1 NPCA Board Resolution

2 September 2006 – PPSI Meeting State and Local governments requested a decision from NPCA at its March 2007 Board meeting State and Local governments requested a decision from NPCA at its March 2007 Board meeting Will the industry help finance a national post consumer paint management system? Will the industry help finance a national post consumer paint management system?

3 NPCA Board Resolution As per the government request – on March 21, 2007 – NPCA Board approved the “resolution” As per the government request – on March 21, 2007 – NPCA Board approved the “resolution” However, NPCA was able to reach consensus by acknowledging there are “important considerations that must be addressed in a definitive way…” However, NPCA was able to reach consensus by acknowledging there are “important considerations that must be addressed in a definitive way…” These concerns can be summarized under the headings of These concerns can be summarized under the headings of Funding Funding Roles of industry/government Roles of industry/government Role of recycling. Role of recycling.

4 Important Considerations Consumer education must be a cornerstone of the system, to reduce the volume of leftover paint and the cost of its management Consumer education must be a cornerstone of the system, to reduce the volume of leftover paint and the cost of its management Collecting or recycling latex paint in rural areas is not cost-effective Collecting or recycling latex paint in rural areas is not cost-effective Collecting or recycling latex paint in cans less than one-third full is also not cost-effective Collecting or recycling latex paint in cans less than one-third full is also not cost-effective Oil-based paint should be collected for disposal (due to its ignitability) Oil-based paint should be collected for disposal (due to its ignitability)

5 Important Considerations (cont.) No mandatory “take back” at retail locations – although retailers and manufacturers may take back product voluntarily No mandatory “take back” at retail locations – although retailers and manufacturers may take back product voluntarily Industry expects to partner with government to share the cost and responsibility of managing post-consumer paint Industry expects to partner with government to share the cost and responsibility of managing post-consumer paint Where available, existing government collection infrastructure should be utilized Where available, existing government collection infrastructure should be utilized Where non-existent, industry may need to subsidize a new collection system (e.g., such as the “Product Care” system in British Columbia) Where non-existent, industry may need to subsidize a new collection system (e.g., such as the “Product Care” system in British Columbia)

6 Important Considerations (cont.) Paint collection and management must be as cost-effective as possible Paint collection and management must be as cost-effective as possible Costs should be fair, transparent to the consumer, and collected at retail Costs should be fair, transparent to the consumer, and collected at retail An industry-run organization is needed to collect and allocate funds with full accountability An industry-run organization is needed to collect and allocate funds with full accountability

7 Pilot A pilot project is needed to work out details of system, including: A pilot project is needed to work out details of system, including: Project funding Project funding Scope dependent Scope dependent Retailer activities Retailer activities Industry/Government Roles Industry/Government Roles Build on current collection Build on current collection Disposal options Disposal options Role of Recycling Role of Recycling Existing facilities Existing facilities Viability of expansion Viability of expansion

8MOU Seek NPCA Board approval July 2007 Goals/Objectives: Continue PPSI dialogue Continue PPSI dialogue Pursue the development of a nationally coordinated system Pursue the development of a nationally coordinated system Undertake a pilot project to work through critical issues and gather information Undertake a pilot project to work through critical issues and gather information

9 MOU Work Agreements for Pilot Project: Timeframe – 24 months (6 months to plan/develop, 12 months to execute, and six months to review results/ramp up for national promotion) Timeframe – 24 months (6 months to plan/develop, 12 months to execute, and six months to review results/ramp up for national promotion) Location Location Defined roles/responsibilities Defined roles/responsibilities Program funding Program funding Role of recycling Role of recycling Goals/measurements Goals/measurements

10 MOU Limitations: Voluntary Voluntary NPCA to sign on behalf of industry NPCA to sign on behalf of industryAppendix: Pilot Project details Pilot Project details