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S 2338

"Polluters Pay to Make New Jersey More Affordable Act"; imposes cost recovery payments on certain fossil fuel companies for funds needed for climate change adaptation; establishes program in DEP to collect and oversee distribution of funds.*

2026-2027 Regular Session Introduced by Renee Burgess and 17 co-sponsors

New Jersey creates the CARA Fund to finance climate adaptation using payments from fossil fuel companies, overseen by a new state Trust for 20-year resilience projects.

Reported from Senate Committee with Amendments, 2nd Reading
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WeVote Research Nonpartisan
Bill Summary · S 2338

Purpose and overall aim

  • Establishes a new funding program in the New Jersey Department of Environmental Protection (DEP) to finance climate change adaptation, resiliency, and affordability efforts.
  • Funded by cost recovery payments collected from certain fossil fuel companies identified as “responsible parties” for greenhouse gas emissions.
  • Name of program: Climate Adaptation, Resiliency, and Affordability Program (CARA program); creates a dedicated CARA fund and a Climate Adaptation, Resiliency, and Affordability Trust to oversee funds and priorities.

Key provisions and changes

  • Definition of “responsible party”
    • An entity or successor in interest that, between Jan 1, 1995 and Dec 31, 2024, was engaged in extracting fossil fuels and has attributable covered greenhouse gas emissions exceeding 1,000,000,000 metric tons.
  • Cost recovery and funding
    • DEP must develop an assessment of covered emissions attributable to each responsible party within six months of enactment.
    • DEP will issue cost recovery demands to identified responsible parties, proportional to their attributable emissions.
    • Total potential collections: up to $50 billion.
    • Payments may be made in annual installments over a 20-year period.
    • Debtors can request reconsideration of their demand; a formal process and timelines are established for reconsideration.
  • Fund administration and oversight
    • Revenues deposited into the CARA Fund, housed in the Department of the Treasury.
    • Establishment of the New Jersey Climate Adaptation, Resiliency, and Affordability Trust (the “trust”) in the Treasury (not a standalone fund, but a trust with financial oversight responsibilities).
    • Trust composition: mix of ex officio state government members and public appointees by the Governor, Senate President, and Assembly Speaker.
    • Trust duties: oversee disbursement of CARA funds and develop a Climate Adaptation Master Plan (20-year horizon).
  • Allocation and project funding
    • Annual distributions from the CARA Fund to sub-funds in several state agencies:
    • Department of Transportation (DOT)
    • Board of Public Utilities (BPU)
    • DEP
    • Department of Health
    • Department of Education
    • Department of Agriculture
    • Department of Community Affairs
    • Department of Labor and Workforce Development
    • Agencies must submit climate adaptation project recommendations twice per year; the Trust reviews and forwards a annual list to the Legislature for approval via an annual appropriations act.
  • Eligible projects and activities
    • Flood protection, home buyouts, stormwater upgrades, infrastructure hardening (roads, bridges, rail, transit), extreme weather preparedness and recovery, public health initiatives, infrastructure relocation/elevation/retrofits (e.g., sewage plants), tree planting, building retrofits (including energy-efficient systems), distributed renewables and storage, energy grid improvements, ecological and agricultural resilience (water, wetlands, forests, fisheries, etc.), and workforce development for climate projects.
  • Project labor standards
    • Public entities funding projects from CARA must apply project labor standards.
    • Any project receiving at least $5 million from CARA funds must be developed and constructed under a project labor agreement, consistent with state law governing labor arrangements.
  • Accountability and reporting
    • DEP must publish annual evaluations of the CARA program starting in the second calendar year after enactment.

Who and what is affected

  • Entities identified as “responsible parties” (fossil fuel extractors with >1 billion metric tons of covered GHG emissions between 1995-2024) will face cost recovery demands.
  • State agencies and departments listed above will administer and implement funded projects through their programs and capital investments.
  • The Governor, Legislature, and Trust members oversee fund allocation and project prioritization.
  • Public and private sector projects that involve climate adaptation and resilience will be affected by the funding and labor standards requirements.

Procedural and timeline aspects

  • Assessment of responsible parties’ emissions due within six months of enactment.
  • Cost recovery demands issued after assessment; payments can be stretched over 20 years.
  • Reconsideration process for disputed demands established in the bill.
  • Annual reporting obligations for agencies and annual evaluations of CARA performance begin in the second year after enactment.
  • The Trust and annual appropriation process require an annual legislative act approving expenditures for climate projects.

Potential implications

  • Creates a large, centralized funding stream for climate adaptation with long-term debt-like payment structure for responsible parties.
  • Aims to accelerate deployment of resilience infrastructure and related programs across multiple sectors (transportation, energy, health, education, environment, housing, and workforce development).
  • Introduces project labor agreements for larger CARA-funded projects, potentially impacting contracting practices and labor costs.
  • Establishes a formal state-level governance framework (Trust) to guide 20-year adaptation planning and ongoing project prioritization.

Compiled from official sources — confirm details with the bill’s official record.

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