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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.
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‘‘American Job Creation and Investment Promotion
Reform Act of 2015’’
SEC. 2. REAUTHORIZATION AND REFORM OF THE REGIONAL
(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.
(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.
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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
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a median family income that is 80% or less of the statewide
or metropolitan statistical area (MSA) median family
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—
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(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
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);
numerous hyper-technical enhancements aimed at
avoiding inappropriate communication or preferential
Please study the bill for everything I missed, there is more to it!