Source: https://usaie.org/international-entrepreneur-rule-delay-of-effective-date/
Timestamp: 2019-04-18 15:39:49+00:00

Document:
1 82 Fed. Reg. 31887 (July 11, 2017).
important role immigration plays in shaping and driving a twenty-first century American economy.
Entrepreneurs are responsible for contributing a significant amount of wealth to the U.S. economy and creating jobs.2 Thus, supporting and retaining foreign entrepreneurs in the United States is an essential component of a strong U.S. economy and workforce.3 Nevertheless, our immigration laws, which fail to take into account that immigrants play a significant role in business creation, are unnecessarily crippling our ability to compete for talent in the global marketplace. Until our laws can be reformed to provide flexibility for entrepreneurs and reflect modern business practices, DHS should strive to create opportunities within our existing legal structure to attract and retain foreign entrepreneurs and create jobs for U.S. workers. The International Entrepreneur Rule (IER), which would provide parole for foreign entrepreneurs who provide a significant public benefit to the United States, is a temporary means for foreign entrepreneurs to concentrate on growing their businesses while potentially becoming eligible for a more long-term visa option that would allow them to continue running their businesses in the United States.
Our comments to the IER as it was initially proposed were intended to make it more practical for entrepreneurs to qualify, and we were pleased that the Final Rule reflected some of our recommendations. At this time, in addition to commenting on the postponement of the rule’s effective date, we explain why the rule should be retained, and offer suggestions as to how it can be further improved to facilitate international entrepreneurship that can best grow our nation’s economy.
3 See Stuart Anderson, Immigrants and Billion Dollar Startups, NATIONAL FOUNDATION FOR AMERICAN POLICY2 See Tim Kane, The Importance of Startups in Job Creation and Job Destruction, EWING MARION KAUFFMAN FOUNDATION (July 2010), http://www.kauffman.org/what-we-do/research/firm-formation-and-growth-series/the- importance-of-startups-in-job-creation-and-job-destruction (finding that without startups, there would be no net job growth in the U.S. economy).
(Mar. 2016), http://nfap.com/wp-content/uploads/2016/03/Immigrants-and-Billion-Dollar-Startups.NFAP-Policy- Brief.March-2016.pdf (finding that immigrant entrepreneurs have a track record of success in creating American powerhouses, such as Intel, eBay, and Tesla, and “have started more than half (44 of 87) of America’s startup companies valued at $1 billion or more.”).
DHS also claims that implementing the IER and then conducting notice and comment would confuse the public and “likely cause the waste of resources by multiple stakeholders with interests in this rulemaking.”11 Common sense suggests that it is far more likely that stakeholders—entrepreneurs, U.S. investors, and other entities and individuals supporting the start-ups—have already expended time and money in anticipation of the IER taking effect. It defies logic that stakeholders would wait until six days before the rule’s effective date to begin the process of meeting the eligibility requirements.
5 82 Fed. Reg. at 31887.
6 82 Fed. Reg. at 31888.
7 Jifry v. FAA, 370 F.3d 1174, 1179 (D.C. Cir. 2004) (citations omitted).
8 82 Fed. Reg. at 31888.
9 Sorenson Comm. Inc. v. FCC, 755 F.3d 702, 706-07 (D.C. Cir. 2014).
notice and comment are intended for those situations where the policies of public participation are outweighed by other considerations. Mid-Tex Elec. Coop. v. FERC, 822 F.2d 1123, 1132-34 (D.C. Cir. 1987), is distinguishable as FERC originally adopted its policy after a “lengthy” comment period, and the interim rule issued without prior notice and comment promoted the continuity of the process while it underwent a new comment period; FERC was not being dilatory in issuing the interim rule; and the “irremediable financial consequences” if the interim rule did not take effect immediately involved long-term capital construction. By contrast, stakeholders here are far more likely to have already suffered financial consequences as a result of DHS’s postponement of the IER’s effective date.
A case-by-case determination as to whether an applicant would provide a “significant public benefit to the United States” is precisely what the statute requires. The preamble to the Final Rule included a lengthy discussion of the legal authority for its promulgation, along with careful consideration of the public comments and explanations for changes between the rule as proposed and the final rule.13 The IER was promulgated in accordance with the notice and comment procedures of the APA and, as discussed above, full notice and comment is required before DHS can delay its implementation.
The minimum investment amount of $250,000, although reduced from $345,000 as originally proposed, is still unreasonably high and not typical for a start-up organization, especially in the service sector. The regulation itself recognizes this reality by permitting an alternative investment of $100,000 in the form of a federal, state or local government grant. AILA and the Immigration Council’s comments to the proposed rule, which were submitted on October 17, 2016, suggested a minimum investment of $120,000, based upon data from top accelerators pointing to $250,000 as the typical maximum initial investment.
13 See 82 Fed. Reg. 5238-5286 (Jan. 17, 2017).12 82 Fed. Reg. at 31887.
14 20 Things All Entrepreneurs Should Know About Angel Investors, FORBES MAGAZINE (Feb. 5, 2015), http://www.forbes.com/sites/allbusiness/2015/02/05/20-things-all-entrepreneurs-should-know-about-angel- investors/#684bd630483a.
the proposed threshold is unrealistic and could be more flexible.
17 See id.16 See proposed 8 CFR §212.19(a)(5), 81 Fed. Reg. 60130, 60165 (Aug. 31, 2016).
18 See proposed 8 CFR §212.19(b)(2)(ii)(B)(1), 81 Fed. Reg. at 60165.
19 See 82 Fed. Reg. at 5287 [to be codified at 8 CFR §§212.19(a)(5)(i), 212.19(b)(2)(ii)(B)(1)].
20 See id. [to be codified at 8 CFR §212.19(a)(5)(i)].
21 See 82 Fed. Reg. at 5250.
22 See 82 Fed. Reg. at 5251.We note that the agency regularly makes such evaluations when reviewing EB-5 and other investment-based applications and petitions.
Investment capital coming from sources such as these should also be considered “qualifying” investments. If an entrepreneur is willing to put his or her own personal savings at risk and/or incur a reasonable amount of debt to spur the growth of a business and create jobs, or if family members, business acquaintances or friends are willing to do the same, they should be allowed to do so.
We understand DHS’s interest in having a narrow set of criteria to make it as easy as possible to identify instances where granting parole would serve the public interest, and appreciate the inclusion of the “other reliable and compelling evidence” option if the investment threshold cannot be met.24 However, the start-up must still have received funds from a “qualified investor” or have received some qualifying funds from a government entity. We recommend broadening this language by allowing for case-by-case considerations of alternative criteria to include instances when investment funds come from individuals or organizations that do not meet the “qualified investor” definition.
We also suggest that a formal recommendation from a governmental economic development council or similar agency should be given a rebuttable presumption as “reliable and compelling evidence” of the “potential for rapid growth and job creation” when the investment comes from alternative sources. These agencies have significant expertise in evaluating a startup company’s potential for growth. This would also reduce the burden on applicants and adjudicators concerning the submission of extensive evidence to meet this requirement.
25 See 82 Fed. Reg. at 5288 [to be codified at 8 CFR §212.19(i)].24 See 82 Fed. Reg. at 5287 [to be codified at 8 CFR §212.19(b)(2)(iii)].
Second, the ability of the entrepreneur’s spouse to contribute to the household income may be limited by factors such as childcare responsibilities or a visa status that prohibits employment. We suggest reducing the income requirement to 200 percent of the federal poverty line and permitting, as an alternative, evidence that the entrepreneur has sufficient personal funds – through savings, family money, or other sources – to adequately support him or herself and any dependents.
DHS declined to adopt parole in place as an option for entrepreneurs who may be present in the United States. The regulation requires a person who is already in the United States and who is deemed to meet the IER criteria to appear at a port of entry outside the United States in order to be granted parole.27 DHS should change the rule to permit “parole in place” to be granted to entrepreneurs and their dependents who are already in the United States. Requiring them to depart the United States could result in a disruption to their business operations, potentially costing U.S. jobs.
We applaud DHS for providing that entrepreneurs who are granted parole will be authorized for employment incident to their parole, and for providing an automatic 240-day extension of work authorization while a re-parole application is pending.28 However, we urge DHS to also allow spouses of parolees to be authorized to work and eliminate the requirement that they file a separate employment authorization application. To attract entrepreneurial talent, it is imperative to eliminate any unnecessary obstacles that would prevent family members from accompanying the entrepreneur. Spouses of entrepreneurs should also be permitted to contribute to the U.S. economy, and to provide critical financial support to the household while the entrepreneur focuses on building the business. Obstacles that would keep them from doing so should be minimized or eliminated.
DHS should allow for premium processing of entrepreneur parole applications to meet the fast- paced and highly competitive demands of start-ups. Recognizing the complexity of these cases, we recommend extending the premium processing time beyond the normal 15 days to 30 days.
28 See 82 Fed. Reg. at 5288-89 [to be codified at 8 CFR §§212.19(g), 274a.12(b)(37)].
The IER states that parole decisions will be based on the totality of the evidence and that USCIS will “consider and weigh all evidence, including any derogatory evidence or information, such as but not limited to, evidence of criminal activity or national security concerns.”29 Though we understand there may be limitations when national security concerns arise, DHS should commit, to the extent possible, to providing notice to the entrepreneur and the opportunity for the entrepreneur to respond if information from background checks raises questions regarding eligibility. This would be consistent with the Adjudicator’s Field Manual, ch. 10.5, “Requesting Additional Information” and 8 CFR §103.2(b)(16)(i).30 Similarly, DHS should provide notice and an opportunity to respond before terminating parole in all cases. Entrepreneurs and investors must have some certainty that parole will not be arbitrarily terminated without first having an opportunity to respond.
DHS also should allow applicants to file appeals and/or motions to reopen or reconsider the denial or termination of parole. Without an appeal or motions process, the only option for an individual who believes his or her application was wrongfully denied is to file a new application with a new filing fee, or hope that USCIS will exercise its sua sponte authority to reopen the case on its own motion. This policy will fail to hold USCIS adjudicators accountable for even the simplest of mistakes, and will decrease the public’s trust in the program.
We thank DHS for providing the opportunity to comment on this notice and hope that DHS will maintain and improve the rule in accordance with the suggestions herein.
30 The regulation requires the Service to advise the applicant or petitioner if a decision will be adverse and is based29 See 82 Fed. Reg. at 5288 [to be codified at 8 CFR §212.19(d)(1)].
on derogatory information and offer an opportunity to rebut the information before the decision is rendered, unless based on classified information.

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