BILL ANALYSIS Ó SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 286 SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: Yee VERSION: 3/18/13 Analysis by: Erin Riches FISCAL: yes Hearing date: April 2, 2013 SUBJECT: High-occupancy lane (HOV) lanes: low-emission vehicles DESCRIPTION: This bill extends the "green sticker" and "white sticker" Clean Air Vehicle programs, which allow certain low-emission vehicles to access HOV lanes with a single occupant, from January 1, 2015 to January 1, 2018. ANALYSIS: A high-occupancy vehicle (HOV) lane, also known as a carpool lane or diamond lane, aims to promote and encourage ridesharing, thereby alleviating traffic congestion and improving air quality. Depending on the particular HOV lane, a vehicle must have a minimum of either two or three occupants in order to access the lane during operational hours. Existing law exempts certain clean, alternative-fuel vehicles from these occupancy requirements, so that a vehicle with just one occupant may use an HOV lane if it displays a Clean Air Vehicle sticker. The state has implemented three clean air vehicle HOV sticker programs in recent years: White HOV stickers. AB 71 (Cunneen), Chapter 330, Statutes of 1999, established the "white sticker program," which allows vehicles that meet certain strict emission standards to drive in carpool lanes with a single occupant. These vehicles are typically pure battery electric vehicles, dedicated compressed natural gas or liquid petroleum gas vehicles, and hydrogen fuel cell vehicles, such as the Nissan Leaf, the Tesla Roadster, and the Honda Civic CNG. State law places no limit on the number of stickers that can be issued; as of March 1, 2013, the Department of Motor Vehicles (DMV) had issued 23,223 white stickers. This program expires on January 1, 2015. Yellow HOV stickers (expired). AB 2628 (Pavley), Chapter 725, SB 286 (YEE) Page 2 Statutes of 2004 established the "yellow sticker program," which granted HOV lane access to certain single-occupant, hybrid or alternatively fueled vehicles. Federal law allows single-occupant vehicles in HOV lanes only if they have been federally certified as low-emission vehicles; at that time, no hybrid vehicles met federal emissions requirements. To address this prohibition, AB 2628 conditioned its implementation on the state receiving a federal waiver. In April 2006, the Federal Highway Administration (FHWA) granted conditional approval, enabling the yellow sticker program to go into effect. Under this program, DMV issued yellow stickers for the Toyota Prius and Honda Civic Hybrid. The number of vehicles that might be issued these stickers was ultimately capped at 85,000, a limit that was reached in 2007; all yellow stickers expired on July 1, 2011. Green HOV stickers. SB 535 (Yee), Chapter 215, Statutes of 2010, established the "green sticker program," which allows certain single-occupant vehicles - generally, plug-in hybrid vehicles that meet the Air Resources Board's strictest emission standard - to drive in carpool lanes. The only vehicles eligible to date for green stickers are the Chevrolet Volt, Ford C-Max Energi, Ford Fusion Energi, Toyota Prius Plug-In, and Honda Accord Plug-In Hybrid. State law limits the number of green stickers that DMV may issue to 40,000. This program began on January 1, 2012; as of March 1, 2013, DMV had issued 10,881 green stickers. These stickers are valid until January 1, 2015. This bill extends both the white sticker and green sticker programs by three years, to January 1, 2018. COMMENTS: 1.Purpose . According to the author, continuing access to these alternative fuel vehicles has proven to be the strongest non-monetary incentive California offers to consumers to purchase the next generation of more technologically advanced vehicles. By extending the life of the available stickers, this bill will provide a much greater incentive for individuals to purchase these clean cars. 2.Does HOV access incentivize clean car purchases ? The primary argument for granting low- or zero-emission vehicles access to HOV or HOT lanes is that it provides a non-monetary incentive SB 286 (YEE) Page 3 to purchase these vehicles, thereby increasing the adoption of new technologies. Studies do not overwhelmingly conclude that HOV access does in fact incentivize this behavior. An April 2011 paper by Sharon Shewmake of Vanderbilt University Law School and Lovell Jarvis of University of California, Davis found that HOV lane access was so important to some drivers that "many hybrid owners were willing to pay upwards of $3,200 per sticker" - suggesting that the stickers are indeed an effective incentive to get people to buy clean cars. The study also noted, however, that "Despite having a high value, the stickers were less effective at stimulating the demand for hybrid electric vehicles than an equivalent cash subsidy." It could be argued that a cash rebate might be a more efficient way to achieve the same goal. 3.Do single-occupant clean vehicles clog carpool lanes ? In April 2006, the Federal Highway Administration (FHWA) granted conditional approval to allow hybrid vehicles in HOV lanes, enabling the yellow sticker program to go into effect. FHWA required Caltrans to monitor and report on the performance of HOV lanes and to take steps to address congestion if necessary. In July 2006, after the state had issued 50,000 yellow stickers to eligible vehicles, Caltrans found that approximately 46 percent of HOV lane segments operated under degraded conditions. While Caltrans could not attribute the increased congestion solely to single-occupant hybrid vehicles accessing the lanes, FHWA asserted that these vehicles did not have to be the cause of degradation in order for Caltrans to take action to reduce HOV lane congestion. Accordingly, FHWA requested that Caltrans develop a plan to improve the performance of HOV lanes. Caltrans submitted this report to FHWA in August 2007. The plan outlined 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. Caltrans' most recent HOV lane degradation report, submitted to FHWA in November 2011, concluded that HOV lane degradation "may continue to be the result of high traffic demand and congestion across the entire freeway facility rather than SB 286 (YEE) Page 4 attributed to the single occupancy ILEV/hybrids alone." While California's HOV lanes are indeed congested, this congestion is not attributable solely to single-occupant clean vehicles. Moreover, if Caltrans is able to attribute unacceptable congestion levels to these cars, it has statutory authority to ban them from HOV lanes and thereby override this bill. 4.What's the hurry ? Both the white and green sticker programs are in effect until January 1, 2015 - more than a year and a half from now. The author notes, however, that many of the cars that qualify for these stickers are leased rather than purchased, generally through three-year leases. According to General Motors, co-sponsor of the bill, "new potential customers will be offered a greater purchase incentive if they are confident that the HOV access that comes with their investment in today's new automotive clean air technologies will be extended through 2017. It is also important that SB 286 is enacted this year as further delay will only erode the existing incentive's value." 5.Should these programs be extended ? As noted on the Air Resources Board website regarding the yellow sticker program, "The California legislature limited the time of this early hybrid vehicle program to help promote and encourage development of newer plug-in hybrid and other zero emissions technologies." Automakers are already working to develop these technologies in response to the federal Corporate Average Fuel Economy (CAFÉ) and Greenhouse Gas Emissions standards, which aim to increase fuel economy to the equivalent of 54.5 miles per gallon for cars and light-duty trucks by 2025. Automakers argue, however, that producing the cars does no good if consumers are not motivated to buy them; the green and white sticker programs provide consumer incentives to do so. 6.Social equity concerns . For a variety of reasons, low-emission vehicles often have higher purchase prices than comparable gasoline-powered vehicles. These higher purchase prices generally make low-emission vehicles that qualify for HOV lane access unaffordable for lower-income drivers. Legislation passed last year, AB 2405 (Blumenfield), Chapter 674, Statutes of 2012, exempts low-emission vehicles with green and white stickers from toll charges imposed on single-occupant vehicles in high-occupancy toll (HOT) lanes. SB 286 (YEE) Page 5 Thus, single-occupant vehicles with green and white stickers now not only have access to HOV lanes, but can drive in HOT lanes for free. Some may question if it is appropriate to be able to "buy" single-occupant access to lanes that were originally intended to promote ridesharing. RELATED LEGISLATION AB 266 (Blumenfield) extends the white and green sticker programs until 2025. Pending in the Assembly Transportation Committee. POSITIONS: (Communicated to the committee before noon on Wednesday, March 27, 2013.) SUPPORT: California Natural Gas Vehicle Coalition (sponsor) General Motors (sponsor) Alliance of Automobile Manufacturers California Electric Transportation Coalition CALSTART Clean Energy Ford Motor Company G&S Transit Management, Inc. dba City Cab LA City Cab, LLC Nissan North America Tri City Transportation Systems, Inc. dba Checker Cab and dba Yellow Cab Company OPPOSED: None received.