Community Forestry Bonds
Drinking water, rural jobs, habitat, recreation; these are just some of the critical services that the country’s working forests provide for our communities. And now, there’s a proposal in Congress to add a powerful new tool to the working forest conservation toolbox. A unique coalition of conservation organizations, timber companies and business leaders has formed to advance legislation in Congress that would enable non-profit conservation organizations to use municipal bonds to purchase working forests for both long-term conservation and economically sustainable timber management.
The bill could conserve an estimated 2.2 million acres of working forests throughout the country and preserve an estimated 13,500 direct and indirect jobs using private capital markets.
The Community Forestry Conservation Act (H.R. 1982/S. 1105) was introduced by a bi-partisan group of legislators. Supporters now include Senate co-sponsors Patty Murray (D-WA), Maria Cantwell (D-WA), Jeff Merkley (D-OR) and Jeanne Shaheen (D-NH), and House of Representatives co-sponsors Mike Thompson (D-CA) and Dave Reichert (R-WA).
The list of organizations supporting the co-sponsors in advancing the legislation includes Land Trust Alliance, Bank of America, Weyerhaeuser Company, National Alliance of Forest Owners, Washington Forest Protection Association, US Forest Capital, The Nature Conservancy, Cascade Land Conservancy, and many others.
Fast action is needed.
While deforestation has been balanced by reforestation of agriculture lands in recent decades, the U.S. Forest Service estimates that 23 million acres of forestland will be lost by 2050. There are multiple reasons for this trend, including population growth, the lucrative residential and commercial real estate market, tax policy, global competition, loss of mill infrastructure, and changing inter-generational demographics.
Under the proposed legislation, Congress would authorize that qualified non-profit organizations could use funds derived from municipal revenue bond sales to purchase working forests and keep them working. This new tool will provide a mechanism for acquisition of lands that are at a high risk of conversion and parcelization, and for other lands that may be difficult for long-term commercial management. The bonds would be paid off with proceeds from environmentally sensitive timber harvests.
“Our communities have an urgent need for a financing mechanism that would provide stable, long-term capital to purchase working forests and prevent their conversion,” said Gene Duvernoy, President of the Seattle-based Cascade Land Conservancy. “Community Forestry Bonds conserve working forests and the jobs that go with them, protect the environment and respect landowners’ rights.”
“A massive forest ownership transition has taken place with nearly 84% of America’s industrial forests changing hands in the past 12 years,” said Tom Tuchmann, President of Portland, Oregon-based US Forest Capital. “In this economic environment there are real opportunities for large-scale conservation purchases. With funding for such purchases being the limiting factor, tools such as Community Forestry Bonds will be of benefit to all.”
“The municipal bond capital market has been funding public purposes for 100 years. With the right cash flows from working forests around the country, this market could be used to finance forest acquisitions, which would help keep America’s working forests in production,” remarked David Hospodar of Bank of America Merrill Lynch.
The conservation community has built a partnership with the financial and forest products industries to create a solution to the financial obstacle hindering long-term working forest conservation.
“This bill works by providing an economic incentive, or funding mechanism, to maintain working forests. It will protect rural community jobs by keeping renewable working forestry on the landscape. This works for landowners, it works for the environment, it works for local governments and it works for communities across the state of Washington and the country,” said Mark Doumit, Executive Director of the Washington Forest Protection Association (WFPA). WFPA represents private timber owners in Washington State.