Congressman Don Young (R-AK) and Congressman Jim McDermott (D-WA) have introduced H.R. 2241, bipartisan legislation that would make changes to Capital Construction Fund (CCF) program for those accounts held by fishermen. The CCF was initially established to provide a method of putting fishing earnings toward new fishing vessel construction at a time when the United States policy was to replace the foreign fishing fleets which had dominated many fisheries right off the U.S. coast. However, many domestic fisheries are fully capitalized and incentive programs to increase fishing capacity like the CCF are no longer necessary.
This legislation would allow fishing vessels owners who have existing Capital Construction Fund accounts to retire those accounts. While those who decide to participate in the voluntary retirement of their CCF account will be required to pay the necessary taxes, they will not be penalized for this action.
“When the Capital Construction Fund was first created, its purpose was to help our commercial fishing fleets be more competitive and productive,” said Congressman Young (R-AK). “It has served its purpose well, but times have changed. We have completely replaced the foreign fleets that once hammered Alaskan fisheries with a domestic fishing fleet that fishes sustainably and based on science. But we now find ourselves in a time where we really do not want to increase the domestic fishing capacity. If we do not want to increase the fishing capacity, then we need to allow those who have existing CCF accounts to take their money out of the program. Unfortunately, under current law, the penalties on removing these funds will hurt the very people we are trying to help. Since the underlying reason for the CCF has now changed and we do not want to build new fishing vessels, we need to allow those who participated in the CCF to change with the time and to do so without being penalized.”
“We put the CCF program in place to help fishermen succeed and remain competitive, and the program continues to serve this purpose. But as the industry adapts and changes, it’s important that we change our laws accordingly,” said Congressman Jim McDermott (D-WA). “This bill does that – it helps those fishermen who have worked hard and saved, and it also keeps these funds from being used to buy unneeded boats or make wasteful renovations. It’s good for our fishermen and helps ensure that our fisheries remain healthy and sustainable.”
Implemented in the 1970’s, when fish stocks were much more bountiful and fishing fleets were far less productive, the Capital Construction Fund (CCF) program allows fishing vessel owners to set aside proceeds from commercial fishing operations on a tax-deferred basis for the purposes of refurbishing or replacing their fishing vessel(s). This financing program, operated by the National Marine Fisheries Service, played a key role in helping to build the fleets needed to Americanize our fisheries over the past 20 years.