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Committee hears explanation of $3 million transfer to cover EB-5 settlement payment
Summary
Officials told the House Appropriations Committee that $3 million will be transferred from the general fund into the state's liability self-insurance fund to cover a July 1, 2024 EB-5 settlement payment; a final $4 million payment scheduled for 2025 may be avoided if claimants receive green cards.
Douglas Farnham, the state's chief recovery officer, and Sarah Clark, Secretary of Administration, told the House Appropriations Committee on Jan. 31 that $3 million originally allocated to a housing-related grant program will be reverted to the general fund and transferred into the state liability self-insurance fund to cover part of the negotiated EB-5 settlement.
Farnham said the $3 million is a reversion from a VHFA-administered wrap/weatherization program that could not be expended because of workforce constraints on contractors performing the work. “The primary reason they can't spend the money ... is workforce related,” Farnham said, adding that VHFA agreed the funds could be repurposed.
Sarah Clark explained the $3 million is the second settlement payment required by the negotiated EB-5 settlement and was paid out on July 1, 2024. “This $3,000,000 is the transfer from the general fund into the state liability self insurance fund,” Clark told the committee. She said an earlier $9.5 million transfer was made in last year’s budget adjustment and that a final $4 million payment is scheduled for July 1, 2025, but that the state may avoid that final payment if the claimants receive green cards: “However, if we are able to provide the green cards for the claimants, we will not need to make that $4,000,000 payment.”
Committee members asked whether the transfer would create a deficit in the liability fund; Clark said the transfer is intended to prevent a deficit. Members also asked about the total settlement amount; Clark said the negotiated settlement totals about $16.5 million.
Committee members indicated they will invite the attorney general's office for more detail about settlement implementation and the green‑card contingency. Farnham told the committee the reverted $3 million is general fund and not ARPA and that VHFA concurs with the reversion given the program’s inability to expend the funds this year because of contractor workforce shortages.
No formal committee action was taken during the Jan. 31 hearing.
