Executive Intent in EB-5: It Is What It Is, For Now. -OR- Past, Present and Future Tension
Introduction: Knowing One's Product & Customer-Base:
USCIS has some of the most demanding, whiny, big cry-baby customers of anyone in the entire government. Some of the common attitudes encountered are: "gimme, gimme, gimme"; or "I want what I want and I want it now"; or "Evidence? What's evidence?"; or "That's the way we do it in MY country"; or some people try to bride USCIS employees because it is their custom but in the U.S. it may lead to prosecution; and my personal least favorite--some actually believe that if they are annoying enough, for long enough, they will be appeased just to be gotten rid of. That last one often results in a call for a security escort out of the building.
As the "Gate-Keepers" to American Society, the purposes and perspectives of the various DHS immigration-related agencies on a whole host of topics is quite different compared to those of other agencies such as the Small Business Administration (SBA). The immigrant's path most often begins with a petition being filed on their behalf. USCIS is charged with administering specific statutory authority found in the Immigration and Nationality Act (INA) to determine eligibility for the visa classification of alien beneficiaries according to specific statutory provisions. There is only so much to work with.
The INA is codified in Title 8 - Aliens and Nationality, of the United States Code (USC), Chapter 12 - Immigration and Nationality [8 USC ] however, the USC sections (§) do not match the INA § equivalents.
INA § 201 - WORLDWIDE LEVEL OF IMMIGRATION [8 USC § 1151]
INA § 202 - NUMERICAL LIMITATION TO ANY SINGLE FOREIGN STATE [8 USC § 1152]
INA § 203 - ALLOCATION OF IMMIGRANT VISAS [8 USC § 1153]
(b) Preference Allocation for Employment-Based Immigrants. - Aliens subject to the worldwide level specified in section 201(d) for employment-based immigrants in a fiscal year shall be allotted visas as follows:
(5) Employment creation. -
(A) In general. - Visas shall be made available, in a number not to exceed 7.1 percent of such worldwide level, to qualified immigrants seeking to enter the United States for the purpose of engaging in a new commercial enterprise (including a limited partnership)--
INA§ 204 - PROCEDURE FOR GRANTING IMMIGRANT VISAS [8 USC § 1154]
(b) After an investigation of the facts in each case, ......, the [Secretary of Homeland Security] shall, if he determines that the facts stated in the petition are true and that the alien in behalf of whom the petition is made ....... is eligible for preference under subsection (a) or (b) of section 203, approve the petition and forward one copy thereof to the Department of State. The Secretary of State shall then authorize the consular officer concerned to grant the preference status.
Beyond the EB-5 Immigrant Visa described in INA § 203(b)(5) [8 USC § 1153(b)(5)], there is also the Pilot Program containing its Regional Centers. The statute creating the Regional Centers is not actually a part of the INA but rather it is only found in the associated USC Title as: 8 USC § 1153 NOTE: "Pilot Immigration Program" which was created through Pub. L. 102-395 (The Judiciary Appropriations Act of 1993), title VI, Sec. 610, Oct. 6, 1992, 106 Stat. 1874, as amended. It's not perfect but it is what it is and the rest of us have to deal with it.
Ambiguity, Filling Gaps, & Deference
Where Congress has left ambiguity in a statute or directed an agency or official to "implement" a provision i.e. promulgate a regulation (and with regard to EB-5, they did both), then the Executive Department and/or Agency charged with administering that statute or particular provision or program may (and in almost every case must) fill the gap as it deems appropriate. Such gap-filling is then subject to judicial review for legality and especially Constitutionality. Courts are supposed to give appropriate deference to the interpretations made by the executive branch as to the application and enforcement of the statutes that Congress has saddled it with. This expected deference has been recognized by the U.S. Supreme Court in two very important cases: Chevron and Brand X . On October 25, 2011, the Ninth Circuit again weighed in on the topic in order to clarify its application of deference in light of Brand X to its own prior precedents. See Gonzalez v. U.S. Department Of Homeland Security (DHS), No. 09-35174 at this link .
In addition, Congress has codified the expected judicial deference specifically within the immigration and nationality context via a provision of the Homeland Security Act (HSA ) of 2002, now found at 6 USC § 522 . The Board of Immigration Appeals (BIA) has also adopted a form of administrative deference with regard to "Executive Intent" expressed in Federal Register (FR) promulgations of agency regulations. This mirrors how it and the courts have treated "Congressional Intent" expressed in the Congressional Record during the debates over and development of statutes.
The BIA still finds that it lacks jurisdiction to consider broad constitutionality issues when an alien challenges a statute. On the other hand, it can and does analyze the due process issues created and/or addressed by regulations that interpret statutes as well as policy statements as to how the statutes and regulations will be applied to cases. The AAO also has a role to play in these considerations but has not issued many actual precedents on topic or much of anything else.
For instance, Matter of Cruz De Ortiz, 25 I&N Dec. 601 (BIA 2011), includes:
"It is clear that neither we nor the Immigration Judges have authority to rule on the constitutionality of the statutes we administer. See Matter of D-R-, 25 I&N Dec. 445, 456 (BIA 2011); Matter of Gonzalez-Camarillo, 21 I&N Dec. 937, 940-42 (BIA 1997) (holding that we would not address the respondent's equal protection argument because we lack jurisdiction to consider the constitutionality of the Act); Matter of Cenatice, 16 I&N Dec. 162, 166 (BIA 1977)."
The BIA further explained in Matter of Figueroa, 25 I&N Dec. 596 (BIA 2011):
"When interpreting statutes and regulations, we look first to the plain meaning of the language and are required to give effect to unambiguously expressed intent. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984); Matter of F-P-R-, 24 I&N Dec. 681, 683 (BIA 2008). Executive intent is presumed to be expressed by the ordinary meaning of the words used. Matter of F-P-R-, 24 I&N Dec. at 683; see also INS v. Cardoza-Fonseca, 480 U.S. 421, 431 (1987). We also construe a statute or regulation to give effect to all of its provisions. Matter of E-L-H-, 23 I&N Dec. 814, 823 (BIA 2005); Matter of Masri, 22 I&N Dec. 1145, 1148 (BIA 1999)."
Changing Contexts & A Changed Playing-Field
This BIA (and AAO) deference to Legacy Immigration and Naturalization Service (INS), and the various DHS components [as well as other agencies' regulations (DOL, DOS, SSA, SEC, OFAC, etc...)] was made necessary because of the separation of Legacy INS functions from the Department of Justice (DOJ). The Executive Office of Immigration Review (EOIR) is home to the BIA and Immigration Courts and remains in DOJ under the Attorney General (A.G.). INA § 103(a)(1) contains a proviso that the ultimate legal interpretation by the A.G. will be controlling. However, certain aspects of immigration and nationality law enforcement and interpretation now fall outside the primary grasp and expertise of the A.G. and DOJ agencies such as the BIA. For instance, USCIS determines eligibility for most benefits available under the INA. USCIS can also set Precedents through its Administrative Appeals Office (AAO) in the exercise of the authority delegated to it by the Secretary of Homeland Security in the same manner as the BIA issues Precedents under the delegated authority from the A.G.
In a later statutory amendment pertaining to the overall EB-5 Immigrant Investor Program, Congress actually cited to the INS regulations implementing EB-5. Those legislatively cited regulations are found at 8 CFR § 204.6. If Congress can show acknowledgement of agency interpretations then it is not a great stretch of the imagination or unreasonable to expect some deference between Executive Departments and Agencies.
Sources of "Executive Intent"
The primary source of official Executive Intent are the specific rules within the Code of Federal Regulations (CFR). Agencies also create and publish Policy and Procedural manuals and memoranda as guidance for their employees. They may even publish practice advisories, technical assistance letters , or legal opinions of its counsel for customers and the practitioners before them. In addition to the aforementioned items, there is another, oft-overlooked source of Executive Intent. The importance of the explanatory material and background discussion included in a rule's supplementary information and background portions of the FR notices as well as the public comments and official responses to them is that this material can have binding effect as a published official interpretation.
An example of rulemaking Executive Intent is illustrated and found in 67 FR 54877-54905. On August 26, 2002, DOJ published on behalf of the Board of Immigration Appeals, a final rule, effective September 25, 2002, entitled:
"Procedural Reforms To Improve Case Management" which included:
Official Recognition of Rulemaking Expressions of Executive Intent
Matter of A-A, 20 I&N Dec. 492 (BIA 1992) specifically dealt with an alien who had been convicted of murder and sought relief under former INA § 212(c). Even in that undoubtedly extremely critical and crucial matter, the BIA acknowledged the weight to be given to the information contained in the Supplementary Information associated with the promulgation of a substantive regulatory rule.
"Pursuant to his authority under section 103(a) of the Act, 8 U.S.C. § 1103(a) (1988), the Attorney General promulgated a regulation governing the filing of applications for section 212(c) relief under the amended Act. See 8 C.F.R. § 212.3 (1992). Issued 2 months before the enactment of the 1991 Amendments, this regulation parrots the language of the statutory bar as enacted by the 1990 Act. The regulation directs a district director or immigration judge to deny an application for advance permission to enter under section 212(c) of the Act if the alien has been convicted of an aggravated felony, as defined by section 101(a)(43) of the Act, 8 U.S.C. § 1101(a)(43) (Supp. II 1990), and has served a term of imprisonment of at least 5 years for such conviction. Id.
Footnotes in Original:
"22 The supplementary information accompanying the regulation clarified that this interpretation of the phrase, "shall apply to admissions," is consistent with the long-established view of the Attorney General and the federal courts that an application for section 212(c) relief filed in the context of deportation proceedings is equivalent to one made at the time an alien physically seeks admission into the United States. See 56 Fed. Reg. 50,033 (1991) (supplementary information); see also Tapia-Acuna v. INS , 640 F.2d 223 (9th Cir. 1981); Francis v. INS , 532 F.2d 268 (2d Cir. 1976); Matter of Hernandez-Casillas, supra ; Matter of Smith , 11 I&N Dec. 325 (BIA 1965); Matter of S- , 6 I&N Dec. 392 (BIA 1954; A.G. 1955)."Less Than" Official Recognition of Rulemaking Expressions of Executive Intent
From a non-precedent AAO Decisions at: Jan132010_02C1101.pdf.
"As required under section 2(b)(l) of the Special Immigrant Nonminister Religious Worker Program Act, Pub. L. No. 110-391, 122 Stat. 4193 (2008), U.S. Citizenship and Immigration Services (USCIS) promulgated a rule setting forth new regulations for special immigrant religious worker petitions. Supplementary information published with the new rule specified:Setting the Stage for Learning New/Current Executive Intent Specific to EB-5
With all the foregoing in mind, the current USCIS re-imagining and restructuring of the EB-5 Immigrant Investor Program will likely cause some upsets to existing expectations and the relevant administrative precedents. Most EB-5 practitioners will likely be thinking only of the four EB-5 AAO Precedents of 1998. However, there are additional BIA Precedents dating back to 1967 , in the immigrant investor context under a former incarnation of the investor program under the recently-repealed 8 CFR § 212.8 (b)(4). In addition, some new regulations or amendments are likely to be promulgated soon. Whenever there are big changes to regulations and processes in any program there are sure to be challenges and controversy in the wake of such changes, i.e. growing pains. As any such challenges come along, the development of a framework for, and applicable principles of administrative deference to Executive Intent will be put to the test through trial-and-error practical application in actual cases.
Recent Federal Register Expression of Executive Intent Specific to EB-5
USCIS has recently proposed to define some substantive EB-5 terms specifically for the application of the particular law being implemented by an EB-5 rule relating only to a specific sub-set of alien entrepreneurs. In so doing, USCIS is also making certain clarifications to terms relevant beyond the scope of this limited rule. See 76 FR 59927-59950, September 28, 2011.
Public Law 107-273 requires DHS to consider whether the eligible alien is in "substantial compliance" with the capital investment requirement. Public Law 107-273 sections 11031(c)(1)(A)(iii), 11031(c)(2)(E)(iii), and 11032(e)(2)(C). By contrast, removing the conditions from permanent resident status of an alien entrepreneur typically requires aliens to demonstrate that they invested, or were actively in the process of investing, the requisite amount of capital. See INA section 216A(d)(1)(A)(i), 8 U.S.C. 1186b(d)(1)(A)(i). The requirement to be "actively in the process of investing" capital has no quantitative aspect with respect to the amount of the investment. Instead, it focuses on the process of investing the required capital, and could be satisfied by showing that the process of investing the capital has been commenced and is continuing. "Substantial compliance" suggests that the substance of the capital investment has in fact been made. [Note: These folks have already had around 13 to 16+ years to invest!]
Interpreting "Actively In The Process Of Investing"
Within the immigrant investor context (now known as EB-5), the phrase "actively in the process of investing" has evolved over time since its introduction back in 1966. That phrase was carried over from a recently repealed obsolete regulation at 8 CFR § 212.8 (b)(4). The phrase has been included in various Precedents from the BIA back when it was still within the Legacy Immigration and Naturalization Service (INS) and as such were often times reviews of INS District Directors' and Regional Commissioners' Decisions akin to those of today's USCIS Service Center, District, and Field Office Directors' Decisions. It would behoove the BIA and AAO to keep in mind the importance of the interpretations expressed in the supplementary information in the Federal Register during the notice and comment rulemaking process as they develop in EB-5 as well as revisit the old precedents.
Matter of Liu, 15 I&N Dec. 206 (BIA 1975), Decided by the Board March 13, 1975.
The IJ DENIED adjustment for an insufficient amount of investment in his landscaping and yard service business in Hawaii and for not being actively investing. The alien claimed to be "actively in the process of investing" however, he had held back investing until and unless he was granted adjustment of status. He put forth a bank statement indicating that he has enough to invest in additional equipment that would bring his full amount over $10,000.00.
In addition, since he filed early enough, he could be considered under the prior regulation that did not specify any minimum amount. The prior regulation also allowed for one to be "actively in the process of investing" but he was affirmatively withholding further investment impermissibly conditioned on attaining adjustment of status. This decision made clear that that type of arrangement would not be honored under Heitland and Ahmad as idle funds do not equate to an investment. The case however, was remanded for further fact-finding [probably accompanied by a wink and a nudge to "put up or shut up".]
Above found at: http://www.justice.gov/eoir/vll/intdec/vol15/2354.pdf
See also: Matter of Lee, 15 I&N Dec. 408 (BIA 1975) for more on another early determination on the unacceptability of a promissory note that was conditioned on attaining resident status first.
Matter of Shon Ning Lee, 15 I&N Dec. 439 (BIA 1975), Decided by the Board August 26, 1975, aff'd, Shon Ning Lee v. INS, 576 F.2d 1380 (9th Cir. 1978) or No. 77-2681 (June 13, 1978).
From the Ninth Circuit:
"The major issue is whether the motion to reopen is a new application or a renewal of a previously denied application. If it is a renewal, as Lee argues, a visa could be available to Lee. If the former, the BIA was correct in finding Lee ineligible for resident status. We have concluded that Lee's motion to reopen was a new application." At 2 "On April 3, 1973, Lee filed with the District Director an application for permanent resident status. A previous application, not relevant here, had already been denied. In this application, Lee sought admission as a nonpreference immigrant who was exempted from the labor certification requirements of 8 U.S.C. § 1182(a)(14) on the ground that she was an alien investor within the purview of 8 C.F.R. § 212.8(b)(4). The District Director found that Lee was not entitled to the claimed exemption because she had not invested in and was not actively in the process of investing in a commercial or agricultural enterprise. 8 C.F.R. § 212.8(b)(4). He denied the application." At 6 [Emphasis added.] "At oral argument before the BIA in December 1974, Lee's counsel stated that Lee owned no business at the time of argument and that no business relating to Lee was identifiable. Nine months after argument, in August 1975, the BIA affirmed the denial. During this nine-month period, visas for Chinese nonpreference immigrants apparently became available on three occasions." At 8
Lee claimed that she was "looking for a suitable investment" and by that mere assertion she should be viewed as "actively in the process of investing". She claimed that on the advice of her attorney she should only commit to an investment after obtaining her LPR status. Neither the INS, BIA, nor 9th Circuit agreed with her "attorney's advice" or that interpretation of the investor visa eligibility requirements.
Her later allegation that she had actually invested in November, a month prior to the last BIA hearing (which heard oral argument from her so-called attorney in December) and was therefore entitled to recapture an earlier priority date was found unacceptable (and dubious). The Court (and everyone with half a brain) questioned why that information, if it was true, would conceivably have been withheld from the last BIA hearing in December 1974.
"On February 25, 1976, the BIA received the motion to reopen in question here. The motion attempts to demonstrate once more Lee's entitlement to permanent resident status as an alien investor and shows that Lee had actually purchased a business in November, 1974, one month before the oral argument mentioned above. The BIA treated the motion as a new application for permanent resident status with a filing date of February 25, 1976. Under the terms of 8 U.S.C. § 1255, the BIA found that Lee was not eligible for permanent resident status because a visa was not available to her on this filing date." At 9
BIA Decision at: http://www.justice.gov/eoir/vll/intdec/vol15/2424.pdf
9th Circuit Decision at: http://openjurist.org/576/f2d/1380
Matter of Khan, 16 I&N Dec. 138 (BIA 1977), Decided by the Board March 15, 1977. The respondent moved to reopen his deportation order in order to apply for adjustment as an investor.
At that time, he had demonstrated that he had invested $8,600.00 which was less than the required minimum of $10,000.00. He argued that he was "actively in the process of investing" additional funds and "should be given a reasonable period of time to complete the investment" At p. 140.
He could not show any evidence of any future commitment in connection with that claim. He presented no "copies of contracts showing a legal commitment to make certain expenditures, or similar items" at p. 141. The burden of proof rests on the alien and the evidence must be unambiguous, any doubts will be resolved against the "investor", Cf. Shaw and Ahmand. [Emphasis added.]
The IJ's DENIAL was upheld and the Appeal was DISMISSED.
Above found at: http://www.justice.gov/eoir/vll/intdec/vol16/2565.pdf
Matter of Lee, 15 I&N Dec. 408 (BIA 1975), Decided by the Board July 28, 1975.
Assuming arguendo that a promissory note could be counted, this one failed miserably due to its conditional basis. Lee only invested $5,000.00 in a restaurant and put up a "promissory note" for an additional $5,000.00 but only payable under the condition that he gains adjustment of status first. In addition, he was employed there as a cook. His employment placed him in direct competition with American labor and is disqualifying for any "investor". This was an obvious attempt to circumvent the labor certification process and use the "investment" as a conduit for his own entrance into the job market improperly and without an unattainable labor certification.
The IJ's DENIAL was upheld and the Appeal was DISMISSED.
Above found at: http://www.justice.gov/eoir/vll/intdec/vol15/2415.pdf
Matter of Konishi, 16 I&N Dec. 549 (BIA 1978), Decided by the Board July 5, 1978. The respondent was ordered deported. The IJ had DENIED the investor classification and adjustment of status. The Appeal was DISMISSED.
The respondent was a self-employed artist who operated a single-artist gallery with no employees other than himself. The respondent's gallery was viewed as merely a conduit to sell a product produced by his own labor. Speculation as to the possibility of needing an employee at sometime in the future was unpersuasive.
Above found at: http://www.justice.gov/eoir/vll/intdec/vol16/2658.pdf
Matter of Izummi, 22 I&N Dec. 169 (AAO 1998) held, in pertinent part:
(11) Under certain circumstances, a promissory note that does not itself constitute capital may constitute evidence that the alien is "in the process of investing" other capital, such as cash. In such a case, the petitioner must substantially complete payments on the promissory note prior to the end of the two-year conditional period.
(12) Whether the promissory note constitutes capital or is simply evidence that the alien is in the process of investing other capital, nearly all of the money due under the promissory note must be payable within two years, without provisions for extensions. .....
Above found at: http://www.justice.gov/eoir/vll/intdec/vol22/3360.pdf Although USCIS has not actually defined the phrase "actively in the process of investing", the implementing regulations do provide further guidance on the evidentiary aspect of this question of fact. See 8 CFR § 204.6(j)(2). Add in the discussions from the older BIA Precedents and the recently expressed Executive Intent from the latest EB-5 rulemaking and a plain understanding is not so hard to find. This is only one example to get the discussion started.
1 8 USC includes Acts and amendments beyond the INA. INA § 101[8 USC § 1101](a)(17) The term "immigration laws" includes this chapter and all laws, conventions, and treaties of the United States relating to the immigration, exclusion, deportation, expulsion, or removal of aliens.
Joseph P. Whalen is not an attorney. He is a former government employee who is familiar with the INA. His education is in Anthroplogy with a concentration in Archaeology and has both a BA (from SUNY Buffalo) and an MA (from San Francisco State University) in Anthroplogogy. He previously worked as an Archaeologist for the U.S. Forest Service before becoming an Adjudicator with INS which became USCIS.
The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.