BILL ANALYSIS SB 535 Page 1 SENATE THIRD READING SB 535 (Yee) As Amended June 24, 2010 Majority vote SENATE VOTE :29-5 TRANSPORTATION 9-2 APPROPRIATIONS 15-0 ----------------------------------------------------------------- |Ayes:|Eng, Blumenfield, Conway, |Ayes:|De Leon, Conway, | | |Brownley, Galgiani, Bonnie | |Ammiano, | | |Lowenthal, Miller, Solorio, | |Charles Calderon, Coto, | | |Torlakson | |Davis, Duvall, Hall, | | | | |Harkey, Miller, | | | | |John A. Perez, Solorio, | | | | | | | | | |Audra Strickland, | | | | |Torlakson, Hill | |-----+----------------------------+-----+------------------------| |Nays:|Jeffries, Niello | | | | | | | | ----------------------------------------------------------------- SUMMARY : 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 Department of Motor Vehicles (DMV), upon request and payment of the required fee, to issue distinctive decals, labels, and other identifiers (i.e., stickers) to the owners of vehicles that meet the state's enhanced advanced technology partial zero-emission vehicle (enhanced AT PZEV) standard. 2)Allows vehicles displaying these stickers to travel in HOV lanes, regardless of whether they meet the lanes' occupancy requirements. 3)Provides that, notwithstanding provision 2) above, stickered-vehicles are not exempt from toll charges when traveling in high occupancy toll (HOT) lanes that are part of a federally supported value-pricing and transit development demonstration program on State Route 110 and Interstate 10 in Los Angeles County. SB 535 Page 2 4)Limits the number of such stickers to a cumulative total of 40,000. 5)Allows DMV additionally to issue replacement stickers in the instance where a vehicle with a sticker becomes nonrepairable or a total salvage loss and the vehicle owner, within six months, obtains another qualifying vehicle. 6)Makes the above provisions effective on January 1, 2012 and sunsets them on January 1, 2015, or at any time that the Secretary of State (SOS) receives notice from the California Department of Transportation (Caltrans) that federal law does not authorize HOV lane access for single-occupant vehicles with such stickers. 7)Extends until January 1, 2015, the sunset date 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 emission standard unless the SOS first receives notice from Caltrans that federal law does not authorize HOV lane access for single-occupant vehicles that meet those standards. 8)Extends until July 1, 2011, the sunset date for current HOV lane privileges for hybrid vehicles that meet specified emission criteria and have a fuel economy rating of at least 45 miles per gallon (mpg), unless the SOS first receives notice from Caltrans that federal law does not authorize HOV lane access for single-occupant vehicles that meet those standards. EXISTING LAW : 1)Allows Caltrans and local authorities to reserve highway lanes within their respective jurisdictions for the exclusive use of HOVs. 2)Prohibits the operation of single occupant vehicles in HOV lanes, with the exception of motorcycles and stickered Clean Air vehicles. 3)Allows DMV to issue 85,000 Clean Air stickers to hybrid vehicles that meet specified emission criteria and have a fuel SB 535 Page 3 economy rating of at least 45 mpg. 4)Allows a vehicle that meets California's super ultra-low emission vehicle standard for exhaust emissions and the federal inherently low-emission vehicle evaporative emission standard, or a vehicle that was produced during the 2004 model-year or earlier and meets California ultra-low emission vehicle standard for exhaust emissions and the federal inherently low-emission vehicle evaporative emission standard, to operate in an HOV lane without regard to occupancy levels. (As a practical matter, this means electric and natural gas-powered vehicles.) 5)Requires DMV to issue Clean Air stickers to vehicles meeting those standards. 6)Allows single-occupant Clean Air vehicles to operate in HOV lanes until such time as Caltrans determines that federal law does not authorize the state to allow such vehicles to use those lanes. 7)Requires Caltrans to submit a notice of such a determination to SOS, at which time HOV lane access privileges for single occupant Clean Air vehicles would be terminated. 8)Requires Caltrans to remove individual HOV lanes, or HOV lane segments, during periods of peak congestion from these access provisions if it finds that the lane or lane segment exceeds a level of service C, and that the operation or projected operation of Clean Air vehicles will significantly increase HOV lane congestion. 9)Sunsets HOV lane access privileges for Clean Air vehicles when the SOS receives Caltrans' notification of a federal ban, or on January 1, 2011, whichever occurs first. FISCAL EFFECT : According to the Assembly Appropriations Committee, minor costs to DMV to issue permits and those costs will be fully offset by fees charged to vehicle owners. COMMENTS : 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 SB 535 Page 4 by offering reduced travel times. The declared legislative intent in establishing these lanes is to relieve traffic congestion, conserve fuel, and reduce vehicular emissions. Over the years, advocates for many groups have suggested using HOV lane access to reward certain behaviors or to ease the commute for one class of motorists or another. Historically, HOV lane access has been proposed for doctors, seniors, veterans, the disabled, and others. These proposals were rejected as being inconsistent with the original intent of establishing the lanes, which is to reduce congestion. Subsequently, AB 71 (Cunneen), Chapter 330, Statutes 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. Proponents of AB 71 contended that that this bill would induce the purchase and investment in clean air vehicles, consistent with at least a part of the legislative intent in authorizing HOV lanes. In light of the relatively small number of these vehicles, it was felt that this bill's exemption would have negligible impact on the timesaving benefit of HOV lanes. Hybrid vehicles, which have become a popular means by which vehicle manufacturers may meet consumer demand for fuel efficiency, did not meet the clean air standard established by AB 71; consequently, their owners and advocates were dismayed that they were not allowed into HOV lanes. In 2004, therefore, the Legislature enacted AB 2628 (Pavley), Chapter 725, Statutes of 2004, extending 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 by compromising their ability to offer a quicker commute than adjacent mixed-flow 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, Statutes of 2006, increased the limit on hybrid stickers to 85,000 and extended AB 2628's 2008 sunset date to 2011. (DMV reached the 85,000 sticker cap for hybrids in February 2007 and is no longer issuing new hybrid stickers.) SB 535 Page 5 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 has considered is banning hybrids in certain HOV lanes, as it is already authorized to do. This bill would allow DMV to issue up to 40,000 Clean Air stickers to "enhanced AT-PZEV" vehicles effective January 1, 2012. Pending that authorization, the bill would extend for six months the expiring authority for 85,000 stickered fuel-efficient hybrids to operate in HOV lanes. According to the author, there are at least five new vehicles poised to enter the market that will meet this bill's standard: the Chevy Volt, Fisker Karma, and Chrysler ReEV "range extended electric vehicles" and the Ford Escape and Toyota Prius plug-in hybrids, although Toyota is not certain this is the case, given that no methodology has yet been established to measure the fuel economy of plug-ins. (These vehicles typically operate primarily on stored battery power for 40 to 50 miles and then use a gasoline engine to recharge the battery or to power to the drive-train.) 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 appropriate. "Due to this being first generation of technology, vehicle costs will be high but it is hoped that with federal tax incentives, potential fuel savings, and state policies such as HOV lane access would provide a value proposition to consumers to accept this first generation of technology and the associated higher cost of the vehicle." The Metropolitan Transportation Commission (MTC), noting the growing trend for the establishment of high occupancy toll (HOT) lanes -- which sell excess HOV lane capacity to single-occupant vehicles upon payment of a toll -- opposes this bill. MTC fears that continued HOV lane access for stickered vehicles will foster lane congestion, present enforcement challenges, and reduce the capacity of the lanes to accommodate toll-paying vehicles. SB 535 Page 6 Along those lines, as noted above, Caltrans is already struggling to ameliorate HOV lane congestion. The 2011 sunset of HOV lane access privileges for conventional gas-electric hybrids will remove 85,000 vehicles from those lanes, thereby making Caltrans' job significantly easier. Replacing those 85,000 conventional hybrids with as many as 40,000 second-generation hybrids will bring Caltrans substantially back to the current situation. This operational challenge must be balanced against the clear environmental and economic benefit of transitioning the state's vehicle fleet to one that achieves, by historical standards, a stunning improvement in fuel efficiency. Additionally, the state's experience with hybrids would seem to indicate that gasoline prices already provide a powerful stimulus to the sale of fuel-efficient vehicles, even when those vehicles are significantly more expensive than their conventional counterparts. The Toyota Prius had a waiting list of purchasers before they were granted HOV lane privileges and well in advance of the 2008 run-up in gasoline prices to over $4 a gallon. At such time as the economy rebounds from the current recession, it is likely that gasoline prices will again reach that level, if not substantially higher. A vehicle that potentially can avoid the gasoline pump altogether should sell quite well in such an environment. Finally, it should be noted that the state implicitly made a deal with the owners of currently stickered hybrids: buy a hybrid and gain HOV lane privileges until 2008. Upon fulfilling that deal, the state unilaterally granted another three years of HOV lane privileges to those owners. This bill grants yet another six months of that privilege, with no identifiable benefit to the state. Related legislation: AB 1500 (Lieu) would extend, until January 1, 2015, the sunset date for the statute that allows SULEV, ULEV, and ILEV vehicles to operate in HOV lanes, whether or not they have the required number of occupants. That bill currently is currently on the Assembly Floor, awaiting concurrence in Senate amendments. Analysis Prepared by : Howard Posner / TRANS. / (916) 319-2093 SB 535 Page 7 FN: 0004927