BILL ANALYSIS                                                                                                                                                                                                    

                                                                  SB 535
                                                                  Page  1

          Date of Hearing:   July 15, 2009

                                Kevin De Leon, Chair

                      SB 535 (Yee) - As Amended:  July 6, 2009 

          Policy Committee:                               

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No


          This bill allows certain highly fuel-efficient vehicles to  
          travel in high-occupancy vehicle (HOV) lanes without the  
          required number of passengers, beginning in 2011.  Specifically,  
          this bill:  

          1)Requires the DMV, upon request and payment of the required  
            fee, to issue distinctive decals to the owners of vehicles  
            meeting the state's enhanced advanced technology partial  
            zero-emission vehicle (enhanced AT PZEV) standard that have a  
            65 miles per gallon or greater combined fuel economy rating.   
            The total number of such stickers is limited to 65,000.

          2)Allows vehicles displaying these stickers to travel in HOV  
            lanes, regardless of whether they meet the lanes' occupancy  
            requirements, but does not exempt such single-occupant  
            vehicles from tolls in high-occupancy toll (HOT) lanes to be  
            operated on State Routes 10 and 110 by the Los Angeles County  
            Metropolitan Transportation Authority under a congestion  
            pricing pilot program authorized in current law.

          3)Makes the above effective from January 1, 2011 until the  
            earlier of January 1, 2015 or at any time that the Secretary  
            of State receives notice from Caltrans that federal law does  
            not authorize HOV lane access for single-occupant vehicles  
            with such stickers.  

          4)Extends the January 1, 2011 sunset for current HOV lane  
            privileges for vehicles that meet the state's super ultra-low  
            emission vehicle (SULEV) standard for exhaust emissions and  
            the federal inherently low-emission vehicle (ILEV) evaporative  


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            emission standard until the Secretary of State receives the  
            same notice as in (3).

           FISCAL EFFECT  

          Minor costs to the DMV to issue decals up to the authorized  
          limit, fully offset by fees charged to vehicle owners.


           1)Background  .  An HOV lane, commonly referred to as a "carpool"  
            or "diamond" lane, is part of a traffic management strategy  
            designed to reduce the number of single occupancy vehicles  
            during peak periods of traffic congestion.  These lanes are  
            intended to provide an incentive for commuters to form  
            carpools by offering reduced travel times.  AB 71  
            (Cunneen)/Chapter 330 of 1999, extended to certain "Clean Air"  
            vehicles the privilege of using HOV lanes even when required  
            occupancy levels are not met.  Vehicles meeting AB 71's  
            standard are generally limited to battery-powered vehicles and  
            those operating on compressed natural gas, neither of which is  
            especially prevalent in California's vehicle fleet.

            AB 2628 (Pavley)/Chapter 725 of 2004, extended the Clean Air  
            provisions of AB 71 to hybrid vehicles that achieve 45 miles  
            per gallon fuel economy.  Since allowing large numbers of  
            hybrids into HOV lanes would reduce the effectiveness of the  
            lanes, AB 2628 limited the aggregate number of stickers for  
            hybrids to 75,000 and allowed Caltrans to suspend HOV lane  
            privileges for hybrids on any particular lane that reaches a  
            specified level of congestion.  AB 2600 (Lieu)/Chapter 614 of  
            2006, increased the limit on hybrid stickers to 85,000 and  
            extended AB 2628's 2008 sunset date to 2011.  (The DMV reached  
            the 85,000 sticker cap for hybrids in February 2007 and is no  
            longer issuing new hybrid stickers.)

            In June of 2007, the Federal Highway Administration (FHWA)  
            requested Caltrans to submit a plan to address "HOV lane  
            degradation" on California freeways.  Caltrans' analysis had  
            indicated that 54% of its HOV lanes had experienced such  
            degradation-i.e. the lane does not maintain 45 mph or greater  
            operating speed during peak commute hours for 90% or more of  
            180 consecutive workdays.  Recognizing that one component of  
            HOV lane congestion may be the presence of hybrid vehicles,  
            one of the options that Caltrans is considering is banning  


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            hybrids in certain HOV lanes, as it is already authorized to  
            do.  Furthermore, absent action by Congress, the current  
            federal authorization for non-HOVs operating in HOV lanes with  
            Clean Air stickers is due to expire on September 30 of this  
            year.  (Recently-introduced legislation would extend the  
            expiration to 2015.)

           2)Purpose  .  This bill allows the DMV to issue up to 65,000 Clean  
            Air stickers to "enhanced AT-PZEV" vehicles that achieve a  
            combined fuel economy rating of 65 MPG-commencing on the  
            January 1, 2011 sunset of the existing authorization for  
            85,000 fuel-efficient hybrids to operate in HOV lanes.   
            According to the author, at least five new vehicles meeting  
            this bill's standard are poised to enter the market: the Chevy  
            Volt, Fisker Karma, and Chrysler ReEV "range extended electric  
            vehicles" and the Ford Escape and Toyota Prius plug-in  
            hybrids.  Given the potential for such vehicles to reduce oil  
            dependency, reduce air pollution and counter the emission of  
            greenhouse gasses, the author believes the granting of HOV  
            lanes privileges is an appropriate incentive to potential  
            buyers of such vehicles.

           3)Related Legislation  .  AB 1500 (Lieu), pending in Senate  
            Appropriations, extends, until January 1, 2016, the sunset  
            date for SULEV and ILEV vehicles to use HOV lane without the  
            required number of passengers.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081