From: Kuypers, Jeffrey A (Environmental Compliance, Americas)
Sent: Thu Mar 08 14:22:35 2012
To: PICKERELL Loretta; PERRY Marylou; PALMERI Jordan
Subject: RE: E-Cycles Advisory Committee - March 6, 2012 meeting
Importance: Normal
Hello Loretta, Mary Lou, and Jordan,
Thanks for your efforts to find an equitable path forward for the registration fee. Below are some comments in [red brackets]. These comments should relate to the questions below, but I have chosen to insert them in the message content where applicable.
Regards,
Jeff
____________________________________________________________________________________________________
Jeff Kuypers | Americas Environmental Compliance | Hewlett-Packard Company | (916) 785-2552
-----Original Message-----
From: PICKERELL Loretta [mailto:PICKERELL.Loretta@deq.state.or.us]
Sent: Thursday, March 08, 2012 8:21 AM
To: 'Bailey Payne'; 'Becky Jarvis'; 'Betty Patton'; 'Craig Lorch'; 'Erik Stromquist'; 'Gail Zuro'; 'Jason Linnell '; Kuypers, Jeffrey A (Environmental Compliance, Americas); 'Jim Craven'; 'Lee Fortier'; 'Mary Jacques'; 'Michael Moss'; 'Mike Watson'; 'Scott Klag'; 'Tim Rocak'
Cc: ' dkumar@warren-news.com'; 'aeudis@wm.com'; 'bhenry@bentonhabitat.org'; 'bpeterson@universalrecyclers.com'; 'cmanley@sanyotv.com'; 'cspivey@ecsrefining.com'; 'ddiaz@universalrecyclers.com'; 'mrmnj@hotmail.com'; 'paulpony4@hotmail.com'; 'tirvine@TotalReclaim.com'; 'Tricia Conroy '; 'vernamr@us.panasonic.com'; 'walcorn@ce.org'; 'katt.fretwell@tek.com'; 'mrmnj@hotmail.com'; 'tirvine@TotalReclaim.com'; 'ddiaz@universalrecyclers.com'; 'gregg.chason@pnf-usa.com'; PERRY Marylou; PALMERI Jordan; PICKERELL Loretta
Subject: E-Cycles Advisory Committee - March 6, 2012 meeting
Advisory committee and interested parties -
At yesterday’s E-Cycles fee rulemaking advisory committee meeting we discussed proposed concepts for the registration fee rule with a goal of proposing rules for public comment on April 1. As discussed, we are inviting additional comment particularly on (a) the proposed fee structure to generate the target revenue for each year and (b) the process for setting, reviewing and revising target revenue to approximately match program costs. Please send comments to the group above or to Mary Lou Perry and me ASAP but no later than March 16, so we can consider them in drafting proposed rules.
The rule concepts proposed for discussion are as follows:
a) Fee model #2, Tier structure B, with a $35K cap and a minimum fee of $200. [This is a reasonable approach of the models proposed and based on the circumstances in OR as I understand them. Of course, HP prefers as small a cap as possible—$35K is a very high registration fee compared to most other states, so at a very minimum do not raise the cap any higher. Prefer a lower cap if possible, of course, considering that the work done for each mfr in registration is similar. Also to reiterate, please do not present this topic only as “big mfrs pushing $X down to smaller mfrs”, but rather at least also include the reverse perspective that this caps the degree to which “large mfrs must subsidize the registration fee of small mfrs”. As I expressed on the call this week, I don’t want small mfrs to get the impression that large mfrs are taking some unfair advantage, which is not the case.]
b) Process for target revenue to be put in the rules:
(i) Target revenue will be the total amount needed to approximately match DEQ’s costs in implementing the E-Cycles program (ORS 459A.305-355).
(ii) Target revenue for 2012 is $415,000.
[I appreciate that you have provided information about the budget composition to stakeholders—at this time I have no specific further comment.]
(iii) Target revenue for 2013 is $435,000
• Includes estimated costs for adding printers and registering printer manufacturers beginning in 2013 (for plans to begin collecting in 2015).
• Increased costs will be offset at least in part by registration fees for printer manufacturers
[Considering that the Dept argued and Senator Dingfelder accepted the argument during the 2011 legislative session that the number of printer manufacturers to be added is very small (and that was part of the rationale used to not add other devices, and which HP disagreed with), it is surprising that it would cost an additional $20K to register this small group of manufacturers. NOTE: In a “straw proposal” by the Dept in March 2011, the Dept claimed that “adding printers will add an estimated 15 additional manufacturers” and “adding multi-function printers will add an estimated 12 additional manufacturers.” I presume that you already have the processes set up generally for mfr registration, and that this should not require substantial added work.]
(iv) Require DEQ to report annually its program budget, revenue and expenditures
(v) Authorize DEQ to revise target revenue after consultation with an advisory workgroup consisting of representatives of manufacturers and other designated stakeholders.
(vi) Limit annual increases in target revenue to 10% without a rule change. Exclude recovery of unpaid fees and adding new products from the limit.
• Limit would include mandated cost increases (e.g., health insurance, cost-of-living increases) that cannot be offset by paring other program costs.
• Limit would also include costs of building the registration database (project is currently on hold to allow time to explore program changes that would reduce DEQ’s registration functions). [HP is very concerned about what is meant by “explore program changes that would reduce DEQ’s registration functions”. For example, HP would strongly object to any move away from use of return share in the assessment of computer manufacturer obligations. We welcome careful review of how to ensure that necessary data tracking by the Dept is managed as efficiently as possible, but HP is not eager to reopen the OR e-recycling law for this topic.]
Questions:
1. What comments, suggestions or concerns do you have about the proposed fee model or process for setting/revising target revenue?
2. Does the target revenue process strike the right balance considering costs to implement, flexibility, cost controls, stakeholder involvement and oversight?
3. What changes do you suggest?
Presentations from the advisory committee meetings are posted on the E-Cycles rulemaking webpage: http://www.deq.state.or.us/lq/ecycle/rulemaking.htm. We have also added a new document, "Units and Price/Unit by Fee Tier," showing the average number of units and price/unit in each fee tier for the existing and proposed fee model to help address questions that came up at the meeting.
Please feel free to contact Jordan Palmeri if you have questions or want to discuss the fee models, palmeri.jordan@deq.state.or.us<mailto:palmeri.jordan@deq.state.or.us>, (503) 229-6766. You may also contact me about the target revenue process and other issues. I will be out of the office through next Wednesday, 3/14, but will be checking email and voice mail periodically and will get back to you. You can also contact Mary Lou Perry, perry.marylou@deq.state.or.us<mailto:perry.marylou@deq.state.or.us> or 503-229-5731.
We may also try to schedule a advisory committee conference call for late March.
Again, we appreciate your time, effort, and expertise in developing this registration fee proposal.
Loretta
Loretta Pickerell, Manager
Solid Waste Policy and Program Development
Oregon Department of Environmental Quality
811 SW Sixth Ave.
Portland, OR 97204
503-229-5808, fax 503-229-6977
pickerell.loretta@deq.state.or.us