Sponsors (16)
The bill shifts bankruptcy priorities and expands trustee powers to ensure workers are paid and sites are remediated—holding owners more accountable—but does so at the expense of creditor recoveries, increased legal and administrative burdens, and potential market and investment reactions in the energy sector.
Workers and low-income employees of insolvent fossil‑fuel companies are more likely to receive unpaid wages and benefits because the bill elevates payroll claims and allows recovery of executive compensation and insider transfers to fund those obligations.
State and local governments and taxpayers are more likely to get funds for environmental reclamation because reclamation costs and governmental reclamation claims are treated as necessary expenses and prioritized against secured property.
Private equity, parent companies, and hedge funds can be held financially accountable when an estate lacks funds, creating stronger incentives for more responsible ownership and reducing the chance that cleanup and wages become uncompensated public burdens.
Secured and unsecured creditors (including pensioners, suppliers, and lenders) may receive lower recoveries because property must first cover reclamation and elevated wage claims, which could raise borrowing costs or reduce credit availability for energy projects.
The bill increases bankruptcy complexity, litigation risk, and administration costs (longer trustee obligations, more contested claims, and new priority rules), which can delay case resolution, slow cleanups, and raise costs passed to taxpayers or consumers.
Imposing joint‑and‑several liability on private equity, parent companies, and hedge funds increases legal and financial exposure for investors and could deter investment in the sector or lead to higher costs for customers and communities reliant on that capital.
Based on analysis of 8 sections of legislative text.
Makes environmental bonds and reclamation costs non-dischargeable, raises their priority in bankruptcy, extends clawbacks to 10 years for fossil-fuel firms, and bars abandonment and certain lease transfers.
Official title: To amend title 11 of the United States Code to ensure oil, gas, and coal companies that are debtors in bankruptcy fulfill environmental reclamation obligations.
Introduced May 26, 2026 by Dave Min · Last progress May 26, 2026
Makes debts and cleanup costs tied to fossil fuel operations much harder to shed in bankruptcy and raises the priority of environmental reclamation and worker claims. It expands bankruptcy definitions to identify "fossil fuel companies," bars abandoning fossil-fuel assets as "burdensome," extends the look-back window for clawbacks to 10 years for covered transfers, forbids post-enactment Interior leases from being transferred after a bankruptcy filing, and makes environmental bonds and full reclamation obligations non-dischargeable. The bill also lets courts recover recent executive pay and holds private equity/owners strictly liable for unpaid wages and reclamation claims when estate funds are insufficient.