Homer News: Seawatch: Fishermen get briefed on CARES Act

Alaska’s congressional delegation held a conference call with 65 of Alaska’s fishery leaders last week and laid out some details of the federal assistance available to fishermen through the $2 trillion CARES Act.

The call was set up by United Fishermen of Alaska, and Executive Director Frances Leach had praise for the delegation.

“Obviously the senators and congressman are very concerned about our industry, and they’re doing everything they can to make sure that we have what we need,” she said.

The amount set aside for commercial fishermen, $300 million nationwide, is a small amount compared to the perceived need, but Sen. Dan Sullivan, R-Alaska, stressed that it is a starting point and will undoubtedly be increased.

Sen. Lisa Murkowski, R-Alaska, agreed.

“We know that this is a sum of money that has to be disbursed amongst the fisheries all over the country, and some would say ‘well, it’s not enough to make a difference,’ I would just ask us not to get too focused on the dollar amount,” she said. “We’ve created a new authority here, and I think it is something that we can continue to appropriate for. I do think it’s designed to help compliment the existing and national programs that are out there.”

She added that fishermen can “access small business loans, with an opportunity for forgiveness of a portion as it relates to the payroll costs, and that would include payments to crewmembers on a 1099 form. Know that these are available for you as an extension of the unemployment benefits.

Under state law fishermen previously have not been covered by unemployment benefits, but this expansion provides coverage for self-employed independent contractors and those who would otherwise not be eligible for unemployment insurance.

“This includes those who did have job offers and who would have started soon, like those for instance in the upcoming fishing season, and so know that as we’re all trying to work through the details that several of these opportunities that you might not have believed were open to you as fishermen are now open to you under this CARES Act,” Murkowski said.

A good portion of a loan, if not all, can be forgiven, according to an email from Sullivan staff member Erik Elam to UFA.

“The entire amount of the loan can be forgiven, assuming 75% is used on payroll, including your own paycheck. The remaining 25% can be forgiven if used on mortgage interest, utilities, etc.,” he said.

One of the big questions is whether there will be a salmon season, given the issues with housing large numbers of processing staff in tight quarters. Sullivan said that he has been working with Homeland Security to keep visa applications moving forward for foreign workers, but small towns like Dillingham and Cordova have serious concerns about so many people descending on a small community with limited medical resources.

Buck Laukitis, North Pacific Fisheries Association member and former director, asked, “It appears that the SBA Loan and Paycheck Protection Loan Forgiveness Program will work for Alaska fishermen, but we won’t know for sure. Most Alaska fishermen employ 1099 workers seasonally, not W-2 employees. Can you and your staff get involved in implementing regulations so that we will be assured that the small business programs will work for us?”

Murkowski answered, “The definition of payroll costs within the SBA includes any compensation for income of self-proprietor, independent contractor that is a wage commission earned, net earnings from self-employment that includes payment to a crew on a 1099 form, so that should allow you to apply for a loan using the calculation prorated over the season.

“Additionally, within CARES the federal unemployment program is expanded for unemployment for those who are self-employed including those who you may have lined up to come to work for you this summer. They had a job offer, they would have started, maybe they don’t have a strong work history that would have made them ineligible for unemployment insurance, but what we do with the expansion of the program is to allow for the self-employed, independent contractors who get a 1099 as a sole proprietor. Those who get a 1099 and are employed seasonally should be accounted for.”

However, in a call from Dutch Harbor, Laukitis said he is not seeing results.

“I haven’t heard of a single fisherman who has gotten anything from (SBA),” he said. “They were supposed to make money available very quickly. I haven’t heard of a single person who has figured out how to even get an application in, and I haven’t heard of a single fisherman who, even if they wanted to go on unemployment, could do so, because the states don’t know how to deal with 1099 people.

“These guys are all throwing money around, but none of it is sticking with us.”

He said that 70% of Alaska-caught fish go to restaurants, and with most closed nation-wide, there is no profitable way to make up that market share.

“Who knows when restaurants will be up and running again?” Laukitis asked.

He pointed out that the original $300 million relief allocation is expected to be spread throughout processors, cannery workers, fishermen, deckhands and others across the entire U.S.

On the UFA conference call, Sullivan encouraged people to get started on the process.

“If you’re self-employed, and you’re just going out on your own, I’d start the application process, which begins April 13, and people have to apply for one of the loans by June 30, but remember that the loans are such that, say you have four employees, you can get a certain amount of a loan, and you keep some of them on the payroll, then that loan, after 8 weeks, converts into a grant,” he said. “That’s the key thing about the Paycheck Protection Program, which I think in some ways our fishermen are going to have an advantage of, you’re going to keep your employees working, because we want you to be fishing, and if you get the loan, and you keep your employees paid, then the loan becomes a grant from the federal government.”

Laukitis said that the senators have been doing their best and are responsive to requests for help, but that the bill is 800 pages long and the devil is in the details.

“I’m going to keep working with Murkowski and Sullivan and give them the details and what we’re finding,” he said.

Other issues that got covered in the conference call ranged from slowing the Army Corp of Engineers process on Pebble Mine to why tariffs were eased on tilapia from China during the crisis.

Stephanie Madsen, executive director of the At Sea Processors Association, said the easing of tariffs comes even while China continues to impose 35% tariffs on Alaska seafood.

“Why does U.S. have it out for the Alaska seafood industry?” she asked.

Sullivan replied that the people in charge of the tariffs can be “blockheaded,” and has repeatedly urged them to check with his office before doing anything “because you screw it up so much.”

Both senators urged anyone with issues to contact their staff for help, and UFA has set up a Covid-19 Resource Webpage. For the latest Covid-19 news, mandates, resource guides, helpful documents and more, visit www.ufafish.org/ufa-covid-19.

By:  Christy Fry
Source: Homer News