[Federal Register Volume 59, Number 6 (Monday, January 10, 1994)]
[Proposed Rules]
[Pages 1317-1323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-391]


[[Page Unknown]]

[Federal Register: January 10, 1994]


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DEPARTMENT OF JUSTICE
8 CFR Parts 103, 211, 216, 235, and 242

[INS No. 1429-92]
RIN 1115-AC53

 

Conditional Permanent Resident Regulations for Alien 
Entrepreneurs, Spouses, and Children

AGENCY: Immigration and Naturalization Service, Justice.

ACTION: Proposed rule.

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SUMMARY: This rule implements provisions of section 121 of the 
Immigration Act of 1990, by providing for conditional resident status 
to certain alien entrepreneurs, their spouses, and their unmarried 
minor children. It also provides for the removal of the conditional 
basis of such status through the filing of a petition by the alien 
entrepreneur. This rule will allow alien entrepreneurs to continue 
their commercial enterprises while providing jobs in the United States.

DATES: Written comments must be submitted on or before February 9, 
1994.

ADDRESSES: Please submit written comments, in triplicate, to the 
Records Systems Division, Director, Policy Directives and Instructions 
Branch, Immigration and Naturalization Service, 425 I Street, NW., room 
5307, Washington, DC 20536. To ensure proper handling, please reference 
the INS number 1429-92 on your correspondence.

FOR FURTHER INFORMATION CONTACT:
Michael W. Straus, Senior Immigration Examiner, Adjudications Division, 
Immigration and Naturalization Service, 425 I Street, NW., room 7122, 
Washington, DC 20536, telephone (202) 514-5014.

SUPPLEMENTARY INFORMATION: The Immigration and Naturalization Service 
(the Service) notes that the legislative history on conditional 
permanent residence status for alien entrepreneurs is limited in its 
guidance; therefore, this rule relies heavily on the language of the 
statute itself. Congress, however, did indicate that the two-year 
conditional status for alien entrepreneurs exists for the primary 
purpose of ensuring that ``all aliens receiving visas in this section * 
* * continue their new commercial enterprises so that the creation of 
U.S. jobs and the infusion of capital into the U.S. economy is 
sustained.'' S. Rep. No. 101-55, 101st Cong., 1st Sess. 22 (1989).
    Accordingly the Service proposes to amend 8 CFR parts 211, 216, 
235, and 242 by providing conditional permanent resident status for 
certain alien entrepreneurs, their spouses, and their children.

Petition for Removal of Conditions

    The Immigration and Nationality Act (the Act), as amended by the 
Immigration Act of 1990, Public Law 101-649, November 29, 1990, 
requires that an alien entrepreneur file a petition for removal of 
conditions during the 90-day period before the second anniversary of 
the alien's obtaining conditional permanent resident status (section 
216A(d)(2)(A) of the Act). The petition should include any spouse or 
children accorded conditional permanent resident status. Children who 
have reached the age of twenty-one or who have married during the 
period of conditional permanent residence will remain eligible for 
removal of conditions. The statute also calls for a personal interview 
of the alien within 90 days after the date the alien files the petition 
for removal of conditions. The Service may waive the requirement of an 
interview in appropriate cases (section 216A(d)(3) of the Act).
    This rule provides that the required petition shall be filed with 
the Service Center having jurisdiction over the location of the alien's 
commercial enterprise. The petition will be reviewed by the Service 
Center, and a determination will be made on the necessity of an 
interview. If the Service Center director determines in his or her 
discretion that a decision may be made on the basis of the petition and 
accompanying evidence without the necessity of an interview, the 
decision on the petition will be rendered at the Service Center. If the 
director determines that an interview is needed, the Service Center 
director will schedule the alien for an interview to be held at the 
local Service district office or sub-office having jurisdiction over 
the alien entrepreneur's commercial enterprise in the United States. 
The local district office will then take responsibility for the case to 
its conclusion.

Decision on Petition

    If the alien's petition is approved, the conditional basis of the 
beneficiaries' permanent resident status will be removed as of the 
second anniversary of the alien's entry as a conditional permanent 
resident. Denial of a petition will result in termination of the 
alien's lawful permanent resident status and issuance by the Service of 
an order to show cause why the alien should not be deported from the 
United States. There is no appeal from this denial, but the alien may 
seek review of the decision by the immigration judge in deportation 
proceedings. In such deportation proceedings, the burden shall rest 
with the Service to establish by a preponderance of the evidence that 
the facts and information in the alien's petition for removal of 
conditions are not true.
    The Service explored the possibility of establishing by regulation 
some form of hardship waiver similar to that set forth at 8 CFR 216.5 
for removal of conditions for certain alien spouses and sons and 
daughters. The Service has concluded that such a waiver cannot, 
consistent with the statute, be created by regulation for alien 
entrepreneurs. Section 216A(c)(3)(C) of the Act sets out a mandatory 
instruction: The Attorney General shall terminate the permanent 
resident status of an alien entrepreneur who has failed to comply with 
the requirements for removal of conditions. Unlike section 216, section 
216A of the Act does not provide for the waiver of these requirements 
in cases of hardship.
    Although the statute does not provide for a waiver of requirements 
for removal of conditions for alien entrepreneurs, the requirement that 
an alien entrepreneur has sustained his or her investment of the 
requisite capital during the two years of conditional residence will be 
interpreted flexibly. The alien entrepreneur will be considered to have 
``sustained'' the actions required for removal of conditions if he or 
she has, in good faith, substantially met the capital investment 
requirement of the statute and continuously maintained his or her 
capital investment over the two years of conditional residence. This 
liberal interpretation of the term ``sustained'' in section 
216A(a)(1)(C) of the Act permits the Service maximum flexibility in 
determining whether the prerequisites for removal of the conditions 
have been met in light of the congressional intent underlying this 
provision. The Service recognizes that a bona-fide and good faith 
investment may not meet all of the expectations envisioned when the 
alien entrepreneur obtained conditional residence status. For example, 
the fact that an alien entrepreneur has less than the requisite capital 
invested in the enterprise at the end of the two-year conditional 
period would not necessarily require the denial of the petition to 
remove conditions. The petition could be granted if the alien 
entrepreneur had invested a substantial portion of the requisite 
capital, thereby demonstrating that he or she was actively sustaining 
his or her investment in the enterprise as required by the statute. The 
determination of whether an alien entrepreneur had invested a 
substantial portion of the requisite capital in good faith will be made 
on a case-by-case basis. The proposed rule reflects this standard at 8 
CFR 216.6(a)(4)(iii) and 8 CFR 216.6(c)(1)(iii).
    The following example illustrates how the alien entrepreneur can 
``substantially meet'' the capital investment requirement. An alien 
entrepreneur is granted conditional residence based on a business plan 
which envisioned an investment of $1.2 million. At the end of the 
conditional residence period, he or she has invested only $800,000 in a 
non-targeted employment area, because through circumstances beyond the 
alien's control, construction of a facility took longer than 
anticipated. The Service may remove the conditions, if the entrepreneur 
can show that he or she can and will invest the additional capital 
within a reasonable time to complete the investment. On the other hand, 
if the entrepreneur cannot show that he or she will be able to generate 
additional capital within a reasonable time, regardless of his or her 
good-faith efforts, the Service will not remove the conditions.
    In determining whether an alien entrepreneur has demonstrated that 
he or she invested in good faith, the Service will examine his or her 
intent based on both objective and subjective standards. The following 
example illustrates the ``good faith'' analysis. An entrepreneur 
invests $600,000 in a non-targeted employment area prior to obtaining 
conditional residence, but is unable to provide the additional capital 
as envisioned in the Form I-526 application. At the time he or she 
obtained conditional residence, he or she had no realistic prospect of 
obtaining funds to meet the capital investment requirement and in fact 
is unable to acquire the additional $400,000 required to complete the 
investment. Even though the entrepreneur sincerely wished to make the 
investment succeed, under the objective part of the good faith 
analysis, the entrepreneur will be unable to establish that he or she 
substantially met the capital investment requirement in good faith.
    This rule also permits the director for good cause to remove 
conditions for the spouse and/or unmarried minor children of a deceased 
principal alien entrepreneur. If the spouse and/or children can show 
that, despite the entrepreneur's death, the requirements for removal of 
conditions have been met, the director may approve the petition and 
remove the conditions. This procedure makes humanitarian as well as 
economic sense and fufills the goals of the statute in that the economy 
of the United States will have benefited in the manner sought by 
Congress notwithstanding the death of the principal entrepreneur.

Other Reasons for Termination

    The statute calls for termination of the alien's conditional 
permanent residence status during the two-year period if the Service 
determines: That establishment of the new commercial enterprise was for 
the sole purpose of evading United States immigration laws; that the 
new commercial enterprise in fact was not established; that the alien 
did not invest or was not in the process of investing the prescribed 
capital; that the alien was not sustaining the new commercial 
enterprise or the investment of capital; or that the alien was not 
otherwise conforming to the requirements of the status (section 
216A(b)(1) of the Act). If the Service determines any of the foregoing, 
the alien's status will be terminated and an order to show cause will 
be issued. The alien may request review of this decision in deportation 
proceedings. In such proceedings, the burden of proof will rest with 
the Service to establish by a preponderance of the evidence that one of 
the foregoing reasons for termination is true.
    Termination will also result, and an order to show cause will be 
issued, if the alien enterpreneur fails to file the required petition 
for removal of conditions or, without good cause, fails to appear for a 
personal interview when requested by the Service (section 216A(c)(2) of 
the Act). The decision may be reviewed in deportation proceedings, but, 
in either instance, the burden will rest with the alien to show 
compliance with the filing and interview requirments. The Service may 
accept and consider a late petition if the alien demonstrates good 
cause and extenuating circumstances for having failed to file a timely 
petition. Furthermore, the Service may stay deportation proceedings and 
consider a petition for an alien who is the subject of deportation 
proceedings for failure to file a timely petition if the alien 
demonstrates good cause and extenuating circumstances.
    Finally, the legislative history of this provision at S. Rep. No. 
101-55, 101st Cong., 1st Sess. 21 (1989) indicates Congress's wish that 
``* * * processing of an individual visa not continue if it becomes 
known to the Government that the money invested was obtained by the 
alien through other than legal means (such as money received through 
the sale of illegal drugs).'' This position is clearly part of 
Congress's general policy to penalize one who prospers as a result of 
an illegal enterprise. That policy is evidenced elsewhere in the 
federal law, such as the statute which defines money laundering crimes 
as aggravated felonies, 8 U.S.C. 1101(a)(43), and the provisions of the 
United States Code which provide for the forfeiture of proceeds of 
unlawful activities to the United States, 21 U.S.C. 881(a)(6) 
(forfeiture of proceeds of controlled substance exchange) and 18 U.S.C. 
1963(a)(3) (forfeiture of proceeds of racketeering activity or unlawful 
debt collection). In light of Congress's specific statement of intent 
with regard to this provision, and its overall policy concerning 
proceeds from illegal activities, termination of status will result at 
any time during the two-year conditional residence period or at the 
time a petition for removal of conditions is filed, if the Service 
determines that the alien's investment funds have been obtained through 
other than legal means.

Application Fee

    In accordance with Office of Management and Budget Circular A-25, 
User Charges, ``user charges will be sufficient to recover the full 
cost to the Federal Government * * * of providing the service * * *. 
Full cost shall be determined or estimated from the best available 
records of the agency * * *.'' The Service proposes to institute an 
application fee of $90.00 for filing form I-829. This fee is based on 
the estimated costs of processing the petition.
    The I-829 fee will be one of many examinations fees assessed for 
providing adjudication and naturalization services. Each examinations 
fee has three components: Direct costs, indirect costs, and a surcharge 
to cover the costs of the International Affairs and Outreach Program 
(formerly the Refugees and Overseas Program).
    Direct costs are those costs directly related to the processing of 
a particular application form for a particular benefit. Generally, 
direct costs include: The pay of the adjudications officers and 
clerical staff working on each type of application and the costs of 
their associated personnel benefits; the costs of Federal Bureau of 
Investigation name and fingerprint checks; where applicable, the costs 
by application of naturalization ceremonies conducted by the United 
States Courts; and the costs of INS immigration document and card 
production. The pay costs are calculated by multiplying average 
adjudications processing time by the hourly pay for the average grade 
level of adjudicators and clerks. For the I-829, the direct costs 
include the pay costs of the adjudications officers and clerical staff 
and the costs of producing the Alien Registration Card.
    Indirect costs are defined as the costs of supervisory, management, 
and administrative activities, related staff training, records, data 
processing, files services, legal services, and space and support costs 
of providing immigration benefits under the Immigration and Nationality 
Act and related statutes. Indirect costs also include costs in the 
management and administration portion of the INS budget, such as the 
costs of personnel administration work needed to recruit and pay the 
officers and clerks who process customers' applications for benefits. 
The activities associated with these costs are no less essential to 
providing INS services to its customers than are the direct costs. 
These indirect costs are distinguished only by the somewhat greater 
complexity of determining the portion of such costs that are 
attributable to work done for fee-paying customers.
    The costs to carry out the International Affairs and Outreach 
Program are borne by the Examinations Fee Account, at the direction of 
Congress. See section 286(m) of the Act. These costs are treated as a 
surcharge that is added to the examinations fees.
    The total cost of processing the I-829 is estimated at $90.45. The 
proposed fee was determined by rounding the total cost to the nearest 
$5.00. As the Service gains experience in processing this new 
application, the fee will be adjusted as necessary based on improved 
data.

Technical Changes

    The proposed regulation also contains some minor technical changes 
resulting from the merger of Form I-751 and Form I-752 into the new 
Form I-751 (see 56 FR 55931 on October 30, 1991; 57 FR 6181 on February 
21, 1992). This regulation eliminates reference to the Form I-752, 
which has been cancelled.
    In accordance with 5 U.S.C. 605(b), the Commissioner of the 
Immigration and Naturalization Service certifies that this rule will 
not, if promulgated, have a significant adverse economic impact on a 
substantial number of small entities. Insofar as this proposed rule 
merely sets forth the procedures for terminating the conditional 
resident status of alien entrepreneurs already present in the country 
and for removing the conditional basis of permanent resident status for 
such persons, any impact the proposed rule will have on small business 
entities will be, at most, indirect or attenuated. This rule is not 
significant within the meaning of section 3(f) of E.O. 12866, nor does 
this rule have Federalism implications warranting the preparation of a 
Federalism Assessment in accordance with E.O. 12612.
    This rule contains information collection requirements which have 
been approved by the Office of Management and Budget (OMB) under the 
provisions of the Paperwork Reduction Act. The OMB control numbers for 
these collections are contained in 8 CFR 299.5. This rule also contains 
a new collection requirement which has been forwarded to OMB under the 
provisions of the Paperwork Reduction Act for review and clearance.

List of Subjects

8 CFR Part 103

    Administrative practice and procedures Archives and records, 
Authority delegations (Government agencies), Bonding, Fees, Forms, 
Freedom of Information, Organization and functions (Government 
agencies), Privacy, Reporting and recordkeeping requirements, Surety 
bonds.

8 CFR Part 211

    Immigration, Passports and visas, Reporting and recordkeeping 
requirements.

8 CFR Part 216

    Administrative practice and procedure, Aliens, Immigration, 
Reporting and recordkeeping requirements.

8 CFR Part 235

    Administrative practice and procedure, Aliens, Immigration, 
Reporting and recordkeeping requirements.

8 CFR Part 242

    Administrative practice and procedure, Aliens.

    Accordingly, chapter I of title 8 of the Code of Federal 
Regulations is proposed to be amended as follows:

PART 103--POWERS AND DUTIES OF SERVICE OFFICERS; AVAILABILITY OF 
SERVICE RECORDS

    1. The authority citation for part 103 continues to read as 
follows:

    Authority: 5 U.S.C. 552, 552a; 8 U.S.C. 1101, 1103, 1201, 1252, 
note, 1252b, 1304, 1356; 31 U.S.C. 9701; E.O. 12356, 47 FR 14874, 
15557; 3 CFR, 1982 Comp., p. 166; 8 CFR part 2.

    2. In Sec. 103.7, paragraph (b)(1) is amended by:
    a. Removing the ``Form I-752'' from the listing of forms;
    b. Revising the description for ``Form I-751''; and by
    c. Adding the ``Form I-829'', to the listing of forms, in proper 
numerical sequence, to read as follows:


Sec. 103.7  Fees.

* * * * *
    (b) * * *
    (1) * * *
* * * * *
    Form I-751. For filing petition to remove the conditions on 
residence which is based on marriage--$75.00.

    * * *

    Form I-829. For filing petition by entrepreneur to remove 
conditions--$90.00.
* * * * *

PART 211--DOCUMENTARY REQUIREMENTS: IMMIGRANTS; WAIVERS

    3. The authority citation for part 211 continues to read as 
follows:

    Authority: 8 U.S.C. 1101, 1103, 1181, 1182, 1203, 1225, 1257.

    4. In Sec. 211.1, paragraph (b)(1)(i) introductory text is revised 
to read as follows:


Sec. 211.1  Visas.

* * * * *
    (b)(1) * * *
    (i) Alien not travelling pursuant to government orders. An Alien 
Registration Receipt Card may be presented in lieu of an immigrant visa 
by an immigrant alien who is returning to an unrelenquished lawful 
permanent residence in the United States, is returning prior to the 
second anniversary of the date on which he or she obtained such 
residence if subject to the provisons of section 216 or 216A of the 
Act, whichever is applicable, or within six months of the date of 
filing a Petition to Remove the Conditions on Residence (Form I-751) or 
a Petition By Entrepreneur to Remove Conditions (Form I-829) pursuant 
to 8 CFR part 216, if the alien is in possession of a Service-issued 
receipt for such filing, and:
* * * * *

PART 216--CONDITIONAL BASIS OF LAWFUL PERMANENT RESIDENCE STATUS

    5. The heading for part 216 is revised as set forth above.
    6. The authority citation for part 216 is revised to read as 
follows:

    Authority: 8 U.S.C. 1101, 1103, 1154, 1184, 1186a, 1186b, and 8 
CFR part 2.


Sec. 216.1  [Amended]

    7. Section 216.1 is amended in the first sentence by revising the 
phrase ``section 216 of the Act'' to read: ``section 216 or 216A of the 
Act, whichever is applicable,''.


Sec. 216.2  [Amended]

    8. Section 216.2(b) is amended in the first sentence by adding the 
phrase ``or he alien entrepreneur'' between the words ``spouse'' and 
``must''.
    9. Section 216.2(c) is amended by adding the phrase ``, or the 
alien entrepreneur'' between the words ``spouse'' and ``of''; and by 
removing the word ``joint''.
    10. In Sec. 216.3 is revised to read as follows:


Sec. 216.3  Termination of conditional resident status.

    (a) During the two-year conditional period. The director shall send 
a formal written notice to the conditional permanent resident of the 
termination of the alien's conditional permanent resident status if the 
director determines that any of the conditions set forth in section 
216(b)(1) or 216A(b)(1) of the Act, whichever is applicable, are true, 
or it becomes known to the government that an alien entrepreneur who 
was admitted pursuant to section 203(b)(5) of the Act obtained his or 
her investment capital through other than legal means (such as through 
the sale of illegal drugs). If the Service issues a notice of Intent to 
Terminate an alien's conditional resident status, the director shall 
not adjudicate Form I-751 or Form I-829 until it has been determined 
that the alien's status shall not be terminated. During this time, the 
alien shall continue to be a lawful conditional permanent resident with 
all the rights, privileges, and responsibilities provided to persons 
possessing such status. Prior to issuing the Notice of Termination, the 
director shall provide the alien with an opportunity to review and 
rebut the evidence upon which the decision is to be based, in 
accordance with Sec. 103.2(b)(2) of this chapter. The termination of 
status, and all of the rights and privileges concomitant thereto 
(including authorization to accept or continue in employment in this 
country), shall take effect as of the date of such determination by the 
director, although the alien may request a review of such determination 
in deportation proceedings. In addition to the notice of termination, 
the director shall issue an order to show cause why the alien should 
not be deported from the United States, in accordance with part 242 of 
this chapter. During the ensuing deportation proceedings, the alien may 
submit evidence to rebut the determination of the director. The burden 
of proof shall be on the Service to establish, by a preponderance of 
the evidence, that one or more of the conditions in section 216(b)(1) 
or 216A(b)(1) of the Act, whichever is applicable, are true, or that an 
alien entrepreneur who was admitted pursuant to section 203(b)(5) of 
the Act obtained his or her investment capital through other than legal 
means (such as through the sale of illegal drugs).
    (b) Determination of fraud after two years. If, subsequent to the 
removal of the conditional basis of an alien's permanent resident 
status, the director determines that an alien spouse obtained permanent 
resident status through a marriage which was entered into for the 
purpose of evading the immigration laws or an alien entrepreneur 
obtained permanent resident status through a commercial enterprise 
which was improper under section 216A(b)(1) of the Act, the director 
may institute rescission proceedings pursuant to section 246 of the Act 
(if otherwise appropriate) or deportation proceedings under section 242 
of the Act.


Sec. 216.4  [Amended]

    11-12. In Sec. 216.4, paragraph (a)(1) is amended by revising the 
phrase ``a Joint Petition to Remove the Conditional Basis of Alien's 
Permanent Resident Status'' in the first sentence, to read: ``a 
Petition to Remove the Conditions on Residence''.
    13. In Sec. 216.4, the heading is revised and paragraph (a)(1) is 
amended by adding a new sentence at the end of the paragraph to read as 
follows:


Sec. 216.4  Joint petition to remove conditional basis of lawful 
permanent resident status for alien spouse.

    (a) * * *
    (1) General procedures. * * *Upon receipt of a properly filed Form 
I-751, the alien's conditional permanent resident status shall be 
extended automatically, if necessary, until such time as the director 
has adjudicated the petition.
* * * * *


Sec. 216.4  [Amended]

    14. In Sec. 216.4, paragraph (a)(2) is amended in the last 
sentence, by revising the phrase ``an Application for Waiver of 
Requirement to File Joint Petition for Removal of Conditions (Form I-
752)'' to read: ``a separate Petition to Remove the Conditions on 
Residence (Form I-751)''.
    15. In Sec. 216.4, paragraph (a)(6) is amended in the first 
sentence by removing the phrase ``or Form I-752''.
    16. In Sec. 216.5, the section heading and paragraph (a), 
introductory text, are revised to read as follows:


Sec. 216.5  Waiver of requirement to file joint petition to remove 
conditions by alien spouse.

    (a) General. A conditional resident alien who is unable to meet the 
requirements under section 216 of the Act for a joint petition for 
removal of the conditional basis of his or her permanent resident 
status may file a Petition to Remove the Conditions on Residence (Form 
I-751), if the alien requests a waiver, was not at fault in failing to 
meet the filing requirement, and the conditional resident alien is able 
to establish that:
* * * * *


Sec. 216.5  [Amended]

    17. In Sec. 216.5, paragraphs (b) and (c) are amended by revising 
the phrase ``Form I-752'' to read: ``Form I-751''.
    18. A new Sec. 216.6 is added to read as follows:


Sec. 216.6  Petition by entrepreneur to remove conditional basis of 
lawful permanent resident status.

    (a) Filing the petition--(1) General procedures. A petition to 
remove the conditional basis of the permanent resident status of an 
alien accorded conditional permanent residence pursuant to section 
203(b)(5) of the Act must be filed by the alien entrepreneur on Form I-
829, Petition by Entrepreneur to Remove Conditions. The alien 
entrepreneur must file Form I-829 within the 90-day period preceding 
the second anniversary of his or her admission to the United States as 
a conditional permanent resident. Before Form I-829 may be considered 
as properly filed, it must be accompanied by the fee required under 
Sec. 103.7(b)(1) of this chapter, and by documentation as described in 
paragraph (a)(4) of this section, and it must be properly signed by the 
alien. Upon receipt of a properly filed Form I-829, the alien's 
conditional permanent resident status shall be extended automatically, 
if necessary, until such time as the director has adjudicated the 
petition. The entrepreneur's spouse and children should be included in 
the petition to remove conditions. Children who have reached the age of 
twenty-one or who have married during the period of conditional 
permanent residence may be included in the petition.
    (2) Jurisdiction. Form I-829 must be filed with the regional 
service center having jurisdiction over the location of the alien 
entrepreneur's commercial enterprise in the United States.
    (3) Physical presence at time of filing. A petition may be filed 
regardless of whether the alien is physically present in the United 
States. However, if the alien is outside the United States at the time 
of filing, he or she must return to the United States, with his or her 
spouse and children, if necessary, to comply with the interview 
requirements contained in the Act. Once the petition has been properly 
filed, the alien may travel outside the United States and return if in 
possession of documentation as set forth in Sec. 211.1(b)(1) of this 
chapter, provided the alien complies with the interview requirements 
described in paragraph (b) of this section. An alien who is not 
physically present in the United States during the filing period but 
subsequently applies for admission to the United States shall be 
processed in accordance with Sec. 235.11 of this chapter.
    (4) Documentation. The petition for removal of conditions must be 
accompanied by the following evidence:
    (i) Evidence that a commercial enterprise was established by the 
alien. Such evidence may include, but is not limited to, Federal income 
tax returns;
    (ii) Evidence that the alien invested or was actively in the 
process of investing the requisite capital. Such evidence may include, 
but is not limited to, an audited financial statement; and
    (iii) Evidence that the alien sustained the actions described in 
paragraphs (a)(4)(i) and (a)(4)(ii) of this section throughout the 
period of the alien's residence in the United States. The alien will be 
considered to have sustained the actions required for removal of 
conditions if he or she has, in good faith, substantially met the 
capital investment requirement of the statute and continuously 
maintained his or her capital investment over the two years of 
conditional residence. Such evidence may include, but is not limited 
to, bank statements, invoices, receipts, contracts, business licenses, 
Federal or State income tax returns, and Federal or State quarterly tax 
statements.
    (iv) Evidence that the alien created or can be expected to create 
within a reasonable time ten full-time jobs for qualifying employees. 
In the case of a ``troubled business'' as defined in 8 CFR 
204.6(j)(4)(ii), the alien entrepreneur must submit evidence that the 
commercial enterprise maintained the number of existing employees at no 
less than the pre-investment level for the period following his or her 
admission as a conditional permanent resident. Such evidence may 
include payroll records, relevant tax documents and Forms I-9.
    (5) Termination of status for failure to file petition. Failure to 
properly file Form I-829 within the 90-day period immediately preceding 
the second anniversary of the date on which the alien obtained lawful 
permanent residence on a conditional basis shall result in the 
automatic termination of the alien's permanent residence status and the 
initiation of deportation proceedings. The director shall send a 
written notice of termination and an order to show cause to an alien 
entrepreneur who fails to timely file a petition for removal of 
conditions. No appeal shall lie from this decision; however, the alien 
may request a review of the determination during deportation 
proceedings. In deportation proceedings, the burden of proof shall rest 
with the alien to show by a preponderance of the evidence that he or 
she complied with the requirement to file the petition within the 
designated period. The director may deem the petition to have been 
filed prior to the second anniversary of the alien's obtaining 
conditional permanent residence status and accept and consider a late 
petition if the alien demonstrates to the director's satisfaction that 
failure to file a timely petition was for good cause and due to 
extenuating circumstances. If the late petition is filed prior to 
jurisdiction vesting with the immigration judge in deportation 
proceedings and the director excuses the late filing and approves the 
petition, he or she shall restore the alien's permanent resident 
status, remove the conditional basis of such status, and cancel any 
outstanding order to show cause in accordance with Sec. 242.7 of this 
chapter. If the petition is not filed until after jurisdiction vests 
with the immigration judge, the immigration judge may terminate the 
matter upon joint motion by the alien and the Service.
    (6) Death of entrepreneur and effect on spouse and children. If an 
entrepreneur dies during the prescribed two-year period of conditional 
permanent residence, the spouse and children of the entrepreneur will 
be eligible for removal of conditions if it can be demonstrated that 
the conditions set forth in paragraph (a)(4) of this section have been 
met.
    (b) Petition review--(1) Authority to waive interview. The director 
of the service center shall review the Form I-829 and the supporting 
documents to determine whether to waive the interview required by the 
Act. If satisfied that the requirements set forth in paragraph (c)(1) 
of this section have been met, the service center director may waive 
the interview and approve the petition. If not so satisfied, then the 
service center director shall forward the petition to the district 
director having jurisdiction over the location of the alien 
entrepreneur's commercial enterprise in the United States so that an 
interview of the alien entrepreneur may be conducted. The director must 
either waive the requirement for an interview and adjudicate the 
petition or arrange for an interview within 90 days of the date on 
which the petition was properly filed.
    (2) Location of interview. Unless waived, an interview relating to 
the Form I-829 shall be conducted by an immigration examiner or other 
officer so designated by the district director at the district office 
that has jurisdiction over the location of the alien entrepreneur's 
commercial enterprise in the United States.
    (3) Termination of status for failure to appear for interview. If 
the alien fails to appear for an interview in connection with the 
petition when requested by the Service, the alien's permanent resident 
status will be automatically terminated as of the second anniversary of 
the date on which the alien obtained permanent residence. The alien 
will be provided with written notification of the termination and the 
reasons therefore, and an order to show cause shall be issued placing 
the alien under deportation proceedings. The alien may seek review of 
the decision to terminate his or her status in such proceedings, but 
the burden shall be on the alien to establish by a preponderance of the 
evidence that he or she complied with the interview requirements. If 
the alien has failed to appear for a scheduled interview, he or she may 
submit a written request to the district director asking that the 
interview be rescheduled or that the interview be waived. That request 
should explain his or her failure to appear for the scheduled 
interview, and if a request for waiver of the interview, the reasons 
such waiver should be granted. If the district director determines that 
there is good cause for granting the request, the interview may be 
rescheduled or waived, as appropriate. If the district director waives 
the interview, he or she shall restore the alien's conditional 
permanent resident status, cancel any outstanding order to show cause 
in accordance with Sec. 242.7 of this chapter, and proceed to 
adjudicate the alien's petition. If the district director reschedules 
that alien's interview, he or she shall restore the alien's conditional 
residence status, and cancel any outstanding order to show cause in 
accordance with Sec. 242.7 of this chapter. If the interview is 
rescheduled at the request of the alien, the Service shall not be 
required to conduct the interview within the 90-day period following 
the filing of the petition.
    (c) Adjudication of petition. (1) The decision on the petition 
shall be made within 90 days of the date of filing or within 90 days of 
the date of interview, whichever is later. In adjudicating the 
petition, the director shall determine whether:
    (i) A commercial enterprise was established by the alien;
    (ii) The alien invested or was actively in the process of investing 
the requisite capital; and
    (iii) The alien sustained the actions described in paragraphs 
(c)(1)(i) and (c)(1)(ii) of this section throughout the period of the 
alien's residence in the United States. The alien will be considered to 
have sustained the actions required for removal of conditions if he or 
she has, in good faith, substantially met the capital investment 
requirement of the statute and continuously maintained his or her 
capital investment over the two years of conditional residence.
    (iv) The alien created or can be expected to create within a 
reasonable period of time ten full-time jobs to qualifying employees. 
In the case of a ``troubled business'' as defined in 8 CFR 
204.6(j)(4)(ii), the alien maintained the number of existing employees 
at no less than the pre-investment level for the previous two years.
    (2) If derogatory information is determined regarding any of these 
issues or it becomes known to the government that the entrepreneur 
obtained his or her investment funds through other than legal means 
(such as through the sale of illegal drugs), the director shall offer 
the alien entrepreneur the opportunity to rebut such information. If 
the alien entrepreneur fails to overcome such derogatory information or 
evidence the investment funds were obtained through other than legal 
means, the director may deny the petition, terminate the alien's 
permanent residence, and issue an order to show cause. If derogatory 
information not relating to any of these issues is determined during 
the course of the interview, such information shall be forwarded to the 
investigations unit for appropriate action. If no unresolved derogatory 
information is determined relating to these issues, the petition shall 
be approved and the conditional basis of the alien's permanent 
residence status removed, regardless of any action taken or 
contemplated regarding other possible grounds for deportation.
    (d) Decision--(1) Approval. If, after initial review or after the 
interview, the director approves the petition, he or she will remove 
the conditional basis of the alien's permanent resident status as of 
the second anniversary of the alien's entry as a conditional permanent 
resident. He or she shall provide written notice of the decision to the 
alien and shall require the alien to report to the appropriate district 
office for processing for a new Alien Registration Receipt Card, Form 
I-551, at which time the alien shall surrender any Alien Registration 
Receipt Card previously issued.
    (2) Denial. If, after initial review or after the interview, the 
director denies the petition, he or she shall provide written notice to 
the alien of the decision and the reasons(s) therefor, and shall issue 
an order to show cause why the alien should not be deported from the 
United States. The alien's lawful permanent resident status and that of 
his or her spouse and any children shall be terminated as of the date 
of the director's written decision. The alien shall also be instructed 
to surrender any Alien Registration Receipt Card previously issued by 
the Service. No appeal shall lie from this decision; however, the alien 
may seek review of the decision in deportation proceedings. In 
deportation proceedings, the burden shall rest with the Service to 
establish by a preponderance of the evidence that the facts and 
information in the alien's petition for removal of conditions are not 
true and that the petition was properly denied.

PART 235--INSPECTION OF PERSONS APPLYING FOR ADMISSION

    19. The authority citation for part 235 continues to read as 
follows:
    Authority: 8 U.S.C. 1101, 1103, 1182, 1183, 1201, 1224, 1225, 
1226, 1227, 1228, 1252.

    20. In Sec. 235.11, paragraphs (a) and (c) are revised to read as 
follows:


Sec. 235.11  Admission of conditional permanent residents.

    (a) General--(1) Conditional residence based on family 
relationship. An alien seeking admission to the United States with an 
immigrant visa as the spouse or son or daughter of a United States 
citizen or lawful permanent resident shall be examined to determine 
whether the conditions of section 216 of the Act apply. If so, the 
alien shall be admitted conditionally for a period of two years. At the 
time of admission, the alien shall be notified that the alien and his 
or her petitioning spouse must file a Petition to Remove the Conditions 
on Residence (Form I-751) within the 90-day period immediately 
preceding the second anniversary of the alien's admission for permanent 
residence.
    (2) Conditional residence based on entrepreneurship. An alien 
seeking admission to the United States with an immigrant visa as an 
alien entrepreneur (as defined in section 216A(f)(1) of the Act) or the 
spouse or unmarried minor child of an alien entrepreneur shall be 
admitted conditionally for a period of two years. At the time of 
admission, the alien shall be notified that the principal alien 
(entrepreneur) must file a Petition by Entrepreneur to Remove 
Conditions (Form I-829) within the 90-day period immediately preceding 
the second anniversary of the alien's admission for permanent 
residence.
* * * * *
    (c) Expired conditional permanent resident alien status. The lawful 
permanent resident alien status of a conditional resident automatically 
terminates if the conditional basis of such status is not removed by 
the Service through approval of a Petition to Remove the Conditions on 
Residence (Form I-751) or, in the case of an alien entrepreneur (as 
defined in section 216A(f)(1) of the Act), a Petition by Entrepreneur 
to Remove Conditions (Form I-829). Therefore, an alien who is seeking 
admission as a returning resident subsequent to the second anniversary 
of the date on which conditional residence was obtained (except as 
provided in Sec. 211.1(b)(1) of this chapter) and whose conditional 
basis of such residence has not been removed pursuant to section 216(c) 
or 216A(c) of the Act, whichever is applicable, shall be placed under 
exclusion proceedings. However, in a case where conditional residence 
was based on a marriage, exclusion proceedings may be terminated and 
the alien may be admitted as a returning resident if the required 
petition (Form I-751) is filed jointly, or by the alien alone (if 
appropriate), and approved by the Service. In the case of an alien 
entrepreneur, exclusion proceedings may be terminated and the alien 
admitted as a returning resident if the required petition (Form I-829) 
is filed by the alien entrepreneur and approved by the Service.

PART 242--PROCEEDINGS TO DETERMINE DEPORTABILITY OF ALIENS IN THE 
UNITED STATES, APPREHENSION, CUSTODY, HEARING, AND APPEAL

    21. The authority citation for part 242 continues to read as 
follows:

    Authority: 8 U.S.C. 1103, 1182, 1186a, 1251, 1252, 1252 note, 
1252b, 1254, 1362; 8 CFR part 2.

    22. In Sec. 242.17, paragraph (a) is revised to read as follows:


Sec. 242.17  Ancillary matters, applications.

    (a) Creation of the status of an alien lawfully admitted for 
permanent residence. The respondent may apply to the immigration judge 
for suspension of deportation under section 244(a) of the Act; for 
adjustment of status under section 245 of the Act, or under section 1 
of the Act of November 2, 1966, or under section 101 or 104 of the Act 
of October 28, 1977; or for the creation of a record of lawful 
admission for permanent residence under section 249 of the Act. The 
application shall be subject to the requirements of parts 244, 245, and 
249 of this chapter. The approval of any application made to the 
immigration judge under section 245 of the Act by an alien spouse (as 
defined in section 216(g)(1) of the Act) or by an alien entrepreneur 
(as defined in section 216A(f)(1) of the Act), shall result in the 
alien's obtaining the status of lawful permanent resident on a 
conditional basis in accordance with the provisions of section 216 or 
216A of the Act, whichever is applicable. However, the Petition to 
Remove the Conditions on Residence required by section 216(c) of the 
Act or the Petition by Entrepreneur to Remove Conditions required by 
section 216A(c) of the Act shall be made to the director in accordance 
with part 216 of the chapter. In conjunction with any application for 
creation of status of an alien lawfully admitted for permanent 
residence made to an immigration judge, if the respondent is 
inadmissible under any provision of section 212(a) of the Act and 
believes that he or she meets the eligibility requirements for a waiver 
of the ground of inadmissibility, he or she may apply to the 
immigration judge for such waiver. The immigration judge shall inform 
the respondent of his or her apparent eligibility to apply for any of 
the benefits enumerated in this paragraph and shall afford the 
respondent an opportunity to make application therefor during the 
hearing. In exercising discretionary power when considering an 
application under this paragraph, the immigration judge may consider 
and base the decision on information not contained in the record and 
not made available for inspection by the respondent, provided the 
Commissioner has determined that such information is relevant and is 
classified under Executive Order No. 12356 (47 14874, April 6, 1982) as 
requiring protection from unauthorized disclosure in the interest of 
national security. Whenever the immigration judge believes that he or 
she can do so while safeguarding both the information and its source, 
the immigration judge should inform the respondent of the general 
nature of the information in order that the respondent may have an 
opportunity to offer opposing evidence. A decision based in whole or in 
part on such classified information shall state that the information is 
material to the decision.
* * * * *
    Dated: November 5, 1993.
Doris Meissner,
Commissioner, Immigration and Naturalization Service.
[FR Doc. 94-391 Filed 1-7-94; 8:45 am]
BILLING CODE 4410-10-Ms