[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)''.

                          ____________________