As you may know, the EB-5 Immigrant Investor Program, i.e., the regional
center part of the EB-5 program, is a program that sunsets, or expires,
every few years. The upcoming expiration date is September 30, 2015. Few
people in the EB-5 field have any doubts about Congress agreeing to extend
the program. Unfortunately, though, the renewal process gives Congress
the opportunity to tinker with the program’s requirements, which
can lead not just to positive, but also to negative changes in the program.
Among the changes currently being proposed in the Senate’s renewal
bill, Senate Bill 1501, is an increase in the required investment amounts,
which would increase the required investment in a Targeted Employment
Area (“TEA”) from $500,000 to $800,000, and outside of a TEA
from $1 million to $1.2 million.
To make matters worse, the Department of Homeland Security, which is the
agency under which the U.S. Citizenship and Immigration Services (“USCIS”)
operates (USCIS being the authority that decides whether to approve the
petitions of investors under the EB-5 program, and also the authority
that establishes the regulations governing the EB-5 program), announced
that, even in the absence of Congress raising the investment amount, it
would increase the investment amount by regulation. This announcement
came in the form of a letter, dated April 27, 2015, from the Secretary
of the Department of Homeland Security, Jeh Charles Johnson, addressed
to Senator Charles Grassley, the Chairman of the Senate Judiciary Committee,
and to Senator Patrick Leahy, Ranking Member of the Senate Judiciary Committee.
Unfortunately, Congress did delegate the authority to change the minimum
required investment amount to the government agency vested with the authority
to administer the EB-5 program, originally the Department of Justice,
but now the Department of Homeland Security acting through the USCIS.
USCIS would have to change the minimum required investment amount via
regulation, which must be introduced through the administrative rule-making process.
When could the increase in the investment amount come into effect? If Congress
passes the extension of the EB-5 Immigrant Investor Program with the increase
in the investment amount, then the increase would take effect on October
1, 2015, which is the first day when the extension of the program would
come into effect, since the program will continue to function according
to the current rules up to and including September 30, 2015. Cases filed
prior October 1, 2015, which have not yet been completely approved, would
undoubtedly be “grandfathered”, allowing them to qualify based
on the lower required investment amount in effect at the time of investing
and filing the I-526 petition. If USCIS increases the investment amount
by regulation, then it will take longer for the investment amount increase
to come into effect. First, USCIS would have to draw up the proposed regulation,
submit it to public scrutiny and commit during the so-called “notice
and comment” period, and then finalize and implement the regulation.
This will probably take at least the better part of a year to accomplish.
Also, if any of the 700+ regional centers feel sufficiently threatened
by the anticipated decrease in demand for the program that would come
as a result of the increase in the investment amount, that regional center,
or group of regional centers, could file suit in federal court to block
the implementation of the regulation.
Since it goes without saying that an increase in the minimum required investment
amount would decrease demand to immigrate to the U.S. under the EB-5 Immigrant
Investor Program, our best hope is that Congress does not increase the
minimum required investment amount in the extension legislation. Our next
wish would be for USCIS to be at least as delayed in pursuing the increase
via regulation as it is in adjudicating petitions, or better yet, that
it just never gets around to pursuing the regulation, at all. If USCIS
does pursue and implement the regulation, we would then rely on the self-interest/self-preservation
instinct of the regional centers to prompt one or multiple regional centers
to litigate in federal court against implementation of the investment
In the meantime, EB-5 investors can lock in the current lower minimum required
investment amount of $500,000 by investing and filing the I-526 petition,which
is the first stage in the immigration process under the EB-5 program,
on or before September 30, 2015.