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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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” CNMI entry permit waiver programNo (limited for shipping) No (police clearance) Appendix V: Northern Mariana Islands Immigration, Security, and Labor Act (H.R. 3079) 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. 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.

Summary: 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. 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.