Insights on the April 13th Senate Committee on the Judiciary Hearing
by Kristen Ng , Laura Foote Reiff and Matthew Virkstis
The Senate Judiciary Committee held a hearing titled “ The Distortion of EB-5 Targeted Employment Areas : Time to End the Abuse ” on April 13 , 2016 , convened by Chairman Charles Grassley . The hearing consisted of two panels : one member panel that included Representative Bob Goodlatte , Representative John Conyers , and Representative Mark Amodei ; and one witness panel that included representatives from the following organizations : Daniel Healy from Civitas Capital Group ; Timothy Whipple from the Iowa Economic Development Authority ; Peter Joseph from Invest in the USA ( IIUSA ), and Gary Friedland from New York University .
Senators John Cornyn , Jeff Flake , Thom Tillis , Patrick Leahy , Charles Schumer , Amy Klobuchar , and Richard Blumenthal were present at the hearing and asked thoughtful questions regarding both Targeted Employment Areas ( TEAs ) and minimum investment amounts . Chairman Grassley began the hearing by discussing the changes he believes are needed to determine TEA designation so as to not disadvantage rural areas in the United States . Senator Leahy agreed in his opening statement that reform is much needed . Senator Leahy discussed the bicameral , bipartisan proposal introduced at the end of the first session of the 114th Congress that addressed the need for reform , not only with regard to integrity measures , but also to give incentives for investing in rural and economically disadvantaged areas .
The Members on the first witness panel discussed the need for reform . Representative Goodlatte focused on the need for TEA reform as it relates to minimum investment amounts . Representative Conyers discussed legislative intent as it applies to TEAs and urged Congress to change the rules to disallow the manipulation of TEAs that some have criticized . Representative Amodei focused his testimony on the benefits of the EB-5 program and recognized the need for reform , stating that the EB-5 Integrity Act , which he co-introduced , would address many concerns .
The second witness panel , consisting of representatives of the EB-5 industry , all agreed that reform was needed for the EB-5 program . Specifically , Healy ( Civitas Capital Group ) encouraged Congress to enact reforms to TEA policy , and proposed using alternative metrics to determine TEAs , such as poverty rates and median income levels . Whipple ( Iowa Economic Development Authority ) called for reform to current TEA policy so that rural areas such as Iowa can compete with urban areas for EB-5 investment , suggesting that 20 percent of visas should be reserved for true TEAs . Joseph ( IIUSA ) recognized the EB-5 program for its growth and contribution to the U . S . economy . He noted that there is a diverse set of interests in the EB-5 industry , but that ultimately reforms are necessary , and that visa numbers are a consistent issue as demand keeps growing . Friedland
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