California Air Resources Board

Overview

The California parking cash-out (PCO) law requires employers of 50 persons or more who provide a parking subsidy to employees in any air basin designated as nonattainment to offer a cash allowance instead of parking space.

The law offers flexibility in how employers design and implement their parking cash-out policies. Employers can tailor program details - including eligibility criteria, enrollment processes, and program rules - to fit their organizational needs, resources, and preferences. The cash allowance also empowers employees with choices in their commute to work, allowing them to choose the options that best suit their needs, preferences, and lifestyle.

By allowing employees to "cash out" their parking space, this program aims to reduce single-occupancy vehicle trips, promote alternative transportation modes, and foster sustainable commuting practices among employers and employees across the state. The California Air Resources Board (CARB) has developed an informational guide to allow for easier understanding and implementation of the parking cash-out law:

California's Parking Cash-Out Law: An Informational Guide

Notice of 2024 Market Rate Cost of Parking

The parking cash-out law also establishes specific calculations for estimating the market rate cost of parking on an annual basis and sets minimum and maximum amounts of subsidies that applicable employers must pay to eligible employees. (Cal. Health & Saf. Code § 43845). Beginning January 1, 2024, the law requires the California Air Resources Board (CARB) to update the parking cost to calculate subsidies after adjusting for inflation annually based on the changes in the California Consumer Price Index (CCPI). This page is to inform the public of the increase in the market rate cost of parking based on updated values from the 2023 CCPI.

To calculate the market rate cost of parking, the prevailing parking price that individuals or businesses typically pay for parking spaces in a given location within one-quarter mile of the place of employment as further described in the statute (Cal. Health & Saf. Code § 43845(a)(3)(A)(i).) must be identified. The PCO law sets the maximum market rate cost of parking at $350 if the estimated value is over $350 per month and a minimum of $50 or the monthly price of the lowest priced transit serving within one-quarter mile of the site if the value cannot be established. (Cal. Health & Saf. Code § as per § 43845(a)(3)(A)(ii)). The CCPI for 2023, as reported by the California Department of Industrial Relations (DIR) in December 2023, is 331.80. This reflects a cumulative increase of 3.9 percent since January 1, 2023, when changes to HSC § 43845 became effective. Therefore, the market rate cost of parking for purposes of the parking cash-out law is:

• $363.65 – maximum – if the estimated market rate cost of parking is above $350.
• $51.95 - minimum - if the value cannot otherwise be estimated and assuming that the monthly cost of the lowest priced transit serving within one-quarter mile of the site is lower.