[Congressional Record Volume 157, Number 86 (Wednesday, June 15, 2011)]
[Senate]
[Page S3837]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself, Ms. Murkowski, Mrs. Murray, Mr. 
        Begich, and Ms. Cantwell):
  S. 1208. 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 reintroducing 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 overfishing and to help create jobs.
  The Capital Construction Fund, CCF, program was originally developed 
at a time when American fishers were having a hard time competing with 
highly efficient foreign fishing vessels, modern boats that often 
harvested U.S. fishery resources within sight of our own shores. The 
initial idea behind the CCF Program was to enable U.S. 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program, monies subsequently withdrawn from the CCF accounts would 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 reintroducing 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 fundholders to make a one-time withdrawal 
from their CCF accounts without requiring them to reinvest 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 overcapitalized industry.
  I look forward to working with Senator Murkowski, the fishing 
community, and the bill's other supporters to advance this legislation 
to the President's desk.
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