BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                       AB 1964|
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                                   THIRD READING 

          Bill No:  AB 1964
          Author:   Bloom (D), et al.
          Amended:  8/17/16 in Senate
          Vote:     21 

           SENATE TRANS. & HOUSING COMMITTEE:  10-0, 6/28/16
           AYES:  Beall, Cannella, Allen, Gaines, Galgiani, Leyva,  
            McGuire, Mendoza, Roth, Wieckowski
           NO VOTE RECORDED:  Bates

           AYES:  Lara, Beall, Hill, McGuire, Mendoza
           NOES:  Bates
           NO VOTE RECORDED:  Nielsen

           ASSEMBLY FLOOR:  50-19, 5/12/16 - See last page for vote

           SUBJECT:   High-occupancy vehicle lanes:  vehicle exceptions

          SOURCE:    Alliance of Automobile Manufacturers

          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  


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          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  
          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.  (See Background for HOV sticker  

          This bill:

          1)Removes the cap on the number of green stickers that the  
            Department of Motor Vehicles (DMV) may issue.

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


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

          4)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 1 of the fourth year after the year of issuance.  
             Requires the new stickers to be distinguishable from prior  

          5)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.  

          6)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  

          7)Requires 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 appropriate  
            regional transportation agency, following a specified finding  
            by Caltrans.

          8)Prohibits DMV, beginning January 1, 2019, from issuing a  
            sticker to an applicant who has received a CVRP rebate, unless  
            the applicant's income falls below the following income  
            limits: $125,000 for a single filer, $170,000 for a  
            head-of-household filer, or $250,000 for a joint filer.   
            Requires DMV to collaborate with ARB to establish procedures  
            to implement this provision, including, but not limited to:

             a)   Amending the applications for both CVRP and the Clean  


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               Air Vehicle Program to include a statement indicating that  
               the applicant cannot participate in both programs unless he  
               or she meets the income limits prescribed in this bill.

             b)   Notifying consumers through existing education and  
               outreach efforts of the eligibility criteria and  

             c)   Establishing appropriate compliance and enforcement  

             d)   Establishing information sharing between DMV and ARB to  
               implement the requirements of this bill.


          Clean Air Vehicle program

          The state has implemented three clean-air vehicle HOV sticker  
          programs in recent years:

          1)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 (BEVs), dedicated compressed natural gas or  
            liquid petroleum gas vehicles, and hydrogen fuel cell electric  
            vehicles (FCEVs), 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 DMV had  
            issued 106,706 white stickers.  White stickers expire on  
            January 1, 2019.

          2)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,  


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            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.

          3)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 (PHEVs) - 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  
          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  
          BEVs and FCEVs, clean PHEVs, 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.

          Clean Vehicle Rebate Project (CVRP)

          CVRP is intended to encourage and accelerate zero- and near-zero  
          emission, on-road light-duty vehicle deployment, and technology  
          innovation.  The program, which is administered by the Air  
          Resources Board's (ARB) contractor, the California Center for  


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          Sustainable Energy, provides rebates of up to $4,000 for  
          purchasing or leasing a new BEV, up to $3,000 for a PHEV, and up  
          to $6,000 for an FCEV.  There is no cap on the number of rebates  
          which may be issued, but rebates are subject to funding  
          availability and the program has more than once been forced to  
          stop issuing rebates and create a waiting list due to funds  
          running out.  Currently, all applications submitted after June  
          10, 2016, are being placed on a waiting list.  

          Amidst concerns that the program was primarily benefiting  
          wealthy car buyers who would likely have bought an alternative  
          vehicle regardless of the rebate, SB 1275 required CVRP  
          eligibility to be based on income.  Accordingly, in March 2016,  
          ARB set an income cap of $250,000 for single filers, $340,000  
          for head-of-household filers and $500,000 for joint filers.  The  
          ARB also modified the program to increase rebates by $1,500 for  
          consumers with household incomes less than or equal to 300% of  
          the federal poverty level (about $73,000 for a family of four).   


          1)Purpose.  The author states that the green sticker program has  
            helped spur the sale of PHEVs, 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)ZEV goal: How are we doing?  According to 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  


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            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.  

          3)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  
            congestion as vehicles from HOV lanes merging into  
            general-purpose lanes at the end of the HOV lane, highway  
            congestion, and 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.  

          4)How many stickers are enough?  The now-defunct yellow sticker  
            program was terminated at 85,000 stickers to help promote  
            development of newer plug-in hybrid and other zero-emission  
            technologies.  Automakers are working to develop these  
            technologies in response to the federal Corporate Average Fuel  
            Economy and GHG 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 prohibits DMV  
            from issuing new stickers if the sale of eligible vehicles  
            reaches a certain percentage of total market shares for two  
            consecutive years.  This bill also, however, removes the cap  

          5)How many incentives are enough?  State, federal, and local  
            governments offer several incentives to purchase and drive  
            clean cars.  CVRP provides rebates for the purchase or lease  


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            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.

          6)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"  
            single-occupant lane access to lanes that are intended to  
            promote ridesharing.  

          7)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 noted that state law does not  
            require any state agency to monitor program goals and  
            objectives and that ARB had not studied the program's effect  
            on air quality.  

          8)Recent amendments.  This bill was amended in the Senate  
            Appropriations Committee to prohibit the DMV from issuing a  
            sticker to an applicant who has received a CVRP rebate unless  
            the applicant falls within specified income limits.  The  
            amendments also require DMV to collaborate with ARB to  
            implement this bill, as specified. 

          Related/Prior Legislation

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


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          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes

          According to the Senate Appropriations Committee:

           Caltrans would incur ongoing administrative costs of  
            approximately $125,000 for the duration of the extended  
            operative date of the green sticker program.  Costs are  
            attributable to continuing analysis and reporting activities  
            required under federal law. (State Highway Account)

           Unknown Caltrans costs, in the range of $400,000 to $1  
            million, related to provisions that allow a regional  
            transportation planning agency to request the removal of a  
            clean-air vehicle exemption in HOV lanes (State Highway  
            Account).  Actual costs would be informed by the number of  
            requests and the complexity of each impacted region.  Costs  
            include data collection and analysis to determine the merit of  
            a request, sign replacement costs, and educational campaigns  
            in affected regions.

           DMV costs to revise the green sticker program would be minor  
            and absorbable, and any costs would be offset by decal fees.   
            Additional costs to limit eligibility for higher income  
            applicants are unknown at this time.  (Motor Vehicle Account) 

           California ARB costs of approximately $39,000 annually (Motor  
            Vehicle Account) to review and verify green sticker eligible  
            vehicles and track the market share of those vehicles for  
            purposes of the bill.  Additional costs to coordinate with DMV  
            to establish procedures to limit eligibility for decals and  
            rebates provided under the Clean Vehicle Rebate Program (are  
            unknown at this time. (Greenhouse Gas Reduction Fund)

           Minor and absorbable costs to the California Highway Patrol  
            (CHP).  Staff notes that the rolling expiration dates of the  
            revised green sticker program will complicate enforcement  


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            efforts because CHP would need to verify eligibility for HOV  
            access by running a plate rather than simple visual  
            verification that a vehicle has a decal. (Motor Vehicle  

          SUPPORT:   (Verified8/17/16)

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

          OPPOSITION:   (Verified8/18/16)

          Plug In America

          ASSEMBLY FLOOR:  50-19, 5/12/16
          AYES:  Achadjian, Alejo, Arambula, Atkins, Baker, Bloom,  
            Bonilla, Bonta, Campos, Chau, Chiu, Chu, Cooley, Dababneh,  
            Daly, Dodd, Frazier, Eduardo Garcia, Gatto, Gipson, Gomez,  
            Gordon, Hadley, Roger Hernández, Holden, Irwin, Kim, Levine,  
            Linder, Lopez, Low, Maienschein, McCarty, Medina, Melendez,  
            Mullin, Nazarian, O'Donnell, Olsen, Patterson, Ridley-Thomas,  
            Rodriguez, Santiago, Mark Stone, Thurmond, Ting, Weber, Wilk,  
            Williams, Rendon
          NOES:  Travis Allen, Bigelow, Brough, Brown, Chávez, Cooper,  
            Dahle, Beth Gaines, Gallagher, Gray, Grove, Harper, Lackey,  
            Mathis, Obernolte, Salas, Steinorth, Wagner, Waldron
          NO VOTE RECORDED:  Burke, Calderon, Chang, Eggman, Cristina  
            Garcia, Gonzalez, Jones, Jones-Sawyer, Mayes, Quirk, Wood

          Prepared by:Erin Riches / T. & H. / (916) 651-4121
          8/18/16 17:17:58

                                   ****  END  ****


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