Friday, October 4, 2013

Changes needed to the Bike Commuter Subsidy

From one of the great local volunteer bike advocates Dana Bres:

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 (B) 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:|

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 

(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.
`(B) 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 (B) (A), (B) and (D) of paragraph (1),
`(B) $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.

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