Acting under this authority,  Congress enacted CNRA in 2008 to apply federal immigration laws to the  CNMI; in November 2009, the U.S. government began its application of  immigration laws to the CNMI. CNRA required that the Secretary of Homeland Security  establish a transitional work permit program for foreign workers in the  CNMI during the initial 5-year transition period. DOL. CNMI Transitional Work Permit Program Has Been Established, and Federal Decisions Affecting Future Access to Foreign Workers Are Pending

		DHS Issued Final Rule to Implement Transitional Work Permit Program That Addresses Key CNRA Requirements

On September 7, 2011, DHS issued a final rule to implement a CNMI  transitional work permit program, as required by CNRA, for foreign  workers who would not otherwise be admissible under federal law. As of July 2012, USCIS had  requested additional evidence for 3,200 petitions, or more than half of  the CW-1 petitions submitted in fiscal year 2012. Agency Decisions on Fiscal Year 2013 Permit Allocation and Any Extension of Transition Period Are Pending

DHS officials stated that they are working to determine the permit  allocation for fiscal year 2013 and will announce the allocation in the  Federal Register by October 1, 2012. DOL officials told us that, as of July 2012, the department had not  decided whether or when it will extend the transition period. Officials said  the department does not expect to announce a decision before the end of  2012 and pointed out that DOL is not required by CNRA to make its  determination until July 5, 2014. DHS Has One Data Source for Pending Decision but Has Not Made Public Its Methodology, while DOL Has Identified Multiple Data Sources and Methodology

DHS has identified a single source of CNMI workforce data that it intends  to use for its annual allocation of transitional work permits and has not  made public the types of information, such as its methodology, that it will  publish with future permit allocations. In contrast, DOL  has identified multiple sources of data on the CNMI labor market and  plans to conduct a number of analyses of these data in making its  determination of whether and when to extend the transition period. However, the source does not provide numbers of U.S.  and foreign workers by industry, which could help DHS predict future  demand for foreign workers. DOL plans to estimate changes in employment and in the GDP in  each CNMI industry sector that might result from a reduction in the  number of foreign workers. Specifically, members said that  uncertainty has caused them to limit their plans for future investments. Federal Agencies Have Provided Funds for CNMI Worker Training, and Some Information Is Available on DOL and DOI Efforts

		DOL, DOI, and DHS Have Funded CNMI Worker Training Programs with Varying Reporting Requirements

DOL, DOI, and DHS have made available a combined total of about $6.5  million for worker training in the CNMI in fiscal years 2010 through 2012  (see table 2). According to a senior DHS official, DHS will continue to collect and  transfer these funds to the CNMI Treasury until the end of the  transition period. DOL. According to DOL officials, information on the performance of this  grant is available to Congress on request. DHS. Making this information available could help allay CNMI  businesses’ uncertainty regarding the unknown impact of DHS’s pending  decision on their future access to foreign workers and help mitigate the  effect of such uncertainty on CNMI businesses’ investment plans. Recommendations for Executive Action

We recommend that the Secretary of Homeland Security take the  following two actions:   1.  to help ensure that CNMI’s businesses are better able to plan for  future permit allocations, provide, when publishing DHS’s annual  permit allocation, the methodology it used and the factors it  considered to determine the number of permits allocated; and  2.  to help ensure that DHS has the information it needs to assess the  needs of the CNMI workforce as it decides on future permit  allocations, use Department of Labor analyses of economic data  on the labor needs of the CNMI as a factor in deciding on future  permit allocations. To provide the status of federal efforts to support worker training in the  CNMI, we obtained information on the Department of Labor’s (DOL)  Workforce Investment Act (WIA) grant, such as the grant’s terms and  conditions, performance and financial reports, and notice of obligations;  the Department of Interior (DOI) technical assistance grant that provides  funding for worker training programs, such as grant terms and conditions,  the most recent performance report submitted for the grant, and federal  award amounts; and DHS information on the amount of funds DHS had  collected from its transitional work permit program transferred to the  CNMI Treasury to support CNMI vocational curricula and program  development. 1101 (a)(17)), to apply to the Commonwealth of the Northern  Mariana Islands (referred to in this subtitle as the  “Commonwealth”), with special provisions to allow for—  A.  the orderly phasing-out of the nonresident contract  worker program of the Commonwealth; and  B.  the orderly phasing-in of Federal responsibilities over  immigration in the Commonwealth; and  2.  to minimize, to the greatest extent practicable, potential  adverse economic and fiscal effects of phasing-out the  Commonwealth's nonresident contract worker program and to  maximize the Commonwealth's potential for future economic  and business growth by—  A.  encouraging diversification and growth of the economy of  the Commonwealth in accordance with fundamental values  underlying Federal immigration policy;  B.  recognizing local self-government, as provided for in the  Covenant To Establish a Commonwealth of the Northern  Mariana Islands in Political Union With the United States of  America through consultation with the Governor of the  Commonwealth;  C.  assisting the Commonwealth in achieving a  progressively higher standard of living for citizens of  the Commonwealth through the provision of technical  and other assistance;  D.  providing opportunities for individuals authorized to  work in the United States, including citizens of the  freely associated states; and  E.  providing a mechanism for the continued use of alien  workers, to the extent those workers continue to be  necessary to supplement the Commonwealth's resident  workforce, and to protect those workers from the  potential for abuse and exploitation.
Why GAO Did This Study

In November 2009, the United States applied U.S. immigration law to the CNMI, as required by CNRA. To minimize the potential for adverse effects on the CNMI economy, CNRA established a 5-year transition period scheduled to end in 2014. CNRA required DHS to establish a transitional work permit program for foreign workers in the CNMI and annually reduce the number of permits issued, reducing them to zero by the end of the transition period. CNRA also required DOL to determine whether to extend the transition period past 2014, based on an assessment of the CNMI's labor needs. CNRA further required GAO to report on the implementation and economic impact of federal immigration law in the CNMI. This report (1) assesses the status of federal implementation of the transitional work permit program, (2) examines economic implications for the CNMI of pending federal actions, and (3) provides the status of federal efforts to support worker training in the CNMI. GAO reviewed CNRA, U.S. regulations, and information from federal agencies and the CNMI government; and interviewed U.S. government officials and private sector representatives.

What GAO Found

On September 7, 2011, the Department of Homeland Security (DHS) issued a final rule establishing a transitional work permit program in the Commonwealth of the Northern Mariana Islands (CNMI) for foreign workers not otherwise admissible under federal law. The final rule addressed key requirements of the Consolidated Natural Resources Act of 2008 (CNRA); for example, the rule sets the permit allocations for fiscal years 2011 and 2012. As of July 2012, DHS had processed about half of the petitions for work permits that employers submitted in fiscal year 2012. The DHS decision on its permit allocation for fiscal year 2013 and a Department of Labor (DOL) decision on whether and when to extend the transition period, both required by CNRA, are both pending.
DHS plans to announce the permit allocation for fiscal year 2013 by the end of September 2012. DHS has identified one source of CNMI workforce data that it intends to use for its annual work permit allocations. However, the data source does not provide numbers of U.S. and foreign workers by industry, which could help DHS predict future demand for foreign workers. According to a senior DHS official, DHS has not made public the types of information, including its methodology, that it will publish with future permit allocations. Knowledge of DHS's methodology could help allay any public uncertainty regarding future access to foreign workers in the CNMI.
DOL has not determined whether to extend the transition period, according to DOL officials, and is not required to do so until July 2014. DOL has identified multiple sources of data on the CNMI labor market, including a source that provides the number of workers in the CNMI by citizenship and industry. DOL has also identified the methodology it plans to use in making its determination. According to DOL officials, DOL plans to estimate changes in CNMI employment and gross domestic product that might result from a reduction in foreign workers. These data sources and analyses could help DHS assess workforce needs and determine its annual permit allocation.
Uncertainty about the impact of the pending DHS and DOL decisions on access to foreign workers may be limiting business investment in the CNMI. Foreign workers made up more than half of the CNMI workforce in 2012, and CNMI businesses reported challenges in finding replacements for foreign workers. Some CNMI businesses indicated that uncertainty over pending federal actions has caused them to limit their plans for future investments in the CNMI.
DOL, the Department of the Interior (DOI), and DHS made available a combined total of about $6.5 million to train workers in the CNMI in fiscal years 2010 through 2012. DOL provided annual grants that support worker services. DOI provided a grant in 2011 to support on-the-job training programs, in response to CNRA requirements. As of July 2012, DHS had transferred to the CNMI Treasury about $1.8 million it had collected through its permit program for CNMI vocational educational curricula and program development, as required by CNRA. Information on the use of DOL and DOI grants is available to Congress on request, but DHS does not collect information on the use of funds it transfers to the CNMI Treasury.

What GAO Recommends

GAO recommends that the Secretary of Homeland Security (1) provide, on publication of its permit allocations, the methodology used and (2) use DOL analyses as a factor in deciding future permit allocations. DHS agreed to publish its methodology but will wait to review DOL analyses until they are available before deciding to use them.