CLIMATE CHANGE SUPERFUND

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB2981

Introduced 1/27/2026, by Sen. Graciela Guzmán

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.1038 new

Creates the Climate Change Superfund Act. Creates the Illinois
Climate Change Superfund as a special fund in the State treasury. Requires
at least 40% of the Fund to be spent on projects that directly benefit
disadvantaged communities facing climate change impacts. Directs the
Environmental Protection Agency to adopt rules within one year, including
regarding the apportionment of liability for climate change for payments
into the Fund by responsible parties, regarding qualifying expenditures
from the Fund, and regarding an Illinois Climate Change Superfund Program.
Requires the Agency to establish procedures to challenge its
determinations of liability for climate change and provides for judicial
review under the Administrative Review Law. Makes findings. Defines terms.
Provides that the Act is severable. Makes conforming changes to the State
Finance Act.
LRB104 17321 BDA 30743 b

A BILL FOR

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1

AN ACT concerning safety.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 1.
Short title.
This Act may be cited as the
5
Climate Change Superfund Act.

6

Section 5.
Findings.
The General Assembly finds that:
7

(1) Climate alteration poses an extreme threat to the
8
public health, safety, and general welfare in the State.
9
Fossil fuels are by far the largest contributors to climate
10
change. The State must take action to adapt to the impacts of
11
climate change, including impacts from increasing
12
temperatures, extreme weather events, flooding, drought,
13
fragmenting ecosystems, disappearing native biodiversity,
14
exacerbated respiratory illnesses, damaged agricultural
15
outputs, and other climate-change-driven threats.
16

(2) Adaptation needs include, but are not limited to,
17
improving and expanding local flood control infrastructure to
18
reduce the impact of severe rainfall that is increasingly
19
common across Illinois; installing infrastructure in cities to
20
reduce severe urban heat events; building cooling facilities
21
in communities and on farms for livestock; upgrading drinking
22
water facilities and monitoring equipment to account for
23
changes in groundwater availability and quality; restoring and

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maintaining wetlands, grasslands, and other native ecosystems
2
to manage distortions in biodiversity; and distributing water,
3
medical resources, and other public health necessities in
4
large urban and isolated rural communities affected by climate
5
disasters.
6

(3) Scientific analyses attribute more than 70% of
7
post-1988 global greenhouse gas emissions to the world's 100
8
largest fossil fuel companies, underscoring their elevated
9
responsibility.
10

(4) Based on decades of research, it is now possible to
11
determine specific fossil fuel producing companies' share of
12
responsibility for greenhouse gases released into the
13
atmosphere over the last 50 years or more, making it possible
14
to assign liability to and require compensation from companies
15
commensurate with the emissions attributable to their fossil
16
fuel production during a given time period.
17

(5) This Act establishes a climate change adaptation cost
18
recovery program that will require large fossil fuel
19
producers, which have contributed significantly to the buildup
20
of greenhouse gases in the atmosphere, to bear a proportionate
21
share of the cost of infrastructure investments and other
22
expenses necessary for adaptation to the impacts of climate
23
change in Illinois. Large fossil fuel producers are readily
24
identifiable and economically well positioned to contribute to
25
the Illinois Climate Change Superfund.
26

(6) The obligation to pay under the program will be based

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on the producers' historic contributions to the accumulation
2
of the greenhouse gases that fuel climate change. The program
3
operates under a standard of strict liability because the
4
challenge associated with adapting to climate change presents
5
onerous costs that would otherwise be unfairly shouldered
6
predominantly by the State and its taxpayers. Responsible
7
parties, as defined in this Act, will be required to pay into
8
the Fund because their fossil fuel extraction and refining
9
played a significant role in causing the climate pollution
10
that now requires significant adaptation investments. This Act
11
is remedial in nature and is not punitive, seeking
12
compensation to address costs resulting from the past actions
13
of polluters. No finding of wrongdoing is required.
14

(7) The program will cover emissions associated with the
15
responsible parties' fossil fuel production from 2000 through
16
2024, a period during which the science of climate change was
17
well established, including the role of fossil fuels, and
18
robust data exist to allocate proportional responsibility.

19

Section 10.
Definitions.
20

"Agency" means the Illinois Environmental Protection
21
Agency.
22

"Annual payment date" means the date, as determined by the
23
Agency, by which a responsible party shall pay its cost
24
recovery demand.
25

"Cost recovery demand" means a charge assessed against a

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responsible party for cost recovery payments, as determined
2
under Section 20.
3

"Costs" means direct and indirect costs in
4
inflation-adjusted dollars to State, local, and tribal
5
governments and Illinois residents incurred and projected to
6
be incurred in the future to prepare for, prevent, adapt, or
7
respond to the damages and harms associated with the impacts
8
of covered fossil fuel emissions.
9

"Covered fossil fuel emissions" means, with respect to any
10
entity, the total quantity of greenhouse gases released into
11
the atmosphere at any time resulting from the use of fossil
12
fuels or petroleum products extracted or refined by such
13
entity during the covered period, expressed in metric tons of
14
carbon dioxide equivalent, including, but not limited to,
15
releases of greenhouse gases.
16

"Covered period" means the period that began January 1,
17
2000 and ended December 31, 2024.
18

"Fossil fuel" means coal, crude oil, petroleum products,
19
or fuel gases, or their byproducts.
20

"Fuel gas" includes, but is not limited to, methane,
21
natural gas, liquefied natural gas, and manufactured fuel gas.
22

"Fund" means the Illinois Climate Change Superfund
23
established under Section 15.
24

"Greenhouse gas" means carbon dioxide, methane, nitrous
25
oxide, hydrofluorocarbons, perfluorocarbons, sulfur
26
hexafluoride, and any other substance emitted into the air

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that may be reasonably anticipated to cause or contribute to
2
anthropogenic climate change.
3

"Notice of cost recovery demand" means a written or
4
electronic communication informing a responsible party of the
5
amount of cost recovery demand due, payable to the Fund.
6

"Petroleum products" means a liquid hydrocarbon at
7
atmospheric temperature and pressure that is the product of
8
the fractionation, distillation, or other refining or
9
processing of crude oil and that is used as, usable as, or may
10
be refined as, a fuel or fuel blendstock, including, but not
11
limited to, gasoline, diesel fuel, aviation fuel, bunker fuel,
12
and renewable fuels containing more than 5% petroleum
13
products.
14

"Program" means the Illinois Climate Change Superfund
15
Program established under Section 25.
16

"Qualifying expenditures" means expenditures for projects
17
and programs within the State in support of climate change
18
adaptation, including operational and maintenance expenses,
19
and including both new projects and enhancement of existing
20
facilities, infrastructure, or other projects to adapt to the
21
existing and projected impacts from covered fossil fuel
22
emissions. "Qualifying expenditures" includes, but is not
23
limited to:
24

(1) expenditures for projects and programs that adapt
25

to climate change and climate change's impacts to State,
26

local, and tribal governments and Illinois residents, such

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as through building and infrastructure resilience;
2

(2) climate-resilient housing;
3

(3) green infrastructure enhancements to counter heat
4

island effects;
5

(4) relocation expenses for residents displaced by
6

acute weather phenomena or long-term changes in local
7

environmental conditions;
8

(5) water management infrastructure, such as water
9

mains, stormwater systems, and sewers;
10

(6) emergency response systems for water distribution
11

and emergency cooling stations;
12

(7) improvements to agricultural facilities to improve
13

crop and livestock durability to extreme weather; and
14

(8) ecosystem restoration and maintenance on public
15

lands.
16

"Qualifying expenditures" also includes reasonable
17
expenses associated with the administration of the Fund.
18
"Qualifying expenditures" shall be construed broadly and shall
19
include projects or programs that address climate change as a
20
contributing, even if not sole, factor for adaptation needs.
21
However, all qualifying expenditures must have a rational
22
nexus to localized impacts attributable in part to climate
23
change, and they must serve the goals identified in Section 5.
24

"Responsible party" means an entity (or a successor in
25
interest to such entity) that, during any part of the covered
26
period, was engaged in the trade or business of extracting

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fossil fuel or refining crude oil and is determined by the
2
Agency to be responsible for more than one billion tons of
3
covered fossil fuel emissions. "Responsible party" does not
4
include any person who lacks sufficient connection with the
5
State to satisfy the nexus requirements of the United States
6
Constitution.

7

Section 15.
Fund; report.
8

(a) The Illinois Climate Change Superfund is hereby
9
created as a special fund in the State treasury.
10

(b) Moneys in the Fund shall, subject to appropriation, be
11
used to implement the program under Section 25 and rules
12
adopted under Section 25, including qualifying expenditures,
13
and to reimburse any outstanding loan made from other funds
14
used to finance the initial costs of the Agency's activities
15
in implementing this Act. Moneys in the Fund shall not be
16
expended for any purposes not specified in this Act or rules
17
adopted under this Act.
18

(c) Moneys collected under Section 20 and rules adopted
19
under Section 20 shall be deposited into the Fund.
20

(d) Moneys in the Fund shall be expended on qualifying
21
expenditures in accordance with rules adopted by the Agency
22
under Section 25.
23

(e) Not less than 40% of the moneys must be expended for
24
projects and programs that directly benefit disadvantaged
25
communities, as defined by the Agency, facing climate change

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impacts.
2

(f) The Agency shall prepare and submit a report to the
3
General Assembly within 6 months of the effective date of this
4
Act to make recommendations regarding the size of the Fund
5
under this Section, following consideration of data analyzing
6
the costs to the State, including adaptation needs, from
7
fossil fuel production by responsible parties.

8

Section 20.
Apportionment of liability.
9

(a) Within one year of the effective date of this Act, the
10
Agency shall adopt rules for, at a minimum, the following
11
purposes, subject to the express conditions described in this
12
Section:
13

(1) adopting methodologies to identify responsible
14

parties and their applicable share of covered fossil fuel
15

emissions consistent with the provisions of this Act;
16

(2) registering entities that are responsible parties
17

under the Act;
18

(3) issuing notices of cost recovery demand to
19

responsible parties informing them of the cost recovery
20

demand amount, the method and location for payment of cost
21

recovery demands, the potential consequences of nonpayment
22

and late payment, and information regarding the rights of
23

parties to contest an assessment, with the following
24

requirements:
25

(A) with respect to each responsible party, the

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cost recovery demand shall be equal to an amount that
2

bears the same ratio to the Fund's overall size as the
3

responsible party's applicable share of covered fossil
4

fuel emissions bears to the aggregate applicable
5

shares of covered fossil fuel emissions of all
6

responsible parties;
7

(B) the applicable share of covered fossil fuel
8

emissions taken into account under this Section for
9

any responsible party shall be the amount of covered
10

fossil fuel emissions attributable to such responsible
11

party; and
12

(C) if an entity owns a minority interest in
13

another entity of 10% or more, the calculation of the
14

entity's applicable share of covered fossil fuel
15

emissions taken into account under this Section shall
16

include the applicable share of covered fossil fuel
17

emissions taken into account under this Section by the
18

entity in which the responsible party holds a minority
19

interest, multiplied by the percentage of the minority
20

interest held;
21

(4) accepting payments from, pursuing collection
22

efforts against, and negotiating settlements with
23

responsible parties, with the following requirements:
24

(A) payments may be made in annual installments
25

over the course of 5 years;
26

(B) each annual installment under subparagraph (A)

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must be equal, and, at a minimum, 20% of the amount
2

contained in the notice of cost recovery demand,
3

unless the responsible party has paid more than 80% of
4

that amount in previous installments; and
5

(C) for the annual installments under subparagraph
6

(A), a responsible party may opt to pay more than 20%
7

of the amount contained in the notice of cost recovery
8

demand at any time; and
9

(5) adopting procedures for identifying and selecting
10

projects and programs eligible to receive qualifying
11

expenditures, issuance of requests for proposals from
12

localities and not-for-profit and community organizations,
13

grants to private individuals, or other methods as
14

determined by the Agency, and for disbursing moneys from
15

the Fund for qualifying expenditures.
16

(b) The Agency shall hold at least 2 public hearings, one
17
in-person and one virtual, on proposed rules under this Act.
18

(c) Within 6 months of adopting the rules under this Act,
19
the Agency shall serve notices of cost recovery demand on each
20
responsible party.
21

(d) In determining the amount of covered fossil fuel
22
emissions attributable to any entity, the Agency shall use the
23
U.S. Environmental Protection Agency's Emissions Factors for
24
Greenhouse Gas Inventories as applied to the fossil fuel
25
volume data, as those factors existed on December 31, 2024.
26
Additionally:

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(1) In determining the amount of greenhouse gas
2

emissions attributable to any entity, the Agency may:
3

(A) require an entity to provide information to
4

the Agency related to past practices, production,
5

extraction, refining, emissions, or other historical
6

information about the entity necessary or appropriate
7

to enable the Agency to determine whether such entity
8

is a responsible party and, if so, the amount of such
9

responsible party's covered fossil fuel emissions; and
10

(B) use any pertinent financial information
11

provided by the entity to the Department of Revenue or
12

the United States Department of the Treasury.
13

(e) Each responsible party shall be strictly liable to the
14
State of Illinois for the amount contained in its notice of
15
cost recovery demand. Each responsible party shall make
16
compensatory payments to the State of Illinois.
17

(f) The amounts listed in the notice of cost recovery
18
demand shall accrue interest at a rate equal to the rate of
19
inflation for each fiscal year, as measured by the Consumer
20
Price Index for All Urban Consumers as published by the United
21
States Department of Labor for the previous year.
22

(g) The unpaid balance of all remaining installments shall
23
become due immediately if any of the following occurs:
24

(1) the responsible party fails to pay any installment
25

by the due date under this Act;
26

(2) there is a liquidation or sale of substantially

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all the assets of the responsible party; or
2

(3) the responsible party ceases to do business.
3

(h) Payment of the cost recovery demand may be stayed by
4
the Agency or a court pending administrative or judicial
5
resolution, as applicable, of a challenge filed under Section
6
30. While a cost recovery demand is stayed, it will continue to
7
accrue interest.
8

(i) Liability under this Act is retroactive for the
9
covered period.
10

(j) The Agency, the Department of Revenue, and the
11
Attorney General are hereby authorized to implement and
12
enforce the provisions of this Act.

13

Section 25.
Illinois Climate Change Superfund Program;
14
projects to be funded; criteria for eligible projects; rules.
15
Within one year of the effective date of this Act, the Agency
16
shall adopt rules to implement and administer this Act,
17
including to establish an Illinois Climate Change Superfund
18
Program that creates a procedure for acceptance,
19
consideration, and enactment of proposals from the public for
20
qualifying expenditures throughout the State of Illinois. The
21
Agency shall consider submissions from the public and evaluate
22
those submissions based on their eligibility for funding under
23
the program and their potential to assist with addressing the
24
health, safety, and general welfare challenges posed by
25
climate change in Illinois.

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Section 30.
Appeals process.
2

(a) The Agency shall establish procedures for an entity to
3
challenge its designation as a responsible party under this
4
Act or the amount of its liability relative to other entities,
5
as determined by reference to its overall fiscal year 2025
6
profits.
7

(b) A request for reconsideration shall state the grounds
8
for the request and include supporting documentation. The
9
Agency shall issue a subsequent notice of cost recovery demand
10
or a retraction. It shall be within the Agency's sole
11
discretion to determine whether a further administrative
12
appellate process will be provided. If no further
13
administrative appellate process is provided, the Agency's
14
subsequent notice of cost recovery demand or retraction shall
15
constitute final agency action.
16

(c) A responsible party may seek judicial review of a
17
determination made by the Agency under this Section under the
18
Administrative Review Law.
19

(d) A responsible party may not seek judicial review of
20
its liability or of any other determination made by the Agency
21
under this Act under the Administrative Review Law unless it
22
has first exhausted all administrative review opportunities
23
before the Agency.

24

Section 35.
Miscellaneous provisions.
This Act does not

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regulate emissions or restrict responsible parties from future
2
extraction, production, refining, combustion, or sale of
3
fossil fuels, and does not seek to punish responsible parties.

4

Section 40.
State preemption.
This Act does not:
5

(1) relieve the liability of an entity for damages
6

resulting from climate change, as provided by law;
7

(2) abrogate the authority of home rule jurisdictions
8

to tax, fine, restrict, or otherwise regulate activities
9

of responsible parties, to the extent otherwise permitted
10

by existing State and federal law;
11

(3) preempt, displace, or restrict any rights or
12

remedies of a person, the State of Illinois, states other
13

than Illinois, units of local government within or outside
14

Illinois, or tribal governments under law relating to a
15

past, present, or future allegation of any of the
16

following:
17

(A) deception concerning the effects of fossil
18

fuels on climate change;
19

(B) damage or injury resulting from the role of
20

fossil fuels in contributing to climate change; or
21

(C) failure to avoid damage or injury related to
22

climate change, including claims for nuisance,
23

trespass, battery, design defect, negligence, failure
24

to warn, or deceptive or unfair practices and claims
25

for injunctive, declaratory, monetary, or other

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relief; or
2

(4) preempt or supersede any State law or rule or
3

local ordinance, regulation, policy, or program,
4

including, but not limited to, those that do any of the
5

following:
6

(A) limit, set, or enforce standards for emissions
7

of greenhouse gases;
8

(B) monitor, report, or keep records of emissions
9

of greenhouse gases;
10

(C) collect revenue through fees or levy taxes; or
11

(D) conduct or support investigations.

12

Section 97.
Severability.
The provisions of this Act are
13
severable under Section 1.31 of the Statute on Statutes.

14

Section 900.
The State Finance Act is amended by adding
15
Section 5.1038 as follows:

16

(30 ILCS 105/5.1038 new)
17

Sec. 5.1038.
The Illinois Climate Change Superfund.

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