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

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.

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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]

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