Forest Conservation - Incentives - Pilot Program and Fund

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1560*

HOUSE BILL 1560
M1 6lr2346

By: Delegate Behler
Introduced and read first time: February 13, 2026
Assigned to: Environment and Transportation and Appropriations

A BILL ENTITLED

AN ACT concerning 1

Forest Conservation – Incentives – Pilot Program and Fund 2

FOR the purpose of requiring the Department of Natural Resources to establish and 3
implement a pilot program for ecosystem value –oriented forest management plans 4
to provide additional incentives for enrolling in and extending commitments to forest 5
conservation and management; establishing the Forest Ecosystem Value Incentives 6
Fund as a special, nonlapsing fund to finance the pilot program; requiring interest 7
earnings of the Fund to be credited to the Fund; and generally relating to incentives 8
for forest conservation and management. 9

BY renumbering 10
Article – Natural Resources 11
Section 5–101(d) through (n) 12
to be Section 5–101(e) through (o), respectively 13
Annotated Code of Maryland 14
(2023 Replacement Volume and 2025 Supplement) 15

BY repealing and reenacting, without amendments, 16
Article – Natural Resources 17
Section 5–101(a) 18
Annotated Code of Maryland 19
(2023 Replacement Volume and 2025 Supplement) 20

BY adding to 21
Article – Natural Resources 22
Section 5–101(d) and 5–102.2 23
Annotated Code of Maryland 24
(2023 Replacement Volume and 2025 Supplement) 25

BY repealing and reenacting, with amendments, 26
Article – Natural Resources 27
2 HOUSE BILL 1560

Section 5–102(b) 1
Annotated Code of Maryland 2
(2023 Replacement Volume and 2025 Supplement) 3

BY repealing and reenacting, without amendments, 4
Article – State Finance and Procurement 5
Section 6–226(a)(2)(i) and (ii) 6
Annotated Code of Maryland 7
(2021 Replacement Volume and 2025 Supplement) 8

BY repealing and reenacting, with amendments, 9
Article – State Finance and Procurement 10
Section 6–226(a)(2)(iii)212. and 213. 11
Annotated Code of Maryland 12
(2021 Replacement Volume and 2025 Supplement) 13

BY adding to 14
Article – State Finance and Procurement 15
Section 6–226(a)(2)(iii)214. 16
Annotated Code of Maryland 17
(2021 Replacement Volume and 2025 Supplement) 18

BY repealing and reenacting, with amendments, 19
Article – Natural Resources 20
Section 5–102(b) and 5–102.2 21
Annotated Code of Maryland 22
(2023 Replacement Volume and 2025 Supplement) 23
(As enacted by Section 2 of this Act) 24

BY repealing and reenacting, with amendments, 25
Article – State Finance and Procurement 26
Section 6–226(a)(2)(iii)212. and 213. 27
Annotated Code of Maryland 28
(2021 Replacement Volume and 2025 Supplement) 29
(As enacted by Section 2 of this Act) 30

BY repealing 31
Article – State Finance and Procurement 32
Section 6–226(a)(2)(iii)214. 33
Annotated Code of Maryland 34
(2021 Replacement Volume and 2025 Supplement) 35
(As enacted by Section 2 of this Act) 36

Preamble 37

WHEREAS, Maryland’s efforts to restore the health of the Chesapeake Bay while 38
mitigating the devastating impacts of climate change are measurably reliant on a healthy 39
HOUSE BILL 1560 3

managed forest ecosystem with the derivative ecological value of in creased carbon 1
sequestration, clean air, water quality, reduced stormwater runoff, the filtering of harmful 2
nutrients, biodiversity, wildlife habit at, renewable energy development, and climate 3
mitigation; and 4

WHEREAS, These public benefits are essential to the health of Maryland’s citizens 5
and Maryland’s quality of life; and 6

WHEREAS, The loss of healthy managed forest ecosystems results in a loss of these 7
public benefits, for which the replacement costs are borne by Maryland taxpayers at great 8
expense; and 9

WHEREAS, Notable policy achievements realized to date that address the 10
restoration and expansion of forest ecosystems and their public benefits include the 1998 11
Water Quality Improvement Act, the Chesapeake 2000 Agreement, the 2007 Forest 12
Conservation Initiative, the 2010 Chesapeake and Atlantic Coastal Bay s Trust Fund, the 13
2015 establishment of the Maryland Climate Change Commission, the Forest Conservation 14
Act of 1991, the Renewable Energy Portfolio Standard Act of 2004, the Forest Preservation 15
Act of 2013, Tree Solutions Now Act of 2021, the Conservation Finance Act of 2022, the 16
Climate Solutions Now Act of 2022, and the Maryland the Beautiful Act of 2023; and 17

WHEREAS, To achieve Maryland’s 2045 net–zero emissions goal, among other goals, 18
will require a reassessment of how the State’s 2.4 million acres of forest lands , which are 19
net greenhouse gas emission sinks , are managed as evidenced by the Department of the 20
Environment’s 2023 Maryland’s Climate Pollution Reduction Plan , which states that 21
“[f]urther [Greenhouse Gas] emissions reductions in this sector can be achieved through 22
the expansion of forestry programs involving forest conservation, improved forest 23
management, and reforestation facilitated by [the Department of Natural Resources] and 24
other agency partners . . . Ongoing and increased investment in natural climate solutions 25
today will help the State maximize its carbon sink by 2045.”; and 26

WHEREAS, A key impediment to further achieving the ecological benefits of 27
sustainably managed forests is convincing Maryland’s nonindustrial, private forest 28
landowners, who own an estimated 75% of the State’s 2.4 million acres of forest lands, to 29
enter into focused forest conservation and management agreements under § 8–211 of the 30
Tax – Property Article or enhanced forest management plan s prepared by a licensed 31
forester and approved by the local authority and consistent with the best management 32
practices recommended for enhanced ecological value outcomes; and 33

WHEREAS, Participation in Maryland’s principal land conservation programs – 34
Program Open Space, the Maryland Agricultural Land Preservation Foundation, the Rural 35
Legacy Program, and the Maryland Environmental Trust – not only requires adoption of a 36
forest management plan, if applicable, but an agreement to conserve those forest lands in 37
perpetuity, which often serves as a deterrent to adoption of a forest management plan by a 38
forest landowner; and 39

4 HOUSE BILL 1560

WHEREAS, Compensation incentives for private landowners to retain, manage, and 1
restore forest ecosystems do not fully recognize the value of the public benefits that these 2
forest lands provide for free and for which Maryland taxpayers would otherwise have to 3
pay; and 4

WHEREAS, Envisioned by this Act is the (1) establishment of a scien ce–based 5
methodology to quantify forest ecosystem value as a foundation for compensating private 6
landowners and assessing impacts resulting from forest loss, expansion, and retention; (2) 7
creation of the “Forest Ecosystem Value Investment Fund” to compensate landowners, 8
receive revenues from various sources , including voluntary contributions, grants, State 9
appropriations, ecosystem value impact fees , and other sources, and provide program 10
management support; and (3) enhancement of existing programs and development of new 11
programs to adequately compensate forest landowners for the ecological value their forest 12
land provides, including a pilot project to significantly increase the number of forest 13
landowners in targeted ecological areas agreeing to adopt an ecosystem value–oriented 14
forest management plan; now, therefore, 15

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 16
That Section(s) 5–101(d) through (n) of Article – Natural Resources of the Annotated Code 17
of Maryland be renumbered to be Section(s) 5–101(e) through (o), respectively. 18

SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 19
as follows: 20

Article – Natural Resources 21

5–101. 22

(a) In this title the following words have the meanings indicated. 23

(D) “ECOLOGICAL VALUE” MEANS THE QUANTITATIVE VALUE OF BENEFITS 24
THAT ECOSYSTEMS PROV IDE TO THE ENVIRONME NT, INCLUDING CLEAN AIR AND 25
WATER, POLLINATION, CARBON SEQUESTRATION , BIODIVERSITY, WILDLIFE 26
HABITAT, STORMWATER AND FLOOD MANAGEMENT, CLIMATE MITIGATION, AND 27
OTHER BENEFITS. 28

5–102. 29

(b) It is the policy of the State to encourage the retention and sustainable 30
management of forest lands by: 31

(1) Achieving no net loss of forest; 32

(2) Affording due consideration to the protection and retention of forests in 33
the State through existing land conservation programs where they have the highest value 34
in terms of promoting the State’s compliance with its clean water goals under the 2014 35
Chesapeake Bay Watershed Agreement and the 2007 Forestry Conservation Initiative; 36
HOUSE BILL 1560 5

(3) Enhancing the retention of privately owned forest lands through 1
research–based educational outreach ef forts to landowners by the State’s forest 2
conservancy district boards; 3

(4) Developing financial incentives to encourage landowners to retain and 4
manage their forests sustainably and in a manner that is consistent with a forest 5
stewardship plan, including by allowing landowners to use forests on State lands that are 6
reforested or afforested under Subtitle 16 of this title after July 1, 2022, to satisfy buffer or 7
insurance provisions required by registries or protocols associated with private forest 8
carbon credit transactions; 9

(5) ESTABLISHING A SCIEN CE–BASED METHODOLOGY TO QUANTIFY 10
THE ECOLOGICAL VALUE OF FOREST ECOSYSTEM BENEFITS AS A FOUNDATION FOR 11
COMPENSATING PRIVATE FOREST LANDOWNERS FOR FOREST EXPANSION , 12
RETENTION, AND PRESERVATION AND ASSESSING IMPACTS RESULTING FR OM 13
FOREST LOSS; 14

(6) ESTABLISHING AND MANA GING A FOREST ECOSYSTEM VALUE 15
INCENTIVES FUND TO PROVIDE ADDIT IONAL FINANCIAL INCE NTIVES FOR 16
LONG–TERM EXPANSION, RETENTION, AND PRESERVATION OF FOREST LAND AND 17
THE ADOPTION OF ECOSYSTEM VALUE–ORIENTED FOREST MANA GEMENT PLANS 18
THROUGH EXISTING AND NEW PROGRAMS FOR PRIVATE FOREST LANDOWNERS; 19

(7) ENHANCING EXISTING PR OGRAMS AND DEVELOPIN G NEW 20
PROGRAMS TO COMPENSATE FOREST LANDOWNERS FOR PRESERVING, ENHANCING, 21
AND RESTORING THE HI GH–VALUE ECOSYSTEM BENEFITS THAT FOREST LAND 22
PROVIDES, INCLUDING A PILOT PROJECT TO SIG NIFICANTLY INCREASE THE 23
NUMBER OF FOREST LANDOWNERS IN STATE–DESIGNATED TARGETED ECOLOGICAL 24
AREAS AGREEING TO ADO PT A NEW ECOSYSTEM VALUE–ORIENTED FOREST 25
MANAGEMENT PLAN; 26

[(5)] (8) Promoting renewable energy policies and markets with increased 27
emphasis on the use of in–State produced woody biomass; 28

[(6)] (9) Ensuring dual certification of the State’s forests by the Forest 29
Stewardship Council and the Sustainable Forestry Initiative; 30

[(7)] (10) Recognizing the importance of: 31

(i) A viable forest products industry to the economies of rural 32
Maryland; 33

(ii) Continued development of fiber products; and 34

6 HOUSE BILL 1560

(iii) Maryland’s green infrastructure; and 1

[(8)] (11) Developing and enhancing programs with a sustainable forestry 2
component, including a forest mitigation banking system, a carbon credit or carbon 3
sequestration program, a clean water credit trading system, an environmental services 4
credit trading program, and a renewable energy credit trading system. 5

5–102.2. 6

(A) ON OR BEFORE DECEMBER 1, 2026, THE DEPARTMENT SHALL: 7

(1) COMPLETE AND PUBLISH A FORMAL APPROACH FO R 8
DETERMINING THE ECOLOGICAL VALUE OF FOREST LAND; AND 9

(2) DEMONSTRATE HOW THE APPROACH WILL BE APPLIED TO 10
CREATING LANDOWNER COMPENSATI ON INCENTIVES , GENERATING ECOSYSTEM 11
VALUE IMPACT FEES , AND CREATING OTHER NEW PROGRAM S FOR FOREST 12
EXPANSION AND RETENTION. 13

(B) (1) (I) THE DEPARTMENT, IN COORDINATION WITH OTHER 14
RELEVANT STATE AGENCIES, SHALL IMMEDIATELY PURSUE LAWS AND POLICIES TO 15
GENERATE FOREST ECOSYSTEM VALUE IMPACT FEE REVENUES FOR ACTI VITIES 16
RESULTING IN THE LOSS OF THE ECOLOGICAL VALUE OF FOREST LAND. 17

(II) THE DEPARTMENT SHALL CONSIDER PURSUING 18
ASSESSMENTS FOR THE TOTAL LOSS OF FOREST ECOSYSTEM VALUE AGAINST: 19

1. NEW DATA CENTERS AND UTILITY LINE 20
CONSTRUCTION THAT SERVES NEW DATA CENTERS; AND 21

2. OTHER PROJECTS THAT CAUSE A SIGNIFICANT LOSS 22
OF THE ECOLOGICAL VALUE OF FOREST LAND. 23

(2) FOREST ECOSYSTEM VALUE IMPA CT FEE REVENUES ASSE SSED 24
AND COLLECTED UNDER THIS SUBSECTION SHAL L BE REMITTED TO THE FOREST 25
ECOSYSTEM VALUE INCENTIVES FUND ESTABLISHED UNDER SUBSECTION (I) OF 26
THIS SECTION. 27

(C) (1) ON OR BEFORE OCTOBER 1, 2027, THE DEPARTMENT SHALL 28
ESTABLISH AND IMPLEMENT A PILOT PROGRAM FOR ECOSYSTEM VALUE–ORIENTED 29
FOREST MANAGEMENT PLANS TO PROVIDE ADDITIONA L INCENTIVES FOR 30
ENROLLING AND EXTEND ING COMMITMENTS TO FOREST CONSERVATION AND 31
MANAGEMENT THROUGH FOREST CONSERVATION AND MANAGEMENT 32
AGREEMENTS. 33
HOUSE BILL 1560 7

(2) THE DEPARTMENT SHALL: 1

(I) DEVELOP THE FRAMEWORK FOR THE PILOT PROGRAM; 2

(II) DESIGNATE TARGETED EC OLOGICAL AREAS THAT ARE 3
PRIORITY AREAS FOR A PPLYING ECOSYSTEM VALUE–ORIENTED FOREST 4
MANAGEMENT PLANS; 5

(III) MAKE REGULATORY OR PURSUE LEGISLATIVE 6
ADJUSTMENTS AS NECESSARY; AND 7

(IV) TRANSFER PROGRAM ADMINISTRATION TO THE MARYLAND 8
FOREST FOUNDATION ON OR BEFORE OCTOBER 1, 2030, IF THE PILOT PROGRAM 9
RESULTS IN AN INCREASE IN ENROLLMENT IN FOREST CONSERVATION AND 10
MANAGEMENT AGREEMENTS. 11

(3) A FOREST CONSERVATION AND MANAGEMENT AGREE MENT 12
UNDER AN ECOSYSTEM V ALUE–ORIENTED FOREST MANAGEMENT PL AN SHALL BE 13
FOR AT LEAST 20 YEARS. 14

(4) ELIGIBILITY CRITERIA FOR ENROLLMENT IN AN ECOSYSTEM 15
VALUE–ORIENTED FOREST MANAGEMENT PLAN SHALL INCLUDE THE FOLLOWING: 16

(I) THE PROPERTY SHOULD L ARGELY BE LOCATED IN 17
DEPARTMENT–DESIGNATED TARGETED ECOLOGICAL AREAS TO ENSURE THAT 18
FUNDING IS FOCUSED ON THE MOST ECOLOGICALLY VALUABLE FOREST LANDS; 19

(II) THE LANDOWNER SHALL AGREE TO ENROLL IN A LEGALLY 20
BINDING FOREST CONSERVATION AND MANAGEMENT AGREEMENT; AND 21

(III) THE PROGRAM SHALL BE LIMITED TO FOREST LAND TO 22
WHICH: 23

1. A FOREST CONSERVATION MANAGEMENT 24
AGREEMENT DOES NOT APPLY OR IS SIGNIFICANTLY EXPANDED IN SCOPE; OR 25

2. A STANDARD FOREST STEWARDSHIP PLAN APPLIES 26
AND FOR WHICH THE OWNER AGREES TO ADOPT AN ECOSYSTEM VALUE–ORIENTED 27
FOREST MANAGEMENT PLAN. 28

8 HOUSE BILL 1560

(5) (I) THE DEPARTMENT SHALL ESTA BLISH CRITERIA FOR A N 1
ECOSYSTEM VALUE–ORIENTED FOREST MANAGEMENT PLAN BY USING A STANDARD 2
FOREST STEWARDSHIP PLAN AS A BASELINE. 3

(II) IN ADDITION TO THE CRITERIA UNDER A STANDARD FOREST 4
STEWARDSHIP PLAN , AN ECOSYSTEM VALUE –ORIENTED FOREST MANA GEMENT 5
PLAN SHALL: 6

1. PROVIDE A 20–YEAR ACTION –ORIENTED PLAN FOR 7
CONSERVING, ENHANCING, AND RESTORING ON –SITE ECOLOGICAL ATTR IBUTES 8
AND HIGH–VALUE ECOSYSTEM BENEFITS; 9

2. REDUCE THE IMPACTS OF ECOLO GICAL STRESSORS, 10
INCLUDING ANY INVASIVE SPECIES; 11

3. INCORPORATE A 20–YEAR CLIMATE CHANGE 12
FORECAST; AND 13

4. INCLUDE A COMPLETE CH ARACTERIZATION OF 14
THESE AND OTHER RELEVANT FEATURES OF THE FOREST LAND AND PROVIDE A 15
COMPREHENSIVE FOREST STAND INVENTORY. 16

(6) ECOSYSTEM VALUE–ORIENTED FOREST MANAGEMENT PLANS 17
SHALL: 18

(I) FOLLOW THE GUIDANCE P OLICIES DEVELOPED BY THE 19
DEPARTMENT; AND 20

(II) REQUIRE THAT LANDOWNE RS ADHERE TO THE FOR EST 21
PRACTICE REGULATIONS ADOPTED BY THE DEPARTMENT AND IN EFF ECT AT THE 22
TIME OF THE PLAN’S APPROVAL. 23

(7) A COUNTY OR MUNICIPALITY MAY NOT ENACT OR ADOPT 24
ORDINANCES OR REGULA TIONS GOVERNING AREAS COVE RED BY AN ECOSYSTEM 25
VALUE–ORIENTED FOREST MANAGEMENT PLAN THAT ARE INCONSISTENT WITH, OR 26
LESS STRINGENT THAN, THE FOREST MANAGEMENT REGULATIONS ADOPTED BY THE 27
DEPARTMENT FOR FOREST LAND MANAGED UNDER A N APPROVED ECOSYSTEM 28
VALUE–ORIENTED FOREST MANAGEMENT PLAN. 29

(D) (1) (I) PAYMENTS UNDER AN ECOSYSTEM VALUE –ORIENTED 30
FOREST MANAGEMENT PL AN ARE SOLELY INTENDED TO COMPENSATE THE 31
LANDOWNER FOR ADOPTI NG OR EXTENDING A FOREST CONSERVATIO N AND 32
MANAGEMENT AGREEMENT. 33
HOUSE BILL 1560 9

(II) OPPORTUNITIES TO GE NERATE ECOSYSTEM VALUE 1
CREDITS, INCLUDING THROUGH CONSERVATION MANAGEMENT ACTIONS O R 2
RESTORATION, AND TO PARTICIPATE IN ECOSYSTEM VALUE MARKETS, MAY NOT BE 3
LIMITED BY THE IMPLEMENTATION O F AN ECOSYSTEM VALUE–ORIENTED FOREST 4
MANAGEMENT PLAN. 5

(2) (I) THE DEPARTMENT SHALL DETE RMINE THE PAYMENT 6
MECHANISM FOR ECOSYSTEM VALUE–ORIENTED FOREST MANAGEMENT PLANS ON 7
OR BEFORE OCTOBER 1, 2027. 8

(II) IN DETERMINING THE PA YMENT MECHANISM , THE 9
DEPARTMENT SHALL CONSIDER FACTORS INCLUDING: 10

1. WHETHER PAYMENTS ARE TO BE ON A PERIODICA L 11
OR A LUMP SUM BASIS; 12

2. THE THRESHOLD AMOUNTS NECESSARY TO 13
INCENTIVIZE LANDOWNER ADOPTION OF AN ECOSYSTEM VALUE–ORIENTED FOREST 14
MANAGEMENT PLAN; AND 15

3. HOW TO BALANCE PAYMEN TS AGAINST FOREST 16
ECOSYSTEM VALUE INCENTIVES FUND ASSETS. 17

(E) THE DEPARTMENT, IN COO RDINATION WITH THE MARYLAND 18
FORESTRY FOUNDATION AND THE FOREST DISTRICT CONS ERVANCY BOARDS , 19
SHALL ESTABLISH EDUCATIONAL OUTREACH TO FOREST LANDOWNERS ELIGIBLE 20
FOR ECOSYSTEM VALUE–ORIENTED FOREST MANAGEMENT PLANS TO ENSURE 21
LANDOWNERS ARE AWARE OF THE AVAILABILITY OF THE PLANS. 22

(F) AFTER THE TRANSFER OF THE PILOT PROGRAM TO THE MARYLAND 23
FORESTRY FOUNDATION, THE MARYLAND FORESTRY FOUNDATION SHALL REPORT 24
TO THE DEPARTMENT EVERY 2 YEARS ON: 25

(1) THE ACHIEVEMENTS UNDER THE PILOT PROGRAM; 26

(2) NEW MECHANISMS TO INCREASE THE NUMB ER OF FOREST 27
LANDOWNERS WHO HAVE ADOPTED ECOSYSTEM VALUE–ORIENTED FOREST 28
MANAGEMENT PLANS; AND 29

(3) AN ESTIMATE OF INCREA SED AND PR OJECTED CARBON 30
SEQUESTRATION AND ANY OTHER ECOLOGICAL VALUE BENEFITS. 31

10 HOUSE BILL 1560

(G) THE DEPARTMENT SHALL EVALUATE ENHANCEMENTS TO PROGRAMS 1
THAT IMPLEMENT ECOSYSTEM VALUE–ORIENTED FOREST MANAGEMENT PLANS BY 2
PURSUING ADDITIONAL ECOSYSTEM VALUE INCENTIVE PAYMENTS, INCLUDING: 3

(1) ADDITIONAL STATE PROPERTY TAX BE NEFITS NOT TO EXCEED 4
10% OF THE LANDOWNER ’S LOCAL PROPERTY TAX BENEFIT PER ACRE PER YEAR 5
FOR THE LENGTH OF TH E ADOPTED ECOSYSTEM VALUE –ORIENTED FOREST 6
MANAGEMENT PLAN; 7

(2) CLIMATE RESILIENCE EASEMENTS TO ENSURE THAT ECOSYSTEM 8
VALUE–ORIENTED FOREST MANAGEMENT PLANS ACCOUNT FOR CLIMATE CHANGE; 9
AND 10

(3) PAYMENTS UNDER STATE–FUNDED RESTORATION A ND 11
CONSERVATION PROGRAM S THAT PROVIDE BONUS PAYMEN TS TO FOREST 12
LANDOWNERS ACCEPTING FOREST RESTORATION AND CONSERVATION EASEMENTS 13
TO ACCOUNT FOR ECOSYSTEM VALUE GENERATED, ENHANCED, OR RETAINED. 14

(H) THE DEPARTMENT SHALL ENSURE THAT ALL USES OF THE FOREST 15
ECOSYSTEM VALUE INCENTIVES FUND AS PAYMENTS FOR ECOSYSTEM VALUE 16
PRODUCE LONG –TERM ECOLOGICAL BENE FITS AND DO NOT GENE RATE 17
UNINTENDED NEGATIVE CONSEQUENCES TO OVERALL FOREST HEALTH. 18

(I) (1) IN THIS SUBSECTION , “FUND” MEANS THE FOREST ECOSYSTEM 19
VALUE INCENTIVES FUND. 20

(2) THERE IS A FOREST ECOSYSTEM VALUE INCENTIVES FUND. 21

(3) THE PURPOSE OF THE FUND IS TO PROVIDE AD DITIONAL 22
FINANCIAL INCENTIVES FOR LONG –TERM RETENTION , EXPANSION, AND 23
PRESERVATION OF FORE ST LAND AND FOR THE ADOPTION OF ECOLOGICAL 24
VALUE–ORIENTED FOREST MANA GEMENT PLANS THROUGH EXISTING AND NEW 25
PROGRAMS FOR PRIVATE FOREST LANDOWNERS. 26

(4) THE DEPARTMENT SHALL ADMINISTER THE FUND. 27

(5) (I) THE FUND IS A SPECIAL , NONLAPSING FUND THAT IS NOT 28
SUBJECT TO § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 29

(II) THE STATE TREASURER SHA LL HOLD THE FUND 30
SEPARATELY, AND THE COMPTROLLER SHALL ACCOUNT FOR THE FUND. 31

(6) THE FUND CONSISTS OF: 32
HOUSE BILL 1560 11

(I) MONEY APPROPRIATED IN THE STATE BUDGET TO THE 1
FUND; 2

(II) ECOSYSTEM VALUE IMPAC T FEES GENERATED UND ER 3
SUBSECTION (B) OF THIS SECTION; 4

(III) ANY LEGAL SETTLEMENTS DIRECTED TO THE FUND; 5

(IV) VOLUNTARY CONTRIBUTIONS TO THE FUND; 6

(V) GRANTS TO THE FUND; 7

(VI) INTEREST EARNINGS; AND 8

(VII) ANY OTHER MONEY FROM ANY OTHER SOURCE ACC EPTED 9
FOR THE BENEFIT OF THE FUND. 10

(7) THE FUND MAY BE USED ONLY FOR: 11

(I) USING $2,000,000 OF THE APPROPRIATION REQUIRED 12
UNDER PARAGRAPH (11) OF THIS SUBSECTION: 13

1. TO DEVELOP A PLAN FOR INVESTMENT MANAGEMENT 14
THAT WILL GENERATE A NNUAL REVENUE THROUG H BOTH TRADITIONAL M ARKET 15
INVESTMENTS AND EMERGING CONSERVATION FINANCING OPPORTUNITIES; 16

2. TO DEVELOP A BLUEPRIN T FOR ECOSYSTEM 17
VALUE–ORIENTED FORESTRY MANAGEMENT PLANS; AND 18

3. TO DEVELOP AND REVIEW ADDITIONAL 19
OPPORTUNITIES TO COMPENSATE FOREST LANDOWNERS FOR FOREST ECOLOGICAL 20
VALUE BENEFITS; AND 21

(II) TO FINANCE IMPLEMENTA TION OF ECOSYSTEM 22
VALUE–ORIENTED FORESTRY MA NAGEMENT PLANS AND A DDITIONAL 23
OPPORTUNITIES TO COMPENSATE FOREST LANDOWNERS FOR FOREST ECOLOGICAL 24
VALUE BENEFITS. 25

(8) (I) THE STATE TREASURER SHALL INVEST THE MONEY OF THE 26
FUND JOINTLY WITH AN INVESTMENT FUND MANA GEMENT ENTITY WITH 27
EXPERIENCE WITH CONSERVATION FINANCING. 28

12 HOUSE BILL 1560

(II) ANY INTEREST EARNINGS OF THE FUND SHALL BE 1
CREDITED TO THE FUND. 2

(9) EXPENDITURES FROM THE FUND MAY BE MADE ONLY IN 3
ACCORDANCE WITH THE STATE BUDGET. 4

(10) MONEY EXPENDED FROM T HE FUND FOR ECOSYSTEM 5
VALUE–ORIENTED FORESTRY MA NAGEMENT PLANS AND A DDITIONAL 6
OPPORTUNITIES TO COMPENSATE FOREST LANDOWNERS FOR FOREST ECOLOGICAL 7
VALUE BENEFITS IS SUPPLEMENTAL TO AND IS NOT INTENDED TO TAKE THE PLACE 8
OF FUNDING THAT OTHE RWISE WOULD BE APPRO PRIATED FOR FOREST 9
CONSERVATION MANAGEMENT AGREEMENTS AND O THER FOREST CONSERVA TION 10
FINANCING PROGRAMS. 11

(11) FOR FISCAL YEAR 2028, THE GOVERNOR SHALL INCLUDE IN THE 12
ANNUAL BUDGET BILL AN APPROPRIATION OF $10,000,000 TO THE FUND. 13

Article – State Finance and Procurement 14

6–226. 15

(a) (2) (i) This paragraph does not apply in fiscal years 2024 through 2028. 16

(ii) Notwithstanding any other provision of law, and unless 17
inconsistent with a federal law, grant agreement, or other federal requirement or with the 18
terms of a gift or settlement agreement, net interest on all State money allocated by the 19
State Treasurer under this section to special funds or accounts, and otherwise entitled to 20
receive interest earnings, as accounted for by the Comptroller, shall accrue to the General 21
Fund of the State. 22

(iii) The provisions of subparagraph (ii) of this paragraph do not 23
apply to the following funds: 24

212. the Department of Social and Economic Mobility Special 25
Fund; [and] 26

213. the Population Health Improvement Fund; AND 27

214. THE FOREST ECOSYSTEM VALUE INCENTIVES FUND. 28

SECTION 3. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 29
as follows: 30

Article – Natural Resources 31

HOUSE BILL 1560 13

5–102. 1

(b) It is the policy of the State to encourage the retention and sustainable 2
management of forest lands by: 3

(1) Achieving no net loss of forest; 4

(2) Affording due consideration to the protection and retention of forests in 5
the State through existing land conservation programs where they have the highest value 6
in terms of promoting the State’s compliance with its clean water goals under the 2014 7
Chesapeake Bay Watershed Agreement and the 2007 Forestry Conservation Initiative; 8

(3) Enhancing the retention of privat ely owned forest lands through 9
research–based educational outreach efforts to landowners by the State’s forest 10
conservancy district boards; 11

(4) Developing financial incentives to encourage landowners to retain and 12
manage their forests sustainably and in a manner that is consistent with a forest 13
stewardship plan, including by allowing landowners to use forests on State lands that are 14
reforested or afforested under Subtitle 16 of this title after July 1, 2022, to satisfy buffer or 15
insurance provisions requ ired by registries or protocols associated with private forest 16
carbon credit transactions; 17

(5) Establishing a science –based methodology to quantify the ecological 18
value of forest ecosystem benefits as a foundation for compensating private forest 19
landowners for forest expansion, retention, and preservation and assessing impacts 20
resulting from forest loss; 21

(6) [Establishing and managing a Forest Ecosystem Value Incentives Fund 22
to provide additional financial incentives for long –term expansion, retention , and 23
preservation of forest land and the adoption of ecosystem value –oriented forest 24
management plans through existing and new programs for private forest landowners; 25

(7)] Enhancing existing programs and developing new programs to 26
compensate forest l andowners for preserving, enhancing, and restoring the high –value 27
ecosystem benefits that forest land provides, including a pilot project to significantly 28
increase the number of forest landowners in State –designated targeted ecological areas 29
agreeing to adopt a new ecosystem value–oriented forest management plan; 30

[(8)] (7) Promoting renewable energy policies and markets with increased 31
emphasis on the use of in–State produced woody biomass; 32

[(9)] (8) Ensuring dual certification of the State’s forests by the Forest 33
Stewardship Council and the Sustainable Forestry Initiative; 34

[(10)] (9) Recognizing the importance of: 35

14 HOUSE BILL 1560

(i) A viable forest products industry to the economies of rural 1
Maryland; 2

(ii) Continued development of fiber products; and 3

(iii) Maryland’s green infrastructure; and 4

[(11)] (10) Developing and enhancing programs with a sustainable forestry 5
component, including a forest mitigation banking system, a carbon credit or carbon 6
sequestration program, a clean water credit trading s ystem, an environmental services 7
credit trading program, and a renewable energy credit trading system. 8

5–102.2. 9

(a) On or before December 1, 2026, the Department shall: 10

(1) Complete and publish a formal approach for determining the ecological 11
value of forest land; and 12

(2) Demonstrate how the approach will be applied to creating landowner 13
compensation incentives, generating ecosystem value impact fees, and creating other new 14
programs for forest expansion and retention. 15

(b) (1) (i) The Department, in coordination with other relevant State 16
agencies, shall immediately pursue laws and policies to generate forest ecosystem value 17
impact fee revenues for activities resulting in the loss of the ecological value of forest land. 18

(ii) The Department shall consider pursuing assessments for the 19
total loss of forest ecosystem value against: 20

1. New data centers and utility line construction that serves 21
new data centers; and 22

2. Other projects that cause a significant loss of the ecological 23
value of forest land. 24

(2) Forest ecosystem value impact fee revenues assessed and collected 25
under this subsection shall be remitted to the [Forest Ecosystem Value Incentives Fund 26
established under subsection (i) of this section] DEPARTMENT TO PROVIDE ADDITIONAL 27
FINANCIAL INCENTIVES FOR LONG –TERM EXPANSION , RETENTION, AND 28
PRESERVATION OF FORE ST LAND AND THE ADOP TION OF ECOSYSTEM 29
VALUE–ORIENTED FOREST MANA GEMENT PLANS THROUGH EXISTING AND NEW 30
PROGRAMS FOR PRIVATE FOREST LANDOWNERS. 31

(c) (1) On or before October 1, 2027, the Department shall establish and 32
implement a pilot program for ecosystem value –oriented forest management plans to 33
HOUSE BILL 1560 15

provide additional incentives for enrolling and extending commitments to forest 1
conservation and management through forest conservation and management agreements. 2

(2) The Department shall: 3

(i) Develop the framework for the pilot program; 4

(ii) Designate targeted ecological areas that are priority areas for 5
applying ecosystem value–oriented forest management plans; 6

(iii) Make regulatory or pursue legislative adjustments as necessary; 7

(iv) Transfer program administration to the Maryland Forest 8
Foundation on or before October 1, 2030 if the pilot program results in an increase in 9
enrollment in forest conservation and management agreements. 10

(3) A forest conservation and management agreement under an ecosystem 11
value–oriented forest management plan shall be for at least 20 years. 12

(4) Eligibility criteria for enrollment in an ecosystem value–oriented forest 13
management plan shall include as follows: 14

(i) The property should largely be located in 15
Department–designated targeted ecological areas to ensure that funding is focused on the 16
most ecologically valuable forest lands; 17

(ii) The landowner shall agree to enroll in a legally binding forest 18
conservation and management agreement; and 19

(iii) The program shall be limited to forest land to which: 20

1. A forest conservation management agreement does not 21
apply or is significantly expanded in scope; or 22

2. A standard forest stewardship plan applies and for which 23
the owner agrees to adopt an ecosystem value–oriented forest management plan. 24

(5) (i) The Department shall establish criteria for an ecosystem 25
value–oriented forest management plan by using a standard forest stewardship plan as a 26
baseline. 27

(ii) In addition to the criteria under a standard forest stewardship 28
plan, an ecosystem value–oriented forest management plan shall: 29

1. Provide a 20 –year action –oriented plan for conserving, 30
enhancing, and restoring on–site ecological attributes and high–value ecosystem benefits; 31

16 HOUSE BILL 1560

2. Reduce the impacts of ecological stressors, including any 1
invasive species; 2

3. Incorporate a 20–year climate change forecast; and 3

4. Include a complete characterization of these and other 4
relevant features of the forest land and provide a comprehensive forest stand inventory. 5

(6) Ecosystem value–oriented forest management plans shall: 6

(i) Follow the guidance policies developed by the Department; and 7

(ii) Require that landowners adhere to the forest practice 8
regulations adopted by the Department and in effect at the time of the plan’s approval. 9

(7) A county or municipality may not enact or adopt ordinances or 10
regulations governing areas covered by an ecosystem value –oriented forest management 11
plan that are inconsistent with, or less stringent than, the forest management regulations 12
adopted by the Department for forest land managed under an approved ecosystem 13
value–oriented forest management plan. 14

(d) (1) (i) Payments under an ecosystem value –oriented forest 15
management plan are solely intended to compensate the landowner for adopting or 16
extending a forest conservation and management agreement. 17

(ii) Opportunities to generate ecosystem value credits, including 18
through conservation management actions or restoration, and to participate in ecosystem 19
value markets, may not be limited by the implementation of an ecosystem value –oriented 20
forest management plan. 21

(2) (i) The Department shall determine the payment mechanism for 22
ecosystem value–oriented forest management plans on or before October 1, 2027. 23

(ii) In determining the payment mechanism, the Department shall 24
consider factors including: 25

1. Whether payments are to be on a periodical or a lump sum 26
basis; 27

2. The threshold amounts necessary to incentivize 28
landowner adoption of an ecosystem value–oriented forest management plan; and 29

3. How to balance payments against [Forest Ecosystem 30
Value Incentives Fund ] assets AVAILABLE FOR THE EC OSYSTEM VALUE –ORIENTED 31
FOREST MANAGEMENT PLANS. 32

HOUSE BILL 1560 17

(e) The Department, in coordination with the Maryland Forestry Foundation and 1
the forest district conservancy boards, shall establish educational outreach to forest 2
landowners eligible for ecosystem value –oriented forest management plans to ensure 3
landowners are aware of the availability of the plans. 4

(f) After the transfer of the pilot program to the Maryland Forestry Foundation, 5
the Maryland Forestry Foundation shall report to the Department every 2 years on: 6

(1) The achievements under the pilot program; 7

(2) New mechanisms to increase the number of forest landowners who have 8
adopted ecosystem value–oriented forest management plans; and 9

(3) An estimate of increased and projected carbon sequestration and any 10
other ecological value benefits. 11

(g) The Department shall evaluate enhancements to programs that implement 12
ecosystem value –oriented forest management plans by pursuing additional ecosystem 13
value incentive payments, including: 14

(1) Additional State property tax benefits not to exceed 10% of the 15
landowner’s local property tax benefit per acre per year for the length of the adopted 16
ecosystem value–oriented forest management plan; 17

(2) Climate resilience easements to ensure that ecosystem value –oriented 18
forest management plans account for climate change; and 19

(3) Payments under State–funded restoration and conservation programs 20
that provide bonus payments to forest landowners accepting fores t restoration and 21
conservation easements to account for ecosystem value generated, enhanced, or retained. 22

(h) The Department shall ensure that all [uses of the Forest Ecosystem Value 23
Incentives Fund as ] payments for ecosystem value produce long –term ecological benefits 24
and do not generate unintended negative consequences to overall forest health. 25

[(i) (1) In this subsection, “Fund” means Forest Ecosystem Value Incentives 26
Fund. 27

(2) There is an Forest Ecosystem Value Incentives Fund. 28

(3) The purpose of the Fund is to provide additional financial incentives for 29
long–term retention , expansion, and preservation of forest land and for the adoption of 30
ecological value–oriented forest management plans through existing and new programs for 31
private forest landowners. 32

(4) The Department shall administer the Fund. 33

18 HOUSE BILL 1560

(5) (i) The Fund is a special, nonlapsing fund that is not subject to § 1
7–302 of the State Finance and Procurement Article. 2

(ii) The State Treasurer shall hold the Fund separately, and the 3
Comptroller shall account for the Fund. 4

(6) The Fund consists of: 5

(i) Money appropriated in the State budget to the Fund; 6

(ii) Ecosystem value impact fees generated under subsection (b) of 7
this section; 8

(iii) Any legal settlements directed to the Fund; 9

(iv) Voluntary contributions to the Fund; 10

(v) Grants to the Fund; 11

(vi) Interest earnings; and 12

(vii) Any other money from any other source accepted for the benefit 13
of the Fund. 14

(7) The Fund may be used only for: 15

(i) Using $2 million of the appropriation required under paragraph 16
(11) of this section: 17

1. To develop a plan for investment management that will 18
generate annual revenue through both traditional market investments and emerging 19
conservation financing opportunities; 20

2. To d evelop a blueprint for ecosystem value–oriented 21
forestry management plans; and 22

3. To d evelop and review of additional opportunities to 23
compensate forest landowners for forest ecological value benefits; and 24

(ii) To finance implementation of ecosystem value–oriented forestry 25
management plans and additional opportunities to compensate forest landowners for forest 26
ecological value benefits. 27

(8) (i) The State Treasurer shall invest the money of the Fund jointly 28
with an investment fund management entity with experience with conservation financing. 29

(ii) Any interest earnings of the Fund shall be credited to the Fund. 30
HOUSE BILL 1560 19

(9) Expenditures from the Fund may be made only in accordance with the 1
State budget. 2

(10) Money expended from the Fund for ecosystem value–oriented forestry 3
management plans and additional opportunities to compensate forest landowners for forest 4
ecological value benefits is supplemental to and is not intended to take the place of funding 5
that otherwise would be appropriated for forest conservation management agreements and 6
other forest conservation financing programs. 7

(11) For fiscal year 2028, the Governor shall include i n the annual budget 8
bill an appropriation of $10,000,000 to the Fund.] 9

Article – State Finance and Procurement 10

6–226. 11

(a) (2) (i) This paragraph does not apply in fiscal years 2024 through 2028. 12

(ii) Notwithstanding any other provision of law, and unless 13
inconsistent with a federal law, grant agreement, or other federal requirement or with the 14
terms of a gift or settlement agreement, net interest on all State money allocated by the 15
State Treasurer under this section to special funds or accounts, and otherwise entitled to 16
receive interest earnings, as accounted for by the Comptroller, shall accrue to the General 17
Fund of the State. 18

(iii) The provisions of subparagraph (ii) of this paragraph do not 19
apply to the following funds: 20

212. the Department of Social and Economic Mobility Special 21
Fund; AND 22

213. the Population Health Improvement Fund[; and] 23

[214. the Forest Ecosystem Value Incentives Fund]. 24

SECTION 4. AND BE IT FURTHER ENACTED, That, on or before December 31, 25
2027, the Maryland Forestry Foundation, in cooperation with the Department of Natural 26
Resources, shall report to the General Assembly, in accordance with § 2 –1257 of the State 27
Government Article, on methods of increasing the number of forest landowners entering 28
into a forest conservation and management agreement under § 8–211 of the Tax – Property 29
Article or in a n ecosystem value–oriented forest management plan to assist in achieving 30
Maryland’s land conservation goals under the Maryland the Beautiful Act of 2023 and 31
Maryland’s climate change mitigation goals under the Climate Solutions Now Act of 2022. 32

SECTION 5. AND BE IT FURTHER ENACTED, That, on or before December 1, 33
2050, the Department of Natural Resources, in consultation with the Maryland Forestry 34
20 HOUSE BILL 1560

Foundation, shall report to the General Assembly, in accordance with § 2–1257 of the State 1
Government Article, on the effectiveness of the Forest Ecosystem Value Incentives Fund, 2
including a recommendation on whether an extension of the Forest Ecosystem Value 3
Incentives Fund is warranted. 4

SECTION 6. AND BE IT FURTHER ENACTED, That Section 3 of this Act shall take 5
effect October 1, 2051. 6

SECTION 7. AND BE IT FURTHER ENACTED, That, except as provided in Section 7
6 of this Act, this Act shall take effect October 1, 2026. 8