BILL ANALYSIS                                                                                                                                                                                                    

          SENATOR ALAN LOWENTHAL, CHAIRMAN               AUTHOR:  yee
                                                         VERSION: 4/2/09
          Analysis by:  Jennifer Gress                   FISCAL:  yes
          Hearing date:  April 28, 2009


          High-occupancy vehicle (HOV) lane access


          This bill allows vehicles that utilize advanced lithium ion  
          battery plug-in technology to access HOV lanes regardless of  
          vehicle occupancy.


          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  
          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  


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          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.

           1.Purpose  .  The purpose of the bill, which is sponsored by  


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            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 |


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          |                              |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  


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            intends to offer amendments in committee that do the  

                 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  

           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  


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            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  


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          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  
                      April 22, 2009)

               SUPPORT:  None received.
               OPPOSED:  None received.