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Comprehensive EB-5 Modernization Legislation Introduced in the U.S. Senate
Tuesday, November 5, 2019

Senators Graham (R-SC), Rounds (R-SD), and Cornyn (R-TX) introduced the “Immigrant Investor Program Relief Act” (S. 2778, the Act) on November 5, 2019, proposing long-overdue improvements to modernize the EB-5 program in alignment with industry and market principles. The Act reflects a fair compromise between rural and urban stakeholders, providing substantial market advantages to rural and urban distressed areas while providing opportunities for “downtown” projects.

Major programmatic provisions under the Act:

Duration of Reauthorization – The program’s authorization is extended for six years through Sept. 30, 2025.

Targeted Employment Area (TEA) Definitions

Rural Area definition: The term “‘rural area” means any area that:

  • is outside the boundary of any city or town with a population of 20,000 or more people; and

  • is outside a metropolitan statistical area; or

  • is within any census tract that is greater than 100 square miles in area and has a population density of fewer than 100 people per square mile.

Urban Distressed Area Definition: TEAs are limited to a single-census tract designated by the U.S. Treasury Department as a “Qualified Opportunity Zone,” as per the Tax Cuts and Jobs Act.

Investment Amounts

  • Establishes and maintains a $100,000 differential between the two investment levels.

  • New minimum investment level for TEAs is $1,000,000.

  • New non-TEA amount is $1,100,000.

  • These levels are indexed to inflation going forward.

TEA Set-Asides

  • 15% of visas for Rural.

  • 15% of visas for Urban Distressed.

  • Unused visas roll over annually at the end of each year to general visa pool for access by all projects in the immediately following year.

  • The set-asides apply immediately to new I-526 petitions filed after enactment, but they cannot be applied retroactively towards petitions that were pending as of the date of enactment.

Transition Rules to New Program Requirements – 90 days after date of enactment the new law takes effect. Individual I-526 petitions that were pending up to the date of enactment are grandfathered and not subject to new investment amounts. Pending petitions rejected after enactment and re-filed would be subject to new investment amounts.

Backlog Relief and Suggested Additional Revenue Source – Advance Parole and work authorization.

  • All pending applicants in queue (approximately 30,000) should have the option to pay a fee to enable the individual and derivatives to travel to the U.S. and obtain work authorization if they have an approved I-526 and have been waiting for three years.

  • The revenues raised by the EB-5 program improvement fee/backlog fee should be maintained separately for use by Congress for programs deemed in the national interest.

  • All new Investor Petitions would be required to pay an additional $50,000 that would go into the new fund.

Sovereign Wealth Funds (SWF) – No bar on SWF capital in projects also funded by EB-5 capital.

Premium processing for Filed Cases 120 days – Available for both Investor and Project – $50,000.

Significant New Revenue Sources for Congress and the Agency – $50,000 program improvement fee, premium processing.

Integrity Measures to Bolster National Security and Fraud Deterrence

  • DHS provided with the authority to conduct criminal background checks and obtain biometric information from individuals involved in the regional center program.

  • Establish new authority for DHS to debar individuals, and suspend or terminate regional centers, based on program non-compliance.

  • Clarify the authority of DHS to deny or revoke immigrant investor petitions for reasons including fraud, misrepresentation, or national security concerns.

  • Establish an EB-5 Integrity Fund to provide rigorous program oversight, which would be funded by regional center program participants.

  • Create thorough annual reporting and accounting requirements for regional center operators.

  • Enforce strict new requirements for third-party promoters marketing or promoting regional center investment projects.

  • Provide DHS with improved investigative tools to ensure that an investor’s funds are derived from legitimate and lawful sources.

  • Provisions to ensure that USCIS engages in a proper and non-preferential way with any person or entity involved in the EB-5 program.

  • CFIUS Reform compliance for covered transactions as per the Foreign Investment Risk Review Modernization Act (FIRRMA).

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