[Senate Report 106-260]
[From the U.S. Government Publishing Office]
Calendar No. 490
106th Congress Report
SENATE
2d Session 106-260
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AMERICAN COMPETITIVENESS IN THE TWENTY-FIRST CENTURY ACT
_______
April 11, 2000.--Ordered to be printed
_______
Mr. Hatch, from the Committee on the Judiciary, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 2045]
The Committee on the Judiciary, to which was referred the
bill (S. 2045) to amend the Immigration and Nationality Act
with respect to H-1B nonimmigrant aliens, having considered the
same, reports favorably thereon with amendments and recommends
that the bill as amended do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Legislative history..............................................3
III. Discussion.......................................................4
IV. Vote of the Committee...........................................20
V. Section-by-section analysis.....................................21
VI. Cost estimate...................................................24
VII. Regulatory impact statement.....................................29
VIII.Additional views of Senators Leahy, Kennedy, Biden, Feingold,
Torricelli, and Schumer.........................................30
IX. Changes in existing law.........................................43
I. Purpose
Senate bill 2045, the American Competitiveness in the 21st
Century Act, is an important piece of legislation that builds
on the American Competitiveness and Workforce Improvement Act,
which became law in 1998. That bill increased the annual
ceiling for admission of H-1B nonimmigrants from 65,000, set in
the 1990 Immigration Act, to 115,000 in fiscal year 1999 and
fiscal year 2000, and 107,500 in fiscal year 2001. The bill
also strengthened enforcement of the terms and conditions of H-
1B visas and levied a $500 per visa fee to fund training and
scholarships for U.S. workers and students.
The rationale for the 1998 bill was explained at length in
the Committee report filed with that legislation. In the
Information Age, when skilled workers are at a premium, America
faces a serious dilemma when employers find that they cannot
grow, innovate, and compete in global markets without increased
access to skilled personnel. That access, however, was being
curbed by a cap on H-1B visas put in place almost a decade
earlier, in 1990, when no one understood the scope of the
information revolution that was about to hit.
The Committee also noted then that even apart from
shortages in particular fields, in our increasingly global
economy, highly skilled foreign workers are certain to be in a
position to make unique contributions to the U.S. economy. A
person from another country may simply be a uniquely talented
individual with unique knowledge and skills. Such a person may
also have specialized knowledge about a subject far more
prominently studied abroad than in the United States. One
prominent American producer of food products, for example,
employs an expert on Chinese wheat in its research division, a
topic regarding which no American is likely to be as well
informed. Such a person may also be particularly qualified to
help a company localize services or products to be sold abroad
based on his or her native knowledge of the language or culture
of the market where the services or products will be sold.
Finally, the company may be building a global workforce (for
example the employer has planned that the person will work in
the United States to gain experience for a period of years
before being sent to work overseas for the employer).
What was true in 1998 remains true today. In fact, in 1998,
the error Congress made was in underestimating the workforce
needs of the United States in the year 2000. Despite the
increase in the H-1B ceiling in 1998, a tight labor market,
increasing globalization and a burgeoning economy have combined
to increase demand for skilled workers even beyond what was
forecast at that time. As a result, the 1998 bill has proven to
be insufficient to meet the current demand for skilled
professionals. Even in the first year of the visa increase, the
1999 cap on H-1B visas was reached in June of last year, at the
end of 9 months rather than 12. According to the INS, when
pending applications are factored in, we have already hit the
fiscal year 2000 cap even though we are only 6 months into the
new fiscal year. Accordingly, without this legislation, U.S.
employers will not be able to lawfully hire skilled foreign
nationals in the United States on H-1B's for the remainder of
fiscal year 2000. Moreover, without legislative action, the
problem will worsen in each succeeding fiscal year as extensive
backlogs develop.
Our employers' current inability to hire skilled personnel
presents both a short-term and a long-term problem. The country
needs to increase its access to skilled personnel immediately
in order to prevent current needs from going unfilled. To meet
these needs over the long term, however, the American education
system must produce more young people interested in, and
qualified to enter, key fields, and we must increase our other
training efforts, so that more Americans can be prepared to
keep this country at the cutting edge and competitive in global
markets.
S. 2045 addresses both aspects of this problem. In order to
meet immediate needs, the bill raises the current ceiling on
temporary visas to 195,000 for fiscal year 2000, fiscal year
2001, and fiscal year 2002. In addition, it provides for
exemptions from the ceiling for graduate degree recipients from
American universities and personnel at universities and
research facilities to allow these educators and top graduates
to remain in the country.
S. 2045 also addresses the long-term problem that too few
U.S. students are entering and excelling in mathematics,
computer science, engineering and related fields. It contains
measures to encourage more young people to study mathematics,
engineering and computer science and to train more Americans in
these areas. Specifically, the bill extends the $500 per visa
fee originally authorized in the 1998 bill. This fee is
assessed on each initial petition for H-1B status for an
individual, on each initial application for extension of that
individual's status, and on each petition required on account
of a change of employer or concurrent employment. It funds
scholarships for U.S. students and training for U.S. workers.
Using the same assumptions on the rate of renewals, changes of
employer and the like that the Committee and the administration
relied on in estimating the impact of the 1998 legislation, the
increase in visas should result in total funding for training,
scholarships and administration of H-1B visas of approximately
$450 million over fiscal year 2000, fiscal year 2001, and
fiscal year 2002. The Committee anticipates that this funding
will allow for 40,000 scholarships to U.S. students, thereby
helping them to choose these important fields.
II. Legislative History
This legislation was introduced by Senator Hatch and is
cosponsored by Senators Abraham, Gramm, Graham, Lieberman,
Feinstein, Lott, Nickles, Mack, Specter, DeWine, Ashcroft,
McConnell, Gorton, Hagel, Bennett, Grams, Brownback, Smith
(OR), Warner, Helms, and Kohl.
Before the American Competitiveness Act was enacted in
1998, the Senate Judiciary Committee held a hearing on February
25, 1998, that demonstrated the need for that legislation. The
Subcommittee on Immigration held a hearing on October 21, 1999,
to update the information the Committee obtained in 1998. That
hearing made clear that further legislation is necessary now.
At the October 21, 1999, hearing, national trade groups and
leaders of small businesses alike made clear that additional
highly skilled workers are urgently needed, will remain needed
for the foreseeable future, and are not currently available
within the United States. ``As investment capital flows into
start-ups and puts them on a fast growth track, the demand for
workers will continue to far exceed the supply,'' testified
Susan DeFife, CEO, womenCONNECT.com, a woman-owned company that
is a leading internet site for women in business. Unless the
visa cap is raised, she explained ``the options for tech
companies [seeking to fill these positions] are not
particularly attractive: we can limit our growth, but then we
lose the ability to compete; we can `steal' employees from
other companies, which makes none of us stronger and forces us
to constantly look over our shoulders; or, in the case of
larger companies I know, move operations off-shore.''
The witnesses' testimony also made clear that greater
access to H-1B workers does not detract from but rather
multiplies opportunities for American workers. Julie Holdren,
president and CEO of the Virginia-based Olympus Group, which
specializes in internet-based business intelligence solutions,
testified that ``For every H-1B worker I employ, I am able to
hire ten more American workers. That's the ironic part of this
debate. The H-1B visa holders who are employed by me actually
create many new job opportunities for domestic workers.'' Her
company employs over 70 people but has 30 jobs openings. In
short, as Roberta Katz, CEO of the high-tech trade group
TechNet, testified: ``If the United States is to remain the
world's technology leader, it isessential that American
companies continue to have access to the most highly skilled
employees.''
All of the witnesses at the 1999 hearing, including Rob
Atkinson of the Progressive Policy Institute, which is
affiliated with the Democratic Leadership Council, agreed that
while education and training are an important part of the
solution, meeting the demand for skilled professionals through
H-1B visas is also essential. S. 2045 embodies both approaches.
The bill was not referred to subcommittee but was
considered directly by the full Committee on the Judiciary. It
was marked up on March 9, 2000, and reported out of Committee
with a favorable recommendation by a 16-to-2 vote.
III. Discussion
A. Background
1. current law
a. General provisions governing H-1B visas
Current law allows employers seeking people with special
skills on a temporary basis to hire them on H-1B visas. These
visas are valid for 3 years, after which they can be renewed
for an additional 3 years, thus allowing a maximum stay of 6
years. Persons admitted under these visas cannot stay
permanently unless they are sponsored by an employer for a
separate, permanent employment-based immigrant visa, for which
there is a separate and lengthy approval process.
In order to qualify for an H-1B visa, an individual must be
in a ``specialty occupation.'' According to the law:
The term ``specialty occupation'' means an occupation
that requires--(A) theoretical and practical
application of a body of highly specialized knowledge,
and (B) attainment of a bachelor's or higher degree in
the specific specialty (or its equivalent) as a minimum
for entry into the occupation in the United States.
Immigration and Nationality Act (``INA'') Sec. 214(i)(1).
To qualify for an H-1B visa a nonimmigrant must have ``full
state licensure to practice in the occupation, if such
licensure is required to practice in the occupation'' or must
possess ``experience in the specialty equivalent to the
completion of [a bachelor's or higher degree], and recognition
of expertise in the specialty through progressively responsible
positions relating to the specialty.'' INA Sec. 214(i)(2).\1\
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\1\ It should be noted that the language establishing the
qualifications individuals must have to be eligible for H-1B visas is
contained not only in the U.S. code but is also part of a commitment
the United States made in the General Agreement on Trade in Services
(GATS). The commitments set out in that agreement can be modified or
withdrawn only after negotiations with other nations. Any unilateral
change in that definition (education, licensing, etc.) that is more
restrictive would accordingly be in violation of the United States'
international obligations. Unilaterally limiting or eliminating
occupational categories from eligibility for H-1B visas would also
violate GATS. A numerical limitation in Senate and House bill in 1998
on the maximum number of physical and occupational therapists who could
be hired on H-1B visas was removed during negotiations with the
Administration after the U.S. Trade Representative's Office noted that
such a provision would violate GATS. By the same token, unilaterally
placing new restrictions on which employers could hire individuals on
H-1B visas would also be in violation of America's international
obligations.
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Until the 1990 Immigration Act, employers were allowed to
hire individuals on what were then known as ``H-1'' visas
without numerical limitations. In 1990, however, as part of a
comprehensive package of immigration law reforms, the
Immigration Act of 1990 capped these visas at 65,000, a number
that the legislative history suggests was chosen arbitrarily in
order to reassure critics of these visas that an unlimited
supply of visas would not be available. ``The [65,000] number
was set without public hearings, is arbitrary, and was in no
way arrived at by analyzing demand, labor shortages, business
conditions, or skilled labor needed by firms to remain globally
competitive,'' according to Prof. Charles B. Keely of
Georgetown University.
Even in 1990, there were contemporaneous expressions of
concern that the 65,000 ceiling would eventually have an
adverse impact on American companies' and universities' access
to skilled personnel and hence on their potential growth. That
prediction was not realized until 1997, however, when for the
first time companies bumped up against the ceiling a month
before the end of the fiscal year. The situation worsened in
1998, when the cap was reached in May. As a result, Congress
acted in 1998 to raise the ceiling to a level that it thought,
on the basis of then-current use and the rate at which use of
the visas had been growing, should be adequate to accommodate
demand for the next 3 years. Under current law, the United
States may issue up to 115,000 H-1B visas annually for fiscal
year 2000 and 107,500 for fiscal year 2001. In fiscal year
2002, the ceiling is scheduled to revert to 65,000, the level
set in the 1990 act.
b. Labor condition application attestations and related enforcement
provisions
(1) The prevailing/actual wage attestation
In order to obtain an H-1B visa, an employer must execute a
Labor Condition Application (LCA) in which it attests that it
will be paying individuals on H-1Bs the higher of the
prevailing wage or actual wage paid to Americans in the same
job with similar experience. This provision was included in the
1990 Immigration Act in order to assure that the hiring of H-1B
workers would not have an adverse wage impact on Americans.
Specifically, it requires that in order to obtain approval for
employing an individual on an H-1B visa, an employer must file
an application with the Secretary of Labor stating:
(A) The employer--
(i) is offering and will offer during the
period of authorized employment to aliens
admitted or provided status as a nonimmigrant
described in section 101(a)(15)(H)(i)(b) wages
that are at least--
(I) the actual wage level paid by the
employer to all other individuals with
similar experience and qualifications
for the specific employment in
question, or
(II) the prevailing wage level for
the occupational classification in the
area of employment, whichever is
greater, based on the best information
available at the time of filing the
application, and
(ii) will provide working conditions for such
a nonimmigrant that will not adversely affect
the working conditions of workers similarly
employed.
INA Sec. 212(n)(1).
To assist in enforcing this requirement, an employer hiring
a worker on an H-1B visa must provide notice of the hiring and
salary level to employees' collective bargaining representative
for the relevant occupational classification. If no such
representative exists, notice is to be given to employees
directly by posting the information in conspicuous locations at
the place of employment. The law also establishes a complaint
mechanism for individuals with information that these
requirements are not being complied with. The Department of
Labor is authorized to investigate these complaints and, if it
finds them meritorious, to take appropriate action against
violators, ranging from back pay to the H-1B to fines to
debarment from use of employment visas. INA Sec. 212(n)(1)-(2).
(2) Additional enforcement provisions in the 1998 act
In addition to raising the ceiling on H-1B visas for fiscal
years 1999, 2000, and 2001, the 1998 American Competitiveness
and Workforce Improvement Act addressed many concerns raised
about perceived needs to increase enforcement of the terms and
conditions attached to H-1B visas. These issues were addressed
both in the original Senate bill, S. 1723, the American
Competitiveness Act, which passed the Senate by a vote of 78 to
20 in May 1998, and in the final version of that legislation,
arrived at through extensive negotiations between the House and
Senate and between Congress and the administration.\2\ At the
conclusion of those negotiations, the American Competitiveness
and Workforce Improvement Act passed by an overwhelming margin
in the House and became law as part of the 1998 Omnibus
Appropriations bill.
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\2\ These measures were adopted despite a very thin record that
there were actually a significant number of employers misusing the
visas. There have been 7 documented willful violations by employers
using H-1B visas since 1990. In 1998, the Department of Labor refused
to answer questions submitted to it by the Judiciary Committee
following the Feb. 25, 1997, hearing that sought additional details on
DOL's findings of H-1B violations.
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Detailed below are key enforcement provisions of the 1998
legislation related to H-1B visas:
Layoff protection for American workers. The bill provided
three types of layoff protection for American workers; (1) Any
employer who replaces a U.S. worker with an individual on an H-
1B visa and wilfully underpays the H-1B visa holder is subject
to debarment from all employment immigration programs for 3
years and a $35,000 fine per violation. (2) A company that is
H-1B dependent (see below) must attest that it will not lay off
an American employee in the same job classification during the
90 days before or after the filing of a petitionfor an H-1B
professional. (3) An H-1B dependent company acting as a contractor must
attest that it similarly will not place an H-1B professional in another
company to fill the same job held by a laid off American 90 days before
or after the date of placement.
Recruitment Requirements on Dependent Employers. H-1B
dependent companies must attest that they recruit according to
industry-wide standards. Moreover, they must attest that the H-
1B hiree was as qualified as, or more qualified than, any
American job applicant. A U.S. citizen not hired can file a
complaint with an arbitration panel, which can fine employers
found to have violated this provision.
H-1B Dependent Companies. The legislation established new
distinctions between types of employers. The legislation
defined an employer as H-1B dependent and subject to the new
recruitment and layoff attestations if its workforce consists
of 15 percent or more H-1B visa holders. Smaller employers and
start-ups are ``non-dependent'' if they have 25 employees and
no more than 7 H-1B's, or 26 to 50 employees with no more than
12 H-1B's. Non H-1B dependent employers who are found to have
committed willful violations in the prior 5 years are also
subject to these new attestations.
Increased Enforcement and Penalties. The bill increased by
five-fold--to $5,000--fines for willful violators of the H-1B
program and doubled the debarment period for such violations
from 1 to 2 years. The bill gives the Department of Labor (DOL)
authority to initiate ``spot'' investigations, without a
complaint filed, of employers found to have committed prior
willful violations. Upon the certification of the Secretary of
Labor that DOL has received specific and credible evidence of
willful and serious violations of the terms and conditions
attached to H-1B visas, DOL also has the authority to
investigate an employer without the filing of a specific
complaint.
Whistle-blower Protection. The legislation made it a
violation of the terms and conditions of obtaining an H-1B visa
for an employer to retaliate against an employee for filing a
complaint against an employer. This codified previous
regulatory provisions.
Benching Explicitly Prohibited. The legislation clarified
that it is a violation of the attestation set out in INA
Sec. 212(n)(1)(A) for an employer to engage in the practice
colloquially known as ``benching,'' under which an employer
brings over an H-1B worker on the promise that the worker will
be paid a certain wage, but then pays the worker only a
fraction of that wage because the employer does not have work
for the H-1B worker to do.
Benefits and Eligibility for benefits. The new law
clarified that it is a violation of the attestation set out in
INA Sec. 212(n)(1)(A) for an employer to fail to offer benefits
and eligibility for benefits to workers on the same basis, and
in accordance with the same criteria, as the employer offers
benefits and eligibility to benefits to U.S. workers.
Penalties prohibited. The legislation prohibited employers
from requiring H-1B workers to pay a penalty for leaving an
employer's employ before a date agreed to between the employer
and the worker.
For a more detailed explanation of the congressional intent
of the provisions in the 1998 legislation, see Senator
Abraham's floor statement of October 21, 1998.
(3) Education and training provisions for American workers
in the 1998 act
The 1998 legislation also provided a mechanism whereby the
hiring of individuals on H-1B visas would help address the
long-term workforce needs of the United States. It assessed a
$500 fee per visa petition, a $500 fee for the petition for the
initial renewal of such a visa, and a $500 fee for a petition
on behalf of an individual being hired by a new or concurrent
employer. This was estimated to raise approximately $75 million
a year to fund scholarships and training set out in the bill.
The bill then split the proceeds from the fee between different
mechanisms for educating Americans and training American
workers. It provided 8,000 to 10,000 scholarships a year for
low-income students in math, engineering, and computer science
through the National Science Foundation, assistance to certain
NSF programs targeted to K-12 education, and training for many
thousands of Americans through the Job Training Partnership
Act. The money was split as follows: 56.3 percent for training
through the DOL under the Job Training Partnership Act; 28.2
percent for scholarships administered through the National
Science Foundation (NSF); 4 percent for NSF grants for year-
round K-12 academic enrichment; 4 percent for NSF grants for
systemic reform activities in K-12; 1.5 percent for INS
processing related to the fee; 3 percent for DOL visa
processing and 3 percent for DOL enforcement.\3\
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\3\ Enforcement funding is contingent on a certification by the DOL
that it has met its statutory obligations for timely processing.
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In sum, the 1998 legislation significantly enhanced
enforcement by dramatically increasing penalties, increasing
the authority of the Department of Labor to investigate
potential violations, and establishing other new provisions
aimed at protecting U.S. workers and H-1B visa holders.
Moreover, today every time an individual is hired on an H-1B
visa a $500 fee goes to training U.S. workers and providing
scholarships for U.S. students in science and technology. The
new legislation extends the $500 fee and the additional labor
provisions through fiscal year 2002. The H-1B increase in the
proposed legislation will add considerably to training and
scholarships over a 3-year period.
B. The Current Situation
Despite the increase in the H-1B ceiling to 115,000, in
1999, the visa supply was once again exhausted in June, well
before the end of the fiscal year. This was partly due to the
protracted negotiations over the 1998 legislation, resulting in
the buildup of a large backlog, as well as to the
administration's unwillingness to include provisions
specifically designed to alleviate that backlog. It was also,
however, due to an extraordinary growth in demand for these
visas that surpassed the projections of even the strongest
proponents of raising the ceiling on the visas, who had based
their assessment of what was needed in large measure on prior
experience. In 2000, INS announced on March 17 that no new
applications will be accepted for H-1B visas as it believes it
already has received a sufficient number to reach the 115,000
ceiling.
In a February 28, 2000 report, Manpower president and chief
executive officer Jeffrey Joerres stated, ``The personnel
shortage continues to plague companies in all industries and
geographic regions.'' Cato Institute economist Daniel Griswold
wrote recently that ``Americans are not earning specialized
degrees fast enough to fill the 1.3 million high tech jobs the
Labor Department estimates will be created during the next
decade.'' (Mar. 16, 2000, Intellectualcapital.com)
In discussing the Midwest, Federal Reserve economist
Richard E. Kraglic stated in 1998, ``The region is not just
running out of workers; it is running out of potential
workers.'' This is having a negative impact on economic growth,
says economist Diane Swonk at First Chicago NBD. The Hudson
Institute estimates that the unaddressed shortage of skilled
workers throughout the U.S. economy will result in a 5-percent
drop in the growth rate of GDP. That translates into
approximately $200 billion in lost output, nearly $1,000 for
every American.
It is worth noting that critics who predicted in 1998 that
widespread unemployment and extreme economic times would result
if the proposed H-1B increase became law have been proved
completely wrong. Instead, more studies and more individuals
have reached the same conclusion that was embodied in the 1998
legislation:
--A 1999 study by Joint Venture: Silicon Valley found that a
lack of skilled workers is costing Silicon Valley
companies $3 to $4 billion a year.
--A 1999 study by the Computer Technology Industry
Association concluded that a shortage of information
technology professionals is costing the U.S. economy as
a whole $105 billion a year.
--A 1999 study for the Public Policy Institute of California
contained findings by U.C.-Berkeley Prof. Annalee
Saxenian that immigrants are a major source of job
creation. Her research showed that Chinese and Indian
immigrant entrepreneurs in northern California alone
were responsible for employing 58,000 people, with
annual sales of nearly $17 billion.
--Laura D'Andrea Tyson, former chief economic adviser to
President Clinton, wrote in Business Week: ``Conditions
in the information technology sector indicate that it's
time to raise the cap on H-1B visas yet again and to
provide room for further increases as warranted.
Silicon Valley's experience reveals that the results
will be more jobs and higher incomes for both Americans
and immigrant workers.''
--Finally, in testimony before the Senate Banking Committee,
Federal Reserve Chairman Alan Greenspan this year
endorsed S. 2045 in response to a question from Senator
Phil Gramm, and stated that ``The benefits of bringing
in people to do the work here, rather than doing the
work elsewhere, to me, should be pretty self-evident.''
C. The American Competitiveness in the 21st Century Act
The American Competitiveness in the 21st Century Act seeks
to help the American economy in both the short and long run by
a combination of temporary visa increases and training and
education initiatives. A more detailed section-by-section
description of the bill appears elsewhere in the committee
report. However, below is a brief summary of the bill's
contents:
Temporary Increase in Visa Allotment for Skilled
Professionals. The bill increases the number of H-1B visas that
may be issued by 80,000 for fiscal year 2000, 87,500 for fiscal
year 2001, and 130,000 for fiscal year 2002, for a level of
195,000 a year.
Education and Training. Additional visas in the bill will
generate more money for training and scholarships for U.S.
workers and students through the $500 per visa fee that
originated in the 1998 legislation. Funding from this fee
should raise approximately $450 million total over 3 years,
creating 40,000 scholarships, training thousands of
individuals, and funding promising K-12 programs. The bill also
authorizes funds for after-school technology programs in Boys
and Girls Clubs.
Universities and Research Facilities. The bill exempts from
the cap visas obtained by universities, research facilities,
and those obtained on behalf of graduate degree recipients to
help keep top graduates and educators in the country.
Enforcement. The bill maintains the increased fines,
attestations, increased DOL investigative authority and other
enforcement measures passed into law in 1998 and extends the
provisions through fiscal year 2002. It mandates that
fraudulently issued visas be returned to the pool of visas for
that fiscal year.
Per Country Limit. The bill modifies the per country limit
on employment-based immigrant visas to eliminate the
discriminatory impact of the limit under current law.
Increased Portability of H-1B Status. The bill allows an H-
1B visa holder to change employers at the time a new employer
files the initial paperwork, rather than requiring the visa
holder to wait for the new H-1B application to be approved.
Relief from Lengthy Adjudications. The bill addresses
inordinate delays in labor certification and INS visa
processing by allowing an individual on an H-1B visa on whose
behalf an employer has taken steps to seek an immigrant visa to
obtain an extension on that visa so the individual can stay in
the United States until a decision is made on his or her case--
rather than forcing the person to leave the country--if more
than 1 year has elapsed from the date the employer filed the
labor certification application or petition for adjustment of
status. If labor certification is required, an individual is
only eligible for this extension if the DOL has already
approved the labor certification application.
D. Responses to Concerns Raised and the Likely Consequences of a
Failure to Act
1. the impact on american jobs
Critics of H-1B visas claim that they result in taking away
jobs from Americans and giving them to foreigners. In fact,
however, failure to raise the H-1B ceiling is what will deprive
Americans of jobs. This is because artificially limiting
companies' ability to hire skilled foreign professionals will
stymie our country's economic growth and thereby partially
atrophy its creation of new jobs. It will also result in
sending some of those jobs abroad. Thus, contrary to the claims
of some critics of the H-1B program, American workers'
interests are advanced, rather than impeded, by raising the H-
1B cap.
A letter signed in 1998 by the CEO's of 14 of America's
leading companies, including Microsoft's Bill Gates, Netscape's
James Barksdale, and Texas Instruments' Thomas Engibous,
expressed this point well:
Failure to increase the H-1B cap and the limits that
will place on the ability of American companies to grow
and innovate will also limit the growth of jobs
available to American workers. * * * Failure to raise
the H-1B cap will aid our foreign competitors by
limiting the growth and innovation potential of U.S.
companies while pushing talented people away from our
shores. * * * [this] could mean a loss of America's
high technology leadership in the world.
At both the Immigration Subcommittee hearing of October 21,
1999, and the Full Committee hearing 2 years ago, the testimony
given strongly indicated that individuals on H-1B visas create
many jobs in America. As noted above, at the October 1999
hearing, Julie Holdren, president and CEO of the Virginia-based
Olympus Group, testified that for every H-1B worker she
employs, she is able to hire 10 more American workers. Thus
``[t]he H-1B visa holders [her company hires] actually create
many new job opportunities for domestic workers.'' T.J.
Rodgers, president and CEO of Cypress Semiconductor, testified
to similar effect in February 1998: for every foreign-born
engineer he can hire, he employs five more Americans in
marketing, manufacturing, or related endeavors. At that same
hearing, Kenneth M. Alvares, Human Resources CEO at Sun
Microsystems, provided a particularly striking example of how
this works. He testified that Anant Agrawal, born in India,
entered the country on an H-1B visa. When he started working at
Sun Microsystems the company employed fewer than 300 people.
Combining his talents with those of another engineer, he
developed SPARC, a powerful microprocessor that proved to be a
dramatic innovation in chip design, according to Sun
Microsystems. Today, Sun employs more than 23,000 people, the
majority of whom do work related to Agrawal's innovation.
Moreover, failure to raise the cap on H-1B visas will
almost certainly cause some U.S. companies to move some of
their operations offshore. The Committee continues to believe
that it is essential to avoid this danger by removing the
artificial limits on companies' access to skilled personnel
created if too few H-1B visas are available and resisting the
call to impose excessive regulations on their use that would
have the same effect.
Many of the concerns about H-1B visas revolve around the
fear that individuals entering on H-1B visas will ``take'' a
job from an American worker. This fear arises from the premise
that there is a fixed number of jobs for which competition is a
zero-sum game. But this premise is plainly flawed: Following
passage of the 1990 act, the number of U.S. jobs has increased
by more than 17 million, and the Internet, which was used by a
few thousand specialists back in 1990, is now used by tens of
millions and is a major source of jobs and innovation in
America. Since 1960, the number of U.S. jobs has more than
doubled from 65 million to over 135 million today. These
figures simply demonstrate the general principle that labor
markets have demonstrated time and time again: additional
people entering the labor force, whether native-born students
out of school, immigrants, or nonimmigrants, expand job
opportunities and create other jobs through innovation,
entrepreneurship, and money spent on consumer items like food,
clothing, and housing, as pointed out in the 1986 Economic
Report of the President.
Moreover, looking at the particular case of individuals on
H-1B visas, there is no evidence that they are harming the job
prospects of native-born Americans. According to National
Science Foundation data, there is no correlation between the
percentage of foreign-born employees in a field and the
unemployment rate in that field. The data show that fields with
a high percentage of foreign-born workers, such as computer
science and engineering, have lower unemployment rates than
fields with relatively few foreign-born workers, such as the
geosciences and social sciences. And there is abundant evidence
that the U.S. economy, its industries, and its universities,
which are recognized as the best in the world, have all
prospered as skilled foreign nationals and immigrants have
worked side by side with native-born Americans.
2. impact on american salaries
Critics have also suggested that raising the cap on H-1B
visas will have a negative impact on salaries for Americans in
the same occupations, and that, in fact, one reason employers
may want to bring in H-1B workers is to economize on costs. But
there are no data to support these concerns. In fact, National
Science Foundation data show that the typical foreign-born
scientist and engineer earns more, not less, than his or her
native-born counterpart, according to the Wall Street Journal.
The 1996 worldwide salary survey conducted by EE Times, a
publication that covers the electrical engineering field,
provides further evidence of this assertion. The survey
included findings that:
American-born engineers earned a mean salary of
$66,000, fully $1,400 below the total mean. Immigrants
from India ($74,400) and Hong Kong ($76,800) pulled up
the averages for foreign-born engineers. Newcomers from
China at $65,800 only $200 below the mean] lagged
behind them. This illustrates a point made in earlier
surveys * * * no evidence exists of immigrants dragging
down overall salaries.
The EE Times survey stated that it found no evidence of
exploitation. ``Not a single one of the 137 non-U.S.-born
engineers or managers earned under $35,000. By contrast 28
American readers did.''
Thus, what evidence we have suggests that American wages
are not being undercut by H-1B workers, particularly in light
of market forces and the role innovation plays in propelling
the fields in question forward. There is also no evidence that
companies maintain disparate wage scales for native-born and H-
1B employees working side by side one another in the same
occupations. In fact, provisions in current law governing the
hiring of H-1B workers, which require employers to pay H-1B
workers the higher of prevailing or actual wages and to provide
them working conditions that do not adversely affect the
working conditions of others similarly situated, forbid any
such a practice. In addition to these requirements employers
typically pay legal fees of $3,000 or more to secure H-1B visas
for needed employees. Moreover, the market would not tolerate
exploitation, especially given the fierce competition for
skilled workers. An H-1B employee who is not being treated
fairly can easily be petitioned by another employer and switch
to work for that employer. The Committee further facilitated
this flexibility in S. 2045 by allowing an H-1B employee to
change employers at the time a new employer files the initial
paperwork, rather than requiring the employee to wait for the
new H-1B application to be approved. Indeed, the Committee
understands that such job changes are fairly common among H-1B
workers, an assumption shared by the administration in 1998 in
developing estimates of the funds the $500 fee would produce.
Finally, many H-1B's are foreign students recruited on U.S.
college campuses in the same process through which companies
hire native-born students. For example, Kenneth Alvares, vice
president for Human Resources at Sun Microsystems,testified at
the Committee's 1998 hearing that ``of all the H-1B workers that Sun
has hired, only a very small handful are actually recruited outside the
United States and then brought into the country. The majority of H-1Bs
that Sun hires are already in the U.S. having graduated from United
States schools frequently at the top of their class.'' Hence it is
unlikely, to say the least, that employers are creating different wage
scales for these two groups of classmates.
As to the competition for graduates among companies and the
pay scales themselves: Steven Levin of Texas Instruments
testified in 1998 that the employment situation is so
competitive that there are more companies recruiting at M.I.T.
than there are graduates in high-tech fields annually. In his
testimony, Levin also provided data on starting salaries for
various fields that cast real doubt on the proposition that
salaries in these areas are suffering from any kind of
deflationary pressure. Although he noted that ``starting salary
* * * is heavily dependent on the education and work experience
of each person offered employment'' and that ``the schools
attended and the grade point average of a person also
influences the starting salary,'' Levin testified that the
average starting salary for engineers with a bachelor's degree
and summer work experience at Texas Instruments is $46,800.
Average starting salary is $54,000 for a master's degree with
summer work experience and $76,200 for a Ph.D. with summer work
experience. Kenneth Alvares stated that the starting salaries
Sun Microsystems offers for recent college graduates is $45,000
to $55,000, though those with more experience could start at
more than $55,000. Microsoft testified to similar numbers.
These levels, of course, do not take into account noncash
benefits such as stock options, which, according to a February
28, 2000, article in InfoWorld, have become practically a
standard component of any software engineer's employment
package. Indeed, according to the same article, companies are
even increasingly offering recruits stock portfolios with
options in companies with which the employer conducts business,
perks such as on-site drycleaning and corporate concierges, and
even BMW's.
3. training and education
There is widespread agreement among Committee Members that
efforts are necessary to educate more American young people for
the jobs of tomorrow. Indeed, the Committee specifically
addressed this issue by adopting two amendments. The Feinstein-
Abraham amendment builds on the 1998 legislation to address
that need (1) through a scholarship program included in the
bill to help students major in engineering, mathematics, and
computer science, (2) through funding for NSF educational
programs directed at K-12 education, and (3) through provisions
for training the unemployed and other workers. The Biden
Amendment authorizes funds for grants to Boys and Girls clubs
to fund computers and related expenses.
It is also important to understand, however, that American
companies are doing a great deal to address these issues on
their own. It was suggested during the 1998 debate that raising
the cap on H-1B visas would have a negative effect on American
companies' commitment to education and training; however, this
has not proven true. In fact, the Committee has seen
extraordinary initiatives from industry that indicate that
concern was completely unfounded. Below is a sampling of the
materials that have been brought to the Committee's attention.
The sample is meant to be illustrative rather than an
exhaustive description of employers' efforts.
In 1998, Intel's contributions to K-12 education totaled
$28,541,751. Contributions to higher education totaled
$62,632,634 and contributions to community organizations
totaled $8,848,742. Intel's science talent search results in
$1.25 million in scholarships and donations to schools to help
support science and math programs. Intel will invest $100
million in cash, equipment, curriculum development and program
management to train teachers in the use of technology through
the Intel Teach to the Future program. In this program,
Microsoft will contribute $344 million in software and program
support. Also, leading manufacturers including Hewlett Packard
and Premio have donated equipment.
In 1999, the Bill and Melinda Gates Foundation has given
$350 million to help student achievement and $25 million to the
Alliance for Education and Seattle public schools. In the past
three years, Microsoft has also given more than $173 million to
help organizations provide technology access to underserved
communities. In cooperation with Bill and Melinda Gates
Foundation, Microsoft is also contributing $200 million in
software, matched by the Foundation's $200 million to provide
technology access to libraries. Microsoft has supported the
training of more than 1 million teachers in the use of
technology.
Hewlett Packard's Hands-On Science Program provides funding
to elementary school districts working with Hewlett Packard
sites to reform elementary science education. As of 1998, the
Hands-On Science Program was supporting 60 schools. HP Science
Partners are employee volunteers who help to implement the
reforms by working with teachers, in classrooms and as advisors
to the schools. Through an e-mail mentor program, these
employees help 5th through 12th grade students relate their
science and math curriculum to personal interests. In a recent
initiative that received significant attention this year, Ford
Motor Co. announced it will supply a computer, printer and
internet access to its employees for a nominal fee. Thirty-
seven percent of Ford's contributions went to various
educational activities in 1998. Ford contributes to
universities and colleges with a plan to increase contributions
to 26 colleges and universities over the next 5 years. Ford has
maintained a longterm commitment to contribute to historically
African-American colleges and universities.
Texas Instruments states that education is its highest
priority for corporate philanthropy and volunteerism. It has
established a series of grants for universities totaling $27
million. Texas Instruments supports preschool programs,
mentoring for K-12 students, teacher training, scholarships for
community college students, internships, support for
university-based research and tuition reimbursement for
employees. Texas Instruments has donated $5 million to Southern
Methodist University for an electrical engineering building.
The corporation's continuing education program represents a
$100 million investment annually.
Netscape through AOL Foundation participates in the
Interactive Education Initiative which makes 55 grants to
institutions looking for ways to improve technology in
education. They support the Rural Telecom Leadership Awards as
well as the Digital Divide Initiative. Netscape regularly
donates computers as well as sponsoring paid internships in
their headquarters. Additionally, Jim Barksdale, the former
president of Netscape, recently donated $100 million to promote
literacy in his home State of Mississippi.
In 1998, Kodak contributed $11.2 million to not-for-profit
organizations and programs devoted to education, health and
human services and civic and community causes. Kodak is also a
corporate sponsor of the JASON project, a year round scientific
expedition designed to engage students in grades 4 to 9 in
science and technology.
IBM has developed a variety of programs to help the
community. Through their KidSmart Program, IBM donated over
1,000 ``young explorers'' computers to more than 400 nonprofit
day care centers and preschools. Through Project First
(Fostering Instructional Reform throughService and Technology),
IBM and Americorp have combined to train and supply technology
coordinators to public schools. IBM also matches employees' gifts to
universities, and employees can donate equipment to K-12 schools by
paying only 20 percent of the retail value of the equipment.
The Corning Incorporated Foundation develops and
administers projects in support of educational, cultural,
community and selected national organizations. Corning has
entered into a collaborative effort called Futures '97 with
Local 1000 of the American Flint Glass Workers' Union. Futures
'97 is designed to assist Corning's active and laid off hourly
employees with career management training and education.
Corning also runs a summer intern program to provide real life
experience to students in technical programs.
Motorola established Motorola University as a way to help
transform learning and teaching. The university establishes
alliances with school systems, the private sector and not-for-
profit organizations to improve the skill level of graduates
entering the workforce.
Haliburton Co. sponsors the Haliburton Energy Institute
which offers courses, seminars and workshops designed to keep
students up to date with technology. Haliburton, through
Kellogg Discover Engineering Committee, also sponsors National
Engineers Week in which high school students participate in
activities at their offices.
F. Amendments
1. The kennedy amendment
Senator Kennedy offered an amendment at the markup that
raised the H-1B visa cap to 145,000 a year for fiscal year
2000, fiscal year 2001, and fiscal year 2002. The amendment
exempted from the cap those above a master's degree. It also
guaranteed 50,000 visas within the 145,000 ceiling for master's
degree recipients.
The Kennedy amendment also proposed to raise substantially
fees paid by employers of H-1B visa holders. The amendment
would have increased the current $500 fee as follows: $1,000
for employers with 150 or fewer employees; $2,000 for those
with 151 to 500 employees; and $3,000 for those with 501 or
more employees.
The amendment would have changed the current mix of
training and education programs, including adding a new Digital
Divide Program within the National Science Foundation.
The amendment would have instituted new labor requirements.
H-1B-dependent employers would have to attest that they did
not/will not displace U.S. workers 6 months before or after the
filing of a labor condition application. In addition, H-1B-
dependent employers would have to attest they are making
efforts to continually train and update existing skills of
their workers and to promote them where possible. The amendment
also authorized the Department of Labor to conduct a ``random
sample'' and investigate compliance of employers for a report
to Congress. It would also allow DOL to penalize noncomplying
employers, thereby making it possible for the ``report'' to
turn into a mechanism that supersedes the carefully negotiated
current law prerequisites for investigations and processes for
enforcement designed to ensure fairness for all concerned.
While finding much to appreciate in the Kennedy amendment's
recognition of the essential need to increase the H-1B visa
cap, the Committee ultimately was compelled to reject the
amendment for a number of reasons.
First, the visa increase in the amendment was inadequate.
Senator Kennedy's amendment increases H-1B visas by only 30,000
this year and 37,500 next year, which simply is far less than
current demand. Since the cap has been reached this year,
employers must be using more than 15,000 visas a month. In
other words, Senator Kennedy's amendment would have added fewer
than 2 months worth of visas. This would have guaranteed that
the Committee would have had to return to this issue again next
year and raise the ceiling yet again.
Second, the proposed fee increases in the amendment were
excessive. Prior to 1998, there were no additional fees for
training or education associated with H-1B visas. In 1998,
Senator Abraham and Senator Kennedy agreed in principle that
the final version of the legislation would contain a fee of
this type. The fee was set at $250 per visa in a House-Senate
agreement. Negotiations with the White House led to agreement
on a $500 fee to be assessed not only on initial visa petitions
but on petitions for first extensions of visas and petitions
for changes of employer or concurrent employment. Doubling that
fee to $1,000 for small businesses and raising it six-fold for
others is excessive. The Committee recognizes the advantage of
providing additional training and scholarships, and has
accomplished this through the visa increase, which will more
than double funds for these purposes over 3 years. However, it
is worth noting that the Federal Government already spends $7.1
billion on training programs, while companies spend tens of
billions more on their own training of employees. In addition,
increases in funding for these programs of the order of
magnitude contemplated by Sen. Kennedy's amendment should be
preceded by some experience to provide a gauge for how
effectively they are working.
Third, the amendment sought to add labor provisions that
are unnecessary and unwarranted given the extensive array of
new enforcement provisions added through negotiations with the
administration in 1998. The 1998 bill, as noted above, provided
three types of layoff protection for American workers. One of
these bars H-1B-dependent employers (those with more than 15
percent H-1B's in their workforce) from hiring an H-1B worker
to replace a U.S. worker in the same job who was laid off 90
days before or after the filing of a visa petition. Senator
Kennedy would have expanded that to 6 months before and after.
This works a significant change in the provision. In its
current form, the provision is designed to prevent a
purposeful, planned layoff by a company laying off U.S. workers
and bringing in foreign workers as replacements. But it strains
credulity to believe an employer will lay off an American in
the hope that 364 days later he is going to be able to replace
the American with a foreign worker. Thus the effect of this
proposed change would have been to turn the attestation from a
mechanism designed to prevent deliberate replacement of a U.S.
worker with an H-1B worker into a trap for the unwary employer
who makes changes to his workforce that are in no way connected
to the hiring of an H-1B worker.
The Kennedy amendment also contained an attestation that H-
1B-dependent employers train workers in a way satisfactory to
the Federal Government. Again this appears excessive and the
Committee believes puts us on a slippery slope where all
employers are required to subject themselves to DOL auditors to
determine whether they satisfy Government training standards.
By definition extremely subjective standards will be involved
in such a process and thereby will make it difficult for any
employer to know if his or her company is in compliance.
The Kennedy amendment also would have authorized the
Department of Labor to ``conduct an ongoing survey on the level
of compliance by employers with the provision and requirements
of the H-1B visa program'' and stated the Secretary of Labor
could pursue``appropriate penalties'' based on this ``survey.''
Whatever its limited intentions may have been, this provision would
have authorized rolling, invasive ongoing investigations--without the
need to show any cause--of potentially all employers that use H-1B
visas, thereby overriding the carefully crafted compromises on these
issues worked out in the 1998 legislation.
There have been few violations of H-1B visas, with only
``seven'' willful violations documented by DOL since 1990.
Despite this low level of documented violations, Congress gave
the DOL substantial new investigative authority that allows the
DOL to investigate an employer outside the complaint process if
it receives credible information of a possible violation and
receives the approval of the Labor Secretary to investigate. No
case has been made that that authority was inadequate, or that
it has uncovered any heretofore undiscovered serious
violations. To grant the DOL sweeping new authority far beyond
that, regardless of the stated purpose of that authority, is
not justified on the current record. The Committee also notes
that recent complaints of outrageous behavior in connection
with a San Antonio enforcement action conducted by INS with DOL
cooperation outside the procedures set out in INA Sec. 212(n),
in which it is claimed that INS, with DOL cooperation, arrested
and mistreated 40 Indian professionals, arrested their spouses,
and mocked their religious beliefs, provide a reminder why we
do not give carte blanche to Federal agencies.
2. the feinstein-abraham amendment
This amendment modified the existing allocation of H-1B fee
revenue so that 36.2 percent of the total H-1B fee revenue goes
to workforce training and 30.7 percent of the total H-1B fee
revenue goes to math, science, engineering and technology post-
secondary scholarships for low-income and disadvantaged
students. It allowed the National Science Foundation to renew
the annual scholarship for up to 4 years and increased the
minimum scholarship amount to $3,125 (the Pell Grant amount).
It dedicated an additional 25.8 percent of the total H-1B fee
revenue to improving K-12 math and science education by
directing it to the National Science Foundation for matching or
direct grants to support private-public partnerships to help
schools build, improve or expand math, science and information
technology curricula. It folded the funds for the Systemic
Reform Grant Program under the 1998 legislation into the
broader NSF direct and matching grant program. To ensure
accountability and progress among the various H-1B grant
recipients, it requires the National Science Foundation and
Department of Labor to develop a tracking system to monitor the
performance of programs receiving H-1B grant funding.
3. the biden amendment
This amendment authorized $20,000,000 for grants to Boys
and Girls Clubs across America to fund after-school technology
programs for fiscal year 2001 through fiscal year 2006.
4. the kyl amendment
This amendment would have transferred training programs
under S. 2045 from the DOL to the Department of Commerce.
5. the hatch amendment
This technical amendment corrected a drafting error that
limited the exemptions for universities, research institutes,
and advanced degree recipients to fiscal year 2000.
F. Conclusion
We should continue to be concerned about the impact on
America if the H-1B cap is not addressed. In 1998, Thomas
Friedman of the New York Times wrote, ``If U.S. companies are
told to put up `No Vacancy' signs, they are inevitably going to
move more knowledge operations overseas, and that will spur
more innovation, wealth creation, and jobs over there.'' He
points out that many of those hired on H-1B visas are actually
educated at American universities, noting that ``the idea that
we would educate all these foreign computer engineers in U.S.
universities and then send them home to compete with us is
nuts.''
Demetrios G. Papademetriou, co-director of the
International Migration Policy Program at the Carnegie
Endowment for International Peace, wrote this year, ``While we
are again showing how not to have the right conversation about
foreign-born high-tech workers, people who come into this
country on H-1B visas, the rest of the developed world is
waking up to the fact that America's cherry-picking of
international tech talent amounts to an enormous competitive
advantage, one that, if left unchallenged, could extend U.S.
dominance in information technology indefinitely. Our
competitors are doing something about it. Germany, Canada, the
United Kingdom, and Australia, among others, have already
entered the sweepstakes for hightech workers.'' A global
competition for talented individuals is indeed taking place.
The question is simple: Will America choose to remain a global
leader in crucial academic, science and technology fields?
Since 1990, the American economy has prospered and American
companies have become world leaders in numerous fields.
Foreign-born talent has played an important role in that
success. The Committee believes that the American system of
openness works and that, in effect, barring talented
individuals from working in the United States simply because
those individuals were not born in this country is not in
keeping with the American tradition of welcoming to our shores
people who can make a contribution to our economy and society.
IV. Vote of the Committee
On March 9, 2000, with a quorum present, the Committee on
the Judiciary considered S. 2045, the American Competitiveness
in the 21st Century Act. Senator Kennedy offered an amendment
in the nature of a substitute which was defeated by a 10-to-8
vote. An amendment offered by Senators Feinstein and Abraham to
modify and expand the use of visa fees for education was
approved by a 12-to-6 vote. A Kyl second degree amendment to
the Feinstein/Abraham amendment that would provide training
within the Department of Commerce was defeated by a voice vote.
A Biden amendment to authorize grants to the Boys and Girls
Clubs was approved by a voice vote with Senator Kyl noting his
dissent. A Hatch technical amendment to correct a drafting
error which limited the exemptions in the bill to 1 year was
approved unanimously. A Feingold amendment dealing with the
naturalization of Hmong veterans was withdrawn. A Leahy
amendment to grant the Attorney General authority to cancel
removal ofveterans was withdrawn. A Torricelli amendment to
adjust the status of certain persons who fled Syria was withdrawn.
recorded votes
Vote on Kennedy substitute amendment
YEAS (8) NAYS (10)
Leahy (by proxy) Hatch
Kennedy Thurmond
Biden Specter (by proxy)
Kohl (by proxy) Kyl
Feingold DeWine (by proxy)
Torricelli Ashcroft (by proxy)
Schumer Abraham
Grassley Sessions (by proxy)
Smith (by proxy)
Feinstein
Vote on Feinstein-Abraham amendment to modify and expand the use of
VISA fees for education
YEAS (12) NAYS (6)
Hatch Leahy (by proxy)
Thurmond Kennedy
Specter (by proxy) Feingold
Kyl Torricelli
DeWine (by proxy) Schumer (by proxy)
Ashcroft (by proxy)
Abraham
Sessions (by proxy)
Smith (by proxy)
Biden
Kohl (by proxy)
Feinstein
Kyl second degree amendment to provide training within the department
of commerce
Defeated by voice vote.
Biden amendment for authorization of the boys and girls clubs
Approved by voice vote with Senator Kyl noting his dissent.
Hatch technical amendment to correct a drafting error which limited the
exemptions in the bill to 1 year
Approved unanimously.
motion to report s. 2045 favorably, with amendments
YEAS (16) NAYS (2)
Hatch Kennedy
Thurmond Feingold
Specter
Kyl
DeWine
Ashcroft
Abraham
Sessions
Smith
Biden
Kohl
Feinstein
Leahy
Torricelli
Schumer
V. Section-by-Section Analysis
Section 1.--Short title: American Competitiveness in the
21st Century Act of 2000.
Section 2.--Temporary increase in visa allotments
In addition to the number of H-1B visas issued or
individuals authorized H-1B status under current law, this
section authorizes:
(A) 80,000 for fiscal year 2000.
(B) 87,500 for fiscal year 2001.
(C) 130,000 for fiscal year 2002.
This section has the effect of raising the cap to 195,000
for fiscal year 2000, 2001, and 2002.
Section 3.--Special rule for universities, research facilities, and
graduate degree recipients
This section exempts from the numerical limitation (1)
individuals who are employed or receive offers of employment
from an institution of higher education, affiliated entity,
nonprofit research organization or governmental research
organization and (2) individuals who have a petition filed
between 90 days before and 180 days after receiving a master's
degree or higher from a U.S. institution of higher education.
The principal reason for the first exemption is that by virtue
of what they are doing, people working in universities are
necessarily immediately contributing to educating Americans.
The more highly qualified educators in specialty occupation
fields we have in this country, the more Americans we will have
ready to take positions in these fields upon completion of
their education. Additionally, U.S. universities are on a
different hiring cycle from other employers. The H-1B cap has
hit them hard because they often do not hire until the numbers
have been used up; and because of the academic calendar, they
cannot wait until October 1, the new fiscal year, to start a
class.
Section 4.--Limitation on per-country ceiling with respect to
employment-based immigrants
This section modifies per-country limits on employment-
based visas to eliminate the discriminatory effects of those
limits on nationals from certain Asian Pacific nations.
Currently, in a given year, the annual limit of 140,000
employment visas is not being used, yet U.S. law prevents
individuals born in particular countries from being able to
join employers who want to sponsor them as permanent employees
because those countries have reached their per-country limit.
This amounts to preventing an employer from hiring or
sponsoring someone permanently simply because he or she is
Chinese or Indian, even though the individual meets all other
legal criteria. This is inconsistent with the legitimate
function of the per-country limit, which is to attempt to
allocate visas among residents of different countries if there
are not enough visas available for all qualified applicants.
The bill would end this prohibition unless demand for visas
indicates that the 140,000 limit will be hit, in which case the
per-country principle would remain in place as an allocation
mechanism. This would work as follows: if there are still
unused employment-based immigrant visas available after the
employment-based visas issuable during any calendar quarter
have been issued according to the per-country limitations,
those visas may then be issued without regard to the country of
origin of the recipient. They may be issued, however, only to
the limit of the total number of employment-based visas
available for each category. This provision will have no
adverse impact on family immigration levels in the foreseeable
future, because the employment visa ``spill-down'' is triggered
only if immediate relative numbers fall below a threshold that
they are not expected to reach.
This section also affords transitional protection for
individuals on H-1B visas with approved petitions for permanent
employment visas but whom the per-country limit is preventing
from obtaining a permanent resident visa to stay until such a
visa becomes available. These immigrants would otherwise be
forced to return home at the conclusion of their allotted time
in H-1B status, disrupting projects and American workers. The
provision enables these individuals to remain in H-1B status
until they are able to receive an immigrant visa and adjust
their status within theUnited States, thus limiting the
disruption to American businesses.
Section 5.--Increased portability of H-1B status
This section allows an H-1B visa holder to change employers
at the time a new employer files the initial paperwork, rather
than having to wait for the new H-1B application to be
approved. This responds to concerns raised about the potential
for exploitation of H-1B visa holders as a result of a specific
employer's control over the employee's legal status.
Section 6.--Extension of authorized stay in cases of lengthy
adjudications
This section addresses the inordinate delays in labor
certification and INS visa processing by allowing an individual
on an H-1B visa whose adjustment to permanent resident on the
basis of employment has progressed far enough to stay in the
United States until a final decision is made on his or her
case. Individuals in these circumstances are currently being
forced to leave the country and disrupt the projects they are
working on simply on account of entirely unreasonable
administrative delays. This section allows the Attorney General
to extend in 1-year increments the H-1B visa of an individual
in this category beyond the 6-year limitation period if the
employer has filed on the individual's behalf either a petition
for a permanent resident visa or an application for adjustment
of status and more than 1 year has elapsed from the date the
employer filed the labor certification application or petition
for adjustment of status. If labor certification is required,
an individual is only eligible for this extension if the DOL
has already approved the labor certification application.
Section 7.--Extension of certain requirements and authorities through
fiscal year 2002
Education and Training: This section extends the $500 per
visa fee, set to expire in fiscal year 2001, through fiscal
year 2002.
Enforcement and DOL Investigative Authority: This section
extends the authority for the nonpermanent additional labor
requirements added by the 1998 law and set to expire in fiscal
year 2001 through fiscal year 2002. It also extends the new
authority of the Department of Labor to investigate possible H-
1B violations without first having received a complaint through
fiscal year 2002.
Section 8.--Recovery of visas used fraudulently
This section requires fraudulently issued H-1B visas to be
put back into the pool of available visas so legitimate
employers and visa holders can use them.
Section 9.--Study by national science foundation on ``digital divide''
This section requires the National Science Foundation to
conduct a study on the ``digital divide'' with a report to
Congress no later than 18 months after enactment of the bill.
Section 10.--Modification of nonimmigrant petitioner account provisions
This section modifies the existing allocation of H-1B fee
revenue so that 36.2 percent of the total H-1B fee revenue goes
to workforce training and 30.7 percent of the total H-1B fee
revenue goes to math, science, engineering and technology post-
secondary scholarships for low-income and disadvantaged
students. It allows the National Science Foundation to renew
the annual scholarship for up to 4 years and increases the
minimum scholarship amount to $3,125 (the Pell Grant amount).
It dedicates an additional 25.8 percent of the total H-1B fee
revenue to improving K-12 math and science education by
directing it to the National Science Foundation for matching or
direct Grants to support private-public partnerships to help
schools build, improve or expand math, science and information
technology curricula. It folds the funds for the Systemic
Reform grant program under the 1998 legislation into the
broader NSF direct and matching grant program. To ensure
accountability and progress among the various H-1B grant
recipients, it requires the National Science Foundation and
Department of Labor to develop a tracking system to monitor the
performance of programs receiving H-1B grant funding.
Section 11.--Kids 2000 crime prevention and computer education
initiative
This section authorizes $20,000,000 for grants to Boys and
Girls Clubs across America to fund after-school technology
programs for fiscal year 2001 through fiscal year 2006.
VI. Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 10, 2000.
Hon. Orrin G. Hatch,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 2045, the American
Competitiveness in that Twenty-First Act of 2000.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Mark
Grabowicz (for federal costs), Theresa Gullo (for the state and
local impact), and John Harris (for the private-sector impact).
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
S. 2045--American Competitiveness in the Twenty-First Century Act of
2000
Summary: S. 2045 would increase the number of nonimmigrant
(temporary) visas, known as H-1B visas, available for certain
skilled foreign workers and make several other changes to
current laws relating to the employment of skilled foreign
workers. The bill also would change the formulas governing the
allocation of H-1B visa fees collected by the Immigration and
Naturalization Service (INS), which are spent under current law
without further, appropriation for job training, scholarship,
and administrative programs. It would direct the National
Science Foundation (NSF) to conduct a study on access to
advanced technology. Finally, S. 2045 would authorize the
appropriation of $20 million for each of fiscal years 2001
through 2006 for the Attorney General to make grants to the
Boys and Girls Clubs of America to fund after-school technology
programs.
Assuming appropriation of the necessary funds, CBO
estimates that implementing S. 2045 would result in additional
discretionary spending, over the 2000-2005 period, of $101
million ($20 million a year for the grants to Boys and Girls
Clubs, and about $1 million for the NSF study). In addition, we
estimate that the bill would increase both offsetting receipts
and direct spending of those receipts by about $220 million
over the 2000-2005 period. Because S. 2045 would affect direct
spending, pay-as-you-go procedures would apply.
S. 2045 would impose an intergovernmental mandate as
defined in the Unfunded Mandates Reform Act (UMRA), but CBO
estimates that the costs of complying with this mandate would
be very small and would not exceed the threshold established in
that act ($55 million in 2000, adjusted annually for
inflation).
S. 2045 would impose private-sector mandates as defined by
UMRA by extending, for one year, two requirements of certain
employers of persons with H-1B visas. However, CBO estimates
that the direct costs of those mandates would not exceed the
annual threshold established in UMRA for private-sector
mandates ($109 million in 2000 dollars, adjusted annually for
inflation).
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 2045 is shown in Table 1. The costs of
this legislation fall within budget functions 150
(international affairs), 250 (general science, space, and
technology), 500 (education, employment, training, and social
services) and 750 (administration of justice).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF S. 2045, THE AMERICAN COMPETITIVENESS IN THE TWENTY-FIRST CENTURY ACT
OF 2000
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
------------------------------------------------
2000 2001 2002 2003 2004 2005
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated authorization level.................................. 0 21 20 20 20 20
Estimated outlays.............................................. 0 21 20 20 20 20
Net spending or visa fees under current law:
Estimated budget authority................................. 0 0 0 0 0 0
Estimated outlays.......................................... -39 -10 72 36 9 0
Proposed changes:
INS administrative fees:
Estimated budget authority......................... -11 -10 -14 0 0 0
Estimated outlays.................................. -11 -10 -14 0 0 0
H-1B petitioner fees:
Estimated budget authority......................... -45 -39 -86 0 0 0
Estimated outlays.................................. -45 -39 -86 0 0 0
Department of State fees:
Estimated budget authority......................... -5 -4 -6 0 0 0
Estimated outlays.................................. -5 -4 -6 0 0 0
Total change in visa fee collections:
Estimated budget authority......................... -61 -53 -106 0 0 0
Estimated outlays.................................. -61 -53 -106 0 0 0
Additional spending from visa fees:
Estimated budget authority......................... 61 53 106 0 0 0
Estimated outlays.................................. 16 24 49 57 54 18
Net change in direct spending:
Estimated budget authority......................... 0 0 0 0 0 0
Estimated outlays.................................. -45 -28 -57 57 54 18
Net direct spending under S. 2045:
Estimated budget authority................................. 0 0 0 0 0 0
Estimated outlays.......................................... -84 -38 15 93 63 18
----------------------------------------------------------------------------------------------------------------
Basis of estimate
CBO estimates that implementing S. 2045 would cost about
$21 million in 2001 and about $20 million a year for 2002
through 2005, assuming appropriation of the necessary funds. In
addition, we estimate that enacting the bill would decrease
direct spending for 2000, 2001, and 2002, and increase spending
for 2003, 2004, and 2005. Over the 2000-2005 period, CBO
estimates that net direct spending would decrease by $1
million. For the purpose of this estimate, CBO assumes that S.
2045 will be enacted by June 1, 2000.
Spending Subject to Appropriation.--For the purposes of
this estimate, CBO assumes that $20 million authorized to be
appropriated for the technology grants to the Boys and Girls
Clubs will be appropriated at the start of each fiscal year
over the 2001-2005 period, with spending expected to occur in
the same year. (The bill would authorize an additional $20
million for such grants in 2006.) CBO estimates that the NSF
study would cost about $1 million in fiscal year 2001, subject
to the availability of approprited funds.
Direct Spending.--S. 2045 would increase the number of
nonimmigrant visas available to certain skilled workers by
about 100,000 in fiscal year 2000, by 87,500 in fiscal year
2001, and by 130,000 in fiscal year 2002. Table 2 shows the
number of visas authorized by current law and the levels
proposed under S. 2045. For 2000, the increase consists of a
specified additional 80,000 visas plus an estimated addition of
about 20,000 visas because section 3 of the bill would allow
for certain exemptions from the cap on H-1B visas in that year.
TABLE 2.--NUMBER OF H-1B VISAS AUTHORIZED UNDER S. 2045
------------------------------------------------------------------------
2000 2001 2002
------------------------------------------------------------------------
H-1B visas authorized under current law 115,000 107,000 65,000
Additional H-1B visas authorized under 100,000 87,000 130,000
S. 2045...............................
--------------------------------
Total H-1B visas authorized under 215,000 195,000 195,000
S. 2045.........................
------------------------------------------------------------------------
The administrative fee for these visas is $110 each, and
CBO estimates that all of the additional authorized visas would
be issued. Thus, enacting the bill would increase fees
collected by the INS by about $11 million in fiscal year 2000,
by $10 million in 2001, and by $14 million in 2002. We expect
that the INS would spend the fees (without appropriation
action), mostly in the year in which they are collected. Thus,
enacting this portion of S. 2045 would result in a negligible
net budgetary impact in each year.
In addition to the administrative fees collected under this
bill, most employers of the affected workers must pay a
petitioner fee of $500 per worker hired by October 1, 2001. The
bill would extend the petitioner fee until October 1, 2002.
Consequently, CBO estimates that the INS would collect
additional petitioner fees of about $45 million in fiscal year
2000, $39 million in 2001, and $86 million in 2002 (or a total
of $170 million over the three-year period). As under current
law, these additional petitioner fees would be spent without
further appropriation by the Department of Labor (DOL) to help
train domestic workers for jobs in the technology sector, by
NSF for certain scholarship and science education initiatives,
and by DOL and INS for administrative expenses.
S. 2045 would change the formulas governing the allocation
of petitioner fees among DOL, NSF, and INS. For purposes of
this estimate, CBO assumes that the new formulas would take
effect upon enactment, thereby changing the distribution of
both the estimated $170 million in new collections under the
bill and the $174 million expected to be collected under
current law in 2000 and 2001. The formulas in S. 2045 would
allocate 42.2 percent of the amounts collected to DOL for job
training and administrative expenses, compared to 62.3 percent
under current law. NSF would receive 59 percent of the fees for
scholarships and other grants, versus 36.2 percent under
current law. Finally, 1.5 percent of the funds would go to INS
to help offset administrative costs. These new allocations
total 102.7 percent of the fees, compared to 100 percent under
current law. However, CBO assumes that spending would be
limited by the amounts actually collected. Therefore, CBO
estimates that new spending from petitioner fees authorized
under S. 2045 would equal the $170 million collected. (If
spending were not limited by the amounts collected, CBO
estimates that enacting the allocation formula authorized by S.
2045 would result in spending of $10 million more than would be
collected over the 2000-2005 period.)
This bill also would increase collections by the Department
of State for H-1B visas; the fee for those visas is currently
set at $45 per person. CBO estimates that, on average, the
State Department would collect and spend an additional $5
million a year over the 2000-2002 period, and the net budgetary
impact would be around $1 million or less each year.
Individuals classified as nonimmigrants are ineligible for
most federal public benefits, with a few exceptions that
include emergency Medicaid services. Given that H-1B visa
recipients are skilled workers admitted for employment, CBO
expects that any increase in costs for these services would not
be significant.
In addition to provisions concerning the H-1B nonimmigrant
visas, S. 2045 also would affect immigrant (permanent) visas.
Current law provides for a cap on the number of employment-
related immigrant visas that can be granted to natives of any
one country in a given year. The bill would remove this cap,
which could result in a small increase in the number of visas
granted, and thus could increase fees collected by the INS. We
expect that additional fees would not exceed $500,000 annually,
most of which would be spent in the same year, resulting in a
negligible net budgetary impact.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. The net
changes in outlays that are subject to pay-as-you-go procedures
are shown in Table 3. For the purposes of enforcing pay-as-you-
go procedures, only the effects in the current year, the budget
year, and the succeeding four years are counted.
TABLE 3.--ESTIMATED IMPACT OF S. 2045 ON DIRECT SPENDING AND RECEIPTS
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------------------------------------
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
----------------------------------------------------------------------------------------------------------------
Changes in outlays.............. -45 -28 -57 57 54 18 0 0 0 0 0
Changes in receipts............. Not applicable
----------------------------------------------------------------------------------------------------------------
Estimated Impact on State, Local, and Tribal Governments:
S. 2045 would extend for one year the requirement that
employers, including state and local governments, pay the $500
petitioner fee when they hire an H-1B visa holder. This
requirement would be an intergovernmental mandate as defined in
UMRA. While CBO is uncertain how to calculate the costs of such
a mandate (as discussed below in the private-sector section),
we estimate that costs to state and local governments would be
very small and would not exceed the threshold established in
UMRA ($55 million in 2000, adjusted annually for inflation).
Estimated impact on the private sector: S. 2045 would
impose private-sector mandates on employers that hire H-1B visa
holders by extending for one year two existing mandates that
would otherwise expire on October 1, 2001. The American
Competitiveness and Workforce Improvement Act of 1998 prohibits
any ``H-1B-dependent'' employer from hiring any H-1B visa
holder within 90 days of firing another employee from a similar
position. (An H-1B-dependent employer is a business where at
least 15 percent of the employees are foreigners with H-1B
visas.) The same act also requires that all employers that hire
H-1B visa holders pay a $500 fee to the government for each H-
1B holder they hire.
CBO cannot determine whether these mandates would impose
any costs on the private sector as defined in UMRA because the
law is unclear about how to measure costs associated with
extending an existing mandate that has not yet expired. The
costs of the extension would be equal to the current cost of
compliance if measured against the costs that would be incurred
if current law remains in place and the mandate expires.
Because there are very few H-1B-dependent employers, CBO
expects that the cost of extending the prohibition on firing
current employees would be low. The fee extension, which would
affect all employers that hire H-1B holders, would be more
costly. CBO estimates that the government would collect over
$50 million by extending the fee provision.
In contrast, UMRA may also be interpreted to mean that the
costs would be measured against the current costs of complying
with the mandate. In that case, the mandate would impose no
additional costs on the private sector because the extension
would not force employers to change their current behavior. In
either case, CBO estimates that the total costs to the private
sector would fall below the threshold established in UMRA ($109
million in 2000, adjusted annually for inflation).
The employers affected by the extensions are among those
most likely to benefit from the bill's other provisions,
particularly the increase in the number of available H-1B
visas.
Estimate prepared by: Federal costs: DOL: Christina Hawley
Sadoti, State Department: Sunita D'Monte, INS: Mark Grabowicz,
NSF: Kathy Gramp; impact on State, local, and tribal
governments: Theresa Gullo; Impact on the Private Sector: John
Harris.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
VII. Regulatory Impact Statement
Pursuant to paragraph 11(b), rule XXVI of the Standing
Rules of the Senate, the Committee, after due consideration,
concludes that Senate bill 2045 will not have direct regulatory
impact.
VIII. ADDITIONAL VIEWS OF SENATORS LEAHY, KENNEDY, BIDEN, FEINGOLD,
TORRICELLI, AND SCHUMER
Introduction
The views contained here are considered ``additional
views'' because they reflect the serious reservations held by
many Members of the Judiciary Committee despite the fact that
most minority Members voted in favor of S. 2045 as amended.
Some Members voted for that bill to demonstrate a good-faith
effort to address the immediate matters at hand while not
completely agreeing with the Majority's long-term approach to
resolving the high skill shortage in our workforce, as
presented in the views below.
Our Nation's economy is experiencing a time of
unprecedented growth and transition. This strong economic
growth can, in large measure, be traced to the vibrant,
competitive and fast-growing high-technology industry.
Information technology, biotechnology and its associated
manufacturers have created more new jobs than any other part of
the economy. In fact, today the software industry's
contribution to the economy is greater than the contribution of
any other manufacturing industry in America--an extraordinary
achievement for an industry that is less than 30 years old.
The rapid growth of high technology has made it the
Nation's third largest employer, with over 4.8 million workers
in high-tech related fields, working in jobs that pay 70
percent above average incomes. The Bureau of Labor Statistics
projects that the number of core IT workers will grow to a
staggering 2.6 million by 2006--an increase of 1.1 million from
1996.
With such rapid change, we find ourselves stretched thin to
support these new businesses and the growth opportunities they
present. The most cited constraint on future growth of the
high-tech industry is clearly the shortage of people with the
skills and technical background to take on jobs in the
industry. A survey conducted by the Information Technology
Association of America identified more than 346,000 unfilled IT
positions. Several factors are contributing to this shortage,
including an inaccurate, negative image of IT occupations as
dry and overly demanding, the under-representation of women and
other minorities in the IT workforce, and outdated academic
curricula that often does not keep pace with industry needs.
All of us want to be responsive to our Nation's need for
high-tech workers. We know that unless we take steps now to
address this growing workforce gap, America's technological and
economic leadership will be jeopardized.
We also agree with the majority's view that we need to find
both short- and long-term solutions to resolve this critical
labor shortage. We disagree, however, that S. 2045 addresses
both sides of this problem. S. 2045 places too much emphasis on
increasing the H-1B cap as the immediate and best solution to
this workforce gap. Barely any importance is placed on finding
long lasting solutions that will provide our workforce with the
skills needed to benefit from this growth economy and help our
companies continue to grow.
The H-1B visa cap should be increased, but in a way that
better addresses the fundamental needs of the American economy.
Simply raising the cap, without meaningfully addressing our
long-term labor needs misses the point. We must place greater
emphasis on education and training to satisfy the rapidly
growing demand for skilled IT workers. The Kennedy amendment
ensures that the H-1B program will contribute to solving the
long-term IT skill shortage by strengthening training
opportunities for U.S. workers and educational opportunities
for U.S. students.
A Modest Increase in the H-1B High-Tech Visa Cap Is Justified, But it
Must Be Temporary, Reasonable and Sufficiently Tailored To Meet
Existing Short-Term Needs
A modest increase in the H-1B high-tech visa cap is
justified. But this increase must be temporary, reasonable and
sufficiently tailored to meet existing short-term needs. The
Kennedy amendment meets these requirements. Raising the annual
cap to 145,000, an increase of 30,000 additional visas, plus an
exemption for individuals with degrees higher than a masters--
approximately 10,000 to 14,000 additional visas--provides the
IT industry with a sufficient number of H-1B visas to meet the
immediate, short-term labor shortages.
In contrast, S. 2045 proposes increasing the H-1B visa cap
to 195,000. This number is not inherently unacceptable, but the
bill would also exempt from the cap graduate degree recipients
from American universities and persons employed by institutions
of higher education, affiliated entities and nonprofit and
government research institutions. Based on recent statistics
provided by the Immigration and Naturalization Service, we
estimate that these exemptions could result in as many as
40,000 additional H-1B visas being issued per year, raising the
overall numbers of H-1B visas to 235,000 per year. This figure
is well above the number of visas even the most ardent IT
industrylobbyists claim are needed.
No one would disagree that the persons contemplated by
these exemptions are clearly the types of professionals our
universities and our industries need. However, exempting all of
them from the H-1B visa cap results in a significant increase
in the admission of persons with relatively less specialized
skills.
While many Members of the Committee would have preferred to
have more reliable evidence before supporting such a large
increase in the cap, many voted to proceed with the Majority's
195,000 cap since the potential needs of our economy are of
such importance and such evidence is in progress. For example,
the bill that we passed in 1998 directed the National Academy
of Sciences (NAS) to study the issue of worker shortages in the
information technology industry and allegations of age
discrimination in the industry. NAS has not yet completed this
report. The 1998 legislation also directed the INS to report
information on H-1B workers, their employers and occupations by
October 2000. The INS has not yet completed its report. The
results of these reports should soon demonstrate more precisely
the particular needs of the IT industry and U.S. workforce for
future legislation.
In the meantime, we believe that the H-1B debate should not
focus solely on the number of visas available for foreign
skilled workers, but should also emphasize employers' need for
as many workers with the highest professional credentials as
possible. Strong arguments can be made for expanding the number
of H-1B visas needed to fill an unmet shortage for masters and
doctoral level professionals who possess specialized skills
that cannot be easily and quickly produced domestically. Any
increase in the visa cap should therefore be done with an
increased proportion of foreign workers entering with a
master's degree or higher. The Kennedy amendment promotes this
goal by reserving within the cap an increasing number of H-1B
visas for petitioners with at least a master's degree. In
fiscal year 2000, 45,000 H-1B visas are reserved; the number
increases to 50,000 in fiscal year 2001, and 55,000 in fiscal
year 2002.
The exemption for individuals with doctoral degrees
addresses the special concerns of the universities and research
institutions as well as high-tech companies. In the last few
years, as a result of their unique hiring cycle, these
institutions have been unable to secure the foreign nationals
they need as qualified professors and researchers. Our
universities, and our country as a whole, benefit from the
admission of these exceptionally talented individuals. They
represent the best the world has to offer. We welcome these
accomplished individuals and the unique skills they will bring
to strengthen and diversify our economy.
The vast majority of the foreign nationals hired by these
institutions have Ph.D.'s, earned either in the U.S. or at one
of the premier universities abroad. S. 2045 provides a limited
exemption for Ph.D.'s. The Kennedy amendment proposes an
unencumbered exemption for these exceptionally gifted foreign
nationals and ensures their admission.
We Must Ensure That U.S. Workers Are Not Harmed by Our Immigration
Policies
In considering a new high-tech immigration bill, we must
ensure that U.S. workers are not harmed by our immigration
policies. We should not bring in temporary foreign workers to
do jobs that U.S. workers could fill. We should also not bring
in so many temporary foreign workers that the wages and
benefits of U.S. workers become artificially depressed. We know
that the IT industry has a current need for additional workers,
but we also know that many U.S. workers want good paying high-
technology jobs. We understand that not every American worker
can step in and perform these tasks--some of them need skills
training so they can move from low-paying service sector jobs
into better paying information technology jobs. But others are
laid off IT workers or recent college graduates who can assume
those positions immediately.
We are experiencing the longest period of economic growth
and prosperity in our Nation's history and an unemployment rate
just over 4 percent, the lowest level in 30 years. The
information technology industry, like many other industries
today, must contend with a tight job market during these times
of low unemployment. We are concerned that data from the Bureau
of Labor Statistics show that real median weekly high-
technology wages were actually less in 1998 than in 1995, while
wages for other managers and professionals rose during that
same time. We must ensure that the ready supply of H-1B workers
in the information technology industry is not keeping wages and
benefits artificially low.
Although many new jobs are created in the IT industry each
year, we also know that thousands of IT workers were laid off
in 1999. For example 5,180 workers lost their jobs at
Electronic Data Systems, 2,150 at Compaq, and 3,000 at NEC-
Packard Bell. We also know that some IT companies classify
their workers as independent contractors or temporary workers
rather than as employees in part to avoid paying them benefits.
According to a February 8, 1999, article in ``Computerworld''
magazine, U.S. Census Bureau data show that the unemployment
rate for IT workers over age 40 is more than five times that of
other unemployed workers. An IEEE-USA survey of its membership,
completed in December 1998, found that each year of age above
45 adds 3 weeks to the duration of unemployment experienced by
electrical engineers.
As we address the needs of the IT industry, we must strive
to first place those laid off workers in new jobs and to
enforce our labor and employment laws so that the current IT
workforce gets the pay, benefits, and working conditions to
which they are entitled.
We must also do more to increase the number of women and
minorities in the IT workforce. The number of women entering
the IT field has dramatically decreased since the mid 1980's.
The number of persons from most minority groups is also very
low.
Expanding Job Training for U.S. Workers Is Critical and Provides Us
With the Only Long-Term Solution to This Labor Shortage
A temporary influx of foreign workers and students may be
needed in the short-term to help meet the demands by U.S. firms
for high skilled workers. But we cannot count on foreign
sources of labor as a long-term solution since the supply of
foreign workers is limited. In their 1999 book, ``The Supply of
Information Technology Workers in the United States,'' Peter
Freeman and William Aspray report that other countries are
experiencing their own IT labor shortages and ``placing
pressures on or providing incentives to their indigenous IT
workforce to stay at home or return home.'' They warn that
countries like Canada, The Netherlands, the United Kingdom,
Israel, and Belgium will be competing with the United States
for IT workers from countries like India that have an IT worker
surplus. This warning is echoed in the March 7, 2000, New York
Times article ``High-Tech Firms Warn EU Leaders of IT Skills
Gap,'' which quotes large IT companies like Microsoft as saying
that the ``IT skills gap in the EU is large and growing,'' and
the ``demand for IT professionals will outstrip supply by 13
percent by 2003.'' Faced with this crisis, the article reports
that these IT companies have asked EU leaders to take urgent
steps, such as promoting education and training in the new
information technologies.
These recent articles support our contention that any
legislation increasing these visas should substantially invest
in improved job training for U.S. workers and better education
for U.S. students. We must give the U.S. workers the skills
they need to qualify for these jobs. And as a nation, we have
an obligation to invest in our students, the workers of
tomorrow. Expanding the number of H-1B visas is no substitute
for fully developing the potential of our domestic workforce.
An educated workforce has become the most valuable resource in
the modern economy. Expanding job training for U.S. workers and
educational opportunities for U.S. students is critical and
provide us with the only long-term solution to this labor
shortage.
Many high-tech companies are investing significant
resources in education, and to a limited extent, in training
programs. The majority lists many commendable examples of high-
tech companies that have contributed considerable resources to
improve our communities around the country. In carefully
reviewing these examples, however, we notice that the focus of
their contributions are in education, not worker training. And
as would be expected, the companies devoting funds for these
initiatives are the largest and richest IT companies--
Microsoft, Intel, Texas Instruments, Hewlett Packard, and
Netscape.
According to the ``2000 ASTD (American Society for Training
and Development) State of the Industry Report,'' total employer
training costs equaled 2 percent of total payroll costs in
1998. But, according to the National Association of
Manufacturers, many companies spend less than 1 percent of
their payroll on training, and many others have no retraining
programs to provide incumbent workers with new or updated
skills. Small firms often do not have the resources to provide
their workers with the training they need to keep pace with the
rapid changes in industry.
Only when businesses address the shortage of highly skilled
workers as a national problem with a national solution--rather
than a company-by-company approach to worker training--will our
workforce be able to meet the growing demand for high skills,
and will our economy be able to continue to prosper.
As such, any credible legislative proposal to increase the
number of high-tech workers available to American businesses
must begin with the expansion of career training opportunities
for American workers. Our Nation's long-term economic vitality
depends on the creation of effective, accessible, and
accountable job training initiatives that are open to all our
citizens. The importance of highly developed employment skills
has never been greater--for the continued growth of our economy
and for individual workers seeking secure, well paying jobs.
There are very few investments we can make that would
produce a better return for our Nation's economy than investing
in workforce training. Despite the overwhelming evidence, we
have been slow to increase the level of funding for training
programs. The only portion of the workforce system that has
received a substantial increase is the dislocated worker
program. However, participation in that program is limited to
workers who have been discharged by an employer and are
currently unemployed. That is only one small segment of the
workforce, of which only 9 percent are served by public job
training programs. We need to create high-tech training
opportunities on a large scale for those who currently hold
relatively low paying jobs and wish to obtain new skills to
enhance their employability and their earning potential.
Because many more jobs require advanced skills, the gap in
earnings between skilled and unskilled workers has steadily
widened over the last decade. The impact of increased education
on earnings is very pronounced among workers with less than a
college degree. In the 1990's, the rate of real growth in the
average income of a worker with an associate's degree from a
community college increased 2\1/2\ times the rate of income
growth for a high school dropout. Even relatively brief periods
of training in high-tech workforce skills can make a very real
difference for both the worker and his or her employer.
When we expanded the number of H-1B visas in 1998, we
created a modest training initiative funded by visa fees. The
Kennedy amendment proposes to substantially expand and
strengthen that program to provide state-of-the-art high-tech
training for large numbers of workers. It is one of the best
ways to keep the economic expansion going and to extend the
current prosperity well into the new century. The information
technology industry has been a major catalyst for the recent
growth in the U.S. economy, and well trained workers are
essential to keep the trend going.
To help meet this need, the Information Technology Training
Initiative will provide a significant level of new financial
support for regional workforce boards in areas with substantial
high-tech skill shortages. It would be awarded by competitive
grants based on innovative high-tech training proposals
developed by workforce boards in partnership with one or more
area employers, and one or more unions, community
organizations, or higher educational institutions. The
financial resources for this initiative would come from higher
H-1B visa petition fees on an increased number of visas, and
matching partnership resources. This will allow us to expand
the funding provided through the H-1B program for training,
resulting in over $250 million each year. This program will
serve 50,000 workers each year--both those who are currently
employed and are seeking to enhance their skills, as well as
those who are currently unemployed.
At least 80 percent of the funds generated by this program
will be reserved for training in the high-tech skills required
by the information technology and biotechnology industries,
including software and communications services,
telecommunications, systems installation and integration,
computers and communications hardware, health care technology,
biotechnology, biomedical research and manufacturing and
innovative services. These are the skills most in demand by
those companies which are fueling our economic growth. We need
to concentrate our limited resources on preparing workers for
these positions.
Training grants will be targeted at those areas which can
demonstrate a substantial unmet need for workers with these
skills. This program is designed to encourage broad community
participation in the training initiatives with the regional
Workforce Investment Boards. We are looking for active
participation by high-tech companies and trade associations
representing small, high-tech-oriented businesses, labor unions
representing high-tech workers, and community organizations and
educational institutions involved in developing and overseeing
these training programs. In order to maximize the number of
workers receiving training, workforce boards and other
participants are being asked to contribute a 50 percent local
match of the Federal grant in either dollars or services.
These programs will be expected to demonstrate concrete
results--trainees placed in high-tech jobs, wage increases and
promotions for incumbent workers who have upgraded their
skills, and attainment of performance levels required by
occupational skill standards.
S. 2045 will shut the door to training for thousands of
American workers. Instead of expanding existing H-1B training
opportunities for American adults, the Feinstein-Abraham
amendment to S. 2045 cuts the percentage of H-1B fee revenues
that goes to worker training from 56.3 percent to 36.2 percent.
As a result of this cut, the dollar amount spent on training
remains the same--a mere $54 million that would train
approximately 16,000 workers.
In contrast, the Kennedy amendment would provide $167
million to train more than 50,000 workers. The majority states
in this report that we must increase our training efforts ``so
that more Americans can be prepared to keep this country at the
cutting edge and competitive in global markets.'' But how can
anyone believe that S. 2045 would accomplish this goal when it
dramatically expands the H-1B program while doing nothing to
increase the amount of money going to train U.S. workers?
Educational Opportunities for U.S. Students Must Be Increased
As we enter the 21st century, careers increasingly require
advanced degrees, especially in math, sciences, engineering,
and computer sciences. According to ``21st Century Skills for
21st Century Jobs,'' a report published last January by the
U.S. Department of Commerce, U.S. Department of Education, U.S.
Department of Labor, and the National Institute for Literacy
and Small Business Administration, 8 of the 10 fastest growing
jobs of the next decade will require college education or
moderate- to long-term training. The three fastest growing jobs
are in the IT industry--database administrators, computer
engineers, and systems analysts.
We must encourage students, including minority students, to
consider degrees in math, sciences, computers, and engineering.
Today, the number of students graduating from American
universities with engineering degrees is at a 17-year low. We
need to change this disturbing trend. Scholarship opportunities
must be meaningfully expanded for talented minority and low-
income students whose families cannot afford today's high
college tuition costs. With increased opportunities for
scholarships, students completing 2-year degrees will be
provided with incentives to continue their education and obtain
4-year degrees.
Building on the foundation established by the 1998 high-
tech bill, the Kennedy amendment would substantially increase
the funds available through the National Science Foundation
(NSF) to provide scholarships to low-income students pursuing
degrees in math, science, and engineering. This year, the NSF
received approximately $20 million toward low-income
scholarships. With the proposed increase in the H-1B petition
fees, the Kennedy amendment would generate over $100 million in
scholarships--increasing the current total fivefold and
resulting in more than 25,000 scholarships.
In contrast, S. 2045, as modified by the Feinstein-Abraham
amendment, would only provide $46 million for low-income
scholarships. With funding at this level, less than 15,000
scholarships would be awarded. If we are truly committed to
finding long term and long lasting solutions to the IT
workforce shortages, we must be prepared to make a more
substantial investment in education.
A recent report on undergraduate education, issued by the
NSF, stated that financial concerns can intrude upon, and
significantly hamper, a student's learning experience. Low-
income students are often compelled to finance their college
education by working long hours in jobs that leave them little
time for laboratories and other demands of a strenuous
curriculum in math, science, engineering, or computer science.
The availability of scholarships for low-income students
significantly enhances their academic performance and
graduation rates.
The Feinstein-Abraham amendment raises the level of
scholarship awards available to individual students from $2,500
per year to $3,125 (the Pell Grant amount). This increased
amount is still significantly below the average tuition and fee
levels of most baccalaureate and graduate programs. Both NSF
and CRS have indicated that higher scholarship amounts are
needed to effectively assist low-income students. The Kennedy
amendment deletes the cap on individual scholarship awards,
enabling the NSF, based on their unique expertise and proven
track record, to set the amount of the individual awards.
The fact that American students lack the degrees to compete
for good jobs in the IT industry is a distressing aspect of our
educational system. Our schools must keep pace with these
demands. We must do all we can to improve K-12 education, and
from an early age, instill the skills needed in the new
millennium. But this must be done on a much larger scale than
the well-intentioned but modest K-12 systemic reform programs
proposed by the Feinstein-Abraham amendment. Reforms of this
magnitude would require billions of dollars, and are presently
being discussed in the reauthorization for the Elementary and
Secondary Education Act. Although the Feinstein-Abraham
amendment includes some interesting ideas, for example, the
``technology fellows,'' Congress should hesitate to create new
programs--however credible they may inherently be--through the
H-1B legislation. Instead of taking away $38 million from high-
skill adult training, we should boost what the H-1B user fees
already support: worker training, scholarships, and after-
school programs to bridge the digital divide.
The information age presents an era of new possibilities
for the entire Nation. It is one of the greatest periods of
innovation and change in history. But millions of Americans,
particularly those at lower income levels, risk being left
behind because of lack of access to technology. Closing the
digital divide must therefore be an important part of our long-
term approach to meeting the growing demand for highly skilled,
technology trained workers. If we commit now to providing low-
income students with greater access to technology, and expose
them to the challenges and excitement of math, science, and
engineering, we can build a technologically fluent workforce
prepared to maintain America's competitive edge in the global
marketplace.
Unfortunately, S. 2045 misses the mark on the digital
divide by calling for an NSF study on the issue. Considering
that the Department of Commerce is scheduled to release its
third report on the digital divide this fall, the last thing we
need is another study.
The bill fails to offer any concrete proposals to address
existing disparities. In fact, with the Feinstein-Abraham
amendment, S. 2045 would reduce the funding allocated to the
NSF school enrichment program from 4 percent to 2.5 percent,
resulting in only $3 million in fee revenues.
By contrast, the Kennedy amendment includes a digital
divide component designed to help strengthen the pipeline of
young people prepared to enter college and the workforce with
the skills necessary to compete for technology-related jobs.
The proposal is a substantive out-of-school math, science, and
engineering enrichment program targeted toward low income,
middle and high school students. Through merit-based,
competitive grants, the NSF will fund public/private
partnership programs that provide these young people with
meaningful training and exposure to careers in math, science,
and engineering.The Kennedy amendment allocates 9 percent of
the H-1B user fees to fund this program, resulting in $30 million in
revenues.
The NSF grants offer technology companies the flexibility
to start new partnerships with schools, local community groups,
or professional societies or expand upon existing programs that
have proven successful. An out-of-school enrichment program
that focuses on math, science, and engineering is an ideal
complement to the college scholarship program. We should all
support this important and effective approach to closing the
digital divide by opening the door to careers in math, science,
and engineering.
At a Time When the IT Industry Is Experiencing so Much Economic Growth
and Record Profits, the Industry Can Afford To Pay a Higher Fee in
Order To Invest in Technology Skill Upgrades and Education
The current H-1B visa petition fee stands at $500, and S.
2045 provides no increase in that fee. As a result the increase
in the visa cap would only raise $150 million. This is
insufficient to provide the necessary education and training to
support our Nation's economic expansion and future prosperity.
This goal can only be accomplished when we put additional funds
on the table for training and education.
The Kennedy amendment offers a three-tiered fee structure,
depending on the total number of employees in each company.
Employers with 150 or fewer employees would pay a $1,000 fee,
those with 151 to 500 employees would pay $2,000, and employers
with over 500 employees would pay $3,000. ``Job shops,'' which
are defined as H-1B dependent companies, would also pay $3,000.
We estimate that the Kennedy amendment would raise $333 million
for U.S. workers and students.
The majority calls this fee increase ``excessive.'' They
express concern that doubling the fee for some small businesses
and raising it to $3,000 for others will cause these companies
to suffer financial hardship. At a time when the IT industry is
experiencing rapid economic growth and record profits, there is
no reason why even the smallest of businesses should not pay a
slightly higher fee in order to invest in technology skill
upgrades and education. The majority points out that H-1B
employers typically pay legal fees of $3,000 or more to secure
needed employees. There is anecdotal evidence that both small
and large IT companies offer sizable signing bonuses and even
new automobiles to recruit new employees. Weekly news articles
describe how record profits by IT companies are producing
hundreds of new millionaires. Given these circumstances,
requiring these companies to pay higher fees to help fund long-
term and long-lasting solutions to their own labor shortages is
surely not excessive and will not result in any credible
financial hardship.
Furthermore, the majority should remember that immigrant
families with very modest incomes must pay a $1,000 fee to
obtain green cards here in the United States. Certainly, multi-
million dollar companies can afford to pay at least as much for
these visas.
We Should Expand the Workforce Training Program Established by the 1998
Legislation, Not Dismantle It
The majority did not discuss the Kyl amendment, which if
successful, would have transferred from the Department of Labor
to the Department of Commerce responsibility for the employment
training program established by the 1998 legislation. We are
concerned that this type of initiative was prompted by
inaccurate assumptions and misperceptions and therefore believe
that this issue merits further discussion.
In 1998, Congress overwhelmingly passed the Workforce
Investment Act establishing a new, innovative framework for
employment training programs. It was the product of several
years of effort with extensive input from all of the key
constituencies involved in job training. It provides an
effective and modern program structure for workforce training
which will go into effect in most States this summer. We are
concerned that initiatives like the Kyl amendment would
circumvent the new workforce system before it even goes into
effect. To do so would be a serious mistake.
What is needed now are additional resources. Congress has
not provided resources sufficient to meet the dramatically
expanding demand for worker training and retraining, especially
the need of those who are already employed to upgrade their
skills. The revenue collected from the H-1B visa user fees can
be the source of significant new resources allowing us to train
thousands of additional workers each year in high-tech skills
through the workforce investment boards. We should not be
designing a new training structure that bypasses everything we
have so recently put in place. We should not be reinventing the
training wheel when all that is needed is additional fuel to
turn it.
Others urging that responsibility for workforce training be
shifted to the Department of Commerce contend that the
Department of Labor was slow in implementing the training grant
program established by the 1998 act and the money has not been
put to good use. We believe that these criticisms are
unwarranted.
Any new competitive grants program requires a significant
amount of time to consult with interested groups, draft and
redraft rules and parameters for competition and clear all
language with OMB. This would require several months for any
agency. Havingsome or all of the future training funds
delivered through the Department of Commerce would take at least as
long to set up, and perhaps longer since the Department has no history
of competing-out grants of this nature.
The Department of Labor announced the first round of
training grant awards on February 10, 2000, awarding nine
grants for a total of $12.4 million, eight of which went to
high-tech initiatives. Below is a description of the recent
grant recipients:
Hamden County, MA ($1.5 million)
The Information Telecommunication Technologies Workforce
Development Project will upgrade the technical skills of 210
employed and unemployed workers for highly skilled jobs in the
IT industry. Partners include Coghlin Electrical Contractors,
Systems Software Support, Inc., RCN Javanet, Telitcom
Development Corp., and two area community colleges.
NOVA PIC, Sunnyvale, CA ($1.3 million)
Participants will be provided with the appropriate training
for occupational skills training. Partners include Silicon
Valley Network, Sun Microsystems, and Cisco.
Pima County, Tuscon, AZ ($1.5 million)
The grant will build on a high-tech/high-wage project that
has been underway since 1998. Participants will be trained in
health, IT, electronics, accounting, and management. Partners
include the University of Arizona and employers from the
targeted occupations.
Chicago, IL ($1.5 million)
The purpose of the project is to prepare incumbent workers
for more skilled positions within their companies. Partners
include DePaul University, City College of Chicago, Xpedior,
Integration, uBID, Inc., and Catalyst Consulting Group.
Seattle-King County, WA ($1.5 million)
The project will prepare workers to design, implement and
manage the computer-based enterprises that will drive commerce
and education into the new century. Partners include the
University of Washington, the Washington Software Alliance
(1,400 members) and three area community colleges.
Bridgeport, CT ($1.5 million)
This project will create new career paths to high-skill
jobs by creating Certified Skills Centers where the trainees
will receive on-the-job training in those areas. Partners
include Pepperidge Farm, Pitney Bowes, SACIA, and the Norwalk
Community-Technical College.
Philadelphia, PA ($563,057)
This project will address the needs of area employers for
nurses at all levels and especially for RN's and LPN's.
Partners include Temple University Healthcare Systems, Medical
College of Pennsylvania, AFSCME, and 60 area hospitals.
New Hampshire ($1.5 million)
The project will implement job training that will enable
companies to obtain and retain skilled workers in the State. It
will develop a technical skills feeder pattern for high-tech
firms. Partners include the New Hampshire Technical College
System, the Manufacturing Extension Partnership, the University
of New Hampshire, and the Software Association of New
Hampshire.
Prince George's County, MD ($1.5 million)
The project will provide a multi-regional program to
recruit, assess, train, and place participants in the IT
fields. Partners include CWA, Cisco Systems, Lucent
Technologies, AT&T, Bell Atlantic, US West, and Pac Bell.
Now that the first round of grant awards is completed, and
a system is in place, future rounds will move more rapidly. In
fact, the Department of Labor announced on March 29, 2000, that
it is making $40 million available for a second round of
awards. Proposals for this round will be due in June 2000 and
awards made in August 2000. The third round of competition is
scheduled for September 2000, with awards being announced in
November 2000.
The majority's criticism of the Department of Labor survey
proposed in the Kennedy amendment is also unwarranted. The
Kennedy provision simply proposes that the Department of Labor
conduct an ongoing survey of the level of compliance by
employers with the provisions and requirements of the H-1B
program. The results of this survey would be reported to
Congress in biennial reports. Using statistically reliable
random sampling, only a small number of employers would be
surveyed. There is nothing invasive about this survey, nor does
it override the provisions contained in the 1998 legislation.
In fact, the use of a compliance survey would facilitate the
ability of the Department of Labor to effectively assess
whether employers were adhering to the provisions included in
the 1998 legislation to protect both U.S. and foreign workers
were being adhered to. The need to assess wage compliance
provisions in particular is emphasized in the Office of
Inspector General's 1996 report on the Department of Labor's
Foreign Certification Programs, which found in their sampling
that wage abuse was a common problem.
National compliance surveys are frequently relied upon by
the Department of Labor. Traditional enforcement data, such as
what would result from the Department of Labor's current
investigative authority, can provide an unrepresentative view
of overall compliance because the data is primarily based on
complaint information. Statistically sound investigation-based
compliance surveys, on the other hand, provide a more realistic
measure of compliance in the targeted industry.
We Reject the View That the Only Pro-Immigrant Agenda This Session is
an H-1B Agenda
We express our deep regret that this Committee and this
Congress have failed to consider the many other immigration
bills and issues of utmost importance to immigrants living and
working in this country. As the National Council of La Raza and
other groups point out in letters that Judiciary Committee
Members received recently, ``these are issues that have reached
a crisis level and need immediate legislative attention.''
Unfortunately, unlike the H-1B issue, these other equally
important issues have been ignored by most Members of Congress.
Last year, a broad coalition of immigrant and faith-based
groups launched the ``Fix '96'' campaign to repeal the harsh
and excessive provisions in the 1996 immigration and welfare
laws and restore balance and fairness. All of the issues raised
in this campaign remain outstanding. A number of bills have
been introduced proposing solutions to these problems; other
bills are near introduction. However, the GOP has neither taken
action on nor, for the most part, supported any of these bills
which are as critical to U.S. immigrants in our workforce as H-
1B visas are to the information technology industry. These
issues include parity legislation for Central Americans and
Haitians, restoring protections to asylum seekers, restoring
due process in detention and deportation policy, and restoring
public benefits to legal immigrants and protections to battered
immigrant women and children.
We echo the sentiments of the immigrant groups--that other
equally important immigration bills must be considered this
session. We urge our colleagues to give equal attention to
these other immigration issues that affect so many immigrant
families in our workforce.
Conclusion
We are committed to meeting the needs of our high-tech
industry. But this cannot be accomplished without a long-term
commitment to expand job training for U.S. workers and
educational opportunities to U.S. students. We believe the
Kennedy amendment substitute comes far closer to achieving both
of these goals than the Committee bill.
Patrick J. Leahy.
Edward M. Kennedy.
Joseph R. Biden, Jr.
Russell D. Feingold.
Robert G. Torricelli.
Charles E. Schumer.
IX. Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
S. 2045, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matters is printed in italic, and existing law in which no
change is proposed is shown in roman):
UNITED STATES CODE
* * * * * * *
TITLE 8--ALIENS AND NATIONALITY
Chapter Section
1General Provisions [Repealed or Omitted].......................
* * * * * * *
CHAPTER 12--IMMIGRATION AND NATIONALITY
SUBCHAPTER 1--GENERAL PROVISIONS
* * * * * * *
SUBCHAPTER II--IMMIGRATION
Part I--Selection System
1151. Worldwide level of immigration.
* * * * * * *
Sec. 1152. Numerical limitations on individual foreign states
(a) Per country Level.--
(1) Nondiscrimination.--
(A) Except * * *
* * * * * * *
(2) Per country levels for family-sponsored and
employment-based immigrants.--Subject to [paragraphs
(3) and (4)], paragraphs (3), (4), and (5), the total
number of immigrants visas made available to natives of
any single foreign state or dependent area under
subsections (a) and (b) of section 1153 of this title
in any fiscal year may not exceed 7 percent (in the
case of a single foreign state) or 2 percent (in the
case of dependent area) of the total number of such
visas made available under such subsections in that
fiscal year.
* * * * * * *
(4) Special rules for spouses and children of lawful
permanent resident aliens.--
(A) 75 percent of 2nd preference set-aside
for spouses and children not subject to per
country limitation.--
(i) In general.--Of the * * *
* * * * * * *
(D) Limiting pass down for certain countries
subject to subsection (e).--In the case * * *
(5) Rules for employment-based immigrants.--
(A) Employment-based immigrants not
subject to per country limitation if
additional visas available.--If the
total number of visas available under
paragraph (1), (2), (3), (4), or (5) of
section 203(b) for a calendar quarter
exceeds the number of qualified
immigrants who may otherwise be issued
such visas, the visas made available
under that paragraph shall be issued
without regard to the numerical
limitation under paragraph (2) of this
subsection during the remainder of the
calendar quarter.
(B) Limiting fall across for certain
countries subject to subsection (e).--
In the case of a foreign state or
dependent area to which subsection (e)
applies, if the total number of visas
issued under section 203(b) exceeds the
maximum number of visas that may be
made available to immigrants of the
state or area under section 203(b)
consistent with subsection (e)
(determined without regard to this
paragraph), in applying subsection (e)
all visas shall be deemed to have been
required for the classes of aliens
specified in section 203(b).
* * * * * * *
(e) Special Rules for Countries at Ceiling.--If it is * * *
(1) the ratio of the visa numbers made available
under section 1153(a) of this title to the visa numbers
made available under section 1153(b) of this title is
equal to the ratio of the worldwide level of
immigration under section 1151(c) of this title to such
level under section 1151(d) of this title;
* * * * * * *
(3) [the proportion of the visa numbers] except as
provided in subsection (a)(5), the proportion of the
visa numbers made available under each of paragraphs
(1) through (5) of section 1153(b) of this title is
equal to the ratio of the total number of visas made
available under the respective paragraph to the total
number of visas made available under section 1153(b) of
this title.
* * * * * * *
Part II--Admission Qualifications for Aliens; Travel Control of
Citizens and Aliens
1181. Admission to immigration into the United States.
* * * * * * *
Sec. 1181. Inadmissible aliens
(a) Classes of Aliens Ineligible for Visas or Admission.--
Except. * * *
* * * * * * *
(n) Labor Condition Application.--
(1) No alien may be admitted or provided status as an
H-1B nonimmigrant in an occupational classification
unless the employer has filed with the Secretary of
Labor an application stating the following:
(A) The employer--
* * * * * * *
(E)(i) In the case of an application
described in clause (ii), the employer did not
displace and will not displace a United States
worker (as defined in paragraph (4)) employed
by the employer within the period beginning 90
days before and ending 90 days after the date
of filing of any visa petition supported by the
application.
(ii) An application described in this clause
is an application filed on or after the date
final regulations are first promulgated to
carry out this subparagraph, and before
[October 1, 2001] October 1, 2002, by an H-1B-
dependent employer (as defined in paragraph
(3)) or by an employer that has been found, on
or after October 21, 1998, under paragraph
(2)(C), or (5) to have committed a willful
failure or misrepresetation during the 5-year
period preceding the filing of the application.
An application is not described in this clause
if the only H-1B nonimmigrants sought in the
application are exempt H-1B nonimmigrants.
* * * * * * *
Sec. 1184. Admission of nonimmigrants
(a) Regulations.--
(1) The admission * * *
* * * * * * *
(c) Petition of Importing Employer; Involvement of
Departments of Labor and Agriculture.--
(1) The question of * * *
* * * * * * *
(9)(A) The attorney general shall impose a fee on an
employer (excluding an employer described in
subparagraph (A) or (B) of section 1182(p)(1) of this
title) filing (on or after December 1, 1998, and before
[October 1, 2001] October 1, 2002) a petition under
paragraph (1).
* * * * * * *
(g) Temporary Workers and Trainees; Limitation on
Numbers.--
(1) The total number of aliens who may be issued
visas or otherwise provided nonimmigrant status during
any fiscal year (beginning with fiscal year 1992)--
* * * * * * *
[(3) Aliens who are subject to the numerical
limitations of paragraph (1) shall be issued visas (or
otherwise provided nonimmigrant status) in the order in
which petitions are filed for such visas or status.]
(3) Aliens who are subject to the numerical
limitations of paragraph (1) shall be issued visas (or
otherwise provided nonimmigrant status) in the order in
which petitions are filed for such visas or status. If
an alien who was issued a visa or otherwise provided
nonimmigrant status and counted against the numerical
limitations of paragraph (1) is found to have been
issued such visa or otherwise provided such status by
fraud or willfully misrepresenting a material fact and
such visa or nonimmigrant status is revoked, then one
number shall be restored to the total number of aliens
who may be issued visas or otherwise provided such
status under the numerical limitations of paragraph (1)
in the fiscal year in which the petition is revoked,
regardless of the fiscal year in which the petition was
approved.
(4) In the case of a nonimmigrant described in
section 1101(a)(15)(H)(i)(b) of this title, the period
of authorized admission as such a nonimmigrant may not
exceed 6 years.
(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
101(a)(15)(H)(i)(b)--
(A) who is employed (or has received an offer
of employment) at--
(i) an institution of higher
education (as defined in section 101(a)
of the Higher Education Act of 1965 (20
U.S.C. 1001(a))), or a related or
affiliated nonprofit entity; or
(ii) a nonprofit research
organization or a governmental research
organization; or
(B) for whom a petition is filed not more
than 90 days before or not more than 180 days
after the nonimmigrant has attained a master's
degree or higher degree from an institution of
higher education (as defined in section 101(a)
of the Higher Education Act of 1965 (20 U.S.C.
1001(a))).
(6) Any alien who ceases to be employed by an
employer described in paragraph (5)(A) shall, if
employed a nonimmigrant alien described in section
101(a)(15)(H)(i)(b), be counted toward the numerical
limitations contained in paragraph (1)(A) the first
time the alien is employed by an employer other than
one described in paragraph (5)(A).
* * * * * * *
(l)\1\ Nonimmigrant Elementary and Secondary School
Students.--
---------------------------------------------------------------------------
\1\ So in original. Two subsecs. (l) have been enacted.
---------------------------------------------------------------------------
(1) an alien may not be accorded status as a
nonimmigrant under section 1101(a)(15)(F)(i) of this
title in order to pursue a course of study--
* * * * * * *
(2) An alien who obtains the status of a nonimmigrant
under section 1101(a)(15)(F)(i) of this title in order
to pursue a course of study at a private elementary or
secondary school or in a language training program that
is not publicly funded shall be considered to have
violated such status, and the alien' visa under section
1101(a)(15)(F) of this title shall be void, if the
alien terminates or abandons such course of study at
such a school and undertakes a course of study at a
public elementary school, in a publicly funded adult
education program, in a publicly funded adult education
language training program, or at a public secondary
school (unless the requirements of paragraph (1)(B) are
met).
(m)(1) A nonimmigrant alien described in paragraph (2) who
was previously issued a visa or otherwise provided nonimmigrant
status under section 101(a)(15)(H)(i)(b) is authorized to
accept new employment upon the filing by the prospective
employer of a new petition on behalf of such nonimmigrant as
provided under subsection (a). Employment authorization shall
continue for such alien until the new petition is adjudicated.
If the new petition is denied, employment authorization shall
cease.
(2) A nonimmigrant alien described in this paragraph is a
nonimmigrant alien--
(A) who has been lawfully admitted into the United
States;
(B) on whose behalf an employer has filed a
nonfrivolous application for new employment or
extension of status before the date of expiration of
the period of stay authorized by the Attorney General;
and
(C) who has not been employed without authorization
in the United States before or during the pendency of
such petition for new employment.
* * * * * * *
Part IX--Miscellaneous
1351. Nonimmigrant visa fees.
* * * * * * *
Sec. 1356. Disposition of monies collected under the provisions of this
subchapter
(a) Detention, Transportation, Hospitalization, and All
Other Expenses of Detained Aliens; Expenses of Landing
Stations.--All moneys * * *
* * * * * * *
(s) H-1B Nonimmigrant Petitioner Account.--
(1) In general.--There is established in the general
fund of the Treasury a separate account, which shall be
known as the ``H-1B Nonimmigrant Petitioner Account''.
Notwithstanding any other section of this title, there
shall be deposited as offsetting receipts into the
account all fees collected under section 1184(c)(9) of
this title.
(2) Use of fees for job training.--[56.3 percent]
36.2 percent of amounts deposited into the H-1B
Nonimmigrant Petitioner Account shall remain available
to the Secretary of Labor until expended for
demonstration programs and projects described in
section 414(c) of the American Competitiveness and
Workforce Improvement Act of 1998.
(3) Use of fees for low-income scholarship program.--
[28.2 percent] 30.7 percent of the amounts deposited
into the H-1B Nonimmigrant Petitioner Account shall
remain available to the Director of the National
Science Foundation until expended for scholarships
described in section 414(d) of the American
Competitiveness and Workforce Improvement Act of 1998
for low-income students enrolled in a program of study
leading to a degree in mathematics, engineering, or
computer science.
(4) Additional nsf uses.--
(A) Grants for mathematics, engineering, or
science enrichment courses.--[4 percent] 2.5
percent of the amounts deposited into the H-1B
Nonimmigrant Petitioner Account shall remain
available to the Director of the National
Science Foundation until expended to make
merit-reviewed grants, under section 3(a)(1) of
the National Science Foundation Act of 1950 (42
U.S.C. 1862(a)(1)), for programs that provide
opportunities for enrollment in year-round
academic enrichment courses in mathematics,
engineering, or science.
[(B) Systemic reform activities.--4 percent
of the amounts deposited into the H-1B
Nonimmigrant Petitioner Account shall remain
available to the Director of the National
Science Foundation until expended to carry out
systemic reform activities administered by the
National Science Foundation under section
3(a)(1) of the National Science Foundation Act
of 1950 (42 U.S.C. 1862(a)(1)).]
(B) National science foundation competitive
grant program for k-12 math, science and
technology education.--(i) 25.8 percent of the
amounts deposited into the H-1B Nonimmigrant
Petitioner Account shall remain available to
the Director of the National Science Foundation
until expended to carry out a direct and/or
matching grant program to support private-
public partnerships in K-12 education.
(ii) Types of programs covered.--The Director
shall award grants to such programs, including,
those which support the development and
implementation of standards-based instructional
materials models and related student
assessments that enable K-12 students to
acquire an understanding of science,
mathematics, and technology, as well as to
develop critical thinking skills; provide
systemic improvement in training K-12 teachers
and education for students in science,
mathematics, and technology; stimulate system-
wide K-12 reform of science, mathematics, and
technology in rural, economically disadvantaged
regions of the United States; provide
externships and other opportunities for
students to increase their appreciation and
understanding of science, mathematics,
engineering, and technology; involve
partnerships of industry, educational
institutions, and community organizations to
address the educational needs of disadvantaged
communities; and college preparatory support to
expose and prepare students for careers in
science, mathematics, engineering, and
technology.
* * * * * * *
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PUBLIC LAW 105-277
* * * * * * *
DIVISION C--OTHER MATTERS
* * * * * * *
TITLE IV--AMERICAN COMPETITIVENESS AND WORKFORCE IMPROVEMENT ACT
SEC. 401. SHORT TITLE; TABLE OF CONTENTS; AMENDMENTS TO IMMIGRATION AND
NATIONALITY ACT.
* * * * * * *
SEC. 413. CHANGES IN ENFORCEMENT AND PENALTIES.
(a) Increased Enforcement and Penalties.--Section
212(n)(2)(C) (8 U.S.C. 1182(n)(2)(C)) is amended to read as
follows:
* * * * * * *
(e) Additional Investigative Authority.--
(1) In general.--Section 212(n)(2) (8 U.S.C.
1182(n)(2)), as amended by subsection (d), is further
amended by adding at the end the following:
* * * * * * *
(2) Sunset.--The amendment made by paragraph (1)
shall cease to be effective on [September 30, 2001]
September 30, 2002.
* * * * * * *
SEC. 414. COLLECTION AND USE OF H-1B NONIMMIGRANT FEES FOR SCHOLARSHIPS
FOR LOW-INCOME MATH, ENGINEERING, AND COMPUTER
SCIENCE STUDENTS AND JOB TRAINING OF UNITED STATES
WORKERS.
(a) Imposition of Fee.--Section 214(c) (8 U.S.C. 1184(c))
is amended by adding at the end the following:
* * * * * * *
(d) Low-Income Scholarship Program.--
(1) Establishment.--The Director of the National
Science Foundation (referred to in this subsection as
the ``Director'') shall award scholarships to low-
income individuals to enable such individuals to pursue
associate, undergraduate, or graduate level degrees in
mathematics, engineering, or computer science.
* * * * * * *
(3) Limitation.--The amount of a scholarship awarded
under this subsection shall be determined by the
Director, except that the Director shall not award a
scholarship in an amount exceeding [$2,500 per year.]
$3,125 per year. The Director may renew scholarships
for up to 4 years.
* * * * * * *
(e) The Secretary of the Department of Labor and the
Director of the National Science Foundation shall--
(1) track and monitor the performance of programs
receiving H-1B Nonimmigrant Fee grant money; and
(2) not later than one year after the date of
enactment of this subsection, submit a report to the
Committees on the Judiciary of the House of
Representatives and the Senate--
(A) the tracking system to monitor the
performance of programs receiving H-1B grant
funding; and
(B) the number of individuals who have
completed training and have entered the high-
skill workforce through these programs.
* * * * * * *