(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 an organization—
(A) which is a nonprofit organization orga-
nized and operated exclusively for charitable,
scientific, or educational purposes including but
not limited to acquiring, protecting, restoring,
managing, and developing forest lands and
other renewable resources for the long-term
charitable, educational, scientific, and public
benefit of the State of Washington,
(B) more than half of the value of the
property of which consists of forests and forest
land acquired with the proceeds from qualified
forest conservation bonds,
(C) which periodically conducts educational
programs designed to inform the public of envi-
ronmentally sensitive forestry management and
conservation techniques,
(D) which has a board of directors that at
all times is comprised of 9 members—
(i) at least 2 of whom represent the
holders of the conservation restriction de-
scribed in paragraph (2), and
(ii) at least 2 of whom are public offi-
cials,
(E) of which not more than one-third of
the members of the board of directors is com-
prised of 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, offi-
cer of, director of, or held a material financial
interest in, a commercial forest products enter-
prise with which the Evergreen Forest Trust
has a contractual or other financial arrange-
ment,
(F) 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 program and any change
thereto, and
(G) upon dissolution, is required to dedi-
cate its assets to—
(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) EVERGREEN
FOREST
TRUST.—The term
‘‘Evergreen Forest Trust’’ means a nonprofit cor-
poration known as the Evergreen Forest Trust
which was incorporated on February 25, 2000,
under chapter 24.03 of the Revised Code of Wash-
ington and which, on May 11, 2001, was recognized
as an organization described in section 501(c)(3) of
the Internal Revenue Code of 1986.
(5) UNRELATED
PERSON.—The term ‘‘unre-
lated person’’ means a person who is not a related
person.
(6) 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 occurs 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.
TITLE V—RELIEF AND EQUITY
FOR SMALL BUSINESSES
SEC. 501. SIMPLIFICATION OF EXCISE TAX IMPOSED ON
BOWS AND ARROWS.
(a) BOWS.—Paragraph (1) of section 4161(b) (relat-
ing to bows) is amended to read as follows:
‘‘(1) BOWS.—
‘‘(A) IN GENERAL.—There is hereby im-
posed on the sale by the manufacturer, pro-
ducer, or importer of any bow which has a draw
weight of 30 pounds or more, a tax equal to 11
percent of the price for which so sold.
‘‘(B) ARCHERY
EQUIPMENT.—There is
hereby imposed on the sale by the manufac-
turer, producer, or importer—
‘‘(i) of any part or accessory suitable
for inclusion in or attachment to a bow de-
scribed in subparagraph (A), and
‘‘(ii) of any quiver or broadhead suit-
able for use with an arrow described in
paragraph (3),
a tax equal to 11 percent of the price for which
so sold.’’.
(b) ARROWS.—Subsection (b) of section 4161 (relat-
ing to bows and arrows, etc.) is amended by redesignating
paragraph (3) as paragraph (4) and inserting after para-
graph (2) the following:
‘‘(3) ARROWS.—
‘‘(A) IN GENERAL.—There is hereby im-
posed on the sale by the manufacturer, pro-
ducer, or importer of any arrow, a tax equal to
12 percent of the price for which so sold.
‘‘(B) EXCEPTION.—The tax imposed by
subparagraph (A) on an arrow shall not apply
if the arrow contains an arrow shaft subject to
the tax imposed by paragraph (2).
‘‘(C) ARROW.—For purposes of this para-
graph, the term ‘arrow’ means any shaft de-
scribed in paragraph (2) to which additional
components are attached.’’.
(c) CONFORMING AMENDMENT.—The heading of sec-
tion 4161(b)(2) is amended by striking ‘‘ARROWS.—’’ and
inserting ‘‘ARROW COMPONENTS.—’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to articles sold by the manufac-
turer, producer, or importer after the 90th day after the
date of the enactment of this Act.
SEC. 502. CAPITAL GAIN TREATMENT UNDER SECTION
631(b) TO APPLY TO OUTRIGHT SALES BY
LANDOWNERS.
(a) IN GENERAL.—The first sentence of section
631(b) (relating to disposal of timber with a retained eco-
nomic interest) is amended by striking ‘‘retains an eco-
nomic interest in such timber’’ and inserting ‘‘either re-
tains an economic interest in such timber or makes an
outright sale of such timber’’.
(b) CONFORMING AMENDMENTS.—
(1) The third sentence of section 631(b) is
amended by striking ‘‘The date of disposal’’ and in-
serting ‘‘In the case of disposal of timber with a re-
tained economic interest, the date of disposal’’.
(2) The heading for section 631(b) is amended
by striking ‘‘WITH A RETAINED ECONOMIC INTER-
EST’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to sales after the date of the enact-
ment of this Act.
SEC. 503. REPEAL OF EXCISE TAX ON FISHING TACKLE
BOXES.
(a) REPEAL.—Paragraph (6) of section 4162(a) (de-
fining sport fishing equipment) is amended by striking
subparagraph (C) and by redesignating subparagraphs
(D) through (J) as subparagraphs (C) through (I), respec-
tively.
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect 30 days after the date of the
enactment of this Act.
SEC. 504. TREATMENT UNDER AT-RISK RULES OF PUBLICLY
TRADED NONRECOURSE DEBT.
(a) IN GENERAL.—Subparagraph (A) of section
465(b)(6) (relating to qualified nonrecourse financing
treated as amount at risk) is amended by striking ‘‘share
of’’ and all that follows and inserting ‘‘share of—
‘‘(i) any qualified nonrecourse financ-
ing which is secured by real property used
in such activity, and
‘‘(ii) any other financing which—
‘‘(I) would (but for subparagraph
(B)(ii)) be qualified nonrecourse fi-
nancing,
‘‘(II) is qualified publicly traded
debt, and
‘‘(III) is not borrowed by the tax-
payer from a person described in sub-
clause (I), (II), or (III) of section
49(a)(1)(D)(iv).’’.
(b) QUALIFIED PUBLICLY TRADED DEBT.—Para-
graph (6) of section 465(b) is amended by adding at the
end the following new subparagraph:
‘‘(F) 
QUALIFIED
PUBLICLY
TRADED
DEBT.—For purposes of subparagraph (A), the
term ‘qualified publicly traded debt’ means any
debt instrument which is readily tradable on an
established securities market. Such term shall
not include any debt instrument which has a
yield to maturity which equals or exceeds the
limitation in section 163(i)(1)(B).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to debt instruments issued after
the date of the enactment of this Act.
TITLE VI—EQUITY FOR
FARMERS
SEC. 601. SPECIAL RULES FOR LIVESTOCK SOLD ON AC-
COUNT OF WEATHER-RELATED CONDITIONS.
(a) RULES FOR REPLACEMENT OF INVOLUNTARILY
CONVERTED LIVESTOCK.—Subsection (e) of section 1033
(relating to involuntary conversions) is amended—
(1) by striking ‘‘CONDITIONS.—For purposes’’
and inserting ‘‘CONDITIONS.—
‘‘(1) IN GENERAL.—For purposes’’, and
(2) by adding at the end the following new
paragraph:
‘‘(2) EXTENSION OF REPLACEMENT PERIOD.—
‘‘(A) 
IN
GENERAL.—In 
the 
case 
of
drought, flood, or other weather-related condi-
tions described in paragraph (1) which result in
the area being designated as eligible for assist-
ance by the Federal Government, subsection
(a)(2)(B) shall be applied with respect to any
converted property by substituting ‘4 years’ for
‘2 years’.
‘‘(B) 
FURTHER
EXTENSION
BY
SEC-
RETARY.—The Secretary may extend on a re-
gional basis the period for replacement under
this section (after the application of subpara-
graph (A)) for such additional time as the Sec-
retary determines appropriate if the weather-re-
lated conditions which resulted in such applica-
tion continue for more than 3 years.’’.
(b) INCOME INCLUSION RULES.—Subsection (e) of
section 451 (relating to special rule for proceeds from live-
stock sold on account of drought, flood, or other weather-
related conditions) is amended by adding at the end the
following new paragraph:
‘‘(3) SPECIAL
ELECTION
RULES.—If section
1033(e)(2) applies to a sale or exchange of livestock
described in paragraph (1), the election under para-
graph (1) shall be deemed valid if made during the
replacement period described in such section.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to any taxable year with respect
to which the due date (without regard to extensions) for
the return is after December 31, 2002.
SEC. 602. INCOME AVERAGING FOR FARMERS NOT TO IN-
CREASE ALTERNATIVE MINIMUM TAX.
(a) IN GENERAL.—Subsection (c) of section 55 (de-
fining regular tax) is amended by redesignating paragraph
(2) as paragraph (3) and by inserting after paragraph (1)
the following new paragraph:
‘‘(2) COORDINATION WITH INCOME AVERAGING
FOR FARMERS.—Solely for purposes of this section,
section 1301 (relating to averaging of farm income)
shall not apply in computing the regular tax liabil-
ity.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 2002.
SEC. 603. PAYMENT OF DIVIDENDS ON STOCK OF COOPERA-
TIVES 
WITHOUT 
REDUCING 
PATRONAGE
DIVIDENDS.
(a) IN GENERAL.—Subsection (a) of section 1388
(relating to patronage dividend defined) is amended by
adding at the end the following: ‘‘For purposes of para-
graph (3), net earnings shall not be reduced by amounts
paid during the year as dividends on capital stock or other
proprietary capital interests of the organization to the ex-
tent that the articles of incorporation or bylaws of such
organization or other contract with patrons provide that
such dividends are in addition to amounts otherwise pay-
able to patrons which are derived from business done with
or for patrons during the taxable year.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to distributions in taxable years
beginning after the date of the enactment of this Act.
TITLE VII—PROTECTION OF
SOCIAL SECURITY
SEC. 701. PROTECTION OF SOCIAL SECURITY.
The amounts transferred to any trust fund under
title II of the Social Security Act shall be determined as
if this Act (other than title I, section 301, and this section)
had not been enacted.
Passed the House of Representatives March 19,
2003.
Attest:
Clerk.