BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          SB 39             Hearing Date:    4/21/2015
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          |Author:   |Pavley                                                |
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          |Version:  |4/8/2015                                              |
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          |Urgency:  |Yes                    |Fiscal:      |Yes             |
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          |Consultant|Erin Riches                                           |
          |:         |                                                      |
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          SUBJECT:  High-occupancy vehicle (HOV) lanes: low-emission  
          vehicles


            DIGEST:  This bill raises the cap on the "green sticker" Clean  
          Air Vehicle program, which allows certain low-emission vehicles  
          to access HOV lanes with a single occupant.

          ANALYSIS:
          
          An 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, until September 30,  
          2017, to allow certain low-emission and energy-efficient  
          vehicles with a single occupant to use HOV lanes.  A state that  
          enacts such a policy must monitor its HOV system and report to  
          the Federal Highway Administration (FHWA) on the impact these  
          vehicles have on highway operations.  If these 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.  Federal law requires states to take action on degraded  
          facilities within 180 days of identifying them as degraded.  If  







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          a state fails to comply, FHWA may impose sanctions, including  
          withholding payment of federal funds and withholding approval of  
          projects.

          Existing state law exempts certain clean, alternative-fuel  
          vehicles from HOV lane 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:

          1.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 Fiat 500e, Honda Civic CNG,  
            Nissan Leaf, Tesla Model S, and Toyota RAV 4 EV, among others.  
             State law does not limit the number of white stickers; as of  
            March 31, 2015, DMV had issued 70,978 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,  
            hybrid or alternatively fueled vehicles.  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.
          
          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 - to drive in carpool lanes.  Eligible vehicles  
            include the BMW i3 Rex, Cadillac ELR, Chevrolet Volt, Ford  
            C-Max Energi, Ford Fusion Energi, Honda Accord Plug-in Hybrid,  
            and Toyota Prius Plug-in.  State law limits the number of  
            green stickers that DMV may issue to 70,000.  The green  
            sticker program began on January 1, 2012; as of March 31,  
            2015, DMV had issued 62,973 green stickers.  Green stickers  
            expire on January 1, 2019.

          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  








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          ban them from HOV lanes.

          This urgency bill raises the cap on the green sticker program to  
          85,000.

          COMMENTS:

          1.Purpose.  The author states that the supply of green stickers  
            for plug-in hybrids has not kept up with demand.  On May 9,  
            2014, DMV issued the last green sticker allowed pursuant to  
            the 40,000 cap.  Legislation passed last year (see below)  
            raised the cap to 55,000, which was reached on September 23,  
            2014.  Additional legislation raised the cap again, to 70,000,  
            effective January 1, 2015.  The author states that even the  
            additional allotment will soon run out; more than 5,000  
            stickers were issued in January.  Governor Brown issued an  
            Executive Order in March 2012 setting a goal of 1.5 million  
            zero-emission vehicles (ZEVs) on California roads by 2025.   
            The author states that with only 200,000 ZEVs currently on the  
            road, and a temporary softening of market demand for ZEVs due  
            to lower gas prices, green stickers are a critical incentive  
            to maintain consumer demand and help the state meet its  
            long-term ZEV goals.  

          2.Do single-occupant vehicles clog carpool lanes?  Caltrans  
            submitted its most recent HOV lane degradation report to FHWA  
            in December 2014.  This report indicates that 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.   
            According to Caltrans, this increase is associated with a  
            seasonal increase in traffic volume.  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, 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.  In  
            Caltrans' action report to the FHWA, also submitted in  
            December 2014, Caltrans states that it is not considering  
            prohibiting clean vehicles from HOV lanes because they account  
            for a relatively small percentage of peak-hour HOV volume.  

          3.Should the cap be lifted?  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  








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            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.  

          4.Does HOV access incentivize clean car purchases?  It appears  
            that HOV lane access is no longer a primary driver of clean  
            car purchases.  The Center for Sustainable Energy (CSE)  
            released a set of survey results at the Governor's ZEV summit  
            in March 2014 indicating that HOV lane access accounted for  
            none of Tesla purchases and only 15% of Nissan Leaf, 20% of  
            Chevy Volt, and 34% of Toyota Prius purchases or leases in the  
            fourth quarter of 2013.  For fourth quarter 2013, nearly half  
            of Nissan Leaf (48%) and Chevy Volt (48%) purchases or leases,  
            as well as 34% of Toyota Prius purchases or leases, were  
            attributable to a desire to save money on fuel (this factor  
            was not in evidence in Tesla purchases).  

          5.Time to narrow the program?  The Coalition for Clean Air (CCA)  
            has taken a "support if amended" position on this bill.  CCA  
            points out that a recent research report from the Institute of  
            Transportation Studies at the University of California, Davis  
            (ITS) found that drivers who purchased a plug-in vehicle with  
            HOV lane access as the main motivation are not choosing a  
            vehicle battery size to maximize electric vehicle miles  
            traveled during their commute days as compared to drivers who  
            purchased their car for other reasons.  ITS found that the car  
            with the lowest electric range, the Prius, was driven less  
            than one electric mile for every mile on an HOV lane, as  
            compared to four electric miles for every mile driven on an  
            HOV lane for the Leaf.  CCA recommends amending this bill to  
            limit green stickers to vehicles capable of traveling at least  
            20 miles per charge.  

          6.How many incentives are enough?  The state Air Resources  
            Board's (ARB) Clean Vehicle Rebate Program (CVRP) provides  
            rebates of up to $2,500 for the purchase or lease of a new  
            zero-emission vehicle or plug-in hybrid electric vehicle.   
            CVRP is so heavily utilized that the program ran out of funds  
            midyear in 2014; the ARB maintained a waiting list until the  








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            program could start up again in June with the new fiscal year.  
             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.HOT lanes.  A high-occupancy toll (HOT) lane, also known as an  
            express lane, allows single-occupant vehicles to access an HOV  
            lane by paying a toll.  State law originally exempted all  
            vehicles with green or white stickers from paying tolls in HOT  
            lanes.  AB 1721 (Linder), Chapter 526, Statutes of 2014,  
            authorizes a toll agency to impose reduced-rate tolls (but not  
            full tolls) on vehicles with a green or white sticker  
            accessing the agency's HOT lanes.  Writing in opposition to  
            this bill, the Metropolitan Transportation Commission (MTC)  
            states that express lanes are designed to maintain the time  
            savings benefits of HOV lanes, but also to allow  
            single-occupant vehicles to use the lanes for a fee.  MTC  
            states that with congestion levels up to almost 40% in the Bay  
            Area as compared to 2010, now is not the time to expand the  
            number of single-occupant vehicles allowed in HOV or express  
            lanes unless they pay the same toll as other single-occupant  
            vehicles.

          8.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 low-income drivers.  (Note  
            that the CCSE survey referenced above indicated that over half  
            of CVRP recipients earn more than $150,000 per year.)  Some  
            may question whether it is appropriate to be able to "buy"  
            single-occupant lane access to lanes that are intended to  
            promote ridesharing.
          
          Related Legislation:
          
          AB 914 (Brown), which will be heard in the Assembly  
          Transportation Committee later this month, authorizes the San  
          Bernardino County Transportation Commission to construct and  
          operate toll facilities on State Highway Routes 10 and 15, and,  
          upon agreement, in Los Angeles and Riverside Counties.  AB 914  
          includes a provision that green- and white-sticker vehicles  
          would not be exempt from tolls on these toll facilities.









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          AB 2013 (Muratsuchi, Chapter 527, Statutes of 2014) - raised the  
          cap on the green sticker program from 55,000 to 70,000,  
          effective January 1, 2015.  

          SB 853 (Committee on Budget and Fiscal Review, Chapter 27,  
          Statutes of 2014) - raised the cap on the green sticker program  
          from 40,000 to 55,000, effective immediately.  

          SB 286 (Yee, Chapter 414, Statutes of 2013) - extended the  
          sunset on the green sticker program from January 1, 2015, to  
          January 1, 2019 or until federal authorization expires,  
          whichever comes first.

          SB 535 (Yee, Chapter 215, Statutes of 2014) - extended the  
          sunset on the white sticker program from January 1, 2015 to  
          January 1, 2019 or until federal authorization expires,  
          whichever comes first.

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


           POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,
                          April 15, 2015.)
          
            SUPPORT:  

          Alliance of Automobile Manufacturers (sponsor) 
          Association of Global Automakers
          California Electric Transportation Coalition
          California Municipal Utilities Association
          Sacramento Municipal Utility District


          OPPOSITION:

          Coalition for Clean Air
          Metropolitan Transportation Commission


                                      -- END --
          










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