A new classification of company could cause problems for rural communities in Texas and elsewhere if federal officials approve its proposed creation.

The Securities and Exchange Commission (SEC) is considering a controversial proposal that would allow for the creation and listing of a new type of company on the New York Stock Exchange (NYSE) known as a Natural Asset Company (NAC).

According to the NYSE, NACs are meant to “capture the intrinsic and productive value of nature and provide a store of value based on vital assets,” including “forests, wetlands, and coral reefs, as well as working lands such as farms.”

“To address the large and complex challenges of climate change and the transition to a more sustainable economy, NYSE and Intrinsic Exchange Group are pioneering a new class of listed company based on nature and the benefits that nature provides — termed ‘ecosystem services,'” NYSE states on its website.

While the SEC proposal may seem well-intentioned, it poses a “significant risk” to rural economies, at least according to Marlo Oaks, state treasurer of Utah.

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By allowing for this new company classification, Oaks says it creates a mechanism for public and private land to be “permanently removed from productive use in the name of solving climate change.”

“The proposed creation of Natural Asset Companies is one of the greatest threats to rural communities in the history of our country,” Oaks said in a statement. “Under the proposal, private interests, including foreign-controlled sovereign wealth funds, could use their capital to purchase or manage farmland, national and state parks, and other mineral-rich areas and stop essential economic activities like farming, grazing, and energy extraction.”

Unlike other companies that generate a profit from traditional activities and are accountable to investors, Oaks said the purpose of an NAC is to “maximize the value of the land’s ecological services.”

According to Oaks, if a government-owned area gets designated NAC-managed land, all use of farm machinery and synthetic fertilizers would be prohibited, as well as extractive activities.

Like Utah, Texas has abundant rural farmland and extracts large amounts of natural resources to help fuel its economy. While the impact could be damaging in Texas, Oaks said it would be worse in western states.

“In western states, where the federal government owns more than half of the land and is pushing for more conservation easements, the effect could be devastating. Natural Asset Companies could acquire the easements without the landowners’ consent,” he claimed.

After a 21-day public comment period, the SEC was scheduled to vote on the proposal on January 2. However, a decision was delayed, and public comments on the matter are being accepted until January 18.

Click here to submit a comment to the SEC on the issue.