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.
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