The Department of Natural Resources (DNR) manages 5.6 million acres of state-owned land, which includes forestlands; aquatic lands; and state trust land that provides revenue to help pay for construction of public schools, universities, and other state institutions, and funds services in many counties. The Commissioner of Public Lands (Commissioner) is a separately elected statewide official and the administrator for the DNR. The Commissioner chairs the state's Board of Natural Resources, which sets policy for the management of state lands and also the Forest Practices Board, which regulates forest operations.
Generally, valuable materials that are derived on state forestlands and state-owned aquatic lands may be sold, and the funds from those sales must be used in certain ways:
The Department of Natural Resources (DNR) may enter into contracts for payment for ecosystem services projects on all public lands managed by the DNR, according to terms and conditions acceptable to the DNR, in order to generate revenue by providing ecosystem services that directly or indirectly benefit humans or enhance social welfare. Contracts may last for up to 125 years. Ecosystem service projects are projects that provide benefits that the public enjoys as a result of natural processes and biodiversity. Ecosystem services include carbon sequestration and storage, air and water filtration, climate stabilization, and disturbance mitigation.
Proceeds from contracts must be deposited into the appropriate account in the State Treasury and distributed in the same manner as money derived from the sale of valuable materials under current law. Proceeds from contracts on state forestlands must be deposited into the Forest Development Account. Proceeds from the sale of ecosystem services derived from state-owned aquatic lands must be deposited into the Aquatic Lands Enhancement Account.
The DNR may:
Ecosystem service projects must result in no net decrease in agricultural production for agricultural lands and no net decrease in the decadal sustainable harvest volume and operable forestland acres on state lands and state forestlands within the sustainable harvest unit. Additionally, ecosystem service projects must result in a net increase in future sustainable harvest volume on forested state trust lands within the sustainable harvest unit. Payment for an ecosystem services project, contract, or agreement may not limit or impair the exercise of tribal treaty and reserved rights, existing tribal access to lands managed by the DNR, or preexisting agreements between tribes and the DNR.
The DNR must publish notice of intent to enter contract negotiations on its website within 90 days preceding the commencement of negotiations. The DNR may conduct additional advertising that it determines is in the best interest of the state.
Upon execution of a contract, the DNR must report the term of the contract and projected revenues to the Board. Before entering into a sale of ecosystem services credits, the Board must set a minimum payment and approve contract terms valid for at least 180 days. The Board may reestablish the minimum payment at any time. The DNR may set the final payment, which must be based on current market prices.
The DNR must submit a report to the Legislature and the Office of Financial Management by December 1, 2024, that includes: (1) information on payment for ecosystem service projects entered into or committed to by the DNR, including type of projects, the number of acres involved, and projected revenues; and (2) any challenges or barriers encountered by the DNR in the process of attempting to implement carbon offset or payment for ecosystem service projects and recommendations to address those challenges and barriers.
Definitions are provided for the following additional terms:
As compared to the original bill, the substitute bill:
(In support) Lands that are managed by the Department of Natural Resources (DNR) provide critical ecosystem services like habitat and carbon sequestration, but also provide important building materials and agricultural products that humans need. This bill will allow the DNR to tap into new revenue streams to provide money to schools and the trust beneficiaries, to support salmon recovery, and to help mitigate impacts from a rapidly changing climate. The DNR will continue to support working forests. Currently, the DNR is limited in its ability to sell carbon credits under the Climate Commitment Act. Carbon projects can help prevent the conversion of forestlands to other non-forest uses. This is a thoughtful, proactive approach to help rural communities generate revenue. State lands provide ongoing benefits to wildlife by keeping ecosystems intact ensuring healthy elk and deer populations that are so important to the ways of life of the state's tribal nations. There should be an amendment that ensures that the DNR's projects will not impede tribal treaty rights. Offsets are less expensive than allowances and are a source of innovation. There is an increasing demand for offsets and as a result they have a higher value coming to market. Land use and forest practices should be responsive to science. Forest carbon projects come in various shapes and sizes, and can be done in a way that benefits the trust beneficiaries. Landowners can lengthen rotations with more thinning. Some areas could benefit from ecosystem projects along diverse landscapes. Language should be added from Senate Bill 5688 to allow the Department of Ecology to support the DNR. The devil is in the details. Nature-based and forest-based credits are emerging and fast-growing markets. New jobs will be created. The bill provides a clear role for the Board of Natural Resources (Board) to establish minimum payments. It is difficult to achieve climate targets without a system in place. Ecosystem service projects and sustainable timber economy are not mutually exclusive. This is a way to compensate rural communities for the ecosystem services that they provide. Maintaining healthy ecosystems also contributes to human health benefits. With this bill, the DNR will have the same ability as the private sector to sell credits in voluntary markets. There are no downsides to this bill.
(Opposed) The bill requires the Board to abdicate its responsibilities by transferring authority to the Commissioner of Public Lands (Commissioner), and gives the DNR sweeping new authority. Rural communities rely on revenue generated from state-owned forestlands. Wood is the only reliably sustainable building material. There is concern that this bill will result in job loss in the timber and milling industries, reduce revenue to junior taxing districts, and negatively impact investments in local companies. Trustees and the public have not had a chance to review this policy. Not enough work has been done to ensure that this policy will not result in reduced timber harvest. If less timber is harvested there will be a need to import wood to meet our construction needs, resulting in even more carbon emissions, possibly from countries that do not share our values. Please get this complicated policy right. This bill is fraught with pitfalls. The DNR's modeling and knowledge is insufficient to fully assess all of the impacts of this legislation. It is important to think globally but act locally. The most effective climate solutions include local action. Washington is ahead of the game, but this bill does not lead toward the cohesive strategy that is needed. Allowing such long lease terms potentially allows prime timberland to be taken out of production for a century. Lease terms of 125 years could also be used by a future Commissioner or staff to prevent harvesting and management strategies.
(Other) Counties are the beneficiaries of revenues generated on state lands. The money goes to support schools, emergency services, and other important services. Counties support the intent of the legislation. Any legislation on this topic must guarantee added value, increased revenue, no net decrease in timber harvesting, and that revenue from ecosystem services projects does not substitute for timber revenue.