The Future of the EB-5 Program
Despite some challenges, Congress has once again extended the
EB-5 program until Sept. 30 as part of the Omnibus funding bill.
Will a new bill reform the legislation before it is up for renewal?
By Laura Foote Reiff
F
or more than two years, the EB-5 program has not
been reauthorized for the typical 3-year period as
it had been every three years since 1992 when the
program was created. Instead, the EB-5 program has
been extended along with Continuing Appropriations and
Omnibus funding bills, thereby
having a new expiration date
along with the federal budget
at each turn. Since the 114th
Congress, and now into the 115th
Congress, there have been ten bills
introduced in both the House of
Representatives and the Senate,
all focusing exclusively on the
EB-5 program.
The EB-5 program has been
extended until Sept. 30, 2017
as part of the Omnibus funding
bill passed on May 4, 2017 and
signed by the president the day
after. The provision included in
the Omnibus bill extends the EB-5 program as is, with
no changes to the program. While this is generally good
news, changes to the program may occur prior to Sept.
30, which will reform the program.
is part of the Office of Management and Budget (OMB)
for final review and approval.
If approved, the regulations will be published as final in
the Federal Register, and an effective date will be noted.
OIRA/OMB also has the option
of not approving the regulations
and/or returning the rule to the
agency for further amendment or
comment. The EB-5 industry has
roundly not been receptive to the
regulations, as the reforms would
be harsh to the program. A few
changes that would occur if the
regulations were to be published
as written, include: Minimum
investment amount would
be $1.35 million for Targeted
Employment Areas (TEAs) and
$1.8 million for High Employment
Areas.
"...EB-5 program
has been extended
to Sept. 30, 2017,
regulations or
legislation may
reform the program
as we know it before
then."
EB-5 REGULATIONS
The Department of Homeland Security (DHS), published
in the Federal Register, proposed regulations to reform
the EB-5 program for the general public to provide
comments and feedback. The comment period was
closed on April 11, 2017, and is now under review by
DHS. After the review, the regulations will be sent to the
Office of Information and Regulatory Affairs (OIRA), which
91
EB5 INVESTORS M AGAZINE
The TEA designation: Will not be designated by states;
Defines a TEA as a census tract, or contiguous census
tracts, where the New Commercial Enterprise (NCE) is
located. Must meet the high unemployment rate of 150
percent. The census tracts may be spooled; Allows any
city or town with an unemployment rate of 150 percent
and a population of more than 20,000 to count as a TEA.
Priority Date: May be retained if the I-526 petition is
denied through no fault of the investor.
LEGISLATION
While there have been 10 bills introduced in the last two
years, there have been additional drafts of bills circulated
amongst members of Congress, staff and major EB-5