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This testimony discusses our work on factors that will affect the potential economic impact of implementing the legislation applying U.S. immigration law to the Commonwealth of the Northern Mariana Islands (CNMI). Although subject to most U.S. laws, the CNMI has administered its own immigration system since 1978, under the terms of its 1976 Covenant with the United States. The CNMI has applied this flexibility to admit substantial numbers of foreign workers through a permit program for non-U.S. citizens (noncitizens) entering the CNMI. In 2005, these workers represented a majority of the CNMI labor force and outnumbered U.S. citizens in most industries, including garment manufacturing and tourism, which have been central to the CNMI's economy. The CNMI also has admitted tourists under its own entry permit and entry permit waiver programs and has provided various types of admission to foreign investors. As we have reported previously, the CNMI faces serious economic challenges, including the decline of garment manufacturing and fluctuations in tourism. The recent immigration legislation amends the U.S.-CNMI Covenant to establish federal control of CNMI immigration and includes several provisions affecting foreign workers and investors in the CNMI during a transition period that ends in 2014. The Secretary of Homeland Security decided to delay the start of the transition period for 180 days, from June 1, 2009, to November 28, 2009, as allowed under the law in consultation with the Secretaries of the Interior, Labor, and State, the Attorney General, and the CNMI Governor. Unless otherwise noted, "transition period" refers to the period beginning November 28, 2009, and ending on December 31, 2014. During the transition period, the Secretary of Homeland Security, in consultation with the Secretaries of the Interior, Labor, and State, as well as the Attorney General, are responsible for establishing, administering, and enforcing a transition program to regulate immigration in the CNMI. This program will provide foreign workers temporary permits to work in the CNMI (CNMI-only work permits); the number of these permits must be reduced to zero by the end of the transition period or the end of any extensions of the CNMI-only work permit program. The legislation also establishes a joint visa waiver program by adding the CNMI to an existing visa waiver program for Guam visitors. The legislation's stated intent is to ensure effective border control procedures and protect national and homeland security, while minimizing the potential adverse economic and fiscal effects of phasing out the CNMI's own foreign worker permit program and while maximizing the CNMI's potential for economic and business growth.

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