[House Report 109-251]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-251

======================================================================



 
 TO RENDER NATIONALS OF DENMARK ELIGIBLE TO ENTER THE UNITED STATES AS 
                   NONIMMIGRANT TRADERS AND INVESTORS

                                _______
                                

October 18, 2005.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3647]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 3647) to render nationals of Denmark eligible to enter 
the United States as nonimmigrant traders and investors, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     1
Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Vote of the Committee............................................     3
Committee Oversight Findings.....................................     3
New Budget Authority and Tax Expenditures........................     3
Congressional Budget Office Cost Estimate........................     3
Performance Goals and Objectives.................................     4
Constitutional Authority Statement...............................     4
Section-by-Section Analysis and Discussion.......................     4
Changes in Existing Law Made by the Bill, as Reported............     5
Markup Transcript................................................     5

                             The Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. NONIMMIGRANT TRADERS AND INVESTORS FROM DENMARK.

  Denmark shall be considered, for purposes of section 101(a)(15)(E) of 
the Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(E)), to be a 
foreign state described in such section (other than clause (iii) of 
such section) if Denmark extends reciprocal nonimmigrant treatment to 
nationals of the United States.

                          Purpose and Summary

    H.R. 3647 would render nationals of Denmark eligible to 
enter the United States as nonimmigrant traders and investors.

                Background and Need for the Legislation

    ``E-2'' visas are nonimmigrant visas available for treaty 
investors. Under the Immigration and Nationality Act, a visa is 
available to an alien who is:

        entitled to enter the United States under and in 
        pursuance of the provisions of a treaty of commerce and 
        navigation between the United States and the foreign 
        state of which he is a national, and the spouse and 
        children of any such alien if accompanying or following 
        to join him . . . solely to develop and direct the 
        operations of an enterprise in which he has invested . 
        . . a substantial amount of capital. . . .\1\
---------------------------------------------------------------------------
    \1\ Section 101(a)(15)(E) of the Immigration and Nationality Act.

    Alien employees of a treaty investor may receive E-2 visas 
if they are coming to the U.S. ``to engage in duties of an 
executive or supervisory character, or, if employed in a lesser 
capacity, if they have special qualifications that make the 
services to be rendered essential to the efficient operation of 
the enterprise.'' \2\ There is no numerical cap on E-2 visas. 
An alien may be admitted initially for a period of two years, 
and can apply for extensions in two-year increments.\3\
---------------------------------------------------------------------------
    \2\ 22 C.F.R. sec. 41.51(c).
    \3\ See 8 C.F.R. sec. 214.2(e).
---------------------------------------------------------------------------
    The U.S. has entered into treaties of commerce containing 
language similar to the E-2 visas since at least 1815, when it 
entered into a Convention to Regulate Commerce with the United 
Kingdom. Currently, the nationals of 74 countries are eligible 
for E-2 status.\4\ In fiscal year 2003, 24,506 aliens 
(including dependents) were granted E-2 visas.
---------------------------------------------------------------------------
    \4\ See Foreign Affairs Manual sec. 41.51 Exhibit 1.
---------------------------------------------------------------------------
    Nationals of Denmark are already eligible for ``E-1'' 
(treaty trader) visas pursuant to the Treaty of Friendship, 
Commerce, and Navigation Between the United States and Denmark 
of October 1, 1951. The U.S. and Denmark signed a protocol to 
that treaty on May 2, 2001, that would grant Danes eligibility 
for E-2 visas.\5\ However, the Judiciary Committee has since 
made clear that all immigration provisions must be considered 
and enacted in accordance with the formal legislative process 
rather than be contained in trade agreements or treaties.\6\ 
This bill therefore would grant access to E-2 nonimmigrant visa 
status to nationals of Denmark.
---------------------------------------------------------------------------
    \5\ See Protocol to Treaty of Friendship, Commerce, and Navigation 
with Denmark, May 2, 2001, S. Treaty Doc. No. 108-8 (2003) (The 
protocol is currently before the Senate Foreign Affairs Committee.).
    \6\ See H.R. Rep. No. 108-224, pt. 2, at 46-47 (2003) (letter from 
F. James Sensenbrenner, Jr., and John Conyers to Ambassador Robert 
Zoellick).
---------------------------------------------------------------------------

                                Hearings

    The Committee on the Judiciary held no hearings on H.R. 
3647.

                        Committee Consideration

    On September 29, 2005, the Committee met in open session 
and ordered favorably reported the bill H.R. 3647 to the House 
with an amendment by a voice vote, a quorum being present.

                         Vote of the Committee

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee notes that there 
were no recorded votes during the Committee consideration of 
H.R. 3647.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to H.R. 3647, the following estimate and comparison 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 6, 2005.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3647, a bill to 
render nationals of Denmark eligible to enter the United States 
as nonimmigrant traders and investors.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz, who can be reached at 226-2860.
            Sincerely,
                                       Douglas Holtz-Eakin.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
H.R. 3647--A bill to render nationals of Denmark eligible to enter the 
        United States as nonimmigrant traders and investors.
    CBO estimates that enacting H.R. 3647 would result in no 
significant net cost to the Federal Government. The bill could 
affect direct spending, but we estimate that any net effects 
would be insignificant. H.R. 3647 contains no intergovernmental 
or private-sector mandates as defined in the Unfunded Mandates 
Reform Act and would not affect the budgets of state, local, or 
tribal governments.
    H.R. 3647 would permit nationals of Denmark to enter the 
United States temporarily as nonimmigrant investors or traders 
if Denmark extends reciprocal treatment to U.S. nationals. If 
such individuals apply for entry into the United States under 
the bill's provisions, the Bureau of Citizenship and 
Immigration Services (CIS) would charge a fee of $190 to 
adjudicate the application and the Department of State would 
charge a $100 fee to process machine-readable visas. Based on 
the number of Danish citizens who have entered the United 
States recently in nonimmigrant categories comparable to 
investors and traders, CBO expects that additional collections 
would not exceed $1 million annually. Both CIS and the 
Department of State are authorized to spend such fees without 
further appropriation, so the net impact on Federal spending in 
any year would not be significant.
    The CBO staff contact for this estimate is Mark Grabowicz, 
who can be reached at 226-2860. This estimate was approved by 
Peter H. Fontaine, Deputy Assistant Director for Budget 
Analysis.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
3647 would render nationals of Denmark eligible to enter the 
United States as nonimmigrant traders and investors.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in art. I, Sec. 8, cl. 4 of the Constitution.

               Section-by-Section Analysis and Discussion

        SEC. 1. NONIMMIGRANT TRADERS AND INVESTORS FROM DENMARK.

    This section provides that Denmark should be considered to 
be a foreign state described in section 101(a)(15)(E) of the 
Immigration and Nationality Act (other than in regards to 
clause (iii)) if Denmark extends reciprocal treatment to 
nationals of the U.S. Clauses (i) and (ii) of section 
101(a)(15)(E) provide nonimmigrant status to aliens entitled to 
enter the U.S. under and in pursuance of the provisions of a 
treaty of commerce and navigation between the U.S. and the 
foreign state of which they are nationals, and the spouses and 
children of any such aliens if accompanying or following to 
join, to carry on trade (clause (i)) or develop and direct the 
operations of an enterprise in which they have or are investing 
(clause (ii)).

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, the Committee notes that H.R. 
3647 makes no changes to existing law.

                           Markup Transcript



                            BUSINESS MEETING

                      THURSDAY, SEPTEMBER 29, 2005

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:03 a.m., in 
Room 2141, Rayburn House Office Building, the Honorable F. 
James Sensenbrenner, Jr., Chairman of the Committee, presiding.
    Chairman Sensenbrenner. The Committee will come to order.
    [Intervening business.]
    Chairman Sensenbrenner. Pursuant to notice, I now call up 
the bill H.R. 3647, to render nationals of Denmark eligible to 
enter the United States as nonimmigrant traders and investors, 
for purposes of markup and move its favorable recommendation to 
the House.
    Without objection, the bill will be considered as read and 
open for amendment at any point, and the Chair recognizes 
himself for 5 minutes to explain the bill.
    [The bill, H.R. 3647, follows:]

    
    
    Chairman Sensenbrenner. E-2 visas are non-immigrant visas 
available to nationals of countries with which the United 
States maintains a treaty of commerce. Under the Immigration 
and Nationality Act, aliens from such countries who wish to 
come to the United States to develop and direct the operations 
of an enterprise in which they have invested, or are actively 
in the process of investing a substantial amount of capital, 
may apply for entry on an E-2 visa.
    Alien employees of a treaty investor may also receive E-2 
visas if they're coming to the U.S. to engage in duties of an 
executive or supervisory character, or if employed in a lesser 
capacity if they have special qualifications that make the 
services to be rendered essential to the efficient operation of 
the enterprise. There is no numerical cap on E-2 visas. An 
alien may be admitted initially for a period of 2 years, and 
can apply for extensions in 2-year increments. The United 
States has entered into treaties of commerce containing 
language similar to the E-2 visas as far back as 1815, when we 
entered into a convention to regulate commerce with the United 
Kingdom.
    Currently nationals of 74 countries are eligible for E-2 
visas. In fiscal year '03, 24,506 aliens, including dependents, 
were granted E-2 visas. Nationals of Denmark are already 
eligible for the E-1 treaty trader visas pursuant to the Treaty 
of Friendship, Commerce and Navigation between the United 
States and Denmark of October 1st, 1951. The U.S. and Denmark 
signed a protocol to that treaty on May 2, 2001, that would 
also grant Danes eligibility for E-2 visas. However, that 
protocol has not been ratified due to the broad objections 
raised on both sides of the Capitol regarding the inclusion of 
immigration provisions in trade agreements. Accordingly, the 
Danish Embassy has requested that Denmark be granted E-2 
privilege through the normal legislative process, which this 
legislation would accomplish.
    I appreciate the Embassy of Denmark for seeking E-2 status 
the right way, and I urge my colleagues to support this 
legislation, and recognize the gentleman from Michigan, Mr. 
Conyers.
    The gentlewoman from Texas, Ms. Jackson Lee, you are 
recognized for 5 minutes.
    Ms. Jackson Lee. I thank the distinguished Chairman and 
Ranking Member.
    Let me first of all acknowledge that this is an important 
issue. Danish nationals are eligible for E-1 treaty trader 
visas pursuant to the Treaty of Friendship, Commerce and 
Navigation between the United States and Denmark of October 1, 
1951.
    The United States and Denmark signed a protocol to the 
treaty on May 2nd, 2001, which would grant Danes eligibility 
for E-2 visas. That protocol is currently before the Senate 
Foreign Affairs Committee. However, since the Judiciary 
Committee began insisting in 2003 that trade agreements and 
treaties no longer contain immigration provisions, the Danish 
Embassy has requested a grant of E-2 privileges through the 
normal legislative process.
    H.R. 3647 would grant those privileges to Denmark, and I 
support the grant of such privileges.
    However, as we have been consistently arguing against trade 
agreements having the issues of immigration without legislative 
input, I would have wanted for this proceeding and this 
particular grant of eligibility statute to have gone through 
the normal rule of order, which is to be heard at the 
Immigration Committee level, and proceeded on with a hearing, 
and then onto the Full Committee.
    If the privileges are granted, Danish nationals will be 
able to receive E-2 visas if they're coming to the United 
States to develop and direct the operations of an enterprise in 
which they have invested or of an enterprise in which they are 
actively in the process of investing a substantial amount of 
capital. Also they would be admitted initially for a period of 
2 years and would be able to apply for extensions in 2-year 
increments. E-2 visas do not have a numerical cap.
    Several years ago our Committee raised bipartisan objection 
to using free trade agreements as vehicles for immigration 
legislation. That practice ended after the passage of the 
Chilean-Singapore Free Trade Agreements, however, many of us 
still opposed those particular agreements going through with 
immigration processes.
    Since then the Australian Free Trade Agreement and the 
Dominican Republic-Central America Free Trade Agreement have 
been enacted without any explicit immigration provisions.
    The Danish Embassy has requested a grant of E-2 privilege 
to Denmark through the normal legislative process. The normal 
legislative process does not begin with a Full Committee 
markup. It begins with a hearing at the Subcommittee level.
    Consideration of H.R. 3647 should begin with a legislative 
hearing. We needed to hear testimony on whether Denmark should 
be granted E-2 privileges. In addition, I believe that the rule 
for this particular Committee should always be balanced, 
equality, fair treatment, and this hearing would allow us to 
determine the possibility of the uniqueness of the Denmark 
request as opposed to other countries and other entities who 
would make the same request. Setting a standard without going 
through the normal legislative process still commits us to 
legislating and adding to trade bills immigration proceedings 
without the full hearing of this Committee.
    We also should have a Subcommittee markup. At that point a 
full Committee markup may be appropriate. It is not appropriate 
now in the absence if these proceedings to do so.
    I would also suggest that we've gained little from 
insisting on legislative proceedings if we're going to 
immediately bring this to the full Committee, and also ignore 
the commitment that we've made about not following the 
legislative process when it comes to immigration issues.
    I am urging my colleagues to vote against this bill so that 
it can be referred to the Subcommittee on Immigration, Border 
Security, and Claims for a legislative hearing, and I would 
offer to say that this would be consistent with the views of 
this Committee.
    Let me also just make note at this time that because of an 
emergency in my district I was not here for H.R. 3648. I intend 
to put a statement in the record. But I would also argue in 
relation to fees, that it would seem to be unfair to utilize 
the increase in fees for budget shortfalls and to exact the 
need for $60 million for FY 2006 to be raising these fees 
without full understanding of the burden that it might create 
on the L Visas.
    With that, let me conclude by suggesting that it would be 
preferable to refer this particular legislation to the 
Committee, being consistent with the statements being made 
previously of this Committee of not putting immigration issues 
into a trade bill without the full legislative process.
    With that, I yield back.
    Chairman Sensenbrenner. Without objection, all Members' 
opening statements will be placed in the record at this point.
    [The prepared statement of Ms. Jackson Lee follows:]

       Prepared Statement of the Honorable Sheila Jackson Lee, a 
Representative in Congress from the State of Texas, and Ranking Member, 
        Subcommittee on Immigration, Border Security, and Claims

    Danish nationals are eligible for E-1 (treaty trader) visas 
pursuant to the Treaty of Friendship, Commerce, and Navigation Between 
the United States and Denmark of October 1, 1951. The United States and 
Denmark signed a protocol to that treaty on May 2, 2001, which would 
grant Danes eligibility for E-2 visas. That protocol is currently 
before the Senate Foreign Affairs Committee. However, since the 
Judiciary Committee began insisting in 2003 that trade agreements and 
treaties no longer contain immigration provisions, the Danish embassy 
has requested a grant of E-2 privileges through the normal legislative 
process. H.R. 3647 would grant those privileges to Denmark.
    If the privileges are granted, Danish nationals will be able to 
receive E-2 visas if they are coming to the United States to develop 
and direct the operations of an enterprise in which they have invested, 
or of an enterprise in which they are actively in the process of 
investing, a substantial amount of capital. Also, they would be 
admitted initially for a period of two years and would be able to apply 
for extensions in two-year increments. E-2 visas do not have a 
numerical cap.
    Several years ago, our Committee raised bipartisan objections to 
using Free Trade Agreements as vehicles for immigration legislation. 
That practice ended after the passage of the Chile and Singapore Free 
Trade Agreements. Since then, the Australian Free Trade Agreement and 
the Dominican Republic-Central America Free Trade Agreement have been 
enacted without any explicit immigration provisions.
    The Danish embassy has requested a grant of E-2 privileges to 
Denmark through the normal legislative process. The normal legislative 
process does not begin with a Committee markup. Consideration of H.R. 
3647 should begin with a legislative hearing. We need to hear testimony 
on whether Denmark should be granted E-2 privileges. We also should 
have a subcommittee markup. At that point, a full Committee markup may 
be appropriate. It is not appropriate now in the absence of those 
proceedings.
    We have gained little from insisting on legislative proceedings if 
we are going to abbreviate those proceedings by starting the process at 
the Committee markup level. I urge you to vote against this bill so 
that it can be referred to the Subcommittee on Immigration, Border 
Security, and Claims for a legislative hearing. Thank you.

    Chairman Sensenbrenner. Are there amendments? And the Chair 
recognizes himself for purposes of offering an amendment, and 
the clerk will report the amendment.
    The Clerk. Amendment to H.R. 3647, Offered by Chairman 
Sensenbrenner. Page 1, line 8, after ``in such section'' insert 
``(other than clause (iii) of such section).''
    [The amendment of Chairman Sensenbrenner follows:]

    
    
    Chairman Sensenbrenner. The Chair recognizes himself for 5 
minutes to state that this amendment simply clarifies that the 
bill does not grant nationals of Denmark eligibility for E-3 
visas, nonimmigrant visas for Australian professionals that 
were created earlier this year in the Iraq Supplemental.
    Those visas are much akin to H1B visas and bear no 
relationship to the traditional E-1 and E-2 visas. Why the 
Senate decided to put the Australian visas in the E category 
and confuse everybody is a question that they only know the 
answer to, and I will not presume to guess.
    In any event, I urge my colleagues to support this 
clarification made by the amendment and yield back the balance 
of my time.
    The question is on agreeing to the amendment offered by the 
Chair. Those in favor will say aye. Opposed, no.
    The ayes appear to have it. The ayes have it and the 
amendment is agreed to.
    Are there further amendments?
    [No response.]
    Chairman Sensenbrenner. If there are no further amendments, 
the question occurs on the motion to report the bill H.R. 3647 
favorably as amended. A reporting quorum is present. All in 
favor say aye. Opposed, no.
    The ayes appear to have it. The ayes have it, and the 
motion to report favorably is agreed to. Without objection, the 
bill will be reported favorably to the House in the form of a 
single amendment in the nature of a substitute, incorporating 
the amendments adopted here today.
    Without objection, the staff is directed to make any 
technical and conforming changes, and that all Members will be 
given 2 days as provided by the House rules within which to 
submit additional dissenting supplemental or minority views.

                                  
