USCIS Stakeholder Conference Call 06/22/12:
The Behar Law Group is pleased to send you further updates on the numerous changes in EB-5 laws. Our prediction of almost four years ago that traditional banking sources would not return to full scale commercial lending has been confirmed. As a result, the popularity of the Eb5 program has increased significantly and its notoriety nationally and internationally is also cresting.
Further, both the Canadian and Quebec investor programs have been suspended by their respective governments due to over demand. This bodes well for Eb5 which has had a slow start in structure and popularity. Statistics of the rise of the EB-5 program will be emailed to you under separate cover.
The news for the reauthorization of the program from Washington,DC seems to be improving. We have now upgraded the extension of the EB-5 program from ‘probable’ to ‘likely’. This is based on the proposed Congressional Bill S-3245 which now has bipartisan support for a five year reauthorization. Both Senators Leahy(D) and Grassley(R) now support the bill and are seeking unanimous consent. There is virtually no opposition to the bill and even USCIS admits to having invested tremendous resources to make the program work. It is continuing its path of greater scrutiny by adding more professionals to its review staff. This is a double edged sword as there will be heightened review by new employees seeking to demonstrate their skills.
It has also been made abundantly clear further in the last Stakeholder call of July 26, 2012 that only undisputed sources of reference will be deemed sufficient for business, economic and other feasibility plans. For example, sources for Targeted Employment Areas (TEA) will be derived from the Bureau of Labor Satistics, not the Bureau of Economic Analysis. References must be derived from statutes, official regulations, case law, government sources and the like instead of expert witness or market-specific observations or opinions.
Additional layers of bureaucracy are being added in the form of the EB-5 Program Office and the Review Board. High volume regional centers will be assigned a case specific officer; this can be a double edged sword again. In person or telephonic reviews will be possible if needed in the event of I-924 denials. New FAQs will be issued ‘soon’. Business plans must adhere to outline in the precedent Matter of Ho. NAICS codes should extend to four digits. The boundaries of a regional center must clearly demonstrate the promotion of economic growth within an economic zone. There needs to be a clear contribution to the supply chain and/or labor pool in the area. The EB-5 program is a job creating engine, not simply a substitute for capital attraction.
Amendments to regional centers will take longer to review due to higher review of substance, juxtapositioned to economic growth and review of economists. The deference policy to previously adjudicated regional centers will be respected unless there is a material change, fraud, or that the previously adjudicated approval was legally deficient.
In conclusion, we are entering a new age of EB-5, one which will allow the program to exist and grow due to market demand but one which will be highly regulated and subject to high scrutiny until we reach a greater degree of reliance and predictability. Keep your seatbelts on, tight.
Media Release: June 29th, 2012
Positioning for October 1st 2012
As most stakeholders of the EB-5 program know, the Immigrant Investor pilot program is scheduled to sunset September 30, 2012. While any scheduled sunset is nothing to minimize, our firm has recently started to receive some signals that the statute may receive a permanent reauthorization before its deadline.
First and most important is Senate Bill 3245 while has been co-sponsored by Senator Patrick Leahy of Vermont and Senator Chuck Grassley of Iowa, a Democrat and Republican respectively. With mutual concessions in play, they have arrived at a consensus to present to Congress for review and ultimate vote.
As we had advised our clients back in 2008, the U.S. banking system has taken a dramatic shift to conservative lending which affected most developers across the United States. As such, particularly in the last two years, the notoriety of EB-5 in the capital stack as an alternate financing tool, as large or as small as it is structured, has presented a viable and popular tool.
In addition, CNN has recently confirmed that the United States lags significantly behind in the health of its immigration system compared to many other industrialized nations, particularly Canada and Australia whose programs have been so successful that they needed to be suspended.
Further, there appears to be little, if any opposition from the greater stakeholder community to the passage of this bill. The Administration, Congress, the Business community and even the agency in charge of the program are all committed to ensuring the continued viability of this job creating, capital attracting program, which, for the first time, has hit its quota of 10,000 in a fiscal year (which starts again October 1 every year).
You may have received a solicitation from our firm to contact your congressional connections to support this new legislation. To those who have done so, we thank you. To those who are getting ready to do so, the time is now! Do not believe that Congress closes for the summer. Representatives return to their districts and actually listen hard to their constituents when faced by them locally. Make your voice and pen heard!