EB-5 form filing fees

We have opportunity to review and comment on the U.S. Citizenship and Immigration Services Fee Schedule. The proposed rule was published on 11/14/2019, and comments are due by 12/16/2019.

The proposed rule appeared at a busy time in EB-5 and I haven’t heard much talk about it. But this could be important. Future processing times could depend on today’s fee decisions. And EB-5 processing is a major factor in the future survival and integrity of the EB-5 program.

The fee review asks this important question: what resources does USCIS need to provide adequate service? Considering what has changed since the existing fees were set in 2016, how do filing fees need to change?

The fee review reports that the work associated with EB-5 forms has increased significantly since the last fee adjustment in 2016, but the 2019 rule proposes only minor increases to EB-5 filing fees.

* Completion rates “reflect what is termed ‘touch time,’ or the time an employee with adjudicative responsibilities actually handles the case.”

How do we feel about this fee proposal? To me, that small fee increase over 2016 looks like bad news. A 9% fee increase for I-526 does not look equal to addressing the 33% increase to per-form touch time, not to mention the 100% increase to I-526 processing times and 50% decrease to processing volume that occurred between 2016 and 2019. If the labor to adjudicate Form I-829 has nearly doubled since 2016, how will a 4% fee increase give resources to handle that? Does the 0% increase to the I-924 fee indicate that USCIS considers the currently-posted 62 to 115-month I-924 processing time acceptable?

The fee rule aims “to determine the USCIS resources needed to process benefit requests within established adjudicative processing goals.” The rule does not disclose what processing goals it uses. But the goals can’t differ much from the status quo, if the rule expresses little need for additional resources for EB-5.  (To review the dire status quo: according to the current Check Case Processing Times page, a petition is only “outside normal processing” after 1,527 days for I-526, 1,339 days for I-829, and 3,452 days for I-924. But, side note for people filing Mandamus complaints, note that the Historical Processing Times page has a quite different statement of average processing times in 2019.)

I don’t only worry that proposed fee increases are not proportional to the reported increase in work per form. Total revenue is also a concern. Revenue equals price times quantity. If form fees stay about the same, and receipts plummet, then USCIS will have a smaller and smaller EB-5 budget to work with. The fee review estimates $83 million average annual revenue from proposed EB-5 fees, assuming about 19,000 EB-5 forms get filed in FY2019/2020. (This is summing I-526, I-829, I-924, and I-924A.) In reality, annual average EB-5 receipts were only about 10,000 for FY2018/2019 per USCIS data, and will be even lower going forward assuming that the law of demand holds following the doubling of the EB-5 investment amount. The picture won’t be pretty, if IPO ends up having less than half the new fee revenue that it expected, while still needing resources to adjudicate years-worth of pending forms on top of new receipts.  I wonder if the terrible performance we saw at IPO in 2019 wasn’t linked in part to low revenue due to dropping receipts, even as workload remained heavy due to pending petitions. (Sadly, there’s apparently no GAAP revenue recognition principle for USCIS accounting.) And the fee-setting methodology employed by USCIS apparently assumes that for any given year, receipt volume = workload volume. That’s not the reality for EB-5, given long processing times and fluctuating but generally falling demand.

In commenting on the proposed rule, I’m inclined to advocate for much higher EB-5 form filing fees. That considers the current unacceptable processing situation, and assumes that future resources depend on future fee revenue.  But I can see other arguments. EB-5 fees are linked to EB-5 adjudication costs in theory, for calculation purposes, but not necessarily in reality. If EB-5 fee revenue increased, that might buy more resources to improve EB-5 adjudications. Or the added revenue might help subsidize fee-exempt forms, get appropriated for ICE, or cover other USCIS shortfalls and overhead.  Even if the increased EB-5 fees stayed with EB-5, a new petitioner wouldn’t technically be paying the cost of her own adjudication, but helping to cover the cost of adjudicating the 20,000+ EB-5 petitions still pending from previous years. I see the unfairness in calculating fees for the incoming few at a rate needed to subsidize the cost of adjudicating the many still pending. (Though I also don’t see an alternative.)  Furthermore, one could argue that the longer completion times and ballooning processing times aren’t due to lack of adjudicative resources, but to bad policy and management that should be addressed before increasing fees. And finally, it’s possible that although the proposed rule invites public comment, it’s actually to late too influence decisions about resource allocation. I don’t know. But for those interested in this topic, I welcome your thoughts. Here is a draft of a comment that I wrote, and shared with IIUSA. This comment has not been submitted to USCIS, and I welcome input, objections, corrections, and improvements before the submission deadline. At least I’m sure that we shouldn’t miss the chance to speak to USCIS about the critical issue of processing. USCIS has long way to go to achieve its goal “to recover the full operating costs associated with administering the nation’s immigration benefits system, safeguarding its integrity, and efficiently and fairly adjudicating immigration benefit requests, while protecting Americans, securing the homeland, and honoring our country’s values.”