This is the second article discussing the DHS/USCIS’s new proposed rule called the “EB-5 Immigrant Investor Program Modernization” that was published last week on January 13, 2017.
A major new rule proposed last week relates to allowing EB-5 investors to retain their old Priority Dates. The summary of the rule reads:
DHS proposes to authorize certain EB-5 petitioners to retain the priority date of an approved EB-5 immigrant petition for use in connection with any subsequent EB-5 immigrant petition. Petitioners with approved immigrant petitions might need to file new petitions due to circumstances beyond their control (for instance, DHS might have terminated a regional center associated with the original petition), or might choose to do so for other reasons (for instance, a petitioner may seek to materially change aspects of his or her qualifying investment). DHS is proposing to generally allow EB-5 petitioners to retain the priority dates of previously approved petitions so as to avoid further delays on immigrant visa processing associated with the loss of priority dates. DHS believes that priority date retention may become increasingly important due to the strong possibility that the EB-5 visa category will remain oversubscribed for the foreseeable future.
The Priority Date is the date an investor’s I-526 is filed received by the USCIS. This date is very important in the context of visa backlogs (aka retrogression) for investors born in mainland China. (For those of you who are not familiar with the visa number backlog and its implications, in particular for dependent children, please take a moment to read my previous articles on the topic in the links above.)
Currently, if something goes wrong with the I-526 petition or conditional greencard, and an investor decides to start over with a new EB-5 project (in other words, reinvest and refile), they will lose their place in line because the investor needs to get a brand new Priority Date.
The proposed new rules are saying:
1. If your I-526 is approved,
2. But you have not received your conditional greencard yet,
3. And you decide to invest in a new EB-5 project by filing a new I-526,
4. Then you will be able to take advantage of your old Priority Date and not have to go to the end of the visa line by being assigned a new number.
This could save an investor born in mainland China 5+ years in getting a new greencard.
However, an investor cannot take advantage of the earlier Priority Date if:
1. After the I-526 was approved, the USCIS revoked the original approval because of fraud, a willful misrepresentation of a material fact, or material DHS error or,
2. The investor has already received a conditional greencard.
In other words,
1. If an investor goes all the way through the conditional residency period and files the I-829, and then the I-829 is denied so the investor decides to file a new I-526 petition under a new project, this investor would not qualify for the priority date retention under the current proposal.
As mentioned in my previous post, the comment period for these proposed rules end on April 11, 2017 so I would hope that DHS would take into consideration the following when preparing final rules:
1. Considering that the USCIS will generally only revoke I-526 approvals if there is fraud or a willful misrepresentation of a material fact, to say investors whose I-526 is revoked for those reasons cannot take advantage of priority date retention seems harsh. A better rule would allow investors whose I-526 was revoked due to issues related to the project but not the investor personally to be able to take advantage of priority date retention.
2. The DHS should seriously consider allowing people who already have a conditional green card to take advantage of the new Priority Date retention rule. Let me explain why:
I think the application of a priority date retention on the part of DHS/USCIS is quite brilliant and really reflects the thought they are giving to the investors who are now caught up a very lengthy process due to the visa backlog. So I think the basic idea of this rule is to help investors who have to start over with a new EB-5 project not lose the time they had already spent waiting.
The idea of Priority Date retention is not new to immigration. As the rule proposal explains, EB-1, EB-2 and EB-3 already have a similar provision where the petitioner who has an approved I-140 (which is the EB-1, 2, 3 category’s equivalent of the I-526) can retain her original Priority Date. For example, if you have an approved I-140 from employer A and while you are waiting for your visa number to open up, you get an offer from employer B, your new employer can file a new I-140 for you without you losing your place in the visa line.
So DHS is basically layering the existing rules for other visa categories onto EB-5. However, unlike EB-1/2/3 categories EB-5 has a conditional residency period and a requirement for a second filing (i.e. I-829) to remove conditions. So to overlay the existing rules onto EB-5 results in a short blanket and the sleeping person’s feet getting cold!
While I don’t think the government keeps any data on this point, anecdotally from the many investors and clients I have personally dealt with, at least currently, the number of people who start over with a new EB-5 project because their I-829 petitions are denied or are at a risk of being denied is higher than that of people who start over due to project failure during the waiting period between I-526 approval and consular processing.
I suppose the theory is that because of the lengthy delays caused by the Chinese visa backlog is relatively new, going forward, more deals will fall apart during this wait period.
While this may be true going forward, by allowing people who already have conditional greencards but failed projects at the I-829 stage to take advantage of priority date retention would help the many investors who are currently caught up with problem investments such as the Vermont or SFRC deals.