The U.S. Department of Labor has published a new regulation for the department's Permanent Foreign Labor Certification (PERM) program. The PERM program helps meet workforce needs when there are no available American workers to fill an available job. The Department of Labor is able to process requests to fill vacancies with foreign workers only after employers affirm to the department that no American workers are available.

“The regulation creates a fair and efficient system for reviewing applications to certify foreign workers while maintaining safeguards for American workers,” said Assistant Secretary of Labor for Employment and Training Emily Stover DeRocco.

The department's Employment and Training Administration (ETA) will open two new national processing centers in Chicago and Atlanta to review applications. The new program will accept the electronic filing of applications, thereby significantly reducing paperwork and allowing for prompt approval or rejection of requests for labor certification. Electronic filing also will enable the department to conduct automated screening of applications and identify applications for audits.

Once a permanent labor certification is issued by the department, an employer must then petition the U.S. Department of Homeland Security and the State Department to complete the visa approval process.

Under the previous program, a backlog of more than 300,000 applications for labor certification had built up. To address this backlog, the department recently announced the establishment of two temporary Backlog Elimination Centers to expedite processing of these applications. The centers, located in Dallas and Philadelphia, coordinate with state workforce agencies and the Employment and Training Administration's Division of Foreign Labor Certification to address the backlog.

For a complete version of the Permanent Labor Certification final rule click here.

All persons interested in attending a public informational meeting on the Immigrant Investor Pilot Program and Regional Centers are invited.

DATE: September 17, 2004
TIME: 10:00 am to 4:00 pm (Eastern Standard Time)
LOCATION: Holiday Inn
415 New Jersey Avenue NW
Washington, D.C.

Please email your RSVP to confirm your attendance by no later than August 30, 2004, to hqoprd@dhs.gov, and provide the following information (required):

Name of person attending,
Affiliation (if any),
Mailing address,
Phone number,
Email address.
Copy of the Meeting Agenda

BACKGROUND: The Immigrant Investor Pilot Program (“Pilot Program”) was created by Section 610 of Public Law 102-395 (October 6, 1992). This is different in certain ways from the basic EB-5 Investor Program.

The Pilot Program began in accordance with a Congressional mandate aimed at stimulating economic activity and creating jobs for U.S. workers, while simultaneously affording eligible aliens the opportunity to become lawful permanent residents. Through this innovative program, foreign investors are encouraged to invest funds in an economic unit known as a “Regional Center.”

A Regional Center is defined as any economic unit, public or private, engaged in the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment. Prior law required investment in a Regional Center to generate an increase in export sales. However, statutory amendments in 2000 and 2002, no longer require an increase in export sales for approval of a Regional Center, although the statutory amendments still encourage this aspect of the Pilot Program.

Presently up to 3000 immigrant visas are set aside each year for the Pilot Program. Although the Pilot Program temporarily sunset on September 30, 2003, it was reinstated and extended for five years by Congress via a law enacted in November 2003, with a new sunset date of November 2008. As of June 1, 2004, a total of 26 Regional Centers have been designated by the legacy Immigration and Naturalization Service (INS) and today, the U.S. Citizenship and Immigrations Services (USCIS).

Basic requirements for Regional Center designation: Applicants must show how their proposed program will:

• Focus on a geographic region;
  
  
• Promote economic growth through increased export sales, if applicable;
  
  
• Promote improved regional productivity;
  
  
• Create a minimum of 10 direct or indirect jobs per investor;
  
  
• Increase domestic capital investment;
  
  
• Be promoted and publicized to prospective investors;
  
  
• Have a positive impact on the regional or national economy through increased household earnings; and
  
  
• Generate a greater demand for business services, utilities maintenance and repair, and construction jobs both in and around the center.

How The Pilot Program And Regional Centers Fall Within The EB-5 Investor Requirements

The requirements for an investor under the Pilot Program are essentially the same as in the basic EB-5 investor program except that the Pilot Program allows for a less restrictive requirement for “indirect” job creation rather than “direct” job creation. The capital investment requirement for any EB-5 investor, inside or outside of a Regional Center is $1 million. The capital investment requirement for an EB-5 investor in a Targeted Employment Area (TEA) or a Rural Area (RA) is $500,000.

Indirect Job Creation: An important advantage to obtaining Regional Center designation is the “indirect” nature of the job creation, which is less difficult to achieve than the “direct” creation of 10 new jobs. The requirement of creating at least 10 new full-time jobs may be satisfied by showing that, as a result of the investment and the activities of the new enterprise, at least 10 jobs will be created indirectly through an employment creation multiplier effect. To show that 10 or more jobs are actually created indirectly by the business, reasonable methodologies may be used, such as multiplier tables, feasibility studies, analyses of foreign and domestic markets for the goods or services to be exported, and other economically or statistically valid forecasting tools which support the likelihood that the business will result in increased employment.

Targeted Employment Area (TEA): A TEA is a geographic area or political subdivision located within a metropolitan statistical area or within a city or town with a population in excess of 20,000 with an unemployment level at least 150% of the national unemployment rate. TEAs within a state are identified and designated by the governor (and for a TEA within the District of Columbia, designation is made by the Mayor). Typically a Regional Center seeks to encompass one or more TEAs. One example of a TEA is a Regional Center, which encompasses a large city which contains clearly delineated census tracts that have been designated as a TEA by the State based on the measured unemployment rates for the population residing within those locations.

Rural Area: A RA is a geographical area that is outside a metropolitan statistical area, or part of the outer boundary of any city or town having a population of 20,000 or less as shown by population indicators. In certain areas involving a sparsely populated state, an approved statewide Regional Center likely encompasses both TEAs and RAs.

Required Amount of Investment: Depending on the location of the commercial enterprise to be invested in, the required amount of the investment may be either $1 million or $500,000. If the investment is located within a TEA or RA, the required minimum threshold for investment is $500,000. Otherwise, an alien must invest a minimum of $1 million to qualify.

Required Commercial Enterprise: In order to qualify under the Pilot Program, an investment of the requisite amount ($500K or $1 million) must be made in a new commercial enterprise located within an approved Regional Center.

New Commercial Enterprise: The law and regulations require that the commercial enterprise in which the investment is made must:

1. Have been created/established after November 29, 1990; or
   
   
2. If the investment is made in a pre-1990 enterprise, the alien’s investment must have created a 40% or more increase in either the enterprise’s net worth or number of employees; or
   
   
3. The pre-1990 enterprise has been restructured or reorganized so that the result is a new commercial enterprise.
   

Although the 2002 EB-5 amendments eliminated the requirement that the alien “establish” the new commercial enterprise, the law retained the requirement that the enterprise into which the alien has invested be “new.”

Risk: The regulations and precedent decisions require an alien to incur a reasonable risk for purposes of generating a return on his or her capital investment. As such there should be no guarantees, buy back arrangements, unsecured promissory notes, other agreements or arrangements that in effect merely structure or organize the investment for appearance sake only for purposes of obtaining the permanent resident status without the alien’s capital being fully invested and at risk in the investment in the new commercial enterprise to create or spawn the required 10 jobs.

Engagement of the Alien Investor in the Enterprise: The regulations require that the alien investor is or will be engaged in the management of the new commercial enterprise, either through day-to-day managerial control or through participation in policy-making decisions for the commercial enterprise.

Application for Regional Center designation: There is no established application form by which to apply. The process provides that any entity, government or private organization which desires Regional Center designation by the USCIS proceed as follows:

1. Prepare a written narrative proposing a for-profit investment which addresses each of the requirements for Regional Center designation participating in the pilot program, with supporting evidence as prescribed in the regulations at 8 CFR 204.6(m).
   
   
2. Submission of the written proposal to the USCIS Associate Director for Operations.

At present there is no fee required to apply for Regional Center designation. The USCIS will then review and adjudicate the proposal and may request additional clarifying information and evidence to support representations made in the proposal. If the proposal is initially determined to fully meet each of the requirements for Regional Center designation, then such designation is issued through a letter to the applicant signed by the USCIS’ Associate Director for Operations. If the proposal is initially determined to not meet all the requirements for such designation, then a request for additional evidence may be made. Based on the proposal and the supporting evidence for the proposal, a final determination to approve or deny the regional center request will be made by USCIS.

Important: The above information on Regional Center designation is provided as general information only. It is not intended to be, and may not be relied upon, to create any right or benefit, substantive or procedural, enforceable at law by any individual or other party in removal proceedings, in litigation with the United, States, or in any other form or manner. Nothing herein restricts or limits USCIS’ ability to administer, review, develop, or in any way change the Regional Center designation program.

The USCIS has released an inter-office memorandum on the formation of Investor and Regional Center Unit. Effective the date of this memo, oversight for policy and regulation development, field guidance, form design, case auditing, and training regarding Regional Center adjudications and associated investor petitions within the EB-5 Investor Program, shall reside with PRD/Investor and Regional Center Unit (IRCU). Given the well documented past abuses in the alien investor program, and the complexity and sensitivity of the issues and factors relating to both Regional Centers as well as with individual alien investor cases, there is a need for effective oversight, coordination and uniform standards governing all aspects of EB-5 matters.

PRD/IRCU will maintain liaison and regularly consult with Headquarters Service Center Operations (SCOPS), Field Operations (OFO), Administrative Appeals Office (AAO), as well as with the Texas and California Service Centers with respect to the Immigrant Investor Pilot Program, Regional Centers, I-526 and I-829 alien investor petitions. In addition, PRD/IRCU will work directly with both SCOPS and the Office of Fraud Detection and National Security (FDNS) to enhance the integrity of the EB-5 program.

This action is a major step in CIS' establishment of a nationwide and coordinated adjudicative alien investor EB-5 program, which will strengthen and protect the integrity of the program while promoting the intent of Congress to encourage investment and increase employment within the United States. The IRCU's functions and responsibilities are as follows:

1. Sole adjudicative jurisdiction for Regional Center applications pursuant to the Immigrant Investor Pilot Program for purposes of approval, denial and Requests for Evidence (RFE's).
   
   
2. Monitor and follow up on the actions of approved Regional Centers to ensure compliance with the terms, scope, and conditions of their approval/designation relative to their approved business plans and indirect job creation methodologies.
   
   
3. Develop and propose EB-5 program, policy, and regulation changes/improvements to USCIS management.
   
   
4. Monitor and be responsible for the policy coordination relating to CIS wide I-526 and related I-829 Immigrant Investor cases.
   
   
5. In coordination with SCOPS, conduct quarterly evaluations and an annual analysis of Regional Center activities in terms of number of alien investors, aggregate investment capital, average value of investments per alien investor, aggregate total of direct and indirect jobs per each regional center, and review total number of alien investors petitioning through each regional center per year.
   
   
6. Coordinate with the SCOPS and FDNS, to develop program and process integrity improvements and assessments for purposes of strengthening fraud detection and preventing abuses of the program by mala fide promoters and investors.
   
   
7. In coordination with SCOPS, develop and update Executive Level Review Criteria (ELRC) for purposes of identifying and selecting I-526 and I-829 Regional Center affiliated cases to review and/or adjudicate for both audit and "special handling" to verify consistent application of applicable regulations and policies, and to provide oversight, guidance and provide priority adjudication of sensitive high visibility cases.
   
   
8. In coordination with SCOPS conduct random and focused audits and quality assurance reviews of individual and groups of both Regional Center affiliated I-526 and I-829 cases, and non-Regional Center affiliated cases, in accordance with ELRC procedures.
   
   
9. In coordination with SCOPS, conduct both Regional Center and EB-5 regulatory/policy training for CAO's and DAO's adjudicating individual EB-5 alien petitions as well as petitions affiliated with a regional center.
   
   
10. Maintains and updates the USCIS web content on the EB-5 program and Pilot Program information.

To learn more about the mission and organizational structure for PRD/IRCU, click here

In an interoffice memorandum the U.S. Citizenship and Immigration Services (USCIS) has announced that oversight for policy and regulation development, field guidance, form design, case auditing, and training regarding Regional Center adjudications and associated investor petitions within the EB5 Investor Program, shall reside with PRD/Investor and Regional Center Unit (IRCU).

The U.S. Department of Labor finally published the much awaited regulation for the Permanent Foreign Labor Certification (PERM) program. The PERM program helps meet workforce needs when there are no available American workers to fill an available job.

USCIS has announced a public informational meeting on the Immigration Investor Pilot Program and Regional Centers on September 17, 2004. Persons interested in attending the meeting have been requested to email their RSVP to confirm their attendance by no later than August 30, 2004.