Today, the House of Representatives has passed the $1.5T omnibus spending package which includes the EB–5 Reform and Integrity Act of 2022. If signed into law, this amendment will make significant improvements to the EB-5 program and reauthorize the Regional Center program for five years.
The legislation is heavily based on the Grassely-Leahy bill which LCR has supported for the last two years. It will force a higher level of professionalism across the industry and require the kind of reporting and disclosure we have always delivered on our projects.
Key provisions in the bill are:
- New Investment Level for all EB-5 Visas – For 30 years from 1990 to 2021 the investment level was $500,000 in a TEA and $1,000,000 otherwise. This bill sets those levels at $800,000 for rural, TEA or Infrastructure projects, and $1,050,000 for other projects. These investment levels will be adjusted for inflation every 5 years, starting January 1, 2027.
- Regional Center Reauthorization – After being lapsed since June 30, 2021, this bill reinstates the program until September 30, 2027 and adds a broad set of integrity provisions effective 60 days after the bill is signed into law.
- Targeted Employment Areas – TEAs will be set federally by the Department of Homeland Security.
- Infrastructure Projects – A new category of projects is created for the funding of government (federal, state or municipal including agencies) projects. This is a new concept for EB-5.
- Rural Priority – To help drive more rural projects, 20% of all EB-5 visas in a given year will be reserved for rural projects which will be given prioritized processing.
- Integrity Measures – To provide greater protections to investors, all individuals involved in the EB-5 program must not have committed fraud or have other convictions. Required investor reporting and federal auditing of regional centers is established.
- Integrity Fund – A new fund made from a $20,000 annual regional center fee and an additional $1,000 investor filing fee will be created to pay for audits, site visits and ensuring participants comply with immigration laws.
- Processing Times Study – Requires the Director of Homeland Security to conduct a fee study to determine how to achieve the following processing time goals:
Any required adjustment of fees based on this study would come into effect no later than 14 months after the bill is signed into law.
- Protection from Expiration – To avoid the legal uncertainty current investors have faced, this new law ensures that if there is an expiration in the future, existing investors will be processed by USCIS.
At LCR, we welcome this bill and the integrity measures included within it. As a company with a division that is an SEC-registered advisory company, we believe in working to a high standard on our client focus, our disclosures, and our investment reporting.
More importantly, this means our current clients will move forward in the process with much clearer legislation.
This bill has been included in the FY 2022 Omnibus Spending Bill passed by the House of Representative on March 9th. The government’s current funding expires on March 11th, and would require a continuing resolution, or extension, if the Senate can not pass this bill. A four-day continuing resolution has been prepared which means the bill is expected to pass the Senate and be signed by the President before March 15, 2022.