DOCUMENT NUMBER: FR 19-05

FEDERAL REGISTER CITE: 70 FR 23775

DATE OF PUBLICATION: May 5, 2005

BILLING CODE: 4410-10

DEPARTMENT OF HOMELAND SECURITY

U.S. Citizenship and Immigration Services

8 CFR Part 214

[CIS No. 2347-05]

[DHS Docket No. DHS-2005-0014]

RIN 1615-AB32

Allocation of Additional H-1B Visas Created by the H-1B Visa Reform Act of 2004

AGENCY: U.S. Citizenship and Immigration Services, Department of Homeland Security.

ACTION: Interim rule with request for comments.

SUMMARY: This interim rule implements certain changes made by the Omnibus Appropriations Act for Fiscal Year 2005 to the numerical limits of the H-1B nonimmigrant visa category and the fees for filing of H-1B petitions. This interim rule also notifies the public of the procedures U.S. Citizenship and Immigration Services will use to allocate, in fiscal year 2005 and in future fiscal years starting with fiscal year 2006, the additional 20,000 H-1B numbers made available by the exemption created pursuant to that Act. This interim rule amends and clarifies the process by which U.S. Citizenship and Immigration Services, in the future, will allocate all petitions subject to numerical limitations under the Immigration and Nationality Act. This interim rule also notifies the public of additional fees that must be filed with certain H-1B petitions.

DATES: This rule is effective May 5, 2005. Written comments must be submitted by July 5, 2005.

ADDRESSES: You may submit comments, identified by DHS Docket No. DHS-2005-0014, by one of the following methods:

·     EPA Federal Partner EDOCKET Web site: http://www.epa.gov/feddocket . Follow instructions for submitting comments on the Web site.

·     Federal eRulemaking Portal: http://www.regulations.gov . Follow the instructions for submitting comments.

·     Mail: The Director, Regulatory Management Division, U.S. Citizenship and Immigration Services, Department of Homeland Security, 111 Massachusetts Avenue, NW., 2nd Floor, Washington, DC 20529. To ensure proper handling, please reference DHS Docket No. DHS-2005-0014 on your correspondence. This mailing address may also be used for paper, disk, or CD-ROM submissions.

·     Hand Delivery/Courier: U.S. Citizenship and Immigration Services, Department of Homeland Security, 111 Massachusetts Avenue, NW., 2nd Floor, Washington, DC 20529. Contact Telephone Number (202) 272-8377.

    Instructions : All submissions received must include the agency name and DHS Docket No. DHS-2005-0014. All comments received will be posted without change to http://www.epa.gov/feddocket , including any personal

information provided. For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Participation” heading of the SUPPLEMENTARY INFORMATION section of this document.

    Docket : For access to the docket to read background documents or comments received, go to http://www.epa.gov/feddocket You may also access the Federal eRulemaking Portal at http://www.regulations.gov . Submitted comments may also be inspected at the Regulatory Management Division, U.S. Citizenship and Immigration Services, Department of Homeland Security, 111 Massachusetts Avenue, NW., 2nd Floor, Washington, DC 20529. To make an appointment please contact the Regulatory Management Division at (202) 272-8377.

FOR FURTHER INFORMATION CONTACT: Kevin J. Cummings, Adjudications Officer, Business and Trade Services Branch/Program and Regulation Development, U.S. Citizenship and Immigration Services, Department of Homeland Security, 111 Massachusetts Avenue, NW., 3rd Floor, Washington, DC 20529, telephone (202) 353-8177.

SUPPLEMENTARY INFORMATION: This supplementary information section is organized as follows:

I. Public Participation

II. Background and Statutory Authority

    A. H-1B Nonimmigrant Classification

    B. H-1B Visa Reform Act of 2004

III. Effect of the H-1B Visa Reform Act of 2004 on FY 2005 Filings

IV. General Process for FY 2005 H-1B Filings

V. General Process for FY 2006 and Subsequent Fiscal Year H-1B Filings

VI. Allocation of H-1B Numbers in FY 2005, FY 2006 and Subsequent Fiscal Years

VII. Special Filing Procedures for Additional FY 2005 H-1B Numbers

    A. Date of Filing

    B. Filing Location and Method of Filing

    C. Required Forms

    D. Availability of Premium Processing Program

    E. Filing Fees

    F. Requested Start Dates

VIII. Special Additional Filing Procedures for FY 2006

    A. Method of Filing

    B. Upgrading FY 2006 Petitions

    C. Required Forms

    D. Availability of Premium Processing Program

    E. Filing Fees

IX. Section-by-Section AnalysisX. Regulatory Requirements

    A. Administrative Procedure Act (Good Cause exception)

    B. Regulatory Flexibility Act

    C. Unfunded Mandates Reform Act of 1995

    D. Small Business Regulatory Enforcement Fairness Act of 1996

    E. Executive Order 12866 (Regulatory Planning and Review)

    F. Executive Order 13132 (Federalism)

    G. Executive Order 12988 (Civil Justice Reform)

    H. Paperwork Reduction Act

I. Public Participation

    Interested persons are invited to participate in this rulemaking by submitting written data, views, or arguments on all aspects of the interim rule. U.S. Citizenship and Immigration Services (USCIS) also invites comments that relate to the economic or federalism effects that might result from this interim rule. Comments that will provide the most assistance to USCIS in developing these procedures will reference a specific portion of the interim rule, explain the reason for any recommended change, and includ e data, information, or authority that support such recommended change. See ADDRESSES above for information on how to submit comments.

II. Background and Statutory Authority

A. H-1B Nonimmigrant Classification

    Under Section 101(a)(15)(H) of the Immigration and Nationality Act (INA) and 8 CFR 214.2(h)(4), an H-1B nonimmigrant is an alien employed in a specialty occupation or a fashion model of distinguished merit and ability. A specialty occupation is an occupation that requires theoretical and practical application of a body of specialized knowledge and attainment of a bachelor's degree or higher degree in the specific specialty as a minimum qualification for entry into the United States.

    Section 214(g) of the INA provides that the total number of nonimmigrant aliens who may be issued H-1B visas, or otherwise granted H-1B status, may not exceed 65,000 during any fiscal year. Under the INA, the 65,000 cap does not include H-1B nonimmigrant aliens who are employed by, or have received offers of employment at: (1) An institution of higher education, or a related or affiliated nonprofit entity; or (2) a nonprofit research organization or a governmental research organization.

    On October 1, 2004, USCIS issued a press release announcing that USCIS had received a sufficient number of H-1B petitions to reach the statutory cap for fiscal year (FY) 2005, and that beginning October 2, 2004, USCIS would not accept for adjudication any H-1B petition for new employment containing a request for a work start date prior to October 1, 2005. A Notice to this effect subsequently was published in the Federal Register on November 23, 2004 at 69 FR 68154.

B. H-1B Visa Reform Act of 2004

    On December 8, 2004, the President signed the Omnibus Appropriations Act (OAA) for Fiscal Year 2005, Public Law 108-447, 118 Stat. 2809. Among the provisions of OAA is the H-1B Visa Reform Act of 2004. The H-1B Visa Reform Act of 2004 amends section 214(g)(5) of the INA by adding a third exemption, (C), to the H-1B cap:

(5) “The numerical limitations contained in paragraph (1)(a) shall not apply to any nonimmigrant alien issued a visa or otherwise provided status under section 1101(a)(15)(H)(i)(b) of this title who * * *

* * * * *

(C) has earned a masters' or higher degree from a United States institution of higher education (as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)) until the number of aliens who are exempted from such numerical limitation during such year exceeds 20,000).”

This amendment became effective 90 days after enactment, March 8, 2005. Although there is no direct legislative history for this provision, it has the purpose of expanding the availability of needed professional workers for employers in the United States.

    The H-1B Visa Reform Act of 2004 also imposed two additional fees that must be filed with H-1B petitions. First, section 214(c)(9) of the INA was amended to reinstitute and modify the additional fees previously imposed by the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA), Title IV of Div C., Public Law 105-277, which are used for scholarships for U.S. low income students and for job training for U.S. workers. (The ACWIA fees expired effective October 1, 2003). The H-1B Visa Reform A ct of 2004 raised the ACWIA fee to $1,500 or $750, depending on the size of the employer. Therefore, effective December 8, 2004, employers with 26 or more U.S. full-time-equivalent employees, including all affiliated or subsidiary entities, who seek to employ an H-1B nonimmigrant must pay $1,500, in addition to the base filing fee of $185 for a Form I-129, Petition for Temporary Nonimmigrant Worker. For employers with 25 or fewer U.S. full-time-equivalent employees, including all affiliated or subsidiary en tities, the fee is $750, in addition to the base filing fee of $185 for a Form I-129.

    Second, the H-1B Visa Reform Act of 2004 amended section 214(c) of the INA by adding a new subsection (c)(12) which imposes a $500 fraud prevention and detection fee on certain employers filing H-1B petitions. Effective March 8, 2005, employers seeking an initial grant of H-1B nonimmigrant status or authorization for an existing H-1B (or L-1 alien seeking to become an H-1B nonimmigrant) to change employers must submit the $500 fraud prevention and detection fee. The $500 fee does not need to be submitted by : (1) Employers who seek to extend a current H-1B alien's status where such an extension does not involve a change of employers, (2) employers who are seeking H-1B1, Chile-Singapore Free Trade Act nonimmigrants, or (3) dependents of H-1B principal beneficiaries.

    These fees must be filed to USCIS in addition to the base filing fee (currently $185) for the Form I-129, Petition for Temporary Nonimmigrant Worker. Payment for the $185 petition filing fee and the $1,500 (or $750) additional ACWIA fee may be made in the form of a single check or money order for the total amount due or two checks or money orders. Those petitioners who must pay the $500 fraud prevention and detection fee must pay with a check or money order that is separate from the additional ACWIA applica tion fees of $1,500 (or $750) and the $185 petition filing fees. Thus, in certain instances petitioners may have to, or elect to, file three separate checks or money orders--one for the $185 Form I-129 petition fee; one for the $1,500 or $750 additional ACWIA fee; and one for the $500 fraud prevention and detection fee.

    The new ACWIA and Fraud Detection and Prevention fees are statutorily-mandated and do not require a separate rulemaking to implement the new fee provisions. However, USCIS, in a future rulemaking, will codify these new fees on H-1B petitions and the associated exemptions in the regulations to provide a place for affected petitioners to find all fee-related information in one place. USCIS specifically will amend 8 CFR 214.2(h)(19), which currently addresses the fees initially required pursuant to ACWIA, to r eflect the enhanced ACWIA fees of $1,500 (or $750) and to codify the new fraud prevention and detection fees ($500) affecting all H and L petitioners.

III. Effect of H-1B Visa Reform Act of 2004 on FY 2005 Filings

    To implement the H-1B Visa Reform Act of 2004, USCIS had to consider the plain language of the statute which specifically limited the new exemption to aliens who have earned a U.S. master's degree or higher. USCIS has determined that it is a reasonable interpretation of the H-1B Visa Reform Act of 2004 to make available 20,000 new H-1B numbers in FY 2005, limited to H-1B nonimmigrant aliens who possess a U.S. earned master's or higher degree.

    USCIS will allocate the 20,000 new H-1B numbers authorized by the H-1B Visa Reform Act of 2004 in this manner for the following reasons. Congress left to the Secretary of Homeland Security broad discretion, through his authority under sections 103 and 214 of the INA, to prescribe regulations and procedures for the admission of nonimmigrant aliens, such as H-1B nonimmigrants. Thus, USCIS has broad discretion and authority to implement the H-1B Visa Reform Act of 2004.

    The H-1B Visa Reform Act of 2004 was enacted after the start of FY 2005 and after the receipt of all petitions necessary to reach the existing 65,000 H-1B cap for FY 2005. The amendment to section 214(g) of the INA, authorizing the cap exemption of 20,000 H-1B nonimmigrant aliens with U.S. master's or higher degrees, did not become effective until March 8, 2005. Congress did not specify any procedures for implementation or dictate the manner in which USCIS should allocate H-1B numbers made available pursuan t to the new exemption. Congress specifically did not require USCIS to “reopen” its review of H-1B petitions already received and re-characterize the petitions that would have qualified for the new exemption had it been in effect at the time the petitions were received. Thus, in order to give full effect to the newly created exemption, it is reasonable to do so going forward only, applying the exemption to up to 20,000 petitions seeking work start dates during FY 2005. It also appears that Congress intended for the fees for 20,000 new petitions to be generated during FY 2005 to serve the important purposes of supporting the development of the U.S. labor market and the detection and prevention of immigration fraud.

    USCIS has never previously been required to collect data concerning whether beneficiaries of H-1B petitions possess master's or higher degrees earned in the United States. While USCIS did collect information about the highest level of education of the beneficiary, it did not specifically collect information about whether the beneficiary had a U.S. masters or higher degree or whether the degree was earned from a U.S. institution. Thus, as to FY 2005, USCIS cannot accurately count the petitions already filed for FY 2005 on behalf of beneficiaries who have earned masters or higher degrees at U.S. institutions. USCIS has made amendments to its recordkeeping and data collection systems that will allow it, prospectively, to accurately capture the data needed to assess the exact number of H-1B nonimmigrant aliens who have a U.S. master's or higher degree.

    In light of the above reasons, for FY 2005, USCIS has determined that the only appropriate way to implement the H-1B Visa Reform Act of 2004 is to apply the 20,000 exemptions prospectively.

IV. General Process for FY 2005 H-1B Filings

    USCIS will reopen the FY 2005 H-1B filing period, effective May 12, 2005, and make available 20,000 new H-1B numbers for FY 2005. These additional H-1B numbers will be limited to U.S. employers seeking an H-1B nonimmigrant alien who has earned a master's or higher degree from a U.S. institution of higher education, as the statute provides.

    U.S. employers seeking an H-1B nonimmigrant alien for FY 2005 will file H-1B petitions through a special process, submitting the Form I-129 petition at a single USCIS service center--Vermont Service Center--at the address noted in section VII, paragraph A below. USCIS will accept and adjudicate properly filed H-1B petitions on a first-in, first-out basis until USCIS has allocated all 20,000 H-1B exemption numbers authorized, as provided in section VI below.

    As noted below in section VII, paragraph B, USCIS will not accept FY 2005 petitions via electronic filing (“e-filing”). USCIS is precluding e-filing for FY 2005 petitions because of the need to quickly and accurately identify those petitions that will be subject to the 20,000 numerical limit. Allowing e-filing would complicate this effort due to the additional DHS administrative burden associated with matching e-filed petitions with separately filed (through paper) signed labor condition applications (LCA) and evidence of required degrees (which in general cannot be submitted electronically).