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Volume X, Number 225

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COVID-19: Renewed and Unique Opportunity for Fishing Industry in Paycheck Protection Program

Recent changes in the Paycheck Protection Program (PPP) created by Congress offer additional flexibility for fishing boat owners and their crewmembers to qualify for PPP loans. The changes came just prior to the June 30 expiration of the program; however, both chambers of Congress have since approved legislation to give loan applicants until 8 August to apply for the aid, and President Trump is expected to sign the bill into law. Fishermen interested in this renewed opportunity for additional PPP flexibility should reach out to any of the authors listed on this alert.

Background

The Coronavirus Aid, Relief, and Economic Security Act (“the CARES Act”; Pub. L. 116-136), as amended by the Paycheck Protection Program and Health Care Enhancement Act (Pub. L. 116-139) and the Paycheck Protection Program Flexibility Act of 2020 (Pub. L. 116-142), created a new PPP loan program managed by the Small Business Administration (SBA).

The SBA has provided guidance to program participants through a regularly updated Frequently Asked Questions (FAQs) document and several Interim Final Rules (IFR). On the very date of the program’s planned end, 30 June, an IFR was published pertaining to the eligibility of fishing boat owners and their crewmembers to qualify for PPP loans. But on 1 July  the U.S. House joined the U.S. Senate in approving a five-week PPP extension that President Trump is expected to sign, thereby providing a renewed opportunity for fishing industry participation. Approximately $130 billion remains available in the PPP fund.
Specifically, the IFR 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 . . . .” This is a very unique situation under the PPP—both the vessel owner and the crew can apply for and receive the loan but only one of these parties can apply for and receive loan forgiveness. There are no other examples of PPP loans wherein both parties qualify. The owner is responsible for coordinating with the crewmember regarding who is going to apply for loan forgiveness. Importantly, given the uniqueness of the situation, SBA has advised fishing boat owners that they can expect to be subject to a greater level of scrutiny if they apply for loan forgiveness because of concerns about double-dipping.

The fishing community advocated strongly in Congress and within the Trump administration for these changes. Although the IFR clarifying fishing vessel owners and crewmember eligibility in the PPP was issued late in the process, as noted above, both of Congress’ two chambers passed an extension to keep the program open to applications until 8 August. Given that President Trump is expected to sign the measure, fishing vessel owners may have a renewed opportunity to participate in the program.

Copyright 2020 K & L GatesNational Law Review, Volume X, Number 184

TRENDING LEGAL ANALYSIS


About this Author

Darrell Conner, KL Gates Law Firm, Public Policy Attorney
Government Affairs Counselor

Mr. Conner is a government affairs counselor in the Public Policy and Law practice group at K&L Gates, one of the largest policy groups in the United States.  He has nearly 25 years of experience working with Congress and the executive branch, experience that he leverages to provide advice to clients on effectively managing their government and regulatory affairs, in particular helping clients by create alignment between their objectives and government policies.

202-661-6220
James Sartucci, KL Gates Law Firm, Public Policy Attorney
Government Affairs Counselor

Mr. Sartucci, a government affairs counselor in K&L Gates’ Washington, DC office, has over 13 years of practical experience on Capitol Hill working inside the legislative process on issues including  maritime, Coast Guard, homeland security, transportation, oceans, fisheries and science programs and policy.

Prior to joining K&L Gates, Mr. Sartucci spent nine years working for Senator Trent Lott (R-MS) where he served as Legislative Director.  He has considerable experience in the areas of tax, land and water infrastructure, appropriations, disaster, offshore energy, environmental, and telecommunications policy.  

202-778-9374
Michael Nelson, KL Gates Law Firm, Insurance and Litigation Attorney
Partner

Mr. Nelson practices in the area of complex commercial litigation, with a focus on commercial disputes, insurance coverage and consumer class action defense. Since he joined the Firm in 1996, Mr. Nelson has represented clients in a variety of Uniform Commercial Code disputes, as well as contract actions and claims alleging business torts. Mr. Nelson has also represented policyholders in litigation over coverage for environmental and toxic tort liabilities and has worked to secure coverage in connection with mass tort bankruptcies. Mr. Nelson also represents manufacturers...

412-355-6245
William Myhre, partner, KL Gates
Partner

Mr. Myhre has 40 years experience in a wide range of federal regulatory, policy and legislative matters focusing on domestic and international maritime issues among others. He is experienced in cargo and cruise shipping matters and the commercial fishing industry including regulatory limitations on foreign investment in the U.S. maritime industry as well as the construction, conversion, documentation and financing of vessel assets. He has represented industry coalitions and individual companies in complex legislative initiatives and their subsequent implementation and...

202-661-6622
Mary Baker Burke, KL Gates Law Firm, Tax Attorney
Government Affairs Advisor

Mary Burke Baker is a government affairs advisor in the Washington, D.C. office. Mary focuses on federal tax matters affecting businesses—including domestic and multi-national corporations and all types of pass-through entities—and individuals. Her practice covers tax policy, tax reform, regulatory and other guidance, tax administration and technical tax issues, with particular emphasis on the OECD and the European Union, accounting methods, energy and medical device issues, and FBAR compliance matters for individuals.

Mary consults with and...

202-778-9223