“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