Regulations Update (Spring 2019)
May 22, 2019 21 Comments
The Spring 2019 OMB Unified Agenda has been published with updated timetables for three EB-5 regulations in progress.
- RIN1615-AC07 EB-5 Immigrant Investor Program Modernization, with proposed changes to TEAs and the minimum investment amount:
- Timetable for Final Rule is May 2019 (The Fall 2018 agenda had anticipated November 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 March 2020 (The Fall 2018 agenda had anticipated March 2019)
- 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 is March 2020. (The Fall 2018 agenda had anticipated September 2019)
RIN1615-AC07 is still listed as Pending Review by the OMB before it can become a final rule. Meanwhile, a number of parties have requested to meet with OMB regarding the regs (View EO 12866 Meetings).
- 5/30/2019 meeting requested by Carmen Group Inc representing United States Immigration Fund LLC
- 5/7/2019 meeting requested by EB-5 Investment Coalition representing Related Companies and other regional centers
- 3/25/2019 meeting requested by Real Estate Roundtable; Commonwealth Strategic Partners representing IIUSA; HLP+R representing EB5 Capital; US Chamber of Commerce; Klein/Johnson Group representing Civitas Capital Group
- 3/20/2019 meeting requested by Navigators Global representing Related Companies
- 3/6/2019 meeting requested by American Life
The regional centers named have historically undertaken large EB-5 raises for projects in major cities, most remarkably Related with $1.2 billion in EB-5 raised for the Manhattan Hudson Yards project. They naturally oppose a regulation that would dramatically cut EB-5 demand with higher investment amounts and that would make urban TEAs more scarce. (To know the messages likely conveyed at the OMB meetings, see comments on the regulations submitted by Related, EB-5 Investment Coalition, U.S. Chamber of Commerce, Civitas, EB5 Capital, American Life, and IIUSA). Apparently anyone can request a EO 12866 meeting, so any interests that have another perspective can take the chance to provide additional input. But the EB-5 Modernization Regulation, at least as written in 2017, managed to threaten such a variety of interests that I’m not sure anyone exists to advocate for it to be finalized. Except people like Senator Grassley who want reform but apparently unclear about what’s actually in the regulation.
EB-5 Updates 
Would an investor or his/her representative have the right to meet OMB for the regs?
The total that I know about requesting a meeting is the Q&A at this link https://www.reginfo.gov/public/jsp/Utilities/faq.myjsp
Q. Does OIRA talk to or meet with particular interest groups during review of its rules?
A. OIRA’s policy is to meet with any party interested in discussing issues on a rule under review, whether they are from State or local governments, small business or other business interests, or from the environmental, health, or safety communities. Under OIRA procedures, as set forth in Executive Order 12866, meetings on regulatory actions must be conducted by the OIRA Administrator or a specific designee. A log, available on Reginfo.gov, is kept of such meetings. Groups and individuals interested in meeting with OIRA regarding a rule under review should call 202-395-5897. Please provide the name of the regulatory action you or your group would like to discuss.
Q. What is the best way to request a meeting with OIRA about a regulatory action under OIRA review?
A. To request a meeting regarding a rule under OIRA review, please submit your request here
TYVM!
Boyd
Sent from my iPhone
Suzanne, thanks for another great update! AVS just filed a meeting request with OMB. They’re going to get an earful from the folks who say Central Park is in an impoverished part of town…let’s hope they want to hear from those of us exclusively offering EB-5 in bona fide rural and poor areas, as Congress always intended.
If I may ask, what’s your position on the specific TEA proposal in the EB5 Modernization reg? Do you think the definitions and incentives described there make sense, or would you advocate for something different?
Suzanne, just back in the U.S., American Venture Solutions Regional Center was granted a meeting with OMB in early July and I look forward to sharing our perspective as an EB-5 Regional Center which has a sterling record of success in job creation in bona fide high-unemployment, TRUE TEAs. I was serving as a U.S. visa officer when the EB-5 visa was created via IMMACT90 and I am crystal clear on what Congress intended and how that vision – to stimulate America’s poorest communities via EB-5 foreign direct investment – has been absolutely perverted by the industry.
When the concept of incentivizing TEA investments was made law, it was simple: projects in truly needy areas required a $500k investment threshold, everything else required $1 million. The reform we need doesn’t require set-asides for poor/urban/rural areas, that’s a total scam manufactured by the Big EB-5 lobby, which fully knows that there will never be enough true TEA projects to use up the token quotas. What we need to reform EB-5 are 3 very simple things:
1- Reaffirm that bona fide TEA/rural projects require an investment threshold equal to 50% of whatever the “regular” EB-5 investment is (whether it’s the current $1M or a new, higher figure.)
2- Terminate the shameless gerrymandering of census tracts once and for all and
3- Prosecute aggressively the illegal kickbacks paid by EB-5 projects/RCs to foreign “finders”. The SEC has prosecuted both Regional Centers and U.S. attorneys to affirm that such a fee can ONLY be paid to a licensed securities broker/dealer but virtually 100% of the industry continues the practice.
The day an investor can choose between a $500,000 EB-5 in a needy part of America via a proven TEA Regional Center or a $1M investment in Manhattan will be the day the playing field is leveled…AND the day EB-5 becomes what it was always intended to be: a powerful tool for directing FDI to where America needs it the most. EB-5 was never meant to be cheap capital for rich developers.
They sent letter to congress. They met OMB. They want no change.
Been at this stage for quite sometime. Guess Mick Mulvaney has more important things to do!
Have you seen the processing time estimation update for I-526? It’s now 29 to 45 months. With the case inquiry date in Sep 2015!
What is going on? Have they stopped processing cases altogether?
Actually, on the second thought that might very well be the case. Since they are using the data from 2 months ago, the statistical period would be right in the middle of the government shutdown, with the concomitant decrease in the rate of I-526 processing.
So I guess that their calculation is just temporarily skewed.
Goodness gracious. I agree that this report likely reflects something going on with the calculation/method of reporting. Surely reality couldn’t have changed so drastically all of a sudden. (Although personal reports suggest a slowdown has indeed occurred, and I wonder what’s going when IPO isn’t even terminating regional centers. Are they shelving cases while they brew a policy change, maybe?) I note that the current processing report significantly cuts the low end estimate for I-829 forms, whatever that might mean.
they should make it 20 years. i mean the whole processing time has become one big joke. Meanwhile Rc’s are asking for reform so they can lock in more investors for a lifetime free capital with zero percent interest rates. lmao
is it possible that USCIS is going to pass the RIN 1615-AC07 finally at the end of month ( may 2019) and terminate the current TEAs. this means a lot of Regional centers would loose TEA designation and will automatically lead to pending i-526 denial for all of their investors ? Investors could possibly retain priority date due to 1615-AC07. Just think long ? there must be reason to move i-526 processing time back by 2 years
The new limits would apply to new petitions only, so pending I-526 are not directly affected. I also seem to remember that the TEA designation is important only when the petition is filed.
Yes that is very odd that the i829 minimum dropped to just over 2 years.
They might have switched personnel from I-526 to I-829 processing, so the rate increased and the expected time decreased correspondingly.
I’m hearing from other sources that this indeed is what occurred.
shutdown ended in Jan 2019 and this data was from march. that does not make sense. Something big is brewing. wouldnt processing time improve with reducing 526 filings. This increase of processing time makes no sense unless resources are diverted else where .
I think they are using a several-months-long window ending 2 months prior to the prediction date. This indeed would put all of the shutdown within that window.
Congressman Joaquin Castro of Texas requested an investigation into USCIS delays. Hopefully we get a clear answer out of it. It is odd that i526 had picked up the rate and were processing about 4000 applications per quarter and then it dropped to half of that (2000).
Thoughts on the impact of US Citizenship and Immigration Services Director L. Francis Cissna resigning? Specifically the EB-5 proposed regs at OMB?
https://www.cnn.com/2019/05/24/politics/l-francis-cissna-citizenship-and-immigration-services/index.html
Senator Grassley (R-Iowa) will go ballistic and Trump shouldn’t plan on visiting Iowa anytime soon or getting much support from the farmers there.
Cissna was a little too cute by half in my opinion and should have accelerated various projects including EB-5 reform. I thought his appearance last June at the Senate Hearing was condescending and the complete lack of communication on reforms was a disgrace. Too much of a bureaucrat…the theory of keeping you head down so you don’t get shot…didn’t work in this case!
The likely replacement, Virginia Attorney General Ken Cuccinelli, is no prize and if Senate leader Mitch McConnell doesn’t like you, you really have to be bad.