[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]



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Vol. 82

Tuesday,

No. 10

January 17, 2017

Part V





 Department of Homeland Security





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 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  

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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.

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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

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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.''
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    \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.
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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.
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    \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).
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    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

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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

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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.
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    \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.
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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

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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.
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    \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-high-growth-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.
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    \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_2016_accelerator_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/crunchbase-sees-rise-in-average-seed-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/reports/halo-report-full-version-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/crunchbase-reveals-the-average-successful-startup-raises-41m-exits-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/truebridge/2015/04/15/why-next-billion-dollar-startup-not-always-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.'').

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[[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/2014/sep/14/foreign-tech-entrepreneurs-visa-us-struggle; Amy Grenier, Majority 
of U.S. Patents Granted to Foreign Individuals, April 11, 2014, 
available at http://immigrationimpact.com/2014/04/11/majority-of-u-s-patents-granted-to-foreign-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/2014/sep/14/foreign-tech-entrepreneurs-visa-us-struggle; Amy Grenier, Majority 
of U.S. Patents Granted to Foreign Individuals, April 11, 2014, 
available at http://immigrationimpact.com/2014/04/11/majority-of-u-s-patents-granted-to-foreign-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/files/advocacy/HighImpactReport.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%20II_Entrepreneurs_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/files/advocacy/rs349tot_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/cs/groups/pgasite/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/2012/econ/sbo/2012-sbo-characteristics.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.
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    \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.
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    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.
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    \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.
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    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.
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    \78\ Source: ``USCIS Announces `Entrepreneurs in Residence 
Initiative,' '' available at: http://www.uscis.gov/news/public-releases-topic/business-immigration/uscis-announces-entrepreneurs-residence-initiative; see also http://www.uscis.gov/eir/visa-guide/entrepreneur-visa-guide.
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    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.
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    \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.
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    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.
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    \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).

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[[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\
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    \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.
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    \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.
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    \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.
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    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.
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    \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.
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    \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.
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    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/publications/2012/econ/2012-sbo.html. The file 
location is: http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=SBO_2012_00CSA09&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/publications/2012/econ/2012-sbo.html. The file location is: 
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=SBO_2012_00CSCB11&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