EB-5 Reform and Integrity Act of 2022

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

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

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its policies and training and forms, I get new topics to address while marking my 12 years of past articles as all outdated, regional centers and direct EB-5 project companies will reorganize their processes and rethink their plans, past EB-5 investors will recalculate their wait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

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

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

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

Looking to March 11, 2022 (legislation and litigation)

The drama of regional center program reauthorization is racing toward the zero hour of March 11, 2022: the date when the FY2022 omnibus appropriations bill is now finally, firmly likely to pass with or without EB-5 legislation on board. The omnibus text should be released at the end of next week, and we’ll know then whether the industry has agreed with Senator Leahy on reauthorization (and/or grandfathering language). Advocacy groups have been working hard, taking the deadline seriously, and cautiously optimistic about a favorable outcome (including EB5IC, IIUSA, and AIIA in last week’s donor call). USCIS apparently believes in March 11 as a hard deadline as well. I heard 4^th hand from multiple sources that USCIS told the U.S. Chamber of Commerce lobby that the current abeyance policy for regional center petitions will be ended after the omnibus passes. Such a message, assuming true, places scary but helpful pressure on the omnibus to actually carry reauthorization or at least protections for RC petition eligibility. Not that USCIS is likely to act very quickly starting March 12, whether on approvals or NOID (it appears that the Investor Program Office has maybe two employees left working on I-526), but at least there’s a line in the sand for Congress/industry to see. Now is the time for the legislative debate to produce a result.

For timely updates, look to your primary-source advocacy channels. Or look away and focus on your health, remembering that life is precious, whatever happens with EB-5. Comments are open, with the reminder that my blog is not a widely influential platform, and not Twitter.

Personally, I have been busy with business plan work, but also overcome with pity and fear over the EB-5 scene. Some people believe that this is some kind of modern Hollywood story full of sophisticated conspiracy and slick villains, but I don’t think so. The ingredients look to me like plain old-fashioned tragedy, with hubris and hamartia driving the action. As the end unfolds and pressure builds I’m torn between wanting to hide my eyes, just run from the theater, or maybe stand up and wave my arms and try to shout to the players onstage. Not that that works, but here’s what I’d say.

Regional center self-interest calls for action to protect past investment, because the past is also the future. EB-5 visa availability constraints necessarily limit how much more new EB-5 capital can be raised going forward, regardless of other factors. Meanwhile a huge fund of existing EB-5 investment remains to be either deployed into the future or lost. Profit depends on regional center actions today to protect the immigration eligibility that keeps past investors on board.

Please don’t let negotiations die in an investment threshold battle that couldn’t have helped even if won. We must avoid misjudging the role of investment amounts. Demand for regional center investment is based first on a chance to immigrate, and secondarily on the price of that chance. The large crowds who flocked to affordable investment levels in 2012-2018 did so because they believed in the promise of a visa, and weren’t apprised of overall or per-country visa limits. Those unsustainable crowds can’t return again, even with a good win on investment/TEA terms, because the ignorance that underwrote that excess demand has dissipated, and backlogs are in view for all major markets. With 80,000+ people queued up for visas only available at 10,000 per year, and backlogs concentrated by country caps on the few large EB-5 markets, the future has already been sold.

The visa availability/awareness damper on future demand precludes the possibility of any RCs with large past EB-5 raises depending on a Ponzi principle for their future. “But I need to replicate the past EB-5 investor stream or I can’t keep operating or repay past investors” (besides being a statement that the SEC might like to investigate) is not a reason to hijack legislation over investment amounts, since affordability alone couldn’t restore past demand anyway. Appetite for what’s possible has a point, but grasping for the impossible is not the vice of greed so much as of stupidity.

There are strong public policy arguments for accessible EB-5 investment thresholds, especially for small direct EB-5 projects, but it’s not a rational dealbreaker issue for the big regional centers.

Please don’t let negotiations die over a visa relief battle that couldn’t have been won. Getting actual extra visas for EB-5 would be a wonderful win, and essential to holistic reform, but it’s not on the table for March 11 — or anywhere outside multi-category immigration reform, considering that Republicans don’t want to increase overall immigration at all, Democrats have suggested relief for almost every visa category except EB-5, and no one would let EB-5 get first and only what more powerful interests want just as badly. This is all unfortunate, but understood. But there’s lingering thought in some corners: what’s the closest we could get to the unobtainable good? In absence of visa relief, what if we could at least manage half-measures? Something is better than nothing, and we might restore the historically-effective illusion of an immigration opportunity, if nothing else. Thus the ideas of set-asides and advance parole. Visa set-aside categories could only support a few hundred new annual Chinese investments before creating their own backlogs, but could still be effective marketing tools if the limits went unnoticed upfront. Regional centers with previous success in raising four Chinese investments for every one visa actually available to China might believe that a new set-aside category would significantly beguile/reopen the China market, despite not numerically supporting the desired demand. Advance Parole also sounds very promising, so long as one doesn’t look up what Advance Parole is and how it’s implemented. However, the China market is on the alert now, and equipped to calculate visa incentives and avoid illusion. Unexaggerated, how much could the small set-aside allocation or a limited advance parole program possibly help the market? On the other hand, how much could insisting on such half-measures in face of opposition still hurt the chance to pass any legislation at all? Advance Parole in particular, while not controversial for industry, is very controversial in Congress because it involves allocating immigration benefit, looks like expansion, and triggers the interests of other factions. The limited actual good of advance parole is worth at least trying for, but not worth forcing negotiation death in the attempt to get, if (and assuming) it’s too controversial for assent from the Congressional leaders who need to sign off on EB-5 legislation. Meanwhile, the extended legislation fight is losing already-available extra visas by the day: the nearly 20,000 EB-5 visas technically available in FY2022 will be lost without immediate action to restore RC investor eligibility.

Do not reckon without the gods. In calculating what’s possible in March 2021, remember Senator Leahy’s power over the omnibus, and his long-standing and passionately expressed personal motivations and public commitments with respect to his legacy in EB-5. Note that Senator Grassley sounds as unbending as ever, telling Roll Call last week: “The program is now dead, and it’ll remain that way until all corners of the industry wake up to the reality that Congress is not going to allow these abuses to continue.” Observe that Senator Schumer is powerful and there for his constituents, but can be counted on to do what’s expedient (which includes negotiating with but not railroading idealist and noisy Leahy and Grassley in an election year). Though motivated by his campaign contributors, Senator Graham is not placed to unilaterally include favorable legislation on the omnibus, Considering this configuration of the gods over the March 11 opportunity, industry compromise looks like the only possible path to March 11 success, painful as that will be. Our boldest industry ambitions will have to be modified or else fall from the sky with melted wings. See recent articles by Carolyn Lee and Ishaan Khanna for further discussion and insights and the lobby state of play and need for compromise.

Go ahead and try the Hail Mary pass, but do not rely on it. How about if we escape the regional center lapse tragedy by denying its existence? The regional center program itself is not temporary, but was established without time limit in 1992: so goes the case recently brought forward by multiple lawyers (e.g. Michael Chen last year, in a case that has a decision, and now with modifications by Wasden Banias/Orbit Law, GreenbergTraurig/Behring/EB5IC, Joseph and Hall/Galati/IMMPACT, and counting.) The basic case turns on a program authorization/visas authorization distinction that seems like it ought to exist, although grammar doesn’t put it in the regional center statute. The case stares down 30 years of recorded history, including Senator Leahy’s many published comments on his understanding of the program he has shepherded over the years (e.g. from 2008 and 2012), records from multiple Congressional hearings on the RC program, 12 reauthorizations (not counting CRs), and decades of agency and EB-5 industry communications. It seems we were all mistaken about RC program status all that time — even those Senators who are somehow still on the scene now 30 years after attending the birth of the regional center program. The litigation has attractions because it implies that we don’t actually need reauthorizing legislation, with its excruciating process and delays and unpalatable reforms. Even better for some purposes, it places full blame and responsibility for the current dreadful limbo of visa-less regional center investors on USCIS and DOS, exculpating the industry and Congress and getting them off the hook for further effort. How expedient if USCIS and DOS just made an administratively-fixable error of interpretation in December 2019 (repeating previously-published errors going back to at least 2009).  I understand that this Surrealist litigation has sophisticated legal nuances and represents the best that smart and well-regarded lawyers can offer us, under the circumstances, accommodating our demand for some kind of litigation alternative, and also having ancillary strategic functions.  But if I could shout more advice to the actors on the RC lobby stage, I’d say: do not count on this litigation to function as a plausible alibi for letting the legislative effort fail. You, we, and the Internet know too much for this line to fly: “But we genuinely believed that this litigation would protect regional center investors as a fallback, allowing us to give up a hard compromise for reauthorization or grandfathering legislation.” (For further comment on litigation, see attorney Robert Divine’s article EB-5 Reaches Crescendo of Confusion for Past and New Investors.)

My hope for our EB-5 industry future and face depends on some kind of EB-5 legislation passing with the March 11, 2022 omnibus. No matter how much painful sacrifice that will take, to avoid wider tragedy to come. Let’s get this done.

Looking to 2022

I will start 2022 by attempting a comment on where we are with regional center and direct EB-5, and what should be done

Regional Center Situation

Regional Center Legislation

In 2021, Congressional reformers and the industry lobbies delivered their best offers on EB-5 legislation, worked harder and more successfully than ever before to establish industry consensus around their respective proposals, and still ended up on the horns of their differences, demonstrating power to block each other and inability to overcome each other’s blocks.

Where can we look for resolution to an industry/Congress impasse that’s been ongoing since at least 2015? I’d say it’s theoretically impossible that personally-motivated reformers Senator Leahy and Senator Grassley will change their EB-5 priorities this year, or exercise less power in 2022 than in 2021.  Industry theoretically has more motivation to compromise our priorities, because we have more to lose from continued delay and growing investor frustration. Industry priorities are also more open to self-reflection. For example, simple calculation shows that 1,000 or even 3,000 set-aside visas would not accommodate enough investors to significantly re-open a now quota-aware China market, and would not significantly incentivize rural investment. The very limited practical benefit would not justify a bloody battle. Side-by-side comparison of the largely similar industry consensus vs Grassley/Leahy integrity measures begs a blushing question “and this is what we’re still fighting about?”. Narrowing the TEA investment differential to insignificance would be too-obviously bad politics and bad press today, and would be a worthless win in the future if an investor explosion in 2022 gets a chance to permanently stain the reputation of EB-5 at any price. I believe everyone now understands the near-term political impossibility of genuine EB-5-specific visa relief while larger immigration priorities remain unresolved. So maybe there’s realistically not much left to fight about this year. We shall see how realistic advocates will be in assessing costs, benefits and political possibilities in 2022. I hope that the sunk cost fallacy will be recognized and avoided.

At this point, my personal best hope for 2022 legislation is that everyone will unite around a few-sentence grandfathering provision to resume the immigration process for past investors. This would be an interim expedient to protect time for negotiations around substantial reauthorization legislation, otherwise threatened by the imminent mass bloodbath of past investor frustration. My slim hope would depend on all regional centers with lobbyists correctly realizing that near-term grandfathering is in their best interest to buy time, given the political realities delaying holistic reform and the increasing pressure from desperate investors who cannot tolerate further delay. It also depends on Senator Leahy not suspecting the regional center self-interest motive and time-buying tactic in grandfathering, but rather recognizing the unquestionable case of fairness and responsibility to people who invested in the authorized RC program, and/or the real need to protect existing EB-5-funded U.S. jobs and economic activity from being derailed by investor frustration. There’s a long road to making these cases, to regional centers especially, but I see a theoretical possibility at least.

I expect and hope that education will be a major difference between 2022 and 2021. Last year, a large part of the EB-5 ecosystem did not know what was going on. Industry associations tended to provide messaging rather than information. Most of us had no access to intel from lobbyists and Congressional staffers. The typical first-line advisors for EB-5 investors – immigration attorneys, regional centers, and agents – were often honestly unable or sometimes strategically unwilling to inform investors. We witnessed a few concerted efforts to spread misinformation, and some genuine (if still culpable) simple ignorance from advocates about their own proposals and the legislative process. All this ignorance had a function in 2021, deferring delay repercussions and avoiding dissension. But it came with a fearful cost for business and personal decision-making.

In 2022 and going forward, I see the EB-5 ecosystem demanding and getting better information and accountability. The fact and consequences of RC program expiration have had time to sink in. Messaging has had time to stand the test of history. Recent comments on this blog show how sentiment has developed, and the growing investment in education and action far beyond this occasional little blog. Personally, I donate to the EB-5 association AIIA because AIIA is motivated to communicate what their lobbyist finds out and what they hear in meetings with Congressional staffers.  I would love every EB-5 investor, service provider, and regional center to take advantage of donor access to the AIIA Microsoft Teams group and Telegram chat for the sake of the intel and collaboration offered, if nothing else. I do not know how much AIIA can accomplish in terms of advocacy in a few months, but even their emerging role in obtaining and sharing info about who’s doing and saying what in Washington DC is gold for accountability and educated action. No wonder my blog comments are filling with advertising “Donate to AIIA! Learn from AIIA!” and also “Do not donate to AIIA! Nothing happening there! Don’t look!”

Hopefully everyone on the front lines of regional center advocacy will step up their game this year, realizing that they are being watched. “Speak and act as those who will be judged” could be a good mantra for all of us in 2022. Along with the reminder “We’re all in this together.”

AIIA is holding a town hall webinar on Saturday January 15th at 6pm PT to discuss reauthorization and provide updates. Free to the public: register here.  [UPDATE: A partial recording now available on the AIIA Youtube channel.] AIIA’s informative December newsletter is also still available, in case you missed it.

If anyone else is holding RC-related events to share information plus host discussion, please let me know so that I can promote them. Let the year of information and accountability begin.

Regional Center Petition Processing

The USCIS website continues to have one alert saying that USCIS will hold regional center I-526, I-485, and I-924 and “at the end of calendar year 2021, unless there is new legislation for regional centers, we will reevaluate whether to keep this hold in place.” Now a second alert as of 12/30/2021 adds “USCIS is reevaluating the decision [and] will provide additional guidance as soon as practical.” I am not holding my breath for guidance or action from USCIS.

So far this month, IIUSA has filed a brief arguing that USCIS should process regional center petitions during a regional center program lapse, and sent a letter arguing that USCIS should not process regional center petitions during the regional center program lapse. Each document makes the argument for the sake of investor protection. I can’t tell whether a contradiction has been noticed.

In the case of Yuhua Zhu et al v. Antony John Blinken et al, 111 EB-5 investors with pending I-485 sued USCIS “to either adjudicate their applications, or issue them visas, under the EB-5 Immigrant Investor Regional Center Program.” On January 3, 2022, a judge assessed and dismissed the claim: “The court is persuaded that because the lapse in congressional authorization for the Regional Center Program prevents the court from granting effective relief, the claim is moot and must be dismissed.” (Thanks to Jason and Bunuel Yang who brought the litigation to our attention in their comments on my previous post.)

Unfortunately, we do depend on Congress to act to provide regional center petitions with a basis for approval and visas.

Direct EB-5 situation

Investment Amount

The stability of direct EB-5 investment improved since January 5, 2022 when DHS dismissed its appeal of the Behring Regional Center lawsuit. With the appeal pending, we had operated under the risk that DHS might eventually win the appeal, and that a future win could make today’s direct I-526 retroactively ineligible. With the appeal dismissed, that risk has disappeared, thankfully. I feel more comfortable now that each I-526 may be judged by the rules under which it was filed. (My confidence would be boosted if Congress passes the proposed grandfathering language to that effect.) The EB-5 investment amount is still subject to change, but at least not retroactive change for filed I-526. I’d also worried that the recent lack of I-526 processing might reflect an appeal-related abeyance policy. With the appeal dismissed, that possible explanation for processing delay disappears. All good news for direct EB-5 at least, though the Behring suit and the dismissed appeal complicate regional center legislation negotiations.

I-526 Processing

 I-526 processing times for direct EB-5 investors remain in question, as USCIS continues to have apparently almost no one working on I-526 adjudications. Here’s the total I-526 processing activity since January 5, 2022:

• Thursday January 6: One RFE sent to an I-526 filed in 2016
• Friday January 7: One I-526 filed in 2018 approved
• Monday January 10: One notice sent to an I-526 filed in 2016
• Tuesday January 11: No action
• Wednesday January 12: Denied one I-526 filed in 2015 and one I-526 filed in April 2019

In the entire month of December 2021, USCIS approved three I-526 and denied four I-526 and that’s all. (I updated my previous processing post with the full month log.) The estimated I-526 processing time will be very long if we have to assume that the many hundreds of pending direct I-526 will continue to be processed at a rate of less than 10 completions per month. We should not have to assume an indefinite meltdown, since USCIS has over 200 EB-5-fee-funded employees who could be and ought to be working on EB-5 forms. For direct EB-5 to remain an attractive option for project companies and investors, pressure must mount on USCIS to use its EB-5 resources to adjudicate EB-5 forms. And for regional center investment to have a future, we must also press USCIS to retain and use its EB-5 processing resources today.

Direct EB-5 visa timing and availability

Today’s Visa Bulletin is wide open for EB-5, because RC program expiration combined with processing barriers means that the visa stage currently lacks excess demand to control. The future visa availability outlook and timing calculation are complicated. Incoming direct EB-5 investors from China, Vietnam, and India have a slender chance to avoid future delay at the visa stage. This chance is unrelated to visa bulletin conditions today, which only apply to people later in the process. The chance for incoming investors exists if rapid USCIS processing plus delayed Congressional action combine to allow incoming direct investors to eventually reach the visa final action stage while regional center investors are still prevented from claiming visas. If that window closes, and older regional center investors are able (and willing) to rejoin the queue while newer direct investors are still waiting for I-526 processing, then the Visa Bulletin will jump and recent investors from China, Vietnam, and India will find themselves at the back of large regional center crowds (a 7-10+-year queue) at the visa stage. I prefer to avoid bets on USCIS promptness and regional center program failure.

Direct EB-5 project availability and due diligence

I plan to write more about finding and assessing direct EB-5 projects, and I am considering a directory of direct EB-5 contacts. If you have a current or future direct EB-5 project available and might be interested in such a directory, please email me at suzanne@lucidtext.com.

As a business plan writer, I’ve been working with a number of direct EB-5 ventures that could be wonderful for the economy. I hope that EB-5 policy and administration will improve to better reward good projects and their investors.

USCIS website alert update: I-924A

Thank you to Carolyn Lee for noticing that the USCIS EB-5 page was quietly updated yesterday 12/20 to include this paragraph in the alert on regional center program expiration:

We will still accept and review Form I-924A, Annual Certification of Regional Center, including those filed on or after July 1, 2021. Regional centers should continue to submit Form I-924A, for fiscal year 2021.  

Regional centers have been asking about I-924 since September, and USCIS waited until Christmas week, just a few days before the deadline to file I-924A, to say yes, we do want you to file this form and especially to send us the fees, even though the program is expired and we’ve said we’re not reviewing I-924A. Happy Holidays.

The only nice thing I can think of to say is that the request for I-924A filings can only be based on USCIS assumption that the program will be revived. And if USCIS is making that assumption for I-924A purposes, they could hardly justify making the contrary assumption in context of deciding whether to keep holding regional center investor petitions.

How and why RC program law affects RC petition processing

I observe confusion about how and why regional center program expiration affects various stages of the EB-5 process.

What specifically is the “lapsed statutory authority” that USCIS cites as the reason for not accepting regional center I-526 and not acting on pending regional center I-526 or I-485, but continuing to act on I-829 for everyone (in theory)?

What specifically is the “legislative action extending this category” that the Visa Bulletin states as necessary before I5 and R5 visas may be issued overseas, or final action taken on adjustment of status cases?

What all is to blame for the fact that regional center I-526 petitions are currently not being processed and visas not issued, and – therefore – what are the possible options to change the situation?

To help think about these questions, let’s back up and look at the law and the process.

The Law

Statutory authority for the regional center program came from Section 610(b) of Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (Public Law 102-395). You can review the 1993 law (see PDF p 47), or even better this section from USCIS EB-5 training materials that presents the text together with amendments up to 2012. I’ve copied the 1993 language below, with underlines added at key points. This is it: three short paragraphs upon which stand billions of dollars. After the quote, I comment on significant points in the regional center statute.

Quoted from Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 SEC. 610. PILOT IMMIGRATION PROGRAM-
(a) Of the visas otherwise available under section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)), the Secretary of State, together with the Attorney General, shall set aside visas for a pilot program to implement the provisions of such section. Such pilot program shall involve a regional center in the United States for the promotion of economic growth, including increased export sales, improved regional productivity, job creation, and increased domestic capital investment.
(b) For purposes of the pilot program established in subsection (a), beginning on October 1, 1992, but no later than October 1, 1993, the Secretary of State, together with the Attorney General, shall set aside 300 visas annually for five years to include such aliens as are eligible for admission under section 203(b)(5) of the Immigration and Nationality Act and this section, as well as spouses or children which are eligible, under the terms of the Immigration and Nationality Act, to accompany or follow to join such aliens.
(c) In determining compliance with section 203(b)(5)(A)(iii) of the Immigration and Nationality Act, and notwithstanding the requirements of 8 CFR 204.6, the Attorney General shall permit aliens admitted under the pilot program described in this section to establish reasonable methodologies for determining the number of jobs created by the pilot program, including such jobs which are estimated to have been created indirectly through revenues generated from increased exports resulting from the pilot program

Discussion of the law

The 1993 law said “shall set aside visas” for a program that “shall involve a regional center.” Details here and there in the law have been amended over time, but note the key point that the regional center program difference is baked into visas. The Visa Bulletin therefore sets specific categories for regional center applicants — I5 and R5 – and stops issuing visas in the I5 and R5 categories whenever the regional center program authorization expires.

The 1993 law specified a time limit on setting aside visas for the regional center program: “five years.” It’s those two little words “five years” that have been replaced over and over again since 1993, in successive laws reauthorizing the regional center program. Reauthorizing legislation started by substituting the original “five years” with new time durations, and eventually moved to providing calendar date deadlines. The most recent reauthorization in 2020 simply said: “Section 610(b) of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note) shall be applied by substituting ‘June 30, 2021’ for ‘September 30, 2015.’” When no new law appeared to substitute the June 30, 2021 date, then regional center visas became unavailable as of July 1, 2021, and all the processing stages leading up to visa issuance therefore screeched to a halt. At its most basic, regional center program authorization has just meant giving a new expiration date in place of the five-year time limit in the 1993 law. (Here’s my log of reauthorizations to date.)

The 1993 law specified that regional center category visas are for “such aliens as are eligible for admission under section 203(b)(5) of the Immigration and Nationality Act and this section.” The law further specified that the government “shall permit aliens admitted under the pilot program described in this section to establish reasonable methodologies for determining the number of jobs created by the pilot program, including such jobs which are estimated to have been created indirectly.” These words help explain why regional center program authorization is an issue leading up to and at the visa stage, but not a problem for people who have already been admitted to the U.S. on a regional center visa, and now in the Conditional Permanent Resident or I-829 stages.

The key word is “admission” i.e. starting U.S. residence on an EB-5 visa. The 1993 law puts pre-visa regional center investors in a vulnerable position, because it specifies that they must be “eligible for admission” under the core EB-5 program at INA 203(b)(5) AND “this section” i.e. the temporary regional center program authorization. Lawmakers in 1993 surely did not foresee that inefficient USCIS processing and backlogs would insert many many years between (A) investing in the regional center program and (B) becoming eligible for admission to the U.S.  Proposed “grandfathering” language now seeks to rectify that vulnerable long gap between A and B by specifying that the investor eligibility can rely throughout the process on the statutory authority that existed at Point A: the time of filing I-526. By simply focusing on eligibility at the time of admission — the visa stage that can be delayed for years into the EB-5 process — the 1993 law provided no such protection.

Meanwhile, the 1993 law does at least effectively lock in/grandfather regional center eligibility from the time of admission on a visa. The government “shall permit aliens admitted under the pilot program described in this section to establish reasonable methodologies for determining the number of jobs created by the pilot program, including such jobs which are estimated to have been created indirectly.” If you were admitted under an I5 or R5 visa, you may then go on to remove conditions on that visa under the regional center rules that apply to that visa, including using economic methodologies to count indirect jobs. The 1993 law permits you to do so because you were admitted to residence under the RC program. Based on the statute, EB-5 policy confirms that even following loss of regional center sponsorship, “The conditional permanent resident investor will continue to have the opportunity to demonstrate compliance with EB-5 program requirements, including through reliance on indirect job creation.”

The Process

The following figure summarizes stages and actions in the EB-5 process. Under the law as described above, the regional center applicant needs the regional center program to stay authorized throughout the grey-shaded stages, such that the applicant stays eligible until the point of being able to cash in on regional center eligibility by getting an I5 or R5 visa at Step 4.

Suggested “grandfathering” language for EB-5 legislation would change this risky scenario by clarifying the law to lock in regional center eligibility based on regional center program authorization status at Step 1. Then future investors could start the process with confidence, knowing that their future eligibility at Step 4 — whenever that time comes — will still follow the rules and authorities that existed at Step 1. The proposed grandfathering language does not merely protect existing applicants (indeed, it’s irrelevant for many past investors if there’s a significant near-term reauthorization), but essential to protect all incoming demand from the future threat of expiring legislation. AIIA’s suggested grandfathering language proposes to amend the INA as follows: “(E) In the case of statutory provisions that establish temporary authority for visas to be made available under paragraph (A) to beneficiaries of such authority, the suspension or termination of such temporary authority shall not suspend or terminate the allocation of visas to such beneficiaries, provided that the petition seeking such allocation was filed when the authority was in effect.”

Note that all regional centers have a self-interest in ensuring that such protective language gets included in any new reauthorization legislation. Future investors will want to avoid the vulnerability to change that’s been on display during the current lapse. Who will commit to a program that’s liable to disappear before it’s needed? Eligibility should be securable at the time an investor commits to the regional center program, and such assurance requires an addition to the law.

Implications

I hope that looking at the regional center statute and contemplating the EB-5 process chart helps to clarify thinking about where we are now, and possible paths forward.

The key lesson that I take: the core problem in regional center program expiration is loss of authority to issue regional center visas and loss of eligibility to receive regional center visas. The current stop to all RC processing leading up to visa issuance is a side effect of that core problem, not the problem itself. Further, the authority to issue RC visas and eligibility for RC visas is based in statute, and thus the solution must be statutory: to get a law passed that renews authority and eligibility for regional center visas. It would not be a solution to simply force USCIS to receive and process regional center I-526 and I-485, and Department of State to process visa applications. If we did that, we could force USCIS and DOS to start denying applications. Because how could agencies possibly approve applications for benefits that don’t currently exist? To quote EB-5 immigration attorney Ron Klasko, from an email kindly sent to me on this topic: “I can advise you of the general legal principle that prevents a government agency from approving a petition or a visa unless there is statutory or regulatory authorization to do so.”

USCIS and Department of State do not make laws or create benefits, they just administer them. By choosing to pause regional center application processing, USCIS and DOS chose to put the regional center patient in a coma, pending a RC program revival by Congress. The regional center processing coma is not the problem in itself – in fact it’s a kindness, to defer the final action of death.  In that case, begging or suing USCIS to resume processing RC petitions during an RC program expiration would not be a solution, and indeed would harm any RC applicants who do not want denials.

Congress must pass a law that enables EB-5 visas to be issued in the regional center categories. A law that reauthorizes the regional center program would accomplish that purpose. A reauthorization law will inevitably include many provisions in order to pass, but the minimum necessary content to protect existing investors is an RC program expiration date that’s in the future. Reauthorization legislation is the top priority, and Plan A. If Congress does not act to reauthorize the RC program for the future, Congress should at least pass a law that keeps faith with past investment by allowing applicants who filed I-526 while the regional center program was authorized to remain eligible for regional center visas. The one-sentence grandfathering proposal quoted above could be enough, if a minimal Plan B becomes necessary. So far, I have heard no Plan C path to regional center visa issuance that sounds promising to me. I do not know what litigation argument could work for visas in light of what’s in the law and EB-5 process as reviewed above. The top EB-5 lawyers will try their creative best if necessary, but do not speak optimistically about litigation prospects in lieu of legislative solution. The one RC visa lawsuit attempt I’ve read so far did not make sense to me (except for the couple pages of it that were copied from my blog). But if you can see a solid Plan C option, or note any problems with my analysis, please comment, and make your case in detail. Or email me at suzanne@lucidtext.com.

Updates: I’ll continue to update this final section with other ideas as they occur to me, or suggested in the comments. Lawyers, please weigh in on whether there’s any traction here.

1. Regional Center Investor A has a clear and well-documented case that “I would have had a regional center visa by now were it not for egregious government agency processing delay.” Is that an argument that can be taken anywhere or accomplish anything? If so, with whom to pursue it?
2. Is the USCIS “material change” policy the primary reason that people who filed I-526 as regional center investors cannot possibly get direct EB-5 visas? If so, is there any hope of or path to a policy-level remedy of changing the material change policy?

Call for investor stories to support RC program authorization

I do not have definitive news about regional center program reauthorization, but will pass on action items suggested by EB-5 advocates. (Personally, I have decided to celebrate EB-5 legislation as a miracle once it happens, and to avoid predictions before it happens. When a miracle is a necessity, it’s risky to comment in advance on its probability and timing.)

The first condition for EB-5 legislation is a vehicle to which it can attach, and that condition has not been available yet in our crazy Congress. The date for one hoped-for vehicle — the FY2022 omnibus appropriations — remains unknown. It was due by December 3, but political news shows that Congress is still heading to miss that deadline (due to issues much larger than EB-5). (12/3 UPDATE: We now know that a new CR has extended the deadline to February 18, 2022, and per usual is a brief bill with no special interest content, including no RC program authorization.) But knowing the new CR deadline will still not support predictions about EB-5 legislation, since I won’t know whether the new CR is the last CR, or whether appropriations remains the best/nearest available vehicle for EB-5 legislation. Everyone in the EB-5 industry feels the urgency, and will at least try for nearer opportunities as the appropriations act opportunity gets deferred by Congress. (FYI, here again is my Excel file logging the recent history of appropriations bills.)

 “Congress’s goal in December: Avoid shutdown and default,” reported The Hill yesterday. If only the headline referred to avoiding shutdown of the job-creating regional center program, and avoiding U.S. government default on the EB-5 visa promise to over 80,000 past foreign investors whose over $40+ billion investment is now at work in the U.S. economy! Those are major concerns, yet overshadowed. The shutdown and default threats occupying Congress involve funding for the entire federal government and the $20+ trillion national debt. Not to mention dealing with President Biden’s social spending and climate bill priorities.  No wonder EB-5 struggles for attention.

With the nation’s solvency and Biden’s legacy teetering on the brink, what room is there for any other concerns? And yet I notice the disproportionate power of catchy individual stories. Even reading The Hill, I have had to scroll far down the page to get to major news about the national debt and Build Back Better, down below headlines about the wheelchair shoplifter and Lindsey Lohan’s engagement. People respond to stories about individual experience, especially when featured in print and in a position to get shared.

EB-5 advocates have been thinking about the power of stories. The regional center lobby just conducted a PR blitz with a message to EB-5 investors: please call Senator Leahy and Senator Schumer and tell your story, to urge action on reauthorization. The word used to be: stand back and relax because we have this under control, the key Congressional representatives are on board, and we possess the political capital to get this done. The new messaging acknowledges that reauthorization is not in the bag, that Congressional support is not a given, and that we need all the political capital we can get, including from EB-5 investors who can talk about their important contributing work and/or investment projects in the U.S..  While the case for reauthorization has many planks, the case for urgent reauthorization comes specifically from the plight of past investors, whose pending immigration petitions may be reevaluated after December. The plight of past investors also provides the moral motive for reauthorization. Regional centers and investors equally need that plight to be highlighted, to help motivate urgent action on reauthorization legislation.

EB5IC representatives have particularly encouraged EB-5 investors to call or email Senator Leahy’s office, and tell a personal story about the impact of regional center program lapse. While Senator Leahy practically founded the regional center program and does not need to be educated about EB-5 or the need for reform legislation (as discussed in my previous post), investor stories may help stoke his sense of urgency about the current EB-5 situation, in midst of many competing priorities.  

Meanwhile, AIIA is working to gather and disseminate EB-5 investor stories for maximum impact in the media and in personal meetings with Congressional representatives. The media drive is supported by IIUSA and its PR firm FischTank, which can help to get stories placed. Additionally, AIIA is planning a trip to Washington DC next week, and has an urgent call for investors to join in meetings with Congressional reps. If you can assist either or both of these efforts, please reach out to them ASAP. I cannot promise the success of these campaigns, but the effort can only help. And the more participation, the more potential impact.

Quoted from https://goaiia.org/blog/f/eb-5-investors-share-your-story

FischTank would like to develop a media campaign that focuses on the investors’ personal stories, highlighting what you and your families have sacrificed, where you are in your immigration process, current obstacles you are facing, and what you have contributed to your local community.  Once FischTank has had a chance to connect with those of you who are willing to share your story, it would then like to package it together to focus on the importance of the program, the impact of the lapse on investors and the communities that have benefited from the program and pitch it to relevant local and national media. If you are interested, consent to your identity and story being made public, and are prepared to speak with members of the press about your story and how this program lapse has affected you, please reach out to us right away at info@goaiia.org

Quoted from an email sent by info@goaiia.org on November 28, 2021

Dear EB-5 Stakeholder,

You may remember we had previously sent an email asking for personal stories of how the EB-5 lapse has affected you. We received a few responses, although honestly, we would have liked to receive more.

As a result of that request, we received a response from Dr. Chandra Ojha, an interventional cardiologist, who lives in El Paso, Texas. Despite being a highly trained doctor, he was not able to extend his full service to the society during the raging pandemic last year as a result of the delay in processing his EB-5 visa. His story was published in a local newspaper. You can read it here: Opinion: I’m an El Paso doctor. The immigration system has put my future in jeopardy – El Paso Matters

Within hours of the publication of his story, the office of a sitting Senator reached out and asked to speak with him.

This is how grassroots campaigning works! It moves things one little step at a time. If this is the power of just one genuine story, published by a constituent living in America, imagine hundreds of such voices being heard all across America and the power they would have to move things in our favor.

We need more people to speak up and advocate for themselves. We need more voices to be heard. We need you to step forward to help our community that is hurting because of the Regional Center program lapse.

There is something we urgently need your help with now. We are looking for EB-5 investors (or their dependents) to visit lawmakers with us in Washington, D.C. on December 9 and 10.

We hope that issuers and immigration attorneys alike can also help us with this effort. We are lining up a series of meetings with members of Congress and are seeking investors that have invested in a project in these following areas:

–        Texas (especially Houston)
–        Iowa
–        South Dakota
–        South Carolina
–        Illinois
–        Vermont
–        California (specifically Silicon Valley)
–        Arizona (Phoenix)
–        Upstate NY (Syracuse)
–        Ohio (North of Cleveland)
–        Georgia (South of Atlanta)

As a reminder, locations of investment is more important than residence and we are seeking investors whose projects are located in the areas mentioned above. Attorneys, we request you to forward this email to your clients and we appreciate getting your support in working together to achieve our common goal of helping EB-5 Regional Center investors continue their immigration process.

Read more at https://mailchi.mp/goaiia/dc-trip

Understanding the Audience: Senator Leahy

The FY2022 Appropriations Act is the nearest-term hope as a vehicle for regional center program authorization, and I hear that all sides are committed to grasping that opportunity. (The appropriations act is due by December 3, 2021, and could well be delayed by Congressional fights unrelated to EB-5. But I’m relieved to hear that EB-5 negotiators are not counting on delay, but still hustling to be ready to catch the opportunity as soon as it could possibly come.) The appropriations opportunity focuses attention on Senator Leahy, who has a gatekeeper position as Chairman of the Senate Appropriations Committee. What are Senator Leahy’s interests and motivations when it comes to EB-5 legislation?

Senator Leahy is a long-time regional center program champion. His website celebrated in 2013 “Senator Leahy was the driving force behind every reauthorization since enactment.” He is also passionate about program integrity and reform, and long instrumental in EB-5 legislative efforts. The successes and difficulties of Vermont Regional Center have colored his efforts. Over the decades, Senator Leahy has published thousands of words about his EB-5 interests. I’m sharing below notes that I made when reading articles tagged with the “EB-5” category at leahy.senate.gov. I hope that reviewing Senator Leahy’s perspective can help shape advocacy that’s responsive to his priorities.

Senator Leahy’s EB-5 perspective as expressed in articles posted at leahy.senate.gov

Regional center program authorization

Integrity Measures

• Promote accountability and transparency
• Prevent fraud and address national security vulnerabilities
• “Improve accountability of applicants, project managers and the projects themselves”
• “I remain committed to doing more to protect investors and to root out fraud within the program, such as increasing fraud investigations and requiring additional oversight of investor funds.”
• “Our proposal would require background checks and third party oversight of funds.  It would create protections for defrauded investors. It would ban foreign government ownership of an EB-5 company.”
• “Congressional action is required to rectify documented fraud and national security vulnerabilities within the EB-5 Regional Center Program. The bipartisan EB-5 Reform and Integrity Act of 2021 establishes new disclosure requirements for EB-5 regional centers in order to protect investors and certify regional center compliance with program rules. It also requires the Department of Homeland Security to perform regular audits of and site visits to regional centers.”
• “I will not support mere window dressing.  Proposals that do not require transparency and accountability for every EB-5 project are just that.”

TEA Incentives

• Protect “central purpose of promoting investment in rural and economically challenged regions” by “reining in abusive gerrymandering”
• “The incentives that Congress created to promote investment and create jobs in rural and high unemployment areas—the sole reason why I championed this program—have been rendered obsolete through economic gerrymandering.”
• “The fact that a luxury hotel in Beverly Hills can use gerrymandering to claim it is located in a distressed community is troubling.  But the fact that this type of abuse now represents almost 90 percent of the entire EB-5 program is appalling.  And an untold number of these luxury developments would be pursued regardless of EB-5 financing, casting doubt on whether the program is creating any jobs at all.”

Investment amounts

• Modernize EB-5 by providing “a much-needed increase” to “inadequate investment levels.”

Visa Relief

• (The website posts do not discuss this topic. Leahy’s co-sponsored bills have included age-out protection and concurrent filing. He has spoken warmly about the general goal of protecting investors, but not discussed EB-5 visa relief.)

Industry Prejudices

• “Small but powerful corporate interests must not be allowed to derail improvements that can help our most distressed communities. They must not be given credit for window-dressing reform proposals that do little to change the status quo.” (2/2/2016)
• “Gluttonous, shortsighted corporate greed blocked these critical reforms.  Greed that was given a voice by the U.S. Chamber of Commerce.  Republican leadership has allowed a couple of powerful developers who exploit this program’s flaws to derail critical reforms.  I find it shameful: the worst abusers of this program have been given veto power over its reform.” (12/08/2016)
• “It’s really unfortunate that a bipartisan bill supported by the overwhelming majority of EB-5 stakeholders was blocked at the behest of a small minority that blindly opposes much-needed accountability and transparency in the program.” (6/25/2021)

This history can be a resource for people speaking with Senator Leahy today. Assuming industry can’t all to agree to just ask Leahy to attach Leahy’s own proposed EB-5 reform bill to FY2022 appropriations (of if only!), let’s at least carefully frame the alternative proposed EB-5 legislation in Leahy’s terms. Show him how any alternate TEA provisions and integrity measures still check his priorities for distressed and rural areas, accountability, and transparency. Identify and preemptively concede any proposed language that projects the opposite message. Discuss the integrity measures that likely mean much to Leahy in light of the Vermont RC case: fund administration, investor reporting, and regional center audits (previously not included in the industry bill). In choosing the advocacy approach, be cautious to navigate Leahy’s unfortunate image of parts of the industry. Speak to his goals, commitments, and existing knowledge. I trust that negotiators are being smart and strategic, and thinking in terms of audience. We can maximize the FY2022 appropriations chance by presenting language that makes Appropriations Chair Leahy able to respond “yes, this is something I want to help advance because it addresses my priorities and will help to protect my legacy in EB-5 and my reputation in Vermont.”

No news yet on RC program authorization

We remain, so far as I can see, in the position described in my previous posts about reauthorization efforts.

As previously discussed, we are waiting for a legislative vehicle to arrive, and for Congress to be willing to load an EB-5 bill onto that vehicle. Industry advocates are striving behind the scenes to make these conditions come true as soon as possible.

Industry hopes for a vehicle are currently focused on the FY2022 appropriations act, which is due by December 3, 2021, unless delayed again. (Delay looks likely, considering the number of contentious issues before Congress.) See Aaron Grau’s article A Lesson in Legislation for helpful background and definitions, and my September Updates post for examples of how omnibus timing has worked in recent years.

Industry hopes for an EB-5 bill are now focused on a consensus bill that has reportedly been agreed-to by EB-5 advocates, and presented to key members of Congress (who may also make changes). EB5IC has talked about this for awhile, and IIUSA acknowledged a consensus effort on October 1 (a significant development). The text of this consensus bill remains a tightly-held secret, possibly because it is agreed-upon and uncontroversial. The drafts I’ve seen show a revised version of S.2778 from last Congress. The bill is a holistic alternative to Senator Grassley and Leahy’s reform-focused EB-5 bill (S.831/HR 2901).

Considering the lack of fallback for reauthorization, I can only hope the best for the industry consensus EB-5 bill, whatever its quality, wisdom, and chances in Congress. This is what industry decided to ask Congress to pass as part of FY2022 appropriations, or the soonest available vehicle. It is the candidate.

The content of FY2022 appropriations is still being debated. So far, no EB-5 language was included in the Democrats’ preliminary draft FY2022 Appropriations bill text, which was released on October 18 by Senator Leahy as Chairman of the Senate Appropriations Committee. (Full text available here, the Republican reaction here. If there were a clean RC program extension, it would be together with the other immigration extensions on p. 62 of the Homeland Security bill. But a simple extension is not in the draft bill, and is not expected. All sides expect reauthorization conditional on program reforms, after Congress chose to break the cycle of clean RC extensions in December 2020.) It’s early days yet, and much negotiation remains before appropriations bill content gets finalized. Who knows, maybe Senator Leahy will decide that he likes and wishes to advance the industry alternative competitor to his EB-5 reform bill. Maybe other influences will prove stronger. We the public may not know until the last minute before passage whether EB-5 legislation of some kind (the industry’s hoped-for bill, or minimum investor protections) can finally get a seat on the appropriations vehicle. or another near-term vehicle. And we may not know until December whether “the last minute” for appropriations is indeed December 3, or a later date. (From what I’m hearing so far, a later date is likely.)

Considering the nature of the process, I do not expect to have anything very significant and unambiguous to report on EB-5 legislation before late November at earliest. It will probably be later, considering that the contentious appropriations process looks likely to extend beyond the immediate December 3 deadline. My next EB-5 articles, as time permits, will be on USCIS processing updates, visa availability, and due diligence. In the meantime, I am busy with my regular work of writing business plans.

While I do not expect much public information in the next month, I do expect intensive activity behind the scenes that advocacy group members may still have a chance to influence. If your life depends on this, join an advocacy organization to keep informed and involved. (Even better, join more than one group, to reduce vulnerability to messaging. And hold on to personal sense and knowledge, as defense against doublethink. One hears quite a bit of “2+2=5.”)

As a reminder, IIUSA posts updates on its blog, EB5IC reps post videos here, and AIIA has a blog here and holds regular donor update calls (with one upcoming this week Friday).

I have reopened comments, to facilitate input from readers. (As before, a reader’s first comment on this blog gets held for manual approval, while subsequent comments post automatically.) Let’s focus on what could be helpful, and language we would use face-to-face. Twitter can have the snap reactions, while advocacy groups are the best place to organize efforts and channel emotion toward constructive outcomes. Ideally, this small corner here can stay safe for thoughtful discussion and info-sharing, as it has been for many years.

USCIS Website Alert 10/4 Update

The EB-5 page at USCIS.gov has updated its alert regarding policy for processing during the regional center program sunset. I’ve copied below a redline that compares the Alert published on October 4, 2021 with the the Alert previously published on July 1, 2021. The major difference is that USCIS now gives a deadline for re-evaluating its “hold” policy (end of calendar year 2021), and states that Form I-765 and I-131 continue to be accepted and adjudicated for “these” (undefined) pending Forms I-485. The Alert does not say that USCIS will start denying petitions on January 1 if the RC program is not reauthorized by that time, but does warn that they’ll reevaluate at that point. Congress seems to need cliff-hanger deadlines to make them act, and USCIS is now offering one.

I haven’t enabled comments for this post, because I’ve noticed my blog discussion tending in an unconstructive direction. In lieu of commenting on this post, I encourage contacting legal advisors with any questions about the policy, and contacting advocacy groups to support efforts to expedite reauthorization and protect in-process regional center applicants and their investments.

— * —

USCIS Website Alert as of July 1October 4, 2021

Alert: Statutory authorization related tofor the EB-5 Immigrant Investor Regional Center Program expiredended at midnight on June 30, 2021. This lapsesunset in authorization does not affect EB-5 petitions filed by investors who are not seeking a visa under the Regional Center Program. Due to the lapsesunset in authorization related tofor the Regional Center Program, USCISwe will reject the following forms received on or after July 1, 2021:

• Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program, except when the application type indicates that it is an amendment to the regional center’s name, organizational structure, ownership, or administration; and
• Form I-526, Immigrant Petition by Alien Investor, when it indicates that the petitioner’s investment is associated with an approved regional center.; and
• In generalForm I-485, Application to Register Permanent Residence or Adjust Status, and any Form I-765, Application for Employment Authorization, and Form I-131, Application for Travel Document, associated with a Form I-485 application that is based on a Form I-526 filed by an approved regional center.

Until further notice, we will hold (that is, not act on) any pending petition or application of these form types that is dependent on the lapsed statutory authority until further notice.and was filed before the end of the statutory authorization. At the end of calendar year 2021, unless there is new legislation for regional centers, we will reevaluate whether to keep this hold in place. If we wrote to you were issued written correspondence regardingabout your petition or application on or before June 30, 2021, you should review theour written correspondence and respond by the due date (as applicable). Although USCIS is unable to we cannot review your response at this timeright now, we will receive and maintain thekeep your response for review if circumstances change.

We will continue tostill accept and review Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, in the normal course,Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status, including those filed on or after July 1, 2021.

We will begin rejecting all Forms I-485, Application to Register Permanent Residence or Adjust Status, and any associated Forms I-765, Application for Employment Authorization, and Forms I-131, Application for Travel Document, based on an approved Regional Center Form I-526.

In addition, we will keep on hold (that is, not act on) any Form I-485 that is based on a Form I-526 for an approved regional center; the Form I-526* must have been filed before the end of the statutory authorization. At the end of calendar year 2021, unless there is new legislation for regional centers, we will reevaluate the hold. We will accept and adjudicate Forms I-765 and I-131 relating to these pending Forms I-485.

We will provide further guidance to the public if circumstances change or further guidance becomes necessary.

*Suzanne’s note: I guess this is a typo, and USCIS meant to say “Form I-485.” Otherwise, it’s puzzling.

I-829 alert for investors from the ’90s

In another nice indication that the Investor Program Office is trying to get EB-5 processing back in order, it has updated the EB-5 page at USCIS.gov with a new “Alert” — this one targeted to people with pending I-829 petitions that were filed before November 2, 2002, and based on I-526 approved 1995 to 1998. Apparently USCIS wants to finish processing a batch of I-829 has been held in abeyance for 20 years, and is calling for contact info so that they can schedule biometrics appointments. (There’s a story behind the long delay that’s not IPO’s fault — I described it at the end of a 2020 post, and now in a comment to this post.) Other EB-5 “Alert” language on the USCIS website remains unchanged, suggesting no near-term change to the applied regulations or to the processing freeze for regional center I-526 and I-485. USCIS is excellent at holding petitions in abeyance.

As a reminder, I-829 processing continues for regional center as well as direct EB-5 cases, even during the regional center program lapse. (“We will continue to accept and review Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, in the normal course, including those filed on or after July 1, 2021.”) Current regional center program authorization is necessary to get a regional center visa, but not a condition to keep and remove conditions on that visa. Loss of regional center sponsorship does not in itself change I-829 eligibility. This Q&A from a November 2020 stakeholder engagement discusses the “what if” of individual regional center termination, and could also apply to the unlikely (we trust) event of regional center program termination.

(12) Q: Would a Form I-829 case adjudication be affected by the termination of its sponsoring regional center, if all other requirements have been met, such as job creation, etc.?

A: It depends on the facts of the case. An immigrant investor’s conditional permanent resident status, if already obtained, is not automatically terminated if the investor has invested in a new commercial enterprise associated with a regional center that USCIS terminates. The investor will continue to have the opportunity to demonstrate compliance with EB-5 program requirements, including through reliance on indirect job creation. However, there are times when the reason a regional center has failed to promote economic growth and USCIS has terminated its designation which may have a bearing on the I-829 adjudication. For example, depending on the facts of a particular case, if a regional center was terminated and there was evidence of misappropriation, such evidence could undermine the petitioner’s ability to make the showings required under 8 CFR 216.6. In such a scenario, it is not the termination of the sponsoring regional center that is affecting the I-829 adjudication but rather an evaluation of the applicable eligibility requirements.

September Updates (USCIS input, RFEs, legislation)

A few updates and resources.

USCIS Feedback: This week was the deadline for response to the nice USCIS “EB-5 Question” feedback request. I sent comments, and assisted with the list of questions on behalf of EB-5 investors submitted by AIIA.  

RFE Policy: USCIS today announced another extension to “Flexibility for Responding to Agency Requests.” For notices sent through January 15, 2022, USCIS will consider a response to RFE, NOID, and other notices received within 60 calendar days after the response due date.

IIUSA Forum: IIUSA has announced the schedule and speakers for its Virtual EB-5 Industry Forum November 2-11. Early bird tickets are available until October 1. All prospective and current EB-5 investors and international stakeholders are invited to participate for free, which is a great opportunity. I was just sorry to not see Charles Oppenheim on the schedule for his annual EB-5 update.

Chats with Charlie: Speaking of Charles Oppenheim, he continues to do excellent live chats monthly on the Travel.gov Youtube channel. The October Visa Bulletin chat last week did not directly address any EB-5 questions, but I’ll quote one important point: “Only a certain amount of water can go through a straw regardless of how much water you try to pour down it.” He was talking about the record-breaking number of EB visa numbers to be available in FY2022, and how Consulate and USCIS capacity will naturally constrain how many of those numbers can be issued. EB-5 visa availability for FY2022 is a wonderful 262,288*0.071=18,622, according to the September Visa Bulletin. If only those visas could be issued and reduce backlogs, rather than lost due to legislative delay and limited processing capacity.

Legislation: Two things happened this week that affect timing prospects for EB-5 legislation and reauthorization.

The House passed a Continuing Resolution that defers the deadline for the annual appropriations bill from September 30, 2021 to December 3, 2021. The appropriations bill is one hope as a vehicle for EB-5 legislation, and that particular hope is now deferred to December. (Assuming that the House CR passes, as there’s still some dispute over it, but we’ll know on Monday when the Senate takes it up.) The House and Senate appropriations websites discuss the detail and link to text. The House CR text does not mention EB-5, and does not cover EB-5 by default (as happened in the past) since RC authorization is not coupled with FY2021 appropriations. I do not blame industry for missing a CR opportunity for EB-5 legislation, because Continuing Resolutions are not generally opportunities for special interest items. CRs for the past five years at least have been budget-focused with just a few extra provisions for general-interest high-profile emergencies – as happened again this year. I expect to see the final appropriations bill (which is a large vehicle) a few days before December 3, or else to see another CR in December to defer the deadline into early Spring. (It’s also possible that Congress could finalize an appropriations bill well ahead of deadline — they just haven’t in the five years that I’ve watched the process so far.) Whether Congress will agree to attach something EB-5-related to the appropriations bill or another vehicle remains to be seen, and presumably continues to depend on what’s asked and who’s asking.

Meanwhile, the Democrats’ separate attempt to attach immigration legislation to budget reconciliation had a setback, thanks to block by the Senate parliamentarian. The specific “Build Back Better” immigration legislation content was not very helpful for EB-5 (limited to benefit options for adjustment of status plus a visa recapture that couldn’t help much in practice thanks to that capacity straw Oppenheim talks about, and EB-5’s use-it-or-lose-it position for roll-over numbers), but the immigration effort was extremely significant. If passed, it could have cleared the path for EB-5 needs to be addressed. While Democratic leaders are still waiting to resolve the immigration issues that are on-brand and top priority for them and the Biden Administration (DACA, TPS, visa relief for immigrants working in the U.S.), there’s limited chance that they’ll put their weight behind immigration benefits that are not on their talking point list of priorities, including for immigrant investors patiently waiting outside the U.S. We need non-EB-5 immigration relief priorities to be addressed ASAP, because any deferral naturally further defers the chance for political capital spent specifically on EB-5. (For Administration priorities, see the White House blueprint for immigration, and my blog discussing visa relief proposed by the White House-backed U.S. Citizenship Act. The text of the immigration proposal advanced and stalled this month is available on the House Judiciary Committee website under Chairman Nadler Announces Committee Print for Full Committee Markup of Build Back Better Act. Roll Call’s 9/19 article Senate parliamentarian rejects Democrats’ immigration bid provides analysis, including quotes from the cast of Senators on whom we rely for EB-5 legislation. An MSN article from July Republican immigration proposal falls flat gives further background.)

Regional center program authorization and reform legislation should still theoretically have a near-term chance despite the immigration reform setbacks, because EB-5 legislation does not have to be an immigration bill in awkward precedence over stymied immigration priorities. EB-5 legislation can alternatively be an economic development and enforcement issue. But it depends on us, and what we ask for in legislation. We know that EB-5 investors need relief just as much as Dreamers and immigrant workers do, so it’s hard not to ask. If only the Administration’s immigration priority issues can be resolved as soon as possible, so that lawmakers can celebrate that win and move on to consider our benefit. Unless and until that happens, consider how much Congressional leaders can afford to give EB-5 and speak with the media about afterwards, beyond an enforcement-focused reauthorization such as Grassley/Leahy proposed.

Meanwhile, there’s apparently still time to think through EB-5 legislation. I’ve heard rumors and counter-rumors about possibly-finalized bills, was briefly hopeful, and then became the target of some personalized propaganda that gutted and mortified me. But I still have hope, because the EB-5 ecosystem includes good and smart people. Now is the time for all good men to come to the aid of their party, apply intelligent scrutiny and honorable pressure, and dilute the forces of myopia and cupidity. I’m particularly looking to regional centers to exert positive influence. The future depends on it.

We’re all in this together

This blog focuses on the technicalities of EB-5 for my small audience of industry insiders. Since I do not have a general audience, I do not think very much about messaging. But I realize that in focusing on details, I can tend to focus on the negative.  Particularly with respect to legislation and the regional center reauthorization debate, it’s easy for analysis to get stuck in distinctions and divisions and lose focus on the big picture of what we’re all trying to accomplish and why.

This post takes a step toward rectifying that balance, by stepping back to also look at the big picture of what unites our efforts as we try to make EB-5 work.

Regional Centers and EB-5 investors are in this together

In thinking about specific legislation, it’s easy to focus on details where regional center and EB-5 investor interests may be at odds. Both the Grassley/Leahy bills and the holistic faction bills have historically included a few divisive provisions that attracted just criticism. But, do not conclude from this that regional centers and EB-5 investors are on opposing sides when it comes to EB-5 advocacy.

In fact, the interests of regional centers and EB-5 investors are very closely intertwined, and they depend on legislation that maximizes each other’s chance for success.

EB-5 investors need legislation that keeps the EB-5 program viable for regional centers, because regional centers need to stay in business long enough for investors to complete the immigration process under regional center sponsorship. If regional centers lose authorization, are overburdened with costly regulation, and practically cannot continue to do business, that’s not good for them, and equally not good for investors whose immigration process and capital repayment practically depend on the regional centers staying business.

Regional centers need legislation that keeps the EB-5 program viable for their investors, because that’s the only path forward for investments. It’s not like regional centers have the option, in most cases, to simply return investor funds in case of disappointment. If the regional center honestly did its job and followed all the EB-5 rules, then investor funds are not sitting in a bank account, but rather deployed out in the economy funding job-creating projects. If the U.S. government bails on the EB-5 visa promise to investors, what can regional centers do? No regional center wants to find itself with investors trying to give up and withdraw en masse, especially considering practical limitations. Regional centers do not want to face lawsuits from investors who don’t have anyone else to sue, even if the regional center cannot practically force Congress to honor the visa promise or force investments to exit earlier than allowed by market conditions and investment agreements. For the sake of their own survival, regional centers have incentive to push legislation that helps their investors keep the immigration hope that underwrote the EB-5 investment.

These intertwined interests mean that all sides have valid reasons to be for and against aspects of the Grassley/Leahy bills, and for and against aspects of the holistic reform bills. The divisions among industry groups and compromises over legislation are not as clearcut as I might have implied in previous posts, when I focused on details and tried to set everything out in table form.  Certainly, there cannot be a conspiracy of regional centers against investors or vice versa, considering how interdependent investor and regional center interests really are in practice. “United we stand, divided we fall” is the simple truth when it comes to EB-5 investor and industry interests in reauthorization legislation. Any final legislation will be a compromise with some wins and losses, considering what’s practically possible and allowable by Congress. But I hope that every industry group is working hard to achieve compromise that will balance its own interests with the interests of groups on which it also depends. As an industry, we are truly in this together, and if any negotiators aren’t acting that way already, they must change.

Investors from around the world are in this together

There’s a historical fissure between EB-5 investors from China and other countries over advocacy around the Fairness for High-Skilled Immigrants Act, which naturally divided immigrants from different countries and categories into those who benefit from and those who are hurt by the country cap law. But when it comes to reauthorization legislation, or at least grandfathering for existing EB-5 investors, people from all over the world have every reason unite to preserve the regional center immigration opportunity. The country cap discussion is valid and on-going, but it is separate from and need not derail cooperation to support reauthorization or at least grandfathering. And for the future, investors from other backlogged countries will shortly realize why they need to join the long-standing Chinese effort to push for visa relief.

The country, Congress, and the industry are in this together

Most important, I should re-emphasize the big picture that good EB-5 legislation is not just a win/win for regional centers and investors if it passes and a lose/lose if it fails, but a wonderful benefit to gain and a tragic loss to avoid for the U.S. economy, and for everyone in Congress who has additional jobs and economic activity and tax dollars in their districts thanks to EB-5 investors and investment. It can feel like Congress is against us and has to be begged and wangled, but if so that reflects Congressional ignorance more than fundamentally opposing interests.

Who gains from a program that has injected billions of dollars into the U.S. economy and created tens of thousands of jobs, with no tax-payer cost and indeed positive tax benefit thanks to attracting productive new tax-payers? Everyone. Who loses, if the U.S. government is seen to default on the promise that it used to attract that investment? Everyone. Who loses, if the rug is pulled out from under billions of dollars invested in on-going projects just as the economy is struggling? Everyone. Who should want a continued incentive for foreign investors to bring their entrepreneurial spirit and investment dollars to the U.S.? Everyone.

The real if not the perceived interests of Congress and the country as a whole are on the side of reauthorizing the regional center economic development program. We can rightly worry that Congress is not well-informed about those interests (and thank IIUSA, EB5IC, AAED, AIIA, and anyone else who is working hard now to inform their representatives about what EB-5 involves), but the interest certainly and demonstrably exists. We can call for reauthorization with a pride and confidence rooted in the fact that a healthy EB-5 program truly is a wonderful economic benefit for the country, and to the government that represents us.

The fight for EB-5 legislation continues

What is the path, timeline, and content for regional center program reauthorization legislation? This urgent question should be directed toward advocacy groups and official advisors, not to a business plan writer and spare-time blogger. But, a few notes and resources for reference, as we find ourselves in the drama-filled month of September.

The regional center program can be reauthorized as soon as (1) there is a vehicle to which reauthorization legislation could be attached, and (2) Congress agrees to reauthorization legislation that satisfies the EB-5 industry.

The first condition — available vehicle — potentially exists now, as Congress works on major funding and infrastructure bills. The industry’s best near-term hope for legislative vehicle for reauthorization may be the omnibus Appropriations Act, which is due to be passed by September 30 before the start of every fiscal year, and which must get passed eventually. (Here’s the recent history: FY2016 appropriations (due September 30, 2015) passed in December 2015; FY2017 appropriations was delayed until May 2017; FY2018 passed in March 2018, FY2019 passed in February 2019, FY2020 passed in December 2019, and FY2021 passed in December 2020.) The Hill speculated last week that the FY2022 appropriations act due the end of this month may also be deferred to December.

When Congress misses the September 30 deadline to fund the new year, as usual, they fill the gap with one or more Continuing Resolutions, which extend the deadline on the previous year’s appropriations act. CRs by nature are smaller and more limited than an appropriations act (fewer pages), and thus less hopeful for miscellaneous additions. It’s possible that a hefty EB-5 reform bill could be attached to a CR this month, but I’d be surprised. I assume that the larger appropriations act, whenever that passes, is the industry target for EB-5. (From 2015 to 2020, regional center program authorization was not specially mentioned in CRs, but extended by default in CRs thanks to RC authorization being attached to the previous year’s appropriations. This year, a CR deadline extension would not help in and of itself, because RC program authorization is now decoupled from the FY2021 appropriations deadline.) FYI my log of past regional center program extensions includes a list of continuing appropriations and appropriations acts for the past six years, with dates and links. Note that “610(b)” or “203(b)(5)” are search terms to locate EB-5 content in a bill. (The bare minimum language needed for reauthorization is this sentence: “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 [future date] for ‘’September 30, 2015’.” An EB-5 reform bill will include a sentence similar to “Section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)) is amended…”)

The timing for the second reauthorization condition – agreement by Congress to industry demands – is an open question. I already discussed my understanding of the field in my post Sizing the Reauthorization Hurdle. EB5IC and AAED are still committed to advance an alternative to the sub-optimal Grassley/Leahy EB-5 reform bill — an alternative that would not only reauthorize the RC program but add provisions to make the program more viable. This ambitious agenda has powered through blocking the Grassley/Leahy bill in June, seeing the RC program expire, and missing the Senate infrastructure bill opportunity.  How long will it take for these ambitions to finally be either accepted by Congress or moderated by industry? Lobbyists realize that patience is limited, and are reportedly working very hard to get Congress to agree to reauthorization soon, before investors, USCIS and Department of State give up on regional center petitions and applications. (As evidence that “the last minute” has already arrived, a USCIS leaker tells me that 154 EB-5 investors withdrew their I-526 petitions just in the last two weeks. Action is needed soon to stop the bleeding.)

I see three theoretical possibilities for the content of reauthorization legislation: (1) what industry groups including EB5IC and AAED want (legislation not yet made public, but reportedly based on S.2778 from last Congress); (2) what Senators Grassley and Leahy want, based on their S.831/HR.2901; or (3) a reauthorization that simply extends the RC program expiration deadline short-term in connection with the appropriations deadline, with no attached reform provisions. I discussed these options in detail a couple months ago in my post EB-5 legislation and the question of options (Grassley’s S.831 vs. the “holistic” S.2778). Of these, only the first appears a practical possibility at the moment.

 #3 is what we got every year from 2015 to 2020: short-term extensions to give the industry more time to agree on EB-5 reform legislation. #3 looks less probable now, since Congressional leadership went out of their way in December 2020 to decouple RC program authorization from appropriations, ostensibly to force the EB-5 legislation that’s already been deferred for five years.

#2 also seems improbable, since Senators Grassley and Leahy have not demonstrated the power to overcome industry opposition to get their reform bill passed. True, Senator Leahy can claim credit as the “driving force” for all regional center program authorizations from 2003 through 2012, and IIUSA has been willing to support the continued Grassley/Leahy reauthorization effort. But EB5IC has celebrated success in blocking Grassley/Leahy EB-5 legislation since 2015 (with other industry groups including U.S. Chamber of Commerce and the Real Estate Roundtable), and industry most recently demonstrated the will and power to block the Grassley/Leahy reauthorization path in June 2021.

So we’re left to hope that Congressional decision-makers might eventually agree with what industry groups want with reauthorization. EB5IC and AAED report that legislation is drafted and ready to go behind the scenes, though the text has still not been disclosed to the public.  (“They love the darkness better than the light because____” “…because their bill text includes no poison pills for Congress and honors promises to industry stakeholders.” Maybe.) To be fair, Grassley/Leahy also tried to get their EB-5 reform bill passed last year without disclosing it until the very last minute. This is politics, apparently. EB5IC and AAED report having secured some key Congressional support for their legislation. We shall see whether the support is sufficient to get Congress to shortly attach reauthorization to a bill that will pass.

Whether the industry effort has universal industry support may be irrelevant at this point. The main issue and question is probably just Congressional support. (One thing I don’t know: whether industry forces that have kept entire public silence this time but influential in past legislative efforts (e.g. U.S. Chamber of Commerce, Related Companies, and U.S. Immigration Fund) may exercise veto power behind the scenes. Since IIUSA’s bottom line goal is reauthorization one way or another, I think it would and could not stand in the way of any bill moving forward. But not sure about the others.) In taking control of the ball for EB-5 legislation and running with it, EB5IC and AAED are now positioned to be showered in gratitude or criticism, depending on how their play turns out.  

Note that public-facing messages from EB5IC and AAED can be found on the Pathways EB5 Vimeo site and the AAED wechat. (If anywhere else, please let me know and I’ll publish.)

Separate from the regional center program authorization issue, the EB-5 category could be affected as part of other immigration proposals being discussed now. See “Democrats make immigration case to Senate parliamentarian” (September 10, 2021) in Roll Call and “Chairman Nadler Announces Committee Print for Full Committee Markup of Build Back Better Act” (September 10, 2021) at house.gov (including link to the proposed immigration provisions). This particular immigration proposal promises limited EB-5 impact, and I’ll wait to analyze it until it makes any progress. But something like this is probably the best hope for EB-5 visa relief. EB-5 visa relief bundled with reauthoriation legislation would just make the reauthorization controversial, by making it a stand-alone immigration issue rather than an economic development issue. EB-5 visa relief theoretically has better politics and opportunity as bundled with visa relief for other visa categories that are immigration priorities for the Administration, and supported by other powerful industries. (My post from a few months ago discusses Analyzing potential changes to EB-5 visa availability.)

Meanwhile, a reminder for those negotiating for Chinese investor interests to examine examine “parole.” The prospect of parole with work authorization appears to be a key bargaining chip within the industry for EB-5 legislation, and also wreathed in hopes that do not match the highly conditional and temporary benefits in existing immigration parole programs. See the Congressional Research Service report on “Immigration Parole,” for an overview, and program details on the USCIS page for Parole for Individuals Outside the United States.

I’d also like to repeat my hope and trust that the visa-set-aide proposal has already been excised from the S.2778 template. (Set-asides meaning 3,000 EB-5 visas per year set aside for new TEA investors, and thus deducted from the pool historically leftover from low-demand countries and issued to the oldest backlogged Chinese visa applicants). Lobbyists have publicly disclaimed queue-cutting set-asides. But just in case anyone is tempted to keep pushing set-asides despite lingering visa backlogs, I suggest reviewing Shakespeare’s Richard III, Act 4 Scene 4 (start at line 210). See how Richard approaches his sister-in-law Queen Elizabeth, whose sons he has slain, to woo her daughter as his wife. Richard counts on Elizabeth’s ambition to make it work, and argues the past sacrifice can be covered by future benefit for her. But Elizabeth points out that her daughter “cannot choose but hate thee, having bought love with such a bloody spoil.” I like to think that Chinese migration agents would stand up like Queen Elizabeth, if asked to take a bloody spoil of set-aside visas to woo new investors. How wonderful if the China market could re-open with visas available for new investment! But that bright possibility must depend on visa relief not bought with visa pain for past Chinese investors. There must be good faith with past investors — not merely in intention (“but we did not mean set-asides to hurt, and we did mean other provisions to compensate” — a classic Richard III line), but in the real-world results of legislative changes. Ideally we could get backlog relief, which is essential to EB-5 program health and future. At minimum, let’s all keep responsible to avoid net backlog harm from any new EB-5 legislation. Long-suffering Chinese investors deserve good advocacy now, considering that they already committed billions of dollars and spurred creation of tens of thousands of jobs in the U.S. economy.

UDPATE: As this post ended on rather a low note, see also We’re all in this together.

Sizing the reauthorization hurdle

I’ve been overwhelmed with everything that could be written, in this period of unparalleled transition, opportunity, and existential crisis for the EB-5 industry and investors. I’ll start by getting out a few words on the elephant of regional center program reauthorization, so that I can move on to many updates about USCIS processing, policy revisions, visa numbers and timing, and direct EB-5. And my business plan writing day job, also.

Before I begin my editorial about reauthorization, note that I’m summarizing and commenting from a distance on what I’ve read and heard. You can get more information and direct involvement by joining an advocacy group. Regional Centers and service providers can join IIUSA and/or EB5IC to get educated and influence legislative efforts. For EB-5 investors, I recommend joining AIIA. This organization is off to an impressive start in getting meetings with Congressional staff and industry decision-makers, and holds regular video call updates to involve and inform even small donors. For Chinese investors specifically, I see that AAED has recently been the largest spender on EB-5 lobbying.

And now, my perspective on the outlook for regional center program authorization.

Question: When will the regional center program be reauthorized? Answer: after Congress agrees to the industry’s reauthorization wish list, or the industry backs down and accepts sub-optimal reauthorization legislation. Practically, September 2021 now appears to be about the earliest that reauthorization could happen, and the latest it should happen.

Everyone seems to agree that regional center program authorization can’t get passed as a stand-alone bill, but must get loaded onto one of the big legislative trains going through Congress. That could mean the infrastructure bill being finalized right now, or the budget reconciliation and appropriations bills that will come up in September. The disagreement comes with the question: how big a reauthorization bundle can and should we try to load onto a legislative train?  How small a bundle can the industry agree to present, and how large a bundle will Congress be willing to take onboard?

With S.831/ H.R.2901, Senator Grassley made a relatively small bundle: just reauthorization with integrity measures. Integrity measures are not fun for the industry, but they are politically uncontroversial. No Congressperson is going to get slammed in the media or face an election challenge for having voted for integrity measures. EB-5 industry groups dislike some details, but they unite in saying that they support integrity measures. The industry association IIUSA supports S.831 because it’s a small bundle, and thus relatively easy to fit on a legislative train. The industry association EB5IC opposes S.831 because it’s a small bundle, and thus leaves some important industry priorities behind on the platform. EB5IC accepts reauthorization and integrity measures, but wants that to be bundled together with programmatic changes to reopen new investment: TEA/investment amount changes and visa set-asides. AAED, the group lobbying particularly for Chinese investors stuck in a terrible backlog, wants reauthorization to be bundled with visa relief.

Both EB5IC and AAED see reauthorization as the prime and only near-term chance to get what they need on a legislative train, and thus they balk at allowing a smaller reauthorization bundle to proceed instead. But the things that EB5IC and AAED want to add to reauthorization are politically controversial, thus increasing the risk that legislative trains will pass by without accepting such large bundles.  A Congressman can get slammed in the media and his next primary for having been seen to support TEA changes that obviously benefit prosperous urban developers. If he supports additional visas or new admissions for EB-5, he’ll incite everyone who’s against immigration, and also spark opposition from everyone who’s in favor of immigration but wants the same benefits for different categories. The politically-costly legislative bundles contemplated by EB5IC and AAED would have some great benefits for the EB-5 industry, if only they could be passed, but they create a high political hurdle for reauthorization. The industry has previously agreed that that TEA and visa relief asks are desirable, but now disagrees as to whether they’re at all achievable.  

And thus the reauthorization fight so far has happened on the loading dock, with disagreements about what to try to get on a train together with reauthorization. When Senator Grassley, with IIUSA’s support, brought S.831 up for Unanimous Consent on June 24, Senator Graham, pushed by competing industry factions, blocked S.831 from passing the Senate. In their webinar on June 24 prior to the Unanimous Consent effort, EB5IC explained the reasoning behind this block: they said that they do support integrity measures, but do not want a long-term reauthorization that omits and thus defers their other priorities of TEA/investment amount changes and visa set-asides.  (Senator Grassley attempted to compromise by offering the industry a shorter-term reauthorization – 2.5 years instead of 5 years – but this was not accepted.)  EB5IC went on to reference their negotiations behind the scenes for alternative legislation, and foresaw the infrastructure bill as a possible vehicle, with Senator Schumer as a possible champion willing and able to heft a larger and more valuable reauthorization bundle onto that vehicle.

We spent the month of July waiting, wondering if the industry factions with the will and power to temporarily block the advance of the low-risk low-reward Grassley reauthorization bill would also have the will and the power to advance a more ambitious alternative path to reauthorization. Senator Schumer and his group finalized the text of the infrastructure bill yesterday. The text as of August 1 spans over 2,000 pages and covers a number of economic development programs. It does not include the regional center program. I’m sad but not surprised. With all the effort to rid the infrastructure bill of controversial elements, could Senator Schumer possibly have agreed to pick up a heavy reauthorization bundle weighted with controversial elements, as had been hoped? And yet would industry groups have allowed him to pick up less, considering their objectives for reauthorization?

If the infrastructure bill proves to be a missed opportunity, then industry groups should re-assess how much they can expect and afford to demand in the next reauthorization attempt.  If Congressional negotiators wouldn’t touch TEA changes and EB-5 visa relief in the infrastructure bill, would these asks have a chance to board the next legislative train? Senator Grassley’s S.831/H.R.2901 remains an option, if the industry can accept a medium-term reauthorization with integrity measures, and without other programmatic changes in the medium term. The option of a “clean” no-change short-term reauthorization with the September funding bill is impossible, if Senator Grassley has power to make good on his strongly-worded promise to block such a move. A clean long-term reauthorization is even less an option, since no one but IIUSA would support it. Senator Grassley would oppose it as long-term deferral of his priority integrity measures, while industry groups would oppose it as long-term deferral of their priority programmatic changes. So long as we get long-term reauthorization at all, it’s going to be a bundle of some kind – a bundle that’s a compromise between what the interested parties want and what the interested parties are willing to give. (I don’t bother to account for the majority of Congress and the public who hardly realize or care that EB-5 even exists, and who lack the interest or the power to affect RC program authorization.)

We cannot afford to miss the next opportunity for legislative vehicle. Senator Grassley has little reason to shed tears if the regional center program stays expired due to dissatisfaction with his bill, which he is supporting for his own reasons and not on behalf of constituents. Industry groups do have reason to seriously consider compromise on their priorities, if necessary to get authorization, and the Senators only involved as a favor to constituents have reason to listen to them. AAED’s investor constituents have already suffered greatly from RC program expiration, with long-awaited consular interviews in Guangzhou scheduled and then abruptly cancelled, U.S. jobs lost, and thousands of visas going to waste. Chinese investors have much to lose if reauthorization happens without visa relief, but likely even more to lose from forcing reauthorization to wait for the blue moon of achievable visa relief. Some regional centers are hardened by belief that the EB-5 program is dead with or without reauthorization, unless Congress adds programmatic fixes. But regional center constituents will suffer too if the program stays expired long enough to result in mass I-526 denials, investors fighting for exits for their capital, and wide reputational damage. Regional center EB-5 petitions and applications are being held in abeyance for now, not denied, but USCIS and Department of State may reassess that policy if the fiscal year ends on September 30 with no progress yet toward RC program authorization. That’s a lot of pressure on industry to get reauthorization legislation attached to one of the legislative vehicles available by September 2021, one way or another. Let’s be serious about making reauthorization as probable as possible within that informal deadline. Reauthorization runs genuine risk of continuing to miss the train indefinitely, unless we are realistic.

This is my understanding, based on what I’ve read and heard. You’re welcome to post dissenting views in the comments. But even better, take action that makes a difference. Get involved in advocacy, get the interested factions to hear your voice, and let good results prove you right.

And finally, because I’m a business plan writer and prefer tables to paragraphs, here’s an attempt to summarize the various interests and priorities in table form.

USCIS Policy Manual EB-5 Updates (regulations, reauthorization, indebtedness, CSPA)

The USCIS Policy Manual is a fluid online document that gets edited periodically, with and without notice, which is exciting and disconcerting. Being someone who likes to know the rules, I save copies of the PM at different dates, and redline changes. In July 2021, USCIS made several PM updates that affect EB-5. However, redline shows that the updates are minor, and reflect policy that’s been in place for awhile already. Here’s my document highlighting specific EB-5 content added to the PM in July 2021.

1. Regulations update. I’d wondered when USCIS would acknowledge the Behring lawsuit win by revising policy language about EB-5 investment amounts and TEAs. On July 15, 2021, USCIS made a minimal Policy Manual revision: simply copying and pasting the same “Alert” about the Behring lawsuit that’s on the USCIS website EB-5 homepage into the beginning of Policy Manual Volume 6 Part G, Chapters 1, 2, 3, 4, and 5. USCIS did not revise the body of the PM.  So if you go to Chapter 2 today, the body of the chapter still says that the EB-5 investment amount since November 21, 2019 is $1.8 million, or $900,000 in a USCIS-designated TEA, but the header alert clarifies that the required EB-5 investment amount is $1.0 million, or $500,00 in a state-designated TEA and “In other words, we are applying the regulations in effect before Nov. 21, 2019 in this chapter.”  With this update, USCIS takes another important step to officially acknowledge the Behring lawsuit outcome. At the same time, the minimal note implies that someone does not expect the outcome to last long enough to justify actually revising rather than merely footnoting the old policy language.
2. Regional Center lapse update. Also on July 15, USCIS acknowledged the regional center program expiration by adding an “Alert” to the beginning of Policy Manual Volume 6 Part G, Chapters 1, 2, 3, and 4 (but not Chapter 5 on removal of conditions). Again, the body of the PM was not revised, presumably reflecting hope that the RC program expiration also will not last long. The “Alert” added to the PM is identical to the first half of the “Alert” put on the USCIS website regional center page. The PM alert does not include the language about RFE response, I-829, or I-485.
3. CSPA: On July 26, USCIS announced a Technical Update – Adding References to the EB-5 Visa Program in Child Status Protection Act Guidance. It appears that the single change was to add the words “Immigrant Petition by Alien Investor (Form I-526)” to the list of applicable underlying forms for status adjustment.
4. Indebtedness: On July 22, USCIS announced a POLICY ALERT – Immigrant Investors and Investment of Loan Proceeds. Redline shows that this update did no more than to replace a couple words in the Policy Manual with the word “indebtedness,” and to add a footnote that “USCIS no longer follows its interpretation of indebtedness as including the investment of loan proceeds as of November 30, 2018, the date of the district court decision Zhang v. USCIS, 978 F.3d 1314 (D.C. Cir. 2020).” Since USCIS lost the Zhang court case in November 2018 and lost its final appeal of that decision back in January 2019, USCIS should have been “no longer following its interpretation” for over two years now already. The new Policy Manual footnote is merely a belated acknowledgement of that fact. See also the “Class Action Member Identification Notice” that’s been on the USCIS website EB-5 homepage for a couple years now. And more to the point, see Administrative Appeals Office decisions that sustain appeals of I-526 denials over loan proceeds. For example: JUN162021_01B7203 and MAR242021_01B7203. If you are a member of the class whose I-526 was “denied on the sole basis of investing loan proceeds that were not secured by their own assets,” you have had and still have the right to get that denial vacated and reconsidered.

USCIS Guidance for Regulations

USCIS has finally reacted to the court decision on the EB5 Modernization Regulation, with an Alert and note published at https://www.uscis.gov/working-in-the-united-states/permanent-workers/eb-5-immigrant-investor-program

Alert: On June 22, 2021, the U.S. District Court for the Northern District of California, in Behring Regional Center LLC v. Wolf, 20-cv-09263-JSC, vacated the EB-5 Immigrant Investor Program Modernization Final Rule (PDF). While USCIS considers this decision, we will apply the EB-5 regulations that were in effect before the rule was finalized on Nov. 21, 2019, including: 

–No priority date retention based on an approved Form I-526;

–The required standard minimum investment amount of $1 million and the minimum investment amount for investment in a Targeted Employment Area (TEA) of $500,000;

–Permitting state designations of high unemployment TEAs; and

–Prior USCIS procedures for the removal of conditions on permanent residence.

In other words, we are applying the regulations in effect before Nov. 21, 2019, on this website and in the USCIS Policy Manual, Volume 6, Part G, Investors. In addition, we again will accept the April 15, 2019, version of Form I-526, Immigrant Petition by Alien Entrepreneur, because the Nov. 21, 2019, version of the form reflects updates from the now-vacated rule.

The USCIS main page has a slightly different alert:

On June 22, 2021, the U.S. District Court for the Northern District of California, in Behring Regional Center LLC v. Wolf, 20-cv-09263-JSC, vacated the EB-5 Immigrant Investor Program Modernization Final Rule. We will apply the EB-5 regulations that were in effect before Nov. 21, 2019, and accept Form I-526 petitions filed on the April 15, 2019, version, which is the only form that DHS updated as part of the vacated rule. DHS, along with the Department of Justice, is reviewing the court’s ruling and is considering all judicial and administrative options for preserving important changes made by the vacated regulation. For more information, see the EB-5 Immigrant Investor Program page on our website.

USCIS Guidance for RC Lapse (updated)

10/4/2021 UPDATE: USCIS published revised guidance on October 4, 2021.

7/1 UPDATE: USCIS just replaced its guidance on the USCIS website page for Approved EB-5 Immigrant Investor Regional Centers with a new message that now says regional center Form I-485 and I-765 filings will not be accepted during the lapse. (The message is now also repeated on the main EB-5 page, the Form I-924 page, and the Form I-526 page.) The I-485 change is odd, since Department of State is accepting regional center visa applications, per the July 2021 Visa Bulletin. I’m copying below the guidance on 7/1, while keeping my original 6/30 post that records what USCIS said yesterday. Who knows how often I’ll need to update this post going forward, as USCIS changes its mind.

Statutory authorization related to the EB-5 Immigrant Investor Regional Center Program expired at midnight on June 30, 2021. This lapse in authorization does not affect EB-5 petitions filed by investors who are not seeking a visa under the Regional Center Program. Due to the lapse in authorization related to the Regional Center Program, USCIS will reject the following forms received on or after July 1, 2021:

Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program, except when the application type indicates that it is an amendment to the regional center’s name, organizational structure, ownership, or administration; and

Form I-526, Immigrant Petition by Alien Investor, when it indicates that the petitioner’s investment is associated with an approved regional center.

In general, we will not act on any pending petition or application of these form types that is dependent on the lapsed statutory authority until further notice. If you were issued written correspondence regarding your petition or application on or before June 30, 2021, you should review the written correspondence and respond by the due date (as applicable). Although USCIS is unable to review your response at this time, we will receive and maintain the response for review if circumstances change.

We will continue to accept and review Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, in the normal course, including those filed on or after July 1, 2021.

We will begin rejecting all Forms I-485, Application to Register Permanent Residence or Adjust Status, and any associated Forms I-765, Application for Employment Authorization, and Forms I-131, Application for Travel Document, based on an approved Regional Center Form I-526.

We will provide further guidance to the public if circumstances change or further guidance becomes necessary.

https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor-regional-centers/approved-eb-5-immigrant-investor-regional-centers

Original 6/30 post:

The USCIS website page for Approved EB-5 Immigrant Investor Regional Centers was just updated with this statement:

Alert: Statutory authorization related to the EB-5 Immigrant Investor Regional Center Program will expire at midnight on June 30, 2021, unless Congress reauthorizes it. A lapse in authorization does not affect EB-5 petitions filed by investors who are not seeking a visa under the Regional Center Program.

In the event of a lapse in authorization related to the Regional Center Program, we will reject the following forms received on or after July 1, 2021:

–Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program, except when the application type indicates that it is an amendment to the regional center’s name, organizational structure, ownership, or administration; and

–Form I-526, Immigrant Petition by Alien Investor, when it indicates that the petitioner’s investment is associated with an approved regional center.

In general, we will not act on any pending petition or application of these form types that is dependent on a lapsed statutory authority until further notice. If you were issued written correspondence regarding your petition or application on or before June 30, 2021, you should review the written correspondence and respond by the due date (as applicable). Although we cannot review your response at this time, we will receive and maintain the response for review if circumstances change.

We will continue to accept and review Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, in the normal course, including those filed on or after July 1, 2021.

We will continue to accept Form I-485, Application to Register Permanent Residence or Adjust Status, based on an approved Form I-526. However, in the event of a lapse in authorization, we will be unable to act on any Form I-485 based on an approved Form I-526 associated with an approved regional center unless a visa through the Regional Center Program is reauthorized.

We will provide further guidance to the public if circumstances change or further guidance becomes necessary.

https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-immigrant-investor-regional-centers/approved-eb-5-immigrant-investor-regional-centers