USCIS、2022年EB-5改革・公正化法の施行規則案を発表

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U.S. Citizenship and Immigration Services (“USCIS”), Department of Homeland Security (“DHS”).

Notice of proposed rulemaking.

This proposed rule would implement the EB-5 Reform and Integrity Act of 2022 (RIA), which the President signed on March 15, 2022. The RIA substantially reforms and adds significant integrity provisions to the employment-based, fifth preference (EB-5) visa category for alien investors and the associated Regional Center Program. In general, under the EB-5 program, aliens are eligible to apply for lawful permanent resident status in the United States if they make the necessary investment in a new commercial enterprise in the United States and create 10 permanent full-time jobs for qualified U.S. workers.

Submission of Public Comments: Written comments must be submitted on or before August 31, 2026. The electronic Federal Docket Management System will accept comments prior to midnight eastern time at the end of that day.

You may submit comments on the entirety of this proposed rulemaking package, identified by DHS Docket No. USCIS-2026-0100, through the Federal Register eRulemaking Portal: http://www.regulations.gov. In accordance with 5 U.S.C. 553(b)(4), the summary of this rule found above may also be found at https://www.regulations.gov. Follow the website instructions for submitting comments.

Comments must be submitted in English, or an English translation must be provided. Comments that will provide the most assistance to USCIS in implementing these changes will reference a specific portion of the proposed rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change. Comments submitted in a manner other than the one listed above, including emails or letters sent to DHS or USCIS officials, will not be considered comments on the proposed rule and may not receive a response from DHS. Please note that DHS and USCIS will not accept any comments that are hand-delivered, couriered, or sent by mail. In addition, USCIS cannot accept comments contained on any form of digital media storage devices, such as CDs/DVDs and USB drives. If you cannot submit your comment by using http://www.regulations.gov, please contact the Regulatory Coordination Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, Department of Homeland Security, by telephone at (240) 721-3000 for alternate instructions.

Immigrant Investor Program Office, Field Operations Directorate, U.S. Citizenship and Immigration Services, Department of Homeland Security, 5900 Capital Gateway Drive, Camp Springs, MD 20746; telephone (240) 721-3000. Individuals with hearing or speech impairments may access the telephone number above via TTY by calling the toll-free Federal Information Relay Service at 711.

I. Public Participation

II. Executive Summary

A. Purpose of the Regulatory Action

B. Legal Authority

C. Summary of Proposed Regulatory Changes

D. Summary of Benefits and Costs

III. Background and Purpose

A. The EB-5 Program

B. The Regional Center Program

C. The EB-5 Immigrant Visa Process

IV. Discussion of Proposed Rule

A. Regulatory Background, Proposed Structure, and Implementation of This Rule

B. Definitions

C. National Security and Fraud

D. Alien Investors

E. Targeted Employment Areas

F. Infrastructure Projects

G. Troubled Businesses

H. Regional Center Program

I. Removal of Conditions

J. Withdrawal Requests and Petition Revocations

K. Severability

V. Statutory and Regulatory Requirements

A. Executive Order 12866 (Regulatory Planning and Review), Executive Order 13563 (Improving Regulation and Regulatory Review), and Executive Order 14192 (Unleashing Prosperity Through Deregulation)

B. Regulatory Flexibility Act

C. Unfunded Mandates Reform Act of 1995 (UMRA)

D. Executive Order 13132 (Federalism)

E. Executive Order 12988 (Civil Justice Reform)

F. Family Assessment

G. Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments)

H. National Environmental Policy Act

I. Administrative Procedure Act

J. Paperwork Reduction Act

ACS American Community Survey

AML/CFT Anti-money Laundering and Countering the Financing of Terrorism

ASC Application Support Center

BLS Bureau of Labor Statistics

CFR Code of Federal Regulations

CPI-U Consumer Price Index for All Urban Consumers

CY Calendar Year

DHS Department of Homeland Security

EB-5 Employment-Based Fifth Preference

EIA Economic Impact Analysis

FIRRMA Foreign Investment Risk Review Modernization Act of 2018

FR Federal Register

FY Fiscal Year

GAAS Generally Accepted Auditing Standards

GAO Government Accountability Office

GS General Service

GSA General Services Administration

HSA Homeland Security Act

INA Immigration and Nationality Act

INS Immigration and Naturalization Service

IPO Immigrant Investor Program Office

IRFA Initial Regulatory Flexibility Analysis

JCE Job-Creating Entity

LAUS Local Area Unemployment Statistics

LPR Lawful Permanent Resident

MSA Metropolitan Statistical Area

NAICS North American Industry Classification System

NCE New Commercial Enterprise

NEPA National Environmental Policy Act

OCB Oracle Crystal Ball®

OMB Office of Management and Budget

PRA Paperwork Reduction Act

RC Regional Center

RFA Regulatory Flexibility Act of 1980

RIA EB-5 Reform and Integrity Act of 2022

SAM Staffing Allocation Model

SBA Small Business Administration

SBREFA Small Business Regulatory Enforcement Fairness Act of 1996

SEC Securities and Exchange Commission

SOC Standard Occupational Classification

TEA Targeted Employment Area

UMRA Unfunded Mandates Reform Act of 1995

U.S.C. United States Code

USCIS United States Citizenship and Immigration Services

VPC Volume Projection Committee

DHS invites all interested parties to participate in this rulemaking by submitting written data, views, comments, and arguments on all aspects of this proposed rule. DHS also invites comments that relate to the economic, environmental, or federalism effects that might result from this proposed rule. Comments must be submitted in English, or an English translation must be provided. Comments that will ( printed page 40677) provide the most assistance to USCIS in implementing these changes will reference a specific portion of the proposed rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change. Comments submitted in a manner other than the one listed above, including emails or letters sent to DHS or USCIS officials, will not be considered comments on the proposed rule and may not receive a response from DHS. In addition to its general call for comments, DHS is specifically seeking comments on:

A. Audits and a regional center's record keeping requirements under section 203(b)(5)(E)(vii) of the Immigration and Nationality Act (INA);

B. The types of projects that may meet the definition of an infrastructure project;

C. The high unemployment area designation process, including the most appropriate data sources to calculate weighted unemployment average of census tracts and how a regional center should renew the designation of a previously designated high unemployment area under section 203(b)(5)(B)(ii)(IV) of the INA, 8 U.S.C. 1153(b)(5)(B)(ii)(IV);

D. Redeployment of alien investor capital under section 203(b)(5)(F)(v) of the INA, 8 U.S.C. 1153(b)(5)(F)(v), including the process a regional center should use to document its compliance with the statutory requirements; and

E. The process for registering direct and third-party promoters of a regional center, new commercial enterprise, or job-creating entity.

DHS also invites comments on the economic analysis supporting this rule and the proposed form revisions.

Instructions: If you submit a comment, you must include the agency name (U.S. Citizenship and Immigration Services) and the DHS Docket No. USCIS-2026-0100 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 redact information that is offensive or impacts the privacy of an individual. For additional information, please read the Privacy and Security Notice available at http://www.regulations.gov.

Docket: For access to the docket to read background documents or comments received, go to http://www.regulations.gov, referencing DHS Docket No. USCIS-2026-0100. You may also sign up for email alerts on the online docket to be notified when comments are posted or a final rule is published.

The Department of Homeland Security (DHS) proposes to update its regulations governing EB-5 alien investors and the Regional Center Program to reflect new requirements provided in the INA, 8 U.S.C. 1101 et seq., as amended by the EB-5 Reform and Integrity Act of 2022 (RIA). Public Law 117-103, Division BB, 136 Stat. 1070 (2022).

The Secretary of Homeland Security's authority for the regulatory amendments is found in various provisions of the INA, RIA, 21st Century Department of Justice Appropriations Authorization Act, Public Law 107-273, 116 Stat. 1758 (2002), and the Homeland Security Act of 2002 (HSA), Public Law 107-296, 116 Stat. 2135, 6 U.S.C. 101 et seq. General authority for issuing the rule is found in section 103(a) of the INA, 8 U.S.C. 1103(a), which authorizes the Secretary to administer and enforce the immigration and nationality laws, including establishing regulations deemed necessary to carry out that authority, as well as section 102 of the HSA, 6 U.S.C. 112, which vests all of the functions of DHS in the Secretary and authorizes the Secretary to issue regulations. Specific authority for the proposed regulatory amendments includes:

DHS proposes the following major revisions to the EB-5 program regulations:

DHS proposes certain miscellaneous technical amendments to improve the readability of the regulatory provisions and eliminate unnecessary descriptions of internal procedures. These modifications are not intended to be substantive and would not change eligibility criteria or evidentiary standards or confer rights or obligations upon any party. In addition to the changes mentioned in this summary, DHS is also describing proposed technical changes in the relevant sections. DHS invites comments on these changes during the public comment period.

DHS proposes to modify references to specific form names, and numbers, where appropriate, from various regulatory provisions and replace them with general references to the type of application and petition, in recognition that these forms may evolve or change over time, be consolidated, discontinued, or modified, especially with the expansion of online filings. Removing form numbers, where appropriate, would provide greater flexibility to account for future changes to the form or how the forms are filed.

DHS also proposes to update terminology, as some of the regulations predate the creation of DHS. As such, DHS proposes, for example, to replace the term “Service,” which is the outdated reference to the former Immigration and Naturalization Service, with “USCIS,” “Department,” or “DHS,” as appropriate. Additionally, DHS proposes to remove the term “shall” and to replace it with the term “will,” where appropriate, to clearly indicate what action USCIS will take. Making these changes will assist with clarity and readability of the provisions. Finally, DHS is also proposing to remove, in certain regulatory provisions, the phrase “alien entrepreneur” and add, in its place, the phrase “alien investor.” See proposed 8 CFR 216.2 and 216.3.

DHS also proposes to remove em-dashes, where appropriate. See proposed 8 CFR 216.6(a). Finally, DHS proposes grammatical changes to better reflect the intended meaning. For example, DHS proposes to change “which” to “that” in proposed 8 CFR 216.3(b) to read “obtained permanent resident status through a commercial enterprise that was improper.”

DHS proposes to update and align its regulations governing EB-5 immigrant investors and the Regional Center Program to reflect new requirements provided in the RIA. The proposed rule would apply to business entities involved in EB-5 program investment activity; regional centers (RCs), New Commercial Enterprises (NCEs), and Job Creating Entities (JCEs). It would thus apply to investors and some individuals associated with the businesses. This rule proposes numerous technical changes, codifications, clarifications, guidance, and procedural and operational adjustments to the EB-5 program. Many of the changes are not expected to create economic impacts. For provisions that are expected to generate impacts, DHS has made estimates of some, but not all potential impacts due to data and information constraints.

EB-5 investment activity can be influenced by local, regional, and national factors relevant to economic growth, employment, demand for types of investment, and availability of capital. It can also be influenced by factors such as capital mobility in particular regions and countries outside the United States. The variation in past program investments and intensity within certain project areas (types of projects and geographical areas) could have been and may be influenced by multiple factors that are exogenous to the regulatory framework of the EB-5 program. It is not possible to sort out or identify all the possible factors that can influence the program to determine exactly how the investment activity and related business entities would be impacted, and further, what the effects from and responses to the impacts could be. The multiple provisions being proposed are intended to align the practice of the program with its true intent of stimulating domestic capital investment and job creation while rooting out problems the program has encountered. Second, most of the impacts are expected to accrue to time-related, administrative, documentary, evidentiary, and organizational efforts needed to meet the requirements of the provisions, and this is not something that can be quantified.

The proposed rule seeks to implement RIA's provisions to improve the program along five pathways. First, it would provide clear and thorough guidance to program participants and the public concerning practices, responsibilities, and requirements of the program under the RIA.[1] Second, it would provide DHS with a set of tools to implement provisions under RIA to protect the EB-5 program from fraud and threats to national security, including sanctions that also act as incentives for EB-5 entities to engage in appropriate practices to avoid sanctions. Third, it would support RIA's stringent oversight and evidentiary requirements to provide more assurance that program activities and investments meet compliance standards. Fourth, it would provide some flexibilities for investors to deal with changes in business conditions pertinent to them.

As is noted above, it is not possible to determine how specific entities ( printed page 40679) would be impacted by specific provisions and what the resulting effects of such impacts would be. However, DHS can draw on some information and data to make partial quantified estimates applicable to some provisions. For the impacts that could be estimated and quantified, at a three percent discount rate the annualized impacts over ten years could range from $39.90 million to $87.36 million, with a midpoint of $63.59 million. At a seven percent discount rate, annualized impacts could range from $38.80 million to $85.39 million, with a midpoint of $62.06 million. These monetized estimated impacts will accrue to the public and private sector.

Table 1 presents the main provisions in the proposed rule, beginning with the monetized estimates (or the quantified impacts) (Table 3A), following by the unquantified impacts (Table 3B), whereas monetized figures reflect the annualized amount for the midpoint of a range, at a seven percent discount rate. The population figures reflect annual averages unless otherwise stated. The information in Table 3 is presented as a broad outline with greater detail provided in the ensuring analysis.

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In addition to the summary of potential impacts elucidated in Table 3, DHS offers the OMB A-4 accounting statement in Table 2.

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Comprehensive details aligned to the impacts summarized here are provided in the accompanying regulatory impact assessment.

Congress established the EB-5 immigrant visa classification for investors associated with employment creation as part of the Immigration Act of 1990. Public Law 101-649, 104 Stat. 4978. With the amendments made by the RIA, Public Law 117-103, Division BB, 136 Stat. 1070 (2022), the EB-5 ( printed page 40687) classification makes lawful permanent resident (LPR) status available to aliens who invest at least $1.05 million in a new commercial enterprise (NCE) that will create at least 10 full-time jobs for qualifying employees [2] in the United States. See INA sec. 203(b)(5)(C)(i), 8 U.S.C. 1153(b)(5)(C)(i). The required investment amount is lowered to $800,000 if the investment is made in a Targeted Employment Area (TEA) or in an infrastructure project. See INA sec. 203(b)(5)(C)(ii), 8 U.S.C. 1153(b)(5)(C)(ii). A TEA is a rural area or area designated by DHS as an area of high unemployment. See INA sec. 203(b)(5)(D)(viii), 8 U.S.C. 1153(b)(5)(D)(viii); see also INA secs. 203(b)(5)(B)(ii), (b)(5)(D)(vii), 8 U.S.C. 1153(b)(5)(B)(ii), (b)(5)(D)(vii). The INA allots 7.1 percent of the worldwide level of employment-based visas (generally around 9,940 immigrant visas) each fiscal year for aliens seeking to enter the United States under the EB-5 classification. 3 See INA secs. 201(d), 203(b)(5), 8 U.S.C. 1151(d), 1153(b)(5). The INA reserves annually 20 percent of these visas for qualified immigrants who invest in a rural area, 10 percent of these visas for qualified immigrants who invest in a high unemployment area, and 2 percent of these visas for qualified immigrants who invest in an infrastructure project. See INA sec. 203(b)(5)(B)(i), 8 U.S.C. 1153(b)(5)(B)(i).

Enacted in 1992, section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993, Public Law 102-395, 106 Stat. 1828, 1874, established a pilot program that authorized the provision of a limited number of EB-5 immigrant visas to aliens who invested in designated regional centers. The Regional Center Program was initially designed as a pilot program set to expire after 5 years. Congress continuously extended the program, often through short-term extensions, until the last extension expired on June 30, 2021. SeePublic Law 116-260, Division O, sec. 104, 134 Stat. 2148.

On March 15, 2022, President Biden signed the Consolidated Appropriations Act, 2022, Public Law 117-103, 136 Stat. 1070. Division BB of this Act contains the RIA, which repealed section 610 of Public Law 102-395 and established new provisions of section 203(b)(5) of the INA, 8 U.S.C. 1153(b)(5), to authorize and reform the Regional Center Program, including myriad integrity and process reforms. SeePublic Law 117-103, Division BB, sec. 103, 136 Stat. 1070, 1075 (2022). The Regional Center Program authorized by the RIA took effect May 14, 2022, and is discussed in greater detail in section IV.H.

Under the Regional Center Program, aliens base their EB-5 immigrant visa petitions on investments in new commercial enterprises associated with and located within designated regional centers. A regional center is an entity in the United States that has been designated by USCIS on the basis of a proposal for the promotion of economic growth, including prospective job creation and increased domestic capital investment. See INA sec. 203(b)(5)(E), 8 U.S.C. 1153(b)(5)(E). While all EB-5 petitioners have to create at least 10 full-time jobs for qualifying employees in the United States, petitioners participating in the Regional Center Program may meet statutory job creation requirements based on economic projections of either direct or indirect job creation, rather than only using jobs the new commercial enterprise creates directly. See INA sec. 203(b)(5)(E)(iv), 8 U.S.C. 1153(b)(5)(E)(iv).

Any entity seeking designation as a regional center must submit all information required by statute [4] using forms designated by USCIS Prior to the RIA, entities seeking designation as a regional center had to file Form I-924, Application for Regional Center Designation under the Immigrant Investor Program. See8 CFR 204.6(m)(3)-(4) (Nov. 20, 2019). On or after May 14, 2022 (the effective date of the provisions of the Regional Center Program in the INA established by the RIA), entities seeking designation as a regional center must file Form I-956, Application for Regional Center Designation. USCIS published Form I-956 on May 13, 2022, under an exemption from the Paperwork Reduction Act (PRA) provided by the RIA,[5] and subsequently published Form I-956 for public comment to comply with the PRA because the exemption only lasted one year. See87 FR 54233 (Sept. 2, 2022); 87 FR 79343 (Dec. 27, 2022). The form was subsequently updated on March 15, 2023,[6] under the exemption from the PRA provided by the RIA,[7] with a subsequent submission to OMB, Office of Information and Regulatory Affairs (OIRA), to finalize all edits to impacted forms with approval granted on the following forms on July 24, 2023: USCIS Forms I-526, I-526E, I-956, I-956F, I-956G, I-956H, I-956K. The current version of Form I-956 is available on the USCIS website at: https://www.uscis.gov/​i-956.

Once designated, regional centers may submit Form I-956F, Application for Approval of an Investment in a Commercial Enterprise. SeePublic Law 117-103, Division BB, sec. 103(b)(1), 136 Stat. 1070, 1078 (2022); INA sec. 203(b)(5)(F), 8 U.S.C. 1153(b)(5)(F). USCIS published Form I-956F on June 1, 2022, and subsequently published Form I-956F for public comment and made revisions based on those comments. See87 FR 54233 (Sept. 2, 2022); 87 FR 79343 (Dec. 27, 2022). The current version of Form I-956F is available on the USCIS website at: https://www.uscis.gov/​i-956f.

Designated regional centers must also provide USCIS with updated information to demonstrate continued eligibility for the designation by submitting Form I-956G, Regional Center Annual Statement. See INA sec. 203(b)(5)(G), 8 U.S.C. 1153(b)(5)(G). Prior to the RIA, designated regional centers submitted an annual statement to USCIS on Form I-924A, Annual Certification of Regional Center. USCIS published Form I-956G on June 1, 2022, and subsequently published Form I-956G for public comment. See87 FR 54233 (Sept. 2, 2022); 87 FR 79343 (Dec. 27, 2022). The current version of Form I-956G is available on the USCIS website at: https://www.uscis.gov/​i-956g.

The RIA also established in the INA the EB-5 Integrity Fund, for which each designated regional center must pay annually a required fee to retain its designation. See INA sec. 203(b)(5)(J), 8 U.S.C. 1153(b)(5)(J). USCIS will use the EB-5 Integrity Fund for integrity measures and in the administration of the Regional Center Program. See INA sec. 203(b)(5)(J)(iii), 8 U.S.C. ( printed page 40688) 1153(b)(5)(J)(iii). DHS published a Federal Register Notice explaining the payment process and requiring payment beginning on March 2, 2023, and before April 3, 2023. See88 FR 13141 (Mar. 2, 2023). For FY 2024 and each year thereafter, a designated regional center must pay the required fee between October 1st and October 31st of the same year. See 88 FR at 13141.

An alien seeking LPR status under the EB-5 immigrant visa classification must go through a multi-step process. The alien must first file an EB-5 immigrant visa petition with USCIS, either as a standalone investor by filing a Form I-526, Immigrant Petition by Standalone Investor, or as a regional center investor by filing a Form I-526E, Immigrant Petition by Regional Center Investor. The petition must be supported by evidence that the alien's lawfully obtained investment capital is invested ( i.e., contributed and placed at risk), or is actively in the process of being invested, in a new commercial enterprise in the United States that will create full-time positions for not fewer than 10 qualifying employees. See INA sec. 203(b)(5)(A); 8 U.S.C. 1153(b)(5)(A).

If USCIS approves the EB-5 immigrant visa petition, the petitioner must take additional steps to obtain LPR status. In general, once USCIS has approved the petition and an immigrant visa is available, the petitioner may apply for a visa through a Department of State (State) consular post abroad. Alternatively, if the petitioner is already in the United States and is otherwise eligible to adjust status, the petitioner may seek to adjust status to that of an LPR. See INA sec. 245, 8 U.S.C. 1255. A petitioner does so by filing a Form I-485, Application to Register Permanent Residence or Adjust Status, with USCIS, which the petitioner may file concurrently with [8] or any time after filing the EB-5 immigrant visa petition. The ability to obtain LPR status is limited because Congress has imposed limits on the availability of immigrant visas based on the category of visa and the immigrant's country of birth. See INA secs. 201(d), 202, 8 U.S.C. 1151, 1152.

To request an immigrant visa while abroad, an EB-5 petitioner must apply at a consular post of the Department of State (State). See INA secs. 203(e) and (g), 8 U.S.C. 1153(e) and (g); see also22 CFR part 42, subparts F and G. If a visa is available for the petition, the petitioner must generally wait to receive a notification from State's National Visa Center [9] to begin the visa application process with State. After receiving this notification, the petitioner must collect required information and file the immigrant visa application with State. As noted above, the wait for an immigrant visa depends on the demand for immigrant visas in the EB-5 category and the petitioner's country of birth.[10] Generally, State authorizes the issuance of a visa and schedules the petitioner for an immigrant visa interview for the month in which the priority date will be current. If State approves the petitioner's immigrant visa application, the consulate issues an immigrant visa and the petitioner, on the date of admission to the United States, obtains LPR status on a conditional basis. See INA secs. 211, 216A, and 221; 8 U.S.C. 1181, 1186b, and 1201.

Alternatively, an EB-5 petitioner who is in the United States in lawful nonimmigrant status, with limited exceptions, may seek LPR status by filing Form I-485, Application to Register Permanent Residence or Adjust Status, with USCIS. See INA sec. 245, 8 U.S.C. 1255; 8 CFR part 245. While the RIA amended the INA to allow for filing the application for adjustment with the petition for classification or while the petition for classification is pending ( SeePublic Law 117-103, Division. BB, sec. 102(d), 136 Stat. 1070, 1075 (2022); see INA sec. 245(n), 8 U.S.C. 1255(n)), an immigrant visa needs to be “immediately available” for such an application to be considered properly filed. See INA sec. 245(n), 8 U.S.C. 1255(n); 8 CFR 245.2(a)(2)(i)(B) and (C). Generally, an immigrant visa is considered “immediately available” if the petitioner's priority date for the EB-5 category is earlier than the relevant date indicated in the monthly Visa Bulletin. 11 See8 CFR 245.1(g)(1).

Whether obtained through the issuance of an immigrant visa or adjustment of status, LPR status based on an EB-5 petition is granted on a conditional basis. See INA sec. 216A(a)(1), 8 U.S.C. 1186b(a)(1). In general, within the 90-day period preceding the second anniversary of the date the alien investor obtains conditional permanent resident status, the alien investor must file Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status, with USCIS. See INA sec. 216A(d)(2), 8 U.S.C. 1186b(d)(2); 8 CFR 216.6(a)(1). Failure to timely file Form I-829 results in automatic termination of the alien investor's conditional permanent resident status and the initiation of removal proceedings. See INA sec. 216A(c), 8 U.S.C. 1186b(c); 8 CFR 216.6(a)(5). In support of the petition to remove conditions, the investor must establish that the investor meets the requirements to remove conditions. If approved, the conditions on the investor's permanent residence are generally removed as of the second anniversary of the date the investor obtained conditional permanent resident status. See INA sec. 216A(c)(3), 8 U.S.C. 1186b(c)(3); 8 CFR 216.6(d)(1). For investors who file a Form I-829 petition based on an underlying Form I-526 or Form I-526E petition filed on or after enactment of the RIA, DHS, in its ( printed page 40689) discretion, may provide a 1-year extension of the investor's conditional status if the investor is actively in the process of creating requisite employment and will do so before the third anniversary of the date the investor obtained conditional permanent resident status. See INA sec. 216A(c)(3)(B)(ii), 8 U.S.C. 1186b(c)(3)(B)(ii).

DHS provided a summary of the proposed changes in Section II.C. In this section, DHS describes the changes in greater detail. The discussion proceeds as follows:

A. Regulatory Background, Proposed Structure, and Implementation of this Rule

B. Definitions

C. National Security and Fraud

D. Alien Investors

E. Targeted Employment Areas (TEAs)

F. Infrastructure Projects

G. Troubled Businesses

H. Regional Center Program

I. Removal of Conditions

J. Withdrawal Requests and Petition Revocations

K. Severability

In 2019, DHS published the EB-5 Immigrant Investor Program Modernization Final Rule (EB-5 Modernization Rule) which revised 8 CFR 204.6 to reflect previous statutory changes [12] and modernize the EB-5 program, as well as codified existing policies and change certain aspects in need of reform. See84 FR 35750 (July 24, 2019). The final rule's effective date was scheduled to be November 21, 2019. See id. at 35750. Although the Secretary of Homeland Security attempted to ratify the EB-5 Modernization Rule on March 31, 2021, on June 22, 2021, the U.S. District Court for the Northern District of California vacated the rule on procedural grounds notwithstanding such ratification, reverting the changes made to 8 CFR 204.6 by the EB-5 Modernization Rule to what existed prior to its promulgation.[13] However, on March 15, 2022 (and before DHS could issue a rule implementing the vacatur of the EB-5 Modernization Rule by removing or amending the regulatory text currently in the Code of Federal Regulations (CFR)), the President signed the RIA. SeePublic Law 117-103, Division BB, 136 Stat. 1070 (2022).[14]

To effectively and clearly revise the regulations based on the new and amended provisions of the INA, DHS proposes to remove and reserve 8 CFR 204.6 and create a new Subpart D to part 204 of Title 8 of the CFR. DHS thus proposes that 8 CFR 204.6, as it existed on November 20, 2019, (before the effective date of the EB-5 Modernization Final Rule) would generally apply to adjudications for petitions filed before March 15, 2022. See proposed 8 CFR 204.400. The new subpart would provide a clear distinction between the requirements for an EB-5 immigrant visa before and after enactment of the RIA, and also provide DHS the greatest opportunity to establish clear regulations for the EB-5 program, including the Regional Center Program, so all stakeholders can determine the eligibility and filing requirements for all aspects of the program, as specified by the new and amended provisions of the INA.

Therefore, DHS proposes that this rule be implemented prospectively to petitions and applications filed on or after its effective date, subject to the following exceptions:

1. Where otherwise directed by the INA or RIA;

2. Where this proposed rule would codify a post-RIA practice or policy that DHS has been implementing since the RIA went into effect, DHS will continue to apply such policies as codified;

3. With respect to priority date retention for alien investors who filed prior to March 15, 2022; [15]

4. In instances where the petitioner poses an ongoing or continued threat to the public safety or national security of the United States or otherwise continues to engage in fraud, deceit, intentional material misrepresentation, or criminal misuse. See proposed 8 CFR 204.400(a);

5. All regional centers, including those designated prior to enactment of the RIA, must establish eligibility to participate in the reformed EB-5 Regional Center Program and are subject to all requirements applicable to their continuing participation. See proposed 8 CFR 204.400(b); and

6. With respect to EB-5 immigrant visa petition amendments filed because of the termination of the alien investor's regional center or the debarment of the alien investor's new commercial enterprise or job-creating entity. See proposed 8 CFR 204.410.

For ease of reference and adjudication, DHS proposes to incorporate applicable holdings from the four EB-5 precedent decision cases ( Matter of Ho, Matter of Hsiung, Matter of Izummi, and Matter of Soffici ) [16] into various provisions in this proposed rule, such as proposed 8 CFR 204.407(c)(2), incorporating legal ownership of capital provisions of Matter of Ho, 22 I&N Dec. 206, 206 (Assoc. Comm. 1998) (holding that the petitioner must establish legal ownership of the investment capital and that bank statements and other financial documents do not do so if the petitioner shows someone else as the legal owner), proposed 8 CFR 204.408(b)(5), incorporating promissory note provisions of Matter of Hsiung, 22 I&N Dec. 201, 202 (Assoc. Comm. 1998) (promissory notes can constitute capital if the note is secured by assets owned by the petitioner, the security interests are perfected, and the assets are fully amenable to seizure), and Matter of Izummi, 22 I&N Dec. 169, 191 (Assoc. Comm. 1998) (promissory note must be valued at fair market value). DHS also proposes to codify those activities in Matter of Ho that do not rise to the level of concrete business activity and are, therefore, insufficient to show that the investment is at risk, such as a deposit in a business account over which the investor has control, formulating an idea for a future business activity, forming a business entity, and executing a lease. [17] See proposed 8 CFR 204.408(b)(6). A simple contribution of capital in exchange for a debt agreement or purchase of an asset by a petitioner is insufficient to demonstrate concrete business activity. 18 See proposed 8 CFR 204.408(b)(6). As in Matter of Ho, DHS anticipates that the new commercial enterprise or job-creating entity will have undertaken some concrete activity that evidences meaningful implementation of the business plan in order to show that the capital investment is or will be at risk. See proposed 8 CFR 204.408(b)(6). In the event that a particular holding is not incorporated into a new regulatory provision and is not otherwise superseded by statute, USCIS would continue to apply applicable holdings from the four EB-5 precedent case ( printed page 40690) decisions to relevant eligibility determinations.

Lastly, DHS does not believe that other rulemakings it is pursuing would significantly impact this rule. On October 23, 2025, DHS published a notice of proposed rulemaking titled “U.S. Citizenship and Immigration Services Employment-Based Immigrant Visa, Fifth Preference (EB-5) Fee Rule.” 90 FR 48516. That rule focuses primarily on fees and financial penalties, with other procedural revisions that would generally not impact this rule. Certain technical changes made to existing 8 CFR 216.6(a)(1) by that rule are incorporated into the more comprehensive changes made to 8 CFR 216.6 by this rule and DHS does not believe it would have a significant impact on this rule. See proposed 8 CFR 216.6(b). Additionally, on November 3, 2025, DHS published the notice of proposed rulemaking titled Collection and Use of Biometrics by U.S. Citizenship and Immigration Services (Biometrics NPRM). See90 FR 49062. In the Biometrics NPRM, DHS proposed to generally amend its regulations governing biometrics use and collections related to all immigration benefit requests and for other immigration-related purposes. Specific to the EB-5 program, DHS explains that it would continue its existing practice of collecting biometrics and performing background checks on U.S. citizens, lawful permanent residents, and any other persons involved with an EB-5 regional center, new commercial enterprise or job-creating entity. See INA sec. 203(b)(5)(H)(iii), 8 U.S.C. 1152(b)(5)(H)(iii). However, DHS is proposing to remove the EB-5 related regulations 8 CFR 216.4(b)(1), “Authority to waive interview,” and 8 CFR 216.4(b)(2), “Location of interview” and explains that these two regulatory provisions serve no purpose and are unnecessary, respectively. See90 FR 49062, 49092. As these proposed EB-5 related regulatory amendments are being removed as serving no purpose and unnecessary, DHS does not believe the changes being proposed in the Biometrics NPRM would have a significant impact on this rule. DHS welcomes public comment on any potential joint impacts.

Under this proposed rule, DHS would define terms used throughout this new subpart in section 204.401. This rule proposes to carry over and update certain definitions from the regulations as they existed prior to the EB-5 Modernization Rule, denoted by reference to 8 CFR 204.6 (Nov. 20, 2019), as well as proposing several new definitions to provide additional clarity based on new or revised statutory definitions in the INA. This section discusses each term, generally in alphabetical order, except where terms are better discussed together, such as direct and indirect jobs.

The INA defines “capital” generally as cash and all real, personal, or mixed tangible assets owned and controlled by the investor or held in trust for the benefit of the investor and to which the investor has unrestricted access. See INA sec. 203(b)(5)(D)(ii)(I), 8 U.S.C. 1153(b)(5)(D)(ii)(I). DHS proposes to clarify that “mixed tangible assets” means a “mix of tangible assets (which may include equipment, inventory, or other tangible property).” See proposed 8 CFR 204.401, Capital. DHS believes this clarification is necessary to specify that investors would only be able to meet the requirements for an EB-5 immigrant visa by investing tangible assets whose value can be clearly determined, rather than intangible assets, such as patents and trademarks, whose value would be subjective, would vary, and would not clearly establish that an investor has invested the required amount of capital in a new commercial enterprise.

DHS further proposes to clarify that capital held in trust must be held in a revocable living trust of which the investor is the settlor and beneficiary and to which the investor has unrestricted access. See proposed 8 CFR 204.401, Capital. DHS believes this type of trust most clearly meets the requirements of INA sec. 203(b)(5)(D)(ii)(I), 8 U.S.C. 1153(b)(5)(D)(ii)(I), particularly the requirement that the investor has unrestricted access to the capital, while other types of trusts would not, such as an irrevocable trust where the investor would not have unrestricted access to the capital in the trust. Finally, DHS proposes to incorporate applicable holdings from Matter of Soffici that capital does not include loans secured by the assets of the new commercial enterprise or a personal guarantee of the business debt of the new commercial enterprise. See proposed 8 CFR 204.401, Capital; Matter of Soffici, 22 I&N Dec. 160-163.

Consistent with the definition at 8 CFR 204.6(e) (Nov. 20, 2019), the INA's definition of “capital” requires that capital be valued at fair market value in U.S. dollars when it is invested and further clarifies that the valuation must be made in accordance with Generally Accepted Accounting Principles or other standard accounting practice adopted by the Securities and Exchange Commission. See INA sec. 203(b)(5)(D)(ii)(II), 8 U.S.C. 1153(b)(5)(D)(ii)(II).[19] DHS proposes to capture these requirements in the regulatory definition of “capital.” See proposed 8 CFR 204.401, Capital. Most investors meet their capital requirement using cash, so this provision would likely apply in limited circumstances where the investor invests equipment or inventory, for example. Though rare, DHS believes this additional language would ensure that the investor fairly values any non-cash investment and is meeting the required investment amount established by section 203(b)(5)(C) of the INA, 8 U.S.C. 1153(b)(5)(C). Where an investor uses any non-cash capital to invest in a new commercial enterprise, this proposed rule would require the investor to establish the fair market value of the capital at the time of filing the EB-5 immigrant visa petition if the investor is in the process of investing or, at the time of investment, if the investor has already invested the capital into the new commercial enterprise. See proposed 8 CFR 204.407(b)(4).

The definition of “capital” in 8 CFR 204.6(e) (Nov. 20, 2019) excludes “[a]ssets acquired, directly or indirectly, by unlawful means (such as criminal activities).” See8 CFR 204.6(e) (Nov. 20, 2019), Capital. The INA likewise excludes these types of assets from meeting the definition of “capital,” along with several other provisions that would preclude certain assets from qualifying as capital. See INA sec. 203(b)(5)(D)(ii)(III), 8 U.S.C. 1153(b)(5)(D)(ii)(III). DHS recognizes that these items will continue to be excluded from being considered “capital” under the INA but believes a more streamlined regulatory definition would better aid comprehensibility as these exclusions are more appropriately reviewed as an eligibility requirement for approval of an EB-5 immigrant visa petition, see proposed 8 CFR 204.407(c) and (d), and consequently, discusses these additional requirements in greater detail in section IV.D.5 of this preamble. ( printed page 40691)

The INA defines a “certifier” as a person in a position with substantive authority for the management or operations of a regional center, new commercial enterprise, affiliated job-creating entity, or issuer of securities, such as a principal executive officer or principal financial officer, with knowledge of such entities' policies and procedures related to compliance with the requirements of [the EB-5 program]. INA sec. 203(b)(5)(D)(iii), 8 U.S.C. 1153(b)(5)(D)(iii). This statutory definition is included in the definitions of this proposed rule since the certifier role is relevant to the filing of an application for approval of an investment in a commercial enterprise (Form I-956F), and the regional center annual statement (Form I-956G). See INA secs. 203(b)(5)(F)(i), (b)(5)(G)(i), (b)(5)(I)(ii), 8 U.S.C. 1153(b)(F)(i), (b)(5)(G)(i), (b)(5)(I)(ii), see proposed 8 CFR 204.401, Certifier. While the definition of a “certifier” includes similar terminology as the definition of a “person involved with a regional center, new commercial enterprise, or job-creating entity,” (INA sec. 203(b)(5)(H)(v), 8 U.S.C. 1153(b)(5)(H)(v)), DHS expects that a “certifier” would always be a “person involved,” but a “person involved” would not necessarily meet the definition of a “certifier,” unless his or her position within the related entity provides the person with the necessary accountability and knowledge required to meet the certifier definition.[20]

DHS further proposes to codify its post-RIA practice and extend the definition of “certifier” to entities registered as a direct or third-party promoter. See proposed 8 CFR 204.401, Certifier. First, the RIA requires promoters to provide certification that they are eligible to participate in the EB-5 program under section 203(b)(5)(H)(i) of the INA, 8 U.S.C. 1153(b)(5)(H). See INA sec. 203(b)(5)(K)(i)(II), 8 U.S.C. 1153(b)(5)(K)(i)(II). In addition, DHS believes it is important to extend this definition to promoters to ensure that whoever is certifying on behalf of an entity seeking registration as, or registered as, a promoter has the same level of knowledge to provide that certification as is required of a regional center, new commercial enterprise, job-creating entity, or issuer of securities in other filings with USCIS. The proposed rule would further require that promoters certify they are familiar with and understand the rules and standards for promoters. See proposed 8 CFR 204.428(b)(3).

A designated regional center must submit a comprehensive business plan with its application for approval of an investment in a commercial enterprise (Form I-956F), which is incorporated into associated post-RIA regional center investor petitions. See INA sec. 203(b)(5)(E)(ii)(III), (b)(5)(F)(i)(I), 8 U.S.C. 1153(b)(5)(E)(ii)(III), (b)(5)(F)(i)(I). For all pre-RIA petitioners as well as post-RIA standalone investor petitioners seeking to rely on prospective job creation, current regulations likewise require an investor to submit a comprehensive business plan to show that, due to the nature and projected size of the new commercial enterprise, at least 10 qualifying employees would be required. 8 CFR 204.6(j)(4)(i)(B) (Nov. 20, 2019). A comprehensive business plan should be credible and contain a description of the business, its products and services, and its objectives, as well as sales, cost, and income projections. See Matter of Ho, 22 I&N Dec. 206, 213 (Assoc. Comm. 1998).[21] DHS proposes to capture each of these requirements by defining a “comprehensive business plan” as a credible business plan that describes the nature, timeline, and projected size of the activities being undertaken by the new commercial enterprise or job-creating entity(ies), as applicable. See proposed 8 CFR 204.401, Comprehensive business plan. Furthermore, DHS also proposes that the business plan must describe the use of capital from alien investors to create full-time employment for not fewer than 10 qualifying employees per alien investor. See id. DHS proposes to further require that a comprehensive business plan identify detailed capital requirements, including the sources and uses of funds. See id. DHS believes this additional requirement is essential to establishing that the business plan is credible and that the sources of funds, including those that do not derive from EB-5 investors, provided to the new commercial enterprise will be lawful.

In addition, to meet the definition of a “comprehensive business plan,” the plan would have to include a marketing plan, a market and competitive analysis, a list of the required and obtained permits and licenses, the timetable for hiring, the construction schedule of the project, and a detailed overview of the organizational structure, including the relevant experience and expertise of the owners and managers of the new commercial enterprise and job-creating entity(ies), as applicable. See id. Based on extensive experience reviewing business plans related to projects financed with EB-5 capital, DHS believes this information would allow USCIS to determine the viability of the investment and ensure compliance with the INA. DHS recognizes that each business is different and thus, that business plans may vary. While the proposed definition outlines certain items that must be included in the plan to meet the definition of a comprehensive business plan (such as a description of the business and its objective), other elements are only required if relevant for that particular business (such as a construction schedule). As such, these items are qualified with “as applicable” in the regulatory text because, in some instances, they may not be necessary.

DHS proposes to separately codify the definitions of “criminal misuse,” “deceit,” “fraud,” and “intentional material misrepresentation.” See proposed 8 CFR 204.401, Criminal misuse, Deceit,Fraud, and Intentional material misrepresentation. The statutory language of section 203(b)(5)(O) of the INA, 8 U.S.C. 1153(b)(5)(O), differs from fraud and material misrepresentation findings otherwise made by USCIS during admissibility determinations under section 212(a)(6)(C) of the INA, 8 U.S.C. 1182(a)(6)(C). Existing agency guidance regarding fraud and misrepresentation in the inadmissibility context is specific to fraud or misrepresentation committed by an individual or entity against the U.S. government.[22]

However, the authority to take adverse actions based on determinations under section 203(b)(5)(O) of the INA, 8 U.S.C. 1153(b)(5)(O), with respect to whether an EB-5 immigrant visa petition, application, or benefit is predicated on or involves fraud or misrepresentation, is broader and not limited solely to fraud or ( printed page 40692) misrepresentations made by a petitioner or applicant to the U.S. government. See INA sec. 203(b)(5)(O), 8 U.S.C. 1153(b)(5)(O); cf. INA sec. 212(a)(6)(C)(i), 8 U.S.C. 1182(a)(6)(C)(i) (constructed more narrowly to apply only to aliens who have engaged in the prohibited conduct rather than the construction of INA 203(b)(5)(O), which applies more broadly to any application, petition, or benefit that was predicated on or involved the prohibited conduct).

Existing USCIS guidance on inadmissibility concerning willfulness, intent, and materiality remains relevant to determining whether an EB-5 immigrant visa petition, application, or benefit was predicated on or involves fraud or misrepresentation, and this proposed rule expands on the existing guidance to cover the additional situations addressed by section 203(b)(5)(O) of the INA, 8 U.S.C. 1153(b)(5)(O).

USCIS proposes to codify its interpretation of the INA statutory terms, generally, in accordance with their plain language meanings and in each case as related to the petition, application, or benefit.

For fraud findings made under section 203(b)(5)(O) of the INA, 8 U.S.C. 1153(b)(5)(O), USCIS will consider a petition, application, or benefit to have been predicated on or involve “fraud” based on a finding that an individual or entity related to the petition, application, or benefit knowingly made a false representation of or knowingly concealed a material fact with intent to induce action or to deceive.[23]

For findings of intentional material misrepresentation under section 203(b)(5)(O) of the INA, 8 U.S.C. 1153(b)(5)(O), USCIS generally considers a petition, application, or benefit to have been predicated on or involve intentional “material misrepresentation” based on a finding that an individual or entity related to the petition, application, or benefit made a false or misleading assertion about a material fact with the intent to deceive.[24]

USCIS generally considers a petition, application, or benefit to have been predicated on or involve “deceit” based on a finding that an individual or entity related to the petition, application, or benefit intentionally led another person to believe something that is not true in connection with the petition, application, or benefit.[25]

USCIS generally considers a petition, application, or benefit to have been predicated on or involve “criminal misuse” based on a finding that an individual or entity related to the petition, application, or benefit improperly used the EB-5 program or capital obtained through the EB-5 program in connection with or in furtherance of a crime.

In the context of the EB-5 program, criminal misuse is most likely to arise in the context of financial misuse of EB-5 capital in connection with or in furtherance of financial crime.[26]

Types of fraud, deceit, intentional material misrepresentation, or criminal misuse that may arise with individual investor petitions; those associated with regional centers, new commercial enterprises, and job-creating entities; attorneys; migration agents; preparers; and promoters may include but are not limited to the following actions:

The INA provides authority to debar, suspend, and terminate persons participating in the EB-5 program, including regional centers, new commercial enterprises, and job-creating entities for particular violations. See INA sec. 203(b)(5)(G)(iii)(II), 8 U.S.C. 1153(b)(5)(G)(iii)(II). These authorities extend to investors, promoters, and other persons involved in the Regional Center Program. See INA sec. 203(b)(5)(K)(ii), (b)(5)(N), (b)(5)(O), 8 U.S.C. 1153(b)(5)(K)(ii), (b)(5)(N), (b)(5)(O). While DHS discusses the specifics of these authorities in section IV.H.8 of this preamble, DHS proposes to separately codify the definitions of these key terms in 8 CFR 204.401. See proposed 8 CFR 204.401, Debar, Suspend, and Terminate.

First, the INA now provides for debarment in the EB-5 program. See, e.g., INA sec. 203(b)(5)(N)(iii), (b)(5)(O)(ii), 8 U.S.C. 1153(b)(5)(N)(iii), (b)(5)(O)(ii). DHS proposes that a “debarment” would preclude a person's participation in the EB-5 program without the ability for reapplication, either permanently or during a specified timeframe, as provided under proposed 8 CFR 204.431(d)(5). See proposed 8 CFR 204.401, Debar. While the INA generally contemplates permanent debarment, other sanctioning provisions within the INA provide for discretion in imposing sanctions short of permanent debarment, which could include temporary debarments based on considerations such as time-limited orders from relevant regulatory authorities. See, e.g., INA sec. 203(b)(5)(G)(iii)(II), 8 U.S.C. 1153(b)(5)(G)(iii)(II) (authorizing DHS to establish graduated sanctions based on the severity of violations). Since a debarment could be temporary or permanent, this definition would also clarify that a person temporarily debarred would be able to seek to again participate in the EB-5 program after the period of debarment ends, provided the person submits a new application to USCIS to determine his or her eligibility to again participate in the EB-5 program. See id.

In addition to debarment, the INA provides suspension authority. See, e.g., INA sec. 203(b)(5)(H)(iv)(I), 8 U.S.C. 1153(b)(5)(H)(iv)(I). While debarment could be temporary or permanent, DHS proposes to define “suspension” as a temporary limitation of a person's ( printed page 40693) participation in the EB-5 program as provided under proposed 8 CFR 204.431(d)(3). See proposed 8 CFR 204.401, Suspend. Suspensions typically last for the period specified in the notice or until USCIS notifies the suspended individuals or entities that they have cured the relevant violation. While suspended, the person suspended would be precluded from certain activities. Upon the end of the suspension period, if applicable, the person may resume participation in the EB-5 program without further application. See proposed 8 CFR 204.431(d)(3).

The INA also authorizes, and in some cases requires, termination of an entity's designation as a regional center in the EB-5 program. See, e.g., INA sec. 203(b)(5)(E)(vii)(III), 8 U.S.C. 1153(b)(5)(E)(vii)(III) (when termination is required); see also, e.g., INA sec. 203(b)(5)(I)(iv), 8 U.S.C. 1153(b)(5)(I)(iv) (when termination is an option). As it relates to participation in the EB-5 program, DHS proposes that termination be used for regional centers, as termination authority applies differently depending on which entity's participation is being terminated. Since DHS only designates regional centers (and not NCEs or JCEs), DHS interprets its termination authority for regional centers as applying only to the designation of a regional center in line with historic practice and usage of this term. DHS accordingly proposes to define “termination” as the end of a regional center's designation to participate in the Regional Center Program. See proposed 8 CFR 204.401, Terminate. This definition would also clarify that a terminated regional center would no longer be able to solicit capital from an investor seeking classification as an alien investor in the Regional Center Program. Id.

In addition to the authority provided by the INA to terminate an entity's designation as a regional center in the EB-5 program, the INA also provides authority to terminate the participation of NCEs or JCEs in the EB-5 program. See INA sec. 203(b)(5)(H)(iv), 8 U.S.C. 1153(b)(5)(H)(iv). See also INA secs. (b)(5)(N)(iii), (b)(5)(O)(ii), 8 U.S.C. 1153(b)(5)(N)(iii), (b)(5)(O)(ii). As an initial matter, DHS does not designate NCEs or JCEs for participation in the program the same as is contemplated for regional centers under the INA or in line with historic practices. Moreover, these provisions of the INA do not distinguish between the more specific usage of termination as it applies to a regional center's designation versus other types of sanctions that could apply to NCEs or JCEs that would similarly end their participation in the EB-5 program, such as debarment. Cf. INA sec. 203(b)(5)(G)(iii)(III), 8 U.S.C. 1153(b)(5)(G)(iii)(III) (authorizing debarment to end the participation of non-regional center persons in the EB-5 program while limiting usage of the term termination specifically just to a regional center's designation). DHS also notes that the investor protections under section 203(b)(5)(M) of the INA, 8 U.S.C. 1153(b)(5)(M), trigger only upon either the termination of a regional center or debarment of a NCE or JCE. See INA sec. 203(b)(5)(M)(ii)(I), 8 U.S.C. 1153(b)(5)(M)(ii)(I) (“in the case of the termination of a regional center”), and INA sec. 203(b)(5)(M)(ii)(II), 8 U.S.C. 1153(b)(5)(M)(ii)(II) (“in the case of the debarment of a new commercial enterprise or job-creating entity”). Consequently, termination of a NCE or JCE that would be distinct from debarment would not trigger these investor protections under section 203(b)(5)(M) of the INA, 8 U.S.C. 1153(b)(5)(M), which DHS believes would be contrary to the remaining provisions of section 203(b)(5)(M) of the INA, which provide protections to “good faith investors.” DHS therefore interprets its authority to terminate the participation of NCEs or JCEs in the program the same as debarment, which is reflected in the proposed definitions and accompanying rules.

An alien investor must create employment for at least 10 U.S. citizens, U.S. nationals, lawful permanent residents of the United States, or other immigrants lawfully authorized to be employed in the United States (not including the investor or his or her spouse or children). See INA sec. 203(b)(5)(A), 8 U.S.C. 1153(b)(5)(A). Before the creation of the Regional Center Program, this employment creation requirement meant that the new commercial enterprise would need to create full-time employment (or demonstrate job retention in a troubled business) for 10 qualifying employees per alien investor to establish eligibility for an EB-5 immigrant visa. See8 CFR 204.6(j)(4) (Nov. 20, 2019). Upon its creation, the Regional Center Program permitted (and the INA continues to permit) regional center investors to establish job creation using reasonable methodologies for determining the number of jobs created, including such jobs estimated to have been created indirectly through revenues generated from increased exports resulting from the program. See Public Law 102-395, sec. 610(c), 106 Stat. 1828, 1874 (Oct. 6, 1992); see also, INA sec. 203(b)(5)(E)(iv), 8 U.S.C. 1153(b)(5)(E)(iv). The new provisions of the INA, however, limit the percentage of indirect jobs that may be used by regional center investors to satisfy the job creation requirements, INA sec. 203(b)(5)(E)(iv), 8 U.S.C. 1153(b)(5)(E)(iv), and, under certain circumstances, prorates the number of direct jobs estimated to be created in connection with construction activity lasting less than 2 years. See INA sec. 203(b)(5)(E)(v)(II)(cc), 8 U.S.C. 1153(b)(5)(E)(v)(II)(cc). In addition, the new provisions of the INA expand direct jobs for regional center investors to include not only employees of the new commercial enterprise but also employees of the job-creating entity. See INA sec. 203(b)(5)(E)(iv)(I), 8 U.S.C. 1153(b)(5)(E)(iv)(I). As the statute does not define “direct” or “indirect jobs,” and in light of these new statutory provisions, DHS proposes to define “direct jobs” and “indirect jobs” in this rule for purposes of establishing requisite job creation for regional center investors. See proposed 8 CFR 204.401, Direct jobs and Indirect jobs.

As noted previously, DHS has historically interpreted that “direct jobs” are those jobs where there exists an employer-employee relationship between the new commercial enterprise and the persons it employs, and “indirect jobs” are those held outside of the new commercial enterprise, including employees of a job-creating entity. See USCIS Policy Manual, Volume 6, Part G, Chapter 2.D(4), “Measuring job creation.” Under commonly used economic methodologies to estimate job creation, however, employees of a job-creating entity or those involved in the hands-on production of goods or services related to the job-creating project being undertaken by a job-creating entity would be considered “direct jobs” for economic purposes despite being considered “indirect jobs” for purposes of establishing eligibility under pre-RIA requirements. For regional center investors, the INA has expanded what may be considered a “direct job” to explicitly include employees of the job-creating entity as well as employees of the new commercial enterprise. See INA sec. 203(b)(5)(E)(iv)(I), 8 U.S.C. 1153(b)(5)(E)(iv)(I). Though not specified in the statute, DHS proposes to align the legal concept of “direct jobs” with how “direct jobs” are treated for economic purposes through commonly used economic methodologies used to estimate job creation because, as explained previously, employees of job-creating entities would be considered indirect jobs for purposes of establishing ( printed page 40694) eligibility under pre-RIA requirements even though they would be viewed as direct jobs under commonly used economic methodologies to estimate job creation. Therefore, for a regional center investor, in addition to an employee of the new commercial enterprise or job-creating entity, “direct jobs” would also include jobs estimated to be created through an economically and statistically valid methodology as being involved in the hands-on production of goods and services or in the construction of facilities that have a necessary role in the relevant capital investment project. See proposed 8 CFR 204.401, Direct jobs.

Importantly, for estimated direct jobs, they should be estimated using economically and statistically valid and transparent methodologies to comply with the INA and ensure USCIS is able to validate that the investment has created sufficient employment to satisfy the requirements of section 203(b)(5)(A) of the INA, 8 U.S.C. 1153(b)(5)(A). See INA sec. 203(b)(5)(E)(v)(I), 8 U.S.C. 1153(b)(5)(E)(v)(I).

DHS proposes that “indirect jobs,” consistent with DHS's existing interpretation, mean jobs estimated to be employed by those supplying goods and services to the source of production, including the construction of facilities that have a necessary role in the relevant capital investment project, as well as those jobs estimated to be induced through additional personal spending by both direct and indirect employees whose jobs were created by the relevant capital investment. See proposed 8 CFR 204.401, Indirect jobs.

DHS has historically interpreted that indirect jobs can include, but are not limited to, those held by employees of the job-creating entity (when the job-creating entity is not the new commercial enterprise) as well as employees of producers of materials, equipment, or services used by the new commercial enterprise or job-creating entity. USCIS Policy Manual, Volume 6, Part G, Chapter 2.D(4), “Measuring job creation.” Because employees of the job-creating entity or those involved in the hands-on production of goods or services related to the job-creating project being undertaken by a job-creating entity are now considered direct jobs under the proposed definition of “direct jobs” (as explained above), the proposed definition of “indirect jobs” is being aligned to include just those jobs that are most typically considered indirect jobs for economic purposes in connection with commonly used economic models for estimating job creation. Consistent with DHS's historic interpretation, the definition also continues to include induced jobs, a subset of indirect jobs, which are those created when the new direct and indirect employees spend their earnings on consumer goods and services. Id.

As the statute does not define “EB-5 immigrant visa petition,” DHS proposes to use “EB-5 immigrant visa petition” to refer to a petition submitted by a regional center investor or standalone investor seeking classification as an alien investor under section 203(b)(5) of the INA. See proposed 8 CFR 204.401, EB-5 immigrant visa petition. USCIS will consider Form I-526, Petition by Standalone Investor, and Form I-526E, Petition by Regional Center Investor, as an EB-5 immigrant visa petition for purposes of this regulation. However, in line with other DHS regulations and to maintain operational flexibility, DHS avoids the use of form numbers in the regulatory text, where possible, and instead refers in the text to the form designated by USCIS.

As the statute does not define “full-time employment,” DHS proposes to continue to define “full-time employment” to mean a position at the new commercial enterprise that requires a minimum of 35 working hours per week. See proposed 8 CFR 204.401, Full-time employment; see current 8 CFR 204.6(e) (Nov. 20, 2019), Full-time employment. This would include direct and indirect jobs, including those estimated to have been created by a regional center investor, provided the economic model estimates “full-time equivalent” employment. The number of full-time equivalent employees in each industry is the product of the total number of employees and the ratio of average weekly hours per employee on full-time schedules.[27] While DHS considered requiring regional centers and petitioners to demonstrate that the estimated jobs are likely to be at least 35 hours per week, this approach would have required the submission of additional evidence that is separate from the model documentation. Since the INA requires that economic models be statistically valid and transparent,[28] DHS does not believe this additional documentation would be necessary for USCIS to validate the sufficiency of any job creation estimate provided by a statistically valid and transparent economic methodology.

In its current regulations, DHS allows “full-time employment” to include job sharing arrangements where two or more qualifying employees share a full-time position provided the hourly requirement was met, while precluding the combination of part-time positions to meet the hourly requirement. 8 CFR 204.6(e) (Nov. 20, 2019), Full-time employment. DHS proposes to eliminate the job-sharing arrangements from the definition of “full-time employment.” See proposed 8 CFR 204.401, Full-Time Employment.

Few petitions have used such job-sharing arrangements to establish eligibility and those that do frequently are determined, instead of using multiple employees to fill one position, to be combining part-time positions, which was expressly prohibited by the regulations. See8 CFR 204.6(e) (Nov. 20, 2019), Full-time employment. Additionally, DHS believes that permitting job-sharing does not further the program's objective of creating full-time employment and is consequently proposing to no longer make such an allowance in this rule.

A “high employment area” is part of a metropolitan statistical area (MSA) as designated by the Director of the Office of Management and Budget (OMB) [29] that is not in a TEA, and is experiencing unemployment significantly below the national average rate. INA sec. 203(b)(5)(C)(iv), 8 U.S.C. 1153(b)(5)(C)(iv). Though the statute has included these areas since the first iteration of the EB-5 program in 1990, legacy Immigration and Naturalization Service (INS) did not define or consider a “high employment area” as a separate area of investment.

DHS proposes to define a “high employment area” as a census tract in a metropolitan statistical area where the new commercial enterprise is principally doing business, or contiguous census tracts where the new commercial enterprise is principally doing business in two or more ( printed page 40695) contiguous census tracts, and where the national average rate of unemployment is at least 150 percent of the unemployment being experienced in that area where the investment is being made. See proposed 8 CFR 204.401, High employment area. Using this calculation to determine whether an area is experiencing high employment would mirror the differential Congress established for high unemployment areas in relation to the national average unemployment rate ( i.e., 150 percent). See INA sec. 203(b)(5)(B)(ii)(I)(bb), 8 U.S.C. 1153(b)(5)(B)(ii)(I)(bb). DHS believes this definition aligns with the RIA's overall statutory scheme and ensures that the program's objectives of investment being made in areas of true need are effectuated. DHS considered allowing a calculation similar to that used for determining high unemployment areas (to include any directly adjacent census tracts in addition to the census tract(s) where the new commercial enterprise is principally doing business). See INA sec. 203(b)(5)(B)(ii), 8 U.S.C. 1153(b)(5)(B)(ii). Instead, DHS proposes to limit the definition of a “high employment area” to the census tract(s) where the new commercial enterprise is principally doing business. DHS believes that allowing a calculation similar to high unemployment areas with the inclusion of any directly adjacent tracts would only serve to lower the investment amount required for an area already experiencing high employment, which is contrary to the intent of the EB-5 program to incentivize investments into areas of true need.

For any new commercial enterprise principally doing business in an MSA that is not separately submitting evidence to establish that the new commercial enterprise is principally doing business in a high unemployment area, the regional center or standalone investor would have to submit a list of the census tracts where the new commercial enterprise is principally doing business and the employment data used to calculate whether the area is experiencing high employment. See proposed 8 CFR 204.408(g)(3) and 204.421(c)(4).

The INA defines an “infrastructure project” as a capital investment project in a designated regional center's filed or approved application for approval of an investment in a commercial enterprise (Form I-956F), which is administered by a governmental entity (such as a Federal, State, or local agency or authority) that also serves as the job-creating entity contracting with a regional center or new commercial enterprise to receive capital investments under the Regional Center Program as financing for maintaining, improving, or constructing a public works project. See INA sec. 203(b)(5)(D)(iv), 8 U.S.C. 1153(b)(5)(D)(iv). DHS proposes to incorporate this definition into the regulations, and, because the statute only offers examples of qualifying governmental entities, to include a tribal agency or authority as a potential job-creating entity whose project may qualify as an infrastructure project. See proposed 8 CFR 204.401, Infrastructure Project. DHS proposes to extend the definition of qualifying “infrastructure projects” to tribal authorities to ensure that tribal entities can use the EB-5 program to fund qualifying infrastructure projects. DHS discusses the requirements for an investment in an infrastructure project in section IV.F. of this preamble.

Section 203(b)(5) of the INA allots a number of immigrant visas to qualified immigrants seeking to enter the United States for the purpose of engaging in a new commercial enterprise (including a limited partnership) in which the alien investor has invested or, is actively in the process of investing, the required amount of capital. INA sec. 203(b)(5)(A), 8 U.S.C. 1153(b)(5)(A).

As the statute does not define “invest,” DHS proposes to define “invest” as the contribution of lawfully obtained capital that is placed at risk in a commercial job-creating activity such that there is a risk of loss and a chance for gain. See proposed 8 CFR 204.401, Invest. This definition would not include capital used in primarily financial or non-commercial activity, such as the purchase of financial instruments traded on secondary markets or constructing, owning, or operating a personal residence. To qualify as an investment, the regulations have always required the investor to place his or her capital at risk. See8 CFR 204.6(j)(2). The proposed definition also aligns with the expectation that in order to satisfy the parameters for capital redeployment, the capital must “remain at risk” and be “maintain[ed] at risk,” thus implying that it would need to have originally been at risk to begin with. See INA sec. 203(b)(5)(F)(v)(I), 8 U.S.C. 1153(b)(5)(F)(v)(I). This definition would clarify the capital is invested when it is placed at risk in a commercial job-creating activity. In instances where the new commercial enterprise is pooling investment capital to loan to a job-creating entity (as is typically seen in regional center-based investments), the investment is completed on the date the entirety of an investor's required amount of capital is placed at risk with the job-creating entity. Alternately, if the new commercial enterprise is the job-creating entity (as is typically seen in standalone investments), then the investment is completed on the date the entirety of an investor's required amount of capital is placed at risk with the new commercial enterprise.

Section 203(b)(5)(A) of the INA (8 U.S.C. 1153(b)(5)(A)(i)) also allows an investor to establish his or her eligibility while actively in the process of investing. As the RIA did not define “actively in the process of investing,” and the plain language definition of “actively” means “characterized by action rather than by contemplation or speculation,” [30] DHS proposes to require the investor to show more than a mere intent to invest or the contemplation of investing at some point in the future. Rather, the investor would have to have committed his or her capital to the new commercial enterprise. Moreover, DHS has long required more than evidence of “mere intent to invest, or of prospective investment arrangements entailing no present commitment” in order to demonstrate that an investor was actively in the process of investing the required capital.[31] Therefore, DHS proposes to define “actively in the process of investing” to require the alien seeking classification as an alien investor to have commited his or her lawfully obtained capital to a new commercial enterprise in the United States no later than the date on which the alien obtains conditional permanent resident status. See proposed 8 CFR 204.401, Actively in the process of investing. Most alien investors typically commit their investment to a new commercial enterprise contingent on the approval of the investor's EB-5 immigrant visa petition.[32] This allows the investor to meet the requirements of section 203(b)(5) of the INA for purposes of his or her EB-5 immigrant visa petition, but also provides the investor some level of flexibility to recover his or her investment if his or her EB-5 immigrant visa petition is denied or if the investor ultimately decides to no longer pursue alien ( printed page 40696) investor status in the United States. Consequently, this definition would continue to allow the commitment of capital to include allowing an alien seeking classification as an alien investor to place his or her capital in escrow for release to the new commercial enterprise pending approval of his or her EB-5 immigrant visa petition consistent with current USCIS policy.[33]

DHS uses the terms “investor,” “regional center investor,” and “standalone investor” throughout this proposed rule. Where there are different requirements, DHS relies on the regional center investor and standalone investor terms, as appropriate. However, where a requirement applies to each type of investor equally, DHS relies on the term “investor” and as the statute does not define the term, proposes to define that term to mean a “regional center investor” or “standalone investor.” See proposed 8 CFR 204.401, Investor. Using these terms throughout the proposed rule makes the proposals clearer and helps to differentiate between the two types of investors that may seek classification as an alien investor.

DHS proposes to define a “regional center investor,” which is not defined in the statute, as an alien seeking to pool his or her investment with one or more additional aliens seeking, or who have obtained, classification as an alien investor through the Regional Center Program. See proposed 8 CFR 204.401, Regional center investor. The INA requires an investor seeking to pool his or her investment with additional investors seeking classification as an alien investor to do so through the Regional Center Program. INA sec. 204(a)(1)(H)(i), 8 U.S.C. 1154(a)(1)(H)(i). Whereas investors seeking EB-5 immigrant visas previously could pool their investments in a new commercial enterprise that was not necessarily associated with a designated regional center, the RIA now requires that any pooled investments must be made under the purview of a designated regional center. Id. Consequently, DHS further proposes to define a “standalone investor,” which is also not defined in the statute, as an alien who is not seeking to pool his or her investment with additional investors seeking classification as an alien investor. See proposed 8 CFR 204.401, Standalone investor. Importantly, the definition does not preclude an investor from participating in a new commercial enterprise that has other investors, but those other investors must not be seeking classification as an alien investor to comply with the INA.

DHS proposes to include the statutory definitions of “job-creating entity” and “affiliated job-creating entity” in 8 CFR 204.401. See proposed 8 CFR 204.401, Job-creating entity and Affiliated job-creating entity. The INA defines a “job-creating entity” as any organization formed in the United States for the ongoing conduct of lawful business, including sole proprietorship, partnership (whether limited or general), corporation, limited liability company, business trust, or other entity, which may be publicly or privately owned, including an entity consisting of a holding company and its wholly owned subsidiaries or affiliates (provided that each subsidiary or affiliate is engaged in an activity formed for the ongoing conduct of a lawful business) that receives, or is established to receive, capital investment from alien investors or a new commercial enterprise under the regional center program and is responsible for creating jobs to satisfy the job creation requirements of section 203(b)(5) of the INA. INA sec. 203(b)(5)(D)(v), 8 U.S.C. 1153(b)(5)(D)(v). Further, the INA defines an “affiliated job-creating entity” as any job-creating entity that is controlled, managed, or owned by any person involved with the regional center or new commercial enterprise. INA sec. 203(b)(5)(D)(i), 8 U.S.C. 1153(b)(5)(D)(i). As the RIA did not define “lawful business” and the plain language definitions mean “in harmony with the law” [34] or “allowed by the law,” [35] DHS proposes to clarify that the law most relevant to these entities includes local, State, and Federal law. See proposed 8 CFR 204.401, Job-creating entity.

The INA defines a “new commercial enterprise” as any for-profit organization formed in the United States for the ongoing conduct of lawful business, including sole proprietorship, partnership (whether limited or general), holding company and its wholly owned subsidiaries (provided that each subsidy is engaged in a for-profit activity formed for the ongoing conduct of a lawful business), joint venture, corporation, business trust, limited liability company, or other entity (which may be publicly or privately owned) that receives, or is established to receive, capital investment from investors under INA sec. 203(b)(5). See INA sec. 203(b)(5)(D)(vi), 8 U.S.C. 1153(b)(5)(D)(vi). s. As the RIA did not define “lawful business” and the plain language definitions mean “in harmony with the law” [36] or “allowed by the law,” [37] DHS proposes to clarify that the law most relevant to these entities includes local, State, and Federal law. See proposed 8 CFR 204.401, New commercial enterprise.

In its prior regulations implementing the creation of the EB-5 program by the Immigration Act of 1990 (Pub. L. 101-649, sec. 121, 104 Stat. 4978, 4989), legacy INS separately defined the term “new” to ensure that an investor established his or her qualifying commercial enterprise after November 29, 1990, the date Congress first established the EB-5 program. 8 CFR 204.6(e) (Nov. 29, 1991); 56 FR 60897 (Nov. 29, 1991). DHS proposes removing the temporal requirement of 8 CFR 204.6(e) (Nov. 20, 2019) and defining “new commercial enterprise” consistent with the definition provided by the INA where no temporal requirement exists. See INA sec. 203(b)(5)(D)(vi), 8 U.S.C. 1153(b)(5)(D)(vi); see also proposed 8 CFR 204.401, New commercial enterprise.

The INA defines a “person [38] involved” with a regional center, new commercial enterprise or job-creating entity as a person who is, directly or indirectly, in a position of substantive authority to make operational or managerial decisions over the pooling, securitization, investment, release, acceptance, or control or use of any funding procured under the Regional Center Program. INA sec. 203(b)(5)(H)(v), 8 U.S.C. 1153(b)(5)(H)(v); see also proposed 8 ( printed page 40697) CFR 204.401, Person involved. Section 203(b)(5)(H)(v) of the INA provides the definition “unless otherwise determined by the Secretary of Homeland Security.” Accordingly, DHS proposes to codify the statutory definition with minor additions for clarity, such as including “limited partner.” DHS proposes to clarify that a person is in a position of substantive authority if the person serves as an administrator, a board member, a general partner, a limited partner, a manager, an officer, an owner, or in a similar position at the regional center, new commercial enterprise, or job-creating entity. See proposed 8 CFR 204.401, Person involved. This definition would include any alien seeking to obtain alien investor status under the Regional Center Program in his or her role as an owner, including as is often the case, as a limited partner of the new commercial enterprise. In addition, an agent, fiduciary, or representative may be in a position of substantive authority if his or her position in the regional center, new commercial enterprise, or job-creating entity authorizes the person to provide input or oversight of the use of any regional center investor capital obtained under the Regional Center Program. See proposed 8 CFR 204.401, Person involved.

Under this proposed rule, a person may be indirectly involved if the person owns, manages, or otherwise oversees an organization that rises to the level of a person involved. See proposed 8 CFR 204.401, Person involved. For instance, if an organization has an ownership interest in the new commercial enterprise, then the owners of that organization, would meet the definition of a “person involved” based on his or her ownership interest in the organization that owns the new commercial enterprise.

As the statute does not define “principally doing business,” this rule proposes a definition in line with current USCIS policy, to emphasize that a new commercial enterprise is “principally doing business” in the location where the job-creating activity is occurring, which may be different from the actual, physical location of the new commercial enterprise. See proposed 8 CFR 204.401, Principally doing business. DHS proposes to consider, consistent with current policy, factors that include, but are not limited to, the location of jobs directly created by the new commercial enterprise, expenditure of capital related to the creation of jobs, the new commercial enterprise's day-to-day operations, and the new commercial enterprise's assets used to create jobs. See USCIS Policy Manual Volume 6, Part G, Chapter 2.A(5), “Targeted Employment Area.”

This definition is important because it directly relates to how a regional center or alien investor will establish whether the EB-5 investment is being made into a TEA or a high employment area, as appropriate.

The INA requires a designated regional center to submit an application for approval of a particular investment offering before any regional center investor in that investment offering submits his or her EB-5 immigrant visa petition. INA secs. 203(b)(5)(F), 204(a)(1)(H)(i), 8 U.S.C. 1153(b)(5)(F), 1154(a)(1)(H)(i).

DHS proposes that a “project application” is an application for approval of an investment in a commercial enterprise submitted by a designated regional center according to the form instructions. DHS proceeds to use the term throughout the proposed regulation when referencing Form I-956F, Application for Approval of an Investment in a Commercial Enterprise, as this term is clearer and is the more colloquial use of terminology for EB-5 investments. See proposed 8 CFR 204.401, Project application; https://www.uscis.gov/​I-956F.

The INA requires all direct and third-party promoters (including migration agents) of a regional center, any new commercial enterprise, an affiliated job-creating entity, or an issuer of securities intended to be offered to alien investors in connection with a particular investment project to comply with rules promulgated by DHS, including a requirement to register as a promoter. As section 203(b)(5)(K) of the INA, 8 U.S.C. 1153(b)(5)(K), does not specifically define the term “promoter,” DHS proposes to define the term in a manner consistent with both statute and DHS current practice. Specifically, DHS proposes to define a “promoter” as any person that is acting on behalf of a regional center, new commercial enterprise, or affiliated job-creating entity to advertise, publicize, market, endorse, or provide testimonials or solicit indications of interest in connection with a particular investment offering under the Regional Center Program. See proposed 8 CFR 204.401, Promoter. When USCIS published the Form I-956K, Registration for Direct and Third-Party Promoters for public comments, stakeholders submitted comments asking whether the provisions regarding promoter registration applied to promoters working on behalf of standalone new commercial enterprises that are not seeking investors for the Regional Center Program. 87 FR 54233 (Sept. 2, 2022); 87 FR 79343 (Dec. 27, 2022). This proposed definition would clarify that only promoters working on behalf of an entity participating in the Regional Center Program would be required to register their participation with USCIS, in alignment with the plain language of the statute that section 203(b)(5)(K) of the INA, 8 U.S.C. 1153(b)(5)(K), applies to direct and third-party promoters of regional center entities to “oversee promotion of any offering of securities related to the EB-5 Program.”

The INA requires that any promoter must accurately represent the visa process to alien investors and describe permissible fee arrangements under applicable securities and immigration laws. See INA sec. 203(b)(5)(K)(i), 8 U.S.C. 1153(b)(5)(K)(i). The INA further directs promoters to “comply with the rules and standards prescribed by the Secretary” to oversee these requirements. Id. DHS expects that regional centers, new commercial enterprises, job-creating entities, and promoters working on their behalf will continue to use promotional materials to seek out investors for their projects. In connection with the new requirements in the INA added by the RIA regarding registration and regulation of promoters and their related promotional activities, DHS proposes to define “promotional materials” to include any advertisement, offering memorandum, endorsement, testimonial, solicitation, direct and indirect communication between investors and promoters, and all other similar materials under applicable Federal and State securities laws related to offerings under the Regional Center Program regardless of the form taken. See proposed 8 CFR 204.401, Promotional material.

DHS proposes to update this definition from 8 CFR 204.6(e) to reflect the RIA's addition of “United States nationals” to section 203(b)(5)(A)(ii) of the INA. See INA sec. 203(b)(5)(A)(ii), 8 U.S.C. 1153(b)(5)(A)(ii). See proposed 8 CFR 204.401, Qualifying employee.

Before the enactment of the RIA, an alien investor was required to maintain his or her investment at risk until his or her sustainment period ended. The sustainment period continued through ( printed page 40698) the investor's 2 years of conditional permanent resident status. Pre-RIA section 216A(d)(1)(B)(ii) of the INA, 8 U.S.C. 1186b(d)(1)(B)(ii). Due to the length of time some investors had to wait for an immigrant visa, at times it became necessary for a new commercial enterprise to further deploy (redeploy) an investor's capital to maintain eligibility. USCIS developed guidance within the framework of the statutory and regulatory authorities at the time for further deployment of an investor's capital after the job creation requirement was satisfied. See USCIS Policy Manual, Volume 6, Part G, Chapter 2.A(2), “Further Deployment After the Job Creation Requirement is Satisfied.”

The RIA required DHS to prescribe regulations to allow NCEs to redeploy investment funds when necessary for an investor to maintain the capital at risk for a petition filed on or after the enactment of the RIA. INA sec. 203(b)(5)(F)(v), 8 U.S.C. 1153(b)(5)(F)(v). Importantly, since the parameters for redeployment are discussed within the “Business Plans for Regional Center Investments” section of the INA, INA sec. 203(b)(5)(F), 8 U.S.C. 1153(b)(5)(F), DHS proposes to limit redeployment to regional center investors. Historically, regional center investors have had the longest wait for an immigrant visa and have been most impacted by the need to further deploy capital to retain eligibility, so DHS does not believe this proposed restriction would pose any consequences to standalone investors. Consequently, under this proposed rule, to “redeploy” would mean to reinvest an investor's regional center capital for the purpose of maintaining the investor's capital at risk. In addition, due to the changes made by the RIA from requiring the capital to remain invested throughout the conditional residence period in order to remove conditions to requiring that the investment be expected to remain invested for at least two years, DHS believes the likelihood of redeployment becoming a regular occurrence for EB-5 immigrant visa petitions filed on or after March 15, 2022, is highly unlikely.

Current regulations define a “regional center” as any economic unit, public or private, which is involved with the promotion of economic growth, including increased export sales, improved regional productivity, job creation, and increased domestic capital investment. 8 CFR 204.6(e), Regional Center. This definition aligned with the prior statutory requirement that an entity seeking designation as a regional center submit a general proposal for the promotion of economic growth (Pub. L. 102-395, sec. 610(a) (8 U.S.C. 1153 note), but no longer comports with the more specific changes made to the Regional Center Program by the RIA. An entity seeking designation as a regional center is now required to submit a proposal to DHS consistent with concentrating pooled investment in a defined, contiguous, and limited geographic area that establishes a substantive economic impact on the geographic area.[39] INA sec. 203(b)(5)(E), 8 U.S.C. 1153 203(b)(5)(E). Consequently, DHS proposes to update the regulatory definition of a “regional center” to align with the new requirements of the RIA. See proposed 8 CFR 204.401, Regional center. Within this proposed definition, DHS would replace the term “economic unit” with “entity” to use more appropriate terminology in its definition of a “regional center.” Id. This proposed definition would also clarify that a “regional center” must be formed in the United States (as defined at INA sec. 101(a)(38), 8 U.S.C. 1101(a)(38)), for the ongoing conduct of lawful business to ensure the ongoing integrity of the EB-5 program and that investments are being made in the United States to benefit qualifying employees. Id.

The RIA reauthorized and significantly reformed the Regional Center Program.[40] Public Law 117-103, Division BB, sec. 103, 136 Stat. 1070, 1075 (2022). In the EB-5 Modernization Rule, DHS defined the “Regional Center Program” as the program established by Public Law 102-395, sec. 610, as amended. However, because of vacatur of the EB-5 Modernization Rule [41] and the codification of new authority for the reformed Regional Center Program into the INA by the RIA, DHS proposes to define the “Regional Center Program” as the program under section 203(b)(5)(E) of the INA. See proposed 8 CFR 204.401, Regional Center Program.

The INA requires each new commercial enterprise and affiliated job-creating entity to keep funds received from alien investors in a separate account that may only be used to receive and deploy capital for use in the capital investment project or to return capital to an alien investor that provided it. See INA sec. 203(b)(5)(Q), 8 U.S.C. 1153(b)(5)(Q). DHS proposes to codify the INA's definition of a “separate account” as an insured account maintained by a new commercial enterprise or affiliated job-creating entity, as applicable, in the United States at a federally regulated bank or other financial institution as defined in 18 U.S.C. 20. See INA sec. 203(b)(5)(Q)(vi), 8 U.S.C. 1153(b)(5)(Q)(vi); see also proposed 8 CFR 204.401, Separate account. DHS further proposes that the account may only contain the pooled investment funds of regional center investors in a new commercial enterprise with respect to a single capital investment venture that may, in turn, fund one or more individual job-creating entities and that a separate account may not contain funds from any other source, except for interest that may accrue on amounts held in the account. Id. This definition would clarify that a new commercial enterprise or affiliated job-creating entity is not expected to retain a separate account for each individual regional center investor in the new commercial enterprise, but may pool those investment funds in one separate account. This would not preclude a new commercial enterprise or affiliated job-creating entity, however, from establishing a separate account for each regional center investor, should the new commercial enterprise or affiliated job-creating entity prefer to do so.

DHS proposes to codify the INA definitions of a “targeted employment area,” “rural area,” and “high unemployment area.” A “targeted employment area” (“TEA”) is, at the time of investment, a rural area or an area designated by the Secretary as a ( printed page 40699) high unemployment area. INA sec. 203(b)(5)(D)(viii), 8 U.S.C. 1153(b)(5)(D)(viii). DHS proposes to define a “TEA” as a rural area or a high unemployment area, while defining each of those terms separately in the proposed rule. See proposed 8 CFR 204.401, Targeted employment area.

The INA separately defines a “rural area” as any area other than an area within a metropolitan statistical area (as designated by the Director of the Office of Management and Budget) or within the outer boundary of any city or town having a population of 20,000 or more (based on the most recent decennial census of the United States). INA sec. 203(b)(5)(D)(vii), 8 U.S.C. 1153(b)(5)(D)(vii). DHS proposes to include this definition of “rural area” in the proposed rule while restating slightly for clarification that a “rural area” is any area that is: (1) not within a standard MSA; and (2) is not within the outer boundary of any city or town having a population of 20,000 or more. See proposed 8 CFR 204.401, Rural area. DHS believes this would further make clear that any area may qualify as a rural area provided the area does not meet either of these restrictions. In addition, this would clarify that only the population restriction of the second part of the definition is bound by the most recent decennial status at the time of investment, whereas the first part of the definition would be determined by whether the area was within a standard MSA at the date of investment. Determining the “date of investment” is discussed in Section IV.D of this preamble.

As referenced in the definition of TEA, the INA likewise contains detailed provisions regarding designation of high unemployment areas and limits the designation of these areas to DHS. INA sec. 203(b)(5)(B)(ii), 8 U.S.C. 1153(b)(5)(B)(ii). In line with these statutory provisions, DHS proposes to define a “high unemployment area” as an area designated by USCIS under the requirements for designation found at proposed 8 CFR 204.402. See proposed 8 CFR 204.401, High unemployment area.

The RIA “codifies a number of [. . .] long-sought reforms designed to enhance the integrity of the Regional Center Program and prevent fraud and abuse that have plagued it for far too long.” [42] It provides vital integrity and national security reforms to the EB-5 program to better guard against abuse and promote program integrity.[43] The RIA established in the INA new requirements for regional centers, new commercial enterprise owners, job-creating entity owners, and petitioners and provided USCIS additional authorities that will allow USCIS to mitigate the risks the EB-5 program presents.[44]

The RIA added new discretionary authorities to the INA to deny petitions or applications and revoke prior approvals if DHS determines, in its discretion, that there is a threat to public safety or national security or a benefit request under the EB-5 program is based on fraud, deceit, intentional material misrepresentation, or criminal misuse. INA secs. 203(b)(5)(N) and (O), 8 U.S.C. 1153(b)(5)(N) and (O). Previously, without these provisions, USCIS could not directly act on petitions or applications that involved threats to public safety or national security without a related statutory basis for ineligibility or termination that could provide USCIS reason to terminate a regional center's designation or prohibit the involvement of individuals or petitioners with ties to foreign governments hostile to the United States. While the prior statutory authorization gave USCIS the authority to designate regional centers, which in turn provided implicit authority to terminate those designations, the general language regarding the “promotion of economic growth” was the only explicit statutory eligibility requirement for a designation as a regional center. See section 610(a) of Public Law 102-395, 106 Stat. 1828, 1874. Due to the lack of explicit statutory authority, USCIS could not always timely terminate a regional center actively engaged in fraud to prevent larger losses to alien investors and bolster the ongoing integrity of the EB-5 program. The INA now provides explicit and comprehensive statutory authority for USCIS to act if DHS determines, in its discretion, that any participant in the EB-5 program presents any public safety or national security threat to the United States or is, or has, engaged in fraud, deceit, intentional material misrepresentation, or criminal misuse. INA secs. 203(b)(5)(N) and (O), 8 U.S.C. 1153(b)(5)(N) and (O).

Under this rule, USCIS would apply the statutory provisions of sections 203(b)(5)(N) and (O) of the INA, 8 U.S.C. 1153(b)(5)(N) and (O), generally using applicable practice guidance regarding sections 212(a)(3) or (6)(C) of the INA, 8 U.S.C. 1182(a)(3) or (6)(C), as a guide, while recognizing that the scope of determinations under sections 212(a)(3) and (6)(C) of the INA, 8 U.S.C. 1182(a)(3) and (6)(C), are more limited than determinations under sections 203(b)(5)(N) and (O) of the INA, 8 U.S.C. 1153(b)(5)(N) and (O). USCIS would also retain discretion under sections 203(b)(5)(N) (O) of the INA, 8 U.S.C. 1153(b)(5)(N) and (O), to determine that other actions not specified by sections 212(a)(3) or (6)(C) of the INA, 8 U.S.C. 1182(a)(3) or (6)(C), still nonetheless require USCIS to act to ensure the integrity of the EB-5 program. For example, if USCIS determines that a person is acting on behalf of an authoritarian government or is, or has been, a member of, or affiliated with a Communist or any other totalitarian party (or subdivision or affiliate thereof), foreign or domestic, USCIS would act under section 203(b)(5)(N) of the INA, 8 U.S.C. 1153(b)(5)(N). Likewise, if USCIS determines, for example, that an alien investor or any other person involved with a regional center who, by fraud or willfully misrepresenting a material fact, seeks to procure, has sought to procure, or has procured, an immigrant visa or other documentation, such as in connection with an application for designation as a regional center, USCIS would act under section 203(b)(5)(O) of the INA, 8 U.S.C. 1153(b)(5)(O).

As noted by a USCIS representative in an industry forum: “Fraud and other public safety or national security concerns in the EB-5 program, regardless of when such concerns come to light, adversely affect the EB-5 program and the stakeholder community.” [45] Sections 203(b)(5)(N) and (O) of the INA, 8 U.S.C. 1153(b)(5)(O), provide DHS with enforcement authority “if the Secretary determines, in the Secretary's discretion” that there are national security, fraud, misrepresentation, or criminal misuse concerns. To clarify its ( printed page 40700) discretionary authority in this context, DHS proposes that USCIS would be able to make a determination that any petition, application, or benefit request described in section 203(b)(5) of the INA, 8 U.S.C. 1153(b)(5), poses a threat to the public safety or national security of the United States, including participation in the EB-5 program itself, or was predicated on or involved fraud, deceit, intentional material misrepresentation or criminal misuse even if the petition, application, or benefit request was filed before the enactment of the RIA. See proposed 8 CFR 204.432 and 204.433. Equally important for the integrity of the EB-5 program, USCIS would be able to revoke a prior approval or terminate an investor's conditional permanent resident status if USCIS determines, in its discretion, that a threat to the public safety or national security of the United States exists or the petition, application, or benefit was predicated on or involved fraud, deceit, intentional material misrepresentation or criminal misuse. DHS does not believe this proposal would upset reliance interests because DHS would consider actions or events that occurred prior to enactment of the RIA for the limited purpose of determining whether there is or was an ongoing threat to the national interest or fraud under sections 203(b)(5)(N) or (O) of the INA, 8 U.S.C. 1153(b)(N) and (O) after enactment of the RIA.

As a result of any such determination, USCIS would deny or revoke the approval of any petition, application, or benefit request, terminate the permanent resident status of an alien investor, whether conditional or not, terminate or debar a regional center's designation, and permanently debar from participation in the Regional Center Program any new commercial enterprise, or job-creating entity under proposed 8 CFR 204.431. See also proposed 8 CFR 204.432(a) and 8 CFR 204.433(a). In addition, USCIS would bar any person associated with a terminated regional center or debarred new commercial enterprise or job-creating entity from participation in the Regional Center Program if the person was a knowing participant in the activities that led USCIS to make the determination under proposed 8 CFR 204.431. See proposed 8 CFR 204.432(b) and 8 CFR 204.433(b). USCIS would base a determination that a person was a knowing participant on actual or constructive knowledge. Id. Under this proposed rule, USCIS would consider any person that knew, or should have known, of any violation of the INA or these regulations that did not take action to address the violation to have had actual or constructive knowledge and would be subject to debarment from the EB-5 program. Additionally, a person would be considered to have actual or constructive knowledge if the person is directly or indirectly involved in any activity barred by the RIA or these regulations.

Importantly, as noted above, these determinations would apply to any application or petition submitted either before or after the enactment of the RIA. See proposed 8 CFR 204.400(a) and (b). DHS proposes to exercise its discretionary authority under the INA to prevent or end the participation of individuals or organizations that are currently, or were previously, involved in the EB-5 program to preclude their ongoing involvement, where necessary. See INA secs. 203(b)(5)(N) and (O), 8 U.S.C. 1153(b)(5) and (O).

In either case, USCIS would provide notice to the affected individual(s) or entity(ies) with an explanation of the determination, unless the relevant information is classified, or disclosure is otherwise prohibited under law. See proposed 8 CFR 204.432(c) and 204.433(c). Except for terminations of conditional permanent resident status obtained under section 216A of the INA, 8 U.S.C. 1186b, and denials or revocations of Form I-829 petitions, which are not included among the list of applications, petitions or benefits subject to section 203(b)(5)(P) of the INA, 8 U.S.C. 1153(b)(5)(P), and which have also not historically been appealable since they are otherwise reviewable in removal proceedings in accordance with applicable provisions of section 216A of the INA, 8 U.S.C. 1186b, an individual or organization denied a benefit or sanctioned under sections 203(b)(5)(N) or (O) of the INA, 8 U.S.C. 1153(b)(5)(N)-(O), would be able to appeal the determination to the Administrative Appeals Office. See INA sec. 203(b)(5)(P), 8 U.S.C. 1153(b)(5)(P); see also proposed 8 CFR 204.432(d) and 204.433(d).

Section 203(b)(5)(A) of the INA, 8 U.S.C. 1153(b)(5)(A), makes immigrant visas available to qualified immigrants seeking to enter the United States for the purpose of engaging in a new commercial enterprise in which the alien has invested, or is actively in the process of investing, the required amount of capital that is expected to remain invested for not less than two years and that will benefit the U.S. economy by creating full-time employment for not fewer than 10 U.S. citizens, U.S. nationals, lawful permanent residents, or other immigrants lawfully authorized to be employed in the United States, not including the investor's spouse or children. INA sec. 203(b)(5)(A), 8 U.S.C. 1153(b)(5)(A).

Any alien may file an EB-5 immigrant visa petition on his or her own behalf.[46] This rule would continue to require any alien seeking classification as either a regional center investor or standalone investor to properly file Form I-526E, Petition by Regional Center Investor, or Form I-526, Petition by Standalone Investor, as appropriate, according to the form instructions with the appropriate fees. See proposed 8 CFR 204.404. As with any petition filed with USCIS, a petition would continue to be considered properly filed if the petition is complete, signed by the petitioner (in this case the alien investor), and accompanied by the required initial evidence. Id; see also8 CFR 103.2(a)(7). The petition must include the required evidence along with any additional evidence necessary to establish the petitioner's eligibility by a preponderance of the evidence. 8 CFR 103.2(b)(1). As USCIS has continued to increase its use of electronic filing, USCIS amended the Form I-526E to permit investors to choose to upload their initial evidence in MyUSCIS.[47] Under this proposed rule, any investor choosing to upload his or her initial evidence would have to do so within 30 days of filing the petition. See proposed 8 CFR 204.404(a). If an investor does not upload his or her evidence in the electronic system within 30 days, USCIS would deny the petition. Id. Since the RIA establishes a general processing goal of 240 days for regional center investors in general and 120 days for regional centers investing in a TEA,[48] DHS believes that 30 days is a reasonable timeframe to allow for the investor to upload all required initial evidence while also providing USCIS sufficient time to complete the adjudication within the processing goal. Importantly, the investor must establish his or her eligibility at the time of filing and remain eligible through adjudication of the EB-5 immigrant visa ( printed page 40701) petition. See proposed 8 CFR 204.407(a); see also8 CFR 103.2(b)(1).

On June 1, 2022, USCIS revised Form I-526, Immigrant Petition by Alien Investor,[49] to create two separate forms: Form I-526, Immigrant Petition by Standalone Investor, and Form I-526E, Immigrant Petition by Regional Center Investor.[50] As part of this proposed rule, DHS is proposing further modifications to each petition and the corresponding instructions in line with the proposals contained in this rulemaking to ensure that USCIS has all the information necessary to make a determination as to the investor's eligibility and ensure the investor does not pose a threat to the public safety or national security of the United States and is not seeking to obtain an EB-5 immigrant visa fraudulently.

The INA requires a regional center to submit a project application before any alien investor investing in that project may file his or her petition for classification as a regional center investor. See INA sec. 203(b)(5)(F), 8 U.S.C. 1153(b)(5)(F); INA sec. 204(a)(1)(H)(i), 8 U.S.C. 1154(a)(1)(H)(i). Under this proposed rule, an alien seeking classification as a regional center investor must properly file Form I-526E, Petition by Regional Center Investor, and include evidence of association with a regional center's pending or approved Form I-956F (or project application). See proposed 8 CFR 204.404(b). Consequently, DHS is proposing to codify its post-RIA practice of USCIS rejecting any Form I-526E filed without evidence of association with a filed project application. Id. Evidence of association would ideally include a copy of the regional center's project application receipt notice along with evidence of the investor's signed agreements to invest in that particular investment offering to establish that his or her investment is associated with a regional center, but might also include other types of evidence to establish that the regional center submitted its project application, particularly in instances where the receipt notice is delayed or the investor seeks to file his or her petition as soon as possible after the regional center has submitted its project application. As intake processing improves, USCIS would expect a regional center to receive a receipt notice shortly after filing, which would improve the likelihood that the Form I-956F receipt notice could be made available to the investor prior to filing his or her Form I-526E. However, in accordance with the settlement agreement in Behring Regional Center, LLC and IIUSA v. Mayorkas, et al., 3:22-cv-2487 (N.D. Cal. 2022) and EB5 Capital, et al. v. DHS, et al., 3:22-cv-3948-VC (N.D. Cal. 2022), DHS proposes to continue accepting other evidence of the regional center having submitted Form I-956F in certain circumstances. See proposed 8 CFR 204.408(a).

DHS notes that an approved project application would establish certain eligibility requirements for a regional center investor, including investment in a new commercial enterprise and the expectation of sufficient job creation, for example. Consequently, DHS would continue its post RIA practice of a regional center investor not needing to submit evidence that is available to USCIS for review in the project application. This evidence from the project application establishing certain eligibility requirements for a regional center investor would be incorporated by reference into the regional center investor's petition, per section 203(b)(5)(E)(ii)(III) of the INA, 8 U.S.C. 1153(b)(5)(E)(ii)(III). In other words, the investor would attest that he or she invested in the project identified on his or her Form I-526E and would not need to resubmit documentation previously provided to USCIS with that project application. This proposed rule would make clear that a regional center investor would only have to submit evidence to establish his or her eligibility for an EB-5 immigrant visa by submitting the evidence required by paragraphs 8 CFR 204.408(b) through (d). See proposed 8 CFR 204.408(a).

As a regional center investor may file his or her EB-5 immigrant visa petition once the regional center has submitted its project application, and the project application establishes certain grounds of eligibility for the regional center investor, USCIS would not adjudicate the regional center investor's EB-5 immigrant visa petition until it has adjudicated the regional center's project application as several aspects of a regional center investor's eligibility rely on the approval of the regional center's project application. See INA sec. 203(b)(5)(F)(ii), 8 U.S.C. 1153(b)(5)(F)(ii).

An alien seeking classification as a standalone investor must properly file Form I-526, Petition by Standalone Investor. A standalone investor cannot pool his or her investment with any other aliens seeking classification as an alien investor. See INA sec. 203(b)(5)(E)(i), 8 U.S.C. 1153(b)(5)(E)(i); INA sec. 204(a)(1)(H)(i), 8 U.S.C. 1154(a)(1)(H)(i). In accordance with this statutory restriction, DHS proposes to clarify its post-RIA interpretation that multiple standalone investors would not be able to invest in the same new commercial enterprise, even if doing so independently. See proposed 8 CFR 204.407(a)(2). DHS proposes this additional language because multiple standalone investors in a single new commercial enterprise is contrary to the INA's requirement that any alien seeking to pool his or her investment with other alien investors must do so under the Regional Center Program. See INA sec. 204(a)(1)(H)(i), 8 U.S.C. 1154(a)(1)(H)(i).

DHS proposes to maintain the current definition that the priority date is the date the investor properly files a completed and signed EB-5 immigrant visa petition with USCIS, see8 CFR 204.6(d), including all initial evidence required by the form instructions and the correct fee. [51] See proposed 8 CFR 204.406(a). This proposal is also consistent with the priority date assignment for family-based petitions and first through third preference employment-based petitions that do not require a labor certification approved by the Department of Labor. See8 CFR 204.1(b); 8 CFR 204.5(d). A priority date is important to any alien seeking to immigrate to the United States as it establishes his or her place in the visa queue. As discussed in section III.C. of this proposed rule, the priority date is the determining factor as to when a petitioner can either apply for an immigrant visa abroad or to adjust status in the United States based on the dates published in State's monthly Visa ( printed page 40702) Bulletin.[52] State may not issue a visa, and USCIS may not grant adjustment of status unless the alien's priority date is earlier than the corresponding cut-off date in the “final action date” chart listed in the Visa Bulletin.

The regulations in effect prior to the effective date of the EB-5 Modernization Final Rule did not permit investors to use the priority date of an approved EB-5 immigrant visa petition for a subsequently filed EB-5 immigrant visa petition. See8 CFR 204.6(d) (Nov. 20, 2019). DHS introduced priority date retention to the EB-5 program in certain circumstances in its “EB-5 Immigrant Investor Program Modernization” Final Rule to bring the EB-5 priority date retention policy into harmony with other employment-based preference categories. See84 FR 35750, 35751 (July 24, 2019). However, the U.S. District Court for the Northern District of California vacated the EB-5 Modernization Rule on procedural grounds,[53] thereby removing the priority date retention provisions for alien investors from the regulations.

DHS has generally allowed beneficiaries in the employment-based first, second, and third preference categories to retain the priority date of his or her previously approved immigrant visa petitions unless DHS revokes the petition's approval. See8 CFR 204.5(e). DHS expanded the ability of beneficiaries in these preference categories to retain their priority dates even when their petitions have been revoked, so long as the approval was not revoked based on fraud, willful misrepresentation of a material fact, material error, or the revocation or invalidation of the labor certification associated with the petition. See81 FR 82398, 82485 (Nov. 18, 2016).

The RIA added new protections [54] for certain immigrants to retain their eligibility in connection with an otherwise qualified petition. See INA sec. 203(b)(5)(M), 8 U.S.C. 1153(b)(5)(M). DHS proposes to apply these provisions on priority date retention from the RIA for investors whose regional center is terminated or whose new commercial enterprise or job-creating entity is barred from participation in the EB-5 program, as well as standalone investors who encounter situations that require a “material change” to their initially-filed petitions. See proposed 8 CFR 204.406 and 204.410. Section 203(b)(5)(M) of the INA, 8 U.S.C. 1153(b)(5)(M), provides that upon termination or debarment, as applicable, of the investor's regional center, new commercial enterprise, or job-creating entity, the investor may retain his or her eligibility on that petition by taking specific actions to preserve his or her eligibility and filing an amendment with USCIS within 180 days of receiving notification from USCIS of the termination or debarment, as applicable. See INA sec. 203(b)(5)(M), 8 U.S.C. 1153(b)(5)(M). If the investor properly files an amendment and establishes his or her continued eligibility, then the investor would retain the priority date of his or her earlier filed petition, whether the earlier petition is approved or remains pending at the time the amendment is filed. See proposed 8 CFR 204.406(c).

DHS welcomes public comment on the priority date retention provisions. DHS also welcomes comments on the standards that may be considered when determining whether to allow for priority date retention, including alternative suggestions to those standards.

Consistent with its post-RIA interpretation and practice,[55] DHS proposes that the new visas reserved by the RIA in the INA only apply to those investors who filed an EB-5 immigrant visa petition on or after the date of enactment, March 15, 2022, and establish eligibility as a “qualified immigrant” based on post-RIA eligibility requirements ( e.g., adjusted investment amounts). See proposed 8 CFR 204.407(g).

After an investor files an EB-5 immigrant visa petition, USCIS may schedule the investor to appear for biometrics to confirm the investor's identity, perform background checks, and review a regional center investor's eligibility to be a person involved in the regional center, new commercial enterprise, or job-creating entity. 56 See proposed 8 CFR 204.417(a); see also8 CFR 103.2(b)(9), 103.16. While USCIS retains the discretion to schedule an investor for biometrics, most often biometrics would be captured when the investor seeks to obtain an immigrant visa or adjust status. As with all other benefit requests, if an investor is requested to appear for biometrics and does not appear, USCIS will consider the petition to be abandoned and deny the petition. See8 CFR 103.2(b)(13).

An alien seeking classification as an alien investor must invest, or be actively in the process of investing, the required amount of capital. See INA sec. 203(b)(5)(A). The RIA increased the required investment amount from $1 million to $1.05 million. See INA sec. 203(b)(5)(C)(i), 8 U.S.C. 1153(b)(5)(C)(i). For investments in a TEA or an infrastructure project, the required investment amount is $800,000. INA sec. 203(b)(5)(C)(ii), 8 U.S.C. 1153(b)(5)(C)(ii).

Under this proposed rule, DHS would update the investment amounts to the amounts established by the RIA. [57] See proposed 8 CFR 204.407(b). DHS previously raised the investment amounts in the EB-5 Immigrant Investor Program Modernization Final Rule, setting the minimum investment amount at $1,800,000 U.S. dollars and the investment amount in a TEA at $900,000 U.S. dollars, or 50 percent of the standard minimum investment amount. 84 FR 35750 (July 24, 2019). However, the U.S. District Court for the Northern District of California vacated the Final Rule on procedural grounds, reverting the amounts to $1 million and $500,000, respectively.[58] This proposed rule would remove and reserve 8 CFR 204.6, which contained the investment amounts and would provide the new statutory amounts as well as clarify that the investment amount must remain invested on the date the EB-5 immigrant visa petition is filed, which is explained further in Section IV.D.6 of this preamble. See proposed 8 CFR 204.407(b).

( printed page 40703)

For an EB-5 immigrant visa petition filed on or after March 15, 2022, the INA establishes a minimum investment amount of $1,050,000 U.S. dollars. INA sec. 203(b)(5)(C)(i), 8 U.S.C. 1153(b)(5)(C)(i). DHS proposes to codify this minimum investment amount in this rule. See proposed 8 CFR 204.407(b)(1). This amount will adjust automatically on January 1, 2027, and every 5 years thereafter, based on the cumulative annual percentage change in the unadjusted All Items Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City Average between January 1, 2022, and the date of adjustment as reported by the Bureau of Labor Statistics. INA sec. 203(b)(5)(C)(iii)(I), 8 U.S.C. 1153(b)(5)(C)(iii)(I); see proposed 8 CFR 204.407(b)(2). DHS will round down to the nearest $50,000 and update these amounts by publication in the Federal Register . Id. USCIS will also update the amounts on its public website to provide the appropriate investment amounts based on the date a petition is filed.

The RIA established a reduced minimum investment amount of $800,000 U.S. dollars for investments made in a TEA or in an infrastructure project.[59] INA sec. 203(b)(5)(C)(ii), 8 U.S.C. 1153(b)(5)(C)(ii). DHS proposes to codify this reduced minimum investment amount for investments made in a TEA or in an infrastructure project in this rule. See proposed 8 CFR 204.407(b)(2). This amount will automatically adjust on January 1, 2027, and every 5 years thereafter, to be equal to 75 percent of the standard minimum investment amount provided in proposed 8 CFR 204.407(b)(1). See INA sec. 203(b)(5)(C)(iii)(II), 8 U.S.C. 1153(b)(5)(C)(iii)(II); see proposed 8 CFR 204.407(b)(2). DHS will round down to the nearest $50,000 and update these amounts by publication in the Federal Register . See INA sec. 203(b)(5)(C)(iii)(II), 8 U.S.C. 1153(b)(5)(C)(iii)(II); see proposed 8 CFR 204.407(b)(2). USCIS will also update the amounts on its public website to provide the appropriate investment amounts based on the date a petition is filed.

Section 203(b)(5)(C)(iv) of the INA permits DHS to establish a higher investment amount of no more than three times the standard minimum investment amount in a high employment area, which is an area within a MSA that is not a TEA and has an unemployment rate significantly below the national average unemployment rate. See INA sec. 203(b)(5)(C)(iv), 8 U.S.C. 1153(b)(5)(C)(iv). DHS has not previously defined high employment areas beyond the statutory definition and never raised the investment amount for such an area. With this proposed rule, DHS proposes to define a high employment area as discussed previously in Part IV.B. of this preamble. See proposed 8 CFR 204.401, High employment area.

DHS is proposing to set the investment amount for an area of high employment at $1,400,000. See proposed 8 CFR 204.407(b)(3). Section 203(b)(5)(C)(iv)(II) of the INA, 8 U.S.C. 1153(b)(5)(C)(iv)(II), provides DHS with the discretion to “specify an amount of capital required [. . .] that is greater than (but not greater than 3 times)” the standard minimum investment amount. To calculate this amount, DHS multiplied the minimum standard investment amount ($1,050,000) by 133 percent and rounded up to the nearest $50,000, which means the standard minimum investment amount would be 75 percent of the high employment area investment amount. This is the same differential of a high unemployment area compared to the minimum investment amount. DHS proposes to automatically adjust this amount on January 1, 2027, and every 5 years thereafter, to be equal to 133 percent of the standard minimum investment amount rounded up to the nearest $50,000 and publish the new amount in the Federal Register . See proposed 8 CFR 204.407(b)(3). Setting the automatic adjustment at 133 percent would keep the minimum standard investment amount at roughly 75 percent of the minimum investment amount in a high employment area, in line with the adjustment between the standard amount and the minimum investment amount for TEA and infrastructure projects. DHS also believes this is reasonable because the INA permits raising this amount to no more than three times the standard minimum investment, which at its maximum would be $3,150,000. DHS notes this proposal is much less than the amount allowed by the INA.

DHS welcomes public comment on the high employment area investment amount calculation and percentage of employment in relation to the national average unemployment rate to determine if an area is an area of high employment, as well as any alternatives with reasoning to support a different approach.

An alien seeking classification as an alien investor, whether as a regional center investor or a standalone investor, must establish that he or she invested the required amount of capital described above. No matter the type of capital invested, the capital would have to be lawful, meaning the capital invested was derived, whether directly or indirectly, from lawful sources and through lawful means, including any capital used to cover administrative costs and fees in association with the investment. INA sec. 203(b)(5)(L)(i), 8 U.S.C. 1153(b)(5)(L)(i). USCIS has historically identified unique fraud risks with investor capital, including uncertainties in verifying that the funds invested were obtained lawfully.[60] Consequently, DHS proposes to codify its policies since implementing the RIA to require the investor to establish by a preponderance of the evidence that the capital he or she invested, as well as any capital he or she used to pay any administrative costs and fees, derived from lawful sources and through lawful means as well as document the path of those funds from the investor to the new commercial enterprise. See proposed 8 CFR 204.407(c). This would likely include different investors submitting different documents depending on where and how the investor derived the capital he or she invested, including any capital used to cover administrative costs and fees in association with the investment. For example, the investor may establish that he or she accumulated his or her capital through employment by providing bank records, income certificates, or personal income tax returns. See proposed 8 CFR 204.408(d)(1). With respect to documenting the path of accumulated funds, some investors might submit banking statements, wire transfer receipts, or cancelled checks, while other investors that use third parties to ( printed page 40704) facilitate the transfer of capital to the new commercial enterprise on their behalf would need to identify any third party used to meet the investment requirement and submit evidence that the capital provided by the third party was lawful. See proposed 8 CFR 204.408(c). USCIS has required this level of information from petitioners seeking to establish the lawfulness of their capital to ensure the EB-5 program is not being used to launder money or otherwise used to support fraudulent or criminal activities. Requiring this information remains necessary to demonstrate the complete path of lawful funds from the investor to the new commercial enterprise and allows USCIS to continue to ensure the integrity of the EB-5 program and that the invested funds are the investor's own funds. In addition, the investor would need to establish that any entity or individual used to provide his or her capital to the new commercial enterprise complies with all U.S. financial requirements and regulations, including anti-money laundering and countering the financing of terrorism (AML/CFT) requirements. See proposed 8 CFR 204.408(c)(4). USCIS would consider use of a currency exchanger, money service business, or other mechanism that is licensed, regulated, and authorized by an appropriate foreign or U.S. Government authority as evidence to establish that the capital obtained from the intermediary was lawfully derived, unless USCIS has reason to believe that such capital was not lawfully derived. See proposed 8 CFR 204.407(c)(3). If USCIS has reason to believe that such capital was not lawfully derived, then the investor would have to submit independent and credible evidence that the capital was lawfully derived.

The INA also precludes certain types of capital, such as unlawfully acquired assets, capital invested in exchange for a note, bond, convertible debt, obligation, or any other debt arrangement between the alien investor and the new commercial enterprise, capital invested with a guaranteed rate of return, or capital subject to a mandatory redemption provision, with certain exceptions. See INA sec. 203(b)(5)(D)(ii), 8 U.S.C. 1153(b)(5)(D)(ii). These exceptions allow an investor to include a buy back option that may be exercised solely upon withdrawal or denial of the EB-5 immigrant visa petition or at the discretion of the new commercial enterprise once the capital has been invested for at least two years, provided the capital remained invested at the time of filing the EB-5 immigrant visa petition and was used to create the required number of jobs for qualifying employees. See proposed 8 CFR 204.407(d)(3). In other words, the investor would be able to include provisions in his or her investment agreements that would allow the investor to receive his or her capital back if:

1. USCIS denies his or her EB-5 immigrant visa petition;

2. The investor withdraws his or her EB-5 immigrant visa petition; or

3. The new commercial enterprise, in its sole discretion, elects to buy back the investment after the capital has remained invested for at least 2 years, the capital remained invested when the investor filed his or her EB-5 immigrant visa petition, and the capital was used to create the required number of jobs.

Investments in the EB-5 program frequently involve multiple investors in the new commercial enterprise, some of whom may not be seeking classification as an alien investor. It is no less important that any capital received from other investors in the new commercial enterprise is likewise lawfully derived to ensure the ongoing integrity of the EB-5 program. Consequently, under this proposed rule, if a standalone investor is investing in a new commercial enterprise that is receiving investments from other individuals that are not seeking classification as an alien investor (non-EB-5 capital), then the standalone investor would have to identify all sources of non-EB-5 capital invested in the new commercial enterprise on his or her EB-5 immigrant visa petition. See proposed 8 CFR 204.407(c)(4). Similarly, a regional center would have to identify all sources of non-EB-5 capital provided, or expected to be provided, to a new commercial enterprise or job-creating entity identified in a project application. See proposed 8 CFR 204.407(c)(4). If USCIS has reason to believe that any capital invested in the new commercial enterprise or provided to the job-creating entity, including capital provided by an alien investor, has been derived by unlawful means, then USCIS would be able to request additional evidence from the regional center or standalone investor, as appropriate, to establish that the capital provided to the new commercial enterprise or job-creating entity is lawful. See proposed 8 CFR 204.407(c)(4). These proposals extend provisions in the current regulations that require investors in a new commercial enterprise to identify any additional capital invested in the new commercial enterprise and establish that all additional capital is lawful. 8 CFR 204.6(g)(1) (Nov. 20, 2019). DHS proposes additional clarifications about this provision in the proposed rule; particularly that while the standalone investor or regional center, as appropriate, must continue to identify any capital invested in the new commercial enterprise, USCIS would request additional evidence where there is reason to believe that the capital identified has not been derived by lawful means. USCIS would request such evidence from a standalone investor for his or her own capital or investments made outside of the Regional Center Program; from the regional center directly where there are questions about non-EB-5 capital invested in a new commercial enterprise in the Regional Center Program; or from a regional center investor regarding the lawfulness of his or her own capital. Evidence requested and obtained from a regional center would then be incorporated by reference into the regional center investor's EB-5 immigrant visa petition, consistent with how other project level documentation would be handled for regional center investors. See proposed 8 CFR 204.404(b), 204.408(a), and 204.410(b)(1). In either case, the regional center investor or the standalone investor would have an opportunity to remove (and replace, if necessary) any capital that cannot be established as lawful and respond to USCIS indicating those actions have occurred. See proposed 8 CFR 204.407(c)(4). However, if a new commercial enterprise or job-creating entity continues to operate with capital that has not been established as lawful or was otherwise attempting to use unlawful capital within the EB-5 program in any manner, USCIS would be able to sanction the regional center, new commercial enterprise, or job-creating entity under proposed 8 CFR 204.431. See proposed 8 CFR 204.407(c)(4).

DHS has considered whether DHS should specifically include regulatory provisions related to the evidentiary considerations when evaluating digital assets [61] as part of the source or path of ( printed page 40705) funds for investment of capital in the EB-5 program. For EB-5 purposes, digital assets that are not tangible assets in accordance with the definition of “capital” under INA sec. 203(b)(5)(D)(ii), 8 U.S.C. 1153(b)(5)(D)(ii), may not be directly invested as “capital” into a new commercial enterprise; however, the use of intangible digital assets as a source of tangible capital ( e.g. cash) or in the path of funds used to invest tangible capital into a new commercial enterprise may be permissible. USCIS does not believe that digital assets distinguish themselves as a funding source that is significantly distinct from other funding sources described in this preamble, although they may entail different considerations when assessing the lawfulness of the source. DHS has a practice of permitting digital assets as a valid source of funding and applies the same evidentiary considerations as it applies to other funding sources. As is the case for other sources of funding, an investor has to establish that digital assets used as a source or in the path of funds for capital investment must be lawfully derived to ensure the ongoing integrity of the EB-5 program. That is, when assessing digital assets, USCIS typically considers whether digital assets were shown to have been obtained from a lawful source and through lawful means, whether digital assets were shown to have been maintained and not swapped for other digital assets not shown to derive from a lawful source and through lawful means, whether account/digital asset ownership has been shown at all relevant times, whether transaction history has been shown sufficiently, whether tax returns are consistent with claims, whether the purchase/maintenance/movement were lawful and the entities/individuals involved were operating lawfully, and whether any later conversion of the digital assets shows a clear path from lawful source through conversion of digital asset. Additionally, the area of digital assets is rapidly evolving and while USCIS recognizes digital assets as part of a valid EB-5 investor's funding strategy, DHS does not believe that including a regulatory framework specific to digital assets and evidentiary considerations, at this time, would be beneficial. For these reasons, DHS does not believe it is necessary to incorporate specific evidentiary considerations relating to digital assets into this regulation. DHS believes that it is more appropriate to provide necessary details—supplementing evidentiary considerations currently laid out in the proposed regulatory framework—that specifically relate to the assessment of digital assets in sub-regulatory guidance. This approach provides investors and the agency the necessary flexibility to adapt to the evolving world of digital assets, and provide meaningful guidance on the specific types of evidence that may demonstrate the lawfulness of digital assets used in the source and path of funds for capital investment.

In addition to seeking comments on all aspects outlined in this preamble, DHS invites the public to comment on (1) whether the regulation should specifically address evidentiary considerations related to digital assets; (2) whether, if USCIS were to incorporate specific provisions into regulation, the above outlined considerations sufficiently address digital assets or whether additional aspects should be considered; and (3) whether other aspects related to digital assets as a source of funds should be considered or addressed in sub-regulatory guidance.

Prior to the RIA's enactment, under INA sec. 216A(d)(1)(A)(ii), 8 U.S.C. 1186b(d)(1)(A)(ii), an alien investor was required to sustain his or her investment throughout the period of his or her residence in the United States to be eligible to remove the conditions on his or her permanent resident status. USCIS historically interpreted this sustainment period to mean the two years of the investor's conditional permanent resident status in the United States. See USCIS Policy Manual, Volume 6, Part G, Chapter 7.A(2), “Sustainment of the Investment,” n. 4.

The RIA removed from section 216A(d)(1)(A)(ii) of the INA, 8 U.S.C. 1186b(d)(1)(A)(ii), the clause regarding how long the investment must be sustained to remove the conditions on residence. The RIA likewise revised section 203(b)(5)(A)(ii) of the INA, 8 U.S.C. 1153(b)(5)(A)(ii), to require that the investor must expect his or her capital to remain invested for no less than two years. See INA sec. 203(b)(5)(A)(ii), 8 U.S.C. 1153(b)(5)(A)(ii). In line with the plain language of these statutory changes, DHS interprets these changes to modify the time in which an investor must maintain his or her investment to be eligible for an EB-5 immigrant visa and the subsequent removal of conditions on his or her permanent resident status.

The statutory changes to sections 203(b)(5)(A) and 216A(d)(1)(A) of the INA, 8 U.S.C. 1186b(d)(1)(A), provide that an investor may invest, or be in the process of investing, any time prior to filing his or her EB-5 immigrant visa petition, provided the investment is expected to remain invested in accordance with applicable requirements for at least two years. See INA sec. 203(b)(5)(A)(ii), 8 U.S.C. 1153(b)(5)(A)(ii). Though the statute did not explicitly specify what particular actions in connection with an investment must happen ( e.g. contribution, placement at risk, etc.) for the 2-year period under section 203(b)(5)(A)(i) of the INA, 8 U.S.C. 1153(b)(5)(A)(i), to begin, since the RIA's effective date, DHS has interpreted the start date to be the date that the full amount of qualifying investment is contributed to the new commercial enterprise and placed at risk under applicable requirements, including being made available to the job-creating entity, as appropriate.[62] However, DHS is concerned by a scenario where an investor has made and concluded his or her investment before ever filing an EB-5 immigrant visa petition as it would be difficult for an investor to establish, and for USCIS to verify, the duration of the investment, particularly if USCIS is reviewing potentially dated evidence during the adjudication of the EB-5 immigrant visa petition and the subsequent petition to remove the conditions on residence, or the investor is unable to obtain the necessary evidence to establish his or her eligibility with USCIS. Consequently, DHS proposes that an investor may invest in accordance with all applicable requirements any time prior to filing his or her EB-5 immigrant visa petition and the requirement to remain invested for at least two years begins on that date of investment. However, to be eligible for an EB-5 immigrant visa and to address these ( printed page 40706) concerns regarding the validity and verifiability of associated evidence in the related adjudication, DHS proposes to modify its post-RIA policy to require (rather than suggest) that the investment would also have to remain at risk and available to the job-creating entity on the date the investor files his or her EB-5 immigrant visa petition. See proposed 8 CFR 204.407(b)(1)-(3).

DHS believes these proposed changes best align with the plain language of the INA as amended by the RIA and would lessen the burden on the investor to keep his or her investment in place for an extended period due to circumstances beyond the investor's or the new commercial enterprise's control, such as visa backlogs or other circumstances, while also mitigating the challenges USCIS would face reviewing an investment that has already concluded, potentially long before the investor files an EB-5 immigrant visa petition. Additionally, DHS believes these proposed changes would provide the greatest level of flexibility for stakeholders to create investment strategies that work for them, rather than having to make continual adjustments based on unknown (and often changing) immigrant visa issuance timelines, and would further limit the need for new commercial enterprises to redeploy investor capital after sufficient jobs have been created, solely to keep the investor's capital at risk over a potentially lengthy period. This would likewise minimize the risk of a new commercial enterprise not meeting the redeployment requirements of the INA, which requires USCIS to terminate the designation of any regional center associated with a new commercial enterprise that improperly redeploys an investor's capital. See INA sec. 203(b)(5)(F)(v)(II), 8 U.S.C. 1153(b)(5)(F)(v)(II). Importantly, the INA creates a minimum investment timeframe but does not preclude an investor and a commercial enterprise establishing an agreement for a longer period of investment. Further, DHS believes that investors are generally going to file their EB-5 immigrant visa petition shortly after investing the required amount of capital, both to secure a priority date and to lock in protections under section 203(b)(5)(M) of INA, 8 U.S.C. 1153(b)(5)(M), in the event of future sanctions, so having to maintain the investment as of the date of filing the EB-5 immigrant visa petition should not generally be a burden on the investor. Lastly, DHS believes this interpretation would provide the investor and the commercial enterprise with a significant degree of control over the required length of the investment since any need to maintain the investment beyond two years would be based on the investors' decision to file an EB-5 immigrant visa petition and personal investment objectives as well as the financial requirements of the commercial enterprise.

DHS notes that many investors place their capital in escrow pending approval of their EB-5 immigrant visa petition. As discussed in section IV.B of this preamble, an investor would continue to be able to establish that he or she is actively in the process of investing by placing his or her capital in escrow pending approval of his or her EB-5 immigrant visa petition. For purposes of determining the duration of the investment, after the approval of the EB-5 immigrant visa petition and the investor's capital is released from escrow to the commercial job-creating activity, if an escrow agreement is in place, then the investor must expect to maintain that investment within that commercial job-creating activity for no less than 2 years. See INA sec. 203(b)(5)(A)(i), 8 U.S.C. 1153(b)(5)(A)(i). If the new commercial enterprise is providing the investor's capital to a separate job-creating entity, the investment capital must remain with the job-creating entity or in use by the job-creating entity for the job-creating activity for no less than 2 years, except where the new commercial enterprise must redeploy the capital, after sufficient job creation, to another commercial activity within the same 2 years to keep the investor's capital at risk. See proposed 8 CFR 216.6(d)(2)(ii). While this 2-year timeframe may not align perfectly with the investor's period of conditional permanent residence, USCIS would review the investment when the investor seeks to remove the conditions on his or her residence and determine whether the investment was maintained at risk for at least 2 years from the date it was placed at risk and provided to the job-creating entity. Id.

An alien seeking classification as an alien investor must establish that his or her investment into a new commercial enterprise benefits the U.S. economy by creating full-time employment for not fewer than 10 qualified employees. See INA sec. 203(b)(5)(A), 8 U.S.C.1153(b)(5)(A). DHS proposes to clarify that the job creation must be tied to the investment capital of the alien investor, meaning that the jobs would not have been created but for the investment capital. See proposed 8 CFR 204.407(e)(1). DHS also proposes to clarify that the investment capital of the alien investor must be provided to the entity(ies) most closely responsible for creating the employment upon which the investment is based and used in connection with the job-creating activity undertaken by such entity(ies). See proposed 8 CFR 204.407(e)(1). These clarifications align with current policy stated in the USCIS Policy Manual and USCIS precedent decisions and would further tie the alien investor's capital to the job creation.[63]

Regional center investors may meet the job creation requirement by relying on economically and statistically valid methodologies for determining the number of jobs created. See INA sec. 203(b)(5)(E)(iv), 8 U.S.C. 1153(b)(5)(E)(iv). However, for regional center investors, the regional center would have to establish on their behalf that the investment offering identified in the project application will satisfy the job creation requirements. See proposed 8 CFR 204.407(e)(3). The regional center investor would not have to submit any additional evidence with his or her EB-5 immigrant visa petition to meet the job creation requirement. See proposed 8 CFR 204.408(a).

Only up to 90 percent of the job creation requirement may rely on jobs that are estimated to be created indirectly. See INA sec. 203(b)(5)(E)(iv), 8 U.S.C. 1153(b)(5)(E)(iv). The remaining 10 percent of the job creation requirement must be established using direct jobs, which may also be established through job creation estimates, provided the estimates are established using economically and statistically valid and transparent methodologies. See proposed 8 CFR 204.407(e)(3)(i). USCIS would generally accept direct job outputs of any acceptable methodology, regardless of whether the parameters of the estimate potentially include employees outside of the new commercial enterprise or job-creating entity. Further, if jobs estimated to be created are created by construction activity lasting less than 2 years, the ( printed page 40707) investor may satisfy up to 75 percent of the job creation requirement with jobs that are estimated to be created indirectly and any jobs estimated to be created directly will be prorated based on the length of job-creating activity. See proposed 8 CFR 204.407(e)(3)(ii). Under this proposed rule, the regional center would have to establish that their particular investment offering will create a sufficient amount of qualifying jobs for the total number of investors sought for that particular investment offering by submitting an economic impact analysis (EIA) that estimates the job creation tied to the job-creating activity. See proposed 8 CFR 204.421(b). The EIA would have to be economically and statistically valid and transparent so that USCIS could validate the information provided. Id.

Additionally, regional center investors may rely on an economically and statistically valid and transparent methodology to establish the job creation requirements using jobs estimated to be created by prospective tenants occupying commercial real estate created or improved by capital investments if the jobs are not existing jobs that have been or will be relocated. INA sec. 203(b)(5)(E)(v)(II)(aa), 8 U.S.C. 1153(b)(5)(E)(v)(II)(aa). USCIS previously allowed these types of jobs to establish sufficient job creation where the investor was investing in a new commercial enterprise associated with a regional center.[64] USCIS subsequently rescinded this policy in 2018 and updated its Policy Manual to reflect the change because USCIS determined that tenant-occupancy methodologies resulted in a connection or nexus between the investment and jobs that was too tenuous.[65] The INA now explicitly permits, and DHS proposes including in this rule, that a regional center may rely on these methodologies as sufficient to establish job creation, provided the jobs are not existing jobs that have been or will be relocated. See proposed 8 CFR 204.407(e). A regional center would include such a methodology in their project application for USCIS to review before any regional center investors would be able to rely on the job creation estimates to obtain approval of their EB-5 immigrant visa petition. See proposed 8 CFR 204.421(b).

While the INA allows a regional center to establish sufficient job creation in its project by using economically and statistically valid methodologies, DHS proposes that a regional center would not be able to rely on an economic model that uses visitor spending as an input to demonstrate qualifying jobs. See proposed 8 CFR 204.407(e)(3)(iv). Visitor spending purports to calculate jobs based on increased ancillary spending by visitors and tourists because of the underlying EB-5 project. An example is the increased off-site spending at restaurants, entertainment, and transportation venues purportedly arising from construction of a new hotel. DHS believes that causal linkage between visitor spending and an EB-5 project cannot be demonstrated through economic modeling. Modeling techniques, such as traditional input-output models and regression, cannot delineate the portion of visitor spending increase attributable to an EB-5 project as opposed to other sources or causes.

In addition, DHS is proposing in this rule to eliminate the use of bridge financing repaid from EB-5 investment capital as a basis to demonstrate job creation in the EB-5 program. See proposed 8 CFR 204.407(e)(1) (“Jobs attributable to any financing repaid with EB-5 investment capital may not be claimed as jobs created by such EB-5 investment capital.”).

As explained above, pursuant to INA section 203(b)(5), 8 U.S.C. 1153(b)(5), an immigrant investor must invest capital into a new commercial enterprise which will benefit the United States economy by creating qualifying jobs. DHS has historically permitted investors and their associated new commercial enterprises to claim credit for jobs created by interim, temporary, or bridge financing [66] that is later replaced by EB-5 capital. See USCIS Policy Manual Part G, Vol. 6, Ch. 2; see also USCIS EB-5 Adjudications Policy Memorandum, May 30, 2013, PM-602-0082 (superseded by the publication of consolidated EB-5 policy in the USCIS Policy Manual on November 30, 2016).[67]

The RIA did not explicitly address the use of bridge financing in the EB-5 program. However, the RIA amended the INA's job-creation requirement to now provide that an investor must demonstrate the new commercial enterprise into which they invested not just benefit the United States economy “and” create qualifying employment but that it must benefit the United States economy “by” creating such employment. See INA sec. 203(b)(5)(A)(ii), 8 U.S.C. 1153(b)(5)(A)(ii). Though not directly addressed in any related legislative history, DHS interprets this statutory amendment to indicate that Congress wanted to ensure a closer nexus between the alien's investment into the new commercial enterprise and resulting jobs. DHS believes, therefore, that its historical administration of bridge financing no longer best implements the statutory provision as amended by the RIA.

Additionally, DHS has encountered difficulties in the past in consistently adjudicating petitions and applications seeking to utilize bridge financing because of its variability in usage and lack of defined standards. For example, applicants have sought to characterize loans with maturity up to 10 years or more as bridge financing because it was subsequently replaced by EB-5 capital.

While DHS is proposing in this rule to eliminate the use of bridge financing repaid from EB-5 investment capital as a basis to demonstrate job creation in the EB-5 program, DHS is also soliciting comments on alternative options to eliminating the use of bridge financing in recognition that there may be credible uses of bridge financing in the EB-5 program. More recently, DHS has found that Form I-956F project applications filed after enactment of the RIA generally present more credible and realistic uses of bridge financing, which in turn present more credible projects that have a higher likelihood of success. For example, projects that have already broken ground and obtained permits to continue construction based on bridge financing are generally more credible in terms of being to attract additional investment in order complete the project and create qualifying employment. DHS therefore considered alternatives to address these adjudicative difficulties it has faced in the past with respect to bridge financing ( printed page 40708) while also considering the usage of bridge financing in light of this statutory amendment. Specifically, DHS is soliciting public comment to address the use of bridge financing in the EB-5 program through one of these options: (1) eliminate the use of bridge financing in the EB-5 program by no longer permitting any jobs created by bridge financing to be credited to EB-5 investors whose capital investments are used to repay and replace that bridge financing, or (2) restrict the use of bridge financing in the EB-5 program to sufficiently demonstrate a nexus between the jobs created by any bridge financing and the EB-5 capital used to repay the bridge financing such as by requiring that any bridge financing have a limited maturity date [68] and limiting the amount permitted for bridge financing up to a certain percentage of total project costs.[69] In particular, DHS is interested in comments from the public regarding these specific proposals to support limitations on the period for maturity and limitations on amount of bridge financing.

DHS proposes to clarify and update the regulatory provisions regarding the required initial evidence to accompany an EB-5 immigrant visa petition. The current provisions at 8 CFR 204.6(j) (Nov. 20, 2019) contain, in addition to the evidentiary requirements, certain substantive eligibility provisions that are better suited as standalone provisions apart from the evidentiary requirements. In this rule, DHS would move these eligibility provisions to 8 CFR 204.407 and has discussed them in the sections above.

This proposed rule would then provide the evidentiary requirements in 8 CFR 204.408. Standalone investors would be required to submit all of the initial evidence identified in proposed 8 CFR 204.408(b) through (g), while regional center investors would be required to submit the initial evidence identified in proposed 8 CFR 204.408(b) through (d) and would meet the remaining evidentiary requirements through their association with the regional center's project application for the project in which they have invested. See proposed 8 CFR 204.408. Importantly, a regional center investor would not have to submit any of the initial evidence that USCIS would already have reviewed with the regional center's project application. Prior to the RIA's establishment of a project application process, each regional center investor in a new commercial enterprise had to submit project-level documentation to establish his or her eligibility, which led to USCIS having to review the same evidence multiple times. If USCIS determined the evidence was insufficient, USCIS would request additional evidence from each regional center investor. Since the evidence was at the project level, the investor likely had to coordinate with the regional center to provide a response. DHS proposes to codify its post-RIA practice that, with the establishment of a project application, USCIS will review project-level evidence during the project application adjudication and communicate directly with the regional center if any evidence is determined to be insufficient. Once any issues are resolved at the project level and USCIS adjudicates the project application, USCIS would then rely on that adjudication to determine a regional center investor's eligibility related to the project level-requirements, such as job creation and whether the investment is in a high unemployment area.

DHS proposes to eliminate the current requirements at 8 CFR 204.6(h) (Nov. 20, 2019) and 8 CFR 204.6(j)(1) (Nov. 20, 2019), which require evidence to show that the immigrant investor has established the new commercial enterprise in the United States, and at 8 CFR 204.6(j)(5) (Nov. 20, 2019), which require evidence to show that the immigrant investor is or will be engaged in the new commercial enterprise through the exercise of day-to-day managerial control or through policy formulation. The original basis for these provisions was the statutory requirement that the immigrant investor establish and engage in a new commercial enterprise. See Section 121(b)(5)(A)-(B)(i) of IMMACT90, Public Law 101-649, 104 Stat. 4978, 4989-90 (Nov. 29, 1990). In 2002, Congress eliminated the requirement that an immigrant investor establish the new commercial enterprise. See Section 11036 of the 21st Century Department of Justice Appropriations Authorization Act, Public Law 107-273, 116 Stat. 1758, 1846 (Nov. 2, 2002). DHS believes the RIA, in its overall structure and composition, envisions and permits a largely passive investment into the new commercial enterprise by the immigrant investor. Considering these statutory changes, DHS proposes to eliminate the provisions cited above regarding evidentiary requirements for establishment of, and engagement in, a new commercial enterprise by the immigrant investor, and to clarify that the immigrant investor must submit initial evidence that the immigrant investor has invested capital in an established new commercial enterprise. See proposed 8 CFR 204.408(c) and (e); see also8 CFR 204.421(a).

DHS notes that this rule would remove Form I-9, Employment Eligibility Verification, from the list of evidence provided in the regulations and replace it with “employment eligibility verification forms.” See proposed 8 CFR 204.408(f)(2)(i). However, DHS would still expect Form I-9 to be the primary form used for employment eligibility verification but is modifying the terminology used in the regulatory text to continue to update USCIS regulations from relying on form numbers that are subject to change.

DHS welcomes public comment on the types of evidence that may be provided to establish eligibility for any of the particular eligibility grounds.

The INA, as amended by the RIA, permits immigrant investors to amend their pending or approved EB-5 immigrant visa petition in certain circumstances. INA sec. 203(b)(5)(M), 8 U.S.C. 1153(b)(5)(M). This proposed rule would permit immigrant investors to amend their EB-5 immigrant visa petition when:

1. There is a material change that affects the immigrant investor's eligibility;

2. USCIS terminates the immigrant investor's associated regional center; or

3. USCIS debars the immigrant investor's associated new commercial ( printed page 40709) enterprise or job-creating entity. See proposed 8 CFR 204.410(a).

Importantly, in line with the INA, an immigrant investor would not be able to amend his or her EB-5 immigrant visa petition if the amendment is an attempt to correct a deficiency that existed at the time of filing (for example, USCIS denies the regional center's project application on which the investor's EB-5 immigrant visa petition is based, and the investor seeks out another investment). See INA sec. 204(a)(1)(H)(ii), 8 U.S.C. 1154(a)(1)(H)(ii); see also proposed 8 CFR 204.410(a). Likewise, an amendment could not be used to amend a denied petition or amend a petition where USCIS revoked the approval. Id.

USCIS generally considers a change to be material “if the changed circumstances would have a natural tendency to influence or are predictably capable of affecting the decision.” [70] Consistent with the INA, material changes to a project are now likely to be covered by an amendment to the regional center's project application and subsequently incorporated into an investor's EB-5 immigrant visa petition. See INA sec. 203(b)(5)(F)(iii), 8 U.S.C. 1153(b)(5)(F)(iii); INA sec. 204(a)(1)(H)(ii), 8 U.S.C. 1154(a)(1)(H)(ii); proposed 8 CFR 204.410(b)(1). A standalone investor would also be able to amend his or her EB-5 immigrant visa petition to modify aspects of the business plan, provided the business plan was credible when filed. See proposed 8 CFR 204.410(b)(2). In the event the investor must invest any additional capital to retain his or her eligibility, then the investor would need to file an amendment to establish that any additional investment capital is lawful under proposed 8 CFR 204.407(c). See proposed 8 CFR 204.410(b)(1) and (2). Any change to the investor's source of capital would remain a material change and would result in USCIS denying the amendment request. Id. In such a situation, the investor would not be precluded from filing a new EB-5 immigrant visa petition, unless the investor is barred from participation in the EB-5 program. Id. In addition, if a standalone investor has not yet invested the full amount of capital when the designation of a high unemployment area expires, the standalone investor would have to file an amendment to seek an extension or modification of the high unemployment designation because the designation expires or because the new commercial enterprise is principally doing business in a new location. See proposed 8 CFR 204.410(b)(2). Since an extension would not be necessary as long as the standalone investor invests the full amount of required capital during the period of designation, DHS does not expect this situation to arise very frequently for standalone investors, but is providing for the possibility in this proposed rule to ensure clarity about a standalone investor's responsibility should such a situation come about.

The RIA amended the INA to provide the Secretary with specific authority to suspend regional centers and associated parties in certain circumstances. See INA sec. 203(b)(5)(G)(iii)(II)(bb), 8 U.S.C. 1153(b)(5)(G)(iii)(II)(bb); INA sec. 203(b)(5)(H)(iv), 8 U.S.C. 1153(b)(5)(H)(iv); INA sec. 203(b)(5)(I)(iv), 8 U.S.C. 1153(b)(5)(I)(iv); INA sec. 203(b)(5)(K)(ii), 8 U.S.C. 1153(b)(5)(K)(ii). DHS is codifying when USCIS may suspend a regional center, new commercial enterprise, or job-creating entity. See proposed 8 CFR 204.431. Under this proposed rule, USCIS would be able to suspend an entity from participation in the EB-5 program entirely or limited to certain EB-5 related activities and would prescribe the particulars of any suspension under proposed 8 CFR 204.431(d)(3). Since a suspension would not equate to a termination of a regional center's designation or debarment of a new commercial enterprise or job-creating entity's participation, an investor would not necessarily need to amend his or her EB-5 immigrant visa petition if the suspension does not impact his or her eligibility for an EB-5 immigrant visa. Consequently, a suspension would not by itself trigger the protections provided by section 203(b)(5)(M) of the INA, which are predicated on the termination of a regional center's designation or debarment of a new commercial enterprise or job-creating entity's participation in the EB-5 program.

The RIA established new protections for immigrant investors who invested in a regional center or new commercial enterprise in good faith and their regional center, new commercial enterprise, or job-creating entity is terminated or debarred, as appropriate, from participation in the Regional Center Program. INA sec. 203(b)(5)(M), 8 U.S.C. 1153(b)(5)(M). This new provision provides immigrant investors the opportunity to retain their eligibility for both their EB-5 immigrant visa petition and their petition to remove conditions on their residence, even if their regional center, new commercial enterprise, or job-creating entity is terminated or debarred at any time from the filing of the EB-5 immigrant visa petition throughout their conditional permanent resident status. INA sec. 203(b)(5)(M)(i), 8 U.S.C. 1153(b)(5)(M)(i).

To remain eligible, in the case of termination of the investor's regional center, the investor's new commercial enterprise would have to associate with an approved regional center, or the investor would have to make a qualifying investment in another new commercial enterprise in good standing within 180 days of the regional center's termination. INA sec. 203(b)(5)(M)(ii)(I), 8 U.S.C. 1153(b)(5)(M)(ii)(I). In the case of debarment of the investor's new commercial enterprise or job-creating entity, as appropriate, the investor would have to associate with a new commercial enterprise in good standing and invest any additional capital needed to satisfy any remaining job creation requirements. INA sec. 203(b)(5)(M)(ii)(II), 8 U.S.C. 1153(b)(5)(M)(ii)(II). In either case, USCIS would notify affected investors of the termination of their regional center's designation or the debarment of their new commercial enterprise or job-creating entity. See proposed 8 CFR 204.410(c) and (d). Within 180 days of receiving notification of the regional center's termination or the new commercial enterprise or job-creating entity's debarment, an affected investor would have to submit an amendment to his or her EB-5 immigrant visa petition, whether pending or approved. See proposed 8 CFR 204.410(e)(2). Consistent with related statutory requirements at sections 203(b)(5)(E) and 204(a)(1)(H)(i) of the INA, 8 U.S.C. 1153(b)(5)(E) and 1154(a)(1)(H)(i), DHS proposes that a regional center investor seeking to move or reassociate his or her investment with a different new commercial enterprise would need to seek out a new commercial enterprise participating in the Regional Center Program. See proposed 8 CFR 204.410(c) and (d). DHS considered allowing a regional center investor to seek out any new commercial enterprise regardless of its association with a designated regional center, but the regional center investor would then become a standalone investor and there would not be a statutory basis to claim any indirect jobs previously created as provided ( printed page 40710) under section 203(b)(5)(E) of the INA, 8 U.S.C. 1153(b)(5)(E), nor would such an allowance align with the related requirement under section 204(a)(1)(H)(i) of the INA, 8 U.S.C. 1154(a)(1)(H)(i), specifying that petitions for classification based on pooled investment filed on or after enactment of the RIA be filed in accordance with section 203(b)(5)(E) of the INA, 8 U.S.C. 1153(b)(5)(E). As a result, such an allowance would not only be misaligned with other applicable statutory authorities, but it would also make establishing eligibility much more difficult and costly for a regional center investor even if it were statutorily permissible. In addition, remaining within the Regional Center Program helps to ensure the ongoing integrity of the EB-5 program and implement the objectives of the RIA.

For investors whose regional center, new commercial enterprise, or job-creating entity is terminated or debarred, DHS proposes that, at the time of notice to the investor of the termination or debarment, if the investor's required amount of capital remained invested for at least two years and the new commercial enterprise created the required number of jobs, it is not necessary for the investor to reassociate or make a new qualifying investment under section 203(b)(5)(M)(ii) of the INA, 8 U.S.C. 1153(b)(5)(M)(ii), in order to maintain eligibility for classification under section 203(b)(5) of the INA, 8 U.S.C. 1153(b)(5), or removal of conditions. See proposed 8 CFR 204.410(e)(3). If, however, at the time of notice to the investor of the termination or debarment, the investor's required amount of capital had not yet remained invested for at least two years or the new commercial enterprise had not yet created the required number of jobs, the investor would nevertheless still be able to seek to retain his or her eligibility through the protections of section 203(b)(5)(M) of the INA, 8 U.S.C. 1153(b)(5)(M), and may reassociate or make a new qualifying investment consistent with the procedures established by this rule for doing so in order to demonstrate continued eligibility.

The INA reduces the required investment amount for investment in a TEA, which includes a rural area and a high unemployment area. INA sec. 203(b)(5)(C)(ii), 8 U.S.C. 1153(b)(5)(C)(ii). In addition to the reduced investment amount, the RIA added new provisions to the INA that reserve 20 percent of EB-5 visas available annually (or around 1,988 in a typical year) for investments in rural areas and 10 percent of EB-5 visas available annually (or around 994 in a typical year) for investments in high unemployment areas. Any visas reserved for each area that remain unused at the end of the fiscal year are reserved for the same area for an additional fiscal year. INA sec. 203(b)(5)(B)(i)(II)(aa), 8 U.S.C. 1153(b)(5)(B)(i)(II)(aa). Any reserved visas unused for a second year are released in the third fiscal year to the total amount of unreserved EB-5 visas available for investors not investing in a rural area or area of high unemployment or infrastructure project (discussed below). INA sec. 203(b)(5)(B)(i)(II)(bb), 8 U.S.C. 1153(b)(5)(B)(i)(II)(bb).

To establish investment in a rural area, a regional center or standalone investor, as appropriate, would have to submit a map of the proposed area along with the population counts of that area to ensure that the area identified meets the definition of a rural area. See proposed 8 CFR 204.408(g). As discussed in Section IV.B. of this preamble, a rural area is any area that is both outside a standard MSA as designated by the Office of Management and Budget and also outside the boundary of any city or town with a population of 20,000 or more based on the most recent decennial census of the United States. See proposed 8 CFR 204.401, Rural area. Regional center investors would not have to submit evidence of their investment being within a rural area other than verifying their investment in a new commercial enterprise for which a regional center has filed a project application. See proposed 8 CFR 204.408(a).

Previously, DHS permitted State government entities to designate certain high unemployment areas and provide applicable evidence to an immigrant investor for submission to USCIS that the area qualified as a high unemployment area under section 203(b)(5) of the INA, 8 U.S.C. 1153(b)(5). In 2019, DHS revised 8 CFR 204.6 in the EB-5 Modernization Rule to make changes to the definition of a high unemployment area while removing State government entities' determinations from the designation process and instead limiting the authority to make a determination of a high unemployment area with USCIS based on the definition provided in the regulation. See84 FR 35750, 35808 (July 24, 2019). On March 26, 2021, the U.S. District Court for the Northern District of California vacated the EB-5 Modernization Final Rule on procedural grounds, removing the effect of the changes made to 8 CFR 204.6.[71] The INA, as amended by the RIA, now exclusively vests the TEA determination with DHS. INA sec. 203(b)(5)(B)(ii)(II), 8 U.S.C. 1153(b)(5)(B)(ii)(II). DHS proposes that USCIS would designate an area as a high unemployment area during the adjudication of the regional center's project application, or the adjudication of a standalone investor's EB-5 immigrant visa petition, as appropriate. See proposed 8 CFR 204.402(c). Regional center investors would not have to submit evidence of their investment being within a high unemployment area other than verifying their investment in a new commercial enterprise for which a regional center has filed a project application. See proposed 8 CFR 204.408(a).

The INA provides that a high unemployment area may consist of a census tract or contiguous census tracts in which the new commercial enterprise is principally doing business (the “project tract(s)”) if the weighted average of the unemployment rate [72] for the tract or tracts is at least 150 percent above the national average. INA sec. 203(b)(5)(B)(ii)(I)(bb), 8 U.S.C. 1153(b)(5)(B)(ii)(I)(bb). See proposed 8 CFR 204.402(a). If the project tract(s) do not independently qualify under this analysis, a high unemployment TEA may also consist of the project tract(s), along with any or all additional tracts that are directly adjacent to the project tract(s), as long as the weighted average of the unemployment rate for all of the tracts in the identified area is at least 150 percent of the national average when compared using the same labor force employment measure for the census tract(s) and the national average rate. See proposed 8 CFR 204.402(a) and (b).

Figure 1 illustrates how to apply the limitations. The tract with the star (6) and surrounded by the dashed line represents the project tract where the new commercial enterprise is principally doing business. The area outlined by the solid black line contains all the tracts that are directly adjacent to the project tract. Under the new statutory definition, the tract with the star (6) may independently qualify for designation as a high unemployment ( printed page 40711) area. If it does not, that tract combined with any or all of the additional tracts within the solid black line (4, 5, 7, 10, 11, and 30) may be able to qualify for designation as a high unemployment area if the weighted average unemployment rate of the entire proposed area is not less than 150 percent of the national average rate when compared using the same labor force employment measure for the census tract(s) and the national average rate.

As illustrated in Figure 1, tracts may be considered directly adjacent to the project tract if the boundaries are touching at a corner, such as number 4 in relation to number 6. Additionally, the census tract boundaries may meet in a waterway, such as number 30 in relation to number 6. If the census tract boundaries meet in that waterway, the tracts are considered directly adjacent. However, if the waterway is itself a census tract, then the tract on the opposite side of that waterway is not directly adjacent to the project tract. For instance, in Figure 2 showing two of the Hawaiian Islands in Kauai County, tract 412 (on the left and surrounded by tract 9902) is not directly adjacent to tract 409 (on the right and surrounded by tract 9901). Recognizing that each of these particular census tracts would independently qualify as a rural area based on the 5-year American Community Survey (ACS) data from 2021, Figure 2 is being used for illustrative purposes for when a census tract separated by a body of water that has its own census tract number would not be directly adjacent to another tract.

( printed page 40712)

DHS proposes that standalone investors and regional centers seeking designation of their investment or project as principally doing business in a high unemployment area must submit with their EB-5 immigrant visa petition or project application, respectively, a list of the census tract(s) comprising the proposed area and the unemployment statistics for the area for which designation is sought, along with the method(s) by which the unemployment statistics were obtained. See proposed 8 CFR 204.408(g)(2) and proposed 8 CFR 204.421(c)(2). DHS further proposes that the unemployment statistics used to perform the calculation must be statistically valid for the census tracts, use unbiased estimates calculated at the census-tract level, be updated periodically, be provided by a Federal agency, and the survey methodology, if any, must use publicly available data along with a description of the applicable weights and estimation of error and bias in the estimates. See proposed 8 CFR 204.402(b). DHS expects that under this standard most investors and regional centers would be able to rely on the Census Bureau's ACS [75] to perform the necessary calculations and determine prior to USCIS adjudication whether an area would qualify as a high unemployment area. While DHS does not restrict investors and regional centers to only using the ACS data, DHS believes that establishing these standards for the data will increase transparency and allow investors and regional centers to independently calculate, even before submission of the EB-5 immigrant visa petition or project application, that the area they have identified for investment would likely qualify as a high unemployment area.

When comparing the area identified to the national average rate, the petitioner or regional center, as appropriate, must use consistent data sources between the two areas. Therefore, if the unemployment rate of the area identified is calculated using, for example, data from the ACS from the past year, then the national unemployment rate must also be calculated using data from the ACS from the past year. USCIS previously allowed a combination of U.S. Department of Labor Local Area Unemployment Statistics (LAUS) and ACS data, commonly referred to as a “Census Share Methodology.” This methodology does not generally produce statistically valid unbiased estimates at the census-tract level. Consequently, the combination of LAUS and ACS data would not be accepted under proposed program requirements with regard to consistency between the unemployment rate and the census-tract-level data. See proposed 8 CFR 204.402(b). Therefore, this methodology would not be accepted under the proposed requirements.

To calculate the weighted average unemployment rate of an area using EB-5 immigrant visa petition or project application required data ( i.e., a list of the census tract(s) comprising the proposed area, the unemployment statistics for the area, and the method by which the unemployment statistics were obtained), first divide the labor force of each census tract by the labor force of the entire area sought for designation. Then, multiply this figure by the unemployment rate of that specific census tract. The resulting figure is the weighted unemployment rate for each individual census tract. The total weighted unemployment rate is the sum of the weighted unemployment rates for each census tract in the area sought for designation. If the total weighted ( printed page 40713) unemployment rate is at least 150 percent of the national unemployment rate when compared using the same labor force employment measure for the census tract(s) and the national average rate, then the project area would qualify as a high unemployment TEA.

Under this proposed rule, USCIS would not proactively designate or identify areas that may qualify as a high unemployment area. USCIS would rely on the standalone investor or regional center, as appropriate, to provide data to support the claim of an investment in a high unemployment area. The data provided to establish a high unemployment area would vary based on the type of investor seeking the designation. For a standalone investor seeking to invest in a high unemployment area, USCIS would review all the data provided when the investor files his or her EB-5 immigrant visa petition to determine whether the area identified meets the requirements of a high unemployment area. For a regional center investor seeking to invest in a high unemployment area, USCIS would review all the data provided by the regional center when the regional center submits its project application. In either case, designation of a high unemployment area could not be requested from USCIS except through the adjudication of a project application or EB-5 immigrant visa petition. See proposed 8 CFR 204.402(c). Though USCIS is not currently positioned to proactively designate areas as a high unemployment area or provide guidance to the public on areas that would qualify as a high unemployment area, USCIS may, in its discretion, publish additional guidance or maps to assist a regional center or standalone investor seeking out an investment in a high unemployment area. Importantly, DHS believes that the standards prescribed in the INA and this proposed rule provide a regional center or standalone investor clear guidelines allowing anyone seeking an investment in a high unemployment area to be able to reliably determine if his or her investment would be within a high unemployment area.

If USCIS approves a standalone investor's EB-5 immigrant visa petition for investment in a high unemployment area, the area identified is considered a high unemployment area for 2 years from the date the standalone investor made his or her investment. See proposed 8 CFR 204.402(d). Upon approval, USCIS would then extend the initial designation for 2 years from the date of the approval notice. See proposed 8 CFR 204.402(e)(1).

If USCIS approves a project application, then the area identified is considered a high unemployment area for associated regional center investors for 2 years from the date of the project application filing. See proposed 8 CFR 204.402(d). Upon approval, if USCIS determines the area continues to qualify as an area of high unemployment, USCIS would then extend the initial designation for 2 years from the date of the approval notice. See proposed 8 CFR 204.402(e)(1).

DHS believes providing initial 2-year extensions on the date of adjudication is important to ensure that the 2-year validity period is effectuated and to allow investments to continue without the need for an immediate renewal request. While DHS anticipates USCIS will adjudicate these filings as quickly as possible, this extension would provide a level of certainty that the area identified will be considered a high unemployment area for at least two years rather than two years minus the time the adjudication remained pending.

A regional center investor that has invested the full amount of his or her lawful capital in the new commercial enterprise identified in the project application and files his or her EB-5 immigrant visa petition within the 2 years from the date of the regional center receiving the approval notice would be considered to have invested in a high unemployment TEA and would not need to increase his or her investment should the designation expire or should the area no longer qualify as a high unemployment area after those two years. Likewise, a standalone investor that has invested the full amount of his or her lawful capital in the new commercial enterprise within two years from the EB-5 immigrant visa petition approval and automatic renewal would not need to increase his or her investment should the designation expire or should the area no longer qualify as a high unemployment area after those two years.

Within the 90 days prior to the end of the 2-year designation period, a designated regional center or standalone investor, as appropriate, may seek to extend the designation if the regional center will continue to seek new investors beyond those two years or if the regional center investor or standalone investor has not yet invested the full amount of capital prior to the designation's expiration. See proposed 8 CFR 204.402(e)(2). If either a regional center investor or standalone investor has not invested the full amount of required capital within the 2-year designation period and the designation of a high unemployment area expires and cannot be renewed because, for example, the area where the new commercial enterprise is principally doing business no longer qualifies as a high unemployment area, then the regional center investor or standalone investor would need to increase his or her investment to meet the minimum investment amount under section 203(b)(5)(C)(i) of the INA, 8 U.S.C. 1153(b)(5)(C)(i), and submit an amendment to his or her EB-5 immigrant visa petition to establish that any additional capital invested is lawful. If an extension is properly requested, then the area's designation would extend during the pendency of the request. This would allow a regional center to continue to solicit investors while USCIS reviews the extension request. If USCIS were to deny the extension request, investors solicited during the pendency would have to increase their investment to meet the minimum capital requirements. Therefore, a regional center should seek to ensure that any particular project remains in an area of high unemployment when continuing to seek investments at the lower investment amount beyond the designation period and if it is, to seek to file an extension request as early in the 90-day period as possible.

Importantly, a regional center investor or standalone investor that invested the full amount of required capital in a new commercial enterprise with a valid high unemployment area designation at the time of the investment would not need to increase his or her capital investment solely because the designation expires.

If a new commercial enterprise moves the location in which it is primarily doing business, then the designated regional center or standalone investor would not be able to submit a renewal request and would instead have to submit an amendment to the project application or EB-5 immigrant visa petition, as appropriate. See proposed 8 CFR 204.402(e)(3) and Section IV.D.9 of this preamble.

The INA provides a reduced required investment amount if an investor invests his or her capital in an infrastructure project. See INA sec. ( printed page 40714) 203(b)(5)(C)(ii), 8 U.S.C. 1153(b)(5)(C)(ii). In addition to the reduced investment amount, the INA reserves two percent of EB-5 visas available annually (or approximately 198) for investments in qualifying infrastructure projects. See INA sec. 203(b)(5)(B)(i)(I)(cc), 8 U.S.C. 1153(b)(5)(B)(i)(I)(cc). Any visas reserved for infrastructure projects that remain unused at the end of the fiscal year are reserved for infrastructure projects for an additional fiscal year. See INA sec. 203(b)(5)(B)(i)(II)(aa), 8 U.S.C. 1153(b)(5)(B)(i)(II)(aa). Any visas reserved for infrastructure projects that remain unused for a second year are released in the third fiscal year to the total amount of EB-5 visas generally available for all EB-5 investors. See INA sec. 203(b)(5)(B)(i)(II)(bb), 8 U.S.C. 1153(b)(5)(B)(i)(II)(bb).

Only DHS may determine whether a project qualifies as an infrastructure project. See INA sec. 203(b)(5)(B)(iii), 8 U.S.C. 1153(b)(5)(B)(iii). In accordance with post-RIA practice, DHS proposes that USCIS would make this determination when adjudicating the regional center's project application. See proposed 8 CFR 204.403(a). Importantly, a standalone investor is not eligible to receive a visa reserved for investment in an infrastructure project. The definition of an infrastructure project in the INA requires the investment project to be administered by a governmental entity that is the job-creating entity contracting with a regional center or new commercial enterprise to receive capital investment under the Regional Center Program. See INA sec. 203(b)(5)(D)(iv), 8 U.S.C. 1153(b)(5)(D)(iv).

While any sector whose utility to the public can be established may qualify as an infrastructure project, DHS generally expects qualifying infrastructure projects to involve the maintenance, improvement, or construction of any physical assets that are designed to provide or support services to the general public through projects in sectors such as those generally identified by relevant statutes, regulations, and executive orders, including aviation, broadband internet, drinking water infrastructure, electricity transmission, energy production and generation, pipelines, ports (including navigational channels), stormwater and sewer infrastructure, surface transportation (including roadways, bridges, railroads, and transit), and water resources projects.[76]

In addition to Congress now providing an immigration benefit for foreign investment in certain infrastructure projects in the United States, DHS must continue to ensure that any foreign investment through the EB-5 program aligns with DHS's obligation to ensure the ongoing security of the nation's most critical infrastructure.[77] Accordingly, DHS proposes to preclude a regional center, new commercial enterprise, or job-creating entity from divulging critical project specifics to a regional center investor, unless such disclosure is explicitly authorized by the government agency administering the infrastructure project. See proposed 8 CFR 204.434.[78] DHS has identified 16 critical infrastructure sectors whose assets, systems, and networks, whether physical or virtual, are considered so vital to the United States that their incapacitation or destruction would have a debilitating effect on security, national economic security, national public health or safety, or any combination thereof.[79] As many of the projects that would qualify as an infrastructure project fall within these 16 critical sectors, DHS believes this preclusion is critical to the continued security of the United States because the divulgence of any critical information to a foreign investor may result in adverse consequences to the ongoing security of such infrastructure. A regional center, new commercial enterprise, or job-creating entity that does divulge any such information may be subject to termination or debarment, as applicable, from the Regional Center Program. See proposed 8 CFR 204.431, 8 CFR 204.432 and 8 CFR 204.434 and section IV.H of this preamble.

DHS welcomes public comment on the definition of an infrastructure project as well as the types of documents that entities would likely be able to provide to establish that their project meets the definition of an infrastructure project.

The current regulations allow an investor to invest in a troubled business and maintain current employment at the business at no less than the pre-investment level for a period of at least two years to meet the statutory employment creation requirement. See8 CFR 204.6(j)(4)(ii) (Nov. 20, 2019). While the RIA neither specifically included nor excluded this provision, DHS is proposing to remove the troubled business provisions from its regulations. Historically, less than one percent of petitions received by USCIS sought to qualify through investment in a troubled business, and these provisions typically were not used by regional center investors. Further, the troubled business provisions do not further job creation in the sense that an immigrant investor's infusion of capital is not actually used to create new employment in the United States. Finally, the current definition looks at net loss as a percentage of net worth, which is unworkable for a business with a negative net worth.

DHS considered retaining this provision in these proposed regulations. Specifically, DHS considered incorporating accounting ratios that the financial industry uses to evaluate the health of a business by defining troubled business to mean a business that has been in existence for at least two years and whose most recent tax returns or audited financial statements show: (1) a quick ratio of less than one calculated as current assets less inventory divided by current liabilities; (2) a current ratio of less than two of current assets divided by current liabilities; or (3) a current liabilities to net worth ratio calculated as current liabilities×100 divided by net worth above 60 percent. For purposes of determining whether the troubled business had been in existence for two years, successors in interest to the troubled business would have been deemed to have been in existence for the same period as the business they succeeded.

Ultimately, DHS decided that the limited use of this provision and the difficulty in an investor establishing that his or her new commercial enterprise qualifies outweighed the utility in retaining this provision. Importantly, removing this provision ( printed page 40715) would not impact any investor that filed his or her EB-5 immigrant visa petition before the effective date of this rule, if finalized, seeking to qualify with an investment in a troubled business; USCIS would continue to adjudicate such EB-5 immigrant visa petition based on the statute and regulations in place at the time the investor filed his or her EB-5 immigrant visa petition. See proposed 8 CFR 204.400. Likewise, any investor that seeks to remove his or her conditions based on the troubled business provisions would continue to be able to do so, as long as the investor can establish his or her eligibility to remove conditions through job preservation. See proposed 8 CFR 216.6(d).

The RIA repealed the former authorizing statute, codified a significantly reformed Regional Center Program in the INA, and authorized the issuance of immigrant visas to investors participating in the program through September 30, 2027. SeePublic Law 117-103, Division BB, sec. 103 (2022); INA sec. 203(b)(5)(E)(i), 8 U.S.C. 1153(b)(5)(E)(i).

Originally created as a pilot program in 1992, over time the Regional Center Program has become the primary way for alien investors to seek an EB-5 immigrant visa. Over 90 percent of EB-5 immigrant visa petitions seek to establish eligibility based on an investment through a designated regional center. In fact, since its inception, the Regional Center Program accounts for over 90 percent of investment capital received from alien investors seeking an EB-5 immigrant visa and almost 95 percent of the jobs created by these investments.[80] However, neither DHS, nor legacy INS before it, ever comprehensively revised the regulations implementing the Regional Center Program since publishing the first regulations in 1993. After years of administering the program and several Government Accountability Office (GAO) audits [81] identifying concerns with fraud within the EB-5 program, DHS recognized the need to reform and modernize the Regional Center Program to address ongoing concerns of fraudulent and nefarious activity occurring within the Regional Center Program. Consequently, DHS published an Advance Notice of Proposed Rulemaking (ANPRM) on January 11, 2017, seeking public input on a range of issues related to the Regional Center Program administered under the authorization provided by section 610 of Public Law 102-395. While the RIA directly addresses many of the questions for which DHS previously sought public feedback, DHS reviewed comments received on that notice to inform several of the proposals included in this proposed rule for the Regional Center Program under the new provisions of the INA added by the RIA.

Under this proposed rule, any entity seeking designation as a regional center would have to submit Form I-956, Application for Regional Center Designation, according to the form instructions and with the appropriate fees. See proposed 8 CFR 204.411. The application would have to include a proposal consistent with the purpose of concentrating pooled investment within a defined, contiguous, and limited geographic area. See proposed 8 CFR 204.412(a). If the proposal does not establish a contiguous and limited area, as discussed in greater detail later in this section, or is not likely to successfully concentrate pooled investments, USCIS would deny the application. Id. If the entity establishes eligibility for designation, USCIS would approve the application, and the designation would remain valid until the regional center's withdrawal from the program under 8 CFR 204.416 or USCIS terminates the designation under 8 CFR 204.431(d)(4). Id. Violations that may result in the termination of a regional center's designation are discussed in Section IV.G.8 of this preamble.

Although the RIA does not define “contiguous,” Black's Law Dictionary defines the term as “in close proximity; in actual close contact; Touching; bounded or traversed by.” [82] DHS proposes to add more specificity to the definition for purposes of the EB-5 program, to clarify that a regional center's geographic area would be contiguous if the areas identified share a common boundary or at least one common point, when using legal boundaries recognized or established by the U.S. Census Bureau. See proposed 8 CFR 204.412(a)(1). This would include the boundaries of a State, territory, county, and census tract. It would not, however, include census reporting areas that exist outside of the confines of a physical geographic boundary, which DHS believes is consistent with the plain language of “contiguous, and limited geographic area” at section 203(b)(5)(E)(iii) of the INA, 8 U.S.C. 1153(b)(5)(E)(iii). DHS believes this clarification is necessary as stakeholders have asked whether a regional center can connect areas that do not share a common boundary but may be economically linked; for example, the states of California and Hawaii. This clarification would preclude this situation as the economic connection required within a regional center's designated area is too attenuated where the two areas are separated by more than 2,000 miles of ocean.[83] DHS considered precluding contiguity where the areas identified are only connected by international waters. However, this definition would have precluded an entity from establishing a regional center consisting of the State of Hawaii, for instance, where clearly the economic connection between the islands of the State is not limited by the distance between each island, though they are separated by international waters. Consequently, DHS proposes using legal boundaries recognized or established by the U.S. Census Bureau, which includes states and territories.[84] DHS recognizes that this definition precludes a regional center from connecting, for example, Puerto Rico to Florida or Puerto Rico to the U.S. Virgin Islands, but believes this definition provides the greatest clarity, in alignment with the plain statutory text, to entities seeking designation as a regional center as to what USCIS would consider contiguous.

Contiguity is not the only prerequisite to determining an area of designation for a regional center. The INA requires that an entity seeking designation as a ( printed page 40716) regional center must operate “within a defined, contiguous, and limited geographic area” (emphasis added). INA sec. 203(b)(5)(E)(iii), 8 U.S.C. 1153(b)(5)(E)(iii). Therefore, the entity seeking designation would also have to establish that the geographic area of the regional center is limited. See proposed 8 CFR 204.412(a). An area would be considered limited if the regional center establishes that the proposed economic activity will have a substantive economic impact on the entirety of the proposed area. See proposed 8 CFR 204.412(a)(2). The regional center would have to include reasonable predictions, supported by economically and statistically valid and transparent forecasting tools, concerning the amount of investment that will be pooled, the kinds of commercial enterprises that will receive such investments, details of the jobs that will be created directly or indirectly as a result of such investments, and other positive economic effects the investments will have. See proposed 8 CFR 204.412(a).

To meet the requirement for an area to be limited, DHS proposes that the entity must demonstrate that its proposed economic activity will have a substantive impact on the area for which designation is sought. See proposed 8 CFR 204.412(a)(2). A regional center may establish substantive impacts by showing that the proposed economic activity would impact the area for which designation is sought through, for example, a(n):

The INA also requires an entity seeking designation as a regional center to include with its proposal a description of the policies and procedures that are in place and reasonably designed to monitor its new commercial enterprises and any associated job-creating entity, affiliated or otherwise, to ensure ongoing compliance with all applicable laws, regulations, and executive orders of the United States, including all immigration, criminal, labor and securities laws, as well as all securities laws of the State where any securities offerings will be conducted, investment advice will be given, or the offerors or offerees reside. INA secs. 203(b)(5)(E)(iii)(II) and (IV), 8 U.S.C. 1153(b)(5)(E)(iii)(II) and (IV); INA sec. 203(b)(5)(G)(i)(VII), 8 U.S.C. 1153(b)(5)(G)(i)(VII). DHS proposes that an entity seeking designation must submit evidence of these policies and procedures. See proposed 8 CFR 204.413(g).

In its 2017 ANPRM, DHS asked for public comment on monitoring and oversight requirements that should be considered for rulemaking. Specifically, DHS sought data and information on potential methods for ensuring an appropriate level of monitoring and oversight, including through regional center attestations, the submission of detailed information about the regional center's oversight efforts of its new commercial enterprises and job-creating entities, and other compliance and enforcement mechanisms. 82 FR 3211, 3215 (Jan. 11, 2017). One commenter to that ANPRM suggested that regional centers should provide a description of their monitoring and oversight mechanisms when applying for an initial designation and to attest to having fulfilled their monitoring commitments as part of an annual filing.[85] Another commenter to that ANPRM suggested that the regional center provide its written supervisory procedures when applying for initial designation that would address how the regional center would provide due diligence, fund administration, and financial reporting on each project and then certify annually that the regional center has followed its written policies and procedures with respect to each project it has sponsored for which investor funds are still invested during each calendar year.[86]

DHS appreciates the commenters' suggestions and proposes that evidence to establish sufficient oversight of the new commercial enterprises and any associated job-creating entities would include documentation of programs of internal controls by the regional center that provide regular reviews of individual projects and examination of financial records and any planned use of independent reviews by local third-party accountants or auditors. See proposed 8 CFR 204.412(b) and 204.413(h). This evidence could include standard operating procedures developed by the regional center, ongoing audits of the new commercial enterprises and any associated job-creating entities, or requiring regular reporting and updates from the new commercial enterprises and any associated job-creating entities with which the regional center is offering EB-5 investments. DHS does not want to limit how a regional center can best determine how to oversee and monitor its projects. With the increased compliance requirements specified by the INA, DHS believes there is sufficient incentive for regional centers to establish their own best practices to ensure monitoring and oversight necessary to ensure project success and a continuing designation as a regional center. DHS welcomes comments on any additional requirements that should be incorporated for a regional center to establish sufficient oversight and monitoring of its projects.

Not only would a regional center need to provide a monitoring and oversight plan as part of the designation application, as explained above, but following designation, the regional center must continue to engage in and certify compliance of its monitoring and oversight obligations for the investment offerings, business activities, and job creation of associated new commercial enterprises and job-creating entities. See proposed 8 CFR 204.418(a). This continued monitoring and oversight requirement would ensure that the regional center is continuing to perform its due diligence with respect to capital investments under its auspices and that pooled capital investments at its new commercial enterprises and job-creating entities will have a substantive economic impact.

The INA requires a regional center to file an amendment to its designation at least 120 days prior to implementing significant proposed changes to its organizational structure, ownership, or administration, including the sale of the regional center, or any other arrangement that would result in individuals not previously subject to the requirements in INA sec. 203(b)(5)(H), 8 U.S.C. 1153(b)(5)(H), becoming involved with the regional center. INA sec. 203(b)(5)(E)(vi), 8 U.S.C. 1153 203(b)(5)(E)(vi). DHS proposes incorporating these requirements into the regulation as well as clarifying that significant changes include not only the sale of the regional center but also any changes to the regional center's policies and procedures for monitoring and oversight. See proposed 8 CFR 204.416(a)(2). DHS further proposes ( printed page 40717) requiring a regional center to file an amendment if a person that held a significant role in the management and oversight of the regional center departs the regional center as well as providing information about the person that will fill the position vacated by the departure. See proposed 8 CFR 204.416(a)(3). This would generally include changes at the executive or senior management level of the regional center and not necessarily any change to lower-level employees of the regional center. To submit an amendment, the regional center would be required to submit a Form I-956, indicating that the filing is an amendment to its designation and providing all the relevant information to amend the designation. See proposed 8 CFR 204.416(b).

Prior to the RIA, a regional center was allowed, but not required, to amend its designation where: (1) there was a change to the industries of focus of the regional center; (2) the regional center sought to add a new commercial enterprise associated with the regional center or seek a preliminary determination of EB-5 compliance for an exemplar Form I-526, Immigrant Petition by Alien Investor, for investment into that new commercial enterprise, before individual investors filed their petitions; or (3) notify USCIS of changes in the name, organizational structure or administration, capital investment instruments, or offering memoranda (including changes in the economic analysis and underlying business plan used to estimate job creation) for a previously added new commercial enterprise associated with the regional center.[87] DHS proposes capturing these types of amendments on the Form I-956F, Application for Approval of an Investment in a Commercial Enterprise, or project application See proposed 8 CFR 204.423.

For more discussion on those proposals, see section IV.H.4 of this preamble.

Where a regional center is unable to submit an amendment within 120 days of a proposed change because exigent circumstances are present, the INA requires a regional center to file a required amendment within 5 business days of the change. INA sec. 203(b)(5)(E)(vi)(bb), 8 U.S.C. 1153 203(b)(5)(E)(vi)(bb). For purposes of establishing that exigent circumstances are present, DHS proposes that qualifying exigent circumstances would include significant, unanticipated disruptions to the operations of the regional center that are outside the control of the regional center making prior notice improbable or impractical. See proposed 8 CFR 204.416(b). DHS would generally consider such circumstances to include situations where, for example, an owner of the regional center dies, or there is an unexpected event, such as a natural disaster or other massive disruption, that impacts the regional center's operations. DHS recognizes that certain changes following an exigent circumstance may only be temporary in nature and that more permanent changes are likely to follow. To avoid numerous notification and amendment filings for temporary changes where exigent circumstances are present, the regional center would only have to notify USCIS within the 5 days of the exigent circumstance along with identifying information for any persons temporarily involved during such time and then file an amendment within 30 days of the change to identify any ongoing aspects of the change. See proposed 8 CFR 204.416(b). Rather than submit a full amendment with a temporary change ( i.e., lasting less than 30 days), DHS expects that a regional center would notify USCIS through its Immigrant Investor Program email address to describe the exigent circumstances and relevant changes, including providing identifying information such as name and date of birth for any persons temporarily involved with the regional center as a result of such circumstances. DHS believes 30 days in these circumstances would be sufficient time for a regional center to take commercially reasonable steps to overcome such a situation, particularly since this change has already occurred and USCIS would have to be able to ensure that the regional center is maintaining its compliance with applicable requirements under the INA.

Within 30 days of the exigent circumstance, the regional center must file an amendment reflecting all relevant aspects of the change and include the necessary attestation (Form I-956H, Bona Fides of Persons Involved with Regional Center Program) for any persons who remain involved with the regional center at such time with the amendment filing. See proposed 8 CFR 204.416(b).

Under the proposed rule, regional centers that fail to file relevant amendments would result in the regional center being in violation of applicable requirements and potentially subject the regional center to appropriate sanction. See proposed 8 CFR 204.431(b)(7)(iii). By requiring such amendments to be filed in a timely manner, DHS would better ensure compliance by regional centers, associated new commercial enterprises and job-creating entities, and investors relying on the regional center's designation. Each of these requirements is important to ensure the regional center continues to comply with the program and mitigate the potential for fraudulent activity to occur.

Under this proposed rule, an amendment filing may impact the adjudication of pending project applications and pending EB-5 immigrant visa petitions, depending on the nature of the amendment. DHS proposes to clarify that USCIS will hold the adjudication of any project application and any EB-5 immigrant visa petitions where the amendment is filed to report any change in ownership of the regional center resulting in a change in control of the regional center (including changes in ownership among existing owners) or changes in ownership that result in someone becoming involved with the regional center who was not previously subject to section 203(b)(5)(H) of the INA. See proposed 8 CFR 204.416(c)(1). The regional center would not be able to submit new project applications until USCIS has adjudicated the amendment. Id. USCIS would continue to adjudicate project applications and EB-5 immigrant visa petitions for other amendment requests, such as a request to expand the regional center's geographic area, except where information in the amendment negatively impacts program eligibility, in which case USCIS would hold adjudication of project applications and EB-5 immigrant visa petitions until the amendment is adjudicated. See proposed 8 CFR 204.416(c)(2).

Each person involved with a regional center, new commercial enterprise and affiliated job-creating entity must provide information and attest that they meet applicable requirements to be involved in the Regional Center Program. INA sec. 203(b)(5)(H)(iii)(I), 8 U.S.C. 1153(b)(5)(H)(iii)(I). A person is an individual or an organization. INA sec. 101(b)(3), 8 U.S.C. 1101(b)(3). DHS must perform background and database checks with respect to a regional center, a new commercial enterprise, any affiliated job-creating entity, and persons involved with such entities as needed to determine compliance with the RIA. INA sec. 203(b)(5)(H)(iii)(II), 8 ( printed page 40718) U.S.C. 1153(b)(5)(H)(iii)(II). In addition, DHS may require information and attestations and perform these checks for persons involved with a job-creating entity that is not an affiliated job-creating entity in its discretion if there is a reasonable basis to believe such entity or person is not in compliance with applicable requirements. INA sec. 203(b)(5)(H)(iii)(III), 8 U.S.C. 1153(b)(5)(H)(iii)(III).

To ensure sufficient information is available to conduct the necessary background checks, USCIS created Form I-956H, Bona Fides of Persons Involved with Regional Center Program, to capture all the necessary information to determine whether a person involved is prohibited from doing so by the INA. In addition, the INA authorizes USCIS to evaluate public safety and national security threats, and USCIS interprets this to permit adding information collections or modifying current information collections, as needed, to effectuate the RIA.

This proposed rule would codify the statutory requirement and post-RIA practice that an entity seeking designation as a regional center would have to include a Form I-956H with the application for designation for every person (whether an individual or organization) that is involved with the regional center. See INA sec. 203(b)(5)(E)(iii)(III), 8 U.S.C. 1153(b)(5)(E)(iii)(III); proposed 8 CFR 204.413(i) and 8 CFR 204.417(a). Failure to include a Form I-956H for every person involved with the regional center with an application for designation will result in denial of the application for designation. In addition, USCIS will deny an application for designation if any persons involved with the regional center do not meet the requirements of INA sec. 203(b)(5)(H), 8 U.S.C. 1153(b)(5)(H). See proposed 8 CFR 204.412(c).

If a designated regional center undergoes any changes that necessitate an amendment and there are new persons involved with the regional center, then those new persons would need to include Form I-956H with the I-956 amendment filing. See proposed 8 CFR 204.416(a)(2) and (3). If a regional center does not include Form I-956H for all individuals for whom the filing is required, or if the regional center knowingly involves an individual with the regional center that does not meet the requirements of section 203(b)(5)(H) of the INA, 8 U.S.C. 1153(b)(5)(H), then USCIS may deny the Form I-956 amendment and suspend or terminate the designation of the regional center. INA sec. 203(b)(5)(H)(iv), 8 U.S.C. 1153(b)(5)(H)(iv); see also proposed 8 CFR 204.431(b)(2).

Upon submission of Form I-956H and payment of the appropriate fee by an individual, USCIS schedules the individual for biometrics, either at a USCIS Application Support Center within the United States or at a facility designated to collect biometrics outside the United States. The filing of Form I-956H and submission of biometrics provides USCIS the ability to conduct background checks and ensure that all persons involved with the regional center, new commercial enterprise, or affiliated job-creating entity are complying with section 203(b)(5)(H) of the INA, 8 U.S.C. 1153(b)(5)(H). USCIS is, however, unable to collect biometrics from an organization submitting Form I-956H. In such a case, USCIS runs all the necessary checks and uses open-source information to determine whether the organization is prohibited from participating in the Regional Center Program under section 203(b)(5)(H) of the INA, 8 U.S.C. 1153(b)(5)(H). In addition, any individual within an organization involved with a regional center may also need to submit Form I-956H if that individual meets the definition of a person involved through his or her position within the organization submitting the Form I-956H.

A person is involved with a regional center if that person is, directly or indirectly, in a position of substantive authority to make operational or managerial decisions over the pooling, securitization, investment, release, acceptance, or control or use of any funding procured under the Regional Center Program. INA sec. 203(b)(5)(H)(v), 8 U.S.C. 1153(b)(5)(H)(v); see also proposed 8 CFR 204.401, Person Involved. DHS proposes to clarify that a person is in a position of substantive authority if the person serves as an administrator, a board member, a general partner, a manager, an officer, an owner, or in a similar position at the regional center, new commercial enterprise, or job-creating entity. See proposed 8 CFR 204.401, Person Involved. This definition would include any individual seeking to obtain immigrant investor status under the Regional Center Program in his or her role as an owner, including as is often the case, as a limited partner, of the new commercial enterprise. In addition, an agent, fiduciary, or representative may be in a position of substantive authority if his or her position in the regional center, new commercial enterprise, or job-creating entity authorizes him or her to provide input or oversight of the use of any regional center investor capital obtained under the Regional Center Program. See proposed 8 CFR 204.401, Person Involved. To streamline the submission of the required information from regional center investors, USCIS incorporated the questions asked on Form I-956H into Form I-526E, Petition by Regional Center Investor, so each individual regional center investor can provide responses to the necessary questions without requiring a regional center to submit an amendment every time a new regional center investor becomes involved. DHS would not expect the regional center to include a Form I-956H for any current or future regional center investors with their project application solely based on the regional center investor's investment and ownership of an associated new commercial enterprise and instead would expect each regional center investor to provide certification of his or her ability to become a person involved.

When DHS published Form I-956H,[88] many commenters suggested that this definition of a person involved, to include regional center investors, is too broad as the INA provides that a person involved is in a position of substantive authority and regional center investors, typically in the role of a limited partner, often will not meet this threshold in their view. DHS believes, however, that any owner, including a limited partner, has sufficient authority over the direction of the new commercial enterprise through his or her ability to vote or otherwise influence the new commercial enterprise such that a regional center investor would be a person involved, and therefore need to submit the required attestation of his or her eligibility to become a person involved.

Further, any person indirectly involved would also need to submit the necessary attestation. See proposed 8 CFR 204.401, Person involved,8 CFR 204.417(a). A person (whether an individual or organization) may be indirectly involved if he or she owns or manages an organization that rises to the level of a person involved. For instance, if an organization has an ownership interest in the new commercial enterprise, then the owners of that organization would meet the definition of a person involved based on their ownership interest in the organization that owns the new commercial enterprise. Consequently, each owner of an organization with an ownership ( printed page 40719) interest in the new commercial enterprise would likewise need to submit a Form I-956H.

If USCIS determines, as a result of its background checks or at any time after reviewing a submitted Form I-956H, that any person involved with the regional center, new commercial enterprise, or job-creating entity is ineligible to do so, USCIS would notify the affected entity(ies). See proposed 8 CFR 204.417(d). Upon receiving notification, the affected entity(ies) would have 14 days from the date of the notice to take commercially reasonable efforts to remove the person from his or her involvement with the affected entity(ies) and provide USCIS information on the removal of that person. See proposed 8 CFR 204.417(d). Similarly, it would be incumbent upon the regional center, new commercial enterprise, or job-creating entity to notify USCIS if they determine that any person involved is ineligible under section 203(b)(5)(H) of the INA, 8 U.S.C. 1153(b)(5)(H). If the affected entity(ies) learn of any ineligibility before receiving notification from USCIS, the entity(ies) must notify USCIS within 14 days of acquiring such knowledge and provide information about the steps being taken to remove the person from his or her involvement in the affected entity(ies). See proposed 8 CFR 204.417(c) and (d).

If there are issues with any persons involved during review of an application for regional center designation, USCIS would generally issue a Notice of Intent to Deny providing the applying entity the opportunity to remove any ineligible person in line with these provisions. See proposed 8 CFR 204.412(c) and 204.417(d). If the regional center did not take commercially reasonable efforts to remove the person from his or her involvement, then USCIS would generally deny the application for designation.

To continue participation in the Regional Center Program, regional centers must provide updated information annually to demonstrate ongoing compliance with applicable statutory requirements. INA sec. 203(b)(5)(G), 8 U.S.C. 1153(b)(5)(G). The annual statement must include, among other things, certifications (completed by an individual that meets the definition of a certifier as discussed in Section IV.B. of this preamble) that the regional center remains in compliance with various provisions of the Regional Center Program, including those provisions covering bona fides of persons involved and the use of promoters. Id. Under this proposed rule, a designated regional center would be required to file Form I-956G, Regional Center Annual Statement, with USCIS according to the form instructions. See proposed 8 CFR 204.418(a). Prior to the RIA, a designated regional center had to submit Form I-924A, Annual Certification of Regional Center, on or before December 29 of the calendar year in which the Federal fiscal year ended. When USCIS created Form I-956G, it maintained this filing window. See Form I-956G Instructions. Therefore, any regional center designated on or before September 30 of any given year, the end of the Federal fiscal year, must submit Form I-956G on or before December 29 of the same calendar year. Conversely, any regional center designated on or after October 1, the start of the Federal fiscal year, does not have to submit an annual statement until on or before December 29 of the following calendar year.

USCIS incorporated the required certifications on the Form I-956G. See Part 4 of Form I-956G. This proposed rule would codify the requirements on the post-RIA annual statement and also include certification that the regional center is in compliance with its ongoing obligation to monitor and oversee its associated new commercial enterprises and job-creating entities. See proposed 8 CFR 204.418(a). Specifically, in addition to providing such certifications, the regional center would have to submit documentation with its annual statement providing an accounting of all individual regional center investor capital invested in the regional center, new commercial enterprises, and job-creating entities. [89] See proposed 8 CFR 204.418(b)(1). Additionally, for each new commercial enterprise with investors who have a pending and approved EB-5 immigrant visa petition or who have obtained conditional permanent resident status but not yet filed a petition to remove conditions, the regional center would be required to submit an accounting of all individual regional center investor capital invested in those new commercial enterprises, an accounting of the aggregate jobs created or preserved,[90] detailed evidence of the progress made toward completion of each capital investment project, and the reporting of any changes to documents submitted for any ongoing capital investment project that do not otherwise require an amendment to the project application under proposed 8 CFR 204.423. See proposed 8 CFR 204.418(b)(3). Once a project concludes and the new commercial enterprise no longer has any active immigrant investors, meaning the immigrant investors in the project have all submitted their petition to remove conditions, the regional center would no longer have to submit information about that new commercial enterprise, unless it recruits new immigrant investors in the future that file an EB-5 immigrant visa petition that triggers reporting requirements under proposed 8 CFR 204.418(b)(3). However, the conclusion of a project would not absolve a regional center from being required to submit the rest of the documentation for any ongoing new commercial enterprises or for the regional center itself, as long as the regional center seeks to maintain its designation. A regional center that does not submit Form I-956G would be subject to termination of its designation. See proposed 8 CFR 204.431(b)(7)(iv).

Also under this proposed rule, USCIS would be able to require a regional center to submit any additional information to support its annual statement if USCIS determines the regional center's annual statement is insufficient. See proposed 8 CFR 204.418(c). A regional center's annual statement may be insufficient if the documentation provided omits any relevant information about the ongoing progress of any capital investment project under the purview of the regional center or where USCIS determines additional information is necessary to support the certifications made by the regional center. If a designated regional center does not submit an annual statement in any year or is otherwise not complying with the requirements to retain its designation, USCIS would be able to sanction the regional center under proposed 8 CFR 204.431, which could include termination of the regional center's designation.

Under the previously authorized Regional Center Program, a regional ( printed page 40720) center could submit an exemplar Form I-526 with its Form I-924 designation or amendment request to obtain approval of certain aspects of an investment project for the limited purpose of providing deference in associated adjudications. If approved, the documents provided to comply with job creation and investment eligibility requirements were accorded deference in subsequent, related Form I-526 and Form I-829 filings, absent material change, fraud, willful misrepresentation, or a determination of legal deficiency.

Under the INA, as amended by the RIA, a designated regional center must submit a project application for each particular investment offering through an associated new commercial enterprise before any regional center investor can file his or her individual petition. INA sec. 203(b)(5)(F), 8 U.S.C. 1153(b)(5)(F). If approved, the evidence submitted with the project application is then incorporated by reference into the EB-5 immigrant visa petition for regional center investors in that particular offering, alleviating the need for each individual regional center investor in that particular offering to submit the same documentation to USCIS already submitted with the project application. INA sec. 203(b)(5)(F)(ii), 8 U.S.C. 1153(b)(5)(F)(ii).

As part of the implementation of the RIA, USCIS created Form I-956F, Application for Approval of Investment in a Commercial Enterprise (project application), on June 1, 2022. Under this proposed rule, a designated regional center, including those designated before the RIA that will continue to seek regional center investors on or after May 14, 2022, would have to submit a project application for each particular investment offering under the regional center's purview. See proposed 8 CFR 204.419. Each project application may only contain one new commercial enterprise, which may then involve multiple job-creating entities to which the new commercial enterprise will provide the regional center investors' capital. Under proposed 8 CFR 204.420, the regional center would have to establish that:

1. The project is realistic and credible;

2. The investment offering and project are compliant with applicable eligibility requirements for classification of regional center investors (including investment of the required amount of capital and sufficient job creation for all regional center investors in the project);

3. The project will be monitored and overseen by the regional center for compliance with applicable immigration and Federal and State securities laws;

4. All persons involved with the new commercial enterprise and job-creating entities are not precluded from being involved under section 203(b)(5)(H) of the INA, 8 U.S.C. 1153(b)(5)(H); and

5. The new commercial enterprise or affiliated job-creating entity or both have established a separate account and retained a fund administrator as required by proposed 8 CFR 204.425.

Regardless of the type of project submitted by the regional center, the regional center would have to submit evidence that the new commercial enterprise is established in the United States, which must include, as appropriate, complete formation documents, such as articles of incorporation, organization, association, certificate of merger or consolidation or other similar formation documents, together with all amendments to such documents; complete copies of all other organizational documents, such as a partnership agreement, operating agreement, bylaws, or other similar organization documents for the new commercial enterprise, together with all amendments to such documents; and certificates evidencing the new commercial enterprise's authority to do business in the State, municipality, or other applicable jurisdiction of the United States in which the new commercial enterprise has created or is seeking to create jobs. See proposed 8 CFR 204.421(a). DHS would expect the regional center to submit documentation of the new commercial enterprise's authority to do business in any location where the new commercial enterprise is principally doing business under proposed 8 CFR 204.401, Principally doing business.

Under the proposed rule, the regional center would also have to submit evidence of sufficient job creation for each regional center investor that will be investing in the new commercial enterprise. This would typically be provided in an EIA showing that the project will create full-time employment for at least 10 qualifying employees per regional center investor within the timeline identified in the comprehensive business plan. See proposed 8 CFR 204.421(b). Since regional center investors may rely on indirect job creation to establish up to 90 percent of the requirement and may rely on economic models to establish the remaining 10 percent of direct job creation, DHS proposes requiring a regional center to rely on an economically and statistically valid and transparent methodology in which model outputs are reproducible and all the inputs and any adjustments to the model are fully explained in the project application. Id. While DHS currently expects regional centers to submit the Bureau of Economic Analysis' Regional Input-Output Modeling System to establish job creation, DHS proposes this language to allow a regional center to submit other economic methodologies that may work better for the regional center, because, for example, the job estimates are based on a tenant occupancy methodology. USCIS, however, must be able to independently verify the inputs and outputs to the model, while also accounting for any new or modified economic models that may be developed in the future that might also meet the “economically and statistically valid and transparent” requirements.

The location where the new commercial enterprise is principally doing business would determine the level of investment required by regional center investors in the new commercial enterprise. If the new commercial enterprise identified in the project application is principally doing business in a high unemployment area, the regional center would have to submit a list of the census tracts comprising the proposed project area and the unemployment statistics for that area, along with the methods by which the unemployment statistics were obtained, as well as the national unemployment rate used to calculate whether the area meets the definition of a high unemployment area. See proposed 8 CFR 204.421(c)(2); see also proposed 8 CFR 204.402. Similarly, if the new commercial enterprise identified in the project application is principally doing business in a rural area, the regional center would have to submit a map of the area where the new commercial enterprise will principally be doing business, including the population counts of that area to establish that the area meets the definition of a rural area. See proposed 8 CFR 204.421(c)(1); see also proposed 8 CFR 204.401, Rural area. For projects where the regional center is offering an investment opportunity in an infrastructure project, the regional center would have to submit evidence of a contract with a Federal, State, local, or tribal agency or authority to provide investment capital to a public works project. See proposed 8 CFR 204.421(c)(3).

The regional center would also have to retain a copy of any agreements between any investor in the new commercial enterprise and the regional center or its related entities, or agreements between the regional center ( printed page 40721) and its related entities that relate to the transfer of any capital described in the project application, including, but not limited to, offering memoranda, subscription agreements, escrow agreements, organizational documents, term sheets, side letters, documentation of oral agreements, and any other marketing materials used or to be used in connection with the offering, including the identification of any social media outlets that are or will be used to market or promote the EB-5 immigrant visa program. See proposed 8 CFR 204.421(d). DHS proposes this provision for the regional center to retain such information for submission in connection with a USCIS audit and to provide evidence of any potential conflicts of interest that may exist between the regional center and its associated entities, particularly as related to the transfer and use of regional center investor capital.

The INA precludes the use of immigrant investor capital to purchase municipal, or any other bonds, if they are available to the general public, either as part of a primary offering or from a secondary market. INA sec. 203(b)(5)(E)(v)(II)(bb), 8 U.S.C. 1153(b)(5)(E)(v)(II)(bb). DHS proposes to clarify that this prohibition applies to an initial investment, capital held in escrow, use of capital, redeployment of capital, and any ongoing use of capital to retain the capital at risk. See proposed 8 CFR 204.427.

The regional center would also have to submit attestations and information from persons involved with the new commercial enterprise and affiliated job-creating entities as required by proposed 8 CFR 204.417(a). See proposed 8 CFR 204.421(e).

The application would also have to include evidence to show that the separate account required under proposed 8 CFR 204.425 has been established by the new commercial enterprise or affiliated job-creating entity and an appropriate fund administrator has been retained, including bank statements for such accounts. See proposed 8 CFR 204.421(f).

Lastly, the regional center would need to provide additional information, either as additional documentation or included within documents submitted to establish the requirements above. See proposed 8 CFR 204.421(g). DHS proposes that this list of required additional information and documentation include biographies for management, officers, directors, and any person with similar responsibilities at the new commercial enterprise and job-creating entity(ies); risks associated with the investment; any investment and offering documents provided to potential investors; any documents related to the investment filed with the Securities and Exchange Commission (SEC) or securities regulator of any State; conflicts of interest that currently exist or may arise; and any pending investigations, litigation, bankruptcy, or adverse judgments or bankruptcy orders issued during the most recent 10-year period, in the United States or abroad, involving the regional center, new commercial enterprise, or job-creating entity(ies), or its owners, officers, managers, directors, or other persons acting in a similar capacity, or any other enterprise in which such persons held majority ownership. Id. DHS believes this information and documentation captures all the requirements identified by the RIA for a regional center's project application to be used as an investment offering for regional center investors. See, e.g., INA sec. 203(b)(5)(F)(i)(III) and (IV), 8 U.S.C. 1153(b)(5)(F)(i)(III) and (IV).

Once a regional center establishes that its investment offering meets the requirements and provides all the required documentation to USCIS, USCIS would approve the application. If approved, the elements of the project application related to the regional center's investment offering, including sufficient job creation and minimum amount to be invested (where the investment offering is in a TEA or infrastructure project), will be incorporated by reference into the adjudication of the EB-5 immigrant visa petition of a regional center investor that has provided evidence of association with the regional center's project application, meaning the regional center investor will not separately have to submit the same project-level documentation already provided and reviewed with the project application. INA sec. 203(b)(5)(F)(ii), 8 U.S.C. 1153(b)(5)(F)(ii). See proposed 8 CFR 204.408(a). If USCIS denies the project application, then USCIS would provide a notice explaining the reasons for the decision and providing the regional center information on its right to appeal. See proposed 8 CFR 204.422.

If approved, there are certain circumstances in which a regional center must submit an amendment to its project application. See proposed 8 CFR 204.423(b) and (c). DHS proposes requiring a regional center to submit an amendment to its project application within at least 90 days prior to the first regional center investor in that particular investment offering becoming eligible to file a petition to remove conditions. See proposed 8 CFR 204.423(b)(1). As part of that amendment filing, the regional center would have to submit the following updated documents: business plan, EIA, and reasonable and transparent methodologies to establish sufficient job creation for the regional center investors in that investment offering. See proposed 8 CFR 204.423(b)(2). A regional center investor would then be able to rely on the project application amendment's approval to establish that his or her investment created enough jobs to establish eligibility to remove the conditions on his or her residence under proposed 8 CFR 216.6(e)(2)(ii). See proposed 8 CFR 204.423(e)(4). If the regional center does not submit a project application amendment as required, USCIS would be able to sanction the regional center for failing to file a required amendment. See proposed 8 CFR 204.431(b)(7)(iii).

In addition, DHS proposes that a regional center must amend its project application within 30 days of the change where there may be an impact to the eligibility of any regional center investors that have already filed their EB-5 immigrant visa petition, as well as any regional center investors that may seek to file an EB-5 immigrant visa petition based on the particular investment offering identified in the project application. See proposed 8 CFR 204.423(c). Where the regional center would have to file an amendment due to a change in ownership or location of the new commercial enterprise or job-creating entity(ies), USCIS would hold adjudication of all associated EB-5 immigrant visa petitions until USCIS adjudicates the amendment because the nature of the change must be reviewed to determine the ongoing eligibility of regional center investors in the project. See proposed 8 CFR 204.423(e)(2). Other changes necessitating an amendment would not necessarily require USCIS to hold adjudication of the associated EB-5 immigrant visa petitions, unless review of the amendment would lead USCIS to determine that there is a negative impact on the associated EB-5 immigrant visa petitions. See proposed 8 CFR 204.423(e)(3).

DHS also proposes that a regional center would have to file an amendment if there are changes to the expenditure of capital or capital structure reflected in any business plan submitted in connection with the previously approved project application in response to or otherwise materially impacting the credibility or viability of such plans or successful execution of projects that in turn could adversely ( printed page 40722) impact eligibility for associated investors, including, but not limited to, payments to parties related to the business plan and the loss of financing or addition of outside financing from sources not previously identified in the approved project application or otherwise obtained from any source other than a federally regulated bank or other financial institution (as defined in 18 U.S.C. 20). See proposed 8 CFR 204.423(c)(5). DHS intends that this would primarily affect regional centers making a change that impacts the number of jobs reflected in the approved project application. For example, an amendment would be required when there is a reduction in expenditures that decreases the number of jobs created, but would not be required for an increase of an existing commercial loan that may create additional jobs that are unnecessary for investor eligibility. An amendment would also be required to identify new sources of funding that may be non-traditional or less regulated, such as a new equity investment from a previously unaffiliated individual or business.

Once approved, a high unemployment area designation is initially valid for two years from the date on which the project application is filed. INA sec. 203(b)(5)(B)(ii)(IV)(aa)(AA), 8 U.S.C. 1153(b)(5)(B)(ii)(IV)(aa)(AA). As discussed in section IV.E of this preamble, once USCIS approves the high unemployment area designation, USCIS would extend the initial designation for 2 years from the date of the approval notice. See proposed 8 CFR 204.402(e)(1). In addition to certain changes that take place in the due course of business, DHS proposes that a regional center would have to amend its project application to seek an extension of a high unemployment area designation if the regional center continues to seek investors in the project after the initial designation of a high unemployment area is otherwise due to expire. See proposed 8 CFR 204.423(c)(6). DHS expects that certain projects will extend well beyond 2 years from the date the regional center submits its project application and beyond the project approval which extends the high unemployment area designation two years from that date, necessitating an extension of the high unemployment area designation. For projects that seek new investors after the initial high unemployment area designation period (as extended by the project approval), DHS would also expect that there may be additional changes to the project application that a regional center should submit for USCIS review. Consequently, DHS proposes that a regional center may seek to extend a high unemployment designation by submitting an amendment to its project application to establish the area continues to meet the requirements of a high unemployment area. Importantly, regional center investors that provided the full amount of capital to the new commercial enterprise that was subsequently provided to the job-creating entity before the high unemployment area designation expires do not have to make any additional investments if the area no longer qualifies as a high unemployment area. See proposed 8 CFR 204.402(g). However, if the regional center investor did not provide the full amount of capital to the new commercial enterprise that was subsequently provided to the job-creating entity before the initial high unemployment designation will otherwise expire may be required to increase his or her investment if the area no longer qualifies as a high unemployment area. Id.

In order to discourage skeletal, hypothetical or otherwise ineligible filings that are not filed in good faith (for example, amendments filed solely to meet applicable deadlines or initial applications that are purely hypothetical with no intention to undertake the actual project filed solely to permit the filing of associated investor petitions), any amendment to a project application (including the initial filing) must be submitted in good faith. See proposed 8 CFR 204.423(d). In determining whether a project application or amendment was submitted in good faith, USCIS would examine both the subjective intent of the applicant to undertake the project and whether objectively the applicant had a realistic prospect of undertaking the project. See59 FR 1318 (Jan. 10, 1994). A regional center that files an amendment must also notify any investors who have filed an immigrant visa petition associated with the particular investment offering of the change. See proposed 8 CFR 204.423(a).

Under the proposed rule, once a designated regional center has filed a project application, a regional center investor investing in that particular offering would be able to submit his or her Form I-526E. To be considered properly filed, a regional center investor would have to submit evidence of association with a regional center's pending or approved project application with his or her Form I-526E. See proposed 8 CFR 204.404(b). Such evidence could include a copy of the Form I-956F receipt notice issued to the regional center or evidence the regional center submitted Form I-956F to USCIS. To otherwise establish his or her eligibility, a regional center investor would also have to submit sufficient documentation to establish that he or she has invested the required amount of capital, and that the capital used for the investment is lawful. See proposed 8 CFR 204.408(b) and (c). Whereas each individual regional center investor previously had to submit project documentation, even where the regional center submitted an exemplar Form I-526 with a Form I-924 application for initial designation or amendment, USCIS would now review those documents as part of the Form I-956F project application adjudication. The regional center investor would have to attest to being subject to those agreements included with the project application by signing a statement on the Form I-526E that incorporates all the project documentation provided by the regional center by reference into the petitioner's Form I-526E, but would not otherwise be expected to provide the documentation submitted in support of the project application that establishes those elements of the regional center investor's eligibility. See proposed 8 CFR 204.404(b).

DHS proposes that USCIS would have certain reasons to revoke the approval of a project application, including the denial of an amendment to an approved project application, the regional center's failure to submit a required amendment to an approved project application, the discovery of any evidence affecting program eligibility not disclosed by the regional center, or a material mistake of law or fact in the adjudication of the project application. See proposed 8 CFR 204.424(a). USCIS would provide a notice of its intent to revoke the approval for any of these stated reasons. See proposed 8 CFR 204.424(b). Within 30 days of the issuance of a notice of the revocation of the approval of a project application, a regional center may file an appeal with the Administrative Appeals Office under part 103 of this chapter. USCIS would hold the adjudication of any associated EB-5 immigrant visa petitions until the revocation decision is finalized and, if the approval of the project application is revoked, USCIS will notify associated investors as and in a manner USCIS determines to be appropriate. Id. DHS believes these provisions are necessary to provide USCIS the ability to correct ( printed page 40723) an error or hold the regional center to account for not continuing to keep USCIS updated on its project's ongoing eligibility.

Additionally, under this proposed rule, the termination of the regional center's participation in the Regional Center Program results in the automatic revocation of a project application upon the adjudication of any appeal of the termination or, if no appeal is filed, the expiration of the appellate period. See proposed 8 CFR 204.424(c). Automatic revocations would not be appealable under section 203(b)(5)(P) of the INA, 8 U.S.C. 1153(b)(5)(P), because DHS believes that it is not a distinct determination separate from the determination resulting in automatic revocation (termination of the regional center), which would be separately appealable. Any new commercial enterprise previously covered by a project application submitted by a regional center that has since been terminated may be able to reassociate itself with another designated regional center. Id. To associate with another regional center, the new regional center would have to submit a project application on behalf of the new commercial enterprise, indicating its sponsorship of that particular investment offering and its plan to conduct monitoring and oversight of the new commercial enterprise. Affected regional center investors would retain their eligibility if the new commercial enterprise associates with another designated regional center and they file an amendment to their EB-5 immigrant visa petition within 180 days of notice of the termination. See proposed 8 CFR 204.424(c) and 8 CFR 204.410(c). Alternatively, the regional center investor would also be able to make a new investment in another new commercial enterprise participating in the Regional Center Program within 180 days of notification of the revocation. See proposed 8 CFR 204.410(c). Any regional center investor whose new commercial enterprise does not associate with another designated regional center or otherwise takes no action to make another investment would have his or her EB-5 immigrant visa petition denied, or revoked if the petition was previously approved, except that the investor may continue to be eligible notwithstanding the revocation of the project application approval where sufficient jobs were already created and the investor's capital was invested for at least 2 years under applicable requirements before the revocation. See proposed 8 CFR 204.424(d). No EB-5 immigrant visa petition may rely on a revoked project application to establish eligibility. Id.

DHS proposes that USCIS may deny any project application that does not establish eligibility under proposed 8 CFR 204.420 or does not include the evidence required under proposed 8 CFR 204.421. USCIS would notify the regional center in writing of the denial decision and specify the reasons for the denial in compliance with 8 CFR 103.3(a)(1)(i). The regional center may appeal the denial to the Administrative Appeals Office according to 8 CFR 103.3. See proposed 8 CFR 204.422(a). USCIS would hold the adjudication of any associated EB-5 immigrant visa petitions until the denial decision is finalized. See proposed 8 CFR 204.422(b). As proposed, once the denial decision is finalized, a regional center investor will not be able to rely on the denied project application to demonstrate eligibility and any pending visa petitions associated with the denied project application will be denied. Id.

Current regulations do not address the situation of a new commercial enterprise completing its project and returning the investor's capital before the end of the period during which the investor is required to maintain the investment at risk. USCIS previously addressed the requirements for the investor to maintain eligibility in these circumstances through the USCIS Policy Manual. See USCIS Policy Manual, Volume 6, Part G, Chapter 2.A(2), “Investment,” (July 22, 2021, historical version).[91]

The RIA specifically directs USCIS to prescribe regulations to implement certain statutory parameters for redeployment of investor capital by the new commercial enterprise. INA sec. 203(b)(5)(F)(v), 8 U.S.C. 1153(b)(5)(F)(v). Those parameters state that the new commercial enterprise will be allowed to redeploy investment funds anywhere within the United States or its territories for the purpose of maintaining the investors' capital at risk if:

1. The new commercial enterprise has executed the business plan for a capital investment project in good faith without a material change;

2. The new commercial enterprise has created a sufficient number of new full-time positions to satisfy the job creation requirements of the program for all investors in the new commercial enterprise;

3. The job-creating entity has repaid the capital initially deployed in conformity with the initial investment contemplated by the business plan; and

4. The capital, after repayment by the job-creating entity, remains at risk and it is not redeployed in passive investments, such as stocks or bonds. INA sec. 203(b)(5)(F)(v), 8 U.S.C. 1153(b)(5)(F)(v). See also proposed 8 CFR 204.426(a).

USCIS must terminate a regional center if one of its associated new commercial enterprises violates any of the statutory requirements regarding the redeployment of investor funds. INA sec. 203(b)(5)(F)(v), 8 U.S.C. 1153(b)(5)(F)(v). See also proposed 8 CFR 204.426(c).

DHS proposes to implement these statutory parameters for redeployment of investor capital by the new commercial enterprise in this rule. See proposed 8 CFR 204.426. DHS proposes to clarify that the execution of the business plan for a capital investment project in good faith includes properly filing and receiving approval for amendments, and that repayment of the initial investment by the job-creating entity can likewise be changed from that contemplated by the business plan by a properly filed and approved amendment. See proposed 8 CFR 204.426(a). DHS further proposes that any redeployment of investor capital must be made within 3 months of the return of the capital to the new commercial enterprise, except that USCIS will consider evidence showing that a longer period was reasonable for a specific type of commercial enterprise or into a specific commercial activity under the totality of the circumstances. See proposed 8 CFR 204.426(b). DHS believes that this period of time provides sufficient flexibility for a new commercial enterprise to identify and execute an investment for the redeployment of investor capital while maintaining the intent of the statute that the investment remains at risk for at least two years. For purposes of the statutory restriction on passive investments, such as stocks and bonds, DHS proposes to codify the statutory prohibition, and align it with existing practice to clarify that this applies to all secondary market securities and to primary market securities that are unrelated to use in any commercial activity ( i.e., where the purchase of ( printed page 40724) securities is primarily financial rather than commercial in nature).

USCIS will terminate a regional center's designation and may debar or otherwise sanction the new commercial enterprise from participation in the Regional Center Program under proposed 8 CFR 204.431 if the new commercial enterprise does not comply with the parameters of redeployment provided in 8 CFR 204.426. See proposed 8 CFR 204.426(c).

The INA requires any direct or third-party promoter of a regional center, new commercial enterprise, affiliated job-creating entity, or issuer of securities intended to be offered to immigrant investors in connection with a particular capital investment project to register his or her participation as a promoter with USCIS. INA sec. 203(b)(5)(K), 8 U.S.C. 1153(b)(5)(K). This proposed rule would codify the registration requirements and process. See proposed 8 CFR 204.428.

Every promoter must register his or her participation in the Regional Center Program with USCIS. INA sec. 203(b)(5)(K), 8 U.S.C. 1153(b)(5)(K); see also proposed 8 CFR 204.428(a). If the promoter is an entity, then all promoters working for that entity in a role that meets the definition of promoter described in proposed 8 CFR 204.401 would also have to submit Form I-956K to USCIS. Conversely, employees of an organization required to register with USCIS who are not involved in the actual promotion of a particular investment offering would not be required to submit Form I-956K. This would include, for example, administrative staff of the organization.

USCIS published Form I-956K, Registration for Direct and Third-Party Promoters, to allow promoters participating in the Regional Center Program to provide all the necessary information to USCIS. Similar to current practice, under the proposed rule, with his or her form, a promoter would have to include identifying information, including providing biometrics, if applicable, for USCIS to properly confirm the identity of the registrant, provide certifications that he or she is eligible to participate in the Regional Center Program under section 203(b)(5)(H) of INA, 8 U.S.C. 1153(b)(5)(H); certify his or her familiarity with the rules and standards for registration; and confirm the existence of a written agreement for each entity with which the promoter has entered into agreement and include a copy of the written agreement(s) with his or her registration. See proposed 8 CFR 204.428(b). If the promoter is an organization and all employees of that organization are covered by the written agreements provided with the Form I-956K, those employees would not have to submit a copy of the same written agreements, provided the organization already provided a copy of any such written agreements to USCIS with its Form I-956K. See proposed 8 CFR 204.428(f). Further, each promoter must provide a copy of the relevant written agreement to any regional center investors it seeks for investment in the particular investment offering. The written agreement would have to provide a full disclosure of any fees, ongoing interest, and other compensation that have been, or will be, received by a promoter in connection with an investment in an offering under the Regional Center Program. See proposed 8 CFR 204.428(d)(1). Regional center investors must certify on their Form I-526E that they received a copy of the written agreement.

Each promoter would also have to certify on his or her Form I-956K that he or she is familiar with and will accurately represent the Regional Center Program and the U.S. immigrant visa process to prospective investors. See proposed 8 CFR 204.428(c). DHS considered requiring promoters to complete a testing requirement to establish that they sufficiently understand the Regional Center Program and the U.S. immigrant visa process. However, DHS believes the administration of any such requirement would not be practical for the proper administration of the promoter registration process. Rather, DHS is proposing to require the promoter to certify his or her own knowledge and to utilize its authority under the INA to suspend or bar a promoter from participating in the Regional Center Program if he or she is not providing accurate information to immigrant investors. See proposed 8 CFR 204.428(c) and (g). The certification requirement would include providing investors with accurate information about the steps involved in obtaining an immigrant visa or permanent resident status, including the length of time the process may take, to the best of the promoter's knowledge based on information made publicly available by USCIS and State. 92 See proposed 8 CFR 204.428(c).

Additionally, the promoter would not be able to use manipulative, deceptive, or fraudulent claims in any promotional materials, which could include false or materially misleading statements, failing to discuss any material factors that make the offering speculative or risky, providing predictions of financial or immigration success, or stating that USCIS or any U.S. Government agency has reviewed or approved an offering's calculations or performance results. See proposed 8 CFR 204.428(e)(1). A promoter, or his or her promotional materials, would be able to state generally that a project application submitted by the regional center is approved, where the regional center has received an approval notice from USCIS. See proposed 8 CFR 204.428(e)(1)(v). Under this proposed rule, it would be the promoter's responsibility to ensure that any promotional materials used do not contain any manipulative, deceptive, or fraudulent claims and comply with all applicable immigration and securities laws. See proposed 8 CFR 204.428(e)(3). In addition, the promoter would have to retain all promotional materials, and provide them to USCIS upon request, including a translation when necessary. See proposed 8 CFR 204.428(e)(4). And the promoter must comply with all applicable Federal and State securities laws. See proposed 8 CFR 204.428(e)(5).

When a promoter files Form I-956K, USCIS would issue a receipt notice to the promoter indicating the promoter properly filed Form I-956K. After performing certain background checks to verify compliance with program requirements, USCIS would then issue the promoter a notice of registration. Alternatively, if USCIS finds that the Form I-956K does not meet program requirements (such as by not acknowledging a written agreement), USCIS would generally first issue a notice of non-registration and provide the promoter an opportunity to respond before issuing a final notice of non-registration. See proposed 8 CFR 204.428(a).

( printed page 40725)

Under this proposed rule, USCIS would generally accept the Form I-956K, except where the promoter is suspended or permanently barred [93] from participation in the Regional Center Program or the form otherwise does not meet filing requirements, such as missing name and/or contact information of the promoter or missing or unsigned certifications. As such, a promoter can begin promoting under the Regional Center Program once he or she submits Form I-956K. Id. However, if a promoter receives a final notice of non-registration, then that promoter must cease any promotion activities of the EB-5 program. Once a promoter completes the registration process, the registration would remain in place until such time as the promoter seeks to withdraw his or her registration or USCIS suspends or bars the promoter from participating in the Regional Center Program. See proposed 8 CFR 204.428(g); see also8 CFR 204.431(b)(10). DHS proposes reasons that USCIS may seek to suspend or bar a promoter, including any failure to follow the rules and standards for promoters and violations of any applicable Federal and State securities laws. Id. If USCIS determines a promoter should be suspended or barred from participation in the Regional Center Program, USCIS would send a notice to the promoter explaining the reasons for the suspension or bar. See proposed 8 CFR 204.428(g), 8 CFR 204.431(b)(10), (e) and (h). The promoter would generally have an opportunity to rebut the reasons provided. Id. A suspension would not necessarily preclude a promoter's future involvement in the Regional Center Program. See proposed 8 CFR 204.431(d)(3)(iv). However, if USCIS permanently bars a promoter's participation, the promoter would not be able to participate in the Regional Center Program again. See proposed 8 CFR 204.431(d)(5)(i).

A promoter's suspension or debarment may also impact the regional center, new commercial enterprise, or affiliated job-creating entity that utilized the promoter, if any of those entities knowingly associated with a promoter that does not meet the requirements to be a promoter or does not take any action to discontinue use of a suspended or barred promoter within 14 days of learning of the suspension or bar. See proposed 8 CFR 204.428(g)(3). If USCIS suspends or bars a promoter from participation in the Regional Center Program and USCIS can determine from its records those entities that used that promoter, USCIS may notify the affected entities of the promoter's suspension or bar. Id.

DHS welcomes public comment on the registration process for direct and third-party promoters. DHS also welcomes comment on the standards that may be considered for registration, suspension of a promoter and debarment of a promoter, including alternative suggestions to those standards.

The INA requires each new commercial enterprise and affiliated job-creating entity to keep funds received from immigrant investors in a separate account that may only be used to receive and deploy capital for use in the capital investment project or to return capital to an immigrant investor that provided it. INA sec. 203(b)(5)(Q), 8 U.S.C. 1153(b)(5)(Q). The new commercial enterprise or affiliated job-creating entity must also use a fund administrator that meets certain requirements to oversee and track any transfer of EB-5 investor capital to and from the separate account. INA sec. 203(b)(5)(Q)(iv), 8 U.S.C. 1153(b)(5)(Q)(iv). DHS may waive this requirement if the new commercial enterprise or affiliated job-creating entity is controlled by or under common control of an investment adviser or broker-dealer that is registered with the Securities and Exchange Commission if, in DHS's discretion, the SEC provides comparable protections and transparency for immigrant investors as that required by section 203(b)(5)(Q)(iv) of the INA. INA sec. 203(b)(5)(Q)(v)(I), 8 U.S.C. 1153(b)(5)(Q)(v)(I). Further, DHS must waive the requirement for any new commercial enterprise or affiliated job-creating entity that commissions an annual independent financial audit of such new commercial enterprise or job-creating entity and provides the audit to USCIS, as well as all investors in the new commercial enterprise. INA sec. 203(b)(5)(Q)(v)(II), 8 U.S.C. 1153(b)(5)(Q)(v)(II). DHS proposes to incorporate these provisions into the regulations. See proposed 8 CFR 204.425.

For the mandatory waiver of the fund administrator requirement under section 203(b)(5)(Q)(v)(II) of the INA, 8 U.S.C. 1153(b)(5)(Q)(v)(II), DHS proposes to clarify that the annual independent audit would have to cover the new commercial enterprise and any job-creating entity to which the new commercial enterprise has disbursed investment funds received from regional center investors. See proposed 8 CFR 204.425(b). For the discretionary waiver available under section 203(b)(5)(Q)(v)(I) of the INA, DHS proposes that a regional center may request such a waiver when it files the project application for the new commercial enterprise seeking such a waiver, or by submitting an amendment to a previous project application seeking a waiver of the fund administrator requirement. See proposed 8 CFR 204.425(c). In either case, the fund administrator requirement would only impact new commercial enterprises participating in the Regional Center Program. See proposed 8 CFR 204.425(a).

Whether a new commercial enterprise employs a fund administrator or obtains a waiver of such requirement, the new commercial enterprise may only use regional center investor capital in certain manners. INA sec. 203(b)(5)(Q)(ii), 8 U.S.C. 1153(b)(5)(Q)(ii). DHS proposes to capture these disbursement requirements in this rule. See proposed 8 CFR 204.425(d).

Various provisions of the INA provide DHS the authority to sanction or take other actions against a designated regional center, its new commercial enterprises, its job-creating entities, affiliated or otherwise, and issuers of securities offered or intended to be offered to regional center investors. See INA sec. 203(b)(5)(E)(vii)(III), 8 U.S.C. 1153(b)(5)(E)(vii)(III), INA sec. 203(b)(5)(F)(v)(II), 8 U.S.C. 1153(b)(5)(F)(v)(II), INA sec. 203(b)(5)(G)(iii), 8 U.S.C. 1153(b)(5)(G)(iii), INA sec. 203(b)(5)(H)(iv), 8 U.S.C. 1153(b)(5)(H)(iv), INA sec. 203(b)(5)(I)(iv), 8 U.S.C. 1153(b)(5)(I)(iv) and INA sec. 203(b)(5)(J)(iv), 8 U.S.C. 1153(b)(5)(J)(iv). Other provisions provide DHS the authority to suspend or bar the participation of such entities or other individuals participating in the Regional Center Program, such as promoters of such entities. See INA sec. 203(b)(5)(K)(ii), 8 U.S.C. 1153(b)(5)(K)(ii), INA sec. 203(b)(5)(N), 8 U.S.C. 1153(b)(5)(N), and INA sec. 203(b)(5)(O), 8 U.S.C. 1153(b)(5)(O). For ease of reference and application, DHS proposes to consolidate these statutory sanction provisions into proposed 8 CFR 204.431. Specifically, DHS proposes regulatory provisions providing for the imposition of various ( printed page 40726) sanctions, including suspensions, terminations, and debarments, against a regional center, new commercial enterprise, job-creating entity, issuer of securities offered or intended to be offered to investors seeking classification under section 203(b)(5) of the INA and associated parties, including owners, promoters and others involved with such entities for violations. See proposed 8 CFR 204.431. DHS proposes a list of violations that would warrant sanctions or other authorized actions. See proposed 8 CFR 204.431(b).

The INA directs DHS to establish a graduated set of sanctions based on the severity of the violation for regional centers and certain associated parties that includes fines, suspension, debarment and termination. INA sec. 203(b)(5)(G)(iii), 8 U.S.C. 1153(b)(5)(G)(iii). Therefore, DHS proposes that sanctions would be issued based on the severity of the violations of the INA and could include:

1. A Finding of Violation Notice that will provide notification of a violation of law or regulation, such as a cease-and-desist letter, and be included in the relevant USCIS record of proceeding;

2. Monetary penalties equal to not more than 10 percent of the total capital invested by immigrant investors in the regional center's new commercial enterprises or job-creating entities directly involved in such violations;

3. Suspension from participation in the EB-5 program, which may be in whole or in part;

4. Termination of a regional center's designation;

5. Debarment from participation in the EB-5 program for the regional center, new commercial enterprise, or job-creating entity; and

6. Debarment from participation in the EB-5 program for one or more persons associated with the regional center, new commercial enterprise, or job-creating entity.

See proposed 8 CFR 204.431(d).

Under the proposed rule, USCIS may take reasonable actions to collect information regarding a potential or suspected violation, to pursue remedial action, to deter future violations, and to ensure ongoing compliance with the EB-5 program before issuing a sanction. See proposed 8 CFR 204.431(e). For example, USCIS may issue warning letters when it becomes aware of evidence of false statements, the involvement of ineligible individuals, impending actions taken by securities regulators, or the failure to pay required fees to avert or correct compliance concerns. The letter would also include any proposed sanction if the person or entity does not remedy the violation.

USCIS may also issue notices of violation or pre-sanction notices, such as cease and desist letters, when it finds or otherwise believes that a regional center, new commercial enterprise, job-creating entity, or promoter is engaging or has engaged in the violation of a law, rule, or regulation in proposed 8 CFR 204.431(b) or other prohibited activity. See proposed 8 CFR 204.431(d)-(e). For example, these notices or letters could be used to inform regional centers or promoters to cease marketing activities prohibited by the rules and standards in proposed 8 CFR 204.428 and proposed 8 CFR 204.431(b)(10) or to cease the misuse of the DHS or USCIS seal. These pre-sanction notices, including cease-and-desist letters, would generally also include any further proposed sanction if the person or entity does not remedy the violation. See proposed 8 CFR 204.231(e).

Regardless of whether USCIS sends a warning letter or other type of notice, USCIS would generally first issue a notice identifying the actions that initiated the sanctions process as well as the sanction USCIS is imposing. See proposed 8 CFR 204.431(f)(2). Each sanction would be issued based on a consideration of certain factors, such as the manner, nature, magnitude, culpability, and harm, when determining the severity of a sanction to issue. See proposed 8 CFR 204.431(c). DHS notes that under the proposed rule, USCIS would be able to issue more than one sanction for any violation. See proposed 8 CFR 204.431(d). For example, if USCIS determines that a regional center is engaging in conduct inconsistent with its designation by failing to adhere to its policies and procedures adopted to monitor and oversee associated new commercial enterprises, such as failing to adequately screen or knowingly permitting a person to be involved with one of its new commercial enterprises who is ineligible to participate in the Regional Center Program under section 203(b)(5)(H) of the INA, 8 U.S.C. 1153(b)(5)(H), USCIS could issue a monetary penalty to the regional center. See proposed 8 CFR 204.431(d)(2). If the regional center does not ensure that its new commercial enterprise takes commercially reasonable steps to remove the person from participating in the Regional Center Program, then USCIS would be able to issue additional sanctions for the ongoing violation to either or both the regional center and its associated new commercial enterprise. Additionally, if the regional center does not pay the monetary penalty, nonpayment would constitute an additional sanctionable offense. See proposed 8 CFR 204.431(b)(9).

Upon receipt of a sanction notice, the affected party could take action to comply with the sanction notice or file a motion to reopen or reconsider or appeal any final determination to the Administrative Appeals Office. See proposed 8 CFR 204.431(g) and (h). If an affected party is the subject of multiple sanctions, a separate motion or appeal must be timely filed for each sanction the affected party seeks to have reviewed. See proposed 8 CFR 204.231(f)(1). For example, if an affected party received both a fine and a suspension and the affected party wished to have both sanctions reviewed by the Administrative Appeals Office, then he or she would be required to file two separate appeals. This requirement serves to clearly identify the sanctions for which an affected party has sought administrative appellate review for exhaustion purposes under section 203(b)(5)(P)(ii) of the INA, 8 U.S.C. 1153(b)(5)(P)(ii). Furthermore, this requirement provides USCIS with the necessary flexibility to efficiently oversee the integrity of the EB-5 program.

Under the proposed rule, USCIS could impose monetary penalties ( i.e., fines) on regional centers based on particular violations of applicable requirements. See, e.g., INA sec. 203(b)(5)(G)(iii)(II)(aa), 8 U.S.C. 1153(b)(5)(G)(iii)(II)(aa) (“fines equal to not more than 10 percent of the total capital invested by alien investors in the regional center's new commercial enterprises . . .”); see proposed 8 CFR 204.431(d)(2). To streamline the process for imposing monetary penalties for certain common violations under section 203(b)(5)(G)(iii) of the INA, 8 U.S.C. 1153(b)(5)(G)(iii) (such as failure to file an annual statement), DHS considered prescribing set amounts for monetary penalties rather than making individualized determinations for the amount of the monetary penalty based on the severity of each violation up to the statutory limit of 10 percent of the total capital invested by EB-5 investors in the regional center's new commercial enterprises or job-creating entities directly involved in such violations. For example, under that approach, DHS would impose a set monetary penalty of $10,000 on a regional center with one or more investors in its new commercial enterprises or job-creating entities that does not file its annual statement (with required information for each of its new commercial enterprises and job-creating ( printed page 40727) entities) by the required due date. DHS is seeking public input and feedback on whether to prescribe set monetary penalties for certain common violations, particularly the amount for such penalties and the types of violations that may be covered.

Under the proposed rule, USCIS could suspend any person from participating in the EB-5 program. See proposed 8 CFR 204.431(d)(3). DHS proposes that suspension means temporarily disallowing some or all forms of participation in the EB-5 program by the suspended person. See proposed 8 CFR 204.401, Suspend. Suspensions may be time or violation-limited sanctions to address and contain problematic behaviors in a generally constructive manner. During a period of suspension and depending on the scope of suspension imposed, the person may not be able to continue to solicit investors, generate or promote further investments, or otherwise participate in the EB-5 program, either in part or with restrictions. For example, a regional center could be suspended from filing project applications or accepting new regional center investors. Any suspension would take effect as of the date of the determination and last for the period specified by USCIS. See proposed 8 CFR 204.431(d)(3). The proposed rule would generally codify existing policy on holding the adjudication of certain applications and petitions during the period of suspension but would provide more uniform parameters for holding, rejecting, or denying applications associated with suspended regional centers or NCEs or JCEs. See proposed 8 CFR 204.431(d)(3)(ii-iii).

DHS proposes that debarments preclude a person's participation in the EB-5 program without the ability for reapplication either permanently or temporarily as determined by USCIS. See proposed 8 CFR 204.401, Debar. Debarments could be temporary or permanent, but in either case would result in the end of the person's participation in the EB-5 program. See proposed 8 CFR 204.431(d)(5). All debarments would include or be preceded by ending the person's participation in the EB-5 program and would occur under circumstances requiring longer term solutions to safeguard program integrity, including temporary or permanent removal from the EB-5 program.

A temporary debarment would end the person's participation while permitting reapplication after a timeframe specified by USCIS. See proposed 8 CFR 204.431(d)(5)(iii). USCIS would remove temporarily debarred persons from any list of approved regional centers or registered promoters for the specified timeframe. If the debarment is temporary, USCIS would provide the length of the bar in its sanctions notice to the affected party. See proposed 8 CFR 204.431(f)(1). For example, DHS may impose a temporary debarment based on a related time-limited injunction due to noncompliance with Federal and State securities laws. The range of associated parties that could be sanctioned for securities noncompliance is quite broad, including any persons involved in the regional center's or new commercial enterprise's activities, as determined by the Secretary. INA secs. 203(b)(5)(G) and (I), 8 U.S.C. 1153(b)(5)(G) and (I). Further, potential violations subject to sanction for noncompliance with Federal and State securities laws include temporary or permanent orders, judgements, or decrees of any court, final orders issued by the SEC or State securities regulator. INA secs. 203(b)(5)(I)(iv), 8 U.S.C. 1153(b)(5)(I)(iv). Due to the number of possible parties affected and varied time horizons of orders and judgements issued by other State and Federal regulators, and due to the RIA requirement for the establishment of graduated sanctions, DHS believes that temporary debarments may be an appropriate sanctions tool short of imposing a permanent bar in these and other similar circumstances. See proposed 8 CFR 204.431(b).

The INA requires the permanent debarment of any individual or organization from participating in the EB-5 program where USCIS determines, in its discretion, that the individual or organization was a knowing participant in any conduct that led to the termination of a regional center, new commercial enterprise, or job-creating entity for reasons relating to public safety, national security, fraud, deceit, intentional material misrepresentation, or criminal misuse. INA secs. 203(b)(5)(N) and (O), 8 U.S.C. 1153(b)(5)(N) and (O). USCIS would remove permanently debarred entities from any list of approved regional centers or registered promoters indefinitely.

USCIS would base a determination that a person was a knowing participant on actual or constructive knowledge and either direct or indirect participation. See proposed 8 CFR 204.432(b) and 204.433(b). Consequently, USCIS would consider any person to being a knowing participant if that person knew that his or her participation in the prohibited conduct was unlawful or if that person should have known that his or her participation in the prohibited conduct was unlawful (for example, based on their position or relationship with the relevant entity). Moreover, USCIS would consider a person to be a knowing participant if that person participated directly in the prohibited conduct or indirectly in the prohibited conduct such as through an intermediary or representative or by having actual or constructive knowledge of the prohibited conduct and failing to exercise his or her authority to prevent the prohibited conduct from occurring. For example, USCIS would debar an executive of an EB-5 entity with actual or constructive knowledge who fails to terminate an employee or other agent that is engaging in fraud on behalf of the EB-5 entity in connection with the EB-5 program.

As discussed above in connection with relevant definitions, DHS interprets its termination authority differently depending on which entity's participation is being terminated. Since DHS only designates regional centers (and not NCEs or JCEs), DHS interprets its termination authority for regional centers as applying only to end the designation of a regional center in line with historic practice and usage of this term, and DHS accordingly proposes to impose terminations as a sanction only on regional centers. See proposed 8 CFR 204.431(d)(4). DHS proposes that a terminated regional center may not solicit capital from an investor seeking classification as an immigrant investor. See proposed 8 CFR 204.401, Terminate. On the other hand, the INA also provides authority to terminate the participation of NCEs or JCEs in the EB-5 program. See INA secs. 203(b)(5)(H)(iv), (N)(iii), and (O)(ii), 8 U.S.C. 1153(b)(5)(H)(iv), (N)(iii), (O)(ii). As an initial matter, DHS does not designate NCEs or JCEs for participation in the program the same as is contemplated for regional centers under the INA or in line with historic practices. Moreover, these provisions of the INA do not distinguish between the more specific usage of termination as it applies to a regional center's designation versus other types of sanctions that could apply to NCEs or JCEs that would similarly end their participation in the EB-5 program, such as debarment. Cf. INA sec. 203(b)(5)(G)(iii)(II), 8 U.S.C. 1153(b)(5)(G)(iii)(II) (authorizing debarment to end the participation of ( printed page 40728) non-regional center persons in the EB-5 program while limiting usage of the term termination specifically just to a regional center's designation). DHS also notes that the investor protections under section 203(b)(5)(M) of the INA, 8 U.S.C. 1153(b)(5)(M) trigger only upon either the termination of a regional center or debarment of a NCE or JCE. See INA sec. 203(b)(5)(M)(ii)(I), 8 U.S.C. 1153(b)(5)(M)(ii)(I) (“in the case of the termination of a regional center”), and INA sec. 203(b)(5)(M)(ii)(II), 8 U.S.C. 1153(b)(5)(M)(ii)(I) (“in the case of the debarment of a new commercial enterprise or job-creating entity”). Consequently, termination of a NCE or JCE that would be distinct from debarment would not trigger these investor protections under section 203(b)(5)(M) of the INA, 8 U.S.C. 1153(b)(5)(M), which DHS believes would be contrary to the remaining provisions of section 203(b)(5)(M) of the INA, 8 U.S.C. 1153(b)(5)(M), which provide protections to “good faith investors.” DHS therefore interprets its authority to terminate the participation of NCEs or JCEs in the program as tantamount to debarment, which is reflected in the proposed definitions and accompanying rules discussed previously. Accordingly, under this proposed rule, USCIS would have the ability to terminate a regional center from participation in the Regional Center Program for any of the violations in proposed 8 CFR 204.431(b). The RIA requires termination of the regional center's designation where the new commercial enterprise violates any of the requirements of redeployment of EB-5 capital (INA sec. 203(b)(5)(F)(v)(II), 8 U.S.C. 1153(b)(5)(F)(v)(II)), if the regional center does not consent to or deliberately attempts to impede a DHS audit (INA sec. 203(b)(5)(E)(vii)(III), 8 U.S.C. 1153(b)(5)(E)(vii)(III), see also proposed 8 CFR 204.431(b)(3)), or if the regional center does not make the required Integrity Fund Fee payment within 90 days of its due date (INA sec. 203(b)(5)(J)(iv)(II), 8 U.S.C. 1153(b)(5)(J)(iv)(II); see also proposed 8 CFR 204.431(b)(9)).