[Federal Register Volume 60, Number 96 (Thursday, May 18, 1995)]
[Rules and Regulations]
[Pages 26676-26683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12272]



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DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

8 CFR Parts 212, 245, and 248

[INS No. 1688-95]
RIN 1115-AD89


Waiver of the Two-Year Home Country Physical Presence Requirement 
for Certain Foreign Medical Graduates

AGENCY: Immigration and Naturalization Service, Justice.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule amends the Immigration and Naturalization Service 
(Service) regulations by allowing certain foreign medical graduates who 
entered the United States in J-1 status, or who acquired J-1 status 
after arrival in the United States, to obtain a waiver of the 2-year 
home country residence and physical presence requirement under section 
212(e)(iii) of the Immigration and Nationality Act (Act) pursuant to a 
request by a State Department of Public Health, or its equivalent. The 
waiver is intended to permit these foreign medical graduates to work at 
a health care facility in an area designated by the Secretary, Health 
and Human Services (HHS), as having a shortage of health care 
professionals (``HHS-designated shortage area''). This interim rule 
also contains provisions which will permit these foreign medical 
graduates to change their nonimmigrant status in the United States from 
J-1 exchange visitor to H-1B specialty occupation worker.

DATES: This interim rule is effective May 18, 1995. Written comments 
must be received on or before July 17, 1995.

ADDRESSES: Please submit written comments, in triplicate, to the 
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 INS number 1688-95 
on your correspondence. Comments are available for public inspection at 
this location by calling (202) 514-3048 to arrange an appointment.

FOR FURTHER INFORMATION CONTACT:
Sophia Cox, Senior Adjudications Officer, Adjudications Division, 
Immigration and Naturalization Service, 425 I Street NW., Room 3214, 
Washington, DC 20536, telephone (202) 514-5014.

SUPPLEMENTARY INFORMATION: 

Background

    Under section 212(e) of the Act, certain J-1 exchange visitors (and 
their J-2 dependent spouse and children) are subject to a 2-year home 
country residence and physical presence requirement (the ``2-year 
requirement''). Exchange visitors (and dependents) who are subject to 
this requirement must reside and be physically present in their country 
of nationality or last residence abroad (``home'' country) for an 
aggregate of at least 2 years following departure from the United 
States. J-1/J-2 exchange visitors who are subject to the 2-year 
requirement are not allowed to change their nonimmigrant status to, or 
be admitted to the United States under the H (temporary worker or 
trainee) or L (intracompany transferee) nonimmigrant categories, or 
acquire lawful permanent resident status, unless they have complied 
with this requirement or have been granted a waiver thereof.
    The following categories of exchange visitors (and their 
accompanying spouse and children in dependent J-2 status) are subject 
to the 2-year requirement: (a) Those whose J-1 program was financed in 
whole or in part by an agency of the U.S. Government, or by the 
government of their ``home'' country; (b) those whose field of 
specialized knowledge or skill, as indicated on Form IAP-66 
(Certificate of Eligibility), is required in their home country; and 
(c) those who entered the United States in J-1 status (or who acquired 
J-1 status subsequent to arrival in the United States) to receive 
graduate medical education or training.
    Under section 212(e) of the Act, a waiver of the 2-year requirement 
may be granted by the Service upon the favorable recommendation of the 
Director of the United States Information Agency (USIA). Waivers can be 
obtained on the basis of: (a) Exceptional hardship to the applicant's 
U.S. citizen or permanent resident [[Page 26677]] spouse or children; 
(b) persecution on account of race, religion, or political opinion; (c) 
a ``no objection'' statement issued by the applicant's ``home'' 
country; or (d) a request made to USIA by an interested U.S. Government 
agency to recommend a waiver to the Service, because the applicant's 
work is deemed to serve the public interest. By statute, in the case of 
foreign medical graduates who entered the United States to receive 
graduate medical education or training (and accompanying J-2 
dependents), a ``no objection'' statement does not constitute a basis 
for USIA to recommend a waiver to the Service. Therefore, even if a 
``no objection'' statement on behalf of such a foreign medical graduate 
has been issued, the Service is statutorily required to deny the waiver 
application, if such a statement forms the only basis for the waiver 
request.
    A substantial number of foreign medical graduates pursue waivers of 
the 2-year requirement through requests by an interested U.S. 
Government agency. Prior to the enactment of section 220 of the 
Immigration and Nationality Technical Corrections Act of 1994 (1994 
Technical Corrections Act), Pub. L. 103-416, 108 Stat. 4310, 4319-4320, 
dated October 25, 1994, only Federal Government agencies were 
considered to be an ``interested United States Government agency'' 
eligible to submit a waiver request to USIA on behalf of a J-1 exchange 
visitor. Because State governments were not permitted to act as 
interested government agencies, they were required to solicit the 
assistance of an appropriate Federal agency. Section 212(e)(iii) of the 
Act, as amended by section 220(b) of the 1994 Technical Corrections 
Act, now permits State Departments of Public Health, or their 
equivalent, to submit waiver requests for foreign medical graduates 
directly to USIA, provided that certain conditions have been met, as 
explained below.
    As noted, under section 212(e) of the Act, the Service may not 
approve the applicant's waiver request unless the Director of the USIA 
has issued a favorable waiver recommendation. If USIA issues a 
favorable waiver recommendation, it notifies the Service thereof. 
Section 212(e) of the Act permits, but does not require, the Attorney 
General to grant the waiver pursuant to a favorable USIA 
recommendation. On the other hand, if USIA issues an unfavorable waiver 
recommendation, the Service must deny the waiver application. The 
Service's decision to deny the application may not be appealed, if the 
denial is based on lack of a favorable USIA waiver recommendation. 
Section 212(e) waivers are valid only for those exchange programs 
indicated in the waiver request. Any subsequent J program extension or 
program transfer may re-subject the exchange visitor (and his or her 
dependents) to the 2-year requirement.
    Under current procedures, an application form is not required when 
the waiver application is based on an interested U.S. Government agency 
request or a no objection statement. Similarly, a form will not be 
required to apply for a waiver based on a request by a State Department 
of Public Health. The Service is in the process of developing an 
omnibus form to be used for all waiver applications, including waivers 
of the 2-year requirement. It should be noted that the burden rests on 
the applicant to establish eligibility for a waiver of the 2-year 
requirement. In certain cases, therefore, the Service may require other 
documentation from the applicant besides the favorable USIA 
recommendation to fully assess his or her waiver eligibility.
    After the Service approves an application for a waiver of the 2-
year requirement, the J-1 exchange visitor may seek H nonimmigrant 
status in order to engage in temporary employment for the organization 
or entity named in the waiver application. Foreign medical graduates 
who wish to work temporarily in the Unites States once a waiver of the 
2-year requirement has been granted may seek H-1B classification as a 
specialty occupation worker. An alien may obtain H-1B status either 
through the simultaneous filing of an H-1B petition by the prospective 
employer and a change of status application by the alien, if the alien 
is in the United States, or through the filing of an H-1B petition 
alone and the alien subsequently obtaining the visa at a consular post 
abroad. Change of status applications are governed by section 248 of 
the Act. To request a change of nonimmigrant status from J-1 to H-1B, a 
change of status application must be filed simultaneously with the H-1B 
nonimmigrant visa petition, if the applicant is eligible. Once the H-1B 
petition and change of status application are approved, the alien will 
be permitted to remain in the United States and commence temporary 
employment with the employer or organization named in the approved H-1B 
petition.
    As 8 CFR 248.2(c) currently reads, foreign medical graduates (and 
their dependents) who entered the United States on J-1 visas (or who 
acquired J-1 status after admission) to pursue graduate medical 
education or training are ineligible to apply for change of status 
under section 248 of the Act, even if a waiver of the 2-year 
requirement has been granted. This interim regulation revises 8 CFR 
248.2(c) to conform with section 220 of the 1994 Technical Corrections 
Act. Accordingly, this interim regulation provides that foreign medical 
graduates who received a waiver of the 2-year requirement pursuant to a 
request by a State Department of Public Health, or its equivalent, may 
apply for change of status from J-1 to H-1B, if they other wise satisfy 
the change of status criteria found under section 248 of the Act.

Public Law 103-416

    Section 220 of the 1994 Technical Corrections Act, enacted on 
October 25, 1994, permits the Service to grant a waiver of the 2-year 
requirement to a limited number of foreign medical graduates who have 
received a bona fide offer of full-time employment and who agree to 
practice medicine at a health care facility located in an HHS-
designated shortage area. Any foreign medical graduate who is subject 
to the 2-year requirement, and who meets the eligibility criteria, may 
apply for a waiver under Pub. L. 103-416, regardless of whether he or 
she is physically present in the United States.
    To be eligible for the waiver, the foreign medical graduate must 
enter into an employment contract to practice medicine full-time for at 
least 3 years at a health care facility located in the HHS-designated 
shortage area, and must agree to commence such employment within 90 
days of receipt of the waiver. The Service may grant the waiver only if 
the Department of Public Health, or its equivalent, of the State where 
the foreign medical graduate will be employed, submits a formal request 
to USIA for a waiver recommendation, and USIA submits a favorable 
waiver recommendation to the Service. Although the State Department of 
Public Health, or its equivalent, must request the waiver on behalf of 
the foreign medical graduate, the health care facility at which the 
foreign medical graduate will work need not actually be owned or 
operated by the State.
    The Service notes that section 220 of Pub. L. 103-416 does not 
expressly waive the 2-year requirement for the accompanying spouse or 
children of the foreign medical graduate. Longstanding Service policy, 
however, permits J-1 exchange visitors to include their J-2 dependent 
spouse and children in the waiver application. Consequently, a foreign 
medical graduate seeking a waiver of the 2-year requirement under 
section 220 of Pub. L. 103-416 shall be [[Page 26678]] permitted to 
include his or her accompanying J-2 spouse and children in the waiver 
application.

Foreign Medical Graduate

    In the context of this interim rule, a foreign medical graduate 
refers specifically to a foreign national who has graduated from a 
medical school outside of the United States, and who acquired J-1 
status to pursue graduate medical education or training in the United 
States. Foreign medical graduates seeking J-1 classification to pursue 
graduate medical education or training in the United States are subject 
to strict requirements set forth in section 212(j)(1) of the Act, and 
are subject to the 2-year requirement.

State Department of Public Health, or its Equivalent

    Section 220 of Pub. L. 103-416 amends section 212(e)(iii) of the 
Act by permitting State Departments of Public Health (or their 
equivalent), in addition to U.S. Federal Government agencies, to submit 
requests for waiver recommendations directly to USIA on behalf of 
foreign medical graduates. Section 101(a)(36) of the Act defines the 
term ``State'' to include the District of Columbia, Puerto Rico, Guam, 
and the U.S. Virgin Islands, in addition to the 50 states. The same 
definition will apply to the term ``State'' in this rule. Further, it 
is the opinion of the Service that the statutory term ``State 
Department of Public Health, or its equivalent'' means the State agency 
or department that is responsible for public health issues, regardless 
of what the actual name of that agency or department is under State 
law.
Restrictions Imposed on the Waiver and the Change of Status Application

    Section 214(k) of the Act, as added by section 220 of Pub. L. 103-
416, imposes restrictions on waivers of the 2-year requirement for 
foreign medical graduates, when the application is based on a request 
by a State Department of Public Health, or its equivalent. By imposing 
conditions under section 214(k) of the Act, Congress manifested its 
intent that waivers of the 2-year requirement be granted only under 
strictly limited and controlled circumstances.
    No objection statements. Section 214(k)(1)(A) of the Act provides 
that ``in the case of an alien who is otherwise contractually obligated 
to return to a foreign country, the government of such country (must) 
furnish ( ) the Director of the United States Information Agency with a 
statement in writing that it has no objection to the waiver.'' The 
foreign medical graduate seeking the waiver is responsible for ensuring 
that the ``no objection'' statement is provided directly to USIA. This 
additional requirement applies only when the foreign medical graduate 
seeks a waiver of the 2-year requirement pursuant to a request by a 
State Department of Public Health (or its equivalent). USIA addresses 
the question of what constitutes a contractual obligation in the 
preamble to its interim rule amending 22 CFR 514.44(e)(2), which was 
published in the Federal Register on April 3, 1995, at 60 FR 16785-
16788.
    Employment contracts. Section 214(k)(1)(B) of the Act provides that 
the Service may grant a waiver of the 2-year requirement based on a 
request by a State Department of Public Health only if the foreign 
medical graduate demonstrates a bona fide offer of full-time employment 
at a health facility and agrees to begin such employment within 90 days 
of receipt of the waiver. Section 214(k)(1)(B) of the Act also provides 
that the foreign medical graduate must agree to continue working at the 
health care facility named in the employment contract for at least 3 
years. Such employment must be in accordance with the provisions of 
section 214(k)(2) of the Act. The USIA's implementing regulations at 22 
CFR 514.44(e)(3)(B) therefore provide that the State Department of 
Public Health is required to submit the actual contract between the 
alien and the health care facility at the time the request for the 
favorable recommendation is made.
    HHS-designated shortage areas. Section 214(k)(1)(C) of the Act 
provides that the foreign medical graduate must agree to practice 
medicine in accordance with section 214(k)(2) of the Act for at least 3 
years ``only in the geographic area or areas which are designated by 
the Secretary of Health and Human Services as having a shortage of 
health care professionals.'' Since the Service is bound by HHS' 
determination of what constitutes a ``geographic area or areas * * * 
having a shortage of health care professionals,'' the request of a 
State Department of Public Health (or its equivalent), standing alone, 
cannot be deemed sufficient to meet his statutory requirement. The 
waiver application must be accompanied by evidence establishing that 
the geographic area or areas in which the foreign medical graduate will 
practice medicine are in HHS-designated shortage areas.
    Numerical limitations on waivers under Pub. L. 103-416. Section 
214(k)(1)(D) of the Act limits to 20-per-state the number of waivers 
the Service may grant under Pub. L. 103-416 each fiscal year. 
Consequently, if the Director of USIA issues a favorable waiver 
recommendation under Pub. L. 103-416, but the State requesting the 
waiver already has exhausted its annual waiver allotment, the Service 
is statutorily required to deny the waiver application. Accordingly, 
this rule provides that no appeal shall lie where the basis for denial 
is that the State has already been granted 20 waivers for that fiscal 
year.
    Completion of the required 3-year employment contract as an H-1B 
nonimmigrant and change of nonimmigrant status from J-1 to H-1B. The 
restrictions imposed by Congress under section 214(k)(1) and (2) of the 
Act were intended to ensure that waivers of the 2-year requirement 
under Pub. L. 103-416 are granted only under strictly limited and 
controlled circumstances. These restrictions were also intended to 
ensure that foreign medical graduates who receive such a waiver 
actually provide health care services to those living HHS-designated 
shortage ares.
    Under section 248(2) of the Act, a foreign medical graduate who 
came to the United States in J classification or acquired J 
classification in order to receive graduate medical education or 
training would normally be prohibited from filing an application for 
change of status. Section 214(k)(2)(A) of the Act, as added by section 
220 of Pub. L. 103-416, however, provides that ``notwithstanding 
section 248(2), the Attorney General may change the status of an alien 
that qualifies under this subsection and section 212(e) to that of an 
alien described in section 101(a)(15)(i)(b).'' Section 214(k)(2) of the 
Act, as added by section 220 of Pub. L. 103-416 also states that no 
foreign medical graduate who has been granted a waiver and a change of 
nonimmigrant status from J-1 to H-1B, and who has failed to complete 
the 3-year employment contract with the sponsoring health care 
facility, shall be eligible to apply for an immigrant visa, for 
permanent residence, or for change of status to any other nonimmigrant 
category, until it has been established that he or she has resided and 
been physically present in his or her home country for an aggregate of 
2 years following departure from the United States. Thus, section 
212(k)(2) of the Act allows the foreign medical graduate to apply for 
change of nonimmigrant status from J-1, only to H-1B upon approval of 
the waiver, and also stipulates that a foreign medical graduate who 
fails to fulfill the required 3-year employment contract again becomes 
subject to the 2-year requirement. Taken together, these two provisions 
indicate that Congress [[Page 26679]] did not intend to permit the 
foreign medical graduate to proceed from J-1 status directly to lawful 
permanent resident status upon approval of the waiver.
    Based on the above, the Service is of the opinion that, in enacting 
section 214(k) of the Act, Congress manifested its clear intent to 
require all foreign medical graduates, including those seeking to 
adjust their status or immigrate to this country, as well as those 
immediately changing status from J-1 to H-1B, to fulfill the 3-year 
employment contract or become subject to the 2-year requirement. To 
enable the Service to maintain control over the foreign medical 
graduate's stay in the United States in the manner intended by 
Congress, this interim rule provides that the foreign medical graduate 
must actually fulfill the contract with the health care facility named 
in the waiver application prior to obtaining permanent residence, or 
any nonimmigrant status other than H-1B. Accordingly, this interim 
regulation provides that a foreign medical graduate who received a 
waiver of the 2-year requirement under Pub. L. 103-416 may not apply 
for a change of status to another nonimmigrant category, for an 
immigrant visa, or for status as a lawful permanent resident prior to 
completing the required 3-year employment contract as an H-1B 
nonimmigrant with the health care facility named in the waiver 
application.
    Eligibility to apply for change of status from J-1 to H-1B. While 
section 214(k)(2)(A) of the Act allows foreign medical graduates who 
received a waiver under Pub. L. 103-416 to apply for change of status 
from J-1 to H-1B (and their dependents from J-2 to H-4), it does not 
excuse the late filing of the application. Foreign medical graduates 
who have been granted a waiver of the 2-year requirement under Pub. L. 
103-416, must be in valid J status when the change of status 
application is filed. Service regulations at 8 CFR 214.2(j)(1)(ii) 
provide that J-1 exchange visitors may be admitted to the United States 
for the duration of the exchange program, as noted on Form IAP-66, and 
an additional 30 days for travel. While J-1 exchange visitors are not 
authorized to work during this 30-day grace period (see 
Sec. 274a.12(b)(11)), they are considered to be ``in status'' for 
purposes of applying for change of status under section 248 of the Act.
    To prevent the foreign medical graduate from falling out of lawful 
nonimmigrant status, the Service encourages the State Department of 
Public Health to allow ample time for processing the waiver and 
subsequent filing and processing of the H-1B petition and change of 
status application. Foreign medical graduates who received a waiver 
under section 220 of Pub. L. 103-416 and whose J nonimmigrant stay has 
expired, or who have engaged in unauthorized employment, are ineligible 
to apply for change of status under section 248 of the Act. Such 
persons would not be precluded, however, from procuring an H-1B visa at 
a U.S. consular post abroad and seeking readmission to the United 
States in H-1B status to commence employment with the sponsoring health 
care facility.
    Numerical limitations imposed on the issuance of H-1B visas. 
Although section 214(k)(2)(A) of the Act eases the change of status 
restrictions under section 248(2) of the Act, it does not ease the 
annual numerical limitations imposed on the H-1B specialty worker 
category under section 214(g)(1)(A) of the Act. Consequently, the 
Service would not be prohibited from granting a waiver of the 2-year 
requirement under Pub. L. 103-416, but would be statutorily prohibited 
from according H-1B status to the foreign medical graduate, if the 
annual numerical limitations imposed on the issuance of H-1B visas 
under section 214(g)(1)(A) of the Act have been reached.
    Control measures to be implemented by the Service. As noted, 
waivers of the 2-year requirement pursuant to Pub. L. 103-416 are based 
on the premise that the foreign medical graduate's work at a health 
care facility will assist States in coping with health care shortages. 
To ensure compliance with section 214(k) of the Act, and to ensure that 
the public receives the intended benefit, the Service will implement 
the following measures.
    The Form I-797 (Notice of Action) (including I-797A and I-797B) 
currently used to notify the alien of the approved waiver and/or change 
of status from J-1 to H-1B, if applicable, will explicitly state the 
terms and conditions of the waiver and change of status. To facilitate 
issuance of the H-1B visa abroad, or admission as an H-1B nonimmigrant 
at the port-of-entry in cases where the foreign medical graduate is 
ineligible or chooses not to apply for change of status, the H-1B 
approval notice shall indicate that he or she has obtained the 
necessary waiver under Pub. L. 103-416. Such notification serves two 
purposes. It ensures that the foreign medical graduate is made fully 
aware of the terms and conditions of his or her waiver and change of 
status. It also alerts the Service officer or State Health Department 
that special conditions have been placed on the alien's nonimmigrant 
status, thereby enabling the officer to take whatever steps are 
necessary to ensure that the alien's file is noted accordingly. When 
the foreign medical graduate's Form I-797 is later presented in support 
of an application for another benefit, such as an amended H-1B 
petition, a new H-1B petition for a different employer, or an 
adjustment of status application, the adjudicating officer will again 
be alerted to the special conditions that have been placed on the 
alien's nonimmigrant status. As a result, the Service will be able to 
verify whether the terms and conditions imposed under section 214(k) of 
the Act have been satisfied. These control measures are reflected in 
this interim rule at 8 CFR 212.7(c)(9)(ii).
Inability To Fulfill the Three-Year Employment Contract Due to 
Extenuating Circumstances

    New section 214(k)(1)(B) of the Act grants the Attorney General 
discretion to excuse early termination of employment upon determining 
that extenuating circumstances so justify. The statute provides that 
extenuating circumstances may include the closure of the health care 
facility or hardship to the alien.
    In determining whether to excuse the foreign medical graduate's 
early termination of employment with the health care facility named in 
the waiver application, the Service will carefully consider whether, 
based on all the facts before it, excusing such early termination would 
be consistent with the purpose of the statute--provision of health care 
services for at least a 3-year period of time in an HHS-designated 
shortage area. Closure of the facility, for example, could, under 
certain circumstances, warrant excusing failure to fulfill the 3-year 
employment contract, provided that the foreign medical graduate can 
establish that he or she has procured employment for the balance of the 
3-year period with another health care facility in an HHS-designated 
shortage area. Similarly, an alien who claims that his or her inability 
to fulfill the 3-year employment contract is due to hardship shall also 
be required to submit evidence of new employment for another health 
care facility in an HHS-designated shortage area. A foreign medical 
graduate who seeks to establish extenuating circumstances on the basis 
of hardship also must submit evidence that the hardship was caused by 
unforeseen circumstances beyond his or her control. In short, before 
the Service will consider excusing the foreign medical graduate's early 
termination of [[Page 26680]] the 3-year employment contract with the 
health care facility named in the waiver application due to extenuating 
circumstances, the alien must submit an employment contract for the 
balance of this period with another health care facility in an HHS-
designated shortage area. See section 214(k)(3) of the Act (the foreign 
medical graduate may only work in HHS-designated shortage areas during 
the required 3-year period of employment following approval of the 
waiver).

Changes in Employment During the Required Three-Year Period Following 
Approval of the Waiver

    Any material change in the alien's H-1B employment must be reported 
to the Service by filing either an amended H-1B petition indicating any 
changes in the terms and conditions of the alien's current H-1B 
employment, or by filing a new petition if the alien seeks to change H-
1B employers, in the manner generally required under current 
regulations at 8 CFR 214.2(h)(2)(i) (D) and (E), and 8 CFR 
214.2(h)(11).
    An amended H-1B petition for a foreign medical graduate who has 
been granted a waiver of the 2-year requirement under Pub. L. 103-416 
shall be accompanied by evidence that he or she will continue 
practicing medicine in an HHS-designated shortage area for the health 
care facility named in the waiver application and in the original H-1B 
petition.
    A foreign medical graduate who has been granted a waiver of the 2-
year requirement under Pub. L. 103-416, who has not fulfilled the 3-
year employment contract with the health care facility named in the 
waiver application, and who seeks to change H-1B employers due to 
extenuating circumstances or hardship is responsible for ensuring that 
the new health care facility files an H-1B petition. In such cases, the 
new petition shall be accompanied by a copy of Form I-797 (or I-797A or 
I-797B, as appropriate) relating to the original H-1B petition and an 
explanation from the alien, with supporting evidence, establishing that 
extenuating circumstances or hardship necessitate a change in 
employment. The new H-1B petition shall also be accompanied by an 
employment contract showing that the alien will practice medicine at 
the health care facility for the balance of the required 3-year period, 
and evidence that the geographic area or areas of intended employment 
designated in the new H-1B petition are in an HHS-designated shortage 
area.
    The Service may consult with the Secretary of HHS to verify whether 
the area of intended employment specified in the new H-1B petition is 
in fact located in an HHS-designated shortage area. Further, in 
exercising its statutory discretion to excuse an alien's failure to 
complete the requisite 3-year employment contract, the Service, if it 
deems appropriate, may consult with USIA, the State Department of 
Public Health which initiated the waiver request, and the health care 
facility named in the original waiver application.
    If, in the exercise of its discretion, the Service determines that 
extenuating circumstances or hardship exist, that employment will 
continue at a health care facility in an HHS-designated shortage area, 
and that both the new petitioner and the beneficiary have otherwise 
satisfied the H-1B eligibility criteria enumerated under 8 CFR 
214.2(h), the new petition may be approved, and the foreign medical 
graduate may be permitted to serve the balance of the 3-year employment 
period at the health care facility named in the new H-1B petition.

Effect of Failure To Abide by the Terms and Conditions of the Waiver 
Granted Under Pub. L. 103-416

    Section 241(a)(1)(C)(i) of the Act provides for the deportation of 
any alien admitted as a nonimmigrant who fails to: (a) Maintain the 
nonimmigrant status under which he or she was admitted; (b) fails to 
maintain the nonimmigrant status to which he or she was changed under 
section 248 of the Act; or (c) fails to comply with the conditions of 
any such nonimmigrant status. J-1 foreign medical graduates who do not 
fulfill the 3-year employment contract for the health care facility 
named in the waiver application (unless the Attorney General has 
determined there are extenuating circumstances or hardship to the 
alien), who do not work in HHS-designated shortage areas, or who change 
employment without permission from the Service, will be deemed not to 
be maintaining their nonimmigrant status or complying with the terms 
and conditions imposed upon the waiver and change of status 
application, and will therefore be deportable under section 
241(a)(1)(C)(i) of the Act.
Application Period

    Section 220(c) of Pub. L. 103-416 states that the statutory 
amendments to section 212(e) of the Act shall apply to aliens admitted 
to the United states under section 101(a)(15)(J) of the Act, or who 
acquire J status after admission to the Unites States before, on, or 
after the date of enactment, and before June 1, 1996. Consistent with 
Congress' intent to relieve health care shortages in HHS-designated 
shortage areas, the Service interprets this provision to mean that any 
foreign medical graduate who entered the United States in J 
nonimmigrant status, or who acquired J status upon arrival to pursue 
graduate medical education or training, before June 1, 1996, is 
eligible to apply for a waiver of the 2-year requirement pursuant to 
section 220 of Pub. L. 103-416, and for subsequent change of 
nonimmigrant status to H-1B. Further, if the foreign medical graduate 
acquired J status before June 1, 1996, in order to pursue graduate 
medical education or training, he or she will be eligible to request a 
section 220 waiver, even if the training is completed after June 1, 
1996.
    Foreign medical graduates who acquire J nonimmigrant status to 
pursue graduate medical education or training on or after June 1, 1996, 
however, will not be eligible to apply for benefits under Pub. L. 103-
416, even if they wish to practice medicine in an HHS-designated 
shortage area. Those foreign medical graduates may, however, pursue a 
non-section 220 waiver under section 212(e) of the Act.

Good Cause Exception

    This interim rule is effective on publication in the Federal 
Register although the Service invites post-promulgation comments and 
will address any such comments in a final rule. For the following 
reasons, the Service finds that good cause exists for adopting this 
rule without the prior notice and comment period ordinarily required by 
5 U.S.C. 553. The provisions of Pub. L. 103-416, which provide a great 
public benefit, are already in effect. Adopting this rule without prior 
notice and comment allows foreign medical graduates whose J status is 
about to expire to apply for the waiver as soon as possible, thereby 
avoiding potential interruption of their lawful status during the 
normal notice and comment period. The rule also enables State 
Departments of Public Health to seek immediately the assistance of 
certain foreign medical graduates to ease local medical care shortages. 
Adopting this rule as an interim rule therefore benefits both foreign 
medical graduates and those who live in HHS-designated shortage areas.

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 
interim rule will not have a significant [[Page 26681]] economic impact 
on a substantial number of small entities because of the following 
factors. This interim rule will have limited or no effect on small 
entities, because only 20 waivers are authorized per State annually to 
foreign medical graduates under Pub. L. 103-416.

Executive Order 12866

    This interim 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 Review, and the Office of Management and Budget has 
waived its review process under section 6(a)(3)(A).

Exetutive Order 12612
    This interim rule will not have substantial direct effect 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. Section 220 of Pub. L. 103-416 merely 
enables the States, in addition to Federal Government agencies, to 
submit waiver requests for foreign medical graduates directly to USIA, 
while preserving the authority of the Federal Government to grant or 
deny such waiver requests. The ability of Federal Government agencies 
to continue submitting waiver requests to USIA is not changed or 
curtailed in any way by this rule. Therefore, in accordance with 
Executive Order 12612, it has been determined that this interim 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 this interim rule has been assessed in light of the 
criteria in Executive Order 12606, and has determined that the 
regulation would enhance family well-being by allowing certain 
dependent
J-2 family members to obtain derivative H-4 status in the United States 
based on the waiver granted to the principal physician and the 
principal's change of status from J-1 to H-1B, without the need to 
travel abroad to procure the nonimmigrant visa and seek re-admission to 
the United States. Permitting such changes of non-immigrant status 
allows the principal physician's dependent spouse and children to: (a) 
Accompany him or her while employed temporarily as an H-1B 
nonimmigrant; and (b) remain in this country on a permanent basis 
should he or she subsequently apply for, and be granted approval of, 
adjustment of status to that of a lawful permanent resident. This rule 
also enhances family well-being by allowing families in HHS-designated 
shortage areas to get much needed medical treatment and care.

Paperwork Reduction Act

    The information collection requirements contained in this interim 
rule have been cleared by the Office of Management and Budget Under the 
provisions of the Paperwork Reduction Act. Clearance numbers for these 
collections are contained in 8 CFR 299.5, Display of Control Numbers.

List of Subjects

8 CFR Part 212

    Administrative practices and procedure, Aliens, Immigration, 
passports and visa, Reporting and recordkeeping requirements.

8 CFR Part 245

    Aliens, Immigration, Reporting and recordkeeping requirements.

8 CFR Part 248

    Aliens, Reporting and Recordkeeping requirements.

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

PART 212--DOCUMENTARY REQUIREMENTS: NONIMMIGRANTS; WAIVERS; 
ADMISSION OF CERTAIN INADMISSIBLE ALIENS; PAROLE

    1. The authority citation for part 212 continues to read as 
follows:

    Authority: 8 U.S.C. 1101, 1102, 1103, 1182, 1184, 1187, 1225, 
1226, 1227, 1228, 1252; 8 CFR part 2.

    2. In Sec. 212.7, paragraphs (c)(9) and (c)(10) are redesignated as 
paragraphs (c)(10) and (c)(11), respectively, and a new paragraph 
(c)(9) and (c)(11), respectively, and a new paragraph (c)(9) is added 
to read as follows:


Sec. 212.7  Waiver of certain grounds of excludability.

* * * * *
    (c) * * *
    (9) Waivers under Pub. L. 103-416 based on a request by a State 
Department of Public Health (or equivalent). In accordance with section 
220 of Pub. L. 103-416, an alien admitted to the United States as a 
nonimmigrant under section 101(a)(15)(J) of the Act, or who acquired 
status under section 101(a)(15)(J) of the Act after admission to the 
United States, to participate in an exchange program of graduate 
medical education or training (as of January 9, 1977), may apply for a 
waiver of the 2-year home country residence and physical presence 
requirement (the ``2-year requirement'') under section 212(e)(iii) of 
the Act based on a request by a State Department of Pubic Health, or 
its equivalent. To initiate the application for a waiver under Pub. L. 
103-416, the Department of Public Health, or its equivalent, or the 
State in which the foreign medical graduate seeks to practice medicine, 
must request the Director of USIA to recommend a waiver to the Service. 
The waiver may be granted only if the Director of USIA provides the 
Service with a favorable waiver recommendation. Only the Service, 
however, may grant or deny the waiver application. If granted, such a 
waiver shall be subject to the terms and conditions imposed under 
section 214(k) of the Act. Although the alien is not required to submit 
a separate waiver application to the Service, the burden rests on the 
alien to establish eligibility for the waiver. If the Service approves 
a waiver request made under Pub. L. 103-416, the foreign medical 
graduate (and accompanying dependents) may apply for change of 
nonimmigrant status, from J-1 to H-1B and, in the case of dependents of 
such a foreign medical graduate, from J-2 to H-4. Aliens receiving 
waivers under section 220 of Pub. L. 103-416 are subject, in all cases, 
to the provisions of section 214(g)(1)(A) of the Act.
    (i) Eligiblity criteria. J-1 foreign medical graduates (with 
accompanying J-2 dependents) are eligible to apply for a waiver of the 
2-year requirement under Pub. L. 103-416 based on a request by a State 
Department of Public Health (or its equivalent) if:
    (A) They were admitted to the United States under section 
101(a)(15)(J) of the Act, or acquired J nonimmigrant status before June 
1, 1996, to pursue graduate medical education or training in the United 
States.
    (B) They have entered into a bona fide, full-time employment 
contract for 3 years to practice medicine at a health care facility 
located in an area or areas designated by the Secretary of Health and 
Human Services as having a shortage of health care professionals 
(``HHS-designated shortage area'');
    (C) They agree to commence employment within 90 days of receipt of 
the waiver under this section and agree to practice medicine for 3 
years at the facility named in the waiver application and only in HHS-
designated shortage areas. The health care facility named in the waiver 
application may be operated by: [[Page 26682]] 
    (1) An agency of the Government of the United States or of the 
State in which it is located; or
    (2) A charitable, educational, or other not-for-profit 
organization; or
    (3) Private medical practitioners.
    (D) The Department of Public Health, or its equivalent, in the 
State where the health care facility is located has requested the 
Director, USIA, to recommend the waiver, and the Director, USIA, 
submits a favorable waiver recommendation to the Service; and
    (E) Approval of the waiver will not cause the number of waivers 
granted pursuant to Pub. L. 103-416 and this section to foreign medical 
graduates who will practice medicine in the same state to exceed 20 
during the current fiscal year.
    (ii) Decision on waivers under Pub. L. 103-416 and notification to 
the alien.--(A) Approval. If the Director of USIA submits a favorable 
waiver recommendation on behalf of a foreign medical graduate pursuant 
to Pub. L. 103-416, and the Service grants the waiver, the alien shall 
be notified of the approval on Form I-797 (or I-797A or I-797B, as 
appropriate). The approval notice shall clearly state the terms and 
conditions imposed on the waiver, and the Service's records shall be 
noted accordingly.
    (B) Denial. If the Director of USIA issues a favorable waiver 
recommendation under Pub. L. 103-416 and the Service denies the waiver, 
the alien shall be notified of the decision and of the right to appeal 
under 8 CFR part 103. However, no appeal shall lie where the basis for 
denial is that the number of waivers granted to the State in which the 
foreign medical graduate will be employed would exceed 20 for that 
fiscal year.
    (iii) Conditions. The foreign medical graduate must agree to 
commence employment for the health care facility specified in the 
waiver application within 90 days of receipt of the waiver under Pub. 
L. 103-416. The foreign medical graduate may only fulfill the requisite 
3-year employment contract as an H-1B nonimmigrant. A foreign medical 
graduate who receives a waiver under Pub. L. 103-416 based on a request 
by a State Department of Public Health (or equivalent), and changes his 
or her nonimmigrant classification from J-1 to H-1B, may not apply for 
permanent residence or for any other change of nonimmigrant 
classification unless he or she has fulfilled the 3-year employment 
contract with the health care facility and in the specified HHS-
designated shortage area named in the waiver application.
    (iv) Failure to fulfill the three-year employment contract due to 
extenuating circumstances. A foreign medical graduate who fails to meet 
the terms and conditions imposed on the waiver under section 214(k) of 
the Act and this paragraph will once again become subject to the 2-year 
requirement under section 212(e) of the Act.
    Under section 214(k)(1)(B) of the Act, however, the Service, in the 
exercise of discretion, may excuse early termination of the foreign 
medical graduate's 3-year period of employment with the health care 
facility named in the waiver application due to extenuating 
circumstances. Extenuating circumstances may include, but are not 
limited to, closure of the health care facility or hardship to the 
alien. In determining whether to excuse such early termination of 
employment, the Service shall base its decision on the specific facts 
of each case. In all cases, the burden of establishing eligibility for 
a favorable exercise of discretion rests with the foreign medical 
graduate. Depending on the circumstances, closure of the health care 
facility named in the waiver application may, but need not, be 
considered an extenuating circumstance excusing early termination of 
employment. Under no circumstances will a foreign medical graduate be 
eligible to apply for change of status to another nonimmigrant 
category, for an immigrant visa or for status as a lawful permanent 
resident prior to completing the requisite 3-year period of employment 
for a health care facility located in an HHS-designated shortage area.
    (v) Required evidence. A foreign medical graduate who seeks to have 
early termination of employment excused due to extenuating 
circumstances shall submit documentary evidence establishing such a 
claim. In all cases, the foreign medical graduate shall submit an 
employment contract with another health care facility located in an 
HHS-designated shortage area for the balance of the required 3-year 
period of employment. A foreign medical graduate claiming extenuating 
circumstances based on hardship shall also submit evidence establishing 
that such hardship was caused by unforeseen circumstances beyond his or 
her control. A foreign medical graduate claiming extenuating 
circumstances based on closure of the health care facility named in the 
waiver application shall also submit evidence that the facility has 
closed or is about to be closed.
    (vi) Notification requirements. A J-1 foreign medical graduate who 
has been granted a waiver of the 2-year requirement pursuant to Pub. L. 
103-416, is required to comply with the terms and conditions specified 
in section 214(k) of the Act and the implementing regulations in this 
section. If the foreign medical graduate subsequently applies for and 
receives H-1B status, he or she must also comply with the terms and 
conditions of that nonimmigrant status. Such compliance shall also 
include notifying the Service of any material change in the terms and 
conditions of the H-1B employment, by filing either an amended or a new 
H-1B petition, as required, under Secs. 214.2(h)(2)(i)(D), 
214.2(h)(2)(i)(E), and 214.2(h)(11) of this chapter.
    (A) Amended H-1B petitions. The health care facility named in the 
waiver application and H-1B petition shall file an amended H-1B 
petition, as required under Sec. 214.2(h)(2)(i)(E) of this chapter, if 
there are any material changes in the terms and conditions of the 
beneficiary's employment or eligibility as specified in the waiver 
application filed under Pub. L. 103-416 and in the subsequent H-1B 
petition. In such a case, an amended H-1B petition shall be accompanied 
by evidence that the alien will continue practicing medicine with the 
original employer in an HHS-designated shortage area.
    (B) New H-1B petitions. A health care facility seeking to employ a 
foreign medical graduate who has been granted a waiver under Pub. L. 
103-416 (prior to the time the alien has completed his or her 3-year 
contract with the facility named in the waiver application and original 
H-1B petition), shall file a new H-1B petition with the Service, as 
required under Secs. 214.2(h)(2)(i) (D) and (E) of this chapter. 
Although a new waiver application need not be filed, the new H-1B 
petition shall be accompanied by the documentary evidence generally 
required under Sec. 214.2(h) of this chapter, and the following 
additional documents:
    (1) A copy of Form I-797 (and/or I-797A and I-797B) relating to the 
waiver and nonimmigrant H status granted under Pub. L. 103-416;
    (2) An explanation from the foreign medical graduate, with 
supporting evidence, establishing that extenuating circumstances 
necessitate a change in employment;
    (3) An employment contract establishing that the foreign medical 
graduate will practice medicine at the health care facility named in 
the new H-1B petition for the balance of the required 3-year period; 
and
    (4) Evidence that the geographic area or areas of intended 
employment indicated in the new H-1B petition are in HHS-designated 
shortage areas. [[Page 26683]] 
    (C) Review of amended and new H-1B petitions for foreign medical 
graduates granted waivers under Pub. L. 103-416 and who seek to have 
early termination of employment excused due to extenuating 
circumstances.--(1) Amended H-1B petitions. The waiver granted under 
Pub. L. 103-416 may be affirmed, and the amended H-1B petition may be 
approved, if the petitioning health care facility establishes that the 
foreign medical graduate otherwise remains eligible for H-1B 
classification and that he or she will continue practicing medicine in 
an HHS-designated shortage area.
    (2) New H-1B petitions. The Service shall review a new H-1B 
petition filed on behalf of a foreign medical graduate who has not yet 
fulfilled the required 3-year period of employment with the health care 
facility named in the waiver application and in the original H-1B 
petition to determine whether extenuating circumstances exist which 
warrant a change in employment, and whether the waiver granted under 
Pub. L. 103-416 should be affirmed. In conducting such a review, the 
Service shall determine whether the foreign medical graduate will 
continue practicing medicine in an HHS-designated shortage area, and 
whether the new H-1B petitioner and the foreign medical graduate have 
satisfied the remaining H-1B eligibility criteria described under 
section 101(a)(15)(H) of the Act and Sec. 214.2(h) of this chapter. If 
these criteria have been satisfied, the waiver granted to the foreign 
medical graduate under Pub. L. 103-416 may be affirmed, and the new H1-
B petition may be approved in the exercise of discretion, thereby 
permitting the foreign medical graduate to serve the balance of the 
requisite 3-year employment period at the health care facility named in 
the new H-1B petition.
    (D) Failure to notify the Service of any material changes in 
employment. Foreign medical graduates who have been granted a waiver of 
the 2-year requirement and who have obtained H-1B status under Pub. L. 
103-416 but fail to: Properly notify the Service of any material change 
in the terms and conditions of their H-1B employment, by having their 
employer file an amended or a new H-1B petition in accordance with this 
section and Sec. 214.2(h) of this chapter; or establish continued 
eligibility for the waiver and H-1B status, shall (together with their 
dependents) again become subject to the 2-year requirement. Such 
foreign medical graduates and their accompanying H-4 dependents also 
become subject to deportation under section 241(a)(1)(C)(i) of the Act.
* * * * *

PART 245--ADJUSTMENT OF STATUS TO THAT OF PERSON ADMITTED FOR 
PERMANENT RESIDENCE

    3. The authority citation for part 245 continues to read as 
follows:

    Authority: 8 U.S.C. 1101, 1103, 1182, 1255; and 8 CFR part 2.


Sec. 245.1  [Amended]

    4. In Sec. 245.1, paragraph (c)(2) is amended by removing the ``;'' 
at the end of the paragraph and replacing it with a ``.''; and by 
adding a new sentence at the end of paragraph (c)(2) to read as 
follows:


Sec. 245.1  Eligibility.

* * * * *
    (c) * * *
    (2) * * * An alien who has been granted a waiver under section 
212(e)(iii) of the Act based on a request by a State Department of 
Health (or its equivalent) under Pub. L. 103-416 shall be ineligible to 
apply for adjustment of status under section 245 of the Act if the 
terms and conditions specified in section 214(k) of the Act and 
Sec. 212.7(c)(9) of this chapter have not been met;
* * * * *

PART 248--CHANGE OF NONIMMIGRANT CLASSIFICATION

    5. The authority citation for part 248 continues to read as 
follows:

    Authority: 8 U.S.C. 1101, 1103, 1184, 1187, 1258; 8 CFR part 2.

    6. In Sec. 248.2, paragraph (c) is amended by removing the ``; 
and'' at the end of the paragraph and replacing it with a ``.''; and by 
adding two new sentences at the end of paragraph (c) to read as 
follows:


Sec. 248.2  Ineligible classes.

* * * * *
    (c) * * * This restriction shall not apply when the alien is a 
foreign medical graduate who was granted a waiver under section 
212(e)(iii) of the Act pursuant to a request made by a State Department 
of Public Health (or its equivalent) under Pub. L. 103-416, and the 
alien complies with the terms and conditions imposed on the waiver 
under section 214(k) of the Act and the implementing regulations at 
Sec. 212.7(c)(9) of this chapter. A foreign medical graduate who was 
granted a waiver under Pub. L. 103-416 and who does not fulfill the 
requisite 3-year employment contract or otherwise comply with the terms 
and conditions imposed on the waiver is ineligible to apply for change 
of status to any other nonimmigrant classification; and
* * * * *
    Dated: April 25, 1995.
Doris Meissner,
Commissioner, Immigration and Naturalization Service.
[FR Doc. 95-12272 Filed 5-17-95; 8:45 am]
BILLING CODE 4410-10-M