Last Friday, May 16, 2013, the Senate Judiciary Committee held “Day Three” of the markup of the Comprehensive Immigration Reform Bill under review by the Senate, S. 744. The Committee unanimously approved Senator Patrick Leahy’s (D-Vt.) amendment to make improvements to and permanently codify the EB-5 Immigrant Investor Regional Center program. According to the Senator’s website, Leahy said that when fully subscribed, the EB-5 program “has the potential to contribute $5 billion to communities around the country each year, creating tens of thousands of American Jobs. And all of it is at no cost to American taxpayers.”
The amendment ensures the EB-5 regional center program, currently set for sunset in 2015, will be made permanent. As in years past, just days before it was set to expire, the EB-5 regional center program was re-authorized in September of 2012. The amendment also provides improvements to the program to make it more efficient and predictable for investors and regional centers. One of these proposed mechanisms would be an exemplar I-526 petitions pre-approval process that would be binding for adjudication on subsequently filed I-526 petitions. The number of EB-5 visas is increased as well through the exemption of spouses and children from the 10,000 cap. The amendment also designates a minimum of 5,000 visas per year for investments into targeted employment areas (TEAs) and extends TEA designations to five years. Finally, the amendment will adjust the minimum investment (currently at $1 million or $500,000 in a TEA) beginning January 1, 2016. The minimum investment will adjust with the percentage change in the consumer price index (CPI) during the fiscal year 2015 and every five years thereafter, reflecting market conditions.
In a timely addition to the program, following the wake of the U.S. Securities and Exchange Commission’s (SEC’s) investigation of the Intercontinental Regional Center Trust of Chicago, the amendment builds anti-fraud and oversight measures into the EB-5 program. The amendment requires detailed annual reporting from regional centers to track the progress of investment projects. It also permits the Secretary of Homeland Security to bar those who were liable of financial or other crimes from using the program and to conduct background checks on potential regional center managers. Further, the amendment strives to ensure that all users of the program are in full compliance with securities laws requiring a certification of compliance with securities laws in initial designation applications and regional center applications. If a regional center does not make the requisite certification, the amendment provides USCIS the authorization to terminate the regional center. Such termination is at the unreviewable discretion of USCIS.
S. 744 markups continue today (May 20, 2013) with Title III and then again with Title II on Tuesday and Wednesday. Sheppard Mullin will keep our EB-5 Stakeholders updated on this legislation as it makes its way through committee and Congress.