I

103D CONGRESS

1ST SESSION H. R. 1542

To amend the Internal Revenue Code of 1986 to deny the benefits of certain

export subsidies in the case of exports of certain unprocessed timber.

IN THE HOUSE OF REPRESENTATIVES

MARCH 30, 1993

Mr. STARK (for himself, Mr. DEFAZIO, and Mrs. UNSOELD) introduced the

following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to deny the

benefits of certain export subsidies in the case of exports

of certain unprocessed timber.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. DENIAL OF CERTAIN EXPORT SUBSIDIES.

4 (a) FOREIGN SALES CORPORATIONS.—Paragraph (2)

5 of section 927(a) of the Internal Revenue Code of 1986

6 (relating to exclusion of certain property) is amended by

7 striking ‘‘or’’ at the end of subparagraph (C), by striking

8 the period at the end of subparagraph (D) and inserting

9 ‘‘, or’’, and by adding at the end thereof the following:
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1 ‘‘(E) any unprocessed timber which is a

2 softwood.

3 For purposes of subparagraph (E), the term ‘un4 processed timber’ means any log, cant, or similar

5 form of timber.’’

6 (b) DOMESTIC INTERNATIONAL SALES CORPORA7 TIONS.—Paragraph (2) of section 993(c) of such Code (re8 lating to exclusion of certain property) is amended by

9 striking ‘‘or’’ at the end of subparagraph (C), by striking

10 the period at the end of subparagraph (D) and inserting

11 ‘‘, or’’, and by adding after subparagraph (D) the follow12 ing:

13 ‘‘(E) any unprocessed timber which is a

14 softwood.

15 For purposes of subparagraph (E), the term ‘un16 processed timber’ means any log, cant, or similar

17 form of timber.’’

18 (c) TITLE-PASSAGE RULE.—Subsection (b) of section

19 865 of such Code (relating to source rules for personal

20 property sales) is amended by adding at the end thereof

21 the following: ‘‘Notwithstanding the preceding sentence,

22 any income from the sale of any unprocessed timber which

23 is a softwood and was cut from an area in the United

24 States shall be sourced in the United States and the rules

25 of sections 862(a)(6) and 863(b) shall not apply to any
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1 such income. For purposes of the preceding sentence, the

2 term ‘unprocessed timber’ means any log, cant, or similar

3 form of timber.’’

4 (d) ELIMINATION OF DEFERRAL.—Subsection (d) of

5 section 954 of such Code is amended by adding at the

6 end thereof the following new paragraph:

7 ‘‘(4) SPECIAL RULE FOR CERTAIN TIMBER

8 PRODUCTS.—For purposes of subsection (a)(2), the

9 term ‘foreign base company sales income’ includes

10 any income (whether in the form of profits, commis11 sions, fees, or otherwise) derived in connection

12 with—

13 ‘‘(A) the sale of any unprocessed timber

14 referred to in section 865(b), or

15 ‘‘(B) the milling of any such timber out16 side the United States.

17 Subpart G shall not apply to any amount treated as

18 subpart F income by reason of this paragraph.’’

19 (e) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to sales, exchanges, or other dis21 positions after the date of the enactment of this Act.

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