USCIS has released Operational Guidance dated May 8, 2012 relating to the application of its deference policy in EB-5 adjudications involving “the tenant occupancy methodology.” EB-5 practitioners are still puzzling over the agency’s policy change regarding whether an EB-5 project may be credited with job creation by tenant businesses occupying commercial space developed with EB-5 funds, and this new guidance offers nothing new on the substantive issues. Instead, it is framed as clarification of the agency’s “deference policy,” but raises many more questions than it answers.
The agency offers two examples of when deference would be provided to a previous determination that an economic methodology or a business plan was reasonable. The first example is so narrowly drawn that it appears no deference will be offered unless the Regional Center approval included authorization for a specific, shovel-ready, actual project. (And then, only with respect to that project, but not with structurally identical subsequent projects in different locations.) The second example involves a standalone, “direct” EB-5 enterprise where there is no regional center and thus no economic methodology involved. (How does this illustrate the application of the deference policy in the tenant occupancy methodology context?)
In sum, this new guidance offers little in the way of comfort to developers caught off guard by changing USCIS policies, and it makes clear that optimism in the wake of the Director’s recent assurances about the agency’s deference policy may have been misplaced.
USCIS has published a notice in the Federal Register requesting public comment on Form I-924, the EB-5 Regional Center application, in connection with its evaluation of whether and how to revise the form. Comments will be accepted for 60 days until July 9, 2012. Written comments and suggestions should be directed to the DHS, USCIS, Chief, Regulatory Coordination Division, Office of Policy and Strategy, 20 Massachusetts Avenue NW., Washington, DC 20529-2020. Comments may also be submitted to DHS via facsimile to 202-272-8518 or via email at USCISFRComment@dhs.gov. When submitting comments by email, the OMB Control Number 1615-0061 should be referenced in the subject line.
During this afternoon’s much-anticipated Quarterly Stakeholder Engagement, held at the California Service Center, the agency offered few (if any) insights into its views on issues of pressing concern to the EB-5 community, such as tenant occupancy-based job creation methodologies, parameters on the use of bridge financing, and indirect construction jobs. USCIS declined to address questions relating to the tenant occupancy issue, and they somewhat startlingly further indicated that Stakeholder Engagements were in general an “inappropriate forum” in which to request guidance on matters of agency policy.
While we could comment at length about what the agency did not say, it may be more constructive to offer the few tidbits of trivia that can help to round out our understanding of the current state of the program. For example:
* 2600 EB-5 visa numbers had been used as of the end of March 2012, and usage continues to increase exponentially. 800 EB-5 visa numbers have just been allocated for the month of June in Guangzhou (China) alone. China, South Korea, Taiwan, Iran and Venezuela are the highest users of the EB-5 program at this time.
* USCIS believes the case-specific email “mailboxes” that are made available to I-924 applicants are underutilized.
* A new “iteration” of the agency’s Draft Policy Memo is expected to be posted for public comment within the “next couple of weeks.” The policy memo is still considered a discussion draft and is not being followed by the agency.
* There will be individual communications forthcoming regarding extensions for responding to tenant occupancy-related RFE’s.
* There are separate case processing queues for initial Regional Center designations and Regional Center amendments (but neither case type has priority over the other).
We will be looking forward to a more substantive engagement with the USCIS economists, per the Director’s April 27th comments, and hope to have news of that event soon.