DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT

Solid and Hazardous Waste Commission
Hazardous Materials and Waste Management Division
6 CCR 1007-2

Statement of Basis and Purpose
 and Specific Statutory Authority for

Revisions to the Regulations Pertaining to Solid Waste Sites and Facilities (6 CCR 1007-2, Part 1) –  Sections 10.4.2 (J), 10.11.6, and 10.12.5 (B)

(Adopted by the Solid and Hazardous Waste Commission on November 15, 2016)

Basis and Purpose
	
I.	Statutory Authority – House Bill 14-1352

Section 30-20-1409, C.R.S. requires waste tire generators to maintain records related to the generation of waste tires, as pursuant to the authority granted to the Solid and Hazardous Waste Commission in section 30-20-1403, C.R.S.                                                     .

The amendment to the waste tire fee requirement is made pursuant to the authority granted to the Solid and Hazardous Waste Commission in section 30-20-1403, C.R.S.  

Section 30-20-1405, C.R.S. requires the Commission to annually set the amount of the per-ton monthly rebate paid to end users of waste tires.

II.	Purpose of the proposed regulations:

The purpose of revising section 10.4.2 (J) of the solid waste regulations (6 CCR 1007-2, Part 1) is to require that waste tire generators keep documentation/records for three (3) years for all waste tires generated, including waste tires that are generated at a waste tire generator location and self-hauled by the waste tire generator in quantities of nine (9) waste tires or less to a waste tire destination facility (e.g., another waste tire generator, waste tire processor, waste tire collection facility, waste tire monofill, and/or approved beneficial user of whole waste tires).

The modification of Section 10.11.6 of the solid waste regulations (6 CCR 1007-2, Part 1) would change the reporting frequency to the Department of Public Health and Environment (the Department) for those who aggregate monthly waste tire fees for multiple stores from annually to monthly. 

Section 10.12.5 (B) of the solid waste regulations (6 CCR 1007-2, Part 1) sets the Waste Tire End Users Fund (the Fund) per-ton rebate rate at $70.   
 
Discussion of Regulatory Proposal

Clarifying language that requires waste tire generators to keep documentation/records for all waste tires generated and the disposition of all waste tires, including waste tires that are self-hauled by waste tire generators in quantities of nine or less waste tires at a time, was added to section 10.4.2 (J) for the following reasons:  1) to minimize the illegal disposal of waste tires in Colorado by ensuring that all newly generated waste tires are accounted for and are properly recycled or dispositioned; 2) to achieve more accurate tracking of waste tire generation; 3) to identify discrepancies between the number of new tires sold and the number of waste tires generated; and 4) to reconcile waste tire fee accounts with actual waste tire generation. Waste tire generators that self-haul loads of nine (9) or less waste tires at a time can use Form WT-10 (Waste Tire Generator – Transporting of 9 or Less Waste Tires at a Time Form) or use an alternate method of documentation that documents where the waste tires were delivered.

Changing the reporting frequency to the Department in section 10.11.6 for those who aggregate monthly waste tire fees for multiple stores from annually to monthly would: 1) ensure that the proper waste tire fee has been collected each month for each store; 2) allow for quicker identification of overpayment and applying credit faster; 3) achieve more accurate tracking of new tire sales; and 4) reconcile waste tire fee accounts with actual waste tire generation.

The proposed section 10.12.5 (B) requires the Department to payout a per-ton rebate rate of $70 for approved applications submitted by End Users, Retailers, and certain Processors of tire-derived products and waste tires. If the amount of rebates exceeds the amount available in the Fund, the Department will pay the rebate at a reduced per-ton basis that will not cause a deficit in the Fund.

Description of Local Government Involvement in the Stakeholder Process 
	
	Executive Order D 2011-005 (EO-5), “Establishing a Policy to Enhance the Relationship between State and Local Government” requires state rulemaking agencies to consult with and engage local governments prior to the promulgation of any rules containing mandates.  The Department completed an EO-5 Internal Communication Form – Conception Phase that was transmitted to local governments.  The new regulation will only impact local governments who generate waste tires or apply for a rebate from the Fund for the end use of tire-derived products or waste tires.

Issues Encountered During Stakeholder Process: 

The Department held two stakeholder meetings via teleconference on July 26, 2016 for the changes to sections 10.4.2 (J) and 10.11.6.  The Department also contacted by email ~1,640 waste tire generators and ~75 individuals who aggregate monthly waste tire fees for multiple stores. The Department responded to the following questions:

1.	If a waste tire generator already uses a registered waste tire hauler and keeps the uniform waste tire manifest (Form WT-2) provided by the hauler, would additional documentation in addition to Form WT-2 be required? Answer: No, additional documentation would not be required.
2.	Would customers who elect to not leave their waste tires as the tire shop and instead take their own waste tires be required to document where their waste tires would go? Answer: No, this regulation would not impact customers who choose to keep their own waste tires.
3.	Would waste tire generators who self-haul nine or less waste tires to a waste tires destination facility be required to undergo an application process to do this? Answer: No, a waste tire generator would be required to be registered with the Department as a waste tire generator and use Form WT-10 (Waste Tire Generator – Transporting of 9 or Less Waste Tires at a Time Form) or use an alternated method of documentation that documents where the waste tires were delivered.
4.	Can records of where the waste tire generator self-hauled nine or less waste tires at a time be kept electronically?  Answer: Yes.
5.	What evidence is there that improvement/protection to the public’s health and the environment will be increased/augmented by the administrative burden of generating more paperwork and tracking the hauling of nine or less waste tires by waste tire generators:  Answer: The proposed regulation requires documentation that indicates where the nine or less waste tires that are self-hauled by waste tire generations were delivered. The present regulations do not have a documentation requirement for waste tire generators who self-haul nine or less waste tires at a time which makes it difficult for the Department and Department contractors who conduct waste tire generator inspections on the Department’s behalf to determine if these waste tires were actually delivered to a waste tire destination facility or if they were disposed of illegally.
6.	When would the monthly reporting requirement for those who aggregate monthly waste 
	tire fees take effect?  Answer: It would not take effect until the regulations are passed and 
	on the effective date of the regulation. Those who aggregate monthly waste 
	tire fees will be notified by the Department on the new regulation change and the starting date that Form WT-9 would be required to be submitted monthly.

The per-ton rebate rate of $70 was vetted during an August 24, 2016 stakeholder process.  The Department provided a forecasting spreadsheet that contained the following information: 

1.	Forecasting on a per ton basis tire-derived products and/or waste tires to be end used, sold, or processed in calendar year 2017. This information was collected from End Users, Retailers, and Processors who participated in the Fund in calendar 2015 and with new applicants who were not participating in the program in 2015.
2.	Projected funds available in calendar year 2017 base on remaining funds from calendar year 2016 and waste tire fees collected during fiscal year 2016.
3.	Projected rebate payouts based on forecasted tons and a per-ton rate of $70.
4.	Projected monthly fund balances based on projected revenues and rebate payouts.
5.	Projected Fund spending authority throughout calendar year 2017.
6.	Historical data breakdown of end used tons approved by the Fund over the last three calendar years.

The Department wants the rebate amount set at the highest per-ton amount that will not exceed the forecasted Fund balance. The current year spending authority for FY 2017 may need to be adjusted to continue the per-ton rate of $70 uninterrupted.  Based on the projected fund balance and forecast provided by those are currently participating in the program, the Fund can support a per-ton rate of $70. 

Many stakeholders disagreed with setting the per-ton rate at $70. The stakeholders feel it should be set at a per-ton rate of $80, which is the per ton rate limit set in statute. 

Some of the reasons stakeholders wanted the per-ton rate at $80 were:

1.	Forecasts provided by the Department in the past were not accurate, which has caused a large balance in the Fund. 
2.	Since the Fund is set to repeal on January 1, 2018, stakeholders wanted to ensure that all funds would be distributed to stakeholders prior to the program ending. 
3.	Many of the processors indicated there was not the working capacity in the state to generate the forecasted tons calculated by the Department. 
4.	Some argued that with the Fund ending, there would be a slowdown in usage in the state, meaning there would be less tons applied for, thus allowing for a bigger per ton rate. 
5.	Although a per-ton rate of $80 may potentially exhaust funds faster, the stakeholders were not concern that the per-ton rate could fluctuate starting mid-calendar year 2017. 

The Department, after consideration of the stakeholders comments, feel that a per-ton rate of $70 would be the most conservative rate that would equalize, but not exceed, funds available to generate consistent rebates during calendar year 2017. 

The stakeholders understand that if the forecast of tons end used, sold, or processed exceeds projections, the spending authority is not adjusted, or if the Fund balance or waste tire fees collected are lower than expected, the per-ton rate of $70 may be reduced or may be unavailable.

Regulatory Alternatives

	No other regulatory alternatives were evaluated.

Cost/Benefit Analysis

A cost-benefit analysis will be performed if requested by the Colorado Department of Regulatory Services.