EB-5 Reauthorization bill - What is the big picture?
Webinar on June 24, 2015 titled: Implications of the Grassley Leahy Bill
Discussion w/ Ron Klasko, Angelo Paparelli, John Tishler, Ozvaldo Torres and Michael Kester
评论参加者：Ron Klasko、Angelo Paparelli、John Tishler、Ozvaldo Torres和Michael Kester
Angelo Paparell: What is the big picture here? What is this bill going to do to the industry? There's a restriction on the amount of capital that can be raised from non-EB5 funds; there are disclosure requirements and the tax return submission requirements are now 7 years.
What are these changes going to do to the industry? Some have suggested that USCIS is now authorized to hire more expensive staff to review these applications and petitions. But what if the industry dries up because there isn't a big enough appetite and other nations offer more attractive citizenship or residency options. I'd like some predictions on where we're going.
Ron&难民服nbsp;Klasko: I think there are two key parts to this bill that if they were enacted in their present form would at the very least do very serious harm to the EB5 industry and render many and possibly most present projects unable to use EB5 money.
First is the&nb宿世的期盼春暖花开sp;TEA&nbs法拉利458,美国出资移民EB-5再授权提案的关键,梁静茹p;provision. There's a very clear rural vs. urban aspect to this bill. The two sponsoring senators are both from rural states and this bill clearly favors rural states, which is one of the reasons that many of the senators from non-rural states are not going along with it.
Basically what it would say is that the only thing that is a TEA and the only thing that prevents the investment amount from going from $500,000 to $1,200,000 is if you're a rural area or a single census track, high-unemployment area. I have a whole bunch of economists who've been looking at this and probably more than 90% of the present urban projects that are TEA’s using census track aggregation are not currently in a census&nbs石头花园的歌女p;track with an unemployment rate of 150% of the national average, and this is because the concept of census track aggregation, using contiguous census tracks, takes&n主犯陈文辉bsp;into account where the workers are coming from and the commuting distance concept.张继科趴地动作走红
If you eliminate that as this bill does and only allow single 苏妤陆历承census track TEAs, virtually no urban project would be in a TEA. You’d have to assess the value of the program when the minimum investment is going up 140%.
The other thing that will have a very serious effect on the EB5 industry is vast changes in what counts for job&n李芸蓁bsp;creation. If you put them together, many of the existing projects today would have very little job creation that would count and many if not most of the projects today would not be able to use EB5 in the future.
There's three differ法拉利458,美国出资移民EB-5再授权提案的关键,梁静茹ent aspects to the changes in the job creation. There's a 90/10 rule, a 50/50 rule and there's a 30/70 rule.
1.The 90/10 rule says, that at least 10% of the total jobs that you can count for EB5 must be direct jobs. The way I read the language of this bill is it says it has to be direct jobs of the commercial enterprise (NCE), which in most cases is the lending company which never has any jobs to speak of. Well let’s say what they really meant and if they amend the language what it's going to say would be, well it can be W2 jobDATCs of the job creating enterprise or the borrower in the lending model. Well that's okay, but in most of the projects that are successful in today's marketplace, most of the jobs are construction jobs, which from an immigration point of view are indirect jobs of the job creating enterpri法拉利458,美国出资移民EB-5再授权提案的关键,梁静茹se (JCE). The language would then have to be amended to allow for direct construction jobs, which are not W2 employees of the job creating enterprise. That's a mess. Unless that's changed, it would render most projects no longer approvable.
2.The 30/70 provision in the bill that many of us who have read many times don't completely understand but what it seems to say is that if a project does not have mostly EB5 money in the capital stack, it’s going to have very severe limitations&nb法拉利458,美国出资移民EB-5再授权提案的关键,梁静茹sp;on the number of jobs that can be counted. If EB5 money is not more than 70% of the capital stack, then the job count is limited. There may be a limitation that only 30% or less of the&nb纳豆网校sp;jobs that presently count for EB5 would count if this bill were to become the law. This clearly favors projects that are mostly or solely EB5 money in the capital stack, which is exactly the opposite of what's marketable in China in today's market, which are big projects where there's a lot of developer money in and EB5 is a smaller part of the capital stack.
3.The 50/50 changes to the job creation, which may have a little bit less effect is a determination of whether the jobs that are created can be created outside the TEA. Basically what it says is that if a project is in a TEA and the TEA is in a&nbs法拉利458,美国出资移民EB-5再授权提案的关键,梁静茹p;metropolitan statistical area (MSA) or a CSA, then 50% of the jobs must be in the MSA or CSA. If the project is not in an MSA or a CSA, then 50% of the jobs must be in the same or adjacent county. This clearly limits a projects that has indirect and induced jobs that are not in the local area.
You put those three changes of counting job creation together, along with the reduction in what would be TEAs, and the impact on the EB5 industry would be very, very, very substantial. The good news is that the chances of all of that happening, certainly from&nbs郑恩智p;the involvement I've had in the advocacy of this in Washington, are not very good. I think there is a lot of opposition.
Doug Edwards, EB-5MA
Hi Kurt and Folks,
I had responded to your request for comment last week concerning the Leahy-Rural Tea response. Which agreed with this week's comment by Ron Klasko. We've been in the creative TEA sector of&n法拉利458,美国出资移民EB-5再授权提案的关键,梁静茹bsp;our industry for 6 years or more. Let me suggest an even more ominous possibility for those virtually non existent one-census tract TEAs. Even if the TEA is realized as conforming to the original census tract sharing precepts of TEA creation, mathematically, the chances are very great that the single census tract will be more volatile and thus more apt to be forced out of said TEA status (unless Grandfathered) due to changing economic factors within a small geographic area. Meaning, those projects originally granted TEA status would soo熟成蘑菇ner or later lose the required unemployment rate that originally was granted. This would make it virtually untenable for any legitimate developer to wait then understand that they might lose the TEA designation during the raise period. Not Good! Could make this program look like a sad imitation of what the Program has overcome during the past 25 years. WOW! * There is so much more to discuss but the obvious problems that have been exacerbated are looking ominous for our industry.
Peace to all
EB-5 Jobs For Massachusetts RC