Polluters Pay Climate Fund Act of 2025
- Bill Number
- H.R. 1135
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-02-07: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2026-06-03T08:07:45Z
AI-Generated Summary
Purpose of the Legislation
The Polluters Pay Climate Fund Act of 2025 aims to hold major fossil fuel companies accountable for historical greenhouse gas emissions by imposing a financial assessment (in the form of a tax) on their past carbon dioxide contributions. The revenue will fund a new trust fund dedicated to addressing climate change impacts through resilience, adaptation, and recovery efforts, with a focus on protecting vulnerable communities.
Key Provisions
- Imposition of Tax on Fossil Fuel Emissions (Section 3):
- Targets "assessable persons," defined as U.S. persons or those in U.S. trade/business who extracted fossil fuels (coal, crude oil, fuel gases) or refined crude oil between January 1, 2000, and December 31, 2023, and are responsible for more than 1 billion metric tons of carbon dioxide emissions.
- The total tax is $1 trillion, allocated proportionally based on each company's share of emissions exceeding 1 billion metric tons (calculated using standardized emission factors, e.g., 432,180 metric tons of CO2 per 1 million barrels of crude oil).
- Payment due by September 30, 2026; companies can elect to pay in 9 annual installments (20% first year, 10% each subsequent year), with acceleration rules for business cessation or bankruptcy.
- Controlled groups (e.g., affiliates under common ownership) are treated as one entity; joint liability applies.
- The tax is non-deductible for income tax purposes.
- Establishment of the Polluters Pay Climate Fund (Section 4):
- Creates a trust fund in the U.S. Treasury, funded by tax revenues (estimated at $100 billion annually from major companies).
- Funds must support climate resilience and adaptation, including disaster recovery, resilient infrastructure (e.g., energy grids, food systems, transportation, ecosystems, water), public health (e.g., extreme heat), and weather prediction.
- Annual allocations: At least $15 billion to FEMA for disaster response/resilience (including $3 billion for the Building Resilient Infrastructure and Communities program); at least $6 billion to EPA for grants/technical assistance on air quality/climate.
- 40% of funds reserved for "environmental justice communities" (communities of color, low-income, Tribal/Indigenous groups disproportionately affected by pollution and climate risks).
- Treasury Secretary, in consultation with EPA and other agencies, prioritizes high-impact projects via selection criteria.
- Preservation of Legal Remedies (Section 5):
- Does not limit common law, state, or federal claims against polluters for deception, damages, or failure to warn related to fossil fuels and climate change (e.g., nuisance, negligence suits).
- Fund expenditures cannot be used as evidence or to offset damages in such lawsuits; no repayment required if damages are awarded.
- Non-Preemption of State/Local Actions (Section 6):
- Explicitly allows states/localities to maintain their own laws on emissions standards, monitoring, cost recovery for adaptation, and investigations without federal override.
Significant Changes to Existing Law
- Amends the Internal Revenue Code (Chapter 38) by adding a new subchapter (E) for this emissions tax, the first of its kind targeting historical fossil fuel emissions rather than ongoing activities.
- Creates a new trust fund (Section 9512 in Chapter 98), similar to existing funds like the Highway Trust Fund, but dedicated solely to climate resilience.
- Prohibits deduction of the tax under Section 275, increasing its effective cost.
- Builds on but does not alter core environmental laws like the Clean Air Act; instead, it supplements them without preempting state remedies or ongoing litigation.
Potential Impacts
- Government Agencies: Provides dedicated funding to Treasury, EPA, and FEMA for climate programs, potentially reducing reliance on general budgets and enabling large-scale investments (trillions needed per congressional findings). Requires new regulations from Treasury within 18 months for tax implementation.
- Citizens: Benefits vulnerable groups through targeted resilience projects (e.g., disaster aid, heat mitigation), aiming to address $150 billion+ annual climate costs, especially in underserved areas. General public gains from improved infrastructure and ecosystems, but no direct citizen payments or rebates.
- International Relations: Primarily affects U.S.-based or operating fossil fuel entities; could influence global climate finance discussions by modeling industry accountability, but no direct foreign aid or treaties mentioned. May strain relations with countries reliant on U.S. energy exports if it raises costs.
Main Stakeholders Affected
- Fossil Fuel Industry: Major extractors and refiners (e.g., those with >1 billion metric tons emissions) face significant financial liability (proportional to historical output), potentially affecting profitability, operations, and successors (e.g., via mergers).
- Environmental Justice and Vulnerable Communities: Primary beneficiaries, with 40% fund allocation for low-income, communities of color, and Tribal/Indigenous groups to build resilience against disproportionate climate harms.
- Government Entities: Federal agencies (Treasury, EPA, FEMA) gain resources and coordination roles; states/localities retain autonomy for complementary programs.
- General Public and Economy: Indirectly impacted through enhanced disaster preparedness and adaptation, reducing long-term costs from events like floods and wildfires.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces polluter accountability without waiving rights to sue (e.g., for fraud or negligence), preserving federalism by avoiding preemption of state laws. The tax formula relies on peer-reviewed science for emissions attribution, potentially setting precedent for science-based liability.
- Constitutional: Invokes Congress's taxing power (Article I, Section 8) to fund public welfare (climate protection); installment options and joint liability mitigate due process concerns, but challenges could arise over retroactivity (covering 2000-2023 emissions) or fairness to industry.
- Political: Findings emphasize industry knowledge of climate risks since pre-2000, framing the Act as equitable cost-sharing rather than punishment (explicitly not a fault determination). Could polarize debates on energy policy, environmental justice, and federal spending, with referrals to key committees (Ways and Means, Transportation, Energy) signaling bipartisan scrutiny needs.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Nadler, Jerrold [D-NY-12]
Cosponsors (25)
Rep. Chu, Judy [D-CA-28], Rep. Castor, Kathy [D-FL-14], Rep. Dean, Madeleine [D-PA-4], Rep. Ocasio-Cortez, Alexandria [D-NY-14], Rep. Tlaib, Rashida [D-MI-12], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Ramirez, Delia C. [D-IL-3], Rep. Watson Coleman, Bonnie [D-NJ-12], Rep. Lee, Summer L. [D-PA-12], Rep. Raskin, Jamie [D-MD-8], Rep. Schakowsky, Janice D. [D-IL-9], Rep. Balint, Becca [D-VT-At Large], Rep. Jayapal, Pramila [D-WA-7], Rep. Grijalva, Raúl M. [D-AZ-7], Rep. McGovern, James P. [D-MA-2], Rep. Jackson, Jonathan L. [D-IL-1], Rep. Johnson, Henry C. "Hank" [D-GA-4], Rep. Carson, André [D-IN-7], Rep. Omar, Ilhan [D-MN-5], Rep. García, Jesús G. "Chuy" [D-IL-4], Rep. Lieu, Ted [D-CA-36], Rep. Quigley, Mike [D-IL-5], Rep. Grijalva, Adelita S. [D-AZ-7], Rep. Foushee, Valerie P. [D-NC-4], Rep. Simon, Lateefah [D-CA-12]
Recent Actions
- 2025-02-07: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-02-07: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-02-07: Referred to the Committee on Ways and Means, and in addition to the Committees on Transportation and Infrastructure, and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-02-07: Introduced in House
- 2025-02-07: Introduced in House
Bill Versions
- Polluters Pay Climate Fund Act of 2025 — issued 2025-02-07 — PDF (20 pages)