On June 30, 2021, the EB-5 Regional Center Program expired. During this sunset period, we have received several questions from investors that we have detailed below.
How did the Program lapse?
While the EB-5 Visa Program is permanent, the Regional Center Program is not, and it requires Congress to reauthorize the Program in order for it to continue. Since its inception in 1992, the Regional Center Program has been reauthorized over 30 times. Historically, the Program has been attached to a large spending bill and extended through a series of continuing resolutions that provide funding for the Federal Government. At the end of 2020, the Program was detached from the larger spending bill, thereby requiring it to be specifically reauthorized via a stand-alone bill. The bipartisan EB-5 Reform and Integrity Act, sponsored by Senators Chuck Grassley (R-IA) and Patrick Leahy (D-VT), enjoyed substantive support, yet the bill came short of being passed in the Senate.
Has the Program lapsed before?
Yes. The last time we experienced a lapse was during the Federal Government shutdown from December 22, 2018, to January 25, 2019. That 35-day lapse has been the longest in the Program’s history. While there were other sunsets before that, they were always tied to a short-term Federal Government shutdown.
Why didn’t the bipartisan EB-5 Reform and Integrity Act pass?
The process by which a vote on the extension of the legislation was brought to the floor would have required unanimous consent, which can be a significant hurdle. Senator Lindsay Graham (R-SC) voiced his objection which effectively blocked the extension. A Senator Graham spokesman said the Senator needed more time, despite the looming deadline. “He would like to negotiate a long-term compromise with all parties that allows for the Program to be successful while improving Program integrity.” Senator Graham has, historically, been one of the Program’s most ardent supporters, so the fact he voted no should be viewed in that light.
Why can’t the industry and Congress reach a consensus on the future of the Program?
This is a very complex program, and almost all immigration legislation is being hotly debated. While integrity reforms might be the most important item to certain groups, there are a host of other issues that are critical to others – such as the investment amount, TEA definition, processing times, visa availability, and retrogression. Additionally, EB-5 is a very small program compared to other immigration issues that must be considered and resolved.
How are immigrant petitions affected by the current lapse?
USCIS has placed pending I-924 and I-526 Petitions on hold. Investors with approved I-526 Petitions, but who have not yet gone through the Adjustment of Status process or who have not yet received their EB-5 visa at their local Consulate, are generally on hold as well. For those investors with approved I-526 Petitions who have not yet obtained their Conditional Green Cards, it is important for them to discuss their specific situations with their immigration attorneys. USCIS will continue to accept and review I-829 Petitions, including those filed on or after June 30, 2021.
Will the Program be reauthorized?
Many industry experts believe the Program could be reinstated on or prior to September 30, 2021, which marks the end of the current fiscal year. We share that optimism. The Program has proven to be a valuable economic development tool. As previously stated, there is widespread support in Congress on both sides of the aisle to resume the Program. Although it is unlikely that the Program is allowed to permanently expire, should that occur, USCIS would almost certainly legacy in all pending and approved petitions.
What will be the TEA investment amount once the Program is reauthorized?
Upon reauthorization, the minimum investment amount in Targeted Employment Areas is anticipated to remain at $500,000 USD for some period of time. There are three routes to increasing the investment amount. First, the Department of Homeland Security could reissue the recently overturned Regulations either in the same form or with revisions, although that’s not likely to occur until the Program is reauthorized. Second, the Department of Justice has until August 23, 2021, to file an appeal on the recently overturned Regulations. Third, Congress could outline a higher investment amount in a new EB-5 reauthorization bill.
After the Program returns, how long will the $500,000 USD minimum investment amount last?
If the Program is reauthorized by September 30, 2021, it will likely be another short-term reauthorization – potentially until mid-December 2021. While the most recent $500,000 USD filing window lasted a few days, this one will likely be longer. However, it is impossible to predict if or when USCIS will try to reissue the Regulations. They could move quickly, within 30-90 days after the Program is reauthorized, or they may decide to go through the full regulatory process, which could take up to two years.
If I have yet to file my I-526 Petition, can EB5 Capital assist so that I am ready as soon as the Program is reauthorized?
Yes. During this sunset period, we have two projects with available slots for new investors. Our Offerings allow for new investors to subscribe, work with their immigration counsel to prepare their I-526 Petition, and to wire into escrow where funds will be held safely until the Program is reauthorized. As soon as it is, immigration attorneys can file the I-526 Petitions immediately. Given that we do not know how long the next $500,000 USD filing window will be, we wanted to provide maximum flexibility to investors who wish to get started now.