AB 2206 – Parking Cash-Out Programs Are Required For Employers With 50 Or More Employees Who Offer Employees Parking Subsidies

CATEGORY: Client Update for Public Agencies, Fire Watch, Law Enforcement Briefing Room, Nonprofit News, Private Education Matters, Public Education Matters
CLIENT TYPE: Nonprofit, Private Education, Public Education, Public Employers, Public Safety
DATE: Oct 18, 2022

The California Health & Safety Code requires that the State Air Resources Board classify each air basin according to its pollution level.  The State Air Recourses Board classifies each air basin as in attainment, in non-attainment, or unclassified for any state ambient air quality standard based on a pollutant-by-pollutant basis.

Current law requires employers that meet the following criteria to provide a parking cash-out program: (1) located in the air basin designated as non-attainment by the State Air Resources Board; (2) have 50 or more employees; (3) provide a parking subsidy to employees.

Assembly Bill 2206 (AB 2206) adds a distinct definition of “employer” and revises the definitions of “parking cash-out program,” and “parking subsidy.”  Under AB 2206, the Legislature intends that the parking cash-out program is only applicable to an employer that provides a parking subsidy to employees that can reduce, without penalty, the number of paid parking spaces it maintains for its employees by providing employees with a cash-out option.

A parking subsidy, under this section, is now defined as the difference between the price, if any, charged to an employee for the use of parking spaces not owned by the employer and made available to that employee by the employer and the market rate cost of parking.  A parking cash-out program means a program wherein the employer offers to provide eligible employees a cash allowance equal to or greater than the parking subsidy that the employer would otherwise pay to provide the employee with a parking space.  AB 2206 also defines the market rate cost of parking as an amount that is no less than if the parking were to be obtained by an individual unaffiliated with the property on which parking is provided or by the employer through a transaction with no special rate due to a property lease for the closest publicly available parking within one-quarter mile of the employee’s workplace or $350, whichever is less.  If the employer cannot establish the market rate cost of parking, the rate shall be the monthly price of the lowest priced transit serving within one-quarter mile of the site or fifty dollars ($50) per month, whichever is higher.  The employer is required to maintain evidence of their effort to establish the market rate cost of parking for at least four years.

AB 2206 also adds a requirement for employers to inform employees who receive a parking subsidy of their right to receive the cash equivalent of the parking subsidy and maintain records of that communication.

AB 2206 authorizes the State Air Resources Board to impose the civil penalty not to exceed thirty-seven thousand five hundred dollars ($37,500) for a violation of this section. Additionally, a city, county, or air district may also adopt, by ordinance or resolution, a penalty or other mechanism to ensure that employers within their jurisdictions comply with this section of the Health & Safety Code.  An employer cannot be subject to penalties by both the State Air Resources Board and a city, county, or air district.  Only penalties by the State Air Resources Board are applicable if two agencies impose a penalty on an employer.

AB 2206 takes effect on January 1, 2023.

(AB 2206 amends Section 43845 of the Health and Safety Code.)

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