ARKANSAS DEPARTMENT OF PARKS, HERITAGE AND
TOURISM
ARKANSAS DEPARTMENT OF COMMERCE, ARKANSAS ECONOMIC
DEVELOPMENT COMMISSION
ARKANSAS DEPARTMENT OF FINANCE AND
ADMINISTRATION
BUSINESS INTERUPTION GRANT PROGRAM FOR THE
ARKANSAS SERVICE AND HOSPITALITY INDUSTRIES EMERGENCY
RULES
STATUTORY
AUTHORITY
Governor Asa Hutchinson issued Executive Order 20-03 on March
11, 2020 declaring a public health emergency due to the Coronavirus 2019
(COVID-19) pandemic and directing the Arkansas Department of Health (ADH) to
adopt necessary public health measures for mitigation of the public health
emergency. These measures resulted in the temporary closure of, as well as
reduced operating capacity for, certain Arkansas businesses. While a variety of
economic assistance programs through federal and state programs have been
available to affected businesses, certain Arkansas businesses in the personal
care, tourism, travel, recreation, and hospitality industries require
additional economic assistance to help maintain their economic viability and
their vital support for the overall Arkansas economy.
Based on the forgoing economic development need, and pursuant
to the authority granted under Ark. Code Ann. §
15-4-209(a)(l)
and §
15-4-209(b)(5),
the Arkansas Economic Development Commission (AEDC) is promulgating this
emergency rule in collaboration with the Arkansas Department of Parks, Heritage
and Tourism (ADPHT) and the Arkansas Department of Finance and Administration
(DFA).
PROGRAM OBJECTIVE
The program will provide a direct grant opportunity to Arkansas
small businesses having 250, or fewer, full time employees located in Arkansas
for expenses associated with COVID-19 mitigation and for certain listed
business interruption expenses due directly to local, state, or federal
government COVID-19 directives and arising through no fault of the business.
The grant program will provide first-time, or otherwise supplemental, financial
assistance for certain eligible cash business expenses incurred as a direct
result of COVD-19 mitigation or for certain listed ordinary business expenses
incurred by an eligible business as a direct result of a government-mandated
business closure or restriction. The program will utilize funds provided to the
state of Arkansas through the federal CARES Act.
DEFINITIONS
"Applicant" for purposes of this
program, is defined as an Eligible Business or a representative of an Eligible
Business that completes and submits an Application for the program.
"Application" for purposes of this
grant program, is defined as the online application form which must be
completed in its entirety with all required attachments by an Eligible Business
to be considered for this program.
"Business Interruption" for purposes
of this grant program, is defined as disruptions of regular business operations
resulting from required or voluntary closure related to or mitigation measures
taken in response to COVID-19 which occurred on March 1, 2020 through September
30, 2020.
"Consultants" for purposes of this
grant program, are defined as a private company engaged by the Arkansas
Department of Parks, Heritage and Tourism, Arkansas Department of Commerce's
Arkansas Economic Development Commission or the Arkansas Department of Finance
and Administration for the purpose of developing an online grant application
including the transaction administration, design, development, data access, and
program guidance to the above referenced state agencies.
"CARES Act" for purposes of this grant
program, means the federal Coronavirus Aid, Relief, and Economic Security Act
(P.L.
116-136).
"COVID-19" for purposes of this grant
program, is defined as the Coronavirus disease of 2019 and the resulting
pandemic.
"Economic Uncertainty" for purposes of
this grant program, economic uncertainty is defined as conditions, due to the
impact of COVID-19, where the reasonable financial basis upon which the
continuing long-term operations of the business are uncertain if grant program
assistance is not provided.
"Eligible Business" under this grant
program, means a for-profit corporation, partnership, sole proprietorship
(including independent contractors), limited liability company, joint venture
or non-profit 501(c)(3) organization that meets the following criteria:
A. Operates primarily within the Arkansas
personal care, tourism, travel, recreation, hospitality or related
industries;
B. Was established on
or before March 1, 2020;
C. Has an
established tax identification number in the state of Arkansas;
D. Current Economic Uncertainty makes this
assistance necessary to support the ongoing operations of the
Applicant;
E. If formally
organized, is incorporated under the laws of Arkansas or is registered to do
business in Arkansas with the Arkansas Secretary of State and, in any case, is
listed as being in "Good Standing." If not incorporated, a
business/professional license, sales tax permit, utility bill or bank statement
in the name of the business is required as supporting documentation that the
business is a bona fide business;
F. Is headquartered in Arkansas or has
employees working in Arkansas;
G.
Employed an average of two hundred fifty (250), or fewer, Full Time Arkansas
Employees per Eligible Business as of September 30, 2020;
H. Must either have:
a. Customers and/or employees physically
coming to their Arkansas business premises; or
b. Must conduct business on customer premises
in Arkansas;
I. Is not
under a bankruptcy order and does not have a pending bankruptcy filing at the
time the Application is submitted. An Applicant that files for bankruptcy while
the Application is pending shall notify the grant program and withdraw its
Application under the program.
J.
Does not presently have any tax liens with respect to any unpaid tax owing to
the State of Arkansas except for those businesses that have applied for and
received a repayment plan from the State of Arkansas and are not in default of
that payment plan; and
K. Eligible
Businesses shall not include, without limitation, the following:
a. Government entities and quasi-governmental
entities such as Government-owned nonprofits; and
b. Annual and seasonal indoor and outdoor
festivals such as county fairs and carnivals
"Eligible Expenses" under this grant
program are defined as costs incurred by an Eligible Business, as defined in
this rule, due to public health measures or Business Interruption. These
expenses may consist of the following:
A. Business expenses incurred as a direct
result of COVD-19 mitigation; or
B.
Certain ordinary business expenses incurred by an Eligible Business as a direct
result of a government mandated business closure or restriction due to
COVID-19; or
C. Business expenses
incurred due to diminished capacity of operations that are likely to continue
until health conditions allow functioning at full capacity.
Eligible Expenses covered under this grant include the
following:
A. Personal Protective
Equipment (PPE) and other related expenses for purchases between March 1, 2020
and September 30, 2020 reasonably necessary to comply with Centers for Disease
Control and Prevention (CDC) guidelines or Arkansas Department of Health (ADH)
guidelines with proof of purchase via a receipt, paid invoice, or payroll
record. See Exhibit A for pre-approved list.
B. Rent or mortgage interest payments on real
property incurred between March 1, 2020 and September 30, 2020 with a proof of
payment via receipt or cancelled check.
C. Other expenses reasonably necessary to
keep the Eligible Business operational, and to safely meet local, state, and
federal COVID-19 mitigation requirement with proof of payment via receipt, paid
invoice, cancelled check, or proof of incurred expense subject to an
established payment plan or other written payment agreement, without
limitation:
a. Utility expenses (e.g., water,
sewer, gas, electricity)
b.
Telephone and internet service (and other costs to redeploy operations to
telework)
c. Transportation
costs
d. Operating and professional
licenses
e. Franchise
fees
f. Business insurance (e.g.,
business general liability insurance, business auto insurance)
g. Maintenance and sanitation
expenses
h. Remarketing the
resumption of activities and steps taken to ensure a safe experience
i. Payroll costs and expenses
j. Expenses associated with COVID-19
mitigation by workforce realignment (e.g., staggered shifts or staggered office
days, etc.)
k. Technology costs
necessary to shift to virtual operations (e.g., virtual meetings, e-commerce
sales, telework etc.)
l.
Professional services procured (e.g., design & construction) of work
environments necessary to mitigate the threat of COVID-19 (e.g., installation
of HVAC filtration systems, partition installation, redesign of workspaces,
etc.)
m. Interest on any business
debts that were incurred from March 1, 2020 to September 30, 2020
D. Expenses that are not
considered Eligible Expenses for reimbursement under this grant program
include, without limitation:
a.
Taxes
b. Non-cash expenses (e.g.,
depreciation expense)
c. Lost
profits
d. Lost Revenue
e. Entertainment and lobbying
expenses
f. Goods and services not
used for business purposes
g.
Damages that have been, or are expected to be, covered by insurance
h. Costs that have been, or are expected to
be, reimbursed by any other local, state, or federal government program or by
any private programs
i. Value of
any products or services that were donated to, or by, the Applicant
j. Bonuses for highly compensated employees
earning in excess of $100,000 annually, other than that payable for hazard pay
or overtime pursuant to COVID-19 mitigation
k. Severance pay and benefits
l. Payments to shareholders except for
regular compensation payments consistent with the historical practices of
business.
m. Legal expenses or
settlements, fines, and penalties
n. Other expenses as may be deemed ineligible
under guidance, guidelines, rules, regulations, or other criteria, all as may
be amended from time to time from the U.S. Department of Treasury regarding the
use of funds appropriated under the CARES Act
o. Other expenses as may be deemed ineligible
in accordance with program rules in the sole combined judgment of the grant
program's Review Committee
E. All Eligible Expenses must be utilized to
cover expenses incurred by the Eligible Business in the state of
Arkansas.
F. Any grant award
received must be used in Arkansas.
G. To the extent a business has received, or
may receive, insurance proceeds covering any of these Eligible Expenses under a
Business Interruption insurance policy, such payments, or expected payments,
must be deducted from the Eligible Expenses claimed by the Applicant.
"Full Time Arkansas Employee" for
purposes of this grant program, is defined as an employee of the business that
works an average of at least 30 hours per week at a business location in
Arkansas.
"Minority Business Enterprise" for
purposes of this grant program, is defined as a business where at least 51
percent of the business owners are a minority as defined in Ark. Code Ann.
§
15-4-303
(2).
"Review Committee" for purposes of
this grant program, is defined as the Secretaries from the Arkansas Department
of Parks, Heritage and Tourism, Arkansas Department of Commerce's Arkansas
Economic Development Commission, and the Arkansas Department of Finance and
Administration plus one additional designee from each Department who will make
the final grant decisions based on quantitative and qualitative data prepared
by the Consultants.
" Women-owned Business Enterprise" for
purposes of this grant program, is defined as a business where at least 51
percent of the business owners are women.
APPLICATION FOR GRANT
FUNDS
A. Required
Application documentation includes, without limitation.
1. Driver's license of authorized business
representative completing the Application;
2. Completed and signed W9 for the Eligible
Business;
3. Taxpayer
identification number of the business
4. Certificate of good standing from the
Arkansas Secretary of State (dated within last 30 days) or other documentation
for unincorporated businesses as noted above; and
5. Documentation of sales tax paid to the
state of Arkansas by Eligible Business for March 1 through September 30 of the
years 2019 and 2020. The online Application requires the Eligible Business to
authorize the Arkansas Department of Finance and Administration to release
those tax records for review for purposes of this Application. For new Eligible
Businesses that existed prior to March 1, 2020, but do not have requested 2019
sales tax data, other financial information may be requested and reviewed such
as remittance of sales tax per month since in operation will be considered in
determining economic impact. If the business does not collect sales tax, other
data may be requested by the Review Committee for consideration of grant
awards.
B. Eligible
Businesses will be asked to provide North American Industry Classification
System (NAICS) code in the online Application. This information will assist in
the analysis and review of the grant Applications.
C. Only one Application per Eligible Business
is allowed under this grant program.
D. If the Applicant has previously received
any local, state, or federal government assistance or any private or charitable
assistance for these types of expenses, such amounts must be deducted from the
Applicant's claim because the eligible expense for these items is strictly
limited to unreimbursed amounts.
E.
This application period will be open for ten calendar days and notification of
the grant program will be advertised statewide in advance and during the
application period.
F. This is not
a first come, first served grant program. Once the grant Application deadline
has passed, available funds will be awarded to approved Applicants in
accordance with these rules.
G.
Once the grant Application deadline has passed, available funds will be
apportioned to approved Applicants on an equitable basis.
H. All Applications will be accepted online.
Paper Applications cannot be accepted, and Applications via telephone cannot be
accepted.
I. As a part of the
Application submission process, all Applicants must electronically agree to be
bound by all of the legal terms and conditions of the grant program.
J. All grant fund recipients must enter into
a written grant agreement contract with the Arkansas Economic Development
Commission (AEDC) that will set forth all the legal terms and conditions of the
grant award.
K. Applicants will be
required to certify, under penalty of perjury and other civil and criminal
penalties, that the information contained in their Application package is
truthful, complete, and accurate.
L. Applications will only be considered when
a complete Application is submitted with all required attachments. Completeness
of an Application shall be determined in the sole discretion of AEDC or its
designee.
GRANT AWARDS
A. Grant amounts will be based on criteria
established by the Review Committee that will consider the total amount of
eligible reimbursable expenses, overall impact of COVID-19 to the industry of
the business, and the differential in the sales tax paid by the business during
the time periods of March 1 through September 30 in 2019 and 2020.
B. One metric that will be considered by the
Review Committee to determine economic impact to the Eligible Business will be
sales tax data. For Eligible Businesses that do not collect and remit sales
taxes or Eligible Businesses that have been in business as of March 1, 2020 for
less than one year, other data provided by the Applicant such as remittance of
sales tax per month since in operation will be considered in determining
economic impact. If the business does not collect sales tax, other data may be
requested by the committee for consideration of grant awards.
C. Grant awards will not exceed $250,000 per
Application.
D. Grant claims and
awards are non-transferable to other individuals or entities and subject to
state and federal tax laws.
ADDITIONAL CONDITIONS FOR THE GRANT
PROGRAM
A. In the
event an audit reveals an improper payment was claimed and paid, a claw back
provision will be triggered under which payment granted to a recipient must be
promptly returned, either in full or in part, to the State of
Arkansas.
B. This program is
contingent upon the availability of funds as directed by the CARES Act Steering
Committee of Arkansas as federal funds are appropriated by the Arkansas General
Assembly to the Arkansas Department of Commerce's AEDC.
C. Applicability of the Arkansas Freedom of
Information Act. AEDC is a public entity of the State of Arkansas and is
subject to the requirements of the Arkansas Freedom of Information Act, Ark.
Code Ann. §
25-19-101 et. seq. (FOIA). AEDC
must disclose to a FOIA requestor information concerning the Applicant when, in
the opinion of AEDCs legal counsel, AEDC is legally required to disclose the
requested information. Such may include, without limitation, any financial
information, operational information, franchise fees, and vendor information.
When submitting claims under this grant program, Applicants should carefully
consider the risks associated with the information they provide becoming public
information and may, accordingly, opt to claim reimbursement for only some
certain Eligible Expenses.
D. The
threshold goal for this grant is to direct at least 15 percent of the funds to
Minority Business Enterprises and Women-owned Business Enterprises. If there
are not sufficient Applications from Minority Business Enterprises and
Women-owned Business Enterprises, the surplus funds will be directed to the
general fund of the grant for distribution.
E. Not all who apply for a grant will be
approved. The information provided in this document does not create any
obligation by any department or agency of the state of Arkansas to provide any
grant funding to any Applicant.
F.
All Applicants will be required to disclose information required by Executive
Order 98-04 and the rules related thereto. Grant decisions may be affected by
these types of disclosures.
G. The
grant program is a discretionary incentive program offered by a joint program
administered through the ADPHT, Arkansas Department of Commerce's AEDC, and
DFA.
EXHIBIT A ITEMS APPROVED BY THE ARKANSAS CARES ACT
STEERING COMMITTEE FOR PURCHASE
* N95 Masks
* KN95 Masks
* Surgical Masks
* Cloth Masks
* Isolation Gowns
* Gloves
* Face Shields
* Goggles/Safety Glasses
* No Touch Thermometers
* Forehead Thermometers
* Ear Thermometers
* Thermometer Covers
* Wristbands (paper)
* Batteries
* Basic First Aid Kit
* Rubbing Alcohol
* Hand Sanitizer
* Siphon Pump (for Hand Sanitizer in drum or bucket)
* Plastic Bottles (for Hand Sanitizer in drum or bucket)
* Sanitizing Sprays
* Sanitizing Cleaners
* Sanitizing Soaps
* Sanitizing Wipes
* Bleach
* Mop Bucket
* Mop Handle
* Mop
* Trash Cans with Lids
* Garbage Bags
* Clear Shower Curtain (used to separate customer from
employee)
* Shower Curtain Rods (used to separate customer from
employee)
