[Federal Register Volume 81, Number 169 (Wednesday, August 31, 2016)]
[Proposed Rules]
[Pages 60130-60168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20663]



[[Page 60129]]

Vol. 81

Wednesday,

No. 169

August 31, 2016

Part II





Department of Homeland Security





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8 CFR Parts 103, 212, and 274a





International Entrepreneur Rule; Proposed Rule

Federal Register / Vol. 81 , No. 169 / Wednesday, August 31, 2016 / 
Proposed Rules

[[Page 60130]]


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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: Proposed rule.

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SUMMARY: The Department of Homeland Security (DHS) proposes to amend 
its regulations implementing the Secretary of Homeland Security's 
discretionary parole authority to increase and enhance 
entrepreneurship, innovation, and job creation in the United States. 
The proposed rule would add new regulatory provisions guiding the use 
of parole on a case-by-case basis with respect to entrepreneurs of 
start-up entities whose entry into the United States would provide a 
significant public benefit through the substantial and demonstrated 
potential for rapid business growth and job creation. 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 2 years (which may be 
extended by up to an additional 3 years) to facilitate the applicant's 
ability to oversee and grow his or her start-up entity in the United 
States. A subsequent request for re-parole would be considered only 
when the entrepreneur and his or her start-up entity continues to 
provide a significant public benefit as evidenced by substantial 
increases in capital investment, revenue, or job creation. DHS believes 
that a regulatory process for seeking and granting parole in this 
business-creation context--including by establishing criteria for 
evaluating individual parole applications on a case-by-case basis--is 
important given the complexities involved in such adjudications and the 
need for guidance regarding the general criteria for eligibility by the 
start-up entrepreneurs, entities, and investors involved.

DATES: Written comments must be received on or before October 17, 2016.

ADDRESSES: You may submit comments, identified by DHS Docket No. USCIS-
2015-0006, by any one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the Web site instructions for submitting comments.
     Email: You may submit comments directly to U.S. 
Citizenship and Immigration Services (USCIS) by email at 
[email protected]. Please include DHS docket number USCIS-2015-
0006 in the subject line of the message.
     Mail: You may submit comments directly to USCIS by mail by 
sending correspondence to Samantha Deshommes, Chief, Regulatory 
Coordination Division, Office of Policy and Strategy, U.S. Citizenship 
and Immigration Services, Department of Homeland Security, 20 
Massachusetts Avenue NW., Washington, DC 20529. To ensure proper 
handling, please reference DHS Docket No. USCIS-2015-0006 in your 
correspondence. This mailing address may be used for paper, disk, or 
CD-ROM submissions.
     Hand Delivery/Courier: You may submit comments directly to 
USCIS through hand delivery to: Samantha Deshommes, Chief, Regulatory 
Coordination Division, Office of Policy and Strategy, U.S. Citizenship 
and Immigration Services, Department of Homeland Security, 20 
Massachusetts Avenue NW., Washington, DC 20529; Telephone (202) 272-
8377. To ensure proper handling, please reference DHS Docket No. USCIS-
2015-0006 in your correspondence.

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) 272-8377.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Public Participation
II. Executive Summary
    A. Purpose of the Regulatory Action
    B. Legal Authority
    C. Summary of Proposed Amendments
    D. Costs and Benefits
III. Background
    A. Discretionary Parole Authority
    B. Historical Uses of Parole
    C. Significant Public Benefit of Attracting Foreign 
Entrepreneurs to the United States
    D. Proposal for Parole for Entrepreneurs
IV. Proposed Changes
    A. Overview of Parole for Entrepreneurs
    B. Criteria for Initial Parole
    1. Recent Formation of a Start-Up Entity
    2. Applicant is an Entrepreneur Who Is Well-Positioned To 
Advance the Entity's Business
    3. Capital Investment or Government Funding Criteria
    C. Application Requirements for Initial Period of Parole
    1. Filing the Application for Entrepreneur Parole (Form I-941)
    2. Requirement To Appear for Submission of Biometric Information
    3. Income-Related Condition on Parole
    4. Adjudication of Applications
    5. Limitation on Number of Entrepreneur Parolees Per Start-Up 
Entity
    6. Authorized Period for Initial Grant of Entrepreneur Parole
    7. Spouses and Minor Children
    D. Employment Authorization
    1. Employment Authorization Incident to Parole With a Specific 
Employer
    2. Employment Authorization Eligibility for Spouses
    3. Documentation for Employment Eligibility Verification (Form 
I-9)
    4. Technical Changes
    E. Material Change Reporting
    F. Re-Parole
    1. Criteria for Re-Parole
    2. Application Requirements for Re-Parole
    3. Ensuring Continuous Employment Authorization
    G. Termination of Parole
    1. Automatic Termination
    2. Termination on Notice
    H. Automatic Adjustment of Investment and Revenue Amount 
Requirements
    I. Technical Change
V. 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. Background and Purpose of the Proposed Rule
    3. Population of Entrepreneurs Potentially Eligible
    4. Costs
    5. Benefits
    D. Regulatory Flexibility Act
    E. Executive Order 13132
    F. Executive Order 12988
    G. Paperwork Reduction Act

I. Public Participation

    DHS invites comments, data, and information from all interested 
parties, including advocacy groups, nongovernmental organizations, 
community-based organizations, entrepreneurs, investors, other entities 
in the entrepreneurial ecosystem of the United States, and legal 
representatives who specialize in immigration law on any and all 
aspects of this proposed rule. Comments that will provide the most 
assistance to DHS in developing these procedures will reference a 
specific portion of the proposed rule, explain the reason for any 
recommended change, and include data, information, or authorities that 
support such recommended change. DHS is generally seeking comments on:
    A. Proposed filing requirements and procedures;
    B. Proposed definitions and criteria for evaluating parole 
applications,

[[Page 60131]]

including investment, award, revenue, job creation, and alternative 
criteria;
    C. Proposed conditions, including limits on the number of 
entrepreneur parolees per start-up entity and time limits on parole 
periods;
    D. Proposed provisions establishing employment authorization for 
entrepreneurs incident to parole;
    E. Proposed provisions regarding termination of parole; and
    F. Proposed opportunity to request re-parole, length of period for 
re-parole, and limitation on number of re-parole opportunities.
    DHS also invites comments on the economic analysis supporting this 
rule and the proposed new parole request form for entrepreneurs.
    Instructions: All submissions must include the agency name and the 
DHS Docket No. USCIS-2015-0006 for this rulemaking. Regardless of the 
method used for submitting comments or material, all submissions will 
be posted, without change, to the Federal eRulemaking Portal at http://www.regulations.gov, and will include any personal information you 
provide. Therefore, submitting this information makes it public. You 
may wish to consider limiting the amount of personal information that 
you provide in any voluntary public comment submission you make to DHS. 
DHS may withhold information provided in comments from public viewing 
that it determines may impact the privacy of an individual or is 
offensive. For additional information, please read the Privacy Act 
notice that is available via the link in the footer of http://www.regulations.gov.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov.

II. 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), grants the Secretary of Homeland Security the 
discretionary authority to parole individuals into the United States, 
on a case-by-case basis, for urgent humanitarian reasons or significant 
public benefit. DHS proposes to amend 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 
proposed rule would establish general criteria for the use of parole 
with respect to entrepreneurs of start-up entities whose entry into the 
United States would provide a significant public benefit through the 
substantial and demonstrated potential for rapid growth and job 
creation. In all cases, whether to parole a particular individual under 
this rule would be a discretionary determination that would be made on 
a case-by-case basis.
    Given the complexities involved in adjudicating applications in 
this context and the need for guidance regarding the criteria for 
exercising parole in this area, 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.
    As discussed, the proposed rule would establish criteria for 
seeking and obtaining parole based on the creation of a start-up entity 
in the United States. DHS proposes that to be considered for parole 
under this 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 proposes 
that such potential would be indicated by, among other things, the 
receipt of (1) significant capital financing from U.S. investors with 
established records of successful investments or (2) significant awards 
or grants from certain Federal, State or local government entities. DHS 
also proposes alternative criteria for applicants who partially meet 
the proposed thresholds for capital financing or government awards or 
grants and who can provide additional reliable and compelling evidence 
of their entities' significant potential for rapid growth and job 
creation. An applicant would qualify for further consideration by 
showing 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 proposal would 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 proposal 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. Section 402(4) of the Homeland Security Act of 2002 
(HSA), Public Law 107-296, 116 Stat. 2135, 6 U.S.C. 202(4), provides 
the Secretary the authority to administer and enforce the immigration 
and nationality laws. Sections 103(a)(1) and (3) of the INA, 8 U.S.C. 
1103(a)(1), (3), expressly authorize the 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 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 Proposed Amendments

    DHS is proposing to add 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

[[Page 60132]]

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 proposed 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. DHS proposes that an entity may be 
generally considered recently formed if it was created within the 3 
years preceding the date of the filing of the initial parole 
application.
    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. DHS proposes that an applicant may 
generally meet this standard by providing evidence that he or she: 
(1) Possesses a significant (at least 15 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.
    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. DHS proposes that 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. DHS proposes that an applicant 
would generally be able to meet this standard by demonstrating that 
the start-up entity has received investments of capital totaling 
$345,000 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, and/or job creation. DHS proposes that 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. DHS further proposes alternative 
criteria under which an applicant who partially meets one or more of 
the above sub-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 his or her 
entry 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 proposes that an applicant who meets the above criteria (and 
his or her spouse and minor, unmarried children, if any) generally may 
be considered under this rule for a discretionary grant of parole 
lasting up to 2 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 would 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 proposed fees. Applicants would also be required to appear for 
collection of biometric information. DHS further proposes that no more 
than three entrepreneurs may receive parole with respect to any one 
qualifying entity.
    USCIS adjudicators would be required to 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 would 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.
    DHS further proposes that if parole is granted, the entrepreneur 
would 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, would 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, 
would be permitted to apply for employment authorization consistent 
with proposed 8 CFR 274a.12(c)(34). DHS retains the right to revoke any 
such grant of parole at any time as a matter of discretion or if the 
Department 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 involves fraud or 
misrepresentation.
    As noted, the purpose of the proposed 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 benefit from such development and 
expansion, including through increased capital expenditures, innovation 
and job creation. DHS proposes to allow individuals granted parole 
under this rule to be considered for re-parole for an additional period 
of up to 3 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. As proposed, an applicant under this 
rule would 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 would 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. DHS proposes that an 
applicant may generally meet this standard by providing evidence 
that he or she: (a) Continues to possess a significant (at least 10 
percent) ownership interest in the entity; 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 financing by selling 
ownership interest during their initial years of operation.
    3. Significant U.S. Investment/Revenue/Job Creation. The 
applicant can further validate, through reliable supporting 
evidence, the start-up entity's continued potential for rapid growth 
and job creation. DHS proposes that an applicant would be able to 
satisfy this criterion in one of several ways:
    a. Investments from established U.S. investors. 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 government entities that regularly provide such funding 
to start-up entities; or

[[Page 60133]]

a combination of both. DHS proposes that 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 investments 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 Federal, State or local government 
entities with expertise in economic development, research and 
development, and/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. DHS proposes 
that an applicant would generally be expected 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. DHS proposes that an applicant 
would generally be expected to demonstrate that the entity created 
at least 10 full-time jobs for U.S. workers during the initial 
parole period.
    d. Alternative criteria. As with initial parole, DHS further 
proposes alternative criteria under which an applicant who partially 
meets one or more of the above sub-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 would 
continue to provide a significant public benefit. As discussed 
above, such evidence would need to serve as a compelling validation 
of the entity's substantial potential for rapid growth and job 
creation.

    DHS proposes that an applicant who generally meets the above 
criteria may be considered for one additional grant of parole 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, if the applicant also merits a favorable exercise of 
discretion. If granted, re-parole may be for up to 3 years, for a total 
maximum period of 5 years for parole under 8 CFR 212.19. 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 would be 
required to 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 re-
parole, adjudicators would 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 re-
paroled, DHS retains the right to revoke parole at any time as a matter 
of discretion or if the Department 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 
applicant committed fraud or made material misrepresentations.
    Finally, DHS is proposing 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 proposed rule would amend 8 CFR 
274a.12(b) by: (1) Adding entrepreneur parolees to the classes of 
aliens authorized for employment incident to their immigration status 
or parole, and (2) providing for temporary employment authorization for 
those applying for re-parole. The proposed rule would amend 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 proposed rule would amend 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.\2\ Finally, 
the proposed rule would amend 8 CFR 103.7(b)(i) by including the fee 
for the new proposed application form.
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    \2\ Additionally, DHS is also proposing a technical change to 
this section to add the Department of State (DOS) Consular Report of 
Birth Abroad (Form FS-240, or successor form) to the ``List C'' 
column of acceptable documents for Form I-9 purposes.
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D. Costs and Benefits

    DHS does not anticipate that this rule, if finalized, would 
generate significant costs and burdens to private or public entities. 
Costs of the rule would stem from filing fees and opportunity costs 
associated with applying for parole, and the requirement that the 
entrepreneur alert DHS to any material changes.
    DHS estimates that 2,940 entrepreneurs could be eligible for parole 
annually. Each applicant for parole would face a total filing cost--
including the application form fee, biometric filing fee, travel costs, 
and associated opportunity costs--of $1,480, resulting in a total cost 
of $4,349,827 (undiscounted) for the first full year the rule could 
take effect and any subsequent year. Additionally, dependent family 
members (spouses and children) seeking parole with the principal 
applicant would 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 base estimate of 2,940 principal applicants. Each 
spouse and child 14 years of age and older seeking parole would face a 
total cost of $550 per applicant, for a total aggregate cost of 
$1,779,604.\3\ Additionally, spouses who apply for work authorization 
via a Form I-765 application would incur a total additional cost of 
$416.20 each. Based on the same number of entrepreneurs, the estimated 
2,940 spouses \4\ would incur total costs of $1,223,630 (undiscounted). 
The total cost of the rule to include direct filing costs and monetized 
non-filing costs is estimated to be $7,353,061 annually.
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    \3\ For parole requests for children under the age of 14, only 
the filing fee will be required, as they 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 
photograph and signature captured.
    \4\ DHS used a simple one-to-one mapping of entrepreneurs to 
spouses to obtain 1,813 spouses, the same number as entrepreneur 
parolees.
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    DHS anticipates that establishing a parole process for those 
entrepreneurs who stand to provide a significant public benefit would 
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 proposal would 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.

III. Background

A. Discretionary Parole Authority

    The Secretary of Homeland Security has discretionary authority to 
grant temporary parole ``under conditions as he may prescribe only on a 
case-by-case

[[Page 60134]]

basis for urgent humanitarian reasons or significant public benefit 
[to] any individual applying for admission to the United States.'' INA 
section 212(d)(5)(A), 8 U.S.C. 1182(d)(5)(A).\5\ 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 standards to the Secretary. 
Aside from requiring case-by-case determinations, Congress limited the 
parole authority by prohibiting its use with respect to two classes of 
applicants for admissions: (1) Aliens who are refugees (unless the 
Secretary determines that parole is required for a particular alien for 
compelling reasons in the public interest), see INA section 
212(d)(5)(B), 8 U.S.C. 1182(d)(5)(B); and (2) alien crewmen during 
certain labor disputes, see INA section 214(f)(2)(A), 8 U.S.C. 
1184(f)(2)(A).
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    \5\ 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).
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    Parole decisions are discretionary determinations and must be made 
on a case-by-case basis consistent with the INA. DHS may exercise its 
authority to 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.\6\ 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.
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    \6\ 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).
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    Parole is not an admission to the United States. See INA section 
101(a)(13)(B), 8 U.S.C. 1101(a)(13)(B); 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), 8 U.S.C. 
1182(d)(5).
    DHS regulations at 8 CFR 212.5 describe DHS's discretionary parole 
authority for arriving aliens to the United States (other than detained 
aliens), 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 alien 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 aliens who seek 
authorization to depart the United States and return to the country 
pursuant to parole in the future.\7\ See 8 CFR 212.5(f); Application 
for Travel Document (Form I-131). Advance authorization of parole by 
USCIS does not guarantee that the alien will be paroled by CBP upon his 
or her appearance at a port of entry. Rather, with a grant of advance 
parole, the alien is issued a document authorizing travel (in lieu of a 
visa) indicating the presumption that CBP will favorably exercise 
discretion to parole the alien in the future (so long as material 
circumstances do not change).
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    \7\ 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 a nonimmigrant 
classification, as USCIS is unable to grant parole to aliens who are 
not ``applicants for admission.'' See INA section 212(d)(5), 8 
U.S.C. 1182(d)(5).
---------------------------------------------------------------------------

    Currently, upon an alien's arrival to the United States 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). Importantly, 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. See 
section 212(a) of the INA, 8 U.S.C. 1182(a). Further, parole does not 
confer any immigration ``status.'' See section 101(a)(13)(B) of the 
INA, 8 U.S.C. 1101(a)(13)(B); section 212(d)(5)(A) of the INA, 8 U.S.C. 
1182(d)(5)(A). Parole does not provide a parolee with temporary 
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 an Application for Employment Authorization (Form I-765) with 
USCIS. See 8 CFR 274a.12(c)(11). If employment authorization is 
granted, USCIS issues the parolee an 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 may 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. Historical Uses of Parole

    DHS and the former Immigration and Naturalization Service (INS) 
have long extended parole to individuals for urgent humanitarian 
reasons or significant public benefit. The authority has been exercised 
on behalf of individuals on an ad hoc basis, as well as through policy 
guidance or regulations identifying classes of individuals to be 
considered for parole through individualized case-by-case 
adjudications. For example, parole has long been used on an ad hoc 
basis for individuals with serious medical conditions who need to come 
into the United States for medical treatment, individuals subject to 
prosecution or who are required to testify in court, individuals 
cooperating with law enforcement agencies, volunteers offering 
assistance in response to

[[Page 60135]]

natural or other disasters, and foreign officials and other dignitaries 
who are inadmissible but seek to attend events in the country. 
Depending on the circumstances, such uses of parole have been justified 
on ``urgent humanitarian'' or ``significant public benefit'' grounds, 
or both.
    Parole has also long been exercised on a case-by-case basis with 
respect to individuals falling within certain designated parameters, as 
defined through regulation or policy guidance. Longstanding 
regulations, for example, provide discretionary criteria and other 
guidance for the use of parole with respect to arriving aliens detained 
in the United States. See 8 CFR 212.5. Those regulations provide that 
parole from immigration custody generally would be ``justified'' on a 
case-by-case basis if an individual falls within one of several 
specific categories, including individuals with serious medical 
conditions, pregnant women, juveniles, or individuals whose ``continued 
detention is not in the public interest'' as determined by certain 
listed officials. Id. Through longstanding policy memoranda or other 
guidance, DHS and the former INS have also provided instructions on the 
use of parole for other individuals, including certain vulnerable 
individuals who have been denied refugee status.
    More recently, DHS has provided guidance on the case-by-case 
exercise of the parole authority through policy memoranda or notices in 
the Federal Register, including, for example, on behalf of certain 
Cuban nationals, certain individuals seeking to enter the Commonwealth 
of the Northern Mariana Islands (CNMI), and certain family members of 
U.S. military personnel:

     In 2007, DHS implemented the Cuban Family Reunification 
Parole Program to promote safe, legal, and orderly migration as an 
alternative to maritime crossings from Cuba. This program offers 
Cuban beneficiaries of approved family-based immigrant visa 
petitions an opportunity to apply for parole rather than remain in 
Cuba while awaiting the availability of an immigrant visa number.\8\ 
USCIS implemented the program based on the significant public 
benefit rationales of ``enabling the United States to meet its 
commitments under the Migration Accords'' and ``reducing the 
perceived need for family members left behind in Cuba to make 
irregular and inherently dangerous attempts to arrive in the United 
States.'' \9\
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    \8\ Cuban Family Reunification Parole Program, 72 FR 65,588 
(Nov. 21, 2007); see also Changes to Application Procedures for the 
Cuban Family Reunification Parole Program, 79 FR 75579 (Dec. 18, 
2014).
    \9\ Id.
---------------------------------------------------------------------------

     In 2009, DHS announced a policy on the use of parole 
into the CNMI for certain foreign workers, as well as visitors from 
the Russian Federation and the People's Republic of China.\10\ The 
parole policy was justified based on the economic benefit such 
workers and visitors would provide to the U.S. territory.
---------------------------------------------------------------------------

    \10\ See 8 CFR 214.2(w)(1)(v); USCIS, Commonwealth of the 
Northern Mariana Islands (CNMI) Federalization of Immigration Law 
(Sept. 22, 2014), available at http://www.uscis.gov/laws/immigration-commonwealth-northern-mariana-islands-cnmi/commonwealth-northern-mariana-islands-cnmi-federalization-immigration-law; USCIS, 
Extending Parole in the CNMI (Jan. 30, 2012), available at http://www.uscis.gov/laws/immigration-commonwealth-northern-mariana-islands-cnmi/extending-parole-cnmi.
---------------------------------------------------------------------------

     In 2013, DHS issued guidance encouraging the use of 
parole for spouses, children, and parents of active duty members of 
the U.S. Armed Forces, individuals in the Selected Reserve of the 
Ready Reserve, and individuals who previously served in the U.S. 
Armed Forces or the Selected Reserve of the Ready Reserve.\11\ The 
cited benefits included mitigating the adverse effects on Service 
Members and military preparedness stemming from the stress and 
anxiety of their immediate family members due to immigration 
concerns.
---------------------------------------------------------------------------

    \11\ See USCIS Policy Mem. PM-602-0091, Parole of Spouses, 
Children and Parents of Active Duty Members of the U. S. Armed 
Forces, the Selected Reserve of the Ready Reserve, and Former 
Members of the U.S. Armed Forces or Selected Reserve of the Ready 
Reserve and the Effect of Parole on Inadmissibility under 
Immigration and Nationality Act Sec.  212(a)(6)(A)(i) at 2-3 (Nov. 
13, 2013), available at http://www.uscis.gov/sites/default/files/USCIS/Laws/Memoranda/2013/2013-1115_Parole_in_Place_Memo_.pdf.
---------------------------------------------------------------------------

C. Significant Public Benefit From Attracting Foreign Entrepreneurs to 
the United States

    DHS believes that enabling foreign entrepreneurs to establish and 
grow their start-up entities in the United States, rather than abroad, 
would yield a significant public benefit in certain cases. This would 
be expected to promote entrepreneurship and investment; facilitate 
research and development and other forms of innovation; support the 
continued growth of the U.S. economy; and lead to job creation for U.S. 
workers. To this end, DHS has considered the economic benefits of 
foreign entrepreneurs.
    Evidence indicates that young business ventures, especially new 
start-up businesses, are important economic drivers and that the U.S. 
economy significantly benefits from the economic activity generated by 
entrepreneurs who start and grow new businesses here rather than 
abroad.\12\ Indeed, evidence suggests that future economic and job 
growth for nations will hinge heavily on their ability to attract 
entrepreneurs, including those from abroad.\13\ As entrepreneurs have 
increasing opportunities to establish and operate their start-up 
entities around the world, the need to create conditions that reduce 
barriers to entry and attract entrepreneurs has become a priority 
policy goal for a number of economically advanced and less economically 
advanced nations.\14\ To compete for talented entrepreneurs, these 
countries have, or are planning to have, processes similar to that 
proposed in this rule.\15\
---------------------------------------------------------------------------

    \12\ See, e.g. Edward L. Glaeser, Sari Pekkala Kerr, and William 
R. Kerr ``Entrepreneurship And Urban Growth: An Empirical Assessment 
With Historical Mines'' (2013). Working Papers 13-15, Center for 
Economic Studies, U.S. Census Bureau. (Finding that increasing the 
proportion of startup employment within a region increases the 
growth rate of overall employment and wages.); John C. Haltiwanger, 
Ron S. Jarmin, Javier Miranda, ``Who Creates Jobs? Small vs. Large 
vs. Young'' NBER Working Paper No. 16300, August 2010, available at 
http://www.nber.org/papers/w16300 (Findings ``highlight the 
important role of business startups and young businesses in U.S. job 
creation.''); Jose Plehn-Dujowich, ``Product Innovations by Young 
and Small Firms,'' Small Business Administration, Research Summary 
No. 408 available at http://www.sba.gov/advocacy/7540/621871 
(Finding that ``innovation is characteristic of both young and small 
firms''); Tim Kane, ``The Importance of Startups in Job Creation and 
Job Destruction,'' July 2010 Kauffman Foundation Research Series: 
Firm Formation and Economic Growth, available at http://
www.kauffman.org/~/media/kauffman_org/
research%20reports%20and%20covers/2010/07/
firm_formation_importance_of_startups.pdf (showing the importance of 
startups for net job growth in the U.S. economy).
    \13\ Council of Economic Advisers The Economic Effects of 
Administrative Action on Immigration, 18 (November 2014, updated 
February 2015), available at https://www.whitehouse.gov/sites/defaulUfiles/docs/economic_effects_of_immigration_ea_february_2015_update_final_v2.pdf 
(``A body of academic research conducted over the past ten years has 
found that high-skilled immigration has positive effects on 
innovation (as measured by patenting) and on total factor 
productivity.''); Robert Litan, Start-Up Slowdown; Council on 
Foreign Relation, Jan./Feb. 2015, available at https://www.foreignaffairs.com/articles/americas/2014-12-15/start-slowdown; 
Robert Fairlie, Kauffman Index of Entrepreneurial Activity, 1996-
2011, Ewing Marion Kauffman Foundation, March 19, 2012, http://www.kauffman.org/uploadedfiles/kiea_2012_report.pdf (finding that 
immigrants were more than twice as likely as Americans to start new 
businesses in 2011); Madeleine Sumption, ``Visas for Entrepreneurs: 
How Countries Are Seeking Out Immigrant Job Creators,'' June 13, 
2012 Migration Information Source, Migration Institute, available at 
http://www.migrationpolicy.org/article/visas-entrepreneurs-how-countries-are-seeking-out-immigrant-job-creators.
    \14\ Robert Litan, ``Start-Up Slowdown''; Council on Foreign 
Relation, Jan./Feb. 2015, available at https://www.foreignaffairs.com/articles/americas/2014-12-15/start-slowdown; 
Madeleine Sumption, ``Visas for Entrepreneurs: How Countries Are 
Seeking Out Immigrant Job Creators,'' June 13, 2012 Migration 
Information Source, Migration Institute, available at http://www.migrationpolicy.org/article/visas-entrepreneurs-how-countries-are-seeking-out-immigrant-job-creators.
    \15\ Canada Start-up Visa, http://www.cic.gc.ca/english/immigrate/business/start-up/; UK Tier 1 (Entrepreneur) visa, https://www.gov.uk/tier-1-entrepreneur/overview.

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[[Page 60136]]

    Allowing certain qualified entrepreneurs to come to the United 
States as parolees on a case-by-case basis would produce a significant 
public benefit through substantial and positive contributions to 
innovation, economic growth, and job creation. New business ventures, 
especially start-up businesses, are important economic drivers.\16\ A 
significant percentage of the employment generated by high-tech 
manufacturers backed by U.S. venture capital investment has come from 
immigrant-founded companies.\17\ A study on the top 50 venture capital-
funded start-up companies in the United States showed that 48 percent 
had at least one immigrant founder.\18\
---------------------------------------------------------------------------

    \16\ Tim Kane, ``The Importance of Startups in Job Creation and 
Job Destruction,'' July 2010 Kauffman Foundation Research Series: 
Firm Formation and Economic Growth, available at http://
www.kauffman.org/~/media/kauffman_org/
research%20reports%20and%20covers/2010/07/
firm_formation_importance_of_startups.pdf (showing the importance of 
startups for net job growth in the U.S. economy); Edward L. Glaeser, 
Sari Pekkala Kerr, and William R. Kerr, ``Entrepreneurship And Urban 
Growth: An Empirical Assessment With Historical Mines,'' Working 
Papers 13-15, Center for Economic Studies, U.S. Census Bureau, 2013 
(finding that increasing the proportion of startup employment within 
a region increases the growth rate of overall employment and 
wages.); John C. Haltiwanger, Ron S. Jarmin, Javier Miranda, ``Who 
Creates Jobs? Small vs. Large vs: Young,'' NBER Working Paper No. 
16300, August 2010, available at http://www.nber.org/papers/w16300 
(highlighting ``the important role of business startups and young 
businesses in U.S. job creation'').
    \17\ Stuart Anderson & Michaela Platzer, ``American Made: The 
Impact of Immigrant Entrepreneurs and Professionals on U.S. 
Competitiveness,'' National Venture Capital Association, Nov. 2006, 
at 11.
    \18\ Stuart Anderson, ``Immigration Founders and Key Personnel 
in America's 50 Top Venture-Funded Companies,'' Dec. 2010, available 
at http://www.nfap.com/pdf/NFAPPolicyBriefImmigrantFoundersandKeyPersonnelinAmericasTopVentureFundedCompanies.pdf.
---------------------------------------------------------------------------

    Innovative foreign-born entrepreneurs are critical forces in the 
U.S. economy, having founded roughly one-quarter of technology and 
engineering companies created between 2006 and 2012.\19\ As of June 
2013, publicly-traded immigrant-founded venture-backed companies had a 
total market capitalization of $900 billion.\20\ Another study by the 
National Venture Capital Association found that 40 percent of the 
immigrant founders in the survey entered the United States as 
employment-sponsored immigrants, 38 percent as international students, 
13 percent as family-sponsored immigrants, and the rest in other 
categories.\21\ These studies, however, do not reflect the number of 
entrepreneurs who may have decided to start businesses in other 
countries because of the difficulty in locating their businesses in the 
United States due to current immigration policies.\22\ The full 
potential of foreign entrepreneurs to benefit the U.S. economy through, 
for example, cutting-edge research, revenue generation, and job 
creation, is thus unknown. That current immigration policies create 
barriers for foreign entrepreneurs was a primary conclusion of the 
USCIS Entrepreneurs in Residence (EIR) program,\23\ which was launched 
in 2012 to better understand how entrepreneurs fit within existing 
immigration classifications and to make policy recommendations based on 
its findings.
---------------------------------------------------------------------------

    \19\ Vivek Wadhwa, AnnaLee Saxenian & F. Daniel Siciliano, 
``America's New Immigrant Entrepreneurs: Then and Now,'' Kauffman 
Foundation, Oct. 2012, at 3, available at http://www.kauffman.org/what-we-do/research/immigration-and-the-american-economy/americas-new-immigrant-entrepreneurs-then-and-now.
    \20\ Stuart Anderson, ``American Made 2.0: How Immigrant 
Entrepreneurs Continue to Contribute to the U.S. Economy,'' National 
Venture Capital Association, 2013, at 5, available at http://nvca.org/research/stats-studies/.
    \21\ Stuart Anderson, ``American Made 2.0--How Immigrant 
Entrepreneurs Continue to Contribute to the U.S. Economy,'' supra 
28.
    \22\ See, e.g., Vivek Wadhwa, ``The Immigrant Exodus'' 
(Philadelphia: Wharton Digital Press) (2012); Amy Grenier, 
``Majority of U.S. Patents Granted to Foreign Individuals, 
Immigration Impact,'' April 11, 2014, available at http://immigrationimpact.com/2014/04/11/majority-of-u-s-patents-granted-to-foreign-individuals/ (noting difficulties that foreign inventors 
face in coming to and staying in the United States).
    \23\ See http://www.uscis.gov/about-us/entrepreneurs-residence-initiative/entrepreneurs-residence-eir. For the EIR program, USCIS 
recruited both start-up experts from the private sector, using DHS's 
Loaned Executive Program, and internal immigration experts from 
across the agency. Working within the framework of current 
immigration law, the team set out with the overarching goal of 
optimizing existing visa categories used by entrepreneurs to provide 
pathways that are clear, consistent, and aligned with business 
realities.
---------------------------------------------------------------------------

D. Proposal for Parole for Entrepreneurs

    DHS proposes to exercise its parole authority, on a case-by-case 
basis, for entrepreneurs of start-up entities whose parole into the 
United States would provide a significant public benefit through the 
substantial potential of his or her start-up entity for rapid growth 
and job creation. Under the proposed rule, such potential would be 
evidenced by, among other things, the receipt of (1) substantial 
significant capital financing by U.S. investors with established 
records of successful investments or (2) significant awards or grants 
from certain government entities. DHS also proposes alternative 
criteria for applicants who partially meet the proposed thresholds for 
capital financing or government awards or grants and who can provide 
additional reliable and compelling evidence of their entities' 
significant potential for rapid growth and job creation.
    If granted, parole would be authorized for up to 2 years to 
facilitate the entrepreneur's ability to oversee and grow his or her 
start-up entity in the United States. A subsequent request for re-
parole would be considered only if the start-up entity continues to 
show significant promise of rapid growth and job creation through 
substantial and demonstrated increases in qualifying funding (whether 
capital investment or government grants or awards), revenue, or job 
creation. In all cases, whether to parole a particular individual under 
this rule would be a discretionary determination that would be made on 
a case-by-case basis. DHS believes that a regulatory process for 
seeking and granting parole in this business-creation context--
including by establishing criteria for evaluating individual parole 
applications on a case-by-case basis--is important given the 
complexities involved in such adjudications and the need for general 
guidance regarding the relevant factors for eligibility by the start-up 
entrepreneurs, entities, and investors involved.

IV. Proposed Changes

    In this rule, DHS is proposing to add a new section 8 CFR 212.19 to 
its regulations to set forth application procedures and criteria 
specifically for considering parole requests filed by entrepreneurs of 
start-up entities. See proposed 8 CFR 212.19. Consistent with this new 
section, the proposed rule would also: (1) Amend 8 CFR 274a.12(b) to 
authorize entrepreneur parolees to work for their approved start-up 
entities in the United States, see proposed 8 CFR 274a.12(b)(37); (2) 
amend 8 CFR 274a.12(c) to extend eligibility for employment 
authorization to the spouses of entrepreneur parolees, see proposed 8 
CFR 274a.12(c)(34); (3) make a conforming amendment to the employment 
eligibility verification regulations at 8 CFR 274a.2(b)(v)(A)(5) to 
allow entrepreneur parolees to use their foreign passports and Arrival/
Departure Records (Forms I-94) indicating they have entrepreneur parole 
as evidence of identity and employment authorization for purposes of 
meeting the Employment Eligibility Verification (Form I-9) 
requirements, see proposed 8 CFR 274a.2(b)(v)(A)(5); and (4) amend 8 
CFR 103.7(b)(1)(i) to include a fee for the new proposed entrepreneur 
parole application form, see proposed 8 CFR 103.7(b)(1)(i)(FFF).

A. Overview of Parole for Entrepreneurs

    At the proposed section 8 CFR 212.19, DHS sets forth the 
application

[[Page 60137]]

requirements and proposed criteria for extending discretionary parole, 
on a case-by-case basis, to entrepreneurs of start-up entities and 
their spouses and children. As required by statute, the entrepreneur 
must demonstrate that his or her parole into the United States would 
provide a significant public benefit. DHS proposes that an individual 
may meet that standard under this rule by demonstrating that his or her 
start-up entity has substantial potential for rapid growth and job 
creation and that his or her parole would significantly help the entity 
conduct and grow its business here. See proposed new 8 CFR 
212.19(b)(2). As described in more detail below, an applicant would 
generally be able to meet this standard by demonstrating the following:

     The entrepreneur's entity was recently formed (i.e., 
generally within the 3 years immediately preceding the filing date 
of the entrepreneur's application for parole) in the United States 
and has the substantial potential for rapid growth and job creation. 
See proposed 8 CFR 212.19(a)(2).
     The applicant is an entrepreneur in that he or she 
possesses a substantial ownership interest (i.e., generally 15 
percent or more) in the entity and has an active and central role in 
the entity such that he or she is well-positioned to advance the 
entity's business. See proposed 8 CFR 212.19(a)(1).
     The entity has: (1) Received substantial investment 
from U.S. investors with established records of successful 
investments; or (2) received substantial awards or grants from 
certain Federal, State, or local government entities. See proposed 8 
CFR 212.19(b)(2)(ii). Alternatively, an applicant who partially 
meets one or more of these two sub-criteria may be considered for 
parole if he or she provides additional reliable and compelling 
evidence that his or her parole would provide a significant public 
benefit. See proposed 8 CFR 212.19(b)(2)(iii).

    Under the proposed rule, an applicant would file a new application 
specifically tailored for entrepreneurs to demonstrate eligibility for 
parole based upon significant public benefit, along with proposed fees. 
See proposed 8 CFR 212.19(b)(1). Applicants would also be required to 
appear for collection of biometric information. See proposed 8 CFR 
212.19(e). To grant parole, USCIS adjudicators would be required to 
conclude, following an individualized assessment and 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. See proposed 8 CFR 
212.19(d)(1).
    If a determination is made that parole of the applicant would 
provide a significant public benefit, DHS may parole the entrepreneur 
for a period of up to 2 years, with an opportunity to apply for one 
additional period of parole of up to 3 years upon showing that parole 
would continue to provide a significant public benefit. See proposed 8 
CFR 212.19(d)(2) and (h). DHS further proposes that no more than three 
principal entrepreneurs may receive parole with respect to any one 
qualifying entity. See proposed 8 CFR 212.19(f).
    Following is a detailed discussion of the specific provisions 
proposed by DHS in this rulemaking.

B. Criteria for Initial Parole Consideration

    To be considered for an initial grant of parole based on 
significant public benefit under this rule, DHS is proposing that the 
individual generally meet the following criteria:
1. Recent Formation of a Start-Up Entity
    The key criterion under this proposed rule is the formation of a 
new entity in the United States that has substantial potential to 
rapidly increase revenue and create jobs for U.S. workers. DHS thus 
proposes that an applicant for parole under this rule be able to show 
that his or her start-up entity was recently formed in the United 
States, has lawfully done business during any period of operation since 
its date of formation, and has the substantial potential to experience 
rapid growth and job creation, including through the significant 
attraction of capital investment or government awards or grants. See 
proposed 8 CFR 212.19(a)(2). An entity that is the basis for a request 
for parole under this section may be considered ``recently formed'' if 
it is a U.S. business entity that was created within the 3 years 
immediately preceding the filing date of the entrepreneur's application 
for parole. Id.
    As a preliminary matter, DHS proposes that a proffered start-up 
entity must meet the definition of ``U.S. business entity'' at proposed 
8 CFR 212.19(a)(9). The term is defined as any corporation, limited 
liability company, partnership, or other entity that is organized under 
Federal law or the laws of any State,\24\ 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. See proposed 8 CFR 
212.19(a)(9). DHS believes that this definition appropriately captures 
the range of start-up entities that are formed in the United States by 
entrepreneurs and that have the substantial potential for rapid growth 
and job creation. DHS is proposing to exclude an entity that is an 
investment vehicle primarily engaged in the offer, purchase, sale or 
trading of securities, futures contracts, derivatives or similar 
instruments to ensure that the start-up entities receiving investment 
capital under this proposed rule are not merely serving as a conduit 
for reinvestment, but providing or seeking to provide goods or services 
with the substantial potential for rapid growth and job creation.
---------------------------------------------------------------------------

    \24\ ``State'' is a defined term at INA section 101(a)(36). In 
addition to the 50 States, the term ``includes the District of 
Columbia, Puerto Rico, Guam, the Virgin Islands of the United 
States, and the Commonwealth of the Northern Mariana Islands.''
---------------------------------------------------------------------------

    As noted above, an entity must be recently formed in the United 
States to be considered a start-up entity for purposes of this rule. 
See proposed 8 CFR 212.19(a)(2). DHS proposes that an entity that is 
the basis for seeking parole under this rule may be considered recently 
formed if it is less than 3 years old at the time of filing the parole 
application.\25\ Id. This limitation reflects the Department's 
intention for parole under this proposed rule to incentivize and 
support the creation and growth of new businesses in the United States, 
so that the country may benefit from their 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 ``goes beyond a company just getting off the ground.'' 
\26\ DHS believes that limiting the definition of ``start-up'' in this 
proposed rule to entities that are less than 3 years old at the time 
the parole application is filed is reasonable to 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, obtain qualifying 
levels of investor financing (which may occur in several rounds) or 
government grants or awards, and still meet the definition of a 
``start-up entity'' under this rule.
---------------------------------------------------------------------------

    \25\ With respect to certain proposed definitions at 8 CFR 
212.19(a)(3) and (a)(5), which discuss other entities that receive 
grants, awards, or investments, an entity may be considered recently 
formed if it was created within the 3 years immediately preceding 
the receipt of a relevant grant, award, or investment. See proposed 
8 CFR 212.19(a)(2).
    \26\ 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.'').

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[[Page 60138]]

    DHS further proposes to consider parole under this rule only where 
it is demonstrated that the start-up entity has been operating lawfully 
in the United States since its formation. See proposed 8 CFR 
212.19(a)(2). This limitation is intended to protect the integrity of 
this new parole process. Part of the parole determination would 
therefore include a review by DHS of the start-up entity's activities 
from the time of its formation in the United States.
    Finally, DHS proposes that the start-up entity must be of a type 
that has the substantial potential to experience rapid growth and job 
creation, including through the significant attraction of capital 
investment or government awards or grants. This factor is intended to 
capture the types of start-up entities that are most likely to provide 
a significant public benefit, while excluding entities without such 
potential--such as small businesses with limited growth potential 
created by entrepreneurs for the sole or primary purpose of providing 
income to the entrepreneurs and their families.\27\ Because this latter 
type of business is less likely to experience rapid growth 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.
---------------------------------------------------------------------------

    \27\ 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.
---------------------------------------------------------------------------

    DHS anticipates that an applicant seeking parole under this rule 
would be able to meet the above criteria by providing various types of 
evidence. As part of the application process, an applicant would 
generally be expected to submit supporting documentation concerning the 
entity's business and its substantial potential for rapid growth and 
job creation (as well as the entrepreneur's day-to-day role in the 
business). See proposed 8 CFR 212.19(b)(2)(ii)(A). In addition to 
meeting the capital investment or government funding criteria discussed 
further below, such additional documentation may include:

     Evidence of capital investments from qualified 
investors, or government awards or grants, other than those relied 
on to satisfy the requirements of 8 CFR 212.19(b)(2)(ii)(B);
     letters from relevant government entities, qualified 
investors, or established business associations with knowledge of 
the entity's research, products or services and/or the applicant's 
knowledge, skills or experience that would advance the entity's 
business;
     newspaper articles or other similar evidence that the 
applicant or entity has received significant attention or 
recognition;
     evidence 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;
     evidence of significant revenue generation and growth 
in revenue;
     patent awards or other documents indicating that the 
entity or applicant is focused on developing new technologies or 
cutting-edge research;
     evidence that the applicant has played an active and 
central role in the success of prior start-up entities;
     degrees or other documentation indicating that the 
applicant has knowledge, skills, or experience that would 
significantly advance the entity's business;
     payroll, bookkeeping, salary, or bank records or other 
documents related to jobs created prior to filing the request for 
parole; and
     any other relevant, probative, and credible evidence 
indicating the entity's potential for growth and/or the applicant's 
ability to advance the entity's business in the United States.

DHS believes that such evidence would assist USCIS officers in 
determining whether an entity has substantial potential for rapid 
growth and job creation and, ultimately, whether an applicant has met 
the required standard for parole and merits a favorable exercise of 
discretion.
    DHS welcomes public comment on the proposed definitions of the 
terms ``start-up entity'' and ``U.S. business entity,'' as well as the 
requirement that the entity be formed within the 3 years preceding a 
request for parole. DHS also welcomes comments on the types of evidence 
that may be considered when determining whether such provisions have 
been met, including alternative suggestions on how applicants may be 
able to demonstrate eligibility.
2. Applicant Is an Entrepreneur Who Is Well-Positioned To Advance the 
Entity's Business
    DHS is proposing that to be considered for parole under this rule, 
an applicant must be an entrepreneur who is well-positioned to advance 
his or her start-up entity's business. Specifically, DHS proposes that 
an applicant be able to demonstrate that he or she is an 
``entrepreneur'' as defined at 8 CFR 212.19(a)(1). This definition 
would require 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 his 
or her knowledge, skills, or experience will substantially assist the 
entity with the growth and success of its business. See proposed 8 CFR 
212.19(a)(1). The definition further provides that for purposes of this 
rule, an individual may be considered to possess a substantial 
ownership interest if he or she possesses at least a 15 percent 
ownership stake in the start-up entity at the time of adjudication of 
the initial grant of parole (and maintains at least a 10 percent 
ownership stake in the start-up entity at all times during the parole 
period, including any period of re-parole). Id.
    DHS believes these criteria are appropriate, as active ownership 
and participation provide stronger justifications for parole based on 
significant public benefit than investment alone. To establish that 
parole would serve a significant public benefit, DHS believes that the 
applicant should 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 provide related benefits in 
the United States, including by conducting research and development, 
increasing revenue, or creating jobs. DHS thus adopts the common 
meaning of the term ``entrepreneur,'' which embodies the concept of 
active, material participation by an individual in the operations and 
growth of a new business entity. See Black's Law Dictionary (9th ed. 
2009) (defining ``entrepreneur'' as ``[o]ne who initiates and assumes 
the financial risks of a new enterprise and who usually undertakes its 
management''). Whether an applicant has an ``active and central role'' 
will be determined based on the totality of the evidence provided.
    The ownership criterion proposed by DHS in this rule is also 
essential for connecting the individual to the start-up entity 
providing the significant public benefit. DHS has determined that a 
minimum 15 percent ownership interest is a reasonable threshold for 
seeking parole under this rule. DHS recognizes that entrepreneurs may 
possess larger equity stakes in the start-up entity at the time of 
formation or during initial seed rounds of financing (often ranging 
from 50-100 percent).\28\ This equity stake, however, may be diluted 
significantly during financing rounds, or by the provision of equity 
compensation to key

[[Page 60139]]

personnel within the entity. DHS further recognizes that start-up 
entities are not limited to one entrepreneur, and that there may be 
instances when a team of entrepreneurs will form the start-up entity. 
The specific equity stake by the entrepreneur in the start-up entity 
will therefore vary based on the particular facts and circumstances of 
each case. DHS thus believes establishing a minimum 15 percent 
threshold with respect to ownership adequately accounts for the 
possibility of equity dilution for the reasons described above, while 
ensuring that the individual continues to have a substantial ownership 
interest in, and assumes more than a nominal financial risk related to, 
the entity.
---------------------------------------------------------------------------

    \28\ ``Venture Capital,'' Encyclopedia of Small Business, 2007. 
Retrieved September 22, 2015 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-2687200596.html (``The percentage of 
equity ownership required by a venture capital firm can range from 
10 percent to 80 percent, depending on the amount of capital 
provided and the anticipated return. But most venture capital 
organizations want to secure equity in the 30-50 percent range so 
that the small business owners still have an incentive to grow the 
business. Since venture capital is in effect an investment in a 
small business' management team, the venture capitalists usually 
want to leave management with some control.'').
---------------------------------------------------------------------------

    DHS anticipates that an applicant would be able to demonstrate 
sufficient satisfaction of the above criteria by providing various 
forms of evidence. With respect to ownership, DHS anticipates that an 
applicant would be able to provide copies of legal or financial 
documents--such as formation and organizational documents, equity 
certificates, equity ledgers, ownership schedules, or capitalization 
tables--indicating the applicant's ownership interest in the start-up 
entity. With respect to the applicant's role within the entity, DHS 
expects that an applicant would provide supporting documentation of his 
or her role within the entity, as well as the knowledge and experience 
that is central to the entity's business. Such supporting documentation 
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;
     newspaper articles or other similar evidence that the 
applicant has received significant attention and recognition;
     evidence 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;
     evidence that the applicant has played an active and 
central role in the success of prior start-up entities;
     degrees or other documentation indicating that the 
applicant has knowledge, skills, or experience that would 
significantly advance the entity's business; and
     any other relevant, probative, and credible evidence 
indicating the applicant's ability to advance the entity's business 
in the United States.

DHS welcomes public comments on all aspects of these standards, 
including the definition of the term ``entrepreneur.'' DHS also 
welcomes comment on the types of evidence that may be considered when 
determining whether an applicant is an entrepreneur, including 
alternative suggestions on how applicants may be able to demonstrate 
eligibility.
3. Capital Investment or Government Funding Criteria
    DHS is also proposing that an individual who seeks parole under 
this rule must validate the entity's substantial potential for rapid 
growth and job creation by providing additional reliable evidence of 
such potential. DHS is proposing that this requirement may generally be 
satisfied by demonstrating that the entity has: (1) Received 
substantial investment of capital from U.S. investors with established 
records of successful investments; or (2) received substantial awards 
or grants for purposes of economic development, research and 
development, or job creation from Federal, State, or local government 
entities that regularly provide such awards or grants to U.S. 
businesses. See proposed 8 CFR 212.19(b)(2)(ii)(B). DHS further 
proposes alternative criteria under which an applicant who partially 
meets one or more of these two criteria may be considered for 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. See proposed 8 CFR 212.19(b)(2)(iii).
    These investment and funding criteria are proposed to serve as 
reliable indicators of an 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. 
Meeting these criteria, however, is intended to supplement--and not 
supplant--the need to provide other supporting evidence (such as that 
described in section IV.B.1) establishing that the applicant meets the 
general criteria for a grant of parole under the proposed rule. Even if 
an entity meets the investment or funding criteria discussed herein, 
additional evidence would generally assist USCIS officers in 
determining whether an applicant has met the required standard for 
parole and merits a favorable exercise of discretion. Among other 
things, such supplementary evidence may: provide additional external 
validation of the start-up entity (e.g., receiving additional funding 
from a government entity, being accepted into a start-up accelerator, 
generating significant revenue, or creating jobs); show that the entity 
works in fields important to economic growth (e.g., creating new 
technologies or engaging in cutting-edge research); or demonstrate that 
the entrepreneur has knowledge, skills, or experience that would 
substantially advance the entity's business (e.g., successfully leading 
prior start-up entities, having advanced degrees in the appropriate 
field, or establishing critical patents). DHS also anticipates that 
such additional evidence would be available in the majority of cases 
involving recently formed entities that have substantial potential for 
growth and that otherwise meet the standards proposed in this 
rulemaking.
a. Substantial Investment From Qualified U.S. Investors
    DHS proposes to allow an applicant to demonstrate his or her 
entity's substantial potential for rapid growth and job creation by 
showing that the entity has received substantial investment of capital 
from established U.S. investors (such as venture capital firms, angel 
investors, or start-up accelerators) with a history of successful 
investments in start-up entities. See proposed 8 CFR 
212.19(b)(2)(ii)(B). DHS proposes that investments may generally be 
considered ``substantial'' with respect to an initial application for 
entrepreneur parole if total investments, which can be from one or more 
qualified U.S. investors, meet or exceed $345,000. Id. DHS further 
proposes that qualifying investors include only those investors who 
have a history of making similar or greater investments on a regular 
basis over the last 5 years 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 proposed 
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 may serve as a strong indication of an entity's potential to 
positively impact the U.S. economy and labor force.
    DHS is proposing a general qualified investment threshold of 
$345,000, which DHS believes is a reasonable minimum investment amount 
that will serve as a reliable external validation factor by qualified 
investors.\29\ DHS

[[Page 60140]]

reached this figure after analyzing available data on angel 
investments--the largest source of start-up capital for innovative 
firms--as well as initial or ``seed'' round investments from venture 
capital firms and start-up accelerators.\30\ DHS also analyzed other 
available data on capital amounts used to create new businesses, and 
consulted with the Small Business Administration (SBA). In determining 
a minimum investment amount applicable to all qualified investors 
(e.g., venture capital firms,\31\ angel investors,\32\ and start-up 
accelerators \33\), the $345,000 amount is generally on par with, based 
on data that DHS reviewed, the combined capital investment typically 
obtained in early rounds of investment from venture capital firms or 
angel investors.\34\
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    \29\ The $345,000 figure is rounded from the actual figure 
$345,390, which is the 2015 average for all angel investments (the 
largest source of start-up capital for innovative firms) received by 
start-up entities. See Jeffrey Sohl, ``The Angel Investor Market in 
2015: A Buyers' Market,'' Center for Venture Research, May 25, 2015, 
available at: https://paulcollege.unh.edu/sites/paulcollege.unh.edu/files/webform/Full%20Year%202015%20Analysis%20Report.pdf. The 
rounded $345,000 figure from 2015 is also very close to the $342,000 
grand mean for the period 2012-2015, id., and it is corroborated by 
other sources. For example, according to a report from the business 
Web site Fundable, which specializes in startup finance, the average 
angel-financed firm receives approximately $333,000 in angel 
capital. This report can be found at: https://www.fundable.com/learn/resources/guides/investor-guide/types-of-investors.
    \30\ DHS is aware that there is a wide range of investment 
amounts for angel, venture, and accelerator investment applied to 
startups. For example, DHS analysis of data from SeedDB reveals that 
some large accelerators provide initial investments of less than 
$100,000. DHS analysis reveals that angel investments that are 
conducted in groups, or that are co-invested with venture or other 
institutional investors, have ranged from about $350,000 to $725,000 
since 2013, with an up-trend over the last two years, and several 
data sources reveal medians of about $500,000. Seed and startup 
venture investments are generally over $1,000,000. DHS believes that 
the $345,000 angel average for 2015 is reasonable because it 
represents nearly a mid-point across the various data and sources 
DHS has reviewed for such investments, is publicly available from a 
reputable source, and includes all angel investments. Additional 
details on the Seed DB accelerators data are found in Section C, 
``An Alternative Estimate of Entrepreneurs Based on Investment 
Structures,'' in the ensuing ``Statutory and Regulatory 
Requirements'' section of this notice. Mean and median figures for 
venture backed and angel group can be found in the following 
sources: http://www.ey.com/Publication/vwLUAssets/
Venture_Capital_Insights_4Q14_-_January_2015/$FILE/ey-venture-
capital-insights-4Q14.pdf; http://www.angelresourceinstitute.org/~/
media/Files/Halo%20Report%202015%20Annual%20vFinal.pdf; and http://www.inc.com/linkedin/tomasz-tunguz/inflation-deflation-startup-fundraising-market-tomasz-tunguz.html.
    \31\ Government, semi-government, or private firm that provides 
startup or growth equity capital and/or loan capital to promising 
ventures for returns that are higher than market interest rates. See 
http://www.businessdictionary.com/definition/venture-capital-firm.html.
    \32\ Business ``angels'' are high net worth individual investors 
who seek high returns through private investments in start-up 
companies. See https://www.sba.gov/content/venture-capital#Angel 
Investors.
    \33\ Business entities that make seed-stage investments in 
promising companies in exchange for equity as part of a fixed-term, 
cohort-based program, including mentorship and educational 
components, that culminates in a public pitch event or demo day. See 
https://www.sba.gov/advocacy/innovation-accelerators-defining-characteristics-among-startup-assistance-organizations.
    \34\ See note 29.
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    DHS is also proposing a requirement that the substantial investment 
be received within the 365 days immediately preceding the filing of the 
application for initial parole. In addition to addressing potential 
fraud concerns, this requirement assists in validating the entity's 
substantial potential for rapid growth and job creation and, 
ultimately, of the significant public benefit that a grant of parole to 
the entrepreneur would provide. This requirement ensures that a 
qualified investor or government entity has recently validated (within 
365 days) the start-up entity's potential for rapid growth and job 
creation. However, DHS recognizes that start-up investment is a rapidly 
evolving field, and welcomes additional feedback, including data on 
trends in investment that may be available, as such feedback and data 
may impact the minimum investment threshold in the Department's final 
rule.
    As noted above, in order to meet the investment criteria for 
consideration of parole under this proposed rule, the $345,000 total 
investment must be made by one or more qualified U.S. investors. See 
proposed 8 CFR 212.19(a)(5) and (b)(2)(ii)(B)(1). DHS proposes to 
define ``qualified investor'' as either an individual or an 
organization. See proposed 8 CFR 212.19(a)(5). If the investor is an 
individual, the investor would need to be a U.S. citizen or lawful 
permanent resident. Id. If the investor is an organization, the 
investor would need to be located in the United States and operate 
through a legal entity organized under the laws of the United States 
that is majority owned and controlled, directly or indirectly, by U.S. 
citizens or lawful permanent residents. Id. In either case, such 
investor could not have 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 services, or otherwise found to have participated in 
the offer or sale of securities or provision of such services in 
violation of law. See proposed 8 CFR 212.19(a)(5).
    In addition, DHS proposes to limit qualifying investors to those 
who have an established record of successful investments in start-up 
entities. DHS proposes that such a record would include, during the 5-
year period prior to the date of filing of the parole application, 1 or 
more investments in other start-up entities in at least 3 separate 
calendar years in exchange for equity or convertible debt comprising a 
total of no less than $1,000,000.\35\ See proposed 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 proposed 8 CFR 212.19(a)(5)(ii).
---------------------------------------------------------------------------

    \35\ ``Venture Capital,'' Encyclopedia of Small Business, 2007. 
Retrieved September 22, 2015 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-2687200596.html (``Most venture capital 
firms look for investment opportunities in the $250,000 to $2 
million range.'')
---------------------------------------------------------------------------

    These criteria are intended to ensure that investors are bona fide, 
and thus to prevent fraud and 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 indication of the 
start-up entity's substantial potential for rapid growth and job 
creation. By requiring an investor to have a track record of investing 
substantial funds in start-up entities that subsequently achieve 
significant revenue and job creation, these provisions would enhance 
the Department's ability to have confidence in the investments made by 
qualified investors as reliable validation of a start-up entity's 
potential. At the same time, the criteria would mitigate potential 
misuse of the parole process, including by individuals or entities that 
may claim to be bona fide investors to conceal fraud or other illicit 
activity. DHS expects that individuals and entities that meet these 
criteria would include existing and bona fide start-up investors that 
are known to operate successfully in the business community--including 
established venture capital firms, angel investors, and start-up 
accelerators.
    Finally, DHS proposes to limit ``qualified investments'' under this 
rule to investments of lawfully derived capital in start-up entities 
through the purchase of equity or convertible debt issued by such 
entities. See proposed 8 CFR 212.19(a)(4). DHS proposes that a 
qualified investment would not include an investment from: (1) The 
entrepreneur him or herself; (2) the

[[Page 60141]]

parents, spouse, brother, sister, son, or daughter of such 
entrepreneur; or (3) 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. Id. DHS is proposing these 
exclusions to help ensure that the qualified investment was acquired 
through an arms-length transaction and is a bona fide investment. Any 
investment that does not meet the definition of ``qualified 
investment'' will not count toward the criteria to meet the proposed 
rule's minimum investment threshold.
    DHS welcomes comments on all aspects of this section, including the 
proposed investment threshold, any potential alternative amounts for 
that threshold, and additional data. For comments recommending 
investment threshold amounts, the Department requests that commenters 
provide rationales and data, if available, to support their 
recommendations.
b. Substantial Government Awards or Grants
    DHS proposes that an applicant may alternatively demonstrate a 
start-up entity's substantial potential for rapid growth and job 
creation by showing that the entity has received significant funding in 
the form of awards or grants from Federal, State or local government 
entities. DHS proposes that to satisfy this criterion, the awards or 
grants generally would need to be made by one or more Federal, State, 
or local government entities that regularly provide such funding to 
U.S. businesses for economic development, innovation, research and 
development, or job creation reasons. DHS proposes to exclude any 
contractual commitment for goods or services, including any contracts 
that might appear to be, or could be made to look like, an award or 
grant. DHS believes this exclusion is reasonable since a contract for 
goods and services with a Federal, State or local government entity 
would typically provide a direct benefit to that government entity and 
not a public benefit, such as encouraging economic development and 
innovation, that an award or grant would provide as required by this 
proposed rule. See proposed 8 CFR 212.19(a)(3). DHS also proposes that 
to be considered substantial, such awards or grants generally would 
need to total $100,000 or more. See proposed 8 CFR 
212.19(b)(2)(ii)(B)(2).
    In the United States today, a range of Federal, State, and local 
government entities, including State or local economic development 
corporations (EDCs), evaluate U.S. businesses and provide awards or 
grants when such funding is deemed to be in the public interest.\36\ 
DHS believes that significant funding from such a government entity 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. Because such 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 is generally a compelling 
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. For these reasons, DHS believes it is 
reasonable to establish a lower threshold amount for government funding 
in comparison to the previously discussed threshold amount for private 
investment. DHS proposes a general $100,000 minimum government funding 
threshold based on the above and the fact that seed capital awards 
(``Phase I'' awards) from the Small Business Innovation Research (SBIR) 
program are generally below $150,000.\37\
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    \36\ See, e.g., U.S. Small Business Administration, https://www.sbir.gov (describing Small Business Innovation Research (SBIR) 
and Small Business Technology Transfer (STTR) programs, which 
provide early-stage capital for innovative small companies in the 
United States) and National Institutes of Health, https://sbir.nih.gov/ (describing healthcare opportunities under SBIR and 
STTR); U.S. Economic Development Association (EDA), Regional 
Innovation Strategies Program (RIS), http://www.eda.gov/oie/ris/ 
(providing grants to cities and local EDCs, among others, to fund 
startups); Energy Innovations Small Grant Program, 
www.energy.ca.gov/research/innovations (providing State grants of up 
to $150,000 to small businesses, among others, to research 
innovative energy concepts); Startup Philadelphia Call for Ideas, 
http://www.startupphl.com/startup-phl-call-for-ideas (partnership 
between City of Philadelphia and the Philadelphia Industrial 
Development Corporation to provide $500,000 to grow the startup and 
early-stage business economy in Philadelphia).
    \37\ 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 encourages 
small businesses to market the SBIR technology in the private 
sector. 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.
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    DHS welcomes comments on all aspects of this section, including the 
proposed government funding threshold, any potential alternative 
amounts for that threshold, and additional data. For comments 
recommending government funding threshold amounts, the Department 
requests that commenters provide rationales and data, if available, to 
support their recommendations.
c. Alternative Criteria for Parole Consideration
    Additionally, DHS proposes that an applicant who only partially 
meets one or both of the above investment or government funding sub-
criteria for parole under this rule may still be considered for parole 
under this rule in certain limited circumstances. See proposed 8 CFR 
212.19(b)(2)(iii). Specifically, DHS would consider parole for such an 
applicant if the applicant provides additional ``reliable and 
compelling'' evidence of the entity's substantial potential for rapid 
growth and job creation. See proposed 8 CFR 212.19(b)(2)(iii). 
Importantly, such parole would not be available to applicants who are 
unable to demonstrate that their start-up entities have received a 
substantial amount of U.S. capital investment or government funding. 
Rather, the applicant would need to show as a preliminary matter that 
his or her entity has received a substantial level of capital 
investment or government funding, although less than $345,000 or 
$100,000, respectively. The applicant would also need to further 
validate the entity's substantial potential for rapid growth and job 
creation by submitting additional evidence that DHS determines to be 
both reliable and compelling. DHS proposes that such evidence be 
reliable and compelling in its own right to overcome the applicant's 
inability to fully meet the threshold criteria otherwise required under 
the proposed rule.
    DHS is not proposing to define the specific types of evidence that 
may be deemed ``reliable and compelling'' at this time, as the 
Department 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. But DHS believes 
that to meet the parole standard in this context without meeting the 
threshold criteria,

[[Page 60142]]

such additional evidence would need to be particularly persuasive. In 
other words, although all applicants for entrepreneur parole would be 
expected to provide supplementary evidence indicating that their parole 
would serve a significant public benefit, applicants who only partially 
meet the threshold criteria mentioned above would need to provide other 
reliable and compelling evidence to ensure that the totality of the 
evidence demonstrates that the start-up entity has the substantial 
potential for rapid growth and job creation.
    DHS anticipates that the necessary amount and requisite evidentiary 
weight of such additional evidence would depend on the degree to which 
an applicant meets one or both of the threshold sub-criteria related to 
capital investment or government funding. For example, an applicant 
whose entity has received $200,000 in qualifying capital investment 
would be expected to provide more validating evidence than an applicant 
whose entity received $300,000 in such investment. Moreover, DHS may 
give particular weight to evidence that tends to serve as a strong 
validation of the entity's substantial potential for rapid growth and 
job creation. For example, evidence that an entity has been selected to 
participate in, is participating in, or has graduated from one or more 
established and reputable start-up accelerators (or incubators) may 
serve as, depending on the accelerator's success rate and other 
factors, a strong indicator of the entity's potential. With respect to 
start-up accelerators, 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.
    Ultimately, the USCIS adjudicator would be required to determine 
whether such additional evidence--in conjunction with the entity's 
substantial capital investment or government funding, among other 
factors--is sufficient to establish that the applicant's parole into 
the United States will provide a significant public benefit (and that 
the applicant merits a favorable exercise of discretion). This approach 
is consistent with the discretionary nature of the Secretary's 
statutory parole authority and the fact that each parole request will 
be adjudicated, on a case-by-case basis, after considering the 
particularized facts of each case. DHS invites public comment on the 
types of reliable and compelling evidence that may warrant a 
discretionary grant of parole in such cases.
    As noted above, DHS also invites public comment on alternatives to 
the proposed investment amount and government funding thresholds that 
applicants may use to demonstrate a start-up entity's substantial 
potential for rapid growth and job creation and that may serve as a 
principal basis for seeking parole under this rule. Commenters are 
invited to submit comments on whether significant revenue generation, 
participation in established and reputable start-up accelerators, or 
any other significant external validation factor should be included as 
a principal basis for seeking parole under this rule. DHS specifically 
invites comment on whether applicants can adequately demonstrate the 
future substantial potential for rapid growth and job creation through 
established records of revenue generation, revenue growth, job 
creation, or any combination of these and other factors. Commenters 
should recommend threshold levels for obtaining parole under suggested 
criteria, data to support the recommended alternative thresholds, and 
the types of reliable evidence that applicants may submit to 
substantiate their claims. Comments should include any relevant data to 
substantiate recommendations, if available.

C. Application Requirements for Initial Period of Parole

1. Filing the Application for Entrepreneur Parole (Form I-941)
    DHS is proposing to establish new application requirements for 
entrepreneurs seeking parole under this rule. Prior to appearing before 
DHS as an applicant for admission requesting parole, entrepreneurs 
would be required to file with USCIS an Application for Entrepreneur 
Parole (Form I-941 or successor form), established by this rulemaking, 
along with supporting documentation. This application is designed to 
capture information pertaining to the criteria that are specific to 
parole requests filed under this rule. USCIS would accept Applications 
for Entrepreneur Parole filed from within the United States or outside 
the United States. DHS is proposing an application filing fee of $1200. 
See proposed 8 CFR 103.7(b)(1)(i)(FFF). In addition to filing the 
application, supporting documentation, and filing fee, applicants would 
be required to submit a biometric services fee as prescribed by 8 CFR 
103.7(b)(1)(i)(C).
2. Requirement To Appear for Submission of Biometric Information
    DHS proposes that all individuals filing the Application for 
Entrepreneur Parole would be required to appear for collection of their 
biometric information, including fingerprints and photographs. See 
proposed 8 CFR 212.19(e). DHS is proposing a biometric collection 
requirement so that background checks can be completed for each 
applicant, and so that any necessary travel documents can be produced. 
As noted above, applicants would be required to pay the fee for 
biometric services at the time of filing the Application for 
Entrepreneur Parole.
    As is currently the case for other applicants for parole, the 
location for the collection of biometric information will depend on 
whether the applicant filed the application from within the United 
States or outside the United States. See form instructions to 
Application for Entrepreneur Parole (Form I-941). Applicants applying 
from within the United States will be required to appear at a USCIS 
Application Support Center (ASC) for submission of biometrics. 
Applicants applying from outside the United States may be required to 
appear at an overseas USCIS office. Applicants who will be receiving 
their travel documents overseas from a Department of State Consulate 
(or Embassy) will have their biometrics taken after their parole is 
authorized, but before their travel document is issued. Under current 
DHS regulations, DHS may determine that an application has been 
abandoned and thus should be denied if the applicant fails to appear at 
the biometrics appointment or otherwise fails to provide required 
biometric information. See 8 CFR 103.2(b)(13)(ii).
3. Income-Related Condition on Parole
    Under the process proposed by this rule, DHS would consider 
granting parole to individuals whose enterprises have the substantial 
potential for rapid growth and job creation, including through the 
development of new technologies or the pursuit of cutting-edge 
research. To further ensure this is the case, and in addition to the 
high threshold criteria discussed above, DHS is proposing that an 
individual who is paroled into the United States under this rule must, 
as a condition of that parole, maintain household income while in the 
United States 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 (HHS). See proposed 8 CFR 212.19(i). DHS is

[[Page 60143]]

further proposing to require the applicant to attest, as part of the 
Application for Entrepreneur Parole, that he or she will maintain 
household income at this level as a condition of parole and to provide 
evidence that he or she satisfied this condition if applying for re-
parole. Id.
    This income threshold is intended to establish that applicants 
seeking parole under this rule will have sufficient personal economic 
stability so as to better ensure that they will make significant 
economic and related contributions to the United States. The income 
threshold and time limits on parole also mean that individuals eligible 
for parole under this rule would generally not be eligible for Federal 
public benefits or premium tax credits under the Health Insurance 
Marketplace of the Affordable Care Act.\38\ Under the proposed rule, 
DHS would be authorized to terminate parole for any individual who 
fails to maintain the threshold income level. See proposed new 8 CFR 
212.19(k)(3)(iv). DHS would request verification of the parolee's 
household income when the parolee applies for re-parole, if applicable, 
or subsequent to any material change notification submitted by the 
parolee to USCIS.
---------------------------------------------------------------------------

    \38\ Although individuals who are granted parole for more than 
one year become ``qualified aliens'' for the purpose of applying for 
such benefits, see 8 U.S.C. 1641(b), such individuals must generally 
be ``qualified aliens'' for at least 5 years before becoming 
eligible for those benefits, see 8 U.S.C. 1613. Individuals paroled 
under this rule will thus generally not qualify for such benefits.
---------------------------------------------------------------------------

    DHS welcomes comment on the proposed income threshold.
4. Adjudication of Applications
    When adjudicating the Application for Entrepreneur Parole, DHS is 
proposing that USCIS will examine whether the entrepreneur has 
demonstrated, through credible and probative evidence, that he or she 
warrants a favorable exercise of the Secretary's discretion. See 
proposed new 8 CFR 212.19(d)(1). If the entrepreneur meets the criteria 
for parole under the proposed rule, and a favorable exercise of 
discretion is warranted, USCIS may approve the request for parole. Id. 
Moreover, in determining whether an individual applicant's parole would 
provide a significant public benefit and whether to favorably exercise 
the Secretary's discretion in that individual case, USCIS will consider 
and weigh all evidence, including any derogatory evidence or 
information, such as but not limited to evidence of criminal history or 
other adverse factors. Id.
    If USCIS, in its discretion, determines that the applicant does not 
warrant a grant of parole under the proposed rule, it may deny the 
application. See proposed 8 CFR 212.19(b) and (c). DHS is also 
proposing that there would be no right of appeal following a decision 
to deny entrepreneur parole, just as is the case currently with other 
parole requests. See proposed 8 CFR 212.19(d)(4). DHS is also proposing 
that applicants be precluded from filing motions to reopen or 
reconsideration under 8 CFR 103.5(a)(1). Id.
    DHS, however, proposes to retain its authority and discretion to 
reopen or reconsider a decision only on its own motion. See proposed 8 
CFR 212.19(d)(4). For the parole process proposed in this rulemaking, 
DHS may, in its discretion, reopen a decision and deny or approve 
parole at any time if DHS finds that the decision was issued in error. 
If USCIS determines that approval of an Application for Entrepreneur 
Parole was made in error, parole may be revoked. DHS would follow the 
requirements of 8 CFR 103.5(a)(5) before reopening a case and denying a 
parole application.
    Because the determination to grant or deny a request for parole is 
a discretionary determination, the parole process proposed in this 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. Parolees under this proposal 
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 direct a 
start-up entity or for other reasons.
5. Limitation on Number of Entrepreneur Parolees per Start-Up Entity
    DHS proposes to limit the number of entrepreneurs who may be 
granted parole under this rule with the same start-up entity. DHS 
recognizes that a start-up entity may be developed by more than one 
entrepreneur. DHS also believes that it would be difficult for a large 
number of entrepreneurs associated with the same start-up entity to 
each meet the proposed criteria and comply with the proposed conditions 
while ultimately developing a successful business in the United States. 
DHS therefore believes that imposing a limit on the number of 
entrepreneurs who may be granted parole based on the same start-up 
entity is consistent with ensuring that each entrepreneur's parole will 
provide a significant public benefit. Specifically, DHS is proposing 
that parole may be granted to no more than 3 entrepreneurs per start-up 
entity. See proposed 8 CFR 212.19(f).
    This limitation is intended to strengthen the integrity of the 
proposed entrepreneur parole process in various ways. Among other 
things, limiting the number of individuals who may be granted parole 
under this rule with respect to the same start-up entity will be an 
additional means of preventing an entity from being used as a means to 
fraudulently allow individuals to enter the United States. Such a 
limit, for example, diminishes the incentive to dilute equity in the 
start-up entity as a means to fraudulently acquire parole for 
individuals who are not bona fide entrepreneurs. Such a limit will also 
help ensure that the tangible benefits that may flow from the start-up 
entity's success in the United States--such as rapid revenue generation 
and job creation--are more likely to inure to the United States and its 
workers. Relatedly, DHS is concerned that 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 proposed parole 
process.\39\ To facilitate this determination, DHS is proposing to 
require an applicant to provide information on the application about 
any other individuals who have applied for or been granted parole based 
on the same start-up entity.
---------------------------------------------------------------------------

    \39\ Scaling Startup Genome Report: premature scaling v 1.2 
(edited March 2012). Copyright 2011, Startup Genome Report Extra on 
Premature, Max Marmer, CSO Startup Genome, Bjoern Lasse Herrmann, 
CEO Startup Genome, Ertan Dogrultan, CTO Startup Genome, Ron Berman, 
Ph.D. at UC Berkeley (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.
---------------------------------------------------------------------------

    DHS welcomes comments on the proposed limitation on the number of 
entrepreneurs who can qualify for parole under this rule with the same 
start-up entity, including alternative proposals.
6. Authorized Period for Initial Grant of Entrepreneur Parole
    DHS proposes that applicants who are granted entrepreneur parole 
may be

[[Page 60144]]

authorized for an initial parole period of up to 2 years. See proposed 
new 8 CFR 212.19(d)(2). DHS has determined that entrepreneurs paroled 
under this rule may need up to a 2-year period of parole initially to 
allow them sufficient time to develop their start-up entity, which 
would be at an early stage of development, and achieve rapid growth in 
terms of revenue generation and job creation. DHS further believes that 
an initial period of parole of up to 2 years, followed by one possible 
period of re-parole of up to 3 additional years as described below, is 
consistent with the amount of time successful start-up entities 
generally require to realize growth potential. An entrepreneur of a 
start-up entity that is almost 3 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 growth potential by the 
time it is 8 years old.\40\ As proposed, DHS retains the discretion to 
provide any length of parole to an applicant, including a period 
shorter than 2 or 3 years where appropriate. Moreover, although USCIS 
would designate an appropriate initial parole validity period upon 
approval of the Application for Entrepreneur Parole, CBP would retain 
the 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. DHS will issue a multiple entry 
travel document for individuals granted parole under this rule to 
permit travel during their parole validity period.
---------------------------------------------------------------------------

    \40\ 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 
(February 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.'').
---------------------------------------------------------------------------

    DHS welcomes public comment on the proposed limits on the duration 
of parole under this rule and any relevant data to support alternative 
durations of parole.
7. Spouses and Minor Children
    DHS proposes that the spouse and children \41\ of an entrepreneur 
granted parole under this proposed rule may also be granted parole for 
the same period as the entrepreneur. See proposed new 8 CFR 
212.19(h)(2). To be paroled with (or later join) the entrepreneur, his 
or her spouse and children would each be required to file an 
Application for Travel Document (Form I-131) in accordance with the 
form instructions. 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, USCIS may consider granting 
parole to the entrepreneur's spouse and children, if any, to maintain 
family unity and thereby further encourage the entrepreneur to operate 
and grow his or her business in the United States. As with the 
entrepreneur, certain biometric information for each spouse and child 
must be included on the application, along with a biometric services 
fee for each dependent. If the spouse and children are in the United 
States, they would also be required to appear at a USCIS office within 
the United States. If the applicants are outside the United States, the 
collection of additional biometric information (fingerprints and 
photographs) will take place prior to travel document issuance rather 
than before the parole applications are adjudicated. In such cases, 
however, USCIS would conduct preliminary background checks on each 
accompanying or joining family member prior to making its discretionary 
determination on their parole applications.
---------------------------------------------------------------------------

    \41\ 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).
---------------------------------------------------------------------------

    DHS is proposing to consider granting parole to the spouses and 
children of entrepreneur parolees to further the central purpose of the 
rulemaking--encouraging foreign entrepreneurs to come to and remain in 
the United States to develop and grow their start-up entities and 
provide the benefits of such growth to the United States. DHS retains 
the authority to decide whether to grant parole to such spouses and 
children on a case-by-case basis and may determine that such 
individuals do not warrant parole (or re-parole) either because their 
parole would not be justified on significant public benefit grounds or 
as a matter of discretion.

D. Employment Authorization

1. Employment Authorization Incident to Parole With a Specific Employer
    DHS is proposing that an entrepreneur who is paroled into the 
United States under this rule would be authorized for employment 
incident to his or her parole with the start-up entity. See proposed 
new 8 CFR 212.19(g). Under the proposed rule, the entrepreneur 
parolee's employment authorization would be limited to the specific 
start-up entity listed on the Application for Entrepreneur Parole. This 
limitation is intended to keep the scope of employment authorization 
within the purposes for which parole was granted. As the purpose of 
this proposed rule is to encourage foreign entrepreneurs to develop and 
grow their start-up businesses in the United States--rather than obtain 
new sources of employment--DHS believes this limitation on employment 
authorization is a reasonable restriction.
    DHS further proposes that such employment authorization be 
``automatic'' upon the grant of parole so that the entrepreneur can 
pursue his or her parole-related activities with the start-up entity 
without delay. DHS believes that requiring entrepreneurs to file 
separate applications for employment authorization and wait for 
Employment Authorization Documents (EADs, Form I-766) before beginning 
work \42\ would undermine the very basis for extending parole to 
entrepreneurs--the rapid growth and success of the start-up entity. The 
delay resulting from the need to apply for and receive EADs (up to 90 
days or more) could be detrimental to the success of the start-up 
entity.
---------------------------------------------------------------------------

    \42\ This is the case with other parolees under existing 
regulations. See 8 CFR 274a.12(c)(11).
---------------------------------------------------------------------------

    Finally, DHS is proposing several conforming amendments to 8 CFR 
274a.12(b), which lists the classes of foreign nationals authorized for 
employment incident to status with specific employers. DHS proposes to 
amend the introductory paragraph of this provision, which currently 
refers only to employment-authorized ``nonimmigrants,'' by adding a 
reference to parolees under this rule. See revised 8 CFR 274a.12(b). 
DHS also proposes to add entrepreneur parolees under this rule to the 
list of classes of individuals authorized only for employment with a 
specific employer (as opposed to open market employment). See proposed 
new 8 CFR 274a.12(b)(37). Specifically, the

[[Page 60145]]

amendment would provide that entrepreneurs paroled under this rule 
would be employment authorized incident to their parole with their 
start-up entities, pursuant to proposed new 8 CFR 212.19(g). DHS would 
also assign a new code of admission for this class: ``PE-1.''
2. Employment Authorization Eligibility for Spouses
    DHS is also proposing to extend eligibility for employment 
authorization to the accompanying spouses (but not the children) of 
entrepreneur parolees who have been paroled into the United States. See 
proposed new 8 CFR 212.19(h)(3). Under the proposed rule, such spouses 
who wish to obtain employment authorization would need to 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 
believes 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 academic expenses for their children, and to ensure that 
they satisfy the proposed 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 a foreign entrepreneur to bring a start-up entity to the 
United States rather than create it in another country.
    DHS has proposed not to extend employment authorization to the 
children of entrepreneurs, as it does not view the employment of these 
children in the United States as a significant deciding factor for an 
entrepreneur considering to create and develop start-up entities with 
high growth potential in the United States. DHS has extended 
eligibility for employment authorization to minors within the following 
nonimmigrant categories: Dependents of Taipei Economic and Cultural 
Representative Office (TECRO) E-1 nonimmigrants; J-2 dependent children 
of J-1 exchange visitors; dependents of A-1 and A-2 foreign government 
officials; dependents of G-1, G-3, and G-4 international organization 
officials; and dependents of NATO officials. But in each of these 
instances, DHS has extended eligibility for employment authorization to 
minor children based on particular foreign policy considerations; these 
underlying considerations are not present in the proposed entrepreneur 
parole process.
3. Documentation for Employment Eligibility Verification (Form I-9)
    As with other classes of aliens listed as employment authorized 
incident to status with a specific employer in 8 CFR 274a.12(b), 
entrepreneur parolees would not be issued EADs (Forms I-766) as 
evidence of employment authorization. Instead, DHS would issue Arrival/
Departure Records (Forms I-94) with the entrepreneur's code of 
admission (``PE-1''), which indicates that the entrepreneur is 
employment-authorized incident to parole. Because the Arrival/Departure 
Record would contain this code, the record would be sufficient evidence 
of employment authorization for Employment Eligibility Verification 
(Form I-9) purposes.
    As with other employers, the start-up entity would be required to 
verify the employment authorization of its employees, including the 
entrepreneur paroled under this rule, to comply with employment 
eligibility verification requirements. DHS is proposing to amend the 
regulations governing these requirements by adding to the list of 
documents acceptable by employers for completion of the Form I-9. The 
proposed rule would add to this list a combination of the 
entrepreneur's valid foreign passport and his or her Arrival/Departure 
Record indicating employment-authorization pursuant to parole. See 
proposed 8 CFR 274a.2(b)(1)(v)(A)(5).
    This proposal would ensure that entrepreneur parolees under this 
rule will have documentation evidencing identity and employment 
authorization that is acceptable for meeting the Form I-9 requirements 
immediately upon receiving parole to the United States. Because the 
document combination described above (foreign passport and Arrival/
Departure Record) has been acceptable for Form I-9 purposes since the 
Employment Eligibility Verification requirements were first established 
in 1987, employers should readily recognize the document combination as 
acceptable for such purposes.
    Further, DHS is satisfied that this document combination contains 
sufficient security features, as required by section 
274A(b)(1)(B)(ii)(III) of the INA, 8 U.S.C. 1324a(b)(1)(B)(ii)(III). An 
Arrival/Departure Record issued to an entrepreneur parolee will 
indicate the validity period for parole and the new code of admission 
(``PE-1'') that is specific to such parolees. In addition, DHS proposes 
to automatically extend the employment authorization of an entrepreneur 
parolee whose parole has expired but who has filed a timely application 
for re-parole with the same start-up entity. See proposed 8 CFR 
274a.12(b)(37). In such cases, employment authorization would be 
extended for a period not to exceed 240 days beginning on the date of 
expiration of parole. Extending work authorization in this manner would 
allow an entrepreneur parolee to continue working without interruption 
with his or her start-up entity while the application for re-parole is 
pending.
4. Technical Changes
    DHS is proposing to revise the existing, general parolee employment 
eligibility provision at 8 CFR 274a.12(c)(11) to clarify that the 
employment eligibility of entrepreneur parolees and their spouses under 
this rule are governed by proposed 8 CFR 274a.12(b)(37) and 8 CFR 
274a.12(c)(34) rather than 8 CFR 274a.12(c)(11). In addition, DHS is 
proposing to update 8 CFR 274a.12(c)(11) to replace outdated references 
to parole ``for emergency reasons'' and ``reasons deemed strictly in 
the public interest'' with the current statutory standards for parole--
``urgent humanitarian reasons'' and ``significant public benefit.'' See 
INA section 212(d)(5)(A), 8 U.S.C. 1182(d)(5)(A).

E. Material Change Reporting

    DHS proposes that, consistent with filing requirements for 
reporting material changes in other contexts (such as the requirement 
to submit amended petitions when there are material changes), an 
entrepreneur who has been granted parole under this rule would be 
required to immediately report to USCIS any material changes 
potentially affecting his or her grant of parole. See proposed 8 CFR 
212.19(j). In cases involving one or more material changes where the 
entrepreneur will continue to be employed or associated with his or her 
start-up entity, the entrepreneur must submit a new Application for 
Entrepreneur Parole with fee (not including any biometric fees) to 
notify USCIS of the material change(s). Depending on the nature and 
scope of the material change(s) reported, USCIS may continue to 
authorize parole or seek to terminate parole. If the entrepreneur will 
no longer be employed or associated with the start-up entity, or if he 
or she ceases to possess at least a 10 percent ownership stake in the 
entity, the entrepreneur must immediately notify USCIS in writing of 
those changes. Upon receipt of such notification, USCIS would issue an 
automatic revocation of the entrepreneur's parole, as well as the 
parole of any dependents.
    For purposes of this rule, DHS proposes the term ``material 
change'' to

[[Page 60146]]

mean any change in facts that could reasonably affect the outcome of 
DHS's determination that the entrepreneur provides, or continues to 
provide, a significant public benefit to the United States. Such 
changes would 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 involving claims for 
damages exceeding 10 percent of the current assets; 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; and any significant change 
to the entrepreneur's role in or ownership and control of the start-up 
entity or any other significant ownership and control change in the 
start-up entity. See proposed new 8 CFR 212.19(a)(10) and (j). Failure 
to timely file or otherwise comply with the material change reporting 
requirements may result in a denial of subsequent parole applications 
or revocation of parole according to proposed 8 CFR 212.19(k)(3)(ii).
    DHS welcomes public comment on the proposed definition of the term 
``material change.'' DHS also welcomes comment on the types of 
situations that would constitute material changes.

F. Re-Parole

    DHS proposes that individuals who have been granted entrepreneur 
parole may be eligible for one additional, successive period of re-
parole of up to 3 years with the same start-up entity if such 
additional period of parole is determined to serve a significant public 
benefit. See proposed 8 CFR 212.19(c) and (f). An individual may thus 
be paroled into the United States under the proposed rule, pursuant to 
an initial period of parole and any period of re-parole, for a maximum 
period of 5 years. See proposed 8 CFR 212.19(f). An entrepreneur 
parolee seeking re-parole should request such re-parole before his or 
her current period of parole expires. Failure to file a request for re-
parole before the expiration of the current parole period will result 
in an automatic termination of parole and a loss of employment 
authorization for the entrepreneur and any derivatives (i.e., spouse 
and any child(ren)). See proposed 8 CFR 212.19(k)(2) and 8 CFR 
274.12(b)(37).
    As discussed above, DHS believes that a total maximum 5-year period 
of parole under this rule (an initial period of up to 2 years, plus one 
possible re-parole period of up to 3 years) is consistent with the 
amount of time successful start-up entities generally require to 
realize their growth potential. This would generally allow sufficient 
time for a successful start-up entity to engage in an initial public 
offering, or otherwise advance past the generally recognized start-up 
phase.\43\ As also noted above, DHS would retain the discretion to 
provide any length of parole to an applicant, including a cumulative 
period shorter than 5 years.
---------------------------------------------------------------------------

    \43\ 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 
(February 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.'').
---------------------------------------------------------------------------

    DHS welcomes comments regarding the length of parole and re-parole.
1. Criteria for Re-Parole
    To be considered for re-parole, an entrepreneur parolee must 
demonstrate that his or her stay in the United States pursuant to 
parole would continue to provide a significant public benefit. DHS 
proposes that an individual may meet this standard by demonstrating 
that his or her start-up entity continues to demonstrate substantial 
potential for rapid growth and job creation and that his or her parole 
would significantly help the entity continue to conduct and grow its 
business here. See proposed 8 CFR 212.19(c)(2). Because, however, the 
economic activity of a successful start-up entity would likely have 
changed since commencement of the initial parole period, DHS is 
proposing certain adjusted and additional criteria for granting re-
parole in comparison to the criteria for initially granting parole 
under this proposed rule. As described further below, such changes are 
intended to ensure that the start-up entity continues to have 
substantial potential for rapid growth and job creation and, 
ultimately, that parole of the entrepreneur parolee continues to be 
justified on significant public benefit grounds.

A. Entity Continues To Be a Start-Up Entity

    As noted above, the key to meriting parole under this proposed rule 
is the formation of an entity in the United States with the substantial 
potential to show rapid growth, including through increased revenue and 
job creation. DHS thus proposes that an applicant for re-parole show 
that his or her entity continues to be a ``start-up entity'' as that 
term is defined at proposed 8 CFR 212.19(a)(2). See proposed 8 CFR 
212.19(c)(2)(ii)(A). At the re-parole stage, this would mean showing 
that the entity: (1) Has continued to lawfully do business during the 
initial period of parole, and (2) continues to have the substantial 
potential to experience rapid growth and job creation, including 
through significant revenue generation or attraction of capital 
investment.\44\ Id. As discussed in section IV.B.1, the requirement for 
the entity to have operated lawfully in the United States during any 
prior period of parole is intended to ensure lawful conduct and protect 
the integrity of the proposed parole process under this rule. The 
requirement that the entity have the substantial potential to 
experience rapid growth and job creation is intended to capture the 
types of start-up entities that are most likely to meet the significant 
public benefit test, while excluding types of entities without such 
potential.
---------------------------------------------------------------------------

    \44\ The entity would also need to continue to meet the 
definition of ``U.S. business entity'' at proposed 8 CFR 
212.19(a)(9).
---------------------------------------------------------------------------

    As with the application for initial parole, DHS anticipates that an 
applicant for re-parole would be able to meet the above criteria by 
submitting various forms of evidence. In addition to meeting the 
investment, revenue, or job creation criteria described further below, 
an applicant will be expected to provide supplementary evidence of the 
entity's continued substantial potential for rapid growth and job 
creation.

B. Applicant Continues To Be an Entrepreneur

    To ensure that any successive grant of parole would continue to 
serve a significant public benefit, DHS is proposing that an applicant 
for re-parole show that he or she continues to meet

[[Page 60147]]

the definition of ``entrepreneur'' at proposed 8 CFR 212.19(a)(1). See 
proposed 8 CFR 212.19(c)(2)(ii)(A). As discussed previously, this 
definition would require the applicant for re-parole to show that he or 
she: (1) Continues to possess a substantial ownership interest in the 
start-up entity, and (2) continues to serve in a central and active 
capacity in the entity, such that his or her knowledge, skills, or 
experience would continue to substantially assist the entity with the 
growth and success of its business. See proposed 8 CFR 212.19(a)(1). 
For purposes of seeking re-parole, the definition further provides that 
an individual may be considered to possess a substantial ownership 
interest if he or she maintains at least a 10 percent ownership stake 
in the start-up entity at all times during the period of parole and any 
subsequent period of re-parole. Id.
    As discussed in section IV.B.2., DHS believes that the definition 
of ``entrepreneur'' proposed in this rule is essential to ensuring that 
granting parole in an individual case would provide a significant 
public benefit. By requiring an applicant for re-parole to demonstrate 
that he or she continues to serve in an active and central capacity and 
continues to have knowledge, skills, or experience integral to the 
entity's success, DHS is ensuring that the applicant is directly 
related to the entity's ability to benefit the United States, including 
by conducting research and development, increasing revenue, or creating 
jobs. Similarly, the ownership standard is also essential for 
connecting the individual to the start-up entity and ensuring that he 
or she continues to assume more than a nominal financial risk related 
to the entity. The reduced 10 percent equity requirement for seeking 
re-parole (as opposed to the 15 percent requirement for seeking initial 
parole) takes into account the need of some successful start-up 
entities to raise additional venture capital financing by selling 
ownership interest during their initial years of operation.
    As also discussed in section IV.B.2., DHS believes that an 
entrepreneur seeking re-parole would be able to demonstrate sufficient 
satisfaction of the above criteria by providing various forms of 
evidence. With respect to ownership, DHS anticipates that an applicant 
would be able to provide copies of legal or financial documents--such 
as formation and organizational documents, equity certificates, equity 
ledgers, ownership schedules, and capitalization tables--indicating the 
applicant's ownership interest in the start-up entity. With respect to 
the applicant's role within the entity, DHS expects that an applicant 
could satisfy the criterion by providing evidence showing that he or 
she continues to serve in the same capacity as that described in the 
initial parole application. If the applicant has changed positions 
within the entity, he or she would need to provide evidence 
demonstrating that he or she continues to serve in a central and active 
capacity within the entity and that his or her knowledge, skills, or 
experience would continue to substantially assist the entity with the 
growth and success of its business.

C. Investment, Revenue, and Job Creation Criteria for Re-Parole 
Consideration

    DHS further proposes that, to seek re-parole under this rule, an 
entrepreneur would need to further validate, through additional 
reliable evidence, the start-up entity's continued substantial 
potential for rapid growth and job creation. DHS is proposing that this 
requirement may generally be satisfied by demonstrating that the entity 
has: (1) Received substantial additional qualifying funding, such as 
awards or grants from qualifying government entities or investments of 
capital from U.S. investors with established records of successful 
investment; (2) generated substantial and rapidly increasing revenue in 
the United States over the prior parole period; or (3) generated a 
substantial number of qualified jobs for U.S. workers. See proposed 8 
CFR 212.19(c)(2)(ii)(B). As with applications for initial parole, DHS 
further proposes that an applicant who partially meets one or more of 
these criteria for re-parole may be considered for re-parole under this 
rule if he or she provides additional reliable and compelling evidence 
that his or her re-parole would provide a significant public benefit.
i. Qualifying Funding From U.S. Investors or Government Entities
    DHS proposes to allow an applicant to demonstrate that a start-up 
entity continues to have substantial potential for rapid growth and job 
creation by showing that during the preceding period of parole the 
entity received additional substantial qualifying funding--through 
``qualifying investments,'' ``qualified government grants or awards,'' 
or a combination of both. See proposed 8 CFR 212.19(a)(5) and 
(c)(2)(ii)(B)(1). DHS proposes that such total investments made to the 
entity during the initial parole period may generally be considered 
``substantial'' with respect to an application for re-parole if they 
cumulatively meet or exceed $500,000. Id. As with the application for 
initial parole, ``qualifying investments'' must be from established 
U.S. investors (such as venture capital firms, angel investors, or 
start-up accelerators) with a history of substantial and successful 
investments in start-up entities. Such qualifying investors would 
include only those investors who have a history of making similar or 
greater investments on a regular basis over the last 5 years and who 
can demonstrate that at least two of the entities receiving such 
investments have subsequently experienced significant growth in revenue 
and job creation. See proposed 8 CFR 212.19(a)(5). With respect to 
``qualified government grants or awards,'' the grants or awards 
generally would need to be made by one or more Federal, State, or local 
government entities that regularly provide such funding to U.S. 
businesses for economic development, innovation, research and 
development, or job creation reasons. See proposed 8 CFR 212.19(a)(3).
    DHS believes that these investment criteria are reasonable for 
subsequent grants of parole based on consultation with the SBA, as well 
as the amounts of investment made in start-up entities during initial 
rounds of capital investment.\45\ DHS believes these standards are 
important to ensure that the start-up entity is showing signs of 
success and continues to have substantial potential for rapid growth 
and job creation.
---------------------------------------------------------------------------

    \45\ See note 32.
---------------------------------------------------------------------------

    DHS welcomes comment on all aspects of this section, including the 
proposed investment threshold for re-parole and any potential 
alternatives to such thresholds. For comments regarding investment 
threshold amounts, the Department requests that commenters provide 
rationales and data, if available, to support their recommendations.
ii. Substantial Revenue Generation
    DHS also proposes to allow an applicant to demonstrate that a 
start-up entity continues to have substantial potential for rapid 
growth and job creation by showing that the entity has exhibited rapid 
growth in terms of revenue generation in the United States during the 
relevant parole period. DHS proposes that an applicant may generally be 
able to meet this standard by demonstrating that the entity reached at 
least $500,000 in annual revenue, with at least 20 percent average 
annual revenue growth, during the initial parole period. See proposed 8 
CFR 212.19(c)(2)(ii)(B)(3). DHS believes that

[[Page 60148]]

these revenue criteria are reasonable and consistent with the 
requirement that the entity have the substantial potential for rapid 
growth and job creation and, ultimately, with the requirement that the 
entrepreneur's parole provide a significant public benefit to the 
United States.
    Based on consultation with the SBA, DHS believes $500,000 and 20 
percent annual revenue growth would be reasonable criteria for purposes 
of re-parole. Notably, evaluating revenue generation and growth is 
industry- and location-specific, and start-up entities may be at 
different stages of development at the time applicants file their 
parole requests. DHS considered proposing revenue and growth thresholds 
that varied by industry and geographic location, but determined that 
such an approach would be extremely difficult to administer. Instead, 
DHS decided to propose threshold criteria that would generally apply to 
start-up entities under this parole process. DHS chose $500,000 in 
revenue and 20 percent annual revenue growth as proposed 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).
    DHS's proposed revenue amount is based on analysis of available 
data \46\ showing average revenue over a 3-year period of $215,000 for 
all new firms in innovative sectors. Adjusted for inflation, the 
average revenue of such firms is approximately $250,000. In analyzing 
this data, DHS applied a 20 percent growth rate, which is a high growth 
threshold utilized in economic and business research,\47\ to the 
$250,000 average revenue for 2 years (the proposed length for initial 
parole). At a growth rate of 20 percent each year, revenue of $250,000 
would grow to $360,000 over a 2-year period. DHS proposed $500,000 as 
the revenue criterion to take into account the fact that revenue of 
$360,000 represents an average for all new firms in innovative sectors 
and the proposed rule is aimed towards assisting high-growth startups 
that will provide a significant public benefit. As such, DHS believes 
it is appropriate to propose an amount that takes into consideration 
that range of industries and locations in which start-ups may conduct 
business, but that exceeds the average revenue for new firms, so that 
such an amount can serve, in combination with a 20 percent growth rate, 
as a reliable indicator of a start-up entity's substantial potential 
for continued growth and job creation. While DHS does not have reliable 
revenue data that is specific to high-growth startups (the revenue data 
available to DHS includes all new firms, including non-startups, 
startups, and high-growth startups), DHS believes that its analysis of 
available data supports the proposed $500,000 revenue criteria as a 
reasonable indicator of the entrepreneur's ability to continue to 
provide a significant public benefit to the United States.
---------------------------------------------------------------------------

    \46\ DHS analyzed data found in the Census Bureau's Survey of 
Business Owner's data (SBO) set, Table SB0700CSCB10, ``Statistics 
for All U.S. Firms by Year the Business Was Originally Established 
by Industry, Gender, Ethnicity, Race, and Veteran Status for the 
U.S.: 2007'' found at: http://www.census.gov/econ/sbo/historical.html?2007. DHS calculated revenue per firm for the 3 
years each of 2005, 2006 and 2007, which would account for ``new 
firms'' aged 3 or less since the benchmark year was 2007. To account 
for sectors involved mainly in innovation, DHS attempted to match 
sectors to those utilized in the volume projections section of the 
concomitant economic analysis section of the rule's regulatory 
impact assessment. Of those nine broad sectors, ``Waste Services'' 
is not listed separately and hence DHS utilized the other eight 
sectors. Because the data are arranged with two identifiers of 
interest, ``year established'' and ``sector,'' DHS conducted an 
unweighted average across the 24 data points (8 sectors with 3 years 
each) to arrive at an average of $215,000.
    \47\ High-growth firms are defined by the Department of Labor's 
Bureau of Labor Statistics (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. 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. Although the BLS and standard OECD 
definition applies specifically to employment, both agencies 
recognize that employment growth may not be a suitable measure in 
all cases and that valid alternative measures may be utilized. There 
have been a number of alternatives proposed in various peer-reviewed 
literature and ongoing research. For purposes of the present rule, 
discussion of the 20 percent growth rate in revenue, instead of 
employment specifically, concomitant to that DHS proposes, can be 
found at: Mogos, S., Davis, A. & Baptista, R. (2015), ``Defining 
High Growth Firms. Sustainable Growth, Volatility, and Survival,'' 
Proceedings of DRUID15 Conference. June 2015, available at: http://druid8.sit.aau.dk/acc_papers/rpq1k6cpebbhti9vh29xudqp3juy.pdf. See 
also Karl Wennberg, Managing High-Growth Firms: A literature review 
(2013), OECD: ``International Workshop on ``Management and 
Leadership Skills in High-Growth Firms,'' available at: http://www.oecd.org/cfe/leed/Wennberg_Managing%20a%20HGF.pdf.
---------------------------------------------------------------------------

    DHS is proposing both a general minimum revenue threshold and a 
threshold percentage increase in such revenue to account for a range of 
start-up entities that may qualify an entrepreneur for re-parole under 
this rule based on revenue generation. A $500,000 minimum revenue 
threshold at the re-parole stage, for example, would by itself indicate 
little about a start-up entity that had already been generating such 
revenue when the application for initial parole was filed. For such an 
entity, the 20 percent revenue growth threshold would ensure the entity 
is exhibiting substantial growth and the ability to sustain substantial 
job creation. As noted above, 20 percent annual revenue growth is the 
rate used by the Department of Labor's Bureau of Labor Statistics to 
indicate a high rate of growth among U.S. businesses. At the same time, 
the 20 percent revenue growth threshold would be insufficient by itself 
with respect to entities that were at the lower end of the revenue 
generation scale when the application for initial parole was filed. For 
example, an entity that was generating only $250,000 in annual revenue 
at the time the initial parole application was filed would only require 
a total increase of $110,000 in annual revenue over the 2-year parole 
period to meet the 20 percent revenue growth threshold. For such 
entities, the $500,000 annual revenue threshold is intended to ensure 
rapid growth and the potential to sustain substantial job creation. As 
with the standards for initial parole, DHS believes that the above 
standards for re-parole: (1) Would be reasonable among start-up 
entities regardless of industry or location; and (2) would serve as 
strong indications of an entity's potential for continued rapid growth 
and job creation. DHS welcomes comments on the proposed revenue 
generation and annual revenue growth thresholds for re-parole, 
including any potential alternatives.
iii. Job Creation
    DHS further proposes to allow an applicant to demonstrate his or 
her entity's substantial potential for rapid growth and job creation by 
showing that the entity has exhibited rapid growth in terms of job 
creation during the relevant parole period. DHS proposes that an 
applicant may generally be able to meet this standard by demonstrating 
that the entity created at least 10 qualified jobs with the start-up 
entity for U.S. workers during the initial parole period. DHS decided 
to require at least 10 qualified jobs for re-parole based on survey 
data indicating that the average employment at new businesses in 2011 
was 8.7 employees.\48\ DHS further believes that

[[Page 60149]]

this job creation standard is reasonable for demonstrating a start-up 
entity's recent history of rapid growth and job creation.
---------------------------------------------------------------------------

    \48\ Alicia Robb, Joseph Farhat, ``An Overview of the Kauffman 
Firm Survey'', June 2013, p. 4. ``While about 40 percent of firms 
had employees in 2004, by 2011 about 53 percent of surviving firms 
had employees. Surviving firms with employees, which are now in 
their eighth year of operations, increased average employment to 8.7 
employees in 2011, up from 7.5 employees in 2010.''
---------------------------------------------------------------------------

    Moreover, DHS is proposing a definition for the term ``qualified 
job'' to limit the types of jobs that may be used to justify a grant of 
parole under this rule. See proposed 8 CFR 212.19(a)(6). Under the 
proposed rule, the term ``qualified job'' would mean full-time 
employment, as defined at the proposed 8 CFR 212.19(a)(8), located in 
the United States with the entrepreneur's start-up entity that has been 
filled for at least 1 year by one or more qualifying employees. See 
Proposed 8 CFR 212.19(a)(6). In addition, the term ``qualifying 
employee'' would mean a U.S. citizen, a lawful permanent resident, or 
other immigrant lawfully authorized to be employed in the United States 
(e.g., an asylee or refugee), 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 proposed 8 CFR 212.19(a)(7). 
For job creation to establish eligibility for a grant of parole, DHS 
believes it is important that the job be filled by an employee who is 
not closely related to an entrepreneur of the start-up entity. This 
limitation would mitigate the potential for fraud relating to any 
claimed job creation and the legitimacy of the business, and it would 
help to distinguish bona fide start-up entities from small businesses 
with limited growth potential created for the sole or primary purpose 
of providing income to the entrepreneurs and their families. DHS 
believes that merely creating jobs for the entrepreneur and the 
entrepreneur's family would be unlikely to provide a significant public 
benefit to the United States and should thus not serve as a basis for 
parole under this rule.
    Additionally, DHS proposes that the term ``full-time employment,'' 
as referenced in the proposed definition of ``qualified job,'' would 
mean paid employment of an employee by the entrepreneur's start-up 
entity in a position that requires a minimum of 35 working hours per 
week. See proposed 8 CFR 212.19(a)(8). The Department of Labor 
similarly defines full time employment as requiring 35 or more hours a 
week.\49\ Full-time employment, however, would not include combinations 
of part-time positions even if, when combined, such positions meet the 
hourly requirement per week. DHS believes that requiring that the 
employment include full-time remuneration would help to ensure that the 
entity will provide a significant public benefit to the United States 
and mitigates the potential for fraud as it relates to any claimed job 
creation and the legitimacy of the business. See proposed 8 CFR 
212.19(a)(8).
---------------------------------------------------------------------------

    \49\ Department of Labor Bureau of Labor Statistics, Glossary 
(last modified Feb. 28, 2008), http://www.bls.gov/bls/glossary.htm#F.
---------------------------------------------------------------------------

iv. Alternative Criteria for Re-Parole Consideration
    Finally, as with the application for an initial grant of parole, 
DHS proposes that an applicant who only partially meets one or more of 
the above sub-criteria related to capital investment, revenue 
generation, or job creation may be considered for re-parole under this 
rule in certain limited circumstances. See proposed 8 CFR 
212.19(c)(2)(iii). Specifically, DHS may consider another period of 
parole for such an applicant if he or she provides, in addition to 
evidence that one or more of the sub-criteria have been partially met, 
``reliable and compelling'' evidence of the entity's continued 
substantial potential for rapid growth and job creation than would be 
required if the applicant had fully met one or more of the above sub-
criteria. Id. Importantly, re-parole would not be available to an 
applicant who fails to demonstrate any U.S. investment, revenue 
generation, or job creation. Rather, the applicant would need to show 
as a preliminary matter that the start-up entity has: (1) Received a 
substantial level of investment through a combination of qualifying 
investments and qualified government grants or awards (although less 
than $500,000); (2) generated a substantial level of revenue (although 
less than $500,000 with at least 20 percent average annual revenue 
growth); or (3) generated a substantial number of qualified jobs in the 
United States (although less than 10). The applicant would also need to 
demonstrate the entity's potential for rapid growth and job creation by 
submitting additional evidence that DHS determines to be both reliable 
and compelling. DHS proposes that such evidence be reliable and 
compelling in its own right to overcome the applicant's inability to 
fully meet the threshold criteria otherwise required by this rulemaking 
for re-parole.
    As noted previously, DHS is not proposing to define 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. But 
DHS believes that such evidence would need to be compelling to 
demonstrate that the entrepreneur's presence here would provide a 
significant public benefit considering the entity's inability to meet 
the otherwise applicable threshold criteria for consideration. DHS will 
ultimately be required to decide whether such evidence--in conjunction 
with the entity's substantial investment, revenue generation, or job 
creation--is sufficient to establish that the applicant's presence in 
the United States will provide a significant public benefit. This 
approach is consistent with the discretionary nature of the Secretary's 
statutory parole authority and the fact that each parole request will 
be adjudicated, on a case-by-case basis, after considering the 
particularized facts of each case.
    DHS invites public comment on the level and types of reliable and 
compelling evidence that may warrant a discretionary grant of parole in 
such cases. DHS also invites public comment on alternatives to the 
proposed funding, revenue generation, and job creation thresholds that 
applicants may use to demonstrate a start-up entity's continued 
substantial potential for rapid growth and job creation and that may 
serve as a principal basis for seeking re-parole under this rule. 
Commenters should recommend threshold levels for obtaining re-parole 
under suggested criteria, along with the types of reliable evidence 
that applicants may submit to substantiate their claims, including any 
relevant data if available.
2. Application Requirements for Re-Parole
    Under the proposed rule, an entrepreneur parolee seeking a period 
of re-parole would be required to file a request for re-parole with 
USCIS using the same form as for initial parole, the Application for 
Entrepreneur Parole (Form I-941, or successor form), and pay the same 
fees (filing and biometric services fees). See proposed new 8 CFR 
212.19(c)(1). The entrepreneur would generally be required to file the 
request for re-parole before the expiration of the current period of 
parole. If the entrepreneur is in the United States at the time that 
USCIS approves the request for re-parole, such approval would also 
constitute a grant of parole. See proposed new 8 CFR 212.19(d)(3). An 
entrepreneur present in the United States in a period of parole would 
not be required to depart and return to the United States in order to 
request a new

[[Page 60150]]

grant of parole from CBP at a port of entry. Along with the approval 
notice, USCIS would issue an electronic Arrival/Departure Record (Form 
I-94) reflecting the new period of parole and the code of admission 
assigned to entrepreneur parolees. USCIS would also issue the 
entrepreneur's spouse and children who have filed their own separate 
requests for parole, if also approved for an additional period of 
parole, new Arrival/Departure Records reflecting the same period of 
parole as the entrepreneur, but with the appropriate dependent 
entrepreneur parolee codes.
    The entrepreneur (or spouse or dependent child), if outside the 
United States upon the approval of the re-parole application, would 
have to obtain a travel document from USCIS or DOS (e.g., a boarding 
foil) and appear at a port of entry for CBP to make the final re-parole 
determination and, if granted, issue new Arrival/Departure Records. 
Just as with initial parole, entrepreneurs granted re-parole would be 
authorized to be employed by the start-up entity, incident to their 
parole under this proposed rule. See proposed 8 CFR 274a.12(b)(37). 
Such entrepreneurs also would be permitted to use their foreign 
passport in combination with their Arrival/Departure Record reflecting 
the new period of parole to demonstrate their identity and employment 
authorization for purposes of compliance with the Employment 
Eligibility Verification (Form I-9) requirements. See proposed 8 CFR 
274a.2(b)(1)(v)(A)(5); see also proposed revisions to the Form I-9, 
Lists of Acceptable Documents.
3. Ensuring Continuous Employment Authorization
    To facilitate maintenance of continuous work authorization and 
parole, DHS is proposing that an entrepreneur parolee may file a 
request for re-parole beginning 90 days prior to the expiration date of 
his or her current period of parole. See proposed Form Instructions for 
the Application for Entrepreneur Parole (Form I-941). To prevent 
potential gaps in employment authorization for entrepreneurs seeking 
re-parole, DHS proposes to extend automatic employment authorization to 
those entrepreneurs whose current parole period expires while their 
request for re-parole is pending. See proposed 8 CFR 274a.12(b)(37). 
DHS is proposing that this automatic employment authorization will 
extend for 240 days from the date the entrepreneur's initial parole 
period expires, or until USCIS makes a decision on the re-parole 
request, whichever is sooner, when a request for re-parole was timely 
filed by the entrepreneur. Id. This 240-day automatic extension of 
employment authorization is comparable to the extension currently 
provided by regulation to most nonimmigrants authorized for employment 
incident to status with a specific employer who have filed a request 
for an extension of stay with the same employer. See 8 CFR 
274a.12(b)(20). DHS believes that a 240-day period of automatic 
employment authorization is equally appropriate for entrepreneur 
parolees and is a sufficient period of time to ensure that the 
entrepreneur does not experience gaps in employment authorization on 
account of the adjudication process. The 240-day period takes into 
account the complex and time-consuming adjudication required for re-
parole, as well as the required biometric services appointment, which 
may require up to 90 days for scheduling.

G. Termination of Parole

    DHS is proposing provisions governing termination of parole under 
this rule in cases where DHS believes such termination is appropriate, 
including circumstances indicating that continued parole would no 
longer provide a significant public benefit, pursuant to section 
212(d)(5)(A) of the INA, 8 U.S.C. 1182(d)(5)(A). Consistent with DHS's 
parole authority, under this proposed rule DHS may, in its discretion, 
terminate parole granted under 8 CFR 212.19 at any time and without 
prior notice or opportunity to respond. Alternatively, DHS may, in its 
discretion, provide the entrepreneur notice and an opportunity to 
respond prior to terminating his or her parole under 8 CFR 212.19. In 
addition to the general grounds for termination of parole described at 
8 CFR 212.5(e),\50\ DHS is proposing the following grounds for 
termination of entrepreneur parole:
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    \50\ The termination provisions in current parole regulations 
provide for termination on written notice in situations where the 
justification for granting parole has ended or, in the opinion of an 
authorized officer, neither humanitarian reasons nor public benefit 
warrants the continued presence of the alien in the United States. 
See 8 CFR 212.5(e)(2)(i).
---------------------------------------------------------------------------

1. Automatic termination
    DHS believes that certain circumstances warrant automatic 
termination of parole. In this rule, DHS proposes that parole will 
automatically terminate if: (a) The period of parole expires, unless 
the individual timely files a non-frivolous application for re-parole; 
or (b) USCIS receives written notice from the entrepreneur that he or 
she will no longer be employed by the start-up entity or ceases to 
possess at least a 10 percent ownership stake in the start-up entity in 
accordance with 8 CFR 212.19(j). See proposed 8 CFR 212.19(k)(2). 
Additionally, the parole of the spouse or child of the entrepreneur 
will be automatically terminated without notice if the parole of the 
entrepreneur has been terminated. Id. If a spouse whose parole is 
terminated also has employment authorization, the employment 
authorization is automatically revoked.
2. Termination on Notice
    Even though DHS has the discretion to terminate parole without 
prior notice, USCIS will generally attempt to provide the entrepreneur 
or his or her spouse or children, as applicable, written notice of its 
intent to terminate parole if USCIS believes that: (a) The facts or 
information contained in the request for parole were not true and 
accurate; (b) the alien failed to timely file or otherwise comply with 
the material change reporting requirements in this section; (c) the 
entrepreneur is no longer employed in a central and active role by the 
start-up entity or ceases to possess at least a 10 percent ownership 
stake in the start-up entity; (d) the alien otherwise violated the 
terms and conditions of parole; or (e) parole was erroneously granted. 
See proposed 8 CFR 212.19(k)(3). The decision to provide notice and an 
opportunity to respond prior to termination of parole under 8 CFR 
212.19 will be made in the discretion of DHS on a case-by-case basis.
    In cases where USCIS provides written notice and an opportunity to 
respond, through a notice of intent to terminate, DHS is proposing to 
provide a period of up to 30 days for the alien's written rebuttal. See 
proposed 8 CFR 212.19(k)(4). The notice of intent to terminate would 
generally identify the grounds for termination of the parole and the 
alien may submit additional evidence in support of his or her rebuttal, 
when applicable. Id. Providing a rebuttal period of up to 30 days is 
generally consistent with rebuttal periods applicable to other 
immigration petitions and applications (e.g., I-129 or I-140). If DHS 
nevertheless decides to terminate parole, the entrepreneur and/or his 
or her spouse and children are restored to the status that he or she 
had at the time of parole, such as being applicants for admission. See 
8 CFR 212.5(e)(2)(i). Consistent with current parole procedures, DHS 
does not propose a right to appeal a decision regarding termination of 
parole on notice. Id.

[[Page 60151]]

    If 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. 
Id.
    In the event of a violation of one or more terms and conditions of 
parole solely by the spouse or a child of the entrepreneur, parole may 
be terminated for the violator (i.e., spouse or child) without 
affecting the entrepreneur's parole. If a spouse whose parole is 
terminated also has employment authorization, the employment 
authorization will be revoked. 8 CFR 274a.14(b)(1)(i).
    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 proposed 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 lawful permanent residency 
through employer sponsorship). If such individuals are approved for a 
nonimmigrant or employment-based immigrant visa classification, they 
would generally be required to depart the United States and apply for a 
visa with DOS. As noted above, because parole is not considered an 
admission to the United States, parolees are unable to apply to adjust 
or change their status in the United States under many immigrant or 
nonimmigrant visa classifications.

H. Automatic Adjustment of Investment and Revenue Amount Requirements

    DHS proposes that the investment and revenue amounts specified at 
proposed 8 CFR 212.19(a)(5), (b)(2)(ii) and (c)(2)(ii) will be 
automatically adjusted every 3 years by the Consumer Price Index for 
All Urban Consumers (CPI-U).\51\ USCIS will provide notice in the 
Federal Register and on its Web site at www.uscis.gov prior to the 
beginning of the fiscal year in which the change would take effect. 
Investment and revenue amounts adjusted by the CPI-U will apply to all 
applications filed on or after the beginning of that fiscal year. DHS 
believes that automatically adjusting the minimum dollar amounts by the 
CPI-U every 3 years will maintain investment and revenue requirements 
at an appropriate level in relation to future economic conditions. DHS 
believes adjusting the minimum dollar amounts every 3 years will be 
more manageable operationally for DHS and less burdensome to applicants 
than adjustments at more frequent intervals. See proposed 8 CFR 
212.19(l).
---------------------------------------------------------------------------

    \51\ The CPI-U produces monthly data on changes in the prices 
paid by urban consumers for a representative basket of goods and 
services. See http://www.bls.gov/cpi/.
---------------------------------------------------------------------------

I. Technical Change

    DHS is proposing a technical change to 8 CFR 274a.2(b)(1)(v)(C) to 
add the Department of State (DOS) Form FS-240 Consular Report of Birth 
Abroad, or successor form, to the list of acceptable documents under 
the ``list C'' column of Form I-9, Employment Verification Eligibility. 
Since 2011, Form FS-240 has been exclusively issued by DOS as evidence 
of a U.S. citizen's birth abroad and acquisition of U.S. citizenship at 
birth, as well as used to replace a lost, stolen, or damaged Form FS-
545 Certification of Birth Abroad or Form DS-1350 Certification of 
Report of Birth. This technical change will formally recognize the Form 
FS-240, or successor form, as an acceptable document to establish 
employment authorization for Form I-9 purposes.

V. 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
    The proposed rule is intended to add new regulatory provisions 
guiding the use of parole with respect to individual foreign 
entrepreneurs of start-up entities whose entry into the United States 
would provide a significant public benefit through the substantial and 
demonstrated potential for rapid growth and job creation. Such 
potential would be 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 would provide the general criteria for 
considering requests for parole submitted by such entrepreneurs.
    DHS assesses that the rule, if finalized, will reduce a barrier to 
entry for new innovative research and entrepreneurial activity in the 
U.S. economy. The full potential of foreign entrepreneurs to benefit 
the U.S. economy is presently limited since many foreign entrepreneurs 
who seek to enter the United States and manage their own start-up 
entities do not qualify under existing nonimmigrant and

[[Page 60152]]

immigrant classifications.\52\ If this rule were finalized, some new 
innovative 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 and job 
creation to the United States.
---------------------------------------------------------------------------

    \52\ 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, sourced to 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 startup. 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 
wish to apply for parole as an entrepreneur would 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 
proposed application; a fee of $85 for biometrics submission; and the 
opportunity costs of time associated with completing the proposed 
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 would face a 
total cost of $1,480. Any subsequent renewals of the parole period 
would result in the same previously discussed costs. Filings to notify 
USCIS of material changes to the entrepreneur's parole, when required, 
would result in similar costs; specifically, in certain instances the 
entrepreneur would be required to submit to USCIS a new form I-941 to 
notify USCIS of material changes to their parole and would thus bear 
the direct filing cost and concomitant opportunity cost. However, 
because the $85 biometrics fee would 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 a Form I-131, Application for Travel 
Document, would 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 would 
be seeking parole and submitting biometrics. Each dependent would incur 
a filing fee of $360, a biometric processing fee of $85 (if 14 years of 
age and over) and the opportunity costs associated with biometrics 
collection. After monetizing the expected opportunity costs associated 
with providing biographical information to USCIS and submitting 
biometrics and combining it with the biometrics processing fee, each 
dependent applicant would face a total cost of $550. DHS is also 
proposing to allow the spouse of an entrepreneur paroled under this 
proposed rule to apply for work authorization. Using a one-to-one 
mapping of principal filers to spouses, the total population of spouses 
expected to apply for work authorization is 2,940, which is an upper 
bound estimate. To obtain work authorization, the entrepreneur's spouse 
would be required to file Form I-765, Application for Employment 
Authorization, incurring a $380 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 would face a total additional cost of $416 (rounded). 
DHS does not anticipate that this rule, if finalized, would generate 
significant costs and burdens to private or public entities. While 
applicants may face a number of costs linked to their business or 
research endeavors, these costs would 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 drawing in foreign entrepreneurs are likely to occur. As 
such, DHS expects that the negative consequences, if any, would be 
greatly exceeded by the positive effects of this rule.
    In each case where an entrepreneur would be granted parole under 
this rule, DHS would have made a determination that parole would yield 
a significant public benefit and that the person requesting parole 
merits a favorable exercise of discretion. Consistent with those 
decisions, the rule would be 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 proposed rule will directly 
and indirectly benefit the U.S. economy and create jobs for American 
workers. In addition, innovation and research and development (R&D) 
spending are likely to generate new patents and new technologies, 
further enhancing innovation. Some portion of the foreign 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 job creation. In summary, DHS anticipates that 
this proposed rule would produce positive effects that would greatly 
exceed any negative consequences.
    Using an estimate of 2,940 annual applications for significant 
public benefit entrepreneur parole developed in the ensuing volume 
projections section of this analysis (these estimates focus only on 
principal initial filers, not entrepreneurs who might be eligible for a 
re-parole period of up to three years, or their spouses), DHS 
anticipates the total cost of this rule for principal filers who face a 
total per applicant cost of $1,480 to be $4,349.827 (undiscounted) 
annually for any given year. Dependent spouses and children who must 
submit Form I-131 and biometrics would face a per-applicant cost of 
$550, for a total cost of $1,779,604 (undiscounted). Dependent spouses 
who apply for employment authorization would face a per applicant cost 
of $416, which DHS projects would total $1,123,630 (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 $7,353,061

[[Page 60153]]

(undiscounted). The total annual cost of the rule of $7,353,061 can be 
expected for each subsequent year in the ten-year period. The total 
ten-year undiscounted cost is $73,530,611.
2. Background and Purpose of the Proposed Rule
    As described more fully in preceding sections of the preamble, 
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 individuals into the United States, 
on a case-by-case basis, for urgent humanitarian reasons or significant 
public benefit. DHS proposes to amend 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 proposed rule would establish general criteria for 
the use of parole with respect to individual entrepreneurs of start-up 
entities whose entry into the United States would provide a significant 
public benefit through the substantial and demonstrated potential for 
rapid growth and job creation.
    The purpose of the proposed 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, given the barriers they presently face. In addition to the 
intangible benefits associated with entrepreneurial innovation, and 
more tangible but difficult to measure benefits associated with new 
products, business networks, and possible 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.\53\
---------------------------------------------------------------------------

    \53\ 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.\54\ 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.
---------------------------------------------------------------------------

    \54\ 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.'' \55\ 
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.\56\ 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.
---------------------------------------------------------------------------

    \55\ 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.
    \56\ See Ryan Decker, John Haltiwanger, Ron Jarmin, and Javier 
Miranda, ``The Role of Entrepreneurship in US 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 proposed rule focuses on identifying entrepreneurs associated 
with types of entrepreneurial firms that are more likely to experience 
high growth, contribute to innovation in the United States, and create 
jobs in the country. This narrowed 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.\57\ 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.\58\ About 95 percent of new 
firms start-up 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.\59\
---------------------------------------------------------------------------

    \57\ 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.
    \58\ 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.
    \59\ 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.\60\ A key finding by the BLS is that as high-growth firms 
age, although they contribute, on average, less and less each year to 
new jobs, by the time they reach the age of 10 years or more, their 
size at that point means that the jobs they do add still account for a 
large share of new jobs. 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.\61\
---------------------------------------------------------------------------

    \60\ See R. Clayton et al., (June 2013), supra at N. 46, 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.
    \61\ 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 at N. 45, pp. 6-24. The BLS and 
others use the term ``gazelles'' to differentiate the fastest 
growing young HGFs.

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[[Page 60154]]

    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.\62\ 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.\63\ 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 impressive performing 
``gazelles.'' \64\
---------------------------------------------------------------------------

    \62\ 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.
    \63\ 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.
    \64\ 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 (as indicated by metrics that include labor 
productivity, profitability, revenue, and research and development 
intensity) of new firms, even high-growth firms, vary 
substantially.\65\ Models that can sort out various business 
characteristics and economic conditions to predict high-growth 
probabilities are still in nascent stages. Nevertheless, this proposed 
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.
---------------------------------------------------------------------------

    \65\ See R. Decker et al. (2014), supra at N. 45, 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, entrepreneurs engage in research and development 
(R&D) in order to develop and commercialize new products and 
technologies. Several studies have found that 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.\66\
---------------------------------------------------------------------------

    \66\ 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 (February 2012), pp. 2-5, available at: http://
www.kauffman.org/~/media/kauffman_org/
research%20reports%20and%20covers/2012/02/
whoareuserentrepreneurs.pdf.
---------------------------------------------------------------------------

    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.\67\ 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.\68\ In sampling-based 
studies, the SBA found a higher foreign-born ownership rate, at 16 
percent, as did the German-based IZA Institute for the Study of Labor, 
which put the rate at 18.2 percent.\69\
---------------------------------------------------------------------------

    \67\ 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 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.
    \68\ 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.
    \69\ 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.
---------------------------------------------------------------------------

    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 gained 
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.\70\ 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.\71\
---------------------------------------------------------------------------

    \70\ 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.
    \71\ 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 3-quarters of the latter in STEM 
fields. As of 2010, more than 40 percent of the Fortune 500 companies 
had been

[[Page 60155]]

founded by an immigrant or the child of an immigrant.\72\
---------------------------------------------------------------------------

    \72\ 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. While no 
evidence points to immigrant entrepreneurs outperforming native-born 
entrepreneurs, the relatively 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.\73\
---------------------------------------------------------------------------

    \73\ 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 well over a decade ago, compelling many economists to 
advocate for policies that attract more entrepreneurs in general.\74\ 
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. A Kauffman Foundation study 
(2013) estimated that, under certain conditions, a start-up visa could 
create between 500,000 and 1.6 million new jobs after ten years.\75\ 
The potential benefits of attracting immigrant entrepreneurs have not 
gone unnoticed internationally, as discussed earlier in the preamble. 
Thirteen of the thirty-four nations who 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.\76\
---------------------------------------------------------------------------

    \74\ See R. Decker et al, (2014), supra at N. 45, p. 16-22.
    \75\ See Dane Stangler and Jared Konczal, ``Give Me Your 
Entrepreneurs, Your Innovators; Estimating the Employment Impact of 
a Startup Visa,'' Ewing Marion Kauffman Foundation, (February 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.
    \76\ 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/webpage/pga_152202.pdf.
---------------------------------------------------------------------------

3. Population of Entrepreneurs Potentially Eligible
    DHS cannot precisely predict the volume of new businesses that 
would start in the United States due to this rule. DHS has instead 
examined available data to provide an estimate of the population of 
individual entrepreneurs who may be eligible to request parole 
consideration under this proposed rule. Given limits on DHS's 
information about such entrepreneurs, DHS does not know how many people 
within the estimated eligible population would actually seek such 
consideration; as such, the estimates contained in this section 
represent an upper bound to the size of the eligible population. DHS 
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 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 proposes that the general criterion for investment from a 
qualified investor (e.g. venture capital firms, angel investors, 
accelerators/incubators) be set at $345,000, while for government 
grants or awards the general criterion would 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 
proposed rule. Table 1 summarizes the analysis by source of funds.

          Table 1--Number of Entrepreneurs Potentially Eligible
------------------------------------------------------------------------
                                                              Annual
                        Sub-group                           eligibility
------------------------------------------------------------------------
New foreign-owned firms funded with investment capital..           2,105
New firms funded with U.S. grants or awards that could               835
 potentially decide to locate to the United States......
                                                         ---------------
    Total...............................................           2,940
------------------------------------------------------------------------

    DHS has no way of predicting with certainty the actual number of 
foreign nationals who would seek parole under this proposed rule over 
time, as the size of the eligible population could change 
significantly. DHS acknowledges that the estimate of individuals 
applying 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, if finalized, will not significantly change the 
frequency of U.S. funded grant applications from foreign researchers; 
and (2) that the rule, if finalized, will not significantly affect the 
market for foreign 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 would be effective, and for the second year, annual 
eligibility will be approximately 2,940.\77\ The next section provides 
key data and analytical approaches utilized to arrive at the population 
estimates. DHS first considers volume estimates based on official U.S. 
data. The resulting estimates based on official data are those utilized 
for the cost projections of the proposed rule. Due to particular 
constraints in the data, DHS follows with an alternative method of 
volume

[[Page 60156]]

estimation that adds robustness to the official estimate.
---------------------------------------------------------------------------

    \77\ 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 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 proposed 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.\78\ Although numerous 
agencies within the Federal Government award grants to foreign-born 
individuals, most are humanitarian or development focused.\79\ 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.\80\ 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.\81\ 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.
---------------------------------------------------------------------------

    \78\ 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.
    \79\ 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.
    \80\ The Federal entities that awarded scientific focused 
research to foreign recipients were: Agricultural Resource Service, 
National Institute of Health, Center for Disease Control, Food and 
Drug Administration, Department of Defense, National Aeronautics and 
Space Administration, National Oceanic and Atmospheric 
Administration, National Institute of Standards and Technology, 
National Science Foundation. The U.S. Department of State and Agency 
for International Development (USAID) were excluded from the 
analysis.
    \81\ 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.\82\ 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 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.
---------------------------------------------------------------------------

    \82\ 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, above. 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 ``born a citizen of the United States'' from the 
Census Bureau's Survey of Business Owners data set.83 84 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.
---------------------------------------------------------------------------

    \83\ 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.
    \84\ 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 a large 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 $345,000, the minimum investment threshold that the rule 
proposes. The SBO data provides ranges of such startup capital amounts 
but DHS could not conduct a precise estimate because the data does 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 would occupy 
the $345,000 to $1 million

[[Page 60157]]

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 3.

                                   Table 3--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''.

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--and 
specifically, a lack of a demarcation threshold of $345,000--but this 
approach provides a reasonable approximation of the upper bound of the 
eligible population in light of the significant data limitations and 
the uncertainty involved with estimating future entrepreneurial 
activity. The main benefit of this method is that it is based on 
official data; a 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 proposed rule. In practice, some, but not all, 
will 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). 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 
proposed rule. However, DHS believes 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 the types of investment structures 
and ventures likely to be involved in the proposed parole process. 
Specifically, DHS believes that there will be three primary sources of 
investment for innovative firms (excluding research grants, which are 
not addressed in this alternative estimate): Venture capital firms, 
angel investors, and business accelerators and incubators 
(``incubators'' for brevity, henceforth).\85\ Hence, by analyzing the 
foreign component of these structures, data permitting, an alternative 
estimate of entrepreneurs can be obtained for comparison purposes.
---------------------------------------------------------------------------

    \85\ DHS is aware that in recent years alternative sources of 
financing for new and young firms, such as crowdsourcing and 
merchant cash advances (MCA), to name just two, have become relevant 
and common in types of industries, and recognizes that such capital 
could finance the types of foreign established firms that parole 
under this rule is intended to involve. However, at present, DHS is 
not aware of sufficient data concerning these new alternative 
methods to include them in the context of the present analysis.
---------------------------------------------------------------------------

    As is the case with the official estimates, this alternative 
method, which focuses on innovative firms and investment types, also 
suffers from limitations. Foremost, DHS recognizes uncertainty around 
utilization rates, i.e. how many potential entrepreneurs among the 
estimated eligible population would actually seek parole under the 
proposed rule. Second, there is potential overlap in these structures; 
for example, firms under incubation often receive angel financing and 
some firms receive both angel financing and venture capital. However, 
since DHS does not have data to separate out such capital infusions, 
each of the three investment types is treated as distinct.
    For venture capital, DHS consulted the National Venture Capital 
Association (NVCA) 2016 yearbook. This yearbook provides the number of 
annual seed venture investments. The data reveal that between 2013 and 
2015, an average of 169 first sequence seed investments were made, 
which DHS considers to be new firms financed with venture capital.\86\ 
To estimate the eligible share of these venture capital backed firms, 
DHS relied on the finding that about one third of venture financed 
companies involved a foreign born owner or founder.\87\ Based on this 
share, approximately 56 firms and individuals (assuming each firm would 
have one foreign individual) annually would be eligible for parole 
(obtained by multiplying the annual average of 169 seed investments by 
0.33). This estimate embodies the assumption that all of the seed 
venture investments are above the investment threshold.\88\
---------------------------------------------------------------------------

    \86\ The NVCA yearbook is found at: http://nvca.org/research/stats-studies/. The figures utilized are found in Figure 3.23, 
``First Sequence by Stage of Development (Number of Deals). ``First 
sequence'' venture finance typically describes the round that is in 
the early stage following the start-up round. It is generally the 
capital investment round linked to producing and selling the firm's 
product.
    \87\ This figure is found in ``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, available at 
http://www.nfap.com/pdf/American%20Made%202.0.Final.pdf.
    \88\ Information from the financial services advisory firm Ernst 
& Young indicates that the median venture capital round for startups 
is $900,000 based on the average for 2013-2014, and the median seed 
round is $850,000. Data in a report in Inc. indicates that median 
venture capital seed round is $1.05 million based on the period 
2013-2015. The information can be found at: http://www.ey.com/
Publication/vwLUAssets/Venture_Capital_Insights_4Q14_-_January_2015/
$FILE/ey-venture-capital-insights-4Q14.pdf and at http://www.inc.com/linkedin/tomasz-tunguz/inflation-deflation-startup-fundraising-market-tomasz-tunguz.html, in order. Although the terms 
``seed'' and ``startup'' can be convoluted, generally seed rounds 
preceded startup finance sequentially. Seed typically ``refers'' to 
capital utilized to found the firm and initialize concept and 
product development while ``startup'' generally refers to new 
capital utilized to support initial production and operations.

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

[[Page 60158]]

    To obtain an incubator estimate, DHS obtained publicly available 
information from SeedDb, which provides data on U.S. incubators 
collected from industry associations and fee-based data providers, 
including CB Insights and Crunchbase, which are two of the largest data 
providers for venture capital, angel investors, and accelerators.\89\ 
The data are not collated in a way amenable to conducting a cohesive 
firm-by-firm or firm-wide analysis, but a DHS review of the available 
data indicates that the date range of firms included is about 2006-2016 
(as of the last DHS data pull on March 20, 2016). The total number of 
firms is 6,248, yielding an annual average over 11 years of 568. Since 
all of these firms had to enter incubation at some point in the 11-year 
period, 568 is a reasonable estimate of the average number of firms 
entering incubation per year. One of the data suites lists the total 
number of companies incubated for each incubator 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.\90\ Applying the 
25 percent foreign share to the annual 568 firms, DHS estimates that 
about 144 firms could be eligible annually. DHS expects that not all 
foreign firms that enter incubation will meet the $345,000 investment 
threshold, but because DHS will potentially consider other factors for 
such firms, a threshold rate is not applied to the estimate for 
purposes of this analysis.
---------------------------------------------------------------------------

    \89\ The SeedDB information is found at the Web site is://
www.seed-db.com/.
    \90\ 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.
---------------------------------------------------------------------------

    Having estimated 56 venture firms and 144 incubator firms as 
potentially eligible, DHS next estimated the largest source of startup 
investment, angel investors. Based on the most recent data from the 
Center for Venture Research, about 25 percent of angel investments are 
made at the seed and startup stage. For the 71,000 companies receiving 
angel financing per year, about 17,750 could be considered new, which 
compares favorably to other, unrelated sources that note that about 
16,000 new firms are financed with angel investments per year.\91\
---------------------------------------------------------------------------

    \91\ This figure is reported in, among other sources: http://www.angelblog.net/Angels_Finance_27_Times_More_Start-ups_Than_VCs.html and http://www.entrepreneurship.org/emed/angel-investing-versus-venture-capital-part-i.aspx.
---------------------------------------------------------------------------

    DHS used the 17,750 annual figure for angel backed startups and 
multiplied that number by the same 25 percent rate for foreign 
identifiers found in the SeedDB data. DHS is aware that many angel 
investments are made at low levels and that there is a wide range of 
such investment amounts. DHS does not have publicly available data in 
which to analyze a distribution of angel backed firms, and operates 
under the assumption that the $345,000 average is also the median, as 
is the case for a normal distribution. DHS multiplied the resulting 
foreign cohort by 0.5. The result of these extrapolations yields a 
figure of 2,151, which is an estimate of the potential population of 
eligible new firms annually financed by angel investments. By adding 
the three investment-type estimates together--144 incubator firms, 56 
venture-backed firms, and 2,151 angel-backed firms--the resulting sum 
is 2,351. While uncertainties and limitations of the data involved in 
the volume estimates have been enunciated in detail, the closeness of 
this estimate to the 2,105 figure based on the Census and BLS data, 
adds robustness and confidence to the official estimate utilized in the 
cost projections.
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 foreign 
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.\92\ 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 the past four fiscal years (FY 2010-2013), an 
average of 77 foreign nationals have 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. If the rule is 
finalized, 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. However, 
DHS does not believe such substitution would occur on a large scale 
because the ability to be admitted to the United States as a 
nonimmigrant offers materially more benefits and protection than 
parole.
---------------------------------------------------------------------------

    \92\ 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.
---------------------------------------------------------------------------

    In addition, the proposed rule lists a number of ancillary 
conditions for eligibility--and conversely a number of conditions that 
would 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 larger than the estimates herein. Two examples are that 
under the proposed 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 proposed rule, DHS would 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). Although, 
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.

[[Page 60159]]

4. Costs
A. Principal Filer Costs
    The proposed rule would permit certain foreign nationals to apply 
for a 2-year initial period of parole into the United States provided 
they meet the proposed eligibility criteria. Those who seek such parole 
into the United States would face the costs associated with the 
application, which involve a $1,200 application fee plus other costs, 
detailed below. The costs would stem from filing fees and the 
opportunity costs of time associated with filing the Application for 
Entrepreneur Parole, Form I-941.
    The proposed filing fee for Form I-941 is $1,200. The fee is set at 
a level intended to recover the anticipated processing costs to 
DHS.\93\ 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.\94\ 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.
---------------------------------------------------------------------------

    \93\ 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 proposed 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 proposed 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 would 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 
proposed rule.
    \94\ See National Occupational Employment and Wage Estimates 
United States. May 2014. Department of Labor, Bureau of Labor 
Statistics, Occupational Employment Statistics program. Available at 
http://www.bls.gov/oes/2014/may/oes_nat.htm.
---------------------------------------------------------------------------

    DHS estimates that the proposed application would take 1.33 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 would incur the following 
costs to comply with the proposed 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.\95\ 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, would 
total $121.68.\96\ In addition to the opportunity cost of providing 
biometrics, applicants would experience travel costs related to 
biometrics collection. The cost of such travel would 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.\97\ DHS 
assumes that each individual would travel independently to an ASC to 
submit his or her biometrics, meaning that this rule would impose a 
time cost on each of these applicants.
---------------------------------------------------------------------------

    \95\ Foreign nationals who submit their applications from 
outside the United States would 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. 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.
    \96\ Calculation: $33.16 * 3.67 hours = $121.68.
    \97\ 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 would incur the 
following costs: $1,285 in filing fees to cover the processing costs 
for the application and biometrics; $194.53 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 $1,479.53 per application, rounded 
to $1,480.\98\ If DHS receives 2,940 applications from persons eligible 
to apply, DHS anticipates that such applications would 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 $571,927, for a total annual cost of $4,349,827. 
Any subsequent renewal of the parole period or material changes 
requiring the filing of an amended application would result in costs 
similar to those previously discussed, with the possible exception of 
travel costs, since the applicant would not be required to depart the 
United States and re-enter.
---------------------------------------------------------------------------

    \98\ Calculation: $1,285 + 194; $1,285 is the sum of the direct 
cost of the $1,200 filing fee and the $85 cost of biometrics. The 
$194 (rounded) figure is obtained by adding the cost of travel 
($28.75) plus the total opportunity cost of $166, the latter of 
which is the product of the total time burden (5 hours) and the 
average burdened hourly wage ($33.16).
---------------------------------------------------------------------------

B. Dependent Spouses and Children
    The proposed rule would require all dependent family members 
(spouses and children) accompanying or joining the entrepreneur to file 
a Form I-131, Application for Travel Document, and would require all 
spouses and children 14 years of age through age 79 to submit 
biometrics. Those spouses and children would 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.\99\ 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.\100\
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    \99\ 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.
    \100\ See ``Employment Authorization for Certain H-4 Dependent 
Spouses; Final rule,'' 80 FR 10284 (25 Feb. 2015); and ``Provisional 
and Unlawful Presence Waivers of Inadmissibility for Certain 
Immediate Relatives; Final Rule,'' 78 FR 536, 572 (3 Jan. 2013).
---------------------------------------------------------------------------

    DHS would require dependents of parole applicants (spouses and 
children

[[Page 60160]]

of the parole applicant) to file an Application for Travel Document 
(Form I-131) in order to be scheduled for biometric submission. There 
is a $360 filing fee associated with Form I-131, and DHS estimates it 
will take 3.56 hours to complete each submission. In addition to filing 
the Form I-131, each dependent spouse and child 14 years of age and 
over would 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 would 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.\101\ 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 would experience travel costs related to 
biometrics collection. The cost of such travel would 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.\102\ 
DHS has assumed that each applicant would travel independently to an 
ASC to submit his or her biometrics, meaning that this rule would 
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.
---------------------------------------------------------------------------

    \101\ 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 (25 Feb. 2015); and ``Provisional and Unlawful Presence 
Waivers of Inadmissibility for Certain Immediate Relatives; Final 
Rule,'' 78 FR 536, 572 (3 Jan. 2013).
    \102\ See U.S. General Services Administration Web site for 
Privately Owned Vehicle (POV) Mileage Reimbursement Rates, http://www.gsa.gov/portal/content/100715 (accessed August 8, 2015).
---------------------------------------------------------------------------

    DHS projects that approximately 3,234 dependents would be required 
to file a Form I-131 and submit biometrics, based on the estimate of 
2,940 principal applicants and using a multiplier for expected family 
members of 1.1.\103\ 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 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 
$105.78, and the total cost per applicant is $550. At the projection of 
3,234 applicants, the non-filing cost is $340,474 (undiscounted), and 
combined with filing costs of $1,439,130, the total estimated cost for 
dependents germane to Form I-131 is $1,779,604.
---------------------------------------------------------------------------

    \103\ The multiplier of 1.1 was obtained from DHS estimates of 
the average historical ratio of principal versus dependent 
recipients of LPR 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), proposed 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 proposes to allow unrestricted employment 
authorization for spouses of entrepreneurs granted parole under this 
rule. DHS proposes to permit these individuals to apply for employment 
authorization by filing Form I-765. 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 1,813 spouses, the 
same number as entrepreneur parolees.
    The current filing fee for Form I-765 is $380.00. 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 $1,117,200 
(undiscounted). DHS estimates the time burden of completing Form I-765 
is 3.42 hours.\104\ 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 
$1,117,200, the total estimated cost for spouses germane to Form I-765 
is $1,223,630.
---------------------------------------------------------------------------

    \104\ Source: Paperwork Reduction Act (PRA) Supporting Statement 
for Form I-765 (OMB control number 1615-0040). The PRA Supporting 
Statement can be found at Question 13 on Reginfo.gov at http://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201502-1615-004.
---------------------------------------------------------------------------

    In addition to the filing costs, applicants for parole may face 
other costs associated with their entrepreneurial activities. These 
could include the administrative costs of starting up a business, 
applying for grants, obtaining various types of licenses and permits, 
and pursuing qualified investments. However, these costs apply to the 
entrepreneurial activity and the business activity that the applicant 
has chosen to be involved in and are not driven by the parole process 
or other governmental functions attributable to the rule itself. Hence, 
DHS does not attempt to estimate, quantify, or monetize such costs.
    Lastly, DHS recognizes that some individuals who were lawfully 
admitted in the United States in certain nonimmigrant classifications 
may seek parole. They would thus apply for parole and, if approved, 
exit the United States and request to be paroled into the United States 
at a port of entry, as parole will not involve any direct change from 
other nonimmigrant status. Such applicants would 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, would 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 would 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 proposed parole program from other 
programs and such applicants and dependents would incur travel and 
possible other costs related to exit and re-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,

[[Page 60161]]

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.\105\ 
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 irrefutable 
evidence that it had occurred.\106\ Another study, conducted by the 
Brookings Institution, did not find displacement but acknowledged that 
more research and refined control techniques, along with longitudinal 
data, would need to be studied before ruling out the possibility 
completely.\107\ In any event, the purpose of the proposed 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, offsetting 
any potential negative impacts for this group.
---------------------------------------------------------------------------

    \105\ 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.
    \106\ 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.
    \107\ See Zoltan J. Acs and David M. Hart, ``Immigration and 
High-Impact, High-Tech Entrepreneurship,'' Brookings, Issues in 
Technological innovation (February 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 would 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.\108\ 
Consequently, the estimated ``new'' available workers in the first year 
would represent approximately 0.001 percent of the overall U.S. 
civilian labor force.\109\ DHS believes this fraction is too small to 
have a significant impact on the labor market.
---------------------------------------------------------------------------

    \108\ 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.
    \109\ Source: United States Department of Labor, Bureau of Labor 
Statistics, Local Area Unemployment Statistic. Figure applies to 
seasonally adjusted level for December 2014, available at: http://data.bls.gov/timeseries/LNS11000000. Calculation for new worker 
labor force share: 1813/157,130,000.
---------------------------------------------------------------------------

    While the figures above apply to the general U.S. labor force, DHS 
recognizes that concentration of new labor force entrants can impact 
specific labor markets. DHS believes that any such potential impacts 
linked to this rule will be insignificant. The NVCA and other sources 
of information that DHS reviewed indicates that while the area of 
California known as Silicon Valley has traditionally been, and 
continues to be, the primary recipient geographically for technology 
startup capital, other large urban centers on the East Coast and, even 
more recently, parts of the Mid- and Mountain West have seen increased 
technology startup activity. To provide just one example of a potential 
area-specific impact, DHS considered the San Jose-San Francisco-Oakland 
(CA) Combined Statistical Area (CSA) conjoining the seven Metropolitan 
Statistical Areas (MSAs) and nine encompassed counties constituting the 
economic linkages of Silicon Valley. Based on data from the BLS, the 
population of this CSA is about 8.6 million (as of May 2014) and the 
employed population (a narrower measure of the labor market than the 
labor force) about 3.75 million. If the share of new entrants is based 
on the proportion of venture capital to the area, which is 42 percent, 
then 2,746 spousal entrants could impact the area.\110\ Assuming such 
entrants gain employment, this cohort represents just 0.02 percent of 
the employed population of the specific CSA.
---------------------------------------------------------------------------

    \110\ 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 x 1813) = 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 proposed Form I-941 
based on notional application filing volumes and estimated resource 
commitments. During the biennial fee review, DHS 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 proposed 
rule would reduce entry barriers, and thus support efforts by foreign 
entrepreneurs to generate entrepreneurial activity in the United 
States.
    The proposed rule is expected to generate important net benefits to 
the United States economy. For one, expenditures on research and 
development by the estimated annual grant-based researchers that DHS 
has identified that could qualify for entrepreneur parole would 
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 actual 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, various 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 productivities and profitability for firms 
that benefit indirectly through new products generated by such 
innovation.
    Lastly, DHS believes that a subset of the start-up firms formed by 
foreign entrepreneurs during the proposed parole period could 
eventually become high-growth firms that generate high levels of 
profitability and contribute disproportionately to job creation in the 
United States.

[[Page 60162]]

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as 
amended by the Small Business Regulatory Enforcement Fairness Act of 
1996, Public Law 104-121 (Mar. 29, 1996), requires Federal agencies to 
consider the potential impact of regulations on small businesses, small 
governmental jurisdictions, and small organizations during the 
development of their rules. The term ``small entities'' comprises small 
businesses, not-for-profit organizations that are independently owned 
and operated and are not dominant in their fields, and governmental 
jurisdictions with populations of fewer than 50,000. Individuals are 
not defined as a ``small entity'' by the RFA.
    DHS has reviewed this regulation in accordance with the Regulatory 
Flexibility Act and certifies that this rule would not have a 
significant economic impact on a substantial number of small entities. 
This proposed rule would provide guidance on the use of parole for 
entrepreneurs who seek it on a voluntary basis. The proposed rule would 
not mandate that all individuals apply for parole. This proposed 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 proposed 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 proposed 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 to not avail 
themselves to the requirements of the rule and would then 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 entrepreneur parole. 
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 proposal. DHS believes that the 
costs of application for parole would burden the individual applicant, 
and not the entrepreneurial venture (firm). This proposed rule would 
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 proposed 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 would be insignificant compared to such entities' annual 
gross revenues, potential for revenue, and other economic activity. DHS 
welcomes public comment on the numbers of small business entities that 
may be impacted by this rule, the likely compliance costs for these 
entities, and any potential alternatives that may minimize these 
compliance costs.
    For businesses that may pay the filing costs, the expected impact 
to such businesses would be small. For businesses that utilize either 
the minimum threshold of $100,000 from a Federal grant or $345,000 in 
capital investment to source the filing costs, such costs would 
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. 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.\111\ The filing cost relative to these 
averages is 0.42 percent and 0.31 percent, respectively.
---------------------------------------------------------------------------

    \111\ 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 
proposed rule defines a new firm as one that is less than three years 
old, DHS grouped private sector firms for the 2012 survey as those 
responding that the year of establishment was either 2012, 2011, or 
2010. 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 would face a filing-cost 
burden of 0.8 percent.\112\ 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 would 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 
would be eligible to participate in this program.
---------------------------------------------------------------------------

    \112\ 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 would be 
primarily incurred by the individual (which is not covered by the RFA), 
any direct cost due to this rule would be relatively minor, and these 
costs would 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 serve a 
significant public benefit under this proposed rule. Furthermore, even 
if firms do voluntarily decide to incur the compliance costs on behalf 
of the

[[Page 60163]]

individual requesting consideration for parole under the proposed 
criteria, the only compliance costs those businesses would be permitted 
to incur would 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 would not have a 
significant economic impact on a substantial number of small entities.

E. 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.

F. Executive Order 12988

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

G. Paperwork Reduction Act

    Under the Paperwork Reduction Act (PRA) of 1995, 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 proposed rule requires that an applicant requesting 
entrepreneur parole complete an Application for Entrepreneur Parole, 
Form I-941, and is considered a new information collection that is 
covered under the PRA. To allow spouses and dependent children of the 
entrepreneur to remain united as a family, DHS will need to revise the 
Application for Travel Document, Form I-131, for these dependent family 
members to request parole.
    This proposed rule also requires a revision to Employment 
Eligibility Verification, Form I-9, which has been previously approved 
for use by OMB under the PRA. The OMB Control Number for this 
information collection is 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) allowing 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.
    Lastly, this proposed rule will require minor revisions to the 
Application for Employment Authorization, Form I-765, to reflect 
proposed changes that allow spouses of an entrepreneur parolee to 
request employment authorization.
    DHS has submitted these information collection requests to OMB for 
review and approval under the PRA. Accordingly, DHS is requesting 
comments on these impacted information collections. See the ADDRESSES 
section above for instructions on how to submit comments to DHS and OMB 
on the information collection provisions of this rulemaking. Written 
comments and suggestions from the public and affected agencies 
concerning the collection of information are encouraged. When 
submitting comments on these information collections, your comments 
should address one or more of the following four points:
    (1) Evaluate whether the collection of information is necessary for 
the proper performance of the agency, including whether the information 
will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the collection of information, including the validity of the 
methodology and assumptions used;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of the information on 
those who are to respond, including through the use of any and all 
appropriate automated, electronic, mechanical, or other technological 
collection techniques or other forms of information technology (e.g., 
permitting electronic submission of responses).

Overview of Information Collection, Application for Entrepreneur 
Parole, Form I-941

    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 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.
    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: 
Applicants requesting entrepreneur parole; Businesses and/or other non-
profit entities.
    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 1.33 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 3,910 hours for the Form I-
941 and 3,440 hours for the biometric processing, for a total of 7,350 
hours.

Overview of Information Collection, Application for Travel Document 
Form I-131, OMB Control No. 1615-0013

    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: 
Dependents of applicants requesting entrepreneur parole.
    f. An estimate of the total annual numbers of respondents: 594,324; 
3,234 additional respondents as a result of this rule.
    g. Hours per response: The estimated hour per response for Form I-
131 Supplement is 1.90 hours. The estimated hour burden per response 
for the biometric processing is 1.17 hours.
    h. Total Annual Reporting Burden: 1,372,928; the total estimated 
additional

[[Page 60164]]

annual hour burden associated with this collection is 143,942 hours.

Overview of Information Collection, Employment Eligibility 
Verification, Form I-9, OMB Control No. 1615-0047

    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: 
Employers, employees, recruiters and referrers for a fee (limited to 
agricultural associations, agricultural employers, or farm labor 
contractors), and state employment agencies.
    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

    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: 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: 
Spouses of applicants requesting entrepreneur parole.
    f. An estimate of the total annual numbers of respondents: 
1,984,456; 2,940 additional respondents (assuming a 1:1 ratio based on 
the total estimate of principal applicants for entrepreneur parole).
    g. Hours per response: The estimated hour per response for Form I-
765 is 3.42 hours. The estimated hour burden per response for the 
biometric processing is 1.17 hours.
    h. Total Annual Reporting Burden: 8,196,568; the total estimated 
additional annual hour burden associated with this collection is 11,525 
hours.

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 is proposing to amend chapter I of title 8 of the 
Code of Federal Regulations as follows:

PART 103--POWERS AND DUTIES; 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.
0
2. Section 103.7 is amended by adding paragraph (b)(1)(i)(FFF) to read 
as follows:


Sec.  103.7  Fees.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (FFF) Application for Entrepreneur Parole (Form I-941). For filing 
an application for parole for entrepreneurs: $1,200.

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

0
3. The authority citation for part 212 is amended 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, Public Law 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 15 percent ownership interest in the start-up entity at the 
time of adjudication of the initial grant of parole and maintains at 
least a 10 percent ownership interest in the start-up entity at all 
times during the period of parole and any subsequent period of re-
parole.
    (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

[[Page 60165]]

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 3 years immediately preceding the filing date of the alien's 
initial parole request. For purposes of paragraphs (a)(3) and (a)(5) of 
this section, an entity may be considered recently formed if it was 
created within the 3 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 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 equity or convertible 
debt issued by such entity. 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 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 or convertible debt in at least 3 
separate calendar years comprising a total in 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.
    (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; and 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.
    (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, 
or successor form) 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 365 days immediately preceding the filing of 
an application for initial parole, a qualified investment amount of at 
least $345,000 from one or more qualified investors; or
    (2) Received, within 365 days 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

[[Page 60166]]

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, or successor form) 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) 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 10 qualified jobs with the start-up entity 
during the initial parole period; or
    (3) Reached at least $500,000 in annual revenue 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) may alternatively meet the 
standard 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 2 years from the date the request is approved by USCIS. 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 3 years 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, or successor form), 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, or 
successor form), 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

[[Page 60167]]

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 maintains at least a 10 percent ownership interest in the start-up 
entity, the entrepreneur must submit a new Application for Entrepreneur 
Parole (Form I-941, or successor form) with filing fee (not including 
any biometrics fees) and supporting documentary evidence 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 at least a 10 
percent ownership stake in the start-up entity.
    (k) Termination of parole--(1) In general. DHS may, in its 
discretion, 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 may, in its discretion, 
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 at 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 at least a 10 
percent 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 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 at least a 
10 percent 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.

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 revision reads 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, or successor forms;
* * * * *
0
7. Section 274a.12 is amended by:
0
a. Revising paragraph (b) introductory text,
0
b. Adding and reserving new paragraphs (b)(25) through (36);
0
c. Adding a new paragraph (b)(37);
0
d. Revising paragraph (c)(11);
0
e. Adding and reserving new paragraphs (c)(27) through (33);
0
f. Adding a new 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 admission in, or 
subsequent change to, such classification. An alien in one of these 
classes is not issued an employment authorization document by DHS:
* * * * *
    (25)-(36) [Reserved] (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-

[[Page 60168]]

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 Sec.  274a.12(b)(37) and (c)(34) 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.
* * * * *
    (27)-(33) [Reserved]
    (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. 2016-20663 Filed 8-26-16; 1:00 pm]
BILLING CODE 9111-97-P