Legislation introduced in the U.S. Senate earlier this year could result in a significant, negative economic impact to many mid-sized cities and suburbs, according to the EB-5 Investment Coalition, a group of trade associations and business leaders.
The American Job Creation and Investment Promotion Reform Act of 2015, known as S.1501, was introduced in June and is currently under consideration by the Senate Judiciary Committee. The bill could restrict the economic benefits of the EB-5 Immigrant Investor Program by limiting Targeted Employment Areas to just one census tract of land.
Pending EB-5 Legislation Would Disqualify Many Areas
Under the proposed legislation, many areas that currently are categorized as a TEA would not qualify, according to The National Law Review. The bill also shifts responsibility for designating TEAs from individual states to the federal Department of Homeland Security.
As the law currently stands, a TEA is defined as an area that is rural or that has unemployment of at least 150 percent of the national average. The proposed bill retains similar wording but changes the definition of a “high unemployment area” from a metropolitan statistical area or a county to a single census tract with an unemployment rate of at least 150 percent of the average unemployment rate nationally. The new legislation also would expand the definition of a TEA to include areas within the bounds of military installations that the government has closed in the past 20 years.
Potential Economic Effects
The revised definition of a TEA to one census tract would negatively affect cities and suburbs where most Americans live, notes the EB-5 Investment Coalition. For example, in the Dallas-Fort Worth area of Texas, 2,658 tracts currently qualify for TEA designation. Under the proposed law, only 258 would qualify. In the Salt Lake City, Provo-Orem and St. George metropolitan statistical areas of Utah, the number of qualified tracts would drop from 387 to 23.
To Learn More About S. 1501, Consult a Qualified EB-5 Attorney
The legislation under consideration in the U.S. Senate adds to the complexity of EB-5 considerations. For assistance in understanding how the potential changes to the EB-5 Immigrant Investor Program may affect you, consult with an experienced EB-5 attorney. Visit the website of David Hirson & Partners, LLP, or call (949) 383-5358.