||Congressman Faleomavaega announced today that Chairman Sander Levin of the House Ways and Means Committee and Chairman Max Baucus of the Senate Finance Committee released H.R. 4213 which included Faleomavaega’s request to provide a direct payment of $18M to ASG in lieu of the 30A tax credit. The House will vote on the measure next week and the Senate will consider the legislation soon thereafter.
“Since February 1, 2010, I have been working closely with StarKist and the Democratic leadership in the House and Senate to convert 30A tax credits in a way that would save American Samoa’s economy and create jobs for our workers,” Faleomavaega said. “To this end, I requested the support of Speaker of the House Nancy Pelosi, House Majority Leader Steny Hoyer, Senate Majority Leader Harry Reid, former Chairman of the House Ways and Means Committee Charles Rangel, Chairman of the Senate Finance Committee Max Baucus, Senator Bingaman of the Senate Finance Committee and, in March of this year, Chairman Sander Levin of the House Ways and Means Committee.”
“In letters dated February 1, February 4 and March 10, 2010 and in follow-up discussions and meetings, I explained that the 30A tax credit is no longer useful to companies doing business in American Samoa because a company can only take advantage of the credit if the company is operating at a profit. StarKist, American Samoa’s largest private-sector employer, is operating at a loss because it can no longer compete against low-wage rate countries like Thailand that pay fish cleaners $0.75 cents and less per hour.”
“Without help, StarKist will be forced to close its operations in American Samoa and, if this happens, the Territory’s economy, which is barely hanging by a thread, will collapse. As a temporary measure, I thank Chairman Levin and Chairman Baucus for agreeing to convert the 30A tax credit in a way that will provide a direct payment to ASG in order to help stabilize our economy. I know this was no easy task but I thank my colleagues for supporting the people of American Samoa, especially as we are still working to rebuild after being struck by the most powerful earthquake of 2009 which set off a tsunami that resulted in untold damage and devastation.”
“Should H.R. 4213 be passed and signed into law with this language left intact, ASG will receive a direct payment of $18M in lieu of the extension of the 30A economic development credit. The language is as follows:”
The Secretary of the Treasury (or his designee) shall pay $18,000,000 to the Government of American Samoa for purposes of economic development. The payment made under the preceding sentence shall be treated for purposes of section 1324 of title 31, United States Code, as a refund of internal revenue collections to which such section applies.
“As explained in the summary of H.R. 4213:
Existing possessions credit corporations with active business operations in American Samoa were allowed an economic development tax credit to offset their U.S. tax liability on income earned in American Samoa from active business operations. This credit was based on the corporation’s employment and capital investment in American Samoa. As a result of the economic downturn, those domestic corporations have been unable to utilize the economic development credit. The bill would provide a payment to the American Samoa Government for stimulating economic development in American Samoa in an amount equal to the cost of the economic development credit. This proposal is estimated to cost $18 million over 10 years.
“Because StarKist would have been entitled to 30A tax credits worth up to $18M if it had been operating at a profit, the money we have now been able to set aside as a direct payment to ASG is intended to be used to put our tuna cannery workers back to work at StarKist Samoa. This is why I will be entering in to discussions with the U.S. Department of Treasury, ASG and the Fono to make sure the funds are used for their intended purposes.”
“Also, to be clear, the entire $18M will be available in FY2010, if H.R. 4213 is signed into law. If signed into law, this will be the good news we have been waiting for as it will provide ASG with the means it needs to help StarKist until we can put a more long-term solution in place.”
“Again, I thank my colleagues in the House and Senate for their strong show of support, and I look forward to working hand-in-hand with Governor Togiola and our Fono leaders and members as we do all we can do to save our tuna industry which is our largest private sector employer,” Faleomavaega concluded.