Someone once said, “Laws are like sausages – it is better not to see them being made.”

As the December 11^th deadline for the expiration of the current EB-5 Regional Center program approaches, the final provisions of the EB-5 extension bill are still unknown. Congress is working on the bill and many are lobbying for and against various provisions. This week I took a Regional Center owner and EB-5 developer to see the staff of our Congresswoman urging changes to the latest draft that was made public last week. I followed up with a memo.

Here is what I think is probably agreed upon:

• Investments will go from $500,000 to $800,000 in a TEA and $1M to $1.2M in other areas upon enactment.
• TEA rules will change. How much is not yet decided.
• Regional Centers will become more regulated and will be required to provide more information with their annual reports to USCIS.
• Regional Centers will be required to disclose to investors more about their fees and changes, maybe including fees paid to agents overseas.
• Methods for calculating jobs will be altered somewhat. There may be some good provisions that help prove construction jobs. Jobs created by hotels will probably be sufficient.
• There may be some rules that are more favorable for projects in rural areas, and the definition of a rural area may be expanded.
• There may be some limits on who can gift funds to an investor.

What is still not known:

• The effective date of the bill’s various provisions;
• Whether exemplars will be required before a new project goes to market for investors;
• Whether any “direct” jobs will be needed (projects with no or few direct jobs, e.g. housing, may have a problem satisfying the job creation rules);
• The extent of securities rules changes (I am not a securities attorney and will let them comment on these matters).

Senator Schumer’s (D-NY) staff told one Regional Center owner that he will protect the program. There are many small, midsize, and large EB-5 projects in his state.

In a few weeks, we will see what Congress decides.

Have a good weekend.