On September 14, 2011, the House of Representatives' Subcommittee on Immigration Policy and Enforcement held a hearing on the EB-5 investor visa program. House Judiciary Committee Chairman Lamar Smith (R-Tex.) opened the hearing by declaring that the "number one job of Congress is to create jobs." He said the investor visa program plays a part in achieving that goal. "The regional center pilot project, which is almost two decades old, has become the most used part of the investor visa program," Rep. Smith noted. "Investment through a regional center is attractive to potential investors because they are relieved of the responsibility of running a new business and they can count indirect job creation towards the job creation requirement." He said that the Association to Invest in the USA "has estimated that the regional center program has created or saved over 65,000 jobs in the U.S. and has led to the investment of over $3 billion in the U.S. economy," and noted that the program is set to expire on September 30, 2012. Rep. Smith said the hearing would focus on how to continue bringing entrepreneurs to the U.S. while rooting out fraud and abuse.
Witnesses included William Stenger, President and Chief Executive Officer, Jay Peak Resort, Vermont; Daniel Healy, Chief Executive Officer, Civitas Capital Group, Texas; Jason Mendelson, Managing Director, Foundry Group, Colorado; and Shervin Pishevar, Managing Director, Menlo Ventures, California.
Mr. Stenger suggested that:
- Congress should make the EB-5 program permanent so regional centers can concentrate on quality, long-term job-creating programs. He said that short-term extensions cripple its effectiveness because projects cannot plan correctly and potential investors do not have confidence due to the uncertainty.
- U.S. Citizenship and Immigration Services (USCIS) should make every effort to be as efficient as possible with EB-5 case processing so that predictability can become a program asset instead of a program concern.
- Premium processing should be allowed for EB-5 cases desiring it.
- Regional center projects should be provided with a Business Plan Review and pre-approval before an I-526 submission takes place. Once an agreed-upon business plan is approved, it should not be revisited unless there is a substantial change.
Mr. Healy also discussed the "exemplar" process, which refers to the ability of a regional center manager to obtain pre-approval for a project business plan before coordinating investors' submissions of hundreds of individual petitions. "It is vitally important that this process be streamlined and that decisions by USCIS be final and not subject to reinterpretation by USCIS in the context of an individual investor's I-526 petition," he said.
Mr. Healy shared his personal experience with relying on an approved exemplar petition, which cost $6,230 to submit and took eight months to adjudicate, only to have investors receive requests for evidence (RFEs) "on issues that should have been addressed at the exemplar stage." He said the process "must be reformed, standardized and streamlined so that it serves its intended purpose: eliminating uncertainty for regional centers and individual investors with respect to a particular project's compliance with EB-5 requirements, leaving only factors related to the individual investor to be adjudicated at the I-526 stage."
Mr. Pishevar shared his own success story as an immigrant entrepreneur, and said that reforming the legal immigration process "so that highly motivated, well-intentioned immigrant entrepreneurs who want to grow their businesses in America must be a Congressional priority." He also said that "growing bipartisan support for the Startup Visa proposal is indeed promising." Passing legislation encompassing much-needed reform would be a clear win for both sides of the aisle and Members of Congress need to do all that they can to break this logjam." Mr. Pishevar noted that "this is not a Republican issue or a Democratic issue. It is an American competitiveness issue where there is a clear opportunity to create jobs and foster innovation here."
Rep. Smith's statement and the statements of the witnesses are available here.