The Climate Superfund Act, a bill that would retroactively impose $50 billion in penalties on New Jersey companies for providing fossil fuels, is not expected to advance in the current legislative session. However, it may return under a new name when the 222nd legislative session begins.
The legislation faces significant legal challenges. Elissa Frank, president of the New Jersey Civil Justice Institute, outlined three main obstacles in testimony before the Senate Budget and Appropriations Committee. She said the bill conflicts with federal law, specifically the Clean Air Act.
“Congress enacted the Clean Air Act to create a comprehensive national framework for regulating greenhouse gas emissions, delegating primary authority to the United States Environmental Protection Agency,” Frank told lawmakers on Thursday.
“States may play a cooperative role, but they do not have the authority to regulate out-of-state emissions or impose liability for global atmospheric conditions. This bill attempts to do just that, which creates a direct conflict with federal law.”
Frank also raised concerns about due process because of the bill’s retroactive penalties.
“The bill retroactively penalizes businesses for activities that federal and state governments not only permitted but affirmatively encouraged for decades as part of national energy policy,” Frank said.
“Imposing massive liability now, after the fact, on a narrow subset of New Jersey companies upends settled expectations and does so in an arbitrary and disproportionate manner, particularly while ignoring the vast majority of global greenhouse gas emitters.”
According to data from the U.S. Energy Information Administration cited by Frank, New Jersey accounts for only 1.7% of U.S. greenhouse gas emissions and 0.3% globally.
Frank further argued that the measure violates the interstate commerce clause of the U.S. Constitution by attempting to regulate activities outside New Jersey’s borders.
“By imposing liability for lawful extraction and refining activities that occurred outside of the state of New Jersey, the bill attempts to regulate conduct beyond the state’s borders in violation of the U.S. Commerce Clause,” she said.
“Greenhouse gas emissions are global by nature, and this bill improperly assigns responsibility for worldwide emissions to a handful of in-state businesses.”
She added that her organization supports “a fair, predictable, and efficient civil justice system that supports investment, job creation, and critically, affordability for…New Jersey families and businesses.”
On Thursday, sponsors renamed the proposal as “Polluters Pay to Make New Jersey Affordable Act.” According to Frank’s written testimony: “This bill is legally deficient, constitutionally suspect, and guaranteed to embroil our courts in prolonged and costly litigation, diverting judicial resources and undermining the predictability of New Jersey’s civil justice system.”
Similar laws have been passed in New York and Vermont; both states face lawsuits from federal authorities seeking to block enforcement on grounds they overreach legal boundaries. The U.S. Chamber of Commerce and American Petroleum Institute also sued Vermont after it enacted its climate Superfund law despite not producing or refining fossil fuels within its borders.
Decisions on these lawsuits are expected in early 2026. Other states such as California, New Hampshire, Virginia—along with Massachusetts, Maryland, Connecticut, Hawaii, Oregon Rhode Island and Tennessee—have considered but not advanced similar measures as they await outcomes from pending cases.
NJBIA Deputy Chief Government Affairs Officer Ray Cantor commented: “Each state’s case has…unique circumstances,” adding: “But what’s important to remember is that for all ideological grandstanding or costly cash grabs…the validity of these laws will come down to courts.”
“And we do expect they will have a long way to go to pass legal muster.”
The New Jersey Business & Industry Association (NJBIA) represents private-sector employers across industries such as manufacturing retail wholesale contracting services throughout New Jersey; it promotes business success through advocacy information cost-saving benefits partnerships among businesses government academia (official website). Michele Siekerka serves as NJBIA president CEO (official website). The association operates from its headquarters at 10 West Lafayette Street Trenton NJ (official website).
