BILL ANALYSIS
SB 728
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: SB 728
AUTHOR: Lowenthal
AMENDED: April 27, 2009
FISCAL: No HEARING DATE: May 4, 2009
URGENCY: No CONSULTANT: Randy Pestor
SUBJECT : AIR POLLUTON/PARKING CASHOUT PROGRAM
SUMMARY :
Existing law :
1) Provides the California Air Resources Board (ARB) with
primary responsibility for control of mobile source air
pollution, including adoption of rules for reducing vehicle
emissions and the specification of vehicular fuel
composition. (Health and Safety Code 39000 et seq. and
39500 et seq.). The ARB must coordinate efforts to attain
and maintain ambient air quality standards. (39003). Any
person violating any provision of vehicle air pollution
control requirements, or any regulation of the ARB adopted
pursuant to those requirements, for which a penalty is not
provided, is subject to a civil penalty not to exceed $500.
(43016).
2) Provides that air pollution control districts (APCDs) and
air quality management districts (AQMDs) have primary
responsibility for controlling air pollution from all
sources, other than emissions from mobile sources. (40000
et seq.).
3) Under Employee Parking Law requirements (43845):
a) Requires any employer of 50 or more persons in a
nonattainment air basin to offer a parking cash-out
program if the employer provides a parking subsidy to
employees.
b) Provides that the parking cash-out program does not
SB 728
Page 2
apply to an employer who has leased employee parking
before 1993, until the expiration of that lease or
unless the lease permits the employer to reduce, without
penalty, the number of parking spaces subject to the
lease.
c) Provides legislative intent that the cash-out
requirements apply only to employers who can reduce,
without penalty, the number of paid parking spaces they
maintain for the use of their employees and instead
provide their employees with the parking cash-out
option.
This bill , under Employee Parking Law requirements:
1) Provides for the ARB to impose the 43016 $500 civil
penalty for a violation of the Law.
2) Authorizes a city, county, APCD or AQMD to adopt a penalty
or other mechanism to ensure that an employer within the
jurisdiction of those entities is in compliance with the
Law. If the entity establishes a penalty, the entity
governing body must also establish procedures for providing
notice to employers that are in violation of the Law and
for appeal by the employer.
3) Provides that if a penalty is imposed on an employer by the
ARB and the local entity, only the ARB imposed penalty
applies.
COMMENTS :
1) Purpose of Bill . According to the author, "There is
general consensus that few employers currently comply with
the [parking cashout] program. ARB is authorized to
enforce the requirement, but to date, it has not issued any
citations to an employer."
The author notes that "Several local entities have expressed a
desire for this program to be enforced. Some have explored
the possibility of ensuring compliance with the program
themselves, but believe they do not have the authority to
SB 728
Page 3
do so because the program is administered by a state
agency. This bill remedies that concern by allowing
cities, counties, and air districts to establish by
regulation or ordinance a mechanism to ensure compliance
with the program."
2) Background on parking cash out . AB 2109 (Katz), Chapter
554, Statutes of 1992, enacted the parking cash-out
procedures in response to "a number of studies which show
that employees are much more likely to rideshare using
transit or carpools when they have to pay the full cost of
parking spaces" and a concern that employer subsidized
parking spaces distort the free market and encourage
single-occupant auto trips with all of the associated
problems like congestion and air pollution. The author
noted that it is difficult to attract users to alternative
travel opportunities if parking continues to be subsidized
and wanted to give employees a choice of accepting a
subsidized parking space or an equivalent cash amount. AB
2109 included five key components. AB 2109:
Required any employer of 50 or more persons in a
nonattainment air basin to offer a parking cash-out
program if the employer provides a parking subsidy to
employees, subject to certain requirements.
Allowed a parking cash-out program to be a mitigating
feature of a congestion management program.
Required a city or county to grant an appropriate
reduction in the parking requirements applicable to a
commercial development, at the request of a commercial
development that has implemented a parking cash-out
program, and allowed the space no longer needed for
parking purposes to be used for other appropriate
purposes.
Provided that parking cash-out payments received by
employees is taxable as income, except any amount used
for ridesharing purposes.
Allowed the parking cash-out program to be an employer
SB 728
Page 4
business expense deduction under the Personal Income Tax
Law and the Bank and Corporation Tax Law.
1) Legislative Analyst's Office (LAO) reports on parking
cashout . According to "A Commuter's Dilemma: Extra Cash
or Free Parking" (LAO, March 19, 2002), "California's
parking cash-out law seeks to reduce the incentive to drive
to work that is created when an employer offers free
parking. It does this by mandating that certain employers
also offer as an alternative to employees, the cash
equivalent of the parking space. While the law by design
affects a very limited share of the state's free parking
spaces statewide, it provides an additional tool for the
state to reduce commute driving and alleviate congestion
and pollution emission."
The LAO's review of various research on the issue found that
free parking appears to significantly increase the rate of
solo driving among commuters. For example, a 1990 study of
commute behavior in Los Angeles and Ottawa, Canada found
that solo driving fell by an average of 41% when employees
paid to park. A 2000 survey of Bay Area commuters "found
stark differences in travel behavior among commuters with
and without access to free parking," according to the LAO -
with 77% of commuters driving alone when free parking is
available and only 39% driving alone when they have to pay
to park. Also, only 4.8% commute by transit when free
parking is available, while 42% commute by transit without
free parking.
2) Support and opposition concerns . According to California
Council for Environmental and Economic Balance in opposing
SB 728, "After more than 15 years since the enactment of
California's parking cash-out program, employers,
commuters, and traffic congestion managers have developed
and applied numerous successful strategies to reduce
traffic congestion associated with commuting. The parking
cash-out program may work in some situations while other
strategies may work better in other situations."
According to this bill's sponsors, "SB 728 is a common-sense
approach to expanding compliance with the state's Parking
SB 728
Page 5
Cash-Out Program. First, the bill is voluntary; no
locality will be required to enforce the program on behalf
of ARB. Secondly, the bill requires the adoption of an
ordinance or regulation at the local level, ensuring
sufficient public deliberation before enforcement begins.
Thirdly, the bill is flexible as to the method of
enforcement."
3) Double Referral to Judiciary Committee . If this measure is
approved by this committee, the do pass motion must include
the action to re-refer the bill to the Senate Judiciary
Committee.
SOURCE : Environmental Defense Fund, National Resources
Defense Council
SUPPORT : None on file
OPPOSITION : California Council for Environmental and
Economic Balance