[House Report 110-698]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 110-698
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TO EXTEND FOR 5 YEARS THE EB-5 REGIONAL CENTER PILOT PROGRAM
_______
June 5, 2008.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Conyers, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 5569]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 5569) to extend for 5 years the EB-5 regional center
pilot program, having considered the same, report favorably
thereon without amendment and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for the Legislation.......................... 2
Hearings......................................................... 3
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 3
New Budget Authority and Tax Expenditures........................ 4
Congressional Budget Office Cost Estimate........................ 4
Performance Goals and Objectives................................. 5
Constitutional Authority Statement............................... 5
Advisory on Earmarks............................................. 5
Section-by-Section Analysis...................................... 5
Changes in Existing Law Made by the Bill, as Reported............ 5
Purpose and Summary
H.R. 5569 reauthorizes the EB-5 Immigrant Investor Pilot
Program for regional centers for 5 years, until September 30,
2013.
Background and Need for the Legislation
Congress created the fifth employment-based preference (EB-
5) immigrant visa category in 1990 for immigrants seeking to
enter the United States to invest in a commercial enterprise
that will benefit the U.S. economy and create at least 10 full-
time jobs.\1\ The basic amount required to be invested is $1
million, although that amount can be reduced to $500,000 if the
investment is made in a rural or high unemployment area.\2\
Approximately 10,000 visas are available in this green card
category each year.
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\1\Immigration and Nationality Act, Sec. 203(b)(5), 8 U.S.C.
Sec. 1153(b)(5) (2007).
\2\Immigration and Nationality Act, Sec. 203(b)(5)(C)(ii), 8 U.S.C.
Sec. 1153(b)(5)(C)(ii) (2007).
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Since its inception, the EB-5 category has been
underutilized. For example, in FY 2007, a total of only 806
investors and family members immigrated to the United States in
the EB-5 category.\3\ This still represented a high for the
program, however, and evidences the fact that interest and
participation in the EB-5 program has increased significantly
over the past several years. Unofficial estimates indicate that
the EB-5 immigrant investor program is projected to achieve,
during the current year, an annual rate of $1 billion in
aggregate immigrant investment, with more than 20,000 new
direct and indirect jobs created annually.
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\3\Department of Homeland Security, Yearbook of Immigration
Statistics: 2007, at http://www.dhs.gov/ximgtn/statistics/publications/
LPR07.shtm (table 7).
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To help further encourage immigration through the EB-5
category, Congress created a temporary pilot program in
1993.\4\ The Immigrant Investor Pilot Program allocates 3,000
visas each year for EB-5 investors who invest in ``designated
regional centers.'' The pilot program has been renewed several
times, and is currently due to expire September 30, 2008.\5\
H.R. 5569 would extend the EB-5 regional center pilot program
for 5 years, until September 30, 2013.
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\4\Departments of Commerce, Justice, and State, the Judiciary, and
Related Agencies Appropriations Act of 1993, Pub. L. No. 102-395,
Sec. 610, 106 Stat. 1874 (1992), 8 U.S.C. Sec. 1153 note (2007).
\5\Basic Pilot Program Extension and Expansion Act of 2003, Pub. L.
No. 108-156, Sec. 4(b), 117 Stat. 1945 (2003) (extending EB-5 pilot
program 5 years to Sept. 30, 2008).
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An investment under the EB-5 pilot program must be made in
a commercial enterprise located within a ``regional center,''
defined as ``any economic unit, public or private, which is
involved with the promotion of economic growth, including
increased export sales, improved regional productivity, job
creation, or increased domestic capital investment.''\6\
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\6\8 C.F.R. Sec. 204.6(e).
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A regional center seeking approval must submit a proposal
showing how it plans to focus on a geographical region within
the United States. The proposal must show ``in verifiable
detail how jobs will be created,'' along with the amount and
source of capital committed and the promotional efforts made
and planned.\7\ There are approximately 19 active approved
regional centers today, and at least 20 other applications for
regional center designation are pending.
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\7\8 C.F.R. Sec. 204.6(m)(3).
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U.S. Citizenship and Immigration Services (USCIS) is
currently stepping up its review of new regional center
applications and increasing oversight of existing regional
centers to ensure that the EB-5 program grows in a responsible
way. In a recent advisory letter to a regional center, USCIS
outlined 17 types of information that approved regional centers
must track to keep their regional center designation.\8\
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\8\Letter from USCIS Foreign Trader, Investor & Regional Center
Program to Metropolitan Milwaukee Association of Commerce (June 12,
2007).
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Assuming a regional center application has been approved,
an applicant seeking EB-5 status under the pilot program must
make the qualifying investment (i.e., the amount of money
required under the regular EB-5 program) within an approved
regional center. The requirement of creating at least 10 new
jobs, however, is met by a showing that as a result of the new
enterprise, such jobs will be created directly or indirectly.
In 2003, Congress asked the U.S. Government Accountability
Office (GAO) to study the EB-5 program. The GAO concluded that
the program had been under-utilized--for a variety of reasons.
It found, however, that even though few people have used the
EB-5 category, EB-5 participants have invested an estimated $1
billion in a variety of U.S. businesses.\9\
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\9\U.S. Government Accountability Office, No. GAO-05-256,
``Immigrant Investors: Small Number of Participants Attributed to
Pending Regulations and Other Factors'' (Apr. 2005), at http://
www.gao.gov/new.items/d05256.pdf.
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To help further the purposes of the EB-5 program, the
Committee recommends that, to the extent practicable,
qualifying investments under the pilot program should be made
in targeted employment areas, as defined in section
203(b)(5)(B)(ii) of the Immigration and Nationality Act,\10\
These should include rural areas, i.e., areas other than an
area within a metropolitan statistical area or within the outer
boundary of any city or town having a population of 20,000 or
more (based on the most recent decennial census of the United
States). And they should also include high-unemployment areas,
i.e. areas that have experienced unemployment of at least 150
percent of the national average rate.
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\10\8 U.S.C. Sec. 1153(b)(5)(B)(ii) (2007).
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Hearings
The Committee on the Judiciary held no hearings on H.R.
5569.
Committee Consideration
On March 12, 2008, the Subcommittee on Immigration,
Citizenship, Refugees, Border Security, and International Law
met in open session and ordered the bill, H.R. 5569, favorably
reported, without amendment, by voice vote, a quorum being
present. On April 2, 2008, the Committee met in open session
and ordered the bill, H.R. 5569, favorably reported, without
amendment, by voice vote, a quorum being present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that there
were no recorded votes during the Committee's consideration of
H.R. 5569.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 5569, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 9, 2008.
Hon. John Conyers, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5569, a bill to
extend for 5 years the EB-5 regional center pilot program.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark
Grabowicz, who can be reached at 226-2860.
Sincerely,
Peter R. Orszag,
Director.
Enclosure
cc:
Honorable Lamar S. Smith.
Ranking Member
H.R. 5569--A bill to extend for 5 years the EB-5 regional center pilot
program.
CBO estimates that implementing H.R. 5569 would have no
significant cost to the Federal Government. Enacting the bill
could affect direct spending, but CBO estimates that any such
effects would not be significant in any year. In addition, we
estimate that enacting H.R. 5569 would increase revenues by
less than $500,000 a year. H.R. 5569 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act and would not affect the budgets
of State, local, or tribal governments.
Current law authorizes 3,000 immigrant visas each year
under the EB-5 regional center pilot program for investors and
entrepreneurs meeting certain criteria. This pilot program will
expire on September 30, 2008, and H.R. 5569 would extend the
program for 5 years.
The Department of State charges a $45 security surcharge
for such visas and, depending on the type of petition, may
charge additional fees for fingerprinting or affidavits of
support. In addition, the Department of Homeland Security (DHS)
collects a fee of $1,435 to process visa applications submitted
by applicants for the pilot program. All of those fees are
classified as offsetting collections (for the Department of
State) or offsetting receipts (for DHS) and are retained and
spent by the departments. CBO estimates that the net budgetary
effect of those increased collections and related spending
would be less than $500,000 a year.
The Department of State also collects fees from persons who
apply for such visas from overseas. Under current law, an
application fee of $355 per person is charged by the department
and deposited in the Treasury as a revenue. Based on
participation in the pilot program in recent years, CBO
estimates that the department would process fewer than 1,000
persons annually and that enacting H.R. 5569 would increase
revenues by less than $500,000 a year.
The CBO staff contacts for this estimate are Mark Grabowicz
(for DHS's costs), who can be reached at 226-2860, and Sunita
D'Monte (for the Department of State's costs), who can be
reached at 226-2840. This estimate was approved by Theresa
Gullo, Deputy Assistant Director for Budget Analysis.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
5569 will extend for 5 years the EB-5 regional center pilot
program.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8, clause 4 of the
Constitution.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 5569 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Sec. 1. Extension of EB-5 Regional Center Pilot Program.
This section extends the EB-5 Regional Center Pilot Program by
5 years, until September 30, 2013.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
SECTION 610 OF THE DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE
JUDICIARY, AND RELATED AGENCIES APPROPRIATIONS ACT, 1993
Sec. 610. Pilot Immigration Program.--(a) * * *
(b) For purposes of the pilot program established in
subsection (a), beginning on October 1, 1992, but no later than
October 1, 1993, the Secretary of State, together with the
Secretary of Homeland Security, shall set aside 3,000 visas
annually [for 15 years] for 20 years to include such aliens as
are eligible for admission under section 203(b)(5) of the
Immigration and Nationality Act and this section, as well as
spouses or children which are eligible, under the terms of the
Immigration and Nationality Act, to accompany or follow to join
such aliens.
* * * * * * *