Legislators Leave Town Without Passing Tesla Incentives

Legislators Leave Town Without Passing Tesla Incentives

The effort to keep Tesla Motors Inc. in California may have run into a major roadblock, according to the Los Angeles Times. Legislators in Sacramento failed to make a deal with Tesla before they adjourned, leaving other competitors such as Nevada, Arizona, New Mexico and Texas free to pursue the motor company while California diddles the time away. 

Governor Jerry Brown’s Office of Business and Economic Development has been negotiating with Tesla officials and Chief Executive Elon Musk for months, and there was a proposed incentive bill that would lure Tesla to construct a $5 billion battery factory in Palo Alto.

That proposal came under fire from environmentalists, however, who argued that waiving much of the California Environmental Quality Act so that Tesla could implement its gigabattery factory by 2017 was too extreme. The proposal also implied there could be tax breaks for Tesla ranging as high as $500 million.

Simon Sproule, speaking for Tesla, had no comment, only allowing that California’s four competitors had different legislative schedules. He simply said, “The process is still ongoing.” Musk has doubts about locating in California because of its harsh environmental regulations; he has called the state a long-shot.

Meanwhile, Sacramento, Stockton and Imperial Counties are jockeying for position to entice Tesla to their areas. Two state senators are still trying to get a deal done, the Times reports: Sen. Ted Gaines (R-Rocklin) wants Brown to call a special session of the Legislature to finish the deal, while Senate President Darrell Steinberg (D-Sacramento) thinks the issue is not closed, stating that he thinks the state will consult with Tesla through autumn so that “the next Legislature has the opportunity to finalize a good deal for California.”

Mike Rossi, a senior Brown advisor, was sanguine, telling the Times: “The administration continues to engage in productive conversations with Tesla, and remains optimistic that we can reach an agreement that meets our common goal of adding jobs in California.”


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