BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1964

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          Date of Hearing:  April 27, 2016


                               Lorena Gonzalez, Chair

          1964 (Bloom) - As Amended April 11, 2016

          |Policy       |Transportation                 |Vote:|14 - 2       |
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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   


          This bill:

          1)Extends access to HOV lanes, regardless of vehicle occupancy  
            levels, for advanced technology partial zero-emission vehicles  
            (enhanced AT PZEVs-mainly plug-in electric hybrids (PHEVs))  
            from the current January 1, 2019 sunset date to January 1,  


                                                                    AB 1964

                                                                    Page  2

            2021, for such vehicles issued a decal (green sticker) from  
            the DMV between January 1, 2018 and January 1, 2019. 

          2)Stipulates that decals issued after January 1, 2019, are valid  
            until January 1 of the third year after issuance. (September  
            30, 2025, is the federal sunset date for unrestricted use of  
            HOV lanes by PHEVs.)

          3)Eliminates the 85,000 vehicle cap on issuance of green  
            stickers and instead prohibits the issuance of any additional  
            green stickers if the sale of PHEVs constitutes more than 8.6%  
            of the California new car market share for two consecutive  

          FISCAL EFFECT:

          Costs to the DMV are minor and absorbable. Caltrans will  
          continue to incur annual special fund costs of around $100,000  
          beyond the current sunset date for one position associated with  
          federally required analysis and reporting regarding compliance  
          of HOV lanes with federal performance standards.


          1)Background. In 2012, Governor Brown issued an executive order  
            calling for 1.5 million zero- or near-zero emission vehicles  
            to be on California's roadways by 2025 (referred to as the ZEV  
            mandate). Given this, and given the importance of these  
            vehicles in meeting climate change goals, federal and state  
            governments offer incentives to spur the commercial success of  
            these vehicles.  Typical incentives include:  reduced purchase  
            prices, tax credits, rebates, sales tax exemptions, HOV  
            access, and free parking. 


                                                                    AB 1964

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            HOV lanes are part of a traffic management strategy designed  
            to provide an incentive for commuters to form carpools by  
            offering reduced travel times.  The declared legislative  
            intent in establishing these lanes is to relieve traffic  
            congestion, conserve fuel, and reduce vehicular emissions.  
            Since 1999, numerous bills have been enacted providing access  
            to carpool lanes, generally for specified numbers of each new  
            generation of clean-air vehicles.

            The success of HOV access programs for clean air vehicles  
            triggers concerns that allowing these additional cars in the  
            HOV lanes may result in degraded performance of the lanes.   
            The fear is that, if HOV lanes become sufficiently degraded,  
            their benefits (i.e., traffic congestion relief, fuel  
            conservation, and reduced emissions) will be lost and  
            carpooling will be discouraged.  Consequently, both state and  
            federal existing law require Caltrans to monitor the  
            performance of HOV lanes and to take action to remedy the  
            degradation if it occurs.

            Caltrans has proposed certain actions to the Federal Highway  
            Administration in order to address degradation of the state's  
            HOV lanes. These steps do not include prohibiting clean air  
            vehicles from HOV lanes. Caltrans notes that such vehicles  
            constitute a relatively small percentage of peak HOV traffic  


                                                                    AB 1964

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          2)Purpose. According to the author, AB 1964 is necessary to  
            provide long-term certainty for consumers of PHEVs.  As the  
            2019 sunset date approaches, the author asserts that the value  
            of the green sticker and the incentive for purchasing a PHEV  
            will continually diminish.

          3)Related Legislation. The Administration is proposing budget  
            trailer bill language to remove the cap on the number of  
            decals that can be issued in the green sticker progam.

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