It’s no secret that the health of our coastal communities is dependent of the success of local fishermen and the jobs they create. In my district of Southwest Washington and all along the West Coast, the groundfish fleet and the 3,000 jobs it supports are centrally important.
But fishermen off the coasts of Washington, Oregon and California are struggling to sustain their businesses, due in large part to unnecessary regulatory and financial burdens. Many fishing businesses in the West Coast groundfish fishery have struggled to pay high interest rates on federal loans and fees on their catch. In order to provide some much needed economic relief, I have introduced H.R. 2646, the Revitalizing the Economy of Fisheries in the Pacific or REFI Act. This legislation ensures these fishermen receive the same interest rates on federal loans as other businesses, and extends the length of these loans from 30 to 45 years. The bill also reduces the cost recovery fees the National Oceanic and Atmospheric Administration (NOAA) collects from fishermen to pay down their loans.
The West Coast groundfish fishery was declared an economic disaster in 2000, because of overcapitalization and overfishing. In 2003, Congress authorized buyback loans for the fishery to decrease fishing pressure and support a catch-share program in the fishery. These loans help eliminate overfishing by buying out the permits of those willing to leave the fleet. Congress was responding to a very real need, but we have since learned that the loans were structured in an unsustainable manner.
After Congress initiated the buyback, there was no payment mechanism set up for 18 months while interest accrued on the principle loan. As of this year, the fishermen have paid about $20 million of interest on the loan, but have made very little progress on the principle of the loan, which means $27 million is still owed for the original $35 million federal loan.
Fishermen in the region have been diligently paying back the loan -- plus interest -- but at its current rate, too many in the industry are finding it unaffordable to keep up. The more I hear from fishermen here in Southwest Washington, the more it is apparent that the cost of operating a fishing business is continuing to grow – from the remaining loans, to observer and monitoring costs, to state landing taxes. We need to ensure that federal policy is not adding to the problem and threatening the viability of these vital small businesses.
It’s time to update the terms of this loan program so that the industry can stay afloat.If you take out a loan today, rates are much more reasonable than they were in 2003 when this program was established. By leveling the playing field for those fishermen who have been paying these loans, we’re providing small business relief, putting money back into the local economy, and doing it in a responsible, practical way. Refinancing increases the chances of the loans being fully repaid -- plus interest. In the long run, it’s very likely this bill will bring more money into the treasury by keeping fishermen fishing and able to make their payments.
This bill enjoys broad, bipartisan support both in Congress and in fishing communities up and down the West Coast. I appreciate Senator Maria Cantwell (D-WA) introducing the companion legislation in the U.S. Senate. The Pacific Fishery Management Council is also highly supportive of this bill and believes it will strengthen our ground fishery and help our economy.
I am working expeditiously to pass the REFI Act, as I believe it will have an immediate positive economic effect on our fishing businesses and our rural Washington coastal communities that rely on these fishermen.