BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        AB 229|
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                                   THIRD READING 

          Bill No:  AB 229
          Author:   Chang (R)
          Amended:  8/31/15 in Senate
          Vote:     21  

           SENATE GOVERNMENTAL ORG. COMMITTEE:  11-1, 7/14/15
           AYES:  Hall, Berryhill, Block, Gaines, Galgiani, Glazer, Hill,  
            Lara, McGuire, Runner, Vidak
           NOES:  Hueso
           NO VOTE RECORDED:  Hernandez

           ASSEMBLY FLOOR:  74-0, 5/22/15 - See last page for vote

           SUBJECT:   State employees: travel reimbursement.

          SOURCE:    Author
          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  

          Senate Floor Amendments on 8/31/15 removed the requirement that  
          a short term rental maintain commercial liability insurance  
          providing coverage for claims of bodily injury or properly  
          damage arising from the short term rental stay in an amount not  
          less than five hundred thousand dollars ($500,000) per  



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                                                                    Page  2

          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.

          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  

          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. 


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          7)Contains a sunset date of January 1, 2019.


          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  
          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  


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          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.:YesLocal:   No

          SUPPORT:   (Verified8/31/15)

          Children's Law Center of California
          The Internet Association
          Natural Resources Defense Council
          Travelers United

          OPPOSITION:   (Verified8/31/15)

          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  


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          with state travel policies requiring employees to use the least  
          costly travel methods."

          ASSEMBLY FLOOR:  74-0, 5/22/15
          AYES:  Achadjian, Travis Allen, Baker, Bigelow, Bloom, Bonilla,  
            Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau,  
            Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,  
            Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,  
            Irwin, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Nazarian, Obernolte, Patterson, Perea, Quirk, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark  
            Stone, Thurmond, Ting, Wagner, Wilk, Williams, Wood, Atkins
          NO VOTE RECORDED:  Alejo, Jones, O'Donnell, Olsen, Waldron,  

          Prepared by:Felipe Lopez / G.O. / (916) 651-1530
          9/1/15 21:40:48

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