415 ILCS 175/5

(415 ILCS 175/5)

Sec. 5. Findings. The General Assembly finds that:

(1) Leftover architectural paints present significant waste management issues for counties and municipalities and create costly environmental, health, and safety risks if not properly managed.

(2) Nationally, an estimated 10% of architectural paint purchased by consumers is leftover. Current governmental programs collect only a fraction of the potential leftover paint for proper reuse, recycling, or disposal. In northern Illinois, there are only 4 permanent household hazardous waste facilities, and these facilities do not typically accept latex paint, which is the most common paint purchased by consumers.

(3) It is in the best interest of this State for paint manufacturers to assume responsibility for the development and implementation of a cost-effective paint stewardship program that will educate consumers on strategies to reduce the generation of leftover paint; provide opportunities to reuse leftover paint; and collect, transport, and process leftover paint for end-of-life management, including reuse, recycling, and disposal. Requiring paint manufacturers to assume responsibility for the collection, recycling, reuse, transportation, and disposal of leftover paint will provide more opportunities for consumers to properly manage their leftover paint, provide fiscal relief for this State and local governments in managing leftover paint, keep paint out of the waste stream, and conserve natural resources.

(4) Similar architectural paint stewardship programs currently operate in 11 jurisdictions and successfully divert a significant portion of the collected paint waste from landfills. These paint stewardship programs are saving counties and municipalities the cost of managing paint waste and have been successful at recycling leftover paint into recycled paint products as well as other products. For instance, in the State of Oregon, 64% of the latex paint collected in the 2019-2020 fiscal year was recycled into paint products, and in Minnesota, 48% of the latex paint collected during the same period was reused or recycled into paint products. Given the lack of access to architectural paint collection programs in Illinois, especially for leftover latex architectural paint, and the demonstrated ability of the paint industry to collect and recycle a substantial portion of leftover architectural paint, this legislation is necessary. It will create a statewide program that diverts a significant portion of paint waste from landfills and facilitates the recycling of leftover paint into paint and other products.

(5) Establishing a paint stewardship program in Illinois will create jobs as the marketplace adjusts to the needs of a robust program that requires transporters and processors. Certain infrastructure already exists in the State, and the program may attract additional resources.

(6) Legislation is needed to establish this program in part because of the risk of antitrust lawsuits. The program involves activities by competitors in the paint industry and may affect the costs or prices of those competitors. As construed by the courts, the antitrust laws impose severe constraints on concerted action by competitors that affect costs or prices. Absent State legislation, participation in this program would entail an unacceptable risk of class action lawsuits. These risks can be mitigated by legislation that would bar application of federal antitrust law under the "state action" doctrine. Under that doctrine, federal antitrust law does not apply to conduct that is (1) undertaken pursuant to a clearly expressed and affirmatively articulated state policy to displace or limit competition and (2) actively supervised by the state.

(7) To ensure that this defense will be available to protect participants in the program, it is important for this State's legislation to be specific about the conduct it is authorizing and to express clearly that the State is authorizing that conduct pursuant to a conscious policy decision to limit the unfettered operation of market forces. It is also critical for the legislation to provide for active supervision of the conduct that might otherwise be subject to antitrust attack. In particular, the legislation must provide for active supervision of the decisions concerning the assessments that will fund the program. A clear articulation of the State's purposes and policies and provisions for active State supervision of the program will ensure that industry participation in the program will not trigger litigation.

(8) To ensure that the costs of the program are distributed in an equitable and competitively neutral manner, the program will be funded through an assessment on each container of paint sold in this State. That assessment will be sufficient to recover, but not exceed, the costs of sustaining the program and will be reviewed and approved by the Environmental Protection Agency. Funds collected through the assessment will be used by the representative organization to operate and sustain the program.

(Source: P.A. 103-372, eff. 1-1-24.)