Rachel Gordon, Chronicle Staff Writer

(10-08) 19:16 PDT -- The $700 billion bailout bill intended
to stop the tailspin of the nation's financial sector did
something else: It includes federal tax benefits for people
who commute by bike.

Starting in January, workers who use two-wheelers as their
primary transportation mode to get to and from work will be
eligible for a $20-a-month, tax-free reimbursement from
their employers for bicycle-related expenses. In return,
employers will be able to deduct the expense from their
federal taxes.

"It significantly legitimizes bicycling and elevates it to a
credible commute mode, like riding a bus or train," said
Andy Thornley, program director for the San Francisco
Bicycle Coalition.

The money could be used to purchase, store, maintain or
repair bikes that are used for a substantial portion of an
employee's commute.

Bike advocates have been trying for seven years to get such
a provision passed in Washington, but came up short until
Congress rushed through the Wall Street bailout package last
week and lawmakers squeezed in pet projects. The bicycle
benefit was championed by members of the Oregon delegation.

Backers estimate that the federal tax rolls may lose out on
about $1 million a year due to the new employer write-off,
according to the advocacy group League of American
Bicyclists.

Willy Dommen, 49, regularly rides his bike from his San
Anselmo home to his job as a management technology
consultant in San Francisco's Financial District. He said
the $20-a-month perk for cyclists won't amount to much in
term of covering actual expenses. But, he said, it will help
raise awareness of bicycling, "and that recognition is
great."

San Francisco Supervisor Ross Mirkarimi plans to introduce
an amendment to a law he sponsored earlier this year that
requires all but the smallest businesses in the city to
provide their employees with incentives to get them out of
their cars and onto transit.

Under the city law, which will take affect next summer after
a six-month public education period, employers with 20 or
more employees will have to offer their workers transit
passes or vanpool reimbursements or offer them door-to-door
shuttle service, or set up a program in which employees
could tap into an existing federal program that provides tax
breaks for those who commute on transit. Mirkarimi hopes to
add the new fringe benefit for bicyclists as an acceptable
alternative.

"It's another opportunity to encourage good commuting habits
," he said.

The federal bike bill would not allow participants to tap
into both the transit credit and the bike reimbursement.