[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1422 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 1422

 To amend the Internal Revenue Code of 1986 to deny any deduction for 
 expenses in connection with the cutting of old-growth redwood timber 
  and certain other redwood timber and to impose an excise tax on the 
                        cutting of such timber.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 18, 1993

  Mr. Stark 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 any deduction for 
 expenses in connection with the cutting of old-growth redwood timber 
  and certain other redwood timber and to impose an excise tax on the 
                        cutting of such timber.

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

SECTION 1. DENIAL OF DEDUCTION FOR EXPENSES IN CONNECTION WITH CUTTING 
              OF CERTAIN REDWOOD TIMBER.

    (a) General Rule.--Part IX of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to certain items not 
deductible) is amended by adding at the end thereof the following new 
section:

``SEC. 280I. EXPENSES IN CONNECTION WITH CUTTING OF CERTAIN REDWOOD 
              TIMBER.

    ``(a) General Rule.--No deduction shall be allowed for any 
disqualified redwood timber expense.
    ``(b) Disqualified Redwood Timber Expense.--For purposes of this 
section--
            ``(1) In general.--The term `disqualified redwood timber 
        expense' means any expense in connection with--
                    ``(A) the cutting of redwood timber if--
                            ``(i) such timber is old-growth redwood 
                        timber, or
                            ``(ii) such timber is disqualified 
                        securitized redwood timber, or
                    ``(B) the transportation of such timber in its 
                unprocessed state.
            ``(2) Treatment of depreciation and depletion allowances.--
        For purposes of paragraph (1), allowances under section 167 or 
        611 shall be treated as expenses.
    ``(c) Old-Growth Redwood Timber.--For purposes of this section, the 
term `old-growth redwood timber' means any redwood timber on a tract on 
which at least 10 percent of the redwood trees are at least 150 years 
old.
    ``(d) Disqualified Securitized Redwood Timber.--For purposes of 
this section, the term `disqualified securitized redwood timber' means 
any redwood timber if (under the terms of any disqualified debt 
obligation or any underlying arrangement)--
            ``(1) such timber is (directly or indirectly) part of the 
        security for any disqualified debt obligation, or
            ``(2) proceeds from the sale of such timber are to be used 
        (directly or indirectly) to make payments of interest or 
        principal on any disqualified debt obligation.
    ``(e) Disqualified Debt Obligation.--For purposes of this section, 
the term `disqualified debt obligation' means any publicly offered debt 
obligation which is issued on or after March 12, 1993, if (under the 
terms of such obligation or any underlying arrangement)--
            ``(1) substantially all of the security for such obligation 
        is (directly or indirectly) redwood timber, or
            ``(2) substantially all of the interest or principal 
        payments on such obligation is to be derived (directly or 
        indirectly) from sales of redwood timber.''
    (b) Clerical Amendment.--The table of sections for part IX of 
subchapter B of chapter 1 of such Code is amended by adding at the end 
thereof the following new item:

                              ``Sec. 280I. Expenses in connection with 
                                        cutting of certain redwood 
                                        timber.''
    (c) Effective Date.--The amendments made by this section shall 
apply to expenses attributable to periods after the date of the 
enactment of this Act.

SEC. 2. EXCISE TAX ON CUTTING OF CERTAIN REDWOOD TIMBER.

    (a) General Rule.--Chapter 36 of the Internal Revenue Code of 1986 
(relating to certain other excise taxes) is amended by adding at the 
end thereof the following new subchapter:

        ``Subchapter G--Tax on Cutting of Certain Redwood Timber

                              ``Sec. 4511. Imposition of tax.

``SEC. 4511. IMPOSITION OF TAX.

    ``(a) General Rule.--There is hereby imposed a tax on the cutting 
of any taxable redwood timber equal to 75 percent of the fair market 
value of such timber.
    ``(b) Person Liable for Tax.--The tax imposed by subsection (a) 
shall be paid by the holder of the economic interest with respect to 
the timber.
    ``(c) Taxable Redwood Timber.--For purposes of this section, the 
term `taxable redwood timber' means--
            ``(1) any old-growth redwood timber (as defined in section 
        280I(c), and
            ``(2) any disqualified securitized redwood timber (as 
        defined in section 280I(d)).''
    (b) Denial of Deduction for Tax.--Paragraph (6) of section 275(a) 
of such Code is amended by inserting before the period at the end 
thereof the following: ``or by subchapter G of chapter 36''.
    (c) Clerical Amendment.--The table of subchapters for chapter 36 of 
such Code is amended by adding at the end thereof the following new 
item:

                              ``Subchapter G. Tax on cutting of certain 
                                        redwood timber.''
    (d) Effective Date.--The amendments made by this section shall 
apply in the case of timber cut after the date of the enactment of this 
Act.

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