[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
  H.R. 3079, TO AMEND THE JOINT RESOLUTION APPROVING THE COVENANT TO 
       ESTABLISH A COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS
=======================================================================



                       LEGISLATIVE FIELD HEARING

                               before the

                    SUBCOMMITTEE ON INSULAR AFFAIRS

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

              Wednesday, August 15, 2007, in Saipan, CNMI

                               __________

                           Serial No. 110-41

                               __________

       Printed for the use of the Committee on Natural Resources



  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                                   or
         Committee address: http://resourcescommittee.house.gov



                     U.S. GOVERNMENT PRINTING OFFICE

37-528 PDF                 WASHINGTON DC:  2008
---------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office  Internet: bookstore.gpo.gov Phone: toll free (866)512-1800
DC area (202)512-1800  Fax: (202) 512-2250 Mail Stop SSOP, 
Washington, DC 20402-0001


                     COMMITTEE ON NATURAL RESOURCES

               NICK J. RAHALL II, West Virginia, Chairman
              DON YOUNG, Alaska, Ranking Republican Member

Dale E. Kildee, Michigan             Jim Saxton, New Jersey
Eni F.H. Faleomavaega, American      Elton Gallegly, California
    Samoa                            John J. Duncan, Jr., Tennessee
Neil Abercrombie, Hawaii             Wayne T. Gilchrest, Maryland
Solomon P. Ortiz, Texas              Chris Cannon, Utah
Frank Pallone, Jr., New Jersey       Thomas G. Tancredo, Colorado
Donna M. Christensen, Virgin         Jeff Flake, Arizona
    Islands                          Stevan Pearce, New Mexico
Grace F. Napolitano, California      Henry E. Brown, Jr., South 
Rush D. Holt, New Jersey                 Carolina
Raul M. Grijalva, Arizona            Luis G. Fortuno, Puerto Rico
Madeleine Z. Bordallo, Guam          Cathy McMorris Rodgers, Washington
Jim Costa, California                Bobby Jindal, Louisiana
Dan Boren, Oklahoma                  Louie Gohmert, Texas
John P. Sarbanes, Maryland           Tom Cole, Oklahoma
George Miller, California            Rob Bishop, Utah
Edward J. Markey, Massachusetts      Bill Shuster, Pennsylvania
Peter A. DeFazio, Oregon             Dean Heller, Nevada
Maurice D. Hinchey, New York         Bill Sali, Idaho
Patrick J. Kennedy, Rhode Island     Doug Lamborn, Colorado
Ron Kind, Wisconsin                  Mary Fallin, Oklahoma
Lois Capps, California               Kevin McCarthy, California
Jay Inslee, Washington
Mark Udall, Colorado
Joe Baca, California
Hilda L. Solis, California
Stephanie Herseth Sandlin, South 
    Dakota
Heath Shuler, North Carolina

                     James H. Zoia, Chief of Staff
                   Jeffrey P. Petrich, Chief Counsel
                 Lloyd Jones, Republican Staff Director
                 Lisa Pittman, Republican Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON INSULAR AFFAIRS

            DONNA M. CHRISTENSEN, Virgin Islands, Chairwoman
        LUIS G. FORTUNO, Puerto Rico, Ranking Republican Member

Eni F.H. Faleomavaega, American      Elton Gallegly, California
    Samoa                            Jeff Flake, Arizona
Raul M. Grijalva, Arizona            Don Young, Alaska, ex officio
Madeleine Z. Bordallo, Guam
Nick J. Rahall II, West Virginia, 
    ex officio
                                 ------                                
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Wednesday, August 15, 2007.......................     1

Statement of Members:
    Bordallo, Hon. Madeleine Z., a Delegate in Congress from Guam     5
        Prepared statement of....................................     7
    Christensen, Hon. Donna M., a Delegate in Congress from the 
      Virgin Islands.............................................     1
        Prepared statement of....................................     3
    Faleomavaega, Hon. Eni F.H., a Delegate in Congress from 
      American Samoa.............................................     4

Statement of Witnesses:
    Babauta, Hon. Oscar M., Speaker of the CNMI House of 
      Representatives............................................    38
        Prepared statement of....................................    41
    Borja, Jesus C., The Enterprise Group........................   108
        Prepared statement of....................................   110
    Cohen, Hon. David B., Deputy Assistant Secretary for Insular 
      Affairs, U.S. Department of the Interior...................     8
        Prepared statement of....................................    10
    Cruz, Gregorio Sanchez, Jr., President, Taotao Tano CNMI 
      Association Inc............................................    78
        Prepared statement of....................................    80
    Fitial, Hon. Benigno R., Governor, Commonwealth of the 
      Northern Mariana Islands...................................    28
        Prepared statement of....................................    32
    Knight, Lynn, President, Hotel Association of the Northern 
      Mariana Islands............................................   100
        Prepared statement of....................................   102
    Reyes, Hon. Pete P., Vice President of the Senate of the CNMI    49
        Prepared statement of....................................    51
    Sablan, Alexander A., Vice-President, Saipan Chamber of 
      Commerce...................................................    93
        Prepared statement of....................................    96
    Sablan, Tina.................................................    70
        Prepared statement of....................................    72
    Sagana, Bonifacio V., President, The Dekada Movement, Inc....    83
        Prepared statement of....................................    85
    Tenorio, Hon. Pedro A., Resident Representative of the CNMI..    43
        Prepared statement of....................................    46

Additional materials supplied:
    List of individuals submitting statements for the record.....   121


 LEGISLATIVE FIELD HEARING ON H.R. 3079, TO AMEND THE JOINT RESOLUTION 
  APPROVING THE COVENANT TO ESTABLISH A COMMONWEALTH OF THE NORTHERN 
                            MARIANA ISLANDS.

                              ----------                              


                       Wednesday, August 15, 2007

                     U.S. House of Representatives

                    Subcommittee on Insular Affairs

                     Committee on Natural Resources

                              Saipan, CNMI

                              ----------                              

    The Subcommittee met, pursuant to call, at 9:09 a.m., at 
the Guma Hustisia Supreme Court Building, Saipan, CNMI, Hon. 
Donna Christensen [Chairwoman of the Subcommittee] presiding.
    Present: Representatives Christensen, Faleomavaega, and 
Bordallo.

           STATEMENT OF THE HON. DONNA CHRISTENSEN, 
         A DELEGATE IN CONGRESS FROM THE VIRGIN ISLANDS

    Mrs. Christensen. The Legislative Field Hearing by the 
Subcommittee on Insular Affairs will come to order. The 
Subcommittee is meeting today to hear testimony on H.R. 3079, 
to amend the Joint Resolution Approving the Covenant to 
Establish a Commonwealth of the Northern Mariana Islands.
    Good morning and Hafa Adai. It is my honor to welcome 
everyone to this very historic moment both for the U.S. 
Congress and the Commonwealth of the Northern Mariana Islands. 
Today, the Subcommittee on Insular Affairs is convening what I 
believe is the very first congressional hearing to take place 
in the CNMI, to hear testimony on H.R. 3079, legislation which 
I introduced in the House, which would apply U.S. immigration 
laws to this archipelago and also provide for a non-voting 
Delegate from the CNMI in the U.S. House of Representatives. 
Let me first thank the CNMI Supreme Court and Chief Justice 
Miguel Demapan for so graciously providing a venue to hold this 
hearing. It is appropriate that as we move forward in this 
legislative process, we will be able to look back and 
acknowledge that it began not only in the CNMI, but also in a 
place where justice and equality prevails. I also want to thank 
your Resident Representative Pete Tenorio. He has become a very 
good friend of mine, and all of us up here, and does an 
excellent job of representing the interests of the people of 
CNMI in Washington D.C. As a non-Member of Congress with the 
responsibility of working across the Federal Government, as 
well as developing relationships with the members of Capitol 
Hill, all of us who deal with these issues realize how 
challenging the job is for him. Keeping in mind his 
constituents and how a change in immigration policy will affect 
the CNMI, he requested that we come to listen to your leaders 
in the community. We responded and have made this effort to 
come to the CNMI because there is no better way to ensure that 
we achieve what is best for the people of the CNMI and for our 
nation than for us to be here with you to see firsthand the 
challenges that you face and to convene this hearing here in 
the Commonwealth.
    I want to welcome the witnesses and thank them for taking 
time to be here to present their testimonies. I also want to 
welcome those of you in the audience, as well as those just 
outside this venue, who are exercising their right to express 
their positions, whether in favor or in opposition, on this 
legislation in the effort which will be made by Congress to 
normalize the immigration policy of this U.S. territory by 
applying U.S. immigration laws and to address the plight of the 
non-resident workers.
    Much has been said about the efforts of the Subcommittee 
and of our counterparts in the U.S. Senate. Questions have been 
raised about our timing, demonizing the motive for change and 
suggesting that this endeavor runs counter to the spirit of the 
covenant which brought these islands from trust territory into 
the American family. The CNMI has had two decades of local 
control over immigration policy. For the future prosperity of 
the CNMI and for the security of our nation I believe the path 
should now lead us in a different direction.
    Let us be clear though, concern over the exercise of 
immigration policy in the CNMI is not new. It spans four U.S. 
Presidents and nearly 20 years. It began under the Reagan 
Administration when in May of 1986, then Assistant Secretary 
Richard Montoya began his letter to former CNMI Governor Pedro 
``Pete'' Tenorio saying, and I quote, ``The recent news reports 
on the tremendous growth of alien labor in the Northern Mariana 
Islands are extremely disturbing.'' That was 1986.
    At that time there were 6,600 non-resident guest workers 
let in by the CNMI Government. By comparison, Montoya noted 
that the Guam alien labor population, which was Federally 
administered, was only at 1,200. Mr. Montoya continued with 
expressions of concern and forecasted, and again I am quoting, 
``That the uncontrolled influx of alien workers in many 
segments of the NMI economy can only resolve in increased 
social and cultural problems.''
    The warnings continued through the administrations of Bush 
One, Clinton and currently in President George W. Bush's term, 
where we already know that the Administration has expressed 
their support for extending U.S. immigration laws--once in 2001 
in the letter from the Department of Justice to Senator Frank 
Murkowski, and the other in testimony presented to the Senate 
Energy and Natural Resources Committee during the hearing on S. 
1634, whose language is identical to Title 1 of H.R. 3079.
    In addition, the people of the CNMI and those non-residents 
brought here, at times under false pretenses, deserve better. I 
believe that normalizing the immigration policy does just that 
and provides a better environment for residents and all they 
hope for their island--a strong economy, opportunities for 
themselves and their children, good paying jobs, reliable 
infrastructure, strong schools, and adequate healthcare. This 
is the American way, and you are Americans.
    And as Americans you should have representation in the U.S. 
Congress. With the proposed changes that H.R. 3079 would enact 
if passed, having a CNMI delegate to Congress will be critical 
to ensuring that your voices continue to be heard and your 
interest considered as the implementation unfolds. I have 
always strongly supported the CNMI having a nonvoting delegate 
in the U.S. House of Representatives and I am committed to 
ending this injustice to the people of the Commonwealth.
    Again, I want to take this opportunity to thank everyone 
who has taken time to reach out to us, to meet with us and to 
be here today. I thank all of the people of the CNMI for their 
warm hospitality and I look forward to the testimony that we 
will be receiving this morning. And at this time, the Chair 
would now recognize Mr. Faleomavaega for any statement he may 
have.
    [The prepared statement of Mrs. Christensen follows:]

           Statement of The Honorable Donna M. Christensen, 
              Chairwoman, Subcommittee on Insular Affairs

    Good Morning and Hafa Adai.
    It is my honor to welcome everyone to this very historic moment for 
both the U.S. Congress and the Commonwealth of the Northern Mariana 
Islands.
    Today the Subcommittee on Insular Affairs is convening what I 
believe is the very first Congressional hearing to take place in the 
CNMI, to hear testimony on H.R. 3079, legislation which I introduced, 
which would apply U.S. immigration laws to this archipelago and also 
provide for a non-voting delegate from the CNMI in the U.S. House of 
Representatives.
    Let me first thank the CNMI Supreme Court and Chief Justice Miguel 
Demapan for so graciously providing a venue to hold this hearing. It is 
appropriate that as we move forward in this legislative process we can 
look back and acknowledge that it began not only in the CNMI, but also 
in a place where justice and equality prevails.
    I also wish to thank your Resident Representative Pete Tenorio. He 
has become a good friend of mine and does a fine job of representing 
the interests and the people of the CNMI in Washington, D.C.
    As a non-Member of Congress, with the responsibility of working 
across the Federal government as well as developing relationships with 
Members on Capitol Hill, all of us who deal with these issues realize 
how challenging the job must be for him.
    Keeping in mind his constituents and how a change in immigration 
policy will affect the CNMI, he requested that we come to listen to 
your leaders and the community
    We responded and have made this effort to come to the CNMI because 
there is no better way to ensure that we achieve what is best for the 
people of the CNMI and for our nation than for us to be here with you, 
to see first-hand the challenges you face, and to convene this hearing 
here in the commonwealth.
    I want to welcome the witnesses and thank them for taking the time 
to present their testimonies, and I want to also welcome those of you 
in the audience as well as those just outside this venue who are 
exercising their right to express their positions--in favor or 
opposed--on this legislation and the effort which will be made by 
Congress to normalize the immigration policy of this U.S. territory by 
applying U.S. immigration laws and to address the plight of the non-
resident workers.
    Much has been said about the efforts of this Subcommittee and our 
counterparts in the U.S. Senate. Questions have been raised about our 
timing, demonizing the motive for change, and suggesting that this 
endeavor runs counter to the spirit of the Covenant which brought these 
islands comprising this archipelago from trust territory into the 
American family.
    The CNMI has had two decades of local control over immigration 
policy. For the future prosperity of the CNMI and for the security of 
our nation, I believe the path should now lead in a different 
direction.
    Let us be clear, concern over the exercise of immigration policy in 
the CNMI is not new. It spans four U.S. Presidents and nearly twenty 
years. It began under the Reagan Administration when, in May 1986, 
then-Assistant Secretary Richard Montoya began his letter to former 
CNMI Governor Pedro P. Tenorio; ``The recent news reports on the 
tremendous growth of alien labor in the Northern Mariana Islands are 
extremely disturbing.''
    At that time, there were 6,600 non-resident guest workers let in by 
the CNMI government. For comparison, Montoya noted that Guam's alien 
labor population--which was federally administered--was only at 1,200.
    Mr. Montoya continued with expressions of concern and forecasted 
that the ``uncontrolled influx of alien workers in many segments of the 
NMI economy can only result in increased social and cultural 
problems.''
    The warnings continued through the Administrations of Bush I, 
Clinton, and currently in President George W. Bush's term, where we 
already know that the Administration has expressed their support for 
extending U.S. immigration laws; once in 2001 in a letter from the 
Department of Justice to Senator Frank Murkowski and the other in 
testimony presented to the Senate Energy and Natural Resources 
Committee during a hearing on S. 1634 whose language is identical to 
Title I of H.R. 3079.
    The people of the CNMI and those non-residents brought here, at 
times under false pretenses, deserve better. I believe that normalizing 
the immigration policy does just that and provides a better environment 
for residents and all they hope of their island--a strong economy, 
opportunities for themselves and their children, good paying jobs, 
reliable infrastructure, strong schools and adequate healthcare. This 
is the American way, and we are Americans.
    And as Americans you should have representation in the U.S. 
Congress. With the proposed changes that H.R. 3079 would enact if 
passed, having a CNMI Delegate to Congress will be critical to ensuring 
that your voices continue to be heard and your interests considered as 
the implementation unfolds.
    I have always strongly supported the CNMI having a non-voting 
delegate in the U.S. House of Representatives and am committed to 
ending this injustice to the people of the Commonwealth.
    Again thank everyone who has taken the time to reach out to us, to 
meet with us and to be here today. Thank all of the people of the CNMI 
for their warm hospitality.
    I look forward to the testimony that will be provided to us.
                                 ______
                                 

         STATEMENT OF THE HON. ENI F.H. FALE0MAVAEGA, 
           A DELEGATE IN CONGRESS FROM AMERICAN SAMOA

    Mr. Faleomavaega. Thank you, Madam Chair. I am very happy 
to be here. I just got here this morning at 4 o'clock and 
unfortunately the concierge of the hotel was supposed to send 
me a wake-up call and he never did, so I am somewhat frustrated 
at this time but I think I can wing it.
    Madam Chair, thank you for allowing me the opportunity to 
make a couple of observations on this morning's hearing. First 
of all, I am sure the leaders of the good people of CNMI join 
me in thanking you for your leadership and tremendous 
sensitivity to the needs and interests of our fellow Americans 
who live in the insular areas. Your presence and your 
initiative to conduct this field hearing in CNMI is a good 
example of your commitment to bring Washington to CNMI and not 
always the other way around. Madam Chair, I do not want to 
repeat what has already been said both through the media and 
other public hearings concerning the circumstances surrounding 
CNMI's difficulties in having to deal with its guest worker 
program and immigration and how the Federal Labor Standards Act 
applies to CNMI's own local labor laws.
    As you are very well aware, Madam Chair, too often that the 
needs of U.S. insular areas or territories in Washington either 
do not get the necessary attention they need and deserve or the 
one-size-fits-all mentality, both in the Congress and in the 
Administration, sometimes apply and produce unintended 
consequences that started with very good intentions. A classic 
example of that is the minimum wage that we're going through 
right now and I am sure that we'll be examining the proposed 
immigration bill as well.
    While we all share a common political association with the 
United States, our histories and socio-political developments 
have been quite different, and CNMI is a good example of this. 
I don't need to say this great people have had a colonial 
legacy that they had to put up with over the years and that 
rather than to seek independence from the United States, the 
people of CNMI opted to establish a very unique political 
relationship with the United States, and it is now known as the 
Covenant Relationship.
    And I am curious if the provisions of the Covenant 
Relationship complements or agrees with the proposed provisions 
of H.R. 3079, which attempts to amend the joint resolution of 
the approved Covenant. We are about to subject the CNMI to the 
convention on torture, a convention on refugees, and at the 
State Department and Homeland Security, supposedly they made a 
finding that the CNMI does not comply automatically with 
Section 208 of the Immigration and Nationality Act (audible but 
unintelligible) and where do we go from there? I have a whole 
bunch of questions that I look forward to asking some of our 
witnesses who will be testifying this morning. And Madam Chair, 
again, I want to thank you for giving me this opportunity to be 
here and I want to say to my good friends in the Northern 
Marianas, Hafa Adai and si Yu'us ma'ase.
    Mrs. Christensen. Thank you, Mr. Faleomavaega, and we 
really appreciate your making the extra effort to come after a 
very long trip that you--another official trip that you've been 
on to come and be with us this morning. The Chair now 
recognizes Ms. Bordallo for any statement she may have.

           STATEMENT OF THE HON. MADELEINE BORDALLO, 
                A DELEGATE IN CONGRESS FROM GUAM

    Ms. Bordallo. Thank you very much, Madam Chairwoman. 
Congressman Faleomavaega, welcome to the CNMI. Thank you, Madam 
Chairwoman, for holding this hearing today and for your 
leadership on the issues important to the CNMI and our 
territories. I welcome the Governor this morning, your Delegate 
to Congress, my friend Mr. Tenorio, to all of the witnesses who 
are in the audience, and all of the distinguished guests who 
are here to witness this very important historic occasion.
    Hafa Adai. This is an important day for the people of the 
Northern Marianas in the Commonwealth's relationship with the 
Federal Government. Although the distance between Guam and the 
Northern Marianas Island of Rota is only roughly 40 miles, we 
are closer in our bonds as people of this island chain that we 
call home. Our Congressional Delegation members have traveled 
thousands more miles to be here with you, to listen to your 
concerns regarding the proposed federalization of immigration 
control and the realization of a Delegate to the Congress for 
the Commonwealth. As we begin this legislative process with 
this hearing, allow me to make a few observations of my own. 
First, in a post-9/11 world, the security of our nation's 
borders has moved to the forefront of the many issues before 
Congress, and its relevancy to the CNMI is very legitimate, an 
accelerant issue being addressed at this time and in this 
context. Concerns have been raised regarding the ability of the 
CNMI to meet these security challenges, and as with many issues 
before Congress, this issue has reached the level of interest 
that demands action, whether it be by this bill's proposals or 
in the form of another modified plan. To the extent that your 
leaders and the stakeholders in your community can inform and 
enlighten us, we would be well served in taking appropriate 
action and all of us would be serving our national interest. 
Second, I believe that the economy of the CNMI should be and 
remain a central consideration in any bill that makes changes 
to the current immigration system. To some extent, it defeats 
the purpose of the bill to have a collapsing economy become the 
stimulus that would send boat loads of CNMI workers to Guam's 
northern shores as has already been evidenced in the past when 
some workers arrived after garment factories suddenly closed. 
Thus, I remain open to listening to an array of views and ideas 
today and tomorrow by how best and most effectively to 
structure proposed changes to the immigration system and how 
cooperation between the Local and the Federal Governments can 
best be achieved in a way to meet both to security challenges 
and the economic interests before us. Third, if the CNMI is 
folded into the Federal immigration system, with flexibility 
for guest workers and visitors, then this may be an appropriate 
time and opportunity to consider regional approaches to these 
issues that would mutually benefit Guam and the CNMI. We should 
consider opportunities for guest workers that may be needed 
anyway to support the military buildup on Guam that is sure to 
include benefits for the CNMI. This approach may indeed be one 
of the positive aspects of the Committee's efforts to address 
issues of mutual concern and to realign our economies to take 
full advantage of the military buildup. In this regard, many 
business leaders both in Guam and in the CNMI have already 
begun to consider scenarios that would be beneficial to both of 
our economies. I urge us to keep these scenarios and 
possibilities in mind as we continue this dialogue and as we 
explore proposed improvements and reforms through the 
immigration and border security systems.
    Last, let me be very direct in saying that a delegate to 
Congress for the Northern Marianas is long, long overdue. I 
strongly support your quest for a delegate in whatever 
legislation is moving forward or as a stand-alone bill. I have 
stated in the past my belief that the CNMI deserves a delegate 
to Congress, not because of the policies or the actions of your 
government, but because of your citizenship and the democratic 
principles that Congress is charged with protecting. I pledge 
to continue working, as I have in the past, with your Delegate, 
Mr. Tenorio, and with your leaders, until we achieve success 
and until you have the rightful representation in Congress that 
you all deserve.
    I look forward to working with you and your leaders on 
these issues and to hearing from our many witnesses today. And 
again, I thank the people of the Northern Marianas for their 
kind hospitality. Si Yu'us ma'ase.
    [The prepared statement of Ms. Bordallo follows:]

           Statement of The Honorable Madeleine Z. Bordallo, 
                    a Delegate in Congress from Guam

    Chairwoman Christensen, Thank you for holding this hearing today 
and for your leadership on the issues important to the CNMI and to the 
territories.
    This is an important day for the people of the Northern Marianas 
and the Commonwealth's relationship with the federal government. 
Although the distance between Guam and the Northern Mariana Island of 
Rota is only roughly forty miles, we are closer in our bonds as people 
of this island chain we call home.
    Our Chairwoman and our staff members have traveled thousands more 
miles to be here with you to listen to your concerns regarding the 
proposed federalization of immigration control and the realization of a 
Delegate to Congress for the Commonwealth.
    As we begin this legislative process with this hearing, allow me to 
make a few observations of my own.
    First, in a post 9-11 world, the security of our nation's borders 
has moved to the forefront of the many issues before Congress, and its 
relevancy to the CNMI is a very legitimate and salient issue being 
addressed at this time and in this context.
    Concerns have been raised regarding the ability of the CNMI to meet 
these security challenges, and as with many issues before Congress, 
this issue has reached a level of interest that demands action, whether 
it be by this bill's proposals or in the form of another modified plan. 
To the extent that your leaders and the stakeholders in your community 
can inform and enlighten us, we would be well served in taking 
appropriate action and all of us would be serving our national 
interest.
    Second, I believe that the economy of the CNMI should be and remain 
a central consideration in any bill that makes changes to the current 
immigration system. To some extent, it defeats the purpose of the bill 
to have a collapsing economy become the stimulus that would send 
boatloads of CNMI workers to Guam's northern shores, as has already 
been evidenced in the past when some workers arrived after garment 
factories suddenly closed. Thus, I remain open to listening to a range 
of views and ideas today and tomorrow about how best and most 
effectively to structure proposed changes to the immigration system and 
on how cooperation between the local and federal governments can best 
be achieved in a way to meet both the security challenges and the 
economic interests before us.
    Third, if the CNMI is folded into the federal immigration system 
with flexibility for guest workers and visitors, then this may be an 
appropriate time and opportunity to consider regional approaches to 
these issues that would mutually benefit Guam and the CNMI. We should 
consider opportunities for guest workers that may be needed anyway to 
support the military buildup on Guam that is sure to include benefits 
for the CNMI. This approach may indeed be one of the positive aspects 
of the Committee's efforts to address issues of mutual concern, and to 
re-align our economies to take full advantage of the military buildup. 
In this regard, many business leaders both in Guam and in the CNMI have 
already begun to consider scenarios that would be beneficial to both of 
our economies. I urge us to keep these scenarios and possibilities in 
mind as we continue this dialogue and as we explore proposed 
improvements and reforms to the immigration and border security 
systems.
    Lastly, let me be very direct in saying that a Delegate to Congress 
for the Northern Marianas is long overdue. I strongly support your 
quest for a Delegate in whatever legislation is moving forward, or as a 
stand alone bill. I have stated in the past my belief that the CNMI 
deserves a Delegate to Congress not because of the policies or actions 
of your government, but because of your citizenship and the democratic 
principles that the Congress is charged with protecting. I pledge to 
continue working with your leaders until we achieve success and until 
you have the rightful representation in Congress that you deserve.
    I look forward to working with you and your leaders on these 
issues, and to hearing from the witnesses today.
    Thank you, again, Madam Chairman, for convening this important 
hearing.
                                 ______
                                 
    Mrs. Christensen. Thank you, Ms. Bordallo. If there are no 
objections, I'd now like to submit for the official record the 
testimony of the following individuals. Mr. Engracio ``Jerry'' 
Custodio of the Human Dignity Movement, Ms. Wendy Doromal, Mr. 
Ron Hodges, Ms. Daisy Mendiola, and Mr. Anthony Wibberly. 
Hearing no objections, so ordered.
    Mrs. Christensen. We thank all of the witnesses that will 
appear before the Subcommittee today and look forward to your 
testimony, and I would now like to recognize the first panel, 
The Honorable David B. Cohen, Deputy Assistant Secretary for 
Insular Affairs of the U.S. Department of Interior. The Chair 
now recognizes the Assistant Secretary to testify for five 
minutes. And just for the benefit of all of those who will be 
testifying today, the timing lights are on the table. They will 
indicate when your time has been concluded, and all witnesses' 
statements will be submitted for the hearing record. Mr. Cohen?

    STATEMENT OF THE HON. DAVID B. COHEN, DEPUTY ASSISTANT 
   SECRETARY FOR INSULAR AFFAIRS, U.S. DEPARTMENT OF INTERIOR

    Mr. Cohen. Thank you, Hafa Adai, (unintelligible; greets 
committee in several languages), a pleasant good morning. Madam 
Chairwoman and members of the Committee, thank you for the 
opportunity to testify on H.R. 3079, the bill containing 
immigration provisions subsequently identical to those 
contained in S. 1634, as well as the second title which will 
give the Commonwealth of the Northern Mariana Islands a 
nonvoting Delegate to the U.S. House of Representatives.
    My testimony today will begin by reiterating the position 
expressed by the Administration with respect to the immigration 
provisions in S. 1634. I come before you today wearing at least 
two hats. As Deputy Assistant Secretary of the Interior for 
Insular Affairs, I am the Federal Government's official that is 
primarily responsible for generally administering, on behalf of 
the Secretary of the Interior, the Federal Government's 
relationship with the CNMI. I also serve as the President's 
Special Representative for consultations with the CNMI on any 
matter of mutual concern, pursuant to Section 902 of the U.S.-
CNMI Covenant.
    I will begin my statement with an overview of concerns that 
make a compelling case for Federalization. The CNMI is hampered 
by a lack of an effective prescreening process for aliens 
wishing to enter the Commonwealth. In a post-9/11 environment, 
given the CNMI's location and the number of aliens that travel 
there, we believe that continued local control of CNMI's 
immigration system presents significant national security and 
homeland security concerns. Human trafficking remains far more 
prevalent in the CNMI than it is in the rest of the U.S.
    During the twelve-month period ending on April 30, 2007, 36 
female victims of human trafficking were admitted to or 
otherwise served by the Guma' Esperansa shelter. All of these 
women were victims of sexual exploitation. Secretary Kempthorne 
personally visited the shelter and met with a number of women 
from the Philippines who were underage when they were 
trafficked into the CNMI for the sex industry. He found their 
stories heartbreaking. The State Department estimates that a 
total of between 14,500 and 17,500 victims are trafficked into 
the U.S. each year. This estimate includes not only women in 
the sex trade but men, women, and children trafficked for all 
purposes including labor.
    Assuming a CNMI population of roughly 70,000 and the U.S. 
population above 300 million, the numbers above suggest that 
human trafficking is between 8.8 and 10.6 times more prevalent 
in CNMI than it is in the U.S. as a whole. This is a 
conservative calculation that most likely makes the CNMI look 
better than it actually is. The number of victims counted for 
the CNMI includes only actual female victims in the sex trade 
who were served by Guma' Esperansa. This is being compared with 
the U.S. estimate of human trafficking victims of both genders 
that is not limited to the sex trade. In an apples-to-apples 
comparison, the CNMI's report card would be worse.
    A number of foreign nationals have come to the Federal 
Ombudsman's Office complaining that they were promised a job in 
CNMI after paying a recruiter thousands of dollars to come 
there only to find, on arrival in the CNMI, that there is no 
job. Secretary Kempthorne met personally with the young lady 
from China who was a victim of such a scam and who was 
pressured to become a prostitute. She was able to report her 
situation and obtain help in the Federal Ombudsman's Office.
    We're also concerned, as Congresswoman Bordallo was 
pointing out, about recent attempts to smuggle foreign 
nationals from the CNMI into Guam by boat. A woman was recently 
sentenced to five years in prison for attempting to smuggle 
over 30 Chinese nationals from the CNMI into Guam. With the 
planned military buildup in Guam, the potential for smuggling 
aliens from the CNMI into Guam by boat is a cause for concern.
    We have very serious concerns about the CNMI Government's 
administration of its refugee protection system. In my 
testimony in July before the Senate Energy Committee, I 
described a particularly disturbing exchange of correspondence 
between the CNMI Attorney General and the U.S. Department of 
Homeland Security. In this exchange the CNMI refused to provide 
information on the status of particular refugee protection 
cases, accusing the Department of Homeland Security and the 
Department of State of inappropriate interference in these 
cases. The CNMI's response to the inquiry reflected a lack of 
acknowledgement of the legitimate role of the Federal 
Government in monitoring the CNMI's compliance with the U.S. 
Treaty Obligations.
    In the aftermath of the Senate hearing, there has been some 
reason to believe that the CNMI may now be moving toward a less 
confrontational approach to this important issue--a development 
the Federal Government would welcome, but substantial concerns 
remain about the ability of the Federal Government effectively 
to ensure that the CNMI's process is being implemented fairly 
and properly, in accordance with international treaty 
obligations. If these issues cannot be resolved, it presents 
the Federal Government with a dilemma. If the Federal 
Government can't verify that the CNMI's administering its 
refugee protection program in a manner that accords with the 
U.S. compliance with international treaty obligations, then 
extending the protections available under U.S. immigration law 
to cover aliens in the CNMI may be the only way to ensure that 
compliance.
    However, making aliens in the CNMI eligible to apply for 
protection in the U.S. is a potentially serious problem if the 
CNMI maintains control over its immigration system and 
continues to determine which aliens and how many are able to 
enter the CNMI. Under that scenario, the U.S. could be required 
to provide refugee protection to aliens who have been admitted 
to the CNMI through a process controlled not by the Federal 
Government but by the CNMI. The U.S. will be subjecting itself 
to potential costs and other consequences for decisions made by 
the CNMI. This is a strong argument in favor of Congress taking 
legislative action to take control of the CNMI's immigration 
system.
    The above are some of the factors that have led us to 
conclude that the CNMI's immigration system must be Federalized 
as soon as possible. We believe that H.R. 3079 is generally 
sound legislation that embodies the concept of ``Flexible 
Federalization,'' that is Federalization of the CNMI's 
immigration system in a manner designed to minimize damage to 
the CNMI's fragile economy and maximize the potential for 
economic growth. Last month, I testified before the Senate on 
behalf of the Administration on S. 1634 which would Federalize 
the CNMI immigration system through provisions which are 
identical to those of H.R. 3079. I announced the 
Administration's support for S. 1634, subject to a few, most 
are technical, points that are summarized in my written 
statement.
    We point out, however, that one of this Administration's 
principles for considering immigration-level legislation for 
the CNMI is that such legislation should be carefully analyzed 
for its likely impact in the CNMI before they implement it. 
We've also urged that such analysis occur expeditiously. The 
need to study must not be used as an excuse to delay.
    Mrs. Christensen. Mr. Cohen, would you try to wrap up--
we'll get to a lot of your statement in the questions.
    Mr. Cohen. Sure. And just in conclusion, I'd say that when 
we again point out that people of the CNMI must participate 
fully in the decisions that will affect their future. And as I 
have said in the past, a better future for the people of the 
CNMI cannot be unilaterally imposed from Washington D.C., 
ignoring the insights, wisdom and aspirations of those to whom 
this future belongs. And that's why we commend you for coming 
here, holding this hearing, speaking with the people of the 
CNMI and for Title II, with respect to which this 
Administration reiterates its strong support for a nonvoting 
delegate from the CNMI to the U.S. House of Representatives. 
Thank you.
    [The prepared statement of Mr. Cohen follows:]

Statement of David B. Cohen, Deputy Assistant Secretary of the Interior 
                          for Insular Affairs

    Madame Chairwoman and members of the Committee, thank you for the 
opportunity to testify on H.R. 3079, the Northern Mariana Islands 
Covenant Implementation Act and Northern Mariana Islands Delegate Act, 
a bill containing immigration provisions substantively identical to 
those contained in S. 1634 as well as a second title which would give 
the Commonwealth of the Northern Mariana Islands a nonvoting Delegate 
to the United States House of Representatives. My testimony today will 
begin by reiterating the position expressed by the Administration with 
respect to the immigration provisions in S. 1634. I come before you 
today wearing at least two hats: As Deputy Assistant Secretary of the 
Interior for Insular Affairs, I am the Federal official that is 
responsible for generally administering, on behalf of the Secretary of 
the Interior, the Federal Government's relationship with the 
Commonwealth of the Northern Mariana Islands (CNMI). I also serve as 
the President's Special Representative for consultations with the CNMI 
on any matter of mutual concern, pursuant to Section 902 of the U.S.-
CNMI Covenant. In fact, I was in Saipan in March for Section 902 
consultations with CNMI Governor Fitial and his team. I was also in 
Saipan in June with Secretary Kempthorne as part of his visit to U.S.-
affiliated Pacific island communities.
    Under the Covenant through which the CNMI joined the U.S. in 1976, 
the CNMI was exempted from most provisions of U.S. immigration laws and 
allowed to control its own immigration. However, section 503 of the 
Covenant to Establish a Commonwealth of the Northern Mariana Islands in 
Political Union with the United States of America (P.L. 94-241) 
explicitly provides that Congress has the authority to make immigration 
and naturalization laws applicable to the CNMI. Through the bill that 
we are discussing today, Congress is proposing to take this legislative 
step to bring the immigration system of the CNMI under Federal 
administration. We believe that any federalization of the CNMI's 
immigration system must be flexible because of the CNMI's unique 
history, culture, status, demographic situation, location, and, perhaps 
most importantly, fragile economic and fiscal condition. Additionally, 
we would need appropriate time to address a range of implementation 
issues as there are a number of Federal agencies that would be involved 
with federalization. In testimony before this Committee earlier this 
year, I offered, on behalf of the Administration, five principles that 
we believe should guide the development of any federalization 
legislation.
    In previous testimony before this Committee and others, I have 
described at length the impressive amount of progress that the CNMI has 
made to improve working conditions there since the 1990s. The CNMI 
should be congratulated for this progress. However, serious problems 
continue to plague the CNMI's administration of its immigration system, 
and we remain concerned that the CNMI's deteriorating fiscal situation 
may make it even more difficult for the CNMI government to devote the 
resources necessary to effectively administer its immigration system 
and to properly investigate and prosecute labor abuse. I will begin my 
statement with an overview of concerns that make a compelling case for 
federalization.
Need for an Effective Screening Process
    The CNMI is hampered by the lack of an effective pre-screening 
process for aliens wishing to enter the Commonwealth. Under the 
Immigration and Nationality Act (INA), before traveling to the 
continental United States, Alaska, Hawaii, Puerto Rico, Guam and the 
U.S. Virgin Islands, aliens must obtain a visa from a U.S. consular 
officer abroad unless they are eligible under the Visa Waiver Program 
or other legal authority for admission without a visa. Carriers are 
subject to substantial fines if they board passengers bound for these 
parts of the United States who lack visas or other proper 
documentation. All visa applicants are checked against the Department 
of State's name-checking system, the Consular Lookout and Support 
System (CLASS). With limited exceptions, all applicants are interviewed 
and subjected to fingerprint checks. After obtaining a visa, an alien 
seeking entry to these parts of the United States must then apply for 
admission to an immigration officer at a U.S. port of entry. The 
immigration officer is responsible for determining whether the alien is 
admissible, and in order to do so, the officer consults appropriate 
databases to identify individuals who, among other things, have 
criminal records or may be a danger to the security of the United 
States. The CNMI does not issue visas, conduct interviews or check 
fingerprints for those wishing to travel to the CNMI, nor does the CNMI 
have an equivalent to CLASS. Furthermore, CNMI immigration inspectors 
determine admissibility under CNMI law rather than federal law. The 
CNMI does have its own sophisticated computerized system for keeping 
track of aliens who enter and leave the Commonwealth. A record of all 
persons entering the CNMI is made with the Commonwealth's Labor & 
Immigration Identification and Documentation System, which is state-of-
the-art. However, that is not a substitute for comprehensive pre-
screening by Federal government authorities. In a post-9/11 
environment, and given the CNMI's location and the number of aliens 
that travel there, we believe that continued local control of the 
CNMI's immigration system presents significant national security and 
homeland security concerns.
Human Trafficking
    While we congratulate the CNMI for its recent successful 
prosecution of a case in which foreign women were pressured into 
prostitution, human trafficking remains far more prevalent in the CNMI 
than it is in the rest of the U.S. During the twelve-month period 
ending on April 30, 2007, 36 female victims of human trafficking were 
admitted to or otherwise served by Guma' Esperansa, a women's shelter 
operated by a Catholic nonprofit organization. All of these women were 
victims of sexual exploitation. Secretary Kempthorne personally visited 
the shelter and met with a number of women from the Philippines who 
were underage when they were trafficked into the CNMI for the sex 
industry. As you can imagine, he found their stories heartbreaking. The 
State Department estimates that a total of between 14,500 and 17,500 
victims are trafficked into the U.S. each year from many places in the 
world. This estimate includes not only women in the sex trade, but men, 
women and children trafficked for all purposes, including labor. 
Assuming a CNMI population of roughly 70,000 and a U.S. population of 
roughly 300 million, the numbers above suggest that human trafficking 
is between 8.8 and 10.6 times more prevalent in the CNMI than it is in 
the U.S. as a whole. This is a conservative calculation that most 
likely makes the CNMI look better than it actually is: The number of 
victims counted for the CNMI includes only actual female victims in the 
sex trade who were served by Guma' Esperansa. This is being compared 
with a U.S. estimate of human trafficking victims of both genders that 
is not limited to the sex trade. In an apples-to-apples comparison, the 
CNMI's report card would be worse. We note that most of the victims 
that have been served by Guma' Esperansa were referred by the CNMI 
government (as a result of referrals from the Federal Ombudsman to 
local authorities). However, it is clear that local control over CNMI 
immigration has resulted in a human trafficking problem that is 
proportionally much greater than the problem in the rest of the U.S.
    A number of foreign nationals have come to the Federal Ombudsman's 
office complaining that they were promised a job in the CNMI after 
paying a recruiter thousands of dollars to come there, only to find, 
upon arrival in the CNMI, that there was no job. Secretary Kempthorne 
met personally with a young lady from China who was the victim of such 
a scam and who was pressured to become a prostitute; she was able to 
report her situation and obtain help in the Federal Ombudsman's office. 
We believe that steps need to be taken to protect women from such 
terrible predicaments.
    We are also concerned about recent attempts to smuggle foreign 
nationals, in particular Chinese nationals, from the CNMI into Guam by 
boat. A woman was recently sentenced to five years in prison for 
attempting to smuggle over 30 Chinese nationals from the CNMI into 
Guam. With the planned military buildup in Guam, the potential for 
smuggling aliens from the CNMI into Guam by boat is a cause for 
concern.
Refugee Protection
    We have very serious concerns about the CNMI government's 
administration of its refugee protection system, which was established 
pursuant to a Memorandum of Agreement signed by former Governor Juan 
Babauta and me in 2003 with the financial support of the Office of 
Insular Affairs. Establishing a refugee protection system in the CNMI 
was important to the U.S. because of our concerns regarding U.S. 
compliance with international treaties to which the U.S. is a party, 
including the 1967 United Nations Protocol Relating to the Status of 
Refugees and the Convention Against Torture and Other Cruel, Inhuman or 
Degrading Treatment or Punishment. Even though the CNMI for the most 
part is not included in the Immigration and Nationality Act, the U.S. 
is obligated to ensure that aliens in the CNMI are not returned to 
their home countries if there is a sufficient risk under the Convention 
Against Torture or the Refugee Protocol that they will be tortured or 
persecuted there.
    Under the Memorandum of Agreement, the CNMI has established its own 
refugee protection system with the assistance of U.S. Citizenship and 
Immigration Services (USCIS) acting as ``Protection Consultant.'' In 
this role, USCIS assisted the Commonwealth in drafting regulations and 
forms, trained all staff for the program, provided quality assurance 
review prior to a decision on all cases, and performed background 
checks on all applicants. The two-year performance period during which 
the duties of the Protection Consultant were enumerated in the 
Memorandum of Agreement terminated in September 2006. USCIS and the 
CNMI have yet to enter into a subsequent instrument to delineate the 
assistance that USCIS has offered to provide to the CNMI, because of a 
delayed response by the CNMI to USCIS's requests for cooperation since 
the new ``Letter of Agreement'' was first proposed and drafted by USCIS 
in February 2007.
    In my testimony on July 19, 2007 before the Senate Energy 
Committee, I described a particularly disturbing exchange of 
correspondence between the CNMI Attorney General and USCIS. In this 
exchange the CNMI refused to provide information on the status of 
particular refugee protection cases, accusing the Department of 
Homeland Security and the Department of State of inappropriate 
interference in these cases. The CNMI's response to the inquiry 
reflected a lack of acknowledgement of the legitimate role of the 
Federal Government in monitoring the CNMI's compliance with U.S. treaty 
obligations.
    In the aftermath of the Senate hearing there has been some reason 
to believe that the CNMI may be moving toward a less confrontational 
approach to this important issue--a development that the Federal 
Government would welcome--but substantial concerns remain regarding the 
ability of the Federal Government effectively to ensure that the CNMI's 
process is being implemented fairly and properly, in accordance with 
international treaty obligations.
    The circumstances described above present the Federal Government 
with a dilemma: If the Federal Government cannot verify that the CNMI 
is administering its refugee protection program in a manner that 
accords with U.S. compliance with international treaty obligations, 
then extending the protections available under U.S. immigration law to 
cover aliens in the CNMI may be the only way to ensure that compliance. 
However, making aliens in the CNMI eligible to apply for protection in 
the U.S. is a potentially serious problem if the CNMI maintains control 
over its immigration system and continues to determine which aliens, 
and how many, are able to enter the CNMI. Under that scenario, the U.S. 
could be required to provide refugee protection to aliens who have been 
admitted to the CNMI through a process controlled not by the Federal 
Government, but by the CNMI. The U.S. would be subjecting itself to 
potential costs and other consequences for decisions made by the CNMI. 
This is a strong argument in favor of Congress taking legislative 
action, as contemplated under Section 503 of the Covenant (P.L. 94-
241), to take control of the CNMI's immigration system.
Recommended Changes to this Bill
    The above are some of the factors that have led us to conclude that 
the CNMI's immigration system must be federalized as soon as possible. 
We believe that H.R. 3079 is generally sound legislation that embodies 
the concept of ``Flexible Federalization''--that is, federalization of 
the CNMI's immigration system in a manner designed to minimize damage 
to the CNMI's fragile economy and maximize the potential for economic 
growth. We also believe that H.R. 3079 reflects the principles 
previously spelled out by the Administration as those that should guide 
the federalization of the CNMI's immigration system. Last month, I 
testified before the Senate on behalf of the Administration on S. 1634, 
which would federalize the CNMI immigration system through provisions 
which are identical to those of H.R. 3079. I announced the 
Administration's support for S. 1634, subject to the following points:
      Long-term Status to Temporary Workers. At this time, the 
Administration is evaluating the specific provisions granting long-term 
status to temporary workers in the CNMI in light of the 
Administration's immigration policies. We look forward to working with 
Congress on this important issue.
      Protection from Persecution and Torture. Consistent with 
the general transfer of immigration to Federal control on the 
transition period effective date, the bill should clarify that U.S. 
protection law, including withholding of removal on the basis of 
persecution or torture, would apply and be administered by Federal 
authorities beginning on the transition period effective date. However, 
given the uncertainties inherent in changing the CNMI immigration 
regimen, we recommend that extension of the affirmative asylum process 
under section 208 of the INA to the CNMI be delayed until the end of 
the transition period. We would also recommend a provision requiring 
the CNMI to maintain an effective protection program between date of 
enactment and the transition period effective date.
      Authority of the Secretary of Homeland Security. In 
general, it is important that the Secretary of Homeland Security have 
sufficient authority and resources to effectively administer the new 
responsibilities that would be undertaken under the bill. Improvements 
to the bill in this regard would include ensuring that the Secretary 
has full authority in his discretion to designate countries for the new 
CNMI visa waiver program (giving due consideration to all current CNMI 
tourist source countries); and providing the necessary fiscal and 
operational authority to conduct all necessary activities in the CNMI.
      Visa Waiver. As noted above, it is essential that the 
Secretary of Homeland Security, in consultation with the Secretary of 
State, have full authority to determine countries authorized to 
participate in a visa waiver program for the CNMI. We would also 
recommend consideration of authorizing integration of the proposed CNMI 
visa waiver program with the Guam visa waiver program as a possible 
means of increasing the value of these programs to those jurisdictions, 
such as, for example, allowing visitors qualifying for both programs a 
combined 30 days, with a maximum stay of 21 days in either territory.
      Employment-Based Visas. The bill would authorize the 
Secretary of Homeland Security to establish a specific number of 
employment-based visas that will not count against the numerical 
limitations under the Permanent Alien Labor Certification (PERM) 
program, if the Secretary of Labor, after consultation with the 
Governor of the Commonwealth and the Secretary of Homeland Security, 
finds exceptional circumstances with respect to the inability of 
employers to obtain sufficient work-authorized labor. We would 
recommend that this provision be removed from the bill as unnecessary 
because the CNMI will have an uncapped temporary worker program during 
the 10-year transition period.
      Conforming and Technical Amendments. We would like to 
work with Congress on a number of other conforming, technical and other 
amendments necessary to fully effectuate the transfer of 
responsibilities and effectively administer and integrate the CNMI-
specific programs with the INA. For example, the CNMI should be added 
to the definitions of ``State'' and ``United States'' in section 101 of 
the INA.
Conclusion
    We point out, however, that one of this Administration's principles 
for considering immigration legislation for the CNMI is that such 
legislation should be carefully analyzed for its likely impact in the 
CNMI before we implement it. We have also urged that such analysis 
occur expeditiously: the need to study must not be used as an excuse to 
delay. We understand that the Senate has requested an analysis of the 
provisions of S. 1634, and that the results of this analysis would of 
course apply equally to H.R. 3079. We note that H.R. 3079 provides a 
flexible framework to federalize the CNMI immigration system, and that 
the results of any study could be accommodated in the development of 
implementing regulations.
    It is important to remember that H.R. 3079 deals with a unique 
situation, and hence does not establish any precedents that are 
relevant to the discussion of national immigration reform. H.R. 3079 is 
designed to bring under the ambit of Federal immigration law a 
territory that generally was not previously subject to Federal 
immigration law. Accomplishing this transition without causing severe 
economic disruption requires special transitional provisions that take 
into account the reality that CNMI society has been shaped by 
immigration policies that vary significantly from Federal immigration 
policy. Because CNMI society has evolved in a unique manner under 
unique circumstances, it would not be prudent to apply immigration 
policy designed for the 50 states to the CNMI in a blanket fashion with 
no transition mechanisms. The special transitional provisions contained 
in this bill are designed to move CNMI society from one set of 
governing principles to another in a manner that minimizes harm to CNMI 
residents.
    Finally, Madame Chairwoman, we again point out that the people of 
the CNMI must participate fully in decisions that will affect their 
future. As I have said in the past, a better future for the people of 
the CNMI cannot be imposed unilaterally from Washington, D.C., ignoring 
the insights, wisdom and aspirations of those to whom this future 
belongs. That is why I applaud you and the members of this panel who 
have traveled so far to give the many voices of the CNMI an opportunity 
to be heard--an opportunity that many of today's witnesses and most of 
the people you will meet during your stay would not otherwise have had. 
At a time when young men and women from the CNMI are sacrificing their 
lives in Iraq in proportions that far exceed the national average, the 
CNMI has more than earned the right to have the Federal Government act 
collaboratively and with great care as we consider policies that will 
change these islands forever. Therefore, with regard to Title II of the 
bill, I am pleased to again express the Administration's support for a 
nonvoting Delegate from the CNMI to the House of Representatives.
    Thank you.
                                 ______
                                 
    Mrs. Christensen. Thank you, Mr. Cohen. I'll now recognize 
myself for five minutes of questions. And I'd like to begin 
where you ended Mr. Cohen, because I am very pleased to hear 
that the Administration supports the addition of the Delegate 
to Congress from the CNMI. Can you just give us your views as 
to how that would benefit the CNMI?
    Mr. Cohen. Well, you know particularly in--and thank you 
for the question, Madam Chairwoman. The CNMI is the only U.S. 
territory without a seat at the table. As Congress makes 
decisions that so profoundly affect the lives of the people of 
the CNMI, it's wrong for the CNMI to be the only territory 
without a seat at the table. The very issue we're discussing 
today has something that would drastically change the rules of 
the game that affect the people of the CNMI, their ability to 
earn a livelihood, the character of this society. For better or 
worse, this is something that will have a drastic impact on the 
CNMI and the people of the CNMI need to be at the table.
    Now, your Committee and your counterpart Committee in the 
Senate have made excellent efforts to make sure that the views 
of the people of the CNMI are included, and there are diverse 
views throughout this community as you well know. But there is 
no substitute for having the people of the CNMI elect their 
representative to your body to be able to sit at the table, as 
all of you do, and have the ability to introduce legislation, 
to introduce amendments to the legislation, to vote in 
committee, and to persuade colleagues to account for the 
interest of the CNMI. So, we commend you for introducing this 
legislation and I believe this is a very important development 
for the people of the CNMI.
    Mrs. Christensen. Thank you, Mr. Cohen, for that answer. Of 
course, Title I of the legislation deals mostly with 
immigration, and I was wondering if you could tell us if there 
are any circumstances under which a territory would have 
control over its immigration and be able to properly control 
the administration of that immigration. Do you have examples of 
this happening?
    Mr. Cohen. Well, certainly, Madam Chairwoman. I'd like to 
clarify that it is not the Administration's position that under 
no circumstances could a territory successfully control its own 
immigration. In fact, we don't address that at all. The 
Administration's position is that, under these circumstances in 
the CNMI, that Federalization is the right answer. Given the 
CNMI's location, given the number of aliens that it lets in, 
and other factors, including the challenges that it faces in 
trying to have a proper immigration system with declining 
revenues, that Federalization is the best answer, but we do not 
take a position as to whether this will always be the best 
answer under all circumstances.
    Mrs. Christensen. Are there other territories that have 
control over their immigration?
    Mr. Cohen. Yes. Currently American Samoa controls its own 
immigration. Primarily it uses control of that immigration to 
let in people who are Samoan. You know, the various, most 
obviously strong historical ties between the Independent State 
of Samoa and American Samoa. There are strong economic ties. 
Their economies and their labor markets are inextricably wound 
together, and they're located in a much different (audible but 
unintelligible). And the circumstances of American Samoa's 
geography, history, and culture, as well as the way it is 
administered, its immigration system are in no way comparable 
to those of the CNMI. So, we're not trying to extrapolate any 
conclusions we make about the CNMI to any other territory.
    Mrs. Christensen. Thank you. Governor Fitial suggested 
during the Senate Hearing in July, and I believe he'll suggest 
it again today, that if the Federal Government were to take 
control of immigration, it would be inconsistent with the right 
of self-government and there would be no reason to exist. And I 
believe you'll hear that also said in other testimony. So, in 
your opinion, does the Federal Government taking control of 
immigration, is it inconsistent with the right to self-
government as expressed in the Covenant?
    Mr. Cohen. Madam Chairwoman, I do not believe that the 
Federal Government exercising the authority that's expressly 
granted in the Covenant itself to take control over immigration 
is inconsistent with the right of self-government. All of the 
territories enjoy the right to self-government and the 
territories, as you all well know, there are different terms 
and conditions that apply to their respective rights of self-
government. But the right of self-government for a territory is 
not an exemption from U.S. sovereignty and the U.S. expressly 
retained the right to Federalize immigration in the manner and 
time of its choosing.
    People of the CNMI enjoy self-government in that they elect 
their Governor and the Lieutenant Governor; they elect the 
members of the two houses of their legislature; they elect a 
Resident Representative to Washington, who we all hope will be 
the Congressman; and this is the same level of self-government 
that is enjoyed by people of the U.S. Virgin Islands, the 
people of American Samoa, the people of Guam, and the people of 
Puerto Rico.
    Mrs. Christensen. Thank you. I have exhausted my first five 
minutes. Mr. Faleomavaega, you are now recognized for your 
questions.
    Mr. Faleomavaega. Thank you, Madam Chair. I do want to also 
apologize for not extending my personal warm welcome to the 
Governor, the Lieutenant Governor, and my good friend Pete 
Tenorio for him being here and certainly the outstanding 
service that he's rendered on behalf of the people of the 
Northern Marianas in Washington.
    Secretary Cohen, I tried to go through the proposed bill, 
very comprehensive to say the least. In developing this 
proposed legislation, was there close consultation from the 
leaders of the CNMI in getting their input as part of the 
process?
    Mr. Cohen. Yes, there was Congressman. You know, I have 
heard different opinions expressed as to the nature of that 
cooperation, but--when I was here in March, for example, for 
the 902 talks, we had extensive consultations where, under the 
auspices of Section 902, where I heard in great detail concerns 
that the CNMI would have things that they would want addressed 
in any legislation. It was in support for legislation that 
wasn't offered, but we discussed in great detail over the 
course of two days the types of things that would have to be 
addressed in order for any Federalization of immigration to 
work properly for the CNMI. All of these things, we think, were 
taken into account.
    Mr. Faleomavaega. But let me ask you that, because my time 
is running. As a consequence of your consultations, was there 
ever any resolution, or petition, or even a letter from the 
executive branch of CNMI attesting to--agreeing to the proposed 
provisions of the proposed bill? I am trying to--you say that 
there was close consultation. Now, my next question is, is 
there any documentation to acknowledge that there were 
consultations and they approved the provisions of the proposed 
bill? That's what I am trying to get at.
    Mr. Cohen. Oh, well, no, in fact, the CNMI Administration 
does not approve the provisions of the proposed bill and it was 
never on our understanding that the current Administration of 
the CNMI would have a veto right over what was proposed. So, 
we're still obviously in the process and this hearing is part 
of the process of soliciting their views, and by the way we 
provided an advance copy to the Administration's consultants in 
Washington D.C., giving them an opportunity to provide input. 
And I also want to stress that we make strenuous efforts, not 
only to solicit input from the current Administration of the 
CNMI, but we--I spent nine days here in March and I met with 
almost every community group that would be willing to meet with 
me----
    Mr. Faleomavaega. All right, I am sure you've been very 
earnest and diligent in carrying out your responsibilities, Mr. 
Secretary. But what if the consensus coming from the CNMI 
people says ``We don't approve; we don't accept H.R. 3079 the 
way it's currently written.'' What if it comes to that part of 
the process where they strenuously object to the provisions of 
the proposed bill? Where do we go from there?
    Mr. Cohen. Congressman, I think that the views of the CNMI 
must be--the people of the CNMI must be taken into account. And 
obviously, it's up to the Federal Government to decide what the 
Federal Policy is going to be. But I strongly believe that the 
views of the people of the CNMI must be taken into account. Let 
me say, however, that from my extensive conversations with 
groups across the spectrum of the CNMI society, I believe that 
that scenario will not be the case. An overwhelming majority of 
people that I have spoken to in the CNMI either support 
Federalization or they're not vehemently opposed to it.
    Mr. Faleomavaega. Mr. Secretary, I am sorry I didn't mean 
to cut you off, but my time here is my concern. The CNMI sense 
of identity, we're a part of the American family, we understand 
that, but we have this covenant, we have this covenant 
relationship that provided this very unique relationship. I 
recall during the Carter Administration when we were 
negotiating the provisions of the Compact of Free Association 
separate and apart from the Covenant Relationship Negotiation. 
And I recall the attitude that we had with Washington was 
``take it or leave it.'' You know, it wasn't like a mutual, 
friendly process. It was like ``take it or leave it.'' You 
know, you either fish or cut bait. And I am a little concerned 
if in fact that in terms of the process of consultations that 
CNMI has been given their opportunity to express a very 
comprehensive, I suppose, response and wanting to know exactly 
where they stand in relation to the provisions of the Covenant 
document that they signed off on 2/6/1976.
    And I am concerned too, and one more question, Madam Chair, 
if I may, do you consider the Covenant document as your treaty 
relationship between the CNMI and the U.S. or is it just a 
proposal saying, ``Hey, we want to be part of the America, so 
the joint resolution accepts it and from there on, you're part 
of the American family; you're going to eat McDonald's 
hamburgers whether you like it or not''?
    Mr. Cohen. Well, if I can actually try to address both 
parts of your question. The first part of your question 
expresses concern and a concern that I would share that the 
people of the CNMI are not given a chance to provide their 
input into this proposal. I think that would be a very bad 
thing. So let me reiterate that we have made extensive efforts 
to solicit views and accommodate the views in our drafting 
service, not only of the current Administration of the CNMI, 
but of political leaders of all points of view, of different 
community groups. I have met separately with----
    Mr. Faleomavaega. Mr. Secretary, my time is up, but I know, 
Madam Chair--can you point out each point of the provisions 
where it shows that CNMI disagreed as part of this consultation 
that you've taken extensively with the leaders of the people, 
because I am very curious----
    Mr. Cohen. Well, if you're talking about the 
Administration's view, they will be here to express their views 
soon, and the current Administration does have differences of 
opinion with the legislation, and you should hear and consider 
those views thoroughly.
    Mr. Faleomavaega. I am sorry. Thank you, Madam Chair. Thank 
you, Mr. Secretary.
    Mrs. Christensen. You're welcome. I expect that we'll have 
another round if you have further questions. I was also remiss 
in not recognizing the Governor and Lieutenant Governor this 
morning and members of the Senate and the House. I also want to 
recognize any students that are with us from Kagman High School 
that we visited with yesterday and who will be coming in to 
join us. At this time, the Chair recognizes the Ms. Bordallo 
for such questions.
    Ms. Bordallo. Thank you. Thank you very much, Madam Chair. 
Mr. Cohen, I'd like a real clear yes or no on this question, 
and I think Mr. Faleomavaega pointed out a very good point and 
in a way you did clarify that, but I'd like it clear. Does the 
Administration or the Department of the Interior have a formal 
position on H.R. 3079, either Title 1, The Immigration 
Provisions or Title 2, The Authorization for CNMI Delegate? And 
if there isn't a formal or official position on the introduced 
legislation to date, is there one in formulation?
    Mr. Cohen. Well, the answers are as follows: No, for H.R. 
3079, because we have a policy against taking a formal position 
on legislation at a field hearing, and that's just a 
technicality. The answer is, yes, on S. 1634 because we were 
committed to take the position on the hearing in Washington, 
D.C. So, Title 1 is identical to S. 1634 and hence, formally, 
the Administration has taken a position on S. 1634 in favor 
with certain exceptions that are in my written testimony. The 
Administration also was taking a position in favor of extending 
a nonvoting delegate to the CNMI. That's been in my testimony 
in Washington, D.C., that, you know, at a proper hearing. 
However, we formally, and this is just a technicality, I cannot 
say that we've taken a position on H.R. 3079, even though the 
two bills were identical. So that is just a technicality.
    Ms. Bordallo. So, the answer really is, no?
    Mr. Cohen. That's correct.
    Ms. Bordallo. The second question I have pertaining to the 
protection for refugees, I would like to ask you to address, to 
the extent you are able to do so here, your support for the 
provision contained within H.R. 3075 that would effectively 
apply to the CNMI, the 1951 Geneva Convention relating to the 
status of refugees. I recall in the past that there was 
cooperation being pursued between the CNMI and the Federal 
Government in offering protection to guest workers or others 
who face deportation here from the CNMI. Such protections had 
been afforded to aliens in the United States since the U.S. 
exceeded to the 1967 U.N. Protocol on refugees. Can you please 
give us a sense of the level of cooperation that has been 
achieved to date between the CNMI and the Federal Government 
with respect to the protection of refugees in the CNMI and 
speak to the importance of the provisions contained in the bill 
that would extend and apply these important international 
agreements to the CNMI?
    Mr. Cohen. Thank you, Madam Congressman. Let me first 
clarify that the application of those international treaties 
and conventions to the CNMI is not done by virtue of the bill. 
It's done automatically by virtue of the fact that the United 
States is party to those treaties and conventions. So, that is 
a pre-existing condition, that the United States' obligations 
under those treaties includes the obligation to ensure that all 
parts of the United States, including the CNMI, comply with 
those treaties and obligations.
    Since the CNMI has had a separate immigration system, we 
had to create a separate refugee protection system for the CNMI 
in order to make sure that the United States remained in 
compliance with those obligations. The cooperation was good for 
a period of time, when I brought a decision to the attention of 
the previous Administration. We negotiated a memorandum of 
agreement between my office and the Government of the CNMI, and 
we hired the U.S. Department of Homeland Security as the 
protection consultant to help the CNMI develop a refugee 
protection system. We've had concerns recently about the 
willingness of the CNMI to enable the Federal Government to do 
its very necessary oversight functions as to confirm that we, 
the United States, remain in compliance because the CNMI 
remains in compliance. There was an unfortunate exchange of 
letters which reflected a non-cooperative stance by the CNMI. 
Hopefully that is changing. There have been conversations and 
e-mails, I think, between the Attorney General's Office here in 
CNMI and the Department of Homeland Security that are hopeful.
    But if the CNMI Administration is willing to renounce the 
sentiments that were expressed in the letter from the Attorney 
General which basically said--basically compared the Federal 
Government's communications to the CNMI with foreign 
government's attempts to interfere in the refugee protection 
process, then we might have a basis for moving forward. But if 
they're not willing to renounce and retract those statements, 
then we might have a problem resolving these issues.
    Ms. Bordallo. Thank you, Mr. Cohen. I know my time is up, 
but I do have further questions, Madam Chair.
    Mrs. Christensen. Thank you, we will come back to you 
again, Ms. Bordallo, if you have further questions. In the 
Governor's Supplemental Statement, he will claim that the 
Senate version of the CNMI Immigration Bill is far more than an 
immigration law in that it imposes an unprecedented Federal 
guest worker program on the CNMI. According to the Governor, no 
other community in the U.S. has been subjected to such a 
Federal intrusion on local matters. Do you agree that that's a 
valid point?
    Mr. Cohen. Thank you for the question, Madam Chairman. No, 
we do not agree with that. What is extraordinary is that a non-
Federal entity has control over its own immigration, and that 
can work in certain circumstances, but that is a special right. 
So, to say that it's unprecedented, for example, for the 
Federal Government to establish immigration policies, including 
the ability to import labor for a specific small community, it 
isn't really a valid statement because no other small 
communities with only one exception, American Samoa, has the 
right to bring in labor from outside to determine which workers 
from what other countries, and how many will enter. So, 
communities like California or Los Angeles or small towns 
across the U.S. simply don't have this power so that statement 
would be inapplicable.
    On the statement about intrusions to labor law as well as 
immigration law, I would point out that U.S. immigration law 
covers in great detail the qualifications for labor entering 
the United States; how many, their caps. All of this is under 
immigration law and the recent debate on Immigration Reform, 
some were in favor of the guest worker program; that was in the 
context of immigration legislation. So, this is all a part of 
immigration law and that's just a label, it doesn't really 
matter how you label.
    But what the Federal Government is attempting to do in this 
legislation is not to impose a guest worker program on the 
CNMI. The intent is to take the existing guest worker program 
in the CNMI, put it under Federal control, and then phase it 
out, but then compensate by replacing it with a very generous 
provision to provide for ongoing labor needs. For example, 
exemptions from all age caps. So, going forward, the CNMI will, 
under the auspices of established immigration law be able to 
bring in the workers that it needs to run its economy.
    Mrs. Christensen. Thank you. I'll probably ask this one 
other question under this round, but you spent a fair amount of 
time in your testimony on the issue of human trafficking, which 
you said is between 8.8 and 10 times more prevalent per capita 
in the CNMI than in the rest of the U.S., and the Governor says 
that he doesn't agree. So that's a misuse of statistics and 
maybe it's about 6 more times more prevalent. How would you 
respond to that? I think he also feels that you owe him an 
apology.
    Mr. Cohen. Well, with all due respect, and actually in 
those circumstances where I believe we do owe an apology, I am 
very quick to give it. In this case, in this particular 
circumstance, I would suggest that I don't owe the Governor an 
apology this time, maybe for other things in other contexts. I 
think people who are owed an apology, frankly, are the victims 
of human trafficking, the victims that you, Madam Chairwoman, 
and Congresswoman Bordallo visited with yesterday in the 
Federal Ombudsman's Office, and Congressman Faleomavaega would 
have been here with us but his flight didn't arrive until 2:30 
in the morning. We appreciate that you spent the afternoon 
yesterday talking to real people who have addressed these 
problems.
    I have about two pages of notes as to why I strongly 
disagree with the current Administration's statistical or 
numerical analysis that purports to show that other 
performances is much better. We can submit that for the record. 
I think the argument about statistics is really besides the 
point and I'd be happy to drop it if we can just get a clear 
statement from the current Administration. And I think they're 
probably ready to make the statement that human trafficking is 
a very serious issue here in the CNMI. And that's not just this 
Administration saying so. We have Bishop Camacho's, who wrote a 
beautiful pastoral letter about the subject. The Catholic nuns 
of Karidat will say that this is a very serious issue. The 
social workers of Guma' Esperansa say that this is a very 
serious issue. We've heard moving testimony from victims of 
human trafficking saying this is a very serious issue. And of 
course, my Administration says that this is a very serious 
issue. We--the numbers back us up and with the--if the currency 
in my Administration says, ``Yes, we agree this is a very 
serious issue so let's all work together to address it,'' then 
I am happy to say, ``OK. We'll go with your numbers'' and I'll 
drop that argument and then we'll all continue to work together 
to address the problem. And----
    Mrs. Christensen. So, the number of times more prevalent is 
really not the issue. The issue is basically, is there a 
problem or is there not a problem?
    Mr. Cohen. Yeah. And we stand by our numbers and let me 
say, in defense of the current Administration, this problem, it 
didn't start with the current Administration and this current 
Administration has significant victories in the battle against 
human trafficking. But our concern was it attempted to use a 
statistical analysis on their part, which is heavily flawed to 
contradict our statements. We don't mind being contradicted, 
but we're concerned that any interpretation that this is an 
attempt to suggest that we don't have a problem. If that's not 
their intention, then we're all in agreement.
    Mrs. Christensen. OK. So if you feel that theirs are flawed 
and they feel that yours are flawed, that can be set aside if 
everybody agrees that there is a problem.
    Mr. Cohen. And that we'll all work together to address it.
    Mrs. Christensen. OK. I got it. OK. The Chair now 
recognizes Mr. Faleomavaega for five minutes.
    Mr. Faleomavaega. Thank you, Madam Chairwoman. Mr. 
Secretary, I point with interest to page 7 of the proposed 
bill, where it says that the Government of the CNMI shall 
comply with the Convention on Refugees as well as with the 
provisions of the United Nation's Convention on Torture and 
other Cruel, Inhuman or Degraded Treatment or Punishment under 
the New York Act of 1984. I am a little concerned. Why are we 
are picking just on the CNMI and they have to comply with these 
two international conventions? Or the fact that Abu Ghraib and 
Guantanamo Bay is one of the most embarrassing foreign policy 
questions that my own government doesn't even comply with the 
Provisions on Torture and all of this. I am a little confused 
here. Are all other states and territories subject to the same 
requirement that we have to comply with the Refugees 
Convention? I was under the impression that that's already 
under the administrative authority of the United States for all 
territories and states.
    Mr. Cohen. We are----
    Mr. Faleomavaega. Why are we singling out CNMI in this 
instance?
    Mr. Cohen. Thank you Congressman, that's a good question. 
The only reason we're singling out the CNMI on this particular 
question is that CNMI is the only non-Federal jurisdiction 
under U.S. sovereignty that has its own refugee protection 
system. So, we're just reiterating in the statute what is 
already the case, which is, the CNMI and the administration of 
its separate special CNMI-only refugee protection system must 
comply with those treaties and conventions to which the U.S. is 
a party. And the particular context of that provision is, this 
legislation would enable the CNMI to continue to operate its 
separate refugee protection system and, for reasons that I can 
explain at length, that is good for the CNMI. That is an 
accommodation to the CNMI that will help it in its efforts to 
have more flexibility to attract tourism and admit aliens. 
However, if they do so, we're reiterating they have to comply 
with the international treaties.
    Mr. Faleomavaega. In addition to that, the law, the 
proposed bill, gives the Secretary of Homeland Security and the 
Secretary of State discretionary authority. If, in their 
opinion and their judgment, CNMI doesn't comply with the 
Refugee Convention and the Torture Convention, bang. Section 
208 automatically then is triggered into being authorized and 
applied here in the CNMI. Is that a usual policy of how we 
conduct a--how the Immigration and Nationality Act applies to 
other territories and states as well?
    Mr. Cohen. Well, Congressman, there is no usual policy 
because the CNMI is the only jurisdiction within U.S. 
sovereignty that----
    Mr. Faleomavaega. Oh, I understand that. Why do you suppose 
the CNMI is the only jurisdiction that is given this 
discretionary authority in applying or drawing up its own 
immigration laws? Was that because of the Covenant Relationship 
that was developed between CNMI and the U.S.?
    Mr. Cohen. Oh, yes. Under the Covenant, the CNMI was given 
the authority to administer its own immigration system, until 
such time that Congress exercises the authority to take it 
back. But to get back to, I think, an important point that you 
had made in your question, why would the Secretary of Homeland 
Security and the Secretary of the State have the ability to 
apply Section 208 of the Immigration Nationality Act relating 
to asylum to the CNMI if it wasn't--if they weren't satisfied 
with the CNMI's conduct of the refugee protection systems? 
That's because it's the Federal Government's signature on those 
treaties and conventions. The Federal Government is ultimately 
responsible for making sure that we're in compliance, including 
the CNMI, and if the CNMI----
    Mr. Faleomavaega. So, if we're making this happen in the 
CNMI, does this mean that the Convention on Torture doesn't 
apply to other territories like American Samoa or Guam? Do we 
have to go through the statutory requirement that is stated in 
the proposed bill?
    Mr. Cohen. It applies to all--it applies to the United 
States in general, because the other territories, with the 
exception of the American Samoa, do not control their own 
immigration. They don't need special provisions like this. Now, 
in American Samoa, it's in a much lower risk environment, but 
if we have people showing up in American Samoa that are 
applying for asylum----
    Mr. Faleomavaega. Is----
    Mr. Cohen --We have to address that issue as well.
    Mr. Faleomavaega. Is the Covenant Relationship between the 
CNMI and the U.S. a treaty relationship or is it something 
else?
    Mr. Cohen. Well, Congressman, I am going to decline to 
express a legal opinion on that until I'll get legal advice, 
but we could answer that question in writing. What I will say 
is, the CNMI constitutionally, under the U.S. Constitution, is 
considered a territory of the United States, subject to the 
Territories Clause of the Constitution, and as subject to 
plenary authority of the U.S. Government--of the U.S. Congress.
    Mr. Faleomavaega. According to your--yes, I understand. I 
understand that according to your interpretation, but my 
understanding is that CNMI leaders are co-equals when they 
negotiated the provisions of that Covenant Relationship. And in 
my humble opinion, as a layman's understanding, it's a Treaty 
Relationship. And because it is a Treaty Relationship, it is 
far beyond the provisions of the U.S. Constitution. In other 
words, if there is any changes to be done in this Covenant 
Relationship, it's got to be by mutual consent on both parties, 
and not just one party saying, ``You're going to get it whether 
you like it or not.'' Now, I am just--just a layman's view of 
this, am I wrong in taking it on those terms?
    Mr. Cohen. Well, Congressman, what I would point out is 
that this Covenant itself, whether you call it a treaty or a 
contract, whatever----
    Mr. Faleomavaega. Yes. Mr. Secretary, I have to say it is 
very critical that we need to understand whether the Covenant 
is a Treaty Relationship or otherwise, because if it is a 
Treaty Relationship, we've got a very serious problem in our 
hand.
    Mr. Cohen. Well, Congressman, let me respectfully point out 
that however you--and I don't disagree that it's important to 
characterize it properly, we'll get legal advice on that, but 
however you characterize it, the Covenant itself expressly 
provides that the U.S. Congress has the authority to exert--to 
assert control over the CNMI Immigration Systems. So, that's 
not in doubt and that is not a mutual consent provision in the 
Covenant. The Covenant has certain provisions that should only 
be modified by a mutual consent, I believe. This is not one of 
them.
    Mr. Faleomavaega. I am sorry. My time is up. I have a 
hundred more questions I wanted to ask you. [Laughter]
    Mrs. Christensen. The Chair now recognizes Ms. Bordallo for 
her questions.
    Ms. Bordallo. Thank you very much, Madam Chairman. Governor 
Fitial has referenced in his written testimony legislation that 
has been introduced in the House of Representatives--H.R. 
3165--``To amend the Harmonized Tariff Schedule of the United 
States, to provide for more flexible local content requirements 
for products manufactured and assembled in U.S. territories.'' 
Duty-free access to the U.S. Customs Zone and the U.S. market 
for goods from the territories has been one of the economic 
pillars for which the CNMI economy has developed. And this has 
been jeopardized due in part to the liberalization of world 
trade rules and the elimination of quotas with key U.S. trading 
partners. This is a matter of fairness from my perspective. I 
believe that products imported from the U.S. territories should 
be afforded the same and no less preferential treatment as 
afforded to products imported from countries with which the 
United States has entered into a free trade agreement. What are 
your thoughts Mr. Cohen and the Administration? Does the 
Administration support reducing the local content requirements 
for duty-free importation from 50 to 30 percent? Why and why 
not?
    Mr. Cohen. Thank you for the question, Madam Congresswoman. 
The Administration does not have a position on that particular 
proposal. I will say that when the proposal came around 
earlier, when it was proposed in the last Congress, my office 
worked very actively within the Administration to try to get a 
position formulated and at the end of the day the 
Administration did not take the position but we recognize the 
importance of that issue to the economy of the Commonwealth.
    One question I would have in any attempt to formulate 
Administration position on this, again, would be in light of 
the fact that the garment industry is drastically downsized 
even from the end of last year when this proposal was being 
considered to now. We would in the Administration want to have 
a better understanding of how that amendment to General Note 3A 
would be used. What is the economic vision to utilize that and 
having an understanding of that would enable us in the Interior 
then to take that to our colleagues in the Federal Government 
to see if we could get an Administration position.
    Ms. Bordallo. I'll follow-up on that. It seems to me that 
some very, very important decisions for the U.S. territories, 
in particular the CNMI, are being discussed by the 
Administration but yet the Administration has no official 
position and has never requested officially Members of 
Congress. And I just want to point that out.
    The next question I have for you, Mr. Cohen, is in visiting 
with some of the leaders here in the CNMI in the last couple of 
days and at least to some of the written testimony that I have 
written ``far more economic studies should be made before 
action should be taken to implement any proposed reforms to the 
immigration, the border security or labor systems.'' Do you 
believe Congress and the Administration have sufficient and 
reliable data to act responsibly on the proposals to H.R. 3079 
at this time? And how do you respond to the calls for more 
studies before adopting one proposal over another? Do you 
believe any additional study should be prudent or should be 
pursued at this time? And if so, in what areas would we be best 
served to have more data?
    Mr. Cohen. Thank you, Madam Congresswoman. We believe that 
we need more data in almost every area you can imagine because 
the economic statistics and social statistics available in the 
CNMI are not adequate, and it's really the fault of the lack of 
resources. It's nobody's fault, but there are perhaps 
insufficient resources devoted to the task. However, we do not 
believe that the need for additional studies, and we believe 
that additional information on all of these factors would be 
extremely helpful, but we do not believe that the need for 
additional studies requires a delay in acting on S. 1634, which 
the Administration has endorsed because S. 1634--and of course 
Title 1 is of this bill----
    Ms. Bordallo. I know that. Yeah.
    Mr. Cohen. S. 1634 provides a flexible framework to 
establish these policies and most likely provides really the 
outer bounds of flexibility that the Federal Government would 
be willing to live, with given the need to address its homeland 
security and national security concerns. But a lot of the 
specifics, for example, what would be the regulations that will 
govern the 10-year phase out guest worker program, which by the 
way can be extended indefinitely in 5-year increments. That's 
plenty of flexibility. Within that, as the studies become 
completed, the relevant agencies can look at those studies and 
promulgate regulations that account for the CNMI's needs and 
the statutes, legislation specifically says ``You are supposed 
to take into account the CNMI's fragile economy, provide them 
as much flexibility as possible.'' On the tourism side, the 
legislation provides flexibility to choose additional countries 
for visa waivers. It creates a presumption that any country 
that has sent tourists in the CNMI within the last five years 
including China, Russia, Taiwan, and Japan and the others, it 
creates a presumption that those countries will get visa 
waivers and that presumption can be defeated if the Secretary 
of Homeland Security gets information that says ``You know, 
this wouldn't be a good idea.'' It also gives the Secretary of 
Homeland Security the flexibility to create, in consultation 
with the Government of the CNMI, to create new categories of 
special CNMI visas to maybe let in retirees, investors, 
students, if it's not covered by immigration laws. So, the 
framework is in place. You don't need additional studies to act 
on this bill, and delaying acting on this bill will create a 
longer period of uncertainty which would have a chilling effect 
on investment. It will delay the start-time and end-time for 
the warm-up period. But the studies will be very valuable as we 
fill in the details for regulation to make sure that this 
policy, the statute, and the regulations taken together work 
well for the needs of the CNMI.
    Ms. Bordallo. Madam Chair, my time is up. But I do have an 
additional question on the next round.
    Mrs. Christensen. Do you have another question?
    Mr. Faleomavaega. Madam Chair, I know that you have a 
hundred more witnesses with you----
    Mrs. Christensen. Yes.
    Mr. Faleomavaega. I do want to say--if I could just say a 
real brief statement again to thank Secretary Cohen for taking 
the time to come and participate in the hearing. I just want to 
say for the record, Madam Chair, the mood in Washington, D.C. 
has been one of outright confrontation. Very partisan 
politicking on the part of both national parties in the 
leadership. The CNMI and American Samoa are caught between 
these very partisan forces. And my concern is that, to what 
degree are the Insular areas allowed to do their own thing 
locally without being imposed upon, I suppose, in this--at some 
point that we become Federalized? I suppose that's the--I think 
it was someone who once said the ``Golden Rule'' is that--the 
way it's applied, ``He who has the gold makes the rule.'' No 
such thing as helping each other out. But I am very concerned, 
Madam Chair. And I say this specifically on the minimum wage 
issue that has caught both the CNMI and American Samoa in a 
very, very, negative way where it's really, really unfortunate 
that we find ourselves in this situation.
    Now, every time something happens to CNMI, American Samoa 
is dragged into it. [Laughter] Or if something happens to 
American Samoa, CNMI is going to be dragged into it. I envy 
Guam, they never seem to have any problems at all in this kind 
of situations. [Laughter]
    I do want to say, Madam Chair. I hope this will not be the 
last of the times that in your leadership that you bring our 
Subcommittee here to meet with the people, because sometimes 
Washington gets into a deaf ear, and really understanding and 
appreciating what are some of the problems associated with the 
issues affecting the lives and the people, the good people here 
of CNMI, as an example. I just wanted to say that, although I 
wanted to ask Secretary Cohen a couple of more questions, but I 
am going to forgo that for now. I'll catch you in Washington, 
Mr. Secretary. Thank you very much, Madam Chair. And thank you 
Mr. Secretary.
    Mrs. Christensen. Ms. Bordallo?
    Ms. Bordallo. Thank you very much, Madam Chairwoman. I 
would like to straighten out the record. Congressman 
Faleomavaega, Guam has problems. [Laughter] And I try to take 
care of Guam and the CNMI, until such time that you have a 
voting Delegate. But, Mr. Cohen, can you please address for us 
the considerations that were given in the drafting process by 
the Administration internally regarding the Visa Waiver Program 
provisions? How did the Departments of State, Homeland Security 
and Interior work together to develop the language presented to 
the Senate that is also contained in H.R. 3079 with respect to 
the establishment of a CNMI-only Visa Waiver Program? What are 
the Administration's views and thoughts about appropriate 
integration of such program with the established Guam Only 
Program?
    Mr. Faleomavaega. And American Samoa.
    Ms. Bordallo. And American Samoa. And do you support 
increasing the authorized stay period under the Guam program to 
more closely mirror what is provided for in the law for the 
U.S. Visa Waiver Program, and that is a 90-day period? And, was 
extension of the authorized stay period for the Guam program 
explored in this discussion and in the drafting process that 
the Administration undertook to respond to the Senate request?
    Mr. Cohen. Thank you for the question, Madam Congresswoman. 
In drafting the provision, I guess our guiding light--we had a 
few guideposts. The first was the Administration's testimony 
before the Senate that set forth the objective of providing as 
much flexibility as possible for the CNMI to strengthen its 
economy, including tourism, and we use as a model the Guam Visa 
Waiver Program, and we looked at the opportunity for extending 
it. We consulted in-house about sensitivities that may exist 
for homeland security and national security issues, because we 
wanted to try to present a proposal that would have a 
reasonable chance of acceptance by the Administration once we 
have submitted it. So, we looked at all those things. We 
considered the integration with Guam and this legislation, as 
you know, does have some degree of integration with Guam. It's 
not full integration, and it enables there to be shared 
countries--that would be the general rule--there'd be shared 
countries where there'd be a Guam-only visa waiver and a CNMI-
only visa waiver, but they would have them in common and a 
traveler could spend 15 days in Guam, 15 days in the CNMI or 30 
days total. It also provides some flexibility though, for 
example, if we have greater sensitivity to people from certain 
countries traveling without a visa to Guam, perhaps because of 
the military facilities--that we could still approve visa 
waivers for the CNMI, but not approve it for Guam or vice 
versa. We might have some sensitivities that go in the other 
direction. So, there is some flexibility to do that. We have 
been discussing, behind the scenes extensively, how we can make 
Guam more accessible to the travelers that it needs and the 
CNMI more accessible to the travelers that it needs.
    As you know, I am very heavily involved in the 
Administration's efforts to coordinate for the military buildup 
on Guam. And that's an issue that is front and center in our 
deliberations together with representatives from Guam. And as 
everything--you've made, I think, an important comment before 
that we have discussions within our Administration but 
sometimes we don't come out with a position. That's symptomatic 
of the phenomenon that Congressman Faleomavaega had pointed out 
is that, whenever we at the Interior bring issues on behalf of 
the territories to our colleagues in the Administration, 
different people and different agencies they have different 
concerns, and sometimes we win and sometimes we don't. Same 
thing in Congress. All of you are strong advocates for the 
Insular areas and sometimes you get your colleagues to go along 
with you and sometimes you don't. So, we face the same issues 
in the Executive Branch. But all of the issues that you raised 
are issues that we have been addressing in great detail on our 
conversations and we think we're getting traction on some of 
them. So, we'll keep working as you know as well.
    Ms. Bordallo. Well, since you represent an island yourself, 
Mr. Cohen, I hope you're in there really fighting for us.
    Mr. Cohen. Oh, believe me, I have the scars to prove it. 
[Laughter]
    Ms. Bordallo. Thank you very much for your answers to our 
questions this morning and I yield back, Madam Chair.
    Mrs. Christensen. Thank you and, since Congressman 
Faleomavaega raised that, we do have plans to hold some 
hearings on the minimum wage and, as you know, Chairman Miller 
has agreed to have a hearing after the GAO report comes out.
    Mr. Faleomavaega. Will you have a hearing here, Madam 
Chair, on minimum wage?
    Mrs. Christensen. Well, I know that we will be visiting 
American Samoa at some point, so we'll see where that leads us. 
And Mr. Cohen, just briefly, outline the considerable amount of 
consultation that has taken place leading up to this point. Can 
you assure us that that same level of consultation will 
continue from here on in?
    Mr. Cohen. Absolutely, Madam Chairwoman, and of course now 
that the legislation has been introduced, it is now a--it's a 
bill of Congress and by your presence here today and the--the 
sense of consultation that your Committee and staff have had 
with the representatives and people in the CNMI, that is just 
as important.
    Mrs. Christensen. And the consultation that took place 
leading up to this point did result in some changes as the bill 
was being drafted, did it not?
    Mr. Cohen. Yeah, it certainly did and it resulted in our 
best effort to provide a drafting service that was as flexible 
and accommodating of the legitimate needs of CNMI to have a 
properly staffed workforce and be accessible to tourists and 
others as we can possibly do within the confines of our other 
concerns.
    Mrs. Christensen. Thank you. Thank you, Mr. Cohen, for your 
testimony and the answers to our questions. We are going to 
have to take a break because of some camera issues that need to 
be taken care of between this panel and the next panel. So, 
you're dismissed and we'll take a five-minute break.
    Mr. Faleomavaega. Madam Chairwoman, I wonder if it's at all 
possible, Madam Chair, that Secretary Cohen could stick around 
and maybe he might be able to respond to maybe some of the 
questions or things that we may be anticipating and I think it 
would be helpful for the record to have his input as well on 
the process, if that's possible to do it.
    Mrs. Christensen. Well, we would be guided by time because 
we are on the time constraints, but we welcome you to stay and 
whatever we cannot get to you today, we will be submitting to 
you in writing and expect your responses in writing back to us 
on issues that may arise and things that go through the panel.
    Mr. Faleomavaega. Thank you, Madam Chair.
    Mrs. Christensen. So we'll take a five-minute break and 
we'll call up the next panel. Thank you.
    (Off the record from 10:24 a.m. To 10:30 a.m.)
    Mrs. Christensen. The Committee will come back to order. I 
trust that the audio problem was fixed and that the people who 
are outside will be able to hear us. And I'd now like to 
recognize the second panel of witnesses. The Honorable Benigno 
Fitial, Governor of the Commonwealth of the Northern Mariana 
Islands, The Honorable Oscar M. Babauta, Speaker of the CNMI 
House of Representatives, The Honorable Pete A. Tenorio, 
Resident Representative of the CNMI, and The Honorable Pete P. 
Reyes, Vice President of the Senate of the CNMI.
    Mrs. Christensen. And the Chair now recognizes Governor 
Fitial to testify for five minutes.

     STATEMENT OF THE HONORABLE BENIGNO FITIAL, GOVERNOR, 
          COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS

    Governor Fitial. Good morning, Madam Chairwoman and members 
of the Subcommittee. This is a great occasion for us. This is 
the first time a Congressional Subcommittee has had an official 
hearing here in the Commonwealth. We are proud to be U.S. 
Citizens. In that tradition, I will not mince words with you, I 
wish you were here to examine firsthand the serious state of 
the Commonwealth economy. I wish you were here in Saipan to 
consider how best the Federal Government might move quickly to 
address the suffering of my people. But you are here for 
another purpose; to hear testimony about House Bill 3079.
    You are being urged to act immediately on the Bill because 
of an alleged law enforcement crisis in the Commonwealth. This 
is simply false. I have described in my statement our record in 
enforcing our labor immigration laws, our effective prosecution 
of criminal activity, and our cooperation with Federal Law 
Enforcement officials from various agencies. Claims to the 
contrary are not based on fact or probably the statistics and 
certainly do not support any urgency justifying enactment of 
this legislation. I am opposed to the bill prepared by the 
Interior and supported by Congressional staff because it is 
harmful to our people, harmful to our economy, and not 
necessary. The Interior officials may label the bill as 
flexible Federalization. I can think of many other adjectives 
that might be used, but not one of them can express the 
anticipated burdens and frustrations when the heavy hands of a 
five-fingered bureaucracy reach this small island community. In 
my written statement, I summarized the current state of the 
CNMI economy and our plan for recovery. I reported on some 
recent favorable developments with respect to new investment in 
the CNMI, but I emphasized that there is no quick fix for the 
CNMI's current problems, which can only be described as a 
hopeless economic depression. My assessment of the economy is 
shared by witnesses from the business community who have 
submitted statements and would appear here today from the 
Chamber of Commerce and the Hotel Association, and we know that 
this bill will seriously damage the CNMI economy. We know it 
will generate uncertainty throughout the economy.
    I know from personal conversations with current and 
potential investors that it will cause them to reconsider 
investment in the Commonwealth. I have spent most of my time 
away from the CNMI in Japan, Korea, China trying to introduce 
investment and committing their funds and energy to projects in 
the CNMI. I know they value the fact that the Commonwealth is 
part of the United States with an established legal system, but 
I also know that they value special economic tools provided to 
the Commonwealth under the Covenant and our ability to exercise 
meaningful self-government over local affairs.
    What often is forgotten in this debate about 
Federalization, flexible or otherwise, is that we, the 
Commonwealth, have already been there. Most of us lived for 
decades under the Trust Territory of the Pacific Islands. I 
have worked under the Trust Territory for more than 10 years. 
We became familiar with the way trust territory officials 
commissioned by Interior Department govern the peoples of 
Micronesia. We suffered from their frequent rotation in office, 
their lack of knowledge of local conditions, their lack of 
funding, their inability to get timely decisions from 
Washington, their discriminatory dual-paying system and their 
disdain for the local people. Anyone who lived under the Trust 
Territory and today supports Federalization provides further 
evidence of our human impulse to allow hope to triumph over 
experience.
    The Federal Government's performance under the Covenant has 
been mixed at best. In recent years, the response of the 
Interior Department to our economic situation has been very 
disappointing. Time and time again we have been reminded that 
the Interior does not have and will not give funds to assist 
the Commonwealth in dealing with economic forces beyond its 
control. When the Commonwealth urged the reimbursement of some 
$200 million of cost incurred in the past 20 years in 
supporting Micronesians immigrating to our community under 
arrangements negotiated by the Interior, our plea was rejected 
by an Interior official stating that the Federal Government did 
not have any legally binding contractual obligation to 
reimburse the Commonwealth for this cost.
    The fact is, we do have a contract. Section 701 of the 
Covenant obligates the Federal Government to assist the 
Government of the Northern Mariana Islands in its efforts to 
achieve a progressively higher standard of living for its 
people as part of the American economic community and to 
develop the economic resources to meet the financial 
responsibilities of local self-government. My budget for Fiscal 
Year 2008 will be lower than our budget was in 1994. In fact, 
we are stalled by economic conditions here in Pacific Region 
that make a progressively high standard of living for 
Commonwealth citizens an increasingly distant hope.
    My opposition to H.R. 3079 is supported by the vast 
majority of all the elected leaders in the CNMI. Every past 
Governor who was faced with comparable Federal legislation 
opposed it for reasons similar to mine, irrespective of 
political affiliation. Of even greater importance is the 
concern of indigenous people in the Commonwealth.
    I am submitting today to the Subcommittee a short statement 
of Mr. Vicente N. Santos, the President of the Marianas 
District Legislature from its commission in 1963 to the 
beginning of the CNMI Government under its own constitution. He 
was the Vice Chairman of the Marianas Political Status 
Commission, which represented the Northern Marianas people in 
their negotiations with the United States that led to the 
Covenant. Mr. Santos is truly a founding father. No one person 
worked so hard or so long as he did to pursue the aspiration of 
his people to achieve U.S. citizenship and a political 
relationship with the Federal Government that met the needs of 
his community. Mr. Santos speaks for most of the Chamorro and 
Carolinian citizens in opposing this legislation.
    These citizens are concerned about many aspects of the bill 
but especially the unprecedented provision giving guest workers 
in the CNMI the right to become permanent legal residents here 
or elsewhere in the United States. He and other local citizens 
worry about the impact of this provision on the CNMI community. 
No one knows exactly how this would operate, but the 
possibility clearly exists that such an option would permit 
thousands of guest workers to stay in the Commonwealth and to 
bring in their relatives under the new status granted by this 
bill.
    We would then have advanced your burden, perhaps even 
exceeding the $200 million we have already spent because the 
Interior Department opened our doors 20 years ago to those 
otherwise ineligible to come to the United States. This 
particular provision of the bill is directly contrary to 
certain factions under U.S. immigration law, where persons who 
are admitted as temporary guest workers must meet one set of 
criteria and people who are admitted to the United States as 
permanent residents are required to get an entirely different 
set of criteria.
    This bill allows alien workers who are admitted only as 
guest workers to become permanent legal residents and exempts 
them from the requirements they would have to meet in the 
United States to achieve their status of permanent legal 
resident.
    We believe that this Subcommittee should not act on H.R. 
3079 until the Government Accountability Office has completed 
the study requested by members of both Houses of Congress. Our 
reasons for these are very straightforward. First, we believe 
that this bill was predicated on outdated facts that present a 
seriously inaccurate picture of today's Commonwealth. In my 
written statement, I gave some examples of the vast differences 
between the CNMI that existed when Congress last examined this 
issue in 1998 and 1999 and the CNMI, a decade later, its 
population, its workforce and its economy.
    Second, it is clear that the drafters of this legislation 
do not have the expertise regarding the U.S. immigration laws 
or even the written entry topic models necessary to deal with 
these very difficult and important issues.
    Third, the only way to assess fairly the objections that we 
have presented regarding this bill is to have them analyzed by 
impartial professionals. Our concerns with respect to the 
impact of this bill on the Commonwealth economy and community 
are not privileged nor are they raised as have been charged 
only to the reconsideration of the bill. What is at stake here 
is the future of the Commonwealth over the next 20 years. Its 
people deserve to have legislation of its importance evaluated 
in line with existing facts and informed projections of the 
future before it is adopted by this Subcommittee.
    The members of this Subcommittee might well ask the 
supporters of this bill, ``Now, tell me again, what's the 
emergency here that requires us to act before the GAO study is 
completed?'' I have repeatedly stated that the Commonwealth 
does not oppose legislation aimed at improving the security of 
the CNMI borders. We believe that the issue on border security 
can and should be separated from the intrusive provisions of 
H.R. 3079.
    I am submitting today, Madam Chairwoman and members of the 
Committee, a proposed bill for your consideration. It is 
entitled ``Enhanced Border Control of the Commonwealth of the 
Northern Mariana Islands'' and it does the following: First, it 
retains the Asylum Provisions of H.R. 3079.
    Second, it directs the Secretary of the Department of 
Homeland Security, in consultation with the Government of the 
Commonwealth, to prepare a plan for supporting the 
Commonwealth's immigration laws, the reuse of resources 
available to Federal officials and assignment of appropriate 
department personnel to assist the Commonwealth.
    Third, it specifically directs that all persons entering 
the Commonwealth shall be screened upon entering into the 
Commonwealth by Department of Homeland Security personnel using 
the national databases and other informational resources not 
available to the Commonwealth.
    Fourth, it directs the Department Personnel, in sufficient 
numbers, be assigned to designated Saipan and Tinian entry 
points where they can use the classified databases and other 
resources to assist local immigration officials.
    Fifth, it requires the Department to provide the Coast 
Guard station in the CNMI with the necessary resources 
including at least one boat that meets Coast Guard standards to 
implement an effective program of monitoring the borders of the 
14 islands in the CNMI.
    Sixth, it directs the Governor of the CNMI to advise the 
Department of Homeland Security 30 days in advance of 
implementing any new Visa Waiver Program designed to support 
its visitor or educational industries or other economic 
development projects in the CNMI.
    We believe this legislation provides the improved border 
security measures desired by both the Federal Government and 
the CNMI. It accomplishes this objective at far less cost to 
the taxpayers than would be entailed by the complete type of 
Federalization proposed in H.R. 3079. It lists Commonwealth 
officials responsible for making the critical decisions with 
respect to economic development and managing the work force 
necessarily to achieve the level of development desired by the 
community. We ask the Subcommittee to consider our proposal 
carefully. Thank you, Madam Chairman.
    [The prepared statement of Governor Fitial follows:]

     Statement of The Honorable Benigno R. Fitial, Governor of the 
              Commonwealth of the Northern Mariana Islands

    I am Benigno R. Fitial, the Governor of the Commonwealth of the 
Northern Mariana Islands, and I represent the government of this 
territory of the United States, and the people who elected me into 
public office. I appear before you today to testify on H.R.3079, 
legislation to amend the Joint Resolution Approving a Covenant to 
Establish a Commonwealth of the Northern Marianas Islands.
    Hafa Adai, Madame Chairwoman and Members of the Committee. Welcome 
to the Commonwealth of the Northern Mariana Islands. We appreciate your 
time and personal commitment in visiting our islands.
    Before I turn to H.R. 3079, I would like to thank Representative 
Flake and Delegate Fortuno for their introduction of H.R.3165, amending 
Headnote 3A. Enactment of this legislation would greatly assist the 
Commonwealth in its efforts to preserve and develop the diversified 
economy required to meet the needs of its citizens.
    H.R. 3079 is virtually identical to Senate Bill 1634 with respect 
to its immigration and labor provisions. Lt. Governor Villagomez and I 
have each testified before the Senate Committee on Energy and Natural 
Resources this year and set forth our reasons for opposing S.1634. We 
have supplemented our testimony with extensive materials and met with 
Members of both Houses and their staffs to discuss these proposals. Let 
me summarize some of our main concerns.
The Need for a GAO Study
    We have consistently urged the need for a careful and professional 
study of the Commonwealth before enactment of legislation such as 
H.R.3079. We are pleased that Members of Congress have requested the 
Government Accountability Office to undertake this task. Such a study 
would necessarily focus on two objectives of critical importance to 
consideration of H.R.3079: (1) to provide current and reliable 
information about the Commonwealth as it exists today--its economy, 
workforce, changing population, and labor and immigration programs; and 
(2) to assess the economic, political, and social consequences of 
preempting the CNMI immigration and labor laws and substituting a 
federally managed guest work program in the Commonwealth. We do not 
understand why the Interior Department and other supporters of this 
legislation are unwilling to let GAO complete its work before urging 
Members of Congress to enact legislation that will damage the 
Commonwealth economy and its U.S. citizens.
The Commonwealth in 2007
    Congress last considered these issues during hearings in 1998 and 
1999, which resulted in a bill passed by the Senate in 2000. The most 
frequently cited facts supporting this legislation were a 1997 report 
from the U.S. Commission on Immigration Reform, a 1997 report from the 
Department of the Interior, a 1998 report from the Immigration and 
Naturalization Service, 1999 data on wages, a 1999 statement by the INS 
General Counsel, and 2000 data on unemployment. We are concerned that 
these very same facts--now long out of date--are still being urged on 
the Members of Congress to justify legislation such as H.R.3079. We 
believe this is unfair. It is why we emphasize the need for a GAO study 
before Congress acts. Let me give you a few examples.
      The two-tiered economic model that prompted the Senate to 
act in 2000 no longer exists in the Northern Marianas. We have 
substantially reduced our reliance on alien workers. With the closures 
of most apparel factories and the economic decline over the past two 
years, the number of alien workers has fallen from its peak of about 
30,000 a few years ago. We expect the figure to be approximately 20,000 
by the end of this year, and decrease further to about 15,000 in 2008.
      The old allegation that the ``bloated'' CNMI Government 
is an employer of last resort for local residents also fails to 
acknowledge today's facts of life. With a recent ten percent reduction 
in government payrolls--and the likely need for more reductions in the 
next year--we are compelled to work harder to train and place our U.S. 
citizens in the private sector. I have insisted on more rigorous 
enforcement of our current labor laws to achieve this objective. Our 
legislature is currently considering a new comprehensive labor law, 
with several provisions aimed at increasing the training of local 
residents so that they can replace alien workers in the private sector.
      Contrary to past allegations, we have an effective and 
fair system for handling complaints by alien workers. My Administration 
has eliminated a backlog of 3,400 pending labor cases that I inherited 
from my predecessors. In almost all these cases, the worker filed the 
case in order to stay in the Commonwealth beyond the time legally 
permitted under her or his entrance visa. They did so because the work 
environment in the CNMI and the earning potential are much more 
favorable than in their home country. The statistics show that there 
were relatively few cases of wage disputes--far lower than the 
comparable statistics in most States--and there were only two cases 
involving claims of on-the-job injuries.
      New procedures at our Department of Labor are designed to 
prevent any new backlog from developing. The Department's Hearing 
Office has dramatically increased the number of hearings and the dollar 
amounts awarded and collected. Increased use of mediation supervised by 
a hearing officer resulted in the resolution through mediation of more 
than 50% of the cases filed in 2006.
      We have achieved the repatriation of several thousand 
alien workers. The closure of the 3,400 backlog cases in many instances 
eliminated the basis on which the alien worker was remaining in the 
CNMI. The Department's efficient handling of the apparel factory 
closures also prompted the voluntary repatriation of hundreds of 
workers, as did the publication by the Department of its first ``no 
hire'' list early in 2007. Further efforts are underway to identify, 
and deport if necessary, those alien workers no longer entitled to 
remain in the CNMI.
Commonwealth Control of Immigration
    Commonwealth immigration laws and regulations control the entry of 
aliens into the CNMI in a manner consistent with the intent and 
policies of the federal immigration system. This Administration in 2006 
appointed Melvin Grey, a man with 29 years of experience with the U.S. 
immigration system, to serve as Director of Immigration. (I invite you 
to meet Mr. Grey and his staff during your visit to Saipan.)
    The Commonwealth's commitment and institutional ability to maintain 
an effective system of immigration control is evidenced by its 
implementation of a computerized arrival and departure tracking system. 
Financed by the federal government, the Border Management System has 
been fully operational since 2003, with the entry and departure of each 
traveler recorded. The Commonwealth also operates the Labor and 
Immigration Identification System, which records the immigration entry 
permits to the various classes of immigrants entering the CNMI. We are 
currently reevaluating these computerized systems to determine whether 
their components should be updated or replaced to reflect the advances 
in technology over the past decade. Even within their limitations, 
however, these systems give local immigration officials controls that 
their federal counterparts do not have.
    The Commonwealth administers a visa waiver system that is fully 
consistent with the federal system and, in some respects, more 
stringent. For example, the Commonwealth excludes some countries, such 
as Indonesia and Malaysia, because of security risks, document 
availability risks, and document fraud risks, even though their 
citizens are permitted entry into Guam. In contrast with federal 
immigration officials, CNMI officials have relatively few travel and 
identity documents to process for compliance. With very few exceptions, 
all travelers to the CNMI, regardless of citizenship, are required to 
present a passport for entering and departing the CNMI. Electronic 
passport readers capture the significant data from the passports in a 
secure electronic database.
    In supporting federal legislation such as H.R. 3079, the Interior 
Department emphasizes the screening process used by federal consular 
officers abroad and suggests that the CNMI procedures are ineffective 
in comparison. We disagree. The CNMI Visitor Program requires a sponsor 
for most aliens seeking admission to the Commonwealth. The sponsor must 
supply documentation identifying the visitor, the intent of the visit, 
contact information for the alien and the sponsor while the visitor is 
in the CNMI, and an affidavit of support. In this affidavit, the 
sponsor must promise to support the visitor if necessary, that the 
visitor will not become a charge of the community, and that the sponsor 
will reimburse the CNMI for all expenses incurred as a result of the 
visitor becoming a deportable alien, including detection, detainment, 
prosecution, and repatriation. Some exceptions or waivers to these 
sponsorship requirements are available on a very restrictive basis, 
such as for nurses and student nurses coming to the CNMI to take the 
National Collegiate Licensure Examination.
    The Division of Immigration allows some selected travel agencies to 
gather information regarding prospective visitors and submit the 
completed applications to the Division for its consideration. Each of 
these agencies, however, has posted a $500,000 bond which is subject to 
forfeiture in the event of a breach of the operating agreement between 
the CNMI and the travel agency or tour operator. These procedures have 
been used effectively in connection with charter flights to the CNMI 
from China and Russia--critical new markets for the CNMI visitor 
industry. More effective screening procedures have produced a 
significant decline in the number of exclusions in recent years. From a 
total of 74 exclusions in calendar year 2001, the figure has fallen to 
only seven in 2006.
    The Commonwealth's law enforcement efforts over the past several 
years show many successful prosecutions and a strong record of 
cooperation with federal law enforcement agencies. These prosecutions 
have involved alien smuggling, international firearms trafficking, 
employment of illegal aliens, prostitution, and various forms of 
document fraud. The CNMI assisted federal immigration officials in 
processing shiploads of smuggled aliens into Guam that the federal 
officials were unable to address.
    In light of this record, we were disappointed by the recent 
allegation by the Interior Department before the Senate Committee that 
``human trafficking remains far more prevalent in the CNMI than it is 
in the rest of the U.S.'' Upon examination, however, it became clear 
that Interior's conclusion resulted from a very basic misuse of 
statistics. To support its indictment of the Commonwealth, Interior 
compared the number of trafficking incidents in the CNMI and the United 
States with the number of residents in each of the two areas (about 
70,000 for the CNMI and 300 million for the U.S.). The proper 
comparisons to be made are between the number of victims in the U.S. 
and the CNMI and the respective number of entrants into each 
jurisdiction annually. In recent years the CNMI has had about 450,000 
entrants annually and the United States in 2005 had 33,675,608 
entrants--based on data published by the Department of Homeland 
Security and GAO. Using these statistics, it appears that the CNMI had 
one trafficking offense for each 12,500 entrants, whereas the U.S. had 
one trafficking offense for each 1,924 entrants. Contrary to Interior's 
allegation, in fact the U.S. has a rate of trafficking incidents six 
and one-half times the CNMI figure. What is troubling about Interior's 
contention is not that it is so wrong, but that Interior feels 
compelled to present such incorrect data to Congress in order to 
persuade the Members to enact legislation before they have a objective 
report of the relevant facts from GAO.
    Interior's recently expressed concerns about the Commonwealth's 
administration of its refugee protection program are similarly 
overstated. The Commonwealth recognizes the international obligations 
of the United States under the relevant treaties. We realize that the 
Department of Homeland officials are entitled to monitor and protect 
the integrity of our refugee protection program. Under my 
Administration we have followed the same policies and procedures under 
the Memorandum of Agreement with the U.S. Citizenship and Immigration 
Services (USCIS) as was done by the prior Administration. We believe 
the system has worked well over the past few years, during which a 
total of 32 refugee cases were initiated--two in 2004, 13 in 2005, 14 
in 2006, and three to date in 2007. I am unaware of any serious 
differences of opinion between CNMI and USCIS officials that developed 
during this period regarding the administration of the program. I 
understand that the Attorney General is consulting with USCIS officials 
regarding the assistance that USCIS has offered to provide to the CNMI. 
I am confident that these current discussions will produce a mutually 
satisfactory accommodation.
The CNMI Economy and the Path to Recovery
    This Committee is generally aware of the economic circumstances 
that have adversely affected the Commonwealth over the past several 
years. (Attachment 1 to this testimony sets forth the details 
documenting the extent of this depression and its impact on government 
revenues and our budget.) Let me touch on some of the main points:
      Apparel Industry: The number of apparel factories has 
declined from 34 to 15 ``with additional closures anticipated later 
this year or early next year. The number of alien workers in apparel 
manufacturing has declined from 16,000 to 6,000. The value of apparel 
sales has declined from $1.06 billion in 1999 to $489 million in 2006. 
The taxes and fees paid by the apparel industry to the CNMI fell from 
$80 million in 2001 to an expected $30 million in 2007.
      Visitor Industry: Visitor arrivals are down 40% since 
1996. The causes were obvious: the Asian financial crisis (1997), 9/11 
attack, SARS, and increased fuel costs. The discontinuation of flights 
to Saipan by JAL and Continental in 2005-2006 was a serious blow to our 
most important tourist market--Japan. The decline in arrivals has led 
to the closure of hotels and tourist-oriented businesses.
      Government revenues have declined from a peak of $248 
million in 1997 to an estimated $163 million in 2007--a decline of 
about 34%.
      Increased unemployment
      Dozens of closed businesses in the CNMI
    The Commonwealth does have a program for recovering from this 
depression. In my State of the Commonwealth speech last April, I 
emphasized five major points: (1) continued effective law enforcement; 
(2) creating new work opportunities for our citizen labor force; (3) 
improved utility operations and service; (4) expansion of the base for 
our visitor industry; and (5) continued efforts to secure new 
investment. This overall plan has the endorsement of both the 
Legislature and the private sector. We have made some significant 
progress towards achieving these objectives.
      We have a revised 2007 budget that reflects our declining 
revenues, protects essential public services, and does not add to the 
deficit that we inherited.
      We have reduced government employment, enforced an 
austerity program, and are ready to implement a reduction in force if 
that becomes necessary.
      To deal with the need to increase airline seat capacity 
for the CNMI, we have obtained a major increase in flights from Korea 
that began last May, some short-term commitments from Continental for 
this summer, increased charter flights from China, and a substantial 
commitment by Northwest for renewal of flights from Osaka beginning in 
December 2007. I am personally engaged in discussions with Japanese, 
Chinese, and Korean officials and airline executives regarding our need 
for increased flights from those countries.
      As the apparel manufacturing business has declined, we 
are having some success in attracting different kinds of new 
industries--financial services companies and educational institutions 
offering English-language training and other courses primarily for 
foreign students.
      We have attracted major new investments from Japanese 
companies (Sumitomo and NTT DoCoMo Inc.) and Korean companies. Kumho 
Asiana, the parent of Asiana Airlines, has purchased one of our golf 
courses and is committed to major renovations and improvements 
involving several hundred million dollars. Last month, I attended the 
groundbreaking ceremony at the future site of a $300 million hotel and 
villa complex on Saipan undertaken by the KSA Group of Korea--the first 
new hotel on Saipan in many years. These were two of the many projects 
described in my State of the Commonwealth address--most of them 
scheduled to begin within the next 6-12 months.
    Let me state the obvious: there is no quick fix for the 
Commonwealth's current problems. Because of the delay in implementing 
new airline commitments and the need for additional such commitments, 
we are unlikely to see any substantial increase in visitor arrivals for 
about 18 months. The benefits of the recent--and scheduled--investments 
in hotels and other tourist attractions will also take time to develop. 
Although the construction activity on such projects produces some 
needed stimulus to the economy, substantial increase in revenues for 
both the private and public sectors takes more time. But we do have a 
vision. And, with all due respect for our critics, we prefer our vision 
to that of the government bureaucrats 8500 miles away.
    The ability of the private sector and my Administration to deal 
with our economic crisis has been complicated by the recent imposition 
of the federal minimum wage on the Commonwealth. I am pleased to report 
that collaboration between federal and local labor officials was very 
successful in preparing for as smooth a transition as possible given 
the short time frame for compliance and the variety of questions 
presented by employers and employees. Employers throughout the 
Commonwealth are concerned by the uncertainty under the federal law 
with respect to additional yearly increases in 2008 and beyond and the 
difficulty in planning ahead under these circumstances. We will be 
monitoring the impact of this first increase and will be requesting 
this Committee's assistance as appropriate.
Impact of H.R. 3079 on the CNMI
    The enactment of H.R.3079 will seriously damage the CNMI economy. 
It will drastically change the rules under which investors commit their 
funds to the Commonwealth. It generates uncertainty throughout the 
economy. This uncertainty is real. It leads potential investors to 
reexamine the profitability of investment in the Commonwealth. It leads 
committed investors to reexamine the nature and timetable for 
implementing their plans. It raises serious questions regarding the 
continuation of the special visa programs vital to the visitor 
industry, the educational industry, and retirement facilities for Asian 
nationals.
    Once the several federal departments begin to exercise their 
responsibilities under H.R. 3079, an entirely new element of 
uncertainty is created. It will be clear that no Northern Marianas 
Governor will be able to make the commitments necessary to attract 
investment to the Commonwealth from predominantly Japanese, Korean, and 
other Pacific Rim companies. In order to appraise investment prospects 
in the Northern Marianas, potential investors will have to deal with a 
new bureaucracy of five departments in Washington. To whom should such 
investors go for guidance regarding the future course of the CNMI 
economy? Department of Homeland Security? Department of State? 
Department of Justice? Department of Labor? Or the Interior Department? 
Or all of the above? Why should they bother--if there are other areas 
in the Pacific of equal promise which provide greater certainty and 
security which major investors reasonably demand?
    Enactment of H.R.3079 will almost certainly result in increased 
financial dependence on the federal government by the CNMI. The 
Commonwealth will soon thereafter be on the dismal course being 
experienced by the freely associated states and most island communities 
in the Western Pacific--a trajectory featuring outmigration, 
remittances, large government payrolls, and foreign aid. This was not 
the objective of the United States and Northern Marianas negotiators of 
the Covenant. They envisioned and promised a self-sufficient local 
economy, to the extent possible, and a standard of living comparable to 
that of the average American community. In recent years the federal 
government has failed to honor these commitments to the Northern 
Marianas--such as the failure to reimburse the CNMI for the $200 
million in costs incurred by the Commonwealth providing public services 
to Micronesians from the other former districts of the Trust Territory 
of the Pacific Islands. Coming so soon after the imposition of the 
federal minimum wage, enactment of H.R.3079 would be another serious 
blow to the Commonwealth--its economy and its U.S. citizens, who lack 
even a token vote in the U.S. Congress.
    We do not understand why this Committee cannot wait to examine the 
GAO's economic data, assessments, and conclusions in the study 
requested by Congress before acting on H.R.3079. We urge this Committee 
not to act on H.R.3079 until the GAO completes its analysis and reports 
to the Committee.
Specific Deficiencies of H.R.3079
    Attached to this Statement is a section-by-section analysis of 
H.R.3079. Let me draw your attention to a few of its most important 
deficiencies.
H.R. 3079: A New Federal Bureaucracy
    House Bill No. 3079 creates a new federal bureaucracy composed of 
five separate departments to implement the bill's provisions. It is 
unclear that any of these departments--with the probable exception of 
the Interior Department--wants to add these new responsibilities to 
their already full dockets. The Department of State is so overwhelmed 
by passport applications that it has assigned more than one hundred of 
its consular officers on an emergency basis to deal with these demands. 
The same is true of the Department of Homeland Security, as evidenced 
by the recent reports of its backlogs with respect to visa 
applications. A short time ago, a conflict between the Department of 
State and the Department of Homeland Security resulted in the reversal 
of a commitment to provide work-based visas to thousands of well-
educated, highly skilled, legal immigrants, with long experience in the 
country. A spokesman for Homeland Security acknowledged that there had 
been a failure of communication between his department and State. (New 
York Times, July 6, 2007, p.A9) Does anyone seriously believe that the 
needs of the Commonwealth--8,500 miles from Washington without a vote 
in the Congress--would get a higher priority?
    We believe that the Committee should hear directly from all five 
agencies given duties under the bill before it is enacted. H.R.3079 
raises significant issues of funding, personnel, expertise, and agency 
coordination that should be addressed before--not after--the bill is 
passed.
    The House bill provides only a year for the five departments to 
consult with each other and the Commonwealth, and produce the many sets 
of regulations required by the bill. After the effective date of the 
legislation, all CNMI immigration and labor laws are expressly 
preempted by the legislation, with no failsafe provision in the event 
that the federal agencies are not ready at that time to enforce the new 
law. It would be only prudent to anticipate such a possibility and 
provide for it in the proposed legislation.
H.R. 3079: An Unprecedented and Unnecessary Assertion of Federal 
        Authority
    With respect to the authority of Congress to enact H.R.3079, the 
Commonwealth recognizes that the Covenant does permit application of 
the U.S. immigration laws to the CNMI after termination of the 
Trusteeship Agreement. However, H.R.3079 is far more than an 
immigration law. For the first time in American history, it imposes a 
federally designed and controlled guest worker program on a single 
community of U.S. citizens. It purports to pay deference to the promise 
of local self-government in the Covenant, but its terms are quite 
clear: all critical decisions regarding the future economy of the 
Commonwealth will be in the hands of federal officials. They will 
decide which industries or new investments will be entitled to access 
to alien workers. They will decide which special visa programs will be 
available to the Commonwealth's critical visitor industry. They will 
decide what incentives or sanctions are required to stimulate 
businesses to employ local workers. Local laws to the contrary are 
expressly preempted. To the Members of this Committee who have served 
in local or State government, we pose a single question: How would you 
have responded if Congress authorized five federal departments to 
descend on your community and supersede local authority over the local 
economy?
    The Commonwealth believes that its immigration enforcement system 
can be more effective than a federal system administered from 
Washington. The small size and island character of the Commonwealth 
facilitates an effective immigration system--both in excluding illegal 
entrants and in identifying and deporting persons no longer qualified 
to remain in the community. However impressive the resources of the 
United States appear in the abstract, the federal performance in this 
distant location almost always falls far short of expectations. This 
certainly has been the experience in the Northern Marianas, even after 
the Senate hearings in 1998-99 when the Chairman of the Senate 
Committee on Energy and Natural Resources chastised the federal law 
enforcement authorities for failing to implement their responsibilities 
in the CNMI. It is reflected today in the performance of federal 
agencies responsible for handling labor cases under federal laws and in 
the under funding of essential border protection agencies. A case in 
point is the U.S. Coast Guard operation in the CNMI, which lacks even a 
single boat to patrol the 400 mile chain of the Northern Mariana 
Islands and to act in a timely fashion to apprehend smugglers or other 
criminals. If lack of funding is the problem here, perhaps the 
Commonwealth can be of assistance.
    The Commonwealth acknowledges and welcomes the national security 
interests of the United States in protecting the borders of the 
Commonwealth. However, we believe that border control concerns can be 
addressed separately from control of the local guest worker program or 
the special visa programs essential to the CNMI visitor industry. With 
respect to the guest worker program, the decisions with respect to the 
nature and extent of economic development could be left to local 
elected leaders where such a responsibility belongs, but no guest 
worker would be admitted before his or her name was checked against the 
federal data bases to ensure that the guest worker did not present a 
security risk to the United States. With respect to the special visa 
programs used by the Commonwealth to attract visitors from destinations 
such as China and Russia, CNMI could similarly follow its usual 
procedures, which then could be supplemented by reliance on the federal 
data bases to provide an additional level of protection against 
security risks. We are prepared to work with the Committee to develop 
an alternative legislative approach that would address our mutual 
interest in having enhanced border security in the Commonwealth.
H.R.3079: Permanent Legal Residence Status for Alien Workers
    In a significant departure from current immigration policy, H.R. 
3079 declares which non-U.S. citizens will be given permanent legal 
status and permitted to stay in the CNMI or move to any part of the 
United States. H.R.3079 expressly grants a form of amnesty to nearly 
8000 alien workers in the Commonwealth by granting them this 
nonimmigrant status, comparable to that enjoyed by Micronesians from 
the freely associated states. The bill's drafters chose to ignore that 
such an enhanced status was not permitted or contemplated when these 
workers elected voluntarily to come to the CNMI many years ago to enjoy 
the economic opportunities available in the CNMI. The recent Senate 
debate on immigration suggests that such a provision would never have 
been supported on the national level--either because it smacks of an 
amnesty provision or because it imposes an enormous burden on the 
Commonwealth of permanent alien residents numbering about 25% of the 
local United States citizen population.
    The drafters of H.R. 3079 seemingly have no concern about the 
impact of this provision on the integrity and vitality of the 
indigenous Carolinian and Chamorro peoples in the Commonwealth. 
Permanent legal residence status permits such individuals to bring 
children and other relatives into the community where the status-holder 
elects to live. Consequently, the impact on the local CNMI community 
might be far greater than anticipated if most of these new permanent 
legal residents elected to stay in the Commonwealth and bring in 
children and other relatives not presently allowed to reside in the 
CNMI. However well-intentioned this proposal appeared to its drafters, 
its consequences already have seriously affected the quality of life in 
the CNMI. The proposal has generated unrealistic expectations among the 
guest worker population in the Commonwealth, stimulated boycotts of 
businesses because their owners have opposed this provision, and 
contributed to increased divisiveness between guest workers and the 
indigenous peoples of the Commonwealth. We recommend that the provision 
be eliminated from H.R.3079.
H.R.3079: Provision for a Non-Voting Delegate in the House of 
        Representatives
    We appreciate the inclusion in H.R.3079 of a provision authorizing 
the Commonwealth to be represented in the House of Representatives by a 
non-voting delegate. We strongly support such a proposal. It is a 
disgrace that the U.S. Congress has for years denied the Commonwealth 
the same privileges as have been afforded to the other insular areas.
    We believe, however, that legislation providing for a non-voting 
delegate should be considered on a stand-alone basis. Notwithstanding 
our support for such a proposal, therefore, its inclusion in H.R.3079 
does not alter our view that enactment of the legislation would 
seriously damage the interests of the CNMI.
    Lastly, we believe that the CNMI should be entitled to have a non-
voting delegate in the House of Representatives before critical 
legislation such as H.R.3079 is enacted by the House.
    Thank you for the opportunity to testify on H.R.3079. We appreciate 
your consideration of our views.
                                 ______
                                 
    Mrs. Christensen. Thank you, Governor, for your testimony 
and I am sure the other witnesses have noticed that we let the 
Governor go well over his time. We don't intend to continue 
that for everyone. Thanks. [Laughter] I now recognize the 
Speaker, Oscar M. Babauta, for five minutes of testimony.

         STATEMENT OF THE HONORABLE OSCAR M. BABAUTA, 
             SPEAKER, CNMI HOUSE OF REPRESENTATIVES

    Speaker Babauta. Hafa Adai, Chairwoman Christensen and 
members of the Subcommittee. Thank you for providing me the 
opportunity to comment on H.R. 3079. I would first like to 
thank the Subcommittee for traveling so far to conduct a 
legislative hearing here in the CNMI for the first time. It's 
encouraging to know that the U.S. House of Representatives has 
given this such a high priority. On behalf of the people of the 
Northern Mariana Islands, I would like to extend my very warm 
greetings to you, Chairwoman and members of the Subcommittee 
and your staff. I would also like to thank all the witnesses 
who will be testifying today, although we will likely be 
disagreeing on specific policy matters.
    I would offer comment on four aspects of H.R. 3079. The 
first three aspects are areas of concern I have with the bill 
as drafted, namely: Number one, the part for total and complete 
Federal Immigration takeover; two, the provision granting non-
immigrant status to certain foreign nationals; and three, the 
transitional oversight provision. The fourth aspect I would 
like to discuss is our Non-voting Delegate Provision. First on 
the issue of Federalization, let me begin with assuring the 
Subcommittee that we welcome cooperation with Federal 
authorities in the areas of border security and law 
enforcement. The efforts of the main Federal agencies that 
assisted our government over years are appreciated and produced 
very real results on the ground. In particular, law enforcement 
and immigration training, the assistance of the Department of 
Homeland Security in developing our Refugee Protection Program 
and Coast Guard patrols of our large island archipelago, are 
grateful for ensuring our immigration system is sound.
    I feel, however, that for the extension of the Immigration 
and Nationality Act is inappropriate at this time given the 
historical relationship between the United States and the CNMI. 
When our people voted overwhelmingly to join the American 
political family, it was with the understanding that ours was a 
unique relationship, and that certain powers and 
responsibilities will be left to the local government. Indeed, 
the Covenant and subsequent legislation on Federal and local 
jurisprudence have all recognized that unique relationship. I 
believe that a blanket application of the INA under a ``one 
size fits all'' approach impinges upon the ideal of self-
government that framed the Covenant negotiation process.
    Moreover, as the CNMI pursues new development strategies in 
order to rehabilitate our ailing economy, local immigration 
control is of critical importance. We are taking steps to 
diversify our tourism industry and have in recent years 
cultivated new tourism markets in China, South Korea, and 
Russia. Under local control, our CNMI immigration authorities 
are able to work directly with officials within other 
jurisdictions and respond to changing market conditions as 
needed. I do not believe that the CNMI could have achieved our 
current level of success in these markets without localized 
immigration authority.
    An additional problem, an additional problem with 
Federalization is the negative impact it would have on our 
ability to engage with the foreign national labor workforce for 
jobs that simply cannot be filled locally. Because our physical 
isolation from the American mainland and also because a lack of 
adequate training programs in the past, we have difficulty 
filling many positions with U.S. citizens. At the moment, we 
have too small a jurisdiction to support a law school, medical 
school, or major university where local residents can seek 
training in technical and scientific professions. Although we 
continue to focus on job training for residents, the foreign 
national labor force is critical to our ongoing plan of 
recovery.
    The recent passage of Federal legislation applying the 
minimum wage to CNMI should provide a greater amount of 
security for our workers here. This would help to ease any 
lingering fears that national workers, foreign national workers 
in CNMI, are not being compensated appropriately. Furthermore, 
we are now debating final passage of House Bill 15-38, an Act 
to Repeal and Re-enact the Commonwealth Nonresident Workers 
Act. The bill has passed the House and is awaiting Senate 
action here in the Commonwealth. H.B. 15-38 reforms current 
labor laws, provides for increased local participation of 
workforce, and ensures fair treatment of workers in going to 
CNMI.
    In addition, the legislature continues to update our local 
statutes to address new developments in immigration 
enforcement. In 2005, we passed a Human Trafficking and Related 
Offenses Act through Law 14-88. Also in 2005 the Legislature 
passed Public Law 14-92, an act to amend our voluntary 
departure provision. Public Law 14-59, that refers to Anti-
Terrorism Act of 2004 and Public Law 14-63, an Act to Establish 
the Homeland Security.
    I continue to support U.S. involvement in our immigration 
program short of the application of INA. I wish to be clear, 
however, that full Federalization of our immigration system is 
not to the best interest of our island economy at this time.
    My second concern as the leader of the Chamber charged with 
preparing the CNMI's yearly budget is the ``One-Time 
Nonimmigrant Provision for Certain Long-Term Employees.'' I am 
troubled by this potentially large--very large unfunded 
mandate. I fear the demand of long term--banking on long-term 
status for contract workers who meet certain residency 
requirements and their family members may create a massive 
financial drain in our already modest public resources, 
particularly in the areas of education, public health, and 
public safety. We have had a very bad experience with this kind 
of unfunded mandate in the past when the Department of Interior 
negotiated a compact agreement with the Freely Associated 
States, the current provision that allows those citizens to 
come to the CNMI without visa control. Many people took 
advantage of the provision and settled here more or less 
permanently. Over the past 20 years, the impact of this 
settlement has been over $200 million in documented cost. We 
have the ability to try to improve (audible but unintelligible) 
quandary without success. To date, roughly and only about $20 
million has been paid so far. We have had to absorb $180 
million in cost for a decision that we did not participate in.
    My third concern is the Transitional Oversight Program. I 
feel the provision is vague and leaves many unanswered 
questions about the roles of various Federal agencies on our 
government. Although I understand that the Department of 
Homeland Security would be tasked with drafting transitional 
regulations, the provision offers us no clear role in the 
transition process. Further, the transitional oversight by not 
only one, but by five agencies is likely to slow down the 
immigration processing and discourage further tourism and, of 
course, economic development.
    I am very much in support of H.R. 3079 provisions--Delegate 
provisions, and I feel that representation in the U.S. Congress 
is important for both political and practical reasons. The CNMI 
should, like all the insular areas, have a place at the 
congressional table. Our ability to send a delegate to 
Washington will allow us to participate more directly in policy 
decisions such as those considered in H.R. 3079.
    We're faced with difficult times at this time, Madam 
Chairwoman, substantial steps to manage our immigration program 
in a responsible manner. I would like to use our local 
immigration authorities to revitalize and grow our economy, 
rather than rely on the Federal assistance. I hope you will 
consider these comments as you debate the passage of H.R. 3079.
    Once again, I thank you for the opportunity and we thank 
you from the people of the CNMI for listening to CNMI and 
bringing this hearing. Thank you, Si Yu'us ma'ase.
    Mrs. Christensen. Thank you Mr. Speaker.
    [The prepared statement of Speaker Babauta follows:]

  Statement of The Honorable Oscar M. Babauta, Speaker of the House, 
          Fifteenth Northern Marianas Commonwealth Legislature

    Hafa Adai Chairwoman Christensen and members of the Subcommittee. 
Thank you for providing me with the opportunity to comment on H.R. 
3079, a bill ``To amend the Joint Resolution Approving the Covenant to 
Establish a Commonwealth of the Northern Mariana Islands, and for other 
purposes.''
    I would first like to thank the Subcommittee for traveling so far 
to conduct this legislative field hearing. It is encouraging to know 
that the United States House of Representatives has given this issue 
such a high priority. On behalf of the people of the Northern Mariana 
Islands, I would like to extend a very warm greeting to the committee 
and staff. I hope your stay is a pleasant one and I look forward to 
assisting the Subcommittee in any way I can.
    As the leader of the House, I have three main areas of concern with 
H.R. 3079. First, I object for legal and practical reasons to a 
complete federal takeover of the CNMI immigration system. Second, I am 
concerned that the provisions for granting nonimmigrant status to 
certain contract employees may overwhelm our public service providers. 
Third, I feel that the transitional oversight provision is vague and 
leaves many unanswered questions about the various roles of federal 
agencies and of the CNMI Government. As an additional matter, I do 
thank the Committee for including a delegate provision in H.R. 3079. I 
feel this provision is an important step forward for the people of the 
CNMI.
1. Federalization of the CNMI's Immigration System
    As for the ``federalization'' of our immigration system, I feel 
that the full extension of the Immigration and Nationality Act (INA) to 
this Commonwealth is neither necessary nor appropriate given the 
historical relationship between the United States and the CNMI. When 
our people voted overwhelmingly to join the American political family, 
it was with the understanding that ours was a unique and mutually 
respectful relationship, and that certain powers and responsibilities 
would be left to the local government. The Covenant (48 U.S.C. 
Sec. 1801), subsequent federal and local legislation, and federal and 
local jurisprudence have all recognized the unique nature of our 
islands and the importance of preserving local control over certain 
legal functions. I believe that a blanket application of the INA to 
this jurisdiction under a ``one size fits all'' approach impinges upon 
the ideal of self-government that framed the Covenant negotiation 
process.
    Moreover, as our Commonwealth pursues new economic development 
strategies in order to reinvigorate an ailing economy, local 
immigration control is of critical importance. We are taking steps to 
diversify our tourism industry, and have in recent years cultivated new 
tourist markets beyond the CNMI's traditional market of Japan. These 
new markets include China, South Korea, and Russia. In 2004, the CNMI 
signed an Approved Destination Status Agreement with China, an 
agreement that facilitates Chinese travel and provides for direct 
flights from major Chinese cities. Because of the anticipated boom in 
Chinese outbound tourism, we hope to experience significant growth in 
this market in the coming years. Maintaining local control over 
immigration is critical to the development of this growth, as our local 
immigration authorities are able to work directly with Chinese 
government officials and respond to the changing conditions of the 
market as needed. Our long term strategy also focuses on the 
development of the South Korean market. Arrivals from the Republic of 
Korea have been steadily increasing even as other country numbers 
decline. Finally, we have been working diligently to develop an eastern 
Russia tourist market with regular (via Seoul) and charter flights to 
the CNMI. The Russian market is characterized by longer than average 
visits resulting in increased revenues, a high percentage of return 
visitors, and little to no legal complications. As with the development 
of the Chinese market, I do not believe the CNMI could have experienced 
such a rate of success without local immigration control. I feel that 
our full absorption into the INA could threaten this growth and, as a 
consequence, undermine our economic recovery.
    An additional problem with federalization is the negative impact it 
will have on our ability to engage a foreign national labor force for 
important positions that simply cannot be filled locally. In many areas 
of our economy it is difficult to find resident employees to fill 
specific jobs. This is in part because of our remote location and 
physical isolation from the American mainland. It is also due to a 
shortage of skilled professionals (and even unskilled laborers) among 
the local population, and a lack of adequate training programs in the 
past. At the moment we are too small a jurisdiction to support a law 
school, medical school, or major university where local residents can 
seek training in the technical and scientific professions. Although we 
continue to focus on job training for residents, foreign national 
professionals, and our ability to process these professionals locally, 
have become important components in our continued economic development. 
In addition, efforts to rebuild critical industries such as tourism and 
higher education will require the hiring of both professional and 
unskilled workers beyond the current capacity of the local labor force.
    The recent passage of federal legislation applying the minimum wage 
to the CNMI will eventually raise local wages to the national level and 
provide more economic security to both resident and foreign national 
workers. This should help to alleviate any lingering fears that foreign 
national workers in the CNMI are not being compensated appropriately. 
Furthermore, the Legislature is now debating final passage of House 
Bill 15-38, an Act to Repeal and Re-enact the Commonwealth Nonresident 
Workers Act. The bill has passed the House and is awaiting Senate 
action. The Act will reform current foreign national labor laws, 
provide for increased local participation in the workforce, and ensure 
the fair treatment of both citizens and foreign nationals working in 
the CNMI.
    The House and the Legislature as a whole continue to update our 
immigration laws to address new developments in immigration 
enforcement. In 2005, we passed the Human Trafficking and Related 
Offenses Act through Public Law 14-88. The Act, supported by the U.S. 
Department of Justice, has become an important and effective tool in 
the CNMI's continuing efforts to combat labor fraud and trafficking. 
Also in 2005, the Legislature passed Public Law 14-92, an act to amend 
our voluntary departure law to provide immigration prosecutors with 
improved procedural options in deportation cases. This law should lead 
to a more consistent and expedient system for resolving pending cases. 
Additionally, in the 2005 session the Legislature passed Public Law 14-
59, the ``Anti-Terrorism Act of 2004,'' Public Law 14-63 ``An Act to 
Establish the Office of Homeland Security,'' and Public Law 14-84, 
legislation which corrected constitutional deficiencies in certain 
immigration statutes that were struck down by the U.S. District Court 
for the Northern Mariana Islands in Gorromeo v. Zachares, Civil Action 
No. 99-0018 (D.N.M.I. 2000). Most importantly, the impending passage of 
House Bill 15-38 (see above) will serve as a means of decreasing our 
traditional reliance on foreign labor through the training of local 
residents and through stronger local hiring preference rules. It will 
also ensure that resident and foreign national workers alike are 
treated fairly in the employment process.
    Finally, the Division of Immigration continues to work on closing 
potential loopholes in our immigration system. The Division has 
implemented effective border management and labor identification 
systems and efficient investigatory techniques. The Border Management 
System (BMS) generates a record of all entries to and exits from the 
Commonwealth, regardless of citizenship. Immigration investigators have 
instant access to arrival information and can confirm the departure of 
those foreign nationals with expired contracts and those ordered 
deported from the Commonwealth for violating local law. The Labor and 
Immigration Identification System (LIIDS) tracks all foreign national 
labor contracts, job category authorizations, and permit status of non-
citizen workers in the Commonwealth. This allows investigators to 
quickly determine the permit status of all foreign national workers 
involved in labor complaints and administrative hearings, as well as 
compile data on overstaying aliens in every entry permit category. As 
always, local officials welcome cooperation with U.S. agencies, and any 
technical or financial assistance they may provide, in the training of 
our local immigration investigators, inspectors, and processing 
personnel.
    I continue to support U.S. involvement in our immigration program 
short of the complete application of the INA. I wish to reiterate, 
however, my opposition to the ``federalization'' of a system that is 
economically beneficial to our islands.
2. The One-Time Nonimmigrant Provision
    As the leader of the chamber charged with preparing the CNMI's 
yearly budget, I am concerned with the ``One-Time Nonimmigrant 
Provision for Certain Long-Term Employees.'' I am afraid that the grant 
of long term resident status to contract workers who meet certain 
residency requirements and their family members may create a massive 
financial drain on our modest public resources, particularly in the 
areas of education, health, and public safety. This will result in a 
lower quality of life for everyone within our borders. I am concerned 
that H.R. 3079 does not establish adequate financial assistance 
mechanisms to allow us to sustain a large and long-term foreign 
national population, a very real problem that Congress has previously 
acknowledged through the provision of Compact-impact funding (Federal 
funding intended to offset the financial impact to the CNMI created by 
the long-term residency of citizens from the Federated States of 
Micronesia, the Republic of the Marshall Islands, and the Republic of 
Palau).
3. The Transition Provision
    With regard to the transitional oversight program, I feel the 
provision is vague and leaves many unanswered questions about the 
various roles of federal agencies and the CNMI Government. Although I 
understand that DHS will be tasked with the primary responsibility of 
drafting transition regulations, the complete delegation of authority 
to federal executive agencies offers the CNMI no certainty in the 
transition process. Further, transitional oversight by not one, but 
five agencies is likely to slow down immigration processing and 
discourage potential tourists.
4. The Delegate Provision
    I am very much in support of H.R. 3079's Delegate provision. I feel 
that representation in the U.S. Congress is important for both 
political and practical reasons. First, the CNMI should, like all of 
the territories, have a place at the Congressional table. Second, our 
ability to send a delegate Washington will allow us to participate more 
directly in policy decisions such as those considered in H.R. 3079.
    We are facing difficult economic times in our Commonwealth but have 
taken substantial steps to manage our immigration program in a 
responsible manner. We would like to use our local immigration 
authority to revitalize and grow our economy, rather than rely on 
federal assistance for the same. I hope you will consider these 
comments as you debate the passage of H.R. 3079. Thank you again for 
visiting our Commonwealth and for providing me with the opportunity to 
address the Subcommittee on this critical issue.
    Si Yu'us Ma'ase and Thank you.
                                 ______
                                 
    Mrs. Christensen. The Chair now recognizes The Honorable 
Pete A. Tenorio, Resident Representative, for his testimony.

          STATEMENT OF THE HONORABLE PETE A. TENORIO, 
              RESIDENT REPRESENTATIVE OF THE CNMI

    Representative Tenorio. Good morning. Hafa Adai, Chairwoman 
Christensen, Congressman and a good friend, Faleomavaega, 
another good friend in Guam, Congresswoman Bordallo, welcome to 
our islands. It is my privilege and honor to welcome you and 
your delegation to our islands. I would like to express my 
deepest appreciation to this Subcommittee for holding this 
first ever and indeed historic U.S. Congressional Hearing in 
our Commonwealth. We're thankful for your willingness to allow 
an unprecedented number of people to testify before you today. 
I hope that our people who are not able to testify will 
understand the time constraints that the Subcommittee is 
working under. Your presence in our Commonwealth demonstrates 
the U.S. Congress' genuine interest and concern for the people 
of the CNMI and the serious problems we face. Si Yu'us ma'ase 
again for your visit.
    I am testifying before you today to demonstrate my 
commitment as an elected representative of my people to work 
with Congress and particularly with your committee. It is my 
understanding that the legislation being discussed today offers 
new benefits and promises as well as a Federal commitment to 
ensure that these proposed changes will not be disruptive, but 
instead will provide protection for the people of the CNMI, now 
and in the future. In 1975, an overwhelming 78.8 percent of the 
people of these islands, exercising their right to political 
self-determination, voted in support of the Covenant between 
the United States and to become citizens of our great nation. 
The Covenant provided us unique authority and responsibility 
not shared by our sister territories or the 50 states. I am 
speaking of local control of immigration and minimum wage. We 
have administered this Federal policy for the last 30 years. I 
can proudly say that for a time, we used this authority wisely 
and to the benefit of the people of the CNMI. Our political 
union has brought both wealth and security to our people, and 
for a while we lived in a world filled with opportunities for 
each one of us to achieve the American Dream. Unfortunately, 
the good times were not sustainable and relatively short-lived 
because we grossly mismanaged our temporary authority to 
administer immigration locally. Our wealth, which for the most 
was dictated by how efficient and effective our administration 
of immigration was, vaporized right in front of our eyes and 
today the once shiny and prosperous future holds little hope.
    As a member of the Marianas Political Status Commission, I 
work hard to renegotiate the Covenant, and I can say with great 
confidence that it was our intention that non-resident workers 
would be employed only to supplement our local workforce. 
Unfortunately, however, it has become obvious that non-
residents have supplanted our local workforce in the private 
sector, creating a wholly unsustainable economy. When we were 
negotiating the Covenant, we were concerned about immigrants to 
the U.S. overrunning our indigenous population, but our own 
shortsightedness and complacency in our control of immigration 
has led us to this end.
    I hear reports daily about overstaying workers, tourists 
seeking employment illegally, and even phony employment scams. 
I do not believe that our overall track record in administering 
immigration speaks to an effective system of monitoring a non-
resident workforce or providing protections for our resident 
workforce. It is my position that in summation, we have failed 
miserably and it is time to rectify these recurring mistakes by 
making a drastic course correction.
    Section 503 of the Covenant allows the U.S. Congress to 
assume authority over immigration and minimum wage in the 
manner and to the extent made applicable to them. Congress, and 
I repeat, Congress has the right to exercise this prerogative 
as it sees fit and I, for one, am grateful that Congress is 
allowing us the opportunity to have input into this process. 
Madam Chairwoman, we need to protect the indigenous population 
from losing the promise of achieving the American Dream 
entrenched in the Covenant. It is my understanding that 
Congress intends to implement Section 503 of the Covenant in 
order to bring about long-term diversification on economic 
growth by, one, providing stability and confidence to current 
and future investors. We have changed laws, inconsistently 
enforced laws, and repealed laws that would have benefited the 
people.
    Two, securing current and future tourist markets. The 
Covenant provides that the Federal Government will have 
authority over foreign affairs and treaty obligations. This 
includes bilateral talks on air service which holds the promise 
of securing access to new tourism markets.
    Number three, providing a closely monitored transition 
program that will ensure we have uninterrupted access to a 
needed skilled workforce. We cannot train and prepare our local 
population within a short time to take over most jobs currently 
occupied by non-residents nor can we practically prevent the 
outward migration of our own people to other locations 
overnight. But we must have a goal and a plan to provide job 
opportunities and sound reasons for our people to remain in or 
to return to our islands, especially our students attending 
colleges in the states or Guam. I have every hope that this 
legislation will help us achieve that goal.
    Many people in the CNMI fear the outcome of Senate Bill 
1634. They fear political and social alienation as well as the 
loss of their homeland. However, I feel in reality we face this 
already. If things do not change, we are at the greatest risk 
of losing our culture, our way of life, and control over our 
own destiny, if we have not already. Many local families are 
leaving the CNMI for Guam, Hawaii, or the mainland because just 
surviving in the CNMI is too difficult. I have recently learned 
that every--that many families are leaving the CNMI for Guam. I 
will really--I am sorry, I have recently learned that nearly 
every year, half of our high school graduating seniors enlist 
in the U.S. Armed Services. Many of them enlist out of a deep 
sense of duty and patriotism, but some of them enlist because 
there are simply no employment options for them in their 
homeland.
    Madam Chairman, I see this bill as a mechanism for 
restoring the CNMI to the Chamorros and Carolinians who have 
always called it home. I believe that Senate Bill, Section 34 
and 79 from the House Bill is a good beginning. However, I have 
a few suggestions, which you can find in my written testimony. 
These are to strengthen the bill so that we can regain the CNMI 
as the homeland for its indigenous population.
    Today, I will mention just one. I want to emphasize the 
critical importance of Section 3(e) of the bill. There is no 
doubt that we need to invest in training for residents to 
prepare them for jobs currently held by non-residents. While 
this is included in the current language of the bill, I would 
like to see specific funds dedicated to areas that require 
formal training that leads to certification in the various 
trades and technical fields. We must invest in our educational 
system to produce skilled labor. Without these funds and this 
training, I feel that this legislation would also lead to a 
failed policy in the CNMI.
    Mrs. Christensen. Can you wrap up, please, Mr. Tenorio?
    Representative Tenorio. And finally, Madam Chairwoman, a 
Delegate for the CNMI is a matter of fairness, democracy, and 
the basic tenets of our nation. The people of the CNMI are in 
support of a Delegate, as you have heard, and I have waited 
long enough for it to become a reality. I have, over the years, 
provided this Committee with countless resolutions, letters of 
support, and testaments of the people's desire to participate 
in the national legislative body.
    Madam Chairwoman, the CNMI needs a ``course correction.'' 
Our chosen path to self-sufficiency and prosperity has led us 
to an unsustainable economy. I believe that the people of the 
CNMI are ready for positive change and to work in partnership 
with the Federal Government to turn our Commonwealth around and 
so that, once again, we have the hope of achieving our dreams. 
Thank you.
    Mrs. Christensen. Thank you, Mr. Tenorio.
    [The prepared statement of Representative Tenorio follows:]

             Statement of The Honorable Pedro A. Tenorio, 
           CNMI Resident Representative to the United States

    Hafa Adai, Chairwoman Christensen, Members of Congress. It is my 
privilege and honor to welcome you and your delegation to our islands. 
I would like to express my deepest appreciation to this subcommittee 
for holding this first ever and indeed historic U.S. Congressional 
hearing in our Commonwealth. We are thankful for your willingness to 
allow an unprecedented number of people to testify before you today. I 
hope that our people who are not able to testify would understand the 
time constraints that the Subcommittee is working under. Your presence 
in our Commonwealth demonstrates the U.S. Congress' genuine interest 
and concern for the people of the CNMI and the serious problems we 
face. Si Yu'us Ma'ase again for your visit.
    Please allow me to introduce a number of prominent CNMI citizens 
including former governors, Covenant negotiators, mayors. We have with 
us today our first Governor Carlos Camacho, our three time Chief 
Executive Governor Pedro P. Tenorio, Governor Froilan Tenorio, and 
Governor Juan Babauta. We are honored with the presence of several 
former Covenant negotiators Vicente N. Santos, Herman Q. Guerrero, 
Benjamin T. Manglona, Mr. Joaquin I Pangelinan, Bernard V. 
Hofschneider, Manuel A. Sablan and Oscar C. Rasa.
    Thank you for the opportunity to share with you my position on this 
most important piece of legislation, which, if enacted, will have 
profound affects on the Commonwealth of the Northern Mariana Islands. I 
am confident that a majority of our people agree with my position on 
the two issues being heard today i.e., a flexible framework for 
federalizing our immigration and representation in Congress.
    Before I get into the specifics, I would like to express my deep 
appreciation to this committee, the Secretary of the Interior and the 
Office of Insular Affairs for including my and the majority of our 
Legislature's recommendations in the drafting of this bill. While I 
have a few comments aimed at improving this bill. Overall I believe 
that this bill is in the best interest of our people, entirely 
consistent with our Covenant, and is responsive to the concerns I 
outlined before this committee's April 19th oversight hearing.
    I am testifying before you today to demonstrate my commitment as an 
elected representative of my people to work with Congress and 
particularly with your committee to ensure that the legislation being 
discussed today offers new benefits, and promises as well as a federal 
commitment to ensure that these proposed changes will be successful and 
provide protection for the people of the CNMI, now and in the future.
    In 1975 an overwhelming 78.8 % of the people of these islands, 
exercising their right to political self-determination, voted in 
support of the Covenant to join the United States and to become 
citizens of this great nation. The Covenant provided us unique 
authority and responsibility, not shared by our sister territories or 
the fifty states. I am speaking of local control of immigration and 
minimum wage. We have administered these federal policies for the last 
thirty years. I can proudly say that for a time we used this authority 
wisely and to the benefit of the people of the CNMI. This union brought 
both wealth and security to our people, and for a while we lived in a 
world filled with opportunity for each one of us to achieve the 
American Dream. Unfortunately, the good times were not sustainable and 
relatively short-lived because we grossly mismanaged our temporary 
authority to administer immigration locally. Our wealth, which for the 
most part was dictated by how efficient and effective our 
administration of immigration was, vaporized right in front of our eyes 
and today the once shiny and prosperous future holds little hope.
    As a member of the Marianas Political Status Commission which 
negotiated the Covenant, I can say with great confidence that it was 
our intention that non-resident workers would be employed only to 
supplement our local workforce. Unfortunately, however, it has become 
obvious that non-residents have supplanted our local work force in the 
private sector, creating a wholly unsustainable economy. When we were 
negotiating the Covenant we were concerned about immigrants to the U.S. 
overrunning our indigenous population, but our own shortsightedness and 
complacency in our control of immigration has led us to this end. I 
hear reports daily about overstaying workers, tourists seeking 
employment illegally, and even phony employment scams. I do not believe 
that our overall track record in administering immigration speaks to an 
effective system of monitoring a non-resident workforce or providing 
protections for our resident workforce. It is my position that in 
summation, we have failed miserably and it is time to rectify these 
recurring mistakes by making a drastic course correction.
    Section 503 of the Covenant allows the U.S. Congress to assume 
authority over immigration and minimum wage in the manner and to the 
extent made applicable to them. Madame Chairwoman we need a major 
course correction to protect the indigenous population from losing the 
promise of achieving the American Dream entrenched in our Covenant. The 
implementation of Section 503 of the Covenant is expected to bring long 
term benefits and stability by:
      Providing stability and confidence to current and future 
investors. We have changed laws, inconsistently enforced laws, and 
repealed laws that would have benefited the people.
      Securing current and future tourist markets. The Covenant 
provides that the federal government will have authority over foreign 
affairs and treaty obligations. This includes bilateral talks on air 
service which hold the promise of securing access to new tourism 
markets.
      Providing a closely monitored transition program that 
will ensure we have uninterrupted access to a needed skilled workforce. 
We cannot train and prepare our local population within a short time to 
take over most jobs currently occupied by non-residents nor can we 
practically prevent the outward migration of our own people to other 
locations over night. But we must have a goal and a plan to provide job 
opportunities and sound reasons for our people to remain in or return 
to our islands, especially our students attending college in the states 
or Guam. I have every hope this legislation will help us achieve that 
goal.
    I would like to inform the Committee, that the immediate future 
obviously offers little hope in improving the livelihood of our people. 
Because of misunderstanding, and sometimes deliberate misinformation by 
others, a substantial number of people in the CNMI fear the outcome of 
House Bill 3079. They fear political and social alienation as well as 
the loss of their homeland and overcrowding by outsiders. However, I 
feel in reality we face this situation already. If things do not change 
we are at the greatest risk of perpetuating massive overcrowding, 
losing our culture, our way of life, and control over our own destiny, 
if we have not already. Many local families are leaving the CNMI for 
Guam, Hawaii, or the mainland because just surviving in the CNMI is too 
difficult. I have recently learned that every year nearly half of our 
high school graduating seniors enlist in the U.S. Armed Services. Many 
of them enlist out of a deep sense of duty and patriotism, but many of 
them enlist because there are simply no realistic employment options 
that offer them a decent living wage.
    Madam Chairwoman, I see this bill as a positive initiative to 
gradually restore the benefits of the Covenant to the Chamorro and 
Carolinians for whom it was negotiated. I believe that H.R. 3079 is a 
good beginning; however I have a few suggestions. These are to further 
strengthen the bill so that the economic intent and promise of improved 
living standards provided in the Covenant are realized and sustainable.
    1.  The New Section 6(a) of the Covenant--Immigration and 
Transition. The bill currently calls for a transition period to begin 
one year after enactment. This seems a little ambitious, and I would 
suggest including language that would allow for a delay, if needed, to 
the beginning of the transition period. There are many things that need 
to be done during this time including the writing of federal 
regulations and amending local CNMI laws to conform to this Act. 
Hastily written rules would be difficult to enforce and could lead to 
unintended consequences. Likewise, unless carefully studied, the 
necessary changes to CNMI laws that currently cover immigration and the 
use of foreign labor could leave gaps in local statutes and affect our 
right to self government.
    2.  The New Section 6(c)(2) of the Covenant--Family Sponsored 
Immigrant Visas. I believe that this section is already covered by 
Section 506(c) of the Covenant and one or the other should be deleted.
    3.  The New Section 6(c)(3) of the Covenant--Employment Based 
Visas. This section would allow skilled workers to enter the CNMI as 
U.S. legal permanent residents outside of INA caps. While this would be 
an asset in helping us attract doctors and nurses, I see that it will 
become a revolving door for immigrant health care professionals 
entering the U.S. I would suggest that other provisions in the bill 
could be utilized to bring in these professionals and that this section 
be deleted.
    4.  The New Section 6(d) of the Covenant--Nonimmigrant Investor 
Visas. With the current on-going economic downturn in the CNMI, I 
respectfully request that this section include language that would 
allow for easy processing of new investors into the CNMI.
    5.  The New Section 6(h) of the Covenant--One-Time Nonimmigrant 
Provision for Certain Long-Term Employees. This is probably the most 
controversial and discussed section of this bill, and while there are 
no compromises that will make everyone happy I would like to share a 
few thoughts on this topic.
    I appreciate OIA's and the committee's intent to preserve the 
political and cultural rights of the indigenous populations in the 
CNMI, but I do not feel that this section truly addresses the problems 
at hand. We need these long staying non-resident workers as much today 
as we did when they were hired. The change of status for potentially 
thousands of these workers early in the transition period could leave 
us without a workforce if they exercise their option to leave 
immediately. Although this bill allows for a temporary guest worker 
program, I would like to see the transition period utilized to train 
and place as many indigenous persons into our private sector as 
possible. During this time I hope that we can refocus our educational 
system on training and skill development for our local people so they 
are ready to assume jobs currently held by non-residents, stabilize our 
economy, and build the Commonwealth we envisioned when we negotiated 
the Covenant.
    6.  Section 3(b) ``Waiver of Requirements for Nonimmigrant 
Visitors. This section would grant a visa waiver program for the CNMI. 
This is vital to begin the recovery of our tourism economy. While 
countries are not specifically named, this would allow tourists from 
China and Russia, the two potentially promising new markets that the 
Marianas Visitors Authority has worked so hard to develop, to visit the 
CNMI. I would like to take this opportunity to make the committee aware 
of the continued bilateral talks between the Peoples Republic of China 
and the United States. As more and more Americans wish to travel to 
China including to the 2008 Olympic Games to be held in Beijing, there 
is increased pressure for Chinese citizens to visit U.S. destinations. 
In recent bilateral talks the Chinese delegation expressed its desire 
that the U.S. Government make modifications in visa policy and 
procedures to promote travel to the United States including the CNMI by 
Chinese citizens. The Chinese delegation said such modifications would 
be conducive to expanding the bilateral air services agreement with a 
view to reaching full liberalization of air transport between China and 
the United States as the ultimate objective. I am attaching documents 
relating to these recent talks.
    The CNMI plays a vital role in meeting the U.S. obligations in this 
bilateral agreement. Allowing us to include China in a visa waiver 
program will help the U.S. meet its obligation under this agreement.
    7.  Section 3(d)(3) This section calls for the collection and use 
of appropriate user fees from employers of aliens during the transition 
period. I believe that this section is contrary to Section 703(b) of 
the Covenant, and that the fees should be covered over to the CNMI 
Government.
    8.  Section 3(e) ``Technical Assistance Program. There is no doubt 
that we need to invest in training for residents to prepare them for 
jobs currently held by non-residents. While this is included in the 
current language of the bill, I would like to see specific funds 
dedicated to areas that require formal training that leads to 
certification in the various trades and technical fields. We must 
invest in our education system to produce skilled labor. I believe that 
programs similar to Guam Community College which provides trades, 
technical and occupational training needs to be established. Without 
these funds and this training, made available by the federal 
government, I feel that this legislation will not work and instead lead 
to a failed federal policy in the CNMI.
    9.  I would like to see throughout this bill a greater role for the 
CNMI Government before, during, and after this transition period. I 
fear that decisions made in Washington without the active involvement 
of our local government, will not embrace the needs and true situation 
being faced in the CNMI.
    Madam Chairwoman, Thank you for including the Northern Marianas 
Islands Delegate Act as part of this bill. I know you share my 
sentiment that this piece of legislation should have been enacted years 
ago, and I appreciate your and the subcommittee's continued support for 
this bill. It would have been my preference that the CNMI have a 
Delegate sitting with you in the Committee when the issues of 
immigration and minimum wage were brought up. Unfortunately, that did 
not happen.
    A Delegate for the CNMI is a matter of fairness, democracy, and the 
basic tenets of our nation. The people of the CNMI are in support of a 
Delegate, and have waited long enough for it to become a reality. I 
have over the years provided this committee with countless resolutions, 
letters of support, and testaments of the peoples desire to participate 
in the national legislative body.
    Madame Chairwoman, the CNMI needs a ``course correction.'' Our 
chosen path to self sufficiency and prosperity has led us to an 
unsustainable economy. I believe that the people of the CNMI are ready 
for positive change and to work in partnership with the federal 
government to turn our Commonwealth around and so that once again we 
have the hope of achieving our dreams.
    Si Yu'us Ma'ase, Ghilisow,
    Thank you
                                 ______
                                 
    Mrs. Christensen. The Chair now recognizes The Honorable 
Pete P. Reyes, Vice President of the Senate, for five minutes.

           STATEMENT OF THE HONORABLE PETE P. REYES, 
            VICE PRESIDENT OF THE SENATE OF THE CNMI

    Senator Reyes. Thank you, Madam Chair. I am going to skip 
the introductions and all that, so, I'll get back when I have 
time to do that. Let me take this opportunity to applaud this 
Committee for including the CNMI Nonvoting Delegate Provision 
in House--H.R. 3079. Whereas, I stand by my belief that the 
CNMI should first be given a voice in Congress before any 
attempt at Federalizing our immigration system is made. This 
portion of the bill is an improvement to our current situation 
and a step in the right direction.
    Let me also take this opportunity to thank Congresswoman 
Bordallo for looking over the interest of her brothers and 
sisters in the CNMI during this period of time that they have 
been without a representative in Congress. Some of you may not 
notice, but Congresswoman Bordallo has her humble beginnings in 
the CNMI before moving to our sister island in Guam. Please 
correct me if I am wrong.
    If enacted into law, H.R. 3079 will have far reaching 
repercussions that will forever change the Commonwealth's 
economic, political, and cultural landscape. Therefore, I ask 
that the committee members take a thorough and measured 
approach to reviewing this piece of legislation and fully 
consider all of the ramifications this bill will have on the 
people of the CNMI. Please allow me this opportunity to point 
out some of my concerns on the bill as drafted. I'm skipping 
Paragraph 02 to make sure I am working the facts in, Madam 
Chair. As for the Federalization of our immigration system, I 
feel strongly that the traditional relationship between our 
islands and the U.S. Government has been a strong and 
productive one, but also one born of a mutual recognition that 
we are in many ways very different from a U.S. state or even 
other U.S. territories. The Covenant, subsequent legislation, 
and Federal and local jurisprudence have recognized the unique 
nature of our island Commonwealth and the importance of 
preserving local control over certain legal functions. I 
believe that our blanket application of the Immigration and 
Nationality Act to our islands under a ``one size fits all'' 
approach would cause irreparable harm to our struggling economy 
and impinge upon the notions of self-government that underlined 
the Covenant negotiation process.
    Furthermore, I must voice my concern with the ``One-time 
Nonimmigrant Provision for Certain Long-term Employees.'' 
Because we are a very small territory with a modest financial 
base, I fear that the granting of long-term resident status to 
contract workers and their family members who meet certain 
residency requirements may create massive financial drain on 
our limited public resources. Simply put, the more or less 
permanent presence of foreign nationals and the influx of their 
eligible family members will most likely tax our public 
services beyond capacity. This will result in a lower quality 
of life for everyone within our borders. I have no objection to 
granting nonimmigrant status to certain long-term nonresident 
workers similar to that granted to citizens of the Federated 
States of Micronesia. However, I am concerned that H.R. 3079 
does not establish adequate financial assistance mechanisms to 
allow us to sustain a large, permanent foreign national 
population, a very real problem that Congress has previously 
acknowledged through the Provisions of Compact-Impact Funding. 
Indeed, this bill is silent on the long-term economic and 
social impact of this new class of resident foreign nationals. 
I respectfully suggest that the committee consider this impact 
as it will certainly create a hardship for our already 
overburdened public services.
    With regard to the traditional oversight program in the 
bill, I feel the provision is vague and leaves many unanswered 
questions about the various roles of Federal agencies in the 
CNMI Government. Although I understand that the Department of 
Homeland Security will be tasked with the primary 
responsibility of drafting transitional regulations, the 
complete delegations of authority to executive agencies offers 
the CNMI no certainty in the transition process. The bill 
provides ``for recognizing local self-government, as provided 
for in the Covenant through consultation with the Governor of 
the Commonwealth.'' But consultation is not self-government. If 
Congress can and will do whatever it wants, regardless of any 
objections to it, the Governor may raise in the course of 
consultation, then the consultation is meaningless formality, 
and the proponent recognition of self-government is a facade. 
Our recent inclusion 902 talks are a case in point. This 
legislation should have been shelved until those negotiations 
produced an agreement. Otherwise, what is the point of the 
talks? Self-government means never having to say, ``Please do 
not do this to us.'' Moreover, transitional oversight by not 
one, but five Federal agencies could bring a struggling tourism 
industry to a screeching halt. Bureaucratic red tape could 
hamper the issuance of tourist visas to the extent that we lose 
all of the momentum we have thus far achieved.
    Let me end by commending this Committee for taking into 
consideration our concerns over the Federalization of our 
immigration system as stated by our very capable Washington 
Representative, Pete A. Tenorio. In a letter to The Honorable 
Jeff Bingaman, Chairman of the Senate Committee on Energy and 
Natural Resources, dated March 1st of this year, a majority of 
the CNMI legislature endorsed Representative Tenorio's position 
and his seven items of concern that were, for the most part, 
incorporated in H.R. 3079. In that letter, we asked for the 
consideration of two additional components.
    First, the creation of an immigration board that would be 
comprised of members of both the local and Federal governments 
for the purpose of reviewing on a periodic basis the 
effectiveness of our immigration policies. This board could 
make appropriate changes to immigration regulations without 
having to pass future laws or regulations.
    Second, the provision to mandate an independent study to 
evaluate the impact of changing the residency status of 
nonresident workers as it relates to the economic and political 
futures of the CNMI. If asked if Federal immigration laws 
should be applied to the CNMI, my answer would be an emphatic 
no. However, if Federalization is inevitable, I ask that these 
provisions be incorporated into the current bill. In closing, 
let me be clear that we at the CNMI take the matters of 
national security very seriously and are willing and active 
participants in making sure that our borders are secure. We 
welcome any Federal support in this regard.
    It would be noted, it should be noted, that the CNMI is 
home to the only live-fire artillery ground available to the 
United States Navy and Air Force during training exercises. We 
have opened up our resources in the Northern Mariana for this 
purpose without complaint. Further, the Commonwealth may hold 
the distinction of having the most number of active personnel, 
military personnel and all casualties breakout in the War of 
Iraq. We are Americans first and are proud of our patriotism to 
the United States. As a veteran of the Vietnam War myself, 
should our national security ever be threatened or come under 
attack, I would be the first one to come to the support of our 
nation's defense.
    And, finally, my primary concerns with this bill are, 
first, the Federalization of the CNMI's Immigration System will 
have a negative impact on our already troubled economy by 
stripping our Commonwealth of its ability to effectively manage 
tourist arrivals and foreign national laborers.
    Second, the creation of a new class of permanent resident 
aliens who would drain our public resources.
    And third, that the transition period is vaguely defined 
and offers the CNMI no assurances about which of the many 
successful elements of our immigration program can continue to 
operate under the transitional structure.
    And, ma'am, I wish you would extend your trip and enjoy the 
scenery and the beauty of our islands. I am not alleging that 
CNMI is better than any of the islands, I know you all come 
from an island.
    Mr. Faleomavaega. Sure you are. [Laughter]
    Senator Reyes. If you have time, we have beautiful golf 
courses and the beaches are superb. So please, enjoy.
    [The prepared statement of Senator Reyes follows:]

   Statement of The Honorable Pete P. Reyes, Senate Vice-President, 
              Commonwealth of the Northern Mariana Islands

    Chairwoman Christensen and Members of the Committee, thank you for 
allowing me this opportunity to present testimony in regards to H.R. 
3079, ``To amend the Joint Resolution Approving the Covenant to 
Establish a Commonwealth of the Northern Mariana Islands, and for other 
purposes.''
    Senate President Joseph M. Mendiola has had the honor of submitting 
testimony on similar legislation in S 1634 to the U.S. Senate Committee 
on Energy and Natural Resources earlier this year. For the record, I 
concur with the President's position as stated in that testimony and 
will repeat the salient points for this Committee along with some 
comments of my own. Let me also take this opportunity to applaud this 
Committee for including a CNMI non-voting delegate provision in H.R. 
3079. Whereas, I stand by my belief that the CNMI should first be given 
a voice in Congress before any attempt at federalizing our immigration 
system is made, this portion of the bill is an improvement to our 
current situation and a step in the right direction.
    If enacted into law, H.R. 3079 will have far reaching repercussions 
that will forever change the Commonwealth's economic, political, and 
cultural landscape. Therefore, I ask that the committee members take a 
thorough and measured approach to reviewing this piece of legislation 
and fully consider all of the ramifications this bill will have on the 
people of the CNMI. Please allow me this opportunity to point out some 
of my concerns with the bill as drafted.
    As a member of the CNMI Legislature, I have three main areas of 
concern with the bill as drafted. First, I object generally to a 
complete federal takeover of the CNMI immigration system. Second, I am 
concerned that the provisions for granting nonimmigrant status to 
certain contract employees may overwhelm our already strained public 
resources. Third, I feel that the transitional oversight provision is 
vague and leaves many unanswered questions about the various roles of 
federal agencies and the CNMI Government.
    As for the federalization of our immigration system, I feel 
strongly that the traditional relationship between our islands and the 
U.S. Government has been a strong and productive one, but also one born 
of the mutual recognition that we are in many ways very different from 
a U.S. state or even other U.S. territories. The Covenant, subsequent 
legislation, and federal and local jurisprudence have recognized the 
unique nature of our island Commonwealth, and the importance of 
preserving local control over certain legal functions. I believe that a 
blanket application of the Immigration and Nationality Act (INA) to our 
islands under a ``one size fits all'' approach could cause irreparable 
harm to our struggling economy and impinge upon the notions of self-
government that underlined the Covenant negotiation process.
        ``[T]he authority of the United States towards the CNMI arises 
        solely under the Covenant....[I]t is solely by the Covenant 
        that we measure the limits of Congress' legislative power.'' 
        United States ex rel. Richards v. De Leon Guerrero, 4 F.3d 749, 
        754 (9th Cir. 1993) The Covenant provides that U.S. immigration 
        laws will not apply to the CNMI ``except in the manner and to 
        the extent made applicable to them by the Congress by law after 
        the termination of the Trusteeship Agreement.'' (Covenant 
        Sec. 503.)
    However, the Covenant also provides that ``[t]he people of the 
Northern Mariana Islands will have the right of local self-government 
and will govern themselves with respect to internal affairs in 
accordance with a Constitution of their own adoption.'' (Covenant 
Sec. 103) We cannot simply focus on Section 503 and ignore the conflict 
or tension with Section 103. The whole Covenant was approved together, 
and its various sections need to be reconciled and read in harmony with 
each other.
    Section 103 especially cannot be ignored, because the development 
and establishment of self-government was the whole point of the 
Trusteeship and the Covenant. There could be no Covenant without 
Section 103--it is the only essential provision in the whole document. 
Everything else (US citizenship, application of federal laws, etc.) was 
optional, and could all have been done differently (as it was with the 
freely associated states, for example). Section 103 is the what of the 
Covenant; everything else, including Section 503, is just the how.
    The Ninth Circuit Court of Appeals has established a balancing test 
for resolving questions of this kind: ``[W]e think it appropriate to 
balance the federal interest to be served by the legislation against 
the degree of intrusion into the internal affairs of the CNMI.'' United 
States ex rel. Richards v. De Leon Guerrero, 4 F.3d 749, 754 (9th Cir. 
1993)
    Those are the terms in which the debate should be framed. What is 
the federal interest to be served by the proposed legislation? How 
important or significant is that interest? How greatly does the 
proposed legislation intrude into the internal affairs of the CNMI? 
Does it intrude more deeply than it needs to in order to serve any 
legitimate federal interest? Currently in the Commonwealth we have the 
presence of various federal agencies including the Transportation 
Security Administration, the Federal Bureau of Investigation and the 
United States Coast Guard. It may be only that additional resources to 
the agencies already established here are necessary to achieve the 
desired federal effect of increased border security.
    As we look beyond our current economic downturn to a future with a 
much diminished apparel industry, we continue to search for alternative 
economic activities to generate income for our Commonwealth. Past and 
present administrations have taken steps to diversify our tourism 
economy, and have in recent years opened new tourist markets beyond the 
CNMI's traditional tourist market of Japan. These new markets include 
China, South Korea, and Russia. In 2004 the CNMI signed an Approved 
Destination Status Agreement with China, providing the CNMI with access 
to Chinese tourist markets and direct flights from major Chinese 
cities. Because of the anticipated boom in Chinese outbound tourism and 
the proximity of the CNMI to the Chinese mainland, we hope to 
experience significant growth in the Chinese tourist market in the 
coming years. Maintaining local control over immigration is critical to 
the development of this market, as our local immigration authorities 
are able to work directly with Chinese government officials and respond 
to the changing conditions of the market as needed. Our long term 
strategy also focuses on the development of the South Korean market. 
Arrivals from Korea have been steadily increasing even as other country 
numbers decline. Finally, we have been working diligently to develop an 
eastern Russia tourist market with regularly scheduled charter flights 
to the CNMI. The Russian market is characterized by longer than average 
visits resulting in increased revenues, a high percentage of return 
visitors, and little to no legal complications. As with the development 
of the Chinese market, I do not believe the CNMI could have experienced 
such a rate of success without local immigration control. It is here 
that we should consider both national security and the economic well-
being of the Commonwealth. Immigration is paramount to national 
security, but we must be cognizant of the impact federalization will 
have on our economy. I feel that our full absorption into the INA and 
the paternalistic nature of the transition plan will threaten this 
growth and, as a consequence, undermine our economic recovery.
    An additional problem with federalization is the negative impact it 
will have on our ability to engage a foreign national labor force for 
important positions that simply cannot be filled locally. Foreign 
nationals, and our ability to process them locally, have become an 
important component of our continued development. For twenty-five years 
foreign laborers have contributed in a vital way to our islands: 
sustaining businesses, building schools, and improving public works. 
They have helped to transform the CNMI into a dynamic, multicultural 
society teeming with potential. In light of our struggling economy, I 
feel that local control over foreign national labor is essential to 
efforts to rebuild critical industries such as tourism and regional and 
international education. The recent passage of minimum wage legislation 
in the U.S. Congress will eventually raise local wages to the federal 
level and provide more economic security to foreign national workers. 
This should help to alleviate any lingering fears that our foreign 
national workers are not being compensated appropriately. Furthermore, 
we are now debating a labor reform bill in the CNMI Legislature. This 
Act will reform current foreign national labor laws, provide for 
increased local participation in the workforce, and ensure the fair 
treatment of foreign nationals working in the CNMI.
    I would like to assure the Committee that the CNMI is making every 
effort to ensure that our borders are secure and our immigration 
policies reflect current best practices among the nations of the world. 
In 2005, the Commonwealth Legislature passed the Human Trafficking and 
Related Offenses Act through Public Law 14-88. The Act, supported by 
the U.S. Department of Justice, has become an important and effective 
tool in the CNMI's continuing efforts to combat labor fraud and 
trafficking. Also in 2005, the Legislature passed Public Law 14-92, an 
act to amend our voluntary departure law to provide immigration 
prosecutors with improved procedural options in deportation cases. This 
law should lead to a more consistent and expedient system for resolving 
pending cases. Additionally in the 2005 session the Legislature passed 
Public Law 14-59, the ``Anti-Terrorism Act of 2004,'' Public Law 14-63 
``An Act to Establish the Office of Homeland Security,'' and Public Law 
14-84, legislation which corrected constitutional deficiencies in 
certain immigration statutes that were struck down by the U.S. District 
Court for the Northern Mariana Islands in Gorromeo v. Zachares, Civil 
Action No. 99-0018 (C.N.M.I. 2000). Most importantly, the impending 
passage of our labor reform bill will serve as a means of decreasing 
our traditional reliance on foreign national workers through the 
training of local residents. It will also ensure that resident and 
foreign national workers alike are treated fairly in the employment 
process. Finally, the Division of Immigration continues to work on 
closing potential loopholes in our immigration system and should be 
commended for its reform efforts. The Division has assisted in 
developing effective border management and labor identification systems 
and continues to welcome the assistance of federal agencies. The Border 
Management System (BMS) generates a record of all entries to and exits 
from the Commonwealth, regardless of citizenship. Immigration 
investigators have instant access to arrival information and can 
confirm the departure of those foreign nationals with expired contracts 
and those ordered deported from the Commonwealth for violating local 
law. The Labor and Immigration Identification System (LIIDS) tracks all 
foreign national labor contracts, job category authorizations, and 
permit status of non-citizen workers in the Commonwealth. This allows 
immigration and labor investigators to quickly determine the permit 
status of all foreign national workers involved in labor complaints and 
administrative hearings, as well as compile data on overstaying aliens 
in every entry permit category. As always, we welcome cooperation with 
U.S. agencies, and any technical or financial assistance they may 
provide, in the training of our local immigration investigators, 
inspectors, and processing personnel.
    I wish to be clear that we welcome U.S. involvement in our 
immigration system short of the complete application of the INA. 
Immigration issues can sometimes have defense and foreign policy 
implications, and as such are a legitimate area of federal concern. 
However, the status of aliens in the CNMI is also deeply interwoven 
with internal affairs, since they constitute approximately half the 
population and are involved in nearly all facets of our social and 
economic life. The impact of the extension of federal immigration laws 
on the CNMI's internal affairs may not have been so great had it been 
done in, say, 1978 when there were very few aliens here. The impact now 
is much greater, and that must be taken into consideration.
    I feel strongly that several components of our immigration program 
are both secure and economically beneficial to our islands and do not 
require federal pre-emption. Our BMS system tracks both entries and 
exits, giving us the advantage of knowing not only who is arriving but 
also who is leaving the Commonwealth. Our foreign national labor 
program will enable us to redevelop an economic infrastructure that has 
suffered setbacks as a result of garment closures, SARS, global 
terrorism, and a downturn in several Asian economies. Finally, local 
control over visitor entries is critical to the success of our major 
remaining industry--tourism. With local control, we can continue to 
work on developing markets that are uniquely suited for the CNMI 
because of geography or cooperative agreements.
    I must voice my concern with the ``One-Time Nonimmigrant Provision 
for Certain Long-Term Employees.'' Because we are a very small 
territory with a modest financial base, I fear that the granting of 
long term resident status to contract workers and their family members 
who meet certain residency requirements may create massive financial 
drain on our limited public resources. Simply put, the more-or-less 
permanent presence of foreign nationals and the influx of their 
eligible family members will most likely tax our public services beyond 
capacity. This will result in a lower quality of life for everyone 
within our borders. I have no objection to granting nonimmigrant status 
to certain long-term nonresident workers similar to that granted to 
citizens of the Federated States of Micronesia, however I am concerned 
that H.R. 3079 does not establish adequate financial assistance 
mechanisms to allow us to sustain a large, permanent foreign national 
population, a very real problem that Congress has previously 
acknowledged through the provision of Compact-Impact funding. Indeed, 
the bill is silent on the long-term economic and social impact of this 
new class of resident foreign nationals. I respectfully suggest that 
the Committee consider this impact, as it will certainly create a 
hardship for our already overburdened public services.
    With regard to the transitional oversight program in the bill, I 
feel the provision is vague and leaves many unanswered questions about 
the various roles of federal agencies and the CNMI Government. Although 
I understand that DHS will be tasked with the primary responsibility of 
drafting transition regulations, the complete delegation of authority 
to executive agencies offers the CNMI no certainty in the transition 
process. The bill provides for ``recognizing local self-government, as 
provided for in the Covenant...through consultation with the Governor 
of the Commonwealth.'' But consultation is not self-government. If 
Congress can and will do whatever it wants, regardless of any 
objections to it the Governor may raise in the course of consultation, 
then the consultation is a meaningless formality, and the purported 
recognition of self-government is a facade. Our recent inconclusive 902 
talks are a case in point. This legislation should have been shelved 
until those negotiations produced an agreement. Otherwise, what is the 
point of the talks? Self-government means never having to say, ``Please 
do not do this to us.'' Moreover, transitional oversight by not one, 
but five federal agencies could bring our struggling tourism industry 
to a halt. Bureaucratic red tape could hamper the issuance of tourist 
visas to the extent that we would lose all of the momentum we have thus 
far achieved.
    Furthermore, the cost-sharing requirement under the Technical 
Assistance Program is not feasible at this time due to the poor 
financial health of our government. If the transition plan will direct 
most or all immigration fees to the federal government, then local 
agencies will not be in a position to cost-share. In the event that the 
federal government sees fit to take control of the immigration system 
that gives us a competitive advantage over other regional tourist 
destinations such as Guam, Palau, the Philippines, Hawaii, and Bali, 
the federal government should shoulder one hundred percent of the cost 
to retrain our local workforce and develop new industries in the 
Commonwealth.
    Let me end by commending this Committee for taking into 
consideration our concerns over the federalization of our immigration 
system as stated by our very capable Washington Representative Pete A. 
Tenorio. In a letter to The Honorable Jeff Bingaman, Chairman of the 
Senate Committee on Energy and Natural Resources, dated March 1st, 
2007, a majority of CNMI legislators endorsed Representative Tenorio's 
position and his seven items of concern that were for the most part 
incorporated into H.R. 3079. In that letter we asked for the 
consideration of two additional components. First, the creation of an 
immigration board that would be comprised of members of both the local 
and federal government for the purpose of reviewing on a periodic basis 
the effectiveness of our immigration policies. This board could make 
appropriate changes to immigration regulations without having to pass 
future laws or regulations. Second, a provision to mandate an 
independent study to evaluate the impact of changing the residency 
status of non-resident workers as it relates to the economic and 
political futures of the CNMI. If asked if federal immigration laws 
should be applied to the CNMI my answer would be an emphatic no. 
However, if federalization is inevitable I ask that these provisions be 
incorporated into the current bill.
    Finally, the more the federal government intervenes in CNMI 
matters, the more it will be called upon to intervene in the future. 
Will Congress, having once intervened, show any restraint when faced 
with the inevitable future complaints? We should be at the table with 
Congress as equal partners, hammering out a fair and mutually agreeable 
solution to any differences there may be between us. Our critics should 
address you and us together, not you over our heads.
    We do not want the fate of the CNMI indigenous population to be the 
same as those in Guam, Hawaii, and the U.S. mainland. We do not want to 
become a marginalized, alienated minority because of unilateral federal 
action. We do not want to face a political future of ``native rights'' 
movements that go nowhere, but never end because of dispossession that 
feeds endless frustration and bitterness.
    Substantive 902 consultations are necessary in order to maintain 
the mutual respect, good faith, and understanding that the Covenant 
guarantees, and without which the entire system that the Covenant 
establishes would fail. This is particularly true in time of 
differences or disputes between the parties. Successful 902 talks 
should precede any legislation that would so drastically alter the 
nature of the relationship between the United States and the Northern 
Mariana Islands such as that now proposed.
    The CNMI was exempted from U.S. immigration laws in the first place 
in order to avoid a repetition of what occurred on Guam, where the 
political power of the native population was significantly diluted by 
foreign immigration under U.S. laws, and where the indigenous 
population was overwhelmed by immigration laws over which it had no 
control.
    The removal of local authority over the terms and duration of 
aliens' stay here, not to mention the granting of long-term residency 
rights to all or any substantial portion of this population, would 
drastically and permanently change the social, economic and political 
landscape of the CNMI, and would create exactly the situation that 
everyone had intended to prevent when the Covenant was first entered 
into.
    The people of the United States are currently engaged in their own 
vigorous debate regarding the national capacity to assimilate large 
numbers of immigrants. The proportion of immigrants who would 
potentially need to be absorbed in the CNMI is very much greater, and 
the society into which they would be absorbed very much smaller and 
more fragile than in the case of the United States. We need to have our 
own debate, and reach conclusions we can accept. There must be some 
middle path between making them all future citizens and not inviting 
them here at all, and we need to find that path ourselves.
    Here is what I would like to hear from the Committee: 1) The 
Committee recognizes and respects the CNMI's unique self-governing 
status under the Covenant; 2) The Committee wishes to sit down with the 
CNMI, as equal and fraternal partners, to discuss matters of our mutual 
interest regarding immigration, population, and the future course of 
economic development in the CNMI; 3) The Committee stands ready, if 
necessary, to assist the CNMI with manpower, expertise, technology, 
cooperative enforcement, mutually reinforcing legislation, or 
otherwise, as we may mutually agree to be appropriate to the 
improvement or enhancement of the CNMI immigration system, and to 
advance the best interests and prosperity of the CNMI people; and 4) 
Any such assistance would, of course, be provided solely at the request 
and with the free consent of the CNMI government, and would be 
immediately withdrawn whenever the CNMI government deems it to be no 
longer necessary or appropriate to its purpose.
    In closing, let me be clear that we in the CNMI take matters of 
national security very seriously and are willing and active 
participants in making sure that our borders are secure. We welcome any 
federal support in this regard. However, my primary concerns with this 
bill are first that federalization of the CNMI's immigration system 
will have a negative impact on our already troubled economy by 
stripping our Commonwealth of its ability to effectively manage tourist 
arrivals and foreign national labor, second that the creation of a new 
class of permanent resident aliens will drain our public resources, and 
third that the transition period is vaguely defined and offers the CNMI 
no assurances about which of the many successful elements of our 
immigration program can continue to operate under a transitional 
structure.
    I thank you for considering my comments on H.R. 3079 and for 
allowing me this opportunity to address the Committee on this critical 
issue.
                                 ______
                                 
    Mrs. Christensen. Thank you, thank you. We did take the 
time yesterday to do some touring and visiting the island. We 
appreciate it and we appreciate all of your testimony.
    I will now recognize myself for five minutes of 
questioning. I guess I will begin with the Governor. In spite 
of the standing that during the Covenant negotiations the U.S. 
Government was really reluctant to give control of immigration 
to the CNMI, they agreed eventually to do it for a period of 
time.
    So, Governor, is it not true that while the Covenant 
exempted CNMI for most of the provisions of U.S. immigration 
laws, that allowed you to control your own immigration, that 
Section 503 of that same Covenant, Public Law 94-241, 
explicitly provides that Congress has the authority to make 
immigration and naturalization laws applicable to the CNMI? And 
having that in the Covenant, wasn't that something that was 
agreed to, that the U.S. would have authority to change this at 
some point?
    Governor Fitial. I don't have any qualms over that, Madam 
Chairwoman. I believe that Section 503 explicitly allows the 
Federal Government to extend the application of U.S. 
immigrations to the islands, but my concern here is; is it 
necessary? Because we have been operating our immigration and 
labor systems for quite some time. And although we have made 
mistakes in the past, we have also corrected those mistakes. 
And I am speaking from my experience as Governor now. I believe 
that our worker guest program is doing very, very well and we 
have enforced those labor laws and as you can see from my 
written testimony, I have included the proponents of this 
administration and enforcement of these labor laws and 
immigration laws. So, the point is, is there assurance that 
under a Federal system our economy will grow? That's my 
concern.
    Mrs. Christensen. Well, the problems that occurred that 
exist now that everyone has explained, the downturn of the 
economy, the leaving, and so forth, has taken place while CNMI 
has had the control over immigration. So, I am not clear now 
why, you know, not only bringing full Federalization, but 
providing for some very special provisions that allow for guest 
workers, for people to be brought into work that are outside of 
the normal caps of the rest of the United States, and other 
special provisions within this legislation that say that the 
agencies that you're concerned about must provide flexibility 
so as not to interfere with tourism, and so forth and so on. I 
am still not clear why this immigration now would worsen the 
condition that developed while the CNMI had control over 
immigration.
    Governor Fitial. The provisions of both 1634 and 3079 are 
hopeful. Hopeful means never been tested. But my experience, 
not hope, when we were under the Trust Territory, we came away 
from the Trust Territory in 1978 with only $12 million of 
revenues, resources. Why? There was no private sector 
development during the time when we were under the Trust 
Territory. So, when we became Commonwealth by using the 
economic tools provided to the Commonwealth under the Covenant, 
the ability to control our own immigration and also labor, we 
were able to bring in skilled workers and that really helped 
grow the $12 million to $260 million dollars of local resources 
within 20 years.
    Mrs. Christensen. Thank you for your answer. Let me ask 
both the Speaker and the Vice President of the Senate, do you 
feel that this Federal takeover of immigration in the CNMI is 
inconsistent with the right of self-determination--when the 
Covenant was negotiated and the U.S. agreed to allow the CNMI 
to have control over immigration as I stated before. However, 
the CNMI--and it was to control the coming in of people from 
outside, to limit that, and the opposite of the meaning has 
happened, that the CNMI used the authority to build a non-
sustainable economy on the backs of the guest workers in that 
program, which has really supplanted the local workforce, which 
is the majority of the population now. So, in light of this, do 
you really believe that this immigration--the Federalization is 
in conflict with your self-governance, considering that all of 
the states and the territories are under Federal immigration 
laws? Both of you, yes.
    Senator Reyes. Thank you, Madam Chair. I will try to 
respond to that to the best of my ability. I believe that the 
Federalization--the Covenant provides for the U.S. Congress to 
unilaterally change immigration; that's very clear. But at the 
same time, it also provides for the CNMI to be self-governing, 
and those were approved at the same time. I believe that by 
changing the issue on immigration, it questions the provisions 
of self-governing plus the CNMI being given the authority to 
govern itself. That's my answer.
    Mrs. Christensen. Mr. Speaker?
    Speaker Babauta. Furthermore, Madam Chair, as the Governor 
earlier responded to that part of that question. It does. 
Personally, to me, as I can see in the bill as it was drafted, 
it impinges and infringes upon the local control, primarily 
lowering our depressed economic Commonwealth. And that, in a 
sense where it disengages our ability to be able to procure and 
adjust or otherwise control whether we need or do not need 
those Foreign National Workers Act as it is required by our 
government and that of the private sector.
    Mrs. Christensen. I am going to recognize the Congressman 
from American Samoa for five minutes. My time is up.
    Mr. Faleomavaega. Thank you, Madam Chair. I want to thank 
the Governor, the Speaker, and my good friend, Representative 
Tenorio, and the Vice President for their most eloquent 
statements and presentations. I can't think for a moment the 
combined sense of experience that all of you gentlemen have had 
in the development of CNMI's political--from infancy, and I 
still recall in the days that when the various island groups of 
Micronesia were all under one umbrella under the Trust 
Territory of the Pacific Islands. Thirty-one years now, there 
has been some very serious problems attending the needs of the 
CNMI, its unique relationship with the United States and its 
sister territories, and I have so many questions, I don't know 
where to start. Maybe I could start with one.
    I recall ten years ago or about ten years ago, I was a 
member of the delegation led by then-Chairman of the House of 
Natural Resources Committee, Congressman Don Young from Alaska, 
and I think there were at least 12 of us who came to CNMI. And 
the Congressman then, former Congressman Bob Underwood, and I 
had the unpleasant experience of having to meet with some 700 
guest workers who were screaming bloody murder and what to do 
with their status, some of them stateless conditions or the 
situations, I'll be up front with you gentlemen, was not very 
positive.
    And I realized that sometimes the perspectives were taken 
quite differently how we view things here and how Washington 
also views things there. I have always said that sometimes as a 
matter of perspective, the Westerners' point of view about 
things, it's either a bird's eye or a worm's eye view of 
things. And I say the Pacific Islander's point of view is a man 
sitting on top of the mountain looking at the horizon of the 
ocean, seeing a different perspective about what's out there in 
the ocean. Then a man also sitting on top of the tree looking 
and noticing that there is a man in the canoe doing something 
in the ocean. And the third perspective is the man in the canoe 
actually catching fish. And who is to say that one perspective 
is better than the other? And this has always been the problems 
that we've had over the years in dealing with the insular 
areas.
    I don't know how else I could square with you gentlemen and 
be up front and be frank with you in terms of, if whether or 
not insular areas and the issues and the needs of the people 
living in insular areas are that important to provide attention 
from the national leaders both in the Congress as well as in 
the Administration. In my humble opinion, we're not even on the 
radar screen. Now, take it or leave it, but that's been always 
the struggle over the years. And I don't mean to say that it's 
because of the insincerity or the lack of wanting to do things 
on the part of our national leaders, both Executive and in the 
Congress, but because the whole world is centered in wanting to 
get their attention in some other issues affecting global 
issues and not necessarily just insular affairs. So, I just 
wanted to give you that perspective.
    Governor, you've mentioned that you've made tremendous 
improvements on your guest worker program. Can you elaborate a 
little more on that, because I still see people outside this 
courthouse building complaining something about their status as 
nonimmigrant workers or whatever they said they should be 
entitled to?
    Governor Fitial. Well, most of the people that you see 
outside are illegals. [Laughter]
    Mr. Faleomavaega. OK. And as illegals, what is the 
Government of Northern Marianas doing about it?
    Governor Fitial. We're processing them, you know, and 
eventually they will all be deported.
    Mr. Faleomavaega. And in the process that some of these do 
not have passports, and so they become stateless and they are 
given countries of origin do not allow them to return, what do 
we do about that?
    Governor Fitial. Well, for the stateless, then we have to--
because some of these nonresident workers, they deliberately 
destroy their passports when they get here.
    Mr. Faleomavaega. Oh, I know that. They do it even to us.
    Governor Fitial. That's true.
    Mr. Faleomavaega. We've had several, and with all due 
respect, aliens who literally throw away their passports as 
they're about to come to American Samoa, then they claim 
asylum, refugee or whatever you want to call it, and they 
expect us to take care of them.
    Governor Fitial. That's true. But under the human 
trafficking, you know, that's Federal, although we are helping 
out in that regard. But on these assignees (sic), we have a 
procedure by statute that we have to follow in processing 
asylum seekers. So--well, let me just say this, that we have 32 
cases altogether, asylum seekers, and all of them except one 
have been processed. So, that's the reason why I am saying that 
we are enforcing these labor immigration laws more effectively 
now than before.
    Mr. Faleomavaega. Do you honestly believe that the proposed 
bill can do a better job in taking care of the guest worker 
program than what you're doing now, as what CNMI is doing?
    Governor Fitial. Congressman, if the Federal Government 
wants to take over this asylum program, they may have it, any 
time.
    Mr. Faleomavaega. No, the guest worker program.
    Governor Fitial. Oh, the guest worker program? No, we need 
them.
    Mr. Faleomavaega. Oh.
    Governor Fitial. Because we need the guest workers in order 
to grow our local economy. And once we allow them to become 
permanent residents, they will go for where pasture is greener.
    Mr. Faleomavaega. Do you see the danger where CNMI could 
become a conduit for aliens who just want to come and take 
advantage of whatever it might be, their immigration status for 
the one exact purpose is to go to the United States and not 
live here in the CNMI. I know the complaints you have is that 
they're not going to stay here so, therefore, it's not going to 
help the workforce here in CNMI. But, do you see that this has 
been one of the problems that you are confronted with--aliens 
who come here with only one purpose? They want to go to the 
U.S.; they don't want to stay in the CNMI.
    Governor Fitial. Few of them do that. You know, they would 
come and these are the asylum seekers. You know, they try to 
use the CNMI as a stepping stone.
    Mr. Faleomavaega. You know, right now the immigration issue 
in our national government is one big, big controversy.
    Governor Fitial. And I know that.
    Mr. Faleomavaega. And it's not getting any better, it's 
getting worse. My time has run out. I'll wait for the second 
round, Madam Chair, thank you.
    Mrs. Christensen. Thank you, Mr. Faleomavaega. The Chair 
now recognizes Congresswoman Bordallo for questions.
    Ms. Bordallo. Thank you, Madam Chair. Senator Reyes, first 
to answer your question in your testimony, my father taught in 
the public school system here and while he was here my family 
lived here. I'd like to ask the Governor the first question. In 
your position, Governor, do you know the number of guest 
workers who have fled the CNMI by boat or otherwise to come to 
Guam illegally in the last five or so years, and when was the 
most recent case, and does the CNMI track such occurrences?
    Governor Fitial. Well, I don't have the actual figures with 
me, but we do have that figure and----
    Ms. Bordallo. Could you provide that for the Committee?
    Governor Fitial. I am more than willing to provide that to 
the Committee.
    Ms. Bordallo. All right. My next question is for Speaker 
Babauta. You testified that you believe that full application 
of the Immigration and Nationality Act, the INA, to the CNMI 
could threaten growth in China and Russia visitor markets. Now, 
what is the current practice for entry into the CNMI for 
citizens from these two countries and are standards imposed 
similar to the regulations in the Federal system? Can you 
elaborate further why this would threaten the CNMI visitor 
program?
    Speaker Babauta. Thank you, Madam Chair, I mean, 
Congresswoman Bordallo. Although I don't have the real specific 
policies of the local immigration, but normally we are using 
now the so-called Approved Destination Status, Visa Waiver 
Program, where applicants are admitted to our CNMI Immigration 
System and are screened, and individually are being processed 
by our immigration system. That's how we allow these tourists 
in the market to come to the CNMI.
    Ms. Bordallo. Could you provide the Committee also with 
more information on that?
    Speaker Babauta. Definitely, with the assistance of our 
Immigration Director, that is.
    Ms. Bordallo. Thank you, Speaker. I have another question 
for you. You testified that Federalization will have a negative 
impact on sourcing foreign labor that cannot be filled locally. 
Now, can you elaborate as to what types of training are 
currently available here and what marketing plans have been 
pursued to attract local hires, and what specific suggestions 
might you have for increasing public awareness and 
participation in other industries that currently utilize 
foreign labor.
    Speaker Babauta. The Administration has engaged in a very, 
very adventurous policy that would now require a majority of 
the private sector to induce and process local applicants from 
the indigenous population who are jobless through our labor 
systems and allow these people to be picked up by the private 
sector.
    Ms. Bordallo. Do you have training programs?
    Speaker Babauta. Most of the use industry has training 
programs, although our Northern Marianas College has a very 
small program that allows for training for the nursing and very 
small technical fields.
    Ms. Bordallo. And would you say they are successful and you 
do have a lot of the local people applying for these training 
programs?
    Speaker Babauta. I would say yes and no. I have seen 
technical people be certified by our embassy in various 
technical fields, engineering, masonry, carpentry. I have seen 
people are now serving in the offices and serving our people 
through the specific program that they want.
    Ms. Bordallo. And the third question, Speaker, in your 
written statement you've claimed that the CNMI continues to 
update its immigration laws to address new developments in 
immigration enforcement, and this is clearly seen with the 
passage of five bills into laws since 2004. Now can you 
elaborate on the current House Bill 15-38 and explain how it 
addresses immigration concerns in the CNMI?
    Speaker Babauta. Thank you very much. 15-38 deals mostly 
with labor issues, on labor policy, performing the policy. That 
particular bill enables more, in the aspects of enforcement, at 
the same time catering to the needs of the private sector. 
There is one thing, one provision that affects the immigration 
issue there and that's the duration of any non-immigrant or 
rather, non-resident workers, foreign national workers, that 
would enter the Commonwealth to stay longer than three years. 
So, we inject an interval of three years at the most, with a 
six months working service, to allow for an additional three 
months if one employer wishes to continue the employment of 
that particular individual or individuals.
    Ms. Bordallo. All right. I see my time is up, and I would 
like a second round, Madam Chair.
    Speaker Babauta. Thank you.
    Mrs. Christensen. Thank you. We'll have a second round of 
questions, and I hope we won't take too long with them. But, I 
guess I would ask Representative Tenorio my next question. You 
know we were warned that the enactment of H.R. 3079 would have 
far-reaching repercussions that will forever change the 
Commonwealth's economic, political, and cultural landscape. In 
your opinion, do the positive impacts outweigh the negative or 
vice versa?
    Representative Tenorio. Thank you, Madam Chairwoman. I have 
said in my written statement and also in my statement for the 
record, and my older statement, that we have probably reached a 
point now where we do have major, major problems with the 
presence of non-resident workers and the presence of so many 
non-residents here that continue to draw in, in an 
uncontrollable manner. I see the new proposal by this bill to 
correct those errors to provide an institutionalized control so 
that there is an organized way to bring in people, to treat 
them, to keep them working over here, and to also repatriate 
them if the business community does not need them anymore.
    What I am saying now is that we want to rely almost 100 
percent on a non-resident workforce. We seem to forget the fact 
that we do have our own indigenous people here that are also 
looking for jobs, that need jobs. As a matter of fact, they 
should be prioritized in being hired, but we're so used to the 
idea of an easy recruitment and, you know, cheaper recruitment 
for that matter, and we forget to train our own people. We 
become so complacent to the idea that, what's easy is good for 
us, good for business, and we have to change that mentality.
    And I see this as a major problem for our community. I see 
our people leaving the islands because there is no opportunity 
for them. It's good that we now have a somewhat nominal 
increase in our minimum wage that would encourage new workers 
to take local jobs from local businesses, but at the same time, 
we continue to lose our own talented workforce, going off 
island who's just not--there many opportunities.
    I see the proposed bill has something that is positive. I 
know that there will be problems in the beginning, that there 
is always this concern and fear about, you know, you're faced 
with new conditions and new compliance to meet, but I think 
overall if the bill is properly reviewed and provided with the 
necessary regulations and procedures, I am sure that it would 
work in the long run. And I just want to also mention, Madam 
Chairwoman, that it is in the interest of the Commonwealth 
Government to look at the relationship with the Federal 
Government as one that should be protected. I, for one, as a 
negotiator, fully acknowledge the fact that the U.S. 
Government, the Congress has the prerogative to amend the 
Covenant to take away immigration control. Of course, subject 
to, as the negotiated history had indicated, that it's not by 
capricious manner, but in a way that Congress will take into 
account the then existing situation, not conditions, in the 
Commonwealth. What the Committee or the Senate or the House is 
doing is precisely that. Providing opportunities for the local 
government to be engaged in this process and to also take into 
account the current economic conditions. We are worried that 
this proposal would destroy the economic future of the 
Commonwealth. I don't believe that it will. I think by 
institutionalizing this framework of immigration, it would 
protect, it would enhance, in the future, the economic well-
being of the Commonwealth. Right now we're in a--really worse 
situation than it is. We're bankrupt just about. We don't have 
any investment coming in, and people are not sure whether or 
not to stay or go out and seek investment someplace else. And 
we do have a very unstable situation. We need to fix that. And 
I believe the Federal law that would be provided under this 
framework would provide for that solution, not all of it, but 
to a large extent it will be the solution to many of our 
problems. Thank you.
    Mrs. Christensen. Thank you. Let me just try to squeeze in 
another question here to the Speaker. You referenced the new 
labor law that has been introduced. You said that it will 
provide more protections for the guest workers and more--and, I 
haven't seen the bill. Now, the Federal Government contends 
that despite the protections that already exist, there continue 
to be injustices perpetrated on the temporary guest workers. 
How will the bill change that? They are protections that are 
already in place, and yet we still find people being brought in 
here with promises that are empty. No jobs. We have people who 
are continuing to remain here without jobs and without any 
legal protections, and very little enforcement. How will this 
bill change that?
    Speaker Babauta. Thank you, Chairwoman. It further re-
enhances and reinforces present labor provisions, and primarily 
the aspects of enforcement of fines and penalizes the 
activities of illegal recruitment, criminalizes it.
    Mrs. Christensen. Isn't that illegal right now, to bring 
someone in without--who does not have a job to come to 
(unintelligible)?
    Speaker Babauta. Yes, ma'am. But on some aspect cases, as I 
have read from reports, many of these have used the entry as 
tourists and many that they arrived here for 30 days and, like 
the Governor mentioned earlier and so has Congressman 
Faleomavaega, some of these people are just tend to have excuse 
of losing their passports. We don't know whether they lost it 
or not.
    However, there are recent cases now that have, I would say, 
high profile ramification or the systems out here used by not 
only--not the local people, that foreign nationals who have 
capriciously established themselves as a legitimate business 
people, introducing their own national to the CNMI in a 
different manner other than allowing to pass through in the 
system.
    Mrs. Christensen. I see the Governor wants to answer, but 
before he does I just want to say that we saw some instances of 
cases where Labor had granted the number and they had gone 
through the process with Labor and the Department of Justice 
here to be allowed entry and still the problem persists.
    Governor Fitial. Thank you. Thank you, Madam Chairperson 
for allowing me to extend the response of the Speaker. The 
guest worker program came into being in 1982 as Public Law 3-
66. That particular statute only allows non-resident workers to 
come in and just be employed by one employer of record. And 
when that employee is no longer needed, that employer of record 
is mandated by that statute to repatriate that employee.
    Well, they changed that law, they amended that law a few 
times, allowing non-resident workers to leave the employer of 
record and transfer to another employer and transfer to 
another, another, another employer, you know, and they gave the 
employees 45 days grace period after they leave an employer to 
look for another job. And that is the root of all these legal 
problems that I have dealt with in my Administration, and I 
have managed to close more than 3,400 of these pending labor 
disputes that I inherited from the previous Administration. And 
I will continue fighting for agency cases. I promised Senator 
Akaka that I still have 1,500 agency cases of which I have 
closed more than 700 between July 19th and today.
    Mrs. Christensen. Thank you. The Chair now recognizes Mr. 
Faleomavaega for questions.
    Mr. Faleomavaega. Just for the record, gentlemen, I just 
want to put for the record, the current population of the CNMI 
is about, what, 85,000 now?
    Mrs. Christensen. Seventy.
    Mr. Faleomavaega. Give or take a couple of thousand. All 
right, 70-some thousand. And the percentage of the guest 
workers is within that 70,000 population. How many guest 
workers altogether do you now have?
    Governor Fitial. Right now it's less than 30.
    Mr. Faleomavaega. 30 percent?
    Governor Fitial. No, 30,000.
    Mr. Faleomavaega. 30,000 are guest workers. And in terms of 
the tourism industry, which I gather is your number one 
industry right now in the territory----
    Governor Fitial. Yes, Mr. Congressman. Tourism is number 
one.
    Mr. Faleomavaega. And the status of your garment industry 
now?
    Governor Fitial. It's slowly getting out.
    Mr. Faleomavaega. To my understanding, and correct me if I 
am wrong, the gentlemen took all his factories back to China; 
am I correct on that?
    Governor Fitial. Some went to Vietnam.
    Mr. Faleomavaega. To Vietnam. So, in this sense, you are 
basically totally relying on your tourism industry as the basis 
of your economic development?
    Governor Fitial. That's very true.
    Mr. Faleomavaega. And as Pete, you have indicated earlier, 
you're very concerned about the presence of the indigenous 
Chamorros and their status in their own island here. You're 
saying that many have left for better economic opportunities. 
What does this mean?
    Representative Tenorio. Well, it means a number of things, 
Congressman. First of all, it means that we are going to be 
losing, almost permanently, those talented individuals that 
have been a part of our local workforce here.
    Mr. Faleomavaega. So, with the indigenous Chamorros 
leaving, you're going to be relying even more to alien guest 
workers to be part of your workforce?
    Representative Tenorio. Well, it appears to be that if 
nothing is done regarding educating our folks in trades and 
technical areas where they can gradually replace non-residents 
that are now holding those positions. I mentioned in my 
testimony that there is an extreme need for a formalized 
education to be established, and education that involves 
training, technical and educational--vocational training for 
individuals, local individuals, in the islands that could be 
provided with a certification of completion----
    Mr. Faleomavaega. Pete, we've been talking about this ever 
since the beginning. Just about every insular areas involved 
are saying, training, education, for your experience, 30 years 
for us. It's been 50 years, and we're still short of a nucleus 
of professional people to work--CPAs, engineers, doctors, 
lawyers. Where do you stand on that in terms of a nucleus of 
professionals here at CNMI? How many lawyers do you have? How 
many doctors? How well has your educational program really been 
part of that effort? Because, hey, I have the same problem too. 
We're here; we cry about the imposition of Federalism, but yet 
at the same time----
    Governor Fitial. Congressman, if I may.
    Mr. Faleomavaega. Please, Governor, I----
    Governor Fitial. I really believe in your golden rule, you 
know.
    Mr. Faleomavaega. He who has the gold makes the rule? 
[Laughter]
    Governor Fitial. Right. And let me just make it very clear. 
Our people are leaving the CNMI to look for jobs outside of the 
CNMI. It's not because of the existence of non-resident 
workers----
    Mr. Faleomavaega. It's not that they don't like you, 
Governor. It's just that they don't have jobs.
    Governor Fitial. Because of the economy. Because of the 
economy, not because of the non-resident workers. You know, 
look at the Marshalls, FSM. They don't have non-resident 
workers, but they're leaving their places looking for jobs 
outside of their places. It's the economy. It's not because of 
the non-resident workers.
    Mr. Faleomavaega. So, it's the economy, stupid, is that 
basically the situation that we're faced with? [Laughter]
    Governor Fitial. And we will be having our new medical 
school here. You asked for doctors, so we will be having it 
soon.
    Mr. Faleomavaega. You're going to have a medical school 
here at CNMI?
    Governor Fitial. Yes.
    Mr. Faleomavaega. Certified, board, everything?
    Governor Fitial. Yes.
    Mr. Faleomavaega. U.S. standards or other standards?
    Governor Fitial. U.S.
    Mr. Faleomavaega. Well, congratulations. I wish my little 
territory would have a medical school set up like you do. It 
was someway or somehow that the central frustration is, I would 
sense that--and I don't know I am being a racist to just 
suggest that the needs of the Chamorros should be looked of 
that with the highest priority. They're no different if you're 
going to India, they're not going to give you any tax breaks or 
anything. They're going to expect you to toe the line like you 
would in any other place and I would think CNMI would have that 
same concern, too, for its local residents.
    But I am concerned that if this bill is to be implemented, 
will that really be a door to have more Chamorros leave the 
territory because of the restrictions that are going to be 
placed upon anybody coming to CNMI? Am I giving a wrong picture 
of what I sense, of your concern, Governor?
    Governor Fitial. We need a legislation that would help us 
grow our economy. When we grow our economy, our people will not 
run away.
    Representative Tenorio. Well, Madam Chairwoman, we do have 
a--[Laughter]
    Mr. Faleomavaega. No, this is Madam Chairwoman. [Laughter] 
She's prettier than me, I realize that, but Pete I----
    Representative Tenorio. You know, even right now we do have 
the right to control our immigration. We are under the current 
system operating our own immigration. But look at what's 
happening. Problems are just being compounded. I mean, it's not 
that it all has to do with the way we administer our 
immigration. There is this global problem that we are faced 
with. Our garment industry, of course, it's being affected, 
having closed down because of the global competition that we 
can't compete anymore. Tourism has been affected by other 
economies of the world or other countries.
    At the same time, we do have access now to non-resident 
workers. We do have access to tourists in many parts of the 
world. Japan used to be a major tourist market for us, but now 
because Japan Airlines have decided to quit flying, we lost out 
a number of tourists, and we develop in other places. So, what 
I am saying is that, we should not blame the proposed 
legislation as the instrument that would drive us broke, or 
drive us bankrupt, or stop our economic progress. We're not 
making any progress right now. Simple as that.
    Mr. Faleomavaega. Let me just close by saying the bottom 
line is that we're all members of the American family. We want 
to be treated like Americans. But then there is another catch 
that comes here that other members here are very concerned 
about; we want to be treated differently. That's where other 
members come up and say, ``Hey, I thought you want to eat 
hamburgers, what's this? You want unique or different special 
treatment separate and apart from the rest of America?'' And 
this is where things really get a little complicated with some 
members of the Congress, on whether or not you should be given 
the same equal treatment, because we're not equal, in that 
sense. We don't pay Federal income taxes. In my own territory, 
we're not even U.S. citizens. You know what a U.S. national is? 
It's a person who owes allegiance to the United States, but is 
neither an alien nor a U.S. citizen. What does that mean? It's 
exactly the way we are. Thank you, Madam Chairman.
    Ms. Bordallo. Thank you, Madam Chair, my questions will go 
to my brother from Washington, Mr. Tenorio. Representative, you 
stated in your testimony that you would like to see a greater 
role for the CNMI Government during the transition period. What 
specific roles would you like to see the CNMI Government assume 
during this process?
    Representative Tenorio. Thank you, Congresswoman Bordallo. 
Very simply is the involvement in decision making. Not only 
does the Commonwealth complained in the past, as I am sure that 
other territories have complained about, how Washington tries 
to deal with local government issues, you know, that affect the 
local community. If the proposed bill here is implemented as 
is, without any regards to involvement of the local government, 
it will present a problem because decisions cannot be made that 
quickly. Yesterday, we were talking about the fact that we need 
to see that the local government is given opportunity to have 
their request addressed very quickly.
    I mentioned the fact that as part of the Homeland Security 
Organization in the Commonwealth under the proposed legislation 
that a person be designated that can make a decision locally 
here on island. When the Governor asked for application 
approval for critical land power needs for some investors, that 
the decision be made here locally and not three to six months 
later down the line, because that's the problem that we face in 
the past and even up to now. We do have a problem where even I 
write to aid of agencies in the Federal Government and I don't 
get any response until six months later. And I am sure that you 
have experienced the same thing. So----
    Ms. Bordallo. Absolutely.
    Representative Tenorio.--that is what I am talking about.
    Ms. Bordallo. I couldn't agree with you more and I am sure 
that Congressman Faleomavaega would state the same. You also 
stated in your testimony that you would like to see specific 
funds dedicated to areas that require formal training that lead 
to certification in the various trades and technical fields. 
Well, Section 3 of the H.R. 3079 calls for fees to be collected 
from employers of guest workers during the transition period. 
Should these fees be dedicated to the training that you 
suggest?
    Representative Tenorio. Well, that's part of it and that's 
pretty much really fees that I would like to see the local 
government get a hold of and get to spend the money. It's 
mandated anyway under Article, I mean, Section 703 of the 
Covenant, that any fees collected by the Federal activities in 
the island has to be rebated back to the local government. So, 
I don't see the problem there. What I am talking about mostly 
is not just the fees but solid funds that can be provided by 
the Congress to implement the intent of the framework we're 
talking about.
    I believe that we need to have our people educated 
formally, and this is not just a high school education where a 
couple of courses on vocational training could be offered. I 
believe that in order for this arrangement to work, we need to 
educate our students here in the technical and vocational 
areas. We need to have them certified. Just like in Guam 
Community College, a very successful program, and I believe 
that if we can copy that kind of process, it would help our 
local people here to be fully trained, to get a real education 
in the vocational and technical areas. This way then they can 
gradually replace those non-resident workers that are holding 
that kind of position that now could be taken over by a local--
--
    Ms. Bordallo. So you do agree then that this bill does need 
fixing?
    Representative Tenorio. It does need fixing. As a matter of 
fact, I visited Congressman Miller's office before I came here 
and submitted a proposal, because he's the Chairman of the 
Education and Workforce Committee, and I wanted him to start 
looking at this possibility. When there is a Federal mandate, 
as for example, this particular legislation is, I consider it a 
Federal mandate, the Federal Government has to come up with the 
necessary funds to ensure that the mandate is implemented and 
it's beneficial to those that--the recipients.
    Ms. Bordallo. And one other question before my time is up. 
You stated again in your testimony that language should be 
included in the bill that would allow for easy processing of 
new investors into the CNMI. Could you elaborate on what 
specific language should be included?
    Representative Tenorio. Well, I was looking at the current 
provision of the bill that doesn't have very specific--we do 
have special cases over here, and I don't have any real 
specific proposal yet, but I already mentioned about specific 
incidents where foreign investors that have come here, 
investing substantial amounts of money for example, for their 
development, are not given the kind of protection in terms of 
their status and their investment. At the moment, at the 
present situation, I see that the arrangement in the U.S. law 
where they could either be granted resident or green card 
status or a citizenship status because of their investment. I 
would like to see something that would provide that kind of 
endorsement, inducement.
    Ms. Bordallo. More specific then?
    Representative Tenorio. Yes, ma'am.
    Ms. Bordallo. I understand. My time is up, but I have a 
couple more questions for Mr. Reyes.
    Mrs. Christensen. Why don't you go ahead and ask those 
questions.
    Ms. Bordallo. All right. They'll be quick.
    Mrs. Christensen. And try to get them out quickly.
    Ms. Bordallo. All right. Senator Reyes, you testified that 
one of the strong components of the immigration program within 
the CNMI is the Border Management, or the BMS System. Can you 
elaborate more on this system and speak to its relationship to 
the CNMI having received Advanced Destination Status, or ADS, 
from China? What has been the impact of tourism from 
implementation of BMS?
    Senator Reyes. Well, I think Congresswoman Bordallo was 
enjoying the fact that I wasn't bringing any attention to 
myself or something. And then you have to come up and--
[Laughter] I am sorry.
    Ms. Bordallo. I apologize, Mr. Reyes.
    Senator Reyes. I think we need a break or something. 
[Laughter]
    Ms. Bordallo. If you'd like to think about that and perhaps 
give us a statement----
    Mr. Faleomavaega. Submit it in writing.
    Senator Reyes. I'll put it in writing.
    Ms. Bordallo.--submit it in writing, that will be just fine 
by me. All right. And the second one is, in what ways is the 
legislature organizing and focusing itself to address local 
concerns and needs surrounding the possible Federalization of 
immigration? How are the concerns of those who are not able to 
vote or voice their comments due to their immigration status 
addressed? And are committees working together or is a separate 
or special committee devoted to addressing the concerns raised 
by the local people?
    Speaker Babauta. In my testimony, I alluded to the fact 
that I have no objection to the granting of a special or the 
different type of immigration status to non-resident workers, 
and I mentioned that that would be similar to that of the 
Federated States of Micronesia, where non-residents are allowed 
to migrate and to move from any U.S. jurisdiction for purpose 
of employment, or education, or other things that any citizens 
would do.
    Ms. Bordallo. So, in answer then, Speaker, is--would you 
say then your local legislature is organizing and focusing 
itself to address the pending legislation? In other words, 
you're thinking about it, you're organizing, you're going to be 
able to face it if there is changes made or if it's status quo, 
then continue on?
    Speaker Babauta. Yes, we are.
    Ms. Bordallo. Thank you. Thank you, Madam Chair.
    Mrs. Christensen. Thank you. I just want for the record to 
just state that, just going through the bill rather quickly, I 
note over ten references to consultation with the Governor and 
of the Government of the CNMI and various issues. And I would 
just wanted to read that, in those agreements that the 
different agencies are supposed to negotiate with the 
government and implement, the agreement should address, and I 
am reading from the Bill, at a minimum, procedures to ensure 
Commonwealth employers have accessed that with labor and the 
tourists, students, retirees and other visitors have access to 
the Commonwealth without unnecessary delay or impediment. And 
the training of the local residents is also included in another 
section.
    I have one last question, and I am going to ask for quick 
answers, but anyone can answer that because again, going back 
to this proposed CNMI Immigration Labor Bill, one of the 
requirements is for a Coast Guard Resources for the borders of 
CNMI--oh, this the Governor's Bill. OK. The proposed CNMI 
Immigration Bill has a requirement for Coast Guard Resources to 
patrol the borders of CNMI's 14 islands. Will this help address 
the issue of boats originating in the CNMI with non-resident 
workers escaping and landing on Guam shores? That some--direct 
to the Governor--the Coast Guard----
    Governor Fitial. Yes. Yes.
    Mrs. Christensen. It would--it would----
    Governor Fitial. That's the function of the Coast Guard.
    Mrs. Christensen. Well, you know, it just seems strange to 
me that Federal Maritime Resources would be called upon to work 
in an environment and rules of engagement that they're not 
accustomed to, because you're wanting them to do this under 
current immigration laws here in the CNMI, and then use to 
protect one U.S. territory from another due to the fact that 
those immigration practices here are lax enough that it 
threatens the security. Does that trouble you in any way, that 
we're using the Federal resources----
    Governor Fitial. Well----
    Mrs. Christensen.--in an environment where the laws are not 
consistent with Federal legislation and then protecting one 
territory from another?
    Governor Fitial. Oh, that's the same issue that we're 
facing with implementing the asylum statute. There is a Federal 
law that governs this particular issue and yet we are also--we 
have no problem with that, but it seems like we control our own 
immigration at this time and yet we're allowing something that 
would--that runs against that particular policy.
    Mrs. Christensen. Well, those are like----
    Governor Fitial. But, you mentioned----
    Mrs. Christensen. I am going to wait on----
    Governor Fitial.--but actually----
    Mrs. Christensen --the Deputy Assistant Secretary to give 
us a reading on, and I think as you promised, on some of those 
issues around asylum so that we can better understand the 
context in which those requirements are being made.
    Governor Fitial. But we don't have any qualms in helping 
enforce that particular Federal statute, because we strongly 
believe that we should be supporting the international treaties 
of the United States.
    Mrs. Christensen. I think it will be very difficult for the 
U.S. Coast Guard to work in an environment where U.S. laws will 
fully apply. That's just the point I was trying to make.
    But, you know, at this point we are at 12:00 noon. I want 
to thank the witnesses for their valuable testimony and members 
for the questions that you asked. The Subcommittee may have 
additional and I am sure will have additional questions on 
this. Ms. Bordallo has already indicated some that she would 
like to have responded to in writing. And we now thank you 
again, and this panel will be dismissed with gratitude and we 
call up the third panel.
    Governor Fitial. Thank you very much, Madam Chairman----
    Mrs. Christensen. Thank you.
    Governor Fitial.--and members of the Committee.
    Mrs. Christensen. The third panel of witnesses includes Ms. 
Tina Sablan; Mr. Gregorio Cruz, the President of Taotao Tano; 
Mr. Bonifacio Sagana, President of Dekada.
    We thank you for your patience. We probably had another 
hour worth of questioning for each of the first two panels. So, 
we realize that the time is limited and we needed to also value 
your time. Thank you, witnesses.
    Mrs. Christensen. And the Chair now recognizes Ms. Sablan 
to testify for five minutes.

                    STATEMENT OF TINA SABLAN

    Ms. Sablan. Thank you, Madam Chairman, and good afternoon 
to all the members of (unintelligible) and welcome to the 
Mariana Islands.
    Mrs. Christensen. Speak right into the mic please, so we 
can make sure to hear you and we are able to pick you up.
    Ms. Sablan. Thank you for the invitation to submit this 
testimony on House Resolution 3079. My name is Tina Sablan, and 
I speak to you today as one of many CNMI citizens wanting 
change in our community. I wanted immigration and labor reform. 
My testimony is based not only on my own experiences having 
lived in these islands for most of my life, but also on the 
insight I have gained from the discourse that has been taking 
place in our community, especially in recent months.
    I will begin by stating the obvious. This is the time of 
great crisis for the CNMI. We face not only an economic crisis 
but also a social crisis and the crisis of governance. These 
three kinds of crises are interrelated, largely in our own 
making, and inseparable from the dysfunctional Immigration and 
Labor System that has persisted in our island's obvious ways. 
If any good can come out of our struggles now, it will be that 
we've realized the extraordinary opportunity before us to learn 
from our mistakes and set ourselves on the path to meaningful 
and sustainable development.
    We in the CNMI have yet to climb for, let alone experience, 
economic development that truly benefits the entire community. 
Instead, we know too well the consequences of rapid and 
unrestrictive growth. On the whole, this program has suppressed 
economic opportunities for residents, made non-residents 
extremely vulnerable to exploitation, and exerted tremendous 
pressure on our infrastructure and natural resources.
    Our local Immigration and Labor System is at the core of 
this unsustainable program of growth, and I am convinced that 
it is also at the core of our economic crisis. An immigration 
and labor program that is properly funded, well staffed, and 
consistently enforced would do much to stabilize our local 
economy. Although I do not believe that the CNMI has the 
capacity to establish and maintain such a program on its own, 
not when it cannot at this time effectively provide even the 
most basic public services, I do believe that we can and should 
participate in the development and implementation of this 
program in cooperation with the Federal Government.
    I would like to shift now to what is perhaps the most 
polarizing aspect of the immigration and labor issue, and that 
is the future of long-term non-residents in the CNMI. There are 
some who fear that the granting of permanent residency to long-
term non-residents would mean an abrupt mass exodus of our 
skilled workforce. And on the other hand, there are those who 
worry about the implications of the non-residents staying for 
good on the CNMI. In response to concern about the CNMI 
suddenly losing its skilled work force, it has been suggested 
that qualified long-term non-residents be required to stay in 
the CNMI for some period of time before they would be allowed 
to move elsewhere. Although that decision will ultimately be up 
to Congress, I definitely do not think that it would be the 
right thing to do by these long-term members of our community. 
If there is work available, if they consider these islands 
their home, and are personally committed to staying here, and 
if their employers take care of them, these people will stay. 
Anyone would stay for that matter; citizen, permanent resident, 
or otherwise.
    But suppose there is no work, or not enough work, for the 
next five years to sustain everyone who would be living here, 
what other such circumstances, what good does it do for the 
islands to keep anyone shackled here?
    Then there is the alternate fear that granting permanent 
residency to non-resident workers would result in them staying 
in the islands for good and that somehow the indigenous 
Chamorro and Carolinian would eventually become a marginalized 
people. I do not share these fears. We are indeed already an 
incredibly diverse community today compared to what we were 30 
years ago, and I don't think that's a bad thing. In addition to 
Chamorros and Carolinians, people from all over the world call 
our islands home and they bring with them their own skills, 
ideas, and cultures. I believe that in this time of crisis, 
what we need is to pull together and maximize our resources, 
including the talents of all the people.
    I also believe that granting permanent residency to long-
term non-residents would lend still more stability to our local 
economy, because it would help expand the pool of skilled 
resident workers who are already here and are likely to have a 
vested interest in our community.
    If this measure is coupled with other provisions to address 
the economic needs on our current residents, the need for 
greater vocational and technical training for example, or for 
expanded small business assistance perhaps, I am convinced that 
at least some of the fears and attention associated with the 
status of long-term non-residents might be alleviated.
    And now, I introduce you to the plight of our current 
residents. It will be important to consider the needs of our 
current residents as much as we do those of our non-residents. 
Many of our people have left our islands, and in droves, out of 
frustration and aspiration. And the ones who remained on island 
have faced gloomier and gloomier prospects and increasingly 
limited opportunities. If nothing changes and if the status quo 
remains, the Chamorros and Carolinians will be a marginalized 
and displaced people. And so indeed, everyone else that calls 
this place home.
    In closing, I would like to say that I support House 
Resolution 3079, because I believe that it fairly balances the 
diverse needs and aspirations of all people of the CNMI and 
sets the groundwork for finally addressing the immigration and 
labor problems that have given rise to an unsustainable economy 
and an unjust society. I am glad that in addition to addressing 
concerns related to border protection and human rights, this 
bill also responds to local appeals for a nonvoting Delegate 
and for special provisions concerning guest workers in the 
islands.
    I hope to see our local government continue to work closely 
and constructively with the Federal Government to ensure the 
development and implementation of a sound immigration and labor 
program for the island that meets both Federal standards as 
well as local needs. I also hope that our efforts today signal 
the start of a new era of maturity as a self-governing 
Commonwealth in union with the United States, and that we 
finally begin to seek meaningful and sustainable development 
that benefits all our people. Thank you.
    Mrs. Christensen. Thank you, Ms. Sablan.
    [The prepared statement of Ms. Sablan follows:]

                        Statement of Tina Sablan

    Dear people of the Commonwealth,
    In recent months, the immigration, labor, and economic conditions 
of the Commonwealth have come under intense federal scrutiny. On 
February 8, 2007, the U.S. Senate Committee on Energy and Natural 
Resources convened an important and eye-opening hearing on our economic 
and social situation, and this week, a delegation of Senate staffers 
will arrive to conduct further meetings and assessments. This is 
certainly not the first time our Commonwealth has fallen under such 
vigorous examination. But in this deepening economic and social crisis, 
and with the benefit of hindsight, we must now do what we failed to do 
before: we must change.
    For so long, we have been living in a false and unjust economy that 
has hurt all of us--nonresidents, residents, and businesses as well. 
For so long, our political and business leaders have defended the 
distortions and injustices of our economy and society. For so long, and 
against conscience and common sense, we have failed to challenge their 
claims. If we are ever to lift ourselves up from the quagmire we have 
created, we must fully confront the truth about our situation, and 
accept responsibility for our mistakes.
    The truth is that much of our economic and social woes can be 
traced to our dysfunctional immigration and labor system. The truth is 
that raising our immigration and labor system to meet federal standards 
would help us all in the long run. The truth is that freely abiding by 
these federal standards would enhance, not threaten, our capacity for 
effective self-government, and would honor the Covenant that many of us 
hold dear.
    For far too long, we, the people of this Commonwealth, have 
trampled upon the spirit and intent of the Covenant, and abused our 
powers to manage our own affairs, especially with respect to 
immigration and minimum wage. Local control over these issues was a 
temporary privilege that was granted to the Commonwealth out of concern 
for our developing economy and vulnerable local culture. But upon 
receiving that license, what did we do?
    Instead of carefully building an economy at a rate and scale that 
was appropriate for our islands, we launched into a poorly planned, 
hyper-accelerated program of growth that far outpaced the development 
of local infrastructure and ravaged our natural environment. Instead of 
prudently restricting the entry of large numbers of immigrants like we 
said we would, we threw open the floodgates. Between 1980 and 1999, the 
Commonwealth posted the highest population growth rate in the world, a 
staggering 373.4% increase, from 16,800 people to nearly 80,000. This 
population growth was due primarily to the entry of tens of thousands 
of temporary foreign workers taking up jobs in the private sector, and 
especially in the labor-intensive garment industry.
    As we all know, our immigration and labor system lacked the 
institutional capacity and political will to properly control the 
overwhelming flow of immigrants. It failed to adequately screen for 
health concerns and criminal backgrounds; to monitor effectively for 
illegal overstays; to safeguard the workers against exploitation and 
abuse; and to adequately protect job opportunities for the U.S. citizen 
resident population. We see the results of this ineffective immigration 
and labor program and the failures of our government all around us 
today. They impact everyone.
    Presently, the majority of people living in the Commonwealth belong 
to a class of ``temporary'' foreign workers occupying permanent jobs in 
the private sector. No matter how long they live here, paying taxes, 
raising their families, and contributing to the life of the community, 
they never attain a political voice, and their social and economic 
status is forever precarious. They are easily exploited and easily 
ignored. Because they can't vote, and because they occupy a vast 
majority of private sector jobs, there is little political will to 
raise wages or institute far-reaching reforms to create a healthier and 
more sustainable private sector.
    Meanwhile, with private sector wages depressed across the board and 
a minimum wage that has languished for years at a meager $3.05 an hour, 
U.S. citizen residents find themselves with limited opportunities to 
make a viable living in the Commonwealth. Unable to secure decent 
livelihoods in the private sector, many residents look for work in the 
government--where wages are higher, and where there is greater 
political will to provide jobs in order to secure favorable votes in 
the next election. Other readily available alternatives for residents 
include welfare, theft, gambling, and drugs. Our expanding welfare 
rolls, rising crime rates, and increasing numbers of families destroyed 
by poker addiction and drugs, are sad testimonies to that fact. Faced 
with such choices, it is no wonder so many residents choose to leave.
    It is also no wonder that our government is so chronically bloated 
and ineffective, prone as it is to the political pressures of residents 
in need of jobs who may or may not have the necessary qualifications. 
Combine big government with fiscal mismanagement and widespread 
incompetence and we get a massive government deficit and failed public 
services and infrastructure--in short, exactly what we see today.
    Businesses suffer, too, in this dysfunctional economy, especially 
businesses with a vested interest in the community. They suffer because 
they pay taxes to support a bloated government that continues to 
provide inadequate public services. They also suffer because their pool 
of qualified, hard-working resident workers shrinks with a 
deteriorating economy. Businesses that complain about residents who 
``don't want to work'' and who lack necessary skills fail to see the 
whole picture. Talented, industrious, and qualified residents have left 
the islands in droves and they are taking up many of the same jobs that 
are occupied by foreign workers here. Those residents do want to work--
they just don't want to work for artificially low wages and they want 
to be able to support themselves and their families.
    What kind of development have we been pursuing in the Commonwealth, 
and what has it done for us? Yes, hundreds of millions of dollars in 
garment and tourism revenues and federal aid have flowed through our 
government and economy over the years--but where did the money go? What 
did we do with it? How much have we squandered, and how much more have 
we given away in public land, overly generous tax breaks, and viable 
jobs that could have been filled by residents? In 2005 alone we lost 
$114,000,000 in guest worker remittances--how much more are we losing 
now, in remittances and also in the personal savings that are being 
taken out by foreign workers and residents leaving the islands, and in 
the capital that is being siphoned out to foreign business interests? 
If the Commonwealth is such a miracle of economic development as some 
have claimed, why are our public schools, hospital, sewer systems, 
electric and water utilities, environment, and public health still 
floundering?
    One can blame external factors only so much. Yes, the September 11 
attacks, the SARS epidemic, the Asian economic crisis, the pullout of 
Japan Airlines, and the changes in global trade rules all had 
significant impacts on our economy. But externalities are a fact of 
life, and they affect other places too. Economies that aren't resilient 
enough to begin with have the most difficulty recovering, as we in the 
Commonwealth know painfully well.
    There is no time like the present to choose a dramatically 
different, more sustainable course of development. But to do that, we 
must move forward from the personal interests, political rhetoric, and 
fears that have been distracting us from the truth about our current 
situation, and we must decisively abandon the status quo.
    Let us move forward from reactionary attacks against people like 
Ms. Lauri Ogumoro, Sister Stella Mangona, and Ms. Kayleen Entena, who 
testified truthfully about their firsthand knowledge of social 
injustice in our Commonwealth. For their courage and honesty, and their 
calls for social awakening and reform, these individuals (and the many 
others who came before them) deserve our deepest respect and gratitude.
    Let us also move forward from the rhetoric of ``federal takeover.'' 
The calls for secession and the inflammatory accusations of political 
vendettas being wielded against us and federal legislation being 
``shoved down our throats'' do us far more harm than good. Furthermore, 
since the beginning of the Commonwealth, there has been, and continues 
to be, extensive dialogue between our local representatives and the 
federal government--in hearings, in correspondence, in 902 talks, and 
other official discussions. If we have any issues with the results of 
all the discussions and meetings that have taken place over the years, 
the people we should take to task are our own leaders who have for so 
long and on our taxpayer dollars defended a status quo that has failed 
us all.
    Even the passionate calls to defend the Covenant and protect our 
right of self-government are misguided, however sincere in intentions 
they might be. The Covenant is not truly at risk except by our own 
abuses, and in the first place, local control over immigration and 
minimum wage was never negotiated to be a permanent privilege. Besides, 
the Commonwealth already abides by numerous federal laws, including 
those pertaining to labor (with the exception of minimum wage), the 
environment, airport security, and banking, and our right of self-
determination remains intact. Clearly, it is possible--and, indeed, 
necessary for the good of the Commonwealth--to freely embrace a new 
program of immigration and labor that meets federal standards and 
provides adequate protections for all the people who live here. It 
might be a painful transition, but we can and should be part of the 
process of determining the best course of transition for the 
Commonwealth.
    Now is the time to finally take responsibility for the crisis we 
have created and acknowledge that there are real and profound problems 
with our economy and society. Let us begin to right those pervasive and 
systemic wrongs by accepting the necessity of federal standards for 
immigration and labor and maturely engaging in talks with the federal 
government to decide how to apply those standards for the greater good 
of the Commonwealth. Let us also recreate our long-term vision for our 
islands. What kind of community do we want for ourselves and our 
families? How can we achieve good governance, social justice, and 
economic renewal in our Commonwealth? In addressing these vital 
questions, we prove ourselves worthy of both self-government and U.S. 
citizenship, and set ourselves and future generations on a new path 
towards a resilient and sustainable economy, and a freer, more 
prosperous society.Tina Sablan
FORUM #4--March 29, 2007 (Immigration & Labor Reform)
    Venue: Northern Marianas College, Room D-1
    Time: 6:30pm--8:30pm
    # of people: approximately 70
    Facilitators: Patricia Coleman & Brooke Nevitt
    Notetaker: Tina Sablan
    Timekeeper: Martha Mendiola
    Format: Ground rules were reviewed and agreed upon; forum 
participants also agreed to set time limits for speakers to five 
minutes. Historical overview of the immigration and labor issue was 
presented by long-time resident, social scientist, and NMC instructor, 
Mr. Samuel McPhetres (15min), followed by open forum on immigration and 
labor reform (1.75hr).
VIEWS OF POLITICIANS
    It was noted that many politicians have expressed alarm over the 
prospects of federalized immigration, and have said that such a 
possibility could spell economic disaster for the CNMI. Forum 
participants asked what basis politicians have for these claims. What 
evidence is there that the CNMI economy would actually get worse than 
it already is as a result of immigration and labor reforms? Is it 
possible that the CNMI might actually be better off in the long run?
    Some forum participants suggested that the root of many 
politicians' fears is that federalized immigration would result in the 
extension of voting rights to nonresidents, and that this scenario 
could spell the end of their political careers.
    It was said the only politicians who have anything to worry about 
are the ones not doing their jobs. It was also said that a non-
indigenous politician who does his job well and has the interests of 
the community at heart is far more preferable to an indigenous 
politician who doesn't do his job at all.
FUTURE OF NONRESIDENT WORKERS
    It was noted that there has been a great deal of concern expressed 
by some in the community about whether or not green cards should be 
issued in the CNMI if federalization of immigration takes place, and if 
so, to whom and under what circumstances. The green card issue has had 
a polarizing effect on the community. It was suggested that alternative 
programs be considered to shift some of the polarization (i.e., a 
``blue card,'' or some other modified program for long-term nonresident 
workers living in the CNMI).
    Enfranchisement of nonresident workers was also raised for 
discussion. Some forum participants objected to nonresident workers 
having any prospect of citizenship or voting rights in the CNMI because 
these rights were never promised to them. Guest workers come into the 
CNMI with the full understanding that they are here for jobs on a 
temporary basis, not for permanent settlement.
    Other participants said that nonresident workers who have lived 
here for years, raising their families, paying taxes, and contributing 
to the community are in fact part of the community and have a stake in 
the CNMI's future--don't they deserve a greater political voice?
FUTURE OF DEMOCRACY
    Participants expressed concern about the state of democracy in the 
CNMI when only a minority of the population (i.e., residents) have a 
political voice, and make decisions that affect the majority of the 
population (i.e., nonresidents). Many long-term nonresidents consider 
the CNMI their home, and yet they have no prospects for a political 
voice.
    It was noted, however, that there are democratic mechanisms that 
nonresidents can and do use, even though they do not have the right to 
vote--they are organizing themselves more effectively and becoming much 
more visible and vocal members of the community. People can still 
participate in democratic processes even though they're not citizens.
JOB OPPORTUNITIES FOR RESIDENTS
    Forum participants expressed great concern about limited job 
opportunities for residents. Some participants suggested that certain 
jobs should be reserved only for residents, particularly higher-paying 
jobs in the service industry. It was also said that the Nonresident 
Workers Act has never been properly enforced, nor local preference 
laws, nor the Fair Compensation Act. The Public Auditor's job audit of 
the private sector was described as an important measure for 
identifying which jobs in the private sector are available and 
desirable for residents, and what skill sets are required. It was also 
said that the experience, training, and aspirations of residents should 
be studied carefully, so that individuals are matched with compatible 
jobs.
    Other forum participants objected to the notion of classifying jobs 
for residents vs. nonresidents and asked what basis there was for such 
a classification. Who decides which jobs are better than others for 
residents, and how is that decision made? Isn't any honest job a good 
job? It was noted that jobs in the CNMI are closely tied to ethnicity 
and nationality, and that there was a time when residents occupied jobs 
in every sector and at various levels. Participants asked, when did 
that change? When did residents move out of the private sector and why? 
And why is unemployment so high among residents when there are tens of 
thousands of guest workers?
    One participant pointed out that certain nationalities are 
sometimes targeted for certain positions, especially if there are high 
numbers of people with specific desired skill sets from those 
particular countries.
    It was noted that job vacancy announcements in the papers often 
advertise unattractive wages for residents (usually the minimum $3.05/
hr) are often not commensurate to the jobs (many of which are 
professional-level). It was also noted that many announcements are only 
formalities, and the position being announced is actually intended for 
renewal for a nonresident worker already in place. Such jobs often pay 
more than is advertised; the low wages are intended to dissuade 
residents from applying. The Department of Labor does not cross check 
the wages that are announced in the papers versus the wages that are 
ultimately actually paid to nonresident workers.
    Participants also said that it may simply be a fact of life that 
not every job will be desirable to every resident, but very low wages 
will ensure that few jobs will be desirable at all to any resident.
HUMAN RESOURCE DEVELOPMENT
    Forum participants observed that some fears about federalization 
center on concerns that the Chamorros and Carolinians will become an 
``endangered species'' in the islands--that is, that all the 
nonresident workers will be granted citizenship or green cards. It was 
said that people with such fears should not only consider that 
federalization does not necessarily and automatically grant 
citizenship, but also see that the real root of their fears lies in the 
failure of the government to truly invest in education and human 
resource development, which are the keys to economic development. As 
long as it remains so easy to import cheap labor, education and human 
resource development for residents will continue to be neglected, and 
the CNMI will continue to be dependent on imported foreign workers.
    It was also said that those people who feel threatened by the 
diversity of the community should change their mindsets and see a 
challenge to which they could rise. People should not be hired on the 
basis of their Chamorro or Carolinian heritage (or any ethnicity, for 
that matter), but for their qualifications. Hiring on the basis of 
qualifications forces people to invest more seriously in education and 
professional development, and to compete more effectively in the job 
market.
    It was also said that education has never truly been a priority in 
the history of the CNMI, despite the claims of some politicians. Higher 
education has always been treated as a luxury, and this mentality has 
severely limited economic development and progress.
    Several participants expressed pity for younger generations and 
asked, what opportunities do young people really have in the CNMI? 
Students are being failed at all levels of the educational system. They 
are not given the proper skill sets to pursue higher education or enter 
into the workforce here, and there are very limited programs in career 
counseling and vocational training. The failure of the school system to 
prepare students for jobs in the hospitality sector was cited as an 
example. Most schools still do not offer the languages that are spoken 
by the CNMI's tourists--Japanese, Chinese, Russian, and Korean, for 
instance. Students still cannot pursue hospitality or culinary arts 
degrees in the CNMI, and many other fields that would be useful for the 
local economy.
    Some concerns were expressed about developing residents' work 
ethic. One participant said that she heard too many stories about 
residents who chronically show up late for work or not at all, who are 
unproductive, or miss days of work to attend funerals, etc. Other 
participants responded and said that although there are residents who 
lack work ethic, there are also many residents who work hard and 
conscientiously--and often those are residents who work for companies 
or agencies that pay them well. It was also said that there is a need 
for employers to be more sensitive to cultural and social needs, and to 
provide opportunities for more part-time work.
    Finally, it was said that one of the reasons that education and 
other key development programs are so poorly funded is because the CNMI 
does not have a proper tax system in place, and taxes are too low.
MINIMUM WAGE
    Participants suggested that one possible result of raising the 
minimum wage is that businesses will tend to rely more on mechanized 
processes as opposed to manual labor, because it makes business sense. 
It is possible that raising wages in the CNMI will lessen the need for 
large numbers of immigrant workers.
    It was also said that the discussion of the minimum wage should not 
be based on whether or not a family can sustain itself on it. Minimum 
wage jobs should be entry-level positions--for students, inexperienced 
workers, etc.
BUSINESS ENVIRONMENT
    It was noted that immigration and labor conditions in the CNMI have 
created an unlevel playing field for businesses here. High-quality 
businesses with a vested interest in the community who want to train 
and hire residents and pay them well must compete with other businesses 
with little long-term interest in the community, who want to pay the 
lowest wages possible, and therefore will bring in the cheapest workers 
they can. The immigration system makes it easy to bring in large 
numbers of cheap workers.
    It was said that the CNMI needs to develop its small businesses and 
entrepreneurs. Where are the dried mango producers, the coconut candy 
kiosks, and canoe ride tours to Managaha (to name a few possibilities)? 
Forum participants pointed out that assistance for aspiring small 
business owners is very limited here--loans are extremely difficult to 
come by, for example, including loans from the Commonwealth Development 
Authority, and most legislation is designed to help only big 
businesses.
    It was also noted that in the past, local immigration laws have 
been used to build up industries like the garment industry, but there 
is no need to continue in this vein. Now that the garment industry is 
exiting the CNMI, this is a good time to build more sustainable 
industries, such as education and tourism, and maximize the advantages 
that the CNMI still has (i.e., location, U.S.-affiliation, etc).
TOURISM
    Much concern was expressed over the future of the tourism industry 
in the CNMI if federal immigration laws are applied. Will the CNMI lose 
access to Korean, Chinese, and Russian markets, which have helped bring 
some relief to the loss of Japanese tourists the CNMI has experienced?
    It was suggested that the federal government might have political 
concerns with the CNMI providing tourist visas to Russian, Korean, and 
Chinese nationals. One forum participant asked, ``How is the CNMI going 
to meet the governor's stated goal of 1-million tourists in four 
years?'' Another forum participant suggested that perhaps the 1-million 
tourist goal should be revisited. One million tourists might not even 
be desirable, and perhaps there are more meaningful goals to set for 
the CNMI's tourism industry.
    Some forum participants questioned the fear that has been 
expressed, that federalized immigration will destroy the CNMI's tourism 
industry. It was pointed out that Guam and Hawaii observe federal 
immigration laws, and tourism in both locales is booming.
EDUCATION INDUSTRY
    It was said that the CNMI has great potential for being the center 
of the education industry between the U.S. and Asian countries--
especially for training Certified Public Accountants and nurses from 
Asia (particularly China and the Philippines). More schools are 
receiving certification to bring in students from foreign countries to 
train to become CPAs, or to take the U.S. licensure exam for nurses. 
Such programs are not only attractive to foreign students, but also for 
residents interested in pursuing such careers.
    Another advantage of the education industry is that it can help 
support the CNMI's needs for certain skilled workers--i.e., for nurses 
and accountants. It was said that foreign-born nurses who are educated 
in the CNMI may soon also have the opportunity to work here.
IMMIGRATION AND LABOR LAW ENFORCEMENT
    It was said that the CNMI government has made positive strides 
towards improving enforcement of immigration and labor law. Labor 
violations are investigated and resolved more quickly than in the past, 
and there are fewer cases of immigration violations (i.e., overstays) 
than some people might think.
    On the other hand, forum participants stated that they believed 
there are simply too many unemployed nonresidents living in the CNMI, 
moonlighting for various jobs--all on valid entry permits. How did they 
get those permits, and why are they allowed to stay if there are no 
jobs available for them?
    It was said that it is time for everyone in the community to face 
the reality that the CNMI has not done a good job of managing 
immigration and labor--otherwise, there would be no need for a forum. 
It was also said that many of the problems we face in the CNMI are due 
to failed leadership, and that people should vote more wisely this 
year.
BORDER SECURITY
    Concern was expressed about the security of the CNMI's borders 
against criminal elements (i.e., organized crime; drug smuggling; human 
trafficking). It was said that relative to other U.S. jurisdictions, 
the CNMI at least enjoys excellent cooperative relationships among its 
law enforcement agencies, and fewer security concerns because the CNMI 
is remote, and there are no potential terrorist targets here (i.e., a 
military base). It was also said that the CNMI enjoys protection by the 
Coast Guard.
    It was also said that neither local nor federalized immigration is 
a guarantee of more secure borders, but that if federalization should 
happen, it should not be a cookie-cutter policy that does not take into 
consideration local circumstances. Rules that work in California, for 
example, may not apply so well in the CNMI.
FEDERAL RELATIONS
    Some forum participants expressed the belief that federalized 
immigration is inevitable whether people like it or not. What the CNMI 
should do at this point is find ways to participate in the drafting of 
any legislation that would be extended to the islands, to ensure that 
the legislation considers local needs and circumstances. The CNMI need 
not be adversarial in its relationship with the federal government, and 
it is possible to pursue a mutually cooperative relationship that will 
allow continued access to tourists and foreign students; screen out 
criminal elements; conduct better health checks; enhance border 
security; and close any loopholes that compromise the welfare of 
workers, both residents and nonresidents.
    Other forum participants expressed a distrust that the federal 
government will be able to develop an effective and appropriate 
``hybridized'' immigration system. Disappointment over the U.S. 
Congress' recent characterization of the CNMI as criminals, and the 
belief that the CNMI was being used as a political pawn, were also 
expressed.
    Participants also said that the CNMI should have official 
representation in the U.S. Congress.
                                 ______
                                 
    Mrs. Christensen. The Chair now recognizes Mr. Cruz for 
five minutes.

            STATEMENT OF GREGORIO CRUZ, PRESIDENT, 
               TAOTAO TANO CNMI ASSOCIATION, INC.

    Mr. Cruz. Thank you, Chairwoman. Hafa Adai, Honorable 
Chairwoman Donna Christensen, Members of the Committee, Mr. 
Faleomavaega. My name is Gregorio Sanchez Cruz, Jr., and I am 
the President of the Taotao Tano CNMI Association Incorporated. 
We would like to take this opportunity to extend our sincere 
gratitude and honor to testify on this important piece of 
legislation, H.R. 3079, to amend the Joint Resolution Approving 
the Covenant to Establish a Commonwealth for the Northern 
Mariana Islands. Madam Chairwoman, our home island is faced 
with economic and fiscal challenges, including social 
breakdowns. We have been addressing these issues with our 
government, our legislative lawmakers, the public, and with 
respective Federal agencies, specifically, with the Office of 
Insular Affairs.
    Madam Chairwoman, we the local indigenous people in the 
Northern Mariana Islands acknowledge--I am kind of nervous--
that the negative outweighs the positive in our current state. 
Our CNMI leaders have failed us in many ways and their failures 
have caused great harm. This is apparent. Otherwise we, the 
people of the CNMI, will not be suffering to this day, and I 
say this with great confidence. Their mismanagement, 
miscalculations, and unaccountability are the very reason we 
are in this predicament. It is a shame that these are our 
leaders whom we entrusted to deliver and serve in our best 
interest. They have failed to prioritize this daunting issue 
over our local labor and immigration system for so many years.
    Presently, the quality of life on our home island continues 
to shift downward. Unemployment is high, commodities are 
expensive, fuel prices are high, utility rates are outrageous, 
while high employment rate is high and the minimum wages is 
low. Public schools are overcrowded, public services are low, 
healthcare is unaffordable, and Government retirement fund is 
collapsing, withdrawals of medical health insurance--I mean, 
early withdrawals, early withdrawals in retirement. Indeed, 
many of our people are moving off island to greener pastures, 
and the overall outlook of our economic condition is 
detrimental for our well-being and stability of our island.
    The administration's defiance and denial that they can pull 
our island out of this economic crisis is none but 
disheartening. We disagree with the administration's stand on 
the Federalization of our labor and immigration, including the 
Attorney General's defiance on the asylum refugee issue. This 
is a clear, blatant ignorance toward the people of the NMI, and 
the Federal Government, and their ethics and conduct is in 
question. The late submission of a fiscal budget is also a 
clear indication of failure in fiduciary duty. Additional 
closure of garment factories, decline in visitor arrivals, 
government revenues declined, and the 20 percent rule of hiring 
the locals enforced at a critical time is a complete failure. 
Still this administration's optimistic and they have a recovery 
plan. Their recovery plan is going to take years in the making 
while our people continue to suffer and are fast becoming 
extinct by leaving their home island.
    Madam Chairwoman, currently there is a 10 percent reduction 
in government payrolls, including in budget cuts, and a 
likelihood of continuance next year, but the administration is 
still optimistic. The administration and the business sector 
oppose the newly installed Federal minimum wage, which we all 
believe was long overdue. Our elected leaders then and now had 
the opportunity to correct what we were wrong years ago but did 
nothing to address or rectify this forthcoming. The 
government's dependency on hiring lobbyist after lobbyist to 
bail our island out and keep the minimum wage down is pure 
self-interest. Hired lobbyists live lavishly on NMI taxpayers' 
money, and for years they have been in business earning 
thousands and thousands each year while the common people, such 
as myself, earn $3.05 per hour, and we were barely surviving 
everyday living expenses.
    The influx of thousands of non-resident workers has 
supplanted our local workforce in the private sector, which 
could create an unsustainable economy. This is a result of 
miscalculations and failures of our past and present leadership 
of not implementing an economic impact study years before. The 
lack of proper funding and priority for our educational system 
and the implementation of a technical education in the field of 
carpentry, electrical, masonry, plumbing, electronic, A/C 
technicians, mechanics, heavy equipment mechanics and operators 
has proven devastating to our local workforce. As a result many 
of our locals were left unemployed.
    Recently while conducting our own research, our 
organization, the Taotao Tano, stumbled on a local issue with 
our labor and immigration system, which in 1995 our legislative 
branch passed a law that would have balanced the issue of 
employment benefits----
    Mrs. Christensen. Mr. Cruz, I am going to have to ask you 
to try--we do have your full record, your full statement on the 
record----
    Mr. Cruz. Yes.
    Mrs. Christensen --including the recommendations so we 
could begin to----
    Mr. Cruz. OK.
    Mrs. Christensen --close up.
    Mr. Cruz. All right. I'll continue with that point. All 
right. In 1995, our legislature branch passed a law that would 
have balanced the issue of employment benefits between local 
residents and non-resident guest workers' employment benefits. 
Public Law 9-71, entitled ``The Resident Fair Compensation 
Act,'' this law was shelved, you know, and to this point, is 
still a law. The fees collected from labor and immigration 
processing were appropriated to the Northern Marianas College 
in support of local resident training in the field of technical 
schools--I mean, education. But unfortunately, through our 
research we found that this funding was reprogrammed into 
tourism and nursing curricular. So, I will skip to the rest and 
go right through ahead.
    Madam Chairwoman, our silence has proven devastating. We, 
the people of the Commonwealth, are now wide awake and armed 
with greater knowledge. We, the people, will ensure that our 
local control over our labor and immigration are prioritized 
and fully addressed. We will no longer sit back and ignore our 
elected leaders' failures, for we, the people, the voters, the 
taxpayers, voted them in and we can vote them out if these 
measures are not addressed and prioritized immediately. It is 
time for change and it's time to clean house, Madam Chairwoman.
    The future and the destiny of our people are fast 
approaching and at stake. There is an urgent need for a course 
of action to correct the wrong and protect our indigenous 
population from losing the promise of achieving an American 
Dream as intended in the Covenant. Our people fear political 
and social alienation as well as the loss of our core identity 
and existence of our home island.
    H.R. 3079, Madam Chairwoman, is a well-thought piece of 
legislation, but we would like to point out a few areas of 
concerns that----
    Mrs. Christensen. And we do have--we're approaching nine 
minutes, so I am going have to ask you to hold right there. We 
do have your recommendations and all of us up here have heard 
and read them and we may get to them on questioning.
    Mr. Cruz. Thank you.
    Mrs. Christensen. OK? But thank you for your testimony.
    [The prepared statement of Mr. Cruz follows:]

          Statement of Gregorio Sanchez Cruz Jr., President, 
                   Taotao Tano CNMI Association, Inc.

    Good morning and Hafa adai honorable Chairwoman Donna Christensen, 
and Members of the Committee welcome to the beautiful island of Saipan. 
My name is Gregorio Sanchez Cruz Jr. President of Taotao Tano CNMI 
Association Inc. We would like to take this opportunity to extend our 
sincere gratitude and honor to testify on of this important piece of 
legislation H.R. 3079. To amend the Joint Resolution Approving the 
Covenant to Establish a Commonwealth of the Northern Mariana Island. 
Madam Chairwoman, our home island is faced with economic and fiscal 
challenges, including social breakdowns. We have been addressing these 
issues with our government, legislative lawmakers, the public, and with 
respective Federal agencies, specifically with the Office of Insular 
affairs.
    Madam Chairwoman, we the local indigenous people of the Northern 
Mariana Islands acknowledge that the negative outweighs the positive in 
our current state. Our CNMI leaders have failed us in many ways and 
their failures has cause great harm; this is apparent, otherwise we, 
the people of the CNMI, would not be suffering to this day and I say 
this with great confidence. Their mismanagements, miscalculations, and 
unaccountability are the very reason we are in this predicament. It is 
a shame that these are our leaders whom we entrusted to deliver and 
serve in our best interest. They have failed to prioritize this 
daunting issue of our local labor and immigration system for so many 
years.
    Presently the quality of life on our home island continues to shift 
downward. Unemployment rate is high, commodities are expensive, fuel 
prices are high, utility rates are outrageous while high unemployment 
rate is high and minimum wage low. As a result of this economic 
deficiencies and social decays, public services are low, public schools 
system is overcrowded, healthcare is unaffordable, and Government 
retirement fund is collapsing, withdrawals of medical health insurance, 
early withdrawals on retirement. Indeed, many of our people are moving 
off island to greener pastures, and the overall outlook of our economic 
condition is detrimental to our well-being and stability of our island.
    The administration's defiance and denial that they can pull our 
island out of this economic crisis is none but disheartening. We 
disagree with the administration's stance on the federalization of our 
Labor and Immigration, including the Attorney Generals defiance on the 
asylum refugee issue; a clear blatant ignorance towards the people of 
the NMI and the federal government and his ethics and conduct is 
questionable. Delayed submission of a Fiscal Budget is also a clear 
indication of failure in fiduciary duty, additional closure of garment 
factories, decline in visitor arrivals, government revenues declining, 
and the 20% rule of hiring locals just enforced at a critical time is a 
complete failure. Still the administration is optimistic and they have 
a recovery plan. Their recovery plan is going to take years in the 
making while our People continue to suffer and are fast becoming 
extinct by leaving their home island.
    Madam Chairwoman, currently there is 10% percent reduction in 
government payrolls, including budget cuts and a likelihood of 
continuance next year, but the administration is still optimistic. The 
administration and the business sectors opposed the newly installed 
federal minimum wage, which we all believe was long overdue. Our 
elected leaders then and now had the opportunity to correct what were 
wrong years ago but did nothing to address or rectify this forthcoming. 
The government's dependency on hiring lobbyist after lobbyist to bail 
our island out and keep the minimum wage down is pure self-interest. 
Hired Lobbyist, lavished on NMI's taxpayers money and for years they 
have been in business, earning thousands each year while the common 
people earned $3.05 per hour barely surviving everyday living expenses.
    The influx of thousands of non-resident guest workers has 
supplanted our local work force in the private sector, which created an 
unsustainable economy. This is a result of miscalculations and failures 
of our past and present leadership of not implementing an economic 
impact study years before. The lack of proper funding and priority of 
our educational system and implementation of a technical education in 
the field of Carpentry, Electrical, Masonry, Plumbing, Electronics, A/C 
technicians, Mechanics, Heavy equipments mechanics and operators, has 
proven devastating to our local workforce. As a result, many of our 
locals were left unemployed.
    Recently while conducting our own research, our organization 
stumbled on a local issue with our Labor and immigration system. In 
1995, our legislative branch passed a law that would have balanced the 
issue of employment benefits between local residents and non-resident 
guest workers' employment benefits. Public Law 9-71 entitled the--The 
Resident Fair Compensation Act of 1995--a law that is still currently 
in place as we speak, but never promulgated remained and shelved. The 
Fees collected from labor and Immigration Processing were appropriated 
to the Northern Marianas College in support of local resident training 
in the field of Technical skills but unfortunately funding was 
reprogrammed towards Tourism and Nursing curricular.
    We, the people of the Northern Mariana Islands, have watched and 
witnessed non-resident guest workers conduct massive protests in front 
of the Federal Ombudsman and the Horiguchi Federal building complaining 
of being discriminated, exploited, forced into prostitution and so 
forth. These abuses should not be tolerated but the image painted is 
not entirely accurate. Who are these employers? Are they local 
businessmen? No Madam Chairwoman, no local resident owns a garment 
factory, a prostitution ring, or illegal gambling operations. They are 
solely owned by foreigners. Their own people abused their own; their 
abusive and exploitative practice has created the most disastrous image 
to our Commonwealth. However, these non resident guest workers should 
not demand citizenship. They have gone so far in their reasoning for 
citizenship to even include the use of children and religion as their 
front line is injustice.
    In the early 1990's, an incident with one of the Garment factories 
concerning labor abuse issues surfaced and was televised nationwide. 
This garment factory paid a substantial amount of fines in the 
millions. However, the scars remained. It gave our island a permanent 
reputation from being a beautiful tropical destination, to an island 
Paradise of abusers. Since then, foreigners have been using these past 
issues to build a case to gain status, special treatments or prolong 
their stay in the Northern Mariana Island and we must end this type of 
abuses of our local labor and immigration system. It is unquestionable 
that our local officials have mismanaged our labor and immigration to 
the detriment of the people of the NMI. A federal takeover is not a 
solution which will automatically award U.S. resident status to a 
select group of non-resident guest workers, solely based on the number 
of years spent in the Northern Mariana Islands. Such a proposal, 
without a more careful review can only lead to a greater detriment to 
our island. The United States must recognize the potential risks and 
problems if this was implemented.
    We believe this Federalization issue is nothing other than National 
Security, especially with the Military build-up on the island of Guam. 
All do respect madam Chairwoman, our island is not a stepping stone. 
The United States government has a system in place concerning 
applications to citizenship. There are steps and procedures that have 
to be followed to gain lawful citizenship and our weaknesses and 
loopholes of our local labor and Immigration system is not an excuse 
for anyone to take advantage and abuse. We, the people, recommend an 
advisory mechanism established to work alongside our local labor and 
immigration to foster a stronger and effective boarder control. Funding 
is essential to enforce a stronger and stringent boarder control and 
policy, an area of great importance for which our local government 
failed to recognize and prioritize for years until recent.
    Madam Chairwoman, our silence has proven devastating. We, the 
people of the Commonwealth, are now wide-awake and armed with greater 
knowledge. We, the people, will ensure that our local control of our 
labor and immigration are prioritized and fully addressed. We will no 
longer sit back and ignore our elected leaders failures, for we the 
people, the voters, the taxpayers voted them in and we can vote them 
out if this measures are not addressed and prioritized immediately. It 
is time for a change and time to clean the house.
    The future and destiny of our people are fast approaching and at 
stake. There is an urgent need for a course of action to correct the 
wrong and protect our indigenous population from losing the promise of 
achieving the American Dream as intended in the Covenant. Our people 
fear political and social alienation as well as the loss of our core 
identity and existence of our home island.
    Madam Chairwoman H.R. 3079 is a well thought piece of legislation, 
but we would like to point out a few, concerns and request;
    1.  We the people of the CNMI request a consideration of a STAY on 
this federalization issue of our local control on Labor and Immigration 
for we the people are as much victims of our past and present 
leadership mismanagements.
    2.  We acknowledge the non-residents guest worker contributions to 
our economy, infrastructures and development of our Commonwealth. Both 
the Commonwealth and non-resident workers have benefited financially 
and socially. Our Commonwealth must begin working toward self 
sufficiency in the workforce and someday we will no longer be dependent 
on the non-resident workers.
    3.  Sec. 6 (a) Immigration and Transition of H.R. 3079 calls for a 
1 yr. Transition after date of enactment is a challenge and we the 
people request a STAY. Mass exodus of non-residents guest workers is of 
great concern for it will further cripple our ailing economy including 
business establishments closing its doors. Our local work force is 
neither fully trained nor skilled in some areas that non-resident guest 
workers now occupy. A STAY will ensure that proper steps, procedures 
and regulations are promulgated and in place.
    4.  Sec. 6 (c) ``(2) Family-sponsored Immigrant Visas: There is a 
need for compact impact negotiations or study, the local government is 
in no position to be shouldering cost of additional sponsored 
immigrants, this has been part of our failed economy.
    5.  Local House Bill 15-38 currently pending addresses some of 
these issues. This is a good start towards strengthening our local 
labor and immigration system with a few amendments on provisions 
required. Enforcement and funding is of a priority in order to move 
forward and correct the past issues that have haunted the NMI for 
years. Full enforcement of this bill if enacted is of outmost priority 
and we the Taotao Tano's fully support this local bill, now with the 
senate awaiting passage.
    6.  Non-Voting Delegate: The CNMI's potential economic development 
and growth are critically dependent upon a secure and sound 
relationship with the U.S. government. Justice, equality, and fairness 
for the people of the CNMI demand that we have representation in the 
U.S. Congress equal to those of other U.S. Territories, for the CNMI is 
the only self-governing commonwealth of the United States that does not 
have a Non-Voting Delegate to the United States House of 
Representatives.
    In closing madam Chairwoman, The Taotao Tano group requests this 
sub-committee to recommend to the United States congress what is in the 
best interest of the people of the Northern Mariana Island. Whereas 
either side will provide results, the realization of H.B. 3079 will 
stifle the progress for our self-governance and will continue our 
dependency on the United States for support. On the other hand, the 
extension for a STAY on H.B. 3079 will provide us the opportunity to 
learn from our own mistakes and the Taotao Tano members have awaken to 
watch any undesirable leadership. We the Commonwealth have gone through 
the tough times and the journey we have taken has taught us a great 
lesson. Allow us to get back to the path that leads to self governance 
and sufficiency that is consistent with the intention of the Covenant.
    Thank you, Si Yu'us Ma'ase, and Olomwaay.
                                 ______
                                 
    Mrs. Christensen. The Chair now recognizes Mr. Sagana for 
five minutes.

           STATEMENT OF BONIFACIO SAGANA, PRESIDENT, 
                    THE DEKADA MOVEMENT, INC

    Mr. Sagana. Chairwoman Christensen, Congresswoman Bordallo, 
Honorable Committee Members, distinguished staffers and others 
in attendance. It is a distinct honor and privilege to be 
allowed to appear here before this distinguished committee and 
I speak on behalf of long-term alien residents of the 
Commonwealth of the Northern Mariana Islands and, particularly, 
the organization of which I am President, the Dekada Movement, 
Inc. If I go a little over my time with this then I hope the 
Committee will give me some leeway.
    Dekada was born over three years ago out of frustration of 
long-term alien contract workers in the CNMI labor and 
immigration, a system that failed to recognize these years of 
economic productivity, ties to the Commonwealth, and the 
contribution to the community, subjecting them instead to the 
uncertainty of annual renewals, the vagaries of constantly 
shifting labor and immigration regime more characteristic of 
cruel individuals than of workers and effectively indentured to 
their employers.
    Today, Dekada truly is a movement. Not just an organization 
with the word movement in its name. It is my honor and 
privilege today as the one representative of foreign contract 
workers invited to testify, to also recognize and speak in 
behalf of other organizations that have now joined Dekada in 
the quest to improve the status and working condition. And I am 
proud to convey the support for the Human Dignity Act Movement, 
the Filipino Contract Workers Association and the Multi-
Sectoral Overseas Workers Movement for this legislation, and 
the greetings and appreciation of these organizations and their 
members to the Committee.
    We find it particularly fitting that this hearing is taking 
place in the CNMI House of Justice for what--for that is what 
we seek justice and status commensurate with our place in the 
community. The Dekada Movement is backed by more than 4,000 
Filipinos, Bangladeshis, Nepalese, Thais, Chinese, Korean, Sri 
Lankans, and Indians and others who have been lawfully living 
and working in the CNMI for five years or more. We also have 
the support of many U.S. citizen residents. The CNMI is 
probably the most cosmopolitan place in the entire world. Over 
30 different nationalities live together peaceably here 
providing incredible cultural diversity and richness to these 
islands.
    Attorney Joe Hill has served the CNMI, he stands as a 
living testament to the Martin Luther King dream of racial 
harmony and diversity. He is the harvest wreath for the long-
term alien workers, investors, business people and immediate 
relatives who have made the CNMI their home and sown their 
energy and talents here.
    Unfortunately, most of the CNMI political leadership does 
not recognize our contribution. It is not sensitive to our 
needs. It is blind to fairness and humanity, even 
internationally recognized principles of human rights. This is 
because we are the minoritarian majority, with no vote to hold, 
(audible but unintelligible) are indifferent to our interest.
    Dekada strongly supports H.R. 3079, but we also seek 
improvements. Support for Federalization has not always been 
our position. In June 19, 2005, we published a position paper 
in the Saipan Tribune, at the time we're for minimum wage 
increase, but against Federalization of minimum wage. We sought 
green cards for long-term alien residents of CNMI, but we're 
opposed to overall Federalization of immigration.
    We called the local government to address this issue. On 
March 25, 2006, we wrote to Governor Fitial with a specific 
proposal of local legislation to provide improved status for 
long-term alien residents. Although CNMI political leaders 
promised us support, to support, there was no action taken, 
ever, even though our proposal would have produced substantial 
additional revenue to the cash-strapped CNMI government. Thus 
it became clear that the only way out of stagnation, with 
change and progress, was through the Federal Government and we 
came out in support of Federalization of minimum wage and 
Federalization of the CNMI immigration system.
    We find arguments against this legislation to be 
insubstantial, often contrived, as it becomes clear the 
Federalization and Federal improvement of status of long-term 
alien residents a real possibility, there has been a far 
(audible but unintelligible). Fears that were never voiced 
before announced but apologize for the status quo. Suddenly 
it's a no longer ``you go home'' but worry that all workers 
given improved status will leave. Organizations no one has ever 
seen or heard before line up with certain politicians to 
attempt to create an impression of wise predissension (sic) or 
in a position to Federalization. But the reality on the street 
is mostly support, when it's straight up and down, both 
Federalization wins. From my experience, impression, and 
observation, I believe that a majority of U.S. citizens they 
found support Federalization and so does a very large 
proportion of indigenous Chamorro and Carolinian population, if 
not the majority.
    Here are some of the improvements that we recommend. We 
continue to believe that long-term alien residents of Saipan 
should get admitted to U.S. lawful permanent residency, with 
the grant of citizenship should they choose it, rather than the 
local non-immigrant status proposed by the bill. Given current 
economic condition in CNMI, this status shall be granted 
without necessity of meeting the current income requirements. 
If the Congress is not prepared to grant this status to the 
entire class of long-term alien residents of the CNMI, it 
should grant it to at least the following groups: parents of 
U.S. citizen children, long-term alien resident of 10 years or 
more, foreign workers with uncollected labor awards or poor 
judgment in their favor, long-term alien residents with 
marriage of long duration ultimately ending unfortunately with 
divorce or death of the spouse without ever having obtained 
lawful U.S. permanent residency.
    The status should be provided to all long-term alien 
residents not just foreign workers. Especially provision needs 
to be made for individuals and immediate relative status under 
CNMI immigration system, and better provision needs to be made 
for foreign investor and business permit holders.
    Provisions should be made for admission of immediate 
relatives of individuals granted locally non-immigrant status 
by the bill. As H.R. 3079 is presently drafted, existing CNMI 
immigration rules actually are more preferable in spec. Special 
provision will be inside long-term immigrant terms and instead 
granted immigrant status of U.S. lawful foreign resident. 
Current rules for admission of immediate relatives of Federal 
resident under the INA would be adequate in that event.
    Mrs. Christensen. Mr. Sagana, you're over 7 minutes, so 
could you wrap up, please.
    Mr. Sagana. H.R. 3079 is not a perfect bill, but is that 
can be achieved at this time. We don't disagree for its 
enactment. This bill, even in its present form, is a huge step 
in the right direction toward fairness and justice, toward free 
labor markets, toward improved economic productivity, toward 
restoring confidences in CNMI business environment. H.R. 3079 
is an urgent need. We look forward to its passage as a priority 
for the current Congress. Thank you for the opportunity to 
testify. I'll be happy to do my best to answer any question 
that the Committee may have.
    Mrs. Christensen. Thank you.
    [The prepared statement of Mr. Sagana follows:]

             Statement of Bonifacio V. Sagana, President, 
                       The Dekada Movement, Inc.

    Chairwoman Christensen, Honorable Committee Members, Distinguished 
Staffers and Others in Attendance. It is a distinct honor and privilege 
to be allowed to appear here before this distinguished committee and 
speak on behalf of long-term alien residents of the Commonwealth of the 
Northern Mariana Islands and, particularly, the organization of which I 
am President, The Dekada Movement, Inc.
    When I speak of DEKADA, I am speaking of our organization, but I am 
also speaking of something more. For DEKADA truly is a movement, not 
just an organization with the word ``movement'' in its name.
    It is my honor and privilege today, as the one representative of 
foreign contract workers invited to testify, to also recognize and 
speak on behalf of other organizations that have now joined Dekada in 
the quest for improved status and working conditions. I am proud to 
convey the support of the Human Dignity Act Movement, the Filipino 
Contract Workers Association, Inc. (Pilco), and the Multi-Sectoral 
Overseas Workers Movement (MOVER) for this legislation, and the 
greetings and appreciation of these organizations and their members to 
the Committee.
    DEKADA was born of the frustration of long-term alien contract 
workers with a CNMI labor and immigration system that failed to 
recognize their years of economic productivity, ties to the 
commonwealth, and contributions to the community, subjecting them 
instead to the uncertainty of annual renewals and effectively 
indentured to their employers.
    In early 2004, a group of Filipino workers, taking heart in remarks 
by a prominent local official reported in the February 27, 2004 
Marianas Variety, began a signature campaign for permanent residency, 
also known as the Isang Dekada Movement. Board of Education member and 
President of the 1985 and 1995 Northern Marianas Constitutional 
Conventions Herman T. Guerrero (brother of current Saipan Chamber of 
Commerce President Juan T. Guerrero) had observed that workers who had 
been living in the CNMI for 15 to 20 years would have already gotten 
permanent residency status if they were in the United States. He 
stated, ``We need to address this issue. We cannot continue to 
disenfranchise them.''
    From the signature campaign came an association, and then The 
Dekada Movement, Inc. received formal corporate existence on October 
12, 2004. From the very earliest days, Dekada counted its members and 
supporters at around 3,000 alien workers, although less than a third of 
these were formally enrolled as members and fewer still had fully paid 
their membership dues and registration fees.
    Resistance was swift and opposition vocal. Much of the response was 
aimed at weakening Dekada by discouraging alien workers from 
contributing financial support to the organization and efforts to 
obtain improved status for long-term alien residents of the CNMI.
    We were told that Dekada had ``no chance'' of obtaining U.S. 
permanent residency, or ``green cards,'' for our members and that the 
U.S. Congress could only grant citizenship, not permanent residency. 
Dekada's leadership, though our legal counsel, of course knew better, 
but it is hard to get the correct information out to the mass of 
workers.
    Public statements were made cautioning alien workers against giving 
money to anyone ``promising'' green cards. Of course, Dekada had always 
been careful never to suggest that payment of the registration and 
membership fee would assure them of a ``green card.'' It was very clear 
that the purpose of the money was to support the quest for improved 
immigration and other status for long-term alien residents and that 
``green cards'' for long-term alien residents was just one way to 
achieve this, one thing (perhaps the most important thing to some) for 
which Dekada was campaigning. Many, if not most, of our members and 
supporters, however, made it clear that they would be satisfied with an 
improved immigration status short of admission to lawful permanent 
residency under U.S. immigration laws.
    Recently, Dekada was accused (without a shred of evidence to 
support it) of orchestrating a text message campaign calling for a 
boycott of businesses owned by Chamber of Commerce President Juan T. 
Guerrero on account of his opposition to the immigration benefits for 
long-term alien contract workers in S. 1634 and H.R. 3079. Individuals 
passing on this baseless allegation would say that some alien contract 
worker had told them that Dekada was behind the text campaign.
    Given the similarity between these false aspersions and other 
persistent disinformation campaigns against Dekada, we cannot help but 
wonder if the text campaign is not the work of agents provocateur, 
carrying it out for the principal purpose of blaming it on Dekada. We 
observe that a prominent radio commentator on Saipan uses a similar 
tactic of defaming Dekada through ``information'' purportedly provided 
by a nameless contract worker source. For example, he has repeated said 
on the air that he was told (by this unnamed, alleged contract worker) 
that Dekada officers, allegedly on instructions of their legal counsel, 
were promising workers ``green cards'' if they would pay $100.
    This, of course, was and is absolutely untrue. To the best of the 
knowledge of Dekada's officers and counsel, no one associated with 
Dekada has ever promised anyone a ``green card'' (with or without 
payment). Dekada has always been very clear about the purpose of the 
$100 combined registration fee and membership dues: to pursue improved 
status for long-term alien residents of the CNMI.
    Even the Department of the Interior's Office of the Labor Ombudsman 
has been affected by these unwarranted derogatory insinuations. Not 
long ago that office established a ``hot line'' for workers to report 
anyone promising ``green cards'' in return for a payment of money. This 
misguided action naturally suggested there might be some merit to the 
spurious allegations being spread about Dekada. It is telling that the 
``hot line'' never received even a single report of someone promising 
``green cards'' for money. Instead, the hot line was flooded with calls 
from people wanting to know when federalization would occur and how and 
when they might be able to apply for an improved immigration status.
    Today, over three and a half years after its inception, the DEKADA 
movement is backed by more than 4,000 Filipinos, Bangladeshis, 
Nepalese, Chinese, Koreans, Sri Lankans, Indian, Japanese and others 
who have been lawfully living and working in the CNMI for five years or 
more. They are individuals who have become part of the community, 
forming and raising families here, whose ``born in the CNMI'' children 
have never known any other home, and who daily are lending their backs 
and hands, minds, skills, talents, experience, and energies to the 
social, religious, cultural, and economic life of the Northern Mariana 
Islands and forming pillars that help support the CNMI economy and keep 
it alive, strong, and vibrant.
    That is the way we were able to describe our role back in March of 
2005. Today it will be more accurate to speak of our desire and 
critical place in restoring the strength and vibrancy to the CNMI 
economy.
    Passage of H.R. 3079 is imperative. The bill is acceptable in its 
present form but still can be improved substantially. This legislation 
should be made a top priority for the current Congress, finalized and 
passed as soon as possible.
    The CNMI economy cannot begin the road to recovery until certainty 
and stability in the area of labor and immigration make it possible for 
businesses to reliably forecast future risks and make confident 
business decisions to enter, remain, expand, and invest in the Northern 
Mariana Islands. The current bureaucratic morass of vacillating laws, 
regulations, policies, and practices must be replaced with labor market 
in which all workers, citizen and non-citizen, can freely market their 
skills and economic productivity is maximized both in terms of return 
to labor and business efficiency. In short, because H.R. 3079 can do a 
great deal to meet this need, it is good for labor (both indigenous and 
foreign of long residency) and good for business.
    We recognize that some businesses oppose this legislation, 
particularly certain big businesses and businesses with close ties and 
business dependencies to other businesses whose management oppose this 
legislation. A number of factors motivate this opposition, including 
fear and prejudice. Some business leaders have argued there should be 
no federalization of immigration until after studies have been done on 
what the impact would be, yet these same business leaders have no 
studies to support their cries that grant of improved status to long-
term alien residents would have deleterious affects on the CNMI.
    Dekada respectfully observes that all studies merely look at 
current conditions and data together with information and data from 
other spatial and temporal milieu and attempt to make an informed guess 
at what the future impact would be. H.R. 3079 provides for a transition 
period during which all aspects of the CNMI experience with 
federalization will be monitored. Dekada respectfully suggests that 
this is a lot more meaningful way of studying the matter than stalling 
and delaying to provide time for a static analysis, a snapshot of the 
CNMI economy as it exists today, and formulation of a set of 
assumptions--likely subject to dispute--upon which projections can be 
made. Necessary adaptations and adjustments can be made dynamically 
along the way, based on actual experience and observation, not esoteric 
models and abstract academic postulates.
    DEKADA strongly supports H.R. 3079 but also urges improvements. 
Similarly, Dekada expressed its support for S. 1634--with improvements. 
H.R. 3079 is a better bill than S. 1634 but more needs to be done. One 
of the improvements Dekada sought for S. 1634, inclusion of a non-
voting delegate in the U.S. Congress for the NMI, has been incorporated 
into H.R. 3079.
    One of the improvements DEKADA believes should be made is 
incorporation of H.R. 3165. H.R. 3165 makes changes to the local 
content rules of General Note 3(a)(iv)(A) of the Harmonized Tariff 
Schedule of the United States that would shore up the shriveling CNMI 
economy by helping to preserve part of its diminishing manufacturing 
sector. Maintenance of a healthy manufacturing sector is not just a 
corporate business interest, it is also a labor interest.
    As the CNMI manufacturing sector has declined, retail prices have 
skyrocketed, to the detriment of all workers and consumers. Part of the 
reason for this is that ships bring imports to the CNMI must now return 
to the U.S. mainland largely empty due to the lack of exports. The 
effect is that CNMI consumers must pay the costs of empty vessels 
returning, since shippers get no outbound cargo revenue.
Some Concerns Not Adequately Addressed By H.R. 3079
      Current long-term alien residents (five years or more) 
should be eligible for admission to U.S. lawful permanent residency
        without having to meet the current income requirements.
      Although Dekada believe U.S. lawful permanent residency 
should be granted all aliens resident in the CNMI for five years or 
more, Dekada recognizes Congress may not prepared to go this far. 
However, Congress should at least provide U.S. lawful permanent 
resident status to the following classes:
        parents of U.S. citizen children.
        long-term alien residents of ten years or more.
      Persons with long-term investor status in the CNMI of 7-
10 years or more should be granted either U.S. permanent residency or 
the same lawful nonimmigrant status established by the bill for long-
term alien employees.
      The bill does not address the situation of individuals 
holding immediate relative status. This is a critical issue affecting 
families of U.S. citizens, families of citizens of the Freely 
Associated States, and families of alien workers, both long-term and 
short-term.
      Recently proposed new CNMI regulations that would degrade 
the status of immediate relatives of citizens of the Freely Associated 
States point out the critical need to make this a matter of federal 
law, beyond the reach of misguided CNMI impulses. The proposed new 
regulations reflect a drift net and purse seine approach to immigration 
policy and enforcement, targeting an alleged problem perceived to exist 
but lacking any documentary or statistical evidence relative to its 
magnitude, proportion, or any actual adverse impact on the community or 
the economy, and utterly disregarding the reality of its impingement on 
the constitutionally protected fundamental right of marriage.
      The foregoing issue also demonstrates the need to ensure 
that citizens of Freely Associate States have, at a minimum, no lesser 
rights under the immigration laws of the Untied States than aliens 
admitted to lawful permanent residency.
      Many foreign workers in the CNMI have labor awards or 
court judgments in their favor that they never have been able to 
collect. Such individuals should be granted admission to U.S. lawful 
permanent residency.
      Long-term alien residents of the CNMI who have recently 
departed (say within the preceding six, twelve, or eighteen months) 
should also be eligible for whatever status is granted under the bill.
      The bill requires lawful status in the CNMI to qualify 
for immigration recognition under the new or transitional regime. Some 
aliens who have maintained lawful status for a long time recently have 
fallen out of status as a result of the present economic depression or 
for other reasons such a family calamity or medical problem. There 
should be provision for such individuals to qualify for status under 
federalization notwithstanding a recent loss of status under CNMI law. 
Perhaps there should be a system of waivers for defects in 
qualification.
      U.S. lawful permanent residency should be available to 
long-term alien residents of the CNMI who had marriages of long 
duration (over 7 or 10 years) but never obtained ``green cards'' and 
unfortunately ultimately had the marriage end in divorce or death of 
the spouse.
      There is a need to provide U.S. ``green cards'' and a 
path to citizenship for those ``semistateless'' children who were born 
in the CNMI between the approval of the Covenant and the effective date 
of Section 501 (individuals who acquired the citizenship of their 
parents at birth but have known no other home but the CNMI and were not 
helped by the Sabangan case).
      Legislation should make employers of foreign workers in 
the CNMI who know at the time of recruitment that the workers are 
required to pay recruitment fees in their country of origin in order to 
secure overseas employment legally responsible to the worker for those 
recruitment fees.
      Nationals of countries that do not have tax treaties with 
the U.S. are required to have FICA and Medicaid taxes withheld. Such 
individuals who have been paying into the system for years should 
either be granted U.S. permanent residency (so they can receive the 
benefit of their contributions) or should be entitled to refund of 
their contributions upon repatriation to their home country.
Attachments:
    Attachment 1--Letter from DEKADA leadership to Governor Benigno R. 
Fitial proposing local legislation to provide improved status for long-
term alien residents. Absolutely no action was taken by CNMI elected 
officials to address this issue, despite potential fiscal benefits to 
the CNMI government and assurances from the Governor and certain 
legislative leaders that the proposal would be seriously considered.
    Attachment 2--June 19, 2005 op-ed piece in the Saipan Tribune by 
Bonifacio V. Sagana and Stephen C. Woodruff, ``Dekada aspirations equal 
CNMI's long-term best interest.''
    Attachment 3--Open letter to Interior Secretary Kempthorne from 
Human Dignity Act Movement President Engracio ``Jerry'' B. Custodio 
published in the June 6, 2007 Saipan Tribune, after which Mr. Custodio 
was given notice that his contract and non-resident worker permit would 
not be renewed by his employer, in retaliation for Mr. Custodio's 
active role in the campaign for improved status for long-term alien 
workers (and increase in the minimum wage).
    Petition Copies for retention in committee files for review and use 
by the Committee:
    Attachment P-1--July 2007 Statement of foreign contract workers 
prepared with the assistance of human rights activist Wendy Doromal and 
submitted to the Senate Committee on Energy and Resources in connection 
with July 19, 2007 hearing on S. 1634, with 144 pages of signatures 
supporting, in substance, S. 1634, the Senate counterpart of H.R. 3079.
    Attachment P-2--Eight additional pages of signatures supporting 
legislation extending U.S. immigration law to the Northern Mariana 
Islands and improving the immigration status of long-term alien 
residents of the CNMI, collected or received too late to be included 
with original submission to the Senate Committee on Energy and 
Resources.
    Attachment P-3--Final set of 30 pages of additional signatures 
received or collected too late to be included with original submission 
to the Senate Committee on Energy and Resources, petitioning the U.S. 
Congress for extension of U.S. immigration law to the Northern Mariana 
Islands and improvement of the immigration status of long-term alien 
residents of the Commonwealth of the Northern Mariana Islands.
    [NOTE: Attachments have been retained in the Committee's official 
files.]
                                 ______
                                 
    Mrs. Christensen. I now recognize myself for five minutes 
of questions. Ms. Sablan, when the Covenant was negotiated, its 
intent, as is ours, was to improve the lives of the people of 
the CNMI. And as I listened to your testimony and I listened to 
Mr. Cruz' testimony I hear very little of that improvement and 
I wonder if you could tell me one or two areas where the 
Chamorro and Carolinian people of the CNMI lives have improved 
since the Covenant.
    Ms. Sablan. How it's improved.
    Mrs. Christensen. Yes, under the Covenant system. Were 
there any areas of improvement?
    Ms. Sablan. Well, I think that--and the first one that 
comes to mind is that I think we have come a long way as far as 
our understanding and expectation for the government. We have a 
stronger grasp of community and democracy and what we should be 
able to expect from our elected leaders. Certainly now, 
especially. I think the crisis has a way of raising people's 
awareness of how much our government has failed, as in how much 
of that we deserve. I think that's an improvement. At least 
there are people coming out now and expressing their concerns 
and their discontent, and that wasn't something that happened 
so commonly by the people.
    There are certain freedoms that I appreciated as a U.S. 
citizen, all the freedoms (unintelligible) and everything that 
comes about with being a U.S. citizen. And, you know, those are 
not so much tangible improvements maybe, but we experience and 
enjoyed them. And I think that that has certainly been an 
improvement.
    Mrs. Christensen. Do you think that the Federalization of 
immigration here takes away self-government?
    Ms. Sablan. No, I don't. And I think there are many, many 
people who recognize--(pauses). Actually, I haven't heard 
anybody dispute that we agree that the United States would have 
the authority to come in and Federalize immigration. I mean, 
they are very clear in the Covenant, and self-government has 
been retained. There are other places that also abide, many 
more places that abide by Federal immigration law, and as far 
as I know, their self-government is still retained. We will 
continue to elect our leaders and we will continue to strive to 
improve public services and to provide adequate services for 
our people. I think that those are all important aspects of 
self-government and I don't think they're compromising 
anything. I think that they would be enhanced by a more stable 
immigration program here.
    Mrs. Christensen. Thank you. Mr. Cruz, you have asked, 
despite the many negatives that you cite in your testimony, you 
still asked that we should hold off and place a stay in 
consideration of this bill to give CNMI a chance to learn from 
its mistakes. Now, I was here in '98 and in my opening 
statement, we go back to even 1986, where concerns were being 
raised and cautions where being given around, specifically 
around the immigration issues. Do you still think that 
providing a longer time, again, would help us to, as you say, 
learn from our own mistakes?
    Mr. Cruz. Yes. Yes, Madam Chair. For one, I resent the fact 
that our island is called a stepping stone. I disagree with 
that. My own island is not a stepping stone to an enemy. I do 
have concerns with the issues on the labor and immigration 
complaints in the past. And one of those is, like back in the 
90's, like you mentioned, you know, this garment factories 
here, this non-resident guest workers here. You know, they come 
and go, come and go and they make complaints of abuses, 
exploitations, human smuggling and all kinds of complaints. 
But, I sat back, Madam Chair, and I thought about this and as a 
witness, I can't remember or I can't even recall any local on 
this island that--the richest local, I believe, here is Joe 
Ten, for that matter. There is no local here that owns a 
garment factory. There is no local that owns a sex trade 
business here. And there is no local here that owns an illegal 
gambling system or whatever you want to call them.
    And, yes, we are for a stay, because there is a need to do 
a study, and do a study on this Federal take-over issue. And I 
believe that the government at this point, as we speak, has 
been doing a good job at cleaning house, cleaning this labor 
abuse issues here, complaints. And it's sad that it took up to 
this point here, to bring new people here to have this issue 
really addressed. So, it really touches my heart that our own 
leaders have really failed us in the past. And, yes, I am very 
saddened about the issues of the locals being put to the back, 
you know, and just up to this year, the 20 percent rule putting 
the locals priority was just enforced. Where was this priority 
in the beginning? You know, I would say that at the same time, 
the foreign non-resident workers abused themselves. At the same 
time, I feel the same way with our local people, our leaders, 
them discriminating against their own people. And that really--
I grew up with that.
    Mrs. Christensen. Thank you. My time is up and I'd like to 
recognize Congressman Faleomavaega for his questions.
    Mr. Faleomavaega. Thank you, Madam Chair. I want to thank 
the witnesses for their most thought-provoking statements and 
testimony before our Subcommittee. Mr. Sagana, I am listening 
to your testimony as the leader of the long-term alien and 
contract workers. You know, many countries in the world do have 
guest worker programs, especially countries like in the Middle 
East. I think our Filipino community throughout the world, I 
think they probably have little over half a million workers all 
over the world which bring in about $20 billion dollars a year 
to the Philippine economy, or something to that nature. Is it 
your understanding, when you were first brought here at CNMI 
that you're to become as a guest worker not with any further 
intention of seeking status difference of becoming maybe 
eventually a U.S. citizen or some other status?
    Mr. Sagana. No, sir. I just came here to work. I don't have 
any intention when--a plan to use that to get another 
opportunity.
    Mr. Faleomavaega. So, it was never your intention to seek 
different status? You're here just to work and send the money 
back home and continue under that status just as a guest 
worker, but not later on to seek a different status as a 
permanent resident alien now; am I correct in this.
    Mr. Sagana. You're correct, sir. The reason why is because 
of my family. I just want to work for my family, to send them 
the money for--to support them. That's it.
    Mr. Faleomavaega. And it's perfectly understandable. You 
know, we have about 12 million illegal aliens that are working 
in the United States and they bring in about $52 billion 
dollars to the Central and the South American economies, which 
go directly to the needs of the families, which I think it's a 
better way of doing it rather than have you go through 
government, which then the poor families never get the resource 
of these people who really work hard for. And you're saying 
that, in representing the long-term alien conflict needs, is 
that about 30,000 long-term alien workers currently in 
residence in CNMI?
    Mr. Sagana. I believe more than 20,000. I am not really 
sure if it's 30,000.
    Mr. Faleomavaega. So, about 30,000 of you right here, right 
now.
    Mrs. Christensen. We know it's not even 20,000--it's no 
more than 20,000.
    Ms. Bordallo. It's about 20,000.
    Mr. Faleomavaega. Well, 20 to 30,000, give or take a couple 
of thousand; all right. So, it's about 20,000.
    Mr. Sagana. More than 20,000.
    Mr. Faleomavaega. Twenty thousand long-term alien workers 
and for many of them, their status is not clear; am I correct 
on that.
    Mr. Sagana. They have their status.
    Mr. Faleomavaega. They're legally here.
    Mr. Sagana. Legally.
    Mr. Faleomavaega. I see, but they're also now seeking a 
more--a better relationship status with the United States as 
well as with the CNMI; is this----
    Mr. Sagana. Yes, sir.
    Mr. Faleomavaega. OK. But that was never the intent of your 
coming here; it was just to work and send money back home.
    Mr. Sagana. Yes sir, that's our intention. Just to work for 
our family.
    Mr. Faleomavaega. Do you feel that the CNMI government had 
not been fair to the needs of the guest worker program here in 
CNMI for all these years?
    Mr. Sagana. There is some--like there is some labor case 
like stated in the statement that we have uncollected labor 
awards. Actually, I am a part of it. I am waiting for 13 years, 
until now I wasn't able to get the award. But there is a 
decision wherein----
    Mr. Faleomavaega. Mr. Cruz, you had made a very, very 
strong statement and I have to commend you for your courage to 
speak out. I recall the statement by Martin Luther King Jr. who 
said that, ``In the end we will not remember the words of our 
enemies, but the silence of our friends.'' And I wanted to ask 
you, do names like Jack Abramoff and Tom DeLay sound familiar 
in terms of how this whole situation had come up in a very 
controversial, to put it mildly?
    Mr. Cruz. Lobbyist and (audible but unintelligible) on our 
taxpayer--tax money, and I thank God they are put away.
    Mr. Faleomavaega. Well, Mr. Abramoff is in jail obviously, 
and Mr. Tom DeLay is under indictment. You don't agree with the 
current efforts by the Administration to take corrective 
actions in trying to improve the economic standing of the 
territory of CNMI? If they're making this good faith effort, 
what do you recommend? Do you think this proposed legislation 
is going to cure a lot of problems that we face here in CNMI.
    Mr. Cruz. I read the entirety of 3079 and there are some 
provisions that I am quite concerned about. It's not a negative 
issue. I mean, I feel like I could address some of them, a few.
    Mr. Faleomavaega. Just one because my time is already up.
    Mr. Cruz. OK. The most important thing is on the labor 
immigration control. I believe that we can come up with a 
mechanism, you know, such as a monitoring mechanism like, I 
believe, Mr. Reyes earlier said that we will put the local and 
probably the Federal alongside together with each other. You 
know, because then the very issue is labor immigration here. 
And we all know for a fact that it's a matter of national 
security, especially when that buildup--the military buildup in 
Guam. And I am kind of really touched with this because to make 
an issue for this national security issue, which is very 
important and is very crucial and critical, to use excuses, 
make excuses on our island, such as the abuses and so forth. 
Why don't we just come up straight up and let's be fair in 
saying, it's a matter of national security, you know. And I 
believe that there should be a mechanism, I guess, in our local 
control, because the Covenant is protecting us with this self-
governing issue. And that is, 101, 102, 103 of the Covenant, 
you know. And I believe that we could work around this--you 
know, find better solutions.
    Mr. Faleomavaega. I am sorry my time is up. I am sorry, Mr. 
Cruz. I don't have time to ask you another question.
    Mrs. Christensen. We're running up against time. So, I'd 
now like to recognize Ms. Bordallo.
    Ms. Bordallo. Thank you. Thank you very much. First, Ms. 
Sablan, I want to commend you for your civic contributions to 
the discussion regarding the Federalization of immigration. I 
have read your testimony. It's in depth and certainly reflects 
your stand. And I always think it's important to hear from the 
younger generation.
    Now, you testified that the immigration and labor systems 
in place lack the institutional capacity and political will to 
control the influx of immigrants, their health, their criminal 
backgrounds, and their illegal overstays. You further testified 
that in 2005, the CNMI lost $114 million dollars in guest 
worker remittances. So, in the last two years, how was the 
system changed to address these problems? Is it worse?
    Ms. Sablan. Well, there have been, from what I can tell, 
some considerable strides that have been made in this 
Administration. You know, our Governor referred to labor 
(audible but unintelligible) that have been closed. And, I just 
think that there are deeper systemic problems with our 
immigration and labor program. And, you know, we have something 
like 20,000 to 30,000 guest workers here and our government is 
losing revenue in all departments. And if we don't have the 
resources to properly monitor the people that we have here and 
we continue to bring people in still, I can't imagine that 
things will get that much better.
    Ms. Bordallo. So then you do support Federalized 
immigration?
    Ms. Sablan. Oh, yes, yes.
    Ms. Bordallo. All right. I just wanted to get it on the 
record.
    Ms. Sablan. Yes.
    Ms. Bordallo. All right. And now Mr. Cruz and Mr. Sagana, I 
appreciate you coming here before us to give your testimony and 
I want to state for the record that we have a very large 
Filipino community on Guam. You came out with some solutions to 
some of the problems that you stated. And, Mr. Cruz, I always 
like to hear from the indigenous people, I think you represent 
them. And from your testimony it seems to me that the CNMI 
Government is unable to cope with the challenges of revamping 
its labor and immigration systems and yet you oppose a Federal 
intervention. So, what suggestions do you have on how the 
Federal government or the local government can revamp these 
systems without the implementation of proposed measures 
contained in H.R. 3079? What is your answer? You mentioned all 
the negatives. So, I just wondered if you feel that the local 
government can handle this.
    Mr. Cruz. Yes, yes we can. And, as I said, at this point, 
they have been doing a good job. And, I am not opposing this 
bill, this Federalization. I am not for it. But rather, I am 
saying I would like a stay on it, you know, to further----
    Ms. Bordallo. Would you like more impact studies on certain 
aspects of the bill?
    Mr. Cruz. Yes, ma'am, exactly.
    Ms. Bordallo. All right. Thank you very much and I yield 
back my time. Thank you.
    Mrs. Christensen. Thank you. And we all thank the witnesses 
for their testimony and the members for their questions, and we 
may have additional questions because, as I said, you know, 
we're running up against a time wall here and we appreciate 
your taking the time, we appreciate your patience in waiting so 
long. And at this point, we thank you and you're dismissed from 
this session.
    Mr. Cruz. Thank you.
    Mrs. Christensen. And now I'd like to recognize the fourth 
panel of witnesses; Mr. Alexander Sablan, Vice-President of the 
Saipan Chamber of Commerce, Ms. Lynn Knight, President of the 
Hotel Association of the Northern Mariana Islands, and Mr. 
Jesus C. Borja of the Enterprise Group. And we thank you also 
for your patience.
    The Chair now recognizes Mr. Sablan to testify for five 
minutes.

 STATEMENT OF ALEXANDER SABLAN, VICE-PRESIDENT, SAIPAN CHAMBER 
                          OF COMMERCE

    Mr. Sablan. Good afternoon. Hafa Adai, Madam Chairwoman and 
Members of the Committee. I am Alexander A. Sablan, Vice-
President of the Saipan Chamber of Commerce. I am honored to 
testify before this committee concerning H.R. 3079 and the 
possible extension of Federal immigration law to the 
Commonwealth of Northern Mariana Islands.
    I would like to begin my testimony by clarifying a rather 
distorted message of propaganda, if you will, that has been 
advanced by individuals in news reports. A message that does 
not reflect the correct position of the Saipan Chamber of 
Commerce. Madam Chairwoman and the Members of the Committee, 
the Saipan Chamber of Commerce and its members support the 
general intent of H.R. 3079. We do not purport to deny 
Congress' unilateral right under Section 503 of the Covenant to 
take control and implement the Immigration and Nationality Act, 
and the subsequent enforcement of the Department of Homeland 
Security that oversees this Act.
    In a recent majority vote, the members of the Saipan 
Chamber of Commerce upheld the decision of the Board of 
Directors in support of making very compelling statements 
regarding our concern about the vagueness of the legislation 
presented in H.R. 3079.
    On July 19, 2007, our President, Juan T. Guerrero, stated 
similar concerns about S. 1634 in his presentation before the 
U.S. Senate Energy and Natural Resources Committee. It is our 
hope that we can draw a favorable response with good amendments 
to H.R. 3079 as currently drafted. And with all due respect, 
this legislation has far more questions than answers within our 
business community. Anxiety is high about what several 
Administration Cabinet Secretaries will provide in the way of 
opportunities and challenges for the CNMI after propagated 
regulations are drafted and implemented without further input 
from the people of the CNMI, the very people that these 
regulations will affect most.
    I want to clearly state that a majority of the Chamber 
members are extremely concerned that this legislation has not 
considered the realities of our current and future economic 
opportunities and our geographically remote region from 
America.
    Furthermore, there is additional concern that members of 
the U.S. Congress, that live approximately 8,000 miles from our 
borders, may not truly understand the impact of legislation 
before a careful, impartial, and unbiased study is completed by 
the General Accountability Office. We plea for this study to be 
completed so that good legislation that makes sense for our 
economy and community will be passed into law to ensure 
sustainable economic growth in the perceivable future.
    The Chamber is keenly aware of the state of our fragile and 
weak economy. Many members have donated thousands of hours of 
their time in recent years to ensure we clearly understand our 
predicament and assist wherever possible to help grow and 
diversify our island's economy.
    We have appreciated the efforts of the Office of Insular 
Affairs Deputy Secretary David Cohen to help us conduct various 
island business opportunities conferences to entice U.S. 
mainland investors to seek opportunities in expanding in our 
islands, and we certainly have seen some fruits of our labor.
    I hope this committee understands the strength of our 
conviction, and the continued hope and aspiration of those 
locally that roll-up their sleeves to sit at the table and 
discuss the many good systemic changes that we made in our 
community. Changes such as improving our education. We believe 
in improving education; we want to see magnet schools in the 
Commonwealth.
    We have looked at workforce development. We recently sat 
through a job study with the Office of the Public Auditor. We 
are keenly aware of the labor reforms that are going on in the 
Commonwealth. We have sat at the table with Congresswoman 
Jacinta Kaipat for a year, talking about 15-38 and working 
toward good, good reform measures in labor laws.
    Market diversification, again, talking to the issue of 
looking at the opportunities document. Enforcement in all 
levels of government are local recognition that, while things 
are not perfect, we live in the same recognition that all the 
insular areas currently strive with the realities of limited 
resources. We have heard it said that we pose a threat to 
homeland security in the United States because we are outside 
the auspices of U.S. Immigration control. We understand that 
homeland security for the region is far more complicated than 
merely controlling waters and borders. But what we would 
recommend is that legislation explore the option of maintaining 
the CNMI Immigration Policy while working hand in hand with 
U.S. Federal agencies for technical support, training, and 
sharing intelligence or screening of our guest workers and 
tourists. These would achieve the end result of homeland 
security while still maintaining the potential for a viable and 
robust tourism economy.
    We are continually amazed at the Federal Government and in 
particular the Office of the Insular Affairs, who continue to 
spend millions of dollars over ten years to help us build a 
border management and labor immigration identification system, 
better known as LIDS, only to now disparage the process. 
Legislative process is self-sustaining through the fees that 
are collected, and has allowed the respective CNMI agencies to 
be more alert and aware of those who enter and who depart. And 
how the LIDS process works is, we capture if anybody comes in, 
we capture if anybody goes out. Not many jurisdictions do that.
    Despite the conjecture and innuendos concerning our 
immigration policy, this system has markedly changed from years 
past when most of the infractions that our critics often 
referred to occurred. Our immigration labor system works for 
our economy and community that has a limited pool of U.S. 
citizen to draw from, the skilled workers. Because of our 
remote geographical location, we rely greatly on the backdrop 
of Asia for our labor pool needs and not the over 300 million 
U.S. citizens and 13 million illegal aliens at its doorstep, as 
does the mainland United States. Now, what we have is a system 
that conforms to our unique immigration and labor requirements 
and our coveted tourism markets and our service industries that 
maintain a very good track record of ensuring that those that 
enter as guest workers and tourists leave in the same manner. 
There has been much debate concerning the issue of status of 
our long-term guest worker population. The Chambers recognizes 
and heralds the contributions to the hundreds and thousands of 
guest workers that have come and gone, building and growing our 
economy over the last 24 years since the inception of the Non-
Resident Worker Act. We are cognizant and sympathetic to their 
situations as they seek only to improve their standard of 
living as compared to the limited opportunities that may 
present them in their own country. We have heard much 
conjecture concerning the moral obligation extending status for 
individuals that have lived and made the CNMI home for over 
five years.
    We would pose the question, though. Would our moral 
obligations have been fulfilled if we had sent them home 
prematurely just to avoid the wrath of the Federal government? 
Was it not in the best interest, as well as ours, to continue 
their employment when the services were needed and a qualified 
local resident was not available? If these statements are 
indeed true, why are we now being urged to set forth policies 
that will cut their proverbial economic legs out from 
underneath them?
    Our community completely understands our moral obligations 
and we do not condone or tolerate the exploitation of an abuse 
of anyone. It upsets our people to no end to read disparaging 
news reports, and more recently press releases, that reflect 
unfortunate isolated circumstances perpetrated by unscrupulous 
individuals onto others but portrayed as a moral epidemic 
infecting all of the people in the CNMI.
    Mrs. Christensen. Are you close to finishing?
    Mr. Sablan. Yes, I am. I am closing. I make an emphatic 
plea to take pause and study the likely impact of legislation 
before it is enacted. We ask that you recognized CNMI law was 
never developed with the potential of grandfathering of 
thousand of workers, and the potential of tens of thousands of 
their family members, as lawful non-immigrants in mind. The 
likely financial impact of lawful non-immigrants, that 
according to a recent interview of Deputy Secretary David 
Cohen, spells volumes to the paradoxical policy regarding 
Freely Associated States citizens and the Federal Government's 
continued position that they will not guarantee Compact-Impact 
money to support the huge migration to Guahan, CNMI, and Hawaii 
that has occurred. How can this likely impact be ignored?
    In closing, and to end on a high note, I would like to 
thank you, Madam Chairwoman, and Congressman Nick Rahall and 
sponsoring members of the Committee for including the provision 
in H.R. 3079 that provides for the CNMI a nonvoting Delegate to 
the U.S. Congress. The Chamber has long supported the effort to 
lobby for a Delegate, and we are very supportive of this 
provision. It is truly time that the CNMI to have a rightful 
seat in Congress. Si Yu'us ma'ase. Urumai (phonetic). Thank 
you.
    Mrs. Christensen. Thank you.
    [The prepared statement of Mr. Sablan follows:]

           Statement of Alexander A. Sablan, Vice-President, 
                       Saipan Chamber of Commerce

    Hafa Adai, Madam Chairwoman and Members of the Committee. I am 
Alexander Sablan, Vice-President of the Saipan Chamber of Commerce. I 
thank the committee for the privilege to be submitting testimony 
representing the Chamber's 167 members and am honored to provide our 
testimony before this Committee concerning the potential extension of 
federal immigration law to the Commonwealth of the Northern Mariana 
Islands.
INTRODUCTION
    Our President Juan T. Guerrero of the Saipan Chamber of Commerce 
provided testimony on July 19, 2007 on similar legislation (S.B. 1634) 
before the Senate Committee on Energy and Natural Resources with 
respect to its labor and immigration provisions that are virtually 
identical to H.R. 3079. We recognize the distinct addition of a U.S. 
Delegate Representative and at this time we thank Madam Chairwoman 
Christensen and Representative Nick Rahall for supporting this 
particular provision in this legislation. I will submit that the 
Chamber's position has always been to support the effort to secure a 
U.S. Congress Delegate Seat we hope that passage of amended good 
legislation in H.R. 3079 the CNMI will finally achieve the 
representation in Washington, D.C., that the U.S. Citizen people of the 
CNMI so richly deserve. Madam Chairwoman and committee members we have 
extensively discussed the concerns of the Commonwealth business 
community with regard to the application of federal immigration law to 
the islands, and on the onset we appeal for an opportunity for the 
Commonwealth to work together with the federal government to address 
federal concerns in a manner that recognizes local realities. Both 
Governor Benigno R. Fitial and Lieutenant Governor Timothy P. 
Villagomez on two separate occasions and testimonies before the U.S. 
Senate and now before your committee have requested for a careful and 
independent study of the CNMI by the Government Accountability Office. 
Our Resident Representative to the United States Pedro A. Tenorio also 
asked this Committee that a joint congressional, administrative, and 
CNMI study group be formed to enable careful study, deliberation, and 
consultation prior to the enactment of federal legislation affecting 
the Commonwealth's immigration policies.
DISCUSSION
    There has been much rhetoric concerning the perceived position the 
Saipan Chamber of Commerce Board of Directors and more recently in a 
Special General Membership Meeting earlier this month, in an 
overwhelming vote of confidence, the majority of our members support 
the Chambers overall position. I wish to convey to you Madam Chairwoman 
and members of this committee that the Chamber recognizes and 
understands that under Section 503 of our Covenant Agreement the United 
States Congress has unilateral power to take control and implement the 
national policy of the Immigration and Naturalization Act upon the 
CNMI. We do not contest this apparent right and I further want to 
assure you it is not our position to reject this legislation but rather 
it is our hope that you and your fellow colleagues listen to the very 
real concerns we have conveyed, probably, more in questions we have 
concerning implementation of this legislation in promulgated rules and 
regulations, than in true substantive amendments that we can offer to 
help improve the legislation. Most of this written testimony I submit 
today is the same exact position paper we submitted to the Senate 
Committee on Energy and Natural Resources. I have provided an abridged 
version to ensure consistency with our submittal before your committee 
but our message and position is much the same.
    Over the past 24 years, the Commonwealth has administered a labor 
and immigration program, that was designed and agreed upon by the 
federal and local governments to address the unique labor and tourism 
needs of the islands, consistent with the letter and intent of the 
Covenant to Establish a Commonwealth of the Northern Mariana Islands in 
Political Union with the United States of America. This program was 
not, and is not, intended to be parallel to or wholly consistent with 
the federal immigration and naturalization policies and objectives of 
the United States. The Covenant, and related laws, contemplated and 
provided for unique treatment of tourism and labor issues singular to 
the Commonwealth. Now, 29 years after the implementation of the 
Covenant, the Commonwealth is being taken to task by staff members of 
the United States Congress for not fulfilling some apparently unstated 
objectives of the federal government and for allegedly abusing this 
system in a manner that has not violated the Covenant, or the 
federally-approved CNMI Constitution, or federal laws, or local laws.
    There was an observation in 1998 that the CNMI labor and 
immigration system ``is broken and cannot be fixed locally.'' This has 
been proven wrong. As more fully addressed in our February testimony 
before the Senate Energy and Natural Resources Committee, Lieutenant 
Governor Villagomez's February testimony, the Commonwealth has made 
great strides in proactively discouraging labor and immigration abuses, 
as well as in the investigation and prosecution of alleged abuses. In 
comparison with the unmitigated immigration control failures of the 
mainland United States during the same time frame, the marked 
improvements in the locally-administered Commonwealth immigration 
program should be acknowledged and fostered.
    There is a reason that you may have heard many requests for serious 
study of the overall issues facing the Commonwealth before the United 
States Congress continues to legislate our future--requests from the 
Chamber of Commerce, from the local administration, from our Resident 
Representative, and in written form from individuals, as well as a 
local group that collected hundreds of signatures of both United States 
citizens and non-resident workers. The reason that there is much clamor 
for such a study is that so many people believe it is impossible for 
this Committee or the United States Congress to formulate sound policy, 
or even to determine if federal policy needs to be formulated at all, 
without the benefit of an impartial, unbiased, and current review of 
the Commonwealth's strengths and weaknesses. All of the testimony you 
have heard and read to this point, including previous testimony from 
the Chamber, comes from specific viewpoints and with certain hopes and 
expectations. If you do not have access to underlying facts, how can 
you move forward in a fair fashion? What is needed before Congress can 
continue is the serious and comprehensive study that has been asked for 
from many quarters--not additional opinion.
    While media reports might lead the uninformed to believe otherwise, 
the CNMI government and its agencies have worked closely with various 
agencies of the federal government for 24 years, in an attempt to 
ensure that programs designed to stimulate economic growth did not 
condone, promote, or tolerate labor abuses. The Commonwealth's foreign 
worker program solves a labor shortage problem with respect to many job 
categories and provides attractive employment opportunities for foreign 
workers who earn many of times what they would earn in their home 
countries, at salaries that are affordable to local businesses 
struggling to survive in an isolated and depressed economy, and which 
jobs would be unattractive to mainland workers at the prevailing wages. 
Workers are free to transfer to different employers with the consent of 
their current employer, or may unilaterally choose to transfer at the 
end of their contract period (which is usually one year). Workers enjoy 
all legal protections available to United States citizens, and in some 
respects, even more. All employers are required to provide medical 
coverage for non-resident employees, and are also required to provide 
return airfare to each non-resident employee's country of origin at the 
termination of each employee's contract term if that employee desires 
to return home. All of this information has been disclosed on many 
occasions, in many forms, by many individuals and groups. There is 
little more that I can add to the detailed testimony offered by the 
local administration, the Chamber, and others, as well as in other 
forums with federal officials, other than a plea that you study and 
consider facts and not tired, biased, and demonstrably false 
allegations.
    Former Director of the Office of Insular Affairs (Clinton 
Administration) Mr. Allen Stayman has referred to our local immigration 
and labor departments as ``essentially organized crime.'' To suggest 
that trafficking, prostitution, or other human rights abuses are the 
result of the policies, procedures, or efforts of the CNMI government 
is irresponsible, false, and unbecoming of a federal official. There 
occurs, in the mainland United States, frequent and well-publicized 
human trafficking, with related prostitution and human rights abuses. 
No one, including me, would suggest that these terrible acts, committed 
by criminals, are somehow the fault of the Immigration and 
Naturalization Service, or that law enforcement agencies are turning a 
blind eye. It is unfair and disingenuous for Mr. Stayman to ascribe 
broad criminal intent and/or behavior to our local government as a 
result of similar individual unfortunate events that may occur in the 
Commonwealth. There will always be bad people who commit criminal acts. 
The most we can expect of any government is that best efforts are made 
to deter such behavior, and vigorous prosecution occurs whenever such 
behavior is uncovered. That is what happens in the Commonwealth, both 
at the local and federal levels.
    While there has been much discussion that ``federalization'' is the 
only option, there is simply no empirical evidence that the 
Commonwealth's immigration system can be more effectively run through 
federal offices than by retaining local control for purposes of 
administering a tourism-based and employment-based immigration program. 
Our economy is small and fragile. The much-improved processes and 
procedures in the Commonwealth allow for nimble adjustment to the ever-
changing needs and requirements of the countries from which workers and 
tourists originate. Unlike the mainland United States, the Commonwealth 
will not have the luxury of waiting for federal machinery to gear up 
and effectuate changes required by any country or in response to the 
needs of that country's citizens--those travelers will simply opt to 
travel to another Pacific-rim tourist destination with less onerous and 
time-consuming visit requirements for vacationing. If the well-
publicized visa delays currently being experienced by many visitors to 
the United States were to occur in the CNMI, the results would be 
disastrous to the tourism industry and the business community as a 
whole.
    It has been suggested that the Chamber has opposed any ``U.S. 
action'' with respect to improving our local labor and immigration 
processes. In the Chamber's testimony before the U.S. Senate on S.B. 
1634, we averred, ``across-the-board imposition of federal law...will 
[not] solve any problems, real or perceived, that may exist in the 
CNMI.'' (Emphasis added.) More importantly, the Chamber would ``look[s] 
forward to an opportunity to work with federal officials to reach 
agreement on these important issues in ways that answer the concerns of 
all interested parties without destroying our local economy.'' The 
Chamber has never opposed, but in fact has and does support, working 
with the federal government to address any legitimate concerns. The 
Chamber did and does object to any such across-the-board imposition of 
federal immigration law to the CNMI, especially in the absence of any 
serious consultation and study.
    The Chamber fully supports the enforcement of border protection by 
the federal government. This is a component of an overall immigration 
program that is distinct from the Commonwealth's ongoing need to 
control locally the admission of foreign workers as well as tourist 
visitors. The federal government's border patrol obligations are 
explicitly contemplated in the Covenant. Federal control of local visa 
programs is not.
    The ``grandfather clause'' contained in the Senate bill 
contemplates allowing workers who have lived in the Commonwealth for 
more than five years prior to the enactment of the law the right to 
``lawful nonimmigrant'' status. Such action allows these individuals 
the right to remain in the Commonwealth (or, for that matter, relocate 
to the mainland United States) for purposes of living and working. This 
action would allow the right to immigrate family members to the 
Commonwealth under ``immediate relative'' status. Such status would be 
renewable by those individuals every five years. They would not be 
eligible to vote or to receive federal entitlements, such as Medicaid/
Medicare, federal scholarships, and the like. We have estimated that 
approximately 8,000 current workers in the Commonwealth would qualify 
for such status. There are two possible outcome scenarios under this 
grandfather clause, and neither is good. The implications of allowing 
almost 8,000 individuals, who are currently required to return to their 
countries of origin when they are no longer able to obtain employment 
in the islands, to remain--and to immigrate immediate relatives to join 
them, for the long-term--are profoundly negative for the Commonwealth. 
These tens of thousands of lawful nonimmigrants would be given the same 
preference for local jobs that this Senate has repeatedly claimed to be 
attempting to protect for United States citizens. These lawful 
nonimmigrants and their families would prove an immense burden on the 
local infrastructure in a way, and to a degree, that was never 
contemplated by--nor allowed--under the Commonwealth's existing guest 
worker program. In addition to our objection to the apparent intent to 
amend the Commonwealth's Covenant-sanctioned immigration program ex 
post facto, we note that there seems to be absolutely no congressional 
contemplation of the funding for the enormous costs that would 
certainly be shouldered by the Commonwealth in such an event.
    There is another possibility concerning these individuals who would 
be granted lawful nonimmigrant status and who would be able to travel 
freely to and work in the mainland. They could simply move to the 
continental United States in search of higher-paying job opportunities 
than exist in the Commonwealth, thereby depriving the vast majority of 
local employers of the qualified and experienced labor pool that they 
have, for years, paid and treated fairly in accordance with CNMI law 
under the provisions of the Covenant. Aside from the implications for 
the United States of allowing the immigration of thousands of foreign 
nationals to the mainland, which is not the concern of the Commonwealth 
government or business community, it would prove a tremendous blow to 
business in the Commonwealth. While we have heard the concerns with 
``fairness issues,'' we believe (except when employers violate the 
law), that the business community and the local government have treated 
these individuals fairly. Non-resident workers are hired for limited-
duration contracts, which may be, and usually are, renewed on an annual 
basis. There has never been any promise of permanent residency, or any 
other federal immigration status. These workers have, for the most 
part, elected to remain in the Commonwealth and work for wages, and 
under conditions superior to other alternatives they have. Those who 
have received better offers have left. ``Unfairness'' has been created 
by federal officials who raised the issue of ``likely'' federal 
immigration status for non-resident workers in an effort to bolster 
support for federal immigration control in whatever quarters they 
could.
    To a large degree, our most serious reservation with the House bill 
is that it appears to legislate through yet-to-be-determined 
regulation. While we have no doubt that this Committee and this 
Congress have only the best intentions, and the best interests of the 
Commonwealth at heart, we must object to any legislation that places so 
much power with so little congressional direction in the hands of 
future Cabinet Secretaries.
    In January of this year, Mr. David Cohen spoke at the Chamber's 
inaugural dinner and noted,
        I was at a meeting the other day, and one of our local 
        legislative leaders remarked that at most, only 20 percent of 
        the Members of Congress have even heard of the CNMI. And I 
        thought to myself, ``That's the good news; the bad news is that 
        that 20 percent has only heard about the CNMI because they read 
        Ms. Magazine.'' Most Americans who have any sort of impression 
        at all about these islands have the wrong one.
    Mr. Cohen's apt comments about the power and impact of biased and 
misleading reporting sum up my feelings about the negative and untrue 
publicity that continues to parade as ``fact.'' We have asked for 
serious study by an independent government agency, the General 
Accountability Office, before the finalization of any legislation. What 
we received instead was no study by anyone and a bill apparently not 
based on our current reality that commits significant issues to future 
determination by unknown appointed federal officials.
CONCLUSION
    We plead with this Committee to study the likely impact of this 
legislation before it is enacted, and not after. It is manifestly 
unfair to the people of the Commonwealth--United States citizens--for 
this Congress to impose a law on the islands that will not only wreak 
havoc with our labor pool and our tourism industry, but will also 
dramatically alter the quality and nature of life, the demographic 
make-up, and the right to local governance over local issues that we 
negotiated for and agreed to in the Covenant.
    The Chamber would be pleased to answer any questions or provide 
further information that might be of assistance to this Committee.
    Si Yu'us Ma'ase, Olomwaay, and Thank You.
                                 ______
                                 
    Mrs. Christensen. The Chair now recognizes Ms. Knight for 
five minutes.

 STATEMENT OF LYNN KNIGHT, PRESIDENT, HOTEL ASSOCIATION OF THE 
                    NORTHERN MARIANA ISLANDS

    Ms. Knight. Thank you. Madam Chair and distinguished 
members of this Committee, on behalf of the Hotel Association 
of the Northern Mariana Islands, thank you for the opportunity 
to discuss the impact of massive changes to our economy as 
contemplated in the H.R. 3079.
    The CNMI is in a depression that has been largely caused by 
outside forces. Respectfully, we don't need this legislation to 
fix our problems. We need a helping hand. Once a raging 
success, our tourism industry today is challenged to recover 
significant losses. This requires a stable, supportive business 
climate, not the recipe for the perfect storm. This legislation 
would force the exit and replacement of a large and necessary 
segment of our workforce. It would limit tourist access at a 
time when we most need to diversify and bring commerce into our 
islands. It would increase the already high cost of doing 
business while offering no mitigating incentives to ensure the 
survival of our private sector. Why would anyone want to do 
this to our community? Our tourist industry began in the late 
'80s, fueled by Japanese and Korean money. Simultaneously, we 
built a garment industry, selling designer clothes to American 
consumers. We were fortunate to have two legs to stand on. 
Businesses in the early '90s boomed and we became one of the 
most self-sufficient areas under the U.S. flag, but not with 
American investment. This was done with help from our Asian 
investors and neighbors. At that time there was little presence 
of Federal officials, no one to interpret where local and 
Federal laws intersected. Yes, during those growing pains, some 
mistakes were made, but we worked very hard on self-
improvement. Today, both our major industries are in double-
digit declines. The competition, the instability of our air 
service, rising costs of fuel, utilities, shipping, food, and 
labor are all taking their toll. This is the problem.
    Today, we have over 4,000 operating hotel rooms and more 
than 200 in moth balls. Average hotel occupancy is only half of 
our rooms. Sadly, on Rota, there is now a ghost town, as hotel 
occupancies run from 0 to 10 percent. The island's one resort 
hotel struggles to subsidize essential inter-island air 
service. On Tinian, a lone hotel holds up the entire island 
economy with tourist charter flights from China.
    With local control over immigration, we have the 
flexibility to issue visas at our own pace to tourists, 
students, and investors from Asia. Earlier this year, we even 
welcomed direct flights from Russia, only seven hours away, and 
that's closer than it is to fly to Hawaii. Now, if we follow 
under U.S. immigration, then Russian tourists must fly all the 
way across their country to the U.S. Embassy in Moscow. We'll 
lose our Russian market overnight.
    Being where we are geographically, it not only makes sense 
for us to develop Russian but also Chinese tourism. Even states 
like Hawaii want this. Capitalizing on our approved destination 
status, we enjoy nonstop flights from Guangzhou, Shanghai, and 
Beijing. What an incredible opportunity. We've grown our China 
market with the visitor entry permit designed to control and 
pre-qualify visitors. Local businesses actually assume total 
responsibility for each tourist's return. We're taking such 
precautions because we must diversify.
    Now, let me talk for a minute about our workforce. Our 
Hotel Human Resources Managers are better equipped than ever 
before to recruit and mentor fellow citizens, and they're doing 
so. But the islands lack tourism education to motivate 
potential employees. There is also little interest in service 
positions that make up the majority of jobs, and that's the sad 
fact. Also, our local workforce is shrinking, mostly because 
people are leaving to where they can afford the cost of power.
    We believe the local government is better able to help us 
deal with these unique challenges. The CNMI has developed a 
labor system to sustain our needs and with little help and 
encouragement from the Federal Government. We've seen the U.S. 
spend billions in aid to foreign countries and foreign wars. 
Many more billions will be spent in Guam. But for CNMI, asking 
for assistance on critical issues is often like competing for 
scraps from the table.
    Madam Chair, we're grateful that your Committee has 
recognized the need for representation in the Congress, but we 
need more help than this. If you'd like us to be like the 
mainland, please help us reduce our cost of doing business and 
rebuild the engines needed to fuel our economy and employ more 
people.
    The U.S. Military built millions of infrastructure that 
have accelerated the economy of Guam, while each year our 
hotels must invest millions in the basics, making power and 
water. We've had only one military ship visit this year. We 
have unused land held by the military in Tinian. We have a 
half-built American Memorial Park occupying prime tourist space 
in Garapan. Why not fast-track these developments for the 
betterment of our economy, for tourists and locals alike.
    Please help us to stabilize shipping and reduce the cost of 
aviation fuel. Please help us with regional issues like 
developing tourism and education for our citizens. Outside this 
building, people want jobs and a better quality of life, but 
this won't come in an unstable business environment. In the 
worst of our economic crisis, this very debate and the early 
promises made by American officials who have been here, are 
hurting the morale of our employees, causing division in our 
community, and destroying investor confidence.
    Our industry opposes this legislation because we, the Hotel 
Association, know that this will create certain havoc on our 
industry and on the business community. Careful study of the 
economy is critically important. Without a study and a plan for 
economic recovery, we are planning to fail. And I submit to you 
that passing the bill like this is like shooting without taking 
aim. Thank you very much.
    Mrs. Christensen. Thank you.
    [The prepared statement of Ms. Knight follows:]

                Statement of Lynn A. Knight, President, 
           Hotel Association of the Northern Mariana Islands

    Dear Chairwoman Christensen and Honorable Subcommittee Members:
    The Hotel Association of the Northern Mariana Islands (HANMI) 
offers this testimony for your consideration regarding H.R. 3079. 
Commencing in 1992 with our testimony before the House Subcommittee on 
Insular Affairs, and continuing thereafter through numerous hearings, 
including September 1999 when we appeared before this committee, HANMI 
has detailed our position in favor of retaining local control over 
immigration and our foreign work force.
    As a remote group of islands, we need continued flexibility and 
local knowledge in planning for our economic future. Unlike the U.S. 
mainland, the island economy of the Commonwealth of the Northern 
Mariana Islands is experiencing unprecedented decline due to external 
forces that are largely beyond our control.
    Today, our tourism industry--once a raging success story--is 
challenged not only to recover losses of the past decade, but also to 
become perhaps the sole major industry of the future. Full recovery 
requires a stable and supportive business climate. Quite to the 
contrary, we believe that H.R. 3079 would cause hardship to our 
community by:
      Forcing the exit and replacement of a large and necessary 
segment of our workforce
      Limiting access to our tourists at a time when we most 
need to diversify and bring commerce into our islands
      Increasing the costs of doing business, while offering no 
mitigating incentives to ensure our private sector can survive
    Why do we feel so strongly about this? This legislation was crafted 
based on outdated information rather than our current economic 
conditions. Further study of the prospective impact on our current 
economic state is vital to avoid aggravating our already fragile 
economy. Without sufficient study and a plan, there is little chance of 
an economic recovery in the near future. Put simply: failing to plan 
means planning to fail.
    We cannot help but compare this scenario to what is happening in 
nearby Guam. The federal government desires to increase its military 
base, which will greatly affect the economy and future of Guam. Before 
any moves are made, the federal government is undertaking a detailed 
and lengthy environmental study to assess the impact of a military 
build up. This thorough study is being done precisely so that a proper 
plan can be put in place to minimize and mitigate any negative impacts 
on the community and prepare for proper transitions.
    Ironically, just while Guam is undergoing studies, it would seem 
that there is little such care given to our smaller islands. We are 
about to experience a ``Perfect Storm'' with existing economic 
challenges compounded by the massive changes that are proposed in this 
bill--yet Congress is not taking the time to properly study the 
effects. There is something gravely wrong with this scenario.
    We acknowledge that the bill may be well intentioned to increase 
security of our borders and bring the CNMI into the protection of the 
U.S. system. We do share the concern of the U.S. regarding the need to 
protect our country from terrorism.
    We also acknowledge that the CNMI needs help. There are numerous 
problems in our economy that are beyond our control due to external 
factors. It may be time for a greater presence and financial assistance 
by the federal government. But without a well-conceived plan, we are 
taking a great risk that more businesses may fail.
    Under this bill, an immigration and labor system completely new to 
our islands would be administered by five Presidential cabinet members 
and their agencies headquartered nearly half a world away. These 
agencies have never had a significant presence in the Northern 
Marianas. Therefore it is difficult to imagine that they would have 
sufficient understanding and flexibility to meet the unique needs of 
our community.
    We urge members of U.S. Congress to conduct a census and surveys of 
our business community and our people. We must study the effects of 
this bill before passing a law that would damage our economy. It is 
only through study that certain inevitable impacts can be truly 
understood.
    If a proper study were conducted, you would see that we do not have 
enough local residents to provide all of the specialized skills and 
language capabilities necessary to operate existing businesses without 
foreign labor. It therefore makes no sense to pass an overly rigid bill 
that would call for the complete phase out of our foreign work force, 
even after 10 years, without the flexibility to reassess future needs.
    The Northern Marianas have always been challenged to be self-
sustaining with a small, indigenous population. This situation has not 
changed and in fact, may have gotten worse. With rapidly rising costs 
of living, including utility costs, fuel costs, and basic food costs, 
many of our best and brightest citizens are leaving. This exodus of 
qualified local workers places an even greater strain on the scarcity 
of the pool of local employees. It is current challenges like these 
that must be considered in the needed study that should shape a more 
responsible bill. Even with the inevitable down-sizing of our 
government, our citizen population is still too small to run essential 
government services across three islands and still have enough people 
to provide an adequate work force for our private sector.
    Of equal importance to our future is the recognition that we must 
diversify our tourist markets. As small islands near the heart of Asia, 
we have unique opportunities to diversify. This diversification would 
not appear to be permissible under the current bureaucracy and 
restrictions of U.S. Immigration procedures.
Challenges Facing our Tourism Industry
    Approximately 21 years ago, the economic growth of the Northern 
Mariana Islands was one of the highest of any American state or 
possession. Resorts and smaller hotels were built in the late 1980's 
and early 90's, and visitor arrivals brought prosperity to the islands. 
The Northern Marianas welcomed 728,621 tourists at its peak in 1997. 
These visitors were almost exclusively from Japan and Korea. Last year 
in FY 2006, our tourism industry struggled with just 443,812 visitors. 
This year due to further losses in air capacity from Japan, we are 
expected to drop to less than 400,000 visitors.
    Because we were so dependent upon Japanese tourists and investment, 
quite naturally the early golden days ended with the bursting of the 
Japanese ``bubble'' economy in the mid-1990's. The Asian economic 
crisis in both Japan and Korea followed, and a series of other natural 
and manmade calamities also took their toll.
    When Japan's and Korea's economies declined, hotel owners who were 
saddled with debt began to sell their properties. From approximately 
2002 to the present, many hotels changed hands. The turnovers in the 
CNMI's hotel industry were not unique, but were repeated in Guam and 
Hawaii. Like the Marianas, Hawaii's original resorts were heavily owned 
by the Japanese, and like our islands, Hawaii's tourism industry 
deteriorated prior to the entry of new investors.
    Hotel buyouts in Hawaii took place from the late nineties up to 
2002, just a few years before Japanese hotels in Guam and the CNMI also 
began selling. Hawaii today is enjoying a boom in tourism due to 
massive turnover at over $5 Billion in hotel sales, renovations, and a 
destination enhancement program by the government. The transformation 
in Hawaii has happened at a faster pace than the Marianas, due to the 
islands' proximity to the U.S. mainland and the influx of American and 
Canadian tourists and investors. The Northern Mariana Islands, by 
contrast, see few American tourists except inter-island travelers from 
Guam and an occasional military ship's visit.
    In the Northern Marianas, the only other major industry--garment 
manufacturing--has declined by nearly 60% over the past two years. With 
the increase in the minimum wage that was passed by U.S. Congress 
earlier this year, many expect we will completely lose the industry in 
2008. When this happens, the full weight of generating the islands' 
revenues will fall on tourism.
    The sudden pullout of Japan Airlines in 2005 has been one of the 
most difficult challenges our industry has ever had to overcome. In the 
same year, we also lost Continental Airlines service from Hong Kong and 
Taiwan.
    Northwest Airlines picked up some of the routes from Japan, but 
this did not completely make up the gap in lost air seats. Since that 
time, Northwest's service has seen ever-changing schedules, and now the 
downsizing of their planes to more fuel efficient models. While this 
may help to eventually stabilize their service, unfortunately it has 
cost the CNMI dearly in terms of visitor numbers.
    In September, we will lose a further 130 seats per day as Northwest 
changes its plane. We fully expect a major tourist decline to last at 
least until late December, when the airline will start a new flight 
from Osaka. Many hotels and tourism operators are bracing for perhaps 
the worst period in our industry's history.
    The air service crisis has led tourism officials to join together 
to learn much more about the business of the airlines. An international 
air service consultant was hired by the CNMI government, and after 
frank and open discussions with existing carriers and dozens of other 
airlines operating in the Asian-Pacific region, we learned that we are 
a ``low yield'' destination that is also suffering because of small 
economies of scale, intense competition for air slots out of Narita 
airport in Japan, and high costs of aviation fuel. Absent a government 
subsidy of essential air service, our entire economy is now at the 
mercy of our air carriers.
About the Hotel Industry of the CNMI
    HANMI members are all located on Saipan and represent 3,018 of the 
3,394 total hotel rooms that are open for business on Saipan. Some 100 
rooms are currently ``moth-balled'' due to a lack of business, while 
182 more rooms have recently been converted to apartments. The island 
of Tinian has 452 hotel rooms, of which 42 are closed. Rota has 250 
rooms, with 60 closed at this time.
    Hotel occupancy in the past three months has averaged only 52%. For 
reference, the average break even point for most hotels is estimated to 
be in the 70% range. In 2007, average hotel room rates for HANMI 
members hovered at $90, following more than $60 M in renovations and 
improvements that have been made in recent years on Saipan alone. For 
comparison purposes, Guam's average room rate is near $110, while 
Hawaii surpassed the $160 mark. (Please see Appendix I for HANMI 
Average Rates and Occupancies from 1992 to 2006.)
    Tinian's tourism industry has survived thus far due to privately 
chartered flights from China, which provide the majority of visitors to 
the island's one resort hotel and several locally-owned small hotels. 
Tinian received 64,083 tourists in 2006. Without Chinese tourists, the 
island's economy would likely collapse.
    Our smallest inhabited island of Rota has been the hardest hit by 
the loss of air service, resulting in hotel occupancies from a 
frightening zero to 10% on any given day. Sadly, the island's major 
village now resembles a ghost town.
    The Northern Marianas compete directly with Asian tropical 
destinations including the Philippines, Thailand, Malaysia, Maldives, 
Palau, and Bali, Indonesia, where the cost of labor is low and service 
standards are high. Our islands also compete with Guam and Hawaii, 
which are hubs of air service and shipping for the region. Both Guam 
and Hawaii have benefited from billions of dollars of investment by the 
U.S. military. By comparison, a large portion of land on our island of 
Tinian has been held by the U.S. military for many years, but with 
absolutely no investment.
    Conditions of doing business in the Northern Mariana Islands are 
vastly different than in Guam and Hawaii, due to inadequate 
infrastructure and a much smaller population. Our hotels have had to 
invest millions of dollars in their own power and water-making systems. 
In the CNMI these investments are a necessary cost of doing business, 
requiring capital outlays that could otherwise be spent on marketing, 
business enhancements and employee development.
Employment Challenges and Concerns
    If the CNMI's immigration authority is taken away and our guest 
worker program is to be phased out, we have grave concerns about the 
hardships that could be caused by reduced access--and even a phase 
out--of our valued employees from overseas. Members of the Hotel 
Association feel it is unrealistic to expect the tourism industry to 
completely phase out foreign workers.
    In total, our hotels employed 1,959 people as of June 2007, of 
which 32% were local residents. We are hiring more local residents each 
year, but turnover must be done gradually to avoid business disruption. 
Increased employment of local residents requires training and tourism 
education we do not currently have on island. Again, it is more 
difficult to find potential local qualified resident candidates as many 
are leaving the islands for greener pastures on the U.S. mainland.
    The hotels provide a wide range of benefits and employee assistance 
programs, as well as training and development to create a sense of 
community and build morale among our multi-cultural staffs. But despite 
these efforts, we have seen that there are certain jobs for which the 
indigenous community consistently has shown little or no interest. This 
is evidenced by the high number of foreign workers in housekeeping, 
maintenance, and most food and beverage positions. These positions 
roughly equal the 60+% of the jobs held by foreign workers in our 
hotels.
    For culinary arts, no training is currently available and many of 
our chefs are recruited from Asian countries to meet the tastes of our 
hotel guests. The ability to recruit highly skilled chefs from foreign 
countries is seen as one of our few competitive advantages.
    The CNMI's resort hotels have recently invested in the development 
of luxury spas. However, indigenous residents will generally not apply 
for jobs as spa therapists due to a general shyness in serving guests. 
Therefore, most of the personnel working in luxury spas today are 
recruited from Bali, Thailand and the Philippines.
    Despite our challenges, we are proud of the progress that our 
industry has made in hiring local residents. Successful career paths 
have been established and proven in the ever-increasing number of local 
residents that have joined hotel management teams. Currently all of the 
resort hotels have local citizens in human resources management. With 
networks in the community, these professionals are better equipped 
today than ever to hire and mentor other residents.
    HANMI members have a good record of treatment of both foreign and 
local employees. In the mid-1990's, our association initiated an inter-
hotel committee for human resources of the hotel industry to regularly 
join together to share ideas and training. The expansion of this 
committee 10 years ago resulted in the founding of the CNMI chapter of 
the U.S. national organization, the Society for Human Resources 
Management (SHRM).
    To help ensure we provide safe work places, in 2005 HANMI members 
entered into a voluntary partnership agreement with the U.S. Department 
of Labor's OSHA Division out of Region IX, San Francisco. This program 
provides for voluntary inspections, annual conferences and joint 
cooperation in ensuring safe and healthy working conditions.
    An ongoing challenge is the fact that our islands simply do not 
have any specialized education necessary to grow local employment in 
tourism. As one example, although the Korean market is the second 
largest tourism market for the CNMI today, there are no Korean language 
classes available.
    Without the flexibility to retain a certain number of our employees 
from overseas, this industry will not survive. We will clearly not be 
able to provide the service level that our guests expect. If we lose 
our competitiveness as a tourist destination, eventually more 
businesses will close and even some of the best and brightest local 
workers will lose their jobs.
    Further, the CNMI has come a long way in addressing the labor 
concerns that have plagued the image of the islands in the national 
media. Our CNMI Department of Labor has taken great strides in 
substantively tackling reports of labor complaints by the non-resident 
workforce. While there is always room for improvement, our current 
conditions are far safer than the sinister images that have been 
sensationalized in the media.
Specific Labor Concerns of H.R. 3079
    Section 6(e)(2) of the bill would authorize foreign workers already 
lawfully present in the CNMI to continue to remain only up to two years 
after the transition program's effective date. This will negatively 
impact our hotels as there is yet no regulation in place to for renewal 
of employment authorizations to remain in the CNMI once that period 
expires. Without any regulations yet established, there is no way to 
determine how stringent or costly this would be for our tourism 
industry to retain such workers thereafter.
    Transitional Workers. Sec. 103(d) provides for the entry of aliens 
into the CNMI as nonimmigrant workers. However, such entry shall be 
determined at the sole discretion of the Secretary of Homeland 
Security, which would be charged with establishing, administering, and 
enforcing a system for allocating and determining the number, terms, 
and conditions of permits to be issued to prospective employers. 
Moreover, this system would provide for a reduction in allocation of 
permits to zero by December 31, 2017. As discussed above, we do not 
believe that our industry could ever completely phase out its foreign 
work force.
    Subsection (5)(A) would authorize foreign workers to transfer 
between employers without advance permission of the employee's current 
or prior employer. This provisions appears contrary to H.R. 3079's 
intent to assist that employers could secure needed workers if 
employers could not expect to retain the workers they hired in the 
first place.
    The members of HANMI must also voice our opposition to the bill's 
plan to convert the status of long-term foreign workers who have 
remained continuously in the Commonwealth for more than five years to 
immigrant status. This has regrettably become a highly emotional issue 
in the islands, one that has created significant morale problems in our 
workforce today. This is also one of the provisions in the bill that 
has the greatest potential to cause the uncertainty and expense for our 
businesses. It is a proposal that should not be carried through without 
thorough study.
    We believe that the outcome of the proposed changes of immigration 
status for foreign workers would be that many would choose to leave the 
Commonwealth to find higher paying jobs in Guam and the U.S. mainland. 
This would cause a major disruption in our industry as we would have no 
means to immediately replace large numbers of people, especially with 
our dwindling available local workforce.
    For foreign workers who would not qualify for a change in status, 
the bill and its transition period leaves many questions about rising 
costs. In our weakened economic state, most businesses could not afford 
the legal expenses, fees and lengthy approval process under the U.S. 
system of work visas. Once again, these issues should be discussed in 
detail and an economic study completed before Congress votes on this 
bill.
The Need for Diversification of our Tourist Markets
    A critical reason why HANMI supports continued local control over 
immigration is the need for flexibility to diversify our tourist 
markets. It is recognized that Japan and Korea will always be major 
source markets for our islands, but we must keep the doors open for 
other nationalities in order to lessen our dependence on any one 
market. We share great concern about change to our immigration system 
because the U.S. does not currently recognize countries we have 
invested in for a decade, namely China and Russia.
    Diversification will protect our island economy from an unhealthy 
dependence upon only one or two markets--or one or two air carriers 
that could make or break us at any given time. Islands in the Caribbean 
are fortunate to be able to attract tourists from the U.S. mainland and 
Europe; Southeast Asian destinations can rely on Europe and many other 
Asian countries, while the Northern Marianas is investing and tapping 
into a number of Asian countries within a short flying distance.
    Even before the loss of JAL, tourism industry stakeholders 
identified the need to invest in the most promising new markets in our 
region. Diversification is critically important in light of the 
vulnerability of island economies such as ours.
    While the bill states that it will consider special CNMI-only 
tourist visas, we have many questions about how this would be 
implemented. There is great uncertainty over the potential costs, lead 
time and approvals involved with dealing with U.S. embassies overseas. 
We question whether such a program could be anywhere near as efficient 
and as the program we now have in place under the care of the local 
government.
Our Russian Tourism Market
    Since 1998, Russian tourists have become a lucrative market for the 
islands, as these guests stay for long periods of time. The Japanese 
and Korean markets stay for only 3 nights, while it is not uncommon for 
wealthy Russian tourists traveling with their children to stay for up 
to 3 weeks. These visitors come to our islands to avoid bitterly cold 
weather in Russia and to enjoy a taste of American life on the closest 
tropical island to their country. Many of these guests travel on 
business class fares via connecting flights from Korea and Japan, which 
helps our air carriers.
    Russian families spend a great deal on dining, patronizing all 
resort hotel services including kids' clubs and spas. They spread money 
throughout our economy when they buy retail goods, and enjoy a wide 
variety of the optional tours available in the islands.
    Marketing efforts to Russian tourists have largely been developed 
through the initiative and investment of Saipan's resort hotels. Today 
many of our resorts have invested in marketing to and serving the 
Russian market.
    In the year 2006, there were just over 1,500 Russian tourists who 
came to the Northern Marianas, resulting in estimated sales of 31,500 
room nights. In this year, we hope to attract 3,000.
    The shortest travel time from Russia is only 7 hours or roughly 
less time than it takes to travel from the CNMI to Hawaii. This makes 
our islands a viable destination for Russian tourists. If we convert to 
a U.S. immigration system and Russian tourists are required to fly for 
many hours to the U.S. Embassy in Moscow to apply for a visa to the 
CNMI, we would likely lose all of our Russian tourists overnight.
China Tourism Market
    Another bright spot on the horizon for the recovery of the CNMI's 
tourism industry is the China market. We believe that retaining the 
CNMI's privilege of local control of immigration and our Approved 
Destination Status with China, which is an essential element to growing 
this new market.
    As recently stated by the general manager of a resort hotel on 
Saipan, ``Being where we are geographically, we cannot survive without 
a China strategy. It is a different world. In the future, we have to 
find a way to open these markets.'' For the CNMI, it only makes sense 
for our local tourist industry to have a China strategy to capitalize 
on the rapid economic growth of this nearby country, which is only a 4 
to five hour non-stop flight away.
    Since 2002 when a hotel on Tinian first took the initiative to 
charter flights from Guangzhou, the Northern Marianas have grown this 
market slowly and carefully with a selective visitor entry permit (VEP) 
designed to control numbers, qualify visitors, and guarantee their exit 
prior to allowing entry into the islands.
    In December 2004, following several years of effort, former 
Governor Juan Babauta signed an agreement with Chinese officials in 
Beijing to grant the CNMI Approved Destination Status. ADS allows the 
CNMI to legally promote itself as a recognized tourist destination in 
China, an honor we share with more than 100 other countries. More than 
half of the world--including Australia, Europe and many other Western 
countries--currently have this coveted status.
    China has already surpassed the number of outbound tourists from 
Japan and is now the largest tourist market in the world, with more 
than 36 Million people traveling overseas in 2006. As a result, there 
is probably no major tourist destination in the world today that does 
not have a China marketing plan. The Northern Marianas have a major 
advantage in attracting this market due to our close proximity, direct 
non-stop flight service and locally controlled visa.
    Guam officials have visited China numerous times, in the hopes of 
welcoming tourists. As early as 2003, Hawaii conducted a comprehensive 
study of the China market and its potential for the state. Hawaii has 
since set up an office in China and has been marketing heavily in 
preparation for a ``green light'' for Chinese tourists to visit. San 
Francisco and Nevada have also set up offices in China. In 2005, 
California Governor Arnold Schwarzenegger led his first trade mission 
to China, while the states of Florida and Texas were the first U.S. 
destinations to exhibit at Beijing's International Travel and Tourism 
Market in 2006. The state of Georgia also sent tourism officials to 
China in the year 2005, in anticipation of opening tourism and trade 
offices.
    Just like other tourists, Chinese families come to the CNMI to 
enjoy the beautiful clean environment, golf, marine sports and other 
optional tours. While the Chinese may be second to Japanese travelers 
in terms of the total amount they spend on trips, they have begun to 
out-rank the Japanese in how much they spend on shopping.
    Over the years to date, the CNMI has welcomed more than 334,000 
Chinese tourists to Tinian and Saipan, bringing millions of dollars 
into our economy. In FY 2006, the arrival figures grew modestly to 
38,385.
    The CNMI eventually targets to build arrivals from China to 150,000 
tourists per year according to the Marianas Visitors Authority (revised 
target announced in June 2007). The CNMI currently benefits from six 
direct, non-stop chartered flights from Shanghai, Guangzhou and 
Beijing. It is our hope that we can continue this growth through a 
gradual build up of flights from the most modern and affluent cities in 
China.
    To summarize, the Northern Mariana Islands today are in a pivotal 
moment in our economic history. We have never been more economically 
challenged. We believe that for U.S. Congress to force rapid change 
without sufficient local input and a sound plan would cause havoc and 
almost certain collapse of many local companies.
    We would like to state for the record that our position is not 
solely based on economics, but also a genuine concern for our 
community. We are in unprecedented territory in our history and 
recognize that tourism may be the only major provider for our islands 
in the near future. As industry leaders, we feel a great sense of 
responsibility to provide for our people. At the same time, continued 
investments in our businesses can only be made within a stable and 
supportive business climate.
    If the federal government would like to help us transition to an 
economy patterned after the U.S. mainland, we would welcome help. But 
we must humbly ask that U.S. Congress and federal agencies first work 
in partnership with our community and local government to create a 
realistic WORKING PLAN for business incentives, mitigation and economic 
recovery.
    In other words, if the U.S. would like the CNMI to be like Guam or 
Hawaii, help us to become like these more advanced economies. Invest 
with us in our infrastructure and help the local government to reduce 
the high costs of doing business. Help us to stabilize and provide 
essential air service. Help us to reduce our rising costs of shipping 
resulting from higher fuel costs, our isolated location, and the rapid 
loss of our garment industry.
    Finally, please help us to develop a tourism education program so 
we can prepare more local people for jobs, while allowing us to retain 
the level of foreign workforce we need to serve our customers and 
compete against other tourism destinations.
    The members of the Hotel Association thank you for your kind 
consideration of our views.
APPENDIX
    1.  Hotel room Occupancy and Rate Statistics, as prepared by the 
Hotel Association of the Northern Mariana Islands for Saipan's hotels, 
1992 to 2007.
ADDITIONAL REFERENCES
    ``Strategic Initiatives for 2006-2010,'' a strategic plan for 
tourism, prepared for the Office of CNMI Governor by the Ad Hoc Tourism 
committee, Strategic Economic Development Council, May 2006.
[GRAPHIC] [TIFF OMITTED] 37528.001

                                 .eps__
                                 
    Mrs. Christensen. The Chair now recognizes Mr. Borja for 
five minutes.

       STATEMENT OF JESUS C. BORJA, THE ENTERPRISE GROUP

    Mr. Borja. Thank you. Good afternoon. The CNMI Enterprise 
group thanks Representative Christensen and the members of the 
House Subcommittee on Insular Affairs for extending an 
invitation to it to testify before the Subcommittee. We welcome 
you to our great Commonwealth and to Saipan in particular. Mr. 
Jose S. Dela Cruz regrets that he could not appear before you 
due to a previous commitment that he could not get out of.
    The Enterprise Group is completely in support of the 
primary intent of the bill, to protect the national and 
homeland security of the United States. The members are also in 
complete support of Section 201, permitting a resident of our 
Commonwealth to sit as a Delegate to the House of 
Representatives of the U.S. Congress. Although a nonvoting 
delegate at least it is putting us on a par with the other 
insular areas. Hopefully, all insular areas in Washington, 
D.C., will eventually have a seat equal to all the states from 
this great country of ours. We also support Section 103, 
dealing with asylum.
    While we do support the provisions I just mentioned, we do 
have serious concerns that we wish to share with your 
Subcommittee. Our concerns have been stated in writing and 
submitted to you. I would like to emphasize a few of those 
concerns.
    Section 701 of our Covenant is the source of the language 
used in the bill that the United States will assist the 
Commonwealth ``to achieve a progressively higher standard of 
living for its people as part of the American economic 
community and to develop economic resources needed to meet the 
financial responsibilities of local self-government.'' This 
provision became effective on January 9, 1978, when our 
Constitution went into full force and effect, and our 
Constitutional Government was established. From 1978 to 2007, 
29 years, the promise made by the United States in Section 701 
of our Covenant has still not been accomplished. This is 
evident with the use of the same language in the bill.
    If after 29 years, the United States has still not met its 
goal of a standard of living for our people equal to the 
American economic community and the development of the economic 
resources needed to meet the financial responsibilities of 
local self government, how is it that the bill concludes that 
such will be accomplished in ten years? The transition period 
should be made flexible so that it may be extended if 
warranted. A possible amendment would be to include a provision 
that the transition may be extended if a panel consisting of 
CNMI and Federal officials agree that it should be extended.
    The Enterprise Group knows that what is stated in Section 
102(a)(2) regarding the intentions of the bill will not be 
accomplished with the plan that is contained in the bill. The 
Enterprise Group surely believes that the bill is in 
retaliation for abuses that our Commonwealth has committed. If 
this is really the case, is it fair that the majority of the 
people of our Commonwealth, good and decent people, be 
penalized for the sins of the few? The Enterprise Group does 
not condone the abuses that have occurred, but the Enterprise 
Group does not believe it fair that the United States enact a 
law that punishes even good people and derogates from its 
promise to assist us achieve a standard of living comparable to 
the standard of living of the American economic community and 
from developing our resources so that we can meet the financial 
responsibilities of local self government.
    We firmly and sincerely believe that the bill can be 
drafted so that the United States will actually continue to 
live up to its promise under Section 701 of our Covenant. In 
particular, the Enterprise Group sincerely believes that the 
bill can be crafted so that the much needed tourist and foreign 
investors can continue to arrive into our Commonwealth without 
endangering our national and homeland security.
    We do not believe that having a provision saying that after 
ten years employers can only have non-resident employees, if 
the employees become immigrants of the United States, is in the 
best interest of the Commonwealth. Neither do we believe that 
stopping all foreign investors is in the best interest of the 
CNMI. These specific provisions sound and smell of 
vindictiveness and retaliation.
    Our economy is very fragile and is affected by events 
occurring outside the CNMI without much control by us. Our only 
industry now is the tourist industry, and it not only is not 
improving, it is going down. Our human resources are very 
limited and we doubt very much that it would be sufficient both 
in terms of numbers and in terms of types of skills in ten 
years to meet the demands of our economy.
    We hope and pray that your Subcommittee will review the 
bill and do the necessary amendments so that the bill is really 
for the good of the people of the Commonwealth of the Northern 
Mariana Islands. Thank you.
    Mrs. Christensen. Thank you, Mr. Borja.
    [The prepared statement of Mr. Borja follows:]

             Statement of Jesus C. Borja on behalf of The 
                         CNMI Enterprise Group

    On behalf of the CNMI Enterprise Group, I would like to thank the 
Chairwoman of the House Subcommittee on Insular Affairs, Representative 
Donna Christensen of the Virgin Islands, for inviting our Group to 
testify at the hearing to be held on August 15, 2007, with respect to 
H.R. 3079. It is a privilege and an honor to testify before the U.S. 
Subcommittee on Insular Affairs, which has oversight jurisdiction over 
the territories and commonwealths of the United States.
    It is indeed rare for a Subcommittee of the United States Congress 
to conduct its hearing in one of the territories or commonwealth. It is 
to the Subcommittee's credit that it is conducting this particular 
hearing in the Northern Mariana Islands. The legislation under 
consideration, which proposes the inclusion of the Northern Mariana 
Islands within the overall scope and jurisdiction of the U.S. 
Immigration and Nationality Act, is of great importance to the 
Commonwealth of the Northern Mariana Islands and its people.
General Overview of H.R. 3079
    If the proposed federal immigration legislation is enacted into 
law, the CNMI immigration regime that the Commonwealth of the Northern 
Islands has practiced for almost thirty (30) years will cease within 
one-year of enactment of the federal legislation. The measure is, 
therefore, of great significance to the Commonwealth of the Northern 
Mariana Islands and its people because of its potential effect on the 
economy of the Northern Mariana Islands and its potential impact on the 
social fabric, political make-up and cultural dynamics of its people. 
The legislation would, we believe, affect adversely the economic well-
being of the Northern Mariana Islands, particularly at a time when the 
local economy is extremely depressed and is not moving. The legislation 
would change in a very fundamental way the social demographics of the 
local population. And it would make sweeping changes to the social 
fabric and local dynamics of the fairly small population of the 
Northern Mariana Islands. Finally, this federal legislation would bring 
major social and political changes to the CNMI that we believe would 
adversely affect the Commonwealth's welfare and well-being, because of 
the timing and the manner in which the legislation is being 
implemented--abruptly and without much consideration as to its 
potential consequences on the local economy. We believe that the 
effects of this legislation on the people of the CNMI should be the 
second paramount objective of this legislation. The first of course is 
our national security objectives.
About the CNMI Enterprise Group
    As the Subcommittee may be aware, the CNMI Enterprise Group is a 
voluntary association of concerned citizens of the Northern Mariana 
Islands that meets every now and then to discuss some of the major 
issues affecting the Northern Mariana Islands and its people. Whenever 
the Group feels it appropriate or necessary to do so, we make formal 
recommendations either to the local government or to business and civic 
leaders to enact legislation, promulgate regulation, or adopt 
appropriate public policy or directive that would address an issue 
affecting the CNMI and its people. Major issues affecting the CNMI 
which our Group has reviewed and considered in the past has run the 
gamut from the problems affecting the CNMI visitor industry (in view of 
its demise in recent years), to our recommendation to the CNMI 
government early last year strongly urging an increase in the local 
minimum wage, but on an incremental basis and based on the living 
standard here in the CNMI, not on the comparatively high living 
standards of the U.S. mainland.
    Our Group has also reviewed the emotional and very divisive issue 
pertaining to the CNMI land alienation restriction. We have addressed 
the fundamental need for CNMI residents to be trained and to acquire 
the skills needed to be gainfully employed by the private sector; as 
well as the corresponding need for the CNMI government to begin weaning 
itself out of its long-time role as the biggest employer in the CNMI. 
We are, in a sense, a public interest group. So our testimony before 
the Subcommittee is as a CNMI public interest group, whose primary 
concern is the welfare and well-being of the people of the CNMI, now 
and in the future.
Statement of General Concerns Regarding the Impact of H.R. 3079 on the 
        CNMI Economy
    While the Group understands and appreciates the basic intent of the 
proposed legislation, namely, to implement the U.S. Immigration and 
Nationality Act in the Commonwealth of the Northern Mariana Islands, so 
that every jurisdiction under the U.S. flag follows the same uniform 
rules of immigration, we are very concerned about the legislation's 
potential impact on the fragile economy of the CNMI. We understand and 
appreciate the underlying reasons for doing so: namely, to ensure that 
the national security interests and the homeland security interest of 
the United States are promoted, and so that effective border control 
procedures could be implemented and carried out.
    Our Group wholeheartedly agrees with these national security 
objectives and concerns. Indeed, in this day and age when the overall 
security interest of the United States is being actively threatened, it 
is not only necessary but mandatory as well for every member of the 
American political family to participate in and help implement such 
overriding national security objectives. Every resident of the Northern 
Mariana Islands, we believe, understands this and each resident gladly 
agrees to do his/her share to help ensure that our national security 
interests are preserved and protected. The best example of our 
commitment is the participation of our young people in the Iraq and 
Afghanistan conflicts.
    The issue that our Group has with the proposed legislation relates 
to the second part of the legislative intent:
    (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...
    Section 102 (a) (2). Our Group has great difficulty agreeing with 
this part of the legislative intent because we believe that such 
statement is only paying lip-service to the intent (a) to as much as 
possible not disrupt the economy of the Northern Mariana Islands; and 
(b) to encourage the development and growth of a diverse economy for 
the Northern Mariana Islands. Our Group feels very strongly that the 
proposed legislation, as now drafted (with the many exceptions being 
carved out from the uniform immigration laws of the United States), 
would instead when implemented adversely affect the economic well-being 
of the Northern Mariana Islands and its people. Why is the proposed 
legislation carving out so many exceptions from the uniform immigration 
laws of the United States? Many of the provisions of the proposed 
legislation depart quite radically from the uniform immigration laws of 
the United States. Many of them do not make any sense both from a 
national perspective and from a CNMI economic perspective.
    Put differently, how could an insular economy, like the fragile 
economy of the Northern Mariana Islands, ``develop, diversify and 
grow'' when limitations are being imposed under the proposed federal 
legislation which would, among other things, prohibit new foreign 
investors from coming in and investing in the CNMI? How could a 
fragile, insular economy grow and develop when the proposed federal 
legislation would prohibit the future hiring of guest workers that 
local businesses would need, because there are not enough trained or 
skilled workers locally to supplement the labor needs of local 
businesses and the visitor industry? Why can't the application of the 
Immigration and Nationality Act in the CNMI be drafted in a manner that 
would truly help to ``develop, diversify and grow'' the economy of the 
CNMI? After all, the Federal Government, and not the CNMI Government, 
will be enforcing the federal immigration law regime. Any fear of the 
CNMI government ``fumbling'' its responsibility on immigration and 
labor matters, as some have stated in the past, should no longer be the 
case. It will be the Secretary of Homeland Security that would make the 
call, not the CNMI government.
The Fragile, Insular Economy of the CNMI
    The Group urges the Subcommittee to please seriously consider the 
fact that the CNMI has a very fragile, insular economy, which is 
completely different from the developed economy of the United States 
mainland where the standard of living is probably three to four times 
higher than here in the islands. The Group also urges the Subcommittee 
to recognize that the CNMI has almost no natural resources to 
supplement its tourist-based economy. Although we are surrounded by the 
vast Pacific, the CNMI does not have the capability or the means to 
harvest the abundant resources of the ocean so as to be able to have a 
viable fishing industry. Indeed, when we began local self-government 
thirty (30) years ago, the economy of the Northern Mariana Islands was 
essentially a subsistence economy. In other words, the people of the 
Northern Mariana Islands used to live by fishing and farming for their 
livelihood; and a good number of our people still fish and farm to 
supplement their meager salary.
    It is, therefore, imperative on the part of the U.S. Congress, 
whenever it enacts legislation affecting the Northern Mariana Islands 
and the other insular territories, that it takes a more sensitive 
approach to and closely scrutinize how a federal legislation that is 
being proposed would impact on our small, insular population and our 
fragile and limited resources. They have a saying here in the Northern 
Marianas that when Japan sneezes, the CNMI catches a cold. Indeed, the 
CNMI is so dependent on Japan for our local tourist industry and for 
investments in the islands that when Japan Airline stopped servicing 
the islands in October 2005, the CNMI visitor industry literally became 
paralyzed.
    Resolving the visitor industry problem has now been one of the top 
priorities of the CNMI government and business leaders, but so far no 
new air carrier has stepped in to replace Japan Airline. Indeed, this 
is one area where the Federal Government could be doing something 
concrete to help the CNMI. It could be actively participating in 
assisting the CNMI get another air carrier to come and service the 
Japan-CNMI route. This is one very practical way that the Federal 
Government could help ``develop, grow and diversify'' the economy of 
the Northern Mariana Islands, not by removing the CNMI's ability to 
hire guest workers whenever there is a need to do so.
    That is why when one reads the second part of the legislative 
intent in the proposed legislation, namely, that one of its purposes is 
to ``encourag[e] diversification and growth of the economy of the 
Commonwealth,'' the Subcommittee needs to ask itself how such intent 
could actually and successfully be carried out, if we all know now that 
the proposed legislation would most likely do just the opposite: 
namely, it would decrease the number of guest workers needed by CNMI 
businesses from what it is now, to zero by the year 2017. Such guest 
worker ``attrition formula'' is clearly unrealistic because it presumes 
that by the year 2017, there would be enough local workers to 
accommodate the needs of all employers in the CNMI.
    What would happen if that is not the case? Do we then ask the 
Congress to amend the law again? We believe that the proposed 
legislation should be drafted now in a manner that realistically 
addresses the actual guest worker needs of the CNMI as the years go by, 
rather than to allow guest workers to be employed in the CNMI for a 
period of only ten years, during which period the guest worker 
population will begin dwindling down to zero. Is the worker-attrition 
approach economically realistic? We don't think so. And we also believe 
that this Subcommittee would not think so.
    We urge the Subcommittee to seriously consider the extremely 
critical suggestion made by the CNMI Administration that the General 
Accountability Office (GAO) of the U.S. Congress should first perform a 
study on the potential impact of the proposed legislation on the 
economy of the CNMI, before the measure is acted upon by Congress. It 
is better to find out the potential consequences in advance, rather 
than find out later on that the legislation became the final blow that 
destroyed the CNMI economy. Does Congress want this to happen? The 
answer, we believe, is clearly ``No.''
The Apparent Inconsistency of Certain Provisions in Title I with the 
        Provisions of the U.S. Immigration and Nationality Act
    Under the Immigration and Nationality Act's (INA) H-2 worker visa 
program, we understand that the need of the employer to hire a guest 
worker is one of the key criteria required in order to hire a guest 
worker. But under the proposed immigration legislation for the CNMI 
alone, if the CNMI needs additional guest workers they could only be 
admitted as immigrants, i.e. as permanent residents. The irony with 
this particular requirement--that all new guest workers hereafter could 
only be admitted into the CNMI as immigrants--is that for the guest 
workers who are now and have been here in the CNMI for five years or 
more, the ``status'' that these long-time guest workers are being 
accorded under the proposed legislation is as ``non-immigrants,'' 
similar to the status accorded citizens of the Freely Associated 
States. We realize, of course, that this matter, i.e. the granting of 
``status,'' is strictly a federal prerogative, but the approach being 
taken under the proposed federal legislation appears illogical or is 
intended to simply make it extremely difficult for CNMI employers to 
hire additional guest workers in the future.
    The proposed legislation is essentially telling the CNMI: ``If you 
need more guest workers, you could only bring them in as part of the 
permanent population of the CNMI.'' The additional irony with this 
particular requirement is that under the existing Immigration and 
Nationally Act, H-2 workers who are admitted to work in New York, 
California, Idaho or Kansas (or anywhere in the United States), are not 
admitted as immigrants, but as non-immigrant H-2 workers, who must 
leave the United States when their term of employment ends. So why is 
this very strange twist on the uniform federal immigration law being 
made for the CNMI alone? It simply doesn't make sense. It makes you 
wonder whether this provision is somehow a form of retribution against 
the CNMI for its alleged past labor abuse and misdeeds, by those who 
drafted the language of this legislation.
    We urge the Subcommittee to look very closely at this provision; 
and we also urge the Subcommittee to seriously reconsider the ``ten-
year winding down of guest worker'' provision. Both of these provisions 
do not make any sense, and both are unrealistic for the development and 
growth of the economy of the CNMI. How these provisions would help 
``develop, grow and diversify'' the economy of the CNMI is truly 
incomprehensible. Indeed, it may also be wise for the Subcommittee to 
ask those who drafted this legislation how some of these provisions 
came about. The Subcommittee should require them to explain to the 
Subcommittee why they think these unusual provisions would help in the 
growth and development of the economy of the CNMI. They should be asked 
to provide the Subcommittee with answers that make sense. If it turns 
out that some of these provisions are in essence, as we suspect, a form 
of retribution against the CNMI for allegedly being ``an errant 
member'' of the American political family in the past, we believe that 
an august and hallowed institution, as the United States Congress is, 
should not be used wittingly or unwittingly by individuals in such a 
cavalier manner. We sincerely hope that our suspicion on this matter is 
incorrect, and that the people who drafted this legislation were 
motivated entirely by a truly sincere interest in the growth and 
development of a diverse economy for the CNMI. The burden of explaining 
this should, however, be on the drafters of the legislation: to show 
the Subcommittee that such is indeed the case, and not otherwise.
Specific Concerns with Respect to Certain Provisions of Title I of the 
        Act
    In addition to the foregoing concerns, we would like to point out 
to the Subcommittee several particular concerns that our Group has with 
some of the provisions of the proposed federal legislation. First, the 
Group would like to ask the Subcommittee to please clarify the 
provisions relating to ``immigrants,'' as set forth in section 6 (c) of 
the proposed Amendment to the Joint Resolution Approving the Covenant. 
This particular subsection provides that no alien shall be admitted at 
a port of entry of the CNMI for purposes of admission as an immigrant 
alien, except family-sponsored immigrants and employment-based 
immigrants. We have earlier noted our concern as to why we do not 
understand why new admissions into the CNMI of additional guest workers 
have to be conditioned on their being admitted as immigrants only, and 
not as non-immigrants as is now and has been a long-standing rule under 
the INA. We are also not clear as to why a numerical limitation on 
family-sponsored immigrants is being set for the CNMI alone. Does this 
mean that once the numerical limit agreed to by the CNMI governor and 
the Secretary of Homeland Security has been reached, additional 
immediate relatives of U.S. citizens residing in the CNMI cannot be 
admitted into the CNMI? If so, why?
    As to additional guest workers who could only be hired as 
immigrants, we urge the Subcommittee to seriously consider the impact 
the addition of such immigrants into the permanent population of the 
CNMI may have on the social demographics and dynamics of the CNMI. 
Would it have an adverse social impact on the relatively small 
population of the CNMI? We believe that unanticipated social, political 
and cultural issues would likely arise in the CNMI considering its 
small size: land-wise, population-wise and resource-wise. We, 
therefore, urge the Subcommittee to please consider the potential 
impact of the proposed federal legislation on the local demographics 
and on the social and cultural dynamics. The Subcommittee might also 
want to consider the question: what if the guest worker does not want 
to be an immigrant?
    What has happened during the CNMI immigration regime in the past 
has been bad enough in terms of the lopsided population between 
residents and guest workers, as the Congress is fully aware of. So why 
is the proposed federal legislation trying to compound the problem by 
requiring that all new guest workers could be admitted only as 
permanent residents? It is almost as if the primary concern of the 
proposed legislation is not on the people of the CNMI, but on how guest 
workers would fare under the proposed federal legislation. We believe 
that the federal legislation should treat both residents and guest 
workers fairly and decently. Indeed, we wish to point out that the 
people of the Northern Mariana Islands are the rightful subjects of the 
United States. The people of the CNMI are the ones who voted to join 
the American political family in 1978. Inasmuch as our leaders may not 
have done a commendable job in the area of immigration and labor in the 
past, we are urging this Subcommittee to please listen to and take into 
account our people's concerns. All we are asking is for the Congress 
correct the problem, not compound it further with this legislation.
The Extension to the CNMI of the Guam Visa-Waiver Program
    Our group appreciates the proposed extension to the CNMI of the 
statutory visa-waiver program for visitors to Guam from several 
countries in Asia. For the Northern Mariana Islands-Only Visa Waiver 
Program, however, the Secretary of the Homeland Security is given the 
discretion to determine by regulations which other countries would be 
given visa-waiver privilege to be able to visit the CNMI. We wish to 
point out that the CNMI has been issued an ``approved-destination'' 
status by the People's Republic of China, for the CNMI to be able to 
receive visitors from China. Because of the sharp decline in the number 
of visitors from Japan over the past several years, the CNMI visitor 
industry is trying its best to bring in more visitors from China. Our 
Group is urging that a special provision be inserted in the proposed 
federal legislation so that the Secretary of Homeland Security would 
actually allow tourists from China to visit the Northern Mariana 
Islands.
The Matter of Long-Term Investor Visas for Future Investors
    The proposed federal legislation would allow the issuance of non-
immigrant investor visas for aliens that have been admitted to the 
Commonwealth, have been given long-term investor status, and have 
continuously maintained residence in the CNMI as long-term investors. 
The Group's concern is with respect to new alien investors who 
hereafter wish to invest in the CNMI. Could the proposed legislation be 
amended so that the legislation provide for the Secretary of Homeland 
Security to promulgate regulations that would allow new foreign 
investors to also be given non-immigrant investor visas? This is a very 
important matter for the economic growth and development of the CNMI: 
the infusion of fresh capital into the CNMI economy. The Subcommittee 
should be aware that most of the investors in the CNMI are from foreign 
countries like Japan and Korea; not from the United States, due in 
large part because of geographical consideration.
The Matter of Granting ``Status'' to Long-Term Guest Workers
    Our Group has no particular comment on the granting of non-
immigrant ``status'' to guest workers who have been in the CNMI for at 
least five years. This is a matter that we feel is strictly for the 
Federal Government to decide. But as with our previous comments, we 
urge the Subcommittee to determine the basis or the rationale for the 
granting of what is essentially a permanent residency status on such 
guest workers. Would it adversely affect the social, political and 
cultural dynamics in the CNMI? Also, is it the eventual plan to grant 
U.S. citizenship to these guest workers after having such status for 
five years? That is the sense we have in reading this provision; 
otherwise it does not make sense to have a group of ``non-immigrants'' 
staying permanently all over the United States, almost as if 
``stateless.'' Because such proposed ``status'' does not make sense, we 
request that the Subcommittee have this matter clarified by the 
drafters of this legislation.
The Matter of Granting Asylum to Refugees
    Our Group has no problem whatsoever with the provisions requiring 
the CNMI Government to comply with the treaties and conventions entered 
into by the United States with respect to asylum for refugees. Indeed, 
our position on this matter is unconditional: that the CNMI must comply 
with all the laws pertaining to asylum for refugees. The only caveat is 
that if the matter involving refugees overwhelms the ability of the 
CNMI to handle an influx of refugees, then the Federal Government must 
step in to assist financially, logistically, manpower-wise and so 
forth.
The Collection and Retention by the Secretary of Homeland Security of 
        User Fees Paid by Employers of Guest Workers
    The proposed legislation provides for the Secretary of Homeland 
security to establish and collect user fees from the employers of guest 
workers. It further provides that such fees shall be retained by the 
U.S. Treasury to be used to administer the guest worker program, 
notwithstanding section 703 (b) of the Covenant which mandates that all 
fees collected by the Federal Government in the CNMI shall be 
transferred over to the CNMI Government treasury for use by the CNMI 
Government. We urge the Subcommittee to continue the application of 
section 703 (b) of the Covenant to such user fees. First, we believe 
that the burden of footing the expenses for the work of the Department 
of Homeland Security in the CNMI is best left to the Federal Government 
pursuant to federal budgetary appropriations. Second, the user fees 
collected should be transferred to the CNMI Government, whose general 
revenue collection during the past two years has decreased 
dramatically. Third, we believe that section 703(b) of the Covenant 
should be honored by the Federal Government, because to do otherwise 
would give the impression that the United States is reneging on the 
terms of the Covenant.
The Ten Percent (10%) Matching Fund Contribution from the CNMI for 
        Technical Assistance and Support Provided by the Department of 
        Interior
    Our Group appreciates the provisions of the proposed legislation 
that would provide the CNMI with technical assistance and support from 
the Department of Interior in economic matters. Section 103(e)(3). We 
urge the Subcommittee, however, to please consider removing the ten 
percent (10%) matching fund contribution that the CNMI would be 
required to pay for such technical assistance and support. As we have 
stated several times earlier in this testimony, the CNMI Government is 
literally broke and simply cannot afford to make this matching fund 
contribution. Maybe in the distant future, when the CNMI economy gets 
back to normal, such matching fund requirement would be reasonable to 
impose, but not for the foreseeable future.
TITLE II: THE NORTHERN MARIANA ISLANDS DELEGATE ACT
    The CNMI Enterprise Group wholeheartedly endorses and supports 
Title II of the Act. If enacted into law, the people of the Northern 
Mariana Islands would, after thirty long years of waiting, finally have 
real representation in the United States Congress. We thank the present 
Subcommittee on Insular Affairs and its distinguished Chair for its 
willingness and sensitivity in agreeing with the people of the Northern 
Mariana Islands that the Commonwealth of the Northern Mariana Islands, 
as a member of the American political family, should be accorded 
representation in our national lawmaking body. Democracy demands no 
less; and America, as we know, is the bulwark of democracy. Thank you 
very much for having the determination and commitment to make our 
representation in the U.S. Congress representation a reality. We are 
clearly elated with this very important proposal.
CONCLUSION
    The foregoing sets forth the testimony of the CNMI Enterprise Group 
with respect to H.R. 3079. On behalf of the members of our Group, I 
wish to thank the Subcommittee Chair and Members for giving us the 
opportunity to comment on a very significant piece of legislation, one 
that will directly affect the future welfare and well-being of the 
people of the Northern Mariana Islands for years to come. Our Group 
will be happy to answer questions that the Subcommittee may have 
regarding our testimony.
                                 ______
                                 
    Mrs. Christensen. I now recognize myself for five minutes. 
I'll begin questions with Mr. Sablan. You testified that the 
Administration, you would prefer for us to wait until the GAO 
report was issued and get a chance to look at it. Mr. Cohen 
testified that the Administration does not want to wait until--
unless it feels it's needed and necessary to wait for that GAO 
report, but that the security needs and the state of affairs 
here should bring that flexible Federalization into play right 
now, and that the report itself will then inform the transition 
period, which is to be worked on between the Government of the 
CNMI and the Federal Government. Do you not agree that, that--
given what Mr. Cohen said, do you still feel that we should 
wait?
    Mr. Sablan. Yes.
    Mrs. Christensen. And why?
    Mr. Sablan. I believe so because, it's quite interesting 
obviously, by virtue of the fact that this bill has been 
brought to task and we're now addressing the homeland security 
effort, but we've had six years to do so in the Commonwealth. 
2001 occurred and yes, we have gotten great grants through 
Homeland Security. We have an office here. We have--provisions 
have been put into play that affect homeland security. But 
where is the great urgency, I guess, is the point we're trying 
to make.
    Mrs. Christensen. Well, I think some of it may be because 
of the military buildup and the fact that we're bringing, you 
know, the number of Marines, Navy, Air Force to the region and 
we do want the CNMI to also be the beneficiaries of some of 
that buildup.
    Mr. Sablan. I understand that. And what we would like to 
see is, yes, the buildup in Guahan occur. It will definitely 
benefit the region, but we also need to be cognizant that, 
looking at the dynamic that we have here, we do not have a 
military base as a second pillar of our economy. We had the 
garment industry; maybe if we'd gotten some provision changes 
and had done 3A earlier, we may have been able to salvage that. 
We did not get that, political or whatever. What we have now is 
tourism left. That is the only pillar we've got left. And so 
looking around in the region, what diversification 
opportunities do we really have? I think we need to look around 
us. I think Guahan is a prime example. In '93 when the military 
was pulling out, it had tourism left and, forgive me 
Congresswoman Bordallo, but you know Guam is in trouble and 
they do have the horizon to look forward to $15 billion dollars 
potentially coming over 15 years is what everybody hears. We 
don't have that potential.
    Mrs. Christensen. Well, what I was saying is that you will 
share in some of that potential and I am sure she'll----
    Mr. Sablan. As the Governor was saying, the hopes, I think 
is the----
    Mrs. Christensen. Well----
    Mr. Sablan.--the scenario we're looking at.
    Mrs. Christensen. I think you know, well--I am not going to 
address that but, you know, we're not here to blow smoke.
    Mr. Sablan. Sure. I am not like that.
    Mrs. Christensen. Let me ask Ms. Knight. I hear your very 
clear opposition to the bill, and I take it then that the Hotel 
Association doesn't believe that the bill's provisions 
providing for a special visa waiver for the CNMI to allow 
tourist to come in, who might even otherwise not qualify for a 
visa to enter the Mainland U.S., the screenings, as well as the 
special H2-visa, to be able to continue to allow the CNMI to 
have the unprecedented ability to bring in necessary labor, 
also under the safeguards of the Federal law, but outside of 
the cap to have their own ability to do that. Do you not feel 
that those are enough to mitigate any potentially negative 
effects--impacts that the bill might have otherwise?
    Ms. Knight. Madam Chair, that's a very good question, but 
unfortunately, no, our members do not have the confidence. And 
the reason is because there is absolutely no detail here. There 
is no detail about cost; there is no detail about how or who or 
where visas will be obtained. U.S. Embassies, we have some 
experience with that. We have some experience with I20-visas 
for students for example and it's all very bureaucratic, very 
expensive, very, very long processing. So, our members do not 
have confidence.
    Mrs. Christensen. And the fact that this will be negotiated 
with the Governor of the CNMI and the agencies, the Federal 
agencies involved and you would have representation in Congress 
acting on your behalf does not increase your confidence?
    Ms. Knight. No. A number of Federal offices have opened and 
closed here over the years. And there hasn't been any that have 
had real significant long-term presence that gives us 
confidence. It's kind of like, how could we support something 
without a plan? That's why I am saying this is just too--this 
is very, very uncertain. You can't plan business investments. 
We can't plan next year's business plan on something like this 
without more detail.
    Mrs. Christensen. Well, I am going to yield to my 
colleagues, but the plan has ten years to be put into place and 
this is just setting the framework for that plan to be 
developed between the Federal government and the local 
government. I yield five minutes to Mr. Faleomavaega.
    Mr. Faleomavaega. Thank you, Madam Chair. I thank the 
members of the panel for their statements. Underlying the 
comments that had been made by Ms. Knight, this is the final 
leg of the stool so to speak in terms of the most basic 
fundamental industry that is now currently left here in the 
economy of the CNMI. How do you contrast that the--and I assume 
that there has been full implementation of the national 
immigration laws, for example, a place like the State of 
Hawaii, and their tourism industry seems to be still in real 
good condition. I noticed Continental and Japan Airlines have 
left and I guess making it more difficult for you to attract 
tourists coming from the Asian countries. Are you saying that 
this proposed bill is going to kill the tourism industry rather 
than help in getting a more even-handed format, I suppose, and 
making sure that immigration and all of this is to be carried 
out in a more fair way? Can you comment on your concerns about 
the fact that you feel that this bill is not going to be 
helpful to your tourism industry?
    Ms. Knight. Well, let me address the first part about 
Hawaii. Hawaii is booming because of mainland American and 
Canadian tourists. We cannot get mainland American and Canadian 
tourists out here to the CNMI. We're dependent on Asia. And 
we're competing with destinations like Okinawa and Phuket and 
Maldives and Hainan Island, and that's what we're competing. 
So, it's a whole----
    Mr. Faleomavaega. How many tourists are you getting right 
here?
    Ms. Knight.--whole different ball game.
    Mr. Faleomavaega. How many tourists are you getting right 
now?
    Ms. Knight. This year, it will be around 400,000. Our peak 
year was 775,000. So you can see how far down we are. And 
that's because of competition. But mostly it's because of air 
service.
    Mr. Faleomavaega. How does that compare to Guam?
    Ms. Knight. Guam is 1.2 million, and trying for 1.5.
    Ms. Bordallo. A little bit over, yes.
    Ms. Knight. But it's largely an air service problem, 
Congressman. We lost so much of our Japan Air service because 
there are only a certain number of slots out of the Narita 
Airport in Tokyo and there are other destinations that are 
larger, like Guam, that have a little bit higher yield than we 
do. We have a very, very high cost of aviation fuel. That's why 
I am saying these are some issues that are beyond our control 
that perhaps the U.S. Government can work with us and help.
    Mr. Faleomavaega. You don't think that the provision of 
H.R. 3079 is in the right direction in helping you?
    Ms. Knight. These don't solve our problems, in my opinion. 
Our economic problems will be compounded by this bill.
    Mr. Faleomavaega. Very interesting observation there. Mr. 
Borja, you mentioned about Section 701 of the Covenant. Twenty-
nine years later you feel that the U.S. has not fulfilled its 
obligations or responsibilities under that provision of the 
Covenant?
    Mr. Borja. That's correct, Congressman.
    Mr. Faleomavaega. You think that perhaps--while I can 
understand the Federal government does--will take 
responsibilities of the failure of the development of Section 
701, but perhaps part of that failure can also be due to the 
problems of the CNMI had created itself?
    Mr. Borja. Possibly.
    Mr. Faleomavaega. Possibly?
    Mr. Borja. Yes. Yeah, as I mentioned in my testimony, 
Congressman, there have been--we don't deny the abuses that 
have occurred. We don't deny that there have been problems in 
the running of our immigration, but I have yet to hear from 
anybody to tell me that the immigration laws of the United 
States are perfect when applied on the Mainland.
    Mr. Faleomavaega. Oh, I don't think we're talking 
specifically about just on immigration issues. I am talking 
about the overall situation in terms of the benefits and many 
other programs that the people of CNMI are beneficiaries coming 
from the Federal Government. I mean the----
    Mr. Borja. Well, Congressman, if I may, the bill itself 
makes mention of trying to up the standard of living here. So, 
to me, that's an admission that the promise made by the United 
States under 701 has not been fulfilled. Otherwise, it would 
say here that we've done it, but we want to help you some more.
    Mr. Faleomavaega. So, what is your proposed solution to 
alleviate this?
    Mr. Borja. Well, like I suggested----
    Mr. Faleomavaega. Demand more assistance from the Federal 
government?
    Mr. Borja. Perhaps. But what the plan has in the bill, 
Congressman, won't do it. That we're pretty certain of. You 
asked Ms. Lynn Knight here as to what specifically in the bill 
would be detrimental to the tourist industry and the plan here 
is vague on a lot of things, but you have a plan that aims on a 
zero non-resident workers after ten years. Everybody here knows 
we're not going to have human resources to assist and support 
the tourist industry without non-resident workers. How is that 
going to help us? You have a provision in the bill that says no 
more foreign investors after ten years. How is that going to 
help us?
    Mr. Faleomavaega. Well, I appreciate your response and 
comments. I wish I had more time, but my time is up, and Madam 
Chair, thank you.
    Mrs. Christensen. Thank you. I am not sure that the bill 
says anywhere that there would be zero guest workers at the end 
of ten years, but--and we'll find the reference. Ms. Bordallo?
    Ms. Bordallo. Thank you. Thank you, Madam Chair. I want to 
thank Mr. Sablan and Ms. Knight and Mr. Borja. Your testimonies 
to follow-up on what Congressman Faleomavaega said, your 
testimonies are very interesting and you know I think it's very 
important that we look at the economic side of this issue. I 
consider the members of the business community to be of utmost 
importance as we go forward with deliberations on this bill. I 
was a member for two terms of the Small Business Committee in 
the U.S. House of Representatives, and I know businesses are 
the engine of the community, and it's important what you have 
to say.
    I do serve on the Armed Services Committee and I think 
someone referenced the military buildup. In the military 
briefings we have had so far in Washington, there are plans to 
include the CNMI in the buildup. So, I want to assure you that, 
I can't go into specifics, but I do know that you are included. 
And because of the interest of time, I have been told that 
we're really very limited. I have some closing statements, but 
I will yield back my time.
    Mrs. Christensen. If you didn't have any questions, I would 
now refer to--yield time to Mr. Faleomavaega for his closing 
statement and then return to you, Ms. Bordallo.
    Mr. Faleomavaega. I just want to make a closing statement, 
again, to thank Governor Fitial and the members of the 
Administration, the leadership of the Legislature of CNMI and 
the various leaders of the business community, and in general 
the good people of CNMI for, again, allowing us to come in to 
share with us some of their concerns and problems, not only 
relating to the proposed bill, but overall just the need for 
those of us working in Washington to pay more attention to the 
problems affecting the needs of the people here in the CNMI. 
Thank you, Madam Chair and thank you members of the Panel.
    Mrs. Christensen. Ms. Bordallo, I recognize you for your 
closing statement.
    Ms. Bordallo. Thank you. Thank you very much, Madam Chair. 
Ladies and gentlemen, I want to thank you all for your warm 
welcome, your wonderful hospitality, and for all the ideas and 
views that you have shared with us regarding H.R. 3079, and the 
associated matters of interest to the CNMI and your community. 
My colleagues and our professional (unintelligible) staff and I 
came here to listen, listen to your views. And I will keep them 
in mind as I continue to evaluate proposals in Washington, as a 
member of the Committee on Natural Resources and, of course, on 
the House Armed Services Committee, which will be of great 
interest to all of the insular areas here in the Pacific. So, I 
am pleased that I have a seat in that committee. I share a deep 
affection for your islands and your people. Resident 
Representative Pete A. Tenorio and I work well together in 
Washington, as he will allude to, and I look forward to the day 
when Congresswoman Christensen, Congressman Faleomavaega, our 
colleagues in the House and I can work alongside and with our 
Representative in Congress from your community. Until such time 
that that happens, I will be your Representative through Mr. 
Tenorio.
    The people of Guam and the CNMI share a common heritage and 
a history together. We are islanders. We're proud of our 
families and our way of life, proud of our customs and our 
traditions that have helped shaped our people and communities 
over time. And today, we face many challenges together and 
together we must approach solutions to them. When we work 
together, we achieve the best results. I found this out when I 
became a member of the U.S. Congress. I look forward to 
continuing to do my part in addressing these issues of concern 
and to meet the interest of our nation and the people and the 
leaders of the CNMI.
    And I want to again, in closing, thank the Governor, the 
Lieutenant Governor and your offices, the Resident 
Representative and his staff, the members of the Legislature, 
the community, civic and business leaders and all of the others 
who have participated in this hearing today, and who strive to 
make this dialogue with Congress most meaningful and 
informative. I thank you very much, Si Yu'us ma'ase.
    Mrs. Christensen. Thank you, Ms. Bordallo and Mr. 
Faleomavaega. I just wanted to reference page 29 of the bill, 
where it states that the government can, within 180 days at the 
end of the 10-year transition period, extend the provision for 
the program for increments of five years. So, it doesn't really 
end--does not have to end at that 10-year period. And the plan 
is to phase out the CNMI Guest Worker Program either in the 10 
years, or either the five-year extensions, if requested, and 
then replace it with the Federal Guest Worker Program. So, I 
hope that clarifies, but you can go to page 29 and beyond to 
the spot. I am going to give my closing.
    Mr. Borja. Madam Chair, if I may, you also referenced our 
statement to the effect that you're not sure that the bill 
mentioned zero. On page 26, lines 10 to--(pauses; peruses 
document)----
    Mrs. Christensen. That's the end of the CNMI program, but 
there is a provision to extend it in five-year increments. So, 
I mean, it's not--all I am saying is that, it does not end in 
five years, if the CNMI sees the need to extend it in five-year 
increments thereafter. So, there is no hard and fast closure.
    Mr. Borja. (Audible but unintelligible).
    Mrs. Christensen. Right, and just being referred to the 
page where it says, ``in five-year increments, of the 
provisions of this paragraph are necessary to ensure an 
adequate number of workers will be available for legitimate 
businesses in the Commonwealth.'' We take every--we take your 
comments and your concerns, but I just wanted to clarify that 
for the record.
    And in closing, I want to assure the people of the 
Commonwealth of the Northern Mariana Islands and your 
leadership that this committee hearing is not an empty 
exercise. Both your oral and your written statements as 
submitted and admitted into the record would be fully 
considered as H.R. 3079 goes through the legislative process. I 
also want to assure you that the Subcommittee, the members of 
which are chiefly Delegates from your sister territories, will 
keep foremost in our minds and our work, the well-being of the 
people of the CNMI, as we seek to find resolutions to the 
plight of the temporary guest workers who've been allowed to 
live here for many years and as we respond to the needs for the 
increased security of this very important and sensitive region 
where so many of our U.S. territories and freely associated 
states exist. Again, the Subcommittee considers it a very high 
honor to have been able to convene this historic hearing in the 
Commonwealth of the Northern Mariana Islands. And we thank the 
Governor, the Lieutenant Governor, Representative Tenorio, the 
members of the Senate and the House, and the people of the CNMI 
for their hospitality. We thank everyone who has testified 
today. We thank the Deputy Assistant Secretary for coming. But 
again, we particularly want to thank all of you for your very 
gracious hospitality. We will return to our homes and to 
Washington, D.C., with very pleasant memories and warm feeling 
for all of you. Si Yu'us ma'ase.
    If there is no further business before the Subcommittee, 
the Chairman again thanks the members of the Subcommittee and 
our witnesses and we stand adjourned.
    [Whereupon, at 1:28 p.m., the Subcommittee was adjourned.]

    NOTE: Statements submitted for the record by the following 
individuals have been retained in the Committee's official 
files.
      Daniel Aquino Jr.
      Engracio ``Jerry'' Custodio, Human Dignity 
Movement
      Wendy Doromal
      Ron Hodges
      Maribeth Lumasag
      Daisy Mendiola
      Senator Maria Frica T. Pangelinan, 15th Northern 
Marianas Legislature
      Pukar Patel
      Antony Wibberly
      Reynaldo O. Yana
      Vincent Santos
      Li, Helian; Wang, Hongmin; Li, Pengfei; Li, 
Shanshan; Guo, Baolong; Guo, Qiang; Wu, Yinglai; Liu, Changmei; 
He, Jeing; Liu, Lanlan; He, Ganglan
      Ambrose M. Bennett
      Pachino Tat
      Jennifer Kordell

                                 
