[Congressional Record Volume 145, Number 48 (Thursday, March 25, 1999)]
[Extensions of Remarks]
[Page E567]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   THE REFORESTATION TAX ACT OF 1999

                                 ______
                                 

                           HON. JENNIFER DUNN

                             of washington

                    in the house of representatives

                        Thursday, March 25, 1999

  Ms. DUNN. Mr. Speaker, on March 11 when I introduced the 
Reforestation Tax Act of 1999, my statement focused on the benefits of 
this legislation to the forest products sector of our economy. Today, 
as I add eight more cosponsors to this increasingly popular effort, I 
would like to focus my remarks on the benefits for non-industrial 
forest land owners.
  America's privately-owned forests make up almost 58% of our nation's 
total forest lands and are one of our most valuable resources. They 
provide wildlife habitat, maintain watershed health, and are used for a 
wide array of recreational activities such as hiking, camping, fishing, 
and hunting. In addition, they provide the foundation for a multi-
billion dollar forest products industry.
  To ensure that our wildlife habitat and watershed needs as well as a 
reliable supply of timber is available for the future, we need to 
encourage industrial and nonindustrial landowners to invest in 
enhancing their forest ownership. Investing in forest land is risky. 
Trees can take anywhere from 25 to 75 years to grow to maturity, 
depending on the type of tree, regional weather, and soil conditions. 
The key to success is good management, which is costly. Furthermore, 
fire, disease, floods, and ice storms--events that are uninsurable--can 
wipe out acres of trees at any time during the long, risky growing 
period.
  The Reforestation Tax Act of 1999 will remove disincentives for 
private investment in our forests and help with the cost of maintaining 
them. By reducing the capital gains paid on timber for individuals and 
corporations by 3 percent each year the timber is held--up to a maximum 
reduction of 50 percent--forest landowners will be partially protected 
from being taxed on inflationary gains. While this provision would not 
fully compensate for the negative tax impact of inflation, it would 
provide a significant incentive for those forest land owners who must 
nurture their investment for a long period of time.
  Today, many landowners cease reforestation efforts when they reach 
the current $10,000 ceiling on expenses that are eligible for the 
credit. Removing the cap on expenses eligible for the credit would 
eliminate a disincentive for private forest land owners to plant more 
trees. Current law allows this $10,000 in reforestation expenses to be 
amortized over a seven year period. My legislation not only eliminates 
the monetary cap but also reduces the amortization period to five 
years. With these changes, the reforestation tax credit and 
amortization will encourage forest landowners to operate in an 
ecologically-sound manner that leads to the expansion of investment in 
this vital natural resource.
  By removing these current law disincentives to sustainable forestry 
for both our industrial and non-industrial forest land owners, we will 
increase reforestation and enhance sound environmental management on 
private land. We believe this will benefit Americans across the 
country, not just forest land owners.
  I am grateful for the broad support the Reforestation Tax Act of 1999 
has gained since its introduction, and I look forward to working with 
my colleagues in the House to make this bill a reality.

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