The Latest on EB-5 Reauthorization 2015
The EB-5 program is set to sunset on September 30, 2015. If previous sunset-reauthorizations are any indication, the program is expected to be extended by Congress before its expiration. However, the final authorization and which fluctuations the EB-5 program will undertake are still up in the air.
Based on the news emanating from Congress in recent months, as well as that gleaned during the American Immigration Lawyers Association (AILA) EB-5 Conference in Las Vegas in late August, a number of “highly probable” scenarios are emerging. Three bills have been introduced in 114th Congress that focus on reauthorizing the EB-5 program. In August 2015, Representative Zoe Lofgren, Ranking Member of the House Judiciary Committee, Subcommittee on Immigration and Border Security, and Rep. Luis Gutiérrez introduced H.R. 3370, the 2015 Entrepreneurial Business Creating Jobs Act. In January 2015, House Reps. Mark Amodei (R-NV) and Jared Polis (D-CO), introduced the American Entrepreneurship and Investment Act, H.R. 616. Meanwhile, in June 2015, The American Job Creation and Investment Promotion Reform Act, S. 1501, was introduced in the Senate by Senate Judiciary Committee Chairman Charles Grassley (R- IA) and Senate Judiciary Committee Ranking Member Patrick Leahy (D-VT).
In sifting through the three bills, it is the bill introduced by Representatives Lofgren and Gutiérrez which seems to be getting the most traction—as it combines many of the facets of H.R. 616 and S.1501. The hybrid bill focuses on important reforms for to the EB-5 program benefitting investors, while also providing for integrity safeguards to the program.
Below, we briefly list several facets of the program post-9/30/15 that those working within Congress on the provisions and most practitioners in the EB-5 arena agree are probable. It is important to remember that until Congress acts to reauthorize or provide a short-term extension to the program, the final makeup of any reauthorization is not yet final.
- Investment minimums rising
The consensus is that the minimum investment amount for USCIS-designated Regional Centers and direct job creation projects located in a TEA will increase from $500,000 to $800,000. In order to be designated as a TEA, the EB-5 direct job creation project must be located in either a rural area or in a location that has high unemployment. For direct job creation EB-5 projects not located in a TEA, the investment minimum may rise to $1.2 million from the current $1 million.
- Grandfathering of I-526 Applications Filed Before the Sunset
If there are changes to the program, such as an increase in investment minimums, it is likely that applications submitted before the current program sunsets will be accepted under the current lesser threshold amounts.
- Short or long-term extension of the EB-5 Program?
Previous reauthorizations included temporary short-term extensions of the program. As we’re nearing September 30, 2015 and a long-term or permanent solution appears unlikely, it is likely a 6-month extension of the program may be passed as a gap-measure.
- Improvements to processing
A job-creating EB-5 investment from a foreign-based investor is a benefit to the United States economy, which most agree, we should encourage. However, processing times can be burdensome—in some cases processing requires 18 months from investor petition (I-526) filing to immigration to the U.S. Meanwhile, the investor has to put their family’s travel plans on hold. Children cannot be enrolled in school. Business activities in the U.S. and abroad are suspended, and even visiting the U.S. on a visitor visa can be problematic due to immigrant intent issues. Recognizing these shortcomings, processing improvement proposals have recommended mandating maximum processing times for an I-526 petition of up to 150 days, and limiting I-829 (removal of conditions) processing to 180 days. Concurrent processing of an I-485, if visa availability is current, has also been proposed.
- Integrity Measures
There is a strong chance a new or reauthorized bill will increase the integrity measures with which Regional Centers must comply. The program safeguards that have been proposed include increased transparency measures, an annual certified compliance statement, site visits, mandatory security measures, background checks and an increase in fees.
Whether the EB-5 program will be reauthorized, and what changes to the program will occur are matters still under discussion by Congress. The expectation is that the program will be extended, although the timing is not yet certain. Historically, there was an occasion where the renewal had to be enacted with retroactive effect. We can expect last minute action on the reauthorization, and will be updating our readers as new details emerge. What is clear is that individuals currently considering the program may want to get their applications in before the sunset date of 9/30/2015. With a likely increase in investment minimums of about $300,000, file now and save is a mantra worth considering.