Congressional leaders negotiating a budget deal have dropped a wide-ranging proposal to overhaul the immigrant-investor visa program, instead extending the existing rules through next September.
House and Senate committee leaders had crafted a compromise an industry trade group said would have been the program’s first major legislative reform since the early 1990s. It would have funded efforts to combat fraud, raised the minimum investment to participate, and created incentives to channel immigrant investors’ foreign capital to high-priority economically struggling areas.
Sen. Patrick Leahy, D-Vt., who helped lead this year’s effort, issued a statement Wednesday that said the EB-5 program “has long been abused and is in dire need of reform.”
He said reform advocates pushed to revise the program, but “congressional leadership inexcusably rejected this much-needed reform.”
IIUSA, the national trade group representing firms that invest EB-5 visa applicants’ foreign capital in projects, supported the compromise and expressed disappointment despite the program’s extension.
“While this is good news for the EB-5 industry and communities counting on EB-5 capital to create jobs, we are disappointed that Congress did not take this opportunity to pass a long-term reauthorization and reform package,” the trade group said in a post on its blog.
A key flashpoint in the debate has been how developers exploit an incentive in the EB-5 program intended to benefit rural and economically distressed urban areas. Currently, immigrant investors who want a 50 percent discount on the $1 million required to participate in the visa program can select projects in targeted employment areas, which states designate.
Developers have used that incentive to build projects in hot spots such as downtown Seattle and Manhattan. The Seattle Times documented the industrywide practice in March.
The Leadership Conference on Civil and Human Rights, a coalition of labor unions, minority-rights and faith groups, condemned Congress’ failure to reform the program, saying the status quo “means that low-income rural and urban communities will continue to be robbed of the jobs and investment that the program was designed to create.”
The Real Estate Roundtable, a trade group whose board includes the CEO of The Related Cos., the single-largest user of EB-5 financing, said in a statement it was pleased to see the 10-month extension.
“The negotiations thus far have been fruitful and provide a blueprint going forward,” the group said Wednesday. “Inclusive, transparent, and robust negotiations will ultimately lead to a long-term extension that improves EB-5, enhances its integrity and maximizes its overriding goal to create jobs for the American people.”