Committee hears bill to let DNR monetize certain ecosystem service projects on state lands

At a meeting of the House Agriculture and Natural Resources Committee, staff briefed members on House Bill 1508, which would authorize the Department of Natural Resources to monetize certain ecosystem service projects on state trust lands and require the Board of Natural Resources to provide oversight.

The bill would limit eligible projects to afforestation, reforestation or aquatic projects (including carbon sequestration and climate stabilization), allow contracts for up to 125 years, require that a project result in a revenue increase to trust beneficiaries, and direct DNR to report to the Legislature on project payments, project types and projected revenues as well as any issues encountered and the operability of carbon offset rules.

Supporters including timber companies and some forest-land managers said HB 1508 is a measured first step that can generate new revenue for schools and local beneficiaries while allowing ecosystem work on state land. Bill Turner, Washington and Oregon timber manager for Sierra Pacific Industries, said the bill would allow DNR to reforest burned areas and seek credit for additional growth. "This bill allows the DNR to reforest burned areas and then get credit because that investment in there to potentially get credit for that," Turner said. Representatives of the American Forest Resource Council called the bill a "careful first step" but urged coordination with ongoing rulemaking.

Conservation groups and climate advocates supported DNR authority to sell ecosystem credits in principle but urged changes. Rachel Baker of Washington Conservation Action said the bill excludes the largest part of the forest carbon market—improved forest management projects—and contains a problematic requirement that ecosystem services "increase revenue" compared with the status quo. "The bill excludes the largest and to date only financially viable part of the forest carbon offset market, which is improved forest management projects that can generate payments and allow us to harvest timber," Baker said. Paula Swedine of Conservation Northwest and Mariska Ketchkis of the Sierra Club likewise urged adding improved forest management and avoided conversion project types and said DNR and the Board of Natural Resources should have discretion to implement projects.

Staff and the bill sponsor, Representative Christine Reeves, emphasized the measure is the product of multi‑year negotiations and that the Legislature has already directed related research. Lily Smith, staff to the committee, said the bill tracks language of a prior bill that passed the House in 2023 and noted that an earlier budget proviso led to a work group and a report on rotation extensions that is due to the Legislature June 1. "Contracts for ecosystem projects may last for up to 125 years, and the Board of Natural Resources has specific oversight responsibilities," Smith said.

DNR and conservation partners told the committee they are willing to continue the negotiation in the interim so implementation can align with rulemaking under the Climate Commitment Act and results from the Carbon and Forest Management Work Group. Skippy Shaw of The Nature Conservancy said the organization supported a prior, simpler draft that gave DNR discretion to identify an appropriate set of projects and that it remains committed to continued engagement.

The committee suspended the public hearing on HB 1508 to take other business and later reopened the hearing for public testimony. Multiple industry witnesses, conservation groups and students testified in favor and in opposition. The committee staff read into the record the number of sign-ins not wishing to testify (pro 10, con 928) and closed public testimony; no final vote or formal action on the bill was recorded in the transcript.

Next steps: committee members and stakeholders said they expect continued interim work to reconcile eligible project types, the revenue requirement and coordination with statewide carbon‑offset rulemaking before the bill is advanced.