Despite widespread reports in early December that the U.S. Congress had reached an agreement on EB-5 Visa Program reform, attempts at compromise apparently failed at the last minute as big-city lobbyists thwarted efforts to change the rules for the EB-5 Visa program. The reform bill that came very close to being adopted would have raised the minimum investment amount for a targeted employment area (TEA) to $800,000, with the non-TEA investment threshold rising to $1,200,000. A second major reform would have moved the responsibility for deciding what is a TEA and what is not away from state officials who had stretched the definition greatly so as to attract as much investment capital to their state as possible. Many big-city projects in New York, Los Angeles and Miami, for example, would no longer have qualified as TEA under the reform scheme, and thus investments in such projects would require a $1,200,000 investment. There were also provisions to ensure that actual jobs were being created by every project. In addition, there were numerous “integrity” provisions in the reform bill designed to prevent fraud and misrepresentation in the EB-5 Visa program.
But the reform efforts failed and the EB-5 Visa Program was extended until September 30, 2016 without any other changes. BUT, one of the principal sponsors of the reform effort, Senator Charles Grassley of Iowa, was livid at the failure of the reform effort, and in a statement issued after the reform effort failed, threatened to terminate the EB-5 Visa Program if reform cannot be implemented in upcoming months (see http://www.grassley.senate.gov/news/news-releases/grassley-vows-continued-push-reform-eb-5-after-fixes-ignored-omnibus-spending). So, EB-5 investors should not procrastinate, thinking that they have until September 30 to file their petitions, but should take their initial steps at selecting a strong EB-5 project while watching Senator Grassley’s reform efforts closely.