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[House Report 110-698]
[From the U.S. Government Publishing Office]

110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-698

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      TO EXTEND FOR 5 YEARS THE EB-5 REGIONAL CENTER PILOT PROGRAM

                                _______
                                

  June 5, 2008.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Conyers, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 5569]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 5569) to extend for 5 years the EB-5 regional center 
pilot program, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
New Budget Authority and Tax Expenditures........................     4
Congressional Budget Office Cost Estimate........................     4
Performance Goals and Objectives.................................     5
Constitutional Authority Statement...............................     5
Advisory on Earmarks.............................................     5
Section-by-Section Analysis......................................     5
Changes in Existing Law Made by the Bill, as Reported............     5

                          Purpose and Summary

    H.R. 5569 reauthorizes the EB-5 Immigrant Investor Pilot 
Program for regional centers for 5 years, until September 30, 
2013.

                Background and Need for the Legislation

    Congress created the fifth employment-based preference (EB-
5) immigrant visa category in 1990 for immigrants seeking to 
enter the United States to invest in a commercial enterprise 
that will benefit the U.S. economy and create at least 10 full-
time jobs.\1\ The basic amount required to be invested is $1 
million, although that amount can be reduced to $500,000 if the 
investment is made in a rural or high unemployment area.\2\ 
Approximately 10,000 visas are available in this green card 
category each year.
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    \1\Immigration and Nationality Act, Sec. 203(b)(5), 8 U.S.C. 
Sec. 1153(b)(5) (2007).
    \2\Immigration and Nationality Act, Sec. 203(b)(5)(C)(ii), 8 U.S.C. 
Sec. 1153(b)(5)(C)(ii) (2007).
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    Since its inception, the EB-5 category has been 
underutilized. For example, in FY 2007, a total of only 806 
investors and family members immigrated to the United States in 
the EB-5 category.\3\ This still represented a high for the 
program, however, and evidences the fact that interest and 
participation in the EB-5 program has increased significantly 
over the past several years. Unofficial estimates indicate that 
the EB-5 immigrant investor program is projected to achieve, 
during the current year, an annual rate of $1 billion in 
aggregate immigrant investment, with more than 20,000 new 
direct and indirect jobs created annually.
---------------------------------------------------------------------------
    \3\Department of Homeland Security, Yearbook of Immigration 
Statistics: 2007, at http://www.dhs.gov/ximgtn/statistics/publications/
LPR07.shtm (table 7).
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    To help further encourage immigration through the EB-5 
category, Congress created a temporary pilot program in 
1993.\4\ The Immigrant Investor Pilot Program allocates 3,000 
visas each year for EB-5 investors who invest in ``designated 
regional centers.'' The pilot program has been renewed several 
times, and is currently due to expire September 30, 2008.\5\ 
H.R. 5569 would extend the EB-5 regional center pilot program 
for 5 years, until September 30, 2013.
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    \4\Departments of Commerce, Justice, and State, the Judiciary, and 
Related Agencies Appropriations Act of 1993, Pub. L. No. 102-395, 
Sec. 610, 106 Stat. 1874 (1992), 8 U.S.C. Sec. 1153 note (2007).
    \5\Basic Pilot Program Extension and Expansion Act of 2003, Pub. L. 
No. 108-156, Sec. 4(b), 117 Stat. 1945 (2003) (extending EB-5 pilot 
program 5 years to Sept. 30, 2008).
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    An investment under the EB-5 pilot program must be made in 
a commercial enterprise located within a ``regional center,'' 
defined as ``any economic unit, public or private, which is 
involved with the promotion of economic growth, including 
increased export sales, improved regional productivity, job 
creation, or increased domestic capital investment.''\6\
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    \6\8 C.F.R. Sec. 204.6(e).
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    A regional center seeking approval must submit a proposal 
showing how it plans to focus on a geographical region within 
the United States. The proposal must show ``in verifiable 
detail how jobs will be created,'' along with the amount and 
source of capital committed and the promotional efforts made 
and planned.\7\ There are approximately 19 active approved 
regional centers today, and at least 20 other applications for 
regional center designation are pending.
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    \7\8 C.F.R. Sec. 204.6(m)(3).
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    U.S. Citizenship and Immigration Services (USCIS) is 
currently stepping up its review of new regional center 
applications and increasing oversight of existing regional 
centers to ensure that the EB-5 program grows in a responsible 
way. In a recent advisory letter to a regional center, USCIS 
outlined 17 types of information that approved regional centers 
must track to keep their regional center designation.\8\
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    \8\Letter from USCIS Foreign Trader, Investor & Regional Center 
Program to Metropolitan Milwaukee Association of Commerce (June 12, 
2007).
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    Assuming a regional center application has been approved, 
an applicant seeking EB-5 status under the pilot program must 
make the qualifying investment (i.e., the amount of money 
required under the regular EB-5 program) within an approved 
regional center. The requirement of creating at least 10 new 
jobs, however, is met by a showing that as a result of the new 
enterprise, such jobs will be created directly or indirectly.
    In 2003, Congress asked the U.S. Government Accountability 
Office (GAO) to study the EB-5 program. The GAO concluded that 
the program had been under-utilized--for a variety of reasons. 
It found, however, that even though few people have used the 
EB-5 category, EB-5 participants have invested an estimated $1 
billion in a variety of U.S. businesses.\9\
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    \9\U.S. Government Accountability Office, No. GAO-05-256, 
``Immigrant Investors: Small Number of Participants Attributed to 
Pending Regulations and Other Factors'' (Apr. 2005), at http://
www.gao.gov/new.items/d05256.pdf.
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    To help further the purposes of the EB-5 program, the 
Committee recommends that, to the extent practicable, 
qualifying investments under the pilot program should be made 
in targeted employment areas, as defined in section 
203(b)(5)(B)(ii) of the Immigration and Nationality Act,\10\ 
These should include rural areas, i.e., areas other than an 
area within a metropolitan statistical area or within the outer 
boundary of any city or town having a population of 20,000 or 
more (based on the most recent decennial census of the United 
States). And they should also include high-unemployment areas, 
i.e. areas that have experienced unemployment of at least 150 
percent of the national average rate.
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    \10\8 U.S.C. Sec. 1153(b)(5)(B)(ii) (2007).
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                                Hearings

    The Committee on the Judiciary held no hearings on H.R. 
5569.

                        Committee Consideration

    On March 12, 2008, the Subcommittee on Immigration, 
Citizenship, Refugees, Border Security, and International Law 
met in open session and ordered the bill, H.R. 5569, favorably 
reported, without amendment, by voice vote, a quorum being 
present. On April 2, 2008, the Committee met in open session 
and ordered the bill, H.R. 5569, favorably reported, without 
amendment, by voice vote, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that there 
were no recorded votes during the Committee's consideration of 
H.R. 5569.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 5569, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 9, 2008.
Hon. John Conyers, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5569, a bill to 
extend for 5 years the EB-5 regional center pilot program.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz, who can be reached at 226-2860.
            Sincerely,
                                           Peter R. Orszag,
                                                  Director.

Enclosure

cc:
        Honorable Lamar S. Smith.
        Ranking Member
H.R. 5569--A bill to extend for 5 years the EB-5 regional center pilot 
        program.
    CBO estimates that implementing H.R. 5569 would have no 
significant cost to the Federal Government. Enacting the bill 
could affect direct spending, but CBO estimates that any such 
effects would not be significant in any year. In addition, we 
estimate that enacting H.R. 5569 would increase revenues by 
less than $500,000 a year. H.R. 5569 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act and would not affect the budgets 
of State, local, or tribal governments.
    Current law authorizes 3,000 immigrant visas each year 
under the EB-5 regional center pilot program for investors and 
entrepreneurs meeting certain criteria. This pilot program will 
expire on September 30, 2008, and H.R. 5569 would extend the 
program for 5 years.
    The Department of State charges a $45 security surcharge 
for such visas and, depending on the type of petition, may 
charge additional fees for fingerprinting or affidavits of 
support. In addition, the Department of Homeland Security (DHS) 
collects a fee of $1,435 to process visa applications submitted 
by applicants for the pilot program. All of those fees are 
classified as offsetting collections (for the Department of 
State) or offsetting receipts (for DHS) and are retained and 
spent by the departments. CBO estimates that the net budgetary 
effect of those increased collections and related spending 
would be less than $500,000 a year.
    The Department of State also collects fees from persons who 
apply for such visas from overseas. Under current law, an 
application fee of $355 per person is charged by the department 
and deposited in the Treasury as a revenue. Based on 
participation in the pilot program in recent years, CBO 
estimates that the department would process fewer than 1,000 
persons annually and that enacting H.R. 5569 would increase 
revenues by less than $500,000 a year.
    The CBO staff contacts for this estimate are Mark Grabowicz 
(for DHS's costs), who can be reached at 226-2860, and Sunita 
D'Monte (for the Department of State's costs), who can be 
reached at 226-2840. This estimate was approved by Theresa 
Gullo, Deputy Assistant Director for Budget Analysis.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
5569 will extend for 5 years the EB-5 regional center pilot 
program.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8, clause 4 of the 
Constitution.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 5569 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
    Sec. 1. Extension of EB-5 Regional Center Pilot Program. 
This section extends the EB-5 Regional Center Pilot Program by 
5 years, until September 30, 2013.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

  SECTION 610 OF THE DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE 
        JUDICIARY, AND RELATED AGENCIES APPROPRIATIONS ACT, 1993

  Sec. 610. Pilot Immigration Program.--(a)  * * *
  (b) For purposes of the pilot program established in 
subsection (a), beginning on October 1, 1992, but no later than 
October 1, 1993, the Secretary of State, together with the 
Secretary of Homeland Security, shall set aside 3,000 visas 
annually [for 15 years] for 20 years to include such aliens as 
are eligible for admission under section 203(b)(5) of the 
Immigration and Nationality Act and this section, as well as 
spouses or children which are eligible, under the terms of the 
Immigration and Nationality Act, to accompany or follow to join 
such aliens.

           *       *       *       *       *       *       *

                                  
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