E-2 Nonimmigrant Status for Aliens in the Commonwealth of the Northern Mariana Islands With Long-Term Investor Status, 46938-46951 [E9-21967]

Agencies

• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 74, Number 176 (Monday, September 14, 2009)]
[Proposed Rules]
[Pages 46938-46951]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21967]


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DEPARTMENT OF HOMELAND SECURITY

8 CFR Parts 103, 214 and 274a

[CIS No. 2758-08; DHS Docket No. USCIS-2008-0035]
RIN 1615-AB75


E-2 Nonimmigrant Status for Aliens in the Commonwealth of the 
Northern Mariana Islands With Long-Term Investor Status

AGENCY: U.S. Citizenship and Immigration Services, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Homeland Security (DHS) is proposing to 
amend its regulations governing E-2 nonimmigrant treaty investors to 
establish procedures for classifying long-term investors in the 
Commonwealth of the Northern Mariana Islands (CNMI) as E-2 
nonimmigrants. This proposed rule implements the CNMI nonimmigrant 
investor visa provisions of the Consolidated Natural Resources Act of 
2008 extending the immigration laws of the United States to the CNMI.

DATES: Written comments must be submitted on or before October 14, 
2009.

ADDRESSES: You may submit comments, identified by DHS Docket No. USCIS-
2008-0035 by one of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: You may submit comments directly to USCIS by e-
mail at

[[Page 46939]]

rfs.regs@dhs.gov. Include DHS Docket No. USCIS-2008-0035 in the subject 
line of the message.
     Mail: Chief, Regulatory Management Division, U.S. 
Citizenship and Immigration Services, Department of Homeland Security, 
111 Massachusetts Avenue, NW., Suite 3008, Washington, DC 20529. To 
ensure proper handling, please reference DHS Docket No. USCIS-2008-0035 
on your correspondence. This mailing address may be used for paper, 
disk, or CD-ROM submissions.
     Hand Delivery/Courier: U.S. Citizenship and Immigration 
Services, Department of Homeland Security, 111 Massachusetts Avenue, 
NW., Suite 3008, Washington, DC 20529. Contact telephone number is 
(202) 272-8377.

FOR FURTHER INFORMATION CONTACT: Steven W. Viger, Office of Policy & 
Strategy, U.S. Citizenship and Immigration Services, Department of 
Homeland Security, 20 Massachusetts Avenue, NW., 2nd Floor, Washington, 
DC 20529-2140 telephone (202) 272-1470.

SUPPLEMENTARY INFORMATION:

I. Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of this 
proposed rule. The Department of Homeland Security (DHS) and U.S. 
Citizenship and Immigration Services (USCIS) also invite comments that 
relate to the economic, environmental, or federalism effects that might 
result from this proposed rule. Comments that will provide the most 
assistance to DHS will reference a specific portion of the proposed 
rule, explain the reason for any recommended change, and include data, 
information, or authority that support such recommended change.
    Instructions: All submissions received must include the agency name 
and DHS Docket No. USCIS-2008-0035. All comments received will be 
posted without change to https://www.regulations.gov, including any 
personal information provided.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov. Submitted comments 
may also be inspected at the Regulatory Management Division, U.S. 
Citizenship and Immigration Services, Department of Homeland Security, 
111 Massachusetts Avenue, NW., Suite 3008, Washington, DC 20529-2140.

II. Background

    The Commonwealth of the Northern Mariana Islands (CNMI) is a U.S. 
territory located in the western Pacific that has been subject to most 
U.S. laws for many years. However, the CNMI has administered its own 
immigration system under the terms of its 1976 covenant with the United 
States. See A Joint Resolution To Approve the Covenant To Establish a 
Commonwealth of the Northern Mariana Islands in Political Union with 
the United States of America, (the Covenant Act), Public Law 94-241, 
sec. 1, 90 Stat. 263, 48 U.S.C. 1801 note (1976). On May 8, 2008, 
former President Bush signed into law the Consolidated Natural 
Resources Act of 2008 (CNRA). See Public Law 110-229, Title VII, 122 
Stat. 754, 853 (2008). Title VII of the CNRA extends U.S. immigration 
laws to the CNMI with transition provisions unique to the CNMI. The 
stated purpose of the CNRA is to ensure effective border control 
procedures, to properly address national security and homeland security 
concerns by extending U.S. immigration law to the CNMI (phasing-out the 
CNMI's nonresident contract worker program while minimizing to the 
greatest extent practicable the potential adverse economic and fiscal 
effects of that phase-out), and to maximize the CNMI's potential for 
future economic and business growth.
    Since 1978, the CNMI has admitted a substantial number of foreign 
workers from China, the Philippines, and other countries through an 
immigration system that provides a permit program for foreigners 
entering the CNMI, such as visitors, investors, and workers. In fact, 
foreign workers under this program represent a majority of the CNMI 
labor force. Such workers outnumber U.S. citizens and other local 
residents in most industries central to the CNMI's economy. Currently, 
the CNMI faces serious economic challenges, including a substantial 
decline in the garment industry and fluctuation in the tourism 
industry.\1\
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    \1\ GAO, Commonwealth of the Northern Mariana Islands: Pending 
Legislation Would Apply U.S. Immigration Law to the CNMI with a 
Transition Period, GAO-08-466 (Washington, DC: Mar. 18, 2008); GAO, 
U.S. Insular Areas: Economic, Fiscal, and Accountability Challenges, 
GAO-07-119 (Washington, DC: Dec. 12, 2006); and GAO, Commonwealth of 
the Northern Mariana Islands: Serious Economic, Fiscal, and 
Accountability Challenges, GAO-07-746T (Washington, DC: Apr. 19, 
2007).
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    Title VII of the CNRA became effective approximately one year after 
the date of enactment, subject to certain transition provisions unique 
to the CNMI. On March 31, 2009, DHS announced that the Secretary of 
Homeland Security, in her discretion under the CNRA, had extended the 
effective date of the transition program from June 1, 2009 (the first 
day of the first full month that commences one year from the date of 
enactment of the CNRA) to November 28, 2009. https://www.dhs.gov/ynews/releases/pr_1238533954343.shtm. The transition period concludes on 
December 31, 2014. The law also contains several CNMI-specific 
provisions affecting foreign workers and investors during the 
transition period. These temporary provisions are intended to provide 
for an orderly transition from the CNMI permit system to the INA and to 
mitigate potential harm to the CNMI economy before these foreign 
workers and investors are required to obtain U.S. immigrant or 
nonimmigrant visa classifications. See Section 6(d)(1) or (2) of Public 
Law 94-241, as added by sec. 702(a) of Public Law 110-229 (cited herein 
as ``Sec.  702 of the CNRA'').
    Among the CNMI-specific provisions applicable during the transition 
period is a provision authorizing the Secretary of Homeland Security to 
classify an alien foreign investor in the CNMI as a CNMI-only ``E-2'' 
nonimmigrant investor under section 101(a)(15)(E)(ii) of the INA, 8 
U.S.C. 1101(a)(15)(E)(ii). This status is provided upon application of 
the alien and notwithstanding the treaty requirements otherwise 
applicable. See Sec.  702 of the CNRA. Eligible investors are those 
who:
     Were admitted to the CNMI in long-term investor status 
under CNMI immigration law before the transition program effective 
date;
     Have continuously maintained residence in the CNMI under 
long-term investor status;
     Are otherwise admissible to the United States under the 
INA; and
     Maintain the investment(s) that formed the basis for the 
CNMI long-term investor status.

DHS is required to promulgate implementing regulations no later than 60 
days before the transition program effective date. See id.
    Under the CNMI's current foreign investor programs, foreign 
investors can apply for the following entry permits:
     Foreign Investor Entry Permit, 4 N. Mar. I. Code section 
5951 et seq. (2007), 5 N. Mar. I. Admin. Code section 5-40.3-240(g) 
(2009);
     Retiree Investor Entry Permit, 4 N. Mar. I. Code section 
50101 et seq., 5 N. Mar. I. Admin. Code section 5-40.3-240(o) (2009); 
and
     Long-Term Business Entry Permit, 4 N. Mar. I. Code section 
5941 et seq., 5 N. Mar. I. Admin. Code section 5-40.3-240(n) (2009).
    Foreign investors may also obtain short-term or regular-term 
business

[[Page 46940]]

entry permits, may be authorized to enter the CNMI under its permit 
waiver program, or may invest without entering the CNMI.
    The CNMI currently has a Foreign Investor Entry Permit available 
for an indefinite period of time to individuals who submit evidence of 
good moral character and who meet all of the requirements for the 
foreign investment certificate. These foreign investors must maintain 
an investment of at least $250,000 by an individual in a single 
investment or $100,000 per person in an aggregate investment exceeding 
$2 million. CNMI regulations for foreign investors also require a 
$100,000 security deposit. See 4 N. Mar. I. Code section 5951 et seq.; 
see also 5 N. Mar. I. Admin. Code section 5-40.3-240(g) (2009).
    The CNMI also offers a Retiree Investor Entry Permit requiring a 
minimum investment of $100,000 in residential property on Saipan or 
$75,000 on the islands of Tinian or Rota by an applicant 55 years or 
older. Previously, the CNMI issued a different Retiree Investor Entry 
Permit to foreign investors over the age of 55 years; the previous 
certificate was issued for an unlimited term if the investor had 
invested and maintained a minimum of $150,000 in an approved residence 
to live in the CNMI.
    The CNMI also has a Two-Year Foreign Retirees Investment 
Certification that is limited to Japanese nationals only, which allows 
retirees over the age of 55 years to live in the CNMI for a period not 
to exceed two years, during which each applicant makes a minimum 
investment in a residence equivalent to $1,500 in monthly lease or 
rent. This certificate is not renewable. See 4 N. Mar. I. Code 50101 et 
seq.
    In addition, the CNMI's Long-Term Business Entry Permit for holders 
of long-term business certificates is valid for two years and requires 
an investment of at least $150,000 in a public organization or at least 
$250,000 in a private investment. Each applicant alien also must 
provide the CNMI with a security deposit of $25,000. See 4 N. Mar. I. 
Code section 5941 et seq., see also 5 N. Mar. I. Admin. Code section 5-
40.3-240(n) (2009)
    Under U.S. immigration law, foreign investors may enter the United 
States as nonimmigrants within the treaty investor classification with 
an ``E-2'' visa, or may change to E-2 treaty investor nonimmigrant 
status from within the United States. See INA sec. 101(a)(15)(E)(ii), 8 
U.S.C. 1101(a)(15)(E)(ii); see also 8 CFR 214.2(e). To qualify for E-2 
treaty investor status, treaty investors must invest a substantial 
amount of capital in a bona fide enterprise in the United States, must 
be seeking entry solely to develop and direct the enterprise, and must 
intend to depart the United States when their treaty investor status 
ends. Treaty investors must be nationals of a country with which the 
United States has a treaty of friendship, commerce, or navigation and 
must be entering the United States pursuant to treaty provisions.
    This rule proposes to establish procedures for foreign investors in 
the CNMI to obtain nonimmigrant status within the E-2 treaty investor 
classification, in accordance with the CNRA. USCIS refers to this 
special group of E-2 treaty investors as ``E-2 CNMI Investors.'' With 
E-2 CNMI Investor nonimmigrant status, eligible CNMI investors would be 
able to remain in the CNMI for the duration of the transition period as 
investors under E-2 CNMI status, and to exit and enter the CNMI with 
valid E-2 CNMI Investor visas. The proposed rule is intended to provide 
a smooth transition for existing CNMI investors and to mitigate 
potential adverse consequences to the CNMI economy if the current 
investments could not be maintained as a basis for immigration status 
during the transition period because of the different provisions of the 
INA. At the end of the transition period, E-2 CNMI Investors and 
qualifying spouses and children must qualify for and obtain an 
appropriate immigrant or nonimmigrant status under the INA in order to 
remain in the CNMI or to enter the CNMI after a departure.

III. Proposed E-2 CNMI Investor Program

A. Eligibility Requirements

    The proposed rule incorporates into DHS's immigration regulations 
the statutory eligibility requirements for E-2 CNMI Investor 
nonimmigrant status. See proposed 8 CFR 214.2(e)(23)(i). In order to be 
eligible for E-2 CNMI Investor nonimmigrant status, USCIS proposes to 
require that an alien must:
     Have been admitted to the CNMI in ``long term investor'' 
status before the transition program effective date;
     Have continuously maintained residence in long term 
investor status;
     Maintain an investment or investments forming the basis 
for such long term investment status; and
     Be otherwise admissible to the United States under the 
INA.
1. CNMI Admission
    To qualify for E-2 CNMI Investor status, an alien must have been 
lawfully admitted to the CNMI under one of the eligible CNMI long-term 
investor classifications before the transition program effective date, 
now November 28, 2009. This proposed rule would not require the status 
to have been granted before the enactment date of the CNRA (May 8, 
2008), but does provide that the eligible CNMI long-term investor 
classifications shall be only those in effect as of May 8, 2008. Such a 
limitation is necessary to create a practicable baseline for this rule 
that conforms with Congress' intent to provide an orderly transition 
period. It must be noted that the CNMI re-codified its regulations 
regarding immigration effective on January 1, 2009, but the substantive 
classifications based upon investment generally remained the same as 
those in effect as of May 8, 2008. See 5 N. Mar. I. Admin. Code section 
5-40.0 et seq. (2009); see also 20 N. Mar. I. Admin Code section 20-
30.2 et seq.; 4 N. Mar. I. Code section 5941 et seq.; 4 N. Mar. I. Code 
section 5951 et seq.; 4 N. Mar. I. Code section 50101 et seq.
    Aliens who have not been admitted as eligible CNMI investors prior 
to the beginning of the transition period are not eligible for 
classification as E-2 CNMI Investors. Aliens who have investor 
applications pending with the CNMI as of the transition program 
effective date, or who have approved investor applications but have not 
been admitted to the CNMI as of the transition program effective date, 
will not be eligible for E-2 CNMI Investor status.
2. Continuous Maintenance of Residence in the CNMI
    This rule proposes to define continuous maintenance of residence in 
the CNMI to mean residence in the CNMI from the date that an alien 
obtained his or her CNMI status through the future date on which USCIS 
grants the new E-2 CNMI Investor status. However, continuous residence 
does not mean continuous physical presence; thus, an alien would not 
need to have remained in the CNMI for the entire period in order to be 
deemed to have maintained continuous residence. ``Residence'' is 
defined by section 101(a)(33) of the INA (8 U.S.C. 1101(a)(33)) as 
``the place of general abode; the place of general abode of a person 
means his or her principal actual dwelling place in fact, without 
regard to intent.'' This statutory definition is incorporated into 
DHS's immigration regulations by 8 CFR 1.1(a). The proposed rule 
provides that an alien must have been physically present in the CNMI 
during at least half the time for which continuous residence is

[[Page 46941]]

required. In addition, any single absence of over one year will break 
continuity of residence, as will any single absence of more than six 
months, unless the subject alien is able to demonstrate that he or she 
did not abandon his or her residence by such absence. See, e.g., 8 CFR 
section 316.5(c).
3. Maintenance of Investment in the CNMI
    To establish that an alien is maintaining the investment or 
investments that formed the basis for admission to the CNMI, the 
proposed rule would require each subject alien to provide specific 
evidence demonstrating that the investor is in compliance with the 
terms upon which the CNMI investor certificate was issued. All 
documentation previously submitted in each investor application to the 
CNMI government should also be submitted as part of E-2 CNMI petitions 
to USCIS. The rule proposes to require the following documentary 
evidence for submission with each E-2 CNMI Investor application, as 
applicable:
     Evidence that the applicant has invested capital in the 
CNMI. Such evidence may include bank statements showing amounts 
deposited in CNMI business accounts, invoices, receipts or contracts 
for assets purchased, stock purchase transaction records, loan or other 
borrowing agreements, land leases, financial statements, business gross 
tax receipts, and any other agreements supporting the application.
     Evidence that the applicant has invested the minimum 
amount required. Such evidence may include evidence of assets that have 
been purchased for use in the enterprise, evidence of property 
transferred from abroad for use in the enterprise, evidence of monies 
transferred or committed to be transferred to the new or existing 
enterprise in exchange for shares of stock, any loan or mortgage, 
promissory note, security agreement or other evidence of borrowing 
which is secured by assets of the applicant.
     A comprehensive business plan for each new enterprise.
     Articles of incorporation, by-laws, partnership 
agreements, joint venture agreements, corporate minutes and annual 
reports, affidavits, declarations or certifications of paid-in capital.
     Current business licenses.
     Foreign business registration records, recent tax returns 
of any kind, and evidence of other sources of capital.
     A listing of all resident and nonresident employees.
     A listing of all holders of business certificates for the 
business establishment.
     A listing of all corporations in which the applicant has a 
controlling interest.
     For the holder of a Certificate of Foreign Investment, 
copies of annual reports of investment activities in the CNMI showing 
whether the certificate holder is under continuing compliance with the 
standards of issuance. Each report must be accompanied by an annual 
financial audit report performed by an independent certified public 
accountant.
     For Retiree Investors:

--Proof that the alien applicant has an interest in property in the 
CNMI and the value of that property interest. Proof of the value of the 
property could be supported by a lease agreement for the property or an 
appraisal of the value of the property.
--Proof of the value of the improvements to the property, such as 
receipts or invoices regarding the costs of construction or the amount 
paid for a preexisting structure, or an appraisal of a structure.
--Any other evidence supporting proof of investment in a residence and 
the value of the property interest.
4. Categories of CNMI Foreign Investors
    After consideration of CNMI law and consultation with the CNMI 
government, DHS is proposing to limit eligibility for E-2 CNMI Investor 
status to the following categories of long-term foreign investors in 
the CNMI.

     Long-Term business investor. An alien who has been 
lawfully admitted to the CNMI under a Long-Term Business Entry Permit 
and has been issued a Long-Term Business Certificate by CNMI for a 
period of two years on the basis of the alien's $150,000 (minimum) 
investment in the CNMI.
     Foreign investor. An alien who has been lawfully admitted 
to the CNMI as a Foreign Investor with a Foreign Investment Certificate 
on the basis of the alien's investment of either $100,000 (minimum) per 
individual in an aggregate investment in excess of $2,000,000, or 
$250,000 (minimum) in a single investment.
     Retiree investor. An alien who has been lawfully admitted 
to the CNMI on the basis of one of the following Foreign Retirees 
Investment Certificates issued by the CNMI:

--Foreign Retirees Investment Certification. This certificate is issued 
to an alien retiree over the age of 55 years who has an interest in a 
residential property either (1) on Saipan in which the alien has 
invested a minimum of $100,000, or (2) on Tinian or Rota in which the 
alien has invested a minimum of $75,000.
--Foreign Retiree Investment Certificate. This certificate was issued 
to an alien retiree over the age of 55 years who had invested and 
maintained a minimum of $150,000 in an approved residence to live in 
the CNMI.
    In creating the E-2 CNMI Investor status, the CNRA refers to 
admission in ``long-term investor'' status under the laws of the CNMI, 
but does not define the term. See section 6(c)(1) of the Covenant Act. 
The admission categories under CNMI law that could potentially be 
referenced by the CNRA include the three categories listed above (Long-
Term Business Investor, Foreign Investor, and Retiree Investor), a sub-
category of the Retiree Investor specifically limited to Japanese 
retirees, discussed below, and Short- and Regular-Term Business Entry 
Permits. In order to meaningfully construe both ``long-term'' and 
``investor,'' only CNMI categories that mandated a fixed minimum 
threshold amount of investment and are renewable over a period of 
multiple years were considered to be ``long-term investor'' statuses.
    While the Retiree Investor category may not meet the current 
regulatory definition of investment for E-2 purposes (at 8 CFR 
214.2(e)(12)), DHS believes that the Retiree Investor category falls 
within the meaning of ``long-term investor'' as it is used in the CNRA. 
USCIS understands that land ownership limitations in the CNMI generally 
prohibit alien ownership of real property, and that the maximum term of 
an interest in real property is a 55-year lease. For this reason, and 
consistent with the intent of sections 701(b) and sections 702(6)(c) 
and (6)(d) of the CNRA, USCIS has determined that a lease of 
residential property, which normally would not be considered 
``investment,'' may serve as the basis for E-2 CNMI Investor status as 
long as the qualifying investment amount under CNMI law has been placed 
in the property through an upfront commitment to a long-term lease or 
improvements to the property. Therefore, USCIS has included this 
category in the proposed rule. Additionally, including the Retiree 
Investor is consistent with USCIS' objective to provide a smooth 
transition for current CNMI investors and to mitigate potential 
economic harm to the CNMI.
    USCIS finds that CNMI status obtained through the two-year program 
for Japanese retirees requiring only monthly rental payments does not 
reasonably meet the statutory requirement of long-term investment

[[Page 46942]]

with respect either to its length, as the permit is non-renewable, or 
the character of the investment, and is thus not included in the E-2 
CNMI Investor program proposed by this rule. USCIS notes that either 
the visa waiver program or B-1/B-2 visas may be available to such 
Japanese retirees.
    Aliens lawfully admitted to the CNMI under any other categories, 
including the Short-Term Business Entry Permit or the Regular-Term 
Business Entry Permit are not included in this proposed rule as 
eligible to apply for E-2 CNMI Investor status. Aliens lawfully 
admitted under the Short-Term Business Entry Permit or the Regular-Term 
Business Entry Permit categories are not included because such permits 
are not long-term, nor do they require investments. These aliens, 
however, would be eligible to apply for other nonimmigrant 
classifications, such as the B-1 business visitor classification.

B. Application Procedures

    In keeping with the language of the CNRA, which discusses an 
alien's application for a nonimmigrant investor visa, the rule proposes 
to require that those CNMI long-term investors seeking E-2 CNMI 
Investor status file applications requesting such status with USCIS, 
and pay the appropriate fees to USCIS, in accordance with instructions 
on the application form. USCIS will designate the form as Form I-129, 
``Petitioner for a Nonimmigrant Worker,'' with Supplement E as the 
application form for requesting E-2 CNMI Investor status. The current 
fee for Form I-129 is $320.
1. Application Period
    This rule proposes a limited application period. Applicants would 
be required to apply for E-2 CNMI Investor status either: (1) Before 
the start of the transition period; or (2) within the first two years 
following the start of the transition period. Therefore, USCIS would 
reject an application filed after the two-year period. Note, that while 
the rule would permit applications to be filed before the transition 
program effective date, USCIS would not be permitted to grant E-2 CNMI 
Investor status before that date. However, if USCIS completes its 
adjudication of an early-filed application prior to the transition 
program effective date, a consulate would be able to issue an E-2 CNMI 
Investor visa so that the subject alien would be able to seek admission 
to the CNMI as an E-2 CNMI Investor on or after the transition program 
effective date.
2. Physical Presence
    Because E-2 CNMI Investor nonimmigrant status is a CNMI-only 
status, the rule proposes that each alien must be present in the CNMI 
or outside the United States at the time his or her application is 
filed with USCIS. Upon approval, an alien outside the CNMI would need 
to obtain an E-2 CNMI Investor nonimmigrant visa at a United States 
consulate abroad to be admitted to the CNMI as an E-2 CNMI Investor on 
or after the transition program effective date.
3. Fee Waiver
    Waiver of the current $320 fee for filing Form I-129 is normally 
not permitted under the applicable regulations at 8 CFR 103.7. In 
recognition of adverse economic conditions in the CNMI as compared to 
many other U.S. places, and because of the inclusion of some retirees 
in this new nonimmigrant category and the likely participation by a 
number of proprietors of small businesses with CNMI Long-Term Business 
Entry Permits, the proposed rule permits waiver of the fee in cases 
where the subject alien is able to substantiate that he or she is 
unable to pay the prescribed fee, under the standards provided in 8 CFR 
103.7(c)(1). Currently there is no fee-waiver provision for Form I-129 
and this rule is proposing a specific waiver provision limited to 
investors under this rule. See proposed 8 CFR 103.7(c)(5)(iv). While 
such a provision may seem inconsistent with a benefit based upon a 
monetary investment, the CNMI E-2 Investor program proposed in this 
rule differs from the current E-2 program in that retiree investors are 
eligible. The waiver provision is limited to those who can make a 
showing of inability to pay. USCIS believes that some CNMI E-2 Investor 
eligible retiree investors may have invested the majority of their 
savings in their investment residences, may be living on fixed incomes, 
and may qualify for waivers. Applicants in the CNMI will also have to 
submit the $80 biometric service fee; this fee is waivable for 
inability to pay under current USCIS regulations. See 8 CFR 103.7(b)(1) 
(discussing the current biometric service fee); proposed 8 CFR 
214.2(e)(23)(viii) (discussing ability to seek waiver of biometric 
service fee).
4. Discretionary Benefit and Appeal Rights
    Adjudication of the application for E-2 CNMI Investor nonimmigrant 
status is a discretionary determination by USCIS. USCIS may deny an 
application for failure of the applicant to demonstrate eligibility or 
for other good cause. As with other adjudications of Form I-129, denial 
of an E-2 CNMI Investor application may be appealed to the USCIS 
Administrative Appeals Office for agency review of the denial.
5. Spouses and Children
    USCIS proposes to extend E-2 CNMI Investor status to the spouse and 
children of each principal E-2 CNMI Investor if they accompany or 
follow-to-join the principal alien. The nationality of these dependents 
would not be material to their classification as dependents of E-2 CNMI 
Investors. Such spouse and dependents, however, must be otherwise 
admissible to the United States under the INA to qualify for the 
status. The rule proposes to require that those CNMI long-term 
investors seeking E-2 CNMI Investor status file applications requesting 
such status with USCIS in accordance with instructions on the 
application form. See proposed 8 CFR 214.2(e)(23)(v). In accordance 
with instructions on the application form, E-2 CNMI investors whose 
spouses and children seek to accompany or follow-to-join him or her 
will utilize Form I-539, ``Application to Extend/Change Nonimmigrant 
Status'' as the application form for requesting E-2 CNMI Investor 
status for dependants. The current fee for Form I-539 is $300.

C. Work Authorization

    The proposed rule would amend 8 CFR 214.2(e) and 274a.12 to provide 
for the work authorization of certain E-2 CNMI Investors and their 
spouses. Work authorization is not permitted for children of E-2 CNMI 
Investors. The E-2 CNMI Investor is authorized to work for a specific 
employer incident to status to the extent that such work authorization 
is for a qualifying entity that was the basis for the long-term 
investor status under CNMI law upon which the grant of E-2 CNMI 
Investor status is based. For example, an authorized investment in a 
business operated by the investor in the CNMI under a Long-Term 
Business Permit granted prior to the transition program effective date 
will permit the investor to operate that business as an E-2 CNMI 
Investor. E-2 CNMI Investors obtaining status under a Retiree 
Investment Permit are not work-authorized, since, by definition, coming 
to the CNMI as a ``retiree'' is inconsistent with obtaining employment 
there.
    After each spouse of E-2 CNMI Investors lawfully obtains E-2 CNMI 
Investor status, and upon lawful admission to the CNMI, each spouse may 
request employment authorization by filing Form I-765, Application for

[[Page 46943]]

Employment Authorization, with USCIS. However, spouses of E-2 CNMI 
Investors who obtained that status as retirees are not eligible for 
work authorization, for the reason stated above. This is consistent 
with the level of benefits currently afforded under CNMI law, as 
neither retiree investors nor their spouses are permitted to work. 
Employment authorization is inconsistent with being a ``retiree''. DHS 
understands that the spouse of a retiree may not in all cases also be a 
retiree, but notes that retiree spouses may qualify for transition 
worker or other specific work-authorized statuses if eligible. However, 
DHS specifically invites comments on whether work authorization should 
be permitted for spouses of retiree investors.
    All E-2 CNMI Investor principal and spousal employment 
authorization is expressly limited to employment in the CNMI.

D. Changes in the Terms and Conditions of E-2 CNMI Investor Status

    If there are any substantive changes to aliens' compliance with the 
terms and conditions of qualification for E-2 CNMI Investor status, the 
rule proposes to require those aliens to file with USCIS new copies of 
Form I-129 and Supplement E with respect to the changes. An 
unauthorized change of employment to a new employer would constitute a 
failure to maintain status within the meaning of section 
237(a)(1)(C)(i) of the INA, 8 U.S.C. 1227(a)(1)(C)(i).

E. Period of Admission

    This rule proposes to provide an initial admission period of two 
years for aliens with E-2 CNMI Investor status. The spouse and minor 
children accompanying or following-to-join an E-2 CNMI Investor would 
be admitted for the same period that the principal alien is in valid E-
2 CNMI Investor status. If an E-2 CNMI Investor temporarily departs the 
CNMI, the derivative status of the dependent spouse and children would 
not be affected, provided that the familial relationship continues to 
exist and the principal remains eligible for admission as an E-2 CNMI 
Investor.

F. Extensions of Stay

    This proposed rule provides for extensions of E-2 CNMI Investor 
status, until the end of the transition period, in two-year increments, 
which is the same increment permitted for non-CNMI E-2 nonimmigrants. 
To apply for an extension of stay, each E-2 CNMI Investor would be 
required to file with USCIS a new Form I-129 and Supplement E with the 
required evidence and fee. To qualify for an extension of stay, each E-
2 CNMI Investor would be required to demonstrate that he or she:
    (i) Continuously maintained the terms and conditions of E-2 CNMI 
Investor status;
    (ii) Was physically present in the CNMI at the time of filing the 
application for extension of stay; and
    (iii) Did not abandon the request for extension of stay.

G. Travel

    E-2 status provided to long-term CNMI investors is a ``CNMI-only 
nonimmigrant'' status. See section 6(c)(1) of the Covenant Act, as 
added by section 702 of the CNRA. Consistent with this provision, the 
proposed rule provides that a grant of E-2 CNMI investor status is a 
grant of status valid within the CNMI only, and not within the United 
States as a whole. It does not authorize admission or travel to Guam or 
to any other part of the United States. However, it does not bar such 
travel if the alien is otherwise authorized and admissible to the 
United States in another status. For example, an E-2 CNMI Investor who 
wishes to make a tourist or business visit to Guam or another part of 
the United States (including but not limited to transit through the 
Guam airport) may do so if he or she has a B nonimmigrant visa or is 
eligible under an applicable visa waiver program. However, the alien 
may not do so based upon the current E-2 CNMI Investor status, or based 
upon any E-2 CNMI Investor visa.
    The proposed rule provides that travel or attempted travel from the 
CNMI to another part of the United States without the appropriate visa 
or other authorization, or violation of the terms applicable to the 
authorized status, would constitute violation of the E-2 CNMI Investor 
status. For example, if an E-2 CNMI Investor were identified by U.S. 
Customs and Border Protection as seeking to board a plane in Saipan for 
Guam, and the alien lacked a B nonimmigrant visa or other visa (or 
eligibility for a visa waiver) that would authorize the alien to have 
traveled from a foreign place to Guam and to be admitted there, then 
the alien would have failed to comply with the conditions of the E-2 
CNMI Investor status and would be deportable from the CNMI or any other 
U.S. location under section 237(a)(1)(C) of the INA, 8 U.S.C. 
1227(a)(1)(C).
    With respect to travel from the CNMI to a foreign place and return 
to the CNMI, if an E-2 CNMI Investor obtained his or her status from 
USCIS in the CNMI, he or she would need to obtain an E-2 CNMI Investor 
visa from a U.S. embassy or consulate in order to be readmitted to the 
CNMI, regardless of nationality. USCIS approval of E-2 CNMI Investor 
status provides status while present in the CNMI, but does not preclude 
the requirement of a visa for admission to the CNMI.

H. Change of Status to E-2 CNMI Investor Status

    This rule proposes to permit aliens eligible for E-2 CNMI investor 
status on the transition program effective date, but who obtain other 
valid nonimmigrant visa statuses, to apply to change to E-2 CNMI 
Investor status by filing Form I-129 and Supplement E in accordance 
with the current regulations at 8 CFR 214.2(e)(21). However, 
applications for this change in status would have to be filed within 
the two-year filing period for obtaining initial grants of E-2 CNMI 
Investor status. Note that during the transition period, E-2 CNMI 
Investors may apply for changes of status to any other nonimmigrant or 
immigrant visa classifications for which they may qualify.

I. Post-Transition Period

    As previously discussed, E-2 CNMI Investors may maintain status and 
apply for subsequent extensions of this status until the end of the 
transition period. After the transition period, however, the E-2 CNMI 
Investor classification will cease to exist. Absent delay, the 
transition period will end on December 31, 2014. Although the Secretary 
of Labor is authorized under section 702 of the CNRA to extend the 
transition provisions relating to temporary workers in additional 
increments of up to five years each, this authority is limited to 
extension of those provisions relating to temporary workers and not the 
investor provisions. Therefore, the investor provisions will terminate 
on December 31, 2014, regardless of whether the temporary worker 
provisions are extended.

IV. Regulatory Requirements

A. Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Act of 1996. This rule, with its 
impact limited to addressing eligible aliens currently in one of the 
CNMI long term investor classifications, will not result in an annual 
effect on the economy of $100 million or more; a major increase in 
costs or prices; or significant adverse effects on competition, 
employment,

[[Page 46944]]

investment, productivity, innovation, or on the ability of U.S.-based 
companies to compete with foreign-based companies in domestic and 
export markets.

B. Executive Order 12866

    In accordance with Executive Order 12866, USCIS is required to 
prepare an assessment of the benefits and costs anticipated to occur as 
a result of this regulatory action and to provide the assessment to the 
Executive Office of the President, Office of Management and Budget, 
Office of Information and Regulatory Affairs. The analysis below is the 
DHS Economic Analysis as required by the Executive Order.
(1) Background
    The CNMI lies north of Guam, between the Philippines and Japan. S. 
Rep. No. 110-324, at 2 (2008). The United States captured the islands 
of the CNMI in World War II and they became a district of the U.S.-
administered United Nations Trust Territory of the Pacific Islands. Id. 
Under the Covenant through which the CNMI joined the United States in 
1976, the CNMI was exempted from most provisions of U.S. immigration 
laws and allowed to control its own immigration; however, the Covenant 
gave the U.S. Congress the authority to modify that arrangement through 
Federal legislation. Id.
    The United States enacted the CNRA amending the level of control 
the CNMI would have over its immigration system to more closely 
harmonize it with the laws and procedures applicable to other U.S. 
jurisdictions, particularly those designed to ensure that border 
control, national security, and homeland security issues are properly 
addressed. See CNRA Section 701.
(2) Changes Made in This Rule
    In order to reduce the opportunity for fraud and to improve 
homeland security, USCIS is proposing in this rule that foreign 
investors who wish to reside in the CNMI must reapply every two years 
using USCIS Form-129, Petition for a Nonimmigrant Worker. Requiring 
renewal every two years will help USCIS make sure investors have 
maintained their eligibility, update their biometrics, or allow USCIS 
to advise them whether they are potentially eligible for another 
program under the INA that will allow them to stay in legal 
nonimmigrant status after the end of the transition program, currently 
December 31, 2014. The CNRA generally extends Federal control of 
immigration in the CNMI to combat fraud and abuse, and the requirement 
for renewal within this period is consistent with current practice for 
non-CNMI E-2 treaty investor non-immigrants.
    However, USCIS is aware of and sensitive to the potential economic 
impact of new Federal immigration requirements on the CNMI economy, and 
this rule's proposed requirements have been developed with that in 
mind. According to an economic study performed by the Northern Marianas 
College, employment grew in the CNMI by 12.7 percent annually between 
1980 and 1995, because of expansion of the garment and tourism 
sectors.\2\ During that time, the garment and tourism industries 
accounted for 85 percent of the CNMI economy.\3\ Recently, economic 
conditions have changed dramatically for these two CNMI industries. Due 
to changes in trade agreements, the value of CNMI textile exports to 
the United States dropped from $1.1 billion in 1998 to $317 million in 
2007. The number of licensed apparel manufacturers dropped from 34 to 3 
in 2008.\4\ The remaining three garment factories have closed or 
suspended their operations in early 2009.\5\ The CNMI tourism industry 
also has been in decline in recent years. The terrorist attacks on the 
United States on September 11, 2001, the Severe Acute Respiratory 
Syndrome (SARS) epidemic which began in Asia in 2003 and led to the 
death of 774 worldwide, the downturn in many Asian economies, changes 
in airline service, and other concerns have reduced the number of 
tourists traveling to the CNMI from 736,117 in 1996 to 389,345 in 
2007.\6\ Because of the decline of the CNMI economy, USCIS has sought 
to minimize the impact of any additional visa requirements, while 
recognizing that Federal oversight of CNMI immigration is necessary to 
reduce fraud and ensure U.S. homeland security.
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    \2\ Northern Marianas College, Business Development Center, An 
Economic Study of the Commonwealth of the Northern Mariana Islands 
(Saipan, MP: Northern Marianas College 1999).
    \3\ Ibid.
    \4\ CNMI Comprehensive Economic Development Strategic Plan 2009-
2014. CNMI CEDS Commission Updated 1/29/09.
    \5\ See, Walt F. J. Goodridge, ``The Last Garment Factory is 
Closing,'' Saipan Times, January 14, 2009, https://www.saipantribune.com/newsstory.aspx?cat=3&newsID=86872.
    \6\ United States Government Accountability Office, Commonwealth 
of the Northern Mariana Islands Managing Economic Impact of Applying 
U.S. Immigration Law Requires Coordinated Federal Decisions and 
Additional Data (July 2008).
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(3) Alternatives Considered
    USCIS considered a narrow construction for implementation of the 
CNMI-only nonimmigrant investor visa as required by section (6)(c) of 
the Covenant Act, as added by section 702 of the CNRA. Possible 
constructions would have limited the categories of investors under 
current CNMI law who would be permitted to become CNMI E-2 Investors. 
Possible constructions analyzed included limiting which investor-based 
categories under current CNMI law would be permitted to become CNMI E-2 
Investors. Specifically, DHS discussed options wherein only CNMI 
perpetual foreign investors would be permitted, as well as options 
wherein only long-term business permit holders or a combination of only 
perpetual foreign investors and long-term business permit holders would 
be permitted. However, in light of the potential adverse economic 
impact of such limitations and the goal of limiting adverse economic 
impact on the CNMI, such limiting options were not chosen. USCIS chose 
the broadest interpretation possible, whereby long-term business permit 
holders, foreign investors and retiree investors (other than investors 
under a short-term program not believed to qualify under the CNRA) 
would be eligible for CNMI E-2 Investor status, because it believes 
such an interpretation is most in keeping with the mandate to limit 
adverse economic impact.
(4) The Total Cost of This Regulation
(a) Fees
    This proposed regulation will require all foreign investors wishing 
to remain in the CNMI to reapply for investor registration every two 
years using USCIS Form I-129, Petition for a Non-Immigrant Worker. The 
application fee for this form is $320. Additionally, this rule will 
require CNMI investors to provide their biometrics and imposes an 
additional $80 biometrics fee. Thus, the total fees for each initial 
and biennial registration are $400 ($320 + $80). Fee waivers for 
inability to pay are available.
(b) Paperwork Burden
    It takes approximately 2.75 hours to complete the Form I-129, 
according to the instructions to the form. Since most of the 
respondents under this rule will be business investors, their average 
hourly costs will be much higher than the average hourly costs of the 
average salaried worker. Thus, for the purpose of this analysis, USCIS 
based hourly costs on the average hourly salary for ``chief 
executives'' from the Department of Labor's May 2007 National 
Occupational Employment and Wage Estimates to determine the cost 
associated with the hours necessary to

[[Page 46945]]

complete the Form I-129. The hourly wage for chief executives is 
$72.77. If we multiply $72.77 by 1.4 to account for fringe benefits, 
the hourly cost is $101.88. Multiplying $101.88 by the 2.75 hours 
required to fill out the I-129 results in paperwork burden cost per 
form of $280.16. However, because of generally lower wage levels in the 
CNMI and because some CNMI investors are retirees, this is a maximum 
cost estimate and the likely actual cost is lower.
    Additionally, if a foreign investor wishes to bring along his or 
her family they will have to complete Form I-539, Application to 
Extend/Change Status. The application fee for this form is $300 and 
this form takes approximately 45 minutes to complete according to the 
form instructions. If the foreign investor fills out this form himself, 
the paperwork cost to complete this form is $101.88 x .75, or $76.41 
per investor.
(c) Cost per Foreign Investor
    Adding the estimated paperwork burden cost for completing Form I-
129 of $280 to the $400 application and biometrics fee, the total cost 
for each CNMI foreign investor to submit the I-129 as required under 
this rule every two years is $680. Since re-registration is only 
required every other year, annual costs are $340 per year ($680/2). In 
addition, the $76 paperwork cost of completing the I-539 plus the $300 
application fee costs a total of $376. Form I-539 is a one time only 
application. So the first year cost for foreign investors to complete 
and submit the two forms combined is $716 ($340 + $376). Each 
additional year is only $340.
    Currently foreign investors are charged $1,000 every two years or 
$500 per year by the CNMI government. CNMI fee setting methodology is 
unknown to USCIS. For this analysis it is assumed that the CNMI fees 
resemble U.S. Government agency service and user fees in that they are 
set at the amount necessary to recover costs in accordance with Office 
of Management and Budget guidance, and are not intended to generate a 
profit. Thus, while fees collected by the CNMI for the foreign investor 
program will no longer be collected by the CNMI Government, the cost of 
administering that program will not be incurred, resulting in a neutral 
financial effect. To the extent that the CNMI government used such fees 
to raise revenue, such excess will be lost as a result of this rule.
    Additionally, spouses and children who wish to receive the same 
status as their foreign investor spouse or parent may be required to 
provide biometrics at a cost of $80 per person. According to a recent 
GAO report the average family in the Marianas Islands includes 2 
children.\7\ However, biometrics are only required for children between 
the ages of 14 and 21. Therefore, for purposes of analysis, we assume 
that each foreign investor's family will be required to provide 
biometric fees for one spouse and only one child for an additional cost 
of $160. This will be required only every other year for an average 
annual cost of $80 ($160/2). Adding this cost to the above fees will 
lead to a cost per investor family of $796 in the first year ($340 + 
$376 + $80) and $420 in the second year ($340 + $80) and every 
subsequent year until the end of the transition period. Once the 
Federal regulations are in place the CNMI government will no longer 
charge the $1,000 fee they have been charging foreign investors every 
two years as foreign investors will now be subject to the Federal 
regulations. Therefore, this rule will raise the foreign investor's 
annual cost by $296 in the first year ($796--$500), but reduce the cost 
in second and future years until the end of the transition period in 
2014 by $80 ($500--$420).\8\
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    \7\ GAO-08-791 Commonwealth of the Northern Mariana Islands, 
Managing Potential Impact of Applying U.S. Immigration Law requires 
Coordinated Federal Decisions and Additional Data, August 2008.
    \8\ This estimate considers the added time burden costs of the 
new USCIS paperwork but includes no similar cost savings from 
eliminating the paperwork burden associated with the CNMI's current 
program. Thus actual costs savings are likely to be greater than 
estimated here.
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    The above annual cost estimates represent the costs for those 
investors with a spouse and one child between the ages of 14 and 21. 
For those investors with a spouse and more than 1 child between the 
ages of 14 and 21 these cost estimates may be too low. For those 
investors, particularly those who are retired, these estimates may be 
too high. Lack of data on foreign investors does not allow us to 
further refine our estimates.
(5) Number of Filings Expected
    USCIS projects that most foreign investors plan to re-register 
their status Although a small number of foreign investors may be found 
ineligible, USCIS lacks data on the basis of which to estimate to what 
extent that may occur. USCIS therefore is soliciting comments on the 
subject along with any supporting material, data, or calculations that 
support the estimated rejection rate so that we may consider this 
information and place it in the public docket for this rulemaking.
    Additionally, given the decline in the textile and tourist 
businesses in the CNMI as discussed earlier, even the small fee imposed 
by this rule may lead some foreign investors not to re-register. Since 
data on which to base a reliable estimate of the numbers of foreign 
investors who may choose not to re-register are lacking, USCIS is 
interested in comments containing information concerning the likelihood 
of re-registration.
    In 2006-2007, there were 464 long-term business entry permit 
holders and 20 foreign investor entry permit holders and retiree 
investor permit holders, totaling 484, or approximately 500 foreign 
registered investors. In its recent report, the GAO estimates that the 
number of long-term business and perpetual foreign investor entry 
permits active and valid in 2008 were 506. In another measure, the GAO 
suggests that 448 businesses were associated with long-term business 
entry permits and 56 additional perpetual foreign entry permits were 
associated with 30 businesses.\9\ This analysis assumes that 500 
foreign investors would be affected because of the constantly changing 
economic environment in CNMI. The first year costs, as discussed above, 
would be an additional $296 per investor for a total first year cost of 
$148,000 ($296 x 500) for all CNMI foreign investors. The additional 
transition years will see a savings of $80 per investor or a total 
foreign investor savings of $40,000 ($80 x 500 = $40,000) per year 
until 2014.
---------------------------------------------------------------------------

    \9\ GAO, GAO-08-791, Commonwealth of the Northern Mariana 
Islands, Managing Potential Economic Impact of Applying U.S. 
Immigration Law Required Coordinated Federal Decisions and 
Additional Data, August 2008.
---------------------------------------------------------------------------

    Foreign investors who travel to and from CNMI will now be required 
to have visas. USCIS, however, is not requiring foreign investors who 
travel to the United States to have visas in this rule, as that 
requirement will exist irrespective of this rule. Thus the costs to 
obtain a visa are not a cost of this rule but rather the cost of the 
CNRA, and the CNMI adopting the INA.
(6) The Cost to the Federal Government
    There are no additional costs to the Federal Government as USCIS is 
a generally a fee funded agency. USCIS will recoup its costs through 
the collection of Form I-129 and Form I-539 fees.
(7) Effects after 2014
(a) The CNRA and This Rule
    The CNRA was intended to ensure effective border control procedures 
and to properly address national security and homeland security 
concerns by

[[Page 46946]]

extending U.S. immigration law to the CNMI, and to maximize the CNMI's 
potential for future economic and business growth under U.S. 
immigration law. This rule proposes temporary regulatory provisions to 
transition the CNMI to the INA and to mitigate harm to the CNMI economy 
before investors in the CNMI are required to obtain U.S. immigrant or 
nonimmigrant visa classifications. The CNMI investor program proposed 
in this rule will last until the end of the transition program, 
currently December 31, 2014, at which time, the CNMI E-2 Investor must 
apply and be approved for another immigrant or nonimmigrant status 
under the INA. It is assumed that the data provided by the CNMI and 
other interested parties, gathered by Congress, and considered in 
development and passage of the CNRA showed significant differences in 
the non-immigrant visa programs under the INA and the visa and 
certificate programs offered by the CNMI. Current foreign workers and 
investors in the CNMI would mostly not be eligible for a status under 
the INA, or else legislation of a transition period and temporary 
mitigating regulations as proposed under this rule would be 
unnecessary. Thus, while one stated goal of the CNRA is the economic 
and business growth of the CNMI, by providing a mitigating transition 
program, the legislation implies that goal will require at least 5 
years to be achieved. This rule will operate during that time.
(b) Effect on Investors
    This rule links investment levels to those required for CNMI status 
for a long-term business investor at $150,000; a perpetual foreign 
investor at $100,000, in an aggregate approved investment in excess of 
$2,000,000, or a minimum of $250,000 in a single investment; and, a 
retiree investor at $100,000 in Saipan, $75,000 in Tinian or Rota, or 
$150,000 elsewhere in the CNMI. To qualify as a U.S E-2 treaty investor 
with nonimmigrant status, the applicant must invest a substantial 
amount of capital in a bona fide enterprise in the United States, must 
be seeking entry solely to develop and direct the enterprise, and must 
intend to depart the United States when their treaty investor status 
ends. Next, the treaty investor must be a national of a country with 
which the United States has a treaty of friendship, commerce, or 
navigation and must be entering the United States pursuant to treaty 
provisions.
    USCIS has not analyzed the data on current CNMI long-term business 
entry permit holders and foreign investor entry permit holders to 
determine who would qualify as U.S. E-2 Investors. There is no accurate 
way to estimate for what other visa or nonimmigrant status the 500 
foreign registered investors may qualify. However, a review of the CNMI 
eligibility criteria and anecdotal evidence indicates that many of them 
would not meet the minimum financial investment necessary to be 
eligible for U.S. E-2 status currently. Further, the retiree investor 
permit holders do not qualify as U.S. E-2 Investors in their current 
status, notwithstanding that they may have access to or be able to 
acquire enough capital to invest and qualify. Finally, according to the 
GAO Report, about 18 percent of foreign investors in the CNMI are from 
countries with which the United States does not have a treaty of 
friendship, commerce, or navigation.\10\ Thus of the 500 foreign 
registered investors in the CNMI, many of them will need to spend the 
transition period making themselves eligible for another status under 
the INA. Anecdotal evidence indicates that at least a few of the 
affected investors from countries without treaties of friendship, 
commerce or navigation with the United States may be eligible for L-1A 
executive or managerial visas; thus the possibility exists that some of 
these investors may be able to stay in the CNMI in another status after 
the end of the transition program, currently December 31, 2014.\11\
---------------------------------------------------------------------------

    \10\ GAO, GAO-08-791, Commonwealth of the Northern Mariana 
Islands, Managing Potential Economic Impact of Applying U.S. 
Immigration Law Required Coordinated Federal Decisions and 
Additional Data, August 2008.
    \11\ See, INA Section 101(a)(15)(L); 8 CFR 214.2(l).
---------------------------------------------------------------------------

(c) Effect on the CNMI Economy
    USCIS has not analyzed the precise effect of increased or decreased 
investments in the CNMI. Nevertheless, as indicated before, the 
differences between the CNMI foreign investor programs before the CNRA 
takes effect and those available afterward under the INA are certain to 
change the mix of foreign investors eligible for a new status and 
maintaining a presence in the CNMI after the end of the transition 
program, currently December 31, 2014. An immigrant investor program, or 
immigration through investment, seeks to promote economic growth 
through increased export sales, improved regional productivity, 
creation of new jobs, and increased domestic capital investment. The 
presumption is that the investment opportunity coupled with the 
opportunity to live in the country offering the program offers 
advantages, or at least appears to offer advantages, to the investor 
over investments and residence in his or her country of origin. 
Assuming that these goals are generally achieved, withdrawal of the 
alien's investment without substitution of a substantially similar 
investment, would, at the least, end what positive results had been 
started, and, at the worst, have the reverse effect and retard growth, 
sales, productivity, jobs, and investment. Thus, if a substantial 
number of the 500 foreign investors in the CNMI are required to leave, 
liquidate their investments, and their investments are not replaced by 
another equal or greater investment, then it will likely have a 
negative impact on the CNMI economy. This rule is intended to mitigate 
that impact.
(8) Benefits
    CNMI administration of an immigration system outside U.S. 
immigration law has led to an abuse of the visa system in the CNMI. S. 
Rep. No. 110-324, at 3 (2008). Given this abuse, there are concerns not 
only for the well-being of foreign employees working in the CNMI, but 
also for the potential abuse of the visa system by those seeking to 
illegally emigrate from the CNMI to Guam or elsewhere in the United 
States. Id. at 3-5. This reduces the integrity of the U.S. immigration 
system by increasing the ease by which aliens may unlawfully enter the 
United States through the CNMI. Federal oversight and regulation of 
CNMI foreign investors should help reduce abuse by foreign investors in 
the CNMI, and should help reduce the opportunity for aliens to use the 
CNMI as an entry point into the United States. Id. at 2, 4-5. Because 
oversight of immigration by the CNMI government is thought to be less 
stringent than that of the United States Federal Government, there is 
presently the opportunity by individuals seeking entrance to the United 
States to seek admittance to CNMI as an opportunity to gain, in turn, 
illegal entrance into the United States. By the Federal Government 
taking over responsibility for immigration enforcement in CNMI, the 
opportunity for abuse of the CNMI immigration regime for illegal access 
to the United States is reduced.
(9) Conclusion
    This proposed rule responds to a Congressional mandate that 
requires the Federal Government to assume responsibility for all 
immigration to the CNMI by foreign investors, whether temporary or 
permanent. This proposed rule will implement this mandate and thus 
contribute to U.S. homeland security. USCIS concludes that the 
alternative chosen for this proposed rule represents the most cost-
effective means

[[Page 46947]]

of implementing its Congressional mandate while having only minimal 
negative impact on the CNMI economy. Comments are welcome on these 
conclusions.

D. Regulatory Flexibility Act--Initial Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as 
amended by the Small Business Regulatory Enforcement Fairness Act of 
1996 (Pub. L. 104-121), requires Federal agencies to consider the 
impact of their regulatory proposals on small entities.
1. Description of and, Where Feasible, an Estimate of the Number of 
Small Entities to Which the Proposed Rule Will Apply
a. Regulated Entities
    This proposed rule would affect foreign investors in the CNMI. As 
previously stated, foreign investors can apply for the following CNMI 
entry permits: foreign investor permits, long-term business permits, 
and retiree investor permits.
b. Number of Small Entities to Which the Proposed Rule Will Apply
    Data available on the present 464 long-term permit holders reveal 
that they account for 419 businesses with about 4,592 employees, 
approximately 11 employees per business. In additional, as discussed 
above, there are an additional 20 foreign investor entry permit holders 
and retiree investor permit holders for a total of 484. Since the 
economic situation in the CNMI is dynamic, this analysis approximates 
the number of affected businesses at 500 total. Now that the last 
garment factory in the CNMI has closed, the remaining industries 
affected by this rule are tourism (lodging and recreation) which are 
North American Industry Classification System (``NAICS'') codes 72111 
and 7139, respectively, miscellaneous manufacturing (NAICS code 
339999), and retail sales (NAICS Code 445). According to the Small 
Business Administration guidelines firms in the accommodation and food 
services and recreation industries are considered small if they have 
sales of less than $7 million per year.\12\ Miscellaneous manufacturing 
firms are considered small if they have fewer than 500 employees, and 
specialty retail food stores are small if they have sales of less than 
$7 million. The firms affected by this rule have an average of 11 
employees, however, USCIS has no data on the average annual sales of 
those firms. Thus, for the purposes of this analysis, under the 
requirements of the RFA, USCIS assumes that all of the foreign investor 
owned businesses in the CNMI affected by this rule are small entities.
---------------------------------------------------------------------------

    \12\ U. S. Small Business Administration, Table of Small 
Business Size Standards, Matched to North American Industry 
Classification System Codes. Viewed April 2, 2009, at https://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.
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