(B) the amount of the refunding bond does 
not exceed the outstanding amount of the re-
funded bond, and 
(C) the net proceeds of the refunding bond 
are used to redeem the refunded bond not later 
than 90 days after the date of the issuance of 
the refunding bond. 
For purposes of subparagraph (A), average maturity 
shall be determined in accordance with section 
147(b)(2)(A) of such Code. 
(7) EFFECTIVE
DATE.—This subsection shall 
apply to obligations issued on or after the date 
which is 180 days after the date of the enactment 
of this Act. 
(b) ITEMS FROM QUALIFIED HARVESTING ACTIVI-
TIES NOT SUBJECT TO TAX OR TAKEN INTO ACCOUNT.— 
(1) IN GENERAL.—Income, gains, deductions, 
losses, or credits from a qualified harvesting activity 
conducted by a qualified organization shall not be 
subject to tax or taken into account under subtitle 
A of the Internal Revenue Code of 1986. 
(2) LIMITATION.—The amount of income ex-
cluded from gross income under paragraph (1) for 
any taxable year shall not exceed the amount used 
by the qualified organization to make debt service 
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emcdonald on DSK2BSOYB1PROD with BILLS
payments during such taxable year for qualified for-
est conservation bonds. 
(3) QUALIFIED
HARVESTING
ACTIVITY.—For 
purposes of paragraph (1)— 
(A) IN
GENERAL.—The term ‘‘qualified 
harvesting activity’’ means the sale, lease, or 
harvesting, of standing timber— 
(i) on land owned by a qualified orga-
nization which was acquired with proceeds 
of qualified forest conservation bonds, and 
(ii) pursuant to a qualified conserva-
tion plan adopted by the qualified organi-
zation within 2 years of the acquisition. 
(B) EXCEPTIONS.— 
(i) CESSATION AS QUALIFIED ORGANI-
ZATION.—The term ‘‘qualified harvesting 
activity’’ shall not include any sale, lease, 
or harvesting for any period during which 
the organization ceases to qualify as a 
qualified organization. 
(ii) EXCEEDING
LIMITS
ON
HAR-
VESTING.—The term ‘‘qualified harvesting 
activity’’ shall not include any sale, lease, 
or harvesting of standing timber on land 
acquired with proceeds of qualified forest 
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emcdonald on DSK2BSOYB1PROD with BILLS
conservation bonds to the extent that the 
average quantity of timber removed from 
such land exceeds the quantity which can 
be removed from such land annually in 
perpetuity on a sustained-yield basis meas-
ured over the harvest rotation with respect 
to such land. The limitation described in 
the preceding sentence shall not apply to 
post-fire restoration and rehabilitation or 
sanitation harvesting of timber stands 
which are substantially damaged by fire, 
windthrow, or other catastrophes, or which 
are in imminent danger from insect or dis-
ease attack. 
(4) TERMINATION.—This subsection shall not 
apply to any qualified harvesting activity of a quali-
fied organization occurring after the date on 
which— 
(A) there is no outstanding qualified forest 
conservation bond with respect to such qualified 
organization, or 
(B) any such bond ceases to be a tax-ex-
empt bond. 
(5) PARTIAL RECAPTURE OF BENEFITS IF HAR-
VESTING LIMIT EXCEEDED.—If, as of the date that 
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emcdonald on DSK2BSOYB1PROD with BILLS
this subsection ceases to apply under paragraph 
(4)(B), the quantity of timber removed from the 
land 
exceeds 
the 
requirement 
of 
paragraph 
(3)(B)(ii), the tax imposed by chapter 1 of the Inter-
nal Revenue Code of 1986 shall be increased, under 
rules prescribed by the Secretary of the Treasury, by 
the sum of the tax benefits attributable to such ex-
cess and interest at the underpayment rate under 
section 6621 of such Code for the period of the un-
derpayment. 
(c) DEFINITIONS.—For purposes of this section— 
(1) QUALIFIED
CONSERVATION
PLAN.—The 
term ‘‘qualified conservation plan’’ means a multiple 
land use program or plan which— 
(A) is designed and administered primarily 
for the purposes of protecting and enhancing 
wildlife and fish, timber, scenic attributes, 
recreation, and soil and water quality of the 
forest and forest land, 
(B) mandates that conservation of forest 
and forest land is the single-most significant 
use of the forest and forest land, and 
(C) requires that timber harvesting be con-
sistent with— 
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emcdonald on DSK2BSOYB1PROD with BILLS
(i) restoring and maintaining ref-
erence conditions for the region’s ecotype, 
(ii) restoring and maintaining a rep-
resentative sample of young, mid, and late 
successional forest age classes, 
(iii) maintaining or restoring the re-
sources’ ecological health for purposes of 
preventing damage from fire, insect, or dis-
ease, 
(iv) maintaining or enhancing wildlife 
or fish habitat, or 
(v) enhancing research opportunities 
in sustainable renewable resource uses. 
(2) CONSERVATION
RESTRICTION.—The con-
servation restriction described in this paragraph is a 
restriction which— 
(A) is granted (through sale or donation) 
in perpetuity to an unrelated person which is 
described in section 170(h)(3) of such Code and 
which, in the case of a nongovernmental unit, 
is organized and operated for conservation pur-
poses, 
(B) meets the requirements of clause (ii) 
or (iii)(II) of section 170(h)(4)(A) of such 
Code, 
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emcdonald on DSK2BSOYB1PROD with BILLS
(C) obligates the qualified organization to 
pay the costs incurred by the holder of the con-
servation restriction in monitoring compliance 
with such restriction to the extent the holder of 
the conservation restriction does not have a 
dedicated source of such funding, and 
(D) requires an increasing level of con-
servation benefits to be provided whenever cir-
cumstances allow it. 
(3) 
QUALIFIED
ORGANIZATION.—The 
term 
‘‘qualified organization’’ means, during the time any 
qualified forest conversation bond for the organiza-
tion is outstanding, an organization exempt from tax 
under section 501(a)— 
(A) substantially all the activities of which 
are charitable, scientific or educational, includ-
ing acquiring, protecting, restoring, managing, 
sustainably harvesting, and developing forest 
lands and other renewable resources for the 
long-term charitable, educational, scientific, and 
public benefit, 
(B) which periodically conducts educational 
programs designed to inform the public of envi-
ronmentally sensitive forestry management and 
conservation techniques, 
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emcdonald on DSK2BSOYB1PROD with BILLS
(C) which has at all times a board of direc-
tors— 
(i) at least 20 percent of the members 
of which are representatives of the con-
servation community, 
(ii) at least 20 percent of the mem-
bers of which are public officials, and 
(iii) not more than one-third of the 
members of which are individuals who are 
or were at any time within 5 years before 
the beginning of a term of membership on 
the board, an employee of, independent 
contractor with respect to, officer of, direc-
tor of, or held a material financial interest 
in, a commercial forest products enterprise 
with which the qualified organization has a 
contractual or other financial arrangement, 
(D) the bylaws of which require at least 
two-thirds of the members of the board of direc-
tors to vote affirmatively to approve the quali-
fied conservation plan and any change thereto, 
and 
(E) upon dissolution, is required to dedi-
cate its assets to— 
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emcdonald on DSK2BSOYB1PROD with BILLS
(i) an organization described in sec-
tion 501(c)(3) of such Code which is orga-
nized and operated for conservation pur-
poses, or 
(ii) a governmental unit described in 
section 170(c)(1) of such Code. 
(4) UNRELATED
PERSON.—The term ‘‘unre-
lated person’’ means a person who is not a related 
person. 
(5) RELATED
PERSON.—A person shall be 
treated as related to another person if— 
(A) such person bears a relationship to 
such other person described in section 267(b) 
(determined without regard to paragraph (9) 
thereof), or 707(b)(1), of such Code, deter-
mined by substituting ‘‘25 percent’’ for ‘‘50 
percent’’ each place it appears therein, and 
(B) in the case such other person is a non- 
profit organization, if such person controls di-
rectly or indirectly more than 25 percent of the 
governing body of such organization. 
Æ 
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