By: Bernard Wolfsdorf and Joseph Barnett
Chinese Translation: 行政新规和立法改革 – EB-5 变革在即
Vietnamese Translation: Quy định và Pháp luật – Trên đường cải cách EB-5
Korean Translation: 이민규정 vs. 개정법안 – 눈 앞에 닥친 EB-5 투자이민법 개정
Recent tweets from U.S. Citizenship and Immigration Services (“USCIS”) indicate that administrative changes to the EB-5 Program are a priority in Fiscal Year 2018. It now appears almost certain the proposed regulations from over one year ago will be finalized very soon.
EB-5 visas are intended to provide lawful permanent residence to foreign nationals who promote economic growth in the United States. We are working to reform and modernize the program and have proposed a rule to better reflect Congressional intent. https://t.co/NDUvSlAuVe
— USCIS (@USCIS) March 23, 2018
Our proposed rule would amend how targeted employment areas are designated to ensure that the reduced investment threshold is reserved for areas intended by Congress. https://t.co/NDUvSlAuVe
— USCIS (@USCIS) March 23, 2018
Our proposed EB-5 rule would increase investment levels and end gerrymandering. The changes would help true high unemployment and rural areas. https://t.co/NDUvSlAuVe
— USCIS (@USCIS) March 23, 2018
The new USCIS Director Lee Francis Cissna (who previously was detailed to Senator Chuck Grassley’s staff on the Senate Judiciary Committee), has made it clear he wants new EB-5 regulations soon. Senator Grassley (R-IA) has attempted to reform the EB-5 Program with legislative changes, without success. Last month, after legislative proposals to reform the EB-5 Program failed to reach consensus, Senator Grassley expressed his frustration at the “moneyed interests” proposals that blocked his reforms.
WAKE UP HOUSE&SENATE LEADER don’t extend EB5 in Omni Goodlatte and I worked compromise BUT Manhattan real estate moguls reject/ So r u yr after yr going to melt in front of these moneyed interests??
— ChuckGrassley (@ChuckGrassley) March 16, 2018
Last week, Senator Grassley sent a letter to the U.S. Department of Homeland Security (“DHS”) leadership, urging DHS to implement the regulations “without further delay.” Senator Grassley wrote:
EB-5 reform will now almost certainly come by regulations (Regs), not legislation (Legs). This distinction is critical, as regulatory reforms may cause some adversely affected parties to litigate against the regulations and seek judicial review under the Administrative Procedures Act.
The following are three important EB-5 reforms included in the “EB-5 Immigrant Investor Program Modernization” proposal:
- Increased Minimum Investment Amount. DHS proposes to increase the minimum investment amount from $500,000 to $1.35 million for investments in a Targeted Employment Area (“TEA”) or from $1M to $1.8M for investments not located in a TEA. In addition, DHS is proposing to make regular Consumer Price Index-based adjustments in the minimum investment amount every 5 years.
- TEA Reforms. DHS proposes to eliminate state and local designation of high unemployment areas and to prevent TEA “gerrymandering” by only looking to the actual census tract or “directly adjacent” census tracts in which the new commercial enterprise is principally doing business.
- Priority Date Retention. DHS proposes to allow an EB-5 immigrant petitioner to use the priority date of an approved EB-5 immigrant petition for a subsequently filed EB-5 immigrant petition for which the petitioner qualifies.
Hopefully, Congress will overcome its dysfunctional bi-partisanship and fix the EB-5 program that has generated at least $20 billion in investment in the last 3-4 years. Since EB-5 is often about 1/3 of the capital; stack, it is estimated that over $50 billion worth of projects have got off the ground because of EB-5. This has created thousands of jobs and continues to be a viable avenue for high net worth immigrants, that massively benefits job creation and the U.S. economy.