A N A L Y Z I N G
B I L L
S . 1 5 0 1
The Need for
One Voice
by Jeffrey Carr
The recent introduction in the Senate of the
bipartisan reauthorization legislation for the
EB-5 Regional Center Program, the “American
Job Creation and Investment Promotion Reform
Act of 2015” (S.1501), is shaping up to be a real
game-changer for the EB-5 program if enacted as introduced. Significant changes in rules
for counting jobs, for Targeted Employment
Areas (TEAs), and for how regional centers
are operated and report their activity are no
doubt issues of great concern to the EB-5
stakeholder community. In the next 90 to 120
days, how the EB-5 stakeholder community
addresses its concerns regarding the proposed
changes will have a significant impact on the
future of the EB-5 program for at least the
next five years.
This bipartisan legislation is the result of literally months
of exhaustive staff work within the offices of Senate Judiciary
Committee Chairman Charles Grassley (R-IA) and Ranking
Member Patrick Leahy (D-VT). Having a bipartisan reauthorization bill before the Senate is a significant improvement over
where EB-5 stakeholders were just a few weeks ago. Although
the legislation was introduced well in advance of the Sept. 30,
2015 sunset date for the EB-5 Regional Center Program, it has
the feel of being somewhat late in the game considering the
scope of the reforms proposed in the initial draft of the bipartisan legislation.
The bipartisan bill includes a five-year re-authorization of the
EB-5 Regional Center Program through September 2020 and
a number of far-reaching reforms. The more notable reforms in
the bipartisan legislation include: (1) increasing the minimum
investment amount; (2) significant changes in regional center
oversight, compliance, and reporting requirements, (3) changes
in processing procedures and new limits on USCIS processing
times for exemplars, I-526 petitions and I-829 petitions; (4)
new requirements on source of funds documentation; (5) the
opportunity for expedited processing for an additional fee;
and (6) significant changes in Targeted Employment Areas (or
TEAs) and the EB-5 program’s use and estimating procedures
for estimating EB-5 program eligible jobs. While the five-year
reauthorization is a significant improvement over the three-year
reauthorizations EB-5 stakeholders have had to deal with in
previous regional center program reauthorizations, it still is well
short of the permanent reauthorization that the EB-5 community has hoped for.
One key area of reform for EB-5 stakeholders to watch closely
is the proposed reforms related to TEAs. TEAs are always a point
of focus for any project because whether the project is located
inside or outside of a TEA determines whether the EB-5 investor
qualifies to invest the current $500,000 minimum amount or
whether the investor will need to pony up the EB-5 program’s
current default investment amount of $1 million.1 In fact, few
investors pay the default amount. Well over 95 percent of the
projects are located within TEAs, so it is crucial that the EB-5
reform effort get TEAs right. Reading the “tea leaves” of the
EB-5 reform debate to-date, these amounts are almost certain to
increase with the passage of any EB-5 reform legislation. In fact,
this issue is so non-controversial that it is possible that the minimum investor amounts may be increased even if the program
receives only a short-term extension past Sept. 30th while the
legislative deliberations continue beyond Sept. 30, 2015 on the
more significant points of the proposed reforms.
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