[Congressional Record Volume 156, Number 61 (Wednesday, April 28, 2010)]
[Senate]
[Pages S2759-S2764]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mrs. BOXER:
S. 3268. A bill to amend title 49, United States Code, to prohibit
individuals who have worked on motor vehicle safety issues at NHTSA
from assisting motor vehicles manufacturers with
[[Page S2760]]
NHTSA compliance matters for a period of 3 years after terminating
employment at NHTSA, and for other purposes; to the Committee on
Commerce, Science, and Transportation.
Mrs. BOXER. Mr. President, last August, California Highway Patrol
Officer Mark Saylor, his wife, 13 year old daughter, and brother-in-law
were killed in a tragic car accident that shocked the community of San
Diego and the nation.
Their vehicle, a rental Lexus ES350, reached speeds of 120 mph as the
family desperately called 911 in vain for help. This tragedy should not
have occurred, and sadly, it is just one of many examples across
California and the country of accidents involving Toyota and Lexus
vehicles.
These accidents raise serious questions about the effectiveness of
the recalls and whether Toyota and federal regulators at the National
Highway Traffic Safety Administration, NHTSA, took appropriate and
timely action to protect the public.
At the Senate Commerce Committee hearing on the Toyota recalls this
past March, I called attention to reports that former NHTSA employees
now employed by Toyota worked to limit Toyota's recall. In fact,
Toyota's own internal documents stated that the company had achieved a
``win'' by ``negotiating an equipment recall'' on the Camry and Lexus
ES vehicles that saved Toyota $100 million. It is a shocking example of
a company counting profit wins at the expense of the public's health
and safety.
The revolving door that exists between government regulators at NHTSA
and the auto industry is unacceptable, and it puts consumers at risk.
In fact, the Washington Post reported that as many as 33 former NHTSA
and Department of Transportation, DOT, employees continue to work on
vehicle recalls and safety compliance, capacities that deal directly
with NHTSA's oversight authority over the industry.
That is why I am introducing the Motor Vehicle Safety Integrity
Employment Act, to end the revolving door that exists between our
vehicle safety regulatory agency--NHTSA--and the auto industry.
My bill prohibits NHTSA employees from working for auto manufacturers
for three years in any job that involves written or oral communication
with NHTSA, representing or advising a manufacturer with respect to
motor vehicle safety, or assisting a manufacturer with responding to a
request for information from NHTSA.
This restriction applies to high ranking NHTSA officials, as well as
any individual whose responsibilities during the last 12 months at
NHTSA included administrative, managerial, legal, supervisory, or
senior technical responsibility for any motor vehicle safety-related
program.
My legislation provides penalties for individuals and manufacturers
who violate the law. Manufacturers are subject to fines not less than
$100,000 and the amount equal to 90 percent annual compensation paid to
that employee.
Finally, our bill requires the Inspector General to conduct a
comprehensive study of DOT's policies related to post-employment
restrictions for employees who handle motor vehicle safety related work
beyond NHTSA at DOT, and DOT employees who handle all safety related
work across all transportation modes. My legislation gives DOT the
authority to take appropriate action as warranted.
We need to ensure that consumer safety is not compromised by cozy
relationships between government regulators and industry. I am proud to
introduce this bill to protect the public and look forward to working
with my colleagues to enact this legislation as quickly as possible.
Mr. President, I ask unanimous consent that a letter of support be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
April 27, 2010.
Hon. Barbara Boxer,
U.S. Senate,
Washington, DC.
Dear Senator Boxer; We are writing to strongly endorse the
Motor Vehicle Safety Integrity Employment Act you are
sponsoring that will close a legal loophole concerning post-
government employment in the auto industry by former
government personnel of the National Highway Traffic Safety
Administration (NHTSA). Congressional hearings and media
investigations into high speed crashes and deaths caused by
unintended acceleration, the premature closure of agency
defect investigations and the subsequent recall of ten
million vehicles by Toyota Motor Corporation exposed a
revolving door of former NHTSA regulators representing the
automaker in safety matters before the agency.
Activities by former NHTSA employees who are subsequently
hired by automakers have the potential to jeopardize the
agency's investigations, rulemakings, and oversight
functions. These ethics issues need to be corrected and
addressed in legislation. It is essential and expected that
NHTSA conducts impartial analyses of all vehicle safety
issues. It is critical to protect the integrity of the
agency's investigatory and enforcement role, as well as to
ensure public safety when the agency sets safety standards.
Your legislation is needed in order to restore the trust of
the American public in our government regulators and ensure
the safety of millions of vehicles that families depend on to
travel to work, transport children to school and to bring us
home safely.
Your legislation, when enacted, will prevent undue industry
influence in the agency's enforcement and regulatory
decision-making and address an unacceptable defect in current
ethics restrictions for former NHTSA employees. Thank you for
your leadership.
Sincerely,
Joan Claybrook, President Emeritus, Public Citizen;
Clarence Ditlow, Executive Director, Center for Auto
Safety; Janette Fennell, Founder & President, KIDS AND
CARS; Rosemary Shahan, President, Consumers for Auto
Reliability and Safety; Ami Gadhia, Policy Counsel,
Consumers Union; Jacqueline S. Gillan, Vice President,
Advocates for Highway and Auto Safety; Jack Gillis,
Director of Public Affairs, Consumer Federation of
America; Andrew McGuire, Executive Director, Trauma
Foundation; Ellen Bloom, Director, Federal Policy and
Washington Office, Consumers Union.
______
By Mr. McCAIN:
S. 3270. A bill to include the county of Mohave, in the State of
Arizona, as an affected area for purposes of making claims under the
Radiation Exposure Compensation Act based on exposure to atmospheric
nuclear testing; to the Committee on the Judiciary.
Mr. McCAIN. Mr. President, I am pleased to introduce legislation that
would amend the Radiation Exposure Compensation Act, RECA, by adding
Mohave County, AZ, to the list of counties eligible for downwinder
compensation. A similar proposal was introduced in the House of
Representatives by Congressman Trent Franks. I'm hopeful this bill will
help close a painful chapter for those Arizonans who were arguably the
most affected by nuclear weapons testing during the Cold War.
In 1990, Congress enacted the Radiation Exposure Compensation Act to
compensate victims or their survivors who suffered certain illnesses
caused by fallout exposure ``down wind'' of atmospheric nuclear weapons
testing in the 1940's and lasting into the 1960's. Among various
requirements, compensation eligibility is limited to certain affected
counties which are specifically listed in the law. Astonishingly,
despite its close proximity to the Nevada Test Site, the original RECA
law and its subsequent amendments never listed Mohave County proper as
an affected area. I believe the people of Mohave County deserve to see
righted this unjust policy which has obstructed their ability to
qualify for compensation.
I understand that several of my colleagues have proposed similar RECA
amendments based on data suggesting that their home states were also
``down wind'' of nuclear weapons testing. In addition, my colleague,
Senator Tom Udall, has introduced a far reaching legislative proposal
to vastly expand the RECA program. I would hope that as these various
RECA proposals advance through the legislative process, Congress gives
thorough consideration to an April 2005 report by the National Academy
of Sciences, NAS, that assessed, among other things, whether additional
geographic areas should be added to the RECA program. The NAS study
revealed a much wider area of radioactive fallout then originally
identified when the RECA law was first written. The report also
recommended replacing the geographic area criteria with a new science-
based process for determining compensation eligibility, a method
similar to what's used in the Radiation Exposed-Veterans Compensation
Act and the Energy Employees Occupational Illness Compensation Program
Act. I believe it is worthwhile
[[Page S2761]]
for policy makers to consider the recommendations of the NAS report.
In the meantime and until a comprehensive overhaul of RECA is
developed, I will work within the parameters of the existing RECA law
in my efforts to ensure that the people of Mohave County are treated
fairly in this matter. I encourage my colleagues to support this bill.
______
By Mr. UDALL of New Mexico:
S. 3271. A bill to amend section 30166 of title 49, United States
Code, to require the installation of event data recorders in all motor
vehicles manufactured for sale in the United States, and for other
purposes; to the Committee on Commerce, Science, and Transportation.
Mr. UDALL of New Mexico. Mr. President, I rise today to introduce
legislation that I believe will help improve the safety of automobile
drivers and passengers. The legislation, the Vehicle Safety
Improvements Act, would, among other things, require all automobiles
sold in the United States be equipped with an event data recorder, an
EDR.
Event data recorders provide a report of a vehicle's operating
statistics--things like the throttle position and speed of the
vehicle--during the last seconds before and immediately after a crash.
They serve a similar function as the black boxes that are in each
airplane by documenting critical information leading up to an incident.
Unlike black boxes, an EDR doesn't record the voices of the vehicle
occupants. It simply preserves the vehicle's internal operating data.
The information stored by an EDR can be crucial in determining what
happened in the last few seconds prior to a crash and the moments
immediately after. If a vehicle doesn't have a recorder, or if the data
is not easily accessible, this information can be lost. That leaves
local and Federal investigators little to work with as they try to
determine whether a vehicle malfunction was to blame. Unfortunately,
while the majority of vehicles in the United States are currently
equipped with these recorders, many still do not have them.
In 2006, the National Highway Traffic Safety Administration, NHTSA,
created a framework for the type of information to be recorded by event
data recorders in light-duty vehicles, but it stopped short of
requiring the recorders. If the vehicle manufacturer installs an event
data recorder in a car, it must comply with the rule. But there is no
requirement that the manufacturer install the recorder in the first
place.
NHTSA's 2006 rule further requires the manufacturers to ensure that a
tool to read the recorder is commercially available. Today, while there
are tools commercially available, there is no one universal tool--
creating a challenge for investigators who must carry a suitcase of
readers with them on investigations. This is an unnecessary burden that
can be easily addressed.
This particular burden came to light recently in the context of the
tragic Toyota crashes. During hearings held by Chairman Rockefeller in
the Commerce Committee, we learned that although Toyotas were equipped
with EDRs, until recently they were only able to be read by one
computer in the entire United States. That is why, in addition to
requiring recorders in all vehicles for sale in the United States, the
Vehicle Safety Improvements Act will also require that recorders be
easily read by a universal tool regardless of make or model of the
vehicle.
In addition, NHTSA's rule also fails to address medium- and heavy-
duty vehicles. My legislation would require NHTSA to issue a rule
addressing those vehicles as well. While they comprise a small
percentage of the vehicle miles traveled on an annual basis, medium-
and heavy-duty vehicles are overrepresented in crashes resulting in
fatalities. In these crashes, an event data recorder would be a useful
tool during the crash investigation in determining the cause of the
crash.
Finally, my bill protects privacy by ensuring that the data can only
be accessed with the vehicle owner's permission when authorized by a
court or a legal proceeding or by a government motor vehicle safety
agency.
Adding these recorders would not cost much. In their rulemaking,
NHTSA estimated the cost for the manufacturer to install an event data
recorder at just over $2 per vehicle. That is a small price to pay for
the critical information that can ultimately be used to save lives in
the future.
Vehicle crashes are horrible and oftentimes tragic. They result in
damage, injuries, and too often fatalities. They create congestion and
cost our economy billions of dollars each year. Event data recorders
will not prevent crashes, but they will help to determine what caused
the crash and, in the case of a vehicle malfunction, help to identify
solutions to improve vehicle performance. In the end, the data they
provide will serve to ensure a safer travel environment for all.
I urge my Senate colleagues to join me in this important effort to
improve vehicle safety. I look forward to working with them and my
chairman, Chairman Rockefeller, who has been a champion on issues of
transportation safety, to pass the Vehicle Safety Improvements Act this
year.
______
By Mr. BAUCUS (for himself and Mr. GRASSLEY):
S. 3275. A bill to extend the Caribbean Basin Economic Recovery Act,
to provide customs support services to Haiti, and for other purposes;
to the Committee on Finance.
Mr. BAUCUS. Mr. President, one of Aesop's Fables teaches us, ``In
union there is strength.''
In 2009, Haiti's future was beginning to strengthen. A U.S. trade
preference program, known as the Haitian Hemispheric Opportunity
through Partnership Encouragement Act, or HOPE II, created incentives
to increase textile and apparel production in Haiti. As a result,
Haiti's textile and apparel sector was growing, creating new jobs and a
viable economic future.
But on January 12, 2010, Haiti was struck by a 7.0 magnitude
earthquake that took hundreds of thousands of lives, left a million
people homeless, and shattered Haiti's burgeoning economy. As Haiti
recovers from this devastation, we must unite with our neighbor to help
provide the strength that it needs to recover and rebuild.
Today, Senator Grassley and I introduce the Haiti Economic Lift
Program Act of 2010--the HELP Act--to strengthen Haiti's path to
economic recovery. Congressmen Levin, Camp, and Rangel are also
introducing a companion bill in the House.
The HELP Act would build on the success of the HOPE Act by expanding
access to the U.S. market for textile and apparel products from Haiti.
As a result, it would create incentives for immediate and long-term
private investment in Haiti, which would in turn create sustainable
jobs and a stable economy. The HELP Act would also extend all of our
trade preference programs for Haiti to 2020, ensuring that Haiti could
rely on these tariff benefits as it plans its own economic future.
As we considered the needs of Haiti, we were also watchful of the
needs of our domestic textile industry. We worked closely with the
domestic industry for months to craft a bill that would not hurt our
own workers, even as we help others.
The HELP Act represents a landmark union among the Senate, the House,
Democrats, Republicans, and the domestic textile industry to help Haiti
recover from its devastation. This union resulted in an unprecedented
bill that will help Haiti emerge from the earthquake stronger than
ever.
I urge my colleagues to join this union and quickly approve this
legislation.
Mr. GRASSLEY. Mr. President, I have come to the floor to speak about
a bill that Senator Baucus and I have introduced today. It's called the
Haiti Economic Lift Program Act of 2010.
The purpose of our bill is to help Haiti recover from the devastation
it suffered in the massive earthquake that struck the country in
January.
How we respond to natural disasters says a lot about ourselves,
whether it's flooding in Iowa or an earthquake in Haiti.
The idea behind the bill is simple. First, we extend current trade
preferences for Haiti through fiscal year 2020, to provide more
certainty for companies doing business either in Haiti or with Haitian
partners.
Second, we grant additional duty-free access to the U.S. market for
targeted
[[Page S2762]]
categories of textile and apparel products. That will help to draw more
investment into Haiti's economy and thereby promote long-term job
creation, economic development, and political stability.
Our bill is a bipartisan, bicameral compromise. It is the product of
3 months of collaborative negotiations among the chairmen and ranking
members of the Senate Finance and House Ways and Means committees and
with representatives of the U.S. textile industry and the Haitians
themselves.
We also reached out to members of Congress who have constituent
textile and apparel interests, to ensure that their concerns were
addressed.
Our ability to reach agreement on the bill is a testament to the good
will and good faith of all those involved in our negotiations.
The result reflects a careful balancing of interests, including
Haiti's interest in spurring more investment in its economy, the
interests of our trading partners in Central America in maintaining
existing trade relationships, and our own domestic textile interests.
We took special care to address the sensitivities of our domestic
producers.
In fact, I have a letter here from the two leading U.S. textile
industry organizations. Their letter expresses support for our bill and
encourages the Senate to pass the bill in an expeditious manner by
unanimous consent.
Finally, I want to make special mention of my colleagues from states
with textile interests, and to thank them for their constructive input
in developing this legislation.
Without their engagement and support, we would not have arrived at
the compromise bill that is being introduced today in both the Senate
and the House of Representatives.
This is a balanced bill that addresses an urgent priority in the
Western Hemisphere.
I ask my colleagues to give the bill their unanimous support when it
comes before the Senate.
Mr. President, I ask unanimous consent that a letter of support be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
April 26, 2010.
Hon. Max Baucus,
Chairman, Committee on Finance, U.S. Senate, Dirksen Senate
Office Building, Washington, DC.
Hon. Charles Grassley,
Ranking Member, Committee on Finance, U.S. Senate, Dirksen
Senate Office Building, Washington, DC.
Dear Chairman Baucus and Ranking Member Grassley: As
representatives of the United States textile industry, we are
writing in regard to the Haiti Economic Lift Program Act of
2010, a bill to provide enhanced market access for apparel
products manufactured in Haiti.
After lengthy negotiations with your staffs, we are pleased
that we were able to reach an acceptable compromise on this
important legislation. While the bill provides Haiti with a
path forward for long-term economic recovery in the wake of
its devastating earthquake, it also takes into account
various sensitivities from the perspective of the U.S.
textile industry.
For example, the bill grants significant increases in duty
free treatment through a system of Tariff Preference Levels
(TPLs) but also institutes sub-limits on highly sensitive
products that can be exported under the TPLs. The sub-limits
were a key priority for the domestic industry and will
prevent over concentration of exports in one or two key areas
that could be particularly damaging to U.S. producers. In
addition, the bill extends the current Caribbean Basin Trade
Partnership Act (CBTPA) through 2020. This extension will
help to provide long-term certainty for a program that is of
significant value for U.S. and Western Hemispheric trading
partners.
Obviously, we take very seriously the impact that
additional duty free imports may have on U.S. producers and
workers as well as our Western Hemispheric customers. Noting
those concerns, we also recognize that the devastating
circumstances in Haiti produced an exceptional case that
motivated Congress to develop a quick response and have
worked with the Committee to develop a package that strikes
an acceptable balance. We must stress, however, that this
package does not set a precedent for Any future trade
preference legislation.
For all these reasons, we are encouraging our Congressional
members that represent the nearly 500,000 U.S. textile and
apparel workers to approve this legislation in an expeditious
manner under suspension of the rules in the House and by
unanimous consent in the Senate.
Sincerely,
Augustine D. Tantillo,
Executive Director, American Manufacturing Trade Action
Coalition (AMTAC).
Cass M. Johnson,
President, National Council of Textile Organizations
(NCTO).
______
Mr. WYDEN (for himself and Ms. Murkowski):
S. 3276. A bill to provide an election to terminate certain capital
construction funds without penalties; to the Committee on Finance.
Mr. WYDEN. Mr. President, today I am introducing a bill to reform the
Capital Construction Fund to address major changes in the Nation's
fisheries and to allow the Nation's fishers to have access to needed
funds, to prevent over-fishing and to help create jobs.
The Capital Construction Fund, CCF, program was originally developed
at a time when American fishes were having a hard time competing with
highly efficient foreign fishing vessels--modern boats that often
harvested US fishery resources within sight of our own shores. The
initial idea behind the CCF Program was to enable US fishers to
accumulate the funds necessary to develop a modern fishing fleet by
allowing them to deposit a portion of their fishing-related earnings
into a CCF savings account on a tax-deferred basis. Under the CCF
program, monies subsequently withdrawn from the CCF accounts would
remain tax free as long as they were invested in new or rebuilt fishing
vessels. At the same time, any unauthorized withdrawals from CCF
accounts were subject to severe interest and other penalties.
The program was a success--the CCF program helped the U.S. industry
build a modern state-of-the-art fishing fleet. Unfortunately, that
fleet has now become overcapitalized--a problem that has been
exacerbated as managers have become more and more concerned about
potential overfishing and have begun to reduce the amount of fish that
they allow fishers to catch each year. As a result, the U.S. commercial
fishing fleet now has more harvesting capacity than the U.S. fishery
resource can sustainably support. The problem now is that the monies
that remain on deposit in CCF accounts represent a potential for
further overcapitalization at a time when less capitalization is
needed. Yet the CCF regulations currently penalize withdrawals made for
anything other than a bigger or better boat.
The issue now is what to do about the money that remains ``stranded''
in existing CCF accounts. Ironically, just as the current generation of
fishers is getting ready to retire, the program puts heavy penalties on
them if they take money out of their CCF accounts without using it for
anything other than to further capitalize an already overcapitalized
fleet.
The resulting situation is problematic for the fishers, the industry
and the resource. That's why I am introducing legislation today along
with my colleague Senator Murkowski--to address the problem of stranded
capital still on deposit in various CCF accounts and to relieve the
pressure to increase further capitalization of the fishing fleet. My
legislation will enable CCF fund-holders to make a one-time withdrawal
from their CCF accounts without requiring them to re-invest it in the
fishing industry. Instead, they will be required to pay the taxes due
on the monies withdrawn, but without having to pay interest or other
penalties on such withdrawals. Those funds would be freed up for other
purposes, including starting a new business and finding other ways to
support and create jobs. An income-averaging formula would be applied
to the withdrawals so as to avoid an excessive tax rate on the one-time
withdrawal. The fishers taking advantage of such an opportunity to take
money out of their CCF accounts penalty free would then be required to
close their CCF accounts and would be prohibited from further
participation in the program. This is a win-win-win situation. The
fisher gets to take the money out of his CCF without having to pay
penalties and interest, but still pays the taxes when due; the
Government gets taxes on the withdrawals; and the resource and the
fishers who remain in the fishery avoid further capitalization of an
already over-capitalized industry.
I look forward to working with Senator Murkowski, the fishing
community and the bill's other supporters to
[[Page S2763]]
advance this legislation to the President's desk.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3276
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. ELECTION TO TERMINATE CERTAIN CAPITAL CONSTRUCTION
FUNDS.
(a) Amendments to Chapter 535 of Title 46, United States
Code.--
(1) In general.--Chapter 535 of title 46, United States
Code, is amended by adding at the end the following new
section:
``Sec. 53518. Election to terminate
``(a) In General.--
``(1) Election.--Any person who has entered into an
agreement under this chapter with respect to a vessel
operated in the fisheries of the United States may make an
election under this paragraph to terminate the capital
construction fund established under such agreement.
``(2) Effect of election on individuals.--In the case of an
individual who makes an election under paragraph (1) with
respect to a capital construction fund--
``(A) any amount remaining in such capital construction
fund on the applicable date shall be distributed to such
individual as a nonqualified withdrawal, except that--
``(i) in computing the tax on such withdrawal, except as
provided in paragraph (4), subsections (c)(3)(B) and (f) of
section 53511 shall not apply; and
``(ii) the taxpayer may elect to average the income from
such withdrawal as provided in subsection (b); and
``(B) such individual shall not be eligible to enter into,
directly or indirectly, any future agreement to establish a
capital construction fund under this chapter with respect to
a vessel operated in the fisheries of the United States.
``(3) Effect of election for entities.--
``(A) In general.--In the case of a person (other than an
individual) who makes an election under paragraph (1)--
``(i) the total amount in the capital construction fund on
the applicable date shall be distributed to the shareholders,
partners, or members of such person in accordance with the
terms of the instruments setting forth the ownership
interests of such shareholders, partners, or members;
``(ii) each shareholder, partner, or member shall be
treated as having established a special temporary capital
construction fund and having deposited amounts received in
the distribution into such special temporary capital
construction fund;
``(iii) no gain or loss shall be recognized with respect to
such distribution;
``(iv) the basis of any shareholder, partner, or member in
the person shall not be reduced as a result of such
distribution;
``(v) any amounts not distributed pursuant to clause (i)
shall be distributed in a nonqualified withdrawal; and
``(vi) such person shall not be eligible to enter into,
directly or indirectly, any future agreement to establish a
capital construction fund under this chapter with respect to
a vessel operated in the fisheries of the United States.
``(B) Special temporary capital construction funds.--For
purposes of this chapter, a special temporary capital
construction fund shall be treated in the same manner as a
capital construction fund established under section 53503,
except that the following rules shall apply:
``(i) A special temporary capital construction fund shall
be established without regard to any agreement under section
53503 and without regard to any eligible or qualified vessel.
``(ii) Section 53505 shall not apply and no amounts may be
deposited into a special temporary capital construction fund
other than amounts received pursuant to a distribution
described in subparagraph (A)(i).
``(iii) In the case of any amounts distributed from a
special temporary capital construction fund directly to a
capital construction fund of the taxpayer established under
section 53505--
``(I) no gain or loss shall be recognized;
``(II) the limitation under section 53505 shall not apply
with respect to any amount so transferred;
``(III) such amounts shall not reduce taxable income under
section 53507(a)(1); and
``(IV) for purposes of section 53511(e), such amounts shall
be treated as deposited in the capital construction fund on
the date that such funds were deposited in the capital
construction fund with respect to which the election under
paragraph (1) was made.
``(iv) In the case of any amounts distributed from a
special temporary capital construction fund pursuant to an
election under paragraph (1), clauses (i) and (ii) of
paragraph (2)(A) shall not apply to so much of such amounts
as are attributable to earnings accrued after the date of the
establishment of such special temporary capital construction
fund.
``(v) Any amount not distributed from a special temporary
capital construction fund before the due date of the tax
return (including extension) for the last taxable year of the
individual ending before January 1, 2012, shall be treated as
distributed to the taxpayer on the day before such due date
as if an election under paragraph (1) were made by the
taxpayer on such day.
``(C) Regulations.--The joint regulations shall provide
rules for--
``(i) assigning the amounts received by the shareholders,
partners, or members in a distribution described in
subparagraph (A)(i) to the accounts described in section
53508(a) in special temporary capital construction funds; and
``(ii) preventing the abuse of the purposes of this
section.
``(4) Tax benefit rule.--Rules similar to the rules under
section 53511(f)(3) shall apply for purposes of determining
tax liability on any nonqualified withdrawal under paragraph
(2)(A), (3)(A)(v), or (3)(B)(v).
``(5) Applicable date.--For purposes of this subsection,
the term `applicable date' means--
``(A) with respect to any capital construction fund which
has a balance of less than $1,000,000 on the date that an
election under paragraph (1) was made, the date of such
election; and
``(B) with respect to any other capital construction fund,
the last day of the taxable year which includes the date of
the enactment of this section.
``(6) Election.--Any election under paragraph (1)--
``(A) may only be made--
``(i) by a person who maintains a capital construction fund
with respect to a vessel operated in the fisheries of the
United States on the date of the enactment of this section;
or
``(ii) by a person who maintains a capital construction
fund which was established pursuant to paragraph (3)(A)(ii)
as a result of an election made by an entity in which such
person was a shareholder, partner, or member;
``(B) shall be made not later than the due date of the tax
return (including extensions) for the person's last taxable
year ending on or before December 31, 2012; and
``(C) shall apply to all amounts in the capital
construction fund with respect to which the election is made.
``(b) Election to Average Income.--At the election of an
individual who has received a distribution described in
subsection (a), for purposes of section 1301 of the Internal
Revenue Code of 1986--
``(1) such individual shall be treated as engaged in a
fishing business, and
``(A) such distribution shall be treated as income
attributable to a fishing business for such taxable year.''.
(2) Conforming amendments.--
(A) Section 53511 of title 46, United States Code, is
amended by striking ``section 53513'' and inserting
``sections 53513 and 53518''.
(B) The table of sections for chapter 535 of title 46,
United States Code, is amended by inserting after the item
relating to section 53517 the following new item:
``53518. Election to terminate.''.
(b) Amendments to the Internal Revenue Code of 1986.--
(1) In general.--Section 7518 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subsection:
``(j) Election to Terminate Capital Construction Funds.--
``(1) In general.--Any person who has entered into an
agreement under chapter 535 of title 46 of the United States
Code, with respect to a vessel operated in the fisheries of
the United States may make an election under this paragraph
to terminate the capital construction fund established under
such agreement.
``(2) Effect of election on individuals.--In the case of an
individual who makes an election under paragraph (1) with
respect to a capital construction fund, any amount remaining
in such capital construction fund on the applicable date
shall be distributed to such individual as a nonqualified
withdrawal, except that--
``(A) in computing the tax on such withdrawal, except as
provided in paragraph (4), paragraphs (3)(C)(ii) and (6) of
subsection (g) shall not apply, and
``(B) the taxpayer may elect to average the income from
such withdrawal as provided in paragraph (7).
``(3) Effect of election for entities.--
``(A) In general.--In the case of a person (other than an
individual) who makes an election under paragraph (1)--
``(i) the total amount in the capital construction fund on
the applicable date shall be distributed to the shareholders,
partners, or members of such person in accordance with the
terms of the instruments setting forth the ownership
interests of such shareholders, partners, or members,
``(ii) each shareholder, partner, or member shall be
treated as having established a special temporary capital
construction fund and having deposited amounts received in
the distribution into such special temporary capital
construction fund,
``(iii) no gain or loss shall be recognized with respect to
such distribution,
``(iv) the basis of any shareholder, partner, or member in
the person shall not be reduced as a result of such
distribution, and
``(v) any amounts not distributed pursuant to clause (i)
shall be distributed as a nonqualified withdrawal.
``(B) Special temporary capital construction funds.--For
purposes of this section, a special temporary capital
construction fund shall be treated in the same manner as a
capital construction fund established under section 53503 of
title 46, United States Code, except that the following rules
shall apply:
[[Page S2764]]
``(i) Subsection (a) shall not apply and no amounts may be
deposited into a special temporary capital construction fund
other than amounts received pursuant to a distribution
described in subparagraph (A)(i).
``(ii) In the case of any amounts distributed from a
special temporary capital construction fund directly to a
capital construction fund of the taxpayer established under
section 53505 of title 46, United States Code--
``(I) no gain or loss shall be recognized;
``(II) the limitation under subsection (a) shall not apply
with respect to any amount so transferred;
``(III) such amounts shall not reduce taxable income under
subsection (c)(1)(A); and
``(IV) for purposes of subsection (g)(5), such amounts
shall be treated as deposited in the capital construction
fund on the date that such funds were deposited in the
capital construction fund with respect to which the election
under paragraph (1) was made.
``(iii) In the case of any amounts distributed from a
special temporary capital construction fund pursuant to an
election under paragraph (1), subparagraphs (A) and (B) of
paragraph (2) shall not apply to so much of such amounts as
are attributable to earnings accrued after the date of the
establishment of such special temporary capital construction
fund.
``(iv) Any amount not distributed from a special temporary
capital construction fund before the due date of the tax
return (including extension) for the last taxable year of the
individual ending before January 1, 2012, shall be treated as
distributed to the taxpayer on the day before such due date
as if an election under paragraph (1) were made by the
taxpayer on such day the date.
``(C) Regulations.--The joint regulations shall provide
rules for--
``(i) assigning the amounts received by the shareholders,
partners, or members in a distribution described in
subparagraph (A)(i) to the accounts described in subsection
(d)(1) in special temporary capital construction funds; and
``(ii) preventing the abuse of the purposes of this
section.
``(4) Tax benefit rule.--Rules similar to the rules under
subsection (g)(6)(B) shall apply for purposes of determining
tax liability on any nonqualified withdrawal under paragraph
(2), (3)(A)(v), or (3)(B)(iv).
``(5) Applicable date.--For purposes of this subsection,
the term `applicable date' means--
``(A) with respect to any capital construction fund which
has a balance of less than $1,000,000 on the date that an
election under paragraph (1) was made, the date of such
election; and
``(B) with respect to any other capital construction fund,
the last day of the taxable year which includes the date of
the enactment of this subsection.
``(6) Election.--Any election under paragraph (1)--
``(A) may only be made--
``(i) by a person who maintains a capital construction fund
with respect to a vessel operated in the fisheries of the
United States on the date of the enactment of this
subsection, or
``(ii) by a person who maintains a capital construction
fund which was established pursuant to subparagraph
(3)(A)(ii) as a result of an election made by an entity in
which such person was a shareholder, partner, or member,
``(B) shall be made not later than the due date of the tax
return (including extensions) for the person's last taxable
year ending on or before December 31, 2012, and
``(C) shall apply to all amounts in the capital
construction fund with respect to which the election is made.
``(7) Election to average income.--At the election of an
individual who has received a distribution described in
paragraph (2), for purposes of section 1301--
``(A) such individual shall be treated as engaged in a
fishing business, and
``(B) such distribution shall be treated as income
attributable to a fishing business for such taxable year.''.
(2) Conforming amendment.--Section 7518(g)(1) of such Code
is amended by striking ``subsection (h)'' and inserting
``subsections (h) and (j)''.
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