BILL ANALYSIS
SB 728
Page 1
Date of Hearing: June 29, 2009
ASSEMBLY COMMITTEE ON TRANSPORTATION
Mike Eng, Chair
SB 728 (Lowenthal) - As Amended: April 27, 2009
SENATE VOTE : 21-16
SUBJECT : Air pollution: Parking cash-out program
SUMMARY : Authorizes local entities to enforce the provisions of
the parking cash-out program (PCOP). Specifically, this bill :
1)Clarifies the authority of the California Air Resources Board
(ARB) to impose a $500 civil penalty for a violation of PCOP.
2)Authorizes a city, county, air pollution control district or
air quality management district to adopt a penalty or other
mechanism to ensure that an employer within the jurisdiction
of those entities is in compliance with PCOP. If the entity
establishes a penalty, the entity governing body must also
establish procedures for providing notice to employers that
are in violation of PCOP 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.
EXISTING LAW :
1)Requires that, in any air basin designated as an air quality
nonattainment area, that each employer of 50 persons or more
who provides a parking subsidy to employees, to offer a
parking cash-out program. Under PCOP, an employer offers to
provide a cash allowance to an employee equivalent to the
parking subsidy that the employer would otherwise pay to
provide the employee with a parking space. Further, PCOP
provides limited exemptions to employers as specified.
2)Establishes ARB to implement air quality mitigation programs
that reduce emissions from motor vehicles, fuels, consumer
products, and sources of air toxics at the state level.
3)Provides that air pollution control districts and air quality
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management districts have primary responsibility for
controlling air pollution from all sources, other than
emissions from mobile sources.
4)Authorizes ARB to administer PCOP. Violations of PCOP are
subject to civil penalties not to exceed $500 per vehicle per
civil action.
5)Pursuant to AB 32 (Nunez and Pavley) Chapter 488, Statutes of
2006, enacts the Global Warming Solutions Act of 2006, that
directs ARB to implement a statewide greenhouse gas emissions
reduction strategy that would reduce emissions by 25% by 2020.
FISCAL EFFECT : Unknown
COMMENTS :
PCOP : Existing law requires certain employers that provide 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. The law establishes PCOP that is
administered by ARB. For compliance with PCOP, an employer must
offer a cash-out option if the company has the following
characteristics:
1)Employs at least 50 persons, regardless of the number of work
sites.
2)Is located in an air basin designated nonattainment for any
state air quality standard.
3)Provides free or subsidized employee parking on leased spaces
(i.e., on spaces the employer does not own).
4)Can calculate the expense of the parking subsidy, which means
the parking is leased separately from the building or office
space.
5)Is able to reduce the number of leased parking spaces without
financial penalty.
Although ARB is the agency responsible for implementing PCOP,
existing law does not require ARB to enforce or monitor the
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program; nor does it contain reporting requirements for
employers, which makes it difficult for ARB to assess whether or
not an employer is in compliance. The potential of parking
cash-out to alleviate congestion and reduce greenhouse gas
emissions depends on assessing employer compliance with the
cash-out requirement.
According to ARB, they are authorized to administer PCOP.
However, they indicate that "the parking cash-out mandate is
imposed directly on the employer who must meet the criteria of
the statute. This type of statute is often described as
self-implementing." As there are penalties for noncompliance,
ARB would apply the civil penalty per vehicle in a parking space
subject to the cash-out program. In the administration of the
parking cash-out law, ARB's focus is to facilitate compliance
before seeking civil penalties.
The author contends that "there is general consensus that few
employers currently comply with the program. ARB is authorized
to enforce the requirement, but to date, it has not issued any
citations to an employer. 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 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."
Legislative Analyst's Office (LAO) Report : In the March 2002
report by the LAO that examines the PCOP, it cited a 1990 study
that found a 41% 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% of commuters
drive alone to work when free parking is available, only 39% do
so when they have to pay to park. Further, the report indicates
that PCOP 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.
Lastly, the report indicates that only 4.8% commute by transit
when free parking is available, while 42% commute by transit
without free parking. Although the LAO report makes numerous
findings in support of PCOP and also provides recommendations
and options to improve the effectiveness of the parking cash-out
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law, it does not make the recommendation that this bill seeks to
implement.
Support : Writing in support of this bill, its co-sponsors, the
Environmental Defense Fund and the National Resources Defense
Council, indicate that "ARB lacks the staff resources to commit
to the necessary enforcement. Alternately, many localities have
already begun requiring Parking Cash-Out and others are
interested in doing so. SB 728 gives tools to those communities
while not requiring California localities to enforce the
program. SB 728 is a common-sense approach to expanding
compliance with the state's Parking Cash-Out Program. Firstly,
this bill is voluntary; no locality will be required to enforce
the program on behalf of ARB. Secondly, this bill requires the
adoption of an ordinance or regulation at the local level,
ensuring sufficient public deliberation before enforcement
begins. Thirdly, this bill is flexible as to the method of
enforcement. A locality may choose to make it a requirement for
obtaining certain licenses or approvals, or could enforce using
a violation-fine approach; neither approach is required in
SB 728."
Opposition : Writing in opposition to this bill, the California
Council for Environmental and Economic Balance (CCEEB) argues
that "In the abstract, a 'parking cash-out program' may sound
like a good way to encourage commuting employees to abandon the
single-occupant car for travel modes that reduce traffic
congestion. CCEEB is aware of several theoretical and anecdotal
studies reinforcing this impression. Based on actual
experience, however, CCEEB finds that the accounting for
employee parking subsidies is not only sensitive too, but also
obscured by, very site-specific, employer-employee relations.
Moreover, the parking cash-out program may lead to unintended
consequences, such as employees continuing to commute as
single-occupant drivers and parking in surrounding neighborhoods
or in nearby parking facilities while accepting cash for not
parking in the company parking lot. The enforcement of a
parking cash-out program is almost certain to invoke the law of
unintended consequences."
Related bills : AB 1186 (Blumenfield) of 2009, 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. That
bill passed out of the Assembly Transportation Committee, the
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Senate Environmental Quality Committee, and is awaiting hearing
in the Senate Transportation and Housing Committee.
SB 425 (Simitian) of 2009, specifies that an employer subject to
the requirement to provide a 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. That
bill passed the Senate Transportation and Housing Committee and
is awaiting hearing in the Senate Revenue and Taxation
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
Environmental Defense Fund (co-sponsor)
National Resources Defense Council (co-sponsor)
Bay Area Air Quality Management District
California State Association of Counties
National Parks and Conservation Association
Office of the Mayor of Los Angeles
Planning and Conservation League
Opposition
California Council for Environmental and Economic Balance
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093