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American Competitiveness in the 21st Century Act


American Competitiveness in the 21st Century Act

The American Competitiveness in the 21st Century Act (AC21) was an act passed by the government of the United States in October 2000, pertaining to immigration to the United States.[1][2][3][4][5][6] It was a complement to the American Competitiveness and Workforce Improvement Act that had been passed in 1998. The focus of AC21 was to change rules related to portability and caps for the H-1B visa to increase the effective number of visas available and make it easier for workers on those visas to switch jobs.


  • History 1
  • Provisions 2
    • Section 102: Temporary increase in visa allotments 2.1
    • Section 103: Special rules for universities and research facilities 2.2
    • Section 103 continued: counting rules 2.3
    • Section 104: Limitations on per-country ceiling with respect to employment-based immigrants 2.4
    • Section 105: Increased portability of H-1B status 2.5
    • Other provisions 2.6
  • Reception 3
  • References 4


A first version of the Act was passed by the United States Senate on January 24, 2000.[7] Amendments were reported on February 9[8] and April 11[9] of the same year. The bill became law upon being signed by Bill Clinton, the President of the United States at the time, on October 17, 2000.[2][10]

The USCIS has issued memoranda and guidance regarding provisions in AC21 that have helped clarify the provisions and how they'll be enforced, in 2001,[2] 2003, 2005,[11][12] and 2008.[13]


Section 102: Temporary increase in visa allotments

At the time that AC21 was passed, there was a huge backlog in H-1B visa applications. The act sought to increase to 195,000 the caps for fiscal years 2001 to 2003, and retroactively raise the caps for 1999 (to include all cases approved after the cap was raised and before October 1, 2000) and for 2000 (to include all cases filed after the cap was reached and before September 1, 2000)

Section 103: Special rules for universities and research facilities

This section introduced what has now become known as the "uncapped H-1B". Prior to AC21, all H-1B visas were counted towards the annual cap. Section 103 provided that employees of higher educational institutions, nonprofit research organizations, and government research organizations would not be counted toward the H-1B cap.

An earlier version of AC21 had included all recipients of graduate degrees as eligible for uncapped H-1Bs, but this provision was removed from the final bill.

The section also specified that people whose current H-1B is on an uncapped visa will be counted toward the cap if they switch to a job that is subject to a cap (i.e., any job other than at a higher educational institution, nonprofit research in

Section 103 continued: counting rules

Prior to AC21, if an individual filed a H-1B petition for a new job while already on a H-1B, the new petition was counted towards the annual cap. AC21 changed this: those who had already been counted towards a cap in the last six years were not counted towards the cap, and a person filing multiple petitions was counted towards the cap only once.

Section 104: Limitations on per-country ceiling with respect to employment-based immigrants

In addition to an overall cap, the H-1B also had per-country caps. This could lead to situations where the caps for some countries went unfilled while those of other countries were oversubscribed. Section 104 released slots within unused caps for the general pool without regard to country of origin.

Additionally, H-1B nonimmigrants reaching the six-year limit of stay and with pending or approved I-140s, but subject to per-country limits, were allowed to extend their H-1B status until decisions were made on their adjustment of status applications.

Section 105: Increased portability of H-1B status

A person already working in the US on H-1B status would now be allowed to file a petition to work for a new employer and start working even before the petition is approved, as long as the petition is filed before the end of the previous work authorization period. Work authorization ceases as soon as the petition is denied.

Other provisions

Some other less significant sections are discussed below:[4]

  • Section 106 included special provisions in case of lengthy adjudications.
  • Section 107 added on more H-1B dependent attestations (made in Labor Condition Applications) as well as additional United States Department of Labor investigative authority, consistent with the American Competitiveness and Workforce Improvement Act.
  • Section 108 provided that if a H-1B visa is revoked due to fraud or willful misrepresentation, the H-1B number for that petition will be added to the cap the following year.
  • Section 109 required the National Science Foundation to conduct a study of the divergence in access to high technology in the United States and report to the United States Congress within 18 months of enactment.
  • Section 110 reallocated funds collected from the $500 fee enacted in the ACWIA to projects and programs aimed at improving higher technology skills in the US domestic workforce. Sections 111-113 provided more details on how these funds should be allocated. Also, the fee was increased to $1000 by the time AC21 became law.[14]
  • Section 114 excluded some J nonimmigrants from numerical limitations applicable to H-1B nonimmigrants.
  • Section 115 required United States Department of Commerce to conduct a study on the digital divide.
  • Section 116 was a severability provision that said that if any amendment or provision of the Act was deemed invalid, this would not affect the rest of the Act.


An article by Naomi Schorr and Stephen Yale-Loehr in 2003 reviewed AC21, noting the paucity of official USCIS guidance regarding the implementation of the law, while reviewing statements and memoranda by USCIS officials to understand its implications.[15]

A draft memo circulated by USCIS in May 2005 was praised by Immigration Daily as extremely reasonable.[12]

A paper by Carl Lin in 2011 reviewed the effect of immigration policy changes for high-skilled immigration on employers and shareholders in the United States. The paper considered the Immigration Act of 1990, the American Competitiveness and Workforce Improvement Act of 1998, and AC21.[16] Lin's work was cited in Bloomberg by Charles Kenny.[17]

A paper by the Research and Policy Committee of the Committee for Economic Development said of AC21: "CED accepts that AC21 is a necessary response to the exploding demand for high-technology workers. But Congress missed anextraordinary opportunity—one which typically arises no more than once a decade in immigration policy—to achieve deeper, essential reforms that AC21 now makes all the more urgent. As this report illustrates, the fundamental and pervasive problems with the entire immigration system extend far beyond the need for temporary high-technology workers. By focusing narrowly on the H-1B issue and only tentatively dealing with other issues, this legislation neglects other fundamental problems."[18]


  1. ^ "AC21 FAQ". Immigration Voice. Retrieved March 14, 2015. 
  2. ^ a b c "Memorandum for all Service Center Directors" (PDF).  
  3. ^ "Bill Text Versions, 106th Congress (1999-2000), S.2045".  
  4. ^ a b "Analysis of The American Competitiveness in the 21st Century Act (AC21)". Law Office of Carl Shusterman, in cooperation with the  
  5. ^ "AC21". Path2USA. Retrieved March 11, 2015. 
  6. ^ "American Competitiveness in the Twenty-First Century Act (AC21)". U.S. Immigration Visa Center. Retrieved March 11, 2015. 
  7. ^ "S. 2045: One Hundred Sixth Congress of the United States of America, At the Second Session" (PDF).  
  8. ^ "S. 2045: One Hundred Sixth Congress of the United States of America, At the Second Session" (PDF).  
  9. ^ "S. 2045: One Hundred Sixth Congress of the United States of America, At the Second Session" (PDF).  
  10. ^ "AC21 Frequently Asked Questions: July 2012 Update". Murthy Law Firm. January 18, 2008. Retrieved March 14, 2015. 
  11. ^ "Interoffice Memorandum" (PDF).  
  12. ^ a b Eiss, James; Rizzo, Danielle. "USCIS Drafts Exceedingly Reasonable Memo On AC21".  
  13. ^ "Memorandum" (PDF).  
  14. ^ Batalova, Jeanne (April 7, 2010). "H-1B Temporary Skilled Worker Program".  
  15. ^ Schorr, Naomi; Yale-Loehr, Stephen (2003). "Still crazy after all these years: AC21 in 2003" (PDF). Bryan Cave. Retrieved March 14, 2015. 
  16. ^ Lin, Carl. "Give Me Your Wired and Your Highly Skilled: Measuring the Impact of Immigration Policy on Employers and Shareholders". 
  17. ^ "Why More Immigration, Not Less, Is Key to U.S. Economic Growth".  
  18. ^ "Reforming Immigration: Helping Meet America's Need for a Skilled Workforce" (PDF). Committee for Economic Development. Retrieved March 14, 2015. 
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