Cal. HSC § 39680 — California Code / Code hsc / Division 26 / Part 2 / Chapter 3.6 / Article 1 / Section 39680
Section 39680
Status: in_force

(a) The Legislature finds and declares all of the following:

(1) (A) California has established itself as a leader in national and international energy conservation and environmental stewardship.

(B) The California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500)) charges the state board as the lead agency to monitor and regulate sources of emissions of greenhouse gases. That act has set a goal of reducing greenhouse gas emissions to 40 percent below the 1990 level by 2030. That act also authorizes the state board to develop market-based mechanisms, including the cap-and-trade system, which generates revenue for the Greenhouse Gas Reduction Fund, and other transactional mechanisms.

(C) The state board, when expending moneys from the Greenhouse Gas Reduction Fund, is required to maximize economic and environmental cobenefits, including job-related cobenefits, as California builds a low-carbon economy.

(D) However, the charge to seek job-related benefits is not required within any timeframe, nor is there any legislative guidance with respect to specific standards or implementation mechanisms.

(E) While the charge to develop job-related cobenefits is explicit for the Greenhouse Gas Reduction Fund, it is implied rather than explicit for other clean air funds that the state board administers.

(2) To clarify the need for job-related cobenefits, Chapter 135 of the Statutes of 2017 required the California Workforce Development Board, in consultation with the state board, to submit a report to the Legislature. The California Workforce Development Board commissioned the Center for Labor Research and Education at the University of California, Berkeley, to prepare the report. Published in June 2020, the report is entitled, Putting California on the High Road: A Jobs and Climate Action Plan for 2030 (2020 Action Plan).

(3) A study by the University of California shows that fleet purchasers have a significant disparity of compliance with clean vehicle regulations. While 83 percent of large firms that employ drivers comply, only 61 percent of contractors comply. Noncompliant trucks operated by contractors represent 44 percent of all noncompliant trucks, a significantly greater share than their share of all operating trucks. The study finds that many of the noncompliant contractors are actually misclassified employees who do not have the financial resources to comply with clean-vehicle regulations. Many companies take advantage of the fleet purchaser incentives but then pass on the cost of vehicles, maintenance, and upkeep to misclassified drivers who do not have the funds or ability to maintain those vehicles at a level that maximizes their environmental benefits. For example, in drayage, an investigation by USA Today found that “port trucking companies in Southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford.” Drivers at dozens of companies “were handed a lease-to-own contract by their employer and given a choice: Sign immediately or be fired.” Such sublease arrangements directly impede the state’s ability to advance its environmental stewardship. Many contractors have later filed for bankruptcy, nullifying the benefit from the state’s climate investments.

(4) The 2020 Action Plan creates a “high road framework” based on demand-side strategies and supply-side strategies. The Action Plan does all of the following:

(A) Stresses that “[d]emand-side strategies affect the demand for labor, including the kinds of jobs that are generated, the skills that are needed, the wages and benefits employers provide, and who employers hire.”

(B) Emphasizes the importance of market participation through incentive programs: “[a]gencies responsible for implementing climate investments and other measures play a key role here because they direct public investment and influence private investments in lower carbon economic activity.”

(C) Proposes workforce standards that in general terms do all of the following:

(i) Create high-quality jobs.

(ii) Prepare workers with the skills needed to adapt to and master new zero- and low-emission technologies.

(iii) Broaden career opportunities for workers from disadvantaged communities.

(iv) Support workers whose jobs may be at risk.

(D) Identifies industry sectors that pose challenges to attaining clean air objectives and opportunities to incentivize development of high-road jobs and working conditions. Among these are vehicle manufacturing and trucking, both of which the plan faults as high-risk subsectors for labor abuses, such as misclassification, unpaid wages, and denial of unemployment benefits, workers’ compensation, or disability benefits.

(b) In enacting this chapter, it is the intent of the Legislature to do all of the following:

(1) Implement the 2020 Action Plan’s high-road recommendations that would apply to crucial windows for high-road job development and working conditions. For the trucking industry, the window is a longer span of years immediately after a fleet purchaser receives the incentive when the vehicle is placed in service.

(2) Use market participation to increase demand for clean air vehicles through incentive programs to attain equity goals for jobs in disadvantaged communities and reward companies that respect worker rights. In so doing, the Legislature will require the state board to develop labor standards to determine eligibility for programs that provide clean air incentives for fleet purchasers of new vehicles that operate drayage and short-haul trucking in California.

(3) Maximize the environmental benefits of its investments by ensuring that recipients of fleet purchaser subsidies operate the equipment in compliance with all state laws rather than taking advantage of state incentives and then selling or otherwise transferring the equipment in question.

(4) Clarify that the state board’s authority to maximize job-related cobenefits applies to all of the incentive funds and programs that it administers.

(5) Expand upon the state board’s current approach of using multiyear incentive contracts to clearly set the conditions for attaining the state’s clean air objectives with workforce cobenefits. Relevant conditions already in place for heavy-duty trucks include compliance with state law and contract terms for multiyear ownership and control of the equipment.