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The program is positioned in a really odd and non-helpful administrative place for the stimulation of worldwide financial investment in the United States. Second, its range is all wrong. We are handing out too much for also little of an investment. Further, raising equity capital fifty percent a million bucks a tranche is, to say the least, inefficient.


The local centers, with their half-million plans, essentially damaged the more reasonable million-dollar component of the EB-5 program. Third, such programs, if we have them whatsoever, as they perform in Australia, need to be regarding developing company entities, not easy financial investments. It ought to be about developing actual jobs, not clarify calculations about the indirect development of jobs, which is currently component of the regulation.


Possibly that is just one of the factors why it has actually failed every year to get to the legislative objective of 10,000 financial investment visas. Fifth, the Regional Facility Program is naturally clumsy, and the program is too loaded with intermediaries, both public and private. The program has more than its share of scandals, which I will enter later on if anybody is interested.


This is a firm that enjoys to claim yes to applicants, but as the table in my statement reveals, USCIS officers have a lot more difficulty with EB-5 applications than others. I believe that is something that nobody has truly spoken about much. EB5 Regional Center Program. There are high rates of internal denials in this program and for great factor

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Seventh, in this program visas go to individuals who can not get them otherwise and to people whose scheduled financial investment is really much less, according to the Federal Book, than the ordinary mean internet worth of all American family members in 2007. Let me increase on among my observations.


My price quote based upon the financiers' copyright applications submitted 2 years after the first financial investment-- these are the strong ones that remain and are accepted. This is 2009-- was that they had about $191 million validated-- that is my quote. USCIS does not supply the sort of information that we could utilize on this.


So for each $100 of boosted international investment that year, the EB program added one penny. Under a a lot more wobbly analytical base, the initial applications of prospective immigrant investors, USCIS is informing journalists that the level of investment in the just-concluded year had to do with $1.2 billion. Allow us approve that.

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Thank you for listening to me. I expect your comments and inquiries. [The prepared declaration of David North shows up as a submission for the record.] Chairman Leahy. Thanks. Our following witness is Robert Divine. He is a shareholder of Baker, Donelson, Bearman, Caldwell, and Berkowitz. He is the head of the company's migration technique team.




Divine functioned as Principal Counsel of the United States Citizenship and Immigration Solutions from July 2004 till November 2006, the year in which he was Performing Supervisor, and after that Performing Deputy Director. He has actually worked thoroughly with the EB-5 program in exclusive technique. He was elected, as I recognize, vice head of state of the Association to Invest in U.S.A., the national sector association of regional centers.


Divine, we are pleased to have you right here. Please go ahead, sir. DECLARATION OF ROBERT C. DIVINE, LAWYER, BAKER, DONELSON, BEARMAN, CALDWELL, AND BERKOWITZ, P.C., CHATTANOOGA, TENNESSEE, AND VICE PRESIDENT, BUY THE U.S.A. (IIUSA) Mr. Divine. Thanks, Mr. Chairman, Senator Grassley, and others. Thank you for having me.


At many, if all 10,000 ports were made use of, it would be 1 percent of the migration each year to the USA. It is not near that yet, however it is growing and obtaining toward that. Especially as USCIS, the firm that supervises the program, has been making the policies more clear and the processes a lot more logical and clear for the people that are organizing financial investments and for the financiers that are spending, more individuals have agreed and able to place effort and money right into the process to find great projects and create them, and after that a lot more capitalists have actually been ready to spend their cash and take the danger and make use of the cash to create the jobs that is the factor of the program.

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These projects do not wait around forever, and USCIS understands that and are attempting to speed the program, speed the procedure - EB5 Regional Center Program. That does not indicate that they are unwinding their analysis, and, actually, they are prepared to deny applications that are not certifying. And they do so, as was discussed


The regional center part of the program is not. It becomes part of an appropriations bill that was enacted in 1992, and ever since that program has actually been prolonged 5 times for 19 years. It is time for it to be long-term, and it requires to be done now and not nearer to the date of expiration in September.


The process takes a good while to develop a project and after that to obtain the investors accepted. And they do here not want their cash streaming through till they have actually been accepted. And the specter of the expiry of this Regional Facility Program in September is already inhibiting the growth of projects.

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I want to clear up that the Regional Center Program is not the same as the half-million-dollar point. The idea of half a million or a million is a function of the regular EB-5 regulation that is component of the code. It simply is a reality that the majority of the local facilities that are pooling financial investments have actually established those in places of high unemployment or in backwoods where fifty percent- million-dollar investments are enabled, and that makes good sense.