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PROPOSED EFFECTIVE DATES IN EB-5 REFORM BILL

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PROPOSED EFFECTIVE DATES IN EB-5 REFORM BILL

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PROPOSED EFFECTIVE DATES IN EB-5 REFORM BILL

  1. 1. Page 1 of 5 PROPOSED EFFECTIVE DATES IN EB-5 REFORM BILL By Joseph P. Whalen (Saturday, December 5, 2015) After more closely studying the proposal for EB-5 reform, which is being promoted as a bipartisan, bicameral compromise bill, it is looking better and better. In general, the amendments made by this bill would take effect on a future date which is on or after date of enactment. A few specific dates are included based on the anticipated quick passage of this bill into law. And it is likely to be passed quickly. The current sunset date is December 11, 2015, less than a week as I write this article! There are, numerous exceptions within the effective date sections of this bill that protect the EB-5 investors who are already in the system. They will not have more stringent requirements thrust upon them retroactively. Some of the more complex, substantive reforms have more far reaching future effective dates such as up to two years after enactment for site visits to begin. It is likely that such visits will begin before the deadline set by Congress. I am including a few excerpts from the bill that was released as a “Discussion Draft”1 on or about November 30th (I began closely reading it on December 4, 2015). The items included herein are merely a sampling. Current EB- 5 stakeholders need not panic, this bill offers more help than harm to the honest and fair players in the EB-5 game. Those who would seek to do us harm or commit fraud are the ones that need to worry. 1 http://www.leahy.senate.gov/imo/media/doc/MDM15J00.pdf
  2. 2. Page 2 of 5 ‘‘American Job Creation and Investment Promotion Reform Act of 2015’’ SEC. 2. REAUTHORIZATION AND REFORM OF THE REGIONAL CENTER PROGRAM. (c) EFFECTIVE DATES.— (1) IN GENERAL.— Except as otherwise provided in this section, the amendments made by this section shall be effective at any time after the date of the enactment of this Act, as determined by the Secretary, and shall be effective not later than 90 days after such date of enactment. (2) EXCEPTIONS.— Clauses (iv) and (v) of subparagraph (E) and subparagraph (L) of section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)) shall not apply to a petition that— (A) was filed under such section 203(b)(5) before the date of the enactment of this Act; or (B) is filed under section 216A of such Act (8 U.S.C. 1186b) if the underlying petition filed under section 203(b)(5) of such Act was filed before the date of the enactment of this Act. SEC. 3. CONDITIONAL PERMANENT RESIDENT STATUS FOR ALIEN INVESTORS, SPOUSES, AND CHILDREN. (b) EFFECTIVE DATES.— (1) IN GENERAL.— Except as provided under paragraph (2), the amendments made by subsection (a) shall take effect on the date of the enactment of this Act. (2) EXCEPTIONS.— (A) SITE VISITS.— The amendment made by subsection (a)(5)(B)(iv) shall take effect not later than 2 years after the date of the enactment of this Act. (B) PETITION BENEFICIARIES.— The amendments made by subsection (a) shall not apply to the beneficiary of a petition that is filed under section 216A of the Immigration and Nationality Act (8 U.S.C. 1186b) if the underlying petition filed under section 203(b)(5) of such Act (8 U.S.C. 1153(b)(5)) was approved before the date of the enactment of this Act.
  3. 3. Page 3 of 5 Two of the biggest reforms involve subjects that any reasonable EB-5 stakeholder should have been expecting. Targeted employments area (TEA) rules, and the minimum invest amounts are being changed. As was anticipated, the minimum for a TEA investment will be $800,000.00 if this bill is enacted. The standard or “base” investment would remain unchanged at $1,000,000.00. This bill demands periodic adjustments to these minimums. If the Secretary does not act, then an automatic increase is prescribed every five years beginning on January 1, 2021. I also wanted to point out that the extension of the program included in this bill is four years which only authorizes it into 2019. This makes me optimistic. The bigger surprise to me are the TEA reforms. First of all, USCIS would not be bound to accept a state’s TEA designation. In my opinion, this is a good move. Rural or high unemployment will remain factors but are not the only possibilities anymore. Some TEAs would be tied to type of investment vehicle, such as manufacturing or a public works infrastructure project. Some new twists to TEAs involve what is being labelled Priority Urban Investment Areas and Special Investment Zones. A Priority Urban Investment Area will center on a census tract, or a limited grouping of contiguous tracts, which meets one of three eligibility criteria in order to be considered a “TEA”. Designation can be based on:  150% or more of the national average unemployment rate;  a poverty rate of 20% or more within the selected area for an investment; or
  4. 4. Page 4 of 5  a median family income that is 80% or less of the statewide or metropolitan statistical area (MSA) median family income. Special Investment Zones are groups of no more than 12 contiguous census tracts where tracts immediately adjacent around the tract that actually contains the “project”. The adjacent tracts that merely cover a body of water does not count unless that is the tract that actually contains the “project”. Special Investment Zones must have 150% or more of the national average unemployment rate. Military bases or installations that closed down within the previous 20 years will also be afforded TEA status. The poverty rate and median income criteria will also apply outside of MSAs. Other than the military bases, TEA designation is good for two years and can be renewed for another two years if it still meets a criterion. I am including more excerpts below that I thought my regular readers might find of interest. Again, this article is by no means all-inclusive, there is much more. The pdf of this bill is 100 pages long, please read it. SEC. 4. EB–5 VISA REFORMS. (i) EFFECTIVE DATES.— (1) IN GENERAL.— Except as provided under paragraph (2), the amendments made by this section shall be effective upon the date of the enactment of this Act. (2) EXCEPTIONS.— The amendments made by subsections (b)(1) and (c)(1) shall not apply to a beneficiary of a petition that—
  5. 5. Page 5 of 5 (A) was filed under section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)) before the date of the enactment of this Act; or (B) is filed under section 216A of such Act (8 U.S.C. 1186b), if the underlying petition filed under section 203(b)(5) of such Act was filed before the date of the enactment of this Act. Another thing I like about this bill is that it includes numerous important definitions. Some are radically different from what we knew. Some of them settle certain arguments by removing doubts and staving off future debates. Still others are rather familiar because they track definitions already found in EB-5 regulations. Additional goodies in this bill include:  age-out protection if a subsequent petition is timely filed;  concurrent filing of I-526s and I-485s;  duration of investment is 24 months instead of “being sustained” until conditions are lifted via I-829 filing or approval;  I-829 filing and approval in advance of entering the U.S. when there are long delays due to oversubscription for visas, (they would skip “conditional” status altogether); and  numerous hyper-technical enhancements aimed at avoiding inappropriate communication or preferential treatment. Please study the bill for everything I missed, there is more to it!

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