Latest EB-5 News
Government Fees Increasing
Months ago, the USCIS published new proposed filing fees for EB-5 cases. Last week, USCIS published notice that the new fees will be required on and after December 23, 2016. The new fees will be:
- I-526 for investor: $3,675
- I-924 for a new RC or amendment or exemplar: $17,795!
- I-924A RC annual report: $3,035
The law requires that the USCIS cannot make a profit on the fees charged for an application and that the fee may only cover the actual cost of processing the application. At a USCIS Ombudsman meeting a few years ago, two former USCIS employees suggested that the reason for the slow processing of EB-5 cases was that the fees were so high that additional time was spent by the officers to justify the fees. I am not making this up. If these comments came from others, I would not have thought them to be credible.
The high fees for an I-924 RC presumably cover the USCIS’ costs of the site visits to RCs and projects. With over 800 RCs, the pace of new RC applications has slowed considerably. With such a high fee, maybe even fewer new RCs will be created.
The U.S. Government Accountability Office, at the request of a Senator, conducted an analysis of the Targeted Employment Area (“TEA”) aspects of the EB-5 program. The report concludes that most EB-5 projects are in TEAs. The report also discussed some TEA details. 63% of projects combine 2 to 10 census tracts; 26% combine 11 to 100 tracts; and 12% combine more than 100 census tracts.
Some have been criticizing the current TEA rules, because some TEAs are odd shaped territories designed just to create a high unemployment district in which the project is located, but the project’s immediate surrounding area is low unemployment. For years, California has only allowed combining up to 12 census tracts. We will see if a new EB-5 RC extension statute or USCIS rule will change the TEA criteria.
I-526s now average 16.2 months, which is a month faster than the last report. I see most I-526s decided in about 14 months. I-829s now average 22.9 months. Some cases take longer.
The Next Surge
The RC statute expires on December 9, 2016. The surge of filings has begun as people seek to lock in their EB-5 investments at $500,000 and secure their TEA. It takes time to document source of funds and thus we encourage all to start that process as soon as possible.
We will see on November 8th whether Democrats or Republicans will control the Senate. If the Democrats win a majority of the Senate, Senator Schumer, a pro EB-5 Senator, will become the majority leader. Senator Grassley will no longer be the chair of the Senate Judiciary Committee, which has jurisdiction over immigration laws. Senator Leahy of Vermont will likely return as Judiciary Committee chair. He is quite concerned with the integrity of RCs, as the Jay Peak project in Vermont has been seized by the SEC for fraud. It will be interesting to see what influence Senator Schumer has on the EB-5 program. Possibly we will see another 1 year extension of the RC statute without congressional changes if there is a “clean” one year extension; USCIS by regulation will probably increase the investment amount.
Also, if the Democrats win the Senate, the Judiciary Committee will probably be preoccupied with the Supreme Court appointment. There is one opening now. It is anticipated Justice Ginsburg will soon retire, possibly followed by Justice Breyer. This may push EB-5 legislation down the calendar to a later date.