Committee hears bill to let DNR sell ecosystem-service credits on trust lands

At a House Agriculture and Natural Resources Committee meeting, members heard testimony on House Bill 1508, which would authorize the Department of Natural Resources to monetize specified ecosystem-service projects on state trust lands, including afforestation, reforestation and aquatic projects, and allow contracts that may run up to 125 years.

The bill’s sponsor, Rep. Christine Reeves, said the measure is designed to add “tools in the toolbox” for state agencies to generate revenue for trust beneficiaries, particularly public schools, while offering an option other than timber harvest. Staff told the committee the bill requires DNR to report to the Legislature on project payments, types and projected revenues and gives the Board of Natural Resources oversight responsibilities.

Lily Smith, staff to the committee, described the bill as substantially similar to a prior House bill and said eligible projects under the bill “must be an afforestation, reforestation, or an aquatic project” and “may include things like carbon sequestration and climate stabilization.” Smith told members that contracts for ecosystem projects may last for up to 125 years and that DNR must submit a report to the Legislature documenting payments and operability of carbon-offset rules.

Rep. Reeves, the bill’s prime sponsor, framed the measure as a change-management tool to balance revenue needs for public school beneficiaries with changing public expectations about timber harvest. “If we don’t want to cut down trees anymore…we need to be having conversations about what other tools to generate revenue are there so that our kids don’t get left behind,” Reeves said. She noted the bill is the product of negotiations dating to 2022 and thanked conservation and timber-industry partners for helping to craft the current version.

Committee members questioned specific mechanics. Rep. Orcutt asked whether the 125-year contract length would effectively “lock forests up” at a new rotation age; Reeves said she is open to adjusting that time period and pointed to a science assessment and work group report due back to the Legislature (she said the report is due June 1) that should inform any changes.

Stakeholder testimony split along familiar lines. Timber-industry witnesses, including Bill Turner of Sierra Pacific Industries and Heath Eichler of the American Forest Resource Council, said carefully designed carbon or ecosystem projects can be “additive” and compatible with sustained timber economies; Turner said his company participates in the California compliance carbon market and supports the bill as written. Industry witnesses and associations praised language that requires projects to produce revenue for beneficiaries.

Conservation groups expressed conditional support but urged broader authority and fewer restrictions. Rishka Kechkesh of Sierra Club, Paula Swadine of Conservation Northwest and Rachel Baker of Washington Conservation Action told the committee they back DNR having authority to sell ecosystem credits but said the bill as drafted excludes project types they consider financially viable and effective, such as improved forest management (IFM) and avoided conversion projects. Baker also raised a legal concern, telling the committee a bill requirement that ecosystem services “increase revenue” could conflict with Washington case law that requires DNR to balance revenue with other trust obligations rather than maximize revenue alone.

Department and conservation partners said they support continued work on the issue. Dwayne Emmons of DNR offered technical support and said staff would engage in interim discussions. Skippy Shaw of The Nature Conservancy said the organization favored an earlier, simpler bill that gave the Board of Natural Resources discretion; the organization expressed reservations about narrowing eligible project types and unique revenue restrictions in the current draft.

Several students and young people testified in favor of the bill, saying ecosystem-service projects could both generate revenue and protect forest and watershed health. Committee staff read into the record sign-in tallies for the bill’s public record: Pro 10, Con 928.

The committee suspended public testimony on HB 1508 to take it up again later in the interim and to allow additional stakeholder engagement and consideration of the science work group report. No final vote on the bill was taken at the hearing.

Why it matters: House Bill 1508 would change how DNR may use state trust lands to generate funds for trust beneficiaries by adding ecosystem-service payments as a permitted revenue stream. Supporters say the measure provides a non‑harvest revenue option that could help stabilize funding for schools and communities; critics say the bill’s limits on project types and its revenue test risk excluding the most financially viable forest-carbon project types and should be resolved by the Board of Natural Resources and DNR rulemaking.

Next steps: The committee paused public testimony and signaled it expects further work in the interim, including review of a science assessment and ongoing rulemaking and work-group activity related to carbon protocols.