USA: USD 18 million federal subsidies underway for American Samoa (and its tuna cannery)

American Samoa is getting a USD 18 million money transfer as part of the efforts of the local government to keep alive StarKist Samoa.

I copy here under the passage of the bill H.R. 4213 “The American Jobs and Closing Tax Loopholes Act of 2010” explaining the rationale for the transfer:

"American Samoa economic development support. 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."

Here is the link to the document:

http://www.rules.house.gov/111/LegText/111_hr4213_summary.pdf

And here is an extract of the press realease of 20 May 2010 by Congressman Faleomavaega in which he clearly states his views on how the money should be used.

“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.

This is the link to the press release by Congress Faleomavaega:

http://www.house.gov/apps/list/press/as00_faleomavaega/Housewaysandmeansandsenatefinancetaxcredit.html