HBA-KMH C.S.H.B. 3132 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3132 By: Chisum Environmental Regulation 4/28/1999 Committee Report (Substituted) 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. C.S.H.B. 3132 creates a scrap tire enforcement fund which provides for the collection of a fee of 25_ for each tire sold of a particular size and character. The fees collected under this bill are to be used by the Texas Natural Resource Conservation Commission (TNRCC) to enforce the legal disposal of scrap tires, remediate hazardous sites, and administer the program. This bill also requires vendors and disposal sites to remit reports on the collection and disposal of tires. 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 361.462, Health and Safety Code) and Texas Natural Resource Conservation Commission in SECTION 1 (Sections 361.464 and 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 ENFORCEMENT FUND Sec. 361.461. DEFINITION. Defines "scrap tire." Sec. 361.462. SCRAP TIRE RECYCLING FEE. (a) Requires a person who sells or offers to sell tires not for resale to collect a scrap tire enforcement fee of 25_ for each new tire sold that has a rim diameter of 12 inches or larger. Provides that the fee required by this section does not apply to the sale of new tires mounted on a new motor vehicle as original equipment. (b) Requires a person required to collect a fee under this section to pay the fees collected to the comptroller at a time and in a manner prescribed by the to the Texas State Comptroller of Public Accounts (comptroller). (c) Requires the comptroller to adopt rules as necessary to collect and administer the fee under this section. (d) Requires the comptroller to make copies of the reports required under this section readily available to the Texas Natural Resource Conservation Commission (TNRCC) on request. (e) Provides that this subsection does not limit or prohibit a person from charging, as a cost of conducting business, a scrap tire disposal fee to a customer who purchases a new tire from the person at retail. Prohibits a person from representing to a customer in connection with a sale or offer to sell a new tire at retail that a scrap tire disposal fee charged as a cost of conducting business is mandated by the state. (f) Authorizes the comptroller to provide for payment and reporting of scrap tire fees under this section to be made electronically. (g) Makes specified chapters and sections of the tax code applicable to the administration, payment, collection, and enforcement of fees under this section in the same manner that those chapters and sections apply to the administration, payment, collection, and enforcement of taxes under Title 2 (State Taxation), Tax Code. Sec. 361.463. SCRAP TIRE ENFORCEMENT FUND. Provides that the scrap tire enforcement fund is a special account in the general revenue fund. Provides that the fund consists of any money, and interest on money, received by TNRCC or the comptroller for use for the purposes of the fund. Authorizes the fund to be used only to pay for auditing required for scrap tire enforcement under Section 361.466, for remediating any site where scrap tires have been discarded illegally, TNRCC's reasonable and necessary administrative costs related to this subchapter, and the comptroller's reasonable and necessary administrative costs related to this subchapter. Sec. 361.464. SCRAP TIRE COLLECTION REPORT. Requires a person who sells or offers to sell new tires not for resale to send to TNRCC a scrap tire collection report at a time and in the manner prescribed by TNRCC. Requires TNRCC, by rule, to provide a form for reporting the collection of scrap tires required by this section. Sets forth the prescribed format of the form. Authorizes TNRCC to provide for electronic reporting under this section. Sec. 361.465. SCRAP TIRE DISPOSITION REPORT. Requires each person receiving scrap tires as a waste product or raw material for recycling to send to TNRCC a scrap tire disposition report at a time and in the manner prescribed by TNRCC rules and register annually with TNRCC as a permanent disposition facility for scrap tires. Requires TNRCC, by rule, to provide a form reporting the disposition of scrap tires under this section. Sets forth the prescribed format of the form. Authorizes TNRCC to require an annual fee of not more than $20 for registration under this section. Requires the reports under this section to use the tax identification number assigned to a person by the comptroller, to the extent possible. Authorizes a permitted landfill that receives shredded, split, or quartered tires for disposal to require the person bringing the tires to provide a report of the number of tires brought for disposal. Provides that the permitted landfill need only forward copies of reports received for the scrap tire transporter to satisfy the requirements of this subsection. Sec. 361.466. COMMISSION AUDIT OF SCRAP TIRE REPORTING. Requires TNRCC, to the extent practicable and necessary, to compare scrap tire collection reports required under Section 361.464 and scarp tire disposition reports required under Section 361.465 to determine if scrap tires are being properly transported, disposed of, or recycled. Requires TNRCC to conduct an investigation of any discrepancies found in the reports to determine if there is a reasonable probability that scrap tires were discarded illegally. Requires TNRCC to institute any civil or criminal enforcement action the executive director considers necessary and appropriate if the result of the investigation is positive. Sets forth possible actions. Requires the state's share of fines and penalties received under this chapter, Chapter 365 (Litter), or any other law that involves an illegal discarding site to be used, as is practicable and necessary, to remediate that site. Requires fines and penalties not used for remediation of a site to be deposited into the scrap tire enforcement fund under Section 361.463. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3132 modifies the original in the caption to delete reference to recycling of scrap tires and include references to the creation of a scrap tire enforcement fund. C.S.H.B. 3132 modifies the original in SECTION 1 (proposed Subchapter P, Health and Safety Code) to provide that the title of the subchapter is "Scrap Tire Enforcement Fund," rather than "Scrap Tire Program." The substitute further modifies the original by deleting the text of the following proposed sections: Sec. 361.461 (Findings and Intent), which provided the legislative findings of the proposed "Scrap Tire Program." Sec. 361.465 (Scrap Tire Rules), which required TNRCC, by rule, to identify approved beneficial end uses and establish criteria for determining whether an area is a distressed area. The original also authorized 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), which required 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. The original also authorized TNRCC to award a contract or grant to a person to perform actions assisting the state to dispose and recycle scrap tires, as well as clean up environmentally hazardous sites that contain scrap tires. Furthermore, the original provided the terms of any contract to provide the enumerated services, fee schedules, and payment on the contract, as well as other provisions. C.S.H.B. 3132 modifies the original in SECTION 1 by redesignating proposed Section 361.462 (Definitions) of the original as Section 361.461 (Definition), and deleting the definitions of "approved beneficial end use" and "distressed area." C.S.H.B. 3132 modifies the original in SECTION 1 by redesignating proposed Section 361.463 (Scrap Tire Recycling Fee) of the original as Section 361.462 (Scrap Tire Recycling Fee) and requiring a fee of 25_, rather than $1, to be collected and remitted to the comptroller for each new tire sold, rather than for each new tire received from a tire manufacturer located in this state or any person located outside the state and each new tire in or on a new vehicle the person sells not for resale. The substitute and the original both provide that this fee applies only to a tire that has a rim diameter of 12 inches or greater. The substitute also exempts the sale of new tires mounted on a new motor vehicle as original equipment from the fee required under this section. The substitute deletes the requirement that the fee be remitted quarterly, but rather allows that discretion to the comptroller. The substitute provides that a person is not limited or prohibited by this subchapter from charging, as a cost of conducting business, a scrap tire disposal fee, but a person is prohibited from representing to a customer in connection with certain transactions that a scrap tire disposal fee charged as a cost of conducting business is mandated by the state. Additionally, the substitute authorizes the comptroller to provide for electronic payment and reporting of scrap tire fees. Furthermore, the substitute subjects the collection and payment of fees under this subchapter to certain provisions of the Tax Code. C.S.H.B. 3132 modifies the original in SECTION 1 by redesignating proposed Section 361.464 (Scrap Tire Recycling Fund) as Section 361.463. The substitute provides the new title "Scrap Tire Enforcement Fund" for this section. Additionally, the substitute sets forth that the fund may be used to pay for auditing required for scrap tire enforcement under this Act and for remediating any site where scrap tires have been discarded illegally. The substitute also removes a provision limiting the payments from the fund that can be used by TNRCC for administrative costs. C.S.H.B. 3132 modifies the original in SECTION 1 by adding new proposed Sections 361.464361.466, Health and Safety Code. For a more in-depth analysis of these sections please see the Section-by-Section Analysis of this document. C.S.H.B. 3132 modifies the original by deleting the text of SECTION 2 of the original which required the comptroller to adopt certain enumerated rules as required under this Act by specified dates. C.S.H.B. 3132 redesignates SECTIONS 3 (effective date) and 4 (emergency clause) of the original as SECTIONS 2 and 3.