President Trump signed the Consolidated Appropriations Act, 2019 (federal funding bill) on February 15, thus avoiding another government shutdown. The spending bill funds the federal government and extends the EB-5 Regional Center Program authorization through September 30, 2019. EB-5 stakeholders are resuming efforts towards achieving EB-5 reform and long-term reauthorization.
Regulatory Actions Currently Under Review on the list of The Office of Management and Budget shows that the EB-5 Modernization Regulation advanced on Friday 2/22/2019 to the OMB Review stage.OMB Review is the last step in the rulemaking process before publication in the Federal Register.
Below is a summary of the EB-5 Immigrant Investor Program Modernization published in the Notice of Proposed Rulemaking for RIN: 1615-AC07, which was published in January 2017. DHS just spent two years making some kind of changes. Now the most stirring question for all is what will be in the Final Rule.
• Increase the standard minimum EB-5 investment amount to $1,800,000, or $1,350,000 in a TEA.
• A TEA is based on high unemployment and incentivized with 25% reduction to the investment amount (not other factors or incentives as proposed by Congress).
• A TEA can only be designated for a high-unemployment MSA, county, city, single census tract, or limited group of census tracts. DHS, not the states, is responsible for TEA designation.
• Give priority date protection (an investor with an approved I-526 could choose to file a new I-526 while keeping the original priority date, subject to certain restrictions)
• Spouse and children may be able to file I-829 even if not included on the principal investor’s petition.
• Other technical changes.
EB-5 Regional Center Program authorization granted in 2018 has been active again after President Trump signed a short-term spending bill to end the partial government shutdown and re-open government last Friday evening. The continuing resolution would extend previous funding and authorities for 3 more weeks till February 15, 2009.
During the shutdown from December 22 to January 25, USCIS continued to accept regional center I-526 and I-485 filings, only the adjudications were delayed. IIUSA promises it will continue to visit offices and advocate on EB-5 Regional Center program’s stakeholder’s behalf.
Invest In the USA (IIUSA). (2019). EB-5 Regional Center Program Receives Three-Week Extension. Retrieved from https://iiusa.org/blog/eb-5-regional-center-program-recieves-three-week-extension/
On Thursday, December 6, Congress sent President Trump a short-term spending bill to move back the deadline for a partial government shutdown until December 21, 2018. Both the House and the Senate passed the legislation by voice vote on Thursday. Trump is expected to sign the measure. These measures would thus extend the current EB-5 Regional Center program without change until December 21, 2018.
The EB-5 Regional Center program was supposed to expire Friday, December 7 at midnight. As Congress participated in memorial events for former president George H.W. Bush, lawmakers have decided to delay this deadline to December 21.
The two-week extension provided will provide opportunity for investors to file their I-526 petition with USCIS, before the probable EB-5 program Reform, which could see an increase to the minimum investment levels from $800,000 to $1,800,000. Even though the final investment amount has not been agreed upon, an increase in the investment measure will soon occur.
Werner, E. (2018, December 6). Congress sent President Trump a short-term spending bill Thursday to move back the deadline for a partial government shutdown. Retrieved from https://www.washingtonpost.com/business/economy/house-passes-short-term-spending-bill-setting-up-pre-christmas-shutdown-fight/2018/12/06/208144ce-f4c6-11e8-bc79-68604ed88993_story.html?utm_term=.f94ef845d1d8
Washington Update: EB-5 Regional Center Authorization Receives Short Term Extension until December 21st. (2018, December 6). Retrieved from https://www.marketwatch.com/press-release/washington-update-eb-5-regional-center-authorization-receives-short-term-extension-until-december-21st-2018-12-06
Due to the hotel’s prestigious location in Chicago’s downtown financial district, where we already have developed two successful Marriott hotels (the 610-key JW Marriott and the 381-key Residence Inn) we have studied the economic benefits adding one more floor of hotel rooms so our new Marriott Autograph Collection Hotel would have 310 rooms instead of the planned 232 rooms at the 208 S. LaSalle Street location. Adding one more floor would cost approximately 15 million more to the project cost but will generate substantial additional income and value. The resulting return on cost will be enhanced, thereby reducing project risk.
We feel this is a positive development and will not require an increase in the current EB-5 funds that we intend to raise. We’re looking to start the construction in the beginning of 2019 and will keep you posted on the progress.
According to IIUSA, President Trump signed a short-term continuing resolution (CR) on Friday, September 28. This temporary funding bill defers the deadline for unmade decisions about government funding and programs, including the EB-5 Regional Center Program, to December 7, 2018.
Recall the last time Congress voted a prolonged regional center program extension was 2012. Since then, the program has been extended a few months at a time, relating to government funding.
Below is a graph of history of regional center program authorization since 1992
Figure. The History of Regional Center Program Authorization, 1992-2018. Adapted from “RC program authorization (12/7/2018),” by S Lazicki, 2018, EB-5 Blog. Retrieved October 4, 2018, from https://blog.lucidtext.com/category/eb-5-law-policy/
Invest In the USA (IIUSA). (2018). EB-5 Regional Center Program Extended Through December 7th. Retrieved from https://iiusa.org/blog/eb-5-regional-center-program-extended-december-7th/
On June 19th, 2018, the U.S. Senate Committee on the Judiciary held an oversight hearing on the Immigrant Investor EB-5 Program. The well-attended committee hearing focused on reported fraud, abuse, and national security risks related to the program, and also future path for EB-5.
Throughout the hearing, the sole witness was USCIS Director Francis Cissna. Director Cissna summarized the program background; reported USCIS’s recent steps to improve the program administration and integrity; narrated much-needed proposed policy changes to reform the current program. Furthermore, advocated for legislative reform to address needed authorities for USCIS and to make programmatic changes. Director Cissna indicated that the proposed EB-5 Modernization and Regional Center regulations may take beyond the current September program authorization date to accomplish due to there are multiple agency priorities at the current time.
Attending members seemed open to reform legislation and continuation of the program citing the economic success of EB-5 program in their states.
For more information, you can watch YouTube video record on the hearing at:
Cissna, Francis. (2018, Jun. 19). Hearing on “Citizenship for Sale: Oversight of the EB-5 Investor Visa Program” before the Senate Committee on the Judiciary on June 19, 2018 by USCIS Director L. Francis Cissna. Retrieved from https://www.uscis.gov/tools/resources-congress/testimonies-and-speeches/hearing-citizenship-sale-oversight-eb-5-investor-visa-program-senate-committee-judiciary-june-19-2018-uscis-director-l-francis-cissna
Greenberg Traurig, LLP. (2018, Jun. 19). Senate Judiciary Committee Holds Oversight Hearing on EB-5. Retrieved from https://www.natlawreview.com/article/senate-judiciary-committee-holds-oversight-hearing-eb-5
USCIS issued policy alert on immigrant investor (EB-5) cases involving tenant occupancy on May 15, 2018. Previously, the USCIS Policy Manual allowed for tenant-occupancy methodologies used by I-526 petitioners to prove their investment would satisfy indirect job creation request. The new policy guidance deemed the tenant-occupancy methodology cannot reasonably predict the indirect job creation, and states that it “results in a connection or nexus between the investment and jobs that is too tenuous,” and as a result, will no longer considered it a reasonable way to forecast.
The change has been effective as of May 15, 2018. The USCIS will continue to give deference to I-526 and I-829 filed prior to May 15, 2018, or I-526 petitions that will be filed in future for exemplar-approved projects, as well as approved I-526 petition(s) of another EB-5 investor.
U.S. Citizenship and Immigration Services. (2018). USCIS Policy Manual Updates: EB-5 Tenant Occupancy. Retrieved from https://www.uscis.gov/news/alerts/uscis-policy-manual-updates
Divine, Bearman, and Caldwell & Berkowitz, PC. (2018) . IIUSA Member Analysis: USCIS Evicts Tenant Occupancy Job Counting from EB-5. Retrieved from https://iiusa.org/blog/wp-content/uploads/2018/05/USCIS-Evicts-Tenant-Occupancy-Job-Counting-from-EB-5-1.pdf
Recent tweets from U.S. Citizenship and Immigration Services (“USCIS”) indicate that administrative changes to the EB-5 Program will be a priority for the Fiscal Year 2018. At present, it is almost certain that the proposed regulations introduced more than a year ago will soon be finalized.
The new USCIS Director Lee Francis Cissna, made it clearly that he wants new EB-5 regulations soon. After legislative proposals to reform the EB-5 Program failed to reach consensus in March, on April 5, Senate and House Judiciary Committee chairmen Chuck Grassley (R-Iowa) and Bob Goodlatte (R-Va.) and former Senate Judiciary Committee chairman Patrick Leahy (D-Vt.) in a joint letter to the Secretary of Homeland Security(“DHS”), urging Department to take immediate steps to finalize proposed regulations published in the Federal Register on January 13, 2017, entitled “EB-5 Immigrant Investor Program Modernization”, without further delay.
Important EB-5 reforms included in the “EB-5 Immigrant Investor Program Modernization” proposal are:
• Increased Minimum Investment Amount
• TEA Reforms.
• Priority Date Retention.
Hopefully, Congress will overcome its dysfunctional bi-partisanship and fix the EB-5 program soon.
Wolfsdorf Rosenthal LLP. (2018, Apr. 9). Regulations v. Legislation – On the Brink of EB-5 Reform. Retrieved from https://wolfsdorf.com/blog/on-the-brink-of-eb5-reform/
Grassley, Chuck. (2018, Apr. 5). Grassley, Goodlatte, Leahy Urge Trump Administration to Finalize EB-5 Regulatory Reforms. Retrieved from https://www.grassley.senate.gov/news/news-releases/grassley-goodlatte-leahy-urge-trump-administration-finalize-eb-5-regulatory
On Friday, March 23, 2018, proposed Omnibus bill (Consolidated Appropriations Act, 2018) has passed by Congress and signed into law by President Trump. The Omnibus bill 2018 extended the current EB-5 Program until September 30, 2018.
Earlier in March, IIUSA actively worked with Congress leaders and a group of industrial organizations to review and discuss a proposed “The EB5 Immigrant Investor Visa and Regional Center Reform Act” (EB-5 Reform Act, the “Draft Bill”) in a bid to attach the Draft Bill to the Omnibus, which will extend the EB-5 program until September 30, 2023. On March 20, IIUSA issued statement revealed that the proposed reform failed to receive bicameral support and would not be included in the federal funding bill. It was the 5th time that efforts to reform the EB-5 Regional Center Program have failed.
The current extension does not introduce any new elements into the EB-5 Program. It is critical for foreign investors planning to obtain U.S. residential status through EB-5 program to take immediate action, as to take advantage of the straight extended EB-5 Regional Center Program before its expiration. This straight extension will give lawmakers and the Department of Homeland Security needed time to make substantive changes to the program.
On March 20, 2018, Invest in the USA (IIUSA) issued a statement (https://iiusa.org/blog/iiusa-statement-missed-opportunity/)on the United States EB-5 program’s failure to receive bicameral support and would not be included in the upcoming federal funding bill, which Congress must pass by this Friday March 23. The possible inclusion of program reform and long-term extension in the omnibus bill had brought hopes to the EB-5 industry earlier in March. IIUSA revealed that the proposed reforms did “not gather support from all industry organizations”.
Even though failed to reform program and obtain long-term reauthorization, the draft bill has still included provisions for another temporary EB-5 program extension through September 30, 2018.