It’s crunch time for the activists and Democratic lawmakers pushing New Jersey’s climate superfund bill – flawed legislation that would target the American energy industry with a multi-billion dollar retroactive tax for historical emissions.
As the deadline looms for legislation to pass out of committees, the New Jersey State Legislature’s Office of Legislative Services published its fiscal estimate on the Assembly’s version of the bill, A 3735, and explicitly stated it cannot quantify the revenue and expenditure increases that may result from the bill’s enactment. It also warned of the potential for “non-trivial legal costs” if the state has to defend the legislation in court.
Mired in Uncertainty
The Office of Legislative Services determined that they lacked the “empirical basis to quantify the State revenue and expenditure increases” that would result from the legislation, in part citing “the State’s legal ability to collect the cost recovery demands is subject to significant uncertainty.”
This uncertainty around the bill significantly undermines the claims of supporters that it would raise $50 billion for “climate resilience projects,” and shows the legislation has been rushed through the legislative process and has not be well developed.
The report further warns that New York and Vermont’s superfund laws are facing several legal challenges that New Jersey would likely encounter:
“Similar laws enacted in Vermont and New York in 2024 are currently facing legal challenges from other states, industry groups, and, as of May 2025, the federal government. It would be overly speculative for the OLS to forecast the outcomes of these lawsuits and the extent to which decisions by competent courts might bar, limit, or delay the implementation of New Jersey’s Climate Adaptation, Resiliency, and Affordability Program.” [emphasis added]
The Office warned that if New Jersey’s superfund bill faces similar litigation, it could lead to “non-trivial legal costs” that could potentially cost taxpayers millions of dollars.
Follow the Money
While the full fiscal impact on the state remains unclear, the unjust burden it would place on the American energy industry and consumer is not.
Assemblyman Jay Webber (R) didn’t mince words during an Appropriations Committee hearing earlier this week, warning that the legislation could put energy companies on the hook for tens of billions in retroactive taxes for energy production that New Jersey and U.S. politicians have encouraged and consumed:
“To demonize a handful of companies who have for years and decades, offered products that you’ve asked for, that you’ve bought, that you’ve used, that have made us healthier, wealthier, more educated, and more successful as a society.”
“And now you want to turn around and retroactively tax them for that? Shame on you?”
Webber further stated that the bill isn’t about building climate resiliency, but to bankroll lawmakers’ preferred projects:
“And not just to take the money from them [energy companies], but take the money from them and direct it to special interests groups that you like, you control, and you want to benefit.”
Sure enough, a deep dive into the bill text reveals the carveouts. Out of the supposedly $50 billion tax that the bill would impose on energy companies, much of the funds would go toward traditional budget items:
Bottom Line: With the fate New Jersey’s climate superfund quickly approaching, the bill is drawing fire, including from Democrats.
The Office of Legislative Services is warning of potential “non-trivial legal costs”, and lawmakers are calling attention to fact that energy companies would be on the hook for tens of billions in retroactive taxes to bankroll lawmakers’ pet projects. Supportive lawmakers need to look closely at the costs and impacts of the superfund bill – before it’s too late.
