The DOT provides examples of these occupations, including processing and benchwork occupations. See Employment and Training Administration, U. S. Department of Labor, Dictionary of Occupational Titles (4th ed. 1991) available at http://www.oalj.dol.gov/libdot.htm.

As the general meaning of processing and benchwork occupations is not clear from the title alone, additional explanation of these two particular occupational categories is provided. Processing occupations include occupations concerned with refining, mixing, compounding, chemically treating, heat treating, or similarly working with materials and products. Id. The DOT defines benchwork occupations as those concerned with the use of hand tools and bench machines to fit, grind, carve, mold, paint, sew, assemble, inspect, repair, and similarly work relatively small objects and materials, such as jewelry, phonographs, light bulbs, musical instruments, tires, footwear, pottery, and garments. Id. The work is usually performed at a set position in a mill, plant, or shop, at a bench, worktable, or conveyor. Id. All occupations must be for a legitimate business not engaging directly or indirectly in prostitution, trafficking in minors, or any other activity that is illegal under Federal or CNMI law.

DHS notes that household domestic workers are eligible for CW1. However, DHS also notes that the definition of ``legitimate business'' may have a significant impact on domestic workers directly employed by individuals, as ``business'' is defined to mean ``a real, active, and operating commercial or entrepreneurial undertaking that produces goods or services for profit.'' See 8 CFR 214.2(w)(1)(v). Individual households employing individual domestic workers would not appear to be a commercial or entrepreneurial undertaking, nor would the individual household be producing goods or services for profit. Therefore, it is anticipated that qualifying domestic workers likely would be employed through a ``legitimate business'' for placement in individual households.

The rule does not exclude any specific type of employment from the occupational categories permissible for CW1 workers. However, there are three occupational categoriesdancing, domestic workers, and hospitality workersabout which DHS has particular concern. DHS notes that women seeking employment as exotic dancers in the CNMI have been particularly prone to sexual exploitation and other abuse. See, e.g., Senate Hearing 11050, Conditions in the Commonwealth of the Northern Mariana Islands (Feb. 8, 2007) (testimony of Lauri Bennett Ogumoro and Sister Mary Stella Mangona). In a discussion between DHS officials and advocates for exploited women in Saipan in July 2008, the advocates identified socalled ``cultural dancing'' as a common front occupation used to import women into the CNMI for the purposes of prostitution, in addition to the category of domestic work. Additionally, waitressing and other club and restaurant hospitality work also are known paths for exploitation and abuse. See, e.g., United States v. Liu, 538 F.3d 1078 (9th Cir. 2008). DHS is considering excluding some or all of these occupations from eligibility for CW status.

DHS also is concerned about the economic effects of blanket exclusions of all dancers, domestic workers or hospitality service workers. DHS emphasizes that, regardless of the occupational category, all employers must be engaged in legitimate business, which is defined to exclude employers that engage directly or indirectly in prostitution, trafficking in minors, or any other activity that is illegal under Federal or CNMI law. DHS invites comments on the potential effect of excluding dancing from the list of eligible occupations. DHS also invites comments on whether DHS should exclude occupations, such as the hospitality industry, domestic service, or other occupations, to combat human trafficking and sexual exploitation. C. The CNMIOnly Transitional Worker Allocation System

Section 702(a) of the CNRA mandates that the Secretary of Homeland Security establish, administer, and enforce a system for allocating and determining the number, terms, and conditions of permits to be issued to prospective employers for the transitional workers. Section 6(d) of Public Law 94241, as added by sec. 702(a) of Public Law 110229. The Secretary may base the system
[[Page 55098]]
on any reasonable method and criteria determined by the Secretary to promote the maximum use, and to prevent adverse effects on wages and working conditions, of U.S. citizens, lawful permanent residents, and lawfully admissible freelyassociated state citizen labor. Id. The system must also provide for a reduction in the allocation of permits for such workers on an annual basis to zero during a period not to extend beyond December 31, 2014, unless extended by the Secretary of Labor. Id. This rule does not, for the reasons explained below, impose a specific annual reduction in allocation of permits, but does establish the numerical limitation to be utilized initially and its underlying methodologies for setting the numerical limitation throughout the transition period.

Under section 702(a) of the CNRA, between May 8, 2008 and the transition program effective date, the CNMI government must not increase the total number of alien workers present in the CNMI. Section 6(i)(1) of Public Law 94241, as added by sec. 702(a) of Public Law 110229. Thus, the DHSadministered system, in its initial phase, will be based on the estimate from the CNMI government of the maximum number of nonresident workers in the CNMI as of May 8, 2008. That number is 22,417.\4\ This rule defines the numerical limitation as the number of persons who may be granted CW1 status and sets that number for the initial year at no higher than 22,417. See 8 CFR 214.2(w)(1)(vii). DHS will assess and reduce the number of grants of CW1 status annually based, in part, on the economic conditions in the CNMI, consultation with the government of the CNMI and other Federal government agencies, and employment opportunities available for the resident workforce. Id. Grants of CW1 status will be allocated based upon the availability of CW1 permits and a showing of eligibility based upon the requirements outlined in this rule.
\4\ See Letter from Benigno Fitial, Governor of the Commonwealth of the Northern Mariana Islands, to Richard C. Barth, Assistant Secretary for Policy Development, and Stewart A. Baker, Assistant Secretary for Policy, Office of Policy, Department of Homeland Security (July 18, 2008) (Fitial letter) (available at
www.regulations.gov under DHS Docket No. USCIS20080038).

Specifically, 22,417 is a composite figure that includes aliens eligible for other INA categories, aliens with employment authorization for the first two years of the transition period under the ``grandfather clause'' provided by section 6(e)(2) of Public Law 94 241, as added by section 702(a) of Title VII of the CNRA, and CW1 eligible aliens. Thus, while 22,417 could theoretically reflect the total number of CW1 eligible aliens, setting 22,417 as the total number of CW1 workers would artificially inflate the CW1 eligible population by presuming that there are zero ``grandfathered'' or other INA workers. Therefore, this rule defines ``numerical limitation'' to be the maximum number of persons who may be granted CW1 status, but for the reasons explained above, it is not expected that there will actually be 22,417 CW1 eligible aliens to whom CW1 status will be accorded. Id. DHS emphasizes that this provision is not intended to, and will not have the effect of, providing any cap on the access of CNMI employers to H and other nonimmigrant workers in the INA categories.

The Governor of the CNMI has requested that DHS not reduce the number of foreign workers available to CNMI employers in the first two years of the transition program beyond the cap currently provided by section 6(i)(1) of the Covenant Act.\5\ As required by section 702(a) of the CNRA, DHS considered the request of the Governor of the CNMI in creating this rule. However, in considering this request, DHS was also bound by the statutory language mandating a reduction of numbers on an annual basis. Section 6(d)(2) of Public Law 94241, as added by sec. 702(a) of Public Law 110229.

\5\ See Fitial letter.

In light of these interests, this rule sets the maximum number of persons who may be granted CW1 status for the first year of the transition period at 22,417. See 8 CFR 214.2(w)(1)(vii)(A). For the subsequent years of the transition period, the numerical limitation will be a number less than 22,417, as determined at the discretion of the Secretary. USCIS will publish the determination as a notice in the Federal Register. See 8 CFR 214.2(w)(1)(vii)(B). DHS believes that, given the lack of specific data available both on the foreign worker population, particularly with respect to eligibility for other INA categories and the number of ``grandfathered'' workers during the first two years of the transition period, as well as the uncertainty of future economic conditions in the CNMI, determining the CW1 numerical limitation in this manner is prudent.

D. Petitioning Procedures

This rule requires employers who seek to employ a CW1 nonimmigrant worker to file a petition with USCIS requesting such status. See 8 CFR 214.2(w)(1)(ix). USCIS has determined that its Form I129, Petition for a Nonimmigrant Worker, contains most of the information needed by USCIS to determine that a particular employer and its current and prospective employees are eligible as an employer and for CW1 status,
respectively. However, because the CW program is a temporary program, USCIS has decided to develop and use a separate Form I129 called the I129CW (``Petition for a Nonimmigrant Worker in the CNMI''), for CW petitions and will provide separate instructions for the application form for requesting CW transitional workers. The petition must be prepared in accordance with the form instructions and accompanied by the appropriate fee or a fee waiver request. USCIS will charge the current fee of $320 for Form I129 for the Form I129CW because the adjudicative burden is expected to be identical. In addition to the petitioning fee required for submission of a Form I129, section 702(a) of the CNRA requires employers to pay a supplemental CNMI education funding fee of $150 per beneficiary per year. Section 6(b)(6) of Public Law 94241, as added by sec. 702(a) of Public Law 110229. The supplementary CNMI education funding fee is mandatory and cannot be waived.

While fee waivers are not generally available in employmentbased cases, due to the unique circumstances present in the CNMI, USCIS may waive the fee for the I129CW in certain circumstances if the petitioner is able to show inability to pay. See 8 CFR 103.7(c)(5)(i). Due to the inherent inconsistency between sponsoring an alien for employment and being unable to pay the requisite fee for that sponsorship, USCIS expects that the situation when an employer would adequately demonstrate an inability to pay will be extremely limited. An estimate of the information collection requirements and a request for comments are included in the Paperwork Reduction Act section of this rule. An analysis of the fee impacts of this rule are included in the summary of the costs and benefits also provided below.

Form I129CW will require an employer to provide the full name of the beneficiaries, as well as documentation or information that is sufficient to demonstrate that the worker beneficiaries on the petition are eligible for CW1 status based on the criteria in this rule. This rule requires that the petitioner submit an attestation regarding the eligibility of both the employer and the beneficiary. See 8 CFR 214.2(w)(6)(ii). This rule requires that
[[Page 55099]]
such an attestation certify that the petitioner meets the definition of an eligible employer, that the beneficiary is qualified for the position, and, if the beneficiary is present in the CNMI, that the beneficiary is in lawful CNMI status. Id. Finally, the rule requires a petitioner to attest that the position is nontemporary or nonseasonal, is in an occupational category as designated by the Secretary, and that qualified United States workers are not available to fill the position. Id. DHS believes that having an attestation is necessary to ensure eligibility of both the employer and of the beneficiary, and will obviate the need to affirmatively determine whether the applicant is eligible for status under every other conceivable INA category. Additionally, certain professions may require licensure in order to fully perform the duties of the occupation. In order to allow full and competent performance of such duties, this rule requires the petitioner to submit evidence of the beneficiary's licensure if the occupation requires a Commonwealth or local license. See 8 CFR 214.2(w)(6)(iii).

The rule allows a beneficiary to request, and obtain, a transfer to a new employer within an alien's occupational category or to another occupational category that the Secretary of Homeland Security has determined requires alien workers. See 8 CFR 214.2(w)(7). However, the rule requires that a petition for a change of employer must be filed by the new employer and an extension of the alien's stay must be requested if necessary for the validity period of the petition. Id. An alien who makes an unauthorized change of employment to a new employer has failed to maintain his or her status. Id. Further, the rule requires an employer to submit a new or amended petition for any material (i.e. substantive) change in the terms and conditions of employment. See 8 CFR 214.2(w)(8). DHS believes that such requirements are consistent with other nonimmigrant categories allowing change of employers and ensures that aliens are properly complying with the terms of their admission in CW status while not making transfer between employers impermissible.

The rule also allows petitioners to file for multiple beneficiaries. See 8 CFR 214.2(w)(9). The rule permits a petitioning employer to include more than one beneficiary in a CW1 petition if the beneficiaries will be working in the same occupational category, for the same period of time, and in the same location. Id. However, the rule does not allow employers to petition for unnamed beneficiaries. At the time of filing, the petition must include the name of each intended beneficiary and other required information, as indicated in the form instructions. See 8 CFR 214.2(w)(10). DHS believes that allowing multiple beneficiaries will ease the potential burden on petitioners associated with submitting multiple individual petitions for multiple beneficiaries. Requiring that such beneficiaries be named will allow USCIS to verify, when necessary, prior lawful status of the beneficiaries in the CNMI, as this rule requires.

The rule includes safeguards for the beneficiary in case of early termination. See 8 CFR 214.2(w)(11). The rule requires that the petitioning employer pay the reasonable cost of return transportation of the alien to the alien's last place of foreign residence if the alien is dismissed from employment for any reason by the employer before the end of the period of authorized admission. Id. This requirement is consistent with current employment practices in the CNMI. This requirement also protects the Federal government from the potential costs of removing indigent aliens from the CNMI and is within DHS's discretion to impose requirements for temporary transitional worker status under title VII of the CNRA and more generally under section 214 of the INA.

The rule states that, after consideration of all the evidence submitted, USCIS will issue an approval of the petition on a Form I 797, Notice of Action, or in another form as USCIS may prescribe. See 8 CFR 214.2(w)(12). The rule requires that the approval notice include the classification and name of the beneficiary or beneficiaries and the petition's period of validity, and that a petition for more than one beneficiary may be approved in whole or in part. See 8 CFR 214.2(w)(12)(i). However, the rule requires that petitioners will not be able to file for a beneficiary earlier than six months before the date of actual need for the beneficiary's services. See 8 CFR 214.2(w)(12)(ii). The rule further provides that, although USCIS may in its discretion permit petitions to be filed prior to November 28, 2009, USCIS will not grant CW1 status or authorize the admission of any alien to the CNMI prior to such date. Id.

The rule also states that although the beneficiary may be admitted to the CNMI up to ten days before the validity period begins and may remain no later than ten days after the validity period ends, the beneficiary will only be able to work during the validity period of the petition. See 8 CFR 214.2(w)(13). DHS believes that this validity period is consistent with other nonimmigrant categories and permits the necessary flexibility for travel and living arrangements to be made both before and after period of authorized employment. Finally, this rule requires that USCIS reject a petition once the numerical limitation of 22,417 has been reached, but that in such cases the petition and accompanying fee will be returned along with notice that the numerical limitation has been reached. See 8 CFR 214.2(w)(20). DHS believes that this will allow for reduction in CW workers in accordance with the numerical limitation. An alien in the CNMI whose CW status terminates, or who is not granted CW status at all, is not lawfully present and is subject to removal if he or she does not have another status under U.S. immigration law or other lawful basis to remain. E. Obtaining CW Status

Once the Form I129CW petition is approved, the beneficiary will receive CW1 status, and eligible family members may apply for CW2 status for the spouse and dependents, as appropriate. See 8 CFR 214.2(w)(3). Dependents are spouses and minor children, as discussed more fully below in part G. Aliens who are abroad will need to apply for a CW1 or CW2 visa at a U.S. consulate. Aliens present in the CNMI must apply for status using Form I129CW, and shall be required to provide biometrics along with an initial application for CW1 or CW2 status. See 8 CFR 214.2(w)(5) and (w)(15). When applicants apply overseas, USCIS will not require that the applicants provide biometrics along with Form I129CW, although the Department of State may require biometrics at a U.S. consulate or embassy abroad as part of its routine visa processing procedures. Aliens present in the CNMI will not have previously supplied biometric information to the Federal government; therefore, because the federal government will not have conducted the attendant security checks on those aliens, USCIS will require aliens in the CNMI to provide biometrics. The applicable biometrics fee is $80. A fee waiver is available based upon a showing of inability to pay for the Form I129CW and/or biometrics fees. See 8 CFR 103.7(b)(1); 8 CFR 103.7(c)(5)(i). Status will be evidenced using Form I94 or other appropriate documents.

F. Lawful Presence and Travel

The transitional worker program will be available to two groups of aliens in general: (1) Those who are lawfully present in the CNMI; and (2) those who are abroad. The rule defines lawful
[[Page 55100]]
presence as status under the CNMI immigration laws before the transition program effective date, or status under the ``grandfather'' provision of the CNRA or U.S. immigration laws after the transition program effective date. See Section 6(e)(1) or (2) of Public Law 94 241, as added by sec. 702(a) of Title VII of the CNRA; 8 CFR 214.2(w)(1)(iv).

Short term visitors for business or pleasure, including individuals admitted with a Visitor Entry Permit (VEP) under CNMI law, will not be eligible to obtain CW classification, as such individuals are not part of the foreign workforce that is the subject of this rule. Once status is obtained, the CW1 or CW2 nonimmigrant may leave the CNMI and return, but must have the appropriate visa for readmission. See 8 CFR 214.2(w)(22)(ii). Such a visa requirement at the time of application for admission is consistent with current INA requirements. See INA sec. 212(a)(7)(B), 8 U.S.C. 1182(a)(7)(B). CW classification is valid only in the CNMI, and provides no basis for travel to any other part of the United States. See 8 CFR 214.2(w)(22)(i). An attempt to travel to any other part of the United States without documentation authorizing admission in another classification is a violation of the CW status that will render the alien removable. Id.

G. Spouse and Minor Children of CW Transitional Worker

Section 702(a) of the CNRA, provides that spouses and minor children of an alien in CW1 nonimmigrant status may be authorized for admission into the CNMI as accompanying or following to join the principal CW worker, and this rule implements that authority. See 8 CFR 214.2(w)(3). The rule adopts the INA's definition of ``child'' for immigration purposes other than naturalization in section 101(b), adding a requirement that the child be under eighteen years of age since the statute refers to ``minor children'' rather than ``children.'' See Section 6(d)(6) of Public Law 94241, as added by sec. 702(a) of Public Law 110229; 8 CFR 214.2(w)(1)(vi). Generally, work authorization is not permitted for accompanying spouses and children of other classes of nonimmigrants as a result of their derivative status, and this rule similarly does not provide it. See 8 CFR 214.2(w)(22)(iii).

H. Consideration of Petitions and Applications

A decision to grant or deny CW1 or CW2 status is discretionary and USCIS may deny petitions for failure to demonstrate eligibility or other good cause. Consistent with procedures for other nonimmigrant categories, petitioners may appeal denials of Form I129CW to the USCIS Administrative Appeals Office on Form I290B, as provided by 8 CFR 103.7(b). Denials of Form I539, Application to Change or Extend Nonimmigrant Status, are not appealable. See 8 CFR 214.2(w)(21). I. Change or Adjustment of Status

Section 702(a) of the CNRA allows workers in the CW classification to change to another nonimmigrant status or to adjust to lawful permanent resident status throughout the transition period, if eligible. Section 6(d)(1) of Public Law 94241, as added by section 702(a) of Public Law 110229. The rule provides that an alien may legitimately be present in, or come to, the CNMI for a temporary period as a CW1 or CW2 nonimmigrant and, at the same time, lawfully seek to become a permanent resident of the United States provided the alien intends to depart voluntarily at the end of the alien's authorized nonimmigrant stay. See 8 CFR 214.2(w)(19). For purposes of qualifying for CW1 or CW2 classification, the alien is not required to maintain a residence abroad, and dual immigrant and nonimmigrant intent is allowed. See 8 CFR 214.2(w)(19).

J. Period of Admission and Extensions of Stay

A CW transitional worker will be admitted for an initial period of one year. See 8 CFR 214.2(w)(16). The spouse and children accompanying or following to join a CW transitional worker will be admitted for the same period that the principal alien is in valid CW transitional worker status, or in the case of a minor child, until the age of 18. See 8 CFR 214.2(w)(16). Additionally, USCIS will grant extensions of CW status in oneyear increments until the end of the transition period. See 8 CFR 214.2(w)(17). Extensions of stay are subject to the numerical limitation and section 702(a) of the CNRA further requires that the number of permits be reduced on an annual basis. See 8 CFR 214.2(w)(1)(vii). A oneyear validity period facilitates effective management of the number of permits issued at any given time. DHS welcomes comments on the CW1 status validity period, its potential impacts on CNMI employers and foreign workers, and ways to mitigate these impacts while complying with the statute.

K. PostTransition Period

Unless extended by the Secretary of Labor, the CNMIonly transitional worker program will end on December 31, 2014. Section 6(a)(2) of Public Law 94241, as added by section 702(a) of Public Law 110229. After the end of the CNMIonly transitional worker program, the CW classification will cease to exist, as existing grants of status will automatically terminate and no new ones will be issued. See 8 CFR 214.2(w)(23).

IV. Technical Changes

This rule amends the current provisions of 8 CFR 214.2 by adding paragraph (w) CNMIOnly Transitional Worker classification. See 8 CFR 214.2(w).
V. Regulatory Requirements

A. Administrative Procedure Act

The Administrative Procedure Act (APA) provides that an agency may dispense with notice and comment rulemaking procedures when an agency, for ``good cause,'' finds that those procedures are ``impracticable, unnecessary, or contrary to the public interest.'' See 5 U.S.C. 553(b)(B). For reasons discussed below, DHS finds that prepromulgation notice and comment for this rule would be impracticable, unnecessary, and contrary to the public interest.

Although Congress provided DHS with twelve months (now eighteen months under the extended transition date) to conduct and conclude the rulemaking actions necessary to implement the requirements of the CNRA, this timeframe is a relatively short timeframe to conduct a thorough review of the CNMI's immigration system and develop the complex regulatory scheme necessary to ensure a smooth transition of the CNMI to the U.S. federal immigration system and thus avoid potential adverse impacts on the CNMI economy and aliens currently residing lawfully in the CNMI. Further, in developing these regulations, DHS required sufficient time to engage in the necessary consultations with the CNMI government, Departments of State and Interior and other required stakeholders.

Under the APA, an agency is authorized to forego notice and comment in emergency situations, or where ``the delay created by the notice and comment requirements would result in serious damage to important interests.'' Woods Psychiatric Institute v. United States, 20 Cl. Ct. 324, 333 (Cl. Ct. 1990) aff'd 925 F.2d 1454 (Fed. Cir. 1991); also National Fed'n of Fed. Employees v. National Treasury Employees Union, 671 F.2d 607, 611 (D.C. Cir. 1982). ``[W]hen there is a lack of specific and immediate guidance
[[Page 55101]]
from the agency that would create confusion, economic harm, and disruption, not only to the participants of the program, who are forced to rely on antiquated standards, but would also extend to consumers in general, the good cause exception is a proper solution to ameliorate this expected harm.'' Woods, 20 Cl. Ct. at 333. Under the CNRA, the transition will begin on November 28, 2009, even if regulations to guide the CNMI are not yet in place. Thus, the failure to have an effective interim regulation in place by the beginning of the transition period would serve only to harm the CNMI and aliens residing in the CNMI following the transition. This would have an adverse impact on the CNMI economy in direct contrast to congressional intent under the CNRA and would be contrary to an important public interest.

Although DHS finds that good cause exists under 5 U.S.C. 553(b) to issue this rule as an interim rule, DHS nevertheless invites written comments on this interim rule and will consider those comments in the development of a final rule in this action.

B. Executive Order 12866

This rulemaking is not considered ``economically significant'' under Executive Order 12866 because it will not result in an annual effect on the economy of $100 million or more in any one year. However, because this rule raises novel policy issues, it is considered significant and has been reviewed by the Office of Management and Budget (OMB) under this Order. A summary of the economic impacts of this rule are presented below. For further details regarding this analysis, please refer to the complete Regulatory Assessment that has been placed in the public docket for this rulemaking.

In this analysis, we estimate the incremental costs to society, including both the CNMI and the United States, of the rule. Given the requisite reduction in the number of grants of CW status (to zero) by the end of the transition period, the most significant economic impact of the rule may result from a decrease in available foreign labor. However, we cannot reliably measure this impact for two primary reasons: (1) DHS has yet to develop a schedule for allocating and reducing the number of grants of CW status, and (2) economic models with which to estimate this impact are largely absent or cannot be developed, given the general lack of CNMI economic and production data and the changing conditions of the CNMI economy (due to changes in the two primary industries in the CNMI: Garment manufacturing and tourism, newly imposed minimum wage requirements, and the CNMI government's fiscal condition). Furthermore, whether the U.S. Department of Labor (DOL) will exercise its authority to extend the transition period beyond 2014 is unknown at this time.

DHS notes that despite these limitations and for purposes of illustration only, the U.S. Government Accountability Office (GAO) in a recent report has simulated a range of possible impacts on the CNMI economy (i.e., Gross Domestic Product) given varying rates of reduction in the number of visas for foreign workers and decisions made by DOL with respect to extending the transition period (see GAO08791, August 2008). We do not make any attempt to recreate, modify, or substantiate the GAO analysis in this report.

As a result, we have calculated the estimable incremental direct costs resulting from changes in the fees imposed for the visas required by the rule. Because of the data limitations discussed above, we qualitatively discuss the incremental effect of these costs on overall production and government revenue in the CNMI.

The analysis focuses solely on impacts likely to be incurred during the transition period beginning November 28, 2009, and ending December 31, 2014. There are four key assumptions that shape the framework and methodology of our cost analysis:

1. The number of grants of CW status available during the transition period ending December 31, 2014, will remain constant at 22,417 visas per year. We make this assumption because (1) DHS and USCIS have not yet established a schedule for allocating and reducing the number of grants of CW status; and (2) DOL has not yet decided whether or not to extend the transition period beyond 2014. We again note that GAO report 08791 contains more information regarding possible impacts on CNMI GDP given varying rates of reduction in the number of CW visas for foreign workers and DOL with respect to extending the transition period.

2. The starting cap of 22,417 grants of CW status is sufficient to accommodate the number of foreign workers likely to require such status in 2009. We estimate that approximately 14,543 foreign workers (13,543 instatus and 1,000 outofstatus who may be brought into lawful status under CNMI law) will be granted CW status in 2009. This number is based on the total number of foreign workers present in the CNMI as of August 2008 (19,083), as reported by the CNMI government, after subtracting out: The number of garment factory workers assumed to have returned to their home countries since that time (1,500); the number of foreign workers eligible for visa classifications under the INA (2,090); and the number of foreign workers ineligible for a grant of CW status (950 private domestic household workers and other ineligible workers).

3. The number of jobs currently held by foreign workers will not change during the transition period. We assume that the number of jobs currently held by foreign workers represents the future demand for foreign workers, or the number of jobs available for such workers. We make this assumption because CNMI's economic conditions are changing, and we lack the data to definitively predict the future state of the CNMI economy and its resulting impact on the labor market for foreign workers. We also do not know the rate at which resident workers would replace foreign workers.

4. The current number of outofstatus foreign workers is 1,000. The CNMI government estimates that 1,000 outofstatus foreign workers were present in the CNMI as of August 2008. The CNMI government's established cap of 22,417 CNMI foreign work permits is sufficient to allow employers to bring all of these workers into lawful status prior to the beginning of the transition period.

Collectively, these assumptions result in a scenario where no shortage of labor is anticipated. Therefore, this analysis focuses on estimating the change in costs associated with obtaining status for foreign workers from USCIS instead of from the CNMI government. However, it is also possible that annual reductions in the number of grants of CW status could result in a shortage of labor, adversely affecting the CNMI economy. As previously described, DHS will assess and reduce the number of grants of CW1 status annually based, in part, on the economic conditions in the CNMI, consultation with the government of the CNMI and other Federal government agencies, and employment opportunities available for the resident workforce. Consequently, we are unable to determine conclusively at this time whether a shortage of labor will take place during the transition period.

These assumptions are uncertain. Depending on how DHS reduces the number of grants of CW status during the transition period, if the CNMI economy experiences a surge in the demand for the type of foreign labor that is ineligible for visa classifications under the INA and exceeds the CNMI status cap, or if the number of outofstatus foreign workers has been underestimated by the CNMI
[[Page 55102]]
government, the rule could have negative impacts, perhaps significant, on the CNMI economy. The absence of a defined schedule for reducing the CW status cap, combined with the general lack of CNMI economic and production data and changing conditions of the CNMI economy, preclude a reliable analysis of alternative scenarios exploring these impacts in depth.

In our analysis, DHS first estimates the current and future baseline demand for foreign workers in the absence of the rule. In this baseline analysis, we consider the prevailing economic conditions of the CNMI to estimate the future demand for foreign workers and the total number of foreign work permits that would be issued under CNMI labor law absent the rule. Next, we characterize the number and type of CW status grants and nonimmigrant worker visas available under the INA that would be issued as a result of the rule. We consider the number of affected businesses and foreign workers as well as the foreign workers' work and professional qualifications, eligibility based on employer or occupation, and current status in the CNMI. We then estimate the component costs that CNMI employers would incur to apply for and obtain the requisite work permits (baseline regulatory environment) and CW status for foreign workers (rule). We then combine this cost information with our estimates of the number of grants of CW status that would be issued to calculate the incremental direct costs of the rule. Finally, we discuss qualitatively the potential impact of changes in labor costs on the CNMI economy and the distributive effect of the rule on the revenues of the CNMI government.

We do not consider in our analysis separate costs to the CNMI or the U.S. Federal government to administer the current CNMI permit program and this rule, respectively. We assume that the fees associated with applying for and obtaining the requisite permits and visas account for the cost to each respective government of adjudicating petitions and providing the relevant documentation.

As of November 28, 2009, the beginning of the transition period and the implementation date for this regulation, we estimate that 17,583 foreign workers and 1,176 businesses in the CNMI will be subject to the rule. Based on the available data, we estimate that approximately 2,090 of these workers may qualify for a nonimmigrant work visa available under the INA, and at least 950 private domestic household and other ineligible workers will not be eligible for CW status, leaving 14,543 foreign workers eligible for CW status. In addition, we estimate that approximately 2,100 spouses and dependent children of foreign workers will apply for admission under a second CW status category.

We consider and evaluate the following four alternatives:

Alternative 1 (the chosen alternative): Only aliens lawfully present in the CNMI may qualify for CW status. An employer petitioner can name more than one worker or ``beneficiary'' on a single Form I 129CW petition if the beneficiaries will be working in the same eligible occupational category, for the same period of time, and in the same location. CW status is valid for a period of 1 year.

Alternative 2: Same as Alternative 1, but an employer petitioner can name only one eligible beneficiary on each petition.

Alternative 3: Same as Alternative 1, but CW status is valid for a period of 2 years.

Alternative 4: Same as Alternative 1, but aliens lawfully present as well as aliens unlawfully present in the CNMI as of the beginning of the transition period (November 28, 2009) may qualify for CW status.

We estimate the incremental costs on an annual basis over the same period of time as the transition period, beginning with the year 2010 (to simplify our cost analysis by estimating the incremental costs on a calendar year basis, we assume the transition period begins 1 month later on January 1, 2010) and ending with the year 2014, in the absence of any extension made by DOL. In addition, we estimate costs for the 20month period prior to the onset of the transition period (May 8, 2008, to December 31, 2009) to account for the incremental costs of issuing CNMI work permits to those foreign workers who are currently outofstatus in the CNMI, thus allowing them to be eligible for CW status or INA visa classifications under Alternatives 1, 2, and 3 of the rule.

The incremental costs represent the change in the cost of obtaining the necessary CW status and INA visas under the rule from the baseline cost of obtaining foreign work permits under the current CNMI system. We estimate that the baseline cost for issuing CNMI work permits to the 16,583 instatus foreign workers presently in the CNMI is about $4.9 million annually. Table 1 summarizes the results of the regulatory analysis.
Table 1Summary of Estimable Incremental Direct Costs of the Rule: Net Permit and Visa Costs Incurred by CNMI Employers (CNMI Businesses and CNMI Government), 2009 Dollars in Millions Year
Alternative May '08
Dec '09 2010 2011 2012 2013 2014 Total Undiscounted
Alternative 1..................... $0.30 $0.12 $3.4 $3.4 $2.6 $3.4 ......... Alternative 2..................... 0.30 5.1 1.6 1.6 2.3 1.6 ......... Alternative 3..................... 0.30 0.12 4.6 3.4 3.8 3.4 ......... Alternative 4..................... 0 0.12 3.4 3.4 2.6 3.4 ......... 3% Discount Rate
Alternative 1..................... $0.30 $0.11 $3.2 $3.1 $2.3 $2.9 $11.2 Alternative 2..................... 0.30 4.9 1.5 1.4 2.1 1.3 11.5 Alternative 3..................... 0.30 0.11 4.3 3.1 3.4 2.9 13.4 Alternative 4..................... 0 0.11 3.2 3.1 2.3 2.9 11.5 7% Discount Rate
Alternative 1..................... $0.30 $0.11 $3.0 $2.8 $2.0 $2.4 $9.8 [[Page 55103]]
Alternative 2..................... 0.30 4.7 1.4 1.3 1.8 1.1 10.6 Alternative 3..................... 0.30 0.11 4.0 2.8 2.9 2.4 11.8 Alternative 4..................... 0 0.11 3.0 2.8 2.0 2.4 10.1 Note: Detail may not sum to total due to independent rounding. These costs do not include the CW educational fee and the H1B visa American Competitiveness and Worker Improvement Act (ACWIA) fee because these fees represent transfer payments under Executive Order 12866 and are redistributed in the economy. Estimated costs for the period prior to the beginning of the transition period (May 2008 through December 2009) are assumed to be largely incurred in 2009; thus, these costs are not discounted to calculate their present value in 2009.

The total present value costs of Alternatives 1, 3, and 4 are projected to range from $9.8 million to $13.4 million depending on the validity period of CW status (1 or 2 years), whether outofstatus aliens present in the CNMI are eligible for CW status, and the discount rate applied. These negative values indicate that society will experience a net cost savings as a result of implementing one of these three alternatives instead of the baseline. These savings are attributable to the flexibility of allowing multiple beneficiaries to be included in a single Form I129CW petition, which is in contrast to the current CNMI permit system that requires an application and fee paid for each employee. The additional costs for applying for and obtaining CW status for spouses and children and INA visas for certain qualified foreign workers do not outweigh the benefits of submitting a single petition for multiple beneficiaries seeking CW status. In comparison to the chosen alternative (Alternative 1), increasing the CW status validity period from 1 year to 2 years (Alternative 3) results in additional cost savings of about 20 percent. Additionally, allowing outofstatus workers eligibility for CW status (Alternative 4) results in additional cost savings of about 3 percent because CNMI employers would not necessarily need to bring outofstatus workers to an in status condition (under CNMI law) prior to the beginning of the transition period.

The total present value costs of Alternative 2 are projected to range from $10.6 million to $11.5 million depending on the discount rate applied. These costs are substantially higher than the costs estimated for the other three alternatives. The positive values represent a net cost to society, which is expected given that this alternative requires a petition for each beneficiary.

The costs presented in Table 1 do not include the statutorily required fee of $150 per beneficiary per year to fund vocational education programs in the CNMI. This fee is to be paid for each beneficiary seeking CW status. The costs also do not include the ACWIA fee required for H1B visa applicants. Although these fees represent a cost to businesses or employer petitioners in the CNMI, we consider these fees as a transfer or redistribution of funds within the CNMI and U.S. economies and not as a component of the net costs of the rule to society. We note that from the perspective of the employers, when these fees are included, Alternatives 1, 3, and 4 are a net overall cost rather than benefit.

Ideally, we would quantify and monetize the benefits of the regulation and compare them to the costs. The intended benefits of the rule include improvements in national and homeland security and protection of human rights. First, implementation of the rule assures that the admission of nonimmigrants to the CNMI is consistent with existing Federal laws and practices intended to secure and control the borders of the United States and its territories. Second, the rule would help protect foreign workers in the CNMI from abuses such as human trafficking and other illicit activity.

Due to limitations in data and the difficulty associated with quantifying national and homeland security improvements, we describe the intended benefits of the regulation qualitatively. Moreover, under the assumptions outlined previously, because three of the four alternatives analyzed, including the chosen alternative (Alternative 1), are projected to result in net cost savings to society, the rule may produce a net overall quantifiable benefit to society. Assuming that the fees collected by the CNMI government in the baseline and by USCIS under each regulatory alternative equal the costs to the CNMI and U.S. Federal governments of administering their respective programs, the results of our analysis imply that the U.S. Federal government can more costeffectively administer the program while also providing improved security benefits.

Notwithstanding the inestimable potential broader impacts of this regulation on the CNMI economy that would result if the availability of foreign labor is affected, the results of our analysis on the incremental societal costs of the associated visa or status fees indicate that Alternative 1 provides the most favorable combination of cost and stringency. While Alternative 2 might be considered more stringent because it requires a petition for each beneficiary, the costs are substantially higher than the other three alternatives. Alternative 3 is expected to achieve more cost savings than Alternative 1, but the 1year status validity period under Alternative 1 facilitates USCIS's effective management of the number of grants of CW status issued at any given time and the statutory reduction on an annual basis to zero by the end of the transition period. Alternative 4 is also expected to achieve more cost savings than Alternative 1, but is considered less stringent because DHS has determined that requiring lawful status in the CNMI as a prerequisite for CW eligibility is the most efficient means to begin the Congressionally mandated drawdown of transitional workers to zero by the end of the transition period. Furthermore, to allow outofstatus workers in the CNMI to obtain CW status would encourage noncompliance with CNMI immigration law during the timeframe before the transition period effective date by removing the incentive for such workers with lawful status to maintain or reacquire such lawful status under CNMI law prior to the transition.

DHS and USCIS welcome comments on this analysis and the regulatory alternatives considered.

C. Impacts to Small Entities

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601612, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104121), requires Federal agencies
[[Page 55104]]
to consider the potential impact of regulations on small businesses, small governmental jurisdictions, and small organizations during the development of their rules. When an agency invokes the good cause exception under the Administrative Procedure Act (APA) to make changes effective through an interim final rule, the RFA does not require an agency to prepare a regulatory flexibility analysis. This rule makes changes for which notice and comment are not necessary, and, accordingly, DHS is not required to prepare a regulatory flexibility analysis.

FOR FURTHER INFORMATION CONTACT

Paola Rodriguez Hale, U.S. Citizenship and Immigration Services, Department of Homeland Security, 20 Massachusetts Avenue, NW., 2nd Floor, Washington, DC 205292060 telephone (202) 2721505.