/ Municipal compensation scheme to local businesses - Part II

This support scheme is the second part of the Ministry of Local Government and Industry's grant under chapter. 553 item 68, Municipal compensation scheme for local businesses. The purpose of the grant is to put municipalities in a better position to remedy the situation for local businesses that are particularly hard hit by local or national infection control measures.

Kristiansand municipality adds an additional NOK. 1.121.000, from the previous aid package from the Ministry of Local Government and Modernization, into this scheme. These funds are initially kept as a reserve, and will be distributed to applicants in one or more support areas after all applications and any appeals have been finalized. 

Objectives of the scheme
The scheme aims to ensure access to liquidity for businesses and mitigate the economic impact of the Covid-19 pandemic through direct grants. The scheme will target local businesses. This applies in particular to businesses that have incurred increased costs or losses as a result of infection control measures and lockdowns.

Kristiansand municipality is targeting the nationally notified scheme at businesses within accommodation, catering, fitness centers, adventure, event and activity organizer activities, amusement and theme parks as well as businesses that have fallen wholly or partly outside the general compensation schemes.

1) GENERAL CRITERIA FOR SUPPORT
Grants are awarded to companies that meet all the criteria below at the time of the call for proposals:

A. The enterprise must have an address in the municipality of Kristiansand and conduct operational activities within one or more of the eligible areas, cf. section 2 ("Eligible areas"). Support is only provided for the economic activity of the enterprise that takes place in the municipality of Kristiansand. If the enterprise has economic activity in several municipalities, it is a prerequisite for receiving support that the applicant keeps separate accounts for branches, companies or similar in Kristiansand municipality or that it is possible in other similar ways to clearly separate the economic activity in Kristiansand municipality from the activities in other parts of the enterprise. When the term "enterprises" is used in the following, it means enterprises that meet the localization and separation requirement under this section.

B. Establishments must have year-round operations.

C. The establishment must be privately owned and must be engaged in commercial activities. That is, to have profit as its purpose and/or prerequisite.

D. The enterprise must have had, and on request be able to document, a loss of turnover and/or increased costs due to public restrictions as a result of Covid-19 in one or more eligible areas, cf. section 2 below ("Eligible areas"). The basis for increased costs due to Covid-19 must be for the period March 1, 2020 - April 30, 2021. Examples of this could be: increased costs as a result of a measure to avoid the spread of Covid-19, layoff costs, etc.

E. The enterprise must complete a self-declaration of all public support received in connection with Covid-19 (including de minimis aid). For de minimis aid, aid received in the last three financial years must be declared.

F. Medium and large enterprises must complete a self-declaration that it was not in financial difficulties as of 31.12.2019.

G. Enterprises receiving support cannot distribute dividends in 2021 and/or based on the financial year 2021.

H. For businesses started after November 1, 2018, grants will correspond to the lowest grant for a similar business in the applicable aid area. The amount of aid cannot be higher than the declared losses/additional costs.

In addition to the general eligibility criteria, the relevant conditions in section 2 ("Eligible areas") must be met in order to be eligible for funding.

2) ELIGIBLE AREAS

Eligible businesses under section 1 ("General eligibility criteria") must additionally meet the requirements for the relevant areas below. If the undertaking carries out economic activities in several areas, a separate application for aid must be made in each area and the general and specific conditions for aid must be met in each case.

Area 1: Hospitality - Assumed allocation to hospitality
In addition to the general eligibility criteria, all the conditions below must be met in order to be eligible for funding.

A. The enterprise must have had, and on request be able to document, a loss of turnover of at least 30 percent in the period from November 1, 2020 up to and including April 30, 2021 compared with the period from November 1, 2018 up to and including April 30, 2019. If the latter period deviates significantly from a normal year, the period from November 1, 2017 up to and including April 30, 2018 may be used as a comparison period. The applicant must explain and, upon request, provide evidence of such a significant deviation.

B. The business must have a minimum turnover of NOK 1,000,000 in 2019. This requirement is waived for companies that have started up in 2019 or later.

C. The enterprise must have employed at least 1 FTE.

D. The business must be registered with at least one of the following Industry Codes (NACE):

• 56.101 Operation of restaurants and cafes
• 56.210 Catering
• 10.710 Manufacture of bread and fresh pastry goods and cakes
• 47.241 Retail sale of bakery products in stores
• 56.301 Operation of pubs
• 56.309 Other bars

Area 2: Accommodation and food service activities
In addition to the general eligibility criteria, all of the conditions below must be met in order to receive funding.

A. The enterprise must have had, and on request be able to document, a loss of turnover of at least 30 percent in the period from November 1, 2020 up to and including April 30, 2021 compared with the period from November 1, 2018 up to and including April 30, 2019. If the latter period deviates significantly from a normal year, the period from November 1, 2017 up to and including April 30, 2018 may be used as a comparison period. The applicant must explain and, upon request, provide evidence of such a significant deviation.

B. The business must have a minimum of NOK 1,000,000 in turnover for 2019. This requirement is waived for companies that have started up in 2019 or later.

C. The enterprise must have employed at least 2 FTEs.

D. The business must be registered with at least one of the following Industry Codes (NACE):

• 55.101 Operation of hotels, boarding houses and motels with restaurant
• 55.102 Operation of hotels, boarding houses and motels without restaurants
• 55.300 Operation of campsites and tourist cabins
• 55.202 Operation of hostels and holiday apartments   

Area 3: Fitness Centers - Assumed distribution to fitness centers
In addition to the general eligibility criteria, all the conditions below must be met in order to receive funding.

A. The enterprise must have a minimum of NOK. 750,000 in turnover for 2019. This requirement is waived for companies that have started up in 2019 or later.
B. The enterprise must have employed at least 1 FTE.
C. The enterprise must have paying members.
D. The enterprise must be registered with the following Industry Code (NACE):

• 93.130 Fitness centers

Area 4: Experience, event and activity organizing activities
In addition to the general eligibility criteria, all the conditions below must be met in order to be eligible for funding.

A. The enterprise must have a minimum turnover of NOK 500,000 for 2019. This requirement is waived for companies that have started up in 2019 or later.
B. The enterprise must have employed at least 1 FTE.
C. The enterprise must be registered with at least one of the following industry codes (NACE):

• 79.903 Activities of amusement and recreation activities
• 93.210 Operation of amusement and theme parks
• 93.110 Operation of sports facilities with bars
• 93.292 Leisure establishment

Area 5: Enterprises that have been directly or indirectly affected by statutory closures and fell wholly or partly outside the general compensation schemes.
Provided that the general criteria for support are met, Kristiansand municipality can provide support to businesses that also meet all the conditions below.

A. The enterprise must have had, and on request be able to document, a loss of turnover of at least 30 percent in the period from November 1, 2020 up to and including April 30, 2021 compared with the period from November 1, 2018 up to and including April 30, 2019. If the latter period deviates significantly from a normal year, the period from November 1, 2017 up to and including April 30, 2018 may be used as a comparison period. The applicant must explain and, upon request, provide evidence of such a significant deviation.

B. The loss of turnover must be directly or indirectly due to the closure of the business in question by order of a public authority as a result of Covid-19.

C. The enterprise must not have been or be covered by current or previous municipal or state compensation schemes for Covid-19. This may apply, for example, to businesses established after 1 March 2020, businesses that have had a negative annual result in 2019 or that have not operated a type of business activity that is covered by the compensation schemes. Support may also be granted if the business has partially fallen outside the aforementioned schemes and has only been awarded a small amount of up to NOK 50,000. 50 000.

D. The business must have a minimum of NOK 750,000 in turnover for 2019. This requirement is waived for companies that have started up in 2019 or later.

E. The enterprise must have employed at least 1 FTE.

3) WHAT CANNOT BE SUBSIDIZED

A. Measures that fall outside the conditions set out in the call for proposals.

B. Enterprises that are municipally or publicly owned and/or financed.

C. Enterprises that were in financial difficulties as of December 31, 2019. This does not apply to small and micro enterprises.

D. Loss of turnover and/or additional expenditure totaling less than NOK 50 000.

E. There is no aid for lost inventory (a separate government scheme has been announced for this).

4) APPLICANT REQUIREMENTS

The responsible applicant must be a person who can legally commit the business. Business Region Kristiansand is free to request other information and documentation that is considered relevant in the assessment of the application. 

5) THE AMOUNT OF THE GRANT

The amount of the grant will not be known until the application deadline has expired and calculations have been made. The size of the grant is highly uncertain and will depend on the number of approved applications in each funding area. The size of the grant will be different in the 5 different support areas. For businesses started after November 1, 2018, the grant will correspond to the lowest grant for the corresponding business in the applicable support area. The amount of the grant cannot be higher than the declared losses/additional costs.

A ceiling is set at kr. 300 000 is set as the maximum amount of support.

The following financial envelope has been set for the support areas:

• Area 1: 5 million
• Area 2: 2 million
• Area 3: 3 million
• Area 4: 1.5 million
• Area 5: 2.5 million

The total in the area will then be divided by the number of applicants in the area and adjusted for the number of FTEs in the enterprise. A threefold division based on FTEs will be applied, 1-5 FTEs, 6-10 and more than 10 FTEs. The envelopes for each area may be adjusted when the volume of applications in each area is clear.

Especially for area 1, "catering":
In area 1, the municipal liquor license will influence the amount of the subsidy. Establishments with a municipal liquor license are awarded a slightly higher subsidy.

Specifically for area 5 "Establishments that have been directly or indirectly affected by statutory closures and at the same time have fallen wholly or partly outside the general compensation schemes":
Enterprises that are comparable to enterprises in areas 1-4 cannot receive a higher subsidy than the subsidy given to the corresponding area.

Provisional estimated sizes of the allocations. These may be significantly deviated from in the final allocation.

• Area 1: DKK. 10.000 - 50 000
• Area 2: DKK. 100.000-300 000
• Area 3: kr. 50.000-300 000
• Area 4: kr. 50.000-200.000
• Area 5: kr. 0-250.000

The funds (NOK 1,121,000) from the previous aid package from the Ministry of Local Government and Modernization will be distributed to applicants in one or more support areas after all applications and any appeals have been processed.

6) PAYMENT OF GRANTS
The grant funds are paid as soon as possible after the application deadline, once the applications have been reviewed, the applicant has been verified as eligible and the applicant has signed the necessary documents sent by the municipality. The grant is awarded through the nationally notified scheme under the Covid-19 framework, Chapter 553 item 68.

7) SUBMISSION OF THE APPLICATION
A link to the application form can be found at the bottom of this page and on Kristiansand municipality's website. The aid scheme is called "Municipal compensation scheme part II". To fill in the application, you must log in to ID-porten with your bank ID. Fill in the application in line with the description. The responsible applicant must be a person who can legally commit the business.

Kristiansand municipality practices digital first choice, all further communication will take place digitally. If the contact person/applicant has reserved against digital communication with the public sector, this will delay the process. In the application process, you can change the choice of reservation against digital communication with the public sector, and update the information under "About the applicant".

8) CASE MANAGEMENT
All applications will be assessed according to the grant criteria. Applications will be processed by the business department in Kristiansand municipality (Business Region Kristiansand).

9) REQUIREMENTS FOR THE RECIPIENT OF THE GRANT

Conditions will be stated in the award letter

A. The applicant must accept the offer and conditions by digitally signing the offer of support. Acceptance must be given within 7 days of commitment.

B. The scheme is trust-based, but the municipality or other relevant actors may at any time request auditor-certified documentation for everything that is based on the application.
 

10. APPLICATION DEADLINE AND ANNOUNCEMENT 

The application deadline is 15.06 2021, 23.59.
The grant scheme is announced on kristiansand.kommune.no and on businessregionkristiansand.no, and is promoted through the municipality's social channels.

11. APPEAL
The municipality's decision on a grant may be appealed by a party or other party with a legal interest in the case to the municipality's internal appeals board, cf. section 28, second paragraph, of the Public Administration Act. The deadline for appeal is 3 (three) weeks from notification of the decision. The complaint must be sent to post@kristiansand.kommune.no. The appeal must refer to the decision being appealed against and the change(s) requested. The appeal should be substantiated and other information relevant to the case should be mentioned. Any questions regarding the appeal can be directed to the case officer.

With certain exceptions, the parties are entitled to see the documents in the case, cf. Sections 18 and 19 of the Public Administration Act. 

Questions about the scheme can be directed to Business Region Kristiansand:

Stein Otto G. Daatland, tel. 997 11 819
Ole Jacob Rynning-Tønnesen, tel. 988 49 400
Tina Abrahamsen, tel. 909 54 304
Kristian Råmunddal; tel. 476 10 163
Geir A. Haugum: tel. 971 71 885

ATTENTION: If the company you are applying on behalf of started after November 1, 2018, under the loss of turnover tab in the application, please put the number 1 in the box for turnover period 1 and the number 0 in the box for turnover period 2. Check the box for use of figures from 2017/2018, and enter the covid-related turnover loss the company believes it will have in the period March 2020-30 April 2021 in the text box that appears.