Visa Lottery Application Dates; STEM Green Card Effort Fails (so far); EB-5 Pilot Program Reauthorized Amid Large Concerns Over Recent USCIS Interpretations.

Alan Lee, Esq.

Visa Lottery and STEM Green Cards

The visa lottery became news this week for more than one reason. First the instructions came out for participation in the 2014 diversity immigrant visa program (DV-2014) that natives of countries other than Bangladesh, Brazil, Canada, China (mainland born), Colombia, Dominican Republic, Ecuador, El Salvador, Haiti, India, Jamaica, Mexico, Pakistan, Peru, Philippines, South Korea, United Kingdom (except Northern Ireland) and its dependent territories, and Vietnam can submit electronic entries between noon Eastern daylight time October 2, 2012 until noon Eastern daylight time November 3, 2012. Persons born in Hong Kong SAR, Macao SAR, and Taiwan are eligible. Second it has for now escaped a trade-off in Congress under which the visa lottery would be scrapped and the entire 55,000 numbers given over to immigrating STEM (Science, Technology, Engineering, Math) professionals with advanced degrees. There were two competing bills to give immigrant visas to STEM professionals, one by Senator Charles Schumer (D-NY) which would have given the green cards without subtracting from any other category and the other by Representative Lamar Smith (R-TX) which would have stricken the visa lottery. The Smith bill passed the Senate, but under a Republican fast-track procedure limiting debate but requiring a two-thirds majority to pass, the bill was defeated in the House by 257-158. With that, Congress left town for recess until after the November elections, adding the earliest departure that many can recall to its infamy as the worst do- nothing Congress in history. It is expected to reconvene after the elections and the measure can hopefully be taken up again and some compromise found as STEM professionals are sorely needed for innovation in keeping America's leadership position in the world. Currently many advanced degree STEM professionals return home after being groomed in U.S. universities with master's and Ph.D. degrees and many times lead their countries' research efforts in areas of direct competition with the U.S. because of the difficulty and long waiting times required for most of them (China and India born) to immigrate to the States.

EB-5 Pilot Program Reauthorization and Strange Interpretations in Denials.

S. 3245, a bill to reauthorize the EB-5 regional center program, was sent to the President for signature on September 20, 2012, after passage of both houses of Congress and is expected to be signed momentarily. There is much concern, however, with recent U.S.C.I.S. EB-5 decisions appearing to contradict its past interpretations and statements resulting in a recent lawsuit involving 18 plaintiffs, Carlsson v. U.S.C.I.S., filed on 9/13/12 in the U.S. District Court for the Central District of California. It is an eye opener for EB-5 law as the new commercial enterprise (NCE) was a standard project renovating warehouse and commercial real estate. U.S.C.I.S. revoked approved I-526 petitions and denied pending ones. From reading the 55 page complaint alone, some of the alleged U.S.C.I.S. reasons given in the notices of intent, revocations and denials are alarming. According to the complaint, among other charges in the notices to of intent to revoke and requests for evidence were the following:

  • The funds were held in an escrow account and the property appeared to have been acquired and renovated without the investors' money, a mistaken impression as the funds had not been placed in escrow.
  • The business plan was not sufficiently detailed as to when the tenants would occupy the building, the costs and nature of the property's purchase and renovation, and a market analysis for leasing the property.
  • The regional center had used the IMPLAN input-output model methodology incorporating tenant occupancy estimates for job creation. USCIS said that the assumptions in the IMPLAN input-output methodology for determining job creation generated by tenants was not valid.
  • USCIS further stated that jobs created by tenants could not be counted because it was not appropriate to take credit for the employment impacts created by the unrelated business ventures of future tenants.
Upon response to the notices of intent to revoke and requests for evidence, USCIS's further complaints in the I-526 revocations and denials were according to the complaint the following:
  • The investors put their money in the NCE and USCIS said that the funds were not at risk since the entire amount of the money had not yet been fully committed in that $12 million was originally contemplated and $11.5 million was given by the investors, but the enterprise had only spent $7.55 million thus far and not the $11.5 million in accumulated capital. [To date, the NCE purchased the property for $6,050,000 with closing costs of $320,700, made tenant improvements and minor renovations for $609,000; it was moving to make capital improvements of approximately $570,000 and to purchase and improve an adjacent 5 acre property for $2,430,000.]
  • USCIS complained there was no assurance that the entire amount of the EB-5 capital would be used to carry out the business of the NCE and be placed at risk for the purpose of generating a return.
  • USCIS complained of material changes and discrepancies including the investment of $11.5 million instead of the initially contemplated $12 million, change from the initially forecasted (hypothetical) tenants to one actual tenant, and the decision to expand the project and use some funds to renovate an adjacent property.
  • USCIS argued that the job creation aspect must be established in the business plan as opposed to the methodology used to determine job creation.
  • USCIS complained that the methodology was not reasonable because the NAICS (North American industry classification system) codes used in the IMPLAN methodology for prospective or actual tenants to determine job creation were different from the 13 target industry economic clusters approved in the regional center's approval letter.
Prior to this year, USCIS has accepted tenant occupancy methodology estimates; the question of spending investor funds was only addressed in I-829 applications to remove the conditional basis of permanent residence two and a half years after approval of the I-526 petitions and not at the I-526 stage; and indirect job creation by future tenants has been counted as valid. If USCIS is contemplating changes in policy, it should remember that its 1997 reversals on interpretations and statements that it had made to the public had a chilling effect on the EB-5 program for years.

This article © 2012 Alan Lee, Esq.

About The Author

Alan Lee, Esq. is a 30+ year practitioner of immigration law based in New York City holding an AV preeminent rating in the Martindale-Hubbell Law Director, registered in the Bar Register of Preeminent Lawyers, and on the New York Super Lawyers list. He was awarded the Sidney A. Levine prize for best legal writing at the Cleveland-Marshall College of Law in 1977 and has written extensively on immigration over the past years for Interpreter Releases, Immigration Daily, and the ethnic newspapers, World Journal, Sing Tao, Pakistan Calling, Muhasha and OCS. He has testified as an expert on immigration in civil court proceedings and was recognized by the Taiwan government in 1985 for his work protecting human rights. His article, "The Bush Temporary Worker Proposal and Comparative Pending Legislation: an Analysis" was Interpreter Releases' cover display article at the American Immigration Lawyers Association annual conference in 2004, and his victory in the Second Circuit Court of Appeals in a case of first impression nationwide, Firstland International v. INS, successfully challenged INS' policy of over 40 years of revoking approved immigrant visa petitions under a nebulous standard of proof. Its value as precedent, however, was short-lived as it was specifically targeted by the Bush Administration in the Intelligence Reform Act of 2004.

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