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

DEPARTMENT OF JUSTICE

8 CFR Parts 103, 211, 216, 235, and 242

[INS No. 1429-92]

RIN 1115-AC53

Conditional Permanent Resident Regulations for Alien

Entrepreneurs, Spouses, and Children

AGENCY: Immigration and Naturalization Service, Justice.

ACTION: Proposed rule.

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SUMMARY: This rule implements provisions of section 121 of the

Immigration Act of 1990, by providing for conditional resident status

to certain alien entrepreneurs, their spouses, and their unmarried

minor children. It also provides for the removal of the conditional

basis of such status through the filing of a petition by the alien

entrepreneur. This rule will allow alien entrepreneurs to continue

their commercial enterprises while providing jobs in the United States.

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

1994.

ADDRESSES: Please submit written comments, in triplicate, to the

Records Systems Division, Director, Policy Directives and Instructions

Branch, Immigration and Naturalization Service, 425 I Street, NW., room

5307, Washington, DC 20536. To ensure proper handling, please reference

the INS number 1429-92 on your correspondence.

FOR FURTHER INFORMATION CONTACT:

Michael W. Straus, Senior Immigration Examiner, Adjudications Division,

Immigration and Naturalization Service, 425 I Street, NW., room 7122,

Washington, DC 20536, telephone (202) 514-5014.

SUPPLEMENTARY INFORMATION: The Immigration and Naturalization Service

(the Service) notes that the legislative history on conditional

permanent residence status for alien entrepreneurs is limited in its

guidance; therefore, this rule relies heavily on the language of the

statute itself. Congress, however, did indicate that the two-year

conditional status for alien entrepreneurs exists for the primary

purpose of ensuring that ``all aliens receiving visas in this section *

* * continue their new commercial enterprises so that the creation of

U.S. jobs and the infusion of capital into the U.S. economy is

sustained.'' S. Rep. No. 101-55, 101st Cong., 1st Sess. 22 (1989).

Accordingly the Service proposes to amend 8 CFR parts 211, 216,

235, and 242 by providing conditional permanent resident status for

certain alien entrepreneurs, their spouses, and their children.

Petition for Removal of Conditions

The Immigration and Nationality Act (the Act), as amended by the

Immigration Act of 1990, Public Law 101-649, November 29, 1990,

requires that an alien entrepreneur file a petition for removal of

conditions during the 90-day period before the second anniversary of

the alien's obtaining conditional permanent resident status (section

216A(d)(2)(A) of the Act). The petition should include any spouse or

children accorded conditional permanent resident status. Children who

have reached the age of twenty-one or who have married during the

period of conditional permanent residence will remain eligible for

removal of conditions. The statute also calls for a personal interview

of the alien within 90 days after the date the alien files the petition

for removal of conditions. The Service may waive the requirement of an

interview in appropriate cases (section 216A(d)(3) of the Act).

This rule provides that the required petition shall be filed with

the Service Center having jurisdiction over the location of the alien's

commercial enterprise. The petition will be reviewed by the Service

Center, and a determination will be made on the necessity of an

interview. If the Service Center director determines in his or her

discretion that a decision may be made on the basis of the petition and

accompanying evidence without the necessity of an interview, the

decision on the petition will be rendered at the Service Center. If the

director determines that an interview is needed, the Service Center

director will schedule the alien for an interview to be held at the

local Service district office or sub-office having jurisdiction over

the alien entrepreneur's commercial enterprise in the United States.

The local district office will then take responsibility for the case to

its conclusion.

Decision on Petition

If the alien's petition is approved, the conditional basis of the

beneficiaries' permanent resident status will be removed as of the

second anniversary of the alien's entry as a conditional permanent

resident. Denial of a petition will result in termination of the

alien's lawful permanent resident status and issuance by the Service of

an order to show cause why the alien should not be deported from the

United States. There is no appeal from this denial, but the alien may

seek review of the decision by the immigration judge in deportation

proceedings. In such deportation proceedings, the burden shall rest

with the Service to establish by a preponderance of the evidence that

the facts and information in the alien's petition for removal of

conditions are not true.

The Service explored the possibility of establishing by regulation

some form of hardship waiver similar to that set forth at 8 CFR 216.5

for removal of conditions for certain alien spouses and sons and

daughters. The Service has concluded that such a waiver cannot,

consistent with the statute, be created by regulation for alien

entrepreneurs. Section 216A(c)(3)(C) of the Act sets out a mandatory

instruction: The Attorney General shall terminate the permanent

resident status of an alien entrepreneur who has failed to comply with

the requirements for removal of conditions. Unlike section 216, section

216A of the Act does not provide for the waiver of these requirements

in cases of hardship.

Although the statute does not provide for a waiver of requirements

for removal of conditions for alien entrepreneurs, the requirement that

an alien entrepreneur has sustained his or her investment of the

requisite capital during the two years of conditional residence will be

interpreted flexibly. The alien entrepreneur will be considered to have

``sustained'' the actions required for removal of conditions if he or

she has, in good faith, substantially met the capital investment

requirement of the statute and continuously maintained his or her

capital investment over the two years of conditional residence. This

liberal interpretation of the term ``sustained'' in section

216A(a)(1)(C) of the Act permits the Service maximum flexibility in

determining whether the prerequisites for removal of the conditions

have been met in light of the congressional intent underlying this

provision. The Service recognizes that a bona-fide and good faith

investment may not meet all of the expectations envisioned when the

alien entrepreneur obtained conditional residence status. For example,

the fact that an alien entrepreneur has less than the requisite capital

invested in the enterprise at the end of the two-year conditional

period would not necessarily require the denial of the petition to

remove conditions. The petition could be granted if the alien

entrepreneur had invested a substantial portion of the requisite

capital, thereby demonstrating that he or she was actively sustaining

his or her investment in the enterprise as required by the statute. The

determination of whether an alien entrepreneur had invested a

substantial portion of the requisite capital in good faith will be made

on a case-by-case basis. The proposed rule reflects this standard at 8

CFR 216.6(a)(4)(iii) and 8 CFR 216.6(c)(1)(iii).

The following example illustrates how the alien entrepreneur can

``substantially meet'' the capital investment requirement. An alien

entrepreneur is granted conditional residence based on a business plan

which envisioned an investment of $1.2 million. At the end of the

conditional residence period, he or she has invested only $800,000 in a

non-targeted employment area, because through circumstances beyond the

alien's control, construction of a facility took longer than

anticipated. The Service may remove the conditions, if the entrepreneur

can show that he or she can and will invest the additional capital

within a reasonable time to complete the investment. On the other hand,

if the entrepreneur cannot show that he or she will be able to generate

additional capital within a reasonable time, regardless of his or her

good-faith efforts, the Service will not remove the conditions.

In determining whether an alien entrepreneur has demonstrated that

he or she invested in good faith, the Service will examine his or her

intent based on both objective and subjective standards. The following

example illustrates the ``good faith'' analysis. An entrepreneur

invests $600,000 in a non-targeted employment area prior to obtaining

conditional residence, but is unable to provide the additional capital

as envisioned in the Form I-526 application. At the time he or she

obtained conditional residence, he or she had no realistic prospect of

obtaining funds to meet the capital investment requirement and in fact

is unable to acquire the additional $400,000 required to complete the

investment. Even though the entrepreneur sincerely wished to make the

investment succeed, under the objective part of the good faith

analysis, the entrepreneur will be unable to establish that he or she

substantially met the capital investment requirement in good faith.

This rule also permits the director for good cause to remove

conditions for the spouse and/or unmarried minor children of a deceased

principal alien entrepreneur. If the spouse and/or children can show

that, despite the entrepreneur's death, the requirements for removal of

conditions have been met, the director may approve the petition and

remove the conditions. This procedure makes humanitarian as well as

economic sense and fufills the goals of the statute in that the economy

of the United States will have benefited in the manner sought by

Congress notwithstanding the death of the principal entrepreneur.

Other Reasons for Termination

The statute calls for termination of the alien's conditional

permanent residence status during the two-year period if the Service

determines: That establishment of the new commercial enterprise was for

the sole purpose of evading United States immigration laws; that the

new commercial enterprise in fact was not established; that the alien

did not invest or was not in the process of investing the prescribed

capital; that the alien was not sustaining the new commercial

enterprise or the investment of capital; or that the alien was not

otherwise conforming to the requirements of the status (section

216A(b)(1) of the Act). If the Service determines any of the foregoing,

the alien's status will be terminated and an order to show cause will

be issued. The alien may request review of this decision in deportation

proceedings. In such proceedings, the burden of proof will rest with

the Service to establish by a preponderance of the evidence that one of

the foregoing reasons for termination is true.

Termination will also result, and an order to show cause will be

issued, if the alien enterpreneur fails to file the required petition

for removal of conditions or, without good cause, fails to appear for a

personal interview when requested by the Service (section 216A(c)(2) of

the Act). The decision may be reviewed in deportation proceedings, but,

in either instance, the burden will rest with the alien to show

compliance with the filing and interview requirments. The Service may

accept and consider a late petition if the alien demonstrates good

cause and extenuating circumstances for having failed to file a timely

petition. Furthermore, the Service may stay deportation proceedings and

consider a petition for an alien who is the subject of deportation

proceedings for failure to file a timely petition if the alien

demonstrates good cause and extenuating circumstances.

Finally, the legislative history of this provision at S. Rep. No.

101-55, 101st Cong., 1st Sess. 21 (1989) indicates Congress's wish that

``* * * processing of an individual visa not continue if it becomes

known to the Government that the money invested was obtained by the

alien through other than legal means (such as money received through

the sale of illegal drugs).'' This position is clearly part of

Congress's general policy to penalize one who prospers as a result of

an illegal enterprise. That policy is evidenced elsewhere in the

federal law, such as the statute which defines money laundering crimes

as aggravated felonies, 8 U.S.C. 1101(a)(43), and the provisions of the

United States Code which provide for the forfeiture of proceeds of

unlawful activities to the United States, 21 U.S.C. 881(a)(6)

(forfeiture of proceeds of controlled substance exchange) and 18 U.S.C.

1963(a)(3) (forfeiture of proceeds of racketeering activity or unlawful

debt collection). In light of Congress's specific statement of intent

with regard to this provision, and its overall policy concerning

proceeds from illegal activities, termination of status will result at

any time during the two-year conditional residence period or at the

time a petition for removal of conditions is filed, if the Service

determines that the alien's investment funds have been obtained through

other than legal means.

Application Fee

In accordance with Office of Management and Budget Circular A-25,

User Charges, ``user charges will be sufficient to recover the full

cost to the Federal Government * * * of providing the service * * *.

Full cost shall be determined or estimated from the best available

records of the agency * * *.'' The Service proposes to institute an

application fee of $90.00 for filing form I-829. This fee is based on

the estimated costs of processing the petition.

The I-829 fee will be one of many examinations fees assessed for

providing adjudication and naturalization services. Each examinations

fee has three components: Direct costs, indirect costs, and a surcharge

to cover the costs of the International Affairs and Outreach Program

(formerly the Refugees and Overseas Program).

Direct costs are those costs directly related to the processing of

a particular application form for a particular benefit. Generally,

direct costs include: The pay of the adjudications officers and

clerical staff working on each type of application and the costs of

their associated personnel benefits; the costs of Federal Bureau of

Investigation name and fingerprint checks; where applicable, the costs

by application of naturalization ceremonies conducted by the United

States Courts; and the costs of INS immigration document and card

production. The pay costs are calculated by multiplying average

adjudications processing time by the hourly pay for the average grade

level of adjudicators and clerks. For the I-829, the direct costs

include the pay costs of the adjudications officers and clerical staff

and the costs of producing the Alien Registration Card.

Indirect costs are defined as the costs of supervisory, management,

and administrative activities, related staff training, records, data

processing, files services, legal services, and space and support costs

of providing immigration benefits under the Immigration and Nationality

Act and related statutes. Indirect costs also include costs in the

management and administration portion of the INS budget, such as the

costs of personnel administration work needed to recruit and pay the

officers and clerks who process customers' applications for benefits.

The activities associated with these costs are no less essential to

providing INS services to its customers than are the direct costs.

These indirect costs are distinguished only by the somewhat greater

complexity of determining the portion of such costs that are

attributable to work done for fee-paying customers.

The costs to carry out the International Affairs and Outreach

Program are borne by the Examinations Fee Account, at the direction of

Congress. See section 286(m) of the Act. These costs are treated as a

surcharge that is added to the examinations fees.

The total cost of processing the I-829 is estimated at $90.45. The

proposed fee was determined by rounding the total cost to the nearest

$5.00. As the Service gains experience in processing this new

application, the fee will be adjusted as necessary based on improved

data.

Technical Changes

The proposed regulation also contains some minor technical changes

resulting from the merger of Form I-751 and Form I-752 into the new

Form I-751 (see 56 FR 55931 on October 30, 1991; 57 FR 6181 on February

21, 1992). This regulation eliminates reference to the Form I-752,

which has been cancelled.

In accordance with 5 U.S.C. 605(b), the Commissioner of the

Immigration and Naturalization Service certifies that this rule will

not, if promulgated, have a significant adverse economic impact on a

substantial number of small entities. Insofar as this proposed rule

merely sets forth the procedures for terminating the conditional

resident status of alien entrepreneurs already present in the country

and for removing the conditional basis of permanent resident status for

such persons, any impact the proposed rule will have on small business

entities will be, at most, indirect or attenuated. This rule is not

significant within the meaning of section 3(f) of E.O. 12866, nor does

this rule have Federalism implications warranting the preparation of a

Federalism Assessment in accordance with E.O. 12612.

This rule contains information collection requirements which have

been approved by the Office of Management and Budget (OMB) under the

provisions of the Paperwork Reduction Act. The OMB control numbers for

these collections are contained in 8 CFR 299.5. This rule also contains

a new collection requirement which has been forwarded to OMB under the

provisions of the Paperwork Reduction Act for review and clearance.

List of Subjects

8 CFR Part 103

Administrative practice and procedures Archives and records,

Authority delegations (Government agencies), Bonding, Fees, Forms,

Freedom of Information, Organization and functions (Government

agencies), Privacy, Reporting and recordkeeping requirements, Surety

bonds.

8 CFR Part 211

Immigration, Passports and visas, Reporting and recordkeeping

requirements.

8 CFR Part 216

Administrative practice and procedure, Aliens, Immigration,

Reporting and recordkeeping requirements.

8 CFR Part 235

Administrative practice and procedure, Aliens, Immigration,

Reporting and recordkeeping requirements.

8 CFR Part 242

Administrative practice and procedure, Aliens.

Accordingly, chapter I of title 8 of the Code of Federal

Regulations is proposed to be amended as follows:

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

SERVICE RECORDS

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

follows:

Authority: 5 U.S.C. 552, 552a; 8 U.S.C. 1101, 1103, 1201, 1252,

note, 1252b, 1304, 1356; 31 U.S.C. 9701; E.O. 12356, 47 FR 14874,

15557; 3 CFR, 1982 Comp., p. 166; 8 CFR part 2.

2. In Sec. 103.7, paragraph (b)(1) is amended by:

a. Removing the ``Form I-752'' from the listing of forms;

b. Revising the description for ``Form I-751''; and by

c. Adding the ``Form I-829'', to the listing of forms, in proper

numerical sequence, to read as follows:

Sec. 103.7 Fees.

* * * * *

(b) * * *

(1) * * *

* * * * *

Form I-751. For filing petition to remove the conditions on

residence which is based on marriage--$75.00.

* * *

Form I-829. For filing petition by entrepreneur to remove

conditions--$90.00.

* * * * *

PART 211--DOCUMENTARY REQUIREMENTS: IMMIGRANTS; WAIVERS

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

follows:

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

4. In Sec. 211.1, paragraph (b)(1)(i) introductory text is revised

to read as follows:

Sec. 211.1 Visas.

* * * * *

(b)(1) * * *

(i) Alien not travelling pursuant to government orders. An Alien

Registration Receipt Card may be presented in lieu of an immigrant visa

by an immigrant alien who is returning to an unrelenquished lawful

permanent residence in the United States, is returning prior to the

second anniversary of the date on which he or she obtained such

residence if subject to the provisons of section 216 or 216A of the

Act, whichever is applicable, or within six months of the date of

filing a Petition to Remove the Conditions on Residence (Form I-751) or

a Petition By Entrepreneur to Remove Conditions (Form I-829) pursuant

to 8 CFR part 216, if the alien is in possession of a Service-issued

receipt for such filing, and:

* * * * *

PART 216--CONDITIONAL BASIS OF LAWFUL PERMANENT RESIDENCE STATUS

5. The heading for part 216 is revised as set forth above.

6. The authority citation for part 216 is revised to read as

follows:

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

CFR part 2.

Sec. 216.1 [Amended]

7. Section 216.1 is amended in the first sentence by revising the

phrase ``section 216 of the Act'' to read: ``section 216 or 216A of the

Act, whichever is applicable,''.

Sec. 216.2 [Amended]

8. Section 216.2(b) is amended in the first sentence by adding the

phrase ``or he alien entrepreneur'' between the words ``spouse'' and

``must''.

9. Section 216.2(c) is amended by adding the phrase ``, or the

alien entrepreneur'' between the words ``spouse'' and ``of''; and by

removing the word ``joint''.

10. In Sec. 216.3 is revised to read as follows:

Sec. 216.3 Termination of conditional resident status.

(a) During the two-year conditional period. The director shall send

a formal written notice to the conditional permanent resident of the

termination of the alien's conditional permanent resident status if the

director determines that any of the conditions set forth in section

216(b)(1) or 216A(b)(1) of the Act, whichever is applicable, are true,

or it becomes known to the government that an alien entrepreneur who

was admitted pursuant to section 203(b)(5) of the Act obtained his or

her investment capital through other than legal means (such as through

the sale of illegal drugs). If the Service issues a notice of Intent to

Terminate an alien's conditional resident status, the director shall

not adjudicate Form I-751 or Form I-829 until it has been determined

that the alien's status shall not be terminated. During this time, the

alien shall continue to be a lawful conditional permanent resident with

all the rights, privileges, and responsibilities provided to persons

possessing such status. Prior to issuing the Notice of Termination, the

director shall provide the alien with an opportunity to review and

rebut the evidence upon which the decision is to be based, in

accordance with Sec. 103.2(b)(2) of this chapter. The termination of

status, and all of the rights and privileges concomitant thereto

(including authorization to accept or continue in employment in this

country), shall take effect as of the date of such determination by the

director, although the alien may request a review of such determination

in deportation proceedings. In addition to the notice of termination,

the director shall issue an order to show cause why the alien should

not be deported from the United States, in accordance with part 242 of

this chapter. During the ensuing deportation proceedings, the alien may

submit evidence to rebut the determination of the director. The burden

of proof shall be on the Service to establish, by a preponderance of

the evidence, that one or more of the conditions in section 216(b)(1)

or 216A(b)(1) of the Act, whichever is applicable, are true, or that an

alien entrepreneur who was admitted pursuant to section 203(b)(5) of

the Act obtained his or her investment capital through other than legal

means (such as through the sale of illegal drugs).

(b) Determination of fraud after two years. If, subsequent to the

removal of the conditional basis of an alien's permanent resident

status, the director determines that an alien spouse obtained permanent

resident status through a marriage which was entered into for the

purpose of evading the immigration laws or an alien entrepreneur

obtained permanent resident status through a commercial enterprise

which was improper under section 216A(b)(1) of the Act, the director

may institute rescission proceedings pursuant to section 246 of the Act

(if otherwise appropriate) or deportation proceedings under section 242

of the Act.

Sec. 216.4 [Amended]

11-12. In Sec. 216.4, paragraph (a)(1) is amended by revising the

phrase ``a Joint Petition to Remove the Conditional Basis of Alien's

Permanent Resident Status'' in the first sentence, to read: ``a

Petition to Remove the Conditions on Residence''.

13. In Sec. 216.4, the heading is revised and paragraph (a)(1) is

amended by adding a new sentence at the end of the paragraph to read as

follows:

Sec. 216.4 Joint petition to remove conditional basis of lawful

permanent resident status for alien spouse.

(a) * * *

(1) General procedures. * * *Upon receipt of a properly filed Form

I-751, the alien's conditional permanent resident status shall be

extended automatically, if necessary, until such time as the director

has adjudicated the petition.

* * * * *

Sec. 216.4 [Amended]

14. In Sec. 216.4, paragraph (a)(2) is amended in the last

sentence, by revising the phrase ``an Application for Waiver of

Requirement to File Joint Petition for Removal of Conditions (Form I-

752)'' to read: ``a separate Petition to Remove the Conditions on

Residence (Form I-751)''.

15. In Sec. 216.4, paragraph (a)(6) is amended in the first

sentence by removing the phrase ``or Form I-752''.

16. In Sec. 216.5, the section heading and paragraph (a),

introductory text, are revised to read as follows:

Sec. 216.5 Waiver of requirement to file joint petition to remove

conditions by alien spouse.

(a) General. A conditional resident alien who is unable to meet the

requirements under section 216 of the Act for a joint petition for

removal of the conditional basis of his or her permanent resident

status may file a Petition to Remove the Conditions on Residence (Form

I-751), if the alien requests a waiver, was not at fault in failing to

meet the filing requirement, and the conditional resident alien is able

to establish that:

* * * * *

Sec. 216.5 [Amended]

17. In Sec. 216.5, paragraphs (b) and (c) are amended by revising

the phrase ``Form I-752'' to read: ``Form I-751''.

18. A new Sec. 216.6 is added to read as follows:

Sec. 216.6 Petition by entrepreneur to remove conditional basis of

lawful permanent resident status.

(a) Filing the petition--(1) General procedures. A petition to

remove the conditional basis of the permanent resident status of an

alien accorded conditional permanent residence pursuant to section

203(b)(5) of the Act must be filed by the alien entrepreneur on Form I-

829, Petition by Entrepreneur to Remove Conditions. The alien

entrepreneur must file Form I-829 within the 90-day period preceding

the second anniversary of his or her admission to the United States as

a conditional permanent resident. Before Form I-829 may be considered

as properly filed, it must be accompanied by the fee required under

Sec. 103.7(b)(1) of this chapter, and by documentation as described in

paragraph (a)(4) of this section, and it must be properly signed by the

alien. Upon receipt of a properly filed Form I-829, the alien's

conditional permanent resident status shall be extended automatically,

if necessary, until such time as the director has adjudicated the

petition. The entrepreneur's spouse and children should be included in

the petition to remove conditions. Children who have reached the age of

twenty-one or who have married during the period of conditional

permanent residence may be included in the petition.

(2) Jurisdiction. Form I-829 must be filed with the regional

service center having jurisdiction over the location of the alien

entrepreneur's commercial enterprise in the United States.

(3) Physical presence at time of filing. A petition may be filed

regardless of whether the alien is physically present in the United

States. However, if the alien is outside the United States at the time

of filing, he or she must return to the United States, with his or her

spouse and children, if necessary, to comply with the interview

requirements contained in the Act. Once the petition has been properly

filed, the alien may travel outside the United States and return if in

possession of documentation as set forth in Sec. 211.1(b)(1) of this

chapter, provided the alien complies with the interview requirements

described in paragraph (b) of this section. An alien who is not

physically present in the United States during the filing period but

subsequently applies for admission to the United States shall be

processed in accordance with Sec. 235.11 of this chapter.

(4) Documentation. The petition for removal of conditions must be

accompanied by the following evidence:

(i) Evidence that a commercial enterprise was established by the

alien. Such evidence may include, but is not limited to, Federal income

tax returns;

(ii) Evidence that the alien invested or was actively in the

process of investing the requisite capital. Such evidence may include,

but is not limited to, an audited financial statement; and

(iii) Evidence that the alien sustained the actions described in

paragraphs (a)(4)(i) and (a)(4)(ii) of this section throughout the

period of the alien's residence in the United States. The alien will be

considered to have sustained the actions required for removal of

conditions if he or she has, in good faith, substantially met the

capital investment requirement of the statute and continuously

maintained his or her capital investment over the two years of

conditional residence. Such evidence may include, but is not limited

to, bank statements, invoices, receipts, contracts, business licenses,

Federal or State income tax returns, and Federal or State quarterly tax

statements.

(iv) Evidence that the alien created or can be expected to create

within a reasonable time ten full-time jobs for qualifying employees.

In the case of a ``troubled business'' as defined in 8 CFR

204.6(j)(4)(ii), the alien entrepreneur must submit evidence that the

commercial enterprise maintained the number of existing employees at no

less than the pre-investment level for the period following his or her

admission as a conditional permanent resident. Such evidence may

include payroll records, relevant tax documents and Forms I-9.

(5) Termination of status for failure to file petition. Failure to

properly file Form I-829 within the 90-day period immediately preceding

the second anniversary of the date on which the alien obtained lawful

permanent residence on a conditional basis shall result in the

automatic termination of the alien's permanent residence status and the

initiation of deportation proceedings. The director shall send a

written notice of termination and an order to show cause to an alien

entrepreneur who fails to timely file a petition for removal of

conditions. No appeal shall lie from this decision; however, the alien

may request a review of the determination during deportation

proceedings. In deportation proceedings, the burden of proof shall rest

with the alien to show by a preponderance of the evidence that he or

she complied with the requirement to file the petition within the

designated period. The director may deem the petition to have been

filed prior to the second anniversary of the alien's obtaining

conditional permanent residence status and accept and consider a late

petition if the alien demonstrates to the director's satisfaction that

failure to file a timely petition was for good cause and due to

extenuating circumstances. If the late petition is filed prior to

jurisdiction vesting with the immigration judge in deportation

proceedings and the director excuses the late filing and approves the

petition, he or she shall restore the alien's permanent resident

status, remove the conditional basis of such status, and cancel any

outstanding order to show cause in accordance with Sec. 242.7 of this

chapter. If the petition is not filed until after jurisdiction vests

with the immigration judge, the immigration judge may terminate the

matter upon joint motion by the alien and the Service.

(6) Death of entrepreneur and effect on spouse and children. If an

entrepreneur dies during the prescribed two-year period of conditional

permanent residence, the spouse and children of the entrepreneur will

be eligible for removal of conditions if it can be demonstrated that

the conditions set forth in paragraph (a)(4) of this section have been

met.

(b) Petition review--(1) Authority to waive interview. The director

of the service center shall review the Form I-829 and the supporting

documents to determine whether to waive the interview required by the

Act. If satisfied that the requirements set forth in paragraph (c)(1)

of this section have been met, the service center director may waive

the interview and approve the petition. If not so satisfied, then the

service center director shall forward the petition to the district

director having jurisdiction over the location of the alien

entrepreneur's commercial enterprise in the United States so that an

interview of the alien entrepreneur may be conducted. The director must

either waive the requirement for an interview and adjudicate the

petition or arrange for an interview within 90 days of the date on

which the petition was properly filed.

(2) Location of interview. Unless waived, an interview relating to

the Form I-829 shall be conducted by an immigration examiner or other

officer so designated by the district director at the district office

that has jurisdiction over the location of the alien entrepreneur's

commercial enterprise in the United States.

(3) Termination of status for failure to appear for interview. If

the alien fails to appear for an interview in connection with the

petition when requested by the Service, the alien's permanent resident

status will be automatically terminated as of the second anniversary of

the date on which the alien obtained permanent residence. The alien

will be provided with written notification of the termination and the

reasons therefore, and an order to show cause shall be issued placing

the alien under deportation proceedings. The alien may seek review of

the decision to terminate his or her status in such proceedings, but

the burden shall be on the alien to establish by a preponderance of the

evidence that he or she complied with the interview requirements. If

the alien has failed to appear for a scheduled interview, he or she may

submit a written request to the district director asking that the

interview be rescheduled or that the interview be waived. That request

should explain his or her failure to appear for the scheduled

interview, and if a request for waiver of the interview, the reasons

such waiver should be granted. If the district director determines that

there is good cause for granting the request, the interview may be

rescheduled or waived, as appropriate. If the district director waives

the interview, he or she shall restore the alien's conditional

permanent resident status, cancel any outstanding order to show cause

in accordance with Sec. 242.7 of this chapter, and proceed to

adjudicate the alien's petition. If the district director reschedules

that alien's interview, he or she shall restore the alien's conditional

residence status, and cancel any outstanding order to show cause in

accordance with Sec. 242.7 of this chapter. If the interview is

rescheduled at the request of the alien, the Service shall not be

required to conduct the interview within the 90-day period following

the filing of the petition.

(c) Adjudication of petition. (1) The decision on the petition

shall be made within 90 days of the date of filing or within 90 days of

the date of interview, whichever is later. In adjudicating the

petition, the director shall determine whether:

(i) A commercial enterprise was established by the alien;

(ii) The alien invested or was actively in the process of investing

the requisite capital; and

(iii) The alien sustained the actions described in paragraphs

(c)(1)(i) and (c)(1)(ii) of this section throughout the period of the

alien's residence in the United States. The alien will be considered to

have sustained the actions required for removal of conditions if he or

she has, in good faith, substantially met the capital investment

requirement of the statute and continuously maintained his or her

capital investment over the two years of conditional residence.

(iv) The alien created or can be expected to create within a

reasonable period of time ten full-time jobs to qualifying employees.

In the case of a ``troubled business'' as defined in 8 CFR

204.6(j)(4)(ii), the alien maintained the number of existing employees

at no less than the pre-investment level for the previous two years.

(2) If derogatory information is determined regarding any of these

issues or it becomes known to the government that the entrepreneur

obtained his or her investment funds through other than legal means

(such as through the sale of illegal drugs), the director shall offer

the alien entrepreneur the opportunity to rebut such information. If

the alien entrepreneur fails to overcome such derogatory information or

evidence the investment funds were obtained through other than legal

means, the director may deny the petition, terminate the alien's

permanent residence, and issue an order to show cause. If derogatory

information not relating to any of these issues is determined during

the course of the interview, such information shall be forwarded to the

investigations unit for appropriate action. If no unresolved derogatory

information is determined relating to these issues, the petition shall

be approved and the conditional basis of the alien's permanent

residence status removed, regardless of any action taken or

contemplated regarding other possible grounds for deportation.

(d) Decision--(1) Approval. If, after initial review or after the

interview, the director approves the petition, he or she will remove

the conditional basis of the alien's permanent resident status as of

the second anniversary of the alien's entry as a conditional permanent

resident. He or she shall provide written notice of the decision to the

alien and shall require the alien to report to the appropriate district

office for processing for a new Alien Registration Receipt Card, Form

I-551, at which time the alien shall surrender any Alien Registration

Receipt Card previously issued.

(2) Denial. If, after initial review or after the interview, the

director denies the petition, he or she shall provide written notice to

the alien of the decision and the reasons(s) therefor, and shall issue

an order to show cause why the alien should not be deported from the

United States. The alien's lawful permanent resident status and that of

his or her spouse and any children shall be terminated as of the date

of the director's written decision. The alien shall also be instructed

to surrender any Alien Registration Receipt Card previously issued by

the Service. No appeal shall lie from this decision; however, the alien

may seek review of the decision in deportation proceedings. In

deportation proceedings, the burden shall rest with the Service to

establish by a preponderance of the evidence that the facts and

information in the alien's petition for removal of conditions are not

true and that the petition was properly denied.

PART 235--INSPECTION OF PERSONS APPLYING FOR ADMISSION

19. The authority citation for part 235 continues to read as

follows:

Authority: 8 U.S.C. 1101, 1103, 1182, 1183, 1201, 1224, 1225,

1226, 1227, 1228, 1252.

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

follows:

Sec. 235.11 Admission of conditional permanent residents.

(a) General--(1) Conditional residence based on family

relationship. An alien seeking admission to the United States with an

immigrant visa as the spouse or son or daughter of a United States

citizen or lawful permanent resident shall be examined to determine

whether the conditions of section 216 of the Act apply. If so, the

alien shall be admitted conditionally for a period of two years. At the

time of admission, the alien shall be notified that the alien and his

or her petitioning spouse must file a Petition to Remove the Conditions

on Residence (Form I-751) within the 90-day period immediately

preceding the second anniversary of the alien's admission for permanent

residence.

(2) Conditional residence based on entrepreneurship. An alien

seeking admission to the United States with an immigrant visa as an

alien entrepreneur (as defined in section 216A(f)(1) of the Act) or the

spouse or unmarried minor child of an alien entrepreneur shall be

admitted conditionally for a period of two years. At the time of

admission, the alien shall be notified that the principal alien

(entrepreneur) must file a Petition by Entrepreneur to Remove

Conditions (Form I-829) within the 90-day period immediately preceding

the second anniversary of the alien's admission for permanent

residence.

* * * * *

(c) Expired conditional permanent resident alien status. The lawful

permanent resident alien status of a conditional resident automatically

terminates if the conditional basis of such status is not removed by

the Service through approval of a Petition to Remove the Conditions on

Residence (Form I-751) or, in the case of an alien entrepreneur (as

defined in section 216A(f)(1) of the Act), a Petition by Entrepreneur

to Remove Conditions (Form I-829). Therefore, an alien who is seeking

admission as a returning resident subsequent to the second anniversary

of the date on which conditional residence was obtained (except as

provided in Sec. 211.1(b)(1) of this chapter) and whose conditional

basis of such residence has not been removed pursuant to section 216(c)

or 216A(c) of the Act, whichever is applicable, shall be placed under

exclusion proceedings. However, in a case where conditional residence

was based on a marriage, exclusion proceedings may be terminated and

the alien may be admitted as a returning resident if the required

petition (Form I-751) is filed jointly, or by the alien alone (if

appropriate), and approved by the Service. In the case of an alien

entrepreneur, exclusion proceedings may be terminated and the alien

admitted as a returning resident if the required petition (Form I-829)

is filed by the alien entrepreneur and approved by the Service.

PART 242--PROCEEDINGS TO DETERMINE DEPORTABILITY OF ALIENS IN THE

UNITED STATES, APPREHENSION, CUSTODY, HEARING, AND APPEAL

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

follows:

Authority: 8 U.S.C. 1103, 1182, 1186a, 1251, 1252, 1252 note,

1252b, 1254, 1362; 8 CFR part 2.

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

Sec. 242.17 Ancillary matters, applications.

(a) Creation of the status of an alien lawfully admitted for

permanent residence. The respondent may apply to the immigration judge

for suspension of deportation under section 244(a) of the Act; for

adjustment of status under section 245 of the Act, or under section 1

of the Act of November 2, 1966, or under section 101 or 104 of the Act

of October 28, 1977; or for the creation of a record of lawful

admission for permanent residence under section 249 of the Act. The

application shall be subject to the requirements of parts 244, 245, and

249 of this chapter. The approval of any application made to the

immigration judge under section 245 of the Act by an alien spouse (as

defined in section 216(g)(1) of the Act) or by an alien entrepreneur

(as defined in section 216A(f)(1) of the Act), shall result in the

alien's obtaining the status of lawful permanent resident on a

conditional basis in accordance with the provisions of section 216 or

216A of the Act, whichever is applicable. However, the Petition to

Remove the Conditions on Residence required by section 216(c) of the

Act or the Petition by Entrepreneur to Remove Conditions required by

section 216A(c) of the Act shall be made to the director in accordance

with part 216 of the chapter. In conjunction with any application for

creation of status of an alien lawfully admitted for permanent

residence made to an immigration judge, if the respondent is

inadmissible under any provision of section 212(a) of the Act and

believes that he or she meets the eligibility requirements for a waiver

of the ground of inadmissibility, he or she may apply to the

immigration judge for such waiver. The immigration judge shall inform

the respondent of his or her apparent eligibility to apply for any of

the benefits enumerated in this paragraph and shall afford the

respondent an opportunity to make application therefor during the

hearing. In exercising discretionary power when considering an

application under this paragraph, the immigration judge may consider

and base the decision on information not contained in the record and

not made available for inspection by the respondent, provided the

Commissioner has determined that such information is relevant and is

classified under Executive Order No. 12356 (47 14874, April 6, 1982) as

requiring protection from unauthorized disclosure in the interest of

national security. Whenever the immigration judge believes that he or

she can do so while safeguarding both the information and its source,

the immigration judge should inform the respondent of the general

nature of the information in order that the respondent may have an

opportunity to offer opposing evidence. A decision based in whole or in

part on such classified information shall state that the information is

material to the decision.

* * * * *

Dated: November 5, 1993.

Doris Meissner,

Commissioner, Immigration and Naturalization Service.

[FR Doc. 94-391 Filed 1-7-94; 8:45 am]

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