EB-5 investors have now spent months wondering when the EB-5 Regional Center Program will be reauthorized, and it appears that Congress may have an opportunity to act soon.
Every year Congress needs to pass an appropriations bill setting the budget for the federal government. As the appropriations bill is a must-pass piece of legislation, Congress uses it as a vehicle to attach other pieces of legislation they want passed. Traditionally, reauthorization of the EB-5 Regional Center Program was attached to the appropriations bill each year. However, last December it was uncoupled from the appropriations bill and only extended 6 months, leading to its authorization expiring in June. With this year’s appropriations bill’s deadline coming up, Congress may be able to act and reauthorize the EB-5 Regional Center Program through legislation attached to the appropriations bill.
The omnibus appropriations bill is due on Sep 30, 2021, however it’s unlikely that congress will make that deadline. In recent years Congress has needed to pass continuing resolutions to extend the appropriations deadline. While it would be possible to tack on the EB-5 Regional Center Program reauthorization to a continuing resolution, that outcome would be unlikely. A more realistic target would be for the EB-5 Regional Center Program reauthorization to be attached to the omnibus appropriations bill whenever it is ultimately passed.
Some EB-5 investors may be wondering why there hasn’t been a push to pass legislation dedicated to reauthorization and reform of the EB-5 Regional Center Program such as the Grassley Leahy Bill which failed in the senate earlier this year. Simply put, it’s much easier for Congress to get legislation passed by attaching it to a must-pass piece of legislation such as the appropriations bill. Attaching the EB-5 Regional Center Program reauthorization to must-pass legislation such as the appropriations bill can make opposing reauthorization much more costly for opponents of the program. Even more importantly, attaching reauthorization to the appropriations bill would allow congress to return the EB-5 Regional Center Program to its previous status quo, where it was reauthorized without controversy each year as it was attached to appropriations bills.
In order for Congress to successfully reauthorize the EB-5 Regional Center Program there would likely need to be a few concessions between EB-5 industry lobbyists and Congress members. First and foremost, any reauthorization would likely also entail passing integrity reforms to the program. Instituting integrity reforms is universally regarded as a positive for the program and adding them to reauthorization should not be an issue. Additionally, Congress members representing more rural districts will likely want measures included to ensure the EB-5 Regional Center Program benefits rural communities. Likewise, Congressional members representing more urban areas will want to ensure the program benefits urban communities. While these two sides may have their differences, not reauthorizing the EB-5 Regional Center Program benefits no one and Congress should be able to forge a compromise.
Although there is still no definitive news on when the EB-5 Regional Center Program will be reauthorized, investors should remain confident that Congress will act to reauthorize the program.