EB-5 Reform: Missed Opportunity
March 20, 2018 31 Comments
It’s easy to blame big-moneyed New York City real estate interests, as Senator Grassley likes to call them. I had assumed their lobbying was to blame for the draft EB-5 Reform Act, which seemed designed to protect investment in prosperous areas and privilege well-heeled regional centers. But now Senator Grassley blames them for blocking the bill. He says “For the last year, my staff, along with Chairman Goodlatte, Senator Cornyn, and Senator Flake’s teams, has worked around the clock to produce an EB-5 reform package… But, these reforms weren’t acceptable to the big moneyed New York industry stakeholders who currently dominate the program. And because big money interests aren’t happy with these reforms, we’ve been told they won’t become law.” Could this really be what doomed the bill? The EB-5 Reform Act didn’t look like reform to many stakeholders, but apparently Senator Grassley and NYC both believed in its potency, enough to support it and block it respectively. I’ll respond more later to Senator Grassley’s speech, which shows his good faith and fundamental misunderstanding of several aspects of EB-5. Pro tip: don’t have your staffers work around the clock on legislation for a year before calling in organizations like IIUSA to give input and education to help keep the content on track with your laudable objectives. A broad base of people in EB-5 agree with you in wanting legislation that helps support the program’s good purpose with respect to investment in underserved areas and job creation. Include them in the process. (The benefits of such inclusion are already evident in the Revised EB-5 Reform Act of 2018 posted by IIUSA.) As Klasko Law puts it in their client alert: “The EB-5 industry was largely shut out of the process or brought in too late to be able to provide meaningful guidance and input. So it should come as no surprise that the proposed bill died the same way it began: in a secret, back-room agreement without the participation or input of the vast majority of the EB-5 industry.”
Excerpt from the IUSA Statement on Missed Opportunity for Long-Term EB-5 Authorization:
…In early March, IIUSA was pleased to join a group of industry organizations to review and discuss a bicameral compromise draft proposed by Senate and House Judiciary Committee Chairmen and key members of House and Senate leadership. After additional revisions were made to the compromise draft, IIUSA’s Board of Directors voted overwhelmingly to support the bicameral compromise that would have offered a six-year reauthorization and much-needed reforms.
Unfortunately, the compromise reform and reauthorization legislation failed to garner the support of all industry organizations and failed to be included in the omnibus appropriations legislation. We are extremely disappointed in this missed opportunity but are most appreciative of the House and Senate Judiciary Committee leaders and members of Leadership who worked tirelessly to delicately craft the compromise package. The omnibus legislation, however, does include an extension of the current EB5 Regional Center Program through September 30, 2018. We plan to continue to work diligently with Congress and our membership to build on the compromise draft legislation.
Other reactions:
- Grassley blames “moneyed” NYC developers for rejecting EB-5 reform (3/19/2018) The Real Deal
EB-5 Updates 
Curious why EB5 petitions take this long to process ? are there like 5-10 people processing these petitions. 2 years waiting time for non chinese filings seems a lot of time.
I have a couple posts on this topic:
thanks
Good morning, just for the records I am Italian and waited 3 years for my Visa… I think everyone has the ambition to start this very stressful process must be conscious that the processing time is around 2/3 year and if you are Chinese is more…. But finally is an awesome gratification.
3 years for just 526 or for 526 + 485?
UPDATE 1: I might, after all, put some money on a Final Rule on EB-5 regulations in April, with an effective date to delay implementation past September. (This bets against Congress’ ability to do anything with EB-5 by March 23, and on the assumption that the administration might still want the regs but amenable to influence on timing.)
Looks like your initial thoughts are correct.
Now what?
What is the probability that USCIS will bring change, and when might that be?
I don’t know…. Senator Grassley seems more concerned about integrity measures than TEA reform, and the regulations include no integrity measures, so I don’t know whether he’ll bother to push for them. The famous moneyed interests are very concerned about TEA reform, so no doubt they are bothering to push against the regs. The administration has so many other concerns. My expectation of change from USCIS will peak in April and diminish after that, I think.
Suzanne, is it correct to say that it is now absolutely certain that no change will occur in the EB-5 Legislation for now, and the only thing is the extension until September 30th maintaining the same rules? I’m asking because I’m ready to file my I-526, but a couple more weeks to gather more information and documents would be great…
I wouldn’t be absolutely sure. I assume, since Senator Grassley and IIUSA have already publicly admitted defeat, and other sources also tell me that the omnibus has the extension to 9/30/2018 and no other EB-5 changes. But change isn’t impossible. Ask the lawyer to advise, and good luck!
In summary, USCIS is ready, independently from any act of Congress, to raise the minimum investment amount to 1.8 million and 1.35 million for TEA, and this change in the investment amount could happen within the next month. I-526 applications would need to be filed prior to the enactment date to qualify for 1million / 500K minimum investment amounts.
There have been 2 separate reform tracks, one through legislation (act of Congress) and the other through internal USCIS regulations. Regarding regulations, you can read a summary of the proposed regulations, first published in January 2017, here: https://www.federalregister.gov/documents/2017/01/13/2017-00447/eb-5-immigrant-investor-program-modernization.
Those regulations propose to increase the minimum investment amount to 1.8 million, with Regional Center / TEA designated projects qualifying for a reduced minimum investment of 1.35 Million.
I won’t bother you with the more boring details; there are many other proposed changes that include integrity measures, Reg Center changes, TEA designation changes, etc..,
My understanding is that, as far as the increases in minimum investment amounts ONLY, those changes have cleared all the hurdles for enactment, and could be implemented as early as mid to late April. PLEASE READ UP ON THIS AND VERIFY INDEPENDENTLY
A Final Rule for the EB-5 regulations could be published any time, but changes would not be effective immediately. The effective date would almost certainly be a minimum of 30 days later, and more likely 60 days or so. (See https://www.federalregister.gov/uploads/2011/01/the_rulemaking_process.pdf)
Please confirm on your own, but my understanding is that, as concerns the increase in minimum investment amount ONLY, those were in fact published in mid-February, and so that is why I have been told by my team of attorneys that this aspect of the regulatory changes would be ready to implement by mid April (60 days after publication)
Can you share the RIN number that your attorneys mentioned for a minimum investment amount regulation published in Mid February? The only regulation I know of affecting minimum investment amounts is RIN 1615-AC07, and this was on schedule for final rule in mid February but was not in fact published then (as we can see by looking at the Federal Register, where it’s still listed as a Proposed Rule). https://www.federalregister.gov/documents/2017/01/13/2017-00447/eb-5-immigrant-investor-program-modernization
Suzanne — thanks so much! I will look into. It occurs to me that I may have gotten information about mid-February publication prior to mid-February… and that it never actually happened. PS: You’re the best!
I will confirm, but looks like I should remove this post if incorrect
I’ll be happy to remove it if you like, but also the exchange could help others naturally confused by the many moving parts.
Suzanne,
What are your comments on the recent processing time update? I-526 processing times moved to January 3rd 2016 as of January 31st 2018. Do you think this is good news or another let down a month from now when dates move back again?
Thank you!
I think the recent I-526 fall-backs were anomalies, and that this new report reflects IPO back on track to where one would expect them to be now. My I-526 spreadsheet predicts processing times based on volume of filings and processing volume, and this new report is consistent with the model predictions. The I-924 jump is so huge that I wouldn’t be surprised by some future let-down there. Though 63 new regional centers were approved this month, so might be genuine progress.
Thanks for your response. Unfortunately some regional centres even after receiving exemplar years ago have their investor’s petitions who filed in September through November 2015 still pending I-526 approval. Do you think this is the norm or these petitions might receive approval soon? I filed February 2016.
When a lot of old petitions are left behind, I start to worry that USCIS wants to make a retroactive rule-change and holding affected petitions while they figure out how to do it. This happened in 2011-2012 with “tenant occupancy,” and it could be happening now with bridge financing or another issue. I wish the industry would share Requests for Evidence so that we can more easily follow what USCIS is up to.
In response to Ani:
My Regional Center tells me that an exemplar approval does not make the I-526 move any faster for that project; it just means there won’t be project-related questions at the approval stage. On the other hand, I see many examples of exemplar projects moving pretty fast that I wonder if exemplar doesn’t make a difference to the speed of processing. I don’t know.
Agreed. I mentioned exemplar to address the fact that no RFEs have been received for the petitions filed between September and November 2015 and they’re still pending approval even after the processing dates show January 3rd 2016 on the USCIS website.
It would be interesting to see how EB-5 is impacted if the TEA amount goes up to above $1.5 Million USD. Does USCIS even have authority to raise the investment amount?
Yes, they do have authority, and have proposed an increases via regulations now in the Proposed Rule stage. https://www.federalregister.gov/documents/2017/01/13/2017-00447/eb-5-immigrant-investor-program-modernization
If the “big moneyed New York developers” didn’t let the increase to 925K go through, do you think they would let the increase to 1.35mil happen? 1.35mil will effectively choke off the program. What are your thoughts?
USCIS has updated their processing time website. It now shows an estimated 526 processing time of 25~32.5 months. It also has the “case inquiry date” of 7/25/2015. I guess that’s the date that they are absolutely sure that they have processed the cases through.
This is not good. This tells us that now everyone (Chinese and non Chinese) may have to wait 2 years 1 month to about 2 years and 8.5 months, almost 3 years now.
I-526 approval is getting longer and longer.
What is happening here ?
Atleast now USCIS should think of expediting EB5 petition adjudications for countries where the visa is current or allow them to file I-485’s immediately till they create more manpower in their visa units
I second what you said.
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so now that the senate passed the spending bill (http://thehill.com/homenews/senate/379883-senate-approves-13-trillion-spending-bill-sending-to-trump) does that mean EB5 will be extended as is through september 30, 2018 ?