Ecosystem services

AN ACT Relating to expanding revenue generation and economic 1
opportunities from natural climate solutions and ecosystem services; 2
amending RCW 79.02.010, 79.64.110, and 79.105.150; reenacting and 3
amending RCW 79.22.050; and adding a new chapter to Title 79 RCW.4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. (1) The legislature finds it is in the 6
best interest of the trust beneficiaries and the state to increase 7
revenue opportunities, diversify the trust asset portfolio, and 8
reduce costs. As new markets emerge, the department should be enabled 9
to take full advantage of opportunities to diversify and grow revenue 10
streams for beneficiaries and the state.11
(2) The legislature finds that the trust land performance 12
assessment, completed pursuant to section 7015, chapter 298, Laws of 13
2018, recommends exploring opportunities to diversify funding streams 14
for revenue generation, including utilizing carbon markets, as well 15
as other ways to monetize ecosystem services for the beneficiaries 16
and the state. The legislature further finds that the climate 17
commitment act, which established a cap and invest program under 18
chapter 70A.65 RCW, makes Washington state a leader in climate policy 19
and, through the codification of carbon offset projects, creates a 20
new way for revenue to be generated from lands and waters in the 21
Z-0500.2
SENATE BILL 5999
State of Washington 69th Legislature 2026 Regular Session
By Senators Lovelett, Shewmake, Nobles, Orwall, Pedersen, Saldaña,
Salomon, Wellman, and C. Wilson; by request of Department of Natural
Resources
Prefiled 01/06/26. Read first time 01/12/26. Referred to Committee
on Agriculture & Natural Resources.
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state. The legislature intends that the carbon offset projects 1
established for this program benefit the people of Washington by 2
being located on Washington lands and waters to the extent possible, 3
rather than outside the state. 4
(3) The legislature finds that as the manager of approximately 5
6,000,000 acres of lands and waters, the department is well-suited to 6
take actions that increase carbon sequestration and storage, generate 7
revenue from those actions through carbon offset projects, and 8
provide additional benefits including reforestation, forest health 9
restoration, afforestation, air and water purification, habitat 10
creation, temperature regulation, stormwater management, and disaster 11
mitigation. 12
(4) The legislature further finds that private landowners are 13
leading the way by entering carbon markets and that the department 14
should have similar authority as private landowners to enter carbon 15
markets to generate revenue and reduce costs for beneficiaries and 16
the state. For these reasons, the legislature believes the department 17
should have the same authority to enter carbon markets as private 18
landowners for ecosystem services projects on state lands.19
(5) The legislature finds that similar opportunities exist in 20
aquatic lands for kelp and eelgrass conservation and restoration 21
projects that reduce conservation and restoration costs to the state 22
and help to generate revenue for aquatic lands enhancement account 23
funds for salmon habitat improvements. 24
(6) Therefore, the legislature intends to establish the direct 25
authority for the department to generate revenue on its lands and 26
waters through payment for ecosystem service projects including, but 27
not limited to, carbon offset projects. Accordingly, the legislature 28
intends to provide the department the necessary authority to create 29
carbon offset and ecosystem services projects under the cap and 30
invest program and other regulatory and voluntary ecosystem service 31
market places. 32
NEW SECTION. Sec. 2. The definitions in this section apply 33
throughout this chapter unless the context clearly requires 34
otherwise.35
(1) "Carbon credit" means one metric ton of carbon dioxide 36
equivalent removed from the atmosphere or prevented from being 37
emitted into the atmosphere as a result of a carbon offset project 38
and within a carbon market transaction. 39
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(2) "Carbon offset project" has the same meaning as "offset 1
project" as defined in RCW 70A.65.010. 2
(3) "Ecosystem service credit" means a predetermined and 3
standardized unit that represents a measurable ecosystem service 4
provided in the context of a payment for an ecosystem service 5
project. 6
(4) "Ecosystem service marketplace" has the same meaning as 7
"ecosystem services market" as defined in RCW 76.09.020.8
(5) "Ecosystem service project broker" means an entity that 9
facilitates the process of matching ecosystem services providers and 10
purchasers of ecosystem services project credits. An ecosystem 11
service project broker may sell or procure credits on their clients' 12
behalf and provide financing and marketing expertise. Ecosystem 13
service project brokers may also act as ecosystem service project 14
developers. 15
(6) "Ecosystem service project developer" means an entity that 16
sources and initiates ecosystem services projects on behalf of the 17
ecosystem services provider including, but not limited to, by working 18
with ecosystem services project standards and verification bodies, 19
bearing financial risks of projects, and working with a network of 20
distributors and retailers to deliver auditable ecosystem services 21
project credits to a marketplace. An ecosystem service project 22
developer may also act as an ecosystem service project broker.23
(7) "Ecosystem services" has the same meaning as defined in RCW 24
76.09.020. Examples of ecosystem services include, but are not 25
limited to, carbon sequestration and storage, air and water 26
filtration, climate stabilization, and disturbance mitigation.27
(8) "Payment for ecosystem service project" means a transaction 28
within an ecosystem service marketplace that transfers financial 29
incentives to ecosystem services providers that are conditional on 30
the provision of the service. Project types include, but are not 31
limited to, carbon offset projects. 32
NEW SECTION. Sec. 3. (1) The department is authorized to enter 33
into contracts for payment for ecosystem service projects on terms 34
and conditions acceptable to the department for the purpose of 35
generating revenue by providing ecosystem services that directly or 36
indirectly benefit humans or enhance social welfare. The contract 37
term may last a period of up to 125 years. Proceeds from contracts 38
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for ecosystem services must be deposited into the appropriate account 1
in the state treasury. 2
(2) The department may enter into payment for ecosystem service 3
projects on all public lands managed by the department.4
(3) The department may: 5
(a) Directly offer for sale ecosystem service credits with 6
established compliance or voluntary ecosystem service marketplaces;7
(b) Enter into contracts with ecosystem service project 8
developers or brokers, through public auction or by direct 9
negotiation, to bring ecosystem service credits to market. Contracts 10
for ecosystem services are subject to rules adopted by the board.11
(4) Notice of intent to contract by negotiation must be published 12
on the department's website. The notice must be published within the 13
90 days preceding commencement of negotiations. 14
(5) The department is authorized to conduct any additional 15
advertising that it determines to be in the best interest of the 16
state. 17
(6) The department may enter into contracts or agreements with 18
third-party ecosystem service project developers or brokers for 19
purposes that include, but are not limited to, determining the 20
feasibility of entering into a contract for a payment for an 21
ecosystem service project, establishing a payment for an ecosystem 22
service project with an ecosystem service marketplace, and marketing 23
and selling credits on an established ecosystem service marketplace.24
NEW SECTION. Sec. 4. (1) Before entering into the sale of 25
ecosystem service credits under this chapter, the board must approve 26
contract terms and a minimum payment for ecosystem services that is 27
valid for a period of 180 days, or a longer period as may be 28
established by resolution. The board may reestablish the minimum 29
payment at any time.30
(2) Where the board has set a minimum payment for ecosystem 31
service credits, the department may set the final payment for 32
ecosystem service credits, which must be based on current market 33
prices. 34
Sec. 5. RCW 79.02.010 and 2018 c 258 s 1 are each amended to 35
read as follows: 36
The definitions in this section apply throughout this title 37
unless the context clearly requires otherwise. 38
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(1) "Aquatic lands" means all state-owned tidelands, shorelands, 1
harbor areas, and the beds of navigable waters as defined in RCW 2
79.105.060 that are administered by the department.3
(2) "Board" means the board of natural resources.4
(3) "Commissioner" means the commissioner of public lands.5
(4) "Community and technical college forest reserve lands" means 6
lands managed under RCW 79.02.420. 7
(5) "Community forest trust lands" means those lands acquired and 8
managed under the provisions of chapter 79.155 RCW.9
(6) "Department" means the department of natural resources.10
(7)(a) "Forest biomass" means the by-products of: Current forest 11
management activities; current forest protection treatments 12
prescribed or permitted under chapter 76.04 RCW; or the by-products 13
of forest health treatment prescribed or permitted under chapter 14
76.06 RCW. 15
(b) "Forest biomass" does not include wood pieces that have been 16
treated with chemical preservatives such as: Creosote, 17
pentachlorophenol, or copper-chrome-arsenic; wood from existing old 18
growth forests; wood required to be left on-site under chapter 76.09 19
RCW, the state forest practices act; and implementing rules, and 20
other legal and contractual requirements; or municipal solid waste.21
(8) "Good neighbor agreement" means an agreement entered into 22
between the state and the United States forest service or United 23
States bureau of land management to conduct forestland, watershed, 24
and rangeland restoration activities on federal lands, as originally 25
authorized by the 2014 farm bill (P.L. 113-79). 26
(9) "Improvements" means anything considered a fixture in law 27
placed upon or attached to lands administered by the department that 28
has changed the value of the lands or any changes in the previous 29
condition of the fixtures that changes the value of the lands.30
(10) "Land bank lands" means lands acquired under RCW 79.19.020.31
(11) "Person" means an individual, partnership, corporation, 32
association, organization, cooperative, public or municipal 33
corporation, or agency of a federal, state, or local governmental 34
unit, however designated. 35
(12) "Public lands" means lands of the state of Washington 36
administered by the department including but not limited to state 37
lands, state forestlands, lands included in a state forestland pool, 38
and aquatic lands. 39
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(13) "State forestland pool" or "land pool" means state 1
forestlands acquired and managed under RCW 79.22.140.2
(14) "State forestlands" means lands acquired under RCW 3
79.22.010, 79.22.040, and 79.22.020. 4
(15) "State lands" includes: 5
(a) School lands, that is, lands held in trust for the support of 6
the common schools; 7
(b) University lands, that is, lands held in trust for university 8
purposes; 9
(c) Agricultural college lands, that is, lands held in trust for 10
the use and support of agricultural colleges; 11
(d) Scientific school lands, that is, lands held in trust for the 12
establishment and maintenance of a scientific school;13
(e) Normal school lands, that is, lands held in trust for state 14
normal schools; 15
(f) Capitol building lands, that is, lands held in trust for the 16
purpose of erecting public buildings at the state capital for 17
legislative, executive, and judicial purposes; 18
(g) Institutional lands, that is, lands held in trust for state 19
charitable, educational, penal, and reformatory institutions; and20
(h) Land bank, escheat, donations, and all other lands, except 21
aquatic lands, administered by the department that are not devoted to 22
or reserved for a particular use by law. 23
(16) "Valuable materials" means any product or material on the 24
lands, such as forest products, forage or agricultural crops, stone, 25
gravel, sand, peat, and all other materials of value except: (a) 26
Mineral, coal, petroleum, and gas as provided for under chapter 79.14 27
RCW; ((and)) (b) forest biomass as provided for under chapter 79.150 28
RCW; and (c) ecosystem services as provided for under chapter 79.--- 29
RCW (the new chapter created in section 9 of this act).30
(17) "Ecosystem services" has the same meaning as defined in RCW 31
76.09.020. Examples of ecosystem services include, but are not 32
limited to, carbon sequestration and storage, air and water 33
filtration, climate stabilization, and disturbance mitigation.34
Sec. 6. RCW 79.64.110 and 2025 c 424 s 988 are each amended to 35
read as follows: 36
(1) Any moneys derived from the lease of state forestlands or 37
from the sale of valuable materials, oils, gases, coal, minerals, 38
((or)) fossils, or contracts for ecosystem services from those lands, 39
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except as provided in RCW 79.64.130, or the appraised value of these 1
resources when transferred to a public agency under RCW 79.22.060, 2
must be distributed as follows: 3
(a) For state forestlands acquired through RCW 79.22.040 or by 4
exchange or as replacement for lands acquired through RCW 79.22.040:5
(i) The expense incurred by the state for administration, 6
reforestation, and protection, not to exceed 25 percent, which rate 7
of percentage shall be determined by the board, must be returned to 8
the forest development account created in RCW 79.64.100. During the 9
2017-2019, 2019-2021, 2021-2023, 2023-2025, and 2025-2027 fiscal 10
biennia, the board may increase the 25 percent limitation up to 27 11
percent. 12
(ii) Any balance remaining must be paid to the county in which 13
the land is located or, if the land acquired under RCW 79.22.040 was 14
exchanged, transferred, or disposed, payment must be made to the 15
county from which the land was exchanged, transferred, or disposed. 16
For counties participating in a land pool created under RCW 17
79.22.140, to each participating county proportionate to its 18
contribution of asset value to the land pool as determined by the 19
board. Payments made under this subsection are to be paid, 20
distributed, and prorated to the various funds in the same manner as 21
general taxes are paid and distributed during the year of payment. 22
However, a county may in its discretion pay, distribute, and prorate 23
payments made under this subsection of moneys derived from state 24
forestlands acquired by exchange or as replacement lands, for lands 25
acquired through RCW 79.22.040, in the same manner as general taxes 26
are paid and distributed during the year of payment for the former 27
state forestlands that were subject to the exchange.28
(iii) Any balance remaining, paid to a county with a population 29
of less than 16,000, must first be applied to the reduction of any 30
indebtedness existing in the current expense fund of the county 31
during the year of payment. 32
(iv) With regard to moneys remaining under this subsection 33
(1)(a), within seven working days of receipt of these moneys, the 34
department shall certify to the state treasurer the amounts to be 35
distributed to the counties. The state treasurer shall distribute 36
funds to the counties four times per month, with no more than 10 days 37
between each payment date. 38
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(b) For state forestlands acquired through RCW 79.22.010 or by 1
exchange or as replacement lands for lands acquired through RCW 2
79.22.010, except as provided in RCW 79.64.120: 3
(i) Fifty percent shall be placed in the forest development 4
account. 5
(ii) Fifty percent shall be prorated and distributed to the state 6
general fund, to be dedicated for the benefit of the public schools, 7
to the county in which the land is located or, for counties 8
participating in a land pool created under RCW 79.22.140, to each 9
participating county proportionate to its contribution of asset value 10
to the land pool as determined by the board, and according to the 11
relative proportions of tax levies of all taxing districts in the 12
county. The portion to be distributed to the state general fund shall 13
be based on the regular school levy rate under RCW 84.52.065 (1) and 14
(2) and the levy rate for any school district enrichment levies. With 15
regard to the portion to be distributed to the counties, the 16
department shall certify to the state treasurer the amounts to be 17
distributed within seven working days of receipt of the money. The 18
state treasurer shall distribute funds to the counties four times per 19
month, with no more than 10 days between each payment date. The money 20
distributed to the county must be paid, distributed, and prorated to 21
the various other funds in the same manner as general taxes are paid 22
and distributed during the year of payment. 23
(2) A school district may transfer amounts deposited in its debt 24
service fund pursuant to this section into its capital projects fund 25
as authorized in RCW 28A.320.330. 26
Sec. 7. RCW 79.22.050 and 2003 c 334 s 220 and 2003 c 313 s 7 27
are each reenacted and amended to read as follows:28
Except as provided in RCW 79.22.060, all land, acquired or 29
designated by the department as state forestland, shall be forever 30
reserved from sale, but the valuable materials thereon may be sold , 31
ecosystem services may be sold, or the land may be leased in the same 32
manner and for the same purposes as is authorized for state lands if 33
the department finds such sale or lease to be in the best interests 34
of the state and approves the terms and conditions thereof.35
In the event that the department sells logs using the contract 36
harvesting process described in RCW 79.15.500 through 79.15.530, the 37
moneys received subject to this section are the net proceeds from the 38
contract harvesting sale. 39
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Sec. 8. RCW 79.105.150 and 2022 c 157 s 19 are each amended to 1
read as follows: 2
(1) After deduction for management costs as provided in RCW 3
79.64.040 and payments to towns under RCW 79.115.150(2), all moneys 4
received by the state from the sale or lease of state-owned aquatic 5
lands ((and)), from the sale of valuable material from state-owned 6
aquatic lands, and from the sale of ecosystem services under chapter 7
79.--- RCW (the new chapter created in section 9 of this act), shall 8
be deposited in the aquatic lands enhancement account which is hereby 9
created in the state treasury. After appropriation, these funds shall 10
be used solely for aquatic lands enhancement projects; for the 11
purchase, improvement, or protection of aquatic lands for public 12
purposes; for providing and improving access to the lands; and for 13
volunteer cooperative fish and game projects. The aquatic lands 14
enhancement account may be used to support the shellfish program, the 15
ballast water program, hatcheries, the Puget Sound toxic sampling 16
program and steelhead mortality research at the department of fish 17
and wildlife, the knotweed program at the department of agriculture, 18
actions at the University of Washington for reducing ocean 19
acidification, which may include the creation of a center on ocean 20
acidification, the Puget SoundCorps program, and support of the 21
marine resource advisory council and the Washington coastal marine 22
advisory council. During the 2017-2019 and 2019-2021 fiscal biennia, 23
the legislature may transfer from the aquatic lands enhancement 24
account to the geoduck aquaculture research account for research 25
related to shellfish aquaculture. During the 2015-2017 fiscal 26
biennium, the legislature may transfer moneys from the aquatic lands 27
enhancement account to the marine resources stewardship trust 28
account. 29
(2) In providing grants for aquatic lands enhancement projects, 30
the recreation and conservation funding board shall:31
(a) Require grant recipients to incorporate the environmental 32
benefits of the project into their grant applications;33
(b) Utilize the statement of environmental benefits, 34
consideration, except as provided in RCW 79.105.610, of whether the 35
applicant is a Puget Sound partner, as defined in RCW 90.71.010, 36
whether a project is referenced in the action agenda developed by the 37
Puget Sound partnership under RCW 90.71.310, and except as otherwise 38
provided in RCW 79.105.630, and effective one calendar year following 39
the development and statewide availability of urban forestry 40
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management plans and ordinances under RCW 76.15.090, whether the 1
applicant is an entity that has been recognized, and what gradation 2
of recognition was received, in the evergreen community designation 3
program created in RCW 76.15.090 in its prioritization and selection 4
process; and 5
(c) Develop appropriate outcome-focused performance measures to 6
be used both for management and performance assessment of the grants.7
(3) To the extent possible, the department should coordinate its 8
performance measure system with other natural resource-related 9
agencies as defined in RCW 43.41.270. 10
(4) The department shall consult with affected interest groups in 11
implementing this section. 12
(5) Any project designed to address the restoration of Puget 13
Sound may be funded under this chapter only if the project is not in 14
conflict with the action agenda developed by the Puget Sound 15
partnership under RCW 90.71.310. 16
NEW SECTION. Sec. 9. Sections 1 through 4 of this act 17
constitute a new chapter in Title 79 RCW.18
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