Illinois Used Tire Facilities May Post Bond as Financial Guarantee

used tire

The Purpose of Used Tire Facilities

In an effort to curb the detrimental effects caused by improper treatment of used tires, Title XIV of the Illinois Environmental Protection Act specifies that only designated facilities may remove or dispose of used or waste tires. Among other requirements, those wishing to become designated used tire facilities had to provide a guarantee that they could meet the financial requirements to properly remove and dispose of tires.

Before they had the option to obtain a bond, used tire dealers had to guarantee that money was available by either establishing a trust fund or providing a letter of credit. However, in order to provide a letter of credit, the owner or operator of the facility had to establish a standby trust fund in the event that they fail to abide by the rules and regulations set forth by the Illinois Administrative Code.

Getting a Used Tire Facility Bond

New regulations adopted September 2015 by the Illinois Department of Environmental Protection now allow used tire facilities to post a surety bond guaranteeing that they will perform the removal of used or waste tires in accordance with the state’s removal plan or provide alternate financial assurance and obtain the department’s written approval of that assurance within 90 days, upon receipt of a written notice of cancellation from the surety.

Those that opt to post a bond must first submit to the department a written estimate of the removal cost, which, at minimum, includes all activities necessary to remove the tires in compliance with Subpart E of the Administrative Code.

Once the estimated removal cost has been approved by the department, the bond is set at an amount greater than or equal to the cost and must be obtained through a surety approved by Circular 570 of the U.S. Department of the Treasury, although the amount may be increased or decreased if there are any changes to the estimated removal cost. Much like those who provide a letter of credit, the owner or operator of the facility obtaining a bond must establish a standby trust fund into which all potential claims will be paid.

The surety may cancel the bond by providing 120 days’ written notice to the department and owner or operator of the facility. Otherwise, the bond will remain in effect until written notice that the facility is released of their financial obligation has been provided by the department to the owner or operator and the surety.

More information on becoming a registered used tire facility, as well as the necessary forms, may be found on the Illinois Department of Environmental Protection’s used tire page.

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About the Author

Jon Gottschalk
Jon Gottschalk is the Senior Marketing Director for and regularly blogs at the Surety Bond Insider to keep consumers informed on new legislation and updates in the commercial surety industry. He is also a licensed property & casualty insurance producer in Missouri.