102 STAT. 3632
PUBLIC LAW 100-647—NOV. 10, 1988 "(i) subparagraph (B) of paragraph (1) shall be applied by substituting '$50,000' for '$75,000', and "(ii) subparagraph (C) of paragraph (1) shall not apply. '(B) REQUIREMENT FOR ELECTION.—An election under this paragraph shall not apply to any year unless— "(i) at all times during such year, the employer maintained significant business activities (and employed employees) in at least 2 significantly separate geographic areas, and "(ii) the employer satisfies such other conditions as the Secretary may prescribe." (2) L I N E OF BUSINESS REQUIREMENTS.—
(A) SAFE HARBOR RULE.—Paragraph (3) of section 414(r) of
the 1986 Code is amended to read as follows: "(3) SAFE HARBOR RULE.—
"(A) IN GENERAL.—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— "(i) not less than one-half, and "(ii) 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 clause (i) if at least 10 percent of all highly compensated employees of the employer perform services solely for such line of business. 'xB) DETERMINATION MAY BE BASED ON PREcaEDiNG YEAR.—
The requirements of subparagraph (A) shall be treated as met with respect to any line of business if such requirements were met with respect to such line of business for the preceding year and if— "(i) no more than a de minimis number of employees were shifted to or from the line of business after the close of the preceding year, or "(ii) the employees shifted to or from the line of business after the close of the preceding year contained a substantially proportional number of highly compensated employees.. (B) SEPARATE OPERATING UNITS.—Section 89(g)(5) of the
1986 Code is amended by adding at the end thereof the following new sentence: "In applying section 414(r)(7) for purposes of this section, an operating unit shall be treated as in a separate geographic area from another unit if such units are at least 35 miles apart.". (3) COMPENSATION FOR GROUP-LIFE INSURANCE PLANS.—
(A) Paragraph (4) of section 890') of the 1986 Code is amended by adding at the end thereof the following new subparagraph: "(D) (JoMPENSATiON.—For purposes of applying this paragraph— "(i) IN GENERAL.—Compensation shall be determined on any basis determined by the employer which does not discriminate in favor of highly compensated employees. ' (ii) SPECIAL RULES FOR 1989 AND 1990.—In the case of testing years b^;inning in 1989 or 1990, the employer
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