Rubber industry execs forecast more frustrations

WASHINGTON—Last year, it was very frustrating for the tire industry to get any legislative initiatives passed, and industry representatives in Washington don't expect the task to be any easier in 2014.

"It's very difficult to see any legislative action happening this year on any serious issue confronting this industry," said Charles Cannon, president of the Rubber Manufacturers Association.

"I don't want to be too pessimistic, and we will continue to be aggressive in pursuing issues of interest to our members," Cannon said. "But, as a consequence, we have no elaborate legislative agenda except to define and defend our positions."

Roy Littlefield, executive vice president of the Tire Industry Association, said he would have an opportunity to advance TIA's causes in 2014 through his presidency of the Small Business Legislative Council and membership in the Highway Users Alliance.

"The SBLC is a very respected group in Washington," he said. "It will give us a little more access to the White House, and give us a voice in regulatory reform, legislative reform and other issues in which TIA otherwise might not be involved."

One issue that the entire industry has a vital interest in is congressional reauthorization of transportation funding.

"At the current rate of spending, the Highway Trust Fund will run out of money in 2015," Littlefield said. "Something has to be done other than kicking the can down the road."

Several scenarios are being discussed in Congress and in state legislatures, according to Littlefield. The first and most popular, because it's the easiest, is a significant increase in gasoline and diesel fuel taxes.

However, to make up for current shortfalls, Congress would have to raise fuel taxes by $1 or even $2 a gallon, Littlefield said. The proposal by Rep. Earl Blumenauer, D-Calif., to raise fuel taxes by 15 cents a gallon is inadequate to replenish the trust fund, he said.

Cannon also had little regard for the Blumenauer bill. "We've never taken a position on gas taxes in the past, but I would consider the Blumenauer proposal a non-starter," he said.

TIA's position is that transportation-related taxes should not be raised, period, according to Littlefield.

Maryland has passed the largest single increase in its fuel tax, he said. But TIA prefers the approach taken by Virginia, which managed to raise considerable funds for in-state transportation projects without raising taxes.

Revenue for transportation infrastructure projects is a real problem, according to Cannon and Daniel Zielinski, RMA senior vice president of public affairs. But it is virtually impossible to imagine any sort of tax hike being passed in an election year, they said.

"The Highway Trust Fund is a nagging question," Zielinski said. "The nation as a whole can comprehend the need for funding, but the revenue being raised is not sufficient."

More than 800 roads in the U.S. are now privately owned and operated, according to Littlefield.

Tire manufacturers brought the road situation to TIA's attention a few years ago, he said. "I don't know if that's good public policy or not, but it's making it more expensive to move goods and people," he said.

Despite the relative lack of publicity on that front in 2013, used and scrap tires remain an urgent issue for the RMA, Cannon and Zielinski said.

"We believe in technologically and economically sound solutions for scrap tires, because we know they have happened," Cannon said. "Our consistent philosophy has been to take an economic approach that allows end-use markets for scrap tires to develop."

However, many states are either easing off on their commitment toward scrap tire abatement or diverting scrap tire funds for other purposes, Cannon and Zielinski said.

They called Colorado the "poster child" for poor scrap tire management, with more than 60 million stockpiled tires in the state. Colorado subsidizes end users of scrap tires, which effectively has stunted the creation of a healthy scrap tire market there, they said.

RMA also plans to promote its model used tire safety bill in several state legislatures, including Florida, where it advanced nicely in 2013 before the legislative year ran out.

The legislature in Texas, which also actively considered a version of the used tire bill, is not in session in 2014, Cannon and Zielinski said.

The association will not actively seek to advance its other model bill, covering proper tire repairs, in 2014, Cannon said.

After nearly four years, both RMA and TIA are still waiting for the final labeling format, testing procedures and consumer education language for the tire fuel efficiency grading standard promulgated in March 2010 by the National Highway Traffic Safety Administration.

TIA still hopes to be named the third-party administrator of the consumer education program. Meanwhile, RMA suspects NHTSA may be waiting for something to come down from the United Nations on global tire regulatory standardization before it signs off on tire efficiency regulations.

March of this year is the current target for the final language on tire fuel efficiency, though NHTSA has already missed several previous target dates, Cannon and Zielinski said. June 2014 is the target date on the United Nations standard, they said.

RMA will be watching both Congress and the states—especially California—closely for regulatory actions on chemicals used by tire manufacturers.

Congress may take up the issue of reforming the Toxic Substances Control Act, according to Cannon and Zielinski, although the consensus on TSCA reached by Sen. David Vitter, R-La., and the late Sen. Frank Lautenberg, D-N.J., has long lapsed.

California has a state regulation that requires manufacturers within the state to evaluate and if possible adopt "safe" alternatives to chemicals defined as toxic, Cannon and Zielinski said. Meanwhile, Sen. Barbara Boxer, D-Calif., will fight to prevent federal pre-emption of state chemical regulations, whereas RMA and other manufacturing associations will fight to preserve it.

"Federal pre-emption is very important," Zielinski said. "No manufacturer wants a patchwork of environmental regulations when one law can be used."