California has raised its fuel economy standard for state agencies that purchase passenger vehicles to 38 miles per gallon starting July 1, according to a memo from the Department of General Services.

The state’s purchasing arm released the memo announcing the new rule in May for vehicles powered solely by gasoline- or diesel-powered internal combustion engines or non-plug-in hybrid electric vehicles. The fuel economy standard does not apply to plug-in hybrid electric vehicles or battery-electric vehicles.

The rule replaces the 2008 minimum fuel economy standard of 27.5 mpg. The standard for light-duty trucks, vans, and sport utility vehicles remains at 22.2 mpg.

To obtain these averages, agencies must supplement vehicle purchases that don’t meet the minimum fuel economy with vehicles that exceed it. For example, an agency planning to purchase 50 vehicles in one year can purchase 25 sedans with 30 mpg and 25 hybrid sedans with 50 mpg. This would bring the average up to 40 mpg, which exceeds the 38 mpg minimum.

The agency may waive the standard if the state can't secure a competitively bid contract for a vehicle that meets needs and the minimum mpg. Emergency vehicles and vehicles modified to provide services to individuals with disabilities are exempt.

The ruling affects all state organizations, including community colleges and state universities. It's applicable to the University of California if the regents approve it.

To read the full memo, click here.