Proposed New EB-5 Regs (priority dates, investment amounts, TEAs)

On January 13, the Federal Register is publishing a Notice of Proposed Rule-making titled EB-5 Investor Program Modernization (DHS Docket No. USCIS 2016-0006). The notice proposes and explains the rationale behind new EB-5 regulations on priority dates, investment amounts, and targeted employment areas, among other changes. The Notice gives a comment period ending on April 11, 2017, and the regulation amendments could go live at any time after that point – though I assume not very soon thereafter, since the notice solicits and will presumably receive extensive public comment, may require another draft before the final, and will need to be greenlighted by the new administration.

Summary of Proposed Regulation Amendments in DHS Docket No. USCIS-2016-0006

  1. Priority Dates: Allow an EB-5 petitioner to use the priority date of an approved EB-5 petition for any subsequently-filed petition. (In other words, an investor with an approved I-526 in one project could choose to file a new I-526 in a different project while keeping the original priority date. This would benefit investors whose project or regional center has trouble after petition approval, but before the investor receives a visa number. The regulations do not restrict investor reasons for choosing to file a new petition.)
  2. Investment Amounts: Increase the standard minimum investment amount to account for inflation, reduce the differential between standard and TEA investment amounts, and implement automatic increases every five years based on inflation (rounded to the nearest 100,000).  Based on CPI increases since investment amounts were set in 1990, this means that the standard minimum investment would become $1,800,000 in 2017. The TEA amount, set at 75% of the standard, would be $1,350,000 in 2017. The investor would be required to contribute the minimum investment amount that is designated at the time the petition is filed.
  3. Targeted Employment Areas: Eliminate state designation of TEAs, and have DHS determine TEA qualification by applying its own uniform standards to evidence presented by investors and regional centers. For high-unemployment TEAs, DHS would only designate an MSA, county, city, or project tracts. (A project tract TEA is the census tract where the project is located, or a group comprising any or all census tracts that touch the tract where the project is located — but not a group including any indirectly connected census tracts). The regulations do not specify which unemployment data DHS would use or accept. (This document compares TEA regulations in the proposed regulations to current policy and legislative proposals.)
  4. Other technical changes: define a process by which derivatives may file Form I-829 if not included on the principal’s position; provide greater flexibility in selecting the I-829 interview location; remove the requirement that investors report to a district office in order to receive a permanent resident card; miscellaneous other changes (including clarifying that an investor can be sufficiently engaged in an NCE merely by virtue of being an equity holder, without requiring a management or other active role).

The notice goes into extensive detail about USCIS’s thinking and research behind the proposed changes (which is interesting in itself, even apart from context), and invites stakeholders to respond with equally substantial data and analysis. I look forward to IIUSA or others stepping up to help organize a serious stakeholder response. We need to do better than hundreds of individual stakeholders mailing to basically just say “this would hurt” and “we don’t like change.” (Update: Comments can be reviewed at this link.)

The regulators at USCIS and legislators in Congress share similar goals — to modernize the EB-5 program and change certain aspects of the program in need of reform — but so far the draft legislation and proposed regulations suggest quite different changes. I wonder whether Congressional staffers will be influenced by these Notices of Proposed Rule-Making as they continue to refine legislation. (Update: The House Judiciary Committee held a hearing on March 8 to discuss the proposed regulations.) I note that the draft regulations frequently reference Congressional intent as expressed around 1990, but not current discussions in Congress.

About Suzanne (www.lucidtext.com)
Lucid Professional Writing provides writing and editing services for businesses and scholars, and specializes in assisting clients to prepare business plans for filing with U.S. Citizenship and Immigration Services.

2 Responses to Proposed New EB-5 Regs (priority dates, investment amounts, TEAs)

  1. Chris T. Mueller says:

    Thanks Susan for your post (and all the ones before, your site is my sole reliable and current source for EB5 news). I have been following EB5 since 2014 as we plan to use it to retire in the US (target date 2021), but the USCIS proposal for TEA investment would put that out of reach for us. I wonder what they were thinking – this would reduce the number (and composition) of interested EB5 investors even further, possibly bringing the program close to what it was before 2007 – and that is not what I would consider creating jobs in the USA.

    Looking from an investor’s perspective (which should matter more, since EB5 is primarily an immigration incentive and only secondarily a job creation tool, or am I wrong?) it would matter more how much foreign exchange it took in 1990 (in his local currency) to buy the USD needed for the USD 500k investment, and figure in the CPI change in his place of residence and the current exchange rate. This would make it more or much more expensive than what it was in 1990 for the average potential investor (The USD trade-weighted index as a reference of exchange rates is now slightly higher than in 1990, and inflation in the US was generally lower or much lower than in much of the rest of the world).

    I know Congress is in the driver seat on this one, and the new administration can (and should) tell USCIS to wait and see what the legislative branch will come up with – I just don’t have much faith in Congress actually getting it together (again) – every year the same roller coaster ride for me 🙂

    Looking at it at another way – there are 10’000 visa’s for sale, and maybe USCIS follows Adam Smith thinking and wants to find out the maximum market price at which to sell them all. But then something is really wrong in the US governmental system….

    • Thank you for this excellent comment. I encourage you to send it to IIUSA at advocacy@iiusa.org to support their response to the regulations. I am actively looking for venues for organizing stakeholder feedback, and will contact you if I see one that would help magnify your voice with other prospective investors (though filing an individual opinion with USCIS is also an option).

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