Bike Commuter Subsidy

[dbb]

Last week I spoke with Representative Moran’s staff about some changes that I feel are necessary with the bicycle commuter subsidy.

At the core, we need to do more to encourage all cycle commuting, full time and part time.

As you know, employers are authorized (but not required) to provide a tax-free commuter subsidy to cyclists. At present, the subsidy is capped at $20 per month and recipients are prohibited from receiving both the traditional transit subsidy and the bike commuter benefit.

Representative Mike Grimm (from New York) has introduced HR 2288, the Commuter Parity Act of 2013 that sets the maximum parking and transit subsidies at the same level. The act also raises the bicycle commuter subsidy to $35/month. Unfortunately, the act still leaves the language in the IRS code that keeps the either/or nature of the benefits.

This bill has been cosponsored by 40 members of Congress including:

Rep Connolly, Gerald E. [VA-11] – 6/11/2013
Rep Moran, James P. [VA-8] – 6/14/2013
Rep Wittman, Robert J. [VA-1] – 7/31/2013

Rep Norton, Eleanor Holmes [DC] – 6/14/2013

Here is my ask.

With a minor change to the bill, we can change the authorization to allow bike commuters to be eligible for both the transit and bicycle subsidy, an approach that would encourage part time bike commuting and multi-modal commuting. I propose to change the (A) and ( in para (f)(2)(A) below (deleting the text in red and adding the underlined text).

Please write your representative and ask them support the bill and offer the change as a friendly amendment. Note that I couldn’t find anybody from Maryland that is cosponsoring the bill.

The link to the bill in Thomas is: http://thomas.loc.gov/cgi-bin/bdquery/D?d113:1:./temp/~bdeRZC:/home/LegislativeData.php|

Please not that I am sharing what I sent my elected rep for your information and that I am doing this as a private citizen. I ain’t lobbying.

Bicycle Commuter Subsidies

The current authorization for a Bicycle Commuter Subsidy requires an either/or decision by the commuter. Either they take the bicycle commuter benefit or the mass transit subsidy. For all but a few, selecting a single commuting mode is simply not an option, particularly bicycle commuters.

House Resolution 2288, the Commuter Parity Act of 2013 that makes changes to the Bicycle Commuter Subsidy. Because of the wording of the bill, it continues the limits on the promotion of multimodal commuting as is the case for so many bicycle commuters. H.R 2288 does not specifically establish the simultaneous eligibility for both the mass transit subsidy and bicycle commuting reimbursement. Eligibility for multiple forms of transit subsidies (with a common cap on the aggregate benefit) would encourage greater use of non-automobile forms of commuting.

The currently authorized Bicycle Commuter Subsidy is capped at $20 per month but it denies eligibility for other commuter mass transit benefits during that month. In the Washington, DC area, a typical commuter eligible for $150 transit benefit for the metro would be denied any of that in exchange for the current $20 bicycle benefit. Allowing eligibility for both forms of subsidies (subject to individual and aggregate limits) would encourage commuters to become bicycle commuters.

Because the Bicycle Commuter Subsidy would come out of the total eligibility for the transit subsidy, this change would be cost neutral for the employer. Because federal agencies typically take unused transit subsidies back at the end of each month, regular bicycle commuting would actually reduce an agency’s costs because the subsidy is much lower.

Changes to H.R 2288 are modest, and are shown below

SEC. 2. QUALIFIED TRANSPORTATION FRINGE.
(a) In General- Subsection (f) of section 132 of the Internal Revenue Code of 1986 is amended to read as follows:
`(f) Qualified Transportation Fringe-
`(1) IN GENERAL- For purposes of this section, the term `qualified transportation fringe’ means any of the following provided by an employer to an employee:
`(A) Transportation in a commuter highway vehicle if such transportation is in connection with travel between the employee’s residence and place of employment.
`( Any transit pass.
`(C) Qualified parking.
`(D) Any qualified bicycle commuting reimbursement.
`(2) LIMITATION ON EXCLUSION- The amount of the fringe benefits which are provided by an employer to any employee and which may be excluded from gross income under subsection (a)(5) shall not exceed–
`(A) $220 per month in the case of the aggregate of the benefits described in subparagraphs (A) and ( (A), ( and (D) of paragraph (1),
`( $220 per month in the case of qualified parking, and
`(C) $35 per month for qualified bicycle commuting reimbursement.
`(3) NO CONSTRUCTIVE RECEIPT- No amount shall be included in the gross income of an employee solely because the employee may choose between any qualified transportation fringe and compensation which would otherwise be includible in gross income of such employee.
`(4) DEFINITIONS- For purposes of this subsection—

…

`(F) QUALIFIED BICYCLE COMMUTING REIMBURSEMENT- For the purposes of this subsection, the term `qualified bicycle commuting reimbursement’ means any employer reimbursement for reasonable expenses incurred by the employee for the purchase of a bicycle and bicycle improvements, repair, and storage, or bikesharing program, if such bicycle is regularly used for travel between the employee’s residence and place of employment.

Topic

[Tim Kelley]

Dana, will you be taking this to the Arlington BAC? It might be worth giving Alexandria and Fairfax a heads up too!

[dbb]

Sure. I’ll cross post to the ABAC list serve

[mstone]

I think it should just be $220 to get to work each month, regardless of mode. Or kill the subsidy for all modes because it’s stupid. (Why not just raise the standard deduction by $220 and save an enormous amount of overhead?)

[Dickie]

Thanks Dana for putting your own time and energy into this, although it doesn’t apply to me I am sure many will appreciate your efforts!

[TwoWheelsDC]

@mstone 65694 wrote:

I think it should just be $220 to get to work each month, regardless of mode. Or kill the subsidy for all modes because it’s stupid. (Why not just raise the standard deduction by $220 and save an enormous amount of overhead?)

Yeah, a general subsidy for non-car commuters. Also, I’d recommend that agencies that have parking lots charge for parking. Even charging car commuters $30 a month for parking would probably cover each agency’s entire transit/bike subsidy, although I admit that could be difficult, logistically.

[Terpfan]

Thanks and good catch. I sent a note to him asking for what i would consider a technical amendment change there.

[dbb]

I think the likely strategy will be to slip this into a larger bill as an amendment. Given the success of the Congress at getting legislation passed, hanging it on as an amendment might be the easiest.

[hoffsquared]

If people were eligible for both subsidies at the same time, bike commuting on ‘paper’ would skyrocket. But I feel that many would never get on a bike — just take the subsidy. IMHO.

I like the idea of just one subsidy…or get rid of them altogether.

[mstone]

@TwoWheelsDC 65702 wrote:

Yeah, a general subsidy for non-car commuters. Also, I’d recommend that agencies that have parking lots charge for parking. Even charging car commuters $30 a month for parking would probably cover each agency’s entire transit/bike subsidy, although I admit that could be difficult, logistically.

You misunderstand, this isn’t about non-car commuters: the same subsidy applies to parking. That’s why I suggested simply raising the standard deduction–the only people who can’t claim anything are those who don’t work or who walk to work. It’s just a giveaway, not a way to incentivize certain behavior (except that cycling or walking, and especially telework, are disincentivized). So, make it a general “getting to work” subsidy (which will still disproportionately benefit SOVs,) or give everybody free money without making them find some way to justify it as related to getting to work, or just scrap the idea because it’s just a stupid regressive giveaway with a lot of overhead (a tax benefit is most useful to those in the upper income brackets).

[dbb]

At my agency, the transit subsidy is added to my smart card at the beginning of the month and that which isn’t used is taken back at the end of the month. It is also based on the metro fare from my home to the office and the number of days I commute (thanks to the furlough, now less than ever). In my case that is about $65 per month. Using those values, I would be eligible for a total of $65 in benefits ($30 on my smart card and $35 for my bike). If I elected to take the metro more than the $30 would cover, I would be obligated to pick up the difference. That $30 would cover about 7 round trips to the office. If I commuted by bike all month, they would take the $30 back.

While just giving me $220 would be sweet, it would be (for those living close to our jobs) an weird variant of a place based mortgage.

We’ve not gotten to discuss implementation because the dual approach isn’t an option. This would most benefit folks who live some distance out and commute with a multi-modal approach (bus than bike). They save their employers money by not taking the metro all the way in but are not eligible to share in the savings.

I agree that there is some potential for cheating but think that could be addressed in implementation.

[mstone]

@dbb 65762 wrote:

At my agency, the transit subsidy is added to my smart card at the beginning of the month and that which isn’t used is taken back at the end of the month. It is also based on the metro fare from my home to the office and the number of days I commute (thanks to the furlough, now less than ever). In my case that is about $65 per month. Using those values, I would be eligible for a total of $65 in benefits ($30 on my smart card and $35 for my bike). If I elected to take the metro more than the $30 would cover, I would be obligated to pick up the difference. That $30 would cover about 7 round trips to the office. If I commuted by bike all month, they would take the $30 back.

And if you drove, you’d buy a monthly parking pass and the subsidy would cover it outright (which is the most common option, and the reason this is basically a giveaway with overhead). Adding transit and cycling is a fig leaf to cover the fact that they’re giving away free money to SOVs. Since employers decide what to implement, it’s relatively common to find them only providing parking benefits and not transit or cycling. (I’ve never worked anywhere that didn’t provide some sort of parking subsidy, or that did provide transit & biking subsidies. Part of the reason for this is exactly because of the overhead of managing such programs.) So you can tinker with the margins, and it’s certainly better to screw cyclists less in this deal, but it’s fundamentally bad policy.

[consularrider]

@hoffsquared 65759 wrote:

If people were eligible for both subsidies at the same time, bike commuting on ‘paper’ would skyrocket. But I feel that many would never get on a bike — just take the subsidy. IMHO.

I like the idea of just one subsidy…or get rid of them altogether.

You do have to provide receipts for the bike reimbursement program. Of course, there’s nothing to stop someone who rides for recreation on weekends from submitting receipts.

[consularrider]

@dbb 65762 wrote:

… We’ve not gotten to discuss implementation because the dual approach isn’t an option. This would most benefit folks who live some distance out and commute with a multi-modal approach (bus than bike). They save their employers money by not taking the metro all the way in but are not eligible to share in the savings …

One of the issues with the multi-modal for those living further out is that they may already be hitting the maximum Metro benefit.

[TwoWheelsDC]

@mstone 65760 wrote:

You misunderstand, this isn’t about non-car commuters: the same subsidy applies to parking. That’s why I suggested simply raising the standard deduction–the only people who can’t claim anything are those who don’t work or who walk to work. It’s just a giveaway, not a way to incentivize certain behavior (except that cycling or walking, and especially telework, are disincentivized). So, make it a general “getting to work” subsidy (which will still disproportionately benefit SOVs,) or give everybody free money without making them find some way to justify it as related to getting to work, or just scrap the idea because it’s just a stupid regressive giveaway with a lot of overhead (a tax benefit is most useful to those in the upper income brackets).

Holy crap…I didn’t realize it counted for parking. No wonder so many people at State drive….

[TwoWheelsDC]

@consularrider 65767 wrote:

You do have to provide receipts for the bike reimbursement program. Of course, there’s nothing to stop someone who rides for recreation on weekends from submitting receipts.

At my home office, we also have to submit a spreadsheet noting the days we ride, which has to be at least 51% (or whatever) of the total work days for the month. It’s actually a lot of work for $20 a month, to the point where I don’t even bother.

[Author]

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