Vermont Legislature SmartTranscripts:

[Mitchell J. (owner, Central Vermont Automart)]: Are you going to Canada? We're live. I saw that.

[Rep. Amy Sheldon (Chair)]: We are live. Thank you. Everyone, welcome. This afternoon, we're reviewing h two zero four. Speaker is listed as Matt

[Matt Cota (Managing Director, Vermont Vehicle and Automotive Distributors Association)]: Yes. Thank you. Matt Cota, Cota. Managing director of the Vermont Vehicle and Automotive Distributors Association, which is a trade association of new and used car dealers in the state. With me is, Mitchell J, who owns Central Vermont Automart and has spent many years selling and fixing cars in Vermont. We have concerns with the bill and questions about our practices going forward should it become law. And Mitchell has an opportunity to talk a little bit about what happens when tires are changed and how they're disposed of and how we do it, and we think in a very responsible manner, and questions about how this bill would change that practice. Mitchell?

[Mitchell J. (owner, Central Vermont Automart)]: Good afternoon. Thank you for allowing me to come and spend a few minutes. I I took a quick look at this bill the other day and and read through it and just kind of found a a lot of it problematic and and everything. But I think just to go over some of my concerns as I I read the bill from the perspective of, a a tire dealer as we sell tires to people to come in and get their vehicles serviced at our location. And then we're also a large purchaser of tires that go on to used vehicles, which we then retail here in the state of Vermont. So, you know, the the first thing saying that that come up to me, this bill, is this talks about the sale of tires, where other states I'm familiar with. Sometimes the sale of tire includes the tire that comes on a new vehicle or a used vehicle too. This seems to just deal with it. As long as that's the antenna, I'm I'm fine with it, but I just threw that out there, because I I did say, well, does this apply when I put a tire on a used car to recondition it? If I'm actually the seller and the purchaser at that point in time, and and the customer ultimately buys it and pays the purchase and use tax on the sale of the property. I also looked at it, and and and I talked to my daughter, because I got to admit I'm not out in the service department as much as I used to be. So I said, has has the philosophy changed from when I owned a couple new car stores to now owning a couple used car stores in the state? And she said, no. She says, the vast majority of our customers, they pay the $5 we happen to charge to dispose of the tires. And she said, I I really don't they just don't want a deal. And and so I don't know if that's just a function of when I had new car and used car franchises, if the customers that come to us usually have a feeling that our prices are a little bit higher than maybe a small independent store, but they're willing to do it for some of the conveniences like location, comfortable waiting room, you know, free snacks and rides to and from work and everything. And and maybe those customers are also the ones that are more worried about the stewardship of our environment, and they're happy to pay the $5 a tire to get rid of it. So, you know, with with that said, I I backed up, though, and I started looking at the bill saying, well, where's the problem? So one of the the first problems I I saw in my own mind is trying to just define manufacturer of tires versus distributors of tires and and how I've purchased them. So I don't buy any tires from a manufacturer, though I do buy them from distributors. But I I wanna describe that a little bit as I see it, the tire industry, and it's it's changed quite a bit the last, say, five years from when I was first in the business in the nineteen nineties. Know, when I first came in the business, we we knew who the distributors were. That was Vermont Tire here in Montpelier that I've sure has had a chance to talk to you. I mean, he he we bought tires from him. We got them from Max Fekelstein down out in New York. There was a few distributors. It moved to a place where we now have large, large tire stores that cover several states, and they have both retail and wholesale. So my tire distributors now, lot of times, are Town Fair Tire, Tire Warehouse. But it it it goes a little more that the Internet has finally come along so that when we're looking for some tires that you usually, if you wanna buy them, you usually associate them with the tires that Continental Michelin Pirelli sell. They're expensive tires. They're usually nineteen, twenty, 21 inch tires, run flat tires. They're expensive. They're $3.04, $450 or more at retail. We have the whole new avenue called there is a lot of Chinese manufacturers now that sell these things not through distribution, but just through tire stores that are on the Internet. And the price can be pretty substantial on those tires. I mean, we can buy those tires sometimes for a $120,140 dollars if we go with one of those brands. So I go back to say, what's the manufacturer? I'm not sure on a lot of those tires. I don't I don't know what factory they were built in, and though there's a DOT number on them, a lot of times, I gotta go to their website, try to figure who manufactured them. I know what brand they are, and that was my big concern with this bill is there are probably a couple 100 brands of tires. I had a hard time figuring it out. I tried all different methods. I finally settled on using chat, Gemini, IA, and they and their methodology was to pick some of those large ones like Tire Rack and Tire Easy, and they both come up with about 200 different brands of tires that were offered from those two buying tire stores. So I've got a bill that's saying that I'd be faced with it, makes it illegal for me to sell a tire that's not on the list today in our keeps of manufacturers. I just find that really problematic at the counter to figure out, okay. I know the brand here. It's Sumo Tire. It's Sumoco. Who made that tire? Are they on the list? Did they not pay their registration fee this year so they're not on the list, and I'm stuck with obsolescent tires that I can't sell? I look at the small tire thing and say, okay. How do I know if they sold 5,000 tires? Who who knows when they sold $5,000 worth of tires and they now need to be on the list? Call me gun shy, but in thirty years of doing this, I've ran into enough trial lawyers that always find some way to either use the Vermont consumer fraud statute or some statute to put a really big hammer over your head. And you usually end up writing a check somewhere for $10.20, 30,000 to say, just go away. You can't prove your case, but I can't afford the legal bill anymore. So the bill doesn't the bill talks about the manufacturer being responsible, but I say, okay. I sell a tire by mistake from somebody that's not a licensed manufacturer. Puts their hammer. I know what the trial lawyer is gonna say. Oh, it looks like we can do the private right of action against you. That must have been their intent. It doesn't spell it out. I have concerns about keeping that list current. This committee is probably aware of it. So Vermont, having California emissions, has certain, PZEV vehicles that have a fifteen year, 150,000 mile emission warranty. Know, when we first did that, the answer was A and R will have a list. You'll be able to go there, look up the test result code off the label, and know if the car's covered. I haven't seen that list updated in almost six or seven years. So when consumers come in now, we're at a real loss trying to figure out what ULEV and ULEV too and PZEV, and there's so many initials now that we're back to the whim of the new vehicle manufacturer. They'll tell you whether the car is covered or not. So I look at that as a history and go, I'm concerned. Can we keep the list current enough too? The the other thing comes questions like, because of the volume that I do, most of my volume, over 50% of it is with one's tire store. Right now, because of their volume, they pick up the used tires for me, they recycle them. I'm sure their cost of doing it when you're a town fair tire with, you know, seventy, eighty, 90 stopers is fairly low. I I do have tires that don't come from them. Usually, if it's only eight or 10, they'll just take

[Rep. Amy Sheldon (Chair)]: them for me because

[Mitchell J. (owner, Central Vermont Automart)]: of the volume. If I get more, I call the group up out of Albany that's a licensed hauler, I pay them to come down and haul the tires out for me and everything. I have questions on this bill. If I was still collecting them, am I allowed to charge a customer still, or does this become a bill that that takes away the incentive for customers to pay? Instead, we put it onto these tire stewardship programs. I have questions of what the cost will be, because, you know, as I read this bill, I I'm thinking to myself, okay, who's gonna create these tire stewardship programs? I see a couple nonprofits jumping up, and they're still gonna need money from the manufacturers, and those costs will get passed on to Vermonters close, I believe, a limited selection of tires, because I think some of your your small to medium manufacturers will say, let's just not sell tires in the state of Vermont. So I I I don't have a lot of advice. I I always hate to testify, but what I say is the gloom. I like to say the solution. You know, I will say in on my my years, I've also been on the NADA, the National Auto Dealer Association board of directors, for a few years. I mean, I look at some other states, and I'm sure you have, but, you know, I see states out there that impose smaller fees, a dollar, dollar 50, $2 a tire on every tire sold, and they use that to try to clean up some of the legacy problems. I don't know that I know that helps us probably with our legacy problem. I don't know how we correct the behavior to get everybody to return the tires. If anybody has any questions, I'm happy to ask them. I just like I said, I had a lot of concerns in how we really do business versus what this bill would create, and the fact that I think it would really limit the choice of tires, or limit my ability, especially when it comes to if you're gonna do it the right way and look up if the tire is one that you're gonna be able to sell. Because I think there are plenty of stores that'll just say, we're just gonna keep on selling tires, coupled with you know, I'm sure if I was I'm pretty good. I'm here in Central Vermont. We don't see a lot of people drive down to New Hampshire to buy stuff. But I know in my store down in White River Junction, we'll give people a tire price. We constantly see them, I don't just go over to eleven and pick those up or something and everything. Do you have any questions?

[Rep. Rob North (Member)]: Thank you and I apologize for being like, and you might have answered this already, but I'm wondering if there are any states that you know of that are doing this successfully. There's a way to do it, to deal with these, you know, leftover tires and how to recycle them or dispose of them.

[Mitchell J. (owner, Central Vermont Automart)]: Well, I I I didn't you know, I I sat and I looked at some stuff, like, that Florida does, but, again, they're just really trying to get rid of they credit create programs that, well, they can use the money to do cleanup sort of things with, not try to make sure every tire comes back, know, similar like we try to do with a a bottle bill. But, again, a a deposit on tires like a bottle bill is really problematic because, as it is, I see people you know, I find this hard to believe, but I think being in the car business, meeting hundreds and hundreds of people a year. You know, I literally see people that drive to Maine once a year because they can get 10¢ for their 5¢ returnable, and they take the entire pickup load up with it. So if we're talking a $5 return fee on tires, we will have truckloads of tires coming from New Hampshire into Vermont. And that's a concern even with this bill that I think along with border state, you've got a little bit of worry of a guy going,

[Rep. Amy Sheldon (Chair)]: I don't really wanna throw them on the junk pile, but

[Mitchell J. (owner, Central Vermont Automart)]: my brother lives over there in Derby. Let's just have him drop them off

[Rep. Amy Sheldon (Chair)]: for me.

[Mitchell J. (owner, Central Vermont Automart)]: He'll help the tire dealers with their percentage factor, but it doesn't really solve our problem. I I couldn't find any that are having a real success at trying to get every tire returned today. Mhmm. And the ones that have tried to do stuff, it seems to be when you read, it's just problems. They're having trouble trying to make the program operate. It's very expensive. Though I will say most of the programs I've seen have been the state trying to administer it. But, again, with that said, somebody has to administer it. So if the state doesn't do it, I see nonprofits form it, and they'll become expensive to administer it too, and it will get passed on in the cost of a tire.

[Rep. Amy Sheldon (Chair)]: Any questions?

[Mitchell J. (owner, Central Vermont Automart)]: Kristi? Sure. As as you

[Rep. Amy Sheldon (Chair)]: don't ask a lot of questions, but today I have a couple. Thank you for coming in and testifying and offering your knowledge of tires. It's much appreciated. Really, it's for us to understand what happens in tire purchase return policies and where they go. The goal is to keep them out of our rivers, roadsides.

[Rep. Kristi Morris (Member)]: The reason we have legacy piles generally is somebody's taking those tires for nothing. People are dropping them off there. Reference some of the agricultural locations where they stockpile tires, put them on their silos. Suggestions, and the person that doesn't have the $5 and I know it's hard to believe when you're buying tires, the person that doesn't have $5 and decides to throw it away somewhere or dispose of it improperly, what's the incentive? What can you suggest for incentives for those people so that they don't throw the tires away? That's what we're trying to If it's not a deposit at the time of purchase, if somebody's EPR is not paying for the return of that tire, how can we keep them out of our rivers and roadsides?

[Mitchell J. (owner, Central Vermont Automart)]: So, I make an assumption, and sometimes my assumption is not a good one, but my assumption would have to be that the lower income person is probably gonna dispose of the tire improperly, though not all the time. And I certainly have some customers that barely scrape by and still somehow we feel bad sometimes, we'll take care of it, because I know that certain amount of them are not paying, and all everyone's handling them. So it's not a big deal just to take them for some people that really do pride, though it's a very few people.

[Rep. Rob North (Member)]: But and I hate things where we

[Mitchell J. (owner, Central Vermont Automart)]: have programs where businesses have to figure out people's income levels, but it would be nice if, you know, we could create a system through a flat tire fee that you turned around and then rebated, you know, certain people to try to get them to to turn the tire in. And, again, I I don't wanna sound negative. I'm sure there's somebody making a 150,000 a year that still throws this tire every once in a while now for a bank, but I'm trying to think where where I see the real problem. The customers I see really have the most problem are the lower income customers. Getting rid of four tires are $20 is a decision between getting rid of the tires the right way or maybe buying that, you know, the extra food they need that week or something. So I don't I don't know the answer, but again, I I think if we had a smaller fee, you know, I've said I've seen the state choose a small fee and be able to clean up legacy problems. Maybe you still have a small fee, you you also say we can come up with a program the state can to rebate those people at a lot cheaper cost than I think this program. This just seems like this is gonna be a very, very expensive program to administer. I I don't disagree with that. That that's why

[Rep. Amy Sheldon (Chair)]: I'm looking for an alternative, wouldn't I? How can we incentivize those that are prudently depositing their tires where we don't want them? Representative Norris. Along those same lines, thank you for your presentation and being and sharing on this. It's very helpful. There already a fee that goes along with the sale of every new tire in Vermont? No. There's no per tire fee? No cleanup fee, no tires, I think. I feel like sometimes when I

[Mitchell J. (owner, Central Vermont Automart)]: go to buy tires, it

[Rep. Amy Sheldon (Chair)]: starts to No. Tire fee.

[Mitchell J. (owner, Central Vermont Automart)]: A disposal fee? Yeah. But when buying new tires? Well, you may have. So I've got to admit that I think every business today has become very creative. It reminds me of when I go order a takeout order at McDonald's, and now that's a bad example. A takeout order the other day, though, at a burger fire I was at, which is the same sort of thing, a chain down south, and they got eighteen, twenty, or 22% tip, and I'm gonna stand there and wait for my burger. You have to purposely put no tip. So I I have seen some dealers actually just load up the fees. Like, unless you complain, we're gonna charge you for a disposal fee and just assume you're leaving your tires. So I you could see it. I mean, I've seen a couple of dealers charge for valve stems on every tire, tire disposal fee, just assuming that you don't want your old tires back. And I'm sure you've you'll find a tire dealer no. There's no state law right now doing it. And that's why I mentioned the new and used car tires even in the state, because a lot of those states that do some of those cleanup programs, like I said, they will assess a fee not only the sale of tire, but also saying that every every new and used car has four tires on it. But I'd be careful, because I'm in a state where the governor says no fees. I think you you need money to solve the problem. The other question?

[Rep. Rob North (Member)]: Just real quickly. So maybe you know this, Matt. Can you bring do we have, like, you know, where we have people can bring batteries or, you know, there are days that you can bring batteries or computers or something. Do we have anything like that is?

[Matt Cota (Managing Director, Vermont Vehicle and Automotive Distributors Association)]: Like an amnesty day where you you bring it in and not not not be charged like you do with batteries and

[Mitchell J. (owner, Central Vermont Automart)]: Yeah.

[Rep. Amy Sheldon (Chair)]: And be safe.

[Matt Cota (Managing Director, Vermont Vehicle and Automotive Distributors Association)]: Yeah. That's a great idea. Yeah. I I don't know that we have those here the solid waste districts, I could see how that would be compelling for someone who has tires in their garage that just wants to get rid of them and may not know how or may not want to pay for it.

[Rep. Rob North (Member)]: But do you know how they're funded? Because then they must have to pay someone to take

[Matt Cota (Managing Director, Vermont Vehicle and Automotive Distributors Association)]: I don't think that's good. That's a good question, Rob.

[Rep. Amy Sheldon (Chair)]: Pritchard?

[Rep. Chris Pritchard (Member)]: Yeah. So I was in the automobile business for quite some years too, and so we dealt with tires all the time. I thought we managed it good. You know, when we There was this disposal fee we had, and normally on a switchover, a lot of the customers we would see, we would see on a regular basis. And part of what we did when we serviced their car, we did the MPI like everybody does now, and would list the tread depth on the tire when it left. So they would know if, you know, next time you're gonna, you know, your next visit, you're gonna need tires. And we would have that discussion with them, as I'm sure independents have the same discussion with those folks. And I think our capture rate was pretty good. I mean, can think of very few examples where we were putting, you know, tires back in a customer's car that had less than two thirty seconds on. They were happy to pay the fee, and, you know, it was disclosed up front. And we would do the same thing. You know, there were some folks where it was a challenge, and, you know, we would just take care of that, take care of their tires and move on to the next thing. Know, part of what I've heard with this is, you know, we're really looking at a very small percent of the tires that are out there. I think the testimony that we've heard is it's over 90% of these tires are accounted for. And I have some of the same concerns that you do from being on the automotive side. Nothing's free. Once it's imposed, the manufacturer is either going to pass it on, you're going to pass it on, and at the end of the day, it's the customer that pays for it. The customer, the taxpayer, whatever. So, you know, I share the same concerns that you have with this thing. And

[Mitchell J. (owner, Central Vermont Automart)]: I appreciate that, because I I mean, that's the number my daughter makes, about 90% of our customers. Pay the fee. We waive a few. You know, your concept's a little more unique sometimes, too, because I and you can tell me my experience was that most customers don't want to slog those things home and put them in the garage. Again, maybe an amnesty day instead where you help fund it with some kind of fee would also be for the ones that you know, for some people, the $20 isn't poor enough. They'd slug them home and figure out to get rid of them on another day or something, too. I just thought that the rebate type of thing was an instant. It's easy to say, yep, I qualify, here's the coupon or something. But, again, it's, that 10% of those tires creates one heck of an eyesore and a problem, but it is a small percentage of people that are trying to use, in in my mind, this bill, a sledgehammer trying to take care of a very small cell.

[Matt Cota (Managing Director, Vermont Vehicle and Automotive Distributors Association)]: Yeah. In in in high level, and Mitchell referenced this, which is the concern that that if they don't join the stewardship program, there's fewer choices for the consumers, and competition is good in terms of pricing. And then if a a local retailer, happens to have a tire in stock and that manufacturers either bowed out of that program or not, that they somehow face a private right of action from the trial attorney. That is a concern for all our local businesses that just want to put good tires on their customers' cars. With that said, there's also acknowledgment that we don't want to see the tires on the

[Rep. Amy Sheldon (Chair)]: side of the road either. There's one more question.

[Mitchell J. (owner, Central Vermont Automart)]: There's

[Rep. Rob North (Member)]: no technology about trying to retrench tires, right?

[Mitchell J. (owner, Central Vermont Automart)]: You know, that was remember in the seventies, that's the only type of tire I knew how to buy. It was a retread. I don't the back of the door. I I don't see it except for on heavy duty truck tires today. I don't see anybody doing it on anything but just tractor trailer truck tires today. You know, that concern with the bill I didn't mention, but, again, it goes back to the manufacturer side of it when I see administering this bill. Even when you look at trying to figure what a manufacturer's share of tire sales is into this Vermont, That's pretty good when you think of tire manufacturers like Goodyear, Firestone, the big ones. But you have some brands too that that that sell only certain type of tires. I mean, my example is I don't I see customers buy Hocopalita winter tires, but I almost never see them buy any other type of Hocopalita tire. Yeah. So you would get a company that could be very compliant because they don't sell many tires, but it doesn't mean you know, there there's some problems trying to figure out what their share was. I don't even know how you figure out what their share in New Vermont was because, again, it goes back to how we get these tires. It's not like you can round up eight distributors and say, tell us how many you sold of everything. It's but even if you could, you that formula starts to be problematic with tire manufacturers that don't carry a full broad line of tires.

[Rep. Amy Sheldon (Chair)]: I

[Rep. Rob North (Member)]: think when a retailer said, I don't even know where my tires come from, that the manufacturer is so big, Then I was trying to figure out how this could be implemented if you don't know who the manufacturer is.

[Matt Cota (Managing Director, Vermont Vehicle and Automotive Distributors Association)]: And the other side that represented Austin is the manufacturer sells to the distributor, but doesn't know where if the tire ends up in New Hampshire, Vermont, or California. Right. So it's we want to go further upstream away from the customer, but at the same time you go so far, then there's no nexus to the state.

[Rep. Rob North (Member)]: Any other questions? Nobody's in trouble, Bob.

[Rep. Amy Sheldon (Chair)]: Thank you very much. Thank

[Mitchell J. (owner, Central Vermont Automart)]: Thank you your you very much. Appreciate you giving us the time today and everything. Going back and play out the snow. Was cold snowmobile on up in Derby. Thank you, everybody. We'll

[Rep. Rob North (Member)]: be adjourning