1. 1/9/2004CIWMB - SB 20 Implementation - Payment System Workshop1 Proposed Phase 1 System for Covered Electronic Devices (CEDs) Authorized Recycler Waste Board Request & Invoice 20 to 30 cents/lb. This system would provide free recycling through free drop off at Participating Authorized Recyclers, and convenient collection by Authorized Collectors who may charge for drop off of CEDs by consumers. Recyclers have said they cover their net costs by charging the people delivering CEDs, so this system would cover the net cost of recycling. The CIWMB would reimburse based on a statewide per pound rate. Recyclers could choose not to participate and could then charge for drop off. After receiving an invoice from an Authorized Recycler that documents the origins, amounts, cancellation and destinations of the CEDs, the Board would process and pay the invoice at the statewide per pound rate. CEDs Authorized Collector CEDs Cancelled Free Drop Off $ $

2. 1/9/2004CIWMB - SB 20 Implementation - Payment System Workshop2 B C Authorized Collector Material Flow Money Flow Authorized Recycler C R CIWMB B Paperwork Flow Cancellation Point Free Drop-off at Authorized Recyclers $ C Resident Business R Collectors Collectors may charge when collecting CEDs from businesses, residents or other collectors Payments to Recyclers Participating Authorized Recyclers in California would accept CEDs without a charge. The CEDs would be cancelled. The CEDs would then be recycled either in California or after export. The CIWMB would reimburse the recycler at a standard statewide per pound rate Collector-to-Collector, and Recycler-to- Recycler transactions would not be reimbursed $ Recyclers Recyclers may not charge when accepting CEDs from Authorized Collectors $ $ CIWMB Reimbursement R Map of Phase 1 System for Covered Electronic Devices (CEDs)

3. 1/9/2004CIWMB - SB 20 Implementation - Payment System Workshop3 Option 2 – Y cents/lb. Payment Option 1 – Y cents/lb. Option 1: Quarterly Payments Directly to Collectors Based on Recycler invoices showing amounts by collector, the Board would send payments to collectors at a statewide per pound rate Option 2: Pass Payments through Recyclers Increase per pound rate paid to Recyclers, who would pass payments on to Collectors at a standard statewide per pound rate Option 2. Maintain Free Drop off at Participating Authorized Recyclers and CIWMB reimbursements to Recyclers. If the funds collected far exceed the requests for payment after 1 year of payments or the consumer fee is raised significantly, then use either option 1 or option 2 to get reimbursements to collectors. Authorized Recycler Waste Board Request & Invoice 20 to 30 cents/lb. CEDs Authorized Collector $ Potential Phase 2 – Addition of Collector Payments (per pound rate) CEDs Cancelled Free Drop Off $

4. 1/9/2004CIWMB - SB 20 Implementation - Payment System Workshop4 Specific Payments. Once sufficient information has been collected and the costs are better understood, the way reimbursement payments are made may be changed. A possible change would be to pay invoices from Collectors and Recyclers related to specific actual costs by activity (collection, transportation and/or recycling). This would maintain a system with free recycling and extend it to free collection by prohibiting Authorized Collectors from charging consumers. Authorized Recycler Waste Board Specific Invoices CEDs Authorized Collector Free Drop Off $ Potential Phase 3 – Base Reimbursements on Actual Costs CEDs Cancelled Specific Invoices Free Collection $

5. 1/9/2004CIWMB - SB 20 Implementation - Payment System Workshop5 Authorized Recycler Waste Board Invoice 20 to 30 cents/lb. CEDs Authorized Collector CEDs Cancelled What is an Authorized Collector? What is an Authorized Recycler? What is a qualifying transaction? Phase 1 Specific Questions What is the timeline? Free Drop Off $ What is a qualifying material?

6. 1/9/2004CIWMB - SB 20 Implementation - Payment System Workshop6 Authorized Recycler Waste Board Invoice 20 to 30 cents/lb. CEDs Authorized Collector CEDs Cancelled What is an Authorized Recycler? Performance 6.Provide free drop off of all qualifying materials by any Authorized Collector 7.Verify CEDs from CA 8.Determine accurate weights 9.Permanently cancels CEDs 10.Meets DTSC requirements for recycling in CA 11.Meets SB 20 requirements for CEDs sent out of CA 12.Submits invoice to CIWMB on origin, collectors, amounts delivered and cancelled, & destinations 13.Reimbursed by CIWMB at statewide per pound rate Authorized Recyclers – Possible Components Free Drop Off $ Criteria 1.Meet CIWMB & DTSC requirements 2.Specify cancellation method 3.Accept the statewide per pound rate 4.Obtain “proof of authorization” from CIWMB/DTSC to show collectors & auditors 5.Inspected by DTSC

7. 1/9/2004CIWMB - SB 20 Implementation - Payment System Workshop7 Authorized Collectors – Possible Components Authorized Recycler Waste Board Invoice 20 to 30 cents/lb. CEDs Authorized Collector CEDs Cancelled Free Drop Off $ What is an Authorized Collector? Criteria 1.Meet CIWMB & DTSC requirements 2.Specify if CEDs from outside CA will be handled 3.Obtain “proof of authorization” from CIWMB to show recyclers & auditors Performance 4.May charge for accepting CEDs from residents and/or businesses 5.Not required to accept CEDs from all sources if contrary to operations 6.Must determine if all CEDs collected in CA and tell recycler 7.Delivers or arranges for delivery of qualifying material to Authorized Recyclers 8.May send qualifying material to any Authorized Recycler 9.If deliver qualifying material to an Authorized Recycler, then shall not be charged for dropping off CEDs 10.Start-up & quarterly estimate to CIWMB on costs, origins, amounts and destinations

8. 1/9/2004CIWMB - SB 20 Implementation - Payment System Workshop8 Qualifying Materials – Possible Components Free Drop Off Authorized Recycler Waste Board Invoice 20 to 30 cents/lb. CEDs Authorized Collector CEDs Cancelled $ What is a qualifying material? Material entering system 1.Meet DTSC definition of CEDs 2.Material from within CA only 3.CEDs segregated or distinguishable from non-CEDs 4.Not previously cancelled after consumer fee paid Material exiting system 5.Cancelled by destruction 6.Cancelled through dismantling and permanent marking 7.Cancelled through other methods 8.Previously segregated non-video-display materials leave system without payment 9.Disposal is not a valid cancellation method or destination, and no reimbursement will be allowed for disposal

9. 1/9/2004CIWMB - SB 20 Implementation - Payment System Workshop9 Qualifying Transactions – Possible Components Authorized Recycler Waste Board Invoice 20 to 30 cents/lb. CEDs Authorized Collector CEDs Cancelled What is a qualifying transaction? Free Drop Off $ Authorized Collectors start a qualifying transaction 1.Must involve qualifying material from an Authorized Collector to an Authorized Recycler 2.An Authorized Collector shall receive free drop off for CEDs from CA 3.CEDs in mixed loads must be distinguishable Authorized Recyclers finishing a qualifying transaction 4.An Authorized Recycler shall provide free drop off for all qualifying material from any Authorized Collector 5.After cancellation, CIWMB reimburses Authorized Recycler at state per pound rate

10. 1/9/2004CIWMB - SB 20 Implementation - Payment System Workshop10 Timeline – Possible Components Authorized Recycler Waste Board Invoice 20 to 30 cents/lb. CEDs Authorized Collector CEDs Cancelled Free Drop Off $ What is the timeline? Collecting Consumer Fee If mechanism is in place, start collecting consumer fee from retailers on July 1, 2004 Reimbursing Recyclers 2.Regulations effective in July 2004 3.Collectors and Recyclers become authorized from July to December of 2004 4.Qualifying transactions start on January 1, 2005 5.Reimbursement invoices submitted by Authorized Recyclers quarterly, starting April 1, 2005 6.CIWMB reimbursement for approved invoices paid starting May 1, 2005 Subsequent Phases 7.Data from first fiscal year will be examined in July 2005 in relation to adjusting the consumer fee and Phase 2 may be considered. 8.After the first complete year of revenue & recycling data is reviewed in 2006, Phase 2 may be considered 9.Phase 3 may be considered when adequate cost data has been collected and sufficient revenue is being generated