Proposal to Hike Tennessee Tire Fee Draws Industry Concern

RMA Says “Significant Review” Needed of TN Scrap Tire Program

For more information contact:
Dan Zielinski
(202) 682-4846
dzielinski@rma.org

WASHINGTON, D.C.January 11, 2007 – A proposal under consideration by Tennessee’s Solid Waste Advisory Committee (SWAC) that includes increased consumer fees on new tire purchases should include a significant review of the limitations of the state’s scrap tire program, according to a tire industry organization.

The Rubber Manufacturers Association said in a letter to state officials that Tennessee’s program, funding, and markets for scrap tires remain insufficient.

SWAC is considering an increase and expansion of the state’s tire fee by increasing the fee on new passenger and light truck tires from $1.00 per tire to $1.25 per tire, increasing the fee on large truck tires from $1.00 per tire to $5.00 per tire, and initiating a $1.25 fee per tire on all new car sales.

Preliminary estimates of the proposed fee expansion indicate a potential increase in tire revenues from $4.1 million to $6.2 million per year. RMA has urged SWAC to provide greater detail regarding the additional funds needed and how those funds may be allocated.

Consumer fees on new tires are used in many states to fund cleanup, enforcement and market development activities for scrap tires. Some states have diverted tire fee revenues to other purposes, which RMA says endangers scrap tire programs.

RMA said that increased revenues for Tennessee’s scrap tire program should stem from a review of the current program’s inefficiencies. “We believe that the current structure of the scrap tire program remains an inherent challenge to the efficient use of tire fee revenues,” says Christian Gullott, RMA director, government affairs.

According to RMA, Tennessee’s program costs, particularly for transportation of scrap tires, exceed other state programs. “Tennessee’s current fees do not meet the financial needs of the counties to administer their scrap tire programs,” Gullott wrote. He explained that counties are using the total amount of their funds to fund tire disposal, and therefore state funds are largely unavailable for enforcement activity, pile abatement, or market development.

“State scrap tire programs should be focused on the development and stimulation of sustainable markets for scrap tires. This must be both a central goal and a key component of any viable program,” explained Gullott. RMA has long known that developing efficient and self sustaining markets for scrap tires is the best management practice over the long term.”

According to RMA’s 2005 Scrap Tire Report Tennessee generates 5.9 millions tires annually with 72 percent of scrap tires sent to market. Overall, 290 million scrap tires are generated annually in the U.S. and nearly 87 percent are put to new uses in other markets such as fuel, civil engineering or used to make new products.

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The Rubber Manufacturers Association is the national trade association for the rubber products industry. Its members include more than 100 companies that manufacture various rubber products, including tires, hoses, belts, seals, molded goods, and other finished rubber products. RMA members employ over 120,000 workers and account for more than $21 billion in annual sales.

NHTSA Says Improperly Labeled Chinese Truck Tires Have Safety Consequences

NHTSA Rules Against FTS 011007

For more information contact:
Dan Zielinski
(202) 682-4846
dzielinski@rma.org

WASHINGTON, D.C.January 10, 2007 – The National Highway Traffic Safety Administration (NHTSA) today ruled that mislabeled Chinese truck tires pose a safety issue and cannot be sold for use in the U.S.

In September, the Rubber Manufacturers Association urged NHTSA to deny a petition for inconsequential non-compliance requested by Foreign Tire Sales, Inc., (FTS) an importer of Chinese tires. The tires at issue were nearly 19,000 truck tires imported to the U.S. in 2005 and 2006. The tires failed to comply with labeling regulations requiring the sidewall to display a maximum load rating and inflation values for single tire use.

“While petitioner may not intend its non-compliant tires to be used anywhere other than a container chassis, there is no guarantee that the tires may not eventually be placed in a single load application,” wrote Laurie Baulig, RMA senior vice president and general counsel, in comments to NHTSA last September.

NHTSA agreed with RMA that while the intended use of the tires may not present a safety concern, there was no guarantee that the tires may not be placed in a single load application since they are capable of being mounted and used in that manner.

In August, FTS submitted additional information to NHTSA in an attempt to demonstrate that the tires were safe. But the agency was not moved by the information.

“…these reports do not demonstrate that the tires meet the performance standard of FMVSS 119. Moreover, the issue here is not whether the tires meet those performance requirements. Rather, the question is whether the incorrect marking of the tires may itself have safety consequences,” NHTSA wrote in its denial of the FTS petition.

“Federal safety regulations are designed to protect the motoring public,” said Baulig. “RMA members invest a great deal of resources to ensure that their products comply with all rules and our members expect all tire makers who sell product in the U.S. to do the same.”

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The Rubber Manufacturers Association is the national trade association for the rubber products industry. Its members include more than 100 companies that manufacture various rubber products, including tires, hoses, belts, seals, molded goods, and other finished rubber products. RMA members employ over 120,000 workers and account for more than $21 billion in annual sales.