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<br />7
<br />COVID-19 PANDEMIC
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<br />The spread of the novel strain of coronavirus called SARS-CoV-2 that causes the disease
<br />known as COVID-19 (“COVID-19”) has had an adverse effect on, among other things, the world
<br />economy, global supply chain, international travel and a number of travel-related industries. The
<br />COVID-19 pandemic has also negatively affected travel, commerce, asset values and financial
<br />markets globally, and is widely expected to continue to negatively affect economic output
<br />worldwide and within the State and service areas of the Members. Unemployment in the United
<br />States dramatically increased as a result of the COVID-19 pandemic. Federal and state
<br />governments (including California) have enacted legislation and have taken executive actions
<br />designed to mitigate the negative public health and economic impacts of the COVID-19 pandemic.
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<br />Federal Response. The President’s declaration of a national emergency on March 13,
<br />2020, made available more than $50 billion in federal resources to combat the spread of the virus.
<br />A multi-billion-dollar relief package was signed into law by the President on March 18, 2020,
<br />providing for Medicaid expansion, unemployment benefits and paid emergency leave during the
<br />crisis. In addition, the Federal Reserve lowered its benchmark interest rate to nearly zero,
<br />introduced a large bond-buying program and established emergency lending programs to banks
<br />and money market mutual funds.
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<br />On March 27, 2020, the United States Congress passed a $2 trillion relief package,
<br />referred to as the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The
<br />package includes direct payments to taxpayers, jobless benefits, assistance to hospitals and
<br />healthcare systems, $367 billion for loans to small businesses, a $500 billion fund to assist
<br />distressed large businesses, including approximately $30 billion to provide emergency grants to
<br />educational institutions and local educational agencies.
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<br />On April 9, 2020, the Federal Reserve took additional actions to provide up to $2.3 trillion
<br />in loans to support the economy, including supplying liquidity to participating financial institutions
<br />in the Small Business Administration’s Paycheck Protection Program, purchasing up to $600
<br />billion in loans through the Main Street Lending Program and offering up to $500 billion in lending
<br />to states and municipalities.
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<br />On April 24, 2020, an additional $484 billion federal aid package was signed into law to
<br />provide additional funding for distressed small businesses and to provide funds for hospitals and
<br />COVID-19 testing. The legislation added $310 billion to the Paycheck Protection Program,
<br />increased the small business emergency grant and loan program by $60 billion, and directed $75
<br />billion to hospitals and $25 billion to a new COVID-19 testing program.
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<br />On March 11, 2021, the President signed a $1.9 trillion stimulus package (the “American
<br />Rescue Package”) into law, authorizing a third round of one-time stimulus payments for qualifying
<br />Americans, extending additional unemployment benefits, and providing aid to cities and states
<br />facing budget shortfalls.
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<br />State Response. At the State level, on March 15, 2020, the Governor ordered the closing
<br />of California bars and nightclubs, the cancellation of gatherings of more than 250 and confirmed
<br />continued funding for school districts that close under certain conditions. On March 16, 2020, the
<br />State legislature passed $1.1 billion in general purpose spending authority for emergency funds
<br />to respond to the Coronavirus crisis. On March 19, 2020, the Governor issued Executive Order
<br />N-33-20, a blanket shelter-in-place order, ordering all California residents to stay home except for
<br />certain necessities and other essential purposes. On August 28, 2020, the Governor released a
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