruments), including the CECL methodology for estimating allowances for credit losses, until the earlier of: (i) the date on which the designated national emergency period terminates, and (ii) Dec. 31, 2020.

    Non-Applicability of Restrictions on Exchange Stabilization Fund (ESF) During National Emergency 

    The CARES Act temporarily suspends the restrictions of the Emergency Economic Stabilization Act of 2008 on Treasury’s use of the ESF from the date of the enactment of this Act until Dec. 31, 2020. Any guarantee that is established under this provision will be limited to a guarantee of the total value of a shareholder’s account in a participating fund as of the close of business on the day before the announcement of the guarantee. The guarantee must also terminate by Dec. 31, 2020.

    Temporary Credit Union Provisions

    The CARES Act broadens the definition of the kinds of credit unions to beyond only those serving “natural persons” and the eligibility requirements for those institutions to receive assistance from the Central Liquidity Facility of the NCUA. Specifically, a credit union may access liquidity if the value of such obligation does not exceed 16 times the subscribed capital stock and surplus of the facility itself. The present restriction is 12 times the capital stock and surplus. These restrictions expire Dec. 31, 2020.

    Inspector General for Pandemic Recovery

    Similar to the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) created by Congress at the start of the Great Recession, the CARES Act establishes within Treasury an Office of the Special Inspector General for Pandemic Recovery, appointed by the President and confirmed by the Senate. The Office will function for five years and has been granted a $25 million budget. The Special Inspector General is tasked with conducting, supervising, and coordinating audits and investigations of the making; purchase, management, and sale of loans; loan guarantees; and other investments made by the Treasury Secretary. The Special Inspector General must file quarterly reports with Congress that provide the details of all loans, loan guarantees, and other investments.

    Credit Protection During COVID-19

    The CARES Act amends the Fair Credit Reporting Act’s duties of furnishers of information to consumer reporting agencies. It specifically applies to the reporting obligations of creditors that provide an “accommodation” to a consumer on a credit obligation or account during the covered period of the COVID-19 pandemic. The covered period began on Jan. 31, 2020 and ends 120 days after the later of (a) enactment of the CARES Act (i.e., July 26, 2020) or (b) termination of the President’s COVID-19 outbreak national emergency proclamation.

    Foreclosure Moratorium and Consumer Right to Request Forbearance

    The CARES Act permits a borrower “experiencing a financial hardship” due to the COVID-19 emergency to request forbearance of a “federally backed mortgage loan,” regardless of delinquency status. The section applies to qualifying 1- to 4-family residential real property including individual condo and coop units. The borrower can receive two 180-day forbearances. The section also includes a moratorium on the initiation or moving forward on judicial or non-judicial foreclosures for not less than 60 days beginning March 18, 2020 (i.e., May 27, 2020).

    Forbearance of Residential Mortgage Loan Payments for Multifamily Properties with Federally Backed Loans 

    The CARES Act permits a borrower “experiencing a financial hardship” due to the COVID-19 to request forbearance of a federally backed multi-family loan (5 or more units) if the loan was current as of Feb. 1, 2020. The borrower may submit an oral or written request to its servicer for forbearance of up to three 30-day periods. A borrower receiving forbearance may not evict or initiate eviction of a tenant solely for nonpayment of rent or other charges nor assess any late fees or other penalties for a tenant’s late payment of rent. Upon expiration of the applicable period of forbearance, the borrower must provide a tenant with a 30-day notice to vacate.

    Temporary Moratorium on Eviction Filings

    The CARES Act imposes a moratorium on lessors to initiate legal action to recover possession of a “covered dwelling” for nonpayment of rent or other charges for the 120-day period from enactment (i.e., until July 26, 2020). A covered dwelling is property (a) participating in certain Violence against Women Act housing programs or the rural voucher program, or (b) has a federally backed mortgage loan or federally backed multifamily mortgage loan. During the moratorium period, a covered dwelling lessor cannot impose any fees, penalties, or other charges to a tenant related to nonpayment of rent. Additionally, upon expiration of the moratorium period, the lessor of a covered dwelling must provide a tenant with at least 30-days notice to vacate.

    Federal Reserve Stimulus Programs 

    Independent of the Title IV programs discussed above, the Federal Reserve has implemented or are implementing various measures designed to provide liquidity and stability to financial institutions and certain sectors of the capital markets.[4] These initiatives include the following[5]:

    The Money Market Mutual Fund Liquidity Facility (MMLF) 

    The MMLF is intended to provide liquidity to Money Market Mutual Funds (Funds). The Federal Reserve Bank of Boston will lend to eligible borrowers, taking as collateral certain types of assets purchased by the borrower from Funds. Eligible borrowers are all U.S. depository institutions, U.S. bank holding companies (parent companies incorporated in the United States or their U.S. broker-dealer subsidiaries), or U.S. branches and agencies of foreign banks. The applicable Funds must identify as a Prime, Single State, or Other Tax-Exempt money market fund under item A.10 of Securities and Exchange Commission Form N-MFP. Borrowings under the MMLF will mature at the lesser of 12 months and the maturity date of the pledged collateral. Collateral that is eligible for pledge to the MMLF must be one of the following types:

    • U.S. Treasuries & Fully Guaranteed Agencies.
    • Securities issued by U.S. Government Sponsored Entities.
    • Asset-backed commercial paper, unsecured commercial paper, or a negotiable certificate of deposit that is issued by a U.S. issuer, and that has a short-term rating at the time purchased from the Fund or pledged to the Reserve Bank in the top rating category (e.g., not lower than A1, F1, or P1, as applicable) from at least two major nationally recognized statistical rating organizations (NRSRO) or, if rated by only one major NRSRO, is rated within the top rating category by that NRSRO;
    • U.S. municipal short-term debt (excluding variable rate demand notes) that:
      • Has a maturity that does not exceed 12 months; and
      • At the time purchased from the Fund or pledged to the Reserve Bank:
        • Is rated in the top short-term rating category (e.g., rated SP1, MIG1, or F1, as applicable) by at least two major NRSROs or if rated by only one major NRSRO, is rated within the top rating category by that NRSRO: or
        • If not rated in a short-term rating category, is rated in one of the top two long-term rating categories (e.g., AA or equivalent or above) by at least two major NRSROs or if rated by only one major NRSRO, is rated within the top two rating categories by that NRSRO.
    • Variable rate demand notes that:
      • Have a demand feature that allows holders to tender the note at their option within 12 months; and
      • At the time purchased from the Fund or pledged to the Reserve Bank:

    Interest rates under the MMLF depend on the type of pledged collateral. If the loan is:

    • Secured by U.S. Treasuries & Fully Guaranteed Agencies or Securities issued by U.S. Government Sponsored Entities, the interest rate is equal to the primary credit rate in effect at the Reserve Bank that is offered to depository institutions at the time the advance is made; and
    • Secured by U.S. municipal short-term debt, including variable rate demand notes, the interest rate is equal to the primary credit rate in effect at the Reserve Bank that is offered to depository institutions at the time the advance is made plus 25 bps.

    All other advances will be made at a rate equal to the primary credit rate in effect at the Reserve Bank that is offered to depository institutions at the time the advance is made plus 100 bps. Collateral will be valued on either an amortized cost or fair value basis. For asset-backed commercial paper, unsecured commercial paper, negotiable certificates of deposit, and U.S. municipal short-term debt, including variable rate demand notes, the valuation will be amortized cost. Loans under the MMLF will be in a principal amount equal to the value of the collateral pledged to secure the advance. Loans made under the MMLF are made without recourse to the Borrower.

    Regarding the regulatory capital treatment of loans under the MMLF, on March 19, 2020, the Federal Reserve, the OCC and the FDIC issued an interim final rule to allow banking organizations to neutralize the effects of purchasing assets through the program on risk-based and leveraged capital ratios.

    The Commercial Paper Funding Facility (CPFF) 

    The CPFF, established by the Federal Reserve Bank of New York under Section 13(3) of the Federal Reserve Act, will serve as a funding backstop to facilitate the issuance of term commercial paper by eligible issuers. A special purpose vehicle (SPV) formed for purposes of creating the CPFF will purchase from eligible issuers three-month U.S. dollar-denominated commercial paper through the New York Fed’s primary dealers. Eligible issuers are U.S. issuers of commercial paper, including municipal issuers and U.S. issuers with a foreign parent company.

    Eligible issues: Except as provided in the next sentence, the SPV will only purchase U.S. dollar-denominated commercial paper (including asset-backed commercial paper (ABCP) that is rated at least A1/P1/F1 by a major nationally recognized statistical rating organization (NRSRO) or, if rated by multiple major NRSROs, is rated at least A1/P1/F1 by two or more major NRSROs, in each case subject to review by the Federal Reserve. An issuer that, on March 17, 2020, was (1) rated at least A1/P1/F1 by a major NRSRO or, if rated by multiple major NRSROs, was rated at least A1/P1/F1 by two or more major NRSROs; and (2) is subsequently downgraded, will be able to make a one-time sale of commercial paper to the SPV so long as the issuer is rated at least A2/P2/F2 by a major NRSRO or, if rated by multiple major NRSROs, is rated at least A2/P2/F2 by two or more major NRSROs, in each case subject to review by the Federal Reserve. The SPV will not purchase asset-backed commercial paper (ABCP) from issuers that were inactive prior to the creation of the CPFF. An issuer will be deemed inactive if it did not issue ABCP to institutions other than the sponsoring institution for any consecutive period of three-months or longer between March 16, 2019 and March 16, 2020.

    Program limits per issuer: The maximum amount of a single issuer’s commercial paper the SPV may own at any time will be the greatest amount of U.S. dollar-denominated commercial paper the issuer had outstanding on any day between March 16, 2019 and March 16, 2020. The SPV will not purchase additional commercial paper from an issuer whose total commercial paper outstanding to all investors (including the SPV) equals or exceeds the issuer’s limit. For an issuer that, on March 17, 2020, was (1) rated at least A1/P1/F1 by a major NRSRO or, if rated by multiple major NRSROs, was rated at least A1/P1/F1 by two or more major NRSROs; and (2) is rated at least A2/P2/F2 by a major NRSRO or, if rated by multiple major NRSROs, is rated at least A2/P2/F2 by two or more major NRSROs, the maximum amount of the issuer’s commercial paper that the SPV will purchase is the amount of U.S. dollar-denominated commercial paper the issuer had outstanding the day before it was downgraded.

    Interest Rates and Facility Fees: For commercial paper rated A1/P1/F1, pricing will be based on the then-current 3-month overnight index swap (OIS) rate plus 110 basis points. For commercial paper rated A2/P2/F2, pricing will be based on the then-current 3-month OIS rate plus 200 basis points. At the time of its registration to use the CPFF, each issuer must pay a facility fee equal to 10 basis points of the maximum amount of its commercial paper the SPV may own.

    Termination date: The SPV will cease purchasing commercial paper on March 17, 2021, unless the Board extends the facility. The New York Fed will continue to fund the SPV after such date until the SPV’s underlying assets mature.

    The Term Asset-Backed Securities Loan Facility (TALF) 

    The TALF is a credit facility authorized under section 13(3) of the Federal Reserve Act intended to help meet the credit needs of consumers and small businesses by facilitating the issuance of asset-backed securities (ABS) and improving the market conditions for ABS more generally. The loans under TALF will have a term of three years; will be nonrecourse to the borrower; and will be fully secured by eligible ABS.

    Eligibility: Eligible borrowers under the TALF include all U.S. companies that own eligible collateral and maintain an account relationship with a primary dealer. A U.S. company is defined as a U.S. business entity organized under the laws of the United States or a political subdivision or territory thereof (including such an entity that has a non-U.S. parent company), or a U.S. branch or agency of a foreign bank.

    Collateral: Eligible collateral under TALF includes U.S. dollar denominated cash (that is, not synthetic) ABS that have a credit rating in the highest long-term or the highest short-term investment-grade rating category from at least two eligible nationally recognized statistical rating organizations (NRSROs) and do not have a credit rating below the highest investment-grade rating category from an eligible NRSRO. All or substantially all the credit exposures underlying eligible ABS must have been originated by a U.S. company. Eligible ABS must be issued on or after March 23, 2020. In addition, eligible collateral must be ABS where the underlying credit exposures are one of the following:

    • Auto loans and leases;
    • Student loans; credit card receivables (both consumer and corporate); equipment loans; floorplan loans; insurance premium finance loans; certain small business loans that are guaranteed by the Small Business Administration; or eligible servicing advance receivables.

    Eligible collateral will not include ABS that bear interest payments that step up or step down to predetermined levels on specific dates. In addition, the underlying credit exposures of eligible collateral must not include exposures that are themselves cash ABS or synthetic ABS. To be eligible collateral, all or substantially all the underlying credit exposures must be newly issued.

    Other key TALF terms include:

    Collateral Valuation: The pledged eligible collateral will be valued and assigned a haircut according to a schedule based on its sector, the weighted average life, and historical volatility of the ABS. The haircut schedule will be published in the detailed terms and conditions and will be roughly in line with the haircut schedule used for the TALF Facility established in 2008.

    Interest Rates and Facility Fees: For eligible ABS with underlying credit exposures that do not have a government guarantee, the interest rate will be 100 basis points over the 2-year London Inter-bank Offered Rate (LIBOR) swap rate for securities with a weighted average life less than two years, or 100 basis points over the 3-year LIBOR swap rate for securities with a weighted average life of two years or greater. The interest rate for other eligible ABS will be set forth in the detailed terms and conditions. Borrowers will be assessed an administrative fee equal to 10 basis points of the loan amount on the settlement date for collateral.

    Maturity: Each loan provided under this facility will have a maturity of three years.

    Prepayment: Loans made under the TALF will be pre-payable in whole or in part at the option of the borrower, but substitution of collateral during the term of the loan generally will not be allowed.

    Termination: No new credit extensions will be made after Sept. 30, 2020, unless the TALF is extended by the Board of Governors of the Federal Reserve System.

    Primary Market Corporate Credit Facility (PMCCF)

    The PMCCF will serve as a funding backstop for corporate debt issued by eligible issuers and will be established under Section 13(3) of the Federal Reserve Act by the Federal Reserve Bank of New York. The PMCCF Facility will purchase eligible corporate bonds directly from eligible issuers and will make eligible loans to eligible issuers. Eligible corporate bonds and loans must meet each of the following criteria at the time of bond purchase or loan origination by the Facility:

    • Issued by an eligible issuer.
    • Issuer is rated at least BBB-/Baa3 by a major NRSRO and, if rated by multiple major NRSROs, rated at least BBB-/Baa3 by two or more NRSROs, in each case subject to review by the Federal Reserve; and
    • Have a maturity of four years or less.

    Eligible issuers are U.S. companies headquartered in the United States and with material operations in the United States. Eligible issuers do not include companies that are expected to receive direct financial assistance under pending federal legislation, including the CARES Act.

    Limits: The maximum amount of outstanding bonds or loans of an eligible issuer that borrows from the Facility may not exceed the applicable percentage of the issuer’s maximum outstanding bonds and loans on any day between March 22, 2019 and March 22, 2020:

    • 140 percent for eligible assets/eligible issuers with a AAA/Aaa rating from a major NRSRO;
    • 130 percent for eligible assets/eligible issuers with a AA/Aa rating from a major NRSRO;
    • 120 percent for eligible assets/eligible issuers with an A/A rating from a major NRSRO; or
    • 110 percent for eligible assets/eligible issuers with a BBB/Baa rating from a major NRSRO.

    Bonds and loans under the PMCCF Facility are callable by the eligible issuer at any time at par.

    Interest Rates, Fees and PIK Provisions: The PMCCF Facility will purchase bonds and make loans that have interest rates informed by market conditions. At the borrower’s election, all or a portion of the interest due and payable on each interest payment date may be payable in kind for 6 months, extendable at the discretion of the Board of Governors of the Federal Reserve System. A borrower that makes a PIK election may not pay dividends or make stock buybacks during the period it is not paying interest. The commitment fee will be set at 100 bps.

    Termination: The PMCCF Facility will cease purchasing eligible corporate bonds or extending loans on Sept. 30, 2020, unless the Facility is extended by the Board of Governors of the Federal Reserve System.

    The Secondary Market Corporate Credit Facility (SMCCF) 

    Under the SMCCF, the Federal Reserve Bank of New York will establish, under Section 13(3) of the Federal Reserve Act, an SPV to purchase in the secondary market corporate debt issued by eligible issuers. The SPV will purchase eligible individual corporate bonds as well as eligible corporate bond portfolios in the form of exchange traded funds (ETFs) in the secondary market.

    Eligible Individual Corporate Bonds: The SMCFF may purchase corporate bonds that meet each of the following criteria at the time of purchase:

    • Issued by an eligible issuer.
    • Rated at least BBB-/Baa3 by a major NRSRO and, if rated by multiple major NRSROs, rated at least BBB-/Baa3 by two or more NRSROs, in each case subject to review by the Federal Reserve.
    • Have a remaining maturity of five years or less.

    Eligible ETFs: The SMCCF may also purchase U.S.-listed ETFs whose investment objective is to provide broad exposure to the market for U.S. investment grade corporate bonds.

    Eligible issuers for direct purchases of individual corporate bonds on the secondary market are U.S. businesses with material operations in the United States. Eligible issuers do not include companies that are expected to receive direct financial assistance under pending federal legislation, including the CARES Act. The maximum amount of bonds that the SMCCF will purchase from any eligible issuer will be capped at 10 percent of the issuer’s maximum bonds outstanding on any day between March 22, 2019 and March 22, 2020. The facility will not purchase more than 20% of the assets of any particular ETF as of March 22, 2020. The SMCCF will purchase eligible corporate bonds at fair market value in the secondary market. The Facility will avoid purchasing shares of eligible ETFs when they trade at prices that materially exceed the estimated net asset value of the underlying portfolio.

    Termination: The SMCCF will cease purchasing eligible corporate bonds and eligible ETFs no later than Sept. 30, 2020, unless the Facility is extended by the Federal Reserve.

    Actions Taken by the Financial Agencies to Encourage Lending and Facilitate Loan Modifications

    In addition to the financial stimulus programs found in Title IV of the CARES Act and those launched (and in some cases re-launched) by Treasury and the Federal Reserve, the Financial Agencies have taken several piecemeal actions since the start of the crisis to encourage new lending and facilitate short-term loan modifications. These actions include:

    • Meeting the Financial Needs of Affected Borrowers. On March 9, 2020, the Federal Reserve, FDIC, OCC, NCUA and state bank regulators issued a statement “encouraging” financial institutions to meet the financial services needs of their customers and members in areas affected by COVID-19.
    • Community Reinvestment Act Favorable Consideration. On March 19, 2020, the Federal Reserve, FDIC, and OCC issued a joint statement on Community Reinvestment Act (CRA) consideration for activities in response to COVID-19, stating that for CRA purposes, the agencies will favorably consider retail banking and lending activities that meet the needs of affected low- and moderate-income individuals, small businesses, and small farms, consistent with safe and sound banking practices and applicable laws, including consumer protection laws. The CRA joint statement noted such activities could include offering short-term, unsecured credit products.
    • Short-Term Loan Modifications. On March 23, 2020, the OCC, FDIC, NCUA, Federal Reserve, the Consumer Financial Protection Bureau and the State Conference of Bank Supervisors issued an Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. The Guidance does two key things:
    1. Short-term loan modifications (for loans of all types) granted to borrowers that have become financially distressed as a result of economic conditions created by COVID-19 will not result in a loan being classified a troubled debt restructuring (TDR). According to U.S. GAAP, a restructuring of a loan or other credit constitutes a TDR if the lender/creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider.

      The banking agencies have confirmed with staff of the Financial Accounting Standards Board that short-term (e.g., six months or less) loan modifications made on a good faith basis in response to COVID-19 for borrowers who were current prior to any relief, are not TDRs. Modification actions can include payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant.
       
    2. Furthermore, bank regulators will not criticize bankers for granting short-term loan modification relief, if the action taken is done in good faith. The explicit statement in the Guidance that bankers will not be criticized by their regulators removes a significant impediment to bankers providing short-term loan modification relief – an impediment that chilled bankers in the months and years following the 2008/2009 Financial Crisis from providing such relief.
    • Small-Dollar Loans to Consumers and Small Businesses. On March 26, 2020, the Federal Reserve, FDIC, OCC, NCUA and CFPB issued a joint statement “encouraging” banks, savings associations and credit unions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19. According to the agencies, “[s]uch loans can be offered through a variety of structures including open-end lines of credit, closed-end installment loans, or appropriately structured single payment loans.”

    For more information and updates on the developing COVID-19 situation, visit GT’s Health Emergency Preparedness Task Force: Coronavirus Disease 2019 or GT’s Economic Stimulus Team.


    [1] Programs to be implemented by the Small Business Administration pursuant to Title I of the CARES Act are addressed in a separate Alert.

    [2] This includes U.S. territories or possessions and Indian Tribes.

    [3] For purposes of the CARES Act, “state” includes U.S. territories and possessions and Indian Tribes.

    [4] This Alert does not address the independent efforts of various state legislative and state regulatory authorities to provide relief to individual and corporate borrowers whose personal finances or businesses have been adversely affected by COVID-19. For instance, on March 21, 2020, New York Governor Andrew Cuomo signed an Executive Order, No. 202.9, Continuing Temporary Suspension and Modification of Laws Relating to Disaster Emergency (the Executive Order). It modifies Section 39(2) of the New York Banking Law to provide that it is an unsafe and unsound business practice for any New York-licensed bank not to grant a 90-day forbearance to any person or business who has a financial hardship as a result of the COVID-19 pandemic. On March 24, 2020, the New York Department of Financial Services (NYDFS) adopted regulations pursuant to the Executive Order requiring NYDFS-regulated institutions to make applications for forbearance of any payment due on a New York residential mortgage available to any New York resident and who demonstrates financial hardship as a result of the COVID-19 pandemic.

    [5] Of the five programs discussed in this section, MMLF, CPFF, TALF, PMCCF and SMCCF, only MMLF has published regulations. The others exist as term sheets, dated March 23, 2020, on the Federal Reserve’s website, which can be found here: https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm.

    ATTACHMENTS

    This article was originally published by Greenberg Traurig, LLP, on March 28, 2020.

  • Tracey Cheek posted an article
    NBAA Welcomes Legislation Providing COVID-19 Relief see more

    Washington, DC, March 25, 2020 – The National Business Aviation Association (NBAA) today welcomed Senate passage of a $2 trillion stimulus bill that would grant relief to the nation’s aviation industry, including general aviation (GA), as it grapples with the staggering effects from the COVID-19 pandemic.

    The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed by the Senate today; the House is expected to likewise approve the legislation, with the President’s signature to follow shortly thereafter.

    Review NBAA’s analysis of key provisions for general aviation businesses in the CARES Act.

    NBAA President and CEO Ed Bolen pointed to several provisions in the bill that will benefit the GA community, including business aviation. These include additional relief for airports through a $10 billion increase to Airport Improvement Program (AIP) funding, with $100 million specially allocated to general aviation airports, in recognition of their critical importance to communities, particularly in times of crisis.

    The bill also contains relief from the 7.5% air transportation federal excise tax for general aviation commercial operations, including FAR Part 135 flights, and suspension of the commercial fuel tax until Jan. 1, 2021. NBAA successfully worked to have these measures extended to all GA operators that pay such taxes. 

    In addition, the CARES Act provides loans and grants to passenger and cargo air carriers, including general aviation commercial operators, such as FAR Part 135 charter providers. For these commercial passenger operators and FAR Part 145 repair stations, $25 billion in direct loans and loan guarantees are available. An additional $25 billion in grants are available to air carriers for the continuation of wage payments to workers. NBAA led a general aviation industry letter to lawmakers to ensure that general aviation commercial operators were eligible for these programs. Read NBAA’s letter in its entirety.  

    Additional loan programs for small and mid-size businesses are also made available under the measure, and while they are not specific to aviation, they may offer further assistance to the thousands of small and midsize aviation businesses in the industry.

    “On balance, this bill is helpful for general aviation,” Bolen said. “The industry clearly made its voice heard in ensuring that the important provisions for general aviation airports, general aviation commercial operators and other small businesses were considered as this legislation was assembled, and we look forward to the bill’s passage into law.”

    Contact: Dan Hubbard, 202-783-9360, dhubbard@nbaa.org

    # # #

    Founded in 1947 and based in Washington, DC, the National Business Aviation Association (NBAA) is the leading organization for companies that rely on general aviation aircraft to help make their businesses more efficient, productive and successful. The association represents more than 11,000 companies and professionals and provides more than 100 products and services to the business aviation community, including the NBAA Business Aviation Convention & Exhibition (NBAA-BACE), the world’s largest civil aviation trade show. Learn more about NBAA at nbaa.org.

    Members of the media may receive NBAA Press Releases immediately via email. To subscribe to the NBAA Press Release email list, submit the online form.

    This release was originally published by NBAA on March 25, 2020.

  • Tracey Cheek posted an article
    AOPA Backs Emergency Airport Funding to Fight Coronavirus Impact see more

    NAFA member, AOPA, urges Congress to support emergency airport funding. 

    AOPA and six other aviation groups are urging Congress to support needed funding for airports across the country while ensuring that small and general aviation airports also receive a portion of any funds made available to help cope with the coronavirus pandemic.

    Assistance to airports should include funding “exclusively for small and general aviation airports that serve thousands of communities across the country and which have also been impacted by this situation,” the groups said in a letter delivered to the bipartisan leadership of the House and Senate appropriations committees on March 23.

    “We need a strong and vibrant airport ecosystem in this nation and we want to do everything we can to ensure they get help to meet the operational challenges caused by this pandemic and ultimately continue to accommodate the millions of general aviation operations each year,” said AOPA President Mark Baker. “These airports will remain a priority for us.”

    The letter noted that volunteer pilots fly from airports that are the lifeline of many small and rural communities to deliver goods and services during times of natural disasters and emergencies. The diverse general and business aviation aircraft fleet is “capable of rapidly responding to needs in every part of the country and transporting time sensitive supplies, medical and testing equipment, organs for transplants, and key personnel and patients on demand,” it said, adding that “now more than ever, the country will rely on our airport ecosystem.”

    As the pandemic has continued, AOPA has been reporting on the coronavirus’s increasing impact on GA airports, events, and activities.

    The organizations that joined AOPA in signing the letter include the Experimental Aircraft Association, the General Aviation Manufacturers Association, Helicopter Association International, the National Air Transportation Association, the National Business Aviation Association, and the National Association of State Aviation Officials.

    This article was originally published by AOPA on March 23, 2020.