Why is the Regional Center EB-5 program not being reauthorized already?
Why is the Regional Center EB-5 program not being reauthorized already? Who is holding up the process?
Great question! I wish I had a clear answer for it. On one side of the equation, there are various EB-5 stakeholders with varied interests. On the other side, there are members of Congress who are trying to please their respective constituents. It has been difficult, to impossible, to get into a consensus between these two groups. The added complication is that within each group, there are significant differences. The main EB-5 stakeholders are: Invest in the USA (IIUSA), EB-5 Investment Coalition (EB-5IC), and the American Immigrant Investor Alliance (AIIA).
IIUSA has long supported the Grassley/Leahy bill that unfortunately did not pass last year. This bill, among other things, was going to raise the minimum required investment amounts, redefine the TEA designation method, and perhaps most importantly, instill integrity measures and stabilize the program with a five-year reauthorization. EB-5IC is not happy with the proposed designation method of TEA. The new bill would increase the minimum required investment amount applicable to most geographies NYC developers have used EB5 funds to fund their projects. AIIA has one wish. They would like the rights of present investors protected. They fear their investors could start receiving denials if the program stays on a lapsed mode for too much longer. Therefore, they are in favor of an interim solution to the problem. They want Congress to pass a separate standalone law, the Foreign Investor Fairness Protection Act (FIFPA), to grandfather the rights of existing investors. The other two groups fear that if Congress passed such a law that would jeopardize the prospects of reauthorization altogether as Congress would feel their job finished. Even though last year, a consensus term sheet was drafted and presented to members of Congress, it appears like it is still missing some key provisions lawmakers feel are not negotiable, placing the industry in a deadlock. There is hope that either by February 18, 2022, or at least by the end of the first half of 2022, some form of reauthorization bill will pass with all groups compromising, but nothing seems definite.
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