98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5457

 

Introduced , by Rep. Patrick J. Verschoore

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Paint Stewardship Act. Requires each producer to join the representative organization. Requires the representative organization to submit a plan to the Director of the Environmental Protection Agency for the establishment of a paint stewardship program. Sets forth requirements for the program. Requires the representative organization, in conjunction with an independent auditor, to propose, and the Agency to approve, a fee that will be added to the cost of all architectural paint sold to retailers and distributors in this State. Creates a state-action antitrust exemption for actions taken under the Act. Prohibits, after the implementation of the paint stewardship program, a producer, distributor, or retailer from selling or offering for sale architectural paint to any person in the State if the producer is not a member of the representative organization. Authorizes the imposition of civil penalties for violations of the Act. Sets forth fees for the program. Provides that no person shall incinerate architectural paint or industrial maintenance coatings in this State after July 1, 2016. Effective on January 1, 2015.


LRB098 19580 MGM 54772 b

 

 

A BILL FOR

 

HB5457LRB098 19580 MGM 54772 b

1    AN ACT concerning safety.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the Paint
5Stewardship Act.
 
6    Section 2. Findings. The General Assembly finds that:
7    (a) Leftover architectural paints are a waste management
8issue and present environmental, health, and safety risks,
9especially to workers in the solid waste industry. During waste
10collection and processing, wet paint can create spills and
11splashes and oil paint and aerosol containers may rupture,
12releasing fumes hazardous to workers, and the remaining liquids
13contribute to leachate problems in landfills. Some local
14governments provide collection sites or events for latex paint
15in order to provide their residents with some disposal options
16and to keep latex paint out of the solid waste stream. However,
17residents and small businesses need more convenient options for
18disposal of architectural paint. Drying latex for disposal is
19difficult for many residents and this process wastes latex
20paint that could otherwise be reused or recycled. Local
21government special and moderate-risk waste collection programs
22are heavily impacted by the cost of managing unwanted
23architectural paints and these costs decrease the available

 

 

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1funds to address other hazardous and hard to handle materials.
2    (b) An estimated average of 10% of architectural paint
3purchased becomes leftover paint nationally. Current programs
4only collect a fraction of the potential leftover paint for
5proper reuse, recycling, or disposal. There is not a
6comprehensive Statewide end-of-life management plan for
7architectural paint which results in significant missed
8opportunities to reduce, reuse, and recycle paint.
9    (c) It is in the best interest of this State for paint
10manufacturers to assume responsibility for development and
11implementation of a cost-effective paint stewardship program
12that will: develop and implement strategies to reduce the
13generation of leftover paint; promote the reuse of leftover
14paint; and collect, transport, and process leftover paint for
15end-of-life management, including reuse, recycling, energy
16recovery, and disposal. A paint stewardship program will follow
17the paint waste management hierarchy for managing and reducing
18leftover paint in the order as follows: reduce consumer
19generation of leftover paint; reuse; recycle; and provide for
20energy recovery and disposal. Requiring paint manufacturers to
21assume responsibility for the collection, recycling, reuse,
22transportation, and disposal of leftover paint will provide
23more opportunities for consumers to properly manage their
24leftover paint, provide fiscal relief for this State and local
25governments in managing leftover paint, keep paint out of the
26waste stream, and conserve natural resources.

 

 

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1    (d) Legislation is needed to establish this program in part
2because of the risk of antitrust lawsuits. The program involves
3activities by competitors in the paint industry and may affect
4the costs of prices of those competitors. As construed by the
5courts, the antitrust laws impose severe constraints on
6concerted action by competitors that affect costs or prices.
7Absent State legislation, participation in this program would
8entail an unacceptable risk of class action lawsuits. The risk
9can be mitigated by legislation that would bar application of
10federal antitrust law under the "state action" doctrine. Under
11that doctrine, federal antitrust law does not apply to conduct
12that is (1) undertaken pursuant to a clearly expressed and
13affirmatively articulated state policy to displace or limit
14competition, and (2) actively supervised by the state.
15    (e) To ensure that this defense will be available to
16protect participants in the program, it is important for State
17legislation to be specific about the conduct it is authorizing,
18and to express clearly that the State is authorizing that
19conduct pursuant to a conscious policy decision to limit the
20unfettered operation of market forces. It is also critical for
21the legislation to provide for active supervision of the
22conduct that might otherwise be subject to antitrust attack. In
23particular, the legislation must provide for active
24supervision of the decisions concerning the assessments that
25will fund the program. A clear articulation of the State's
26purposes and policies and provisions for active State

 

 

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1supervision of the program will ensure that industry
2participation in the program will not trigger litigation.
3    (f) To ensure that the costs of the program are distributed
4in an equitable and competitively neutral manner, the program
5will be funded through an assessment on producers on each
6container of paint sold in this State. That assessment will be
7sufficient to recover, but not exceed, the costs of the program
8and will be determined by the Illinois Environmental Protection
9Agency. Funds collected through the assessment will be
10submitted and used by the representative organization and will
11not be remitted to producers or retailers.
 
12    Section 5. Definitions.
13    "Agency" means the Illinois Environmental Protection
14Agency.
15    "Architectural paint" means interior and exterior
16architectural coatings sold in containers of 5 gallons or less.
17"Architectural paint" does not include adhesives and coatings
18recommended by the manufacturer or importer solely for shop
19applications or solely for application to non-stationary
20objects, such as airplanes, ships, boats, automobiles,
21railcars, equipment, and machinery. "Architectural paint" does
22not include any coating not considered an architectural paint
23under the USEPA's Architectural and Industrial Maintenance
24Coatings Rule.
25    "Director" means the Director of the Illinois

 

 

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1Environmental Protection Agency.
2    "Distributor" means a company that has a contractual
3relationship with one or more producers to market and sell
4architectural paint to retailers in this State.
5    "Environmentally sound management practices" means
6procedures for the collection, storage, transportation, reuse,
7recycling, and disposal of architectural paint, to be
8implemented by the representative organization or that
9organization's contracted partners to ensure (i) compliance
10with all applicable federal, State, and local laws,
11regulations, and ordinances and (ii) the protection of human
12health and the environment. Environmentally sound management
13practices include, but are not limited to, record-keeping, the
14tracking and documenting of the fate of post-consumer paint
15inside and outside of this State, and environmental liability
16coverage for professional services and the operations of the
17contractors working on behalf of the representative
18organization.
19    "Fund" means the Solid Waste Management Fund.
20    "Industrial maintenance coating" means a high performance
21architectural coating, including primers, sealers,
22undercoaters, intermediate coats, and topcoats formulated and
23recommended for application to substrates and labeled under the
24USEPA's Architectural and Industrial Maintenance Coatings Rule
25as, "for industrial use only", "for professional use only",
26"not for residential use", or "not intended for residential

 

 

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1use".
2    "Paint stewardship assessment" means the amount paid to the
3representative organization by producers of architectural
4paint sold in this State that is necessary to cover the cost of
5collecting, transporting, and processing post-consumer paint
6by the representative organization under the paint stewardship
7program.
8    "Post-consumer paint" means architectural paint that is
9not used by a purchaser of architectural paint.
10    "Producer" means a manufacturer of architectural paint who
11sells, offers for sale, distributes, or contracts to distribute
12architectural paint in this State.
13    "Recycling, reclamation, or reuse" means a method,
14technique, or process designed to remove any contaminant from
15waste to render the waste reusable, or any process by which
16materials that would otherwise be disposed of or discarded are
17collected, separated, or processed and returned to the economic
18mainstream in the form of raw materials or products.
19    "Representative organization" means the nonprofit
20organization created by producers to implement the paint
21stewardship program described in Section 10 of this Act.
22    "Retailer" means any person who offers architectural paint
23for sale at retail in this State.
24    "Sell" or "sale" means any transfer of title for
25consideration, including, but not limited to, remote sales
26conducted through sales outlets, catalogues, the Internet, or

 

 

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1any other similar electronic means.
2    "Shop application" means that a coating is applied to a
3product or a component of a product in a factory, shop, or
4other structure as part of a manufacturing, production, or
5repairing process.
 
6    Section 10. Paint stewardship program.
7    (a) On or before March 1, 2016, each producer shall join
8the representative organization, and the representative
9organization shall submit a plan for the establishment of the
10paint stewardship program described in this Section to the
11Director. The paint stewardship program shall:
12        (1) minimize public sector involvement in the
13    management of post-consumer paint by: (A) reducing the
14    generation of post-consumer paint, (B) promoting the reuse
15    and recycling of post-consumer paint, and (C) negotiating
16    and executing agreements to collect, transport, reuse,
17    recycle, burn for energy recovery, and dispose of
18    post-consumer paint using environmentally sound management
19    practices;
20        (2) provide for convenient and available Statewide
21    collection of post-consumer paint that, at a minimum,
22    provides for collection rates and levels of convenience
23    that are equal to, or greater than, those provided by the
24    collection programs available to consumers before the
25    implementation of the paint stewardship program;

 

 

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1        (3) propose a paint stewardship assessment;
2        (4) include a funding mechanism that requires each
3    producer who participates in the representative
4    organization to remit to the representative organization
5    payment of the paint stewardship assessment for each
6    container of architectural paint the producer sells in this
7    State;
8        (5) describe how the program provides for reasonably
9    convenient and available Statewide collection of leftover
10    paint from covered entities in urban and rural areas of the
11    State, including island communities; and
12        (6) use geographic information modeling to determine
13    the number and distribution of collection sites for the
14    following criteria: 90% of Illinois residents shall have a
15    permanent collection site within 15 miles by road; and one
16    additional permanent site shall be established for every
17    30,000 residents of a population center distributed to
18    provide convenient access in high traffic areas.
19    The representative organization shall maintain a Statewide
20list of producers and post up to date collection locations on
21its website.
22    (b) The plan shall identify each producer participating in
23the paint stewardship program and the brands of architectural
24paint sold in this State covered by the program, and it shall
25address the coordination of the paint stewardship program with
26existing household hazardous waste collection infrastructure,

 

 

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1as much as is reasonably feasible and mutually agreeable.
2    (c) Not later than 3 months after submission of the plan,
3the Director shall determine whether the plan satisfies the
4requirements of this Act.
5    (d) Not later than 3 months after the date the plan is
6approved pursuant to subsection (c), the representative
7organization shall implement the paint stewardship program.
8    (e) Any retailer may participate, on a voluntary basis and
9in accordance with any applicable provision of law or
10regulation, as a paint collection point.
11    (f) Not later than the implementation date of the paint
12stewardship program, the Agency shall list the names of
13participating producers and the brands of architectural paint
14covered by the paint stewardship program on its website.
15    (g) Upon submission of the paint stewardship plan required
16by this Section, each representative organization shall pay to
17the Agency a fee of $10,000, which the Agency shall deposit
18into the Solid Waste Management Fund. Upon approval of a paint
19stewardship program, the representative organization shall
20also pay to the Agency an annual fee of $20,000, which the
21Agency shall deposit into the Fund.
22    (h) The Agency shall review the paint stewardship program
23plans it receives for completeness and shall notify the
24representative organization in writing if a plan is incomplete.
25Within 30 days after receiving a notification of incompleteness
26from the Agency, the representative organization shall submit

 

 

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1to the Agency a plan that contains all of the required
2information. A new plan or amendment is required to be
3submitted to the Department for approval when:
4        (1) there is a change to the amount of the assessment;
5        (2) there is an addition to the products covered under
6    the program; or
7        (3) there is a revision of the product stewardship
8    organization's goals.
 
9    Section 15. Paint stewardship assessment.
10    (a) On or before March 1, 2016, the representative
11organization shall propose a uniform paint stewardship
12assessment for all architectural paint sold in this State. An
13independent auditor shall review the proposed paint
14stewardship assessment to ensure that it does not exceed the
15costs of maintaining the paint stewardship program, and the
16auditor shall recommend an amount for the paint stewardship
17assessment to the Agency.
18    (b) On and after the date of implementation of the paint
19stewardship program, the paint stewardship assessment shall be
20added to the cost of all architectural paint sold to retailers
21and distributors in this State by each producer. On and after
22the implementation date, each retailer or distributor, as
23applicable, shall add the amount of the paint stewardship
24assessment to the purchase price of all architectural paint
25sold in this State.
 

 

 

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1    Section 20. State-action antitrust exemption. Each
2producer and the representative organization shall be immune
3from liability for any claim of a violation of antitrust law or
4unfair trade practice if the conduct is a violation of
5antitrust law, to the extent the producer or representative
6organization is exercising authority pursuant to the
7provisions of this Act.
 
8    Section 25. Enforcement.
9    (a) On and after the implementation date of the paint
10stewardship program, no producer, distributor, or retailer
11shall sell or offer for sale architectural paint to any person
12in this State if the producer of the architectural paint is not
13a member of the representative organization.
14    (b) No retailer or distributor shall be found to be in
15violation of the provisions of subsection (a) if, on the date
16the architectural paint was ordered from the producer or its
17agent, the producer or the subject brand of architectural paint
18was listed on the Agency's website in accordance with the
19provisions of subsection (f) of Section 10.
20    (c) The Attorney General or State's Attorney may request,
21and the Court may impose, after providing notice and
22opportunity to be heard, a civil penalty in the amount of $500
23a day against any person who violates the terms of this Act.
24    (d) Nothing in this Act prohibits a retailer or distributor

 

 

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1from selling their inventory of architectural paint existing on
2the effective date of this Act.
3    (e) The penalties provided for in this Section may be
4recovered in a civil action brought in the name of the people
5of the State of Illinois by the State's Attorney of the county
6in which the violation occurred or by the Attorney General. Any
7funds collected under this Section in an action in which the
8Attorney General has prevailed shall be deposited in the
9Environmental Protection Trust Fund, to be used in accordance
10with the provisions of the Environmental Trust Fund Act.
 
11    Section 30. Consumer education. Producers or the
12representative organization shall provide consumers with
13educational materials regarding the paint stewardship
14assessment and paint stewardship program. Those materials
15shall include, but not be limited to, information regarding
16available end-of-life management options for architectural
17paint offered through the paint stewardship program and
18information that notifies consumers that a charge for the
19operation of the paint stewardship program is included in the
20purchase price of all architectural paint sold in this State.
 
21    Section 35. Report to the Environmental Protection Agency.
22On or before October 15, 2016, and annually thereafter, the
23representative organization shall submit a report to the
24Director that details the paint stewardship program. The report

 

 

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1shall include, but not be limited to: (1) a description of the
2methods used to collect, transport, and process post-consumer
3paint in this State; (2) the volume of post-consumer paint
4collected in this State; (3) the volume and type of
5post-consumer paint collected in this State by method of
6disposition, including reuse, recycling, and other methods of
7processing; (4) the total cost of implementing the program, as
8determined by an independent financial audit, as performed by
9the independent auditor; (5) samples of educational materials
10provided to consumers of architectural paint and an evaluation
11of the methods used to disseminate those materials; and (6) a
12list of collection locations. The Agency may post copies of the
13plan and annual reports on its website.
 
14    Section 40. Incineration prohibited. No person shall
15incinerate architectural paint or industrial maintenance
16coatings in this State after July 1, 2016.
 
17    Section 99. Effective date. This Act takes effect January
181, 2015.