EB-5 Modernization Regulation Advances
February 23, 2019 8 Comments
The Office of Management and Budget List of Regulatory Actions Currently Under Review shows that the EB-5 Modernization Regulation advanced on Friday to the OMB Review stage.
OMB Review is the last step in the rulemaking process before publication of a final rule.
How long does OMB review take? It usually takes many months, as evidenced by other DHS regulations currently listed on the OMB site with receipt dates as early as June 2018, and still with “Pending Review status.” Or it occasionally happens in as little as a month, I’ve noted in my time tracking the OMB site.
After OMB review, the Final Rule will be published in the Federal Register. How long after publication will the final rule become effective? Here’s the answer according to The Federal Register’s Guide to the Rulemaking Process: “When an agency publishes a final rule, generally the rule is effective no less than thirty days after the date of publication in the Federal Register. If the agency wants to make the rule effective sooner, it must cite “good cause” (persuasive reasons) as to why this is in the public interest. Significant rules (defined by Executive Order 12866) and major rules (defined by the Small Business Regulatory Enforcement Fairness Act) are required to have a 60 day delayed effective date.”
And the most burning question of all — what will be in the Final Rule? We know what was in the Notice of Proposed Rulemaking for RIN: 1615-AC07, but that was published in January 2017, and DHS has spent almost two years since making some kind of changes. It’s unfortunately plausible that DHS just spent two years writing out why they’re not accepting any suggestions in public comments, but I’d like to think that they made some significant adjustments in response to public concerns and insights. I hope to see a different minimum investment amount in the final rule, considering that nearly every single commenter informed DHS that the NPRM proposal would be fatal. But for what it’s worth, here’s a summary of provisions in the NPRM from 2017:
- 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.
EB-5 Updates 
I thought the EB-5 regs would be delayed until the prohibition of employment by spouses of H-1B visa holders was in place. The administration had placed a high priority on punishing the H-1B holders for some reason. This will drive many of these workers back to their home countries as they need the additional income from the spouse to survive here.
One could argue the new minimum investment levels for EB-5 applicants will be adjusted as proposed. The new levels are just keeping up with inflation and are still competitive with other countries.
The biggest issue and doesn’t receive much attention and is the USCIS taking control of TEA designations. Classifying Manhattan and Palm Beach as high unemployment areas by local officials is a joke. Once projects lose out the lower investment requirements of TEA’s, investors will be hard to find. Assuming no change to the investment levels, there are few people with $1 million who would give it to a developer for a green card and no return. The abuse has been rampant and Regional Centers will be significantly marginalized.
HI, What would be the impact of this on pending I-526 application? I understand that rule cannot be retroactive applied but we have long way to go after 526 approval and any change in next steps ( which we haven’t filled for) can hurt/help the case. Please advice.
The priority date protections and I-829 changes proposed should help you. I think the investment amount and TEA changes could only hurt you by harming your investment project, if the project depended on continuing to solicit investors under the new rules.
Hi
Amazing work being done by you for EB5 investors! Will the changes ( investment amount and RC status etc) affect me if I have i526 application pending adjucation ( applied in Jan 2019)..will I be required to increase my investment amount when my application comes up for scrutiny ( 20-28 months from now)? Worried about all the efforts being worth nothing due to these proposed changes!
Don’t worry. The investment amount and TEA changes in the regulations would apply to I-526 filed after the effective date, not retroactively to you.
Sorry, but the I-526 must be filed or aproved after the effective date? I will fill the I-526 in the next month. Thank you.
Filed
Hello, I would like to have notifications.