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share of the gross proceeds or a share of the fish themselves.
See, e.g., Thomas v. Osborn, 60 U.S. 22, 29-30 (1856) (“a
lay--that is, a participation in profits”); Putnam v. Lower, 236
F.2d 561, 573 n.2 (9th Cir. 1956) (“the word ‘lay’ means a share
of the profits of a venture given in lieu of wages”); Old Point
Fish Co. v. Haywood, 109 F.2d 703 (4th Cir. 1940).14
The report by the Senate Committee on Finance indicates
Congress recognized longstanding industry practices of paying
fishing boat workers on the lay system with a share of the
proceeds from the catch after subtraction of operating expenses.
See S. Rept. 94-938 (Pt. I), supra at 384-385, 1976-3 C.B. (Vol.
3) at 422-423. Section 3121(b)(20) was enacted to provide
administrative convenience and certainty to fishing boat owners
by eliminating the need to keep records to calculate tax
obligations of fishing boat workers who received payments on the
lay system, without interfering with or changing the longstanding
lay system of compensation. See id. at 385-386, 1976-3 C.B.
(Vol. 3) at 423-424.
Compensation under the lay system necessarily means that the
proceeds of the catch depend on factors other than the amount of
the catch, including, but not limited to, the subtraction of
14Black’s Law Dictionary 905 (8th ed. 2004) defines “lay” in
the context of maritime law as: “A share of the profits of a
fishing or whaling trip, akin to wages, allotted to the officers
and seamen.”
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