New EB-5 Regulations Reach the Final Rule Stage

19 Oct New EB-5 Regulations Reach the Final Rule Stage

By Mona Shah, Esq.

The EB-5 Immigrant Investor Program Modernization (RIN1615-AC07) is in the final rule stage. On October 17, 2018, the Trump Administration released the Fall 2018 Unified Agenda of Regulatory and Deregulatory Actions (Agenda), a collection of reports from executive agencies on regulatory actions they plan to take in the near and long term.  The Agenda provides updated timetables for two EB-5 regulations currently in the rulemaking process, and notice of a third regulation to come.  Will we finally see the much anticipated EB-5 Regulations? The answer is a yes this is an eventual likelihood, but not anytime soon!

  • EB-5 Immigrant Investor Program Modernization (RIN1615-AC07)

The proposed EB-5 Immigrant Investor Program Modernization rule sought public comment on a number of proposed changes to EB-5 program regulations, including raising the minimum investment amount, allowing certain EB-5 petitioners to retain their original priority date, changing the designation process for targeted employment areas, and other miscellaneous changes to filing and interview processes.

This proposal is in the Final Rule Stage, meaning that the public comment period has closed and the Department of Homeland Security (DHS) is conducting a comment analysis.  Following this analysis, DHS will decide whether to proceed with the rulemaking process and issue a new or modified proposal.  It is widely expected that DHS will proceed with the rulemaking process to issue a final rule.  The Spring 2018 Unified Agenda of Regulatory and Deregulatory Actions predicted that the proposal would become a Final Rule in August 2018; however, the Fall 2018 Agenda now predicts that the proposal will become a Final Rule in November 2018.

If the rule becomes final, DHS will include a preamble and rule text.  The preamble will respond to the major issues raised during the public comment period and state the basis and purpose of the rule.  The final rule will be published in the Federal Register.

  • Regional Center Program Regulation (RIN 1615-AC11)

DHS is seeking public comment on several topics related to the EB-5 Immigrant Investor Regional Center Program including (1) the process for initially designating entities as regional centers, (2) a potential requirement for regional centers to utilize an exemplar filing process, (3) continued participation requirements for maintaining regional center designation, and (4) the process for terminating regional center designation.

This rule is in the Notice of Proposed Rulemaking stage, meaning that DHS has issued an Advanced Notice of Proposed Rulemaking (ANPRM), a document that an agency may choose to issue before it is ready to issue a Notice of Proposed Rulemaking (NPRM).  The ANPRM is used by an agency as a vehicle for obtaining public participation in the formulation of a proposed rule before the agency has done significant research or investigation on its own.  In some instances, an agency may issue an ANPRM to test public reaction to a proposal.

According to the Fall 2018 Agenda, DHS expects to issue a Notice of Proposed Rulemaking in March 2019.  The NPRM, which will be published in the Federal Register so that the public can consider it and submit comments, will include information such as the preamble, deadline for comments, how and where to file comments, and individuals to contact for information about the proposal.  The preamble will explain the need and authority for the proposed rule, including a discussion of any statutory constraints.  It will also explain the rule text and any issues involved.  DHS may include specific questions or requests for data from the public/existing regional centers.

Agencies generally allow 60 days for public comment after issuing a Notice of Proposed Rulemaking, however longer periods are sometimes provided.  The law permits changes to be made to the proposed rule based on the public comments received, however the courts have required that any changes made to the final rule be changes that could have been reasonably anticipated by the public – “logical outgrowths” of the proposal.  If the “logical outgrowth test” is not satisfied, DHS would be required to issue a second NPRM and entertain a second public comment period.

  • EB-5 Immigrant Investor Program Realignment

DHS plans to publish an Advanced Notice of Proposed Rulemaking to solicit public input on proposals that would increase monitoring and oversight of the EB-5 program, as well as encourage investment in rural areas.  DHS would solicit feedback on proposals associated with redefining components of the job creation requirement and defining conditions for regional center designations and operations.

This proposed regulation is in the Prerule Stage, meaning that some event or statute has prompted DHS to initiate an assessment of EB-5 oversight and means of encouraging investment in rural areas.  Given recent criticism of the EB-5 program, the proposed realignment can be viewed as an effort by DHS to pacify critics while placing the program in a better light by encouraging investment in rural areas.

According to the Fall 2018 Agenda, DHS will issue an Advanced Notice of Proposed Rulemaking by September 2019.

While the EB-5 Immigrant Investor Program Modernization (RIN1615-AC07), which is in the final rule stage, seems likely to become a final rule, the Regional Center Program Regulation and EB-5 Immigrant Investor Program Realignment have much further to go. As noted above, an Advanced Notice of Proposed Rulemaking is often issued to gauge public reaction to a proposal. The fact that an Advanced Notice of Proposed Rulemaking was issued for the Regional Center Program Regulation, while an ANPRM will be issued for the EB-5 Immigrant Investor Program Realignment, suggests that DHS is focused on stakeholder involvement and moving forward in a manner that will preserve the viability of the EB-5 program.

 

About the Author:

Mona Shah, Esq.

UK born, Mona a dual licensed attorney and former British Crown Prosecutor, has extensive knowledge of all facets of U.S. immigration law. Her expertise ranges from specialist business law to complicated, multi-issue federal deportation litigation before the US Courts of Appeal. Recognized as an industry leader in EB-5, Mona has received many accolades for her work, including voted top 25 EB-5 attorneys in the US 4 years in a row; Top Lawyer by Who’s Who International, ‘Top Attorney of North America’ amongst others.

A part-time adjunct professor at Baruch College, CUNY University, Mona is a published author, a Lexis Practice Advisor and co-editor of the Trade & Invest Magazine (BLS Media). Mona regularly speaks worldwide, interviewed by mainstream news channels, including Fox Business News, Al Jazeera and quoted in major newspapers, including the New York Times. Mona is a member of the Presidential Advisory Board of IIUSA, and hosts the first EB-5 podcast series (70+ episodes).

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