Insular Affairs Bills

STATEMENT

OF

THE HONORABLE ANTHONY M. BABAUTA

ASSISTANT SECRETARY OF THE INTERIOR INSULAR AREAS

BEFORE THE

SUBCOMMITTEE ON INSULAR AFFAIRS,

OCEANS AND WILDLIFE COMMITTEE

ON NATURAL RESOURCES U.S. HOUSE OF REPRESENTATIVES

REGARDING

H.R. 6015 – ISLAND ECONOMIC DATA AND VISA ISSUES

SEPTEMBER 16, 2010

Chairwoman Bordallo and members of the Subcommittee, I appreciate the opportunity to appear before you today to discuss H.R. 6015.

GDP for the Islands

Section 1 of H.R. 6015 would institutionalize the collection of Gross Domestic Product (GDP) data for both the United States territories of American Samoa, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), the Virgin Islands and Puerto Rico and the freely associated states of the Republic of the Marshall Islands, Federated States of Micronesia, and Palau.

Over the years, the economies of the territories have labored to produce goods and services for their citizens, but they are not included in the nation's macroeconomic accounting methods and techniques that would make it possible to compare their economic performances to the fifty states and other economies. Similarly, although the United States provides substantial assistance to the freely associated states, we would benefit from additional information that would better enable us to compare their economic performances to those of other economies. Lack of basic economic data deprives government and business leaders, entrepreneurs and citizens alike of the information and insight they need to make informed decisions. Realizing this immense deficiency, the Office of Insular Affairs, over a year and a half ago, made available $1.6 million in technical assistance for the Bureau of Economic Analysis (BEA) in the U.S. Department of Commerce to compile island economic data over an 18-month period. Working closely with the territories, the BEA collected basic data that were sufficient to calculate baseline GDP data for each of the four territories of American Samoa, Guam, the CNMI and the Virgin Islands. The BEA was the logical choice for this task because of its expertise and resources in compiling national income accounts, including GDP data. Its work is considered to be the gold standard in economic statistics, and the data gathered for the territories must be consistent with those the BEA gathers for the fifty states. The results of this baseline effort, the first GDP estimates for the four territories for which OIA has general responsibilities, were announced in Washington on May 5, 2010. It is worth noting that the Chair and delegates from the four territories were in attendance when Department of the Interior and Commerce jointly released the estimates for the years 2002 through 2007. The BEA is to release estimates for 2008 and 2009 in early 2011.

In 2007, the GDP for American Samoa was $532 million; Guam's GDP was $4.28 billion; the CNMI's was 962 million: and the GDP for the U.S. Virgin Islands was $4.58 billion.

OIA's technical assistance grant for the BEA work was always meant as seed money for including territorial GDP data in the United States national income accounts. Interior's involvement was never meant to be permanent.

Section 1 of the bill would also include the freely associated states, which were not part of OIA's agreement with BEA. Because these states have been sovereign nations for many years, international agencies, such as the Asian Development Bank, the International Monetary Fund and the United Nations Development Program, have provided funds and technical assistance for the gathering of economic statistics. However, the process of collecting and reporting income accounts for each of them has yet to be institutionalized. Research by BEA will be required to determine whether the data currently available are adequate for the task. An effective monitoring of progress under the amended Compacts of Free Association is dependent upon accurate, current and complete economic and financial data. That said, in light of the fact that the freely associated states would not be under an obligation to provide economic data to the BEA beyond what is required under their respective Compacts, we suggest a technical amendment to the legislation noting that the GDP research be conducted to the extent the freely associated states volunteer the necessary information.

Madam Chairman, your legislation to institutionalize territorial GDP data collection and reporting within the BEA is appropriate and timely, provided that resources, other than OIA's technical assistance funds, are available to BEA for BEA to undertake this expanded assignment for all eight jurisdictions.

The Department of the Interior strongly supports the enactment of section 1 of H.R. 6015.

Extension of H Visas for Guam and the CNMI

Section 2(a) of H.R. 6015 provides that, if the transitional worker program for the CNMI contained in title VII of Public Law 110- 229 is extended, the lifting of the numerical limitation on H visa workers for Guam and the CNMI would also continue for the period of the extension.

The Administration agrees that Public Law 110-229 should be clarified to provide authority to extend the H cap extensions beyond December 31, 2014. However, we would suggest that this determination should be made with respect to the CNMI, Guam, or both based upon the labor needs of each territory for an H cap extension, as opposed to occurring automatically based upon a labor determination with respect to the CNMI transitional worker program only. We would be pleased to work with Congress on specific language for the bill.

Guam-CNMI Visa Waiver Program

Section 2(b) of H.R. 6015 would require the Secretary of Homeland Security to provide a mechanism to permit visa-free travel of nationals of countries that provided a significant economic benefit from visitors for pleasure in the one-year period preceding the date of enactment of the CNRA. In its interim final rule, DHS determined that visitors from the People's Republic of China (China) and the Russian Federation (Russia) to the CNMI provided a significant economic benefit but did not designate either country for travel under the Guam-CNMI Visa Waiver Program.

Prior to the start of the transition period, the Secretary of Homeland Security announced that she would exercise her discretionary authority under section 212(d)(5)(A) of the Immigration and Nationality Act (INA) to parole on a case by case basis eligible visitors from China and Russia into the CNMI. The Department of Homeland Security (DHS) has not yet published its final rule for the Guam-CNMI Visa Waiver Program and may consider designating additional program countries in their development of the final rule.

The Department of the Interior defers to the Department of Homeland Security (DHS) about this provision. We would like to reiterate, however, that the Secretary of DHS has the discretionary authority to extend a similar program to Guam, which is consistent with the legislative intent of the Congress in enacting the Guam-CNMI visa waiver provision of title VII of Public Law 110-229: "(t)he regulations should include countries for which the CNMI has received a significant economic benefit from the number of visitors for pleasure within the one-year period preceding the date of enactment." Please see the House Committee on Natural Resources Report 110-469 (December 4, 2007) and Senate Committee on Energy and Natural Resources Report 110-324 (April 10, 2008).

As discussed above, DHS has determined that visitors from Russia and China, at this time, may not be formally included in the Guam-CNMI visa waiver program. However, in order to maintain the CNMI's tourism industry and help its economy, the Secretary of DHS has allowed the visiting nationals of Russia and China be paroled into the CNMI on an individual basis. This process provides for tourism continuity in the CNMI, supporting jobs and the revenue base in the territory. This parole policy has not been extended to Guam, although we understand that DHS is examining the possibility of using its discretionary parole authority for visitors to Guam.

I wish to emphasize that, should DHS include Guam under its parole authority or expand the visa-waiver program to one or both of the territories, that the Secretary of DHS may either revoke a country's participation eligibility or end the program altogether if she finds that this use of parole or the Guam-CNMI visa waiver program is being abused – for example, with overstays, security threats, false documents and asylum. Again, the DHS may terminate the visa waiver eligibility of nationals from the offending country.