DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT

Solid and Hazardous Waste Commission

Hazardous Materials and Waste Management Division

6 CCR 1007-2 Part 1
STATEMENT OF BASIS AND PURPOSE
AND SPECIFIC STAUTORY AUTHORITY FOR

Revision to Regulations Pertaining to Solid Waste Sites and Facilities (6 CCR 1007-2, Part 1) – Addition of Section 1.7.7 Regulations (Paint Stewardship Program Fees) and Associated Additions to Section 1.2 (Definitions)

Basis and Purpose

I. Statutory Authority

These regulations are promulgated pursuant to the authority granted to the Solid and Hazardous Waste Commission in Section 25-17-404(4), C.R.S.   These regulations are a direct result and implementation of SB14-029, passed by the legislature in 2014.

II. The Architectural Paint Stewardship Act 

The Architectural Paint Stewardship Act (the “Act”) requires the Department of Public Health and Environment (the “Department”) to oversee the implementation and operations of a product stewardship program for the collection, transportation and management of postconsumer paint. While the paint industry stewardship organization is responsible for the operations and management of postconsumer paint, the Department is required by the Act to oversee the stewardship organization’s program plan and annual results as reported in an annual report on the program.  The addition of part 4 article 17 of title 25 C.R.S. includes the following obligation of the Department to be incorporated into the solid waste regulations:

§ 25-17-404(4). When submitting a paint stewardship program plan, a revised plan, or an annual report, as required by Section 25-17-405, C.R.S. one or more producers or a stewardship organization contracted by one or more producers shall pay a paint stewardship program plan fee, revised plan fee, or annual report fee in an amount that the commission has established or adjusted by rule. 

III. Purpose of Proposed Section 1.7.7 Regulations

The purpose of the proposed Section 1.7.7 regulations is to implement the statutory requirement directing the Solid and Hazardous Waste Commission to set a paint stewardship program plan fee, revised plan fee, or annual report fee by rule and the associated definitions. 

Section 2 of SB14-029 appropriated $84,045 for fiscal year 2015 to cover Department costs associated with the implementation and oversight of the paint stewardship program, and $9,108 for the purchase of legal services. The established annual sum for the paint stewardship cash fund will go towards the Department’s expenses to review and provide oversight of the annual report, program plan, and revised plan.  Rather than billing the paint stewardship organization for a specific fee per each document that is required at different times, the Department will aggregate all fees associated with the review of the annual report, program plan, and revised plan to be assessed as a single annual fee. The annual fee will be adopted in Section 1.7 Annual Fees, specifically as Section 1.7.7 Paint Stewardship Program Fees. 

Discussion of Regulatory Proposal

I. New and Modified Definitions

The proposed Section 1.7.7 regulations require new definitions. These changes summarized below will be incorporated into Section 1.2 of the solid waste regulations (6 CCR 1007-2, Part 1). The proposed definitions are taken verbatim from the definitions in the Act with the exception of adding the word “paint” to clarify the definition of “stewardship organization.” This is a necessary clarification as the Department anticipates there will likely be additional stewardship organizations for other types of materials included in the solid waste definitions in the future.  

The following definitions are being added to Section 1.2:

1.	Architectural paint
2.	Paint producer
3.	Paint stewardship organization
4.	Paint stewardship program

II. Authorization

Section 1.7.7(A) references the statutory authority pursuant to Section 25-17-404(4), C.R.S. that directs the Department to collect fees necessary for implementation and oversight of the paint stewardship program, including oversight of the paint stewardship organization plans and annual reports.  Pursuant to Section 25-17-408, C.R.S., all fees collected under Section 25-17-404(4), C.R.S., shall be transferred to the State Treasurer to be credited to the paint stewardship program cash fund. 
III. Applicability  

Section 1.7.7(B) highlights when the paint stewardship annual fees are effective, what the annual fees apply to, who is subject to the annual fees, and what the total sum of the annual fees is.

This section clarifies that the paint product stewardship organization, or one or more paint producers operating outside of a paint product stewardship organization, are subject to the fees established for each program plan, revised plan and annual report submitted to the Department. While it is expected that only one product stewardship organization will manage the paint stewardship program for all paint producers in Colorado, the regulations account for the possibility of more than one entity providing a paint stewardship program. 

Stakeholder Involvement in the Process

The Department held three stakeholder meetings between January and March of 2015 to receive comments from stakeholders regarding the Department’s Proposed Paint Stewardship Program fee regulations and the paint stewardship draft program plan submitted by PaintCare Inc. (“PaintCare”).  PaintCare is a 501(c)(3) non-profit organization created by the American Coatings Association - the primary trade association for the paint and coatings industry. 

The Department established an email notification list which included all interested stakeholders including:  local governments; registered recycling facilities / paint re-manufactures; landfills and transfer stations; household hazardous waste (“HHW”) collection centers; HHW and hazardous waste transporters; and other private operators and industry associations including the Colorado Association for Recycling (“CAFR”), Solid Waste Association of North America (“SWANA”), Colorado Municipal League, and Colorado Counties, Inc.  

During the stakeholder process, the Department followed the procedures required by Executive Order No. 5 to notify local governments regarding the upcoming revisions to the solid waste regulations. All municipal and county governments who responded to the Executive Order No. 5 survey that asked to be included in the stakeholder process were added to the email distribution list for notification of all meetings and related regulatory documents. 

During the stakeholder meetings, many of the discussions and questions raised by stakeholders were focused on the paint stewardship program plan and objectives submitted by PaintCare. Primary interest included who would be a collection facility, transporter and a processor. Further, stakeholders were interested in how each of these would be selected and worked into the stewardship program. The stakeholders had very few questions related to the draft regulations including the assessment fee.  Prior to and during the stakeholder process, the Department believed the regulations and fees would apply to the assessment fee. Following the stakeholder meetings, the Department was advised the fees apply only to reimburse the Department for internal costs associated with reviewing the program plan, revised plan and annual report submittals. 

Alternatives Considered and Why Rejected

The Department’s first draft regulations focused on setting the point of sale assessment fees for the paint stewardship program. However, following advice from the Colorado Attorney General’s Office, the Division revised its interpretation of the Act’s requirements and amended the Regulations to only address program fees pursuant to 25-17-404(4), C.R.S.  The Department was advised of the revised interpretation after the Department held the three stakeholder meetings.  However, interested parties will be able to review and comment on the assessment fees during on-going plan review meetings. 

Cost Benefit Analysis

A cost benefit analysis will be performed if requested by the Colorado Department of Regulatory Agencies.