Regulations update (Fall 2018)

The Fall 2018 OMB Unified Agenda has been published with updated timetables for two EB-5 regulations in progress, and notice of a third EB-5 regulation to come.

  • RIN1615-AC07 EB-5 Immigrant Investor Program Modernization, with proposed changes to TEAs and the minimum investment amount:
    • Timetable for Final Rule updated to November 2018 (The Spring 2018 agenda had anticipated August 2018)
  • RIN 1615-AC11  Regional Center Program Regulation, with proposed changes to regional center designation requirements and process:
    • Timetable for Notice of Proposed Rulemaking is still March 2019 (same as in the Spring 2018 agenda)
  • RIN 1615-AC26 EB-5 Immigrant Investor Program Realignment, which “will solicit public input on proposals that would increase monitoring and oversight, encourage investment in rural areas, redefine components of the job creation requirement, and define conditions for regional center designations and operations”
    • Timetable for Advance Notice of Proposed Rulemaking announced for September 2019

We’re most concerned about RIN 1615-AC07, since that’s the one at the Final Rule stage. If it does actually become a Final Rule next month, then it could potentially take effect before the end of the year. (I understand that the effective date for a Final Rule is usually at least 30 days after its finalized.) We won’t know the content of the Final Rule until it’s published, but here, as a reminder, is a summary of what the draft rule NPRM proposed:

  • Increase the standard minimum EB-5 investment amount to $1,800,000, or $1,350,000 in a TEA.
  • A TEA is based on high unemployment and incentivized with 25% reduction to the investment amount (not other factors or incentives as proposed by Congress).
  • A TEA can only be designated for a high-unemployment MSA, county, city, single census tract, or limited group of census tracts. DHS, not the states, is responsible for TEA designation.
  • Give priority date protection (an investor with an approved I-526 could choose to file a new I-526 while keeping the original priority date, subject to certain restrictions)
  • Spouse and children may be able to file I-829 even if not included on the principal investor’s petition.
  • Other technical changes.

When DHS opened the draft for comment in 2017, the industry told DHS how disastrous some of the proposals could be as written. We’ll see whether DHS listened and revised the draft. (My May 2017 post New EB-5 Regulations: Comments Discussion reviews the industry response.)

It remains to be seen whether the Fall 2018 Unified Agenda action dates will be more reliable than previous deadlines. I believe that RIN 1615-AC07 is still at at Step 7 in the Rulemaking Process, since I haven’t yet seen it listed by the OMB as a Regulatory Action Currently Under Review for Department of Homeland Security. But we may really see action this time, after DHS missed the previously-predicted deadlines of February 2018 and August 2018. USCIS Director L. Francis Cissna testified at the June 2018 Senate Judiciary Committee hearing on EB-5 regarding the regulations that “USCIS is currently reviewing the comments and moving forward in the regulatory process with both of these items as expeditiously as possible.” (UPDATE: Mr. Cissna told IIUSA on October 5, 2018 that “the proposed rule that has yet to go final, it is going to go final. We’re just not ready yet. We’re still working on it” and “The reg., it might take a while yet before it gets finally published.”)

As for the third new regulation, with an Advance Notice foreseen for a year from now, I don’t know whether to laugh or cry. The vague and sweeping precis and long lead time makes me suspect that DHS itself does not know yet what will go into this regulation. To the extent that its promised content overlaps with the content of the two regulations already on the table, it seems to question and undermine those regs. (AC07 already proposes to modify TEAs and AC11 is already about conditions for regional center designation. Why would AC26 propose to cover the same areas, unless judging those other regs faulty? We agree that those regs are faulty, at least in draft form, but then why are they still going forward, with vague promise of future correction? Is this about conflict among current/former policy staff at IPO and Office of Policy and Strategy?) AC26 apparently takes for granted that Congress will never act on EB-5, as it covers policy changes previously expected Congress. It also takes for granted that EB-5 will be a robust market to oversee into 2019 and beyond.

About Suzanne (www.lucidtext.com)
Suzanne Lazicki is a business plan writer, EB-5 expert, and founder of Lucid Professional Writing.

42 Responses to Regulations update (Fall 2018)

  1. SJ says:

    Do approved 526 have reason to be concerned by any upcoming changes in your opinion?

    • For approved I-526 this will be individually beneficial thanks to the priority date protection. Other provisions will mainly affect new demand going forward. That could affect the person with the approved I-526 to the extent that he/she depends on his/her regional center remaining active or project’s ability to attract additional investors.

      • Kishore says:

        how does it help ? USCIS want’s them to file a new i-526 and wait another 10-12 years for approval cause they can retain the date. I dont see how its beneficial other than for retrogressed dates.

  2. jkon says:

    How I-526 applicant will be affected?

  3. Marco Shayeb says:

    Will I-526 pending adjudication be affected by the investment amount and TEA changes?
    I guess you already answered this question, but I just want to make sure I understood correctly.

    • TEA designation and required investment amount are eligibility issues that need to be determined as of the time of filing, so rule changes by DHS on these issues would only apply to petitions filed after the rule takes affect. But people with pending petitions can still feel ripple affects. If I invested last year in a project that hasn’t yet secured all the EB-5 capital it needs, then the rule changes could affect me by affecting future investors in the offering.

      • Kishore says:

        I think i get what Suzanne is saying, RC would not able to meet either the financial goals or the job creation required for the project if they did not raise the capital and that would lead to inability to show job creation for all the investors.. Is that correct ?

      • Marco Shayeb says:

        Thank you Suzanne!
        Fortunately I made a direct investment and I don’t depend on other investors.

  4. Harry says:

    Hi Suzanne,

    First of all I am big fan of your blogs specially the analysts and it is in must read every week. Thanks for all the efforts!! You might have answered this but i am applicant whose I-526 is still pending ( Filled Aug 2018, India).

    Please advice what would be the effect of these on pending application as this process is multiple steps..!! Since we haven’t filled any of the later stage documents ( removing condition etc..) would this affect us in anyway..!!

    Once again thanks for your time..!!

  5. See my comments above. The priority date protection and I-829 process changes proposed by the regulations would affect people with pending I-526.

  6. Terrance P. Kelley says:

    If the Final Rule date is November, and we only have two weeks to go until November hits, it would seem unlikely they would miss their own schedule and not move forward with the amendments in the next 45 days. Do you agree? Also, is it possible we would receive advance information about which amendments will be made…especially in the area of minimum investment levels?

  7. Chandra Ojha says:

    I am sorry guys, if I am not understanding it correctly. Please help me and apologies for lack of my understanding. Will the new investment limit also apply to I 526 applicants with priority date or only to the new applicants ? I don’t think a lot of applicants I know of will be able to afford a tag of 1.3 million. I barely managed with secured loans. Appreciate your input and help with this very worrisome situation. My EB5 lawyer is not yet sure.

    • Only new petitioners.
      Here is what the draft rule (in the first column on PDF page 29) says relative to effective date:
      (1) General. Unless otherwise specified, for EB–5 immigrant petitions filed on or after [INSERT EFFECTIVE DATE OF FINAL RULE], the amount of capital necessary to make a qualifying investment in the United States is one million eight hundred thousand United States dollars ($1,800,000).
      …(2) Targeted employment area. Unless otherwise specified, for EB–5 immigrant petitions filed on or after [INSERT EFFECTIVE DATE OF FINAL RULE], the amount of capital necessary to make a qualifying investment in a targeted employment area in the United States is one million three hundred and fifty thousand United States dollars ($1,350,000).
      https://www.gpo.gov/fdsys/pkg/FR-2017-01-13/pdf/2017-00447.pdf

      • Kishore says:

        Would the current RCs in TEA lose their status if TEA is no longer a TEA. For example areas like San Francisco , New York should never have been granted TEA status but as of now several RCs run eb5 in these areas as TEA? If RCs loose their status does the underlying petitions also get denied ?

        • No, because per USCIS Policy TEA status has never been something conferred on Regional Centers. It’s a qualification determined for individual investments as of the time of investment or I-526 filing. The policy says that once TEA determination is made for an individual petitioner, the determination for that petitioner doesn’t get revisited later if conditions subsequently change (i.e.if the unemployment rate falls). A project, however, can find that it is or is not able to offer TEA designation as conditions change over time. Any projects in midst of raising capital when the TEA rules or unemployment rate changes just ends up with a mix of TEA and non-TEA investors.
          https://www.uscis.gov/policymanual/HTML/PolicyManual-Volume6-PartG-Chapter2.html#S-A

      • Chandra Ojha says:

        Thank you so very much Suzanne for the clarification.

  8. Luke says:

    Hi Suzanne,

    Like others have said this is a great blog and it’s a really good resource, thank you!!

    I’m sure things are very unsettled with the midterms looming, but I was wondering if there is any news about the proposed Yoder amendment removing country caps included in the house DHS ’19 spending bill?

    This seems to be the greatest threat to the EB5 program as whilst the investment hike to $1.35-1.5M is unhelpful it would bring this program in-line with other international investment visas. What is unfathomable is asking all applicants to wait 7-9 years for the visa (i’m very sorry to applicants from the PRC or India who are in this situation now).

    • Chandra Ojha says:

      I think HR 392 did not get traction. My EB5 lawyer said that the bill is dead for practical purposes. Situation is very dire for PRC and Indian citizens. Thanks for your kind thoughts.

    • I have not heard recent news, and don’t expect to hear anything until mid November at earliest when Congress comes back in session and can take up the DHS spending bill. So far, the people I’ve heard expressing an opinion have all opined that the Yoder amendment is very unlikely to be included the final bill. The one indication I’ve noted in the amendement’s favor is that Yoder’s proposed bill with similar content, H.R.392, won a lot of cosponsors. But as Chandra Ojha points out, no activity on that bill either.
      If anyone else has insights, please speak up!

      • kishore says:

        I hope that Yoder amendment never passes. That would be a disaster. Chinese will take up the quota for the next 3 decades

      • Chandra Ojha says:

        As always, thank you so much Suzanne for helping so many of us with the excellent analysis and updated information.

  9. Sentap says:

    HI Suzanne, Thank you for this valuable service. I am going to apply for I-526 now. I know that it will not be approved by December 7th cut off date. Where do I stand? What happens if the project doesn’ get all the EB-5 investors for the program and/or lose the TEA designation after I invest and before conditional approval?

    • This question would not be answered by EB-5 policy, but as a matter of business judgment. How feasible do you judge your project will remain if it becomes more difficult in the future to raise additional EB-5 investment? That depends on the project/size of the raise. In one sense the regulation change would make things easier, since the project would need to locate fewer investors to raise the same amount of money, and have to divide jobs among fewer investors. On the other hand, it will be harder to locate future investors able and willing to invest at the higher threshold.

      The December 7 date is not related to this TEA issue — that’s the deadline to reauthorize the regional center program. If the regional center program were terminated by December 7, then all regional center investors would be affected, even conditional permanent residents. I very much doubt the regional center program will be terminated, however.

      • Sentap says:

        You said, “The December 7 date is not related to this TEA issue — that’s the deadline to reauthorize the regional center program”

        Is raising the investor level from $500,000 to $1300000 or higher is part of the reauthorization process? (on the 7/12)

        Thank you

        • kishore says:

          If USCIS passes final rule of RIN1615-AC07 the minimum investment of 500k will no longer be valid

        • tpk129 says:

          The reauthorization process was used to extend the program. It was extended to December 7th, because Regional Centers were set to lapse completely on September 30th. Congress simply added an amendment extending it to December as part of the spending bill they had to pass. No other changes were proposed as part of the process.

          Reauthorization doesn’t change the law or regulations, merely keeps the program alive until the USCIS adopts (this is what was announced on October 17th) some reforms that Congress doesn’t want to address. Congress is inept and seldom can pass any law, or changes to laws, that may be political in nature.

  10. Dan says:

    Something never discussed but also a consideration is the severe delays in the I829 process. They state 39 months, but that is just until they pick up your case. I’m hearing multiple people waiting 5 years and no news.

  11. Dan says:

    Yes, I have done all the stages and am stuck in the I829 stage backlog. The one stage you don’t want to get stuck in 🙂

    • kishore says:

      Yeah in what world is 3.5 years processing time legal ? some one needs to file a lawsuit why the interns at usics are adjudicating 829 apps 🙂

  12. Dan says:

    I am just unsure why it takes so long when that part is almost entirely about the regional center so much less work than individual I526’s i would have thought. I think the delay has been done to ensure projects have been built and employing etc…who knows!?

    • Kishore says:

      but the reality is 829 is dependent on jobs being created from the time i-526 is filed + 2 years. Anything beyond the 2years+ 6 months( room for leeway) cannot be used towards the 10 jobs required for eb5 petition. Its highly unethical for uscis to take 3-5 years. Some one needs to bring this up. The adjudication record is dismal

  13. kishore says:

    i have created a tracker. please add your info http://eb5tracker.wixsite.com/eb5tracker

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