This is the fifth post in a series that discusses how EB-5 investors and their dependents can maintain eligibility for permanent residence and I-829 Petition approval. This blog focuses on accepting certain public benefits that may make an investor and/or his or her dependents a “public charge.”

The Trump Administration has stated that USCIS will start deportation proceedings for any conditional permanent resident or lawful permanent resident who has abused any program related to receipt of public benefits. Additionally, conditional permanent residents and lawful permanent residents alike cannot be a “public charge.” This means an individual who is likely to become primarily dependent on the government for subsistence, as demonstrated by either the receipt of public cash assistance for income maintenance or institutionalization for long-term care at the government’s expense.

USCIS can make a “public charge” finding at the time of the immigrant visa interview for the conditional green card and at the I-829 Petition interview. A finding that the investor or a family member is a “public charge” can lead to denial of the immigrant visa or the I-829 Petition, and commencement of deportation proceedings following the I-829 Petition denial.

Acceptance of the following types of assistance may lead to the determination that the individual is likely to become a public charge:

  • Supplemental Security Income (SSI) under Title XVI of Social Security Act;
  • Temporary Assistance for Needy Families (TANF) cash assistance (part A of Title IV of the Social Security Act–the successor to the AFDC program);
  • State and local cash assistance programs that provide benefits for income maintenance (often called “General Assistance” programs); and
  • Programs (including Medicaid) supporting individuals who are institutionalized for long-term care (e.g., in a nursing home or mental health institution).

Under current USCIS guidance, non-cash benefits (other than institutionalization for long-term care) are generally not taken into account for purposes of a public charge determination. Non-cash or special-purpose cash benefits are generally supplemental in nature and do not make a person primarily dependent on the government for subsistence. Therefore, past, current, or future receipt of these benefits do not impact a public charge determination at present. Non-cash or special purpose cash benefits that are not considered for public charge purposes include:

  • Medicaid and other health insurance and health services (including public assistance for immunizations and for testing and treatment of symptoms of communicable diseases; use of health clinics, short-term rehabilitation services, and emergency medical services) other than support for long-term institutional care;
  • Children’s Health Insurance Program (CHIP);
  • Nutrition programs, including Food Stamps, the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), the National School Lunch and School Breakfast Program, and other supplementary and emergency food assistance programs;
  • Housing benefits;
  • Child care services;
  • Energy assistance, such as the Low Income Home Energy Assistance Program (LIHEAP);
  • Emergency disaster relief;
  • Foster care and adoption assistance;
  • Educational assistance (such as attending public school), including benefits under the Head Start Act and aid for elementary, secondary, or higher education;
  • Job training programs; and
  • In-kind, community-based programs, services, or assistance (such as soup kitchens, crisis counseling and intervention, and short-term shelter).

The Trump Administration is attempting to expand the list of government benefits that could lead to a public charge finding. Specifically, the administration may expand list of “public charge” benefits to include Medicaid, subsidized Obamacare, food stamps, tax credits, or other non-cash government benefits. If an EB-5 investor and/or his or her dependents receive any of these benefits, and then the administration adds those benefits to the list of “public charge” benefits, USCIS may seek to deny the I-829 Petition. As such, EB-5 investors and their family members should try to avoid receiving these benefits following the grant of CPR status. Insurance paid for in the marketplace under the Affordable Healthcare Act should not result in a public charge finding.

The National Association of Counties (NACo) hosted its 80th Annual Meeting where it discussed various proposed policy resolutions and platform changes. One such resolution was one supporting the EB-5 resolution to make the EB-5 program permanent. The steering committee unanimously voted in support of the EB-5 resolution, and the Board of Directors formally adopted the resolution at their meeting July 13, 2015.

The EB-5 policy resolution supports federal legislation to permanently authorize the EB-5 Regional Center Program. It specifically states that NACo “promotes EB-5 as an important tool for economic development, public private partnerships, job creation and infrastructure development.” The EB-5 policy resolution also supports EB-5 education at NACo events to educate counties on how they can utilize the EB-5 program for its benefits.

The EB-5 policy resolution also confirms the positive fiscal, urban, and rural impact of the EB-5 program, citing from a 2013 peer-review study that the EB-5 program showed a “$2.58 billion contribution to GDP, supported over 30,000 American jobs, and generated $381 million in federal and $200 million in state/local tax revenue.” The study also found that the industries benefitting most from the EB-5 program are diverse in nature, including construction, food service, wholesale trade, real estate, financial services, legal services, architecture/engineering, and healthcare.

As we begin the second half of the 113th Congress, the question of whether immigration reform is possible is in the forefront of the Obama Administration and federal legislators’ minds. The political environment is tense. The Republican-controlled House of Representatives is distrustful of the White House and its agencies. The issues surrounding healthcare reform, the government shutdown, and the new voting procedures applied to Administration appointees in the Senate has undercut bi-partisan efforts and momentum.

Many believe that efforts in 2014 to pass immigration reform are dead and can’t be resurrected until after the mid-term elections or even after the next Presidential election in 2016.

However, let’s look at what has been accomplished so far in the 113th Congress. On June 27, 2013, the U.S. Senate approved S.744, The Border Security, Economic Opportunity, and Modernization Act. The legislation includes a path to citizenship for 11 million undocumented immigrants, a new temporary worker program, increased visa numbers for skilled foreign workers, and a nationwide employment eligibility verification system. In the House, to date, there have been five immigration bills reported out of either the Judiciary or Homeland Security Committee. These include:

  1. The Border Security Results Act (H.R. 1417) was introduced on April 9, 2013 by House Homeland Security Chairman Michael McCaul and approved by the House Homeland Security Committee on May 20, 2013 by voice vote. H.R. 1417 requires results verified by metrics to end the Department of Homeland Security’s ad hoc border approach and to help secure our nation’s porous borders.
  2. The Strengthen and Fortify Enforcement Act (H.R. 2278), also known as The SAFE Act, was approved by the House Judiciary Committee on June 18, 2013. The SAFE Act seeks to improve the interior enforcement of our immigration laws by preventing the Executive Branch from unilaterally halting federal enforcement efforts. To this end, the bill grants states and localities the authority to enforce federal immigration laws.
  3. The Legal Workforce Act (H.R. 1772) was introduced on April 26, 2013 by Rep. Lamar Smith and approved by the House Judiciary Committee on June 26, 2013. This bill discourages illegal immigration by ensuring that jobs are made available only to those who are authorized to work in the U.S. Specifically, the bill requires employers to check the work eligibility of all future hires though the E-verify system.
  4. The Supplying Knowledge Based Immigrants and Lifting Levels or STEM Visas Act (H.R. 2131), also known as The SKILLS Visa Act, was introduced by Rep. Darrell Issa on May 23, 2013. The SKILLS Visa Act changes the legal immigration system for higher-skilled immigration and improves programs that make the U.S. economy more competitive. The SKILLS Visa Act was approved by the House Judiciary Committee on June 27, 2013.
  5. On April 26, 2013, House Judiciary Committee Chairman Bob Goodlatte introduced the Agricultural Guest worker Act (H.R. 1773), also known as The AG Act. The Committee approved this bill on June 19, 2013 in a voice vote (20-16). This bill attempts to provide farmers with a new guest worker program to ease access to a lawful, agricultural workforce that employers may call upon when sufficient American labor cannot be found.

The House Democrats even introduced a bill similar to the Senate Comprehensive bill in the form of H.R. 15, The Border Security, Economic Opportunity, and Immigration Modernization Act, with some bi-partisan support. This demonstrates that there is still a will to pass immigration reform.

After meeting with more than five dozen Republican offices over the past two months, it is very clear that there is a belief that the immigration policy in this country is broken and something needs to be done. How to thread the needle and get something passed by both the House and Senate that can ultimately be conferenced and signed by the President is the puzzle. Key Republican Representatives, including Speaker John Boehner, House Majority Leader Eric Cantor, Rep. Paul Ryan, Rep. Raul Labrador, Rep. Ted Poe, Judiciary Committee Chairman Bob Goodlatte and Rep. Darrell Issa, will be the folks to watch as the debate unfolds. Mr. Boehner will try to get key components of immigration reform passed and then sent to the Senate. The Senate will in turn need to pass individual pieces of legislation and hopefully come to an agreeable compromise. Some of the components in play include:

  • Border security
  • Kids brought to the U.S. illegally through no fault of their own
  • H-1B Reform
  • EB-5 Reform
  • New temporary work program
  • Mandatory E-verify
  • A program to deal with the undocumented immigrants currently living and working in the U.S.
  • Agricultural reform

We might settle for a smaller piecemeal reform in the 113th Congress with an eye toward greater reform in the 114th and 115th Congresses. There is still time to get this done!

Often in my practice, I am approached by clients who have misunderstandings about the EB-5 securities offering process. This article is meant to debunk a few of the common EB-5 myths related to the nature and scope of private placement memoranda (PPM) and related due diligence.

MYTH # 1: In EB-5 securities offerings, it is not necessary to undertake meaningful due diligence regarding the proposed project or the issuer of securities. Attorneys simply can rely on (and take at face value) the business plan and economic study prepared by third parties, including the economist, without reviewing any contracts or other readily available documentation to confirm that the information to be included in the PPM is accurate or complete.

Continue Reading EB-5 Program Securities Offerings: Preparing Appropriate Disclosure Documents