Used tires;

Tires on new automobiles that will eventually come into the system;

Tires from automobile salvage yards;

Trucking companies;

ATV tires;

It has cleaned up all stockpiles in Louisiana;

Cleaned up small Oone time clean ups (any one with a few hundred tireshundred tires); and

Tires from Parish collection centers.

It appears that inventory numbers on all reports are not actual inventories, but are inventories that have been arbitrarily selected each month. There are other examples.

For example, if I wanted to cheat the program, (since know the agency does not audit my report or check my average weight per PTE):

I could bring in un-manifested tires to my facility from other states, shred those tires with my program tires, and because no one checks the average weight per PTE, I could collect for the entire lot.

I could weigh the same load of tire material several times while taking it to market.

If I have a friend in the trucking business, say someone who hauls sugar cane,. tThey could weigh their loads and bring me their weight tickets; I could then include those weight tickets with my report each month for payment from the tire fund.

I could create a fictitious number for an inventory that does not exist. I could use this non-existent inventory to create my own average weight per PTE after adding un-manifested tires or processed tire material to my monthly request for payment.

I could process my tires into a 2" minus chip for sale to fuel markets that require a product with no wire. After I remove the wire, which could be as much as 40% of the tire, I could add rubber from other sources to make up that 40% and be paid for 100% (are more) of tires collected for that month. The problem would be that I added material from other sources that are not eligible for the $150 per ton payment from the tire fund.

I think we’ve learned this is not a program that will operate on automatic pilot. I believe it will work only when when a dedicated group is reestablished within the agency to over see the program. TFrom the outside it appears to us the group should be a minimum of at least six people. One department head, two enforcement persons, two persons to audit the monthly reports, one person for registration, permits, and certifications. This program requires the full time management of the agency. The program has a history of those who would in the program engage in illegal activities in order to exploit the fund.

The main reason a dedicated group is needed is because, as you might have noticed, our business looks simple, but in fact is very complicated. It works best when the same people work with the program every day so that they will know the players and the players know that people who understand the program are watching them.

This group should not be effected by budget cuts as it is funded by money available from the dedicated waste tire fund as outlined in LAC.33: VII Section 10535.C2, which states; a maximum of 10 percent of the waste tire fees collected may be utilized for program administration.

A person from this dedicated group should be required to travel to the processor’ s facility (there are currently four) each month and observe the processor as they compile their monthly request for payment. This would also give them an opportunity to verify inventories.

The agency should be required to audit reports from processors each month.

Stop the flow of non-program tires and processed tire material from being brought into the program by those seeking to exploit the system.

OTR’S (off the road tires) weighing more than 500 lbs. are not program tires. They should not receive payment from the fund.

Require the agency to audit all participants in the program, Used tire dealers, transporters, markets, used tire wholesalers, etc.

After the audit, the agency should be given the ability to collect money from those participants who have been found to have deficiencies in payments to the agency or for any tires that they put into the program that are found to be ineligible for payment in the program.

Give the agency the laws and the ability to prosecute any serious infractions found in those audits.

All tires should be counted. The only integrity the program has is the relationship between tire count and processed tire weight. Tires must be counted in order to maintain that integrity.

Request for payment form should have a place to tract all program and non-program whole tires and processed tire material program or non-program processed tire material.

Require an officer of the company requesting payment for activities during a given month to sign the monthly request for payment.

When All processors should be required to report report the same way on the same forms supplied by the agency. When they report the same,, a simple formula can be applied to monthly request for payment. It will give the agency the proper checks and balances to watch the processors and an excellent place to watch for any problem that might harm the program. The agency should hold a class that would explain the meaning of each line and what number should be placed on that line. An officer of the processor company should be present in that class with whomever else they feel should attend.

Simple formula for figuring average weight per PTE.

All processed tire material, whether that material is marketed or inventoried, should be weighted on certified public scales. Each load should have an empty weight ticket.

Weight tickets for processed tire material, whether marketed or inventoried should accompany the monthly report to DEQ.

When weights are found to be over an average of 22 lbs. per PTE, as it relates to the tire count and the weight of the tires processed, a review of that monthly report should take place with an officer of the processor company in question.

ReRequire inventory numbers to be the actual number of tires and processed material stored on the processor’s facility on the first day of each month.

Revoke all exemptions issued by the department that now exist in the program. Allow a grace period to reapply.

Transporters should be bonded.

The agency should be required to have a hearing or arbitration process for a processor found to be out of compliance with DEQ rules, before any funds can be delayed or withheld from monthly payment for marketed tire material. Some type of system that would assess fines could be put in the place of withholding funds.

The agency should be required to establish an inventory of all processed tire material in the state produced prior to January 1,1998 with a value of $15 per ton. Also an inventory should be established of tire material produced after January 1, 1998 and before January 1, 2001 with a value of $100 per ton. A system should be devised to maintain control of the inventory until that material has been delivered to a market. Those inventories of processed tire material should be kept separate from processed tire material produced after January 31, 2001 with a value of $150 per ton. All program or non-program scrap tires and processed tire material should be stored separately in order to maintain accurate inventories.

Change definition on MEDIUM TRUCK TIRES:

The amount of the tip fee should be determined by what the program needs to accomplish and what you want it to pay for. This may cause the need for the fee structure in Louisiana to be revisited in the near future.

The first consideration for additional tip fees is to add USED TIRE DEALERS to the program. We have polled most of our used tire dealers and they have all told us they would prefer to be added to the program the same as new tire dealers. Most have told us they are already collecting the $2 fee. This would cause them to be audited the same as new tire dealers and would eliminate the confusion they think may happen with the changes being considered now.

The next possibleplace to add revenue to the fund would be a $10 fee on the sale of a new automobile for the five new tires that are added to the system each time a new automobile is sold.

But before we start talking about increasing the tip fee, I believe every effort should be made to get the program under control by appropriate oversight.