RC Reauthorization Status, New RCs

Reauthorization Status
The current authorization of the Regional Center program is set to expire after September 30, 2015, and timely reauthorization is looking doubtful what with our representatives being on vacation much of the time between now and then, and with none of the proposed/pending legislation looking advisable to pass without discussion and revision. What will happen on October 1 if Congress hasn’t acted in time? We also asked this question in 2012, last time the program was up for reauthorization, and got vague answers from USCIS (“This as a question that will just have to be addressed when and if it occurs, and the Service does not have a response at this time” was the message at the 1/23/2012 EB-5 stakeholder meeting. The 5/1/2012 EB-5 stakeholder meeting executive summary stated that all existing regional center designations would expire automatically and that USCIS would not approve new Regional Center designations, but did not comment on what would happen with Regional Center-associated investor petitions.). We’ll see what USCIS has to say in next week’s engagement (8/13/2015). In the meantime, advocacy groups (IIUSA, EB5 Coalition) are still pressing for timely action, and we may after all get a bill passed at around 11:58 pm on the 30th, as has happened before. Here are the proposals on the horizon, so far as I know.

• • S.1501 – American Job Creation and Investment Promotion Reform Act of 2015. Sponsored by Senator Leahy (D-VT) and Senator Grassley (R-IA). Introduced in the Senate on June 3, 2015, referred to committee, and much analyzed and largely panned since then by the EB-5 community. The bill’s good aspects – that it extends (by five years) and seeks to improve the Regional Center program and is sponsored by important people – seem outweighed by its problems – that its provisions would drastically redirect and severely curtail the scope of the RC program (discouraging large raises, large projects and urban development in favor of small EB-5-dominated projects in rural areas), and that it brands the RC program as a hotbed of corruption and proposes ham-fisted measures that wouldn’t necessarily forestall bad actors, who can be glibber than most in attesting virtue, but would place an unwieldly regulatory burden and risk on people actually trying to do things right. IIUSA reports that they continue to have close discussions with the bill’s drafters – and other relevant Senate offices – as alternative language is considered by the sponsoring offices.
  • H.R.3370 – To amend the Immigration and Nationality Act to promote innovation, investment, and research in the United States, and for other purposes. Sponsored by Representatives Zoe Lofgren (D-CA) and Luis Gutierrez (D-IL). Introduced in the House on July 29, 2015, and referred to committee. I think this is a pretty good bill (aside from being nearly unreadable in bill form – read Rep. Lofgren’s section summary first before you try the legislation itself or you’ll get confused). The bill proposes a couple new EB visa categories in Title I (I don’t see the proposed EB-6 category being used much, as VC risk/unpredictability and immigration aren’t a great mix, but in any case it wouldn’t take visas away from or otherwise affect the EB-5 program) and discusses the EB-5 Regional Center program in Title II (starting on p. 17). The bill would permanently authorize the RC program, double the qualifying EB-5 investment amount (which is a leap, but not unreasonable considering investor visa thresholds in other countries), open the possibility of doubling the annual EB-5 visa allocation, and make other changes that I think would generally improve the footing of the EB-5 program. The proposals regarding TEAs and job creation (p. 38-41) strike me as particularly well-considered and reasonable. The concurrent filing and premium processing provisions would be very popular (though with a fee of only $5000, I believe that 100% of EB-5 petitioners would go for premium processing, making the service impossible to deliver in practice). The proposals for improved program integrity in this bill look serious but largely reasonable and justifiable rather than punitive and alarmist, as in S.1501. I’m just concerned that this bill, like S.1501, charges USCIS to regulate – and holds RCs responsible for keeping in line – a constellation of people who we’d all like to see controlled but who are not necessarily amenable to control by either RCs or USCIS. USCIS is supposed to work with the FBI to conduct background checks of and Regional Centers may be heavily sanctioned based on the behavior of anyone who can be considered “involved” with a regional center or an associated commercial enterprise (i.e. “if he or she is the principal, representative, administrator, owner, officer, board member, manager, executive, general partner, fiduciary, marketer, promoter, director, or other similar position of substantial authority for the operations, management, or promotion of the regional center or associated commercial enterprise, respectively”). In practice, does this mean that FBI agents have to show up at the offices of licensed migration agents in China who happen to be sourcing investors for Regional Centers and say okay hands out everybody, we’re taking fingerprints? How will the Chinese government feel about the US coming in to lay down the law in a domain that it is concerned to regulate itself and to protect from foreign influence? Considering that most EB-5 offers are made entirely abroad, and often by independent third parties who owe first allegiance to their own local regulations, how would Regional Centers handle the requirement “to monitor and supervise all offers and sales of securities which are made by associated commercial enterprises to ensure compliance with the securities laws of the United States, and to maintain records, data, and information relating to all such offers and sales of securities”? Certainly the selling and investor recruitment process is a major challenge, complication and source of confusion and vulnerability for the EB-5 program and for Regional Centers and deserves to be addressed, but easier said than done.
  • H.R. 616 American Entrepreneurship and Investment Act of 2015. Sponsored by Representative Polis (D-CO) and Amodi (R-NV), and now with 22 co-sponsors. Introduced in the House January 28, 2015, referred to committee March 17, 2015. This bill proposes permanently authorizing the Regional Center program without overhauling it, and briefly suggests a few modest and generally-welcome clarifications and improvements. I don’t know why this bill hasn’t gained more traction – possibly because the general mood seems to be that the program needs some significant changes if it’s to be made permanent.
  • Rumor has it that Judiciary Committee Chairman Bob Goodlatte (R-VA) and Representative Darrel Issa (R-CA) plan to introduce legislation in early September that will be similar to their SKILLS Act (HR2131) proposal from last year, with some additions. As originally written, this bill proposed new EB-6 and EB-7 categories (defined differently from Lofgren’s), tweaked a bunch of visa categories, and had one line about the Regional Center program, proposing to make it permanent. The new version will reportedly include some additional EB-5 program changes, but less drastic than those in S.1501.

Carolyn Lee has assembled a handy bill comparison chart. See also Pat Hogan’s letter on the mood in Washington as of Sept. 2015.

New Regional Centers
Additions to the USCIS Regional Center List, 6/23/2015 to 8/3/2015

• American Coast Regional Center (California)
• EB-5 Impact Capital Regional Center, LLC (California and Nevada)
• EB5 International, LLC (California): www.eb5international.com
• EB5 Affiliate Network Washington, D.C. Regional Center, LLC (District of Columbia, Maryland, Virginia, West Virginia): eb5affiliatenetwork.com
• Maryland Global Regional Center, LLC (District of Columbia, Maryland, Virginia, West Virginia): www.cgrc.info
• Civitas Northern Florida Regional Center (Florida): www.civitascapital.com
• EB5 Financing Management Company, LLC (Florida)
• Civitas Illinois Regional Center (Illinois): www.civitascapital.com
• EB5 Affiliate Network State of Hawaii Regional Center, LLC (Hawaii): eb5affiliatenetwork.com
• Massachusetts Wealth and Happiness Regional Center, Inc. (Massachusetts)
• EB5 Affiliate Network State of North Carolina Regional Center, LLC (North Carolina): eb5affiliatenetwork.com
• Ocean Pacific Regional Center, LLC (Oregon)
• Harmonia Regional Center, LLC (Texas): harmoniaeb5.com
• Name Change: Gotham City Regional Center, LLC changed to Silverstein Properties Regional Center LLC (Connecticut, New Jersey, New York, Pennsylvania): silversteinrc.com

USCIS Website
I also note that USCIS has done a little revamp of the EB-5 section of its website, separating what used to be the main page into two pages, one about the EB-5 program and one about the EB-5 visa but still mysteriously (pointedly?) omitting the informational page that used to be there about the Regional Center program. They do slap a nice big forbidden icon on the link to the list of terminated Regional Centers, a list already with plenty of indignity for the subset of centers that landed there not by fault but by choosing not to continue with the program.