Understanding Key Terms of EB-5 Reauthorization Process
On December 3rd, Congress passed a continuing resolution to maintain current budget levels through February 18, 2022. For the past several years, the EB-5 regional center program has been renewed through such CRs. However, to avoid a government shutdown, no new spending or policy measures were added with the sole exception of providing resettlement funding for evacuees from Afghanistan. The most likely vehicle for EB-5 reauthorization is still to be through the omnibus appropriations bill that Congress is expected to pass on or before February 18, 2022. Behring continues its efforts to obtain long-term and sustainable reauthorization for the EB-5 regional center program. Read more here.
The American legislative process can be frustrating and long. A classic depiction of how a bill becomes a law is still the 1976 children’s song from Schoolhouse Rocks. (Politico.com has provided a tongue-in-cheek 2021 revamp adding the complications of filibusters and reconciliation.) Here, we wanted to explain a few key terms you will encounter when reading or discussing EB-5 program reauthorization.
What is “Must-Pass” Legislation?
The government’s fiscal year ends September 30th. On or before that date, Congress needs to pass a new budget for the next fiscal year. These past several years, a deeply divided Congress has further complicated this process and has created continual threats of government shutdown. The most recent government shutdown was in December 2018, lasting 35 days. Must-pass legislation are such appropriations acts or continuing resolutions that must be passed in order to keep the government funded. There are 13 appropriations bills that cover all functions of the federal government, including the military, transportation, and homeland security. Congress hasn’t passed all its appropriations bills before the end of a fiscal year for over 20 years.
What is a Continuing Resolution?
A continuing resolution (or CR) is a stopgap measure to maintain federal budget at current levels with little to no changes in policy or funding, until Congress is ready to pass the final appropriations bills or an omnibus bill. Congress is essentially doing the bare minimum to keep the government funded. CRs can last a few weeks, months or even a full year. In recent years, the EB-5 regional center program was often extended without changes for a few weeks to months from September 30th to the end of December or March or straight to the following September. The primary reason for such short-term extensions is that Congress has been unable to pass holistic EB-5 legislative reform since 2015.
In December 2020, the EB-5 regional center program was decoupled from automatic budget renewals by agreement between Senate leaders to compel the EB-5 industry and Congress to pass EB-5 reform. When a reform bill presented by Senators Grassley (Iowa) and Leahy (Vermont) failed to pass unanimous consent in June 2021, the EB-5 regional center program lapsed on June 30th. EB-5 stakeholders identified the CR as a potential vehicle to add EB-5 reauthorization language to the CR passed on December 3, 2021.
What is an Omnibus Bill?
The 13 appropriations bills are usually pushed to the end of the fiscal year or deferred by continuing resolutions. Thus, Congress typically wraps the 13 bills into one omnibus bill. Omnibus comes from the Latin to basically mean “for everything.” It is a single massive document that incorporates all 13 appropriations for a single vote.
They also present an opportunity for Congress members to add amendments or other riders tacked onto the bill because it has been extremely difficult to pass standalone legislation in recent years.
Through our advocacy efforts, Behring has learned that the primary strategy for EB-5 regional center reauthorization is to include EB-5 reauthorization and reform to the omnibus bill.
The Importance of Appropriations Committee and Judiciary Committee and its Subcommittees on Immigration, Citizenship and Border Safety
As the classic “I’m just a bill” portrays, most bills die in committee. The lobbying efforts by EB-5 Investment Coalition, IIUSA, and other EB-5 stakeholder groups have focused on persuading key legislators and their staff on the Appropriations and Judiciary Committees in the House and Senate.
The Judiciary Committee in both the House and Senate have subcommittees on immigration and citizenship and is responsible for formulating and approving bills on immigration legislation to present to the floor for a full vote. Key members include Senators Grassley (Iowa) and Leahy (Vermont) who have been instrumental in shaping the EB-5 reform debate, pushing for higher investment amounts, narrower TEA definitions, and stronger program integrity measures. Senators Cornyn (Texas) and Graham (South Carolina) and Senate Majority Leader Schumer have previously submitted holistic reform bills that address issues such as visa retrogression (or backlogs), child age-out protection, etc.
Much of the behind-the-scenes discussion and negotiation is not only among the Senate and House leaders, but also among their legislative staffers, particularly those on the subcommittees focused on immigration. They are often responsible for preparing the draft legislation, fielding comments and negotiating with other Senator or Congress member staff to forge a final draft.
Behring has directly engaged California lawmakers such as Senator Padilla, Chair of the Senate Judiciary Subcommittee on Immigration and Citizenship, and Congresswoman Zoe Lofgren, Chair of the House Judiciary Subcommittee on Immigration, Citizenship, and Border Safety. We have pressed them on the importance of the EB-5 program and its direct impact on California, one of the largest beneficiaries of EB-5 investments and the negative impact delayed reauthorization has on immigrant families (many of whom live and work in the Bay Area and Silicon Valley) and on our local communities. Behring has also been able to review and give feedback on proposed EB-5 legislation. They have been attentive, sympathetic and supportive of our efforts.
What to Expect on February 18, 2022
American politics is difficult to predict, and the legislative process can change day by day. Reauthorization of the EB-5 regional center program continues, and important discussions are occurring between key senators and their constituencies in the next couple weeks. We hope these bear fruit and provide clarity as to the timing of EB-5 reauthorization. Behring remains confident that EB-5 reauthorization is a matter of when, not if. We have key political support for reform. It is a matter of ironing out the final details. Recently, legislative priorities, such as the Build Back Better bill, reconciliation, debt ceiling, and other issues have distracted the focus away from EB-5 reauthorization. This extension provided by the continuing resolution will give additional time to finalize the EB-5 reform bill to gain the needed support for a more robust and sustainable EB-5 regional center program.
Contact Behring if you would like to learn more about Behring’s advocacy efforts and how you can help.