Doubt Cast on the Extension of EB-5 by CRS Opinion

By David North, October 5, 2016

Was the controversial EB-5 (immigrant investor) program really extended by Congress until December 9 of this year as we reported earlier?

Did the convoluted language of the continuing resolution, which will fund the government until that date, actually extend the fraud-ridden EB-5 program, without saying so in so many words?

Doubt was raised by the release of a document written by lawyers in Capitol Hill's own Congressional Research Service, an entity that Congress regards as its in-house think tank.

The full text of that cautiously written, 11-page, 80-foot note document, with the names of the authors redacted before it got to us, can be seen here.

One of the complications is that EB-5, and two other less controversial immigration programs more or less covered in the CR, are financed by fees, whereas most of the rest of the government is funded by appropriated funds, the general subject of the CR. So, in laymen's terms, it is not clear that a funding bill can extend a program (without specific language) that is fee-supported as it can tax-funded activities.

Stated differently, this is a key passage from the CRS document:

Although the FY2016 DHS Appropriations Act does explicitly extend the relevant dates for the other three immigration provisions in question, CRS has not been able to identify similarly explicit funds appropriated for those provisions in the FY2016 DHS Appropriations similar to the explicit funds appropriated for the E-Verify program. Insofar as no funds were provided in the FY2016 DHS Appropriations Act specifically for the other three provisions, and given that FY2017 CR did not otherwise extend the sunset date authorizing those three programs, it does not appear that this reading of Section 101 would require the conclusion that the "authority and conditions" regarding those three provisions, such as the date extension, would be continued by the FY2017 CR.

The "other three immigration provisions in question" are EB-5, the small Conrad 30 program for bringing foreign MDs to depressed areas, and a non-minister religious worker program. E-Verify is treated differently because it is tax-supported.

My sense is that no one really knows what will happen with this cloud hanging over the EB-5 program.

What it will do, I suspect, is give new life to critics of the program, and it may cause a slowing of activity on the part of foreign investors. Why put up good money with these storm clouds looming? Why not wait until things settle down?

Meanwhile, projects in the United States currently funded by EB-5 moneys will presumably move ahead, as these activities were authorized, and funded, when the EB-5 program was clearly alive.

It will be interesting to see what the Chinese press does with this situation.