BILL ANALYSIS                                                                                                                                                                                                    Ó

                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 1964           Hearing Date:     6/28/16
          |Author:   |Bloom                                                 |
          |Version:  |5/5/2016                                              |
          |Urgency:  |No                     |Fiscal:      |Yes             |
          |Consultant|Erin Riches                                           |
          |:         |                                                      |

          SUBJECT:  High-occupancy vehicle lanes:  vehicle exceptions

            DIGEST:  This bill modifies the Clean Air Vehicle program, which  
          enables certain low-emission vehicles to access carpool lanes  
          with a single occupant, and creates a new program to take effect  
          when the Clean Air Vehicle program sunsets in 2019.    

          HOV lanes  

          Existing law provides that a high-occupancy vehicle (HOV) lane,  
          also known as a carpool 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.

          Existing federal law authorizes states to allow certain  
          low-emission vehicles with a single occupant to use HOV lanes.   
          If the vehicles cause a degradation of HOV lane operations, the  
          state must limit or discontinue clean-air vehicle use of the  
          lanes.  Federal law deems that an HOV lane is degraded if  
          vehicles operating in the lane fail to maintain a minimum  
          average operating speed (generally 45 mph) during 90% of the  
          time over a consecutive 180-day period during morning or evening  
          weekday peak-hour periods.  Pursuant to federal law, state law  
          authorizes the state Department of Transportation (Caltrans), if  
          it is able to attribute unacceptable congestion levels to clean  


          AB 1964 (Bloom)                                    Page 2 of ?
          vehicles, to ban them from HOV lanes.

          Clean Air Vehicle program 

          Existing state law exempts certain clean, alternative-fuel  
          vehicles from HOV lane occupancy requirements, so that a  
          single-occupant vehicle 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:

          a)White HOV stickers: AB 71 (Cunneen, Chapter 330, Statutes of  
            1999) established the "white sticker program," which allows  
            certain clean air vehicles 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, Tesla Model S, and Toyota Mirai, among  
            others.  State law does not limit the number of white  
            stickers; as of June 14, 2016, the state Department of Motor  
            Vehicles (DMV) had issued 106,706 white stickers.  White  
            stickers expire on January 1, 2019.

          b)Yellow HOV stickers (expired):  AB 2618 (Pavley, Chapter 725,  
            Statutes of 2004) established the "yellow sticker program,"  
            which granted HOV lane access to certain single-occupant,  
            hybrid, or alternatively-fueled vehicles (primarily the Toyota  
            Prius).  The number of vehicles under this program was  
            ultimately capped at 85,000, a limit that was reached in 2007;  
            all yellow stickers expired on July 1, 2011.
          c)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 - to drive in carpool lanes.  Eligible vehicles  
            include the Chevrolet Volt, Ford C-Max Energi, Honda Accord  
            Plug-in Hybrid, and Toyota Prius Plug-in, among others.  State  
            law limits the number of green stickers that DMV may issue to  
            85,000; this cap was reached in December 2015.  Existing green  
            stickers expire on January 1, 2019.
          ZEV goals

          Executive Order B-16-12 of 2012 established a goal of 1.5  
          million zero-emission vehicles (ZEVs) on California's roads by  


          AB 1964 (Bloom)                                    Page 3 of ?
          2025.  SB 1275 (De León, Chapter 530, Statutes of 2014) builds  
          on this goal by establishing the Charge Ahead California  
          Initiative, which aims to place one million electric cars,  
          trucks, and buses on California's roads by 2023.  The ZEV  
          regulation, commonly known as the ZEV mandate, sets a goal for  
          ZEVs and near-ZEVs to comprise 15% of new cars sold in  
          California by 2025.  The ZEV regulation requires a certain  
          percentage of a vehicle manufacturer's fleet each year to be  
          battery electric and fuel-cell vehicles, clean plug-in hybrids,  
          clean hybrids, and/or clean gasoline vehicles with near-zero  
          tailpipe emissions.  If a manufacturer fails to meet its ZEV  
          requirement, it is subject to financial penalties.

          This bill:

          a)Removes the cap on the number of green stickers that DMV may  

          b)Allows the white sticker program to sunset on January 1, 2019,  
            pursuant to existing law.  

          c)Provides that green stickers issued prior to January 1, 2018,  
            shall sunset on January 1, 2019, pursuant to existing law, but  
            provides that green stickers issued between January 1, 2018  
            and January 1, 2019, are valid until January 1, 2021.

          d)Provides that stickers issued on or after January 1, 2019,  
            under the new program established by this bill (which  
            effectively replaces the green sticker program), are valid  
            until January 1st of the third year after the year of  
            issuance.  Requires the new stickers to be distinguishable  
            from prior stickers.

          e)Prohibits the DMV from issuing stickers under the new program  
            if the sale of eligible vehicles reaches at least 8.6% of the  
            total new car market share for two consecutive years.   
            Prohibits the DMV from reinstating the program in a later year  
            if sales fall below that point.  

          f)Provides that if the new program becomes inoperative due to  
            expiration of federal authorization, the driver of a vehicle  
            with an otherwise valid sticker shall not be cited for a  
            violation within the first 60 days of the program becoming  


          AB 1964 (Bloom)                                    Page 4 of ?

          1)Purpose.  The author states that the green sticker program has  
            helped spur the sale of plug-in hybrid electric vehicles, but  
            has currently reached its limit of 85,000 stickers.  According  
            to the author, it is vital for the state to quickly address  
            the long-term strategy for the program because long-term  
            certainty will encourage consumers to purchase these vehicles  
            and help manufacturers meet ZEV goals.  This bill will help  
            create a more sustainable, long-term program once the current  
            program expires.  The author states that as numerous  
            environmental programs compete for a limited amount of General  
            Fund and Greenhouse Gas Reduction Fund monies, it is important  
            that we fortify this non-monetary incentive to help the state  
            meet its ZEV and greenhouse gas (GHG) reduction goals.  

          2)What does the budget do?  SB 838, the Senate transportation  
            budget trailer bill, maintains the January 1, 2019, sunset on  
            both the green and white sticker programs and removes the  
            85,000 cap on the green sticker program.  AB 1610, the  
            Assembly transportation budget trailer, does not include any  
            provisions relating to the Clean Air Vehicle program.  The  
            Governor has proposed to extend the white sticker program  
            until October 1, 2025, pursuant to FAST Act authorization;  
            this language is not currently included in either SB 838 or AB  
            1610.  As of this writing, neither bill has moved to the  
            Governor's desk.  There has been some discussion of taking the  
            Clean Air Vehicle Program out of budget discussion and instead  
            resolving it in policy discussion (e.g., this bill), but as of  
            this writing those negotiations are ongoing.

          3)ZEV goal: How are we doing?  According to the state Air  
            Resources Board (ARB), as of December 2015 there were 180,000  
            ZEVs on California's roads, representing about 3.5% of new car  
            sales.  About 1.4 million ZEVs were sold between 2010 and  
            2015.  ARB's 2013 Climate Change Scoping Plan and current  
            draft Mobile Source Strategy both point to the need for the  
            light-duty vehicle fleet to be largely electrified by 2050,  
            with ZEV sales of nearly 100% by that point.  

          4)Do single-occupant vehicles clog carpool lanes?  According to  
            Caltrans' most recent HOV lane degradation report,  
            approximately 54% of HOV lanes in California were degraded  
            during the first half of the year and 59% during the second  
            half of the year.  Caltrans identifies key causes of HOV lane  


          AB 1964 (Bloom)                                    Page 5 of ?
            congestion as vehicles from HOV lanes merging into  
            general-purpose lanes at the end of the HOV lane, highway  
            congestion, lane-change conflicts when drivers attempt to  
            enter or exit the HOV lane, traffic incidents on the freeway,  
            and severe weather resulting in lower speeds.  Caltrans states  
            that it is not considering prohibitions on clean vehicles in  
            HOV lanes because they account for a relatively small  
            percentage of peak-hour HOV volume.  Proponents of this bill  
            state that the "rolling" program established by this bill  
            (e.g., stickers only being valid for three years) is intended  
            to help address traffic congestion concerns.  

          5)How many stickers are enough?  As noted on the ARB 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  
            (CAFE) 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 sticker  
            program provides an incentive to do so.  In addition, this  
            bill was amended in the Assembly to prohibit DMV from issuing  
            new stickers if the sale of eligible vehicles reaches a  
            certain percentage of total market share for two consecutive  
            years.  This bill also, however, removes the cap entirely. 

          6)How many incentives are enough?  The state, federal, and local  
            governments offer several incentives to purchase and drive  
            clean cars.  The Clean Vehicle Rebate Program (CVRP) provides  
            rebates of up to $5,000 for the purchase or lease of a new ZEV  
            or near-ZEV.  In addition, the U.S. Department of Energy  
            offers a $7,500 federal tax credit for the purchase of an  
            electric vehicle.  Clean vehicle owners also tend to enjoy  
            free parking in commercial garages, among other benefits.

          7)Social equity concerns.  For a variety of reasons,  
            low-emission vehicles generally have higher purchase prices  
            than comparable gasoline-powered vehicles.  These higher  
            prices generally make low-emission vehicles that qualify for  
            HOV lane access unaffordable for low-income drivers.  Some  
            critics question whether it is appropriate to "buy"  


          AB 1964 (Bloom)                                    Page 6 of ?
            single-occupant lane access to lanes that are intended to  
            promote ridesharing.  

          8)Is the Clean Air Vehicle program achieving its goals?  The  
            sponsor of this bill, the Alliance of Automobile  
            Manufacturers, points to a recent UCLA study showing that 40%  
            of ZEV sales in major urban areas of California are tied to  
            green and white stickers.  However, the overarching goal of  
            the program is to improve air quality.  In a February 2015  
            report, the State Auditor pointed out that state law does not  
            require any state agency to monitor the goals and objectives  
            of the program and that ARB had not studied the effect of the  
            program on air quality.  

          9) Time to narrow the program?  A coalition comprised of the  
            American Lung Association of California, Coalition for Clean  
            Air, Natural Resources Defense Council, and Union of Concerned  
            Scientists has taken a "support if amended" position on this  
            bill.  The coalition seeks two amendments:

               a)     Provide that only vehicles achieving an all-electric  
                 range of at least 25 miles would be eligible for green  
                 stickers, with the all-electric range gradually  
                 increasing over time based on technology review by ARB.   
                 This provision would continuously spur stronger PHEV  
                 technologies while preserving HOV lane mobility benefits.

               b)     Develop a process directing Caltrans to work with  
                 state metropolitan planning organizations regional  
                 transportation planning agencies, and the California  
                 Highway Patrol to address regional sources of HOV lane  
                 congestion, including HOV lane violations.

          10)Concerns about HOV lane congestion.  The Los Angeles County  
            Metropolitan Transportation Authority (LACMTA) has taken a  
            "work with author" position on this bill.  LACMTA states that  
            although it supports deployment of alternative-fuel vehicles  
            to reduce GHG emissions, it has general concerns about the  
            potential impacts to its Metro ExpressLanes program operations  
            on the I-10 and I-110 corridors and overall HOV lane  
            congestion in Los Angeles County that could result from  
            increased use of alternative-fuel vehicles.  The Metropolitan  
            Transportation Commission, which has not taken a position on  
            this bill, states that the Bay Area has the highest share of  
            stickered vehicles in the state, which has significantly  


          AB 1964 (Bloom)                                    Page 7 of ?
            degraded speeds in its HOV lanes.  

          11)Amendments.  The author will accept amendments in this  
            committee to do the following:

               a)     Require Caltrans to eliminate access to individual  
                 HOV lanes, or portions of these lanes, for stickered cars  
                 upon the request of, and with the concurrence of, the  
                 regional transportation agency whose jurisdiction  
                 includes HOV lanes, following a finding by Caltrans as  

                     i.          The lane or portion of the lane exceeds a  
                      specified level of service.
                     ii.         The operation or projected operation  
                      within the next 12 months of stickered vehicles in  
                      these lanes significantly contributes, or is  
                      projected to significantly contribute, to congestion  
                      of these lanes.
                     iii.        Alleviating the congestion by reducing  
                      the use of the lane by non-eligible vehicles through  
                      increased enforcement or further increasing vehicle  
                      occupancy is either infeasible within the immediate  
                      future or is forecast to result in increased  
                      congestion in the corridor overall.

               b)     Provide that stickers issued under the program  
                 established by this bill, on or after January 1, 2019,  
                 are valid until January 1st of the fourth year after the  
                 year of issuance (rather than the third year as this bill  
                 currently specifies).

               c)     Prohibits the DMV from issuing stickers under the  
                 new program if the sale of eligible vehicles reaches at  
                 least 9.2% of the total new-car market share for two  
                 consecutive years (rather than 8.6% as this bill  
                 currently specifies).

          Related Legislation:
          AB 95 (Committee on Budget, Chapter 12, Statutes of 2015) -  
          increases the cap on the "green sticker" Clean Air Vehicle  
          program from 70,000 to 85,000.  


          AB 1964 (Bloom)                                    Page 8 of ?
          Assembly Votes:

            Floor:            50-19
            Approps:       12-6
            Trans:            14-2
          FISCAL EFFECT:  Appropriation:  No    Fiscal Com.:  Yes     
          Local:  Yes

            POSITIONS:  (Communicated to the committee before noon on  
                          June 22, 2016.)

          Alliance of Automobile Manufacturers (sponsor)
          California Electric Transportation Coalition
          California Natural Gas Vehicle Coalition
          Clean Energy
          Silicon Valley Leadership Group


          None received


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