This report is about the appropriations for the fiscal Year 1996.

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Many U.S. lumber producers have complained that subsidies to Canadian lumber producers give them an unfair advantage in supplying the U.S. market. The dispute has evolved through various forums over the past 15 years. Recent negotiations led to an agreement on May 28 to reduce Canadian lumber exports with a tariff rate quota (i.e., a tariff on imports above the quota) probably by about 9% from record 1995 levels, leading to expectations of trade harmony (at least on this issue) for the next 5 years.

On May 31, the President formally recommended a one-year extension of most-favored-nation (MFN) treatment for China. [l] MFN treatment allows China's products to enter the United States at the same low tariff rates that apply to virtually all trading partners. Supporters of MFN status for China argue, among other things, that denial of MFN status could bring retaliatory actions that would hurt U.S. agricultural exports. China has threatened to retaliate if the United States denies it MFN treatment. Since China is a leading market for U.S. agricultural products, the threat of such action is a serious matter for U.S. agricultural interests.

The Antiterrorism and Effective Death Penalty Act of 1996 is the product of legislative efforts stretching back well over a decade and stimulated to passage in part by the tragedies in Oklahoma City and the World Trade Center. This report summarizes the six titles of the Act, its sources, and related legislation.

Although recent development of China's wealth and power poses opportunities as well as challenges for U.S. policy, participants at a CRS seminar on dealing with China's rise focused on the challenges. China is seen as a very large, strategically located country undergoing rapid economic growth and social change, and ruled by authoritarian political leaders. Since the Maoist era, China has made great strides in conforming to many international norms, but a combination of rising Chinese power and nationalistic assertiveness poses serious problems for: U.S. security interests in Asia; U.S. efforts to curb trafficking in technology for weapons of mass destruction and conventional weapons; U.S. support for a smooth running market basedinternational economic systems; and U.S. backing of other international norms regarding human rights, environmental protection and other issues.

Recent political and military tensions between China and Taiwan have focused new attention on U.S. economic interests in the region. The volume of trade and investment between the United States and Taiwan and China has soared during the last 10 years. This trend has helped forge closer ties between the United States and the two economies, but has also been the source of friction. U.S. economic relations with China and Taiwan are likely to be of concern to Congress during the annual debate over U.S. renewal of China's most-favored-nation (MFN) status. This report analyzes U.S. economic ties with China and Taiwan, including trends, the major issues, and future prospects. It also examines the growing economic ties between China and Taiwan

Interest in salvaging timber has increased markedly since extensive forest fires in 1994. The focus is to use the dead and dying timber before it goes to waste and to increase the supply of Federal timber available to the wood products industry. Supporters also note that salvage sales are one tool that can be used to improve forest health. Critics counter that some dead and dying trees are necessary for healthy ecosystems, and that salvage sales are costly to the U.S. Treasury and to the environment. This report describes the concerns over forest health, and then examines the benefits, costs, and financial consequences of salvage timber sales.

Interest in fuel management, to reduce fire control costs and damages, has been renewed with the numerous, destructive wildfires spread across the West during the summers of 1988 and 1994.

The salvage timber rider is actually the Emergency Salvage Timber Sale Program, enacted as �2001 of P.L. 104-19, the 1995 Emergency Supplemental Appropriations and Rescissions Act on July 27, 1995.

Studies have estimated that some of these revisions would cause a decline in demand for houses and significant reduction in house prices--perhaps in excess of 15 percent. These studies, however, presumed a fixed supply of housing; even a limited supply response would greatly decrease predicted asset price effects. Supply response is likely to be large in the long run and not insignificant in the short run. Effects on housing demand might also be mitigated by increases in savings rates and lower interest rates. Thus, effects of the flat tax on housing prices are likely to be limited in the short run and very small in the long run. Rental housing demand, on the other hand, would be encouraged with a shift to a consumption tax base.

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For more than 30 years, Congress has debated constructing a dam on the American River near Auburn, California. The Army Corps of Engineers recently identified three alternatives for flood control, with the Division office's preferred plan calling for construction of a 508-foot-high detention dam. Currently, two bills address the issue: H.R. 3270 supports construction of the dam, while H.R. 2951 opposes construction of any structure on the North Fork of the American River.