BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1964| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 SENATE APPROPRIATIONS COMMITTEE: 5-1, 8/11/16 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. ANALYSIS: HOV lanes AB 1964 Page 2 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 programs.) 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. AB 1964 Page 3 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 stickers. 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 inoperative. 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 AB 1964 Page 4 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 conditions. c) Establishing appropriate compliance and enforcement measures. d) Establishing information sharing between DMV and ARB to implement the requirements of this bill. Background 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, AB 1964 Page 5 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 AB 1964 Page 6 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). Comments 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 AB 1964 Page 7 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 entirely. 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 AB 1964 Page 8 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. AB 1964 Page 9 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 AB 1964 Page 10 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 Account) SUPPORT: (Verified8/17/16) Alliance of Automobile Manufacturers (source) California Electric Transportation Coalition California Natural Gas Vehicle Coalition ChargePoint 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 **** AB 1964 Page 11