Judge Voids EB-5 Immigrant Investor Modernization Rule, Restoring Old Investment Amounts and Targeted Employment Area Standards

June 24, 2021 | Insights

By Christian Triantaphyllis

On June 22, 2021, Magistrate Judge Jacqueline Scott Corley of the Northern District of California ruled that Former Acting Homeland Security Secretary Kevin McAleenan exceeded his statutory authority in issuing the July 2019 EB-5 Immigrant Investor Program Modernization Rule (the Modernization Rule), a final rule that implemented substantial changes to the EB-5 investment immigration program. Despite a recent effort by newly appointed DHS Secretary Alejandro Mayorkas to ratify the updated regulations, the Court vacated the final rule in its decision in Behring Regional Center LLC v. Chad Wolf, et al., concluding that McAleenan was not appointed under the proper procedure and therefore the Modernization Rule has no force or effect and must be set aside.

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The invalidation of the Modernization Rule overturned several key features of the EB-5 program that had been in place since July 2019:

  • No priority date retention. Under the Modernization Rule, certain EB-5 petitioners were authorized to retain the priority date of a previously approved EB-5 petition when they file a new petition. This priority date retention is no longer authorized.
  • Minimum investment amounts restored. The standard minimum investment amount for the EB-5 program will return to $1 million. The minimum investment in a targeted employment area (TEA) has reverted to $500,000 from $900,000.
  • TEA designations. The Modernization Rule reformed the TEA designation process to eliminate a state’s ability to designate certain areas as areas of high unemployment. With the Court’s decision, USCIS will again defer to TEA designations made by state and local governments.
  • Conditions on permanent residence. Derivative family members no longer need to file their own petitions to remove conditions on their permanent residence when they are not included in a petition to remove conditions filed by the principal investor.

Judge Corley’s decision remains subject to appeal by USCIS to the Ninth Circuit Court of Appeals. It is also likely Secretary Mayorkas will still finalize the Modernization Rule. Stay tuned for potential updates from Jackson Walker. For questions about how you or your business could potentially be impacted, please contact a Jackson Walker attorney.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice. For additional assistance related to EB-5 visa applications, please contact an attorney in Jackson Walker’s Immigration practice.