Lane Departure Warning Technology Gets Boost in Proposed Tax Incentive Legislation; HR-4931 Will Help Reduce Highway Crashes and Save Lives.

ANAHEIM, Calif. -- Iteris, Inc., a subsidiary of Iteris Holdings, Inc. (OTCBB:ITRSA)(OTCBB:ITRSB), today announced that a bill has been introduced to Congress that provides financial incentives to buyers of passenger cars and commercial trucks to purchase safety oriented advanced technology devices such as Lane Departure Warning systems. Congressmen Phil Crane (R-Ill.), Mike Rogers (R-MI) and Sandy Levin (D-MI), are sponsoring the bill (HR-4931, the "Intelligent Vehicle Highway Safety Act of 2004") that would provide tax relief for businesses and consumers to purchase commercial trucks and passenger cars equipped with Intelligent Vehicle Technologies (IVT).

"This tax incentive legislation gives vehicle buyers another reason to purchase safety options such as Iteris' LDW system," said Jack Johnson, CEO of Iteris. "We believe this legislation will help accelerate widespread adoption of LDW and other Intelligent Vehicle Technologies that could help make our roads safer."

This legislation would give tax incentives when a vehicle is purchased with LDW technology. Individuals will be allowed a deduction up to $1000 on their personal income taxes. Buyers of commercial trucks purchased with LDW technology could exclude up to $5,000 from the Federal Excise Tax. Aftermarket installations would also be eligible for tax benefits under this proposed legislation.

Iteris, the company that introduced the world's first commercially available Lane Departure Warning system, currently has over 8,000 systems installed on commercial trucks in the U.S. and Europe. This Fall, Iteris will see its LDW technology debut on the first passenger car application when Nissan North America's luxury Infiniti division offers LDW as an option on 2005 models of its FX crossover sport utility vehicle.

Iteris' LDW system uses proprietary software algorithms and advanced imaging technology to create a cost-effective system that audibly warns drivers when their car or truck is unintentionally drifting out of its lane.

"We are extremely pleased that Representatives Crane, Rogers and Levin are sponsoring legislation that will help make our roads and highways safer," added Johnson. "Research has indicated that just one of these technologies, such as are lane departure warning systems, can address as much as 44 percent of total traffic fatalities."

Supported by the Intelligent Vehicle Technologies Coalition, the proposed legislation introduced to Congress this week would amend the Internal Revenue Code (IRC) and the Federal Excise Tax (FET) to encourage and accelerate nationwide production, retail sale and commercial/consumer use of IVT systems.

About Iteris, Inc.

Iteris Inc., is a majority owned subsidiary of Iteris Holdings Inc., and is a leading provider of outdoor vision systems and sensors that optimize the flow of traffic and enhance driver safety. Iteris combines outdoor image processing, traffic engineering, and information technology to offer a broad range of transportation and safety solutions. Iteris Holdings and Iteris Inc. are headquartered in Anaheim, California. Investors are encouraged to contact us at 714-774-5000, or at www.iteris.com.

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