Congressman Faleomavaega announced today that by a vote of 234 to 197 the House passed H.R. 4297, the Tax Reconciliation Act of 2005, and included an extension of 936 tax credits for American Samoa for an additional year as well as Faleomavaega’s request for language to provide for a long-term policy for American Samoa.
“This is a major victory,” Congressman Faleomavaega said. “Out of 440 Members of the U.S. Congress, only 27 provisions were included in the Tax Reconciliation Act and one was to extend 936 tax credits for American Samoa for an additional year.”
“Furthermore, Chairman Thomas agreed to my request to include language in the Conference report to provide for the development of a long-term policy with respect to American Samoa. In other words, we got our extension and our long-term policy. But our work is not over. We must now move to conference where the Senate and House must agree. It is anticipated that the conference will take place in January.”
“Again, most expiring tax provisions were only extended for one-year and no other Territory was included in the Chairman’s bill. In other words, 936 tax credits for Guam, the Northern Marianas and Puerto Rico will expire at the end of this year with no extension in place.”
“Although Samoa News erroneously reported that Puerto Rico only supported us because Puerto Rico wants section 936, nothing could be further from the truth. Puerto Rico is our long-time friend and supported us because we asked. Puerto Rico did this even though Puerto Rico does not want 936. Puerto Rico, like us, is waiting for the GAO to complete its study so that we can move forward on developing long-term policies for our constituencies.”
“This said, I want to thank the Honorable William Thomas, Chairman of the House Committee on Ways and Means, for his unwavering support in saving our economy and jobs of more than 5,000 tuna cannery workers. Chairman Thomas is a true friend of our people. He stood with us during the Andean Trade debate and has stood with us again on an extension of 936 tax credits for American Samoa until such time as a more long-term solution can be put in place once the GAO and Joint Committee on Taxation complete their reports regarding the impact of Federal tax policy in the insular possessions.”
“I also want to thank the Honorable Charles Rangel, Ranking Member of the House Committee on Ways and Means. Congressman Rangel has championed our cause on each and every trade agreement that has come before the U.S. Congress and he has also stood with us on the extension of 936 tax credits for an additional year.”
“At a time when our Nation is faced with paying for the war in Iraq and helping the victims of Hurricane Katrina, I know the inclusion of American Samoa in H.R. 4297 was no easy task. I know it was no easy task for this amendment to be included when on principle there is disagreement about tax cuts and government spending.”
“While I appreciate the concerns of my Republican and Democratic colleagues, the possession tax credit offered by section 936 of the Internal Revenue Code of 1986 has encouraged two US tuna canneries which employ more than 5,150 people or 74 percent of the workforce to remain and invest in American Samoa. More than 80% of American Samoa’s private sector economy is dependent either directly or indirectly on these canneries and 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.”
“For this reason, the canneries asked for an extension of 936 and informed my office that no other alternative was acceptable to them. Let me state again, I pushed for 936 because the canneries said they could accept nothing less than 936.”
“If the House and Senate now agree in conference to our extension and the promise of developing a long-term policy, then the next step will be to draft legislation which includes input from our canneries, US tuna boat owners, local businesses and our Fono. The canneries have committed to working with my office on a long-term policy which will meet their needs. As I have said before, I will also seek the input of our US tuna boat owners who contribute more than $25 million per year to American Samoa’s economy. I will also seek input from our local businesses. Finally, I will make sure that the Fono has input in any legislation put forward.”
“Therefore, let me conclude by once again thanking the Chairman and Ranking Member and my Republican and Democratic friends for working with me to include an extension of 936 tax credits for American Samoa in H.R. 4297 and for including language to develop a long-term policy after the GAO and the Joint Committee on Taxation complete their reports. I thank my friends for supporting American Samoa and I will continue to keep our people updated as this matter progresses,” the Congressman concluded.