Application of Federal Immigration Laws to the CNMI

The Consolidated Natural Resources Act of 2008 amended the U.S.– CNMI covenant to apply federal immigration law to the CNMI after a  transition period. Under the program, foreign workers are able to obtain, through  their employers, nonimmigrant CW-1 status that allows them to work in  the CNMI for up to a year. The Consolidated Natural Resources Act of 2008 requires DHS to  annually reduce the number of CW-1 permits until the number reaches  zero by the end of the transition period. The act was amended in  December 2014 to extend the transition period through December 31,  2019. The act was further amended in August 2017 to, among other  things, (1) add 350 CW-1 permits to the fiscal year 2017 cap; (2) restrict  future permits for workers in construction and extraction occupations;  and (3) increase the CNMI education funding fee that employers must  pay for each permit from $150 to $200. Proposed Legislative Changes Affecting the CW Program

The proposed bill, the Northern Mariana Islands U.S. Figure 1 shows the past and future numerical limits on CNMI-Only  Transitional Worker permits established by DHS and the proposed  numerical limits for permits under S. 2325. Recent Trends in the the CNMI Economy

The CNMI’s inflation-adjusted gross domestic product (GDP) has grown  each year since 2012. The U.S. Department of Commerce’s Bureau of  Economic Analysis (BEA) estimates that the CNMI’s GDP increased by  almost 29 percent in 2016 after increasing by about 4 percent in 2015. Of the nearly 30,000 employed workers in the CNMI  in 2016, more than half were foreign workers, according to CNMI tax  data. In fiscal years 2012 through 2016, the number of CW-1 permits  almost doubled, and since fiscal year 2016, the number of permits has  approached the numerical limits on permits for those years. Characteristics of Foreign Workers with CW-1 Permits

Our preliminary analysis of USCIS CW-1 permit data for fiscal years 2012  through 2018 identified trends in CW-1 workers’ country of birth,  occupation, and duration of employment. As of January 17, 2018, the  number of permits approved for workers born in the Philippines, who  received the most permits for all 7 years of the CW program, had declined  by 13 percent from fiscal year 2017 to fiscal year 2018 and by 26 percent  from fiscal year 2015 to fiscal year 2018. Our preliminary analysis indicates that as of January 17, 2018, USCIS  had approved 750 CW-1 permits for construction workers for fiscal year  2018. This number represents a 75 percent decline from the nearly  3,000 permits approved for fiscal year 2017 (see table 4). Of the 2,352 workers with continuous employment in fiscal years 2014  through 2018, 1,905 workers (81 percent) were born in the Philippines.
Why GAO Did This Study

Pub. L. No. 110-229, enacted in 2008, amended the U.S.-CNMI covenant to apply federal immigration law to the CNMI after a transition period. The law required the Department of Homeland Security (DHS) to establish a temporary work permit program for foreign workers. DHS is required to decrease the number of permits issued annually, reducing them to zero by the end of the transition period, scheduled for December 31, 2019.
To implement the law, DHS established a new work permit program in 2011. Under the program, foreign workers can obtain, through their employers, nonimmigrant CW-1 status that allows them to work in the CNMI. The law was amended in August 2017 to, among other things, restrict future permits for workers in construction and extraction occupations.
Proposed legislation—Senate bill S. 2325—would, among other things, extend the transition period through December 31, 2029; increase the number of available permits from the 2018 level; and set required decreases in the annual numerical limit for the permits. (See figure for past numerical limits established by DHS and future limits proposed by S. 2325.)
This testimony discusses (1) recent trends in the CNMI economy and (2) preliminary observations about the number of approved CW-1 permits and characteristics of permit holders, drawn from GAO's ongoing work. GAO updated information about the CNMI's economy that it reported in May 2017 (see GAO-17-437 ). GAO also analyzed data and documents from U.S. agencies and the CNMI government.

What GAO Found

The Commonwealth of the Northern Mariana Islands' (CNMI) inflation-adjusted gross domestic product (GDP) has grown each year since 2012, according to the Bureau of Economic Analysis. In 2016, the CNMI's GDP rose by 29 percent, partly as a result of construction investment. While tourism has fluctuated in recent years, visitor arrivals in the CNMI rose by nearly a third from 2016 to 2017. After nearly a decade of annual decline, the total number of workers employed in the CNMI increased from 2013 through 2016, according to the most recent available CNMI tax data. Foreign workers made up 53 percent of those employed in 2016, compared with roughly 75 percent in 2002.
GAO's preliminary analysis indicates that the number of approved CNMI-Only Transitional Worker (CW-1) permits for foreign workers in the CNMI grew from over 7,100 for fiscal year 2012 to nearly 13,000 for fiscal year 2017. In addition, GAO identified trends in the country of birth, occupation, and employment duration of foreign workers with CW-1 permits approved for fiscal years 2012 through 2018. Workers born in the Philippines received the highest number of CW-1 permits each year. As of January 2018, 750 CW-1 permits had been granted to construction workers for fiscal year 2018—a 75 percent decline from the prior fiscal year. GAO estimated that approximately 2,350 foreign workers with approved CW-1 permits maintained continuous employment in the CNMI from fiscal year 2014 through January 2018. About 80 percent of these workers were born in the Philippines.