Reflections on the Judiciary Committee Hearings on EB-5 Reform, Part 1: Possible TEA Reform by USCIS
February 29, 2016
We participated at the House Judiciary Committee’s Hearing - “Is the Investor Visa Program an Underperforming Asset” - that was held on February 11, 2016 (the “House Hearing”). As participants, we are encouraged that the members of the House Judiciary Committee and the Senate Judiciary Committee at its hearing on EB-5 reform held on February 2, 2016 (the “Senate Hearing”) displayed resolve to pass meaningful reform of the EB-5 Program.2 The Hearings reflect a step forward, despite the temporary setback that occurred in December 2015 when Congress unconditionally extended the EB-5 Regional Center program until September 30, 2016.
The EB-5 Integrity bills introduced in the Senate (in December 2015) and in the House (in February 2016) address many of the integrity, compliance and transparency issues plaguing the EB-5 program.4 Although there seems to be a consensus in the House and Senate Judiciary Committees on most of the points in the respective bills, the likelihood of passage of an integrity bill during this legislative session is far from certain given that this is a Presidential election year. The threat of the Regional Center Program’s sunset in September 2016 might be the strongest reason to believe that an integrity bill will pass.
These Integrity bills intentionally avoid the most controversial issues – the Targeted Employment Area (“TEA”) definition, minimum investment amounts, job count methodology and visa reserves – apparently in an effort to increase the likelihood of passage of at least some EB-5 reforms for which a consensus does exist. However, as each week passes without the introduction of a bill that addresses the TEA issues, the likelihood of real TEA reform being passed by Congress during this session greatly diminishes.
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