I-924A webinar, Processing Times, I-526 by country, visa numbers, EB-5 legislation (HR 3471)

I-924A Webinar
U.S. Citizenship and Immigration Services (USCIS) invites you to participate in a webinar on Thursday, August 24, from 1 to 2 p.m. Eastern to discuss Form I-924A, Annual Certification of Regional Center. This webinar will discuss certain changes to the Dec. 23, 2016 edition of Form I-924A and the accompanying instructions. Here is the invitation with instructions for registration. This webinar is also mentioned in Julia Harrison’s Talking Points (July 2017), a new document on the USCIS website that covers a bit of content from the EB-5 engagement in San Jose.

EB-5 Processing Times
Good news! The latest IPO Processing Times report indicates that IPO had a productive June and possibly made a dent in processing times. Most reports since 2014 have shown IPO processing less than a month’s worth of filings each month, which meant it got further and further behind. But in June 2017, the “processing petitions as of” date advanced 1.1 months for I-526, 1.4 months for I-829, and 2.1 months for I-924. If IPO can keep working through more than 30 days of filings every month, we’ll see processing times come down. I understand that periodic filing surges make this difficult, however.

EB-5 Investors by Country: 2016
The latest Regional Center Business Journal has an article with interesting data on I-526 petition filings by country of investor origin, obtained via FOIA request from USCIS. See A New Lens: What the Latest Data Tells Us about Raising EB-5 Capital in an Increasingly Challenging Marketplace (June 2017) by Lee Li.  The State Department publishes figures for visa issuance by country, but they aren’t a good indicator for current demand since most investors receive a visa years after investing. The figures on I-526 filings in 2016, however, likely reflect investment decisions in 2016.

A few takeaways from the 2016 data on I-526 petitions:

  • Vietnam and India register the largest demand spike, with 40+% increase in I-526 petition filings between 2015 and 2016
  • Iran, Venezuela, and Mexico are three countries that made the top 10 countries by number of petition filings in 2016, though they weren’t in the top 10 for visas issued in 2016.
  • Average I-526 approval rates vary by country. The lowest average approval rate in 2016 was for Iranian investors, at only 37%, while 96% of petitions from Hong Kong investors were approved. I will guess that approval rates correlate to the relative difficulty of verifying source of funds for specific countries, and on the relative experience/inexperience of people preparing petition paperwork for investors in each country. Other countries with low I-526 approval rates in 2016 were Mexico (57% approval rate), India (66%), and Russia (67%).
  • China-born investors filed more or less 10,948 I-526 petitions in 2016, while the rest of the world filed about 2,325. China-born investors should pay attention to that “rest of the world” number, since those petitioners and their family get to go ahead of China-born investors in the visa queue.

Visa Numbers

Speaking of the visa backlog, here’s another good article addressing the situation and possible solutions: It’s All About the Numbers (August 8, 2017) by H. Ronald Klasko.

The status quo is unsustainable and requires serious response. So long as we have a few mega-projects flooding the program and the backlog with investors, we must unite in support of visa number solutions or EB-5 will become unusable for everyone. And the U.S. would benefit from providing visas to accommodate the volume of people willing to make major investments in our economy.

New Legislation
Representatives Brian Fitzpatrick (R-PA) and Dwight Evans (D-PA) have introduced an EB-5 bill: H.R.3471 – American Job Creation and Investment Into Public Works Reform Act of 2017. The bill is nearly identical to H.R. 5992 introduced last year by Goodlatte and Conyers, with the most significant difference being the suggestion that infrastructure projects administered by a governmental entity should get a visa set-aside. This bill is significant because it’s one of only two EB-5 bills officially on the table this Congress, but I don’t hear anyone talking about it. The sponsor and co-sponsor haven’t announced it on their websites. Industry as a whole will not like the fact that it doesn’t offer a solution to the visa backlog. The big-league lobbyists won’t like it because it retains the features of H.R. 5992 that they worked so hard to negotiate out of subsequent discussion drafts: retroactive application to petitions filed since June 1, 2015, hefty and clunky account transparency requirement, gift and loan restrictions, significant incentive to invest in a distressed TEA, and significant spread in the annual fee applied to large versus small regional centers. The additional visa set-aside proposed by H.R. 3471 is sweetened by the fact that the bill eliminates the H.R. 5992 suggestion to make the set-asides permanent. I’ve added the bill to my comparison chart, and will keep watching for discussion. The Hill has another article on controversial immigration issues linked to the upcoming September spending fight, but EB-5 doesn’t get a mention. Perhaps H.R.3471 is a subtle solution to the border-wall funding argument that dominates current immigration debate?

 

RAISE Act

And now, Washington is talking about immigration after all. Today the White House announced that President Donald J. Trump Backs RAISE Act. Senator Tom Cotton introduced this bill back in February, but today released a significantly revised and expanded version of Reforming American Immigration for a Strong Economy Act (now with the number S.1720). The bill promises to “spur economic growth and raise working Americans’ wages by giving priority to the best-skilled immigrants from around the world and reducing overall immigration by half.” Most of the reduction would come at the expense of family-based visas, which would be cut dramatically. The proposal would keep the current 140,000 allocation for employment-based visas, but would do away with all current EB categories (including EB-5) and replace them with a “merit-based” or “skills-based” points system. A prospective EB immigrant would accumulate points to gain the right to enter an applicant pool, and then every year USCIS would invite the 140,000 applicants in the pool with the most points to file a visa petition. Points could be accrued based on age (the nearer to age 25 the better), English language test scores (the higher the better), educational credential (most points for US doctorate in STEM), extraordinary achievement (more points for Nobel laureate than Olympic medalist), job offer (more points for higher salary), spouse (negative points for low-point spouse), and investment in an enterprise that the immigrant will manage as a primary occupation (more points for bigger investment).

The bill seems unlikely to go far, considering that it proposes to change the current immigration system so radically and would hurt so many interests. In my capacity as a citizen, however, I’m very interested in this bill and the conversation around it. When we talk about immigration policy, we go straight to core questions of national identity – who we are, what we value, what borders define us, and where we want to go as a country. I’m fascinated by the history of U.S. immigration law, and how the laws reflect and shaped our socioeconomic history and values. I’m also fascinated by data on U.S. immigration, and how dramatically the data picture differs from the Emma-Lazarus-colored impression that both advocates and critics seem to have of US immigration. It’s helpful to consider the history and the data when assessing this new immigration vision as proposed by Senator Cotton and endorsed by President Trump.

Listening Session (EB-5 regs), EB-5 as securities (Hui Feng), RC Audits, RC List Changes

EB-5 Immigrant Investor Program Engagement July 13

At the EB-5 listening session on July 13, the USCIS participants stuck to their resolve to listen only, and did not provide input or feedback. The call solicited stakeholder comments on the questions raised by the Advance Notice of Proposed Rule-Making, which addressed regional center designation and participation and exemplar project approval. The ANPRM inspired few written comments to its preliminary questions, and this call also got tepid response. What did USCIS want to know from us, beyond what those of us who care said already in our written comments? USCIS would not specify, and we weren’t sure what to say. The Wolfsdorf Rosenthal blog has diligently summarized stakeholder comments, and my recording is available for anyone who’s really interested. I hope USCIS learned something from the call, but I did not. People with more to say on the designated topics of RC life-cycle (designation, participation, termination), RC exemplar process, RC compliance audits, or indirect job creation methodologies may email ipostakaeholderengagement@uscis.dhs.gov.

USCIS let slip one bit of info. Lori MacKenzie said that “the agency is working to finalize that rule” — referring to the regulation that people care about, the NPRM dealing with investment amounts and TEAs. No indication of timeline, however, or whether the listening session call reflects intention to combine NPRM and ANPRM topics in one new rule. (On July 3, Senators Dean Heller, John Cornyn, Rand Paul, and Thom Tillis had sent DHS a letter asking that the agency not move forward with the proposed EB-5 regulations. The listening session indicates that DHS is indeed moving forward, however slowly.)

Here is my favorite listening session caller comment, from a Mr. Fuentes in minute 45: “We have a bottleneck of processing in an environment where resources are not the limit.” Yes – that’s exactly what’s wrong and fixable in EB-5. So many problems for EB-5 projects and investors result from the fact of long processing times, and long processing times are traceable to constraints that need not exist in a program of multi-million-dollar projects and high-net-worth immigrants. I’ll write more on this soon.

The call also reminded me that we need to talk more about direct EB-5, and the kinds of business and investment that are and are not workable in that environment. Purchasing an operational existing business rarely works for direct EB-5. The history of AAO denial decisions is thick with business acquisition cases that foundered on the “new commercial enterprise” requirement and/or the requirement to create new jobs. EB-5 rules specify that mere ownership change does not make an enterprise or jobs in that enterprise new. I have a couple related posts (one on the difference between direct and regional center EB-5, and one on options for investing in an existing business), but see the need for a simpler article addressed to entrepreneurs contemplating direct EB-5.

EB-5 and Securities Law

Immigration lawyers happen to be well-placed to match EB-5 investors to EB-5 projects, and are pressured by the market and tempted with commissions to play a match-making role. This role is perilous, however, considering securities laws. In 2015 and 2016, the SEC made examples of several immigration lawyers who had received transaction-based compensation for facilitating investments, and of one of the regional centers that paid such compensation. The message: it’s illegal to be on the giving or receiving end of payments to someone acting as a broker without appropriate license.

One of the law firms targeted by the SEC fought back. Hui Feng (subject of a complaint published in December 2015 by the SEC against himself and his firm Law Offices of Feng & Associates, P.C.) argued that the SEC’s claims fail because EB-5 investments are not securities and the immigration lawyer does not act as a “broker” when receiving finder fees. He pointed out that EB-5 investments are primarily motivated by the visa, without expectation of profit, that his commissions were contingent on visa approval rather than in connection with securities sale, and that the attorney role has its own fiduciary duties and that broker requirements are inapplicable – i.e. the EB-5 process and investment and lawyer’s role are fundamentally immigration matters, not securities matters and not the SEC’s business. (My layman’s paraphrase; see the court filings for the actual legal arguments.) The US District Court, Central District of California, however, has come down on the SEC’s side in its Motions for Summary Judgment (June 29, 2017). The decision has the longest discussion I’ve seen yet in support of the point that yes, EB-5 investments are securities. It also enumerates the activities supporting the conclusion that yes, this immigration lawyer acted as a broker, and explains why the fee arrangement details were material and should have been disclosed to investors and regional centers. If you pay or receive EB-5 finders fees, pay attention to this decision. You may also want to review IIUSA’s Best Practices for Engaging with Sales Intermediaries.

Regional Center Compliance Audits
The Regional Center Business Journal has a helpful article by Mariza McKee, Kimberly Hare, and Clete Samson “USCIS Compliance Audits – Preparing Regional Centers for the First Wave”

RC List Changes
USCIS continues to cull the list of approved regional centers, with 50 terminations so far this year. 2017 termination letters haven’t been published yet, but I’ll guess that most of these terminations are for lack of recent activity.

Additions to the USCIS Regional Center List, 6/26/2017 to 7/17/2017:

  • No new regional centers.

New Terminations:

  • North Country EB-5 Regional Center, LLC (New York) Terminated 7/7/2017
  • Guam Strategic Development LLC RC (Guam) Terminated 7/7/2017
  • Good Life EB5 Georgia Regional Center, LLC (Georgia) Terminated 6/30/2017
  • Tri-Cities Investment District, LLC (California) Terminated 6/30/2017
  • Prosperity Regional Center (former name U.S. Prosperity Regional Center) (Florida) Terminated 6/23/2017

Draft legislation, NYC lawsuit, SEC action, RC decision (Path America), RC list changes

New Policy (comments due)

Recall that Wednesday June 28 is the last day to submit comments responding to USCIS’s new policy language on redeployment I appreciate the AILA Comments on the Policy Manual, which explain where the policy goes wrong in imposing an “at risk” requirement after jobs have been created.

Analysis of Draft Legislation (IIUSA, NYU)

IIUSA issued a legislative update on June 22 that comments on draft bills from Senator Grassley/Leahy and Senator Cornyn. I appreciate IIUSA’s thoughtful analysis, and its difficult position when it comes to commenting on contentious issues. The Cornyn bill would make everyone in EB-5 happy by clarifying that investors only (not investors plus family members) should be counted toward the annual EB-5 visa quota. Its TEA proposals would create winners and confirm losers – the winners being projects in rural areas and on closed military bases (which would be incentivized with new visa set-asides) and the losers being projects in distressed high-unemployment urban areas (which would only get 13.5% discount from the standard investment amount). To be fair, the Cornyn proposal would make projects in distressed high-unemployment TEAs slightly more viable than they are currently, since 13.5% is better than 0% — the effective investment threshold differential if projects not in distressed areas can also get TEA designation. But overall the TEA proposal looks designed to support the status quo, with a large percentage of EB-5 investors going to projects in prosperous urban areas and closed military bases.

NYU Scholar-in-Residence Gary Friedland, Esq. and Professor Jeanne Calderon, Esq. have expanded their analysis of paths to TEA reform and other questions in the paper EB-5 Prescription for Reform: Legislation or Regulation? (Draft 6/19/17). The authors review perceived problems in the structure of TEA incentives, summarize proposed changes, and suggest that USCIS expedite reform by finalizing regulations, which could prompt the industry to unite in supporting comparatively moderate EB-5 legislation. The authors throw down a gauntlet by arguing that allocating 100% of job creation by an EB-5-funded project to EB-5 investors overstates the economic impact of EB-5 capital.  They clarify that they do not challenge USCIS’s job credit methodology, but only question citing USCIS job credit methodology as evidence of EB-5’s economic impact. This is a helpful distinction, but I don’t see reformers in Congress accepting it, or liking the idea that EB-5 investors might get credit in practice for job impacts not supported in theory. The industry needs to take up the gauntlet, and explain (preferably with reference to economic theory, practicality, and other programs that require job creation) why and how EB-5 job counts and allocations make sense.

NYC RC Investor Lawsuit

After receiving many error reports, USCIS pulled down their logs of EB-5 petition approvals and denials by regional center. I hope that the logs will be reposted soon with corrections, and in the meantime we can prepare to interpret the data. A natural conclusion could be: if X Regional Center has had many investor petitions approved, then it must be a reliable regional center with happy investors. Coincidentally, I heard in the same week that New York City Regional Center ranks #1 among regional centers for number of I-829 approvals and #5 for volume of I-526 approvals, and also that it is facing a lawsuit by over a hundred unhappy investors in the Battery Maritime Building project. Chen Dongwu et al. v. New York City Regional Center et al. claims that the investors’ “dream turned into a financial nightmare,” with fraudulent misrepresentations and subsequent coverups and fiduciary failures leading up to investors facing the loss of their entire investment.  Presumably the investors in this suit received I-526 approval, but USCIS adjudication is only part of EB-5 investment success.  I’ll look forward to seeing how New York City Regional Center responds to the allegations, which are a big story since this RC is such a big player in EB-5. At-risk investments inherently risk loss, and some will lose, and loss does not equal fraud. Risk does not equal license to shirk responsibility or deceive investors, however, and the defendants need to explain their side of the story. Future filings for the case can be accessed at the New York State Unified Court System website with Index Number 6520242017.

RC Termination Decision

The AAO decision Matter of P-A-K, LLC JUN092017_01K2610 denies motions to reconsider and reopen filed by Path America KingCo regional center.  This decision reiterates that termination decisions “take into account a variety of factors, both positive and negative, that encompass past, present, and likely future actions.” But having reviewed new evidence of the RC’s on-going projects, AAO apparently concludes — almost in so many words — that SEC action against a former principal for fraud and mismanagement is the kind of negative that cannot be outweighed by any number of positives in terms of current management and project progress and prospects. I trust that USCIS/AAO thinking will be challenged and will develop more nuance over time.

New SEC Action

Securities and Exchange Commission v. Seyed Taher Kameli, et al. is a new civil action involving a regional center. The Complaint filed June 22, 2017 alleges that Seyed Taher Kameli and his companies, Chicagoland Foreign Investment Group, LLC and American Enterprise Pioneers, Inc., falsely claimed to foreign investors that their investments would be used to fund an EB-5 qualifying project, but instead diverted millions of dollars to fund other projects, make unrelated payments, and for personal enrichment. As with other SEC actions on EB-5, conflicts of interest are the dominant red flag. The defendant Mr. Kameli controlled the regional center, investment funds, and job-creating enterprises, and also represented many investors as their immigration attorney. This kind of scenario should not be hard for future investors (or even legislators) to avoid.

RC List Changes

Additions to the USCIS Regional Center List, 6/6/2017 to 6/26/2017

  • Art District Los Angeles Regional Center, LLC (California) Note: This is not a new RC, but recently added back to the approved list after having been briefly listed as a termination

New Terminations

  • JI Northern Nevada Regional Center, LLC (Idaho, Nevada, Utah) Terminated 6/5/2017
  • Dream Harbor Regional Center (Washington) Terminated 6/1/2017
  • ON Regional Center, LLC (California) Terminated 6/16/2017
  • Northeast Monument Regional Center LLC (Massachusetts, New Hampshire, Rhode Island) Terminated 6/20/2017
  • Rock Hill Regional Center LLC (New York) Terminated 6/1/2017
  • Texas Mining & Resource Center, LLC (Texas) Terminated 6/20/2017
  • Adirondack Regional Center of New York, LLC (New York) Terminated 5/24/2017
  • Las Vegas EB-5 Inmigration, LLC (Nevada) Terminated 6/14/2017
  • CIG Regional Center, LLC (California) Terminated 6/5/2017

I continue to update my Terminations Log, though USCIS has not yet posted any new letters for terminations since 2016.

Tally of I-526 and I-829 approvals and denials by regional center (updated)

The USCIS Immigrant Investor Regional Centers page at www.uscis.gov/eb-5centers has been updated with links to documents that list regional center names and tally the  I-526 and I-829 approvals for each RC from January 1, 2014 to May 31, 2017.

UPDATE: The logs formerly posted by USCIS have been replaced by a brief message that “USCIS is reviewing inquiries regarding the previously posted Form I-526 and Form I-829 approval and denial statistics by regional center. To provide feedback on that data, please e-mail USCIS.ImmigrantInvestorProgram@uscis.dhs.gov.” Apparently, a lot of regional centers contacted them to complain of errors. IIUSA wrote a formal letter to IPO reporting discrepancies noted by many members.

[ORIGINAL POST]

These documents — if accurate — can be very valuable for potential investors, and for program integrity. Track record of approvals is a material factor in decision-making that, until now, has been unverifiable. Records can offer investors a way to double-check claims about past approvals for a regional center.

Potential investors should interpret the numbers judiciously. As USCIS notes in the documents: “petitions may be denied for various reasons, some of which may be based on investor specific issues and not related to any project issues.” A large number of denials may be related to investor problems or to sudden USCIS policy changes (or to document errors in these posted reports), not to any problems with the regional center. A large number of approvals says something about the size, aggressiveness, and age of a regional center, but does not necessarily promise quality or reliability or anything about the character of future projects or success of future petitions. Also, keep in mind that the numbers are only for petitions adjudicated, not petitions filed. Considering processing times, I-526 adjudications in 2014 to 2017 (the time period reported) largely reflect investments made in 2013 to 2015. Most investments made and petitions filed through RCs since late 2015 would not show up on this log of approvals and denials. And the log does not show any of the EB-5 petition approvals or denials prior to January 1, 2014.

Regional centers should double-check their records in these newly published logs, and follow the instructions in the docs to alert USCIS of errors. Whoever created this database of approvals and denials made a number of entry errors on RC names (resulting in some double or even triple listings from name variants), so the probability of numerical errors is also high. Especially if the published list shows denials that your RC doesn’t in fact have, hasten to report that and request correction!

The petition tally by regional center provides interesting data on regional center activity. We’ve known that a handful of regional centers have dominated the EB-5 field, and now that phenomenon can be quantified. Assuming that the numbers reported by USCIS are reliable, we can draw conclusions about the distribution of investors by regional center.

No wonder the interests of one metro area and a handful of regional center operators dominate EB-5 politics, when those interests claim such a large piece of the EB-5 pie. The USCIS database indicates that three regional center operators (US Immigration Fund, CMB, and Related) account for nearly a quarter of all I-526 petitions approved since 2014. New York City RC alone accounts for a fifth of all I-829 approvals during that time.  Over half of the approved I-526s petitions since 2014 went through just 21 regional centers, while nearly half of investors with I-829 approvals in that time went through just four regional centers. Meanwhile, over half the regional centers currently on the USCIS list of approved RCs did not have any approved investor petitions from 2014 to the present. (Though these RCs haven’t necessarily been inactive. Long processing times mean that approvals and denials through 2017 only reflect petitions filed/investments made through 2014/2015 — or earlier for I-829. An RC that doesn’t appear with many approvals or denials yet may have many petitions currently pending.)

New EB-5 Policy (Sustaining Investment, Redeployment, and Investors in a Terminated RC)–Updated

We’ve been waiting for years for USCIS to clarify its policy on sustaining investment, and when and how EB-5 capital may need to be redeployed if a project winds up before the investor reaches the I-829 stage. Today, we have this notification:

The USCIS Policy Manual has been updated to provide further guidance regarding the job creation and capital at risk requirements for Form I-526, Immigrant Petition by Alien Entrepreneur, and Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status. Volume 6 (Immigrants), Part G: Investors is effective on June 14, 2017. The Policy Alert is available here: Volume 6 (Immigrants), Part G: Investors (Final date for comments: June 28, 2017)

The Policy Alert from USCIS does not actually say what changed. I compared the the June 14, 2017 version of the Policy Manual with my hard copy of the previous November 2016 version, and highlighted the changes to the new file in red font. (Here is my folder with dated versions of 6 USCIS-PM G). The June 2017 changes — which are significant and touch on material change and termination issues as well as redeployment — are in Chapter 2(A)2, Chapter 4(C), Chapter 5(A)2, and Chapter 5(C).

UPDATES: I’ve copied the new Policy Manual language on redeployment into a separate document and added my attempt to analyze the language and understand the terms. Here is my work so far.

Here are reactions from others to the new policy:

The new policy is effective as of today, before anyone has had a chance to review or comment on it. Indeed, the policy is essentially retroactive since it defines new requirements for investment agreements that current investors may have signed years ago. But USCIS is offering an opportunity to comment, for what it’s worth at this point.

Please send all comments to publicengagementfeedback@uscis.dhs.gov and be sure to include the following to make your comments clear:

    • State the title of the relevant volume and section in the subject line of your message;
    • Refer to a specific portion of the document;
    • Explain the reason for any recommended change; and
    • Include data, information, or authority that supports the recommendation.

Opening & Closing Dates for Comments: June 14, 2017 – June 28, 2017

As background, here are some reactions to the draft policy memo from August 2015 on sustaining investment, and wish lists of features we wish had been included in the new policy.

New EB-5 Regulations: Comments Discussion

We’re waiting on the fate of draft EB-5 regulations published in the Federal Register in January 2017, with a public comment period that ended in April 2017. This post briefly reviews the proposed rules, considers the probability that they will be finalized any time soon, and distills insights from the 323 public comments that I’ve now read. The post is long because the topic is important. I expect EB-5 regulations to be finalized — in my lifetime, even — and the regulation comments include valuable contributions to the debate around EB5 program changes.

Content of Proposed Regulations

Future of Proposed Regulations

Final EB-5 regulations could take effect anywhere from 30 days from now (if a final rule were published today in the Federal Register) to never. (If you’re interested in how the process works, see A Guide to the Rulemaking Process prepared by the Office of the Federal Register.) Here are factors that I know of that could affect timing in this case.

  • DHS can be very slow. For example, the regulation dealing with EB-5 petitions approved 1995-1998 (RIN 1615-AA90) first appeared as a proposed rule in 2003, the Notice of Proposed Rulemaking was published in the October 2011 Federal Register, the public comment period closed in November 2011, and as of May 2017 the rule has not yet been finalized.
  • Most commenters on the NPRM reminded DHS that Congress has been working to deal with the very same issues through legislation, and that legislation should proceed regulations. Therefore regulations should be withdrawn or put on hold to allow Congress to act. Several speakers at the House Judiciary Committee Hearing on the NPRM supported the point that policy-making belongs to Congress, and it should act first.
  • On the other hand, no one at the House Hearing spoke in favor of cancelling the EB-5 regulations, even if they did come out under Obama, and four influential Congressmen behind EB-5 reform legislation (Goodlatte, Grassley, Conyers, and Leahy) collaborated to submit a comment on the NPRM strongly urging DHS to finalize it, at least with respect to minimum investment amounts. Senator Grassley personally encouraged DHS Secretary John Kelly in January to finalize the EB-5 regulations, and called on him again on May 11 to expedite the regulations. UPDATE: DHS Director nominee Lee Cissna committed on May 24 in his confirmation hearing to finalize EB-5 reform.
  • On May 8, the New York Times quoted a White House statement that the administration “is evaluating wholesale reform of the EB-5 program to ensure that the program is used as intended and that investment is being spread to all areas of the country.” Supporting drastic reform regulations could be a strategic move for President Trump: bombing the EB-5 program would conveniently show that he’s truly not in the pocket of any tangentially-related EB-5 promoters. On the other hand, the proposed regulations would inhibit job creation and impose excessive costs on business – points Trump has committed to avoid in regulations.
  • This Congress has so far officially introduced only one EB-5 bill, but we’ve seen a couple discussion drafts that might emerge as live legislative options.
  • The rule-making process requires DHS to review and respond to public comments. I took a long time just to read all the comments and write this post, and foresee that the final rule will be tough and time-consuming for DHS to write. If DHS takes the good feedback seriously, it will likely come up with another version that’s sufficiently different to justify a second posting and comment period.

Review of Public Comments

The 290 public comments on NPRM #0006 can be roughly divided as follows: brief personal pleas from EB-5 investors (61%), analysis and experience from EB-5 project people operating outside Tier I cities (14%), lengthy and sophisticated comments from the top few big-city regional centers and their surrogates (6%), brief comments on behalf of direct EB-5 projects (6%), feedback from immigration lawyers and other service providers (10%), rants about damn furriners (3%), and comments from Congress (0.3%). I summarize common themes in these groups, and then link to specific comments of interest.

Feedback from Congress

There is only one comment from Congress – a letter signed by Bob Goodlatte and John Conyers from the House and Charles Grassley and Patrick Leahy from the Senate – but I lead with this because it’s so significant and seems to have passed unremarked.  These Congressmen have spearheaded EB-5 reform legislation, and their comment reveals their good intentions and dangerous misunderstanding of how EB-5 works. They identify real problems but go very wrong in suggesting solutions.  We particularly need to respond to their counterproductive ideas about job creation and retroactivity. Clearly they haven’t realized that their suggestions would have the practical effect of gutting small, rural, and direct EB-5 projects while lining the pockets of mega-project developers with superfluous cash. (A post with more on this soon – and staffers if you’re reading this, please call me and I will explain.)  While most other public comments ask DHS to wait for Congress to act, these influential Congressmen “strongly urge” DHS to finalize EB-5 regulations, particularly with respect to minimum investment amounts, and also propose additional items that they’d like to see DHS address via regulation (visa set-asides for TEAS, limits on job creation, mandatory I-829 interviews, limits on regional center rental and sale, and limits on job counts).

Feedback from EB-5 Investors

The many comments from investors are generally short and sweet, bringing little data and evidence but a fair amount of appealing personal experience. The dominant message – repeated across most investor comments – is that EB-5 visa backlog problems need to be addressed before any other reforms can be meaningful. Investors from China express distress at finding themselves in a three-to-ten-year waiting line just to get conditional residence, depending on when they invested, and the many problems that flow from that – children aging out and separating families, the high risk of material change, the problem of asynchronous exit strategies, the difficulty of managing enterprises and overseeing investments from overseas, and so on.  Current investors don’t see the program remaining viable for new investment if the required minimum investment more than triples plus the backlog problems aren’t solved. Investors were also united in supporting (and suggesting ways to expand and strengthen) priority date protection, and opposing any retroactive application of new rules. Many proposed granting parole after I-526 filing, and allowing EB-5 investors who have waited more than two years since I-526 approval to file I-829 once a visa becomes available. The comments impressed me with the thought that EB-5 investors need an association that allows them to organize, collaborate, and advocate for their own interests. Past investors are important stakeholders, with distinct concerns and a strong interest in influencing debates around the future of the EB-5 program. But here they are represented by scattered 100-word comments with doubtful punctuation while regional center representatives present sharp 10,000-word essays bristling with footnotes. I see evidence of group coordination in some investor comments, and encourage people to contact me if they have any groups that they’d like publicized.

Feedback from Regional Centers and Project Developers

On the project side, nearly everyone opposes the DHS proposals regarding investment amount (a one-stage 180% increase to the standard investment amount and 270% increase to the TEA investment amount). Commenters argue that this abrupt and dramatic increase would quell demand, make the US investor visa program uncompetitive, reduce the total job creation and investment impact of the EB-5 program, be tough on small projects, and dampen the incentive to invest in a TEA. They make supply-demand arguments (suggesting that any inflation-based increase should be dated from 2008 or so when demand for the program took off, not from the 1990s when it was barely used), propose linking investment amount calculation to factors such as exchange value of the dollar and household income rather than merely considering the Consumer Price Index, encourage DHS to consider Congressional intent as expressed in recent proposed legislation, not just as expressed in 1992, point out the high risks that distinguish the US program from others, and advocate for a phased-in approach and protection for past investors and midstream offerings.

When it comes to Targeted Employment Areas definitions, and the incentive to invest in a TEA, big-city and small-city/rural regional centers part ways. Comments filed on behalf of the big urban regional centers advocate for large TEA areas based on commuting patterns (allowing for TEA projects located at a distance from where unemployed people live) and for a narrow differential between the TEA and non-TEA investment threshold (minimizing the TEA incentive). Comments filed on behalf of regional centers active outside of major cities were generally supportive of TEA changes proposed by the regulations (which would require TEA projects to locate in/very near high-employment areas) and advocate for a meaningful TEA incentive/investment differential. For example Related New York City Metro Regional Center suggests that TEAs should allow for unlimited combinations of areas within an MSA (and with no requirement that the constituent areas be contiguous), and that TEA investment should be only $50,000 cheaper than non-TEA investment. By contrast, Pine State Regional Center (Arkansas, Missouri, Tennessee) supports restricting TEA definitions and significantly incentivizing TEA investment (for example taking the $800,000/$1.2M investment levels proposed last year in legislation, which would be a $400,000 differential).  The two points of view were approximately balanced in comments on the regulations (with more voices on the small/rural side and stronger voices on the large urban side), though I note that the big players are winning lobbying (each successive draft of proposed legislation has progressively bargained down the investment differential/incentive to invest in a TEA).

Nearly every commenter (except for a couple thinkers who have never experienced USCIS processing) agrees that DHS absolutely must not enter the business of issuing case-by-case TEA determinations. USCIS designations would be needless assuming that TEA requirements are clarified and codified, senseless considering USCIS’s (lack of) expertise, and disastrous considering USCIS’s existing workload and processing times. These arguments were made very strongly, many times. If the final rule persists in assigning TEA designation to USCIS rather than creating an automated process or giving unambiguous guidelines to state agencies, then we’ll know that DHS just didn’t read the comments. I hope that Congressional staffers working on EB-5 would read these comments as well, for the case against individualized TEA designation by USCIS is extremely clear and compelling.

Many of the EB-5 industry commenters joined investors in arguing for I-526 priority date protection, for measures that would ease the visa backlog by not counting derivatives or recapturing unused visas, for protecting investors who already filed under old rules, and for palliative measures in light of the backlog such as parole after I-526 approval and age-out protection and priority date protection.

The ANPRM #0008, being a just preliminary notice, got little attention and feedback – sadly, because it did ask important questions. Comments that were submitted particularly focused on the proposal to require exemplar approval prior to I-526 filing (granting that this is a good idea only if the processing time can be short, and unworkable otherwise).

A sampling of noteworthy comments

The public comments are useful to help understand what DHS sees as it prepares a final rule, and also as a source for ideas worth discussing and support for arguments that you may want to make yourself. I’ve assembled a short list of comments that make particularly interesting or characteristic points, or that make points in a particularly effective way, with compelling language and evidence.

  • The case for TEA rules that don’t disadvantage urban projects: Jeffrey Carr (gives rationale for TEAs based on commuting patterns, unlimited areas within MSAs, census block groups, and NMTC criteria), EB-5 Investment Coalition (proposes a “9-Step Process” to designate areas that include “Residence Tracts” linked to “Workplace Tracts”), Angelique Brunner and David Morris (propose expanding provision to encompass existing government-designated economic development zones).
  • The case for TEA rules that significantly incentivize projects outside prosperous urban areas: Urban Manufacturing Alliance and  Mount Snow (for distressed urban and rural areas), Invest Atlanta (economic development agency perspective), Gary Friedland (considering the purpose to stimulate investment in undercapitalized areas), IIUSA (for fairness to a broad base of EB-5 users)
  • The case for a different approach to calculating EB-5 investment amount increases: Auray Capital (considers data on currency exchange rates, competitor programs, market threats, and the population of potential investors), Jim Nail, AISA (points out why an inflation-correction approach, if used, should calculate from the TEA investment amount), Centurion American Development (consider investment risk and return, and costs to the regional center), Suman Guduru (too high would discourage startups and entrepreneurs), Deputy Mayor of Columbus, Indiana (too high would discourage investment in small cities),  Alexandre Carvalho (too high would discourage investors).
  • The case against delegating TEA designation to USCIS: Nearly every comment, but for example Elliot Winer and Kimberly Atteberry (technical reasons); Stetson Law and Chanticleer Holdings (positive benefits of state involvement)
  • The case for broadening I-526 priority date protections: Green and Spiegel and AILA and Penny Zhang (for priority date protection not only contingent on I-526 approval),  Meisheng King (for the option of assigning priority date to children), Golden Southern Chicken (priority date protection would allow for better business decisions), Fei Zhiqiang (priority date protection would free investors to act on suspicions of malfeasance)
  • The case against priority date protections: US Chamber of Commerce (could encourage investors to abandon projects that no longer qualify as TEAs), Pacific ProPartners (would further swell the visa waiting line and undermine forecasts)
  • The case for taking EB-5 visa backlog problems seriously: ZeMing Gao and Shiting Yi  (and for those unfamiliar with the backlog problems, here’s my blog post with as much as I know)
  • The case that DHS has and should use the power to modify EB-5 visa availability: EB-5 Investment Coalition (the arguments for eliminating derivatives from the visa count and recapturing unused visas)
  • The case for and against making EB-5 program changes retroactive: Goodlatte/Grassley/Conyers/Leahy (for retroactive application), Fragomen (against). Industry response would have been stronger had we realized retroactivity could even be on the table for regulations. I will write more in response to the comment from Congress, and hope others will as well. Many investor comments speak against retroactivity, but without marshaling sources and evidence.
  • The case for a revised material change policy: American Immigration Lawyers Association (EB-5 material change policy as currently stated can make an EB-5 petition un-approvable even though it was eligible at the time of filing and remains eligible after an interim material change. AILA digs into the law and proposes a more appropriate material change rule that would only focus on changes that involve EB-5 credibility requirements, and only on changes that make a petition ineligible. The argument seems sensible and could solve severe current problems in EB-5 adjudication. I hope more people read, discuss, and promote it.)
  • The case against requiring exemplar approval without a strictly-controlled processing time: Suzanne Lazicki (explaining the process and timing issues), Jillian O-Brien (providing examples). It’s so important for USCIS to understand the practical difference between a requirement to file and a requirement to file plus wait for approval.
  • Thoughts on designation, monitoring, and oversight requirements for regional centers: EB5 Securities Roundtable and Citizen for Responsible Regulation

RC reauthorization to 9/30/2017, Trump statements on reform

The regional center program is now authorized, as part of fiscal year 2017 Appropriations legislation, through September 30, 2017. Updates as they happened:

  • 5/8/2017: In the wake of RC program reauthorization and the flap over an EB-5 project being promoted by the Kushner Companies, the White House has started issuing more EB-5 statements, which I’m collecting in this document.
  • 5/5/2017: President Trump has signed the omnibus appropriations bill H.R. 244 – Senate Amendments to HIRE Vets Act [Consolidated Appropriations Act, 2017]. The text still includes clean extension of the regional center program to September 30, 2017 (Title III, Section 542).
  • 5/1/2017: House Appropriations Committee press release: Comprehensive Government Funding Bill Released. The bill text includes this magic sentence on page 734: “SEC. 542. 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 ‘‘September 30, 2017’’ for ‘‘September 30, 2015’’. If passed, this will give simple extension of the Regional Center program authorization for the reminder of the fiscal year, with no other EB-5 program changes. (Section 610(b) of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (Public Law 102-395) established the regional center program, page 47.)  Even assuming the bill will pass as-is, this is not time to relax. Congress could still come out with new independent EB-5 legislation at any time — nothing says they have to wait til the last reauthorization minute to act. Senator Cornyn’s office circulated a new discussion draft of EB-5 legislation just this morning. I’ve entered summary details in my bill comparison chart,   and will add link to the full text as soon as someone posts the draft publicly.
  • 4/28/2017: H.J.Res. 99 – Joint Resolution making further continuing appropriations for fiscal year 2017, and for other purposes has been passed and signed into law, extending government funding and other provisions of Public Law 114–223 (including the regional center program) to May 5, 2017.
  • 4/27/2017: For the first time, I’ve noticed a statement from the Trump administration on EB-5. Washington Post says,
      • The White House issued a statement to The Washington Post this week saying that the Trump administration is weighing changes to the foreign investor visa program. “There are serious concerns held by the administration regarding the EB-5 visa program, in part because it is not being used as it was primarily intended,” said Michael Short, a White House spokesman. “The administration is continuing to evaluate reforms to the program, which we believe is in need of substantial repair.”

    (Update: additional statements linked above at the 5/8/2017 bullet point.)

  • 4/26/2017: House Appropriations Committee Press Release: “House Appropriations Chairman Rodney Frelinghuysen today introduced a short-term Continuing Resolution (CR) (H.J.Res. 99) to continue funding for federal programs and services until May 5, 2017. …The legislation continues policy and funding provisions included in currently enacted fiscal year 2016 Appropriations legislation.” Here is the text of the CR. It’s set for vote on 4/28.

As a reminder, the history of recent regional center program reauthorizations:

  • 12/10/2016 – RC program is extended unchanged to 04/28/2017 as part of a continuing appropriations act (PL 114-254)
  • 9/29/2016 – RC program is extended unchanged to 12/09/2016 as part of a continuing appropriations act (PL 114-223)
  • 12/8/2015 – RC program is extended unchanged to 9/30/2016 as part of an appropriations act (PL 114-113)
  • 9/30/2015 – RC program is extended unchanged to 12/11/2015 as part of a continuing appropriations act (PL 114-53)
  • 9/28/2012 – RC program is extended (with one small change) to 9/30/2015 as part of immigration-related legislation (PL 112-176)

I-924 Webinar, Amendment Requirements

In case anyone would like to review it, here is a link to my audio recording and copies of the slides from today’s webinar on the revised Form I-924 Application for Regional Center Designation. (6/2017 UPDATE:You can now get the sound and slides together, as USCIS has posted a recording of the webinar.) The big news was a comment that the page for the March 3, 2017 EB-5 stakeholder meeting now contains remarks from Lori MacKenzie modifying what she had said at the meeting about geographic area amendments. My original blog post complained about this buried new policy posting, but shortly thereafter USCIS sent out a stakeholder email and posted a statement prominently on the EB-5 section of the USCIS website.

Update to EB-5 National Stakeholder Engagement Remarks: Regional Center Geographic Area Amendments and Form I- 526 Petition Eligibility
On March 3, 2017, USCIS held an EB-5 national stakeholder engagement.  This national engagement was part of our ongoing effort to enhance dialogue with our stakeholders in the EB-5 program.  Remarks from the EB-5 national stakeholder engagement are available here.

At the engagement, USCIS noted that a May 2013 policy memo had previously provided guidance that a formal amendment was not required to expand a regional center’s geographic area, and permitted concurrent filing Form I-526, Immigrant Petition by Alien Entrepreneur prior to approval of the geographic scope amendment.  The May 2013 guidance was superseded by the recent publication of the final  Form I-924 ,the Application for Regional Center Designation Under the Immigrant Investor Program and instructions.  The I-924 revisions included changes to the Form I-924 instructions and require that regional centers file a Form I-924 when seeking an expansion of their geographic area.  The revised Form I-924 became effective on December 23, 2016, following publication of the revisions in draft form in the Federal Register in May of 2016, and a period during which the public had the opportunity to comment.

During the engagement, USCIS addressed questions regarding how requests to change a regional center’s geographic area should be filed and the timing of such a filing.  Specifically, where a regional center has a filed and pending Form I-924 amendment requesting an expansion in geographic area, stakeholders  asked whether or not Form I-526 petitions may be filed prior to approval of the I-924 amendment, relying on such proposed expanded geography.  USCIS has reviewed stakeholder concerns raised during the engagement and has updated the engagement remarks to clarify how the agency is implementing the above policy. Specifically:

  • Where the regional center’s geographic area expansion request was submitted either through a Form I-924 amendment or Form I-526 petition filed prior to February 22, 2017 (the date on which use of the new Form I-924 became mandatory), and the request is ultimately approved, USCIS will continue to adjudicate additional Form I-526 petitions associated with investments in that area under the guidance reflected in the May 30, 2013 policy memo.
  • Any requests for geographic area expansion made on or after February 22, 2017 will be adjudicated under the current guidance; namely, a Form I-924 amendment must be filed, and approved, to expand the regional center’s geographic area.
  • For geographic area expansion requests made on or after February 22, 2017, the Form I-924 amendment must be approved before an I-526 petitioner may demonstrate eligibility at the time of filing his or her petition based on an investment in the expanded area. Form I-526 petitioners who believe they may be unable to demonstrate eligibility at the time of filing on this basis may wish to contact USCIS at ipostakeholderengagement@uscis.dhs.gov.

Sincerely,
USCIS Public Engagement

And here, since the I-924 Form and Instructions are apparently our new venue for policy guidance, is the official word on amendment requirements.

Quoted from the I-924 Instructions (version expiring 12/31/2018), page 1
Request an amendment to a previously approved regional center.
A. You must file an amendment to:
(1) Seek approval for any changes to the regional center’s name, ownership, or organizational structure, or any changes to the regional center’s administration that affect its oversight and reporting responsibilities, or to add or remove any of the regional center’s principals, immediately following the changed circumstances; or
(2) Change the geographic area of a regional center.
B. You may also file an amendment to:
(1) Change the industries of focus of the regional center;
(2) Add a new commercial enterprise associated with the regional center and/or seek a preliminary determination of EB-5 compliance for an exemplar Form I-526, Immigrant Petition by Entrepreneur, for that new commercial enterprise, before individual entrepreneurs file their petitions; or
(3) Notify USCIS of changes in the name, organizational structure or administration, capital investment instruments, or offering memoranda (including changes in the economic analysis and underlying business plan used to estimate job creation) for a previously added new commercial enterprise associated with the regional center.
NOTE: An I-924 amendment is not required to report changes of address, contact information, a change of duties among the regional center principals, changes to non-principal managing companies, contracting agents or similar changes, or information described in Item 2.B. above. The regional center must notify USCIS within 30 days of such changes. Notification of these changes can be made by sending an email to the EB-5 Program mailbox at: USCIS.ImmigrantInvestorProgram@dhs.gov. USCIS will review any changes submitted by email and may require or recommend, as appropriate, the regional center to file an I-924 Amendment.

“You must file an amendment to seek approval for….” sounds like it could be discretionary (i.e. you needn’t file an amendment if you’re not seeking approval for…), but apparently it isn’t. (Previously, IPO said that I-924 amendment was recommended to seek approval for management changes, with an option to just notify the IPO email box. No longer.) Today’s webinar slides restated the I-924 instructions as “You must file an amendment in case of…,” and the presenter said that the required amendment must not only be filed but also approved. (But approved “before what”? This point doesn’t go without saying. Before I-526s are filed? Before I-526s can be approved? Before the regional center can take any action at all? IPO needs to clarify the “before what” for each required type of amendment, and whether the requirement is to file or file plus wait for approval.)
Otherwise, today’s webinar mainly just read through the new Form I-924 content, pointing out changes for the benefit of people who hadn’t previously noted just how much the form changed, or implications of those changes. The audience asked few questions. USCIS emphasized two concerns behind Form I-924 revisions: vetting regional center principals and managers, and limiting geographic area. The revisions take effective steps toward the first objective, but make little difference to the second. Geographic area requests are limited only by imagination and chutzpah so long as USCIS continues to allow and even encourage applicants to base their requests on hypothetical/fictitious projects.

Goodlatte statement; IIUSA TEA Analysis

Two important new press releases:

  1. House Judiciary Committee Chairman Bob Goodlatte announces on behalf of House and Senate Judiciary Committee members that “Lawmakers Remain Committed to Good-Faith Talks to Reform Investor Visa Program Ahead of Expiration” (April 19, 2017)
  2. IIUSA announces First-Ever Comparative Analysis Report on EB-5 TEA Policy Reform (April 20, 2017). This very valuable report and mapping tool  takes a comprehensive look at the impact the different TEA policy proposals would have on the EB-5 Regional Center program at both a national and state-by-state level. For those of you who downloaded my TEA summary earlier, note that I erred in providing a link to an NMTC mapping tool based on old data. You should look instead at the IIUSA interactive mapping tool, which uses the dataset that would actually be required to determine TEA qualification under new proposals.

Meanwhile, a 4/19 post by Miller Mayer reports on a version of EB-5 reform legislation that I haven’t even seen, though Miller Mayer says “all major EB-5 industry representatives have agreed to this tentative compromise.”

Washington Updates (new draft bill), New Form I-526, RC list updates

Washington Updates
It’s still not clear what will happen in the next couple weeks before the next regional center program sunset date on April 28, and whether we’re likely to see EB-5 program changes first from legislation or from new regulations. In an advocacy update sent to members last week, IIUSA noted that the appropriations package to fund the government past April 28 is likely to be larger than a continuing resolution. Thus it could be a vehicle for EB-5 legislative reform, were any reform proposals ready. Right now there are three active bills – two that would terminate EB-5 entirely, and Rand Paul’s rosy wish list of improvements. Yesterday EB-5 Insights reported that the Senate Legislative Council is circulating another staff discussion draft of EB-5 reform legislation, and speculates that the RC program may get a short-term extension of a few weeks (with government funding) while Congress works out other appropriations details. I’ve added the staff draft dated 4/15/2017 to my Bill Comparison Table and updated my TEA Incentive Summary for reference. (5/11/2017 update: I’ve now revised the TEA Incentive Summary.) The new draft is basically the same document (with a few changes) as the 12/2/2016 staff discussion draft, which in turn was based on the Goodlatte/Conyers legislation from 09/2016. We shall see whether it goes anywhere this time around.

New Form I-526
There’s a new edition of the Form I-526, which everyone must use starting June 9, 2017. Wolfsdorf Rosenthal and EB-5 Insights discuss what’s new in this version of the form.

Petition Processing
The new IPO processing times report does not look good, with the “processing petitions as of date” date having regressed for every category (back almost a week for I-829, back nearly 3 weeks for I-526, and back nearly 5 weeks for I-924). If you’re new to this blog, here’s a link to a post with everything I know about interpreting processing time reports.
Also, a sharp-eyed reader pointed out to me that the number of pending I-526 petitions that USCIS reports every year does not, as one would expect, equal the number of pending petitions at previous year-end plus current-year receipts minus current-year approvals and denials. (The quarterly numbers don’t add up either.) Anyone know why this is so? If not, I’m submitting a question for the next stakeholder meeting.

Regional Center List Changes
Additions to the USCIS Regional Center List, 04/03/2017 to 04/17/2017

  • Atlas Regional Center, LLC (California)
  • Hawaiian Palms Regional Center (Hawaii)
  • Hope Investment Regional Center (California)
  • Washington Free Life (Washington)

New Terminations

  • Leaf Fischer Investment Group, LLC (Florida) Terminated 3/6/2017
  • Idaho Global Investment Center, LLC (Idaho) Terminated 3/6/2017
  • FreeMind Films Regional Center (California) Terminated 3/15/2017
  • Green Card Gateway Regional Center (Illinois) Terminated 3/30/2017
  • Florida Gateway Regional Center, LLC (Florida) Terminated 4/12/2017

Preventing fraud in EB-5 (CIIF investigation)

In his testimony before the House Judiciary Committee in February 2016, Investor Program Office Chief Nicholas Colucci discussed how much USCIS has done to improve its administration of the EB-5 program, with particular focus on adding resources to prevent the kind of fraud and abuse that can come with investment and immigration.

Over the past few years, USCIS has taken a number of steps to improve the administration of the EB-5 program. In 2013, USCIS realigned the EB-5 program into the Immigrant Investor Program Office, and relocated it from USCIS’ California Service Center, which adjudicates various immigration benefits, to Washington, D.C., with a Chief dedicated exclusively to EB-5 adjudications. As the United States Government Accountability Office (GAO) noted in its August 2015 report to Congressional requesters on the EB-5 program, this move was part of a restructuring to help USCIS better detect fraud. USCIS also created a Fraud Detection and National Security EB-5 Division (FDNS EB-5) and embedded its personnel within IPO to work alongside adjudications officers. Additionally, a dedicated team of attorneys from the USCIS Office of Chief Counsel advise on program-related legal matters. In staffing the IPO, USCIS has, and continues to invest in the specialties needed to manage the complex EB-5 caseload by hiring staff with expertise in economics, law, business, finance, securities and banking to review cases and to enhance consistency, timeliness, and integrity within the program….
USCIS has taken its responsibility to administer the EB-5 program very earnestly, through its specialized staffing devoted solely to this program and its extensive efforts to regulate the quickly growing regional center program. However, no agency can do this alone. The EB-5 program necessitates collaboration with several other agencies, and the establishment of IPO in Washington, D.C. allows USCIS to work closely with partners such as the U.S. Securities and Exchange Commission (SEC), with whom IPO shares a robust collaborative relationship. USCIS also works closely with its sister agency, U.S. Immigration and Customs Enforcement (ICE), as well as with the Federal Bureau of Investigation (FBI) and the U.S. Department of State, in support of our oversight of the EB-5 program.

Improvements have covered staffing, inter-agency collaborations, and improved processes for important functions such as vetting lawful source of investor funds (as further explained in follow-up testimony — see especially Question 15 in response to Senator Grassley and Question 5 in response to Dianne Feinstein.)

This week’s breaking news story Feds raid San Gabriel, Arcadia locations over visa-fraud scheme involving criminals on China’s most-wanted list reminds us why those improvements were so important. The case, as described in an Application for Search Warrant filed by an FBI investigator, indicates that USCIS approved I-526 petitions from 2009 to 2012 that (if FBI evidence is correct) should never have been approved — including cases that involved people who did not invest their own funds, people who were promptly refunded their investments, and three individuals listed on China’s most wanted list for financial crimes. The good news is that the net since 2013 seems to be holding. The warrant does not indicate that any investors named in the investigation have been able to to get permanent green cards (though several have had I-829 petitions on file since 2012, possibly pending this FBI investigation which seems to have started in 2013), and the post-2013 I-526 petitions discussed in the warrant are likewise pending. The investigation stands as evidence that people may try to get away with fraud and abuse — but not that they get away with it. Investors who may have been complicit have not successfully completed the immigration process, and the regional center principals have had the FBI at their heels (sometimes literally: “at approximately 11:13 a.m., observed TAT exit SUBJECT PREMISES #2’s front door and walk across the street, after which he talked to a gardener, and then returned and entered SP#2. At 11:45 a.m. observed TAT exit SP#2 and go to the mailbox in front of the residence and retrieve mail. At 12:13 p.m. observed TAT walking from SP#2 carrying a black-colored briefcase-sized soft bag in his hands. TAT then walked across the street.”) and are now facing formal fraud investigation. Dozens of good faith investors in CIIF offerings and anyone with CIIF who’s innocent of fraud are unfortunate collateral damage, and I wish for their sake that the FBI had worked more quickly. (Update: Some investors have filed suit in civil court to try to get their money back, and Federal Prosecutors have filed civil complaints seeking asset forfeiture.)

Washington updates, articles, RC list updates

Washington Updates

  • Legislation: Another piece of EB-5 legislation has been thrown into the ring – this one from Rand Paul: S.727 Invest in Our Communities Act. Dianne Feinstein made an extreme bargaining statement with S.232, which threatens to eliminate the EB-5 program entirely, and Rand Paul’s bill takes the opposite pole – offering to make the regional center program permanent with more visas for everyone, better processing times, more investor protections, reasonably limited integrity measures, and no changes to the investment amount or Targeted Employment Area incentive. I’ve entered S.727 in my bill comparison chart, but I guess it lacks sufficient compromise to gain traction (and the similar S.2122 from Mr. Paul in 2015 didn’t go anywhere) . I can’t guess what will happen between now and April 28, but am following what The Hill has to say about prospects for a continuing resolution or omnibus spending bill. UPDATE: An April 6, 2017 letter from Senators/Representatives Grassley, Leahy, Conyers, Goodlatte, and Feinstein encourages Congressional leadership not to extend the RC program on April 28 unless accompanied by reforms. (Then why don’t any of these people introduce reform legislation??)
  • Regulations: Recall the April 11 deadline if you want to comment on USCIS proposed EB-5 regulations USCIS 2016-0006 and USCIS-2016-0008. So far, 0006 (with proposed TEA and investment amount changes) has 54 comments and 0008 (the advance notice requesting feedback on regional center designation issues) just 11 comments.

Other Resources

  • Wolfsdorf Rosenthal and EB-5 Insights have posts about a new kind of source of funds RFE that requests SOF evidence for people transfering funds on behalf of an EB-5 investor.
  • Carolyn Lee of Miller Mayer discusses the newly-unveiled regional center compliance audit program.
  • A journalist called to ask me for the story behind the surge of regional center terminations in 2015 and 2016. In case anyone else is interested in this topic, here are the sources I sent him.

RC List
Additions to the USCIS Regional Center List, 03/01/2017 to 04/03/2017:

  • Coastline Regional Center (Washington)
  • Extell Utah Regional Center (Utah): eb5extell.com
  • Mainsail Florida Regional Center (Florida)

Removed from the list of terminated RCs, and restored to the list of approved RCs:

  • South Dakota International Business Institute (SDIBI) (South Dakota)

New Terminations:

  • San Gabriel Valley Regional Center (California) Terminated 3/15/2017
  • Washington Center for Foreign Investment, LLC (Maryland) Terminated 3/28/2017

By the way I work hard to keep my blog Regional Center List complete and consistent with information from USCIS, but the task is not easy and I welcome regional centers to correct my information.

3/8 House EB-5 Hearing (TEA & Investment Amounts)

Today’s House Judiciary Committee hearing on The Department of Homeland Security’s Proposed Regulations Reforming the Investor Visa Program focused on changes to the EB-5 investment amount and TEA incentive proposed by USCIS in its Notice of Proposed Rule-making EB-5 Investor Program Modernization (DHS Docket No. USCIS 2016-0006).

The hearing opened with statements from the Congressmen responsible for two of last year’s reform bills – Senators Grassley and Leahy, and Representatives Goodlatte and Conyers. All four expressed support for USCIS’s proposed EB-5 regulations, though Leahy and Conyers also argued that there’s no substitute for a legislative solution. Leahy said that he and Grassley will soon reintroduce their reform legislation (an interesting development); Goodlatte and Conyers did not say anything about sponsoring legislation. All four made almost the same points as in last year’s House and Senate hearings, but sounded a darker note this year – turning “mend it or end it” from a question into a threat. Representatives Sensenbrenner and Lofgren followed with relatively positive statements, listing EB-5 successes and contributions, but both agreed on the need for modernization (higher investment amounts) and reform (TEA adjustments). The Committee then heard testimony from and questioned a panel including the GAO (recapping its Sept. 2016 study on TEA use in EB-5), regional center operators (ably represented by Angelique Brunner and Sam Walls III), an organization that specializes in property revitalization and blight prevention, and an anti-immigration activist. Oddly, USCIS was not represented. (Speaking of which, Colucci’s reponses for the record from last year’s Senate hearing are worth reviewing.)

I don’t have time report on all the details (you can watch the video and read the testimony), but conclude with a few general impressions. Not one of the Representatives who spoke opined that EB-5 is just fine the way it is – all expressed at least one concern, and sounded ready to support mending (if not ending) the RC program.Likewise, no one on the Committee side advocated for canceling the proposed Obama-era regulations – the only question was whether Congress should take back the policy-making ball and act first.  I heard little sympathy for the industry position that USCIS’s proposed investment amounts are too high and its proposed TEA incentive too restrictive. (Lofgren (D-CA) and Nadler (D-NY) spoke out for qualifications considering the urban context and investor demand, Goodlatte noted that he’d been willing to accept less drastic proposals, and Brunner advocated for market-based alternatives.) Goodlatte and Lofgren both raised the specter of retroactivity, which they didn’t call “changing the rules of the game midstream and thus derailing thousands of good-faith investors and projects and job creation” but rather “implementing reform now, instead of postponing it 7-8 years until the backlog is through the system (while not blaming ourselves for the legislative lollygagging that spurred the surges/backlogs)” Even David North was taken aback by the suggestion that Congress could impose a retroactive new investment amount, but apparently Mr. Goodlatte still hasn’t been shown how disastrous and counterproductive such a move would be.  What are you doing, industry advocates, besides earning a bad reputation for obstruction?  This hearing also suggested that Congress isn’t being informed about direct EB-5, and hasn’t considered the impact of investment amount, TEA, and job allocation changes outside the regional center context. Generally, I came away from the hearing with a sense that the House Judiciary Committee agrees about the need for some EB-5 program changes, recognizes program benefits but is more angry than before about flaws, and has progressed little since last year toward refining or agreeing about specific proposals for change.  (However a lobbyist speaking to The Real Deal pointed out that the hearing was not well attended by Judiciary Committee members, so the views expressed may not be representative.) There’s reportedly EB-5 reform legislation cooking behind the scenes, but we didn’t get any preview at this hearing, and the clock to the next regional center program sunset date on April 28 is ticking loudly.

S.232 Update, SEC & Attorneys, RC list changes

S.232 Update
Senator Feinstein and Senator Grassley have finally published text for and issued a joint press release on the long-shot S.232 – A bill to terminate the EB-5 Visa Program. The statement from Senator Grassley clarifies what this piece of legislation is really about: “For years, I’ve worked with bipartisan colleagues in good faith to reform it. Unfortunately, despite its many flaws, EB-5 proponents are apparently content with the status quo, and that’s unacceptable. I was hoping that it would not come to this point, but absent serious efforts to bring about reforms, we need to take the necessary steps to wind down the program and completely mitigate fraud, abuse and threats to our security.” S.232 expresses frustration at the progress of EB-5 legislation and makes a hardball negotiating statement: “if you don’t respond to my concerns, here’s what could happen.” The proposal to eliminate EB-5 entirely must be too drastic to gain much support or pass into law, but we should still take the frustration seriously. I can understand why EB-5 industry advocates in Washington DC would settle on a “protect the status quo” platform, that being the path of least resistance to industry consensus, but we cannot afford a reputation for being unserious about reform. We should address each of the concerns that Feinstein and Grassley raise in their press release. We can clarify points that are factually wrong (EB-5 is not green card sale and does not avoid waiting lines, as Feinstein assumes), respond constructively to valid concerns (for example support effective protections in response to past instances of fraud, address questions raised by GAO and Commerce studies on job counts), and have the leadership to offer some considered concessions on the fundamentally divisive issues (such how the targeted employment area incentive should be used, what investment amounts should be). We must not leave oxygen for S.232, or give it excuse to become anything more than a negotiating threat.

SEC Issues for Attorneys
IIUSA has reposted 10 Observations from Reviewing Evidence in an SEC Civil Enforcement Action, an article with good advice for attorneys based on the author’s review of documentary evidence in a civil enforcement action brought by the SEC against an attorney for taking commissions as an unregistered broker-dealer.

RC List Changes
Additions to the USCIS Regional Center List, 12/06/2016 to 02/04/2017

  • Health and Welfare EB-5 Regional Center, LLC (New Jersey, Pennsylvania)

Additions to the list of Terminated Regional Centers:

  • Medical Investment in Texas Regional Center (Texas) Terminated 1/23/2017
  • Pacific Proton Therapy Regional Center, LLC (California) Terminated 1/26/2017

Regulations freeze, SEC action (San Francisco), RC List Changes

Progress of Proposed Regulations
As EB-5 stakeholders process proposed new EB-5 regulations, they are thinking (1) how can I dissuade USCIS from the changes that would be most harmful for me personally; (2) how can I take best advantage of this golden opportunity to explain to USCIS how EB-5 works in the real world; and (3) how early could the proposed regulations become final, effective regulations? We know at least that regulations can’t proceed to the next step until after the public comment period closes on April 11, 2017, and now the new administration has put another hurdle in the road.

President Trump’s first Presidential Memorandum is addressed to the Heads of Executive Departments and Agencies with the subject Regulatory Freeze Pending Review (January 20, 2017). It does not put a moratorium on new federal regulations, but does require that any new or pending regulations be presented for review and approval of a Trump-appointed agency head before proceeding any further. This means that proposed new EB-5 regulations will need to go before General John Kelley, the newly-confirmed Secretary of Homeland Security. Would General Kelley allow new EB-5 regulations to move forward? The tireless Senator Grassley met with General Kelley on January 13, and reported that “In addition, we talked about new proposed regulations published by the Department today that would go a long way to restoring the EB-5 immigrant visa program to the way Congress intended it to be used: to help bring much-needed jobs and capital to rural and economically distressed areas. I [Grassley] expressed my strong desire that these rules be kept in place and allowed to go forward to ensure that this program fulfills its original intent.” I don’t know what input General Kelley may get from other directions, or whether the flood of lobbying dollars out of New York will have an impact. IIUSA indicates that its official comment submission to DHS will seek to demonstrate the negative effects that proposed changes would have on the industry.

New SEC Action
People drafting new EB-5 regulations and legislation are motivated, in part, to implement reforms that can help preempt the kind of situations that end in SEC action. When cases appear, we have a post-mortem opportunity to consider: what went wrong here, and how might problems have been prevented or at least detected earlier? Last week the SEC published a complaint against San Francisco Regional Center, Thomas Henderson, and related parties. This case has the usual allegations (commingling, misuse, and misappropriation of funds), but offers a relatively challenging “what-if” analysis. The regional center’s website and offering documents (as quoted in the suit) appear to make all the right representations about account transparency; it just happens that the RC apparently didn’t follow through on these representations, and a third-party co-owner with apparently every right and motivation to monitor proper use of funds had to resort to a lawsuit to claim his right to oversight and eventually apply the breaks. Retrospective armchair due diligence isn’t as easy for this case as for some others. I wonder – what different policy or different industry practices could have contributed to improved policing in this situation?

Regional Center List Changes
Additions to the USCIS Regional Center List, 11/29/2016 to 12/06/2016.

  • Advantage America Seattle Regional Center (Washington): www.aaeb5.com
  • CP Northern Regional Center (Michigan, Wisconsin)
  • California Agricultural Greenhouse Regional Center, LLC (California)
  • California Bond Finance Regional Center, LLC (California)
  • Greystone EB5 Northeast RC, LLC (Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia): www.greystoneeb5.com
  • QueensFort Capital Texas Regional Center, LLC (Texas): queensforteb5.com
  • Texas Crown Regional Center, LLC (Texas)

Renamed:

  • Civitas Pacific Northwest Regional Center, LLC (former name Civitas Northwest Regional Center) (Oregon, Washington)

New terminations:

  • American Development and Investment Regional Center (California) Terminated 1/5/2017
  • Bay Area Regional Center LLC (California) Terminated 12/22/2016
  • Path America Sonoco, LLC (Washington) Terminated 11/23/2016

Proposed New EB-5 Regs (priority dates, investment amounts, TEAs)

On January 13, the Federal Register is publishing a Notice of Proposed Rule-making titled EB-5 Investor Program Modernization (DHS Docket No. USCIS 2016-0006). The notice proposes and explains the rationale behind new EB-5 regulations on priority dates, investment amounts, and targeted employment areas, among other changes. The Notice gives a comment period ending on April 11, 2017, and the regulation amendments could go live at any time after that point – though I assume not very soon thereafter, since the notice solicits and will presumably receive extensive public comment, may require another draft before the final, and will need to be greenlighted by the new administration.

Summary of Proposed Regulation Amendments in DHS Docket No. USCIS-2016-0006

  1. Priority Dates: Allow an EB-5 petitioner to use the priority date of an approved EB-5 petition for any subsequently-filed petition. (In other words, an investor with an approved I-526 in one project could choose to file a new I-526 in a different project while keeping the original priority date. This would benefit investors whose project or regional center has trouble after petition approval, but before the investor receives a visa number. The regulations do not restrict investor reasons for choosing to file a new petition.)
  2. Investment Amounts: Increase the standard minimum investment amount to account for inflation, reduce the differential between standard and TEA investment amounts, and implement automatic increases every five years based on inflation (rounded to the nearest 100,000).  Based on CPI increases since investment amounts were set in 1990, this means that the standard minimum investment would become $1,800,000 in 2017. The TEA amount, set at 75% of the standard, would be $1,350,000 in 2017. The investor would be required to contribute the minimum investment amount that is designated at the time the petition is filed.
  3. Targeted Employment Areas: Eliminate state designation of TEAs, and have DHS determine TEA qualification by applying its own uniform standards to evidence presented by investors and regional centers. For high-unemployment TEAs, DHS would only designate an MSA, county, city, or project tracts. (A project tract TEA is the census tract where the project is located, or a group comprising any or all census tracts that touch the tract where the project is located — but not a group including any indirectly connected census tracts). The regulations do not specify which unemployment data DHS would use or accept. (This document compares TEA regulations in the proposed regulations to current policy and legislative proposals.)
  4. Other technical changes: define a process by which derivatives may file Form I-829 if not included on the principal’s position; provide greater flexibility in selecting the I-829 interview location; remove the requirement that investors report to a district office in order to receive a permanent resident card; miscellaneous other changes (including clarifying that an investor can be sufficiently engaged in an NCE merely by virtue of being an equity holder, without requiring a management or other active role).

The notice goes into extensive detail about USCIS’s thinking and research behind the proposed changes (which is interesting in itself, even apart from context), and invites stakeholders to respond with equally substantial data and analysis. I look forward to IIUSA or others stepping up to help organize a serious stakeholder response. We need to do better than hundreds of individual stakeholders mailing to basically just say “this would hurt” and “we don’t like change.” (Update: Comments can be reviewed at this link.)

The regulators at USCIS and legislators in Congress share similar goals — to modernize the EB-5 program and change certain aspects of the program in need of reform — but so far the draft legislation and proposed regulations suggest quite different changes. I wonder whether Congressional staffers will be influenced by these Notices of Proposed Rule-Making as they continue to refine legislation. (Update: The House Judiciary Committee held a hearing on March 8 to discuss the proposed regulations.) I note that the draft regulations frequently reference Congressional intent as expressed around 1990, but not current discussions in Congress.

EB-5 Regs (Regional Centers), I-924 Process and 2015 Stats, Processing Times

I-924 Approval Data

I try to improve the accuracy of my Regional Center List by requesting regional center designation letters from USCIS through the FOIA process. So far I have logged all initial designations and amendments through 2015. I’m sharing summaries of data points gleaned from the most recent letters in my collection (2015 approvals) to help shed light on processing issues.  As we prepare to respond to the ANPRM, let’s think about what’s wrong with the following pictures, and how to improve the situation.

Status of Amended Regulations

USCIS has published an Advance Notice of Proposed Rulemaking (ANPRM) in the Federal Register. This notice “EB-5 Immigrant Investor Regional Center Program” (Docket No. USCIS-2016-0008) does not unveil any revised regulations, but instead generously solicits stakeholder input to help formulate new rules for regional center designation, the exemplar filing process, continued RC participation, and RC termination. (Docket #0008 references a separate notice “EB-5 Immigrant Investor Program Modernization” Docket No. USCIS-2016-0006 that may cover the other EB-5 topics that we expected to see addressed. 1/12 UPDATE: here is Docket No. USCIS-2016-0006, which proposes new regulations for EB-5 investment amount increases, TEA requirements, priority dates, and other EB-5 matters.)

The bad news about notice #0008 is that it suggests USCIS is in a preliminary stage of thinking about new regional center designation rules, hasn’t actually drafted any regulations on this topic, and doesn’t expect to start for at least another 90 days. (Though hustle might be useless anyway, if Trump makes good on his election commitment to issue a temporary moratorium on most new regulations.) The good news is that notice #0008 demonstrates genuine concern to understand and work with regional center reality, presents thoughtful analysis of the issues, and poses excellent questions. Answers prepared for USCIS in response to the ANPRM should be organized and shared with Congressional staffers as well, since draft EB-5 reform legislation covers the same issues that USCIS aims to resolve, and would benefit from the same input.

Processing Times

Speaking of processing times, here is an email that I should have shared last week.

From: U.S. Citizenship and Immigration Services [mailto:uscis@public.govdelivery.com]
Sent: Thursday, January 05, 2017 11:32 AM
Subject: USCIS Now Uses Specific Dates to Show Case Processing Times

Dear Stakeholder,

Starting on Jan. 4, 2017, we will post processing times using a specific date format rather than weeks or months. This is the first step in providing processing times that are timelier and easier to understand.

We post case processing times on our website as a guide for when to inquire (service request) about a pending case. For the last several years, we have posted case processing times using two different formats:

  • For cases that were within our production goals, we listed processing times in weeks or months.
  • For cases that were outside of our production goals, we listed processing times with a specific date.

Always refer to your I-797C, Notice of Action, and look for “receipt date” to determine when we accepted your case. If the receipt date on the USCIS Processing Times web page is after the date we have listed on your notice, you should expect to hear from us within 30 days. If after those 30 days, you have not heard from us, you may make an inquiry on your case.

We recommend using our e-request tool for all case inquiries. In addition, we have many other services and tools at my.uscis.gov

If you move, remember to update your address for each pending case and receipt number at uscis.gov/addresschange.

Kind Regards,
USCIS Public Engagement Division

Note that this change is cosmetic: processing “as of month” and “as of date” are the same information, just in a different form. But the change is helpful to clarify that the report does not give average processing times, but rather a metric for judging when it’s okay to inquire about case status. FYI here is my spreadsheet of historical IPO processing times with columns translating month to date and vice versa. (But whether considering month or date, keep in mind individual deviations as illustrated above in my scatter plot charts of actual I-924 processing in 2015.)

Proposed EB5 investment and TEA changes

The Regional Center program sunset date has been pushed back to April 28, 2017 by Public Law 114-254, but don’t count on the EB-5 status quo remaining unchanged through April. As I reported before, EB-5 filing fees are increasing from next week, there’s a new EB-5 Policy Manual, and Congress and USCIS might be about to unveil major EB-5 rule changes. USCIS signaled intention to post proposed new EB-5 regulations in the coming month, which could (at record speed) mean a final rule as early as March 2017. Congress reportedly came close to finalizing new EB-5 legislation behind the scenes last month and reportedly plans to introduce a new bill shortly. (USCIS has a history of dragging regulation revisions out over months or years or even decades, and Congress has a packed schedule for Trump’s first 100 days without mentioning EB-5. But still, there’s at least a chance of immanent EB-5 action.)

New regulations from USCIS promise to increase the minimum EB-5 investment amount, revise Targeted Employment Area requirements, clarify regional center designation requirements, and consider priority dates. We’ll have to wait for the proposed rule to learn more detail. (UPDATE: here is the detail.) New legislation promises to address those same issues while also adding new rules  for job creation, project pre-approval, investor source of funds, investor vetting and protections, fund administration, and many aspects of regional center operations.  My Bill Comparison Chart summarizes features from various iterations of proposed EB-5 legislation. (2017 UPDATE: I’ve continued to update the bill comparison chart, and also made a comparison of TEA proposals.) This draft is a version of the H.R. 5992 released earlier this summer, with revisions that show the influence of good sense (clearer presentation, no more deadly retroactive effective dates, fewer practically impossible tasks for USCIS and regional centers) as well as good lobbying by large regional centers (lower fees and better incentives for the major players). This staff draft legislation is unofficial (I received the same document separately from three sources, but without much context, and it’s just a redline with many passages marked for further negotiation), but I’m analyzing it because I hear that a bill based on this document may be  introduced early next year.

1/12/2017 UPDATE: DHS has published its proposed changes to investment amounts and TEAs in a Notice of Proposed Rule-making: EB-5 Investor Program Modernization (DHS Docket No. USCIS 2016-0006).

Countdown to reauthorization (CR to 4/28/2017)

The next sunset date for the regional center program is coming up on Friday 12/9, and I’ll update this post with relevant news as I receive it. (See my 9/29/2016 post if you’d like to review the history of RC program authorizations, and my 4/27/2017 post for updates on the more recent reauthorization countdown.)

UPDATES:

  • 12/10/2016: President Obama signed into law H.R. 2028, the “Further and Continuing and Security Assistance Appropriations Act, 2017.” It is now Public Law 114-254. This extends Regional Center program authorization together with government funding and other authorities through April 28, 2017.
  • 12/9/2016: The Senate is up late voting on the CR (HR 2028), and tomorrow should bring the good news of no government shutdown or RC program lapse.
  • 12/8/2016: The Hill reports that the CR passed the House today, and the Senate is expected to vote tomorrow. GOP leaders are confident that it will reach the President by the deadline, though it’s facing some opposition.
  • 12/7/2016: IIUSA has issued an advocacy alert welcoming the CR and the short-term reauthorization of the EB-5 Regional Center Program through April 28. “EB-5 stakeholders and congressional offices have engaged in meaningful discussions all year, particularly over the past few months, to reach consensus and compromise for the healthy future of the Program. With a tight deadline to fund the federal government and address other pressing legislative issues, there was simply not enough time for a reform package to be passed during this Congress. The short-term extension through April 28 will ensure that the industry and legislators will have the opportunity to agree upon a comprehensive reauthorization bill that provides necessary reforms to the Program while allowing the Program to continue to grow, thrive and endure in the long term.”
  • 12/6/2016: Quoted from a House Appropriations Committee Press Release: “House Appropriations Chairman Hal Rogers today introduced a short-term Continuing Resolution (CR) (H.R. 2028) to prevent a government shutdown and continue funding for federal programs and services until April 28, 2017. The legislation also contains funding for emergency disaster relief.  …The CR extends funding for operations for most federal agencies, programs and services until April 28, 2017. It maintains the current budget cap level of $1.07 trillion put into place under the Budget Control Act of 2011. The legislation continues policy and funding provisions included in currently enacted fiscal year 2016 Appropriations legislation. It does not include controversial riders, or major changes in existing federal policy.   ….For the full text of the legislation, please visit: http://docs.house.gov/floor/”  The Appropriations Committee has also posted a nice section-by-section summary.
  • 12/6/2016: Lawmakers haggle over funding bill as shutdown nears, says The Hill
  • 12/5/2016: I hear that Goodlatte and Conyers’ H.R. 5992 EB-5 Reform Act is still under active negotiation behind the scenes. A staff draft of the bill dated 12/2/2016, just forwarded to me by a kind reader, shows significant revisions from the original bill and suggests concessions to industry pressure on TEA definitions, visa set-asides, minimum investment amounts, foreign government involvement, and account transparency requirements. The matter of retroactive effective dates is marked as controversial and “unresolved” in this draft. Provisions on direct jobs, public bonds, and loan restrictions are highlighted as points for discussion. I will be astonished if a substantive EB-5 reform bill gets passed soon, but Congress might exceed expectations. This draft in progress does show a lot of recent work