Saving Seafood

BOEM advancement of New York offshore wind raising fishing industry concerns

August 18, 2021 — Two major offshore wind projects off the coast of the U.S. state of New York have taken steps forward over the past week, according to announcements made by the Bureau of Ocean Energy Management (BOEM), and those developments have raised some significant concerns from the fishing industry in the U.S. Northeast.

On Monday 16 August, the agency issued its final environmental impact statement on South Fork Wind, a development that could generate 130 megawatts of power to the eastern end of Long Island.

However, according to letters from the Fisheries Survival Fund and the Port of New Bedford, Massachusetts, that’s not the case – at least in terms of the scallops fishery, one of the country’s most-lucrative fisheries.

Fishermen and port officials sent letters on Friday, 13 August, continuing to raise concerns about the largest planned development area, the so-called “Hudson South” area, which is located about 30 miles east of the central New Jersey coast and 60 miles south of western Long Island.

“The need for such precautionary measures is especially vital given that a sizeable body of research is shedding light on the extent of potential consequences to local fisheries from offshore wind-farm construction and operation,” wrote David Frulla, Andrew Minkiewicz, and Bret Spark – lawyers representing the FSF – in a letter.

Read the full story at Seafood Source

MASSACHUSETTS: New Bedford fishermen, officials question New York offshore wind areas as auction nears

August 17, 2021 — As sections of ocean off the coast of New York near auction to offshore wind developers, local fishermen have called on the federal government to do a better job not only engaging with the fishing industry, but also heeding its concerns and implementing its recommendations.

At stake for fishermen, wind developers and the Biden administration is the New York Bight — an area of shallow waters between Long Island, New York, and the New Jersey coast. Within the bight, commercial fishermen fish for scallops, summer flounder and surf clams, among other species.

In June, the U.S. Department of the Interior announced a proposed sale of more than 600,000 acres of the bight for offshore wind development. Before the public comment period for the proposed sale closed on Aug. 13, the U.S. Bureau of Ocean and Energy Management held virtual meetings with fishermen, during which many shared their frustration and concern.

During a meeting on Aug. 6 with BOEM officials, city officials and fishermen from along the East Coast shared concerns about engagement, accountability, transparency and safety. The top BOEM official, Director Amanda Lefton, appeared virtually and spoke directly to local representatives. The meeting took a hybrid format with more than 100 people via Zoom and about 20 people at the city’s Fairfield Inn.

David Frulla, an attorney who works with industry group Fisheries Survival Fund, told the Standard-Times it was “notable” Lefton was present at the meeting and directly responding to attendees. He said in his recollection, there hasn’t been communication at this level between the BOEM director and fishermen — including during the Obama and Trump administrations.

In a letter sent April 28 to Lefton, Mayor Jon Mitchell wrote the wind energy areas, particularly the Central Bight and Hudson South, were established on “significant” scallop fishing grounds. He proposed the removal of a five-milestrip along the eastern boundary of Hudson South to minimize fishery impacts.

Blair Bailey, general counsel for the Port of New Bedford, told BOEM officials that it appears to the fishing industry that fishermen have a greater burden to prove something than other stakeholders.

He said when they requested a buffer, the “immediate” response from BOEM was a request for the city to provide scientific support. He said the city can and will provide it, but that BOEM’s response “doesn’t seem to apply” to others who provide input.

“When somebody doesn’t want to see a turbine from their house that’s on shore, that wind energy area disappears,” he said. “But when the fishermen say, ‘We need this area, therefore we need you to move things or change things,’ the response doesn’t appear, again from the outside, to be as quick and as accepted as the input from other people.”

Eric Hansen, a retired New Bedford scallop fishermen who owns and operates a few commercial vessels, told the Standard-Times that wind development in the bight is “very concerning.” He said every scallop fisherman on the East Coast uses the bight because they have allocations to catch a certain amount of scallops from an access area there.

For the 20th consecutive year, New Bedford was the nation’s top-earning fishing port. Scallops account for 84% of the port’s value of landings, according to the National Marine Fisheries Service.

The trip from New Bedford to the bight can take 12 to 20 hours and last one to two weeks, Hansen said. The amount of scallops caught in the bight annually can vary, but he said it makes up a “significant” portion of a scallop fisherman’s catch.

Read the full story at the New Bedford Standard-Times

NEW YORK: Video Simulation Shows What Empire Wind Project, Off Long Island And N.J., Will Look Like From Shore

June 23, 2021 — Offshore wind power is coming to New York for the first time, and it would be the largest wind farm in the nation to date.

As CBS2’s Carolyn Gusoff reports, a video simulation of what’s called the Empire Wind Project, off Long Island and New Jersey, shows what it will look like from shore.

Winds of change off Long Island, where offshore wind turbines will one day bring clean energy. To visualize the nation’s first large scale offshore wind farm, with its 174 turbines, the developer created a simulation from Jones Beach, which has some relieved they’re further offshore than first proposed.

The scallop industry objects to its placement.

“Fishermen can’t fish in a wind farm, and so building a wind farm on fishing grounds takes those fishing grounds out of play for the fishermen,” said David Frulla, an attorney for the scallop industry. “You are looking at people losing their livelihoods.”

“Frankly, the biggest threat to our fishing industry is climate change,” Esposito said.

The Bureau of Energy Management invites comment before impact studies are launched.

The Empire Wind Farm would be some 19 miles off Long Branch, New Jersey.

Read the full story at WLNY

Biden to Push Offshore Wind Projects

March 29, 2021 — The Biden administration plans to give wind-power developers access to more of the Atlantic Coast and start a slate of new environmental reviews in an attempt to jump-start the country’s offshore wind business.

White House officials said Monday they want to fast-track leasing in federal waters off the New York and New Jersey coasts, a priority for wind-power interests and state officials.

Much of the concern centers on how wind turbines might affect shipping, whale migrations and commercial fisheries.

The New York Bight is among the country’s three most prolific areas for scallops, said David Frulla, a lawyer who represents the Fisheries Survival Fund, a group including most of the country’s Atlantic Ocean scallop boats.

More turbines will make it harder for large fishing boats to navigate by disrupting the radar they depend on at night, Mr. Frulla said.

“We’re concerned that there’s such a momentum for offshore wind that the fishing industry is going to end up as collateral damage,” Mr. Frulla said.

Read the full story at The Wall Street Journal

Biden administration launches major push to expand offshore wind power

March 29, 2021 — The White House on Monday detailed an ambitious plan to expand wind farms along the East Coast and jump-start the country’s nascent offshore wind industry, saying it hoped to trigger a massive clean-energy effort in the fight against climate change.

The plan would generate 30 gigawatts of offshore wind power by the end of the decade — enough to power more than 10 million American homes and cut 78 million metric tons of carbon dioxide emissions. To accomplish that, the Biden administration said, it would speed permitting for projects off the East Coast, invest in research and development, provide low-interest loans to industry and fund changes to U.S. ports.

Fishing operators also have raised concerns about the impact of wind farms in the Atlantic Ocean, an area critical to the seafood industry.

David Frulla, a partner at the firm Kelley, Drye and Warren who represents the trade association for the Atlantic scallop fishery, said in an interview that his clients have warned federal officials for years about the risks posed by offshore wind development plans.

For example, the southeast tip of an area the administration has identified in the New York Bight called Hudson North intersects with a scallop fishing spot, he said. The eastern perimeter of a second area, Hudson South, is just at the edge of an important area for scallops, Frulla said. Altogether, the scallop catch in the New York Bight is worth tens of millions of dollars, he said.

“We were saying, ‘Don’t roll the dice,” Frulla said. “They rolled the dice.”

The group Frulla represents, the Fisheries Survival Fund, has a case pending in the U.S. Court of Appeals for the District of Columbia Circuit that challenges a decision by the Obama administration to auction offshore leases in the region without doing a lengthy environmental analysis in advance. In that instance, federal officials said they did not have to conduct a full analysis until a company has proposed a construction and operations plan.

By delaying the analysis by several years, Frulla said, the government made it almost impossible to block the project. “Essentially it’s a foregone conclusion,” he said. “There’s so much investment.”

Read the full story at The Washington Post

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.

Federal Relief Package Includes $350 Billion for Small Business – Here are the Details

March 26, 2020 — The following analysis was produced by David Frulla, David Hickey, and Timothy Lavender of Kelley Drye & Warren LLP:

The United States Senate passed H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) late in the evening of Wednesday, March 25. The House of Representatives is expected to consider and pass the bill on Friday, and, President Trump to sign it shortly thereafter.

Title I of Division A of the CARES Act is entitled the Keeping American Workers Paid and Employed Act.  Title I provides over $350 billion in, in part, short-term economic relief for small businesses, non-profit organizations, veterans organizations, and Tribal business concerns  facing business disruption from the novel coronavirus COVID-19. For its part, Title I creates what is known as the “Paycheck Protection Program” (“PPP”).

In summary, the PPP provides $349 billion for expedited, low-interest business interruption loans to small entities. The loans will be backed with a 100% federal guarantee and funding, through the Small Business Administration’s traditional Section 7(a) lending authority. The Section 7(a) program is the SBA’s primary program for providing financial assistance to small businesses that would not otherwise have access to credit for the same uses or on the same terms. There are nearly 2,000 SBA-approved lenders nationwide.  The PPP broadens and increases the flexibility of the Section 7(a) lending program in significant ways.

Principally, under the PPP, funding can be used for a wide range of daily operating expenses. Under the PPP, the loan’s term can be up to ten years. Fees for these loans are waived. Significantly, no collateral or personal loan guarantee is required.  These loans are also non-recourse to a borrower’s principals, if the loan is used for permissible purposes (described below). No pre-payment penalty is allowed. The interest rate is capped at 4%. The maximum loan amount calculation is largely made using monthly payroll costs and capped at $10 million. For eligible “impacted” borrowers (basically, any borrower that qualifies for a loan), loan repayment deferral is available for no less than six months and up to one year. Flexible terms are also available for loan modifications. PPP lending authority will extend “during the covered period” of February 15, 2020, through June 30, 2020.

Further, and with some qualifications, the PPP provides tax-free forgiveness of that portion of these PPP small entity loans used for paying workers, mortgage interest and rent expenses, and utilities during the 8-week period beginning on the date the loan was originated. In addition to current Section 7(a)-approved SBA lenders, the PPP authorizes the SBA and Treasury Department quickly to approve the participation of other lenders (insured depository institutions, credit unions, farm credit system lenders, and other lenders) in originating and servicing these loans.

Because the PPP is utilizing an existing lending program, lending should be able to begin over the near term. The CARES Act sets a 15-day deadline for the SBA to issue regulations needed to carry out the PPP.  Once SBA-approved lenders can proceed to make loans under the program, under standard SBA timelines, an SBA loan can be made available in as little as 36 hours, but generally within 5 to 10 business days.  These loans can be made by the lender without seeking specific SBA approval for any loan.

PPP Qualification
An entity qualifies as a eligible borrower under the PPP if it meets the following: (1) the borrower can make a “good faith” certification of COVID-19-related business injury (quoted below); (2) the borrower meets applicable SBA size standards for number of employees and independence; (3) the borrower was in business on February 15, 2020;  (4) the borrower will use the funds to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments; and (5) the employer is not double-dipping, that is, seeking or having already obtained the same type of PPP loan from another lender.

Read the full analysis here

Jones Act changes would ‘jeopardise countless US jobs’ in offshore wind

December 3, 2019 — US fisheries advocacy body the Fisheries Survival Fund (FSF) has claimed proposed changes to the Jones Act – requiring that cargo, including wind turbines, shipped between US ports be transported on American-flagged vessels – could cost ‘countless of job opportunities’ to local companies in the rapidly emerging Northeast Atlantic offshore wind sector.

Writing to US Customs and Border Protection (CBP) to voice it opposition to the “new interpretations” of the law – which would flex the legislation to allow offshore wind developers to shuttle components to a project site on non-US-owned vessels, FSF said such a move would “allow foreign developers to use foreign vessels for the rapid build-out of offshore wind farms [and would] jeopardise” the economic development potential to local contractors.

“These proposed modifications would place foreign-owned offshore wind energy companies at a unique advantage not afforded to the thousands of US-owned maritime industries, including commercial fisheries,” said FSF counsel David Frulla.

“FSF is not submitting this letter to oppose offshore wind energy development in its entirety. If there is a need for some form of modification to these requirements, those modifications should be narrowly tailored to meet those needs … and they should consider the impacts on our domestic maritime industries and coastal communities in so doing.”

Read the full story at Recharge News

Fishermen face uphill battle in lawsuit over New York wind site

July 1, 2019 — Fishermen and the city of New Bedford are facing an uphill battle in their fight against a New York offshore wind location after losing a lawsuit in September.

Attorney David Frulla, who represents the Fisheries Survival Fund and other plaintiffs in the case, said he was disappointed at the court decision but has not given up.

“I just don’t think the judge understood that these leases aren’t theoretical, that they actually confer rights,” he said.

The Fisheries Survival Fund is leading a dozen plaintiffs. They sued the Bureau of Ocean Energy Management in 2016, saying the agency had not done enough to seek alternatives to important fishing grounds.

United States District Judge Tanya S. Chutkan in September granted the federal government’s motion for summary judgment, meaning she believed they made their case as a matter of law, without a trial.

The plaintiffs filed a motion to amend the decision, which is still pending.

Mayor Jon Mitchell said Friday that the city shares the disappointment of the other plaintiffs but believes there are strong grounds for the judge to reconsider.

“The decisions made by federal agencies about what happens in New York waters have major implications for New Bedford fishermen, so we have no choice but to fight when we believe our interests are not being taken into account,” he said.

Read the full story at the New Bedford Standard-Times

Blockchain could open markets

May 11, 2018 — Consumers are demanding transparency regarding their food. One survey of 1,522 consumers found that as they have become accustomed to getting more information via their phones, their demand for transparency as to all types of products — from medicine to sports to food — has increased. Consumers are not alone. Changes to laws governing supply chain transparency and documentation have imposed considerable obligations on companies to not only know their supplier, but to know their supplier’s supplier, and so forth.

The Obama-era Action Plan for combatting IUU fishing and seafood fraud requires the development of a program to track fishery products along the supply chain. Beginning January 1, 2018, NOAA rolled out its Seafood Import Monitoring Program, which establishes reporting and recordkeeping requirements for fish importers. For 10 groups of species — including cod, red snapper, and tunas — it requires importers provide and report certain records along the entire chain of custody, from harvest to entry into the United States. Information will be entered into the confidential International Trade Data System — not reported to the public or on a label. NOAA has also proposed a voluntary Commerce Trusted Trader Program, which would qualify importers to achieve streamlined entry requirements under the monitoring program. These programs are expected to be expanded to cover all imported fish products in coming years.

Read the full story at National Fisherman