Serious regulatory, legislation issues concern tyre and rubber industry in US

By Miles Moore, ERJ staff (R&PN)

Washington DC -- Wouldn't Congressional cooperation be nice this year, muses the president of the tyre manufacturing industry's trade association? “We are optimistic there will be a reasonable focus on work,” Charles A. Cannon, president of the Rubber Manufacturers Association, said of the new Congress. “But until they actually take the oath, it's hard to see how it will play out.”

Cannon said the RMA is watching to see whether the divided leadership in Congress-the House of Representatives controlled by the Republicans, the Senate and executive branch by the Democrats-leads to stalemate, or to cooperation and compromise.

The forecast from the nation's primary tyre dealer group, the Tire Industry Association, is that legislation gridlock is likely, following the GOP's midterm gains and the weakening of Democratic control of the Senate.

“It's hard to imagine a lot being accomplished in the next two years, but we will continue to press forward on our major issues,” said Roy Littlefield, Tire Industry Association executive vice president.

Cannon notes there had been significant congressional turnover in districts that have tyre manufacturing facilities.

“We are looking forward to working with the newly elected members of the House and Senate,” he said. “One of our goals is to educate them about the needs of tyre manufacturers. It's a little early to say how things will go for a particular sector, but we will be very diligent in maintaining an active engagement with elected officials and the regulatory sector. They will shape the way we do business.”

Among the major issues the trade associations will be watching are:

NHTSA and fuel efficiency testing

The National Highway Traffic Safety Administration remains, along with the Environmental Protection Agency, the overridingly important government agency for both the RMA and TIA.

“We have a good dialogue going on with NHTSA,” Cannon said. A recent meeting between RMA officials and NHTSA Deputy Administrator Ronald Medford and senior NHTSA staff, he said, promised even greater coordination and information exchange than before between the industry and the agency.

NHTSA's final rule on tyre fuel efficiency testing and labeling was promulgated last March. Despite that, it remains in the early stages of development, Cannon said.

“They're still doing a lot of preliminary work in gathering information,” he said. “Their actions suggest a long timetable for completing the rule, but they could surprise us. We wouldn't object to their moving more aggressively.”

Littlefield and Paul Fiore, TIA director of government and business affairs, are frustrated by how slow NHTSA is proceeding on the consumer information portion of the fuel efficiency rule.

“When the final rule was issued, NHTSA said it would be done with the consumer information section by Sept. 30,” Fiore said. “It hasn't started.”

“Even the timetable for information getting is way behind,” Littlefield said.

Since the rulemaking began, TIA has put itself forward as the logical third-party group to administer the consumer information program of the tyre fuel efficiency rule. Littlefield said the fuel efficiency rule remains TIA's top priority.

Other countries already are conducting tyre consumer information campaigns, while tyre manufacturers such as Hankook are considering their own information programs in advance of the federal rule, Littlefield said.

Important EPA rules in the works

Several regulations important to the tyre industry are pending at the EPA, none more so than the final rules on industrial boilers and solid waste incinerators that may redefine whole tyres used as fuel as solid waste.

Such a move by the agency, most scrap tyre industry officials agree, would be a serious blow to the entire scrap tyre recycling industry.

“It's difficult to guess what the final rule will look like, but in general the EPA has taken an activist position, and we don't expect that to change,” Cannon said.

“The election provides an interesting commentary on that policy,” he said. “Will the agency be driven to initiate as much rulemaking as possible, or will it compromise and find middle ground?

Early signals are that there may be a movement toward more careful deliberation on the agency's part, but that remains to be seen whether that will happen in practice.”

Ozone, greenhouse gases and revision of the Toxic Substances Control Act are among the many other issues before the EPA that will have a major impact on the tyre industry, whatever the agency does about them, according to Cannon.

The RMA is actively involved in a number of multi-industry coalitions on broad environmental issues, both federal and state-by-state, he said.

The TIA is concerned about the possible redefinition of both TDF and used oil as solid wastes, according to Littlefield and Fiore. Besides the obvious effects such rulings would have on tyre dealers, service stations and recyclers, they said, the EPA Office of Air Quality seems poised to undo the efforts of the EPA Office of Water to get used oil and tyres out of the water stream.

“I'm incredulous they would consider regulations that would literally dump 50 million tyres and hundreds of millions of gallons of oil back into the water stream,” Littlefield said.

Eliminating scrap tyre piles

Despite the threat of the EPA solid waste incineration rule, the RMA remains pleased with the progress of scrap tyre abatement in the US and proud of its leadership role in that area.

In the 20 years since the RMA began working on the scrap tyre issue, the number of stockpiled scrap tyres in the US fell from an estimated 1 billion to about 180 million.

A recently passed law in Colorado to prevent diversion of scrap tyre funds to other purposes was a big victory for the scrap tyre recycling industry, Cannon said. Colorado has nearly one-third of the remaining scrap tyre stockpiles in the US-some 45 million to 50 million tyres-and the cleanup of those tyres would bring the RMA close to its goal of eradicating stockpiles, he said.

While the EPA rule is a threat, the diversion of state scrap tyre funds to other purposes is an ongoing reality, according to Cannon. “We hope this will not result in the reversal of scrap tyre abatement.”

The new health care law

Like most small business associations, TIA is working to obtain repeal of a provision in the new health care package that requires all businesses with more than 25 employees to file 1099 forms for every business from which they buy more than $600 worth of goods per year.

The association also has joined a coalition, the Small Business Coalition for Affordable Healthcare, with some 50 other associations.

The coalition's thrust is that the interim final rules for “grandfathered” group health plans under the Obama health care law are misguided interpretations of the statute.

“Congress conferred grandfathered health plan status on certain plans by statute,” states an Aug. 16, 2010 submission by the coalition to the Department of Health and Human Services. “Grandfathered status increases a plan's chances of survival.

“The interim final rules are based on an assumption Congress intended the agencies to decide whether and under what circumstances a plan meeting the statutory test should be stripped of its grandfathered status, thereby exposing it to a greater risk of extinction. The agencies have not identified any statutory language to support this assumption.”

Highway legislation issues

Transportation-related groups are watching carefully for reauthorisation of highway funding, for both the pitfalls and the opportunities it will present.

“Infrastructure bills are jobs bills, so highway reauthorisation will have a lot of support,” Littlefield said.

But highway reauthorisation will also open up the question of how highways are funded, he said.

This will create the possibility for enactment of a weight-distance tax, which would eliminate the federal excise tax on new heavy truck tyres, a price differential important to retreaders who aren't charged the tax.

There also exists the possibility of increasing the gasoline tax, or instituting a vehicle-miles-traveled tax on all vehicles, including passenger cars.

From Rubber & Plastics News (A Crain publication)

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