Six Things You May Not Know About Proposed EB-5 Reform

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Typical of any congressional bills, there is more than what is popularly discussed regarding Senate Bill S.1501, the American Job Creation and Investment Promotion Reform Act of 2015. Here are six of those things you may not know, but should.

The bill contains a proposal to establish an “EB-5 Integrity Fund.” The money in the fund would be used to finance Department of Homeland Security audits of Regional Center operations. The genius of the fund is that the money in it would come entirely from the Regional Centers themselves in the form of a $20,000 annual fee. The bill contains a proposal to allow for as many as 90% of the jobs created in an EB-5 project to be indirect. However, 50% of all the jobs created must within the project’s TEA. The bill contains a proposal that would limit the credit for jobs created by capital invested from sources other than EB-5. EB-5 investors would receive only 30% credit for those jobs deemed to have been created by other investors. While it is fairly well known that the bill proposes to redefine TEA’s to areas consisting of a single census tract, it is less well understood that the bill also proposes that the tract must have an unemployment rate that is 150% of the national average. (Opinion: While this proposal is based on good intentions, the published unemployment rate has little or no correlation to the number of unwillingly unemployed, which may be several times greater.) The bill contains a proposal that closed military bases may be considered TEAs. The bill contains a proposal for a set-aside of 5,000 EB-5 visas exclusively for TEAs. – See more at: