Targeted Employment Areas (TEAs)

Question: What is the meaning of a “geographic subdivision” in 8 CFR § 204.6(i)? What are the limitations in creating and designating such a special area? (Assume that the high unemployment data yields a qualifying rate.) The words geography or geographic refers to physical features on the Earth’s surface; therefore, a geographic subdivision would refer to an area carved out based on physical features. For example: Central Valley, San Joaquin Valley. Yet, current practice by applicants interprets it to be any area carved out at will, irrespective of geographical and political boundaries. It goes as far as creating an area by “statistical gymnastics” that yields a qualifying rate for high unemployment area designation and bears no relationship to any economic or employment effect of the prospective business.

Answer: State governments have the discretion to decide whether to issue TEA designations based upon high unemployment. 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]:

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.