Last year, I reported on a California bill that would require large companies to report annually on their greenhouse gas emissions. Since then, the bill, SB 260, has been working its way through the legislature. Earlier this year, the bill was voted out of the Senate on a 23 to 7 vote (with 10 not voting).
The bill overcame another hurdle yesterday when it was voted out of the Assembly Natural Resources Committee. In reading the Committee’s bill analysis, I was surprised that there was no mention of patent constitutional infirmities, which I had earlier pointed out to the Committee’s staff:
By mandating disclosure, SB 260 constitutes “compelled speech” in violation of the First Amendment of the United States Constitution. Notably, SB 260 does not involve voluntary commercial advertising. Rumsfeld v. Forum for Academic and Institutional Rights, Inc., 547 U.S. 47, 61 (2006) (“Some of this Court’s leading First Amendment precedents have established the principle that freedom of speech prohibits the government from telling people what they must say.”).
SB 260 will also violate the “Dormant Commerce Clause” of the United States Constitution. It will impose significant burdens on large companies and their shareholders. More importantly, the bill will impose enormous burdens on smaller companies, including those with no contacts with California, because of the requirement that companies disclose Scope 3 emissions.
The bill will next be heard by the Assembly Committee on Judiciary, which might be expected to have a greater interest in constitutional questions.
The bill would apply to businesses that do business in California with annual revenues in excess of one billion dollars if they are formed under the laws of California or another state, the District of Columbia, or under an act of the Congress of the United States. Thus, SB 260 effectively exempts large businesses formed under the laws of other countries even if when do business in California.