Public Health, Welfare and Labor Committee - Senate and House

OK, members, if you could take your seats. Cher sees a quorum and we're gonna call this meeting to order, um, members, thank you for being here this morning. Um, we're gonna go quickly, uh, so welcome, um, without objection, I'm going to take our agenda out of order, um, Today just for various reasons, but, um, I want to go ahead and move to item E first, uh, This is a request for approval of the program to reduce or eliminate prior authorizations for healthcare provider pursuant to Act 575 of 2023. Uh, if they could come forward, please, and just, um, members. After our previous public health committee meeting, we we, meaning myself and, um, Representative Johnson had made some suggestions and to their credit, empower healthcare solutions, um, made those changes. I'll let them go through. Hi, Doctor Diner. It's so good to see you. And, um, anyway, we go way back. Um And so they've, they've made some changes, and so I'll go ahead and let them uh present them, and then we'll move forward with the actions that we need to take to get everything square. If you'll state your name for the record, you're, um, recognized. Good morning, Senator Irving committee members. I'm Mitch Morris, CEO of Empower Healthcare Solutions. I'm, uh, Brad Donner. I'm the chief medical. Hi, go ahead. Um, yes, uh, thank you, uh, Senator Irvin. So, uh, we were here, I think it was November 25th and we presented a version of our um prior authorization, transparency or gold card policy, um, we, to my recollection, we received two primary questions related to this policy, um, and so we made some adjustments and revisions to the policy we have previously submitted to address those questions and to try to provide full. clarity, uh, to those issues. And so if you have the document, I would, uh, direct you to those adjustments and those revisions that we made in section 3, the policy section beginning with paragraph 31 of the main questions we received, um, back during the prior committee meeting, um, was related to the differences in our policies or in our processes prior to, uh, the prior transparency law, um, Act 575 and how we're operating. today. So what we try to do is answer that question and, and, um, and show some, some. A level of detail to what has changed since that law was passed. So we provide a list of, um, A list of services that prior to 2023, we did manage through prior authorization and since the passage of the law and then subsequently the law taking effect, those services have been removed from our prior authorization review. Um, it's kind of a long list. I'm not, I wasn't planning to read all the way through that's OK. We've got it in front of us in an exhibit. You don't need to do the second question um was uh some clarity around what areas, what categories of service will continue to manage through prior authorization review, and that's the last section in that, uh, number 3 policy, um, area, uh, and so it's a shorter list, but it's basically the uh waiver services that are kind of the focus of the past program. Um, also elective inpatient admissions, emergency admissions do not require prior authorization, uh, elective surgical procedures. Psychiatric residential, skilled nursing, inpatient rehab, personal care services that are provided in the community or in the home. Uh, admission to an institution of mental disease, immediate care facility admissions and also pharmacy, uh, and prescription drug services. So that's the, um, and then the last thing I'll say real quick is that um, no change in section 4 procedure, but that is a more detailed list and breakout of services that are that we will consider gold cardted and not managed through prior authorization. I like that. I appreciate that approach. Are there, um, Doctor Dina, do you have anything additional? No? No, I think he's summarized our position uh being part of that team. Sure, and that's why I'm here to answer any questions that I can from a from a medical point of view and we appreciate, lots of expertise you have. Um, are there any questions from members of the committee? OK, Senator Dotson, hold on just a second. Are you logged in? Are you logged in? Oh, you're not doing anything. OK. Are there any other questions? Sorry. You're like keeps Coming up, no questions? All right, so members, what I will need is a motion to expunge the recommendation regarding the prior authorization proposal previously submitted by Empower Health Care Solutions. Do I have that motion? Motion and is there a second? Second, all those in favor say aye. And opposed, I have it, so we have, we expunged the recommendation that was previously made, and now I would need a motion to recommend approval of the updated prior authorization proposal presented by Empower Healthcare Solutions. Do I have a motion and a second. Second, all those in favor say aye and opposed. I just have it and we, uh, approve your recommendation. Thank you so much for being here and thank you for, um, addressing this. I think this is more clear and that's what we're trying to get to is, is just transparency, clarity, so everybody knows rules of engagement. Very good. Thank you very much. Thank you. Appreciate it. Y'all have a great time. Merry Christmas. All right, OK, we'll go back to, um, The top of the agenda. I do need a, um, And a motion to approve the minutes of the previous meeting. And second, all those in favor say aye and opposed as habit the meeting minutes will be approved. And now, um, item C if we'll go to presentation on reality check. All right, if you will please state your name for the record, we're happy to have you this morning. Uh, you'll just have to touch your button. There you go. My name's Ananda Martin from Healthy Connections over in the western side of the state I'm from the Northwest Arkansas and the River Valley area. My name is Thelma Moton and I'm with Choosing to Excel from Central Arkansas and part of the Delta. OK. Beth Prune with prevention education programs in Stuttgart, and I'm in the southeast area. Right, thank you all ladies from traveling from all corners, it looks like from the state of Arkansas to be here this morning. So appreciate, we had a member that requested, um, more information on this. So thank you for coming and, and providing this information and we'll just turn it over to you. Go, you may proceed. First I, I, we wanna go through and introduce our programs just briefly, um, healthy connections, like I said, is from the, the western side of the state, um, back in 1998, it was formed out of a coalition to prevent child abuse, uh, one of the findings that came from that coalition was, uh, the high rates of teen pregnancy. Um, and so an outreach program was, was started HCI was, was formed and, uh, received 501c3 from that point, uh, Healthy Connections has gone on to become a federally qualified health center. Uh, we have 15, uh, sites currently operating around the state, including some school-based health centers, um, and, and lots of community centers, but our programs specifically, um, For SRAE, it is, uh, sexual risk avoidance, uh, but, but mostly positive youth development, um. And we have been doing these types of programs since the early 2000s. And, um, healthy connections back in 2012, um, we received, uh, funding and formed a, uh, not a coalition, I apologize, a collaboration with these organizations. Uh, so there's, there's 4 groups. Um, that have worked together for the last 14 years. Um, healthy connections has acted as the, the fiscal agent for the, the collaboration, but we have, uh, in-school programs, um, in, in multiple schools that Provide education for, um, youth development. Everything from um. Specifically risk avoidance, but also, uh, job readiness and um. Positive Focus on, you know, preparing kids to be in the, the world after they graduate. Um, and getting them there. Director for Reality Check Incorporated. Um, we began as a community-based nonprofit back in 2003, so we're in, uh, we serve 7 counties across you pull your mic down just that's OK. Thank you. There you go. Yeah, just speak a little bit into the mic. That would be great. Sometimes some of us are hard of hearing. All right, we have, again, we got our nonprofit in 2003, so we've been providing positive youth development programs and risk avoidance programs, uh, since that time for about 21 years last year we served 7 counties, 7000 students in 32 schools across that area. We serve from 5th grade. puberty classes all the way to, um, 12th grade and we do some college classes for freshmen. We also have parent classes as well as you can see on, uh, the PowerPoint, we do, um, a positive youth development, which is our classroom programs and they are multi-level programs for students, so it's not just a one time a relationship intervention it is a year to year building, um, as they gain. Readiness and so everything that we do is age appropriate, uh, we start with a puberty program for 5th grade. We have a parent component for that, so the parents know exactly what their child is getting. We invite parents to come and spend that hour with their student while they're getting that program as well, um, as you can see 6th grade, we have a program specifically for that age group and we go on down through that 12th grade, um. Age, uh, we do what's called Project 479. That is a daily intervention with our alternative school and high risk students, we help them with learning self-regulation as the superintendent of the school where we have our largest project room located, said they give us their toughest young people and we give them back children that can actually function within a classroom and that are gonna be great adults for the. state of Arkansas, um, we also provide, we're a professional development provider for the state of Arkansas, so we help teachers with uh learning classroom, um, training as well. We have, uh, professional development in in a variety of areas and we have been a training center as well. So that as reality. Well, choosing to excel, we started our initiative and involvement in the community in 1991. Our goal was to provide character education, uh, and also with the goal of reducing teen and I a wet births in our area, um, the, the the desire right now is to continue to spread our programs throughout um Central Arkansas and the counties that we serve we're currently serving all of Faulkner County, Conway County, uh. County, White County, and we are in the Jefferson County area we're in Deshay we're also in um Britton County and we have a footprint across about 11 counties throughout the state we're serving anywhere between 9 and 10,000 students, um. Uh, per year, the primary way of us addressing our students it's through classroom presentations and in those classroom presentations we are providing students with information as to how to make healthy choices and for those who possibly need to start over how to do cessation and we're giving them skills as how to start over what we call in our classrooms we call that somewhat of an information dump we come in and we give kids information healthy information. But you guys know information without relationships, there's very little for relation relationships and behavioral changes and so we've developed an opportunity for young people once they've gone through our classroom presentations, young people have an opportunity to voluntarily, uh, meet with us on a weekly basis, um, to provide ongoing um intervention and also providing a platform where our young people's voices are heard. Our young people are. given an opportunity to share with us what are those things that you really want to discuss some of them really want to go into cessation and how do we start over? what is consent and what does that look like, uh, pornography, they really are interested in the things that sometimes we're not covering in the classroom, so we provide that through small groups on a weekly basis, um, and we do that also in our summer program because as you most, most some of you know that summertime and after. school are probably the most vulnerable time of the day and year for young people who are left alone without adult supervision and so we continue our intervention through the summer, um, so we're providing a 5 to 6 week intervention for young people to have a safe place, a safe adult supervised place uh in the summer months and in addition to uh what we're doing there, we're also uh providing education for kids somewhat like. Reality check in Northhurst, Arkansas with the Project 49, we have a specific intervention for young people who are stuck in places they don't belong in the alternative programs those kids are there they're set aside and sometimes sort of forgotten. These are some of the smartest, most, um. Intelligent young people, but they don't have the guidance that they need, so our goal there is to meet these young people where they are and we meet with them 2 or 3 times a week we've been able to graduate young people out of the alternative programs who have been in alternative some since kindergarten and we've been able to graduate them into a regular classroom setting so those are some of the things that we've provided over the 30+ years that we have been doing risk risk avoidance. education and character building. Um, Beth Prine, I'm the founder and director of prevention education programs, uh, founded that in 2007, but my beginning with uh this risk avoidance education began when I was hired by the Stuttgart School District in late 1999 to develop and implement, um, a countywide abstinence education program at that time, um, to combat the high rate of, uh, teen pregnancy in Arkansas County. At that time, the rate was in the 80s, um, so you're going to see rights in a little bit that Beth Brynt will share, but I write in Arkansas County was, um, in the 80s, um, and, um, so I am a registered nurse and um that was what the position was for. So I took that position and through various pots of funding, um, you know, nothing lasts forever, uh, started with tea funding, which was part of the welfare Reform Act and then some other, uh, federal and state grants, um, that program continued through the school district. Uh, for several years, it became apparent to me that it was not going to be able to continue that way. That is why I started the nonprofit in 2007. And so I've been my own entity, uh, since 2007, continuing this, uh, important work in Arkansas County, but also then expanding into Prairie County and Monroe County. So my program is smaller, um, in rural Arkansas, but I do serve those 3 counties, 5 school districts, 1200 plus students. every year. We have 5 different programs that we go into the schools and present. We start with 6th grade, um, and we have a 6th, 7th, 8th, and then a 2 high school programs that we do, um, they're very intensive, they range anywhere from 8 to 14 days, and we have an added component, uh, where we use infant simulators, um, to enhance our discussion on, uh, teen parenting and what that would look like, and they get a little, a little small glimpse of Of what, how their life would change if they were to become a teen parent, but the, the programs are very, um, holistic and talking about and I've mentioned a lot of these things, but, you know, goal setting, how to handle peer pressure, what healthy relationships look like, the dangers of pornography, some of the internet dangers. I mean, it's the, the various topics that we cover, um, are, are so much needed and um we're happy that we've been able to provide this education. ation Oh, I want to say one more thing. Uh, last year I piloted a program in a, uh, it's called rite of passage in Harrisburg. It's a a juvenile facility for girls, um, and we were able to, uh, do, um, our 14 day program there and, um, actually, I know that's a need. I know those facilities would like for other programs to be able to serve them, um, as well, and I, I just couldn't. It it just wasn't in the budget for us, but, uh, that was very well. received and that was in Poinsett County. Right. As um. As you all are aware, um, you may not have been aware that teen births in Arkansas as well as across the United States have been declining since the early 1990s, um, what we hear a lot in the state as well why is Arkansas one of the highest in the rates of teen birth, and we are, we are one of the highest in the rates of teen births in the United States, however, 76% of those teen births occur in teenage women ages. 18 and 19. Only 24% of those, uh, teen births occur in women ages 15 to 17 years old in the areas where we have been serving for the last 20 years because all of us have over a 20 year experience of, uh, serving in the areas where we're at, you can look at the teen birth rate is defined as births per 1000 in the United States. It is 14 bursts per 1000. The teen birth rate in Arkansas. has fallen from 51. To 25 per 1000 over the past decade. That's a 45% decrease and it's consistent with the decrease of 50% that has occurred across the United States. If you look at the organ organizations uh that are listed there PEP, which is Beth Prine's organization. You can see that percentage of decrease over that 20 years, um, and again that is a difficult area of our state, uh, HCI, which is Western. Arkansas takes in Polk County has a higher than the Arkansas rate of decrease and higher than the US rate of decrease at a 51.1% choosing to excel, again, that is the mid part of our state you can see the decrease for them in those areas are 50.5%, 50.7, 55.6, and 58.7, all higher than the decrease in the rate in the United States and then reality check Incorporated, our organization across the Northwest Arkansas and River Valley. You can look at those rates of decrease per county. They go anywhere the lowest is 47.2 on up to the highest of 70% decrease that has taken place in that 20 years. The programs that we use the programs that we do are effective because they're built on relationships and they're built on understanding the community that we live in. and the needs of those specific schools and the needs of that community we cannot use a one size fits all type of curriculum across this state because it will not work. It will not be effective, but we have been highly effective over the last 20 plus years now this is off our data from reality check, um, we were under evaluation through the Institute for Research and Evaluation, um. And the first this chart is regarding our end of the year performance measures, you can see in the remaining abstinent pre to post, how what the goal was the goal was 40% and we had over 80 almost uh 90 something% of students making that commitment and a year later. You can see that there was not a lot of regression in that, um. YRBS data, the Institute for Research and Evaluation compared our data to the Y Arkansas YRBS data, and you can see those I was uh in 2010 when we were under their evaluation 7th graders our state rate. For sexual interaction sexual activity by definition of vaginal intercourse, our rate for 7th graders was 19% of seventh graders saying they were engaged in sexual activity with the definition of vaginal intercourse and the schools that we had that had programs 6th grade, 5th grade, 6th grade, 7th grade we had only a 3 to a 5% sexual activity rate that's a paradigm shift. If you go in and one out of 20 of your friends in school are being sexually active, you feel like you gotta get on board because you're gonna be left behind, but when it becomes only 3 or 5 out of 100, and we talk about those things such as maturity. What does true maturity look like? How do you set boundaries? What are your future goals, then you've created that paradigm shift that leads to a decrease such as this, and so again those numbers um. While personally for me, I think that's still too high. Look at what has taken place when students are armed with truth and they're armed with um the how-tos so how do you set a boundary? What does that look like for any risk behavior. Again, this is our, uh, last year's evaluation, and you can still see um the A and B rating. You've got, uh, what is that do the math 80. 88% R rated the program. An A or B, which means it was life change. And a commitment. And they honored the information that's being given to them. What does that look like across the state, so again, having my numbers, I sat down and put this together. We all have similar stories and they could bring their numbers to you as well, but when you look at, we're in 7 counties, there's a total of 153 middle schools at the high schools in those counties we serve 51 last year we were able to only reach 32 of those schools, not because they didn't want us, but because we did not have the funding to reach all the schools that are in line. waiting on programs and we have schools who are in line waiting to have program, uh, the total number of students in those 7 counties is 36,351 we uh served a total of 6,929 of those students in those 7 counties. So if you think of our state rate of teen births as being 24.6 per 1000. Uh, those numbers in just those 7 counties would be a total of 894 teen births which would have cost our state $16,986,000 if you use RCI and our average decrease that has been proven over the last 20 years, um, that would have brought that number down to 186 teen births, not. 894. That is a cost savings to the state of $13,452,000. These programs again they're effective in reaching not just um. Decreasing that teen birth rate, but you look at the potential savings in the area of sexually transmitted diseases, mental health cost, um. Again, we as a collective, the PYDC as a collective have documented effectiveness, not just in the reduction of those teen pregnancies and STIs but also are creating savings to the state in the following areas youth mental health, addictive behaviors such as alcohol, drugs, vaping, juvenile delinquency and failure to thrive educationally. These savings to the state and these areas are incalculable at this time. Again, um. R Footprint across the state. is right up there, the yellow, that's RCI. The purple and the blue that is Miss Moten here in uh choosing to excel. Light blue on the end. That is prevention education and the green is the uh healthy connections. This is the footprint across the state. Without these four organizations. That's what you're positive youth development education will look like. Do y'all have questions with. We would be happy to answer any questions that you might have. Thank you so much, ladies for the presentation. So I think it's just so appropriate to have this discussion and talk um about teenage pregnancy, you know, those, what, what's the majority of those are going to be covered on Medicaid. Is that correct? Yes. OK, so, so when you talk about the savings that we're talking about, it's really a Medicaid savings, um, That, that you're, so this is about preventiveness and preventive education and and trying to prevent this from, from occurring. How old are you in 7th grade? Our 7th graders are 1212 years old. So 12 year olds that are having sexual intercourse. That is correct. So You know, I, I think in our discussion about everything maternal health that's happening in the state and the governor's, uh, focus on that. I, I know this is going to be a focus that we're gonna have, I think, in the next, in the upcoming session, which is appropriate, that we really have to look at this specifically, um, because, you know, when you're, when you're an 1819 year old or 12 year old having a baby, um, and, and my husband, you know, sadly has. You know, when he was in medical school and residency, I mean. You know, there are, these are babies having babies. And that poses a significant risk to both the baby and the mother, um, and there's so many complications that can occur from that because your body's just not, you know, you're not ready for that. So I just think it's an appropriate conversation to have at this time, um, I understand this information in your data, so this was reviewed and audited by the third party, the Institute. Is that correct? I think that's one thing I definitely wanted to point out is that this data has been verified through a third party audit review, which I very much appreciate that, um, it shows that it's proven that it's been successful over these years, so I applaud you absolutely applaud you for the successes that you've had. Clearly in my perspective, it should be in every single county and every single school district, um, across the state, and we should prioritize that. If we're really going to be thoughtful about our policies as it relates to. to, you know, getting our numbers better on outcomes, you got to start here, um, so I, I appreciate that y'all are here. I think it's an appropriate time to have this conversation. How are you funded? Right now we're not. Yes, where do you receive your funding from funding through the Arkansas Department of Health through an SRAE, that's sexual risk avoidance Education, federal pass-through grant that ended September 30th, we have not been funded since September 30th, but we are continuing to serve students. I know our organization will serve 3000 by the end of December. So in just another week. when we break for Christmas, we will have served 3000 without funding. Um, I know the other ladies have similar stories. This, this is the right thing to do and our students deserve it and our schools request it and we're gonna keep working until we can't do it any longer. Can I share 11 other quick story as far as a transition from, um, I've worked for Healthy Connections for 22 years. And when I first started, I was a home visitor. I worked with pregnant and parenting teens. So by the time they were referred to me, they were already, they were already in the situation that they were in. And so it was my job to try and help them through it the best that we could and we developed a case plan, um, and we worked with them through their entire pregnancy delivery and up through the 3rd year of, of life of their, of their baby. Um, one of the things, uh, that I, I started to recognize over the, the last couple of years that I was, I was working in that program is that the referrals that came to us were younger and younger kids. Um, in one month, I had 313, 313 year olds referred to me all in the same month, all pregnant. 2 were in the 7th grade, 1 was in the 6th grade. Um, I had to go do the, the intake for those, those students, which I was gearing myself up and, and mind you, I, I've, I've done this for 5 years and so I felt like I'd kind of heard just about anything I could hear from a teenager. I was wrong. Um, I, I did the intake for the 2 7th graders, which was hard enough. I go to do the intake for the, the little 6th grader. She was in English as a second language student, so that's the reason she was, it was in the 6th grade, but 13. Um And about halfway through, she asked me if she could ask a question. I said, you can ask me anything you want. And again, I'm thinking that she can't shock me. And she said, can you tell me what part of what me and my boyfriend did got me like this, and it broke my heart because she didn't have a clue. She didn't know how her body work, her her reproductive system. Um, she didn't, she said she knew that they had done things that maybe they probably shouldn't have, but she didn't know what part of that got her, she weighed 72 pounds, you guys. She was the size of a 4th grader and my first thought when I walked in is how is this child going to survive this, um, she did and she ended she had great family support. We worked with her through all of that and her child, uh, when he graduated kindergarten, she gradu waited her senior year. Wow. So, But that's what led me to, to start researching what can we do to give some education before they're referred to us and they're already, you know, we're working with them on the, on the other side. Yeah, and, and I mean, I could share a similar story, um, with some, you know, uh. Someone who had um, we were familiar with, but also had just similar questions, had no knowledge about, um, about what had happened or about her body and it was, it was quite remarkable that, that they just don't have, I mean, that's an amazing story. That's why I think it's critical that not only that we have good um. Good information, honest information and full and complete information going to our young people and that's, um, I'm very proud of the fact that in this collective, uh, we do that. We are, we are very, um, Careful and we're very well trained, yeah, and our instructors going in are certified and highly trained to address not only address those type of events, but to give full information for young people, but. Pregnancy And I just say It's not the worst thing. When you look at the young people for every one girl who gets teenage girl who gets pregnant, 4 will get a sexually transmitted disease and there are those young men who are suffering with that as well. There are young people who have no idea how to have a healthy relationship. Since COVID, um, and the different changes educationally, we have young people struggling with mental illness, um, and mental health issues that are also addressed when you talk about goal setting, boundary setting. What do you want your future to look like. And you have the potential to get there. So it's a broader, it's, you know, we, we, we get lost in that looking at the pregnancy, but what we're doing is we're helping young people set a solid foundation to grow into adulthood and knowing how to address all risk behaviors. All risk behaviors by the things that they learn through these programs. Yeah, I, I have a list of folks waiting to ask questions, so, um, but I thank you so much for saying that and bringing that up because you're absolutely 100% right. When you cannot establish boundaries for yourself. It leads you into a path of chaos and that come it manifests itself through your choices that you make and whether that's education choices, professional choices, relationship choices, you know, relationships with, with family or with or with anybody. It really does manifest itself in a, in a not positive way. And, and, and. And and it's not being addressed. And so that is so critical because for, especially for a young girl, self-worth and the way you view yourself is so critically important to your mental state of mind. And if you cannot set that boundary or understand why you are significant. Your body is significant. You should take it into, you should covet it, covet your body. And if you don't make, if you don't have somebody understand why and they just, you know, then it, then it just, it worsens and that affects your mind as you grow and develop and then you lead you into these abusive relationships, manipulative situations, you know, and so I have seen that so often play out and so you're so correct when you say. You've got to address it and set those boundaries at an early age and understand and covet your body as your body and understand what that will do to a young girl when they're just not ready for all of that because they're gonna wake up and go, you know, gosh, now I feel violated and I, I allowed it to happen, you know, and so, um, I, I just, we can't stress that enough, and I think that's what leads us down the path of all the different things that we see as it manifests itself. and poor choices, whether it be alcohol, drugs, or abusive relationships. So thank you so much for saying that, um, Senator Dotson. You're recognized. Thank you, Madam Chair. Um. If I could just ask on your, your, uh, your breakdown of the seven counties, the RCI, uh, that, that one, just went past it, um. Anyway, the, the, uh, total number of students in the 7 counties. It says there's 36,000 students, but you're only serving 6900 of those, so, um, obviously there's a, a large gap right there just within the seven counties that your organization is, is, uh, is able to reach and serve, um. Do we have any idea what the total number of students across the state are that we're not currently reaching with, with all four of your programs collectively and. I, I think I'd remember from previous discussions that you're. Combined serving around, is it 1300 to 15,000 a year right now 13,000. 130s so we're touching it a fraction of the total number of students in the state and you're making an incredibly positive impact just amongst the ones you're doing and bending the overall per county that you're touching, but there's a lot of counties that you're not touching and a lot of schools even within, like if you're only reaching 32 schools within out of. the 153 schools, there's a lot that are not. What would be the number one thing that we. As a state could do to impact and and get this type of thing in front of all the students in the state so that we're really addressing the issue collectively. It takes funding. to go across the state. Um, we, because of the level of experience that we have, the years that we've been doing this, we have a, we've sat down many times and said, what would it look like to go across the state? What would it take? And we have a very concise plan, um, again, our footprint is, if you notice that map spreads across the state and it would not be difficult to move into and provide programming across our state. One thing about it when you have a good effective program those kids talk. That's why we can go into a school where we've never been and the kids go, oh. We know who you are and we know what you're here to talk to us about. I learned it from my cousin. And they'll share things, you know, and again, good truth given in an effective manner spreads, and so it would be easy for us to spread across the state. Would you like to say something to that programs and the schools where we are currently serving when teachers are moving and they're transferring across the state, they request us when they move, for instance, we were in For City and we are covering for City High School in For City Middle School. Well, a couple of those. Coaches moved into the Pine Bluff area and as soon as I got there, they requested through their principal, we need this program here so word travels um when you're doing good work, the other thing I want to point out is when we're dealing with teen and out of weed births STDs, um, sex trafficking, you're perpetuating a cycle of poverty as well. And so what we are wanting to do is to eliminate some of the poverty and the generational things that go uh one of the young people in one of the areas that we were serving here in the Little Rock area, um, we were talking about that these are. Decisions that you don't have to make and we were, you know, it's not enough to tell a young person what not to do it's important to tell them what they can do and then show them how to do it and giving them skills and one young lady said, so you mean I don't have to be sexually active and that's we said absolutely not she said well that's all I've ever known, is my mom, my aunt, that's all I know. And so we give kids an opportunity to see their possibilities out here. There are other ways for you to express affection. other than just following the pattern that's set before you, so it's so much broader than just not getting pregnant. We're showing those kids those internal assets and those possibilities for them to get them out of places they're stuck and a lot of our families don't know how to guide their kids out of those places and so we're giving not only information for the young people we're also empowering parents to as to how to encourage their kids to start over or how not to uh. You know, some moms say, you know, how do I, how do I tell my daughter not to do what I've done. And what my response to that is it's a sign of maturity when you want more for your child than you had, so it removes that. Shame or guilt like I can't tell my daughter no that is a sign of maturity that you want more for your son or daughter then you so you know we're giving them some tools as to how they can help educate and come alongside their young people, uh, one of the if I might just jump in there, um. With regards to the slide that we have up here, um, it says that you serve 51 schools, but currently are serving 32, so you have 19 on a waiting list, or how many, how many schools, I guess it might be more than 51, um, how, how many are calling you and how long is that waiting list that you're just, you, you turn them away and you're not able to serve them right now. We stopped soliciting schools in 2010 and um schools get on the calendar. By them contacting us, we never contact a school and asked to come in and do program. So all the schools that we serve are schools that call us directly and say, please put us on the on your calendar when our calendar is full, we cannot take any more schools because we do not have the funds to hire more instructors. I could do as many schools as I can hire instructors for, so this is strictly a funding issue, the lack of the not being able to grow forward is because there hasn't been the funding to go forward. And we, um, pinch pennies like you've never seen pennies be pinched before. It's very few organizations in the state that can say they serve 13,0896 students for $711,000 that has been extreme penny pinching at its best again. We have schools waiting that for us to be able to go into some of the larger schools we have uh our area, a lot of our schools are so large it takes, uh, sometimes 4 and 5 instructors to cover that school, um, and they all want their program at, at the same time. Now we have again, we've done a, a lot of, I have a program manager that manages the calendar. And he keeps us sane, but it is creative calendar, uh, fixing just to make sure that we can get as many schools in as we can each year and I think one of the most heartbreaking things that I have with me from Critton County in the Earl school area. It is so difficult, we're there and then money is gone and we have to cut the program. We get a little bit of funding, we come back and and that cycle is broken and if we could just have funding where we can be consistent so we can follow our young people back and you guys go from 5th grade. We start at 7th grade and our goal is to mature with our kids from 7th through 12th and not just with the classroom but also matching them with what we call you guys call them mentors, we call them encouragers to walk alongside these young people once they receive information so when we can stay consistent in areas like Earl and Critton County, which is one of the hardest hit counties in our state. These kids are smart. They are brilliant, but they need someone to walk alongside them to say you matter and we're gonna be consistent with you. Thank you. I've got a bunch of questions, so I'll just ask you, because we've got to move to the next thing. You'll if you keep your answers brief, that would be great. Um, uh, Representative Rose, you're recognized. Thank you, Madam Chair. Uh, just a couple of quick questions. Uh, I was curious, where do you guys get your curriculum from for your, your small groups and your classroom discussions and those kinds of things curriculums are evidence based and evidence informed um we through the federal government, um, years past, um, there was a requirement that whatever you're teaching must have, um, clarification and be evidence based and um we utilize several depending on the counties. And the schools that we serve, we use choosing the best real essentials um yes you can, those are the curriculums that we use. Follow up. Uh, would it be possible to get just a list of those. I wasn't able to write those down as, and the, uh, the other question I had is if, if somebody wanted to see those curriculum, uh, curricula. I can't remember the, the plural of one curriculum, uh, how would we go about doing that? Just, just a request? A a request and we can also give you the links where you can just go directly to the publisher and get to see each one of those, yes, Madam Chair, I'd like to request we get that list and then maybe those, those connection points. Thank you for your work. Thank you for your time. Thank you, uh, Representative McGee, I mean, yes, McGee. Thank you. Thank you, Madam Chair. So, we've talked some about funding. How are you presently funded? What do you do to get the money that you get now, the $700,000 a year and, and, and how, what's happened with, I know I've, with Malton, I've had several conversations over the years where around September, they just ran out of funds and this year it was something about You were coming up on a 7 year cycle or something and everybody had to reapply and so how, how does all that work? Every 7 years we've the 711,000, um, we've been funded under, uh, as a pass-through of federal funds through the Arkansas Department of Health and because the procurement laws, every 7 years, it, it has to be, um, It has to go out as a competitive bid. And so this was our 7th year, um, the funding was given to another organization and so as of uh October 1st, that, that's when the funding expired, uh, September 30th was the last day, but for the last 14 years, we've been funded under the Arkansas Department of Health. follow up OK So is that a competitive process? You said it was given to another organization? OK, so then essentially you guys are. Not funded. Not at all, at all. OK. Thank you, Madam Chair. Thank you, Representative at Wooldridge, are you out? OK. Uh, Representative Beatty. Thank you, Madam Chair. Uh, my question is going back on some of the statistics that you provided on the, um, 18 to 19 year old, uh, teen pregnancy, uh. Where is that information married, unmarried, planned, unplanned pregnancy or is it just in general teens 18 to 19. In general, teens 18 to 19. Uh, do you know what, uh, rate Arkansas has as far as, uh, child marriage is that rate higher than the national average or I have not been able to find that information available in the state at all. And I have searched. Well, I, I did a quick search. on that and, and found that information. I did, and it, and, and it, it's out there. We have one of the higher, I guess. Teen marriage or child marriage, um, in, in the nation, I think Nebraska leads that, but we're in, in, in the top 5 in that category. Uh, so I, I think that correlates in with, with that number there. My, my concern is more the plan, unplanned, and the educational side of, of the process, uh, another question that I would have for you is you, you're in the schools, you're dealing with and the, the, the lady on the end, I'm sorry, I didn't get the name, um, mentioned. dealing with, with, with actually. The the teen mothers, the, the, the, the pregnant, um, students. What type of education do you provide for those students or do you direct them to someone for the maternal health, education, and, uh, and things that will assist them in making this process easier, more understandable. What, what type? I, I didn't see that mention. I know this focused more on prevention, um, but if you're gonna be on the prevention side, you're definitely gonna see the, the other side too. Um, many of our, many of our organizations also have, um, home visiting programs for young moms. Um, that's not part of this particular topic, as you said, but, um, 3 out of 4 of our organizations have go on to have a home visiting program for young moms. So they're enrolled prenatally, and they're served until their child's 3 years old. Um, it's very intensive. Um, it's a, a healthy families America model, uh, which is under the Prevent Child Abuse America uh entity. And, and just to follow up on that, is that funded through the same funding mechanism that was funded before is there funding stream is a separate funding stream uh called McVe and maternal infant, early childhood, I'm visiting and then just 11 final question if, if the chair will allow. Yes. Uh. I, I guess on page Maybe 3 of your organizational structure and programs. Uh, under the project partner supervised by Thelma, is it Moton? Yes. Uh, the, the second point, the Arkansas Voices training on LGTB relationships, could you explain some of that to us exactly what type of training you have there and are is there also training on just. Maybe relationship training it's uh basically in the training. A lot of our young people who are are in this particular portion of our population feels that some of the information does not pertain to them, so our goal there is to make sure our facilitators and our educators help young people understand that healthy relationships is for everyone across the board and how to be sensitive to those young people who feel that this is not pertaining to them, so we want to make sure that all of our young people understand that this is for all of our young people, no matter where, what part of uh decisions that they are making so we make sure that we take all of our facilitators through training on how to address uh and specifically because this is a topic that the federal government has put out for funding that we are. have the ability to address this population so we train our young people to um. Ways of how to make sure that these young people understand that the information is for all students no matter what, because all young people, all people want to have healthy relationships. Well, and, and that, that was kind of my point is that All relationships are important and how, how you deal with those, so, but it was specifically listed. On LGTB, so I thought there might be something that was. Uh, in, insightful there on those relationships compared to normal relationships that teens have. No, we want to make sure they understand that this information is just as important for them. Thank you. Thank you. OK, I see no other questions. Thank you so much for your presentation today. One last question, are you funded by any school district specifically? Um, each school district for us, um. Since 2010, we uh have requested that schools pay a small fee for service, you value what you invest in, and so we want our schools to invest in program. We don't ask a large percentage, but we do ask schools to, um, provide some fee for service. OK. And a large number of the schools that we're serving are very rural small school districts and no we have one school district that provide a very small percentage for us. And I have two very, very small schools that provide some. OK. All right. Thank you. Thank you. Thank you for being here. Thank you all. Thank you. Merry Christmas. Um, OK, we're gonna move to the ISP, um, I'm gonna recognize, uh, Senator Payton as the folks are coming up. We are on item D members. go down there. Yeah, I think so. So I've, I, I filed this ISP um. It's my ISP but it's really Senator Payton and mine together. So. Uh Senator Pyton, if you'll just state your name for the record, and I will recognize you to proceed. Thank you, Madam Chair, uh, Senator Peyton, District 22, and I really appreciate the opportunity to be back in front of the health committee, spent a lot of years serving on the health committee in the House, and I will be rejoining the health committee in the Senate this next term, so I look forward to that, uh, members, as we, uh, talk about the waste tire program. Those of us that have been here very many years are tired of it, would like to have it off the desk and uh but uh the bottom line is when you're out go exceeds your income, your upkeep will be your downfall. And that's what this program has been suffering for a long time. We have investigated and studied and looked for efficiencies and and uh looked for waste, fraud and abuse and audited and uh. I came to the realization a couple of years ago that that I think of programs working very efficiently, uh, we passed legislation two years ago that consolidated the 11 districts into 4 and we gave, we reorganized the boards for those 4 districts and gave them broad authority to look for efficiencies and find the best way to, to collect and process these tires, uh, in an attempt to get it off our desk, but we did leave it short on funding and. uh, the bottom line is you can't. Transport, handle process these tires without it costing a certain amount of money per tire and different tires, uh, cost different amounts based on size and, and, um. So I think it's very important that we understand as legislators that uh. This program is, you know, government does garbage collection very well, you know, city governments, local governments, the our our citizens and our constituents have always supported that, that type of thing. I've been, I grew up in the car business. I've been in the car business all my life and, and, uh, I didn't campaign on fixing the tire program or or working on the tire program. But I have experienced, you know, the handling of new and used tires, uh, being in the car business and. And uh There's a difference between a waist tire and a used tire. One of the best ways. To find efficiency. In dealing with waste tires is to make sure that we get all the miles out of those tires that we can. And so when somebody's placing a set of tires on on their late model nice vehicle and those tires coming off have 20 or 30% of their life left, it's much more efficient for that, those tires to make it through the supply chain and get on the next vehicle and be worn out than for us to process them as waste tires. And so government is very good at putting in obstacles like. regulations and taxes that discourage the very behavior that that we want and a few years back when we passed the RIM fee that applied to all the used tires and, and, uh. Charging a tax of $2 every time or a dollar every time that tire changed rims. Uh, we were discouraging. That used tire program or used tire logistics that get that tire to the next vehicle and get, get it worn out. When we put regulations in and require permitting and manifest list of everybody that handles those used tires we're discouraging the, the. Logistics that get that used tire to an end point where it can be put on another vehicle and worn out. Uh, so I do, I do have motivation to eliminate the tax on the used tires. I think whoever came up with the idea that we would collect the uh disposal fee when the tire is sold new, I think that was a very good idea, uh, every tire that's sold new is going to have to be disposed of at some point. And collecting that fee on the front end means that. We can allow people to take those waste tires to the dump and dispose of them free of charge at that point. So there's no incentive for them to end up in the ditch or in somebody's fence row when it costs nothing to take that tire to the to the. Collection site and dispose of that waste tire. So I think it was a very good program in the beginning. Uh, we never collected the new tire disposal fee on all new tires. There was a large percentage of new tires that hit the road and later became was tires that we never collected that fee. So in the legislation that was proposed 2 years ago. It, it origin originally had the broadening of, of that fee collection to include new cars. I was a franchise dealer, had two different franchises for many years. Why did the franchise dealers not come out in opposition to that, because they recognize the importance and the value of collecting that fee on the front end so that we have the money in the program to process that tower on the back end. As the cost of processing those tires has gone up and, and we can look at all the reasons why, obviously, transporting requires equipment, trucks, trailers, insurance, labor, fuel, which has gone through the roof, all those things have gone up in cost, and then the processing and and the shredders that and that equipment, maintenance on that equipment. But the fee did not ever go up and, and, and I'd say that the fee doesn't necessarily have to go up yet if we would just collect it on all the new tires. And then on the oversized tires, we have ag tires that can cost over $100 to process one tire, uh, we have oversized tires that can cost 10 or $15 up to $30 to to process those tires, um. But Farm Bureau and the farming community had recognized the fact that those ag tires are going to cost more and they were not in opposition to allowing the 4 district boards to set a fee on those ag tires, and we were gonna cap that at $30 and uh let the four district boards set that fee based on what they felt like they needed for the ag tires, the oversized tires. I don't wanna get into too much of the weeds, but for those of you that may not have been here for 6 or 8 years. heard all this. I'm trying to give you a brief overview. Um, and as, as we filed this. Interim study, it was, it's to look at. New ideas and efficiencies and suggestions that, that might make the program work more efficiently. Look at how other states are doing it. We have some experts from the industry that are here today to, to answer our questions, to give us any information, any ideas that they have, but Senator Irvin will tell you we filed this interim study. 9 months ago, maybe a year ago, um, quite some time ago. And there just hasn't been a lot of people come up and say we've got a great new idea on how to do this, uh, we decided we needed to have this meeting before we go into session, uh, next month. Uh, but the truth of the matter is we put a new program in place 2 years ago and. We have reorganized the four districts and, and reorganize those boards. They took what we thought was 6 months' worth of funding and stretched it into about 18 months. They're gonna run short just as we knew they would, uh, the this next 6 months of, of this fiscal year and so I also have uh supplemental appropriation that I followed the other day that would put $5 million in the program, which is basically 18 months. of shoring up the program. But I, I wanna say this, if, if you can imagine yourself in business, trying to be one of the providers that, that manages this program for the state. And you have to own trucks and trailers and equipment, you have to own expensive shredder equipment and things like that. And your business plan can't extend beyond the next month or two because the state's not funding the program. That makes you operate very inefficiently. Yeah As an As you hear from these providers, you need to understand they, they've got their personal well-being on at stake, and they're investing in in equipment and. And things in their business plan. We can't Continue to have this. Program Run out of money every 6 months and and have to shore it up at some point we're gonna need a dedicated revenue stream to, uh, shore up that funding, and I'll close with that unless everybody wants to ask me a question I'll go back to my seat and we can bring up the experts they'll go ahead and come up to the table, uh, Representative Wooldridge. Thank you, Madam Chair, and thank you, Senator, for your work on this. Uh, my question may be better for one of them, but you had said something about the fee that we charge on, on every new tire sold. Is there also a disposal fee. Charged on the tires that you take off of your vehicle. Now, so when you buy new tires, there is a disposal fee because that tire will become a waste tier at some point in his life. We currently have a fee that's charged on used tires when you mounted on another ramp, and that's what I had proposed eliminating because I think that discourages the logistics of getting those used tires. From one location to the next and and sold to somebody that's going to wear that tire out, uh. In my first years down here as, as people saw that the program was running short on money, there was a concern. The the waste tire districts were Yeah. One district would process way more tires than what they than what. We collected fees for in that geographic location. Well, that's because geographically, you have You have wealthy parts of the state, not so wealthy. You have very rural. Those new or those used tires that are not worn out, they need to flow. From one geographic location. To another and and Southeast Arkansas was always getting it on the chin because they would process a lot of tires that had a lot of waste tires, but they didn't collect very many fees because there weren't many new tires being sold in Southeast Arkansas in the Delta. That's a prime example of what I'm talking about. We need to recognize that when we put a tax on the used tires, and we required permitting of people that carried them and, and manifest list of every tire where it came from. it's going, we discouraged those logistics. It became a lot easier to go ahead and shred a tower with 20% of its life left, uh, so that's something that we don't want to discourage because ultimately the the more miles we get out of every tire, the fewer waste tires we're gonna process in the end and I'd like to add this also, for many years, we just landfilled those tires, and now we require that they be processed and, and it's a little more expensive when you have to get them transported. to a processor and, and get those tires shredded and and processed. The good news is those byproducts are beginning. To, to have a demand and a market of their own. I'm, I'm glad you brought that up because if y'all go ahead and take seats, it's fine. Um, I'm glad you brought that up because that's my biggest concern is these landfills. Yeah, that's fine. Uh, the landfills that are filling up and to me as just somebody, I mean, Arkansas is a natural state and, and our nature and our natural resources are so critical and beautiful to our tourism and to our state and just as a concert. er v ation ist I, I just don't think, I just don't want to be in the business of landfills of used tires, like there are wonderful options now that are coming on market and I'm glad to hear from you. I've been able to see some of these that I was in a big ranch down in Texas, and they have the molded, um, I guess kind of like a tile, but they're out of used tires and it's great. The horses were walking on those, which is better than concrete or asphalt. And it's softer. It has give. I mean, you can imagine, but they're actually very beautiful too. Like I just love the look of it. So anyway, it's good to know that and that's where my interest is, is how can we recycle, recycle these tires into other products. So if you'll state your names for the record and then please proceed. Members, you're in exhibit D2. I'm Philip Davis with Davis Harper Company. Push your button, please, if it light's green and you may have to pull it towards you. Can you hear me? Yes. I'm Paige Davis, fractional CFO of the Davis Rubber Company. I'm Robin Reed with Boston Mountain Regional Solid Waste Management District. Thank you. I'm John Dillon, the regional vice president with Liberty Tire Recycling. Thank you. Please proceed. You just may have to speak right into that mic. OK. Um, We are here to talk about the importance of the Was Tower program. The Wastetier program plays a vital role in maintaining Arkansas's reputation as a natural state by keeping whole tires out of landfills. The program prevents illegal tire dumping and protects public health. Discarded tires often end up in rivers, lakes, ditches, and our state parks, creating environmental hazards. Used tires serve as breeding grounds for mosquitoes, habitats for stray animals and sources of leachate runoff. The program's efforts significantly mitigate these risks, safeguarding Arkansas's natural beauty in public well-being. Davis Rubber Company has made significant investments, entire processing equipment throughout its long-standing partnership with the Arkansas Waste Fire Program. For the district 2 contract initiated in April of 2024, Davis Rubber Company invested $500,000 in a new shredder, $300,000 in trailers and an additional $200,000 for installation, electrical work, and spare parts. These investments ensured the company could fulfill its contractual obligations effectively. To meet the demands of the district 2 contract, Davis Rubber Company increased its workforce, now employing approximately 25 individuals. This program directly benefits small tire retailers, rural cities and counties across Arkansas. Eliminating the current program with disproportionately affect these mom and pop shops that sustain local economies in rural areas. Davis Rubber Company strongly advocates for maintaining the waste tire program to ensure sustainable tire disposal and recycling. The program's sustainability faces significant challenges, primarily due to operational uncertainties. These includes these include inconsistent payment schedules from the state in uncertainty about contract renewals. Such unpredictability hampers divis rubber company's ability to plan investments in the waste tire program. Another critical challenge is the lack of sustainable collection centers across the 27 counties served by District 2. Currently, there are no incentives for these tire retailers or counties to operate collection centers. Furthermore, the stringent requirements outlined in regulation 36, exacerbates operational and logistical difficulties. To address these challenges, Davis Rubber Company proposes reinstating the $5 fee on truck tires. This fee could generate substantial additional revenue for the waste tire program. For example, from April to November alone, truck tire fees in the 27 counties serviced by Davis Rubber Company could have contributed significantly to the program. Additionally, with approximately 100,000 new cars sold annually in Arkansas, a tire processing fee on new car tires could potentially yield an additional 1.2 million to support the program. Under the current contract, Davis Rubber Company is on track to process 1.3 million passenger tires in its first year, along with significant quantities of truck and extra large tires. The company maintains an impressive recycling rate of 93% as of quarter 3 of 2024. Davis Rubber Company collaborates with Newcore Yamato Steel and exports tire shreds to countries such as India and Japan. The company also produces tireived fuel, clean steel, mulch, and playground safety surface, demonstrating its commitment to innovation and environmental stewardship. Davis Rubber Company remains dedicated to working with the state of Arkansas to fulfill its district 2 contract and uphold the waste tire program. The program not only protects public health and the environment, but also supports small businesses and local economies, particularly in rural areas. As a 100 year old family owned and operated. Arkansas business, Davis Rubber Company looks forward to continued growth and collaboration with the state. Thank you for your ongoing support and commitment to this critical initiative. Thank you. Thank you. All right. Uh, if you have presentations, you may have to play musical chairs, uh, so we can get your presentation onto the screen. If you're just first, OK. Know how to get there. Which presentation are you going to put up first, I guess you would like, she'll come down and assist. Yeah. the far right. Um, also, if you have the letter that you just Presented, if you don't mind, uh, giving us a copy of that and then we can circulate that to the members as well. You can just hand it to our staff. All right. Thank you so I'm John Dalan RVP at Liberty Tire. I started in the business roughly 27 years ago and it was a family owned company similar to Davis and one of the very early acquisitions of Liberty Tire, I think were the 5th acquisition. Uh, since then, when the different roles to where I currently I have over 18 sites, um, operating throughout Georgia, the Carolinas, Tennessee, Kentucky, uh, obviously Mississippi, which then introduced me to Arkansas, which I, I'll have to admit I'm not super familiar with. This is my 3rd trip down here, great state. But just, you know, I got, I got asked to come and just discuss the programs we're, we're used to operating with around the country in different areas to make suggestions. I personally do not have a suggestion. I'm happy to take any questions and answers, but I would love to. Come with the exact answer on what they do in Arkansas. I do not have that, but any, any questions about how we operate throughout different parts of the country, hopefully would be helpful. So I'll run through, uh, the presentation here, um, Liberty Tire began back in 2000. I think we touched on a different slide and right now we have 50 plants processing around the country, uh, I'm in charge of an area I can't show you. Basically Illinois, Indiana, Michigan, um, down through all the Southeast and and every site's different, every market is different. Everybody has their own. challenges and no state program is the same. No market is the same, and every single plant makes different products, so it doesn't make our business pretty unique, um, and we do, we manufacture about 500,000 tons of TDF, 300,000 tons of mulch. We have, I'm not positive on the crumb plants, I believe 11 crumb plants. Um, so over the years, we've reinvested into our company, uh, just to make sure we can continue to move rubber up the chain and, and that comes with his own challenges because you have to have customers to buy that product, uh, so while we. all of the Nazi landfill and unfortunately we were in business to make money. So we picked that option first if there are, are good outlets for TDF or mulch or Chrome will invest the capital, uh, it is stressful. It's a smaller company, it's stressful for us, probably not as stressful, but I, I came up in the smaller business, so it's still a challenge to watch all of our money pretty closely, um, we've we've gone through a lot of acquisitions like I mentioned, uh, we did start in North Carolina 2000. There's two large sites down there are 2 largest size process about 1. million tires each as a company we process about 200 million, um, around the country, the, the sites I'm over have 80 million, so that's a lot of tires to move around, so you have to be creative. You have to understand the states, you have to understand a lot and it is very difficult to, to make money in our business, so. That's our company there. And that, that looks a little weird. that look weird. I guess that's not how it normally looked in the presentation, but. That's OK. We have it, we have that slot. We have it. Mhm. Go ahead. What we looked at is, you know, basically free market states in, in, in America. There's 24 where there is a fee collected by the state, but then the private sector, private sector negotiates with a company such as Liberty Tire to, to pick up their scrap tires and everybody has their own contract, their own relationships, uh, the free market with no state fee, there's 14 that I honestly don't know of one that there's no state fee that gets paid in, um, you know, normally in the free market, if, if a fee comes in and we'll talk about it here later, uh, but then there's 7 with incentive driven, which is if you make higher-end product Chrome, something along that line, then there's an incentive paid by the state. So it it motivates you to invest in equipment. Again, you need a market for it to move to and then 5 that are county led public systems as we describe it, which is similar to Arkansas, uh, North Carolina, Tennessee, Oklahoma and Utah that we're aware of. So, you know, I'm not gonna talk to you all about Arkansas, everybody in the room knows it, probably all better than me, um, but how the system is working here, I, I do agree that it's I've spent the 3 trips, as I said, it's. I believe 30 to 40% underfunded, uh, the OTR Ag tires not being addressed and the state is rather shocking to me because there's a lot of them and it is by far the most difficult and expensive tire to make go away, so I, I'm not gonna make any proposals outside of that, how you address the funding piece, but, um. I've, I've not worked in a state where everything is completely wrong with the government involvement, we operate in different states, which I'll lay out here in a minute. Um, but for right now in Arkansas. We don't deal directly with any of the UTP districts right now, uh, but we do still pick up about 800,000 tires in the state. So I think it surprised everybody I was talking to, they didn't realize that we deal directly with the discounts of good years of Bridgestones. We have sub haulers that pick those tires up and they do still take them to the approved district's drop off areas, so I mean 30% of the tires are essentially already privatized in Arkansas. They go through us, these customers pay us a fee and they pay the state a fee. So that does exist out there, so it is. It is doable, it's not non-existent. I just want to make sure we pointed that out and you can see in the in the map, you know, where they're where they're at, um, located all around there. So we, we have national contracts, so we're obligated throughout the entire country to take care of these larger retailers. Um, the free market, basically. The retailers negotiate everything, whether it's on a national level by state or directly with us at the state level and they pay a fee, the average is around $1 per tire, the PTE. So for a semi tire it would be in the $5 range OTR A would be more like $20. Those fees go to the state, they do not pay them out to take care of the scrap, they use the money for grants for equipment, uh, for cleanups, which still happen in every state in America, unfortunately. And you know, anything else that might need to be to sub subsidize the program, but they do not directly pay for any of the disposal of the tires, the retailers pay the recyclers for that, and they negotiate and sometimes it's a heck of a lot more competitive than I wish it was. So we do a lot of things that Doesn't leave us a lot of money, so there's 36 states charged some sort of state fee, uh, range from 25 cents, which I'm proud to say is my home state of Indiana. It's the cheapest in America, and they're still sitting on $6 million in reserve because they only used to pay for cleanups and give grants, which they never do. And we don't have a lot of cleanup issues they do manage it pretty well. If you, if you create tire piles in the states where I'm used to coming or if you have large piles of shred, you get massive fines, you eventually get shut down. I would be fired and you eventually go to jail. So they enforce it pretty strict up north, um, which is OK because they're not, they allow us to negotiate our own system. So if we're collecting tires and not charging enough, not paying our bills, that's our problem, not the states. So it's worked fairly well. That's the entire world that I've known. Most of my career until this past year where I got involved more in North Carolina, Tennessee and Arkansas. Uh, the systems with incentives, it's. Interesting, uh, it's just basically Motivates you to move rubber up the chain and sometimes the incentives to me don't really offset the cost to do it, but it does motivate you a little bit. If you don't have good markets, if you make TDF all you want if you don't have a customer within a reasonable range where you can deliver it at a fair price, you, you're not going to do it. You're going to the landfill, um, and you try and move it up if you can, but we only make higher-end products. If, if it makes more money and we're all showing up to work every day to make money, not to, to do anything more exciting than that, I guess. We want to do the responsible thing which all those are legal and responsible, but, um, some of the states like Utah and Oklahoma are the only two that I'm aware of. A lot of states do give grants for equipment. We've been involved in Ohio for 20 years have given us grants, Tennessee has given us grants. Uh, it is pretty common around the country to give grants to help pay about 50% of the equipment to be able to make chrome, TDF small, should be able to move it up because it's expensive as was just saying it is, it is not cheap. It's just getting more and more expensive. It's hard to run, and it's a learning curve. Uh, the county led system again, you know, obviously everybody in Arkansas understands how your system operates. We have a unique one in North Carolina and Tennessee that I'm, I'm hoping within a year, I'll understand that, and then I'll fully understand Arkansas, but they allow a lot of privatization also so you can contract directly with a customer like we do in Arkansas, uh, but if you have the county contract, you agree to so much per ton and you spot a trailer, you leave the trailers there and if you pick up a customer in that county, you can build that feed back to. the county. And the state that the customer pays us maybe transportation fees, you know, but then we do build the county back. So the county based on population, they have so much per year that's available to them based on their population estimated PTE if they take in more of that or they need extra funding, it's on them, and they have to find ways to to raise that money. Uh, Tennessee is similar every single county negotiates, does an RFP. It's a bit exhausting, uh, but there's, you know, between Tennessee and Carolina at 150, 160 different RFPs we deal with, but. You know, it's, it's similar to privatization. It's kind of a mix of the two. So I think there's a bit of a benefit to both. But I think that is it. That's the world that we live in. Um, OK, before we get to the next presentation, we have a few questions. Senator Payton. Thank you, Madam Chair. Um So Mr. Dillon. You mentioned, uh, I think 200 million tires a year that your company handles and 700,000 from Arkansas. Yes, 800,000 80,000 so I'm interested in. In What percentage of the 200 million are being landfilled versus processed and the same question with the 800,000 from Arkansas. What percentage of that's getting landfilled? Well, all the Arkansas tires are through subhaulers. We're not picking any of them up with our company trucks right now because the national contracts we have, so they're all going to your districts. When they can, they've been shut off a few times. I'm aware of that, but they pick them up and they take them, they follow the same procedure for everybody in the state. None of the tires leave the state. I had asked on that I I do I'll stay here, uh, for the rest of the country, to give you the exact percentage on landfill, I would say we're probably in the 20 to 25% on the high side, uh, the vast majority goes into tire dry fuel. It's about 400,000 tons a year, um, mulch is eclipsed that now is 400, 450,000 tons a year. We sell through Home Depot, Walmart, Menas Lowe's, uh, we bought a company 6 years ago, and they had a really good network built with all of the major big box stores that it's growing really well. It's, it's stressful because, you know, you make it, you tie up millions of dollars if they don't buy it, you're still tied up millions of dollars, uh, and then Crom we have, I believe, 11 plants around the country we're commissioning a new one in Chicago next month, um, and. And a lot of that goes into the carpet industry, the matte market, uh, a lot goes in the track or Ohio plant just makes it for tracks, uh, the infield football fields, a lot of them make it for that, but we'll move 200,000 tons alone in North Carolina and Georgia and Florida move into two companies in Georgia that make doormats, which is kind of shocking. Madam, if I could please. So I have another question. It's not really a follow up, uh. And I don't know if this might be pretty difficult to answer, but One of the things I'm most concerned about is what is the end cost to the consumer because obviously the consumer's gonna pay a tire shop for the tire, whatever the tire shops having to pay to, to dispose of that tire is going to be. Hopefully they're not losing money. It's gonna be collected from the from the, from the customer. So as you look at the different programs and the different states that you operate in. What do you think the average is? Cost to the consumer like, so you have a state that that is privatized and the tire dealers paying liberty or whoever to come pick up these waste tires and they're having to pay so much per tire, or you have a state like Arkansas where, where we're collecting that on the front end and, and the state is reimbursing. The processor. Can you give us any idea, maybe it's just your professional opinion. What that average cost is to the consumer and which program make lowers or raises that cost to the consumer. By consumer to mean retailer like the tire shops? No, I'm talking about the citizens individuals that are buying and running and driving these tires. Well, I mean, every state that that I've I've been used to operate each retailer is allowed to charge whatever rate they want. That's an argument we've had with a lot of our customers, they make more money, more profit than we do. So they charge the fee to the consumer and it's, it's going to cover what our cost is, but they make profit on it they make, they make very good profit on it. So do have the option of carrying that tire home with them instead of paying that fee in every state that I laid out where it's privatized, almost every county. In all those states will have an event once a year where the local residents can bring tires and drop them off for free with no limit as long as they have a license, they live there to help them with that so if they do have an offset in almost every state to where it's just once a year in Kentucky, they rotate counties every 3 years, even the tire retailers can get rid of them for free. So they do have government involvement with different outlets like that, but in the private systems, each retailer is allowed to charge whatever they want and they charge enough to cover our fee, and they charge enough to keep plenty in their own pocket. OK, thank you. Thank you, Madam Chair. Representative Beatty. Thank you, Madam Chair. My, my question is for Miss Davis, um, what's the biggest challenge that you face in, in running the zone 2 contract. Uh, I would definitely say the collection centers and being able to have a sustainable collection center. The regulations around them can, can be A lot accompanied with the fact that you are asking people to man these collection centers free of charge. There's no incentive for someone to keep up with them, to count the tires, to make sure the amount of tires that someone is putting on a manifest is actually the amount of tires going into that trailer on top of that, we have, uh, actually gotten larger trailers are now 53 ft box trailers. And if you don't stack those tires correctly, you're not going to get as many tires on them, and if you don't get as many tires, you have to go back and forth. And there's going to be a lag in the system there. Good Thank you, Representative Wooldridge. Thank you, Madam Chair. Um, so I'm gonna ask you kind of the same question that I asked to Senator Peyton earlier. So the fee that's charged on the front end, the retailers that you work with are, are they charging these fees even if folks take tires with them. I know it's maybe been a little bit since I bought a, a new set of tires, but I kind of think that I remember that you could take the tires with you and then you could waive that fee is that changed now or are you? Having any that experience with retailers. They're paying the fee regardless. They are paying the fee regardless. OK. So then ultimately the issue is that the fee is just not enough to warrant you coming to get them. So whatever, let's just say my local tire shop, they charge that fee now whether I take my tires or not, so I'll leave my tires, obviously. They then turn around and they pay you that entire amount of that fee. We get paid through the entire district, so we're. We don't charge them a fee that people bring tires to us if they've got to waste her number there's no fee. OK, so then the tire district will bill each retailer for the fee that they have charged on the tire for all 27 of our counties and on each one of those manifests, you get the waste hier tax ID number. So I typed that in, I account for all of those tires every single month for all the vendors that make up the 27 counties, then I turn that over to District 2. They review it and send it off to the state, and then that's, that's how we get paid. That's, that's how they. accounted for. OK, can I have a follow up, Madam chair? I, I just want to make sure I clarify that I, I'm understanding the process, so my local tire dealer in Greene County sells me a new set of tires, and they charged me a fee now. How does that fee get reported and then turned in to the state or to the tire district or whoever is going to come and pick those tires up. So that fee goes underneath their tax identification number that WST number, so they should have a a tally of that. They put that. into their trailer or bring them to us, however they do. So if you dropped off 4 tires and they had 24, 4 of those tires are yours on that trailer, it's underneath that was tire tax identification number. I put that into a spreadsheet, uh, and it is accompanied with the manifest that is signed by them by one of our drivers and by a foreman on the lot, and then, as I said, I turned that into District 2. They revised that bill with the manifest, making sure everything adds up across the board and then they turn that into the. OK. Thank you, ma'am. Thank you. Um, before we go to more questions, I want you to go ahead and present because you might answer some of these questions, yeah. OK. Hello, I'm Robin Reid with Boston Mountain Solid Waste District, and we currently serve as the administrator for UTP one, Boston Mountain is Washington and Madison County in Northwest Arkansas. So as Senator Payton mentioned for the past 3 legislative sessions, we've been talking to y'all about waste tires, the 2017 legislative session. Um, set up the new tire program 2019 funded one year extra large tire processing in 2021, the legislative legislature considered applying the room removal fee to new cars that bill died in committee and in 2023, tired districts were consolidated and new boards were formed to improve efficiency. Aren't y'all tired of tires? Hm In 2023/3 million tires were collected, transported, and processed. We believe there are many more waste tires and dumps in the ditches. Arkansas is on we're going to collect even more this year. The $3 rim removal fee set in 2017 is now applied to all tires removed from the rim and replaced by new tires. The fee is supposed to cover the cost of all tires regardless of size and cost of transporting and processing. The effective rate for the $3 fee is $2.31 which is the net available revenue to cover the statewide program. However, The DEQ reapproved reimbursement rates. For the 4 tire districts, as you can see in the slide. According to legislate or they're listed here and according to legislative audit, $2.31 is available for per tire reimbursement, but the approved rates based on actual cost is anywhere from 49 to 59 cents greater per tire than the net amount available. It's simple arithmetic. You will recall That over a little over a year and a half ago, the program ran out of money. And the legislature had to move $1 million of emergency funds into the program to take care of one quarter's shortfall. Prior to that emergency funding, tires piled up because transporters and processors had not been paid for the previous quarter's costs, transporters and processors bill monthly, but the state reimbursement reimburses only. All tires eventually wear out. The $3 removal fee is not collected on all tires in the state that eventually wear out and needs to be collected, transported and processed for recycling. The fees, the tires on which the fee has not been collected. Nevertheless, are collected and processed by the tire districts. One proposal. Is to keep the $3 fee as it is, do not increase it, but fairly apply it to new car tires, which will eventually wear out and need to be collected, transported and processed, applying the existing fee to new car. Tires is estimated to raise approximately $12 million all new. Projections from DFNA are needed. To provide additional relief to those who buy used tires, we propose to remove the $1 fee. You'll recall that the 2019 session appropriated $300,000 as one-time revenue to fund the extra large tire program, that money was used to collect and process XL tires back in 2019 and 2020, there is no more money for XL tires. They are funded by the $3 fees, but sometimes cost as much as $200 plus to haul in process. We process. Uh Allowing districts that we currently pro I'm sorry, we process allowing districts to send XL tire fee, not to exceed a proposed, sorry, to allowing districts to set an exile fee not to exceed $30 per tire, districts can currently set an individual fee but with no consistency and no limit. The current 4 district higher program from a logistics and administrative standpoint is working, it's underfunded, but it is creating. Administrative efficiencies by work by reducing back office operations from 411 districts to 4. We What is needed now is to make it easier for volunteer collection centers to be permitted for the more consistent collection of tire manifests to ensure proper reimbursements and for manifest to follow. We also want to make sure there's enough money in the program to pick up waste tires in rural areas, which no longer hold, which require longer hauls for less tires. Tires are recyclable. The district needs greater support from an economic development standpoint, develop, to develop markets for waste tires such as the steel industry. Engineering and rubber modified as this legislative session can solve problems with the tire program starting with Adequate revenue, not raising the tire fee but fairly applying it to new car tires or providing. Through other means to increase the net available revenue by at least 2 million. Ma Maybe more to take care of abatement of tire dumps around the state, dumps like cotton plant and others, plus eliminating the two, the used tire fee restoring the truck fee to $5 per tire, which was reduced from $5 to $3.02 2017 allowing the districts to set a $30 XL fee reimbursing districts monthly instead of quarterly. Fortire cost and making permitting I go to my last slide, but there we go. All right. Thank you for your time and concern, and I'll be happy to answer any questions you all have. Thank you so much, Representative Ladyman. over here. Thank you, thank you, Madam Chairman, um. this might be for Mr. is it Dylan? Uh, maybe someone else can answer this, but, you know, recycling is expensive and it's been around these products, uh, that Senator mentioned earlier that she saw in Texas, those have been available for years and years and years, but they have not been competitive, so, uh, you mentioned that you make a lot of mulch and crumb, I think you call it crumble, yeah, uh, and that goes into you mentioned playgrounds and ball fields and that sort of thing. Uh products. I understand that, but, uh, you know, we have a miracle League there in Jonesboro. The field is all rubber matting, and then, uh, when I was mayor, we did playground equipment, and we would look at the, the competitive products to your mulch for say where you got swings, you know, it's a good use of that. But it was not competitive with say wood chips or other products. Is it more competitive today? Are you competitive with competitive products so if you buy the rubber mulch, I put on my pool 11 years ago. I'll buy 3 or 4 bags a year and fill a few spots in the wood mulch I buy every year. So that's, that's the selling point on it is if it's colored is guaranteed for 10 years, it's gonna outlast everything else. It's gonna outlast the wood mulch. So up front it does cost more without a doubt because it costs a lot to make. So are you gaining more market share in those areas of selling that product? 20% every year for the last 5 years. OK. All right, thank you very much. Do you, do you manufacture the molded tiles that lock together that create the sidewalks and the pathways in Godfrey, Illinois, which is about Saint Louis, and then one in New Jersey. Those are incredible. Like I, I mean, I, I don't understand why those aren't on the market because I would put those every, I mean, When you think about just even. You know, just the stress on somebody's backs and joints that are standing on concrete all the time. I mean, I just don't know why we wouldn't wouldn't put those and utilize those and sidewalks that the price is not cheap. I look at things sometimes like, uh, you know, some of the edgy and I, I'm not gonna say I try and buy our products, but sometimes I think it's a little high, but you gotta decide the life of it if you're gonna stay at home or if it's for school it's a longevity and it's, it's not us putting crazy profit in our pocket. We, we try to make money at it, but we don't want to lose money at that. It's a lot lighter too. somebody who lays rock, which actually I do. I mean it's a lot lighter to be able to do those than pavers. I mean, I just, anyway Yeah, OK, I just don't understand why they're not more utilized, but I hope that it grows, uh, and so is it safe to say that just like What's the percent so there's not a lot of recycling of these tires that are happening in the state of Arkansas. There is 99% of the tires we receive are recycled. OK. Are you, you are recycling them through other products that recycle them or use them for a secondary product. OK, and Same with y'all. Over 93% and quarter 3 of this year we recycled out of our 27 counties. OK. Thank you. Representative Tosh. Thank you, Madam Chair. I'm gonna follow up a little bit on Representative Wooldridge's question a while ago, he asked you about the process from the tires, you know, when the first ball and then uh when they're removed from the vehicle and who handles those tires as they make their way to the, to the landfill, and it sounds like they go through several different, uh, groups or, you know, uh, exchange before they make it there. understood your answer correctly, and I'm just curious, uh, each one of those, I'm sure is reimbursed along the way for their handling of those uh tires over the last, let's just say 5 years. Can you, can you tell me how many incidents you've had for people have actually reported, uh, the number of tires that they said they handled and wanted to reimbursed for that you found out that that was not correct that they actually did not handle those many tires. Have you had many incidents like that where you've had people that's actually I actually tried to uh receive money through fraud for, uh, reporting, uh, you know, more tires than they actually handle and won't reimburse for it. Does that happen very often or does it happen? That I. I really don't think so, uh, Davis Rubber Company has been one of the regional recycling the counties that we've dealt with has been one of the entire counties that have always dealt with manifest. So that was a very good thing going into it is we, we knew how to go out and talk to some of these other counties that maybe had a different way to handle the situation, but knowing that they have the tire count on the list, uh, right there and us being able to take those tires. often we count those trailers that come in to our location, there's really not a very big difference. I don't believe that that's a problem per se that we've necessarily ran into, I think sometimes people may get rid of more tires than what they've previously paid taxes on that's taken care of through DFNA, but as far as people trying to get reimbursed for tires that they don't have, they, they don't have them for us to count, so that, that is a good thing. So your answer to me is that the system system that you have in place is, uh, the check and balance prevents that from happening and, uh, is that what you're saying? I, I would think so the current manifest, um, tracks, it's a chain of custody. Manifest that use in several different professions and it's tracks the number and it goes from the collection, the dealer to the transporter to the collection site, and there's a signature confirming every step of the way for the number of tires received at each facility. The, the biggest problem with that's gonna be. Your collection centers, uh, like I said, these. These people don't get paid and they're not really interested most of them in being a collection center. Uh, and they're not manning. The location, so somebody can come in and bring in. X number of tires if there's nobody watching no one's gonna know the day for the collection centers or the bottleneck that's where the the problem in the. Program is to me. Mm So no incidents of this occurring in the last. 4 or 5 years that y'all had to deal with it has been brought to our attention. OK. All right, thank you. All right. Thank you. One last question. Representative Moore. Thank you, Madam Chair. Boston Mountain, Solid Waste District is in my district and Mrs. Reed runs that very, very efficiently and very proud of what she, the work that she does there. So, last year in my freshman term when the tire issue came up and I was very confused about it as I think most of us were and still are. Uh, she was a great resource for me, but I just wondered, uh, Robin, if it was worth describing the recycle facility that you have on campus there and the great work that's being done there through. Tire recycling, thank you. So we're really excited about this program or this facility that we had constructed about a year and a half ago. It's a public-private partnership that we entered into with Jordan disposal, um, the tire processing facility is net zero. So they built this facility, went online about a year and a half ago, and they shred all the tires, sell it as a crumb rubber as a tire dry fuel and then the scrap metal is also recycled, so 100% of their material for Passenger and semi tires is currently recycled, um, But it's when we, this facility went online, we were able to reduce our transportation costs by 33% because with my, as mentioned previously with the rural counties, transportation is our highest cost for every facility. So it's been a great opportunity for us to have this facility at our location. Thank you. I appreciate that. Thank you so much for being here and for your presentation. Um, I look forward to, to, um, Senator Payton, you want the last word, and I do before I go to you, um, I've been in discussions with Newcore, and I, I appreciate that you brought that up. Um, as you know, Newcore, uh, and I would just remark that Mississippi County were new Core and Big River Steel are both located. Mississippi County hat was one of the top 10 counties with growth in their GDP. Um, which is significant because that county is now the the largest steel producing county in the United States of America. Um, it's pretty significant. So, in working with Newcore, we've been trying to get a public health committee meeting there. Um, I know we've had other media, uh, committees go to Newcore and meet, but we're working on that. We will try to get that scheduled even if it's Uh, during session, but I just wanted to state Newco is currently taking tires now and using them in their steelmaking process, they can take more tires moving forward, if they can get them in the correct chip sizes and quantities, and they are working with the state and trying to find a solution. So that's a big part of, we'd love to see that continue and, and the recycling, uh, into the steel industry, obviously is beneficial for all. So So that's another piece of this puzzle. They aren't here today, but I wanted to read that on their behalf and appreciate their efforts towards that end, and in closing, Senator Peyton, I'll go to you. Thank you, Madam Chair, and I didn't necessarily want the last word. I just wanted to maybe clarify a couple of things. The money that, that the, the, the $3 fee that the state imposes, that's collected by the tire dealer and then remitted to the state like sales tax and then and then that goes into the fund this managed by energy and environment in the waste tire program and the problem is that fund is. Living hand to mouth, so to speak, and, and, uh. The, the people that you've heard from today that are. Running the processing and transporting the tires, uh, they're looking at a purse that's empty and hoping to get reimbursed. And, and so that's one of the things that we as state legislators need to take seriously when we have people with their business on the line, and we have a program that's continually Operating On tomorrow's dollars instead of yesterday's, uh, and then on the manifest list, I think it's great that we do the manifest list on the waist tires. When I mentioned the manifest list being an encumbrance. As to the used tires that I hope would make it on down the chain and and be used and worn out. Once we say it's a waste tire tracking it with a manifest list and knowing that we're being reimbursed only for the tires that are handled. That's checks and balances, that's great. But uh just didn't want anybody to take what I said about the manifest and think that we don't need to track that on the waste tires, but we need to somehow unencumber the used tires that they should go to the next person and, and put on the next vehicle and worn out. So anyway, I just wanted to get those clarifications and I certainly appreciate you all being here today and and the work that's going in. To our suggestions that we've made over the last 2 or 3 years, and I, I appreciate. Your help on all that. Thank you, thank you, Madam Chair. Thank you. Thank you so much for being here. Merry Christmas. OK, members, we're going to move to the last item on the agenda. We have, is there, are there any, um, of these, uh, sponsors that want to uh make any comments about their ISPs. None, OK. Um, generally, I always say this caveat, um, I kind of consider this as professional courtesy to adopt these without, um, Objection, but that does not mean that they are approved by this body. They're just accepted. Um, so without objection, we will accept these ISPs on the agenda. Are there any other business to come before the committee. All right, seeing none. Thank you members for being here today on a Friday. Merry Christmas. Our work continues. See you next week. We are adjourned.