Bike Benefits in Bailout Bill?

So while some of us are tried to follow the political maneuvering related to the $700 billion bailout, or rescue package recently passed, many of us (myself included) were equally confused as to the many legislative implications of the bill. In researching the legislation in an attempt to educate myself I came across a little bit of pork patched into the bill that aroused some curiosity for my bike-commuting self.

While im neither a fan of the bill, nor am I of pork (literal or legislative), Sec. 211 of the bill (H.R. 1424) has interesting potential for individuals who regularly ride their bike to work.

Sec. 211 is an amendment to previous transportation fringe benefits found in Section 132(f) of the tax code. The bill allegedly attempts to spread the benefits received by bus and train commuters from Sec. 132(f)(these include supplementing payment for bus and train passes and for parking fees) onto bike commuters. Supposedly the individual who regularly uses their bike to get to and from work would be eligible for $20 in monthly compensation from their employees (if they participate) up to a total of $240 per year. This would include as the bill states,

"reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage."

So we as bike commuters would be able to write off (or perhaps charge our employers for) tubes, tires, lube, chains, perhaps even portions of the cost of new bikes if we ride to work regularly. As far as my research shows, the expenses would be a tax write-off for participating companies although im not sure if it would be a direct financial benefit to employees, or simply a deduction from their pre-tax earnings. I'd be curious to see how you all read into it, particularly the lawyer types among you. While some arguments ive read have stated that this benefit only equates to $1 per day, or $0.50 each way, and as such is not much of an incentive to commute by bike. My argument, as someone who rides regardless, is that this is $20 in maintainance I might potentially not have to pay for.

While I have read numerous discussions regarding the application of this legislation, its intended effects, and the probable benefits to be had by commuters, im still left largely confused. The funny thing is this bill was added to the bailout to appeal to a Representative Earl Blumenauer from Oregon who voted against the bill its first time around. The hope was this addition would bring him on board to support the bill. While the bill passed Blumenauer failed to approve its second ride around!

If you want to read up a bit more check here, here, and here.

For you law junkies ive included the transcript of Sec. 211 after the break!!





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.