Extension of the EB-5 Program to June 30, 2021, and other Updates
We are pleased to report that the regional center-based EB-5 Immigrant Investor Program has been extended, without change, by 6 months to June 30, 2021. There was, however, drama leading up to the extension. There were several brief extensions of the EB-5 program, together with the continuing resolution for funding the government, to which it was attached, while there were intense and protracted negotiations on the budget, COVID relief and other matters. Finally, Congress passed the extension legislation on December 22, 2020. However, President Trump wasted nearly a week before signing the bill into law, while holding out for new changes that he wanted Congress to make to the bill, which were different from his previous demands that he had made right up until when the bill had been passed, but then he ultimately relented and signed the bill into law on Sunday, December 27, 2020.
The other drama surrounding the EB-5 program was that legislation titled “Fairness for High-Skilled Immigrants Act of 2019”, which would have done considerable damage to the EB-5 program, advanced to initial passage in the House and Senate. However, as I will explain further below, the legislation passed in the House and Senate had differing provisions, and the differences were not resolved, and so the legislation did not advance to final approval and it did not become a law. The legislation would have removed the per-country quota usage limitations that keeps any one or multiple countries from using up the entire employment-based quota (the EB-5 program falls under the employment-based quota, albeit with its own separate quota of 10,000 green cards per year, and it would have been impacted by this legislation). The effect of the legislation would have been to award the entire quota to EB-5 investors from China and Vietnam for the next several years until their quota backlog would be resolved.
American tech companies were pushing these bills through the House and Senate because they wanted to end the quota backlog plaguing Indian tech workers. The goal of helping these long-suffering immigrants was reasonable and worthy, but the method being used to solve this problem was completely wrong. A reasonable solution would have included increasing the overall employment-based immigration quota as well as no longer counting dependents against the quota, but tech sector companies figured that they could use their money and influence to take control of the entire EB-2 and EB-3 quotas. To a great extent, this legislation advanced by well-funded lobbying, stealth (by using procedures that avoided public debate of the very negative consequences of this legislation), and applying pressure to any opponents by accusing them very vociferously, via social and other media, of being anti-Indian and racist. They almost succeeded, but Senators from certain states, where the tech sector is not so dominant, and where the local immigrant population consists of immigrant groups other than Indian tech workers, managed to stall the legislation and impose a more drawn-out implementation time frame, which big tech and its supporters were not willing to accept (probably because they are calculating that they can still pull this off on their own terms in the next Congressional session), and so their supporters in the House and Senate stopped their push for reconciliation and final approval of the legislation between the House and Senate.
My prediction is that tech sector companies will attempt again to push this legislation through in the next session of Congress. However, I think that the legislation will encounter immediate and strong resistance and amendments to stretch out the implementation time frame because the competing interests will be the same, and now, other immigrant groups and industries are actively resisting the legislation and they are aware of the tech industry’s efforts and are motivated and mobilized to block, or at least to water down the legislation (or insert poison pills in it). If the drawn-out 9-year, step-wise implementation time frame in the Senate bill had been imposed, then there would still have been very good chances of EB-5 investors with a currently pending I-526 petition, and even those who will soon file an I-526 petition, to obtain the conditional green card before the lifting of the per-country limit would backlog the cases of EB-5 investors from the rest of the world. If the shorter 3-year implementation time frame in the House bill had prevailed, then pending I-526 petitions might have cleared in time, but the time would have been tight for EB-5 investors with new I-526 petitions to clear the process in time. Some estimates are that it would take 8+ years for the backlog of Chinese and Vietnamese EB-5 investors to have been cleared once the per-country limit would have been lifted.
Under a different scenario, if the Democrats succeed in picking up two seats in the Senate from the upcoming runoff election in Georgia in order to achieve a majority in the Senate, there are decent chances that they could advance Biden’s immigration agenda of increasing the employment-based quota, including for EB-5, while also removing the per-country limits, in order to achieve a compromise of these competing industries’ and immigrant groups’ interests. Even without the Democrats picking up a majority in the Senate, there is still some possibility that a compromise could be reached for increasing the overall employment-based quota and/or increasing the availability of employment-based green cards under the existing quotas through no longer counting dependent family members against the quota. However, the scenario of increasing the overall employment-based quota is less likely if the Republicans retain a majority in the Senate, since increasing the employment-based immigration quota is unpopular among their numerous anti-immigrant supporters.
Stay tuned, and we will apprise you of any changes once they become likely to happen. It is important to note that there are many crazy legislative proposals in Congress, but very few ever pass both houses and become signed into law by the President. Therefore, I refrain from discussing proposals until they actually reach an advanced stage of consideration and/or passage. If you would take seriously ever foolish idea proposed by members of Congress or the President, then you could go crazy monitoring and worrying about them all. However, I wanted to explain this legislative development because it did actually become a credible threat to the EB-5 program.