PUBLIC LAW 104-188—AUG. 20, 1996 110 STAT. 1803 "(B) for the preceding year— "(i) had compensation from the employer in excess of $80,000, and "(ii) if the employer elects the application of this clause for such preceding year, was in the top-paid group of employees for such preceding year. The Secretary shall adjust the $80,000 amount under subparagraph (B) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter ending September 30, 1996.". (b) REPEAL OF FAMILY AGGREGATION RULES.— (1) IN GENERAL. — Paragraph (6) of section 414(q) is hereby repealed. (2) COMPENSATION LIMIT. —Paragraph (17)(A) of section 401(a) is amended by striking the last sentence. (3) DEDUCTION.—Subsection (1) of section 404 is amended by striking the last sentence. (c) CONFORMING AMENDMENTS.— (1)(A) Subsection (q) of section 414 is amended by striking paragraphs (2), (5), and (12) and by redesignating paragraphs (3), (4), (7), (8), (9), (10), and (11) as paragraphs (2) through (8), respectively. (B) Sections 129(d)(8)(B), 401(a)(5)(D)(ii), 408(k)(2)(C), and 416(i)(l)(D) are each amended by striking "section 414(q)(7)" and inserting "section 414(q)(4)". (C) Section 416(i)(l)(A) is amended by striking "section 414(q)(8)" and inserting "section 414(q)(5)". (D) Subparagraph (A) of section 414(r)(2) is amended by striking "subsection (q)(8)" and inserting "subsection (q)(5)". (E) Section 414(q)(5), as redesignated by subparagraph (A), is amended by striking "under paragraph (4), or the number of officers taken into account under paragraph (5)". (2) Section 1114(c)(4) of the Tax Reform Act of 1986 is 26 USC 414 note. amended by adding at the end the following new sentence: "Any reference in this paragraph to section 414(q) shall be treated as a reference to such section as in effect on the day before the date of the enactment of the Small Business Job Protection Act of 1996.". (d) EFFECTIVE DATE. — 26 USC 414 note. (1) IN GENERAL.— The amendments made by this section shall apply to years beginning after December 31, 1996, except that in determining whether an employee is a highly compensated employee for years beginning in 1997, such amendments shall be treated as having been in effect for years beginning in 1996. (2) FAMILY AGGREGATION. —The amendments made by subsection (b) shall apply to years beginning after December 31, 1996. SEC. 1432. MODIFICATION OF ADDITIONAL PARTICIPATION REQUIRE- MENTS. (a) GENERAL RULE. — Section 401(a)(26)(A) (relating to additional participation requirements) is amended to read as follows: "(A) IN GENERAL.— In the case of a trust which is a part of a defined benefit plan, such trust shall not constitute a qualified trust under this subsection unless on
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