(Revised November 9, 2020)
Question: When will the application process take place?
The CAFB Fund Committee will accept and review applications beginning 8/17/2020 and ending 8/31/2020 at 5:00 p.m. CST. Applicants should be notified regarding their application status no earlier than 9/15/2020. Given the limited time available to disburse and spend the funds under the CARES Act, all decisions of the CAFB Fund Committee are final and not subject to appeal.
Question: May an applicant submit more than one application during the application window?
No. The program is limited to one application per business. If approved, however, the applicant will be able to submit an unlimited number of Requests for Funding (RFFs) in order to request reimbursements for their eligible expenses.
Question: What are the requirements to apply?
Applicants must be a Tennessee entity (i.e., agricultural, food, or forestry business, or nonprofit agricultural entity in Tennessee) or have a project based in Tennessee. Applicants must address the unique problems created by COVID-19 and demonstrate that their application meets one of the four relief categories (Business Disruption, Pandemic Response, Supply Chain Enhancement, and Increased Meat Processing Capacity). Once an application is approved, funding will be disbursed on a reimbursement basis. Applicants must submit documentation proving business disruption and/or receipts of COVID-19 related expenses prior to reimbursement.
Question: How will recipients be chosen to receive funding from the Coronavirus Agricultural and Forestry Business Fund?
Successful grant recipients must demonstrate business disruption impact or costs associated with COVID-19 responses, from March 1, 2020 to October 31, 2020. Please note, this is a priority program designed by the Department of Agriculture in conjunction with HORNE LLP. Priority will be given to entities that have yet to receive prior COVID-related funding, have been adversely affected by COVID-19, are smaller business, and have high levels of Tennessee inputs. Additionally, priority will be given to those businesses who are more readily able to meet the supply chain enhancement and meat processing demands that have resulted due to COVID-19. Publicly-traded companies can apply for this program but may have lower priority in the CAFB Fund.
Question: May a business who has already received federal funds related to COVID-19 apply for this program?
Yes. Businesses may still apply that have received COVID-19 related federal assistance; however, those businesses will be given lower priority of funding in this program so as to ensure that organizations who have yet to receive any federal assistance due to COVID-19 are assisted first.
Question: Is an in-home business eligible?
All agricultural-related businesses are eligible to apply, but all recipients of funding must have a tax ID number and provide the requested W-9 form and associated business information through the link available on the CAMS Website.
Question: Will I need to pay this funding back?
No, so long as the funds are used for the purpose applied for and in compliance with the Terms and Conditions of this program. This is financial assistance from the State of Tennessee’s share of the Coronavirus Relief Fund (“CRF”) and not a loan.
Question: How will recipients receive payment?
Payment will be on a reimbursement basis. Once applicants are notified that funds have been allocated, they will receive access to the TN CAMS system to submit a Request For Funding (“RFF”) and associated documentation. Upon review and approval of each RFF, funds will be transferred to the recipient. Funds will be transferred via paper checks mailed to the recipient.
Question: Can recipients use the funds to reimburse eligible costs incurred prior to this program?
Grant funds may be used to cover eligible costs incurred from March 1, 2020 – December 30, 2020. If eligible costs were incurred prior to this program, they may be covered by the recipient’s allocated funds as long as they were not incurred before March 1, 2020 and the required supporting documentation was maintained. Note that all Requests for Funding must be submitted by November 10, 2020.
Question: Are recipients required to use other federal funds or seek reimbursement under other federal programs before using CAFB payments to satisfy eligible expenses?
No. Recipients may use CAFB Fund payments for any expenses eligible under the Terms & Conditions of the grant, which each Recipient will be required to read and agree to prior to any reimbursements under this program. Fund payments are not required to be used as the source of funding of last resort. However, recipients may not use payments from the CAFB Fund to cover expenditures for which they will receive reimbursement from other programs. In other words, duplication of benefits is strictly prohibited under this program.
Question: What rules apply to the proceeds of disposition or sale of assets acquired using payments from the Fund?
If such assets are disposed of prior to December 30, 2020, the proceeds would be subject to the restrictions on the eligible use of payments from the CAFB Fund provided in the Terms & Conditions.
Question: Is there a limit on the number of Requests for Funding (RFFs) an organization may submit?
Under the Business Disruption category, recipients should limit their submissions to only two RFFs. One RFF may be submitted to demonstrate loss of net income that has already been incurred, and a second RFF may be submitted to demonstrate the loss of net income incurred for future months (once substantiating documentation is finalized). For the other categories, there is not a limit on the number of RFFs that may be submitted. However, it is highly encouraged that recipients limit the number of requests submitted in order to expedite the disbursement process. Recipients should group expenses that fall within the same expense category as much as possible in order to limit the number of RFFs submitted.
Question: What is the deadline to submit requests for funding?
All Requests for Funding must be submitted by 11:59PM CST on November 10, 2020. Technical help will be available to recipients until 5:00pm CST on November 10. For projects or purchases that are not complete by this date, please submit your RFF with the information you currently have regarding these expenses. You may submit additional documentation as you receive it.
Note that, for Supply Chain Enhancement and Increased Meat Processing Capacity projects, all goods (or services) must be received (or performed) by May 31, 2021 in order to be reimbursed.
Note that Business Disruption claims will only be funded if the loss of net income occurred within the period March 1- October 31, 2020. All documentation for Business Disruption claims should be uploaded with your RFF submitted by November 10, 2020.
RFFs submitted after 5:00pm CST on November 10 will not be processed.
Question: What if I cannot complete my project by December 30?
Please reference the link below regarding some important deadlines related to receipt of goods and completion of projects:
Question: What is the deadline to submit supporting documentation to my RFF?
For Business Disruption claims, all requested supporting documentation must be submitted by February 28, 2021.
For Supply Chain Enhancement, Costs Associated with Pandemic Response, and Meat Processing Capacity, all substantiating documentation must be uploaded by June 10, 2021. This includes an attestation that all goods/services have been received and your project is complete and in use by May 31, 2021.
Question: What qualifies as business disruption under this program?
This category of expenses includes requests for reimbursement for lost revenue that is deemed a loss in net profit for the Recipient. This includes lost profits as a result of cancelled events, such as agricultural fairs or other agriculture related events, export market losses, or overall business disruption specifically caused by the COVID-19 pandemic.
Question: Do businesses have to have been affected by a mandatory shut down in order to qualify for reimbursement for business disruption?
No, all agricultural entities that can prove a business loss are eligible to receive a grant under the CAFB Fund. This would include losses sustained due to mandatory shutdowns or losses sustained from decrease in demand caused by the COVID-19 pandemic. Applicants will be required to demonstrate business interruption though documentation and a narrative on their application.
Question: How will applicants prove that business disruption has occurred within their entity?
The application will require business entities to input their approximate business loss from March 1- October 31, 2020. Expenses related to events after October 31, 2020 will not be eligible for reimbursement under this program. Applicants should upload any documentation they believe supports this claim. For businesses that have not incurred their business disruptions to date, please estimate the loss. To substantiate losses, documentation of losses will be uploaded after the loss has been incurred but not later than November 10, 2020. The application will include space for the applicant to provide narrative surrounding the nature of the business disruption.
Question: What documentation should be submitted in order to prove business disruption?
Recipients must include documentation that shows the net income earned in 2019 versus the net income earned in 2020. The overall eligible reimbursement will be the decrease in net income in 2020 compared to 2019. Accordingly, documentation must be supplied demonstrating the decrease in net income.
Required documentation includes: (1) Income statement from 2019 and 2020 for the period you are claiming the loss for; (2) Bank statements from 2019 and 2020 for the period you are claiming the loss for; (3) 2019 Income Tax return; and (4) documentation related to any other sources of COVID-related funding you may have received.
Question: Would lost profits from cancelled events such as Agriculture fairs be eligible under the business disruption category?
Yes. Agriculture Fair Associations should submit lost income due to cancelled events under the business disruption category of eligible expenses. The fair association may demonstrate such lost income by providing documentation of the net income earned from that event in 2019 versus the proposed lost income as a result of the cancelled event(s) in 2020 due to COVID-19. The contract for the event outlining expenses incurred as well as documentation of the cancellation will also be helpful to supply when applying for this type of loss. Only events through October 31, 2020 will be eligible for funding under this program.
Question: May a fair association or business submit lost sponsorships as a form of business disruption?
Yes. Lost sponsorships from 2020 due to COVID-19 would be eligible under business disruption as they served as a form of income for your association or business. The applicant will need to supply proof of loss of sponsorship along with the 2019 sponsorship numbers so that a total loss in profit may be computed.
Question: Are there restrictions on the use of CAFB Fund payments received for business disruption?
CAFB payments received for business disruption may be spent at the discretion of the recipient. These funds will be disbursed provided that the recipient has demonstrated business disruption. Expenditure of funds will not be monitored following their disbursal.
Costs Associated with Pandemic Response
Question: May any assets purchased from the CAFB Fund program be retained? Does the PPE have to be used by December 30, 2020?
You would not need to use all purchased PPE by December 30, 2020. However, the expenditures and amount of PPE items purchased (and reimbursed with funds received from this program) must be limited to those items that are necessary due to the public health emergency.
Question: May an applicant submit costs associated with the need to hire additional employees or pay current employees to check temperatures at events to prevent the spread of COVID-19?
Yes. Payroll costs which are necessary due to COVID-19 are eligible under this program. These costs, however, are limited to the incremental increase in pay to the employee that are related to the duties assigned to that employee that are dedicating to mitigating or responding to COVID-19. Accordingly, if the employee has duties other than COVID-19 related tasks those are not eligible for reimbursement under this program.
Supply Chain Enhancement
Question: Will expenses for overtime and payroll for additional employees hired be eligible?
Yes, these expenses would be eligible if an increase in production is needed to combat issues created by the COVID-19 pandemic (such as a demonstrated need for additional workforce capacity), and expenses were incurred between March 1, 2020 – May 31, 2021.
Question: Are my Supply Chain Enhancement project’s costs eligible for reimbursement from the CAFB fund?
For Supply Chain Enhancement expenses to be eligible for reimbursement from the CAFB fund, the project must serve to meet an increase in demand of a product, good, or service that was caused by the COVID-19 pandemic. Expenses related to the project must be incurred by May 31, 2021. An expense is considered incurred when you have taken custody of the related good or the related service has been performed.
Question: How do I show that demand increase caused by the COVID-19 pandemic created a need for my Supply Chain Enhancement project?
During the RFF process, you will provide a narrative for reimbursement requests related to your Supply Chain Enhancement project. In this narrative, you are given the opportunity to explain why your industry saw an increase in demand due to the COVID-19 pandemic. Increases in demand include industry wide demand increases (driven by consumer behavior) and increase in demand driven by volatility in the number of participants in an industry.
For example, if an industry participant with a large market share was forced to close or greatly reduce their operations due to the COVID-19 pandemic, other industry participants could have experienced an increase in demand for their product, good, or service. Similarly, disruptions in the delivery chain may give rise to opportunities for particular suppliers to pursue enhancements that involve alternative delivery solutions.
Question: Are Supply Chain Enhancement expenses relating to supply chain integration and new market entry reimbursable?
Costs related to new supply chain integration and new market entrance could be reimbursable through the CAFB Fund if the shift was made to meet an increase in demand caused by the COVID-19 pandemic. For example, a seller’s traditional supply chain was disrupted by the COVID-19 pandemic. If the seller shifted from traditional supply chain to online retail in order to meet demand, cost associated with the enhancement could be reimbursable through the CAFB Fund.
Question: If I cannot complete my Supply Chain Enhancement project by 12/30/20, can expenses incurred up to 12/30/20 be reimbursed by the CAFB fund?
Yes, expenses related to your approved project are reimbursable to the extent that they are incurred up to 12/30/20. An expense is considered incurred when you have taken custody of the related good or the related service has been performed. For example, if a Supply Chain Enhancement project relating to a new processing facility had taken custody of equipment and incurred half of the construction cost at 12/30/20, the equipment costs and construction costs would be reimbursable. Construction costs incurred after 12/30/20 would not be reimbursable through the CAFB Fund, and given the spirit of the CARES Act and CAFB Fund, it is expected that any Supply Chain Enhancement project that is incomplete as of December 30, 2020 will be completed within a reasonable time after December 30, 2020 with the use of other funds.
Increased Meat Processing Capacity
Question: Would improvements to facilities to allow farmers and processors to donate meat to food banks be allowable expenses?
Yes, these expenses would be allowable, if the expenses were incurred between March 1, 2020 – May 31, 2021.
Question: Would overtime for USDA meat inspectors qualify as a reimbursable expense under the grant?
Yes, overtime expenses are eligible expenses, provided that the overtime was necessary due to increased demand because of the COVID-19 pandemic, and the expenses were incurred between March 1, 2020 – May 31, 2021.
Question: May recipients use Fund payments to facilitate livestock depopulation incurred by producers due to supply chain disruptions?
Yes, to the extent these efforts are deemed necessary for public health and/or animal health reasons or as a form of economic support as a result of the COVID-19 health emergency. Note however, that funds under this category (Increased Meat Processing Capacity) are intended to increase the supply of meat due to the high demand caused by the COVID-19 pandemic. To the extent that depopulation of livestock results in business losses or disruptions rather than increased capacity, funding for those business losses likely should be claimed under that category instead.
Question: May Applicants use Fund payments to facilitate upgrades to their existing meat processing facilities in order to meet the increased supply chain demand?
Yes. Applicants may apply for use of these funds in order to reimburse the Applicant for costs associated with expanding their existing meat processing business. Again, this is a priority-based application and, thus, priority will be given to those Applicants who can quickly upgrade their processing facilities in order to render services to the State of Tennessee as soon as possible. Per Treasury’s guidance, all goods or services purchased with these funds must be delivered or rendered by May 31, 2021, meaning any equipment necessary must be delivered by May 31, 2021, in order to be purchased with funds from this program.