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 ----------------------------------------------------------------- |Author: |Pavley | |----------+------------------------------------------------------| |Version: |4/8/2015 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |Yes |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Erin Riches | |: | | ----------------------------------------------------------------- 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 SB 39 (Pavley) Page 2 of ? 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 SB 39 (Pavley) Page 3 of ? 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 SB 39 (Pavley) Page 4 of ? 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 SB 39 (Pavley) Page 5 of ? 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. SB 39 (Pavley) Page 6 of ? 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 -- SB 39 (Pavley) Page 7 of ?