WASHINGTON >> The sprawling tax and policy bill that passed Congress repeals a multibillion-dollar green bank for financing climate-friendly projects, and the Trump administration should be allowed to freeze its funding and cancel related contracts with nonprofits, federal officials said in a court filing.

Climate United Fund and other nonprofits in March sued the Environmental Protection Agency, its administrator Lee Zeldin and Citibank, which held the program’s money. The lawsuit argued the defendants had illegally denied the groups access to billions awarded last year through the Greenhouse Gas Reduction Fund, commonly referred to as a “green bank.” The program was created by the 2022 Inflation Reduction Act.

But the bill that passed Congress on Thursday would repeal the part of the 2022 law that established the green bank and rescind money that hadn’t already been obligated to its recipients.

The EPA said the bill should hand them a victory in their court fight being heard by a federal appeals court in Washington. Now that Congress has rescinded funding, an earlier federal judge’s decision forcing the EPA to release money to the groups should be reversed, the agency said in its Thursday court filing.

Climate United Fund disagrees. It acknowledges that the bill in Congress is a “significant policy setback” but argues that most of the money had been disbursed and is unaffected by the bill. If the EPA wanted to take the money back, there’s a different process the agency would need to follow.

“Our funds have already been obligated and disbursed. Any effort to claim otherwise is simply a lie to justify illegal attempts to claw back funds intended to benefit communities across the country,” CEO Beth Bafford said in a statement.

According to the EPA, when the agency terminated the grants the funds “became unobligated.”

“Grantees have desperately performed legal gymnastics to hold tens of billions of taxpayer dollars hostage. In the passage of the One Big Beautiful Bill, Congress made their intent crystal clear in repealing the program entirely and returning those billions in unobligated funds to the U.S. Treasury,” EPA spokesperson Brigit Hirsch said in a statement.

The green bank’s goals run counter to the Trump administration’s opposition to policies that address climate change and its embrace of fossil fuels. Zeldin quickly made the bank a target.