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One-Off Regional Centers and Why They Must Be Stopped!
By Joseph P. Whalen (Thursday, September 29, 2016)
In t...
Page 2 of 3
I.N.S. was primarily a law enforcement agency including an almost military
component in the Border Patrol. Adj...
Page 3 of 3
limited use, is counter to its intended role. In the authorizing statute, Congress
used forward-looking langua...
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One Off Regional Centers and Why They Must Be Stopped!

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One Off Regional Centers and Why They Must Be Stopped!

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One Off Regional Centers and Why They Must Be Stopped!

  1. 1. Page 1 of 3 One-Off Regional Centers and Why They Must Be Stopped! By Joseph P. Whalen (Thursday, September 29, 2016) In this author’s opinion, One-Off Regional Centers1 (One-Offs) run afoul of, and counter to, the Congressional Intent for the EB-5 Regional Center Program. When Congress revised the law in an effort to increase utilization of the employment-based, fifth-preference “employment creation” visa classification, it created a “pilot program” and designated the “Regional Center” as a focal point for concentrating pooled investments in defined economic zones in limited geographic regions of the United States. Congress added this “pilot program” through separate legislation outside of the Immigration and Nationality Act (INA) but it is codified alongside it in the United States Code, as a note. 8 U.S.C. §1153 is the equivalent of INA § 203 Allocation of Immigrant Visas, therefore we find the Regional Center authorization codified as 8 U.S.C. §1153 Note: Immigration Program. §610, paragraphs (a) and (c) are crucial to understanding the program. Pub. L. 102–395, title VI, §610, Oct. 6, 1992, 106 Stat. 1874, as amended: (a) Of the visas otherwise available under section 203(b)(5) of the Immigration and Nationality Act (8 U.S.C. 1153(b)(5)), the Secretary of State, together with the Secretary of Homeland Security, shall set aside visas for a program to implement the provisions of such section. Such program shall involve a regional center in the United States, designated by the Secretary of Homeland Security on the basis of a general proposal, for the promotion of economic growth, including increased export sales, improved regional productivity, job creation, or increased domestic capital investment. A regional center shall have jurisdiction over a limited geographic area, which shall be described in the proposal and consistent with the purpose of concentrating pooled investment in defined economic zones. The establishment of a regional center may be based on general predictions, contained in the proposal, concerning the kinds of commercial enterprises that will receive capital from aliens, the jobs that will be created directly or indirectly as a result of such capital investments, and the other positive economic effects such capital investments will have. * * * * * (c) In determining compliance with section 203(b)(5)(A)(iii)[(ii)] of the Immigration and Nationality Act [8 U.S.C. 1153(b)(5)(A)(iii)[(ii)]], and notwithstanding the requirements of 8 CFR 204.6,2 the Secretary of Homeland Security shall permit aliens admitted under the program described in this section to establish reasonable methodologies for determining the number of jobs created by the program, including such jobs which are estimated to have been created indirectly through revenues generated from increased exports, improved regional productivity, job creation, or increased domestic capital investment resulting from the program. As directed, the agency promulgated regulations reshaping the EB-5 program and integrating the new component known as a Regional Center. Those regulations were originally written by the predecessor agency to USCIS. Legacy 1 See: http://www.slideshare.net/BigJoe5/the-single-project-regional-center-is-as-bad-as-the-inept-no-deference-regional-center 2 As they existed on October 6, 1992.
  2. 2. Page 2 of 3 I.N.S. was primarily a law enforcement agency including an almost military component in the Border Patrol. Adjudications were less important in the corporate culture within Legacy I.N.S. and that attitude is still reflected in the bulk of the implementing regulations. The EB-5 regulations have been in need of revisions for years and the agency has stated that they are working on it. As presently constituted, here is what they say about applying for Regional Center designation. As is evident, the official to whom the “proposal” must be submitted is an obsolete title and there is now an application form, something that was not created and implemented until the program was seventeen (17) years old. 8 C.F.R. §204.6 Petitions for employment creation aliens. * * * * * (m) Immigrant Investor Pilot Program— * * * * * (3) Requirements for regional centers. Each regional center wishing to participate in the Immigrant Investor Pilot Program shall submit a proposal to the Assistant Commissioner for Adjudications, which: (i) Clearly describes how the regional center focuses on a geographical region of the United States, and how it will promote economic growth through increased export sales, improved regional productivity, job creation, and increased domestic capital investment; (ii) Provides in verifiable detail how jobs will be created indirectly through increased exports; (iii) Provides a detailed statement regarding the amount and source of capital which has been committed to the regional center, as well as a description of the promotional efforts taken and planned by the sponsors of the regional center; (iv) Contains a detailed prediction regarding the manner in which the regional center will have a positive impact on the regional or national economy in general as reflected by such factors as increased household earnings, greater demand for business services, utilities, maintenance and repair, and construction both within and without the regional center; and (v) Is supported by economically or statistically valid forecasting tools, including, but not limited to, feasibility studies, analyses of foreign and domestic markets for the goods or services to be exported, and/or multiplier tables. Congress authorized a “program” which, according to Merriam-Webster’s 2016, online dictionary, is “a plan or system under which action may be taken toward a goal”. The regulations pertaining to the requirements for Regional Centers, use enough forward-looking and generalized language to demonstrate that the regulatorily defined “Program” is intended to ongoing. Therefore, the creation of an EB-5 Regional Center for an intentionally short period for highly
  3. 3. Page 3 of 3 limited use, is counter to its intended role. In the authorizing statute, Congress used forward-looking language in the “how to” portion of §610(a): “…The establishment of a regional center may be based on general predictions, contained in the proposal, concerning the kinds of commercial enterprises that will receive capital from aliens, the jobs that will be created directly or indirectly as a result of such capital investments, and the other positive economic effects such capital investments will have.” It appears clear that Congress wanted the Regional Center to direct its efforts in pooling investments to help create and/or expand multiple commercial enterprises. They also stated that they expected there to be multiple investments. The preceding two expectations coupled with future tense verbs clearly implies that the Regional Center is expected to replicate its efforts in an ongoing effort. In addition, Congress called their new component a “Regional Center”. The regulations expand on this theme in stating that the Regional Center needs to focus on “…a geographical region of the United States…” It is not too much of a stretch to state that Congress implicitly intended that a Regional Center is expected to become a lasting new addition to the regional economic infrastructure. The successful Regional Center will regularly join together with developers, construction companies, architects, contractors, banks, and others who are regular components of the regional economic infrastructure. It is also not too much of a stretch to state that Congress implicitly intended that Regional Centers are not to be formed merely as a means of obtaining cheap financing for one project. To allow that short-sighted approach would be a subversion, perversion, and gross manipulation of Congress’ intent for the EB-5 Regional Center Program. It is for all the foregoing reasons, and more, that the concept of the One-Off Regional Center must be halted in its tracks, decried, and denounced from every corner of the EB-5 stakeholder community. That’s my two-cents, for now!

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