[Congressional Record Volume 147, Number 12 (Tuesday, January 30, 2001)]
[Senate]
[Pages S780-S782]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SCHUMER (for himself, Mr. Warner, Mr. Durbin, Mr. 
        Santorum, Mr. Sarbanes, Mr. Chafee, Mr. Voinovich, Mr. Kerry, 
        Mr. Dodd, and Ms. Mikulski):
  S. 217. A bill to amend the Internal Revenue Code of 1986 to provide 
a uniform dollar limitation for all types of transportation fringe 
benefits excludable from gross income, and for other purposes; to the 
Committee on Finance.
  Mr. SCHUMER. Mr. President, I am proud to join my colleagues--
Senators Warner, Durbin, Chafee, Sarbanes, Santorum, Dodd, Kerry, 
Voinovich, and Mikulski today to introduce the Commuter Benefits Equity 
Act of 2001. This bill corrects an inequity in the tax code and has the 
potential to draw hundreds of thousands of commuters out of their cars 
and onto our nation's transit and commuter rail systems.
  The inequity I am speaking about is the largely ignored difference in 
the amount of ``pretax'' compensation that current law permits 
employers to give employees to cover parking and transit costs. At 
present, a company may provide a worker with $175 per month to cover 
parking expenses. That limit is set at $65 per employee for mass 
transit expenses.
  At a time when our nation's highways and bridges are under 
unprecedented strain, it is hard to believe that federal law provides a 
greater incentive for workers to drive to work than to leave their cars 
at home.
  The Commuter Benefits Equity Act of 2001 would raise the monthly cap 
to $175 for transit and provide ``cost of living'' increases for both 
benefits in the future. I would note that the parking benefit just 
received a $5 COLA.
  It is often said that people love their cars and simply will not ride 
mass transit to work. Many times this view is asserted as if it were an 
incontrovertible fact. I don't believe it at all, and recent ridership 
increases show how untrue such statements are.
  According to the American Public Transportation Association, 
Americans took over 9.4 billion trips on public transportation last 
year--a 320 million ride increase over 1999. This figure marks the 
highest ridership number in more than forty years. It also signifies a 
20 percent increase over the last five years.
  Clearly, Americans are willing to use mass transportation. I suspect 
that if the federal government were to remove barriers like the current 
disparity in the parking and transit benefits, even more would abandon 
their cars.
  It certainly is a goal worth pursuing.
  According to the Texas Transportation Institute, between 1982 and 
1997 the average delays faced by commuters in our metropolitan areas 
increased by alarming percentages. Over that fifteen-year period, 
commuters in New York endured a 158-percent increase in the amount of 
time they spent stuck in traffic. And that, comparatively speaking, is 
low. The figure for Detroit commuters was 182 percent. In Dallas it was 
300 percent. Denver commuters faced a grim 337-percent increase.
  The monthly cap on the federal transit benefit must be raised because 
it is far below the average costs incurred by the suburban commuters 
who use mass transportation. For instance, it costs a Westchester, New 
York commuter over $170 per month to take MetroNorth into the City. In 
Chicago, the average cost is approximately $148. In suburban Seattle 
that cost can exceed $200. Many commuters who would prefer to ride a 
train into work versus sitting in traffic probably can't afford to do 
so. This is because the choice between paying the majority of their own 
mass transportation costs or sitting in traffic and getting heavily 
subsidized parking is one they cannot justify economically.
  My colleagues and I believe that by creating a more level playing 
field between the transit and parking benefits, mass transportation use 
in this country will rise more rapidly. We also anticipate that our 
nation's urban highways will operate more efficiently. This view is 
shared by groups such as the Sierra Club, Environmental Defense, and 
the U.S. Conference of Mayors, who have endorsed the Commuter Benefits 
Equity Act of 2001.
  Mr. President, I ask unanimous consent that any comments relating to 
this bill appear in the Record following my remarks as well as the text 
of the Commuter Benefits Equity Act of 2001.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 217

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Commuter Benefits Equity Act 
     of 2001''.

     SEC. 2. UNIFORM DOLLAR LIMITATION FOR ALL TYPES OF 
                   TRANSPORTATION FRINGE BENEFITS.

       (a) In General.--Subparagraph (A) of section 132(f)(2) of 
     the Internal Revenue Code of 1986 (relating to limitation on 
     exclusion) is amended by striking ``$65'' and inserting 
     ``$175''.
       (b) Conforming Amendment.--Section 9010 of the 
     Transportation Equity Act for the 21st Century is amended by 
     striking subsection (c).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 3. CLARIFICATION OF FEDERAL EMPLOYEE BENEFITS.

       Section 7905 of title 5, United States Code, is amended--

[[Page S781]]

       (1) in subsection (a)--
       (A) in paragraph (2)(C) by inserting ``and'' after the 
     semicolon;
       (B) in paragraph (3) by striking ``; and'' and inserting a 
     period; and
       (C) by striking paragraph (4); and
       (2) in subsection (b)(2)(A) by amending subparagraph (A) to 
     read as follows:
       ``(A) a qualified transportation fringe as defined in 
     section 132(f)(1) of the Internal Revenue Code of 1986;''.

  Mr. WARNER. Mr. President, I am pleased today to join with my 
distinguished colleague from New York, Senator Schumer, to introduce 
the Commuter Benefits Equity Act of 2001.
  Transportation gridlock in the metropolitan Washington region is 
dramatic and well documented. The average commuter spends about 76 
hours a year idling on our area roads. The average speed on the Capital 
Beltway has decreased from 47 miles per hour to 23 miles per hour 
today. This wasted time in cars results in lost work productivity, lost 
time with families and degraded air quality. The quality of life for 
commuters is significantly reduced all across the country. I firmly 
believe the strength of our economy will be jeopardized if the growing 
rate of congestion in our communities remains unchecked.
  Yes, the construction of new roads and the expansion of existing 
roads must occur. But, this alone is not the answer to our problems. 
Relief from our growing gridlock will not come from any one solution. 
It will only come from an integrated policy of options that provide 
short-term, immediate solutions, together with long-term planning for 
new transportation facilities, both roads and transit.
  For these reasons, I have worked over the years to provide commuters 
with greater incentives to use mass transit, bus or rail, and to join 
vanpools. Increased transit ridership, extension of the Metro system, 
the Dulles Rapid Transit System, and expanded telecommuting 
opportunities are critical to providing temporary short-term solutions. 
Greater transit use and broader telework options are measures we can 
implement today that will deliver results tomorrow.
  The measure I am introducing today with Senator Schumer will provide 
parity in the tax code for those who enjoy employer-provided parking 
and those who elect to commute by mass transit.
  Today, the tax code provides two benefits for employers to offer 
their employees, both Federal employees and those in the private 
sector. Employers can offer employees a cash benefit of $65 per month 
for commuting expenses, or employers can set aside up to $65 per month 
of an employee's pre-tax income to pay for commuting costs. Under the 
tax code, however, the employer-provided parking benefit is valued at 
$175 per month.
  The legislation introduced today will increase the transit/vanpool 
benefit to $175 per month to be on par with the value of the parking 
benefit.
  Last year, I authored a provision in the FY 2001 Department of 
Defense Authorization bill requiring the Department of Defense to offer 
the cash commuting benefit to all DOD employees working in areas that 
do not meet the Federal air quality standards. With a total 
metropolitan Washington regional federal workforce of 323,000 persons, 
the Department of Defense is, by far, the single largest federal 
employer with 65,000 persons.
  The implementation of this benefit by the Federal agencies will 
improve employee satisfaction and have a positive effect on retention 
rates in the Federal workforce. This measure, however, is not limited 
to Federal employees. It does extend the benefit to private sector 
employees as well.
  Equally important are the resulting air quality benefits from 
increased transit use. According to the Environmental Protection 
Agency, the metropolitan Washington area is an air quality non-
attainment area, categorized as severe, under the Clean Air Act 
Amendments of 1990. Mobile sources are responsible for the majority of 
our air quality violations.
  Mr. President, I commend this legislation to my colleagues for their 
attention. It's costs are modest, and the benefits to our society are 
significant.
  Mr. SARBANES. Mr. President, I am pleased to join with my colleagues 
Senators Schumer and Warner in introducing the Commuter Benefits Equity 
Act of 2001. This measure is another important step forward in our 
efforts to make transit services more accessible and improve the 
quality of life for commuters throughout the nation.
  All across the nation, congestion and gridlock are taking their toll 
in terms of economic loss, environmental impacts, and personal 
frustration. According to the Texas Transportation Institute's Annual 
Mobility Report, in 1997, Americans in 68 urban areas spent 4.3 billion 
hours stuck in traffic, with an estimated cost to the nation of $72 
billion in lost time and wasted fuel, and the problem is growing. One 
way in which federal, state, and local governments are responding to 
this problem is by promoting greater use of transit as a commuting 
option. The American Public Transportation Association estimates that 
last year, Americans took over 9.4 billion trips on transit, the 
highest level in more than 40 years. But we need to do more to 
encourage people to get out of their cars and onto public 
transportation.
  The Internal Revenue Code currently allows employers to provide a 
tax-free transit benefit to their employees. Under this ``Commuter 
Choice'' program, employers can set aside up to $65 per month of an 
employee's pre-tax income to pay for the cost of commuting by public 
transportation or vanpool. Alternatively, an employer can choose to 
offer the same amount as a tax-free benefit in addition to an 
employee's salary. This program is designed to encourage Americans to 
leave their cars behind when commuting to work.
  By all accounts, this program is working. In the Washington area, for 
example, the Washington Metropolitan Area Transit Authority reports 
that 168,500 commuters take advantage of transit pass programs offered 
by their employers. That means fewer cars on our congested streets and 
highways.
  Employees of the federal government account for a large percentage of 
those benefitting from this program in the Washington area. Under an 
Executive Order issued by President Clinton, all federal agencies in 
the National Capital Region, which includes Montgomery, Prince 
George's, and Frederick Counties, Maryland, as well as several counties 
in Northern Virginia, are required to offer this transit benefit to 
their employees. The Commuter Choice program is now being used by 
115,000 Washington-area federal employees who are choosing to take 
transit to work.
  However, despite the success of the Commuter Choice program in taking 
cars off the road, our tax laws still reflect a bias toward driving. 
The Internal Revenue Code allows employers to offer a tax-free parking 
benefit to their employees of up to $175 per month. The striking 
disparity between the amount allowed for parking--$175 per month--and 
the amount allowed for transit--$65 per month--undermines our 
commitment to supporting public transportation use.
  The Commuter Benefits Equity Act would address this discrepancy by 
raising the maximum monthly transit benefit to $175, equal to the 
parking benefit. The federal government should not reward those who 
drive to work more richly than those who take public transportation. 
Indeed, since the passage of the Intermodal Surface Transportation 
Efficiency Act of 1991, federal transportation policy has endeavored to 
create a level playing field between highways and transit, favoring 
neither mode above the other. The Commuter Benefits Equity Act would 
ensure that our tax laws reflect this balanced approach.
  In addition, the Commuter Benefits Equity Act would remedy another 
inconsistency in current law. Private-sector employers can offer their 
employees the transit benefit in tandem with the parking benefit, to 
help employees pay for the costs of parking at transit facilities, 
commuter rail stations, or other locations which serve public 
transportation or vanpool commuters. However, under current law, 
federal agencies cannot offer a parking benefit to their employees who 
use park-and-ride lots or other remote parking locations. The Commuter 
Benefits Equity Act would remove this restriction, allowing federal 
employees access to the same benefits enjoyed by their private-sector 
counterparts.
  The Washington Metropolitan Region is home to thousands of federal 
employees. It is also one of the nation's most highly congested areas, 
with the second longest average commute time

[[Page S782]]

in the country. This area ranks third in the nation in the number of 
workers commuting more than 60 minutes to work, and has the highest per 
vehicle congestion cost and the second highest per capita congestion 
cost in the nation. It is clearly in our interest to support programs 
which encourage federal employees to make greater use of public 
transportation for their commuting needs.
  The simple change made by the Commuter Benefits Equity Act would 
provide a significant benefit to those federal employees whose commute 
to work includes parking at a transit facility. For example, a commuter 
who rides the Metrorail System to work and parks at the Wheaton park-
and-ride lot pays about $50 monthly for parking, on top of the cost of 
riding the train. A private-sector employee whose employer provides the 
parking benefit in addition to salary could receive $600 a year tax 
free to help pay these parking costs. Federal government employees 
should be allowed the same benefit.
  I support the Commuter Benefits Equity Act because it creates 
parity--parity in the tax code between the parking and transit 
benefits, and parity for federal employees with their private-sector 
counterparts. Both of these improvements will aid our efforts to fight 
congestion and pollution by supporting public transportation. I 
encourage my colleagues to join me in supporting the Commuter Benefits 
Equity Act.
                                 ______