More on bicycle commute benefit

The success of extending the qualifed transportation fringe benefit to bicycle commuters (sec. 126 of the bill and sec. 132(f) of the Code) will be partially determined by how many people can use it. So how many did Congress think would use it? We haven't found a reference to a specific estimate of the demand but the Joint Committee on Taxation scored the bill (i.e., estimated impact on revenues) at ~$1 million per year for 10 years. http://www.jct.gov/x-78-08.pdf The methodology JCT used isn't public but if one were to assume $1,000,000 of foregone tax revenue from people claiming the $240 maximum and having an average effective tax rate of 15% then about 28,000 commuters might expect to use the benefit (this excludes the payroll taxes that employers would not have to pay on the $240, too).

The number of commuters might be much higher if the average claim was much less. Of course, participation depends on how many companies make the subsidized bicycle commuting benefit available to employees. Bureau of Labor Statistics reports about 5% of workers have access to subsidized commuting. At the same time, the recently release 2007 American Community Survey found about 0.5% of commuters or over 664,000 usually bicycle to work.

The question then turns to are there particular socio-economic groups who will benefit more from this benefit? ACS 2007 shows that 77% of the bicycle commuters are male so one could argue this proposal could benefit more males than females. The Census' American Factfinder combines the number of people bicycle commuting with taxis, motorcycles and other means for most of the socio-demographic comparisons (e.g., race, income, etc.) so we are unable to tease out the socio-economic factors for only bicyclists. Additional work the ACS PUMS dataset might be able to parse the data for bicycle commuters.

Finally, there are other unique aspects in the bill that extended the qualified transportation fringe benefit to bicycle commuters. For example, the bicycle benefit can not be combined with transit, commuter highway vehicle and parking benefits. Also, unlike other Section 132(f) qualified transportation fringe benefits, the $20 maximum tax free amount for bicycle commuters is not indexed for inflation.

Source: http://www.house.gov/jct/x-75-08.pdf

Qualified Transportation Fringe Benefits for Bicycle Commuters

Emergency Economic Stabilization Act of 2008 : H.R. 1424 (bailout) bill signed into law by President Bush includes expanding qualified transportation fringe benefits (Section 132(f) ) to allow employers to reimburse employees with up to $20.00 per month for bicycle commuters.

For most employees, those who ride transit or commuter highway vehicles (e.g., vanpool) can receive up to $115.00 per month tax free. They can also receive $220.00 per month tax free for qualified parking. IRS will be developing guidance to provide implementation details/parameters.
We should expect to see IRS guidance on how this will be implemented but we can look to the existing guidance http://www.irs.treas.gov/pub/irs-regs/td8933.pdf to hazard a guess.

Cavaet – I’m no tax expert, yada yada so don’t use the following for implementation. It could be food for thought if IRS seeks public input on guidance.

First, it isn’t a tax deduction for individual commuters. Like the rest of Section 132(f), employers are permitted (not required) to allow employees to seek reimbursement of up to $240 per year (assuming they regularly bike to work for all 12 months). I would assume the employer can offer no reimbursement for bicycle commuters if they offer parking and/or transit subsidies. Or they can choose to offer less than $20 per month, too. You’d have to assume that the individual will have submit some receipts for reimbursement. Where the line is drawn as to what is reimbursable will have to be decided – e.g., bike helmets, lights, tires, routine maintenance, baseball cards for spokes (just kidding), etc.

Clearly, terms like “regularly uses” and “substantial portion” need to be clarified. It now says: `(I) regularly uses the bicycle for a substantial portion of the travel between the employee's residence and place of employment. While qualified transportation fringe benefits for commuter highway vehicles (e.g., vanpools) have a 80% use for commuting requirement, transit does not.

As a “reimbursement program”, employers will not be able to pre-pay. Current guidance says “A payment made before the date an expense has been incurred or paid is not a reimbursement.” This may mean that a person who purchases a bike in January with the intent to use it for commuting for the next 12 months, he or she may not get the full reimbursement amount (e.g., $240) in the first month.

It is interesting to note that to receive the bicycle commuter benenfit the individual can not "receive any benefit described in subparagraph (A), (B), or (C) of paragraph (1)" so it excludes people who are already receiving a transit, commuter highway vehicle or parking benefit. I interpret this as meaning that the employee has to choose one or the other (transit/commuter highway vehicle/parking benefit OR bicycle benefit). This clause is in contrast to the current law that allows employees to combine parking and transit tax free amounts (e.g., cost of parking at a rail station and the rail fare). It wouldn’t appear that the new bicycle benefit will be an additional sweetener for a bike-to-bus or bike-on-bus programs if transit subsidies are provided.

Another point - the monthly transit/vanpool and parking limits are subject to cost of living increases (increase in $5 increments if the cost of living is high enough). While this has caused parking to increase more than transit based on the current level, this also would mean that bicycle limits are unlikely to change (the $20 per month basis is too low for the $5 increment to kick in automatically).

You can find the full bill (HR 1424) at http://thomas.loc.gov/
See IRS' Taxable Fringe Benefit Guide http://www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf for more information about Qualified Transportation Fringe Benefits (Section 132(f)).

You may also be interested in IRS' ruling in 2006 about when and how employer-provided transportation benefits provided through smartcards, debit or credit cards, or other electronic media are excluded from gross income under §§ 132(a)(5) and 132(f) of the Internal Revenue Code and from wages for employment tax purposes. See http://www.irs.gov/irb/2006-47_IRB/ar05.html

Journal of Public Transportation

There are several TDM-related articles in the recently released issue of the Journal of Public Transportation (Volume 11 Issue No. 1)

The journal is published by the National Center for Transit Research (http://www.nctr.usf.edu/) at the University of South Florida.

You can download individual articles at www.nctr.usf.edu/jpt/jptv11n1.htm or go to http://www.nctr.usf.edu/jpt/journalfulltext.htm to obtain a copy of the entire issue (you can access prior issues from the same link).

Below are abstracts of the articles in this issue.

Qualitative Research to Assess Interest in Public Transportation for Work Commute
Kerstin Carr, University of Regensburg

Given the need for reducing single occupancy vehicle commutes, this article presents a case study of employer-based research. Using conjoint analysis as a qualitative research method, factors that potentially influence people’s choices to drive alone to work were studied at a major company in Columbus, Ohio. Such factors included reasons for driving alone, satisfaction with commute, perceptions toward transportation modes, importance of transportation attributes, and likelihood to switch if certain Transportation Demand Management measures were implemented. Target groups were formed by using simple regression and cluster analysis of a stated-ranking question regarding transportation attributes.

Managing Limited Access Highways for High Performance: Costs, Benefits, and Revenues
Patrick DeCorla-Souza, Federal Highway Administration

Managed lanes are a set of lanes where highway operations strategies are actively applied in response to changing conditions. High-Occupancy/Toll (HOT) and Express Toll lanes are examples of managed lanes. The transportation operations concept discussed in this article involves conversion of existing freeways (all lanes) into premium-service free-flowing highways that provide fast, frequent, and inexpensive express bus service and charge all private vehicles a variable toll—except for authorized buses and certified ridesharing vehicles. The toll would vary by level of demand and would be set high enough to guarantee that excessive demand will not cause a breakdown of traffic flow. This article discusses the advantages of this concept. It introduces a new sketch-planning tool that provides estimates of costs, benefits, and revenues from applying the concept on a highway network in a prototypical large metropolitan area. The estimates suggest that implementing the concept can provide significant net social benefits. It may also generate sufficient new toll revenue to pay for all costs for implementation and operation, including new express bus and park-and-ride services that would complement the pricing scheme.

Demand Responsive Route Design: GIS Application to Link Downtowns with Expansion Areas
Mintesnot Gebeyehu and Shin-ei Takano, Hokkaido University Sapporo, Japan

The movement of residential locations to suburban areas to obtain cheaper land results in increasing mobility and infrastructure problems. One of the important infrastructures is transportation, which determines the level of accessibility of people and commodities from one place to another. Therefore, Transportation Demand Management (TDM) measures are important in providing an optimal transit route to increase accessibility of public transportations. In the past, several researchers have developed various TDM programs, including public transport improvement as a strategy to encourage a more transit-oriented society. This study attempts to create a methodology of identifying bus links between urban centers and newly developed urban expansion areas using Geographical Information Systems by considering reduction of route overlapping. A TAZ-based analysis is undertaken to identify the demand responsive bus routes, which maximize population coverage, minimize travel time, and reduce duplicating routes.

Does Government Structure Matter? A Comparative Analysis of Urban Bus Transit Efficiency
Suzanne Leland and Olga Smirnova, University of North Carolina at Charlotte

As public transit becomes more and more important to our economy, it is imperative that we understand which governing system achieves optimal efficiency. Following up on the work of Perry and Babitsky (1986), we quantitatively test whether certain forms of public governance are more efficient administrators of bus service. We utilize 2004 data from the National Transit Association database and control for federal funding, whether services are contracted out, region, population density, whether the system has a fixed guideway, the presence of local dedicated funding, and the ratio of local to federal funding. We find that special-purpose governments are more likely than general-purpose governments (cities and counties) to operate more efficiently. We also discovered that governments that contract out for some or all of their bus services are also more likely to be efficient than those public agencies that directly operate all of their services.

Encouraging Sustainable Campus Travel: Self-Reported Impacts of a University TravelSmart Initiative
Geoff Rose, Monash University

At the start of the 2004 and 2005 academic years, a voluntary travel behavior change program targeted incoming first-year students at the Clayton Campus of Monash University in Melbourne, Australia. Analysis of before and after travel surveys identified a significant effect in terms of reducing single occupant commuting and increasing public transport use. Nearly one in four of the students who participated in the TravelSmart initiative indicated it had influenced them to the extent of thinking about using, trying, or regularly using alternatives to solo driving to campus. The information provided about public transport services was the most valued element of the program. A range of barriers to further behavior change are identified to overcome a number of those impediments and thereby increase the use of environmentally friendly modes for commuting to campus.

Faith-Based Organizations: A Potential Partner in Rural Transportation
Tom Seekins, Steve Bridges, Annesa Santa, Daniel J. Denis, and Andrea Hartsell, University of Montana

Disability advocates frequently suggest that faith-based organizations (FBO) may be potential providers of transportation for people with disabilities living in rural communities. We conducted a national survey of rural FBOs in the United States to explore their capacity and interest in being involved in local transportation. We randomly selected 716 FBOs located within 15 miles of a rural center for independent living. Forty percent (N = 288) of these responded to our mailed survey. Responding faith communities averaged 300 worshiping adults with an average of 9.5 percent being judged to have a significant disability. Overall, respondents indicated they were neither willing nor unwilling to become involved in providing transportation to either the general public or to people with disabilities. Nevertheless, 32 percent of respondents said they would be willing or very willing to do so. Respondents reported that their congregations owned a total of 146 vehicles, 18.5 percent of which were judged to be accessible. Results are discussed in terms of the need to understand faith communities and their orientation to community service.

TDM sessions at 2008 Transportation Research Board

Transportation Research Board (www.trb.org) 87th Annual Meeting will be held in Washington DC on January 13-17, 2008. There are many sessions related to transportation demend management (TDM) and a long list of papers. Links below take you to abstracts for each paper that was sponsored by the Transportation Demand Management Committee. There are other TDM-related sessions on topics such as high occupancy toll facilities, telework, carsharing, etc. Please go to TRB's Interactive Program http://www.trb.org/am/ip/ to find the sessions that appeal to your interests.

Poster Session 253 Transportation Demand Management and Parking Strategies: New Tools and Approaches
Monday, January 14, 2008, 9:30 AM - 12:00 PM, Hilton

Lori Diggins, LDA Consulting, presiding
Sponsored by: Transportation Demand Management Committee (ABE50)

• Vehicle Occupancy Trends in Florida: Evidence from Traffic Accident Records (08-3089) - C11 Albert Gan, Florida International University and Kaiyu Liu, Florida International University
• Estimating Societal Benefits and Costs of Transportation Demand Management (08-2651) - C9 Sisinnio Concas, University of South Florida and Philip L. Winters, University of South Florida
• Macrolevel Collision Prediction Models to Evaluate Road Safety Effects of Mobility Management Strategies: New Empirical Tools to Promote Sustainable Development (08-2385) - C7 Gordon Richard Lovegrove, University of British Columbia, Canada and Todd Alexander Litman, Victoria Transport Policy Institute, Canada
• Park and Bike: New Multimodal Concept for Congested Areas (08-0411) - C5 Ilona Bos, University of Nijmegen, NetherlandsArnoud van de Vrugt, Keypoint Consultancy, Netherlands
• Modeling Car Park Choice in Urban Areas and Managing Demand for Parking (08-1191) - D6 Narasimha Chandrasekhar Balijepalli, University of Leeds, United Kingdom, Simon Shepherd, University of Leeds, United Kingdom, and Anthony May, University of Leeds, United Kingdom
• Modeling Parking Choice Behavior in Business Areas (08-1539) - D4Peter J.H.J. Van der Waerden, Eindhoven University of Technology, NetherlandsAloys Borgers, Eindhoven University of Technology, NetherlandsHarry J .P. Timmermans, Eindhoven University of Technology, Netherlands
• Effects of Parking Policy on Travel Demand in Bangkok’s Commercial District (08-1679) - D8 Saksith Chalermpong, Chulalongkorn University, Thailand, and Kittiphum Kittiwangchai, Chulalongkorn University, Thailand
• Using Land Use Planning Process to Secure Travel Plans: Assessment of Progress in England (08-0962) - D2 Tom Rye, Napier University, United Kingdom, Emma Young, Wirral Metropolitan Borough Council, United Kingdom, and Stephen Ison, Loughborough University, United Kingdom
• Role of Public Transport as Transportation Demand Management Measure (08-0909) - C3 Stephen Ison, Loughborough University, United Kingdom and Tom Rye, Napier University, United Kingdom

Transportation Demand Management Committee

Monday, January 14, 2008, 1:30 PM - 5:30 PM, Hilton

Lori Diggins, LDA Consulting, presiding
Sponsored by: Transportation Demand Management Committee (ABE50)

• View Committee Scope and Roster
  
• Current Practices in France (P08-0771)Robert Clavel, French Ministry of Transport

Parking Management Subcommittee, ABE50(1)
Monday, January 14, 2008, 7:30 PM - 9:30 PM, Hilton
Tom Rye, Napier University, United Kingdom, presiding
Sponsored by: Transportation Demand Management Committee (ABE50)

Session 707 Revisiting Traditional TDM Strategies and Breaking New TDM Ground Wednesday, January 16, 2008, 2:30 PM - 4:00 PM, Hilton
Lori Diggins, LDA Consulting, presiding
Sponsored by: Transportation Demand Management Committee (ABE50)

• An Empirical Analysis of Compressed Work Week Choices (08-2137) Liren Zhou, University of South Florida and Philip L. Winters, University of South Florida
• Employee Transportation Benefits in High Transit Mode Share Areas: a University Case Study (08-0916) David Block-Schachter, Massachusetts Institute of Technology and John Attanucci, Massachusetts Institute of Technology
• Four Challenges of Incorporating Transportation Demand Management into the Land Development Process (08-2535) Sara Jane Hendricks, University of South Florida
• Park and Ride: Lessons from the UK Experience (08-0730) Stuart Daniel Meek, Loughborough University, United Kingdom, Stephen Ison, Loughborough University, United Kingdom, Marcus Paul Enoch, Loughborough University, United Kingdom

Session 729 Driver Response to Urban Parking Parameters

Wednesday, January 16, 2008, 4:30 PM - 6:00 PM, Hilton

Philip L. Winters, University of South Florida, presiding
Sponsored by: Transportation Demand Management Committee (ABE50) and the New Public Transportation Systems and Technology Committee (AP020)

• Reassessing On-Street Parking (08-2926)Wesley Marshall, University of Connecticut, Norman Garrick, University of Connecticut, and Gilbert Hansen, University of Connecticut
• Social Experiment of Cooperative Dynamic Park-and-Ride in Japan (08-2224)Kunihiro Sakamoto, Saitama University, Japan
• Evaluating Urban Parking Policies with Agent-Based Model of Driver Parking Behavior (08-0341)Karel Martens, Radboud University Nijmegen, Netherlands, Itzhak Benenson, Tel Aviv University, Israel, and Slava Birfir, Tel Aviv University, Israel
• Smart Parking Linked to Transit: Lessons Learned from the San Francisco Bay Area Field Test (08-3027) Susan A. Shaheen, University of California, Berkeley, and Charlene R. Kemmerer, University of California, Berkeley