EB–5 Reform and Integrity Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 2901 To reauthorize the EB–5 Regional Center Program in order to prevent fraud and to promote and reform foreign capital investment and job creation in American communities. IN THE HOUSE OF REPRESENTATIVES APRIL 28, 2021 Mr. STANTON (for himself and Mr. FITZPATRICK) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To reauthorize the EB–5 Regional Center Program in order to prevent fraud and to promote and reform foreign capital investment and job creation in American commu- nities. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘EB–5 Reform and In- 4 tegrity Act of 2021’’. 5 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 2901 IH SEC. 2. REAUTHORIZATION AND REFORM OF THE RE- 1 GIONAL CENTER PROGRAM. 2 (a) REPEAL.—Section 610 of the Departments of 3 Commerce, Justice, and State, the Judiciary, and Related 4 Agencies Appropriations Act, 1993 (8 U.S.C. 1153 note) 5 is repealed. 6 (b) AUTHORIZATION.—Section 203(b)(5) of the Im- 7 migration and Nationality Act (8 U.S.C. 1153(b)(5)) is 8 amended by adding at the end the following: 9 ‘‘(E) REGIONAL CENTER PROGRAM.— 10 ‘‘(i) IN GENERAL.—Visas under this 11 paragraph shall be made available through 12 September 30, 2026, to qualified immi- 13 grants (and the eligible spouses and chil- 14 dren of such immigrants) pooling their in- 15 vestments with 1 or more qualified immi- 16 grants participating in a program imple- 17 menting this paragraph that involves a re- 18 gional center in the United States, which 19 has been designated by the Secretary of 20 Homeland Security on the basis of a pro- 21 posal for the promotion of economic 22 growth, including prospective job creation 23 and increased domestic capital investment. 24 ‘‘(ii) PROCESSING.—In processing pe- 25 titions under section 204(a)(1)(H) for clas- 26 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 2901 IH sification under this paragraph, the Sec- 1 retary of Homeland Security— 2 ‘‘(I) may process petitions in a 3 manner and order established by the 4 Secretary; and 5 ‘‘(II) shall deem such petitions to 6 include records previously filed with 7 the Secretary pursuant to subpara- 8 graph (F) if the alien petitioner cer- 9 tifies that such records are incor- 10 porated by reference into the alien’s 11 petition. 12 ‘‘(iii) ESTABLISHMENT OF A RE- 13 GIONAL CENTER.—A regional center shall 14 operate within a defined, contiguous, and 15 limited geographic area, which shall be de- 16 scribed in the proposal and be consistent 17 with the purpose of concentrating pooled 18 investment within such area. The proposal 19 to establish a regional center shall dem- 20 onstrate that the pooled investment will 21 have a substantive economic impact on 22 such geographic area, and shall include— 23 ‘‘(I) reasonable predictions, sup- 24 ported by economically and statis- 25 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 2901 IH tically valid and transparent fore- 1 casting tools, concerning the amount 2 of investment that will be pooled, the 3 kinds of commercial enterprises that 4 will receive such investments, details 5 of the jobs that will be created di- 6 rectly or indirectly as a result of such 7 investments, and other positive eco- 8 nomic effects such investments will 9 have; 10 ‘‘(II) a description of the policies 11 and procedures in place reasonably 12 designed to monitor new commercial 13 enterprises and any associated job- 14 creating entity to seek to ensure com- 15 pliance with— 16 ‘‘(aa) all applicable laws, 17 regulations, and executive orders 18 of the United States, including 19 immigration laws, criminal laws, 20 and securities laws; and 21 ‘‘(bb) all securities laws of 22 each State in which securities of- 23 ferings will be conducted, invest- 24 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 2901 IH ment advice will be rendered, or 1 the offerors or offerees reside; 2 ‘‘(III) attestations and informa- 3 tion confirming that all persons in- 4 volved with the regional center meet 5 the requirements under clauses (i) 6 and (ii) of subparagraph (H); 7 ‘‘(IV) a description of the policies 8 and procedures in place that are rea- 9 sonably designed to ensure program 10 compliance; and 11 ‘‘(V) the identities of all natural 12 persons involved in the regional cen- 13 ter, as described in subparagraph 14 (H)(v). 15 ‘‘(iv) INDIRECT JOB CREATION.— 16 ‘‘(I) IN GENERAL.—The Sec- 17 retary of Homeland Security shall 18 permit aliens seeking admission under 19 this subparagraph to satisfy only up 20 to 90 percent of the requirement 21 under subparagraph (A)(ii) with jobs 22 that are estimated to be created indi- 23 rectly through investment under this 24 paragraph in accordance with this 25 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 2901 IH subparagraph. An employee of the 1 new commercial enterprise or job-cre- 2 ating entity may be considered to hold 3 a job that has been directly created. 4 ‘‘(II) CONSTRUCTION ACTIVITY 5 LASTING LESS THAN 2 YEARS.—If the 6 jobs estimated to be created are cre- 7 ated by construction activity lasting 8 less than 2 years, the Secretary shall 9 permit aliens seeking admission under 10 this subparagraph to satisfy only up 11 to 75 percent of the requirement 12 under subparagraph (A)(ii) with jobs 13 that are estimated to be created indi- 14 rectly through investment under this 15 paragraph in accordance with this 16 subparagraph. 17 ‘‘(v) COMPLIANCE.— 18 ‘‘(I) IN GENERAL.—In deter- 19 mining compliance with subparagraph 20 (A)(ii), the Secretary of Homeland Se- 21 curity shall permit aliens seeking ad- 22 mission under this subparagraph to 23 rely on economically and statistically 24 valid methodologies for determining 25 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 2901 IH the number of jobs created by the pro- 1 gram, including— 2 ‘‘(aa) jobs estimated to have 3 been created directly, which may 4 be verified using such methodolo- 5 gies; and 6 ‘‘(bb) consistent with this 7 subparagraph, jobs estimated to 8 have been directly or indirectly 9 created through capital expendi- 10 tures, revenues generated from 11 increased exports, improved re- 12 gional productivity, job creation, 13 and increased domestic capital 14 investment resulting from the 15 program. 16 ‘‘(II) JOB AND INVESTMENT RE- 17 QUIREMENTS.— 18 ‘‘(aa) RELOCATED JOBS.— 19 In determining compliance with 20 the job creation requirement 21 under subparagraph (A)(ii), the 22 Secretary of Homeland Security 23 may include jobs estimated to be 24 created under a methodology that 25 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 2901 IH attributes jobs to prospective ten- 1 ants occupying commercial real 2 estate created or improved by 3 capital investments if the number 4 of such jobs estimated to be cre- 5 ated has been determined by an 6 economically and statistically 7 valid methodology and such jobs 8 are not existing jobs that have 9 been relocated. 10 ‘‘(bb) PUBLICLY AVAILABLE 11 BONDS.—The Secretary of 12 Homeland Security shall pre- 13 scribe regulations to ensure that 14 alien investor capital may not be 15 utilized, by a new commercial en- 16 terprise or otherwise, to purchase 17 municipal bonds or any other 18 bonds, if such bonds are available 19 to the general public, either as 20 part of a primary offering or 21 from a secondary market. 22 ‘‘(cc) CONSTRUCTION ACTIV- 23 ITY JOBS.—If the number of di- 24 rect jobs estimated to be created 25 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 2901 IH has been determined by an eco- 1 nomically and statistically valid 2 methodology, and such direct 3 jobs are created by construction 4 activity lasting less than 2 years, 5 the number of such jobs that 6 may be considered direct jobs for 7 purposes of clause (iv) shall be 8 calculated by multiplying the 9 total number of such jobs esti- 10 mated to be created by the frac- 11 tion of the 2-year period that the 12 construction activity lasts. 13 ‘‘(vi) AMENDMENTS.—The Secretary 14 of Homeland Security shall— 15 ‘‘(I) require a regional center— 16 ‘‘(aa) to notify the Sec- 17 retary, not later than 120 days 18 before the implementation of sig- 19 nificant proposed changes to its 20 organizational structure, owner- 21 ship, or administration, including 22 the sale of such center, or other 23 arrangements which would result 24 in individuals not previously sub- 25 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 2901 IH ject to the requirements under 1 subparagraph (H) becoming in- 2 volved with the regional center; 3 or 4 ‘‘(bb) if exigent cir- 5 cumstances are present, to pro- 6 vide the notice described in item 7 (aa) to the Secretary not later 8 than 5 business days after a 9 change described in such item; 10 and 11 ‘‘(II) adjudicate business plans 12 under subparagraph (F) and petitions 13 under section 204(a)(1)(H) during 14 any notice period as long as the 15 amendment to the business or petition 16 does not negatively impact program 17 eligibility. 18 ‘‘(vii) RECORD KEEPING AND AU- 19 DITS.— 20 ‘‘(I) RECORD KEEPING.—Each 21 regional center shall make and pre- 22 serve, during the 5-year period begin- 23 ning on the last day of the Federal 24 fiscal year in which any transactions 25 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 2901 IH occurred, books, ledgers, records, and 1 other documentation from the regional 2 center, new commercial enterprise, or 3 job-creating entity used to support— 4 ‘‘(aa) any claims, evidence, 5 or certifications contained in the 6 regional center’s annual state- 7 ments under subparagraph (G); 8 and 9 ‘‘(bb) associated petitions by 10 aliens seeking classification under 11 this section or removal of condi- 12 tions under section 216A. 13 ‘‘(II) AUDITS.—The Secretary 14 shall audit each regional center not 15 less frequently than once every 5 16 years. Each such audit shall include a 17 review of any documentation required 18 to be maintained under subclause (I) 19 for the preceding 5 years and a review 20 of the flow of alien investor capital 21 into any capital investment project. 22 To the extent multiple regional cen- 23 ters are located at a single site, the 24 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 2901 IH Secretary may audit multiple regional 1 centers in a single site visit. 2 ‘‘(III) TERMINATION.—The Sec- 3 retary shall terminate the designation 4 of a regional center that fails to con- 5 sent to an audit under subclause (II) 6 or deliberately attempts to impede 7 such an audit. 8 ‘‘(F) BUSINESS PLANS FOR REGIONAL 9 CENTER INVESTMENTS.— 10 ‘‘(i) APPLICATION FOR APPROVAL OF 11 AN INVESTMENT IN A COMMERCIAL EN- 12 TERPRISE.—A regional center shall file an 13 application with the Secretary of Home- 14 land Security for each particular invest- 15 ment offering through an associated new 16 commercial enterprise before any alien files 17 a petition for classification under this 18 paragraph by reason of investment in that 19 offering. The application shall include— 20 ‘‘(I) a comprehensive business 21 plan for a specific capital investment 22 project; 23 ‘‘(II) a credible economic analysis 24 regarding estimated job creation that 25 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 13 •HR 2901 IH is based upon economically and statis- 1 tically valid and transparent meth- 2 odologies; 3 ‘‘(III) any documents filed with 4 the Securities and Exchange Commis- 5 sion under the Securities Act of 1933 6 (15 U.S.C. 77a et seq.) or with the 7 securities regulator of any State, as 8 required by law; 9 ‘‘(IV) any investment and offer- 10 ing documents, including subscription, 11 investment, partnership, and oper- 12 ating agreements, private placement 13 memoranda, term sheets, biographies 14 of management, officers, directors, 15 and any person with similar respon- 16 sibilities, the description of the busi- 17 ness plan to be provided to potential 18 alien investors, and marketing mate- 19 rials used, or drafts prepared for use, 20 in connection with the offering, which 21 shall contain references, as appro- 22 priate, to— 23 ‘‘(aa) all material invest- 24 ment risks associated with the 25 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 14 •HR 2901 IH new commercial enterprise and 1 the job-creating entity; 2 ‘‘(bb) any conflicts of inter- 3 est that currently exist or may 4 arise among the regional center, 5 the new commercial enterprise, 6 the job-creating entity, or the 7 principals, attorneys, or individ- 8 uals responsible for recruitment 9 or promotion of such entities; 10 ‘‘(cc) any pending material 11 litigation or bankruptcy, or mate- 12 rial adverse judgments or bank- 13 ruptcy orders issued during the 14 most recent 10-year period, in 15 the United States or in another 16 country, affecting the regional 17 center, the new commercial enter- 18 prise, any associated job-creating 19 entity, or any other enterprise in 20 which any principal of any of the 21 aforementioned entities held ma- 22 jority ownership at the time; and 23 ‘‘(dd)(AA) any fees, ongoing 24 interest, or other compensation 25 VerDate Sep 11 2014 19:49 Jun 18, 2021 Jkt 019200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H2901.IH H2901 pbinns on DSKJLVW7X2PROD with BILLS 15 •HR 2901 IH p [Text truncated for display. 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