II 

110TH CONGRESS 

2D SESSION S. 3399 

To amend the Internal Revenue Code of 1986 to make permanent the reduction in the rate of tax on qualified timber gain of corporations, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 31, 2008 

Mrs. LINCOLN (for herself, Mr. SMITH, Ms. CANTWELL, Mr. CORNYN, Mrs. 

MURRAY, Mrs. DOLE, Ms. LANDRIEU, Mr. CHAMBLISS, Mr. WICKER, and 

Mr. VITTER) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to make 

permanent the reduction in the rate of tax on qualified 

timber gain of corporations, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Timber Revitalization 

5 and Economic Enhancement Act II of 2008’’. 


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•S 3399 IS

1 SEC. 2. PERMANENT REDUCTION IN RATE OF TAX ON 

2 QUALIFIED TIMBER GAIN OF CORPORATIONS. 

3 (a) IN GENERAL.—Section 1201(b)(1) of the Internal 

4 Revenue Code of 1986 is amended by striking ‘‘and begin5 ning on or before the date which is 1 year after such 

6 date’’. 

7 (b) CONFORMING AMENDMENT.—Paragraph (3) of 

8 section 1201(b) of the Internal Revenue Code of 1986 is 

9 amended to read as follows: 

10 ‘‘(3) COMPUTATION FOR TAXABLE YEARS IN

11 WHICH RATE FIRST APPLIES.—In the case of any 

12 taxable year which includes the date set forth in 

13 paragraph (1), the qualified timber gain for such 

14 year shall not exceed the qualified timber gain prop15 erly taken into account for the portion of the year 

16 after such date.’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall take effect as if included in the amend19 ment made by section 15311(a) of the Food, Conservation, 

20 and Energy Act of 2008. 

21 SEC. 3. PERMANENT TIMBER REIT MODERNIZATION. 

22 (a) IN GENERAL.—Section 856(c)(5)(H) of the Inter23 nal Revenue Code of 1986 is amended by striking clause 

24 (iii). 


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•S 3399 IS

1 (b) CONFORMING AMENDMENT.—Section 856(c) of 

2 the Internal Revenue Code of 1986 is amended by striking 

3 paragraph (8). 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect as if included in the amend6 ment made by section 15312 of the Food, Conservation, 

7 and Energy Act of 2008. 

8 SEC. 4. PERMANENT QUALIFICATION OF MINERAL ROY9 ALTY INCOME FOR TIMBER REITS. 

10 (a) IN GENERAL.—Section 856(c)(2)(I) of the Inter11 nal Revenue Code of 1986 is amended by striking ‘‘the 

12 first taxable year beginning after the date of the enact13 ment of this subparagraph’’ and inserting ‘‘any taxable 

14 year’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 this section shall take effect as if included in the amend17 ment made by section 15313(a) of the Food, Conservation, 

18 and Energy Act of 2008. 

19 SEC. 5. PERMANENT MODIFCATION OF PROHIBITED 

20 TRANSACTION RULES FOR TIMBER PROP21 ERTY. 

22 (a) IN GENERAL.— 

23 (1) Section 857(b)(6)(D)(v) of the Internal 

24 Revenue Code of 1986 is amended by striking ‘‘, in 


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•S 3399 IS

1 the case of a sale on or before the termination 

2 date,’’. 

3 (2) Section 857(b)(6)(H) of such Code is 

4 amended by striking ‘‘In the case of a sale on or be5 fore the termination date, the sale’’ and inserting 

6 ‘‘The sale’’. 

7 (3) Section 857(b)(6) of such Code is amended 

8 by striking subparagraph (I). 

9 (b) EFFECTIVE DATE.—The amendments made by 

10 this section shall take effect as if included in the amend11 ments made by section 15315 of the Food, Conservation, 

12 and Energy Act of 2008. 

Æ 


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