EB-5 economic consultants Impact DataSource have answered questions on how the pandemic may impact Targeted Employment Areas. First, he points out it will not really affect rural TEA’s, only high-unemployment TEA’s. While there are many factors at work, if a local area is hit harder than the country as a whole, it will likely be more eligible for TEA status.
Questions about the pandemic and TEA eligibility depend on a number of factors. Firstly, different parts of the country are being impacted more severely. The areas that are most impacted will likely be more eligible, while areas just minimally impacted will likely not be, especially if such unemployment impacts don’t keep up with the national increases due to the pandemic.
Another important factor is what Impact DataSource refers to as the “data lag,” which means that what is happening now as a result of the pandemic won’t be reflected in the data for some time. Because of this delay in acquiring statistics, he says there won’t be any immediate or even short-term impacts.
Another consideration is which data source will be used in TEA calculations. USCIS recognizes both the American Survey Data (ACS) and Bureau of Land Management (BLS) data to calculate immigrant investor TEA eligibility for TEA status of an EB-5 project.
ACS data is collected over a five-year period. There is a significant delay in the publication of this data, and the numbers for the 2020 calendar year won’t be published until December 2021. This will be the first ACS data to reflect the pandemic impact.
This data at the county level is utilized in census-share TEA calculations. Impact DataSource tells us that the lag with this data is only two or three months. However, they also say that, typically, census-share calculations follow calendar-year averages. Because of the lag, the 2020 calendar year BLS LAUS data should be released around April 2021. Therefore, this will reflect the COVID-19 impact much sooner than the ACS data.
Impact DataSource says that because of this difference, “one method might be more beneficial.” Normally, most EB-5 investment projects can qualify as a TEA using both methods; but now with the pandemic, we will see greater variation between the two methods.
When asked about “out of the box” methods to determine TEA status, Impact DataSource offers the potential of using a rolling 12-month average, rather a calendar year average. As an example, they point out that the first 12-month average to reflect the COVID-19 impact should be ready around May or June — the period from April 2019 to March 2020. One must note that with only one month of pandemic impact, the numbers won’t be changed to a significant degree; but as that data from each month after that point is released, the coronavirus impact will start growing in the data.
Another factor to consider is whether USCIS will accept a 12-month rolling average. The agency has not provided a specific policy on what time period to use to for a census-share TEA calculation. Regarding the rolling-average approach, Impact DataSource believes that “it seems that this approach would be reasonable to USCIS.” They note that until 2016, Massachusetts used a rolling 12-month method for their state TEA certification. With that said, Impact DataSource advises that an EB-5 green card investor should consult with their attorney to decide if they are comfortable using a non-standard time frame for their TEA calculations.
Read Impact DataSource’s blog FAQ: Coronavirus and EB-5 TEAs
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