BILL ANALYSIS
AB 1186
Page 1
ASSEMBLY THIRD READING
AB 1186 (Blumenfield)
As Introduced February 27, 2009
Majority vote
TRANSPORTATION 9-4
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|Ayes:|Eng, Blumenfield, | | |
| |Buchanan, Furutani, | | |
| |Galgiani, Bonnie | | |
| |Lowenthal, | | |
| |John A.Perez, Solorio, | | |
| |Torlakson | | |
| | | | |
|-----+---------------------------+---+--------------------------|
|Nays:|Jeffries, Conway, Garrick, | | |
| |Niello | | |
| | | | |
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SUMMARY : Requires the lessor of a nonresidential building,
located within an air basin designated as a nonattainment area,
to list the parking costs as a separate line item in all lease
agreements if the tenants of the building are provided parking.
Specifies that this bill's provisions are only applicable if the
nonresidential building has a maximum occupancy of 50 or more
persons.
EXISTING LAW :
1)Requires that, in any air basin designated as an air quality
nonattainment area, that each employer of 50 persons or more
who provides a parking subsidy to employees, to offer a
parking cash-out program. Under the program, an employer
offers to provide a cash allowance to an employee equivalent
to the parking subsidy that the employer would otherwise pay
to provide the employee with a parking space.
2)Establishes the California Air Resources Board (ARB) to
implement air quality mitigation programs that reduce
emissions from motor vehicles, fuels, consumer products, and
sources of air toxics at the state level. It also oversees
local air pollution agencies.
AB 1186
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3)Authorizes ARB to administer the Parking Cash-Out Program
(PCOP). Violations of PCOP are subject to civil penalties not
to exceed $500 per vehicle per civil action.
4)Enacts, pursuant to AB 32 (Nunez and Pavley), Chapter 488,
Statutes of 2006, the Global Warming Solutions Act of 2006,
that directs ARB to implement a statewide greenhouse gas
emissions reduction strategy that would reduce emissions by
25% by 2020.
FISCAL EFFECT : None
COMMENTS : The author contends that "employers are not taking
advantage of an existing state program - the parking cash-out
program - because it is too difficult to calculate the value of
employee parking when it is included with the total cost of
office rental space. Consequently, this bill requires a lessor
of a nonresidential building that offers parking to its tenants
to list the parking costs as a separate line item in all lease
agreements?The goal of this bill is to bring about greater use
of the existing parking cash-out program, in order to gain the
resulting benefits of traffic congestion relief and air
pollution reductions?Many owners of commercial real estate offer
"bundled" parking with all other leased office space. This
practice makes it difficult, if not impossible, for employers to
separate the cost of parking spaces associated with the
commercial space that is being leased. Without that
information, employers are unable to offer employees cash in
lieu of parking subsidies."
PCOP : Existing law requires certain employers that provide a
parking subsidy to employees to provide a cash allowance to an
employee who does not use the parking space, an amount
equivalent to the amount the employer would otherwise pay to
provide that employee a parking space. The law establishes the
PCOP that is administered by ARB. For compliance with PCOP, an
employer must offer a cash-out option if the company has the
following characteristics:
1)Employs at least 50 persons, regardless of the number of work
sites.
2)Is located in an air basin designated nonattainment for any
state air quality standard.
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3)Provides free or subsidized employee parking on leased spaces
(i.e., on spaces the employer does not own).
4)Can calculate the expense of the parking subsidy, which means
the parking is leased separately from the building or office
space.
5)Is able to reduce the number of leased parking spaces without
financial penalty.
Although ARB is the agency responsible for implementing PCOP,
existing law does not require ARB to enforce or monitor the
program; nor does it contain reporting requirements for
employers, which makes it difficult for ARB to assess whether or
not an employer is in compliance. The potential of parking
cash-out to alleviate congestion and reduce greenhouse gas
emissions depends on assessing employer compliance with the
cash-out requirement.
According to ARB, they are authorized to administer PCOP.
However, "the parking cash-out mandate is imposed directly on
the employer who must meet the criteria of the statute. This
type of statute is often described as self-implementing." As
there are penalties for noncompliance, ARB would apply the civil
penalty per vehicle in a parking space subject to the cash-out
program. In the administration of the parking cash-out law,
ARB's focus is to facilitate compliance before seeking civil
penalties.
Legislative Analyst's Office (LAO) Report: In the March 2002
report by the LAO that examines the PCOP, it cited a 1990 study
that found a 41% average reduction in solo driving when
employees had to pay to park. The LAO also noted a 2000 survey
of Bay Area commuters, which found that while 77% of commuters
drive alone to work when free parking is available, only 39% do
so when they have to pay to park. Further, the report indicates
that PCOP is inexpensive to administer and offers numerous
benefits, including easing traffic congestion, improving air
quality, reducing greenhouse gas emissions, promoting social
equity, and supporting investments in other travel modes.
However, the report declares that the "implementation of the
program has been slow. Additionally, outreach efforts have been
limited such that it is not clear all affected employers are
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aware of the statutory requirements. This limits the potential
impact of the law."
Related bills: SB 728 (Lowenthal) of 2009, allows cities,
counties, and local and regional air districts to ensure
compliance with PCOP. That bill passed out of the Senate
Environmental Quality Committee and is awaiting hearing in the
Senate Transportation and Housing Committee.
SB 425 (Simitian) of 2009, specifies that an employer subject to
the requirement to provide a parking cash-out program may not
deduct the cost of providing parking subsidies from its gross
income unless it is in compliance with the requirement. That
bill passed out of the Senate Transportation and Housing
Committee and is awaiting hearing in the Senate Revenue and
Taxation Committee.
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093
FN: 0000658