SACRAMENTO, Calif.—California lawmakers have boosted the state's new-tire fee from 25 cents to $1 per tire as a means to clean up illegal tire piles and establish recycling initiatives.
The law, Senate Bill 876, was signed by Gov. Gray Davis Sept. 29 and will go into effect on Jan. 1, 2001, the day after the current 25-cent tire fee is scheduled to sunset. Under SB 876, both tire dealers and car dealers will collect the fee from consumers—a change from the present practice where only tire dealerships collect 25 cents per new tire sold.
The new tire charge will not only apply to new tires on cars but also on all types of vehicles, which the bill defines as "any device by which any person or property may be propelled, moved or drawn upon a highway."
Retailers will retain 3 cents of every dollar garnered as reimbursement for any costs associated with the collection, according to the bill's language. The $1 charge on new tires will remain effective until Dec. 31, 2006 and then decrease to 75 cents.
SB 876 sparked intense lobbying efforts from California's two dealer associations, both of which favored moving the fee's collection point from tire dealerships to the state's Department of Motor Vehicles as an additional registration fee. The $1-per-tire fee puts dealers in an awkward position of explaining the charge to consumers, said Don Howard, president of the Western States Tire & Automotive Service Association.
Dealers already have to charge customers between $1.50 and $2 per tire to cover disposal costs on top of the tire fee instituted by the state, Mr. Howard said. For truck tires, disposal costs range from $5 to $7.50, he said.
"It's positive to get people looking for other avenues to get rid of tires and turn them into things that can be used," Mr. Howard said. "But I don't believe that should be on the tire dealer's back."
The dealer associations both contended that a tire fee on motor vehicle registrations would have saved the state $2 million in collection costs. Ed Cohn, executive director of the Southern California Automotive & Retreading Services, noted in a letter to Tire Business that the state Board of Equalization would charge the state $1.45 million to collect the fee from tire and auto dealerships.
The new law authorizes the California Integrated Waste Management Board (CIWMB), the state agency that oversees scrap tires, to spend at least $6.5 million for tire dump cleanups for the next six years—particularly the infamous 7 million-tire dumps in Westley and Tracy.
SB 876 also is expected to increase the CIWMB's scrap tire budget from $5 million per year to an estimated $30 million to $40 million per year.
The Westley pile ignited Sept. 22, 1999, while the Tracy pile caught fire Aug. 7, 1998 and is still smoldering. Environmental officials have yet to assess cleanup costs from the Tracy dump, the CIWMB spokesman said.
The state attorney general presently is suing the Westley pile's operators for reimbursement of costs incurred when the CIWMB removed all unburned tires from the site and cleaned up containment ponds, the spokesman said.
Both sites will receive top priority for cleanup and remediation from the CIWMB's larger budget, according to another board spokesman. However, he couldn't say what other recycling projects the CIWMB will fund from the increased revenues it expects to receive from the higher tire fee.
California generates more than 30 million scrap tires annually—the highest in the nation—and imports more than 3 million tires. Roughly 19 million tires are recycled annually, according to the bill.
Still, tire dealers such as Mike Waite, principal of Merced Tire Co. in Merced, feel the waste board has mismanaged the money it has received to date by funding failed recycling projects.
He noted that the board uses tire dealers to collect its funds but does not give an ear to dealer input on how to best use those funds.
"(The CIWMB) is trying to do things that they think will work, but they don't listen to the industry that's driving the whole equation," Mr. Waite said. "That's what really bums us out about it."