May 3-4, 2006 PPSI Meeting - Sarasota FL Financing Workgroup Scott Cassel, Facilitator, PSI Heidi Sanborn, R3 Consulting Group/PSI Dave Darling and Alison Keane, NPCA Lesli Daniel, Sonoma County CA Shirley Willd-Wagner, CIWMB Leslie Wilson, SWMCB, MN Victoria Reinhardt, Ramsey Co. Commissioner, MN Barry Elman, EPA Robert Wendoll, Dunn-Edwards Corporation May 3-4, 2006 PPSI Meeting - Sarasota FL

May 3-4, 2006 PPSI Meeting - Sarasota FL The MOU States…. “This project will prepare PPSI participants for future discussions on financing related to the development of a nationally coordinated paint management system. The PSI team, with support from PPSI participants, will research transitional and long-term financing models and evaluate their potential application in the financing discussions that will resume October 1, 2006.” May 3-4, 2006 PPSI Meeting - Sarasota FL

May 3-4, 2006 PPSI Meeting - Sarasota FL Workgroup Goal Prepare for a discussion on how to finance projects by: Conducting research on financing options. Prepare a list of options and a recommendation for a fair funding scenario for a future nationally coordinated paint management system. May 3-4, 2006 PPSI Meeting - Sarasota FL

Basic Financing Models Existing financing mechanisms Government mandates Voluntary industry programs May 3-4, 2006 PPSI Meeting - Sarasota FL

Existing financing mechanisms General fund revenue (property taxes) Solid waste bonds Solid waste tipping fees/surcharges End of life charges to consumer Garbage bag fees (“Pay-as-you-throw”) May 3-4, 2006 PPSI Meeting - Sarasota FL

May 3-4, 2006 PPSI Meeting - Sarasota FL Government Mandates Producer Pays for Product Management (producer internalizes cost) Producer Pays for Product Management (producer externalizes cost via fees) Split Payment for Product Management Advanced Recycling Fee Financial Incentive May 3-4, 2006 PPSI Meeting - Sarasota FL

May 3-4, 2006 PPSI Meeting - Sarasota FL Voluntary Systems Financial Incentive Voluntary Product Management Programs May 3-4, 2006 PPSI Meeting - Sarasota FL

Producer Pays for Product Management (internalizes cost) Requires manufacturers to finance and organize the collection, transportation, and recycling of their equivalent share of covered products (including their equivalent share of “orphan products”) Program invisible (“free”) to consumers. Intended to drive design for the environment. Includes payments by manufacturers into fund on first time sale or distribution into jurisdiction if no visible fee is charged. Example: WA State Electronics May 3-4, 2006 PPSI Meeting - Sarasota FL

Producer Pays for Product Management (externalizes cost) Requires manufacturers to finance and organize the collection, transportation, and recycling of their equivalent share of covered products (including their equivalent share of “orphan products”). Manufacturers pass on a visible fee through the supply chain…charged to consumer at point of purchase. Includes payments by manufacturers into fund on first time sale or distribution into jurisdiction if visible fee is charged. Example: British Columbia, Canada May 3-4, 2006 PPSI Meeting - Sarasota FL

Split Payment for Product Management Various parties pay for collection and processing of covered products. Example: municipalities and/or consumers pay for collection of covered products and delivery to points of consolidation, while manufacturers pay to transport and recycle their branded products (and a pro-rata share of “orphan products”) from the point of consolidation. Example: Maine Electronics Law May 3-4, 2006 PPSI Meeting - Sarasota FL

Advanced Recycling Fee Government sets a specific visible fee on a product that is paid at retail. Might allow varying fees to be placed on products depending on size or weight. Funds may go to a government controlled fund or a TPO. Covers costs of collection, transportation, and processing. Examples: California Electronics Law Used Oil laws May 3-4, 2006 PPSI Meeting - Sarasota FL

Government Mandate Financial Incentive Requires the manufacturer to provide a financial incentive to encourage the return of the used product or package, which might include a deposit/refund. Often called “bounties” Includes “Free Market System” Example: Maine Thermostat Law May 3-4, 2006 PPSI Meeting - Sarasota FL

Voluntary Financial Incentive Manufacturers or retailers set up a voluntary system to provide a financial incentive for the return of the product. Includes free computer company take-back if purchase of new computer Examples: National Auto Switch Agreement MA Auto Battery Core Charge May 3-4, 2006 PPSI Meeting - Sarasota FL

Voluntary Product Management Programs Manufacturers voluntarily set up a system for collection, transportation, and recycling of their own products. Examples: Thermostat Recycling Corporation Rechargeable Battery Recycling Corporation May 3-4, 2006 PPSI Meeting - Sarasota FL

May 3-4, 2006 PPSI Meeting - Sarasota FL Work Completed To Date Formed Workgroup Established expectations for workgroup Identified financing categories – draft Identified financing systems that are examples under each category. Developed 6 fact sheets May 3-4, 2006 PPSI Meeting - Sarasota FL

Next Steps: Research on Financing Options Add Steering Committee members Raise money to complete project Research the possible options for a national financing strategy should it be needed Revise financing system categories  revised chart May 3-4, 2006 PPSI Meeting - Sarasota FL

Next Steps: Research on Financing Options Finish all fact sheets Develop pros and cons for options Develop criteria to evaluate systems Narrow systems of interest Develop recommendations on model financing strategies that may be starting point for discussions to resume October 1, 2006. May 3-4, 2006 PPSI Meeting - Sarasota FL