Bi-partisan legislation has been introduced in the U.S. Senate to extend the EB-5 regional center program for immigrant investors, and it includes significant changes.
Senators Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vt.) introduced Senate Bill 1501 on June 3. The proposed legislation would implement a five-year extension of the EB-5 regional center program, which would otherwise expire in September 2015. The EB-5 program permits an immigrant investor to obtain permanent resident status by investing either in a new or existing business, or in a project developed by a regional center in the United States. Regional centers create projects for immigrant investors mostly in targeted employment areas, which have a minimum investment amount of $500,000. Regional center projects can use indirect job creation to meet the statutory EB-5 job creation requirements. S.B. 1501 is the first bill introduced to extend this popular investment program.
S.B. 1501, called The American Job Creation and Investment Promotion Reform Act, aims to provide EB-5 investors with more information about their investments and to help investors avoid scams. A pertinent example involved a California-based oil and gas company which the U.S. Securities and Exchange Comission (SEC) recently charged with violations of securities laws for allegedly running a Ponzi-like scheme to defraud investors, including EB-5 investors.
Highlights of the proposed legislation include, but are not limited to:
- Increasing the minimum investment amount from $500,000 to $800,000 for targeted employment area investments and non-targeted areas investments from $1,000,000 to $1,200,000
- Removing an immigrant investor’s spouse and minor children from the overall quota calculation, which would have the affect of eliminating visa backlogs which currently exist for China.
- Removing authority from the states to designate tracts of land as targeted employment areas
- Creating a special $20,000 per year annual fee for each regional center to pay for government audits and fraud detection
S.B. 1501 is the start point in legislative proposals to extend the EB-5 program. The bill will be subject to many proposed changes between now and when the legislation goes to Congress for a final vote.