Cooper Otte, 27, (left, holding sign) and Matthew Hawks, 32, (right, in green) both of Eugene, participated in a peaceful protest march from the state capital building to the Oregon Department of State Lands on Dec. 9, 2014. Environmentalists are working on proposals to end logging on the forest and maintain payments to the education fund.

SALEM — Environmental groups hope a bill in the Oregon Legislature will permanently end commercial timber harvest on the Elliott State Forest and rule out its sale to private investors.

Legislation introduced earlier this month would establish a system to protect state trust land such as the Elliott State Forest, by allowing officials to transfer the land to a state agency that will manage it for conservation.

Rep. Tobias Read, D-Beaverton, is the chief sponsor of House Bill 3474 to create a trust lands transfer commission similar to a system in Washington. It was introduced March 2 and is currently at the House Committee on Rural Communities, Land Use, and Water. Sen. Arnie Roblan, D-Coos Bay, was drafting similar legislation and the legislators are now coordinating on the issue.

Protecting the Elliott State Forest would be a big win for conservationists.

“It’s really been a primary conservation campaign for us for 10 years,” said Josh Laughlin, interim executive director of Cascadia Wildlands. Laughlin said the group supports thinning of the Elliott State Forest to return the land, much of which was clearcut in past decades, to a more natural state.

Logging of the Elliott and other state trust lands historically generated revenue for Oregon’s Common Schools Fund, which provides approximately 1 percent of revenue in the state education budget and is managed by the State Land Board. The arrangement generated more controversy and less revenue in recent years, after lawsuits related to federally protected species in the forest caused the state to reduced timber harvests.

Oregon lost $3 million on the Elliott State Forest in fiscal year 2013 and nearly $392,000 in 2014, because management costs exceeded revenue. The prompted the state to auction off three parcels of land in the forest in 2014, before the State Land Board decided to halt any additional auctions. Members of the board — then Gov. John Kitzhaber, then-Secretary of State Kate Brown and State Treasurer Ted Wheeler — said in December they wanted to sell the Elliott State Forest to another government agency or public-private partnership.

Other options still under consideration would maintain the forest’s revenue-generating relationship with the school fund, if the state can identify a plan to balance logging with habitat conservation for protected fish and birds. Employees at the Department of State Lands are developing a process to solicit new ownership proposals for the 84,000 acres in the Elliott forest tied to the state schools fund. The agency is scheduled report on its progress at a June meeting of the State Land Board.

The State Land Board was vague about the type of public-private partnership that could apply to purchase the Elliott State Forest, but a consulting firm tied to the Kitzhaber administration was already working on just such a proposal.

Tom Tuchmann, a contractor advising Kitzhaber on forestry and conservation finance policy, revealed in a conflict of interest disclosure that his consulting firm, US Forest Capital, LLC, was working with a group of equity investors and other entities on a proposal.

The idea that the forest could be sold to an entity that would continue logging caused concern among environmental groups, and raised the stakes for them to work on legislation that would provide another option.

“(Tuchmann) was promoting an approach we weren’t supporting at all,” Laughlin said. “You’re basically just moving the conundrum from the common school fund to equity investors.”

Read’s bill would allow the State Land Board and a new Trust Lands Transfer Commission to move any trust land such as the Elliott State Forest into different public ownership, such as the Oregon Parks and Recreation Department, and it would set up a fund to compensate public schools for lost logging revenue.

An open question is where the state would get the money to fund transfers of trust land, since it is required to reimburse the Common Schools Fund for the fair market value of the land. Read’s bill would allow lawmakers to appropriate money to the fund, and it could also accept gifts, grants, bequests and donated property.

Some of the options that interested parties have discussed include general fund money or bridge funding from private land trusts which the state would repay. Also, Laughlin said “There’s been discussion around state bonding authority.”

Rhett Lawrence, conservation director for the Oregon chapter of the Sierra Club and a registered lobbyist, said he does not expect the Legislature to resolve the funding issue this session.

“The hope is at least this session to get the sort of mechanisms put in place by which future funding could be appropriated through whatever source to protect these parcels in the Elliott,” Lawrence said.

Laughlin said the trust lands bill is modeled on an existing system in Washington. Lawmakers in Washington appropriated more than $800 million since the program was created in 1989, to pay for school construction that would otherwise be funded with logging revenue, or to purchase less controversial timberland to harvest, Laughlin said.

A work group formed and help its first meeting March 6 to discuss that topic, and members include Roblan, representatives from the State Land Board, Department of State Lands, Treasurer’s office and at least one representative from the conservation community.

Julie Curtis, a spokeswoman for the Department of State Lands, said the State Land Board could still pursue other options for the Elliott State Forest even if lawmakers pass HB 3474. But the bill would lay the groundwork necessary if the board decides to pursue that type of land transfer.

“That tool needs to be in place if that is where the land board directs us to go, after we’ve done a little more investigation of these other options,” Curtis said.

The Capital Bureau is a collaboration between EO Media Group and Pamplin Media Group.