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California Legislature

Unions could get a boost from California's cap-and-trade spending proposal

 (Chuck Burton / Associated Press)
(Chuck Burton / Associated Press)

Cap-and-trade funding for electric car rebates in California could come with new strings attached, part of a last-minute proposal intended to help unions.

If passed by lawmakers, the legislation would require state regulators to develop a process for determining whether automakers are "fair and responsible in the treatment of their workers" before vehicles can be eligible for the rebates. The change could take effect next summer. 

The proposal, part of AB 134 and SB 119, could give unions additional leverage because rebates are an important part of the sales pitch for electric cars, shaving thousands of dollars off the sticker price.

It was inserted into a $1.5-billion plan for spending revenue from the cap-and-trade program, which requires companies to buy permits to release greenhouse gas emissions. The plan includes $140 million for rebates.

Steve Smith, a spokesman for the California Labor Federation, said the proposal should be passed so “when public funds are given to private companies, we know those companies are acting responsibly with respect to their workers.”

Two automakers in particular, Tesla and Nissan, have been embroiled in labor disputes.

The United Auto Workers has been trying to organize employees at Tesla's factory in Fremont, Calif., where the company is building its new, more-affordable Model 3. Workers filed complaints saying the company was trying to hinder unionization, a charge that Tesla has denied. 

Tesla and the United Auto Workers did not immediately respond to requests for comment. 

Nissan, which builds the Leaf, faced accusations of unfair labor practices before a union vote in August, when employees rejected an effort by the United Auto Workers to organize a Mississippi factory. The company has denied the accusations. 

Global Automakers, which represents Nissan and other companies, sent a letter to lawmakers calling the labor amendment “counterproductive to building a sustainable market for zero emission vehicles."

"This provision creates an unpredictable standard that would be impossible to adhere to while creating uncertainty in an already challenging market," wrote Damon Shelby Porter, director of state government affairs for Global Automakers. 

Another labor-friendly provision could govern how $140 million is spent on new vehicles at ports. If passed by lawmakers, none of the money could be used for “fully automated cargo handling equipment.”

This post has been updated with more details on the legislation and a comment from the California Labor Federation.

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