(No ) (Approved July 12, 2011) AN ACT

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1 (H. B. 3313) (No ) (Approved July 12, 2011) AN ACT To amend Sections 2, 3, 4, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20; repeal Sections 6 and 7; add new Sections 5 and 6; and renumber Section 5 as Section 7 of Act No. 41 of July 22, 2009, as amended, known as the Puerto Rico Proper Scrap Tire Management Act, as amended, for the purposes of updating said Act and conforming it to tire management realities in Puerto Rico; and for other related purposes. STATEMENT OF MOTIVES Proper scrap tire management in Puerto Rico is an issue that affects all Puerto Ricans. Without a doubt, several efforts have been undertaken to deal with this issue, but the truth is that such efforts have not been successful. It is necessary to understand that we cannot pretend to solve a situation once and for all by employing the same methods we have always used and those we have grown accustomed to. For such purposes, Act No. 41 of July 22, 2009, as amended, known as the Puerto Rico Proper Scrap Tire Management Act, was approved. According to Act No. 156 of October 28, 2010, after the approval of Act No. 41, supra, the results of the work performed have revealed that certain Sections of Act No. 41, supra, need to be amended to render it clearer and more efficient regarding the proper scrap tire management practice. Among the most significant changes worth noting is that the Environmental Quality Board shall be the agency responsible for coordinating the implementation of this Act in accordance with Act No. 416 of September 22, 2004, as amended, known as the Environmental Public Policy Act, and Act No. 70 of September 18, 1992, as amended, known as the Puerto Rico Solid Waste Reduction and

2 Recycling Act. We believe that said agency is capable of successfully enforcing the mechanisms established in Act No. 41, supra, in regards to not only the tire management process, but also the Proper Scrap Tire Management Fund oversight process. The Legislative Assembly is outraged to learn of the laxity with which the revenues collected through Act No. 171 of August 31, 1996, as amended, have been decimated. Furthermore, it must be stressed that the attainment of free competition in the scrap tire transportation, processing, and recycling markets in Puerto Rico is a matter of pressing public interest. Moreover, the dependence of some sectors involved in this industry on the Government must be reduced, even more so in times of financial austerity. Bearing these goals in mind, the payment schedule for the different components of the tire management process chain has been revised. Keeping the information related to the end-use of scrap tires up to date is also of utmost importance. In doing so, we shall promote the most efficient way of using available resources in accordance with the public policy of reducing the volume of solid waste that is finally disposed of in authorized solid waste disposal facilities by employing alternatives such as recycling and/or using it as raw material that has an economic value within the market. In this manner, we shall promote the economic development of Puerto Rico by identifying markets with actual potential for these products. BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF PUERTO RICO: Section 1.- Section 2 of Act No. 41 of July 22, 2009, as amended, is hereby amended to read as follows: Section 2.- Definitions The following words or terms shall have the meaning stated below whenever they are used or referred to in this Act, except when the context clearly indicates otherwise:

3 A. Scrap Tire Warehouseperson - A person who collects and stores scrap tires, including tire sellers that, in turn, keep and store scrap tires within their facilities. B. Authority - Means the Solid Waste Authority created under Act No. 70 of June 23, 1978, as amended. C. Bank - Means the Government Development Bank created under Act No. 17 of September 23, 1948, as amended. D. Fee - Means the Scrap Tire Management and Disposal Fee imposed on all tires, whether they are manufactured in Puerto Rico or imported new or used. E. Crumb Rubber - It is the tire without processed metal measuring a quarter of an inch (1/4 ) or less. Usable as intermediate product or raw material for asphalt, rubber based end products, and children s playground surface, among other purposes. F. Tire Chips - It is processed tire pieces measuring more than a quarter of an inch (1/4 ), but less than three inches (3 ). It may be used as tire-derived fuel, concrete additive in nonstructural uses, and raw material for crumb rubber, among others. This is not an end-use product, but rather an intermediate product or raw material. G. Tire-derived Fuel - Any whole tires or tire chips which are used due to their heat generating value in industrial combustion processes. The use thereof as fuel is not deemed to be recycling. H. DACO (Spanish acronym) - Means the Department of Consumer s Affairs created under Act No. 5 of April 23, 1973, as amended. I. Tire Exporter - Any person who receives, collects, and/or handles scrap tires to be recycled or disposed of in facilities outside of Puerto Rico. Any person who exports scrap tires in this manner shall be considered a scrap tire

4 Exporter, and any person who exports processed or crumb tires shall be considered a processed scrap tire Exporter. J. Invoice - Is the document adopted or approved by the Board which shall be used to process payments for the work carried out by the processor, exporter, recycler, and end-use facility. Such document shall contain, among other things, the amount of scrap tires in pounds, whether whole or processed, as well as their origin. K. Fund - Is the Proper Scrap Tire Management Fund which is nourished from the money collected from the disposal fee imposed on tires, whether these tires are imported or manufactured in Puerto Rico. L. Emergency Fund - Is the Emergency Proper Scrap Tire Management Fund which is nourished from the interests earned by the Fund. M. Government of Puerto Rico Means the Government of Puerto Rico and the departments, agencies, instrumentalities, public corporations, and municipal governments thereof. N. Treasury Means the Department of the Treasury, one of the executive departments created under Section 6 in Article IV of the Constitution of Puerto Rico. O. Tire Importer - Any person who receives or imports new or used tires to Puerto Rico for the distribution, sale, use, or final disposal thereof. It includes any person who imports tires as part of a vehicle or motor vehicle. P. Scrap Tire Processing Facility or Scrap Tire Processor - The person authorized by the Board to carry out the partial, physical, or chemical transformation process of scrap tire matter through crushing, crumbling, or other means other than recycling.

5 Q. Scrap Tire Recycling Facility or Scrap Tire Recycler - The person authorized by the Board to intervene in the transformation process of scrap tire matter to produce new products. It shall not include power recovery facilities. R. End-Use Facility - A facility that, according to the activity conducted, may certify the end-use of tires, whether to be used as an energy source or for nonstructural uses. S. Certified Facility - A facility that shall use the received rubber as raw material or fuel, as certified by the exporter with attesting evidence. T. Advisory Board - Refers to the Fee and Rate Structure Advisory Board to which this Act delegates the power to provide advice on the revision of fees and rate structures. U. Board - Refers to the Environmental Quality Board, a government entity created by virtue of Act No. 416 of September 22, 2004, as amended. V. Tire Importer License - Is the authorization issued by the Board to every importer of new or used tires, which shall credit him/her as a bona fide entity to import tires and do business in Puerto Rico. W. Manufacturer License - The authorization issued by the Board to every tire manufacturer in Puerto Rico, which shall credit him/her as a bona fide entity to manufacture tires and do business in Puerto Rico. X. Manifest - The document adopted by the Board and produced by the scrap tire warehouseperson that shall state the origin, route, and final destination of the tires, as well as the number of scrap tires handled and transported to a processing, recycling, exporting, and/or final disposal facility, where the weight equivalence (pounds) of the scrap tires received is also added. Y. Tire Manufacturer - Is a person within the jurisdiction of the Government of Puerto Rico who is engaged in tire manufacturing.

6 Z. Tire - Any tire or rubber cushion, whether from natural or synthetic rubber, which is inflatable with air or other substance, thus allowing a vehicle or motor vehicle to move. It includes solid and rimless tires that are usually manufactured with a natural or synthetic rubber base and other combination of materials. AA. Scrap Tire - A tire which has lost its worth or use for its originally intended purpose, whether due to use, damage, or defect. BB. Public Work - Any construction, reconstruction, alteration, extension, or improvement work carried out by means of administration, private contract, or awarded to a subcontractor by the Government of Puerto Rico. CC. OGPe - Means the Permit Management Office, a government entity created under Act No. 161 of December 1, DD. Person - Any natural or juridical person, whether public or private, and any group thereof. EE. Permit - The approval issued by the Board, whether to operate as a scrap tire hauler, processor, recycler, exporter, or as an end-use service facility. FF. Retreading - The process whereby a worn out tire is fit with a new tread, thus outfitting it for use. This process shall not be deemed to be recycling. GG. Scrap Tire Hauler - Any person authorized by the Board to receive, pick up, and transport whole scrap tires to processing, recycling, export, or end-use facilities. HH. Nonstructural Use - The use of scrap tires or tire chips or crumb rubber as aggregate in engineering works such as: sidewalks, curbs, cemetery niches and graves, retaining and architectural walls, flower-boxes, sound-control and impact barriers, ground erosion control, boundary fences, construction of dikes for lagoons, among others, as accepted by the American Society for Testing and

7 Materials (ASTM). For said uses, the tire chips may be substituted with construction aggregates from the earth cortex. II. Vehicle - Any device in which or whereby any property is, or may be transported or carried on public thoroughfares, except for those used exclusively on railroad tracks. JJ. Motor Vehicle - Any self-propelled vehicle including, but not limited to, the following vehicles that use tires: 1. Tractors. 2. Steamrollers. 3. Backhoes. 4. Specialized road-construction equipment. 5. Deep-wells drilling equipment. 6. Vehicles that move on rails, by sea, or air. KK. Tire Salesperson - The person engaged in the sale of new or used tires. Section 2.- Section 3 of Act No. 41 of July 22, 2009, as amended, is hereby amended to read as follows: Section 3.- Declaration of Public Policy The public policy of the Government of Puerto Rico is geared toward reducing the volume of solid waste that is finally disposed of in authorized solid waste disposal facilities by employing alternatives such as recycling and/or using it as raw material that has an economic value within the market. As part of this policy, a program shall be implemented to control the final disposal of tires in authorized solid waste disposal facilities and promote the establishment of tire recovery, processing and recycling systems, thus returning their value to the economy of Puerto Rico through the manufacture of end products, and to use it as aggregate in nonstructural civil engineering projects or fuel. The attainment of free

8 competition in the scrap tire transportation, processing, recycling, export and enduse markets in Puerto Rico is of pressing public interest. This is the way to develop enough participants and demand in such markets with the goal of enabling them to absorb the supply of scrap tires in Puerto Rico. Likewise, the Government of Puerto Rico s demand for scrap tire products and works shall be promoted. It is hereby established that for the purpose of allocating the fee provided in Section 5 herein, and the stimuli and incentives that are created with the revenues generated by said fee, any scrap tire disposal activity proposing the use thereof as raw materials to produce new merchandise in the Island shall have priority and preference. The following is hereby provided for the implementation of the above stated public policy: A. To establish a proper scrap tire management program. B. To establish the Proper Scrap Tire Management Fund through the Scrap Tire Management and Disposal Fee. C. To promote the creation of scrap tire recycling industries in Puerto Rico through new market research and development. D. To promote the development of markets in Puerto Rico that use scrap tires by-products as raw material. E. To establish controls for the storage of scrap tires. F. To establish penalties for noncompliance with this Act. G. To foster the construction of public works by the Government of Puerto Rico with construction materials made from scrap tire by-products from Puerto Rico, insofar as said public works are financially feasible should the necessary technology exist. H. To ensure free competition in the scrap tire transportation, processing, recycling, export, and end-use markets in Puerto Rico.

9 Section 3.- Section 4 of Act No. 41 of July 22, 2009, as amended, is hereby amended to read as follows: Section 4.- Powers and Functions A. The Solid Waste Authority shall: 1. Develop an educational program to raise awareness among citizens of the importance of proper scrap tire disposal. 2. Carry out research and development procedures for the purpose of developing markets that use scrap tires as raw material. 3. Submit to the Board an annual report on scrap tire management in Puerto Rico and it shall make said report available to the public on its webpage. 4. Establish weight-based equivalencies for tires, tire chips, tirederived fuel, crumb rubber or any other natural or synthetic rubber scrap tire byproduct, if deemed necessary and in collaboration with the Board. 5. Conduct audits to ascertain the accuracy of the payment of the scrap tire management and disposal fee set forth in Section 5 of this Act. B. The Environmental Quality Board shall: 1. Be responsible for coordinating the implementation of this Act in accordance with Act. No. 416 of September 22, 2004, as amended, known as the Environmental Public Policy Act, and with Act No. 70 of September 18, 1992, as amended, known as the Puerto Rico Solid Waste Reduction and Recycling Act. 2. Be responsible for overseeing and enforcing the environmental protection provisions set forth in this Act, its Organic Act, and its Regulations, pursuant to the duties and authorities thereof. 3. Adopt or amend, if necessary, its regulations, so as to implement, administer, and enforce this Act including, but not limited to, the regulations necessary to issue licenses and permits, to establish the weighing system, and to impose fees, fines, and penalties.

10 4. Issue, modify, or revoke licenses and permits issued by virtue of this Act, and shall oversee, through inspections, the environmental compliance of the scrap tire handling facilities. 5. Require the posting of a bond or surety as a requirement for issuing permits to tire warehousepersons, processors, exporters, haulers, recyclers, and end-use facilities. Also, the Board shall determine the amount of the bond or surety based, among other criteria, on the environmental hazard posed by the activity in the event of abandonment, fire, noncompliance with the terms of the permit, or other environmental disaster. 6. Keep an updated record of warehousepersons, haulers, processors, exporters, and end-use facilities holding valid permits and authorizations. It is hereby provided that the Board shall share the information collected with the Solid Waste Authority. The information shall be available to the public on its webpage. 7. Have the power to establish and coordinate moratoria for compliance with the provisions set forth in this Act, in the event of an emergency situation. 8. Issue a tire importer or manufacturer license for the purpose of certifying that the license holder is authorized to manufacture or import tires into Puerto Rico as part of his/her business. A two thousand dollar ($2,000) license fee shall be paid every two (2) years, as of the date of issue. 9. Deny, suspend, or revoke the scrap tire importer, manufacturer, warehouseperson, hauler, processor, recycler, or end-use facility license or permit, as the case may be, to any person who fails to comply with the provisions of this Act and/or the regulations adopted thereunder. The denial, suspension, or revocation shall be governed in accordance with the provisions of Act No. 170 of

11 August 12, 1988, as amended, known as the Uniform Administrative Procedures Act. 10. Impose a ten percent (10%) late fee on the total amount of any insufficiency or deficiency regarding the payment of the scrap tire management and disposal fee set forth in Section 5 of this Act, as well as an annual ten percent (10%) interest rate on the total amount owed. 11. Adopt such transitory provisions as are necessary to achieve the objectives of this Act, through emergency regulations or administrative orders issued by means of a public notice. 12. Administer the Fund and the Emergency Fund. 13. Pay the invoices submitted by scrap tire processors, recyclers, exporters, and end-use facilities, according to the adopted rate regulations. 14. Retain funds payable to any processor, recycler, exporter or end-use facility by reason of noncompliance with the provisions of this Act and/or its regulations, as established in Section 17 herein. The retention procedure shall be governed in accordance with the provisions of the Uniform Administrative Procedures Act. 15. Conduct administrative actions as are necessary, including pre-intervention and auditing works on the invoices billed to the Fund. 16. Ensure that all the weighing systems of processors, recyclers, exporters, or end-use facilities are certified by DACO or the corresponding agency. 17. Designate inspectors to oversee compliance with the operating stage of this Act within the facilities of processors, exporters, and recyclers, as well as end-use facilities or any other that may be deemed necessary. 18. Develop and implement measures as are necessary to ensure the fiscal health of the Fund.

12 19. Transfer from the Fund the portion established through regulations to the Authority and to the Treasury every three (3) months, so they may discharge the duties imposed in this Act. 20. Provide the Authority with all the necessary information to draft an annual report on scrap tire management in Puerto Rico. 21. Determine, when issuing permits, the maximum number of scrap tires that can be stored by scrap tire warehousepersons, haulers, processors, recyclers, exporters, and end-use facilities. 22. Freeze funds corresponding to processors, recyclers, exporters, and end-use facilities due to permit violations. 23. Revoke permits and/or impose fines on scrap tire haulers, warehousepersons, processors, recyclers, exporters, and end-use facilities if found in violation of said permits. 24. The Board shall prescribe by regulations: a. the amount to be paid for manufactured or imported tires, whether they be new or used, and all tires that enter Puerto Rico as part of a new or used vehicle or motor vehicle. b. the rules that shall regulate the storage of tires by scrap tire warehousepersons, processors, recyclers, and end-use facilities, and the criteria for granting dispensations with regards to this matter. c. the method and term to pay the corresponding fees to processors, recyclers, exporters, and end-use facilities according to the stages completed. d. the method to be followed in the event that the weighing system breaks down, the term within which it shall be repaired.

13 e. the necessary regulations to refund or credit the total amount paid on account of fees for exported tires, to the importers or manufacturers that export some or all of their stock. f. any measures or mechanisms necessary to implement this Act. C. The Municipalities shall: 1. In coordination with the Board, control and oversee that the requirements set forth in this Act are met by any person who stores scrap tires. 2. Prepare a list of the tire warehousepersons within their territorial limits and submit it to the Board within six (6) months from the approval of this Act, and subsequently every six (6) months. 3. Coordinate with other municipalities, with scrap tire haulers, as well as with processors, recyclers, exporters, or end-use facilities for the management and disposal of scrap tires outside of their territorial limits, pursuant to the provisions of this Act. 4. Approve ordinances, pursuant to the provisions of this Act, to make the development, implementation, and compliance of tire management and disposal activities feasible. However, the Board shall be consulted as to any ordinance related to scrap tire management and disposal or any other matter relative to this Act to ensure uniformity in the implementation of this Act, its public policy and the free competition in this industry. The Municipal Legislative Assemblies shall submit the ordinance bills for the consideration by the Board, which shall issue any comments with respect thereto within thirty (30) working days as of the receipt thereof.

14 D. The Government Development Bank shall: 1. Be the trustee of an account in which the funds collected by the Treasury shall be deposited. This account shall be known as the Proper Scrap Tire Management Fund, created in Section 16 of this Act. 2. Assist the Board with the accounting and income projections of the Fund. 3. Develop and implement any measures as are necessary to ensure the fiscal health of the Fund. 4. Provide the Authority with all the necessary information to draft an annual report on the scrap tire management in Puerto Rico. E. The Department of the Treasury shall: 1. Employ the counting method when imported tires, whether they are new or used or manufactured in Puerto Rico, are selected for inspection, and shall determine the number of tires on imported motor vehicles. 2. Have access to the bills of lading, commercial invoices and, in the case of foreign imports, the form used by the United States Customs and Border Protection, which authorizes the release thereof. The foregoing shall be carried out for the purpose of reviewing the amounts corresponding to the collection of the scrap tire management and disposal fee set forth in Section 5 of this Act. 3. Collect from tire importers and manufacturers in Puerto Rico, the scrap tire management and disposal fee set forth in Section 5 of this Act, and shall deposit the same in the Fund. 4. Transfer the revenues of the Fund to the Bank to be deposited in the account created for such purpose. 5. Provide the Authority with all the necessary information to draft an annual report on scrap tire management in Puerto Rico.

15 Section 4.- A new Section 5 is hereby added to Act No. 41 of July 22, 2009, as amended, to read as follows: Section 5.- Scrap Tire Management and Disposal Fee A fee shall be imposed, per unit, on every imported tire, whether new or used or manufactured in Puerto Rico, based on its weight. Those imported tires which are part of any new or used vehicle or motor vehicle shall also be included. Solid tires with rims, tires weighting five hundred (500) pounds or more, and bicycle tires or similar tires are excluded from the provisions of this Act. The management and disposal fee for each tire, whether imported or manufactured in Puerto Rico, as well as the fee for used imported tires to be retreaded shall be similar. The amount collected on account of the scrap tire management and disposal fee, shall be covered into a special account in the Bank, which shall be known as the Proper Scrap Tire Management Fund, as created in Section 16 of this Act. The Board shall adopt the necessary regulations so as to fix and revise the aforementioned fee, which must be approved by the Advisory Board created in Section 6 of this Act. Such fee shall take effect as of the effective date of this Act; the necessary regulations are adopted; the requirement for registration in the Department of State of Puerto Rico is met; and the Department of the Treasury is granted a reasonable amount of time to implement it. The Board shall submit a copy of the rate regulations to the Legislative Assembly prior to registration thereof in the Department of State. The Board shall also be responsible for verifying the weight of at least twenty percent (20%) of the used tires shipments entering the jurisdiction of Puerto Rico during the first year of effectiveness of this Act to compare their weight to the size that is stated in the importer s documents. After the first year, the Board shall evaluate the results of this exercise and determine whether increasing the

16 frequency with which imported tires are weighed is a cost-effective and adequate control measure. Section 5.- A new Section 6 is hereby added to Act No. 41 of July 22, 2009, as amended, to read as follows: Section 6.- Fee and Rate Structure Advisory Board An Advisory Board is hereby created for the purpose of advising the Environmental Quality Board on the need to increase, decrease, or maintain the fee and/or fee schedule of scrap tires in Puerto Rico. This Advisory Board shall be composed of the highest ranking officials of the Authority, the Board, and the Bank, or any officials designated by them, and shall be chaired by a person designated by the Governor of Puerto Rico. This Advisory Board shall meet as many times as it deems it necessary and their final determinations shall be stated in a Resolution signed by each of its members. The fee and the fee schedule shall be reevaluated every four (4) years or at the request of any of the members of the Advisory Board. Section 6.- Section 5 of Act No. 41 of July 22, 2009, as amended, is hereby renumbered as Section 7 and amended to read as follows: Section 7.- Tire Importers and/or Manufacturers A. Shall obtain a license issued by the Board. B. Shall comply with the authorizations, permits, licenses, municipal licenses, and any other requirement from the corresponding Commonwealth, municipal, or Federal authorities. C. Shall pay the scrap tire management and disposal fee adopted by virtue of Section 6 of this Act, prior to the acquisition or sale of such tires, as the case may be. The fee shall be paid per unit imported or manufactured, but based on the weight thereof. The fee shall be paid in the case of tires brought in by the

17 importer to be later exported to a foreign country; however, the fee can be claimed later from the Board. D. May post a bond or surety in the Treasury in favor of said Department for the purpose of delaying the payment of the referred to fee. The total amount of the bond or surety, and the requirements to avail oneself of the deferred payments shall be determined by the Treasury through regulations. E. No ocean freight carrier may dispatch merchandise without the release authorization issued by the Treasury. Noncompliance with this provision shall result in the payment of the sum corresponding to the dispatched merchandise by the ocean freight carrier and the imposition of a fine. F. Whenever they import or manufacture tires weighing five hundred (500) pounds or more they shall: 1. Accept from consumers those tires of the same weight sold and discarded and shall be responsible for properly disposing of them pursuant to this Act. 2. Defray the costs of the proper management and disposal of such tires, pursuant to this Act. 3. Inform the retail salesperson about this legal provision and may coordinate with him/her the receipt of such tires. 4. Include the following information, in writing, in every sales invoice: Any tire weighing 500 pounds or more shall be managed and disposed of by the importer; therefore, at the time of their disposal, the tires may be returned to such company free of charge. Section 7.- Sections 6 and 7 of Act No. 41 of July 22, 2009, as amended, are hereby repealed.

18 Section 8.- Section 8 of Act No. 41 of July 22, 2009, as amended, is hereby amended to read as follows: Section 8.- Scrap Tire Warehousepersons and/or Salespersons A. Must be dully authorized by means of a permit issued by the Board. B. Shall not store scrap tires in excess of the amount authorized by the Board in the permit. C. Shall inform their customers, on or before sixty (60) days as of the approval of this Act, through a conspicuous and legible sign, that every tire that is removed from an automobile for replacement shall remain in their facilities without any additional cost, in order to be processed or disposed of according to this Act. D. Shall transfer scrap tires to a processor, recycler, exporter, or end-use facility using the services of duly authorized haulers. E. Shall comply with the following provisions: 1. fire prevention safety measures; 2. sanitary provisions to prevent the propagation of mosquitoes, including, but not limited to, pesticide spraying; 3. vector prevention provisions, which is why tire storage in green areas is prohibited; 4. measures to prevent water accumulation in tires; and 5. any other measures established by the Board. F. Shall be responsible for disposing of tires on a monthly basis or when the maximum number of scrap tires authorized by the Board in the permit has been stored, whichever comes first. G. Shall fill out a manifest on the approximate number of tires generated and transferred to the hauler, and shall provide the Board with said information in the manner and as frequent as the Board determines.

19 H. Shall post the bond established in Section 4B(5) of this Act as part of the permit requirements. [sic] I. Shall not charge their client for the subsequent transport and management of the scrap tires on behalf of the Fund and the fee established in this Act. J. Shall accept up to a maximum of four (4) scrap tires from any citizen that is not engaged in the hauling of scrap tires. Section 9.- Section 9 of Act No. 41 of July 22, 2009, as amended, is hereby amended to read as follows: Section 9.- Scrap Tire Haulers A. Must be dully authorized by means of a permit issued by the Board. B. Shall not store scrap tires in excess of the amount authorized by the Board in the permit. C. Shall transfer the scrap tires to the authorized processing, recycling, export, and end-use facilities which are compliant with all applicable laws and regulations. D. Shall ensure that the scrap tires are transported in a heavy truck or van, before and after delivering them to processing, recycling, export, or end-use facilities. E. Shall present their invoices to the person in charge of the scrap tire processing, recycling, export, or end-use facility to process the corresponding payment and they shall not receive payment from the Fund created in Section 16 of this Act. The payment for the hauler s service shall be governed by the supply and demand of this service market. F. Shall post the bond established in Section 4B(5) of this Act as part of their permit requirements.

20 G. A municipality may act as a hauler, provided that the requirements established by the Board are met. Section 10.- Section 10 of Act No. 41 of July 22, 2009, as amended, is hereby amended to read as follows: Section 10.- Scrap Tire Processing Facilities or Processors A. Shall request to the Authority a certificate of conformity stating that the proposed activity is consistent with the public policy of the Authority, before filing a permit application with OGPe and subsequently requesting an operation permit from the Board. The certificate of conformity shall be considered a preliminary approval for which the Authority performs a general evaluation of the project s elements. This certificate shall not be considered a final approval. B. Shall obtain the corresponding permits and shall meet all the requirements established in the laws and regulations of the Government of Puerto Rico and the Government of the United States, if applicable, pursuant to the provisions of this Act. Furthermore, it shall meet the bond or surety posting requirement as provided by Section 4B(5) of this Act. C. To obtain the aforementioned certificate from the Authority, the proponent shall submit the following information: 1. An application letter for the Certificate of Conformity signed by the owner or his/her authorized representative. 2. An explanatory memorial including, at least, the following requirements: a. Operating and rubber marketing plan with a description of the activities whereby the entire logistics pertaining to the processing, marketing, and exporting of scrap tires is explained in detail. The marketing plan shall include written agreements with end buyers and markets, through a letter of

21 intent certified by the end-use facility for the acquisition of rubber generated in such facility. b. In the event that a scrap tire processor engages in the export of his/her production, whether in whole or in part, he/she shall submit an alternative plan with another final consignee, in the event that the main final disposal facility closes down. c. Specify the physical location the processor facilities including the address, the land capacity, and the zoning classification of the area. d. Specify the approximate number of scrap tires to be processed on a daily basis, and the daily processing capacity of the equipment to be acquired. e. Proof of potential haulers who shall supply tires. f. The nature of the activity. g. The description of the process to receive tires in his/her facilities. h. The processing capacity of the equipment to be used. i. An inventory based on volume and weight, among others. j. The facility s business hours. k. The information of the proponent, including registration in the Department of State authorizing him/her to do business in Puerto Rico. In the case of an existing corporation or entity, it shall present a certificate of good standing. D. Shall have a copy of the permits required by the Government of Puerto Rico available for inspection at the time of starting its operations.

22 E. Shall accept and weigh, during its business hours and free of charge, all the scrap tire loads received in the facility from any hauler that has the corresponding permits from the Board and other agencies from the Government of Puerto Rico; provided, that it complies with the maximum allowed storage capacity and any other limitations and conditions established in the operation permits issued by the Board and other agencies of the Government of Puerto Rico. The initial and final weight of the trucks or containers shall be the basis to determine the net weight of the scrap tires to be processed. As an exception, and upon prior authorization, any other accurate measurement may be used to determine the initial weight, as approved by any other Commonwealth or Federal agency with regards to the hauling equipment used. F. Shall be responsible for using an electronic weighing system with a reliable record and control mechanism containing the data of the identity of each heavy truck or van, and with the capability to electronically transfer this information to the Board. Furthermore, the same shall follow a regular calibration program, as per the recommendations of the manufacturer of such system, and shall be certified by DACO or the corresponding agency. G. Shall sign and keep for five (5) years a copy of the manifests stating in detail the amount, in weight, of tires received from the hauler. They shall also verify that all the information contained in that document is correct and shall add the weight equivalent (in pounds) of said tires. H. Shall keep signed copies of the invoices for a term of not less than five (5) years as of the date of origin. I. Shall transfer the tires to a recycler or an end-use facility unless they also have an authorized processed scrap tire recycling, export, or end-use operation.

23 J. May not impose additional requirements to those already stated, which result more burdensome, in order to receive loads from haulers, except for public liability insurance. K. Shall not store an amount of scrap tires, or its weight equivalent, in excess of that provided by the Board in the permit. L. Shall submit the following information to the Board: 1. A quarterly report on the amount, in pounds, of scrap tires that have been received and processed in their facility with a copy of the haulers manifests. 2. Evidence of an updated safety plan that must be submitted annually or when required. 3. A list of the scrap tire haulers registered in said facility which shall be submitted annually or upon request. M. Shall submit the following information to the Authority: 1. A quarterly report on the amount, in pounds, of scrap tires received in the facilities, whether they be whole tires, tire chips, or crumb rubber. 2. A report or list of the persons or markets that use or acquire tire chips, crumb rubber, tire-derived fuel, as well as data on the use thereof, if applicable. This document shall be submitted annually or at the request of the entities concerned. N. Noncompliance by the processor with the permits issued by the Board, as well as with the terms of this Act or its regulations, shall entail the forfeiture, executed by the Board, of the bond or surety required by Section 4B(5) of this Act; provided, that the Board deems that the funds are necessary to offset the noncompliance of the processor with the permit.

24 Section 11.- Section 11 of Act No. 41 of July 22, 2009, as amended, is hereby amended to read as follows: Section 11.- Scrap Tire End-Use Facilities A. Shall request to the Authority a certificate of conformity stating that the proposed activity is consistent with the public policy of the Authority, prior to filing an application for permit with OGPe and subsequently applying for an operations permit issued by the Board. The Certificate of Conformity shall be considered a preliminary approval for which the Authority performs a general evaluation of the project s elements. This certificate shall not be considered a final approval. B. Shall obtain the corresponding permits and shall meet all the requirements established in the laws and regulations of the Government of Puerto Rico and the Government of the United States, if applicable, pursuant to the provisions of this Act. Furthermore, it shall meet the bond or surety posting requirements as provided by Section 4B(5) of this Act. C. To obtain the aforementioned certificate from the Authority, the proponent shall submit the following information: 1. An application letter for the Certificate of Conformity signed by the owner or his/her authorized representative. 2. An explanatory memorial including, at least, the following requirements: a. A plan whereby the nature and end-use facility activity shall be described in detail. b. The operating plan of the facility. c. Specify the physical location of the end-use facility including the address, the land capacity, and the zoning classification of the area.

25 d. Specify the approximate amount, in pounds, of scrap tires to be used on a daily basis, and the daily processing capacity of the equipment to be acquired. e. An inventory based on volume and weight, among others. f. An end-product marketing plan with written agreements from buyers and markets available to acquire the total amount of the production. g. The facility s business hours. h. State the name and street address of the suppliers of tires, whether they are whole, tire chips, or crumb rubber, needed by the company to conduct its main activity. i. The information of the proponent, including registration in the Department of State authorizing him/her to do business in Puerto Rico. In the case of an existing corporation or entity, it shall present a certificate of good standing. D. Shall have a copy of the permits required by the Commonwealth of Puerto Rico available for inspection at the time of starting its operations. E. Shall accept and weigh, during its business hours and free of charge, all of the tire loads received in the facility from any hauler that holds the corresponding permits from the Board and other agencies from the Government of Puerto Rico; provided, that the processor or processing facility complies with the allowed storage capacity, and any other limitations and conditions established in the operation permits issued by the Board and other agencies of the Government of Puerto Rico. The initial and final weight of the trucks or containers shall be the basis to determine the net weight of the scrap tires to be used. As an exception and upon prior authorization, any other accurate measurement may be used to

26 determine the initial weight, as approved by any other Commonwealth or Federal agency with regards to the hauling equipment used. F. Shall be responsible for using an electronic weighting system with a reliable record and control mechanism containing the data of the identity of each heavy truck or van, and with the capability to electronically transfer this information to the Board. Furthermore, the same shall follow a regular calibration program, as per the recommendations of the manufacturer of such system, and shall be certified by DACO or the corresponding agency. G. Shall sign and keep for five (5) years a copy of the manifests stating in detail the amount, in weight, of tires received from the hauler, in which they shall also include the weight equivalent (in pounds) of said tires, or from a processor, in which case the information has to be stated as amount of pounds received. They shall verify that all the information contained in that document is correct. H. Shall keep signed copies of the invoices for a term of not less than five (5) years as of the date of origin. I. Shall not store a number of scrap tires, or its weight equivalent, in excess of that provided by the Board in the permit. J. Shall submit the following information to the Board: 1. A quarterly report on the amount, in pounds, of tires that have been received and processed in the facility with a copy of the haulers manifests. 2. Evidence of an updated safety plan that must be submitted annually or when required. 3. A list of the scrap tire haulers and processors registered in said facility that shall be submitted annually or when required. K. Shall submit the following information to the Authority: 1. A quarterly report on the amount, in pounds, of scrap tires received in the facilities, whether they be tire chips, whole tires, or crumb rubber.

27 2. A report or list of the persons or markets that use or acquire the resulting product of the activity, as well as data on the use of the scrap tire by-product, if applicable. This document shall be submitted annually or more frequently, if required. L. Noncompliance by the end-use facility with the permits issued by the Board, as well as with the terms of this Act and its regulations, shall entail the forfeiture, executed by the Board, of the bond or surety required by Section 4B(5) of this Act; provided, that the Board deems that the funds are necessary to offset the noncompliance of the end-use facility with the permit. Section 12.- Section 12 of Act No. 41 of July 22, 2009, as amended, is hereby amended to read as follows: Section 12.- Scrap Tire Recycling Facility or Recyclers A. Shall request to the Authority a certificate of conformity stating that the proposed activity is consistent with the public policy of the Authority, prior to filing an application for permit with OGPe and subsequently applying for an operations permit issued by the Board. The Certificate of Conformity shall be considered a preliminary approval for which the Authority performs a general evaluation of the project s elements. This certificate shall not be considered a final approval. B. Shall obtain the corresponding permits and shall meet all the requirements established in the laws and regulations of the Government of Puerto Rico and the Government of the United States, if applicable, pursuant to the provisions of this Act. Furthermore, it shall meet the bond or surety posting requirement as provided by Section 4B(5) of this Act.

28 C. To obtain the aforementioned certificate from the Authority, the proponent shall submit the following information: 1. An application letter for the Certificate of Conformity signed by the owner or his/her authorized representative. 2. An explanatory memorial including, at least, the following requirements: a. A plan whereby the nature and recycling activity shall be described in detail. b. The operating plan of the facility. c. Specify the physical location of the facility including the address, the land capacity, and the zoning classification of the area. d. Specify the approximate amount, in pounds, of scrap tires to be recycled on a daily basis, and the daily processing capacity of the equipment to be acquired, if applicable. e. An inventory based on volume and weight, among others. f. An end-product marketing plan with the written agreement from buyers and markets available to acquire the total amount of the production. g. The facility s business hours. h. State the name and street address of the supplier or suppliers of tires, whether they are whole, tire chips, or crumb rubber, needed by the company to conduct its main activity. i. The information of the proponent, including registration in the Department of State authorizing him/her to do business in Puerto Rico. In the case of an existing corporation or entity, it shall present a certificate of good standing.

29 D. Shall have a copy of the permits required by the Government of Puerto Rico available for inspection at the time of starting its operations. E. Shall accept and weigh, during its business hours and free of charge, all of the tire loads received in the facility from any hauler that holds the corresponding permits from the Board and other agencies from the Government of Puerto Rico; provided, that they comply with maximum allowed storage capacity, and any other limitations and conditions established in the operation permits issued by the Board and other agencies of the Government of Puerto Rico. The initial and final weight of the trucks or containers shall be the basis to determine the net weight of the scrap tires to be used. As an exception, and upon prior authorization, any other accurate measurement may be used to determine the initial weight, as approved by any other Commonwealth or Federal agency with regards to the hauling equipment used. F. Shall be responsible for using an electronic weighting system with a reliable record and control mechanism containing the data of the identity of each heavy truck or van, and with the capability to electronically transfer this information to the Board. Furthermore, the same shall follow a regular calibration program, as per the recommendations of the manufacturer of such system, and shall be certified by DACO or the corresponding agency. G. Shall sign and keep for five (5) years a copy of the manifests stating in detail the amount, in weight, of tires received from the hauler or processor. They shall verify that all the information contained in such document is correct. H. Shall keep signed copies of the invoices for a term of not less than five (5) years as of the date of origin.

30 I. Shall submit the following information to the Board: 1. A quarterly report on the amount, in pounds, of tires that have been received and processed in the facility with a copy of the haulers manifests. 2. Evidence of an updated safety plan that must be submitted annually or when required. 3. A list of the scrap tire haulers and processors that supply the product and are registered in said facility shall be submitted annually or when required. J. Recyclers are hereby banned from imposing any additional requirement to those already stated, and which are more burdensome, in order to receive loads from haulers, except for public liability insurance. K. Shall submit the following information to the Authority: 1. A quarterly report on the amount, in pounds, of scrap tires received in the facilities, whether they be whole tires, tire chips, or crumb rubber. 2. Show evidence, annually or when required, that identifies end markets by means of executed agreements or letters of intent, if applicable. 3. A report or list, annually or when required, of the persons and markets that use the resulting product of the activity, as well as data on the use of the scrap tire by-product, if applicable. L. Shall not store a number of tires, or their equivalent in pounds, in excess of that provided by the Board in its permit. M. Noncompliance by the recycler with the permits issued by the Board, as well as with the terms of this Act and its regulations, shall entail the forfeiture, executed by the Board, of the bond or surety required by Section 4B(5) of this Act; provided, that the Board deems that the funds are necessary to offset the noncompliance of the recycler with the permit.

31 Section 13.- Section 13 of Act No. 41 of July 22, 2009, as amended, is hereby amended to read as follows: Section 13.- Tire Exporter (Scrap) A. Shall obtain the corresponding permits and shall meet all the requirements established in the laws and regulations of Government of Puerto Rico, and the Government of the United States, if applicable, and in accordance with this Act. Tire exporters shall also meet the bond or surety posting requirement as required in Section 4B(5) of this Act. B. Any person who requests a permit before the Board to export scrap tires must obtain the aforementioned certificate from the Authority for the proposed activity. This certificate shall state that the proposed activity is consistent with the public policy of the Authority. The Certificate of Conformity shall be considered a preliminary approval for which the Authority performs a general evaluation of the project s elements. This certifications shall not be considered a final approval. C. To obtain said certificate from the Authority, the proponent shall submit the following information: 1. An application letter for the Certificate signed by the owner or his/her authorized representative. 2. An explanatory memorial that meets, at least, the following requirements: a. Describing the steps, methods, and procedures for scrap tire collection in Puerto Rico and the export thereof. b. Specify the physical location of the export facilities including the address, the land capacity, and the zoning classification of the area. c. Describe the types of tires they intend to export.