Arkansas Tire Recycling Program Needs A Fix

Privatization, more fees among proposals

State Rep. Lanny Fite (R-Benton), sponsor of the 2017 Arkansas law that created the state’s tire program, plans to introduce legislation to dismantle it and privatize  collection, management, recycling and disposal of scrap tires in the state.

Rather than having the state administer the program and levy a special fee on tires, Fite’s proposed legislation would shift the burden of disposal to tire retailers, recyclers and collectors.

The state Legislature is being forced to take action on the Tire Accountability Program because it ran out of money to reimburse scrap tire processors in August.

The shortfall triggered an ongoing audit of the state program and local tire recycling districts by the Arkansas Legislative Audit.  The audit is expected to be completed in the coming months.

In October lawmakers approved $1 million in stop-gap funding to shore up the program until the General Assembly convenes in regular session in 2023.

Tire recyclers and others say a completely private program could negatively affect tire retailers in rural Arkansas where there would be little profit motive for recyclers to serve, resulting in more illegally dumped tires.

Fite’s 2017 law instituted a $3 rim removal fee all customers pay for the retail removal of used tires. (It’s only $1 if the tire is being replaced by a used tire.)

Retailers remit those fees to the state, and in exchange, may dispose of scrap tires at licensed facilities. (Individuals may dispose of up to four tires a month at state-permitted facilities free of charge.)

The rim removal fees fund the Tire Accountability Program, and it’s that revenue that fell short during the 2nd quarter of 2022.  When shortfalls occur, the state made up for it with surplus funds from the tire program that was in place before the 2017 law change.

But that surplus has been depleted, and the $3 fee is inadequate to cover the costs of the program.

Inflation and high fuel prices have made matters worse.

When the program ran out of money in August, some tire recycling facilities stopped accepting scrap tires, leaving piles of old tires to collect at car dealerships and tire shops.

Fite is drafting and revising his bill before sending it out for input from industry stakeholders in early January..

The association of state tire districts plans to propose an alternative. Instead of eliminating the state program, they hope to fix some of its shortfalls, including expanding collection to cover more tires, particularly at the wholesale level and increasing the rim removal fee for truck tires to $5, the same amount charged for truck tires before the scrap tire program’s 2017 overhaul. The groups’ proposal would also include a fee on tires sold on new cars, association executives said. The tire groups would like to see the final version of Fite’s bill, but have reservations about privatization.

The Arkansas Department of Energy and Environment, which administers the Tire Accountability Program, doesn’t plan to offer any legislation or fixes during the session, according to Chief of Staff April Golden.

Source: Arkansas Advocate

© Scrap Tire News, January 2023