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With last week’s announcement of the EB-5 Reform and Integrity Act of 2021 EB-5 investors, and potential EB-5 investors, may be wondering how the legislation could affect them and their applications. As one can tell from the fact sheet released last week, the bill’s focus is on “providing vital integrity and national security reforms to the program”. While there will be new oversight measures and regulations that regional centers will need to comply with, there won’t be any undue burdens placed on investors. In fact, the changes the EB-5 Reform and Integrity Act of 2021 aims to implement should make investors more confident that they can trust regional centers to properly manage their investments.
Here’s our quick overview of some of the changes that the EB-5 Reform and Integrity Act of 2021 would implement if passed.
1. REAUTHORIZE THE EB-5 PROGRAM
First and foremost, the EB-5 Reform and Integrity Act would address the looming expiration date for the EB-5 program. As it currently stands the program will expire on June 30 this year unless congress chooses to act. The EB-5 Reform and Integrity Act would immediately resolve this issue by reauthorizing the EB-5 program through 2026.
2. INCREASED ACCOUNTABILITY TO INVESTORS
Despite the benefits that come with investing through a regional center, some potential EB-5 investors may be concerned about investing in a project they don’t directly supervise. The EB-5 Reform and Integrity Act includes provisions that could help ease future investors’ worries. The bill would require regional centers to “provide annual statements to DHS [Department of Homeland Security] and to their investors accounting for investor capital and certifying compliance with program requirements”. Additionally, regional centers would be required to ”utilize a fund administrator or commission an independent annual audit to prevent the misuse of investor funds”.
3. PROTECTIONS FOR INVESTORS
While the vast majority of regional centers across the country act in good faith and have their investors’ best interest in mind, fraud is still a possibility. Although its provisions regulating regional centers should curb potential fraud, the EB-5 Reform and Integrity Act also includes provisions to preserve immigration benefits for victims. The bill “allows good-faith investors who were defrauded the ability to continue participating in the program if they were not involved with the fraud and they associate with EB-5 entities in good standing and meet all other program requirements.” Additionally, the bill would give investors and petitioners the right to request “administrative appellate review of certain DHS decisions and adjudications.”
Specifically, if an EB-5 investor is involved with a regional center that has its designation terminated, the investor can preserve their priority date, and would have 180 days to find a new regional center, and would be permitted to make an additional investment, “solely to the extent necessary to satisfy remaining job creating requirements.”
The bill also “protects against the age-out of the children of certain EB-5 investors whose petitions are terminated or whose applications to remove conditions are denied, by providing that if the immigrant investor petitions again, an unmarried son or daughter who has reached age 21 may still be considered a child of the EB-5 petitioner.”
4. TIMELY PROCESSING
Another issue that has plagued the EB-5 program, as well as US immigration as a whole, is the lengthy wait time applicants face. The EB-5 Reform and Integrity Act would also seek to address this issue. Were it passed, the bill would require the Director of USCIS to conduct a study of the fees charged in the administration of the EB-5 program, within a year. Based on the results of this study USCIS would then be required to set fees at a level to process petitions promptly and efficiently.
THE FUTURE OF EB-5
Passage of the EB-5 Reform and Integrity Act of 2021 into law would be a major victory for the EB-5 program. Merely addressing the looming June 30th reauthorization deadline would be enough for the bill to garner widespread support, but it does much more than that. The EB-5 program has been a demonstrably successful engine of economic development, bringing in billions of dollars to the US economy, the majority of which has gone through regional centers. However, that growth would be impossible without the investors who choose the EB-5 program. The EB-5 Reform and Integrity Act of 2021 ensures that investors can feel confident in the regional center of their choice, and allows the EB-5 program to continue its successful track record of providing jobs and growing America’s economy.
The full text of the EB-5 Reform and Integrity Act of 2021 can be found here.
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