Cap-and-trade spending deal is reached

$1.5-billion proposal prioritizes cleaner vehicles and could give unions a boost.

SACRAMENTO — Gov. Jerry Brown and legislative leaders reached a deal on spending cap-and-trade revenue for a massive investment in clean vehicles, and the plan includes perks for unions who are trying to organize more workers and protect their jobs.

The $1.5-billion proposal comes less than two months after lawmakers extended the state’s cap-and-trade program, which requires companies to buy permits to emit greenhouse gases, until 2030.

The negotiations included more money than usual because some was left over from the previous fiscal year, held in reserve by Brown until cap and trade’s future was secure.

The biggest-ticket item is $895 million for new vehicles, a priority repeatedly highlighted by Senate Democrats. The money would flow through a variety of programs, including $140 million to the state’s ports, $85 million for farm vehicles and $140 million for electric car rebates.

Brown originally wanted $300 million to help local regulators improve air quality in polluted neighborhoods, a goal that was packaged with the cap-andtrade extension passed by the Legislature in July. That part of the plan was reworked so the money flows through a clean vehicle program, an investment that supporters hope will yield quicker dividends for the same communities.

Forest management, fire prevention and emergency response would receive $225 million. This was one of the issues pushed by the Assembly Republicans who voted to help Democrats extend the cap-and-trade program.

A variety of other programs would see more money under the deal, including $18 million for weatherizing low-income homes, $46 million for urban forestry and greening, and $15 million for restoring wetlands.

The $1.5-billion agreement doesn’t include all of the cap-and-trade program’s revenue.

An additional $900 million wasn’t up for debate because it’s being automatically distributed according to an annual formula. That includes $375 million for building the bullet train from Los Angeles to San Francisco.

Unions stand to gain as well, with cap-and-trade funding coming with strings attached.

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 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.

Steve Smith, a spokesman for the California Labor Federation, said the proposal should be passed so that “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 union has been trying to organize employees at Tesla’s factory in the Bay Area city of Fremont, where the company is building its new, more-affordable Model 3. Workers filed complaints saying the company was trying to hinder unionization, a charge Tesla denies.

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 money is spent on new vehicles at ports. If passed by lawmakers, none of the money could be used for “fully automated cargo handling equipment.”