BILL ANALYSIS Ó
SCR 33
Page 1
SENATE THIRD READING
SCR 33 (Price)
As Introduced April 4, 2011
Majority vote
SENATE VOTE :33-1
ECONOMIC DEVELOPMENT 4-2
-----------------------------------------------------------------
|Ayes:|V. Manuel Pérez, Beall, | | |
| |Block, Hueso | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Grove, Morrell | | |
| | | | |
-----------------------------------------------------------------
SUMMARY : Expresses the sentiment of the Legislature that it is
in California's economic interest to promote opportunities for
using the federal EB-5 investment visa program in the state.
Among other findings and declarations, Legislative intent states
the following:
1)The economic downturn has led to higher unemployment in
California and has limited access to credit and investment for
California businesses.
2)Greater foreign investment would create jobs and improve the
state's economy.
3)Many foreign investors see California as a desirable place to
invest and reside.
COMMENTS :
According to the author, "SCR 33 touts the merits of the EB-5
visa program and the critical role that foreign investment can
play in California's economic recovery and economic viability.
Promoting EB-5 investment opportunities in the state will bring
an influx of money to California projects, which will in turn
create job opportunities for thousands of displaced workers
seeking employment."
SCR 33
Page 2
EB-5 Investment Program : The EB-5 investment program is
administered by the United States (U.S.) Citizenship and
Immigration Service (USCIS) pursuant to the federal Immigration
Act of 1990. The term "EB-5 " comes from it being the fifth
category of employment-based visas issued by the USCIS.
Under the program, permanent-resident status is available to
foreign investors who have invested - or are actively in the
process of investing - at least $1 million into a new commercial
enterprise. Eligible enterprises can entail: the creation of
an original business; the purchase of an existing business and
restructuring or reorganizing the business to the extent that a
new commercial enterprise results; or, a significant expansion
of an existing business.
An applicant seeking status as an immigrant investor must
demonstrate that his or her investment will benefit the U.S.
economy and either create full-time employment for at least ten
qualified individuals or maintain the number of existing
employees in a troubled business. For investors who choose to
invest in economically targeted employment areas (TEAs), the
required investment is decreased to $500,000. A TEA is either a
rural area or an area that has experienced an unemployment rate
of at least 150% of the national average rate.
Based on 2010 state figures and a high unemployment rate defined
as 14.4% or greater, 56 cities, 13 counties, 21 rural areas, and
11 metropolitan statistical areas in California have been
identified as eligible TEAs. In addition to individual
investors, the federal government can also recognize regional
centers which allows for a pooling of investor money. There are
at least 31 federally-recognized regional centers currently
operating in California, significantly more than any other
state. These regional centers are located across the state.
Their focuses vary widely, and include commercial real estate
development, agricultural products, film projects, and high-tech
ventures.
Ten thousand EB-5 investment visas are authorized for issuance
each year to potential immigrants that make new investments in
the U.S. Historically, the annual allocation of 10,000 EB-5
visas are not fully utilized, although usage is growing. In
2009, close to 4,300 investors obtained EB-5 visas as compared
to only hundreds in 2007.
SCR 33
Page 3
EB-5 Success Stories : According to information provided by the
author, there are many examples of areas and developments that
have benefited from foreign investment through the EB-5 visa
program, most especially as businesses routinely cite access to
capital as a roadblock to successful development of new or
growth of existing ventures. According to a recent article in
the Sacramento Bee, there are now close to15,000 people who work
at the recently renovated McClellan Business Park, a residential
and industrial development at the former McClellan Air Force
Base. The park closed in 2001, resulting in the loss of some
12,000 jobs in the region. The transformation was completed
with the help of $18 million invested by 36 immigrants from
China, Mexico and an array of other countries who received EB-5
visas.
Nationally, the state of Vermont is home to one of the largest
success stories of the EB-5 investment program. The New York
Times and National Public Radio (NPR) both reported extensively
on a ski resort that was able to expand from seasonal winter
recreation to a year-round resort after raising nearly $200
million dollars from foreign investors (South Africa, Sweden,
Canada, Mexico and England). The entire state of Vermont is now
recognized as a regional center called the Vermont Agency of
Community Development, which focuses on bringing foreign
investment to the tourism, manufacturing, professional services,
and education and information publishing industries in the
state. The state formally markets and promotes the availability
of EB-5 status to gain foreign investment and is a model for
state involvement in securing this type of money. On its Web
site, Vermont publicizes a swift approval process for projects,
state oversight of projects and activities to assure compliance
with U.S. Immigration Law, and hands-on involvement by Vermont
elected officials, including the Governor and Congressional
delegation.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0001588
SCR 33
Page 4