Ending Fossil Fuel Bailouts Act of 2026
- Bill Number
- H.R. 9035
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2026-05-26: Referred to the Committee on the Judiciary, and in addition to the Committee on Natural Resources, 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
- 2026-06-26T08:07:23Z
AI-Generated Summary
Summary of H.R. 9035: Ending Fossil Fuel Bailouts Act of 2026
Purpose
This legislation amends the U.S. Bankruptcy Code (title 11 of the United States Code) to prevent oil, gas, and coal companies from using bankruptcy proceedings to avoid fulfilling environmental cleanup and reclamation obligations. It aims to ensure that such companies prioritize environmental responsibilities over other claims during financial distress.
Key Provisions
- Definitions: Adds new terms to the Bankruptcy Code, including "fossil fuel company" (entities involved in exploration, production, refinement, or distribution of oil, gas, coal, or derivatives), "executive officer," and specific definitions for "coal," "gas," and "oil."
- Prioritization of Reclamation Costs: Amends section 506 to treat accumulated and projected reclamation costs as necessary expenses for preserving or disposing of secured property. Amends section 507 to establish a new priority order for fossil fuel company debtors, placing non-executive employee wages and benefits first, followed by reclamation costs (with sub-priorities for bonds and penalties under laws like the Clean Air Act and Clean Water Act), then other unsecured claims, shareholder claims, and existing priorities.
- Liability for Shortfalls: If funds are insufficient for top-priority claims, courts may recover executive compensation from the prior five years, and private equity firms, parent companies, and hedge funds are held strictly liable under joint and several liability.
- Non-Dischargeability: Amends section 523 to make environmental bonds and reclamation costs non-dischargeable in bankruptcy.
- Prohibition on Abandonment: Amends section 554 to bar abandonment of fossil fuel assets if they were or could be used for exploration, production, refinement, or distribution.
- Extended Fraudulent Transfer Period: Amends section 548 to allow avoidance of transfers or obligations by fossil fuel companies up to 10 years before filing (instead of the standard two years) if fraudulent.
- Lease Transfer Restrictions: Requires the Secretary of the Interior to include in future oil, gas, or coal leases (under the Mineral Leasing Act or Outer Continental Shelf Lands Act) a prohibition on transfers if the lessee has filed for bankruptcy.
- Effective Date: Applies only to bankruptcy cases filed on or after the date of enactment.
Significant Changes to Existing Law
- Introduces specialized rules for fossil fuel companies in bankruptcy, overriding general provisions on claim prioritization, debt discharge, property abandonment, and fraudulent transfers.
- Extends liability beyond the debtor company to investors and affiliates.
- Creates new non-dischargeable categories tied to environmental laws.
Potential Impacts
- Government Agencies: Increases obligations on the Department of the Interior (lease administration), Environmental Protection Agency, and state/local environmental regulators to enforce reclamation in bankruptcy contexts; may raise administrative burdens on bankruptcy courts.
- Citizens: Could lead to more complete environmental cleanups at fossil fuel sites, reducing long-term public costs for remediation, though it may indirectly affect energy prices or employment in the sector.
- International Relations: May impact foreign-owned fossil fuel operations in the U.S. by limiting their ability to restructure debts or transfer assets, potentially affecting cross-border investments.
Main Stakeholders Affected
- Fossil fuel companies (debtors in bankruptcy).
- Company executives, private equity firms, parent companies, and hedge funds (subject to liability and compensation clawbacks).
- Employees of fossil fuel companies (with prioritized wage claims).
- Federal, state, and local environmental agencies (enforcement of reclamation).
- Communities near fossil fuel operations (potential beneficiaries of cleanups).
- Bankruptcy trustees, courts, and creditors (altered claim hierarchies).
Notable Legal, Constitutional, or Political Implications
- Raises potential challenges under the Takings Clause or due process protections if reclamation costs are prioritized over secured creditors.
- Strengthens federal environmental laws by integrating them directly into bankruptcy proceedings, which could lead to increased litigation over claim priorities.
- Politically targets the fossil fuel sector with investor liability provisions, which may face opposition from industry groups.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (12)
Rep. Huffman, Jared [D-CA-2], Rep. Ansari, Yassamin [D-AZ-3], Rep. Grijalva, Adelita S. [D-AZ-7], Rep. Dexter, Maxine [D-OR-3], Rep. Brownley, Julia [D-CA-26], Rep. Lieu, Ted [D-CA-36], Rep. Carbajal, Salud O. [D-CA-24], Rep. Tlaib, Rashida [D-MI-12], Rep. Levin, Mike [D-CA-49], Rep. Mullin, Kevin [D-CA-15], Rep. Garcia, Robert [D-CA-42], Rep. Lofgren, Zoe [D-CA-18]
Recent Actions
- 2026-05-26: Referred to the Committee on the Judiciary, and in addition to the Committee on Natural Resources, 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.
- 2026-05-26: Referred to the Committee on the Judiciary, and in addition to the Committee on Natural Resources, 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.
- 2026-05-26: Introduced in House
- 2026-05-26: Introduced in House
Bill Versions
- Ending Fossil Fuel Bailouts Act of 2026 — issued 2026-05-26 — PDF (10 pages)