On June 19, 2013, the U.S. Bureau of Economic Analysis (BEA) issued a docs/bea report.pdf announcing its plan to eliminate its Regional Input-Output Modeling System (RIMS II) economic model. That model has been specifically approved by USCIS and RIMS II reports have been heavily relied upon by a majority of EB-5 investors and Regional Centers in filing their EB5 applications.

This announcement has left many in the EB5 arena wondering what type of evidence of job creation would BEA start accepting and whether USCIS would continue ot accept RIMS II modeling. 

On July 3, 2014, the BEA announced its "plans to release in 2015 a modified economic model to replace the original" RIMS II model.

Former BEA economist, John Barrett of Performance Economics LLC told David Morris, Chair of the AILA/EB-5 Committee summarized the BEA News as follows:

• No change in the methodology of the USCIS approved benchmark series of multipliers;
• Benchmark series now based on the 406-industry 2007 benchmark I/O table instead of 2002, an improvement;
• USCIS should continue to take a positive view of RIMS II, as they have in the past.

According to Barrett, “Given this announcement by BEA, there is no reason why USCIS wouldn’t continue to recognize RIMS II as a ‘verifiable methodology'".  The Benchmark Series multipliers will be produced exactly as they have in the past and therefore USCIS would be hard pressed to find a reason to reverse itself on past recognition granted RIMS II.”

If your EB5 application is through a Regional Center you must make sure that if the project is relying on indirect job creation reports that these reports continue to be valid and make sure that the reports have been approved by a qualified econoomist as to the impact of the RIMS II changes.

Lawyers representing EB-5 investors should be aware of the latest USCIS
adjudications trend challenging claims of construction jobs by means of
requiring third-party validation of construction data and regional industry
standards. Immigration lawyers should now ask the Investor's selected Regional
Center to provide such supporting evidence in advance of filing the I-526
petition or in anticipation of the RFE.

Ever since Matter of Ho, 22 I&N Dec. 206 (Assoc. Comm'r 1998),
USCIS has required the submission of a "comprehensive business plan" in the Form
I-526 filing to clarify the investor's claimed job creation projections. But
recently, the USCIS has expanded its standard requiring a more detailed and
verified analysis of any construction phase jobs.

When a Regional Center project claims a construction period exceeding 24
months, EB5 investors can claim direct, indirect and induced jobs resulting from
the construction phase activities and qualified construction expenditures. When
the business plan making such job claims is submitted to the USCIS as part of
the I-526 petition, the agency will apply the following test:

"Because construction will surpass two years, the petitioner must present a business plan with a more detailed and itemized construction timeline showing all relevant phases of the construction effort. The business plan must also provide transparent, objective, and verifiable data illustrating that the proposed construction timeline and budget are within a reasonable range when compared to industry standards."

In failing to meet this standard with an initial I-526 filing package, the
USCIS will issue an RFE for such records. In response, the Regional Center will
need to supply associated investors with an evidence package that contains
third-party opinions verifying or explaining business plan claims relating to
construction activity and assumptions. These may include following:

• General Contractor's Detailed Construction Timeline. This
  report breaks down all phases of the build-out, by date and subcontractor
  specialty/trade. The timeline should provide expected start and completion dates
  for each distinct activity.
• Third Party Validation of Construction Timeline. This
  expert opinion assesses the project's construction timeline claim and measures
  the timeline against regional industry norms.
• Third Party Validation of Construction Costs. This expert
  opinion assesses the itemized budget costs and compares them with verifiable
  data, analysis, and industry standards. Reliable construction costs are
  important to the USCIS because these are direct inputs to the economic modeling
  that calculates job creation.

These are just a few examples of how a comprehensive business plan claiming
construction jobs may effectively utilize third-party verification of critical
construction data, budgets, timelines and assumptions to ensure Matter of Ho
compliance. Given the emerging USCIS trend in this area, EB5 lawyers should be
prepared to supply exhibits which contain transparent, objective, and verifiable
data illustrating that the proposed construction timeline and budget are within
a reasonable range when compared to industry standards. And note that such
third-party construction experts are not in lieu of the Regional Center's
economist calculating the job creation, but are rather in addition to the
economist.