Border Security Investment Act
- Sponsor
- Rep. Moran, Nathaniel [R-TX-1]
- Committees
- Homeland Security Committee (primary)
- Last action
- Jan 15, 2025
Bottom line
The Border Security Investment Act creates a dedicated, self-sustaining funding mechanism for both state and federal border security initiatives through a significant new fee on international money transfers to specific countries.
What it actually does
This bill establishes two new trust funds in the Treasury for border security purposes: one to reimburse border states for enforcement measures and another for federal border security technology, physical barriers, and Border Patrol agent wages. These funds are financed by a new 37 percent fee imposed on remittance transfers sent to countries identified by U.S. Customs and Border Protection as the top five sources of unlawful entries into the United States.
Proponents argue
Supporters argue this bill provides a crucial and dedicated funding source to address the ongoing border crisis, ensuring that states on the front lines are reimbursed for their efforts and that federal agencies have the resources for technology, infrastructure, and personnel. They contend that linking the fee to countries identified as major sources of unlawful entries is a reasonable approach to fund necessary enforcement.
Opponents contend
Critics contend that the 37 percent remittance fee is a regressive tax that would disproportionately burden low-income families who rely on these transfers to support relatives abroad. They argue it could hinder economic development in recipient countries, potentially drive remittance transfers into unregulated channels, and may not address the root causes of migration.
The bill is short and relatively straightforward, allowing an informed reader to understand its core provisions within the typical time given for legislative review.
Section 2(a)
Additional Remittance Transfer Fees
This provision amends the Electronic Fund Transfer Act to impose a new 37 percent fee on all remittance transfers sent by money services businesses to 'covered countries.' A 'covered country' is defined annually by U.S. Customs and Border Protection as one of the five countries with the most citizens or nationals unlawfully entering the United States in the previous fiscal year. All collected fees are to be submitted to the Department of the Treasury's general fund.
Supporters argue
Proponents argue this fee creates a dedicated and substantial revenue stream for critical border security initiatives, directly linking funding to the countries identified as primary sources of unlawful entries. They believe it sends a clear message and helps offset the costs incurred by the U.S. due to illegal immigration.
Critics contend
Opponents contend that a 37 percent fee is excessively high and constitutes a regressive tax that disproportionately harms low-income families who rely on remittances for basic necessities. They argue it could drive transfers to informal, unregulated channels, reducing transparency and potentially fostering illicit financial activity.
Tradeoffs
This provision balances the goal of securing dedicated funding for border enforcement with concerns about the economic impact on individuals and families, as well as the potential for unintended consequences like the growth of informal remittance networks.
Section 2(b)
Border Security State Reimbursement Trust Fund
This section establishes the 'Border Security State Reimbursement Trust Fund' in the Treasury. Fifty percent of the remittance fees collected under Section 2(a) will be transferred annually from the general fund to this trust fund. Amounts in the fund are available to the Secretary of Homeland Security to reimburse border states for expenditures related to border security enforcement measures, defined broadly to include deterring unlawful crossings, detecting unlawful activity, and gaining operational control of the southwest border. States can apply for reimbursement by submitting receipts.
Section 2(c)
Border Security Trust Fund
This section establishes a second trust fund, the 'Border Security Trust Fund,' also in the Treasury. The remaining fifty percent of the remittance fees collected under Section 2(a) will be transferred annually from the general fund to this trust fund. Funds are available to the Secretary of Homeland Security for specific federal border security purposes, including the deployment of technology to detect and prevent unlawful crossings along the U.S.-Mexico border, the installation of physical barriers at the southern border, and wages and salaries for U.S. Border Patrol agents.
Section 2(d)
Rescission of Excess Amounts
This provision mandates that if the combined total funds in both the Border Security State Reimbursement Trust Fund and the Border Security Trust Fund exceed $50,000,000,000, the excess amount shall be permanently rescinded. These rescinded funds will then be deposited into the general fund of the Treasury, dedicated solely for deficit reduction and explicitly prohibited from being used as an offset for other spending increases or revenue reductions.
The definition of 'covered country' is critical, identifying it as one of the 5 countries with the most citizens or nationals unlawfully entering the United States during the previous fiscal year, as determined by the Commissioner of U.S. Customs and Border Protection.
Section 2(a)(3)(A)
Why it matters:This is standard legislative practice for defining terms, but its dynamic nature makes it particularly impactful and easy to miss the full implications.
Case for: Proponents would argue this dynamic definition ensures the fee is targeted at current, pressing sources of unlawful entry, making the funding mechanism responsive to evolving border challenges.
Case against: Critics might argue that a dynamically changing list creates uncertainty for money services businesses and could lead to diplomatic complications with countries that are frequently on the list. It also creates a direct link between immigration statistics and financial penalties.
Estimated impact: This definition directly determines which remittance transfers are subject to the 37% fee, significantly impacting the revenue generated and the individuals affected.
The term 'money services business' is defined by reference to section 1010.100 of title 31, Code of Federal Regulations.
Section 2(a)(3)(B)
Why it matters:This is standard legislative practice to avoid re-writing existing definitions, but it places a burden on the reader to consult external legal texts.
Case for: Proponents would argue that referencing existing regulatory definitions ensures consistency with established financial oversight and leverages existing compliance frameworks for money transmitters.
Case against: Critics might argue that relying on external definitions can obscure the full scope of the bill's impact for a general reader, making it less transparent.
Estimated impact: This definition determines the specific financial institutions and entities responsible for collecting and remitting the 37% fee, impacting their operational procedures and compliance costs.
The bill includes a provision to rescind any funds in the two trust funds that exceed a combined total of $50,000,000,000, dedicating these excess funds solely to deficit reduction and prohibiting their use as offsets for other spending or revenue reductions.
Section 2(d)
Why it matters:This is a significant fiscal policy detail that might be included to garner support from fiscal conservatives, but its placement could be seen as an attempt to downplay its long-term implications for border security funding.
Case for: Proponents would highlight this as a responsible fiscal safeguard, ensuring that the trust funds do not accumulate excessive amounts and that any surplus revenue directly contributes to reducing the national debt.
Case against: Opponents might argue that a hard cap of $50 billion, while substantial, could eventually limit necessary long-term investments in border security, especially if costs escalate or needs change over time. They might also question the effectiveness of this specific deficit reduction mechanism.
Estimated impact: This provision could redirect billions of dollars to deficit reduction if the remittance fees generate revenue significantly faster than the funds are expended, or if the cap is reached over time.