Apr 6, 2018
Lawmakers Push DHS to Finalize EB-5 Regulations; Investors Race Against the Clock
In a letter dated April 5, 2018, addressed to the Department of Homeland Security, Sens. Chuck Grassley (R-Iowa), Patrick Leahy (D-Vermont), and Rep. Bob Goodlatte (R-Virginia) have urged DHS Secretary Kirstjen Nielsen to finalize the sweeping EB-5 regulations that were released in draft form in January 2017. As drafted, the regulations would raise the minimum investment amount to at least USD $1.3 million, significantly curtail which locations may qualify as a targeted employment area (“TEA”), and centralize the TEA designation process, among other reforms.
As we have previously reported, we expected the EB-5 Modernization Rule to have been finalized in February. The letter notes that DHS was “encouraged by both individual Members of Congress and stakeholders to not finalize the proposed regulations, since a potential legislative solution could be imminent.” Their legislative proposals – which we believe would have crippled the program had they been enacted – failed in mid-March. As opponents of the status quo, the legislators concede that they “do not foresee a legislative solution in the near term” and accordingly urge the regulations to be implemented without delay. We firmly believe that any legislative changes to the U.S. immigration system should be enacted after significant opportunity for public engagement and Congressional Regular Order.
Opportunity for public comment to the proposed Rule closed in April 2017. Green and Spiegel submitted a comment in opposition to most of the draft regulatory terms, noting in particular how certain justifications for raising the minimum investment amount were factually inaccurate. Indeed, the vast majority of comments were in opposition to the draft rule for varying reasons. It remains to be seen what effect the public comments will have on the final regulatory text.
DHS’ sweeping regulatory reform could conceivably be published at any time and put into effect in a matter of weeks or months thereafter. Investors considering EB-5 immigration should accordingly act with urgency as regulatory actions are less subject to the political protections that have prevented ill-conceived legislative efforts to reform the program, and have bolstered American job creation stemming from immigrant investors to all-time highs. Contact us today for more information relating to EB-5 immigration.