Congressman Faleomavaega announced today that in a letter dated April 13, 2005 he requested Secretary of Interior Gale Norton’s support of H.R. 629, a bill he reintroduced in the 109th Congress which would make permanent or extend the possession tax credit with respect to American Samoa an additional ten years.
“Under legislation passed by Congress in 1996, the tax benefit provided by tax code section 936 for firms operating in the possessions is scheduled to expire at the end of 2005,” the Congressman said. “In general terms, section 936 has been credited with helping to attract investment to the possessions. In the case of American Samoa, section 936 is particularly important for our tuna canning operations.”
“More than 80% of American Samoa’s private-sector economy is dependent either directly or indirectly on two United States tuna canneries which employ more than 5,150 people of 74 percent of the workforce. As was repeatedly stated during the Andean Trade debate, a decrease in production or departure of one or both of the two canneries in American Samoa could devastate the local economy resulting in massive layoffs and insurmountable financial difficulties.”
“At this time, the possession tax credit offered by section 936 of the Internal Revenue Code has encouraged both canneries to remain and invest in the Territory although wage rates are $0.60 and less per hour in competing nations and $3.60 per hour in American Samoa,” Faleomavaega said. “However, section 936 is scheduled to expire in December 2005 and this may lead to the departure of one or both canneries and also our U.S. tuna fishing fleet.”
“For this reason, I re-introduced H.R. 629 and requested Secretary Norton’s support. H.R. 629 is the only alternative StarKist and Chicken of the Sea support. Despite the best intentions of the Office of Insular Affairs (OIA), neither StarKist nor Chicken of the Sea support any alternatives proposed by OIA and I enclosed letters from both CEOs for Secretary Norton’s review.”
“I also informed Secretary Norton that I have personally met with Chairman Bill Thomas of the House Ways and Means Committee and Ranking Member Charles Rangel. Both support H.R. 629 and are working aggressively for its favorable passage. Secretary Norton is aware that the American Samoa Legislature also supports H.R. 629 and I will be including their Resolution for the record. Given the seriousness of this matter, I am hopeful that Secretary Norton will support H.R. 629 and join with us in protecting American Samoa’s economy now and for generations to come,” the Congressman concluded.