“For some time, I have been working with cannery executives, including the Presidents of Chicken of the Sea/Samoa Packing and StarKist, to craft legislation that would make permanent or extend the federal IRS section 936 tax credit to American Samoa for another ten years,” the Congressman said.  “In January of this year, I met with the President of StarKist and Mr. Dave Burney, Executive Director of the U.S. Tuna Foundation.  In October of last year, I met with the President of Chicken of the Sea/Samoa Packing and discussed this matter at length.”

       “In July of 2001, I also supported legislation that would have given our canneries the federal tax incentives they need to stay in American Samoa.  I was hopeful to get legislation passed last year but last year we had to put first things first.  Last year, we had to take up the matter of Andean trade and save the jobs of more than 1,000 of our cannery workers.  Now that the Andean trade agreement is behind us, I am pleased that the Presidents of StarKist and Samoa Packing are working closely with my office to address the issue of IRS section 936,” Congressman Faleomavaega said.

       “I am also pleased that the Governor is supportive of this initiative.  In a letter dated February 3, 2003, I asked the Governor and the Fono to lend their support to this effort and I also explained that the U.S. tuna industry is facing serious competition from foreign countries.  China, for example, is aggressively building its fishing fleet.  Taiwan is building bigger vessels and also increasing the number of boats it puts out to fish in the Western Pacific,” the Congressman said.  “In addition to these challenges, our tuna industry is also facing increased competition due to lower wage rates in foreign countries.”

       “Cannery workers in the Andean countries are paid $0.60 cents and less per hour.  In American Samoa, cannery workers are paid $3.60 per hour.  As I explained in my February 3, 2003 letter to the Governor, this is why our canneries need section 936.  Section 936 provides federal tax benefits that help our canneries compete against countries with lower wage rates and we must successfully address this issue if our canneries are to remain profitable and competitive,” Congressman Faleomavaega said.
 
       “Given that our economy is more than 80% dependent either directly or indirectly on the U.S. tuna fishing and processing industries, I also informed the Governor and the Fono that I had sought the support of the Secretary of the Interior, that I had also brought this matter to the attention of the Assistant Secretary of Insular Affairs, David Cohen, and that I had also made the Chairman and the Ranking Member of the House Ways and Means Committee aware of American Samoa’s need for an extension of IRS section 936 federal tax credits and benefits.”

       “I also requested the support of the Governor and the Fono and I am pleased that the Governor has now publicly stated that he supports extending IRS section 936 tax benefits to our canneries,” Congressman Faleomavaega said.  “Although I am hopeful that we will be able to help our canneries stay in American Samoa, this will not be an easy matter.  In fact, it may be as difficult as the Andean trade agreement.”

       “In part, this is due to the fact that section 936 has always been a federal tax credit not only for American Samoa but for other U.S. possessions, including Puerto Rico.  Many in Congress want to see section 936 expire because pharmaceutical companies doing business in Puerto Rico have used 936 as a loophole to avoid paying their fair share of federal income taxes.  Now Congress is taking a hard look at this issue and it remains to be seen if we will be able to get section 936 benefits extended just for American Samoa,” Congressman Faleomavaega said.  “At this time, I am hopeful that we will be able to save American Samoa’s canned tuna industry and also encourage other investment and development in the Territory.”  

       “I want to thank Dave Burney, Executive Director of the U.S. Tuna Foundation, Dennis Mussell, CEO of Chicken of the Sea/Samoa Packing, and Don Binotto, President and Managing Director of StarKist for working directly with my office on this issue.  Just two weeks ago, these executives met in San Diego and reached agreement as an industry about pursuing 936 as is.  This week I introduced legislation based on these discussions and, as a follow-up to my February 3, 2003 letter, I am forwarding the Governor and the Fono a copy of my bill which has been cited as H.R. 1424, or the American Samoa Possession Tax Credit Act of 2003.”

       “Once again, I want to thank the Governor for his support and I am hopeful that as we work together our canneries will be encouraged to remain and invest in American Samoa,” the Congressman concluded.