Commonwealth of the Northern Mariana Islands Reform Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Commonwealth of the Northern Mariana 
Islands Reform Act''.

SEC. 2. FINDINGS.

    The Congress finds that:
            (1) The Covenant to Establish a Commonwealth of the 
        Northern Mariana Islands in Political Union with the United 
        States of America was approved by Congress pursuant to Public 
        Law 94-241, 90 Stat. 263.
            (2) At the time that the Covenant was being negotiated, 
        representatives of the government of the Northern Mariana 
        Islands expressed concern that United States immigration laws 
        would allow unrestricted immigration into their small island 
        community.
            (3) In response to these concerns, section 503(a) of the 
        Covenant provided that the Immigration and Naturalization Act 
        did not immediately apply to the Commonwealth of the Northern 
        Mariana Islands.
            (4) Congress expressly reserved the right to extend the 
        Immigration and Naturalization Act to the Commonwealth of the 
        Northern Mariana Islands at a future date.
            (5) Following the enactment of the Covenant, the 
        Commonwealth of the Northern Mariana Islands instituted a 
        largely unrestricted immigration policy, causing the 
        Commonwealth's population to increase from 16,780 in 1980 to a 
        population of over 58,800 in 1995, with foreign workers 
        outnumbering United States citizens.
            (6) As a result of these immigration policies, 91 percent 
        of the private sector work force in the Commonwealth is 
        comprised of foreign workers.
            (7) The Commonwealth of the Northern Mariana Islands has 
        used its immigration policy to recruit a large, low-cost 
        foreign work force of desperately poor individuals with no 
        meaningful opportunity to demand safe living and working 
        conditions of fair wages and benefits.
            (8) Notwithstanding an unemployment rate of 14 percent 
        among United States citizens, the Commonwealth has recruited 
        increasing numbers of foreign workers.
            (9) Even though the Commonwealth alleges that unfilled job 
        openings justify recruitment of an increasing number of foreign 
        workers, the Commonwealth's own statistics indicate an 
        unemployment rate of 4.5 percent among foreign workers.
            (10) The United States Immigration and Naturalization 
        Service reported that the Commonwealth of the Northern Mariana 
        Islands has no reliable records of aliens who have entered the 
        Commonwealth, how long they remain, and when, if ever, they 
        depart.
            (11) At the time that the Covenant was being negotiated, 
        representatives of the government of the Northern Mariana 
        Islands expressed concern that the minimum wage provisions of 
        the Fair Labor Standards Act would disrupt the Commonwealth's 
        struggling local economy.
            (12) In response to these concerns, section 503(c) of the 
        Covenant provided that the minimum wage provisions of the Fair 
        Labor Standards Act did not immediately apply to the 
        Commonwealth.
            (13) Congress expressly reserved the right to extend the 
        minimum wage provisions of the Fair Labor Standards Act to the 
        Commonwealth of the Northern Mariana Islands at a future date.
            (14) The economy of the Commonwealth of the Northern 
        Mariana Islands has grown significantly and, in 1996, annual 
        gross business revenues rose to $1,500,000,000, a sixfold 
        increase during the past decade.
            (15) The current minimum wage in the Commonwealth of the 
        Northern Mariana Islands is only $3.05 per hour for garment and 
        construction industry workers and $3.05 per hour for those 
        working in other industries.
            (16) The United States Department of Labor has uncovered a 
        systematic pattern of labor abuses in the Commonwealth of the 
        Northern Mariana Islands, including--
                    (A) involuntary servitude and peonage,
                    (B) illegal withholding of wages earned,
                    (C) nonpayment of overtime wages,
                    (D) illegal deductions from paychecks,
                    (E) kickbacks of wages paid to employees,
                    (F) employee lockdowns in worksites and living 
                barracks, and
                    (G) unsafe and unhealthy working and living 
                environments.
            (17) Despite an expectation that they will enjoy the 
        American dream in the Commonwealth of the Northern Mariana 
        Islands, foreign workers have been required to sign contracts 
        with government representatives in the People's Republic of 
        China which--
                    (A) waive rights guaranteed to United States 
                workers,
                    (B) forbid participation in religious and political 
                activities while in the United States,
                    (C) prohibit workers from dating or marrying in the 
                United States,
                    (D) subject employees to civil and labor penalties 
                if returned to China, and
                    (E) permit Chinese Government recruiters to charge 
                a fee of 25 percent of an employee's net pay for a 
                period of two years.
            (18) The United States Department of Justice has determined 
        that the immigration and labor situation in the Commonwealth of 
        the Northern Mariana Islands has created a major organized 
        crime problem in the Commonwealth which involves--
                    (A) immigration document fraud,
                    (B) public corruption,
                    (C) racketeering,
                    (D) drug trafficking,
                    (E) prostitution,
                    (F) pornography,
                    (G) extortion,
                    (H) gambling,
                    (I) smuggling, and
                    (J) other forms of violent crime.
            (19) The United States Department of Justice is 
        investigating numerous cases in the Commonwealth of the 
        Northern Mariana Islands of women being recruited from the 
        Philippines, China, and other Asian countries expressly for 
        criminal sexual activity, and has also described this situation 
        as the ``systematic trafficking of women and minors for 
        prostitution''.
            (20) The Commonwealth of the Northern Mariana Islands is 
        exempt from Federal immigration law, the Federal minimum wage 
        law, and Federal tariffs and taxes, yet its products are sold 
        as ``Made in USA'' although 95 percent of the workers in the 
        garment manufacturing industry are not United States citizens.
            (21) Garments made in the Commonwealth of the Northern 
        Mariana Islands carrying the ``Made in USA'' label compete 
        directly with garments made on the United States mainland by 
        workers and businesses that are subject to Federal immigration 
        law, the Federal minimum wage law, and Federal taxes.
            (22) In 1996, garment manufacturers in the Commonwealth 
        shipped garments to the Continental United States with a 
        wholesale value of $555 million, a 30-percent increase over the 
        previous year.
            (23) Congress appropriated $10 million to fund a three-year 
        initiative by the United States Departments of Justice, Labor, 
        and Interior to assist the Commonwealth in its efforts to 
        improve its labor and immigration policies.
            (24) Despite this appropriation there has been little or no 
        improvement in the immigration and labor policies of the 
        Commonwealth of the Northern Mariana Islands.
            (25) The government of the Commonwealth of the Northern 
        Mariana Islands has been ineffective in stemming the flow of 
        immigration onto United States soil, raising the wage and 
        living standards for workers, and aggressively prosecuting 
        labor and human rights abuses.
            (26) Despite efforts by the Reagan, Bush, and Clinton 
        administrations to persuade the government of the Commonwealth 
        of the Northern Mariana Islands to correct problems in the 
        Commonwealth, the situation has only deteriorated.
            (27) The continuing concern about labor abuses, the 
        Commonwealth's immigration policy, and the employment of 
        foreign workers in a manner that unfairly competes with other 
        United States manufacturing prompted President Clinton on May 
        30, 1997, to notify the Governor of the Commonwealth of the 
        Northern Mariana Islands that Federal immigration and minimum 
        wage laws should be applied to the Commonwealth.

SEC. 3. APPLICATION OF IMMIGRATION LAW.

    (a) Article V, section 506 of the Covenant to Establish a 
Commonwealth of the Northern Mariana Islands in Political Union with 
the United States of America (approved by Public Law 94-241, 90 Stat. 
263) is amended by adding at the end thereof the following:
    ``(e)(1) For purposes of entry into the Northern Mariana Islands by 
any individual (but not for purposes of entry by an individual into the 
United States from the Northern Mariana Islands), the Immigration and 
Nationality Act shall apply as if the Northern Mariana Islands were a 
State (as defined in section 101(a)(36) of the Immigration and 
Nationality Act).
    ``(2) Notwithstanding paragraph (1), with respect to an individual 
seeking entry into the Northern Mariana Islands for purposes of 
employment in the textile, hotel, tourist, or construction industry 
(including employment as a contractor), the Federal statutes and 
regulations governing admission to Guam of individuals described in 
section 101(a)(15)(H)(ii)(b) of the Immigration and Nationality Act 
shall apply. For purposes of this paragraph--
            ``(A) references in such statutes and regulations to United 
        States resident workers shall be deemed to be references to 
        United States citizens, national or resident workers; and
            ``(B) references in such statutes and regulations to Guam 
        shall be deemed to be references to the Northern Mariana 
        Islands.
    ``(3) When deploying personnel to enforce the provisions of this 
section, the Attorney General shall coordinate with, and act in 
conjunction with, State and local law enforcement agencies to ensure 
that such deployment does not degrade or compromise the law enforcement 
capabilities and functions currently performed by immigration officers.
    ``(4) The Attorney General shall prescribe and implement a 
transition period for the amendments made to section 506(a) of the 
Covenant. The transition period shall not exceed 4 years from the 
effective date of this subsection. Not later than 2 years after the 
date of enactment of the Commonwealth of the Northern Mariana Islands 
Reform Act, the Attorney General shall submit a report on the status of 
implementing this section.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect 180 days after the date of enactment of this Act except 
that the amendment designated as ``(e)(2)'' shall take effect on the 
date of enactment of this Act.

SEC. 4. LABELING REQUIREMENTS FOR TEXTILE FIBER PRODUCTS.

    (a) Public Law 94-241 is amended by adding at the end the 
following:
``Sec. 6. Labeling of textile fiber products
    ``(a) No textile fiber product that is made or assembled in the 
Commonwealth of the Northern Mariana Islands shall have a stamp, tag, 
label, or other means of identification or substitute therefor on or 
affixed to the product stating `Made in USA' or otherwise stating or 
implying that the product was made or assembled in the United States 
unless the product is made or assembled using direct labor that meets 
the required percentage of qualified manhours.
    ``(b) A textile fiber product that does not meet the requirements 
of subsection (a) shall be deemed to be misbranded for purposes of the 
Textile Fiber Products Identification Act (Public Law 85-897, 72 Stat. 
1717).
    ``(c) In this section:
            ``(1) Direct labor.--The term `direct labor' includes any 
        work provided to prepare, assemble, process, package, or 
        transport a textile fiber product, but does not include 
        supervisory, management, security, or administrative work.
            ``(2) Freely associated states.--The term `Freely 
        Associated States' means the Republic of Palau, the Republic of 
the Marshall Islands, and the Federated States of Micronesia.
            ``(3) Qualified manhours.--The term `qualified manhours' 
        means the manhours of direct labor performed by persons who are 
        citizens or nationals of the United States or citizen of the 
        Freely Associated States.
            ``(4) Required percentage.--The term `required percentage' 
        means--
                    ``(A) 20 percent, for the period beginning January 
                1, 1998, through December 31, 1998;
                    ``(B) 35 percent, for the period beginning January 
                1, 1999, through December 31, 1999; and
                    ``(C) 50 percent, for the period beginning January 
                1, 2000, and thereafter.
    ``(b) Effective Date.--The amendments made by this section shall 
take effect on the date of enactment of this Act.''.

SEC. 5. MINIMUM WAGE REQUIREMENTS.

    (a) Section 503 of Article V of the Covenant to Establish a 
Commonwealth of the Northern Mariana Islands in Political Union with 
the United States of America (approved by Public Law 94-241) is amended 
by deleting ``States; and (c) the minimum wage provisions of Section 6, 
Act of June 25, 1938, 52 State. 1062, as amended.'' and inserting in 
lieu thereof ``States.''.
    (b) Public Law 94-241, 90 Stat. 263, is amended by adding at the 
end thereof the following:
``Sec. 7. Minimum wages in the Commonwealth of the Northern Mariana 
              Islands
    ``(a) The minimum wage provisions of the Fair Labor Standards Act 
of 1938 (29 U.S.C. 206(a)(1)) shall apply to the Commonwealth of the 
Northern Mariana Islands, except that--
            ``(1) during the period beginning 30 days after the date of 
        enactment of this Act and ending on December 31, 1997, the 
        minimum wage rate applicable to the Commonwealth of the 
        Northern Mariana Island shall be $3.05 an hour for an employee;
            ``(2) beginning on January 1, 1998, and each calendar year 
        thereafter, the minimum wage rate applicable to the 
        Commonwealth of the Northern Mariana Islands for an employee 
        for each such calendar year shall be the minimum rate 
        applicable to the Commonwealth of the Northern Mariana Islands 
        for the preceding calendar year increased by 30 cents or the 
        amount necessary to increase the minimum wage rate to the rate 
        described in section 6(a)(1) of the Fair Labor Standards Act of 
        1938, whichever is less; and
            ``(3) after the calendar year in which the minimum wage 
        rate applicable to the Commonwealth of the Northern Mariana 
        Islands has been increased under subparagraph (A) to the 
        minimum wage rate described in section 6(a)(1) of the Fair 
        Labor Standards Act of 1938, the minimum wage rate applicable 
        to the Commonwealth of the Northern Mariana Islands for an 
        employee for any succeeding calendar year shall be the rate 
        described in such section.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect 30 days after the date of enactment of this Act.

SEC. 5. REPORT.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary of the Interior, in consultation with other Federal agencies, 
shall conduct a study of the extent of human rights violations and 
labor rights violations in the Commonwealth of the Northern Mariana 
Islands, including the use of forced or indentured labor, and any 
efforts being taken by the Government of the United States or the 
Commonwealth of the Northern Mariana Islands to address or prohibit 
such violations. The Secretary of the Interior shall include the 
results of such study in the annual report, entitled ``Federal CNMI 
Initiative on Labor, Immigration, and Law Enforcement,'' transmitted to 
Congress.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated such sums as may be 
necessary to carry out provisions of this Act.

Summary: Commonwealth of the Northern Mariana Islands Reform Act - Amends the Covenant to Establish the Commonwealth of the Northern Mariana Islands to treat the Northern Mariana Islands as a State under the Immigration and Nationality Act with respect to an individual's entry into the Commonwealth . Applies Federal statutes and regulations governing admission of certain workers to Guam to individuals seeking entry into the Northern Mariana Islands for purposes of employment in the textile, hotel, tourist, or construction industries. Requires the Attorney General to coordinate and act in conjunction with State and local law enforcement agencies to ensure that deployment of personnel to enforce such statutes and regulations does not degrade or compromise the law enforcement capabilities and functions currently performed by immigration officers. Amends Federal law to prohibit affixation of the Made in the USA label to a textile fiber product from the Northern Mariana Islands unless it is made or assembled using direct labor meeting a specified percentage of qualified manhours by US citizens or nationals or citizens of the Freely Associated States of the Republic of Palau, the Republic of the Marshall Islands, or the Federated States of Micronesia. Applies to the Northern Mariana Islands the minimum wage provisions of the Fair Labor Standards Act of 1938, as modified by this Act. Requires a minimum wage through December 31, 1997, of $3.05 per hour, adjusted annually thereafter in increments of $.30 or the amount necessary to increase the minimum wage rate to the rate required by the Fair Labor Standards Act of 1938, whichever is less. Applies permanently to the Northern Mariana Islands the minimum wage rate required by the Fair Labor Standards Act of 1938 once the incrementally increased rate equals such rate. Directs the Secretary of the Interior to study the extent of human and labor rights violations in the Commonwealth of the Northern Mariana Islands, including the use of forced or indentured labor, and any efforts taken by the Government of the United States or the Commonwealth of the Northern Mariana Islands to address or prohibit such violations. Requires inclusion of study results in the annual Federal CNMI Initiative on Labor, Immigration, and Law Enforcement report to Congress. Authorizes appropriations.