It has been 61 days since the EB-5 Regional Center Program has lapsed. With the end of the Government’s fiscal year and deadlines for several must-pass legislative vehicles quickly approaching, the next 30 days could be determinative as to what the EB-5 program looks like for years to come.
That said, I am not sure what would be the perfect solution to modernize the EB-5 program. The vast majority of stakeholders are in agreement that the program should also be granted visa relief and Congressional mandates to protect against unconscionable processing times. We also want permanent Regional Center reauthorization, or at least a multi-year extension. Beyond those points, the changes that need to be made are not so clear or uncontroversial amongst stakeholders. Yes, the industry needs reform. More oversight is needed against bad actors. But what exactly does that look like, and how can it be done without further bloating USCIS bureaucracy? Perhaps investment amounts should increase and TEA definitions should be narrowed. But how can that be done without Congress picking winners and losers in the Program?
All of these topics deserve sustained Congressional consideration and the opportunity for industry groups to negotiate with each other in good faith. Perhaps they need not even be decided this summer. However, there is an urgency present that should require immediate action, and should not be remotely controversial:
Existing investors should not be punished for industry and political impasse.
One such group has emerged to champion legislation that will protect existing and future investors. The American Immigrant Investor Alliance (www.goaiia.org) is a relatively new IRS 501(c)(4) organization that seeks to inform, educate, and advocate on behalf of all EB-5 investors from around the world. Founded by four EB-5 investors* in an effort to provide a voice and representation for the same, the group has worked with a former USCIS Interim Director to draft such protective legislation.
That legislation is called the Foreign Investor Fairness Protection Act, or FIFPA. Compared to most immigration legislation, it is refreshingly simple. FIFPA would amend INA 203(b)(5) and INA 216A to protect investors from any future expiration of the Regional Center program. If enacted, program lapses (like the one we are in now) would not have a material effect on existing investors as both USCIS and the Department of State would be directed to award all immigration benefits notwithstanding.
It’s really great policy and removes the metaphorical immigrant hostage-taking that has been threatened, and now occurred, due to program lapse. In our opinion, FIFPA should be enacted as quickly as possible.
Some critics have argued that this legislation, if enacted into law separately from broader legislation, might moot future opportunities for positive reform (i.e. backlog reduction and more visas). This is mistaken—existing investors should not be used as bargaining chips for greater reform, nor should they await the impasse to subside before being afforded needed relief. The entire EB-5 industry faces unprecedented challenges and no one bears more of that burden than existing investors.
While a different context, one AIIA Officer aptly stated that immigrant advocates “would support the Dream Act even if it wasn’t attached as part of comprehensive immigration reform.” Indeed, we agree that immigration reform and legislation should prioritize mitigating the harm to the immigrants themselves due to a system which has gone badly off track since its last major rewrite in the 1990s. EB-5 stakeholders should conduct themselves in accordance with this sentiment and immediately push for protective legislation.
FIFPA would go a long way to stabilizing the EB-5 program. Whether or not part of broader EB-5 reforms, let’s hope it passes as quickly as possible.
*Disclaimer: The author, Matthew Galati, has served in an advisory capacity to AIIA since shortly after its inception. Further, The Galati Law Firm has worked with AIIA on a pro bono basis on several matters. All opinions expressed above are solely those of Mr. Galati and do not constitute an official statement by any other organization. Should you wish to receive legal or advocacy advice, consult with a qualified professional.