[Federal Register Volume 82, Number 7 (Wednesday, January 11, 2017)]
[Proposed Rules]
[Pages 3211-3216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00441]

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Proposed Rules
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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DEPARTMENT OF HOMELAND SECURITY

8 CFR Parts 204 and 216

[CIS No. 2595-16; DHS Docket No. USCIS-2016-0008]
RIN 1615-AC11

EB-5 Immigrant Investor Regional Center Program

AGENCY: U.S. Citizenship and Immigration Services, DHS.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Department of Homeland Security (DHS) is considering
making regulatory changes to the EB-5 Immigrant Investor Regional
Center Program. Based on decades of experience operating the program,
DHS has determined that program changes are needed to better reflect
business realities for regional centers and EB-5 immigrant investors,
to increase predictability and transparency in the adjudication process
for stakeholders, to improve operational efficiency for the agency, and
to enhance program integrity. This Advance Notice of Proposed
Rulemaking (ANPRM) is organized to include requests for comment
immediately following discussions of the relevant issues.

DATES: Written comments must be received on or before April 11, 2017.

ADDRESSES: You may submit comments, identified by DHS Docket No. USCIS-
2016-0008, by any one of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: You may send comments directly to U.S. Citizenship
and Immigration Services (USCIS) by mail to Samantha Deshommes, Chief,
Regulatory Coordination Division, Office of Policy and Strategy, U.S.
Citizenship and Immigration Services, Department of Homeland Security,
20 Massachusetts Ave. NW., Washington, DC 20529. To ensure proper
handling, please reference DHS Docket No. USCIS-2016-0008 in your
correspondence. This mailing address may be used for paper or CD-ROM
submissions.
Hand Delivery/Courier: You may submit comments directly to
USCIS through hand delivery to Samantha Deshommes, Chief, Regulatory
Coordination Division, Office of Policy and Strategy, U.S. Citizenship
and Immigration Services, Department of Homeland Security, 20
Massachusetts Ave. NW., Washington, DC 20529; Telephone 202-272-8377.
To ensure proper handling, please reference DHS Docket No. USCIS-2016-
2008 in your correspondence.

FOR FURTHER INFORMATION CONTACT: Lori MacKenzie, Division Chief,
Operations Policy and Performance, Immigrant Investor Program Office,
U.S. Citizenship and Immigration Services, Department of Homeland
Security, 131 M St. NE., 3rd Floor, Washington, DC 20529; Telephone
202-357-9214.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Public Participation
II. Background
A. The EB-5 Program
B. The Regional Center Program
III. Requests for Information
A. Process for Initial Designation and Exemplar Approval
B. Safeguards for Monitoring and Oversight
C. Continued Participation
D. Termination

List of Acronyms and Abbreviations Used

ANPRM Advance Notice of Proposed Rulemaking
DHS Department of Homeland Security
JCE Job-Creating Entity
LPR Lawful Permanent Resident
NCE New Commercial Enterprise
NOID Notice of Intent To Deny
NPRM Notice of Proposed Rulemaking
RFE Request for Evidence
USCIS United States Citizenship and Immigration Services

I. Public Participation

This ANPRM provides an opportunity for DHS to hear and consider the
views of the public on potential changes to improve and modify the EB-5
Regional Center Program. DHS invites comments, data, and information
from all interested parties, including regional centers, investors,
advocacy groups, nongovernmental organizations, community-based
organizations, and legal representatives who specialize in immigration
law, as well as corporate and securities law. DHS welcomes comments on
any and all aspects of this ANPRM. Your comments can help shape the
outcome of this possible rulemaking.
DHS is issuing this ANPRM to seek comment from all interested
stakeholders on several topics, including: (1) The process for
initially designating entities as regional centers, (2) a potential
requirement for regional centers to utilize an exemplar filing process,
(3) ``continued participation'' requirements for maintaining regional
center designation, and (4) the process for terminating regional center
designation. While DHS has gathered some information related to these
topics, DHS is seeking additional information that can help the
Department make operational and security updates to the Regional Center
Program while minimizing the impact of such changes on regional center
operations and EB-5 investors.
When submitting comments, please indicate the specific section of
this document to which each comment applies, indicate the specific
question number to which each comment applies, and provide reasons for
each suggestion or recommendation. Feedback that simply states that a
stakeholder strongly prefers a particular outcome, unaccompanied by
careful reasoning and actionable data, is much less useful to DHS.
DHS is particularly interested in data that would inform a
quantitative and qualitative assessment of the costs and benefits of
the potential changes described in this ANPRM. DHS is also interested
in comments from the public that provide more information how to
identify the small entity status of EB-5 stakeholder entities, such as
regional centers and new commercial enterprises. DHS specifically
requests information on revenue or employment data sources on regional
centers and new commercial enterprises.
Instructions: All submissions for this advance notice of proposed
rulemaking must include the DHS Docket No. USCIS-2016-0008. Please note
that DHS has published a notice of proposed rulemaking entitled ``EB-5
Immigrant Investor Program Modernization,'' DHS Docket No. USCIS-2016-
0006, separate

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from this ANPRM. The NPRM and ANPRM include distinct proposals, so
please ensure that you submit your comments to the correct docket.
Comments must be submitted in English, or an English translation
must be provided. Written comments may be submitted electronically or
by mail, as explained previously in the ADDRESSES section of this
ANPRM. To avoid duplication, please use only one of these methods to
submit written comments. Regardless of the method used for submitting
comments or material, all submissions will be posted, without change,
to the Federal eRulemaking Portal at http://www.regulations.gov, and
will include any personal information you provide. Therefore,
submitting this information makes it public. You may wish to consider
limiting the amount of personal information that you provide in any
voluntary public comment submission you make to DHS. DHS may withhold
information provided in comments from public viewing that it determines
may impact the privacy of an individual or is offensive. For additional
information, please read the Privacy Act notice that is available via
the link in the footer of http://www.regulations.gov.
Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov and enter this
ANPRM's docket number in the search bar.

II. Background

A. The EB-5 Program

As part of the Immigration Act of 1990, Public Law 101-649, 104
Stat. 4978, Congress established the EB-5 immigrant visa classification
to incentivize employment creation in the United States. Under the EB-5
program, lawful permanent resident (LPR) status is available to foreign
nationals who invest at least $1 million in a new commercial enterprise
(NCE) that will create at least 10 full-time jobs in the United States.
See INA section 203(b)(5), 8 U.S.C. 1153(b)(5). A foreign national may
invest $500,000 if the investment is in a ``targeted employment area,''
defined to include certain rural areas and areas of high unemployment.
Id. The INA allots 9,940 immigrant visas each fiscal year for foreign
nationals seeking to enter the United States under the EB-5
classification. See INA section 201(d), 8 U.S.C. 1151(d); INA section
203(b)(5), 8 U.S.C. 1153(b)(5). Not less than 3,000 of these visas must
be reserved for foreign nationals investing in targeted employment
areas. See INA section 203(b)(5)(B), 8 U.S.C. 1153(b)(5)(B).

B. The Regional Center Program

Enacted in 1992, section 610 of the Departments of Commerce,
Justice, State, and State, and Related Agencies Appropriations Act,
1993, Public Law 102-395, 106 Stat. 1828, established a pilot program
that requires the allocation of a limited number of EB-5 immigrant
visas to individuals who invest in new commercial enterprises through
DHS-designated regional centers.\1\ DHS regulations define a regional
center as an economic unit, public or private, that promotes economic
growth, regional productivity, job creation, and increased domestic
capital investment. See 8 CFR 204.6(e). While all EB-5 petitioners go
through the same petition process, those petitioners participating in
the Regional Center Program may meet statutory job creation
requirements based on economic projections of either direct or indirect
job creation, rather than only on jobs directly created by the new
commercial enterprise. See 8 CFR 204.6(m)(3). In addition, Congress
authorized the Secretary to give priority to EB-5 petitions filed
through the Regional Center Program. See section 601(d) of Public Law
102-395, 106 Stat. 1828, as amended by Public Law 112-176, Sec. 1, 126
Stat. 1326 (Sept. 28, 2012).
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\1\ Current law requires that DHS annually set aside 3,000 EB-5
immigrant visas for regional center investors. Section 116 of Public
Law 105-119, 111 Stat. 2440 (Nov. 26, 1997). If this full annual
allocation is not used, remaining visas may be allocated to foreign
nationals who do not invest in regional centers.
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Requests for regional center designation must be filed with USCIS
on the Application for Regional Center Under the Immigrant Investor
Program (Form I-924). See 8 CFR 204.6(m)(3)-(4). Once designated,
regional centers must provide USCIS with updated information to
demonstrate continued eligibility for the designation by submitting an
Annual Certification of Regional Center (Form I-924A) on an annual
basis or as otherwise requested by USCIS. See 8 CFR 204.6(m)(6)(i)(B).
USCIS may seek to terminate a regional center's participation in the
program if the regional center no longer qualifies for the designation,
the regional center fails to submit the required information or pay the
associated fee, or USCIS determines that the regional center is no
longer promoting economic growth. See 8 CFR 204.6(m)(6)(i). As of
November 1, 2016, there were 864 designated regional centers.\2\
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\2\ USCIS, Immigrant Investor Regional Centers, https://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/immigrant-investor-regional-centers.
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The former Immigration and Naturalization Service last promulgated
comprehensive regulations implementing the EB-5 Regional Center Program
in 1993. 58 FR 44606. Although Congress has revised the program
multiple times since, see Public Law 106-396, 114 Stat. 1637; Public
Law 107-273, 116 Stat. 1758 (2002 statutory amendments), the
regulations have not been updated to conform to the statutory changes.
Neither have the regulations been amended to make improvements to the
program based on the Department's experience implementing the program
for the last 25 years.

III. Requests for Information

DHS is considering changes to the Regional Center Program regarding
the requirements for initial designation and continued participation, a
potential requirement for regional centers to utilize an exemplar
process, and the grounds for terminating regional center designation.

A. Process for Initial Designation and Exemplar Approval

DHS is considering ways to improve the process associated with the
initial designation of regional centers and the approval of
``exemplar'' projects. Currently, an entity applying for initial
designation as a regional center may choose whether to present a
hypothetical project, an actual project, or an exemplar project with
their Application For Regional Center Under the Immigrant Investor
Program (Form I-924 application). A request for review of a
hypothetical project should be supported by general proposals and
general predictions showing that the proposed regional center will more
likely than not promote economic growth and job creation.
Organizational and transactional supporting documents are not required
for a hypothetical project. Previous determinations based on
hypothetical projects will not receive deference in the adjudication of
subsequent filings.
If the entity includes an actual or exemplar project proposal with
its Form I-924 application, USCIS determines, as part of the Form I-924
adjudication, whether USCIS will accord deference to its approval of
that project when USCIS later reviews investor petitions associated
with the same regional center

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and based on the same project. A request for review of an actual
project requires a comprehensive and credible business plan that, among
other things, provides a description of the business and verifiable
detail on how jobs will be created. Organizational and transactional
supporting documents for the new commercial enterprise are not required
for an actual project. Deference generally will be accorded to prior
approval of the business plan and economic analysis in subsequent
filings related to an approved actual project.
A request for review of an exemplar project is comprised of a
sample Form I-526 petition filed with a proposed actual project
containing copies of the new commercial enterprise's organizational and
transactional documents. USCIS currently reviews exemplars to determine
if they are in compliance with established EB-5 eligibility
requirements. If the exemplar project is approved, the determination
generally is accorded deference in subsequent related Form I-526 and
Form I-829 filings.\3\
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\3\ Deference may also be accorded to the approval of a regional
center investor's Form I-526 or Form I-829 petition in the
adjudication of related Form I-526 and Form I-829 petitions based
upon an investment in the same investment project with the same
project documents. Investors may submit evidence of association with
an exemplar project before or while the regional center's exemplar
is pending with USCIS, or after the exemplar is approved.
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DHS believes that the existing process presents two problems.
First, the adjudication of initial applications for regional center
designation become much more complex when entities seeking such
designation ``bundle'' their initial applications with actual or
exemplar projects. Under the current process, regional centers often
include a host of documents related to actual or exemplar projects with
their Form I-924 applications, including project proposals and related
organization and transactional documents, such as private placement
memoranda, subscription agreements, operating and partnership
agreements, and other information. USCIS must review all such documents
submitted with Form I-924 applications, even though the information
contained in such documents is frequently unrelated to adjudication of
the regional center designation (i.e., determining whether to designate
the applying entities as regional centers).
Second, by allowing regional centers to choose whether to submit an
exemplar project at all, USCIS effectively lets those entities
determine the level of workload for the agency related to each EB-5
project. When a regional center submits an exemplar proposal, USCIS
must only assess the project once at an initial stage. Any issues
related to project approval are considered and resolved at this initial
stage, thus making individual immigrant investor petitions submitted
pursuant to that project simpler to adjudicate. In contrast, when a
regional center does not use the exemplar process, USCIS is presented
with the project proposal multiple times, including with each
individual immigrant investor petition submitted pursuant to that
project. At this stage, issues related to project approval often
require USCIS to issue a Request for Evidence (RFE) or a Notice of
Intent to Deny (NOID) to each individual petitioner who is investing in
that project. This presents a significant burden on the agency and each
individual petitioner, and significantly delays the adjudication of
their petitions.
To address these issues, DHS is seeking comment on whether it
should bifurcate the Form I-924 application process into two steps, as
follows: DHS would first require submission of a more general
application for initial designation, and then, subsequent to
designation, would require submission of a more specific application
for approval of an exemplar project. DHS is considering a different
form and fee for each of the two steps. DHS believes these changes
would significantly reduce the issuance of RFEs and NOIDs and improve
processing times for both applications for regional center designation
and immigrant investor petitions. Individual immigrant investors would
also bear a lower paperwork burden and would benefit from improved
predictability in adjudications. DHS describes each potential change in
turn below.
1. General Application for Initial Designation
As noted above, DHS seeks comment on its proposal to require
entities seeking regional center designation to submit a more general
application for such designation (i.e., without including documentation
related to actual or exemplar projects). DHS expects that the
information required to be submitted in such an application would
generally conform to the requirements contained in the regional center
statute, as amended. Under this process, an applicant for regional
center designation would only need to include a general proposal based
on general predictions concerning the kinds of commercial enterprises
that will receive capital from immigrant investors, the jobs that will
be created directly or indirectly as a result of such capital
investments, and the other positive effects such capital investments
will have on economic growth. Further information about investments and
regional center projects would generally not be required or reviewed as
part of this initial filing. After USCIS designates the entity as a
regional center, the regional center would be able to request review of
investment offering documents and project documents, including the
types of documents that typically accompany an ``exemplar'' project
filing under current practice.
DHS believes this change would provide several benefits to
stakeholders and USCIS. First, DHS believes the change would reduce
confusion by simplifying the application for regional center
designation and providing increased guidance on the limited types of
information expected by the agency for adjudicating such applications.
Second, the change would likely improve adjudication times related to
such applications, as USCIS adjudicators would no longer need to review
documentation that is unrelated to determining whether the applicant
has satisfied the basic requirements for initial designation. Third,
the change should reduce the frustration currently experienced by
entities that meet the evidentiary requirements for initial designation
but fail to meet the evidentiary requirements necessary to meet
applicable deference guidelines for their projects and investment
offerings. DHS understands that the inability of entities to file other
requests when seeking initial designation as a regional center could
effectively delay the ability of entities to receive decisions on those
requests. DHS, however, believes these impacts may be outweighed by the
clarity provided to stakeholders and the operational efficiencies
gained by the proposal.
2. Mandatory Exemplar Process
As noted above, DHS also seeks comment on its proposal to implement
an exemplar filing requirement for all designated regional centers. DHS
is considering (1) requiring regional centers to file exemplar project
requests, both to support individual EB-5 immigrant petitions and to
maintain regional center designation and (2) requiring the approval of
such a request before any investor may submit his or her EB-5 immigrant
petition associated with a project covered by such request. As
envisioned by DHS, USCIS would use the approved exemplar as evidence
when adjudicating individual immigrant petitions related to the
exemplar project.

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Under the exemplar filing requirement, regional centers would be
required to submit all documentation necessary to establish that
investments in the project would satisfy the eligibility criteria
related to investment and job creation, in addition to evidence
demonstrating the regional center's continued compliance with Regional
Center Program rules. Currently, exemplars typically include a
comprehensive business plan, economic impact analysis, offering
documents and organizational documents. Because DHS wants to ensure
investments sponsored by the regional center are fully compliant with
program requirements to maintain regional center designation, DHS is
considering requiring that additional documentation be provided with
exemplar filings, including (1) any documents related to the investment
offering that have been filed with the U.S. Securities and Exchange
Commission; and (2) any investment and offering documents that the
regional center intends to provide to investors, as well as any
agreements between the investor and the regional center.
DHS also seeks comment on the appropriate validity period for the
approval of an exemplar project to ensure the regional center is
actively promoting economic growth. DHS is considering limiting each
exemplar's validity period to a specific period of time, e.g., 2 to 3
years after the exemplar's approval or latest amendment or associated
immigrant investor petition. DHS has determined that regional center
projects that for 2 to 3 years have not been amended and have not
obtained EB-5 investments are generally not active. DHS is seeking
public comments on potential exemplar approval validity periods,
including the amount of time needed for regional centers to recruit
investors, the amount of time needed for investors to file EB-5
immigrant petitions, and the amount of time needed for projects to
satisfy job creation requirements.
Finally, DHS seeks public comment on possible modifications to the
existing policy governing the impact of a ``material change'' on an
approved exemplar. Current policy requires DHS to deny petitions where,
after the petition has been filed, there are significant changes to the
exemplar project, including significant changes to the job-creating
entity or entities receiving associated EB-5 investment. Under this
policy, DHS has also denied petitions, on a case-by-case basis, where
in the time between approval of the exemplar and adjudication of the
petition, there were significant changes to project timelines and
changes to job creation methodologies.\4\ Regional centers and other
stakeholders may feel that modifications to this policy may be
necessary or wise if DHS were to implement a mandatory exemplar
process. Public comment on this issue would help DHS determine whether
and how to revise USCIS's current approach to addressing material
changes in the EB-5 context to account for a potential mandatory
exemplar process.
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\4\ See USCIS Policy Manual, 6 USCIS-PM G (Nov. 30, 2016).
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DHS is considering these process changes as a means of addressing
the increasing processing times associated with EB-5 immigrant
petitions. DHS believes that by addressing potential issues with EB-5
projects in the exemplar process, the Department would significantly
streamline the adjudication process for immigrant petitions filed by
associated investors, including by significantly reducing the need to
issue RFEs and NOIDs to those investors. Individual immigrant investors
would also bear a lower paperwork burden and would benefit from
improved predictability in adjudications. Moreover, an exemplar
requirement may also lead to substantial government cost savings by
reducing the paperwork, staffing, and physical space required to
process EB-5 immigrant petitions. DHS understands that a mandatory
exemplar process could negatively impact regional centers and investors
by delaying investor filings and, as a practical matter given the
prevailing structure of many regional center investment offerings, by
delaying funding to regional center projects. DHS believes, however,
that the operational efficiencies, reduced processing times, increased
stakeholder predictability, and reduced paperwork burden resulting from
the exemplar process described above would provide sufficient benefits
to overcome these impacts.
3. Specific Questions for Public Input
DHS welcomes public comment on all aspects of the potential changes
described above, but would particularly benefit from commenters
addressing one or more of the following questions:
1. How can USCIS improve the initial designation process?
2. How would requiring an entity to obtain initial designation as a
regional center prior to, and separate from, filing for approval of an
exemplar project impact entities seeking regional center designation
and investors seeking to associate with designated regional centers?
3. Would a bifurcated initial application process achieve the
benefits discussed above--i.e., reduced overall paperwork burdens and
improved processing times? Please provide specific data on how such
changes would affect time or other burdens in initial documentation
preparation.
4. What additional costs or benefits, if any, would occur as a
result of adopting the suggested approach?
5. Would adopting the suggested approach impact small entities? If
so, how? Please provide data to support your response. Please identify
any alternative policy proposals or other recommendations that would
accomplish some or all of the goals identified above, while mitigating
impacts on small entities.
6. Would it benefit potential immigrant investors to know whether
or not an entity has been designated as a regional center, if the
initial designation decision notice is solely for designation and does
not include any decisions on exemplar projects?
7. Would a streamlined exemplar filing process impact any regional
center or investor costs?
8. Should exemplar approval be required prior to a regional center-
associated investor submitting an EB-5 immigrant petition? Please
support the response by providing information regarding the costs and
benefits of alternatives (e.g., by permitting concurrent filing with
EB-5 immigrant petitions).
9. What additional costs and benefits would regional centers or
investors incur as a result of a required exemplar approval prior to
submitting EB-5 immigrant petitions?
10. What documentation should be required to accompany an exemplar
application?
11. In what circumstances should a regional center be required to
file to amend a previously approved exemplar?
12. For what duration should an exemplar approval be valid, and
why?
13. Under what circumstances should USCIS seek to terminate a
previously approved exemplar?
14. What effect, if any, should termination or expiration of an
approved exemplar have on an investor whose immigrant visa petition has
not yet been adjudicated?
15. What concerns, if any, would be raised by the elimination of
the ``actual'' project deference process, wherein regional centers seek
approval of the business plan and economic impact analysis associated
with an investment offering, but not the investment offering documents?

[[Page 3215]]

16. Would some projects be deterred by a requirement to have an
approved exemplar? DHS is particularly interested in how the exemplar
requirement may affect the number of projects that obtain EB-5
investment and associated parties. Additionally, DHS seeks input on how
an exemplar requirement might affect costs related to project
timelines, business plan fees, and regional center administrative fees.
17. Would an exemplar requirement impact the financial structure of
regional center investments? For example, would such a requirement
decrease or increase the EB-5 capital portion of a project's total
finance? Would it impact the overall financing costs and rates of
return for investors, regional centers, and developers?
18. How could USCIS define the term ``material change'' to account
for the exemplar process, consistent with applicable regulations and
case law, including regulations requiring petitioners to be eligible
for the requested benefit at the time of filing and to remain eligible
until the benefit is granted? \5\ Please discuss how a new material
change definition would impact pending EB-5 immigrant petitions.
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\5\ See 8 CFR 103.2(b)(1), 8 CFR 205.2; see also Matter of
Izummi, 22 I&N Dec. 169 (Assoc. Comm'r 1998), Matter of Tawfik, 20
I&N Dec. 166 (BIA 1990), Matter of Arias, 19 I&N Dec. 568 (BIA
1988), Matter of Estime, 19 I&N Dec. 450 (BIA 1987).
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B. Safeguards for Monitoring and Oversight

DHS has found that current regulations would benefit from
additional safeguards to ensure that all regional centers (1) use
immigrant investor funds to promote economic growth, and (2) protect
against the misuse of such funds. DHS is therefore considering
incorporating additional regulatory requirements for initial
designation as a regional center. For instance, DHS could require
assurances that the regional center commit to an appropriate level of
internal monitoring and oversight of investment offerings and business
activities associated with the regional center or under its
sponsorship. This would include investment offerings and business
activities of any associated new commercial enterprises (NCEs) or job-
creating entities (JCEs). DHS is seeking to help ensure that the
stakeholder granted a regional center designation will perform
appropriate oversight and monitoring with respect to capital
investments, job creation, and business activities under its auspices
such that the pooled capital investments at its NCEs and JCEs will
promote economic growth.
DHS seeks data and information on potential methods for ensuring an
appropriate level of monitoring and oversight, including through
regional center attestations, the submission of detailed information
about the regional center's oversight efforts of its NCEs and JCEs, and
other compliance and enforcement mechanisms. DHS understands that these
and similar measures may be burdensome to stakeholders, but believes
that such requirements could improve the regional center program by
providing regional centers with the tools to ensure that associated
NCEs and JCEs comply with program requirements. This would ensure only
regional centers with effective oversight could operate within the
program. DHS believes that this would enhance the program's integrity
and ultimately benefit both regional centers and investors by providing
greater trust in the entities operating within the program.
DHS welcomes public comment on the issues described above, but
would particularly benefit from commenters addressing one or more of
the following questions:
1. What would be the most effective and efficient way to add
monitoring and oversight requirements? Should such requirements be
incorporated into the initial designation stage, the exemplar stage, or
throughout the period of the regional center's designation?
2. What forms of monitoring and oversight of NCEs, JCEs, and
investor funds are regional centers currently utilizing as part of
their best practices?
3. Do other entities associated with regional centers engage in
monitoring and oversight?
4. What benefits, if any, would additional monitoring and oversight
offer to regional centers and to immigrant investors?
5. What types of documentation would be appropriate for regional
centers to submit to establish that they will have an adequate
monitoring and oversight process in place upon designation?
6. What measures, if any, have regional centers put in place to
identify conflicts of interest by regional center participants? What
requirements for identification and disclosure of conflicts of interest
would be appropriate in the regional center context?
7. What investment and other economic impacts could be expected
from the establishment of new monitoring and oversight requirements?
8. What data and information should USCIS consider affirmatively
disclosing to increase transparency in the EB-5 program?
9. What additional costs would stakeholders incur in setting up and
maintaining a monitoring and oversight process?
10. Would an additional filing fee or additional costs to regional
centers in preparing documentation for separate filings be too
burdensome to support or justify the suggested initial filing
framework?
11. Would any of the potential changes described above either deter
or incentivize participation in the program, or directly affect the
viability of certain types of investment projects? If so, how could
USCIS best measure the likely effects?
12. Would any of the potential changes described above impact small
entities? If so, how? Please provide data to support your response.
Please identify any alternative policy proposals or other
recommendations that would accomplish some or all of the goals
identified above, while mitigating impacts on small entities.

C. Continued Participation

DHS is considering ways to clarify the requirements for regional
centers to maintain their designation. Under the current regulatory
framework, regional centers must provide USCIS with updated information
to demonstrate they are continuing to meet program requirements--i.e.,
promoting economic growth, improved regional productivity, job
creation, or increased domestic capital investment in the approved
geographic area. Such information must be submitted to USCIS on an
annual basis or as otherwise requested by USCIS, generally by filing
the Annual Certification of Regional Center (Form I-924A). See 8 CFR
204.6(m)(6). USCIS will issue a notice of intent to terminate the
participation of a regional center in the EB-5 program if a regional
center fails to submit the required information or upon a determination
that the regional center no longer meets program requirements. Id.
The requirement that regional centers continue to serve the purpose
of promoting economic growth is subject to varying interpretations, and
regional centers have expressed uncertainty regarding the requirements
for continued participation. In addition, DHS has found that a number
of regional centers have maintained their designation without actually
engaging in work related to the EB-5 program, which has led to growing
concerns of potential fraud.
DHS is therefore considering certain changes to the regulations
governing

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continued regional center designations, including changes that would
require existing and newly designated regional centers to demonstrate
that they continue to meet applicable statutory and regulatory
requirements. Specifically, DHS is considering the following
requirements for continued participation:
Requiring evidence of active participation in the regional
center program. Such evidence could include having an approved and
currently valid exemplar; having pending exemplar applications that
were filed within a specific time frame; or the existence of pending
Form I-526 or I-829 petitions that are associated with the regional
center and that were filed within a specific time frame.
Requiring periodic demonstrations that the regional center
has active monitoring and oversight activities as described in the
previous section.
Requiring prompt notification to DHS of significant
changes to the regional center through the timely filing of amendments
to the regional center designation. The effect of such a requirement
would turn on how DHS interprets the term ``significant'' in this
context. For instance, DHS currently considers the following change to
the regional center to be significant: \6\
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\6\ See 81 FR 73292; Form I-924 is available at http://www.uscis.gov/I-924.
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Changes to the regional center's name;
Changes to the regional center's ownership;
Changes to the regional center's organizational structure;
Changes to the regional center's administration that
affect its oversight and reporting responsibilities;
Changes to add or remove regional center principals; and/
or
Changes to the geographic scope of the regional center.

DHS is considering whether or not other changes may be deemed
significant, such as material changes to an approved exemplar filing.
DHS welcomes public comment on all aspects of the potential changes
described above, but would particularly benefit from commenters
addressing one or more of the following questions:
1. How would regional centers or immigrant investors benefit, if at
all, from an explicit requirement that the regional center actively
participate in the Regional Center Program?
2. What activities demonstrate active participation in the Regional
Center Program? What evidence should regional centers be required to
provide to demonstrate active participation?
3. If DHS conditions a finding of active participation on evidence
that the regional center is associated with an approved and valid
exemplar, a pending exemplar application, or a pending Form I-526 or I-
829 petition associated with the regional center, how long should the
regional center be able to retain its designation in the absence of
such approved or pending exemplar or pending petition? Why is such a
timeframe appropriate?
4. How would a continual monitoring and oversight requirement
impact currently designated regional centers?
5. How would a monitoring and oversight requirement impact small
entities? Please provide data to support your response. Please identify
any alternative policy proposals or other recommendations that would
accomplish some or all of the goals identified above, while mitigating
impacts on small entities.
6. In what circumstances should a regional center be required to
amend a regional center designation during an out-of-cycle filing?
7. What additional changes to the regional center amendment process
would assist stakeholders in complying with the process?
8. Should DHS reconsider the current filing structure for notifying
USCIS of the suggested changes--i.e., filing an amended Form I-924
petition with a fee? If so, what would be appropriate alternatives, and
why?

D. Termination

Currently, USCIS can issue a Notice of Intent to Terminate and
subsequently terminate a regional center designation if the regional
center fails to submit required information annually, or if USCIS
determines that the regional center no longer serves the purpose of
promoting economic growth. See 8 CFR 204.6(m)(6). DHS is considering
providing additional regulatory guidance to help stakeholders better
understand the actions that can lead to termination of a regional
center designation. Providing more detail about the types of activity
(or inactivity) that may result in termination of the regional center
would help regional centers better understand their obligations. This
guidance would assist USCIS in more efficiently terminating non-
compliant regional centers and ultimately help strengthen program
integrity by providing a consistent framework for adjudication of these
decisions. Finally, this guidance would help ensure that regional
centers are legitimately pooling capital investment and promoting
economic growth consistent with the purpose of the Regional Center
Program.
Some of the activities that DHS is considering explicitly listing
as activities that would result in termination of the regional center
include:
Failure to meet the continued participation requirements;
Obtaining designation by fraud or misrepresentation;
Using unlawfully sourced funds to run regional center
operations; or
Misusing investor funds, including, but not limited to,
use in any unlawful activity (e.g., Ponzi schemes).
DHS is seeking stakeholder input on actions that would cause USCIS
to initiate termination actions against a regional center. DHS welcomes
public comment on all aspects of the termination considerations, but
would particularly benefit from commenters addressing one or more of
the following questions:
1. What should DHS do to more effectively regulate the regional
centers participating in this program?
2. Should the failure to maintain approved exemplar filings result
in termination?
3. What activities should be considered a failure to promote
economic growth and result in termination of the regional center?
4. What impact, positive or negative, would changes to clarify the
termination grounds and process have on regional centers and/or
investors? What impact would the changes have on small entities? Please
provide data to support your response. Please identify any alternative
policy proposals or other recommendations that would accomplish some or
all of the goals identified above, while mitigating impacts on small
entities.
5. What other factors impacting the regional center and/or
investors should DHS consider when terminating a regional center?

Jeh Charles Johnson,
Secretary.
[FR Doc. 2017-00441 Filed 1-10-17; 8:45 am]
BILLING CODE 9111-97-P