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|Provisions to Amend CARES Act to Aid Parking Industry - ACT NOW|
Provisions to Amend CARES Act to Aid Parking Industry — ACT NOW
This is an NPA Issue Alert. Act now to contact legislators on amendments to the CARES Act.
An effort is underway on the House side of Congress regarding amendments to the CARES Act. Legislative drafting is taking place as we speak.
IMMEDIATE ACTION “CLICK & SEND” MESSAGE: To make it easy, visit the NPA Grassroots Outreach Page. Just fill out a short form & our prepared message is ready for you to click and send.
Our message to the Hill is that key provisions are needed in the CARES Act so NPA members have sufficient access to capital for cash flow and terms that allow a sufficient window for work force compliance with CARES Act provisions.
Proposed Parking Industry Provisions Changes to CARES Act
As the Administration and Congress develop future legislation, the parking industry requests regulations implementing the CARES Act, or application of the financial assistance packages set forth in CARES Act take the following steps:
Paycheck Protection Program:
1. NAICS Code Exception — The CARES Act in new section 7(a)(36)(D) uses NAICS Code 72 to grant PPP eligibility to larger hotel/restaurant businesses notwithstanding their having more than 500 employees (either because of having more than one physical location or due to the affiliation rule).
Congress should provide the same exceptions for the parking industry by adding a reference to NAICS code 812930 in D(iii) and D(iv). This in effect waives limitations on gross revenue and the total number of employees, consistent with the relief provided to the hotel and hospitality industries.
Benefits of the NAICS Waiver — The parking industry is equally desperate for financing as the two excepted categories, lodging and restaurants, that depend so greatly on our parking. By allowing parking companies of all sizes to participate in the PPP via these two exceptions, you will increase the likelihood that when normalcy returns, hotels and restaurants will be able to depend on commercial parking nearby.
We note further that the PPP bolstered the resiliency of near-airport parking competitors by granting them access to liquidity while leaving national near-airport parking operators to fend for themselves.
Although national near-airport parking companies have been given access to Treasury repayable loans with conditions, the conditions are untenable to companies of our size (<5,000 employees combined) while our direct competitors (small competing near-airport parking companies, airports, and hotels) received forgivable loans and grants, in some cases without regard to employee count. We do not believe Congress intended to create winners and losers, but without amendment, that is what will occur, to the disadvantage of tens of thousands of American workers.
Per Location Clarification — In addition, the law needs to clarify that parking companies can apply for up to $10 million per location due to the typical industry structure of larger companies (hundreds or thousands of locations with a few employees but all under the same corporate Employer Identification Number. Without this fix thousands of workers will be unnecessarily furloughed.)
2. Affiliation Rule Modification — Waive affiliation rules temporarily for this crisis, so that businesses that receive financial assistance from private equity or foreign investment companies are eligible for the PPP. If your goal is preserving jobs, these two obstacles are affecting many parking companies that will have no choice but to deepen furloughs and possibly close. Those sources of equity investment should not “poison the well” for American companies employing American workers.
3. Outsourcing Clarification — In some cases, parking employees work under a contract that their employer has with a corporate client. It would help to clarify for the parking industry to ensure that where the parking company employs workers and provides services under a contract to a PPP borrower, the borrower may use loan proceeds to pay its parking contractor to cover the payroll costs of the contractor, provided that such contractor is not itself an eligible PPP borrower. Without this clarification, there could be situations where our client is not eligible to use the PPP but the parking company is too large to benefit (under the current CARES Act provision). As a result, the employees’ payroll wouldn’t be covered by either an SBA loan or loan forgiveness.
Mid-Sized/Large Business Loan Programs:
1. For purposes of Treasury stabilization loan access for mid- to large-size parking industry business concerns, in Section 4003 (b)(1)(4) of the CARES Act, clearly state that other distressed businesses, like those in the parking industry, do not have to provide security for loans and forgiveness is available for such loans on certain conditions.
2. Section 4003(c)(3)(D)(i) requires borrowers to rehire 90 percent of their employees from February 1, 2020 (pre-pandemic) within four months of the lifting of a state of emergency. Congress should instead provide six months to return to those pre-COVID 19 workforce levels.
It will take considerable time for demand for industries like commercial parking to ramp back up and we should not be penalized for that with only a four-month grace period. Six months would be far preferable based on current projections.
NPA Resources for You
Visit WeAreParking.org for the latest information:
With best regards,
Christine Banning, IOM, CAE