BILL ANALYSIS �
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