The EB-5 program is set to expire on June 30.
In December, Congress extended the program but detached it from the continuing resolution process. Now, without Congressional agreement, the program could end after 30 years.
The EB-5 program was created by the Immigration Act of 1990 as a method for providing qualified immigrant investors the opportunity to obtain a permanent green card.
Senators Chuck Grassley and Patrick Leahy proposed a bill to save EB-5, but it favors rural over urban EB-5 developments, according to Ronald Fieldstone, who leads Saul Ewing Arnstein & Lehr’s EB-5 Law Group. He says this bill won’t pass by the June 30 deadline because it doesn’t have bipartisan support.
Fieldstone thinks The Grassley Bill is mainly about the integrity of the program. “Everybody in the industry is in favor of more integrity and more regulations to prevent fraud and abuse,” Fieldstone says. “Everybody wants to improve the program. The Grassley bill has expensive fees and things about it that may be controversial.”
Right now, Fieldstone says the real estate industry is waiting for Congress to extend the program. Fortunately, EB-5 does have bipartisan support.
“We understand that Senator Schumer and Senator McConnell are in favor of the program and we believe they will take appropriate measures to have it renewed,” Fieldstone says.
If the program is not renewed, investors that file a petition before the deadline could be grandfathered in, according to Fieldstone.
A similar situation happened during a shutdown in the Obama administration, according to Fieldstone. “They couldn’t get something renewed and that took an extra week, but it wasn’t a big deal,” Fieldstone says. “And the program got reinstated.”
However, Fieldstone says that this time someone would have to introduce a new bill to get the program restarted.
“We believe that there’s too much support in Congress for the program because it’s a very viable program,” Fieldstone says. “So we believe that it will get extended and they’ll eventually negotiate new legislation.”
In a prepared statement after his company prevail in a suit to vacate the EB-5 Modernization Rule implemented by the Department of Homeland Security (DHS) in 2019, Colin Behring, CEO of Behring Co., said that Congress should address holistic reform of EB-5 “through legislation and then finalizing regulations.”
“Although imperfect, the EB-5 program has been one of the most successful and efficient job creation programs the federal government has ever enacted,” Behring said in the statement. “Our hope is that lawmakers will see how severe our situation is and provide a solution that results in the passing of a new bill that achieves positive long-term reform.”
Behring’s vision includes “creating a clear operating environment with transparent and workable regulations, strong integrity measures, and marketable investment requirements. Reviving the EB-5 program, and the economic powerhouse that it is, could not come at a better time as the nation is reeling from the economic impact of the pandemic.”