Saving Seafood

ALASKA: Pandemic pushes fishing activists to call for more government support

July 30, 2020 — Before this year’s salmon season, federal disaster funding was mostly unavailable to small-boat fishing businesses. Then, Congress amended the Paycheck Protection Program at the beginning of July so that fishermen could apply. A little later, it extended the program’s application deadline until August 8.

That was a big relief for many fishermen in Alaska.

“My family and I are salmon fishermen,” said Jamie O’Connor, a Bristol Bay set-netter who fishes in Ekuk and serves as the Working Waterfronts director for the Alaska Marine Conservation Council. “It was really difficult for us to quantify our impacts before our season had happened, so we were really happy to see that there had been an extension and some alterations to the program to allow us to participate.”

At the peak of this year’s sockeye run, O’Connor’s processor put the fleet on limits — the company, and many others in Bristol Bay, told fishermen not to fish due to freezer and capacity issues.

“We missed probably half to a third of our season in those three days,” O’Connor said. “It was a hard thing to sit through, especially with all of the effort that went into preparing for this season. To have done more on the front end to make sure we could do this safely and then just sit out the run was crushing.”

Read the full story at KTOO

Maine lobstermen prepare for uncertain summer season, hoping for further federal relief

July 28, 2020 — More than 1,300 lobstermen in Maine – about 1 in 3 – received forgivable loans through the Paycheck Protection Program (PPP), with the majority amounting to roughly $10,900.

It may not be enough to sustain fishermen through an already uncertain summer amid the COVID-19 pandemic, Ben Martens, executive director of the Maine Coast Fishermen’s Association, told the Portland Press Herald.

“A lot of people got very small loans that helped in the short term, at the start of the crisis, but now the crisis is dragging on and lobstering season hasn’t even really started,” Martens said.

New data from the U.S. Small Business Administration shows that altogether, Maine’s lobster industry received roughly $24 million in PPP funding, the most given to any business concern in the state; dine-in restaurants, beauty salons, real estate, and home building received the next highest amounts.

While the bulk of the fishing sector money – nearly $15 million – went to fishermen, some dealers, retailers and processors received loans between $150,000 and $1 million.

Read the full story at The Center Square

PPP loans helped buoy Maine’s lobster industry through the spring

July 22, 2020 — Maine lobster businesses, both large and small, received emergency funding through the U.S. Small Business Administration’s Paycheck Protection Program to help them survive the economic crisis wrought by the coronavirus’ global spread this spring.

The lobstering sector was the top recipient in Maine of forgivable PPP loans of less than USD 150,000 (EUR 130,000), with around USD 14.9 million (EUR 12.9 million) offered to 1,358 Maine lobstermen, according to the Portland Press Herald. But the average loan to lobster fishermen was USD 10,900 (EUR 9,400) each, a total that won’t help many survive the season if low dock prices and weak export markets continue, according to Ben Martens, executive director of the Maine Coast Fishermen’s Association.

Read the full story at Seafood Source

1 in 3 Maine lobstermen lands federal pandemic loan

July 20, 2020 — Maine lobstermen reeled in more small federal emergency loans under the Paycheck Protection Program than members of any other industry in Maine, with about one out of every three commercial lobstermen landing one, but the average loan was barely large enough to cover a month’s worth of bait at the height of the summer fishing season.

About $14.9 million in forgivable Paycheck Protection Program, or PPP, loans of less than $150,000 have been handed out to 1,358 Maine lobstermen, according to an analysis of newly released U.S. Small Business Administration data. That puts lobstermen ahead of full-service restaurants, real estate offices, beauty salons and home builders, which rounded out the top five Maine industries receiving small PPP loans.

But the high participation rate didn’t net Maine lobstermen a lot of money, with the average small PPP loan to lobster fishermen working out to be just $10,900 each, data show. By comparison, full-service restaurants got $53,500. Home builders, $30,000. It didn’t get better when the loans got bigger: Only two lobstering companies got large loans of more than $150,000.

“A lot of people got very small loans that helped in the short term, at the start of the crisis, but now the crisis is dragging on and lobstering season hasn’t even really started,” said Ben Martens, executive director of the Maine Coast Fishermen’s Association. “Ten grand is nice if you’re struggling, but not enough if you’re suffering.”

Read the full story at the Portland Press Herald

Ranking Member Chabot Statement on PPP Extension

July 2, 2020 — The following was released by The Office of Congressman Steve Chabot (R-OH):

Today, House Committee on Small Business Ranking Member Steve Chabot (R-OH) issued the following statement on House passage of S. 4116, a bill that extends the Paycheck Protection Program (PPP) application period to August 8, 2020.

“Passage of this bill is welcome news, especially as many small businesses continue to face an uphill climb on the road to economic recovery.

This legislation will give more small businesses the chance to access the Paycheck Protection Program – a program that has already helped millions across the country. It also ensures the Small Business Administration’s 7(a) program will continue to operate once PPP funds are exhausted.

While our work is not done, I am glad Congress has yet again come together in a bipartisan, bicameral manner to support America’s small businesses.”

Paycheck Protection Program Deadline Extension

July 1, 2020 — The following was released by The Office of Senator Lisa Murkowski (R-AK):

The U.S. Senate unanimously passed legislation to extend the Paycheck Protection Program to August 8, 2020. The small business loan program expired yesterday, on June 30. It now needs to pass the House in order for it to be sent to the President’s desk to be signed into law.

Just last week the Department of Treasury and Small Business Administration announced a rule allowing commercial fishing businesses to account for crew member payroll when applying for Paycheck Protection Program (PPP) loans, a change that the Alaska Congressional Delegation had been seeking for weeks. While commercial fishing businesses were previously eligible for PPP loans, before June 25th they were not fully able to take advantage of the PPP due to the Department of Treasury’s previous interpretation of eligible payroll costs. Treasury issued a rule on June 25th to address this. While the fix was welcome news, this gave commercial fishing businesses just days to apply for PPP funds before the June 30 deadline.

“We’ve seen the importance of the Paycheck Protection Program to countless small businesses in Alaska. During this unprecedented coronavirus pandemic, it has been helped them weather the storm,” said Senator Murkowski. “With last week’s fix to finally allow commercial fishing businesses to take full advantage of the program, this extension is absolutely necessary to give them the opportunity and time they need to apply. My hope is that the House quickly takes this legislation up so that we can give these small business owners, including our fisherman, the peace of mind they need.”

“The recent rule change enabling commercial fishermen to more fully access the Paycheck Protection Program was a big win for Alaska, but the narrow window of time left to apply—especially in the middle of fishing season for many—threatened to blunt the benefits,” said Senator Sullivan. “I thank my Senate colleagues for extending the PPP application deadline and, if this bill makes it past the House and the President’s desk, I urge all interested Alaska small businesses, including our hard-working fishermen, to apply quickly so they don’t miss out on the remaining PPP relief funds.”

Click here for more information on the Paycheck Protection Program.

Statement from Saving Seafood’s National Coalition for Fishing Communities Executive Director Robert Vanasse on Changes to the Paycheck Protection Program

June 29, 2020 — The following was released by the National Coalition for Fishing Communities:

Our fishing coalition members are grateful for today’s modifications to the Paycheck Protection Program (PPP), which will finally allow most vessel owners to take part in the program and will help save industry jobs. As fishermen deal with the ongoing changes to the industry caused by the COVID-19 crisis, these protections will help support livelihoods and ensure that our fishing communities remain strong.

We would like to thank President Donald Trump and members of his Administration, Secretary Wilbur Ross and the staff of the Department of Commerce, Secretary Steven Mnuchin and the staff of the Department of the Treasury, and Administrator Jovita Carranza and the staff of the Small Business Administration for their efforts in making changes to the program, and for helping to make sure that the PPP is available to as many American businesses as possible.

America’s fishing industry has been a foundation of not just the culture of our coastal communities, but of the US economy as well. Commercial fishing communities span the nation, from Hawaii and the Pacific territories, to Alaska, to the Pacific Northwest, the West Coast, the Gulf of Mexico, and the East Coast.

The National Coalition for Fishing Communities gives voice to the numerous communities — municipalities, fishermen, shore-side businesses, processors, retailers, and many others — that make up America’s seafood industry. Our members represent tens of thousands of fishermen across the nation.  Neither we nor our members accept financial support  from environmental organizations or their funders.

SBA expands PPP loan eligibility to more fishing vessel owners

June 26, 2020 — The U.S. Department of Treasury and the Small Business Administration announced on Thursday, 25 June, that commercial fishing vessel owners are now eligible to apply for Paycheck Protection Program (PPP) loans.

The loan program is a COVID-19 relief initiative designed to enable small business owners to keep workers on the payroll as the coronavirus impacted their operations. The loans can be fully forgivable if the recipient uses at least 60 percent of the funding toward paying workers.

Read the full story at Seafood Source

URGENT: Payroll Protection Plan update for vessel owners

June 26, 2020 — We at Saving Seafood have been working with the Commerce Department and the White House to address a problem with the Payroll Protection Plan (PPP) that prevented vessel owners from applying, because under the IRS code they pay crew-members via 1099. We worked closely with David Frulla of Kelley Drye, David Borden of the Offshore Lobstermen’s Association, and Pamela Lafreniere of the Port of New Bedford, who all provided a great deal of technical assistance.

The issue is discussed at length on our Saving Seafood Coronavirus information portal, https://www.savingseafood.org/coronavirus/ .

The link to go directly to the PPP section is here.

Because the initial guidance for the PPP program stated that businesses could not use payments to independent contractors in their calculations of payroll for purposes of determining the eligible PPP loan amount, vessel owners were not eligible. Accordingly, we requested an amendment to the interim final rule:

  • that would allow a commercial fishing vessel owner to include 1099 payments to crew in 2019 as “payroll” in applying for a PPP loan and determining maximum loan amount;
  •  that a fishing vessel owner’s payments to crew from PPP loan proceeds likewise be treated as “payroll” under the PPP for purposes of determining the fishing vessel owner’s appropriate use of PPP loan proceeds, PPP loan forgiveness, and documentation to the lender for PPP loan forgiveness

This morning, the Small Business Administration granted this request and published such an amendment. It is available here.

We want to specifically thank Joseph Russo, Special Assistant to the President and Director of Business Outreach at the White House Office of Public Liaison, and Patrick Wilson, Director of the Office of Business Liaison at the U.S. Department of Commerce for their assistance in bringing these concerns to the SBA and the Treasury Department.

IMPORTANT: This Tuesday, June 30 is the deadline for small businesses to apply for forgivable PPP loans. If you want to apply, you should contact your banker and accountant immediately and assemble the application over the weekend.

The relevant section of the amendment is included below:

This interim final rule addresses payroll costs that may be included on a PPP loan application submitted by certain boat owners or operators that are engaged in catching fish or other forms of aquatic animal life (fishing boat owners) and that have hired one or more crewmembers who are regarded as independent contractors or otherwise self-employed for certain federal tax purposes under 26 U.S.C. § 3121(b)(20) of the Internal Revenue Code (the Code). A crewmember may be described in Section 3121(b)(20) of the Code if the fishing boat on which he or she works has an operating crew that is normally made up of fewer than 10 individuals and the crewmember receives as compensation for his or her work a share of the boat’s catch or of the proceeds from the sale of the catch, in an amount that depends on the amount of the catch. Such a crewmember generally may not receive additional cash remuneration or other compensation for his or her services with respect to the fishing boat. A fishing boat owner must report compensation paid to such a crewmember on Box 5 of IRS Form 1099-MISC. The First Interim Final Rule, posted on April 2, 2020, provided that because independent contractors have the ability to apply for a PPP loan on their own, they do not count for purposes of another applicant’s PPP loan calculation. 85 FR 20811, 20813 (April 15, 2020). Because crewmembers described in Section 3121(b)(20) of the Code are treated as independent contractors or otherwise self-employed for certain federal tax purposes, fishing boat owners have faced uncertainty about whether to report payments to such crewmembers as a payroll cost on their PPP loan applications.

On April 14, 2020, SBA, in consultation with Treasury, posted an interim final rule explaining that the self-employment income of the general active partners of a partnership could be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership. 85 FR 21747, 21748 (April 20, 2020). The Administrator, in in consultation with the Secretary, has determined that the relationship of a fishing boat owner and a crewmember described in Section 3121(b)(20) of the Code is analogous to a joint venture or partnership. For example, the fishing boat owner and crewmembers each contribute labor or resources to a common commercial enterprise, and the owner and crewmembers share in the enterprise’s profits. In order to harmonize SBA’s interim final rule regarding partnerships with SBA’s interim final rule described above regarding independent contractors  the Administrator, in consultation with the Secretary, has determined that in the event of a conflict (i.e., a case where one or more partners in a partnership are treated as independent contractors for tax purposes), the rules regarding partnership will govern. Accordingly, as described below, this interim final rule (1) provides that a fishing boat owner may include compensation reported on Box 5 of Form 1099-MISC and paid to a crewmember described in Section 3121(b)(20) as a payroll cost in its PPP loan application, and (2) addresses a fishing boat owner’s eligibility to obtain loan forgiveness of payroll costs paid to a crewmember who has obtained his or her own PPP loan.