TREATMENT OF EXPORT OF CERTAIN SOFTWOOD LOGS.

SEC. 13239. TREATMENT OF EXPORT OF CERTAIN SOFTWOOD LOGS. (a) Foreign Sales Corporations.— Paragraph (2) of section 927(a) (relating to exclusion of certain property) is amended by striking “or” at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting “, or”, and by adding at the end the following: “(E) any unprocessed timber which is a softwood. For purposes of subparagraph (E), the term ‘unprocessed timber’ means any log, cant, or similar form of timber.” (b) Domestic International Sales Corporations.— Paragraph (2) of section 993(c) (relating to exclusion of certain property) is amended— (1) by striking “or” at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting “, or”, and by adding after subparagraph (D) the following new subparagraph: “(E) any unprocessed timber which is a softwood.”, and (2) by adding at the end the following new sentence: “For purposes of subparagraph (E), the term ‘unprocessed timber’ means any log, cant, or similar form of timber.” (c) Source Rule.— Subsection (b) of section 865 (relating to source rules for personal property sales) is amended by adding at the end the following: “Notwithstanding the preceding sentence, any income from the sale of any unprocessed timber which is a softwood and was cut from an area in the United States shall be sourced in the United States and the rules of sections 862(a)(6) and 863(b) shall not apply to any such income. For purposes of the preceding sentence, the term ‘unprocessed timber’ means any log, cant, or similar form of timber.” (d) Elimination of Deferral.— Subsection (d) of section 954 is amended by adding at the end the following new paragraph: “(4) Special rule for certain timber products.— For purposes of subsection (a)(2), the term ‘foreign base company sales income’ includes any income (whether in the form of profits, commissions, fees, or otherwise) derived in connection with— “(A) the sale of any unprocessed timber referred to in section 865(b), or “(B) the milling of any such timber outside the United States. Subpart G shall not apply to any amount treated as subpart F income by reason of this paragraph.” (e) Effective Date.— The amendments made by this section shall apply to sales, exchanges, or other dispositions after the date of the enactment of this Act.