Coronavirus Related Updates - 04/21/2020

Waiving the Act and regulation language that excludes the purchase of hot foods and hot food products prepared for immediate consumption will ensure that SNAP households most adversely affected by COVID-19 have the opportunity to purchase hot foods with their SNAP benefits. Allowing the purchase of hot foods will assist and provide critical relief to SNAP households most adversely affected by the COVID-19 pandemic to have hot, prepared meals

Exemption to Extend the Expiration Date of Certain Transportation Worker Identification Credentials
The Transportation Security Administration (TSA), DHS, is granting a temporary exemption from requirements in 49 CFR part 1572 regarding the expiration of certain Transportation Worker Identification Credentials (TWICs). For the duration of this exemption, TSA will extend the expiration date of TWICs that expired on or after March 1, 2020, by 180 days.

Eligibility. This exemption applies to TWICs that expire on or after March 1, 2020.

New Expiration Dates for Eligible TWICs. For the duration of this exemption, the expiration date for an eligible TWIC is 180 days after the expiration date that appears on the face of the credential. TSA deems these eligible TWICs to be valid for the purpose of unescorted access to secured areas of maritime facilities and vessels. If the 180-day period extends beyond the duration of this temporary exemption, the TWIC will be valid for the remainder of the extended 180-day period based on the expiration date of the TWIC.

Continuation of Vetting. For the duration of the exemption, TSA will continue to recurrently vet the holders of the eligible TWICs against governmental watch lists for security threat, criminal history, and immigration status. TSA retains its full authority to suspend or immediately revoke an individual’s TWIC if the agency determines the holder is no longer eligible, in accordance with 49 CFR 1572.5(b) and 1572.19(c).

Effective. This exemption becomes effective on April 10, 2020, and remains in effect through July 31, 2020, unless otherwise modified by TSA through a notice published in the Federal Register.

Paycheck Protection Program Could Have More Funding by Wednesday
The Small Business Administration announced on Thursday of last week that the Paycheck Protection Program had allocated all of the initial $349 billion in loan funds to businesses and would not continue to process loan applications until Congress provided additional funding. However, with Congress set to pass a new relief package as soon as Wednesday of this week, members who are interested in applying for a PPP loan should prepare their application and connect with a lender.

U.S. Department of Labor Begins Enforcing Coronavirus Paid Leave Protections
The U.S. Department of Labor (DOL) announced the end of the temporary period of non-enforcement of paid leave protections under the Families First Coronavirus Response Act (FFCRA). The FFCRA reimburses America’s private employers with fewer than 500 employees with tax credits for the cost of providing employees with paid leave for specified reasons related to the coronavirus. The law enables employers to keep workers on their payrolls and comply with public health measures needed to combat the virus.

Shoppers Must Wear Face Masks
More localities are requiring face coverings while shopping, working in essential businesses.

Beer, Cigarettes See Bump During COVID-19 Crisis
Consumers turned to c-stores as stay-at-home orders took hold, SOI speaker said.

EPA to Retain Current Air Quality Standards
The agency says the particulate matter rules still protect public health and the environment.

How to Handle 'Carding' During COVID-19
We Card's president outlines how retailers can check IDs while enforcing social distancing.

Oil Price Turns Negative in Historic First; Diesel’s Decline Continues
The price of oil dropped to its lowest level in history April 20, sinking into negative pricing on the New York Mercantile Exchange, as oil supplies are beginning to overwhelm global storage capacity. Meanwhile, the nationwide average price of diesel fell 2.7 cents to $2.40 a gallon.

Analysis: State Budgets Ruined by Lost Fuel Tax Revenue
One critical element of the gasoline demand destruction is that state revenues collected from fuel taxes were sharply lower in March, and April is shaping up to be much worse.

Lost gasoline tax revenue is just one spoke in a wheel of multiple avenues where state budgets are taking a hard hit over the past six to eight weeks.  Based on 2019 taxable gallons and 2020 OPIS estimated volumes, average state tax losses year on year averaged 17.5% in March with losses in revenue coming in as high as 25.7%. April estimates for lost tax revenue average 45% with multiple states taking in less than half what they did in April 2019.

The COVID-19 pandemic has ravaged U.S. fuel demand in April. According to an exclusive OPIS survey of about 15,000 stations throughout the country, March gasoline demand was down 19.1% versus the same month last year, and through the first half of April gasoline demand is down 48.8% versus the same time frame last year.

During March, just three states saw fuel volumes drop by 100 million gal or more: California (332.1 million), Florida (108.8 million) and Texas (233.7 million). In April, OPIS data suggest that 23 states will see fuel volumes fall by more than 100 million gal, with eight seeing demand losses greater than 200 million gal versus levels of April 2019.

Once again, California and Texas are seeing the largest volume losses, of 657 million and 567 million gal, respectively. The gallons lost lead to tax collections being down either side of 50% in those two states, which are the largest in terms of population.

On a percentage basis, though, Michigan appears to be in more dire straits, with fuel sales tax revenue this month projected to be down 58.4%, or $63.1 million, than in April 2019. Michigan is also one of the states in which April volumes are expected to fall roughly 223 million gal year on year.

The lost tax revenue from fuel sales is just one thing, but if people are not driving many are not likely going to shopping malls and movie theaters. As a result, states are losing out on millions of dollars in sales taxes.

Convenience stores are in a unique predicament. As oil and refined product markets have collapsed, rack-to-retail margins moved to record heights; though that is still the case with strong margins, lost volumes take away some of the celebratory margins. There is also the other side of the c-store aspect: inside sales. Location can be a key determinant for inside store sales along with offerings, but while fresh data may be a few weeks away, anecdotally at worst inside store sales are off by 25%, ources estimate.  

However, there could be some instances in which inside store sales are markedly better, with some stores operating in a region with few retail options. For perspective, 2019 inside store sales were up 4.4% ($251.9 billion), according to recently released figures from the National Association of Convenience Stores.

Ultimately, it is still too early to tell what the damage to state budgets will look like once the economy is back up and running. Even with a piecemeal approach, as states reopen most analysts agree that a wholesale culture change will take place after a period of adjustment.