[Congressional Record (Bound Edition), Volume 153 (2007), Part 27]
[Senate]
[Page 36361]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              THE TREE ACT

  Mrs. LINCOLN. Mr. President, I would like to engage in a colloquy 
with the leadership of the Senate Finance Committee regarding the 
timber tax provisions that are commonly referred to as the ``TREE 
Act.'' These provisions were included in the tax title of the Energy 
bill, which, regrettably, was deleted from the bill that the Senate 
passed last week. On a brighter note, they have been included in the 
tax title of the farm bill, which passed the Senate last week.
  As a matter of tax policy, enactment of the TREE Act is extremely 
important. It reforms the rules that apply to both corporations and 
individuals who own timber, thereby improving the international 
competitiveness of the U.S. timber industry.
  Enactment of the TREE Act also is time-sensitive. timber companies 
that continue to be organized as corporations are under intensifying 
pressure to reorganize. In that case, a corporation that owns 
substantial manufacturing facilities would be forced to sell some of 
those facilities, and to make other structural changes, in order to 
comply with the relevant tax rules that it would newly become subject 
to. This would be likely to cause disruptions in some of the affected 
communities, and also would make it harder for U.S. companies to 
compete internationally. To forestall these adverse consequences, 
Congress must act quickly.
  Accordingly, I am pleased that the Senate has enacted the TREE Act as 
part of the farm bill, and I believe that it is critical for Congress 
to enact a new farm bill, including the TREE Act, early next year. I 
would like to ask the chairman and ranking members of the Finance 
Committee whether they share this view.
  Mr. SMITH. Mr. President, I join my colleague, the senior Senator 
from Arkansas, in supporting the need to enact the timber tax 
provisions--also known as the Timber Revitalization and Economic 
Enhancement Act, TREE Act--in a timely manner.
  This tax policy is as important to Oregon as it is to other timber-
growing regions of the United States. The forest products industry is a 
cornerstone of Oregon's economy and culture. Oregon is home to more 
than 9.5 million acres of privately owned forests and more than 75,000 
people earn their living working for the forest products industry. In 
fact, Oregon is the No. 1 producer of lumber in the United States.
  While disappointed that the TREE Act was a part of the tax title 
removed from the version of the energy bill passed by the Senate, I am 
pleased the Senate was able to include the TREE Act provisions in the 
farm bill passed last week.
  It is crucial for Congress to enact early next year the TREE Act. I 
will work with my colleagues to see the TREE Act enacted in early 2008. 
It matters to all who grow trees--companies of all sizes and small tree 
farmers as well.
  Mr. BAUCUS. I appreciate Senators Lincoln's and Smith's leadership on 
this issue and I share their view. Although I had concerns about a 
somewhat similar provision that was considered in 2006, the fact that 
that there is now a consensus in support of the TREE Act in the U.S. 
forest products industry, and that modifications have been made, have 
led me to support the TREE Act, and to work to include it in both the 
tax title of the Energy bill and the tax title of the farm bill. I 
understand the time constraints, and pledge to work with the Senator 
from Arkansas and the Senator from Oregon, other interested Senators, 
and with the leaders of the House Ways and Means Committee to see that 
the TREE Act is enacted as part of the farm bill or other appropriate 
vehicle early in 2008.
  Mr. GRASSLEY. I agree. I have supported the enactment of the TREE Act 
for several years, and will work to see it enacted early in 2008.

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