What does Preamble of Ending Fossil Fuel Bailouts Act of 2026 do?

This bill proposes to amend title 11 of the United States Code. The stated purpose is to ensure oil, gas, and coal companies facing bankruptcy fulfill their environmental reclamation obligations.

What does SHORT TITLE. of Ending Fossil Fuel Bailouts Act of 2026 do?

This bill is formally titled the Ending Fossil Fuel Bailouts Act of 2026.

What does DEFINITIONS. of Ending Fossil Fuel Bailouts Act of 2026 do?

This section amends Section 101 of Title 11 of the United States Code. It defines 'coal' as the term is defined in section 2 of chapter 1156 of the Act of August 31, 1954. It defines 'executive officer' with respect to a fossil fuel company as including the president, officers in charge of principal business units, officers performing policy-making functions, or individuals performing similar functions. It defines 'fossil fuel company' as an entity engaged in the exploration, production, refinement, or distribution of oil, gas, coal, or derivatives for profit. It defines 'gas' as natural gas as defined in section 2(1) of the Natural Gas Policy Act of 1978. It defines 'oil' as the term is given in section 311(a)(1) of the Federal Water Pollution Control Act. Paragraphs (40A) and (40B) are redesignated as (40B) and (40C) respectively.

What does PRIORITIZATION OF EXPENSES. of Ending Fossil Fuel Bailouts Act of 2026 do?

This section amends Title 11 of the United States Code, specifically sections 506 and 507, to address the prioritization of expenses in bankruptcy proceedings involving fossil fuel companies. Section 506 is amended to allow trustees to consider accumulated and projected reclamation costs associated with fossil fuel operations as necessary expenses for preserving or disposing of property securing an allowed secured claim. Section 507 is amended to establish a priority order for unsecured claims against fossil fuel companies, prioritizing wages and reclamation costs. Reclamation costs are prioritized in a specific order, beginning with unfulfilled environmental bond obligations and then considering environmental requirements and penalties under various federal and state environmental laws. If the estate lacks sufficient funds to cover prioritized claims, the court may recover compensation from executive officers and impose joint and several liability on private equity firms, parent companies, and hedge funds. The listed environmental laws include the Federal Water Pollution Control Act, the Clean Air Act, the Comprehensive Environmental Response, Compensation, and Liability Act, the Endangered Species Act, the Surface Mining Control and Reclamation Act, the Outer Continental Shelf Lands Act, the Mineral Leasing Act, and the Safe Drinking Water Act.

What does LIMITATIONS ON DISCHARGEABILITY. of Ending Fossil Fuel Bailouts Act of 2026 do?

This section amends Section 523(a) of Title 11 of the United States Code, which pertains to dischargeability in bankruptcy. It strikes 'or' at the end of paragraph (19) and replaces the period with a semicolon at the end of paragraph (20). It adds a new paragraph (21) to exclude environmental bonds from dischargeability. It adds a new paragraph (22) to exclude accumulated and projected reclamation costs associated with fossil fuel operations and retirement of assets from dischargeability. These reclamation costs must be pursuant to applicable federal, state, and local laws and reclamation requirements. The listed federal laws include the Federal Water Pollution Control Act, the Clean Air Act, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Endangered Species Act of 1973, the Surface Mining Control and Reclamation Act of 1977, the Outer Continental Shelf Lands Act, the Mineral Leasing Act, the Safe Drinking Water Act, and any similar state environmental laws.

What does PROHIBITION ON ABANDONMENT OF FOSSIL FUEL ASSETS. of Ending Fossil Fuel Bailouts Act of 2026 do?

This section amends Section 554 of Title 11 of the United States Code. The amendment prohibits the abandonment of property as burdensome to the estate if that property could be used for fossil fuel activities. Fossil fuel activities include exploration, production, refinement, or distribution of oil, gas, coal, or their derivatives.

What does EXTENSION TO LOOK-BACK PERIOD FOR FRAUDULENT TRANSFERS AND of Ending Fossil Fuel Bailouts Act of 2026 do?

This section amends Section 548(a) of Title 11 of the United States Code. The amendment modifies language regarding the trustee's authority. It adds a provision allowing the trustee to avoid transfers or obligations made by a fossil fuel company within 10 years before filing a petition. This avoidance applies if the debtor acted pursuant to specific subparagraphs (A) and (B) of paragraph (1). The avoidance power extends to transfers to or for the benefit of an insider under an employment contract.

What does LIMITATION ON TRANSFER OF CERTAIN LEASES. of Ending Fossil Fuel Bailouts Act of 2026 do?

This section defines 'covered lease' as an oil, gas, or coal lease issued under the Mineral Leasing Act or a lease issued under the Outer Continental Shelf Lands Act. The 'Secretary' is defined as the Secretary of the Interior. The Secretary must include a provision in each covered lease issued after the Act's enactment. This provision prohibits a leaseholder from transferring a covered lease if the lessee has filed for bankruptcy under Title 11 of the United States Code.

What does EFFECTIVE DATE; APPLICATION OF AMENDMENTS. of Ending Fossil Fuel Bailouts Act of 2026 do?

This Act and its amendments generally take effect on the date of enactment. The amendments apply only to cases commenced under title 11 of the United States Code on or after the date of enactment.

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Ending Fossil Fuel Bailouts Act of 2026

Last updated: 5/26/2026 · Introduced: 5/26/2026

Author: Dave Min (D-CA)

TL;DR (AI)

This bill prioritizes environmental reclamation costs, including unfulfilled bond obligations and penalties under federal and state environmental laws, over other unsecured claims in bankruptcy proceedings for fossil fuel companies.
The bill prevents fossil fuel companies from discharging environmental bonds and accumulated/projected reclamation costs associated with their operations in bankruptcy.
It allows courts to hold executive officers and private equity firms liable for insufficient funds to cover prioritized claims like reclamation costs.
The bill prohibits fossil fuel companies from abandoning property that could be used for oil, gas, or coal activities during bankruptcy.
This legislation extends the period for trustees to avoid fraudulent transfers by fossil fuel companies to 10 years before filing for bankruptcy, including transfers related to employment contracts.

119th Congressin committeeOfficial page

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