This blog shall provide a brief summary of the status of the pending lawsuit related to the New Regulations issued by USCIS and effective November 21, 2019, as well as a status report on pending legislation.
Needless to say, the market is in a confused state given the uncertainty of what will transpire going forward. As an industry, we are now dealing with the New Regulations which in effect eliminates non-TEA projects from the marketplace since it is very doubtful that investors will invest $1,800,000 to obtain a green card, especially given all the delay and extra costs being encountered in connection therewith.
There is an active market for projects that are viable and are otherwise classified as a TEA either because they are in a single census tract TEA designations or a census tract that has an adjacent census tract that qualifies for a TEA designation. Rural properties are automatically TEA designated and are therefore eligible for the $900,000 investment amount as well.
It is noteworthy that with a revised $900,000 investment, the same amount of money can be raised with almost half the number of investors required. Furthermore, there is much less stress on job creation given the fact that the same 10 jobs are required per applicant (the 900,000 new amount).
A temporary restraining order was filed with respect to the New Regulations in late November 2019. There are various hearings and briefs filed and on January 16, 2020 the U.S. District Court Judge for the District of Colombia, Judge Richard J. Leon, indicated that he would rule in the “not-so-distant future.” It is hard to determine what that means but a ruling anticipated that would be within the next few weeks. It is difficult to predict the potential result of the TRO action. One commentator reported that he felt the government’s position was very strong although my sources indicate that the article may not have been accurate with respect to the pluses and minuses of each side’s arguments. In any event, there will be some degree of certainty as to whether the New Regulations will be enjoined.
There is pending legislation issued in the senate that is being negotiated among the powers to be. The House is also actively engaged in its own process. It is very difficult to predict when any new legislation will pass, although there is a strong movement to try to get a permanent bill passed in the next 3 to 6 months which would provide far more certainty to the marketplace and reduce the dollar requirement for a non-TEA investment.
The Wall Street Journal recently published an article last week that noted the strong EB‑5 industry support of Senator Graham, the Chairman of the Senate Judiciary Committee.
Any new legislation would in effect nullify the New Regulations.