State TEA Designation Authorities

Under the pre-RIA framework, Section 203(b)(5)(B)(iii) of the Immigration and Nationality Act granted state governors broad discretion to designate Targeted Employment Areas. Governors could certify that an area met the statutory unemployment threshold, and USCIS generally deferred to these state-level determinations. This discretion extended to the methodology for combining census tracts, which allowed states to join high-unemployment tracts with low-unemployment tracts to create composite areas that met the 150% threshold on paper.

This practice, often referred to as gerrymandering, drew significant criticism from Congress, GAO, and the DHS Office of Inspector General. Investigators found instances where project sites in affluent urban neighborhoods qualified as TEAs because the state had combined the project’s census tract with distant, economically distressed tracts. The result was that the reduced investment amount ($500,000 under the old framework) was available for projects in locations that clearly did not face genuine economic distress.

Section 108 of the RIA addressed this problem directly by transferring primary TEA designation authority to DHS. Under the new framework, DHS applies standardized criteria using federal economic data, and the methodology for combining census tracts follows prescribed rules that prevent the geographic manipulation that characterized the previous system.

DHS determines TEA qualification based on two primary categories: high unemployment areas and rural areas. For high unemployment TEAs, the area must demonstrate an unemployment rate of at least 150% of the national average. DHS calculates this threshold using data from the Bureau of Labor Statistics (BLS) and the American Community Survey (ACS) published by the U.S. Census Bureau. The analysis operates at the census tract level, with standardized rules governing how adjacent tracts may be combined.

Rural areas qualify automatically. A location is classified as rural if it falls outside any metropolitan statistical area (as defined by the Office of Management and Budget) and outside any city or town with a population of 20,000 or more. Rural TEA qualification does not require unemployment data analysis; geographic classification alone is sufficient.

USCIS maintains an online TEA designation tool on its website that allows users to input a specific address and determine whether it qualifies as a TEA. The tool applies current BLS and ACS data and returns the TEA classification for the queried location. Immigration attorneys and project developers routinely use this tool during the petition preparation phase to confirm TEA qualification before filing.

Although the RIA transferred primary designation authority to DHS, state agencies continue to play a meaningful role in the EB-5 ecosystem. Several states maintain dedicated EB-5 economic development offices or have designated staff within their departments of commerce or labor who work with project developers seeking TEA documentation.

States can submit data and proposed TEA designations to USCIS for consideration. Some states continue to issue TEA letters based on their own economic analysis. While these state-issued letters are not binding on USCIS, they can serve as supporting evidence in an I-526E petition. USCIS evaluates the state submission alongside its own analysis and makes the final determination.

State agencies also serve as a resource for project developers navigating the TEA qualification process. Many states publish guidance documents explaining the current federal TEA criteria, provide preliminary assessments of whether a proposed project location is likely to qualify, and assist with the data compilation needed for USCIS submission. States with active EB-5 programs, such as Vermont, South Dakota, and California, have historically maintained robust support infrastructure for regional centers and project developers operating within their borders.

Rural TEA qualification is the most straightforward category because it relies solely on geographic classification rather than economic data. An area qualifies as rural if it meets two conditions: it must be located outside any metropolitan statistical area (MSA) as defined by the Office of Management and Budget, and it must be located outside any city or town with a population of 20,000 or more.

The OMB updates MSA definitions periodically based on Census Bureau population data. MSAs are defined as core areas with a population of at least 50,000, together with adjacent communities that have a high degree of economic and social integration with the core. Locations outside these defined metropolitan areas are eligible for rural classification.

Rural TEA status carries additional advantages under the RIA. The rural visa set-aside category receives 20% of the annual EB-5 visa allocation (approximately 2,000 visas including derivatives). Because demand for rural set-aside visas has not yet exceeded the annual allocation, investors in rural projects currently benefit from visa availability that is not subject to country-based backlogs. This makes the rural category especially attractive for investors from India and China, who face multi-year waits in the unreserved category.

High unemployment TEAs must demonstrate an unemployment rate of at least 150% of the national average unemployment rate. Under the current framework, DHS calculates this threshold using official data from the Bureau of Labor Statistics (Local Area Unemployment Statistics program) and the American Community Survey published by the U.S. Census Bureau. The analysis is conducted at the census tract level, which provides granular geographic precision.

The RIA imposed standardized rules for combining census tracts, addressing the gerrymandering problem that existed under the previous state-controlled system. Under DHS methodology, adjacent census tracts may be combined only if they share a geographic boundary and the resulting combined area meets the 150% unemployment threshold. The specific rules governing tract combination are designed to ensure that the area designated as a TEA reflects genuine economic distress rather than statistical manipulation.

The high unemployment visa set-aside category receives 10% of the annual EB-5 allocation (approximately 1,000 visas including derivatives). Like the rural category, high unemployment set-aside visas are currently available without country-based backlogs, offering processing advantages for investors from oversubscribed countries. However, as demand for EB-5 visas increases across all set-aside categories, this availability may change in future fiscal years.

Reform and Integrity Act (Section 108) | The complete section by section analysis of the RIA, including TEA reform provisions.

TEA Categories Compared | Side by side comparison of rural, high unemployment, and infrastructure TEA categories.

Rural vs Urban vs Infrastructure | Detailed comparison of investment categories, visa availability, and processing advantages.

Investment Threshold Calculator | Calculate the minimum investment amount for TEA and standard EB-5 projects.