There has been a lot of talk about what could be included in an EB-5 regional center reauthorization bill. In general LCR has been reluctant to fuel speculation about dates and policies, because details can change up until the last moment when a bill is attached to another piece of legislation or voted on directly. That said, the reauthorization of EB-5 regional centers is a topic of great importance to both current and prospective EB-5 investors, and we can provide some insight.
The Grassley-Leahy Bill (S.831, the EB-5 Reform and Integrity Act of 2021) that was presented in June is an obvious starting point. It was presented and discussed in the last Republican-led Congress and nearly passed the Senate via a unanimous consent process, where the vote was 99-1 in the current Democratic-led Congress. There is also the bill that was presented by Senator Mike Rounds and Senator Lindsey Graham (S.2778) in the last Congress. These two bills constitute the starting point for the industry-drafted recommendation reviewed by the House Judiciary Committee, Subcommittee on Immigration and Citizenship this month.
The most important areas to consider are:
- Reauthorization Duration – The desire for an extended reauthorization of the regional center program is critical. Both public bills offer a five-year reauthorization, whereas the industry has indicated support for a more stable 10-year reauthorization.
- TEA Designation Rules – The Grassley-Leahy Bill didn’t speak to the rules for designating targeted employment areas (TEAs), because the 2019 Modernization regulations had updated the TEA rules as a federal process. The industry-proposed legislation recommended reforming TEA designation rules to use Opportunity Zones, provide a priority for rural areas, and put a finite limit on the number of census tracts to be included in a TEA.
- Fees – Both bills propose a higher $20,000 annual fee for regional centers and both propose a $1,000 -per-investor fee to support an “Integrity Fund.” To improve agency funding, the Rounds-Graham bill proposes a $50,000 fee per investor on top of filing fees, but this fee has not been discussed recently.
- Expedited Processing – All bills are targeting 180-day processing of I-526 applications. The Grassley-Leahy Bill proposed a fee study to allow USCIS to fund more staff. The industry has discussed giving expedited processing to rural projects. The Rounds-Graham bill proposed a $50,000 fee to the regional center to obtain expedited processing.
The good news is that reauthorization is being actively and seriously discussed by key congressional staff members, despite the “infrastructure” legislative agenda that Congress is currently focusing on. We remain optimistic that the EB-5 Regional Center Program can be reauthorized in December, most likely attached to one of the bills that fund the government.
In further positive news, we are seeing clients who are receiving employment authorization documents (EADs) and travel permissions during this lapse. Overall we hope this gap is merely a delay in the program and that we will have regional center program reauthorization, with the integrity improvements currently being discussed, before the end of this year.