The Department of Homeland Security (DHS) has published a notice of proposed rulemaking on the general EB-5 program in the Federal Register on January 13, 2017, and an advance notice of proposed rulemaking on the EB-5 regional center program on January 11, 2017. Also, the Department of Commerce has published an economic impact report on the EB-5 program. Following are highlights of the notices and the new report:
Proposed Rule on EB-5 Program
Priority date retention. DHS proposes to authorize certain EB-5 petitioners to retain the priority date of an approved EB-5 immigrant petition for use in connection with any subsequent EB-5 immigrant petition. Petitioners with approved immigrant petitions might need to file new petitions due to circumstances beyond their control (for example, DHS might have terminated a regional center associated with the original petition) or might choose to do so for other reasons (for example, a petitioner may seek to materially change aspects of his or her qualifying investment). DHS proposes to generally allow EB-5 petitioners to retain the priority dates of previously approved petitions to avoid further delays on immigrant visa processing associated with the loss of priority dates. DHS said it believes that priority date retention “may become increasingly important due to the strong possibility that the EB-5 visa category will remain oversubscribed for the foreseeable future.”
Increases in the investment amounts. DHS is proposing to increase the minimum investment amounts for all new EB-5 petitioners. DHS said the increase “would ensure that program requirements reflect the present-day dollar value of the investment amounts established by Congress in 1990.” Specifically, DHS proposes initially to increase the standard minimum investment amount, which also applies to high employment areas, from $1 million to $1.8 million to adjust for inflation. For those investors seeking to invest in a new commercial enterprise that principally will be doing business in a targeted employment area (TEA), DHS proposes to increase the minimum investment amount from $500,000 to $1.35 million. In addition, DHS proposes to make regular adjustments based on the Consumer Price Index for urban consumers (CPI-U) in the standard minimum investment amount, and conform adjustments to the TEA minimum investment amount, every 5 years, beginning 5 years from the effective date of the rule.
TEA designations. DHS proposes to “reform the TEA designation process to ensure consistency in TEA adjudications and ensure that designations more closely adhere to Congressional intent.” First, DHS proposes to allow any city or town with high unemployment and a population of 20,000 or more to qualify as a TEA. Currently, TEA designations are not available at the city or town level, unless a state designates the city or town as a TEA and provides evidence of such designation to a prospective EB-5 investor for submission with the Form I-526, Immigrant Petition by Alien Entrepreneur. Second, DHS proposes to eliminate the ability of a state to designate certain geographic and political subdivisions as high-unemployment areas. Instead, DHS would make such designations directly, using standards described in the proposed rule. DHS said it believes these changes would “help address inconsistencies between and within states in designating high unemployment areas, and better ensure that the reduced investment threshold is reserved for areas experiencing significantly high levels of unemployment.”
Removal of conditions. DHS proposes to clarify that derivative family members must file their own petitions to remove conditions on their permanent residence when they are not included in a petition to remove conditions filed by the principal investor. In addition, DHS proposes “to improve the adjudication process for removing conditions by providing flexibility in interview locations and to update the regulation to conform to the current process for issuing permanent resident cards.”
Written comments should be submitted by April 11, 2017.
Advance Notice of Proposed Rule on EB-5 Regional Center Program
DHS said it is considering regulatory changes to the EB-5 immigrant investor regional center program and invites comments, data, and information. DHS seeks comments on: (1) the process for initially designating entities as regional centers; (2) a potential requirement for regional centers to use an “exemplar” filing process, explained in detail in the advance notice; (3) “continued participation” requirements for maintaining regional center designation; and (4) the process for terminating regional center designation.
DHS said that it has some information on these topics but seeks additional information that can help the agency “make operational and security updates to the Regional Center Program while minimizing the impact of such changes on regional center operations and EB-5 investors.” DHS said it is particularly interested in data that would inform a quantitative and qualitative assessment of the costs and benefits of the potential changes described in the advance notice. DHS is also interested in receiving more information on how to identify the small entity status of EB-5 stakeholder entities, such as regional centers and new commercial enterprises. DHS specifically requests information on revenue or employment data sources on regional centers and new commercial enterprises.
Written comments should be submitted by April 11, 2017.
Department of Commerce Report on EB-5 Program
The Department of Commerce’s Economics and Statistics Administration (ESA) has published an economic impact report on the EB-5 program entitled Estimating the Investment and Job Creation Impact of the EB-5 Program. The ESA examined individual projects that were active during fiscal years 2012 and 2013, and compiled a new dataset that includes the number of EB-5 projects, the number of investors, the amount of EB-5 and non-EB-5 related investment spending, and the resulting expected job creation. By using EB-5 investment and job creation estimates over the two-year period, ESA tabulated that there were 10,644 investors, a total dollar value of investment of $16.4 billion, and 169,759 expected jobs from 134 projects in EB-5 regional centers. ESA also tabulated 428 stand-alone investor projects during those two years that were expected to create or save 4,820 jobs. Active EB-5 projects, both those associated with regional centers and stand-alone projects, resulted in an estimated 174,039 expected jobs—nearly 16 jobs per immigrant investor.