Congressman Faleomavaega announced today that he and Governor Togiola are holding a meeting in the Congressman’s Washington office on Tuesday May 2, 2006 with Federal and Congressional staff regarding IRS Section 936.  Invitations have been extended to Deputy Assistant Secretary for Insular Affairs David Cohen, Office of Insular Affairs Director Nik Pula, Senate Finance, Ways and Means, Resources, and Senate Energy staff including Josh Johnson and Al Stayman.  Dave Burney, Executive Director of the US Tuna Foundation, which represents the interests of both canneries, and Paul Krampe of the US Tuna Boat Association have also been invited to participate. 

“I am pleased that the Governor will be in town during this time and will be able to participate in this very important meeting,” Faleomavaega said.  “While the House Ways and Means and Senate Finance Committees are the only two committees in Congress responsible for tax legislation, I have also invited staff from the House Resources and Senate Energy Committees because these Committees have broad jurisdiction for policies affecting American Samoa.  The tuna industry is also key to our discussions and for this reason the canneries and boat owners have been invited to meet with us.”

“The purpose of our meeting will be to discuss current developments regarding IRC 936.  As I mentioned in my previous press release dated April 8, 2006, the tax reconciliation bill was supposed to have been taken up prior to the Easter recess but has been delayed.  There is now some discussion that the bill will be divided in two parts and that the major provisions will come to vote possibly next week while the smaller extenders which include IRC 936 may come in a separate bill to follow in a few weeks.”

“Regardless, we continue to receive assurances from Ways and Means and Senate Finance that we have the support we need on this issue.  At the same time, both Committees are also supportive of helping us develop a long-term tax policy and Tuesday’s discussion will give us the opportunity to flesh out the details.”

“While the Governor has noted that 936 has expired, if Congress extends our credits, the credit will become retroactive for the tax year meaning our canneries will not lose a penny as a result of any delays.  As former Department of Commerce Director JR Scanlan also noted, IRC 936 will not be the determining factor regarding whether or not our canneries stay or go.  Tariff reductions as proposed in upcoming trade agreements as well as lower wage rates will determine the future of our canneries.” 

“This is supported by the fact that throughout the 936 process the Chairman of the Ways and Means Committee as well as myself have asked our canneries for a letter of commitment.  We have asked both canneries to commit to staying in American Samoa if possession tax credits are extended and, at each and every turn, our canneries have declined our request for a letter of long-term commitment.”

“But I do not fault our canneries for this.  Our canneries are driven by the cost of doing business.  If it ever becomes cheaper to do business elsewhere, our canneries will move because, like every other State and Territory, American Samoa is caught up in a global economy where people in other parts of the world are willing to clean fish for 50 cents an hour.”

“This is why I have repeatedly urged our local government to prepare for the day when our canneries may reduce their workforce or move elsewhere.  To assist our local government in this effort, former U.S. Secretary of the Interior Bruce Babbitt approved my request in 1999 for $600,000 to establish an American Samoa Economic Development Study Commission.  This was the first time during our Territory’s 106-year relationship with the U.S. that a Commission of this nature was established.”

“John Waihee, former Governor of Hawaii, served as the Commission’s Chair
and the US Department of the Interior was the federal agency responsible for the Commission’s oversight.  But what made this Commission unique is that its findings were not based on the views of outsiders but rather the research emanated from local input.  ASG and community leaders participated in this undertaking and the American Samoa Community College surveyed the public to identify the attitudes, aspirations and long-range goals of our community.”

“This historic study took two years to complete and, in FY 2000, the Commission submitted its report to the Secretary of the Interior and to the responsible Committees in Congress including the House Resources Committee and the Senate Committee on Energy and Natural Resources.  Congress now awaits ASG’s recommendations.  For this reason, I am very concerned that five years have now past and ASG has not taken the initiative to consult with the DOI and make recommendations to Congress based on the American Samoa Economic Development Study.”

“However, I remain hopeful that ASG will make this its top priority and submit a proposal to Congress for consideration.  As Congress awaits ASG’s recommendations for real and sustainable economic development, our coalition will continue its work to extend possession tax credits for the short term while developing a more comprehensive tax policy for the long term,” Congressman Faleomavaega concluded.