HF5129

Purpose

• Establish a discarded tire product stewardship program in Minnesota that is funded and operated by tire producers. The goal is to create a statewide system for collecting and recycling discarded tires, financed through producer fees, with the program administered through a tire stewardship organization and overseen by the state commissioner.

Key Concepts and Entities

• Tire stewardship plan: A plan describing how tires will be collected, transported, recycled, and promoted, submitted to and approved by the commissioner.
• Tire stewardship organization: An organization created by one or more tire producers that designs, submits, and runs the tire stewardship plan.
• Producer: The tire seller or brand owner responsible for compliance, defined by specific criteria (brand holder, importer, or retailer depending on circumstances).
• Covered entity: Any person or place that has a discarded tire (e.g., retailers, auto dealers, fleets, collection sites).
• Collection system: The statewide network of sites and entities that collect discarded tires for recycling or reuse.
• Recycling: The process by which discarded tires are transformed into new materials or products, including use as fuel or fuel additives.
• Public education: Outreach to inform the public about tire recycling and the program.
• Administrative fee: A yearly fee paid by the tire stewardship organization to the state to cover administration and enforcement costs.
• Tire stewardship account: A special revenue fund account in which administrative fees are kept and used to administer the program.

What the Bill Requires (Main Provisions)

• Participation to sell: Starting January 1, 2027, no one may sell or offer for sale a tire in Minnesota unless the tire's producer participates in an approved tire stewardship plan.
• Program minimums: The tire stewardship program must establish a statewide collection system, allow free disposal for any discarded tire at program sites, ensure tires are collected and recycled, ensure all collected tires are resold or recycled, provide suitable storage, promote the program, and help develop markets for recycled tires. Financing must come solely from producer fees.
• Plan content requirements: Each plan must identify participating producers, explain financing, set initial performance goals for the first two years, describe how to maximize existing services and infrastructure, identify collection/recycling facilities, describe promotion of recycling into higher-value products, and outline outreach efforts.
• Financing structure: The program must be financed by producer fees that cover all costs of developing, implementing, and operating the plan, while maintaining a reserve to operate for at least six months.
• Administrative oversight: The commissioner will set an annual administrative fee to reimburse agency costs for administering and enforcing the section. Fees must be paid by the stewardship organization by specified dates and deposited into the tire stewardship account. A true-up process reconciles costs and fees each year.
• Public and consumer costs: No user fees or charges may be imposed on the public, businesses, or non-producers to fund the program.
• Plan review and approval: The commissioner must post plans for public comment, decide on approval within 90 days of receipt, and provide written reasons if disapproved. Plans may be revised and resubmitted, with the commissioner having a defined timeline for review. If necessary, the commissioner may modify plans to meet requirements. Full implementation of any commissioner-modified plan must occur within 120 days.
• Plan amendments and performance goals: Any changes to the plan require approval. Two years after implementation and every three years after, the stewardship organization must submit performance goals for the next three years.
• Annual reporting: Beginning March 1, 2028 and annually thereafter, the stewardship organization must submit a detailed annual report including: methods for collecting and recycling by region and entity, weights of tires collected and sold, disposition methods, comparison to performance goals, samples of consumer educational materials, and an evaluation of outreach effectiveness. The commissioner will post the report publicly.
• Audits: Two years after program implementation and every three years thereafter (or upon request), the stewardship organization must arrange an independent audit of finances and program data. Trade secret information is protected.
• Records: The stewardship organization must keep all related records for at least three years.
• Legal protections: A stewardship organization is immune from liability under certain state laws related to antitrust, restraint of trade, unfair trade practices, and other regulation of trade or commerce to the extent necessary to plan and operate the collection and recycling system.
• Funding and administration: An account (tire stewardship account) is created in the state’s special revenue fund to hold administrative fees and to fund administration and enforcement of the program.

Timeline and Key Dates

• January 1, 2027: Start of prohibition on selling tires unless producers participate in an approved tire stewardship plan.
• By 2027: Commissioner sets and funds the administrative fee; payments due by July 1, 2027, and annually thereafter.
• March 1, 2028: First stated annual report due, with subsequent reports each March 1.

Impact on Existing Law

• Introduction of an extended producer responsibility approach for tires, shifting financing and responsibility for end-of-life tires from the public sector to tire producers.
• Creation of a formal, state-approved framework for tire collection, recycling, and education, with oversight by the commissioner and annual reporting requirements.
• Establishment of new administrative, auditing, and recordkeeping requirements for producers and their tire stewardship organizations.
• Allocation of funds through a dedicated state account to support program administration and enforcement.

Potential Implications

• Producers will bear the costs of tire collection and recycling through fees, potentially increasing the price of tires to consumers if costs are passed along.
• Public access to free tire recycling through a statewide network could improve tire disposal and environmental outcomes.
• The program aims to develop markets for recycled tires and higher-value uses, potentially expanding recycling industries in Minnesota.
• Public transparency and accountability through annual reports and audits are emphasized.

Implementation Considerations

• The success depends on participation by tire producers and effectiveness of the collection network in all regions.
• Achieving the initial two-year performance goals will be critical for establishing program credibility and long-term sustainability.
• The timeline requires rapid development of plans, funding mechanisms, and public communication to ensure smooth implementation by 2027.

Significant Changes to Law

• Repeats and codifies a statewide, producer-funded tire stewardship program into Minnesota Statutes.
• Introduces mandatory participation for producers to sell tires in Minnesota.
• Sets up a formal governance and oversight structure (stewardship organization, plan approval, annual reporting, audits).
• Establishes a dedicated financing and accounting framework (producer fees, administrative fees, tire stewardship account).
• Provides liability protections for program conduct and outlines strict no-cost-to-public funding rules.

Relevant Terms - tire stewardship plan - tire stewardship organization - producer - collection system - covered entity - discarded tire - recycling - administrative fee - producer fees - no user fees - plan approval - performance goals - public education - higher-value products - tire stewardship account - special revenue fund - annual report - audit - records - antitrust immunity - trueup - free disposal - facilities - disposal and reuse - environmental benefits - market development