EB-5 Updates

September Updates (USCIS input, RFEs, legislation)

A few updates and resources.

USCIS Feedback: This week was the deadline for response to the nice USCIS “EB-5 Question” feedback request. I sent comments, and assisted with the list of questions on behalf of EB-5 investors submitted by AIIA.  

RFE Policy: USCIS today announced another extension to “Flexibility for Responding to Agency Requests.” For notices sent through January 15, 2022, USCIS will consider a response to RFE, NOID, and other notices received within 60 calendar days after the response due date.

IIUSA Forum: IIUSA has announced the schedule and speakers for its Virtual EB-5 Industry Forum November 2-11. Early bird tickets are available until October 1. All prospective and current EB-5 investors and international stakeholders are invited to participate for free, which is a great opportunity. I was just sorry to not see Charles Oppenheim on the schedule for his annual EB-5 update.

Chats with Charlie: Speaking of Charles Oppenheim, he continues to do excellent live chats monthly on the Travel.gov Youtube channel. The October Visa Bulletin chat last week did not directly address any EB-5 questions, but I’ll quote one important point: “Only a certain amount of water can go through a straw regardless of how much water you try to pour down it.” He was talking about the record-breaking number of EB visa numbers to be available in FY2022, and how Consulate and USCIS capacity will naturally constrain how many of those numbers can be issued. EB-5 visa availability for FY2022 is a wonderful 262,288*0.071=18,622, according to the September Visa Bulletin. If only those visas could be issued and reduce backlogs, rather than lost due to legislative delay and limited processing capacity.

Legislation: Two things happened this week that affect timing prospects for EB-5 legislation and reauthorization.

The House passed a Continuing Resolution that defers the deadline for the annual appropriations bill from September 30, 2021 to December 3, 2021. The appropriations bill is one hope as a vehicle for EB-5 legislation, and that particular hope is now deferred to December. (Assuming that the House CR passes, as there’s still some dispute over it, but we’ll know on Monday when the Senate takes it up.) The House and Senate appropriations websites discuss the detail and link to text. The House CR text does not mention EB-5, and does not cover EB-5 by default (as happened in the past) since RC authorization is not coupled with FY2021 appropriations. I do not blame industry for missing a CR opportunity for EB-5 legislation, because Continuing Resolutions are not generally opportunities for special interest items. CRs for the past five years at least have been budget-focused with just a few extra provisions for general-interest high-profile emergencies – as happened again this year. I expect to see the final appropriations bill (which is a large vehicle) a few days before December 3, or else to see another CR in December to defer the deadline into early Spring. (It’s also possible that Congress could finalize an appropriations bill well ahead of deadline — they just haven’t in the five years that I’ve watched the process so far.) Whether Congress will agree to attach something EB-5-related to the appropriations bill or another vehicle remains to be seen, and presumably continues to depend on what’s asked and who’s asking.

Meanwhile, the Democrats’ separate attempt to attach immigration legislation to budget reconciliation had a setback, thanks to block by the Senate parliamentarian. The specific “Build Back Better” immigration legislation content was not very helpful for EB-5 (limited to benefit options for adjustment of status plus a visa recapture that couldn’t help much in practice thanks to that capacity straw Oppenheim talks about, and EB-5’s use-it-or-lose-it position for roll-over numbers), but the immigration effort was extremely significant. If passed, it could have cleared the path for EB-5 needs to be addressed. While Democratic leaders are still waiting to resolve the immigration issues that are on-brand and top priority for them and the Biden Administration (DACA, TPS, visa relief for immigrants working in the U.S.), there’s limited chance that they’ll put their weight behind immigration benefits that are not on their talking point list of priorities, including for immigrant investors patiently waiting outside the U.S. We need non-EB-5 immigration relief priorities to be addressed ASAP, because any deferral naturally further defers the chance for political capital spent specifically on EB-5. (For Administration priorities, see the White House blueprint for immigration, and my blog discussing visa relief proposed by the White House-backed U.S. Citizenship Act. The text of the immigration proposal advanced and stalled this month is available on the House Judiciary Committee website under Chairman Nadler Announces Committee Print for Full Committee Markup of Build Back Better Act. Roll Call’s 9/19 article Senate parliamentarian rejects Democrats’ immigration bid provides analysis, including quotes from the cast of Senators on whom we rely for EB-5 legislation. An MSN article from July Republican immigration proposal falls flat gives further background.)

Regional center program authorization and reform legislation should still theoretically have a near-term chance despite the immigration reform setbacks, because EB-5 legislation does not have to be an immigration bill in awkward precedence over stymied immigration priorities. EB-5 legislation can alternatively be an economic development and enforcement issue. But it depends on us, and what we ask for in legislation. We know that EB-5 investors need relief just as much as Dreamers and immigrant workers do, so it’s hard not to ask. If only the Administration’s immigration priority issues can be resolved as soon as possible, so that lawmakers can celebrate that win and move on to consider our benefit. Unless and until that happens, consider how much Congressional leaders can afford to give EB-5 and speak with the media about afterwards, beyond an enforcement-focused reauthorization such as Grassley/Leahy proposed.

Meanwhile, there’s apparently still time to think through EB-5 legislation. I’ve heard rumors and counter-rumors about possibly-finalized bills, was briefly hopeful, and then became the target of some personalized propaganda that gutted and mortified me. But I still have hope, because the EB-5 ecosystem includes good and smart people. Now is the time for all good men to come to the aid of their party, apply intelligent scrutiny and honorable pressure, and dilute the forces of myopia and cupidity. I’m particularly looking to regional centers to exert positive influence. The future depends on it.

We’re all in this together

This blog focuses on the technicalities of EB-5 for my small audience of industry insiders. Since I do not have a general audience, I do not think very much about messaging. But I realize that in focusing on details, I can tend to focus on the negative.  Particularly with respect to legislation and the regional center reauthorization debate, it’s easy for analysis to get stuck in distinctions and divisions and lose focus on the big picture of what we’re all trying to accomplish and why.

This post takes a step toward rectifying that balance, by stepping back to also look at the big picture of what unites our efforts as we try to make EB-5 work.

Regional Centers and EB-5 investors are in this together

In thinking about specific legislation, it’s easy to focus on details where regional center and EB-5 investor interests may be at odds. Both the Grassley/Leahy bills and the holistic faction bills have historically included a few divisive provisions that attracted just criticism. But, do not conclude from this that regional centers and EB-5 investors are on opposing sides when it comes to EB-5 advocacy.

In fact, the interests of regional centers and EB-5 investors are very closely intertwined, and they depend on legislation that maximizes each other’s chance for success.

EB-5 investors need legislation that keeps the EB-5 program viable for regional centers, because regional centers need to stay in business long enough for investors to complete the immigration process under regional center sponsorship. If regional centers lose authorization, are overburdened with costly regulation, and practically cannot continue to do business, that’s not good for them, and equally not good for investors whose immigration process and capital repayment practically depend on the regional centers staying business.

Regional centers need legislation that keeps the EB-5 program viable for their investors, because that’s the only path forward for investments. It’s not like regional centers have the option, in most cases, to simply return investor funds in case of disappointment. If the regional center honestly did its job and followed all the EB-5 rules, then investor funds are not sitting in a bank account, but rather deployed out in the economy funding job-creating projects. If the U.S. government bails on the EB-5 visa promise to investors, what can regional centers do? No regional center wants to find itself with investors trying to give up and withdraw en masse, especially considering practical limitations. Regional centers do not want to face lawsuits from investors who don’t have anyone else to sue, even if the regional center cannot practically force Congress to honor the visa promise or force investments to exit earlier than allowed by market conditions and investment agreements. For the sake of their own survival, regional centers have incentive to push legislation that helps their investors keep the immigration hope that underwrote the EB-5 investment.

These intertwined interests mean that all sides have valid reasons to be for and against aspects of the Grassley/Leahy bills, and for and against aspects of the holistic reform bills. The divisions among industry groups and compromises over legislation are not as clearcut as I might have implied in previous posts, when I focused on details and tried to set everything out in table form.  Certainly, there cannot be a conspiracy of regional centers against investors or vice versa, considering how interdependent investor and regional center interests really are in practice. “United we stand, divided we fall” is the simple truth when it comes to EB-5 investor and industry interests in reauthorization legislation. Any final legislation will be a compromise with some wins and losses, considering what’s practically possible and allowable by Congress. But I hope that every industry group is working hard to achieve compromise that will balance its own interests with the interests of groups on which it also depends. As an industry, we are truly in this together, and if any negotiators aren’t acting that way already, they must change.

Investors from around the world are in this together

There’s a historical fissure between EB-5 investors from China and other countries over advocacy around the Fairness for High-Skilled Immigrants Act, which naturally divided immigrants from different countries and categories into those who benefit from and those who are hurt by the country cap law. But when it comes to reauthorization legislation, or at least grandfathering for existing EB-5 investors, people from all over the world have every reason unite to preserve the regional center immigration opportunity. The country cap discussion is valid and on-going, but it is separate from and need not derail cooperation to support reauthorization or at least grandfathering. And for the future, investors from other backlogged countries will shortly realize why they need to join the long-standing Chinese effort to push for visa relief.

The country, Congress, and the industry are in this together

Most important, I should re-emphasize the big picture that good EB-5 legislation is not just a win/win for regional centers and investors if it passes and a lose/lose if it fails, but a wonderful benefit to gain and a tragic loss to avoid for the U.S. economy, and for everyone in Congress who has additional jobs and economic activity and tax dollars in their districts thanks to EB-5 investors and investment. It can feel like Congress is against us and has to be begged and wangled, but if so that reflects Congressional ignorance more than fundamentally opposing interests.

Who gains from a program that has injected billions of dollars into the U.S. economy and created tens of thousands of jobs, with no tax-payer cost and indeed positive tax benefit thanks to attracting productive new tax-payers? Everyone. Who loses, if the U.S. government is seen to default on the promise that it used to attract that investment? Everyone. Who loses, if the rug is pulled out from under billions of dollars invested in on-going projects just as the economy is struggling? Everyone. Who should want a continued incentive for foreign investors to bring their entrepreneurial spirit and investment dollars to the U.S.? Everyone.

The real if not the perceived interests of Congress and the country as a whole are on the side of reauthorizing the regional center economic development program. We can rightly worry that Congress is not well-informed about those interests (and thank IIUSA, EB5IC, AAED, AIIA, and anyone else who is working hard now to inform their representatives about what EB-5 involves), but the interest certainly and demonstrably exists. We can call for reauthorization with a pride and confidence rooted in the fact that a healthy EB-5 program truly is a wonderful economic benefit for the country, and to the government that represents us.

The fight for EB-5 legislation continues

What is the path, timeline, and content for regional center program reauthorization legislation? This urgent question should be directed toward advocacy groups and official advisors, not to a business plan writer and spare-time blogger. But, a few notes and resources for reference, as we find ourselves in the drama-filled month of September.

The regional center program can be reauthorized as soon as (1) there is a vehicle to which reauthorization legislation could be attached, and (2) Congress agrees to reauthorization legislation that satisfies the EB-5 industry.

The first condition — available vehicle — potentially exists now, as Congress works on major funding and infrastructure bills. The industry’s best near-term hope for legislative vehicle for reauthorization may be the omnibus Appropriations Act, which is due to be passed by September 30 before the start of every fiscal year, and which must get passed eventually. (Here’s the recent history: FY2016 appropriations (due September 30, 2015) passed in December 2015; FY2017 appropriations was delayed until May 2017; FY2018 passed in March 2018, FY2019 passed in February 2019, FY2020 passed in December 2019, and FY2021 passed in December 2020.) The Hill speculated last week that the FY2022 appropriations act due the end of this month may also be deferred to December.

When Congress misses the September 30 deadline to fund the new year, as usual, they fill the gap with one or more Continuing Resolutions, which extend the deadline on the previous year’s appropriations act. CRs by nature are smaller and more limited than an appropriations act (fewer pages), and thus less hopeful for miscellaneous additions. It’s possible that a hefty EB-5 reform bill could be attached to a CR this month, but I’d be surprised. I assume that the larger appropriations act, whenever that passes, is the industry target for EB-5. (From 2015 to 2020, regional center program authorization was not specially mentioned in CRs, but extended by default in CRs thanks to RC authorization being attached to the previous year’s appropriations. This year, a CR deadline extension would not help in and of itself, because RC program authorization is now decoupled from the FY2021 appropriations deadline.) FYI my log of past regional center program extensions includes a list of continuing appropriations and appropriations acts for the past six years, with dates and links. Note that “610(b)” or “203(b)(5)” are search terms to locate EB-5 content in a bill. (The bare minimum language needed for reauthorization is this sentence: “Section 610(b) of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note) shall be applied by substituting [future date] for ‘’September 30, 2015’.” An EB-5 reform bill will include a sentence similar to “Section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)) is amended…”)

The timing for the second reauthorization condition – agreement by Congress to industry demands – is an open question. I already discussed my understanding of the field in my post Sizing the Reauthorization Hurdle. EB5IC and AAED are still committed to advance an alternative to the sub-optimal Grassley/Leahy EB-5 reform bill — an alternative that would not only reauthorize the RC program but add provisions to make the program more viable. This ambitious agenda has powered through blocking the Grassley/Leahy bill in June, seeing the RC program expire, and missing the Senate infrastructure bill opportunity.  How long will it take for these ambitions to finally be either accepted by Congress or moderated by industry? Lobbyists realize that patience is limited, and are reportedly working very hard to get Congress to agree to reauthorization soon, before investors, USCIS and Department of State give up on regional center petitions and applications. (As evidence that “the last minute” has already arrived, a USCIS leaker tells me that 154 EB-5 investors withdrew their I-526 petitions just in the last two weeks. Action is needed soon to stop the bleeding.)

I see three theoretical possibilities for the content of reauthorization legislation: (1) what industry groups including EB5IC and AAED want (legislation not yet made public, but reportedly based on S.2778 from last Congress); (2) what Senators Grassley and Leahy want, based on their S.831/HR.2901; or (3) a reauthorization that simply extends the RC program expiration deadline short-term in connection with the appropriations deadline, with no attached reform provisions. I discussed these options in detail a couple months ago in my post EB-5 legislation and the question of options (Grassley’s S.831 vs. the “holistic” S.2778). Of these, only the first appears a practical possibility at the moment.

 #3 is what we got every year from 2015 to 2020: short-term extensions to give the industry more time to agree on EB-5 reform legislation. #3 looks less probable now, since Congressional leadership went out of their way in December 2020 to decouple RC program authorization from appropriations, ostensibly to force the EB-5 legislation that’s already been deferred for five years.

#2 also seems improbable, since Senators Grassley and Leahy have not demonstrated the power to overcome industry opposition to get their reform bill passed. True, Senator Leahy can claim credit as the “driving force” for all regional center program authorizations from 2003 through 2012, and IIUSA has been willing to support the continued Grassley/Leahy reauthorization effort. But EB5IC has celebrated success in blocking Grassley/Leahy EB-5 legislation since 2015 (with other industry groups including U.S. Chamber of Commerce and the Real Estate Roundtable), and industry most recently demonstrated the will and power to block the Grassley/Leahy reauthorization path in June 2021.

So we’re left to hope that Congressional decision-makers might eventually agree with what industry groups want with reauthorization. EB5IC and AAED report that legislation is drafted and ready to go behind the scenes, though the text has still not been disclosed to the public.  (“They love the darkness better than the light because____” “…because their bill text includes no poison pills for Congress and honors promises to industry stakeholders.” Maybe.) To be fair, Grassley/Leahy also tried to get their EB-5 reform bill passed last year without disclosing it until the very last minute. This is politics, apparently. EB5IC and AAED report having secured some key Congressional support for their legislation. We shall see whether the support is sufficient to get Congress to shortly attach reauthorization to a bill that will pass.

Whether the industry effort has universal industry support may be irrelevant at this point. The main issue and question is probably just Congressional support. (One thing I don’t know: whether industry forces that have kept entire public silence this time but influential in past legislative efforts (e.g. U.S. Chamber of Commerce, Related Companies, and U.S. Immigration Fund) may exercise veto power behind the scenes. Since IIUSA’s bottom line goal is reauthorization one way or another, I think it would and could not stand in the way of any bill moving forward. But not sure about the others.) In taking control of the ball for EB-5 legislation and running with it, EB5IC and AAED are now positioned to be showered in gratitude or criticism, depending on how their play turns out.  

Note that public-facing messages from EB5IC and AAED can be found on the Pathways EB5 Vimeo site and the AAED wechat. (If anywhere else, please let me know and I’ll publish.)

Separate from the regional center program authorization issue, the EB-5 category could be affected as part of other immigration proposals being discussed now. See “Democrats make immigration case to Senate parliamentarian” (September 10, 2021) in Roll Call and “Chairman Nadler Announces Committee Print for Full Committee Markup of Build Back Better Act” (September 10, 2021) at house.gov (including link to the proposed immigration provisions). This particular immigration proposal promises limited EB-5 impact, and I’ll wait to analyze it until it makes any progress. But something like this is probably the best hope for EB-5 visa relief. EB-5 visa relief bundled with reauthoriation legislation would just make the reauthorization controversial, by making it a stand-alone immigration issue rather than an economic development issue. EB-5 visa relief theoretically has better politics and opportunity as bundled with visa relief for other visa categories that are immigration priorities for the Administration, and supported by other powerful industries. (My post from a few months ago discusses Analyzing potential changes to EB-5 visa availability.)

Meanwhile, a reminder for those negotiating for Chinese investor interests to examine examine “parole.” The prospect of parole with work authorization appears to be a key bargaining chip within the industry for EB-5 legislation, and also wreathed in hopes that do not match the highly conditional and temporary benefits in existing immigration parole programs. See the Congressional Research Service report on “Immigration Parole,” for an overview, and program details on the USCIS page for Parole for Individuals Outside the United States.

I’d also like to repeat my hope and trust that the visa-set-aide proposal has already been excised from the S.2778 template. (Set-asides meaning 3,000 EB-5 visas per year set aside for new TEA investors, and thus deducted from the pool historically leftover from low-demand countries and issued to the oldest backlogged Chinese visa applicants). Lobbyists have publicly disclaimed queue-cutting set-asides. But just in case anyone is tempted to keep pushing set-asides despite lingering visa backlogs, I suggest reviewing Shakespeare’s Richard III, Act 4 Scene 4 (start at line 210). See how Richard approaches his sister-in-law Queen Elizabeth, whose sons he has slain, to woo her daughter as his wife. Richard counts on Elizabeth’s ambition to make it work, and argues the past sacrifice can be covered by future benefit for her. But Elizabeth points out that her daughter “cannot choose but hate thee, having bought love with such a bloody spoil.” I like to think that Chinese migration agents would stand up like Queen Elizabeth, if asked to take a bloody spoil of set-aside visas to woo new investors. How wonderful if the China market could re-open with visas available for new investment! But that bright possibility must depend on visa relief not bought with visa pain for past Chinese investors. There must be good faith with past investors — not merely in intention (“but we did not mean set-asides to hurt, and we did mean other provisions to compensate” — a classic Richard III line), but in the real-world results of legislative changes. Ideally we could get backlog relief, which is essential to EB-5 program health and future. At minimum, let’s all keep responsible to avoid net backlog harm from any new EB-5 legislation. Long-suffering Chinese investors deserve good advocacy now, considering that they already committed billions of dollars and spurred creation of tens of thousands of jobs in the U.S. economy.

UDPATE: As this post ended on rather a low note, see also We’re all in this together.

Sizing the reauthorization hurdle

I’ve been overwhelmed with everything that could be written, in this period of unparalleled transition, opportunity, and existential crisis for the EB-5 industry and investors. I’ll start by getting out a few words on the elephant of regional center program reauthorization, so that I can move on to many updates about USCIS processing, policy revisions, visa numbers and timing, and direct EB-5. And my business plan writing day job, also.

Before I begin my editorial about reauthorization, note that I’m summarizing and commenting from a distance on what I’ve read and heard. You can get more information and direct involvement by joining an advocacy group. Regional Centers and service providers can join IIUSA and/or EB5IC to get educated and influence legislative efforts. For EB-5 investors, I recommend joining AIIA. This organization is off to an impressive start in getting meetings with Congressional staff and industry decision-makers, and holds regular video call updates to involve and inform even small donors. For Chinese investors specifically, I see that AAED has recently been the largest spender on EB-5 lobbying.

And now, my perspective on the outlook for regional center program authorization.

Question: When will the regional center program be reauthorized? Answer: after Congress agrees to the industry’s reauthorization wish list, or the industry backs down and accepts sub-optimal reauthorization legislation. Practically, September 2021 now appears to be about the earliest that reauthorization could happen, and the latest it should happen.

Everyone seems to agree that regional center program authorization can’t get passed as a stand-alone bill, but must get loaded onto one of the big legislative trains going through Congress. That could mean the infrastructure bill being finalized right now, or the budget reconciliation and appropriations bills that will come up in September. The disagreement comes with the question: how big a reauthorization bundle can and should we try to load onto a legislative train?  How small a bundle can the industry agree to present, and how large a bundle will Congress be willing to take onboard?

With S.831/ H.R.2901, Senator Grassley made a relatively small bundle: just reauthorization with integrity measures. Integrity measures are not fun for the industry, but they are politically uncontroversial. No Congressperson is going to get slammed in the media or face an election challenge for having voted for integrity measures. EB-5 industry groups dislike some details, but they unite in saying that they support integrity measures. The industry association IIUSA supports S.831 because it’s a small bundle, and thus relatively easy to fit on a legislative train. The industry association EB5IC opposes S.831 because it’s a small bundle, and thus leaves some important industry priorities behind on the platform. EB5IC accepts reauthorization and integrity measures, but wants that to be bundled together with programmatic changes to reopen new investment: TEA/investment amount changes and visa set-asides. AAED, the group lobbying particularly for Chinese investors stuck in a terrible backlog, wants reauthorization to be bundled with visa relief.

Both EB5IC and AAED see reauthorization as the prime and only near-term chance to get what they need on a legislative train, and thus they balk at allowing a smaller reauthorization bundle to proceed instead. But the things that EB5IC and AAED want to add to reauthorization are politically controversial, thus increasing the risk that legislative trains will pass by without accepting such large bundles.  A Congressman can get slammed in the media and his next primary for having been seen to support TEA changes that obviously benefit prosperous urban developers. If he supports additional visas or new admissions for EB-5, he’ll incite everyone who’s against immigration, and also spark opposition from everyone who’s in favor of immigration but wants the same benefits for different categories. The politically-costly legislative bundles contemplated by EB5IC and AAED would have some great benefits for the EB-5 industry, if only they could be passed, but they create a high political hurdle for reauthorization. The industry has previously agreed that that TEA and visa relief asks are desirable, but now disagrees as to whether they’re at all achievable.  

And thus the reauthorization fight so far has happened on the loading dock, with disagreements about what to try to get on a train together with reauthorization. When Senator Grassley, with IIUSA’s support, brought S.831 up for Unanimous Consent on June 24, Senator Graham, pushed by competing industry factions, blocked S.831 from passing the Senate. In their webinar on June 24, EB5IC explained the reasoning behind this block: they said that they do support integrity measures, but do not want a long-term reauthorization that omits and thus defers their other priorities of TEA/investment amount changes and visa set-asides.  (Senator Grassley attempted to compromise by offering the industry a shorter-term reauthorization – 2.5 years instead of 5 years – but this was not accepted.)  EB5IC went on to reference their negotiations behind the scenes for alternative legislation, and foresaw the infrastructure bill as a possible vehicle, with Senator Schumer as a possible champion willing and able to heft a larger and more valuable reauthorization bundle onto that vehicle.

We spent the month of July waiting, wondering if the industry factions with the will and power to temporarily block the advance of the low-risk low-reward Grassley reauthorization bill would also have the will and the power to advance a more ambitious alternative path to reauthorization. Senator Schumer and his group finalized the text of the infrastructure bill yesterday. The text as of August 1 spans over 2,000 pages and covers a number of economic development programs. It does not include the regional center program. I’m sad but not surprised. With all the effort to rid the infrastructure bill of controversial elements, could Senator Schumer possibly have agreed to pick up a heavy reauthorization bundle weighted with controversial elements, as had been hoped? And yet would EB5IC or AAED have allowed him to pick up less, considering their objectives for reauthorization?

If the infrastructure bill proves to be a missed opportunity, then industry groups should re-assess how much they can expect and afford to demand in the next reauthorization attempt.  If Congressional negotiators wouldn’t touch TEA changes and EB-5 visa relief in the infrastructure bill, why would these asks have a chance to board the next legislative train? Senator Grassley’s S.831/H.R.2901 remains an option, if the industry can accept a medium-term reauthorization with integrity measures, and without other programmatic changes in the medium term. The option of a “clean” no-change short-term reauthorization with the September funding bill is impossible, if Senator Grassley has power to make good on his strongly-worded promise to block such a move. A clean long-term reauthorization is even less an option, since no one but IIUSA would support it. Senator Grassley would oppose it as long-term deferral of his priority integrity measures, while EB5IC and AAED would oppose it as long-term deferral of their priority programmatic changes. So long as we get long-term reauthorization at all, it’s going to be a bundle of some kind – a bundle that’s a compromise between what the interested parties want and what the interested parties are willing to give. (I don’t bother to account for the majority of Congress and the public who hardly realize or care that EB-5 even exists, and who lack the interest or the power to affect RC program authorization.)

We cannot afford to miss the next opportunity for legislative vehicle. Senator Grassley has little reason to shed tears if the regional center program stays expired due to dissatisfaction with his bill, which he is supporting for his own reasons and not on behalf of constituents. Industry groups do have reason to seriously consider compromise on their priorities, if necessary to get authorization, and the Senators only involved as a favor to constituents have reason to listen to them. AAED’s investor constituents have already suffered greatly from RC program expiration, with long-awaited consular interviews in Guangzhou scheduled and then abruptly cancelled, U.S. jobs lost, and thousands of visas going to waste. Chinese investors have much to lose if reauthorization happens without visa relief, but likely even more to lose from forcing reauthorization to wait for the blue moon of achievable visa relief. Some regional centers are hardened by belief that the EB-5 program is dead with or without reauthorization, unless Congress adds programmatic fixes. But regional center constituents will suffer too if the program stays expired long enough to result in mass I-526 denials, investors fighting for exits for their capital, and wide reputational damage. Regional center EB-5 petitions and applications are being held in abeyance for now, not denied, but USCIS and Department of State may reassess that policy if the fiscal year ends on September 30 with no progress yet toward RC program authorization. That’s a lot of pressure on industry to get reauthorization legislation attached to one of the legislative vehicles available by September 2021, one way or another. Let’s be serious about making reauthorization as probable as possible within that informal deadline. Reauthorization runs genuine risk of continuing to miss the train indefinitely, unless we are realistic.

This is my understanding, based on what I’ve read and heard. You’re welcome to post dissenting views in the comments. But even better, take action that makes a difference. Get involved in advocacy, get the interested factions to hear your voice, and let good results prove you right.

And finally, because I’m a business plan writer and prefer tables to paragraphs, here’s an attempt to summarize the various interests and priorities in table form.

USCIS Policy Manual EB-5 Updates (regulations, reauthorization, indebtedness, CSPA)

The USCIS Policy Manual is a fluid online document that gets edited periodically, with and without notice, which is exciting and disconcerting. Being someone who likes to know the rules, I save copies of the PM at different dates, and redline changes. In July 2021, USCIS made several PM updates that affect EB-5. However, redline shows that the updates are minor, and reflect policy that’s been in place for awhile already. Here’s my document highlighting specific EB-5 content added to the PM in July 2021.

1. Regulations update. I’d wondered when USCIS would acknowledge the Behring lawsuit win by revising policy language about EB-5 investment amounts and TEAs. On July 15, 2021, USCIS made a minimal Policy Manual revision: simply copying and pasting the same “Alert” about the Behring lawsuit that’s on the USCIS website EB-5 homepage into the beginning of Policy Manual Volume 6 Part G, Chapters 1, 2, 3, 4, and 5. USCIS did not revise the body of the PM.  So if you go to Chapter 2 today, the body of the chapter still says that the EB-5 investment amount since November 21, 2019 is $1.8 million, or $900,000 in a USCIS-designated TEA, but the header alert clarifies that the required EB-5 investment amount is $1.0 million, or $500,00 in a state-designated TEA and “In other words, we are applying the regulations in effect before Nov. 21, 2019 in this chapter.”  With this update, USCIS takes another important step to officially acknowledge the Behring lawsuit outcome. At the same time, the minimal note implies that someone does not expect the outcome to last long enough to justify actually revising rather than merely footnoting the old policy language.
2. Regional Center lapse update. Also on July 15, USCIS acknowledged the regional center program expiration by adding an “Alert” to the beginning of Policy Manual Volume 6 Part G, Chapters 1, 2, 3, and 4 (but not Chapter 5 on removal of conditions). Again, the body of the PM was not revised, presumably reflecting hope that the RC program expiration also will not last long. The “Alert” added to the PM is identical to the first half of the “Alert” put on the USCIS website regional center page. The PM alert does not include the language about RFE response, I-829, or I-485.
3. CSPA: On July 26, USCIS announced a Technical Update – Adding References to the EB-5 Visa Program in Child Status Protection Act Guidance. It appears that the single change was to add the words “Immigrant Petition by Alien Investor (Form I-526)” to the list of applicable underlying forms for status adjustment.
4. Indebtedness: On July 22, USCIS announced a POLICY ALERT – Immigrant Investors and Investment of Loan Proceeds. Redline shows that this update did no more than to replace a couple words in the Policy Manual with the word “indebtedness,” and to add a footnote that “USCIS no longer follows its interpretation of indebtedness as including the investment of loan proceeds as of November 30, 2018, the date of the district court decision Zhang v. USCIS, 978 F.3d 1314 (D.C. Cir. 2020).” Since USCIS lost the Zhang court case in November 2018 and lost its final appeal of that decision back in January 2019, USCIS should have been “no longer following its interpretation” for over two years now already. The new Policy Manual footnote is merely a belated acknowledgement of that fact. See also the “Class Action Member Identification Notice” that’s been on the USCIS website EB-5 homepage for a couple years now. And more to the point, see Administrative Appeals Office decisions that sustain appeals of I-526 denials over loan proceeds. For example: JUN162021_01B7203 and MAR242021_01B7203. If you are a member of the class whose I-526 was “denied on the sole basis of investing loan proceeds that were not secured by their own assets,” you have had and still have the right to get that denial vacated and reconsidered.

USCIS Guidance for Regulations

USCIS has finally reacted to the court decision on the EB5 Modernization Regulation, with an Alert and note published at https://www.uscis.gov/working-in-the-united-states/permanent-workers/eb-5-immigrant-investor-program

Alert: On June 22, 2021, the U.S. District Court for the Northern District of California, in Behring Regional Center LLC v. Wolf, 20-cv-09263-JSC, vacated the EB-5 Immigrant Investor Program Modernization Final Rule (PDF). While USCIS considers this decision, we will apply the EB-5 regulations that were in effect before the rule was finalized on Nov. 21, 2019, including: 

–No priority date retention based on an approved Form I-526;

–The required standard minimum investment amount of $1 million and the minimum investment amount for investment in a Targeted Employment Area (TEA) of $500,000;

–Permitting state designations of high unemployment TEAs; and

–Prior USCIS procedures for the removal of conditions on permanent residence.

In other words, we are applying the regulations in effect before Nov. 21, 2019, on this website and in the USCIS Policy Manual, Volume 6, Part G, Investors. In addition, we again will accept the April 15, 2019, version of Form I-526, Immigrant Petition by Alien Entrepreneur, because the Nov. 21, 2019, version of the form reflects updates from the now-vacated rule.

The USCIS main page has a slightly different alert:

On June 22, 2021, the U.S. District Court for the Northern District of California, in Behring Regional Center LLC v. Wolf, 20-cv-09263-JSC, vacated the EB-5 Immigrant Investor Program Modernization Final Rule. We will apply the EB-5 regulations that were in effect before Nov. 21, 2019, and accept Form I-526 petitions filed on the April 15, 2019, version, which is the only form that DHS updated as part of the vacated rule. DHS, along with the Department of Justice, is reviewing the court’s ruling and is considering all judicial and administrative options for preserving important changes made by the vacated regulation. For more information, see the EB-5 Immigrant Investor Program page on our website.

USCIS Guidance for RC Lapse (updated)

7/1 UPDATE: USCIS just replaced its guidance on the USCIS website page for Approved EB-5 Immigrant Investor Regional Centers with a new message that now says regional center Form I-485 and I-765 filings will not be accepted during the lapse. (The message is now also repeated on the main EB-5 page, the Form I-924 page, and the Form I-526 page.) The I-485 change is odd, since Department of State is accepting regional center visa applications, per the July 2021 Visa Bulletin. I’m copying below the guidance on 7/1, while keeping my original 6/30 post that records what USCIS said yesterday. Who knows how often I’ll need to update this post going forward, as USCIS changes its mind.

Statutory authorization related to the EB-5 Immigrant Investor Regional Center Program expired at midnight on June 30, 2021. This lapse in authorization does not affect EB-5 petitions filed by investors who are not seeking a visa under the Regional Center Program. Due to the lapse in authorization related to the Regional Center Program, USCIS will reject the following forms received on or after July 1, 2021:

Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program, except when the application type indicates that it is an amendment to the regional center’s name, organizational structure, ownership, or administration; and

Form I-526, Immigrant Petition by Alien Investor, when it indicates that the petitioner’s investment is associated with an approved regional center.

In general, we will not act on any pending petition or application of these form types that is dependent on the lapsed statutory authority until further notice. If you were issued written correspondence regarding your petition or application on or before June 30, 2021, you should review the written correspondence and respond by the due date (as applicable). Although USCIS is unable to review your response at this time, we will receive and maintain the response for review if circumstances change.

We will continue to accept and review Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, in the normal course, including those filed on or after July 1, 2021.

We will begin rejecting all Forms I-485, Application to Register Permanent Residence or Adjust Status, and any associated Forms I-765, Application for Employment Authorization, and Forms I-131, Application for Travel Document, based on an approved Regional Center Form I-526.

We will provide further guidance to the public if circumstances change or further guidance becomes necessary.

https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor-regional-centers/approved-eb-5-immigrant-investor-regional-centers

Original 6/30 post:

The USCIS website page for Approved EB-5 Immigrant Investor Regional Centers was just updated with this statement:

Alert: Statutory authorization related to the EB-5 Immigrant Investor Regional Center Program will expire at midnight on June 30, 2021, unless Congress reauthorizes it. A lapse in authorization does not affect EB-5 petitions filed by investors who are not seeking a visa under the Regional Center Program.

In the event of a lapse in authorization related to the Regional Center Program, we will reject the following forms received on or after July 1, 2021:

–Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program, except when the application type indicates that it is an amendment to the regional center’s name, organizational structure, ownership, or administration; and

–Form I-526, Immigrant Petition by Alien Investor, when it indicates that the petitioner’s investment is associated with an approved regional center.

In general, we will not act on any pending petition or application of these form types that is dependent on a lapsed statutory authority until further notice. If you were issued written correspondence regarding your petition or application on or before June 30, 2021, you should review the written correspondence and respond by the due date (as applicable). Although we cannot review your response at this time, we will receive and maintain the response for review if circumstances change.

We will continue to accept and review Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, in the normal course, including those filed on or after July 1, 2021.

We will continue to accept Form I-485, Application to Register Permanent Residence or Adjust Status, based on an approved Form I-526. However, in the event of a lapse in authorization, we will be unable to act on any Form I-485 based on an approved Form I-526 associated with an approved regional center unless a visa through the Regional Center Program is reauthorized.

We will provide further guidance to the public if circumstances change or further guidance becomes necessary.

https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor-regional-centers/approved-eb-5-immigrant-investor-regional-centers

Senate setback for RC program authorization

What happened?

Today June 24, the Senate’s last working day before the regional center program sunset on June 30, Senators Grassley, Leahy, and Cornyn stood together on the Senate floor to request unanimous consent to pass S.831 to reauthorize the regional center program. (The EB-5 portion of the Senate floor proceedings on 6/24 can be reviewed here starting at time 2:54:52.) All three Senators spoke warmly about the regional center program and their efforts to reform and preserve it. Senator Cornyn’s decision to join Grassley and Leahy was significant, since he had been associated with the “holistic” faction alternative to Grassley’s reform efforts, and was an original co-sponsor of the S.2778 bill that the opposition hopes to revive. I was happy to see at least this level of compromise and unity in the cause of reauthorization. However, South Carolina Senator Lindsey Graham, another Senator in the “holistic reform” corner, registered an objection to the unanimous consent. And so S.831 did not pass the Senate today. A short-term extension was not brought forward by Senator Schumer or his proxy, as some had hoped. The Senate is now on recess until after July 4, so the window for legislation in advance of June 30 has closed. (The House version of the Grassley bill has been making progress, with 23 cosponsors so far, but the House can’t pass laws by itself.) The regional center program will sunset starting July 1, 2021. The battle for reauthorization legislation will continue once Congress gets back to work after July 4. The timeline and outlook for final resolution remains unknown.

What does it mean?

Regional center program lapse/expiration does not directly affect direct EB-5, or regional center investors who have already been admitted for conditional permanent residence. The lapse will put a freeze on pre-green card regional center petitioners and applicants, until the RC program is reauthorized.

USCIS has yet to publish guidance for how exactly they will handle regional center petitions during this program lapse/expiration. There’s informed speculation that the policy will initially be similar to what was published in December 2018 during the last lapse. I will report when the USCIS website gets updated. (In the meantime, attorney Robert Divine has a helpful article on practical implications of a lapse.)

The July 2021 visa bulletin gives the Department of State policy on visa issuance during the lapse/expiration for regional center (i.e. I5 and R5) visas. “The I5 and R5 visas may be issued until close of business on June 30, 2021 and may be issued for the full validity period. No I5 or R5 visas may be issued overseas, or final action taken on adjustment of status cases, after June 30, 2021. Since there has been no legislative action at this time, the final action dates for the I5 and R5 categories have been listed as “Unavailable” for July. If there is legislative action extending this category for July, the final action dates would immediately become “Current” for July for all countries except China-mainland born I5 and R5, which would be subject to a November 8, 2015 final action date and Vietnam I5 and R5, which would be subject to an April 1, 2020 final action date.” Any questions regarding what’s in the visa bulletin can be directed to the blessed Charles Oppenheim, who will be hosting another “Chat with Charlie” live on Youtube on Monday, June 28, 2021 at 1:00 PM Eastern Time. (Per the visa bulletin, one can email questions to VisaBulletin@state.gov ahead of the event with “Chat with Charlie Question” in the email subject line.)

Why did it happen?

Maybe there was practically no chance to get RC reauthorization passed before the tight June 30 deadline regardless, given the lack of legislative vehicles to which it could have been attached. Maybe compromise could and should have advanced legislation, if only negotiators had been more flexible.

Instead of speculating about causes and blame, I will start by simply repeating what key players in the reauthorization drama have to say for themselves. As background, key industry players have been IIUSA and its allies, who have chosen to support the current Grassley bill as the best/only way to avoid RC program death; and EB5 Investment Coalition (EB5IC), which considers that the Grassley bill is death and should be opposed to make an eventual path to something better. IIUSA has associated with Senators Grassley and Leahy, while EB5IC has implied association with Senator Schumer, and also Rounds, Graham, and (previously) Cornyn. Grassley v. Schumer represents a long-standing division around EB-5 legislation that has been in place since the last multi-year RC program extension ended in 2015 – a division roughly caricatured as Middle America vs. the Big City.  Schumer, Rounds, and Graham did not make any EB-5 statements today that I can find (beyond Graham’s one-word objection on the Senate floor). I’m copying below statements made today by Grassley, Leahy, and Cornyn, and excerpts from the most recent statements from IIUSA and EB5IC. I’ll let you think about where grains of salt need to be applied, where the rights and wrongs lie, and where the path forward could be. (One question I keep thinking about: what does each of these players think the BATNA is? Could compromise be encouraged by pointing out issues with some of those envisioned BATNA?)

IIUSA’s perspective was recently represented in an article by IIUSA Executive Director Aaron Grau published on June 21 in the Times Union. I copy excerpts here:

Recently, Senators Chuck Grassley, R-Iowa, and Patrick Leahy, D-Vt., introduced S.831, the EB-5 Reform and Integrity Act of 2021, a bipartisan bill that protects investors, assures the program’s integrity and secures its longevity. Shortly after, Rep. Greg Stanton, D-Ariz., and Rep. Brian Fitzpatrick, R-Penn., introduced an identical companion bill in the House of Representatives, HR 2901. The House bill has 20 cosponsors and counting, Republicans and Democrats.

However, opposition continues to mysteriously fester, unfairly keeping key policy makers, like Senate Majority Leader Charles Schumer and House Judiciary Committee Chairman Jerry Nadler, away from embracing the bipartisan, bicameral solution at hand.

The EB-5 Regional Program needs change, including increased integrity measures to help protect against the fraud and abuse brought on by one too many bad apples. It needs provisions to protect good-faith investors who, through no fault of their own, may find themselves in a terminated project. And the program needs stability — the kind of stability that only comes from a long-term, five-year reauthorization.

With just days until the program expires, time is of the essence and, without Schumer’s support, this powerful development tool goes away and future EB-5 investments and vital jobs for New Yorkers will be eliminated.

[Update: See also IIUSA’s 6/25 Advocacy Alert on program sunset. I also recommend the 6/23 Investment Migration Report webinar with Aaron Grau, an extremely substantive 1.5-hour discussion that addresses most questions about the legislative process, and also touches on the Behring litigation on regulations.]

EB5 Investment Coalition does not typically make statements, but kindly held a webinar for the public at 9 am EST on June 24, ahead of activity in the Senate. Below, I transcribed an excerpt of legislation-related remarks from that webinar, quoting EB5IC co-founders Laura Foote Reiff of Greenberg Traurig and Jeff Campion, CEO of Pathways EB-5.

Jeff Campion: So I know that we’re working on extension. Obviously you said it expires June 30, we all know that. So let’s talk about where the extension is. Grassley and Leahy, they’ve hot-lined the bill. It’s on UC I guess today. What does that all mean? I know that we’re trying to get the program extended for a period of time. But what’s the lay of the land from your side?

Laura Foote Reiff: So we’ve always had for the last six-plus years some key players who have been interested in the program. We saw last Congress Senators Cornyn, Rounds, Schumer, and Graham introduce a more holistic bill, S.2778. It was a bill that would change the programmatic rules and deal with integrity measures. Senators Leahy and Grassley have introduced an integrity-measure only bill. They reintroduced that bill this Congress. And we’ve been trying to talk to them about adding in some programmatic measures to deal with backlog issues and investment levels and the TEA definitions, to no avail. There were some serious conversations for the last couple weeks with, I think, Senator Schumer’s office. We’re trying to work with them on some edits that would be acceptable. Senators Grassley and Leahy have now done what they called “run a hotline” on the legislation, and I understand they’re going to take the bill to floor of the Senate for unanimous consent without any edits except for the fact that instead of the five-year extension, they’ve amended it to a two and a half year extension of integrity measures only. So it’s unfortunate.

Jeff Campion: So there’s a few options here, right? I guess one option is they make it where its not 27 months, it’s 15 months or 3 months, or someone puts a hold on it and it doesn’t go through. I mean those are kind of the different options, right?

Laura Foote Reiff: Yeah, I mean, it’s unfortunate in Congress these days that you can’t go through regular order to get legislation through. We’ve been trying to get more comprehensive legislation on EB-5 through for many years. So this is one tool that Senators will use, the unanimous consent effort. If there is any objection to the unanimous consent motion, then the thing fails. And we think that there are enough holds on it that it probably won’t pass. But there’s going to be some negotiation. We’re hoping in the end they come up with something, some kind of compromise so that there’s a shorter-term extension of the regional center program with an opportunity to negotiate out that more holistic reform to deal with some of the programmatic issues that exist.

…What could happen with the reauthorization, when Congress comes back from their recess, they could take this up at any time. They could have unanimous consent in July, they could have unanimous consent on something, whether it’s a short-term extension, whether it’s integrity measures, whether it’s a holistic thing. They could also work together, like Senators Cornyn, Graham, Schumer and Rounds did, on a more holistic bill, and have that attached to another vehicle. As we just said at the beginning of this program, it’s very difficult to pass a stand-alone piece of legislation. So the vehicle could be an infrastructure bill, it could be some other immigration bill going through. And/or we could see ourselves being reattached, maybe recoupled back in September. Nothing is guaranteed. It’s all kind of making sausage up on the Hill. I know a lot of people are afraid about the program expiring. It’s never fun to have a program expire, but it happens.  I know, as you said Jeff, there’s going to be a lot of pressure to do something to try to resuscitate the program between now and September 30.

(As background on what’s involved in a more holistic bill, see my post EB-5 legislation and the question of options. See also IIUSA’s article on why the industry trade association did not to demand programmatic fixes as a condition of passing integrity reforms. As background for what Senator Grassley thinks about short-term extensions coupled with appropriations bills, see his posts from 2015 and from 2018.)

Senator Grassley published an article on his website today with a typically pugnacious comment about what happened. To quote some excerpts:

Sen. Chuck Grassley, Ranking Member of the Senate Judiciary Committee, and Sen. Patrick Leahy, Chairman of the Senate Appropriations Committee, today condemned a blockade of their bipartisan bill to reform and extend the EB-5 investor visa program, which expires on June 30. The blockade was led by a small group of wealthy and unscrupulous real estate developers who blindly oppose any efforts to improve accountability and transparency in the EB-5 visa program.

“A narrow subset of big moneyed and corrupt interests has now shown that they would rather kill the program altogether than have to accept integrity reforms designed to clamp down on their bad behavior,” Grassley said on the Senate floor.

“It’s really unfortunate that a bipartisan bill supported by the overwhelming majority of EB-5 stakeholders was blocked at the behest of a small minority that blindly opposes much-needed accountability and transparency in the program.  Senator Grassley and I have worked together for years to develop a thoughtful, careful compromise that would both keep the program alive and curtail the worst abuses of it.  Now that our bill has been blocked, the EB-5 visa program is unfortunately going to lapse in the days ahead and have untold economic consequences throughout the communities that rely on the program for development projects.  I remain committed to reforming the EB-5 program should there be another opportunity to do so,” Leahy said.  

Senator Cornyn’s website published this message.

Today on the floor, U.S. Senator John Cornyn (R-TX) discussed the importance of the EB-5 Immigrant Investor Program and his legislation that would make commonsense reforms, which was blocked from passage this afternoon. The current authorization runs out on June 30^th. Excerpts of Sen. Cornyn’s remarks are below, and video can be found here.
“EB-5 investments are a major economic driver in Texas. EB-5 projects use merit-based immigration to create thousands of American jobs and bring billions of dollars in investment to major urban areas like Dallas and Houston, as well as our rural communities across the state. These projects include investments in infrastructure for a wide variety of sectors, including energy, hospitality, residential and commercial.”

“I’m a supporter of the EB-5 program and its resources it delivers to the community, but there is no question, as Senator Grassley has said, that it could stand some reforms.”

“I’m glad to join Senator Grassley today in offering this legislation to improve the integrity and security of the EB-5 program while ensuring law-abiding Texas job creators aren’t negatively impacted. This bill would have reauthorized the EB-5 program until 2023 with significant oversight and integrity measures.”

Senator Cornyn went on to say (quoting from the end of his statement on the Senate floor starting at time 2:57:11):

This happens to be very similar to legislation that I introduced in 2015 with Senator Schumer and Senator Flake, which included recommendations from both the Department of Homeland Security and the Government Accountability Office. I appreciate Chairman Grassley’s leadership on this legislation, and I hope at some point we can reauthorize the EB-5 program and safeguard critical investments in communities across the country.

Senator Leahy of Vermont had this to say (starting at time 2:59:26 in the recording of Senate floor proceedings for June 24):

I was happy to join both Senators Grassley and Cornyn on the EB-5 reform bill. Senator Cornyn has worked very hard on this, Senator Grassley has, and I have. And it was a truly bipartisan bill that has widespread support among EB-5 stakeholders – those who responsibly welcome changes in the program that would improve oversight and accountability.

Senator Grassley and I have been working for years to reform the EB-5 visa program. We want to reduce the fraud that’s current in several EB-5 projects, including one that occurred in my own state of Vermont. And this legislation – again, bringing Republicans and Democrats across the political spectrum together – reflects a careful, thoughtful compromise that will keep the EB-5 program alive and curtail the worst abuses.  

There’s actually only a small minority that wants to keep the program operating without these improved these standards and oversight, and I wish they would be willing to bring it out, vote it up or down. Be on the record, saying how they’re going to vote. Because opposing our effort on this is a vote that allows the EB-5 program to lapse. That’s going to have untold economic consequences throughout the communities that rely on the program for development projects, like those that the Senator from Texas just mentioned.

I wish that the senators supported Senator Grassley’s consent request, but I will take a moment to thank Senator Grassley for working with me over the years to find a bipartisan compromise reform list. Hours have gone into that. He and Senator Cornyn and I and others have worked hard to have a compromise. I’m sorry that the unanimous consent was objected to, especially since it means this will expire, and we won’t have votes on improvements that could take part. I think it’s a wasted opportunity.

And finally, a note for people inspired to share their touching personal-impact stories in response to this post. Advocacy organizations might love to hear your experience, so they can bring it forward in conversations with members of Congress and the media to directly influence legislative outcomes. Consider contacting an advocacy organization to tell your story. AIIA has a form up to collect contact info for a database of EB-5 investors willing to speak with or be quoted to Congresspeople in various constituencies, and journalists. And IIUSA says “Share your EB-5 success stories with us via e-mail so we can share them with members of Congress.”

What the RC program deadline means

This blog is not the place for hot takes, so I will wait to report in detail on regional center authorization status and implications going forward. But I’m getting showered in marketing emails that imply that filing a regional center I-526 before June 30 will allow investors to beat the regional center program deadline and its consequences. For the sake of program integrity, I would like to repeat a paragraph from preeminent EB-5 authority Robert Divine in the article “The problem with EB-5’s reliance on temporary legislation.”

WHAT HAPPENS IF THE EB-5 PROGRAM DOESN’T GET REAUTHORIZED?

The shocking reality is that expiration of the program without renewal would invalidate the immigration processing of every regional center investor who has not already been admitted to the U.S. as a conditional permanent resident, even if they already have filed their I-526 or have an approved I-526 and is waiting for a visa number or processing.  That would affect as many as 100,000 investors who have already placed their capital in a project and who might remain stuck in the investment while losing all immigration benefits.  The investors would not be able to “change gears” to try to count only the direct operational jobs of the project (if there would be any) if they invested through an NCE separate from a JCE (extremely typical). 

USCIS probably would hold I-526 petitions in abeyance for several months waiting for a retroactive legislative solution, but eventually if that solution did not come, USCIS would deny all pending I-526 petitions and revoke all I-526 approvals for all investors who had not already been admitted to conditional permanent residence.  Affected investors might bring lawsuits against USCIS arguing that the expiration of legislation should only be prospective, but that would be an uphill battle. Investors who already were admitted as conditional residents would not be affected and would be able to file I-829 petitions to remove conditions.

[Update: see also Mr. Divine’s follow-up article “A swirl of EB-5 Developments”]

This tough reality needs to be disclosed and accounted for in today’s decisions, and motivate how hard we work to get authorizing legislation as soon as possible. I 100% agree with Mr. Divine that “Congress should at least provide that the regional center legislation in effect at the time an investor files Form I-526 will remain in place throughout those waits until the investor can remove conditions on permanent residence through adjudication of Form I-829.” It’s a pity that such a provision does not exist yet, and a shame when promoters pretend that it does. As Mr. Divine notes in his article “Given how much the EB-5 investments have benefitted regional economies all over the U.S., it seems unlikely that Congress will let the regional center program expire, but in the next renewal Congress should eliminate the nagging worry that investors must face when considering whether to invest in the program.”

The drama continues (reauthorization, regulations)

For a recent update on what’s happening with EB-5 legislation see “EB-5 Regional Center Program reauthorization: Will it happen this week?” (June 22, 2021) in Homeland Preparedness News. Senator Grassley has been still pushing to get a reauthorization bill to the finish line. People opposed to the Grassley bill would like to see that bill fail and a short-term extension – or least hope of a future short-term extension – instead. However, Senator Grassley says that he would rather see the program die than allow for such a short-term extension. The HPN article quotes Grassley staffer Taylor Foy: “Extending the program without the reforms ‘would be legislative malpractice,’ said Foy. ‘If they are not enacted by the end of the month, the program will die.’” Strong words, with little understanding or sympathy for the economic not to mention personal stakes involved. But disturbing, and I understand the frustration. The industry said “a short-term extension to give more time for legislation” in 2015, and again in 2016, and again in 2017, and again in 2018, and again in 2019, until 2020 when the removal of the regional center program from the appropriations process that had facilitated short-term extensions. The pattern of extensions since 2015 is clearly not sustainable. We are past time for stabilizing legislation.

The investor advocacy organization AIIA has published open letters to Senators Schumer, Grassley, and Leahy, calling on them to keep faith with past regional center program users. “With the reauthorization deadline looming and no sign of resolution of gridlock on this issue, AIIA would like to remind Congress about the importance of upholding the contract with existing immigrant investors.” 

Meanwhile, the 2019 regulations that increased the EB-5 investment amount and changed TEA definitions have been vacated in court. This sends the matter back to current DHS leadership, which may choose to reinstate the regulation with the $900,000/$1.8M investment amount (and likely will, since Director Mayorkas already confirmed that he supports the 2019 regulation) and/or to Congress to include investment amounts and TEAs in future legislation (thus making the legislative battle even more wide-ranging and contentious than it is already). I’m watching the USCIS website for an announcement. While waiting for these things to happen, there maybe a limited window to make a $500,000 investment – in the case of the regional centers, an investment in reliance on an immigrant investor program that may offer no chance to immigrate. Not the easiest marketing pitch. But if the court win on regulations does prove effective for marketing, that will be great for U.S. businesses that desperately need funding, especially where offering documents allow businesses to keep and use the money regardless of whether or not the investors are practically able to pursue the immigration process. (Regional centers may consider using escrow to help share the risk.) Making an investment/filing I-526 locks funds into a private business, but those actions do not lock in a chance to get a visa from the government based on that investment. (I have a post coming soon on what does get “locked in” at various stages in the EB-5 process.) So it’s complicated, and the need for authorizing legislation continues.

To quote Behring Companies, which brought the suit:

Today, the US District Court for the Northern District of California ruled in favor of Behring Regional Center, vacating the 2019 EB-5 Modernization Rule. The court agreed that DHS had no authority to implement the 2019 Rule due to the unlawful appointments of the Acting DHS Secretary and Acting USCIS Director who were appointed during the Trump administration without confirmation by the Senate. The Court vacated the Rule and remanded the matter to DHS and it may take steps to reinstate the Final EB-5 Rule pursuant to Administrative Procedure Act’s rule-making process. DHS may also file an appeal and seek to stay the order while the appeal is pending. The current sunset date for the EB-5 Regional Center Program is June 30, 2021. Congress is already discussing various legislative proposals for EB-5 reform. With Behring’s legal victory, we fully anticipate final bills will increase the required investment amount. Our efforts are focused on achieving a long-term extension and meaningful EB-5 reform for a better and more sustainable EB-5 Program.

UPDATE: I will copy relevant articles here as they are posted.

• “A swirl of EB-5 Developments” (June 25, 2021) by Robert Divine
• “The $500,000 EB-5 Ruling: Two Top Immigration Lawyers Answer Questions, Explain Investor Impact” EB5 Marketplace (June 23, 2021)
• “Political Consequences of Behring Decision” (June 23, 2021) ILW
• The Investment Migration Report held a very substantive discussion with IIUSA Executive Director Aaron Grau on June 23 regarding the implications of the Bering case and reathorization deadeline. Recording here on Youtube.

EB5 Investment Coalition has decided to speak with the public, and holding a webinar on June 24 at 9 am EST. This is a chance to hear from the faction opposed to Senator Grassley’s legislation to reauthorize the regional center program, and how they see their efforts creating hope rather than spelling disaster for the future.