DHS proposes to collect the money into the Immigration Examinations Fee Account (IEFA)The Trump administration's proposed $103,265 fee on cap-subject H-1B petitions may face a legal challenge, with immigration lawyers questioning whether the Department of Homeland Security (DHS) has the statutory authority to impose such a steep charge and use the proceeds to fund immigration-related activities across multiple federal agencies.The proposed fee is based primarily on section 286(m) of the Immigration and Nationality Act (INA), which allows the secretary of the Department of Homeland Security (DHS) to set fees for immigration adjudication and naturalisation services at a level that recovers their full costs. DHS says the provision, read together with section 286(n), permits it to recover costs incurred not only by US Citizenship and Immigration Services (USCIS) but also by other agencies involved in administering the immigration system.DHS proposes to collect the money into the Immigration Examinations Fee Account (IEFA) and use it to reimburse costs incurred by agencies including USCIS, Immigration and Customs Enforcement (ICE), Customs and Border Protection (CBP), the Executive Office for Immigration Review (EOIR), the State Department and the Department of Labor. The proposed fee is calculated to raise about $8.78 billion annually, based on 85,000 fee-paying cap-subject petitions.That funding mechanism could become a key battleground in any court challenge.Jonathan Wasden, an immigration attorney, said the government's reliance on section 286(m) would be difficult to defend. “That statute limits fees to levels required to recoup costs incurred in adjudication. USCIS is already running a surplus, so such a large increase would be far in excess of the statutory limits,” he said.DHS, however, argues that the law allows it to recover the full aggregate costs of providing immigration benefits and services, including costs incurred by other federal agencies materially involved in delivering those services. It says section 286(n) permits reimbursement of appropriations used for immigration adjudication and naturalisation services.Cyrus Mehta, another immigration attorney, challenged the proposed use of IEFA funds on constitutional as well as statutory grounds. He argued that routing the additional fees through IEFA and then using them to fund other agencies could violate the statute establishing the account, while also raising separation-of-powers concerns, since Congress rather than the executive branch has the constitutional power to appropriate federal spending.The proposal itself acknowledges that DHS is taking a broader approach than it historically has. USCIS fee rules have traditionally focused on recovering USCIS's own costs, while the new proposal would recover costs attributable to ICE, CBP, EOIR, the State Department and Labor Department as well. DHS argues that the statute does not restrict fee-funded cost recovery to USCIS.The American Immigration Lawyers Association (AILA) also warned that the proposal represents an unprecedented attempt to fund immigration processing across multiple federal agencies without specific Congressional authorisation. AILA president Jeff Joseph said the fee would shut out employers relying on H-1B workers for critical positions including teachers, researchers, rural doctors and clergy. “This is executive overreach on steroids, and Congress and the courts must act,” Joseph said.The legal fight could therefore centre on two questions: whether DHS's statutory authority permits it to set a fee of this magnitude, and whether money collected through an immigration fee account can legally be used to reimburse spending by multiple other agencies.