Fishermen's Contingency Fund

Commercial fishermen who lose or damage fishing gear because of oil and gas equipment on the Outer Continental Shelf (OCS) can be compensated through the Fishermen's Contingency Fund — a dedicated compensation pool funded by mandatory assessments on OCS lease holders, pipeline operators, and exploration permit holders. The Fund is established by Title IV of the Outer Continental Shelf Lands Act Amendments of 1978 (43 U.S.C. §§ 1841–1846) and implemented by NMFS regulations at 50 CFR Part 296.

Legal Authority

• 43 U.S.C. §§ 1841–1846 — OCSLA Amendments of 1978, Title IV: establishes the Fishermen's Contingency Fund as a mandatory no-fault compensation mechanism for commercial fishermen who lose or damage gear due to OCS oil and gas equipment; requires NMFS to administer the Fund and assess OCS operators to maintain it
• 50 CFR Part 296 — NMFS regulations implementing the Fund: governs the claims process, damage documentation requirements, burden-shifting presumption of causation, compensation calculation, and OCS operator assessment rates

Key Mechanics

The Fishermen's Contingency Fund is a revolving fund in the U.S. Treasury, maintained through mandatory assessments on OCS lease holders, pipeline rights-of-way holders, and exploratory drilling permit holders. Commercial fishermen who lose or damage gear by snagging OCS oil and gas equipment file claims directly with NMFS — no attorney required, no filing fee. If the fisherman reports the incident within 15 days and documents the gear loss, a presumption of causation shifts to the responsible OCS operator: the operator must disprove that its equipment caused the damage, not the fisherman prove it. NMFS investigates and awards compensation for gear replacement and lost fishing days attributable to the incident. Claims that exceed available Fund balances trigger new OCS operator assessments to replenish the Fund. The no-fault, administrative compensation model was designed to avoid forcing small boat fishermen to litigate against large oil companies in federal admiralty court.

Current Rule (2026)

What This Rule Does

The OCS is home to an extensive network of oil and gas infrastructure — wells, platforms, pipelines, casings, and debris — that poses a constant snag hazard to commercial fishing gear. When a trawl net, longline, or pot gear strikes an uncharted subsea obstruction associated with OCS oil and gas activities, the fisherman may lose thousands of dollars in gear and face days of lost fishing time. The Fishermen's Contingency Fund provides a no-fault compensation mechanism: the fisherman files a claim with NMFS, NMFS determines whether the damage is attributable to OCS activities, and awards compensation from the Fund without requiring the fisherman to sue the responsible oil company in court.

The Fund operates as a revolving fund in the U.S. Treasury, maintained through annual assessments on OCS operators. When the fund balance falls below a threshold NMFS determines is adequate, assessments on OCS lease holders, pipeline rights-of-way holders, and prelease exploratory drilling permit holders are triggered to replenish it.

The claims process is designed to be accessible to working fishermen: there are no filing fees, the fisherman does not need an attorney to file, and the burden-shifting presumption of causation (triggered by a timely 15-day report) means that a fisherman who follows the reporting procedures does not have to prove the oil company is at fault — the oil company must disprove it.

Key Provisions

• § 296.2 — Definitions: "commercial fisherman" is a U.S. citizen who owns, operates, or is employed on a commercial fishing vessel; "area affected by OCS activities" is within a 3-mile radius of any OCS lease, pipeline, easement, or production area; damage outside OCS waters is eligible if the obstructing item originated from OCS operations
• § 296.3 — The Fund: established in the Treasury as a revolving fund; OCS operators (exploration permits, leases, pipeline rights-of-way, prelease drilling permits) pay periodic assessments to maintain the Fund at adequate levels; geological and geophysical permits (other than prelease drilling) are exempt from assessment
• § 296.4 — Eligible claims: damage or loss must be suffered by a commercial fisherman and caused by materials, equipment, tools, containers, or other items associated with OCS oil and gas exploration, development, or production; damage need not occur in OCS waters if the causing item was OCS-associated; ineligible: damage caused by the claimant's own negligence, damage occurring before September 18, 1978, damage exceeding replacement value, damage coverable by insurance, and claims filed more than 90 days after discovery
• § 296.5 — 15-day report: to gain the presumption of causation, the fisherman must report the location of the obstruction and nature of the damage to NMFS within 15 days of first returning to port after discovering the damage; report may be by mail (postmark controls), telephone, radio, or in-person appearance; the 15-day report must be followed by a full claim application
• § 296.6 — NMFS processing: upon receiving a claim, NMFS sends an abstract to Interior (which oversees OCS leasing); Interior plots the casualty site and notifies all known OCS operators in the vicinity; each notified operator has 30 days to admit or deny responsibility; failure to respond is deemed a denial of responsibility
• § 296.7 — Burden of proof: the claimant normally bears the burden of proving by a preponderance of the evidence that the damage was caused by OCS-associated items; however, if the claimant filed a timely 15-day report AND the damage occurred in an area affected by OCS activities AND no nautical chart or NOTAM showed the obstruction, the burden shifts to the OCS operator to disprove causation
• § 296.8 — Award amounts: actual damages are the lesser of repair cost or replacement cost for damaged gear, or replacement cost for lost gear; consequential damages (economic losses resulting from the gear damage) are also eligible; awards may include 50 percent of economic losses from vessel damage; reasonable attorney, CPA, and consultant fees for claim preparation are compensable; awards are reduced proportionally for claimant's own negligence
• § 296.9 — Initial determination: NMFS Chief, Financial Services Division issues an initial determination within 60 days of accepting the claim; if approved, states the amount and basis; if denied, states the reason
• § 296.10–296.11 — Agency review and final determination: any interested person may petition NMFS Assistant Administrator for review within 30 days of the initial determination; final determination issues within 60 days of the review petition; if no petition is filed within 30 days, the initial determination becomes final
• § 296.12 — Payment of costs: if an OCS operator denies responsibility but is subsequently found liable, that operator pays the proceeding costs; claimants who are found to have caused the damage pay the costs; shared fault apportions costs
• § 296.13 — Payment: upon an initial determination in the claimant's favor (if the claimant has signed a repayment agreement for any amounts later reduced on review), NMFS disburses the award immediately — the fisherman doesn't wait for the appeal period to run
• § 296.14 — Subrogation: as a condition of payment, the claimant must assign to the Fund all rights against third parties and cooperate with NMFS in pursuing those rights; NMFS refers recoverable subrogation claims to DOJ for collection; recovered amounts are deposited back into the Fund
• § 296.15 — Judicial review: claimants or other aggrieved persons may seek review of a final NMFS determination in U.S. District Court within 30 days — in the mutually agreed district or, failing agreement, in the district where the claimant's home port is located

How It Affects You

If your fishing vessel snags on an uncharted subsea obstruction in or near OCS oil and gas areas, the most important thing you can do is file the 15-day report within 15 days of returning to port. That report triggers the presumption of causation and shifts the burden to the oil company. Missing the 15-day window doesn't automatically bar your claim, but you will need to prove causation yourself — a much harder standard when the obstruction may be buried or unrecoverable.

The Fund has covered gear losses ranging from a single net to entire gear sets worth tens of thousands of dollars. The 50-percent economic loss provision covers fishing revenue you lost while your gear was being repaired or replaced. The subrogation provision means that if an oil company is clearly responsible, NMFS (through DOJ) pursues them directly — you get paid from the Fund first, and the government recovers from the operator.

Statutory Authority

This rule implements:

• 43 U.S.C. § 1841 — Establishment of the Fishermen's Contingency Fund and funding mechanism (assessments on OCS operators)
• 43 U.S.C. § 1842 — Claims process: eligibility, filing procedures, presumption of causation, agency review
• 43 U.S.C. § 1843 — Amounts of compensation; consequential damages; attorney fees
• 43 U.S.C. § 1844 — Subrogation rights; deposit of recoveries into the Fund

Recent Rulemakings

• 61 FR 6322 (Feb. 1996) — Updated claim filing procedures and clarified the 15-day report requirement; revised appeal procedures
• 53 FR 24645 (1988) and 50 FR 13796 (1985) — Earlier amendments establishing assessment rates and Fund maintenance procedures; no major structural changes since the 1990s

Pending Action