BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1339
                                                                  Page  1

          Date of Hearing:   June 18, 2012

                        ASSEMBLY COMMITTEE ON TRANSPORTATION
                               Bonnie Lowenthal, Chair
                  SB 1339 (Yee) - As Introduced:  February 24, 2012

           SENATE VOTE  :  30-7
           
          SUBJECT  :  Commute benefit policies

           SUMMARY  :  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 jointly adopt an ordinance 
          requiring covered employers to offer covered employees specified 
          commute benefits.  Specifically,  this bill  :  

          1)Allows MTC and the BAAQMD to jointly adopt a commute benefit 
            ordinance that requires covered employers, as defined, to 
            offer one of the following options to their covered employees, 
            as defined:  
             
             a)   A pretax option consistent with federal law allowing 
               covered employees to exclude from taxable wages 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; and,

             c)   Transportation furnished by the covered employer at no 
               or low cost to the covered employee in a vanpool, bus, or 
               multi-passenger vehicle operated by or for the employer.  

          1)Provides that a covered employer is not prevented from 
            offering a more generous commuter benefit if consistent with 
            the commute benefit ordinance.  

          2)Allows a covered employer offering an alternative commuter 
            benefit not identified in a) - c) above, to seek approval of 
            the alternative benefit from either MTC or the BAAQMD under 
            specified conditions.  

          3)Requires that the commute benefit ordinance allow covered 
            employers with at least six months to comply after adoption of 








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            the ordinance.  

          4)Establishes the role of transportation management associations 
            in the place of covered employers in determining compliance 
            with 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)Provides that the statutory or regulatory authority of the MTC 
            or the BAAQMD is not limited or restricted by the provisions 
            of this bill.  

          7)Requires MTC or the BAAQMD, on or before July 1, 2016, if they 
            implement a commute benefit ordinance, to jointly submit a 
            report to the transportation policy committees of the 
            Legislature on the effectiveness of the ordinance and sets 
            requirements for that report.  

          8)Prohibits the use of MTC's federal planning funds to be used 
            for the implementation and enforcement of the benefit commute 
            ordinance.  

          9)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.  

          10)Defines "covered employee" to mean an employee who performed 
            at least an average of 20 hours of work per week within the 
            previous calendar month within the area where the ordinance is 
            adopted.  

          11)Sunsets the provisions of this bill on January 1, 2017.  

           EXISTING LAW  :  

          1)Provides air districts, such as the BAAQMD, with primary 
            responsibility for controlling air pollution from all sources, 
            other than emissions from mobile sources.  Establishes the 
            jurisdiction of the BAAQMD for regulating stationary sources 
            of air pollution within the nine counties that surround San 








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            Francisco Bay (although portions of two counties are partially 
            excluded): Alameda, Contra Costa, Marin, Napa, San Francisco, 
            San Mateo, Santa Clara, southwestern Solano, and southern 
            Sonoma counties.  The BAAQMD is governed by a 22-member board 
            that is comprised of all locally elected officials.  

          2)Authorizes BAAQMD to adopt and implement regulations to 
            encourage or require the use of measures which reduce the 
            number or length of vehicle trips.  

          3)Prohibits air districts or any other public agency, including 
            a congestion management agency, from requiring an employer to 
            implement an employee trip reduction program unless the 
            program is expressly required by federal law.  

          4)Under federal law, establishes metropolitan planning 
            organizations (MPOs) for the purpose of developing regional 
            transportation plans in urbanized areas with populations 
            greater than 50,000.  

          5)Creates MTC, which serves as the MPO and the regional 
            transportation planning agency for the nine-county San 
            Francisco Bay Area (the same counties within the jurisdiction 
            of BAAQMD except that the MTC jurisdiction includes both 
            Solano and Sonoma Counties in their entirety).  MTC is 
            generally responsible for transportation planning, 
            coordinating, and allocating funds from certain state and 
            federal highway and transit programs.  Its voting members 
            consists of fourteen 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).  

          6)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.  

          7)Requires the California Air Resources Board (ARB) to establish 
            greenhouse gas emission reduction targets for vehicles and 
            requires a regional transportation plan to include a 
            sustainable communities strategy designed to achieve the 
            targets.  








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          8)Under federal law, allows employers to allow employees to pay 
            for transit and vanpool expenses with pre-tax dollars, up to 
            $230 per month.  

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  This bill is basically a reintroduction of a measure 
          that was vetoed by the Governor, SB 582 (Yee of 2011), on August 
          1, 2011.  

          This bill would authorize, until January 1, 2017, MTC and the 
          BAAQMD to jointly adopt a regional ordinance requiring certain 
          employers located within their common area of jurisdiction to 
          offer employees specified commute benefits with the goal of 
          reducing single-occupant vehicle trips.  If a commute benefit 
          ordinance is adopted, a joint assessment of the effectiveness of 
          the ordinance is required of MTC and the BAAQMD by July 1, 2016. 
           

          The author indicates that a regional commute benefit policy will 
          give MTC and the BAAQMD a new tool to help achieve the 
          greenhouse gas reduction targets set by ARB and reduce other 
          tailpipe emissions and further contends that "without 
          legislation, such a commute benefit requirement would not be 
          allowed."  

           Current local ordinances  :  Several cities, including Berkeley, 
          Richmond, and San Francisco, and San Mateo County, have already 
          adopted commute benefit ordinances with similar options as those 
          provided in this bill.  According to the author, "In the cities 
          where these policies are already in place, most employers have 
          chosen the first option.  This option provides a significant 
          financial benefit to the employer by reducing payroll taxes 
          (roughly 9% of subject wages) and lowers employee commute costs 
          by up to 40%."  Accordingly, although several entities have 
          implemented their own local ordinances, this bill will establish 
          a uniform procedure to be followed by all covered employers 
          within the San Francisco Bay Area region.  

           Increased role for MTC  :  MTC, as an urbanized area with more 
          than 50,000 persons, is the designated MPO with the purpose of 
          developing the area's regional transportation plan, as required 
          by federal law.  MTC is also the regional transportation 
          planning agency established under state law and is generally 








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          responsible for transportation planning and allocating funds 
          from certain state and federal highway and transit programs.  
          While MTC can use its authority to program funding for projects 
          that it deems to 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 private 
          sector businesses as this bill provides.  

          Furthermore, SB 375 (Steinberg) Chapter 728, Statutes of 2008, 
          requires ARB to develop regional targets for greenhouse gas 
          emission reductions for the automobile and light-duty truck 
          sector and requires MTC to develop and incorporate into its 
          regional transportation plan a sustainable communities strategy 
          that demonstrates how the region will achieve its regional 
          target.  While MTC does not have authority over many elements 
          addressed by a sustainable 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.  On a limited pilot basis, this bill would confer 
          additional options to the MTC for their SB 375 compliance 
          efforts in reducing greenhouse gas emissions from single 
          occupancy vehicle trips.  

           Federal planning funds  :  Federal planning funds allocated to MTC 
          are authorized for general transportation planning purposes.  
          Implementation and enforcement of the commute benefit ordinance 
          would not necessarily be consistent with the purposes for which 
          the federal planning funds are allocated and, accordingly, such 
          uses are expressly prohibited by this bill.  

           Non-elected local voting commissioner  :  This bill prescribes new 
          roles and responsibilities for MTC on a limited-term basis for 
          enacting regional commute benefit option ordinances.  However, 
          the current governing board of MTC is not fully comprised of 
          locally-elected, voting members.  One MTC commissioner was 
          appointed by a regional body and is not elected by popular vote, 
          unlike all the other commissioners.  Accordingly, that 
          commissioner is not accountable to the local citizenry but is 
          accountable to that appointing power.  For the enactment of the 
          regional commute benefit ordinance as this bill provides, should 
          the MTC vote be from only the 13 other local elected officials?  

           








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          Commute benefit option implementation questions  :  There are 
          questions related to the implementation of this bill's impact.  
          This bill does not specify if the commute benefit ordinance will 
          be enforced by BAAQMD or MTC, or both.  How will these entities 
          know whether or not a covered employer is complying with the 
          ordinance?  What are the penalties for failure to comply?  If 
          there are monetary sanctions, how will the moneys be 
          distributed?  According to the sponsors, this bill is silent 
          regarding answers to these questions in order to allow 
          flexibility in developing a compliance regime that meets the 
          needs of covered employers within the region.  

           Support and opposition  :  Writing is support of this bill, 
          numerous entities indicate that the bill promotes convenient 
          alternatives to single-occupant vehicle travel by making them 
          more cost-effective and provides "win-win benefits" to both 
          employers and employees in terms of lower payroll and income 
          taxes and significant public benefits in terms of reduced 
          tailpipe emissions and traffic congestion.  

          Writing in opposition to this bill, the California Manufacturers 
          and Technology Association and the California Taxpayers 
          Association indicate that the costs of implementing and 
          maintaining an employee fringe benefit program can be high and 
          is especially problematic for state and local government 
          employers as well as private employers "during this time of 
          economic crisis."  

           Governor's veto  :  This bill is essentially the same as SB 582, 
          which this committee passed last year on a vote of 14 to 0, on 
          June 21, 2011, but was ultimately vetoed.  In his veto message, 
          the governor expressed concerns that SB 582 would impose a new 
          mandate on small businesses at a time of economic uncertainty.  
          He further indicated that local governments can already mandate 
          these programs and have done so.  In response, the author has 
          restricted the bill to establish a pilot program only for San 
          Francisco Bay Area employers and not extend its provisions 
          statewide.  Further, this bill lowers the number of businesses 
          potentially affected by the ordinance by increasing the size 
          threshold from businesses with 20 employees to businesses with 
          50 employees.  This change reduces the number affected from 14% 
          to only 5% of the businesses in the region.  Meanwhile, the 
          ordinance would still apply to 60% of all employees in the 
          affected region.  









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          REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          Bay Area Air Quality Management District (co-sponsor)  
          Metropolitan Transportation Commission (co-sponsor)  
          Alameda-Contra Costa Transit District  
          American Federation of State, County and Municipal Employees  
          American Lung Association in California
          Bayer HealthCare
          California Air Pollution Control Officers Association  
          California Transit Association  
          City of Burlingame  
          Enterprise Rent-A-Car Company of San Francisco  
          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
          Transform  
          Wendel, Rosen, Black and Dean

           Opposition 
           
          California Manufacturers and Technology Association
          California Taxpayers Association

           
          Analysis Prepared by  :   Ed Imai / TRANS. / (916) 319-2093