SB 253 penalties and fees

What are the SB 253 penalties?

Health and Safety Code section 38532, added by SB 253, allows CARB to seek administrative penalties of up to 500,000 dollars in a reporting year from a reporting entity for non-filing, late filing or other failure to meet the requirements. CARB must consider all relevant circumstances, including the company's past and present compliance and whether, and when, it took good faith measures to comply. Penalties under SB 261 are separate and capped at 50,000 dollars a year, and that law is currently enjoined. See California SB 253 explained and California SB 261.

How will CARB enforce the first reports?

CARB's December 2024 enforcement notice said that for the first reports it would not penalise incomplete reporting by companies that make a good faith effort and retain their emissions data, using information they already had or were collecting. The first deadline, originally 10 August 2026, moved to 10 November 2026 after the Board withdrew its first regulation in June 2026 to clarify it; companies that were not collecting, or planning to collect, scope 1 and 2 data on 5 December 2024 can instead submit a signed statement saying so. Limited assurance is not required for 2026. CARB's intake platform opened on 1 September 2026, and reports and statements are made public. See who must report under SB 253.

How are scope 3 penalties limited?

The law contains two protections. Misstatements in scope 3 disclosures made with a reasonable basis and disclosed in good faith are not subject to penalties at all. And for reporting from 2027 to 2030, scope 3 penalties can be imposed only for failing to file. The protections reflect the reliance of scope 3 figures on estimates and supplier data, and they do not extend to scope 1 and 2. See SB 253 scope 3 from 2027.

SB 253 penalties and fees in practice: a group's exposure

A US group has five legal entities doing business in California. The revenue tests apply entity by entity, so the parent can file one consolidated report, but each entity in scope pays its own fee. Using CARB's August 2025 estimates of 3,106 dollars per entity for SB 253 and 1,403 dollars for SB 261:

SB 253 fees for the three largest entities come to about 9,318 dollars a year, and SB 261 adds about 5,612 dollars for four entities. The fees are small next to the penalty exposure: if the group failed to file without a good faith effort, each reporting entity could face up to 500,000 dollars. The group files on time with the data it has, documents its methods and any gaps, and pays the fee notices within 60 days. See organisational boundaries.

What fees does SB 253 charge?

The law requires CARB to set annual fees to cover its costs of administering the programme. CARB's regulation sets a flat fee per reporting entity, calculated by dividing the programme's estimated annual costs by the number of entities in scope and recalculated each year; a company subject to both laws pays both fees, and SB 261 fees are annual although its reports are every two years. The fee assessment date for 2026 moved to 10 December 2026, in line with the later reporting deadline, with payment due within 60 days. CARB's August 2025 workshop estimated about 3,106 dollars a year for SB 253 and 1,403 dollars for SB 261, and later preliminary estimates were in a similar range; the amounts were not final when this guide was checked.

What happens if fees are not paid?

A late fee applies to cover CARB's extra administrative costs, failing to pay is a violation of the regulation, and each day a fee remains unpaid after its due date counts as a separate violation. CARB can also seek injunctions. Companies should give CARB a billing contact, through the intake platform or by email, so notices reach the right team.

How can companies limit penalty risk?

• Confirm which entities are in scope, entity by entity, and who will file.
• File by the deadline, even if data are incomplete, and document the good faith effort.
• Keep the evidence behind methods, boundaries and emission factors.
• Prepare for limited assurance on scope 1 and 2 and for scope 3 reporting, both from 2027.
• Track fee notices and pay within 60 days.

This guide is general information. It is not tax or legal advice for your situation.