SUPPLEMENTARY INFORMATION:

Table of Contents

I. Public Participation

II. Executive Summary

A. Purpose and Major Provisions of the Regulatory Action

B. Summary of the Proposed EB-5 Program Fees

C. Summary of Economic Impacts

III. Background and Purpose

A. The EB-5 Program

B. USCIS Fees

C. Legal Authority and Guidance

1. EB-5 Reform and Integrity Act of 2022

2. Other Legal Authorities

D. Full Cost Recovery

E. EB-5 Fee Schedule

1. Current EB-5 Fees

2. State of EB-5 Fee Schedule Regulations

F. Severability

IV. Fee-Setting Approach

A. The Processing Times Referenced in the Integrity Reform Act

1. USCIS Efficiency Improvements

2. Completion Goals Are Not Requirements

B. EB-5 Fee Study Methodology

1. Volume

2. Completion Rates

3. Legacy Workloads

4. Cost Reallocation

5. Regional Center Termination Costs

C. EB-5 Fee Study Projected Costs and Revenue

1. EB-5 Fee Study Cost Projections

2. EB-5 Fee Study Revenue Projections

3. EB-5 Fee Study Cost and Revenue Differential

D. EB-5 Fee Study Results and Proposed Fee Adjustments

1. Proposed EB-5 Immigration Benefit Request Fee Adjustments

2. EB-5 Technology Fee

3. Form I-527, Amendment to Legacy Form I-526

V. EB-5 Integrity Fund Fees and Penalties

A. EB-5 Integrity Fund

B. Current EB-5 Integrity Fund Fees

C. Proposed Inflation Adjustment to EB-5 Integrity Fund Fees

D. EB-5 Integrity Fund Penalties

1. Proposed Penalties

2. Calculation of Investors To Determine Amount Owed

3. Timeline and Payment Process

E. Technical Change

VI. 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)

1. Summary

2. Economic Impacts

B. Regulatory Flexibility Act (RFA)

1. Initial Regulatory Flexibility Analysis (IRFA)

C. Unfunded Mandates Reform Act of 1995 (UMRA)

D. Congressional Review Act

E. Executive Order 13132 (Federalism)

F. Executive Order 12988 (Civil Justice Reform)

G. Family Assessment

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

I. National Environmental Policy Act (NEPA)

J. Paperwork Reduction Act (PRA)

Table of Abbreviations

ABC Activity-Based Costing

BLS Bureau of Labor Statistics

CEQ Council on Environmental Quality

CFO Chief Financial Officer

CFR Code of Federal Regulations

CPI-U Consumer Price Index for All Urban Consumers

DHS Department of Homeland Security

DOL Department of Labor

EB-5 Employment-Based Immigration Visa Classification, Fifth Preference

E.O. Executive Order

FDNS Fraud Detection and National Security Directorate

FR Federal Register

FY Fiscal Year

GAO Government Accountability Office

IEFA Immigration Examinations Fee Account

INA Immigration and Nationality Act of 1952

IOAA Independent Offices Appropriations Act

IPO Immigrant Investor Program Office

IRFA Initial Regulatory Flexibility Analysis

JCE Job-Creating Entity

NAICS North American Industry Classification System

NCE New Commercial Enterprise

NEPA National Environmental Policy Act

OIRA Office of Information and Regulatory Affairs

OPQ Office of Performance and Quality

PRA Paperwork Reduction Act

RFA Regulatory Flexibility Act

RIA Regulatory Impact Analysis

SBA Small Business Administration

SOC Standard Occupational Code

TEA Targeted Employment Area

UMRA Unfunded Mandates Reform Act

USCIS U.S. Citizenship and Immigration Services

VPC Volume Projection Committee

( printed page 48517)

I. Public Participation

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 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 earlier, 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.

Instructions: If you submit a comment, you must include the agency name (U.S. Citizenship and Immigration Services) and the DHS Docket No. USCIS-2025-0139 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 https://www.regulations.gov, and will include any personal information you provide. Therefore, submitting this information makes it public. You may wish to consider limiting the amount of personal information that you provide in any voluntary public comment submission you make to DHS. DHS may withhold information provided in comments from public viewing that it determines may impact the privacy of an individual or is offensive. For additional information, please read the Privacy and Security Notice available at https://www.regulations.gov.

Docket: For access to the docket and to read background documents or comments received, go to https://www.regulations.gov, referencing DHS Docket No. USCIS-2025-0139. The docket includes additional documents that support the analysis contained in this proposed rule to determine the specific fees that are proposed. 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.

II. Executive Summary

A. Purpose and Major Provisions of the Regulatory Action

DHS proposes to adjust EB-5 immigration benefit request fees to meet certain requirements provided in the EB-5 Reform and Integrity Act of 2022, div. BB of the Consolidated Appropriations Act, 2022, Public Law 117-103 (EB-5 Reform Act), and continue to adequately fund the cost of administering the EB-5 program. DHS proposes the following major changes:

• Adjusting EB-5 program fees according to the schedule in Table 1;
• Establishing the USCIS EB-5 technology fee;
• Codifying EB-5 Integrity Fund fees and penalties; and
• Establishing Form I-527, Amendment to Legacy Form I-526.
• Clarifying the process by which an alien investor's spouse and children file separate Form I-829 petitions when they are not included in the Form I-829 filed by the alien investor.

B. Summary of the Proposed EB-5 Program Fees

Table 1 summarizes the fees that DHS is proposing in this rule to meet EB-5 Reform Act requirements. The fees in the column titled Current Fees are the fees that DHS currently collects. See8 CFR part 106. The fees in the column titled Proposed Fee(s) are the fees DHS proposes in this rule. The final two columns display the difference between current and proposed fees, based on dollar value and percentage. In addition, the draft version of USCIS Form G-1055, USCIS Fee Schedule, included in the docket for this rulemaking uses these proposed fees.

In certain cases, the proposed fee may be the sum of several fees. For example, as described in Section IV.D.2 of this preamble, the initial I-526 and I-526E EB-5 immigration benefit requests require an additional technology fee under this proposed rule. The table includes rows with the technology fee added to the Proposed Fee(s) column for clarity.

The EB-5 Reform Act established a special fund to be known as the EB-5 Integrity Fund. INA sec. 203(b)(5)(J), 8 U.S.C. 1153(b)(5)(J). The EB-5 Reform Act requires the Integrity Fund to be financed through the collection of an annual fee ($10,000 or $20,000 annually) paid by and collected from designated regional centers in relation to the number of total investors. INA sec. 203(b)(5)(J)(ii), 8 U.S.C. 1153(b)(5)(J)(ii). In addition, the ( printed page 48518) Integrity Fund is financed by the collection of $1,000 from each regional center petitioner with their filing of a Form I-526E. Id.

DHS also proposes imposing penalties for failing to pay and for late payments of the EB-5 Integrity Fund fees. INA sec. 203(b)(5)(J), 8 U.S.C. 1153(b)(5)(J) requires a reasonable penalty fee for a regional center that does not pay the annual Integrity Fund fee within 30 days after the date on which such fee is due, and termination of a regional center that does not pay the fee within 90 days. DHS proposes to impose the following:

• Ten percent of the required integrity fee (e.g. 10 percent of $10,000 or $20,000 prior to adjusting such required amounts for inflation) for a regional center that pays its fees on day 31 through and including day 60 after the due date.
• Twenty percent of the required integrity fee for a regional center if their fee is paid on day 61 through and including day 90 after it is due.
• Termination of a regional center's designation if it fails to pay the fee within 90 days of the date on which such fee is due.

This rule proposes to codify in regulation the fees and penalties associated with the Integrity Fund, as explained in Section V of this preamble.

Finally, the rule clarifies when an immigrant investor's derivatives should be included in the principal alien investor's Form I-829 petition.^[1] The regulations currently in effect do 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, including whether each derivative in such cases should file their own separate Form I-829 petition or whether the derivatives should jointly file on the same petition. This rule proposes: (1) when the principal is deceased, all derivatives (spouse and children) of the deceased investor may be included on a single Form I-829 petition, (2) each derivative must otherwise file a separate Form I-829 petition when the spouse and children are not included on the investor's Form I-829 petition, and (3) for any derivative beneficiary who files a Form I-829 petition separately from the principal investor, the deadline to file is the same as would have applied to the principal investor.

C. Summary of Economic Impacts

The fee schedule DHS is proposing would impact about 11,260 ^[2] EB-5 program form filings annually and decrease form fees by about 14.7 percent, or by about $2,259 based on a projected volume-weighted per form average. The impact for these 11,260 filings could accrue to individual investors,^[3] regional centers,^[4] and other persons or businesses involved in promoting program investments.

DHS estimates that the 10-year and annualized monetized costs would be about $42.1 million and $4.2 million, in order, in undiscounted terms. At a 3 percent discount rate, the figures would be $35.9 million and $3.6 million, in order. At a 7 percent discount rate, the figures would be $29.6 million and $3.0 million, in order. Impacts associated with filing the new Form I-527, as well as a few expected Form I-829 filings from dependents separate from the principal filers, are categorized as costs, as are changes in forms' burdens. The proposed fee changes (for EB-5 program forms that currently exist) would constitute transfer payments from DHS to requestors, estimated to be $830.7 million over a 10-year period (a reduction of $244.1 million from current filing fees).^[5] Penalties and fees would also be classified as costs but are not estimated and quantified. There are also likely to be familiarization costs associated with the proposed rule.

Based on limited data and information, DHS analysis suggests that most regional centers and almost all new commercial enterprises (NCEs) ^[6] and job-creating entities (JCEs) involved in program investment activity would be small entities under the Regulatory Flexibility Act of 1980 (RFA). Complete details on the possible impacts, a formal accounting statement, and important caveats to the initial small entity determination are provided in Section VI, Parts A and B, of this document.

III. Background and Purpose

A. The EB-5 Program

Congress created the EB-5 program in 1990 to stimulate the U.S. economy through job creation and capital investment by immigrant investors. Public Law 101-649, 104 Stat. 4978 (Nov. 29, 1990). Subsequently, the EB-5 regional center program was added in 1992 by the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993, Public Law 102-395, sect. 610, 106 Stat 1828 (Oct. 6, 1992) (repealed 2022). As amended by the EB-5 Reform Act, the EB-5 program makes approximately 10,000 visas available annually to qualified immigrants (and their dependents) who invest at least $1,050,000, or a discounted amount of $800,000 if the investment is in a targeted employment area (TEA) (which includes certain rural areas and areas of high unemployment) or an infrastructure project, in a U.S. business that will create at least 10 full-time jobs in the United States for qualifying employees. See INA sec. 203(b)(5)(A)-(C), 8 U.S.C. 1153(b)(5)(A)-(C). Investors may satisfy up to 90 percent of the job creation requirements with jobs that are estimated to be created indirectly through qualifying investments within a new commercial enterprise associated with a regional center designated by USCIS for participation in the regional center program. INA sec. 203(b)(5)(E)(iv), 8 U.S.C. 1153(b)(5)(E)(iv).

USCIS is committed to maintaining the integrity and efficient administration of the EB-5 program.^[7] As ( printed page 48519) part of that commitment, beginning in fiscal year (FY) 2013, USCIS created the Immigrant Investor Program Office (IPO) in Washington, DC, to manage EB-5 matters. IPO consists of staff with expertise in economics, law, business, finance, securities, and banking to enhance consistency, timeliness, and integrity within the program. Since its creation, IPO has added staff and technology focused on managing the program, identifying and preventing fraud, and ensuring national security, public safety, and compliance within the program, and developed employees' expertise in financial investigations, anti-money laundering, and global sanctions.

IPO also hired auditors to complete regional center compliance reviews of annual certification filings. See INA sec. 203(b)(5)(G), 8 U.S.C. 1153(b)(5)(G); 8 CFR 204.6(m)(6). Section 203(b)(5)(E)(vii) of the INA, as added by the EB-5 Reform Act, requires USCIS to audit each designated regional center at least once every 5 years. Regional center audits enhance EB-5 program integrity by verifying information in regional center applications, annual certifications, and associated investor petitions.^[8] Currently, IPO generally conducts regional center audits in accordance with Generally Accepted Government Auditing Standards.^[9] USCIS plans and performs the audits to obtain sufficient, appropriate evidence to provide a reasonable basis for its findings and conclusions based on the audit objectives. An audit provides USCIS the opportunity to verify the information submitted by designated regional centers in applications, petitions, and annual statements, and to confirm compliance with applicable laws and authorities to ensure continued eligibility for regional center designation. The audit includes, for example, researching information in government systems, reviewing commercial and public records, and substantiating evidence that accompanies regional center applications and certifications. It also includes obtaining information, on a consensual basis, through requests for evidence, virtual meetings, and if necessary, an in-person audit.

The EB-5 Reform Act specifically supports or requires new fraud, national security and public safety functions for EB-5 adjudications. INA sec. 203(b)(5)(F)(iv), 8 U.S.C. 1153((b)(5)(F)(iv) (site visits); INA sec. 203(b)(5)(H)(iii), 8 U.S.C. 1153(b)(5)(H)(iii) (background checks); INA sec. 203(b)(5)(N)-(O), 8 U.S.C. 1153(b)(5)(N)-(O) (national security/fraud determinations); INA sec. 203(b)(5)(R), 8 U.S.C. 1153(b)(5)(R) (Office of Foreign Asset Control checks). In addition, DHS has the general authority to verify any information submitted to establish eligibility for immigration benefits at any time to ensure compliance with laws and authorities that authorize or govern the benefit, program, process, or status. See, e.g., INA sec. 103(a)(3), 8 U.S.C. 1103(a)(3); 8 CFR 103.2(b)(1).

USCIS will verify information and validate the assertions made and evidence provided in EB-5-related immigration benefit requests. USCIS verifies the eligibility of the requestor and validates the information they submitted using various methods of investigation, which include reviewing public records and information; contacting requesters, investors, employees, and related entities; reviewing information in the requestors' U.S. government records; and accessing publicly available records. USCIS conducts random and for-cause site visits and shares information with law enforcement agencies. USCIS intelligence research specialists assess national security concerns, review annual filings of regional centers, and audit regional centers to ensure ongoing compliance with the program. If adverse or derogatory information results from an audit, compliance review, verification, or site visit, USCIS generally will deny the request, revoke approval, or terminate the requestor's current status.^[10]

The EB-5 Reform Act authorizes DHS to propose fees in this rule that will, among other things, recover the costs of adjudicating EB-5 immigration benefit requests. SeePublic Law 117-103, div. BB, sec. 106(b) and 106(c). Those costs include primary adjudication staff, supporting staff, technology for managing the EB-5 program, conducting audits, and the relevant portion of the costs of the Administrative Site Visit and Verification Program.^[11] These costs are described in the remaining sections of this rule and the fee study that is published as an addendum to this rule for the public to review and comment on.

B. USCIS Fees

USCIS is primarily funded by fees charged to applicants, petitioners, and requestors for immigration and naturalization benefit requests. USCIS manages the following four fee accounts:

• The Immigration Examinations Fee Account (IEFA), which includes premium processing revenues (INA secs. 286(m), (n), (t), and (u);8 U.S.C. 1356(m), (n), (t), and (u));
• The Fraud Prevention and Detection Account (INA secs. 214(c)(12) and (13), 286(v);8 U.S.C. 1184(c)(12) and (13), 1356(v));
• The H-1B Nonimmigrant Petitioner Account (INA secs. 214(c)(9) and (11), 286(s);8 U.S.C. 1184(c)(9) and (11), 1356(s)); and
• The EB-5 Integrity Fund (INA sec. 203(b)(5)(J),8 U.S.C. 1153(b)(5)(J)).

When USCIS provides adjudication and naturalization services, it is authorized to set IEFA fees at a level that will ensure recovery of the full costs of providing all such services. See INA sec. 286(m), 8 U.S.C. 1356(m). The fees that are collected from individuals and entities filing immigration benefit requests are deposited into the IEFA. Id. These fees fund the cost of adjudicating immigration benefit requests, including those provided without charge to refugee, asylum, and certain other applicants or petitioners. The IEFA accounted for approximately 94 percent of total funding for USCIS in FY 2023. The IEFA includes premium and non-premium processing revenues. Premium processing refers to the additional fees for expedited processing established under section 286(u) of the INA, 8 U.S.C. 1356(u). Non-premium processing refers to all other adjudication and naturalization services that USCIS funds from the IEFA account, including the costs of similar services provided without charge. IEFA non-premium funding represented approximately 73 percent, and IEFA premium funding represented approximately 21 percent of USCIS' FY 2023 total funding.^[12] The remaining ( printed page 48520) USCIS funding came from appropriations (approximately 5 percent) or other fee accounts (approximately 1 percent) in FY 2023.^[13] While premium processing funds are also IEFA fees, this rule does not propose premium processing fee changes or consider premium processing costs or revenue as part of the EB-5 fee setting approach described in this preamble.

The Fraud Prevention and Detection Account ^[14] and H-1B Nonimmigrant Petitioner Account ^[15] are both funded by fees for which the dollar amount is set by statute. DHS has no authority to adjust the fees for these accounts. The EB-5 Integrity Fund, a new account established in FY 2023, is discussed in a separate section of this preamble. See Section V of this preamble.

Since its inception, the EB-5 program has been funded by fees set by DHS under the IEFA authority. Historically, the fees that USCIS charges for its services that are deposited into the IEFA are generally described as “IEFA fees,” while the costs to provide such services—which are generally used as the basis to develop the IEFA fees—are described as “IEFA costs.” See, e.g., FY 2022/2023 fee rule, 89 FR 6194 (Jan. 31, 2024).

DHS issued a final rule to adjust the USCIS fee schedule on August 3, 2020. See 2020 fee rule, 85 FR 46788 (Aug. 3, 2020). The rule was scheduled to become effective on October 2, 2020. However, the rule was preliminarily enjoined, and USCIS did not implement the fees set out in the 2020 fee rule, though the provisions remained in the CFR until they were replaced by the FY 2022/2023 fee rule, effective April 1, 2024.^[16]

C. Legal Authority and Guidance

1. EB-5 Reform and Integrity Act of 2022

DHS publishes this proposed rule under the authority of the EB-5 Reform Act. Among other things, the EB-5 Reform Act immediately repealed the former authorizing statutory provisions for the Regional Center Program under the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993, Public Law 102-395, 106 Stat. 1828, sec. 610, and added new authorizing provisions to the Immigration and Nationality Act of 1952 (INA), substantially reforming the Regional Center Program effective May 14, 2022. The reformed Regional Center Program is authorized through September 30, 2027.^[17]

The EB-5 Reform Act also directed DHS to conduct a fee study and set fees for EB-5 program-related immigration benefit requests.^[18] Thus, DHS proposes the fees in this rule as authorized in section 106 of the Reform Act.

Specifically, the EB-5 Reform Act provides discretion for DHS to set fees to sufficiently recover the costs of providing such services, and attaining the goal of completing adjudications, on average, not later than:

• 180 days after receiving a regional center application (Form I-956) or application for approval of an investment in an NCE (Form I-956F);
• 90 days after receiving an application for approval of an investment in an NCE (Form I-956F) with respect to an investment that is located in a TEA;
• 240 days after receiving an immigrant investor petition for classification under INA sec. 203(b)(5)(E) (Form I-526E) or a petition to remove conditions under INA sec. 216A (Form I-829); and
• 120 days after receiving an immigrant investor petition for classification under INA sec. 203(b)(5)(E) (Form I-526E) with respect to an investment in a TEA.

SeePublic Law 117-103, div. BB, sec. 106(b).

In addition to setting the fees with the processing time goals of Public Law 117-103, div. BB, sec. 106(c), the EB-5 Reform Act also authorizes DHS to include the following costs in the EB-5 fees:

• An amount equal to the amount paid by all other fee-paying applicants to cover or reduce the costs of reduced or no fee applications (such as asylum applications), and
• An amount not greater than one percent of the immigrant investor petition filing fee to improve the information technology systems used to process, adjudicate, and archive EB-5 petitions and applications, and convert EB-5 petitions and applications to electronic formats.

SeePublic Law 117-103, div. BB, sec. 106(c).

In addition, as explained in more detail later in this preamble, the EB-5 Reform Act requires DHS to collect fees for the EB-5 Integrity Fund. INA sec. 203(b)(5)(J), 8 U.S.C. 1153(b)(5)(J). The EB-5 Reform Act established a fund in the U.S. Department of the Treasury for DHS to investigate international activities and compliance, conduct site visits, and detect fraud, among other integrity measures. INA sec. 203(b)(5)(J), 8 U.S.C. 1153(b)(5)(J). Specifically, DHS must collect $10,000 or $20,000 from each designated regional center (depending on the number of total investors) annually, must collect $1,000 from each regional center petitioner with their filing of a Form I-526E, may increase such fees by regulation as necessary to ensure sufficient amounts in the fund, and may impose penalties for failure to pay the fee after it is due. INA sec. 203(b)(5)(J)(ii), 8 U.S.C. 1153(b)(5)(J)(ii).

In connection with implementation and administration of the Integrity ( printed page 48521) Fund, USCIS must pursue collection of nonpayments from designated regional centers by imposing reasonable penalties for nonpayment within certain periods of time and terminating the designation of a regional center that fails to pay the Integrity Fund fee as required. INA sec. 203(b)(5)(J)(iv), 8 U.S.C. 1153(b)(5)(J)(iv).

2. Other Legal Authorities

This proposed rule is also consistent with nonstatutory guidance on fees, the budget process, and Federal accounting principles.^[19] DHS uses Office of Management and Budget (OMB) Circular A-25 as guidance for determining user fees for immigration benefit requests.^[20] DHS also follows the annual guidance in OMB Circular A-11 if it requests appropriations to offset a portion of IEFA costs. USCIS used the activity-based costing (ABC) methodology supported in OMB Circulars A-25 and A-11 to conduct the EB-5 fee study and develop the proposed EB-5 program fee schedule.

In the future, if the fees proposed in this rule are established, USCIS will review the EB-5 program fees in accordance with the Chief Financial Officer (CFO) Act, 31 U.S.C. 901-903, which requires each agency's CFO to review, on a biennial basis, the fees imposed by the agency for services it provides and recommend changes to the agency's fees as necessary.

D. Full Cost Recovery

As noted previously, DHS publishes this proposed rule under the EB-5 Reform Act, which, as a general matter, authorizes DHS to set EB-5 program fees “at a level sufficient to ensure the full recovery only of the costs of providing such services” (emphasis added), plus the cost of meeting the goal of completing adjudications within prescribed time frames, plus an “equal” amount for processing benefit requests with no fee or a reduced fee. SeePublic Law 117-103, div. BB, sec. 106(b) and 106(c).

DHS proposes this rule to address the projected fiscal effect of implementing the EB-5 Reform Act consistent with the EB-5 fee study described in Section IV of this preamble and fee study in the docket. DHS has examined recent USCIS budget history, service levels, and immigration trends to forecast EB-5 program costs, revenue, and operational metrics to determine the fees USCIS must collect to generate sufficient revenue to fund the anticipated EB-5 program operating costs and to meet the EB-5 Reform Act processing time goals. This assessment included EB-5 program support costs such as physical overhead, information technology, management and oversight, human resources, national security vetting and investigations,^[21] accounting and budgeting, and legal support. As explained in this rule and the supporting documents, the projected costs of administering the EB-5 program will be lower than projected fee revenue with the current fees, indicating a need for a fee adjustment. However, USCIS estimates that the cost of administering the EB-5 program is increasing. For example, in the 2024 final rule, USCIS estimated the total cost of Form I-526 was approximately $30.3 million.^[22] In the EB-5 fee study, USCIS estimates that the total cost of Forms I-526/I-526E is approximately $35.5 million, or a $5.2 million increase. The primary cost driver responsible for this cost increase is payroll, predominately because of the hiring of additional staff to meet, on average, the new processing time goals. However, as discussed later, the proposed fees are lower than the current fees because the proposed fees do not include any additional costs for processing benefit requests with no fee or a reduced fee, thus reducing the fees overall. As such, the proposed EB-5 fees would not fund a proportionate share of workload without fees and workload below full cost, and, thus, would not recover what DHS defined as full cost in previous fee rules. See section IV.B.4 for more information. Consistent with the EB-5 Reform Act, this proposed rule would ensure that USCIS recovers full EB-5 program operating costs by setting EB-5 fees at a level sufficient to fund overall requirements and general operations related to the EB-5 program.

E. EB-5 Fee Schedule

1. Current EB-5 Fees

On April 1, 2024, the FY 2022/2023 fee rule replaced the 2020 fee rule in its entirety by revising the regulatory changes codified by the enjoined 2020 fee rule. See89 FR 6194 (Jan. 31, 2024). The fees that this rule proposes would replace the EB-5 fees set by the FY 2022/2023 fee rule. Throughout this proposed rule, the phrases “current fees” or “current fee schedule” refer to the fees in effect from the FY 2022/2023 fee rule. Table 2 summarizes the IEFA EB-5 immigration benefit requests currently in effect. Through this rule, DHS is proposing fees that would replace the EB-5 fees that were set in the FY 2022/2023 fee rule.

2. State of EB-5 Fee Schedule Regulations

In the FY 2022/2023 fee rule, DHS adjusted the USCIS fee schedule and made changes to certain immigration benefit request requirements, including EB-5 program fees. See89 FR 6194 (Jan. 31, 2024). The EB-5 fees in the FY 2022/2023 fee rule were calculated by using the full cost recovery model described in that rule. In the same manner as DHS and USCIS used in their fee rules since the EB-5 program's inception, the methodology used to determine the proposed EB-5 program fees was consistent with the fees proposed for other benefit requests. Generally, the fee amounts indicated by the full cost recovery model for the immigrant investor program forms were not capped or decreased below the estimated amount that resulted in full cost recovery. As described in the FY 2022/2023 fee rule, 88 FR 402, 418 (Jan. 4, 2023), DHS applied the discretion provided in section 286(m) of the INA, 8 U.S.C. 1356(m), to: (1) use ABC to establish a model for assigning costs to specific benefit requests consistent with OMB Circular A-25; (2) allocate costs for programs for which a fee is not charged or a law limits the fee amount; (3) distribute costs that are not attributed to, or driven by, specific adjudication and naturalization services; and (4) make additional adjustments to effectuate specific policy objectives.^[27] Because the fee study had not yet been completed at the time, the EB-5 fees in the FY 2022/2023 fee rule were not set according to the fee study parameters and processing time goals of the EB-5 Reform Act, which are narrower in scope than the full cost recovery model that USCIS normally employs when determining IEFA fees through the authority of section 286(m) of the INA, 8 U.S.C. 1356(m). However, the EB-5 fees proposed in this rule are set using the parameters in the EB-5 Reform Act.^[28]

F. Severability

DHS believes that the provisions in this rule can function independently of each other, like other USCIS fees under current regulations. See89 FR 6194, 6237-6238 (Jan. 31, 2024); see also8 CFR 106.6. For example, the EB-5 Integrity Fund penalty fees could be stalled while a new rule is undertaken without affecting all other fees generally. If DHS were prohibited from collecting any new fee for any reason, DHS believes this rule is structured so that a stay, injunction, or vacatur of a fee set by this rule could be narrowly tailored to remedy the specific harm that a court may determine exists from the specific fee or fees challenged. USCIS would be able to continue operations, perhaps at a reduced level or by shifting resources in the absence of the fee until DHS is able to conduct new rulemaking to re-set fees and correct the deficiencies that resulted in the court order. Operating without one or a few of the new fees would be preferable to an invalidation of all the new fees, which may disrupt and deteriorate the EB-5 program at USCIS and would go against Congress' goal of timely processing EB-5 petitions.

IV. Fee Setting Approach

As noted previously, the EB-5 Reform Act directed DHS to conduct a fee study and set fees for EB-5 program-related immigration benefit requests at a level sufficient to recover the costs of providing such services and attain the goal of completing adjudications, on average, within certain time frames. SeePublic Law 117-103, div. BB, sec. 106(b). This rule proposes fees and provides data and supporting documents that serve as the basis for the EB-5 fee adjustments outlined in this rule. After considering comments on this rule, DHS will complete and publish a final fee study that will take effect 60 days after publication as required by Public Law 117-103, div. BB, sec. 106(b).

A. The Processing Times Referenced in the Integrity Reform Act

In accordance with the EB-5 Reform Act, DHS proposes fees in this rule with “the goal of completing adjudications, on average,” within 90, 120, 180, or 240 days, as applicable, after the relevant immigration benefit request is received in accordance with 8 CFR 103.2(a)(7)(ii). SeePublic Law 117-103, div. BB, sec. 106(b) (“including the cost of attaining the goal of completing adjudications, on average, not later than . . .”).

1. USCIS Efficiency Improvements

DHS and USCIS appreciate the processing times expectations expressed in the EB-5 Reform Act and agree that our current backlogs are excessive. As explained in the FY 2022/2023 fee rule, DHS appreciates the need for operational improvements regarding processing times, process improvement, customer service, interviews, streamlined filings, online filing, prioritization of certain requests, ( printed page 48523) training, and other steps to address the USCIS processing backlog. 89 FR 6194, 6254 (Jan. 31, 2024). As explained in the proposed fee rule, USCIS is reviewing its adjudication and administrative policies to find deficiencies, while strengthening the integrity of the immigration system. See88 FR 402, 455 (Jan. 4, 2023). More recently, DHS sought to make changes to individual programs for employment-based immigration without making changes to fees. See e.g.,89 FR 103054 (Dec. 18, 2024).

In the EB-5 program specifically, USCIS had made significant gains recently in EB-5-related requests processing times and backlogs, while strictly complying with Congress' anti-fraud and integrity provisions.^[29] For example, by hiring new staff and making other important investments at IPO, the backlog of Form I-829s decreased from 9,989 pending forms at the end of FY23 to 7,249 by the end of Q3 in FY24, a decrease of 27.4 percent.^[30]

2. Completion Goals Are Not Requirements

DHS notes, however, that the law does not prescribe hard deadlines for adjudications, nor does it impose specific consequences on USCIS (such as any requirement to refund fees) if the processing time for a specific request exceeds those goals. Therefore, consistent with the statute, DHS is not proposing to codify any processing deadlines, or any consequences for missing those processing time goals. USCIS will strive to process EB-5 requests as quickly and efficiently as possible to meet the time goals referenced in the EB-5 Reform Act and on which the fees in this rule are based, while keeping the integrity of the program utmost in mind.

B. EB-5 Fee Study Methodology

Generally, USCIS does not perform fee reviews for individual programs, thus the EB-5 Reform Act requires that the agency depart somewhat from its normal fee setting practices. Nevertheless, some of USCIS' historical practices were still helpful here. DHS and USCIS use the biennial fee review process to capture any changes in operating costs and non-premium form fees across the USCIS enterprise. When conducting a fee review to determine whether current immigration and naturalization benefit fees will generate sufficient revenue to fund the anticipated operating costs associated with administering the nation's legal immigration system, USCIS usually assesses its recent operating environment to determine the appropriate method to assign costs to immigration benefit requests. One of the primary methods that USCIS uses is ABC, a business management tool that assigns resource costs to operational activities and then to products, services, or both. USCIS uses commercially available ABC software to create financial models. These models determine the cost of each major step toward processing immigration benefit requests. This is the same methodology that USCIS has used in conducting five of the most recent previous IEFA fee reviews.^[31] For this rule, USCIS conducted a FY 2024/2025 fee review for the biennial period to determine the fees needed to recover the full costs of operating the entirety of USCIS with certain modifications required to meet the new statutory requirements in the EB-5 Reform Act. The results are the basis for the EB-5 fee study. That study provided EB-5 program fees needed to recover EB-5 program costs relative to their contribution to the total operating costs of USCIS following our usual fee study methodology. Throughout this proposed rule, DHS may use the terms FY 2024/2025 fee review or EB-5 fee study interchangeably.

To assess whether the current EB-5 fees meet full operating-cost recovery consistent with the EB-5 Reform Act requirements, USCIS determined the EB-5 program projected workload receipts, developed cost estimates for staffing and other direct costs, and estimated the adjudication hours per completion (completion rates) for each EB-5 immigration benefit request form.

USCIS and its personnel have considerable expertise in conducting fee studies and analyzing the fees required to recover the full costs of administering programs and entire agencies. Nevertheless, the EB-5 Reform Act is new, and it establishes distinct requirements and reforms for the EB-5 program. Therefore, USCIS is unable to strictly follow the same methodology for the EB-5 program it has used in conducting past IEFA fee reviews, because IEFA fees are generally based on workload, processing time, completion rates, staffing, and indirect costs of programs that are relatively well established and known. USCIS has studied and estimated the EB-5 program workload based on the processing burden estimates of experts in administering the legacy EB-5 program with certain modifications to meet new and reformed EB-5 program statutory requirements. The EB-5 Reform Act does not prescribe a method for its required fee study. However, the fees proposed in this rule adhere to OMB Circulars A-11 and A-25. DHS reviewed the EB-5 program fees using ABC, consistent with previous fee rules. DHS believes the fees proposed in this rule represent reasonable fees following fee study practices and incorporating adjustments based on public policy reasons as explained in this rule and its supporting documents. DHS cannot predict every policy change that may occur at all levels of the U.S. Government or court decisions that may affect this rule but has used the best data available during this rule's development. As stated previously, any shortcoming caused by the lack of information and newness of the program reforms are mitigated by the requirement that USCIS review the EB-5 program fees in accordance with the CFO Act, 31 U.S.C. 901-03, 2 years after they take effect and recommend changes to the agency's fees as necessary.

1. Volume

USCIS generally uses two types of volume data to conduct fee reviews: workload and fee-paying volume. Workload volume is a projection of the total number of immigration benefit requests that USCIS will receive in a fiscal year. Fee-paying volume, on the other hand, is a projection of the number of customers that will pay a fee when filing requests for immigration benefits.^[32] Given that EB-5 immigration benefit request fees are not eligible for fee waivers or fee exemptions, the entire annual EB-5 workload volume was considered for the EB-5 fee study.^[33]

The workload volume forecasts are agreed upon by the USCIS Volume ( printed page 48524) Projection Committee (VPC).^[34] The mission of the VPC is to facilitate workload and fee projection data stakeholder collaboration, communication, and coordination of critical business decisions about projected workload. This group provides a forum for making enterprise-wide decisions about projected workload supported by input from knowledgeable subject matter experts from within USCIS, other governmental agencies, and the private sector. The scope of authority of the VPC includes but is not limited to:

• Assessing and documenting current USCIS workload projection methodologies;
• Benchmarking and documentation of workload projection methodologies, assumptions, or projection methodologies applied to similar entities in use by other government agencies and the private sector;
• Comparing VPC projections versus actual figures to determine what factors may account for material variances and to better refine its forecasting approach;
• Vetting each identified projection methodology through the use of legacy USCIS workload data to determine its efficacy for use in developing workload projections up to 7 years in the future; and
• Initiating and maintaining biannual meetings to update workload forecasts.

The VPC predicts USCIS annual workload volumes using historical and recent volume trends, statistical forecasts, and subject-matter expertise from various USCIS directorates and program offices, including the IPO, USCIS service centers, the National Benefits Center, and regional, district, and field offices. Workload volume is a key element used to determine the USCIS resources needed to process EB-5 benefit requests on average within the processing time goals established in the EB-5 Reform Act. EB-5 program workload volume is the primary cost driver for assigning activity costs to EB-5 immigration benefit requests. Table 3 displays the projected average annual receipts for EB-5 immigration benefit requests:

2. Completion Rates

USCIS completion rates identify the adjudicative time required to complete (render a decision on) specific immigration benefit requests. The completion rate for each benefit type represents an average. Completion rates reflect what is termed “touch time,” or the time an employee with adjudicative responsibilities handles the case. This rate does not reflect “queue time,” or time spent waiting, for example, for additional evidence or supervisory approval. Completion rates do not reflect the total processing time applicants, petitioners, and requestors can expect to wait for a decision on their case after USCIS accepts it.

In the EB-5 program context, USCIS uses subject-matter expertise to estimate completion rates. The completion rates for this EB-5 fee study are estimates developed by USCIS' Office of Performance and Quality (OPQ), using historical data and subject matter expert input from IPO. The EB-5 fee study completion rate estimates were also guided by the processing time goals contemplated by the EB-5 Reform Act, shown in Table 4 below.^[35]

USCIS was able to estimate the completion rates of the EB-5 forms by extrapolating staff hours spent on EB-5 adjudications and estimates from subject matter experts on EB-5 request processing. USCIS identified and defined the activities required to support the relevant adjudications and the time personnel spent conducting ( printed page 48525) each activity to estimate relevant completion rates. USCIS determined that, in general, it conducts the following activities when adjudicating EB-5 forms:

• Intake of documents;
• Sending receipt notices;
• Performing background checks;
• Inputting filing information into systems;
• Reviewing and analyzing evidence, information on forms, results of database searches, and interviews (if applicable);
• Drafting decisions;
• Reviewing decisions at a supervisory level;
• Issuing decisions;
• Updating systems;
• Conducting quality reviews, administrative investigations, site visits, and audits as applicable;
• Processing records; and
• Issuing documents.

The extrapolation of staff hours spent on these activities for the EB-5 program served as an input to determine the times required to adjudicate the subject forms. In addition, depending on the particular benefit request, USCIS may conduct additional activities. For example, Forms I-829 and I-956H may include conducting fingerprint-based background checks.

In addition to using these data to set EB-5 fees, completion rates help determine appropriate staffing allocations to handle projected workload. Completion rates may change between IEFA fee reviews based on more recent estimates, data availability, or subsequent regulatory or policy changes. Table 5 displays the completion rates for EB-5 immigration benefit requests in this proposed rule.

For Forms I-956G, Regional Center Annual Statement; I-956H, Bona Fides of Persons Involved with Regional Center Program; and I-956K, Registration for Direct and Third-Party Promoters, USCIS did not use completion rates in the analysis of those immigration benefit request fees which results in proposed fees that are lower than they would be if a completion rate was used.^[36] In the ABC model for this proposed rule, Forms I-956G, I-956H, and I-956K include fewer activities, and thus lower costs, than other EB-5 workloads. For example, Forms I-956G, I-956H, and I-956K do not use the Make Determination activity, which is the adjudication activity in the fee review. As such, these proposed fees are much lower than other proposed fees in this rule. This analysis is consistent with other USCIS fee rules, which do not use completion rates for every workload. See, e.g.,88 FR 402, 446-447 (Jan. 4, 2023). While proposed fees for I-956G, I-956H, and I-956K are significantly lower than other proposed fees in this rule, it is still important for USCIS to recover these costs through the proposed fees. As noted previously, DHS is authorized by the EB-5 Reform Act to charge for “fees for services provided under sections 203(b)(5) and 216A of such Act (8 U.S.C. 1153(b)(5) and 1186b) at a level sufficient to ensure the full recovery only of the costs of such services” and additional fees. SeePublic Law 117-103, div. BB, sec. 106(b) and 106(c). Because USCIS relies almost entirely on fee revenue, in the absence of a fee schedule that ensures full cost recovery, USCIS would be unable to sustain an adequate level of service, let alone meet processing time goals. By proposing separate fees for Forms I-956G, I-956H, and I-956K, DHS ensures that USCIS will have the resources to complete these workloads rather than force USCIS to make trade-offs or shift resources to complete these workloads.

3. Legacy Workloads

DHS includes the cost of legacy EB-5 workloads in the FY 2024/2025 fee review because of their significant effect on the EB-5 fee study results. USCIS estimates that it may terminate 300 regional centers in FY 2024 and FY25, and the average completion rate for each is 108 hours. As explained later in this preamble, DHS proposed to distribute the cost of regional center terminations to the costs of applying for a regional center or seeking investment in a commercial enterprise activity, Forms I-956 and I-956F. Future fee reviews will reevaluate the effects of legacy EB-5 workload and whether it affects USCIS fees.

4. Cost Reallocation

As noted previously, the EB-5 Reform Act directed DHS to conduct a fee study and set fees for EB-5 program-related immigration benefit requests at a level sufficient to recover the costs of providing such services and attaining the goal of completing adjudications, on average, within certain time frames. SeePublic Law 117-103, div. BB, sec. 106(c). The EB-5 Reform Act did not prescribe a method for how DHS was to ( printed page 48526) determine the fees and generally delegated the responsibility to DHS.

The EB-5 Reform Act also authorizes DHS to add an amount to EB-5 program fees by providing that DHS can charge fees in excess of the fee levels described in section 106(c), in an amount equal to the amount paid by all other classes of fee-paying applicants for immigration benefits, to cover or reduce the costs of processing benefit requests that are processed with no fee or a reduced fee. Public Law 117-103, div. BB, sec. 106(c):

Fees in excess of the fee levels described in subsection (b) may be charged only—(1) in an amount that is equal to the amount paid by all other classes of fee-paying applicants for immigration-related benefits, to contribute to the coverage or reduction of the costs of processing or adjudicating classes of immigration benefit applications that Congress, or the Secretary of Homeland Security in the case of asylum applications, has authorized to be processed or adjudicated at no cost or at a reduced cost to the applicant.

Because section 106(c) states that fees may be charged, DHS has decided not to use that authority to add an amount to EB-5 fees to support costs incurred to process all forms for which the fees are waived, exempted, or held below projected cost. As a result, the proposed EB-5 fees would not fund a proportionate share of workload without fees and workload with fees that do not recover full cost.

DHS interprets section 106(c) to authorize USCIS to charge EB-5 program filers for costs that USCIS incurs to adjudicate certain fee exempt, fee waived, reduced fee, and humanitarian immigration benefits. Next, that provision recognizes that DHS sets USCIS fees at the level required to recover immigration adjudication and naturalization service costs, while also requiring fee-paying applicants to cover some of the costs of applications processed at no or reduced cost (through fee reductions exemptions or fee waivers). See, e.g.,88 FR 402, 450-451 (Jan. 4, 2023). Thus, section 106(c) recognizes that DHS historically sets fees as authorized by INA section 286(m), 8 U.S.C. 1356(m), in a manner that allows some filers to not pay any fees, or pay lower fees, while requiring others to pay higher fees that may otherwise be needed to cover the costs associated with processing their benefit requests. Id.

However, section 106(c)(1) contains inconsistencies with how DHS has historically set USCIS fees. First, section 106(c)(1) states, in relevant part (emphasis added), “amount equal to the amount paid . . . to cover . . . requests . . . processed with no fee or a reduced fee . . . .” However, there is no such “equal” amount.^[37] Instead, DHS proportionally assigns costs incurred to provide services for which USCIS does not receive revenue based on the ability-to-pay principle in Government Accountability Office (GAO) fee setting guidance ^[38] and the full cost recovery authority in 8 U.S.C. 1356(m), balancing access, affordability, equity, and benefits to the national interest while providing USCIS with the funding necessary to maintain adequate services.^[39] For example, the cost reallocation to cover free or reduced fee services added in the FY 2016/2017 fee rule ranged from a negative amount (reduced below cost) to $5,016. The cost reallocation assigned to Form I-140, Petition for Immigrant Worker, was $197; Form N-600, Application for Certificate of Citizenship, was $330; and Form I-485, Application to Register Permanent Residence or Adjust Status, was $321.^[40] Because there is no equal amount to impose, DHS must interpret what constitutes an amount “equal” for the EB-5 fees.

Second, section 106(c)(1), states, in part, “classes of immigration benefit applications that Congress, or the Secretary of Homeland Security in the case of asylum applications.” (Underlining added). As stated earlier, DHS uses cost reallocation to assign costs of all fee exemptions and waivers under INA section 286(m). Because section 106(c)(1) only mentions asylum applications, it could be interpreted to preclude the transfer of the costs of other fee exemptions to the EB-5 workload.^[41] Because the language describing what no cost and reduced costs may be covered by EB-5 fee filers is inconsistent with how USCIS has historically set fee, DHS must interpret what costs are recoverable.

DHS believes that exercising the section 106(c)(1) authority would likely result in litigation, thus preventing or delaying USCIS from implementing the new fees, meeting the processing time goals, complying with the EB-5 Reform Act, and receiving the revenue from the new fee schedule. Because the total estimated amount of free and reduced service costs that the EB-5 fees would fund is only around $47 million, and that amount is not a significant portion of the USCIS budget, DHS has determined that amount can be borne by a commiserate reduction in USCIS carryover balances and reserves. Furthermore, the One Big Beautiful Bill Act ^[42] establishes additional fees for asylum applications, which may provide USCIS with supplementary revenue to cover asylum costs. Therefore, after considering that costs caused by such litigation could exceed the fees that would be collected by our exercise of the section 106(c)(1) authority, DHS is proposing no cost reallocation in this rule. This proposed action would result in USCIS not recovering its full costs because the amount that the EB-5 fees would contribute to covering the costs of free services (and currently funded with the existing fees) could not be recovered from other fee payers in this rule. DHS appreciates comments specifically on the authority provided in section 106(c)(1) to use EB-5 program fees to fund the processing of other USCIS requests.

5. Regional Center Termination Costs

As stated previously, INA sec. 203(b)(5)(J), 8 U.S.C. 1153(b)(5)(J), requires DHS to terminate a regional center that does not pay the Integrity Fund fee. DHS may also terminate a regional center based on non-compliance with other applicable ( printed page 48527) requirements. See e.g. INA 203(b)(5)(E)(vii)(III), 8 U.S.C. 1153(b)(5)(E)(vii)(III). Terminations are integral to maintain the integrity of the program. USCIS incurs costs for termination, and those costs have generally been funded from EB-5 request fees. USCIS previously used revenue from Forms I-956 and I-956F to recover the cost of regional center terminations. In previous fee rules, the time spent to terminate the designation of regional centers was part of the completion rate along with other adjudicative work. For example, the proposed fee rule used a completion rate of 108.5 hours for Form I-956 and it included hours spent on regional center terminations. See88 FR 402, 509 (Jan. 4, 2023).

In this rule, DHS proposes to continue recovering the cost of regional center terminations with the fees for Forms I-956 and I-956F. In the EB-5 fee study, USCIS estimated the cost of regional center terminations separate from any other benefit request. USCIS determined the cost of regional center terminations by using the same methodology as other IPO workloads in the ABC model for the EB-5 fee study. USCIS estimated a completion rate of 108 hours for regional center terminations. See Table 5 of this preamble. The average annual total cost of these terminations is approximately $6.8 million in the ABC model.^[43] See the fee study in the docket for more information.

It would not be practical for USCIS to collect a fee specifically for terminations. It would be administratively burdensome for USCIS to attempt to collect a fee for terminations from regional centers during the process of termination, after already collecting fees relating to the filing of Forms I-956 and I-956F. USCIS also anticipates that collection of such a fee at the termination stage is impractical because entities facing termination of regional center designation may opt not to pay the fee at that stage, especially given that the termination itself may be based on failure to pay the Integrity Fund fee. For example, USCIS may terminate a regional center if it does not consent to an audit. See INA 203(b)(5)(E)(vii)(III), 8 U.S.C. 1153(b)(5)(E)(vii)(III). USCIS may also terminate the designation of any regional center that does not pay the EB-5 Integrity Fund fee within 90 days of the due date. See INA 203(b)(5)(J)(iv)(II), 8 U.S.C. 1153(b)(5)(J)(iv)(II).

While the EB-5 Reform Act created the EB-5 Integrity Fund, the listed uses of the fund do not explicitly include typical adjudication activities. Instead, it explicitly mandates use for various compliance, fraud investigation, audit, and site visit activities. See INA 203(b)(5)(J)(iii), 8 U.S.C. 1153(b)(5)(J)(iii). As stated later in this preamble, USCIS will also use the EB-5 Integrity Fund to audit regional centers to ensure compliance with EB-5 requirements and review the flow of investor capital into capital investment projects. See section V of this preamble. Terminations of regional center designations are a function of administering the EB-5 program generally for which USCIS incurs costs and which may occur for a variety of reasons ranging from voluntary withdrawal to non-compliance with various legal requirements (which may be either discretionary or mandatory). See e.g.8 CFR 204.6(m)(6)(vi); INA 203(b)(5)(E)(vii)(III), 8 U.S.C. 1153(b)(5)(E)(vii)(III); INA 203(b)(5)(F)(v)(II), 8 U.S.C. 1153(b)(5)(F)(v)(II); INA 203(b)(5)(G)(iii)(II)(dd), 8 U.S.C. 1153(b)(5)(G)(iii)(II)(dd); INA 203(b)(5)(H)(iv), 8 U.S.C. 1153(b)(5)(H)(iv); INA 203(b)(5)(I)(iv), 8 U.S.C. 1153(b)(5)(I)(iv); INA 203(b)(5)(J)(iv)(II), 8 U.S.C. 1153(b)(5)(J)(iv)(II); INA 203(b)(5)(N), 8 U.S.C. 1153(b)(5)(N); and INA 203(b)(5)(O), 8 U.S.C. 1153(b)(5)(O). Prior to enactment of the EB-5 Reform Act and creation of the EB-5 Integrity Fund, DHS paid for the costs of terminating regional center designations through request fees for the former Form I-924. DHS has continued to fund these costs through request fees for Form I-956 and Form I-956F after the enactment of the EB-5 Reform Act. The EB-5 Integrity Fund does not explicitly provide a separate revenue stream to pay for such costs. Consequently, DHS will continue with its historic practice and fund those costs from the request fees proposed in this rule.

C. EB-5 Fee Study Projected Costs and Revenue

1. EB-5 Fee Study Cost Projections

In developing the EB-5 fee study cost projection, IEFA non-premium costs were considered in addition to EB-5 program costs.^[44] Therefore, the EB-5 fee study cost projection accounts for payroll and non-payroll for on-board and new staff, inflation, resource requirements or adjustments, and the removal of costs associated with temporary programs. USCIS started with its general FY 2024 Operating Plan. USCIS then made the following adjustments in the EB-5 fee study:

• Added $317,000 to account for COVID-19 mandatory cuts to IPO expenses, including general expenditures, which represents all costs that are not related to pay or employee benefits (e.g., supplies, training, and travel);
• Added staffing to support the EB-5 program, for a total of approximately 334 employees (FTEs) across multiple USCIS offices (237 FTEs in IPO, nine (9) FTEs in Administrative Appeals Office, two (2) FTEs in Office of the Chief Counsel, 86 FTEs in Fraud Detection and National Security Directorate). This new staffing ^[45] is necessary to meet the processing time goals of the EB-5 Reform Act;

• Accounted for pay inflation and promotions/within-grade increases, which includes annual Federal employee pay, cost of living adjustments, and new employees who are not related to the EB-5 program. The assumed inflation rate was 2 percent for FY 2024 and FY 2025; and
• Considered net additional costs, such as the costs of additional budget items. For example, USCIS added $50 million to the operating plan in each year to increase the budget for the interagency agreement with U.S. Department of State.^[46]

Table 6 below is a summary from the FY 2024 IEFA non-premium cost projection to the FY 2024/2025 annual average cost projection. The FY 2024/2025 annual average cost projection is estimated to be approximately $5,315.9 million. ( printed page 48528)

Additionally, USCIS incorporated biometric services costs into proposed EB-5 fees, consistent with the approach in the FY 2022/2023 fee rule. See88 FR 402, 484-485 (Jan. 4, 2023); 89 FR 6194, 6277-6278 (Jan. 31, 2024).

2. EB-5 Fee Study Revenue Projections

USCIS' revenue projections are informed by internal immigration benefit request receipt forecasts agreed upon by the VPC.^[48] To project EB-5 program revenue, USCIS develops petition volume projections using all available data at the time. USCIS uses statistical modeling, immigration receipt data, and internal assessments of future developments (such as planned immigration policy initiatives) to develop workload volume projections. All relevant USCIS directorates and program offices are represented on the VPC. The VPC forecasts USCIS workload volume using statistical forecasts and subject-matter expertise from various directorates and program offices. Input from these offices helps refine the statistical volume projections. The VPC reviews short- and long-term volume trends. In most cases, time series models provide volume projections by form type. Time series models use historical receipt data to determine patterns (such as level, trend, and seasonality) or correlations with historical events to forecast receipts. When possible, other, more detailed models are also used to determine relationships within and between different benefit request types. At VPC meetings, the committee members deliberate on the provided forecast, consider alternatives, and agree to forecast by group consensus.

USCIS then assumes a 100-percent fee-paying rate for each EB-5 petition type to reflect the fact that IEFA EB-5 fees are not eligible for fee waivers or exemptions. Therefore, the projected revenue is based on the IEFA fees USCIS currently charges for EB-5 immigration benefits, which were established by the FY 2022/2023 fee rule, and the anticipated EB-5 petition volumes for FY 2024 and FY 2025. USCIS' current IEFA fees are expected to yield $4,192.3 million of average annual revenue during FY 2024/2025, as seen in Table 7 of this preamble.

3. EB-5 Fee Study Cost and Revenue Differential

The EB-5 fee study identified the difference between anticipated costs and revenue, assuming no changes in fees, to determine whether the existing EB-5 fee schedule is sufficient to recover the projected full cost of providing EB-5 immigration adjudication services or whether a fee adjustment is necessary. Following a fee review, if the revenue forecast is less than the budget forecast, then DHS will generally propose new or increased USCIS fees to cover the budget-revenue ( printed page 48529) shortfall. Otherwise, USCIS may reduce certain costs or services or reduce reserves to cover the difference. Table 8 later in this preamble summarizes the projected EB-5 program cost and current revenue differential.

D. EB-5 Fee Study Results and Proposed Fee Adjustments

Through the EB-5 fee study, USCIS determined that, at current fee levels, projected costs for EB-5 workload in the FY 2024/2025 fee review exceed projected revenue but are lower than projected revenue in other cases. One example of projected costs that exceed projected revenue are the workloads for Forms I-956H and I-956K, which do not have fees and thus do not generate revenue. DHS proposes to adjust the fee schedule at a level that will enable USCIS to better align the costs of administering the EB-5 program, attain the EB-5 processing time goals as provided in the EB-5 Reform Act, and make improvements to the information technology systems used to administer the EB-5 program. In most cases, the proposed fees are lower than the current fees because the proposed fees do not include cost reallocation, as explained earlier in this preamble. See section IV.B.4.

After resource costs are identified, the ABC model distributes them to USCIS' primary processing activities. See the fee study in the docket of this rulemaking for more information on the ABC model, activities, and results described in this section.

Next, the ABC model distributes activity costs to immigration benefit requests. Each total cost result is based on the resources, activities, and various drivers that contribute to the estimated cost of its completion. The ABC model estimates total cost before calculating unit costs. For total costs for EB-5 and other USCIS workloads, see Appendix Table 1 of the fee study included in this docket. For total cost by activity as unit costs, see Appendix Table 2 of the fee study included in this docket.

To focus the ABC model and study specifically on the EB-5 program forms, the Department developed Table 8 of this preamble. Table 8 shows the revenue estimate, by EB-5 benefit requests, based on the current fees (set in the FY 2022/2023 fee rule), the total cost of adjudication by EB-5 form type, and the dollar and percent difference between the cost of adjudication and the revenue received for each EB-5 form type. This difference shows that the revenue estimate with current fees exceeds the full cost for these forms in most cases; in other cases, the cost is higher than the revenue because the workload does not have a current fee. As such, DHS is proposing to adjust the EB-5 benefit request fees. Most proposed fees are lower than the current fees while other proposed fees would recover the cost of EB-5 workloads that do not have fees. See Table 1 earlier in this preamble. DHS is proposing the fees in this rule to be aligned with EB-5 workloads, recover projected costs, and achieve the processing time goals of the EB-5 Reform Act, as detailed in the fee study.

1. Proposed EB-5 Immigration Benefit Request Fee Adjustments

The EB-5 program currently encompasses Forms I-526, I-526E, I-829, I-956, I-965F, I-956G, I-956H, and I-956K. In addition, DHS proposes to create a new Form I-527, for legacy workloads, as described later in this section. In accordance with the EB-5 Reform Act and the INA, DHS proposes the following EB-5 immigration benefit request fee adjustments in this rule:

• DHS calculated a proposed fee for Form I-526, Immigrant Petition by Standalone Investor, and Form I-526E, Immigrant Petition by Regional Center Investor, as $9,530 to recover full cost.See proposed 8 CFR 106.2(d)(2)(i). DHS is also proposing the EB-5 Technology Fee, in the amount of $95, be added to the fees for Forms I-526 and I-526E. See proposed 8 CFR 106.2(d)(2)(iii). The total proposed fee for Forms I-526 and I-526E is $9,625 in most cases. Later in this section, the Department further discusses the EB-5 Technology Fee.
• DHS calculated a proposed fee for Form I-527, Amendment to Legacy Form I-526, as $8,000.See proposed 8 CFR 106.2(d)(3). The Department discusses the purpose of the proposed amendment in section IV.B.3 of this preamble.
• DHS calculated a proposed fee for Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status, as $7,860.See proposed 8 CFR 106.2(d)(4).
• DHS calculated a proposed fee for Form I-956, Application for Regional Center Designation, as $28,895 for initial filings and $18,480 for amendments.See proposed 8 CFR 106.2(d)(5).
• DHS also proposes a $29,935 fee for Form I-956F, Application for Approval of Investment in a Commercial Enterprise.See proposed 8 CFR 106.2(d)(6).
• The proposed fee for Form I-956G, Regional Center Annual Statement, is $2,740.See proposed 8 CFR 106.2(d)(7).
• The proposed fee for Form I-956H, Bona Fides of Persons Involved with Regional Center Program, is $55.See proposed 8 CFR 106.2(d)(8).
• The proposed fee for Form I-956K, Registration for Direct and Third-Party Promoters, is $2,740.See proposed 8 CFR 106.2(d)(9).

As discussed earlier, projected volumes and completion rates are two of ( printed page 48530) the main drivers in the EB-5 fee study results. Staffing requirements and costs change as volume or completion rate estimates change. The proposed fees represent consistent application of the methodologies previously outlined in this preamble. In each case, the EB-5 proposed fees are based on the ABC model outputs that meet EB-5 Reform Act processing guidelines.

2. EB-5 Technology Fee

The EB-5 Reform Act authorized USCIS to begin charging a technology fee “. . . in an amount that is not greater than one percent of the fee . . . to make improvements to the information technology systems used by the Secretary of Homeland Security to process, adjudicate, and archive applications and petitions.” SeePublic Law 117-103, div. BB, sec. 106(c).

Through this rule, DHS proposes that the EB-5 technology fee will only apply to Form I-526, Immigrant Petition by Standalone Investor, and Form I-526E, Immigrant Petition by Regional Center Investor.^[50] First, DHS calculated the proposed fee of $9,530 for Forms I-526 and I-526E, as described earlier in the preamble. One percent of $9,530 is $95.30. DHS rounded $95.30 down to the nearest $5 increment to calculate the proposed $95 EB-5 technology fee.^[51] As such, the proposed $95 EB-5 technology fee is approximately 0.997 percent of the proposed fees for forms I-526 and I-526E. This approach ensured that the applicable immigration benefit requests did not exceed 1 percent of the form fee and yielded a technology fee of $95 per form. See proposed 8 CFR 106.2(d)(2)(iii). This amount is included in the total form fee for initial applications of Forms I-526 and I-526E, as noted in Table 1 of this preamble.

USCIS will use this fee revenue to move IPO from a paper-based filing system to a modern electronic process for the entire IPO case life cycle and make other technological and infrastructure improvements. DHS will review the adequacy of the technology fee along with all other fees in each biennial fee review as required by the CFO Act.

3. Form I-527, Amendment to Legacy Form I-526

Under section 203(b)(5)(M) of the INA, 8 U.S.C. 1153(b)(5)(M), certain good faith investors may retain eligibility following termination of their regional center or debarment of their NCE or JCE. USCIS interprets section 203(b)(5)(M) of the INA to apply to investors who filed Form I-526 petitions for classification before the EB-5 Reform Act was enacted. Therefore, USCIS proposes to create Form I-527, Amendment to Legacy Form I-526, for investors who filed their petitions before the EB-5 Reform Act was enacted who choose to amend their petition in order to retain their eligibility under section 203(b)(5)(M) of the INA, 8 U.S.C. 1153(b)(5)(M), where their regional center is terminated or their NCE or JCE is debarred. See section VI.J, Paperwork Reduction Act (PRA), for a more complete description of Form I-527.

V. EB-5 Integrity Fund Fees and Penalties

A. EB-5 Integrity Fund

The EB-5 Reform Act established a special fund to be known as the EB-5 Integrity Fund. INA sec. 203(b)(5)(J), 8 U.S.C. 1153(b)(5)(J). The Integrity Fund is to be used by DHS for the following:

(1) Conducting investigations based outside of the United States, including monitoring and investigating program-related events and promotional activities and ensuring that an investor's funds were obtained from a lawful source and through lawful means;

(2) Detecting and investigating fraud or other crimes;

(3) Determining whether regional centers, NCEs, JCEs, and investors (and their spouses and children) comply with U.S. immigration laws;

(4) Conducting audits and site visits; and

(5) For other purposes as DHS determines necessary.

INA sec. 203(b)(5)(J)(iii), 8 U.S.C. 1153(b)(5)(J)(iii).

In FY 2023, USCIS issued a statement of policy and interpretive rule in the Federal Register regarding the EB-5 Integrity Fund Fee of $20,000 or $10,000. See88 FR 13141 (Mar. 2, 2023). The notice explained how regional centers should determine the amount of the fee and provided the process for how to pay it. USCIS imposed the EB-5 Integrity Fund Fee without soliciting public comment because the fees are explicitly provided for in the EB-5 Reform Act.

B. Current EB-5 Integrity Fund Fees

The EB-5 Integrity Fund is a separate fund maintained at the U.S. Department of the Treasury for collecting the fees designated in the EB-5 Reform Act. The INA makes the funds available to the Secretary for the permissible purposes outlined earlier. As USCIS solely administers the EB-5 program, DHS proposes that USCIS will continue to determine how to use these funds as appropriate to meet the statutory requirements.

These fees are to be used by USCIS to execute auditing activities for regional centers to ensure compliance with EB-5 requirements and review the flow of investor capital into capital investment projects. Table 9 identifies the fees as delineated in the EB-5 Reform Act.

Each Form I-526E filer is required to pay $1,000 to the EB-5 Integrity Fund, in addition to any form fees. USCIS began collecting the new fee in 2022, as required by the EB-5 Reform Act. See88 FR 13141, 13142 n.1 (Mar. 2, 2023). Each regional center is required to make an annual payment into the EB-5 Integrity Fund in relation to the number of total investors in its new commercial enterprises in the preceding fiscal year. Per the new provisions of the INA added by the EB-5 Reform Act, regional centers with 21 or more total investors are required to pay $20,000 annually to the EB-5 Integrity Fund. Regional centers with 20 or fewer total investors are required to pay $10,000 annually to the EB-5 Integrity Fund. The INA authorizes the Secretary to increase these amounts by regulation as may be necessary to ensure that the amounts in the EB-5 Integrity Fund are sufficient to carry out its designated purposes. See INA sec. 203(b)(5)(J)(ii)(III), 8 U.S.C. 1153(b)(5)(J)(ii)(III). DHS is proposing to increase these amounts, as discussed in the next section.

The measurement of the number of investors in a regional center and the timing of EB-5 Integrity Fund Fee payments is discussed in Section V.D.2. ( printed page 48531)

DHS believes that the INA's language is plain and clear that each designated regional center must pay the Integrity Fund Fee annually to avoid the penalties required by the Act. See INA sec. 203(b)(5)(J)(iv)(I), 8 U.S.C. 1153(b)(5)(J)(iv)(I) (“if any regional center does not pay the fee required”) (emphasis added); INA sec. 203(b)(5)(J)(iv)(II), 8 U.S.C. 1153(b)(5)(J)(iv)(II) (“terminate the designation of any regional center that does not pay the fee required under clause (ii)”) (emphasis added). DHS notes that some stakeholders have read the INA's language as excluding regional centers designated before the EB-5 Reform Act from needing to pay the Integrity Fund Fee because the INA orders DHS to collect the annual fee “from each regional center designated under subparagraph (D).” INA sec. 203(b)(5)(J)(ii)(I), 8 U.S.C. 1153(b)(5)(J)(iv)(I). They state that because pre-EB-5 Reform Act regional centers were not designated under subparagraph (D), they are not subject to the new provisions and requirements.^[52]

DHS reiterates that the statutory language is clear in that these new provisions of the INA added by the EB-5 Reform Act, including the required fees and penalties, also apply to previously designated regional centers as of the date of enactment. Section 103(a) of the EB-5 Reform Act repealed section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note), which was the authority that established and formerly authorized the Regional Center Program, and under which regional centers were previously designated. Public Law 117-103, div. BB, sec. 103. The EB-5 Reform Act moved the relevant provisions regarding regional centers, including the authority for their designation, to section 203(b)(5)(E) of the INA, 8 U.S.C. 1153(b)(5)(E), titled “Regional Center Program.” Section 203(b)(5)(E)(i) of the INA, 8 U.S.C. 1153(b)(5)(E)(i), then provides for visa allocations for post-EB-5 Reform Act regional center investors participating in the program involving regional centers “which [have] been designated by the Secretary of Homeland Security on the basis of a proposal for the promotion of economic growth.” The EB-5 Reform Act also added various new provisions to the INA to regulate designated regional centers in accordance with this newly codified statutory designation authority, including the requirement to file an annual statement under section 203(b)(5)(G)(i) of the INA, 8 U.S.C. 1153(b)(5)(G)(i), and to then pay an annual fee into the EB-5 Integrity Fund under section 203(b)(5)(J)(ii)(I) of the INA, 8 U.S.C. 1153(b)(5)(J)(ii)(I). Applying these provisions of the INA added by the EB-5 Reform Act, specifically the EB-5 Integrity Fund Fee and penalties, prospectively to existing regional centers is the best reading of the statute because they are designated regional centers under (E), as there is no longer any other existing authority under which they may be designated. Further, to deem them previously designated, and not designated under (E), could create a legal fiction and lead to arbitrary results. For example, that could mean that DHS has no legal authority to regulate those entities, verify compliance with EB-5 laws, protect the investors, and penalize regional centers that commit fraud, among other important measures.

Lastly, DHS does not believe applying these provisions of the INA added by the EB-5 Reform Act in this manner is impermissibly retroactive. Although previously designated regional centers became regional centers before the EB-5 Reform Act's enactment, the EB-5 Reform Act did not explicitly exclude them from meeting the new requirements. A regional center is unlike a typical petitioner or applicant who generally submits one benefit request and establishes eligibility; rather, a regional center seeks a designation that they must actively maintain and for which they must annually demonstrate compliance to DHS.^[53] Because the previous regional center statutory authority was repealed, those that seek to maintain their designation must comply with the new requirements added to the INA by the EB-5 Reform Act. In accordance with the statute, DHS is proposing to continue to apply these requirements prospectively, as of the date of the EB-5 Reform Act's enactment, to all regional centers.

C. Proposed Inflation Adjustment to EB-5 Integrity Fund Fees

DHS proposes to increase EB-5 Integrity Fund fees by the rate of inflation since enactment of the EB-5 Reform Act on March 15, 2022. The EB-5 Reform Act authorized DHS to adjust the Integrity Fund fees as necessary to ensure that amounts in the Fund are sufficient to carry out the permissible uses of the fund. See INA sec. 203(b)(5)(J)(ii)(III), 8 U.S.C. 1153(b)(5)(J)(ii)(III); see also8 U.S.C. 1153(b)(5)(J)(iii). While the authority for these fees is fairly new, and USCIS is adjusting to this new revenue stream, increasing the fees by the amount of inflation will allow USCIS to recover more of its operating costs associated with maintaining the integrity of the EB-5 program and help sustain USCIS efforts in future years.

DHS has a long history of adjusting fees by inflation; therefore, the rate of inflation is a particularly rational method on which to base an adjustment of those fees. DHS regularly increases certain fees by inflation because of specific statutory authority to do so. See, e.g.,88 FR 89539 (Dec. 28, 2023) and 87 FR 18227 (Mar. 30, 2022). For over 24 years,^[54] Congress has indicated that an increase in costs through inflation, more specifically the ( printed page 48532) Consumer Price Index for All Urban Consumers (CPI-U), is a rational reason for DHS to adjust a USCIS fee.^[55] In the FY 2022/2023 fee rule, DHS limited some fee increases by inflation. See89 FR 6194, 6212 (Jan. 31, 2024). In that same fee rule, DHS finalized a regulatory mechanism to adjust USCIS fees by inflation when they are not set by statute. See89 FR 6194, 6281-6282 (Jan. 31, 2024); see also8 CFR 106.2(d).

DHS proposes to adjust Integrity Act fees by using the change in the CPI-U from the first half of 2022 to the first half of 2024. In the first half of 2022, the CPI-U was 288.347, and in the first half of 2024, it was 312.145.^[56] Therefore, between the first halves of 2022 and 2024 respectively, the CPI-U increased by 8.25 percent.^[57] If this percentage increase were applied to the current fees, the I-526E EB-5 Integrity Fund Fee of $1,000 would increase to $1,085; the $10,000 Regional Center Integrity Fund Fee would increase to $10,825; and the $20,000 Regional Center Integrity Fund Fee would increase to $21,650.^[58] See proposed 8 CFR 106.2(d).

DHS considered different date ranges and the resulting percentage change in CPI-U before determining the proposed inflation adjustment. For example, DHS considered using the change in CPI-U from March 2022 to November 2024, which was approximately 9.74 percent.^[59] This approach would use the most recent data at the time of this writing, but it would also be subject to monthly volatility. Yet another alternative approach would be to use June 2022 to June 2024, similar to a premium processing fee increase, which would be approximately 6.03 percent.^[60] DHS proposes to use the 8.25 percent change from the first half of 2022 to the first half of 2024 because it marks the 2-year anniversary of the EB-5 Reform Act without relying on monthly variation in the index. The proposed percentage increase may be considered a midrange estimate for inflation because it is less than the inflation changes using monthly data but more than the change between June 2022 and June 2024. In any case, it is likely that inflation will continue to increase before DHS could adopt this proposed increase in a final rule. Therefore, the fee amounts in the final rule will be based on inflation as of the date the final rule is scheduled to take effect, and they may increase slightly to account for the time required to address comments, draft and publish a final rule. That increase will be foreseeable and based on a non-variable calculation and a well-known published source, and will, therefore, be a logical outgrowth of the proposed rule. Otherwise, DHS would set fees in the final rule at a level that would not recover the cost of inflation at the time of a final rule.

Integrity Fund revenue has varied significantly, making it harder for USCIS to plan how to use it. In FY 2023 and FY 2024, the Integrity Fund collected approximately $8 million and $11 million, respectively. In FY 2025, forecasts with the current Integrity Fund fees range from approximately $10 to $14 million, which includes back payments from FY 2023 and FY 2024. The proposed increase to Integrity Fund fees may provide approximately $1 million in additional revenue and better protect the purchasing power of USCIS investments in staffing and information technology for the EB-5 program.

D. EB-5 Integrity Fund Penalties

The EB-5 Reform Act directs DHS to impose penalties for failing to pay and for late payments of the EB-5 Integrity Fund fees. INA sec. 203(b)(5)(J), 8 U.S.C. 1153(b)(5)(J). Specifically, the law requires a reasonable penalty fee (to be paid to USCIS and deposited into the Integrity Fund when collected) on a regional center that does not pay the annual Integrity Fund fee within 30 days after the date on which such fee is due. INA sec. 203(b)(5)(J)(iv), 8 U.S.C. 1153(b)(5)(J)(iv). USCIS must terminate the designation of any regional center that does not pay the fee within 90 days after the date on which such fee is due. INA sec. 203(b)(5)(J)(iv)(II), 8 U.S.C. 1153(b)(5)(J)(iv)(II).

In its notice of March 2, 2023, USCIS articulated these requirements. See88 FR 13141, 13143-13144 (Mar. 2, 2023). USCIS announced that it would comply with the requirement that it terminate the designation of any regional center that does not pay the full required fee within 90 days after the date on which such fee is due, after providing a notice of intent to terminate and the opportunity for a regional center to prove that the fee was paid in the proper amount by the due date before sending a notice of termination. Id. However, USCIS decided that, as a matter of discretionary enforcement policy, it will not begin charging a late fee until the amount of the late fee, as well as the process for collecting the late fee is finalized. Id. DHS proposes the late fee as required in this rule and explains its rationale for the amount of the late fee in the section that follows.

1. Proposed Penalties

DHS proposes to impose the following penalties for paying the Integrity Fund fee late (31 days or more after it is due):

• Ten percent of the required integrity fee (e.g., 10 percent of $10,000 or $20,000, subject to adjusting such required amounts for inflation) for a regional center that pays its fees on day 31 through and including day 60 after the due date.
• Twenty percent of the required integrity fee for a regional center if their fee is paid on day 61 through and including day 90 after it is due.
• Terminate a regional center designation if it fails to pay the fee within 90 days of the date on which such fee is due.

By requiring a “reasonable” penalty fee in section 203(b)(5)(J)(iv) of the INA, 8 U.S.C. 1153(b)(5)(J)(iv), Congress has assigned DHS the authority to give meaning to that statutory term. See Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244, 2263 (2024) (“In a case involving an agency, of course, the statute's meaning may well be that the agency is authorized to exercise a degree of discretion. Congress has often enacted such statutes. For example, some statutes `expressly delegate' to an agency the authority to give meaning to a particular statutory term. Others empower an agency to prescribe rules to `fill up the details' of a statutory scheme, or to regulate subject to the limits imposed by a term or phrase that `leaves agencies with flexibility,' such as `appropriate' or `reasonable.' ”) (internal citations omitted).

In determining what would constitute a reasonable penalty, DHS considered two main factors. First, DHS looked to the EB-5 Reform Act to find whether Congress codified any penalty percentages for this program. The EB-5 Reform Act authorizes graduated sanctions of up to 10 percent of ( printed page 48533) petitioner capital for regional centers that fail to submit an annual statement or that commit certain violations. INA sec. 203(b)(5)(G)(iii), 8 U.S.C. 1153(b)(5)(G)(iii). Although the 10-percent penalty in the EB-5 Reform Act is a capped percentage of petitioner capital per regional center, because Congress has designated that percentage as appropriate, DHS believed that 10 percent was a reasonable starting point in setting a penalty. Second, DHS considered whether the dollar amount itself was reasonable. In this case, the 10 percent would amount to $1,000 or $2,000 based on the required amounts prior to adjusting for inflation depending on the regional center, which DHS believes is a reasonable late charge for failing to pay the fee after 30 days. The 20 percent would amount to $2,000 or $4,000 based on the required amounts prior to adjusting for inflation depending on the regional center, which DHS believes is a reasonable late charge for failing to pay the fee after 60 days. The goal of the proposed penalties program is to ensure that penalties are effective in deterring noncompliance. In addition to the amount being consistent with penalties that the law requires in similar contexts, DHS believes that the proposed penalties effectuate the authority of the statute by providing an amount that balances affordability, ability to pay, and some measure of accountability for the violation. The amounts will encourage payment and ensure timely collection of the EB-5 Integrity Fund fees.^[61]

DHS recognizes that the statute did not explicitly set a separate 60-day penalty for failing to timely pay the fee. DHS proposes a graduated fee structure because it is common that late fees for payments of debts and fees generally increase as the delinquency period increases and subsequent missed or delayed payments occur.^[62] Thus, DHS decided to increase the late fee to 20 percent when the fee became more than 31 days past due. As stated earlier, the proposed penalties effectuate the authority of the statute and are sufficient to encourage payment and ensure timely collection of the EB-5 Integrity Fund fees. There is an operational burden on USCIS if it is forced to expend resources on program integrity without timely receiving the funds needed to administer the EB-5 program. As such, DHS believes there is justification for a higher fee after 31 days.

DHS believes it is equitable to provide another opportunity for regional centers to remedy the failure to pay before proceeding to termination. Further, a graduated late penalty will further support the goal of encouraging payment and ensure timely collection of the Integrity Fund fee, without resulting in a significant burden to the agency. DHS believes that the proposed penalties are reasonable because they strike the necessary balance between the need for the fees and the financial ability of a regional center to pay them when required.

2. Calculation of Investors To Determine Amount Owed

The EB-5 Reform Act sets the standard annual fee at $20,000 for each designated regional center. INA sec. 203(b)(5)(J)(ii), 8 U.S.C. 1153(b)(5)(J)(ii). However, for those with “20 or fewer total investors in its new commercial enterprises” during the preceding fiscal year (October 1-September 30), the annual fee is reduced to $10,000. Id. Although “investor” is not specifically defined for purposes of INA sec. 203(b)(5), 8 U.S.C. 1153(b)(5), it is used extensively throughout that section to refer to individuals seeking classification, or classified, under INA sec. 203(b)(5) 8 U.S.C. 1153(b)(5) ( i.e. I-526 and I-526E petitioners). For purposes of INA sec. 216A, “alien investor” is defined as “an alien who obtains the status of an alien lawfully admitted for permanent residence (whether on a conditional basis or otherwise)” under INA sec. 203(b)(5), 8 U.S.C. 1153(b)(5). See INA 216A(f)(1), 8 U.S.C. 1186b(f)(1). DHS recognizes that there is no legal requirement that an investor remain invested in an NCE within a specific time period after they file Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status. See INA sec. 216A(d)(1)(A), 8 U.S.C. 1186b(d)(1)(A). DHS has, therefore, determined that the filing of the Form I-829 is an appropriate demarcation for purposes of determining the number of “total investors in the preceding fiscal year” as intended by the EB-5 Reform Act.^[63] The Department welcomes public comments on that determination.

Accordingly, DHS proposes to define “total investors” in this context to include investors from the point of filing a petition for classification (Forms I-526, Immigrant Petition by Standalone Investor, or I-526E, Immigrant Petition by Regional Center Investor) through the point of filing a petition for removal of conditions (Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status). To calculate the total, DHS proposes to subtract the number of Forms I-829 associated with the regional center filed at any time on or before September 30 of that fiscal year (including filings from prior fiscal years) from the total number of pending and approved Forms I-526 associated with the regional center (filed on or before June 30, 2021) and Forms I-526E, Immigrant Petition by Regional Center Investor (filed on or after June 1, 2022, the date USCIS published the form) associated with the regional center filed at any time on or before September 30 of that same fiscal year (including filings from prior fiscal years). Proposed 8 CFR 106.2(d)(10)(i)(C). A Form I-829 that is filed separately by a spouse or child of an investor that obtained conditional permanent resident status based on their relationship to the investor and was not included on the principal investor's Form I-829 will be excluded from the total investor calculation. For example, if a regional center had 30 associated Form I-526 petitions, 10 associated Form I-526E petitions, and 20 associated Form I-829 petitions filed on or before September 30, of a given year, USCIS would estimate that regional center has 20 total investors in its NCEs for the applicable fiscal year for purposes of calculating the applicable Integrity Fund fee.

USCIS has followed this policy since it was initially developed through the Notice of EB-5 Regional Center Integrity Fund Fee. As described in the Notice of EB-5 Regional Center Integrity Fund Fee, USCIS considered alternative methods of calculating the number of investors; however, it determined that those options generally would either not capture the entire population or involve manual calculations that USCIS believes would place an unreasonable burden on the Agency's limited resources and be confusing and burdensome to the investor or regional center populations. ( printed page 48534) See88 FR 13141, 13143 (Mar. 2, 2023). For example, USCIS considered generally counting only the Forms I-526 that were filed within 2 years of the applicable period used for determining the EB-5 Integrity Fund fee given the expected 2-year minimum timeframe for the investment, or sustainment period, under the EB-5 Reform Act. INA sec. 203(b)(5)(A)(i); 8 U.S.C. 1153(b)(5)(A)(i). However, that method would likely be underinclusive given that many investors are actively in the process of investing ( i.e., not yet fully invested) when they file their Form I-526 petition as permitted under applicable requirements and, additionally, would not align with the sustainment period for those who filed before the EB-5 Reform Act, which runs approximately to the point of the Form I-829 filing, regardless of when they filed their Form I-526 or made their investment. For Form I-526E petitions filed after the EB-5 Reform Act, USCIS also considered generally counting only Form I-526E petitions whose investments were still within the 2-year period of investment expected under section 203(b)(5)(A)(i) of the INA; however, manual verification of the time period of investment for each regional center investor, rather than conducting a systems inquiry for total petition filings, would exhaust valuable and significant USCIS resources that the agency believes, in the balance, are better used in ensuring timely processing.

USCIS acknowledges the practical limitations of determining how many total investors may be in an NCE during any given fiscal year to ensure that the correct fee is paid. Nonetheless, the Department believes the proposed formula reflects the best interpretation of the statute, ensures that USCIS' limited resources are used most efficiently to ensure compliance with the EB-5 Reform Act, and minimizes the burden on the affected regional centers. DHS notes that 445 Regional Centers successfully paid their FY 2023 Integrity Fund Fees. 473 Regional Centers successfully paid their FY 2024 Integrity Fund Fees. 531 Regional Centers successfully paid their FY 2025 Integrity Fund Fees. There have been no public concerns nor operational concerns with the fee calculation process.

3. Timeline and Payment Process

The INA, as amended by the EB-5 Reform Act, provides that the Integrity Fee is due each year on October 1. INA sec. 203(b)(5)(J)(ii)(I); 8 U.S.C. 1153(b)(5)(J)(ii)(I). As proposed in this rule, the fee would be considered paid timely ( i.e., without penalty) if paid between October 1 and October 31, after which a late payment penalty would apply. Each designated regional center would need to pay the fee to USCIS online via the online form hosted on Pay.gov at Pay.gov EB5—Annual Fee for Regional Center.^[64] Payment of this fee would need to be made by an authorized individual on behalf of a regional center. Proposed 8 CFR 106.2(d)(10)(i)(D). Each designated regional center would need to pay the fee with either a valid credit or debit card ^[65] or by authorizing an Automated Clearing House Debit transaction where the regional center provides its U.S. bank routing and checking account numbers to have money debited directly from its U.S. bank account. Id. DHS proposes to codify that fees must be paid using these methods to reduce administrative burdens and processing errors associated with fee payments. Requiring the use of a specific form of payment would not prevent regional centers from paying the required fees. Other payment methods, such as money orders and checks, require time-intensive procedures to input, reconcile, and verify receipts and deposits. USCIS can spend the time it would use for complying with payment processing requirements to adjudicate requests for benefits.

For each fiscal year after this rule becomes final, payments received November 1 through November 30 would require a late fee equal to 10 percent of the Integrity Fee amount to be paid in addition to the Integrity Fee. Payments received December 1 through December 30 would require an additional 20 percent to be added to the Integrity fee amount as a late fee.

If the regional center does not pay the full required fee, including the relevant 10 or 20 percent late fee, if assessed, before December 31, USCIS would initiate termination of the regional center. Proposed 8 CFR 106.2(d)(10)(ii)(A)-(B). USCIS would terminate the designation of any regional center that does not pay the full required fee within 90 days after the date on which such fee is due ( e.g., a regional center does not make payment, or a regional center pays $10,000 when it owes $20,000, by December 31 of the year the annual fee is due). Proposed 8 CFR 106.2(d)(10)(ii)(C). Termination would not be automatic and USCIS would provide a notice of intent to terminate and the opportunity for a regional center to prove that the fee, and all late fees if applicable, were paid in the proper amount by December 31 before sending a notice of termination. Proposed 8 CFR 106.2(d)(10)(ii)(C)(1). The termination of a regional center may be appealed as provided by 8 CFR 103.3. Proposed 8 CFR 106.2(d)(10)(ii)(C)(2).

E. Technical Change

The proposed rule would clarify the process by which an immigrant investor's spouse and children file separate Form I-829 petitions when they are not included in the Form I-829 filed by the immigrant investor.^[66] Generally, an immigrant investor's derivatives should be included in the principal immigrant investor's Form I-829 petition. However, there are situations in which derivatives may not be included on the principal immigrant investor's Form I-829 petition, such as when the immigrant investor dies during the conditional residence period, or when the immigrant investor decides not to continue their conditional permanent resident status. In such circumstances, if the immigrant investor would have otherwise been eligible to have their conditions on status removed, then the derivatives would remain eligible to apply to remove the conditions on their status even if the immigrant investor cannot or will not file a Form I-829 petition.^[67]

The regulations currently in effect do 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, including whether each derivative in such cases should file their own separate Form I-829 petition or whether the derivatives should jointly file on the same petition. This proposed technical change specifies that where the dependent family members cannot be included in the Form I-829 petition filed by the principal investor because that principal is deceased, all dependents (spouse and children) of the deceased investor may ( printed page 48535) be included on a single Form I-829 petition. See proposed 8 CFR 216.6(a)(1)(ii). DHS also proposes that each dependent must file a separate Form I-829 petition in all other situations in which the investor's spouse and children are not included in the investor's Form I-829 petition. See id. DHS notes that the Form I-829 Instructions indicate that if one's spouse and children are not included on their petition to remove conditions, “each dependent must file [their] own petition separately.” ^[68] DHS also recognizes that, for the less than 20 cases potentially impacted annually, there may have been an inconsistent agency practice with respect to when dependents were required to file a separate Form I-829 and seeks to clarify any inconsistency through this rulemaking. Lastly, these technical changes also propose to clarify that when a derivative beneficiary files a Form I-829 petition separately from the principal investor who does not file a Form I-829 petition (whether because of death or otherwise), the timeframe to file such petition is any time within which the principal investor would have been required to make such filing. This clarification aligns with and accords derivative beneficiaries the same process as the principal investor under the statutory requirements for petition filing. See INA sec. 216A(d)(2), 8 U.S.C. 1186b(d)(2).

VI. Statutory and Regulatory Requirements

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

Executive Orders 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 14192 (Unleashing Prosperity Through Deregulation) directs agencies to significantly reduce the private expenditures required to comply with Federal regulations and provides that “any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.”

The Office of Management and Budget (OMB) has designated this rule a “significant regulatory action” under section 3(f) of Executive Order 12866, although not economically significant under section 3(f)(1). Accordingly, the rule has been reviewed by the Office of Management and Budget.

This rule is not an Executive Order 14192 regulatory action because it is being issued with respect to an immigration-related function of the United States. The rule's primary direct purpose is to implement or interpret the immigration laws of the United States (as described in INA 101(a)(17), 8 U.S.C. 1101(a)(17)) or any other function performed by the U.S. Federal Government with respect to aliens. See OMB Memorandum M-25-20, “Guidance Implementing Section 3 of Executive Order 14192, titled `Unleashing Prosperity Through Deregulation' ” (Mar. 26, 2025).

1. Summary

The Department proposes to adjust Employment-Based Immigration, Fifth Preference (EB-5) immigration benefit request fees charged by USCIS. USCIS conducted an EB-5-specific fee study, as required by the EB-5 Reform Act. The fees are proposed to be set at a level that USCIS has determined would enable it to recover the costs of administering the EB-5 program and to allow it to attain the processing time goals and to ensure there are internal procedures and controls in place to try to maximize the likelihood that the statutory goals are met. It would also make improvements to the information technology systems used by DHS to administer the EB-5 program. This rule also proposes to codify elements of the EB-5 Reform Act in regulations, including the establishment of Form I-527.

The fee schedule DHS is proposing could impact approximately 11,260 EB-5 program filings (FY 2024/2025 projected estimate) annually across nine current forms and one new form. For the nine current forms (amounting to 10,805 projected filings), the collective fees would decrease from their current level by about 14.7 percent, or by about $2,259.^[69] DHS estimates that the 10-year and annualized monetized costs could be about $42.1 million and $4.2 million, in order, in undiscounted terms. At a 3 percent discount rate, the figures would be $35.9 million and $3.6 million, in order. At a 7 percent discount rate, the figures would be $29.6 million and $3.0 million, in order. The impacts are summarized in Table 10, in which population figures reflect annualized averages over the 10-year period of analysis and the monetized figures reflect the average annualized equivalence discounted at 7 percent.

In addition to the impacts summarized in Table 10, and as required by OMB Circular A-4, DHS presents the accounting statement showing the anticipated costs and benefits associated with this proposed regulation.^[71]

( printed page 48537)

2. Economic Impacts

a. Monetized Impact Estimates

In introducing the analysis, DHS presents in Table 12 information captured from the preamble (Tables 1-3) to show the current and projected fees for the EB-5 program forms. As is shown, we calculate weighting factor based on the volume for each form relative to the annualized total to generate a weighted average change in fees (which are accounted for as transfers), exclusive of the Form I-527, which this rule is introducing.^[73]

As is shown in the final columns of Table 12, based on the projected volumes in Table 3, and proposed fees, the fees decrease by $2,259 or by 14.7 percent.

The volumes shown represent the average annual forecasts based on the USCIS VPC. The VPC predicts USCIS annual workload volumes using various factors, including statistical forecasts, and subject-matter expertise from various USCIS directorates and program offices, including the IPO, USCIS service centers, the National Benefits Center, and regional, district, and field offices.

The VPC makes projections 7 years out (FY 2024 through FY 2030). In many rulemakings DHS uses a baseline of previous years, usually between three and six. In this case, however, we think that projected volumes present a more salient baseline because there are new forms involved, and the EB-5 Reform Act made substantial changes in key areas of the program. As a result, we cannot be reasonably certain that the past will represent the future. Since the changes are not fully implemented yet, there could be variation in the projections, but we rely on the projected volumes.

Because DHS is normally required to estimate impacts over a 10-year time horizon, for FY 2031 through FY 2033, we simply extend the forecasted value to FY 2034 out from the VPC FY 2024 through FY 2030 Figures.^[74] Table 13 builds the economic impacts applicable to the proposed fee changes for current forms. The final columns report the annual total across all impacted forms, while the final rows report the 10-year average annual figures for each form, in order. While there is a single Form I-956, we have included two columns to account for initial filings (“i”) and amendments (“a”). The reason for parsing them out is that while their current fee is the same ($47,695) their proposed fees will be different ($44,600 and $28,525, in order). It is noted that the new Form I-527, Amendment to Legacy Form I-526, with a projected annual volume of 457, is not included in Table 13. The reason is that this form will incur a different accounting protocol from the other forms and is treated in a separate module. Specifically, the fee impacts associated with this form will be accounted for as a cost while the others will constitute transfers.

Table 13 presents the projected annual volumes as well as the filing fees at the current and proposed levels. Table 13 is set up this way because the volumes are projected to be the same each FY, and for brevity each actual year is therefore not shown. The table also presents the impact as the difference between current and future filing fees, and the final column shows the 10-year totals per form.

As Table 13 reports, based on the volume projections, at current fee rates the costs associated with filing forms for the EB-5 program would be $1,074.8 million over 10 years or $107.5 million annually in undiscounted terms. Based on the proposed future fees, the filing costs could be $830.7 million over 10 years or $83.1 million on an annually in undiscounted terms. The impact (difference) could be a decrease of $244.1 million over 10 years or a decrease of $24.4 million on an annual basis (Table 13). The impacts attributable to the proposed fee changes would represent a net decrease in transfers from requestors to DHS.

b. Costs of the Proposed Rule

In addition to potential impacts pertinent to form related fees, several expected impacts are accounted for as costs. DHS has determined that there would be minor time burden changes applicable to the existing EB-5 Program forms due to this rule. To estimate the opportunity cost of time impacts, we need to rely on a wage bound. This is difficult because EB-5 entities can involve complex business activities. DHS does not have salient information on the jobs the individual filers are involved in, but we assess that most individuals involved in the program investments are primarily involved (for regional centers, NCEs, and JCEs) in the business of arranging loans and financing and managing these efforts applicable to business plans. Therefore, we selected 20 occupations from the Bureau of Labor Statistics (BLS) Standard Occupational Codes (SOC) that we think reasonably capture the individuals involved in these activities. These SOC titles and associated terms mean hourly wage for the detailed industries are reported in Table 14.

The minimum, mid-point, and maximum of the above range are $41.58, $64.72,^[75] and $87.86, in order. However, working recursively, the resulting monetized impacts are only very slightly affected by the wage range and thus, for brevity we will rely on the midpoint to base our estimates. DHS accounts for employee benefits by calculating a benefits-burden applicable to the most recent BLS report detailing the average employer costs for employee compensation for all civilian workers in major occupational groups and industries. The current burden to compensation from benefits is 45 percent.^[76] DHS will rely on this burden ( printed page 48539) to estimate the full costs incurred by new employees, including employee wages and salaries and the full cost of benefits such as paid leave, insurance, retirement, and other benefits. With a benefits-burden multiple of 1.45, hourly compensation is $93.84.^[77]

The current, projected, and change in the time burdens (in hours) are provided in Table 15.

To obtain the impact (opportunity cost) reported in Column E, the volume is multiplied by the change in the burden and by the mid-point compensation ($93.84). Columns F report the annual and 10-year impacts per form, while the bottom rows provide the totals across forms. Based on the information provided, the annual total cost could be $403,721.60 and about $4.04 million over ten years. In addition to the totals, a weight factor is provided in the final column (G), which reflects the weight factor per-form (see Table 12) multiplied by the projected burden change (column D table 15). The weight factors sum to 0.5869 hours, which equates to about 35.2 minutes.

The new Form I-527 impacts would accrue to the direct cost of filing plus the opportunity costs associated with the time burden of filing. The proposed fee is $8,000 and the time burden is estimated at 1.44 hours, which, based on the burdened mid-point compensation (discussed above of $93.84) yields a time-related impact of $135.14 per submission. Adding the two components amounts to $8,135.14 per filing, which, at the projected annual volume (see Table 7, projected receipts 457), generates possible impacts of $3.718 million annually or $37.18 million over 10 years.

For the few cases in which an immigrant investor's spouse and children file separate Form I-829 petitions when they are not included in the Form I-829 filed by the immigrant investor, as is stipulated in the preamble, the proposed revisions to the existing regulations would not impose any additional biometric, travel, or associated opportunity costs. The only costs expected from the rule would be the separate filing fee and associated opportunity cost. The proposed fee for Form I-829 is $7,860 and the time burden is projected to be 4.09 hours. For the dependents we would use a lower wage than was utilized for investors. Without salient information concerning the wages these applicable filers would earn, we will assume they are working at various levels and will rely on the current average wage across all occupations, which is currently $32.66, and is $47.36 when burdened for benefits.^[78] Each filer would face a time burden cost of $176.48, which when added to the filing fee would be $8,053.7. Based on 11 annualized filings' average over 9 years (FY 2015 through FY 2023),^[79] the monetized impact that could accrue to the individual Form I-829 filers would be $88,590.73 annually, or about $.089 million over 10 years.

c. Total Monetized Impacts

We can now compile the monetized potential impacts of the proposed rule based on the impacts for which we can reasonably develop a quantified estimate. The impacts associated with the current forms' fee changes are categorized as transfers from requestors to DHS. They are accounted for as transfers because a filing fee currently exists (inclusive of the two forms in which it is currently $0) and the requestor expects to recoup a direct benefit from filing. The impacts associated with the new Form I-527 are classified as costs, as are the changes in the forms' burdens and filings applicable to the Form I-829, as discussed earlier.

In Table 16 the transfers and costs are listed individually since they are categorized differently under the OMB Circular A-4 framework. The transfers, payments made by EB-5 requestors when filing forms to DHS (IEFA), reflect the fee changes proposed. The costs column comprises the annual impacts, mainly to EB-5 requestors, accruing to the new Form I-527 and the small number of separate I-829 dependent filers, as well as the forms' burdens. The monetized impacts are presented in Table 16 in order of terms undiscounted, then discounted at 3 and 7 percent, in order.^[80] In Table 16 each FY is shown, since the discounted terms for each year are not the same.

( printed page 48540)

d. Unquantified Impacts

There are some other impacts that DHS has evaluated applicable to the proposed rule, and while these cannot be monetized, DHS offers a qualitative discussion concerning them. Foremost, there are likely to be familiarization costs associated with reading and understanding the rule. The costs of familiarization would accrue to the opportunity costs of the time embodied, which would constitute the number of hours spent on familiarization multiplied by the hourly compensation of the reviewer(s). DHS does not know who (in terms of what occupation) would review the rule but will attribute the costs to lawyers trained in reading and interpreting the rule's changes. The average hourly compensation would be $87.86 which, at a benefits-burden multiple of 1.45, is $127.40 per hour.^[81] This reflects the cost of an in-house attorney. For outsourced attorneys, we utilize a multiplier of 2.5, which yields an hourly rate of $219.65.^[82] By relying on the earnings of lawyers, which are substantially higher than that of most occupations, DHS is being liberal in its estimates. DHS does not know how ( printed page 48541) much time would be expended on such familiarization.

The EB-5 Reform Act authorizes graduated sanctions for regional centers that fail to submit an annual statement or that commit certain violations. Considering this authorization, DHS proposes to impose the following penalties for paying the Integrity Fund fee late:

• Ten percent of the required integrity fee (e.g., 10 percent of $10,000 or $20,000, subject to adjusting such required amounts for inflation) ^[83] for a regional center that pays its fees on day 31 through and including day 60 after the due date.

• Twenty percent of the required integrity fee for a regional center if their fee is paid on day 61 through and including day 90 after it is due.
• Terminate a regional center designation if it fails to pay the fee within 90 days of the date on which such fee is due.

In determining the proposed penalties, as is discussed in the preamble, DHS believed that 10 percent was a reasonable starting point in setting a penalty. DHS also considered whether the dollar amount itself was reasonable. In this case, the 10 percent would amount to $1,000 or $2,000 depending on the regional center, which DHS believes is a reasonable late charge for failing to pay the fee after 30 days. The 20 percent would amount to $2,000 or $4,000 depending on the regional center (based on the number of investors), which DHS believes is a reasonable late charge for failing to pay the fee after 60 days.

The goal of the proposed penalties is to effectively deter noncompliance. DHS believes that the proposed penalties would be sufficient to encourage payment and ensure timely collection of the Integrity Fund fees, while not being so large as to be punitive or financially damaging. DHS cannot make an estimate of how many entities would pay penalties or how much they would pay.

Because the EB-5 program fees are proposed to decrease, on average, it may result in a question of whether this proposed rule would fully accomplish the authority that DHS proposes to exercise in this rule by adjusting EB-5 immigration benefit request fees to adequately fund the cost of administering the EB-5 program. In addition, would the decision to not utilize cost reallocation to recover other USCIS costs impact USCIS' ability to continue to provide no cost services. The proposed fees are not lower through intentionally or artificially capping them but result from employing the cost and fee calculations described throughout this rule. The fees may be somewhat lower than current fees because the proposed fees do not include any additional costs for processing benefit requests with no fee or a reduced fee, thus reducing the fees overall. As such, the proposed EB-5 fees would not fund a proportionate share of workload without fees and workload below full cost, and, thus, would not recover what DHS defined as full cost in previous fee rules. See, e.g.,88 FR 402, 450-451 (Jan. 4, 2023). However, as authorized by the EB-5 Reform Act, this proposed rule would recover full EB-5 program operating costs by setting EB-5 fees at a level sufficient to fund overall requirements and general operations related to the EB-5 program. As for funding the costs for processing benefit requests with no fee or a reduced fee, DHS does not believe the adjudication of such services will be impacted. As stated earlier, while the estimated $47 million impact of the proposal to not utilize the authority in section 106(c)(1) is not negligible, DHS has determined that USCIS reserves can withstand a depletion in this amount without a noticeable hinderance of its operational capabilities.

The proposed rule would be expected to generate benefits to the public. The fees proposed would meet the level that would enable DHS to recover the costs of administering the EB-5 program; enable USCIS to attain the statutory processing time goals; and ensure there would be internal procedures/controls in place within the program office to maximize the likelihood that the statutory goals would be met. It would make improvements to the information technology systems used by DHS to administer the EB-5 program.

B. Regulatory Flexibility Act (RFA)

1. Initial Regulatory Flexibility Analysis (IRFA)

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 and 602, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, tit. II, 110 Stat. 847 (5 U.S.C. 601 note)), requires Federal agencies to consider the potential impact of regulations on small businesses, small governmental jurisdictions, and small organizations during the development of their rules. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.^[84]

DHS has reviewed this proposed regulation in accordance with the RFA. As is explained in the Regulatory Impact Analysis (RIA), the fee changes applicable to the EB-5 program are accounted for as transfers from requestors to DHS, while there are costs associated with certain filings and form burdens. There are four types of entities that were evaluated in terms of the RFA as it pertains to the EB-5 program and the proposed rule: (1) regional centers; (2) NCEs; (3) JCEs; and (4) investors. DHS has determined that the investors in the program are individuals who willingly choose to invest their capital in the program and are not considered small entities for purposes of the RFA. An “individual” is not defined by the RFA as a small entity and costs to an individual from a rule are not considered for RFA purposes.^[85] As a result of this determination, individuals are not covered in this Initial Regulatory Flexibility Analysis (IRFA), and DHS focuses this analysis on the business components pertinent to the EB-5 program directly involved in its investments.

a. Description of the Reasons Why the Action by the Agency Is Being Considered

DHS conducted an EB-5-specific fee study, as required by EB-5 Reform Act. The determination from the study is that the proposed fees applicable to the EB-5 program will be set at a level that the Department has determined would enable it to: recover the costs of administering the EB-5 program; allow the Agency to attain the processing times goals; and ensure there are internal procedures/controls in place within the program office to maximize the likelihood that the statutory goals are met. It is intended, further, to make improvements to the information technology systems used by DHS to administer the EB-5 program. ( printed page 48542)

b. Succinct Statement of the Objectives and Legal Basis of the Proposed Rule

The objective of this proposed rule is for DHS to adjust EB-5 benefit request fees to meet the requirements provided in the EB-5 Reform Act and adequately fund the cost of administering the EB-5 program. DHS seeks to meet this objective by: (i) adjusting fees according to the schedule presented in the preamble; (ii) establishing the USCIS EB-5 Technology Fee; and (iii) codifying EB-5 Integrity Fund Fees and Penalties.

In accordance with the EB-5 Reform Act, DHS is proposing the fees to sufficiently recover the costs of providing such services, and attaining the goal of completing adjudications, on average, not later than:

(1) 180 days after receiving a regional center application or application for investment in an new commercial enterprise (NCE); ^[86]

(2) 90 days after receiving an application for investment in an NCE that is located in a targeted employment area (TEA); ^[87]

(3) 240 days after receiving an immigrant investor petition for classification under section 203(b)(5)(E) of the Act or a petition to remove conditions under section 216A of the Act; and

(4) 120 days after receiving an immigrant investor petition for classification under section 203(b)(5)(E) of the Act with respect to an investment in a TEA.

DHS proposes this rule under the authority of the EB-5 Reform Act. Among other things, the EB-5 Reform Act immediately repealed the former authorizing statutory provisions for the Regional Center Program under the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act 1993, Public Law 102-395, 106 Stat. 1828, sec. 610, and added new authorizing provisions to the INA, substantially reforming the Regional Center Program effective May 14, 2022. The reformed Regional Center Program is authorized through September 30, 2027.

This proposed rule is also consistent with non-statutory guidance on fees, the budget process, and Federal accounting principles.^[88] DHS uses OMB Circular A-25 as guidance for determining user fees for immigration benefit requests. DHS also follows the annual guidance in OMB Circular A-11 if it requests appropriations to offset a portion of IEFA costs. DHS used the ABC methodology supported in OMB Circulars A-25 and A-11 to develop the proposed EB-5 program fee schedule.

c. Description and Estimate of the Number of Small Entities to Which the Proposed Rule Would Apply and a Description of the Projected Reporting, Recordkeeping and Other Compliance Requirements of the Proposed Rule, Including an Estimate of the Classes of Small Entities Which Will Be Subject to the Requirement and the Type of Professional Skills Necessary for Preparation of the Report or Record

A person wishing to immigrate to the United States under the EB-5 program is required to file an Immigrant Petition by Standalone Investor (Form I-526) or Immigrant Petition by Regional Center Investor (Form I-526E), containing information about their investment. The investment must be made into either an NCE within a designated regional center in accordance with the regional center program or a standalone NCE outside of the regional center program. A regional center is a business entity in the United States designated by DHS based on a proposal for the promotion of economic growth, including prospective job creation and increased domestic capital investment. Regional centers pool the capital of multiple investors together and arrange them typically as investments in NCEs under their purview. The NCE may create jobs directly (required for non-regional center investments) or serve as a source of funding for separate JCEs (allowable for regional center investments).

DHS cannot provide a precise assessment of the number of small entities that could be impacted by the proposed changes, nor can the Department determine what such impacts might be to small entities involved in the program or how they might respond to them.^[89] EB-5 investment and business structures tend to be complex and involve multiple layers of business and financial activity. The Department has limited information and data to support a small entity analysis. However, based on data that are available, DHS can provide some criteria for an initial assessment. As noted earlier, investors are not considered under the purview of the RFA. Further, neither the amount of a typical individual investment itself—which is the reduced minimum investment amount of $800,000—nor the pool of total investment capital, is appropriate to consider as income for this assessment.^[90] Therefore, with these two caveats regional centers are assessed first, followed by other EB-5 businesses associated with the program.

i. Regional Centers

Based on the Department's thirty years of experience administering the regional center program, it determined that regional centers earn income through three primary mechanisms. In the next three paragraphs DHS describes these three mechanisms.

First, regional centers charge investors an administrative fee earmarked to expenses for marketing and operations ( printed page 48543) pertinent to the investment offering. The fee may also cover expenses related to document preparation, legal oversight, and the economic analysis utilized to model and estimate impacts and job creation. This administrative fee is typically 10 percent of the individual investment amount; hence DHS will rely on the typical percentage applied to most expected investments of $800,000 to estimate an amount of $80,000 per investor as a baseline.^[91] This reliance is justified on grounds that almost all EB-5 activity has accrued to investments at the reduced threshold—which qualify for the current reduced investment requirement of $800,000 as opposed to the standard amount of $1,050,000.^[92] For the period FY 2016 through FY 2021, there were 31,805 investments made under regional centers, of which 31,372, or 98.6 percent, were made at the reduced amount.^[93]

Second, regional centers can also collect marketing, sales fees and other charges and income owed to arrangements with their affiliated NCEs and JCEs. Some regional centers provide information concerning these activities in their business plans or amendments submitted to DHS, but it is not required, and DHS does not have sufficient official data on this source of income to support an analysis.

Third, regional centers can earn residual income. They may capture income from the differential on the terms of the loans they bundle and what is returned to investors. There may also be return on investment in the forms of profit from the end-state economic activity being conducted by the JCE. Some of this return on investment may be split with other business entities involved, but DHS does not have an adequate amount of data involving interest or profit accruing to regional centers to assess this type of income.^[94]

To conduct the IRFA analysis, DHS utilized the 640 approved regional centers that were in approval status at date the analysis was conducted (November 14, 2023).^[95] to run their respective regional center names in subscription-based, open-source business data providers to obtain income information on the regional centers. The search yielded 339 viable record matches that included an income figure and a North American Industry Classification System (NAICS) code. The income data point provided is deemed “sales revenue” and it is our assessment that the income reported in these data is most likely revenue attributed to sales, marketing, and other related charges involved, and neither the administrative fees charged to investors nor profits on loans or investment. While the sample size of 339 is more than sufficient to satisfy a 95-percent level of confidence level and a 5-percent confidence interval based on the population size (640), the data pose a constraint. The NAICS codes are provided at the 6-digit detailed industry level, but half the entities (173, or 51.0 percent) reported code 999990, which benchmarks “Non-Classifiable Establishments.” There is thus no Small Business Administration (SBA) size standard to weigh against for small entity status.^[96] As a result, there would only be 166 entities to support an analysis. To attempt to mitigate this shortcoming, DHS extended the search query for regional centers approved from FY 2016 through FY 2022. From the matches, DHS culled the results to remove duplicates from the initial search result (339 of the of the 640 current regional centers), plus records that did not include both or either of a NAICS code (including non-classifiable) or a sales figure. This cleansing process yielded 32 additional entities, which when added to the 166 initial valid matches, resulted in 198 entities. This figure is still below the optimal sample size of 241, but the charge to precision is not overly debilitating, as the margin of error is 5.8 percent instead of the desired 5.0 percent.

As DHS will discuss, out of necessity of the constraints faced, the assessment is conducted along several different and unconventional paths. Hence, Table 17 presents metrics (in terms of the income alone from the web-based data) for both the “full” sample group (339 currently approved regional centers that are both classifiable and non-classifiable plus the 32 records obtained in the ancillary search) as well as the “restricted” (classifiable-only) group.

( printed page 48544)

The large differences captured as the medians being below the means are indicative of non-normal, positively skewed data structures in which a small number of large values exert disproportionate weight on the means, as is further indicated by the extreme ranges. As is seen in Table 18, there are also differences between the means and the medians across the two sample-groups.

Having valid data on regional center sales revenue, DHS turns to the next income source, administrative fees charged to investors. To conduct this module of the assessment, DHS queried internal EB-5 data repositories to obtain a figure for the number of investors for the regional centers acquired in the above module.^[97] A proxy for the number of investors is developed as the number of Form I-526 filings submitted under the purview of the regional center.^[98] Key statistics applicable to investors are provided in Table 18.

As was the case with regional center sales revenue, the substantial differences between the means and medians, as well as the extreme range, demonstrate that the number of investors per regional center is also a non-normal distribution that is positively skewed.

DHS multiplied the number of investors by the reduced $80,000 fee to capture an estimate of total administrative fees by regional center.^[99] DHS next added this figure to sales revenue found in the subscription-based data. In addition, it cannot be ruled out that regional centers pass the Integrity Fund fees onto the investors as well. For regional centers with 20 or fewer total investors, DHS included the $10,000 fee and for those with more than 20 total investors, a $20,000 fee was added. By combining these components, DHS was able to make a revenue estimate for the sample of regional centers. Of the full sample, it is determined that 48.5 percent pay the $10,000 fee and that 51.5 percent pay $20,000, which based on the annual population of 640 (at the time the analysis was conducted), would be 310 and 330 regional centers, in order. The breakdown could be slightly different, as the number of investors is based on the Form I-526 submissions under the purview of the regional center, as DHS did not calculate the total based on the proposed adjustment applicable to Form I-829 filings associated with the regional center discussed in the preamble.

Given the data constraints discussed thus far, for robustness we will assess the entities' small entity status along three different methodological approaches. While DHS has the listed NAICS codes for the 198 classifiable entities, DHS extensively reviewed various NAICS codes and determined that the 6-digit, detailed industry NAICS code 522310, Mortgage and Nonmortgage Loan Brokers, defined as an “industry [that] comprises establishments primarily engaged in arranging loans by bringing borrowers and lenders together on a commission or fee basis,” is an appropriate NAICS code under which regional centers operate.^[100] By this DHS means that while the NAICS code provided in the data often applies to the types of downstream projects that the regional centers gear loans toward, the regional center is usually not involved directly in those activities, and is rather involved in bundling the investors' funds into loans. The year 2022 SBA size standard for the NAICS category chosen is based on revenue of $15.0 million.^[101] Of the actual NAICS codes provided for classifiable industries, half accrued to several 6-digit codes under the 3-digit subsector 523, “Securities, Commodity Contracts, and Other Financial Investments and Related Activities.” The data providers describe these entities as “investment services” in the “business description” tab and all the individual industries in NAICS subsector 523 ensconce a size standard of $47.0 million. The difference between the size standards ($15.0 million and $47.0 million) is large, and therefore for purposes of robustness we will evaluate the full sample of entities under each of the respective amounts. DHS also evaluates the restricted sample based on the actual NAICS code listed in the data. The results are presented in Table 19.

( printed page 48545)

As can be seen from Table 19 the median and means for the restricted sample-group are smaller than that for the full sample-group. As would be expected, the percentage of regional centers that are small is larger at the higher size standard of $47 million under general investment services. However, still the large majority is small at the lower size standard. Based on these data, DHS can determine that a majority—at a minimum, 87.1 percent—of EB-5 regional centers are small entities in the context of the RFA.^[102]

There are two important caveats to the determination made above; however, which taken together could have a net effect of reducing or increasing the number and percentage of regional centers that are small entities. As was noted earlier, this determination did not consider income accruing to interest income on loans or end-user derived profit that regional centers could collect, as DHS does not have sufficient data to support an analysis concerning such income. Such loan differential or profit income could be substantial and could reduce the true small entity share. But a limitation of this analysis that could have a countervailing effect owes to the timing of investments and administrative fees. In practice the administrative fees need not be collected in 1 year, as investments and fees could be collected over multiple years. However, DHS abridged all the regional center income to 1 year. It would be extremely difficult given the data structures we queried for this analysis to attempt to incorporate a time dimension to the income stream as it pertains to administrative fees. DHS is unable to conduct a distributional analysis of the potential impacts to regional center small entities. Specifically, for the set of 173-found small entities with matched revenue data, it is conceptually possible to divide into the income for each entity, the impacts from the rule, to derive a percentage of income the impact could embody. DHS estimates that a seven percent rate of discount, the impacts that could accrue to EB-5 entities ( i.e., filing fees and increases in form time burdens) could be about $3 million annually. In practice, the costs would be higher, but DHS cannot estimate costs. However, we have no way of distributing the quantified costs across regional centers and therefore cannot determine how they will be impacted.

As it relates to regional centers, the fee changes applicable to the Form I-956 (initial and amendment) could be divided against entity income—although this would rest on the tenuous assumption that the initial and amendment filing were in the same year. However, this would constitute only a partial impact because DHS does not know how activity related to the other forms applicable to regional center activity would impact the business entity. The other forms would be filed by individuals, and we do not know if some of the impacts would be borne by the regional center, transferred to them, or passed through to other entities. As a result, DHS cannot determine what the impact to small entity regional centers would be.

ii. Other EB-5 Businesses

For nonregional center businesses involved in investment activity, DHS employed out of necessity an unconventional, multi-step approach to the small entity analysis. First, DHS was able to obtain about 5,000 unique NCE names and about 3,000 JCE names that were approved between FY 2018 through FY 2022 from the internal EB-5 program data and tracking databases. These entities were pooled and randomly scrambled to source and to run searches in the subscription-based, open-source business information providers on 400 of them, to attempt to satisfy a 95-percent level of confidence.^[103] The searches yielded only 111 results that could reasonably be validated as matches. One of the challenges is that it can be difficult to match syntax in the entity names between DHS records and that in the other sources. The data providers relied upon match queries to results with close-fitting precision, but because there can be minor syntax differences in the names of the businesses in these providers and DHS record systems, there is a strong likelihood a match would not result.^[104]

In addition to the low match-rate, two additional challenges were encountered. First, DHS faced the same issue as we did for regional centers; over one-third of the entities (42, or 37.8 percent) were non-classifiable and therefore incompatible to evaluate against an SBA size standard for status. Second, of the classifiable businesses, almost one-fifth (13, or 18.8 percent) were missing either or both of a NAICS code or a revenue ( printed page 48546) figure. These constraints rendered the sample size down to a mere 56 entities.

Given the challenges elucidated above, DHS employed an unconventional second-step approach. DHS ran queries against “variations” of the term “EB5” separately, which yielded 885 returns. We engaged a filtering process that first removed records with missing data (either or both of sales revenue or NAICS codes) and removed non-classifiable establishments. DHS then backed out likely regional centers first by culling any results that contained the conjoined terms “regional” and “center.” DHS next bolstered this filtering process by further eliminating any regional center names either captured in our sample of regional centers, from that above module of this RFA, or that were otherwise approved in the past but are not currently active. Finally, DHS manually appraised each remaining entity and removed those that reasonably appeared to be businesses not directly involved with program investment activity. These ancillary activities would primarily ensconce law firms, business advisories, or analytical consultancies that provide services to program businesses, but are themselves assumed to not be directly involved in the investment activity of the program. The filtering schema is summarized in Table 20, which shows the stepwise method. By adding the two subtotals shown, we obtain a viable sample of 489, which is more than sufficient to satisfy a confidence level of 95 percent.

As was mentioned above, the JCEs and NCEs were pooled in the first-step query, and for the 433 additional entities resulting from the second-step query, we assume that most or all of them are JCEs and NCEs, though DHS cannot distinguish which are specifically NCEs and which are JCEs. It is ultimately unimportant to distinguish them, because, unlike the approach to regional centers in which we relied on several evaluation methods—including imputing a NAICS codes based (twice) on the single industry description we believe best fits—for the non-regional center businesses we based the NAICS codes solely on a single trial benchmarked to the reported NAICS code. The results of the analysis are captured in Table 21.

While there is an extreme range for the income, only 1 entity (the maximum) exceeded the applicable SBA size standard, which essentially means that 100 percent are small. However, as was the case with regional centers, we do not know if the income applicable to these businesses is limited to the reported sales revenue. If they receive some income from lending activity, or some other form of return in profits, the results could be quite different as potentially not all would be small entities.

DHS is unable to conduct a distributional analysis of the potential impacts to small entities. Specifically, for the set of 488 small entities with matched revenue data, it is conceptual to divide into the income for each. These gross impacts constitute transfers and costs. As it relates to the businesses, the fee changes applicable to the forms would accrue to individuals filing the petitions. DHS cannot say if and how these impacts would impact the related businesses involved and hence cannot determine what the impact to small entities would be.

iii. Concluding Remarks

The IRFA that DHS has prepared to support this proposed rule suggests that ( printed page 48547) the majority—at least 87 percent of regional centers and essentially all other directly involved business entities (which to the best of our assessment would comprise NCEs and JCEs) involved in EB-5 program investment activity—could be small entities. However, it is emphasized that this determination is made on incomplete information, as sufficient data are not available on certain types of income that could accrue to such entities. To provide some context to this caveat, DHS evaluated 1,402 EB-5 projects in which an investment was conducted through a JCE between FY 2018 through FY 2022, for which viable data could be extracted on the amount of capital invested. The median, average, and maximum amount of program-specific capital was $7.0 million, $67.2 million, and $11,070.0 million, in order. A little less than a quarter (22.2 percent) blended nonprogram capital. For the blended capital projects, the figures, in order again, were $52.2 million, $327.5 million, and $12,585.7 million. From the size of these figures alone, it is reasonable to conjecture that if even a small portion of the loan amount or invested capital is renumerated as residual income, the number and share of entities that are small would be lower than that found in our analysis. For example, the large financial services and advisory company, Deloitte, found that the general average rate of return on investments in 2021 was about 6.1 percent.^[106] Applied to the average and maximum blended capital investments above, the return could be between $6.5 million and $767 million. If some, or all, of this potential return were captured by regional centers or other businesses, the share that would be small would almost certainly stand to be lower.

A second caveat to the determinations made in this IRFA is that DHS relied on alternative methodologies. As such, the findings are based on samples that are only partially random. The reason, it is recalled, is that the randomized procedures did not yield sufficient sample sizes, and while there is no reason to assume that there is any reporting or selection bias in the nonrandom-sampled portions, it cannot be completely ruled out either.

As is described in the associated economic analysis, the impacts of the proposed fee changes would accrue to transfers from requestors to DHS. The potential penalties associated with the Integrity Fund fees, which are not estimated, would be accounted for as costs due to the EB-5 Reform Act. As was noted in Section VI.B.2.C.i of this small entity analysis, we treated Integrity Fund fees as income to regional centers, even though it is a cost to them, on grounds that they may attempt to pass some of those costs through to investors or other businesses. It is noted here that from a double-entry accounting perspective, an income flow earmarked to a cost could be considered a net zero-value transaction. But under the RFA purview, the flow would still be considered an income credit against the applicable SBA size standard (this is the case with the administrative fees—the regional center pays for the services embodied but then passes all or some of it to investors, and it is therefore income). Therefore, any such costs and transfers that regional centers or other businesses would incur from the proposed changes that are transferred or passed through to other entities could also affect the small entity determinations for EB-5 businesses. For example, we have no evidence to suggest, but cannot rule out, that for some entities the applicable fee changes might be large enough that they might be passed to investors or other entities.

DHS welcomes public input on EB-5 small entities and the impacts that the proposals could have on such entities, as well as the methodology and determination presented herein.

d. Identification, to the Extent Practicable, of All Relevant Federal Rules That May Duplicate, Overlap or Conflict With the Proposed Rule

DHS does not believe that there are Federal rules that may duplicate or conflict with the proposed rule. The Integrity Fund fees fund investigations and oversight to align the regional center program with applicable financial, legal, securities, compliance, and national security safeguards as warranted by other State and Federal rules, regulations, and procedures. However, such alignment is not considered duplicative in terms of the Federal regulatory framework.

In the FY 2022/2023 fee rule, DHS adjusted the USCIS fee schedule, including EB-5 program fees. For additional information on the interaction between this proposed rule and the FY 2022/2023 fee rule, please see section III.E.2 of this proposed rule.

e. Description of Any Significant Alternatives to the Proposed Rule That Accomplish the Stated Objectives of Applicable Statutes and That Minimize Any Significant Economic Impact of the Proposed Rule on Small Entities

The fees proposed were determined via a specific fee study. Their level would: enable DHS to recover the costs of administering the EB-5 program; meet the EB-5 processing time goals as provided in the EB-5 Reform Act; make improvements to the information technology systems used by DHS to administer the EB-5 program.

Because the fee structure proposed is derived directly from the cost-study, which is mandated by the EB-5 Reform Act, DHS considered, but did not adopt, reduced fees for small businesses, because USCIS is almost entirely dependent on user fees. Moreover, charging less in fees (including different fees for businesses based on size) could potentially impact processing times, which could stand in contrast to process time goals outlined in the EB-5 Reform Act. Additionally, given the challenges in this RFA described above, applicable to the sampling procedures, data and information completeness, and unclassifiable entities, it would be very difficult and probably subjective for DHS to come up with an easily administrable definition of “small business” for the purpose of charging lower fees for small businesses vs. larger businesses. As a result, it would be challenging and subjective to attempt to present alternatives that could achieve the objectives of the EB-5 Reform Act, continue to adequately fund the cost of administering the EB-5 program, and reduce burdens on small entities such as:

(1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities;

(2) The clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities;

(3) The use of performance rather than design standards; and

(4) An exemption from coverage of the rule, or any part thereof, for such small entities.

The Department welcomes suggestions from the public on alternatives or ways in which small entities' burdens could be reduced.

The Department did consider a wide range of percentages for the late Integrity Fund fee penalties from zero to a higher amount. After considering and balancing the factors we discuss in that section, we settled on what we are ( printed page 48548) proposing, but we welcome public commenters' views on what is a reasonable late fee.

C. Unfunded Mandates Reform Act of 1995 (UMRA)

The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and Tribal governments.^[107] Title II of UMRA requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed rule, or final rule for which the agency published a proposed rule, which includes any Federal mandate that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and Tribal governments, in the aggregate, or by the private sector. See2 U.S.C. 1532(a). The inflation adjusted value of $100 million in 1995 is approximately $206 million in 2024 based on the CPI-U.^[108]

The term “Federal mandate” means a Federal intergovernmental mandate or a Federal private sector mandate. See2 U.S.C. 1502(1), 658(6). The term “Federal intergovernmental mandate” means, in relevant part, a provision that would impose an enforceable duty upon State, local, or Tribal governments (except as a condition of Federal assistance or a duty arising from participation in a voluntary Federal program). 2 U.S.C. 658(5). The term “Federal private sector mandate” means, in relevant part, a provision that would impose an enforceable duty upon the private sector except (except as a condition of Federal assistance or a duty arising from participation in a voluntary Federal program). See2 U.S.C. 658(7).

This proposed rule does not contain such a mandate, because it does not impose any enforceable duty upon any other level of government or private sector entity. Any downstream effects on such entities would arise solely due to their voluntary choices and would not be a consequence of an enforceable duty. Similarly, any costs or transfer effects on State and local governments would not result from a Federal mandate as that term is defined under UMRA. See2 U.S.C. 1502(1), 658(6). The requirements of title II of UMRA, therefore, do not apply, and DHS has not prepared a statement under UMRA.

D. Congressional Review Act

The Congressional Review Act (CRA) was included as part of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) by section 804 of SBREFA, Public Law 104-121, 110 Stat. 847, 868, et seq. This proposed rule is anticipated to be a major rule, although it is not expected to result in an annual effect on the economy of $100 million or more, as defined by section 804 of SBREFA. See5 U.S.C. 804(2)(A). Accordingly, absent exceptional circumstances, this proposed rule if enacted as a final rule would be effective at least 60 days after the date on which Congress receives a report submitted by DHS as required by 5 U.S.C. 801(a)(1).

E. Executive Order 13132 (Federalism)

This proposed rule would not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with sec. 6 of E.O. 13132, it is determined that this proposed rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

F. Executive Order 12988 (Civil Justice Reform)

This proposed rule was drafted and reviewed in accordance with E.O. 12988, Civil Justice Reform. This proposed rule was written to provide a clear legal standard for affected conduct and was carefully reviewed to eliminate drafting errors and ambiguities to minimize litigation and undue burden on the Federal court system. DHS has determined that this proposed rule meets the applicable standards provided in sec. 3(b)(2) of E.O. 12988.

G. Family Assessment

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. Agencies must assess whether the regulatory action: (1) impacts the stability or safety of the family, particularly in terms of marital commitment; (2) impacts the authority of parents in the education, nurture, and supervision of their children; (3) helps the family perform its functions; (4) affects disposable income or poverty of families and children; (5) if the regulatory action financially impacts families, is justified; (6) may be carried out by State or local government or by the family; and (7) establishes a policy concerning the relationship between the behavior and personal responsibility of youth and the norms of society. If the determination is affirmative, then an agency must prepare an impact assessment to address criteria specified in the law.

DHS has no data that indicate that this proposed rule will have any impacts on disposable income or the poverty of certain families and children, including U.S. citizen children. DHS acknowledges that this proposal would increase the fees that some families must submit and thus it may affect the disposable income for certain families. However, the proposed rule would provide USCIS with funds that would be used to administer the EB-5 investor program, meet the statutory processing times, and fund free and reduced fee services USCIS provides to abused children and spouses, refugees, victims of criminal activity or human trafficking, and other populations. DHS is required to administer the EB-5 program, is authorized to set and collect fees, and receives no funding to do so aside from the revenue generated by charging fees. While those fees could have a financial impact on a family that chooses to become an investor in an EB-5 program project, DHS has no alternatives other than this rulemaking. DHS also determined that this proposed rule would not have any impact on the autonomy or integrity of the family as an institution.

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

This proposed rule would not have “Tribal implications” under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Accordingly, E.O. 13175, Consultation and Coordination with Indian Tribal ( printed page 48549) Governments, requires no further agency action or analysis.

I. National Environmental Policy Act (NEPA)

DHS and its components analyze proposed regulatory actions to determine whether the National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et seq., applies and, if so, what degree of analysis is required. DHS Directive 023-01 Rev. 01 “Implementing the National Environmental Policy Act” (Dir. 023-01 Rev. 01) and Instruction Manual 023-01-001-01 Rev. 01 (Instruction Manual) ^[109] establish the policies and procedures that DHS and its components use to comply with NEPA, 42 U.S.C. 4321 et seq.

NEPA allows Federal agencies to establish, in their NEPA implementing procedures, categories of actions (“categorical exclusions”) that experience has shown do not, individually or cumulatively, have a significant effect on the human environment and, therefore, do not require an environmental assessment or environmental impact statement. See42 U.S.C. 4336(a)(2), 4336e(1). The Instruction Manual, Appendix A lists the DHS Categorical Exclusions.^[110]

Under DHS NEPA implementing procedures, for an action to be categorically excluded, it must satisfy each of the following three conditions: (1) The entire action clearly fits within one or more of the categorical exclusions; (2) the action is not a piece of a larger action; and (3) no extraordinary circumstances exist that create the potential for a significant environmental effect.^[111]

This proposed rule is limited to amending DHS regulations governing the EB-5 program and its fees. As such, DHS has reviewed this proposed rule and finds that no significant impact on the environment, or any change in environmental effect will result from the amendments being promulgated in this proposed rule.

Accordingly, DHS finds that the promulgation of this proposed rule's amendments to current regulations clearly fits within categorical exclusion A3 established in DHS's NEPA implementing procedures as an administrative change amending an existing regulation with no change in environmental effect, is not part of a larger Federal action, and does not present extraordinary circumstances that create the potential for a significant environmental effect. Therefore, the proposed regulatory amendments are categorically excluded from further NEPA review.

J. Paperwork Reduction Act (PRA)

Under the PRA, 44 U.S.C. 3501-12, DHS must submit to OMB, for review and approval, any reporting requirements inherent in a rule unless they are exempt. Table 22 shows the summary of forms that are impacted by this rule.

This rule would require nonsubstantive edits to USCIS Forms I-526 and I-526E and I-956, I-956F, I-956G, I-956H, and I-956K. These edits include an update to the estimated annualized cost to the Federal government in each Supporting Statement located under Question 14, which is calculated by multiplying the estimated number of respondents by the filing fee. These edits are due to the update to the filing fee for each form. Accordingly, USCIS has submitted a Paperwork Reduction Act Change Worksheet to OMB for review and approval in accordance with the PRA.

USCIS consolidated all information related to form fees, fee exemptions, and how to submit fee payments into Form G-1055, Fee Schedule. 88 FR 402, 563 (Jan. 4, 2023) (proposed rule); 89 FR 6194, 6197, 6333 (Jan. 31, 2024) (final rule). Fee-related language is therefore not part of the individual Form Instructions documents.

DHS and USCIS invite the general public and other Federal agencies to comment on the impact to the proposed collections of information. In accordance with the PRA, the information collection notice is published in the Federal Register to obtain comments regarding the proposed edits to each information collection instrument.

Comments are encouraged and will be accepted for 60 days from the publication date of the proposed rule. All submissions received must include the OMB Control Number 1615-NEW (I-527) or 1615-0045 (I-829) in the body of the letter and the agency name. To avoid duplicate submissions, please use only one of the methods under the ADDRESSES and I. Public Participation sections of this rule to submit comments. Comments on the information collection should address one or more of the following four points:

(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(2) Evaluate the accuracy of the agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;

(3) Enhance the quality, utility, and clarity of the information to be collected; and ( printed page 48550)

(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology ( e.g., permitting electronic submission of responses).

USCIS Form I-527

Background

Section 203(b)(5)(M) of the INA allows qualified immigrants in certain circumstances to amend their qualified Form I-526, Immigrant Petition by Alien Investor, petition filed before March 15, 2022, seeking classification for a visa to enter the United States for the purpose of engaging in a commercial enterprise. This form provides affected investors an avenue to establish their ongoing eligibility for an EB-5 immigrant visa by amending their originally filed Form I-526. USCIS will use the data collected on this form to determine the ongoing eligibility of an investor seeking to enter the United States to engage in an NCE.

An investor may file this form if they filed a Form I-526 before March 15, 2022, and are seeking to retain eligibility under section 203(b)(5)(M) of the INA because their regional center has been terminated or their NCE or JCE has been debarred and they do not otherwise continue to be eligible notwithstanding such termination or debarment (for example, because the requisite amount of capital has been or will continue to be invested in their original NCE and the requisite number of jobs have been or will be created in accordance with their originally filed business plan). To maintain eligibility if their regional center is terminated, an investor's NCE may associate with another designated regional center, or the investor may make a qualifying investment in another new commercial enterprise. If the investor's NCE or JCE is debarred, the investor may associate their investment with another NCE in good standing and invest additional capital necessary to satisfy any remaining job creation requirements.

This form serves the purpose of standardizing requests for certain investors to amend a Form I-526 filed before March 15, 2022.

Overview of Information Collection

(1) Type of Information Collection: New Collection.

(2) Title of the Form/Collection: Amendment to Legacy Form I-526.

(3) Agency form number, if any, and the applicable component of DHS sponsoring the collection: I-527; USCIS.

(4) Affected public who will be asked or required to respond, as well as a brief abstract: Primary: Individuals or households. The form will be used by an investor to amend a Form I-526, Immigrant Petition by Alien Investor, filed before March 15, 2022, in order to retain eligibility under INA 203(b)(5)(M) where the investor's regional center is terminated, or their NCE or JCE is debarred.

(5) An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond: The estimated total number of respondents for the information collection Form I-527 is 457 and the estimated hour burden per response is 1.44 hours.

(6) An estimate of the total public burden (in hours) associated with the collection: The total estimated annual hour burden associated with this collection of information is 658 hours.

(7) An estimate of the total public burden (in cost) associated with the collection: The estimated total annual cost burden associated with this collection of information is $235,355.

USCIS Form I-829

Overview of Information Collection

(1) Type of Information Collection: Revision of a Currently Approved Collection.

(2) Title of the Form/Collection: Petition by Investor to Remove Conditions on Permanent Resident Status.

(3) Agency form number, if any, and the applicable component of the DHS sponsoring the collection: I-829; USCIS.

(4) Affected public who will be asked or required to respond, as well as a brief abstract: Primary: Individuals or households; Business or other for-profit. This form is used by a conditional permanent resident who obtained such status through a qualifying investment to apply to remove the conditions on their conditional residence.

(5) An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond: The estimated total number of respondents for the information collection I-829 is 1,010 and the estimated hour burden per response is 3.62 hours; the estimated total number of respondents for the information collection of Biometrics is 1,010 and the estimated hour burden per response is 1.17 hours.

(6) An estimate of the total public burden (in hours) associated with the collection: The total estimated annual hour burden associated with this collection of information is 4,838 hours. The proposed changes to the Form I-829 instructions reflects the proposed changes in the rule to clarify the process by which an immigrant investor's derivatives file separate Form I-829 petitions when they are not included in the Form I-829 filed by the immigrant investor.

(7) An estimate of the total public burden (in cost) associated with the collection: The estimated total annual cost burden associated with this collection of information is $437,330.

Differences in Information Collection Request Respondent Volume and Fee Model Filing Volume Projections

DHS notes that the estimates of annual filing volume in the PRA section of this preamble are not the same as those used in the model used to calculate the fee amounts in this final rule. For example, the fee calculation model projects 11,262 EB-5 program filings annually across eight current forms and one new form, while the estimated total number of respondents for the eight current forms and one new form is 12,289. As stated in section VI.A.2.a. of this preamble, the Volume Projection Committee forecasts USCIS workload volume based on short- and long-term volume trends and time series models, historical receipts data, patterns (such as level, trend, and seasonality), changes in policies, economic conditions, or correlations with historical events to forecast receipts. Workload volume is used to determine the USCIS resources needed to process benefit requests and is the primary cost driver for assigning activity costs to immigration benefits and biometric services in the USCIS ABC model. DHS uses a different method for estimating the average annual number of respondents for the information collection over the 3-year OMB approval of the control number, generally basing the estimate on the average filing volumes in the previous 3- or 5-year period, with less consideration of the volume effects on planned or past policy changes. Although the RIA uses similar historic average volumes, RIAs isolate the impacts of proposed policy using models that may use different periods of analysis and often make simplifying assumptions about costs such as information collection burdens not caused by the regulation. When the information collection request is nearing expiration USCIS will update the estimates of annual respondents based on actual results in the submission to OMB. The PRA burden estimates are generally updated at least every 3 years. Thus, DHS expects that the PRA estimated annual respondents will be ( printed page 48551) updated to reflect the actual effects of this rule within a relatively short period after a final rule takes effect.

Accordingly, DHS proposes to amend chapter I of title 8 of the Code of Federal Regulations as follows:

1. Revise the authority citation for part 106 to read as follows:

Authority: 8 U.S.C. 1101, 1103, 1153, 1254a, 1254b, 1304, 1356; Pub. L. 107-609; 48 U.S.C. 1806; Pub. L. 107-296, 116 Stat. 2135 (6 U.S.C. 101 note); Pub. L. 115-218, 132 Stat. 1547; Pub. L. 116-159, 134 Stat. 709; Pub. L. 117-103, 136 Stat. 49.

2. Amend § 106.2 by:

a. Revising paragraphs (a)(25), (53), and (65) through (69);

b. Redesignating paragraph (d) as paragraph (e); and

c. Adding a new paragraph (d).

The revisions and addition read as follows:

3. The authority citation for part 216 continues to read as follows:

Authority: 8 U.S.C. 1101, 1103, 1154, 1184, 1186a, 1186b, and 8 CFR part 2.

4. Amend § 216.6 by revising paragraph (a)(1)(ii) to read as follows:

(a) * * *

(1) * * *

(ii) An investor may include their spouse and children on a petition to remove conditions if the spouse and children obtained conditional permanent resident status based on their relationship to the investor. If the investor's spouse and children are not included on the investor's petition to remove conditions, the spouse and each child must each file their own petition to remove the conditions on their permanent resident status, unless the investor is deceased. Any spouse or child not included on the investor's petition to remove conditions may file a petition to remove the conditions on their residence at any time during the period when the investor is required to file a petition to remove conditions.

(A) If the investor is deceased, the spouse and children may file separate petitions or may be included in one petition. In either case, the spouse and child must file the petition(s) at any time during the period when the investor would have been required to file a petition to remove conditions and establish eligibility to remove conditions.

(B) An investor may include any child who turned 21 years of age or married during the period of conditional permanent resident status on their petition to remove conditions. If the investor does not include the child on their petition to remove conditions, the child must file their own petition to remove conditions.

(C) An investor may include a former spouse who was divorced from the investor during the period of conditional permanent resident status on their petition to remove conditions. If the investor does not include the former spouse on their petition to remove conditions, the former spouse must file their own petition to remove conditions.

(D) If an investor does not file a petition to remove conditions, any spouse, former spouse, or child that obtained conditional permanent resident status based on their relationship to the investor may remove the conditions on their status if they can establish eligibility to remove conditions. The spouse, former spouse, or child must file the petition(s) at any time during the period when the investor would have been required to file a petition to remove conditions.

90 FR 48516