Capps Bill Would Allow Fishers Access to Savings Without Severe Tax Penalties

Capps Bill Would Allow Fishers Access to Savings Without Severe Tax Penalties

WASHINGTON, D.C. - Congresswoman Lois Capps today reintroduced legislation to allow fishers to use their Capital Construction Fund (CCF) savings for non-fishing purposes without the burden of significant tax penalties.

The Capital Construction Fund Qualified Withdrawal Act of 2005 gives fishers the chance to use money invested in the CCF to retire from the fishery, rather than requiring them to use it to pay for buying new or refitting fishing vessels. This proposal is an attempt to reduce the excess fishing capacity that far exceeds the available catch. Rather than penalizing fishers as much as 70 percent to taxes and penalties if they withdraw from the CCF for non-fishing purposes, this measure helps fishers retire or finance new careers.

Oregon Senators Ron Wyden and Gordon Smith introduced companion legislation in the Senate earlier this year.

"At a time when the fishing industry is in trouble, it makes sense to open the CCF for other purposes," said Congresswoman Capps. "By allowing fishers to access their money without severe tax penalties, we can give more options to those who wish to pursue other careers or retirement, which in turn will help the industry as a whole. With this bill we can pursue twin goals - sustain America's fisheries and protect the financial security of fishing families."

Congressman Peter DeFazio, an original cosponsor of the bill, supports the change for fishers nationwide, including off the coast of his home state of Oregon.

"West Coast fishers struggling with a downturn in the industry don't need to be punished for making the tough decision to move on," said DeFazio. "Our bill allows fishers to roll their investments in the Capital Construction Fund to retirement accounts, without penalty, to plan for the future."

The recent U.S. Commission on Oceans Policy report made clear that action needs to be taken at the federal level to restore the health of our ocean ecosystems. The Commission's report contained a variety of important legislative recommendations, including repealing portions of the Capital Construction Fund to reduce overcapitalization of America's fishing fleets.

The CCF allows fishers to accumulate money, free from taxes, to buy or refit fishing vessels. This bill would amend the Merchant Marine Act of 1936 and the Internal Revenue Code so investments currently in the CCF could be rolled over into a retirement accounts, such as an IRA, or used to pay an industry fee authorized by the fishery capacity reduction program, without adverse tax consequences to the account holders. This could save some California fishers more than $100,000 in taxes and fees.

"The old law holds fishers hostage to outdated goals from 1936." said Kate Wing, Natural Resources Defense Council ocean policy analyst. "This new bill lets fishers use their own money to improve conservation and invest in their future; it's exactly the kind of economic reform we need for real sustainable fisheries."

"The changes to the Capital Construction Fund that this bill would provide are an important part of improving the economic viability of our nation's commercial fishing fleets," said Peter Leipzig, executive director of the Fisherman's Marketing Association.

This legislation is supported by both the fishing and the environmental communities. It has been endorsed by the Fisherman's Marketing Association, Oregon Trawl Commission, Pacific Marine Conservation Council, Oceana, Natural Resources Defense Council and Cape Cod Commercial Hook Fisherman's Association.