07 Sep EB-5 Regional Center Program Outlook: Extension and Reform or RAISE Act?
As we reach the end of August 2017, legislators on Capitol Hill and USCIS have been tight-lipped about the future of the EB-5 Regional Center Program that is due to expire on September 30, 2017. As discrete negotiations among elected officials continue, observers do expect a legislative solution, but few are predicting with confidence what that solution will be.
Most proposed new EB-5 legislation and the proposed USCIS regulations for the EB-5 Regional Center program will increase the minimum investment amount from its current $500,000 for Targeted Employment Areas (TEAs) and $1,000,000 for non-TEAs. One recent EB-5 reform bill was released in late July 2017 by Congressman Fitzpatrick (R-PA). The Fitzpatrick EB-5 bill proposed to continue the EB-5 Regional Center program but increase TEA investments to $800,000 and increase the investment threshold to $1.2 million for all other investments. This solution is similar to proposed legislation tabled in April 2017 – one by Sen. Cornyn (R-TX) to raise TEA investments to $800,000 and non-TEAs to $925,000, and another by Sen. Grassley (R-IA) to raise TEA investments to $800,0000 and maintain non-TEAs unchanged at $1,000,000.
In contrast to these proposed bills, on August 2, 2017, Senator David Perdue (R-GA) and Senator Tom Cotton (R-AR) introduced a proposed bill to entirely revamp the U.S. system for granting lawful permanent residence (i.e., a “green card”) and, in the process, eliminate the EB-5 program and all other Employment Based immigration categories. The Perdue–Cotton bill, known as “Reforming American Immigration for a Strong Economy Act,” or “RAISE Act”, would create a points system for granting green cards, while simultaneously reducing the total number of green cards issued each year. The RAISE Act seeks to create a long list factors that would allot points to applicants. Points would be granted for factors such as: knowledge of the English language, level of education attainment, achievements showing extraordinary ability, or making an investment in the U.S. For example, a RAISE Act applicant would be granted 6 points for investments of at least $1.35 million, and 12 points for investments of at least $1.8 million. Such an investment must last at least 3 years, and the applicant must play an active management role in a new commercial enterprise. Despite making an investment under the RAISE Act, an applicant is not assured of having sufficient points to qualify for a green card.
In a context of uncertainty about the EB-5 Regional Center Program, EB-5 investors remain interested in pursuing EB-5 Regional Center investments, with a preference for projects with fewer immigration risks, either because of the quality of the project or because the project has received an I-924 exemplar approval from USCIS.
Regional Center operators are making cautious plans for slowing EB-5 demand from mainland China and increased EB-5 demand from India. Regional Center operators are also doing internal house-keeping by studying in detail the redeployment guidance from USCIS in the EB-5 Policy Manual, and gearing up to submit the I-924A Annual Certification. Form I-924A must be filed by USCIS-approved regional centers between October 1, 2017 and December 29, 2017 – with a new filing fee of $3,035.
Both EB-5 investors and Regional Center operators are welcoming a recent uptick in USCIS issuance of decisions on I-829 petitions. By June 2017, average USCIS processing time for I-829 petitions exceeded 24 months. Recent USCIS statements to stakeholders had promised a shift in personnel at the Investor Program Office to address the daunting backlog of I-829 petitions. That promise appears to be bearing fruit. A new wave of investors is getting the good news that they have been waiting years to receive.