Two members of Congress this week introduced bipartisan legislation to reauthorize and improve oversight of the EB-5 Regional Center Program, the federal job-creation and economic development program set to expire June 30.
“The reauthorization of the EB-5 program is critical to our nation’s economic growth and I look forward to this bill becoming law,” bill sponsor U.S. Rep. Greg Stanton (D-AZ) said on Thursday.
“As a longtime proponent of the EB-5 Regional Center Program, I’ve seen firsthand how the program has been a powerful tool for our nation’s economic development,” added U.S. Rep. Brian Fitzpatrick (R-PA), who on April 28 cosponsored the EB-5 Reform and Integrity Act of 2021 Act, H.R. 2901.
The EB-5 Regional Center Program was created by Congress in 1993 to attract investments from foreign individuals who meet specific capital and job creation requirements in exchange for a green card. While EB-5 investments have filled funding gaps and provided capital for local economic development projects, concerns have surfaced in recent years related to national security, as well as the program’s susceptibility to fraud and abuse.
In fact, a 2015 Government Accountability Office (GAO) report found a lack of rigorous oversight of the EB-5 Regional Center Program by the U.S. Department of Homeland Security’s (DHS) U.S. Citizenship and Immigration Services, which GAO said fails to analyze risks, continuously assess fraud, and accurately measure economic benefits.
“This bipartisan reauthorization represents Congress and the business community coming together to ensure communities across the country can continue to access capital for critical projects while increasing needed oversight and integrity measures to root out fraud and abuse,” said Fitzpatrick.
H.R. 2901, which is companion legislation to the same-named S. 831 introduced on March 18 by U.S. Sens. Chuck Grassley (R-IA) and Patrick Leahy (D-VT), would reauthorize the EB-5 Regional Center Program through 2026.
If enacted, the sweeping measure also would set more program transparency and integrity measures aimed at improving the accountability of applicants, regional centers and commercial projects, according to a bill summary provided by the lawmakers.
For instance, DHS would be required to conduct regular audits of the regional centers that sponsor EB-5 construction projects, and would be tasked with providing personal visits to such projects.
“We know the EB-5 program can attract foreign investment and create new jobs — lifting our economy and making us more globally competitive,” said Stanton, the former mayor of Phoenix, adding that the bill would address the “vulnerabilities the EB-5 program faced in the past, including integrity measures so that it functions as Congress intended.”
Specifically, among several provisions, the bill calls for regional centers, which oversee EB-5 projects, to have policies and procedures in place to protect against fraud; requires that regional centers file proposed EB-5 project business plans with DHS, including offering documents and marketing materials; and would require more disclosures to investors regarding material business risks and conflicts of interest in EB-5 projects, according to the lawmakers’ bill summary.
The measure has been endorsed by both the Coalition to Save and Create Jobs and Invest in the USA (IIUSA), the nonprofit trade association representing the EB-5 Regional Center Program.
“For years, members of Congress and the EB-5 community have agreed that the Regional Center Program needs added integrity reforms to achieve long-term reauthorization,” said IIUSA Executive Director Aaron Grau. “With less than 65 days to go before the current program expires, time is of the essence to turn this bill into law now and lay the groundwork for more program improvements in the future.”