Senate Judiciary Committee Confirms Hearing on EB-5 Target Employment Areas
The Senate Judiciary Committee will hold its second hearing of the year examining the EB-5 Regional Center Program. This program is designed to bolster the U.S. economy by incentivizing investment from foreigners in exchange for legal permanent residence. The FY 2016 omnibus appropriations measure passed by Congress at the end of 2015 extended the EB-5 Regional Center Program for the remainder of the Fiscal Year. The Wednesday hearing will include two separate panels. First, Committee members will hear from Congressmen Bob Goodlatte (R-VA) and John Conyers, Jr., (D-MI), Chairman and Ranking Member, respectively, of the House Judiciary Committee. The second panel will include four private sector witnesses: Daniel Healy, Chief Executive Officer, Cavitas Capital Group; Timothy Whipple, Former General Counsel, Iowa Economic Development Authority; Peter Joseph, Invest In The USA; and Gary Friedland, New York University Stern School Of Business.
Lawmakers are currently debating whether to overhaul the program in light of what some argue is a need to better protect against potential abuse, refocus investment in areas that need it most, and increase the minimum levels of funds required to participate in the program. Projects slated for Targeted Employment Areas require a lower investment amount, $500,000, as compared to $1 million elsewhere. These rural or high unemployment areas must meet specific criteria to qualify, but, given the lower threshold, can serve as attractive candidates for foreign investment. During a February 2 hearing, Senate Judiciary Committee Chairman Charles Grassley (R-IA) expressed his concern that the EB-5 Program lacks sufficient oversight and suffers from corruption and serious weaknesses, potentially implicating national security. Chairman Grassley believes the program must be reformed before it can be reauthorized beyond September 30, an issue that will certainly be debated by lawmakers over the months to come.
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