EB-5 Reauthorization Bill Introduced in the Senate
On March 18, 2021, Senators Grassley (R-Iowa) and Leahy (D-Vermont) re-introduced the “EB-5 Reform and Integrity Act of 2021,” a bill that would reauthorize the EB-5 Regional Center Program, which is set to expire on June 30th, through 2026. The bill also includes measures designed to address fraud and national security concerns.
Summary of the EB-5 Reauthorization Bill
The EB-5 Reauthorization Bill does not meaningfully address what many EB-5 investors view as the most important challenges facing the EB-5 Program, viz. extended visa backlogs, long processing times, and child age-out risks for investor families facing retrogression.
The Bill focuses on strengthening the integrity of the EB-5 Program by codifying various responsibilities of EB-5 Regional Centers and providing protection measures for good faith EB-5 investors. The Bill’s proponents suggest that by adopting the integrity measures with a 5-year extension, Congressional leaders will be more likely willing to focus on other EB-5 measures to address the issues above. Below is a short summary of the EB-5 Reauthorization Bill:
EB-5 Program Extension:
- Extends the EB-5 Regional Center Program through 2026.
- Changes job creation by requiring 10% of total jobs be direct
- For construction projects lasting fewer than 24 months, direct jobs may be counted proportionally to the construction duration and total number of direct jobs must be 25%
EB-5 Regional Centers:
- Increased number of fraud-prevention practices and reporting requirements, including
- Providing attestations confirming compliance with the “integrity measures”
- Retaining all records for minimum of 5 years
- Being subject to audit by DHS every 5 years
- Receiving site visit of the EB-5 Project by DHS
- Filing an exemplar with DHS (i.e. project business plan, offering documents, marketing materials, etc.)
- Providing DHS and investors annual statements, including certifications of compliance with US securities requirements
- Disclosing material litigation or bankruptcy proceedings
- Subjecting principals of Regional Centers, NCEs and affiliated JCEs to background checks and fingerprinting
- Requiring separate bank accounts for all NCEs
- Establishes an “EB-5 Integrity Fund” in which EB-5 Regional Centers $10,000 to $20,000 per year to support DHS oversight activities
- Requires that foreign agents and third-party promoters of the EB-5 Program abroad register with DHS
- Requires investors to provide tax returns from the past 7 years
- Includes good faith requirement for gifts and loans; donor’s records required in gift cases
- Provides good faith EB-5 investors the opportunity (180 days) to confirm
- EB-5 investors will retain their priority dates and children will be protected from age-out in these circumstances
- USCIS must complete a fee study within 1 year of the Bill’s enactment in order to set fees at a level to achieve the following processing times:
- 180 days for initial EB-5 Regional Center designations and exemplar petitions (90 days if TEA)
- 240 days for investor petitions (120 days if TEA)
Behring supports EB-5 integrity measures and is a signatory to the Coalition to Save and Create Jobs. Behring seeks to assist in the advocacy for comprehensive EB-5 reform to reduce the wait-times for families to obtain their US green cards and to provide clarity on TEA designation processes so that EB-5 investors have greater confidence when making their investments.
Historically, EB-5 policy has failed to meet these challenges. And since the 2019 EB-5 Modernization Rule was implemented, the EB-5 industry has seen a 99% collapse in new EB-5 participation. Behring seeks to restore the EB-5 Program’s strength in creating full-time American jobs.
Meanwhile, Behring continues to create market-based solutions to some of these challenges by providing EB-5 investors more flexible investment options while accessing institutional quality investment assets.
Behring is currently challenging DHS on the validity of the 2019 EB-5 Program Modernization Rule. If the EB-5 regulations are vacated, then the $500,000 investment amount will be restored.
But it is likely only for a limited time.
The sunset date for the EB-5 Regional Center Program is June 30, 2021. New legislation is expected to change the required investment amounts. Learn how you can file your I-526 petition within 10 days.