News Flash: Will the Expired EB-5 Program Be Revived?
Congress has failed to reauthorize the EB-5 regional center program, meaning the program has expired on June 30, 2021. With this expiration comes a plethora of questions and uncertainty for individuals who are seeking or who currently hold a green card based on the EB-5 Immigrant Investor Program.
Why Did the EB-5 Program Expire?
Originally, the EB-5 regional center program was tied to the omnibus bill approving a new budget. When Congress passed this omnibus bill, it automatically renewed certain programs like the EB-5 Immigrant Investor Program.
The last omnibus appropriations bill passed while Donald Trump was in office decoupled the EB-5 program from the budget approval process. Meaning that the program became subject to reauthorization as a standalone bill.
There have been efforts to reauthorize this program, specifically via a bill introduced in the Senate on March 18, 2021 called the “EB–5 Reform and Integrity Act of 2021.” The bill, introduced by U.S. Senators Chuck Grassley and Patrick Leahy, aims to revise the EB-5 Regional Center Program “to better protect investors, reduce corrupt practices in how it was being run and extend the life of the program for five years,” according to Forbes.
Leading up to the introduction of this bill, Robert W. Kraft, President of IIUSA (Invest in the USA) expressed support for the upcoming bill and shared his feelings about the evolution of the program:
“Where many see a challenge, I see an opportunity. The objective of congressional decoupling was to bring attention to a program that otherwise sits among a diverse group of programs awaiting tacit approval each budget cycle. It was not decoupled to die, but to live and to be seen. I have confidence in the power of our program and the difference it has made in our communities.”
Founded in 2005, Invest in the USA (IIUSA) is a national membership-based not-for-profit industry trade association for the EB-5 Regional Center Program.
Reform Bill Was Blocked
Due to the urgent nature of the EB-5 program’s impending expiration, the EB-5 Reform and Integrity Act of 2021 was given one last shot to be passed by the Senate through what is known as “hotline” in mid-June. This is an attempt to get a bill passed quickly without a vote, or by unanimous consent. If any one Senator objects to the bill, it will be blocked from passage.
And that is exactly what happened. Senator Lindsey Graham objected to the attempt to hotline the EB-5 reform bill on June 24, 2021. This was right before the Senate went on a break for the July 4 holiday, starting on June 28, two days before the expiration of the program. This effectively made it impossible for the program to be renewed before its expiration.
As it stands today, the EB-5 regional center program is expired. Yet not all is lost, since it can still be reauthorized even after expiration.
But the expiration of the program is further complicated by a ruling that invalidated a Final Rule that raised the minimum EB-5 reginal center investment in a Targeted Investment Area (TEA) from $500,000 to $900,000 in 2019.
Up until 2019, the minimum amount required to be invested in a TEA to be eligible for the EB-5 investor visa was $500,000. Then, on July 24, 2019, the Final Rule was issued and subsequently went into effect on November 21, 2019.
One June 22, 2021, the District Court for the Northern District of California ruled that “Former Acting Homeland Security Secretary Kevin McAleenan was not properly serving in his position when he promulgated the Final Rule in July 2019.” The court further clarified that “under the Federal Vacancies Reform Act of 1998 (FVRA)…the Final Rule is void.”
Therefore, the TEA investment amount minimum has, in effect, been reduced back down to the original $500,000.
But there is a chance the government will seek to appeal this ruling and reinstate the Final Rule of 2019 taking the TEA minimum investment back to $900,000.
Next Steps for Foreign Investors
What are foreign investors seeking to take advantage of the EB-5 visa to do in this environment of unknowns?
USCIS has recently provided some guidance on how they plan to move forward with the EB-5 program in light of the expiration.
- The expiration does not affect EB-5 petitions filed by investors who are not seeking a visa under the Regional Center Program.
- The following forms, if received on or after July 1, 2021, will be rejected:
- Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program (excludes amendments to the regional center’s name, organizational structure, ownership, or administration).
- Form I-526, Immigrant Petition by Alien Investor (if investment is associated with an approved regional center).
- USCIS will not act on any pending petitions or applications of Forms I-924 and I-526 related to the Regional Center Program.
- For any correspondence issued by USCIS on or before June 30, 2021: Review the correspondence and provide a response (if requested) by the due date on the letter. No action will be taken after the receipt of your response by USCIS, but it will be kept on file until there is a change in the status of the program.
- USCIS will continue to accept and review Form I-829, Petition by Entrepreneur to Remove Conditions on Permanent Resident Status, even if filed on or after July 1, 2021.
- USCIS will start rejecting all Forms I-485, Application to Register Permanent Residence or Adjust Status, and any associated Forms I-765, Application for Employment Authorization, and Forms I-131, Application for Travel Document, based on an approved Regional Center Form I-526.
Taking such guidance into consideration, it is wise to consult a skilled immigration lawyer to get advice as to your next steps as a foreign investor based upon your specific case and your progress in the EB-5 process so far.
EB-5 Investor Program in a Nutshell
The Immigration Act of 1990 specifically created the EB-5 investor visa program to permit the entry into the United States of qualified international investors as lawful permanent residents. The EB-5 visa is offered to those who have invested or are investing at least $1 million in a U.S.-based commercial enterprise that will create ten or more full-time U.S.-based jobs.
In a designated high-unemployment region – what the EB-5 program calls a “Targeted Employment Area” or “TEA” – the minimum investment is only $500,000. The EB-5 investor visa program was created to boost the U.S. economy through the infusion of capital and the creation of jobs by offering international investors the benefits of lawful permanent residence in the United States.
Read more about the EB-5 program in our blog titled “The EB-5 Investor Visa,” but keep in mind that this information applied to the program in place before it expired on June 30. If it is reauthorized at some time in the future, it may have different qualifications and investment minimums.
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