The latest news is that The EB-5 Regional Center program will soon sunset. It will expire June 30, 2012.Th, 2021. It is because it was. Decoupled After years of being renewed this way, automatic renewals are now part of the Congressional budgetary process. In the meantime, as a consequence of a recent Behring Court Rule?The minimum EB5 program investment requirement for EB5 regional centers has been lowered to $ 500,000 From as low as $900,000. The U.S Federal District Court ruled that the regulation increasing the amount was inappropriately adopted.
The EB-5 Reform and Integrity Act of 2020
U.S. The EB-5 Reform and Integrity Act 2021 was introduced by Senators Chuck Grassley (Republican-IA) and Patrick Leahy (D-VT). This Act reauthorizes the EB-5 regional centre program in Congress. This Act and a similar bill in Congress called for changes to the EB-5 Regional Center Program in order to better protect investors, reduce corruption in its operation, and prolong the program’s life for five more years. Since the beginning of June, members of the EB-5 community (including Invest in America (IIUSA), and the American Immigration Lawyers Association, (AILA) have been working to support the legislation before its June 30th 2021 deadline.
In the background, there was a tussle among big-money interests, who were supporters of a prourban EB-5 program and the pro rural supporters like Grassley, Leahy. It is a dispute over who defines Targeted Employment Areas, or TEAs that are eligible for EB-5 regional centres. The TEAs should be determined at the state level, as in the past when large developers were able to access the program via creative measures. The TEAs should be determined federally by pro-rural supporters. This would limit TEAs in high unemployment areas and restrict access to creative measures that favor big developments. This was the subject of the Bhering litigation, which focused on TEAs as well as investment requirements.
What are the effects of the Bhering Court decision?
A regulation of the Department of Homeland Security which raised the minimum amount of money that must be invested in the Regional Center EB-5 program from $ 500,000 up to $900,000. was struck down by the Bhering court. The Department of Homeland Security regulation that raised the minimum amount of money required to be invested under the Regional Center EB-5 Program was struck down by the Bhering court decision. It was found that the person who implemented the regulation, which was raising the investment requirement, was not properly appointed and the regulation was therefore invalid. The bottom line is that the minimum investment needed to approve an EB-5 petition at this time is $ 500,000, as long as the EB-5 Region Center Program is still in existence. This raises the question of whether or not this policy will change.
A recent EB-5 ILW.com comment pointed out that “the Administrative Procedure Act contains provisions that allow an agency make an interim final ruling effective upon publication and receive comments later. USCIS has used those provisions before.” Mayorkas, Secretary for DHS, has already informed the court of the strong support of this regulation by the Biden administration. It is difficult to believe that USCIS won’t use all of the tools available to it to challenge the Behring decision.
Is the EB5 program being extended?
Despite Senator Grassley’s last-minute attempt to “hot-line” his bill through Senate last week, allowing the bill to pass quickly, but only based upon the unanimous consent of all the Senators, it was stopped. Senator Lindsey Graham opposed the effort, thereby preventing the bill from being passed before the July 4 th weekend congressional break. The EB-5 program is currently not extended. What impact will this have upon investors?
Investors who have already invested but are still waiting to receive their I-526 petition approval, those who have their approval but have yet to be processed for the greencard, and even those with conditional green cards but no permanent green cards, will they still be able get their approvals?
The Department of Homeland Security is unable to issue green cards at this time, as the program has ended. They cannot also not approve any pending applications for such green cards. Either one of these developments will occur. Either Congress will reauthorize the program or it won’t.
If the program is authorized again, as it has been in the past, and when it was shut down because of the government’s failure to function, then the USCIS can resume processing applications. Hopefully everyone’s application will be processed back to where it was before it expired. Many people familiar with the program, including lawyers and officials, expect this to happen in the coming days. After the holiday break, the Grassley bill may be passed again by unanimous consent.
Investors will face two problems if the efforts to revive it fail. This could be due to a stalemate within Congress, or other pressing events, leaving the EB-5 program unreachable.
One option is to get a rebate on the money invested. These efforts will be subject to the terms of regional center documents. Regional centers will need to arrange for the liquidation of indebtedness and a procedure for getting rebates. Investors will need to go to court to get a rebate of funds if a liquidation cannot be arranged or there are not arrangements in place. Investors will also be able turn to the Securities Commission for rebate enforcement if it is established that regional centres did not adhere to their founding documents, or if there are evidence of fraud or misrepresentation.
What about green cards?
Investors may wish to talk to their lawyers about potential litigation if they fail to follow the due process when administering the program. This includes requiring investors to invest funds in order to file EB5 petitions. Regional centers can use investor funds to create jobs for Americans. Additionally, the program administration could be stalled or mishandled through actions such as appointing unauthorized officers to administer it, thereby delaying the processing and ultimately denying the EB-5 benefits promised. It will depend on the treatment of existing applicants and whether they are grandfathered under the terms.
There is no need to panic or be concerned at this time. Most likely, Congress will reinstate the EB-5 program and Bhering’s case will be resolved by a new regulation. Although not all will be happy with these developments, it is best to wait. It is better to let the process unfold than rush to fix things.