Text of EB-5 law enacted as of March 15, 2022

March 16, 2022 42 Comments

H.R.2471 – Consolidated Appropriations Act, 2022 was enacted on March 15, 2022, and contains the EB-5 Reform and Integrity Act of 2022 in Division BB (PDF page 1022 of the enrolled bill). This means that the regional center program will have a new authorization and new requirements as of May 15, 2022, and other EB-5 program changes are effective as of March 15, 2022 as I discussed in my previous post.

Now we wait for USCIS and Department of State to react with their interpretation and applications of the new EB-5 law. So far, the USCIS EB-5 page has still not been updated since December 2021. I hereby predict that the USCIS page will be updated later this week with one sentence saying “We are evaluating the EB-5 Reform and Integrity Act enacted on March 15, 2022 and will provide additional guidance as soon as practical,” followed by silence. But surprise me, USCIS! (3/17 UPDATE: The USCIS page is now updated to say almost exactly what I predicted.) The April 2021 Visa Bulletin published today has RC category Unavailable in Part A and mostly Current in Chart B, makes no changes yet to reserved visa categories, and says “The Consolidated Appropriations Act, 2022, which reauthorizes and reforms the EB-5 Immigrant Investor Regional Center Program, was signed by the President of the United States on March 15, 2022. Certain Regional Center Program aspects of this legislation go into effect 60 days after the date of the enactment of this Act. More information will be published in coming editions of the Visa Bulletin.”

Pending official interpretation, I’m continuing to update the Reauthorization page on this blog with links to a selection of industry articles and upcoming webinars, as they come to my attention.

In case this helps anyone else’s sanity and clarity, I’m sharing a folder of Word documents that I made for myself. The folder includes:

  • The text of the EB-5 Reform and Integrity Act of 2022 with heading styles applied. The text is copied from the “enrolled bill” version of H.R.2471 at Congress.gov (which has a few minor tweaks from the EB-5 bill text first released on March 6). I formatted to flag six layers of headings so that I can always track where I am using Word’s Navigation Pane.
  • The text of Immigration and Nationality Act sections referenced in the EB-5 Reform and Integrity Act of 2022, with headings applied. I didn’t redline the new law changes onto the INA (I just copied INA excerpts as-is), but at least this facilitates looking back and forth to see changes in context. We must be able to follow section headings in order to translate innocuous-looking sentences like “An alien seeking to pool his or her investment with 1 or more additional aliens seeking classification under section 203(b)(5) shall file for such classification in accordance with section 203(b)(5)(E)” and realize the explosive meaning: “from now on, an EB-5 investor may only invest with other EB-5 investors through a regional center; pooled direct EB-5 is no longer an option for new I-526.”
  • A document comparison showing the EB-5 Reform and Integrity Act of 2022 red-lined on the base of S.831 – EB–5 Reform and Integrity Act of 2021. S.831 is the bill that Senators Leahy and Grassley introduced back in March 2021 and  tied to pass last June before the RC program expired. No surprise considering Senator Leahy’s negotiating position, document comparison shows that the new EB-5 law largely reproduces S.831. There were no changes to the S.831 integrity measures, and no backlog relief additions. Negotiations just added higher investment amounts, new visa restrictions, new TEA definitions, redeployment policy, and grandfathering protection for the future.

I’m occupied with business plan deadlines at the moment, but will write more as soon as possible about reserved visas, the new EB-5 law change that most concerns me as resident EB-5 data collector and backlog Cassandra.

Filed under EB-5 Law & Policy

FY2022 Q1 USCIS Processing Report

March 14, 2022 37 Comments

USCIS has updated the Citizenship and Immigration Data page with performance data for FY2022 Q1 (October to December 2021).

Here, in one picture, is what’s happened to USCIS performance in adjudicating EB-5 forms.

Official data now confirms what I previously reported based on leaked information: the Investor Program Office reduced I-526 processing volumes to almost nothing at the end of 2021, and also had the lowest I-829 performance numbers in two years.

These charts show performance over the course of IPO’s history.

Comparing FY2022 Q1 volumes with the average for 2017-2018, IPO processed 2 times fewer I-829 and 54 times fewer I-526. And that’s despite having (or at least, paying) more employees in 2022 than in 2017/2018. I-526 productivity for the second half of 2021 was so low as to be almost invisible in the comparison chart, and not for lack of I-526 to process. The report shows quite a few I-526 receipts that must have been direct EB-5 in the second half of 2021, not to mention the hundreds of direct cases in the backlog. I have no idea why I-829, after having shown an improvement trend in 2020, actually got worse again in 2021, even after the regional center program lapse made more resources available to work on I-829.

I previously lamented how productivity tumbled after Sarah Kendall took over as IPO chief at the end of 2018, and celebrated when she moved on at the end of 2020. Now we know that her replacement Alissa Emmel (an internal promotion, unfortunately) is even worse. If you’re a Congressperson or journalist hungry to be the hero who tackles a hot scandal that’s tying up billions of dollars and endangering thousands of job-creating projects and inviting fraud, the USCIS Investor Program Office is red meat ready for you. The numbers alone tell a shocking story, and I could offer further spicy details about what’s been going on specifically with processing, lack of industry engagement, and some evidence of conspiracy. This government department desperately needs attention and accountability.

EB-5 Form Data from the USCIS FY2022 Q1 All Forms Report

DescriptionReceivedApprovedDeniedTotal completed FY2022 Q1Pending  at period endProcessing Time (months)
I-526Immigrant Petition by Alien Investor18916456113,13240.8
I-829Petition by Investor to Remove Conditions on Permanent Resident Status6182992732611,73141.2
I-924Application For Regional Center Designation Under the Immigrant Investor Program –   –   –   –  138 N/A
I-924AAnnual Certification of Regional Center344 –   –   –  1,734 N/A

Notes:

  • The I-526 denial number looks high, but many of these are actually withdrawals (which get coded with denials for summary reports).
  • I-526 receipt numbers were impressively high in Q1, considering that only direct cases could be filed in October to December 2021.
  • The 40+ month processing times reported for EB-5 forms reflect the fact that IPO spent the end of 2021 working on a low volume of very old petitions,. “Processing times are defined as the number of months it took for an application, petition, or request to be processed from receipt to completion in a given time period. The number of months presented is the median which is the time it took to complete 50% of all the cases processed in the quarter.” The “All Forms Report” conveniently shows that EB-5 forms have almost the worst processing times in the entire immigration service.

While USCIS does not report data specific to EB-5 I-485, I always check the category-wide I-485 report and look at performance numbers for the California Service Center, where most (all?) EB-5 I-485 get adjudicated. California Service Center productivity unfortunately also does not look good for the inventory of 5,400 Employment-Based forms. (I don’t know what fraction of the EB inventory is EB-5.)

Future processing times can be estimated by dividing inventory by processing volume. Looking at FY2022 Q1 I-526 data for example, I can see 13,132 I-526 pending and 61 I-526 processed in a quarter, and calculate that it would take 13,132/61=215 quarters (i.e. 54 years) to clear the inventory and reach my petition, if I file I-526 today and IPO does not improve on recent processing productivity. On the other hand, if IPO does improve and quickly returns to processing over 4,000 I-526 per quarter (as they did in the recent past and could do again), then the I-526 processing time estimate equation for a new I-526 becomes 13,132/4,000=3 quarters (i.e. less than one year). When prospective investors ask “how long will I-526 take?” they want an answer much closer to one year than 54 years. When Congressional reformers ask “how long will it take the agency to examine investor petitions and find any problems,” they also don’t want to hear about half centuries. IPO needs an intervention, ASAP.

The EB-5 Reform and Integrity Act just passed by Congress mandates USCIS to study the fees necessary to adjudicate I-526 in less than 240 days (or 120 days for a TEA investment) and I-829 in 240 days. IPO would have to process almost 5,000 I-526 per quarter and 4,400 I-829 per quarter to clear the the current inventory in 8 months.

I also have additional leaked data with processing detail for January to March 2022, including specific dates processed and RFE volume, and will report that as time permits. But my first priority is articles on the new law and how reserved visas will affect the China backlog. And I have my business plan writing day job to manage. (I hear the I-485 questions but I don’t know how to answer them. When a lawyer writes about who can use I-485 concurrent filing and when and how, I will link the article here. Or I welcome insights in the comments.)

Filed under EB-5 Statistics

EB-5 Reform and Integrity Act of 2022

March 11, 2022 42 Comments

The EB-5 program faces a second life thanks to the EB-5 Reform and Integrity Act of 2022, which passed the House on Wednesday and the Senate on Thursday night as part of the Consolidated Appropriations Act, 2022 (H.R.2471), and set to be signed by the President. For a content summary, I recommend Robert Divine’s March 8 article Analysis of New EB-5 Reform Bill Destined for Omnibus by March 11, 2022.

I appreciate the miracle that an EB-5 bill exists at all, considering the conflicting interests and story behind it. I am bubbling with reactions, but will start with what I love about this bill – that it passed. The bill is not the greatest good for the greatest number, but it’s some good for someone, and better than nothing for everyone. The immigration and economic promises of the regional center program still need a fight, but at least they’re still alive to be fought for.

The EB-5 Reform and Integrity Act of 2022 puts both the direct and regional center programs on a new footing, and makes changes that affect EB-5 investors past and future. USCIS will need to rewrite its policies and training and forms, I get new topics to address while marking my 12 years of past articles as all outdated, regional centers and direct EB-5 project companies will reorganize their processes and rethink their plans, past EB-5 investors will recalculate their wait time expectations and success prospects, and future EB-5 investors will enjoy new protections (including grandfathering protection, thanks to AIIA) and face new feasibility considerations.

While I wait for the Act as finalized with the President’s signature, I’ll start with a few points on timing, based on effective dates written in the text.

  • Date of enactment: The President has until March 15, 2022 to sign the Consolidated Appropriations Act; the date of enactment should be as soon as that happens (could be as early as today).
  • Regional Center program authorization timing: In the EB-5 law in Division BB of the Act, the new regional center program authorization is in Sec. 103(b), which has an effective date of “the date that is 60 days after the enactment of this Act.” So we’re looking at RC authorization in May. The regional center integrity requirements also in Sec. 103(b) share the 60-day effective date (giving RCs some time to organize compliance for a host of new rules, and USCIS some time to figure out new forms and procedures).
  • Investment amounts and TEAs: The new investment amounts ($1,050,000 or $800,000) and TEA definitions are in Sec. 102 of the new law, which has an effective date immediately “on the date of enactment of this Act.” Investment amount and TEA changes apply prospectively. Sec. 105 repeats the principle that “a petitioner shall establish eligibility at the time that he or she files a [I-526]. A petitioner who was eligible for such classification at the time of such filing shall be deemed eligible for such classification at the time such petition is adjudicated.”
  • New direct I-526 filings: Sec. 105 of the new law provides that immediately from the date of enactment, direct EB-5 I-526 can only be filed for projects with a single EB-5 investor. (If a project has more than one EB-5 investor, new I-526 must be filed through the regional center route).
  • New regional center I-526 filings:  The new law stipulates that regional center I-526 can be filed after the regional center sponsor has filed an “application for approval of investment in a commercial enterprise.” This application will be similar to an I-924 exemplar, but with different content requirements. At minimum, new regional center I-526 filings will wait for 60 days until the program is authorized. The wait could be longer if USCIS claims longer than 60 days to figure out the new process to accommodate the regional center approval filings that must now precede investor I-526. It will also be longer if USCIS interprets the repeal of the old statute to mean that all regional centers authorized under the old statute are voided and must reapply for designation under the new statute. (Considering processing times, I sincerely hope that’s not the interpretation.)
  • Regional center visa issuance: Department of State must wait to issue regional center visas until the regional center program is authorized. But since authorization in May is now certain, I hope DOS chooses to redeem the time in March and April with advancing paperwork and interviews at least up to the point of visa issuance. (But consular and I-485 processing have been backlogged and inefficient across the board since 2020, so I am not counting on very swift action specially for EB-5 – much as we need it to minimize the impending loss of over 10,000 FY2022 EB-5 visas.)
  • Visa issuance generally: The reserved visa provision in the new law is in Sec. 102, which is effective immediately on the date of enactment. The provision will not be felt immediately in practice because FY2022 has so many extra visas available in theory and so constrained by consular/USCIS processing capacity in fact that visa loss in FY22 was already overdetermined, regardless of the additional role of set-asides. I’ll write separately on this reserved visa issue, which is complicated in detail (thanks to the backlog and country caps and how EB visas roll over), but an obvious and serious concern on its face given the basics that 100%-32%=68% and that “reserved” means “reserved.”
  • Concurrent filing of I-526 and I-485: The nice provision that allows I-485 filing any time “if I-526 approval would make a visa immediately available to the beneficiary” is in the Sec. 102 of the Act that’s effective immediately. I’m not sure how the visa availability condition will play out. The Visa Bulletin will show regional center visas generally available starting in May, with likely changes to final action and filing dates. The window of availability for India and Vietnam will depend on how long it takes the thousands of petitions now stuck in I-526 processing to register as backlog for the visa stage.  If I were a direct investor with pending I-526, I’d talk to my lawyer about filing I-485 right away before the Visa Bulletin or USCIS have a chance to think about the regional center crowd. It looks to me as if the I-485 language in Sec. 102(d) simply references the EB-5 category, and doesn’t mention qualifications such as when the underlying I-526 was filed, but I defer to the lawyers.
  • I-526 processing: Section 105(c) says that DHS should continue to process I-526 and I-829 petitions during the implementation of this Act and its amendments. It’s not perfectly clear that this directive includes regional center I-526, and I wouldn’t put it past USCIS to wait 60 days before taking up RC I-526 processing. But at least there’s zero basis for USCIS to start bulk denials of RC I-526 after March 11, since RC petitions now certainly have statutory authorization coming. The major barrier for I-526 processing is that USCIS has just been hardly working at all on EB-5, for months. Here is the recent history of Form I-526 approval volume: three approvals in December, eight in January, and eight in February. Seriously! I hope the staff that hasn’t been working on I-526 adjudication since July 2021 hasn’t been lost permanently. But even if EB-5 can get its adjudicators back very soon, I don’t expect an instant pivot from <10 I-526 approvals per month to the 300+ decisions per month that we had before July 2021 (not to mention the 1,000+ decisions per month we had before Sarah Kendall). The battle to get USCIS to process petitions is only beginning. Thankfully the new law offers new resources for the battle. Sec. 106 of the new law mandates DHS to at least make a plan for “timely processing.”
  • Law interpretation: Having watched the progress of EB-5 policy and regulations since 2010, and witnessed how much time the agency takes to think or write about anything, I’m feeling faint as I contemplate how they’re going to deal with translating the hefty EB-5 Reform and Integrity Act into policies and procedures. Time to start praying for another miracle: this time, efficiency and sense at DHS. (And at the same time, to move advocacy energies toward assisting that miracle.)

Every so often, I put out the reminder that I welcome reader support for my effort on this labor intensive and otherwise unmonetized blog.  I have Paypal and Zelle accounts linked to my email address suzanne@lucidtext.com (and a Paypal button), and appreciate any contributions. Regardless, I will keep writing as time permits to support the community that’s developed here, and my clients who are still bravely trying to make good use of EB-5. I appreciate all of you who have taken time to write comments and share your insights and experience here, especially over the difficult past year.

Filed under EB-5 Law & Policy