Comprehensive EB-5 Modernization Legislation Introduced in the U.S. Senate

Today, Senators Graham (R-SC), Rounds (R-SD) and Cornyn (R-TX) introduced the “Immigrant Investor Program Relief Act” (S. 2778, the Act) proposing long overdue improvements to modernize the EB-5 program in alignment with industry and market principles.  The Act reflects a fair compromise between rural and urban stakeholders providing substantial market advantages to rural and urban distressed areas while providing opportunities  for “downtown” projects.

Major programmatic provisions under the Act:

Duration of Reauthorization – The program’s authorization is extended for six years through Sept. 30, 2025.

Targeted Employment Area (TEA) Definitions

Rural Area definition: The term “‘rural area” means any area that:

• is outside of the boundary of any city or town with a population of 20,000 or more people; and
• is outside of a metropolitan statistical area; or
• is within any census tract that is greater than 100 square miles in area and has a population density of fewer than 100 people per square mile.

Urban Distressed Area Definition: TEAs are limited to a single-census tract that is designated by the U.S. Treasury Department as a “Qualified Opportunity Zone,” as per the Tax Cuts and Jobs Act.

Investment Amounts

• Establishes and maintains a $100,000 differential between the two investment levels.
• New minimum investment level for TEAs is $1,000,000.
• New non-TEA amount is $1,100,000.
• These levels indexed to inflation going forward.

TEA Set-Asides

• 15% of visas for Rural
• 15% of visas for Urban Distressed
• Unused visas roll-over annually at the end of each year to general visa pool for access by all projects in the immediately following year

Transition Rules to New Program Requirements -90 days after date of enactment the new law takes effect.  Individual I-526 petitions that were pending up to date of enactment are grandfathered and not subject to new investment amounts.  Pending petitions rejected after enactment and re-filed would be subject to new investment amounts. 

Backlog Relief and Suggested Additional Revenue Source – Advance Parole and work authorization.

• All pending applicants in queue (approximately 30,000) should have the option to pay a fee to enable the individual and derivatives to travel to the U.S. and obtain work authorization if they have an approved I-526 and have been waiting for 3 years.
• All new Investor Petitions would be required to pay an additional $50,000 that would go into the new fund.
• The revenues raised by the EB-5 program improvement fee/backlog fee should be maintained separately for use by Congress for programs deemed in the national interest.

Sovereign Wealth Funds (SWF) – No bar on SWF capital in projects also funded by EB-5 capital.

Premium processing for Filed Cases 120 days

Significant New Revenue Sources for Congress and the Agency

Integrity Measures to Bolster National Security and Fraud Deterrence

• DHS provided with the authority to conduct criminal background checks and obtain biometric information from individuals involved in the regional center program.
• Establish new authority for DHS to debar individuals, and suspend or terminate regional centers, based on program non-compliance.
• Clarify the authority of DHS to deny or revoke immigrant investor petitions for reasons including fraud, misrepresentation, or national security concerns.
• Establish an EB-5 Integrity Fund to provide rigorous program oversight, which would be funded by regional center program participants.
• Create thorough annual reporting and accounting requirements for regional center operators.
• Enforce strict new requirements for third-party promoters marketing or promoting regional center investment projects.
• Provide DHS with improved investigative tools to ensure that an investor’s funds are derived from legitimate and lawful sources.
• Provisions to ensure that USCIS engages in a proper and non-preferential way with any person or entity involved in the EB-5 program.
• CFIUS Reform compliance for covered transaction as per the Foreign Investment Risk Review Modernization Act (FIRRMA).

https://www.eb5insights.com/2019/11/05/comprehensive-eb-5-modernization-legislation-introduced-in-the-u-s-senate/

Mentions

• Greenberg Traurig, LLP

States

• New York