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[HOT] [Q] For regional center projects, do indirect jobs created outside the regional center's geographic area count?


[Q] For regional center projects, do indirect jobs created outside the regional center's geographic area count? For example, a regional center may be approved for Los Angeles County. The regional center’s first project may be a bakery located in Los Angeles County, and direct jobs are created in that county. The economic model, however, may not specify where indirect jobs are created. The flour distributing company that has to hire an additional employee to transport flour to the Los Angeles bakery may be located in Riverside County, for example. We believe that an indirect job in such circumstances should count for EB-5 purposes. Please confirm.

Because this question is such an important one in context of regional center based EB-5 cases, let me quote the USCIS' answer in its entirety. In short, the answer is a clear "no". And a regional center better expand its underlying regional center's geographic area if it wants to count direct and indirect jobs created outside the current regional center area.

Section 610(a) of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note), as amended states that: “A regional center shall have jurisdiction over a limited geographic area, which shall be described in the proposal and consistent with the purpose of concentrating pooled investment in defined economic zones.” While the regulation at 8 CFR 204.6(m)(3) provides that each regional center must describe “how the regional center focuses on a geographical region of the United States,” USCIS interprets the statutory and regulatory prescribed focus to mean that the economic analysis methodology used by regional centers should also be focused on job creation within the bounds of the regional center. [See also Matter of Izummi.] As a result, a regional center should file an amended proposal seeking an expansion of the geographic area of the regional center if it wishes to include job creation within its economic models in areas outside of the bounds of the regional center.
Note: Regional economic impact models have limitations; one of the biggest is that they ARE regional in nature, so if most of the direct inputs are not locally produced the user of the model must account for this in their calculations. Problems occur when people misuse models like RIMS II by using data that is not limited to the area that is the focus of the regional center, but then claim job creation within the bounds of a regional center. The BEA defines geographic region as the area that will supply the majority of the direct inputs of production (including labor). So, if in the above example, if the RIMS II data for Los Angeles County was used in the economic impact analysis it will not tell you about an indirect job in Riverside County or any other County. The use of economic data, such as RIMS II input/output tables for areas outside of the bounds of the regional center does not accurately assess the impact of economic activity within the regional center.