Fee Updates

• CARB will issue invoices for both SB 253 and SB 261 after the initial compliance deadlines on September 10, 2026.

Scoping Definitions

• Revenue: CARB has reverted to the state Revenue & Tax Code definition. Revenue will be defined as “gross receipts” per R&TC § 25120(f)(2).

• Doing Business in California: CARB will align this definition with an abridged version of R&TC § 23101. An entity must be (1) actively engaged in transactions for financial gain and (2) either: Organized or commercially domiciled in California; or Have in-state sales exceeding $735,019 (as defined in R&TC § 25120(e) or (f)).

Exemptions

• CARB is proposing to extend the insurance company exemption from SB 261 to SB 253.

• Entities that do not report gross receipts—such as certain holding companies — would not qualify as in scope under the revenue test.

SB 253 Implementation Updates

• Due to delays in rulemaking, the first reporting deadline is now proposed for August 10, 2026; a company’s fiscal year-end will determine the data year for its 2026 submission.

• Limited assurance will not be required for the initial report.

Minor Updates to SB 261 Minimum Requirements

• As referenced in the workshop, CARB has posted an updated SB 261 reporting checklist. Entities subject to TCFD supplementary guidance (e.g., financial institutions, energy companies) will be expected to include those sector-specific disclosures in their SB 261-aligned reports. CARB also clarified expectations for companies still early in assessing climate-related risks, outlining what baseline information should be included to meet minimum requirements.

• CARB’s Public Docket — where companies will post a link to their disclosure—opened December 1, 2025, and, per CARB’s note during the workshop, will remain open through July 1, 2026.

Update on Pending Litigation and Enforcement Implications

• The Ninth Circuit granted a temporary pause to the implementation of SB 261 on Tuesday, 11/18, pending the outcome of an appeal. Oral arguments are expected to be heard in the case on January 9, 2026.

• On 12/1, CARB issued an enforcement advisory, noting that it will not enforce the statute against covered entities for failing to post and submit reports by the January 1, 2026, statutory deadline. More guidance from CARB is expected, including an updated reporting deadline, following the resolution of the appeal.

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