June 27, 2022

Volume XII, Number 178

Advertisement
Advertisement

June 27, 2022

Subscribe to Latest Legal News and Analysis
Advertisement

EB-5 Regional Center Program Update: As Deadline for Expiration Approaches, Congressional Action Likely

Now just days away from the December 11th expiration of a short-term Continuing Resolution (CR) that has been funding federal activities since the start of the current fiscal year on October 1st, Congress is feverishly working to reach agreement on a long-term Omnibus spending bill that will fund the federal government through the remainder of the fiscal year. Included in the CR, which was approved in late September, was a short-term extension of the EB-5 Regional Center Program, which also is set to expire on December 11th.

Supporters of the EB-5 Regional Centers are currently working to achieve a long-term reauthorization of the program. Key contacts on Capitol Hill involved in the negotiations indicate that a reauthorization and comprehensive reform of the EB-5 program discussed below may be included in the Omnibus spending bill that Congress could consider this week.   However, another possibility that appears increasingly likely could be a simple, “straight” extension of the EB-5 program – free from any substantive policy changes, with the extension tied to the length of the Omnibus. In that scenario, Congress could work toward negotiating a reauthorization and reform measure with policy changes that could be enacted before the expiration of the straight extension.

By way of background, the EB-5 program offers foreign investors an opportunity to secure permanent U.S. residency by making a minimal capital investment of $1 million per investor that also will create at least 10 new jobs for U.S. workers. For investment in a Targeted Employment Area (TEA), i.e. rural and priority urban investment areas, the minimum investment is $500,000. The Regional Centers are private for-profit or government-affiliated entities that receive special designation from U.S. Citizenship and Immigration Services (USCIS) to administer EB-5 investments and oversee job creation.

Competing legislation to reauthorize and reform the regional center program was introduced in the House of Representatives earlier this year by Representatives Mark Amodei (R-NV) and Jared Polis (D-CO), and Representatives Zoe Lofgren (D-CA) and Luis Gutiérrez (D-IL). In the Senate, Judiciary Committee Chairman Chuck Grassley (R-IA) and Ranking Member Patrick Leahy (D-NH) introduced their own reauthorization and reform measure.

With the earlier bills having failed to move, a new bipartisan, bicameral discussion draft is being circulated. The new proposal would extend the program for five years through September 30, 2019, and also tackle many of the concerns raised by program opponents.

Specifically, the new draft legislation would:

  • Increase the minimum investment in rural and high-unemployment areas to $800,000

  • Set aside 4,000 of the total 10,000 EB-5 visas available annually for projects in rural and high-unemployment areas (currently that set-aside is 3,000 visas)

  • Divide the 4,000 TEA visas equally among investors who invest in rural areas and priority urban investment areas (any unused visas in any given year will remain available within the same category for the following fiscal year)

  • Require that investors submit to the Department of Homeland Security a comprehensive business plan, along with a credible economic analysis regarding estimated job creation, any documents filed with the Securities and Exchange Commission under the Securities Act of 1933, any investment and offering documents, a description of the policies and procedures designed to ensure that the regional center and persons engaged with it comply with securities laws and a certification of compliance, and documentation demonstrating that the regional center consulted with a local economic development agency or municipality regarding the capital investment project

  • Define a TEA as a rural area, a priority urban investment area, a special investment zone, a BRAC facility, or an area consisting of a census tract or contiguous census tracts with an unemployment rate of 150 percent of the national average, a poverty rate of at least 20 percent, and a median family income that is not more than 80 percent of the statewide median family income.

As one might imagine, many aspects related to the Omnibus remain fluid.  And as discussed above, given that the discussion draft circulated above has not been vetted by Committee hearings or mark-ups, one possibility remains that the EB-5 program will once again be temporarily extended, giving Congress more time to debate and negotiate potential policy changes to the program.

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume V, Number 341
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Alexander Hecht, Vice President of Government Relations, Mintz Levin law Firm
ML Strategies - Executive Vice President & Director of Operations

Alex is Executive Vice President & Director of Operations, ML Strategies, Washington, DC. He is an attorney with more than 10 years of senior-level experience in Congress and trade associations.

Alex assists clients with their legislative and regulatory needs on a wide range of issues, including health care, telecommunications, the Telephone Consumer Protection Act (TCPA), technology, energy, and federal procurement. Prior to joining ML Strategies, Alex served for over six years as chief counsel for Senator Olympia J. Snowe (R-ME) on the US Senate Committee on Small Business...

202-434-7333
R. Neal Martin Government Relations Attorney Mintz Law Firm
Senior Manager of Government Relations

With 18 years of experience, Neal is a Director of Government Relations at ML Strategies. With more than 10 years of experience in government and government relations, Neal focuses on issues related to transportation and infrastructure, clean energy, trade, and federal appropriations. Working with a client portfolio made up of non-profits, clean energy start-ups, and large companies, Neal’s efforts have focused on increasing client visibility and influence with decision-makers at the congressional and federal agency level, and providing strategic advice on public policy and federal funding...

202-434-7458
Advertisement
Advertisement
Advertisement