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,  




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            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  




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            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  




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            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.   




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            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.