BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1339|
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THIRD READING
Bill No: SB 1339
Author: Yee (D)
Amended: As introduced
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 5-1, 4/10/12
AYES: DeSaulnier, Kehoe, Lowenthal, Pavley, Rubio
NOES: Gaines
NO VOTE RECORDED: Harman, Simitian, Wyland
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-1, 4/30/12
AYES: Strickland, Blakeslee, Hancock, Kehoe, Lowenthal
NOES: Simitian
NO VOTE RECORDED: Pavley
SUBJECT : Commute benefit policies
SOURCE : Bay Area Air Quality Management District
DIGEST : This bill authorizes, until January 1, 2017, a
pilot program in the San Francisco Bay Area that allows the
Metropolitan Transportation Commission (MTC) and the Bay
Area Air Quality Management District (BAAQMD) to adopt
jointly an ordinance requiring certain employers to offer
their employees specified commute benefits.
ANALYSIS : Existing law creates the MTC, which serves as
the metropolitan planning organization and the regional
transportation planning agency for the nine-county San
Francisco Bay Area. While specific responsibilities may
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vary somewhat across regions, these types of planning
organizations generally are responsible for transportation
planning and allocating funds from certain state and
federal highway and transit programs. MTC consists of 14
commissioners appointed directly by local elected officials
from across the region and two members appointed by
regional agencies (Association of Bay Area Governments and
the Bay Conservation and Development Commission).
Existing law also creates the BAAQMD to regulate stationary
sources of air pollution in the nine-county bay area
region. Air quality management districts are responsible
for achieving and maintaining state and federal ambient air
quality standards within their jurisdiction. 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 the reduction of the number or length of vehicle
trips. A 22-member board composed of locally elected
officials from each of the nine Bay Area counties governs
the air district. BAAQMD's jurisdiction is similar to
MTC's except that it does not include northern Sonoma or
eastern Solano counties.
This bill:
1. Allows BAAQMD and MTC to jointly adopt a commute benefit
ordinance for their common jurisdiction that requires
employers to offer one of the following options:
A. A pretax option consistent with federal law
allowing covered employees to exclude from taxable
wages certain employee transit pass, vanpool, or
bicycle commuting costs.
B. An employer-paid benefit whereby the covered
employer offers a subsidy to offset the transit or
vanpool commuting costs. In 2013 the subsidy must be
equal to either the monthly cost of commuting or $75,
whichever is lower, and annually thereafter the
subsidy must be adjusted as consistent with the
California Consumer Price Index.
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C. Transportation furnished by the covered employer
at no or low cost to the covered employee in a
vanpool, bus, or multipassenger vehicle operated by
or for the employer.
2. Allows an employer offering an alternative commuter
benefit not identified above to seek approval of the
alternative benefit from BAAQMD or MTC, if the
alternative benefit provides at least the same benefit
in terms of reducing single-occupant vehicle trips as
any of the options above.
3. Provides that an employer participating in, or
represented by a transportation management association
that provides the employer's covered employees a benefit
that meets the requirements above, is deemed in
compliance and requires BAAQMD and MTC to communicate
directly with the transportation management association,
rather than the participating employers, to determine
compliance.
4. Requires that the commute benefit ordinance provide
covered employers with at least six months to comply
after adoption of the ordinance.
5. Requires a commute benefit ordinance to specify how the
implementing agencies will inform covered employers, how
compliance will be demonstrated, the procedures for
proposing and criteria used to evaluate an alternative
commuter benefit, and any consequences for
noncompliance.
6. Requires BAAQMD and MTC, if they implement an ordinance
on or before July 1, 2016, to report to the Legislature
and sets various requirements for that report.
7. Defines "covered employer" to mean any employer for
which an average of 50 or more employees perform work
for compensation on a full-time basis within the area
where a commute benefit ordinance is adopted.
8. Defines "covered employee" to mean an employee who
performed at least an average of 20 hours of work per
week within the pervious calendar month within the area
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where the ordinance is adopted.
9. Provides that the statutory or regulatory authority of
BAAQMD and MTC is not limited or restricted.
10.Provides the above provisions sunset and are repealed
January 1, 2017.
Comments
Commute benefit program outcomes . The ordinance proposed
in this bill provides three options from which businesses
can choose to achieve compliance, one of which is a pre-tax
option whereby an employer allows an employee to opt to
have the employer deduct from his or her gross income the
cost incurred to pay for alternative commuting options,
such as the costs of a transit pass, vanpool service, or
bicycle commuting. This pre-tax program effectively
discounts these alternative commuting costs by 30 to 40%
for employees. In addition to reducing costs for employees
who choose to participate, such a program reduces the
payroll tax that an employer pays on employees' wages by
approximately nine percent. According to the sponsor, in
cities that have ordinances similar to the one this bill
proposes, most employers choose to comply by establishing a
pre-tax program.
Research suggests that the savings made available by
programs such as this is often enough to encourage some
employees to shift commute modes. Evaluating programs
across the country that incorporate the pre-tax option, the
Transit Cooperative Research Program, sponsored by the
Federal Transit Administration, concluded in 2005 that
commute benefits programs can be effective at increasing
transit ridership, reducing vehicle travel, and reducing
parking demands at a regional level. Although the impacts
of these programs on travel behavior at individual
worksites vary based on various factors, these benefits
programs usually increase transit use on a regional scale.
This bill is similar to SB 582 (Emmerson), Session of 2011,
except that this bill applies only to the San Francisco Bay
Area and is limited to businesses of 50 employees or more.
(Amendments taken in the Assembly changed the author of SB
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582 from Senator Emmerson to Senator Yee). In his SB 582
veto message Governor Brown wrote:
This bill authorizes a regional planning organization,
under certain conditions, to require businesses with 20
or more employees to offer commute benefits.
City and county governments already can mandate programs
of this type-and some have.
While I support the goal of reducing vehicle trips, this
bill would impose a new mandate on small businesses at a
time of economic uncertainty.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/1/12)
Bay Area Air Quality Management District (source)
AFSCME
Alameda-Contra Costa Transit District
American Lung Association
Bayer HealthCare
California Air Pollution Control Officers Association
California Transit Association
Cities of Burlingame and Millbrae
Enterprise Rent-A-Car Company
Metropolitan Transportation Commission
Regional Asthma Management and Prevention
San Francisco Chamber of Commerce
San Francisco Lesbian Gay Bisexual Transgender Community
Center
San Francisco Planning and Urban Research Association
San Francisco Small Business Commission
San Mateo County Transit District
Schumacher and Walker Insurance Associates
Sierra Club California
Union Square Business Improvement District
Walk San Francisco
Wendel, Rosen, Black and Dean LLP
OPPOSITION : (Verified 5/1/12)
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California Taxpayers Association
ARGUMENTS IN SUPPORT : According to the sponsor, BAAQMD,
this bill is intended to give itself and MTC a new tool to
help reduce traffic congestion, cut 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.
ARGUMENTS IN OPPOSITION : According to the California
Taxpayers Association, "Existing state and federal
ridesharing tax incentives have been available to employers
for almost three decades on a voluntary basis - they are
not mandated by government?many companies with 50 or more
employees simply cannot afford to offer ridesharing
benefits, especially when business is slow."
JJA:kc 5/1/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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