BILL ANALYSIS Ó
SB 1128
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SENATE THIRD READING
SB
1128 (Glazer)
As Introduced February 17, 2016
Majority vote
SENATE VOTE: 37-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Transportation |15-0 |Frazier, Linder, | |
| | |Baker, Bloom, Brown, | |
| | |Chu, Daly, Dodd, | |
| | |Eduardo Garcia, | |
| | |Gomez, Kim, Mathis, | |
| | |Melendez, Nazarian, | |
| | |O'Donnell | |
| | | | |
| | | | |
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SUMMARY: Removes the sunset for the Metropolitan Transportation
Commission (MTC) and the Bay Area Air Quality Management
District (BAAQMD)-administered San Francisco Bay Area commuter
benefits program that requires certain employers to provide
commuter benefit options to their employees. Specifically, this
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bill:
1)Authorizes MTC and BAAQMD to continue their commute benefits
program on a permanent basis by deleting the sunset date of
January 1, 2017.
2)Deletes bicycle commuting from the pre-tax option of the
program to conform to federal law, and adds bicycle commuting
to the employer-paid benefit option of the program allowing an
employer to offer a bicycle commuting subsidy to employees.
3)Deletes the requirement that MTC and BAAQMD issue a report to
the Legislature.
FISCAL EFFECT: This bill is keyed non-fiscal by the Legislative
Counsel.
COMMENTS: In 2009, three Bay Area cities, San Francisco,
Berkeley, and Richmond, adopted local ordinances requiring
employers to offer their employees commuter benefits consistent
with federal commuter tax benefits, such as allowing employees
to pay their transit or vanpool fare using pre-tax dollars.
Based on the success of these programs, in 2012 MTC and BAAQMD
sought authorization from the Legislature to adopt an ordinance
that would apply to all counties in the region. SB 1339 (Yee),
Chapter 871, Statutes of 2012, authorized the two agencies to
develop a pilot ordinance with a January 1, 2017, sunset date.
This bill would delete this sunset date, thereby extending the
authorization for the program permanently.
According to the author, the goal of the commute benefit program
is to promote the use of transit and other alternative commute
modes in order to reduce single-occupant vehicle commute trips,
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traffic congestion, and greenhouse gas (GHG) emissions and other
air pollutants from motor vehicles. The program seeks to
achieve these objectives by expanding the number of employers
who provide commuter benefits to their employees.
In a recent report to the Legislature assessing the pilot, MTC
and BAAQMD address the implementation of the program, costs
savings to employers and employees, and overall reductions in
commuter car trips and GHGs.
Implementation: To implement the program, the agencies did
extensive outreach to business groups to work with employers to
determine the right option for their employees. A total of
3,910 employers in the Bay Area are registered and participating
in the program, with 55% offering a commuter benefit to their
employees for the first time. This translates to roughly
472,000 employees who are eligible for a commuter benefit, of
which 205,000 are utilizing it. Additionally, of those
employees using the program, 44,400 would not travel by an
alternative mode of transportation if their employer did not
provide a commuter benefit. However, the report estimates that
the program may apply to as many as 10,000 Bay Area employers.
Although under current law, BAAQMD has the authority to enact
penalties for non-compliance, MTC and BAAQMD plan to continue to
emphasize compliance assistance over enforcement by publicizing
and conducting outreach activities to increase participation.
Savings: The pilot program offers employers four options of
commuter benefit for their employees. The pre-tax option, which
allows employees to exclude their transit or vanpool expenses
from taxable income for up to $255 per month, was the most
widely implemented with 82% of employers offering this option.
The option is easy to administer and also saves money for the
employer and the employee. Specifically, an employer could
reduce their payroll taxes by as much as $238 per employee per
year. Employees in the 25% federal income tax bracket and the
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6.5% state income tax bracket can save up to $965 per year.
Environmental benefits: With the passage of SB 375 (Steinberg),
Chapter 728, Statutes of 2008, the state's metropolitan planning
organizations are required to develop sustainable communities
strategies to reduce GHGs by a certain amount determined by the
Air Resources Board. Adopting innovative strategies to increase
mode shift is paramount to meeting the targets. In the first
year of the program 4.3 million fewer vehicle trips were made as
a result of the benefit, reducing vehicle miles traveled by 86
million miles. This translates to a reduction of nearly 36,000
tons of GHGs or 2.7% of the Bay Area's GHG reduction target.
In writing in support of this bill, the California Transit
Association noted that "this bill will benefit employers and the
employees through lower payroll and income taxes, and reduced
tailpipe emissions and traffic congestion. Moreover, in light
of ongoing issues related to aging and deficient transportation
infrastructure and increasing costs of living in the Bay Area,
this bill is a small step the Legislature can take to lower the
cost of commuting and advance California's climate protection
goals, all without raising taxes or otherwise harming economic
growth."
There is no formal opposition.
Please see the policy committee analysis for full discussion of
this bill.
Analysis Prepared by:
Melissa White / TRANS. / (916) 319-2093 FN:
0003540
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