Support the Outdoor Recreation Economy

In the past few weeks, we have seen more Americans looking to the outdoors to provide the physical, mental and health benefits we have always known our industry can provide. As well as being a critical reprieve from turbulent times, outdoor recreation is a crucial part of the American economy. Annually, it generates $778 billion in output, comprises 2.2 percent of the United States GDP and supports 5.2 million jobs – many of which are in rural communities. The outdoor industry has also been growing faster than the economy as a whole, in every indicator, and at a time when there has been unprecedented economic growth. In order to recover from this economic recession, all efforts should be taken to support this key industry that can help communities recover, grow the economy, create American jobs and continue to benefit Americans’ quality of life.

While the overall industry is a major force, it is mostly made up of small businesses that are vital to the health and economic well-being of their communities, many in rural areas. Many of these businesses are suffering and in danger of failing because of the COVID-19 outbreak and the ensuing efforts to mitigate the virus’ spread, including social distancing, travel restrictions, caps on group size and more.

To help alleviate these concerns, the Outdoor Recreation Roundtable – the nation’s leading coalition of outdoor recreation trade associations, made up of 32 national trade associations serving more than 100,000 businesses – writes regarding a potential federal aid package in Corona III to support small businesses around the country and protect their employees. Outdoor recreation businesses are often lifelines for their communities, providing jobs and economic stability. However, they rely on trips and travel bringing a steady stream of visitors to our public lands and waters, accessibility to recreation assets, adequate recreation infrastructure, and the certainty of manufacturing and trade, all of which have been interrupted by COVID-19.

We appreciate your attention to this important issue, and your efforts to safeguard the health and well-being of the nation’s citizens and economy. Please find attached ideas from across the industry to immediately assist small outdoor recreation businesses, as well as information on industry small business numbers and first-person accounts of how coronavirus is affecting these businesses.

Recommendations

Establish the Manufacturing Resiliency Fund Congress should establish a federal Manufacturing Resiliency Fund of at least $1.4 trillion to provide interest-free loans to manufacturers impacted by COVID-19, ensuring financial security for the nearly 13 million men and women who make things in America.

Establish Uniform Essential Business Definitions
Congress should establish uniform definitions for “essential businesses,” including those which facilitate active transportation and outdoor recreation.

Waived Fees on Public Lands and Waters
Congress should provide legislative authority to enable the Secretary of the Interior and the Secretary of Agriculture to provide flexibility in the administration of contracts, permits, and other authorizations that have been granted for the provision of accommodations, facilities, and/or services to visitors to lands or waters managed by the National Park Service, the United States Fish and Wildlife Service, the Bureau of Land Management, the Bureau of Reclamation, or the U.S. Forest Service, in order to mitigate impacts due to COVID-19 on the holders of such authorizations and visitors, to the maximum extent possible consistent with such agencies’ obligations regarding resource protection, visitor experience, and public health and safety. Such flexibility shall include, but not be limited to, fee deferrals and waivers, contract extensions, operational flexibility, and other appropriate measures to mitigate such impacts.

Ensure Small Business Financial Certainty
Without additional income, businesses across the country will quickly find themselves in a bind trying to pay overhead costs.

  • Congress should approve a form of floor plan interest subsidies until 60 days past the expiration of the National Emergency to help make up for the economic losses from declining revenue in our industry and allow them to continue to hold and take in inventory that is actively depreciating.
  • Congress should approve the Treasury Department’s proposed Small Business interruption loans, to provide small businesses with the capital to support their employees who may need to utilize emergency PTO, and other liquidity issues.
  • Congress should implement an income tax holiday from April 1, 2020 to December 31, 2020 for small businesses in order to provide much-needed liquidity to dealers in our industry and reduce the strain on business owners and employees who are faced with potential layoffs.
  • Congress must make available low or no interest loans for small businesses and cut through SBA red tape to allow for speedy application and approval for companies with solid credit.

Unemployment Benefits
The number one concern of the outdoor recreation industry is taking care of our employees during this critical time. Congress should do the following:

  • Expand unemployment benefits to contract workers; many dealerships, boatyards, and marinas rely on this workforce to complete projects from painting to major boat repairs and refits.
  • Expand unemployment payments so that those filing for unemployment receive 100% of regular pay. Many marina and boatyard workers are paid minimum wage or close to minimum wage, and receiving less than the full amount puts them at economic risk.

Remove Section 301 and 232 Tariffs The outdoor industry is concerned with supply chain uncertainty as more and more overseas manufacturing plants temporarily shutter their facilities. Disruptions in the supply chain and exorbitant tariffs on $360 billion worth of products and aluminum and steel tariffs have prevented U.S. small businesses from expanding capital in the U.S. Our small businesses rely on a global supply chain and should not be subjected to steep tariffs for utilizing their long-standing relationships or wholly owned facilities.

  • We strongly urge Congress and the administration deliver a federal aid package that eliminates Section 301 Chinese tariffs and Section 232 aluminum and steel tariffs to promote and protect American jobs.
  • We also encourage other countries to follow suit and suspend their own retaliatory measures to ensure further global economic loss is not exacerbated.

Tax Credits During Time Businesses are Forced to Temporarily Close Our first and foremost priority is the health and safety of our direct employees and the millions of Americans who work for the outdoor recreation industry; thus, we must ensure that workers have continued access to adequate health care in the event of lay-offs from an economic downturn. We applaud Congress’ recent efforts to provide resources and assistance – including tax credits – for employers who continue to pay workers who are quarantined and encourage you to extend that support during periods that a business is forced to temporarily close.

Streamline Approval for Small Business Disaster Loan Program
Congress must ensure the Small Business Administration (SBA) disaster loan program is immediately available nation-wide to small businesses impacted by COVID-19 and streamline SBA’s authority to approve disaster loans so these businesses can receive emergency capital more quickly.

Provide Capital to Pay Off or Refinance Existing Loans and Support Operational Expenses
To allow small businesses the opportunity to take advantage of lower interest rates, the SBA should provide small businesses with the opportunity to refinance existing loans, and establish a temporary guaranteed loan program to provide small businesses with capital to pay off debt, provide employee benefits, pay employee wages and related taxes, and acquire technological and other resources that enable continuity of operations.

Assist with Event and Major Meeting Cancellations
Hundreds of major meetings and events in the U.S. – dependent on in-person attendance at convention centers, hotels and other facilities – have been cancelled. These annual meetings and events contribute more than $446 billion to the U.S. gross domestic product and directly support nearly six million jobs nationwide.

  • We urge you to include financial assistance for associations, nonprofits and other tax-exempt organizations, as many have been – and potentially will be – impacted by event cancellations as a result of COVID-19.

Delay or Permanently Repeal Research and Development Amortization Prior to the Tax Cuts and Jobs Act (TCJA) businesses could fully expense the cost of research and development (R&D) by deducting the costs of R&D from their taxable income in the year that those costs occur. Expensing is the proper tax treatment of investment and other business costs, as it prevents a firm’s profits from being overstated in real terms and lowers the cost of investment. Under TCJA, starting in 2022 businesses will be required to amortize their R&D costs over five years, instead of deducting them immediately each year. Requiring businesses to amortize business costs over a number of years overstates taxable income and results in increased costs of investment, discouragement of R&D, and reduction to the level of economic output.

  • The outdoor industry urges permanent repeal of R&D amortization and allow businesses to fully expense the cost of R&D.

Outdoor Recreation Inclusion in Travel and Tourism Industry Assistance Outdoor recreation on America’s public lands and waters is a vital component of the travel and tourism industry and similarly, travel and tourism makes up 40.7% of the outdoor industry. Millions of tourists from across America and around the world flock to our national parks, forests, wildlife refuges and more each year where they enjoy the multitude of activities our industry has to offer. Last year in national parks alone, concessioners provided an estimated $1.8 billion in goods and services and contributed roughly $150 million to the National Park Service budget through various fees. Given our industry’s integral contributions and close ties to the travel and tourism industry, support for transportation via boats, RVs, motorcycles and bikes, and lodging through campgrounds, marinas and hotel rooms, outdoor recreation should be included in any federal financial assistance to this crucial part of America’s economy.

Support the RV Industry with the Travel Trailer and Camper Tax Parity Act
Under current law, an exemption for interest paid on dealer inventory applies only to RV motorhomes to the detriment of the RV travel trailer industry. More specifically, the tax exemption applies to “self-propelled” vehicles. Approximately 85% of RVs sold are non-motorized travel trailers. Consequently, almost an entire class of recreation vehicles is excluded from the full tax deduction. H.R. 4349/S. 1543 would ensure that towable RVs were included in the floor plan interest financing deductibility provisions. During this time of uncertainty, an easy fix like this will help save RV dealers money that they can use to mitigate any slowdowns or setbacks they experience due to the coronavirus — helping to keep Americans employed and facilities open for service. Fixing this definition provides this additional certainty to hundreds of RV dealers nationwide.

Pass the Personal Health Investment Today (PHIT) Act – H.R.1679 & S.680
The PHIT Act allows Americans to use flexible spending accounts and health savings accounts to pay for health club memberships, fitness equipment, exercise videos and youth sports leagues. When the nation begins to emerge from social distancing guidelines, Americans will need to heal their bodies and minds from the toll taken by coronavirus. Passing the PHIT Act will allow people to re-engage in healthy, active lifestyles without taxing already over-stressed finances. This will also help energize businesses harmed by COVID-19.

Expand Corps to Address Rising Unemployment
As the COVID-19 pandemic evolves and continues to present severe economic challenges for our nation’s populous, proven solutions are needed to limit the long-term impact to our youth and recent veterans. One ready-made solution is the nation’s existing network of Service and Conservation Corps who could be brought to scale to meet the needs of recently unemployed workers from various affected industries. These programs provide an accessible framework for rapid deployment of stimulus funds as they have operational and partnership infrastructure in place via existing federal cooperative agreement authority (as well as state/local cooperative authorities). Money could be appropriated into existing project-based operations accounts and be loaded onto existing cooperative agreements. This will ensure funding is immediately put to work.

  • Encourage land agencies to allocate more of existing budgets to partner with Corps;
  • Promote increased engagement of Corps in addressing urban challenges; and
  • Leverage disaster-related funding to increase Corps work in resiliency/disaster response.