A regional immigrant investor center in Florida has filed a lawsuit to temporarily block a final regulation overhauling the EB-5 program, which creates a path to green cards for immigrants who invest in U.S. commercial entities that create jobs for U.S. workers.
The final regulation from the Department of Homeland Security, which went into effect Nov. 21, raises the minimum investment amounts required for a green card to $900,000 and $1.8 million, from $500,000 and $1 million. Florida EB-5 Investments LLC is seeking a temporary injunction of the rule’s implementation because it argues the hike in required investment will have a “severe economic impact” on regional centers that facilitate the process for foreign nationals to invest in American businesses.
Florida EB-5 Investments also argues that the “significant increase” in the investment levels “will deter foreign investors from using the Program, which will undermine the worthy policy goals of the Program.”
The EB-5 program allows immigrants to invest the required minimum amount in a U.S. commercial entity that creates at least 10 jobs for U.S. workers. The regional center part of EB-5—which makes up about 95% of the program—allows immigrants to pool their investments and count indirect job creation toward the visa requirements.
At its peak, EB-5 brought in nearly $11 billion and created more than 355,000 U.S. jobs, according to a report based on U.S. Citizenship and Immigration Services data.
The EB-5 Investment Coalition, which includes members from the business community, trade associations, and elected officials who support the program, hopes the judge will agree to a preliminary injunction to give Congress time to consider alternative proposals.
“The Department of Homeland Security’s new EB-5 regulations fail to holistically modernize the program, while putting hundreds of thousands of American jobs at risk and stifling economic growth development in communities across the country,” Laura Reiff, co-chair of the coalition’s board, said in a statement to Bloomberg Law.
Scope of Agency Authority
The lawsuit also takes issue with the final rule’s revision of how the government determines “targeted employment areas.” These are generally rural parts of the country or areas of high unemployment, where an investor can get a green card by meeting the lower investment threshold.
According to Florida EB-5 Investments, DHS “goes beyond the scope of its authority” by removing individual states’ authority to determine targeted employment areas. States have traditionally been able to make these designations, “and a cookie-cutter nationwide standard cannot possibly account for the unique nuances of each state’s economically depressed areas,” it said.
A spokesman for USCIS, the agency responsible for administering the visa program, told Bloomberg Law it does not comment on pending litigation.
Causes of Action: Violations of the Administrative Procedure Act, and the 10th Amendment.
Relief: Temporary restraining order and preliminary injunction; declaratory judgment that the regulations are invalid; and attorneys’ fees and costs.
Attorneys: Michael R. Sklaire of Greenberg Traurig in McLean, Va., represents the investor center. Attorneys haven’t yet entered an appearance for the government.
The case is Fla. EB5 Invs., LLC v. Wolf, D.D.C., No. 19-03573, complaint filed 11/26/19.