‘Gutted’ tire recycling bill passes on Arkansas Legislature’s final day

After pushback from Gov. Sarah Huckabee Sanders’ office, state lawmakers on the final day of session passed a heavily amended bill that originally would have overhauled Arkansas’ failing tire recycling program.

Senate Bill 508 gives state tax officials the authority to close businesses that are delinquent on paying the fees they collect for removing used tires, but most of the provisions in the initial bill were removed this week.

The original bill would have made sweeping changes to how the state funds its tire recycling program: proposing collecting the $3 tire fee on the purchase of new tires — including on new vehicles — and charging more for large tires.

Sanders’ administration balked at the proposal over the fee increases, which the Department of Finance and Administration estimates would’ve raised an additional $2.3 million to $5 million annually.

While tax officials estimate businesses owe as much as $4 million in delinquent fees, the amended bill isn’t expected to fix the program’s shortcomings.

Sponsor Sen. John Payton, R-Wilburn, brought the legislation because the program failed last year after fee collections lagged the costs needed to run the program.

Payton said on the Senate floor Friday that he was displeased that the bill had been “gutted” in the House, but he said he was glad a provision remains that consolidates the 11 used tire districts into four that will be governed by boards of county judges and mayors.

He told his colleagues a hypothetical story about “a multitude of wise counselors” trying to convince a stubborn “Arkansas Traveler” to keep using rubber tires instead of going back to the steel ones of past eras.

“Hopefully down the road those accountability boards can convince people better than I did that they have a cure, and maybe it’ll be a better cure,” Payton said.

House sponsor Rep. Justin Gonzales told the House the amended bill will simply give stakeholders time to work toward a permanent solution. He even said Sanders had expressed a willingness to call a special session of the General Assembly if a solution is found and urgent action is needed.

“This is not a fix to the tire program,” Gonzales said. “This is a patchwork to get us through until we can get a solution.”

A recurring problem

Tire disposal presents a difficult problem. They can’t be put into landfills because they take hundreds of years to decompose, but there isn’t huge demand for the recycled products that can be made from them.

The state’s program for disposing of scrap tires has failed at several points over the years.  The current program was created in 2017. It imposed the $3 rim removal fee for all tire customers. (It’s only $1 if the tire is being replaced by a used tire.)

Retailers remit those fee collections 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 last year. When those shortfalls occurred in the past, 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 was depleted, and the $3 fee is inadequate to cover the costs of the program. Inflation and high fuel prices 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.

Lawmakers in October approved $1 million in stop-gap funding to shore up the program until the General Assembly’s current session.

Reporter Tess Vrbin contributed to this story.