Tuesday, November 4, 2014

Changes Proposed in CCF Regulations

Federal fisheries officials are proposing changes in the National Marine Fisheries Service’s Capital Construction Fund, a program that encourages construction, reconstruction or acquisition of vessels through deferment of federal income taxes.

The goal is to update and make important changes in the regulations, written in the early 1970s, said Connie Barclay, director of NOAA Fisheries Public Affairs.

Major areas of concern for some sectors of the commercial fisheries industry among the proposed changes are twofold.

The first is one that would trim the construction period for vessels constructed or reconstructed under this program from the current 18 months to 12 months.

Such a time limit “would be highly problematic,” said Mark Gleason, executive director of the Alaska Bering Sea Crabbers.

In the NMFS document published in the Federal Register on Sept. 25, NMFS says that since minimum cost requirements for reconstruction have been eliminated, there would be no need for an extended period of time to complete planned projects.

Another of the proposal changes would eliminate a requirement that the minimum cost of a reconstruction project be the lesser of $100,000 or 20 percent of the reconstructed vessel’s acquisition costs to eliminate making excessive capital improvements to vessels based on an arbitrary amount.

Gleason’s concerns were shared by Chad See, executive director of the Freezer Longline Coalition, who said “new vessels don’t get built in 12 months.”

Such changes would take this funding source off the table for companies trying to build new vessels, he said.

His second concern, Gleason said, is a proposed rule change to prohibit using CCF funds for any vessel acquisition, construction or reconstruction that would increase fisheries harvesting capacity, to be consistent with the agency’s larger responsibility of maintaining sustainable fisheries.

Harvesting capacity issues are already covered by federal fisheries regulations programs, and the total allowable catches assigned, he said.

These and other proposed rule changes are outlines in the Federal Register notice of Sept. 25, which is online at https://www.federalregister.gov/articles/2014/09/25/2014-22821/capital-construction-fund-fishing-vessel-capital-construction-fund-procedures
The deadline for comments is Nov. 10.  

Connie Barclay, director of NOAA Fisheries Public Affairs, said all comments would be considered and published on NOAA’s website. The next step would be to publish the final rule, hopefully in January, Barclay said.

The program, established by the Merchant Marine Act of 1970, allows owners and operators of vessels to deposit income from fishing into CCF accounts prior to paying income taxes.  All deferred taxes are eventually recovered upon the sale of the vessel, because the cost basis of the vessel is reduced by the dollar amount of CCF funds used for its purchase or improvements.

FN Online Advertising