Bill Reforming CCFs for Fishermen Introduced
June 15, 2011
“Right now, the way this fishery finance program works is that we penalize fishermen in the wallet just as they’re trying to retire,” said Murkowski, the lead Republican sponsor of the bill. “By making a necessary change to existing law, we’re giving them a one-time opportunity to leave the program and not be forced to spend money unnecessarily.”
“There was a time when CCF accounts were an integral part of building the modern and efficient fleet of fishing vessels the U.S. needed to compete with foreign fishing outfits,” Wyden said. “But the program’s success has actually made it less necessary and the money that is sitting idle in CCF accounts is money that can be better used to start new businesses or create jobs. This bill will make it so that fishermen aren’t penalized for withdrawing that money, which could be better used elsewhere.”
The Capital Construction Fund (CCF) program was created in 1976 and allows fishing vessel owners to set aside some of their profits on a tax-deferred basis, as long as those dollars are spent on refurbishing or replacing their boats. Withdrawals from the fund for any other reason are strongly discouraged and subject to standard taxes, interest, and penalty fees. The program has become a victim of its own success, and now vessel owners – when the time comes they want to stop fishing and exit the industry – are forced to pay high penalties for taking their proceeds out of the fund, without the intent to renovate their boats or buy new ones. The CCF program would remain intact for those fishermen who would like to remain in the industry and use its tax benefits to upgrade their fishing vessels.
“There are millions of dollars set aside in the CCF nationwide.” Murkowski added. “The current policy leaves fisherman who want to exit the industry a choice between taking a huge loss in taxes or building bigger and better boats that they and the fishery don’t need. This bill adds a common-sense way out for business owners who want to retire and get out of the fishing industry.”
Senators Mark Begich (D-AK), Maria Cantwell (D- WA) and Patty Murray (D-WA) have also signed on as co-sponsors for the legislation.
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