Vermont Legislature SmartTranscripts:

[Amy Sheldon (Chair)]: Alright, good afternoon and welcome to the House Environment Committee. This afternoon we are going to walk through H. Zero four, which sets up a higher extended producer responsibility program with our Legislative Council.

[Michael Grady (Legislative Council)]: Good afternoon. This is Michael Grady with Legislative Council. Yesterday, you walked through an EPR program that I told you was pretty kind of simple and didn't have all the usual components of an EPR program. Well, today you're getting a full scale EPR program with one of the additional options in it that's not in every EPR program. So you're getting the full view of of the scope and scale of an EPR program with this bill. Vermont would not be the first state to adopt an EPR program for tires Connecticut did it in 2023. This is not as simple as Connecticut's. This is more based on how Vermont has done EPR and some of the components of Vermont's law laws that aren't in other states. There are other EPR programs, jurisdictions. Canada has largely gone to EPR, but some of the Canadian provinces, some of their jurisdictions, they have individual manufacturer EPR. It's like you don't get to do a stewardship organization. You have to do it if you're an individual manufacturer.

[Amy Sheldon (Chair)]: They just have a bunch of different ones.

[Unidentified Member (House Environment Committee)]: Yes. And

[Amy Sheldon (Chair)]: you mentioned to me the other day about where the genesis of this one comes from.

[Michael Grady (Legislative Council)]: Well, I I went back to look at where it came from. The original request was due to the Connecticut program. And then I went to the sponsor and I said, you know, that's not really how we do EPR here, and I wanna run it by the people that do EPR in the state, which is Jen Holiday and Matt. And they kind of built in some of the components that are traditionally in the Vermont programs. So it's not it's not it's not the same as Connecticut. And you're gonna see one of the reasons why it's not the same as Connecticut when we look at the scale of it. I've brought you a separate document, which Kat has put on your web page. Because how Vermont defines motor vehicle and how you're gonna define it in this bill is not like any other state. And so when I was putting this together the first time, and Theodexter Cooper, who was our transportation attorney, and I went through, like, all the different things that people ride and determine whether or not it should be motor vehicle or not.

[Amy Sheldon (Chair)]: And so you went with the existing definition of motor vehicle?

[Michael Grady (Legislative Council)]: No. A new one. No. No, we did not. So the there is an existing definition of motor vehicle in title 23, section four, but it excludes things like farm tractors. It excludes things like highway specialized highway equipment. It excludes things like certain types of ATVs. And so do you want this program to exclude that in working with NTA and the sponsor? It's like, no. Put these things in as a motor vehicle. But other things like like your assisted mobility device, You know? No. But that's not gonna be a motor vehicle or tracked highway equipment or specialized highway equipment for construction. That's not gonna be. But your farm tractor would be. Your lawnmower wouldn't, but your farm tractor would.

[Amy Sheldon (Chair)]: So is that the difference, like, rubber versus an inflatable? How did you draw that line?

[Michael Grady (Legislative Council)]: It's we we we went through, like, who's selling these things, how are they available. And the lawnmower is one of the more specific. You really can't get a lawnmower tire without ordering it online or through a retailer. And so it didn't really fit the model here. Now, would program, a collection site, turn it away? I don't know. But it's not gonna be a requirement for a retailer or a manufacturer of a lawnmower tire to be part of this program.

[Amy Sheldon (Chair)]: Expect there'll be more on this later, but we can Yes. Dive in.

[Michael Grady (Legislative Council)]: Part of the reason I created the document so I didn't have to read to you the 10 different definitions of the different things. You just see what they were on paper. So what does this bill do? It creates a new chapter entitled 10, chapter one sixty nine for the collection and recycling of waste motor vehicle tires. The first kind of substantive definition is brand. It's it's very key throughout this bill. It's the name, symbol, word, or traceable mark that identifies the motor vehicle tire and attributes the motor vehicle tire to the owner or licensee of the brand as the manufacturer. And that's important because the manufacturer is the one that's held to creation or participation in this program. Page two, you get what is the collection rate. The collection rate is going to be required under the stewardship plan for this program, and they need to meet certain collection rates. And if they don't meet certain collection rates, they can be penalized by ANR. So the percent the collection rate here is the percentage of the number of waste tires that each manufacturer or stewardship organization collects by an established date. Then they divide that total number that are collected during the calendar year by the average number of motor vehicle tires that were estimated to have been sold in the state in the previous three calendar years. So if you had a bad year, you had a COVID year, you weren't selling anything, you still average out the previous three calendar years and divide that by what was collected, and that's your collection rate. The covered entity is any person who brings or delivers a waste tire to a collection facility. It says any number, but later on, you're going to see that there's opportunity for a collection site to limit the number for any particular visit. A legacy waste tire pile is an accumulation of 50 or more waste tires, whether or not they're lying upon the ground or or each other, except it doesn't include those that are on farms that are used for silage control and silage bunkers provided that those are are and they're just supposed to be they're supposed to be cut in order to prevent holding of water and the breeding of mosquitoes. So generally farmers do that because it's beneficial to them to do that. It's also not if you are storing tires within a building, like maybe it's your job or your business to break down these waste tires and turn them into playground material, etc. That's to not apply. This isn't a definition that applies to you. Manufacturer. This is the traditional definition of manufacturer for an EPR program. It starts out with the actual person, entity in the state that is producing the product in the state for sale in the state. So that's sub A, page three. Sub B on page three, line three, that's what they're selling in the state under their own brand, a motor vehicle tire produced by another supplier. So maybe some supplier in Italy is producing tires for some brand in Vermont, and then that brand is sold in the state. It it's also when the person entity owns a brand that the person licenses or licensed to another person for use on a motor vehicle tire sold in the state. So all they did is they licensed their brand. They still can be considered manufacturer under the program, Or they're importing into The US for sale in the state attire manufactured by persons who don't have a US presence. So the importer that's bringing it in, that's when the first jurisdictional contacts occur. They are considered a manufacturer. And then there's the person who is making a motor vehicle tire for sale in the state without a brand. And then last is an entity that assumes the responsibilities for any of the foregoing definitions of manufacturers, provided that the Secretary may enforce the requirements against individual manufacturers if a person who assumes a manufacturer's responsibilities fails to comply with the requirements. So that last subdivision F, that is basically contemplating the creation of a stewardship organization to assume the responsibilities of all of those other types of manufacturers. And you'll see in a minute what those stewardship organizations need to do to qualify. So I'm going to skip over motorized electric power powered bicycle or tricycle because I don't actually think you need this when you look at some of the other definitions. I think it's already included in some of those other definitions. And then you see what a motor vehicle is and the scope of this program because this program applies to waste motor vehicle tires. So you have to be a motor vehicle tire before this applies to you. So what's a motor vehicle under this program? Well, the first line there, page four, line one and two, that's that's the general underlying definition of what's a motor vehicle in in motor vehicle law in Vermont. All vehicles operate in a state that are propelled or drawn by power other than muscular power. So it's not your horse carriage, right? Because that's propelled by muscular power. But it's everything else except you're going to go through and specifically include or exclude. So that's what this document is, if any. I have a couple of paper copies if anyone wants some. So I'm not going to read out the definitions, but I am going to read out what are excluded or included. So ATVs are, motorcycles are, farm tractors and farm trailers are, and motor driven cycles, which is basically kind of a combustion engine bicycle, they are. What are not are electric personal assistance mobility devices, an electric bicycle, a motor assisted bicycle, provided that this is where it gets really there's you can be a motor driven cycle, but there's also a motor assisted bicycle. They're actually in the same definition, but they are two different things. And so that's why you see them broken out. One is going to be considered a motor vehicle. One is not. Then there's the adaptive electric cycle. A lawnmower is not going to be a motor vehicle. And then the spec

[Amy Sheldon (Chair)]: Adaptive electric cycle? Pardon? What is an adaptive electric cycle? Like a

[Unidentified Member (House Environment Committee)]: wheelchair?

[Amy Sheldon (Chair)]: It

[Michael Grady (Legislative Council)]: is an electric bicycle or electric cargo bicycle, but that's it is, modified to meet the physical needs or the abilities of the operator or passenger. So it's basically something necessary for their use of it.

[Amy Sheldon (Chair)]: I have a question though. The main problem we're trying to solve is car tires. So why go test these lengths?

[Michael Grady (Legislative Council)]: Because in the different ways that motor vehicles are regulated, some of these things are considered motor vehicles. Like if you take some of these things out onto the streets or the highways, they're regulated as motor vehicles. But you don't want to deal with them as motor vehicles here. To avoid the confusion or the ambiguity of something that's treated as a motor vehicle under operating law is not being treated as one here. So moving down, there's a definition of a retailer. Retailers will be subject to some requirements, but they will also be offered the opportunity to be a collection site, and can automatically opt in if they would like. Sell or sale means any transfer to a person for consideration or for lease. It does not include the resale of tires, so used tires are not subject to this program.

[Amy Sheldon (Chair)]: Weird. What?

[Michael Grady (Legislative Council)]: Because it's the requirements on the manufacturer, and we want just went through the definition, can include a distributor. So you wouldn't put the requirement for a stewardship organization on you if you wanted to sell your used motor tires, motor vehicle tires. But you can take your used motor vehicle tire back to a collection site if you would like.

[Unidentified Member (House Environment Committee)]: I would.

[Michael Grady (Legislative Council)]: But you don't want to have to come up with the stewardship plan right, in order to have a used tire or to distribute it. So a tire, that's the general definition to continue a solid or pneumatic rubber covering encircling the wheel of a motor vehicle. The waste tire is the motor vehicle tire that has been removed from a motor vehicle and is no longer suitable for its original purpose because of wear, tear, damage, defect, or other reason. And then you get to waste tire stewardship organizations, one or more manufacturers acting together on behalf of each other to design, submit, and implement administrative waste fire stewardship. So this bill was introduced last year. Some of the dates are going to likely need adjustment. Some of them are already passed. And so just to note that, and I will point out dates as we go through page six, line four and five, this creates the program that uses the definitions that we just reviewed. So beginning on 01/01/2027, you get the sale prohibition. This is how most EPR programs work. It's the first thing in most EPR programs. It's the book. It's what makes a manufacturer want to participate in the EPR program because otherwise they cannot sell their product in the state. So beginning 01/01/2027, manufacturer of a motor vehicle tire shall not sell, offer for sale, or deliver to a retailer for subsequent sale of motor vehicle tire unless all of the following have been met. Alright. They have to be implementing an approved plan. They have or they have to be participating in a stewardship organization that's implementing an approved plan. They also have to have paid the administrative fee to the agency. Remember we were talking about that fee yesterday about how A and R didn't know what it was gonna be for the bottle bill and that they were gonna seek reimbursement. Well, here, we just have a flat fee. It's $15,000 annually, for each stewardship organization or each manufacturer operating under its own plan. Now, ANR likes one. They don't like to have multiple plans. They like to have one plan. But there's opportunity in this program for multiple plans. Sometimes you say no opportunity for multiple plans, but this program has opportunity for multiple plans. They also have to have all the names, their names and their brands on a website that A and R covers, and later on you will see they have to have their own website that lists all their covered brands. So the public can go, a retailer can go to a resource and see what's covered, what's legal, and what can be sold. Now there are two exceptions to to this sale prohibition. There's if you're selling or distributing or importing less than $5,000 worth of motor vehicle tires, then you you are not subject to this small manufacturer exception. And then there's a new manufacturer exception. You are given time up to ninety days to sign up for the stewardship organization or to submit your own plan. So there's a bit of a lag for the new, and then there's a total exception for the small. And then on page seven, line one, this is how ANR is going to register the stewardship organization. They will have to register annually, and they will have to begin, according to this bill, on or for 07/01/2026. I think that's gonna be almost impossible. So you likely will have to look at that. When they register, they have to show that they are meeting certain requirements. Basically, that they will be able to represent and comply with the requirements of the chapter for all of its members. They submit a registration form, page seven, line 11. That registration form is provided by the agency. For a registered one that's going to register independently without the whole organization, they have to provide the list of brands and a contact information for ANR to contact them if there are issues. If it's for a waste tire stewardship organization, they have the list of manufacturers participating. They have that contact information. And then they have to have a description of how they are going to allow other manufacturers to join the program. One of the provisions in the plan is that a plan cannot provide unreasonable barriers to participation in the plan. You don't want them to like sometimes these manufacturers don't get along with each other. I mean, it's kind of the nature of business sometimes that they are competitive with each other and don't wanna work together. And that has happened in the past. But you say to them, you can't prevent somebody that wants to participate in your plan from participating in your plan just because you don't like them. So no unreasonable burdens. And then there has to be a name and address and contact information for a person that wants to join the stewardship organization to contact. On page eight, line 15, you get the stewardship organization's requirements. They have to qualify to be a waste storage, waste tire stewardship organization. They have to commit to assume the responsibilities and liabilities of all of the manufacturers that are participating in their organization. As we just discussed page nine, line one and two, they can't create unreasonable barriers for participation by other manufacturers. They've got to maintain that website that lists all manufacturers and brands that are covered by their stewardship organization. And they have to register with the secretary as we just walked through under 7,605. Then you get to the plan. Yay, this is like the real stewardship organization plan. It is like everything that you need in it is in this plan. Unlike yesterday, where we did not know what everything needed to be in the plan. This plan has it all. You have to have the list of manufacturers and brands, and you have to have contact information for them, and you have to have all of the brands of motor vehicle tires covered by the plan. Have to, on page 10, provide for free collection of waste tires. Each stewardship plan shall provide for the collection of waste tires from a covered entity. And the covered entity remembers any person who's bringing any amount of waste tires, have to provide that at no cost to the covered entities. And they cannot refuse collection of a waste tire that's based on a brand or manufacturer that's not in their plan. So they can't say, oh Bridgestone, they're not part of our plan. We don't collect them. No, they have to collect that. They have to provide the convenient collection location. Yesterday you were looking at what's one of the main points of the plan yesterday. Here it's two collection points per county. They have to provide for retailers to be collection points. So if a retailer wants, they can participate as a collection. They also have to allow municipalities to opt in or solid waste management districts to opt in. Remember, these programs like to use existing infrastructure. Where is the existing infrastructure for collection of tires right now? It's at your tire dealers. It's at your solid waste dumps and solid waste transfer facilities. And so why prevent them from being part of the program? Let them be part of the program. And then you see page 10, line 13 through 15, provide at a minimum in each county of the state not fewer than two collection facilities that provide for the collection of waste tires throughout the year. All collection facilities have to be specified in the plan. They have to provide for acceptance from a covered entity of up to 10 waste tires per visit, but a collection facility may agree to accept more than 12 waste tires. So remember, the covered entity is any person bringing any number. Well, the collection facility doesn't have to accept any number. They can, but they don't have to. Maybe if you show up at your retailer and it's a small tire store, they're like, I can't take your 50 tires for you. I don't have space for your 50 tires. I'll take 12, but I'm not going to take 50. But then you might go to the solid waste management district and they will be like, yeah, we'll take all of your 50. So opportunity, but also recognizing realities of the spatial constraints for some of the collection facilities.

[Amy Sheldon (Chair)]: Representative Austin. So if they

[Sarah "Sarita" Austin (Clerk)]: have 50 tires and they go to someplace and they can only drop off 20, do they drive around looking for another?

[Michael Grady (Legislative Council)]: They could. They could.

[Sarah "Sarita" Austin (Clerk)]: I mean, does that place that case the tires have to advertise we only take 20 tires?

[Michael Grady (Legislative Council)]: There's no mandate here about advertising the limits for each facility collection facility.

[Amy Sheldon (Chair)]: This is reminding me of just sort of a rewind. The problem we're trying to solve is is these large kind of tire dumps that are illegal. They're more in different parts of the state. How did so people get paid to turn these tires in when they go to the facility.

[Michael Grady (Legislative Council)]: Maybe. So later on, you'll see that each plan is supposed to have a way for dealing with legacy tire pile. And one of the ways that they can do it is they could do it through bounties, but they could do it through collection events. They could they could do it through other other methods.

[Amy Sheldon (Chair)]: Just me. I decided to put my own new tires on, and I have four tires. I'm just going out of the goodness of my heart to bring it to the PRO, or do I get $4 a tire back?

[Michael Grady (Legislative Council)]: You pay. You you don't get $4.

[Amy Sheldon (Chair)]: I guess I'm trying to get at what is how is this gonna solve our illegal dumping problem? What's the incentive?

[Michael Grady (Legislative Council)]: Because there's gonna be free collection sites and and hopefully multiple free collection sites within most counties, especially if the retailers take on a role of being a collection facility. But you're not going to get paid. You just won't have to pay. I mean, I I the last time I went to the solid waste transfer station, I think it was $6 a tire, but it's probably more now.

[Michael "Mike" Tagliavia (Member)]: Somewhere between 4 and 7 depending on the size of the tire.

[Amy Sheldon (Chair)]: Just got new tires. I didn't even notice. Wanna be representative Tagliavia.

[Michael "Mike" Tagliavia (Member)]: You mentioned collection rates and some sort of a penalty if they don't meet collection rates. We have tire resellers, people who ship out of state and out of the country, tires that are still reusable. How do you justify penalizing one of these PROs for not meeting their collection rates if these tires are either being reused or recycled somewhere else?

[Michael Grady (Legislative Council)]: That's that that'll be part of their collection rate. That that that will be that will be designated as collected, and then they have to identify later on how they're gonna how they were disposed of the disposition of them. And this does not. This doesn't really preclude disposition. You can you can sell them to burn.

[Michael "Mike" Tagliavia (Member)]: You can't burn them. Saying that only if you're a PRO and you were doing this, then you would be able to apply it to your collection. Yeah. So there are other guys who are right now taking tires. They don't have a collection. They're not a PRO.

[Michael Grady (Legislative Council)]: Right. They won't be a manufacturer, so they won't be subject to this program. If they want to continue doing that, if they even want to say to the PRO, the SO, hey. We'll we'll collect for you. We'll be one of your collectors, and we'll take it wherever we take it, sell it to wherever.

[Michael "Mike" Tagliavia (Member)]: It almost sounds like the PRO would need to collaborate somehow with some of these guys who are shipping them. Sure. Because they would miss their collection rates, for sure.

[Michael Grady (Legislative Council)]: And that's how some of these programs work. You know? Like trying to think of a good one. Well, the bottle bill is a good one. There's a market there for some of those collected materials. And so people have entered that market to collect and resell on the market. And so how they become part of that PRO is like, that's part of how that PRO is going to be rolled out. It's like, how are they integrated or not into the program? And how would people that are already collecting be integrated into the program? You know, I know what you're talking about. It's the guys with the big 350s and the cages, you know, that drive around. And they take them,

[Michael "Mike" Tagliavia (Member)]: and they load them into shipping containers, and they send them to third world countries to buy them because they run them till the cord pops out. Sorry, but it's a fact.

[Representative Chittenden (first name unknown)]: That's a need in the market.

[Michael Grady (Legislative Council)]: But that's still a possibility. There's no prohibition of that here. Remember, there's no this doesn't apply to used tires. Doesn't apply to used tires.

[Amy Sheldon (Chair)]: So

[Michael Grady (Legislative Council)]: I think you are at the bottom of page 10, line 19, the legacy waste tire pile response requirement. So each plan for an SO or an independent manufacturer needs to propose a method of collecting tires from or eliminating legacy waste tire piles in the state. Those methods can include financial payments to property owners just like, hey, we will just collect all of those from you and we'll pay pay you money to collect them from your property. It includes bounties on collection or other incentives. They could get creative with how they would address legacy waste tire piles.

[Amy Sheldon (Chair)]: Having worked

[Representative Chittenden (first name unknown)]: for a solid waste district and managing programs to collect waste tires, I appreciate this section. I'm curious about the word legacy. I noticed in the definition that it doesn't actually have a like, I think of legacy and I think of only things that were there as of a certain date. And and I noticed that was not in the definition. And so I'm just curious. It seems like if in the future, especially if there's not a well, there's a financial incentive now that there's no longer a cost to dispose of your tires in this system. There's still not an incentive to bring new so if you're far away, you can still imagine people unloading tires into the future. And so it sounds like this is created such that a pile that started after this was passed and after the PRO was set up could still be considered a legacy waste tire pile, or was that not the intention?

[Michael Grady (Legislative Council)]: I think it's the intention that wherever waste tires are and wherever they're created before or after the effective date of this, that this program could be used to do that. You know, if I'm a manufacturer, so trying to reach my collection rate, that that might be low hanging fruit. I think the legacy term is it's it's a legacy. It it really is. It's it's from the prior use of it now. The general assembly has tried to address tire piles in the past, and that's the term that was just given to it. And and I think you don't need to use that if you don't want to.

[Representative Chittenden (first name unknown)]: Just say waste tire pile.

[Michael Grady (Legislative Council)]: Just say waste tire.

[Amy Sheldon (Chair)]: Thanks.

[Michael Grady (Legislative Council)]: So so page 11 is the collection rate. So each plan includes a collection rate performance goal. In the first year of the plan, it's a goal of 50% of the participating manufacturers' motor vehicles, tires sold by unit in the state in the previous calendar year. So they're looking for a 50% goal for each participating manufacturer in the previous from the previous calendar year. We're gonna get to how that's gonna be implemented and the potential penalty that can be assessed if they don't meet that collection date. We also have to report the the the description of the method that will be used to manage the waste tires. They will be directed to recycle or reuse at least 50 of collected waste tires. So the people that are shipping out in the shipping containers, that's gonna be for reuse, provided that they have to that the use of waste tires as tire dry fuel shall not be considered reuse or recycling. So you can still use it for fuel, but you have to have 50% for reuse or recycling before fuel.

[Amy Sheldon (Chair)]: Where did the 50% come from?

[Michael Grady (Legislative Council)]: I don't I don't know. That might have been something pulled from Connecticut. Yeah. I I don't see it in Connecticut. But

[Amy Sheldon (Chair)]: Sorry. I was just curious if it it'll be.

[Michael Grady (Legislative Council)]: Should I move on?

[Amy Sheldon (Chair)]: Representative Chittenden.

[Representative Chittenden (first name unknown)]: Just on that still on that 50% number, I guess I'm just curious how that interplays with legacy or non legacy waste tire piles. And I would imagine that in the first, once those waste tire piles were effectively getting managed, I would think that would for a number of years bump up that rate a lot. And then after those tire piles are largely dealt with around the state, it would drop. And I guess I'm just curious if you saw in your research with other states, any way to address that? Or could that just be for non waste tire pile?

[Michael Grady (Legislative Council)]: No. I haven't seen that, but I also think that that's one of the reasons that Canada went to the individual. Instead of them getting credit for collecting other brands, they have to collect their own brand. And so you don't have that issue with you just are continually year to year required to hit your collection rates for what you sold and what you collected.

[Representative Chittenden (first name unknown)]: Is it higher than in Canada? Is there

[Michael Grady (Legislative Council)]: I I don't know the collection rates there off the top of my head. I was looking at I was looking at British Columbia earlier.

[Representative Chittenden (first name unknown)]: We can talk about it later.

[Michael Grady (Legislative Council)]: So one of the jurisdictions that has been looking at this is Virginia, and they haven't gone to EPR. They did a tire fee instead, which

[Amy Sheldon (Chair)]: Is that what we

[Unidentified Member (House Environment Committee)]: have? No.

[Representative Chittenden (first name unknown)]: Nothing in statute?

[Michael Grady (Legislative Council)]: So Ontario, 85% of tires collected must be processed, retreated, or reused. That's not the same. So I will have to I can look into the collection rates in the provinces. Every plan has to have education and outreach provisions, and they have to notify the public that there is free collection program for waste tires, the collections points, and how they can access the collection programs. On page 12, they have to provide the opportunity of retailers, manufacturers, and solid waste managed facilities to participate, and their education materials need to reflect that. Page 12, line four, they have to comply with the appropriate environmental standards. Page 12, line eight, they have to have a reimbursement provision in it. And this is the kind of one of the unusual components of Vermont's EPR programs. And it's not in every one of the Vermont's EPR programs. It's usually in an EPR program where there might be some conflict between the manufacturers that don't necessarily want to work together, you give them, and unfortunately, we're going to go through it because it's really technical and a little bit numbing. But there's a private right to request reimbursement, and then there's a private right of action when a manufacturer doesn't provide reimbursement. And the first time you did that was in the EHR program for batteries. They loved it because they didn't get along. But now that they're getting along, they came back and asked for some changes to that program last year or the year before, you might remember, and to streamline it, to make it easier for them because they were getting along. This starts out with, like, you're not getting along, and we'll we'll get to that in a minute. So on page 12, line 11, there's an implementation subsection that, they have to say how they're gonna implement this. They have to say how they're going to work with the collection facilities. They're going to say how they're going to pay for the collection facilities cost. They have to not impose transportation or recycling costs on retailers, municipalities, certified solid waste management facility. Just because the retailer is acting as a collection site doesn't mean that the SO can then charge them fuel costs for the collection from the retailers. Like, none of those transportation costs can be transferred onto these collection sites. They will provide the collection sites products or equipment for setting up collection point and for providing for the pickup of the collected waste tires, including arranging for the management of those waste tires. And the term of the tire stewardship plan is up to five years and are considered at less, but I would doubt that they would. Five years is a generally acceptable term for these programs. As with yesterday, with the bottle bill, there's an annual report and a plan audit. This audit is only a five year audit on the operation of the plan. You don't get the the annual fiscal audit that the bottle bill had. But you have an annual report that's on page 13, line eight, on or before 03/01/2028. They they probably won't have enough information by then to give you what is required in this report. They have to report to ANR the following estimated total number of vehicle tires sold in the state in previous calendar year, the number of waste tires collected by the manufacturer or SO in the prior calendar year, the collection rate achieved, the locations for all collection points, Examples of the educational material manner in which the waste tires were managed, including the number of waste tires collected from waste tire piles, the number that were recycled or reused, and the number disposed of as tire drive fuel or otherwise incinerated. And then any material change to the plan, and then the cost of implementation of the plan, including the cost of collection, recycling, education, outreach. Then you see the audit. 01/01/2032, and every five years, they hire an independent third party to audit the effectiveness of the plan and the cost effectiveness of the plan and to compare to waste higher stewardship plans at other jurisdictions, and then make recommendations to you on an ANR on ways to increase efficacy and cost effectiveness.

[Amy Sheldon (Chair)]: That's the audit. So hold on. We talked with Matt Chapin today about the different reports and audits in the bottle bill. And he said pretty much every one of our EPRs requires an annual, just regular audit. I'm thinking that that would be something ANR would want to have in this, and I'm curious why you chose not to do just a regular annual audit.

[Michael Grady (Legislative Council)]: I disagree that all the EPR programs require an annual audit. They all require audits usually every five years. They all require an annual report.

[Amy Sheldon (Chair)]: You get a reality check on that. You're two very trustworthy witnesses. Think he's be saying the truth. I

[Michael Grady (Legislative Council)]: I there's there's also and and senator Brock always brings it up. He's like, what's what he is identified as an audit in here. He's like, that's not an audit. That's a review of the program. That's not an audit.

[Amy Sheldon (Chair)]: Well, Matt distinguished it. Like, every nonprofit has an annual audit that an auditor does. That was the equivalent that he was stating. I'm sorry, I think, making. Maybe I got it wrong. Did other people hear that? What else?

[Michael Grady (Legislative Council)]: Was listening. I heard what he said. I just don't think that everyone has that same fiscal audit annually that the bottle bill did yesterday. Do they all do an audit? Probably. If you're dealing with the kind of money that's involved in running these, you probably want to do an audit to make sure there isn't mismanagement. But I don't think it's mandatory in all of the programs.

[Unidentified Member (House Environment Committee)]: All

[Amy Sheldon (Chair)]: right. So we're going to need a little guidance on what's maybe since we're having so many of these now, like, is our minimum responsible need for audits and reports back?

[Michael Grady (Legislative Council)]: Understood. On page 15, line one through 16, this is just the how you deal with new manufacturers entering the market after 01/01/2027. They basically get they have to notify ANR, and then they're given ninety days to come up with their own plan or join an existing SO. And then you get the small manufacturer exemption, Those who are selling, offering for sale, distributing, importing into the state, a total retail value of less than 5,000 is exempt. Then you get the agency's responsibilities, page 15, line 18. They review and approve the stewardship plans. And they have to find that the plan complies with the requirements of 7607, which are what needs to go into a plan. They need to provide adequate notice to the public of collection opportunities.

[Amy Sheldon (Chair)]: You said seven six zero seven b? There's no b that I'm seeing there. I've seen the wrong oh, down there. I was looking at the other seven six zero seven. Sorry. You're on line one, page 16.

[Michael Grady (Legislative Council)]: Maybe. So seven six zero seven b is on page nine, line 14.

[Amy Sheldon (Chair)]: I was looking at the wrong Okay. Looking at page 15.

[Michael Grady (Legislative Council)]: Okay. Page 16, line seven, Secretary has to assess the performance of each plan, including whether they achieve the collection rate. If they fail to achieve the collection rate, the secretary imposes the penalty under seventy six twelve, which we'll get to an amendment in a minute. The secretary has to approve any amendment and may require the manufacturer SO to amend their plan, and they have to put those plan amendments out to the public. They have to get public input for the approval of an amendment for a plan subject to the default requirements in seventy seven fourteen, which you saw yesterday, which may include a public meeting. They have to approve the registration of the stewardship organizations on page 17, lines one through six. And they have to act in a supervisory capacity over all of the manufacturers of stewardship organizations, including reviewing their organizations and whether or not they are acting in a reasonable, necessary, and way that's limited to carry out the requirements of a policy established by the chapter. And that's to get to the anti competitive conduct. Remember that there's effectively collusion, and you are exempting them. It's not state provision. So ANR has to make sure that that doesn't happen. ANR needs to post all the approved plans to the internet on their website, list of manufacturers and brands, but they can link to the the manufacturer SO's website if they want to. Page 18 is the retailer obligation. Sales prohibited by a retailer of a motor vehicle tire, plus the producer is implementing an approved stewardship plan, is a member of a stewardship organization that's implementing an approved plan, or is exempt from participation. There are exceptions. There are two of them. One is the retailer took possession prior to 01/01/2027. They get to sell their inventory. The other is they took possession of the manufacturer's tire while the manufacturer was compliant, but then they, for some reason, had their plan revoked or they no longer were compliant. The manufacturer still gets to sell that inventory because they took it in good faith, understanding that the manufacturer was compliant. The manufacturer needs to provide A and R, and the, you know, the manufacturer needs to provide the retailer with educational materials describing collection opportunities, and then the educational materials needed to be provided by the retailer to covered entities, basically consumers. And then page 19, here is the penalties for failure to achieve the collection goal. It says the secretary shall assess a penalty against a manufacturer that fails to achieve the collection rate performance goal. The amount of the penalty is dependent on how much they collected. If the manufacturer achieved less than 50% of the collection rate performance goal, they pay a penalty of a dollar per tire difference between the collection rate performance goal and the actual number of waste tires collected in the calendar year. If they have more 50% or greater of the collection rate performance goal, they pay 50¢ per tire difference between the collection rate performance for the exact number of those tires collected. That's a pretty good incentive.

[Amy Sheldon (Chair)]: Understand.

[Michael Grady (Legislative Council)]: And then those penalties that are collected, they are put into the solid waste management assistance account for use by ANR to do tire collection, which is referenced on page 19, line nineteen, sixty six eighteen b 10. That's the authority for ANR to use the solid waste management assistance count for tire collection. Page 20, you get to the reimbursement and cost recovery. It's scintillating. Again, this is something that's pretty unique to Vermont.

[Amy Sheldon (Chair)]: Representative, which has a question?

[Unidentified Member (House Environment Committee)]: Michael, it seems like the overriding purpose of the bill is to provide a convenient, free place for people to bring their used tires, including all these legacy tiles that we have around. We wanna clean up our environment. And so I don't if that's our goal, I don't understand why we're so focused on collection rates. It seems like we're going to be doing this bill without achieving that goal. So I'm wondering what other motives there might be that would ask us to do all this verification.

[Michael Grady (Legislative Council)]: Well, I think you'd have to any EPR program has two ways to incent manufacturer to comply. And and one is the sale prohibition. You don't get to sell unless you are implementing an approved plan. But the other is you actually have to try to implement your approved plan. And you just can't be superficially meeting the requirements and then not spending the time, resources, or contractual power, hours, employee hours, to actually meet the goals. And so the collection rate is that book to make sure that they're actually

[Unidentified Member (House Environment Committee)]: That's our quantifiable measure of further their accepting tires back as we expect them to. You.

[Amy Sheldon (Chair)]: I will be curious what we learn about other programs' expected rates. I mean, it's different like a beer bottle rate of return versus a tire, which depending on the type of tire and how you drive, it's a huge time lag. And there's, as kind of pointed out by other questions, aren't there other places a tire that's no longer on its vehicle could be used? It's interesting. I think it'll be helpful to learn what they're doing in Canada.

[Michael Grady (Legislative Council)]: Well, Connecticut's the one that has the actual program. Virginia went to the

[Amy Sheldon (Chair)]: No. But didn't you say Canada?

[Michael Grady (Legislative Council)]: Oh, Canada.

[Amy Sheldon (Chair)]: Canada is what I said. Oh, I

[Michael Grady (Legislative Council)]: thought you said Virginia.

[Unidentified Member (House Environment Committee)]: I'm sorry.

[Michael Grady (Legislative Council)]: All right. So let's talk about reimbursement and cost recovery. So this is something that's triggered when a manufacturer stewardship organization is implementing a stewardship plan, and they collect a brand of tire from someone that's not participating in their stewardship organization or isn't participating in an organization at all. So they have the ability that they can, on page 20, are entitled, page 20, line six through nine, entitled to reimbursement from the manufacturer of that collected waste hire or the stewardship organization representing that manufacturer of the reimbursement cost per tire incurred and collected. And so if you but you can only request reimbursement if you've already met your collection rate. And that's page 20, lines 10 through 13. Reimbursement may be requested by collecting only after the manufacturer stewardship organization has achieved the collection rate performance goal approved by the secretary. They don't just get to collect only the other brands and then get reimbursement for that. They have to meet a standard and then try to get reimbursement of costs related to collecting the other brands. So the reimbursable costs that they can they can seek are things like cost of collection, transport, recycling, other methods of disposition, reasonable educational, promotional, or administrative costs. And then there's the reimbursement process. So I drafted this, so and I hate it, but it it kind of works. So the manufacturer that incurs a reasonable cost submits a request to the manufacturer of the collected tire or the stewardship organization in which the collected tire is covered by. The manufacturer of the collected tire that receives the request for reimbursement has thirty days to request an independent audit of the of the request for reimbursement. And then the independent audit does a verification of the reasonableness of that reimbursement request, including the cost sought. And if the independent audit confirms that the reimbursement request was reasonable, that manufacturer that requested the audit has to pay the cost of the audit and the amount of the reimbursement. But if the auditor finds that the requesting manufacturer's request was not reasonable, then that manufacturer has to pay the cost of the audit, and the entity with the collected tire is free to pay the cost. It's not it's not required to pay the cost. And so

[Amy Sheldon (Chair)]: They don't have to do any of that.

[Michael Grady (Legislative Council)]: They could They don't have to do any of that. But if they do that and there's still disputes about reimbursement, on page 22, there's a private right of action. So first, there's a private right of action against the manufacturer with no stewardship plan. They're just rogue, or they're old and they're gone, but they still exist, but they weren't aren't selling in Vermont anymore. The manufacturer that collected the tire has the ability to bring a civil action against that rogue manufacturer, the no longer present manufacturer, if they incur more than $1,000 in actual reimbursable cost and the manufacturer from whom damages are sought can be identified by markings on the tire or other information available. And that manufacturer is not operating in an approved plan. But then they can bring an action against a manufacturer who is in an approved plan. They have to go through the reimbursement process first. Can't go right to a private rate of action. Have to go through reimbursement. They did not receive reimbursement ninety days after the reimbursement request. If no independent audit is requested and they haven't gotten reimbursement, they can sue. If there is an audit requested at sixty days after the audit is requested and the audit confirms the validity of the reimbursement request, and there's still no reimbursement. Now, you cannot sue an individual manufacturer that's participating in a stewardship organization. That's one of the benefits of being in the stewardship organization. You don't get sued as the individual. The stewardship organization gets sued. The only way you'd sue the individual manufacturer is if they're implementing their own plan. To page 24, ANR wants nothing to do with the reimbursement and nothing to do with the private right of action. And they specifically says so in both the reimbursement section and the private right at the back.

[Amy Sheldon (Chair)]: I

[Sarah "Sarita" Austin (Clerk)]: can't imagine why.

[Michael Grady (Legislative Council)]: They want no part of it. And so it says that. And then there's a definition of damages that can be collected under the private right of action. It's the actual reimbursable cost of plaintiff manufacturers. SO incurs in collecting, handling, recycling, or properly disposing of waste tires recently identified as having originated from another manufacturer or SO. Then you get to the general provisions. Some of these are similar to what you looked at in the bottom bill yesterday. The first, though, is not. So when the agency is collecting information from the SOs, from the manufacturers, they will make that information public. And so the public will be able to see amount collected, collection rates, what they're doing for education, how they're disposing, where the collection facilities are. But any information that's a trade secret under the Uniform Trade Secret Law does not need to be disclosed to the public. And so the manufacturers will have the ability to assert that certain things are trade secrets under that Uniform Trade Secret Law or under Vermont's Trade Secret Confidential Business Exemption provision. The secretary can still publish information in an aggregate form as long as they're not disclosing confidential information. And they can also ask that retailer manufacturers or distributors provide a report that amiss any trade secret or confidential business information so that they can publish the report in whole for the public. With all of that said, the total number of waste tires collected under an approved plan is not confidential business information and is subject to inspection by the public. Page 25, you get that antitrust language that's pretty uniform across CTR programs. They get to work together to comply with the requirements of the chapter, and it won't be considered anti competitive conduct or unfair trade practices or straight on trade, etcetera, except that page 26 lines 12 through 16, they can't use that ability to set prices or set a restricted geographic area in which tires hold. Page 26, line 17, this is the fee that the manufacturer or stewardship organization pays ANR $15,000 annually. That fee goes into the environmental permit fund. The environmental permit fund is used by ANR to pay for the cost of program, usually staff. Page 27.

[Amy Sheldon (Chair)]: Can we just talk about where that number comes from? And, like, if we just have one stewardship organization? So

[Michael Grady (Legislative Council)]: that was based from my recollection on Matt's recommendation, how much time it's how much time a a single FTE would have to spend on reviewing these collection plans. If it's only one plan, which they hope, $15,000 for review of a plan over the course of a year is what I remember, I don't want to speak for the agency, but I don't want to speak for the agency. You need to talk to them about why they 15,000 is inappropriate. I remember it's also almost three years old at this point from when it was first drafted. So you could probably adjust.

[Amy Sheldon (Chair)]: Okay. Thanks. Do you have a question? Yes. I have a question. Okay.

[Michael Grady (Legislative Council)]: Moving on. They have rulemaking authority, page 27, lines three through three through five. And now you're done with the program, and now you're just doing transitional and conforming amendments. Section two is ANR's enforcement authority. And so you're adding their ability to enforce this program, new chapter on page 27, line seventeen and eight through 18. You need to change that subdivision because that's where the Climate Superfund program is now located. So you need to change that 33 to 34. But you don't need to do that in section three in the ANR appeal section. You would think that this Climate Superfund program would be X. But no, Climate Superfund program has its own unique appeal process. So it's not covered by this section. ANR can enforce, but they have to appeal specifically to Washington County Superior Court. Section four, Vermont bans the burning of waste, including the burning of tires unless it's at a facility certified by ANR for that purpose, which from my understanding, ANR does not allow any facility in the state to burn ios. On page 31, one through three, ANR didn't want

[Amy Sheldon (Chair)]: So

[Michael Grady (Legislative Council)]: it may be the guys that represented Tagliavia was talking about, and it's like, the fuck. So And waste tires are waste. In order to transfer or haul waste in Vermont, you need to be a licensed waste hauler. So people that are just going around offering to pick up waste tires from retailers or others, they need to be a waste hauler.

[Amy Sheldon (Chair)]: We need to be a waste hauler today? Or

[Michael Grady (Legislative Council)]: Technically, yes. Today, they do. And it's not like they need the commercial truck that comes and collects your trash at your house. There people that get licensed. I can't the way the you just changed the the limits for what a truck has to be, and I I have to look that up. But it doesn't have to be a full scale. It's always trash truck. And then last page.

[Sarah "Sarita" Austin (Clerk)]: Out of Austin. Hi. The revocation of hunting, fishing, and trapping licenses. Is that, like, you lose your license if you burn fires?

[Michael Grady (Legislative Council)]: You can. You're supposed to. It's it's you you can lose your fish and wildlife license for a few different things. Whether or not this is actually being implemented, I would defer to the commissioner on

[Sarah "Sarita" Austin (Clerk)]: It's a little scarier tip.

[Michael Grady (Legislative Council)]: But that's existing law. And so the last page, it's just in addition

[Amy Sheldon (Chair)]: That is a privilege. I should say it's a privilege, not a right, to have a hunting and fishing license. That it's not related to who may or may not be burning tires. It's a license that we I mean, but is a driver's license on the list?

[Sarah "Sarita" Austin (Clerk)]: It doesn't align with if you're burning tires, then one of the consequences could be that you lose your fishing, or is that I don't understand why that's in there other than that.

[Michael Grady (Legislative Council)]: Again, this is one of those things I drafted long ago. I think that was in there to really provide a deterrent for people burning because the this that section is under municipal law. And so when you get ticketed, you get ticketed under municipal law. And there is concern that people would risk getting a municipal ticket of a not significant amount, and that, therefore, there should be

[Unidentified Member (House Environment Committee)]: a

[Michael Grady (Legislative Council)]: more of a deterrent disincentive. There's a section in here above that roadside cleanup. Somebody found in violation can be assigned to spend up to 80 hours collecting trash, plus they're gonna lose their Is that an and or or? It's an and.

[Amy Sheldon (Chair)]: Don't burn your tires.

[Sarah "Sarita" Austin (Clerk)]: Is

[Michael Grady (Legislative Council)]: that strictly for burning? No, it's for this entire chapter. Where where are you on?

[Amy Sheldon (Chair)]: It's 30.

[Michael Grady (Legislative Council)]: Yeah. It's it's for the entire chapter. It's for throwing, dumping, depositing, or causing or permitting to be from dumped or deposit any solid waste, refuse, or whatever, or any noxious thing in or around the lands, waters of the state, outside of solid waste management facility. Number three of that is no no person shall Right. But that that provision you were just referencing, roadside cleanup, is for a violation of the entire section. One, any prohibited act under the section. It's a strenuous section. The question is how often does it get Last page, there's just a definition of waste tire added because of the reference to waste tires. And then the effective date is on passage. But as previously noted, the the dates should are embedded, but they should be reviewed because some of them are already passed or will be

[Amy Sheldon (Chair)]: Thank you, Michael. Are there further questions?

[Michael Grady (Legislative Council)]: Just one quick one, I want

[Unidentified Member (House Environment Committee)]: to back up

[Michael Grady (Legislative Council)]: a little bit. I'm trying to understand. So I went to a dealership and bought four snow tires, and they took my old ones. Two years later, two and a half years later, I go to another value center garage, bought new snow tires, and they took my old ones. How does the original manufacturer get credit for the return of tires that I delivered, where they were taken by another location? So remember the retailer is given the opportunity, the right, to opt in to be a collection site under the program. And so when the retailer currently takes your tires right now, they're incurring a cost and they either pass it on to you or they embedded in the cost of the tire that they sell to you. Now that cost is being transferred to the manufacturer. Now will the manufacturer turn around and embed that cost in the product? Maybe. But as I referenced earlier, when you first did e waste, everybody was swearing the televisions were gonna be, like, $2,000. And and now you can go to Costco and get one for, like, 150, and it's huge. Right? And so Yes. I mean, so the market is gonna drive that either way. I can't guarantee that the price won't go up, but it's not necessarily going to happen. Yeah. It's that auto where they can they can charge their manufacturer for the tires that they're receiving. I

[Amy Sheldon (Chair)]: thought you were going to get to a math question. Yeah. That's what it sounded like. Other questions, representative Austin.

[Sarah "Sarita" Austin (Clerk)]: Yeah, just on, and we don't need everybody needs to go back, but page of lab and the method of disposition. And manufacturer or waste tire stewardship organization shall recycle and use at least 50%. The other 50%, can that be shipped to another country with the stipulation that it has to be reused, or are we just shipping these tires to be stored or sit over there in another country?

[Michael Grady (Legislative Council)]: Well well, honestly, you're gonna probably ship them to Maine because that's for the these transportation costs, and there's a there's a facility in Maine that burns them.

[Unidentified Member (House Environment Committee)]: Interesting. Alright.

[Amy Sheldon (Chair)]: Thank you