LAW & POLICY NOTE (August 2023)
In 2021, California created a groundbreaking grant program, Social Entrepreneurs for Economic Development (SEED), which awarded nonprofit community-based organizations almost $10 million in state funds to provide entrepreneurial training and microgrants to individuals facing substantial barriers to gainful employment due to their immigration status or limited English proficiency. SEED supported individuals in launching or maintaining a small business to address a social problem or meet a community need, as well as the development of worker-owned cooperatives in low-wage industries. The state codified SEED, in order to eliminate even the smallest risk that an anti-immigrant provision of federal welfare law, 8 U.S.C. § 1621, could be used in an attempt to invalidate the program. Section 1621 was passed by Congress in 1996 to restrict the eligibility of undocumented individuals for “state or local public benefits”—and has been the basis of lawsuits attacking state and locally funded initiatives for undocumented individuals. We discuss section 1621, with a focus on how state and local grant programs like SEED for undocumented workers can be shielded against a section 1621 challenge.