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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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Photo of Laura Foote Reiff ‡ Laura Foote Reiff ‡

Laura Foote Reiff has more than 32 years of experience representing businesses and organizations in the business immigration and compliance field. She is also a business immigration advocate and has long chaired prominent business immigration coalitions. Laura is Co-Founder of GT’s Business and

Laura Foote Reiff has more than 32 years of experience representing businesses and organizations in the business immigration and compliance field. She is also a business immigration advocate and has long chaired prominent business immigration coalitions. Laura is Co-Founder of GT’s Business and Immigration and Compliance Group which she co-led since 1999. She currently chairs the Northern Virginia/Washington D.C. Immigration and Compliance Practice. Laura is also Co-Managing Shareholder of the Northern Virginia Office of GT, a position she has held since 2010. As a global leader in the business immigration community, Laura has served on the Boards of the American Immigration Lawyers Association, the American Immigration Council, the National Immigration Forum and is currently the Chair of the America is Better Board.

Laura advises corporations on a variety of compliance-related issues, particularly related to Form I-9 eligibility 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 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.

Laura’s practice also consists of managing business immigration matters and providing immigration counsel to address the visa and work authorization needs of U.S. and global personnel including professionals, managers and executives, treaty investors/ traders, essential workers, persons of extraordinary ability, corporate trainees, and students. She is an immigration policy advocacy expert and works on immigration reform policies.

 Admitted in the District of Columbia and Maryland. Not admitted in Virginia. Practice limited to federal immigration practice.