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[HOT] [Q] What is the requirement in designating a TEA area?


[Q] Pursuant to 8 C.F.R. § 204.6(i), please confirm that a targeted employment area (TEA) may consist of a geographic area designated by a governor's delegate, that is described by a collection of wards, census tracts, and/or other political descriptions (such as sets of city blocks), even when the precise location of a particular commercial enterprise is located in a ward or census tract that does not by itself have an unemployment rate of 150% of the national average.

Because this question is very important, USCIS' answer is quoted below in its entirety.

The regulation at 8 CFR 204.6(i) provides that a state government may designate a particular geographic or political subdivision located within a metropolitan statistical area or within a city or town having a population of 20,000 or more within such state as an area of high unemployment (at least 150% of the national average rate.) The following reasoning for involving states in this process was noted in legacy INS’ final rule implementing the initial EB-5 regulations, Employment-Based Immigrants, [56 FR 60897]:
Twelve commenters called for the Service to change the definition of targeted employment area. The Service cannot, of course, alter the statutory definition of targeted employment area. The Service has concluded, however, that the designation of smaller geographic or political areas within metropolitan statistical areas or within cities or towns with a population of 20,000 or more as areas of high unemployment would comport with the intent of Congress regarding targeted employment areas. [emphasis added]

This part of the rule contains a method for the designation of such geographic or political areas as areas of high unemployment. Under the final rule, a state government may delegate to any agency, board, or other appropriate state governmental entity the authority to certify that geographic or political subdivisions of non-rural areas within the state qualify as areas of high unemployment. The delegation must be reported to the Immigration and Naturalization Service through the Associate Commissioner for Examinations prior to the issuance of any area designation. The evidence of such area designations that a state provides to a prospective alien entrepreneur should include a description of the boundaries of the geographic or political subdivision and the method or methods by which the unemployment statistics were obtained.

This part is not intended to place any unnecessary burden upon any state. With respect to geographic and political subdivisions of this size, however, the Service believes that the enterprise of assembling and evaluating the data necessary to select targeted areas, and particularly the enterprise of defining the boundaries of such areas, should not be conducted exclusively at the Federal level without providing some opportunity for participation from state or local government. This part of the rule is merely intended to afford the states a method by which particular areas of high unemployment within their boundaries may qualify as “targeted,” and to allow alien entrepreneurs the opportunity to invest in such areas under the targeted employment area guidelines, including lowered investment amounts.

Based upon the reasoning provided in the final rule, state-issued TEA designations under 8 CFR 204.6(i) must be in accordance with the statutory definition of targeted employment in INA §203(b)(5)(B), which requires that a targeted area either be “rural” or an “area of high unemployment.” Further, 8 CFR 204.6(i) does not provide states with the authority to make TEA designations regarding whether a certain area qualifies as “rural”. Any state TEA designation must involve the assembly and evaluation of data in a manner sufficient to arrive at a defensible finding of high unemployment within the bounds of the area to be designated in a manner that is in keeping with the statutory requirement. That is why 8 CFR 204.6(i) provides that state designations be accompanied by a description of the boundaries of the geographic areas, and explain the method or methodologies by which the unemployment statistics were obtained. While state governments clearly have the authority to make TEA designations, states governments do not have the authority to designate areas as high unemployment that do not in reality qualify as a targeted area under INA §203(b)(5)(B).

It appears that this question solicits confirmation from USCIS that state-sanctioned attempts to “gerrymander” a finding of high unemployment that is not in accordance with the statutory requirement, through the cobbling together of various portions of political subdivisions so that an investment in a commercial enterprise in a location that is not a high unemployment area would ultimately qualify as one, is an acceptable business practice for EB-5 purposes. On its face, this supposition blatantly frustrates the congressional intent behind INA §203(b)(5)(B). As such, USCIS cannot confirm that this is an acceptable business practice for states to use in making TEA designations.

Whew . . . a long answer, huh? Whenever an answer is this long, that means they want to hedge both ways: they want to allow and disallow . . . at the same time.