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One Off Regional Centers and Why They Must Be Stopped!
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One-Off Regional Centers and Why They Must Be Stopped!
By Joseph P. Whalen (Thursday, September 29, 2016)
In this author’s opinion, One-Off Regional Centers1 (One-Offs) run afoul
of, and counter to, the Congressional Intent for the EB-5 Regional Center
Program. When Congress revised the law in an effort to increase utilization of the
employment-based, fifth-preference “employment creation” visa classification, it
created a “pilot program” and designated the “Regional Center” as a focal point
for concentrating pooled investments in defined economic zones in limited
geographic regions of the United States. Congress added this “pilot program”
through separate legislation outside of the Immigration and Nationality Act (INA)
but it is codified alongside it in the United States Code, as a note. 8 U.S.C. §1153
is the equivalent of INA § 203 Allocation of Immigrant Visas, therefore we find
the Regional Center authorization codified as 8 U.S.C. §1153 Note: Immigration
Program. §610, paragraphs (a) and (c) are crucial to understanding the program.
Pub. L. 102–395, title VI, §610, Oct. 6, 1992, 106 Stat. 1874, as amended:
(a) Of the visas otherwise available under section 203(b)(5) of the Immigration and
Nationality Act (8 U.S.C. 1153(b)(5)), the Secretary of State, together with the Secretary
of Homeland Security, shall set aside visas for a program to implement the provisions of
such section. Such program shall involve a regional center in the United States,
designated by the Secretary of Homeland Security on the basis of a general
proposal, for the promotion of economic growth, including increased export sales,
improved regional productivity, job creation, or increased domestic capital
investment. A regional center shall have jurisdiction over a limited geographic area,
which shall be described in the proposal and consistent with the purpose of
concentrating pooled investment in defined economic zones. The establishment of a
regional center may be based on general predictions, contained in the proposal,
concerning the kinds of commercial enterprises that will receive capital from aliens,
the jobs that will be created directly or indirectly as a result of such capital investments,
and the other positive economic effects such capital investments will have.
* * * * *
(c) In determining compliance with section 203(b)(5)(A)(iii)[(ii)] of the Immigration and
Nationality Act [8 U.S.C. 1153(b)(5)(A)(iii)[(ii)]], and notwithstanding the requirements of
8 CFR 204.6,2 the Secretary of Homeland Security shall permit aliens admitted under
the program described in this section to establish reasonable methodologies for
determining the number of jobs created by the program, including such jobs which
are estimated to have been created indirectly through revenues generated from
increased exports, improved regional productivity, job creation, or increased domestic
capital investment resulting from the program.
As directed, the agency promulgated regulations reshaping the EB-5
program and integrating the new component known as a Regional Center. Those
regulations were originally written by the predecessor agency to USCIS. Legacy
1 See: http://www.slideshare.net/BigJoe5/the-single-project-regional-center-is-as-bad-as-the-inept-no-deference-regional-center
2 As they existed on October 6, 1992.
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I.N.S. was primarily a law enforcement agency including an almost military
component in the Border Patrol. Adjudications were less important in the
corporate culture within Legacy I.N.S. and that attitude is still reflected in the
bulk of the implementing regulations. The EB-5 regulations have been in need
of revisions for years and the agency has stated that they are working on it. As
presently constituted, here is what they say about applying for Regional Center
designation. As is evident, the official to whom the “proposal” must be submitted
is an obsolete title and there is now an application form, something that was not
created and implemented until the program was seventeen (17) years old.
8 C.F.R. §204.6 Petitions for employment creation aliens.
* * * * *
(m) Immigrant Investor Pilot Program—
* * * * *
(3) Requirements for regional centers. Each regional center wishing to
participate in the Immigrant Investor Pilot Program shall submit a
proposal to the Assistant Commissioner for Adjudications, which:
(i) Clearly describes how the regional center focuses on a
geographical region of the United States, and how it will promote
economic growth through increased export sales, improved
regional productivity, job creation, and increased domestic capital
(ii) Provides in verifiable detail how jobs will be created indirectly
through increased exports;
(iii) Provides a detailed statement regarding the amount and source
of capital which has been committed to the regional center, as well
as a description of the promotional efforts taken and planned by
the sponsors of the regional center;
(iv) Contains a detailed prediction regarding the manner in which
the regional center will have a positive impact on the regional or
national economy in general as reflected by such factors as
increased household earnings, greater demand for business
services, utilities, maintenance and repair, and construction both
within and without the regional center; and
(v) Is supported by economically or statistically valid forecasting
tools, including, but not limited to, feasibility studies, analyses of
foreign and domestic markets for the goods or services to be
exported, and/or multiplier tables.
Congress authorized a “program” which, according to Merriam-Webster’s
2016, online dictionary, is “a plan or system under which action may be taken
toward a goal”. The regulations pertaining to the requirements for Regional
Centers, use enough forward-looking and generalized language to demonstrate
that the regulatorily defined “Program” is intended to ongoing. Therefore, the
creation of an EB-5 Regional Center for an intentionally short period for highly
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limited use, is counter to its intended role. In the authorizing statute, Congress
used forward-looking language in the “how to” portion of §610(a):
“…The establishment of a regional center may be based on general predictions,
contained in the proposal, concerning the kinds of commercial enterprises that
will receive capital from aliens, the jobs that will be created directly or indirectly
as a result of such capital investments, and the other positive economic effects
such capital investments will have.”
It appears clear that Congress wanted the Regional Center to direct its
efforts in pooling investments to help create and/or expand multiple commercial
enterprises. They also stated that they expected there to be multiple investments.
The preceding two expectations coupled with future tense verbs clearly implies
that the Regional Center is expected to replicate its efforts in an ongoing effort.
In addition, Congress called their new component a “Regional Center”. The
regulations expand on this theme in stating that the Regional Center needs to
focus on “…a geographical region of the United States…” It is not too much of a
stretch to state that Congress implicitly intended that a Regional Center is
expected to become a lasting new addition to the regional economic
infrastructure. The successful Regional Center will regularly join together with
developers, construction companies, architects, contractors, banks, and others
who are regular components of the regional economic infrastructure. It is also
not too much of a stretch to state that Congress implicitly intended that Regional
Centers are not to be formed merely as a means of obtaining cheap financing for
one project. To allow that short-sighted approach would be a subversion,
perversion, and gross manipulation of Congress’ intent for the EB-5 Regional
Center Program. It is for all the foregoing reasons, and more, that the concept of
the One-Off Regional Center must be halted in its tracks, decried, and
denounced from every corner of the EB-5 stakeholder community.
That’s my two-cents, for now!