To authorize the States to impose an export tax on unprocessed timber from private lands, to allow a credit against income taxes for domestically processed timber, and for other purposes.

Title I: Authority to Impose Export Tax on Unprocessed Timber - Allows a State to impose a tax of up to ten percent on the export value of unprocessed timber which is harvested from private lands in that State and is exported into foreign commerce from that State or any other State. Provides that such tax may be imposed at the time the timber is exported. Requires the deposit of such tax revenues in the U.S. Treasury.

Establishes the Timber Trust Fund consisting of 75 percent of revenues generated by the State tax and investment proceeds. Requires the Secretary of the Treasury, at the end of each fiscal year, to make amounts in such Trust Fund available to a State in the same proportion to the revenues deposited by such State. Allows a State to use such amounts only for: (1) economic development in timber dependent communities; (2) retraining of workers who have lost jobs in timber harvesting or in primary or secondary wood products industries; (3) developing secondary wood products industries; (4) developing markets for finished wood products; (5) providing funds to counties that are adversely affected by the loss of revenues from timber harvested from State lands that has resulted from export restrictions imposed on such timber; and (6) reforestation and intensive management of private, non-industrial, forest lands. Requires a State to submit a plan on the programs for which the funds will be used, including a definition of "export value" applied in imposing the export tax.

Directs the Commissioner of Customs to require each exporter of unprocessed timber, at the time of exportation, to verify that all State taxes on such timber have been paid.

Title II: Credit for Domestically Processed Timber - Amends the Internal Revenue Code to allow a business tax credit for two percent of qualified timber receipts for domestically processed timber. Provides that if the taxpayer processed qualified timber within the United States before the first sale of such timber, then such processing shall be treated as a sale.