25 Nov Capitol Hill Update: Progress of Renewal of the EB-5 Regional Center Program
November 25, 2015
There has been a flurry of activity on Capitol Hill in the last two weeks that show promising signs for the renewal and extension of the EB-5 Regional Center Program for 1 to 5 years after the deadline of December 11, 2015.
In the last two weeks, the leadership offices of the Judiciary Committee of the U.S. House of Representatives – led by Chairman Goodlatte –and the U.S. Senate – led by Chairman Grassley, together quietly circulated a revised draft of Bill S.1501. The revised draft of Bill S.1501 continued to propose to renew the EB-5 Regional Center Program but in exchange for significant modifications of the EB-5
Regional Center Program’s rules. At the same time, the revised draft of Bill S.1501 took important steps to improve on some of most controversial proposals found in the original draft of Bill S.1501 from June 2015.
Among the positive changes included in the revised draft of Bill S.1501 revised draft included a 5 year extension of the EB-5 program, as well as the introduction of fast processing of EB-5 petitions and pre-approval of EB-5 investment projects. Important rules were also included to add better management practices to persons operating EB-5 Regional Centers, with the goal of improving investor protections.
The more controversial elements of the revised draft of Bill S.1501 were proposals to introduce key program changes retroactively to June 1, 2015, and to require immediately upon enactment that I-526 visa petitions could only filed if the project had been pre-approved by the USCIS. Another controversial proposal were new rules to re-draw targeted employment areas to include 1 high unemployment census tract plus 1 more contiguous census tract.
These proposals were recognized as an improvement over the original set of ideas set out in the June 2015 draft of Bill S.1501, which included a set of new rules prohibiting job creations strategies that would have made projects in urban areas nearly impossible to accomplish.
The revised draft of Bill S.1501 was uniformly met with serious reservations and deep concern for the practical workability of the proposals. The idea of retroactively changing rules for investors who have filed visa petitions for EB-5 Regional Center Projects during the summer of 2015 was met with loud voices of concern and rejection.
At the same time, observers and industry representatives recognized that the content of S.1501 could become workable if legislators ensured that new rules would not be applied with retroactive effect, and the new rules were implemented progressively after a reasonable transition period for existing projects to finish finding EB-5 investors. With little time left before the expiry of the EB-5 Regional Center Program, most observers are hopeful that a workable solution will be achieved to renew the EB-5 Regional Center Program for at least 1 year and up to 5 years after December 11, 2015. There is broad recognition on Capitol Hill that the program has helped create tens of thousands of new jobs in the U.S.I.A. Donoso & Associates LLC will continue to provide updates on the progress of renewal of the EB-5 Regional Center Program.
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