Economic Impacts of S. 1501’s Redefinition of Targeted Employment Areas (TEA)

Economic Impacts of S. 1501’s Redefinition of Targeted Employment Areas (TEA)

 

Two members of the Senate introduced The American Job Creation and Investment Promotion Reform Act, S. 1501, in June 2015.  The bill has many provisions seeking to provide reform to the program, including provisions for integrity measures, increased capital investment amounts, and provisions to redefine Targeted Employment Areas (TEAs).

Under current law, a TEA is defined as “an area which, at the time of investment, is a rural area or an area which has experienced unemployment of at least 150 per cent of the national average rate.”  The definition of a “high unemployment area” is defined as a “metropolitan statistical area, the specific county within a metropolitan statistical area, or the county in which a city or town with a population of 20,000 or more is located, in which the new commercial enterprise is principally doing business has experienced an average unemployment rate of 150 percent of the national average rate.”  The state is given the authority to designate TEAs.

The new bill proposes to redefine TEAs and high unemployment areas.  Under the proposed bill, a TEA means “a high unemployment area, a rural area, or any area within the geographic boundaries of any military installation closed, during the 20-year period immediately preceding the filing of an application . . .based upon a recommendation by the Defense Base Closure and Realignment Commission.”  8 C.F.R. §204.6.  The TEA designation determination, under S. 1501, shifts the responsibility to the Department of Homeland Security and takes away the designation authority from the state.  In addition, high unemployment area is redefined under S. 1501 as “an area, using the most recent census data available, consisting of a census tract that has an unemployment rate that is at least 150 percent of the national average unemployment rate.”

The new proposed definition of a TEA under S. 1501 limits the word “area” to only one census tract.  This action restricts the EB-5 program’s economic benefits into many mid-sized cities and suburbs across the country, as many areas that currently qualify as a TEA will no longer qualify as a TEA under S. 1501.  The EB-5 Investment Coalition (EB-5IC) has compiled data on select states demonstrating the percentage of census tracts that would be disqualified in certain Metropolitan Statistical Areas (MSAs).  Please refer to the  following documents: 1501’s TEA Proposal: The Economic Consequences Made Clear and Cities of All Sizes Will Lose Jobs Under S.1501.


http://www.natlawreview.com/article/economic-impacts-s-1501-s-redefinition-targeted-employment-areas-tea



Securities Disclaimer

This website is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities. Any such offer or solicitation will be made only by means of an investment's confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. This website does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. EB5Projects.com LLC and its affiliates expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in the website, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.