M E M O R A N D U M

TO:                       Members of the Senate Environment and Energy Committee

FROM:                 Hilary Chebra, Director, Government Affairs, CCSNJ

RE:                        S2338 (McKeon/Smith/Mukherji)

The Chamber of Commerce Southern New Jersey (CCSNJ) respectfully opposes S2338, the “Polluters Pay to Make New Jersey More Affordable Act.”

While CCSNJ supports responsible investments in climate resilience and infrastructure, we remain deeply concerned that this legislation establishes an unprecedented retroactive liability framework that would impose billions of dollars in costs on businesses based on activities that were lawful, heavily regulated, and consistent with state and federal energy policies at the time they occurred.

The bill requires certain fossil fuel extraction companies to fund a $50 billion climate adaptation program based on emissions dating back to 1995. The legislation imposes strict liability without any finding of negligence, misconduct, or violation of law and seeks to assign financial responsibility for global greenhouse gas emissions based on historical production levels. This approach raises significant concerns regarding fairness, due process, and legal predictability, all of which are essential to maintaining a stable business climate and encouraging long-term investment in New Jersey.

CCSNJ is also concerned by the extraordinary financial scope of the legislation. In addition to assessing up to $50 billion in cost recovery demands, the bill authorizes the issuance of up to $50 billion in bonds backed by those anticipated revenues. The creation of a new trust authority, multiple dedicated funds, and a complex administrative structure introduces substantial uncertainty regarding program implementation, long-term fiscal impacts, and the ultimate burden on businesses, consumers, and taxpayers.

Although the legislation asserts that only large fossil fuel producers will bear these costs, economic reality suggests otherwise. Companies facing multibillion-dollar assessments will inevitably seek to recover costs through higher prices for fuel, energy, transportation, and consumer goods. New Jersey residents, employers, manufacturers, and small businesses, many of whom are already struggling with some of the highest energy costs in the nation, are likely to experience the downstream effects of these increased costs.

The bill also creates significant litigation risk. Establishing a direct causal relationship between emissions associated with specific companies and particular climate-related impacts occurring in New Jersey involves complex scientific, economic, and legal questions that remain highly contested. As similar measures are challenged in courts across the country, this legislation is likely to generate years of costly litigation and uncertainty before any meaningful revenues become available for climate adaptation projects.

Furthermore, New Jersey's energy sector remains a critical component of the State’s economy. Energy infrastructure, refining operations, and related industries support thousands of family-sustaining jobs, contribute billions of dollars in economic activity, and generate substantial state and local tax revenues. Policies that create significant legal and financial exposure for these industries risk discouraging future investment and undermining the State’s competitiveness at a time when affordability and economic growth remain top priorities.

CCSNJ believes New Jersey can continue advancing climate resilience goals through practical, forward-looking strategies that encourage innovation, infrastructure investment, energy efficiency, public-private partnerships, and market-based solutions. These approaches can strengthen communities and improve resiliency without imposing retroactive liability, creating legal uncertainty, or increasing costs for businesses and consumers.

For these reasons, CCSNJ respectfully urges the Committee to vote no on S2338.