While the EB-5 Immigrant Investor Program is administered by the federal government through the United States Citizenship and Immigration Services (“USCIS”), state agencies also play an important role in the EB-5 process. The default level of investment to participate in the EB-5 program is $1 million; however, that investment may be decreased to $500,000 if it is deployed in a new commercial enterprise located within a Targeted Employment Area (“TEA”). A TEA is defined as either a rural area or “an area which has experienced unemployment of at least 150% of the national average rate.” This is where states often step in. Specifically, 8 C.F.R. § 204.6(j)(6)(ii)(B) provides that in order for a particular geographic area to be conferred TEA designation—and thereby enjoy a lower threshold for EB-5 investment capital—an authorized body of state government of the state in which the new commercial enterprise is located may issue a letter to the potential investor that certifies that the geographic or political subdivision of the metropolitan statistical area in which the enterprise is principally doing business has been designated a high unemployment area. The potential investor then submits this state designation along with his or her I-526 petition. Please note that the ultimate determination of qualifying as a TEA still rests with USCIS.
California is a very popular state for EB-5 investment. In California, EB-5 program administration falls under the purview of the Governor’s Office of Business and Economic Development, colloquially called GO-Biz. GO-Biz is responsible for designating areas as TEAs and the agency even posts a non-exhaustive list of high unemployment areas within the state. Indeed, the agency announced that an updated complete list of census tracts with unemployment figures for 2014 was set to be released at 5:00 pm PDT on May 6, 2015, thereby replacing the 2013 figures that were used for making TEA determinations up to that date.
Also on May 6, 2015, the state’s Committee on Appropriations debated mild changes to the administration of the EB-5 program within the state (Assembly Bill 826, introduced by Representative Ed Chau). Specifically, AB 826, which seeks to highlight “the importance of foreign and domestic investors in the state’s economic growth,” defines “regional center” as an entity designated by USCIS for the purpose of pooling EB-5 capital from multiple foreign investors in economic development projects in a defined geographic area. The bill additionally requires GO-Biz to include a link to the website of each regional center operating within the state on its official webpage – both a user-friendly development as well as one in line with a general trend of taking steps to secure program compliance. Naturally, the Committee also considered fiscal appropriations necessary to operate the program within the state, where, according to Rep. Chau, EB-5 investment accounted for $6.5 billion in capital investment and contributed to over 131,000 jobs during fiscal years 2005-2013.
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