Law360, New York (December 2, 2015, 10:52 AM EST) -- Changes to the EB-5 Immigrant Investor Program — the massively popular, yet controversial foreign investor program — are currently being considered in Congress. While Congress passed a short-term extension for the EB-5 Regional Center Program through Dec. 11, 2015, a comprehensive EB-5 reform package will likely be considered prior to the end of the calendar year; a number of bills have been introduced. This article provides a short overview of the existing program and then considers potential changes that may be implemented in the reform package.   The Existing Program   Created by the Immigration Act of 1990, EB-5 is administered by the United States Citizenship and Immigration Services. This program offers a path to a green card for foreign investors in exchange for a substantial investment that results in job creation. The program attracts foreign capital by facilitating conditional permanent resident status for foreign investors, their spouses, and dependents, by making a minimum contribution of $1 million, or $500,000 if the project is located in a targeted employment area (TEA). Since 2008, the EB-5 program has generated $11.92 billion in foreign direct investment. There is a 10,000 visa annual cap for this program; this limit includes spouses and dependents.   To qualify, the investment must fund a new or troubled for-profit commercial U.S. enterprise that creates at least 10 full-time positions. The funds must also be legally obtained and cannot be borrowed. All EB-5 investments are subject to state securities regulations and U.S. Securities and Exchange Commission regulations. Moreover, the investment must be "at risk," meaning that the investor cannot be guaranteed a return on any portion of the investment. Most investors engage in this process through the EB-5 Regional Center Program. These centers, private and public entities, propose large development programs for foreign national investment. Congress passed a short-term renewal of the regional center program in September 2015, with the extension lasting through Dec. 11, 2015.   While this program has existed since 1990, it grew significantly during the recent recession when more traditional types of capital were difficult to secure. In 2014, 10,928 EB-5 applications were sought, surpassing the 10,000 annual visa program limit. This limit includes principal applicants, their spouses, and dependent children under 21 years old. More than 80 percent of the applications were from mainland China. The number of visas approved also increased from 802 visas in 2006 to 10,692 visas in 2014. More than 85 percent of the approved visas went to Chinese investors in 2014.   Debated Changes   As the popularity of the program has grown, so has its potential abuse. A recent Government Accountability Office report indicated that the USCIS does not have an adequate process to detect and assess actual economic benefit or risk of fraud. The report also highlighted the absence of a verification process for reported financial information and lack of visibility regarding the foreign money origination. As of May 2015, USCIS had 59 EB-5 investigations open, primarily involving either securities fraud or criminal activity related to money laundering, national security and immigration fraud. To combat these abuses, while also continuing this successful program, Congress is considering a number of significant changes.   Visa Changes   A number of visa changes are under consideration. The growing number of applications is putting pressure on Congress to make the program more accessible to qualified applicants. One bill would increase the total visa limit, now set to 10,000. Another proposal suggests counting only the principal applicant towards the visa limit instead of counting both the applicant and family members, while another bill suggests removing individual country visa limits. Finally, another bill would require that a majority of the total visa limit be set aside for investment in TEA areas.   Increased Oversight and Enforcement   The majority of the bills being considered include some kind of additional oversight or enforcement. For instance, a bipartisan bill, introduced by Senators Chuck Grassley and Patrick Leahy, would implement new reporting and compliance requirements for regional centers and increase U.S. Department of Homeland Security authority over the program to deny or terminate applications. As well as the additional oversight, the bill also provides an expedited business plan approval process and increased disclosure to investors.   Other bills also call for increased oversight and enhancements, including stopping people with recent fraud violations from holding certain positions at regional centers and requiring background checks for regional center employees.   Modification of the Investment Requirement   Another consideration is the minimum investment requirement. A number of the bills increase the investment threshold from $500,000 to $800,000 in TEA areas and $1 million to $1.2 million in non-TEA areas; another bill requires $1 million in TEA areas and $2 million in non-TEA areas. A change of any kind would be the first minimum increase since the initial act was passed in 1990.   TEA Designation   Most of the bills also modify the TEA area designation. A house bill requires that TEA area designation be based on a U.S. Department of Labor determination of geographic boundary of high unemployment areas, with the Department of Homeland Security having ultimate discretion. These modifications come amidst backlash against high-end project use of this designation. For instance, a 900-foot condominium tower on "Billionaire's Row" near New York's Central Park qualified for the TEA area designation after project managers "gerrymandered" the project location to include a low-income part of Manhattan.   Another bill modifies the TEA designation to only be valid for five years, subject to renewal. The bill would also set aside at least 5,000 visas for immigrants whose investments went to TEA locations.   Permanent Regional Center Program   Finally, all of the proposed bills either make permanent or extend the regional center program. This would allow potential investors and regional centers to more fully rely on this structure for future use. As noted above, the additional oversight and enforcement would provide the much-needed restructuring to stop potential fraud and criminal activity.   Conclusion   While it is unclear what Congress will eventually adopt, it is likely that some reform will take place given the impending regional center program deadline. It is further likely, given the high profile abuses of the program, that further reform will be implemented, for the better of the entire program....