S.B. No. 776
                                        AN ACT
    1-1  relating to the waste tire recycling program; making an
    1-2  appropriation.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  In addition to amounts previously appropriated
    1-5  under the current General Appropriations Act (page I-219, Chapter
    1-6  1051, Acts of the 73rd Legislature, 1993) or other law for the
    1-7  current fiscal biennium, the sum of $9.34 million is appropriated
    1-8  to the Texas Natural Resource Conservation Commission from the
    1-9  waste tire recycling fund.
   1-10        SECTION 2.  Section 361.471, Health and Safety Code, is
   1-11  amended to read as follows:
   1-12        Sec. 361.471.  DEFINITIONS.  In this subchapter:
   1-13              (1)  "Fund" means the waste tire recycling fund.
   1-14              (2)  "Green tire" means the casing form of a tire that
   1-15  has not been cured or does not have a tread or marking of any kind.
   1-16              (3)  "Good used tire" means a used tire, not including
   1-17  a recapped or retreaded tire, suitable for continued use for its
   1-18  original intended purpose.
   1-19              (4)  "Manufacturer reject tire" means a tire rendered
   1-20  defective in the manufacturing process, whether the tire is
   1-21  determined to be defective before or after consumer purchase.
   1-22              (5) <(4)>  "Mobile tire shredder" means equipment
   1-23  mounted on wheels or skid-mounted and hauled from place to place to
    2-1  split, shred, or quarter used or scrap tires.
    2-2              (6) <(5)>  "Scrap tire" has the meaning assigned by
    2-3  Section 361.112.
    2-4              (7)  "Waste tire energy recovery facility" means a
    2-5  facility at which whole used or scrap tires or shredded tires are
    2-6  used as a fuel, including:
    2-7                    (A)  a cement kiln;
    2-8                    (B)  a utility boiler;
    2-9                    (C)  a pulp and paper mill;
   2-10                    (D)  a cogeneration facility; or
   2-11                    (E)  another facility designated by the
   2-12  commission.
   2-13              (8) <(6)>  "Waste tire facility" means a facility
   2-14  registered by the commission under Section 361.477 at which scrap
   2-15  tires are collected and shredded to facilitate the future
   2-16  extraction of useful materials for recycling, reuse, or energy
   2-17  recovery and are stored in a waste tire storage facility or a
   2-18  facility that recycles, reuses, or recovers the energy from the
   2-19  shredded tire pieces.
   2-20              (9) <(7)>  "Waste tire processor" means:
   2-21                    (A)  a waste tire facility; or
   2-22                    (B)  a mobile tire shredder that splits, shreds,
   2-23  or quarters tires and deposits the split, shredded, or quartered
   2-24  tires for eventual recycling, reuse, or energy recovery at:
   2-25                          (i)  a waste tire storage facility
    3-1  registered by the commission under Section 361.112; or
    3-2                          (ii)  a waste tire facility.
    3-3              (10) <(8)>  "Waste tire storage facility" means a
    3-4  facility registered by the commission under Section 361.477 at
    3-5  which whole used or scrap tires or shredded tire pieces are
    3-6  collected and stored to facilitate the future extraction of useful
    3-7  material for recycling, reuse, or recovery.  The term does not
    3-8  include a marine dock, rail yard, or trucking facility used to
    3-9  store tires that are awaiting shipment to a person for recycling,
   3-10  reuse, or energy recovery for 30 days or less.
   3-11              (11) <(9)>  "Waste tire transporter" means a person who
   3-12  collects and transports used or scrap tires or scrap tire pieces
   3-13  for storage or disposal.
   3-14              (12) <(10)>  "Weighed tire" means a unit of weight for
   3-15  shredded scrap tires that is equal to 18.7 pounds.
   3-16        SECTION 3.  Subsections (a), (c), (d), (h), (i), and (j),
   3-17  Section 361.472, Health and Safety Code, are amended to read as
   3-18  follows:
   3-19        (a)  A person in the business of selling good used tires for
   3-20  use on a vehicle, or a person in the business of selling used
   3-21  vehicles or used vehicle parts <wholesale or retail tire dealer>
   3-22  who sells or offers to sell new or good used tires not for resale
   3-23  shall collect at the time and place of sale a waste tire recycling
   3-24  fee for each <new> tire sold as follows:
   3-25              (1)  $2 for each new tire that has a rim diameter of 12
    4-1  inches or more but less than 17.5 inches and $1 for each good used
    4-2  tire that has a rim diameter of 12 inches or more but less than
    4-3  17.5 inches;
    4-4              (2)  $3.50 for each new tire that has a rim diameter of
    4-5  17.5 inches or greater, other than an off-the-road tire intended
    4-6  for use on heavy machinery, including an earthmover, a
    4-7  loader/dozer, a grader, or mining equipment <but less then 25
    4-8  inches>; and
    4-9              (3)  $2 for a new motorcycle tire, regardless of the
   4-10  rim diameter.
   4-11        (c)  A fee may not be assessed for:
   4-12              (1)  a recapped or retreaded tire; or
   4-13              (2)  a bicycle tire.
   4-14        (d)  A person <dealer> required to collect a fee under this
   4-15  section:
   4-16              (1)  shall list as a separate item on an invoice a fee
   4-17  due under this section; and
   4-18              (2)  except as provided by Subsection (e), on or before
   4-19  the 20th day of the month following the end of each calendar month
   4-20  and on a form and in the manner prescribed by the comptroller,
   4-21  shall file a report with and shall remit to the comptroller the
   4-22  amount of fees collected during the preceding calendar month.
   4-23        (h)  A waste tire recycling fee is imposed on the storage,
   4-24  use, or consumption in this state of a <new> tire at the same rate
   4-25  as provided by Subsection (a), except when purchased for the
    5-1  purpose of resale.
    5-2        (i)  A person storing, using, or consuming a <new> tire in
    5-3  this state is liable for the waste tire recycling fee as defined in
    5-4  this section and is responsible for reporting and paying the fee to
    5-5  the comptroller in the same manner as a person required to collect
    5-6  this fee, as provided in Subsections (d)(2) and (e).
    5-7        (j)  A person storing, using, or consuming a <new> tire in
    5-8  this state is not further liable for the waste tire recycling fee
    5-9  imposed by Subsection (a) if the person:
   5-10              (1)  pays the fee to:
   5-11                    (A)  a person who is required to collect the fee
   5-12  under Subsection (a) and who is <wholesaler or retailer> engaged in
   5-13  business in this state; or
   5-14                    (B)  another person authorized by the comptroller
   5-15  to collect the fee; and
   5-16              (2)  receives <from the wholesaler, retailer, or other
   5-17  person> a purchaser's receipt from the person to whom the fee was
   5-18  paid.
   5-19        SECTION 4.  Section 361.4725, Health and Safety Code, is
   5-20  amended to read as follows:
   5-21        Sec. 361.4725.  REGISTRATION; FEE.  A person who applies to
   5-22  the commission to register a waste tire storage facility, a waste
   5-23  tire energy recovery facility storage site, a waste tire recycler,
   5-24  or a fixed or mobile tire processor, or applies to renew or amend
   5-25  the registration, must pay a fee of $500.
    6-1        SECTION 5.  Section 361.473, Health and Safety Code, is
    6-2  amended by adding Subsection (d) to read as follows:
    6-3        (d)  The comptroller and commission jointly shall develop and
    6-4  implement an enforcement program to pursue the collection of
    6-5  delinquent fees assessed under Section 361.472.
    6-6        SECTION 6.  Subsections (d), (e), (f), and (i), Section
    6-7  361.475, Health and Safety Code, are amended to read as follows:
    6-8        (d)  The fund shall <may> be used only to <pay>:
    6-9              (1)  pay waste tire processors, waste tire energy
   6-10  recovery facility owners or operators, or waste tire recyclers that
   6-11  meet the requirements for payment under Section 361.477, 361.4771,
   6-12  361.4772, or 361.4773 and rules adopted under those sections <that
   6-13  section>;
   6-14              (2)  pay the commission's reasonable and necessary
   6-15  administrative costs of performing its duties under this subchapter
   6-16  in an amount not to exceed six percent of the money annually
   6-17  accruing to the fund; <and>
   6-18              (3)  pay the comptroller's reasonable and necessary
   6-19  administrative costs of performing the comptroller's duties under
   6-20  this subchapter in an amount not to exceed two percent of the money
   6-21  annually accruing to the fund;
   6-22              (4)  provide grants to waste tire energy recovery
   6-23  facility owners or operators to cover equipment capital investment
   6-24  costs and equipment installation costs to enable a facility to use
   6-25  tire shreds as fuel; and
    7-1              (5)  provide grants for recycling facility construction
    7-2  costs.
    7-3        (e)  Registration fees received under Section 361.4725 shall
    7-4  be allocated to the commission for its reasonable and necessary
    7-5  costs associated with reviewing applications for registration of
    7-6  and with registering:
    7-7              (1)  fixed and mobile tire processing facilities and
    7-8  storage sites;
    7-9              (2)  waste tire energy recovery facilities and storage
   7-10  sites; and
   7-11              (3)  waste tire recyclers.
   7-12        (f)  The fund may not be used to reimburse shredding or
   7-13  burning of:
   7-14              (1)  innertubes;
   7-15              (2)  scrap rubber products;
   7-16              (3)  green tires;
   7-17              (4)  industrial solid waste, excluding waste tires;
   7-18              (5)  oversized tires, as defined by commission rule,
   7-19  unless the oversized tires are collected from a priority
   7-20  enforcement list site; <or>
   7-21              (6)  manufacturer reject tires; or
   7-22              (7)  nonpneumatic tires.
   7-23        (i)  If the commission has reason to believe that the <fund>
   7-24  balance of money appropriated from the fund will fall below
   7-25  $500,000, the commission may:
    8-1              (1)  suspend the requirement to reimburse priority
    8-2  enforcement list tires shredded in excess of the minimum percentage
    8-3  identified in Section 361.477(c)(3)(C); <or>
    8-4              (2)  limit the number of waste tires for which a
    8-5  processor, waste tire energy recovery facility owner or operator,
    8-6  or waste tire recycler will be reimbursed; or
    8-7              (3)  discontinue paid carryover.
    8-8        SECTION 7.  Subsections (a), (b), (c), (d), (g), (h), (i),
    8-9  (j), and (k), Section 361.477, Health and Safety Code, are amended
   8-10  to read as follows:
   8-11        (a)  The commission each month shall pay a waste tire
   8-12  processor that shreds scrap tires and meets the requirements of
   8-13  this section and rules adopted under this section an amount equal
   8-14  to 80 <85> cents for each weighed tire shredded by the processor
   8-15  during the preceding calendar month.
   8-16        (b)  If the total number of used or scrap tires or tire
   8-17  pieces contained in illegal scrap tire sites that are identified on
   8-18  the priority enforcement list is below 2,500,000 <500,000> tires,
   8-19  the commission may pay 80 <more than 85> cents or an appropriate
   8-20  amount determined by the commission for each weighed tire to
   8-21  processors with whom the commission has contracted to remove and
   8-22  shred scrap tires and scrap tire pieces from priority enforcement
   8-23  list sites.  The 2,500,000 <500,000> tire limit does not include
   8-24  those tires contained in sites under commission enforcement or
   8-25  attorney general action or that require corrective action or
    9-1  remedial action in response to a release or threat of release of
    9-2  hazardous substances.  In acting under this subsection, the
    9-3  commission may contract with processors on a regional or
    9-4  site-specific basis.  The contracts shall be procured through a
    9-5  competitive bid process conducted in accordance with the provisions
    9-6  of the State Purchasing and General Services Act (Article 601b,
    9-7  Vernon's Texas Civil Statutes) applicable to contracts for
    9-8  services.  Notwithstanding Subsection (c), while the commission is
    9-9  using a competitive bid process for assignment of sites listed on
   9-10  the priority enforcement list, the priority enforcement list
   9-11  requirements of Subsection (c)(3)(C) do not apply to an application
   9-12  for payment.  The commission may elect not to enter into contracts
   9-13  under this subsection.  The contracts may be only for the removal
   9-14  and shredding of tires from priority enforcement list sites.
   9-15        (c)  A waste tire processor that desires to receive payment
   9-16  under this section for tires shredded by the processor during a
   9-17  calendar month must:
   9-18              (1)  apply to the commission for registration in
   9-19  accordance with forms prescribed by the commission;
   9-20              (2)  apply to the commission for payment on forms
   9-21  prescribed by the commission or, on a voluntary basis, apply by a
   9-22  removable storage medium stored in an industry standard file format
   9-23  acceptable to the commission;
   9-24              (3)  demonstrate as required by rules adopted under
   9-25  this section that:
   10-1                    (A)  all tires for which payment is sought have
   10-2  been shredded to an industry standard two-inch minus <a> particle
   10-3  size or, if approved by the commission, shredded to an alternative
   10-4  particle size set by a contract requirement related to recycling or
   10-5  end use of the particles <not larger than nine square inches>;
   10-6                    (B)  not less than 50 <25> percent of those tires
   10-7  were collected from generators, unless this requirement is
   10-8  suspended by the commission on consideration of service needs
   10-9  contained in a contract drafted under Subsection (b); and
  10-10                    (C)  if the total number of whole used or scrap
  10-11  tires or shredded tire pieces contained in illegal waste tire sites
  10-12  that are identified on the priority enforcement list exceeds
  10-13  2,500,000 <500,000> tires for more than 60 <30> consecutive days,
  10-14  not less than 15 percent and not more than 30 percent of those
  10-15  tires were collected from scrap tire sites listed on the priority
  10-16  enforcement list;
  10-17              (4)  provide any other information the commission
  10-18  determines is needed to accomplish the purposes of this subchapter,
  10-19  including a monthly report of scrap tires or tire pieces shredded,
  10-20  subtotaled by tire count or weight, for each generator number and
  10-21  priority enforcement list number;
  10-22              (5)  demonstrate that energy recovery activities in the
  10-23  state are in compliance with applicable air emission control rules
  10-24  and standards <as adopted by the Texas Air Control Board>; and
  10-25              (6)  provide financial assurance deemed adequate by the
   11-1  commission that corresponds to:
   11-2                    (A)  the payment appropriate for the number of
   11-3  scrap tires the processor anticipates shredding in the next
   11-4  calendar month; or
   11-5                    (B)  the number of scrap tires the waste tire
   11-6  storage site owner or operator anticipates accepting for storage in
   11-7  the next calendar month.
   11-8        (d)  A waste tire processor that in any month exceeds the
   11-9  minimum requirement of Subsection (c)(3)(C) may <shall> receive <a>
  11-10  credit only for paid carryover in <for> the amount in excess of the
  11-11  requirement that may be used to meet the minimum requirement during
  11-12  a later month.  The commission by rule may prescribe the method of
  11-13  applying credits accrued under this subsection.
  11-14        (g)  Beginning January 1, 1996 <Notwithstanding Section
  11-15  361.486>, the commission may reimburse a processor for shredded
  11-16  scrap tires only if the processor has a binding agreement to
  11-17  deliver the shredded scrap tires to a person to recycle or reuse or
  11-18  to use for energy recovery within 180 days after the date of
  11-19  reimbursement.  The commission shall suspend subsequent shredding
  11-20  reimbursements to a processor that fails to deliver the tire shreds
  11-21  to an identified end-use market before the 181st day after the date
  11-22  of reimbursement unless the executive director determines that the
  11-23  failure to deliver was caused by an act of God or by unforeseen
  11-24  business events.  The commission may not resume suspended
  11-25  reimbursements until the processor makes all delinquent deliveries.
   12-1        (h)  The commission may not pay a waste tire processor for
   12-2  processing scrap tires if <the commission determines that the
   12-3  processor>:
   12-4              (1)  the commission field office and central office
   12-5  program staff have not reviewed and approved for further processing
   12-6  by the commission all information submitted to the commission by
   12-7  the waste tire processor as required by Subsection (c) or rules
   12-8  adopted under this section; or
   12-9              (2)  the commission determines that the processor:
  12-10                    (A)  has not provided adequate financial
  12-11  assurance;
  12-12                    (B) <(2)>  does not have adequate fire
  12-13  protection; or
  12-14                    (C) <(3)>  is causing an imminent danger to
  12-15  public health or welfare.
  12-16        (i)  A waste tire processor that in any month exceeds the
  12-17  generator percentage of the allocated number of waste tires
  12-18  assigned for reimbursement purposes may accrue credit only for paid
  12-19  generator carryover in the amount in excess of the requirement that
  12-20  may be used to meet the allocation maximum during a later month.
  12-21  The commission by rule may prescribe the method of applying
  12-22  carryover credit accrued under this section <shall issue to an
  12-23  applicant all processing and storage registrations necessary to
  12-24  begin operations and obtain reimbursement from the fund if the
  12-25  applicant, on or before March 10, 1993:>
   13-1              <(1)  had an application pending for a new processing
   13-2  facility that was reviewed by the commission and found to be in
   13-3  general technical compliance;>
   13-4              <(2)  had an application pending for a new storage
   13-5  facility with a total capacity in excess of 7 million waste tire
   13-6  units; and>
   13-7              <(3)  had expended or committed in excess of $1 million
   13-8  in total project costs>.
   13-9        (j)  The commission shall adopt rules to manage payments from
  13-10  the fund to prevent  depletion of the fund.  Rules adopted under
  13-11  this subsection shall consider<:>
  13-12              <(1)>  appropriate payments to processors that reflect
  13-13  the varying amounts of money available in the fund.  In any
  13-14  allocation adopted for processors under this section, the
  13-15  commission shall consider the monthly average percentage of
  13-16  shredded tires the processor has forwarded to an end-use or
  13-17  recycling market.  In addition, the commission may consider the
  13-18  historical average number of tires for which the processor has been
  13-19  reimbursed and such other factors as may be determined by the
  13-20  commission<;>
  13-21              <(2)  a waste tire processor's monthly average number
  13-22  of tires for which the processor has been reimbursed historically;>
  13-23              <(3)  a waste tire processor's shredding and storage
  13-24  capacity; and>
  13-25              <(4)  the date the waste tire processor was
   14-1  registered>.
   14-2        (k)  Notwithstanding Subsection (a), beginning September 1,
   14-3  1995, the commission shall reimburse a waste tire processor an
   14-4  additional five cents for each weighed tire if the commission
   14-5  determines that the processor has a binding agreement to deliver
   14-6  100 percent of the scrap tires shredded by the processor monthly to
   14-7  a person to recycle or reuse or to use for energy recovery and the
   14-8  commission verifies that the processor has delivered the tire
   14-9  shreds to such identified end-use market.  This section applies
  14-10  only to a waste tire processor registered on January 1, 1995, and
  14-11  that has a verified end market for the processor's tire shreds on
  14-12  June 1, 1995.  <If a waste tire processor does not fully use its
  14-13  monthly allocation for reimbursement, the commission may assign the
  14-14  unused portion of the allocation to another waste tire processor
  14-15  who can demonstrate having underutilized shredding and storage
  14-16  capacity available for service to rural counties in this state.>
  14-17        SECTION 8.  Section 361.4771, Health and Safety Code, is
  14-18  amended to read as follows:
  14-19        Sec. 361.4771.  PAYMENT FOR ENERGY RECOVERY FROM WHOLE WASTE
  14-20  TIRES OR SHREDDED TIRES.  (a)  The commission shall adopt rules
  14-21  governing payments to waste tire energy recovery facilities for
  14-22  weighed tires used by the facility for fuel.  The rules must
  14-23  include rules governing registration and application procedures.
  14-24  The rules must include a voluntary alternative process for making a
  14-25  payment application by the use of an industry standard file format
   15-1  removable storage medium.
   15-2        (b)  To receive payment under this section and Section
   15-3  361.4773, a waste tire energy recovery facility owner or operator
   15-4  must:
   15-5              (1)  apply to the commission for registration in the
   15-6  manner and on forms prescribed by commission rule;
   15-7              (2)  apply to the commission for payment in a manner
   15-8  and on forms prescribed by commission rule;
   15-9              (3)  demonstrate that all tires for which the owner or
  15-10  operator applies for payment are whole waste tires or shredded
  15-11  tires;
  15-12              (4)  send the commission a monthly report of the number
  15-13  of whole waste tires or shredded tires used for energy recovery,
  15-14  subtotaled by tire count or by weight attributed to each generator
  15-15  number;
  15-16              (5)  demonstrate that the energy recovery activities
  15-17  comply with applicable air emission control standards and rules;
  15-18              (6)  submit evidence of financial responsibility in an
  15-19  amount adequate to assure proper cleanup and closure of the
  15-20  facility, if the person anticipates accepting an amount of shredded
  15-21  tire pieces for storage that exceeds the facility's 30-day supply;
  15-22              (7)  if the number of whole used or scrap tires or
  15-23  shredded tire pieces contained in illegal waste tire sites that are
  15-24  identified on the priority enforcement list exceeds 2,500,000 tires
  15-25  for more than 60 consecutive days, demonstrate that not less than
   16-1  15 percent and not more than 30 percent of the tires used for
   16-2  energy recovery at the facility were collected from scrap tire
   16-3  sites listed on the priority enforcement list; and
   16-4              (8)  provide any other information required by
   16-5  commission rule.
   16-6        (c)  A waste tire energy recovery facility may not store in
   16-7  excess of a 30-day supply of waste tires or shredded tires at a
   16-8  site at which the owner or operator intends to burn or store waste
   16-9  tires or shredded tires until the facility is registered by the
  16-10  commission as a waste tire energy recovery facility storage site.
  16-11        (d)  The commission may not pay a waste tire energy recovery
  16-12  facility owner or operator for using waste tires or shredded tires
  16-13  if:
  16-14              (1)  the commission field office and central office
  16-15  program staff have not reviewed and approved for further processing
  16-16  by the commission all information submitted to the commission by
  16-17  the waste tire energy recovery facility owner or operator as
  16-18  required by Subsection (b) or rules adopted under this section;
  16-19              (2)  the commission determines that the facility:
  16-20                    (A)  has not provided adequate financial
  16-21  assurance;
  16-22                    (B)  does not have adequate fire protection; or
  16-23                    (C)  is causing an imminent danger to public
  16-24  health or welfare;
  16-25              (3)  the facility does not have appropriate
   17-1  authorization from the commission to perform waste tire energy
   17-2  recovery at the facility; or
   17-3              (4)  the facility is not physically capable of
   17-4  performing waste tire energy recovery.
   17-5        (e)  The commission shall adopt rules to manage payments from
   17-6  the fund to prevent depletion of the fund.  Before using any
   17-7  allocation method authorized by this subchapter and before making
   17-8  other payments from the fund, the commission shall pay
   17-9  reimbursements to processors under Section 361.477 who have
  17-10  established end-use markets and pay reimbursements under this
  17-11  section and Sections 361.4772 and 361.4773 <FOR SHREDDING OUTSIDE
  17-12  OF STATE.  Effective September 1, 1994, the commission may
  17-13  reimburse a registered waste tire processor for shredding tires
  17-14  generated in this state and shredded outside this state if the
  17-15  processor:>
  17-16              <(1)  meets all requirements that apply to a waste tire
  17-17  processor who shreds tires within this state;>
  17-18              <(2)  monthly reimburses the state for reasonable and
  17-19  necessary costs incurred by an agency of the state for such related
  17-20  to the out-of-state facility regulatory activities as are deemed
  17-21  necessary by such agency;>
  17-22              <(3)  voluntarily submits to the commission's
  17-23  enforcement authority as necessary to ensure compliance with this
  17-24  subchapter; and>
  17-25              <(4)  agrees to maintain evidence of financial
   18-1  responsibility under Section 361.479 in an amount equal to twice
   18-2  the amount that would be required of an in-state waste tire
   18-3  processor>.
   18-4        SECTION 9.  Sections 361.4772 and 361.4773, Health and Safety
   18-5  Code, are amended to read as follows:
   18-6        Sec. 361.4772.  RECYCLING FACILITY CONSTRUCTION GRANT.
   18-7  (a)  The commission by rule shall establish a program for providing
   18-8  grants for the construction of waste tire recycling facilities for
   18-9  the recycling of whole waste tires or shredded tires.
  18-10        (b)  The commission may not expend more than $2 million each
  18-11  year for grants under this section.
  18-12        (c)  A facility constructed with a grant under this section
  18-13  is not eligible for reimbursement for:
  18-14              (1)  powdered rubber;
  18-15              (2)  a tire-derived fuel;
  18-16              (3)  buffing dust;
  18-17              (4)  a retreaded or recapped tire; or
  18-18              (5)  a product that is ineligible for reimbursement
  18-19  under commission rules.
  18-20        (d)  The commission shall require a grant recipient to:
  18-21              (1)  demonstrate that not less than 15 percent and not
  18-22  more than 30 percent of the tires used for energy recovery at the
  18-23  facility were collected from scrap tire sites listed on the
  18-24  priority enforcement list if the number of whole used or scrap
  18-25  tires or shredded tire pieces contained in illegal waste tire sites
   19-1  that are identified on the priority enforcement list exceeds
   19-2  2,500,000 tires for more than 60 consecutive days; and
   19-3              (2)  submit evidence of financial responsibility in an
   19-4  amount adequate to assure proper cleanup and closure of the
   19-5  facility, if the recipient anticipates accepting an amount of whole
   19-6  waste tires or shredded tire pieces for storage that exceeds the
   19-7  facility's 30-day supply <PAYMENT FOR BALING TIRES.  Effective
   19-8  March 1, 1994, a registered waste tire processor who bales whole
   19-9  tires for energy recovery purposes is eligible for reimbursement at
  19-10  a rate of 25 cents for each tire if the processor meets the
  19-11  requirements of this subchapter that apply to a waste tire
  19-12  processor including provisions for financial assurance for such
  19-13  baled tires.  The commission shall adopt rules to determine the
  19-14  amount of financial assurance required under this section to apply
  19-15  to baled tires or whole tires stored for baling.  A processor
  19-16  seeking reimbursement under this section for baling tires may not,
  19-17  directly or indirectly, receive additional reimbursement from the
  19-18  fund for the shredding of such baled tires>.
  19-19        Sec. 361.4773.  PAYMENT FOR SHREDDED WASTE TIRE ENERGY
  19-20  RECOVERY FACILITY <RECYCLING TIRES INTO PRODUCT>.  (a)  The
  19-21  commission each month shall pay to <by rule may establish a program
  19-22  to reimburse from the fund> a waste tire energy recovery facility
  19-23  owner or operator that burns shredded tires in compliance with an
  19-24  energy recovery permit issued by the commission an amount equal to
  19-25  40 <recycler no more than 25> cents for each weighed tire the
   20-1  facility used for energy recovery during the preceding month.
   20-2        (b)  To receive payment under this section, a retrofitted
   20-3  waste tire energy recovery facility owner or operator must:
   20-4              (1)  apply to the commission for payment in a manner
   20-5  and on forms prescribed by commission rule; and
   20-6              (2)  comply with applicable rules adopted by the
   20-7  commission under this section and Section 361.4771, unless
   20-8  otherwise indicated by the energy recovery permit issued by the
   20-9  commission <waste tire recycler processes to make useful products>.
  20-10        SECTION 10.  Subchapter P, Chapter 361, Health and Safety
  20-11  Code, is amended by adding Section 361.4774 to read as follows:
  20-12        Sec. 361.4774.  LIMITED USE OF WASTE TIRE RECYCLING FUND;
  20-13  GRANTS, REIMBURSEMENT, AND ADMINISTRATIVE EXPENSES.  (a)  For
  20-14  performing duties related to the waste tire program, each fiscal
  20-15  year the comptroller may expend up to $680,000 or an amount equal
  20-16  to two percent of the waste tire recovery fund, whichever is
  20-17  greater.
  20-18        (b)  For administering the waste tire recycling program, each
  20-19  fiscal year the commission may expend not more than the lesser of
  20-20  $2.05 million or an amount equal to six percent of the amount
  20-21  appropriated from the waste tire recycling fund for the
  20-22  administration and operation of the waste tire recycling program.
  20-23        (c)  Each fiscal year, the commission may expend not more
  20-24  than:
  20-25              (1)  $1.4 million for paying accrued carryover credits
   21-1  as provided by Section 361.499;
   21-2              (2)  $15.2 million for tire shredding under Section
   21-3  361.477;
   21-4              (3)  $3.52 million for the cleanup and closure of
   21-5  priority enforcement list tire sites as provided by Sections
   21-6  361.476 and 361.477;
   21-7              (4)  $2 million for providing recycling facility
   21-8  construction grants under Section 361.4772;
   21-9              (5)  $600,000 for payments to energy recovery
  21-10  facilities under Section 361.4773 at a rate of 40 cents per weighed
  21-11  tire unit; and
  21-12              (6)  $6 million to provide grants for retrofitting
  21-13  facilities to use whole or shredded tires for fuel or for paying
  21-14  for facilities to use whole tires for fuel as provided by
  21-15  Subsections (d) and (e).
  21-16        (d)  For fiscal year 1996, the commission may expend not more
  21-17  than $4 million for:
  21-18              (1)  providing grants to waste tire energy recovery
  21-19  facilities that are not using tire-derived fuel and apply for
  21-20  assistance to cover retrofitting costs the commission determines
  21-21  are necessary to enable the facilities to use whole tires as fuel;
  21-22  and
  21-23              (2)  paying a facility eligible for a grant under
  21-24  Subdivision (1), but for which the commission has not made a grant,
  21-25  an amount of up to 80 cents per weighed tire unit.
   22-1        (e)  A person receiving payments for weighed tires under
   22-2  Subsection (d)(2) may not receive reimbursements that exceed the
   22-3  total of:
   22-4              (1)  the amount of the retrofitting costs the facility
   22-5  would have received if the person had applied for a grant under
   22-6  Subsection (d)(1); and
   22-7              (2)  the cost, as determined by the commission, of
   22-8  transporting to the facility the number of whole tires used for
   22-9  fuel until the payments under Subsection (d)(2) equal the amount of
  22-10  the retrofitting costs the facility would have received.
  22-11        (f)  For fiscal year 1996, the commission may expend not more
  22-12  than $2 million to provide grants to waste tire energy recovery
  22-13  facilities that are not using tire-derived fuel and apply for
  22-14  assistance to cover retrofitting costs the commission determines
  22-15  are necessary to enable the facilities to use shredded tires as
  22-16  fuel.
  22-17        (g)  For the period beginning September 1, 1996, and ending
  22-18  December 31, 1997, the commission may expend not more than $6
  22-19  million for payments to waste tire energy recovery facilities that
  22-20  burn whole tires at a rate of 80 cents per weighed tire unit used.
  22-21        (h)  After the third quarter of each year of the fiscal
  22-22  biennium, funds that remain unused for the purposes specified in
  22-23  Subsections (a)-(g) may be transferred for use for a purpose
  22-24  specified in Subsections (c)-(g) at the discretion of the
  22-25  commission to promote recycling and energy recovery.
   23-1        SECTION 11.  Section 361.479, Health and Safety Code, is
   23-2  amended to read as follows:
   23-3        Sec. 361.479.  EVIDENCE OF FINANCIAL RESPONSIBILITY.  (a)  A
   23-4  waste tire storage facility registered by the commission <under
   23-5  Section 361.112> or a waste tire facility that accepts shredded
   23-6  scrap tires for storage or for processing for recycling, reuse, or
   23-7  energy recovery shall submit to the commission evidence of
   23-8  financial responsibility in an amount adequate to assure proper
   23-9  cleanup and closure of the facility.
  23-10        (b)  A waste tire recycling facility owner or operator who
  23-11  anticipates accepting an amount of shredded tire pieces for storage
  23-12  that exceeds the facility's 30-day supply shall submit to the
  23-13  commission evidence of financial responsibility in an amount
  23-14  adequate to assure proper cleanup and closure of the facility.
  23-15        (c)  A facility subject to Subsection (a) or (b) shall submit
  23-16  to the commission an estimate of the total amount of shredded
  23-17  <scrap tires and> tire pieces measured by weighed tire that the
  23-18  facility will store or process, the maximum number of out-of-state
  23-19  tires the facility will store, and the estimated cost, using that
  23-20  total amount, of cleaning up and closing the facility.
  23-21        (d) <(c)>  The commission shall evaluate and may amend an
  23-22  estimate submitted under Subsection (c) <(b)> and shall determine
  23-23  for each facility the amount for which evidence of financial
  23-24  responsibility is required.
  23-25        (e) <(d)>  Evidence of financial responsibility may be in the
   24-1  form of:
   24-2              (1)  a performance bond or a letter of credit
   24-3  acceptable to the commission that is from a financial institution,
   24-4  a trust fund, or insurance for a privately owned facility; or
   24-5              (2)  a self-insurance test designed by the commission
   24-6  for a publicly owned facility.  A person who makes an initial
   24-7  request for reimbursement from the waste tire recycling fund on or
   24-8  after September 1, 1993, must provide evidence of financial
   24-9  responsibility for the full amount determined under Subsection (d)
  24-10  <(c)>.
  24-11        SECTION 12.  Section 361.480, Health and Safety Code, is
  24-12  amended to read as follows:
  24-13        Sec. 361.480.  TIRE COLLECTION FEE PROHIBITED.  A waste tire
  24-14  transporter or mobile tire shredder may not charge a fee to a
  24-15  wholesale or retail dealer for collecting for delivery to a waste
  24-16  tire facility, waste tire energy recovery facility, or waste tire
  24-17  recycling facility or for collecting and shredding used or scrap
  24-18  tires a tire dealer accepts from purchasers of tires <accepted> for
  24-19  temporary storage <by the dealer from purchasers of new tires>.
  24-20        SECTION 13.  Section 361.481, Health and Safety Code, is
  24-21  amended to read as follows:
  24-22        Sec. 361.481.  PROHIBITION ON OUT-OF-STATE TIRES; PENALTY.
  24-23  (a)  A waste tire processor may not claim payment under Section
  24-24  361.477 for shredding out-of-state tires.  A waste tire energy
  24-25  recovery facility owner or operator may not claim payment under
   25-1  Section 361.4771 or 361.4773 for burning out-of-state tires.  A
   25-2  waste tire recycler may not claim payment under Section 361.4772
   25-3  for recycling out-of-state tires.
   25-4        (b)  A waste tire generator that the commission determines
   25-5  has used a manifest and commission generator number to pass
   25-6  out-of-state tires is not eligible for the free collection and
   25-7  transportation of waste tires generated at the generator's place of
   25-8  business.  In addition to any administrative, civil, or criminal
   25-9  enforcement action, the commission shall require the generator to
  25-10  pay for:
  25-11              (1)  collection and transportation of generated tires;
  25-12  and
  25-13              (2)  shredding, burning, or recycling  of generated
  25-14  tires at the applicable rate specified in Section 361.477,
  25-15  361.4771, or 361.4772.
  25-16        (c)  A waste tire processor, waste tire energy recovery
  25-17  facility owner or operator, or waste tire recycler who the
  25-18  commission determines has knowingly accepted out-of-state tires on
  25-19  manifests using a commission generator number is subject to an
  25-20  administrative, civil, or criminal enforcement action.
  25-21        (d)  A waste tire transporter that the commission determines
  25-22  has transported out-of-state tires using a commission-approved
  25-23  manifest or transporter number is subject to an administrative,
  25-24  civil, or criminal enforcement action.
  25-25        SECTION 14.  Section 361.482, Health and Safety Code, is
   26-1  amended to read as follows:
   26-2        Sec. 361.482.  PROHIBITION ON DISPOSAL OF SHREDDED TIRES IN
   26-3  LANDFILL.  A person <waste tire processor> may not dispose of whole
   26-4  used or scrap tires that are eligible for reimbursement under this
   26-5  chapter or shredded tire pieces for which reimbursement has been
   26-6  paid under this subchapter <scrap tires> in a landfill, including a
   26-7  Type VIII-S tire monofill <if the processor has received payment
   26-8  under Section 361.477 for shredding the tires>.
   26-9        SECTION 15.  Section 361.4832, Health and Safety Code, is
  26-10  amended to read as follows:
  26-11        Sec. 361.4832.  ADMINISTRATIVE PENALTY; <AND> ORDER FOR
  26-12  CORRECTIVE ACTION; SUSPENSION OF REGISTRATION.  (a)  If a person
  26-13  violates this subchapter or a rule adopted or order issued under
  26-14  this subchapter the commission may:
  26-15              (1)  assess against the person an administrative
  26-16  penalty under Section 361.252; or
  26-17              (2)  order the person to take a corrective action.
  26-18        (b)  The commission may suspend a registration of or
  26-19  reimbursement payment to a waste tire processor, waste tire
  26-20  transporter, waste tire generator, waste tire recycling facility,
  26-21  or waste tire energy recovery facility on the initiation of an
  26-22  enforcement proceeding and while the proceeding is pending for the
  26-23  violation of this subchapter or a rule adopted or order issued
  26-24  under this subchapter.
  26-25        SECTION 16.  Section 361.485, Health and Safety Code, is
   27-1  amended to read as follows:
   27-2        Sec. 361.485.  REPORT.  (a)  Not later than February 1 of
   27-3  each odd-numbered year, the commission shall report to the governor
   27-4  and the legislature on the administration of the program
   27-5  established under this subchapter and its effectiveness in cleaning
   27-6  up existing scrap tire sites and in preventing new scrap tire
   27-7  sites.
   27-8        (b)  The commission shall include in the report the
   27-9  commission's recommendation, based on the commission's evaluation
  27-10  of the rate of inflation during the preceding two years, as to
  27-11  whether an adjustment to the fee assessed on the sale of tires or
  27-12  to the rate of reimbursement paid to a waste tire processor or
  27-13  waste tire energy recovery facility owner or operator is warranted.
  27-14        SECTION 17.  Subsection (a), Section 361.486, Health and
  27-15  Safety Code, is amended to read as follows:
  27-16        (a)  Notwithstanding Section 361.496, on <On> and after
  27-17  January 1, 1996, each applicant for a <for all> new, amended, and
  27-18  renewal processing registration and each existing <applications,
  27-19  the> processor must identify those persons who will accept the
  27-20  processor's shredded <scrap> tire pieces for recycling or reuse or
  27-21  to use the shredded scrap tires for energy recovery.  The
  27-22  commission shall reimburse a processor for only those shredded
  27-23  tires that the commission determines are committed to a legitimate
  27-24  end user.
  27-25        SECTION 18.  Subchapter P, Chapter 361, Health and Safety
   28-1  Code, is amended by adding Section 361.4865 to read as follows:
   28-2        Sec. 361.4865.  GRANT PROGRAM FOR ENERGY RECOVERY FACILITY
   28-3  RETROFITTING.  (a)  The commission by rule shall adopt a program to
   28-4  provide grants to registered waste tire energy recovery facility
   28-5  owners or operators to enable a facility to use tire shreds as
   28-6  fuel.
   28-7        (b)  The rules must identify eligible retrofitting costs and
   28-8  provide a process for determining eligible retrofitting costs.  The
   28-9  rules may include capital investment costs and installation costs
  28-10  as eligible costs of retrofitting.
  28-11        (c)  The commission may require as a condition of a grant
  28-12  that a person who receives a grant under the program must use a
  28-13  specified percentage of tires from this state for the facility's
  28-14  tire-derived fuel.
  28-15        (d)  A person who receives a grant for a facility may not
  28-16  receive a reimbursement for weighed tires used at the facility.
  28-17        SECTION 19.  Section 361.487, Health and Safety Code, is
  28-18  amended to read as follows:
  28-19        Sec. 361.487.  REIMBURSEMENT RESTRICTIONS.  (a)  A processor
  28-20  seeking reimbursement under Section 361.477 shall process and store
  28-21  the whole used or scrap tires or shredded <scrap> tire pieces in
  28-22  the state.  A waste tire energy recovery facility owner or operator
  28-23  seeking reimbursement under Section 361.4771 or 361.4773 shall
  28-24  store and burn the whole used or scrap tires or shredded tire
  28-25  pieces in the state.
   29-1        (b)  The commission shall treat whole used or scrap tires and
   29-2  shredded <scrap> tire pieces generated in Texas, removed from
   29-3  Texas, and subsequently reintroduced to Texas as out-of-state scrap
   29-4  tires for the purposes of this subchapter.
   29-5        <(c)  Scrap tires and scrap tire pieces that are shredded and
   29-6  for which a person is reimbursed may not be disposed of in a Type
   29-7  VIII-S tire monofill.>
   29-8        SECTION 20.  Section 361.492, Health and Safety Code, is
   29-9  amended to read as follows:
  29-10        Sec. 361.492.  ACCEPTANCE OF USED TIRES ON SALE OF TIRES <NEW
  29-11  TIRE WHOLESALERS AND RETAILERS>.  (a)  A wholesale or retail tire
  29-12  dealer or a person in the business of selling new or good used
  29-13  tires for use on a vehicle or selling used vehicle parts <person
  29-14  selling new tires> as described in Section 361.472(a) shall accept
  29-15  from customers, without charge, used tires of the type and in a
  29-16  quantity at least equal to the number of <new> tires the customer
  29-17  purchases.
  29-18        (b)  This section does not require a person to accept a used
  29-19  tire from a customer who purchases a new or used vehicle on which
  29-20  the tires purchased are mounted.
  29-21        SECTION 21.  Section 361.493, Health and Safety Code, is
  29-22  amended to read as follows:
  29-23        Sec. 361.493.  CONFIDENTIALITY.  Information submitted to the
  29-24  commission in accordance with Section 361.477(g) or Section
  29-25  361.486(a) or (d), and any report generated by the commission based
   30-1  on the information, is confidential and is not subject to
   30-2  disclosure under Chapter 552, Government Code <424, Acts of the
   30-3  63rd Legislature, Regular Session, 1973 (Article 6252-17a, Vernon's
   30-4  Texas Civil Statutes)>, and the commission shall protect the
   30-5  information accordingly.
   30-6        SECTION 22.  Section 361.495, Health and Safety Code, is
   30-7  amended to read as follows:
   30-8        Sec. 361.495.  FISCAL AUDITS.  The <ENSURING CAPACITY.  Not
   30-9  later than October 1 of each odd-numbered year, the> commission
  30-10  biennially shall perform a fiscal audit of each waste tire
  30-11  processor, waste tire recycling facility, and waste tire energy
  30-12  recovery facility owner or operator to ensure fiscal responsibility
  30-13  and accountability regarding reimbursements made under Sections
  30-14  361.477, 361.4771, and 361.4773.  The person audited shall bear the
  30-15  costs of the audits <determine the total shredding capacity of all
  30-16  registered waste tire processors.  If the commission determines
  30-17  that the shredding capacity is less than the previous year's
  30-18  reimbursed waste tire units, the commission may issue registrations
  30-19  to waste tire processors until the anticipated shredding capacity
  30-20  equals the previous year's reimbursed waste tire units.  If the
  30-21  commission determines that the shredding capacity exceeds the
  30-22  previous year's reimbursed waste tire units, the commission may not
  30-23  issue a registration to a new waste tire processor until the next
  30-24  capacity assessment is completed>.
  30-25        SECTION 23.  Subchapter P, Chapter 361, Health and Safety
   31-1  Code, is amended by adding Sections 361.496 and 361.497 to read as
   31-2  follows:
   31-3        Sec. 361.496.  NEW OR EXPANDED PROCESSING OPERATION.  A new
   31-4  processor, waste tire energy recovery facility, or waste tire
   31-5  recycler or a registered processor, waste tire energy recovery
   31-6  facility, or waste tire recycler that seeks to establish a new
   31-7  processing facility or expand a processing operation in the state
   31-8  must:
   31-9              (1)  certify that such processor, waste tire energy
  31-10  recovery facility, or waste tire recycler is willing to provide
  31-11  collection and transportation of waste tires from registered
  31-12  generators in rural counties of the state at the request of the
  31-13  commission during emergency periods as defined by the commission
  31-14  when such generators are not being otherwise served by registered
  31-15  processors or transporters; and
  31-16              (2)  identify and have available a certified end use in
  31-17  the application for a new or amended registration.
  31-18        Sec. 361.497.  EXPIRATION.  This subchapter expires December
  31-19  31, 1997.
  31-20        SECTION 24.  Section 2, Article 9009b, Revised Statutes, is
  31-21  amended by adding Subsection (c) to read as follows:
  31-22        (c)  A person may not sell, convey, or otherwise transfer to
  31-23  a metals recycling activity a motor vehicle or a motor vehicle that
  31-24  has been junked, flattened, dismantled, or changed so that it has
  31-25  lost its character as a motor vehicle if the motor vehicle
   32-1  includes, contains, or encloses a tire or scrap tire.  This
   32-2  subsection does not apply to the sale, conveyance, or transfer of a
   32-3  motor vehicle or a junked, flattened, dismantled, or changed motor
   32-4  vehicle from another state.
   32-5        SECTION 25.  Subchapter P, Chapter 361, Health and Safety
   32-6  Code, is amended by adding Section 361.498 to read as follows:
   32-7        Sec. 361.498.  COMMUNITY SERVICE.  Persons seeking
   32-8  reimbursement from the waste tire recycling fund shall perform
   32-9  community service on an annual basis.  Community service includes
  32-10  cooperation with local civic groups to clean up abandoned tire
  32-11  sites that are not classified as priority enforcement list sites.
  32-12  The tires collected under this section are eligible for
  32-13  reimbursement.
  32-14        SECTION 26.  Subsection (f), Section 361.112, Health and
  32-15  Safety Code, is amended to read as follows:
  32-16        (f)  A person may not store more than 500 used or scrap tires
  32-17  or dispose of any quantity of used or scrap tires unless the tires
  32-18  are shredded, split, or quartered as provided by board of health
  32-19  rule.  The department may grant an exception to this requirement if
  32-20  the department finds that circumstances warrant the exception.  The
  32-21  prohibition provided by this subsection regarding storage does not
  32-22  apply to a registered waste tire energy recovery facility or a
  32-23  waste tire energy recovery facility storage site.  The prohibition
  32-24  provided by this subsection does not apply to a person who, for
  32-25  eventual recycling, reuse, or energy recovery, temporarily stores
   33-1  scrap tires in a designated recycling collection area at a landfill
   33-2  permitted by the commission or the department or licensed by a
   33-3  county or by a political subdivision exercising the authority
   33-4  granted by Section 361.165.
   33-5        SECTION 27.  Subchapter P, Chapter 361, Health and Safety
   33-6  Code, is amended by adding Section 361.499 to read as follows:
   33-7        Sec. 361.499.  PRIORITY FOR CARRYOVER CREDIT PAYMENTS.
   33-8  Notwithstanding any other provision of this subchapter, any amounts
   33-9  paid from the waste tire recycling fund shall be used first to
  33-10  compensate waste tire processors for carryover credits that accrued
  33-11  before September 1, 1995, for waste tires shredded in excess of
  33-12  allocations.  The carryover credits shall be paid as soon as
  33-13  practicable up to the amount appropriated for that purpose.
  33-14        SECTION 28.  Subsection (l), Section 361.477, Health and
  33-15  Safety Code, is repealed.
  33-16        SECTION 29.  (a)  Except as provided by Subsection (b) of
  33-17  this section, this Act takes effect September 1, 1995.
  33-18        (b)  Section 1 of this Act takes effect immediately.
  33-19        SECTION 30.  The importance of this legislation and the
  33-20  crowded condition of the calendars in both houses create an
  33-21  emergency and an imperative public necessity that the
  33-22  constitutional rule requiring bills to be read on three several
  33-23  days in each house be suspended, and this rule is hereby suspended,
  33-24  and that this Act take effect and be in force from and after its
  33-25  passage, and it is so enacted.