Congress established the EB-5 Immigrant Investor Visa Program as a provision of the Immigration Act of 1990. Through the EB-5 program immigrants can attain U.S. lawful permanent residency by making a substantial investment in a new commercial enterprise that will stimulate the U.S. economy while creating jobs for U.S. workers.[1] Since its establishment, the EB-5 program was expanded to include the Regional Center program[2], which has been extended and reformed multiple times over the years and is once again facing new legislation that could have a profound impact on its future (it was set to expire on September 30, 2015 but was temporarily extended through December 11, 2015). Six House and Senate Bills currently sit before Congress, each with vastly different takes on how the regional center program should be changed, if at all. The table below provides a comparison of most relevant provisions addressed in the six older EB-5 bills as we wait for the new bill to be drafted:
| Senate Bill S. 1501[3] | Draft Senate Bill 20151107[4] | House Bill H.R. 616[5] | H.R. 3370[6] | S. 2122[7] | SKILLS ACT (113th Congress)[8] | |
| Program Permanency | Extends program through Sept. 30, 2020. | Extends program through Sept. 30, 2019. | Grants program permanency. | Grants program permanency. | Grants program permanency. | Grants program permanency. |
| Job Creation Methodology | 10% of jobs created must be direct. Allows for 90% to be indirect. Does not permit tenant occupancy. | 10% of jobs created must be direct. Allows for 90% to be indirect. Permit tenant occupancy under certain conditions. | No change to the existing law. | Methodology for job creation to be approved by DHS and DOC[9]. Allows for jobs created outside the geographic boundary of the Regional center to be considered under certain conditions. | Use “reasonable” methodologies for determining the number of jobs created. | Does not address in legislation. |
| Processing Times | Average processing times: 120 days for I-924; 150 days for I-526; and 180 days for I-829. | Average processing times: 120 days for I-924; 150 days for I-526; and 180 days for I-829. | Adjudication within 180 days. | Legislation does not address processing times. | Adjudication within 180 days. Requests for evidence will be issued within 30 days of filing and adjudication of RFEs shall be within 30 days after it’s received. | Legislation does not address processing times. |
| Numerical Limits. | Does not address numerical limits in legislation. | Does not address numerical limits in legislation. | Eliminates spouse and children from the 10,000 numerical visa limitations. Also eliminates per country quotas. | If visa numbers are exhausted, allows for an additional 10,000 visa to be made available for that fiscal year unless a joint resolution is enacted. | Eliminates spouse and children from the 10,000 numerical visa limitations. Also eliminates per country quotas. | Eliminates per country limits on visas for employment-based categories and raises the limit from 7% to 15% for family cases. |
| TEA Designation | Sets aside 5,000 visas for TEA. | Sets aside 4,000 visas for TEA; 50% for rural areas and 50% for high unemployment areas. | Sets aside 5,000 visas for TEAs; TEAs to be determined by State agency. | Sets aside 4,000 for high unemployment areas; 2,000 for rural areas and 2,000 for counties with a 20% or greater decrease in population since 1970, a state or federal economic development incentive program, or an area within the boundaries of a military installation closed under the BRAC law. | Does not address in legislation. | TEA designation determined based upon Department of Labor’s determination of geographic boundary of high unemployment area. Department of Homeland Security has the ultimate discretion to determine TEAs for purposes of the program. |
| TEA Definition | Defines a high unemployment area for a TEA as a single census tract with 150% of the national average unemployment rate. | Limits the definition of a high unemployment area for a TEA as one or more contiguous census tracts each with at least 150% of the national average unemployment rate or an area consisting of one or more high poverty census tracts (20% poverty rate). TEAs valid for 2 years. | No change to existing definition.
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Defines high unemployment area for a TEA as comprising of one or more contiguous census tracts within one Core Based Statistical Area with at least a 150% of the national average unemployment rate. TEA valid for 5 years. | Does not address in legislation. | Tightens the definition of a TEA to only comprise of an area with an unemployment rate of 150% of the national average as determined by the Secretary of Labor. |
| Minimum Investments. | Increases the minimum investment amounts to $800,000 for TEAs and $1.2 million for non-TEAS. Automatically adjusts amounts every 5 years. Gives option for annual adjustment based on CPI. | Increases the minimum investment amounts to $800,000 for TEAs and $1.2 million for non-TEAS. Automatically adjusts amounts every 5 years. Gives option for annual adjustment based on CPI. | Does not address in legislation. | Doubles the minimum investment required to $1 million for TEA and $2 million for non-TEA. Adjusts amount every 3 years per CPI. | Does not address in legislation. | Annual adjustments to minimum investment amounts based on changes in CPI. |
The chart below highlights other potential changes the Program faces from the various bills:
| Legislation | Proposed Changes to Program |
| Senate Bill S. 1501[10] | · Requires Regional Centers to file an amendment for any changes. Notice of proposed changes must be made public.· Requires the following for preapproval of NCE: a comprehensive business plan; economic report; SEC documents; investment and offering documents including marketing materials, descriptions of policies and procedures to confirm compliance with securities law; certification that persons involved have complied with securities laws; and an economic analysis for TEA/CSA.
· Preapproval will be binding on subsequent petitions and afford deference unless there is evidence of illicit activity. · The Secretary has unreviewable discretion to deny or revoke investor status at any point as well as terminate Regional Center based on violations. · Requires at least 1 mandatory site visit from the Secretary to each Regional Center associated commercial enterprise. · Premium processing option provided for project documents and can expedite site visit. · If investment is in TEA, at least 50% of job creation must be in TEA/CSA. If it is below 50%, the total number of jobs created will be limited to the number at which 50%of the job creation occurs. · Defines Full Time Employment as a position requiring at least 35 hours of service per week for 24-month period. · Cannot file I-526 without I-924 approval. |
| Proposed Bill[11] | · Explicitly prohibits alien investor capital for purchase of bonds and allows for the aggregation of any full time construction jobs that last less than 24 months to satisfy the job creation requirement.· Require Regional Centers to file an amendment for any changes. Notice of proposed changes must be made public.
· Require the following for preapproval of NCE: a comprehensive business plan; economic report; SEC documents; investment and offering documents including marketing materials, descriptions of policies and procedures to confirm compliance with securities law; certification that persons involved have complied with securities laws; · The Secretary has unreviewable discretion to deny or revoke investor status at any point. Limited judicial review. · The Secretary may terminate any Regional Center based on violations. · Requires at least 1 mandatory site visit from the Secretary to each NCE and JCE at any time. · Adds an additional $1,000 premium fee, but not for expeditious processing. Expeditious processing fee will be set and adjudication will take ½ the time as proposed in the goal. · Cannot file I-526 without I-924 approval. |
| House Bill H.R. 616[12] | · Optional preapproval process. Deference given.· Secretary authorized to terminate regional center and shall provide procedures for appeal. |
| H.R. 3370[13] | · Optional preapproval process. Deference given. Eliminates need for repeated submission of project documents after preapproval.· The Secretary may deny or revoke an investor’s petition for classification as an immigrant investor.
· Requires random site visits to be performed on no less than 5% of Regional Center projects per fiscal year. · Premium processing option available only to petitions associated with preapproved investment offering. 60 days for adjudication. $5,000 fee that can be adjusted per CPI. · Secretary has unreviewable discretion to terminate or suspend Regional Center. · Secretary of Homeland Security may delegate to the Secretary of Commerce to determine if job creation requirements have been met. · Creates Immigrant Entrepreneur Account to administer program. · Defines full-time employee as a position requiring at least 35 work hours per week and an expectancy of 2 years. May be satisfied by calculating the number of full time employees that could have been employed if the reported number of hours worked by part-time employees had been worked by full-time employees. |
| S. 2122[14] | · Optional preapproval process – eliminates the need to submit project documents with I-526 petition.· The Secretary is authorized to terminate Regional Centers based on violations.
· Regional Centers must certify compliance. |
| SKILLS ACT (113th Congress)[15] | · Regional Center must certify compliance.· Regional Center designations can be revoked for SEC violations. |
In conclusion, as noted above, many of the proposed reforms could have profound effects the current EB-5 Program. For now, it is unclear which legislative vision will prevail. Whether the program becomes permanent or remains indefinitely extendable, whether investment thresholds increase or stay the same remain to be seen. The future of the Program depends upon the Houses of Congress’ reaching an agreement regarding the matter. Interested groups should continue to contact their legislators to voice their opinions on the best future for the program. In addition, stakeholders in the EB-5 community should strongly consider filing their I-526’s and I-924’s prior to the December 11, 2015 extension to have the highest likelihood that their cases will be grandfathered under the current program provisions.
To inquire regarding our turnkey customized EB-5 services, including our best-in-class Matter of Ho-compliant business plans, due diligence project assessments and a wide range of ancillary services, please contact us at info@ecouncilinc.com.
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[1] http://www.invest-eb5.com/
[2] In 1992, in order to enhance the economic impact of the EB-5 program, Congress approved the designation of Regional Centers “to pool EB-5 capital from foreign investors to invest in USCIS-approved economic development projects with a defined geographic region.” (https://iiusa.org/en/eb-5-regional-center-investment-program/)
[3] https://www.congress.gov/bill/114th-congress/senate-bill/1501/text
[4] https://drive.google.com/file/d/0B3agsA-vm8SMVFZXWmszMnZqcjg/view
[5] https://www.congress.gov/bill/114th-congress/house-bill/616/text?q=%7B%22search%22%3A%5B%22%5C%22hr616%5C%22%22%5D%7D&resultIndex=1
[6] https://www.congress.gov/bill/114th-congress/house-bill/3370/text?q=%7B%22search%22%3A%5B%22%5C%22hr3370%5C%22%22%5D%7D&resultIndex=1
[7] https://www.congress.gov/bill/114th-congress/senate-bill/2122/text
[8] https://www.congress.gov/bill/113th-congress/house-bill/2131?q=%7B%22search%22%3A%5B%22skills+act%22%5D%7D&resultIndex=1
[9][9] Department of Homeland Security and Department of Commerce
[10] https://www.congress.gov/bill/114th-congress/senate-bill/1501/text
[11] https://drive.google.com/file/d/0B3agsA-vm8SMVFZXWmszMnZqcjg/view
[12] https://www.congress.gov/bill/114th-congress/house-bill/616/text?q=%7B%22search%22%3A%5B%22%5C%22hr616%5C%22%22%5D%7D&resultIndex=1
[13] https://www.congress.gov/bill/114th-congress/house-bill/3370/text?q=%7B%22search%22%3A%5B%22%5C%22hr3370%5C%22%22%5D%7D&resultIndex=1
[14] https://www.congress.gov/bill/114th-congress/senate-bill/2122/text
[15] https://www.congress.gov/bill/113th-congress/house-bill/2131?q=%7B%22search%22%3A%5B%22skills+act%22%5D%7D&resultIndex=1