Suggested agenda items for USCIS EB-5 Economist Engagement


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Suggested agenda items for USCIS EB-5 Economist Engagement

  1. 1. Suggested Agenda Items For: “Engagement with Director Mayorkas andUSCIS Economists” Scheduled for Friday, June 22, 2012, 3:00 pm – 4:30 pm(EDT). Submitted by Joseph P. Whalen (June 6, 2012)The invitation for this engagement indicates that: “During the session, USCIS economists will address the agency’s review of economic methodologies used in reviewing 1 EB-5 Immigrant Investor cases.”Obviously, the “Tenant-Occupancy” methodology will be on the agenda as it hasbeen much discussed and, in my opinion, poorly understood by many neophyteRegional Center principals, sponsors, and promoters. I believe that the EB-5stakeholder community is confused, in part, by similar terminology used indifferent but closely related contexts while having different meanings and/ormanifestations. Once distinctions are understood it then becomes clearer as to howto describe predictions as to job creation and “other positive economic effects”.The following are only some of the areas of confusion that I can see off the top ofmy head. TERM/CONCEPT EB-5 CONTEXT ECONOMICS CONTEXT DIRECT JOBS On the alien’s payroll; or A category of input/output data in an Econometric On the payroll of a Methodology or Economic business in which the alien Model used to produce an has an ownership interest, Economic Analysis (EA). such as: in a partnership; or by owning shares of a A base level of jobs created 8 CFR § 204.6(g) business; or as a principal on site in a business or in a holding company but facility. only when the business is wholly-owned; or owning Who it is that signs the stock in the company/corp. paychecks, is irrelevant when the job is merely being May be found in either the used as input data in a “Direct” or “Stand-Alone” complex mathematical or Enterprise; or as part of a statistical software program. non-Regional Center Group/Partnership; or in a Nexus can be stated in the Regional Center affiliated EA & found in an underlying project’s job count [low %] Business Plan (BP).1 Perhaps a better word would be “assessing”, “evaluating”, “determining” or “adjudicating”? Page 1 of 5
  2. 2. INDIRECT JOBS Jobs that are not on the The first line of secondaryA Ripple Effect will alien’s payroll. jobs created and attributable create jobs to a project development. Employee’s of a third-party [Suppliers of materials and throughout a wide who were made possible as services to the project area. It is the a result of the efforts of the developer and then the newReasonable Limit or EB-5 Pooled Investments cut-off that is often commercial enterprise(s).] of Regional Centerdebated between the affiliated projects. RC and USCIS. INDUCED JOBSA subset of Indirect Jobs Second line of secondary described above. jobs created by expenditures of the new direct and indirect employees described above.PILOT PROGRAM An undefined nebulous Provides contexts for nexus concept in the statute. between the efforts of the alien(s) through the Regional Center and the jobs created or preserved; foreign and domestic investments; new expenditures; new revenues; and any of the other resultant economic benefits, in the national or regional economies. REGIONAL An undefined nebulous Predictions and projections PRODUCTIVITY concept in the statute as stated in the EA which creating the “Pilot should include, but need not Program”. be limited to the factors 8 CFR § 204.6(m)(3)(iv): described at 8 CFR § 204.6 The “positive impact[s] on (m)(3)(iv), and is supported the regional or national by the “verifiable detail” economy in general as stated in § 204.6(m)(3)(ii) reflected by such factors as and supported by the increased household economically or statistically earnings, greater demand valid forecasting tools asked for business services, for in § 204.6(m)(3)(v) as utilities, maintenance and derived from 8 USC § 1153 repair, and construction Note or § 610(c) of Pub. L. both within and without the 102-395, as amended. regional center”...... Page 2 of 5
  3. 3. REVENUES An undefined nebulous Figures predicted by or GENERATED concept in the statute inspired by the Business creating the “Pilot Plan. Program”. Originally it was confined to “exports”. FULL-TIME A concept USCIS has A common statistical device EQUIVALENT fought as insufficient for used in Econometric Models (FTEs) job creation purposes. and is an industry standard that USCIS has had A concept USCIS should difficulty accepting. re-examine for the sake of fulfilling Congressional Intent in creating the “Pilot Program” in the first place. ECONOMIC Evidence that supports a The Economist’s work ANALYSIS Regional Center product. Application [I-924] or an 8 CFR § 204.6 alien’s RC affiliated I-526. The written report containing predictions and projections (m)(3)(i)-(v) Contains predictions on job of what the planned activity creation. will accomplish. And Contains much more Utilizes input data either Pub.L. 102-395 valuable supporting directly from, or inspired by § 610(c) information than USCIS the BP provided to the adjudicators have Economist. recognized so far.BUSINESS PLAN A detailed, comprehensive, A source of data for input in and credible plan that a model or that leads the contains, at a minimum, a economist in the right direct description of the business, to find such data.8 CFR § 204.6 (j)(4) its products, services, (i)(B), (ii), & (iii) and/or its objectives. .... The BP should establish Most importantly, the reliable categories as to: business plan must be (1) location of activities, and credible. (2) type(s) of new business or commercial enterprises, as “Certainly no astute well as the: investor would place half a (3) anticipated scope and million or a million dollars size of the project(s), into a business that he had (4) their timelines for Page 3 of 5
  4. 4. BUSINESS PLAN not thoroughly researched. construction, remodeling, (cont’d) Creating a comprehensive refurbishing, retooling, business plan as described staffing, above is normal practice (5) anticipated budget and for any business[person] expenditures; and it should seeking to operate a viable(6) explain the connections business.” between the various players and associated business Matter of Ho, 22 I&N Dec. (such as project partners and 206 (AAO 1998) at 213. suppliers among others) which is the NEXUS. EB-5 NEXUS “Especially where indirect The explanation found in the employment creation is Business Plan that being claimed, and the demonstrates how the nexus between the money various participants in the and the jobs is already overall project rely upon tenuous, [USCIS] has each other to do their part in an interest in examining, order to make the whole to a degree, the manner in thing work out in the end. which funds are being applied. The full amount “A connection or series of of money must be made connections linking two or available to the more things; or A connected business(es) most closely group or series; or A causal responsible for creating link” among others. I have the employment upon found it useful to explain it which the petition is in terms of a “cause and 7 AELP was the based. ” at p. 179 effect relationship” that Regional Center in clearly shows a palpable FN7 which the Aliens “Whether or not connectivity. In this instance Invested. $500,000 must be made “palpable” is defined as: available for the loans to “Able to be touched or felt:AELP made loans to export companies or Tangible; esp. of a feeling orbusinesses outside of whether $500,000 must atmosphere; So intense as to its approved area, merely be made available be almost touched or felt; which were also to the credit corporation [and my particular favorite]:outside of TEAs but extending the loans, it is easily perceptible by the did it at the TEA clear that making $500,000 mind: Noticeable and/or rate. available to AELP is not Manifest.” sufficient. AELP’s primary Page 4 of 5
  5. 5. EB-5 NEXUS purpose is apparently to Nexus needs to be described, (cont’d) locate potential alien explained, and demonstrated investors. AELP does not sufficiently to satisfy USCIS extend the loans to that those particular jobs the export companies and being claimed should be is not the entity most counted for the purpose of closely engaged in lifting conditions from the employment creation, aliens’ status. indirect or otherwise.” Matter of Izummi, 22 I&N Dec. 169 (AAO 1998) REGIONAL 8 CFR § 204.6(e) - Provides the parameters of CENTER Regional center means any the Economic Analysis as to economic unit, public or location and industry used to 8 CFR § 204.6 private, which is involved select data for input in a (m)(7)(ii) with the promotion of model. Commercially economic growth, available data sets will be including increased export selected based on the sales, improved regional approved operational productivity, job creation, parameters and scope of the and increased domestic Regional Center and the capital investment. specific project. 8 CFR § 216.6 This entity has a The assumptions as to job (a)(4)(i)-(iv) responsibility to its EB-5 creation and expenditures And investors to track data etc, stated in the EA, based INA § 216A(d)(1) and collect evidence for on the BP, will influence if Modified by compliance purposes and not dictate, the evidence to §610(c) to be submitted in be collected for compliance support of the investors’ reporting and to support I-829s. the investors’ I-829s.These few items are by no means the end, they are but a beginning to this dialogue.Sincerely,Joseph P. Whalene-mail: joseph.whalen774@gmail.com Page 5 of 5