BILL ANALYSIS SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: sb 535 SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: yee VERSION: 4/2/09 Analysis by: Jennifer Gress FISCAL: yes Hearing date: April 28, 2009 SUBJECT: High-occupancy vehicle (HOV) lane access DESCRIPTION: This bill allows vehicles that utilize advanced lithium ion battery plug-in technology to access HOV lanes regardless of vehicle occupancy. ANALYSIS: In 1999, the Legislature passed and the governor signed AB 71 (Cunneen), Chapter 330, to allow the following low-emission vehicles to access HOV lanes, regardless of vehicle occupancy: A vehicle that meets the state's super ultra-low emission vehicle (SULEV) standard for exhaust emissions and the federal inherently low-emission vehicle (ILEV) standard for evaporative emissions. A vehicle that was produced during the 2004 model year or earlier that meets the state's ultra-low emission vehicle (ULEV) standard for exhaust emissions and the federal ILEV standard. To differentiate these vehicles, the Department of Motor Vehicles (DMV) issues white stickers to be affixed on the vehicle. There is no limit on the number of these vehicles that may be issued white stickers. To date, DMV has issued 9,099 SB 535 (YEE) Page 2 sets of white stickers. In 2004, AB 2628 (Pavley), Chapter 725, allowed the following hybrid vehicles to access HOV lanes, pending approval by the federal government: A hybrid vehicle or an alternative fuel vehicle that meets the state's advanced technology partial zero-emission standard (AT PZEV) standard for criteria pollutant emissions and has a 45 miles per gallon (mpg) or greater fuel economy highway rating. A hybrid vehicle that was produced during the 2004 model year or earlier that has a 45 mpg or greater fuel economy highway rating and meets the state's ULEV, SULEV, or partial zero-emission vehicle (PZEV) standards. The DMV issues these vehicles yellow stickers. The number of vehicles that may be issued yellow stickers was ultimately capped at 85,000, a limit which was reached in 2007. The authority to access HOV lanes expires for all four types of vehicles on January 1, 2011. Existing law requires the California Department of Transportation (Caltrans) to assess, according to a specified timeframe, whether HOV lanes have experienced significant degradation due to access by hybrid vehicles with yellow stickers. Caltrans is authorized to restrict single-occupant vehicles with either white or yellow stickers from accessing segments of HOV lanes during periods of peak congestion if it finds that the lane has a specified level of service, the operation of these vehicles will significantly increase congestion, and it is not feasible to alleviate congestion by other means. This bill allows vehicles that utilize advanced lithium-ion battery plug-in technology, which would be issued green stickers, to access HOV lanes. These vehicles would not be subject to the January 1, 2011 sunset date. COMMENTS: 1.Purpose . The purpose of the bill, which is sponsored by SB 535 (YEE) Page 3 General Motors, is to provide incentives to consumers to purchase the next generation of more technologically advanced vehicles, specifically plug-in vehicles utilizing lithium ion batteries, by giving these vehicles access to HOV lanes. 2.Picking technological winners and losers ? By specifying plug-in vehicles that run on lithium ion batteries, this bill chooses a particular technology over those that may achieve the same or similar performance. The bill is aimed to provide incentives for the Chevy Volt, which is a plug-in hybrid electric vehicle not yet in commercial production. For the first 40 miles, the Volt runs on battery electric power. After that distance, a gasoline-fueled internal combustion engine provides the energy necessary to run the car. While the Volt has not yet been rated by ARB, these vehicles are likely to be categorized as Enhanced AT PZEZs. ARB has established several categories that describe the emissions profile of a vehicle. These are listed in the following table along with an example of the technology used in that vehicle, in order from the least emitting to the most. --------------------------------------------------------------- | | | | Emissions Category | Technology Example | | | | |------------------------------+--------------------------------| |ZEV |Battery (e.g., Tesla, RAV 4 | |(zero-emission vehicle) |EV), hydrogen fuel cell (e.g., | | |Toyota Fuel Cell Hybrid) | |------------------------------+--------------------------------| |Enhanced AT PZEV |Uses a ZEV fuel such as a | |(advanced technology partial |battery, coupled with an | |zero-emission vehicle) |internal combustion engine | | |(e.g., Volt) | |------------------------------+--------------------------------| |AT PZEV |Gas-electric hybrid (e.g., | |(advanced technology partial |Prius), natural gas (e.g., | |zero-emission vehicle) |Honda Civic CNG), methanol fuel | SB 535 (YEE) Page 4 | |cell | |------------------------------+--------------------------------| |PZEV |Extremely clean, conventional | |(partial zero-emission |gas-fueled (~33% of new | |vehicle) |vehicles for sale are PZEVs) | |------------------------------+--------------------------------| |SULEV |Very clean, conventional | |(super ultra low-emission |gas-fueled vehicle | |vehicle) | | |------------------------------+--------------------------------| |ULEV |Conventional gas-fueled (over | |(ultra low-emission vehicle) |half of new vehicles offered | | |for sale in CA are ULEVs) | |------------------------------+--------------------------------| |LEV |Conventional | |(low-emission vehicle) |gas-fueled | --------------------------------------------------------------- The next generation of clean vehicles is reflected in Enhanced AT PZEVs and ZEVs. As the table suggests, there are a variety of technologies used in those vehicles, many of which are in development. With regard to battery chemistry alone, there are several "flavors" of lithium batteries, including lithium ion, lithium titanate, and lithium copper chloride. A 2007 report on emerging ZEV technologies found that several battery chemistries appear to provide the necessary performance to meet consumer preferences. As California and the rest of the nation seek vehicles that produce the least emissions and depend less on petroleum-based fuels, favoring a specific technology could stall development of emerging technologies that have the potential to produce zero emissions and move the country away from petroleum. Instead, the author or committee may wish to establish a performance standard that a vehicle must meet in order to be eligible for an incentive such as HOV lane access. A performance standard may include an emissions rating, such as ZEV, and a fuel economy rating, such as 60 mpg. By specifying a performance standard, the bill would provide incentives for the development, manufacture, and purchase of vehicles that meet the state's air quality and greenhouse gas emission goals, while also allowing the market place to determine which products best meet consumer preferences. 3.Author's amendments . To address this concern, the author SB 535 (YEE) Page 5 intends to offer amendments in committee that do the following: Deletes the provision to allow plug-in vehicles utilizing lithium ion batteries to access HOV lanes. Deletes the sunset date for the cleanest of the white-sticker vehicles (vehicles that meet both the state SULEV and federal ILEV standards, which are effectively ZEVs and certain CNG-powered vehicles). These amendments will "reset" the bill to permit only the cleanest vehicles that currently access HOV lanes to continue to access those lanes, while providing the author, sponsor, and committee the opportunity to develop a performance-based approach to incentivize the development and purchase of next generation vehicles. One issue that arises by sunsetting one white-sticker vehicle instead of both is that law enforcement will be unable to differentiate which of the white-sticker vehicles are authorized to access HOV lanes after January 1, 2011. The author or committee may wish to consider amending the bill to allow all existing white-sticker vehicles to continue using the HOV lanes and to direct DMV to issue new white stickers only to the cleanest vehicles that the author's amendments target. 1.HOV lane degradation . The Federal Highways Administration (FHWA) granted conditional approval to allow hybrid vehicles in HOV lanes, as authorized by AB 2628 (Pavley), in April 2006. FHWA required Caltrans to monitor and report on the performance of HOV lanes and to take steps to address degradation (i.e., congestion), if necessary. In July 2006, after 50,000 yellow stickers were issued to hybrid vehicles under the program, Caltrans assessed congestion in the HOV lanes using both the state and federal standards of performance. Under the state standard, Caltrans found that the number of congested HOV lane segments increased from 7 to 12 percent. Under the federal standard, Caltrans found that approximately 46 percent of HOV lane segments operated under degraded conditions. While the increased congestion could not be attributed solely to single-occupant hybrid vehicles accessing the lanes, FHWA nonetheless asserted that these vehicles did not have to be the cause of SB 535 (YEE) Page 6 degradation for Caltrans to take action to reduce HOV lane congestion and requested that Caltrans develop a plan for improving the performance of HOV lanes. Caltrans submitted the California High Occupancy Vehicle Lane Degradation Reduction Plan to FHWA in August 2007. The plan outlines short- and long-term measures to improve HOV lane performance, including increased enforcement, improved system management, infrastructure improvements, public education, and, if necessary, a prohibition of single-occupant hybrid vehicles from accessing the most congested segments of the HOV-lane network. Following the submittal of that plan, Caltrans updated its analysis of HOV lane degradation and submitted a supplemental report to FHWA in September 2008. This updated analysis found that, based on the federal standard, congestion increased on HOV lanes from 46 percent to 54 percent. Given the growth in both population and number of registered vehicles, degradation is only likely to worsen. The Department of Finance estimated California's population to be 33,873,086 in 2000 and 38,049,462 in 2008, a 12.3 percent increase in 8 years. During that same time period, registrations for passenger vehicles and motorcycles grew from 19,544,152 to 22,781,390, a 16.6 percent increase. Furthermore, the Department of Finance projects that California's population will reach 44 million by 2020, an increase which will be accompanied by growth in the number of vehicle registrations and demand for highway travel. Further degradation of HOV lanes benefits no one, most notably, the consumers this bill seeks to target. Given the current threat of congestion on the state's HOV lanes and the possibility that this bill would result in further degradation, the committee may wish to consider the following two questions: How to weigh the possible consequences of allowing HOV lanes to degrade further vs. the potential value of incentivizing the next generation of clean vehicles? Are there incentives other than HOV lane access that might be offered to encourage the development of these vehicles? RELATED LEGISLATION SB 535 (YEE) Page 7 SB 626 (Kehoe) requires the California Public Utilities Commission to evaluate and implement policies to provide fueling infrastructure for plug-in hybrid and electric vehicles. Set for hearing on April 28th in this committee. AB 1500 (Lieu) extends the sunset date to allow certain low-emission and hybrid vehicles to access HOV lanes, regardless of vehicle occupancy, from January 1, 2011 until January 1, 2016. Set for hearing on April 27th in the Assembly Transportation Committee. AB 1502 (Eng) extends the sunset date to allow certain low-emission vehicles from January 1, 2011 until January 1, 2017, regardless of vehicle occupancy, but maintains the January 1, 2011 sunset date for hybrid vehicles. In the Assembly Transportation Committee. POSITIONS: (Communicated to the Committee before noon on Wednesday, April 22, 2009) SUPPORT: None received. OPPOSED: None received.