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Summary of S.2415: EB-5 Integrity Bill

On December 17, 2015, two days after Senate and House leadership recommended a “clean” extension of the EB-5 program until September 30, 2016, Senator Flake (R-AZ), with Senator Cornyn (R-TX) and Senator Schumer (D-NY), introduced S.2415,  the “EB-5 Integrity Act of 2015.”  This is the first new piece of EB-5 reform legislation introduced since the EB-5 program’s original sunset date of September 30, 2015.  It is the sixth bill introduced in the 114th Congress that seeks to reform the EB-5 program.

The bill includes significant oversight and integrity reforms, many of which reflect earlier Senate legislation introduced in June of 2015. The integrity measures included in S.2415, as with those in prior bills, have been largely welcomed by the EB-5 industry.  Several of these provisions follow recommendations from the Department of Homeland Security (DHS), the Government Accountability Office (GAO), and leaders in the Congress.  The majority of the provisions mirror the reforms proposed in S.1501 and later discussion draft bills that circulated amongst stakeholders in November and December 2015.  The following are some of the main integrity measures designed to reform the EB-5 program:

  • Regional Center Program: the bill sets out job creation requirements, prohibits the use of investor funds to purchase publicly available bonds, and provides guidelines for Regional Center amendments.

  • Business Plan for Preapproval: the bill provides that an application must be filed prior to an investor’s filing of a petition.  The bill lays out the numerous requirements for the business plan, and provides that approval of the business plan will be binding on future adjudication absent certain circumstances.

  • Reporting requirements in regional center annual statements are strengthened and expanded.

  • Bona Fides of Persons Involved with a Regional Center:  the bill requires background checks and provision of biometric information for those involved with the regional center.

  • Ownership of a regional center by a foreign government or governmental entity is prohibited, including financial support.

  • New authorities for DHS: the bill provides broad new authorities for DHS to terminate a regional center, debar or suspend regional center program participants, or deny or revoke investor petitions based on a variety of enumerated grounds including threats to the national interest, fraud, or misrepresentation.

  • Annual regional center certification is required to demonstrate compliance with securities laws.

  • The bill establishes an EB-5 Integrity Fund, funded by regional centers through a $20,000 or $10,000 fee per regional center, depending on the size of the regional center, and $1000 per investor.

  • Enhanced oversight of direct and third party promoters: such promoters must register with U.S. Citizenship and Immigration Services (USCIS) and meet certain requirements.  Investors must sign a disclosure reflecting an understanding of the rules and procedures, and the fees involved.

  • New source of funds requirements: gift restrictions and loan restrictions enumerated.  The required documentation includes a provision for 7 years of tax returns, if applicable in the taxing jurisdiction.

  • Effective dates: all amendments made under the Regional Center Program will be effective 90 days after date of enactment.  The provisions governing source of funds and amendments to the regional center will be effective on the date of enactment.

  • New reports: the bill requires reports from the GAO and a multi-agency inspectors general report.

  • Transparency of agency operations: the bill contains provisions to enhance transparency of agency operations, monitor agency communications with stakeholders, and ensure non-preferential treatment of regional center and investor petitions.
    This EB-5 Integrity Act of 2015 does not include reforms to current policies such as the definition of Targeted Employment Areas or minimum investment amounts.  It is likely that when Congress returns from the winter recess for the second session of the 114th Congress, hearings and additional legislation may follow.  The EB-5 Integrity Act represents another step by Congress toward the significant reform of the EB-5 Regional Center Program.  The EB-5 Regional Center Program is set to expire on September 30, 2016.

 
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About this Author

Kristen W.  Ng, Greenberg Traurig, Business Immigration Lawyer
Associate

Kristen W. Ng focuses her practice on business immigration and compliance matters. She advises individuals and companies on a wide range of immigration matters, including nonimmigrant and immigrant employment-based cases, citizenship issues (acquisition, retention and relinquishment) and investor cases (E-2 and EB-5). She communicates directly with clients, including HR managers, high-level executives, and employees to ensure comprehension of each respective immigration process and procedure and to collaboratively produce the best immigration strategy and approach for...

703.749.1300
Laura Foote Reiff, Greenberg Traurig, business immigration lawyer, foreign company legal counsel, immigrant compliance attorney, targeted employment law
Northern Virginia Co-Managing Shareholder; Co-Chair, Business Immigration & Compliance Practice; Co-Chair, Global Human Capital Solutions

Laura Foote Reiff focuses her practice on business immigration laws and regulations affecting U.S. and foreign companies, as well as related employment compliance and legislative issues.

Laura advises corporations on a variety of compliance-related issues, particularly related to Form I-9 alien employment verification matters. Laura has been involved in audits and internal investigations and has successfully minimized monetary exposure as well as civil and criminal liabilities on behalf of her clients. She develops immigration compliance strategies and programs for both small and large companies. Laura performs I-9, H-1B and H-2B compliance inspections during routine internal reviews, while performing due diligence (in the context of a merger, acquisition or sale) or while defending a company against a government investigation. Laura publishes and frequently lectures on I-9 issues, including penalties for failure to act in accordance with government regulations, anti-discrimination laws and employers' responsibilities upon receiving social security "no-match" letters.

Laura represents many businesses in creating, managing and using "Regional Centers" that can create indirect jobs toward the 10 new U.S. jobs whose creation can give rise to EB-5 permanent residence for investment. She coordinates this work with attorneys practicing in securities law compliance, with economists identifying "targeted employment areas" and projecting indirect job creation, and with licensed securities brokers coordinating offerings. She also represents individual investors in obtaining conditional permanent residence and in removing conditions from permanent residence.

703-749-1372
Practice Group Attorney

Matthew Virkstis focuses his practice on business immigration laws and regulations affecting U.S. and foreign companies, as well as related policy, political, and oversight issues. He is experienced advising trade associations and development companies on the EB-5 Immigrant Investor Program and issues related to adjudication of immigration petitions seeking approval to obtain financing for major infrastructure projects.

‡ Admitted in Vermont, not admitted in Virginia, and is limited to federal immigration practice.

703-749-1300