Tire regulations, registration atop 2016 agenda

WASHINGTON—For 2016, mandatory tire registration—including the content of a mandatory registration rule, and the length of time it may take for the National Highway Traffic Safety Administration to promulgate it—is on the mind of almost everyone in the tire industry.

However, it will not be the only issue in the coming year. In our annual roundup, executives of various associations cited a number of legislative, regulatory and industry initiatives that will affect their members—for good or ill—in 2016.

A provision requiring independent tire dealers to register all tires they sell at the point of sale, and to transmit that information electronically to tire manufacturers, became law in December as part of a larger, five-year surface transportation reauthorization bill.

The mandatory registration provision was part of a group of strategic initiatives advanced by the Rubber Manufacturers Association. Those RMA recommendations—which were part of the final legislation—included one provision to establish fuel economy and wet traction minimum standards for tires, and another for NHTSA to post a user-friendly tire safety recall lookup engine on its website, navigable by tire identification number.

The RMA was delighted by passage of the surface transportation bill in general and of its strategic initiatives in particular, according to Charles A. Cannon, outgoing RMA president and CEO.

“We've waited a long time for a multi-year highway bill,” he said. “Its passage represented a coming together of interests. Unfortunately, it was a unique opportunity, but an opportunity nonetheless. We agree with the National Transportation Safety Board that the recall system is broken and needs fixing.”

In October 2015, as an outcome of a two-day hearing held the previous December, the NTSB issued a report making 11 recommendations to improve tire registration and recalls.

Cannon noted there is no timetable for NHTSA to complete action on the RMA's provisions.

“We look forward to NHTSA taking the lead in reforming these regulations, but we hope they do so with a sense of urgency,” he said.

The Tire Industry Association opposed mandatory registration as unfair to independent tire dealers, according to Roy Littlefield, TIA executive vice president. Even more, however, TIA is concerned that the issue is in the hands of government regulators, rather than being handled internally by stakeholders or debated in Congress.

“One concern we have is that for 10 years we have talked about the need for the industry to speak in one voice and be profit-driven in all things,” Littlefield said. “I have great concerns how this will play out—not just for us, but for manufacturers. We may see we've bitten off more than we can chew.

“There was never a vote on any of this, never a discussion or vote. Now we've turned it over completely to bureaucrats.”

Turning over customer lists to tire makers is especially worrisome for independent dealers, he said. Not long ago the European Union established similar requirements for dealers to transmit registration information to manufacturers, and Littlefield and other Americans heard about the results at the recent conference in Bologna, Italy, of BIPAVER, the European retreading association.

“The first year of the European regulations, online sales of tires rose over 20 percent,” Littlefield said. “It was killing the European dealers.”

TIA managed to get House-Senate conferees for the surface transportation bill to include a provision for NHTSA to perform a study on the feasibility of including readable electronic devices on tires that would contain the TIN and all relevant registration information. However, the conferees rejected TIA's proposal to defer rulemaking on mandatory registration until the study was completed.

“We will make a concerted effort to meet with safety groups to call for pushing forward on the study,” Littlefield said.

Cannon said the RMA favors analysis of electronic information on tires but added, “We are pleased to see it's not a condition of moving forward with reform of tire registration.”

The RMA expects to see state legislation placing safety restrictions on the sale of used tires in 2016, despite the failure of used tire bills in several states in 2015, according to Dan Zielinski, RMA senior vice president, public affairs.

South Carolina is the most likely state to consider a used tire bill in the coming year, Zielinski said.

“This year we came down literally to the final minutes in the South Carolina Senate, but we ran out of time,” he said. “Our priority is to get a bill passed and signed into law.”

Among the recommendations in the NTSB report were two related to tire aging.

One proposed implementing plans to promote a tire aging test protocol if tire safety and tire pressure monitoring system data show tire aging risk should be mitigated. The other recommended developing a consensus document on tire aging with tire makers, vehicle makers and safety advocates that includes best practices on how to mitigate tire aging.

Nevertheless, Zielinski said, the RMA doesn't expect tire aging legislation in the states to be an issue in 2016.

“In the past six or seven years, the number of tire aging bills has really declined,” he said. “This year there was only one bill introduced, in New Jersey, and it was not considered.”

Zielinski attributed the decline partly to tires becoming more robust under strengthened federal safety standards, and partly to the growing realization that chronological age is not the determining factor in a tire's roadworthiness.

Ironically, tire dealers are coming to feel that some sort of government action on tire aging may be to their benefit, according to Littlefield.

“Historically, we stood with the RMA on tire aging,” he said. But more and more tire dealers are facing lawsuits for selling or servicing tires that exceed the age recommendations of tire or auto makers. There is no other product in America for which the retailer is held responsible.”

Both the RMA and the Automotive Service Association said actions by the Environmental Protection Agency could have significant impact on their members.

Under the EPA's Greenhouse Gas Plan established by the Obama administration, certain biomass fuels can get greenhouse gas credits, according to Cannon. Because natural rubber is biomass, tire-derived fuel potentially could bring greenhouse gas credits to plants that use it, he said.

“If the EPA defines TDF as a biomass fuel, power plants might take a closer look at using TDF,” he said.

Meanwhile, a long-anticipated bill reforming the Toxic Substances Control Act is being held up in Congress, largely because of two senators who have placed a hold on the bill for reasons unrelated to TSCA itself, Zielinski said.

The RMA's Tire Materials Committee is responding to the EPA's need for data, Cannon said. “We have a reasonable working relationship with the EPA, and we can provide data regulators can make use of.”

For the ASA, the big EPA-related issue is how new ozone limits—moving to 70 parts per billion from the current 75—will play out as State Implementation Plans are issued, according to Robert L. Redding, ASA Washington representative. This goes straight to the issue of the need for vehicle emissions testing, and whether current testing programs go far enough, he said.

New England has ongoing scrap tire problems caused by the closure of Oxford Energy, according to Cannon and Zielinski. This was what motivated the Connecticut legislature to consider two bills that would have introduced a tire stewardship plan in Connecticut, but the RMA successfully opposed both bills, they said.

Some pulp and paper mills in Maine are increasing their use of TDF, they said, but diversification of scrap tire markets needs to be the goal in New England. A scrap-to-market conference in Albany, N.Y., in November 2015 helped to put New England regulators in touch with recycling industry professionals to advance the diversification effort, Cannon said.

In an especially promising move, California is poised to provide grants for state agencies and municipalities to use rubber-modified asphalt in highway and road projects, Zielinski said.

Potentially, California could use 24 million scrap tires annually for highway projects, out of the 40 million it generates, Zielinski said.

On the other hand, many states remain hostile to rubber-modified asphalt, he said. Too many state highway administrators remember the rubberized asphalt mandates of the Intermodal Surface Transportation Efficiency Act of 1991, which proved to be so unworkable and unpopular that Congress eventually repealed them.

“State highway departments have long memories,” he said. “But the technology of rubber-modified asphalt has improved demonstrably since then, and now in some cases rubber-modified asphalt is cheaper than conventional asphalt.”

For TIA, two workplace-related issues will continue to be of concern in 2016, according to Littlefield.

One is increased spot inspections of independent repair shops and tire dealerships by the Occupational Safety and Health Administration. “They've targeted the auto aftermarket, and there have been fines ranging from $20,000 to $40,000 for minor infractions,” he said.

An even greater worry is the Small Business Administration's proposal to redefine managers and assistant managers in small businesses as hourly workers for the purpose of overtime pay, Littlefield said.

Most tire dealerships can't afford overtime pay for these employees, and may be forced to cut sick leave and other benefits as a consequence, he said.

“They think a small business has a back room filled with money,” he said. “A tire dealer has a finite amount of money he can spend.”

Most tire dealers already pay well beyond the minimum wage, according to Roy Littlefield IV, TIA government affairs manager. “They make an honest effort to provide for their employees over and beyond what's needed. These guys have really tried hard.”