On Sep 08 2014 by H. Ronald Klasko
The Impact of EB-5 Quota Backlogs on Chinese Families
In recent times, we have published two blogs and one Client Alert on the impending EB-5 quota backlogs for investors born in mainland China.
The purpose of this blog is to highlight what this means to families with children and to discuss the likelihood that the EB-5 quota backlog problem will be resolved by the U.S. Congress.
In order to understand the impact of an EB-5 quota backlog for a Chinese family, it is necessary to make reference to the Child Status Protection Act. The Child Status Protection Act was passed by the U.S. Congress to prevent a child from turning 21 (and therefore becoming ineligible to immigrate with his or her parent) because of processing delays by U.S. Citizenship and Immigration Services. The law “freezes” a child’s age as of the filing date of the I-526 petition during the entire time that the petition is being processed by USCIS. Assuming the quota is current when the EB-5 petition is approved (which means that a visa number is immediately available), the child’s age remains frozen as long as the child takes action to obtain his immigrant visa (green card) within one year.
Since the Child Status Protection Act was not meant to protect against quota backlogs, once the I-526 petition is approved, if a visa number is not available because of the quota backlog, the child’s age is “unfrozen”. This means that during every day of quota unavailability, the child’s age increases by one day beyond the age that the child was when the I-526 petition was filed. For example, if the child was 20 years and 6 months old when the I-526 petition was filed, and if the I-526 petition was pending for one year before it was approved, and if the quota is backlogged upon approval, the day after the approval, the child’s age for immigration purposes would be 20 years 6 months and 1 day.
For quite some time, we have been advising that “18 is the new 21”. This means that we have been advising our Chinese clients to file I-526 petitions before their children turn age 18. Although no one knows for sure how long the waiting list will be, we are hopeful that the waiting list will be less than 3 years long. However, the best advice is to file as soon as possible before the child turns 21.
A curiosity of the Child Status Protection Act is that, in the event of a quota backlog, it is in the investor’s interest for the I-526 petition to be pending as long as possible if the investor has a child. The reason for this is that the child’s age remains frozen for a longer period of time. For the same reason, expediting the approval of an I-526 petition is not only not helpful (because the investor’s place in line is determined by the filing date and not the approval date), but can actually be counterproductive because the child commences the immigration aging process sooner than he otherwise would.
We are frequently asked to assess the chances that the U.S. Congress will take action to increase EB-5 numbers so as to avoid the quota backlog. The chances of this happening in the near future can only be described as unlikely. There are quota backlogs in many categories of family and employment-based immigration, and Congress has taken no action to deal with them. Unless and until the U.S. House of Representatives decides to act on immigration legislation more broadly, it is very unlikely that it will deal with EB-5 quota numbers as a separate legislative action. Although there is some hope that Congress could take this action at the same time as it extends the regional center program in September 2015, the chance of action on the quota is considered very slim in the opinions of most Washington insiders.
So can anything be done? There is one possibility. President Obama is presently considering executive actions that he can take consistent with the present law to alleviate problems in the immigration system. One such action that he is considering is an interpretation of the existing law to exclude the family members from the quota count. In the EB-5 context, this would mean that the 10,000 numbers would go to 10,000 investors rather than to 3,000 to 4,000 investors, with the remainder of the numbers going to family members. Many, including this author, believe that the Immigration and Nationality Act has been interpreted incorrectly for many years in that family members should never have been counted against the worldwide immigration quota. If President Obama takes this executive action, the threat of EB-5 quota backlogs for China would immediately disappear.
Anyone concerned about this issue should contact the White House directly using the following web contact form: http://m.whitehouse.gov/contact/submit-questions-and-comments. In addition, you may contact your Senator or Congressman and request that he or she advocate this action to the White House directly.