74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 879
 
                         House Bill 2293
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Governor Theodore R.
  Kulongoski for State Forestry Department)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Identifies Forest Resource Trust programs as those authorized
by State Board of Forestry to further purposes of Forest Resource
Trust. Establishes voluntary cost share program. Establishes
voluntary environmental services program. Establishes voluntary
loan program. Establishes credit for environmental services.
Clarifies financial assistance terms for Forest Resource Trust
programs. Clarifies State Forestry Department's responsibility to
assist State Board of Forestry in carrying out duties of Forest
Resource Trust. Clarifies conditions for contracts between State
Forester and eligible landowners. Clarifies State Board of
Forestry report to Legislative Assembly.
 
                        A BILL FOR AN ACT
Relating to Forest Resource Trust; creating new provisions; and
  amending ORS 526.700, 526.705, 526.710, 526.715, 526.730,
  526.735 and 526.783.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 526.700 is amended to read:
  526.700. (1) The Forest Resource Trust is established in the
State Forestry Department. The Forest Resource Trust shall
provide funds for financial, technical and related assistance to
  { - nonindustrial private - }   { + qualified nonfederal + }
forestland owners for stand establishment and improved management
of forestlands for timber production as well as wildlife, water
quality and other environmental purposes.
  (2) The members of the State Board of Forestry shall have
overall responsibility for management of the Forest Resource
Trust. The board is authorized to establish policies and programs
in addition to those created by ORS 526.700 to 526.775 to further
the purposes of the trust.
  (3) The board shall appoint an advisory committee consisting of
no more than 15 members representing the public, nonindustrial
private forestland owners, the forest products industry, forest
consultants and contractors, the financial community,
environmental and conservation organizations and other related
interests including affected state agencies. The advisory
committee shall assist the board in setting policy for the best
use and investment of funds available to the trust and otherwise
 
assist board members in the performance of their duties as
trustees.
  (4) In accordance with any applicable provisions of ORS chapter
183, the board shall adopt rules to carry out the duties,
functions and powers of the Forest Resource Trust and to guide
implementation of the   { - stand establishment program created
under ORS 526.705 - }   { + Forest Resource Trust programs + }.
  (5) The State Forester is responsible for implementing board
policies and programs for the Forest Resource Trust.
  SECTION 2.  { + (1) The State Board of Forestry shall establish
a voluntary cost share program to ensure that the purposes of the
Forest Resource Trust are achieved. The purpose of the program is
to provide financial and other incentives for stand establishment
and improved management of nonindustrial private forestlands.
  (2) In advancing moneys and providing other assistance for
stand establishment and improved forest management, the State
Forester shall:
  (a) Give priority, to the extent possible, to lands zoned for
forest use under county comprehensive plans and to other lands
with moderate to high probability of success for long-term stand
establishment and improved forest management activities; and
  (b) Consider the development and maintenance of environmental
services. + }
  SECTION 3.  { + (1) The State Board of Forestry shall establish
a voluntary environmental services program to ensure that the
purposes of the Forest Resource Trust are achieved. The purpose
of the program is to provide financial and other incentives for
the development and maintenance of environmental services through
stand establishment and improved management of nonfederal
forestlands.
  (2) In advancing moneys and providing other assistance for the
development and maintenance of environmental services, the State
Forester shall:
  (a) Give priority, to the extent possible, to sustainable
nonindustrial private forestlands, especially in lands zoned for
forest use under county comprehensive plans and other lands with
moderate to high probability of long-term success to develop and
maintain environmental services;
  (b) Give priority, to the extent possible, to habitats and
opportunities identified in Oregon's Comprehensive Wildlife
Conservation Strategy, or in other conservation strategies;
  (c) Give priority, to the extent possible, to landowner
cooperatives to improve the efficiency and effectiveness in
delivering environmental services;
  (d) Consider management options that can improve the delivery
of high-quality environmental services and also promote
sustainable timber management; and
  (e) Consider other relevant factors necessary to the
development and maintenance of environmental services. + }
  SECTION 4. { +  (1) The State Board of Forestry shall establish
a voluntary loan program to ensure that the purposes of the
Forest Resource Trust are achieved. The purpose of the program is
to provide financial and other incentives for stand establishment
and improved management of nonindustrial private forestlands,
thereby establishing forest stands on over 250,000 acres of
unstocked and underproducing nonindustrial private forestlands.
  (2) In advancing moneys and providing other assistance for
stand establishment and improved forest management, the State
Forester shall:
  (a) Give priority, to the extent possible, to lands zoned for
forest uses under county comprehensive plans and to other lands
with moderate to high probability of success for long-term stand
establishment and improved forest management activities; and
  (b) Consider the development and maintenance of environmental
services. + }
 
  SECTION 5.  { + Section 6 of this 2007 Act is added to and made
a part of ORS 526.700 to 526.775. + }
  SECTION 6.  { + (1) On behalf of the Forest Resource Trust, the
State Forester may market, register, transfer and sell credits
for environmental services attributable to the lands in Forest
Resource Trust programs. Credits for environmental services shall
be based on units of quantifiable environmental services,
including but not limited to provision of clean water and air,
pollination of crops, mitigation of environmental hazards,
control of pests and diseases, sequestration of carbon and
reduction of carbon dioxide emissions, conservation of fish and
wildlife habitat and ensuring soil productivity.
  (2) Credits for environmental services may be sold or
transferred only for the fair market value of the credits at the
time of the sale.
  (3) To ensure the consistent reporting of credits for
environmental services, the State Forester shall develop an
accounting system for the registration, transfer and sale of
credits for environmental services. The accounting system shall
develop or use accepted principles and standards related to
creating, measuring, monitoring, marketing, verifying,
registering, transferring and selling credits for environmental
services. + }
  SECTION 7. ORS 526.705 is amended to read:
  526.705.   { - (1) To carry out the duties, functions and
powers of the Forest Resource Trust, there is created a voluntary
stand establishment program to finance the establishment and
maintenance of healthy stands of trees in an environmentally
responsible manner on unstocked and underproducing nonindustrial
private forestlands. The goal of the stand establishment program
is to reforest 250,000 acres by the year 2010. - }
    { - (2) In advancing moneys and providing other assistance
for stand establishment, the State Board of Forestry shall: - }
    { - (a) Give priority to lands zoned for forest uses under
county comprehensive plans and to other lands with moderate to
high probability of success in reforestation or environmental
restoration; and - }
    { - (b) Consider development of financial and other
incentives for good land management, compliance with plans for
established stands, and for growth to maturity and harvest. - }
    { - (3) - }   { + (1)  + }  { - The board - }   { + The State
Board of Forestry by rule + } shall establish   { - options - }
 { + financial agreements + } for the repayment of
 { - advanced - }  moneys  { + advanced + }   { - consistent with
subsection (2) of this section and including but not limited to
the following, singly or in combination: - }
    { - (a) A revenue-sharing proposal that guarantees the
landowner a percentage of the receipts upon harvest after payment
of harvest and severance taxes; - }
    { - (b) Financial agreements; and - }
    { - (c) Repayment in full with interest if a landowner fails
to get the stand free to grow as that term is defined in the
Oregon Forest Practices Act, unless said failure is through no
fault of the landowner - }   { + from the voluntary loan program
established by section 4 of this 2007 Act + }.
    { - (4) - }  The terms of repayment shall be based on
considerations that represent the best use and investment of
funds { + , + } including:
    { - (a) Reasonable assumptions regarding future timber prices
and yield; - }
    { - (b) - }   { + (a) + } Rates of return { + , as
established by board rules, that + }   { - sufficient to - }
provide a reasonable   { - and prudent - }  payback to the Forest
Resource Trust of  { + project + } costs   { - including, but not
limited to, site preparation, planting, animal protection,
 
release, planning and layout of treatment units, supervising the
activities, and accounting and legal work - } ;
    { - (c) - }   { + (b) + } Offsets attributable to measurable
anticipated public benefits such as job creation, tax revenue,
increased timber supply and environmental improvement; and
    { - (d) - }   { + (c) + } The extent to which landowner
contributions of money, labor or other resources reduce the risk
to the Forest Resource Trust.
    { - (5) - }   { + (2) + } Participating landowners shall not
be required to comply with forest practices beyond those required
by state and federal law with the exception of planting standards
which may be more than the required minimum. Participating
landowners who voluntarily agree to   { - manage the established
stand beyond - }   { + exceed + } minimum standards  { + for
forest practices + } may be eligible for financial and other
incentives   { - if consistent with subsections (2) and (3) of
this section. Payments to any landowner for stand establishment
shall not exceed $100,000 in any two-year period - }  { + , as
established by board rules + }.
  SECTION 8. ORS 526.710 is amended to read:
  526.710. To assist the State Board of Forestry in carrying out
the duties of the Forest Resource Trust, the State Forestry
Department shall:
  (1) Identify potentially suitable lands { + , + } and
 { - market stand improvement services to - }   { + educate + }
the owners of those lands  { + on Forest Resource Trust
programs + }.
  (2) Provide technical and other management assistance to
participating landowners.
  (3) Monitor compliance with   { - the stand establishment
program - }  { +  Forest Resource Trust programs + } by
participating landowners.
  (4) Encourage involvement of the landowner.
  (5) Encourage the use of private contractors, consultants and
forestry extension programs.
  (6) Develop project plans in cooperation with landowners that
establish clear benchmarks for compliance with terms of the plan.
  SECTION 9. ORS 526.715 is amended to read:
  526.715. (1) The State Forester is authorized, on behalf of the
Forest Resource Trust, to enter into contracts with eligible
landowners to carry out the provisions of the   { - stand
establishment program - }   { + Forest Resource Trust
programs + }. The contracts shall include, but are not limited to
 { - , the following matters - } :
  (a)   { - Providing up - }   { + Partial + } to full financing
to the landowner
  { - for stand establishment - }   { + for the Forest Resource
Trust programs, as specified in rules of the State Board of
Forestry, + } from such moneys as may be available in the Forest
Resource Trust Fund.
  (b)   { - Setting forth the - }   { + Any + } obligations of
the landowner for repayment of moneys advanced for the
 { - establishment of the stand including, but not limited to,
the following provisions - }   { + Forest Resource Trust
programs, that shall include, but are not limited to + }:
  (A) Terms for sharing the revenue gained from the sales of
timber and forest products, including salvage, from the tree
stands established under the  { + voluntary loan + } program
 { + established by section 4 of this 2007 Act + };
  (B) Release from the financial obligation for any portion of
the   { - stand established - }   { + qualified nonfederal
forestlands included + } under the   { - program - }   { + Forest
Resource Trust programs + } and irretrievably lost to insects,
disease, fire, storm, flood or other natural destruction through
no fault of the landowner;
 
  (C)   { - Assurance - }   { + Acknowledgement + } that the
rights and obligations of the landowner and the Forest Resource
Trust and all of the terms of the contract are covenants that run
with the land upon sale, lease or transfer of the land benefiting
from the
  { - program - }   { + Forest Resource Trust programs + } prior
to   { - the repayment of moneys advanced - }   { + termination
of the contract + };
  (D) Financial terms allowing the landowner to terminate the
contract   { - prior to harvesting timber from the stand
established under the program - } ;
  (E) Agreement that there is no obligation to repay the moneys
advanced prior to sale of timber and forest products from the
land in the  { + voluntary loan + } program;
  (F) Terms to protect the contract from modification unless
agreed to by both parties;
  (G) Allowance for different prescriptions for stand
establishment { + ; + }   { - consistent with the established
rate of return; and - }
  (H) Provisions for access to the land by the State
Forester { + ; and
  (I) Repayment in full with interest if the landowner fails to
meet any terms of the contract + }.
   { +  (c) Acknowledgement by the landowner that the State
Forester may require a statutory lien on the forest products. + }
  (2) In addition to the contracts provided for in subsection (1)
of this section, the State Forester, on behalf of the Forest
Resource Trust, may require landowners to execute security
agreements in favor of the Forest Resource Trust to secure any
repayment or other obligations of the landowner under the
 { - stand management program - }   { + voluntary loan program
established by section 4 of this 2007 Act + }. Any such security
interest shall have priority from the date of recording or
filing.
  (3)(a) The State Forester shall record a contract described in
subsection (1) of this section or a memorandum of contract with
the recording officer of the county or counties in which the
forestland is located.
  (b) Upon recording, the rights and obligations of the landowner
and the Forest Resource Trust under the contract are covenants
that run with the land and are binding upon successors and
assigns.
  (c) The interest of the Forest Resource Trust created by
recording the contract or the memorandum of contract constitutes
a purchaser's interest in real property for purposes of ORS
93.640.
  (d)   { - If - }  A memorandum of contract   { - is to be
recorded, the memorandum of contract - }  must include { + , but
is not limited to + }   { - the following information - } :
  (A) The date of execution of the contract;
  (B) The name of each landowner of the forestland identified in
the contract;
  (C) A legal description that conforms with ORS 93.600 of the
forestland subject to the contract; and
  (D)   { - An acknowledgment that - }   { + If + } the contract
is secured by a lien as provided in ORS   { - 526.735 - }
 { + 526.700 + } to 526.775 { + , a statement from each landowner
acknowledging the lien + }.
  (4) For purposes of this section, 'eligible landowner ' means a
landowner who:
  (a) Owns land that qualifies as   { - underproducing
nonindustrial private - }  forestland as defined  { + by rule
adopted + } by the   { - State Forester - }   { + board + }.
  (b) Has not used ORS 527.760 to avoid reforestation.
  (c) Has not begun conversion of acreage prior to entering into
a contract with the State Forester.
  SECTION 10. ORS 526.730 is amended to read:
  526.730. The State Board of Forestry, after consultation with
the advisory committee appointed pursuant to ORS 526.700, shall
prepare and submit a biennial report to the Legislative Assembly
  { - with regard to program - }   { + on the + } accomplishments
 { + of the Forest Resource Trust programs + }, the future
structure of the Forest Resource Trust, alternatives to delivery
of trust services by the State Forestry Department and changes to
qualifications for landowner participation in the
 { - program - }  { +  Forest Resource Trust programs + }. The
board shall also enter into an agreement with an independent
party to evaluate   { - program - }   { + the + } goals,
administration, problems and outcomes  { + of the Forest Resource
Trust programs + }. The evaluation shall be made a part of any
biennial report to the Legislative Assembly and shall be used by
the board in consultation with the advisory committee in
modifying terms and policies of the Forest Resource Trust.
  SECTION 11. ORS 526.735 is amended to read:
  526.735. As used in ORS   { - 526.735 - }   { + 526.700 + } to
526.775, unless the context otherwise requires:
  (1) 'Contract' means the contract signed by the forestland
owner and the State Forester, acting on behalf of the Forest
Resource Trust pursuant to ORS 526.715.
  (2) 'Forestland owner' means the individual, corporation,
limited liability company, partnership, association, joint stock
company, trustee, business trust or unincorporated organization
holding fee simple ownership of land capable of producing forest
products.
  (3) 'Forest products' includes, but is not limited to, trees,
logs, poles, lumber, chips or pulp that flow from investment of
the Forest Resource Trust.
   { +  (4) 'Forest Resource Trust programs' means the voluntary
cost share program established by section 2 of this 2007 Act, the
voluntary environmental services program established by section 3
of this 2007 Act, the voluntary loan program established by
section 4 of this 2007 Act and other programs administered by the
State Board of Forestry to further the purposes of the Forest
Resource Trust pursuant to ORS 526.700 to 526.775.
  (5) 'Qualified nonfederal forestland owner' means a forestland
owner that qualifies for a specific Forest Resource Trust
program, as described in rules adopted by the board. + }
  SECTION 12. ORS 526.783 is amended to read:
  526.783. As a means of consistently reporting forestry carbon
offsets created through programs established under ORS 526.725,
526.780 to 526.789, 530.050 or 530.500, the State Forester shall
develop a forestry carbon offset accounting system for the
registration, transfer or sale of forestry carbon offsets. The
forestry carbon offset accounting system shall:
  (1) Use accepted principles and standards relating to   { - the
creation, measurement, accounting - }  { +  creating, measuring,
monitoring + }, marketing, verifying, registering, transferring
and selling   { - of - }  carbon offsets used as mitigation for
carbon dioxide emissions; and
  (2) Be consistent with any rules adopted by the State Board of
Forestry under ORS 526.786.
                         ----------