Wyden, Murkowski Bill Would Lift Restrictions on Fishermen’s Use of Capital Construction Accounts
Washington, D.C. - Recognizing changes in the commercial fishing industry and the need to create new jobs and prevent overfishing, Senators Ron Wyden (D-OR) and Lisa Murkowski (R-AK) introduced legislation today that will give America's fishermen greater flexibility in how they can use money set aside in special capital construction funds.
"The Capital Construction Fund program was created in 1976 to help modernize the American fishing industry so it could compete with highly efficient foreign fishing fleets," Wyden said. "Today, the program is a victim of its own success. The fleet is now over capitalized at a time when over fishing is a problem. It is time to let fishermen put the money stranded in these funds to better use than replacing or improving their fishing boats."
"The Capital Construction Fund program is in need of significant reform and our legislation seeks to bring the program into better alignment with the goals and objectives of American fishermen and fisheries management policy," Murkowski said. "At present, there is over $220 million in CCF accounts nation-wide. This is money that is required to be invested in fishing boats and equipment at a time when many of our fisheries are fully or over-capitalized. Our legislation would give fishermen the option to close their accounts without penalty and without being forced to further capitalize. Alaskan fishermen have been asking for a change to this program and I am pleased to co-sponsor this bill."
Nationally, there are an estimated 3,600 CCF accounts containing roughly $220 million. Accounts in the Pacific Northwest (Oregon, Washington, Alaska) are on average larger than accounts in other parts of the country.
Initially, the CCF Program was established as a way to help U.S. fishermen accumulate the funds necessary to develop a modern fleet by allowing them to deposit a portion of their fishing-related earnings into a savings account on a tax-deferred basis. Money withdrawn from the accounts was tax free as long as it was invested in new or rebuilt fishing vessels.
Today, with too many fishing boats, the fleet has become overcapitalized and fishery managers concerned about potential overfishing have begun to reduce the amount of fish that can be caught. As a result, the U.S. commercial fishing fleet now has more harvesting capacity than the US fishery resource can sustainably support. The money that remains on deposit in CCF accounts represents a potential for further overcapitalization at a time when less capitalization is needed.
The Wyden-Murkowski bill will enable those with money in a capital construction account to make a one-time withdrawal without requiring them to re-invest it in the fishing industry. Instead, they will be required to pay the taxes due, but not interest or other penalties. The resulting money would have virtually no restrictions and could then be used for such things as setting up a retirement account, starting a new business or finding other ways to support families and create jobs.
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