An EB-5 regional center based in California is filing a lawsuit against U.S. Citizenship and Immigration Services (USCIS) over recent guidance it has issued, which would require previously approved regional centers to become re-authorized. According to the USCIS, previously approved regional centers became unilaterally de-authorized under the legislation passed by Congress this March, which revived the lapsed program.
The lawsuit has been filed in the U.S. District Court for the Northern District of California. The regional center’s complaint claims that the USCIS’s guidance is in violation of the Administrative Procedure Act and contradicts Congress’s intent in the EB-5 Integrity and Reform Act.
The EB-5 Integrity and Reform Act was included in the fiscal 2022 omnibus bill, which was passed in March after the program had lapsed for over eight months. The legislation included changes to the program, including raising the investment requirement to $800,000 for targeted investment areas and $1,050,000 for general investments. It also added new requirements for regional centers, including new reporting requirements. In light of this legislation, many investors had expected the program to restart next month, but new guidance from the USCIS that indicates regional centers will need to re-certify through submitting new business plans has raised concerns that this may not occur.
According to the regional center’s lawsuit, it has already forced the group to delay construction projects planned over the next two years, with an estimated value of $450,000 million. The center also claims that they have received several requests from investors to withdraw their investments due to a loss of faith in the program.
The complaint also claims that it is unlikely that any regional center will become re-authorized until the Act re-authorizing it expires in 2027 due to the wait times, which it states vary between five to nine years. The complaint also alleges that in addition to discouraging new investment, the immigrant investors who have already contributed to the program and have waited years may face rejection because they are no longer affiliated with an approved regional center.
The USCIS has announced that it will hold a virtual meeting on the EB-5 Reform and Integrity Act of 2022 on April 29th, 2022. This is expected to provide more information on the new filing process for entities that seek designation as a regional center. This will be followed by a listening session to receive input from stakeholders in the industry.
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