In order to avert a government shutdown, U.S. President Joe Biden officially signed into law a stopgap funding measure passed by the Senate on February 18, 2022. President Biden’s actions have extended the deadline for the omnibus appropriations package to March 11.
The appropriations bill’s release had already been postponed from December 2021 to February 2022. The U.S. government has struggled to reach a bipartisan agreement on the matter of the federal budget, and these delays can only be obstructive to the well-being of the U.S. economy. With that said, members of the EB-5 investment industry are waiting to see what the omnibus spending package will entail for them.
Leaked Draft Containing EB-5 Reform
A draft of an EB-5 reform bill was leaked on February 3, 2022, provoking much speculation anddiscussion. Industry experts expect that the upcoming bill, which would feasibly introduce substantial change, will be proposed and voted on by Congress as part of the upcoming March11 omnibus spending package, a bigger legislative vehicle.
The leaked document includes many welcome revisions that would benefit the overall reputation of the EB5 investment program. Some of these revisions include the redefinition of targeted employment areas (TEAs) and the addition of other integrity measures. Amongst these revisions, arguably the most crucial one is the reauthorization of the regional center program. Chronically dependent on government reauthorization, the program has now been defunct for over eight months, which has been detrimental to investors. Foreign nationals who had previously made EB-5 investments are stuck in limbo, unable to have their I-526 petitions adjudicated by USCIS. The program’s suspension has also jeopardized roughly $15 billion worth of investment capital.
Amongst these positive revisions, a less welcome potential change includes the raising of theinvestment minimum. Currently at $500,000, if the upcoming bill is approved by the Senate, thethreshold amount for TEA ventures may increase to $700,000. Because of this, investors whoare keen to take advantage of the lower $500,000 minimum investment amount should startthe EB-5 process immediately by submitting their I-526 petitions.
Though the leaked spending bill offers hope that EB-5investmentreform will take place, muchis still unknown and elements of the draft bill are mired in uncertainty. Furthermore, even ifCongress proposes the bill, it may not pass, or it may be further postponed. Regardless of theU.S. government’s decision, the present situation calls for provisions to be made for regional center investors. Though the program itself is suspended,these investors should still beallowed to continue with the EB-5 process. A solution is for industrymembers to campaign forthe reauthorization of the regional center program and a grandfathering clause.