Commonwealth of the Northern Mariana Islands: Pending Legislation Would Apply U.S. Immigration Law to the CNMI with a Transition Period
Published: 2008-03-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Commonwealth of the Northern Mariana Islands (CNMI) is subject to most U.S. laws but, under the terms of its 1976 covenant with the United States, administers its own immigration system. It has applied this flexibility to admit substantial numbers of foreign workers, in addition to admitting tourists and foreign investors. The covenant grants Congress the right to apply federal immigration law to the CNMI. On December 11, 2007, the House of Representatives passed legislation applying U.S. immigration law to the CNMI; as of report issuance, this legislation was pending in the Senate. If passed, it will amend the covenant and will apply federal immigration law to the CNMI 1 year after the legislation's enactment, subject to a transition period that begins 1 year after enactment but may be delayed 180 days. GAO was asked to review key provisions of the pending legislation, current U.S. immigration law, and current CNMI immigration law, particularly regarding (1) foreign workers, (2) tourists, and (3) foreign investors. The Departments of Homeland Security and the Interior generally agreed with the findings in this report, and the Department of Labor provided no comments. The CNMI government disagreed with some key findings related to GAO's interpretation of the legislation. GAO continues to interpret the legislation as stated in this report.
section_title: What GAO Found
paragraphs: The pending legislation applies U.S. immigration law to the CNMI and provides federal agencies some flexibility in preserving the CNMI's access to workers, tourists, and foreign investors as it transitions to a federal system. However, without implementing regulations, key details remain unknown. During the transition period, foreign workers may be admitted to the CNMI through exemptions from caps that restrict the number of U.S. visas for nonimmigrant workers. Workers not otherwise eligible under federal law may be admitted through a CNMI-only permit program, which may be extended indefinitely for up to 5 years at a time. Current workers who do not obtain U.S. immigration status may continue to live and work in the CNMI for a limited time. During and after the transition period, CNMI employers also can petition for nonimmigrant and employment-based permanent immigration status for workers under the same procedures as other U.S. employers. However, access to foreign workers in low-skill jobs will be limited after the end of the transition period in 2013 or 2014 and after any extensions of the CNMI-only permit program, because the demand for certain U.S. nonimmigrant worker visas recently has exceeded the supply and because no nonimmigrant visas are available for workers in continuous low-skill positions. While fees for the CNMI-only work permit will be determined by federal regulations and are unknown, the current fees for U.S. foreign worker permits that would apply after the end of the transition period and any extensions range higher than the CNMI's current foreign worker permit fees. The pending legislation establishes a joint visa waiver program by adding the CNMI to an existing Guam visa waiver program. The program exempts tourism and business visitors from certain countries to the CNMI and Guam from the standard U.S. visa documentation requirements. Citizens of countries not included in the CNMI-Guam or other U.S. visa waiver programs may apply for U.S. visitor visas, which require in-person applications and higher fees than the CNMI currently assesses. Changes in tourists' access to the CNMI will depend on the countries included in the CNMI-Guam visa waiver program. Until the joint program's implementing regulations are established, GAO cannot determine whether the program will be more or less restrictive than the current CNMI and Guam waiver programs. After federal immigration law applies, new CNMI foreign investors must meet federal law's more stringent investment requirements to obtain immigrant investor status, which allows investors to petition for U.S. permanent resident status that is currently unavailable in the CNMI. New investors also could apply for nonimmigrant treaty investor status. In addition, the pending legislation allows current CNMI foreign investors to convert to CNMI-only nonimmigrant treaty investors during the transition period.

section_title: Letter
paragraphs: The Commonwealth of the Northern Mariana Islands (CNMI) is subject to  most U.S. laws, and the United States has complete responsibility and  authority for CNMI defense and foreign affairs. However, under the terms  of its 1976 covenant with the United States, the CNMI administers its own  immigration system. Since 1978, it has applied this flexibility to admit  substantial numbers of foreign workers from other countries, particularly  China and the Philippines. In 2005, foreign workers represented two-thirds  of all CNMI workers and outnumbered U.S. citizens in most industries,  including the garment manufacturing and tourism sectors, which have  been central to the CNMI’s economy. The CNMI also admits tourists under  its own entry permit and entry permit waiver programs, and it provides  various types of admission to foreign investors.
Under the terms of the U.S.–CNMI covenant, Congress has the right to  apply federal immigration law without the consent of the CNMI  government. On December 11, 2007, the House of Representatives passed  legislation applying U.S. immigration law to the CNMI; as of report  issuance, this legislation was pending in the Senate. If passed, the  legislation will amend the covenant to establish federal control of CNMI  immigration, applying U.S. immigration law to the CNMI 1 year after the  date of enactment with several exceptions affecting foreign workers and  investors during a transition period ending in 2013 under H.R. 3079,  passed by the House, or in 2014 under S. 2739, pending in the Senate. In  addition, the U.S. Secretary of Labor will have the authority to extend  indefinitely, for up to 5 years at a time, a transition period program  providing CNMI-only work permits. Further, the legislation amends U.S.  immigration law to add the CNMI to an existing visa waiver program for  Guam visitors. Any changes to U.S. immigration law enacted by the  Congress after the enactment of this legislation would also be applicable  to the CNMI.
The stated intent of the pending legislation is to ensure effective border  control procedures and protect national and homeland security, while  minimizing the potential adverse economic and fiscal effects of phasing  out the CNMI’s own foreign worker program and maximizing the potential  for economic and business growth. You asked us to review key provisions  of the pending legislation, current U.S. immigration law, and current CNMI  immigration law, particularly regarding (1) foreign workers, (2) tourists,  and (3) foreign investors. We plan to issue a separate report examining the  potential impact of the pending legislation on the CNMI’s economy and  labor market.
For this report, we reviewed relevant CNMI immigration and labor laws,  current U.S. immigration law, and pending legislation that would apply  U.S. immigration law to the CNMI. To examine CNMI immigration laws,  we reviewed portions of the following CNMI laws relevant to this report:  the Nonresident Workers Act, the Northern Mariana Islands  Administrative Code, the Commonwealth Employment Act of 2007, and  related immigration and labor laws and agreements. We also conducted a  site visit in the CNMI and interviewed officials in the CNMI Office of the  Governor, the CNMI Department of Immigration, the CNMI Department of  Labor, and the Marianas Visitors Authority. We conducted additional  interviews with CNMI officials in Washington, D.C. To examine U.S.  immigration law, we reviewed the U.S. Immigration and Nationality Act  (INA) and related regulations and interviewed officials from the U.S.  Departments of Homeland Security (DHS) and the Interior (DOI). We did  not review the extent to which CNMI or U.S. laws were properly enforced  or implemented. We also reviewed proposed legislation applying U.S.  immigration law to the CNMI, including H.R. 3079, passed by the House of  Representatives, and S. 2739, pending in the Senate. We conducted this  performance audit from December 2007 to March 2008 in accordance with  generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on our  audit objectives. See appendix I for further details about our methodology.
subsections: section_title: Background
paragraphs: The CNMI consists of 14 islands in the Pacific Ocean, 3 of which are  substantially inhabited, just north of Guam and about 5,500 miles from the  U.S. mainland. In 2005, more than two-thirds of the CNMI’s workers were  non-U.S. citizens (noncitizens), who were predominantly Chinese or  Filipino. Foreign workers make up more than two-thirds of the workforce  for the CNMI’s two major industries, garment manufacturing and tourism.  Noncitizens also invest in the CNMI, contributing entrepreneurial skills  and capital and owning businesses.
subsections: section_title: CNMI Economy
paragraphs: In 2007, we reported that the CNMI’s economic potential was constrained,  in part, by its lack of diversification and faced serious challenges owing to  declines in garment manufacturing and tourism. Among factors affecting  the garment industry, liberalization in trade law in the early 2000s reduced  the CNMI’s trade advantage relative to low-wage countries such as China,  causing CNMI exports to fall. The CNMI’s tourism industry has been  subject to fluctuations due to Asian economic trends in the late 1990s, as  well as recent changes in airline practices. Until 2007, the CNMI’s  workforce was subject to a minimum wage set by the CNMI government  that was lower than the U.S. mainland’s; however, Congress enacted a law  in 2007 that applied the U.S. minimum wage to the CNMI and will  gradually increase the CNMI minimum wage until it meets federal  minimum wage requirements.
section_title: CNMI-U.S. Covenant
paragraphs: In 1976, after almost 30 years as a trust territory of the United States, the  District of the Mariana Islands entered into a covenant with the United  States establishing the island territory’s status as a self-governing  commonwealth in political union with the United States. The covenant  grants CNMI citizens the right of self-governance over internal affairs and  grants the United States complete responsibility and authority for matters  relating to foreign affairs and defense affecting the CNMI. Under the  covenant, the U.S. government may enact legislation in accordance with  its constitutional processes that will be applicable to the CNMI. To  respect the CNMI’s right of self-government under the covenant, certain  provisions of the covenant may be modified only with the consent of both  the federal government and the CNMI government. These provisions  include those relating to the political relationship between the United  States and the CNMI; the CNMI Constitution, citizenship, and nationality;  the application of the U.S. Constitution to the CNMI; and the land  ownership rights of CNMI citizens. Most other provisions of the CNMI  covenant may be modified by the federal government without the consent  of the CNMI government, and local CNMI laws that were not inconsistent  with federal laws or treaties of the United States when the covenant was  enacted remain in effect. In addition, international treaty obligations  between the United States and other countries apply to the CNMI through  the covenant.
The covenant initially made many federal laws applicable to the CNMI,  including laws that provide federal services and financial assistance  programs. The covenant preserved the CNMI’s exemption from certain  federal laws that had previously been inapplicable to the Trust Territory of  the Pacific Islands, including federal immigration laws with certain limited  exceptions and certain federal minimum wage provisions. However,  under the terms of the covenant, the federal government has the right to  apply federal law in these exempted areas without the consent of the  CNMI government.
section_title: Current CNMI Immigration Law
paragraphs: CNMI immigration law currently includes the following provisions for  foreign workers, tourists, and foreign investors:    Foreign workers. The CNMI currently retains legislative authority over  most immigration laws. While it does not have embassies or issue visas in  other countries, it regulates entry to the CNMI through a permit system.  The CNMI recently passed a bill that establishes new immigration and  labor rules for foreign workers in the CNMI, as of January 1, 2008. These  rules continue to provide for, among other things, a nonresident worker  entry permit for noncitizens entering the CNMI whom the CNMI  Department of Labor has certified as eligible for temporary work.  Employers seeking work permits for their temporary workers must be able  to demonstrate that they advertised the position and were unable to find a  qualified CNMI resident, with some exemptions available. CNMI law also  contains an employment preference for citizens and permanent residents,  requiring that most employers in the CNMI hire at least 20 percent of their  employees from these groups, increasing in phases to 30 percent by 2013.  Employers with fewer than five employees are exempt from this  requirement, and the CNMI Secretary of Labor may grant waivers for  construction projects of limited duration and for light manufacturing.  CNMI law currently includes a general moratorium on hiring foreign  workers, under which employers can renew contracts for foreign workers  and can replace current workers with transfers for certain occupations but  cannot add to the total number of foreign workers employed in the CNMI.  Additional exemptions from the moratorium exist for visitor industry  supporting services, certain light manufacturing operations, employers  who have hired over 35 percent of their employees from CNMI citizens,  and major new developments that benefit the CNMI economy. The  moratorium for the tourism industry expired on January 1, 2008; after a  gradual phase-out applicable to other industries ends in 2011, all  employers will be able to hire foreign workers.
The CNMI has developed related regulations, effective February 1, 2008,  for hiring and admitting foreign workers and for their subsequent  employment. For entry into the CNMI, a foreign worker must provide  certain documents to the CNMI immigration authority and sign a form in  the worker’s native language attesting to compliance with CNMI  immigration requirements. The CNMI Director of Labor must approve the  employment contract and the worker’s right to be present in the CNMI.  Foreign workers must attend an orientation session upon admission into  the CNMI and must carry a valid entry permit with them at all times. Under  the standards for employment, employers in the CNMI are required to  provide foreign workers with medical insurance, and they may provide  additional benefits, such as housing, food, and transportation. CNMI  regulations also contain specific requirements for the renewal,  nonrenewal, and termination of employment contracts for foreign  workers.
Compared with previous CNMI law regarding foreign workers, the new  law reduces the time for filing labor complaints; requires that almost all  CNMI government employees be U.S. citizens or permanent residents; and  adds a requirement that most foreign workers leave the CNMI for at least 6  consecutive months during every 3.5 year period, among other changes.  Immediate family members of foreign national workers may enter the  CNMI for the term of the approved employment contract after the foreign  worker has been in the CNMI for 90 days.
CNMI employers do not currently have the option to petition for  immigrant status of workers under CNMI law. While U.S. lawful  permanent residents may work in the CNMI, time spent in the CNMI  generally does not count toward the time in the United States required to  attain U.S. citizenship. Residence in the CNMI only counts as residence for  naturalization purposes for immediate relatives of U.S. citizens; other  lawful permanent residents residing in the CNMI currently do not accrue  time for naturalization purposes.
Tourists. According to the CNMI government, tourists from certain  countries may enter the CNMI as part of its entry permit waiver program.  The program allows eligible participants to enter for tourism or business  for up to 90 days without a visitor entry permit. Noncitizens who are  ineligible for a waiver may apply for a visitor entry permit, which is valid  for a single entry for 30 days. Visitors entering the CNMI with a visitor  entry permit must have a valid passport and a verified round-trip itinerary  and must have either a CNMI sponsor or acceptable proof of the financial  means to support the visit. According to the CNMI government,  information on visitor permit applicants from China is collected and  reviewed by the CNMI under the Electronic Visitor Entry Permit Program.  No other countries have asked to participate in the program. In addition,  Japanese, Korean, and certain other tourists ages 55 and above may enter  for up to 90 days under a comity entry permit for citizens of countries that  provide a comparable permit to CNMI residents.
Foreign investors. The CNMI currently has a foreign investor permit  available for an indefinite period of time for individuals who submit  evidence of good moral character and who meet all of the requirements of  the foreign investment certificate. Foreign investors in the CNMI must  maintain an investment of at least $250,000 by an individual in a single  investment or $100,000 per person in an aggregate investment exceeding  $2 million. The CNMI also offers a retiree investor entry permit requiring  a minimum investment of $100,000 in residential property (or $75,000 on  the islands of Tinian or Rota) by an applicant 55 years or older. In  addition, the CNMI’s long-term business entry permit for holders of a long- term business certificate is valid for 2 years and requires an investment of  at least $150,000 in a public organization or at least $250,000 in a private  investment. They also must provide a security deposit of $25,000. The  CNMI also offers a regular-term business entry permit. Immediate relatives  of aliens may obtain an entry permit if they satisfy other requirements of  CNMI law and can post a cash bond in an amount of twice the cost of  return travel.
section_title: Current U.S. Immigration Law
paragraphs: Noncitizens may apply for entry into the United States as either  immigrants intending to reside permanently or as nonimmigrants. The  immigrant categories include various employment-based categories for  admission to the United States as lawful permanent residents, who are  permitted to work in the United States as part of their immigration status.  The nonimmigrant categories for temporary admission include diplomats,  visitors for business or pleasure, treaty investors, students, journalists,  teachers, fiancés or fiancées of U.S. citizens, extraordinary artists or  athletes, and workers who meet certain requirements, among others. As a  general rule, nonimmigrants temporarily admitted for an employment- based purpose are authorized to work only in the authorized position;  lawful permanent residents and other immigrants may work for any  employer. See appendix II for a list of U.S. nonimmigrant classes of  admission. Standard U.S. fees for visas and immigrant petitions include  DHS petition fees, Department of State visa fees, and for some foreign  workers, Department of Labor fees for labor certification.
Foreign workers. The INA includes several types of visas for  nonimmigrant workers and their families (H visas) and sets caps for two of  these types of visas. In particular, the H-1 category includes high-skill  workers coming to the United States temporarily to perform in specialty  occupations. H-1B visa holders may be admitted for an initial period of 3  years that can be renewed for a total of 6 years, and they can work in  employment of varied duration, depending on the terms of the visa. The  H-2 category includes H-2A visas for foreign workers providing temporary  or seasonal agricultural labor services, as well as H-2B visas for other  temporary workers who can perform short-term service or labor in a job  for which unemployed U.S. workers cannot be found. H-2B visa holders  may be admitted for an initial period of 1 year. The H-3 category exists for  workers with residence in a foreign country who are coming to the United  States temporarily as trainees in a program not designed primarily to  provide productive employment or as participants in a special education  exchange visitor program. H-4 visas provide entry, but not work  authorization, to spouses and children of H visa holders. There is no H visa  for workers performing continuous, rather than temporary, work who do  not meet the high-skill requirements of the H-1 visas. In addition, both H- 1B and H-2B visas are capped—only 65,000 H-1B visa holders and 66,000  H-2B first-time visa holders may be issued visas in each fiscal year.
Other nonimmigrant visas available for foreign workers include, among  others, L visas for intracompany transfers; O visas for individuals of  extraordinary ability or achievement; P visas for artists, athletes, and  entertainers; and R visas for religious workers. In addition to  nonimmigrant visas, the INA contains permanent employer-sponsored  immigrant visas for individuals seeking to reside permanently in the  United States.
Tourists. Under federal law, visitors may come to the United States for  business on a B-1 visa, for pleasure on a B-2 visa, or for business or  pleasure on a combined B-1-B-2 visa. Visitors with B visas are normally  admitted for a minimum of 6 months, but not more than 1 year. B visa  holders generally may not enroll in a course of study while in the United  States on a B visa. Citizens of 27 countries may participate in the U.S. Visa  Waiver Program, which allows stays of up to 90 days for business or  pleasure in the United States without obtaining a nonimmigrant visa if they  possess a valid passport, are determined by DHS not to be a threat to the  United States, have a round-trip ticket, and execute the proper  immigration forms, among other requirements. In addition to the  countries under the U.S. Visa Waiver Program, federal law allows nationals  of 9 additional countries to visit Guam in B status for up to 15 days  without obtaining a visa.
Foreign investors. The INA allows foreign investors to enter the United  States as nonimmigrants under treaty investor status with an E-2 visa.  Treaty investors must invest a substantial amount of capital in a bona fide  enterprise in the United States, must be seeking entry solely to develop  and direct the enterprise, and must intend to depart the United States  when their treaty investor status ends. Treaty investors must be nationals  of a country with which the United States has a treaty of friendship,  commerce, or navigation, and must be entering the United States pursuant  to the provisions of the treaty. E-2 status is valid for up to 2 years and may  be extended in 2-year increments. Spouses or children may apply to join  foreign investors under the E-2 visa, and spouses are authorized to work  under an E-2 visa. The INA also allows foreign investors to seek  permanent immigrant visas for employment-creation purposes. Individuals  seeking immigrant visas have to meet higher thresholds than do E-2 visa  holders, including the general requirement to establish a business that  creates at least 10 full-time jobs and an investment of at least $1 million.
section_title: Pending U.S. Legislation
paragraphs: The stated intent of the pending legislation is to ensure, through the  application of federal immigration law to the CNMI, that effective border  control procedures are implemented and observed and that national and  homeland security issues are properly addressed. The legislation states  that it includes special provisions to allow for the orderly phasing out of  the CNMI’s foreign worker program and the orderly phasing in of federal  immigration responsibilities in the CNMI. The legislation also states that it  intends to minimize the potential adverse economic and fiscal effects of  phasing out the CNMI’s own foreign worker program and to maximize the  CNMI’s potential for future economic and business growth.
In requiring the CNMI to be subject to federal immigration law, the  pending legislation replaces all CNMI laws related to the admission and  removal of aliens, including the CNMI’s provisions of immigration law  regarding nonresident contract workers. Federal agencies will be  responsible for implementing and enforcing U.S. immigration law in the  CNMI, including establishing offices and staff. Other CNMI laws related to  admission and removal of aliens would also be preempted, which could  include some local CNMI labor laws. However, all local labor and other  laws not related to the admission or removal of aliens would remain in  effect.
H.R. 3079, passed by the House, and S. 2739, pending in the Senate, include  the same provisions applying U.S. immigration law to the CNMI but  contain several exceptions. First, the transition period ends in 2013 under  the House bill and in 2014 under S. 2739. Second, S. 2739 adds the  Secretary of Defense to those with whom the U.S. Secretary of Labor must  consult in determining whether to extend the CNMI-only work permit  program. In addition, S. 2739 contains the text of other bills unrelated to  immigration law in the CNMI.
The legislation also includes several provisions related to Guam, such as  the expansion of options for nonimmigrants to enter and work in Guam.  Guam is an unincorporated U.S. territory south of the CNMI in the western  Pacific. Under the legislation, the exemption for the CNMI from the  numerical limitations for H visas until 2013 or 2014 also applies to Guam.  The legislation also amends U.S. immigration law to add the CNMI to  Guam’s current visa waiver program to create a combined CNMI and  Guam visa waiver program, under which DHS would promulgate a new list  of countries that would be eligible for a Guam or CNMI visa waiver.
subsections: section_title: Transition Period in Pending U.S. Legislation
paragraphs: The pending legislation applies provisions of federal immigration law to  the CNMI one year after the legislation’s enactment, subject to a transition  period that begins 1 year after enactment and ends on December 31, 2013,  under H.R. 3079, passed by the House, and on December 31, 2014, under S.  2739, pending in the Senate. The Secretary of Homeland Security has sole  discretion to delay the start of the transition period for up to 180 days, and  the Secretary of Labor has the authority to extend indefinitely a provision  related to the CNMI-only work permit program for up to 5 years at a time.  Among other provisions, the legislation prohibits the CNMI government  from allowing an increase in the total number of foreign workers who are  present in the CNMI between the legislation’s enactment and the effective  date of the transition period. Also, the legislation states that CNMI-only  visas are not valid for entry into other parts of the United States and that  aliens leaving the CNMI must be rescreened for entry into the continental  United States.
During the transition period, the Secretary of Homeland Security, in  consultation with the Secretaries of the Interior, Labor, and State, has the  responsibility to establish, administer, and enforce a transition program to  regulate immigration in the CNMI. Each agency must issue regulations and  implement agreements with the other agencies to identify and assign their  respective duties for timely implementation of the transition program. The  agreements must address procedures to ensure that CNMI employers have  access to adequate labor and that tourists, students, retirees, and other  visitors have access to the CNMI without unnecessary obstacles. The  agreements also may allocate funding among the respective agencies  tasked with related responsibilities.
The Secretary of Homeland Security is granted significant discretion and  flexibility during the transition period, though DHS is required, in some  circumstances, to consult with other federal agencies or the CNMI on its  decisions. Implementation decisions by DHS will determine the extent to  which CNMI local laws and authority will be affected. Key rules and other  aspects of the transition program require further development through  regulation. In addition, federal agencies must determine how to implement  and enforce the application of federal immigration law in the CNMI,  including establishing offices, hiring staff, and implementing screening and  enforcement systems.
section_title: Other Key Provisions of Pending Legislation
paragraphs: Other key provisions of the pending legislation establish the position of a  nonvoting CNMI delegate to the House of Representatives, require several  studies on the legislation’s implementation, transfer responsibility for  refugee protection in the CNMI to the federal government, and relate to  lawful permanent resident status.
The pending legislation establishes the position of a nonvoting CNMI  delegate in the House of Representatives, to be filled by the Resident  Representative to the United States, a position authorized by the CNMI  covenant. The delegate must be elected at large by a plurality of votes at  the federal general election of 2008 and at federal general elections every  second year thereafter. The delegate will not be allowed to vote on  legislation before the full House of Representatives but may be able to  participate in committee processes at the discretion of Congress.
The pending legislation also requires several studies on the  implementation of the legislation to be conducted by various federal  agencies and other entities and submitted to Congress. The required  reports include an administration report on the economic conditions in the  CNMI, a DHS study on federal personnel and resource requirements, and a  GAO assessment of the implementation of the legislation and its economic  impact to be delivered no later than 2 years after enactment. DOI must  also consult with DHS and the CNMI Governor and report to Congress on  the status of the nonresident guest-worker population in the CNMI,  including recommendations on whether Congress should consider  permitting lawfully admitted nonresident workers to apply for long-term  immigration status under the INA. Further, the CNMI Governor may  provide annual reports to the President on the implementation of this  legislation and any future recommendations, which will be forwarded to  Congress after internal review.
The pending legislation federalizes the CNMI’s responsibility for refugee  protection, authorizing funding by DOI and designating DHS as the  “protection consultant” for the CNMI. The CNMI is currently responsible  for implementing U.S. obligations under international treaties that protect  refugees from persecution and torture, and the legislation would transfer  these responsibilities directly to the federal government. The legislation  also allows aliens present in the CNMI to apply for discretionary asylum at  the end of the transition period.
In addition, other provisions of the bill would affect aspects of immigrant  status, including requirements that could affect a lawful permanent  resident’s ability to stay in the United States. For determinations of  whether a lawful permanent resident has been absent from the United  States long enough to lose the right to remain in the United States under  federal law, presence in the CNMI will retroactively be considered  presence in the United States and will not count against the resident.
section_title: Pending Legislation Provisions for Foreign Workers
paragraphs: The pending legislation allows federal agencies to preserve access to  foreign workers in the CNMI during the transition period but limits access  to certain workers after the transition period ends. Under the transition  program, employers have four key options for obtaining foreign workers in  the CNMI. First, employers in the CNMI and Guam can petition for foreign  workers under federal nonimmigrant H visas without counting against the  established numerical limitations for H-1B and H-2B visas. Second, during  the transition period, employers of workers not otherwise eligible for  admission under federal law can apply for temporary CNMI-only  nonimmigrant work permits, and this program may be extended  indefinitely by the U.S. Secretary of Labor for up to 5 years at a time.  Third, during the transition period, existing CNMI-government-approved  foreign workers lacking U.S. immigration status can continue to live and  work in the CNMI for a limited time. Fourth, during and after the transition  period, CNMI employers can petition for nonimmigrant status and  employment-based permanent immigration status for workers under the  same procedures as other U.S. employers. However, access to foreign  workers in low-skill positions will be limited after the end of the transition  period in 2013 or 2014 and after any extensions of the CNMI-only permit  program. The CNMI’s exemption from the visa caps expires at the end of  the transition period in 2013 or 2014, and the demand for U.S.  nonimmigrant worker visas has exceeded the capped supply in recent  years. Furthermore, there are no nonimmigrant visas available for workers  in continuous low-skill positions. In addition to superseding and replacing  all CNMI immigration laws, the pending legislation eliminates any other  CNMI laws that relate to the admission or removal of aliens, which could  include some CNMI labor laws. Fees for the CNMI-only work permit will  be determined by federal regulations and are not currently available.  However, the current fees for U.S. foreign worker permits that would  apply after the end of the transition period and after any extensions range  higher than the CNMI’s current permit fees for foreign workers. The  pending legislation also requires a fee to be paid during the transition  period by employers of nonimmigrant workers with CNMI-only permits to  provide technical assistance and vocational education in the CNMI.
subsections: section_title: Uncapped Nonimmigrant H Visas for Workers in the CNMI during the Transition Period Ending in 2013 or 2014
paragraphs: The pending legislation, in contrast to existing U.S. law, provides for H  nonimmigrant visas for temporary workers in the CNMI during the  transition period ending in 2013 or 2014. A qualified alien can seek  admission to the CNMI or Guam during the transition period as a  nonimmigrant temporary worker under the H visa process established in  the INA without counting against the existing numerical caps defined by  federal law. Visa holders are limited to working in the CNMI or Guam.  Spouses and minor children of H visa holders can accompany the principal  alien under federal law. The length of admission and other terms and  conditions for CNMI-only H nonimmigrants will be determined by DHS in  its implementation of the transition program and, according to DHS  officials, will adhere to federal requirements currently in place for H visa  holders. According to the current federal requirements, (1) specialty  workers who are admitted under H-1B visas may not be authorized to stay  any longer than 3 years initially, and up to 6 years with extensions, and  may not seek readmission for 1 year after leaving, and (2) foreign workers  admitted under H-2B visas are authorized to stay for up to 1 year initially,  and up to 3 years with extensions. Because the pending legislation  authorizes exemption from federal law’s numerical caps for H-1B and H-2B  visas during the initial transition period only, the caps would limit the  availability of new visas after the transition period ends on December 31,  2013, or on December 31, 2014. The numerical caps do not apply to foreign  workers’ spouses or children.
section_title: CNMI-Only Nonimmigrant Work Permits during the Transition Period and Possible Extensions
paragraphs: In addition to allowing uncapped H visas during the transition period, the  pending legislation establishes a temporary CNMI-only nonimmigrant  work permit during the transition period to be issued to prospective  employers for aliens not eligible for admission under the H visas or  otherwise under federal immigration law. Temporary workers with  CNMI-only permits are to be treated as nonimmigrants under the INA and,  like other nonimmigrants or applicants for immigrant status from outside  the United States, may apply for a change of status, either to another  nonimmigrant status or to permanent residency. Workers admitted under a  CNMI-only permit may transfer freely between CNMI employers, but they  may not enter or work in the rest of the United States.
Under the pending legislation, DHS determines the number, terms, and  conditions of CNMI-only permits needed to meet labor demands in the  CNMI and has full administration and enforcement authority over the  implementation process. DHS has the discretion to use any reasonable  method for implementing the permit system, provided that the department  attempts to promote the maximum use of workers authorized to be  employed in the United States and to prevent adverse effects of wages and  working conditions on such workers. DHS may also authorize the  admission of a spouse or minor child accompanying or following to join a  worker admitted under a CNMI-only permit.
The pending legislation specifies that the CNMI-only permits will not be  valid beyond the expiration date of the transition period and requires that  the number of permits allocated be reduced on an annual basis to zero by  the end of the transition period. However, the U.S. Secretary of Labor, in  consultation with DHS, DOI, and the Governor of the CNMI, has the  discretion to extend indefinitely the period for issuing the permits for up  to 5 years at a time, based on the labor needs of legitimate businesses in  the CNMI. The Secretary could issue the extension as early as desired  within the transition period and up to 180 days before the end of the  transition period or any extension thereof. The determination of what  constitutes a legitimate business, and the extent to which such business  requires foreign workers to supplement its workforce, is at the sole  discretion of DHS. In deciding whether to extend the period in which  CNMI-only nonimmigrant work permits may be issued, the Secretary of  Labor may consider workforce studies on the need for foreign workers in  the CNMI; the unemployment rate of U.S. citizen workers residing in the  CNMI; the number of unemployed foreign workers in the CNMI; and any  other available evidence regarding U.S., CNMI, and foreign worker trends  in the CNMI.
section_title: Temporary Work and Residence for CNMI- Government-Approved Foreign Workers Who Do Not Obtain U.S. Immigration Status
paragraphs: Under the pending legislation, foreign workers legally present in the CNMI  as of the transition program effective date but who do not obtain U.S.  immigration status may continue residing and working in the CNMI for a  limited time. Foreign workers who are legally present in the CNMI under  CNMI immigration laws on the transition period’s effective date are  temporarily protected from removal; they may not be immediately  removed from the country for violating the INA on the basis of being  present without having been admitted to the United States. A foreign  worker lawfully present under previous CNMI immigration laws but who  does not obtain U.S. immigration status becomes subject to removal 2  years after the effective date of the transition program or when the CNMI- issued permit expires, whichever is earlier. To track the presence of aliens  in the CNMI, the legislation allows DHS to require CNMI aliens to register  with DHS and subjects to removal anyone who fails to comply with the  registration requirement. The legislation also prohibits the CNMI  government from allowing an increase in the total number of foreign  workers who are present in the CNMI between the legislation’s enactment  and the effective date of the transition period. Since the 2-year clause  applies to all aliens lawfully present in the CNMI on the transition program  effective date, not just to foreign workers, it would cover family members  of the foreign workers to the extent of their previously authorized  admission.
section_title: Access to Permanent Employment-Based Immigrant Visas for Foreign Workers
paragraphs: Under the pending legislation, when federal immigration law becomes  applicable to the CNMI on the transition program effective date, CNMI  employers will be able to petition to bring workers to the CNMI as  employment-based permanent immigrants under the same procedures as  other U.S. employers. Each fiscal year, about 140,000 employment-based  immigrant visas are available for workers to enter the United States on a  permanent basis. Up to 28.6 percent of these visas may be available for  skilled nontemporary and nonseasonal workers, for professionals with  baccalaureate degrees, and for qualified workers capable of performing  unskilled nontemporary and nonseasonal labor for which qualified  workers are not available in the United States. For the unskilled laborers,  up to 10,000 visas may be issued each fiscal year to qualified immigrants  after the Department of Labor certifies that qualified workers are not  available in the United States.
According to a CNMI official, CNMI employers do not currently have the  option to petition for immigrant status of workers under CNMI law. While  U.S. lawful permanent residents may work in the CNMI, time spent in the  CNMI generally does not count toward the time in the United States  required to attain U.S. citizenship. According to DHS, residence in the  CNMI only counts as residence for naturalization purposes for immediate  relatives of U.S. citizens; other lawful permanent residents residing in the  CNMI currently do not accrue time for naturalization purposes.
section_title: Access to Foreign Workers after the End of the Transition Period and after Any Extensions
paragraphs: After the end of the transition period and after any extensions of the  CNMI-only work permit program, the pending legislation limits CNMI  employers’ access to foreign workers, particularly low-skill workers in  continuous, nontemporary jobs. However, all INA immigrant and  nonimmigrant categories would be available to qualified foreign workers  attempting to enter the CNMI. After the transition period and after any  extensions, the CNMI-only work permits can no longer be issued and are  no longer in effect. In addition, the exemptions from the H visa caps no  longer apply after the initial transition period ending in 2013 or 2014.  Foreign workers applying for H nonimmigrant status are then subject to  the numerical limitations set out in federal law, and demand for the H-1B  and H-2B visas has exceeded the capped supply in recent years. H-2A  visas are not capped and would be available for agricultural workers.  However, no nonimmigrant visa categories are available for workers  performing continuous, rather than temporary, work who do not meet the  high-skill requirements of the H-1 visas. Some workers can apply for L  visas for intracompany transfers, but these visas are available only to  managers and executives, workers with specialized skills, and their  spouses and children, and L visa holders must have spent at least 1  continuous year abroad with a qualifying organization prior to entering the  United States. These options contrast with the CNMI government’s current  authority to admit as many foreign workers as its own laws and  administrative procedures permit and with the CNMI-only work permit  that the pending legislation establishes during the transition period and  any extensions.
section_title: Changes in Worker Permit Fees during and after the Transition Period
paragraphs: The pending legislation changes permit fees for foreign workers and may  increase annual fees for some employers and workers. Fees for the  transition period programs will be determined by federal regulations and  are currently not available. The CNMI-only work permit fee includes $150  paid by employers annually to fund vocational education in the CNMI, but  we do not know how the full fee will compare to the current CNMI foreign  worker permit fee of $250 per year. In addition, after the end of the  transition period and after any extensions of the CNMI-only work permit  program, standard U.S. fees would apply, including Department of Labor  fees for labor certification, DHS petition fees paid by the employer, and  Department of State visa fees paid by the worker. The current fees for U.S.  foreign worker permits that would apply after the end of the transition  period and any extensions range higher than the CNMI’s current permit  fees for foreign workers. Existing U.S. fees for H visa petitions range from  $107 to $773 per year (see app. III). Required bond costs for employers  currently vary under CNMI law, but one option is for employers to pay $75  per worker into a revolving trust account. U.S. laws provide discretionary  federal authority to impose bonds of between $5 and $15 per worker on  employers or $500 on the alien. The legislation also authorizes DHS to  charge fees to recover the full cost of providing adjudication and  naturalization services, including any administrative costs. The U.S.-CNMI  covenant currently allows the CNMI government to collect fees levied for  quarantine, passport, and immigration and naturalization services. The  pending legislation would remove the CNMI’s ability to collect fees for  immigration and naturalization.
section_title: Possible Elimination of Some CNMI Labor Laws
paragraphs: Under the pending legislation, federal immigration law will supersede all  CNMI immigration law. In addition, federal law would preempt some  CNMI labor laws if the CNMI laws are determined to relate to the  admission or removal of aliens. Because the intent of the legislation is to  supersede all laws relating to the admission or removal of aliens, if local  labor laws relate to the admission or removal of aliens, such laws will no  longer be in effect. The CNMI’s Office of the Governor concluded that the  proposed federal legislation would preempt most of the CNMI laws  establishing new immigration and labor rules that took effect on January  1, 2008. For example, as referenced above, the CNMI’s bond requirement  would presumably be preempted by any bond requirements already  present in federal immigration law. Additionally, CNMI requirements to  pay repatriation funds for foreign workers would be preempted by federal  law requirements to pay repatriation funds for nonimmigrant workers. In  the agricultural sector, CNMI laws that apply to foreign agricultural  workers would be replaced by federal requirements for the admission and  treatment of H-2A workers or other relevant federal laws. Under federal  law, employers of temporary agricultural workers must provide housing  for the workers that meet certain federal requirements, insurance for the  workers that covers injury or disease related to employment, three meals a  day, and all necessary tools and equipment to perform the required labor.  CNMI law requires that employers provide medical insurance to foreign  workers and gives employers the option to provide additional benefits,  such as housing, food, and transportation.
Other CNMI laws that are administered as part of the CNMI’s permit  program also might be affected because the CNMI’s permit program will  be replaced with federal law, and it is unclear whether these CNMI  programs will continue to be administered. For example, a CNMI law  requiring notice and orientation procedures for nonresident workers  admitted to the CNMI, as well as laws requiring that employers of  nonresident workers provide mandatory medical insurance to their  employees and provide mediation procedures in the case of contract  disputes, have no counterpart in the pending federal legislation. It is  unknown whether these existing requirements would be administered  after federalization. In addition, existing CNMI agreements with China and  the Philippines regarding the treatment of those countries’ workers in the  CNMI could be affected by the pending legislation. After federal  immigration law applies, it is unclear whether the agreements would be  adhered to or would be superseded.
In addition, local CNMI law contains specific provisions for the hiring of  local residents, while the federal legislation contains no set requirements  for hiring a certain percentage of citizens. Under CNMI law, until January  2008, employers were required to hire 20 percent of their employees from  local residents; this percentage increased to 30 percent on January 1, 2008,  under the new CNMI labor and immigration law. CNMI law also stipulates  that employers seeking work permits for their temporary workers must be  able to demonstrate that they advertised the position and were unable to  find a qualified CNMI resident. Exemptions from this requirement can be  granted for businesses that employ fewer than 5 people, construction  projects of limited duration, light manufacturing, and for employers who  fill other full-time positions with substantially more than 30 percent of the  workforce from citizens and permanent residents. Under the federal  immigration system, no percentage requirement exists for the hiring of  local residents. However, federal immigration law requires that employers  seeking to fill jobs with applicants for H-2B visas must demonstrate that  they have been unable to identify a qualified U.S. worker for the position.  Similarly, employers of H-2A applicants must certify through the  Department of Labor that sufficient U.S. workers cannot be found to  perform the labor and that the employment of the foreign worker will not  adversely affect the wages and working conditions of similarly employed  U.S. workers. However, without regulations implementing the pending  legislation, it is unknown whether the CNMI-only work permit program  will include requirements related to U.S. workers.
section_title: Vocational Education Funding and Technical Assistance for the CNMI
paragraphs: The pending federal legislation requires the U.S. government to provide  funding for vocational education, as well as technical assistance for the  CNMI.
Vocational education. The legislation requires DHS to charge  prospective employers $150 annually, in addition to other fees collected  under the INA, for each CNMI nonimmigrant worker who is issued a  CNMI-only permit during the transition period and any extensions. The fee  is to be paid into the Treasury of the CNMI and used to fund ongoing  vocational, educational curricula and program development by CNMI  educational entities.
Technical assistance. The legislation requires the Secretary of the  Interior to provide technical assistance to the CNMI to promote economic  growth; to assist employers in recruiting, training, and hiring U.S. citizens  and lawful permanent residents in the CNMI; and to develop CNMI job  skills as needed. In providing the technical assistance, the federal  government should consult with the CNMI government, local businesses,  regional banks, and other CNMI economy experts. The CNMI must  contribute a nonfederal matching requirement of 10 percent for the  provision of technical assistance.
Hiring U.S. citizens in the CNMI. In addition to requiring the technical  assistance, the pending legislation states that the federal government  should, to the maximum extent practicable, hire citizens of the CNMI as  staff to implement the transition program and new federal responsibilities.
section_title: Pending Legislation Provisions for Tourists
paragraphs: The pending legislation establishes a joint visa waiver program by adding  the CNMI to an existing Guam visa waiver program. The program exempts  visitors from designated countries who travel for business or pleasure to  the CNMI from the standard federal visa documentation requirements.
Citizens of countries who do not qualify for entry under the joint CNMI  and Guam visa waiver program or other U.S. visa waiver programs may  apply for U.S. visitor visas valid for entry to any part of the United States,  which generally require in-person applications and higher fees than the  CNMI currently assesses. Changes in tourists’ access to the CNMI will  depend on the countries that are included in the CNMI-Guam visa waiver  program. Until the regulations implementing the joint visa waiver program  are established, we cannot determine whether the new visa waiver  program will be more or less restrictive than the current CNMI or Guam  waiver programs.
subsections: section_title: Visa Waiver Program for Tourism or Business
paragraphs: The pending federal legislation creates a joint visa waiver program for  business or pleasure for 45 days or less, exempting visitors from  participating countries who travel to the CNMI and Guam from the  standard federal visa documentation requirements for nonimmigrants.  Under the pending legislation, DHS may waive the documentation  requirements for nationals from designated foreign countries applying to  visit for business or pleasure for a period of up to 45 days. Admission  would be granted only for entry into, and stay in, the CNMI or Guam, and  visitors will be able to travel between the CNMI and Guam. The pending  legislation allows DHS to waive the documentation requirements after  consulting with other federal agencies and the Governors of the CNMI and  Guam; determining that an adequate arrival and departure system has  been developed in both places; and determining that the waiver would not  represent a threat to the welfare, safety, or security of the United States or  its territories.
Apart from the CNMI-Guam visa waiver program proposed under the  federal legislation, the U.S. Visa Waiver Program, the current Guam visa  waiver program, and the current CNMI entry permit waiver program have  the following requirements:    The current U.S. Visa Waiver Program under federal immigration law  allows nationals and citizens of 27 countries to travel to the United States,  including Guam, for business or tourism for 90 days or less without  obtaining a visa. Travelers admitted under the U.S. Visa Waiver Program  must be nationals of a participating country, each of which must provide  reciprocal privileges to U.S. nationals and citizens and meet other  requirements.
Guam’s federally-administered visa waiver program allows citizens of an  additional 9 countries to enter Guam for up to 15 days for business or  pleasure. In total, citizens of 36 countries may enter Guam under its visa  waiver program.
The CNMI’s entry permit waiver program exempts aliens seeking to enter  for tourism or business for up to 90 days from the required visitor entry  permit if the aliens are eligible for the U.S. Visa Waiver Program or are  nationals of a country listed by the CNMI as exempt. The list of countries  is revised periodically by the CNMI Attorney General and contains all the  countries in the U.S. Visa Waiver Program.
See appendix IV for countries included in the current U.S., CNMI, and  Guam waiver programs.
To implement the CNMI-Guam visa waiver program, DHS must consult  with other appropriate federal agencies and promulgate regulations within  180 days of enactment of the proposed legislation. The regulations must  include a list of all countries whose nationals may obtain the visa waiver.  This list must include any country from which the CNMI has received a  significant economic benefit for the year prior to the enactment of the  legislation, unless DHS determines that the country’s inclusion on the list  would represent a threat to the welfare, safety, or security of the United  States or its territories. The Governors of the CNMI and Guam may  petition DHS to have countries added to the visa waiver program list. The  regulations must also include any bonding requirements for nationals of  some or all of the countries who may present an increased risk of  overstays or other potential problems, if those requirements are different  from those generally applicable to nonimmigrants under the INA. DHS is  required to monitor the admission of nonimmigrant visitors to the CNMI  and Guam and has the authority to suspend a particular country from the  visa waiver program.
DHS’s consideration of countries from which the CNMI has received a  significant economic benefit for the previous year could result in the  inclusion in the visa waiver program of key countries that have sent  tourists to the CNMI. However, without the regulations implementing the  CNMI-Guam visa waiver program, we cannot determine whether this  program will be more or less restrictive than the current CNMI entry  permit waiver program or the Guam visa waiver program, nor can we  determine which countries’ citizens would be required to obtain visitor  visas. In addition, any changes to the U.S. Visa Waiver Program could also  affect tourists’ access to the CNMI.
section_title: Visitor Visas Available outside the Visa Waiver Programs
paragraphs: Under the pending legislation, citizens of countries who do not qualify for  entry under the proposed CNMI-Guam visa waiver program may apply for  a nonimmigrant visitor visa for either business or pleasure, known as a B  visa. B visas are valid for entry into any part of the United States. The  period of validity for B visas depends on federal regulations specific to the  applicant’s home country, as well as the reciprocal treatment that the  home country provides to U.S. citizens traveling to that country. The  validity period for B visas varies. Aliens may apply for admission at any  time during the validity period to be admitted for up to 1 year and are  typically admitted for 6 months at a time. Under the U.S. program, most  visitor visa applicants must apply in person at a U.S. embassy or consulate.  In addition, applicants for all nonimmigrant visas may be required to  submit to a physical or mental examination at the discretion of the  consular officer reviewing the application.
The CNMI has its own visitor entry permit process, which currently allows  noncitizens not eligible under its entry permit waiver program to apply for  a short-term entry permit valid for 30 days or a long-term entry permit  valid for up to 60 days. Most visitors coming to the CNMI for business or  pleasure with a visitor entry permit must have a CNMI sponsor, such as an  individual or a hotel, which is not required of visitors entering the United  States on a B visa. In addition, Japanese, Korean, and certain other tourists  ages 55 and above may enter for up to 90 days under a comity entry  permit. Currently, citizens of 31 countries are excluded from entering the  CNMI, but they can be granted waivers on a case-by-case basis. This  program would be eliminated by the pending legislation, and visitors  seeking to enter the CNMI for business or pleasure could apply for a U.S.  nonimmigrant B visa or could enter under the CNMI-Guam visa waiver  program established by the legislation, if applicable.
Given the requirements for U.S. visitor visas, and depending on the  countries included in the CNMI-Guam visa waiver program, the pending  legislation could change access to the CNMI for visitors from some  countries. For example, some tourists currently come to the CNMI from  China and Russia. Tourists’ access to the CNMI would depend, in part, on  whether their countries were included in the CNMI-Guam visa waiver  program under the pending legislation. While China and Russia are not  currently included in the CNMI’s entry permit waiver program, the CNMI  allows applicants from these and other countries to apply for a visitor  entry permit by mail or fax. In addition, according to the CNMI  government, information on visitor permit applicants from China is  collected and reviewed by the CNMI under the Electronic Visitor Entry  Permit Program. Most applicants would now be required to apply in  person at a U.S. embassy or consulate, some of which have interview  appointment wait times of 30 days or longer. They also would pay at least  $131 for a U.S. visitor visa, while most CNMI visitor entry permits are  provided for free.  In addition, visitors from the Republic of Korea who are  ages 55 and above and meet other requirements currently may enter the  CNMI for up to 90 days under a comity entry permit.  The Republic of  Korea is not currently included in the U.S. Visa Waiver Program, and  citizens’ access to the CNMI will depend in part on whether the country is  included in the joint CNMI-Guam waiver program.
section_title: Pending Legislation Provisions for Foreign Investors
paragraphs: After federal immigration law applies, new CNMI foreign investors must  meet more stringent investment requirements in order to obtain immigrant  investor status, which allows investors to petition for U.S. permanent  immigration status that is currently unavailable in the CNMI. New foreign  investors also could apply for nonimmigrant treaty investor status. The  pending legislation also allows current CNMI foreign investors who meet  certain requirements to convert from a CNMI investor to a federal  nonimmigrant treaty investor during the transition period. However, key  details regarding the transition period program remain unknown. In  addition, the pending legislation eliminates the CNMI’s retiree investor and  long-term business entry permit programs. Instead, it allows these and  other business travelers to apply to visit the CNMI under the terms for  general visitors described above or under other categories in federal  immigration law.
subsections: section_title: More Stringent Investment Requirements for Immigrant Foreign Investors
paragraphs: After federal immigration laws apply, new foreign investors in the CNMI  would have to meet the more stringent investment requirements imposed  by federal law in order to be awarded immigrant investor status (EB-5).  Under federal immigration law, foreign investor immigrant status generally  requires the establishment of a business creating at least 10 full-time jobs  and an investment of at least $1 million. However, U.S. investment  requirements vary depending on the employment level in the area of  investment; if the CNMI were considered a targeted employment area, the  minimum investment required would be $500,000. According to DHS,  qualification under the EB-5 program provides U.S. lawful permanent  resident status after a 2-year period of conditional status and after  demonstration of the required job creation.
In contrast, current CNMI law grants foreign investor status to qualified  investors to engage in business in the CNMI for as long as they maintain an  investment of at least $250,000 by an individual in a single investment or  $100,000 per person in an aggregate investment exceeding $2 million. An  applicant must be present in the CNMI to apply. The CNMI also considers  the length of time the business is expected to operate, the number and  type of jobs it would create, the extent to which it would employ  nonresidents, its impact on power and water resources, and other factors.  While the CNMI status requires a lower investment than the U.S. EB-5  program, it does not allow aliens to petition for permanent immigration  status in the United States, as does the EB-5.
The U.S. immigrant investor petition has a fee of $1,435, plus a $131 visa  application fee, and visa issuance fees that vary by country. The CNMI  long-term business entry permit fee is $1,000, and the permit is valid for 2  years. The CNMI investor permit has a one-time fee ranging from $500 to  $2,500, in addition to a one-time investment certificate fee of $10,000. (See  app. III.)
As an alternative to applying for U.S. immigrant investor status, new  investors could apply for U.S. nonimmigrant treaty investor status (E-2).  Under this status, an alien may enter the United States to develop and  direct the operations of an enterprise in which he or she has invested or is  in the process of investing a substantial amount of capital. This category  requires that the investor be a national of a country that has an  appropriate treaty with the United States. Though a specific financial  threshold is not required by law, the capital must be substantial in relation  to either the total purchase price or the cost of creation of the enterprise,  must be sufficient to ensure the investor’s financial commitment to  successful operation of the enterprise, and must be of a magnitude to  support the likelihood that the investor will successfully develop and  direct the enterprise. However, this status does not provide a path to  apply for permanent resident status.
section_title: Grandfathered Status for Foreign Investors during the Transition Period
paragraphs: The pending legislation allows current CNMI foreign investors to remain in  the CNMI as investors after the start of the transition period by authorizing  DHS to provide CNMI-only nonimmigrant E-2 treaty investor status to  those who have been admitted to the CNMI in long-term investor status  under CNMI immigration laws before the start of the transition program.  These “grandfathered” foreign investors attaining CNMI-only  nonimmigrant status would not have to meet the federal treaty  requirements for E-2 nonimmigrant foreign investor status during the  transition period. In order to be grandfathered, the investor must have  continuously maintained residence in the CNMI under long-term investor  status, must be otherwise admissible, and must maintain the investment  that formed the basis for such long-term investor status. It is not clear  whether the grandfathered status would cover current holders of the  CNMI’s long-term business permit, which requires an investment of at  least $150,000 in a public organization or at least $250,000 in a private  investment, in addition to current holders of the CNMI foreign investment  permit. The legislation is silent on the length of time for which admission  is authorized as a CNMI-only treaty investor, and it requires DHS to  promulgate implementing regulations 60 days before the start of the  transition program. Currently, federal law allows E admission for up to a  2-year period of initial stay and allows the investor to apply for renewal.  Under federal regulations for E-2 visas, spouses or children may apply to  join foreign investors under the E-2 visa, and spouses are authorized to  work under an E-2 visa. Though regulations must first be developed for  implementation, according to DHS, the regulations would likely create a  new kind of E-2 visa applicable only to these grandfathered foreign  investors that would include the CNMI financial threshold requirements  for investment.
section_title: Elimination of CNMI Retiree Investor and Long- Term Business Permit Programs
paragraphs: Two other CNMI investor programs would be eliminated by the pending  legislation. One of these programs is the CNMI’s current retiree investor  entry permit, which has no equivalent under U.S. law. To qualify for the  permit and corresponding certificate, an applicant must be older than 55  years and must have a minimum investment of $100,000 (or $75,000 on the  islands of Tinian or Rota) in residential property, among other  requirements. In addition, the CNMI’s long-term business entry permit,  which allows individuals investing at least $150,000 in a public  organization or at least $250,000 in a private investment and whose  business activities have been approved and certified by the CNMI  Secretary of Commerce to enter and exit the CNMI for 2 years, would be  eliminated by the application of federal immigration laws. Nonimmigrant  investors would instead be able to apply for the U.S. E-2 treaty investor  visa. As noted above, it is not clear whether current holders of the  CNMI’s long-term business permit would be grandfathered as treaty  investors. In addition, under federal law, other business travelers could no  longer enter under any CNMI permit category but could seek admission  under an appropriate federal nonimmigrant visa or visa waiver.
section_title: DHS May Study the Creation of CNMI-Only Visas for Foreign Investors and Other Nonworkers
paragraphs: The pending federal legislation allows the Governors of the CNMI and  Guam to request that DHS study the feasibility of creating additional  CNMI- or Guam-only nonimmigrant visas to address needs not otherwise  met by the legislation. These visas may include special nonimmigrant visa  categories for investors and retirees. The visas also may include visa  categories for students; however, they may not include nonimmigrant  status for workers in the CNMI or Guam. If DHS found that such additional  visas were necessary, it would have to ask Congress to authorize their  creation.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to officials within the U.S. Departments  of Homeland Security, the Interior, and Labor and within the CNMI  government for review and comment. We received written comments on  the draft report from the Department of Homeland Security, the  Department of the Interior, and the CNMI government, which are reprinted  in appendixes VI, VII, and VIII. We also received technical comments from  the Department of Homeland Security, the Department of the Interior, and  the CNMI government. We incorporated their comments as appropriate.  The Department of Labor had no comments. We also provided a draft for  technical review to the U.S. Department of State, and State had no  comments. The Departments of Homeland Security and the Interior  generally agreed with our findings regarding the pending legislation. The  CNMI government disagreed with some key findings related to the pending  legislation.
The Department of Homeland Security commented that aliens in the CNMI  could seek protection from persecution or torture, saying that the  department is mindful of U.S. government treaty obligations during the  transition period. While we had included information on this topic in the  draft report, we further clarified the information in response to the  department’s comments. The department also noted that the pending  legislation would have direct effects on U.S. Customs and Border  Protection facilities, staffing, and training requirements. This topic was  beyond the scope of our study.
The Department of the Interior generally agreed with our findings, saying  that the report presents a fair and objective study on the effect of the  pending legislation.
The CNMI government disagreed with our analysis of the legislation in  three particular areas. First, the CNMI government contended that the  legislation allows the exemptions from the numerical limitation on H visas  to be extended beyond the end of the transition period in 2013. We  continue to interpret the legislation to allow for an extension of the CNMI- only work permit program beyond 2013 at the discretion of the Secretary  of Labor but not to allow for an extension beyond 2013 of other provisions  of the transition program, including the exemptions from the numerical  limitations on H visas. Because the provision of the pending legislation  authorizing exemptions from the H visa caps for aliens entering the CNMI  confers no specific authority for extending this exemption beyond 2013,  nor does any other related provision confer this authority, the exemption  could not be extended beyond 2013 without further legislation. Second,  the CNMI disagreed with our interpretation that the H visas issued under  the cap exemptions are a separate process from the CNMI-only work  permit program. According to the CNMI’s interpretation, employers of  workers admitted under H visas would have to obtain a CNMI-only work  permit. We continue to interpret the H visa cap exemptions and the CNMI- only permit program as separate processes, because the CNMI-only work  permits are to be issued for workers who would not otherwise be eligible  for admission under U.S. immigration law. As H visas are clearly a part of  U.S. immigration law, workers entering the CNMI with an H visa are  necessarily excluded from the CNMI-only permit process, as are workers  entering under all other available immigrant and nonimmigrant categories  in U.S. immigration law. Third, the CNMI contended that we should not  base any further work regarding the impact of the legislation on the CNMI  economy on a single legal interpretation. While the legislation is highly  technical, we believe we have provided a reasonable, objective  interpretation of the legislation that is consistent with the implementing  agencies’ views. As such, we believe our interpretation of the legislation  can be used appropriately as the basis of further work on the potential  economic impact of the legislation, while acknowledging the range of  possible federal decisions regarding implementation of the legislation.  Officials from the Department of Homeland Security, the agency  responsible for implementing and administering the provisions of the  transition period under the pending legislation, agreed in interviews with  our interpretations of the above provisions. The CNMI government also  recommended that the draft report be provided to the U.S. Department of  Justice for comment. We did not provide the draft report to the  Department of Justice for review because the pending legislation provides  a limited role for the department.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution of it until 30 days from  the report date. We will then provide copies of this report to the U.S.  Secretaries of Homeland Security, the Interior, Labor, and State, and to the  Governor of the CNMI. We will make copies available to others on request.  In addition, the report will be available at no charge on the GAO Web site  at http://www.gao.gov.
If you or your staffs have questions about this report, please contact me at  (202) 512-3149 or at gootnickd@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made key contributions to this report are  listed in appendix IX.
section_title: Appendix I: Scope and Methodology
paragraphs: To complete our work, we reviewed current immigration laws of the  Commonwealth of the Northern Mariana Islands (CNMI), U.S. immigration  law, and pending legislation that would apply U.S. immigration law to the  CNMI. To examine CNMI immigration law, we reviewed relevant portions  of the Nonresident Workers Act, the Northern Mariana Islands  Administrative Code, the Commonwealth Employment Act of 2007, and  related regulations, as well as other immigration and labor laws and  agreements. We did not review all CNMI laws and regulations. Our  discussion of CNMI laws and regulations was based in part upon  secondary sources, including information provided by CNMI officials. We  also visited the CNMI, where we interviewed officials in the CNMI Office  of the Governor, the Department of Immigration, the Department of Labor,  the Department of Commerce, and the Marianas Visitors Authority. We  conducted additional interviews with CNMI officials in Washington, D.C.  In addition, we reviewed CNMI agreements with other countries, including  China and the Philippines, regarding foreign workers. We also reviewed  CNMI documents explaining immigration laws and procedures to non-U.S.  citizens.
To examine U.S. immigration law, we reviewed the U.S. Immigration and  Nationality Act (INA) and related regulations. We also interviewed U.S.  Department of Homeland Security officials, and we reviewed information  from the U.S. Department of State and U.S. Citizenship and Immigration  Services related to visa and petition application fees and procedures. We  did not review the extent to which CNMI or U.S. laws were properly  enforced or implemented.
To examine the relationship between the CNMI and the United States, we  reviewed the CNMI-U.S. Covenant and the law applying U.S. minimum  wage to the CNMI. We also reviewed proposed legislation applying U.S.  immigration law to the CNMI, including H.R. 3079, passed by the House of  Representatives, and S. 2739, pending in the Senate. In addition, we  reviewed the House Committee on Natural Resources Report for H.R.  3079. We interviewed officials from the U.S. Department of Homeland  Security and the U.S. Department of the Interior. We also reviewed  analyses of the pending legislation and related studies by GAO, the  Congressional Budget Office, and the Congressional Research Service.
We conducted this performance audit from December 2007 to March 2008  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: U.S. Nonimmigrant Classes of Admission
paragraphs: Aliens in continuous and immediate transit through the United States  Aliens in transit to the United Nations Headquarters District  Foreign government officials, attendants, servants, and personal employees, and spouses and children in transit  Visa Waiver Program—temporary visitors for business to Guam   Visa Waiver Program—temporary visitors for business  Visa Waiver Program—temporary visitors for pleasure to Guam  Visa Waiver Program—temporary visitors for pleasure  Temporary workers with “specialty occupation”
section_title: Appendix III: U.S. and CNMI Fees for Foreign Workers, Tourists, and Foreign Investors
subsections: section_title: Specialty workers (H-1B): $320 to $2,320 for petition (range includes supplemental fees of $750 or $1,500 and fraud prevention fee of $500 required for some petitions); associated visa typically valid for up to 3 years
section_title: Appendix IV: Country Participation in Current Waiver Programs in the United States, the CNMI, and Guam
paragraphs: CNMI entry permit  waiver programNo (limited for  shipping)
No (police clearance)
section_title: Appendix V: Northern Mariana Islands Immigration, Security, and Labor Act (H.R. 3079)
paragraphs: Appendix V: Northern Mariana Islands  Immigration, Security, and Labor Act (H.R.  3079)
subsections: section_title: GAO Comments
paragraphs: 1.  The CNMI government contended that the legislation allows the  exemptions from the numerical limitation on H visas to be extended  beyond the end of the transition period in 2013. We continue to  interpret the legislation to allow for an extension of the CNMI-only  work permit program beyond 2013 at the discretion of the Secretary of  Labor, but not to allow for an extension beyond 2013 of other  provisions of the transition program, including the exemptions from  the numerical limitations on H visas. As shown in appendix V,  subsection 6(a)(2) of H.R. 3079 establishes a transition period  “beginning on the transition program effective date and ending on  December 31, 2013, except as provided in subsections (b) and (d).”  Subsection 6(b) authorizes aliens to enter the CNMI with H visas  without counting against the numerical caps established by law for H  visas but confers no specific authority for extending this exemption  beyond 2013. Subsection 6(d) authorizes CNMI-only work permits to  be issued to employers for nonimmigrant workers who are not  otherwise admissible under federal law. Subsection 6(d)(5) allows the  Secretary of Labor to ascertain the labor needs of the CNMI and  “determine whether an extension of up to 5 years of the provisions of  this subsection is necessary to ensure an adequate number of workers”  are available in the CNMI. The “provisions of this subsection” refers  only to the provisions of subsection 6(d), the authorization for the  CNMI-only work permit, and not to other programs available during  the transition period. As the exemption from the numerical limitation  on H visas is contained in subsection 6(b), the exemption could not be  extended beyond 2013 without further legislation. Officials from the  Department of Homeland Security, the agency responsible for  implementing and administering the provisions of the transition period  under the pending legislation, agreed in interviews with our  interpretations of these provisions. The Department of Labor, which  will have the authority to extend the CNMI-only work permit beyond  2013, reviewed the draft report and provided no comments. The  Department of the Interior generally agreed with our findings.  2.  The CNMI government relied in part on legislative history to support  its assertion that the H cap extensions can be extended past 2013. We  reviewed the House Report on which the CNMI relied and found  nothing inconsistent with our interpretation as stated in this report.  3.  The CNMI government disagreed with our interpretation that the H  visas authorized in subsection 6(b) are a separate process from the  CNMI-only work permits authorized in subsection 6(d). According to  the CNMI’s interpretation, employers of workers admitted under H  visas would have to obtain a CNMI-only work permit. However, the  legislation does not state that H visas are to be provided under the  CNMI-only permit work program. Also, subsection 6(d)(2) states that  CNMI-only work permits are to be issued for workers “who would not  otherwise be eligible for admission under the Immigration and  Nationality Act (8 U.S.C. § 1101 et seq.).” The CNMI’s contention that  foreign workers who enter the CNMI with an H visa must also obtain  the CNMI-only work permit directly conflicts with the language of the  legislation. As H visas are clearly a part of the Immigration and  Nationality Act, workers entering the CNMI with an H visa are  necessarily excluded from the CNMI-only permit process. Presumably,  the federally-administered permitting process for employers of H visa  holders that is already in place in the United States would apply to H  visa holders in the CNMI once federalization occurs, though the  specifics of implementation will be at the discretion of the Department  of Homeland Security. Officials from the Department of Homeland  Security, which has responsibility for implementing the legislation,  agreed in interviews with our interpretation of this provision. The  Department of the Interior generally agreed with our findings.  4.  The CNMI incorrectly stated that “the GAO draft report concludes also  that all such H visas granted during the period up to December 31,  2013, must terminate no later than that date.” While the caps would  limit the availability of new H visas for CNMI workers after the  transition period ends on December 31, 2013 or on December 31, 2014,  we note that the length of admission and other terms and conditions  for CNMI-only H nonimmigrants will be determined by DHS in its  implementation of the transition program and, according to DHS  officials, will adhere to federal requirements currently in place for H  visa holders the federal requirements. According to the current federal  requirements, (1) specialty workers who are admitted under H-1B  visas may not be authorized to stay any longer than 3 years initially,  and up to 6 years with extensions, and may not seek readmission for 1  year after leaving, and (2) foreign workers admitted under H-2B visas  are authorized to stay for up to 1 year initially, and up to 3 years with  extensions.  5.  The CNMI government contended that we should not base any further  work regarding the impact of the legislation on the CNMI economy on  a single legal interpretation. While the legislation is highly technical,  we believe we have provided a reasonable, objective interpretation of  the legislation that is consistent with the implementing agencies’  views. Officials from the Department of Homeland Security, the  primary implementing agency for the legislation, agreed in interviews  with our interpretation of this legislation. The Department of Labor,  the agency with the ability to extend the CNMI-only work permit  program, reviewed the draft report and provided no comments. As  such, we believe our interpretation of the legislation can be used  appropriately as the basis of further work on the potential economic  impact of the legislation. However, we agree such work should  acknowledge the range of possible federal decisions regarding  implementation of the legislation and regarding any extensions of the  CNMI-only permit program.  6.  The CNMI government suggested that we include the text of the  pending legislation in this report. We have included the text of H.R.  3079, passed by the House, in appendix V.  7.  The CNMI government also recommended that the draft report be  provided to the U.S. Department of Justice for comment. We did not  provide the draft report to the Department of Justice for review  because the pending legislation provides a limited role for the  department.
section_title: Appendix VII: Comments from the U.S. Department of Homeland Security
section_title: Appendix VIII: Comments from the U.S. Department of the Interior
section_title: Appendix IX: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Emil Friberg, Assistant Director;  Mark Speight, Assistant General Counsel; Marissa Jones, Analyst-in- Charge; Ashley Alley, Senior Attorney; and Reid Lowe, Senior  Communications Analyst, made key contributions to this report. Diana  Blumenfeld, Ben Bolitzer, Ming Chen, and Eddie Uyekawa also  contributed to the report. Technical assistance was provided by George  Taylor.