Robert Morgan
Posted on
December 19, 2002
BATON ROUGE -- At least some of the waste tire
disposal fees collected by new tire dealers in Louisiana probably went
to pay for disposal of used tires from other states, Thomas Bickham, a
state environmental official, said.
The Department of Environmental Quality began investigating possibly
illegal draws on the Waste Tire Management Fund "four or five months
ago" when the fund's normal balance began disappearing, Bickham said.
Used tire dealers and processors were informed of the problem this week.
"We're at the point where we're truly 'cash in, cash out' (of the
fund)," he said, explaining that the fund previously carried a balance
from month to month before questionable claims began.
He said, "This is what happened; our neighboring state, Texas, dropped
their program. They (tire dealers) were doing anything they could to get
rid of these Texas tires."
In addition to Texas, he said DEQ has found instances in which used
tires from Mississippi and Alabama were imported to Louisiana for
disposal.
Louisiana pays waste tire processors $1.50 per 20 pounds of "crumb
rubber" to reduce used tires to a usable product that can subsequently
be sold or transferred to some other "end user," he said.
"They have to show that they have an end user before we'll pay them from
the (waste tire) fund," he said.
Money to pay them comes from the waste management fund, which gets its
money from the fees people in Louisiana pay when they buy new tires.
The problem is that only new tire dealers are required to collect the
disposal fee charged when a Louisiana resident purchases tires, he said.
Passenger car owners are charged a fee of $2 per tire, large truck
owners are charged $5 per tire and owners of off-road vehicles are
charged
$10 per tire.
There is no fee charged for used tires, and used tire dealers have not
had to collect and retain data about their sales, Bickham said.
New rules are being written and will be in place by April to add used
tire dealers and handlers to the list of people who have to record data
about their product, he said.
Used tire dealers will still not collect the disposal fee, but they must
be able to prove that used tires sent to processors for disposal were
originally sold new in Louisiana for the processor to collect from the
waste tire fund, he said.
The fee is collected for future disposal of the new tire purchased, he
said. A used tire sold new in Louisiana will have had a disposal fee
paid before
it is resold as a used tire,
Bickham said.
"We never audited used tire dealers until recently," he said.
The audits followed a discovery that the waste tire fund was being hit
for an estimated $50,000 to $100,000 per month more than previously,
resulting in depletion of the fund's routine balance, he said.
Although processing of tires from other states was not eligible for
reimbursement from the waste tire fund, auditors found evidence that
some manifests may have been altered, he said.
"They provide a manifest to us. There's a manifest that follows these
tires. The problem was that not all of these were, shall we say, legal
manifests."
Evidence of criminal activity has been turned over to prosecutors around
the state in the judicial districts where the violations were thought to
have occurred, he said.
If the district attorneys do not prosecute the criminal charges, DEQ has
the ability to seek civil claims.
Bickham refused to say where criminal allegations have been made saying
DEQ policy prohibits public comment about criminal investigations.
Meanwhile, there is enough money in the waste tire fund to pay
processors' current claims, he said, adding January and February may be
"lean months" when there is not enough money in the fund to pay all
claims.
If that problem occurs, an agreement has been worked out with the
processors to pay them on a weighted formula basis until the fund can be
replenished, he said.
Once the fund begins collecting a recurring balance, processors will be
fully reimbursed, he said.