SACRAMENTO, Calif.—In what may shape up to be a battle between California tire dealers and the state government, the California Integrated Waste Management Board is asking the state to raise the fee it collects on new tire sales to as much as $2. The proposal, submitted April 30 in a draft report to Gov. Gray Davis, calls for $2 to be collected on every new tire sold at the wholesale level. Dealers currently collect a 25-cent fee on retail purchases of new tires.
A higher tire fee would give the waste management board funds to clean up the state's tire piles and develop markets for scrap tires, a board spokesman said. California generates 30 million scrap tires per year, more than any state, and has an additional 15 million tires stockpiled, he said.
A final report will be submitted to the governor's office in late June. The state government then will decide if new legislation is needed, the spokesman said.
The proposal surprised tire dealers, who expected the board to recommend the state Department of Motor Vehicles collect a 75-cent scrap tire fee on all automobile registrations.
``I don't know if (the board) did that as tongue-in-cheek or to get a reaction out of (dealers), but it was sure a lousy way of doing things,'' said Ed Cohn, executive director of the Southern California Tire, Automotive & Retread Services Association.
``It was kind of a shock to us and we're trying to rally...so that we can fight this and stop it,'' said Ed King, executive director of the Western States Tire and Automotive Service Association, based in Hayward, Calif.
California dealers are upset because they may have to list the new fee on a customer's invoice—which they do now with the current fee—in addition to charging a disposal fee for each tire, King said
Dealers with California-based distributors would not have to collect the proposed fee, but those who receive tires directly from out-of-state distributors would continue to be responsible for collection.
The $2 scrap fee and disposal fee easily could end up costing a customer up to $14 extra for a set of four tires. Dealers then would be responsible for explaining the charges, King said.
Paying the fees at the end of the month for all tires received would amount to a substantial cash flow, King said.
Cohn said he wonders how the state would enforce the proposed fee, especially when there are about 8,000 tire retail locations in California.
The board did discuss a 75-cent fee, then a $1 fee, before settling on a proposal at $2, the board's spokesman said. The report still is subject to revisions before the final version reaches the governor.
``My understanding is it was a possible fee amount that they had discussed, but it was something more along the lines of, `What if we had a $2 fee on the tires. What could we do with that?' It was something that was discussed back and forth,'' the spokesman said.
The proposed fee is a discussion point by the board, not a recommendation, he said.
In 1998, California collected $5 million from the 25-cent fee, but at a cost of $484,000, according to the report. A $2 proposal would raise an estimated $40 million for the state scrap tire fund, while a 75-cent fee on motorist registrations would generate about $15 million, the spokesman said.
A $1.80 fee on vehicle registrations would cover the cost of a proposed $40 million scrap tire budget.