# The Polluters Pay Climate Fund Act: What It Actually Does

This bill creates a one-time tax on major fossil fuel companies to fund climate disaster recovery and resilience projects. Specifically, it requires large oil, coal, and natural gas companies to pay a total of $1 trillion into a new federal fund by September 2026. The amount each company pays depends on how much carbon dioxide their operations released into the atmosphere from 2000 to 2023. Companies can spread their payments over nine years if they choose, paying 20% upfront and then 10% annually for the next eight years.

The tax only applies to companies responsible for more than one billion metric tons of carbon dioxide emissions during that 24-year period—essentially targeting the largest fossil fuel producers. The bill specifically notes this is not a determination of fault or liability; it's simply a way to make the industry contribute to addressing the climate damage their products have caused. Companies cannot deduct this tax as a business expense, meaning they'll bear the full cost rather than passing it to taxpayers through tax write-offs.

The $1 trillion collected goes into the "Polluters Pay Climate Fund," which the federal government would use for climate-related disaster response, infrastructure resilience, and adaptation projects. At least $15 billion annually must go to the Federal Emergency Management Agency for disaster recovery and resilience programs, with another $6 billion for environmental health grants. Importantly, 40% of the fund's spending must benefit environmental justice communities—neighborhoods with significant populations of color, low-income residents, or Indigenous peoples that face disproportionate climate impacts. The remaining funds would support projects like strengthening power grids, protecting drinking water systems, improving farming resilience, and managing wildfires.

The bill explicitly preserves the right of states, communities, and individuals to pursue their own lawsuits against fossil fuel companies for climate-related damages. Money from this fund cannot be used as evidence in those lawsuits or to reduce damages awarded by courts, meaning this tax doesn't shield companies from other legal accountability for climate harms.