Proposed Changes to the EB-5 Investor Visa

The day after the EB-5 program was extended in a continuing resolution was a busy day for EB-5 legislation.  On October 1, 2015, Senator Jeff Flake introduced the “Targeted Employment Areas Improvement Act.”  The legislation would:  

1. Reserve 5,000 visas under the annual cap for investments made in targeted employment areas.
2. Provide that an area designated as a targeted employment area shall be valid for five years, with the possibility for renewal in five-year increments.
3. Provide that an investor who invests in a targeted employment area shall not be required to increase the investment should the designation expire.
4. Deem as a targeted employment area a “community adversely affected” a military base closure pursuant to a recommendation from the Defense Base Closure and Realignment Commission (BRAC).
5. It would also define a “high unemployment area” as follows:
   
   1. A “census tract or group of census tracts that are economically integrated” and which take into consideration commuter flow patterns, that meet the unemployment threshold of 150 percent of the national unemployment average.
   2. An area within the boundaries of a Federal or State development inventive program such as an enterprise zone, renewal community, promise zone, or empowerment zone, or any Federal or State program “designed to create jobs, start small businesses, or revitalize neighborhoods”

 
Further, the TEA Improvement Act would define  “rural areas” as follows: 

1. Any area outside of a metropolitan statistical areas
2. Areas within a metropolitan statistical area (MSA) that are 1) a city or town with a population of 20,000 or fewer residents “on the outer boundary” of an MSA, 2) a city or town with a population of 20,000 or fewer residents that is within a state with a population of fewer than 1.5 million residents, or 3) an area located in a census tract within an MSA that as a population density of fewer than 500 people per square mile.

 Shortly after the TEA Improvement Act was introduced on the Senate floor, Senator Rand Paul offered the “Invest In Our Communities Act”.  This legislation would strengthen the EB-5 program in five key areas: 

1. Making the program permanent
2. Raising the total number of visas available under the EB-5 category
3. Removing derivatives, meaning that visas for an investor’s spouse and children will not count towards the total number of allotted EB-5 visas
4. Introducing transparency measures
5. Keeping the TEA investment amount at $500,000

These new legislative efforts indicate that support for the EB-5 program is strong in the US Congress and the speed with which they were introduced signals a desire to make EB-5 a legislative priority.