The drama continues (reauthorization, regulations)
June 23, 2021 34 Comments
For a recent update on what’s happening with EB-5 legislation see “EB-5 Regional Center Program reauthorization: Will it happen this week?” (June 22, 2021) in Homeland Preparedness News. Senator Grassley has been still pushing to get a reauthorization bill to the finish line. People opposed to the Grassley bill would like to see that bill fail and a short-term extension – or least hope of a future short-term extension – instead. However, Senator Grassley says that he would rather see the program die than allow for such a short-term extension. The HPN article quotes Grassley staffer Taylor Foy: “Extending the program without the reforms ‘would be legislative malpractice,’ said Foy. ‘If they are not enacted by the end of the month, the program will die.’” Strong words, with little understanding or sympathy for the economic not to mention personal stakes involved. But disturbing, and I understand the frustration. The industry said “a short-term extension to give more time for legislation” in 2015, and again in 2016, and again in 2017, and again in 2018, and again in 2019, until 2020 when the removal of the regional center program from the appropriations process that had facilitated short-term extensions. The pattern of extensions since 2015 is clearly not sustainable. We are past time for stabilizing legislation.
The investor advocacy organization AIIA has published open letters to Senators Schumer, Grassley, and Leahy, calling on them to keep faith with past regional center program users. “With the reauthorization deadline looming and no sign of resolution of gridlock on this issue, AIIA would like to remind Congress about the importance of upholding the contract with existing immigrant investors.”
Meanwhile, the 2019 regulations that increased the EB-5 investment amount and changed TEA definitions have been vacated in court. This sends the matter back to current DHS leadership, which may choose to reinstate the regulation with the $900,000/$1.8M investment amount (and likely will, since Director Mayorkas already confirmed that he supports the 2019 regulation) and/or to Congress to include investment amounts and TEAs in future legislation (thus making the legislative battle even more wide-ranging and contentious than it is already). I’m watching the USCIS website for an announcement. While waiting for these things to happen, there maybe a limited window to make a $500,000 investment – in the case of the regional centers, an investment in reliance on an immigrant investor program that may offer no chance to immigrate. Not the easiest marketing pitch. But if the court win on regulations does prove effective for marketing, that will be great for U.S. businesses that desperately need funding, especially where offering documents allow businesses to keep and use the money regardless of whether or not the investors are practically able to pursue the immigration process. (Regional centers may consider using escrow to help share the risk.) Making an investment/filing I-526 locks funds into a private business, but those actions do not lock in a chance to get a visa from the government based on that investment. (I have a post coming soon on what does get “locked in” at various stages in the EB-5 process.) So it’s complicated, and the need for authorizing legislation continues.
To quote Behring Companies, which brought the suit:
Today, the US District Court for the Northern District of California ruled in favor of Behring Regional Center, vacating the 2019 EB-5 Modernization Rule. The court agreed that DHS had no authority to implement the 2019 Rule due to the unlawful appointments of the Acting DHS Secretary and Acting USCIS Director who were appointed during the Trump administration without confirmation by the Senate. The Court vacated the Rule and remanded the matter to DHS and it may take steps to reinstate the Final EB-5 Rule pursuant to Administrative Procedure Act’s rule-making process. DHS may also file an appeal and seek to stay the order while the appeal is pending. The current sunset date for the EB-5 Regional Center Program is June 30, 2021. Congress is already discussing various legislative proposals for EB-5 reform. With Behring’s legal victory, we fully anticipate final bills will increase the required investment amount. Our efforts are focused on achieving a long-term extension and meaningful EB-5 reform for a better and more sustainable EB-5 Program.
UPDATE: I will copy relevant articles here as they are posted.
- “A swirl of EB-5 Developments” (June 25, 2021) by Robert Divine
- “The $500,000 EB-5 Ruling: Two Top Immigration Lawyers Answer Questions, Explain Investor Impact” EB5 Marketplace (June 23, 2021)
- “Political Consequences of Behring Decision” (June 23, 2021) ILW
- The Investment Migration Report held a very substantive discussion with IIUSA Executive Director Aaron Grau on June 23 regarding the implications of the Bering case and reathorization deadeline. Recording here on Youtube.
EB5 Investment Coalition has decided to speak with the public, and holding a webinar on June 24 at 9 am EST. This is a chance to hear from the faction opposed to Senator Grassley’s legislation to reauthorize the regional center program, and how they see their efforts creating hope rather than spelling disaster for the future.
EB-5 Updates 
Some additional context: the US Senate goes on recess this Friday, and reconvenes on July 12. So although technically the deadline is next week, if it doesn’t get reauthorized this week, authorization will lapse.
Hi Suzzane,
Do you think the bill will be passed in 3 days?
If not the regional center Eb-5 expire..
Based on the content provided by you, it seems the program won’t be reauthorized for a while and the program will lapse…
Please do let us know if that is the current situation
Let’s say hypothetically if regional center program expires, does the EB-5 still continue with independent individual investment?
Yes, EB-5 would continue even if the RC program expired. What would go away with the RC program is the ability to qualify for visas that depend on regional center sponsorship and counting indirect job creation (i.e. jobs on the payroll of anyone other than the entity that directly received EB-5 investment).
Hi Suzanne,
A technical question in case of RC program expiry. I understand that USCIS will stop processing 526 and 485. However, would it also stop processing associated 765 and 131 (EAD and Advance Parole filed along with 485) ? It seems to me that the latter benefits do not require availability of visa. And yet i cannot find any information on this matter via past announcements.
Thanks
This is an interesting question, and I’m not sure either. I hope that there will be an announcement to clarify the matter, if it comes to that.
Any thoughts on what happens to investors who have received the conditional green cards and are waiting to file their I-829?
Per https://carolynleepllc.com/2021/04/19/possible-sunset-effects-on-eb-5-cases-come-june-30-2021/ , the sunset does not affect I-829. But it doesn’t make sense since an end to the regional center program would mean indirect job creation cannot be accepted by USCIS. Of course, I’m not a (an immigration) lawyer and so I might be wrong. Curious to hear what you think.
You can be confident that if Carolyn Lee says it, it’s correct. Also, you can see in the USCIS Policy Manual that USCIS offers leeway for “material change” once the investor has received conditional green cards, including the material change of regional center termination. “Further, with respect to the impact of regional center termination, an immigrant investor’s conditional permanent resident status, if already obtained, is not automatically terminated if he or she has invested in a new commercial enterprise associated with a regional center that USCIS terminates. The conditional permanent resident investor will continue to have the opportunity to demonstrate compliance with EB-5 program requirements, including through reliance on indirect job creation. ” https://www.uscis.gov/policy-manual/volume-6-part-g-chapter-5 I see that I should revise my previous comment to clarify this.
That’s reassuring. I wonder if “material change” can cover an entire sub-section of the law, which supports the petition, being pulled under the feet of thousands of investors. Keeping fingers crossed and hoping saner heads prevail. Thanks for the quick response.
Thank you Suzanne
I am guessing it also doesn’t affect investors, who have already applied for i829 form already and is just waiting for adjudication?
That is correct. The problem is just for people who are at any stage before conditional green card.
https://ajmeralaw.com/blog/indian-supreme-court-prohibits-practice-of-law-by-foreign-lawyers-law-firms-in-india/
Hi, Suzanne,
I have enjoyed your writings on the blog. Very helpful indeed.
So, if the reauthorization does not happen or the extension of the RC program fails where does that put the I-526 petitioners in queue at this very moment? Would they somehow still get their 526 approved and eventually get a temporary green card or would they lose out completely? (the worst place to be as I think of it)
In the case that they lose out and do not get I-526 approval would you think the investors could bring a lawsuit for … let’s say the lost economic opportunities? I can imagine that the investors convincingly making an argument but for the prospect of getting greencard through the EB-5 program they would not have liquidated their assets to finance their I-526 petitions. And the only risks they were informed of was the reasonable commercial risks their investments must bear per the legislation not the administrative ones they now find themselves in. “at risk” did not mean the expiration of the program. Would this fly you think?
I would very much like to hear your thoughts as I have been waiting for 19 months for the approval of I-526.
Again, thank you very much for all the informative posts you make
Thanks
This article addresses your “what if” questions: https://www.eb5investors.com/magazine/article/eb5-visa-legislation-reauthorization
Under current rules, there is not a way for a regional center investor to get a green card absent regional center program authorization. A challenge with a lawsuit is, whom do you sue? If the government, they can truly say that they never promised that investment or I-526 filing would necessarily result in a green card, and claim that it’s regional centers’ fault for not informing investors about the RC program lapse risk, or investors’ fault for not being informed. If RCs, they can claim it’s the governments’ fault for letting the program lapse, not theirs — and likely they did disclose the administrative risk somewhere deep in the offering documents. But no doubt, if the program lapses, there will be a blizzard of litigation. If for no other reason than that litigation will be the last way to for lawyers to make money from regional center investors. And maybe there will be successful arguments. But I very much hope that it does not come to that — for your sake and the sake of tens of thousands of others similarly placed!
The US government cannot have been considered to have made promises to investors because RC has always been a pilot program and hence subject to extension. That said, an investor could legitimately have had reasonable expectations at the time of filing. I suppose lawsuits would be easier for those with 526 approvals. There is a point at which the courts will agree that some of these actions are arbitrary with respect to existing investors.
I agree with you.
But, what do you think about the people who have been in queue for a certain length of time who are based on the historic I-526 approval time “probably should or could” have been approved by now under normal circumstances before the expiration of the RC program but have not due to the pandemic and Trump-era anti-immigration policies?
If they argue that at the time of filing given the time remaining until the program reauthorization in 2021 they had reasonably expected that their I-526s would have been approved well within the time window but for the pandemic and the anti-immigration policies? It might be a tenuous argument but still it is arguably legitimate and meritorious? I think if developed properly this argument could fly in court. What do you think?
Yes i know your reasoning as i have been through some of this. There have been writ of mandamus lawsuits with regards to 526 processing delays. I think the success rate with mandamus has been mixed. That said, i can see the argument for additional harm being caused by 526 processing delays if the delays mean that the EB5 program itself expired. Then it comes down to making the case in court and persuading a judge of this line of reasoning – it is a bit tenuous as you said but it is not totally implausible.
A very sensible answer. It’s going to be a merry-go-around for “lawyers” indeed. I think I read every letter of the subscription contract carefully. But, there would have been something on the administrative risks such as what we are potentially facing now and even a follow-up clause whereby I already released them from potential liabilities. Thank you for your answer. Please keep us posted on future developments.
Thank you for your service.
Your point about US businesses pitching for investment is true. I already got 4 emails today from different entities to take advantage of the narrow window for 500k investment, yet no promises for GC from what I understand from your useful post here. In essence, they are not really disclosing the real risk of RC program expiring. Glad there are transparent bloggers like you, who are giving updates on this. Lots of money and lots of stakeholders.
Given the major development from the Behrings win, I think (thinking hard here), since the senate is recessing on Friday, and lacks time to do anything else in a hurry, they will give another extension till September or so, IMO.
I’m curious why the EB-5IC contingency is framing the Behring lawsuit as some sort of massive win, given that the widespread expectation is that the industry has only 1 week (until June 30th) back at the $500,000 investment level. It’s hard for me to see how this will help the industry and I can’t help thinking that those legal efforts might have been better put towards securing program authorization. If anything I imagine that this will make reauthorization even trickier since investment amounts and TEA definition will become yet another thing for IIUSA and EB-5IC to argue over in any upcoming bills.
If the lawsuit was mostly about setting a legal precedent, I would find it somewhat understandable. If the lawsuit was a last ditch attempt to get gullible people to invest in a program that is teetering on the edge of lapse/termination, well that’s just infuriating to watch, as an existing investor. Not sure what the rationale was; maybe there is something crucial I am missing since I am not a legal expert.
Behring initiated this a while ago, only the ruling came late. A win is a win. As you mentioned, there is now confusion among lawmakers themselves as to the limits. Therefore I believe they will extend for a few months again, until they come back after 12th July. maybe till September.. IMO.
Hi Suzanne ,
Some are saying the regional center is getting extended for a few months in the comments .
Is that true ?
Please do let us know
People who are blocking Grassley have held out a few-months extension as a hope. Grassley’s office is quoted as saying that he will block a few-months extension. A lapse looks unavoidable, unless one side compromises. But neither side has been willing to compromise so far. We will know by the end of the day.
Indeed, litigation over the regs has been in process for some time, almost as a matter of principle and considering the disastrous effect of the regs on the industry. I believe that the resolution timing is just unfortunate, not a plot. But the framing is consistent with a focus on maximizing personal gain as opposed to sustainable and broad-based benefits. The lawsuit win does not create a sustainable situation, since the Administration/DHS and influential members of Congress have all supported increased investment levels and TEA reform, since vacating the regulations complicates an already fraught legislative battle and the program’s already troubled reputation for blocking reform, and since we don’t know how a number of details in the aftermath of the court decision will play out, as far as investor filings. However, the win is already supporting a marketing blitz, and looks likely to result in millions of dollars coming to regional centers and their projects. That infusion of cash will bring short-term and long-term economic benefits to those who control the funds, regardless of what happens on the immigration side. This moment will separate the wheat from the chaff among regional centers, lawyers, and promoters, depending on how scrupulous they are in understanding and disclosing the current situation to prospective investors.
There are news from the Senate, although not the ones we’re all waiting for. Today, the Judiciary committee advanced Ur Jaddou’s nomination. I believe the next and final step is a full Senate vote.
https://iiusa.org/blog/uscis-nominee-ur-jaddou-vote/
Re-authorization bill has been objected. I guess we are now in unchartered territory…
Where does this come from?
It would be from watching live floor proceedings in the Senate.
Does “Objection” mean it is dead?
https://www.cop.senate.gov/reference/glossary_term/unanimous_consent.htm
Yes, senator from South Carolina objected to unanimous passage therefore congress cannot advance this bill before it expires on June 30th. Not sure if they have other remedies at their disposal to get this going after it’s expiration date.
Do we know how long will USCIS keep existing applications in abeyance based on past experiences with EB5 and/or other legislations?
In guidance for past RC program lapses, USCIS said “Unless the program is extended, USCIS will hold unadjudicated Regional Center proposals and Regional Center affiliated I-526 petitions that were received before the provisions sunset in abeyance for an indeterminate period of time pending further action by Congress.” That “indeterminate period” has not been tested beyond a couple months. USCIS is excellent at waiting for indefinite periods, so I don’t know why they would rush to action for the first time ever. Certainly regional centers will push for the period to be as long as possible, since it’s in their interests to keep investors committed to the process for as long as possible, and avoid triggering any no-fault I-526 denial refund protections offered to investors. And some investors will likewise want their petitions to be held in abeyance for as long as possible, considering the likelihood that the RC program will be reinstated eventually.