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  • News: DHS Publishes Final Rule On International Entrepreneur Rule

    [Federal Register Volume 82, Number 10 (Tuesday, January 17, 2017)]
    [Rules and Regulations]
    [Pages 5238-5289]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 2017-00481]

    [[Page 5237]]

    Vol. 82

    Tuesday,

    No. 10

    January 17, 2017

    Part V

    Department of Homeland Security

    -----------------------------------------------------------------------

    8 CFR Parts 103, 212, and 274a

    International Entrepreneur Rule; Final Rule

    Federal Register / Vol. 82 , No. 10 / Tuesday, January 17, 2017 /
    Rules and Regulations

    [[Page 5238]]

    -----------------------------------------------------------------------

    DEPARTMENT OF HOMELAND SECURITY

    8 CFR Parts 103, 212, and 274a

    [CIS No. 2572-15; DHS Docket No. USCIS-2015-0006]
    RIN 1615-AC04

    International Entrepreneur Rule

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

    ACTION: Final rule.

    -----------------------------------------------------------------------

    SUMMARY: This final rule amends Department of Homeland Security (DHS)
    regulations to implement the Secretary of Homeland Security's
    discretionary parole authority in order to increase and enhance
    entrepreneurship, innovation, and job creation in the United States.
    The final rule adds new regulatory provisions guiding the use of parole
    on a case-by-case basis with respect to entrepreneurs of start-up
    entities who can demonstrate through evidence of substantial and
    demonstrated potential for rapid business growth and job creation that
    they would provide a significant public benefit to the United States.
    Such potential would be indicated by, among other things, the receipt
    of significant capital investment from U.S. investors with established
    records of successful investments, or obtaining significant awards or
    grants from certain Federal, State or local government entities. If
    granted, parole would provide a temporary initial stay of up to 30
    months (which may be extended by up to an additional 30 months) to
    facilitate the applicant's ability to oversee and grow his or her
    start-up entity in the United States.

    DATES: This final rule is effective July 17, 2017.

    FOR FURTHER INFORMATION CONTACT: Steven Viger, Adjudications Officer,
    Office of Policy and Strategy, U.S. Citizenship and Immigration
    Services, Department of Homeland Security, 20 Massachusetts Avenue NW.,
    Suite 1100, Washington, DC 20529-2140; Telephone (202) 272-1470.

    SUPPLEMENTARY INFORMATION:

    Table of Contents

    I. Executive Summary
    A. Purpose of the Regulatory Action
    B. Legal Authority
    C. Summary of the Final Rule Provisions
    D. Summary of Changes From the Notice of Proposed Rulemaking
    E. Summary of Costs and Benefits
    F. Effective Date
    II. Background
    A. Current Framework
    B. Final Rule
    III. Public Comments on Proposed Rule
    A. Summary of Public Comments
    B. Legal Authority
    C. Significant Public Benefit
    D. Definitions
    E. Application Requirements
    F. Parole Criteria and Conditions
    G. Employment Authorization
    H. Comments on Parole Process
    I. Appeals and Motions To Reopen
    J. Termination of Parole
    K. Opposition to the Overall Rule
    L. Miscellaneous Comments on the Rule
    M. Public Comments on Statutory and Regulatory Requirements
    IV. Statutory and Regulatory Requirements
    A. Unfunded Mandates Reform Act of 1995
    B. Small Business Regulatory Enforcement Fairness Act of 1996
    C. Executive Orders 12866 and 13563
    1. Summary
    2. Purpose of the Rule
    3. Volume Estimate
    4. Costs
    5. Benefits
    6. Alternatives Considered
    D. Regulatory Flexibility Act
    E. Executive Order 13132
    F. Executive Order 12988
    G. Paperwork Reduction Act

    I. Executive Summary

    A. Purpose of the Regulatory Action

    Section 212(d)(5) of the Immigration and Nationality Act (INA), 8
    U.S.C. 1182(d)(5), confers upon the Secretary of Homeland Security the
    discretionary authority to parole individuals into the United States
    temporarily, on a case-by-case basis, for urgent humanitarian reasons
    or significant public benefit. DHS is amending its regulations
    implementing this authority to increase and enhance entrepreneurship,
    innovation, and job creation in the United States. As described in more
    detail below, the final rule would establish general criteria for the
    use of parole with respect to entrepreneurs of start-up entities who
    can demonstrate through evidence of substantial and demonstrated
    potential for rapid growth and job creation that they would provide a
    significant public benefit to the United States. In all cases, whether
    to parole a particular individual under this rule is a discretionary
    determination that would be made on a case-by-case basis.
    Given the complexities involved in adjudicating applications in
    this context, DHS has decided to establish by regulation the criteria
    for the case-by-case evaluation of parole applications filed by
    entrepreneurs of start-up entities. By including such criteria in
    regulation, as well as establishing application requirements that are
    specifically tailored to capture the necessary information for
    processing parole requests on this basis, DHS expects to facilitate the
    use of parole in this area.
    Under this final rule, an applicant would need to demonstrate that
    his or her parole would provide a significant public benefit because he
    or she is the entrepreneur of a new start-up entity in the United
    States that has significant potential for rapid growth and job
    creation. DHS believes that such potential would be indicated by, among
    other things, the receipt of (1) significant capital investment from
    U.S. investors with established records of successful investments or
    (2) significant awards or grants from certain Federal, State, or local
    government entities. The final rule also includes alternative criteria
    for applicants who partially meet the thresholds for capital investment
    or government awards or grants and can provide additional reliable and
    compelling evidence of their entities' significant potential for rapid
    growth and job creation. An applicant must also show that he or she has
    a substantial ownership interest in such an entity, has an active and
    central role in the entity's operations, and would substantially
    further the entity's ability to engage in research and development or
    otherwise conduct and grow its business in the United States. The grant
    of parole is intended to facilitate the applicant's ability to oversee
    and grow the start-up entity.
    DHS believes that this final rule will encourage foreign
    entrepreneurs to create and develop start-up entities with high growth
    potential in the United States, which are expected to facilitate
    research and development in the country, create jobs for U.S. workers,
    and otherwise benefit the U.S. economy through increased business
    activity, innovation, and dynamism. Particularly in light of the
    complex considerations involved in entrepreneur-based parole requests,
    DHS also believes that this final rule will provide a transparent
    framework by which DHS will exercise its discretion to adjudicate such
    requests on a case-by-case basis under section 212(d)(5) of the INA, 8
    U.S.C. 1182(d)(5).

    B. Legal Authority

    The Secretary of Homeland Security's authority for the proposed
    regulatory amendments can be found in various provisions of the
    immigration laws. Sections 103(a)(1) and (3) of the INA, 8 U.S.C.
    1103(a)(1), (3), provides the Secretary the authority to administer and
    enforce the immigration and nationality laws. Section 402(4) of the
    Homeland Security Act of 2002 (HSA), Public Law 107-296, 116 Stat.
    2135, 6 U.S.C. 202(4), expressly authorizes the

    [[Page 5239]]

    Secretary to establish rules and regulations governing parole. Section
    212(d)(5) of the INA, 8 U.S.C. 1182(d)(5), vests in the Secretary the
    discretionary authority to grant parole for urgent humanitarian reasons
    or significant public benefit to applicants for admission temporarily
    on a case-by-case basis.\1\ Section 274A(h)(3)(B) of the INA, 8 U.S.C.
    1324a(h)(3)(B), recognizes the Secretary's general authority to extend
    employment authorization to noncitizens in the United States. And
    section 101(b)(1)(F) of the HSA, 6 U.S.C. 111(b)(1)(F), establishes as
    a primary mission of DHS the duty to ``ensure that the overall economic
    security of the United States is not diminished by efforts, activities,
    and programs aimed at securing the homeland.''
    ---------------------------------------------------------------------------

    \1\ In sections 402 and 451 of the HSA, Congress transferred
    from the Attorney General to the Secretary of Homeland Security the
    general authority to enforce and administer the immigration laws,
    including those pertaining to parole. In accordance with section
    1517 of title XV of the HSA, any reference to the Attorney General
    in a provision of the INA describing functions transferred from the
    Department of Justice to DHS ``shall be deemed to refer to the
    Secretary'' of Homeland Security. See 6 U.S.C. 557 (codifying the
    HSA, tit. XV, section 1517). Authorities and functions of DHS to
    administer and enforce the immigration laws are appropriately
    delegated to DHS employees and others in accordance with section
    102(b)(1) of the HSA, 6 U.S.C. 112(b)(1); section 103(a) of the INA,
    8 U.S.C. 1103(a); and 8 CFR 2.1.
    ---------------------------------------------------------------------------

    C. Summary of the Final Rule Provisions

    This final rule adds a new section 8 CFR 212.19 to provide guidance
    with respect to the use of parole for entrepreneurs of start-up
    entities based upon significant public benefit. An individual seeking
    to operate and grow his or her start-up entity in the United States
    would generally need to demonstrate the following to be considered for
    a discretionary grant of parole under this final rule:
    1. Formation of New Start-Up Entity. The applicant has recently
    formed a new entity in the United States that has lawfully done
    business since its creation and has substantial potential for rapid
    growth and job creation. An entity may be considered recently formed if
    it was created within the 5 years immediately preceding the date of the
    filing of the initial parole application. See 8 CFR 219.12(a)(2), 8 CFR
    103.2(a)(7).
    2. Applicant is an Entrepreneur. The applicant is an entrepreneur
    of the start-up entity who is well-positioned to advance the entity's
    business. An applicant may meet this standard by providing evidence
    that he or she: (1) Possesses a significant (at least 10 percent)
    ownership interest in the entity at the time of adjudication of the
    initial grant of parole; and (2) has an active and central role in the
    operations and future growth of the entity, such that his or her
    knowledge, skills, or experience would substantially assist the entity
    in conducting and growing its business in the United States. See final
    8 CFR 212.19(a)(1). Such an applicant cannot be a mere investor.
    3. Significant U.S. Capital Investment or Government Funding. The
    applicant can further validate, through reliable supporting evidence,
    the entity's substantial potential for rapid growth and job creation.
    An applicant may be able to satisfy this criterion in one of several
    ways:
    a. Investments from established U.S. investors. The applicant may
    show that the entity has received significant investment of capital
    from certain qualified U.S. investors with established records of
    successful investments. An applicant would generally be able to meet
    this standard by demonstrating that the start-up entity has received
    investments of capital totaling $250,000 or more from established U.S.
    investors (such as venture capital firms, angel investors, or start-up
    accelerators) with a history of substantial investment in successful
    start-up entities.
    b. Government grants. The applicant may show that the start-up
    entity has received significant awards or grants from Federal, State or
    local government entities with expertise in economic development,
    research and development, or job creation. An applicant would generally
    be able to meet this standard by demonstrating that the start-up entity
    has received monetary awards or grants totaling $100,000 or more from
    government entities that typically provide such funding to U.S.
    businesses for economic, research and development, or job creation
    purposes.
    c. Alternative criteria. The final rule provides alternative
    criteria under which an applicant who partially meets one or more of
    the above criteria related to capital investment or government funding
    may be considered for parole under this rule if he or she provides
    additional reliable and compelling evidence that they would provide a
    significant public benefit to the United States. Such evidence must
    serve as a compelling validation of the entity's substantial potential
    for rapid growth and job creation.
    This final rule states that an applicant who meets the above
    criteria (and his or her spouse and minor, unmarried children,\2\ if
    any) generally may be considered under this rule for a discretionary
    grant of parole lasting up to 30 months (2.5 years) based on the
    significant public benefit that would be provided by the applicant's
    (or family's) parole into the United States. An applicant will be
    required to file a new application specifically tailored for
    entrepreneurs to demonstrate eligibility for parole based upon
    significant public benefit under this rule, along with applicable fees.
    Applicants will also be required to appear for collection of biometric
    information. No more than three entrepreneurs may receive parole with
    respect to any one qualifying start-up entity.
    ---------------------------------------------------------------------------

    \2\ The terms ``child'' and ``children'' in this proposed rule
    have the same meaning as they do under section 101(b)(1) of the INA,
    8 U.S.C. 1101(b)(1) (defining a child as one who is unmarried and
    under twenty-one years of age).
    ---------------------------------------------------------------------------

    USCIS adjudicators will consider the totality of the evidence,
    including evidence obtained by USCIS through background checks and
    other means, to determine whether the applicant has satisfied the above
    criteria, whether the specific applicant's parole would provide a
    significant public benefit, and whether negative factors exist that
    warrant denial of parole as a matter of discretion. To grant parole,
    adjudicators will be required to conclude, based on the totality of the
    circumstances, that both: (1) The applicant's parole would provide a
    significant public benefit, and (2) the applicant merits a grant of
    parole as a matter of discretion.
    If parole is granted, the entrepreneur will be authorized for
    employment incident to the grant of parole, but only with respect to
    the entrepreneur's start-up entity. The entrepreneur's spouse and
    children, if any, will not be authorized for employment incident to the
    grant of parole, but the entrepreneur's spouse, if paroled into the
    United States pursuant to 8 CFR 212.19, will be permitted to apply for
    employment authorization consistent with new 8 CFR 274a.12(c)(34). DHS
    retains the authority to revoke any such grant of parole at any time as
    a matter of discretion or if DHS determines that parole no longer
    provides a significant public benefit, such as when the entity has
    ceased operations in the United States or DHS has reason to believe
    that the approved application involves fraud or misrepresentation. See
    new 8 CFR 212.19(k).
    As noted, the purpose of this parole process is to provide
    qualified entrepreneurs of high-potential start-up entities in the
    United States with the improved ability to conduct research and
    development and expand the entities' operations in the United States so
    that our nation's economy may

    [[Page 5240]]

    benefit from such development and expansion, including through
    increased capital expenditures, innovation, and job creation. The final
    rule allows individuals granted parole under this rule to be considered
    for re-parole for an additional period of up to 30 months (2.5 years)
    if, and only if, they can demonstrate that their entities have shown
    signs of significant growth since the initial grant of parole and such
    entities continue to have substantial potential for rapid growth and
    job creation.
    An applicant under this rule will generally need to demonstrate the
    following to be considered for a discretionary grant of an additional
    period of parole:
    1. Continuation of Start-Up Entity. The entity continues to be a
    start-up entity as defined by the proposed rule. For purposes of
    seeking re-parole, an applicant may be able to meet this standard by
    showing that the entity: (a) Has been lawfully operating in the United
    States during the period of parole; and (b) continues to have
    substantial potential for rapid growth and job creation.
    2. Applicant Continues to Be an Entrepreneur. The applicant
    continues to be an entrepreneur of the start-up entity who is well-
    positioned to advance the entity's business. An applicant may meet this
    standard by providing evidence that he or she: (a) Continues to possess
    a significant (at least 5 percent) ownership interest in the entity at
    the time of adjudication of the grant of re-parole; and (b) continues
    to have an active and central role in the operations and future growth
    of the entity, such that his or her knowledge, skills, or experience
    would substantially assist the entity in conducting and continuing to
    grow its business in the United States. This reduced ownership amount
    takes into account the need of some successful start-up entities to
    raise additional venture capital investment by selling ownership
    interest during their initial years of operation.
    3. Significant U.S. Investment/Revenue/Job Creation. The applicant
    further validates, through reliable supporting evidence, the start-up
    entity's continued potential for rapid growth and job creation. An
    applicant may be able to satisfy this criterion in one of several ways:
    a. Additional Investments or Grants. The applicant may show that
    during the initial period of parole the start-up entity received
    additional substantial investments of capital, including through
    qualified investments from U.S. investors with established records of
    successful investments; significant awards or grants from U.S.
    government entities that regularly provide such funding to start-up
    entities; or a combination of both. An applicant would generally be
    expected to demonstrate that the entity received at least $500,000 in
    additional qualifying funding during the initial parole period. As
    noted previously, any private investment that the applicant is relying
    upon as evidence that the investment criterion has been met must be
    made by qualified U.S. investors (such as venture capital firms, angel
    investors, or start-up accelerators) with a history of substantial
    investment in successful start-up entities. Government awards or grants
    must be from U.S. federal, state or local government entities with
    expertise in economic development, research and development, or job
    creation.
    b. Revenue generation. The applicant may show that the start-up
    entity has generated substantial and rapidly increasing revenue in the
    United States during the initial parole period. To satisfy this
    criterion, an applicant will need to demonstrate that the entity
    reached at least $500,000 in annual revenue, with average annualized
    revenue growth of at least 20 percent, during the initial parole
    period.
    c. Job creation. The applicant may show that the start-up entity
    has demonstrated substantial job creation in the United States during
    the initial parole period. To satisfy this criterion, an applicant will
    need to demonstrate that the entity created at least 5 full-time jobs
    for U.S. workers during the initial parole period.
    d. Alternative criteria. As with initial parole, the final rule
    includes alternative criteria under which an applicant who partially
    meets one or more of the above criteria related to capital investment,
    revenue generation, or job creation may be considered for re-parole
    under this rule if he or she provides additional reliable and
    compelling evidence that his or her parole will continue to provide a
    significant public benefit. As discussed above, such evidence must
    serve as a compelling validation of the entity's substantial potential
    for rapid growth and job creation.
    As indicated above, an applicant who generally meets the above
    criteria and merits a favorable exercise of discretion may be granted
    an additional 30-month period of re-parole, for a total maximum period
    of 5 years of parole under 8 CFR 212.19, to work with the same start-up
    entity based on the significant public benefit that would be served by
    his or her continued parole in the United States. No more than three
    entrepreneurs (and their spouses and children) may receive such
    additional periods of parole with respect to any one qualifying entity.
    As with initial parole applications, USCIS adjudicators will
    consider the totality of the evidence, including evidence obtained by
    USCIS through verification methods, to determine whether the applicant
    has satisfied the above criteria and whether his or her continued
    parole would provide a significant public benefit. To be re-paroled,
    adjudicators will be required to conclude, based on the totality of the
    circumstances, both: (1) That the applicant's continued parole would
    provide a significant public benefit, and (2) that the applicant
    continues to merit parole as a matter of discretion. If the applicant
    is re-paroled, DHS retains the authority to revoke parole at any time
    as a matter of discretion or if DHS determines that parole no longer
    provides a significant public benefit, such as when the entity has
    ceased operations in the United States or DHS believes that the
    application involved fraud or made material misrepresentations.
    The entrepreneur and any dependents granted parole under this
    program will be required to depart the United States when their parole
    periods have expired or have otherwise been terminated, unless such
    individuals are otherwise eligible to lawfully remain in the United
    States. At any time prior to reaching the 5-year limit for parole under
    this final rule, such individuals may apply for any immigrant or
    nonimmigrant classification for which they may be eligible (such as
    classification as an O-1 nonimmigrant or as a lawful permanent resident
    pursuant to an EB-2 National Interest Waiver). Because parole is not
    considered an admission to the United States, parolees are ineligible
    to adjust or change their status in the United States under many
    immigrant or nonimmigrant visa classifications. For example, if such
    individuals are approved for a nonimmigrant or employment-based
    immigrant visa classification, they would generally need to depart the
    United States and apply for a visa with the Department of State (DOS)
    for admission to the United States as a nonimmigrant or lawful
    permanent resident.
    Finally, DHS is making conforming changes to the employment
    authorization regulations at 8 CFR 274a.12(b) and (c), the employment
    eligibility verification regulations at 8 CFR 274a.2(b), and fee
    regulations at 8 CFR 103.7(b)(i). The final rule amends 8 CFR
    274a.12(b) by: (1) Adding entrepreneur parolees to the classes of

    [[Page 5241]]

    aliens authorized for employment incident to their immigration status
    or parole, and (2) providing temporary employment authorization for
    those applying for re-parole. The final rule amends 8 CFR 274a.12(c) by
    extending eligibility for employment authorization to the spouse of an
    entrepreneur paroled into the United States under 8 CFR 212.19. The
    final rule amends 8 CFR 274a.2(b) by designating the entrepreneur's
    foreign passport and Arrival/Departure Record (Form I-94) indicating
    entrepreneur parole as acceptable evidence for employment eligibility
    verification (Form I-9) purposes.\3\ The final rule also amends 8 CFR
    103.7(b)(i) by including the fee for the new Application for
    Entrepreneur Parole form.
    ---------------------------------------------------------------------------

    \3\ Additionally, DHS is making a technical change to this
    section by adding the Department of State (DOS) Consular Report of
    Birth Abroad (Form FS-240) to the regulatory text and to the ``List
    C'' listing of acceptable documents for Form I-9 verification
    purposes. This rule departs from the Notice of Proposed Rulemaking
    by not adding ``or successor form'' after Form FS-240. DHS
    determined that inclusion of the phrase is unnecessary and may cause
    confusion in the future.
    ---------------------------------------------------------------------------

    D. Summary of Changes From the Notice of Proposed Rulemaking

    Following careful consideration of public comments received,
    including relevant data provided by stakeholders, DHS has made several
    modifications to the regulatory text proposed in the Notice of Proposed
    Rulemaking (NPRM) published in the Federal Register on August 31, 2016.
    See 81 FR 60129. Those changes include the following:
    Minimum Investment Amount. In the final rule, DHS is
    responding to public comment by revising proposed 8 CFR
    212.19(b)(2)(ii)(B)(1), a provision that identifies the qualifying
    investment amount required from one or more qualified investors. In the
    NPRM, DHS proposed a minimum investment amount of $345,000. Based on
    data provided by the public, DHS is revising this figure to $250,000.
    Thus, under the final rule, an applicant would generally be able to
    meet the investment standard by demonstrating that the start-up entity
    has received investments of capital totaling $250,000 or more from
    established U.S. investors (such as venture capital firms, angel
    investors, or start-up accelerators) with a history of substantial
    investment in successful start-up entities. In addition, DHS has
    increased the timeframe during which the qualifying investments must be
    received from 365 days to 18 months immediately preceding the filing of
    an application for initial parole.
    Definition of Entrepreneur: Ownership Criteria. In the
    final rule, DHS is revising proposed 8 CFR 212.19(a)(1), a provision
    that defines the term ``entrepreneur,'' and establishes a minimum
    ownership percentage necessary to meet the definition. In the NPRM, DHS
    proposed that the entrepreneur must have an ownership interest of at
    least 15 percent for initial parole, and 10 percent for re-parole. In
    response to public comment, DHS is modifying this requirement to allow
    individuals who have an ownership interest of at least 10 percent in
    the start-up entity at the time of adjudication of the initial grant of
    parole, and at least a 5 percent ownership interest at the time of
    adjudication of a subsequent period of re-parole, to qualify under this
    definition.
    Qualified Investment Definition. DHS is revising proposed
    8 CFR 212.19(a)(4), which establishes the definition of a qualified
    investment. In the NPRM, DHS proposed that the term ``qualified
    investment'' means an investment made in good faith, and that is not an
    attempt to circumvent any limitations imposed on investments under this
    section, of lawfully derived capital in a start-up entity that is a
    purchase from such entity of equity or convertible debt issued by such
    entity. In response to public comment, DHS is modifying this definition
    to include other securities that are convertible into equity issued by
    such an entity and that are commonly used in financing transactions
    within such entity's industry.
    Qualified Investor Definition. DHS is revising proposed 8
    CFR 212.19(a)(5), which establishes the definition of a qualified
    investor. In the NPRM, DHS proposed that an individual or organization
    may be considered a qualified investor if, during the preceding 5
    years: (i) The individual or organization made investments in start-up
    entities in exchange for equity or convertible debt in at least 3
    separate calendar years comprising a total within such 5-year period of
    no less than $1,000,000; and (ii) subsequent to such investment by such
    individual or organization, at least 2 such entities each created at
    least 5 qualified jobs or generated at least $500,000 in revenue with
    average annualized revenue growth of at least 20 percent. In this final
    rule, the minimum investment amount has been decreased from the
    originally proposed $1,000,000 to $600,000. The requirement that
    investments be made in at least 3 separate calendar years has also been
    removed from this final rule. DHS is also making revisions to the form
    of investment made by the individual or organization consistent with
    the change to the qualified investment definition by adding ``or other
    security convertible into equity commonly used in financing
    transactions within their respective industries.''
    Start-up Entity Definition. In the final rule, DHS is
    revising the definition of a start-up entity as proposed in 8 CFR
    212.19(a)(2). In the NPRM, DHS proposed that an entity may be
    considered recently formed if it was created within the 3 years
    preceding the date of filing of the initial parole request. In response
    to public comment, DHS is modifying this provision so that an entity
    may be considered recently formed if it was created within the 5 years
    immediately preceding the filing date of the initial parole request.
    Additionally, for purposes of paragraphs (a)(3) and (a)(5) of this
    section, which pertain to the definitional requirements to be a
    qualified investor or qualified government award or grant,
    respectively, DHS made corresponding changes in this final rule such
    that an entity may be considered recently formed if it was created
    within the 5 years immediately preceding the receipt of the relevant
    grant(s), award(s), or investment(s).
    Job Creation Requirement. In the final rule, DHS is
    revising proposed 8 CFR 212.19(c)(2)(ii)(B)(2), a provision that
    identifies the minimum job creation requirement under the general re-
    parole criteria. In the NPRM, DHS proposed that an entrepreneur may be
    eligible for an additional period of parole by establishing that his or
    her start-up entity has created at least 10 qualified jobs during the
    initial parole period. In response to public comment, DHS is modifying
    this provision so that an entrepreneur may qualify for re-parole if the
    start-up entity created at least 5 qualified jobs with the start-up
    entity during the initial parole period.
    Revenue Generation. In the final rule, DHS is clarifying
    proposed 8 CFR 212.19(c)(2)(ii)(B)(3), a provision that identifies the
    minimum annual revenue requirement under the general re-parole
    criteria. DHS has clarified that for the revenue to be considered for
    purposes of re-parole, it must be generated in the United States.
    Parole Validity Periods. In the final rule, DHS is
    revising proposed 8 CFR 212.19(d)(2) and (3), which are provisions that
    identify the length of the initial and re-parole periods. In the NPRM,
    DHS proposed (1) a potential initial period of parole of up to 2 years
    beginning on the date the request is approved by USCIS and (2) a
    potential period of re-parole of up to 3 years beginning on the date of
    the expiration

    [[Page 5242]]

    of the initial parole period. First, DHS revised 8 CFR 212.19(d)(2) to
    correct that the initial parole period would begin running on the date
    the individual is initially paroled into the United States. Second, in
    response to public comment, DHS revised 8 CFR 212.19(d)(2) and (3) to
    provide 2 potential parole periods of up to 30 months each, rather than
    an initial 2-year period followed by a potential 3-year period of re-
    parole. Specifically, 8 CFR 212.19(d)(2) now provides that an applicant
    who meets the eligibility criteria (and his or her spouse and minor,
    unmarried children, if any) may be considered under this rule for a
    discretionary grant of an initial parole period of up to 30 months (2.5
    years) based on the significant public benefit that would be provided
    by the applicant's (or family's) parole into the United States. DHS
    also revised in this final rule the period of re-parole in 8 CFR
    212.19(d)(3) to reduce the period of re-parole from 3 years to 30
    months in order to extend the initial parole period, while still
    maintaining the overall 5-year period of parole limitation.
    Material Changes. In the final rule, DHS is revising
    proposed 8 CFR 212.19(a)(10), a provision that defines material
    changes. The final rule adds the following to the definition of
    material changes: ``a significant change with respect to ownership and
    control of the start-up entity.'' This reflects a change from the
    originally proposed language of any significant change to the
    entrepreneur's role in or ownership and control in the start-up entity
    or any other significant change with respect to ownership and control
    of the start-up entity. Additionally, the final rule at 8 CFR
    212.19(a)(1) adds language that permits the entrepreneur during the
    initial parole period to reduce his or her ownership interest, as long
    as at least 5 percent ownership is maintained. This provision was
    revised in response to a number of public comments that requested that
    DHS reconsider how and when material changes should be reported.
    Reporting of Material Changes. In the final rule, DHS is
    revising proposed 8 CFR 212.19(j), a provision that describes reporting
    of material changes. DHS is revising 8 CFR 212.19(j) to allow DHS to
    provide additional flexibility in the future with respect to the manner
    in which material changes are reported to DHS. The final rule also
    makes conforming changes based on changes to the definition of
    entrepreneur.
    Termination of Parole. In the final rule, DHS is revising
    proposed 8 CFR 212.19(k)(2), a provision that describes automatic
    termination of parole. The final rule makes conforming revisions to
    this provision based on changes to the definition of entrepreneur and
    to the material change provisions.

    E. Summary of Costs and Benefits

    DHS does not anticipate that this rule will generate significant
    costs and burdens to private or public entities. Costs of the rule stem
    from filing fees and opportunity costs associated with applying for
    parole, and the requirement that the entrepreneur notify DHS of any
    material changes.
    DHS estimates that 2,940 entrepreneurs will be eligible for parole
    annually and can apply using the Application for Entrepreneur Parole
    (Form I-941). Each applicant for parole will face a total filing cost--
    including the application form fee, biometric filing fee, travel costs,
    and associated opportunity costs--of $1,591, resulting in a total cost
    of $4,678,336 (undiscounted) for the first full year the rule will take
    effect and any subsequent year. Additionally, dependent family members
    (spouses and children) seeking parole with the principal applicant will
    be required to file an Application for Travel Document (Form I-131) and
    submit biographical information and biometrics. DHS estimates
    approximately 3,234 dependent spouses and children could seek parole
    based on the estimate of 2,940 principal applicants. Each spouse and
    child 14 years of age and older seeking parole will face a total cost
    of $765 per applicant,\4\ for a total aggregate cost of $2,474,914.\5\
    Additionally, spouses who apply for work authorization via an
    Application for Employment Authorization (Form I-765) will incur a
    total additional cost of $446 each. Based on the same number of
    entrepreneurs, the estimated 2,940 spouses \6\ will incur total costs
    of $1,311,830 (undiscounted). The total cost of the rule to include
    direct filing costs and monetized non-filing costs is estimated to be
    $8,136,571 annually.
    ---------------------------------------------------------------------------

    \4\ On October 24, 2016, U.S. Citizenship and Immigration
    Services published a final rule establishing a new fee schedule for
    immigration benefits and services (81 FR 73292). The new filing fees
    for Form I-131 and Form I-765, $575 and $410, respectively, will be
    effective on December 23, 2016. This final rule uses those new
    filing fees in estimating costs to potential applicants under this
    rule.
    \5\ For parole requests for children under the age of 14, only
    the filing fee will be required, as such children do not appear for
    biometric collection. Applicants under the age of 14 and over the
    age of 79 are not required to be fingerprinted. However, they may
    still be required to attend a biometrics appointment in order to
    have their photographs and signatures captured.
    \6\ DHS used a simple one-to-one mapping of entrepreneurs to
    spouses to obtain 2,940 spouses, the same number as entrepreneur
    parolees.
    ---------------------------------------------------------------------------

    DHS anticipates that establishing a parole process for those
    entrepreneurs who stand to provide a significant public benefit will
    advance the U.S. economy by enhancing innovation, generating capital
    investments, and creating jobs. DHS does not expect significant
    negative consequences or labor market impacts from this rule; indeed,
    DHS believes this rule will encourage entrepreneurs to pursue business
    opportunities in the United States rather than abroad, which can be
    expected to generate significant scientific, research and development,
    and technological impacts that could create new products and produce
    positive spillover effects to other businesses and sectors. The impacts
    stand to benefit the economy by supporting and strengthening high-
    growth, job-creating businesses in the United States.

    F. Effective Date

    This final rule will be effective on July 17, 2017, 180 days from
    the date of publication in the Federal Register. DHS has determined
    that this 180-day period is necessary to provide USCIS with a
    reasonable period to ensure resources are in place to process and
    adjudicate Applications for Entrepreneur Parole filed by eligible
    entrepreneurs and related applications filed by eligible dependents
    under this rule without sacrificing the quality of customer service for
    all USCIS stakeholders. USCIS believes it will thus be able to
    implement this rule in a manner that will avoid delays of processing
    these and other applications.

    II. Background

    A. Discretionary Parole Authority

    The Secretary of Homeland Security has discretionary authority to
    parole into the United States temporarily ``under conditions as he may
    prescribe only on a case-by-case basis for urgent humanitarian reasons
    or significant public benefit any individual applying for admission to
    the United States,'' regardless of whether the alien is inadmissible.
    INA section 212(d)(5)(A), 8 U.S.C. 1182(d)(5)(A).\7\ The Secretary's
    parole authority is expansive. Congress did not define the phrase
    ``urgent humanitarian reasons or significant public benefit,''
    entrusting interpretation and application of those

    [[Page 5243]]

    standards to the Secretary. Aside from requiring case-by-case
    determinations, Congress limited the parole authority by restricting
    its use with respect to two classes of applicants for admissions: (1)
    Aliens who are refugees (unless the Secretary determines that
    ``compelling reasons in the public interest with respect to that
    particular alien require that the alien be paroled . . . rather than be
    admitted as a refugee'' under INA section 207, 8 U.S.C. 1157), see INA
    section 212(d)(5)(B), 8 U.S.C. 1182(d)(5)(B); and (2) certain alien
    crewmen during a labor dispute in specified circumstances (unless the
    Secretary ``determines that the parole of such alien is necessary to
    protect the national security of the United States''), INA section
    214(f)(2)(A), 8 U.S.C. 1184(f)(2)(A).
    ---------------------------------------------------------------------------

    \7\ Although section 212(d)(5) continues to refer to the
    Attorney General, the parole authority now resides exclusively with
    the Secretary of Homeland Security. See Matter of Arrabally, 25 I. &
    N. Dec. 771, 777 n.5 (BIA 2012).
    ---------------------------------------------------------------------------

    Parole decisions are discretionary determinations and must be made
    on a case-by-case basis consistent with the INA. To exercise its parole
    authority, DHS must determine that an individual's parole into the
    United States is justified by urgent humanitarian reasons or
    significant public benefit. Even when one of those standards would be
    met, DHS may nevertheless deny parole as a matter of discretion based
    on other factors.\8\ In making such discretionary determinations, USCIS
    considers all relevant information, including any criminal history or
    other serious adverse factors that would weigh against a favorable
    exercise of discretion.
    ---------------------------------------------------------------------------

    \8\ The denial of parole is not subject to judicial review. See
    INA section 242(a)(2)(B)(ii), 8 U.S.C. 1252(a)(2)(B)(ii); Bolante v.
    Keisler, 506 F.3d 618, 621 (7th Cir. 2007).
    ---------------------------------------------------------------------------

    Parole is not an admission to the United States. See INA sections
    101(a)(13)(B), 212(d)(5)(A), 8 U.S.C. 1101(a)(13)(B), 1182(d)(5)(A);
    see also 8 CFR 1.2 (``An arriving alien remains an arriving alien even
    if paroled pursuant to section 212(d)(5) of the Act, and even after any
    such parole is terminated or revoked.''). Parole may also be terminated
    at any time in DHS's discretion, consistent with existing regulations;
    in those cases, the individual is ``restored to the status that he or
    she had at the time of parole.'' 8 CFR 212.5(e); see also INA section
    212(d)(5)(A), 8 U.S.C. 1182(d)(5)(A).\9\
    ---------------------------------------------------------------------------

    \9\ The grounds for termination set forth in 212.19(k) are in
    addition to the general grounds for termination of parole described
    at 8 CFR 212.5(e).
    ---------------------------------------------------------------------------

    DHS regulations at 8 CFR 212.5 generally describe DHS's
    discretionary parole authority, including the authority to set the
    terms and conditions of parole. Some conditions are described in the
    regulations, including requiring reasonable assurances that the parolee
    will appear at all hearings and will depart from the United States when
    required to do so. See 8 CFR 212.5(d).
    Each of the DHS immigration components--USCIS, U.S. Customs and
    Border Protection (CBP), and U.S. Immigration and Customs Enforcement
    (ICE)--has been delegated the authority to parole applicants for
    admission in accordance with section 212(d)(5) of the INA, 8 U.S.C.
    1182(d)(5). See 8 CFR 212.5(a). The parole authority is often utilized
    to permit an individual who is outside the United States to travel to
    and come into the United States without a visa. USCIS, however, also
    accepts requests for ``advance parole'' by individuals who seek
    authorization to depart the United States and return to the country
    pursuant to parole in the future. See 8 CFR 212.5(f); Application for
    Travel Document (Form I-131). Aliens who seek parole as entrepreneurs
    under this rule may need to apply for advance parole if at the time of
    application they are present in the United States after admission in,
    for example, a nonimmigrant classification, as USCIS is unable to grant
    parole to aliens who are not ``applicants for admission.'' See INA
    section 212(d)(5)(A), 8 U.S.C. 1182(d)(5)(A); see also INA section
    235(a)(1), 8 U.S.C. 1225(a)(1) (describing ``applicants for
    admission''). Advance authorization of parole by USCIS does not
    guarantee that the individual will be paroled by CBP upon his or her
    appearance at a port of entry.\10\ Rather, with a grant of advance
    parole, the individual is issued a document authorizing travel (in lieu
    of a visa) indicating ``that, so long as circumstances do not
    meaningfully change and the DHS does not discover material information
    that was previously unavailable, . . . DHS's discretion to parole him
    at the time of his return to a port of entry will likely be exercised
    favorably.'' \11\
    ---------------------------------------------------------------------------

    \10\ See Matter of Arrabally, 25 I. & N. Dec. at 779 n.6 (citing
    71 FR 27585, 27586 n.1 (May 12, 2006) (``[A] decision authorizing
    advance parole does not preclude denying parole when the alien
    actually arrives at a port-of-entry, should DHS determine that
    parole is no longer warranted.'')).
    \11\ Id.
    ---------------------------------------------------------------------------

    Currently, upon an individual's arrival at a U.S. port of entry
    with a parole travel document (e.g., a Department of State (DOS) foil,
    Authorization for Parole of an Alien into the United States (Form I-
    512L), or an Employment Authorization Document (Form I-766)), a CBP
    officer at a port of entry inspects the prospective parolee. If parole
    is authorized, the CBP officer issues an Arrival/Departure Record (Form
    I-94) documenting the grant of parole and the length of the parolee's
    authorized parole period. See 8 CFR 235.1(h)(2). CBP retains the
    authority to deny parole to a parole applicant or to modify the length
    of advance parole authorized by USCIS. See 8 CFR 212.5(c).
    Because parole does not constitute an admission, individuals may be
    paroled into the United States even if they are inadmissible under
    section 212(a) of the INA, 8 U.S.C. 1182(a). Further, parole does not
    provide a parolee with nonimmigrant status or lawful permanent resident
    status. Nor does it provide the parolee with a basis for changing
    status to that of a nonimmigrant or adjusting status to that of a
    lawful permanent resident, unless the parolee is otherwise eligible.
    Under current regulations, once paroled into the United States, a
    parolee is eligible to request employment authorization from USCIS by
    filing a Form I-765 application with USCIS. See 8 CFR 274a.12(c)(11).
    If employment authorization is granted, USCIS issues the parolee an
    employment authorization document (EAD) with an expiration date that is
    commensurate with the period of parole on the parolee's Arrival/
    Departure Record (Form I-94). The parolee may use this EAD to
    demonstrate identity and employment authorization to an employer for
    Form I-9 verification purposes as required by section 274A(a) and (b)
    of the INA, 8 U.S.C. 1324a(a) and (b). Under current regulations, the
    parolee is not employment authorized by virtue of being paroled, but
    instead only after receiving a discretionary grant of employment
    authorization from USCIS based on the Application for Employment
    Authorization.
    Parole will terminate automatically upon the expiration of the
    authorized parole period or upon the departure of the individual from
    the United States. See 8 CFR 212.5(e)(1). Parole also may be terminated
    on written notice when DHS determines that the individual no longer
    warrants parole or through the service of a Notice to Appear (NTA). See
    8 CFR 212.5(e)(2)(i).

    B. Final Rule

    Following careful consideration of public comments received, DHS
    has made several modifications to the regulatory text proposed in the
    NPRM (as described above in Section I.C.). The rationale for the
    proposed rule and the reasoning provided in the background section of
    that rule remain valid with respect to these regulatory amendments.
    Section III of this final rule includes a detailed summary and analysis
    of public comments that are pertinent to the proposed rule and DHS's
    role in

    [[Page 5244]]

    administering the International Entrepreneur Rule. A brief summary of
    comments deemed by DHS to be out of scope or unrelated to this
    rulemaking, making a detailed substantive response unnecessary, is
    provided in Section III.K. Comments may be reviewed at the Federal
    Docket Management System (FDMS) at http://www.regulations.gov, docket
    number USCIS-2015-0006.

    III. Public Comments on the Proposed Rule

    A. Summary of Public Comments

    In response to the proposed rule, DHS received 763 comments during
    the 45-day public comment period. Of these, 43 comments were duplicate
    submissions and approximately 242 were letters submitted through mass
    mailing campaigns. As those letters were sufficiently unique, DHS
    considered all of these comment submissions. Commenters consisted
    primarily of individuals but also included startup incubators,
    companies, venture capital firms, law firms and representatives from
    State and local governments. Approximately 51 percent of commenters
    expressed support for the rule and/or offered suggestions for
    improvement. Nearly 46 percent of commenters expressed general
    opposition to the rule without suggestions for improvement. For
    approximately 3 percent of the public comments, DHS could not ascertain
    whether the commenter supported or opposed the proposed rule.
    DHS has reviewed all of the public comments received in response to
    the proposed rule and addresses relevant comments in this final rule.
    DHS's responses are grouped by subject area, with a focus on the most
    common issues and suggestions raised by commenters.

    B. Legal Authority

    Comments. One commenter supported DHS's stated authority for
    promulgating this regulation and said that the INA grants the Secretary
    of Homeland Security the authority to establish policies governing
    parole and that efforts to reduce barriers to entrepreneurship via
    regulatory reform directly addresses DHS's mandate, ``to ensure that
    the overall economic security of the United States is not diminished by
    efforts, activities, and programs aimed at securing the homeland.'' On
    the other hand, some commenters questioned DHS's authority to implement
    this rule. A commenter asserted that the rule created a new visa
    category which is under the exclusive purview of Congress, and
    therefore an illegal extension of authority by the executive branch.
    Another commenter indicated that the proposed rule is too vague
    regarding whether ``the agency intends to grant parole to aliens
    already present in the United States,'' and questioned whether the
    proposed exercise of parole authority is supported by legislative
    history, is consistent with the INA's overall statutory scheme, and
    whether ``significant public benefit parole'' as outlined in this rule
    is ``arbitrary and capricious.''
    Response. DHS agrees with the commenter that contended that the
    Secretary has authority to promulgate this rule. As noted above, DHS's
    authority to promulgate this rule arises primarily from sections
    101(b)(1)(F) and 402(4) of the HSA; sections 103(a)(1) and (3) of the
    INA, 8 U.S.C. 1103(a)(1), (3); section 212(d)(5) of the INA, 8 U.S.C.
    1182(d)(5); and section 274A(h)(3)(B) of the INA, 8 U.S.C.
    1324a(h)(3)(B). The Secretary retains broad statutory authority to
    exercise his discretionary parole authority based upon ``significant
    public benefit.''
    DHS disagrees with the comment asserting that the proposed rule
    would effectively create a new visa category, which only Congress has
    the authority to do. See INA section 101(a)(15), 8 U.S.C. 1101(a)(15)
    (identifying nonimmigrant categories). Congress expressly empowered DHS
    to grant parole on a case-by-case basis, and nothing in this rule uses
    that authority to establish a new nonimmigrant classification. Among
    other things, individuals who are granted parole--which can be
    terminated at any time in the Secretary's discretion--are not
    considered to have been ``admitted'' to the United States, see INA
    sections 101(a)(13)(B), 212(d)(5)(A), 8 U.S.C. 1101(a)(13)(B),
    1182(d)(5)(A); and cannot change to a nonimmigrant category as a
    parolee, see INA section 248(a), 8 U.S.C. 1258(a). Nor does parole
    confer lawful permanent resident status. To adjust status to that of a
    lawful permanent resident, individuals generally must, among other
    things, be admissible to the United States, have a family or
    employment-based immigrant visa immediately available to them, and not
    be subject to the various bars to adjustment of status. See INA section
    245(a), (c), (k); 8 U.S.C. 1255(a), (c), (k); 8 CFR 245.1.
    DHS further disagrees with the comment that this rule is
    inconsistent with the legislative history on parole. Under current law,
    Congress has expressly authorized the Secretary to grant parole on a
    case-by-case basis for urgent humanitarian reasons or significant
    public benefit. The statutory language in place today is somewhat more
    restrictive than earlier versions of the parole authority, which did
    not always require case-by-case review and now includes additional
    limits on the use of parole for refugees and certain alien crewmen. See
    INA section 212(d)(5)(B), 8 U.S.C. 1182(d)(5)(B) (refugees); INA
    section 214(f)(2)(A), 8 U.S.C. 1184(f)(2)(A) (alien crewmen); Illegal
    Immigration Reform and Immigrant Responsibility Act of 1996, Public Law
    104-208, div. C, sec. 602(a)-(b), 110 Stat. 3009-689 (1996) (changing
    the standard for parole). But the statute clearly continues to
    authorize the granting of parole. Across Administrations, moreover, it
    has been accepted that the Secretary can identify classes of
    individuals to consider for parole so long as each individual decision
    is made on a case-by-case basis according to the statutory criteria.
    See, e.g., 8 CFR 212.5(b) (as amended in 1997); Cuban Family
    Reunification Parole Program, 72 FR 65,588 (Nov. 21, 2007). This rule
    implements the parole authority in that way.
    In addition to the concerns described above, one commenter argued
    that the proposed rule did not clearly explain whether ``the agency
    intends to grant parole to aliens already present in the United
    States.'' DHS believes it is clear under this rule that an individual
    who is present in the United States as a nonimmigrant based on an
    inspection and admission is not eligible for parole without first
    departing the United States and appearing at a U.S. port of entry to be
    paroled into United States. See INA sections 212(d)(5)(A), 235(a)(1); 8
    U.S.C. 1182(d)(5)(A), 1225(a)(1). As further discussed in section
    III.H. of this rule, moreover, DHS does not contemplate using this rule
    to grant requests for parole in place for initial requests for parole.
    Comment: A commenter objected to the extension of employment
    authorization by this rule to entrepreneur parolees for the sole
    purpose of engaging in entrepreneurial employment, stating that DHS is
    barred from doing so given the comprehensive legislative scheme for
    employment-based temporary and permanent immigration.
    Response: DHS disagrees with the commenter. Under a plain reading
    of INA section 103(a), 8 U.S.C. 1103(a), the Secretary is provided with
    broad discretion to administer and enforce the Nation's immigration
    laws and broad authority to ``establish such regulations . . . and
    perform such other acts as he deems necessary for carrying out his
    authority under the [INA],'' see INA section 103(a)(3), 8 U.S.C.
    1103(a)(3). Further, the specific definitional

    [[Page 5245]]

    provision at section 274A(h)(3)(B) of the INA, 8 U.S.C. 1324a(h)(3)(B),
    which was raised by the commenter, presumes that employment may be
    authorized by the Secretary and not just by statute. See Arizona Dream
    Act Coal. v. Brewer, 757 F.3d 1053, 1062 (9th Cir. 2014) (``Congress
    has given the Executive Branch broad discretion to determine when
    noncitizens may work in the United States.''); Perales v. Casillas, 903
    F.2d 1043, 1048, 1050 (5th Cir. 1990) (describing the authority
    recognized by INA 274A(h)(3) as ``permissive'' and largely
    ``unfettered''). The fact that Congress has directed the Secretary to
    authorize employment to specific classes of foreign nationals in
    certain statutory provisions does not diminish the Secretary's broad
    authority under other statutory provisions to administer the
    immigration laws, including through the extension of employment
    authorization. See generally 8 CFR 274a.12 (identifying, by regulation,
    numerous ``classes of aliens authorized to accept employment'').
    C. Significant Public Benefit
    Comment: One commenter stated that the quality of the jobs created
    should be a factor in determining whether the entrepreneur's parole
    will provide a significant public benefit. The commenter suggested
    formalizing some form of priority criteria.
    Response: Under this final rule, evidence regarding job creation
    may be considered in determining whether to parole an individual into
    the United States for ``significant public benefit.'' An entrepreneur
    may be considered for an initial period of parole if the entrepreneur's
    start-up entity has received a qualifying investment or grant.
    Alternatively, if the entity has received a lesser investment or grant
    amount, the entrepreneur may still be considered for parole by
    providing other reliable and compelling evidence of the start-up
    entity's substantial potential for rapid growth and job creation.
    Evidence pertaining to the creation of jobs, as well as the
    characteristics of the jobs created (e.g., occupational classification
    and wage level) may be considered by DHS in determining whether the
    evidence, when combined with the amount of investment, grant or award,
    establishes that the entrepreneur will provide a significant public
    benefit to the United States. As with initial parole determinations,
    evidence pertaining to the creation of jobs, as well as the
    characteristics of the jobs created (e.g., occupational classification
    and wage level) may be considered by DHS to determine whether the
    entrepreneur should be granted re-parole.
    Given the way job creation will already be considered, DHS believes
    it is unnecessary to make ``job quality'' its own separate criterion in
    determining whether to grant parole or re-parole. It is also unclear
    how the commenter believes DHS should apply any such criterion. Under
    this final rule, DHS will evaluate the totality of the circumstances,
    including the evidence about job creation, in determining whether to
    parole an individual into the United States for significant public
    benefit.

    D. Definitions

    1. Entrepreneur--Ownership Criteria
    Comments: Several commenters expressed concern with the 15 percent
    ``substantial ownership interest'' requirement in the definition of
    ``entrepreneur'' in the proposed rule. One such commenter said the 15
    percent ``substantial ownership interest'' requirement is only
    reasonable for smaller startups and proposed that the rule also
    separately include a dollar amount to satisfy the ``substantial
    ownership interest'' requirement (e.g., 15 percent ownership interest
    or ownership interest valued at $150,000 or more). Several commenters
    recommended that the final rule reduce the initial parole threshold
    from 15 to 10 percent and reduce the re-parole threshold from 10 to 5
    percent. Other commenters suggested that 10 percent ownership per
    individual would be a more appropriate threshold because some start-ups
    may be founded by teams of founders that need to split equity and
    requiring more than 15 percent ownership might be too restrictive and
    limit business creativity and growth.
    Response: Consistent with the commenters' concerns and suggestions,
    DHS is revising the definition of entrepreneur in this final rule to
    reduce the ownership percentage that the individual must possess. See 8
    CFR 212.19(a)(1). Based on further analysis, DHS believes that the
    thresholds from the proposed rule could have unnecessarily impacted an
    entrepreneur's ability to dilute his or her ownership interest to raise
    additional funds and grow the start-up entity. In this final rule, an
    individual may be considered to possess a substantial ownership
    interest if he or she possesses at least a 10 percent ownership
    interest in the start-up entity at the time of adjudication of the
    initial grant of parole and possesses at least a 5 percent ownership
    interest in the start-up entity at the time of adjudication of a
    subsequent period of re-parole. DHS believes that the revised ownership
    percentage requirements in this final rule adequately account for the
    possibility of equity dilution, while ensuring that the individual
    continues to have a substantial ownership interest in, and assumes more
    than a nominal financial risk related to, the start-up entity.
    Given that this is a new and complex process, DHS declines to adopt
    a separate option of establishing substantial ownership interest based
    on a valuation of the entrepreneur's ownership interest. DHS believes
    that the percentages provided within the final rule offer clear
    guidance to stakeholders and adjudicators as to what constitutes a
    substantial ownership interest regardless of the industry involved.
    Reliance upon valuations of an owner's interest would unnecessarily
    complicate the adjudicative review process, could potentially increase
    fraud and abuse, and may be burdensome for the applicant to obtain from
    an independent and reliable source. DHS, therefore, believes that the
    best indicator of an entrepreneur's ownership interest is the
    individual's ownership percentage since that is easy for an applicant
    to establish and provides an objective indicator for DHS to assess. DHS
    has decided to take an incremental approach and will consider potential
    modifications in the future after it has assessed the implementation of
    the rule and its impact on operational resources.
    2. Other Comments on Entrepreneur Definition
    Comment: One commenter stated that, in defining who counts as an
    ``entrepreneur,'' the rule should take into account whether an
    individual has been successful in the past, including by having
    previously owned and developed businesses, generated more than a
    certain amount of revenue, created more than a certain number of jobs,
    or earned at least a certain amount.
    Response: Under this final rule, evidence regarding an
    entrepreneur's track record may be considered in determining whether to
    parole an individual into the United States for ``significant public
    benefit.'' The final rule's definition of entrepreneur requires the
    applicant to show that he or she both: (1) Possesses a substantial
    ownership interest in the start-up entity, and (2) has a central and
    active role in the operations of that entity, such that the alien is
    well-positioned, due to his or her knowledge, skills, or experience, to
    substantially assist the entity with the growth and success of its
    business. See new 8 CFR 212.19(a)(1). Some of the factors suggested by
    the commenter are

    [[Page 5246]]

    relevant evidence that the applicant can submit to show that he or she
    is well-positioned to substantially assist the entity with the growth
    and success of its business. DHS will also evaluate the totality of the
    evidence to determine whether an applicant's presence in the United
    States will provide a significant public benefit and that he or she
    otherwise merits a favorable exercise of discretion. Given the way an
    entrepreneur's track record may already be considered on a case-by-case
    basis, DHS believes it is unnecessary to make the specific factors
    identified by the commenter their own separate criteria in determining
    whether to grant parole or re-parole.
    Comment: A few commenters recommended that DHS clarify the term
    ``well-positioned'' as used in the definition of ``entrepreneur.'' See
    final 8 CFR 212.19(a)(1) (requiring an international entrepreneur to
    prove that he or she ``is well-positioned, due to his or her knowledge,
    skills, or experience, to substantially assist the entity with the
    growth and success of its business''). The commenters believe that the
    proposed rule did not explain how an applicant would demonstrate that
    he or she is ``well-positioned.'' The commenters recommend that the
    ``substantial ownership interest'' test in the same provision should
    provide a rebuttable presumption that the entrepreneur is ``well-
    positioned'' and that the ``significant capital financing''
    requirements reflect the market demand for the entrepreneur to grow the
    business.
    Response: DHS believes that both the proposed rule and this final
    rule sufficiently explain how an applicant may establish that he or she
    is ``well-positioned'' to grow the start-up entity. An applicant may
    generally establish that he or she is well-positioned to advance the
    entity's business by providing evidence that he or she: (1) Possesses a
    significant (at least 10 percent) ownership interest in the entity at
    the time of adjudication of the initial grant of parole, and (2) has an
    active and central role in the operations and future growth of the
    entity, such that his or her knowledge, skills, or experience would
    substantially assist the entity in conducting and growing its business
    in the United States. Such an applicant cannot be a mere investor. The
    applicant must be central to the entity's business and well-positioned
    to actively assist in the growth of that business, such that his or her
    presence would help the entity create jobs, spur research and
    development, or provide other benefits to the United States. Whether an
    applicant has an ``active and central role,'' and therefore is well-
    positioned to advance the entity's business, will be determined based
    on the totality of the evidence provided on a case-by-case basis. Such
    evidence may include:
    Letters from relevant government agencies, qualified
    investors, or established business associations with an understanding
    of the applicant's knowledge, skills or experience that would advance
    the entity's business;
    news articles or other similar evidence indicating that
    the applicant has received significant attention and recognition;
    documentation showing that the applicant or entity has
    been recently invited to participate in, is currently participating in,
    or has graduated from one or more established and reputable start-up
    accelerators;
    documentation showing that the applicant has played an
    active and central role in the success of prior start-up or other
    relevant business entities;
    degrees or other documentation indicating that the
    applicant has knowledge, skills, or experience that would significantly
    advance the entity's business;
    documentation pertaining to intellectual property of the
    start-up entity, such as a patent, that was obtained by the applicant
    or as a result of the applicant's efforts and expertise;
    a position description of the applicant's role in the
    operations of the company; and
    any other relevant, probative, and credible evidence
    indicating the applicant's ability to advance the entity's business in
    the United States.
    Particularly given the way this evidence will be evaluated on a
    case-by-case basis, and the need to ensure parole is justified by
    significant public benefit, DHS declines to adopt the commenters'
    suggestion of adopting a rebuttable presumption that certain applicants
    meet the ``well-positioned'' requirement. The burden of proof remains
    with the applicant.
    Comment: One commenter representing a group of technology companies
    recommended that DHS add the term ``intellectual property'' as a metric
    that an adjudicator would take into consideration when determining the
    ``active and central role'' that the international entrepreneur
    performs in the organization. The commenter noted that it had several
    member companies that have non-citizen inventors on a key patent
    application, and have had core intellectual property developed by non-
    citizens, often within the university environment. In many of these
    situations, the non-citizen inventors were unable to obtain work
    authorization and join the emerging startup company, resulting in loss
    of key technical ability, delay, and additional cost for the startup
    company to achieve market success. The commenter believes this rule
    could alleviate this investment risk.
    Response: As discussed above, an applicant for parole under this
    rule may provide any relevant, probative, and credible evidence
    indicating the applicant's ability to advance the entity's business in
    the United States. Such evidence includes documentation pertaining to
    intellectual property of the start-up entity, such as a patent, that
    was obtained by the applicant or as a result of the applicant's efforts
    and expertise. DHS will consider such evidence to determine whether the
    applicant performs, or will perform, an active and central role in the
    start-up entity.
    Given the breadth of evidence that can already be considered in
    these determinations, DHS declines to amend the definition of
    ``entrepreneur'' in 8 CFR 212.19(a)(1) to include some consideration of
    ``intellectual property'' as a specific metric to determine if the
    applicant will have an active and central role in the start-up entity.
    DHS believes it is appropriate to allow for sufficient flexibility in
    the definition for adjudicators to evaluate each case on its own
    merits. Given the considerable range of entrepreneurial ventures that
    might form the basis for an application for parole under this rule, DHS
    believes that such flexibility is important to ensure that cutting edge
    industries or groundbreaking ventures are not precluded from
    consideration simply because of an overly rigid or narrow definition of
    ``entrepreneur.''
    Comment: One commenter noted that DHS's inclusion of criteria in
    section IV.B.1. of the NPRM, ``Recent Formation of a Start-Up Entity,''
    is reminiscent of criteria used in the O-1 nonimmigrant classification
    for individuals with extraordinary ability, except for the focus on
    entrepreneurial endeavors. The commenter especially welcomed the final
    ``catch-all'' that referenced ``any other relevant, probative, and
    credible evidence indicating the entity's potential for growth.'' The
    commenter asserted that as it pertains to ``newspaper articles,'' one
    of the major difficulties of the O-1 petition process is the lack of
    awareness by adjudicators of tech-press publications, such as Recode or
    TechCrunch. The commenter explained that coverage in these publications
    is very valuable to startups, and forcing startups to garner
    traditional media coverage in publications like the Wall Street Journal
    or the New York

    [[Page 5247]]

    Times is often counterproductive towards the entrepreneur's success.
    Response: DHS agrees with the commenter that the list of evidence
    provided in the preamble to the NPRM and this final rule provides an
    illustrative, non-exhaustive list of the types of evidence that might
    be submitted by an applicant to establish that he or she meets the
    definition of entrepreneur in 8 CFR 212.19(a)(1). Applicants may submit
    any relevant, probative and credible evidence that demonstrates the
    entity's potential for growth, including tech-press publications.
    Comment: One commenter recommended broadening the proposed
    requirement that the parolee play a central role in operations. The
    commenter noted that the DHS November 2014 memorandum,\12\ which
    initially directed USCIS to develop a proposed rule under the
    Secretary's parole authority, refers to researchers, not just managers
    or founders. The commenter stated that in the technology world,
    ``technical founders'' are key employees who lead the research and
    development phase, and recommended that these technical founders be
    included even if they are not managing overall operations. To keep this
    expansion targeted, the commenter recommended requiring a technical
    founder to have an advanced degree in a STEM field from a U.S.
    institution of higher education.
    ---------------------------------------------------------------------------

    \12\ Memorandum from Jeh Johnson, DHS Secretary, Policies
    Supporting U.S. High-Skilled Business and Workers 4 (Nov. 20, 2014),
    at https://www.dhs.gov/sites/default/files/publications/14_1120_memo_business_actions.pdf.
    ---------------------------------------------------------------------------

    Response: DHS agrees that ``technical founders'' are often key
    employees who play an important role in the development and success of
    a start-up entity. DHS disagrees, however, with the commenter's
    assertion that the definition of entrepreneur in 8 CFR 212.19(a)(1)
    does not sufficiently encompass technical founders. Technical founders
    can perform a central and active role in the operations of their start-
    up entity, and may be well-positioned, due to their knowledge, skills,
    or experience, to substantially assist the entity with the growth and
    success of its business. The definition of ``entrepreneur'' is not
    limited to those individuals who manage the overall operations of the
    start-up entity. Thus, DHS believes it is unnecessary to broaden the
    definition of ``entrepreneur'' in the way the commenter suggests.
    Comment: One commenter suggested that the rule should provide a
    clear-cut definition of a typical entrepreneur. This commenter asserted
    that the draft rule does not adequately account for situations where a
    typical entrepreneur partially qualifies or does not qualify for
    parole, but nevertheless seeks to start a business in the United
    States. The commenter stated that USCIS and the White House should plan
    to have a separate case study team to evaluate each application.
    Response: DHS believes that the rule provides a reasonable and
    clear definition of an entrepreneur. This rule is not designed or
    intended to provide parole to everyone who seeks to be an entrepreneur,
    but will instead provide a framework for case-by-case determinations
    based upon specified criteria for determining that a grant of parole in
    this context provides a significant public benefit. The framework in
    this rule is consistent with DHS's parole authority under INA section
    212(a)(5), 8 U.S.C. 1182(a)(5), and is based on the statutory
    authorization to provide parole for significant public benefit. Each
    application for parole under this rule will be adjudicated by an
    Immigration Services Officer trained on the requirements for
    significant public benefit parole under 8 CFR 212.19. DHS believes that
    a separate case-study team could unnecessarily complicate and delay
    adjudications and declines to adopt the commenter's suggestion.
    3. Definition of Start-Up Entity--``Recently-Formed'' and the 3-year
    Limitation
    Comment: Several commenters expressed concern with the definition
    of ``start-up entity'' and the requirement that an entity, in order to
    satisfy that definition, must have been created within the 3 years
    immediately preceding the parole request filing date. A few individual
    commenters said that the 3-year limitation could be inadequate in
    certain situations, such as when investing in an inactive business with
    other co-founders to initiate the start-up, or when investing in high-
    priority areas like healthcare, biotechnology, and clean energy that
    have long gestation times. A couple of individual commenters said that
    the 3-year limitation may not be necessary given the other, more
    stringent requirements in the proposed rule. Some commenters provided
    the following recommendations relating to the 3-year limitation:
    Eliminate the limitation, lengthen the period to 5 years, lengthen the
    period to 10 years, or include a case-by-case provision allowing for
    submissions that may satisfy the definition of ``start-up entity.'' One
    commenter recommended that ``recently formed'' should include entities
    formed within the last 10 years, and also requested that where
    applicable, DHS accept alternative evidence to determine and establish
    that the company is a ``start-up'' entity, such as letters of
    attestation from investors, industry experts within a particular niche
    field, and government agencies that speak to the average growth cycle
    of a new company within a particular area. A few commenters stated that
    the 3-year limitation was appropriate.
    Response: In response to these comments, DHS revised proposed 8 CFR
    212.19(a)(2) and the definition of ``start-up entity'' in this final
    rule to require that the entity must have been formed within the 5
    years immediately preceding the filing of the initial parole
    application, rather than 3 years as proposed. DHS believes that this
    definition appropriately reflects that some entities, particularly
    given the industry in which the entity operates, may require a longer
    gestation time before receiving substantial investment, grants, or
    awards. This 5-year limitation continues to reflect the Department's
    intention for parole under this final rule: To incentivize and support
    the creation and growth of new businesses in the United States, so that
    the country may benefit from their substantial potential for rapid
    growth and job creation. DHS recognizes that the term ``start-up'' is
    usually used to refer to entities in early stages of development,
    including various financing rounds used to raise capital and expand the
    new business, but the term ``goes beyond a company just getting off the
    ground.'' \13\ Limiting the definition of ``start-up'' in this proposed
    rule to entities that are less than 5 years old at the time the parole
    application is filed is a reasonable way to help ensure that the
    entrepreneur's entity is the type of new business likely to experience
    rapid growth and job creation, while still allowing a reasonable amount
    of time for the entrepreneur to form the business and obtain qualifying
    levels of investor financing (which may occur in several rounds) or
    government grants or awards.
    ---------------------------------------------------------------------------

    \13\ U.S. Small Business Administration, Startups & High Growth
    Businesses, available at https://www.sba.gov/content/startups...wth-businesses (``In the world of business, the word `startup'
    goes beyond a company just getting off the ground.'').
    ---------------------------------------------------------------------------

    4. Other Comments on the Definition of Start-up Entity
    Comment: One commenter said that formation should be defined to be
    either the creation of a legal entity under which the activities of the
    business

    [[Page 5248]]

    would be conducted or the effective date of an agreement between the
    entrepreneur and an existing business to launch the business activities
    as a start-up, branch, department, subsidiary, or other activity of an
    existing business entity. Another commenter suggested that DHS consider
    restructuring (e.g., use successor-in-interest rules) and other pivots
    (in terms of changes in the service or product, as well as markets)
    during the 3-year period immediately preceding the filing of the parole
    application and at time of application for re-parole.
    Response: DHS appreciates the commenters' suggestions and notes
    that recent formation within the definition of ``start-up entity'' in 8
    CFR 212.19(a)(2) is already limited to the creation of the entity
    within the 5 years immediately preceding the filing date of the alien's
    initial parole request. DHS further declines to amend 8 CFR
    212.19(a)(2) to broaden what may be considered ``recently formed'' to
    include the effective date of an agreement between the entrepreneur and
    an existing business to launch new business activities, restructurings
    and other pivots. Given that this is a new and complex process, DHS has
    decided to take an incremental approach and will consider potential
    modifications in the future after it has assessed the implementation of
    the rule and its impact on operational resources.
    Comment: One commenter suggested that start-up entities under this
    rule should be limited to businesses that fill a need that is currently
    not being fulfilled in the United States.
    Response: One of the goals of this final rule is to increase and
    enhance entrepreneurship, innovation, and job creation in the United
    States; and, under this rule, evidence regarding the expected
    contributions of a start-up entity will be considered in determining
    whether to parole an individual into the United States. A successful
    start-up entity, particularly one with high-growth potential, will
    fulfill an identified business need. For example, the entrepreneur may
    be starting the business to alter an existing industry through
    innovative products or processes, innovative and more efficient methods
    of production, or cutting-edge research and development to expand an
    existing market or industry. It is also unclear from the commenter's
    suggestion how ``business need'' would be defined, and DHS believes
    that attempting to do so in this rule could result in an overly
    restrictive definition that fails to account for future innovation,
    would be unnecessarily rigid, and would lessen the rule's ability to
    retain and attract international entrepreneurs who will provide a
    significant public benefit to the United States.
    Comment: An individual commenter requested that staffing companies
    be included as a type of startup.
    Response: In this final rule, and for purposes of parole under this
    program, DHS defines a ``start-up entity'' as a U.S. business entity
    that was recently formed, has lawfully done business during any period
    of operation since its date of formation, and has substantial potential
    for rapid growth and job creation. See 8 CFR 212.19(a)(2). The rule
    requires that entities meet certain specified criteria for obtaining
    parole, but the rule does not specifically exclude staffing companies
    from participating if they otherwise meet these criteria. DHS therefore
    will not revise the definition of start-up entity in this rule as
    requested by the commenter.
    Comment: One commenter asserted that the rule fails to specify how
    a start-up entity can demonstrate that it has ``lawfully done
    business'' or ``has substantial potential for rapid growth and job
    creation.'' The commenter recommended revising the definition to more
    closely align with 8 CFR 214.2(l)(1)(ii)(G)(2) and (l)(1)(ii)(H) by
    instead requiring evidence that the entity is or will be engaged in the
    regular, systematic, and continuous provision of goods or services.
    This commenter suggested that the submission of expert witness
    testimony by a reputable third party, such as a recognized professor or
    leader in the start-up entity's proposed field, should be given
    deference and treated under the final rule as a rebuttable presumption
    establishing that the start-up ``has substantial potential for rapid
    growth and job creation.''
    Response: DHS declines to adopt the commenter's suggested changes
    in this final rule. DHS believes that an applicant can demonstrate the
    start-up entity's lawful business activities through many different
    means and will keep this requirement flexible to account for the many
    differences among start-up entities. Such evidence might include, but
    is not limited to, business permits, equipment purchased or rented,
    contracts for products or services, invoices, licensing agreements,
    federal tax returns, sales tax filings, and evidence of marketing
    efforts.
    DHS believes that the rule provides a clear framework for
    establishing that a start-up entity has substantial potential for rapid
    growth and job creation. See 8 CFR 212.19(b)(2)(ii) and (iii). An
    applicant generally must satisfy the criteria in 8 CFR 212.19(b)(2)(ii)
    to be considered for parole under this rule. An applicant who only
    partially meets one or both of the criteria in 8 CFR 212.19(b)(2)(ii)
    may still be eligible for consideration for parole under this rule if
    the applicant provides additional reliable and compelling evidence that
    the start-up entity has the substantial potential for rapid growth and
    job creation. DHS recognizes that the rule does not provide specific
    evidence that must be submitted in order to satisfy the alternative
    criteria in 8 CFR 212.19(b)(2)(iii). DHS believes that providing a
    specific set of evidence would have the unintended effect of narrowing
    a provision that was designed to allow for the submission of any
    evidence that the applicant believes may establish the substantial
    potential of his or her start-up entity, recognizing that such evidence
    may vary depending on the nature of the business and the industry in
    which it operates. DHS believes that it is important to retain criteria
    that provide flexibility to the applicant and DHS. Such flexibility is
    consistent with DHS's parole authority and the case-by-case nature of
    each parole determination as required by statute. See INA section
    212(d)(5)(A), 8 U.S.C. 1182(d)(5)(A).
    DHS does not believe that the rule should be revised to align with
    8 CFR 214.2(l)(1)(ii)(G)(2) and (l)(1)(ii)(H). The requirements set
    forth in 8 CFR 214.2(l)(1)(ii)(G)(2) and (l)(1)(ii)(H) relate
    specifically to eligibility for classification as an L-1 nonimmigrant
    and are not necessarily relevant to the requirements set forth in this
    rule, which are specifically designed to provide the framework by which
    USCIS will determine whether to grant parole to certain individuals for
    significant public benefit. Particularly given the way this evidence
    will be evaluated on a case-by-case basis, and the need to ensure
    parole is justified by significant public benefit, DHS declines to
    adopt the commenters' suggestion of adopting a rebuttable presumption
    that certain entities have substantial potential for rapid growth and
    job creation. The burden of proof remains with the applicant.
    5. Qualified Government Award or Grant
    Comment: One commenter stated that the rule's grant-based criteria
    for consideration focused too narrowly on awards made by government
    entities The commenter noted that entrepreneurs seek grants from a
    variety of sources and that funding from non-profits or not-for-profit
    entities (such as U.S. universities) can be significant sources of
    start-up capital. The

    [[Page 5249]]

    commenter requested that the rule be revised to allow entrepreneurs of
    non-profit start-up entities to qualify for parole under this program
    based on the receipt of charitable grants.
    Response: DHS appreciates the commenter's suggestion, but declines
    to adopt the suggestion in this final rule to include charitable grants
    as a type of qualifying grant or award under 8 CFR 212.19(a)(3). DHS
    believes, given the nature of charitable grants, that they would not
    present the same level of validation regarding the entity's high-growth
    potential as would a grant or award from a Federal, State, or local
    government entity with expertise in economic development, research and
    development, or job creation. Since the validating quality of a
    substantial government grant or award is an important factor DHS will
    rely upon to determine if the entrepreneur will provide a significant
    public benefit to the United States, and since that same validating
    quality does not necessarily extend to charitable grants or awards, DHS
    declines to adopt the commenter's suggestion. DHS notes, however, that
    nothing in this final rule prohibits entrepreneurs from accepting
    charitable grants or pointing to such funding as evidence that parole
    would be justified and that they merit a favorable exercise of
    discretion. Moreover, given that this is a new and complex process, DHS
    has decided to take an incremental approach and will consider potential
    modifications in the future after it has assessed the implementation of
    the rule and its impact on operational resources.
    Comment: One commenter noted that the definition of qualified
    government award or grant and the phrase ``federal, state, or local
    government entity,'' are ambiguous as to whether an entrepreneur may
    qualify under the rule based on a grant by a foreign government.
    According to the commenter, the rule does not explicitly state that the
    ``federal, state, or local government entity'' needs to be restricted
    to entities in the United States. The commenter encouraged USCIS to
    adopt a broad approach in determining which kinds of grants may qualify
    and to allow entrepreneurs to qualify if their start-up entity attracts
    substantial foreign government financing. The commenter also suggested
    that USCIS and CBP should again emphasize that parole may be
    discretionarily denied in cases that could risk national security or
    impair international relations.
    Response: While DHS always maintains the ability to deny parole in
    its discretion, including in those cases where there may be a national
    security or foreign relations concerns, DHS declines to expand the
    definition of qualified government grant or award to include grants or
    awards from a foreign governmental entity. To eliminate potential
    confusion, DHS is revising the definition as proposed to specifically
    exclude foreign government entities. The receipt of significant funding
    from certain U.S. federal, state or local government entities is an
    important factor that DHS will weigh in determining if the entrepreneur
    will provide a significant public benefit to the United States. DHS
    believes that significant funding from certain U.S. federal, state or
    local governmental entities is a strong indicator of a start-up
    entity's substantial potential for rapid growth, including through
    enhancing innovation, generating revenue, obtaining significant
    additional investments of capital, and creating jobs. Such government
    entities regularly evaluate the potential of U.S. businesses, so the
    choice to provide a significant award or grant to a particular start-up
    entity can be a compelling indicator of that start-up's substantial
    potential for rapid growth and job creation. Because these government
    entities are formed to serve the U.S. public, their choice to fund a
    particular business may be more indicative than that of a foreign
    government as to whether the business's operations would provide a
    significant public benefit in the United States. DHS believes that the
    reliability and weight of the independent assessment performed by
    certain U.S. federal, state or local governmental entities before
    issuing a grant or award does not necessarily extend to grants or
    awards made by foreign governmental entities. DHS therefore declines to
    adopt the commenter's suggestion to revise the rule to include funding
    from foreign governmental entities as one of the criteria in 8 CFR
    212.19(a)(3).
    6. Qualified Investment
    Comment: Some commenters suggested that DHS define ``capital''
    broadly to include cash, cash equivalents, secured or unsecured loan
    proceeds, payments for or obligations under binding leases, the value
    of goods, equipment, and intangible property such as patent rights,
    trademarks, trade secrets, and distinctive ``know how.''
    Response: DHS declines to adopt the commenters' suggestions.
    ``Qualified investment'' as a general criterion for parole is limited
    to a specific monetary investment in the form of equity or convertible
    debt, to ensure that the investment is easily valued as well as
    significant in nature. This promotes fair and efficient administration
    of the process under this rule, while also ensuring the integrity of
    that process. In addition, equity investments and convertible debt
    investments both involve a distinctive level of expert review, due
    diligence, and oversight. For example, according to the Small Business
    Administration, venture capital firms and angel investors typically
    review a business plan and evaluate a start-up's management team,
    market, products and services, operating history, corporate governance
    documents, and financial statements before making an equity
    investment.\14\ Such investment generally also involves active
    monitoring via board participation, strategic marketing, governance,
    and capital structure.\15\ While non-monetary contributions made to a
    start-up entity may not be considered as a qualified investment for
    purposes of the general criteria of a parole determination under this
    rule, the rule does not prohibit such contributions and they may be
    considered as evidence under the alternative criteria at 8 CFR
    212.19(b)(2)(iii) and (c)(2)(iii) to establish that the start-up entity
    has, or continues to have, substantial potential for rapid growth and
    job creation.
    ---------------------------------------------------------------------------

    \14\ Venture Capital, https://www.sba.gov/starting-business/finance-your-business/venture-capital/venture-capital.
    \15\ Id.
    ---------------------------------------------------------------------------

    Comment: One commenter stated that the requirement that start-up
    capital must be equity or convertible debt may be too limiting given
    the venture finance markets today. The commenter said that other
    investment instruments are commonly used by sophisticated market
    participants, and that such investments might not technically be
    considered equity or convertible debt even though they are bona fide
    capital investments. The commenter recommended that the definition be
    made ``future-proof'' by creating a catch-all for other investment
    instruments that are convertible, exchangeable, or exercisable for
    equity in the start-up, regardless of the name of the investment
    instrument.
    Response: DHS understands that the regulatory text may not capture
    all possible future investment instruments and has amended the
    regulatory text to capture other commonly used convertible securities
    now and in the future. The final rule defines ``qualified investment''
    as an investment made in good faith, and that is not an attempt to
    circumvent any limitations imposed on investments under this section,
    of lawfully derived capital in a start-up

    [[Page 5250]]

    entity that is a purchase from such entity of its equity, convertible
    debt or other security convertible into its equity commonly used in
    financing transactions within such entity's industry. DHS believes that
    this definition, in practice, will apply to other securities
    convertible into equity (other than convertible debt) that are or
    become commonly used within the start-up entity's industry, and DHS may
    issue additional guidance in the future regarding such securities as
    necessary. Given that this program is new and complex, DHS has decided
    to take an incremental approach and will consider potential
    modifications in the future after it is able to assess implementation
    of the rule and its impact on operational resources.
    7. Qualified Investor
    Comment: Several commenters, including associations and individual
    commenters, stated that the proposed ``qualified investor'' definition
    is more stringent than the ``accredited investor'' definition adopted
    by the Securities and Exchange Commission (SEC). Several commenters
    stated that many angel investors, especially newer investment firms and
    angels, would not be considered ``qualified investors'' under this
    rule. One of these commenters suggested revising the definition of a
    qualified investor using the guidelines set forth by AngelList, which
    requires all syndicate leads on their site to have registered as
    accredited investors, to have made at least two direct investments in
    technology start-ups, and to have attracted additional funding beyond
    the syndicate lead. Some commenters generally stated that many
    potentially high-growth firms started by international entrepreneurs
    will not qualify for parole or re-parole because the business did not
    receive an investment from a qualified U.S. investor, and encouraged
    the rule to be more flexible to allow for additional sources of
    capital.
    Response: In response to comments received, DHS is revising
    proposed 8 CFR 212.19(a)(5), which provides the definition of a
    qualified investor. For purposes of this section, such an individual or
    organization may be considered a qualified investor if, during the
    preceding 5 years, the individual or organization made investments in
    start-up entities in exchange for equity or convertible debt or other
    security convertible into equity commonly used in financing
    transactions within their respective industries comprising a total in
    such 5-year period of no less than $600,000. See final 8 CFR
    212.19(a)(5)(i). DHS has removed the proposed requirement that the
    total investment amount be made in 3 separate calendar years and,
    consistent with its analysis of relevant investment data, reduced the
    amount from $1,000,000 to $600,000.\16\ DHS is also making revisions
    consistent with the change to the qualified investment definition by
    adding ``other securities that are convertible into equity issued by
    such an entity and that are commonly used in financing transactions
    within such entity's industry.'' DHS agrees with commenters that the
    qualified investor requirement is more stringent than the SEC
    ``accredited investor'' definition, but believes the additional
    parameters for qualified investors under the rule are appropriate. The
    ``accredited investor'' definition for SEC purposes is focused on the
    investing entity's assets or the individual investor's net worth or
    annual income,\17\ not on the investor's track record of successfully
    investing in start-up entities. An investor's successful track record
    of investing in start-up entities provides an important measure of
    objective validation that DHS will rely upon as part of evaluating
    whether granting parole to a particular individual would provide a
    significant public benefit.
    ---------------------------------------------------------------------------

    \16\ To arrive at this level, DHS relied on the $250,000 median
    seed round for active firms that successfully exited accelerators,
    as is described more fully in in the ``Volume Projections''
    subsection of the ``Statutory and Regulatory Requirements'' section
    of this final rule notice. Second, DHS multiplied this figure by
    2.4, which is an estimate of the average number of investments made
    over a five-year period by qualified investors. DHS arrived at the
    figure for average investments over five years using the following
    methodology. DHS used the ``investor graph'' section of the Seed DB
    data set to extract investment round information for investors that
    have invested in various startup accelerators' portfolio companies.
    The search engine is not set up in a manner in which random sampling
    can be done, so DHS obtained data for nine accelerators chosen from
    the 2016 Seed Accelerator Rankings project (SARP), the report of
    which is found at: http://seedrankings.com/pdf/sarp_201...r_rankings.pdf. SARP ranks accelerators via a
    composite scoring system based on various metrics, including funding
    value averages and exit performance, and produces a list of the top-
    rated accelerators, although there is no pre-set number of
    accelerators that can appear in the ranking list each year. In the
    2016 SARP report there were twenty-three Seed Accelerators ranked
    out of a total of 160 that the program tracks. DHS was able to
    extract investment round data from nine of the twenty-three SARP
    ranked accelerators, for a total of about 3,600 individual
    investment rounds. Next, DHS grouped these rounds for the five-year
    period October 2011-November 2016 to result in 3,085 records. Next,
    DHS removed duplicates to parse the list into records for unique
    investor names. As a result, 1,329 unique investors remained.
    Dividing the 3,085 by 1,329 investors yields an average of 2.4,
    which DHS used as a reasonable estimate of the average number of
    investments that qualified investors made in a five year period, at
    least for the specific accelerators involved. DHS notes that there
    are several caveats to this analysis. First, the data only includes
    investments made through accelerators. If non-accelerator
    investments were included, for which DHS could not obtain data, the
    average would likely be higher. Second, some rounds did not include
    an amount and some investor names appeared with variations. DHS
    conducted several data runs based on different filtering techniques
    and generally the range of average investments was between 2.32 and
    2.5.
    \17\ 17 CFR 230.501(a).
    ---------------------------------------------------------------------------

    DHS also declines to adopt the investor track record criteria
    associated with AngelList's requirements, as DHS believes that the past
    success of qualified investors can be demonstrated sufficiently by
    utilizing the criteria set forth in the final rule. DHS has maintained
    the requirements under 8 CFR 212.19(a)(5)(ii) as evidence that the
    investor has had previous successful investments, which are similar to
    certain criteria for a start-up entity to demonstrate eligibility for
    re-parole under this rule. See final 8 CFR 212.19(a)(5)(ii).
    Comment: A joint submission from an advocacy group and a non-profit
    organization proposed that DHS create a ``whitelist'' of qualified
    investors and modify the rule such that any start-up receiving an
    investment from a whitelisted investor proceed through an expedited
    review process. The commenter said that this would both streamline the
    parole process and diminish the burden on adjudicators to analyze the
    merits of often complicated technology companies. The commenter said
    that the qualification process for such an investor whitelist could be
    significantly more robust than the rule's proposed definition of
    ``qualified investor'' and should be updated on an annual or biannual
    basis. Another joint submission suggested the creation of a ``Known
    Qualified Investor'' program, similar to the ``Known Employer'' pilot
    program recently created by DHS in a different context, to assist the
    overall adjudication process.
    Response: DHS appreciates the commenters' suggestions. The Known
    Employer program referenced by the commenter remains in a pilot stage.
    DHS will assess the effectiveness of the Known Employer program after
    the pilot is complete, and then determine whether the program should be
    made permanent. If the program is successful, DHS will assess whether
    it may be expanded to other adjudication contexts. Committing to use a
    similar program in the context of this rulemaking would thus be
    premature. DHS also declines to adopt the commenters' suggestion to
    create a ``whitelist of qualified investors'' and an expedited process
    for applications based on investment from such investors at this time.
    Given that this is a new and

    [[Page 5251]]

    complex process, DHS has decided to take an incremental approach and
    will consider potential modifications in the future after the
    Department has assessed the implementation the process and its impact
    on operational resources.
    8. Evidence Required To Establish Qualified Investor
    Comment: Several commenters expressed concern about the burden of
    proving that investors have met the revenue and job creation criteria
    in the definition of qualified investor, which the commenters said
    could prevent investors from participating. One commenter stated that
    early-stage investors usually do not keep records of employees or the
    revenues of their portfolio companies, and that those companies would
    not be inclined to respond to paperwork requests from their investors
    that do not relate to their own success. Another commenter said that
    some investors do not make their investments known publicly and the
    vast majority of investors do not make public their returns (let alone
    the number of jobs created). Another commenter said that the rule
    should only require evidence of publicly available information,
    concluding that it would be too invasive to require disclosure of
    confidential employee data or other confidential financial information
    of third-party companies that have no ties to the start-up entity
    related to the parole applicant. A few commenters requested that DHS
    allow venture capitalists, accelerators, and incubators to register so
    that they would not be required to produce the evidence of their
    qualifications with each parole application.
    Response: DHS does not believe that providing evidence of revenues
    generated or jobs created by entities in which the investor previously
    invested is overly burdensome or would require the investor to publicly
    reveal otherwise sensitive information. DHS believes, given the
    significance of an investor's track record of successful investment in
    start-ups to the determination of significant public benefit, that the
    need for this evidence outweighs the potential burden on the applicant
    and investor to compile and submit it. However, as DHS continues to
    assess the implementation of the process once the rule is final, the
    Department will consider potential ways to modify the process given the
    kinds of issues raised by these comments.
    9. Foreign Funding/Investment
    Comment: Several commenters provided input on the proposed
    requirement that ``qualified investor'' funds must come from either
    U.S. citizens, lawful permanent residents, or entities that are
    majority owned and controlled by U.S. citizens or lawful permanent
    residents. Nearly all commenters on this topic expressed concerns about
    this requirement as a major limiting factor of the rule. Some
    commenters focused on the potential economic benefits of broadening the
    definition of ``qualified investor'' to include foreign investment.
    These commenters asserted that it would be economically beneficial to
    allow non-U.S. investments, as there are many experienced investors
    from outside the United States that could bring direct foreign
    investment into the country and create jobs. Another commenter stated
    that, by limiting qualification to domestic investors, DHS is foregoing
    a critical opportunity to attract foreign entrepreneurs and their
    investments.
    Response: DHS disagrees with the assertion that this rule precludes
    or otherwise discourages foreign investment. This rule does not
    preclude entrepreneurs from seeking and obtaining investment from any
    number of sources, whether that is foreign investment, personal funds,
    or funds from friends and family. This rule, however, does limit the
    types of investment that will be considered by DHS as a qualifying
    investment for purpose of determining if the entrepreneur and his or
    her start-up entity meet the requirements for consideration for parole
    set out in 8 CFR 212.19. DHS believes it is important to limit the type
    and source of investment that will be considered a qualifying
    investment, since the investment is meant to serve in part as an
    objective way to help ensure and validate that the start-up entity's
    activities will benefit the United States. DHS does not believe
    investments from foreign sources--which are significantly more
    difficult for DHS to evaluate for legitimacy and screen for indicators
    of fraud and abuse--would provide the same measure of objective
    validation.
    Comment: Multiple commenters stated that eligibility criteria
    should focus exclusively on the location of the start-up entity and its
    related growth and job creation, not on the citizenship and residence
    of the investor. Some commenters stated that excluding foreign
    investors from the definition of ``qualified investors'' is unduly
    limiting, because many high-potential international entrepreneurs might
    not have a pre-existing relationship with a U.S.-based investor.
    Commenters state that such entrepreneurs, especially if living in other
    countries, would have difficulty attracting investment from U.S.
    investors and becoming eligible for parole under this rule. Another
    commenter cited data concluding that foreign entrepreneurs currently
    outside of the United States are at a particular disadvantage, as they
    lack access to U.S.-based angel and venture funding.
    Response: DHS agrees that the U.S. location of the start-up entity
    and its related growth and job creation should be a critical component
    of eligibility under this rule in order to help ensure the exercise of
    parole is justified by significant public benefit to the United States.
    DHS believes, however, that the ``qualifying investor'' must also be a
    U.S. citizen or lawful permanent resident or an entity that is majority
    owned or controlled by U.S. citizens or lawful permanent residents. DHS
    can evaluate more rapidly, precisely, and effectively whether these
    investors have an established track record of prior investments, in
    part due to greater access to relevant and reliable records. Such
    investors will also be subject to the laws of the United States, which
    provides some additional assurance that the entrepreneurs they back
    will provide a significant public benefit to the United States.
    DHS is not prohibiting foreign investors from investing in the
    entrepreneur's start-up entity, but rather is simply limiting those
    investors that can serve as ``qualified investors'' for purposes of
    establishing the entrepreneur's eligibility for parole under this rule.
    DHS anticipates that entrepreneurs living outside the United States
    will be able to demonstrate eligibility for parole consideration under
    this rule, whether based on investment from U.S. investors, grants or
    awards from certain U.S. Government entities, or a mixture of
    alternative criteria. For all the reasons above, the definition of
    ``qualified investor'' will help DHS manage an efficient process for
    adjudicating requests under this rule while appropriately screening for
    potential fraud or abuse and ensuring that each grant of parole is
    justified by significant public benefit to the United States.
    Comment: Other commenters focused on specific ways that DHS might
    allow applicants to use foreign investment to establish their
    eligibility for parole consideration, including by limiting such
    investment to the entrepreneur's country of origin, or to only those
    foreign investors who do not present a national security concern. A few
    commenters asserted that DHS has the capability to verify the bona
    fides of foreign investors through, for example, the following
    mechanisms: Making inquiries through U.S. embassy officials,

    [[Page 5252]]

    requesting resumes and the investment history for foreign angel
    investors, requesting similar documentation used by EB-5 petitioners to
    establish their lawful source of funds, and consulting publicly
    available data on reputable foreign investors with a history of
    successful investments in various countries. Some commenters provided
    suggestions for alternative or revised definitions relating to foreign
    investors that could remain easily verifiable by DHS, with the burden
    being on the investor, including (1) professionally managed funds with
    at least $10 million under management and registered with the local
    jurisdiction, and (2) angel investors that have made credible
    investments in U.S. companies under the same standards as U.S.
    ``qualified investors.'' Finally, an individual commenter expressed
    concerns that even investments from U.S. sources could be suspect, and
    could serve as a pass-through for ineligible investors such as the
    entrepreneur's family or foreign nationals.
    Response: While DHS understands that international entrepreneurs
    can attract legitimate investment capital from non-U.S. sources, DHS
    believes--as explained at greater length above--that it is appropriate
    and important to require that a ``qualified investment'' come from a
    U.S. source as one of the general criteria to establish that the start-
    up entity has the substantial potential for rapid growth and job
    creation. DHS is prepared to monitor the bona fide nature of such U.S.-
    based investments, as described in greater detail above. Moreover, the
    rule neither precludes an applicant from securing funding from non-U.S.
    sources nor precludes such funding from being considered, non-
    exclusively, under the alternative criteria at 8 CFR 212.19(b)(2)(iii)
    or (c)(2)(iii). Given that this is a new and complex process, DHS will
    consider potential modifications in the future after it has assessed
    the implementation of the rule and its impact on operational resources.
    10. Self-Funding/``Bootstrapping''
    Comment: Several commenters argued that entrepreneurs should be
    able to demonstrate eligibility for parole under this rule not only
    through funding from U.S. investors or U.S. Government entities, but
    also through self-financing (known as ``bootstrapping''). One commenter
    noted that many highly successful start-up founders initially grew
    their companies through bootstrapping, not by raising capital from
    external investors.
    Response: DHS declines to expand the definition of ``qualified
    investment'' to include self-funding by the entrepreneur applicant. DHS
    believes that this definition should include only those investors who
    have a history of making similar investments over a 5-year period and
    who can demonstrate that at least two of the entities receiving such
    investments have subsequently experienced significant growth in revenue
    or job creation. See final 8 CFR 212.19(a)(5). DHS believes that the
    investment of a substantial amount of capital by qualified investors in
    an entrepreneur's start-up entity can serve as a strong indication of
    the entity's substantial and demonstrated potential for rapid business
    growth and job creation. Self-funding, while a rational financing
    strategy for many entrepreneurs, does not provide the same objective
    and external validation that DHS requires in assessing whether granting
    parole to an individual is justified based on significant public
    benefit.
    11. Other Comments on Qualified Investors
    a. Crowdfunding
    Comment: Several commenters stated that the rule should allow
    crowdfunding as a qualified investment. These commenters noted that
    entrepreneurs have raised over a billion dollars in investments through
    various types of crowdfunding platforms, which serve to broaden the
    base of available investors and demonstrate a venture's potential
    growth. Commenters also cited the Jumpstart Our Business Startups Act
    (JOBS Act) of 2012, which created a national regulatory framework for
    securities-based crowdfunding platforms in particular, along with
    public statements suggesting that securities-based crowdfunding is
    recognized by Congress and the Administration as a valuable and
    increasingly-used investment tool. One commenter also stated that
    allowing the use of crowdfunding platforms would increase the pool of
    potential applicants for entrepreneurial parole and could provide a
    workable intermediary for foreign investment in eligible start-up
    entities. One commenter suggested potential requirements that would
    facilitate the use of crowdfunding investment sources, such as setting
    a threshold amount for eligible crowdfunding investments and confirming
    that such investments have been deposited in the start-up entity's bank
    account after the end of the crowdfunding campaign.
    Response: DHS appreciates the commenters' suggestions. Investments
    made in a start-up entity through an SEC-compliant intermediary, such
    as an SEC-compliant crowdfunding platform, will be treated no
    differently for purposes of this rule than had the investments been
    made directly. In order to promote the integrity of adjudications under
    this rule, DHS declines to make changes to the definition of
    ``qualified investor'' that would effectively treat funds generated
    through crowdfunding platforms as a different class of eligible
    investment. DHS notes, however, that evidence of a successful donation-
    based or securities-based crowdfunding campaign could be provided under
    the rule's alternative eligibility criteria.
    b. Established U.S. Investors
    Comment: One commenter questioned the requirement that capital be
    received ``from established U.S. investors (such as venture capital
    firms, angel investors, or start-up accelerators) with a history of
    substantial investment in successful start-up entities.'' The commenter
    stated that the requirement increases the relative bargaining power of
    established investors working with entrepreneurs seeking parole under
    this rule, while diminishing that of new venture capital firms, new
    angel investors, and new start-up accelerators. The commenter stated
    that if it is kept in its current form, the rule is not clear whether
    an investment from a non-established investor would jeopardize the
    parole eligibility of an entrepreneur whose start-up entity is also
    funded by established investors.
    Response: The definition of ``qualified investor, including the
    requirement that an investor have a history of substantial investment
    in successful start-up entities, is intended to help ensure that such
    investors are bona fide and not concealing fraud or other illicit
    activity--and thus protect the integrity of the parole process under
    this rule. The definition is also intended to ensure that a qualifying
    investment serves as a strong and reliable indicator of the start-up
    entity's substantial potential for rapid growth and job creation, which
    is relevant to assessing whether granting parole to an entrepreneur is
    justified by significant public benefit.
    DHS emphasizes that the rule does not prohibit investment from U.S.
    investors who do not have an established track record of substantial
    investment in start-up entities under the rule's definition of
    ``qualified investor.'' Any investment from an investor who is not a
    qualified investor, however, will not count toward the minimum
    investment criteria associated with the initial parole period or re-
    parole period. DHS will, of course, monitor all

    [[Page 5253]]

    elements of an application for evidence of fraud or other illegal or
    illicit activities. It will also assess the totality of the evidence in
    evaluating whether granting parole to an entrepreneur is justified by
    significant public benefit.
    c. Approved Regional Centers
    Comment: One commenter requested that USCIS-approved Regional
    Centers (based on an approved Form I-924) be allowed to qualify as
    established U.S. investors. The commenter stated that investment by a
    Regional Center in a U.S. start-up entity would be a natural extension
    of what Regional Centers already do, since Regional Centers pool
    investment for qualified EB-5 visa projects.
    Response: DHS believes it is important to limit qualifying
    investors to those who have an established record of successful
    investments in start-up entities. DHS believes that such a record would
    include, during the 5-year period immediately preceding the filing of
    the parole application, one or more investments in other start-up
    entities in exchange for equity or convertible debt comprising a total
    of no less than $600,000. See final 8 CFR 212.19(a)(5)(i). DHS will
    require monetary commitments, rather than non-monetary commitments such
    as credit for in-kind value (e.g., credit for services), given the
    difficulty of valuing such commitments and the potential for fraud and
    abuse. The applicant would also need to show that, subsequent to such
    investment by the investor, at least 2 such entities each created at
    least 5 qualified jobs or achieved at least $500,000 in revenue with
    average annualized revenue growth of at least 20 percent. See final 8
    CFR 212.19(a)(5)(ii).
    As described in greater detail above, these criteria are intended
    to ensure that investors are bona fide and thus protect the integrity
    of the parole process under this rule. They are also intended to ensure
    that a qualifying investment serves as a strong and reliable indicator
    of the start-up entity's substantial potential for rapid growth and job
    creation, which is relevant to assessing whether granting parole to an
    entrepreneur is justified by significant public benefit. DHS declines
    to adopt a special provision for regional centers approved to
    participate in the EB-5 visa program. Although such centers are not
    categorically excluded from the definition of ``qualified investor''
    under this rule, they would need to meet all the same criteria as any
    other qualified investor.
    12. Qualified Jobs
    a. Qualifying Employee
    Comments: Two commenters recommended that DHS broaden the
    definition of the term ``qualifying employee.'' One commenter stated
    that the term should include any individual authorized to work in the
    United States, regardless of immigration status, to avoid creating a
    conflict for employers who are prohibited from discriminating based on
    an individual's citizenship or immigration status. Another commenter
    advocated for the inclusion of independent contractors in the
    definition of qualifying employee.
    Response: DHS declines to expand the definition of qualifying
    employee, which already includes a U.S. citizen, a lawful permanent
    resident, or other immigrant lawfully authorized to be employed in the
    United States, who is not an entrepreneur of the relevant start-up
    entity or the parent, spouse, brother, sister, son, or daughter of such
    an entrepreneur. See final 8 CFR 212.12(a)(7). DHS believes that
    creating jobs for these individuals is more likely to provide a
    significant public benefit given their stronger ties to the United
    States. Similarly, DHS believes that entrepreneurs and start-up
    entities that create positions for employees are more likely to provide
    a significant public benefit than those who rely only on arrangements
    with independent contractors. Such arrangements would generally have a
    weaker nexus to the start-up entity, may not have been created as a
    direct result of the start-up entity's activities, and could be more
    difficult to validate. Nothing in this rule either supersedes or
    conflicts with nondiscrimination laws enacted under the Immigration
    Reform and Control Act (IRCA).\18\ Under existing law, it would
    generally be an unfair immigration-related employment practice for an
    entity to discriminate against someone authorized to work in the United
    States because of that person's national origin or, in the case of a
    ``protected individual,'' citizenship status. See 8 U.S.C. 1324b(a)
    (generally prohibiting such practices, subject to specific exceptions,
    and defining ``protected individual'' to include U.S. citizens, lawful
    permanent residents, and certain other immigrants). This rule does not
    permit any such otherwise prohibited practices. Instead, it uses the
    creation of jobs for U.S. citizens, permanent residents, and other
    authorized immigrants as one indication of the benefit created by an
    entrepreneur's start-up entity.\19\
    ---------------------------------------------------------------------------

    \18\ Public Law 99-603 section 102, 100 Stat. 3359 (Nov. 6,
    1986); INA section 274B.
    \19\ It is important to note that job creation during the
    initial period of parole is not the only way to demonstrate the
    start-up entity's continued substantial potential for rapid growth
    and job creation. See final 8 CFR 212.19(c)(2)(ii)(A),
    (c)(2)(ii)(C), and (c)(2)(iii).
    ---------------------------------------------------------------------------

    b. Full-Time Employment
    Comments: Several commenters said that the rule should have a more
    flexible definition of ``full-time employment.'' One commenter said
    that the definition of the term should not require the job to be filled
    for at least a year and should include job-sharing arrangements.
    Another commenter recommended that the definition of full-time
    employment include combinations of part-time positions.
    Response: DHS declines to expand the definition of full-time
    employment to include jobs filled for less than a year by a qualifying
    employee, job-sharing arrangements, and combinations of part-time jobs.
    DHS believes that the creation of long-term and full-time positions is
    a more reliable indicator that an entrepreneur's start-up entity is
    continuing to yield significant public benefit. Jobs filled for less
    than a year could be temporary or seasonal, thus limiting the duration
    and impact of the benefit. Additionally, including job-sharing or
    combinations of part-time positions could significantly complicate
    adjudications. The final rule, moreover, already reduces by half the
    threshold number of jobs to qualify for a re-parole period, making it
    all the more reasonable to require that each of such jobs be full-time
    positions as part of the criteria for ensuring that granting parole to
    an international entrepreneur is justified by significant public
    benefit.\20\
    ---------------------------------------------------------------------------

    \20\ As explained earlier, job creation during the initial
    period of parole is not the only way to demonstrate the start-up
    entity's continued substantial potential for rapid growth and job
    creation. See final 8 CFR 212.19(c)(2)(ii)(A), (c)(2)(ii)(C), and
    (c)(2)(iii).
    ---------------------------------------------------------------------------

    13. Material Change
    Comment: One commenter recommended that the final rule expressly
    exempt from the definition of ``material change'' transitions that are
    typical within start-ups, such as a company's (1) pivoting its products
    or services; (2) bringing on board a significant round of funding that
    could dilute the entrepreneur's ownership interest; (3) changing the
    role of a founder to meet the needs of the growing company; or (4) by
    virtue of a foreseeable stock or asset acquisition, executing a merger
    into or with a related or unrelated entity, or some other form of
    corporate restructuring. A few

    [[Page 5254]]

    commenters recommended that DHS clarify what constitutes a ``material
    change'' given the rapidly evolving nature of start-ups.
    Response: DHS appreciates the concerns expressed by commenters
    regarding the material change definition in the NPRM. This final rule
    reflects changes that help clarify what constitutes a material change,
    with the understanding that start-up entities are likely to experience
    a variety of transitions as part of their legitimate development and
    growth. DHS disagrees, however, that all of the events listed by
    commenters should be specifically exempted from the definition of
    material change. Some changes to the start-up entity can clearly impact
    the determination of whether the entrepreneur provides, or will
    continue to provide, a significant public benefit to the United States.
    It is essential to the rule's integrity that such material changes are
    clearly defined and reported to DHS. In the final rule, DHS has
    outlined those changes that DHS believes are critical to the continuing
    eligibility of the entrepreneur to be granted parole based on a
    significant public benefit to the United States. Specifically, the
    final rule maintains that the following changes are material: Any
    criminal charge, conviction, plea of no contest, or other judicial
    determination in a criminal case concerning the entrepreneur or start-
    up entity; any complaint, settlement, judgment, or other judicial or
    administrative determination concerning the entrepreneur or start-up
    entity in a legal or administrative proceeding brought by a government
    entity; any settlement, judgment, or other legal determination
    concerning the entrepreneur or start-up entity in a legal proceeding
    brought by a private individual or organization other than proceedings
    primarily involving claims for damages not exceeding 10 percent of the
    current assets of the entrepreneur or start-up entity; a sale or other
    disposition of all or substantially all of the start-up entity's
    assets; the liquidation, dissolution, or cessation of operations of the
    start-up entity; and the voluntary or involuntary filing of a
    bankruptcy petition by or against the start-up entity. DHS has revised
    the definition of ``material change'' to include the cessation of the
    entrepreneur's qualifying ownership interest in the start-up entity.
    DHS recognizes that not all changes to the ownership structure of a
    start-up entity constitute a change of such significance that it would
    reasonably affect the outcome of the determination of whether the
    entrepreneur provides, or continues to provide, a significant public
    benefit to the United States. DHS has revised the final rule to limit
    material change regarding ownership changes only to ``a significant
    change with respect to ownership and control of the start-up entity.''
    For example, a significant change with respect to ownership and control
    of the start-up entity may include a transfer of equity in the start-up
    entity that results in an owner or owners not previously identified on
    the Application for Entrepreneur Parole (Form I-941) collectively
    acquiring a controlling stake in the entity. DHS recognizes that
    achieving a significant round of funding for the start-up entity during
    the initial parole period may often constitute the very qualifying
    investment that renders the entrepreneur eligible for a re-parole
    period under this rule's significant public benefit test, despite
    diluting the entrepreneur's ownership interest. While DHS will make
    these determinations on a case-by-case basis, DHS does not anticipate
    that such significant changes with respect to ownership and control of
    the start-up entity will often result in termination of parole. A full
    vetting of new investors with a significant ownership interest,
    however, can provide DHS with additional insights into the start-up
    entity's activities in the United States and will help DHS ensure the
    entrepreneur is continuing to provide a significant public benefit to
    the United States. In the future, DHS may issue additional guidance on
    the scope of such significant changes in ownership interest if deemed
    necessary.
    DHS believes these changes are sufficient to clarify the definition
    of ``material change'' in regulation and to provide entrepreneurs with
    sufficient detail about the kinds of changes that could impact their
    eligibility and must be reported. Given that this is a new and complex
    process, DHS will consider potential modifications in the future after
    it has assessed the implementation of the rule and its impact on
    operational resources.

    E. Application Requirements

    1. Application for Entrepreneur Parole
    Comments: One commenter supported the Application for Entrepreneur
    Parole (Form I-941), and called it ``ideal'' because without the form
    applicants must attempt to list information on existing application
    forms that do not specifically relate to entrepreneurs. Another
    commenter requested that the application process resemble the Canadian
    express entry immigration system and be simplified so that the
    assistance of an attorney is not required.
    Response: DHS agrees with the comment that the Form I-941 is
    beneficial for capturing information specific to parole requests filed
    under this rule. DHS declines to model the application process for
    parole under this rule after the Canadian express entry program as that
    program is a points system designed to manage applications for
    permanent residence under certain Canadian federal economic immigration
    programs.\21\ DHS has attempted to develop the Form I-941 to be as
    simple as possible for applicants while capturing sufficient
    information to enable adjudicators to make appropriate case-by-case
    decisions under the statutory and regulatory requirements for parole.
    ---------------------------------------------------------------------------

    \21\ http://www.cic.gc.ca/english/express-entry/.
    ---------------------------------------------------------------------------

    2. Submissions of Documentary/Supporting Evidence
    Comment: Two commenters expressed concern that the evidentiary
    requirements were excessive and that start-up entities operating in
    ``stealth-mode'' would not be able to provide letters or media
    articles. Both commenters suggested that evidence of a significant
    capital investment from a qualified investor should be sufficient to
    demonstrate the potential for rapid growth and job creation.
    Response: As an initial matter, DHS recognizes there may be
    legitimate reasons for operating a start-up in a manner that does not
    attract significant public attention. In part for this reason, this
    final rule extends the definition of start-up entity to include
    entities formed within the 5 years immediately preceding the filing
    date of the applicant's initial parole request. DHS believes that
    start-up entities that are seeking to operate without significant
    public attention will generally have sufficient time to emerge from
    that status prior to the parole application.
    DHS agrees with the commenters that evidence of having received
    substantial investment from a qualified investor may be sufficient to
    establish that the start-up entity has the potential for rapid growth
    and job creation (one factor in making parole determinations under this
    rule). See 8 final CFR 212.19(b)(2)(ii)(B)(1). DHS understands that
    other evidence that may be required to establish eligibility for parole
    consideration under this rule, including whether the applicant is well-
    positioned to advance the entity's business, may not be a matter of
    public record. DHS believes, however, that even an entrepreneur
    operating a company in

    [[Page 5255]]

    ``stealth mode'' should generally be able to provide such evidence for
    purposes of satisfying the requirements of this rule. Indeed, for
    entrepreneurs to be paroled under this rule, they must persuade
    adjudicators, based on the totality of the evidence, that they will
    provide a significant public benefit.
    3. Application Requirements of Spouses and Minor Children
    Comment: DHS received a few comments supporting the provision in
    the proposed rule allowing the spouse and children of an entrepreneur
    granted parole under this rule to also apply for and be granted parole
    in the United States in order to accompany or ultimately join the
    entrepreneur. One commenter also supported the proposal to allow the
    spouse, if granted parole, to obtain employment authorization in the
    United States in order to work and help support the entrepreneur's
    family.
    Response: DHS agrees with these comments. Each spouse or child
    seeking parole must independently establish eligibility for parole
    based on significant public benefit (or, alternatively, for urgent
    humanitarian reasons), and that the individual merits a favorable
    exercise of discretion. In a case in which an entrepreneur has been
    granted parole based on significant public benefit under this rule, DHS
    may consider granting parole to the entrepreneur's spouse and children
    who provide a significant public benefit by maintaining family unity
    and thereby further encouraging the entrepreneur to operate and grow
    his or her business in the United States--and to provide the benefits
    of such growth to the United States.
    Under this final rule, spouses of entrepreneur parolees who wish to
    obtain employment authorization must apply for an EAD pursuant to 8 CFR
    274a.12(c)(34), consistent with current parole policy that allows
    parolees to apply for employment authorization. DHS agrees with the
    commenter that allowing spouses of entrepreneurs to apply for work
    authorization may alleviate a significant portion of the potential
    economic burdens that entrepreneurs and their families may face, such
    as paying for education expenses for their children, and to ensure that
    they satisfy the condition on their parole that they maintain household
    income that is greater than 400 percent of the Federal poverty line, as
    they grow and develop their start-up entities. Moreover, extending
    employment authorization to the spouse may further incentivize an
    international entrepreneur to bring a start-up entity to the United
    States--along with new jobs, innovation, and growth--rather than create
    it in another country.
    4. Other Comments on Application Requirements
    Comment: One commenter asked that DHS clarify the application
    procedures for Canadians and whether they may apply at the border or
    whether they must visit a U.S. consulate prior to requesting to be
    paroled at a U.S. port of entry.
    Response: Canadians and applicants from other countries may apply
    for parole under this rule while inside or outside of the United
    States. If the applicant's parole request is approved, the applicant
    would request to be paroled by Customs and Border Protection at a U.S.
    port of entry after arriving from outside the United States. Canadian
    nationals who will be appearing at a U.S. port of entry directly from
    Canada will not have to visit a U.S. consulate prior to appearing at
    the port of entry and requesting that CBP grant parole. Canadian
    nationals who will not be appearing at a U.S. port of entry directly
    from Canada, and will instead be travelling to the United States from
    another country abroad to request a grant of parole may, similar to
    other applicants, have to visit a U.S. consulate first in order to
    obtain travel documentation (e.g., a boarding foil) that allows the
    individual to travel to a U.S. port of entry. In all cases, however,
    the individual must have an approved Form I-941 before the individual
    may appear at the port-of-entry to request a grant of parole.

    F. Parole Criteria and Conditions

    1. Minimum Investment
    Comment: Numerous commenters--including advocacy groups, law firms,
    associations, and individual commenters--argued that the proposed
    rule's minimum investment criterion for the initial parole period would
    set too high an eligibility bar for many high-potential entrepreneurs.
    Citing a range of different kinds of evidence, several commenters
    argued that the proposed $345,000 threshold represented significantly
    more capital than is actually needed by most start-ups initially and
    would unnecessarily exclude from consideration some entrepreneurs whose
    entities would create significant public benefit in the United States.
    Response: In response to public comments, DHS is reducing the
    proposed minimum investment of $345,000 to $250,000 in the final rule.
    See 8 final CFR 212.19(b)(2)(ii)(B)(1). Multiple public comments
    recommended setting the threshold at $250,000, and DHS's further
    analysis of seed and angel investment data indicates that this level is
    reasonable. As is described more fully in the ``Volume Projections''
    subsection of the ``Statutory and Regulatory Requirements'' section of
    this final rule, DHS's analysis of investments received by a set of new
    firms that graduated from startup accelerator programs revealed that
    the median seed investment was $250,000.\22\ Following the intent of
    this final rule to increase and enhance entrepreneurship, innovation,
    and job creation in the United States, DHS determined that investment
    amounts that entrepreneurs would need to meet to be considered for
    parole under this rule should be more in line with typical early
    investment rounds, rather than the higher investment levels typical of
    later rounds. In each individual case, DHS must be persuaded that
    granting parole would provide a significant public benefit and that the
    person requesting parole merits a favorable exercise of discretion.
    ---------------------------------------------------------------------------

    \22\ The data utilized by DHS is provided publicly by SeedDB:
    http://seed-db.com/accelerators, as well as the Angel List: https://angel.co/, and the Angel Capital Association (ACA): https://www.angelcapitalassociation.org/.
    ---------------------------------------------------------------------------

    Comment: One commenter stated that there should not be a minimum
    investment amount and suggested that the rule instead establish minimum
    revenue amounts. Several other commenters suggested that evidence of
    rapid revenue growth should be a standalone eligibility criterion for
    the initial parole period under 8 CFR 212.19(b)(2)(ii).
    Response: DHS disagrees with the suggestion that there should not
    be a minimum investment amount. Establishing a minimum investment
    amount based on available data provides a clear and predictable
    benchmark for how an applicant may demonstrate that a start-up entity
    has substantial potential for rapid growth and job creation (one factor
    in making parole determinations under this rule). If international
    entrepreneurs are unable to meet the threshold investment amount but
    have received some qualified investments or qualified government awards
    or grants, they may alternatively qualify for parole consideration
    under this rule if they partially meet the threshold criteria and
    provide ``other reliable and compelling evidence of the start-up
    entity's substantial potential for rapid growth and job creation.'' See
    final 8 CFR 212.19(b)(2)(iii).

    [[Page 5256]]

    DHS disagrees with the suggestion that evidence of rapid revenue
    growth or generation of a certain amount of revenue should be a
    separate criterion under 8 CFR 212.19(b)(2)(ii). In setting threshold
    criteria, DHS intends to identify reliable indicators of a start-up
    entity's substantial potential for rapid growth and job creation and,
    ultimately, of the significant public benefit that a grant of parole
    would provide in an individual case. DHS does not believe that revenue
    should be the sole external validation factor as compared to
    substantial funding from qualified U.S. investors and government
    entities for initial parole applications. DHS reiterates, however, that
    a start-up entity's revenue may be taken under consideration, both
    under the ``alternative criteria'' test and as part of the totality of
    evidence relevant to whether the grant of parole in an individual case
    would be justified by significant public benefit and the person
    requesting parole deserves a favorable exercise of discretion. See 8
    CFR 219.2(b)(2)(iii), 219.2(c)(2)(B)(iii).
    Comment: Several individual commenters recommended that the
    investment threshold be based upon the type of business activity.
    Response: In an effort to provide a reasonable level of simplicity
    and predictability in the final rule, DHS decided to utilize a single
    investment threshold rather than several amounts based on the type of
    business activity. DHS believes that determining multiple investment
    thresholds based on business activity or industry would be unduly
    complicated, making adjudications more labor-intensive and increasing
    processing times. DHS believes that using a single investment
    threshold, backed by available data, is a reasonable approach and
    provides a clearer benchmark for applicants, investors, and
    adjudicators.
    Comment: Some commenters provided input on the requirement that
    funding be received within the preceding 365 days. A CEO roundtable
    agreed that the $345,000 threshold was an appropriate amount, but
    questioned the 365-day requirement, recommending that the rule be
    changed to require that only 65 percent of the investment to have
    occurred within the last 365 days. A trade association and a joint
    submission from a professional association and a non-profit
    organization recommended that the investment occur within a 3-year
    window. As an alternative, the trade association stated that some of a
    start-up entity's capital that would otherwise count toward the
    qualified investment amount should do so even if its ultimate receipt
    by the start-up entity is contingent upon the approval of parole.
    Response: DHS is revising the proposed requirement that the
    substantial investment be received within the 365 days immediately
    preceding the filing of the application for initial parole. The final
    rule increases this period from 12 months (365 days) to 18 months. DHS
    made this change based on feedback that it often takes longer than 12
    months for a start-up to secure and receive investment funding. This
    revised requirement still ensures that a qualified investor or
    government entity has recently validated (within 18 months) the start-
    up entity's potential for rapid growth and job creation. With respect
    to the comment suggesting that DHS accept funding contingent upon
    approval of parole toward the qualified investment amount, DHS believes
    that funds contingent on the occurrence of a future event, such as a
    grant of parole to the entrepreneur, would not satisfy the general
    criteria in 8 CFR 212.19(b)(2)(ii). DHS notes, however, that such funds
    may be considered under the alternative criteria in 8 CFR
    212.19(b)(2)(iii) if the entrepreneur partially meets one or both of
    the criteria in 8 CFR 212.19(b)(2)(ii)(B), since DHS may consider such
    contingent funds as other reliable and compelling evidence of the
    start-up entity's substantial potential for rapid growth and job
    creation. Given that this process is a new and complex one, DHS has
    decided to take an incremental approach and will consider the suggested
    modification in the future after assessing the implementation of the
    rule and its impact on operational resources.
    2. Minimum Government Grants or Awards
    Comment: Several commenters argued that DHS should require less
    than $100,000 to meet the eligibility criteria based on a start-up
    entity's receipt of government grants and awards. An individual
    commenter said that most government grants were well beneath the
    $100,000 minimum threshold in the proposed rule. Another individual
    commenter recommended a $50,000 government grant threshold. By
    contrast, one commenter stated that the $100,000 minimum investment for
    government grants and awards is too low to start a meaningful business
    and suggested increasing the amount to $500,000 or more. Several
    commenters stated that the $100,000 grant threshold aligns with the
    timing of the Federal Small Business Innovation Research (SBIR) \23\
    and Small Business Technology Transfer (STTR) awards and dollar
    amounts.
    ---------------------------------------------------------------------------

    \23\ The Small Business Innovation Research (SBIR) program is
    coordinated by the Small Business Administration to seed capital for
    start-up businesses. It is designed to stimulate technological
    innovation among small private-sector businesses, and it is the
    largest source of seed capital in the United States for technology
    driven start-ups, funding between 5,000 and 7,000 projects a year.
    The ``first phase'' award is an innovation grant made for initial
    eligibility and corresponds to the start-up of the commercial
    business and proof of ``concept phase''--the average award amounts
    vary by department, but most SBIR Phase I awards are made at or
    below $150,000. The Phase I awards are geared towards financing the
    startup of the private commercial entity and also the innovation and
    research and development (R&D) that the enterprise undertakes.
    ---------------------------------------------------------------------------

    Response: DHS declines to make the suggested changes to the minimum
    government grant or award threshold. In light of the range of comments
    received on increasing or decreasing the minimum grant amount, DHS
    believes its proposed minimum grant amount is reasonable. Because
    government entities regularly evaluate the potential of U.S.
    businesses, the choice to provide a significant award or grant to a
    particular start-up entity will often be a strong indicator of that
    start-up's substantial potential for growth and job creation.
    Additionally, because government entities are by definition formed to
    serve the public, the choice by such an entity to fund a particular
    business generally indicates the government entity's independent
    assessment that the business's operations would provide a significant
    public benefit--and can be a strong indicator of a start-up entity's
    substantial potential for rapid growth and job creation. The specific
    $100,000 minimum government funding threshold identified in this final
    rule is based in part on the fact that seed funding awards (``Phase I''
    awards) from the Federal SBIR/STTR program are generally below
    $150,000.
    3. Initial Parole Alternative Criteria
    Comment: Several commenters offered suggestions for the factors to
    be considered by DHS under the rule's alternative criteria for the
    initial parole period, such as adding a metric for number of users or
    customers of the entrepreneur's start-up entity, the start-up entity's
    social impact, and the start-up entity's national scope or location in
    a low- or middle-class neighborhood. Other commenters proposed the
    following factors: The applicant's academic degree; participation in or
    training from a start-up accelerator; prior success as demonstrated by
    market share from patented innovations, annual sales volume, or job
    creation; and

    [[Page 5257]]

    demonstrated success using alternative funding platforms.
    Response: DHS agrees with these suggestions. DHS may consider the
    following additional types of evidence, among others, as factors under
    the alternative criteria for those applicants who partially satisfy 8
    CFR 212.19(b)(2)(ii):
    number of users or customers;
    revenue generated by the start-up entity;
    social impact of the start-up entity;
    national scope of the start-up entity;
    positive effects on the start-up entity's locality or
    region;
    success using alternative funding platforms, including
    crowdfunding platforms;
    the applicant's academic degrees;
    the applicant's prior success in operating start-up
    entities as demonstrated by patented innovations, annual revenue, job
    creation, or other factors; and
    selection of the start-up entity to participate in one or
    more established and reputable start-up accelerators or incubators.
    With respect to start-up accelerators and incubators, DHS expects
    to evaluate them on several relevant factors, including years in
    existence, graduation rates, significant exits by portfolio start-ups,
    significant investment or fundraising by portfolio start-ups, and
    valuation of portfolio start-ups.
    DHS understands that some applicants will be able to establish that
    their start-up entity is likely to grow rapidly and create jobs based
    on other factors beyond only the amount of capital investment or
    government funding received, which is why DHS has not limited the types
    of evidence that may be considered under the alternative criteria at 8
    CFR 212.19(b)(2)(iii) for those who only partially meet the initial
    threshold criteria at 8 CFR 212.19(b)(2)(ii)(B).
    Comment: One commenter suggested linking the rule's application to
    applications for other initiatives, such as National Minority Supplier
    Development Council Certification and, when applicable, Minority Women
    Based Entrepreneur Certification.
    Response: DHS appreciates the commenters' suggestions but declines
    to adopt these factors as evidence of substantial potential for rapid
    business growth or job creation. Nothing in this rule prohibits or
    discourages entrepreneurs from participating in initiatives or
    certification processes designed to help promote more diverse and
    inclusive entrepreneurship. DHS does not believe, however, that such
    initiatives and certifications independently provide sufficient
    external validation that a start-up entity has the substantial
    potential for rapid growth or job creation and meets the ``significant
    public benefit'' requirement under this rule. Evidence that the start-
    up is involved with certain initiatives in the public interest can,
    however, be considered a positive factor in determining whether an
    entrepreneur merits a grant of parole as a matter of discretion. Given
    that this is a new and complex process, DHS has decided to take an
    incremental approach and will consider potential modifications in the
    future after it has assessed the implementation of the rule and its
    impact on operational resources.
    Comment: One commenter said the term ``reliable and compelling
    evidence'' in proposed 8 CFR 212.19(b)(2)(iii), with respect to the
    start-up entity's substantial potential for rapid growth and job
    creation, is too vague and should be elaborated on further in the
    regulatory text.
    Response: DHS disagrees with the commenter's suggestion to
    elaborate further in 8 CFR 212.19(b)(2)(iii) on the type of evidence
    that may be submitted and considered as reliable and compelling. DHS
    believes that this alternative criterion should be flexible so as not
    to restrict the types of evidence that may be submitted and relied upon
    to determine if the start-up entity has substantial potential for rapid
    growth and job creation. DHS believes that such flexibility is
    important given the case-by-case nature of these discretionary parole
    determinations. An applicant for parole under this rule who does not
    meet the threshold capital investment or government funding criteria in
    8 CFR 212.19(b)(2)(ii)(B) may submit any evidence that the applicant
    believes is reliable and compelling to support the claim that the
    applicant's start-up entity has substantial potential for rapid growth
    and job creation. DHS, after reviewing the application and all of the
    evidence submitted in support of the application, will make a
    determination as to whether the applicant is eligible for parole
    consideration under the relevant statutory and regulatory standards,
    and as to whether the person seeking parole merits a favorable exercise
    of discretion.
    Comment: One commenter asserted that securing an investment from a
    U.S. investor or obtaining a U.S. government grant or award is not a
    viable option for most people.
    Response: DHS believes that qualified investments or government
    funding are appropriate factors to consider when assessing the ability
    of a start-up entity to achieve rapid growth and job creation (one
    factor in making parole determinations under this rule). DHS, however,
    understands that some start-up entities with the potential to yield
    significant public benefit may have legitimate economic or strategic
    reasons to not pursue or accept capital investment or government
    funding at the levels set forth in 8 CFR 212.19(b)(2)(ii)(B).
    Therefore, DHS has provided in the rule an alternative criterion for
    further consideration of those applications where the applicant only
    partially satisfies the capital investment or government funding
    thresholds, but provides additional reliable and compelling evidence
    that establishes the substantial potential of the start-up entity for
    rapid growth and job creation.
    Comment: A commenter suggested that, instead of focusing on capital
    investment and job creation criteria, DHS should focus on whether the
    start-up entity would be in industries in traded sectors. The commenter
    proposed that the following industries would qualify: Manufacturing,
    software publishers, Internet publishing, and research and development
    services.
    Response: While DHS recognizes the benefits of increased exports to
    the U.S economy, it declines to limit eligible start-up entities to
    traded sectors, since start-up entities in a much wider set of
    industries can yield significant public benefit to the United States
    through rapid growth and job creation.
    Comment: A commenter requested that DHS form an advisory group of
    industry experts to recommend alternative criteria.
    Response: DHS afforded an opportunity for notice and comment on the
    NPRM and expressly sought proposals for alternative criteria from the
    public. DHS does not believe that forming a new advisory group is
    necessary at this time.
    Comment: One commenter suggested that the term ``rapid growth''
    should be determined based on factors pertaining to the start-up
    entity's industry, normal business growth in the industry, geographic
    area, and the amount of investment in the entity. The commenter also
    recommended that the term ``substantial potential'' take into account
    the start-up entity's particular geographic area rather than a national
    scale.
    Response: While the industry- and geography-specific factors
    suggested by the commenter may be taken into consideration by DHS as
    part of the totality of the circumstances for a given application, DHS
    believes that the general and alternative eligibility criteria provided
    in the final rule are

    [[Page 5258]]

    sufficient to determine if a start-up entity has the substantial
    potential for rapid growth and job creation, and provide a more
    predictable framework by which these parole applications will be
    adjudicated than would a more mechanical and unduly rigid consideration
    of the variables suggested by the commenter.
    4. Re-parole Criteria
    a. Minimum Investment or Grants/Awards
    Comment: Several commenters discussed the proposed re-parole
    eligibility criteria at 8 CFR 212.19(c)(2)(ii)(B)(1), namely that the
    applicant's start-up entity has received at least $500,000 in
    qualifying investments, qualified government grants or awards, or a
    combination of such funding, during the initial parole period. Most
    commenters argued that this funding level was unduly high, especially
    given the duration of the initial parole period.
    Response: DHS declines to adjust the $500,000 funding threshold.
    See final 8 CFR 212.19(c)(2)(ii)(B)(1). DHS believes that $500,000 is a
    reasonable level for re-parole. An industry report on startups shows
    the median seed investment round for the first half of 2016 was
    $625,000, which rose from $425,000 in 2015. This figure is valuable
    because it includes seed rounds for firms that participate with
    accelerators and that often start out with investment rounds below
    $100,000.\24\ The median for angel group seed investments is reported
    at $620,000 as the annual average over 2013-2015, which rose sharply to
    $850,000 in 2015 from a median of $505,000 from the previous two years.
    Venture capital round sizes are even larger, as the 2014 median round
    size for both seed and startup stage venture rounds was $1,000,000.
    ---------------------------------------------------------------------------

    \24\ The report on the seed median is published as a newsletter
    by Crunchbase and is found at: https://techcrunch.com/2016/09/07/cr...round-in-2016/. The Angel group
    median round size is obtained from the Angel Resource Institute's
    annual (2015) ``Halo Report,'' found at http://angelresourceinstitute.org/re...on-ye-2015.pdf. The venture capital figures are obtained from the Ernst
    and Young Venture Capital Insights Report (4th quarter 2014) and are
    found at: http://www.ey.com/Publication/vwLUAssets/Venture_Capital_Insights_4Q14_-_January_2015/%24FILE/ey-venture-capital-insights-4Q14.pdf.
    ---------------------------------------------------------------------------

    DHS has also increased the length of the initial parole period from
    24 months to 30 months. This change will allow entrepreneurs additional
    time to seek and receive qualified investments or government funding,
    to meet the re-parole criteria. If an entrepreneur is unable to meet
    the minimum funding criterion, moreover, he or she may still be
    eligible for re-parole based on revenue generated or jobs created. See
    final 8 CFR 212.19(c)(2)(ii)(B)(2) and (3). Under the final rule,
    entrepreneurs partially meeting the threshold re-parole criteria may
    alternatively qualify ``by providing other reliable and compelling
    evidence of the start-up entity's substantial potential for rapid
    growth and job creation.'' Final 8 CFR 212.19(c)(2)(iii).
    b. Minimum Annual Revenue
    Comment: Several commenters discussed the proposed re-parole
    criterion at 8 CFR 212.19(c)(2)(ii)(B)(3), which establishes an
    eligibility threshold when the applicant's start-up entity has reached
    at least $500,000 in annual revenue and averaged 20 percent in annual
    revenue growth during the initial parole period. Most commenters
    suggested alternative approaches, arguing that start-ups are often
    legitimately focused on the development of an innovative product or
    service, and not on generating early revenue. Another commenter stated
    that the revenue criterion is reasonable.
    Response: DHS declines to adjust these criteria. See final 8 CFR
    212.19(c)(2)(ii)(B)(1). DHS chose $500,000 in revenue and 20 percent
    annual revenue growth as threshold criteria because, after consulting
    with SBA, DHS determined these criteria: (1) Would be reasonable as
    applied across start-up entities regardless of industry or location;
    and (2) would serve as strong indications of an entity's potential for
    rapid growth and job creation (and that such entity is not, for
    example, a small business created for the sole or primary purpose to
    provide income to the owner and his or her family). As noted, DHS has
    also increased the length of the initial parole period from 24 months
    to 30 months. This change will allow entrepreneurs additional time to
    meet the minimum revenue threshold for re-parole. If an entrepreneur is
    unable to meet the minimum revenue requirement, he or she may still be
    eligible under the minimum investment or job creation criteria. See
    final 8 CFR 212.19(c)(2)(ii)(B)(1) and (2). Under the final rule,
    entrepreneurs partially meeting the threshold re-parole criteria may
    alternatively qualify ``by providing other reliable and compelling
    evidence of the start-up entity's substantial potential for rapid
    growth and job creation.'' Final 8 CFR 212.19(c)(2)(iii).
    Comment: An individual commenter suggested that DHS should include
    in the rule a criterion for user growth, rather than revenue growth, as
    many start-ups focus more on growing their number of users in their
    early years.
    Response: DHS declines to include user growth as a stand-alone
    criterion for establishing eligibility for re-parole. DHS, however, may
    consider user growth as a factor when evaluating an entrepreneur's
    eligibility under the alternative criteria provision. The list of
    factors provided in the preamble to the proposed rule was intended only
    to illustrate the kinds of factors that DHS may consider as reliable
    and compelling evidence of the start-up entity's substantial potential
    for rapid growth and job creation.
    As noted in the NPRM, DHS is not defining in regulation the
    specific types of evidence that may be deemed ``reliable and
    compelling'' at this time, because DHS seeks to retain flexibility as
    to the kinds of supporting evidence that may warrant the Secretary's
    exercise of discretion in granting parole based on significant public
    benefit. DHS believes, however, that such evidence would need to be
    compelling to demonstrate that the entrepreneur's presence in the
    United States would provide a significant public benefit. DHS will
    evaluate on a case-by-case basis whether such evidence--in conjunction
    with the entity's substantial funding, revenue generation, or job
    creation--establishes that the applicant's presence in the United
    States will provide a significant public benefit during a re-parole
    period.
    Comment: An individual commenter suggested that the minimum annual
    revenue threshold for re-parole be set as just enough to sustain the
    entrepreneur's salary and continue business operations.
    Response: The final rule states that the start-up entity must be of
    a type that has the substantial potential to experience rapid growth
    and job creation, including through significant levels of capital
    investment, government awards or grants, revenue generation, or job
    creation during the re-parole period. These factors are intended to
    help DHS identify the types of start-up entities that are most likely
    to provide a significant public benefit, while excluding entities
    without such potential--such as a business with limited growth
    potential created by an entrepreneur for the sole or primary purpose of
    providing income to the entrepreneur and his or her family.\25\ Because
    this latter type of business is less likely to experience rapid growth

    [[Page 5259]]

    and job creation, DHS believes it is unlikely that the entrepreneur of
    such a business would be able to meet the significant public benefit
    requirement for a grant of parole. Establishing a minimum annual
    revenue threshold for re-parole that would, by definition, cover only
    an entrepreneur's salary and continue business operations would not
    likely help identify whether an entrepreneur's activity in the United
    States would provide a significant public benefit. DHS therefore
    declines to adopt the commenter's suggestion.
    ---------------------------------------------------------------------------

    \25\ Erik Hurst & Benjamin Wild Pugsley, ``What Do Small
    Businesses Do?'' (Aug. 2011), available at http://www.brookings.edu/
    ~/media/files/programs/es/bpea/2011_fall_bpea_papers/
    2011_fall_bpea_conference_hurst.pdf.
    ---------------------------------------------------------------------------

    c. Minimum Jobs Created
    Comment: Several commenters discussed the proposed re-parole
    criterion at 8 CFR 212.19(c)(2)(ii)(B)(2), which establishes an
    eligibility threshold for applicants whose start-up entities have
    created at least 10 qualified jobs within the start-up entities during
    the initial parole period. Most commenters argued that this job
    creation requirement was unduly high or that the time period for
    compliance was too short.
    Response: Based on comments received, DHS has lowered the job
    creation criterion for re-parole from 10 to 5 qualified jobs. See final
    8 CFR 212.19(c)(2)(ii)(B)(2). DHS agrees with commenters that requiring
    10 jobs to satisfy this criterion may be unduly high for many start-
    ups, even those with demonstrated substantial potential for rapid
    growth and job creation. DHS believes that the creation of 5 qualifying
    jobs during the initial period of parole is sufficient to determine
    that the start-up entity continues to have substantial potential for
    rapid growth and job creation, particularly in light of the substantial
    capital investment, government funding, or other reliable and
    compelling evidence that supported the initial parole determination. In
    each case, DHS must be persuaded that re-parole is justified by
    significant public benefit and that the person seeking re-parole merits
    a favorable exercise of discretion. As discussed elsewhere in this
    preamble, DHS has also extended the initial period of parole from 2
    years to 30 months, in order to allow additional time for start-up
    entities to grow, obtain additional substantial funding, generate
    substantial revenue, or create jobs. See 8 CFR 212.19(c)(2)(iii).
    d. Re-Parole Alternative Criteria
    Comment: One commenter suggested that DHS should consider taxes
    paid by a start-up entity as a criterion for re-parole, leaving the
    task to DHS to define the threshold of the amount and type of taxes
    paid.
    Response: DHS declines to adopt the commenter's suggestion. DHS
    believes that a start-up entity would have to generate a significant
    level of revenue or job creation (which are already criteria under this
    rule) to meet any separate, standalone tax-based threshold. Any such
    additional criterion would therefore be unlikely to be particularly
    probative in determining whether re-parole is justified by significant
    public benefit or the person seeking re-parole merits a favorable
    exercise of discretion. DHS therefore declines to include the payment
    of taxes as a stand-alone eligibility criterion.
    Comment: A commenter suggested that if DHS lowers the funding and
    job creation thresholds for re-parole, there should be no need for
    alternative criteria.
    Response: While DHS did reduce the job creation threshold for re-
    parole in the final rule, DHS believes that parolees should have the
    flexibility to present other reliable and compelling evidence of the
    start-up entity's substantial potential for rapid growth and job
    creation. Examples of such evidence are provided above, in the
    discussion on alternative criteria for the initial parole period. DHS
    believes that it is important to retain such flexibility in the final
    rule, consistent with the case-by-case nature of these parole
    determinations. DHS, therefore, has not adopted the commenter's
    suggestions.
    5. Authorized Periods of Parole
    Comment: Several commenters discussed the initial 2-year parole
    period at 8 CFR 212.19(d)(2). Most commenters argued that the 2-year
    period was unduly short, as start-ups with significant potential for
    rapid growth and job creation may require more time to meet re-parole
    eligibility requirements. Some commenters suggested having a 3-year
    initial period of parole and a 2-year period of re-parole. Other
    commenters suggested a range for initial parole from 3 to 5 years. A
    number of comments discussed the overall duration of the parole
    periods, the majority of which advocated for longer periods ranging
    from 6 to 10 years in total. Some of these commenters based the need
    for an extended parole period on the typical duration of the start-up
    growth path from seed funding to venture capital financing to exit
    (through an initial public offering or a merger or acquisition).
    Response: Based on the comments received, DHS is changing the
    maximum periods for initial parole and re-parole to 30 months (2.5
    years) each, for a total maximum parole period under this rule of up to
    5 years. The additional time for the initial parole period will provide
    entrepreneurs with more time to receive additional qualified
    investments or government funding, increase revenue, or create
    qualified jobs sufficient to meet the eligibility criteria for an
    additional period of parole. While this change does reduce the length
    of the re-parole period, DHS believes that this approach is necessary
    to provide additional time during the initial period of parole while
    maintaining the same maximum overall parole period of 5 years. DHS
    further believes that a 5-year total maximum parole period is
    consistent with the amount of time successful start-up entities
    generally require to realize rapid growth and job creation potential.
    Moreover, an entrepreneur of a start-up entity that is almost 5 years
    old when the parole application is filed would have the possibility to
    obtain up to 5 years of parole, which would allow the entity to realize
    its rapid growth and job creation potential by the time it is 10 years
    old--and to provide those benefits in the United States.\26\ DHS
    retains the discretion to provide any length of parole to an applicant,
    including a period shorter than 30 months where appropriate. DHS also
    notes that although USCIS would designate an appropriate initial parole
    period upon approval of the Application for Entrepreneur Parole, CBP
    would retain its authority to deny parole to an applicant or to modify
    the length of parole authorized by USCIS upon issuing parole at the
    port of entry, consistent with CBP's discretion with respect to any
    advance authorization of parole by USCIS.
    ---------------------------------------------------------------------------

    \26\ Estimates based on the Census Bureau Business Dynamics
    Statistics suggest that on average 55 percent of new firms survived
    after 3 years, but 80 percent of the firms that survived 3 years
    also made it through 5 years. Dane Stangler and Jared Konczal ``Give
    me your entrepreneurs, your innovators: Estimating the Employment
    Impact of a Startup Visa'', Ewing Marion Kauffman Foundation (Feb.
    2013), available at http://www.kauffman.org/~/media/kauffman_org/
    research%2Oreports%20and%20covers/2013/02/
    startup_visa_impact_final.pdf; ``CrunchBase Reveals: The Average
    Successful Startup Raises $41M, Exits at $242.9M,'' Techcrunch.com
    (Dec. 14, 2013), available at http://techcrunch.com/2013/12/14/cru...ts-at-242-9m/; see also TruBridge Capitol Partners, Why the `Next
    Billion Dollar Startup' Is not Always the Next IPO, Forbes, Apr. 15,
    2015, available at http://www.forbes.com/sites/truebrid...ways-next-ipo/ (``From
    2001-2004, the average age of a company at its public exit was 5.4
    years. . . . From 2009-2012, the average age was 7.9.'').

    ---------------------------------------------------------------------------

    [[Page 5260]]

    6. Limitation on Number of Entrepreneurs
    Comment: Several commenters addressed 8 CFR 212.19(f) in the
    proposed rule, which states that no more than three entrepreneurs may
    be granted parole based on the same start-up entity. Most commenters on
    this provision recommended that DHS increase the number of
    entrepreneurs, with suggestions to increase the maximum number to 4 or
    5. Several other commenters, including a trade association and a
    professional association, supported the proposed rule's limit of 3
    entrepreneurs obtaining parole under this rule based on the same start-
    up entity. An individual commenter stated that DHS should allow for
    additional entrepreneurs to qualify for parole based on the same start-
    up entity, not only at the time of application but also at a later
    date, asserting that it is very common for technology companies to
    introduce multiple co-owners over time that are key personnel vital to
    the operations of the start-up entity.
    Response: DHS appreciates the comments regarding this limitation
    and recognizes that some start-ups may initially have more than 3
    founders or owners. After reviewing all comments, DHS declines to
    increase the number of entrepreneurs permitted to request parole
    related to the same start-up entity, and will retain the current limit
    of no more than 3 eligible entrepreneur applicants per start-up entity.
    See final 8 CFR 212.19(f). As an initial matter, DHS believes it would
    be difficult for a larger number of entrepreneurs associated with the
    same start-up entity to each meet the eligibility criteria and comply
    with the conditions on parole while ultimately developing a successful
    business in the United States. A higher number of entrepreneurs
    associated with the same start-up entity may affect the start-up's
    ability to grow and succeed, and may even result in the startup's
    failure, thus preventing the goals of the parole process under this
    rule from being realized.\27\ Imposing a limit on the number of
    entrepreneurs who may be granted parole based on the same start-up
    entity is thus consistent with ensuring that each entrepreneur's parole
    will provide a significant public benefit.
    ---------------------------------------------------------------------------

    \27\ Max Marmer, Bjoern Lasse Herrmann, Ertan Dogrultan, Ron
    Berman, Startup Genome Report Extra on Premature Scaling, Startup
    Genome Report: Premature scaling v 1.2 (Mar. 2012 ed.) (explaining
    that ``hiring too many people too early'' in a start-up's
    development is one of several reasons that most start-ups fail),
    available at https://s3.amazonaws.com/startupcompass-public/StartupGenomeReport2_Why_Startups_Fail_v2.pdf.
    ---------------------------------------------------------------------------

    The limitation, moreover, will help strengthen the integrity of the
    international entrepreneur parole process in various ways. Among other
    things, limiting the number of individuals who may be granted parole
    under this rule in connection with the same start-up entity will
    provide an additional safeguard against an entity being used as a means
    to fraudulently allow individuals to come to the United States. Such a
    limit diminishes, for example, the incentive to dilute equity in the
    start-up entity as a means to apply for parole for individuals who are
    not bona fide entrepreneurs. Finally, DHS clarifies that the rule does
    not require that additional entrepreneurs, up to 3 entrepreneurs per
    start-up entity, apply for parole based on the same start-up entity at
    the same time.
    7. Income-Related Conditions on Parole
    Comment: Several commenters discussed the proposed rule's provision
    requiring that entrepreneurs paroled into the United States must
    maintain a household income that is greater than 400 percent of the
    Federal poverty line for their household size, as defined by the
    Department of Health and Human Services. Many of these commenters
    discussed the financial difficulties faced by start-ups and argued that
    the income requirements were unduly high or suggested other
    alternatives. The majority of commenters on this issue stated that
    entrepreneurs in start-up endeavors typically do not take a salary or
    take a minimal salary in the early years. Several commenters
    recommended lowering this income threshold, with many suggesting
    lowering it to 100 percent, while others suggested alternatives of 125
    percent, 200 percent, or 250 percent of the Federal poverty level. An
    individual commenter recommended that DHS institute a minimum yearly
    income requirement of $80,000, while another individual commenter
    stated that DHS should adopt a more nuanced approach that takes into
    account factors like standard of living, unemployment rates, and
    economic growth by state. Other commenters recommended that DHS allow
    for other types of compensation, in the form of benefits or rewards, in
    addition to salary to satisfy the income-related conditions on parole.
    Another individual commenter stated that DHS should use the income
    threshold already established by the Affidavit of Support,\28\ which is
    set at 125 percent above the poverty guidelines. Lastly, one commenter
    said the ``significant public benefit'' determination should not just
    be applied to entrepreneurs who meet a particular income or wealth
    criterion, but should be liberally applied to all entrepreneurs who are
    seeking to build and grow a business.
    ---------------------------------------------------------------------------

    \28\ Affidavits of Support, filed using Form I-134 or I-864, are
    required for certain immigrants to show that they have adequate
    means of financial support and are not likely to rely on the U.S.
    government for financial support.
    ---------------------------------------------------------------------------

    Response: DHS appreciates the concerns raised by these commenters,
    but declines to adopt the commenter's suggestion to eliminate or alter
    the income-related condition on parole. Establishing this income-
    related condition on parole is consistent with the Secretary's
    discretionary authority to grant parole ``under conditions as he may
    prescribe.'' INA section 212(d)(5)(A), 8 U.S.C. 1182(d)(5)(A). As
    stated in the NPRM, DHS established this income threshold to ensure
    that applicants seeking parole under this rule will have sufficient
    personal economic stability to make significant economic and related
    contributions to the United States. Those policy goals remain valid and
    are appropriate in guiding the decision to retain the requirement that
    the household income of an entrepreneur requesting parole under this
    rule be greater than 400 percent of the Federal poverty line.
    Under this rule, DHS will take steps to ensure that each grant of
    parole will provide a positive net benefit to the economy of the United
    States, consistent with the statutory framework authorizing parole only
    for significant public benefit absent urgent humanitarian issues. In
    addition to considering all the other positive evidence--from job
    creation to investment to growth--DHS includes the income threshold as
    an additional safeguard that the entrepreneur and his or her family
    will not be eligible to draw upon Federal public benefits or premium
    tax credits under the Health Insurance Marketplace of the Affordable
    Care Act. Furthermore, Secretary Johnson indicated in his memorandum
    titled ``Policies Supporting U.S. High-Skilled Business and Workers''
    that such thresholds would be created so that individuals would not be
    eligible for these public benefits or premium tax credits in light of
    the purpose of the policy.\29\
    ---------------------------------------------------------------------------

    \29\ Memorandum from Jeh Johnson, DHS Secretary, Policies
    Supporting U.S. High-Skilled Business and Workers 4 (Nov. 20, 2014),
    at https://www.dhs.gov/sites/default/files/publications/14_1120_memo_business_actions.pdf.
    ---------------------------------------------------------------------------

    DHS emphasizes that the funding amounts received by a start-up
    entity from governmental sources or from

    [[Page 5261]]

    qualified investors in order to meet the rule's eligibility thresholds
    are distinct from the possible sources of salary payments to the
    individual entrepreneur. Nothing in this rule prevents a start-up
    entity from raising higher funding levels than the minimum parole
    eligibility thresholds, and from a wider set of funders than those in
    the rule's definitions of qualified investors and government entities.
    DHS intends for the eligibility criteria for parole to be useful
    independent validation tools for assessing the significant growth and
    job creation potential of the start-up entity. While there is certainly
    validity to the arguments made by some of the commenters that many
    entrepreneurs do not take large salaries, choosing instead to re-invest
    available funds back into the start-up entity or to take other forms of
    non-cash compensation, DHS must establish criteria that protect the
    overall policy goals of this rule in accordance with the requirements
    of the INA. The income-related requirements offer a clear and
    predictable mechanism for DHS to have a strong measure of confidence
    that the entrepreneur and his or her family, while paroled into the
    United States under this rule, will be net positive contributors to the
    American economy.
    8. Reporting of Material Changes
    Comment: Several commenters discussed the proposed requirement that
    entrepreneurs report any material changes during a parole period to DHS
    by submitting a new application for parole. Most commenters argued that
    such a requirement would be onerous given the constantly changing
    nature of start-ups. A law firm argued that requiring entrepreneurs to
    report and reapply when there are pending actions against the start-up
    entity or entrepreneur would be unfair, as both are entitled to due
    process, and suggested a reporting requirement only if an adverse
    judgment were issued. An individual commenter stressed that a $1,200
    fee to report every material change would create a major financial
    burden for entrepreneurs.
    Response: DHS recognizes that the nature of start-up entities
    involves constant change. DHS also appreciates the concerns regarding
    the administrative and financial burden placed on entrepreneurs by
    additional filings. DHS believes, however, that the revised definition
    of material change in the final rule will help to clarify the
    situations in which the entrepreneur must notify the agency of material
    changes, and thus limit the administrative and financial burdens on the
    entrepreneur. Specifically, DHS understands that start-ups may have
    frequent ownership changes over the course of successive funding
    rounds, and thus has revised the definition of ``material change''
    regarding ownership changes to cover only those that are
    ``significant'' in nature. Clarifying the scope of the material change
    definition also limits the reporting requirement, which should help
    reduce the anticipated burden on entrepreneurs. DHS also emphasizes
    that the rule requires notification of pending actions only in the
    context of a criminal case or other action brought by a government
    entity, while actions brought by private individuals or entities are
    not considered ``material changes'' until a settlement, judgment, or
    other final determination is reached. DHS does not believe that the
    material change reporting requirement under this rule will impact an
    individual's due process or would otherwise be unfair. DHS believes,
    however, that it is important for an entrepreneur granted parole under
    this rule to immediately inform USCIS if certain actions are brought
    against the entrepreneur or his or her start-up entity.
    Comment: One commenter recommended that the process of addressing
    material changes would be improved if DHS were to implement a policy
    similar to the ``deference'' policy it applies in the EB-5 investor
    program. Such a policy provides that DHS will defer to prior
    determinations regarding certain documentary evidence used to
    establishing program eligibility requirements absent fraud,
    misrepresentation, a mistake of law or fact, or a material change.
    Response: As discussed above, DHS decided to narrow and clarify the
    definition of ``material change'' in order to address commenters'
    concerns about reporting burdens. In the absence of specific
    suggestions, DHS could not ascertain from this comment what aspect of
    the EB-5 deference policy could be applied under this rule. DHS
    believes it is important for this rule to provide mechanisms, including
    the requirement to report material changes, to ensure that parole
    continues to be justified by significant public benefit in each
    particular case.
    Comment: A joint submission from a professional association and a
    non-profit organization stated that, where a material change filing is
    mandated by the rule, the entrepreneur should only be required to file
    an update with USCIS, instead of being required to re-file an entire
    parole or re-parole application.
    Response: As explained above, while DHS appreciates that a new
    filing may appear burdensome to the entrepreneur, DHS believes that a
    new filing is necessary in order to re-evaluate the entrepreneur's
    eligibility when such material changes occur. Material changes, by
    their definition, may affect the entrepreneur's ability to demonstrate
    that the start-up entity has potential for rapid growth and job
    creation, and whether the entrepreneur will continue to provide a
    significant public benefit to the United States. Therefore, at present,
    the entrepreneur must file a new application to allow DHS the
    opportunity to determine the entrepreneur's continued eligibility for
    parole. Given that this is a new and complex process, DHS has decided
    to take an incremental approach and will consider potential
    modifications in the future after it has assessed the implementation of
    the rule and its impact on operational resources.
    9. Other Comments on Parole Criteria and Conditions
    Comment: Several comments expressed concern that the rule did not
    require that the entrepreneur receive prevailing wages for their work,
    with some commenters expressing concern that the only wage requirements
    relate to the Federal Poverty Level.
    Response: DHS appreciates commenters' concerns regarding prevailing
    wages. Unlike some employment-based visa classifications, however, the
    intention of this parole process is not to address labor shortages in
    the United States. Rather, it is to encourage international
    entrepreneurs to create and develop start-up entities with high growth
    potential in the United States. DHS believes that requiring the parolee
    to maintain a household income of greater than 400 percent of the
    Federal Poverty Level adequately ensures that he or she will have
    sufficient personal economic stability to provide a significant public
    benefit to the United States through entrepreneurial activities.
    Comment: One commenter recommended that DHS should not require an
    applicant's start-up entity to receive investment prior to the initial
    application for parole; that DHS should recognize cash infusions during
    the growth period of a start-up entity as eligibility criteria for re-
    parole; and that at the end of the initial parole period, if the
    venture is deemed successful, no additional funding milestones should
    be required for re-parole eligibility.
    Response: DHS appreciates the comment but declines to revise the
    rule as suggested. DHS believes that the alternative criteria provided
    in this rule to determine if the start-up entity has

    [[Page 5262]]

    substantial potential for rapid growth and job creation provide
    sufficient flexibility for those entrepreneurs who may have received
    amounts of qualified investments or government funding that are less
    than those required to satisfy the general criteria for parole
    consideration under this rule. The determination that the entity has
    substantial potential for rapid growth and job creation will be made
    based on the evidence in the record at the time the parole application
    is adjudicated, rather than the possibility that the entity may receive
    cash infusions at some point in the future. If cash infusions from
    various sources are received by the start-up entity during the period
    of initial parole, evidence of such cash infusions may be taken into
    consideration if the entrepreneur applies for re-parole. DHS, however,
    does not believe that cash infusions into the start-up entity during
    the initial parole period will independently suffice to establish that
    the entity continues to have the significant potential for rapid growth
    and job creation. Infusions of cash, as a general matter, do not have
    the same validating qualities as do evidence of additional investment
    from qualifying investors, grants or awards from qualifying government
    entities, significant revenue growth, or job creation.
    Comment: One commenter asserted that entrepreneurs who have left
    their start-up entity should not have their parole status immediately
    revoked. The commenter suggested that DHS issue guidance and options
    for entrepreneurs who leave their start-up entity but have contributed
    to the significant public benefit of the United States. A similar
    comment recommended that individuals be able to remain in the United
    States under parole and qualify for re-parole if a second start-up
    meets the requirements of the rule. Another related comment argued that
    entrepreneurs whose start-up entities fail should be given a second
    chance, in order to account for the dynamism and uncertainty inherent
    in new businesses.
    Response: DHS appreciates the comments but declines to adopt the
    commenters' suggestions. As a matter of statutory authority, once, in
    the opinion of DHS, the purpose of parole has been served, parole
    should be terminated. See INA section 212(d)(5)(A), 8 U.S.C.
    1182(d)(5)(A). DHS emphasizes that the purpose of granting parole under
    this rule is to allow an entrepreneur to grow a start-up entity in the
    United States with substantial potential for rapid growth and job
    creation, by working in an active and central role for the entity.
    Accordingly, DHS will not continue parole for entrepreneurs who are no
    longer actively working in a central role with the start-up entity that
    served as the basis for the initial parole application. The
    individual's activity through a new start-up entity, however, could
    serve as a basis for a new grant of parole if all requirements for such
    parole are met.
    Comment: One commenter suggested that DHS should utilize the same
    methodology for granting parole for entrepreneurs as defined in a
    proposed nonimmigrant visa classification in a Senate bill, S. 744, 113
    Cong. section 4801(2013).
    Response: DHS appreciates the comment but declines to adopt the
    commenter's suggestion. Under this rule, DHS has identified a process
    for implementing the Secretary's existing statutory authority to grant
    parole consistent with section 212(d)(5) of the INA. DHS does not
    believe it is advisable to import in this rule the standards from
    unenacted legislation focused on nonimmigrant visas rather than
    discretionary grants of parole.

    G. Employment Authorization

    1. Automatic Employment Authorization Upon Parole
    Comment: One commenter suggested that if employment authorization
    were deemed incident to parole, rather than through a follow-up
    application, then the regulations governing employment verification
    would need to be amended to permit employment by the parolee and spouse
    without an EAD.
    Response: DHS agrees that the employment verification provisions of
    the regulations should be appropriately revised. In this final rule,
    and as proposed, DHS is revising the employment eligibility
    verification regulations by expanding the foreign passport and Form I-
    94 document combination described at 8 CFR 274a.2(b)(1)(v)(A)(5) to
    include Forms I-94A containing an endorsement that an individual is
    authorized to work incident to parole. This document combination was
    previously acceptable only for certain nonimmigrants authorized to work
    for a specific employer incident to status pursuant to 8 CFR
    274a.12(b), which the final rule amends to include those paroled into
    the United States as entrepreneurs under this rule. See final 8 CFR
    274a.12(b)(37).
    However, in this final rule, and as proposed, only the entrepreneur
    parolee is accorded employment authorization incident to his or her
    parole. See final 8 CFR 274a.12(b). Given the basis for parole, it is
    essential to limit any delays in the entrepreneur's own employment
    authorization. Such delays could create difficulties for the
    entrepreneur's operation of the start-up entity, as he or she would be
    prohibited from working until work authorization was approved, and
    would frustrate the very purpose for paroling the entrepreneur into the
    United States. As an entrepreneur's spouse would not be coming for the
    same kind of specific employment purpose, DHS does not believe there is
    a similar need to provide him or her work authorization incident to
    parole. Instead, this rule adds a new provision making the spouse of an
    entrepreneur parolee eligible to seek employment authorization. See
    final 8 CFR 274a.12(c)(34). Based on this provision and 8 CFR
    274a.13(a), an entrepreneur's spouse seeking employment authorization
    under this rule would need to file an Application for Employment
    Authorization (Form I-765) with USCIS in accordance with the relevant
    form instructions.
    Comment: One commenter expressed concern that the proposed
    employment authorization provision is too narrow in scope. The
    commenter stated that DHS should clarify that employment with an entity
    that is under common control as the start-up entity, such as a
    subsidiary or affiliate, would be permissible.
    Response: Under the final rule, the entrepreneur parolee's
    employment authorization is limited to the specific start-up entity
    listed on the Application for Entrepreneur Parole, Form I-941. This
    limitation helps ensure that the entrepreneur's work is consistent with
    the purposes for which parole was granted, especially since parole
    applications will be evaluated based in part on the activities and
    performance of that particular start-up entity. DHS appreciates that
    there are certain circumstances in which some flexibility could further
    the purpose of encouraging entrepreneurship, innovation, economic
    growth, and job creation in the United States. Given that this is a new
    process however, DHS has decided to take an incremental approach and
    will consider potential modifications in the future after assessing the
    implementation of the rule.
    Comment: One commenter stated that difficulties obtaining a work
    visa have caused many entrepreneurs to move out of the United States.
    Response: DHS agrees with the commenter's statement. While this
    rule does not address all of the difficulties that entrepreneurs may
    face, or make legislative changes that only Congress can make, DHS
    believes it will encourage international entrepreneurs

    [[Page 5263]]

    to develop and grow their start-up entities--and provide the benefits
    of such growth--in the United States. Entrepreneurs paroled into the
    United States under this rule will be authorized to work for the start-
    up entity for the duration of the parole (and any re-parole) period.
    2. Spousal Employment
    Comment: Several commenters, including a business incubator,
    asserted that spouses should be granted employment authorization and
    argued that spouse employment authorization will entice more
    entrepreneurs to come to the United States. Several other commenters
    stated that, in order to attract the best entrepreneurial talent,
    spouses of entrepreneur parolees should automatically receive work
    authorization incident to status without the need to apply separately.
    Response: DHS agrees with commenters that extending employment
    authorization to spouses of entrepreneur parolees is important to help
    attract entrepreneurs to establish and grow start-up entities in the
    United States. For reasons provided above, however, DHS disagrees that
    these spouses must be provided with employment authorization incident
    to their parole. Instead, these spouses may seek employment
    authorization under 8 CFR 274a.12(c)(34).
    Comment: A few commenters stated opposition to permitting
    employment authorization for the spouses of international
    entrepreneurs.
    Response: DHS disagrees with the commenters' opposition to allowing
    an entrepreneur's spouse to apply for employment authorization.
    Permitting spouses to seek employment authorization is an important
    aspect of the rule's intent to attract international entrepreneurs who
    may provide a significant public benefit by growing their start-up
    entities in the United States.
    Comment: One commenter objected to spousal employment authorization
    unless it is restricted to the same new high-potential start-up entity
    that served as the basis for the parole.
    Response: DHS disagrees with the suggestion that spousal employment
    should be authorized only for employment with the start-up entity that
    served as the basis of parole for the entrepreneur. Nothing in this
    rule prevents people married to each other from applying for parole
    associated with the same start-up entity. But DHS believes that it is
    not appropriate or necessary to limit the employment of an
    entrepreneur's spouse to that entity. Making those spouses eligible to
    seek employment from a broader range of employers can further the
    central purpose of the rulemaking--encouraging international
    entrepreneurs to develop and grow their start-up entities within the
    United States and provide the benefits of such growth to the United
    States. It may also encourage entrepreneurs to create more jobs outside
    the family through the start-up entity, furthering the benefits
    provided to others in the United States. DHS therefore declines to
    revise the rule as suggested.

    H. Comments on the Parole Process

    1. Ability of Individuals To Qualify for Parole Under This Rule
    Comment: Two individual commenters asked what kind of immigration
    status or visa an international entrepreneur should maintain in order
    to be eligible to apply for parole under this rule. The commenters
    expressed concern about the types of activities that would need to be
    conducted in the United States prior to a parole application in order
    to establish a business, obtain funds from investors, and otherwise
    qualify for the parole under this rule. These commenters also expressed
    concern about requiring prior investment as a condition for parole, and
    that investors would be hesitant to make such an investment in a start-
    up entity if the entrepreneur lacked an immigrant or nonimmigrant visa.
    A professional association stated that, since parole does not
    constitute formal admission to the United States, it will likely be
    very difficult for international entrepreneurs without formal
    immigration status to enter into long-term contracts, raise significant
    investment capital, and employ people.
    Response: This final rule aims to encourage international
    entrepreneurs to create and develop start-up entities with high growth
    potential in the United States, which are in turn expected to
    facilitate research and development in the country, create jobs for
    U.S. workers, and otherwise benefit the U.S. economy. Under this final
    rule, an international entrepreneur may request parole in accordance
    with the form instructions. The final rule provides that individuals
    seeking initial parole under this program must present themselves at a
    U.S. port of entry to be paroled into the United States; there is no
    requirement that an international entrepreneur currently be in the
    United States or maintain any prior immigration status. DHS notes,
    however, that under the statute governing parole authority, individuals
    who have already been admitted to the United States are ineligible to
    be considered for parole inside the United States because only
    applicants for admission are eligible to be considered for parole. See
    INA section 212(d)(5)(A), 8 U.S.C. 1182(d)(5)(A); see also INA section
    235(a)(1), 8 U.S.C. 1225(a)(1) (describing ``applicants for
    admission''). Individuals who have been admitted in a nonimmigrant
    classification, and are currently in the United States pursuant to that
    admission, may not be paroled, even if they have overstayed their
    admission, unless they first depart the United States.
    DHS appreciates that international entrepreneurs may face many
    challenges in starting and growing a business in the United States,
    including attracting investment capital or government grants or awards.
    DHS disagrees with the premise, however, that qualifying investors will
    be very reluctant to make a qualifying investment in a start-up entity
    that is wholly or partially owned by an individual that will be seeking
    a grant of parole under this rule. DHS believes that there are a myriad
    of factors that go into a decision to invest significant funds in a
    start-up entity. While the underlying immigration status, or lack
    thereof, of the start-up entity's owner(s) may be a factor presenting a
    degree of additional risk, DHS believes that this rule will effectively
    mitigate some of that risk by providing a known framework under which
    certain significant public benefit parole requests will be reviewed and
    adjudicated. This final rule provides investors and entrepreneurs with
    greater transparency into the evaluation process and manner in which
    such requests will be reviewed, so that those individuals and entities
    can weigh the various risks and benefits that might apply to the
    particular investment decision being considered. Given that this is a
    new and complex process, DHS has decided to take an incremental
    approach and will consider potential modifications in the future after
    assessing the implementation of the rule.
    2. Waiver for Entrepreneurs Presently Failing To Maintain Status
    Comment: An individual commenter stated that international
    entrepreneurs already in the United States should be able to receive a
    waiver in order to establish eligibility for parole under this rule if
    they do not have a valid prior immigration status. Another commenter
    suggested that immigration status violations, such as unauthorized
    employment, should not be grounds for denying parole under this rule
    and, if parole is granted, any prior

    [[Page 5264]]

    unauthorized employment that was used to meet the requirements for
    parole should be disregarded for purposes of any future immigration
    applications.
    Response: As discussed above, eligibility for parole under INA
    section 212(d)(5), 8 U.S.C. 1182(d)(5), is not wholly dependent upon an
    individual's current immigration status. Unauthorized employment or a
    prior status violation will not necessarily preclude an individual from
    qualifying for parole under this rule. However, the fact that an
    entrepreneur has worked without authorization, is out of status, or not
    legally present in the United States would be considered in determining
    whether DHS should grant parole under its discretionary authority. All
    requests for a discretionary grant of parole are adjudicated on a case-
    by-case basis and ultimately determined by evaluating all positive and
    negative factors.
    DHS will not adopt the commenter's suggestion to disregard, for
    purposes of any future immigration applications, any prior unauthorized
    employment that was used to meet the requirements for parole. DHS
    believes that such a provision would require a statutory change, as
    eligibility for certain benefits is barred by statute if the applicant
    previously worked without authorization.\30\
    ---------------------------------------------------------------------------

    \30\ See, e.g., INA section 245(c), 8 U.S.C. 1255(c).
    ---------------------------------------------------------------------------

    3. Relationship Between Parole and Various Nonimmigrant Visa
    Classifications
    a. Pathway for Current Nonimmigrants To Use Entrepreneur Parole
    Comment: Some commenters expressed concern that it would be
    challenging for foreign students, recent graduates of U.S.
    universities, and other nonimmigrants presently in the United States to
    meet this rule's requirements for parole consideration under the
    constraints of their current visas. These commenters said that the rule
    should allow these individuals a realistic and clear pathway to easily
    utilize parole, and should clarify that potential applicants currently
    in the United States in nonimmigrant status will not be violating their
    existing visa status when taking the necessary steps to establish
    eligibility for significant public benefit parole. One commenter
    requested that students in F-1 nonimmigrant status and eligible to work
    on Curricular Practical Training (CPT) or Optional Practical Training
    (OPT) should become eligible for parole under the rule if they founded
    a start-up and raised $100,000 in capital.
    Response: DHS appreciates that some entrepreneurs who are present
    in the United States and who might otherwise qualify for parole under
    this program may be unable to engage in certain activities given the
    limitations placed on their nonimmigrant status, making it difficult,
    for example, for them to raise significant capital for a start-up
    entity. DHS, however, disagrees with the commenters' assertion that
    individuals present in the United States in F-1 nonimmigrant status
    will be unable to meet the requirements for parole under this program,
    such as starting a business and raising significant investment, without
    violating their F-1 nonimmigrant status. For example, an individual in
    F-1 status who has obtained OPT employment authorization may start and
    work for his or her own business in the United States. The OPT
    employment, and thus the business, must relate to the F-1
    nonimmigrant's program of study and can occur either before (pre-
    completion OPT) or after the completion of a program of study (post-
    completion OPT).\31\ Additional requirements apply to F-1 nonimmigrants
    who are otherwise eligible for a STEM OPT extension, such as
    establishing that their STEM OPT employer will have a valid employer-
    employee relationship with the F-1 OPT nonimmigrant, but those
    additional requirements do not pertain to the initial 12-month OPT
    period, and in any event do not present an absolute bar against
    entrepreneurial activities. DHS believes that it is certainly realistic
    that an F-1 nonimmigrant in the United States can start a business
    during his or her OPT period, and during that time can take steps to
    obtain significant investment in the start-up entity, which the
    individual may then rely upon if applying for parole under this rule.
    DHS declines to adopt the commenters' suggestion to include in this
    rule a blanket provision stating that potential applicants currently in
    the United States in nonimmigrant status will not be violating their
    existing status when taking steps to establish eligibility for parole.
    Such changes would pertain to the statutory and regulatory limitations
    placed on various nonimmigrant classifications and are outside the
    scope of this rule.
    ---------------------------------------------------------------------------

    \31\ https://studyinthestates.dhs.gov/training-opportunities-in-the-united-states.
    ---------------------------------------------------------------------------

    DHS believes that this final rule provides a realistic and clear
    option for certain entrepreneurs to actively grow their qualifying
    start-up entity in the United States. As discussed below, parole is not
    a nonimmigrant status, and individuals present in the United States in
    a nonimmigrant status will not be able to change status or otherwise be
    granted parole without first departing the United States and appearing
    at a U.S. port of entry for inspection and parole. Under this final
    rule, however, an individual present in the United States in a
    nonimmigrant status may apply for and obtain an approval of the
    Application for Entrepreneur Parole (Form I-941). Filing and obtaining
    approval of a Form I-941 application under this rule will not, by
    itself, constitute a violation of the individual's nonimmigrant status.
    After approval of the Form I-941 application, if the individual decides
    to rely upon parole to actively grow his or her business in the United
    States, the individual will need to appear at a U.S. port of entry for
    a final parole determination to allow him or her to come into the
    United States as a parolee.
    This final rule already provides appropriate criteria under which
    all applications will be reviewed, including those submitted by any F-1
    nonimmigrants. As indicated in this final rule, one basis on which an
    individual may be considered for parole under this rule is if he or she
    has raised at least $250,000 in investment capital from a qualifying
    investor (and meets certain other criteria). Individuals who raise a
    substantial amount of capital from a qualifying investor, but less than
    $250,000, may still qualify for and be granted parole under other
    criteria identified in the rule--including the receipt of a qualifying
    government grant or award or other reliable and compelling evidence of
    the start-up entity's substantial potential for rapid growth and job
    creation.
    b. Switching Between Nonimmigrant Status and Parole
    Comment: Several commenters raised questions or provided
    suggestions regarding switching from a nonimmigrant status to parole,
    or from parole to a nonimmigrant status. Specifically, one commenter
    asked what her status would be if she were in the United States as an
    H-4 nonimmigrant, authorized to work pursuant to an EAD, but
    nevertheless pursued parole under this rule. Another commenter
    suggested that DHS should include a provision in this rule that
    expressly allows someone to switch from nonimmigrant status to parole,
    and from parole to nonimmigrant status, similar to DHS's policy to
    terminate and restore the H-1B or L-1 status of certain individuals who
    have temporarily departed the United States but came back using an
    advance parole document that was

    [[Page 5265]]

    issued based on a pending Form I-485 application for adjustment of
    status.
    Response: DHS declines to adopt a provision in this rule allowing
    individuals to change between nonimmigrant status and parole while in
    the United States. An individual who is present in the United States as
    a nonimmigrant based on an inspection and admission is not eligible for
    parole without first departing the United States and appearing at a
    U.S. port of entry to be paroled into United States. See INA section
    212(d)(5)(A), 8 U.S.C. 1182(d)(5)(A). Moreover, an individual who has
    been paroled into the United States cannot change to nonimmigrant
    status without leaving the United States, as INA section 248, 8 U.S.C.
    1258, only permits individuals who are maintaining nonimmigrant status
    to change to another nonimmigrant status. If an individual who has been
    paroled into the United States under this rule has a petition for
    nonimmigrant classification approved on his or her behalf, he or she
    would have to leave the United States and pursue consular processing of
    a nonimmigrant visa application before seeking to return to the United
    States.
    c. Entrepreneur Pathways and Entrepreneur Parole
    Comment: One commenter stated that the international entrepreneur
    parole rule should complement and not supplant prior USCIS policy
    pertaining to entrepreneurs, including those reflected on the USCIS
    Entrepreneur Pathways Web site.\32\ The commenter, while expressing
    concerns with aspects of existing policies pertaining to entrepreneurs
    and this rule, suggested that if an entrepreneur cannot qualify for
    parole under this rule, USCIS should encourage the entrepreneur to seek
    a visa associated with his or her start-up entity under the existing
    immigrant or nonimmigrant visa system. Specifically, the commenter
    suggested that the final rule should expressly include an amendment to
    the H-1B regulations to allow approval of an H-1B petition under the
    policies articulated on the Entrepreneur Pathways Web site, and that
    USCIS adjudicators should see an express statement in the final rule
    that, notwithstanding the existence of this rule, the H-1B visa remains
    available for working owners of start-up entities. The commenter noted
    that the USCIS Entrepreneur Pathways Web site also provides guidance
    for entrepreneurs to use other existing nonimmigrant visa
    classifications (e.g., L-1, O, and E visas) that could be more
    advantageous to the entrepreneur than the parole rule, so adjudicators
    should continue to approve petitions in that spirit. The commenter
    asserted that the unique requirements under the parole rule, such as a
    threshold investment amount, should not be allowed to ``bleed into and
    taint'' the adjudicatory process for securing employment-based visas
    traditionally used by entrepreneurs.
    ---------------------------------------------------------------------------

    \32\ See https://www.uscis.gov/eir.
    ---------------------------------------------------------------------------

    Response: DHS appreciates the commenter's suggestions, but the
    suggested changes to the H-1B regulations are outside the scope of this
    rulemaking. DHS agrees with the commenter that parole under this
    program is intended to complement, and not supplant, other options that
    may already exist for entrepreneurs under other immigrant and
    nonimmigrant visa classifications. This rule does not alter existing
    rules or policies regarding the ability of entrepreneurs to qualify for
    any immigrant or nonimmigrant status. This rule does, however, provide
    an additional avenue for entrepreneurs to consider when exploring
    options that may be available to them to grow a start-up entity in the
    United States.
    4. Travel Document Issuance
    Comment: A commenter urged DHS to grant multiple-entry parole to
    foreign nationals so that they may travel internationally and return to
    the United States, as this is not explicit in the regulation. The
    commenter stated that this ability is essential to ensure that
    entrepreneurs can raise additional funds and market innovations
    worldwide. In addition, this commenter stated that some foreign
    nationals may begin their businesses and seek entrepreneur parole while
    in nonimmigrant status in the United States, such as in F-1 or H-1B
    nonimmigrant status (and thus seek to depart the United States with
    advance parole and then request parole from CBP upon their return to a
    U.S. port of entry). The commenter suggested that the regulation
    clarify how these foreign nationals will be able to return to the
    United States.
    Response: DHS notes that individuals who have been admitted to the
    United States, such as those in nonimmigrant status, are not eligible
    to be granted parole unless they first depart the United States. DHS
    clarifies that any immigration status violations by any applicant for
    parole, including those related to their entrepreneurial efforts, will
    be taken into account as negative factors in the case-by-case
    determination of whether the applicant merits an exercise of discretion
    to grant parole, though they will not necessarily prohibit the
    individual from obtaining a grant of parole under this rule.
    DHS recognizes that international travel can be essential for the
    success of some start-up entities. Under existing law, an individual's
    authorized period of parole ends each time he or she departs the United
    States. See 8 CFR 212.5(e)(1)(i). DHS may, however, authorize advance
    parole before departure and can specify that such authorization is
    valid for multiple uses. An entrepreneur granted advance parole would
    be able to leave the country, present himself or herself at a port of
    entry upon return, and request a subsequent grant of parole for the
    remaining period of his or her initially granted parole period. At such
    time, DHS must then inspect the individual and determine whether or not
    to grant parole into the United States.\33\ If the individual is
    granted parole, he or she may only be paroled for up to the time
    initially granted. Any time spent outside the United States after the
    parole period is initiated will count against the total period of
    parole, so that the total time period of the parole period remains
    consistent with the date of initial parole granted by CBP.
    ---------------------------------------------------------------------------

    \33\ This process is not appropriately described as ``multiple-
    entry parole.'' Parole does not constitute an admission to the
    United States, INA sections 101(a)(13)(B), 212(d)(5)(A), 8 U.S.C.
    1101(a)(13)(B), 1182(d)(5)(A); and parole terminates upon the
    individual's departure from the United States, 8 CFR 212.5(e)(1)(i).
    ---------------------------------------------------------------------------

    5. Parole in Place
    Comment: Several commenters requested that DHS allow parole-in-
    place under this rule. Some of these commenters stated that parole-in-
    place should be added so that individuals already in the United States
    in a nonimmigrant status, such as H-1B or F-1 nonimmigrant status, can
    apply for and be granted parole under this rule without having to
    depart the United States. Several other commenters noted that DHS has
    the jurisdiction to allow parole-in-place for spouses or dependents, as
    they do for military family members, and that this could be applied to
    the International Entrepreneur Rule. Some commenters argued that the
    requirement to be out of the country to apply for parole under this
    rule puts an unnecessary financial burden on applicants who are already
    residing in the United States.
    Response: DHS appreciates, but declines to adopt, the commenters'
    suggestions that parole-in-place be allowed under this rule for
    individuals already in the United States in H-1B or F-1 nonimmigrant
    status. Only applicants for admission are eligible to

    [[Page 5266]]

    be considered for parole, thus precluding individuals who have already
    been admitted from being considered for parole inside the United
    States. See INA section 212(d)(5)(A), 8 U.S.C. 1182(d)(5)(A); see also
    INA section 235(a)(1), 8 U.S.C. 1225(a)(1) (describing ``applicants for
    admission''). Such individuals are not eligible for parole, regardless
    of whether they have overstayed their admission, unless they first
    depart the United States.
    6. Comments on Options After 5-Year Total Parole Period Ends
    Comment: Many commenters provided views on the options available to
    entrepreneurs who have exhausted their up to 5 years of eligibility for
    parole under this rule. Some commenters were concerned that the rule
    does not provide a direct path to lawful permanent residence, which
    could limit the investment prospects for start-up entities. Other
    commenters were concerned that including such a path could exacerbate
    current immigrant visa backlogs and thus disadvantage those already in
    the queue for immigrant visa numbers.
    A number of commenters were more broadly concerned that the overall
    uncertainty inherent in parole may discourage entrepreneurs from using
    this rule to start and grow their businesses in the United States. One
    particular commenter expressed concerns about an entrepreneur's ability
    to demonstrate nonimmigrant intent for purposes of a visa that does not
    permit dual intent. Others wanted DHS to consider entrepreneurs who
    have completed a 5-year parole period, and whose start-ups continue to
    demonstrate growth, as eligible for an EB-2 immigrant visa with a
    National Interest Waiver based upon the economic benefit to the United
    States. Other commenters urged DHS to establish prima facie eligibility
    for lawful permanent residence based on 3 years of parole under this
    rule. Still others wanted assurance that an individual who is the
    beneficiary of an approved immigrant petition would keep his or her
    priority date for purposes of receiving lawful permanent residence if
    he or she were granted parole under this rule.
    Response: DHS appreciates the wide range of comments about
    immigration options for entrepreneurs after the end of their authorized
    period or periods of parole under this rule. Nothing in this rule
    forecloses otherwise available options for international entrepreneurs
    who are granted parole. DHS further notes that this rule does not
    impact existing rules and policies pertaining to retention of priority
    dates in the immigrant petition context. The rule does not, however,
    establish a direct path to lawful permanent residence by creating a new
    immigrant visa classification for international entrepreneurs, which
    could only be done by Congress.
    As discussed in the NPRM, the entrepreneur and any dependents
    granted parole under this program will be required to depart the United
    States when their parole periods have expired or have otherwise been
    terminated, unless such individuals are otherwise eligible to lawfully
    remain in the United States. Such individuals may apply for any
    immigrant or nonimmigrant classification for which they may be eligible
    (such as classification as an O-1 nonimmigrant or lawful permanent
    residence through employer sponsorship). Individuals who are granted
    parole under this rule may ultimately be able to qualify for an EB-2
    immigrant visa with a National Interest Waiver. If an entrepreneur is
    approved for a nonimmigrant or employment-based immigrant visa
    classification, he or she would generally be required to depart the
    United States and apply for a visa at a U.S. embassy or consulate
    abroad. As noted above, because parole is not considered an admission
    to the United States, parolees will be unable to apply to adjust or
    change their status in the United States under many immigrant or
    nonimmigrant visa classifications. DHS does not believe that merely
    being granted parole under this rule would prevent an individual from
    demonstrating nonimmigrant intent for purposes of obtaining a
    subsequent nonimmigrant visa for entry into United States. DHS believes
    that this rule presents sufficient clarity and predictability for many
    individuals who want to establish and grow their businesses in the
    United States, and will contribute significantly to economic growth and
    job creation here. Such positive outcomes may be relevant in the event
    that entrepreneurs granted parole under this rule later seek to apply
    for an existing nonimmigrant or immigrant visa.

    I. Appeals and Motions To Reopen

    Comment: Several commenters requested that applicants be allowed to
    file appeals or motions to reconsider adverse parole decisions. A
    business association requested that submissions of motions to reopen or
    motions for reconsideration result in uninterrupted employment
    authorization for the parolee.
    Response: DHS appreciates but declines to adopt these suggestions.
    DHS has concluded that granting a right of appeal following a decision
    to deny entrepreneur parole would be inconsistent with the
    discretionary nature of the adjudication and contrary to how DHS treats
    other parole decisions. The final rule also precludes applicants from
    filing motions to reopen or for reconsideration under 8 CFR
    103.5(a)(1). DHS retains its authority and discretion, however, to
    reopen or reconsider a decision on its own motion as proposed. See
    final 8 CFR 212.19(d)(4). Applicants may alert DHS, through existing
    customer service channels, that they believe that a decision to deny
    parole was issued in error and include factual statements and arguments
    supporting such claims.
    Because the determination to grant or deny a request for parole is
    discretionary, the parole process in this final rule may not be relied
    upon to create any right or benefit, substantive or procedural,
    enforceable at law or by any individual or other party in removal
    proceedings, in litigation with the United States, or in any other form
    or manner. Parole determinations would continue to be discretionary,
    case-by-case determinations made by DHS, and parole may be revoked or
    terminated at any time in accordance with the termination provisions
    established by this rule at 8 CFR 212.19(k). Parolees under this final
    rule would assume sole risk for any and all costs, expenses,
    opportunity costs, and any other potential liability resulting from a
    revocation or termination of parole. A grant of parole would in no way
    create any reliance or due process interest in obtaining or maintaining
    parole or being able to remain in the United States to continue to
    operate a start-up entity or for other reasons.

    J. Termination of Parole

    1. Discretionary Authority To Revoke/Terminate Parole
    Comments: One commenter expressed concern that the basis for
    terminating parole is subjective, particularly with respect to
    reporting material changes. This commenter suggested that USCIS should
    limit such reporting to adverse judgments, since entrepreneurs and
    start-up entities are entitled to due process. Other commenters
    requested that USCIS adjudicators be specifically trained on
    entrepreneurship issues so that they can make the most informed
    decisions regarding parole.
    Response: USCIS is committed to providing sufficient training on
    entrepreneurship issues for those adjudicators who will be assigned to
    adjudicating entrepreneur parole

    [[Page 5267]]

    requests. DHS does not believe that further revisions to the rule are
    necessary to protect against possible unfair or inconsistent
    determinations among adjudicators. By statute, parole decisions are
    discretionary and must be made on a case-by-case basis. This rule
    establishes transparent parameters for termination of parole, including
    automatic termination and termination on notice. Automatic termination
    applies at the expiration of parole, or upon written notification to
    DHS from the entrepreneur parolee that he or she is no longer employed
    by the start-up entity or no longer possesses the required qualifying
    ownership stake in the start-up entity. See final 8 CFR 212.19(k)(2).
    Termination on notice with an opportunity for the entrepreneur to
    respond is authorized by 8 CFR 212.19(k)(3). These bases for
    termination are tied to objective facts regarding eligibility for
    parole, thereby placing all parolees on the same footing.
    The commenter expressed particular concern regarding terminations
    based on material changes. DHS believes that this concern is
    sufficiently addressed by the parameters set by this rule's definition
    of material change. Under this rule, material change means any change
    in facts that could reasonably affect the outcome of the determination
    whether the entrepreneur provides, or continues to provide, a
    significant public benefit to the United States. See final 8 CFR
    212.19(a)(10). This rule provides further guidance by listing several
    examples illustrating material changes, including: Any criminal charge,
    conviction, plea of no contest, or other judicial determination in a
    criminal case concerning the entrepreneur or start-up entity; any
    complaint, settlement, judgment, or other judicial or administrative
    determination concerning the entrepreneur or start-up entity in a legal
    or administrative proceeding brought by a government entity; any
    settlement, judgment, or other legal determination concerning the
    entrepreneur or start-up entity in a legal proceeding brought by a
    private individual or organization other than proceedings primarily
    involving claims for damages not exceeding 10 percent of the current
    assets of the entrepreneur or start-up entity; a sale or other
    disposition of all or substantially all of the start-up entity's
    assets; the liquidation, dissolution or cessation of operations of the
    start-up entity; the voluntary or involuntary filing of a bankruptcy
    petition by or against the start-up entity; a significant change with
    respect to ownership and control of the start-up entity; and a
    cessation of the entrepreneur's qualifying ownership interest in the
    start-up entity or the entrepreneur's central and active role in the
    operations of that entity. See final 8 CFR 212.19(a)(10).
    2. Notice and Decision
    Comments: A couple of commenters suggested that DHS provide notice
    and opportunity to respond before terminating parole.
    Response: DHS agrees with the commenters that providing the
    entrepreneur parolee with notice and an opportunity to respond prior to
    termination is reasonable in certain scenarios, such as when grounds
    for termination require an assessment of the underlying case by the
    adjudicator. However, where no such assessment is required, DHS
    believes that automatic termination is appropriate. The NPRM provided
    for termination at DHS's discretion, including automatic termination in
    limited circumstances and termination on notice under a range of
    circumstances deemed appropriate by DHS. This rule finalizes that
    proposal without change. See final 8 CFR 212.19(k)(2) and (3). Under
    this rule, therefore, DHS will generally provide notice of termination
    and an opportunity to respond where it believes that:
    (1) The facts or information contained in the request for parole
    were not true and accurate;
    (2) The alien failed to timely file or otherwise comply with the
    material change reporting requirements in this section;
    (3) The entrepreneur parolee is no longer employed in a central and
    active role by the start-up entity or ceases to possess the required
    ownership stake in the start-up entity;
    (4) The alien otherwise violated the terms and conditions of
    parole; or
    (5) Parole was erroneously granted.
    Automatic termination will apply upon the expiration of parole or
    if DHS receives written notice from the parolee informing DHS that he
    or she is no longer employed by the start-up entity or no longer
    possesses the required qualifying ownership stake in the start-up
    entity. DHS believes that these bases for automatic termination clearly
    evidence that the entrepreneur no longer qualifies for parole under
    this rule; therefore, notice and opportunity to respond are
    unnecessary. Additionally, parole of the spouse or child of the
    entrepreneur will be automatically terminated without notice if the
    parole of the entrepreneur has been terminated. This rule also
    finalizes the provision indicating that the decision to terminate
    parole may not be appealed, that USCIS will not consider a motion to
    reopen or reconsider a decision to terminate parole, and, upon its own
    motion, USCIS may reopen or reconsider a decision to terminate. See
    final 8 CFR 212.19(k)(4).
    3. Other Comments on Application Adjudication and Parole Termination
    Comments: Multiple commenters suggested an expedited or premium
    processing option for entrepreneur parole applicants. Some of these
    commenters suggested a maximum 30-day adjudication time period.
    Response: While DHS appreciates the concern for timely
    adjudications, at this time DHS declines to include premium or
    expedited processing as part of the final rule. DHS may consider the
    possibility of premium processing or expedited processing after
    assessing implementation of the rule and an average adjudication time
    for processing requests for parole under this rule has been determined.

    K. Opposition to the Overall Rule

    Comment: Multiple commenters expressed overall opposition to the
    rule, stating that there is no reason to add an additional parole
    process for highly trained and talented entrepreneurs when visa and
    residency pathways already exist, such as the O nonimmigrant visa, EB-5
    immigrant visa, or EB-2 immigrant visa based on a National Interest
    Waiver. Other commenters asserted that the United States needs to limit
    immigration, not create more immigration programs. Several individual
    commenters argued that the U.S. Government should reform other visa
    programs, such as the H-1B nonimmigrant classification, and address the
    current immigrant visa backlog before creating more programs. Several
    individual commenters asserted that taxpayer money should be used on
    domestic issues, such as reviving the American economy, rebuilding
    infrastructure, promoting national security, and supporting veterans,
    rather than on administering a parole process for international
    entrepreneurs.
    Response: DHS disagrees with the commenters' assertions that
    sufficient avenues for international entrepreneurs already exist. DHS
    believes that this final rule will, by further implementing authority
    provided by Congress, reduce barriers standing in the way of innovation
    and entrepreneurial activity that will benefit the U.S. economy.\34\

    [[Page 5268]]

    This final rule provides an avenue for innovative entrepreneurs to
    pursue their entrepreneurial endeavors in the United States and
    contribute to the U.S. economy. In the absence of this rule, these
    innovative entrepreneurs might be delayed or discouraged altogether in
    contributing innovation, job creation, and other benefits to the United
    States.
    ---------------------------------------------------------------------------

    \34\ Nina Roberts, For foreign tech entrepreneurs, getting a
    visa to work in the U.S. is a struggle, The Guardian, Sept. 14,
    2014, available at http://www.theguardian.com/business/...a-us-struggle; Amy Grenier, Majority
    of U.S. Patents Granted to Foreign Individuals, April 11, 2014,
    available at http://immigrationimpact.com/2014/04...n-individuals/ (``Because of the
    limitations of the H-1B visa program, and the lack of a dedicated
    immigrant visa for entrepreneurs or innovators, foreign inventors
    struggle with inadequate visa options that often prevent them from
    obtaining permanent residency.'').
    ---------------------------------------------------------------------------

    DHS also disagrees with the commenters' assertions that reforms
    should be made to the H-1B nonimmigrant classification and that the
    immigrant visa backlog should be addressed before this rule is
    finalized. Parole is an entirely separate option within the Secretary's
    authority to allow individuals to come to the United States on a case-
    by-case basis for urgent humanitarian reasons or significant public
    benefit. While DHS appreciates the commenters' sentiment that changes
    should be made in other contexts, the exact changes contemplated by the
    commenters are unclear, are outside the scope of this rulemaking, or
    would require congressional action.
    DHS also disagrees with the assertion that taxpayer funds will be
    misallocated to process applications for parole under this final rule.
    Applicants for parole under this rule will be required to submit a
    filing fee to fully cover the cost of processing of applications.

    L. Miscellaneous Comments on the Rule

    1. Additional Suggested Changes to the Rule
    Comments: A number of commenters suggested additional changes to
    the final rule that are beyond the scope of this rulemaking. These
    comments proposed changes to the regulations governing certain
    nonimmigrant programs, namely: Employment of F-1 nonimmigrant students
    through Optional Practical Training (OPT); annual H-1B numerical
    limitations; ``period of stay'' duration for L-1 nonimmigrants starting
    a new office in the United States; and merging significant public
    benefit parole with the O-1 visa program. A commenter suggested
    providing Employment Authorization Documents or lawful permanent
    resident status to individuals who obtained their Master's degrees in
    the United States. Other commenters suggested providing tax incentives
    to established U.S. corporations that would agree to mentor immigrant
    entrepreneurs, or establishing a system of compensation for certain
    senior citizens in the United States to mentor immigrant entrepreneurs.
    Other commenters recommended balancing parole for entrepreneurs with
    refugee admissions.
    Response: DHS thanks commenters for these suggestions but declines
    to make changes to the rule as these comments are outside the scope of
    this rulemaking.
    Comment: A joint submission from an advocacy group and professional
    association recommended that DHS consider parole for individuals who
    work in social services fields that do not command a high income or who
    might otherwise perform work in the national interest.
    Response: This final rule is aimed at international entrepreneurs
    who will provide a significant public benefit to the United States--
    which could include entrepreneurs whose startup entities operate in the
    field of social services, so long as they meet the criteria for parole
    in this final rule. Furthermore, this rule does not limit the
    Secretary's broader authority to grant parole to other applicants for
    admission on a case-by-case basis for urgent humanitarian reasons or
    significant public benefit.
    2. Information/Guidance
    Comment: One commenter recommended that DHS make parole data from
    the program publicly available.
    Response: While DHS did not propose to disclose parole data related
    to this rule, DHS appreciates the commenter's suggestion, and may
    consider making such data publicly available after this rule is
    implemented.
    Comment: Other commenters suggested that DHS provide additional
    guidance to those granted parole under this rule and to provide
    resources for small start-ups interested in applying for the rule.
    Response: DHS will evaluate whether to provide additional guidance
    following publication of this final rule and an assessment of its
    implementation.
    Comment: One commenter suggested that DHS add a provision to the
    rule for retrospective review, in order to analyze the effects of the
    rule's implementation.
    Response: DHS agrees with the commenter's suggestion that the
    effects of the rule, after its implementation, should be reviewed;
    however, DHS does not believe adding a provision to the final
    regulatory text requiring such review is necessary. DHS intends to
    review all aspects of this parole rule and process subsequent to its
    implementation and consistent with the direction of Executive Order
    13563. Given that this is a new and complex process, DHS will consider
    potential modifications in the future after assessing the
    implementation of the rule and its impact on operational resources.
    Comment: One commenter said these rules should serve as a guide,
    but that companies and entrepreneurs should be analyzed on case-by-case
    basis.
    Response: DHS may grant parole on a case-by-case basis under this
    rule if the Department determines, based on the totality of the
    evidence, that an applicant's presence in the United States will
    provide a significant public benefit and that he or she otherwise
    merits a favorable exercise of discretion.
    Comment: An individual commenter suggested that DHS should, as part
    of its assessment of parole applications under this rule, evaluate the
    performance of applicants' prior start-ups in their home countries.
    Response: DHS agrees with the commenter and believes that the
    performance of applicants' prior start-ups in their home countries is
    the type of evidence already contemplated by the final rule both under
    the alternative criteria provisions and as part of the determination as
    to whether an applicant merits a favorable exercise of discretion. The
    alternative criteria allow an applicant who partially meets one or more
    of the general criteria related to capital investment or government
    funding to be considered for initial parole under this rule if he or
    she provides additional reliable and compelling evidence that his or
    her parole would provide a significant public benefit to the United
    States. Such evidence would need to serve as a compelling validation of
    the entity's substantial potential for rapid growth and job creation.
    DHS is not defining the specific types of evidence that may be deemed
    ``reliable and compelling'' at this time, as DHS seeks to retain
    flexibility as to the kinds of supporting evidence that may warrant
    DHS's exercise of discretion in granting parole based on significant
    public benefit.
    3. Comments Regarding the E-2 Nonimmigrant Classification
    Comment: Several commenters submitted comments regarding the E-2
    nonimmigrant classification. The majority supported the inclusion of E-
    2 businesses into the parole process under this rule. Several companies
    and an individual commenter further recommended that the rule should

    [[Page 5269]]

    accommodate E-2 businesses already in the United States.
    Response: The final rule lays out specific criteria for determining
    the kind of start-up enterprise that has substantial potential for job
    growth and job creation, and for assessing whether an individual
    entrepreneur's parole would be justified by significant public benefit.
    DHS believes it is unnecessary to identify these enterprises even more
    specifically than in this final rule. DHS notes that the rule does not
    prevent individuals who might otherwise qualify for an existing
    immigrant or nonimmigrant classification from applying for parole under
    this rule.
    Comment: One commenter stated that the proposed rule is much more
    complicated than the E-2 nonimmigrant classification, and that DHS
    should incorporate elements of the E-2 program into this rule's parole
    process.
    Response: DHS disagrees with the commenter's suggestion.\35\ A
    grant of parole under this rule is based on a determination that the
    individual will provide a significant public benefit to the United
    States. Eligibility for E-2 nonimmigrant classification is based on
    different standards, and DHS believes that applying E-2 requirements
    would not suffice to meet the statutory requirements for parole and
    establish that an individual merits a favorable exercise of discretion.
    DHS therefore declines to adopt the commenter's suggestion.
    ---------------------------------------------------------------------------

    \35\ The E-2 nonimmigrant classification allows a national of a
    treaty country (a country with which the United States maintains a
    treaty of commerce and navigation) to be admitted to the United
    States when investing a substantial amount of his or her own capital
    in a U.S. business.
    ---------------------------------------------------------------------------

    Comment: A commenter suggested that the proposed rule is
    unnecessary since the E-2 program already supports international
    entrepreneurs.
    Response: DHS disagrees with the commenter's statement. The E-2
    program allows nationals of a treaty country (a country with which the
    United States maintains a qualifying Treaty of Friendship, Commerce and
    Navigation or its equivalent) to be admitted to the United States when
    investing a substantial amount of capital in a U.S. business. Foreign
    entrepreneurs from nontreaty countries, such as Brazil, China, India,
    Israel, or Russia, are currently not eligible for an E-2 nonimmigrant
    visa. Also, the E-2 category requires the entrepreneur to invest his or
    her own funds, and is therefore not applicable to entrepreneurs relying
    upon funds from investors or government entities to build and grow
    their business. DHS believes that this rule provides a viable option,
    consistent with the Secretary's parole authority, to allow
    entrepreneurs to build and grow their businesses in the United States,
    providing significant public benefit here.
    4. Usefulness of the Rule
    Comment: Multiple commenters argued that this rule will not
    necessarily help international entrepreneurs succeed, because there are
    too many restrictions in place for foreign residents to qualify. One
    commenter asserted that the rule as proposed is too complex and its
    goals will be impossible to achieve.
    Response: DHS disagrees with these assertions. DHS acknowledges
    that this final rule will not benefit all international entrepreneurs
    seeking to enter or remain in the United States. As several commenters
    have stated, the final rule does not and cannot create a new visa
    classification specifically designed for international entrepreneurs,
    which is something that can only be done by Congress. This final rule,
    however, provides an additional option that may be available to those
    entrepreneurs who will provide a significant public benefit to the
    United States. This parole option complements, but does not supplant,
    current immigrant and nonimmigrant visa classifications for which some
    international entrepreneurs might qualify to bring or keep their start-
    up entities in the United States.
    The requirements governing eligibility for consideration for parole
    under this rule establish a high evidentiary bar that must be met in
    order to assist DHS in its determination that the individual will
    provide a significant public benefit to the United States. DHS,
    however, does not agree with the commenter's assertion that the
    requirements are impossible for all entrepreneurs to meet. Given that
    this is a new and complex process, DHS will consider potential
    modifications in the future after assessing the implementation of the
    rule and its impact on operational resources.
    5. Include On-Campus Business Incubators in the Rule
    Comment: One commenter urged USCIS to tie eligibility for parole to
    an applicant's participation in business incubators and accelerators
    located on U.S. university and college campuses that allow
    international entrepreneurs to grow start-up companies. The commenter
    stated that these programs meet the goal of the rule while providing
    benefits on a local and national scale. The commenter elaborated that
    the proposed rule only contemplates a traditional start-up arrangement,
    which creates requirements based on ownership interest, type of
    investor, and amount of money invested. The commenter asserted that
    international entrepreneurs that engage with campus-based incubators
    cannot meet these requirements because the structure and opportunities
    provided by a higher education institution do not follow the
    traditional models. The commenter urged DHS to create alternative
    criteria to recognize the role higher education plays in fostering
    international entrepreneurs.
    Response: DHS appreciates the comment but will not adopt changes to
    the rule in response. DHS recognizes and values the important role that
    incubators and accelerators located on a U.S. university or college
    campuses perform in the entrepreneur community. DHS believes, however,
    that the framework provided by this rule does allow DHS to consider, in
    its discretionary case-by-case determination, the fact that the start-
    up entity is participating in such an incubator or accelerator. DHS
    believes that evidence of such participation is one factor to be
    weighed for those individuals who do not fully meet the general capital
    investment or government funding criteria and are relying on additional
    reliable and compelling evidence that the start-up entity has the
    substantial potential for rapid growth and job creation. DHS believes
    that reliable and compelling evidence may, depending on all the
    circumstances, include evidence that the start-up entity is
    participating in a reputable incubator or accelerator located on a U.S.
    university or college campus.
    6. Objection to Use of the Word ``Parole''
    Comment: Multiple commenters objected to the use of the word
    ``parole'' to describe the provisions in this rule. Commenters are
    concerned that use of the word in an immigration context will be
    confused with the use of the word in the criminal context. A
    commentator suggested using the term ``conditional status'' or
    ``provisional status.''
    Response: DHS declines to accept the commenters' suggestion.
    ``Parole'' is a term established by statute at section 212(d)(5) of the
    INA, 8 U.S.C. 1182(d)(5). The use of that term in the INA should not be
    confused with the word's usage in non-immigration contexts. Use of
    alternative terms as suggested by the commenter would be misleading.

    [[Page 5270]]

    7. Concern Over Possible Exploitation of Entrepreneurs
    Comment: Two commenters suggested that international entrepreneurs
    would be vulnerable to exploitation by venture capital investors under
    this rule. The commenters compare the influence of venture capitalists
    over entrepreneurs granted parole to the influence of employers over H-
    1B employees. One commenter expressed concern that the rule could allow
    a venture capitalist almost total dominance over the international
    entrepreneur's life, through the threat of withdrawing funding and
    thereby triggering termination of parole.
    Response: DHS disagrees with the commenters' assertions that the
    final rule will facilitate such exploitation of international
    entrepreneurs by venture capital investors. As a general matter,
    venture capitalists and other investors cannot easily withdraw funding
    from a start-up entity once this investment transaction has been duly
    executed. Once an entrepreneur has applied for parole on the basis of
    prior investment, and has been granted such parole, the investor will
    not be in a position to directly interfere with the entrepreneur's
    continued eligibility during the parole period. The final rule will not
    create significant new conditions for exploitation that do not already
    exist currently for international entrepreneurs--or for that matter,
    domestic entrepreneurs--in the United States.
    Comment: One commenter stated that the United States should be
    mindful of what may happen to poorer countries when the United States
    attracts their best entrepreneurs.
    Response: DHS stresses that application for parole under this rule
    is voluntary and has the primary goal of yielding significant public
    benefit for the United States. DHS believes that applicants will assess
    economic and business conditions both in the United States and in other
    countries and will consider these conditions, along with numerous
    others, in the decision to apply for parole under this rule. DHS does
    not believe that the rule itself, which authorizes parole only for a
    limited period of time and under specific limited circumstances, will
    create significant negative consequences for poorer countries.
    Additionally, positive spillovers from new innovations are not limited
    to the specific country in which they were developed. Parole under this
    rule in no way prevents an entrepreneur contributing to the economy of
    his or her home, including through remittance payments or upon return.
    Furthermore, individuals may be interested in returning to their home
    countries in the future for a variety of reasons, including the
    temporary nature of parole.

    M. Public Comments on Statutory and Regulatory Requirements

    1. Regulatory Impact Analysis
    Comment: Two commenters suggested alternative estimates for the
    number of applicants that could apply to this rule. One commenter
    estimated that 5,000 international entrepreneurs will apply for parole
    under this rule. This estimate was approximately 2,000 more
    entrepreneurs than the estimate provided by DHS. Another commenter
    stated that the rule's eligibility criteria are narrow and therefore,
    the rule would cause fewer than 3,000 people to apply.
    Response: DHS recognizes that uncertainty in business and economic
    conditions, as well as data limitations, make it difficult to
    accurately predict how many entrepreneurs will apply for parole under
    this rule. However, as discussed in the ``Volume Projections'' section
    of this rule, DHS utilized limited data available to estimate that
    approximately 2,940 entrepreneurs could seek parole each year. This
    estimate was bolstered by an alternative estimate based on accelerator
    investment round data that DHS analyzed. Given limits on DHS's
    information about such entrepreneurs and that this is a new process,
    DHS does not know how many people within the estimated eligible
    population will actually apply. Additionally, fluctuations in business
    and economic conditions could cause the number of applications to vary
    across years.
    While one commenter estimates that the eligible number of
    entrepreneurs will be higher than the DHS estimate, another commenter
    estimates it will be lower. Neither of the commenters provided a basis
    or data from which their figures were derived. DHS reaffirms that the
    estimate provided in this rule is reasonable. The assessment is based
    on analysis of data and publicly available information, and reflects,
    where data and analysis allow, reasonable medians or averages.
    Comment: One commenter argued that the rule would only benefit
    certain special-interest venture capitalists.
    Response: DHS respectfully disagrees with this commenter.
    Fundamentally, this rule is designed to yield significant public
    benefit to the United States--including through economic growth,
    innovation, and job creation--and not to any particular private-sector
    interest group. While some venture capital firms may benefit from the
    rule by having new opportunities to invest in start-up entities that
    would not have otherwise been able to locate in the United States, this
    is also true for a range of other ``qualified investors'' as defined in
    the rule. Moreover, many international entrepreneurs may qualify for
    parole under this rule without having raised private-sector capital
    investment at all, since funding from government entities is also an
    eligibility criterion.
    Comment: Several commenters stated that the rule would provide
    significant economic benefits.
    Response: DHS agrees with these commenters that the rule will
    provide significant economic benefits to the United States. As
    discussed in the proposed rule and elsewhere in this section, DHS
    believes that this rule will help the United States compete with
    programs implemented by other countries to attract international
    entrepreneurs. International entrepreneurs will continue to make
    outsized contributions to innovation and economic growth in the United
    States.
    Comment: Several commenters provided feedback on the costs of
    applications. One commenter stated that the fees were reasonable.
    Another commenter suggested allowing market prices to determine parole
    costs, essentially allowing those entrepreneurs with more likelihood of
    success to invest in parole opportunities. Still other commenters
    stated that the application fee was too high, especially compared to
    various visa applications.
    Response: DHS appreciates commenters' feedback on the costs for
    applications. DHS determines the costs of applications through a
    biennial fee study it conducts, which reviews USCIS' cost accounting
    process and adjusts fees to recover the full costs of services provided
    by USCIS. The established fees are necessary to fully recover costs and
    maintain adequate service by the agency, as required by INA section
    286(m); 8 U.S.C. 1356(m).
    Comment: Several commenters generally stated support for the rule
    because it will likely improve innovation for local and regional
    economic areas. Another commenter stated support for the rule because
    it would increase intangible assets.
    Response: DHS concurs with this expectation that the rule will
    foster innovation at the local and regional level. Studies on
    entrepreneurs reveal that they are key drivers of innovation throughout
    the United States, and that such innovation benefits local, regional,
    and the national economy through technical progress and improvements in
    efficiency and productivity. The rule's

    [[Page 5271]]

    eligibility criteria focus on start-ups with high growth potential, and
    DHS expects that new firms started by entrepreneurs covered by the rule
    will conduct research and development, expand innovation, and bring new
    technologies and products to market in addition to creating jobs in the
    United States. These activities will produce benefits that will spill
    over to other firms and sectors.
    DHS also agrees with the commenter on impacts to intangible assets.
    Intangible assets are generally integrated into a firm's or sector's
    total assets and have become important in broad analyses of
    productivity and efficiency. Such assets can include proprietary
    software, patents, and various forms of research and development. This
    rule is intended to attract the types of ventures that will increase
    intangible assets.
    a. Job Creation
    Comment: Many commenters agreed that this rule would help create
    jobs and significantly benefit the U.S. economy. A commenter noted that
    immigrants have helped to found one quarter of U.S. firms and therefore
    allowing more international entrepreneurs would result in new job
    creation. Commenters also mentioned that immigrants have historically
    been successful in creating and establishing new businesses, which in
    turn create jobs in the United States. Commenters also more
    specifically endorsed the need to provide more investment opportunities
    for venture capitalists and angel investors who indirectly create jobs.
    Finally, commenters from the technology industry stated that attracting
    entrepreneurs to the Unites States to operate in high unemployment
    areas could provide access to new jobs where they are most needed.
    Response: DHS appreciates the commenters' support of this rule with
    regard to attracting international entrepreneurs, and emphasizes that
    job creation for U.S. workers is one of the rule's primary goals, as
    discussed in the Regulatory Impact Analysis (RIA).
    b. Impact on Native U.S. Entrepreneurs and Native U.S. Workers
    Comment: Several commenters suggested the rule will have negative
    consequences for native U.S. entrepreneurs and native U.S. workers.
    These commenters were concerned that the rule would be disadvantageous
    to native U.S. entrepreneurs and would create incentives for venture
    capital firms to find international entrepreneurs instead of investing
    in native U.S. entrepreneurs. The commenters argued that job creation
    could be accomplished through investment of native U.S. entrepreneurs
    instead of foreign entrepreneurs. Several commenters also stated that
    the government should assist U.S. entrepreneurs and workers before
    helping international entrepreneurs. Commenters also mentioned that the
    need for international innovators was overstated and that the number of
    native U.S. innovators is already adequate. Finally, these commenters
    asserted that foreign workers are often exploited for cheap labor and
    harm job prospects for native U.S. workers.
    Response: DHS disagrees with these commenters' assertion that the
    rule will have negative impacts on native U.S. entrepreneurs and native
    U.S. workers. This rule focuses on identifying entrepreneurs associated
    with start-up entities with significant potential for bringing growth,
    innovation, and job creation in the United States. Much research
    supports the conclusion that high-growth firms drive job creation for
    workers in the United States, including for native U.S. workers. As
    discussed in further detail in the RIA, research also shows that
    immigrants have been outsized contributors to business ownership and
    entrepreneurship in the United States and abroad. Self-employment rates
    for immigrants are higher than for the native U.S. population. As
    discussed in the RIA, although one economic study has suggested that a
    very small number of native U.S. entrepreneurs may be displaced by
    international entrepreneurs, other researchers have noted that the
    finding simply raises the possibility that such displacement could
    occur without providing evidence that it actually does.\36\ DHS
    reiterates, moreover, that the numbers of entrepreneurs who may be
    eligible for parole under this rule is limited and that the aim of the
    rule is to increase overall entrepreneurial activity and significant
    economic benefit throughout the United States. In any event, the
    purpose of the parole rule is to foster innovation and entrepreneurial
    activities in new or very young endeavors, where the literature much
    more decisively indicates a strong potential of creating new net jobs
    for U.S. workers.
    ---------------------------------------------------------------------------

    \36\ Compare Fairlie, R.W., and B.D. Meyer. ``The effect of
    immigration on native self-employment.'' Journal of Labor Economics
    21:3 (2003): 619-650, available at: http://people.ucsc.edu/
    ~rfairlie/papers/published/jole%202003%20-%20native%20se.pdf, with,
    e.g., Magnus Lofstrom, ``Immigrants and Entrepreneurship,'' Public
    Policy Institute of California, USA, and IZA, Germany (2014), p. 4,
    available at: http://wol.iza.org/articles/immigrants-and-entrepreneurship.pdf.
    ---------------------------------------------------------------------------

    c. Impact on Innovation
    Comment: Several commenters provided feedback on the rule's impact
    on innovation. Two commenters stated that this type of international
    entrepreneurship supports innovation in the United States. Another
    commenter stated that the rule would not help foreign innovators
    because of complications with patents and modeling designs.
    Response: DHS agrees with the commenters that stated that this rule
    supports innovation in the United States. Entrepreneurs tend to engage
    in research and development in order to develop and commercialize new
    products and technologies, and often stimulate patents and other
    intellectual capital linked to these efforts. DHS does not agree with
    the commenter that stated the rule is not helpful to foreign innovators
    because of issues with patents and modeling designs, and DHS sees no
    basis for this comment. Nothing in the rule poses specific burdens or
    constraints on the ability of entrepreneurs to seek and obtain patents
    or other intellectual capital.
    2. Review Under the National Environmental Policy Act (NEPA)
    Comment: An advocacy organization stated that all rules, including
    immigration rules, are subject to review under the National
    Environmental Policy Act. The commenter suggested that, at minimum, an
    Environmental Assessment be conducted to account for the growth-
    inducing impacts that would occur with an influx in population under
    this rule.
    Response: DHS agrees that NEPA applies to this, as to every, final
    rulemaking. As explained in section IV.E of this preamble, the rule has
    been reviewed for environmental effects and found to be within two
    categorical exclusions from further review because experience has shown
    rules of this nature have no significant impacts on the environment.
    DHS also notes that any entrepreneurial ventures undertaken will be
    governed by local, state and federal laws and regulations, including
    those protecting human health and the environment. We disagree with the
    commenter's assertion that an Environmental Assessment is required.
    3. Proposed Information Collections Under the Paperwork Reduction Act
    a. Employment Eligibility Verification, Form I-9
    Comment: An individual commenter suggested that List A documents
    should be updated to include the verified

    [[Page 5272]]

    driver's licenses (sample attached and included in the file) that meet
    federal guidelines and require the presentation of the same
    documentation needed to obtain a passport. The commenter stated that it
    is no longer reasonable for those who receive a verified license and
    who paid the premium necessary for the processing of the extra
    documents, to have to locate their birth certificate and social
    security card in order to complete the Form I-9 process.
    Response: DHS presumes that by ``verified driver's licenses'' the
    commenter is referring to State driver's licenses that comply with the
    REAL ID Act of 2005, Public Law 109-13, 119 Stat. 302. The specific
    suggestion about amending List A on Form I-9, which would have wide-
    ranging effect and not be limited to entrepreneurs under this rule, is
    outside the scope of this rulemaking. This rule and accompanying form
    revisions limit changes to List A of Form I-9 to the modification of an
    existing document specified at 8 CFR 274a.2(b)(1)(v)(A)(5) to include
    individuals authorized to work incident to parole.
    b. Application for Entrepreneur Parole, Form I-941
    Comment: DHS received a public comment that stated that the time
    burden estimate of 1.33 hours for the respondent to complete the
    information collection was too low.
    Response: DHS appreciates and agrees with this comment. Based on
    further review of the information collection and public comments on
    this specific issue, DHS is revising the estimated time burden from
    1.33 hours to 4.7 hours for Form I-941 respondents.
    4. Comments and Responses to Impact on Small Businesses
    Comment: The U.S. Small Business Administration, Office of Advocacy
    (SBA) commented by supporting the goals of this rule, but expressed
    concern that the rule could significantly impact small entities. The
    SBA commented that the proposed rule was erroneously certified under
    the Regulatory Flexibility Act (RFA). The SBA stated that the only
    international entrepreneurs eligible for this parole program are those
    with significant ownership stakes in a start-up entity formed in the
    previous three years. The SBA also stated that the thresholds to
    qualify for parole were directly tied to the ability of the
    entrepreneur's start-up to produce significant public benefit to the
    United States. The SBA noted that under the proposed rule, an
    entrepreneur is not permitted to transfer work authorization to another
    start-up entity, and that these restrictions could impact start-up
    entities if the entrepreneur were no longer eligible to stay in the
    United States. For these reasons, SBA concluded that this rule directly
    impacts start-up entities. The SBA recommended that DHS submit a
    supplemental analysis on the impact of the final rule on small
    entities.
    Response: DHS has concluded that a RFA certification statement for
    this final rule is appropriate. This final rule does not regulate small
    entities nor does it impose any mandatory requirements on such
    entities. Instead, it provides an option for certain individual
    entrepreneurs to seek parole on a voluntary basis. There are no
    compliance costs or direct costs for any entity, small or otherwise,
    imposed by this rule since it does not impose any mandatory
    requirements on any entity. Historically, when an employer petitions on
    behalf of an individual or employee, DHS has provided an RFA analysis
    for the impact to small businesses. However, under this rule, a small
    entity or an employer does not apply for parole on behalf of an
    employee; instead, an entrepreneur applies for parole on a voluntary
    basis on his or her own behalf, and only those eligible individuals
    seeking parole would be subject to the anticipated costs of
    application. Entrepreneurs with an ownership stake in a start-up make
    the cost-benefit decision to voluntarily apply for parole.
    In both the RFA and SBA's Guide for Government Agencies on the RFA,
    government agencies are required to consider significant alternatives
    to the rule when providing a full RFA analysis. Among the kinds of
    alternatives that SBA suggests considering include ``the exemption for
    certain or all small entities from coverage of the rule, in whole or in
    part.'' \38\ Even if this rule directly impacted small entities and DHS
    were required to engage in an analysis to minimize negative impacts of
    the rule on small entities by exempting them from the rule, that
    alternative would only harm small entities, which would no longer be
    able to benefit from the rule's allowing entrepreneurs to seek parole
    and work authorization.
    ---------------------------------------------------------------------------

    \38\ The Regulatory Flexibility Act, 5 U.S.C. 603(c)(4). The
    Small Business Administration's RFA Guide for Government, p. 38,
    available at https://www.sba.gov/sites/default/files/advocacy/rfaguide_0512_0.pdf.
    ---------------------------------------------------------------------------

    The SBA also commented on various policy issues on the eligibility
    of entrepreneurs in this rule. Notwithstanding DHS' belief that
    entrepreneurs when filing for parole are not small entities, DHS has
    carefully considered all those comments and has made policy changes in
    this final rule to address the comments. Specifically, the SBA
    commented that thresholds to qualify for parole are directly tied to
    the ability of the international entrepreneur's start-up to produce
    significant public benefit for the United States. DHS has considered
    this comment along with other public comments on this issue and has
    made the decision to lower the eligible threshold investment amount for
    initial parole from the proposed $345,000 in the NPRM to $250,000 in
    the final rule. Additionally, in the NPRM and in this final rule, DHS
    has provided some flexibility and alternative criteria for those
    entrepreneurs meeting partial eligibility requirements, as described in
    further detail in the preamble.
    SBA also commented that the rule only allows the entrepreneur to
    work for the business identified on the parole application without
    providing leniency in transferring the work authorization to another
    entity. The SBA further comments that the start-up entity may be
    imperiled if the entrepreneur is no longer eligible to stay in the
    United States. The eligibility criteria for consideration for parole
    under this rule require an entrepreneur to have recently formed a new
    entity in the United States with substantial potential for rapid growth
    and job creation. Before an application for parole under this rule is
    approved, USCIS must make a discretionary determination that the
    entrepreneur is well-positioned to provide a significant public benefit
    to the United States. Therefore, these eligibility criteria are not
    limiting entrepreneurs, but aimed at ensuring that only those
    entrepreneurs with high growth potential are eligible for parole
    consideration under this rule. DHS has also provided avenues for an
    additional parole period specifically to prevent instability of a
    start-up entity.
    DHS reiterates that RFA guidance allows an agency to certify a
    rule, instead of preparing an analysis, if the rule is not expected to
    have a significant economic impact on a substantial number of small
    entities.\39\ DHS reiterates that this rule does not regulate small
    entities. Any costs imposed on businesses will be driven by economic
    and business conditions and not by the

    [[Page 5273]]

    voluntary participation for benefits from this rule.
    ---------------------------------------------------------------------------

    \39\ See SBA, Office of Advocacy, ``A Guide for Government
    Agencies; ``How to Comply with the Regulatory Flexibility Act,
    Implementing the President's Small Business Agenda and Executive
    Order 13272'' (May 2012), available at: https://www.sba.gov/sites/default/files/advocacy/rfaguide_0512_0.pdf.
    ---------------------------------------------------------------------------

    IV. Statutory and Regulatory Requirements

    A. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among
    other things, to curb the practice of imposing unfunded Federal
    mandates on State, local, and tribal governments. Title II of the Act
    requires each Federal agency to prepare a written statement assessing
    the effects of any Federal mandate in a proposed or final agency rule
    that may result in a $100 million or more expenditure (adjusted
    annually for inflation) in any one year by State, local, and tribal
    governments, in the aggregate, or by the private sector. The value
    equivalent of $100 million in 1995 adjusted for inflation to 2015
    levels by the Consumer Price Index for All Urban Consumers (CPI-U) is
    $155 million.
    This rule does not exceed the $100 million expenditure in any one
    year when adjusted for inflation ($155 million in 2015 dollars), and
    this rulemaking does not contain such a mandate. The requirements of
    Title II of the Act, therefore, do not apply, and DHS has not prepared
    a statement under the Act.

    B. Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the
    Small Business Regulatory Enforcement Act of 1996. This rule will not
    result in an annual effect on the economy of $100 million or more, a
    major increase in costs or prices, or significant adverse effects on
    competition, employment, investment, productivity, innovation, or on
    the ability of United States companies to compete with foreign-based
    companies in domestic and export markets.

    C. Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the
    costs and benefits of available regulatory alternatives and, if
    regulation is necessary, to select regulatory approaches that maximize
    net benefits (including potential economic, environmental, public
    health and safety effects, distributive impacts, and equity). Executive
    Order 13563 emphasizes the importance of quantifying both costs and
    benefits, of reducing costs, of harmonizing rules, and of promoting
    flexibility. This rule has been designated a ``significant regulatory
    action'' under section 3(f) of Executive Order 12866. Accordingly, the
    rule has been reviewed by the Office of Management and Budget.
    1. Summary
    This final rule is intended to add new regulatory provisions
    guiding the use of parole with respect to individual international
    entrepreneurs who operate start-up entities and who can demonstrate
    through evidence of substantial and demonstrated potential for rapid
    business growth and job creation that they would provide a significant
    public benefit to the United States. Such potential is indicated by,
    among other things, the receipt of significant capital financing from
    U.S. investors with established records of successful investments, or
    obtaining significant awards or grants from certain Federal, State or
    local government entities. The regulatory amendments will provide the
    general criteria for considering requests for parole submitted by such
    entrepreneurs.
    DHS assesses that this final rule will, by further implementing
    authority provided by Congress, reduce a barrier to entry for new
    innovative research and entrepreneurial activity in the U.S.
    economy.\40\ Under this final rule, some additional international
    entrepreneurs will be able to pursue their entrepreneurial endeavors in
    the United States and contribute to the U.S. economy. In the absence of
    the rule, these innovative entrepreneurs might be delayed or
    discouraged altogether in bringing innovation, job creation, and other
    benefits to the United States.
    ---------------------------------------------------------------------------

    \40\ Nina Roberts, For foreign tech entrepreneurs, getting a
    visa to work in the US is a struggle, The Guardian, Sept. 14, 2014,
    available at http://www.theguardian.com/business/...a-us-struggle; Amy Grenier, Majority
    of U.S. Patents Granted to Foreign Individuals, April 11, 2014,
    available at http://immigrationimpact.com/2014/04...n-individuals/ (``Because of the
    limitations of the H-1B visa program, and the lack of a dedicated
    immigrant visa for entrepreneurs or innovators, foreign inventors
    struggle with inadequate visa options that often prevent them from
    obtaining permanent residency.'').
    ---------------------------------------------------------------------------

    Based on review of data on startup entities, foreign ownership
    trends, and Federal research grants, DHS expects that approximately
    2,940 entrepreneurs, arising from 2,105 new firms with investment
    capital and about 835 new firms with Federal research grants, could be
    eligible for this parole program annually. This estimate assumes that
    each new firm is started by one person despite the possibility of up to
    three owners being associated with each start-up. DHS has not estimated
    the potential for increased demand for parole among foreign nationals
    who may obtain substantial investment from U.S. investors and otherwise
    qualify for entrepreneur parole, because changes in the global market
    for entrepreneurs, or other exogenous factors, could affect the
    eligible population. Therefore, these volume projections should be
    interpreted as a reasonable estimate of the eligible population based
    on past conditions extrapolated forward. Eligible foreign nationals who
    choose to apply for parole as an entrepreneur will incur the following
    costs: A filing fee for the Application for Entrepreneur Parole (Form
    I-941) in the amount of $1,200 to cover the processing costs for the
    application; a fee of $85 for biometrics submission; and the
    opportunity costs of time associated with completing the application
    and biometrics collection. After monetizing the expected opportunity
    costs and combining them with the filing fees, an eligible foreign
    national applying for parole as an entrepreneur will face a total cost
    of $1,591. Any subsequent renewals of the parole period will result in
    the same previously discussed costs. Filings to notify USCIS of
    material changes to the basis for the entrepreneur's parole, when
    required, will result in similar costs; specifically, in certain
    instances the entrepreneur will be required to submit to USCIS a new
    Form I-941 application to notify USCIS of such material changes and
    will thus bear the direct filing cost and concomitant opportunity cost.
    However, because the $85 biometrics fee will not be required with such
    filings, these costs will be slightly lower than those associated with
    the initial parole request and any request for re-parole.
    Dependent spouses and children who seek parole to accompany or join
    the principal applicant by filing an Application for Travel Document
    (Form I-131), will be required to submit biographical information and
    biometrics as well. Based on a principal applicant population of 2,940
    entrepreneurs, DHS assumes a total of 3,234 spouses and children will
    be eligible for parole under this rule. Each dependent will incur a
    filing fee of $575, a biometric processing fee of $85 (if 14 years of
    age and over) and the opportunity costs associated with completing the
    Form I-131 application and biometrics collection.\41\ After monetizing
    the expected opportunity costs associated with providing biographical
    information to USCIS and submitting biometrics and combining it with
    the biometrics

    [[Page 5274]]

    processing fee, each dependent applicant will face a total cost of
    $765. DHS is also allowing the spouse of an entrepreneur paroled under
    this rule to apply for work authorization. Using a one-to-one mapping
    of principal filers to spouses, the total population of spouses
    eligible to apply for work authorization is 2,940. To obtain work
    authorization, the entrepreneur's spouse will be required to file an
    Application for Employment Authorization (Form I-765), incurring a $410
    filing fee and the opportunity costs of time associated with completing
    the application. After monetizing the expected opportunity costs and
    combining it with the filing fees, an eligible spouse will face a total
    additional cost of $446 (rounded). DHS expects that applicants will
    face the above costs, but does not anticipate that this rule will
    generate significant additional costs and burdens to private entities,
    or that the rule will generate additional processing costs to the
    government to process applications. While applicants may face a number
    of costs linked to their business or research endeavors, these costs
    will be driven by the business and innovative activity that the
    entrepreneur is engaged in and many other exogenous factors, not the
    rule itself or any processes related to the rule. Thorough review of
    academic, business, and policy research does not indicate that
    significant expected costs or negative consequences linked to
    attracting international entrepreneurs are likely to occur. As such,
    DHS expects that the negative consequences, if any, will be greatly
    exceeded by the positive effects of this rule.
    ---------------------------------------------------------------------------

    \41\ The filing fees have been updated and reflect those
    promulgated in the 2016 Fee Rule (1615-AC09, CIS No. 2577-15 DHS
    Docket No. USCIS-2016-0001).
    ---------------------------------------------------------------------------

    In each case in which an entrepreneur will be granted parole under
    this rule, DHS will have made a determination that parole will yield a
    significant public benefit and that the person requesting parole merits
    a favorable exercise of discretion. Consistent with those decisions,
    the rule is expected to produce broad economic benefits through the
    creation of new business ventures that otherwise would not be formed in
    the United States. These businesses are likely to create significant
    additional innovation, productivity, and job creation. It is reasonable
    to conclude that investment and research spending on new firms
    associated with this rule will directly and indirectly benefit the U.S.
    economy and create jobs for American workers. In addition, innovation
    and research and development spending are likely to generate new
    patents and new technologies, further enhancing innovation. Some
    portion of the international entrepreneurs likely to be attracted to
    this parole process may develop high-growth and high-impact firms that
    can be expected to contribute disproportionately to U.S. job creation.
    In summary, DHS anticipates that this rule will produce positive
    effects that would greatly exceed any negative consequences.
    Using an estimate of 2,940 annual applications for significant
    public benefit entrepreneur parole as developed in the ensuing volume
    projections section of this analysis, DHS anticipates the total cost of
    this rule for principal filers who face a total per applicant cost of
    $1,591 to be $4,678,336 (undiscounted) annually for any given year.
    (These estimates focus only on principal initial filers, not
    entrepreneurs who might be eligible for a re-parole period of up to 30
    months, or their spouses.) Dependent spouses and children who must
    submit the Form I-131 application and biometrics will face a per-
    applicant cost of $765, for a total cost of $2,474,914 (undiscounted).
    Dependent spouses who apply for employment authorization will face a
    per applicant cost of $446, which DHS projects will total $1,311,830
    (undiscounted). Adding together the costs for the principal filers and
    family members--including filing costs, costs of submitting biometrics,
    and monetized opportunity costs--yields a total cost of this rule for
    the first year, 2017 and subsequently 2018, of $8,465,080
    (undiscounted). The total annual cost of the rule of $8,465,080 can be
    expected for each subsequent year in the ten-year period. The total
    ten-year undiscounted cost is $84,650,081.
    2. Background and Purpose of the Rule
    Section 212(d)(5) of the Immigration and Nationality Act (INA), 8
    U.S.C. 1182(d)(5), grants the Secretary of Homeland Security the
    discretionary authority to parole applicants for admission into the
    United States temporarily, on a case-by-case basis, for urgent
    humanitarian reasons or significant public benefit. DHS is amending its
    regulations implementing this authority to increase and enhance
    entrepreneurship, research and development and other forms of
    innovation, and job creation in the United States. The rule will
    establish general criteria for the use of parole with respect to
    individual entrepreneurs who operate start-up entities and who can
    demonstrate through evidence of substantial and demonstrated potential
    for rapid business growth and job creation that they would provide a
    significant public benefit to the United States.
    The purpose of the rule is to attract talented entrepreneurs to the
    United States who might otherwise choose to pursue such innovative
    activities abroad, or otherwise be significantly delayed in growing
    their companies in the United States, given the barriers they presently
    face. In addition to the benefits associated with entrepreneurial
    innovation, including new products, business networks, and production
    efficiencies that such activities are likely to generate, entrepreneurs
    have been and remain vital to economic growth and job creation in the
    United States and have generated a cohort of high-growth firms that
    have driven a highly disproportionate share of net new job
    creation.\42\
    ---------------------------------------------------------------------------

    \42\ See Richard L. Clayton, Akbar Sadeghi, David M. Talan, and
    James R. Spletzer, High-employment-growth firms: Defining and
    counting them, Office of Industry Employment Statistics, Bureau of
    Labor Statistics (BLS), Monthly Labor Review (June 2013), p. 1-2,
    available at: http://www.bls.gov/opub/mlr/2013/article/pdf/clayton.pdf.
    ---------------------------------------------------------------------------

    A body of research documents both the importance of entrepreneurial
    activity to the U.S. economy and its link to immigration. In this
    background section, DHS does not attempt to comprehensively summarize
    this large body of work but instead focuses on specific aspects central
    to the purpose of the rule and to its potential impacts.\43\ In
    summary, DHS focuses on the role of new entrepreneurial firms in job
    creation in the United States, and the role that immigrant
    entrepreneurs have played in innovation and the high technology sector.
    ---------------------------------------------------------------------------

    \43\ DHS notes that the body of research concerning immigration
    in general and its impact on the labor market, most notably germane
    to earnings and employment of domestic workers, is not addressed in
    the present analysis.
    ---------------------------------------------------------------------------

    The labor market of the United States is highly dynamic. DHS
    analysis of data published by the U.S. Department of Labor's Bureau of
    Labor Statistics (BLS) indicates that between 2004 and 2013, on average
    about 847,000 firms were ``born'' each year and 784,000 ``died.'' \44\
    To illustrate the extent of the labor market churn, since 1980 the
    private sector has generated about 16.3 million gross jobs annually but
    an average of only about 1.4 million net jobs annually. In both general
    business cycle expansions and contractions, large numbers of jobs are
    created and destroyed, comprising a key dynamic in the forces of
    creative destruction.\45\

    [[Page 5275]]

    Research into the highly dynamic and volatile labor market in the
    United States has evolved. Earlier focuses on small- and new-firm size
    as the primary co-determinants of job creation has been reoriented to
    focus on the role of a relatively small subset of entrepreneurial
    firms.
    ---------------------------------------------------------------------------

    \44\ Figures were obtained from the BLS, Business employment
    Dynamics, Table 8, ``Private sector establishment births and deaths,
    seasonally adjusted:'' available at http://www.bls.gov/news.release/cewbd.t08.htm. Firm ``births'' in these data only include new firms
    and thus exclude new franchises and expansions of existing firms.
    \45\ See Ryan Decker, John Haltiwanger, Ron Jarmin, and Javier
    Miranda, The Role of Entrepreneurship in U.S. Job Creation and
    Economic Dynamism, Journal of Economic Perspectives--Vol. 28, Number
    3 (Summer 2014), pp. 3-24, available at: http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.28.3.3.
    ---------------------------------------------------------------------------

    This rule focuses on identifying entrepreneurs associated with
    types of start-up firms that are more likely to experience high growth,
    contribute to innovation, and create jobs in the United States. This
    deliberate focus is critical to ensuring that parole in individual
    cases is justified by significant public benefit. Research has shown
    that the average start-up company does not survive long.\46\ Most new
    firms do not add much net job creation either, as they are not focused
    on achieving high growth. By some estimates, the vast majority--as much
    as 95 percent--of all new firms are not substantial job creators or
    innovators.\47\ About 95 percent of new firms start with fewer than 20
    employees, and about the same percentage ultimately close with fewer
    than 20 employees, indicating that business turnover is heavily
    influenced by small firms.\48\
    ---------------------------------------------------------------------------

    \46\ According to BLS findings, ``20 percent of newly created
    establishments don't survive their first year in business, 32
    percent don't survive their first two years, and 50 percent don't
    survive their first 5 years.'' See Richard L. Clayton, Akbar
    Sadeghi, David M. Talan, and James R. Spletzer, High-employment-
    growth firms: Defining and counting them, Office of Industry
    Employment Statistics, Bureau of Labor Statistics (BLS), Monthly
    Labor Review (June 2013), p. 1, available at: http://www.bls.gov/opub/mlr/2013/article/pdf/clayton.pdf.
    \47\ See Jason Wiens and Chris Jackson, The Importance of Young
    Firms for Economic Growth, Ewing Marion Kauffman Foundation (2014),
    pp. 1-2, available at: http://www.kauffman.org/~/media/kauffman_org/
    resources/2014/entrepreneurship%20policy%20digest/september%202014/
    entrepreneurship_policy_digest_september2014.pdf; see also Hurst,
    Erik, and Benjamin Wild Pugsley. 2011; What Do Small Businesses Do?
    Brookings Paper on Economic Activity, no. 2 (2011), pp. 73-142.
    \48\ See Headd, Brian, An Analysis of Small Business and Jobs,
    SBA Office of Advocacy (2010), p. 6, available at: https://www.sba.gov/sites/default/files/files/an%20analysis%20of%20small%20business%20and%20jobs(1).pdf.
    ---------------------------------------------------------------------------

    There is significant research, however, demonstrating that a small
    subset of new firms tends to be highly dynamic and to contribute
    disproportionately to net job creation. The BLS has highlighted the
    role of the small subset of high-growth firms that comprise about 2
    percent of all firms but have accounted for 35 percent of gross job
    gains in recent years. ``High-growth firms'' are defined by the BLS and
    the Organization for Economic Cooperation (OECD) as those with at least
    ten employees that grow by at least 20 percent for each of 3
    consecutive years based on employment. As of 2012, there were 96,900
    high-growth firms in the United States that had created about 4.2
    million jobs.\49\ A key finding by the BLS is that high-growth firms
    especially add jobs in their first ten years, though they generally
    continue to add a diminishing number of new jobs even after that period
    of time to the extent they survive. Job creation in the United States
    for the last several decades has been driven primarily by high-growth
    firms that tend to be young and new, and by a smaller number of
    surviving high-growth firms that age for a decade or more.\50\
    ---------------------------------------------------------------------------

    \49\ See R. Clayton et al. (June 2013), supra n. 50, p. 2-4. For
    a description of the methodology utilized to measure high growth
    firms, see OECD, OECD-Eurostat Manual on Business Demography
    Statistics (2007), pp. 59-65, available at: http://www.oecd.org/std/39974460.pdf.
    \50\ For specific detailed information on survival rates and
    employment creation at various intervals along the HGF life span,
    see R. Decker et al. (2014), supra n. 53, pp. 6-24. The BLS and
    others use the term ``gazelles'' to differentiate the fastest
    growing young HGFs.
    ---------------------------------------------------------------------------

    This highly disproportionate, ``up or out'' dynamism of high-growth
    firms has been substantiated by many researchers. The SBA reported that
    about 350,000 ``high impact firms''--defined as enterprises whose sales
    have at least doubled over a 4-year period and which have an employment
    growth quantifier of 2 or more over the same period--generated almost
    all net new jobs in the United States between 1994 and 2006.\51\ The
    Kauffman Foundation, a leading institute on research, data collection,
    and advocacy for entrepreneurial activity, reports that the top-
    performing one percent of firms generates roughly 40 percent of new job
    creation, and, the fastest of them all--the ``gazelles''--comprising
    less than one percent of all companies, generated roughly ten percent
    of new jobs.\52\ The same general result has been found
    internationally; the OECD reports that between three percent and six
    percent of all firms can be considered high-growth firms but about one
    percent can be considered the even more high-performing ``gazelles.''
    \53\
    ---------------------------------------------------------------------------

    \51\ See Spencer Tracy, Jr., Accelerating Job Creation in
    America: The Promise of High-Impact Companies, SBA Office of
    Advocacy (2011), pp. 1-4, available at: https://www.sba.gov/sites/default/fi...actReport.pdf; see also Acs, Zoltan,
    William Parsons, and Spencer L. Tracy, Jr, High-Impact Firms:
    Gazelles Revisited; Study prepared for the SBA, Office of Advocacy
    (2008), p. 1, available at: http://www.sba.gov/advo/research/rs328tot.pdf. The SBA high-impact cohort is about 6.3% of all firms,
    which is higher than the 2% high-growth category found in the BLS
    studies. The SBA cohort is larger because the criteria are slightly
    less restrictive and it includes older firms.
    \52\ See Dane Stangler, High-Growth Firms and the Future of the
    American Economy, Kauffman Foundation Research Series: Firm
    Formation and Economic Growth (2010), p. 2, available at: http://
    www.kauffman.org/~/media/kauffman_org/
    research%20reports%20and%20covers/2010/04/highgrowthfirmsstudy.pdf.
    \53\ David B. Audretsch, Determinants of High-Growth
    Entrepreneurship, report prepared for the OECD/DBA International
    Workshop on High-growth firms: local policies and local
    determinants, OECD, p. 2-5, available at: http://www.oecd.org/cfe/leed/Audretsch_determinants%20of%20high-growth%20firms.pdf.
    ---------------------------------------------------------------------------

    Despite the finding across a large number of studies that small new
    firms tend to exhibit an ``up or out'' dynamic in which a small number
    survive to age five to become high-growth firms or ``gazelles,'' other
    key findings that have emerged in the literature suggest that the
    growth and performance of new firms, even high-growth firms, vary
    substantially (as indicated by metrics that include labor productivity,
    profitability, revenue, and research and development intensity).\54\
    Models that can sort out various business characteristics and economic
    conditions to predict high-growth probabilities are still in nascent
    stages. Nevertheless, this rule includes threshold criteria for parole
    consideration meant to identify entrepreneurs associated with the kinds
    of promising start-up entities that appear more likely to contribute to
    American innovation, economic development, and job creation. As
    described in more detail below, businesses started and run by
    immigrants have propelled these kinds of broadly shared economic
    benefits for many years.
    ---------------------------------------------------------------------------

    \54\ See R. Decker et al (2014), supra n. 53, pp. 5-7; see also
    Davis, Steven J., R. Jason Faberman, John Haltiwanger, Ron Jarmin,
    and Javier Miranda, Business Volatility, Job Destruction, and
    Unemployment. American Economic Journal: Macroeconomics 2(2) (2010):
    259-87. Research and development intensity is typically measured as
    the ratio of research and development spending to revenue, net
    income, or overall costs.
    ---------------------------------------------------------------------------

    Broadly speaking, high-growth entrepreneurs engage in research and
    development (R&D) in order to develop and commercialize new products
    and technologies. Several studies have found that such entrepreneurs
    tend to engage in R&D spending in the first year, tend to attract
    patents and other forms of intellectual capital, and tend to attract
    venture capital financing.\55\
    ---------------------------------------------------------------------------

    \55\ See Shah, Sonali K. and Winston Smith, Sheryl and Reedy, E.
    J., Who are User Entrepreneurs? Findings on Innovation, Founder
    Characteristics, and Firm Characteristics, The Kauffman Firm Survey
    (Feb. 2012), pp. 2-5, available at: http://www.kauffman.org/~/media/
    kauffman_org/research%20reports%20and%20covers/2012/02/
    whoareuserentrepreneurs.pdf.

    ---------------------------------------------------------------------------

    [[Page 5276]]

    Immigrants have been central contributors to business ownership and
    entrepreneurship in the United States and abroad. According to OECD
    data, self-employment rates for immigrants are higher than those of the
    native-born populations in many counties, including in the United
    States.\56\ Based on the most recent data available from the U.S.
    Census Bureau, 12.9 percent of the United States population was
    foreign-born. Their rate of self-employment is about 30 percent higher
    than that of the native-born population (7.7 percent vs. 5.9 percent;
    n=1.8 million). The Census Bureau's 2012 Survey of Business Owners
    showed that 14.4 percent of U.S. firms were owned by at least one
    person not born a citizen of the United States.\57\ Two studies based
    on samples of U.S firms found slightly higher r foreign-born ownership
    rates.\58\
    ---------------------------------------------------------------------------

    \56\ OECD, Migrant Entrepreneurship in OECD Countries, prepared
    by Maria Vincenza Desiderio (OECD) and Josep Mestres-Dom[egrave]nech
    for the Working Party on Migration (2011), pp. 141-144, available
    at: http://www.oecd.org/els/mig/Part%20I...neurs_engl.pdf.
    This, and many other similar studies and analyses are based on self-
    employment rates, which are a proxy, but not a perfect measure, of
    business ownership, because some ownership structures such as
    partnerships, that could involve a foreign-born owner, are generally
    not considered to be proprietary.
    \57\ The categorization of ``foreign-born'' does not
    differentiate between lawful permanent residents and naturalized
    citizens. It also does not provide details of the firm history,
    implying that some firms owned by persons not born in the United
    States could have been founded by U.S. citizens and sold to foreign-
    born persons.
    \58\ See David M. Hart, Zoltan J. Acs, and Spencer L. Tracy,
    Jr., High-tech Immigrant Entrepreneurship in the United States.;
    report developed under a contract with the Small Business
    Administration, Office of Advocacy (2009), page 8, available at:
    https://www.sba.gov/sites/default/fi...s349tot_0.pdf; see
    also Robert W. Fairlie and Magnus Lofstrom, Immigration and
    Entrepreneurship, Institute for the Study of Labor (2013), p. 1,
    available at: http://ftp.iza.org/dp7669.pdf. The foreign born
    ownership rates for U.S. firms reported in these papers is 16% and
    18.2%, in order.
    ---------------------------------------------------------------------------

    Many high-growth firms are involved in activities classified in the
    STEM (science, technology, engineering, and math) fields. The high
    concentration of immigrant entrepreneurs in these industries has
    garnered much attention. Between 2006 and 2012, one-third of companies
    financed with venture capital that made an initial public offering had
    an immigrant founder, a sharp rise from seven percent in 1980. These
    companies have generated 66,000 jobs and $17 billion in sales.\59\ A
    survey of entrepreneurs in technology-oriented privately held companies
    with venture backing also showed about one-third were foreign born, and
    61 percent held at least one patent.\60\
    ---------------------------------------------------------------------------

    \59\ This information is found from various sources and found in
    Stuart Anderson, American Made 2.0. How Immigrant Entrepreneurs
    Continue to Contribute to the United States Economy, National
    Foundation for American Policy, sponsored by the National Venture
    Capital Association (NVCA) (2013), pp. 3-7.
    \60\ Id. at pp. 2-5.
    ---------------------------------------------------------------------------

    Further evidence points to similar findings. Between 1995 and 2005,
    25 percent of science and technology focused businesses founded in the
    United States had a foreign-born chief executive or lead technologist.
    In 2005, those companies generated $52 billion in sales revenue and
    employed 450,000 workers. In Silicon Valley, the share of immigrant-
    founded start-ups increased to 52 percent by 2005. In 2006, foreign
    nationals residing in the United States were involved (as inventors or
    co-inventors) in about 26 percent of patent applications filed that
    year. Immigrant founders of Silicon Valley firms tend to be highly
    educated, with 96 percent holding bachelor's degrees and 74 percent
    holding advanced degrees, and with three-quarters of the latter in STEM
    fields. As of 2010, according to one study, more than 40 percent of the
    Fortune 500 companies had been founded by an immigrant or the child of
    an immigrant.\61\
    ---------------------------------------------------------------------------

    \61\ Vivek Wadhwa, Foreign-Born Entrepreneurs: An Underestimated
    American Resource, Ewing Marion Kauffman Foundation (2008), pp. 2-6,
    available at: http://www.kauffman.org/~/media/kauffman_org/
    z_archive/article/2008/11/wadhwatbook09.pdf.
    ---------------------------------------------------------------------------

    To reiterate, high-growth firms tend to be new and young, and one
    of their primary contributions to the highly dynamic labor market of
    the United States has been through job creation. High-growth firms tend
    to innovate and focus on developing new products and services. The
    intense involvement of immigrant entrepreneurs in successful
    technology-driven activities suggests substantial economic
    contributions. While measuring the precise value and impact of
    innovation is difficult and still at a nascent stage in research, many
    economists believe innovation creates positive externalities and
    spillover effects that further drive economic growth.\62\
    ---------------------------------------------------------------------------

    \62\ See SMEs, Entrepreneurship and Innovation, OECD (2010), pp
    26-28, available at: http://www.oecd.org/berlin/45493007.pdf.
    ---------------------------------------------------------------------------

    Notwithstanding the research on the positive effects of high-growth
    entrepreneurship, there is some evidence of a long-term slowing in
    start-up dynamism and entrepreneurial activity in the United States;
    this trend began several decades ago, driving many economists to
    advocate for policies that attract more entrepreneurs in general.\63\
    Many business entrepreneurial advocacy centers have also advocated in
    recent years for the United States to enact a formalized pathway for
    immigrant entrepreneurs. DHS is aware of one estimate of the potential
    benefits of a theoretical start-up visa (which, as an entirely new visa
    classification, only Congress can create). A Kauffman Foundation study
    (2013) estimated that, under certain conditions, the establishment of a
    start-up visa program could lead to the creation of between 500,000 and
    1.6 million new jobs after ten years.\64\ The potential benefits of
    attracting immigrant entrepreneurs have not gone unnoticed
    internationally. Thirteen of the thirty-five nations that are part of
    the Organization of Economic Cooperation and Development (OECD) have
    enacted special immigration programs for entrepreneurs, although the
    eligibility criteria vary among them to a significant extent.\65\
    ---------------------------------------------------------------------------

    \63\ See R. Decker et al. (2014), supra n. 53, p. 16-22.
    \64\ See Dane Stangler and Jared Konczal, Give Me your
    Entrepreneurs, Your innovators; Estimating the Employment Impact of
    a Startup Visa, Ewing Marion Kauffman Foundation, (Feb. 2013), pp.
    1-3, available at: http://www.kauffman.org/~/media/kauffman_org/
    research%20reports%20and%20covers/2013/02/
    startup_visa_impact_finalsada. The estimates are based on a fixed
    pool of 75,000 startup visas for a 10-year period, in which firm
    deaths each year cycle some of visa to new entrants.
    \65\ Most programs have been enacted after 2010. A country list
    and some descriptive data can be found at Jean-Christophe Dumont,
    Investor Visas in OECD Countries, OECD Conference on Global High-
    Skilled Immigration Policy, The National Academies Board on Science,
    Technology and Economic Policy (2014), available at: http://sites.nationalacademies.org/c.../documents/Web page/
    pga_152202.pdf.
    ---------------------------------------------------------------------------

    3. Population of Entrepreneurs Potentially Eligible
    DHS cannot precisely predict the volume of new businesses that will
    start in the United States due to this rule. DHS has instead examined
    available data to provide a broad estimate of the population of
    individual entrepreneurs who may be eligible to request parole
    consideration under this rule. Given limits on DHS's information about
    such entrepreneurs, DHS does not know how many people within the
    estimated eligible population will actually seek such consideration;
    the estimates contained in this section represent an approximation to
    the size of the eligible population. DHS has estimated the population
    of entrepreneurs potentially eligible for parole under this rule based
    on two sub-groups: (1) Foreign individuals who seek to come to the
    United States to start a new business with financial backing from a
    qualified U.S. investor; and (2) foreign individuals who seek to come
    to the United States to start a new business as recipients of U.S.
    funded and awarded

    [[Page 5277]]

    research grants and who intend to conduct the concomitant research in
    the United States. DHS assumes that each member of the eligible
    population will start a business and that the general criterion for
    investment from a qualified investor (e.g., venture capital firms,
    angel investors, or accelerators or incubators) be set at $250,000,
    while for government grants or awards the general criterion will be
    $100,000. Based on these amounts, DHS analyzed various past endeavors
    for the potential sources of funds. DHS estimates that approximately
    2,940 foreign nationals annually could be eligible to apply for parole
    under this rule. Table 1 summarizes the analysis by source of funds.

    Table 1--Number of Entrepreneurs Potentially Eligible
    ------------------------------------------------------------------------
    Annual
    Sub-group eligibility
    ------------------------------------------------------------------------
    New firms funded with investment capital................ 2,105
    New firms funded with U.S. grants or awards............. 835
    ---------------
    Total............................................... 2,940
    ------------------------------------------------------------------------

    DHS has no way of predicting with certainty the actual number of
    foreign nationals who will seek parole under this rule over time, as
    the size of the eligible population could change significantly. DHS
    acknowledges that the estimate of eligible individuals annually is an
    approximation based on past foreign ownership and start-up capital
    amounts. The analysis utilized to estimate the potential eligible
    population is also based implicitly on assumptions that: (1) The rule
    will not significantly change the frequency of U.S. funded grant
    applications from international researchers; and (2) that the rule will
    not significantly affect the market for international entrepreneurs and
    the market for the types of investment structures the rule will
    involve. Based on these assumptions and the data limitations, DHS
    projects that for the first full year that the rule will be effective,
    annual eligibility will be approximately 2,940.\66\ DHS projects that
    this number will hold steady for the second year as well. The next
    section provides key data and analytical approaches utilized to arrive
    at the estimates of eligible individuals. DHS first considers volume
    estimates of eligible individuals based on official U.S. data. The
    resulting estimates based on official data are those utilized for the
    cost projections of the rule. Due to particular constraints in the
    data, DHS follows with an alternative method of volume estimation of
    eligible individuals that adds robustness to the official estimate.
    ---------------------------------------------------------------------------

    \66\ DHS emphasizes that the total is a broad estimate, as the
    Department has no means to determine the demand for entrepreneurial
    parole, changes in the eligible population that the rule may cause,
    time-variant possibilities, and application preferences. These
    conditions could change, if, for example, some foreign researchers
    see parole as attractive and apply for federally funded grants that
    they otherwise might not have applied for in the absence of the
    rule. In addition, volume estimates should be interpreted to apply
    to only initial applications, not considerations for re-parole at
    some future point in time. Lastly, the market for the types of
    investments involved, such as venture capital, are fluid and
    becoming more global in scope. DHS has no means to determine how the
    evolution of these investment markets will affect, or be affected
    by, the rule.
    ---------------------------------------------------------------------------

    Volume Projections Data and Methodology
    A. Grants
    Because U.S.-funded research grants may be a qualifying investment
    under this rule, DHS obtained publicly available data on federally
    funded grants for fiscal years 2013-2015.\67\ Although numerous
    agencies within the Federal Government award grants to foreign-born
    individuals, most are humanitarian or development focused.\68\ For this
    reason DHS parsed the very large data set comprising 1.7 million
    records to obtain a viable analytical cohort. First, the records were
    filtered to capture Federal Government agencies that award grants to
    both United States and foreign-born recipients. Secondly, the records
    were sorted to only include the Federal Government agencies that award
    grants focused on ``projects,'' thereby excluding block and assistance
    grants.\69\ The foreign-born cohort used for the eligibility
    projections excluded grants made to recipients in U.S. territories, as
    such recipients may be subject to special considerations outside the
    parole parameters.\70\ DHS also excluded grant amounts recorded as
    negative, zero, and trivial amounts of less than $1,000--such values
    were recorded if grants were rescinded or for some other reason not
    ultimately funded. On average, 138,447 grants comprised the annual
    resulting analytical cohort derived from the above filtering
    procedures. Of that total, a small portion, 2,043 grants, or 1.5
    percent, were awarded to foreign-born individuals. Having determined a
    reasonable eligibility threshold of $100,000, DHS proceeded to the next
    step, to determine the potential annual eligible population of grant-
    sourced researchers. Over the period of analysis, 41 percent of the
    Federal grants awarded to foreign recipients equaled or surpassed the
    $100,000 benchmark, for an average of 835 annually.
    ---------------------------------------------------------------------------

    \67\ The data were obtained from USASpending.gov: https://www.usaspending.gov/Pages/Default.aspx. From the homepage, the data
    can be accessed from the linked ``data download'' section. The files
    were obtained on April 20, 2015.
    \68\ It is certainly the case that U.S. State governments and
    other governmental entities issue research grants that foreign
    recipients could potentially utilize for parole eligibility.
    However, DHS is not aware of any database that collects and provides
    such data publicly.
    \69\ The Federal entities that awarded scientific focused
    research to foreign recipients were: Agricultural Resource Service,
    National Institutes of Health, Centers for Disease Control and
    Prevention, Food and Drug Administration, Department of Defense,
    National Aeronautics and Space Administration, National Oceanic and
    Atmospheric Administration, National Institute of Standards and
    Technology, and National Science Foundation. The U.S. Department of
    State and the Agency for International Development (USAID) were
    excluded from the analysis.
    \70\ There is a particular way in which the data germane to
    foreign grants were parsed and analyzed. There are two possible
    foreign indicators listed for each grant. One is the ``principal
    place'' involving the research and the other is the ``recipient
    country.'' The incumbent volume projections are based on the latter
    because this indicator generally implies that the grant was made to
    a person or institution outside the United States. The former is not
    used because this indicator could apply to grants awarded to U.S. or
    foreign persons in order to conduct the ensuing research outside the
    United States. Implicit in this analysis is that persons awarded
    U.S.-funded grants that are overseas could conduct their research
    and innovation in the United States, and are not otherwise precluded
    from doing so, even if the focus of such research is in a foreign
    country.
    ---------------------------------------------------------------------------

    B. Investment Capital
    To estimate the number of potential new entrepreneurial start-ups,
    DHS obtained and analyzed data from the BLS and the Census Bureau. From
    the BLS Business Employment Dynamics (BED) data suite, DHS obtained the
    number of private establishments aged 1 year or less for nine broad
    sectors likely to be involved in innovative activity, in order to focus
    on entrants.\71\ Although a reasonable proxy, the number of
    establishments aged 1 year or less is not a perfect measure of firm
    start-ups (births). The chosen metric may

    [[Page 5278]]

    overstate births, by including expansions and new franchises of
    existing businesses. Conversely, it may understate the actual number of
    start-ups, because some fraction of firms does not survive the first
    year (the data are tabulated in March of the respective year such that
    the establishments aged 1 year and less are those that opened within
    the previous year but remained in business as of March of the following
    year), and those that opened in the previous year and were still in
    business but had not reached 2 years of age. DHS utilized the relevant
    figure for March 2015, because the latter is the most recent figure
    reported in the BED dataset.
    ---------------------------------------------------------------------------

    \71\ The BLS data is found at http://www.bls.gov/bdm/bdmage.htm.
    DHS utilized the ``Establishment age and survival BED data for
    nation by major industry'' set and figures from Table 5, ``Number of
    private sector establishments by age,'' for the nine major sectors
    shown in Table 2. The BLS does provide figures on firm births that
    could be used in the present analysis. However, DHS chose
    establishment age data because it is broken down in a way that
    corresponds precisely to the innovating sectors, discussed below.
    The firm birth data is not categorized in the exact same manner. The
    nine major sectors were chosen to envelope the approximately 430
    individual activities that DHS considers to involve ``science,
    technology, engineering, and math'' (STEM). The full list based on
    the 2012 update can be found at: http://www.ice.gov/sites/default/files/documents/Document/2014/stem-list.pdf.
    ---------------------------------------------------------------------------

    For each sector, DHS obtained the corresponding share of firms
    owned by a person ``not born a citizen of the United States'' from the
    Census Bureau's Survey of Business Owners data set.72 73 For
    brevity, we utilize the term ``foreign'' here to describe such firms.
    The foreign share was obtained by dividing the number of foreign-owned
    private firms in a sector by the total number of reporting firms in the
    same sector. This share applies to firms that have a least one owner
    who was not born in the United States but does not differentiate
    between various types of ownership structures. The figure for new firms
    obtained from the BLS BED data was multiplied first by the foreign
    share to generate an estimate of firms per sector started by a person
    not born in the United States.
    ---------------------------------------------------------------------------

    \72\ The Census SBO data are found at: http://www.census.gov/data/tables/20...teristics.html. The foreign
    ownership figures per sector are found under ``Characteristics of
    Business owners,'' Table SB1200CSBO11: ``Statistics for Owners of
    Respondent Firms by Whether the Owner Was Born in the United States
    by Gender, Ethnicity, Race, and Veteran Status for the U.S.'' and
    the startup capital data are found under Characteristics of
    Businesses, Table SB1200CSB16: ``Statistics for All United States
    Firms by Total Amount of Capital Used to Start or Acquire the
    Business by Industry, Gender, Ethnicity, Race, and Veteran Status
    for the United States: 2007.'' The foreign ownership share of firms
    is provided in the table and thus did not need to be calculated by
    DHS. The SBO data are part of the 2012 survey for which data was
    released publicly between February and June 2016.
    \73\ A possible source of upward bias in the foreign ownership
    share and hence the estimate of eligible entrepreneurs is that this
    share does not differentiate between foreign owners who came to the
    United States to open a business and those who acquired one after
    being in the United States for some period of time (e.g., lawful
    permanent residents or naturalized citizens). A general finding
    among the literature on this topic is that many foreign-born
    business owners were driven to start a business by ``push'' factors
    in the labor market after arrival in the United States. DHS does not
    have a means to parse out the ownership rate in a more granular way
    to account for such differences.
    ---------------------------------------------------------------------------

    Next, DHS attempted to calculate how many of the firms were started
    with at least $250,000, the minimum investment threshold that the rule
    sets. The SBO data provides ranges of such startup capital amounts but
    DHS could not conduct a precise estimate because the data do not
    provide a category bound by the threshold minimum. In fact, the
    encompassing tranche is very large, from $249,500 to $1 million in
    range. The SBO does not provide actual cohort data or other information
    from which DHS could evaluate the distribution and, therefore, DHS has
    no way of ascertaining how many firms in this large range will occupy
    the $250,000 to $1 million segment. As a result, DHS relied on the
    share of firms in this tranche and the additional tranches over
    $1,000,000 relative to the share of all firms reporting for the sector,
    and recognizes that the volume projection is likely larger than is
    realistic. An additional assumption is that the startup threshold is
    the same for businesses with native and foreign-born founders. The
    relevant data and estimates per sector are shown in Table 2.

    Table 2--Summary of Entrepreneur Estimates
    ----------------------------------------------------------------------------------------------------------------
    Foreign share Start-up Annual
    Sector New firms (%) threshold (%) eligible
    ----------------------------------------------------------------------------------------------------------------
    Agriculture..................................... 10,182 4.9 2.5 12
    Utilities....................................... 1,204 10.8 5.5 7
    Manufacturing................................... 29,883 11.0 5.4 178
    Information..................................... 22,855 11.9 2.0 55
    Professional Services *......................... 165,425 12.8 1.2 248
    Management...................................... 7,334 7.3 20.2 108
    Waste Services.................................. 66,161 16.4 0.9 94
    Education....................................... 15,226 11.9 0.7 13
    Health Care..................................... 210,977 18.0 3.7 1,391
    ---------------------------------------------------------------
    Total....................................... .............. .............. .............. 2,105
    ----------------------------------------------------------------------------------------------------------------
    * Abbreviation for ``Professional, Scientific, and Technical Services''.

    As is discussed in the preamble, DHS has revised two substantive
    components of the eligibility criteria for this final rule. Foremost,
    the general investment amount requirement has been lowered from
    $345,000 to $250,000. DHS believes that the volume estimate of
    entrepreneurs based on investment capital will be higher than the 2,105
    presented above but cannot make a determination of exactly how much
    higher. The reason is that the lower investment amount will allow some
    firms to be created that otherwise would not at the higher amount
    proposed initially, but the Census Bureau capital size bin relevant to
    the level proposed is the $249,500 to $1 million in range, which
    includes both figures. Because DHS does not have data on the
    distribution of amounts within this range, the entire bin was included
    in the proposed estimates and is retained in the final estimates.
    However, as is described below, DHS has conducted an alternative method
    of estimation--to include updates from the initial proposal based on
    new information and data--that compares very closely to the estimated
    total volume of 2,940. Specifically, an alternative estimate of total
    volume annually is 2,920.
    C. An Alternative Estimate of Entrepreneurs Based on Investment
    Structures
    DHS recognizes the imperfections in estimating the potential
    population of eligible entrepreneurs based on extrapolating past
    conditions of foreign ownership rates and capital thresholds. The main
    benefit of this method is that it is based on official data. A main
    limitation is that it assumes that the annual crop of firms created are
    entrepreneurial and the types of firms covered by the parole process in
    the rule. In practice, some, but not all, will

    [[Page 5279]]

    be innovators, even though the present analysis focuses on the sectors
    of the economy linked to STEM activity (DHS is not aware of any methods
    or data that can allocate a research-innovation share of firms to each
    sector). A second limitation is that the DHS method of measuring new
    firms in the context of the rule is imprecise. The final rule revised
    the definition of ``start-up entity'' in 8 CFR 212.19(a)(2) to include
    firms that were formed up to 5 years prior to the filing of the
    application for parole, compared to three years as proposed in the
    NPRM. However, the BLS cohort of new firms utilized for the volume
    projections are 1 year of age or less, not five or even three years,
    and is thus a smaller estimate of the number of new firms that could be
    eligible. This limitation cannot be overcome because of the manner in
    which the survival cohorts are presented.\74\ Because the volume
    projections are derived from information obtained from official
    sources--the BLS and Census Bureau--DHS retains them for purposes of
    the costs and volume estimates of the rule. DHS believes, however, that
    an alternative method of estimation will inform readers and strengthen
    the regulatory analysis by providing a viable comparison to the
    official projections. In this alternative approach, DHS focuses on
    business accelerators and incubators (described together as
    ``accelerators'' for brevity). By analyzing the foreign component of
    these structures, data permitting, an alternative estimate of
    entrepreneurs can be obtained for comparison purposes.
    ---------------------------------------------------------------------------

    \74\ Specifically, the BLS BED provides the number of firms
    surviving to a specific age and below. For example, the five year
    cohort includes all firms started within five years surviving up to
    that point, and so on for younger cohorts. However, the data does
    not count the number of firms within each survival cohort by their
    true age. Hence, the five year survivals do not include firms that
    started up and may have died after three years that could have been
    eligible at one time. Therefore, the five year survival cohort
    significantly undercounts the number of firms that will potentially
    have been considered new in the context of the final rule.
    Conversely, adding up the survival cohorts to a point, say year
    five, will significantly over-count the number of firms considered
    new in the context of the final rule. The reason is that a firm that
    survived four years and went on to age five will be included in both
    the five and four year cohort, not to mention the younger ones.
    Thus, adding the two (age four and five) cohorts together would
    double count the survivor. This problem is less onerous for firms
    aged one or zero.
    ---------------------------------------------------------------------------

    DHS obtained publicly available information from Seed-DB, which
    provides data on U.S. accelerators collected from industry associations
    and fee-based data providers such as Crunchbase, which is a large data
    provider for venture capital, angel investors, and accelerators.\75\
    From the Seed-DB Web site DHS utilized the link to ``firms that have
    exited'' to collect the cohort of firms that underwent accelerators and
    then exited via an acquisition or public offering. Next, DHS parsed the
    data to capture firms that reported total funding, exit value, and were
    not recorded as ``dead'' (last accessed on Nov. 7, 2016). The parsing
    described above yielded a cohort of 89 firms. DHS followed the Seed-DB
    links to Crunchbase for each firm and extracted the seed round,
    recording its value.\76\ Analysis of the investment rounds reveals that
    the median is $250,000. Having determined a median seed round size from
    the data, DHS next attempted to estimate a foreign share of accelerated
    firms. The exit cohort from which the median was calculated did not
    provide such information, hence DHS turned to the Seed-DB data suite
    that lists the total number of companies incubated for each accelerator
    and the countries that the companies were located in. Since there is
    wide variation in the number of companies per incubator, ranging from 1
    to over a thousand, DHS grouped the incubators by country and then
    weighted each one for its share of total companies. The resulting
    weighted average indicates that one quarter of incubated companies were
    foreign.\77\ Having determined a median seed round and a foreign share
    estimate, the final point required is the number of firms to apply
    these figures to. Based on the most recent data from the Center for
    Venture Research, the 2013-2015 annual average for angel financed firms
    in the seed and startup phase was 33 percent, which equals 23,336 firms
    annually. Multiplying this average number of firms by 0.25 to capture
    the foreign share and then by 0.5 to reflect the median and also the
    investment level DHS has set yields an annual estimate of 2,920.
    ---------------------------------------------------------------------------

    \75\ The Seed-DB information is found at www.seed-db.com/.
    \76\ For most of the firms in the exit cohort, the initial round
    of investment date-wise was also the smallest round in terms of
    value and labeled as the ``seed'' or ``angel'' round. For about 10
    percent of the firms however, determining which round to use for the
    analysis was not straightforward and DHS had to utilize some
    discretion. For example, for some firms the seed round was listed
    after other rounds, such as venture capital or Series A rounds. For
    others, the seed round was not the smallest round recorded. DHS does
    not know why these anomalies are present but proceeded to choose the
    ``seed round'' regardless of its dating or amount. The only
    exception was in the few cases in which the seed round post-dated
    other rounds and was larger in amount. In these few cases the
    initial round was chosen, regardless of what investment type it was.
    \77\ This foreign share found by DHS in the analysis corresponds
    strongly to a finding in a study of high technology firms that found
    that 24 percent of such firms were founded by a foreign born person.
    See America's New Immigrant Entrepreneurs, Vivek Wadhwa, AnnaLee
    Saxenian, Ben Rissing, and Gary Gereffi, available at: http://
    people.ischool.berkeley.edu/~anno/Papers/
    Americas_new_immigrant_entrepreneurs_I.pdf.
    ---------------------------------------------------------------------------

    This estimate compares well to the official total volume estimate
    of 2,940. The accelerator data captures seed rounds that involve
    venture capital, angel, accelerator investments, and grants, which is
    why it is compared to the total volume estimate.
    D. Potential Variability in the Volume Projections
    This section discusses several potential cohorts involving
    entrepreneurial activity that is difficult to estimate.
    In light of the potential benefits to the U.S. economy and job
    creation, DHS is proposing this rule to provide a mechanism that,
    consistent with the requirements of the INA, encourages international
    entrepreneurs described herein to form and create innovative firms in
    the United States. In 2011, DHS began outreach and stood up the
    Entrepreneurs in Residence initiative to try to encourage
    entrepreneurship among foreign nationals.\78\ DHS began tracking the
    number of foreign nationals who indicated interest in starting up an
    entrepreneurial endeavor at some point during their admission as an H-
    1B nonimmigrant. Over four fiscal years (FY 2010-2013), an average of
    77 foreign nationals indicated such interest. In light of the
    relatively small numbers of foreign nationals who indicated their
    entrepreneurial intentions, DHS believes that considering parole
    requests under this rule will promote further innovation and other
    economic benefits in addition to those created by existing programs and
    policies used by foreign nationals to pursue high-growth
    entrepreneurial activity in the United States. When the rule is
    effective, there could be some small substitution effects as some
    portion of this cohort could switch to seeking parole instead of
    relying on other existing nonimmigrant programs and policies. DHS,
    however, does not believe such substitution will occur on a large scale
    because the ability to be admitted to the United States as a
    nonimmigrant offers materially more benefits and protections than
    parole.
    ---------------------------------------------------------------------------

    \78\ Source: ``USCIS Announces `Entrepreneurs in Residence
    Initiative,' '' available at: http://www.uscis.gov/news/public-rel...ce-initiative; see also http://www.uscis.gov/eir/visa-guide/entrepreneur-visa-guide.
    ---------------------------------------------------------------------------

    In addition, the rule lists a number of ancillary conditions for
    eligibility--and conversely a number of conditions that

    [[Page 5280]]

    will leave individuals unlikely or unable to be paroled into the United
    States (or continue to be paroled in the country). Because ancillary
    conditions can be considered for eligibility, the actual volume may be
    smaller than the estimates herein. Two examples are that, under the
    rule, applicants must maintain household income greater than 400
    percent of the poverty line and that the qualifying start-up capital
    cannot come from family members. The volume estimates presented in this
    analysis assume all ancillary eligibility conditions are met.
    Finally, two potential elements of the eligible population are
    considered. First, as alluded to in the summary, the volume estimates
    and ensuing cost estimates assume one individual owner for each new
    firm; under the rule, DHS will allow up to three individuals per firm
    to seek parole but does not attempt to estimate how many of the
    startups could have more than one owner. Second, the volume estimate
    for grants is based on Federal awards only. DHS will consider
    eligibility based on State or local grants and awards, including those
    from State or local Economic Development Corporations (EDCs). However,
    unlike in the case of Federal awards, there is not a database capturing
    State and local grants or the transmission mechanisms through which
    some Federal grants are distributed to other entities, such as EDCs,
    and as such DHS was unable to estimate the number of entrepreneurs
    potentially eligible for parole as a result of receiving State and
    local grants.
    4. Costs
    A. Principal Filer Costs
    The rule will permit certain foreign nationals to apply for a 30-
    month (2.5-year) initial period of parole into the United States
    provided they meet the eligibility criteria. Those who seek such parole
    into the United States will face the costs associated with the
    application, which involve a $1,200 application fee plus other costs,
    detailed below. The costs will stem from filing fees and the
    opportunity costs of time associated with filing the Application for
    Entrepreneur Parole (Form I-941).
    The filing fee for the Form I-941 application is $1,200. The fee is
    set at a level intended to recover the anticipated processing costs to
    DHS.\79\ In addition, DHS is proposing that applicants for parole as an
    entrepreneur submit biometrics and incur the $85 biometric services
    fee. Because entrepreneurs could start firms in any number of
    occupations, DHS believes it is appropriate to utilize the mean hourly
    wage for all occupations, which is $22.71.\80\ In order to anticipate
    the full opportunity cost to petitioners, DHS multiplied the average
    hourly U.S. wage rate by 1.46 to account for the full cost of employee
    benefits such as paid leave, insurance, and retirement, for a total of
    $33.16 per hour.
    ---------------------------------------------------------------------------

    \79\ USCIS calculates its fees to recover the full cost of USCIS
    operations, including meeting national security, customer service,
    and adjudicative processing goals. As with other fees, USCIS uses
    Activity Based Costing (ABC) to assign costs to specific benefit
    requests. This model uses completion rates (actual or estimated
    depending on whether the benefit type is already being adjudicated)
    to calculate a fee or fee adjustment for a benefit type. A
    completion rate reflects an average time an adjudicator spends
    actually working on a case but does not include ``queue'' or wait
    times. Because parole under this rule has not yet been implemented,
    the completion rate used is based on a 4-hour estimate provided by
    USCIS' subject matter experts. At this time, USCIS has estimated
    that 30 additional staff will be required to satisfy the forecasted
    workload associated with this rule. However, USCIS requires
    adjudicators to report actual adjudication hours and case
    completions by benefit type. This reporting will occur after this
    rule is implemented. Adjudication hours will be divided by the
    number of completions for the same time period to determine the
    actual average completion rate. This rate will be used in future fee
    adjustments and will help determine future staffing allocations
    necessary to handle the projected workload for parole under this
    rule.
    \80\ Please see U.S. Department of Labor, Bureau of Labor
    Statistics, Occupational Employment Statistics program, National
    Occupational Employment and Wage Estimates, United States (May
    2014), available at: http://www.bls.gov/oes/2014/may/oes_nat.htm.
    ---------------------------------------------------------------------------

    DHS estimates that the application will take 4.7 hours to complete.
    After DHS receives the application and fees, if the applicant is
    physically present in the United States, USCIS will send the applicant
    a notice scheduling him or her to visit a USCIS Application Support
    Center (ASC) for biometrics collection. Along with the $85 biometric
    services fee, the applicant will incur the following costs to comply
    with the biometrics submission requirement: the opportunity cost of
    traveling to an ASC, the mileage cost of traveling to an ASC, and the
    opportunity cost of time for submitting his or her biometrics. While
    travel times and distances vary, DHS estimates that an applicant's
    average roundtrip distance to an ASC is 50 miles, and that the average
    time for that trip is 2.5 hours. DHS estimates that an applicant waits
    an average of 1.17 hours for service and to have his or her biometrics
    collected at an ASC, adding up to a total biometrics-related time
    burden of 3.67 hours.\81\ By applying the $33.16 hourly time value for
    applicants to the total biometrics-related time burden, DHS finds that
    the opportunity cost for a principal applicant to travel to and from an
    ASC, and to submit biometrics, will total $121.68.\82\ In addition to
    the opportunity cost of providing biometrics, applicants will
    experience travel costs related to biometrics collection. The cost of
    such travel will equal $28.75 per trip, based on the 50-mile roundtrip
    distance to an ASC and the General Services Administration's (GSA)
    travel rate of $0.575 per mile.\83\ DHS assumes that each individual
    will travel independently to an ASC to submit his or her biometrics,
    meaning that this rule will impose a time cost on each of these
    applicants.
    ---------------------------------------------------------------------------

    \81\ Foreign nationals who submit their applications from
    outside the United States will still be required to pay the $85
    biometric processing fee and travel to a USCIS office abroad, if
    available, or a U.S. embassy or consulate office for biometric
    processing at the time of travel document issuance. Due to data
    limitations, and to capture general impacts of the rule, DHS has
    estimated costs of submitting biometrics under the assumption that
    all applicants are traveling to an ASC in the United States.
    \82\ Calculation: $33.16 * 3.67 hours = $121.68.
    \83\ Calculation: 50 miles multiplied by $0.575 per mile equals
    $28.75. See 79 FR 78437 (Dec. 30, 2014) for GSA mileage rate.
    ---------------------------------------------------------------------------

    DHS estimates that each principal parole applicant will incur the
    following costs: $1,285 in filing fees to cover the processing costs
    for the application and biometrics; $306.27 after summing the monetized
    cost of travel to submit biometrics, the total opportunity costs of
    time of the initial applications, biometrics, and estimated travel
    costs, resulting in a total cost of $1,591.27 per application, rounded
    to $1,591.\84\ If DHS receives 2,940 applications from persons eligible
    to apply, DHS anticipates that such applications will result in annual
    filing fee transfers of $3,777,900 (undiscounted), which comprise the
    application fee and cost of submitting biometrics, and opportunity and
    other burden costs of $900,436 for a total annual cost of $4,678,366.
    Any subsequent renewal of the parole period will result in costs
    similar to those previously discussed, with the exceptions of travel
    costs, since the applicant will not be required to depart the United
    States and re-enter. Similarly, the same costs will result for material
    changes requiring the filing of amended applications, with the
    exception of the travel costs noted above and costs associated with
    biometrics collections, including the time and travel to an ASC.
    ---------------------------------------------------------------------------

    \84\ Calculation: $1,285 + 306; $1,285 is the sum of the direct
    cost of the $1,200 filing fee and the $85 cost of biometrics. The
    $306(rounded) figure is obtained by adding the cost of travel
    ($28.75) plus the total opportunity cost of $277, the latter of
    which is the product of the total time burden (8.37 hours) and the
    average burdened hourly wage ($33.16).

    ---------------------------------------------------------------------------

    [[Page 5281]]

    B. Dependent Spouses and Children
    The rule will require all dependent family members (spouses and
    children) accompanying or joining the entrepreneur to file an
    Application for Travel Document (Form I-131), and will require all
    spouses and children 14 years of age through age 79 to submit
    biometrics.\85\ Those spouses and children will face the costs
    associated with filing the application and submitting biometrics. DHS
    recognizes that many dependent spouses and children do not currently
    participate in the U.S. labor market, and as a result, are not
    represented in national average wage calculations. In order to provide
    a reasonable proxy of time valuation, DHS has to assume some value of
    time above zero and therefore uses an hourly cost burdened minimum wage
    rate of $10.59 to estimate the opportunity cost of time for dependent
    spouses. The value of $10.59 per hour represents the Federal minimum
    wage with an upward adjustment for benefits.\86\ The value of $10.59
    per hour is consistent with other DHS rulemakings when estimating time
    burden costs for those who are not authorized to work.\87\
    ---------------------------------------------------------------------------

    \85\ Note: If a child under the age of 14 requires a travel
    document, he or she will need to appear for biometrics by traveling
    to an ASC, but will not be required to pay a biometrics fee.
    \86\ U.S. Department of Labor, Wage and Hour Division. The
    minimum wage in effect as of July 24, 2009. Available at http://www.dol.gov/dol/topic/wages/minimumwage.htm. The calculation for
    total employer costs for employee compensation for dependent spouses
    and children of principals with an approved Form I-140: $7.25 per
    hour x 1.46 = $10.59 per hour.
    \87\ See ``Employment Authorization for Certain H-4 Dependent
    Spouses; Final rule,'' 80 FR 10284 (Feb. 25, 2015); and
    ``Provisional and Unlawful Presence Waivers of Inadmissibility for
    Certain Immediate Relatives; Final Rule,'' 78 FR 536, 572 (Jan. 3,
    2013).
    ---------------------------------------------------------------------------

    DHS will require dependents of parole applicants (spouses and
    children of the parole applicant) to file an Application for Travel
    Document (Form I-131). There is a $575 filing fee associated with the
    Form I-131 application, and DHS estimates it will take 3.56 hours to
    complete each submission. In addition to filing the Form I-131
    application, each dependent spouse and child 14 years of age and over
    will be required to submit biometric information (fingerprints,
    photograph, and signature) by attending a biometrics services
    appointment at a designated USCIS Application Support Center (ASC). The
    biometrics processing fee is $85.00 per applicant. In addition to the
    $85 biometrics services fee, the applicant will incur the following
    costs to comply with the biometrics submission requirement: the
    opportunity and mileage costs of traveling to an ASC, and the
    opportunity cost of submitting his or her biometrics. While travel
    times and distances vary, DHS estimates that an applicant's average
    roundtrip distance to an ASC is 50 miles, and that the average time for
    that trip is 2.5 hours.\88\ DHS estimates that an applicant waits an
    average of 1.17 hours for service and to have his or her biometrics
    collected at an ASC, adding up to a total biometrics-related time
    burden of 3.67 hours. In addition to the opportunity cost of providing
    biometrics, applicants will experience travel costs related to
    biometrics collection. The cost of such travel will equal $28.75 per
    trip, based on the 50-mile roundtrip distance to an ASC and the General
    Services Administration's (GSA) travel rate of $0.575 per mile.\89\ DHS
    has assumed that each applicant will travel independently to an ASC to
    submit his or her biometrics, meaning that this rule will impose a time
    cost on each of these applicants. DHS also assumed all children were
    over the age of 14 for the purposes of this analysis and, therefore,
    this cost estimate may be slightly overestimated.
    ---------------------------------------------------------------------------

    \88\ DHS has estimated travel distances and ensuing travel times
    at 2.5 hours in prior rulemakings. See, e.g., ``Employment
    Authorization for Certain H-4 Dependent Spouses; Final rule,'' 80 FR
    10284 (Feb. 25, 2015); and ``Provisional and Unlawful Presence
    Waivers of Inadmissibility for Certain Immediate Relatives; Final
    Rule,'' 78 FR 536, 572 (Jan. 3, 2013).
    \89\ See U.S. General Services Administration Web site for
    Privately Owned Vehicle (POV) Mileage Reimbursement Rates, http://www.gsa.gov/portal/content/100715 (accessed Aug. 8, 2015).
    ---------------------------------------------------------------------------

    DHS projects that approximately 3,234 dependents will be required
    to file a Form I-131 application and submit biometrics, based on the
    estimate of 2,940 principal applicants and using a multiplier for
    expected family members of 1.1.\90\ The total cost for those spouses
    and children requesting parole under this program includes the filing
    fee, biometrics processing fee, travel costs associated with biometrics
    processing, and the opportunity cost of filing the Form I-131
    application and submitting biometrics. The total time burden is 7.23
    hours. At the cost-burdened wage, the total opportunity cost is $76.53.
    Adding the $28.75 cost of travel, the total non-filing cost is
    estimated to be $105.28, and the total cost per applicant is $765.28.
    At the projection of 3,234 applicants, the non-filing cost is $340,474
    (undiscounted), and combined with filing costs of $2,134,440, the total
    estimated cost for dependents germane to the Form I-131 application is
    $2,474,914.
    ---------------------------------------------------------------------------

    \90\ The multiplier of 1.1 was obtained from DHS estimates of
    the average historical ratio of principal versus dependent
    recipients of lawful permanent resident status. DHS studies based on
    statistics obtained from office of Immigration Statistics reveal
    that multipliers for the employment preference categories EB-1, EB-
    2, and EB-3 range from 2.04 to 2.27. DHS believes that 2.1. is a
    reasonable multiplier for the estimates and utilized this multiplier
    in regulatory assessments involved in American Competitiveness in
    the Twenty-First Century Act, (AC21) provisions, specifically:
    ``Retention of EB-1, EB-2, and EB-3 Immigrant Workers and Program
    Improvements Affecting High-Skilled Nonimmigrant Workers'' (RIN
    1615-AC05), rule. Because the Form I-131 filings relevant to this
    rule do not apply to principals, only spouses and dependent
    children, DHS believes it is valid to subtract 1 from the 2.1
    multiplier to yield the final multiplier of 1.1.
    ---------------------------------------------------------------------------

    In addition, DHS is allowing independent employment authorization
    for spouses of entrepreneurs granted parole under this rule. DHS will
    permit these individuals to apply for employment authorization by
    filing a Form I-765 application. To estimate the number of potential
    persons applying for employment authorization, DHS used a simple one-
    to-one mapping of entrepreneurs to spouses to obtain 2,940 spouses, the
    same number as entrepreneur parolees.
    The current filing fee for the Form I-765 application is $410.00.
    The fee is set at a level to recover the processing costs to DHS. Based
    on the projection of 2,940 applicants, the total filing cost is
    $1,205,400 (undiscounted). DHS estimates the time burden of completing
    the Form I-765 application is 3.42 hours.\91\ At the cost-burdened
    wage, the total opportunity cost is $36.20. At the projection of 2,940
    applicants, the non-filing cost is $106,430 (undiscounted) and combined
    with filing costs of $1,205,400 the total estimated cost for spouses
    germane to the Form I-765 application is $1,311,830.
    ---------------------------------------------------------------------------

    \91\ Source: Paperwork Reduction Act (PRA) Supporting Statement
    for Form I-765 (OMB control number 1615-0040). The PRA Supporting
    Statement can be found at Question 13 on Reginfo.gov at http://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201502-1615-004.
    ---------------------------------------------------------------------------

    In addition to the filing costs, applicants for parole may face
    other costs associated with their entrepreneurial activities. These
    could include the administrative costs of starting up a business,
    applying for grants, obtaining various types of licenses and permits,
    and pursuing qualified investments. However, these costs apply to the
    entrepreneurial activity and the business activity that the applicant
    has chosen to be involved in and are not driven by the parole process
    or other governmental functions attributable to the rule itself. Hence,
    DHS does not attempt to estimate, quantify, or monetize such costs.
    Lastly, DHS recognizes that some individuals who were lawfully
    admitted in the United States in certain nonimmigrant classifications
    may seek

    [[Page 5282]]

    parole. Individuals who are present in the United States at the time
    their parole application is approved, based on admission as a
    nonimmigrant, will have to depart the United States and appear at a
    U.S. port of entry in order to be granted parole since USCIS is unable
    to grant parole to individuals who are not applicants for admission.
    See INA section 212(d)(5), 8 U.S.C. 1182(d)(5). These individuals will
    be ineligible for a change of status under section 248 of the INA, 8
    U.S.C. 1258. Such applicants will therefore bear the travel costs of
    exit and returning to a port of entry. However, because there are no
    similar programs for comparison, DHS cannot determine the demand for
    parole or substitution effects from other classifications and thus
    cannot estimate, quantify, or monetize such potential travel costs.
    Finally, because the program allows for re-parole under conditions that
    DHS has set, entrepreneurs and their spouse and children, if
    applicable, will likely face filing and opportunity costs associated
    with applying for re-parole. However, DHS has no means of estimating
    the share of the potential eligible population that will seek and be
    eligible for re-parole, hence re-parole conditions are not included in
    this analysis. In summary, DHS believes that it is possible that there
    could be some substitution into the parole program from other programs
    and such applicants and dependents will incur travel and possible other
    costs related to exit and requesting a grant of parole at a U.S. port
    of entry.
    C. Potential for Negative U.S. Labor Market Impacts
    DHS does not expect the rule to generate significant costs or
    negative consequences. Extensive review of information relevant to
    immigrant entrepreneurship indicates that while much about the impact
    of such entrepreneurship is not known, there is no reason to expect
    that substantial negative consequences, including adverse impact on
    domestic workers, are likely. The possibility that immigrant
    entrepreneurs may displace (``crowd-out'') native entrepreneurs has
    been raised by a few researchers. One study indicated that a very small
    number of native entrepreneurs were possibly displaced by immigrant
    entrepreneurs.\92\ However, because of difficulties in controlling for
    a large amount of variables related to entrepreneurship, other
    researchers have noted that this finding only raises the possibility
    that displacement could not be ruled out completely, but did not
    actually provide evidence that it had actually occurred.\93\ Another
    study, conducted by the Brookings Institution, did not find
    displacement but acknowledged that more research and refined control
    techniques, along with longitudinal data, will need to be studied
    before ruling out the possibility completely.\94\ In any event, the
    purpose of the parole rule is to foster innovation and entrepreneurial
    activities in new or very young endeavors, where the literature much
    more decisively indicates a strong potential of creating new net jobs
    for U.S. workers.
    ---------------------------------------------------------------------------

    \92\ Fairlie, R.W., and B.D. Meyer, The effect of immigration on
    native self-employment, Journal of Labor Economics 21:3 (2003): 619-
    650, available at: http://people.ucsc.edu/~rfairlie/papers/
    published/jole%202003%20-%20native%20se.pdf.
    \93\ See Magnus Lofstrom, Immigrants and Entrepreneurship,
    Public Policy Institute of California, USA, and IZA, Germany (2014),
    p. 4, available at: http://wol.iza.org/articles/immigrants-and-entrepreneurship.pdf.
    \94\ See Zoltan J. Acs and David M. Hart, Immigration and High-
    Impact, High-Tech Entrepreneurship, Brookings, Issues in
    Technological innovation (Feb. 2011), available at http://www.brookings.edu/research/papers/2011/02/immigration-hart-acs.
    ---------------------------------------------------------------------------

    DHS recognizes that the potential inclusion of spouses can incur
    labor market implications and possibly impact U.S. workers. As was
    noted in previous sections of the regulatory impact analysis, DHS did
    not attempt to assess or measure the labor market impact of the
    estimated entrepreneurs potentially eligible for parole because as
    founders of firms, these persons will not affect the labor market in
    the same way as other workers. Although spouses could have labor market
    impacts as new labor market entrants, DHS believes such potential
    impacts will be negligible. The main reason is that the size of the
    potential new cohort is very small. As of the end of 2015, there were
    an estimated 157,130,000 people in the U.S. civilian labor force.\95\
    Consequently, the estimated ``new'' available workers in the first year
    will represent approximately 0.001 percent of the overall U.S. civilian
    labor force.\96\ DHS believes this fraction is too small to have a
    significant impact on the labor market.
    ---------------------------------------------------------------------------

    \95\ See News Release, United States Department of Labor, Bureau
    of Labor Statistics, Local Area Unemployment Statistics, Regional
    and State Unemployment-2015 Annual Averages, Table 1 ``Employment
    status of the civilian non-institutional population 16 years of age
    and over by region, division, and state, 2014-15 annual averages''
    (Mar. 24, 2016), available at http://www.bls.gov/news.release/pdf/srgune.pdf.
    \96\ Source: United States Department of Labor, Bureau of Labor
    Statistics, Local Area Unemployment Statistic. Figure applies to
    seasonally adjusted level for December 2014, available at: http://data.bls.gov/timeseries/LNS11000000. Calculation for new worker
    labor force share: 1813/157,130,000.
    ---------------------------------------------------------------------------

    While the figures above apply to the general U.S. labor force, DHS
    recognizes that concentration of new labor force entrants can impact
    specific labor markets. DHS believes that any such potential impacts
    linked to this rule will be insignificant. The NVCA and other sources
    of information that DHS reviewed indicates that while the area of
    California known as Silicon Valley has traditionally been, and
    continues to be, the primary recipient geographically for technology
    startup capital, other large urban centers on the East Coast and, even
    more recently, parts of the Mid- and Mountain West have seen increased
    technology startup activity. To provide just one example of a potential
    area-specific impact, DHS considered the San Jose-San Francisco-Oakland
    (CA) Combined Statistical Area (CSA) conjoining the seven Metropolitan
    Statistical Areas (MSAs) and nine encompassed counties constituting the
    economic linkages of Silicon Valley. Based on data from the BLS, the
    population of this CSA is about 8.6 million (as of May 2014) and the
    employed population (a narrower measure of the labor market than the
    labor force) about 3.75 million. If the share of new entrants is based
    on the proportion of venture capital to the area, which is 42 percent,
    then 2,746 spousal entrants could impact the area.\97\ Assuming such
    entrants gain employment, this cohort represents just 0.02 percent of
    the employed population of the specific CSA.
    ---------------------------------------------------------------------------

    \97\ The employment figures are provided by the BLS,
    Occupational Employment Statistics (OES), found at: http://www.bls.gov/oes/current/oes_42100.htm. The population data is
    provided by the Census Bureau, which tabulates CSAs: ``Combined
    Statistical Area Totals Dataset: Population and Estimated Components
    of Change: April 1, 2010 to July 1, 2014'' (CSV), 2014 Population
    Estimates. United States Census Bureau, Population Division. March
    2015. The information on the venture capital share for the region is
    found in the NVCA 2015 yearbook, and is found in figure 8, p. 14.
    The calculation is as follows: (.42 x1813) = 761, which is then
    divided by the CSA population of 3,750,000.
    ---------------------------------------------------------------------------

    D. Government Costs
    The INA provides for the collection of fees at a level that will
    ensure recovery of the full costs of providing services, including
    administrative costs and services provided without charge to certain
    applicants and petitioners. See INA section 286(m), 8 U.S.C. 1356(m).
    DHS has established the fee for the adjudication of the Form I-941
    application based on notional application filing volumes and estimated
    resource commitments. During the biennial fee review, DHS

    [[Page 5283]]

    will examine whether the fee is sufficient to recover the full costs of
    adjudication, as required by the INA.
    5. Benefits
    As referenced previously, evidence suggests that innovation-focused
    start-ups contribute disproportionately to job creation. The rule will
    reduce entry barriers, and thus support efforts by international
    entrepreneurs to generate entrepreneurial activity in the United
    States.
    The rule is expected to generate important net benefits to the U.S.
    economy. For one, expenditures on research and development by the
    grant-based researchers that DHS has identified that could qualify for
    entrepreneur parole will generate direct and indirect jobs. In
    addition, this research-focused spending could potentially generate
    patents, intellectual property, licensing, and other intangible assets
    that can be expected to contribute to innovation and technological
    advances and spill over into other sectors of the overall economy. DHS
    acknowledges that it is extremely difficult to gauge the precise
    economic value of such assets and that peer-reviewed research in this
    area is still nascent. Despite the nascent stage of the research and
    the difficulty of measuring quantitatively the benefit of innovation
    driven by new high technology firms, a large body of research indicates
    that the innovation driven by entrepreneurs contributes directly to
    economic growth, generates important efficiencies and cost reductions
    for firms that utilize such innovation, and increases productivity and
    profitability for firms that benefit indirectly through new products
    generated by such innovation.
    Lastly, DHS believes that many of the start-up firms operated by
    international entrepreneurs during the parole period could eventually
    become high-growth firms that generate exceptionally high levels of
    economic activity and contribute disproportionately to job creation in
    the United States.

    D. Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (RFA), 5 U.S.C.
    601(6), DHS examined the impact of this rule on small entities. A small
    entity may be a small business (defined as any independently owned and
    operated business not dominant in its field that qualifies as a small
    business per the Small Business Act, 15 U.S.C. 632), a small not-for-
    profit organization, or a small governmental jurisdiction (locality
    with fewer than 50,000 people).
    In the proposed rule, DHS certified that this rule would not have a
    significant impact on a substantial number of small entities. DHS made
    this determination based on the following facts: This is not a
    mandatory rule; this rule only impacts those individual entrepreneurs
    who make the voluntary decision to apply for parole; and this rule does
    not regulate the business entities in any way. After reviewing public
    comments, including the formal letter submitted on the record by the
    U.S. Small Business Administration's Office of Advocacy (Advocacy), DHS
    maintains its certification that the rule does impose a significant
    impact on a substantial number of small entities. For a full discussion
    of the DHS response to the letter submitted by Advocacy, please see
    Section III.M.4 of this preamble.
    Individuals are not defined as a ``small entity'' by the RFA. The
    rule will not mandate that all individuals apply for parole. This rule
    provides flexibilities and options that do not currently exist for
    individuals who wish to establish or operate a start-up business in the
    United States. Importantly, the rule does not require any individuals
    or businesses, including those created by foreign nationals, to seek
    parole--either generally or as a specific condition for establishing or
    operating a business in the United States. Rather, as mentioned
    previously, this rule is intended to provide an additional flexibility
    for foreign individuals who are unable to obtain another appropriate
    nonimmigrant or immigrant classification, in order to facilitate the
    applicant's ability to oversee and grow the start-up entity. If any
    individual believes this rule imposes a significant economic impact,
    that individual could simply choose not to seek parole under the rule
    and thus incur no economic impact. As discussed previously, this rule
    imposes direct filing costs of $1,285 (which includes the $1,200
    application fee and the $85 biometrics fee), plus $194 in time-related
    opportunity costs for those individuals who do choose to apply for
    parole as entrepreneurs under the rule. This cost is relatively minor
    when considering the costs of starting up a new business and the
    capital necessary to start a business.
    Under the general term ``entrepreneur,'' DHS includes those who
    desire to form firms with investment funds from certain U.S. investors.
    For purposes of the RFA, the regulatory requirements place compliance
    costs and establish eligibility criteria for the individual requesting
    consideration for parole under this rule. DHS believes that the costs
    of application for parole will burden the individual applicant, and not
    the entrepreneurial venture (firm). This rule will not alter or change
    the normal procedure for fundraising or other start-up administrative
    costs that occur in forming a business entity. Such costs are not
    direct costs of this rule and could include, but are not limited to,
    business application fees, legal fees, and licensing that precede
    significant infusions of investment, the latter of which are primarily
    utilized for operational and capital expenses in order to produce goods
    or services.
    It is possible that some of the 2,940 estimated entrepreneurs who
    could be eligible for parole annually could involve business structures
    in which the filing fees are paid by a business entity. In the event
    that small business entities are impacted by this rule because they
    choose to pay the filing fees on behalf of an individual entrepreneur,
    DHS believes that the filing cost of $1,285 per application will be
    insignificant compared to such entities' annual gross revenues,
    potential for revenue, and other economic activity.
    For businesses that may pay the filing costs, the expected impact
    to such businesses will be small. For businesses that utilize either
    the minimum threshold of $100,000 for a qualifying government grant or
    award or $250,000 in capital investment to source the filing costs,
    such costs will constitute 1.3 percent and 0.4 percent, respectively,
    of the total capital amount. These relatively low cost proportions
    apply to those firms that only obtain the minimum investment amounts
    and have no other source of funding or revenues. In addition, DHS
    analyzed the cost impact relative to more typical RFA indices. DHS
    analysis of Census Bureau data on the smallest firms found that the
    average revenue based on sales receipts for firms with no paid
    employees is $309,000, while the average for firms with one to four
    paid employees is $411,000.\98\ The filing cost relative to these
    averages is 0.42 percent and 0.31 percent, respectively.
    ---------------------------------------------------------------------------

    \98\ The data utilized for the analysis are found in the SBO
    Table SB1200CSA09, ``Statistics for All U.S. Firms with Paid
    Employees by Industry, Gender, and Employment Size of Firm for the
    U.S. and States: 2012, 2012 Survey of Business Owners: http://census.gov/library/publicatio.../2012-sbo.html. The file
    location is: http://factfinder.census.gov/faces/t...prodType=table. The
    figures are rounded from $309,279 and $410,900, respectively.
    ---------------------------------------------------------------------------

    DHS also analyzed the average revenue for new firms. Since the rule
    defines a new firm as one that is less than five years old at the time
    the initial parole application is filed, DHS grouped private sector
    firms for the 2012 survey as those responding that the year of

    [[Page 5284]]

    establishment was either 2012, 2011, 2010, 2009, or 2008. DHS obtained
    the average revenue per firm and then weighted the average by the
    yearly proportion of firms. Based on the resulting weighted average of
    $162,000, such new firms will face a filing-cost burden of 0.8
    percent.\99\ DHS notes that there is a large difference between the
    revenue of new firms with paid employees and those without such
    employees (i.e., sole proprietors). For the latter, average revenues
    are about $34,000, and the cost burden will be 3.8 percent. However,
    because a central component of this parole program requires a
    demonstration of significant public benefit in the form of economic
    activity and job growth, DHS does not anticipate that sole proprietors
    will be eligible to participate in this program.
    ---------------------------------------------------------------------------

    \99\ The data utilized for the analysis are found in the SBO
    Table SB1200CSCB11, ``Statistics for All U.S. Firms by Year the
    Business Was Originally Established or Self-Employment Activity
    Begun by Industry, Gender, Ethnicity, Race, and Veteran Status for
    the U.S.: 2012: 2012 Survey of Business Owners: http://census.gov/library/publicatio.../2012-sbo.html. The file location is:
    http://factfinder.census.gov/faces/t...prodType=table. The average
    revenue figure is rounded from $162,293.
    ---------------------------------------------------------------------------

    In summary, DHS believes that per-applicant costs will be primarily
    incurred by the individual (which is not covered by the RFA), any
    direct cost due to this rule will be relatively minor, and these costs
    will only be borne by those who voluntarily choose to apply for parole
    under this rule. While the applicant for parole may be the owner of a
    firm that could be considered small within the definition of small
    entities established by 5 U.S.C. 601(6), DHS considers the applicants
    to be individuals at the point in time they are applying for parole,
    particularly since it is the individual and not the entity that files
    the application and it is the individual whose parole must provide a
    significant public benefit under this rule. Furthermore, even if firms
    do voluntarily decide to incur the compliance costs on behalf of the
    individual requesting consideration for parole under this rule, the
    only compliance costs those businesses will be permitted to incur will
    be the filing costs for the applications. As indicated previously,
    based on the comparison metric used, those costs are expected to be
    insignificant.
    Based on the evidence presented in this RFA section and throughout
    this preamble, DHS certifies that this rule will not have a significant
    economic impact on a substantial number of small entities.

    E. National Environmental Policy Act

    DHS Directive (Dir) 023-01 Rev. 01 establishes the procedures that
    DHS and its components use to comply with NEPA and the Council on
    Environmental Quality (CEQ) regulations for implementing NEPA. 40 CFR
    parts 1500 through 1508.
    The CEQ regulations allow federal agencies to establish, with CEQ
    review and concurrence, categories of actions (``categorical
    exclusions'') which experience has shown do not individually or
    cumulatively have a significant effect on the human environment and,
    therefore, do not require an Environmental Assessment (EA) or
    Environmental Impact Statement (EIS). 40 CFR 1507.3(b)(1)(iii), 1508.4.
    DHS Directive 023-01 Rev. 01 establishes Categorical Exclusions that
    DHS has found to have no such effect. Dir. 023-01 Rev. 01 Appendix A
    Table 1. For an action to be categorically excluded, DHS Directive 023-
    01 Rev. 01 requires the action to satisfy each of the following three
    conditions: (1) The entire action clearly fits within one or more of
    the Categorical Exclusions; (2) the action is not a piece of a larger
    action; and (3) no extraordinary circumstances exist that create the
    potential for a significant environmental effect. Dir. 023-01 Rev. 01
    section V.B (1)-(3).
    DHS analyzed this action and does not consider it to significantly
    affect the quality of the human environment. This rule provides
    criteria and procedures for applying the Secretary's existing statutory
    parole authority to entrepreneurs in a manner to assure consistency in
    case-by-case adjudications. DHS has determined that this rule does not
    individually or cumulatively have a significant effect on the human
    environment because it fits within two categorical exclusions under DHS
    Directive 023- 01 Rev. 01, Appendix A, Table 1. Specifically, the rule
    fits within Categorical Exclusion number A3(a) for rules strictly of an
    administrative or procedural nature and A3(d) for rules that interpret
    or amend an existing regulation without changing its environmental
    effect.
    This rule is not part of a larger action and presents no
    extraordinary circumstances creating the potential for significant
    environmental effects. Fewer than 3,000 individuals, an insignificant
    number in the context of the population of the United States, are
    projected to receive parole through this program. Furthermore, any
    ventures will be governed by local, state and federal laws and
    regulations, including those protecting the human health and the
    environment. Therefore, this rule is categorically excluded from
    further NEPA review.

    F. Executive Order 13132

    This rule will not have substantial direct effects on the States,
    on the relationship between the National Government and the States, or
    on the distribution of power and responsibilities among the various
    levels of government. Therefore, in accordance with section 6 of
    Executive Order 13132, it is determined that this rule does not have
    sufficient federalism implications to warrant the preparation of a
    federalism summary impact statement.

    G. Executive Order 12988

    This rule meets the applicable standards set forth in sections 3(a)
    and 3(b)(2) of Executive Order 12988.

    H. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13,
    all Departments are required to submit to the Office of Management and
    Budget (OMB), for review and approval, any reporting requirements
    inherent in a rule. See Public Law 104-13, 109 Stat. 163 (May 22,
    1995). This final rule involves a new information collection and makes
    revisions to the existing information collections as follows:
    Overview of Information Collection, Application for Entrepreneur
    Parole, Form I-941
    This final rule requires that an applicant requesting entrepreneur
    parole complete an Application for Entrepreneur Parole, Form I-941, and
    is considered a new information collection under the PRA. USCIS did
    receive one comment regarding the time burden of this form and, upon
    review of the work involved to review the form, gather necessary
    information to support the submission, and the time required to
    complete and submit the form, USCIS has revised the estimated hour
    burden per response to 4.7 hours.
    a. Type of information collection: New information collection.
    b. Abstract: This collection will be used by individuals who file
    an application for entrepreneur parole under INA section 212(d)(5)(A)
    (8 U.S.C. 1182(d)(5)(A)) and proposed new 8 CFR 212.19. Such
    individuals, other than those filing an application on the basis of a
    material change, are subject to biometric collection in connection with
    the filing of the application.
    c. Title of Form/Collection: Application for Entrepreneur Parole,
    Form I-941.

    [[Page 5285]]

    d. Agency form number, if any, and the applicable component of the
    Department of Homeland Security sponsoring the collection: Form I-941,
    U.S. Citizenship and Immigration Services.
    e. Affected public who will be asked or required to respond:
    Businesses and other for profit; Not-for-profit Institutions.
    f. An estimate of the total annual numbers of respondents: 2,940.
    g. Hours per response: The estimated hour per response for Form I-
    941 is 4.7 hours; the estimated hour burden per response for the
    biometric processing is 1.17 hours.
    h. Total Annual Reporting Burden: The total estimated annual hour
    burden associated with this collection is 17,258 hours.
    Overview of Information Collection, Application for Travel Document
    Form I-131, OMB Control No. 1615-0013
    DHS is revising this collection by including spouses and children
    seeking parole on the basis of an entrepreneur parolee.
    In addition to revising the form and form instructions, DHS is
    revising the estimate of total burden hours has increased due to the
    addition of this new population of Application for Travel Document,
    Form I-131, filers, and the increase of burden hours associated with
    the collection of biometrics from these applicants.
    a. Type of information collection: Revised information collection.
    b. Abstract: This collection will be used by dependents of
    individuals who file an application for entrepreneur parole under INA
    section 212(d)(5)(A) (8 U.S.C. 1182(d)(5)(A)) and proposed new 8 CFR
    212.19. Such individuals are subject to biometric collection in
    connection with the filing of the application.
    c. Title of Form/Collection: Application for Travel Document, Form
    I-131.
    d. Agency form number, if any, and the applicable component of the
    Department of Homeland Security sponsoring the collection: Application
    for Travel Document, Form I-131, U.S. Citizenship and Immigration
    Services.
    e. Affected public who will be asked or required to respond:
    Individuals or households.
    f. An estimate of the total annual numbers of respondents: 594,324.
    The total number of respondents includes the additional population
    of 3,234 individuals as estimated previously in the analysis in Section
    IV.C.
    g. Hours per response: The estimated hour per response for Form I-
    131 Supplement is 1.9 hours; the estimated hour burden per response for
    the biometric processing is 1.17 hours; the estimated hour burden per
    response for the passport-style photographs is .5 hours.
    h. Total Annual Reporting Burden: The total estimated annual hour
    burden associated with this collection is 1,372,928 hours.
    Overview of Information Collection, Employment Eligibility
    Verification, Form I-9, OMB Control No. 1615-0047
    In accordance with new 8 CFR 274a.2(b)(1)(v)(A)(5), DHS is revising
    the Employment Eligibility Verification, Form I-9, Lists of Acceptable
    Documents, List A item 5 to replace ``nonimmigrant alien'' with
    ``individual,'' to replace ``alien's nonimmigrant'' with
    ``individual,'' and to add ``or parole'' after ``status'' in List A
    item 5.b.(2). With these changes the acceptable List A document is
    described as the following: For an individual authorized to work for a
    specific employer because of his or her status or parole, a foreign
    passport and Form I-94 (or Form I-94A) that has the same name as the
    passport and has an endorsement by DHS indicating such employment-
    authorized status or parole, as long as the period of endorsement has
    not yet expired and the employment is not in conflict with the
    individual's employment-authorized status or parole. DHS is also
    updating the Lists of Acceptable Documents, List C so that the most
    current version of the certification or report of birth issued by the
    Department of State is acceptable for Form I-9.
    a. Type of information collection: Revised information collection.
    b. Abstract: This form was developed to facilitate compliance with
    section 274A of the Immigration and Nationality Act, which prohibits
    the knowing employment of unauthorized aliens. This information
    collection is necessary for employers, agricultural recruiters and
    referrers for a fee, and state employment agencies to verify the
    identity and employment authorization of individuals hired (or
    recruited or referred for a fee, if applicable) for employment in the
    United States.
    c. Title of Form/Collection: Employment Eligibility Verification.
    d. Agency form number, if any, and the applicable component of the
    Department of Homeland Security sponsoring the collection: Form I-9,
    U.S. Citizenship and Immigration Services.
    e. Affected public who will be asked or required to respond:
    Business or other for-profit; Individuals or households; State, local
    or Tribal Government.
    f. An estimate of the total annual numbers of respondents: 78
    million employers and 78 million individuals. (The total number of
    responses will be only 78 million responses. Each response involves an
    employer and an individual who is being hired.)
    g. Hours per response:
    Time Burden for Employees--20 minutes (.33 hours) total;
    Time Burden for Employers--10 minutes (.17 hours) total;
    Time Burden for Recordkeeping--5 minutes (.08 hours) total
    h. Total Annual Reporting Burden: Approximately 40,600,000 total
    annual burden hours.
    Overview of Information Collection, Application for Employment
    Authorization, Form I-765, OMB Control No. 1615-0040
    DHS is making minor revisions to the form instructions to reflect
    changes made by this final rule that allow spouses of an entrepreneur
    parolee to request employment authorization.
    a. Type of information collection: Revised information collection.
    b. Abstract: This collection will be used by individuals who file
    an application for entrepreneur parole under INA section 212(d)(5)(A)
    (8 U.S.C. 1182(d)(5)(A)) and proposed new 8 CFR 212.19. Such
    individuals are subject to biometric collection in connection with the
    filing of the application.
    This form was developed for individual aliens to request employment
    authorization and evidence of that employment authorization. The form
    is being amended to add a new class of aliens eligible to apply for
    employment authorization, specifically a spouse of an entrepreneur
    parolee described as eligible for employment authorization under this
    rule. Supporting documentation demonstrating eligibility must be filed
    with the application. The form lists examples of relevant
    documentation.
    c. Title of Form/Collection: Application for Employment
    Authorization, Form I-765.
    d. Agency form number, if any, and the applicable component of the
    Department of Homeland Security sponsoring the collection: Form I-765,
    U.S. Citizenship and Immigration Services.
    e. Affected public who will be asked or required to respond:
    Individuals or households.

    [[Page 5286]]

    f. An estimate of the total annual numbers of respondents:
    2,139,523.
    This total represents the aggregate estimate for this information
    collection, to include the additional estimate of 2,940 respondents
    under this rule.
    g. Hours per response: The estimated hour per response for Form I-
    765 is 3.42 hours; the estimated hour burden per response for biometric
    processing is 1.17 hours; the estimated hour burden per response for
    Form I-765 WS is .5 hours; the estimated hour burden per response for
    passport-style photographs is .5 hours.
    h. Total Annual Reporting Burden: The total estimated annual hour
    burden associated with this collection is 8,985,859 hours.

    Regulatory Amendments

    DHS adopted most of the proposed regulatory amendments without
    change.

    List of Subjects

    8 CFR Part 103

    Administrative practice and procedure, Authority delegations
    (Government agencies), Freedom of information, Immigration, Privacy,
    Reporting and recordkeeping requirements.

    8 CFR Part 212

    Administrative practice and procedure, Aliens, Immigration,
    Passports and visas, Reporting and recordkeeping requirements.

    8 CFR Part 274a

    Administrative practice and procedure, Aliens, Employment,
    Penalties, Reporting and recordkeeping requirements.

    Accordingly, DHS amends chapter I of title 8 of the Code of Federal
    Regulations as follows:

    PART 103--IMMIGRATION BENEFITS; BIOMETRIC REQUIREMENTS;
    AVAILABILITY OF RECORDS

    0
    1. The authority citation for part 103 continues to read as follows:

    Authority: 5 U.S.C. 301, 552, 552a; 8 U.S.C. 1101, 1103, 1304,
    1356, 1365b; 31 U.S.C. 9701; Pub. L. 107-296, 116 Stat. 2135 (6
    U.S.C. 1 et seq.); E.O. 12356, 47 FR 14874, 15557, 3 CFR, 1982
    Comp., p.166; 8 CFR part 2; Pub. L. 112-54.

    0
    2. Section 103.7 is amended by adding paragraph (b)(1)(i)(KKK) to read
    as follows:

    Sec. 103.7 Fees.

    * * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (KKK) Application for Entrepreneur Parole (Form I-941). For filing
    an application for parole for entrepreneurs: $1200.
    * * * * *

    PART 212--DOCUMENTARY REQUIREMENTS: NONIMMIGRANTS; WAIVERS;
    ADMISSION OF CERTAIN INADMISSIBLE ALIENS; PAROLE

    0
    3. The authority citation for part 212 is revised to read as follows:

    Authority: 6 U.S.C. 111, 202(4) and 271; 8 U.S.C. 1101 and note,
    1102, 1103, 1182 and note, 1184, 1185 note (section 7209 of Pub. L.
    108-458), 1187, 1223, 1225, 1226, 1227, 1255, 1359; 8 CFR part 2.

    Section 212.1(q) also issued under section 702, Pub. L. 110-229,
    122 Stat. 754, 854.

    0
    4. Add Sec. 212.19 to read as follows:

    Sec. 212.19 Parole for entrepreneurs.

    (a) Definitions. For purposes of this section, the following
    definitions apply:
    (1) Entrepreneur means an alien who possesses a substantial
    ownership interest in a start-up entity and has a central and active
    role in the operations of that entity, such that the alien is well-
    positioned, due to his or her knowledge, skills, or experience, to
    substantially assist the entity with the growth and success of its
    business. For purposes of this section, an alien may be considered to
    possess a substantial ownership interest if he or she possesses at
    least a 10 percent ownership interest in the start-up entity at the
    time of adjudication of the initial grant of parole and possesses at
    least a 5 percent ownership interest in the start-up entity at the time
    of adjudication of a subsequent period of re-parole. During the period
    of initial parole, the entrepreneur may continue to reduce his or her
    ownership interest in the start-up entity, but must, at all times
    during the period of initial parole, maintain at least a 5 percent
    ownership interest in the entity. During the period of re-parole, the
    entrepreneur may continue to reduce his or her ownership interest in
    the start-up entity, but must, at all times during the period of
    parole, maintain an ownership interest in the entity.
    (2) Start-up entity means a U.S. business entity that was recently
    formed, has lawfully done business during any period of operation since
    its date of formation, and has substantial potential for rapid growth
    and job creation. An entity that is the basis for a request for parole
    under this section may be considered recently formed if it was created
    within the 5 years immediately preceding the filing date of the alien's
    initial parole request. For purposes of paragraphs (a)(3) and (5) of
    this section, an entity may be considered recently formed if it was
    created within the 5 years immediately preceding the receipt of the
    relevant grant(s), award(s), or investment(s).
    (3) Qualified government award or grant means an award or grant for
    economic development, research and development, or job creation (or
    other similar monetary award typically given to start-up entities) made
    by a federal, state, or local government entity (not including foreign
    government entities) that regularly provides such awards or grants to
    start-up entities. This definition excludes any contractual commitment
    for goods or services.
    (4) Qualified investment means an investment made in good faith,
    and that is not an attempt to circumvent any limitations imposed on
    investments under this section, of lawfully derived capital in a start-
    up entity that is a purchase from such entity of its equity,
    convertible debt, or other security convertible into its equity
    commonly used in financing transactions within such entity's industry.
    Such an investment shall not include an investment, directly or
    indirectly, from the entrepreneur; the parents, spouse, brother,
    sister, son, or daughter of such entrepreneur; or any corporation,
    limited liability company, partnership, or other entity in which such
    entrepreneur or the parents, spouse, brother, sister, son, or daughter
    of such entrepreneur directly or indirectly has any ownership interest.
    (5) Qualified investor means an individual who is a U.S. citizen or
    lawful permanent resident of the United States, or an organization that
    is located in the United States and operates through a legal entity
    organized under the laws of the United States or any state, that is
    majority owned and controlled, directly and indirectly, by U.S.
    citizens or lawful permanent residents of the United States, provided
    such individual or organization regularly makes substantial investments
    in start-up entities that subsequently exhibit substantial growth in
    terms of revenue generation or job creation. The term ``qualified
    investor'' shall not include an individual or organization that has
    been permanently or temporarily enjoined from participating in the
    offer or sale of a security or in the provision of services as an
    investment adviser, broker, dealer, municipal securities dealer,
    government securities broker, government securities dealer, bank,
    transfer agent or credit rating agency, barred from association with
    any entity involved in the offer or sale of securities or provision of
    such

    [[Page 5287]]

    services, or otherwise found to have participated in the offer or sale
    of securities or provision of such services in violation of law. For
    purposes of this section, such an individual or organization may be
    considered a qualified investor if, during the preceding 5 years:
    (i) The individual or organization made investments in start-up
    entities in exchange for equity, convertible debt or other security
    convertible into equity commonly used in financing transactions within
    their respective industries comprising a total in such 5-year period of
    no less than $600,000; and
    (ii) Subsequent to such investment by such individual or
    organization, at least 2 such entities each created at least 5
    qualified jobs or generated at least $500,000 in revenue with average
    annualized revenue growth of at least 20 percent.
    (6) Qualified job means full-time employment located in the United
    States that has been filled for at least 1 year by one or more
    qualifying employees.
    (7) Qualifying employee means a U.S. citizen, a lawful permanent
    resident, or other immigrant lawfully authorized to be employed in the
    United States, who is not an entrepreneur of the relevant start-up
    entity or the parent, spouse, brother, sister, son, or daughter of such
    an entrepreneur. This definition shall not include independent
    contractors.
    (8) Full-time employment means paid employment in a position that
    requires a minimum of 35 working hours per week. This definition does
    not include combinations of part-time positions even if, when combined,
    such positions meet the hourly requirement per week.
    (9) U.S. business entity means any corporation, limited liability
    company, partnership, or other entity that is organized under federal
    law or the laws of any state, and that conducts business in the United
    States, that is not an investment vehicle primarily engaged in the
    offer, purchase, sale or trading of securities, futures contracts,
    derivatives or similar instruments.
    (10) Material change means any change in facts that could
    reasonably affect the outcome of the determination whether the
    entrepreneur provides, or continues to provide, a significant public
    benefit to the United States. Such changes include, but are not limited
    to, the following: Any criminal charge, conviction, plea of no contest,
    or other judicial determination in a criminal case concerning the
    entrepreneur or start-up entity; any complaint, settlement, judgment,
    or other judicial or administrative determination concerning the
    entrepreneur or start-up entity in a legal or administrative proceeding
    brought by a government entity; any settlement, judgment, or other
    legal determination concerning the entrepreneur or start-up entity in a
    legal proceeding brought by a private individual or organization other
    than proceedings primarily involving claims for damages not exceeding
    10 percent of the current assets of the entrepreneur or start-up
    entity; a sale or other disposition of all or substantially all of the
    start-up entity's assets; the liquidation, dissolution or cessation of
    operations of the start-up entity; the voluntary or involuntary filing
    of a bankruptcy petition by or against the start-up entity; a
    significant change with respect to ownership and control of the start-
    up entity; and a cessation of the entrepreneur's qualifying ownership
    interest in the start-up entity or the entrepreneur's central and
    active role in the operations of that entity.
    (b) Initial parole--(1) Filing of initial parole request form. An
    alien seeking an initial grant of parole as an entrepreneur of a start-
    up entity must file an Application for Entrepreneur Parole (Form I-941)
    with USCIS, with the required fees (including biometric services fees),
    and supporting documentary evidence in accordance with this section and
    the form instructions, demonstrating eligibility as provided in
    paragraph (b)(2) of this section.
    (2) Criteria for consideration--(i) In general. An alien may be
    considered for parole under this section if the alien demonstrates that
    a grant of parole will provide a significant public benefit to the
    United States based on his or her role as an entrepreneur of a start-up
    entity.
    (ii) General criteria. An alien may meet the standard described in
    paragraph (b)(2)(i) of this section by providing a detailed
    description, along with supporting evidence:
    (A) Demonstrating that the alien is an entrepreneur as defined in
    paragraph (a)(1) of this section and that his or her entity is a start-
    up entity as defined in paragraph (a)(2) of this section; and
    (B) Establishing that the alien's entity has:
    (1) Received, within 18 months immediately preceding the filing of
    an application for initial parole, a qualified investment amount of at
    least $250,000 from one or more qualified investors; or
    (2) Received, within 18 months immediately preceding the filing of
    an application for initial parole, an amount of at least $100,000
    through one or more qualified government awards or grants.
    (iii) Alternative criteria. An alien who satisfies the criteria in
    paragraph (b)(2)(ii)(A) of this section and partially meets one or both
    of the criteria in paragraph (b)(2)(ii)(B) of this section may
    alternatively meet the standard described in paragraph (b)(2)(i) of
    this section by providing other reliable and compelling evidence of the
    start-up entity's substantial potential for rapid growth and job
    creation.
    (c) Additional periods of parole--(1) Filing of re-parole request
    form. Prior to the expiration of the initial period of parole, an
    entrepreneur parolee may request an additional period of parole based
    on the same start-up entity that formed the basis for his or her
    initial period of parole granted under this section. To request such
    parole, an entrepreneur parolee must timely file the Application for
    Entrepreneur Parole (Form I-941) with USCIS, with the required fees
    (including biometric services fees), and supporting documentation in
    accordance with the form instructions, demonstrating eligibility as
    provided in paragraph (c)(2) of this section.
    (2) Criteria for consideration--(i) In general. An alien may be
    considered for re-parole under this section if the alien demonstrates
    that a grant of parole will continue to provide a significant public
    benefit to the United States based on his or her role as an
    entrepreneur of a start-up entity.
    (ii) General criteria. An alien may meet the standard described in
    paragraph (c)(2)(i) of this section by providing a detailed
    description, along with supporting evidence:
    (A) Demonstrating that the alien continues to be an entrepreneur as
    defined in paragraph (a)(1) of this section and that his or her entity
    continues to be a start-up entity as defined in paragraph (a)(2) of
    this section; and
    (B) Establishing that the alien's entity has:
    (1) Received at least $500,000 in qualifying investments, qualified
    government grants or awards, or a combination of such funding, during
    the initial parole period;
    (2) Created at least 5 qualified jobs with the start-up entity
    during the initial parole period; or
    (3) Reached at least $500,000 in annual revenue in the United
    States and averaged 20 percent in annual revenue growth during the
    initial parole period.
    (iii) Alternative criteria. An alien who satisfies the criteria in
    paragraph (c)(2)(ii)(A) of this section and partially meets one or more
    of the criteria in paragraph (c)(2)(ii)(B) of this section may
    alternatively meet the standard

    [[Page 5288]]

    described in paragraph (c)(2)(i) of this section by providing other
    reliable and compelling evidence of the start-up entity's substantial
    potential for rapid growth and job creation.
    (d) Discretionary authority; decision; appeals and motions to
    reopen--(1) Discretionary authority. DHS may grant parole under this
    section in its sole discretion on a case-by-case basis if the
    Department determines, based on the totality of the evidence, that an
    applicant's presence in the United States will provide a significant
    public benefit and that he or she otherwise merits a favorable exercise
    of discretion. In determining whether an alien's presence in the United
    States will provide a significant public benefit and whether the alien
    warrants a favorable exercise of discretion, USCIS will consider and
    weigh all evidence, including any derogatory evidence or information,
    such as but not limited to, evidence of criminal activity or national
    security concerns.
    (2) Initial parole. DHS may grant an initial period of parole based
    on the start-up entity listed in the request for parole for a period of
    up to 30 months from the date the individual is initially paroled into
    the United States. Approval by USCIS of such a request must be obtained
    before the alien may appear at a port of entry to be granted parole, in
    lieu of admission.
    (3) Re-parole. DHS may re-parole an entrepreneur for one additional
    period of up to 30 months from the date of the expiration of the
    initial parole period. If the entrepreneur is in the United States at
    the time that USCIS approves the request for re-parole, such approval
    shall be considered a grant of re-parole. If the alien is outside the
    United States at the time that USCIS approves the request for re-
    parole, the alien must appear at a port of entry to be granted parole,
    in lieu of admission.
    (4) Appeals and motions to reopen. There is no appeal from a denial
    of parole under this section. USCIS will not consider a motion to
    reopen or reconsider a denial of parole under this section. On its own
    motion, USCIS may reopen or reconsider a decision to deny the
    Application for Entrepreneur Parole (Form I-941), in accordance with 8
    CFR 103.5(a)(5).
    (e) Payment of biometric services fee and collection of biometric
    information. An alien seeking parole or re-parole under this section
    will be required to pay the biometric services fee as prescribed by 8
    CFR 103.7(b)(1)(i)(C). An alien seeking an initial grant of parole will
    be required to submit biometric information. An alien seeking re-parole
    may be required to submit biometric information.
    (f) Limitations. No more than three entrepreneurs may be granted
    parole under this section based on the same start-up entity. An alien
    shall not receive more than one initial grant of entrepreneur parole or
    more than one additional grant of entrepreneur re-parole based on the
    same start-up entity, for a maximum period of parole of five years.
    (g) Employment authorization. An entrepreneur who is paroled into
    the United States pursuant to this section is authorized for employment
    with the start-up entity incident to the conditions of his or her
    parole.
    (h) Spouse and children. (1) The entrepreneur's spouse and children
    who are seeking parole as derivatives of such entrepreneur must
    individually file an Application for Travel Document (Form I-131). Such
    application must also include evidence that the derivative has a
    qualifying relationship to the entrepreneur and otherwise merits a
    grant of parole in the exercise of discretion. A biometric services fee
    is required to be filed with the application. Such spouse or child will
    be required to appear for collection of biometrics in accordance with
    the form instructions or upon request.
    (2) The spouse and children of an entrepreneur granted parole under
    this section may be granted parole under this section for no longer
    than the period of parole granted to such entrepreneur.
    (3) The spouse of the entrepreneur parolee, after being paroled
    into the United States, may be eligible for employment authorization on
    the basis of parole under this section. To request employment
    authorization, an eligible spouse paroled into the United States must
    file an Application for Employment Authorization (Form I-765), in
    accordance with 8 CFR 274a.13 and form instructions. An Application for
    Employment Authorization must be accompanied by documentary evidence
    establishing eligibility, including evidence of the spousal
    relationship.
    (4) Notwithstanding 8 CFR 274a.12(c)(11), a child of the
    entrepreneur parolee may not be authorized for and may not accept
    employment on the basis of parole under this section.
    (i) Conditions on parole. As a condition of parole under this
    section, a parolee must maintain household income that is greater than
    400 percent of the federal poverty line for his or her household size
    as defined by the Department of Health and Human Services. USCIS may
    impose other such reasonable conditions in its sole discretion with
    respect to any alien approved for parole under this section, and it may
    request verification of the parolee's compliance with any such
    condition at any time. Violation of any condition of parole may lead to
    termination of the parole in accordance with paragraph (k) of this
    section or denial of re-parole.
    (j) Reporting of material changes. An alien granted parole under
    this section must immediately report any material change(s) to USCIS.
    If the entrepreneur will continue to be employed by the start-up entity
    and maintain a qualifying ownership interest in the start-up entity,
    the entrepreneur must submit a form prescribed by USCIS, with any
    applicable fee (not including any biometric fees), in accordance with
    the form instructions to notify USCIS of the material change(s). The
    entrepreneur parolee must immediately notify USCIS in writing if he or
    she will no longer be employed by the start-up entity or ceases to
    possess a qualifying ownership stake in the start-up entity.
    (k) Termination of parole--(1) In general. DHS, in its discretion,
    may terminate parole granted under this section at any time and without
    prior notice or opportunity to respond if it determines that the
    alien's continued parole in the United States no longer provides a
    significant public benefit. Alternatively, DHS, in its discretion, may
    provide the alien notice and an opportunity to respond prior to
    terminating the alien's parole under this section.
    (2) Automatic termination. Parole granted under this section will
    be automatically terminated without notice upon the expiration of the
    time for which parole was authorized, unless the alien timely files a
    non-frivolous application for re-parole. Parole granted under this
    section may be automatically terminated when USCIS receives written
    notice from the entrepreneur parolee that he or she will no longer be
    employed by the start-up entity or ceases to possess a qualifying
    ownership stake in the start-up entity in accordance with paragraph (j)
    of this section. Additionally, parole of the spouse or child of the
    entrepreneur will be automatically terminated without notice if the
    parole of the entrepreneur has been terminated. If parole is
    terminated, any employment authorization based on that parole is
    automatically revoked.
    (3) Termination on notice. USCIS may terminate on notice or provide
    the entrepreneur or his or her spouse or children, as applicable,
    written notice of

    [[Page 5289]]

    its intent to terminate parole if USCIS believes that:
    (i) The facts or information contained in the request for parole
    were not true and accurate;
    (ii) The alien failed to timely file or otherwise comply with the
    material change reporting requirements in this section;
    (iii) The entrepreneur parolee is no longer employed in a central
    and active role by the start-up entity or ceases to possess a
    qualifying ownership stake in the start-up entity;
    (iv) The alien otherwise violated the terms and conditions of
    parole; or
    (v) Parole was erroneously granted.
    (4) Notice and decision. A notice of intent to terminate issued
    under this paragraph should generally identify the grounds for
    termination of the parole and provide a period of up to 30 days for the
    alien's written rebuttal. The alien may submit additional evidence in
    support of his or her rebuttal, when applicable, and USCIS will
    consider all relevant evidence presented in deciding whether to
    terminate the alien's parole. Failure to timely respond to a notice of
    intent to terminate will result in termination of the parole. When a
    charging document is served on the alien, the charging document will
    constitute written notice of termination of parole (if parole has not
    already been terminated), unless otherwise specified. Any further
    immigration and removal actions will be conducted in accordance with
    the Act and this chapter. The decision to terminate parole may not be
    appealed. USCIS will not consider a motion to reopen or reconsider a
    decision to terminate parole under this section. On its own motion,
    USCIS may reopen or reconsider a decision to terminate.
    (l) Increase of investment and revenue amount requirements. The
    investment and revenue amounts in this section will be automatically
    adjusted every 3 years by the Consumer Price Index and posted on the
    USCIS Web site at www.uscis.gov. Investment and revenue amounts
    adjusted under this paragraph will apply to all applications filed on
    or after the beginning of the fiscal year for which the adjustment is
    made.

    PART 274a--CONTROL OF EMPLOYMENT OF ALIENS

    0
    5. The authority citation for part 274a continues to read as follows:

    Authority: 8 U.S.C. 1101, 1103, 1324a; 48 U.S.C. 1806; 8 CFR
    part 2; Pub. L. 101-410, 104 Stat. 890, as amended by Pub. L. 114-
    74, 129 Stat. 599.

    0
    6. Section 274a.2 is amended by:
    0
    a. Revising paragraphs (b)(1)(v)(A)(5) and (b)(1)(v)(C)(2);
    0
    b. Removing paragraph (b)(1)(v)(C)(3); and
    0
    c. Redesignating paragraphs (b)(1)(v)(C)(4) through (8) as paragraphs
    (b)(1)(v)(C)(3) through (7).
    The revisions read as follows:

    Sec. 274a.2 Verification of identity and employment authorization.

    * * * * *
    (b) * * *
    (1) * * *
    (v) * * *
    (A) * * *
    (5) In the case of an individual who is employment-authorized
    incident to status or parole with a specific employer, a foreign
    passport with an Arrival/Departure Record, Form I-94 (as defined in 8
    CFR 1.4) or Form I-94A, bearing the same name as the passport and
    containing an endorsement by DHS indicating such employment-authorized
    status or parole, as long as the period of endorsement has not yet
    expired and the employment is not in conflict with the individual's
    employment-authorized status or parole;
    * * * * *
    (C) * * *
    (2) Certification or report of birth issued by the Department of
    State, including Forms FS-545, DS-1350, FS-240;
    * * * * *

    0
    7. Section 274a.12 is amended by:
    0
    a. Revising paragraph (b) introductory text;
    0
    b. Removing the word ``or'' at the end of paragraph (b)(24);
    0
    c. Removing the period at the end of paragraph (b)(25) and adding ``;
    or'' in its place;
    0
    d. Adding and reserving paragraphs (b)(26) through (36);
    0
    e. Adding paragraph (b)(37);
    0
    f. Revising paragraph (c)(11); and
    0
    g. Adding paragraph (c)(34).
    The revisions and additions read as follows:

    Sec. 274a.12 Classes of aliens authorized to accept employment.

    * * * * *
    (b) Aliens authorized for employment with a specific employer
    incident to status or parole. The following classes of aliens are
    authorized to be employed in the United States by the specific employer
    and subject to any restrictions described in the section(s) of this
    chapter indicated as a condition of their parole or of their admission
    in, or subsequent change to, the designated nonimmigrant
    classification. An alien in one of these classes is not issued an
    employment authorization document by DHS:
    * * * * *
    (37) An alien paroled into the United States as an entrepreneur
    pursuant to 8 CFR 212.19 for the period of authorized parole. An
    entrepreneur who has timely filed a non-frivolous application
    requesting re-parole with respect to the same start-up entity in
    accordance with 8 CFR 212.19 prior to the expiration of his or her
    parole, but whose authorized parole period expires during the pendency
    of such application, is authorized to continue employment with the same
    start-up entity for a period not to exceed 240 days beginning on the
    date of expiration of parole. Such authorization shall be subject to
    any conditions and limitations on such expired parole. If DHS
    adjudicates the application prior to the expiration of this 240-day
    period and denies the application for re-parole, the employment
    authorization under this paragraph shall automatically terminate upon
    notification to the alien of the denial decision.
    (c) * * *
    (11) Except as provided in paragraphs (b)(37) and (c)(34) of this
    section and Sec. 212.19(h)(4) of this chapter, an alien paroled into
    the United States temporarily for urgent humanitarian reasons or
    significant public benefit pursuant to section 212(d)(5) of the Act.
    * * * * *
    (34) A spouse of an entrepreneur parolee described as eligible for
    employment authorization in Sec. 212.19(h)(3) of this chapter.
    * * * * *

    Jeh Charles Johnson,
    Secretary of Homeland Security.
    [FR Doc. 2017-00481 Filed 1-13-17; 8:45 am]
    BILLING CODE 9111-97-P

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