What Counts as a Targeted Employment Area
Two very different tests share one label. One is a question of geography, settled from published federal delineations and a census population figure. The other is an arithmetic exercise over census tracts that produces a designation with a fixed term.
The rule in short
A targeted employment area is a rural area or an area the Secretary of Homeland Security has designated as one of high unemployment. Rural means outside every metropolitan statistical area and outside any city or town of twenty thousand or more. High unemployment means a census tract, or contiguous tracts where the enterprise is principally doing business, whose weighted average unemployment rate is at least 150 percent of the national rate. No state or local official may designate one.
A targeted employment area is a place where a smaller investment qualifies. The label covers two tests that have almost nothing in common. One is settled by asking whether a location falls outside two published boundaries. The other is an arithmetic exercise over census tracts, and it produces a designation with an expiry date.
The rural test and what it excludes
Rural area is defined negatively. It means any area other than one inside a metropolitan statistical area as designated by the Director of the Office of Management and Budget, and other than one inside the outer boundary of any city or town with a population of twenty thousand or more based on the most recent decennial census. Both exclusions have to be cleared. A location can sit well outside any city of that size and still fail because the surrounding county is part of a metropolitan statistical area.
Because the test runs on published delineations, it is usually answered from documents rather than argued. The work is in fixing the project's location precisely, confirming which delineation was current, and showing that the enterprise is principally doing business there rather than merely holding an address there.
The high unemployment calculation
The second route is a designation the Secretary of Homeland Security, or a departmental employee acting as designee, may make over a census tract or a group of contiguous census tracts. Two conditions must hold. The new commercial enterprise must be principally doing business in those tracts, and the weighted average unemployment rate across them, based on the labor force employment measure for each tract, must be at least 150 percent of the national average.
The Secretary may add a tract directly adjacent to the qualifying tract or group. That word does the real work. Under the earlier practice, long chains of tracts could be strung together to connect a prosperous site to a distressed one; now the group must be contiguous and any addition must touch it directly.
| Route | Test applied | Who may determine it | How long it holds |
|---|---|---|---|
| Rural area | Outside every metropolitan statistical area and outside any city or town of twenty thousand or more | Established from published delineations and census population figures | Until the underlying delineation or population figure changes |
| High unemployment area | Weighted average of the relevant tracts at or above 150 percent of the national rate | The Secretary of Homeland Security or a departmental designee | Two years, renewable for further two-year periods |
| Infrastructure project | Public works project with a governmental entity as the job-creating entity | The Secretary of Homeland Security or a departmental designee | Determined for the project as filed |
| State or local certification | Formerly used to certify high unemployment areas | No longer permitted for any official of a state or local government | Not available |
Who may draw the boundary now
The statute closes the question of authorship. A targeted employment area may not be designated as a high unemployment area by any federal official other than the Secretary or a departmental designee, nor by any official of a state or local government. The state certification letter, which for years was the standard evidence in an offering package, no longer designates anything.
That does not make state data useless. A state labor agency's tract-level statistics can still be the source material for the analysis submitted to the Department. The change is about who decides, not about where the numbers come from. The distinction matters when reviewing older offering documents, where a certification letter may be presented as though it settled the point.
Getting the area right settles the capital threshold and the reserved visa category. It says nothing about whether the enterprise will create the jobs claimed, whether the economic analysis is sound, or whether the offering complies with securities law. Petitions fail far more often on the credibility of the indirect job count than on the boundary of the area.
When the determination is made and how long it lasts
Timing differs by route. For a standalone investor, the designation runs for two years beginning at the time of investment. For a regional center investor, it runs for two years beginning when the project application is properly filed, which means the determination is made at the project stage and carried by every investor in that offering. Either way it may be renewed for one or more further two-year periods if the area still meets the test.
The area must qualify when the investment is made or when the petition is filed, whichever comes first. It does not have to still qualify later. An investor who put in the reduced amount during a live designation is not required to top up when it expires, and is not required to show the area still qualifies at the removal of conditions stage.
Where an offering is being marketed on the strength of a designation that is close to expiry, the practical question is whether later investors will be covered at all. This is a point on which promoters and investors often have different information, and a targeted employment area attorney reviewing the offering will normally ask for the filing receipt and the designation term before advising on the threshold that applies. The answer determines how much capital is actually required, which is not a detail an investor can safely take from marketing material.
What the record has to carry
For a rural claim: the precise location, the metropolitan statistical area delineation showing exclusion, and the census population figure for the nearest city or town. For a high unemployment claim: identification of the tracts, the basis for saying the enterprise is principally doing business in them, the tract-level labor force data, the weighted average calculation, and the national rate used as the comparator.
Adjacency has to be shown, not asserted, where an adjacent tract is included. A map that shows the group and the added tract touching is worth more than a paragraph describing the relationship. The rest of the evidentiary burden falls where it always does, on the documents described in what the initial investor petition must establish, and on the reporting obligations that follow under a regional center's designation and annual statement duties.
Points to carry away
- Rural status is defined by exclusion from metropolitan statistical areas and from cities or towns of twenty thousand or more.
- A high unemployment area is measured by a weighted average across the tracts where the enterprise is principally doing business.
- The threshold for high unemployment is at least 150 percent of the national unemployment rate.
- Only tracts directly adjacent to the qualifying tracts may be added to the group.
- No state or local official, and no federal official outside the Department, may make the designation.
- A high unemployment designation runs for two years and may be renewed for further two-year periods.
Questions readers ask
Does an investor have to add capital if the area stops qualifying?
No. The statute says in terms that an investor who invested the required amount in an area designated as one of high unemployment, during the period the designation was in effect, is not required to increase the investment because the designation later expires. The agency applies the same logic to rural investments and to the removal of conditions stage: the area does not have to still qualify when the petition to remove conditions is filed. What matters is the position when the investment was made or the petition filed.
Can a project sit outside a targeted employment area and still use the lower amount?
Only if it is an infrastructure project. The statute gives infrastructure projects the same reduced capital threshold as targeted employment areas without requiring them to be rural or high unemployment. An infrastructure project is one administered by a governmental entity that is itself the job-creating entity, contracting to receive investment as financing for maintaining, improving or constructing a public works project. That determination, like the high unemployment designation, may only be made by the Secretary or a departmental designee.
What unemployment data does the calculation use?
The statute requires a weighted average of the unemployment rate for the tracts, based on the labor force employment measure for each applicable tract, compared against the national average rate. It does not name a single dataset in the way a regulation might. In practice the analysis is built from published federal labor force and census tract data, and the credibility of the source is part of what the adjudicator is assessing. An analysis that cannot be reproduced from public data is the usual reason a claim fails.
Sources
- Cornell Legal Information Institute — 8 U.S.C. 1153, Allocation of Immigrant VisasDefines rural area, targeted employment area and the high unemployment designation process.
- USCIS Policy Manual — Volume 6, Part G, Chapter 2, Immigrant Petition Eligibility RequirementsThe agency's guidance on when a designation is made, how long it lasts and what it fixes.
- eCFR — 8 CFR 204.6, Petitions for Employment Creation AliensThe regulatory definitions that preceded the statutory amendments and still govern in part.
- Census Bureau — Metropolitan and Micropolitan Statistical AreasThe delineations used to determine whether a location sits inside a metropolitan statistical area.
- USCIS — Form I-956F, Application for Approval of an Investment in a Commercial EnterpriseThe project application at which the designation is sought in a regional center case.
- GovInfo — Public Law 117-103, Consolidated Appropriations Act (EB-5 Reform and Integrity Act of 2022)The enacted text removing state designation authority and setting the two-year designation term.
Liberty Law Library is a publication, not a law firm. This article states general rules and cites its sources; it is not advice about any particular case, and the law differs by state and changes over time.
More in Investor Immigration
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