Rural Forest Markets Act of 2023
This bill directs the Department of Agriculture (USDA) to establish a Rural Forest Market Investment Program to guarantee environmental impact bonds, loans, or other investment vehicles to enable rural private forest landowners to participate in voluntary environmental credit markets (i.e., voluntary markets through which environmental credits may be bought or sold).
Projects eligible for the program are those developed by a private entity, state forestry agency, or publicly supported, charitable nonprofit organization engaged in the aggregation of sustainable forestry practices implemented by rural private forest landowners to facilitate the sale of credits in the voluntary environmental credit markets. These projects must use methodologies that (1) are approved by a credible, third-party entity; and (2) meet global benchmarks for high integrity.
The bill has specific requirements for projects that include the practice of tree planting (e.g., be on land that was historically forested).
In addition, the bill prohibits a bond, loan, or other investment vehicle guaranteed under the program from being used to create a floor price or artificial demand for the environmental credits generated.
Further, under the program, USDA must
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3399 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 3399
To authorize the Secretary of Agriculture to guarantee investments that
will open new markets for forest owners in rural areas of the United
States, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 5, 2023
Mr. Casey (for himself, Mr. Braun, and Ms. Stabenow) introduced the
following bill; which was read twice and referred to the Committee on
Agriculture, Nutrition, and Forestry
_______________________________________________________________________
A BILL
To authorize the Secretary of Agriculture to guarantee investments that
will open new markets for forest owners in rural areas of the United
States, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Rural Forest Markets Act of 2023''.
SEC. 2. RURAL FOREST MARKET INVESTMENT PROGRAM.
(a) Definitions.--In this section:
(1) Covered entity.--The term ``covered entity'' means an
eligible entity for which a bond, loan, or other investment
vehicle is guaranteed under the program.
(2) Eligible entity.--The term ``eligible entity'' means a
private entity, State forestry agency, or publicly supported,
charitable nonprofit organization described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt from
taxation under section 501(a) of that Code engaged in or
seeking to engage in the aggregation of sustainable forestry
practices implemented by rural private forest landowners to
facilitate the sale of environmental credits in voluntary
environmental credit markets.
(3) Program.--The term ``program'' means the Rural Forest
Market Investment Program established under subsection (b)(1).
(4) Rural.--The term ``rural'' has the meaning given the
term in section 343(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1991(a)).
(5) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.
(6) Voluntary environmental credit market.--The term
``voluntary environmental credit market'' means a voluntary
market through which environmental credits may be bought or
sold.
(b) Establishment of Program.--
(1) In general.--The Secretary shall establish a program,
to be known as the ``Rural Forest Market Investment Program'',
to guarantee environmental impact bonds, loans, or other
investment vehicles, as determined by the Secretary, issued for
the sole purpose of financing eligible projects described in
subsection (c), to enable rural private forest landowners and
covered entities to participate in voluntary environmental
credit markets.
(2) Administration.--
(A) Loan guarantees.--The Secretary shall make
available and administer guarantees on environmental
impact bonds, loans, or other investment vehicles, as
determined by the Secretary, through the facilities and
authorities of the Under Secretary for Rural
Development.
(B) Forestry related matters.--
(i) In general.--The Secretary shall carry
out through the facilities and authorities of
the Under Secretary for Natural Resources and
Environment the requirements and administration
under this section of matters relating to
forests, forestry, tree planting activities,
forest product markets, the timber supply,
appropriate activities to develop and carry out
an eligible project, and activities to
facilitate the participation of a rural private
forest landowner or a covered entity in
voluntary environmental credit markets, and as
otherwise provided in this section, as
determined appropriate by the Secretary.
(ii) Collaboration.--The Under Secretary
for Natural Resources and Environment shall
collaborate with the Under Secretary for Rural
Development, including by providing information
and technical assistance, to ensure that the
making and administration of guarantees under
this section is fully informed by the matters
described in clause (i) and as otherwise
provided in this section, as determined
appropriate by the Secretary.
(3) Consideration.--In establishing the program, the
Secretary shall consider ways to ensure that the program--
(A) minimizes disruptions to traditional forest
products markets, including by--
(i) collecting data on commercially
available timber that serves wood processing
facilities, including--
(I) the quantity and species of
timber supply available to wood
products facilities in each of the 4
regions described in the most recent
Renewable Resource Assessment prepared
under section 3 of the Forest and
Rangeland Renewable Resources Planning
Act of 1974 (16 U.S.C. 1601); and
(II) any additional information, as
identified by the Secretary; and
(ii) using data collected under clause (i)
to make a determination on whether financing
each eligible project described in subsection
(c) may impact commercially available timber
supply;
(B) allows for the continued production of
sustainable timber supplies by utilizing methodologies
that consider the carbon storage benefits of wood
products;
(C) allows for landowners who are not currently
involved in traditional forest products markets,
including those who have not historically accessed
Department of Agriculture assistance programs, to
participate in the program through activities such as
conservation easements, reforestation, and other
appropriate activities, as determined by the Secretary;
(D) facilitates participation opportunities for
forest landowners, and ensures program access for those
who have not historically accessed Department of
Agriculture assistance programs; and
(E) is carried out in a manner that increases
forestland values for participating landowners in ways
that enable landowners of small-acreage forests to
maintain--
(i) ownership of the land in the family of
the landowner; and
(ii) forest use of the land.
(c) Eligible Projects.--
(1) In general.--Subject to paragraph (2), an eligible
project referred to in subsection (b)(1) is a project developed
by an eligible entity using methodologies that, as determined
by the Secretary--
(A) are approved by a credible, third-party entity;
and
(B) meet global benchmarks for high-integrity.
(2) Uses of financing.--
(A) In general.--A covered entity shall use the
bond, loan, or other investment vehicle guaranteed for
the covered entity under the program for appropriate
activities to develop and carry out an eligible project
described in paragraph (1), as determined by the
Secretary.
(B) Additional activities for certain
organizations.--In the case of a bond, loan, or other
investment vehicle guaranteed under the program that
supports an eligible project described in paragraph
(1), the Secretary may allow a portion of the amount of
the bond, loan, or other investment vehicle to cover
additional activities to facilitate the participation
of the covered entity or a rural private forest
landowner in voluntary environmental credit markets.
(C) Prohibition.--A bond, loan, or other investment
vehicle guaranteed under the program shall not be used
to create a floor price or artificial demand for the
environmental credits generated under eligible projects
described in paragraph (1).
(d) Requirements.--A project described in subsection (c) that
includes the practice of tree planting may only be carried out, as
determined by the Secretary--
(1) on land that was historically forested, as determined
based on--
(A) data collected through the Forest Inventory and
Analysis Program of the Forest Service; and
(B) other appropriate scientific resources, as
determined by the Secretary;
(2) using tree species that are native to the region and at
ecologically appropriate densities; and
(3) in a manner that does not create other negative impacts
to biodiversity or the environment.
(e) Guarantee Amount.--With respect to bonds, loans, and other
investment vehicles guaranteed under the program, the Secretary shall
guarantee not more than $150,000,000 in the aggregate.
(f) Implementation.--
(1) Appraisals.--The Secretary may require an appraisal of
an eligible entity requesting a guarantee under the program,
including to assess the creditworthiness of the eligible
entity, by a specialized appraiser that uses standards that are
similar to standards used for similar purposes in the private
sector, as determined by the Secretary.
(2) Financial information.--The Secretary may require
financial information from an eligible entity requesting a
guarantee under the program in the same manner as is generally
required by commercial lenders.
(g) Auditing.--Not less frequently than annually, the Secretary
shall conduct audits of each eligible project financed under the
program to ensure that the methodology used with respect to the project
continues to comply with the standards determined by the Secretary
under subparagraphs (A) and (B) of subsection (c)(1).
(h) Regulations.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall issue regulations to
implement the program.
(i) Termination of Authority.--The authority to guarantee a new
bond, loan, or other investment vehicle under this section terminates
on September 30, 2028.
<all>
Introduced in Senate
Read twice and referred to the Committee on Agriculture, Nutrition, and Forestry.
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