BILL ANALYSIS Ó SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Isadore Hall, III Chair 2015 - 2016 Regular Bill No: AB 229 Hearing Date: 7/14/2015 ----------------------------------------------------------------- |Author: |Chang | |-----------+-----------------------------------------------------| |Version: |7/7/2015 Amended | ----------------------------------------------------------------- ------------------------------------------------------------------ |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Felipe Lopez | | | | ----------------------------------------------------------------- SUBJECT: State employees: travel reimbursement DIGEST: This bill prevents a state agency from prohibiting state employees traveling on official business from using transportation provided by a transportation network company, such as Uber or Lyft, or lodging in a short term rental as defined. ANALYSIS: Existing law: 1)Reimburses employees for all necessary and actual expenses they incur when they travel on official state business. 2)Requires the Director of the of the Department of Human Resources (CalHR) to adopt general rules and regulations that limit the amount, time, and place of expenses and allowances to be paid to officers, employees, experts, and agents of the state while traveling on official state business. This bill: 1)Prevents a state agency from prohibiting state employees traveling on official business from using transportation provided by a transportation network company or lodging in a short term rental. AB 229 (Chang) Page 2 of ? 2)Defines "short-term rental" as a residential property that is rented to a visitor for fewer than 30 days through a centralized online platform whereby the rental is advertised and payments for the rental are securely processed. 3)Specifies that for purposes of travel reimbursement, a short-term rental shall be considered a commercial lodging establishment. 4)Defines a "transportation network company" as an organization, including, but not limited to, a corporation, limited liability company, partnership, sole proprietor, or any other entity, operating in California that provides prearranged transportation services for compensation using an online-enabled application or platform to connect passengers with drivers using a personal vehicle. 5)Provides that reimbursement shall be provided for necessary and actual expenses, consistent with the agency's policies for reimbursement of other lodging establishments or other vehicles for hire. 6)Encourages the University of California to adopt travel reimbursement policies in accordance with the provisions of this bill. Background Purpose of the bill. According to the author, "There are over 271,000 active state employees in various state departments and agencies; another 92,000 UC employees, and many of them travel for their work. While the vast majority of travelling employees turn to hotels and taxi companies for ground travel and lodging, some employees do use sharing economy services. Sharing economy technology platforms are growing in popularity and can provide economical options for ground travel and lodging. For example, one analysis shows consumers can save up to 50% when lodging through an online home-sharing platform. Similarly, savings can be achieved through ride-sharing options depending on the region. Peer-to-peer services also provide an environmentally conscious option for ground travel" The author further argues that, "as these innovative platforms become more ubiquitous, it is important for the state's policies to adjust and conform to the progressive market-place. As the AB 229 (Chang) Page 3 of ? home and incubator of the sharing economy, it is critical California's regulations are as innovative as the industry itself. AB 229 puts California at the forefront of the sharing economy by ensuring state employees can take full advantage of environmentally friendly peer-to-peer services and provides an opportunity to realize savings for the state as more employees turn to peer-to-peer services and thereby reducing total expenditures for travel related activity." Current CalHR rules. Current CalHR rules as well as memorandums of understanding (MOUs) with employee bargaining units do not currently prohibit the use of transportation network companies or short-term rentals for employees traveling on state business. These documents do not name either of these types of services when setting requirements. Instead, rules and MOUs set lodging reimbursement maximum rates by location and require travelers to submit itemized receipts when claiming reimbursements. Rules and MOUs specify that to qualify for reimbursements, lodging must be in commercial lodging establishments. This bill specifies, for purposes of the section added by this bill, that short-term rentals are considered commercial lodging establishments. Additionally, this bill would not allow agencies to ban the use of short-term rental arrangements like Airbnb, which allows participants to rent out their homes or rooms in their homes for a specified number of nights. Currently when state employees use taxis while traveling, depending on their employee group, they are either not required to submit taxi receipts or must only submit them when the ride exceeds $10. Prior/Related Legislation AB 2293 (Bonilla, Chapter 389, Statutes of 2014) established guidelines for insurance coverage for Transportation Network Companies to ensure personal and financial safety of consumers. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No AB 229 (Chang) Page 4 of ? SUPPORT: The Internet Association Natural Resources Defense Council OPPOSITION: None received ARGUMENTS IN SUPPORT: The Internet Association argues that "AB 229 recognizes the value of the emerging sharing economy and how it could be used to reduce state costs relating to travel. Providing the ability for state employees to use sharing economy services and receive reimbursement would increase the number of safe and reliable options available to employees when they travel on state business. In addition, AB 229 is in alignment with state travel policies requiring employees to use the least costly travel methods."