I 
112TH CONGRESS 
2D SESSION 
H. R. 6276 
To amend the Internal Revenue Code of 1986 to provide for Commercial 
Fishing, Farm, and Ranch Risk Management Accounts, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 2, 2012 
Mr. LANDRY introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
for Commercial Fishing, Farm, and Ranch Risk Manage-
ment Accounts, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Commercial Fishing, 
Farm, and Ranch Risk Management Act’’. 
SEC. 2. COMMERCIAL FISHING, FARM, AND RANCH RISK 
MANAGEMENT ACCOUNTS. 
(a) IN GENERAL.—Subpart C of part II of sub-
chapter E of chapter 1 of the Internal Revenue Code of 
VerDate Mar 15 2010 
22:58 Aug 13, 2012
Jkt 019200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H6276.IH
H6276
sroberts on DSK5SPTVN1PROD with BILLS
1986 (relating to taxable year for which deductions taken) 
is amended by inserting after section 468B the following: 
‘‘SEC. 468C. COMMERCIAL FISHING, FARM, AND RANCH 
RISK MANAGEMENT ACCOUNTS. 
‘‘(a) DEDUCTION ALLOWED.—In the case of an indi-
vidual engaged in an eligible farming business or commer-
cial fishing, there shall be allowed as a deduction for any 
taxable year the amount paid in cash by the taxpayer dur-
ing the taxable year to a Commercial Fishing, Farm, and 
Ranch Risk Management Account (hereinafter in this sec-
tion referred to as the ‘CFFR Account’). 
‘‘(b) LIMITATION.—The amount which a taxpayer 
may pay into the CFFR Account for any taxable year shall 
not exceed 20 percent of so much of the taxable income 
of the taxpayer (determined without regard to this section) 
which is attributable (determined in the manner applicable 
under section 1301) to any eligible farming business or 
commercial fishing. 
‘‘(c) ELIGIBLE BUSINESSES.—For purposes of this 
section— 
‘‘(1) ELIGIBLE FARMING BUSINESS.—The term 
‘eligible farming business’ means any farming busi-
ness (as defined in section 263A(e)(4)) which is not 
a passive activity (within the meaning of section 
469(c)) of the taxpayer. 
VerDate Mar 15 2010 
22:58 Aug 13, 2012
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H6276.IH
H6276
sroberts on DSK5SPTVN1PROD with BILLS
‘‘(2) COMMERCIAL FISHING.—The term ‘com-
mercial fishing’ has the meaning given such term by 
section 3(4) of the Magnuson-Stevens Fishery Con-
servation and Management Act (16 U.S.C. 1802(4)) 
but only if such fishing is not a passive activity 
(within the meaning of section 469(c)) of the tax-
payer. 
‘‘(d) CFFR ACCOUNT.—For purposes of this section, 
the term ‘Commercial Fishing, Farm, and Ranch Risk 
Management Account’ or ‘CFFR Account’ means a trust 
created or organized in the United States for the exclusive 
benefit of the taxpayer, but only if the written governing 
instrument creating the trust meets the following require-
ments: 
‘‘(1) No contribution will be accepted for any 
taxable year in excess of the amount allowed as a 
deduction under subsection (a) for such year. 
‘‘(2) The trustee is a bank (as defined in sec-
tion 408(n)) or another person who demonstrates to 
the satisfaction of the Secretary that the manner in 
which such person will administer the trust will be 
consistent with the requirements of this section. 
‘‘(3) The assets of the trust consist entirely of 
cash or of obligations which have adequate stated in-
VerDate Mar 15 2010 
22:58 Aug 13, 2012
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H6276.IH
H6276
sroberts on DSK5SPTVN1PROD with BILLS
terest (as defined in section 1274(c)(2)) and which 
pay such interest not less often than annually. 
‘‘(4) The assets of the trust will not be commin-
gled with other property except in a common trust 
fund or common investment fund. 
‘‘(e) INCLUSION OF AMOUNTS DISTRIBUTED.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), there shall be includible in the gross in-
come of the taxpayer for any taxable year— 
‘‘(A) any amount distributed from a CFFR 
Account of the taxpayer during such taxable 
year, and 
‘‘(B) any deemed distribution under— 
‘‘(i) subsection (f)(1) (relating to de-
posits not distributed within 10 years), 
‘‘(ii) subsection (f)(2) (relating to ces-
sation in eligible farming business), and 
‘‘(iii) subparagraph (B) or (C) of sub-
section (f)(3) (relating to prohibited trans-
actions and pledging account as security). 
‘‘(2) EXCEPTIONS.—Paragraph (1)(A) shall not 
apply to— 
‘‘(A) any distribution to the extent attrib-
utable to income of the Account, and 
VerDate Mar 15 2010 
22:58 Aug 13, 2012
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H6276.IH
H6276
sroberts on DSK5SPTVN1PROD with BILLS
‘‘(B) the distribution of any contribution 
paid during a taxable year to a CFFR Account 
to the extent that such contribution exceeds the 
limitation applicable under subsection (b) if re-
quirements similar to the requirements of sec-
tion 408(d)(4) are met. 
For purposes of subparagraph (A), distributions 
shall be treated as first attributable to income and 
then to other amounts. 
‘‘(f) SPECIAL RULES.— 
‘‘(1) TAX
ON
DEPOSITS
IN
ACCOUNT
WHICH 
ARE NOT DISTRIBUTED WITHIN 10 YEARS.— 
‘‘(A) IN GENERAL.—If, at the close of any 
taxable year, there is a nonqualified balance in 
any CFFR Account— 
‘‘(i) there shall be deemed distributed 
from such Account during such taxable 
year an amount equal to such balance, and 
‘‘(ii) the taxpayer’s tax imposed by 
this chapter for such taxable year shall be 
increased by 10 percent of such deemed 
distribution. 
The preceding sentence shall not apply if an 
amount equal to such nonqualified balance is 
distributed from such Account to the taxpayer 
VerDate Mar 15 2010 
22:58 Aug 13, 2012
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H6276.IH
H6276
sroberts on DSK5SPTVN1PROD with BILLS
before the due date (including extensions) for 
filing the return of tax imposed by this chapter 
for such year (or, if earlier, the date the tax-
payer files such return for such year). 
‘‘(B) NONQUALIFIED BALANCE.—For pur-
poses of subparagraph (A), the term ‘non-
qualified balance’ means any balance in the Ac-
count on the last day of the taxable year which 
is attributable to amounts deposited in such Ac-
count before the 9th preceding taxable year. 
‘‘(C) ORDERING RULE.—For purposes of 
this paragraph, distributions from a CFFR Ac-
count (other than distributions of current in-
come) shall be treated as made from deposits in 
the order in which such deposits were made, be-
ginning with the earliest deposits. 
‘‘(2) CESSATION
IN
ELIGIBLE
BUSINESS.—At 
the close of the first disqualification period after a 
period for which the taxpayer was engaged in an eli-
gible farming business or commercial fishing, there 
shall be deemed distributed from the CFFR Account 
of the taxpayer an amount equal to the balance in 
such Account (if any) at the close of such disquali-
fication period. For purposes of the preceding sen-
tence, the term ‘disqualification period’ means any 
VerDate Mar 15 2010 
22:58 Aug 13, 2012
Jkt 019200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H6276.IH
H6276
sroberts on DSK5SPTVN1PROD with BILLS
period of 3 consecutive taxable years for which the 
taxpayer is not engaged in an eligible farming busi-
ness or commercial fishing. 
‘‘(3) CERTAIN RULES TO APPLY.—Rules similar 
to the following rules shall apply for purposes of this 
section: 
‘‘(A) Section 220(f)(8) (relating to treat-
ment on death). 
‘‘(B) Section 408(e)(2) (relating to loss of 
exemption of account where individual engages 
in prohibited transaction). 
‘‘(C) Section 408(e)(4) (relating to effect 
of pledging account as security). 
‘‘(D) Section 408(g) (relating to commu-
nity property laws). 
‘‘(E) Section 408(h) (relating to custodial 
accounts). 
‘‘(4) TIME WHEN PAYMENTS DEEMED MADE.— 
For purposes of this section, a taxpayer shall be 
deemed to have made a payment to a CFFR Ac-
count on the last day of a taxable year if such pay-
ment is made on account of such taxable year and 
is made on or before the due date (including exten-
sions) for filing the return of tax for such taxable 
year. 
VerDate Mar 15 2010 
22:58 Aug 13, 2012
Jkt 019200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H6276.IH
H6276
sroberts on DSK5SPTVN1PROD with BILLS