Washington Updates

EB-5 Program Status Topics:

Subject to frequent change; updated as of 04/10/2018

Post-March 2018 analysis of EB-5 program status and potential changes

Calendar Summary

  • April 2018: Possibility re-opens that the EB-5 regulation RIN: 1615-AC07 could be finalized (as anticipated in the 2017 Unified Agendas) since EB-5 legislation did not increase the minimum investment amount in March. The Spring 2018 Unified Agenda should be published soon with status update on EB-5 regulations
  • September 30, 2018: Next regional center program sunset date
  • 2019: The next opportunity for significant EB-5 legislation, considering that 2018 is a mid-term election year.

EB-5 Regulations

The EB-5 regulation RIN: 1615-AC07 (with investment amount and TEA changes) is currently a Proposed Rule somewhere between Step 7 and Step 8 in the Rulemaking Process.

Updates:

  • 4/5: Senators Grassley, Goodlatte, and Leahy send a letter to DHS Secretary Kirstjen Nielsen urging the administration to finalize regulations. Meanwhile, the forces that successfully prevented efforts by these Senators to finalize EB-5 legislation are presumably at work advocating in the other direction. A quote from the Senators’ letter:

    As you are likely aware, since last May there have been new rounds of Congressional negotiations on the future of the EB-5 Regional Center Program. We understand that during the course of these negotiations your Department was encouraged by both individual Members of Congress and stakeholders to not finalize the proposed regulations, since a potential legislative solution could be imminent. Recently, these good-faith negotiations collapsed due to the opposition of the same special interest groups who have worked to derail all efforts to reform the program.

    Because we do not foresee a legislative solution in the near term, we believe that it is incumbent upon you to end all delays and issue the proposed regulations in final form. The proposed regulations are firmly within your explicit statutory authority provided by Congress when we created the EB-5 program, and there can be no dispute that they address a number of serious deficiencies in the program.

    As context, these senators previously called for the regulations to be finalized during hearings in 2016 and a letter to USCIS in 2017.

  • 3/23: USCIS tweets about the regulations, for what that’s worth.
  • 3/1: I’m told that the regulations were not finalized in February to give Congress a chance to pass legislation, but may be back on the table in April since Congress didn’t act in March.
  • 2/23: ILW reports “Immigration Daily has learned that intense pressure is being brought by EB5 industry players on the White House to delay USCIS’s new EB5 regulation.” The article discusses factors and possible outcomes.

RIN 1615-AC07 (EB-5 Immigrant Investor Program Modernization) is a regulation designed to raise the minimum EB-5 investment amount, allow certain EB-5 petitioners to retain their original priority date, change the designation process for targeted employment areas, and make other miscellaneous changes to filing and interview processes. We had opportunity to review and comment on the draft rule in 2017. The Fall 2017 Unified Agenda gave a Final Action date of February 00, 2018, but this date was not met. A second EB-5 regulation, related to regional center operations, is still in a preliminary stage.

Regional Center Program Authorization History

The last time Congress voted a significant regional center program extension was 2012. Since then, the program has been extended a few months at a time, in connection with government funding. This is now happening again with H.R.1625, the vehicle for the Consolidated Appropriations Act 2018.  The text includes regional center program authorization to 9/30/2018 on PDF page 1759, as follows:

SEC. 204. Section 610(b) of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note) shall be applied by substituting “September 30, 2018” for “September 30, 2015”

This language refers back to Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993 (Public Law 102-395) Section 610 (PDF page 47), which established the regional center program. The 2018 Appropriations Act does not include the EB-5 Reform Act, or other EB-5 changes. It just extends the borrowed time until we get a good piece of EB-5 legislation.

Legislation that could have affected EB-5, but didn’t

EB-5 Reform Act of 2018: This bill was discussed for inclusion in the omnibus due by March 23, 2018, but in the end was not included. As Klasko Law puts it in their client alert: “The EB-5 industry was largely shut out of the process or brought in too late to be able to provide meaningful guidance and input. So it should come as no surprise that the proposed bill died the same way it began: in a secret, back-room agreement without the participation or input of the vast majority of the EB-5 industry.”  IIUSA explains: “Unfortunately, the compromise reform and reauthorization legislation failed to garner the support of all industry organizations and failed to be included in the omnibus appropriations legislation. …The omnibus legislation, however, does include an extension of the current EB5 Regional Center Program through September 30, 2018.” The IIUSA statement also includes a link to the Revised EB-5 Reform Act of 2018 and IIUSA Comments. Senator Grassley explains his perspective on the EB-5 Reform Act and the process that produced it: Grassley: Big Money Interests Again Block Reforms for Corrupt EB-5 Visa Program

The immigration discussion in January/February did not touch on EB-5:

  • President Trump’s immigration framework attempts to limit the immigration reform debate to border security, Deferred Action for Childhood Arrivals, family reunification/chain migration, and the Diversity Visa category/visa lottery
  • Secure and Succeed Act of 2018 (Senators Grassley, Cornyn, Tillis, Perdue, Cotton, Lankford and Ernst) follows the Trump framework (and proposes reallocating diversity visas to reduce backlogs in EB-1, EB-2, and EB-3, but not EB-5).
  • H.R. 4760 Securing America’s Future Act (Rep. Bob Goodlatte, with 92 co-sponsors) follows the Trump framework (and proposes reallocating diversity visas to reduce backlogs in EB-1, EB-2, and EB-3, but not EB-5).
  • S.2367 – USA Act of 2018 (Senators John McCain and Chris Coons), a mirror of H.R.4796 Uniting and Securing America (USA) Act (Will Hurd, Pete Aguilar and Jeff Denham) just deals with border security and DACA
  • S.2344 – Immigration Innovation Act of 2018 (Senators Hatch, Flake) would free up employment-related visas in a way that would help EB-5 among other categories. But I doubt the it will gain any more traction this time than it did before, since it doesn’t fit in the administration’s immigration framework, and Hatch and co-sponsor Flake have already said their goodbyes to the Senate. The Hatch bill text does not, as misreported in some media, include RC program reauthorization or any direct reference to EB-5.

Implications for Past & Future EB-5 Users

1. What happens if the regional center program is terminated?

If Congress moves to terminate the RC program, one hopes that the move will come with new language that protects good-faith regional center applicants already in the system. (I estimate about 95,000 people, regional center investors and family, are currently in the pipeline between I-526 filing and I-829 filing.) Current policy treats regional center termination as a material change that would abort the process for people waiting on a green card, but does not address what would happen were the entire program terminated.

Policy Manual 6 USCIS-PM G Chapter 4(C): Changes that are considered material that occur after the filing of an immigrant investor petition will result in the investor’s ineligibility if the investor has not obtained conditional permanent resident status. …Further, the termination of a regional center associated with a regional center immigrant investor’s Form I-526 petition constitutes a material change to the petition.

Policy Manual 6 USCIS-PM G Chapter 5(C): Further, with respect to the impact of regional center termination, an immigrant investor’s conditional permanent resident status, if already obtained, is not automatically terminated if he or she has invested in a new commercial enterprise associated with a regional center that USCIS terminates. The conditional permanent resident investor will continue to have the opportunity to demonstrate compliance with EB-5 program requirements, including through reliance on indirect job creation.

Direct EB-5 is not subject to reauthorization, and could continue as-is regardless of whether or not the regional center program is reauthorized

2. What happens if regional center program authorization lapses as part of a government shutdown?

See this post https://www.natlawreview.com/article/government-shutdown

3. Would any EB-5 program changes retroactively affect people who have filed I-526?

  • If the regional center program loses authorization, that would affect people who have already filed and depend on the regional center program for continued eligibility. (See question 1 above)
  • Changes to investment amounts and TEA rules proposed by the regulations would only apply to new petitions after a future effective date
  • Some people in Congress have called for investment amount and TEA changes to be applied retroactively to past investors, but there isn’t any current legislation on the table to this effect, to my knowledge.
  • Recent legislative proposals have suggested setting aside some visas as incentives for TEA investment. This could affect past applicants by reducing the visas available to them and making the backlog and visa wait time even longer.
  • If legislation increased available EB-5 visa numbers, people already waiting for a visa would benefit.
  • The priority date protection and I-829 process changes proposed by the regulations would affect people currently in the system.

4. Would proposed EB-5 changes affect direct EB-5?

Changes to investment amounts and TEA definitions would equally affect direct EB-5 and regional center EB-5. The main difference is that direct EB-5 doesn’t depend on re-authorization, and integrity measures in proposed legislation have largely ignored direct EB-5.

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