In a move that Civitas and the entire industry believes will help the EB-5 program flourish for decades to come, two senators, Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vermont), recently introduced the bi-partisan EB-5 Integrity and Reform Bill. Civitas joins the EB-5 industry in fully supporting the passage of this bill.
However, the political noise around the mechanics of the bill’s passage has understandably concerned EB-5 investors and potential investors. We’d like to calm those fears. Let’s look at what is happening, and then we’ll explain why Civitas believes the bill will ultimately pass – making the EB-5 program stronger than ever.
The Reform Bill now before Congress has bi-partisan support because it is narrow in scope and would be effective in helping the industry restart its growth. Primarily, the bill, championed by senators Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vermont), instills integrity reforms into the regional center program and provides the program with a stabilizing long-term five-year reauthorization.
More specifically, the bill:
- protects good-faith investors like yourself;
- protects lawfully operating regional centers and new commercial enterprises;
- provides reasonable Congressional oversight while allowing the industry’s business operations to continue.
Civitas believes these are sound, vital integrity reforms in a workable environment. Our firm has worked behind the scenes for years with the major players in this ongoing political battle – including the EB-5 industry advocacy group IIUSA (of which our CEO, Dan Healy, is a longtime board member), as well as our own Washington, D.C.-based lobbying group dealing directly with congressional staff responsible for shaping this bill. We are fully vested in the passage of this Reform Bill, as we have long maintained that integrity reform is crucial to the continued success of the EB-5 program.
The concern many current and potential investors have is that the bill must still be voted into law. In the meantime, the current EB-5 regional center program was reauthorized only to June 30, 2021. This has led to some in the industry offering doomsday scenarios that Congress will take no action and ultimately let the entire program die on that date.
Civitas does not share this view. Although Congressional action can never be predicted with 100 percent certainty – as recent events have made clear, irrational actors exist in our government, and are often rewarded with television airtime – we believe most in Congress will be swayed by the undeniable facts underlying the EB-5 program. Since the EB-5 program began, more than $41 billion in direct investment has been injected into the U.S. economy – at no cost to U.S. taxpayers. If we know one thing about politicians, they do not leave money on the table.
Civitas is confident that either the Leahy-Grassley bill or a clean, short-term extension will pass before the June 30 expiration. (There have been times in the program’s history when EB-5 was effectively “shut down” for a short period before politicians came to their senses.) We believe the lobbying efforts of the industry, business leaders, and other stakeholders will be successful.
In the meantime, there will be an unfortunate but steady stream of information reaching investors and potential investors. We ask that if you have any questions, please Email us at [email protected]. If our position changes, we will be transparent with you and let you know.
We thank you for your faith in Civitas and the EB-5 program. We look forward to working together for many years to come.