SF5278

Purpose

Establish a commuter benefits program requiring certain employers to offer a pretax benefit to eligible employees for transit-related transportation costs.

Key Definitions

• covered employee: a person who averages at least 35 hours of work per week on a full-time basis for compensation by a covered employer.
• covered employer: a business or other entity located in a city of the first class that employs 50 or more employees within one mile of a regular route transit service and directly or indirectly controls wages, hours, or working conditions.
• transit / public transit: the transportation system defined by the state law (as referenced in the bill).
• regular route transit: a specific type of transit service defined by state law.
• transit pass: any pass, token, fare card, voucher, or similar item that entitles a person to transportation on public transit.
• metropolitan planning and transit entities: the Metropolitan Council or other applicable transit authorities in a city of the first class, or replacement providers under state law.

Main Provisions

• Commuter benefit requirement

  • Covered employers must provide a pretax commuter benefit to covered employees.
  • The pretax benefit allows employees to use pretax dollars via payroll deduction to purchase a transit pass.
  • The tax treatment aligns with federal law, up to the maximum amount permitted by the U.S. Internal Revenue Code (consistent with 26 U.S.C. § 132f and related rules).
  • Employers may meet the requirement by participating in a program offered by the Metropolitan Council, a replacement service provider under state law, or another applicable transit authority.

• Optional additional supports

  • In addition to the transit pass benefit, covered employers may provide employer-sponsored transit programs or subsidies for other qualified transportation expenses, including walking, biking, carpooling, or vanpooling.

• Coverage timeline

  • The benefit must be offered to all employees starting with the first full pay period after 120 days of employment.

• Marketing and information

  • Transit authorities and planning bodies must publicly promote the existence of the program and how to use it, informing both riders and employers.

• Publicly available transit access map

  • The Metropolitan Council (and other relevant authorities in a city of the first class) must provide a searchable map showing addresses located within one mile of regular route transit.

Implementation and Compliance

• Map public availability

  • A searchable map of eligible addresses within one mile of regular route transit must be publicly accessible.

• Impact on bargaining and existing agreements

  • The law does not interfere with employees’ rights to bargain collectively.
  • It does not change the terms of a bona fide collective bargaining agreement in force on the effective date.
  • After the effective date, the requirements may be waived in a bona fide collective bargaining agreement, but only if the waiver is explicitly stated in clear and unambiguous terms.

Administrative Notes

• This provision codifies a new section (181.9449) in Minnesota Statutes to establish the commuter benefits program and related duties.

Significant Changes from Current Law

• Introduces a formal, statewide commuter benefits program for eligible employers and employees, linking benefits to payroll deductions for transit and allowing additional transportation subsidies.
• Adds (a) explicit eligibility criteria for employers (city of the first class location and 50+ employees within one mile of regular route transit) and (b) requirements for marketing, mapping of transit-accessible addresses, and rights to collective bargaining waivers only by explicit agreement.

Effective Date

• The text provided does not specify an effective date; the summary reflects the provisions as introduced.

Relevant Terms - commuter benefits - pretax commuter benefit - transit pass - regular route transit - covered employer - covered employee - Metropolitan Council - city of the first class - payroll deduction - 26 U.S.C. § 132f - collective bargaining agreement - walking - biking - carpooling - vanpooling - map of transit-accessible addresses