Bailout provided passage of Bicycle Commuter bill

From Bicycle Retailer and Industry News

Congress Passes Commuter Act



WASHINGTON, DC (BRAIN)—Employers of people who bike to work stand to gain a $20 per month tax credit per cycling employee, according to the final version of the Wall Street bailout bill, H.R. 1424, passed this afternoon.

The House passed the bill today with a final vote of 263-171, a comfortable margin that was 58 more votes than the measure garnered in Monday's stunning defeat. The Senate passed the bill Wednesday by a vote of 74 for and 25 against the bill.

The bicycle tax provision was part of an additional $110 billion in line items added to the already $700 billion bailout package.

What does bicycle commuting have to do with credit issues or covering the debt racked up on Wall Street? Bicycle commuting advocate Earl Blumenauer, a Democratic Representative from Oregon, was one of the 228 Representatives who voted against the House version of the bailout package on Monday. House members looking to pass a bailout bill needed to convince as least 12 of the dissenters to switch their position and vote for a bailout bill.

According to a Blumenauer spokeswoman, the bicycle commuting tax credit had the Representative’s attention, according to a report by www.govexec.com. However, Blumenauer said he was opposed to the bill because it failed to include bankruptcy equity for homeowners, not because employers of bicycle commuters suffered unfair tax burdens. He is also against incentives for coal-based liquids, tar sands and oil shale also included in the Senate’s bill. Blumenauer voted against the bailout bill in today's vote but his pet bicycling project passed with it.

Congressman Blumenauer spearheaded a seven-year campaign to extend commuter tax benefits to those who bike to work.

Andy Clarke, president of the League of American Bicyclists, said the Bicycle Commuter Act has been held up getting through with previous bills.

“It’s been attached to a variety of different bills or devices—climate change, energy, transportation,” Clarke said. “It’s ironic that it would wind up in a financial rescue package, but we’ll take it. I’m not going to quibble with the method; I’m glad to see it done.”

The employer tax break is laid out in Sec. 211, “Transportation fringe benefit to bicycle commuters," which is under the Transportation and Domestic Fuel Security Provision section in H.R. 1424. The $20 a month tax relief per bicycle commuting employee is to cover the cost of any employer reimbursement for reasonable expenses incurred by the employee “for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee’s residence and place of employment.”

"It's definitely a day to celebrate just this one little thing that has been achieved after seven years," Clarke said. "It may not be a total game changer—it's still a relatively small break—but it gets us closer to the kind of treatment that cyclists in the U.K. and other parts of the world have had for years."

I'm a little confused: If I'm reading this right, the employer gets a tax break for each employee who commutes to work? That's great, but why are they getting credit for expenses that we incur, like "bike repairs and improvements" that were cited in the article?

Am I missing something?

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Originally Posted by indigoiis

The $20 a month tax relief per bicycle commuting employee is to cover the cost of any employer reimbursement for reasonable expenses incurred by the employee

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So if I'm reading this right if you work for a company that pays you to ride .... your employer gets paid back to pay you to ride. Which could mean that more companies will pay us to ride etc.

$20 a month x 12, I could get two of these :cool:

http://www.teamestrogen.com/prodCI_A8522.html

Hmm. I'm self-employed and commute. Wonder if I get it.

Probably not :o

But you don't have co-workers snide comments about your shoes, and managers question if you can bring the bike into the building and ... :p

That's worth $20.00 a month.

I saw this and did a Scooby Doo double take. They were making fun of some of the other piggy back bills like the wooden arrow one for kids and they mentioned the bike one but didn't make fun of it.

Maybe this would convince some employers to put in showers? I thought at first I would be able to write it off. Which would of been better. Will there be employers that use this falsely? I hope not. I wish tho the biker got the cash.

I think it's like a flex plan. If the employee pays for it, the employee can pay with "pre-tax" dollars through a fund administered by the employer. If the employer pays for it, the employer takes a tax deduction.

Pays for WHAT?

I think it's just a tax incentive to get employers to encourage bike commuting. If you work in a big city where parking is scarce, and your employer puts a bike rack or showers in to encourage bike commuting, or the HR department launches an awareness campaign, the EMPLOYER gets to take a $20 a month tax credit per bike-commuting employee.

I don't know how they'd prove how many bike commute, AND what if I commute only part time? And what kind of trouble would a company in the 'burbs of Dallas go to to claim the credit when they know almost all of the employees are driving? Sounds to me like an entrance into regulating bike commuting, licensing bikes, and riders, etc., etc. That's bad news to me.

Karen

so obviously it is full of loop holes and lacks any direction or responsibility. huh I wonder if the rest of the bail out plan is like that. yay for poor government management of our lives!

Public transit incentives like this are very common. I think this is a good start that will likely need tweaking and improvement, but it's a start and that's a whole lot better than we've ever had before. Let's not trash the whole program; I certainly don't know the details.

What if you work for a non-profit that doesn't file taxes? We have one employee who is in charge of all of the campus "green" projects and is very supportive of bicycle commuting, but we/he can't find the money to get a bike rack installed at the fitness center (where I go to shower and change). This kind of tax credit could help pay for something like that.

Sarah

The non-profit is big enough to have a fitness center?

I think they can find the money for a bike rack.

But tax credits don't apply to nonprofits at all, because ALL the taxes are "credited"!

Karen

I think getting a copy of the exact bill wording is in order... anyone know where to find that?

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Originally Posted by Tuckervill

The non-profit is big enough to have a fitness center?

I think they can find the money for a bike rack.

But tax credits don't apply to nonprofits at all, because ALL the taxes are "credited"!

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It's a college, so of course there's a fitness center! And yeah, it bugs me that they budget for big-ticket things like buildings but we can't get $6,000 in the budget for a suicide prevention program. Since the board has to approve every expenditure, we don't have a lot of flexibility in the budget. The trick is to convince the right person early in the budget process that this is a necessary expense. But since we can't increase our budgets from one year to the next these days, we have to make do with level funding, and since prices for everything keep going up, this means that in reality we have to make do with less each year. And since there's only a handful of us on campus who commute by bike, that makes our needs a pretty low priority in the tiny "green campus" budget.

The reason I asked is because employees at non-profits can use pre-tax flex accounts for medical and childcare expenses. I'm not clear if this legislation is strictly a benefit for a tax-paying employer or if it's something that has to be offered to employees like a flex account.

Sarah

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Originally Posted by sfa

It's a college, so of course there's a fitness center!

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I've never heard of a college without bike racks! Don't the students ride bikes to class? Couldn't an argument be made that bike racks would be a benefit for the students?

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Originally Posted by tulip

I've never heard of a college without bike racks! Don't the students ride bikes to class? Couldn't an argument be made that bike racks would be a benefit for the students?

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There are three bike racks on the main quad, but the fitness center is out on the edge of campus. Those bike racks were put in during recent renovations. The fitness center was built in the early 70's and hasn't been updated since then, so no bike racks there. I lock my bike to a picnic table and shower and change quickly, then either walk or ride my bike (depending on what I'm wearing--some of my work clothes don't let me throw a leg over my bike) to the quad to lock up for the day.

But because it's a community college in suburban hell, very few students bike to campus. I think if it were a residential college, it would be a different situation.

Sarah

SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.

(a) In General- Paragraph (1) of section 132(f) is amended by adding at the end the following:

`(D) Any qualified bicycle commuting reimbursement.’.

(b) Limitation on Exclusion- Paragraph (2) of section 132(f) is amended by striking `and’ at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting `, and’, and by adding at the end the following new subparagraph:

`(C) the applicable annual limitation in the case of any qualified bicycle commuting reimbursement.’.

(c) Definitions- Paragraph (5) of section 132(f) is amended by adding at the end the following:

`(F) DEFINITIONS RELATED TO BICYCLE COMMUTING REIMBURSEMENT-

`(i) QUALIFIED BICYCLE COMMUTING REIMBURSEMENT- The term `qualified bicycle commuting reimbursement’ means, with respect to any calendar year, any employer reimbursement during the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee’s residence and place of employment.

`(ii) APPLICABLE ANNUAL LIMITATION- The term `applicable annual limitation’ means, with respect to any employee for any calendar year, the product of $20 multiplied by the number of qualified bicycle commuting months during such year.

`(iii) QUALIFIED BICYCLE COMMUTING MONTH- The term `qualified bicycle commuting month’ means, with respect to any employee, any month during which such employee–

`(I) regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment, and

`(II) does not receive any benefit described in subparagraph (A), (B), or (C) of paragraph (1).’.

(d) Constructive Receipt of Benefit- Paragraph (4) of section 132(f) is amended by inserting `(other than a qualified bicycle commuting reimbursement)’ after `qualified transportation fringe’.

(e) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2008.

Quote:

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Originally Posted by madscot13

SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.

(a) In General- Paragraph (1) of section 132(f) is amended by adding at the end the following:

`(D) Any qualified bicycle commuting reimbursement.’.

(b) Limitation on Exclusion- Paragraph (2) of section 132(f) is amended by striking `and’ at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting `, and’, and by adding at the end the following new subparagraph:

`(C) the applicable annual limitation in the case of any qualified bicycle commuting reimbursement.’.

(c) Definitions- Paragraph (5) of section 132(f) is amended by adding at the end the following:

`(F) DEFINITIONS RELATED TO BICYCLE COMMUTING REIMBURSEMENT-

`(i) QUALIFIED BICYCLE COMMUTING REIMBURSEMENT- The term `qualified bicycle commuting reimbursement’ means, with respect to any calendar year, any employer reimbursement during the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee’s residence and place of employment.

`(ii) APPLICABLE ANNUAL LIMITATION- The term `applicable annual limitation’ means, with respect to any employee for any calendar year, the product of $20 multiplied by the number of qualified bicycle commuting months during such year.

`(iii) QUALIFIED BICYCLE COMMUTING MONTH- The term `qualified bicycle commuting month’ means, with respect to any employee, any month during which such employee–

`(I) regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment, and

`(II) does not receive any benefit described in subparagraph (A), (B), or (C) of paragraph (1).’.

(d) Constructive Receipt of Benefit- Paragraph (4) of section 132(f) is amended by inserting `(other than a qualified bicycle commuting reimbursement)’ after `qualified transportation fringe’.

(e) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2008.

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Well, that clears up everything! Great! :rolleyes:

From Roadbikerider newsletter 10/09/08

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Congress Passes Bicycle Commuter Act



If you listened to Rush Limbaugh's radio program last week you may have heard him mock the bike commuting legislation contained in the historic Wall Street bailout bill.



The influential right-wing commentator used the inclusion of cycling to voice his disgust about the "pork" that had found its way into the $700-billion package.



Limbaugh spoke in derisive tones about bicycle riding. Little did he know (or probably care) that the cycling-friendly legislation was 7 years in the making. The so-called "bicycle tax" provision was part of an additional $110 billion in line items added to the already massive bailout legislation.



Some of that probably was pork, but Limbaugh chose the wrong example to rail against.



What section 211 of H.R. bill 1424 does is give employers a tax credit for workers who pedal to their jobs. The amount is $20 per month per cycling employee.



This benefit helps cover the cost of employer reimbursement for reasonable expenses incurred by an employee "for the purchase of a bicycle and bicycle improvements, repair and storage, if such bicycle is regularly used for travel between the employee's residence and place of employment."



Score it a long-sought victory for the national advocacy organization, the League of American Bicyclists. LAB in turn credits the persistence of Rep. Earl Blumenauer (D-OR) for spearheading the lengthy political process on behalf of the ride-to-work movement.



(Actually, Blumenauer voted against the bailout bill despite the Bicycle Commuter Act's inclusion. He cited his opposition to other aspects of the wide-ranging legislation.)



According to LAB president Andy Clarke, the cycling provision previously failed passage when attached to bills dealing with matters such as climate change, energy and transportation.



"It's ironic," he says, "that it would wind up in a financial rescue package, but we'll take it. I'm not going to quibble with the method. I'm glad to see it done.



"Bicycle commuters will now be extended similar benefits to people who take transit and drive to work. It may not be a total game changer -- it's still a relatively small break -- but it gets us closer to the kind of treatment that cyclists in the U.K. and other parts of the world have had for years."



Clarke invites cyclists to keep an eye on the LAB website at http://www.bikeleague.org "as we work on the implementation process."



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