During a visit to Eureka Tuesday, March 26 congressman Jared Huffman announced plans to introduce legislation aimed at alleviating the financial hardship of a federal loan that has been weighing on Pacific Coast groundfish fishermen for just under a decade.
Huffman’s Revitalizing the Economy of Fisheries in the Pacific Act picks up where a bipartisan bill introduced in Sept. 2012 by former North Coast congressmen Mike Thompson left off and would allow for the refinancing of a $35.7 million buyback loan authorized by Congress in 2003.
The opportunity to refinance the loan at a lower interest rate would give local groundfish fishermen the same opportunities as any homeowner or business, Huffman said during a news conference to announce the bill held outside the Humboldt Bay Aquatic Center last Tuesday afternoon. The bipartisan bill would not require the federal government to spend any new money.
”It is becoming increasingly difficult for them (fishermen) - especially small businesses - to repay that debt, plus new fees - higher fuel costs, higher health care costs - and to remain in business,” he said. “Like any of us, they would like to refinance. They would like to take advantage of these historically low interest rates that we have today, but they need an act of Congress to do that.”
A 2003 act of Congress authorized the buyback loan, which Huffman’s bill aims to change, as part of a push to address overfishing and help rebuild depleted groundfish fishery stocks along the West Coast. Under the Pacific Coast Groundfish Fishing Capacity Reduction Program, funds were dispersed to fishermen who agreed to surrender fishing privileges for cash payments. In total, 91 vessels and 239 fishing permits were removed from the fishery. The remaining fishermen were tasked with the burden of repaying the buyback loan debt, with interest, at a five percent ex-vessel value - the value before processing - of all fish harvested.
However, for the first 18 months of the loan period - as interest accrued - no mechanism existed for payments to be made on the loan. By the time the first payment could be made, fishermen were facing more than $4 million in interest.
Pete Leipzig, executive director of the Eureka-based Fisherman’s Marketing Association, said while implementing the program was a good action at the time - “the people that remained in business enjoyed the benefit of having the same amount of fish, just fewer of the folks fishing for them.” He said failing to create a system to allow fishermen to make payments on the loan for so many months resulted in a financial hardship that hasn’t diminished over the years.
”We owe more money today than we borrowed because of this,” Leipzig said, “and so, moving forward with a refinance - taking advantage of the lower interest rates - is finally going to put us in a position to hopefully begin to make some headway.”
Having the ability to refinance is not only necessary to sustain local fishing communities but also helps support the local coastal economy, Huffman said.
”The ground fish fleet is a huge contributor to local port economies,” he said. “In my district alone, on any given year, you will have a dozen trawlers that contribute 10,000 metric tons of fish and that represents about $20 million worth of product,” he said.
Humboldt Bay Harbor, Recreation and Conservation District commissioner Greg Dale, owner of Coast Seafoods Co., praised the new bill, agreeing with Huffman that the fishing economy is a large part of Humboldt County’s economic base. “This bill puts money back in fishermen’s pockets,” he said. “This bill will help them survive.”
Huffman, who announced the legislation as part of a tour of the North Coast which included stops in both Del Norte and Humboldt counties, said he plans to introduce the bill in Washington within the next three weeks. If all goes as planned, he said he would like to see the current interest rate on the loan lowered from 6.9 percent to three percent or four percent.
He said he would also like to see the ex-vessel landing fee lowered.
”(But) it will be up to Congress to take a very good idea and move it forward,” Huffman said. “I can’t tell you exactly what the final interest rate that we will settle on will be. I can’t tell you exactly what the final ex-vessel landing fee to repay this loan will be. That’s all going to be negotiated in the months ahead.”