Senate Bill Highlights

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Full text of the Senate bill is here: https://assets.documentcloud.org/documents/6819239/FINAL-FINAL-CARES-ACT.pdf

There are two forms of relief -- Loan Guarantees (Section 4003 to 4010) and grants (Section 4111 onward)

 

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4003 -- How Much

(lots of legalese snipped)

(b) LOANS, LOAN GUARANTEES, AND OTHER INVESTMENTS.—Loans, loan guarantees, and other investments made pursuant to subsection (a) shall be made available as follows:
(1) Not more than $25,000,000,000 shall be available to make loans and loan guarantees for passenger air carriers, eligible businesses that are certified under part 145 of title 14, Code of Federal Regulations, and approved to perform inspection, repair, replace, or overhaul services, and ticket agents (as defined in section 40102 of title 49, United 12 States Code).
(2) Not more than $4,000,000,000 shall be available to make loans and loan guarantees for cargo air carriers.

(more legalese snipped, moving on to the conditions)

(D) the duration of the loan or loan guarantee is as short as practicable and in any case not longer than 5 years;
(E) the agreement provides that, until the date 12 months after the date the loan or loan guarantee is no longer outstanding, neither the eligible business nor any affiliate of the eligible business may purchase an equity security that is listed on a national securities exchange of the eligible business or any parent company of the eligible business, except to the extent required under a contractual obligation in effect as of the date of enactment of this Act;
(F) the agreement provides that, until the date 12 months after the date the loan or loan guarantee is no longer outstanding, the eligible business shall not pay dividends or make other capital distributions with respect to the common stock of the eligible business;
(G) the agreement provides that, until September 30, 2020, the eligible business shall maintain its employment levels as of March 24, 2020, to the extent practicable, and in any case shall not reduce its employment levels by more than 10 percent from the levels on such date;

 

[eolesen]

Loans have a bunch of provisions which mirror the conditions on Grants (i.e. executive compensation, stock buybacks, and continuation of service).

Sections 4004 and 4005 pretty much mirror 4114 and 4116, but the latter are easier to follow if you want all the details...

 

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How Much Payroll Assistance (not in the form of loans):

SEC. 4112. PANDEMIC RELIEF FOR AVIATION WORKERS.

(a) FINANCIAL ASSISTANCE FOR EMPLOYEE WAGES, SALARIES, AND BENEFITS.—Notwithstanding any other provision of law, to preserve aviation jobs and compensate air carrier industry workers, the Secretary shall provide financial assistance that shall exclusively be used for the continuation of payment of employee wages, salaries, and benefits to—

(1) passenger air carriers, in an aggregate amount up to $25,000,000,000;
(2) cargo air carriers, in the aggregate amount 14 up to $4,000,000,000; and
(3) contractors, in an aggregate amount up to 16 $3,000,000,000.

(b) ADMINISTRATIVE EXPENSES.—Notwithstanding any other provision of law, the Secretary, may use $100,000,000 of the funds made available under section 4120(a) for costs and administrative expenses associated with providing financial assistance under this subtitle.

 

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Section 4114 -- No layoffs. no pay cuts, no stock buybacks

(a) IN GENERAL.—To be eligible for financial assistance under this subtitle, an air carrier or contractor shall enter into an agreement with the Secretary, or otherwise certify in such form and manner as the Secretary shall prescribe, that the air carrier or contractor shall—
(1) refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020;
(2) through September 30, 2021, ensure that neither the air carrier or contractor nor any affiliate of the air carrier or contractor may, in any transaction, purchase an equity security of the air carrier or contractor or the parent company of the air carrier or contractor that is listed on a national securities exchange;
(3) through September 30, 2021, ensure that the air carrier or contractor shall not pay dividends, or make other capital distributions, with respect to the common stock (or equivalent interest) of the air carrier or contractor; and
(4) meet the requirements of sections 4115 and 9 4116.

(b) DEPARTMENT OF TRANSPORTATION AUTHORITY TO CONDITION ASSISTANCE ON CONTINUATION OF SERVICE.—
(1) IN GENERAL.—The Secretary of Transportation is authorized to require, to the extent reasonable and practicable, an air carrier provided financial assistance under this subtitle to maintain scheduled air transportation service, as the Secretary of Transportation deems necessary, to ensure services to any point served by that carrier before March 1, 20 2020.
(2) REQUIRED CONSIDERATIONS.—When considering whether to exercise the authority provided by this section, the Secretary of Transportation shall take into consideration the air transportation needs of small and remote communities and the need to maintain well-functioning health care supply chains, including medical devices and supplies, and pharmaceutical supply chains.
(3) SUNSET.—The authority provided under this subsection shall terminate on March 1, 2022, and any requirements issued by the Secretary of Transportation under this subsection shall cease to apply after that date.

 

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Section 4115 -- No gun to labor's head

SEC. 4115. PROTECTION OF COLLECTIVE BARGAINING AGREEMENT.
(a) IN GENERAL.—Neither the Secretary, nor any other actor, department, or agency of the Federal Government, shall condition the issuance of financial assistance under this subtitle on an air carrier’s or contractor’s implementation of measures to enter into negotiations with the certified bargaining representative of a craft or class of employees of the air carrier or contractor under the Railway Labor Act (45 U.S.C. 151 et seq.) or the National Labor Relations Act (29 U.S.C. 151 et seq.), regarding pay or other terms and conditions of employment.
(b) PERIOD OF EFFECT.—With respect to an air carrier or contractor to which financial assistance is provided under this subtitle, this section shall be in effect with respect to the air carrier or contractor beginning on the date on which the air carrier or contractor is first issued such financial assistance and ending on September 30, 2020.

 

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Section 4116 - No Golden Parachutes or Exec Bonuses

SEC. 4116. LIMITATION ON CERTAIN EMPLOYEE COMPENSATION.
(a) IN GENERAL.—The Secretary may only provide financial assistance under this subtitle to an air carrier or contractor after such carrier or contractor enters into an agreement with the Secretary which provides that, during the 2-year period beginning March 24, 2020, and ending March 24, 2022, no officer or employee of the air carrier or contractor whose total compensation exceeded $425,000 in calendar year 2019 (other than an employee whose compensation is determined through an existing collective bargaining agreement entered into prior to enactment of this Act)—
(1) will receive from the air carrier or contractor total compensation which exceeds, during any 12 consecutive months of such 2-year period, the total compensation received by the officer or employee from the air carrier or contractor in calendar year 2019;
(2) will receive from the air carrier or contractor severance pay or other benefits upon termination of employment with the air carrier or contractor which exceeds twice the maximum total compensation received by the officer or employee from the air carrier or contractor in calendar year 2019; and
(3) no officer or employee of the eligible business whose total compensation exceeded $3,000,000 in calendar year 2019 may receive during any 12 consecutive months of such period total compensation in excess of the sum of—
(A) $3,000,000; and
(B) 50 percent of the excess over $3,000,000 of the total compensation received by the officer or employee from the eligible business in calendar year 2019.
(b) TOTAL COMPENSATION DEFINED.—In this section, the term ‘‘total compensation’’ includes salary, bonuses, awards of stock, and other financial benefits provided by an air carrier or contractor to an officer or employee of the air carrier or contractor.

 

[NewHampshire Black Bears]

Ahhh, The M O R O N is a ' SOCIALIST ' !!!!!!!!!!!

Who in HELLL would've ever Guessed ??

 

[KCFlyer]

Section 4116 - No Golden Parachutes or Exec Bonuses

SEC. 4116. LIMITATION ON CERTAIN EMPLOYEE COMPENSATION.
(a) IN GENERAL.—The Secretary may only provide financial assistance under this subtitle to an air carrier or contractor after such carrier or contractor enters into an agreement with the Secretary which provides that, during the 2-year period beginning March 24, 2020, and ending March 24, 2022, no officer or employee of the air carrier or contractor whose total compensation exceeded $425,000 in calendar year 2019 (other than an employee whose compensation is determined through an existing collective bargaining agreement entered into prior to enactment of this Act)—
(1) will receive from the air carrier or contractor total compensation which exceeds, during any 12 consecutive months of such 2-year period, the total compensation received by the officer or employee from the air carrier or contractor in calendar year 2019;
(2) will receive from the air carrier or contractor severance pay or other benefits upon termination of employment with the air carrier or contractor which exceeds twice the maximum total compensation received by the officer or employee from the air carrier or contractor in calendar year 2019; and
(3) no officer or employee of the eligible business whose total compensation exceeded $3,000,000 in calendar year 2019 may receive during any 12 consecutive months of such period total compensation in excess of the sum of—
(A) $3,000,000; and
(B) 50 percent of the excess over $3,000,000 of the total compensation received by the officer or employee from the eligible business in calendar year 2019.
(b) TOTAL COMPENSATION DEFINED.—In this section, the term ‘‘total compensation’’ includes salary, bonuses, awards of stock, and other financial benefits provided by an air carrier or contractor to an officer or employee of the air carrier or contractor.

What about repricing stock options? AA was trading around $40 when the last batch of options was issued. If they can reprice ro $15, execs stand to make a KILLING on them when the stock moves back up to $30. T'aint right.

 

[Kev3188]

Thank you for sorting through/posting all of this, E!

 

[eolesen]

Ahhh, The M O R O N is a ' SOCIALIST ' !!!!!!!!!!!

I don't normally bother reading NHBB's posts anymore, but I'll put on my isolation suit and PPE for a moment...

Unlike Socialists who simply seize property at gunpoint, when the government takes over your property in the US, you get compensation.

Airlines were prohibited from engaging in legal commerce by various government orders/regulations, and this package makes them whole.

It's no different than NYS taking over a hotel and converting it to a hospital -- the hotel gets paid for the use of their property. That's why they've focused on setting up temporary hospitals in public university dorm rooms and municipal/state owned facilities like Javits vs taking over Madison Square Garden.

 

[KCFlyer]

I don't normally bother reading NHBB's posts anymore, but I'll put on my isolation suit and PPE for a moment...

Unlike Socialists who simply seize property at gunpoint, when the government takes over your property in the US, you get compensation.

Airlines were prohibited from engaging in legal commerce by various government orders/regulations, and this package makes them whole.

It's no different than NYS taking over a hotel and converting it to a hospital -- the hotel gets paid for the use of their property. That's why they've focused on setting up temporary hospitals in public university dorm rooms and municipal/state owned facilities like Javits vs taking over Madison Square Garden.

I would have still like to seen something about repricing stock options. It's just not right that options that were awarded with a value of $40 get repriced to $15 and reward the exec BETTER than had the stock never nosedived. Employees have to make do with what they have, execs should be no different.

 

[delldude]

Ahhh, The M O R O N is a ' SOCIALIST ' !!!!!!!!!!!

Who in HELLL would've ever Guessed ??

https://pbs.twimg.com/media/ETYWUxmWkAAq3uo.jpg