In the latest EB-5-related bill to hit the Senate floor, Senator Rand Paul (R-KY) introduced on October 1, 2015 the most open-handed, favorable legislation to-date for the reauthorization and renewal of the EB-5 Regional Center Program.
The Invest In Our Communities Act, Bill S. 2122, comes at a critical time for the program, which brings billions of dollars of foreign direct investment into the country and creates tens of thousands of jobs for American businesses and workers. Just a day prior on September 30, 2015, Congress temporarily extended the EB-5 Regional Center Program through December 11, 2015. Senator Paul's bill proposes to permanently reauthorize the program, bolstering its economic stimulation and job creation potential for local and state economies across the U.S.
The bill is unsurprising coming from Senator Paul, whose Kentucky candor and libertarian disregard for party lines often separate him from the mêlée. His approach to the EB-5 program, as laid out in S. 2122, is no different. Austrian economic principles guide the approach to S. 2122, offering simple solutions to root issues that, if passed, would resolve many of the hotly-contested topics that have plagued recently proposed legislative reforms to the program.
Namely, S.2122 would strengthen the EB-5 program in five key areas:
- Making the program permanent
- Raising the total number of visas available under the EB-5 category
- Removing derivatives, meaning that visas for an investor's spouse and children will not count towards the total number of allotted EB-5 visas
- Introducing transparency measures
- Keeping the TEA investment amount at $500,000
By expanding the number of visas, bill S. 2122 could ease controversies over the regions in which EB-5 projects are located. The issue, which divides legislators and industry stakeholders alike, primarily stems from differing opinions regarding which areas should qualify as Targeted Employment Areas ("TEAs"), or areas in which the EB-5 investment amount is $500,000. Rather than restricting the designation of TEAs, S. 2122 addresses a more significant issue: there are insufficient EB-5 visas available to fulfill the demand in both urban and rural projects.
The demand is certainly there on both sides. Various EB-5 industry members estimate the backlog of EB-5 petitions to be between approximately 13,000 and 15,000 visa petitions queued. American businesses are increasingly leveraging EB-5 funding, and thousands of American jobs are created with no taxpayer dollars spent. The investment opportunities are plentiful, immigrant investors seeking the American dream are waiting in line, and only the visa limits are keeping more jobs from being created. S. 2122's proposed reforms could fix that for communities across America.
By adding visa numbers to the EB-5 category and removing derivatives from the visa quota, S. 2122 sets itself apart from Senator Patrick Leahy and Senator Chuck Grassley's recently introduced S. 1501, which attempts to use various regulations to modify the distribution of EB-5 investments. In contrast, Senator Paul's bill not only increases the availability of visas for investors to contribute to the economy, but does so without instituting complicated bureaucracy. Instead of burdening the program - and taxpayers - with more bureaucratic regulation, bill S. 2122 expands a free market system and includes measures to enhance its integrity and transparency. Bill S. 2122, along with S.1501 and S. 2115, is the third piece of EB-5 legislation introduced in the Senate this year.