Page:United States Statutes at Large Volume 100 Part 3.djvu/645

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2453

"(B) the employer notifies the Secretary that such line of business is being treated as separate for purposes of paragraph (1), and "(C) such line of business meets guidelines prescribed by the Secretary or the employer receives a determination from the Secretary that such line of business may be treated as separate for purposes of paragraph (1). "(3) SAFE HARBOR RULE.—The requirements of subparagraph (C) of paragraph (2) shall not apply to any line of business if the highly compensated employee percentage with respect to such line of business is— "(A) not less than one-half, and "(B) not more than twice, the percentage which highly compensated employees are of all employees of the employer. An employer shall be treated as meeting the requirements of subparagraph (A) if at least 10 percent of all highly compensated employees of the employer perform services solely for such line of business. "(4) HIGHLY COMPENSATED EMPLOYEE PERCENTAGE DEFINED.—

For purposes of this subsection, the term 'highly compensated employee percentage' means the percentage which highly compensated employees performing services for the line of business are of all employees performing services for the line of business. "(5) ALLOCATION OF BENEFITS TO LINE OF BUSINESS.—For purposes of this subsection, benefits which are attributable to services provided to a line of business shall be treated as provided by such line of business. "(6) HEADQUARTERS PERSONNEL, ETC.—The Secretary shall prescribe rules providing for— "(A) the allocation of headquarters personnel among the lines of business of the employer, and "(B) the treatment of other employees providing services for more than 1 line of business of the employer or not in lines of business meeting the requirements of paragraph (2). "(7) SEPARATE OPERATING UNITS.—For purposes of this subsection, the term 'separate line of business includes an operating unit in a separate geographic area separately operated for a bona fide business reason. "(8) AFFIUATED SERVICE GROUPS.—This subsection shall not apply in the case of any affiliated service group (within the meaning of section 414(m)). '(s) COMPENSATION.—For purposes of this part— "(1) IN GENERAL.—The term 'compensation' means compensation for service performed for an employer which (taking into account the provisions of this chapter) is currently includible in gross income. "(2) SELF-EMPLOYED INDIVIDUALS.—The Secretary shall prescribe regulations for the determination of the compensation of an employee who is a self-employed individual (within the meaning of section 401(c)(1)) which are based on the principles of paragraph (1). "(3) EMPLOYER MAY ELECT TO TREAT CERTAIN DEFERRALS AS

COMPENSATION.—An employer may elect to include as compensation any amount which is contributed by the employer pursuant to a salary reduction agreement and which is not includible in the gross income of an employee under section 125, 402(a)(8), 402(h), or 4030)).

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