1. 1 Consideration Of Approval Of The Report To The Legislature Regarding The Waste Tire Recycling Management Program Agenda Item 7 Committee Item C May 13, 2008

2. 2 Background Currently, 26% (11.4 million in 2006) of waste tires generated annually are not diverted into productive end uses. Currently, 26% (11.4 million in 2006) of waste tires generated annually are not diverted into productive end uses. Tire Fund has a large reserve. Tire Fund has a large reserve. The proposed report Options to Increase Waste Tire Diversion Rates: Report to the Legislature addresses these issues. The proposed report Options to Increase Waste Tire Diversion Rates: Report to the Legislature addresses these issues.

3. 3 Diversion Rates Current Diversion Rate:  74% in 2006 Projected Diversion Rate:  83% in 2010

4. 4 Fund Balance Current Fund Balance:  $42 Million Dollars in FY 2008/09* Projected Fund Balance:  $58 Million Dollars in FY 2009/10* *Before $4 Million Dollar transfer to ARB

5. 5 Option 1: Expand Public Education and Outreach on Tire Sustainability/Inflation To reduce amount of tires generated annually, staff suggests three ideas: Expanding current community ed campaign; Expanding current community ed campaign; Partner with ARB on outreach program; and Partner with ARB on outreach program; and Expand outreach to California-based trucking firms regarding retreading. Expand outreach to California-based trucking firms regarding retreading. Staff suggests $1-3 million/year for three years. Staff suggests $1-3 million/year for three years.

6. 6 Option 2: Establish New Equipment Loan Program New equipment loan program to provide appropriate low-interest loans, consistent with existing RMDZ Loan Program - Loans to businesses for new equipment with preference for TDA-related equipment. - Loans would be available anywhere in state. – Staff suggests $3-5 million/year for three years.

7. 7 Option 3: Increase Tire-Derived Aggregate (TDA)/Civil Engineering (CE) Efforts Increase level of support to contracts and interagency agreements that provide technical assistance and construction management; Increase level of support to contracts and interagency agreements that provide technical assistance and construction management; Research new applications; and Research new applications; and Implement new CE/TDA Application Grant Program. Implement new CE/TDA Application Grant Program. Staff suggests $5-7 million for first two years and $3-5 million for following two years. Also suggest revising PRC Section 42889.3 to require Cal- Trans to include in its annual report the number of CA generated waste tires used in its projects each year.

8. 8 Option 4: Refocus and Expand Rubberized Asphalt Concrete (RAC) Grant Programs Combine solicitation of RAC Grant Programs. Combine solicitation of RAC Grant Programs. Create several levels of funding within program. Create several levels of funding within program. RAC grant program would establish cooperative purchasing option for rural jurisdictions. RAC grant program would establish cooperative purchasing option for rural jurisdictions. Staff suggest $1-2 million/year for three years. Staff suggest $1-2 million/year for three years.

9. 9 Option 5: Expand TDP Grant Program This is a very popular program that is oversubscribed each year. Staff suggests providing an additional $1-3 million/year for three years.

10. 10 Other Considerations Continue to examine modifying the current tire storage requirements. Continue to examine modifying the current tire storage requirements. Suggest amending PRC Section 42889.4 to require ARB to conduct testing of emissions from facilities when tires are being incinerated and compare with emissions using other types of materials. Suggest amending PRC Section 42889.4 to require ARB to conduct testing of emissions from facilities when tires are being incinerated and compare with emissions using other types of materials.

11. 11 Summary of Potential Options and Costs OPTIONS Year 1 FY 09/10 Year 2 FY 10/11 Year 3 FY 11/12 Year 4 FY 12/13 1. Expanding Public Education and Outreach on Tire Sustainability $1-3M $0 2. Establish New Equipment Loan Program $3-5M $0 3. Expanded Civil Engineering/TDA Efforts $5-7M $3-5M 4. Refocus and Expand RAC Grants$1-2M $0 5. Expand or Shift TDP Grants$1-3M $0 TOTAL DOLLARS$11-20M $3-5M

12. 12 Implications for Fund and Fee Three scenarios using the midpoint funding of these ranges were created:  If all 5 options were implemented, then expending $48.5 million would have negative balance of $895,000 in FY 2014/15.  If fee was reduced by $0.25 beginning in 2011 and none of 5 options were implemented, Fund would have approximately $5.1 million remaining in FY 2014/15.  If all 5 options were implemented and fee reduced by $0.25 beginning in 2011, Fund would have negative balance of $38.4 million in FY 2014/15.

13. 13 Adoption of Report Staff request the Board approve the proposed report Options to Increase Waste Tire Diversion Rates: Report to the Legislature, Attachment 1, and Adopt Resolution Number 2008-89