Congress allowed the EB-5 Immigrant Investor Program to lapse. What now?
As you probably already know, the EB-5 Immigrant Investor Program, i.e., “the regional center EB-5 program”, is a temporary program that must be renewed by Congress in order to remain in effect. In the past, this program has generally been renewed by Members of Congress attaching the extension legislation to a must-pass continuing resolution budget bill. However, Senator Chuck Grassley of Iowa inserted a last-minute amendment to the extension back in December 2020, which left the program expiring on June 30, 2021, 3 months short of the expiration date of the most recent budget, which is in effect through September 30, 2021. Senator Grassley wanted to make his legislation, EB–5 Reform and Integrity Act of 2021, S. 831, for the reform of the EB-5 program to be the only vehicle for extension of the program.
To add further drama to the situation, on June 22, 2021, the U.S. District Court for the Northern District of California decided a lawsuit titled: Behring Regional Center LLC v. Wolf et. al., (3:20-cv-09263-JSC), by invalidating the USCIS’s “EB-5 Modernization Regulations” from July 24, 2019, which had had the effect of increasing the minimum required investment amount to $900,000, on November 21, 2019. This court decision has legal effect throughout the U.S. (For further details about this lawsuit and its impact on the EB-5 program, please click here to view my blog article on that topic.)
In late June 2021, the bipartisan team of Senators Grassley (Republican from Iowa) and Leahy (Democrat from Vermont) submitted S.831 for approval through the initial stages of the unanimous consent procedure. Under the unanimous consent procedure, unless any senator objects, the legislation passes. In the intial stage of the unanimous consent procedure, the intention to introduce the bill for approval through the unanimous consent procedure is announced through the so-called “hotline” procedure. In the initial stage, Senators can notify the proponents that they are placing a hold on the bill until they learn more about the bill or until certain concerns are addressed in the bill. Holds were placed on the bill initially by the Republican Senators Tuberville from Alabama, Paul from Kentucky, and Graham from South Carolina, and by the Democrat Senators Ossof from Georgia and van Hollen from Maryland. By June 24, 2021, it appeared that those holds would be lifted and the legislation would pass through the unanimous consent procedure, and so the bipartisan team of Senators Grassley and Leahy, then also joined by Republican Senator Cornyn from Texas, went to the Senate floor to request passage of S.831 by unanimous consent. At that moment, Senator Graham appeared on the Senate floor to announce that he would object to passage of S.831 through unanimous consent. At that point, there was not enough time to resolve Senator Graham’s objection before the Senate went into the July 4th recess. As a result, the regional center EB-5 program lapsed on June 30, 2021.
What are the consequences of a lapse in the regional center EB-5 program?
On June 30, 2021, USCIS published a short notice on their website, explaining how their processing would change as a result of the lapse in the regional center EB-5 program. Those include the following:
- USCIS will not accept for processing any new I-526 petition filed after June 30, 2021.
- USCIS will hold in abeyance (place on hold and stop processing) all I-526 petitions that are already pending as a result of having been filed on or before June 30, 2021.
- USCIS will not accept for processing any new I-485 application for adjustment of status, based on an approved I-526 petition, filed on or after July 1, 2021, but it will leave in pending status any I-485 application filed on or before June 30, 2021.
- However, processing of I-485 applications and accompanying I-765 applications for work authorization and I-131 applications for advance parole travel documents, filed in conjunction with an I-485 based on an approved I-526 petition, will stop. This will leave those with the pending I-485 in legal status, but there will be no progress on processing of the I-485, I-765, or I-131 until the regional center EB-5 program is extended.
- USCIS will not forward approved I-526 petitions to the National Visa Center to launch the consular processing of an immigrant visa procedure for those EB-5 investors living abroad.
Further consequences of the lapse in the regional center EB-5 program will be the following:
- U.S. embassies and consulates abroad will stop processing the immigrant visa applications of EB-5 investors. If anyone has an interview appointment scheduled, that appointment will be cancelled, if the regional center EB-5 program is not extended prior to the interview date.
- Any EB-5 investor, who has already had the immigrant visa interview and is awaiting the return of the passport with the immigrant visa, will not receive the passport back with the immigrant visa inserted until the regional center EB-5 program is extended.
- The National Visa Center will stop processing the immigrant visa application case file of any EB-5 investor under the regional center EB-5 program until the program is extended.
The following EB-5 investors will not be impacted by the current lapse in the regional center EB-5 program:
- Any EB-5 investor who invested in a stand-alone business with direct job creation and filed the I-526 petition under the “standard EB-5 program”. This program is permanent and will not be impacted by the current lapse in the regional center EB-5 program.
- Any EB-5 investor who obtained the immigrant visa on or before June 30, 2021.
- Any EB-5 investor who is already living in the U.S. in conditional or unconditional permanent resident status.
- Any EB-5 investor who has a pending I-829 petition for removal of conditions from permanent resident status, or who needs to file an I-829 petition while the regional center EB-5 program is lapsed.
Will Congress come back from recess and extend the EB-5 program?
In spite of Senator Graham’s opposition to passage of S.831 through the unanimous consent procedure, Senator Graham has a history of supporting the EB-5 program. In fact, at the beginning of the COVID pandemic, when the major economic impact of the pandemic was becoming clearer, Senator Graham briefly proposed lowering the investment amount under the EB-5 program back to $500,000. Given his history of support for the EB-5 program, EB-5 industry insiders believe that Senator Graham can be won over to support passage of S.831, probably through a renewed unanimous consent process.
It is anticipated that the House of Representatives will follow the Senate’s lead in passing the companion bill, H.R.2901, which is identical to S.831, since supporters of the EB-5 program in the House of Representatives understand how difficult it is to pass any legislation in the Senate and, as a result, it is simplest for them just to make their proposals mirror the legislation that has passed in the Senate so that there are no new provisions for senators to object to, since any differences have to be negotiated in conference committee and put to a new vote in the House and Senate.
Also, the reason why I consider it important to explain these details of the legislative history of the extension process is in order to clarify and emphasize the level of support there is in Congress for extending the regional center EB-5 program and that the program is not lapsing due to indifference or lack of interest in the program among members of Congress.
It is also important to note that the regional center EB-5 program has been in existence as a temporary program for over 28+ years since October 1992. Congress renewed the regional center EB-5 program even in years, particularly in the late 1990s, when it was not even functioning and there were regional centers in only a couple of states, as Congress worked to reform and improve the functioning of the program. Nowadays, despite long processing delays and quota backlogs, the regional center EB-5 program is functioning relatively well and the benefits of the program after distributed widely across the U.S., with regional centers located in pretty much every state and billions of dollars of economic stimulus money, supporting job creation, flowing into the U.S. through this program. With the benefits of the program now broadly distributed to the districts of most Members of Congress, the chances of the regional center EB-5 program being renewed promptly without a long lapse are very high.