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[House Report 106-692]
[From the U.S. Government Publishing Office]

                                                                       
106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-692

======================================================================

 
                 TECHNOLOGY WORKER TEMPORARY RELIEF ACT

                                _______
                                

 June 23, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Smith of Texas, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 4227]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 4227) to amend the Immigration and Nationality Act 
with respect to the number of aliens granted nonimmigrant 
status described in section 101(a)(15)(H)(i)(b) of the 
Immigration and Nationality Act, to implement measures to 
prevent fraud and abuse in the granting of such status, and for 
other purposes, having considered the same, reports favorably 
thereon with an amendment and recommends that the bill as 
amended do pass.

                           TABLE OF CONTENTS

                                                                  

                                                                 Page
The Amendment..............................................           2
Purpose and Summary........................................           8
Background and Need for the Legislation....................           8
Hearings...................................................          31
Committee Consideration....................................          32
Votes of the Committee.....................................          32
Committee Oversight Findings...............................          36
Committee on Government Reform Findings....................          36
New Budget Authority and Tax Expenditures..................          36
Congressional Budget Office Cost Estimate, June 12, 2000...          36
Congressional Budget Office Cost Estimate, June 21, 2000...          42
Constitutional Authority Statement.........................          45
Section-by-Section Analysis and Discussion.................          45
Changes in Existing Law Made by the Bill, as Reported......          51
Dissenting Views...........................................          61

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Technology Worker 
Temporary Relief Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.

    TITLE I--NUMERICAL LIMITATIONS ON H-1B NONIMMIGRANTS; INCREASED 
                       PORTABILITY OF H-1B STATUS

Sec. 101. Temporary increase in access to H-1B nonimmigrants.
Sec. 102. Increased portability of H-1B status.

 TITLE II--NEW REQUIREMENTS ON PETITIONING EMPLOYERS; PETITION FILING 
              FEE REDUCTION FOR LOCAL EDUCATIONAL AGENCIES

Sec. 201. Minimum salary requirement.
Sec. 202. Submission of data on H-1B nonimmigrants after employment 
commencement.
Sec. 203. Fee to enable more efficient paperwork processing.
Sec. 204. Qualifications for physical therapists.
Sec. 205. Reduction of petition filing fee for local educational 
agencies.
Sec. 206. Effective date.

       TITLE III--NONCOMPLIANCE PROVISIONS FOR H-1B NONIMMIGRANTS

Sec. 301. Requiring specialty occupation workers and fashion models to 
obtain status as an H-1B nonimmigrant.
Sec. 302. Requiring full-time employment.
Sec. 303. Requirements for specialty occupation.
Sec. 304. Noncompliance fee.
Sec. 305. Additional requirements on petitioning employers.
Sec. 306. Requiring filing of W-2 forms.
Sec. 307. Effective date.

TITLE IV--EXTENSION OF PROVISIONS FROM THE AMERICAN COMPETITIVENESS AND 
                   WORKFORCE IMPROVEMENT ACT OF 1998

Sec. 401. Protection of United States workers in case of H-1B dependent 
employers.
Sec. 402. Additional investigative authority.
Sec. 403. Requirement to issue regulations.

                      TITLE V--STUDIES AND REPORTS

Sec. 501. Studies and reports by Comptroller General.

    TITLE I--NUMERICAL LIMITATIONS ON H-1B NONIMMIGRANTS; INCREASED 
                       PORTABILITY OF H-1B STATUS

SEC. 101. TEMPORARY INCREASE IN ACCESS TO H-1B NONIMMIGRANTS.

    (a) Eliminating Numerical Limitation for Fiscal Year 2000; 
Conditioning Increases for Fiscal Years 2001 and 2002.--Section 
214(g)(1)(A) of the Immigration and Nationality Act (8 U.S.C. 
1184(g)(1)(A)) is amended to read as follows:
            ``(A) under section 101(a)(15)(H)(i)(b), may not exceed--
                    ``(i) subject to paragraph (5), 107,500 in fiscal 
                year 2001;
                    ``(ii) subject to paragraph (5), 65,000 in fiscal 
                year 2002; and
                    ``(iii) 65,000 in each succeeding fiscal year; 
                or''.
    (b) Conditions on Increases.--Section 214(g) of the Immigration and 
Nationality Act (8 U.S.C. 1184(g)) is amended by adding at the end 
following:
    ``(5)(A) The numerical limitations in clauses (i) and (ii) of 
paragraph (1)(A) shall not apply to an alien described in subparagraph 
(B).
    ``(B) An alien is described in this subparagraph if--
            ``(i) the alien, disregarding clauses (i) and (ii) of 
        paragraph (1)(A), otherwise is eligible to be issued a visa or 
        provided nonimmigrant status under section 101(a)(15)(H)(i)(b); 
        and
            ``(ii) the employer petitioning under subsection (c)(1) 
        with respect to the alien demonstrates in the petition that, 
        with respect to the taxable year preceding the taxable year in 
        which the petition is filed, there was a net increase (as 
        compared with the taxable year prior to such preceding taxable 
        year) in the median of the total wages (including cash bonuses 
        and similar compensation) paid to full-time equivalent United 
        States workers (as defined in section 212(n)(4)(E)) who are on 
        the employer's payroll on the last day of the taxable year.
    ``(C) In making the determination under subparagraph (B)(ii)--
            ``(i) any group treated as a single employer under 
        subsection (b), (c), (m), or (o) of section 414 of the Internal 
        Revenue Code of 1986 shall be treated as a single employer; and
            ``(ii) the Attorney General shall disregard workers who 
        ceased employment with an employer by reason of the employer's 
        having sold, or otherwise legally transferred for 
        consideration, the assets of a division or other severable 
        portion of the employer's business to another person before the 
        end of the employer's previous tax year.''.
    (c) Effective Dates.--
            (1) Eliminating numerical limitation for fiscal year 
        2000.--The amendment made by subsection (a), to the extent that 
        it eliminates the numerical limitation under section 
        214(g)(1)(A)(iii) of the Immigration and Nationality Act, as in 
        effect on the day before the date of the enactment of this Act, 
        shall take effect on the date of the enactment of this Act.
            (2) Conditioning increases for fiscal years 2001 and 
        2002.--In all other respects, the amendments made by this 
        section shall take effect on October 1, 2000, without regard to 
        whether or not proposed or final regulations to carry out such 
        amendments have been promulgated.

SEC. 102. INCREASED PORTABILITY OF H-1B STATUS.

    (a) In General.--Section 214(c) of the Immigration and Nationality 
Act (8 U.S.C. 1184(c)) is amended by adding at the end the following:
    ``(10)(A) A nonimmigrant alien described in subparagraph (B) who 
was issued a visa (or otherwise provided nonimmigrant status) under 
section 101(a)(15)(H)(i)(b) may change employers upon the filing by the 
prospective employer of a petition under paragraph (1) on behalf of the 
alien to obtain authorization for the change. Employment authorization 
shall continue for such alien until such petition is adjudicated. If 
the petition is denied, such employment authorization shall cease.
    ``(B) A nonimmigrant alien described in this subparagraph is a 
nonimmigrant alien--
            ``(i) who has been lawfully admitted into the United 
        States;
            ``(ii) on whose behalf an employer has filed a nonfrivolous 
        petition described in subparagraph (A) before the date of the 
        expiration of the period of stay authorized by the Attorney 
        General for the alien; and
            ``(iii) who, subsequent to such lawful admission, has not 
        been employed without authorization in the United States before 
        the filing of such petition.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act and shall apply to 
petitions filed before, on, or after such date.

 TITLE II--NEW REQUIREMENTS ON PETITIONING EMPLOYERS; PETITION FILING 
              FEE REDUCTION FOR LOCAL EDUCATIONAL AGENCIES

SEC. 201. MINIMUM SALARY REQUIREMENT.

    (a) In General.--Section 212(n)(1)(A) of the Immigration and 
Nationality Act (8 U.S.C. 1182(n)(1)(A)) is amended--
            (1) by striking ``and'' at the end of clause (i);
            (2) by redesignating clause (ii) as clause (iii); and
            (3) by inserting after clause (i) the following:
                    ``(ii) is offering and will offer during the period 
                of authorized employment to H-1B nonimmigrants wages 
                that are at least equal to an annual salary of $40,000 
                (including cash bonuses and similar compensation), 
                except if the employment in question is as a public or 
                private elementary or secondary school teacher or if 
                the employer is an institution of higher education (as 
                defined in section 101(a) of the Higher Education Act 
                of 1965) or a related or affiliated nonprofit entity, a 
                nonprofit research organization, or a governmental 
                research organization; and''.
    (b) Inflation Adjustment.--Section 212(n) of the Immigration and 
Nationality Act (8 U.S.C. 1182(n)) is amended by adding at the end the 
following:
    ``(6) For purposes of paragraph (1)(A)(ii), in the case of any 
fiscal year beginning in a calendar year after 2000, the dollar amount 
contained in such paragraph shall be increased by an amount equal to--
            ``(A) the dollar amount; multiplied by
            ``(B) the cost-of-living adjustment determined under 
        section 1(f)(3) of the Internal Revenue Code of 1986 for the 
        calendar year in which the fiscal year begins by substituting 
        `calendar year 1999' for `calendar year 1992' in subparagraph 
        (B) of such section.''.

SEC. 202. SUBMISSION OF DATA ON H-1B NONIMMIGRANTS AFTER EMPLOYMENT 
                    COMMENCEMENT.

    (a) In General.--Section 212(n)(1) of the Immigration and 
Nationality Act (8 U.S.C. 1182(n)(1)) is amended by inserting after 
subparagraph (G) the following:
            ``(H) The employer will electronically submit to the 
        Secretary, not later than 30 days after the date on which an H-
        1B nonimmigrant commences employment with the employer, data in 
        an electronic format containing information about the 
        nonimmigrant, including the following:
                    ``(i) The foreign state of which the nonimmigrant 
                is a citizen or national.
                    ``(ii) The academic degrees obtained by the 
                nonimmigrant.
                    ``(iii) The nonimmigrant's job title.
                    ``(iv) The date on which employment commenced.
                    ``(v) The nonimmigrant's salary or wage level.''.
    (b) Requirement on Secretary.--Not later than 30 days after the 
receipt of data from an employer that is provided in accordance with 
section 212(n)(1)(H) of the Immigration and Nationality Act (8 U.S.C. 
1182(n)(1)(H)), as inserted by subsection (a), the Secretary of Labor 
shall make such data available on the Internet.

SEC. 203. FEE TO ENABLE MORE EFFICIENT PAPERWORK PROCESSING.

    (a) Imposition of Fee.--Section 214(c) of the Immigration and 
Nationality Act (8 U.S.C. 1184(c)), as amended by section 102, is 
further amended by adding at the end the following:
    ``(11)(A) In addition to any other fees authorized by law, the 
Attorney General shall impose a processing fee on an employer filing a 
petition under paragraph (1)--
            ``(i) initially to grant an alien nonimmigrant status 
        described in section 101(a)(15)(H)(i)(b); or
            ``(ii) to obtain authorization for an alien having such 
        status to change employers.
    ``(B) The amount of the fee shall be $200 for each such petition.
    ``(C) Fees collected under this paragraph shall be deposited in the 
Treasury in accordance with section 286(t).''.
    (b) Establishment of Account; Use of Fees.--Section 286 of the 
Immigration and Nationality Act (8 U.S.C. 1356) is amended by adding at 
the end the following:
    ``(t) H-1B Processing Fee 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 Processing Fee Account'. Notwithstanding any other 
        provision of law, there shall be deposited as offsetting 
        receipts into the account all fees collected under section 
        214(c)(11).
            ``(2) Use of fees.--50 percent of the amounts deposited 
        into the H-1B Processing Fee Account shall remain available to 
        the Attorney General until expended to carry out duties under 
        section 214(c)(1) related to petitions made for nonimmigrants 
        described in section 101(a)(15)(H)(i)(b) and to decrease the 
        processing time for such petitions. 50 percent of the amounts 
        deposited into the account shall remain available to the 
        Secretary of Labor until expended for decreasing the processing 
        time for applications under section 212(n)(1) and for carrying 
        out section 212(n)(2).''.

SEC. 204. QUALIFICATIONS FOR PHYSICAL THERAPISTS.

    (a) In General.--Section 214(i)(2) of the Immigration and 
Nationality Act (8 U.S.C. 1184(i)(2)) is amended--
            (1) by striking ``(A)'' and inserting ``(i)'';
            (2) by striking ``(B)'' and inserting ``(ii)'';
            (3) in subparagraph (C), by striking ``(ii)'' and inserting 
        ``(II)''
            (4) by striking ``(C)(i)'' and inserting ``(iii)(I)'';
            (5) by striking ``(2)'' and inserting ``(2)(A)''; and
            (6) by adding at the end the following:
    ``(B) In the case of a position in a specialty occupation that 
requires an alien to perform services as a physical therapist, the 
requirements of this paragraph also include a requirement that the 
alien have completed a degree recognized by body or bodies approved for 
the purpose by the Secretary of Education as equivalent (or more than 
equivalent) to the education and training received by a person 
completing a master's degree from an accredited program of physical 
therapy in the United States.''.
    (b) Applicability.--The amendment made by subsection (a)(6) shall 
not apply to any alien who has full State licensure to practice in the 
occupation of physical therapist before the date of the enactment of 
this Act.

SEC. 205. REDUCTION OF PETITION FILING FEE FOR LOCAL EDUCATIONAL 
                    AGENCIES.

    Section 214(c)(9)(B) of the Immigration and Nationality Act (8 
U.S.C. 1184(c)(9)(B)) is amended by striking ``petition.'' and 
inserting ``petition, except that the amount of the fee shall be $100 
for an employer that is a local educational agency (as defined in 
section 14101 of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 8801)).''.

SEC. 206. EFFECTIVE DATE.

    (a) In General.--Subject to section 204(b) and subsection (b), the 
amendments made by this title shall take effect on the date of the 
enactment of this Act and shall apply to petitions filed under section 
214(c), and applications filed under section 212(n)(1), of the 
Immigration and Nationality Act on or after October 1, 2000.
    (b) Requirements for Specialty Occupation.--The amendments made by 
paragraphs (1) through (5) of section 204(a) shall take effect on the 
date of the enactment of this Act and shall apply to petitions filed 
under section 214(c), and applications filed under section 212(n)(1), 
of the Immigration and Nationality Act on or after the earlier of--
            (1) October 1, 2000; and
            (2) the date on which final regulations are promulgated to 
        carry out the amendments made by section 303.

       TITLE III--NONCOMPLIANCE PROVISIONS FOR H-1B NONIMMIGRANTS

SEC. 301. REQUIRING SPECIALTY OCCUPATION WORKERS AND FASHION MODELS TO 
                    OBTAIN STATUS AS AN H-1B NONIMMIGRANT.

    Section 214(g) of the Immigration and Nationality Act (8 U.S.C. 
1184(g)), as amended by section 101 of this Act, is further amended by 
adding at the end the following:
    ``(6) Notwithstanding any other provision of this Act, any alien 
admitted or provided status as a nonimmigrant in order to provide 
services in a specialty occupation described in subsection (i)(1) 
(other than services described in subparagraph (H)(ii)(a), (O), or (P) 
of section 101(a)(15)) or as a fashion model shall have been issued a 
visa (or otherwise been provided nonimmigrant status) under section 
101(a)(15)(H)(i)(b).''.

SEC. 302. REQUIRING FULL-TIME EMPLOYMENT.

    (a) In General.--Section 101(a)(15)(H)(i)(b) of the Immigration and 
Nationality Act (8 U.S.C. 1101(a)(15)(H)(i)(b)) is amended by striking 
``or (P))'' and inserting ``or (P)), not less than 35 hours per week 
(except if the employer is an institution of higher education (as 
defined in section 101(a) of the Higher Education Act of 1965) or a 
related or affiliated nonprofit entity),''.
    (b) Conforming Amendments.--Section 212(n)(2)(C)(vii) of the 
Immigration and Nationality Act (8 U.S.C. 1182(n)(2)(C)(vii))is 
amended--
            (1) in subclause (I), by striking ``a full-time'' and 
        inserting ``an'';
            (2) by striking subclause (II);
            (3) in subclause (III), by striking ``subclauses (I) and 
        (II)'' and inserting ``subclause (I)''; and
            (4) by redesignating subclauses (III) through (VI) as 
        subclauses (II) through (V), respectively.

SEC. 303. REQUIREMENTS FOR SPECIALTY OCCUPATION.

    Section 214(i) of the Immigration and Nationality Act (8 U.S.C. 
1184(i)), as amended by section 204 of this Act, is further amended--
            (1) by amending paragraph (1)(B) to read as follows:
            ``(B) attainment of a bachelor's degree (or higher degree) 
        in the specific specialty as a minimum for entry into the 
        occupation in the United States.'';
            (2) by amending paragraph (2)(A)(iii) to read as follows:
            ``(iii)(I) completion of a bachelor's degree (or higher 
        degree) that is not described in paragraph (1)(B), (II) 
        experience in the specialty equivalent to the completion of the 
        degree described in paragraph (1)(B) for the occupation, and 
        (III) recognition of expertise in the specialty through 
        progressively responsible positions relating to the 
        specialty.''; and
            (3) by adding at the end the following:
    ``(3) For purposes of this subsection, the term `bachelor's degree 
(or higher degree)' includes a foreign degree that is a recognized 
foreign equivalent of a bachelor's degree (or higher degree).''.

SEC. 304. NONCOMPLIANCE FEE.

    (a) Imposition of Fee.--Section 214(c) of the Immigration and 
Nationality Act (8 U.S.C. 1184(c)), as amended by sections 102 and 203, 
is further amended by adding at the end the following:
    ``(12)(A) In addition to any other fees authorized by law, the 
Attorney General shall impose a noncompliance fee on an employer filing 
a petition under paragraph (1)--
            ``(i) initially to grant an alien nonimmigrant status 
        described in section 101(a)(15)(H)(i)(b); or
            ``(ii) to obtain authorization for an alien having such 
        status to change employers.
    ``(B) The amount of the fee shall be $100 for each such petition.
    ``(C) Fees collected under this paragraph shall be deposited in the 
Treasury in accordance with section 286(u).''.
    (b) Establishment of Account; Use of Fees.--Section 286 of the 
Immigration and Nationality Act (8 U.S.C. 1356), as amended by section 
303 of this Act, is further is amended by adding at the end the 
following:
    ``(u) H-1B Noncompliance 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 Noncompliance Account'. Notwithstanding any other 
        provision of law, there shall be deposited as offsetting 
        receipts into the account all fees collected under section 
        214(c)(12).
            ``(2) Use of fees to combat fraud.--
                    ``(A) Attorney general.--
                            ``(i) Programs to eliminate fraud.--20 
                        percent of amounts deposited into the H-1B 
                        Noncompliance Account shall remain available to 
                        the Attorney General until expended for 
                        programs and activities to eliminate fraud by 
                        employers filing petitions under section 
                        214(c)(1) with respect to status under section 
                        101(a)(15)(H)(i)(b) and aliens who are the 
                        beneficiaries of such petitions.
                            ``(ii) Removal of aliens.--20 percent of 
                        amounts deposited into the H-1B Noncompliance 
                        Account shall remain available to the Attorney 
                        General until expended for the removal of H-1B 
                        nonimmigrants (as defined in section 
                        212(n)(4)(C)) who are deportable under section 
                        237(a)(1)(A) by reason of having been found to 
                        be within the class of aliens inadmissible 
                        under section 212(a)(6)(C).
                    ``(B) Secretary of state.--40 percent of amounts 
                deposited into the H-1B Noncompliance Account shall 
                remain available to the Secretary of State until 
                expended for programs and activities to eliminate fraud 
                by employers and aliens described in subparagraph (A).
                    ``(C) Joint programs.--20 percent of amounts 
                deposited into the H-1B Noncompliance Account shall 
                remain available to the Attorney General and the 
                Secretary of State until expended for programs and 
                activities conducted by them jointly to eliminate fraud 
                by employers and aliens described in subparagraph 
                (A).''.

SEC. 305. ADDITIONAL REQUIREMENTS ON PETITIONING EMPLOYERS.

    Section 214(c) of the Immigration and Nationality Act (8 U.S.C. 
1184(c)), as amended by sections 102, 203, and 304 of this Act, is 
further amended by adding at the end the following:
    ``(13) The Attorney General may not approve any petition under 
paragraph (1) filed by an employer with respect to an alien seeking to 
obtain or having the status of a nonimmigrant under section 
101(a)(15)(H)(i)(b) unless the employer satisfies the following 
requirements:
            ``(A) The employer--
                    ``(i) is an institution of higher education (as 
                defined in section 101(a) of the Higher Education Act 
                of 1965), or a governmental or nonprofit entity; or
                    ``(ii) maintains a place of business in the United 
                States that is licensed in accordance with any 
                applicable State or local business licensing 
                requirements and is used exclusively for business 
                purposes.
            ``(B) The employer--
                    ``(i) is a governmental entity;
                    ``(ii) has aggregate gross assets with a value of 
                not less than $250,000--
                            ``(I) in the case of an employer that is a 
                        publicly held corporation, as determined using 
                        its most recent report filed with the 
                        Securities and Exchange Commission; or
                            ``(II) in the case of any other employer, 
                        as determined as of the date on which the 
                        petition is filed pursuant to regulations 
                        promulgated by the Attorney General; or
                    ``(iii) provides documentation of business activity 
                pursuant to regulations promulgated by the Attorney 
                General.''.

SEC. 306. REQUIRING FILING OF W-2 FORMS.

    (a) In General.--Section 212(n)(1) of the Immigration and 
Nationality Act (8 U.S.C. 1182(n)(1)), as amended by section 202 of 
this Act, is further amended by inserting after subparagraph (H) the 
following:
            ``(I) The employer will, with respect to each employee who 
        is an H-1B nonimmigrant, annually submit to the Secretary of 
        Labor a copy of the most recent statement under section 6051 of 
        the Internal Revenue Code of 1986. Such submission may be made 
        by electronic means.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act and shall apply to 
applications filed under section 212(n)(1) of the Immigration and 
Nationality Act on or after October 1, 2000, but only with respect to 
statements made under section 6051 of the Internal Revenue Code of 1986 
on or after January 1, 2001.

SEC. 307. EFFECTIVE DATE.

    Except for the amendment made by section 306, the amendments made 
by this title shall take effect on the date of the enactment of this 
Act and shall apply to petitions filed under section 214(c), and 
applications filed under section 212(n)(1), of the Immigration and 
Nationality Act on or after the date on which final regulations are 
promulgated to carry out such amendments.

TITLE IV--EXTENSION OF PROVISIONS FROM THE AMERICAN COMPETITIVENESS AND 
                   WORKFORCE IMPROVEMENT ACT OF 1998

SEC. 401. PROTECTION OF UNITED STATES WORKERS IN CASE OF H-1B DEPENDENT 
                    EMPLOYERS.

    Section 212(n)(1)(E)(ii) of the Immigration and Nationality Act (8 
U.S.C. 1182(n)(1)(E)(ii)) is amended by striking ``2001,'' and 
inserting ``2002,''.

SEC. 402. ADDITIONAL INVESTIGATIVE AUTHORITY.

    Section 413(e)(2) of the American Competitiveness and Workforce 
Improvement Act of 1998 (as contained in title IV of division C of the 
Omnibus Consolidated and Emergency Supplemental Appropriations Act, 
1999; Public Law 105-277) is amended by striking ``2001.'' and 
inserting ``2002.''.

SEC. 403. REQUIREMENT TO ISSUE REGULATIONS.

    The Secretary of Labor shall promulgate final regulations fully 
implementing all provisions of the American Competitiveness and 
Workforce Improvement Act of 1998 (as contained in title IV of division 
C of the Omnibus Consolidated and Emergency Supplemental Appropriations 
Act, 1999; Public Law 105-277). Such regulations shall take effect on 
or before September 1, 2000.

                      TITLE V--STUDIES AND REPORTS

SEC. 501. STUDIES AND REPORTS BY COMPTROLLER GENERAL.

    (a) Recruitment of Underrepresented Groups.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study on the measures taken, by 
        employers who have filed an application under section 212(n)(1) 
        of the Immigration and Nationality Act (8 U.S.C. 1182(n)(1)), 
        to recruit, for the employment for which H-1B nonimmigrants are 
        sought by the application, qualified United States workers who 
        are a member of an underrepresented group. The study shall 
        include an examination of the extent to which these employers--
                    (A) recruit at--
                            (i) institutions of higher education with 
                        substantial numbers of students who are a 
                        member of an underrepresented group;
                            (ii) historically black colleges and 
                        universities;
                            (iii) community colleges; and
                            (iv) vocational and technical colleges; and
                    (B) advertise in publications reaching members of 
                an underrepresented group.
            (2) Recommendations.--If the Comptroller General of the 
        United States determines, based on the study under paragraph 
        (1), that modifications to the provisions of the Immigration 
        and Nationality Act relating to H-1B nonimmigrants are 
        appropriate in order to increase recruitment by employers 
        described in paragraph (1) of members of an underrepresented 
        group, the Comptroller General shall include such 
        recommendations in the report submitted under paragraph (3).
            (3) Report.--Not later than December 31, 2000, the 
        Comptroller General of the United States shall submit to the 
        Committees on the Judiciary of the United States House of 
        Representatives and of the Senate a report containing the 
        results of the study under paragraph (1).
            (4) Definitions.--For purposes of this subsection:
                    (A) The term ``member of an underrepresented 
                group'' includes United States workers who are African 
                American, Hispanic, female, or an individual with a 
                disability.
                    (B) The terms ``H-1B nonimmigrant'' and ``United 
                States worker'' have the meaning given such terms in 
                section 212(n)(4) of the Immigration and Nationality 
                Act (8 U.S.C. 1182(n)(4)).
    (b) Training Incumbent Workers.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study on the measures taken, by 
        employers who have filed an application under section 212(n)(1) 
        of the Immigration and Nationality Act (8 U.S.C. 1182(n)(1)), 
        continually to train and update the existing skills of 
        incumbent employees, and to promote such employees where 
        possible.
            (2) Report.--Not later than December 31, 2000, the 
        Comptroller General of the United States shall submit to the 
        Committees on the Judiciary of the United States House of 
        Representatives and of the Senate a report containing the 
        results of the study under paragraph (1).
    (c) Compliance With Provisions Designed To Ensure Accurate Count of 
H-1B Nonimmigrants.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study to determine the degree of 
        compliance by the Attorney General with the requirements of 
        section 416 of the American Competitiveness and Workforce 
        Improvement Act of 1998 (as contained in title IV of division C 
        of the Omnibus Consolidated and Emergency Supplemental 
        Appropriations Act, 1999; Public Law 105-277).
            (2) Report.--Not later than December 31, 2000, the 
        Comptroller General of the United States shall submit to the 
        Committees on the Judiciary of the United States House of 
        Representatives and of the Senate a report containing the 
        results of the study under paragraph (1).

                          Purpose and Summary

    H.R. 4227 would temporarily increase the quota for ``H-1B'' 
nonimmigrants and would add protections for American workers 
and add anti-fraud measures to the H-1B program.

                Background and Need for the Legislation

                I. The H-1B Nonimmigrant Worker Program

    ``H-1B'' visas are available for workers coming temporarily 
to the United States to perform services in a specialty 
occupation.\1\ Such an occupation is one 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 speciality (or its equivalent) as 
a minimum for entry into the occupation in the United States.'' 
\2\
---------------------------------------------------------------------------
    \1\ Section 101(a)(15)(H)(i)(b) of the Immigration and Nationality 
Act (hereinafter cited as ``INA'').
    \2\ INA sec. 214(i)(1).
---------------------------------------------------------------------------
    The total number of aliens who may be issued visas or 
otherwise provided nonimmigrant status as H-1B workers during 
fiscal year 2000 may not exceed 115,000.\3\ The period of 
authorized admission is up to 6 years.\4\ In fiscal year 1997, 
the old 65,000 cap was reached for the first time on September 
1.\5\ In fiscal year 1998, the 65,000 cap was reached on May 
11.\6\ In fiscal year 1999, a new 115,000 cap was reached on 
August 16.\7\ In March 2000, the Immigration and Naturalization 
Service reported that the cap is likely to be reached before 
the end of the fiscal year after the adjudication of 
unadjudicated H-1B petitions already on file.\8\ In fiscal year 
2001, the cap will be 107,500, and in fiscal year 2002 and 
future years, the cap will be 65,000.\9\
---------------------------------------------------------------------------
    \3\ INA sec. 214(g)(1)(A).
    \4\ INA sec. 214(g)(4).
    \5\ U.S. Immigration and Naturalization Service data. The number of 
aliens issued visas or otherwise provided nonimmigrant status as H-1B 
workers in 1992 was 48,645, in 1993 was 61,591, in 1994 was 60,279, in 
1995 was 54,178, and in 1996 was 55,141. Id.
    \6\ Id.
    \7\ Id.
    \8\ Id.
    \9\ INA sec. 214(g)(1)(A).
---------------------------------------------------------------------------
    Aliens seeking most temporary visas have to show that they 
have a residence in a foreign country which they have no 
intention of abandoning. This is not the case with H-1B visas. 
In fact, many employers use the H-1B visa as a ``try-out'' 
period for aliens for whom they are considering petitioning for 
permanent residence. If an employer does decide to seek 
permanent resident status for an alien, the alien can work for 
the employer as an H-1B alien during the multi-year period 
usually required to receive the labor certification needed as a 
prerequisite for permanent residence and for INS processing. 
The percentage of H-1B nonimmigrants who later adjust status to 
permanent residence reached a high of 47% for those starting 
work under the H-1B program in 1993, with the percentage 
falling in later years because of increased processing delays 
for adjustment of status.\10\
---------------------------------------------------------------------------
    \10\ Lowell, H-1B Temporary Workers: Estimating the Population 15, 
appendix table 1B (2000).
---------------------------------------------------------------------------
    As to the country of origin of H-1B nonimmigrants, the INS 
estimates based upon a review of a sample of petitions that 
47.5% of petitioned-for aliens come from India, 9.3% come from 
the People's Republic of China, 3.2% come from the United 
Kingdom, 3% come from Canada, and 2.7% come from the 
Philippines.\11\ As to the occupations performed by H-1B 
nonimmigrants, the INS found in its review that 61.6% are in 
computer-related fields (53.3%/systems analysis and 
programming, 4.9%/electrical and electronics engineering, 3.4%/
other computer related occupations), 3% are for college/
university faculty, and 2.8% are for accountants and 
auditors.\12\ In fiscal years 1992-95, computer-related 
positions had never surpassed 25.6%, and therapists reached a 
high of 53.5% in 1995.\13\
---------------------------------------------------------------------------
    \11\ U.S. Immigration and Naturalization Service, Characteristics 
of Specialty Occupation Workers (H-1B) 1 (2000). INS sampled 4,217 H-1B 
workers approved from May 11, 1998 to July 31, 1999.
    \12\ Id. at 2.
    \13\ U.S. Department of Labor data.
---------------------------------------------------------------------------
    The INS found in its review that 1.5% of H-1B nonimmigrants 
have a high school diploma or an associate's degree, 56.8% have 
a bachelor's degree, 30.7% have a master's degree, 2.5% have a 
professional degree, and 7.6% have a doctorate degree.\14\
---------------------------------------------------------------------------
    \14\ Characteristics of Specialty Occupation Workers at 3.
---------------------------------------------------------------------------
    As to the wages paid to H-1B nonimmigrants, the INS found 
in its review that the median is $45,000, with half of the 
workers expected to earn between $38,900 and $55,000.\15\ The 
median wage is $54,000 for electrical and electronics 
engineers, $47,000 for systems analysts and programmers, and 
$49,400 for nonimmigrants in other computer-related 
occupations.\16\
---------------------------------------------------------------------------
    \15\ Id.
    \16\ Id.
---------------------------------------------------------------------------
    The INS found in its review that 60.3% of H-1B petitions 
are for aliens who lived outside the United States at the time 
their petitions were submitted to the INS, while 22.9% adjusted 
status after holding student visas.\17\
---------------------------------------------------------------------------
    \17\ Id. at 4.
---------------------------------------------------------------------------
    Because of the need of employers to bring H-1B aliens on 
board in the shortest possible time, the H-1B program's 
mechanism for protecting American workers is not a lengthy pre-
arrival review of the availability of suitable American workers 
(such as the labor certification process necessary to obtain 
most employer-sponsored immigrant visas). Instead, an employer 
files a ``labor condition application'' with the Department of 
Labor making certain basic attestations (promises) and the 
Department then investigates complaints alleging 
noncompliance.\18\
---------------------------------------------------------------------------
    \18\ INA sec. 212(n).
---------------------------------------------------------------------------
    Prior to enactment of the American Competitiveness and 
Workforce Improvement Act of 1998, there were four 
attestations:
        1) LThe employer will pay H-1B aliens wages that are 
        the higher of the actual wage level paid by the 
        employer to all other individuals with similar 
        experience and qualifications for the specific 
        employment in question or the prevailing wage level for 
        the occupational classification in the area of 
        employment, and the employer will provide working 
        conditions for H-1B aliens that will not adversely 
        affect those of workers similarly employed.
        2) LThere is no strike or lockout in the course of a 
        labor dispute in the occupational classification at the 
        place of employment.
        3) LAt the time of the filing of the application, the 
        employer has provided notice of the filing to the 
        bargaining representative of the employer's employees 
        in the occupational classification and area for which 
        the H-1B aliens are sought, or if there is no such 
        bargaining representative, the employer has posted 
        notice in conspicuous locations at the place of 
        employment.
        4) LThe application will contain a specification of the 
        number of aliens sought, the occupational 
        classification in which the aliens will be employed, 
        and the wage rate and conditions under which they will 
        be employed.\19\
---------------------------------------------------------------------------
    \19\ INA sec. 212(n)(1).
---------------------------------------------------------------------------
    The Department of Labor has to accept an employer's 
application within 7 days of filing unless it is incomplete or 
obviously inaccurate.\20\ Departmental investigations as to 
whether an employer has failed to fulfill its attestations or 
has misrepresented material facts in its application were 
triggered by complaints filed by aggrieved persons or 
organizations (including bargaining representatives).\21\ 
Investigations were conducted where there was reasonable cause 
to believe that a violation has occurred.\22\
---------------------------------------------------------------------------
    \20\ Id.
    \21\ INA sec. 212 (n)(2)(A).
    \22\ Id.
---------------------------------------------------------------------------
    An employer was subject to penalties for failing to fulfill 
the attestations--for willfully failing to pay the required 
wage, for there being a strike or lockout, for substantially 
failing to provide notice or provide all required information 
in an application, and for making a misrepresentation of 
material fact in an application.\23\ Penalties included 
administrative remedies (including civil monetary penalties not 
to exceed $1,000 per violation) that the Department of Labor 
determined to be appropriate and a bar for at least 1 year on 
the INS' ability to approve petitions filed by the employer for 
alien workers (both immigrant and nonimmigrant).\24\ In 
addition, the Department of Labor had to order an employer to 
provide H-1B nonimmigrants with back pay where wages were not 
paid at the required level, regardless of whether other 
penalties were imposed.\25\
---------------------------------------------------------------------------
    \23\ INA sec. 212(n)(2)(C).
    \24\ Id.
    \25\ INA sec. 212(n)(2)(D).
---------------------------------------------------------------------------
    Between 1992 and 1997, the Secretary of Labor received 250 
complaints and launched 158 investigations. Of the 103 
investigations that have become final, a violation was found in 
90. Civil monetary penalties of $205,500 have been assessed. In 
71 investigations, $1,940,506 in back wages were found to be 
due to 430 H-1B nonimmigrants.\26\
---------------------------------------------------------------------------
    \26\ U.S. Department of Labor data.
---------------------------------------------------------------------------

          II. Labor Department Concerns About the H-1B Program

    In 1995, then Secretary of Labor Robert Reich stated that:

          Our experience with the practical operation of the H-
        1B program has raised serious concerns . . . that what 
        was conceived as a means to meet temporary business 
        needs for unique, highly skilled professionals from 
        abroad is, in fact, being used by some employers to 
        bring in relatively large numbers of foreign workers 
        who may well be displacing U.S. workers and eroding 
        employers' commitment to the domestic workforce. Some 
        employers . . . seek the admission of scores, even 
        hundreds of [H-1B aliens], especially for work in 
        relatively low-level computer-related and health care 
        occupations. These employers include ``job 
        contractors,'' some of which have a workforce composed 
        predominantly or even entirely of H-1B workers, which 
        then lease these employees to other U.S. companies or 
        use them to provide services previously provided by 
        laid off U.S. workers.\27\
---------------------------------------------------------------------------
    \27\ Nonimmigrant Visas: Hearing Before the Subcomm. on Immigration 
of the Senate Judiciary Comm., 104th Cong., 1st Sess. (1995).

    Responding to such concerns, the Department of Labor 
promulgated a set of final rules which went into effect on 
January 19, 1995.\28\ Instead of targeting job contractors or 
companies relying to an excessive degree on H-1B aliens, the 
regulations imposed what many (including this committee) 
considered to be burdensome new requirements on all employers 
of H-1B aliens.\29\ The National Association of Manufacturers 
sought to overturn the regulations on various procedural and 
substantive grounds. The U.S. District Court for the District 
of Columbia declared on procedural grounds many portions of the 
regulations invalid and void.\30\
---------------------------------------------------------------------------
    \28\ 59 Fed. Reg. 65646 (Dec. 20, 1994).
    \29\ See H.R. Rep. No. 104-469, 104th Cong., 2nd Sess., pt. 1, at 
147-49 (1996).
    \30\ National Association of Manufacturers v. U.S. Department of 
Labor, Civ. Action No. 95-0715 (D. D.C. July 22, 1996).
---------------------------------------------------------------------------
    The Department of Labor's Office of Inspector General 
conducted an audit of the H-1B program. Its report, issued in 
1996, was generally critical of the program. The report found 
that correct wages were not always being paid:

          The employer's attestation to . . . pay the 
        prevailing wage is the only safeguard against the 
        erosion of U.S. worker's [sic.] wages.
          . . . .
          For 75 percent . . . of all cases where the 
        nonimmigrant worked for the petitioning employer . . . 
        the employer did not adequately document that the wage 
        level specified on the [application] was the correct 
        wage. . . . Therefore, although the employers are 
        attesting that they have adequately documented the wage 
        to be paid the alien, most do not. For these cases we 
        are unable to determine the full extent to which H-1B 
        nonimmigrants are being paid less than the prevailing 
        wage.
          Nevertheless, many employers paid the aliens less 
        than the . . . wage they certified they would pay, 
        whether the wage rate was adequately documented or not. 
        Of the . . . cases where the employers adequately 
        documented the wage paid, 19 percent of the aliens were 
        paid less than the wage specified on the 
        [application].\31\
---------------------------------------------------------------------------
    \31\ Office of Inspector General, U.S. Department of Labor, Final 
Report: The Department of Labor's Foreign Labor Certification Programs: 
The System is Broken and Needs to Be Fixed 21 (May 22, 1996).

    The report also criticized job contractors, or ``job 
---------------------------------------------------------------------------
shops'':

          We found that 6 percent of the . . . H-1B aliens . . 
        . were contracted out by the petitioning employer to 
        other employers. Some of the petitioning employers 
        operate job shops--companies which hire predominantly, 
        or exclusively, H-1B aliens then contract out these 
        aliens to other employers. The current H-1B law does 
        not prohibit this practice; however, there is a concern 
        that these job shops are paying the H-1B aliens less 
        than prevailing wage, making contracting out with job 
        shops more appealing to the U.S. employer.
          . . . .
          Our sample of . . . cases also included six petitions 
        for another job shop contractor. . . . For five of the 
        six cases, the employer established the same prevailing 
        wage--$27,000--for all jobs even though the jobs were 
        located in four different States. It is highly unlikely 
        that the prevailing wage was the same for this job in 
        all four locations.\32\
---------------------------------------------------------------------------
    \32\ Id. at 25-27.

    In 1998, Acting Assistant Secretary of Labor Raymond Uhalde 
---------------------------------------------------------------------------
stated that:

          In practice . . . employers do not have to 
        demonstrate any type of employment need or domestic 
        recruitment prior to getting a temporary foreign 
        worker. In addition, the Labor Department has limited 
        authority to enforce the minimum standards that 
        employers must adhere to. . . .
          . . . .
          [R]eform of the H-1B program is needed because it 
        does not provide the needed balance between timely 
        access to the international labor market and adequate 
        protection of U.S. workers' job opportunities, wages 
        and working conditions.
          Greater protections for U.S. workers are needed 
        because many employers use the H-1B program to employ 
        not the ``best and brightest,'' but rather entry-level 
        foreign workers. Minimum education and work experience 
        qualifications for H-1B jobs are quite low--a 4-year 
        college degree and no work experience, or the 
        equivalent in terms of combined education and work 
        experience. While some H-1B jobs are high-paying jobs, 
        the education and work qualifications result in nearly 
        80% of H-1B jobs paying less than $50,000 a year.
          The H-1B program is broken in several respects. 
        First, current law does not require any test for the 
        availability of qualified U.S. workers in the domestic 
        labor market. Therefore, many of the visas under the 
        current cap of 65,000 can be used lawfully by employers 
        to hire foreign workers for purposes other than meeting 
        a skills shortage. Second, current law allows a U.S. 
        employer to lay off U.S. workers and replace them with 
        H-1B workers. . . . Third, current law allows employers 
        to retain H-1B workers for up to 6 years to fill a 
        presumably ``temporary'' need.\33\
---------------------------------------------------------------------------
    \33\ Hearing Before the Subcomm. on Immigration of the Senate 
Judiciary Comm., 105th Cong., 2nd Sess. (1998) (hereinafter cited as 
``Senate Hearing'').
---------------------------------------------------------------------------

            III. Media Reports of Abuses in the H-1B Program

    In 1993, correspondent Lesley Stahl of ``60 Minutes'' 
criticized the use of the H-1B program by job contractors:

          When any American company needs programmers, the body 
        shops can often deliver employees all the way from 
        Bombay for rates that are so cheap, Americans just 
        across town can't compete. This is an employment 
        agreement between one foreign programmer and an India-
        based body shop called Blue Star. It tells her she'll 
        be assigned to Hewlett-Packard in California, that her 
        salary of $250 a month will be paid back in India, and 
        that she'll receive $1,300 a month for living expenses 
        in the United States. Total that up and it comes to 
        less than $20,000 a year--nowhere near what Hewlett-
        Packard would have to pay an American. But Hewlett-
        Packard never actually hired her; they merely made a 
        deal with the body shop and paid the body shop a flat 
        hourly rate.
          . . . .
          The companies have a built-in system of deniability. 
        They take a ``see no evil, hear no evil'' approach. 
        It's the body shops that have all the responsibility 
        because the foreign workers remain their employees. 
        It's the body shops that pick the programmers, then get 
        them their visas and assign them to the American 
        companies where they'll work. It's a way of insulating 
        the American firms. As an executive told us, ``We don't 
        want to know what the body shops are doing.'' \34\
---------------------------------------------------------------------------
    \34\ 60 Minutes (CBS television broadcast, Oct. 3, 1993).

    Numerous articles in major newspapers have documented 
employers laying off American workers and replacing them with 
H-1B aliens--usually from job contractors or by 
outsourcing.\35\
---------------------------------------------------------------------------
    \35\ See, e.g., Cohn and Roche, Jr., Indentured Servants for High-
Tech Trade, Balt. Sun, Feb. 21, 2000; Hoffman, Troy Firm in Middle of 
Jobs Fight, Detroit News, Feb. 28, 1996; Landers, Engineers, 
Programmers Battle ``Body Shopping'', Dallas Morning News, Oct. 30, 
1995; Branigin, White-Collar Visas: Importing Needed Skills or Cheap 
Labor?, Wash. Post, Oct. 21, 1995.
---------------------------------------------------------------------------

  IV. The State of the Labor Market for Information Technology Workers

    There is a widespread belief that the United States is 
facing a severe shortage of workers who are qualified to 
perform skilled information technology jobs. This belief has 
been fostered, in part, by a number of studies designed to 
document a shortage of information technology workers, 
including Help Wanted: The IT Workforce Gap at the Dawn of a 
New Century, America's New Deficit: The Shortage of Information 
Technology Workers, and Help Wanted 1998: A Call for 
Collaborative Action for the New Millennium.
    In 1997's Help Wanted, the Information Technology 
Association of America reported the results of a survey it had 
sent to a randomly selected sample of 2,000 large and mid-size 
information technology and non-information technology 
companies, asking ``How many vacancies does your company have 
for employees skilled in information technology?'' \36\ Two 
hundred and seventy one companies responded.\37\ Based on the 
survey results, ITAA estimated that there are approximately 
191,000 vacancies for information technology workers at large 
and mid-size American companies.\38\ The survey found that 82% 
of information technology companies expected to increase (and 
only 2% expected to decrease) the number of information 
technology workers they employed in the coming year; as did 56% 
(and 3%) of non-information technology companies.\39\ Fifty 
percent of responding information technology companies said 
that a lack of skilled/trained workers would represent the 
companies' most significant barrier to growth over the next 12 
month.\40\
---------------------------------------------------------------------------
    \36\ Help Wanted at 9, 15.
    \37\ Id. at 55.
    \38\ Id. at 16, 49.
    \39\ Id.
    \40\ Id. at 21.
---------------------------------------------------------------------------
    Help Wanted also found that ``[t]he rising compensation of 
[information technology] workers indicate the high demand for 
these individuals, as employers are bidding up their wages.'' 
\41\ The study reported increases in annual compensation 
between 1995 and 1996 for various information technology 
professions of from 12 to 19.7%.\42\ The study also noted that 
the number of bachelor degrees awarded in computer science at 
American universities fell by 43% from 1986 to 1994, from 
42,195 to 24,200.\43\
---------------------------------------------------------------------------
    \41\ Id. at 17.
    \42\ Id. at 18-19.
    \43\ Id. at 39.
---------------------------------------------------------------------------
    In conclusion, Help Wanted found that ``[c]lear evidence 
exists that the demand for skilled [information technology] 
workers is far outstripping the current supply of such 
workers.'' \44\ The report worried that, among other things, 
``in the absence of sufficient [information technology] workers 
we can expect to see slower growth in the [information 
technology] industry and in non-[information technology] 
companies that need such workers than we would have seen 
otherwise'' and that ``[a]s companies scale back their plans 
for growth and make related adjustments, we can anticipate 
slower job growth and less wealth creation than we would have 
seen.'' \45\
---------------------------------------------------------------------------
    \44\ Id. at 21.
    \45\ Id. at 5-6.
---------------------------------------------------------------------------
    Also in 1997, the U.S. Department of Commerce's Office of 
Technology Policy issued America's New Deficit. The study first 
noted that the U.S. Department of Labor's Bureau of Labor 
Statistics estimated that between 1994 and 2005, over one 
million new computer scientists and engineers, systems 
analysts, and computer programmers will be needed to fill 
820,000 newly created jobs and replace 227,000 workers leaving 
the fields.\46\ The number of systems analysts will grow from 
483,000 to 928,000, the number of computer engineers and 
scientists will grow from 345,000 to 655,000, and the number of 
computer programmers will grow from 537,000 to 601,000.\47\
---------------------------------------------------------------------------
    \46\ America's New Deficit at 5.
    \47\ Id. The Office of Technology Policy updated the study in 
January 1998 to account for new data from the Bureau of Labor 
Statistics. BLS reported that between 1996 and 2006, the United States 
will need more than 1.3 million new workers in the three occupations to 
fill 1,134,000 newly created jobs and replace 244,000 departing 
workers. Systems analysts are expected to increase from 506,000 to 
1,025,000, computer engineers and scientists are expected to increase 
from 427,000 to 912,000, and computer programmers are expected to 
increase from 567,000 to 697,000.
    The new BLS data also indicates that the computer and data 
processing services industry will have the fastest job growth of any 
industry between 1996 and 2006--108%. U.S. Department of Labor, Bureau 
of Labor Statistics, News (Dec. 3, 1997). In addition, the three 
occupations with the fastest employment growth over these years will be 
(1) database administrators, computer support specialists, and all 
other computer scientists--118%, (2) computer engineers--109%, and (3) 
systems analysts--103%. Id.
---------------------------------------------------------------------------
    The study found that ``there is substantial evidence that 
the United States is having trouble keeping up with the demand 
for new information technology workers.'' \48\ It stated that 
``[t]he strongest evidence that a shortage exists is upward 
pressure on salaries. The competition for skilled [information 
technology] workers has contributed to substantial salary 
increases in many [information technology] professions.'' \49\ 
For example, it cited the salary data cited in Help Wanted and 
noted Computerworld's annual survey findings that in 11 of 26 
positions tracked, average salaries increased more than 10% 
from 1996 to 1997.\50\ The study also noted the findings of 
Help Wanted of 191,000 unfilled information technology jobs and 
a decrease in computer science graduates, and noted that some 
companies are using overseas talent pools to find information 
technology workers.\51\ It did add a caveat, stating that ``the 
information and data [are] inadequate to completely 
characterize the dynamics of the [information technology] labor 
market.'' \52\
---------------------------------------------------------------------------
    \48\ America's New Deficit at 1.
    \49\ Id. at 11.
    \50\ Id.
    \51\ Id. at 1, 11, 15.
    \52\ Id. at 35.
---------------------------------------------------------------------------
    America's New Deficit noted with concern that ``[s]ince 
information technology is an enabling technology that affects 
the entire economy, our failure to meet the growing demand for 
[information technology] professionals could have severe 
consequences for America's competitiveness, economic growth, 
and job creation.'' \53\ More specifically:
---------------------------------------------------------------------------
    \53\ Id. at 2.

          [C]omputer-based information systems have become an 
        indispensable part of managing information, workflow, 
        and transactions in both the public and private sector. 
        Therefore, a shortage of [information technology] 
        workers affects directly the ability to develop and 
        implement systems that a wide variety of users need to 
        enhance their performance and control costs. . . .
          . . . .
          High-tech industries, particularly leading-edge 
        electronics and information technology industries, are 
        driving economic growth. . . . These industries are 
        [information technology] worker intensive and shortages 
        of critical skills would inhibit their performance and 
        growth potential.
          . . . .
          Shortages of [information technology] workers could 
        inhibit the nation's ability to develop leading-edge 
        products and services, and raise their costs which, in 
        turn, would reduce U.S. competitiveness and constrain 
        economic growth.
          The shortage of [information technology] workers 
        could undermine U.S. performance in global markets. . . 
        . The United States is both the predominant supplier of 
        and the primary consumer for [computer software and 
        computer services].\54\
---------------------------------------------------------------------------
    \54\ Id. at 19-21.

    Help Wanted 1998 was issued by ITAA and the Virginia 
Polytechnic Institute and State University, with the latter 
having developed and conducted the survey, analyzed the results 
and authored the report.\55\ The report was designed, in part, 
to verify the results of Help Wanted, improve the methodology 
used, and obtain more detailed information.\56\
---------------------------------------------------------------------------
    \55\ Help Wanted 1998 at 6.
    \56\ Id.
---------------------------------------------------------------------------
    The study surveyed a random sample of 1,493 American 
information technology and non-information technology companies 
(of which 532 responded), and included smaller companies than 
did the original Help Wanted.\57\ The study extrapolated the 
response to a question similar to the one asked in Help Wanted 
to find that there are 346,000 vacancies in three core 
information technology professions (systems analysts, computer 
scientists and engineers, and computer programmers)--129,000 in 
information technology companies and 217,000 in non-information 
technology companies.\58\ This represents 10% of total 
employment in these professions.\59\ Of responding companies, 
85% said it was ``very difficult'' or ``somewhat difficult'' to 
hire programmers (78% for systems analysts and 84% for computer 
scientists and engineers).\60\
---------------------------------------------------------------------------
    \57\ Id. at 7.
    \58\ Id. at 9 (If information technology workers were considered 
more broadly, the survey estimated 606,000 vacancies. Id. at 11.). The 
study did state that ``even if 346,000 qualified applicants . . . 
appeared today, in all probability immediate positions would not be 
available--to translate this number to an absolute would be 
misleading.'' Id. at 12.
    \59\ Id. at 9.
    \60\ Id. at 17.
---------------------------------------------------------------------------
    In March 1998, the U.S. General Accounting Office issued a 
report criticizing the methodology of Help Wanted and America's 
New Deficit.\61\ GAO found that ``Commerce's report has serious 
analytical and methodological weaknesses that undermine the 
credibility of its conclusions that a shortage of [information 
technology] workers exits.'' \62\ Specifically, GAO found that:
---------------------------------------------------------------------------
    \61\ U.S. General Accounting Office, Health, Education, and Human 
Services Division, Information Technology: Assessment of the Department 
of Commerce's Report on Workforce Demand and Supply, GAO/HEHS-98-106R 
(1998) (hereinafter cites as ``GAO Report'').
    \62\ Id. at 2.

          The Commerce report cited four pieces of evidence 
        that an inadequate supply of [information technology] 
        workers is emerging--rising salaries for [information 
        technology] workers, reports of unfilled vacancies for 
        [information technology] workers, offshore sourcing and 
        recruiting, and the fact that the estimated supply of 
        [information technology] workers (based on students 
        graduating with bachelor's degrees in computer and 
        information sciences) is less than its estimate of the 
        demand. However, the report fails to provide clear, 
        complete, and compelling evidence for a shortage or a 
        potential shortage of [information technology] workers 
        with the four sources of evidence presented.\63\
---------------------------------------------------------------------------
    \63\ Id. at 6-7.

    As to rising salaries, GAO found that ``although some data 
show rising salaries for [information technology] workers, 
other data indicate that those increases in earnings have been 
commensurate with the rising earnings of all professional 
specialty occupations.'' \64\ Further:
---------------------------------------------------------------------------
    \64\ Id. at 7.

          [The wage increases cited in America's New Deficit] 
        may not be conclusive evidence of a long-term limited 
        supply of [information technology] workers, but may be 
        an indication of a current tightening of labor market 
        conditions for [information technology] workers. 
        According to BLS data, increases have been less 
        substantial when viewed over a longer period of time. 
        For example, the percentage changes in weekly earnings 
        for workers in computer occupations over the 1983 
        through 1997 period were comparable to or slightly 
        lower, in the case of computer systems analysts and 
        scientists, than the percentage changes for all 
        professional specialty occupations. . . . What is 
        uncertain is whether the recent trend toward higher 
        rates of increase will continue.\65\
---------------------------------------------------------------------------
    \65\ Id. Robert Lerman, Director of the Human Resources Policy 
Center of the Urban Institute, has stated that:

      [The data cited by Help Wanted] are inconsistent with other 
      private surveys as well [as] with public data sources. A 
      survey conducted by Deloitte & Touche Consulting Group 
      revealed that salaries for computer network professionals 
      rose an average of 7.4% between 1996 and 1997. Coopers and 
      Lybrand found average salary increases at 500 software 
---------------------------------------------------------------------------
      companies were 7.7% in 1995 and almost 8% in 1996.

Senate Hearing.

    As to ITAA vacancy statistics, the ``survey response rate 
of 14 percent is inadequate to form a basis for a nationwide 
estimate of unfilled [information technology] jobs.'' \66\ GAO 
noted that:
---------------------------------------------------------------------------
    \66\ GAO Report at 7.

        In order to make sound generalizations, the effective 
        response rate should usually be at least 75 percent. . 
        . . Furthermore, ITAA's estimate of the number of 
        unfilled [information technology] jobs is based on 
        reported vacancies, and adequate information about 
        those vacancies is not provided, such as how long 
        positions have been vacant, whether wages offered are 
        sufficient to attract qualified applicants, and whether 
        companies consider jobs filled by contractors as 
        vacancies. These weaknesses tend to undermine the 
        reliability of ITAA's survey findings. \67\
---------------------------------------------------------------------------
    \67\ Id. at 8. Robert Lerman also criticized ITAA's use of vacancy 
figures. He noted that:

      In any industry with a rising demand and/or high turnover, 
      the presence of vacancies does not necessarily demonstrate 
      a shortage of workers. A vacancy simply means the firm has 
      an open position it has not yet filled. Vacancies as a 
      proportion of employment will depend on the employer's 
      turnover rate, how long it takes to fill a vacancy, and the 
---------------------------------------------------------------------------
      extent to which the company is growing.

Senate Hearing.

    As to offshore sourcing, ``although the report cites 
instances of companies drawing upon talent pools outside the 
United States to meet their demands for workers, not enough 
information is provided about the magnitude of this 
phenomenon.'' \68\
---------------------------------------------------------------------------
    \68\ GAO Report at 7.
---------------------------------------------------------------------------
    Finally, the report ``used only the number of students 
earning bachelor's degrees in computer and information sciences 
when it compared the potential supply of workers with the 
magnitude of [information technology] worker demand.'' \69\ 
Further:
---------------------------------------------------------------------------
    \69\ Id.

          Commerce identifies the supply of potential 
        [information technology] workers as the number of 
        students graduating with bachelor's degrees in computer 
        and information sciences. Commerce's analysis of the 
        supply of [information technology] workers . . . did 
        not consider (1) the numerical data for degrees and 
        certifications in computer and information sciences 
        other than at the bachelor's level when they quantify 
        the total available supply; (2) college graduates with 
        degrees in other areas; and (3) workers who have been, 
        or will be, retrained for these occupations. . . .
          [T]here is no universally accepted way to prepare for 
        a career as a computer professional. . . . According to 
        the National Science Foundation, only about 25 percent 
        of those employed in computer or information science 
        jobs in 1993 actually had degrees in computer and 
        information science. Other workers in these fields had 
        degrees in such areas as business, social sciences, 
        mathematics, engineering, psychology, economics, and 
        education. The Commerce report did not take this 
        information into account in any way in estimating the 
        future supply of [information technology] workers.'' 
        \70\
---------------------------------------------------------------------------
    \70\ Id. at 5-6 (footnote omitted).

    GAO concluded by stating that ``the lack of support 
presented in this one report should not necessarily lead to a 
conclusion that there is no shortage. Instead, as the Commerce 
report states, additional information and data are needed to 
more accurately characterize the [information technology] labor 
market now and in the future.'' \71\
---------------------------------------------------------------------------
    \71\ Id. at 2.
---------------------------------------------------------------------------
    Late in 1999, a study sponsored by the United Engineering 
Foundation and the Alfred P. Sloan Foundation assessed the 
demand for information technology workers. The study concluded 
that ``spot shortages may exist, and strong demand can be seen 
for some kinds of people, but on the whole there is no 
compelling evidence to suggest a national shortage of 
[information technology] workers, either now or in the near 
future.'' \72\
---------------------------------------------------------------------------
    \72\ IT Workforce Data Project, Assessing the Demand for 
Information Technology Workers 1 (1999).
---------------------------------------------------------------------------
    The report looked at indicators such as the facts that 
unemployment among experienced information technology 
professionals has been rising since 1997 and that there was a 
lack of any consistent evidence of unusually strong wage growth 
for such workers that would be consistent with a shortage.\73\ 
The study concluded that:
---------------------------------------------------------------------------
    \73\ The study cited Computerworld's 1999 salary survey which 
indicated that salaries for information technology workers had 
increased by only about 4-5% in each of the last 2 years. Id. at 3.

          [While i]t may seem contradictory . . . we suggest 
        that (1) there is no general national shortage of 
        workers, (2) many employers still can't find the people 
        they seek, and (3) some persons with IT training and 
        experience have difficulty finding work. How can this 
        be?
          One answer may be that there are signs of a strong 
        preference for recent graduates in the IT job market. 
        Young workers have been trained in current technology, 
        are probably more likely than others to be willing to 
        work the long hours and give the total commitment that 
        some IT employers want, and they cost less.\74\
---------------------------------------------------------------------------
    \74\ Id. at 4.

    The report noted that over one third of those trained in 
information technology professions are not employed in those 
fields.\75\
---------------------------------------------------------------------------
    \75\ Id.
---------------------------------------------------------------------------
    Another study released in 1999, this time funded by the 
National Science Foundation, concluded that:

          There is no way to directly answer the question of 
        whether there is a shortage of IT workers because there 
        are no adequate definitions or adequate data to 
        directly count either supply or demand.
          Other sources of information are inferential and less 
        reliable than the direct counting approach. Indeed, 
        there are credible reasons for doubting virtually any 
        piece of evidence that is currently available.
          The inferential evidence does not easily allow one to 
        distinguish between a shortage and a tightness in the 
        IT labor market. . . .
          The statistical indicators based on Federal data, the 
        regional and occupation-specific data studies, the 
        methodologically challenged advocacy studies, and the 
        qualitative evidence almost all suggest either a 
        tightness or a shortage.
          It is likely that there are spot shortages, both in 
        specific geographic regions and in specific 
        occupations. In a field experiencing rapid growth and 
        rapid technological change, it would be surprising if 
        there were not such shortages.\76\
---------------------------------------------------------------------------
    \76\ Freeman & Aspray, The Supply of Information Technology Workers 
in the United States 68 (1999).

    Dr. Norman Matloff, professor of computer science at the 
University of California at Davis, argues that if a shortage of 
information technology workers exists, it is of industry's own 
making and that companies often favor foreign workers for 
illegitimate reasons.
    Dr. Matloff first makes the point that information 
technology industry hiring practices are not consistent with a 
worker shortage. Employers are able to reject the vast majority 
of applicants for information technology positions. For 
instance, Microsoft only hires 2% of programmer applicants.\77\
---------------------------------------------------------------------------
    \77\ Immigration and America's Workforce for the 21st Century: 
Hearing Before the Subcomm. On Immigration and Claims of the House 
Judiciary Comm., 105th Cong., 2nd Sess. (1998) (statement of Norman 
Matloff) (hereinafter cited as ``1998 House Hearing'').
---------------------------------------------------------------------------
    Dr. Matloff then argues that if the information technology 
industry is having any trouble locating sufficient information 
technology workers, it is because it overspecifies hiring 
criteria and passes over most viable candidates:

          Employers are over-defining [programming] jobs, 
        insisting that applicants have skills in X and Y and Z 
        and W and so on. But what really counts in programming 
        jobs is general programming talent, not experience with 
        specific software skills. Even Bill Gates has described 
        Microsoft hiring criteria thusly: ``We're not looking 
        for any specific knowledge because things change so 
        fast, and it's easy to learn stuff. You've got to have 
        an excitement about software, a certain intelligence . 
        . . It's not the specific knowledge that counts.'' 
        Studies show that programmers can become productive in 
        a new software technology in a month or so (this is 
        confirmed by my own personal experience, in 25 years of 
        keeping up with technological change in the industry). 
        Thus employers are (some deliberately, some 
        unwittingly) creating an artificial labor ``shortage.'' 
        \78\
---------------------------------------------------------------------------
    \78\ A Critical Look at Immigration's Role in the U.S. Computer 
Industry (Internet document dated May 19, 1997).

    The group most affected by this phenomenon seems to be 
older workers. Dr. Matloff finds that mid-career programmers 
have great difficulty finding work because they ``often lack 
the most up-to-date software skills'' and employers ``like to 
hire new or recent college graduates, because they work for 
lower salaries, and they generally are single and thus can work 
large amounts of overtime without being constrained by family 
responsibilities.'' \79\ Matloff states further that:
---------------------------------------------------------------------------
    \79\ 1998 House Hearing.

          Many employers like . . . recent graduates not for 
        their skills, but rather because they are cheaper, with 
        foreign nationals being even cheaper still. . . . If 
        one hires a young graduate because he/she has specific 
        skills, he/she will be cast aside in a few years when 
        those same skills become obsolete. The comments by 
        employers regarding new graduates are tantamount to an 
        admission of rampant age discrimination. . . .\80\
---------------------------------------------------------------------------
    \80\ A Critical Look

    There is much anecdotal evidence to support the contention 
that age discrimination against older information technology 
workers is prevalent. Many American workers focused on age 
discrimination when they responded to the San Francisco 
Examiner's solicitation of views regarding the information 
---------------------------------------------------------------------------
technology worker shortage. Two examples follow:

          At job fairs many older people, myself included, are 
        rudely treated by young recruiters. . . . In one 
        blatant case, I saw a recruiter from a major local 
        computer manufacturer and software firm refuse to talk 
        to anyone who looked over 35. Resumes from older people 
        were tossed in one pile. Resumes from younger people 
        were put in another. . . . I watched for a while and 
        wished I'd had a hidden video camera.\81\
---------------------------------------------------------------------------
    \81\ San Francisco Examiner Internet page (April 19, 1998).
---------------------------------------------------------------------------
          I think the general problem is one of there not being 
        enough young, and/or inexpensive workers. I have been 
        having an increasingly difficult time of finding any 
        employment since my late forties. I have many friends 
        who are in their fifties who are well-educated, 
        obviously experienced, and are quite computer literate, 
        who are having similar difficulties. . . . I believe 
        that age discrimination is rampant in this country, 
        especially in the computer industry. It's the dirty 
        little secret that industry won't own up to.\82\
---------------------------------------------------------------------------
    \82\ Id.

    In addition, Dr. Matloff points to two telling statistics. 
First, there is a 17% unemployment rate for computer 
programmers over the age of 50.\83\ Second, only 19% of 
computer science graduates are still working in software 
development 20 years after getting their degrees--compared to 
52% for civil engineers 20 years after graduating.\84\
---------------------------------------------------------------------------
    \83\ 1998 House Hearing. Professor Laura Langbein of the American 
University has found that for each additional year of age, the length 
of unemployment for an engineer increases by 3 weeks. Langbein, An 
Analysis of Unemployment Trends Among IEEE U.S. Members 8 (1999).
    \84\ 1998 House Hearing. Robert Lerman found that ``[n]early 
200,000 of the 540,000 people working as computer programmers in 1989 
had left the [information technology] area by 1993.'' Senate Hearing.
---------------------------------------------------------------------------
    As to declines in college enrollment in computer science, 
Dr. Matloff notes that if Help Wanted had looked past 1994, it 
would have noted a dramatic increase in computer science 
enrollment--the 27th annual survey of the Computing Research 
Association's Taulbee Survey of Ph.D.-granting departments of 
computer science and computer engineering in the United States 
and Canada reported a 40% increase in 1996-97 in undergraduate 
enrollment and a 39% increase in 1997-98.\85\ This has caused 
its own problems. It was recently reported that ``[l]ured by 
high-tech riches, students are flooding into college computer-
science courses, and Texas universities can't seem to keep up 
with the onslaught.'' \86\
---------------------------------------------------------------------------
    \85\ 1998 House Hearing. In 1998-99 and 1999-2000, undergraduate 
enrollment stayed relatively flat. Computing Research Association data.
    \86\ Freeman, Colleges Scramble to Adjust to Computer Science's 
Rise, Wall St. Journal, July 1, 1998.
---------------------------------------------------------------------------
    It has also been argued that American workers from groups 
underrepresented among information technology workers, such as 
African-Americans, Hispanics, and women, are being hurt by the 
H-1B program. An article in Hispanic Engineer magazine recently 
stated that:

          Hispanics and African Americans . . . some advocates 
        argue . . . are being unfairly locked out of many 
        lucrative and fast-growing high-technology professions 
        by companies that would rather hire foreign workers, 
        who can be brought here at lower cost.
          . . . .
          Whether or not high-tech firms are actively avoiding 
        hiring Hispanics and Blacks may be an open question. 
        But this much is clear: many firms are ignoring 
        requirements to file reports with the Federal 
        Government detailing the racial makeup of their work 
        forces.
          Of some 1,500 high-tech firms required to file such 
        forms, a review by [the Coalition for Fair Employment 
        in Silicon Valley] found only 253 in compliance. Worse, 
        many of those that complied filed reports revealing the 
        stark bottom line of the Digital Divide: few Hispanics 
        or Blacks were working in high-technology firms, the 
        hottest sector of the American economy.
          ``It's amazing,'' [John Templeton, co-convenor of the 
        Coalition for Fair Employment in Silicon Valley] says. 
        ``Companies will advertise for workers in newspapers in 
        India. But they won't advertise in Oakland.'' \87\
---------------------------------------------------------------------------
    \87\ Fletcher, Obstacles to Bridging the Digital Gap, Hispanic 
Engineer, April-May 2000, at 21, 24.

    Why can foreign workers be cheaper when employers are 
required to pay at least the prevailing wage to H-1B aliens? As 
the Department of Labor's Inspector General found, many 
employers do not pay the prevailing wage. Even when the 
prevailing wage is paid, it can often be less than what 
comparable American workers are making. Since H-1B aliens 
typically do not work in unionized fields, there is rarely a 
union contract available to help set the prevailing wage. In 
such circumstances, a ``prevailing wage'' is a very crude 
measure of what comparable American workers actually earn, as 
workers of widely varying skills and circumstances are 
conflated into one or two wage levels. For instance, those H-1B 
aliens visas who do have ``hot'' programming skills only have 
to be paid the prevailing wage for generic programmers. In 
addition, potentially self-serving industry-conducted wage 
surveys can be used to demonstrate the prevailing wage. The 
point can also be made that if the number of H-1B nonimmigrants 
becomes sufficiently large, the general wage level can be 
depressed even if the foreign workers are paid comparably to 
American workers.
    In conclusion, after pondering the existence of a shortage, 
Robert Lerman, Director of the Human Resource Policy Center of 
the Urban Institute, wrote that:

          Government policy makers should be cautious about 
        short-term efforts to expand the supply of workers, 
        especially by increasing the number of immigrant visas. 
        Given the boom and bust cycles often observed in these 
        fields, by the time the Government acts to increase 
        supply, the market may have already shifted from an 
        excess demand to excess supply stage. Expanded 
        immigration may have another counterproductive impact. 
        It may deter prospective students from choosing an 
        information technology career when they hear that 
        potential immigrants entering the field will gain 
        special access to visas.\88\
---------------------------------------------------------------------------
    \88\ Senate Hearing.
---------------------------------------------------------------------------

                      V. Fraud in the H-1B Program

    At a hearing held by the Subcommittee on Immigration and 
Claims, it was found that widespread fraud exists in the H-1B 
program.\89\ Inspector General Jacquelyn Williams-Bridgers of 
the State Department testified that ``[w]e have been 
increasingly faced with more [fraud] allegations and cases 
recently in the H-1B areas.'' \90\ Most strikingly, a special 
investigation conducted by the U.S. Consulate at Chennai, 
India, examined 3,247 suspect H-1B petitions forwarded by the 
INS and found that 45% of the cases could not be authenticated 
and 21% were identified as outright fraudulent.\91\ Because of 
a lack of resources, most of these petitions would have been 
rubber stamped had it not been for this special investigation.
---------------------------------------------------------------------------
    \89\ Nonimmigrant Visa Fraud: Hearing before the Subcomm. on 
Immigration and Claims of the House Judiciary Comm., 106th Cong., 1st 
Sess. (1999).
    \90\ Id. at 17.
    \91\ Id. at 21 (testimony of William Yates, Director of Immigration 
Services, INS).
---------------------------------------------------------------------------
    Cases were disclosed at the hearing in which H-1B petitions 
were filed on behalf of paper or front companies and in which 
falsified educational credentials or claims of job experience 
were submitted on behalf of unqualified applicants. INS field 
investigations of suspect H-1B petitioners have identified 
``mail drop'' addresses where no legitimate business activity 
takes place and numerous instances of companies filing 
fraudulent petitions in exchange for payments by unqualified 
applicants. For instance, John Ratigan, a retired consular 
officer, stated that:

          In China, the method of operation has remained fairly 
        constant for more than a decade. Small, essentially 
        sham companies are set up, in the US and in China. . . 
        . The US and foreign corporations which facilitate 
        these transactions are usually nothing more than a P.O. 
        box, an abandoned building or a fictitious address and 
        a single telephone number, often shared by dozens or 
        even hundreds of these collapsible corporations. An H 
        or L visa petition is filed by the US company 
        requesting that a visa be granted to the foreigner who 
        is to be smuggled. The petition is routinely approved. 
        . . .
          A similar system of small, shell corporations was and 
        apparently continues to be used in Russia as well.\92\
---------------------------------------------------------------------------
    \92\ Id. at 43.

    Similarly, William Yates, Director of Immigration Services 
at the INS, stated that ``[e]xamples of fraud associated with 
the requesting company include instances where: the company is 
non-existent and/or operating from a post office box, 
residence, apartment, or many companies are sharing one of the 
above.'' \93\
---------------------------------------------------------------------------
    \93\ Id. at 23.
---------------------------------------------------------------------------
    In many cases, H-1B nonimmigrants turn out not to be highly 
skilled workers. Inspector General Williams-Bridgers stated 
that ``[w]hat we are increasingly seeing are cases where . . . 
individuals . . . enter the U.S. on the premise that they will 
assume a highly technical job only to find that the individuals 
are low skilled workers, slated for employment as janitors or 
nurse's aides or store clerks in companies that have handsomely 
paid the brokers.'' \94\ Jill Esposito, Post Liason Division, 
Visa Office, U.S. State Department, reported an instance where:
---------------------------------------------------------------------------
    \94\ Id. at 10.

          The company that had filed a petition turned out to 
        be the donut shop owned by the applicant's sister and 
        brother-in-law in the United States. The donut shop 
        supposedly needed her skills as a ``comptroller'' to 
        ``direct the financial activities of the company.''. . 
        . The donut shop will never be referred to as just 
        that, but always as the ``corporate body'' or 
        ``petitioning firm.'' \95\
---------------------------------------------------------------------------
    \95\ Id. at 32-33.

    This can be accomplished through falsified educational 
---------------------------------------------------------------------------
credentials or job experience. William Yates found that:

          Beneficiary fraud involves the falsification of 
        either the education or prior job experience of the 
        petitioner. This information is difficult for INS to 
        verify as it originates from foreign sources and the 
        format or form for submission by foreign businesses and 
        schools is not standardized. These documents are easily 
        falsified. . . . The employer may not know that the 
        information is false.\96\
---------------------------------------------------------------------------
    \96\ Id. at 23.

    State Department witnesses made a case for more resources 
for anti-fraud efforts. Nancy Sambaiew, Deputy Assistant 
Secretary for Visa Services, stated that ``for every fraud 
scheme we detect, another better one can emerge. That is why we 
must continue to seek improvements in our methods and 
resources.'' \97\ Inspector General Williams-Bridgers stated 
that:
---------------------------------------------------------------------------
    \97\ Id. at 28.

          Overseas consular offices and antifraud units 
        continue to face staffing shortages. High-fraud posts 
        are not able to attract enough experienced consular 
        officers, or enough full-time, experienced antifraud 
        officers because these posts are generally in 
        undesirable locations and have heavy workloads. In 
        addition, no correlation exists between the fraud level 
        of a post and whether that post has a full-time 
        antifraud officer. . . .
          . . . .
          We also found that posts were not adequately 
        monitoring their nonimmigrant visa operations for 
        fraud.
          . . . .
          [W]eaknesses can often be attributed to the overall 
        lack of full-time antifraud officers at posts. Antfraud 
        responsibilities are often ancillary and therefore 
        officers have little time to focus on antifraud work. 
        As a result, there have been several instances of 
        malfeasance. . . .
          . . . .
          Fraud involving the H-1 visa program often involves 
        large scale and complex operations. Joint 
        investigations and the creation of task forces are 
        particularly useful and often necessary when dealing 
        with H-1 visa fraud. Moreover, the magnitude of the 
        smuggling operations usually associated with these 
        fraud cases requires significant investigative 
        resources.\98\
---------------------------------------------------------------------------
    \98\ Id. at 11, 13-14.
---------------------------------------------------------------------------

 VI. The American Competitiveness and Workforce Improvement Act of 1998

    The American Competitiveness and Workforce Improvement Act 
of 1998 (``ACWIA'') \99\ raised the annual H-1B cap to 115,000 
for fiscal years 1999 and 2000 and 107,500 in 2001. The cap 
then falls back to its pre-ACWIA level of 65,000.\100\
---------------------------------------------------------------------------
    \99\ Title IV of Division C of H.R. 4328, ``Making Omnibus 
Consolidated and Emergency Supplemental Appropriations for Fiscal Year 
1999'', Pub. L. No. 105-277, 112 Stat. 2681-641. The Act was enacted on 
October 21, 1998.
    \100\ ACWIA sec. 411(a) (codified at INA sec. 214(g)(1)(A)).
---------------------------------------------------------------------------
    The primary protections for American workers contained in 
ACWIA focused on ``job contractors'' or ``job shops'', those 
employers most likely to abuse the H-1B program. Two new 
attestations--the no-layoff/non-displacement attestation and 
the recruitment attestation--apply principally to job 
contractors/shops, defined in the bill (for larger companies) 
as those employers 15% or more of whose workforces are composed 
of H-1B nonimmigrants.\101\ These businesses, designated as 
``H-1B-dependent'', are subject to the attestations in those 
instances where they petition for aliens without masters 
degrees in their specialties or who will not be paid at least 
$60,000 a year.\102\ Other employers do not have to comply with 
the new attestations unless they have been found to have 
willfully violated the rules of the H-1B program.
---------------------------------------------------------------------------
    \101\ ACWIA sec. 412(a)-(b) (codified at INA sec. 212(n)(1)(E)-(G), 
(n)(3)(A)).
    \102\ ACWIA sec. 412(b) (codified at INA sec. 212(n)(3)(B)).
---------------------------------------------------------------------------
    The no-layoff attestation prohibits an employer from laying 
off an American worker from a job that is essentially the 
equivalent of the job for which an H-1B alien is sought 
(involves essentially the same responsibilities, was held by a 
United States worker with substantially equivalent 
qualifications and experience, and is located in the same areas 
of employment) during the period beginning 90 days before and 
ending 90 days after the employer files a visa petition for the 
alien.\103\ If an H-1B dependent employer places an H-1B 
nonimmigrant with another employer and the alien works at the 
other employer's worksite and there are indicia of an 
employment relationship between the alien and the other 
employer, the H-1B dependent employer must inquire with the 
other employer as to whether the other employer will displace 
any American workers with the alien (and receive assurances 
that it will not).\104\ Regardless of this inquiry, if it turns 
out that the other employer has so laid off an American worker, 
the placing employer is subject to penalty (not the ``other'' 
employer with whom the nonimmigrant is placed).\105\ The 
recruitment attestation requires an employer to have taken good 
faith steps to recruit American workers (using industry-wide 
standards) for the job an H-1B alien will perform and to offer 
the job to any American worker who applies and is equally or 
better qualified than the alien.\106\ The attestations sunset 
at the end of fiscal year 2001.
---------------------------------------------------------------------------
    \103\ ACWIA sec. 412(a)-(b) (codified at INA sec. 212(n)(1)(E), 
(n)(4)(B)).
    \104\ ACWIA sec. 412(a) (codified at INA sec. 212(n)(1)(F)).
    \105\ ACWIA sec. 413 (c) (codified at INA sec. 212(n)(2)(E)).
    \106\ ACWIA sec. 412(a) (codified at INA sec. 212(n)(1)(G)).
---------------------------------------------------------------------------
    The Labor Department enforces all aspects of the program 
except in instances where an American worker claims that a job 
should have been offered to him or her instead of an H-1B 
nonimmigrant. In such cases, an arbitrator appointed by the 
Federal Mediation and Conciliation Service will decide the 
issue.\107\
---------------------------------------------------------------------------
    \107\ ACWIA sec. 413(b) (codified at INA sec. 212(n)(5)).
---------------------------------------------------------------------------
    The Labor Department is able to investigate an employer 
using the H-1B program without having received a complaint from 
an aggrieved party in certain circumstances where it receives 
specific credible information that provides reasonable cause to 
believe that the employer has committed a willful failure to 
meet conditions of the H-1B program, has shown a pattern or 
practice of failing to meet the conditions, or has 
substantially failed to meet the conditions in a way that 
affects multiple employees.\108\ This authority sunsets at the 
end of fiscal year 2001. In addition, the Labor Department may 
subject an employer to random investigations for up to 5 years 
after the employer is found to have committed a willful failure 
to meet the conditions of the H-1B program.\109\ The number of 
complaints filed with the Secretary of Labor has increased to 
135 in 1999, and to 96 through April of fiscal year 2000.\110\
---------------------------------------------------------------------------
    \108\ ACWIA sec. 413(e) (codified at INA sec. 212(n)(2)(G)).
    \109\ ACWIA sec. 413(d) (codified at INA sec. 212(n)(2)(F)).
    \110\ The Status of Regulations Implementing the American 
Competitiveness and Workforce Improvement Act of 1998: Hearing Before 
the Subcomm. on Immigration and Claims of the House Judiciary Comm., 
106th Cong., 2nd Sess. (2000) (statement of John Fraser, Deputy 
Administrator, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor).
---------------------------------------------------------------------------
    An employer must offer an H-1B alien benefits and 
eligibility for benefits on the same basis, and in accordance 
with the same criteria, as the employer offers to American 
workers.\111\ However, universities and certain other employers 
only have to pay the prevailing wage level of employees at 
similar institutions.\112\
---------------------------------------------------------------------------
    \111\ ACWIA sec. 413(a) (codified at INA sec. 212(n)(2)(C)(viii)).
    \112\ ACWIA sec. 415 (codified at INA sec. 212(p)).
---------------------------------------------------------------------------
    Potential penalties include back pay, civil monetary 
penalties of up to $1,000 per violation (up to $5,000 per 
willful violation, and up to $35,000 per violation where a 
willful violation was committed along with the improper layoff 
of an American worker), and debarment from the H-1B program for 
from 1 to 3 years.\113\ Whistleblower protection is provided to 
employees.\114\ Employers cannot levy penalties (as opposed to 
liquidated damages) against H-1B nonimmigrants for leaving 
their employment.\115\ Employers cannot ``bench'' H-1B 
nonimmigrants (place them without pay in nonproductive status 
due to lack of work or for other reasons).\116\
---------------------------------------------------------------------------
    \113\ ACWIA sec. 413(a) (codified at INA sec. 212(n)(2)(C)(i)-
(iii)).
    \114\ ACWIA sec. 413(a) (codified at INA sec. 212(n)(2)(C)(iv)-
(v)).
    \115\ ACWIA sec. 413(a) (codified at INA sec. 212(n)(2)(C)(vi)).
    \116\ ACWIA sec. 413(a) (codified at INA sec. 212(n)(2)(C)(vii)).
---------------------------------------------------------------------------
    A $500 fee per alien is charged to all employers except 
universities and certain other institutions.\117\ The funds go 
principally for scholarship assistance for low-income students 
studying mathematics, computer science, or engineering, for 
Federal job training services, and for administrative and 
enforcement expenses.\118\ The fee will sunset at the end of 
fiscal year 2001.
---------------------------------------------------------------------------
    \117\ ACWIA sec. 414(a) (codified at INA sec. 214(c)(9)).
    \118\ ACWIA sec. 414(b) (codified at INA sec. 286(s)).
---------------------------------------------------------------------------
    The INS is directed to maintain an accurate count of H-1B 
nonimmigrants and to provide Congress with detailed information 
on the aliens.\119\
---------------------------------------------------------------------------
    \119\ ACWIA sec. 416.
---------------------------------------------------------------------------
    The National Science Foundation is directed to conduct 
studies on the status of older workers in the information 
technology field and on the labor market needs for workers with 
high technology skills.\120\ Various Federal entities, 
including the Federal Reserve System and cabinet agencies, are 
directed to report the results of any reliable studies on the 
impact of the increased H-1B cap on national economic 
indicators, including inflation and unemployment, that warrant 
action by Congress.\121\
---------------------------------------------------------------------------
    \120\ ACWIA secs. 417-18(a).
    \121\ ACWIA sec. 418(b).
---------------------------------------------------------------------------

VII. Events Taking Place After Passage of the American Competitiveness 
                 and Workforce Improvement Act of 1998

    The new attestations contained in the American 
Competitiveness and Workforce Improvement Act have never been 
implemented because the Office of Management and Budget has yet 
to approve final regulations written by the Labor 
Department.\122\
---------------------------------------------------------------------------
    \122\ See letter from Jacob Lew, Director, Office of Management and 
Budget, to Lamar Smith, Chairman, House Judiciary Committee, 
Subcommittee on Immigration and Claims (May 12, 2000).
---------------------------------------------------------------------------
    According to an audit performed by KPMG Peat Marwick, in 
1999 the INS approved between 21,888 and 23,385 petitions in 
excess of the statutory cap of 115,000.\123\ Despite the 
increases in the H-1B cap, the increased quota itself will be 
reached before the end of fiscal year 2000.
---------------------------------------------------------------------------
    \123\ INS Office of Public Affairs, INS Statement on KPMG's Report 
on H-1B Processing (April 6, 2000).
---------------------------------------------------------------------------

  VIII. H.R. 4227, the Technology Worker Temporary Relief Act of 2000

A. The H-1B Cap
    It is in the nation's interest that the cap on H-1B visas 
be temporarily lifted. First, unless Congress acts, at some 
point in fiscal year 2000 employers will not be able to get 
approval for new H-1B nonimmigrants to start work until the 
beginning of fiscal year 2001 on October 1, 2000. This delay 
would be extremely detrimental to large numbers of employers. 
If a university wanted to use the H-1B program to hire an alien 
as a professor or a teaching assistant, the alien could not 
start work until October, a month after most academic years 
begin. If a computer software developer wanted to use the H-1B 
program to hire an alien to devise its next generation 
software, it would have to delay the project for months.
    Second, it is possible that there currently exists a 
significant shortage of information technology workers. The 
committee recognizes that the evidence for such a shortage is 
inconclusive. However, because the success of our economy in 
recent years is so indebted to advances in computer technology, 
the committee is willing to give industry the benefit of the 
doubt, to accept claims that there is a shortage and that it 
can only be alleviated through an increase of foreign workers 
through the H-1B program.
    Section 101 of the bill removes the cap on H-1B visas for 
fiscal years 2000 through 2002, returning the program to the 
uncapped state in which it existed prior to the Immigration Act 
of 1990. It is the committee's belief that under present 
economic conditions the market should determine how many 
foreign skilled workers American employers need. Arbitrary 
limits set by Congress are just that--arbitrary. The program is 
uncapped for only 3 years. Economic conditions may be quite 
different by 2003 and Congress should re-evaluate the H-1B 
program at that time. Additionally, the reports required by the 
American Competitiveness and Workforce Improvement Act will 
have been delivered to Congress by this time, and may contain 
information causing Congress to rethink the H-1B program.
    If the program is going to be uncapped, it is more 
important than ever that it contain adequate safeguards to 
protect American workers and prevent widespread fraud. The bill 
contains a number of provisions with these goals in mind.
B. American Worker Safeguards
    The bill is designed to ensure that American workers are 
not adversely affected by the H-1B program. Sections 401 and 
402 of the bill extend the new attestations and additional 
Department of Labor investigative authority contained in ACWIA 
through fiscal year 2002. If the H-1B program is to be uncapped 
through 2002, these expiring worker protection provisions 
should also be extended. Section 403 of the bill requires that 
the Department of Labor promulgate final regulations fully 
implementing all provisions of ACWIA so that they are in effect 
on or before September 1, 2000. It is inexcusable that ACWIA's 
vital safeguards for American workers are not yet in effect, 18 
months after enactment of ACWIA.\124\ Once the H-1B program is 
uncapped, it is especially important that these provisions be 
implemented.
---------------------------------------------------------------------------
    \124\ See The Status of Regulations Implementing the American 
Competitiveness and Workforce Improvement Act of 1998: Hearing Before 
the Subcomm. on Immigration and Claims of the House Comm. on the 
Judiciary, 106th Cong., 2nd Sess. (2000).
---------------------------------------------------------------------------
    Section 101 of the bill provides that the additional visas 
made available over and above current law in fiscal years 2001 
and 2002 will only be available to employers who can 
demonstrate that in the tax year prior to the year in which 
they file H-1B petitions, they increased the median of the 
wages paid to their American workers (over the previous year). 
The bill is designed to benefit those employers who are using 
the H-1B program to continue their growth and to continue to be 
able to provide new and better opportunities for their American 
workers. Employers that are cutting the salaries of their 
American employees should not be rewarded with more H-1B visas 
than are available under current law. These companies are 
reducing, not expanding, opportunities for American workers.
    Section 201 of the bill provides that employers must pay H-
1B nonimmigrants at least $40,000 a year (unless working at 
universities or public or private elementary or secondary 
schools). The H-1B program is designed to allow employers to 
bring ``the best and the brightest'' into the United States and 
to fill positions critical to the employers' success. 
Presumably, workers meeting such a description would be paid 
$40,000 at the very least, considering that:

          college graduates in 1999 with degrees in computer 
        engineering started out earning a median of $46,200 
        ($45,000 with degrees in electrical and electronics 
        engineering, $45,000 with degrees in for computer 
        science, $40,300 with degrees in computer programming 
        and $40,000 with degrees in information sciences),\125\ 
        and
---------------------------------------------------------------------------
    \125\ National Association of Colleges and Employers, Salary 
Survey: A Study of 1998-1999 Beginning Offers 4-5 (1999).
---------------------------------------------------------------------------
          in 1997, computer engineers had a median wage of 
        $58,386, with those in the 90th percentile earning 
        $88,858 ($59,155/$88,338 for electrical and electronics 
        engineers, $49,546/$85,384 for systems analysts, 
        $45,760/$83,782 for data base administrators, and 
        $47,029/$87,027 for computer programmers).\126\
---------------------------------------------------------------------------
    \126\ Bureau of Labor Statistics, U.S. Department of Labor, 1997 
National Occupational Employment and Wage Estimates.

    When commercial employers pay H-1B nonimmigrants less than 
$40,000, the risk is too great that they are using the H-1B 
program for cheap labor and not for access to extraordinary 
individuals.
    Section 204 of the bill provides that employers can only 
petition for physical therapists who have completed degrees 
equivalent to the education and training received by physical 
therapists receiving master's degrees from American schools. 
The master's degree is the benchmark for training physical 
therapists at American universities. The lack of this 
requirement in the H-1B program has led to foreign physical 
therapists having a much lower pass rate than American physical 
therapists in licensure exams.
    Section 501 of the bill requires the General Accounting 
Office to conduct a study of the measures taken by employers 
using the H-1B program to recruit for these jobs qualified 
American workers from underrepresented groups such as African-
Americans, Hispanics, women, and individuals with a disability. 
The GAO shall submit a report to Congress by December 31, 2000, 
containing the results of the study and any recommendations as 
to modifications to the H-1B program that should be made to 
increase recruitment of members of these groups. Since 
individuals from these groups are already underrepresented in 
``high tech'' jobs, it is crucial to ensure that they are not 
further disadvantaged by any expansion of the H-1B program and 
that employers using the H-1B program are making strenuous 
efforts to recruit them.
    Section 501 also requires the GAO to conduct a study on the 
measures taken by employers using the H-1B program to 
continually train and update the existing skills of their 
present employees, and to promote these employees whenever 
possible. Employers should only rely upon the H-1B program when 
they cannot adequately fill positions with their current 
American employees. Employers should make concerted efforts to 
retrain their current employees to maximize the occasions in 
which these employees can meet their always changing needs. It 
is imperative for Congress to know to what extent employers are 
following these maxims.
C. Anti-Fraud Measures
    Section 301 of the bill provides that nonimmigrants working 
in specialty occupations utilize the H-1B program. This 
provision is designed to eliminate the use of ``B-1'' business 
visitor visas in lieu of H-1B visas.\127\ Under this practice, 
aliens coming to the United States to perform work in the 
specialty occupations normally reserved for H-1B nonimmigrants 
can use B-1 visas as long as they are paid from sources outside 
the United States. This practice enables employers to avoid the 
safeguards (and any numerical cap) of the H-1B program, and 
should not be allowed.
---------------------------------------------------------------------------
    \127\ See U.S. State Department Foreign Affairs Manual sec. 41.31 
n.8.
---------------------------------------------------------------------------
    Section 302 of the bill provides that H-1B nonimmigrants 
must work full-time (unless employed at universities). 
Currently, employers can petition for part-time workers. 
Companies doing this are often marginal operations that have 
trouble meeting the salary and other requirements of the H-1B 
program. In addition, part-time workers are not necessarily 
able to support themselves and will be tempted to engage in 
unauthorized employment. Universities, however, often share H-
1B nonimmigrants, with the aliens working multiple part-time 
jobs at different institutions.
    Section 303 of the bill eliminates the provision of current 
law that allows petitioned-for aliens to substitute work 
experience for a college degree. Current law encourages the use 
of overstated and wholly specious claims of work experience in 
H-1B petitions, as described at the May 5, 1999, hearing of the 
Subcommittee on Immigration and Claims. Requiring that H-1B 
nonimmigrants have (verifiable) college degrees will assure 
that only well-qualified true professionals will come here 
under the program. They will be able to rely on work experience 
in a specialty if they have college degrees unrelated to that 
specialty. The rare alien of extraordinary achievement who does 
not have a college education can use an ``O'' temporary 
visa.\128\
---------------------------------------------------------------------------
    \128\ See INA sec. 101(a)(15)(O).
---------------------------------------------------------------------------
    Section 304 of the bill requires petitioning employers to 
pay a fee of $100 that will be earmarked for H-1B anti-fraud 
work and split evenly between the INS and the State Department. 
As indicated at the Subcommittee on Immigration and Claim's 
hearing of May 5, 1999, the anti-fraud efforts of the 
Department of State and INS with respect to the H-1B program 
often falter for lack of resources. The anti-fraud fee will 
provide more funding for field investigations and joint inter-
agency anti-fraud projects. It will also provide funding to pay 
for the deportation of aliens who were admitted to the country 
based on fraudulent H-1B applications.
    Section 305 of the bill requires that non-governmental 
petitioning employers who do not have assets of at least 
$250,000 provide documentation of their business activity. 
Under current law, there are no minimum requirements for 
employers filing H-1B petitions. As described at the 
Subcommittee on Immigration and Claim's hearing of May 5, 1999, 
numerous petitions are filed by questionable companies that 
have few, if any, assets, often ``front'' companies set up 
solely to apply for H-1B visas. Other petitions are filed by 
marginal companies whose level of business activity is 
insufficient to pay the promised salary to an H-1B alien. While 
the INS petition review process occasionally identifies such 
problems, many questionable petitions are still approved. 
Requiring additional documentation for companies that cannot 
meet a quite low minimum assets requirement will ensure that H-
1B visas are not used by fraudulent companies or those that 
cannot hope to meet the requirements of the H-1B program.
    Section 306 of the bill requires that employers utilizing 
the H-1B program submit to the Department of Labor each year 
the ``W-2'' wage withholding statements for their H-1B 
employees. This provision will help ensure that H-1B aliens are 
actually being paid the wage rate promised by their employers.
    Section 202 of the bill requires that employers utilizing 
the H-1B program provide to the Department of Labor in 
electronic form specified information about each H-1B alien 
employed (including country of origin, academic degree, job 
title, start date and salary level). The Department of Labor 
shall then make such data available on the Internet. While much 
of this data is publically disclosed under the current program, 
it is inaccessible to persons not able to visit an employer's 
worksite or Department of Labor headquarters.\129\ The H-1B 
program will become more transparent when information on the 
use of the program becomes widely accessible to the public. 
This will increase the confidence of the American people in the 
program and make it easier to ascertain that employers are 
meeting the requirements of the H-1B program.
---------------------------------------------------------------------------
    \129\ See INA sec. 212(n)(1).
---------------------------------------------------------------------------
D. Miscellaneous Provisions
    Section 102 of the bill provides that an H-1B nonimmigrant 
is authorized to accept new employment upon the filing by the 
new employer of a new petition. Employment authorization will 
continue for such alien until the new petition is adjudicated. 
Currently, an alien working on an H-1B visa can only work for 
the company that petitioned for him or her. To work for another 
employer, the alien would have to have that employer file its 
own H-1B petition and wait until it is approved. This obviously 
puts the alien at a severe bargaining disadvantage against his 
or her employer. Allowing H-1B aliens to more easily move among 
employers will decrease the opportunities to abuse these 
workers.
    Section 203 of the bill imposes a $200 fee on H-1B 
petitions that will be used by the INS and the Department of 
Labor to expedite processing of H-1B petitions and applications 
and to ensure that employers are meeting the requirements of 
the H-1B program.
    Section 205 of the bill reduces the $500 fee added by ACWIA 
to $100 for employers that are local educational agencies.

                                Hearings

    The committee's Subcommittee on Immigration and Claims held 
3 days of relevant oversight hearings on May 5 and August 5, 
1999, and on May 25, 2000. During the May 5, 1999, hearing, 
``Nonimmigrant Visa Fraud,'' testimony was received from 
Michael Bromwich, Inspector General, U.S. Department of 
Justice; Jacquelyn L. Williams-Bridgers, Inspector General, 
U.S. Department of State; William A. Yates, Director of 
Immigration Services, U.S. Immigration and Naturalization 
Service; Gary Bradford, Assistant Director, Texas Service 
Center, U.S. Immigration and Naturalization Service; Nancy 
Sambaiew, Deputy Assistant Secretary for Visa Services, Bureau 
of Consular Affairs, U.S. Department of State; Jill Esposito, 
Post Liaison Division, Visa Office, Bureau of Consular Affairs, 
U.S. Department of State; John Ratigan; Lynn Shotwell, American 
Council on International Personnel; and Mark Mancini.
    During the August 5, 1999, hearing, ``the H-1B Temporary 
Professional Worker Visa Program and Information Technology 
Workforce Issues,'' testimony was received from Austin 
Fragomen, Chairman, American Council on International 
Personnel; David Smith, Director, Public Policy Department, 
AFL-CIO; Crystal Neiswonger, Immigration Specialist, TRW Inc. 
(on behalf of the National Association of Manufacturers); Gene 
Nelson; John Miano, the Programmers Guild; Alison Cleveland, 
Associate Manager of Labor Policy, U.S. Chamber of Commerce; 
Paul Kostek, President, Institute of Electrical and Electronics 
Engineers-USA; and Charles Foster.
    During the May 25, 2000, hearing, ``the Status of 
Regulations Implementing the American Competitiveness and 
Workforce Improvement Act of 1998,'' testimony was received 
from John Fraser, Deputy Administrator, Wage and Hour Division, 
Employment Standards Administration, U.S. Department of Labor; 
John Spotila, Administrator, Office of Information Policy and 
Regulatory Affairs, U.S. Office of Management and Budget; John 
Templeton, Co-Convener, Coalition for Fair Employment in 
Silicon Valley (accompanied by Kevin Hinkston, Co-Convener, 
Coalition for Fair Employment in Silicon Valley); and Frank 
Brehm, the Programmer's Guild.

                        Committee Consideration

    On April 12, 2000, the Subcommittee on Immigration and 
Claims met in open session and ordered favorably reported the 
bill H.R. 4227, as amended, by a voice vote, a quorum being 
present. On May 17, 2000, the committee met in open session and 
ordered favorably reported the bill H.R. 4227 with amendment by 
a recorded vote of 18 to 11, a quorum being present.

                         Votes of the Committee

    One amendment was adopted by voice vote. The amendment, 
offered by Ms. Jackson Lee, reduced the H-1B filing fee for 
local educational agencies from $500 to $100.
    There were four recorded votes during the committee's 
consideration of H.R. 4227, as follows:
    1. Amendment offered by Mr. Smith of Texas on behalf of 
himself, Ms. Jackson Lee and Mr. Goodlatte. The amendment was 
designed to ensure that H-1B visa applications are processed 
expeditiously by adding a dedicated $200 fee for processing and 
by eliminating the bill's requirement that the State Department 
verify foreign degrees of petitioned-for aliens. The amendment 
was also designed to ensure that the unlimited visas made 
available by the bill for 2001 and 2002 would be available when 
employers need them by eliminating the bill's requirements that 
1) regulations implementing the American Competitiveness and 
Workforce Improvement Act of 1998 first be issued (The 
amendment does require the Department of Labor to issue 
regulations implementing the provisions of ACWIA by September 
1, 2000.), and that 2) employers seeking visas not available 
under current law must show that they have increased the size 
of their U.S. workforces over the prior year. The amendment 
eliminated the bill's requirement that the names of H-1B 
nonimmigrants be posted on the Department of Labor's Internet 
site. The amendment allowed H-1B workers to move to new 
employers before the new employers' petitions are approved by 
the INS. The amendment required the GAO to perform studies on 
1) the recruitment of members of underrepresented groups by 
employers utilizing the H-1B program, 2) the efforts of these 
employers to retrain their current workforces, and 3) INS's 
performance in compiling information about H-1B visas issued. 
The amendment provided that the $40,000 minimum salary for H-1B 
workers be indexed for inflation. Finally, the amendment 
eliminated the bill's provision switching some responsibilities 
under the H-1B program from INS to the State Department. 
Adopted 24-7.

                                                   ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Sensenbrenner...............................................  ..............              X   ..............
Mr. McCollum....................................................  ..............  ..............  ..............
Mr. Gekas.......................................................              X   ..............  ..............
Mr. Coble.......................................................  ..............  ..............  ..............
Mr. Smith (TX)..................................................              X   ..............  ..............
Mr. Gallegly....................................................  ..............  ..............  ..............
Mr. Canady......................................................              X   ..............  ..............
Mr. Goodlatte...................................................  ..............  ..............  ..............
Mr. Chabot......................................................  ..............  ..............  ..............
Mr. Barr........................................................  ..............              X   ..............
Mr. Jenkins.....................................................              X   ..............  ..............
Mr. Hutchinson..................................................              X   ..............  ..............
Mr. Pease.......................................................              X   ..............  ..............
Mr. Cannon......................................................              X   ..............  ..............
Mr. Rogan.......................................................              X   ..............  ..............
Mr. Graham......................................................              X   ..............  ..............
Ms. Bono........................................................              X   ..............  ..............
Mr. Bachus......................................................  ..............              X   ..............
Mr. Scarborough.................................................              X   ..............  ..............
Mr. Vitter......................................................              X   ..............  ..............
Mr. Conyers.....................................................              X   ..............  ..............
Mr. Frank.......................................................              X   ..............  ..............
Mr. Berman......................................................              X   ..............  ..............
Mr. Boucher.....................................................  ..............  ..............  ..............
Mr. Nadler......................................................              X   ..............  ..............
Mr. Scott.......................................................              X   ..............  ..............
Mr. Watt........................................................              X   ..............  ..............
Ms. Lofgren.....................................................  ..............              X   ..............
Ms. Jackson Lee.................................................              X   ..............  ..............
Ms. Waters......................................................              X   ..............  ..............
Mr. Meehan......................................................              X   ..............  ..............
Mr. Delahunt....................................................              X   ..............  ..............
Mr. Wexler......................................................  ..............              X   ..............
Mr. Rothman.....................................................  ..............              X   ..............
Ms. Baldwin.....................................................              X   ..............  ..............
Mr. Weiner......................................................  ..............              X   ..............
Mr. Hyde, Chairman..............................................              X   ..............  ..............
                                                                 -----------------------------------------------
    Total.......................................................             24               7   ..............
----------------------------------------------------------------------------------------------------------------

    2. Amendment offered by Mr. Hyde exempting H-1B workers who 
will be public or private elementary or secondary school 
teachers from the $40,000 salary floor. Adopted 15-13.

                                                   ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Sensenbrenner...............................................  ..............  ..............  ..............
Mr. McCollum....................................................  ..............  ..............  ..............
Mr. Gekas.......................................................              X   ..............  ..............
Mr. Coble.......................................................              X   ..............  ..............
Mr. Smith (TX)..................................................              X   ..............  ..............
Mr. Gallegly....................................................  ..............  ..............  ..............
Mr. Canady......................................................              X   ..............  ..............
Mr. Goodlatte...................................................  ..............  ..............  ..............
Mr. Chabot......................................................              X   ..............  ..............
Mr. Barr........................................................  ..............              X   ..............
Mr. Jenkins.....................................................              X   ..............  ..............
Mr. Hutchinson..................................................              X   ..............  ..............
Mr. Pease.......................................................              X   ..............  ..............
Mr. Cannon......................................................              X   ..............  ..............
Mr. Rogan.......................................................              X   ..............  ..............
Mr. Graham......................................................              X   ..............  ..............
Ms. Bono........................................................              X   ..............  ..............
Mr. Bachus......................................................              X   ..............  ..............
Mr. Scarborough.................................................  ..............  ..............  ..............
Mr. Vitter......................................................              X   ..............  ..............
Mr. Conyers.....................................................  ..............              X   ..............
Mr. Frank.......................................................  ..............              X   ..............
Mr. Berman......................................................  ..............  ..............  ..............
Mr. Boucher.....................................................  ..............  ..............  ..............
Mr. Nadler......................................................  ..............              X   ..............
Mr. Scott.......................................................  ..............              X   ..............
Mr. Watt........................................................  ..............              X   ..............
Ms. Lofgren.....................................................  ..............              X   ..............
Ms. Jackson Lee.................................................  ..............              X   ..............
Ms. Waters......................................................  ..............              X   ..............
Mr. Meehan......................................................  ..............  ..............  ..............
Mr. Delahunt....................................................  ..............              X   ..............
Mr. Wexler......................................................  ..............              X   ..............
Mr. Rothman.....................................................  ..............  ..............  ..............
Ms. Baldwin.....................................................  ..............              X   ..............
Mr. Weiner......................................................  ..............              X   ..............
Mr. Hyde, Chairman..............................................              X   ..............  ..............
                                                                 -----------------------------------------------
    Total.......................................................             15              13   ..............
----------------------------------------------------------------------------------------------------------------

    3. Amendment offered by Ms. Waters that would have made the 
issuance of all H-1B visas conditional on a number of employers 
entering into a contract with a recruiting firm to recruit 
minorities for high-tech jobs. One thousand minorities would 
have to be hired in California, Virginia, an Massachusetts. By 
unanimous consent Ms. Waters modified her amendment to add 
North Carolina and raise the required total to 1500 minority 
hires. By unanimous consent, Ms. Waters also modified her 
amendment to strike reference to any specific States. Defeated 
12-17.

                                                   ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Sensenbrenner...............................................  ..............              X   ..............
Mr. McCollum....................................................  ..............  ..............  ..............
Mr. Gekas.......................................................  ..............              X   ..............
Mr. Coble.......................................................  ..............              X   ..............
Mr. Smith (TX)..................................................  ..............              X   ..............
Mr. Gallegly....................................................  ..............              X   ..............
Mr. Canady......................................................  ..............              X   ..............
Mr. Goodlatte...................................................  ..............              X   ..............
Mr. Chabot......................................................  ..............              X   ..............
Mr. Barr........................................................  ..............              X   ..............
Mr. Jenkins.....................................................  ..............              X   ..............
Mr. Hutchinson..................................................  ..............              X   ..............
Mr. Pease.......................................................              X   ..............  ..............
Mr. Cannon......................................................  ..............              X   ..............
Mr. Rogan.......................................................  ..............  ..............  ..............
Mr. Graham......................................................  ..............              X   ..............
Ms. Bono........................................................  ..............              X   ..............
Mr. Bachus......................................................  ..............              X   ..............
Mr. Scarborough.................................................  ..............  ..............  ..............
Mr. Vitter......................................................  ..............              X   ..............
Mr. Conyers.....................................................              X   ..............  ..............
Mr. Frank.......................................................              X   ..............  ..............
Mr. Berman......................................................  ..............  ..............  ..............
Mr. Boucher.....................................................  ..............  ..............  ..............
Mr. Nadler......................................................              X   ..............  ..............
Mr. Scott.......................................................              X   ..............  ..............
Mr. Watt........................................................              X   ..............  ..............
Ms. Lofgren.....................................................  ..............  ..............  ..............
Ms. Jackson Lee.................................................              X   ..............  ..............
Ms. Waters......................................................              X   ..............  ..............
Mr. Meehan......................................................  ..............  ..............  ..............
Mr. Delahunt....................................................              X   ..............  ..............
Mr. Wexler......................................................              X   ..............  ..............
Mr. Rothman.....................................................  ..............  ..............  ..............
Ms. Baldwin.....................................................              X   ..............  ..............
Mr. Weiner......................................................              X   ..............  ..............
Mr. Hyde, Chairman..............................................  ..............              X   ..............
                                                                 -----------------------------------------------
    Total.......................................................             12              17   ..............
----------------------------------------------------------------------------------------------------------------

    4. Vote on Final Passage. Adopted by a vote of 18-11. Mr. 
Rothman would have voted nay but had to miss the vote.

                                                   ROLLCALL NO. 4
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Sensenbrenner...............................................              X   ..............  ..............
Mr. McCollum....................................................              X   ..............  ..............
Mr. Gekas.......................................................              X   ..............  ..............
Mr. Coble.......................................................              X   ..............  ..............
Mr. Smith (TX)..................................................              X   ..............  ..............
Mr. Gallegly....................................................              X   ..............  ..............
Mr. Canady......................................................              X   ..............  ..............
Mr. Goodlatte...................................................              X   ..............  ..............
Mr. Chabot......................................................              X   ..............  ..............
Mr. Barr........................................................  ..............  ..............  ..............
Mr. Jenkins.....................................................              X   ..............  ..............
Mr. Hutchinson..................................................              X   ..............  ..............
Mr. Pease.......................................................              X   ..............  ..............
Mr. Cannon......................................................              X   ..............  ..............
Mr. Rogan.......................................................  ..............  ..............  ..............
Mr. Graham......................................................              X   ..............  ..............
Ms. Bono........................................................              X   ..............  ..............
Mr. Bachus......................................................  ..............  ..............  ..............
Mr. Scarborough.................................................  ..............  ..............  ..............
Mr. Vitter......................................................  ..............  ..............  ..............
Mr. Conyers.....................................................  ..............              X   ..............
Mr. Frank.......................................................  ..............  ..............  ..............
Mr. Berman......................................................  ..............              X   ..............
Mr. Boucher.....................................................              X   ..............  ..............
Mr. Nadler......................................................  ..............              X   ..............
Mr. Scott.......................................................  ..............              X   ..............
Mr. Watt........................................................  ..............              X   ..............
Ms. Lofgren.....................................................  ..............              X   ..............
Ms. Jackson Lee.................................................              X   ..............  ..............
Ms. Waters......................................................  ..............              X   ..............
Mr. Meehan......................................................  ..............              X   ..............
Mr. Delahunt....................................................  ..............              X   ..............
Mr. Wexler......................................................  ..............              X   ..............
Mr. Rothman.....................................................  ..............  ..............  ..............
Ms. Baldwin.....................................................  ..............  ..............  ..............
Mr. Weiner......................................................  ..............              X   ..............
Mr. Hyde, Chairman..............................................              X   ..............  ..............
                                                                 -----------------------------------------------
    Total.......................................................             18              11   ..............
----------------------------------------------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the committee reports that the 
findings and recommendations of the committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                Committee on Government Reform Findings

    No findings or recommendations of the Committee on 
Government Reform were received as referred to in clause 
3(c)(4) of rule XIII of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House Rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the committee sets forth, with 
respect to the H.R. 4227, the following estimate and comparison 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 12, 2000.
Hon. Henry J. Hyde, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4227, the 
Technology Worker Temporary Relief Act.
    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), who can be reached at 226-2860, 
Shelley Finlayson (for the state and local impact), who can be 
reached at 225-3220, and John Harris (for the private-sector 
impact), who can be reached at 226-2618.
            Sincerely,
                                  Dan L. Crippen, Director.

Enclosure

cc:
        Honorable John Conyers Jr.
        Ranking Democratic Member
H.R. 4227--Technology Worker Temporary Relief Act.

                                SUMMARY

    H.R. 4227 would increase the number of nonimmigrant 
(temporary) visas, known as H-1B visas, available for certain 
skilled foreign workers and would establish two new fees that 
must be paid by employers of these workers. The bill would make 
several other changes to current laws relating to the 
employment of skilled foreign workers, including placing 
additional conditions on employers that hire such workers. In 
addition, it would direct the General Accounting Office (GAO) 
to conduct three studies on issues relating to skilled foreign 
workers.
    CBO estimates that implementing H.R. 4227 would cost about 
$1 million in fiscal year 2001, assuming the availability of 
appropriated funds. In addition, we estimate that the bill 
would decrease net direct spending by $12 million over the 
2000-2005 period. Because H.R. 4227 would affect direct 
spending, pay-as-you-go procedures would apply.
    H.R. 4227 contains intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA), but CBO estimates that 
the costs of complying with these mandates would be very small 
and would not exceed the threshold established in that act ($55 
million in 2000, adjusted annually for inflation).
    H.R. 4227 would create several new private-sector mandates 
for businesses that hire H-1B visa holders. These mandates 
include new restrictions on H-1B holders' salaries and working 
conditions, new processing and noncompliance fees, and new 
reporting requirements. CBO estimates that the total costs of 
these mandates would exceed the annual threshold established in 
UMRA for the private sector ($109 million in 2000, adjusted 
annually for inflation). The bill would also benefit such 
businesses by easing current legal limits on the number of H-1B 
visas that may be issued over the next few years. CBO will 
provide a more detailed estimate of the impact of this 
legislation on the private sector in a separate statement.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 4227 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, training, employment, 
and social services) and 750 (administration of justice).

          TABLE 1. Estimated Budgetary Effects of H.R. 4227, the Technology Worker Temporary Relief Act
----------------------------------------------------------------------------------------------------------------
                                                                   By fiscal year, in millions of dollars
                                                           -----------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level                                     0        1        0        0        0        0
Estimated Outlays                                                 0        1        0        0        0        0
DIRECT SPENDING
Net Spending of Visa Fees Under Current Law                       0        0        0        0        0        0
  Estimated Budget Authority
  Estimated Outlays                                             -39       -9       72       36        9        0

  Proposed Changes
    INS Administrative Fees
      Estimated Budget Authority                                 -4       -8      -14       -6       -9      -11
      Estimated Outlays                                          -4       -8      -14       -6       -9      -11

    H-1B Petitioner Fees
      Estimated Budget Authority                                -18      -34        0        0        0        0
      Estimated Outlays                                         -18      -34        0        0        0        0

    New Fees                                                      0      -54      -59      -36      -38      -42
      Estimate Budget Authority
      Estimated Outlays                                           0      -54      -59      -36      -38      -42

    Department of State Fees
      Estimated Budget Authority                                 -2       -3       -5        0        0        0
      Estimated Outlays                                          -2       -3       -5        0        0        0

      Total Change in Visa Fee Collections
        Estimated Budget Authority                              -24      -99      -78      -42      -47      -53
        Estimated Outlays                                       -24      -99      -78      -42      -47      -53

    Additional Spending from Visa Fees
      Estimated Budget Authority                                 24       99       78       42       47       53
      Estimated Outlays                                           6       63       94       61       55       52

      Net Change in Direct Spending
        Estimated Budget Authority                                0        0        0        0        0        0
        Estimated Outlays                                       -18      -36       16       19        8       -1

Net Spending of Visa Fees Under H.R. 4227
  Estimated Budget Authority                                      0        0        0        0        0        0
  Estimated Outlays                                             -57      -45       88       55       17       -1
----------------------------------------------------------------------------------------------------------------

                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that H.R. 4227 will be 
enacted by August 1, 2000. The bill would affect direct 
spending, beginning soon after enactment. In addition, 
implementing the bill would have a minor impact on 
discretionary spending in 2001.
Spending Subject to Appropriation
    Based on information from GAO, CBO estimates that the 
studies concerning skilled foreign workers required by the bill 
would cost about $1 million in fiscal year 2001, assuming 
appropriation of the necessary funds.
Direct Spending
    CBO estimates that enacting the bill would decrease direct 
spending by about $12 million over the 2000-2005 period. Those 
changes would result from increased collections of visa fees, 
net of additional spending from collected funds.
    H.R. 4227 would remove the cap on the number of H-1B visas 
available for fiscal year 2000 and would exempt most 
individuals from the caps for fiscal years 2001 and 2002. The 
current cap for 2000 (115,000 visas) was reached in March. 
Based on the application rate from October of 1999 to February 
of 2000 and the anticipated demand for H-1B visas under the 
bill's conditions, CBO estimates that H.R. 4227 would increase 
the number of applications for these visas by about 40,000 for 
the remaining part of fiscal year 2000, by 72,500 in fiscal 
year 2001, and by 115,000 in fiscal year 2002. Table 2 shows 
the number of visas authorized by current law and the estimated 
application levels under H.R. 4227.

        TABLE 2. Number of H-1B Visas Authorized Under H.R. 4227
------------------------------------------------------------------------
                                              2000      2001      2002
------------------------------------------------------------------------
H-1B Visas Authorized Under Current Law      115,000   107,500    65,000
Estimated Additional Applications Under       40,000    72,500   115,000
 H.R. 4227
                                           -----------------------------
  Estimated Total H-1B Visa Applications     155,000   180,000   180,000
 Under H.R. 4227
------------------------------------------------------------------------

    INS Administrative Fees. The administrative fee for these 
visas is $110 each, which is paid when an application is 
submitted. This fee must be paid by H-1B applicants, by H-1B 
nonimmigrants who want to change employers, and by H-1B 
nonimmigrants who want to extend their stay in the United 
States beyond the initial period of authorization (usually 
three years). CBO estimates that almost all of the additional 
persons receiving visas under H.R. 4227 over the 2000-2002 
period would change employers or extend their stay during the 
2003-2005 period. Thus, enacting the bill would increase fees 
collected by the INS by about $4 million in fiscal year 2000 
and by $53 million over the 2000-2005 period.
    We expect that the INS would spend the fees (without 
appropriation action), mostly in the year in which they are 
collected. Thus, eliminating the cap on H-1B visas would result 
in a small net budgetary impact in each year due to increase 
collections of INS administrative fees.
    H-1B Petitioner Fees. In addition to the INS 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. Like the administrative fee, this fee must be 
paid for H-1B applicants, for H-1B nonimmigrants who want to 
change employers, and for H-1B nonimmigrants who want to extend 
their stay in the United States beyond the initial period of 
authorization. CBO estimates that the INS would collect 
additional petitioner fees of $18 million in fiscal year 2000 
and $34 million in 2001.
    The additional petitioner fees could be spent without 
further appropriation by the Department of Labor (DOL) to help 
train domestic workers for jobs in the technology sector, by 
the National Science Foundation for certain scholarship and 
science education initiatives, and by DOL and INS for 
administrative expenses. Because spending of the petitioner 
fees would lag behind the collections, CBO estimates that this 
provision would have a net negative effect on outlays in fiscal 
years 2000 and 2001, a net positive effect in 2002 through 
2004, and a net effect of zero over the 2000-2005 period.
    New Fees. In addition to the fees paid under current law, 
H.R. 4227 would impose two new fees on employers that hire H-1B 
workers, a processing fee of $200 and a compliance fee of $100, 
to be paid for H-1B applicants and for H-1B nonimmigrants who 
want to change employers. CBO expects that the INS would not be 
prepared to collect the fees until fiscal year 2001. These new 
fees would be collected from the additional visa applicants 
allowed by the bill, and from expected applicants under current 
law. CBO estimates that enacting H.R. 4227 would result in new 
fee collections of $54 million in 2001 and $229 million over 
the 2001-2005 period.
    As above, collections would be available for spending 
without further appropriation. The INS, DOL, and the Department 
of State would spend those collections to improve the operation 
of the H-1B visa program. We expect spending of these new fees 
to lag behind the collections by a few years, so this provision 
would have a net negative effect of about $10 million over the 
2000-2005 period.
    Other Effects. Allowing more H-1B workers to enter the 
United States also would increase the amount of fees collected 
by the Department of State for these visas. That fee is 
currently set at $45 per person. CBO estimates that the State 
Department would collect and spend an additional $10 million 
over the 2000-2002 period, and that 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 emergency medicaid 
services would not be significant.

                      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 H.R. 4227 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                     -18    -36     16     19      8     -1      0      0      0      0      0
Changes in receipts
                          Not applicable

----------------------------------------------------------------------------------------------------------------

        ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

    H.R. 4227 would require employers of H-1B visa holders, 
including state and local governments, to (1) pay two new fees 
(a processing fee of $200 per worker and a compliance fee of 
$100 per worker); (2) employ H-1B workers full time, for at 
least 35 hours per week; (3) pay a minimum salary of $40,000 to 
each such worker, except education and research workers; and 
(4) report specified employment information. These requirements 
would be intergovernmental mandates as defined in UMRA. 
However, based on the relatively small number of H-1B workers 
expected to be hired by state and local governments who are not 
exempted from the salary requirement, CBO estimates that the 
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

    H.R. 4227 would create several new private-sector mandates 
for businesses that hire H-1B visa holders. These mandates 
include new restrictions on H-1B holders' salaries and working 
conditions, new processing and noncompliance fees, and new 
reporting requirements. CBO estimates that the total costs of 
these mandates would exceed the annual threshold established in 
UMRA for the private sector ($109 million in 2000, adjusted 
annually for inflation). The bill would also benefit such 
businesses by easing current legal limits on the number of H-1B 
visas that may be issued over the next few years. CBO will 
provide a more detailed estimate of the impact of this 
legislation on the private sector in a separate statement.

                         PREVIOUS CBO ESTIMATE

    On April 10, 2000, CBO transmitted a cost estimate for S. 
2045, the American Competitiveness in the Twenty-First Century 
Act of 2000, as ordered reported by the Senate Committee on the 
Judiciary on March 9, 2000. That legislation would authorize 
the appropriation of $20 million annually over the 2001-2006 
period for after-school technology programs, would extend the 
$500 petitioner fee through fiscal year 2002, and would not 
establish any new fees for employers of H-1B nonimmigrants. The 
two cost estimates reflect these three major differences.

                         ESTIMATE PREPARED BY:

Federal Costs:
        INS--Mark Grabowicz (226-2860)
        NSF--Kathleen Gramp (226-2860)
        DOL--Christina Hawley Sadoti (226-2820)
        State Department--Sunita D'Monte (226-2840)
Impact on State, Local, and Tribal Governments: Shelley 
        Finlayson (225-3220)
Impact on the Private Sector: John Harris (226-2618)

                         ESTIMATE APPROVED BY:

Peter H. Fontaine
Deputy Assistant Director for Budget Analysis
                              ----------                              

                                                      June 21, 2000
H.R. 4227--Technology Worker Temporary Relief Act.

                                SUMMARY

    H.R. 4227 would create several new private-sector mandates 
for businesses that hire H-1B visa holders. H-1B workers are 
skilled foreign workers admitted temporarily to the United 
States to work for domestic employers. Those mandates include 
new restrictions on H-1B holders' salaries and working 
conditions, new processing and noncompliance fees, and new 
reporting requirements. CBO estimates that the costs of those 
mandates would exceed the annual threshold established in the 
Unfunded Mandates Reform Act (UMRA) for the private-sector 
($109 million in 2000, adjusted annually for inflation). The 
bill would, however, benefit such businesses by easing current 
legal limits on the number of H-1B visas that may be issued.

               PRIVATE-SECTOR MANDATES CONTAINED IN BILL

    H.R. 4227 would create several new private-sector mandates 
for businesses that hire H-1B visa holders. Those mandates 
would require all employers of H-1B visa holders to observe new 
restrictions on H-1B holders' salaries and working conditions, 
to pay new processing and noncompliance fees, and to comply 
with new reporting requirements. The bill would also extend a 
current mandate on ``H-1B-dependent'' employers.
    Several provisions in H.R. 4227 would modify the conditions 
under which businesses may legally hire H-1B visa holders. 
First, the bill would require employers to hire H-1B holders on 
a full-time basis only. H-1B employees would have to work for 
at least 35 hours per week. Second, the bill would require 
employers to pay all new H-1B employees wages of at least 
$40,000 per year (excluding certain education and research 
workers). Businesses seeking H-1B visa holders for positions in 
physical therapy would be required to hire persons with at 
least master's (or equivalent) degrees or state licenses.
    Other provisions in H.R. 4227 would require employers to 
pay two new fees for each petition to hire an H-1B visa holder 
that they submit to the Immigration and Naturalization Service 
(INS). Employers of current H-1B visa holders who wished to 
extend their stay and employers who hire H-1B visa holders 
currently employed by other businesses would also be required 
to pay those fees. The bill would create a new $200 processing 
fee and a new $100 compliance fee for each petition.
    H.R. 4227 would also require all employers of H-1B visa 
holders to make certain notices and certifications to the 
federal government. The bill would require businesses with less 
than $250,000 in assets to provide the government with 
documentation of their business activities when petitioning for 
permission to hire H-1B visa holders. In addition, H.R. 4227 
would require all employers to provide the Department of Labor 
with a copy of their H-1B employees' W-2 tax forms and with 
certain employee personal and employment data.
    The bill would extend a current mandate for ``H-1B-
dependent'' employers. (An H-1B-dependent employer is a 
business where at least 15 percent of the employees have H-1B 
visas.) 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 a non-H-1B 
employee from a similar position. That mandate is scheduled to 
expire on October 1, 2001, but H.R. 4227 would extend the 
mandate for an additional year.

              ESTIMATED DIRECT COST TO THE PRIVATE SECTOR

    CBO estimates that the total costs to the private sector of 
complying with the various mandates in H.R. 4227 would exceed 
the annual threshold established in UMRA for the private sector 
($109 million in 2000, adjusted annually for inflation) for 
each of the first five years following enactment. The most 
costly mandates would be the wage requirement and the new fees.
    Based on data on recent recipients of H-1B visas provided 
by the INS, CBO estimates that employers would have to spend 
over $200 million per year in order to comply with the 
requirement to pay all H-1B visa holders wages of at least 
$40,000 per year. This estimate accounts for only those H-1B 
visas that would be issued under the current statutory caps. 
CBO estimates that private-sector employers would have to pay 
over $40 million per year beginning in 2001 because of the new 
processing and noncompliance fees.
    CBO cannot estimate costs for the remaining mandates 
because there is very little available information regarding 
employers of H-1B visa holders. CBO expects, however, that the 
cost of the mandates that would require employers to make 
certain notices and disclosures to the federal government would 
be relatively small in relation to the costs of the other 
mandates. In the case of the W-2 and business activities 
mandates, businesses would not need to expend significant 
amounts of effort to gather and present the information 
required for those disclosures. CBO cannot estimate the cost of 
the mandate on employers that hire H-1B visa holders for 
positions in physical therapy because published INS data is not 
sufficiently detailed. Although UMRA is unclear about how to 
measure costs associated with extending an existing mandate 
that has not yet expired, CBO expects that the cost of 
extending the prohibition on firing current employees would be 
low because, according to government sources, there are very 
few H-1B-dependent employers.

                           BASIS OF ESTIMATE

    CBO's estimates for the costs of the private-sector 
mandates in H.R. 4227 are based primarily on data collected and 
published by the INS. Those data come from employers' petitions 
for permission to hire such workers. Those petitions contain, 
among other things, wage or salary information and the type of 
work that the H-1B visa holder would perform. Data on personal 
characteristics, including information on H-1B visa holders' 
academic and professional backgrounds, comes from the H-1B visa 
holders themselves, who are required to demonstrate their 
qualifications before they may be hired. Data on employers of 
H-1B visa holders are scarce. Employers make attestations that 
they meet eligibility requirements for participation in the H-
1B program to the Department of Labor, but those attestations 
contain very little information about employers other than 
their names.
    To estimate the direct cost of the mandate requiring 
employers to pay H-1B visa holders at least $40,000 per year, 
CBO first used information collected by the INS concerning H-1B 
visas issued from October 1999 to February 2000 to estimate the 
proportion of H-1B visa holders who earn less than $40,000 per 
year and the average amount by which those workers' earnings 
fall short of $40,000. The INS data contains information about 
salary distributions and the number of visas issued for each of 
nearly twenty broadly defined occupations. CBO used those data 
to estimate for each occupation the proportion of individuals 
earning less than $40,000 and the average amount by which those 
individuals' earnings fall short of $40,000.
    Next, CBO used the current statutory caps to estimate the 
number of H-1B visa holders in the United States for whom the 
mandate would apply for years 2001 through 2005. Last revised 
in 1998, the number of H-1B visas that may be issued for each 
year currently stand at 107,500 for 2001 and 65,000 for each 
subsequent year. Because H-1B visas are valid for three years, 
the number of H-1B visa holders for whom the mandate would 
apply would be 107,500 in 2001, but 172,500 in 2002, 237,500 in 
2003, and 195,000 in 2004 and 2005.
    Based on those figures and the INS data, CBO estimates that 
the number of H-1B visa holders earning less than $40,000 would 
be roughly 29,000 in 2001, 46,000 in 2002, 63,000 in 2003, and 
52,000 in 2004 and 2005. Further, CBO estimates that the amount 
that employers would have to spend to pay those workers at 
least $40,000 per year would be approximately $210 million in 
2001, increasing to roughly $470 million in 2003 before falling 
back to $390 million for the next two years.
    These estimates, however, are subject to a number of 
limitations. First, they are based on limited salary data for a 
single six-month period in which the INS issued 74,000 H-1B 
visas. Second, the estimates depend heavily on the estimated 
proportion of H-1B workers earning less than $40,000 and their 
estimated average earnings for each occupation. Third, CBO 
attempted to account for the bill's exemption for H-1B workers 
employed by colleges and universities, but limitations in the 
data made such accommodation difficult. Different sample 
periods and different assumptions would produce different 
results. CBO's estimates also do not take into account the 
adjustments that employers could make in response to the 
mandate. Many employers could choose to change their hiring 
practices or increase H-1B employees' wages relative to other 
compensation while leaving total compensation largely 
unchanged.
    CBO's estimates for the costs of the new processing and 
compliance fees are based on data relating to the number of H-
1B visas issued between October of 1999 and February of 2000. 
Estimates for the numbers of H-1B visa holders who extend their 
stays in the United States and who switch employers are also 
based on recent historical data. A more complete discussion of 
the collections from these fees may be found in CBO's federal 
cost estimate for H.R. 4227.

                         PREVIOUS CBO ESTIMATE

    On March 9, 2000, CBO issued an estimate for S. 2045, which 
would extend two existing private-sector mandates on employers 
of H-1B visa holders. The only mandate found in both bills is 
the extension of the requirement that prevents H-1B-dependent 
employers from firing current employees within 90 days of 
hiring an H-1B visa holder.

                         ESTIMATE PREPARED BY:

John Harris (226-2949)

                         ESTIMATE APPROVED BY:

David H. Moore
Deputy Assistant Director for
Microeconomics and Financial Studies Division

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the committee finds the authority for 
this legislation in Article 1, section 8, clause 4 of the 
Constitution.

               Section-by-Section Analysis and Discussion

Section 1. Short title; table of contents
    This Act may be cites as the ``Technology Worker Temporary 
Relief Act.''

    Title I--Numerical Limitations on H-1B Nonimmigrants; Increased 
                       Portability of H-1B Status

Section 101. Temporary increase in access to H-1B nonimmigrants
    Section 101 of the bill amends section 214(g)(1)(A) of the 
Immigration and Nationality Act to eliminate any numerical cap 
on the number of aliens who may be issued visas or otherwise 
provided ``H-1B'' nonimmigrant status under section 
101(a)(15)(H)(i)(b) during fiscal years 2000, 2001, and 2002. 
In future fiscal years, the cap will be 65,000. However, only 
those visas available under current law in 2001 and 2002 
(107,500 and 65,000, respectively) will be available to an 
employer unless it can show that with respect to the taxable 
year preceding the taxable year in which the petition is filed, 
there was a net increase (as compared with the prior tax year) 
in the median of the total wages (including cash bonuses and 
similar compensation) paid to full-time equivalent United 
States workers on the employer's payroll on the last day of the 
taxable year. United States workers are those workers defined 
in section 212(n)(4)(E) of the INA, and include citizens or 
nationals of the United States, or aliens who are lawfully 
admitted for permanent residence, admitted as refugees, granted 
asylum, or otherwise authorized to be employed. Any group 
treated as a single employer under subsections (b), (c), (m), 
or (o) of section 414 of the Internal Revenue Code of 1986 
shall be treated as a single employer. Workers shall be 
disregarded who ceased employment with an employer by reason of 
the employer's having sold, or otherwise legally transferred 
for consideration, the assets of a division or other severable 
portion of the employer's business to another person before the 
end of the employer's previous tax year.
    The elimination of the numerical cap on H-1B visas shall 
take effect on the date of enactment. The other provisions of 
this section shall take effect on October 1, 2000, without 
regard to whether or not proposed or final regulations to carry 
out such amendments have been promulgated.
Section 102. Increased portability of H-1B status
    Section 102 of the bill creates a new section 214(c)(10) of 
the INA providing that an H-1B nonimmigrant is authorized to 
accept new employment upon the filing by the prospective 
employer of a new petition on behalf of such nonimmigrant, and 
that the employment authorization shall continue for such alien 
until the new petition is adjudicated, if the nonimmigrant has 
been lawfully admitted into the United States, the new employer 
has filed a nonfrivolous petition before the date of expiration 
of the authorized period of stay, and the nonimmigrant has not 
been employed without authorization before the filing of the 
petition for new employment. This section shall apply to 
petitions filed on, or after, the date of enactment.

 Title II--New Requirements on Petitioning Employers; Petition Filing 
              Fee Reduction for Local Educational Agencies

Section 201. Minimum salary requirement
    Current law requires that an employer petitioning for an H-
1B visa must attest that it is offering and will offer during 
the period of authorized employment to the H-1B nonimmigrant 
wages that are the greater of the actual wage level paid by the 
employer to all other individuals with similar experience and 
qualifications for the specific employment in question or the 
prevailing wage level for the occupational classification in 
the area of employment. Section 201 of the bill amends section 
212(n)(1)(A) of the INA to require that the employer may not 
provide wages that are lower than the equivalent of an annual 
salary of $40,000 (including cash bonuses and similar 
compensation), unless the employment in question is as a public 
or private elementary or secondary school teacher or if the 
employer is an institution of higher education (as defined in 
section 101(a) of the Higher Education Act of 1965) or a 
related or affiliated nonprofit entity, a nonprofit research 
organization, or a governmental research organization. The 
$40,000 minimum salary is indexed for inflation.
Section 202. Submission of data on H-1B nonimmigrants after employment 
        commencement
    Section 202 of the bill creates a new section 212(n)(1)(H) 
of the INA to require that an employer electronically submit to 
the Secretary of Labor, not later than 30 days after the date 
on which an H-1B nonimmigrant commences employment with the 
employer, data in an electronic format containing information 
about the nonimmigrant, including the foreign state of which 
the nonimmigrant is a citizen or national, the academic degrees 
obtained by the nonimmigrant, the nonimmigrant's job title, the 
date on which employment commenced, and the nonimmigrant's 
salary or wage level. Not later than 30 days after the receipt 
of data from the employer, the Secretary shall make such data 
available on the Internet.
Section 203. Fee to enable more efficient paperwork processing
    Section 203 of the bill creates a new section 214(c)(11) of 
the INA imposing a $200 processing fee on an employer filing a 
petition to initially grant an alien H-1B nonimmigrant status 
or to obtain authorization for an alien having such status to 
change employers. A new section 286(t) of the INA is added 
creating an ``H-1B Processing Fee'' account in the general fund 
of the Treasury into which shall be deposited as offsetting 
receipts all fees collected. Fifty percent of the amounts 
deposited in the account shall remain available to the Attorney 
General until expended to process more expeditiously H-1B 
petitions. The other 50% of the amounts deposited shall remain 
available to the Secretary of Labor until expended for 
decreasing the Labor Department's processing time for H-1B 
applications and for carrying out the Department's 
responsibilities to investigate complaints regarding employers' 
noncompliance with the requirements of the H-1B program.
Section 204. Qualifications for physical therapists
    Section 204 of the bill amends section 214(i)(2)(B) of the 
INA, requiring that aliens seeking to be H-1B nonimmigrants to 
perform services as physical therapists must have completed a 
degree recognized by a body or bodies approved for the purpose 
by the Secretary of Education as equivalent or more than 
equivalent to the education and training received by a person 
completing a master's degree from an accredited program of 
physical therapy in the United States. This amendment shall not 
apply to an alien who has full State licensure to practice in 
the occupation of physical therapist before the date of 
enactment.
Section 205. Reduction of petition filing fee for local educational 
        agencies
    Section 205 of the bill amends section 214(c)(9)(B) of the 
INA to provide that employers who are local educational 
agencies (as defined in section 14101 of the Elementary and 
Secondary Education Act of 1965) should only pay a $100 fee per 
petition for scholarships and job training, and not the $500 
required of other employers.
Section 206. Effective date
    Section 206 of the bill provides that, subject to section 
204(b), the amendments made by title II shall take effect on 
the date of enactment and shall apply to H-1B petitions and 
applications filed on or after October 1, 2000.

       Title III--Noncompliance Provisions for H-1B Nonimmigrants

Section 301. Requiring specialty occupation workers and fashion models 
        to obtain status as an H-1B nonimmigrant
    Section 301 of the bill creates a new section 214(g)(6) of 
the INA requiring that any alien admitted or provided status as 
a nonimmigrant in order to provide services in a specialty 
occupation described in section 214(i)(1) of the INA or as a 
fashion model have been issued a visa or otherwise been 
provided nonimmigrant status under the H-1B program (except if 
the alien has been issued a visas or otherwise provided 
nonimmigrant status under the ``H-2A'', ``O'', or ``P'' visa 
programs). This provision shall not be construed to affect the 
granting of nonimmigrant status under section 101(a)(15)(L) of 
the INA. This provision does not alter the current operation of 
the L visa program in any way.
Section 302. Requiring full-time employment
    Section 302 of the bill amends section 101(a)(15)(H)(i)(b) 
of the INA to require that H-1B nonimmigrants must be coming to 
the United States to perform services not less than 35 hours 
per week (unless the employer is an institution of higher 
education as defined in section 101(a) of the Higher Education 
Act of 1965 or a related or affiliated nonprofit entity).
Section 303. Requirements for specialty occupation
    Section 303 of the bill amends section 214(i) of the INA to 
provide that the specialty occupation in which an H-1B 
nonimmigrant will work must require attainment of a bachelor's 
degree (or higher degree) in the specific specialty (or an 
equivalent foreign degree) as a minimum for entry into the 
occupation in the United States. Under current law, work 
experience can be substituted for the attainment of such a 
degree. Section 303 also provides that an alien who completes a 
bachelor's degree (or higher degree), but not one in the 
specific specialty in which he or she will work, can still 
perform services in that specific specialty under the H-1B 
program if the alien has experience in the specialty equivalent 
to the completion of a degree in the specialty and recognition 
of expertise in the speciality through progressively 
responsible positions relating to the specialty.
Section 304. Noncompliance fee
    Section 304 of the bill creates a new section 214(c)(12) of 
the INA imposing a $100 noncompliance fee on an employer filing 
a petition to initially grant an alien H-1B nonimmigrant status 
or to obtain authorization for an alien having such status to 
change employers. A new section 286(u) of the INA is added 
creating an ``H-1B Noncompliance'' account in the general fund 
of the Treasury into which shall be deposited as offsetting 
receipts all fees that are collected. Twenty percent of the 
amounts deposited in the account shall remain available to the 
Attorney General until expended for programs and activities to 
eliminate fraud by employers filing H-1B petitions and aliens 
who are the beneficiaries of such petitions, and 20% shall 
remain available to the Attorney General until expended for the 
removal of H-1B nonimmigrants who are deportable under section 
237(a)(1)(A) of the INA by reason of having been found to be 
within the class of aliens inadmissible under section 
212(a)(6)(C) of the INA for having, among other things, 
procured a visa by fraud or willfully misrepresented a material 
fact. Forty percent of the amounts deposited in the account 
shall remain available to the Secretary of State until expended 
for programs and activities to eliminate fraud by employers and 
aliens. Twenty percent of the amounts deposited in the account 
shall remain available to the Attorney General and the 
Secretary of State until expended for programs and activities 
conducted by them jointly to eliminate fraud by employers and 
aliens.
Section 305. Additional requirements on petitioning employers
    Section 305 of the bill creates a new section 214(c)(13) of 
the INA providing that the Attorney General may not approve any 
H-1B petition unless the employer maintains a place of business 
in the United States that is licensed in accordance with any 
applicable State or local business licensing requirements and 
is used exclusively for business purposes (unless the employer 
is an institution of higher education (as defined in section 
101(a) of the Higher Education Act of 1965), or a governmental 
or nonprofit entity). In addition, the Attorney General may not 
approve any H-1B petition unless the employer has aggregate 
gross assets with a value of not less than $250,000, or 
provides documentation of business activity pursuant to 
regulations promulgated by the Attorney General (unless the 
employer is a governmental entity). Whether a business has 
assets of $250,000 or greater is determined using its most 
recent report filed with the Securities and Exchange Commission 
if it is publically held. If it is not publically held, this 
will be determined by regulations promulgated by the Attorney 
General.
Section 306. Requiring filing of W-2 forms
    Section 306 of the bill adds a new section 212(n)(1)(I) of 
the INA providing that an employer must, with respect to each 
H-1B worker, annually submit to the Secretary of Labor a copy 
of the most recent ``W-2'' wage withholding statement, by 
electronic means if preferred. This amendment applies to H-1B 
applications filed on or after October 1, 2000, but only with 
respect to W-2 statements made on or after January 1, 2001.
Section 307. Effective date
    Section 307 of the bill provides that except for the 
amendment made by section 306, the amendments made by title III 
shall apply to H-1B petitions and application filed on or after 
the date on which final regulations are issued to carry out 
such amendments.

Title IV--Extension of Provisions from the American Competitiveness and 
                   Workforce Improvement Act of 1998

Section 401. Protection against displacement of United States workers 
        in case of H-1B dependent employers
    Section 212(n)(1)(E)-(G) of the INA provides that H-1B 
dependent employers (generally, employers 15% or more of whose 
workforces are composed of H-1B nonimmigrants) and employers 
who have been found to have committed a wilful violation of the 
H-1B program must make certain attestations if they apply for 
H-1B visas for aliens who will be ``non-exempt'' H-1B 
nonimmigrants. These requirements apply to H-1B applications 
filed before October 1, 2001. Section 401 of the bill extends 
the applicability of these requirements to applications filed 
before October 1, 2002.
Section 402. Additional investigative authority
    Section 212(n)(2)(G) of the INA provides authority for the 
Secretary of Labor to investigate certain allegations that an 
employer is violating the terms of the H-1B program even though 
the allegations do not come from an aggrieved person or 
organization. The authority ceases to be effective on September 
30, 2001. Section 402 of the bill extends the authority through 
September 30, 2002.
Section 403. Requirement to issue regulations
    Section 403 of the bill requires that the Secretary of 
Labor promulgate final regulations fully implementing all 
provisions of ACWIA. The regulations must take effect on or 
before September 1, 2000.

                      Title V--Studies and Reports

Section 501. Studies and reports by the General Accounting Office
    Section 501 of the bill provides that the Comptroller 
General of the United States shall conduct a study on the 
measures that employers using the H-1B program have taken to 
recruit, for the jobs for which H-1B nonimmigrants are sought, 
qualified United States workers who are members of 
underrepresented groups, including African-Americans, 
Hispanics, females, and individuals with a disability. The 
study shall include an examination of the extent to which these 
employers recruit at institutions of higher education with 
substantial numbers of students who are a member of an 
underrepresented group and at historically black colleges and 
universities, community colleges, and vocational and technical 
colleges, and the extent to which they advertise in 
publications reaching members of underrepresented groups. Not 
later than December 31, 2000, the Comptroller General shall 
submit to the Committees on the Judiciary of the United States 
House of Representatives and of the Senate a report containing 
the results of the study. If the Comptroller General determines 
that modifications to the H-1B program are appropriate in order 
to increase recruitment by employers of members of 
underrepresented groups, the Comptroller General shall include 
such recommendations in the report.
    Section 501 also provides that the Comptroller General 
shall conduct a study on the measures that employers using the 
H-1B program have continually taken to train and update the 
existing skills of incumbent employees, and to promote such 
employees where possible. Not later than December 31, 2000, the 
Comptroller General shall submit to the Committees on the 
Judiciary of the United States House of Representatives and of 
the Senate a report containing the results of the study.
    Section 501 also provides that the Comptroller General 
shall conduct a study to determine the degree of compliance by 
the Attorney General with the requirements of section 416 of 
ACWIA requiring the Attorney General to maintain an accurate 
count of the number of aliens who are issued H-1B visas or 
otherwise provided H-1B nonimmigrant status and to provide the 
Committees of the Judiciary of the United States House of 
Representatives and the Senate with specified information on 
the use of the H-1B program and on H-1B nonimmigrants and 
employers. Not later than December 31, 2000, the Comptroller 
General shall submit to the Committees on the Judiciary of the 
United States House of Representatives and of the Senate a 
report containing the results of the study.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                    IMMIGRATION AND NATIONALITY ACT

           *       *       *       *       *       *       *

                           TITLE I--GENERAL

           *       *       *       *       *       *       *

                              definitions

    Section 101. (a) As used in this Act--
    (1)  * * *

           *       *       *       *       *       *       *

    (15) The term ``immigrant'' means every alien except an 
alien who is within one of the following classes of 
nonimmigrant aliens--
            (A)  * * *

           *       *       *       *       *       *       *

            (H) an alien (i)(b) subject to section 212(j)(2), 
        who is coming temporarily to the United States to 
        perform services (other than services described in 
        subclause (a) during the period in which such subclause 
        applies and other than services described in subclause 
        (ii)(a) or in subparagraph (O) [or (P))] or (P)), not 
        less than 35 hours per week (except if the employer is 
        an institution of higher education (as defined in 
        section 101(a) of the Higher Education Act of 1965) or 
        a related or affiliated nonprofit entity), in a 
        specialty occupation described in section 214(i)(1) or 
        as a fashion model, who meets the requirements for the 
        occupation specified in section 214(i)(2) or, in the 
        case of a fashion model, is of distinguished merit and 
        ability, and with respect to whom the Secretary of 
        Labor determines and certifies to the Attorney General 
        that the intending employer has filed with the 
        Secretary an application under section 212(n)(1), or 
        (c) who is coming temporarily to the United States to 
        perform services as a registered nurse, who meets the 
        qualifications described in section 212(m)(1), and with 
        respect to whom the Secretary of Labor determines and 
        certifies to the Attorney General that an unexpired 
        attestation is on file and in effect under section 
        212(m)(2) for the facility (as defined in section 
        212(m)(6)) for which the alien will perform the 
        services; or (ii)(a) having a residence in a foreign 
        country which he has no intention of abandoning who is 
        coming temporarily to the United States to perform 
        agricultural labor or services, as defined by the 
        Secretary of Labor in regulations and including 
        agricultural labor defined in section 3121(g) of the 
        Internal Revenue Code of 1954 and agriculture as 
        defined in section 3(f) of the Fair Labor Standards Act 
        of 1938 (29 U.S.C. 203(f)), of a temporary or seasonal 
        nature, or (b) having a residence in a foreign country 
        which he has no intention of abandoning who is coming 
        temporarily to the United States to perform other 
        temporary service or labor if unemployed persons 
        capable of performing such service or labor cannot be 
        found in this country, but this clause shall not apply 
        to graduates of medical schools coming to the United 
        States to perform services as members of the medical 
        profession; or (iii) having a residence in a foreign 
        country which he has no intention of abandoning who is 
        coming temporarily to the United States as a trainee, 
        other than to receive graduate medical education or 
        training, in a training program that is not designed 
        primarily to provide productive employment; and the 
        alien spouse and minor children of any such alien 
        specified in this paragraph if accompanying him or 
        following to join him;

           *       *       *       *       *       *       *

                        TITLE II--IMMIGRATION

           *       *       *       *       *       *       *

 Chapter 2--Qualifications for Admission of Aliens; Travel Control of 
Citizens and Aliens

           *       *       *       *       *       *       *

 general classes of aliens ineligible to receive visas and ineligible 
               for admission; waivers of inadmissibility

      Sec. 212. (a)  * * *

           *       *       *       *       *       *       *

      (n)(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--
                    (i) is offering and will offer during the 
                period of authorized employment to aliens 
                admitted or provided status as an H-1B 
                nonimmigrant 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 as of the time of filing 
                the application, [and]
                    (ii) is offering and will offer during the 
                period of authorized employment to H-1B 
                nonimmigrants wages that are at least equal to 
                an annual salary of $40,000 (including cash 
                bonuses and similar compensation), except if 
                the employment in question is as a public or 
                private elementary or secondary school teacher 
                or if the employer is an institution of higher 
                education (as defined in section 101(a) of the 
                Higher Education Act of 1965) or a related or 
                affiliated nonprofit entity, a nonprofit 
                research organization, or a governmental 
                research organization; and
                    [(ii)] (iii) will provide working 
                conditions for such a nonimmigrant that will 
                not adversely affect the working conditions of 
                workers similarly employed.

           *       *       *       *       *       *       *

            (E)(i)  * * *
            (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] 2002, by an 
        H-1B-dependent employer (as defined in paragraph (3)) 
        or by an employer that has been found, on or after the 
        date of the enactment of the American Competitiveness 
        and Workforce Improvement Act of 1998, under paragraph 
        (2)(C) or (5) to have committed a willful failure or 
        misrepresentation 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.

           *       *       *       *       *       *       *

            (H) The employer will electronically submit to the 
        Secretary, not later than 30 days after the date on 
        which an H-1B nonimmigrant commences employment with 
        the employer, data in an electronic format containing 
        information about the nonimmigrant, including the 
        following:
                    (i) The foreign state of which the 
                nonimmigrant is a citizen or national.
                    (ii) The academic degrees obtained by the 
                nonimmigrant.
                    (iii) The nonimmigrant's job title.
                    (iv) The date on which employment 
                commenced.
                    (v) The nonimmigrant's salary or wage 
                level.
            (I) The employer will, with respect to each 
        employee who is an H-1B nonimmigrant, annually submit 
        to the Secretary of Labor a copy of the most recent 
        statement under section 6051 of the Internal Revenue 
        Code of 1986. Such submission may be made by electronic 
        means.

           *       *       *       *       *       *       *

      (2)(A)  * * *

           *       *       *       *       *       *       *

    (C)(i)  * * *

           *       *       *       *       *       *       *

    (vii)(I) It is a failure to meet a condition of paragraph 
(1)(A) for an employer, who has filed an application under this 
subsection and who places an H-1B nonimmigrant designated as [a 
full-time] an employee on the petition filed under section 
214(c)(1) by the employer with respect to the nonimmigrant, 
after the nonimmigrant has entered into employment with the 
employer, in nonproductive status due to a decision by the 
employer (based on factors such as lack of work), or due to the 
nonimmigrant's lack of a permit or license, to fail to pay the 
nonimmigrant full-time wages in accordance with paragraph 
(1)(A) for all such nonproductive time.
    [(II) It is a failure to meet a condition of paragraph 
(1)(A) for an employer, who has filed an application under this 
subsection and who places an H-1B nonimmigrant designated as a 
part-time employee on the petition filed under section 
214(c)(1) by the employer with respect to the nonimmigrant, 
after the nonimmigrant has entered into employment with the 
employer, in nonproductive status under circumstances described 
in subclause (I), to fail to pay such a nonimmigrant for such 
hours as are designated on such petition consistent with the 
rate of pay identified on such petition.]
    [(III)] (II) In the case of an H-1B nonimmigrant who has 
not yet entered into employment with an employer who has had 
approved an application under this subsection, and a petition 
under section 214(c)(1), with respect to the nonimmigrant, the 
provisions of [subclauses (I) and (II)] subclause (I) shall 
apply to the employer beginning 30 days after the date the 
nonimmigrant first is admitted into the United States pursuant 
to the petition, or 60 days after the date the nonimmigrant 
becomes eligible to work for the employer (in the case of a 
nonimmigrant who is present in the United States on the date of 
the approval of the petition).
    [(IV)] (III) This clause does not apply to a failure to pay 
wages to an H-1B nonimmigrant for nonproductive time due to 
non-work-related factors, such as the voluntary request of the 
nonimmigrant for an absence or circumstances rendering the 
nonimmigrant unable to work.
    [(V)] (IV) This clause shall not be construed as 
prohibiting an employer that is a school or other educational 
institution from applying to an H-1B nonimmigrant an 
established salary practice of the employer, under which the 
employer pays to H-1B nonimmigrants and United States workers 
in the same occupational classification an annual salary in 
disbursements over fewer than 12 months, if--
            (aa) the nonimmigrant agrees to the compressed 
        annual salary payments prior to the commencement of the 
        employment; and
            (bb) the application of the salary practice to the 
        nonimmigrant does not otherwise cause the nonimmigrant 
        to violate any condition of the nonimmigrant's 
        authorization under this Act to remain in the United 
        States.
    [(VI)] (V) This clause shall not be construed as 
superseding clause (viii).

           *       *       *       *       *       *       *

    (6) For purposes of paragraph (1)(A)(ii), in the case of 
any fiscal year beginning in a calendar year after 2000, the 
dollar amount contained in such paragraph shall be increased by 
an amount equal to--
            (A) the dollar amount; multiplied by
            (B) the cost-of-living adjustment determined under 
        section 1(f)(3) of the Internal Revenue Code of 1986 
        for the calendar year in which the fiscal year begins 
        by substituting ``calendar year 1999'' for ``calendar 
        year 1992'' in subparagraph (B) of such section.

           *       *       *       *       *       *       *

                       admission of nonimmigrants

      Sec. 214. (a)  * * *

           *       *       *       *       *       *       *

      (c)(1)  * * *

           *       *       *       *       *       *       *

    (9)(A)  * * *

           *       *       *       *       *       *       *

    (B) The amount of the fee shall be $500 for each such 
[petition.] petition, except that the amount of the fee shall 
be $100 for an employer that is a local educational agency (as 
defined in section 14101 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 8801)).

           *       *       *       *       *       *       *

    (10)(A) A nonimmigrant alien described in subparagraph (B) 
who was issued a visa (or otherwise provided nonimmigrant 
status) under section 101(a)(15)(H)(i)(b) may change employers 
upon the filing by the prospective employer of a petition under 
paragraph (1) on behalf of the alien to obtain authorization 
for the change. Employment authorization shall continue for 
such alien until such petition is adjudicated. If the petition 
is denied, such employment authorization shall cease.
    (B) A nonimmigrant alien described in this subparagraph is 
a nonimmigrant alien--
            (i) who has been lawfully admitted into the United 
        States;
            (ii) on whose behalf an employer has filed a 
        nonfrivolous petition described in subparagraph (A) 
        before the date of the expiration of the period of stay 
        authorized by the Attorney General for the alien; and
            (iii) who, subsequent to such lawful admission, has 
        not been employed without authorization in the United 
        States before the filing of such petition.
    (11)(A) In addition to any other fees authorized by law, 
the Attorney General shall impose a processing fee on an 
employer filing a petition under paragraph (1)--
            (i) initially to grant an alien nonimmigrant status 
        described in section 101(a)(15)(H)(i)(b); or
            (ii) to obtain authorization for an alien having 
        such status to change employers.
    (B) The amount of the fee shall be $200 for each such 
petition.
    (C) Fees collected under this paragraph shall be deposited 
in the Treasury in accordance with section 286(t).
    (12)(A) In addition to any other fees authorized by law, 
the Attorney General shall impose a noncompliance fee on an 
employer filing a petition under paragraph (1)--
            (i) initially to grant an alien nonimmigrant status 
        described in section 101(a)(15)(H)(i)(b); or
            (ii) to obtain authorization for an alien having 
        such status to change employers.
    (B) The amount of the fee shall be $100 for each such 
petition.
    (C) Fees collected under this paragraph shall be deposited 
in the Treasury in accordance with section 286(u).
    (13) The Attorney General may not approve any petition 
under paragraph (1) filed by an employer with respect to an 
alien seeking to obtain or having the status of a nonimmigrant 
under section 101(a)(15)(H)(i)(b) unless the employer satisfies 
the following requirements:
            (A) The employer--
                    (i) is an institution of higher education 
                (as defined in section 101(a) of the Higher 
                Education Act of 1965), or a governmental or 
                nonprofit entity; or
                    (ii) maintains a place of business in the 
                United States that is licensed in accordance 
                with any applicable State or local business 
                licensing requirements and is used exclusively 
                for business purposes.
            (B) The employer--
                    (i) is a governmental entity;
                    (ii) has aggregate gross assets with a 
                value of not less than $250,000--
                            (I) in the case of an employer that 
                        is a publicly held corporation, as 
                        determined using its most recent report 
                        filed with the Securities and Exchange 
                        Commission; or
                            (II) in the case of any other 
                        employer, as determined as of the date 
                        on which the petition is filed pursuant 
                        to regulations promulgated by the 
                        Attorney General; or
                    (iii) provides documentation of business 
                activity pursuant to regulations promulgated by 
                the Attorney General.

           *       *       *       *       *       *       *

      (g)(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)--
            [(A) under section 101(a)(15)(H)(i)(b), may not 
        exceed--
                    [(i) 65,000 in each fiscal year before 
                fiscal year 1999;
                    [(ii) 115,000 in fiscal year 1999;
                    [(iii) 115,000 in fiscal year 2000;
                    [(iv) 107,500 in fiscal year 2001; and
                    [(v) 65,000 in each succeeding fiscal year; 
                or]
            (A) under section 101(a)(15)(H)(i)(b), may not 
        exceed--
                    (i) subject to paragraph (5), 107,500 in 
                fiscal year 2001;
                    (ii) subject to paragraph (5), 65,000 in 
                fiscal year 2002; and
                    (iii) 65,000 in each succeeding fiscal 
                year; or

           *       *       *       *       *       *       *

    (5)(A) The numerical limitations in clauses (i) and (ii) of 
paragraph (1)(A) shall not apply to an alien described in 
subparagraph (B).
    (B) An alien is described in this subparagraph if--
            (i) the alien, disregarding clauses (i) and (ii) of 
        paragraph (1)(A), otherwise is eligible to be issued a 
        visa or provided nonimmigrant status under section 
        101(a)(15)(H)(i)(b); and
            (ii) the employer petitioning under subsection 
        (c)(1) with respect to the alien demonstrates in the 
        petition that, with respect to the taxable year 
        preceding the taxable year in which the petition is 
        filed, there was a net increase (as compared with the 
        taxable year prior to such preceding taxable year) in 
        the median of the total wages (including cash bonuses 
        and similar compensation) paid to full-time equivalent 
        United States workers (as defined in section 
        212(n)(4)(E)) who are on the employer's payroll on the 
        last day of the taxable year.
    (C) In making the determination under subparagraph 
(B)(ii)--
            (i) any group treated as a single employer under 
        subsection (b), (c), (m), or (o) of section 414 of the 
        Internal Revenue Code of 1986 shall be treated as a 
        single employer; and
            (ii) the Attorney General shall disregard workers 
        who ceased employment with an employer by reason of the 
        employer's having sold, or otherwise legally 
        transferred for consideration, the assets of a division 
        or other severable portion of the employer's business 
        to another person before the end of the employer's 
        previous tax year.
    (6) Notwithstanding any other provision of this Act, any 
alien admitted or provided status as a nonimmigrant in order to 
provide services in a specialty occupation described in 
subsection (i)(1) (other than services described in 
subparagraph (H)(ii)(a), (O), or (P) of section 101(a)(15)) or 
as a fashion model shall have been issued a visa (or otherwise 
been provided nonimmigrant status) under section 
101(a)(15)(H)(i)(b).

           *       *       *       *       *       *       *

      (i)(1) For purposes of section 101(a)(15)(H)(i)(b) and 
paragraph (2), 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.]
            (B) attainment of a bachelor's degree (or higher 
        degree) in the specific specialty as a minimum for 
        entry into the occupation in the United States.
      (2)(A) For purposes of section 101(a)(15)(H)(i)(b), the 
requirements of this paragraph, with respect to a specialty 
occupation, are--
            [(A)] (i) full state licensure to practice in the 
        occupation, if such licensure is required to practice 
        in the occupation,
            [(B)] (ii) completion of the degree described in 
        paragraph (1)(B) for the occupation, or
            [(C)(i) experience in the specialty equivalent to 
        the completion of such degree, and (ii) recognition of 
        expertise in the specialty through progressively 
        responsible positions relating to the specialty.]
            (iii)(I) completion of a bachelor's degree (or 
        higher degree) that is not described in paragraph 
        (1)(B), (II) experience in the specialty equivalent to 
        the completion of the degree described in paragraph 
        (1)(B) for the occupation, and (III) recognition of 
        expertise in the specialty through progressively 
        responsible positions relating to the specialty.
    (B) In the case of a position in a specialty occupation 
that requires an alien to perform services as a physical 
therapist, the requirements of this paragraph also include a 
requirement that the alien have completed a degree recognized 
by body or bodies approved for the purpose by the Secretary of 
Education as equivalent (or more than equivalent) to the 
education and training received by a person completing a 
master's degree from an accredited program of physical therapy 
in the United States.
    (3) For purposes of this subsection, the term ``bachelor's 
degree (or higher degree)'' includes a foreign degree that is a 
recognized foreign equivalent of a bachelor's degree (or higher 
degree).

           *       *       *       *       *       *       *

                       Chapter 9--Miscellaneous

           *       *       *       *       *       *       *

   disposition of moneys collected under the provisions of this title

    Sec. 286. (a)  * * *

           *       *       *       *       *       *       *

    (t) H-1B Processing Fee 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 Processing Fee Account''. 
        Notwithstanding any other provision of law, there shall 
        be deposited as offsetting receipts into the account 
        all fees collected under section 214(c)(11).
            (2) Use of fees.--50 percent of the amounts 
        deposited into the H-1B Processing Fee Account shall 
        remain available to the Attorney General until expended 
        to carry out duties under section 214(c)(1) related to 
        petitions made for nonimmigrants described in section 
        101(a)(15)(H)(i)(b) and to decrease the processing time 
        for such petitions. 50 percent of the amounts deposited 
        into the account shall remain available to the 
        Secretary of Labor until expended for decreasing the 
        processing time for applications under section 
        212(n)(1) and for carrying out section 212(n)(2).
    (u) H-1B Noncompliance 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 Noncompliance Account''. 
        Notwithstanding any other provision of law, there shall 
        be deposited as offsetting receipts into the account 
        all fees collected under section 214(c)(12).
            (2) Use of fees to combat fraud.--
                    (A) Attorney general.--
                            (i) Programs to eliminate fraud.--
                        20 percent of amounts deposited into 
                        the H-1B Noncompliance Account shall 
                        remain available to the Attorney 
                        General until expended for programs and 
                        activities to eliminate fraud by 
                        employers filing petitions under 
                        section 214(c)(1) with respect to 
                        status under section 
                        101(a)(15)(H)(i)(b) and aliens who are 
                        the beneficiaries of such petitions.
                            (ii) Removal of aliens.--20 percent 
                        of amounts deposited into the H-1B 
                        Noncompliance Account shall remain 
                        available to the Attorney General until 
                        expended for the removal of H-1B 
                        nonimmigrants (as defined in section 
                        212(n)(4)(C)) who are deportable under 
                        section 237(a)(1)(A) by reason of 
                        having been found to be within the 
                        class of aliens inadmissible under 
                        section 212(a)(6)(C).
                    (B) Secretary of state.--40 percent of 
                amounts deposited into the H-1B Noncompliance 
                Account shall remain available to the Secretary 
                of State until expended for programs and 
                activities to eliminate fraud by employers and 
                aliens described in subparagraph (A).
                    (C) Joint programs.--20 percent of amounts 
                deposited into the H-1B Noncompliance Account 
                shall remain available to the Attorney General 
                and the Secretary of State until expended for 
                programs and activities conducted by them 
                jointly to eliminate fraud by employers and 
                aliens described in subparagraph (A).

           *       *       *       *       *       *       *

                              ----------                              

 SECTION 413 OF THE AMERICAN COMPETITIVENESS AND WORKFORCE IMPROVEMENT 
                              ACT OF 1998

SEC. 413. CHANGES IN ENFORCEMENT AND PENALTIES.

    (a)  * * *

           *       *       *       *       *       *       *

    (e) Additional Investigative Authority.--
            (1)  * * *
            (2) Sunset.--The amendment made by paragraph (1) 
        shall cease to be effective on September 30, [2001] 
        2002.

           *       *       *       *       *       *       *

                            Dissenting Views

    We strongly dissent from H.R. 4227, the ``Technology Worker 
Temporary Relief Act,'' which we believe constitutes a 
dangerous step backward in our immigration policy. In trying to 
balance the needs of the high-tech community and American 
workers, the bill does a disservice to both groups. With regard 
to protecting U.S. workers, H.R. 4227 does not provide any 
funds to re-train U.S. workers or to educate America's children 
to take on the jobs of the 21st century's new economy. As for 
the high-technology industry's need to meet a short-term labor 
shortage, H.R. 4227 imposes significant new restrictions that 
make it far more difficult for American employers to utilize 
the H-1B program. The bill also fails to take any action to 
address the very important issue of permanent visas for highly 
skilled and long-time immigrants and their families.
    H.R. 4227 does not have the support of the administration, 
which has brought forward a far more promising legislative 
proposal.\1\ In addition, the committee-reported legislation is 
either outright opposed by, or lacking in support from, a wide 
range of groups and companies with an interest in H-1B and 
immigration policy. These include American Business for Legal 
Immigration (``ABLI'');\2\ Computer and Communications Industry 
Association;\3\ American Immigration Lawyers Association;\4\ 
Lutheran Immigration and Refugee Service;\5\ Empower 
America;\6\ National Conference of Catholic Bishops;\7\ 
National Council of La Raza;\8\ and National Immigration 
Forum.\9\ The AFL-CIO is also opposed to H.R. 4227.\10\
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    \1\ See H-1B Visa Proposal of President Clinton attached to letter 
from Gene Sperling, Director, National Economic Council and Assistant 
to the President for Economic Policy, to Rep. John Conyers, Jr., House 
Judiciary Committee (May 11, 2000) (hereinafter, ``Administration 
Proposal''). The President's proposal contains five key objectives: (1) 
raising the cap on H-1B visas for FY2001-2003 to 200,000 visas per 
year; (2) dedicating 40%, 45% and 50% of the H-1B visas in FY2001, 2002 
and 2003, respectively, to highly educated workers; (3) increasing the 
fee from $500 to $2,000 per application for most employers and $3,000 
per application for ``H-1B Dependent'' employers; (4) allocating the 
vast majority of additional revenue to the Labor Department and the 
National Science Foundation for the education and training of U.S. 
workers; and (5) providing equitable treatment for certain Central 
Americans and Haitians residing in the United States and updating the 
Registry Date to provide permanent resident status to long-time 
immigrants of the United States. The Administration Proposal is similar 
in many respects to H.R. 3983, ``Helping to Improve Technology 
Education and Achievement Act of 2000,'' introduced by Reps. David 
Dreier (R-CA) and Zoe Lofgren (D-CA), and discussed below.
    \2\ ``Employer Groups Call Smith Technology Worker Bill 
Insufficient and Shortsighted,'' ABLI News Release (undated) 
(expressing their ``disappointment'' and ``dissatisfaction'' with H.R. 
4227). ABLI is a wide ranging coalition, including American Electronics 
Assoc., Biotechnology Industry Organization, Business Roundtable, 
Compaq Computer Corp., Computer and Communications Industry Assoc., 
Dell Computer Corp., Electronic Industries Alliance, Hewlett-Packard, 
IBM, Information Technology Assoc. of America, Intel Corp., Microsoft 
Corp., Motorola, Oracle Corp., Semiconductor Equipment and Materials 
International, Semiconductor Industry Assoc., Sun Microsystems, 
Technology Workforce Coalition, Telecommunications Industry Assoc., 
Texas Instruments and U.S. Chamber of Commerce.
    \3\ Letter from Ed Black, President and CEO of the Computer and 
Communications Industry Assoc., to the Hon. J. Dennis Hastert (June 6, 
2000) (hereinafter, ``CCIA Letter'').
    \4\ Letter from Jeanne Butterfield, Executive Director of the 
American Immigration Lawyers Assoc., to Members of Congress (May 10, 
2000).
    \5\ Letter from Merrill Smith, Washington Representative of the 
Lutheran Immigration and Refugee Service, to Members of Congress (May 
5, 2000).
    \6\ H-1B Plus and Immigration Reform, Statement of Jack Kemp, 
Empower America (May 16, 2000).
    \7\ Letter from The Most Reverend Nicholas DiMarzio, Chairman of 
the National Conference of Catholic Bishops' Committee on Migration, to 
Senators (May 3, 2000).
    \8\ Letter from Raul Yzaguirre, President and CEO of National 
Council of La Raza, to Senators and U.S. Representatives (Apr. 27, 
2000).
    \9\ Letter from Frank Sharry, National Immigration Forum, to 
Members of Congress (May 2, 2000).
    \10\ Letter from Peggy Taylor, Director, AFL-CIO's Department of 
Legislation, to Chairman Henry Hyde, House Judiciary Committee (May 9, 
2000) (H.R. 4227 ``lacks critical components of constructive H-1B 
reform''). AFL-CIO has not expressed its support for any H1-B 
legislation.
---------------------------------------------------------------------------
    Under current law, H-1B visas (available for a 3-year 
period and subject to an extension of up to 6 years) are 
available for workers coming temporarily to the United States 
to perform services in ``specialty occupations.'' \11\ H-1B 
specialty occupations require both theoretical and practical 
application of a body of ``highly specialized knowledge'' \12\ 
and attainment of a bachelor's degree or higher degree in the 
specific specialty, or its equivalent through work 
experience.\13\ In 1998, Congress increased the number of H-1B 
visas available from 65,000 to 115,000 visas per year.\14\ 
Pursuant to the 1998 law, employers pay a $500 fee for each H-
1B worker they sponsor, which principally goes to the Labor 
Department for job training and the National Science Foundation 
for scholarships and grants.\15\ (An additional $110 filing fee 
goes to the INS for administration of the H-1B program.\16\) 
Employers wishing to sponsor an H-1B employee must attest that 
(i) they will pay the nonimmigrant the prevailing compensation 
for that occupation; (ii) they will provide conditions for the 
nonimmigrant that do not cause the working conditions of other 
employees to be adversely affected; and (iii) there is no 
strike or lockout.\17\ In addition, so-called ``H-1B dependent 
employers'' (companies whose workforce includes at least 15% H-
1B workers) must attest that they have attempted to recruit 
U.S. workers and that they have not laid off U.S. workers 90 
days prior to or after hiring any H-1B worker.\18\
---------------------------------------------------------------------------
    \11\ 8 U.S.C. Sec. 1101(a)(15)(H)(i)(B).
    \12\ For a position to qualify as a specialty occupation, it must 
be in the ``theoretical and practical application of a body of highly 
specialized knowledge in fields of human endeavor including, but not 
limited to, architecture, engineering, mathematics, physical sciences, 
social sciences, medicine and health, education, business specialties, 
accounting, law, theology and the arts.'' 8 C.F.R. Sec. 214.2(h).
    \13\ Currently, foreign workers must show at least 12 years of 
related professional experience to document equivalence to a bachelor's 
degree.
    \14\ Pub.L. 105-277 (Oct 21, 1998). The new 115,000 H-1B visa 
ceiling was reached months before FY 1999 ended and the FY 2000 ceiling 
was reached in mid-March, over 6 months before the end of the fiscal 
year.
    \15\ 8 U.S.C. Sec. 1356.
    \16\ 8 C.F.R. Sec. 103.7(b).
    \17\ 8 U.S.C. Sec. 1182(n).
    \18\ Id. The attestation provisions for H-1B dependent employers 
pursuant to the American Competitiveness and Workforce Improvement Act 
of 1998 (``ACWIA'') were due to sunset in FY 2001. Pub. L. 105-277. 
H.R. 4227 extends these provisions through FY 2002. H.R. 4227, 
Sec. 401.
---------------------------------------------------------------------------
    H.R. 4227 nominally eliminates the current 115,000 cap on 
H-1B visas, but in its place interposes several new hiring and 
employment requirements. First, the legislation includes new 
salary requirements on employers, such that H-1B employees' 
income level must exceed $40,000 per year,\19\ and the employer 
must have increased the median compensation of its non H-1B 
workers in the most recent year.\20\ Second, the bill imposes 
several new business mandates by requiring that eligible 
employers have at least $250,000 in gross assets,\21\ and that 
employers submit paperwork to the Department of Labor 
concerning the H-1B worker's country of origin, academic 
degree, job title, start date and salary level for posting on 
the Internet.\22\ Finally, the bill imposes more stringent work 
requirements on prospective H-1B employees by requiring that 
they be employed ``full time;'' \23\ eliminating the ability of 
workers to use their foreign work experience to replace the 
bachelor's degree requirement;\24\ and by prohibiting persons 
employed in a specialty occupation from qualifying for an 
appropriate status other than H-1B.\25\ H.R. 4227 provides only 
a very modest increase in H-1B fees paid by employers--
increasing them by $300,\26\ and none of the increased fees are 
allocated to worker training or to education.\27\ In addition, 
the legislation contains several studies--relating to the 
recruitment of under represented groups by H-1B employers; 
training, education, and promotion of incumbent employees; and 
the INS's compliance with the requirement that they accurately 
count H-1B nonimmigrants.\28\
---------------------------------------------------------------------------
    \19\ Id. at Sec. 201. This does not apply to employees at higher 
education institutions and affiliated non-profits, non-profit and 
governmental research organizations, and elementary and secondary 
schools.
    \20\ Id. at Sec. 101.
    \21\ Id. at Sec. 305. In addition, to the gross asset requirement, 
employers must maintain a place of business in the United States and be 
licensed in accordance with State or local licensing requirements. If 
the employer cannot demonstrate $250,000 in gross assets, it must 
provide documentation per INS regulations to show its legitimate 
business activities.
    \22\ Id. at Sec. 202.
    \23\ Id. at Sec. 302. ``Full time'' is defined as not less than 35 
hours per week. This does not apply to higher education institutions 
and related non-profits, governmental, and non-profit research 
institutions.
    \24\ Id. at Sec. 303.
    \25\ Id. at Sec. 301. For example, a business visitor or intra-
company transferee who is a professional would be required to enter the 
country in H-1B status rather than in a visa category specifically 
created for such purposes. Foreign nationals are still eligible to 
apply for the following statuses in lieu of H-1B status: Agricultural 
workers, persons of ``extraordinary ability or achievement,'' and 
performing athletes or entertainers.
    \26\ Id. at Sec. 203.
    \27\ The Labor Department and INS each are to receive $100 per 
petition to improve the processing of applications. The remaining $100 
is to be allocated to the INS and State Department to increase their 
efforts in combating fraud in the H-1B program.
    \28\ Id. at Sec. 501. Additionally, the bill allows foreign 
nationals currently employed in H-1B status to change employers upon 
the filing of an H-1B petition by their new employer, rather than 
waiting until the petition is adjudicated, as required under current 
law. H.R. 4227, Sec. 103. It requires foreign nationals performing 
services as physical therapists to have a degree recognized by the 
Secretary of Education as equivalent to a master's degree from an 
accredited U.S. physical therapy program. Id. at Sec. 204. Employers 
also must provide the Labor Department with a copy of the annual W-2 
form for their H-1B workers. Id. at Sec. 306. Finally, H.R. 4227 
extends the non-displacement attestation of ACWIA and the Labor 
Department's authority to initiate an investigation based on ``credible 
evidence'' through FY 2002. Id. at Sec. Sec. 401-402.
---------------------------------------------------------------------------
    We offer these dissenting views because H.R. 4227 fails to 
bridge the twin goals of meeting the high-technology industry's 
labor shortage, while ensuring that American workers receive 
education and training necessary to compete in the new high-
technology economy. Moreover, the bill does not address the 
problems with our permanent immigration system, particularly 
access to employment-based visas and the law's unfair treatment 
of Central Americans, Haitians and long-time immigrants 
deserving of lawful permanent residence. We also have grave 
concerns about the elimination of the cap. It is not only 
misleading, because of onerous new eligibility requirements, 
but creates a poor precedent by appearing to prefer temporary 
worker visas to family and employment-based permanent visas. 
The following is a more detailed summary of our concerns with 
the legislation.

  I. H.R. 4227 Fails to Offer any Funds to Re-train U.S. Workers and 
                         Educate Future Workers

    First and foremost, we cannot support H.R. 4227 because it 
totally ignores the issue of preparing American workers and 
citizens (including minorities) for the growing high-technology 
economy.\29\ There is a widespread consensus that we need to 
teach our children the skills to fill high-technology positions 
in the future.\30\ The U.S. Department of Education recently 
found that secondary school students in the United States, when 
compared with students in other countries, have among the 
poorest skills in math and science. The Third International 
Mathematics and Science Study, the most comprehensive and most 
rigorous international comparison of students to date, tested 
students on their mathematics and science skills, and found 
that American students at the end of their secondary education 
were at a stark disadvantage compared to their peers abroad. 
U.S. students scored lower in math and science than students in 
almost every other country in the world. What passes as a 
ninth-grade math curriculum in the United States is being 
taught to sixth-graders in many foreign countries.\31\
---------------------------------------------------------------------------
    \29\ The Majority refused to even consider an amendment offered by 
Rep. Nadler (D-NY) and Rep. Conyers (D-MI) to increase accessibility to 
education and training in high-technology fields. The amendment would 
have directed grants to educational institutions and computer 
technology firms to train members of under represented groups. It also 
would have provided incentives for teachers to obtain information 
technology certifications to enable them to teach math and science 
skills to our children.
    \30\ Highlights from TIMSS, National Center for Education 
Statistics, U.S. Dept. of Education, NCES-1999081 (Apr. 16, 1999).
    \31\ Id.
---------------------------------------------------------------------------
    A recent Labor Department report found that these 
deficiencies were mirrored in our adult labor force, 
concluding:

        In many instances, there is a mismatch between the 
        skills jobs require and those that applicants possess. 
        More than 20 percent of adults read at or below the 
        fifth-grade level. A 1996 American Management 
        Association survey of mid-size and larger business 
        found that 19 percent of the job applicants taking 
        employer-administered tests lacked the math and reading 
        skills necessary for the jobs for which they are 
        applying. That percentage increased to almost 36 
        percent in 1998--probably reflecting tighter labor 
        markets and the rapidly rising demand for skills.\32\
---------------------------------------------------------------------------
    \32\ Future Work: Trends and Challenges for Work in the 21st 
Century, Executive Summary: A Report of the U.S. Department of Labor 
reported in Daily Labor Report, BNA, Inc., No. 170, p. E-1 (Sept. 2, 
1999).

In particular, women and minorities also are vastly under-
represented in high-technology fields.\33\
---------------------------------------------------------------------------
    \33\ See Letter to Democratic Leader Richard Gephardt from The 
Coalition for Fair Employment in Silicon Valley printed in Roll Call on 
May 4, 2000. The Majority defeated an amendment offered by Rep. Waters 
(D-CA) that would have added a pilot program requiring employers hiring 
H-1B workers to engage a recruiting firm to hire American workers from 
minority communities and to prohibit the issuance of H-1B visas until 
1,000 minority employees are hired by such recruiting firms to fill 
high-technology positions.
---------------------------------------------------------------------------
    It is for these reasons that we are so disappointed that 
H.R. 4227 contains no funding for increased training or 
education. H.R. 4227 pales in comparison to both the 
administration's proposal and the Dreier-Lofgren H-1B bill 
(H.R. 3983) in terms of education and training. The 
administration's proposal increases fees by $1,500 for most 
employers \34\ and allocates 50% of the revenue to the 
Department of Labor to provide training for U.S. workers and 
30% of the revenue to educational programs to teach our 
children computer science, math and engineering.\35\ In terms 
of training, the Department of Labor, in consultation with the 
Department of Commerce, will fund innovative private-public 
partnerships to train American workers. The preponderance of 
funding will go to education and training for incumbent and 
dislocated workers and a smaller proportion will go to youth 
opportunity programs.\36\ The administration also would use the 
increased H-1B fees to fund a variety of activities directed at 
educating our children.\37\
---------------------------------------------------------------------------
    \34\ The administration's proposal includes a $2,000 application 
fee for most employers, except that ``H-1B Dependent'' employers, as 
defined in current law, are required to pay $3,000 per application. See 
Administration Proposal.
    \35\ The remaining 20% of the fees are allocated to the INS and 
Labor Department for improving application processing, reducing 
backlogs, and increasing enforcement of employer-based immigration 
programs. Id.
    \36\ Special emphasis will be put on funding innovative projects 
that focus on groups under-represented in the information technology 
industry, such as women, minorities, and Americans with disabilities. 
Id.
    \37\ These activities include National Science Foundation programs 
for scholarships for low-income students in computer science, math and 
engineering; Graduate Research Fellowships and merit-based 
scholarships; the Department of Education's Teacher-Loan Forgiveness, 
Upward Bound and Graduate Assistance in Areas of National Need 
programs; and programs for, and better coordination of economic 
dislocation and assistance through the Department of Commerce's 
Community Economic Adjustment program. Id.
---------------------------------------------------------------------------
    Similarly, H.R. 3983 would increase fees by $500, 
allocating 90% of the additional revenue to existing K-12 math, 
computer science, engineering and science-related enrichment 
initiatives and regional skills alliances designed to train 
current workers. This would include badly needed funds for, 
among other things, Stafford Loan Forgiveness Program, Upward 
Bound Math/Science Program, National Science Foundation 
Scholarships, and Regional Skills Alliances Job Training.
    It is H.R. 4227's total failure to provide any increased 
funding for education or training that accounts for a large 
degree of its opposition. Thus, Sandra Boyd, ABLI Chair and a 
representative of the National Association of Manufacturers, 
criticized H.R. 4227 as being shortsighted because ``[h]iring 
foreign professionals to help fill the need [for employees] is 
a limited, but important short-term solution to a much longer-
term challenge: ensuring that our schools are producing 
Americans prepared to work in an information rich economy.'' 
\38\ Similarly, Jim Jorgenson, CEO of AllAdvantage.com, has 
written ``[w]e have some serious reservations about [H.R. 
4227]. . . . The lack of skilled workers can not simply be 
addressed by increasing visa caps. We must also increase 
educational opportunities for U.S. students and workers to grow 
the domestic pool of talent.'' \39\
---------------------------------------------------------------------------
    \38\ ``Employer Groups Call Smith Technology Worker Bill 
Insufficient and Shortsighted,'' ABLI News Release (undated).
    \39\ Letter from Jim Jorgenson, CEO of AllAdvantage.com, to House 
Speaker Dennis Hastert (May 10, 2000).
---------------------------------------------------------------------------
    As recently as June 6, 2000, two of our leading high-
technology executives, Bill Gates of Microsoft, and Andrew 
Grove of Intel, reiterated these concerns in a hearing before 
the Joint Economic Committee. As reported by Congress Daily:

        Both Grove and Gates said Congress should not only 
        increase the availability of H-1B visas for skilled 
        foreign workers, but also focus on ways of better 
        preparing students to seek high tech careers. Grove 
        said dealing with the issue of the high tech worker 
        shortage with H-1B visas alone would be like ``bailing 
        out a [sinking] boat with a cup.'' He said math and 
        science education had reached a ``state of emergency'' 
        in the United States, and that he would favor Federal 
        assistance in teacher certification and training in 
        these areas. When asked whether he would support higher 
        H-1B visa fees to support education and training 
        programs, Gates said, ``Fees would not be an issue in 
        our case.'' \40\
---------------------------------------------------------------------------
    \40\ Intel Head Differs With Industry Over Tax, Privacy Issues, 
National Journal's Congress Daily (June 6, 2000).
---------------------------------------------------------------------------

  II. H.R. 4227 Imposes Significant New Restrictions that Make it Far 
                  More Difficult to Hire H-1B Workers

    As noted above, H.R. 4227 includes at least seven onerous 
new restrictions relating to the hiring of H-1B and related 
workers. These include the following:

         LThe employee's salary must exceed $40,000 per 
        year.
         LThe employer must have increased the median 
        compensation of its non-H-1B employees in the most 
        recent year.
         LThe employer must have gross assets in excess 
        of $250,000.
         LInformation concerning the employee's country 
        of origin, academic degree, job title, start date and 
        salary level must be submitted to the Labor Department 
        for posting on the Internet.
         LThe employee must be employed full time.
         LThe employee may not use work experience to 
        replace the bachelor's degree requirement.
         LEmployees employed in specialty occupations 
        may no longer be permitted to qualify for an 
        appropriate status other than H-1B status.

    Thus, although the bill appears to liberalize the 
availability of H-1B visas, in actuality, the legislation will 
make it far more difficult for employers to utilize the H-1B 
program than under current law. By and large, the new 
employment restrictions are either unnecessary and duplicative 
of the requirements of current law, or create dangerous new 
roadblocks to meeting our high-technology employment needs. 
Given this Majority's dubious track record in enacting 
immigration laws benefitting immigrants or employers, as well 
as the delay in considering this measure, we are not surprised 
that H.R. 4227 does not represent a real or meaningful effort 
to respond to the Nation's present needs with regard to 
temporary or permanent immigration.\41\
---------------------------------------------------------------------------
    \41\ In 1996, subcommittee chairman Lamar Smith (R-TX) spear headed 
numerous dangerous and anti-immigration legal changes, including a 
decrease in employment-based immigration and a 30% decrease overall in 
legal immigration. CRS Report for Congress, Immigration: Analysis of 
Major Proposals to Revise Family and Employment Admissions (Feb. 14, 
1996). Moreover, in a recent letter to committee members, Rep. Smith 
acknowledged his own view that: ``Today there is still no objective, 
credible study that documents a shortage of American high-tech 
workers.'' Letter from Rep. Lamar Smith to committee members (Apr. 27, 
2000).
---------------------------------------------------------------------------
    As a general matter, we would note that the new hiring 
restrictions represent a significant retrenchment from current 
law. ABLI and over 400 other organizations state in a recent 
letter that: ``H.R. 4227 imposes burdensome new requirements on 
the H-1B program that would make the program unusable for many 
employers.'' \42\ The American Immigration Lawyers Association 
has written that: ``H.R. 4227 . . . is worse than current law. 
It would make the H-1B program unworkable. It poses too many 
restrictions on the program and does not meet the needs of U.S. 
employers for access to highly educated foreign 
professionals.'' \43\ These concerns have been echoed by the 
Computer and Communications Industry Association, which has 
written: ``[W]e do not support H.R. 4227 and we will not 
support this legislation if it is brought to the floor of the 
House of Representatives. . . . CCIA has serious concerns about 
H.R. 4227 as a legislative vehicle to address employers 
concerns, and if it is brought to the House floor, we will urge 
Members to vote against this bill.'' \44\
---------------------------------------------------------------------------
    \42\ Letter from ABLI and over 400 organization to Members of 
Congress (June 6, 2000).
    \43\ Talking Points, Why H.R. 4227 is Worse than Current Law!, 
American Immigration Lawyers Assoc. (undated).
    \44\ CCIA Letter.
---------------------------------------------------------------------------
    In terms of specific concerns with the hiring restrictions, 
we would note that the new $40,000 minimum salary requirement 
has been derided by the business community, as seen in ABLI's 
statement that ``[i]t will be difficult for some employers to 
meet this wage threshold, particularly in start-up operations 
where compensation often relies heavily on stock options.'' 
\45\ It also has been noted that the minimum income requirement 
may be unnecessary \46\ and could pose particular problems for 
businesses in lower cost of living and wage geographic areas as 
well as for less lucrative but important specialty 
occupations.\47\ The bill's requirement that the employer must 
have increased the median wages paid to its non-H-1B workers 
before they can hire more H-1B workers appears to be 
unnecessary since it is largely redundant of existing 
prevailing wage requirements in the law.\48\ The same concerns 
lie with the new $250,000 asset requirement--this is 
purportedly designed to crack down on so-called ``job shops,'' 
but is again redundant of anti-fraud requirements already in 
place,\49\ and would merely serve to prevent legitimate small 
businesses and start up companies from hiring H-1B workers.
---------------------------------------------------------------------------
    \45\ Summary of REVISED ``Technology Worker Temporary Relief Act,'' 
American Business for Legal Immigration (undated).
    \46\ An arbitrary salary floor does not take into account 
differences in wages among different locations (e.g., Quincy, Illinois 
as compared to Los Angeles, California). The Labor Department, by 
regulation, has a mechanism for ensuring that H-1B workers are not paid 
below the prevailing wage for the position. The system takes into 
account location and the type of occupation. 18 U.S.C. Sec. 1182(n); 20 
C.F.R. Sec. 655.731.
    \47\ The salary requirement rests upon the incorrect supposition 
that all H-1B workers are in high-tech fields demanding exorbitant 
amounts of money. H-1B workers include architects, scientists, physical 
therapists, artists, theologians, and archivists. See Characteristics 
of Specialty Occupation Workers (H-1B): October 1999 to February 2000, 
Report by the U.S. Immigration and Naturalization Service, table 2 (May 
2000). CCIA has also noted that the minimum income requirement could 
constitute a violation of our General Agreement on Trade in Services 
(``GAS''). CCIA Letter.
    \48\ 8 U.S.C. Sec. 1182(n)(1)(A); 20 C.F.R. Sec. 655.731 
(employers' requirement to pay H-1B workers at least the prevailing or 
actual wage, whichever is greater).
    \49\ 8 U.S.C. Sec. 1182(n)(1) (requirements for H-1B dependent 
employers).
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    With regard to H.R. 4227's requirement that personal 
information concerning H-1B workers be posted on the Internet, 
in our view this constitutes an unprecedented and inappropriate 
infringement on workers' privacy. Much of this information is 
already submitted to the Labor Department and INS, which has 
the appropriate enforcement authority, but no evidence has been 
proffered which indicates that such sensitive information need 
be posted on the Internet.\50\ We would further note that the 
bill's new full-time work requirement also significantly 
narrows the flexibility of both high-technology employers and 
their employees and may well violate the Family and Medical 
Leave Act and other labor laws, in addition to provisions in 
the 1998 H-1B law mandating equal treatment for H-1B and other 
workers.\51\
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    \50\ The American Immigration Lawyers Association notes: ``The 
provision is an invasion of privacy and would target these individuals 
for the attention of extremists. Employers already submit this 
information to the INS and Department of Labor, and must notify 
employees of the occupation, salary and job location of the H-1B 
nonimmigrant. Internet posting is unwarranted.'' Section-by-Section 
Summary of the ``Technology Worker Temporary Relief Act'' (H.R. 4227) 
as passed by the House Judiciary Committee, with Comments, (hereinafter 
``AILA Summary'') American Immigration Lawyers Assoc. (May 31, 2000). 
CCIA has written that the requirement ``would be an invitation for 
employment agencies to steal away our companies key hires.'' CCIA 
Letter.
    \51\ 8 U.S.C. Sec. 1182(n)(2)(C)(viii); see also AILA Summary. As 
ABLI has observed, ``[t]his provision will virtually eliminate 
concurrent employment. It is also troubling that it eliminates the 
ability of employers to offer a shorter work week to H-1B employees 
seeking a better balance of career and family.'' Summary of REVISED 
``Technology Worker Temporary Relief Act,'' American Business for Legal 
Immigration (undated).
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    As for the bill's prohibition on foreign nationals using 
work experience to substitute for a bachelor's degree, no 
credible policy rationale has been proffered for this 
requirement. Under current law, a U.S. telecommunications 
company currently can hire a telecommunications specialist from 
abroad who has more than 12 years of experience but no 
bachelor's degree. H.R. 4227 bans this practice, enabling our 
foreign competitors to hire such highly experienced 
individuals. Concerns also have been raised regarding H.R. 
4227's prohibition on persons employed in a specialty 
occupation from being permitted to qualify for an appropriate 
immigration category other than H-1B status. Under this 
provision, employers and foreign nationals would lose the 
flexibility to choose the most appropriate visa category based 
on the entirety of the circumstances. Such a requirement 
artificially inflates the utilization of H-1B visas and 
unnecessarily imposes the H-1B program's restrictions on 
employers who have not historically needed H-1B workers.\52\
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    \52\ Individuals who would otherwise choose to enter the country as 
an intra-company transferee, treaty investor, treaty trader, 
international exchange visitor or other appropriate status would be 
required to use the H-1B category. Further, the provision would forbid 
most business visitors who are professionals from using the business 
visitor visa.
---------------------------------------------------------------------------
    To the extent the Majority is seeking to use these new 
restrictions to respond to concerns regarding fraud and 
unnecessary use of H-1B visas, there are far more effective 
means of doing so which do not punish the high-technology 
community. Both the administration's proposal and the Dreier-
Lofgren bill (H.R. 3983) pursue more reasonable increases in H-
1B visas while simultaneously setting aside visas for highly 
skilled and educated workers. In particular, the administration 
and H.R. 3983 advocate an increase in H-1B visas to 200,000 per 
year, while reserving visas for certain highly educated 
persons. Since INS estimates that 40% of H-1B visas go to 
individuals holding a master's degree or higher.\53\ The 
administration proposes that in FY 2001 we set aside 40% of H-
1B visas for advanced degree holders, with modest increases in 
the following 2 years,\54\ as well as 10,000 visas for 
institutions of higher education and other research 
institutions. Similarly, the Dreier-Lofgren bill would set 
aside 60,000 visas each year for persons holding master's 
degrees or the equivalent, and 10,000 visas for institutions of 
higher learning.\55\ Both of these approaches seek to raise the 
cap to account for continued growth in the H-1B category, while 
providing for set-asides designed to ensure that our economy's 
needs for the most highly educated and skilled workers can be 
met and that jobs requiring less preparation are available to 
U.S. workers currently acquiring the necessary skills to fill 
them.
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    \53\ Characteristics of Specialty Occupation Workers (H-1B): 
October 1999 to February 2000, Report by the U.S. Immigration and 
Naturalization Service, table 4 (May 2000).
    \54\ Administration Proposal. The administration recommends setting 
aside 45% of visas in FY 2002 and 50% in FY 2003.
    \55\ H.R. 3983, Sec. 201.
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         III. H.R. 4227 Ignores the Problem of Permanent Visas

    The legislation reported by the committee is also deficient 
in that it ignores opportunities to update and modernize our 
permanent employment based visa system, or to utilize 
immigrants who already reside in our country to help fill 
employment needs.
A. Updating and Modernizing our Permanent Employment-Based Visa System
    It is unfortunate that the Majority has chosen to totally 
ignore the problem of permanent employment-based visas. This is 
in stark contrast to the Dreier-Lofgren bill which addresses 
several such issues--``over subscription;'' INS processing 
delays; and outdated technologies. The ``over subscription'' 
problem stems from the fact that there are 140,000 employment-
based visas available each year (including spouses and 
children).\56\ These visas are divided into five preference 
categories, and within each category, there is a limited number 
of visas available to every country in the world, regardless of 
demand or population. Even though we have never used all 
140,000 visas in a year, backlogs of up to 5 years have 
developed for skilled professionals from certain countries with 
strong scientific/engineering educational programs that produce 
individuals with skills sought by U.S. employers. Under current 
law, if these workers cannot reach the last stage of processing 
their green cards before their H-1B stay expires, they must be 
terminated and sent home or relocated to the company's overseas 
facilities, even though such workers already have an approved 
labor certification and INS immigrant petition. H.R. 3983 
responds to this issue by allowing unused visa numbers to roll 
over from one category/country to another to help clear up the 
backlogs regardless of the per-country limits, and by extending 
the time in H-1B status beyond 6 years for workers caught up in 
this situation.\57\
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    \56\ 8 U.S.C. Sec. 1151(d).
    \57\ H.R. 3983, Sec. 101 and Sec. 203.
---------------------------------------------------------------------------
    A related problem concerns INS processing delays. This 
derives from the fact that 140,000 employment-based visas are 
available each year but frequently cannot be fully used. For 
example, in FY 1999, we used less than 40,000 visas because of 
INS processing delays although demand was much greater. H.R. 
3983 responds by allowing unused visas from FY 1999 and FY 2000 
numbers to be recaptured for use in future years.\58\ In terms 
of responding to outdated government technologies, H.R. 3983 
requires INS and the Labor Department to establish a web-based 
system that will allow employers and other petitioners to check 
the status of a petition online; establishes a Technology 
Advisory Committee (``TAC'') made up of industry and government 
agencies; and requires INS and the Labor and Commerce 
Departments to consult with the TAC and prepare a feasibility 
study on on-line filing by January 1, 2001.\59\
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    \58\ Id. at Sec. 101.
    \59\ Id. at Sec. 103. The study must address how 98% of immigrant 
petitions can be adjudicated within 3 months and 98% of nonimmigrant 
petitions within 1 month. H.R. 3983 also requires the Labor Department 
to take internet recruitment efforts into account for labor 
certification and similar activities. Id. at Sec. 102.
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B. Fair Treatment for Immigrants Already Residing in the United States
    In our view, if we are going to consider opening U.S. 
borders to hundreds of thousands of foreign nationals who do 
not live here to fill employment needs under the H-1B program, 
the very least we can do is address existing inequities faced 
by persons who already live and work here and have family ties 
in this country. Unfortunately, the Majority has again ignored 
two very reasonable proposals for doing so in the context of H-
1B legislation--providing immigration parity for Central 
American and Haitian immigrants, and extending the registry 
date from 1972 to 1986 for certain long-term immigrants.\60\ 
Enactment of both of these proposals would not only provide 
compassion and fairness for the affected immigrants, but would 
serve our own national and economic interests.
---------------------------------------------------------------------------
    \60\ The Majority used a procedural point of order to block 
consideration of an amendment offered by Reps. Conyers and Berman (D-
CA) which would have amended H.R. 4227 to include both immigration 
parity and an extended registry date.
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    Immigration Parity for Central Americans and Haitians--
Immigration parity for Central Americans and Haitians is needed 
to correct unfair and discriminatory provisions enacted by the 
Majority in the last two Congresses.\61\ In 1996, Congress 
changed a provision of immigration law (known as ``Suspension 
of Deportation'') that offered a means for certain immigrants 
who have been in the United States for many years to remain 
here permanently if they can demonstrate that deportation would 
have harmful effects on themselves or derivative family 
members.\62\ The 1996 law made this form of relief from 
deportation much more difficult to obtain, and the law was 
applied retroactively--meaning persons who had met the 
standards of the old rules now had to make their case based on 
the new, more difficult rules. The largest groups of immigrants 
affected by this change came to America after fleeing civil 
wars in Central America. For the most part, these immigrants 
have been living for many years in various temporary statuses, 
and expected to use the suspension of deportation provision of 
law to gain their permanent residence.
---------------------------------------------------------------------------
    \61\ Parity legislation in the form of H.R. 2722, the ``Central 
American and Haitian Adjustment Act of 1999'' was introduced by Reps. 
Christopher H. Smith (R-NJ) and Luis V. Gutierrez (D-IL) on August 5, 
1999. In the Senate, counterpart legislation (S. 1590) was introduced 
by Sens. Richard J. Durbin (D-IL) and Edward M. Kennedy (D-MA) on 
September 15, 1999.
    \62\ Sec. 244(a)(1), 66 Stat. 163, Immigration and Nationality Act 
(May 1, 1995) amended by the Illegal Immigration Reform and 
Responsibility Act of 1996, Sec. 304, Pub. L. 104-208, 110 Stat. 3009 
(Sept. 30, 1996).
---------------------------------------------------------------------------
    One year later, in 1997, Congress passed the Nicaraguan 
Adjustment and Central American Relief Act (``NACARA''), 
offering relief from the punitive 1996 law for Cubans and 
Nicaraguans and, to a far lesser extent, certain Guatemalans 
and Salvadorans.\63\ In 1998, Congress passed the Haitian 
Refugee Immigration Fairness Act (``HRIFA'') \64\ to correct 
the fact that Haitian refugees were left out of NACARA; 
however, this law continued to leave many Haitians behind, in 
part because it did not take into account certain special 
circumstances of the Haitian refugees.\65\ Thus, additional 
legal protection needs to be extended to qualified persons from 
El Salvador, Guatemala, Honduras,\66\ and Haiti to grant them 
the same opportunity to adjust to permanent residence as was 
offered to them prior to the 1996 immigration law, and which 
Cubans and Nicaraguans received under the 1997 NACARA 
legislation.
---------------------------------------------------------------------------
    \63\ Pub. L. 105-100, 111 Stat. 2193 (Nov. 19, 1997) amended by 
Pub. L. 105-139, 111 Stat. 2644 (Dec. 2, 1997). By passing NACARA in 
1997, Congress created an opportunity for Cubans and Nicaraguans to 
gain permanent residence if they had been present continuously in the 
United States since December 1, 1995. If these individuals do not have 
characteristics that would disqualify them for permanent residence, 
such as having committed certain crimes, they qualify for permanent 
residence under NACARA. NACARA set a deadline of March 31, 2000 for 
Nicaraguans and Cubans to apply. By contrast, the path to permanent 
residence laid out in the 1997 law for Salvadorans and Guatemalans 
included not just a screening for disqualifying characteristics, but 
also a process in which they must prove they should not be deported. 
Furthermore, several requirements narrowed the pool of those 
potentially eligible to apply. First, persons from Guatemala and El 
Salvador had to be in the United States prior to 1991. Even then, only 
persons who had registered as a class member in the American Baptist 
Churches lawsuit (which challenged the political bias against 
Salvadorans and Guatemalans in the asylum system in the 1980's), or for 
Temporary Protected Status, or who applied for asylum, were eligible to 
apply. Only if a person falls into one of these categories do they move 
on to the next step: applying for ``Suspension of Deportation'' (now 
known as ``Cancellation of Removal''). This is a process in which 
persons must prove continuous residence in the United States for seven 
or more years, and that they or their U.S. citizen or permanent 
resident spouse, parent, or children would suffer ``extreme hardship'' 
if they were deported. In this process, the INS can decide that they 
agree or disagree with a persons's claim that they would suffer extreme 
hardship. While regulations guiding the decision-making process have 
been written to ease the burden of proving extreme hardship, the 
process is still complicated, and many may not get through it.
    \64\ Pub.L. 105-277 (Oct. 21, 1998).
    \65\ HRIFA permits Haitians to apply for permanent residence, but 
contains conditions that exclude certain Haitians, even if they resided 
in the United States by the cutoff date. Among other things, the law 
did not explicitly make allowances for the special needs of Haitians in 
the United States, including language and cultural barriers which make 
advising them of their legal rights difficult and the inability of many 
Haitians to pay the substantial filing fees. Further, though HRIFA was 
signed into law a year later than NACARA, Haitians were given the same 
deadline to apply, March 31, 2000, which is particularly problematic 
given the requirement that regulations needed to be finalized first 
(and which did not occur until March 23, 2000).
    \66\ Hondurans endured a somewhat similar history as the other 
groups. Many Hondurans came to the U.S. in the 1980's and early 1990's 
when the country was affected by the civil wars that tore apart the 
region. Yet, Hondurans have not been included in any relief legislation 
that has benefitted similarly situated groups. (Hondurans have been 
granted temporary relief from deportation until July 5, 2000, due to 
the devastation in their country caused by Hurricane Mitch in 1998.)
---------------------------------------------------------------------------
    Many of the individuals who would be covered under such a 
proposal came to the United States at a time when our asylum 
system was crippled by political bias, and they have a history 
of being treated unfairly by a hostile bureaucracy. Like the 
Cubans and Nicaraguans covered by NACARA, they have fled civil 
conflict that affected their home countries, they have resided 
for a long time in the United States, and their lives are now 
deeply rooted in America, with families, jobs and community 
ties.\67\
---------------------------------------------------------------------------
    \67\ Take the recently reported case of Ms. Pierre who used a 
doctored passport to leave Haiti and entered the United States on 
January 8, 1993, after her boyfriend had been dragged from their house 
in Port-au-Prince by agents of the Haitian dictatorship. In Florida, 
she built a solid life, scrubbing hotel room toilets and bathing people 
in nursing homes to earn a living. She married a Haitian immigrant and 
they have two children who are both U.S. citizens. Ms. Pierre is to be 
deported because she entered the country with a false immigration 
document. If she was Nicaraguan or Cuban, she would be eligible for 
permanent residence status. Rick Bragg, Haitian Immigrants in U.S. Face 
a Wrenching Choice, N.Y. Times, p. A1 (Mar. 29, 2000).
---------------------------------------------------------------------------
    Parity legislation also is needed to provide workers for 
our own economy and to stabilize the emerging democracies of 
Central America. Remittances--money sent home by immigrants in 
the United States--represent a significant source of income for 
the countries from which these war refugees have come.\68\ 
Losing this income would be devastating for Central American 
economies struggling to recover from civil wars and, more 
recently, from Hurricane Mitch. In addition, unless we enact 
parity legislation, these countries would be forced to absorb 
more workers at a time when unemployment is high, which could 
destabilize the young and fragile democracies of the region, 
contrary to our foreign policy interests.
---------------------------------------------------------------------------
    \68\ In 1997 alone, it is estimated that Salvadorans in the U.S. 
sent back an estimated $1.2 billion.
---------------------------------------------------------------------------
    Updating the Registry Date--Updating the registry date to 
1986 is necessary to protect long-term immigrants who have 
become valuable employees and family members in America, and to 
correct the punitive and unfair procedures adopted by the INS 
and by the Majority.\69\ The notion of an immigration law 
registry is based on our long-held principle that immigrants 
who have come here without proper documents should be given an 
opportunity to adjust to permanent residence status and 
solidify their family and economic ties if they have been here 
a long time and have nothing in their background that would 
disqualify them from immigrant status. While the registry date 
has been updated six times since 1929, it has not been changed 
since 1986.
---------------------------------------------------------------------------
    \69\ Corrective legislation in the form of the ``Date of Registry 
Act,'' was introduced as H.R. 4138 by Reps. Sheila Jackson Lee (D-TX) 
and Luis Gutierrez (D-IL) on March 30, 2000. A Senate counterpart, S. 
2407, was introduced by Sens. Harry Reid (D-NV) and Edward Kennedy (D-
MA) on April 12, 2000.
---------------------------------------------------------------------------
    An important reason for updating the registry date is that 
a substantial portion of immigrants who would benefit are those 
who were eligible to apply for legalization in the mid-1980's 
under a separate provision of the Immigration Reform and 
Control Act of 1986 (``IRCA''), but were unable to due so 
because of INS misinterpretations of the law.\70\ Had their 
applications been processed properly and in a timely manner, 
many, if not most of these immigrants would already be 
citizens.\71\ Instead, they have been fighting the immigration 
bureaucracy for more than a decade and are now threatened with 
an unfair and painful deportation.\72\
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    \70\ In addition to updating the registry date, IRCA included a 
``legalization program'' giving certain persons who resided in the U.S. 
illegally before 1982 the opportunity to adjust to lawful permanent 
resident status. Undocumented immigrants had one year to apply. Many 
missed out on the opportunity to legalize through no fault of their 
own, because INS regulations issued by the Reagan administration 
misinterpreted the law and judged them not to be eligible for 
legalization if they had traveled outside the United States after May 
1, 1987 without obtaining advance permission to do so.
    \71\ People such as Francisca Escobar continue to suffer the 
uncertainty and unfairness of the inability to apply for legalization 
under the 1986 law. Ms. Escobar is a 55 year old Los Angeles seamstress 
from Guatemala who, in 1981, escaped with her children from Guatemala's 
civil war. Ms. Escobar had been eligible for permanent residence status 
under the 1986 law. Antonio Olivo, Another Chance at Amnesty, Los 
Angeles Times, p. B-2 (Apr. 28, 2000).
    \72\ Several class-action lawsuits were filed against the INS by 
immigrant assistance organizations on behalf of their clients, 
challenging INS regulations which prohibited eligible applicants from 
applying for legalization. In each of these lawsuits, the courts agreed 
with the plaintiffs that the INS had misinterpreted the law. The 
largest of these lawsuits are known as ``Catholic Social Services'' and 
``League of United Latin American Citizens.'' Court decisions in these 
cases came near the end of the 1-year application period. When the 
courts tried to extend the application period to allow immigrants time 
to apply, the INS contested the courts' jurisdiction over these 
lawsuits. In 1993, the Supreme Court finally ruled that the courts did 
have jurisdiction over the legalization lawsuits. Reno v. Catholic 
Social Services, 509 U.S. 43 (1993).
---------------------------------------------------------------------------
    In 1996, Congress compounded the problem when it stripped 
away the courts' authority to grant relief for most of the 
wronged legalization applicants.\73\ In our view, it makes 
little sense to continue to spend limited enforcement resources 
to pursue the removal of immigrants who have lived and worked 
in this country for more than a decade. There will be no 
benefit to the U.S. should, in the end, these immigrants revert 
to undocumented status and lose their work permits (or be 
removed from the country). American employers will lose legal, 
productive workers, immigrant families will be torn apart, and 
broken families will weaken communities where immigrants live.
---------------------------------------------------------------------------
    \73\ Section 377, Pub.L. 104-208 (Sept 30, 1996), as amended by 
Pub.L. 104-302 (Oct. 11, 1996) (the Illegal Immigration Reform and 
Immigration Responsibility Act). This provision stripped the courts of 
jurisdiction over the claims of immigrants who were denied access to 
the legalization provision, unless they could show--more than a decade 
after the fact--that they actually attempted to apply for legalization 
but had their application and fee refused.
---------------------------------------------------------------------------
    Extending immigration parity for Central Americans and 
Haitians and updating the registry date has drawn support from 
the Clinton administration as well as a wide range of groups. 
For example, Jack Kemp, co-director of Empower America and 
former Republican vice-presidential candidate, has declared 
that an H-1B ``Plus'' proposal that includes these immigration 
reforms constitutes a stronger approach because it ``emphasizes 
two principles: First, supporting workers already here, on the 
job, and paying taxes and making our economy grow . . . [and] 
second, supporting family reunification by allowing more close 
family members of citizens and permanent residents to get visas 
to join their relatives here in America.'' \74\ These views are 
shared by conservative groups such as Americans for Tax Reform, 
Center for Equal Growth, Club for Growth, and the National 
Retail Federation.
---------------------------------------------------------------------------
    \74\ H-1B Plus and Immigration Reform, Statement of Jack Kemp, 
Empower America (May 16, 2000).
---------------------------------------------------------------------------
    On the other side of the ideological spectrum, the Lutheran 
Immigration and Refugee Service has written: ``A more 
comprehensive [H-1B] bill could be a stronger bill, vindicating 
both economic interests and humanitarian concerns.'' \75\ The 
National Council of La Raza agrees, arguing that by supporting 
legislation providing for Central American and Haitian parity 
and updating the registry date, Congress ``can prevent the 
further suffering of immigrants at the hands of bureaucratic 
entanglements and immigration policies that are not serving the 
nation's economic interest. . . . It would be an extremely 
negative signal to the Hispanic community if the H-1B bill were 
the only immigration-related legislation passed by the 
Congress.'' \76\ The National Immigration Forum supports this 
view as well, noting, ``[w]hile [H-1B] legislation would begin 
to ease the worker shortage in the high technology sector, it 
ignores the fact that a labor shortage exists across all skill 
levels. No less an authority on our economy than Alan Greenspan 
has discussed these labor shortages, and suggested we change 
our immigration laws in order to stabilize and expand our 
workforce.'' \77\ These views are shared by groups such as the 
United States Catholic Conference, the Arab-American Institute, 
the National Asian Pacific American Legal Consortium, the 
National Coalition for Haitian Rights, and the Dominican-
American National Roundtable. Finally, the AFL-CIO's Executive 
Council recently announced its support of efforts to provide 
Central American and Haitian immigration parity and update the 
registry date.\78\
---------------------------------------------------------------------------
    \75\ Letter from Merrill Smith, Washington Representative of the 
Lutheran Immigration and Refugee Service, to Members of Congress (May 
5, 2000).
    \76\ Letter from Raul Yzaguirre, President and CEO of National 
Council of La Raza, to Senators and U.S. Representatives (Apr. 27, 
2000).
    \77\ Letter from Frank Sharry, National Immigration Forum, to 
Members of Congress (May 2, 2000).
    \78\ Executive Council Actions, AFL-CIO (Feb. 16, 2000) found on 
www.aflcio.org.
---------------------------------------------------------------------------

                               Conclusion

    We urge the Majority to consider a far more careful and 
measured approach to the issue of H-1B visas in particular, and 
our permanent employment-based immigration policies in general, 
than they have to date. We would be willing to join them on a 
bipartisan basis if they take the following concerns into 
account. First, H-1B fees need to be increased concurrent with 
any increase in the cap to provide funding to educate and train 
U.S. workers who have been left behind, particularly dislocated 
workers, minorities, and women who are all vastly under-
represented in the information technology industry. Second, the 
eligibility requirements for hiring an H-1B worker cannot be 
made so severe that employers in urgent need of hiring such a 
worker in the short term would be unable to do so. Third, the 
bill needs to update our employment-based permanent immigration 
system in order to provide equitable treatment under the law to 
certain Central Americans and Haitians and other long-time 
immigrants deserving of permanent resident status. Absent 
consideration of such changes, we must oppose H.R. 4227.

                                   John Conyers, Jr.
                                   Barney Frank.
                                   Howard L. Berman.
                                   Robert C. Scott.
                                   Zoe Lofgren.
                                   Melvin L. Watt.
                                   Maxine Waters.
                                   Martin T. Meehan.
                                   William D. Delahunt.
                                   Robert Wexler.
                                   Tammy Baldwin.
                                   Anthony D. Weiner.

                                  
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