BILL ANALYSIS �
AB 1067
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1067 (Medina) - As Amended: April 18, 2013
Policy Committee: JEDE Vote:7-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill codifies the state's participation in the federal
investment visa program by establishing the California Foreign
Investment Program within the Governor's Office of Business and
Economic Development (GO-Biz). Specifically, this bill:
1)Specifies that GO-Biz shall serve as the lead state entity for
overseeing the state's participation with the U.S. Citizenship
and Immigration Services' EB-5 Investment Program.
2)Provides that, among other duties, GO-Biz shall set the terms
and conditions for issuing a state designation letter for
Targeted Employment Areas (TEAs).
FISCAL EFFECT
Administrative costs to GO-Biz of approximately $100,000 to
implement this program.
COMMENTS
1)Purpose: According to the author, 10,000 EB-5 investment visas
are authorized for issuance each year to potential immigrants
who make new investments in the U.S. The author notes,
historically, the annual allocation of 10,000 EB-5 visas is
not fully utilized, although usage is growing. According to
the author, in 2009 nearly 4,300 investors obtained EB-5
visas, compared to only hundreds in 2007. The author argues
the state cannot afford to miss out on the economic benefits
that foreign investment provides and that implementing a
robust EB-5 program in the state will continue to create jobs,
introduce new technology and research, and contribute to
AB 1067
Page 2
rising productivity.
2)Background. Created as a pilot program in 1990, the EB-5
Investment Program is designed to stimulate the U.S. economy
through immigrant investors. The name EB-5 is derived from
the fact that it is the 5th category of an Employment-Based
visa. Under the U.S. Citizenship and Immigration Service
(USCIS) administered 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. These enterprises may be 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 create full-time employment for at least 10
qualified individuals, or maintain the number of existing
employees in a troubled business. For investors who choose to
invest in TEAs, the required investment is decreased to
$500,000. TEAs are small towns, rural areas or urban areas
with an unemployment rate of at least 150% of the national
average rate. Investments made in a TEA require certification
that the area qualifies as a TEA. GO-Biz currently issues
these certification letters.
Among other requirements, EB-5 Investment Program applicants
must demonstrate they meet all requirements of the program
prior to filing with the USCIS. If it is determined the
investment criteria is met and properly documented, any
investor may be granted conditional permanent residence status
for a period of two years by USCIS. A permanent green card
may be issued at the end of the conditional period.
3)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081