Legislation penned by Santa Barbara Rep. Lois Capps (D) may make the high seas a bit less crowded, and help stabilize the floundering Santa Barbara fishing industry in the process.
The Capital Construction Fund Qualified Withdrawal Act, introduced on March 8 in conjunction with a companion bill by Senator Ron Wyden (D-Oregon), aims to reduce the number of active fishing vessels while giving commercial fisherman a financial cushion for either retirement or a career change.
“At a time when the fishing industry is having trouble, the Capital Construction Fund should be open for other purposes,” Capps said. “Fishers should be able to access their money without severe tax penalties.”
The Capital Construction Fund was introduced in 1970 as an amendment to the Merchant Marine Act of 1936, which aided maritime vessel operators in the construction and maintenance of vessels. The CCF gave fisherman a fund similar to an Individual Retirement Account into which they could put money, and earn tax-free interest provided the money was spent specifically on constructing and repairing American-built vessels. If they spend the money on non-boating purposes, the withdrawal is termed “unqualified” and the withdrawing fisherman faces financial penalties of up to 70 percent of the sum they attempt to withdraw.
Capps’ bill would eliminate the penalty, making fishermen free to spend the money on any cause, including the transition to a new profession or beginning a retirement fund.
“This bill would give fishers who wish to pursue other careers more options, which would also help the industry,” Capps said. “It’s in the industry’s best interest to allow fishers to use their money in the fund for retirement or to start a new career.”
Capps said promoting new uses for money stored in the CCF will reduce fishermen in the waters. The remaining fishermen will reap the benefits of less crowded seas and better-stocked fisheries. Fishermen throughout the state have pledged support for the bill.
“[The FMA] is definitely in support of this bill because it will be a good step in stabilizing the West Coast fishing industry and achieving fishery management goals,” said Peter Leipzig, executive director of the Eureka-based Fisherman’s Marketing Association. “We advocate it on behalf of West Coast fishermen – and maybe national fishermen.”
Leipzig said he agreed the overcapitalization of the fisheries was a problem, and Capps’ bill would be a good way to please both fishers who wish to retire from the seas and those who plan to continue fishing.
“Most fisheries have that problem [of overcapitalization]. There are too many people trying to fish in the same place at the same time,” he said. “The bill makes sense because the CCF is a boat-builder subsidy and we’d like a reduced number of active fishing fleets.”
Leipzig said he liked the idea of the CCF money being withdrawn without a penalty.
“It’s an incentive to withdraw,” he said.