Statements on Introduced Bills and Joint Resolutions - Capital Construction Fund

Floor Speech

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Mr. WYDEN. Mr. President, today I am reintroducing a bill to reform the Capital Construction Fund. This legislation would allow fishers to withdraw monies from their CCF accounts without penalty or interest, preventing overfishing and overcapitalization.

The Capital Construction Fund, CCF, program was developed at a time when American fishers were having a hard time competing with highly efficient foreign fishing vessels. The program was designed to enable fishers to deposit a portion of their fishing-related earnings into a CCF account on a tax-deferred basis. Fishers then make withdrawals from their CCF account to construct, reconstruct, or under limited circumstances, acquire fishing vessels. However, any unauthorized withdrawal from CCF account is subject to severe interest and other penalties.

The program was a success. The CCF program helped U.S. fishers build a modern state-of-the-art fleet. Unfortunately, that U.S. fleet is now overcapitalized. This problem is exacerbated by concerns surrounding overfishing. Fisheries managers have begun to implement catch-share limits to reduce the number of fish that they allow fishers to catch each year. Now, the U.S. commercial fishing fleet has more harvesting capacity than our fisheries can sustainably support. However, the monies fishers put into CCF accounts remain and represent a potential for further overcapitalization. Yet, current CCF regulations penalize withdrawals made for anything other than authorized expenditures.

The resulting situation is problematic for the fishers, the industry and the resource. That is why I am reintroducing legislation today, along with my colleague Senator Murkowski, to address this problem and relieve the pressure to increase further capitalization of the fishing fleet. My legislation will enable CCF accountholders to make a one-time withdrawal from their CCF accounts. Accountholders would be required to pay the taxes due on the monies withdrawn, but without having to pay tax penalties. An income-averaging formula would be applied to the withdrawals in an effort to avoid assessing an excessive tax rate on the one-time withdrawal. Any fisher taking advantage of one-time withdrawal 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 Senators Murkowski, Murray, Cantwell, Begich and Merkley, the fishing community, and the bill's other supporters to 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.

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