Yesterday, Senator Leahy’s Amendment 2 to S. 744, the comprehensive immigration reform bill, passed in the Senate. Senator Leahy’s Amendment 2 provides many enhancements to the EB-5 program. We previously blogged about the presumption contained in the Amendment that deems 10 indirect jobs created per investor if the I-829 petition evidence demonstrates that the investor’s money has been spent in the regional center’s project. This changes the current rule that requires the investor to demonstrate through documentary evidence that the underlying facts and milestones in the economic report have been met. Senator Grassley had introduced an Amendment to Senator Leahy’s Amendment 2 to strike the special rule, but the Grassley Amendment was not passed yesterday in the Senate, leaving the Leahy Amendment 2 intact.
Here are some of the highlights for the Leahy Amendment 2 to S. 744:
- The Leahy Amendment 2 permanently authorizes the EB-5 program, which is currently set to sunset in September 2015.
- It exempts the spouses and children of investors from the 10,000 visa numerical limitation, freeing up more visas for investors each year.
- The Amendment also carves out at least 5,000 EB-5 visas a year for investments into targeted employment areas (TEA) and extends the duration of a TEA designation for 5 years, after such time it can be renewed for another 5 years.
- The Amendment authorizes the preapproval of business plans for regional center investments, which would codify the current practice of “exemplar” I-526 petition approval. The effect of the pre-approval would be binding for purposes of the adjudication of subsequently filed I-526 petitions and it gives the Department of Homeland Security the authority to establish premium processing for I-526 petitions where the regional center project has been preapproved.
- The Amendment also calls for an adjustment of the minimum EB-5 investment amount. The minimum investment amount for EB-5 ($1,000,000 or $500,000 in a TEA) will automatically adjust on January 1, 2016 by the percentage change in the consumer price index (CPI) during the fiscal year 2015 and on every fifth subsequent January 1 by the cumulative percentage change in the CPI during the previous five fiscal years.
- Additionally, the Leahy Amendment 2 will require regional centers to submit annual reports to USCIS outlining: (1) an accounting of all foreign investor money invested through the regional center; (2) an accounting of the aggregate capital in each project; (3) a description of how funds are being used for each project; (4) evidence that 100% of the investor funds have been dedicated to the project; (5) detailed evidence of the progress made toward the completion of the project; (5) an accounting of the jobs created; and (6) a certification by the regional center that the information is accurate. This reporting process is much more detailed than the current process for regional centers to file Form I-924A each fiscal year. In effect, the regional center would be filing documentation traditionally submitted with investor I-829 petitions. It apparently gives USCIS an opportunity to track the progress of projects in between I-526 petition approvals for investors and I-829 petition submission.
- Additionally, the Leahy Amendment 2 provides that if the regional center has violated any requirements or is conducting itself in a manner inconsistent with designation, USCIS may sanction the regional center with fines equal to not more than 5% of capital in the project; temporary suspend from participation in the regional center program or permanently bar from the regional center program 1 or more individuals associated with the regional center; and/or terminate the regional center’s designation. The current law provides for termination of a regional center, but fining a regional center is a completely new concept. The Leahy Amendment 2 also provides for background checks on regional center principals and owners.
- Finally, the Leahy Amendment 2 requires regional centers to certify compliance with the U.S. securities laws in initial designation applications, as well as regional center amendment applications. USCIS is authorized to terminate any regional center that does not provide that certification on an annual basis to USCIS. Termination by USCIS for a violation of securities laws is at the unreviewable discretion of USCIS.