Stabilizing the EB-5 Program

The Consolidated Appropriations Act, 2021 passed the House and Senate yesterday (House amendment to the Senate amendment to H.R. 133). [Update: Finally signed by the President 12/27.] The EB-5 industry will note three significant points in this 5,593-page “Omnibus”:

• No country cap change: The Omnibus does not include any version of the Fairness for High-skilled Immigrants Act, or any language that would change EB visa allocation or country caps. This was a close call. The next Congress will provide renewed opportunities to tackle the issue of excessive backlogs – hopefully with improved solutions that truly involve fairness for immigrants and wouldn’t simply retroactively reorder the visa wait lines.  For now, we have more time to educate Congress and the industry on unintended EB-5 consequences, and how they might be mitigated. I’m preparing a quantitative analysis that looks at issue from the perspective of different countries at various points in the EB-5 wait line (not only considering timing for the end of the line, as others have done).  
• No EB-5 legislation: The Omnibus does not include the EB-5 Reform and Integrity Act of 2020, a belated and sadly little-noted attempt at EB-5 legislation. Neither of the co-sponsors, Senator Grassley and Senator Leahy, wrote about the legislative amendment on their websites. (So far I just found a nice mention from Rep. Brian Fitzpatrick.) I guess that few people in the EB-5 industry heeded the call to ask their Congressional reps to support the measure, considering that most of us didn’t even know it existed until a couple weeks ago and had no input into the content or process. The IIUSA Board of Directors had opportunity to deliberate on and decide to support the legislation, and made a brave but belated attempt to explain and sell the hard compromises to IIUSA members and other stakeholders. This bill was indeed an improvement on previous versions, but would have benefited from more broad-based involvement translating into wider buy-in and stronger support when opportunity arose for passage.
• Change to regional center program authorization: The Omnibus extends regional center program authorization to June 30, 2021 – significantly, not to September 30, 2021, when the funding expires. (The extension is in Division O Title I Section 104, page 2,468: “Section 610(b) of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note) shall be applied by substituting ‘‘June 30, 2021’’ for ‘‘September 30, 2015.’’ ) This move finally decouples regional center program authorization from government funding. That can be good, considering how fraught the appropriations process has been, and also bad, since RC program authorization loses the benefit of inertia. Now the continued authorization of the regional center program will apparently depend on managing standalone EB-5 legislation. If you’re a regional center, pause to eat some cookies and watch the kids open presents, and then talk to your trade association/lobbyists.  Find out how you can support accomplishing legislation that will work for you, because the time is short and the stakes high. We now have a few months to do what we’ve been trying to do since 2015: get EB-5 legislation with long-term regional center program authorization and reforms that help protect and don’t kill the program. And assuming you are one of the majority of EB-5 users who’s not a fat cat and not a fraud, please also seek publicity.  Good legislation depends on changes to the popular perception of EB-5, and a better understanding by Congress of who’s using the program and how.

In order to maintain credibility, the EB-5 program needs stability. U.S. business people using immigrant investment make business decisions and execute contracts that rely on dependable estimates for cost of capital and the time horizon and rules for deploying capital. Potential immigrants invest hundreds of thousands of dollars in reliance on dependable estimates for the potential return on that investment.  EB-5 program costs, timeline, visa availability, eligibility rules, and very existence cannot be shrouded in uncertainty or subject to major volatility.  2020 has been tough, between no-notice retroactive Policy Manual updates and threatened retroactive legislative changes. The program requires better.  I look forward to changes in USCIS, Congressional, and industry leadership in 2021 and a path to more stable footing for the EB-5 program.