Support Grows For Continuing, Strengthening EB-5 Program
Another national organization of U.S public officials has added its name to a growing list of supporters seeking congressional reauthorization of the country’s EB-5 Regional Center Program.
The U.S. Conference of Mayors (USCM) adopted a resolution in June in support of the program because of its importance to economic development and job creation in the nation’s cities. The EB-5 Program was designed to create jobs as a result of foreign investments. Qualified foreign participants in the program make a prescribed financial investment in a commercial enterprise in exchange for visas for themselves and immediate family members.
The National Conference of State Legislatures (NCSL) became the latest organization to promote continuation of the program, adopting a similar resolution last month that calls on Congress not only to reauthorize the economic development program created in 1990, but to also add provisions to improve its integrity, transparency and effectiveness.
USCM, the official organization of American cities with populations of 30,000 or more, also seeks additional visa capacity in its resolution. According to USCM, there were more than 20,000 pending applications for EB-5 related visas at the end of the first quarter of Fiscal Year 2016, representing nearly $11 billion in potential foreign investment and 220,000 American jobs.
These urban development funds, say USCM officials, are instrumental for downtown revitalization projects in U.S. cities and to attract new industries to urban areas. The resolution in support of continuing and expanding the program notes that these industries create a “greater than average multiplier of jobs, taxes, sustainability, and thereby generate a disproportionate economic benefit for the entire U.S. economy.”
In addition to USCM and NCSL, a resolution in support of the EB-5 Program has been adopted by the National Association of Counties. The program also has been endorsed by American EB-5 industry stakeholders, some of whom have signed a letter delivered to members of Congress to seek an extension to and reform of the program.
Many mayors and development executives say the EB-5 program has been a boon to economic development in their cities. From 1992 to the present, the EB-5 program has resulted in more than $16.2 billion in foreign investments nationwide and has supported more than 171,000 American jobs.
Recent figures from the U.S. Department of Commerce show that the EB-5 Program last year accounted for 14 percent - or $4.38 billion - of the $3.1 trillion in foreign direct investment in the United States. Some examples of the projects include apartments, energy projects, hotels, offices and restaurants.
To qualify for the program, foreign investors must invest in a commercial endeavor that either preserves or creates 10 full-time jobs for American workers. The minimum qualifying investment is $1 million and can include cash, equipment, inventory, other tangible property and in some cases cash equivalents and debt secured by the foreign investor’s assets. However, if the investment is in a qualifying rural area or an area with high unemployment, the minimum investment is $500,000.
In exchange for a successful, qualified investment, the foreign investor is eligible for an EB-5 visa. Visas can also be made available for the investor’s spouse and unmarried children under age 21 for a two-year conditional period. If the investor petitions successfully for removal of the conditions after the two-year period and the conditions are removed, the spouse and children will be allowed to live permanently in the U.S. and work and go to school in this country.
SB 2415, the EB-5 Integrity Act, is currently awaiting congressional action. The program faces a Sept. 30 deadline for congressional reauthorization. Because of the economic development impact the program has had in the past and the number of jobs created for Americans, city officials are making a case for continuing the EB-5 program and will be closely monitoring the bill.