"Fairness is a key in any meaningful immigration reform, but this fairness would cut both ways: The modernization of our visa system and our border security would allow us to accurately track immigration," Paul said.
"It would also enable us to let more people in and allow us to admit we are not going to deport the millions of people who are already here."
Paul noted that conservatives like him are "wary of amnesty" and his "plan will not grant amnesty or move anyone to the front of the line."
"But what we have now is de facto amnesty," Paul said, before calling for a "probationary period" for those who came here illegally to become legal, calling it a "middle ground" between amnesty and deportation.
Paul, 50, said the second year of the program would "begin expanding probationary work visas to immigrants who are willing to work" and Congress would vote every five years on a report that looks at whether the border is secure. In Paul's proposal, high-tech visas would be increased and a special visa for entrepreneurs would also be issued.
Paul's speech was peppered with Spanish phrases from his childhood in Texas and his love of Hispanic culture, which were well-received by the audience, and his tone was welcoming, just what the RNC report called for Monday in its report on the 2013 presidential election loss.
"Republicans have been losing both the respect and votes of a group of people who already identify with many of our belief in family, faith and conservative values," Paul said. "Hispanics should be a natural and sizable part of the Republican base. But they have steadily drifted away from the GOP in each election [and that] says more about Republicans than it does about Hispanics."
And just as the report laid out Monday, Paul admitted that "Republicans need to become parents of a new future with Latino voters or we will need to resign ourselves to permanent minority status."
The move is also interesting in light of his possible 2016 presidential aspirations and the reality that GOP Republican presidential candidates will need to attract Hispanic voters if they are to get elected.
Related: Rand Paul's Filibuster
The son of former congressman and presidential candidate Ron Paul, he spoke of his own German immigrant family and how when they came to this country they spoke both German and English.
"Republicans who criticize the use of two languages, I think, make a great mistake," he said to applause, adding that his party "must embrace more legal immigration," not always a familiar refrain, especially in the more conservative wing of the party.
Paul's speech has some overlap with the proposal by the Senate's bipartisan Gang of Eight, which is hoping to release legislation just month. The group also wants to secure the border, boost legal immigration, as well as create a pathway to citizenship.
One difference is he is not calling for a national ID card, or mandatory e-verify, saying that forces "business to become policeman."
Paul won the Conservative Political Action Conference straw-poll vote last week after his 13-hour filibuster of CIA Director John Brennan two weeks ago.
Fusion's Jordan Fabian contributed to this report