Page:United States Statutes at Large Volume 94 Part 3.djvu/937

 PUBLIC LAW 96-613—DEC. 28, 1980

94 STAT. 3581

"(1) IN GENERAL.—For purposes of the employee benefit requirements listed in paragraph (4), except to the extent otherwise provided in regulations, all employees of the members of an affiliated service group shall be treated as employed by a single employer. "(2) AFFILIATED SERVICE GROUP.—For purposes of this subsection, the term 'affiliated service group' means a group consisting of a service organization (hereinafter in this paragraph referred to as the 'first organization') and one or more of the following: "(A) any service organization which— "(i) is a shareholder or partner in the first organization, and "(ii) regularly performs services for the first organization or is regularly associated with the first organization in performing services for third persons, and "(B) any other organization if— "(i) a significant portion of the business of such organization is the performance of services (for the first organization, for organizations described in subparagraph (A), or for both) of a type historically performed in such service field by employees, and "(ii) 10 percent or more of the interests in such organization is held by persons who are officers, highly compensated employees, or owners of the first organization or an organization described in subparagraph (A). "(3) SERVICE ORGANIZATIONS.—For purposes of this subsection, the term 'service organization' means an organization the principal business of which is the performance of services. "(4) EMPLOYEE BENEFIT REQUIREMENTS.—For purposes of this subsection, the employee benefit requirements listed in this paragraph are— "(A) paragraphs (3), (4), (7), and (16) of section 401(a), 26 USC 401. "(B) sections 408(k), 410,411, and 415, 26 USC 408, 410, "(C) section 105(h), and il\iii^\ n ^ (D) section 125. 26 USC 125. "(5) OTHER DEFINITIONS.—For purposes of this subsection— "(A) ORGANIZATION DEFINED.—The term 'organization' means a corporation, partnership, or other organization. "(B) OWNERSHIP.—In determining ownership, the principles of section 267(c) shall apply. 26 USC 267. "(6) PREVENTION OF AVOIDANCE.—The Secretary shall prescribe Regulations. such regulations as may be necessary to prevent the avoidance with respect to service organizations, through the use of separate organizations, of any employee benefit requirement listed in paragraph (4)." (b) TECHNICAL AMENDMENTS.—

(1) Paragraph (8) of section 105(h) (relating to amount paid to 26 USC 105. highly compensated individuals under a discriminatory selfinsured medical expense reimbursement plan) is amended— (A) by striking out "subsection (b) or (c) of section 414" and inserting in lieu thereof "subsection (b), (c), or (m) of section 414", and (B) by striking out "CONTROLLED GROUPS" in the paragraph heading and inserting in lieu thereof "CONTROLLED GROUPS, ETC.".

(2) Paragraph (4) of section 125(g) (relating to special rules for 26 USC 125. cafeteria plans) is amended—

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