In this February post, I wrote about a bill, SB 261, that would would require businesses to prepare and submit climate-related financial risk reports.  The bill would apply to any corporation or other business entity formed under the laws of California, the laws of any other state of the United States or the District of Columbia, or under an act of the Congress of the United States with total annual revenues in excess of $500,000,000 and that does business in California.  Oddly,  businesses formed under the laws of other countries would not be covered even if they do business in California.  The bill also does not define what constitutes doing business in California.  The bill has passed both the Senate Environmental Quality and Judiciary Committees and is set to be heard by the Senate Appropriations Committee on Monday, May 8.

Because I had raised the question of whether the bill's requirements ran afoul of the Dormant Commerce  Clause, I was interested in the Judiciary Committee's analysis which flatly asserted "There is no facial dormant Commerce Clause issue here."  This assertion was based on the belief that the bill does not mandate differential treatment of in-state and out-of-state competing economic interests to the advantage of in-state interests.  However, courts will hold that even an even-handed law runs afoul of the Commerce Clause when the effect or purpose of the law is to burden interstate commerce.  Pike v. Bruce Church, 397 U.S. 137 (1970).   Last fall, in fact, the U.S. Supreme Court heard oral arguments on the constitutionality of Proposition 12 which prohibits the sale of certain pork products in California.  National Pork Producers Council v. Ross,  Docket No. 21-468.  A decision in that case could provide greater clarity with respect to the constitutionality of SB 261.

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