New Proposed Regulations

Practice Areas

By: Jalpa Shah

New Immigration Bill Introduced by Congressman Darrell Issa

On January 3, 2017, H.R.170 – Protect and Grow American Jobs Act (hereinafter, the “Act”) was re-introduced and was referred to the Committee on the Judiciary.

The purpose of the Act, as stated by the Congressman, seems to be to close a loophole in the H-1B visa program.  Specifically, the Act focuses on increasing the wages to ensure protection of the workforce in the United States.

The highlights of the proposed Act are:

  1. Minimum salary of H-1B visa is changed to $100,000 per annum, from the existing $60,000 per annum.
  2. Eliminates the Master’s degree exemption for the $100,000 rule.
  3. The idea is to make it more expensive and complicated for companies to use H-1B visas, and to hurt companies that exploit the program.
  4. Issa’s bill, like the current law, would apply only to companies with more than 50 employees and for whom H-1B workers make up at least 15% of the workforce.

As the proposed Act has been referred to a Committee already, we will have to wait to see and see what the Committee decides.

 DHS Proposed Rule on Changes to the EB-5 Regional Center Program

On January 11, 2017, the proposed changes to the EB-5 Regional Center Program were published in the Federal Register. Any written comments must be received by or before 90 days from the publication date.

In this proposed rule, DHS attempts to make the following changes in the initial general application process:

  1. Simplify the application process and reduce confusion by providing increased guidance on the limited types of information the agency requires to adjudicate EB-5 Regional Center applications;
  2. Reduce the adjudication period related to these applications by requiring less documentations to be submitted during the initial filing; and
  3. Decrease any frustration caused by entities to meet the evidentiary requirements for the initial filing.

DHS is also considering requiring filing of an exemplar project request (for both individual EB-5 immigrant petition and regional center) before any investor may submit his or her EB-5 petition.  DHS may also consider to create a validity period for each exemplar’s approval.

In addition, DHS seeks comments regarding modifications that would result in a “material change” in the already approved exemplar.  DHS understands that modifications to the current policy may be required and hopes to receive comments that would assist DHS in determining how to revise their approach to address material change.

Lastly, in the proposed rule, DHS goes on to ask specific questions in hope that the public will respond directly to these questions.

 

EB-5 Immigrant Investor Program Modernization; Proposed Rule

On January 13, 2017, the proposed rule was published in the Federal Register.  DHS proposes to amend certain regulations governing the EB-5 investor visas.

In addition to general comments, DHS is also seeking comments on the following major proposed changes:

  1. Priority date retention for EB-5 petitioners;
    1. This would allow one to retain the priority date of an approved petition for use in connection with any subsequent petition.
  2. Increases to the minimum investment amount for targeted employment areas (TEAs) and non-TEAs;
    1. For non-TEA areas, DHS is proposing an increase from $1 million to $1.8million
    2. For TEA areas, DHS is proposing an increase from $500,000 to $1.35million
  3. Revisions to the TEA designation process, including the elimination of state designation of high unemployment areas as a method of TEA designation;
    1. Currently, TEA designations are not available at town or city level, unless each State independently designates the area as such and provides evidence.
    2. In light of the above, DHS hopes to make such designations directly based on certain criteria.
  4. Revisions to the filing and interview process for removal of conditions on lawful permanent residence.
    1. DHS proposes changes to clarify certain regulations regarding removal of conditions for derivative family members and hopes to create a flexibility in the interview process.

In addition to the above major provisions, DHS has also proposed changes regarding the costs and benefits of the program.  Although DHS states that costs and benefits are difficult to establish, they have provided the below chart to create a qualitative impact:

Table 1—Summary of Changes and Impact of the Proposed Provisions

Current policy Proposed change Impact
Current DHS regulations do not permit investors to use the priority date of an approved EB-5 immigrant petition for a subsequently filed EB-5 immigrant petition DHS proposes to allow an EB-5 immigrant petitioner to use the priority date of an approved EB-5 immigrant petition for a subsequently filed EB-5 immigrant petition for which the petitioner qualifies Benefits:

  • Makes visa allocation more predictable for investors with less possibility for large fluctuations in visa availability dates dues to regional center termination.
  • Provides greater certainty and stability regarding the timing of eligibility for investors pursuing permanent residence in the United States and thus lessens the burden of unexpected changes in the underlying investment.
  • Provides more flexibility to investors to contribute into more viable investments, potentially reducing fraud and improving potential for job creation.

Costs

  • Not identified.
The standard minimum investment amount has been $1 million since 1990 and has not kept pace with inflation. Further, the statute authorizes a reduction in the minimum investment amount when such investment is made in a TEA by up to 50 percent of the standard minimum investment amount. Since 1991, DHS regulations have set the TEA investment threshold at 50 percent of the minimum investment amount. Similarly, DHS has not proposed to increase the minimum investment amount for investments made in a high employment area beyond the standard amount. DHS proposes to account for inflation in the investment amount since the inception of the program. DHS proposes to raise the minimum investment amount to $1.8 million. DHS also proposes to include a mechanism to automatically adjust the minimum investment amount based on the unadjusted CPI-U every 5 years DHS proposed to decrease the reduction for TEA investment thresholds, and set the TEA minimum investment at 75 percent of the standard amount. Assuming the standard investment amount is $1.8 million, investment in a TEA would initially increase to $1.35 million. DHS is not proposing to change the equivalency between the standard minimum investment amount and those made in high employment areas. As such, DHS proposes that the minimum investment amounts in high employment areas would be $1.8 million, and follow the same mechanism for future inflationary adjustments. Benefits:

  • Increases in investment amounts are necessary to keep pace with inflation and real value of investments.
  • Raising the investment amounts increases the amount invested by each investor and potentially increases the total amount invested under this program.
  • For regional centers, the higher investment amounts per investor would mean that fewer investors would have to be recruited to pool the requisite amount of capital for the project, so that searching and matching of investors to projects could be less costly.

Costs:

  • Some investors may be unable or unwilling to invest at the higher proposed levels of investment.
  • There may be fewer jobs created if fewer investors invest at the proposed higher investment amounts.
  • For regional centers, the higher amounts could reduce the number of investors in the global pool and result in fewer investors and thus make search and matching of investors to projects more costly.
  • Potential reduced numbers of EB-5 investors could prevent projects from moving forward due to lack of requisite capital.
  • An increase in the investment amount could make foreign investor visa programs offered by other countries more attractive.
A TEA is defined by statute as a rural area or an area which has experienced high unemployment (of at least 150 percent of the national average rate). Currently, investors demonstrate that their investments are in a high unemployment area in two ways: (1) Providing evidence that Metropolitan Statistical Area (MSA), the specific county within the MSA, or the county in which a city or town with a population of 20,000 or more is located, in which the new commercial enterprise is principally doing business, has experienced an average unemployment rate of the national average rate or (2) Submitting a letter from an authorized body of the government of the state in which the commercial enterprise is located, which certifies that the geographic or political subdivision of the metropolitan statistical area or of the city or town with a population of 20,000 or more in which the enterprise is principally doing business has been designated a high unemployment area. DHS proposes to eliminate state designation of high unemployment areas. DHS also proposes to amend the manner in which investors can demonstrate that their investments are in a high unemployment area (1) In addition to MSAs, specific counties within MSAs, and counties in which a city or town with a population of 20,000 or more is located, DHS proposes to add cities and towns with a population of 20,000 or more to the types of areas that can be designated as a high unemployment area. (2) DHS is proposing that a TEA may consist of a census tract or contiguous census tracts in which the new commercial enterprise is principally doing business if the weighted average of the unemployment rate for the tract or tracts is at least 150 percent of the national average. (3) DHS is also proposing that a TEA may consist of an area comprised of the census tract(s) in which the new commercial enterprises is principally doing business, including any and all adjacent tracts, if the weighted average of the unemployment rate for all included tracts is at least 150 percent of the national average. Benefits:

  • Rules out TEA configurations that rely on a large number of census tracts indirectly linked to the actual project tract by numerous degrees of separation.
  • Potential to better stimulate job growth in areas where unemployment rates are the highest.

Costs:

  • The proposed TEA provision could cause some projects and investments to not qualify. DHS presents the potential number of projects and investments that could be affected in Table 5
Current technical issues:

  • The current regulation does not clearly define the process by which derivatives may file a Form I-829 petition when they are not included on the principal’s petition.
  • Interviews for Form I-829 petitions are generally scheduled at the location of the new commercial enterprise.
  • The current regulations require an immigrant investor and his or her derivatives to report to a district office for processing of their permanent resident cards.
DHS is proposing the following technical changes:

  • Clarify the filing process for derivatives who are filing a Form I-829 petition separately from the immigrant investor.
  • Provide flexibility in determining the interview location related to the Form I-829 petition.
  • Amend the regulation by which the immigrant investor obtains the new permanent resident card after the approval of his or her Form I-829 petition because DHS captures biometric data at the time the immigrant investor and derivatives appear at an ASC for fingerprinting.
Conditions of Filing:

Benefits:

  • Add clarity and eliminates confusion for the process of derivatives who file separately from the principal immigrant investor.

Costs:

  • Total cost to applicants filing separately would be $90,762 annually.

Conditions of Interview:

Benefits:

  • Interviews may be scheduled at the USCIS office having jurisdiction over either the immigrant investor’s commercial enterprise, the immigrant investor’s residence, or the location where the Form I-829 petition is being adjudicated, thus making the interview program more effective and reducing burdens on the immigrant investor.
  • Some applicants may have cost savings from lower travel costs.

Costs:

  • Not estimated

Investors obtaining a permanent resident card:

Benefits:

  • Cost and time saving for applicants for biometrics data.

Costs:

  • Not estimated.
Current miscellaneous items:

  • 8 CFR 204.6 (j) (2) (iii) refers to the former United States Customs Service.
  • Public Law 107-273 eliminated the requirement that alien entrepreneurs establish a new commercial enterprise from both INA § 203 (b) (5) and INA § 216A.
  • 8 CFR204.6 (j) (5) and 8 CFR 204.6 (j) (5) (iii) reference “management”;
  • Current regulation at 8 CFR 204.6 (j) (5) has the phrase “as opposed to maintain a purely passive role in regard to the investment”;
  • Public Law 107-273 allows limited partnerships to serve as new commercial enterprises;
  • Current regulation references the former Associate Commissioner for Examinations.
  • 8 CFR 204.6 (k) requires USCIS to specify in its Form I-526 decision whether the new commercial enterprise is principally doing business in a targeted employment area.
  • Sections 204.6 and 216.6 use the term “entrepreneur” and “deportation”. These sections also refer to Forms I-526 and I-829.

Miscellaneous Cost:

  • Familiarization cost of the rule.
DHS is proposing the following miscellaneous changes:

  • DHS is updating references at 8 CFR 204.6 (j) (2) (iii) from United States Customs Service to United States Customs and Border Protection.
  • Removing references to requirements that alien entrepreneurs establish a new commercial enterprise in 8 CFR 204.6 and 216.6
  • Removing references to “management” at 8 CFR 204.6 (j) (5) and 8 CFR 204.6 (j) (5) (iii);
  • Removing the phrase “as opposed to maintain a purely passive role in regard to the investment” from 8 CFR 204.6 (j) (5);
  • Clarifies that any type of entity can serve as a new commercial enterprise;
  • Replacing the reference to the former Associate Commission for Examinations with a reference to the USCIS AAO.
  • Amending 8 CFR 204.6 (k) to specify how USCIS will issue a decision.
  • Revising sections 204.6 and 216.6 to use the term “investor” instead of “entrepreneur” and to use the term “removal” instead of “deportation”.

Applicants would need to read and review the rule to become familiar with the proposed provisions.

These provisions are technical changes and will have no impact on investors or the government. Therefore, the benefits and costs for these changes were not estimated.
Please refer to the published document, FR Doc No: 2017-00447, for further details.

Written comments for this published document must be received on or before April 11, 2017.

DHS Publishes Final International Entrepreneur Rule

On January 17, DHS published the final International Entrepreneur Rule. Under this rule, DHS will have the authority to grant temporary parole to foreign entrepreneurs who will qualify under this criteria on a case-by-case basis.

The criteria, in general terms, is as follows:

  1. The entrepreneur or applicant must be a substantial owner in a start-up entity that was created within the last five years in the U.S. and has substantial potential for rapid growth and job creation.
  2. The entrepreneur or applicant must have an active (or central) role in the entity, making the applicant well-positioned to substantially assist with the growth and success of the entity.
  3. Establish that the entity will provide significant public benefit in the US by:
    1. Showing that the entity has received significant investment from U.S. investors; or
    2. Government grants; or
    3. Alternative criteria: show that the applicant partially meets the above and provide other compelling validation of the entity’s substantial potential for rapid growth and job creation.

Where an applicant meets the above criteria, the applicant may be considered for parole lasting up to 30 months (2.5 years). In addition to filing the application with the necessary documents and fees, the applicant will be required to appear for biometric information.

No more than 3 entrepreneurs may be granted parole for one qualifying entity.  DHS predicts 2,940 entrepreneurs will be eligible under this rule.  As published, the rule is set to be effective on July 17, 2017.

Beginning Jan. 22, 2017, employers must use the 11/14/2016 N version of Form I-9, Employment Eligibility Verification, to verify the identity and work eligibility of every new employee or for the reverification of expiring employment authorization of current employees (if applicable). This date is found on the lower left hand corner of the form.   Prior versions of the form will no longer be valid for use.  Employers who fail to use Form I-9 11/14/2016 N on or after Jan. 22, 2017 may be subject to all applicable penalties under section 274A of the Immigration and Nationality Act, 8 U.S.C. 1324a, as enforced by U.S. Immigration and Customs Enforcement (ICE).

Employers should continue to follow existing storage and retention rules for each previously completed Form I-9.  Find more information on I-9 Central found at www.uscis.gov/i-9Central.

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