On June 30, the EB-5 Regional Center program will “sunset” which means unless there is new legislation to reauthorize or extend it, the program will lapse. Since the way Congress creates legislation is complicated, there is a possibility that this deadline could pass while work is still being done on new legislation.
In the past, the EB-5 Regional Center program has been tied to the government funding bill, and over the 30 years it has been active, it has lapsed five times. During those shut downs, USCIS and State Department have issued guidance on how they can act during the lapse. In the most recent shutdown, in December 2018 – January 2019, application processing at USCIS continued, but the State Department stopped consular interviews and adjustment of status.
LCR has been actively talking to members of Congress and has seen bi-partisan support for the program, but we cannot say what actions Congress will take or how the USCIS will interpret changes in legislation in their processing or updating regulations. We also cannot provide legal advice, but we do want to help keep our clients informed of the current facts and the possible scenarios that could happen over the coming weeks.
We recognize that there are many factors contributing to the uncertainty around what will happen on or before June 30th. The Congress could:
- Pass new legislation, such as the proposed Grassely-Leahy bill, via unanimous consent in the Senate and House.
- Include new legislation with another related bill, such as the infrastructure bill currently being negotiated.
- Pass a short-term extension until September in order to avoid disruption and litigation.
- Declare the program is expiring and will not be continued.
In the first two scenarios, it is impossible to provide additional insight into the impact on the EB-5 program until the final legislation is posted. LCR supports the Grassely-Leahy bill and the added integrity and recording measures, and already follows many of them, but this bill may be modified before it is passed. If the third scenario comes into play, the program would continue as is throughout the extension period. If the Congressional leaders were to agree to terminate the program, there would also be guidance on how to handle the backlog of applications.
June 30 Passes without Congressional Action
If the leaders of the Senate and the House do not take any action, previous sunsets indicate that USCIS will put all filed petitions in “abeyance”, meaning on hold, until Congress passes new legislation or states clearly that it intends to discontinue the program.
From our assessment of past actions and the legislation governing the program, this would probably mean:
- For investors at the I-829 stage, where they are seeking the removal of the conditions on their Green Card, there should be no disruption. This process applies to multiple visa types and requests should be processed.
- For clients with an approved I-526 petition, who are registering for permanent residence or seeking an adjustment of status, it is unclear if the State Department will process them or hold them in abeyance.
- If a family has filed an I-526 petition but it has not yet been adjudicated, in the past the USCIS has held these applications in abeyance. If Congress makes it clear that they intend to discontinue the program, the petitions will be rejected and returned.
- New I-526 petitions would likely be received, but no receipts issued and filing fee checks not cashed.
After June 30
If there is no clear statement of discontinuing the program, leaders of the Senate and the House can continue to work on legislation and pass it stand alone, include it in a related bill, or move to re-include it with the Omnibus Spending Package.
Senator Leahy is currently chairman of the Appropriations Committee and Senator Grassely is a senior Republican on the Budget Committee. They have the ability to introduce new legislation in this process and the seniority in their respective parties to champion the program. If the legislation is included in the 2022 funding bill, the EB-5 legislation would be voted on as part of the full budget package by the Senate and the House before being signed by the President.
For everyone interested in the EB-5 Regional Center program, it is frustrating not to have clarity and a long term reauthorization of the program.
We fully support the need for increased structure in reporting and anti-fraud provisions. We already closely manage our investors’ interests on our projects and do both accredited investor and background checks. We also believe processing can be much more efficient and believe Congress should confirm more reasonable processing times and provide the means for the agencies to achieve them.
The fact that senior members of both parties believe in the job creation and economic benefits of the EB-5 Regional Center program makes us confident that the program will not be discontinued.
It is possible that the program will lapse and cause added delays to the processing of applications, but a five year reauthorization with added integrity measures and faster processing time would be welcome.