September 30, 2016 was the date that the EB-5 regional center program was supposed to sunset. On September 29, 2016, the President signed H.R. 5325, entitled ‘‘An Act making appropriations for the Legislative Branch for the fiscal year ending September 30, 2017, and for other purposes”. This bill included the Continuing Resolution serving as a stopgap spending measure to fund the government until December 9, 2016 to allow Congress enough time to pass another spending bill.
Similarly, Congress had previously extended the EB-5 regional center program when the program was to sunset. The last reauthorization in September 2015 was until December 2015 and then until September 2016. It is very possible that the program may be extended again temporarily (i.e. under a year) until Congress has a chance to fully explore proposed bills on EB-5. However, there has been a lot of speculation as to what form the entire EB-5 program will take, particularly with respect to its regional center program.
One of the most discussed bills is HR 5992 (“American Job Creation and Investment Promotion Reform Act of 2016”), which proposes a number of significant changes to the EB-5 program as a whole. Some of the proposed changes causing the most concern are:
- Changes on how Targeted Employment Areas (TEAs) are designated. If passed, many new commercial enterprises (NCEs) may no longer be eligible to receive the reduced amount from investors because their NCE’s location is not is a TEA, and can no longer be designated a TEA.
- Increasing the minimum investment amounts from $500,000 to $800,000 for TEA-related investments, and from $1 million to $1.2 million for non-TEA-related investments.
- Permitting only certain family members to gift funds to an EB-5 petitioner as the source of the investment. This would preclude many investors from participating in the EB-5 program if they have a willing donor who is not an approved donor.
- Possible retroactivity of certain proposed changes.
It still remains to be seen what will happen on December 9th. For investors whose petitions were filed based on investments in regional center projects, it is likely that USCIS will hold these cases that it receives before December 9th and not adjudicate them until the regional center program is extended. We will only know for certain how USCIS will act when they formally announce their plan of action at that time.
Jackson & Hertogs will continue to keep our clients apprised of future developments. Do not hesitate to contact us for a consultation.
