42872.2.
(a) This section shall be known, and may be cited, as the Tire Recycling Incentive Program Act.(b) In accordance with Section 42872, the department shall establish a tire recycling incentive program that makes payments to eligible entities.
(c) Incentive payments shall be made only to eligible entities for incentive-eligible tire products manufactured from California-generated waste tire material that promote the recycling of, the reduction of the disposal of, or the prevention of illegal dumping of California-generated waste tire material.
(d) An entity is eligible to receive an incentive payment only upon demonstrating the following to the department, as applicable:
(1) The entity purchased a tire product that is manufactured completely in California from California-generated waste tire material processed in California.
(2) If the end use of the tire product is for something other than a local public works project, the entity sold an incentive-eligible tire product that is processed and manufactured completely in California incorporating California-generated waste tire material to an end user.
(e) For purposes of this section, “eligible entity” includes both of the following:
(1) A manufacturer that produces an
incentive-eligible tire product incorporating California-generated waste tire material for purchase by an end user. “Eligible entity” does not include the entity or person that receives the finished product, except as provided in paragraph (2).
(2) A city, county, city and county, or special district that puts out a bid and contracts with an outside entity to use rubberized asphalt products that incorporate California-generated waste tire material for a local public works pavement project, including, but not limited to, a pavement project on a street, road, alley, or other thoroughfare specified in the bid documents. No less than 50 percent of the total annual value of incentive payments made pursuant to this section shall be made available for the eligible entities described in this paragraph.
(f) For purposes of this section, “end user” includes, but is
not limited to, the following:
(1) Cities, counties, and other local governmental agencies, including school districts.
(2) State governmental agencies, including regional park districts.
(3) Private companies and persons.
(g) (1) For purposes of this section, “incentive-eligible tire product” may include, but is not limited to, the following:
(A) Pavement-related products, such as rubberized asphalt, asphalt rubber, modified binders, and chip seals.
(B) Rubberized asphalt base stock to be used in applications other than pavement.
(C) Products used in disability access projects at parks and Class I bikeways, as defined in subdivision (a) of Section 890.4 of the Streets and Highways Code, relative to projects that use recycled tires.
(D) Poured in place and tile playground mats.
(E) Landscape nuggets and mulch.
(F) Walkways and pathways.
(G) Running tracks.
(H) Tire-derived aggregate engineered applications.
(I) Molded, extruded, injected, and calendered products.
(J) Products that use recycled rubber as a
substitute for other materials, such as plastic.
(K) Paint and coatings.
(L) Other products, environmentally safe applications, or treatments determined to be appropriate by the department.
(2) “Incentive-eligible tire product” does not include any of the following:
(A) Tire-derived fuel.
(B) Alternative daily cover, intermediate cover, erosion, or other landfill uses, except tire-derived aggregates used in landfill engineered projects for landfill gas and leachate control systems and other engineering projects designated by the department.
(C) Exports of whole waste tires.
(D) Crumb rubber as an intermediate product before purchase for incorporation into a final end use.
(E) Tire-derived aggregate as an intermediate product before purchase for incorporation into a final end use or as an intermediate product that is shipped out of state.
(F) Rubberized pavement shipped out of state.
(G) Synthetic turf infill.
(H) Loose rubber nugget or mulch playgrounds.
(I) Purchases made to meet procurement requirements established pursuant to Section 42703.
(h) (1) On or before January 1, 2020, the department shall hold a public workshop to develop a plan for the tire
recycling incentive payment program established pursuant to subdivision (b). The plan shall be included in the next revision of the five-year plan required pursuant to Section 42885.5.
(2) At the public workshop required pursuant to paragraph (1), the department shall do both of the following:
(A) Consistent with this chapter, determine, among other things, all of the following:
(i) What products, in addition to those listed in paragraph (1) of subdivision (g), are “incentive-eligible tire products” for purposes of this section.
(ii) The incentive payment amounts to be paid to eligible entities, consistent with the requirements of subdivision (l).
(iii) Conditions to ensure that incentives
are paid only for bona fide transactions.
(iv) What is considered a “recycled-tire product” for purposes of determining the recycling rate for California-generated waste tire material. “Recycled-tire product” shall include, among other things, some nonincentive-eligible tire-derived products, for those purposes.
(v) A timeline for implementing the tire recycling incentive program and the program commencement date, which shall be no later than July 1, 2020.
(B) (i) Develop a tiered incentive payment structure with no more than three tiers. The tiers shall be designed to ensure that the maximum amount of California-generated waste tires is recycled.
(ii) During the first two years of the program, individual payment amounts for
projects in the tier with the highest incentive payments shall be no more than twice the individual payment amounts for projects in the tier with the second highest incentive payments. After the first two years of the program, the department may determine in a public workshop incentive payments for projects in the highest tier that are more than twice the individual payment amounts for those in the tier with the second highest incentive payments. This determination shall be based on market information, program performance, the potential of new products and different market segments, and the department’s goal of developing a long-term, sustainable, and diversified demand for tire-derived products. Payments for projects in the tier with the highest incentive payments shall account for no more than 25 percent of the total amount of moneys made available as incentive payments by the program for purposes other than pavement-related activities.
(iii) In developing the tiers, the department shall consider factors, including, but not limited to, the following:
(I) The quantity of waste tires that will be diverted from landfills.
(II) The incentive amount necessary for incentive-eligible tire products to effectively compete with nonrecycled alternatives.
(III) The existing and potential markets for the applicable incentive-eligible tire product.
(IV) The policy goal established pursuant to Section 42872.3.
(V) The market segments for waste tires.
(VI) The pricing structures necessary to increase the use of incentive-eligible tire products by market segment,
including pricing structures necessary to achieve the goal established pursuant to Section 42872.3.
(VII) The development of long-term, sustainable, and diversified market demand for California tire-derived products.
(iv) The department shall conduct a waste tire market evaluation to inform the development of the tiers and shall discuss the findings at the public workshop required pursuant to paragraph (1).
(3) The department shall consider the amount of moneys made available for incentive payments pursuant to subdivision (l) and, in the biennial update of the plan following January 1, 2019, shall reduce the amount of moneys expended for waste tire market development grants pursuant to the five-year plan described in Section 42885.5, from the amount that was authorized for such grants as of January 1, 2019, as it
deems appropriate. All other tire program activities that are not related to market development grants shall continue as described in the five-year plan.
(i) The department shall collect data from recipients of incentive payments to be released annually in the California Waste Tire Market Report.
(1) Data shall be aggregated to determine the total amount of money paid for each category of incentive-eligible tire products listed in subparagraphs (A) to (L), inclusive, of paragraph (1) of subdivision (g) and how many tires, or passenger tire equivalents as defined in subdivision (b) of Section 42961.5, were recycled. The department shall use the data specified in this paragraph for purposes of the evaluation required pursuant to subdivision (j).
(2) The department shall include in the California Waste Tire Market
Report the annual recycling rate, the number of tires, or passenger tire equivalents, as defined in subdivision (b) of Section 42961.5, that were recycled in that year and, to the extent the information is available, the number of tires or passenger tire equivalents of the nonincentive-eligible tire-derived products considered recycled-tire products pursuant to clause (iv) of subparagraph (A) of paragraph (2) of subdivision (h).
(3) The report shall also include the number of tires recycled by the Department of Transportation and, to the extent the information is available, an estimate of the recycling rate of waste tire material recycled by other state and local agencies and by the private sector, as part of the overall recycling rate.
(4) The report shall also analyze the use of incentive payments by the public and private entities that receive incentive payments and shall
analyze whether the minimum percentage of the total annual value of incentive payments made available pursuant to paragraph (2) of subdivision (e) should be modified in statute to maximize tire recycling.
(j) As part of the biennial update of the five-year plan required pursuant to Section 42885.5, the department shall evaluate the tire recycling incentive program established pursuant to subdivision (b) in a public forum and propose changes accordingly. Consistent with this chapter, the department may make changes to the tire program, but no more frequently than annually and only after holding a public workshop.
(1) The evaluation required pursuant to this subdivision shall include, but is not limited to, the following elements:
(A) The recycling rate of California-generated waste tire material, including waste tire
material recycled through funding pursuant to the tire recycling incentive program, and, to the extent the information is available, an estimate of the recycling rate of waste tire material recycled by other state and local agencies and the private sector.
(B) The amount of California-generated waste tire material entering each market segment.
(C) The amount of waste tire material recycled through expenditures authorized by this chapter.
(2) Based on the findings from the evaluation required pursuant to this subdivision, the department shall reevaluate and prioritize funding for the categories of incentive-eligible tire products that recycle the most waste tires.
(k) For purposes of this section, recipients of incentive payments shall meet specified
criteria, as established by the department, that are consistent with the provisions of this article.
(l) For purposes of this section, the department, upon appropriation by the Legislature, shall annually make available an allocation for incentive payments that is not less than 75 percent of the projected California tire fee revenue for that fiscal year at the time of the enactment of the annual Budget Act. If the department finds that actual California tire fee revenue falls short of projections, the department may reduce this allocation to the extent it is unexpended before the end of the fiscal year.
(m) Nothing in this section is intended to limit the use of waste tire products that are not incentive-eligible tire products.
(n) It is the intent of the Legislature that this section encourage activities and
expenditures in addition to those under the tire program, other than activities associated with market development grants. Implementation of the tire recycling incentive program shall not result in reduced expenditures for other tire program activities that are not associated with market development grants.