District of Columbia Emergency Economic Assistance Temporary Act of 2001
Bill 14-368

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Chairman Linda Cropp
Councilmember Jack Evans
Councilmember David A. Catania
Councilmember Kathy Patterson
Councilmember Sharon Ambrose
Councilmember Sandy Allen
Councilmember Harold Brazil
Councilmember Kevin Chavous
Councilmember Adrian Fenty
Councilmember Carol Schwartz
Councilmember Phil Mendelson
Councilmember Jim Graham
Councilmember Vincent Orange

A BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA

To provide, on an emergency basis, financial assistance to certain companies based in the District of Columbia that are engaged in the surface transportation, tourism, restaurant, catering and/or lodging industries to preserve their continued viability.

BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this act may be cited as the "District of Columbia Emergency Economic Assistance Emergency Act of 2001".

Sec. 2. Definitions.

For purposes of this act, the term:

(1) "Chief Financial Officer" means the Chief Financial Officer of the District of Columbia.

(2) "District" means the District of Columbia.

(3) "Guaranteed loan" means a loan or other debt obligation incurred by a qualified company and funded by a lender pursuant to the terms of section 4, all or part of the principal of which and interest thereon are guaranteed by the District pursuant to this act.

(4) "Lender" means any non-Federal qualified institutional buyer as defined in SEC Rule 144A, 17 C.F.R. § 230.144A or any other commercial lending institution located in the District designated by the Chief Financial Officer with which the District has entered into an agreement pursuant to section 4(a).

(5) "Obligor" means a party primarily liable for payment of the principal of, or interest on, a loan or other debt obligation funded by a lender.

(6) "Qualified company" means a business entity which meets the criteria of section 3(a).

Sec. 3. Qualified companies.

(a) To be eligible to receive guaranteed loans under this act, a company shall meet the following criteria:

(1) The company shall be based in the District and have employees based in the District;

(2) The company shall be a District taxpayer;

(3) The company shall be engaged in the surface transportation, tourism, restaurant, catering, and/or lodging industries; and

(4) The company shall have suffered a loss of revenues as a result of the closing of Reagan National Airport and the terrorist attacks on September 11, 2001.

(b) It shall be the responsibility of the lender to:

(1) Review the applications of companies that apply for guaranteed loans under this act to ensure that they meet the requirements set forth in subsection (a) of this section;

(2) Verify that any applicants approved for guaranteed loans meet the criteria set forth in subsection (a) of this section; and

(3) Notify the Chief Financial Officer of any and all guaranteed loans approved and applications denied under this act 5 days after the first day of every month.

(c) The Chief Financial Officer shall report to the Council and the Mayor 15 days after the end of every quarter identifying the guaranteed loans that have been issued in the previous quarter.

Sec. 4. Guaranteed loans for qualified companies.

(a) The District shall enter into agreements with one or more lenders, on such terms and conditions as the Chief Financial Officer shall consider to be appropriate in his or her discretion, pursuant to which the District shall guarantee guaranteed loans to be issued by such lender to qualified companies.

(b) The total amount of obligations guaranteed by the District under this act shall not exceed $100 million.

(c) Lenders may enter into agreements with qualified companies to issue guaranteed loans pursuant to this act on such terms and conditions as lenders in consultation with the Chief Financial Officer shall determine; provided, that:

(1) The guaranteed loan is initially made after September 11, 2001 and before April 1, 2002;

(2) The final maturity date of the guaranteed loan shall not be more than 4 years after the date the guaranteed loan is initially made and the obligor shall have demonstrated, to the satisfaction of the lender, an ability to repay the guaranteed loan;

(3) The purpose of the guaranteed loan (whether in a term loan or a revolving credit facility) is to pay operating expenses of and /or provide working capital to the obligor;

(4) Guaranteed loans shall bear interest at a rate not to exceed a rate to be agreed upon between the lender and the Chief Financial Officer;

(5) Guaranteed loans shall not require the guarantee of the owners of the obligor or the payment of any compensation to the District or the lender for issuing the guaranteed loan other than:

(A) An up-front application fee and a loan fee payable to the lender upon issuance of the guaranteed loan in amounts to be agreed upon between the lender and the Chief Financial Officer;

(B) A loan guarantee fee payable to the District upon the issuance of the guaranteed loan in the amount of 2.5% of the maximum guaranteed amount; and

(6) The aggregate amount of the guaranteed loans made to any one obligor shall not exceed $5 million.

(c) Nothing in this act shall be construed to create an entitlement to a guaranteed loan.

Sec. 5. Criteria for issuance of guaranteed loans.

(a) Lenders shall solicit applications for guaranteed loans and shall issue guaranteed loans to qualified companies based on the merits of the company's application within 15 days after receipt of the application. In making a decision whether to issue a guaranteed loan, the lender shall consider:

(1) The impact of the closure of Reagan National Airport and the terrorist attacks on the revenues of the applicant;

(2) The economic impact of the closure of Reagan National Airport and the terrorist attacks on the applicant's employees located in the District;

(3) The extent to which the applicant's business is related to visitors coming into the District;

(4) The extent to which the applicant promotes and/or facilitates the bringing of visitors to the District; and

(5) The ability of the applicant to obtain financing without assistance from the District under this act.

(b) Qualified companies seeking guaranteed loans shall submit to the lender sworn financial statements or other appropriate data demonstrating profits, creditworthiness, and losses incurred since September 11, 2001, and during the 12 months preceding September 11, 2001. The Chief Financial Officer may audit the statements and may request any information that he or she considers necessary to conduct the audit.

Sec. 6. Funding of guaranteed loan program.

The Chief Financial Officer may use such sums as may be necessary to fulfill the District's obligations with respect to the guaranteed loans issued pursuant to this act, subject to the Chief Financial Officer's determination of the availability of such funds.

Sec. 7. The Council adopts the attached fiscal impact statement as the fiscal impact statement required by section 602(c)(3) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(3)).

Sec. 8. Effective date.

This act shall take effect following approval by the Mayor (or in the event of veto by the Mayor, action by the Council to override the veto), and remain in effect for no longer than 90 days, as provided for emergency acts of the Council of the District of Columbia in section 412(a) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 788; D.C. Official Code § 1-204.12(a)), and publication in the District of Columbia Register.

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MAYOR ANTHONY A. WILLIAMS
ECONOMIC ASSISTANCE ANNOUNCEMENT

WASHINGTON CONVENTION CENTER
OCTOBER 1, 2001

Two weeks later, America continues to mourn. Sorrow is overbearing, war is impending-and the search for answers goes on. But we must not let our sadness overcome our strength. We must not let the spirit of so many be overcome by the acts of so few.

Last Sunday, our flags returned to full staff. And with the ascension of our standard, we sent a clear message to the world: while our nation continues to grieve, it is time for America to get back to business. In the District, that means dealing with the impact to our economy. That impact is substantial.

Economic impacts of the attacks

Our restaurants are empty. Our hotel rooms aren't booked. Our cab drivers aren't taking people across the city. And our local shops and businesses axe spending their days doing inventory-instead of sales.

First, it's estimated that our economy will lose $750 million in the first six months of fiscal 2002. That's:

• 165 million in lost business from sectors other than tourism;
• and $585 million from tourism directly. Hotel revenue alone will be down 40% through December, and 20% through March.

Second, it's estimated that the city will lose $100 million in tax. revenue.

And fourth, it's also estimated that 24,000 will be lost-men and women with children to feed, college tuitions to fund-and homes to finance.

We're approaching $1 billion dollars in losses. And all these numbers assume that National Airport will reopen before November. If National remains dormant, the numbers will be far worse.

What I've already done

Last Monday, I signed a Mayor's Order to create five task forces: one each for tourism, small businesses, retail and commercial development, transportation and economic impact and consumer confidence. These groups will measure the financial impact of the terrorists' attacks-and recommend measures to counteract those impacts. I look forward to hearing their results this week.

Last Monday, I asked the Council for $1 million to promote tourism in the District. Coupled with $1 million in private investment, we will launch a national advertising campaign to bring people back to the Nation's Capital.

Last week, Congresswoman Norton, Linda Cropp and I met with senior officials at the White House. We stressed the urgent need to reopen National Airport and asked the Bush administration for federal aid.

I've been across the city - and across the nation on national news - promoting the Nation's Capitol-our neighborhoods, our monuments and the reasons that people should come to Washington, D.C.

Finally, I've been listening to our residents - and meeting with the families of the victims - to hear their concerns, their fears and their hopes for the future.

And if your job has been affected, I've taken immediate steps to help. I've directed the District's Department of Employment Services to:

• open a satellite center to take unemployment claims;
• waive the waiting period on those claims;
• establish a hotline for up-to-date information and assistance;
• and work with the U.S. Department of Labor to reduce - or defer - the unemployment tax-and provide resources for employees without benefits.

Today's announcement

But today, I'm pleased to announce a plan to combat the economic crisis in our city. It's a plan that we've designed in concert with Council. And it's a plan that we can take to the White House and Capitol Hill.

First, we're going to take our $1 billion in losses and asked President Bush to help us on the road to recovery. We'll use this aid to address:

• security concerns raised by the attack;
• and the economic impacts of the attack.

The money for security will cover the cost of:

• planning and training for catastrophic events;
• specialized equipment;
• state-of-the-art communications and coordination infrastructure;
• transportation and traffic management tools;
• and facility enhancements.

• aid for small businesses;
• assistance for displaced workers;
• and loans to help compensate for lost revenues.

We're not just asking for the good of the District. Every American wants their capital city to thrive. No American wants to see the terrorists derail their capital city's economy.

Second, the Council and I have drafted emergency legislation to move 100 million from the city's emergency reserves to banks across the District loan money available to help District businesses keep workers on, keep buying supplies, keep their marketing going-and keep their business alive.

I'd like to compliment the Council for moving so quickly, especially Jack Evans and David Catania. They understand - as we all do - that local businesses make up 90% of the business sector in this city. They contribute $250 billion a year to our city. They are the foundation of the District's economy. And we're not about to let them falter.

Reopen National Airport 

Ladies and gentlemen, all of this hinges on the reopening of Regan National Airport. Planes and people must be landing at and leaving Reagan National.

This weekend, Defense Secretary Donald Rumsfeld said that the security concerns at National Airport could be taken care of "on the ground-not in the air."

Ladies and gentlemen, we can make the personnel and procedural changes necessary at National Airport. We can make them quickly. And we can make National Safe. We must not hunker down in fear. It's time to unlock the door to our Capital City.

Challenge to audience

September 11th was an unthinkable tragedy. But from tragedy grows triumph. The terrorists thought they could break our spirit. They were wrong.

There could be no greater tribute to those who were lost than for us to return to the America they loved.

Let us follow the example set by our Council and this administration — and work together to turn economic uncertainty to economic recovery.

Let us follow the example of the governors who visited our city today — by visiting our museums, eating in our restaurants and spending in our shops.

And let us continue this newfound sense of patriotism that is pulsing through the collective heart of our country: flags blowing above rooftops, our country's hymns are being sung, and children wearing t-shirts that proudly say, "U.S.A."

Thank you.

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Council of the District of Columbia

David A. Catania
Councilmember, At-Large

PRESS RELEASE

CATANIA & EVANS, CHAIRMAN CROPP & MAYOR WILLIAMS, ANNOUNCE $100 MILLION LOAN AND LOAN GUARANTEE PACKAGE FOR DISTRICT BUSINESSES

Emergency Assistance will be available for Hospitality Businesses Hurt by September 11 Tragedy

In emergency legislation that the Council will consider on October 2, the "District of Columbia Emergency Assistance Emergency Act of 2001" proposes that qualified companies would be able to receive a low interest loan of up to $1 million or a loan guarantee of up to $5 million (or $4 million if they have receive a $1 million loan). Qualified companies must be District-based and be engaged in the restaurant, catering, lodging or surface transportation industries.

"It is during times such as these that our government must step in and provide emergency assistance to its people," said Councilmember Catania. "It is our hope that these loans and loan guarantees will lend a helping hand to keep countless District businesses afloat during these difficult times and keep District employees in their jobs."

"Many of our hotels, restaurants, and related businesses are experiencing sharp declines in revenueindustry experts place it at $10 million daily," said Councilmember Evans. "Rather than see wholesale closings and bankruptcies, we believe bridge loans are the best solution to helping local entrepreneurs get through this crisis."

The loans and loan guarantees available under the Emergency Assistance Program shall be for no longer than three years. The interest rate for the loans shall not be higher than 5 percent. An upfront application fee of not more than $2,000 may be charged for the loan guarantees, and the loan guarantee fee amount shall not be more than 2.5 percent of the maximum guaranteed amount.

The total amount of direct loans under the Emergency Assistance Program shall not exceed $50 million and the total amount of obligations guaranteed by the loan guarantees shall not exceed $50 million.

Under the proposed legislation, the District Chief Financial Officer would administer the Emergency Assistance Program and make sure the companies applying for the loans and loan guarantees meet the necessary requirements. The CFO would also certify the amount the company has been impacted by the terrorist attacks and by the closure of Reagan National Airport. The CFO would begin soliciting applications immediately and issue loans and loan guarantees within 15 days after they have received an application.