S Bill 3399 Rural Forest Markets Act of 2023

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

• guarantee not more than $150 million in the aggregate for bonds, loans, and other investment vehicles;
• conduct annual audits of each eligible project financed under the program; and
• issue implementing regulations.