EB5 Investors Magazine | Page 41

“The EB-5 program plays an integral part in helping the American economy grow.” -Jared Polis Despite support from Senator Paul and numerous other Senators, the stakeholder community cannot ignore the obstacles that still lay ahead of us. Program reform will likely face additional scrutiny from Senator Charles Grassley (R-IA), whose position on the Senate Judiciary Committee gives him a key leadership role in immigration legislation. Senator Grassley has been skeptical and critical of the program and his indicated his wishes to see significant reforms. Continued negative press and criticism of the program have ignited public debate about the merits and potential dangers of the program. Much of public debate has been a direct result of misinterpretations of the EB-5 visa’s most basic functions. A recent ABC News Nightline investigation mischaracterized the program as being riddled with fraud and a “magnet for those seeking to sidestep the scrutiny of the traditional immigration process.”1 “Even a basic understanding of U.S. immigration procedure dispels any truth to those claims” says immigration attorney Kate Kalmykov. “With significant bipartisan support led by Senators Schumer (D-NY), Flake (R-AZ), Paul, and Leahy (DVT), it seems likely that the program will be reauthorized at the very least,” (see “Get the Story Straight about the EB-5 Program,” on page 42). For the EB-5 visa to stay competitive among the other immigrant investor programs offered by other countries, we need to make improvements in the program and institute reform like those offered by Congressmen Polis and Amodei’s recent bill. The following pages offer an in-depth analysis of Congressman Polis’ American Entrepreneurship and Investment Act of 2015 and its favorable impact on the EB-5 program. H.R. 616, American Entrepreneurship and Investment Act of 2015, Representatives Jared Polis (D-CO) and Mark Amodei (R-NV) Introduced to House of Representatives January 2015 The text: “Permanent Authorization of the Regional Center Program” What it does: This text provides for the permanent authorization of the EB-5 program to guarantee immigrant investors the certainty and predictability needed to help the American economy grow What it means: Over 90 percent of EB-5 investments are made through regional centers. The EB-5 program has become dependent on regional centers in recent years because they allow investors to finance projects with more expansive job creation projections, e.g. using indirect and induced jobs in the calculations. “Removing the expiration date is a vital step to the continued depositing of funds aimed at economic growth and job creation,” said immigration attorney Enrique Gonzalez. “Failure to extend could lead to deleterious effects on the economy, namely a drop in the GDP, a lack of job creation, and nearly a billion dollars of tax revenue evaporating.” The text: “Targeted Employment Areas” & “State Determinations” What it does: Sets aside no fewer than 5,000 visas for investors who invest in TEAs; Defers TEA designation to states’ discretion; TEA designations last for two years What it means: The bill mandates that the Department of Homeland Security shall “defer to a state’s designation as conclusive.” The precedent for this was established in the USCIS May 30, 2013 Policy Memorandum, but the bill puts the matter into law. Additionally, the bill stipulates that once a state designates an area as such, it remains a TEA for two years. Economist Elliot Winer says that the stipulation to keep a TEA’s designation for two years is “a major improvement from the current situation.” Currently, “determinations have to be recertified on an annual basis or sometimes even sooner,” Winer said. “This can present problems for projects trying to bring in investors over an extended period of time, and can put potential projects in danger if the area can no longer be TEA certified the following year.” “No one should be penalized,” Winer added, “because the unemployment rate in an area you are actually trying to improve happened to fall slightly since an original TEA determination was made.” The text: “Preapproval of New Commercial Enterprises” What it does: Requires the Secretary of Homeland Security to establish a preapproval procedure by which a regional center may ask USCIS to approve a business plan b