Overview
Title
To impose an assessment related to fossil fuel emissions, to establish the Polluters Pay Climate Fund, and for other purposes.
ELI5 AI
This bill wants to make companies that use fossil fuels pay more money because their actions make the earth warmer, and it will use that money to help protect people and places from the bad effects of climate change. It also says that anyone can still take companies to court if they think they’ve been harmed by them.
Summary AI
H.R. 1135, titled the "Polluters Pay Climate Fund Act of 2025," proposes new taxes on fossil fuel companies based on their carbon dioxide emissions since 2000. It aims to create a "Polluters Pay Climate Fund," financed by these taxes, to invest in climate change resilience, adaptation efforts, and environmental justice, particularly benefiting underserved communities. The bill also safeguards the rights of individuals and governments to pursue legal actions against fossil fuel companies for climate-related damages. It emphasizes that federal actions do not override state or local climate-related laws or measures.
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AnalysisAI
General Summary of the Bill
The "Polluters Pay Climate Fund Act of 2025," designated as H.R. 1135, aims to address climate change by imposing taxes on large fossil fuel companies based on their carbon dioxide emissions. The bill proposes the creation of a trust fund known as the "Polluters Pay Climate Fund." The fund is intended to finance initiatives that bolster climate resilience, adaptation, disaster response, and support for environmental justice communities. The legislation seeks to hold companies accountable for their contributions to climate change, requiring them to bear some of the financial burdens of responding to its impacts.
Summary of Significant Issues
A central issue with the bill is the complexity involved in calculating the tax owed by each "assessable person" or company. The calculations necessitate determining an entity's "applicable share" of emissions, which could lead to administrative complexities and potential disputes. The term "successor in interest" is not clearly defined, posing legal ambiguities, particularly in corporate mergers or acquisitions.
Furthermore, the bill does not provide detailed criteria for assessing contributions required from fossil fuel companies nor how these will be adjusted over time, potentially leading to financial uncertainties for these companies. Oversight mechanisms for fund allocation are not clearly specified, raising concerns about potential misallocation or ineffective use of funds. Additionally, there is no precise definition of "extreme weather events," which could lead to inconsistent application of the bill's provisions.
Impact on the Public
Broadly, the bill aims to mitigate climate change impacts, which could be beneficial for the public by fostering investments in infrastructure resilience and climate adaptation. Ideally, it should lead to better-prepared communities that can withstand climate-related disasters. Taxing fossil fuel companies could also incentivize a shift towards cleaner energy sources, potentially reducing overall emissions.
However, the administrative complexities and the lack of clear definitions in the bill could lead to legal battles or inefficiencies in fund allocation. Companies may pass the tax burden onto consumers, potentially affecting energy prices and the cost of goods.
Impact on Specific Stakeholders
Fossil Fuel Companies: The obligation to pay substantial taxes may impose financial strain on these companies. Undefined terms and ambiguous tax calculations could create additional administrative hurdles. In response, companies might shift some costs onto consumers, affecting prices.
Vulnerable Communities: The bill aims to prioritize investments in communities disproportionately affected by climate change, potentially offering improved resilience and support. However, the lack of clear criteria for designating these communities may lead to resource allocation disputes, potentially overlooking some affected groups.
Government and Regulatory Bodies: Significant administrative resources may be required to implement, monitor, and enforce the provisions of the bill. The absence of detailed guidelines for tax enforcement and fund management could result in significant challenges for these bodies.
General Public: Improved climate resilience could lead to safer living environments, particularly in areas prone to severe weather conditions. However, potential price increases for energy and related products might impact household budgets.
In conclusion, while the bill sets ambitious objectives for tackling climate change, the practical implementation might be challenged by legal, administrative, and financial complexities. The success of this legislation largely hinges on resolving these issues to ensure that its benefits are realized effectively.
Financial Assessment
In examining the financial components of H.R. 1135, titled the "Polluters Pay Climate Fund Act of 2025," several key elements warrant attention. The bill introduces a tax on fossil fuel companies based on their carbon dioxide emissions, intended to generate substantial funding for climate resilience initiatives.
Financial Allocations
The bill proposes a new tax structure targeting fossil fuel companies, designed to collect $100 billion each year. These taxes are to be used to establish a "Polluters Pay Climate Fund," intended to support climate change resilience, adaptation, and environmental justice projects. Specific allocations from the Fund include:
$15 billion annually to the Federal Emergency Management Agency (FEMA) for disaster response and resilience programs related to climate issues, such as hurricanes and wildfires. Of this, at least $3 billion is earmarked for the Building Resilient Infrastructure and Communities program.
$6 billion annually for grants and technical assistance under the Clean Air Act, with the specific allocation to be determined by the Environmental Protection Agency (EPA) Administrator.
Related Issues
The financial framework outlined in the bill presents several challenges that could complicate its implementation:
Administrative Burden: Determining the "applicable shares" of carbon dioxide emissions for tax calculation poses a potential administrative challenge (Issue 1). The assessment of each company's environmental impact requires comprehensive data collection and analysis, leading to a possible increase in bureaucratic workload and potential disputes over tax amounts.
Financial Planning Ambiguities: The bill outlines significant financial obligations for fossil fuel companies without clarifying if or how these obligations might be adjusted over time (Issue 3). This lack of clarity could result in financial uncertainty for the companies involved, affecting their long-term planning and investments.
Oversight and Accountability: Although the bill directs substantial funding toward climate resiliency, it lacks specific mechanisms to ensure effective oversight and accountability in spending these funds (Issue 4). This could lead to concerns about potential misallocation or inefficient use of resources.
Resource Allocation Disputes: The bill aims to support communities most vulnerable to climate impacts but lacks precise criteria for defining these communities (Issue 5). This ambiguity might lead to disagreements over the distribution of financial resources, potentially complicating efforts to target underserved areas effectively.
Complex Installment Payments: The option for fossil fuel companies to pay the imposed tax in installments introduces complexity into tax collection (Issue 7). If companies encounter financial difficulties or undergo ownership changes, regulatory supervision would need to ensure compliance with payment schedules.
Subjective Allocation Criteria: The bill uses broad language in directing how funds should be allocated, potentially leading to inconsistent applications and regional implementation discrepancies (Issue 6). Clearer guidelines and criteria could be beneficial in ensuring funds are allocated to projects with the greatest impact.
Overall, while H.R. 1135 outlines a comprehensive financial strategy for addressing climate change impacts, addressing these issues could enhance the effectiveness of the financial components and facilitate smoother implementation.
Issues
The bill outlines the establishment of a new tax on fossil fuel companies that will require significant administrative guidance to appropriately determine 'applicable shares' and calculate tax amounts, potentially leading to administrative burden and disputes over calculations. (Section 3, Section 4691)
There is a lack of clearly defined terms such as 'successor in interest', which may lead to legal ambiguity, particularly concerning determining liability in cases of mergers or acquisitions. (Section 3, Section 4691)
The bill requires fossil fuel companies to contribute significantly to the Polluters Pay Climate Fund without specifying how these contributions will be calculated or adjusted over time. This could result in financial planning ambiguities for these companies. (Section 2, Section 4)
While the text sets ambitious goals for climate resiliency investments, it lacks specific oversight mechanisms to ensure funds are spent effectively, raising potential concerns about misallocation or wasteful spending. (Section 4, Section 9512)
The bill does not clearly define criteria for assessing which communities are 'most vulnerable to climate change impacts', which could lead to disputes over resource allocation. (Section 2, Section 4)
Subjective language is used for determining how funds should be allocated within the Polluters Pay Climate Change Fund, which might lead to inconsistent application due to the lack of detailed criteria or guidelines. (Section 4, Section 9512)
The election to pay the tax in installments under the bill may complicate tax enforcement and collection, particularly if a company faces insolvency or significant asset sales, necessitating extensive regulatory supervision. (Section 3, Section 4691)
The bill does not define 'extreme weather events' precisely, leaving room for interpretation challenges concerning which events qualify under its provisions. (Section 2)
The installment payment process for the imposed tax is complex and involves numerous conditions that may be difficult for companies to understand and apply accurately. (Section 3, Section 4691)
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill states that the official name of the legislation is the “Polluters Pay Climate Fund Act of 2025.”
2. Findings Read Opens in new tab
Summary AI
The findings section emphasizes that climate change, primarily caused by burning fossil fuels, poses a serious threat to the U.S., with its effects already visible in extreme weather conditions. It stresses the need for the federal and local governments to invest trillions of dollars in protective measures, especially supporting vulnerable communities, and points out that fossil fuel companies should contribute to this effort financially, highlighting research linking their activities to carbon emissions. The section clarifies that the legislation doesn't assign fault but aims to safeguard the nation.
Money References
- Congress finds that— (1) climate change, resulting primarily from the combustion of fossil fuels, is an immediate, grave threat to the communities, environment, and economy of the United States; (2) severe consequences of climate change have already materialized in the United States, including rising sea levels, increasing temperatures, extreme weather events, flooding, heat waves, loss of biodiversity, and other climate change-driven ecosystem threats; (3) the Federal Government jointly with States and localities must develop and implement protective measures to counteract the adverse effects of climate change, protect communities, and build resilience to extreme weather; (4) the government response must include protections for communities that are most vulnerable to climate change impacts, especially communities of color, low-income communities, and Tribal and Indigenous communities that are also more likely to have experienced systemic disinvestment and be overburdened by fossil fuel pollution; (5) the protective measures necessary to respond to the adverse effects of climate change in the United States will require trillions of dollars of new investment during the decade after the date of enactment of this Act; (6) climate change related extreme weather events, such as those described in paragraph (2), cost the United States at least $150,000,000,000 each year and disproportionately affect underserved and overburdened communities, according to the Fifth National Climate Assessment; (7) the $100,000,000,000 each year that fossil fuel companies are collectively assessed for the Polluters Pay Climate Fund established in this Act represents only a small portion of the total cost to the Federal government to respond to climate change related extreme weather events and make needed climate change adaptation and resilience investments; (8) peer-reviewed research can now determine with great accuracy the share of carbon dioxide released into the atmosphere by the operations and products of specific fossil fuel companies, which is what informs the formulas to determine carbon dioxide emissions that are used in the amendments made by this Act; (9) the fossil fuel industry has been aware of the central role that their product plays in causing climate change since before the year 2000; (10) the fossil fuel industry must now increase their contribution to government expenditures to protect the Nation from climate disaster; and (11) this Act and assessments under the amendments made by this Act are not intended— (A) to be a determination of fault; or (B) to have any impact on the ability of any person or other government to hold polluters accountable for harms caused.
3. Tax relating to current stock of greenhouse gas emissions Read Opens in new tab
Summary AI
The section introduces a new tax on certain large fossil fuel companies based on their carbon dioxide emissions since 2000. Companies responsible for more than 1,000,000,000 metric tons of emissions must pay a share of a trillion-dollar tax, which can be paid in nine annual installments, and the law defines key terms and responsibilities for calculating and paying this tax.
Money References
- “(b) Determination of amount.— “(1) IN GENERAL.—With respect to each assessable person, the tax under this section shall be equal to an amount that bears the same ratio to $1,000,000,000,000 as— “(A) the assessable person's applicable share of covered carbon dioxide emissions taken into account under this section, bears to “(B) the aggregate applicable shares of covered carbon dioxide emissions of all assessable persons taken into account under this section.
4691. Imposition of tax Read Opens in new tab
Summary AI
This section imposes a tax on certain businesses responsible for large carbon dioxide emissions, requiring them to pay a share of a $1 trillion tax based on their emissions relative to the total emissions of all such businesses. It specifies how to calculate this amount, outlines the types of businesses affected, and allows for the possibility of paying the tax in installments.
Money References
- — (1) IN GENERAL.—With respect to each assessable person, the tax under this section shall be equal to an amount that bears the same ratio to $1,000,000,000,000 as— (A) the assessable person's applicable share of covered carbon dioxide emissions taken into account under this section, bears to (B) the aggregate applicable shares of covered carbon dioxide emissions of all assessable persons taken into account under this section.
4. Polluter Pays Climate Change Fund Read Opens in new tab
Summary AI
The Polluter Pays Climate Change Fund is established to support various initiatives aimed at addressing climate change impacts, including disaster recovery, infrastructure resilience, and public health. The fund emphasizes investment in environmental justice communities, with specific funds allocated to the Federal Emergency Management Agency and Clean Air Act grants, and priority given to impactful climate projects.
Money References
- (B) SPECIFIED USES.—In carrying out subparagraph (A) each fiscal year and to the greatest extent practicable, the Secretary shall use amounts in the Fund— (i) to provide funding of not less than $15,000,000,000 to the Federal Emergency Management Agency for response and resilience programs of the Federal Emergency Management Agency to address climate-related disasters, including hurricanes, flooding, extreme heat, and wildfires, of which not less than $3,000,000,000 shall be used to carry out the Building Resilient Infrastructure and Communities program under section 203 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5133); and (ii) to provide funding of not less than $6,000,000,000 for grants and technical assistance under section 138 of the Clean Air Act (42 U.S.C. 7438), subject to the condition that the Administrator may determine the appropriate amounts to be used for those grants and that technical assistance.
9512. Polluters Pay Climate Fund Read Opens in new tab
Summary AI
The establishment of the "Polluters Pay Climate Fund" creates a trust fund in the U.S. Treasury, where money from taxes related to polluting activities is collected and then used, as determined by Congress, to fund activities related to a specific climate act.
5. Availability of remedies Read Opens in new tab
Summary AI
This section clarifies that the Act does not exempt anyone from existing legal responsibilities and explicitly states that it does not interfere with claims related to climate change under state or local laws. It ensures that funds from the Polluter Pays Climate Change Fund cannot be used to influence court cases related to climate change or to offset damages awarded by such cases.
6. Non-preemption of authorities Read Opens in new tab
Summary AI
The section ensures that the Act does not override or replace any existing state or local laws or regulations related to greenhouse gas emissions. It clarifies that states and localities can continue to set their own standards, monitor emissions, support climate initiatives, and conduct investigations.