As the holiday season approaches, Congress is running up against its December 11th deadline to reauthorize the EB-5 Immigrant Investor program.
The EB-5 program has allowed CiF and hundreds of other Regional Centers across the country to use foreign direct investment from overseas investors to finance new development projects and create / retain jobs for US workers. However the EB-5 program is slated to expire on December 11th and if Congress does not act to reauthorize, this powerful tool for economic development will not be available to drive job creation in 2016.
In terms of economic development, EB-5 investments across the US have added almost $4.5 billion dollars in FDI, have created tens of thousands of US jobs, and have added billions of dollars to local, state, and federal tax rolls – all at zero cost to the tax payer. If the program is allowed to lapse, communities across the country will lose the opportunity to use this investment capital.
However, instead of another short term extension of the EB-5 program, CiF urges members of Congress to pass a multi-year extension based on the legislative proposal recently put forward by Senate and House leaders with the following modifications, as proposed by IIUSA, the EB-5 industry’s trade association:
- Effective Dates – IIUSA and CiF are strongly in favor of clearly articulated effective dates for reforms and new investment amounts for the EB-5 program. There must be a level playing field for applying new rules to all EB-5 Projects and Investors, as opposed to ‘grandfathering’ in certain projects, thereby granting them an unfair advantage in the marketplace.
- Filing Investor (I-526) Applications Prior to Project (I-924) Application Approval – Draft legislation for reforming the EB-5 program only allows Investors to file their initial documents with the USCIS after their EB-5 project application has been approved. This practice would greatly increase the time it takes to secure investors, likely rendering EB-5 an impractical source of capital for job creating projects that need assistance. Instead, it would be best to allow concurrent filings but with the caveat that the Investor’s petitions are not adjudicated until after their project has been approved.
- Indirect & Direct Job Creation – IIUSA and CiF believe it is important that EB-5 program reforms do not limit the ability of Regional Centers to use reasonable economic statistical modeling to determine a given EB-5 project’s total job creation. To achieve this, language in the draft legislation should be clarified so that Regional Centers are able to use proven economic impact models to prove both direct and indirect job creation.