HBA-KMH H.B. 3132 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3132 By: Chisum Environmental Regulation 3/30/1999 Introduced BACKGROUND AND PURPOSE The Texas Legislature created a scrap tire program in 1991 to address a problem with illegally dumped tires and to create recycling and end-use markets. A $2 fee was paid at the point of retail purchase for each tire sold and it was used to pay processors to transport tires from tire dealers and shred the tires into chips. After several years of the tire program, few recycling and end-use markets had been created. The Texas Legislature later changed the law to include only those tire processors who were actually sending tire chips to an end-use market. In 1997, the Texas Legislature allowed the tire program to expire under sunset rules. H.B. 3132 creates a scrap tire program which provides for the collection of a fee of $1 for each tire received from a manufacturer within the state, or tire received from a source outside of the state, and each tire on a new vehicle sold other than for resale. The fees collected under this bill are to be used by the Texas Natural Resource Conservation Commission (TNRCC) to administer the program, including finding beneficial end uses for scrap tires and scrap tire components. This bill also requires TNRCC to use the funds to alleviate and mitigate conditions caused by scrap tires in distressed areas through contracts with processors, and grants. Furthermore, this bill authorizes some of the fund to be used by the Texas State Comptroller of Public Accounts to assist in the administration of this program. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the comptroller of public accounts in SECTION 1 (Section 361.463, Health and Safety Code), and the Texas Natural Resource Conservation Commission in SECTION 1 (Section 361.465, Health and Safety Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 361, Health and Safety Code, by adding Subchapter P, as follows: SUBCHAPTER P. SCRAP TIRE PROGRAM Sec. 361.461. FINDINGS AND INTENT. Provides the legislative findings. Sec. 361.462. DEFINITIONS. Defines "approved beneficial end use," "distressed area," and "scrap tire." Sec. 361.463. SCRAP TIRE RECYCLING FEE. (a) Requires a person to pay a fee of $1 to the Texas State Comptroller of Public Accounts (comptroller) for each new tire the person resells if the person received the tire from a tire manufacturer located in this state or from any person located outside this state and for each new tire in or on a new vehicle the person sells not for resale. (b) Applies this fee only to a motor vehicle tire with a rim diameter of 12 inches or larger. (c) Requires a person required to collect a fee under this section to pay the fees collected each fiscal quarter to the comptroller at a time and in a manner prescribed by the comptroller. (d) Requires the comptroller to adopt rules as necessary to administer this section. Sec. 361.464. SCRAP TIRE RECYCLING FUND. Provides that the scrap tire recycling fund is a special account in the general revenue fund. Provides that the fund consists of any money, and interest on money, received by the Texas Natural Resource Conservation Commission (TNRCC) for use for the purposes of the fund. Authorizes the fund to be used only to pay the costs of handling scrap tires under a contract or grant awarded under Section 361.466, TNRCC's reasonable and necessary administrative costs related to this subchapter, and the comptroller's reasonable and necessary administrative costs related to this subchapter. Prohibits payments from the fund in a fiscal year related to TNRCC's costs from exceeding six percent of the money that accrues in a fiscal year. Prohibits payments from the fund in a fiscal year related to the comptroller's costs from exceeding two percent of the money that accrues in a fiscal year. Sec. 361.465. SCRAP TIRE RULES. Requires TNRCC, by rule, to identify approved beneficial end uses and establish criteria for determining whether an area is a distressed area. Authorizes TNRCC, by rule, to establish a process by which a person may apply for an end use to be approved as a beneficial end use for the purposes of this subchapter. Sec. 361.466. CONTRACTS AND GRANTS. (a) Requires TNRCC to identify distressed areas that are in need of assistance to alleviate or mitigate a nuisance, threat to the environment or human health or safety, or other detrimental effects caused by the presence of scrap tires. (b) Authorizes TNRCC to award a contract or grant to a person for the transportation of scrap tires, an approved beneficial end use, the remediation of an illegal scrap tire dump or storage facility, the processing of scrap tires, or a cost of scrap tire disposal, in order to mitigate a nuisance, threat, or other condition of a distressed area. (c) Provides that a contract or grant awarded for processing of scrap tires must be conditioned on the contracting party's processing them in a manner reasonably designed to render the resulting material marketable and having a verified and binding contract to supply the resulting material for an approved and beneficial use. (d) Requires TNRCC to attempt to act under this section to encourage the use of scrap tires or scrap tire components for an approved beneficial end use instead of the disposal of the tires or components. (e) Authorizes a contract with TNRCC entered into under this section to provide for each of the contracting parties to pay a specified portion of scrap tire handling costs. (f) Requires TNRCC to determine the number and types of contracts or grants awarded under this section and requires TNRCC to determine the provisions, including the amount served, of each contract or grant. Require TNRCC to consider the necessity of alleviating or mitigating conditions scrap tires are causing or have caused, the relative seriousness of conditions in different distressed areas, and the amount of money appropriated to TNRCC from the scrap tire recycling fund for contracts or grants under this subchapter. SECTION 2. (a) Requires the comptroller to adopt rules as required under Subchapter P, Chapter 361, Health and Safety Code, as added by this Act. Provides that the rules adopted under this provision authorize the comptroller: (1) to begin receiving payments of fees collected under Section 361.463, Health and Safety Code, as added by this Act, for the fiscal quarter beginning December 1, 1999; and (2) to assess a penalty for a violation of Section 361.463, Health and Safety Code, as added by this Act, that occurs on or after January 1, 2000. (b) Applies the fee requirement imposed by Section 361.463, Health and Safety Code, as added by this Act, to a new tire received or a new tire in or on a vehicle sold on or after January 1, 2000. (c) Requires TNRCC to adopt rules to implement Subchapter P, Chapter 361, Health and Safety Code, as added by this Act, to take effect not later than January 1, 2000. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause.