AC21 [codified at INA § 214(g)(5)(A)-(B)] exempts the following petitioners from the H-1B cap:
- Institutions of higher education
- Nonprofit entities related to or affiliated with an institution of higher education
- Nonprofit research organizations
- Governmental research organizations
Several interpretive questions arise from the AC21 provision:
- How is "institution of higher education" defined?
- Is it meaningful that the statute uses the phrase "employed at" a qualifying institution rather than "employed by?"
- What is the nature of the affiliation that a nonprofit entity must have with an institution of higher education?
- To what extent must an organization be involved in "research" to be considered a "research organization?"
USCIS clarified many of these questions in a June 6, 2006 field memo, "Guidance Regarding Eligibility for Exemption from the H-1B Cap Based on §103 of the American Competitiveness in the Twenty-First Century Act of 2000 (AC21) (Public Law 106-313). Revisions to Adjudicator's Field Manual (AFM) Chapter 31.3 (AFM Update AD06-27). Michael Aytes."
- USCIS directed its adjudicators to use the definition of "institution of higher education" found at § 101(a) of the Higher Education Act of 1965.
- USCIS directed its adjudicators to use the same regulatory definition of affiliated nonprofit entity that is used in the context of qualifying for the H-1B fee exemption [8 C.F.R. 214.2(h)(19)(iii)(B)]
- USCIS directed its adjudicators to use the same regulatory definitions of "nonprofit research organization" and "Governmental research organization" that is used in the context of qualifying for the H-1B fee exemption [8 C.F.R. 214.2(h)(19)(iii)(C)]
- Finally, USCIS clarified that Congress' use of the word "at" rather than "by" in the statute allows "third party petitioners" to claim an exemption from the H-1B cap in certain instances.