Analysis of USCIS Fee Schedule Final Rule and EB-5 fee increases

Today the Federal Register published a Final Rule for USCIS filing fee changes scheduled to take effect on April 1, 2024.

The Final Rule includes major increases to EB-5 form filing fees, which is a near-term gift for EB-5 marketing (“Hurry! File now before the fees go up!”), a challenge for service providers (as we try to accommodate the feast of applicants rushing to beat the fee increase and to plan for the subsequent famine), and a long-term benefit to USCIS coffers and burden on EB-5 users (to the extent that EB-5 forms still get filed under the disincentive of increased fees on top of insufficient EB-5 visa availability).

The new EB-5 fees will take effect from April 1 unless or until blocked by litigation or superseded by another EB-5 fee rule. Litigation successfully cancelled the last USCIS fee increase attempt in 2019/2020; I don’t know about litigation prospects this time. DHS is separately working on a different fee study for EB-5 that was mandated by the EB-5 Reform and Integrity Act and due by March 2023. The RIA-mandated study will eventually result in different EB-5 fees designed to support timely processing, but “that effort is still in its early stages” according to the Final Rule. DHS explains that “the provisions of the law are not effective until DHS takes the steps it requires to be implemented.” We fans of Yes Minister know how to interpret the Final Rule statement that DHS has so far “initiated a working group to begin drafting the rule” required to support timely EB-5 processing.

The EB-5 fee increases in the Final Rule are identical to those proposed last year in the Notice of Proposed Rulemaking (NPRM). Good old DHS listened to the chorus of public criticism on the NPRM and accepted some of our corrections – including on the key variable of EB-5 filing volume – but did not recalculate the EB-5 fees in the Final Rule. Multiplying projected annual receipts by filing fee, we can see that the NPRM anticipated generating $80.7 million in EB-5 fee revenue, while the Final Rule projects $139.7 million in EB-5 fee revenue. DHS initially calculated high EB-5 fees based on the need to spread costs across projected low fee-paying receipt volume, then realized receipt volume could actually be much greater, but still decided to keep the high fees.

Summary of EB-5 filing fee changes

Form	Filing fee since 2016	Proposed filing fee in NPRM	Projected annual receipts in NPRM	Projected annual receipts in final Fee Rule	New filing fee effective 4/1/2024, per Final Rule
I-526/I-526E	$3,675	$11,160	3,900	4,050	$11,160
I-829	$3,750	$9,525	3,250	4,500	$9,525
I-956	$17,795	$47,695	62	400	$47,695
I-956F	$17,795	$47,695		600	$47,695
I-956G	$3,035	$4,470	728	875	$4,470
I-956H	0	0		2,000	0
I-956K	0	0		500	0
Total or Weighted Avg.		$10,163	7,940	12,925	$10,806

Here is the formula that DHS uses to calculate filing fees according to its “full cost recovery model,” and how the inputs changed for EB-5 between the NPRM and Final Rule.  (For detail, see my exhaustive article for IIUSA on the NPRM fee-setting methodology.)

	Fee Setting Formula	Difference in inputs and results between NPRM and Final Rule for EB-5 forms
A	Cost Baseline: “the resources necessary for individual USCIS offices to sustain operations and deliver services.”	No change indicated (NPRM reported this amount as $59.4M)
B	“Average Annual Projected Workload Receipts”	Increased in Final Rule
C=A/B	Fee per receipt required for cost recovery	Decreased in Final Rule
D	“Cost Reallocation”: Additional fee “to provide services for which USCIS does not receive revenue”	Increased, apparently
E=C+D	Filing fee per receipt	No change

In the Final Rule, DHS increased its estimate of EB-5 fee-paying receipts while deciding to keep EB-5 filing fees the same. In other words, DHS apparently decided to increase cost reallocation to itself instead of passing along anticipated economies of scale to the customer. As the Final Rule notes with satisfaction: “Increasing the fee-paying receipt forecasts for these workloads conversely increased the estimated revenue generated by EB-5 fees. DHS also revised the USCIS budget to reflect these changes.” The EB-5 program not only has no cost to the US taxpayer, it actually helps to fund the government with form filing fees calculated to generate millions of dollars to USCIS above the anticipated cost to process EB-5 forms. Table 11 in the Final Rule quantifies cost/benefit impacts, and notes that “Annual transfer payments from EB-5 investors and regional centers to USCIS will be approximately $44,746,040.”

As the Final Rule explains: “Full cost recovery means not only that fee-paying applicants and petitioners must pay their proportionate share of costs, but also that at least some fee-paying applicants and petitioners must pay a share of the immigration adjudication and naturalization services that DHS provides on a fee-exempt, fee-reduced, or fee-waived basis. …Under the ability-to-pay principle, those who are more capable of bearing the burden of fees should pay more for a service than those with less ability to pay. The requirements of immigrant investor program indicate that immigrant investors and regional centers have the ability-to-pay more than most USCIS customers.”

(To be fair the net windfall to USCIS is only theoretical, since actual receipt volume will likely fall far below USCIS estimates. It’s not wise for the government to plan on ongoing fee revenue from 600 new EB-5 projects and more than 4,000 new EB-5 investors per year when it only offers enough visas to accommodate fewer than 2,000 new EB-5 investors per year on average, considering set-aside visa numbers and spouses/children.)

Here is an index with links to content in the Final Rule relevant to EB-5 stakeholders.

• Feedback opportunity: Invitation to public engagement on Feb 22, and to submit questions by Feb 8.
• Tables showing the fee increases for all forms, including EB-5
• Discussion of Changes to EB–5 Volume Forecasts
• Reference to the RIA-mandated EB-5 fee study.
• Summary of public comments on EB-5 form fee changes, and USCIS response to the public comments.
• Summary of economic impacts from the fee changes, including for EB-5 forms.
• Discussion of small entities in the EB-5 context, and USCIS excuses for being unable to judge how many regional centers may deserve consideration as small entities.