BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 728
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: lowenthal
VERSION: 4/27/09
Analysis by: Jennifer Gress FISCAL: no
Hearing date: May 14, 2009
SUBJECT:
Parking cash-out program: local enforcement
DESCRIPTION:
This bill allows cities, counties, and air districts to ensure
compliance with the state's parking cash-out law.
ANALYSIS:
Current law requires each employer with 50 or more employees
that provides a parking subsidy to employees to provide a cash
allowance to an employee who does not use the parking space an
amount equivalent to the amount the employer would otherwise pay
to provide that employee a parking space. This law is known as
the parking cash-out program.
The program is administered by the California Air Resources
Board (ARB). Under current law, ARB may impose a civil penalty
up to $500 per vehicle.
An employer must comply with the program if it has the following
characteristics:
Employs at least 50 persons, regardless of the number of work
sites.
Is located in an air basin designated nonattainment for any
state air quality standard. (Practically speaking, this means
every county except Lake County.)
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Provides free or subsidizes employee parking on leased spaces
(i.e., on spaces the employer does not own).
Can calculate the expense of the parking subsidy, which means
the parking is leased separately from the building or office
space.
Is able to reduce the number of leased parking spaces without
financial penalty.
This bill :
Allows cities, counties, and air districts to establish, by
ordinance or resolution, a penalty or other mechanism to
ensure compliance with the parking cash-out law.
Provides that if the local entity establishes a penalty, it
must also establish procedures for providing notice to
employers and appeal by employers of any penalty imposed.
Provides that if both ARB and a local entity impose a penalty
on an employer, then only the penalty imposed by ARB shall
apply.
COMMENTS:
1.Purpose . There is general consensus that few employers
currently comply with the parking cash-out law. ARB is
authorized to enforce the law, but to date it has not issued
any citations to an employer, contending that it is
impractical to identify the specific businesses that are
subject to the requirements of the law.
Several local entities have expressed a desire to have this
program be enforced. Some have explored the possibility of
ensuring compliance with the program themselves, but believe
they do not have the authority to enforce what is a state law.
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.Effect of free parking on commute behavior . According to a
2002 report prepared by the Legislative Analyst's Office (LAO)
to examine California's parking cash-out law, there is some
research to suggest that providing free parking encourages
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employees to drive to work alone to work. The report cited a
1990 study that found a 41 percent average reduction in solo
driving when employees had to pay to park. The LAO also noted
a 2000 survey of Bay Area commuters, which found that while 77
percent of commuters drive alone to work when free parking is
available, only 39 percent do so when they have to pay to
park.
3.Benefits of parking cash-out . The parking cash-out program
was established by AB 2109 (Katz), Chapter 554, Statutes of
1992, in response to a number of studies indicating that
employees are more likely to rideshare, use transit, or
carpool when they have to pay the full cost of parking spaces.
Additionally, concerns were raised that employer-subsidized
parking distorts the free market and encourages
single-occupant auto trips, contributing to traffic congestion
and air pollution.
According to the 2002 LAO report, as well as a more recent
report by the RAND Corporation, the parking cash-out program
is inexpensive to administer and offers numerous benefits,
including easing traffic congestion, improving air quality,
reducing greenhouse gas emissions, promoting social equity,
and supporting investments in other travel modes.
Traffic congestion and vehicle emissions. A 1997 study
conducted for ARB examining the impact of the parking cash-out
law on commute behavior found:
Solo driving dropped 17 percent, from 76 percent to 63
percent of employees.
Carpooling increased by 64 percent, from 14 percent to
23 percent of employees.
Transit use increased by 50 percent, from 6 percent to 9
percent.
Combined bicycling and walking increased 33 percent,
from 3 to 4 percent.
Vehicle miles traveled, along with their associated
emissions, decreased by 12 percent per employee per year.
Implementing parking cash-out resulted in "an average
reduction in carbon-dioxide emissions of 367 kg (or nearly
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half a ton) per employee per year."
Equity: When employers offer free or subsidized parking
without offering subsidies to employees for other travel
modes, employers reward driving over other modes and provide a
commute benefit to some employees but not others. The LAO
report on the cash-out program concludes: "By providing
parking cash-out, the employee is rewarded equally, whether he
or she walks, bikes, takes transit, carpools, or drives alone
to work."
Furthermore, women, minorities, and lower-income workers are
less likely to drive to work alone. Parking cash-out corrects
this imbalance by providing for equivalent subsidies
regardless of the travel mode.
Supports transit and carpool lane investments: The LAO notes
that the state and local governments invest hundreds of
millions of dollars on infrastructure intended to support
non-highway modes of travel, including new carpool lanes,
expanded and more frequent bus and rail service, and bicycle
and pedestrian facilities. Parking cash-out, by reducing the
incentive to drive alone, reinforces investments in other
modes of travel.
To the extent this bill will foster greater compliance with
the parking cash-out program, this bill has the potential to
promote greater choice among alternative commute options and
help reduce congestion, improve air quality, and reduce
greenhouse gas emissions associated with driving to work.
4.Opposition . In its letter of opposition, the California
Council for Environmental and Economic Balance (CCEEB) focuses
on the flaws it believes exist with the parking cash-out
program generally. CCEEB suggests that the law could lead to
unintended consequences such as employees who receive cash
continuing to drive in a single-occupant vehicle and simply
parking in nearby neighborhoods. Furthermore, CCEEB asserts
that "the parking cash-out program may work in some situations
while other strategies may work better in other situations."
By enforcing compliance with this program, CCEEB is concerned
that the bill could "stifle the implementation of more
cost-effective alternatives."
RELATED LEGISLATION
SB 728 (LOWENTHAL) Page 5
SB 518 (Lowenthal) establishes incentives to reduce governmental
or government-mandated subsidies for parking and reveal the true
cost of parking to drivers as a means to reduce traffic
congestion and greenhouse gas emissions. Senate Appropriations
Committee.
SB 425 (Simitian) specifies that an employer subject to the
parking cash-out program may not deduct the cost of providing
parking subsidies from its gross income unless it is in
compliance with the requirement. The bill also provides a tax
credit to small businesses in an amount equal to 80 percent of
costs incurred for qualified commute reduction expenditures.
Senate Appropriations Committee.
AB 1186 (Blumenfield) requires that lease agreements for
nonresidential buildings occupied by 50 or more persons that
offer parking to tenants list separately the costs for parking
from other costs included in the lease. Passed the Assembly
Transportation Committee on a 9 to 4 vote.
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
May 13, 2009)
SUPPORT: Environmental Defense Fund (co-sponsor)
Natural Resources Defense Council (co-sponsor)
Bay Area Air Quality Management District
OPPOSED: California Council for Environmental and Economic
Balance