[Federal Register Volume 59, Number 98 (Monday, May 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12524]


[[Page Unknown]]

[Federal Register: May 23, 1994]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

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: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule implements provisions of section 121 of the 
Immigration Act of 1990, by providing for removal of conditional 
resident status of certain alien entrepreneurs, their spouses, and 
children. It sets forth the standards and procedures for the removal of 
the conditional basis of permanent resident status through the filing 
of a petition by the alien entrepreneur. This rule will allow alien 
entrepreneurs to continue their commercial enterprise while providing 
jobs in the United States.

EFFECTIVE DATE: May 23, 1994.

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:

Background

    As part of the Immigration Act of 1990, Public Law 101-649, 
November 29, 1990, Congress created the Employment Creation immigrant 
visa category under section 203(b)(5) of the Immigration and 
Nationality Act (Act). Section 203(b)(5) of the Act sets aside 
immigrant visas for aliens seeking to enter the United States for the 
purpose of engaging in a new commercial enterprise. To qualify under 
this immigrant visa category, the alien must invest $1,000,000 (or 
$500,000 in certain targeted areas) and create at least ten full-time 
jobs. On November 29, 1991, the Immigration and Naturalization Service 
(Service) issued a final regulation on implementing the provisions of 
section 203(b)(5) of the Act.
    Under section 121 of the Immigration Act of 1990 (section 216A of 
the Act), Congress determined that aliens admitted to the United States 
under the Employment Creation category as alien entrepreneurs and their 
spouses and children should be admitted as conditional permanent 
residents as a means to deter immigration-related entrepreneurship 
fraud. Section 216A of the Act provides for a two-year conditional 
resident status for alien entrepreneurs and their spouses and unmarried 
children. It also provides for termination of status if the Service 
determines that the qualifying commercial enterprise was improper and 
sets forth the criteria and procedures for the alien entrepeneur to 
remove conditional resident status.

Termination of Conditional Resident Status

    Section 216A(b) of the Act calls for the termination of the alien's 
conditional permanent resident status during the two-year period if the 
Service determines that establishment of the commercial enterprise was 
intended solely as a means to evade United States immigration laws; 
that the alien did not establish the new commercial enterprise; 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 his or her status. 
In addition, in light of Congress' intent to prevent further processing 
of an alien's visa if it becomes known that the alien obtained the 
money invested through other than legal means, this regulation adds an 
additional ground to terminate an alien entrepreneur's conditional 
permanent resident status. Section 216A(b) of the Act provides that if 
the Service decides to terminate the alien entrepreneur's conditional 
permanent resident status, the alien shall be notified of such decision 
and may request a review of the Service's determination in a 
deportation proceeding. In a deportation proceeding, the Service has 
the burden of proof to establish by a preponderance of the evidence 
that one of the reasons for termination is true. Accordingly, 8 CFR 
216.3 will be revised to allow for termination of conditional permanent 
resident status for alien entrepreneurs.

Petition for Removal of Conditions

    Section 216A(c)(1) and 216A(d)(2)(A) of the Act require that the 
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. The final regulation provides 
that the alien entrepreneur file Form I-829, Petition by Entrepreneur 
to Remove Conditions, with the Service Center having jurisdiction over 
the location of the alien's commercial enterprise. The petition should 
include the alien entrepreneur's spouse and children, even if the 
children marry or reach the age of twenty-one during the period of 
conditional residence. The final rule also permits the spouse and 
children of a deceased principal alien entrepreneur to file a petition 
and have conditions removed, if the spouse and/or children can show 
that, despite the entrepreneur's death, the requirements for removal of 
conditions have been met.
    Under the final regulation, the Service Center will review the 
petition for removal of conditions. 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 director will render a decision on the petition. 
If the director determines that an interview is needed, the Service 
Center director will schedule the alien entrepreneur for an interview 
at a local Service district office or sub-office having jurisdiction 
over the alien's commercial enterprise. The district director will then 
render a decision on the petition.
    If the alien entrepreneur fails to file a timely petition for 
removal of conditions or, without good cause shown, fails to appear for 
a scheduled personal interview, the alien's status will be terminated 
and an order to show cause will be issued. The Service's decision may 
be reviewed in deportation proceedings, but, in all instances, the 
burden will rest with the alien to show compliance with the filing and 
interview requirements. The Service may accept and consider a late 
petition if the alien demonstrates good cause and extenuating 
circumstances for failing to file a timely petition.

Decision on Petition

    Section 216A(d)(1) of the Act provides that each petition shall 
contain facts and information demonstrating that a commercial 
enterprise was established by the alien, the alien invested or was 
actively in the process of investing the requisite capital, and the 
alien sustained the commercial enterprise and the investment of the 
required capital during the two years of conditional residence. Under 8 
CFR 216.6(a)(4)(iii), 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'' permits the Service 
maximum flexibility in determining whether the requirements for removal 
of conditional resident status have been met, as well as following 
Congress' intent to ensure 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.'' See S. Rep. No. 101-55, 101st Cong., 1st Sess. 22 
(1989). The Service recognizes that a bona-fide and good faith 
investment may not, by the end of the two-year period, meet all the 
expectations envisioned when the alien entrepreneur obtained 
conditional resident status. The determination of whether the alien 
entrepreneur has invested a substantial portion of the requisite 
capital in good faith will be made on a case-by-case basis. As 
discussed in the preamble to the proposed rule, in determining whether 
the alien entrepreneur has demonstrated that he or she invested the 
requisite capital in good faith, the Service will examine his or her 
intent based on both objective and subjective standards. See 59 FR 
1317-18. The alien entrepreneur has the burden of proof that he or she 
has, in good faith, substantially met the capital investment 
requirement of the statute and continuously maintained his or her 
capital investment during the two-year conditional resident period.
    On January 10, 1994, at 59 FR 1317-1323, the Service published a 
proposed rule with request for comments in the Federal Register. 
Interested persons were invited to submit written comments on or before 
February 9, 1994. The Service received three comments relating to the 
proposed rule.

Comments

    Two commenters criticized the proposed regulation for lacking any 
time limits for the Service to adjudicate a petition for removal of 
conditions. One commenter suggested that if the Service takes no action 
on a petition, the petition should be automatically granted after a set 
period of time.
    Section 216A(c)(3) of the Act provides that the Attorney General 
make a determination on a petition to remove conditions within 90 days 
of the date the petition is filed or within 90 days of the interview, 
whichever is later. Accordingly, 8 CFR 216.6(b)(1) of the proposed 
regulation states that the Service Center director must either waive 
the interview requirement and adjudicate the petition or arrange for an 
interview within 90 days of the date the alien entrepreneur filed the 
petition. This regulation is, of course, subject to the provisions of 8 
CFR 103.2(b)(10)(i). 8 CFR 216.6(c)(1) provides that a decision on a 
petition shall be made within 90 days of the date of filing or within 
90 days of the date of interview, whichever is later. The above 
provisions in the proposed regulation adequately address the 
commenters' concerns as well as meet the adjudication time line set 
forth in section 216A(c)(3) of the Act.
    There is no provision in section 216A requiring the Service to 
approve a petition if the Service fails to adjudicate a petition within 
90 days after filing or after an interview. Section 216A(c)(3) of the 
Act states that the Service must make a determination whether the facts 
and information described in the contents of the petition are true. 
Requiring the Service to ``automatically'' approve a petition after the 
90-day period has elapsed would be contrary to the language of section 
216A(c)(3) of the Act.
    Two of the commenters suggested that the Service list additional 
types of evidence in 8 CFR 216.6(a)(4)(ii) to show that the alien 
invested or was actively in the process of investing the requisite 
capital. This regulation states that such evidence may include, but is 
not limited to, an audited financial statement. The commenters 
contended that although an audited financial statement is only a 
suggested document, it might set too high a standard in the mind of a 
Service examiner. They suggested other types of evidence such as bank 
statements or certificates from certified public accountants or 
officers of the investment entity.
    As clearly stated in the regulation, an audited financial statement 
is only a suggested type of evidence. There is no basis for the 
contention that mentioning an audited financial statement in the 
regulation would set too high a standard. The Service recognizes that 
it is not common practice for all companies to have audited financial 
statements. The regulation will be amended to include ``other probative 
evidence'' indicating establishment of a commercial enterprise. The 
Service notes that it is possible that the evidence necessary to meet 
the documentation requirements of 8 CFR 216.6(a)(4)(iii), such as bank 
statements, would be sufficient to meet the evidence required under 8 
CFR 216.6(a)(4)(i) and (ii). Accordingly, 8 CFR 216.6(a)(4)(ii) will be 
amended to also include ``other probative evidence'' that a commercial 
enterprise has been established.
    Two of the commenters were concerned that proposed 8 CFR 
216.6(a)(4)(iii) requires that the alien entrepreneur make the full 
capital investment in cash within the two-year conditional residence 
period. They argued that the wording of the proposed regulation should 
specifically cover situations where only a portion of the capital in 
the form of cash has been invested, with the remainder of the capital 
to be invested by the commercial enterprise. The proposed regulation 
refers to substantially meeting and maintaining the alien 
entrepreneur's capital investment. See 8 CFR 216.6(a)(4)(iii). As noted 
previously in this preamble, the regulation contemplates certain 
limited circumstances in which the entire amount of the requisite 
capital has not been invested by the end of the two-year period. 
Further, the word capital refers not only to a cash investment, but 
also to other types of investments which meet the definition of capital 
found in 8 CFR 204.6(e). The proposed regulation is sufficiently 
flexible to permit situations in which the requisite capital invested 
is in a form other than cash. For these reasons, the proposed rule, 
therefore, will not be amended.
    One commenter contended that the Service should state in the 
regulations that a good faith commitment on a debt agreement, which is 
secured by the alien entrepreneur's assets, should suffice to meet the 
requirement that the alien entrepreneur has, in good faith, 
substantially met the capital investment requirement of the statute and 
continuously maintained the investment. Under the statute, changing the 
wording of the regulation to include a good faith commitment is not 
warranted. Section 216A(d)(1) of the Act requires that the alien 
entrepreneur invested or was actively in the process of investing the 
requisite capital and sustained those actions during the two-year 
conditional residence period. The language of section 216A(d)(1)(B) of 
the Act uses the past, rather than the present, tense in requesting 
information showing that the alien entrepreneur invested or was 
actively in the process of investing the requisite capital. While there 
is no statutory requirement with respect to when the requisite capital 
must have been invested during the two-year period, it is clear that, 
by using the past tense, Congress expressed its intent that 
substantially all of the requisite capital be invested by the alien 
entrepreneur before the expiration of conditional resident status. 
Accordingly, the Service will not adopt the commenter's suggestion.
    Two commenters recommended that the divorced spouse of the 
principal entrepreneur be entitled to have his or her conditional 
resident status removed. One of those commenters also suggested that 
children who reach the age of 21 or marry during the conditional 
residence period should be able to have their conditional resident 
status removed. Section 216.6(a)(1) of the proposed regulation clearly 
states that children who marry or reach the age of 21 during the 
conditional residence period can be included in the principal alien 
entrepreneur's petition to remove the conditions. The Service has 
carefully considered the commenters' suggestion that divorced spouses 
of alien entrepreneurs should also be allowed to remove their 
conditional residence status. The Service agrees with the commenters 
that divorced spouses of alien entrepreneurs should be able to remove 
their conditional resident status as long as the divorce occurred 
during the conditional residence period. Accordingly, section 
216.6(a)(1) of the final regulation will allow divorced spouses of 
alien entrepreneurs to remove their conditional resident status. The 
children and the present or former spouse of the alien entrepreneur may 
be included in the entrepreneur's petition to remove the conditions or 
they may file a separate petition to remove conditions. They are 
eligible to have their conditional resident status removed only if the 
Service removes the alien entrepreneur's conditional resident status.
    Two commenters urged the Service to state in the regulations that 
the legality of the source of the alien entrepreneur's funds should be 
determined by U.S., rather than foreign standards. The commenters are 
concerned that aliens would be precluded from applying lawfully 
acquired funds which were taken out of a country in violation of its 
export currency laws and placed in a new commercial enterprise in the 
United States as qualifying capital. The only provision in the proposed 
regulations concerning source of capital is 8 CFR 216.3(a), which 
states that the Service shall terminate the alien entrepreneur's status 
if it becomes known to the government that the alien obtained his or 
her capital through other legal means (such as through the sale of 
illegal drugs). When the alien files Form I-526, Immigrant Petition by 
Alien Entrepreneur, he or she must show that the capital invested was 
obtained through lawful means. See 8 CFR 204.6(j)(3). The commenters' 
suggestion is more appropriately addressed to 8 CFR 204.6(j)(2)(ii), 
which addresses this issue in more detail. The Service notes, however, 
that without more specific information about the particular country's 
currency restriction laws, it is difficult to determine whether 
capital, in a given case, was obtained through other than lawful means. 
Each petition must be adjudicated on a case-by-case basis. Accordingly, 
the Service does not feel that it is appropriate to amend this 
regulation.

Regulatory Flexibility Act

    The Commissioner of the Immigration and Naturalization Service, in 
accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has 
reviewed this regulation and by approving it certifies that this rule 
will not have a significant economic impact on a substantial number of 
small entities. This rule is intended to allow alien entrepreneurs to 
continue their commercial enterprises thereby providing jobs in the 
United States. This 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. This rule, therefore, 
will have, at most, an indirect and attenuated effect on such business 
entities.

Executive Order 12866

    This rule is not considered by the Department of Justice, 
Immigration and Naturalization Service, to be a ``significant 
regulatory action'' under Executive Order 12866, section 3(f), 
Regulatory Planning and Review, and the Office of Management and Budget 
has waived its review process under section 6(a)(3)(A).

Executive Order 12612

    The regulation will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 12612, it is determined that this rule does not have sufficient 
federalism implications to warrant the preparation of a federalism 
assessment.

Executive Order 12606

    The Commissioner of the Immigration and Naturalization Service 
certifies that she has addressed this rule in light of the criteria in 
Executive Order 12606 and has determined that it will have no effect on 
family well-being.
    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. The OMB control number 
for the Form I-829 is 1115-0190.

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 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 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 unrelinquished 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 provisions 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 the 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. Section 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.
    11. 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''.
    12. 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.
* * * * *
    13. 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)''.
    14. In Sec. 216.4, paragraph (a)(6) is amended in the first 
sentence by removing the phrase ``or Form I-752''.
    15. 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]

    16. In Sec. 216.5, paragraphs (b) and (c) are amended by revising 
the phrase ``Form I-752'' to read: ``Form I-751''.
    17. 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 and the former spouse of an entrepreneur, who was 
divorced from the entrepreneur during the period of conditional 
permanent residence, may be included in the alien entrepreneur's 
petition or may file a separate 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 or other 
probative evidence; and
    (iii) Evidence that the alien sustained the actions described in 
paragraph (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 resident 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 resident 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 
permanent resident 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 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 resident status, 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 resident 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 reason(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

    18. 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.

    19. 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 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

    20. 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.

    21. 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 FR 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: April 21, 1994.
Doris Meissner,
Commissioner, Immigration and Naturalization Service.
[FR Doc. 94-12524 Filed 5-20-94; 8:45 am]
BILLING CODE 4410-10-M