BILL ANALYSIS Ó
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 582
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: Emmerson
VERSION: 3/29/11
Analysis by: Jennifer Gress FISCAL: no
Hearing date: April 5, 2011
SUBJECT:
Commute benefit policies
DESCRIPTION:
This bill authorizes a metropolitan planning organization (MPO)
and an air district to adopt jointly an ordinance that requires
certain employers located within their common area of
jurisdiction to offer their employees specified commute benefits
with the goal of reducing single-occupant vehicle trips.
ANALYSIS:
Metropolitan Planning Organizations and air districts
Metropolitan Planning Organizations (MPOs) are agencies
established under federal law in urbanized areas with more than
50,000 persons with the purpose of developing the region's
transportation plan (RTP), as required by federal law. There
are 18 MPOs in California, which together cover 37 counties.
Many MPOs are also the region's regional transportation planning
agency (RTPA) established under state law. While the specific
responsibilities of an RTPA may vary somewhat across each
region, RTPAs generally have responsibility for transportation
planning and allocating funds from certain state and federal
highway and transit programs.
Air quality management districts and air pollution control
districts (air districts) are agencies established under state
law that are responsible for achieving and maintaining state and
federal ambient air quality standards within their jurisdiction.
All areas of the state are covered by an air district.
Existing law broadly authorizes air districts to adopt and
enforce rules and regulations to achieve these standards,
including adopting rules to reduce or mitigate emissions from
indirect and areawide sources of air pollution and to encourage
or require the use of measures that reduce the number or length
of vehicle trips. Air districts or any other public agency,
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including a congestion management agency, may not, however,
require an employer to implement an employee trip reduction
program unless the program is expressly required by federal law.
Laws designed to reduce single-occupant vehicle trips
There exist in state law few programs or requirements that seek
to encourage commuters to use a mode of transportation other
than the single-occupant vehicle. One such requirement is
parking cash-out, which 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 in an amount equivalent to the amount the employer
would otherwise pay to provide that employee a parking space.
This bill authorizes an MPO and an air district, beginning
January 1, 2013, to adopt jointly an ordinance that requires
certain employers within their common area of jurisdiction to
offer employees specified commute benefits with the goal of
reducing single-occupant vehicle trips. In doing so, this bill
does all of the following:
Provides that the commute benefit ordinance may only apply to
employers with, at the discretion of the MPO and air district,
either 20 or more or 50 or more full-time employees, which the
bill defines as "covered employers."
Specifies commute benefit options that the ordinance must
require an employer to provide to employees, as follows:
o A pre-tax program consistent with the requirements under
federal law to allow employees to exclude their commuting
costs incurred for transit passes, vanpool charges, or
bicycling from taxable wages up to the maximum allowed by
federal law.
o An employer-paid benefit whereby the employer offers
employees a subsidy to offset the costs of commuting via
public transit or a vanpool. The subsidy shall be equal to
either the monthly cost of commuting by transit or vanpool,
or $75, whichever is lower. The subsidy amount shall be
adjusted annually in a manner consistent with the
California Consumer Price Index.
o An employer-provided transit program whereby the
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employer provides transportation to employees at no cost,
or low cost as determined by the MPO, in a vanpool or bus
or similar multi-passenger vehicle operated by or for the
employer.
Allows an MPO to approve an alternative commuter benefit that
an employer is offering, or proposing to offer, in lieu of one
of the three options specified in this bill, if the MPO
determines that the alternative provides at least the same
benefit of reducing single-occupant vehicle trips as any of
the three options.
Requires that the ordinance give employers at least six months
to comply after it is adopted and that it specify the method
by which the implementing agency will inform covered employers
about the ordinance, how the employer can demonstrate
compliance, the procedures for proposing and the criteria that
will be used to evaluate an alternative commuter benefit, and
the consequences to the covered employer for non-compliance.
Provides that the commute benefit must apply to a "covered
employee," defined as "an employee who performed at least 20
hours of work per week within the previous calendar month
within the jurisdiction covered by the ordinance.
Provides that in the region served by the MPO known as the
Southern California Association of Governments (SCAG), the
agency authorized to adopt the commute benefit ordinance in
conjunction with the air district is the county transportation
commission (i.e., Imperial County Transportation Commission,
Los Angeles County Metropolitan Transportation Authority,
Orange County Transportation Authority, Riverside County
Transportation Commission, San Bernardino Associated
Governments, and the Ventura County Transportation
Commission).
Provides that nothing in this bill shall restrict the
statutory or regulatory authority of an MPO or an air
district.
COMMENTS:
1.Purpose . According to the sponsors, the Bay Area Air Quality
Management District and the Metropolitan Transportation
Commission, this bill is intended to give MPOs and air
districts a new tool to help reduce traffic congestion, cut
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air pollution, and achieve the transportation-related
greenhouse gas reduction targets established by the Air
Resources Board in 2010 consistent with SB 375 (Steinberg),
Chapter 728, Statutes of 2008.
2.Standard too low ? The bill requires that ordinances include
three options for businesses to choose when complying, one of
which is a pre-tax option whereby an employer establishes a
program that allows an employee to opt to have deducted from
his or her gross income the cost he or she incurs to pay for
transportation benefits provided by the employer,
specifically, the costs of a transit pass, vanpool service, or
bicycle commuting. A pre-tax program, therefore, effectively
discounts these commuting costs by 30 to 40 percent for
employees. In addition to reducing the costs to take transit,
vanpool, or commute by bicycle for employees, such a program
reduces the payroll tax, approximately 9 percent, that an
employer pays on employees' wages. According to the sponsors,
in cities that have ordinances similar to that which this bill
proposes, most employers choose to comply by establishing a
pre-tax program. A similar result seems likely under
ordinances adopted as provided by this bill.
It is not clear, however, that pre-tax programs actually
reduce single-occupant vehicle trips. Considering that a
monthly transit pass in San Francisco costs $70 per month (the
cost of a "muni" pass for public transit in San Francisco),
this benefit would result in a discount to the employee of $21
to $28 per month. Is this $30 discount sufficient to
encourage those employees who currently drive alone to work to
ditch their car and switch to a different mode of transport?
At the time this analysis was prepared, no data were available
to illustrate whether pre-tax benefit programs resulted in a
mode shift from a single-occupant vehicle to transit, vanpool,
or bicycle commuting. The committee may wish to consider
whether the pre-tax option should be a floor, rather than a
ceiling, such that the ordinance must require employers to
offer the pre-tax option, which provides a cost-savings to
employers, plus one of the other options.
3.Raising the standard: "covered employers" and "covered
employees ." The cities of Berkeley, Richmond, and San
Francisco have all adopted commute benefit ordinances and San
Mateo County is currently considering one. These ordinances
provide covered employers the same three options as those
provided for in this bill, but those ordinances cover more
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employers ("covered employers") and require that more
employees be permitted to take advantage of the benefits
("covered employees"). For example, the ordinances for
Berkeley and Richmond apply to employers with 10 or more
employees. When considering who constitutes an "employee,"
the ordinance provides that an employee is any person who
works for compensation on a full-time, part-time, or temporary
basis. San Francisco's ordinance targets employers with 20 or
more employees but also counts as an employee any person who
works for compensation. This bill, by contrast, targets
employers with 20 or more employees, but when determining who
is an "employee," counts only those who work on a full-time
basis. Furthermore, this bill gives the MPO the option of
subjecting only employers with 50 or more employees to the
ordinance.
To increase the number of persons who may receive commute
benefits, thereby increasing the likelihood that the ordinance
will result in more people taking transit, using a vanpool, or
commuting by bicycle, the committee may wish to consider
amending the bill in two ways with respect to defining which
employers should be subject to an ordinance. First, the
committee may wish to delete the provision that allows MPOs to
target only those employers with 50 or more employees.
Second, when defining who counts as an employee for purposes
of determining the size of an employer, the committee may wish
to define employee as someone who works for compensation "on a
full-time, part-time or temporary basis," which is consistent
with how other ordinances are structured today, and delete the
provision that counts only those employees that work on a
full-time basis.
With regard to defining which employees shall be eligible for
a commute benefit, all three cities require that commute
benefits be provided to any employee who works an average of
10 hours per week for the past 12 months. This bill only
requires employees who work "at least 20 hours per week within
the previous calendar month."
By limiting required commute benefits to employees "who
performed at least 20 hours of work per week within the
previous calendar month," employers would not have to provide
benefits to bona fide employees who do not have the
opportunity to work as many hours as other employees. These
employees also generate vehicle trips to commute to work and,
if they are under-employed, may be more likely to take
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advantage of commute benefits and reduce driving trips than
more fully-employed persons. The committee may wish to
consider an amendment specifying that commute benefits must be
offered to employees who work at least 10, instead of 20,
hours per week.
Finally, this bill is intended to apply to part-time
employees, but such employees may not be scheduled to work
regular hours each week, working 18 hours one week and 22 the
next. Instead of specifying that employees must work "at
least 20 hours of work per week within the previous calendar
month," the committee may wish to consider an amendment to
specify that the employee must work "at least an average of 20
hours of work per week within the previous calendar month."
4.Mission creep or climate-change fighter ? Under current law,
MTC's primarily responsibility is "to provide comprehensive
regional transportation planning" to the nine-county Bay Area
region. The regional transportation plan must include all
elements of the region's transportation system, including
highways, mass transit, and the transbay bridges, with
particular emphasis on the interface of each mode with the
other modes. In its planning role, MTC is also responsible
for establishing priorities for the construction,
modification, and maintenance of various segments of the
transportation system. As an RTPA, MTC also has authority to
program projects in the regional transportation improvement
plan and to allocate certain federal and state highway and
transit funds. While MTC can use its authority to program for
funding those projects that it deems meet regional priorities
as a means to compel local transportation agencies within its
jurisdiction to adopt policies and programs consistent with
regional transportation goals, it does not have authority to
directly govern either public agencies or private actors
(businesses in this case) as this bill provides.
Furthermore, SB 375 (Steinberg), Chapter 728, Statutes of
2008, requires the Air Resources Board (ARB) to develop
regional targets for greenhouse gas emission reductions for
the automobile and light-duty truck sector and requires MPOs
to develop and incorporate into the regional transportation
plan a sustainable communities strategy that demonstrates how
the region will achieve its target. While an MPO does not
have authority over many elements addressed by a sustainable
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communities strategy, such as local land use, the policy
contained in SB 375 reflects climate change as a regional
concern and acknowledges that regional planning agencies have
a role to play in reducing greenhouse gas emissions.
As the committee considers this bill, it may wish to balance
potential concerns with increasing an MPO's existing scope of
authority, in particular MTC's, with the state's desire to
address climate change at the regional level.
5.Unknowns . There exist several unknowns that make it difficult
to assess the potential impacts of the bill. First, the bill
does not specify how a commute benefit ordinance will be
enforced. How will an MPO or air district know whether or not
an employer is complying with the ordinance? What are the
penalties for failure to comply? The bill is silent with
regard to these provisions in order to give each MPO and air
district seeking to establish an ordinance the flexibility to
develop a compliance regime that meets the needs of employers
within their own region.
6.How many employers may be affected by this bill ? Based on
data from the third quarter of 2009 from the California
Employment Development Department, about 11 million employers
in California have 20 or more employees and 8.6 million have
50 or more. Rural areas are generally not included within the
jurisdiction of an MPO, however, so the total number would be
somewhat smaller. Within the Bay Area, MTC's jurisdiction
includes the counties of Alameda, Contra Costa, Marin, Napa,
San Francisco, San Mateo, Santa Clara, and Solano. The Bay
Area Air Quality Management District covers those same
counties, but only the southwestern portion of Solano County
and the southern portion of Sonoma County. In those nine
counties, there are approximately 2.4 million employers with
20 or more employees and about 1.8 million with 50 or more
employees.
7.Technical amendment . When referring to air districts, the
bill specifies only air quality management districts. It is
the author and sponsor's intent that the bill include all
local air districts; therefore, an amendment is needed to
include air pollution control districts.
8.Arguments in opposition . The Sacramento Metropolitan Air
Quality Management District opposes this bill because it is
concerned about "imposing burdens on employers (especially
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small businesses) during these challenging economic times and
the appropriateness of including part-time employees in such
schemes."
9.Double-referral . This bill is double-referred to this
committee and to the Committee on Environmental Quality. If
this committee passes the bill, it will therefore be referred
to the Environmental Quality Committee.
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POSITIONS: (Communicated to the Committee before noon on
Wednesday,
March 30, 2011)
SUPPORT: Bay Area Air Quality Management District
(co-sponsor)
Metropolitan Transportation Commission
(co-sponsor)
American Lung Association
Britannia Oyster Point Commute Program
E.L. Williams Realty
Enterprise Holdings
Environmental Defense Fund
Genentech
San Francisco Chamber of Commerce
South San Francisco Business Center
Sunnyvale City Center
TransForm
T.Y. Lin International
Water Emergency Transportation Authority
Wendel, Rosen, Black & Dean LLP
OPPOSED: Sacramento Metropolitan Air Quality Management
District