121 REPORT – CRMA – May 2016

In This Issue

NEW 4TH WARD ALDERMAN
COUNCIL COMMITTEE CHANGES
LEGISLATIVE INTRODUCTIONS

WELCOME ALDERMAN KING

The 4th Ward has a new Alderman to replace former Alderman Will Burns who resigned after taking a job in the private sector.  Alderman Sophia King is the founder of a non-profit group based on the south side that focuses on job creation and economic opportunity in African American communities.  She was recommended to the Council for approval after first being chosen from a pool of applicants submitted to a committee formed by Mayor Emanuel.  The 4th Ward is located in the Kenwood-Hyde Park area and is the home of President Barack Obama.

Due to the timing of the appointment in relation to the next general city election, Alderman King must run in a special election for the seat.  She has formed a political committee to do just that and will most likely be challenged by a number of other community members interested in the position.  The special election will take place in February 2017 to determine who will serve the last two years of the general term.  Alderman King will have a running start and one budget season under her belt before that happens.  Of interest to CRMA members, Alderman King has been assigned to the Health and Environmental Protection Committee (plastic bags ordinance) as well as the Committee on Workforce Development and Audit (starting wage ordinance).

We would like to congratulate Alderman King on her appointment and we look forward to working with her.

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COMMITTEE SHUFFLE

 

With the resignation of former Alderman Will Burns, who was the Chair of the Committee on Education and Child Development, there was lots of movement in an attempt to fill the vacancy and name new committee chairs.

CRMA would like to congratulate all of the new Chairman and Vice Chairs.

Committees are now chaired by the following:

 

Aviation

Chairman:  Ald. Michael Zalewski (23rd Ward)

Vice Chair:  Ald. Nicholas Sposato (38th Ward)

 

Budget and Government Operations

Chairman:  Ald. Carrie Austin (34th Ward)

Vice Chair:  Ald. Jason Ervin (28th Ward)

 

Committees, Rules and Ethics

Chairman:          Ald. Michelle Harris (8th Ward)

Vice Chairs:        Ald. Carrie Austin (34th Ward)

Ald. Edward M. Burke (14th Ward)

Ald.  Marty Quinn (13th Ward)

 

Economic, Capital and Technology Development

Chairman:  Ald. Proco Joe Moreno (1st Ward)

Vice Chair:  Ald. Leslie Hairston (5th Ward)

 

Education and Child Development

Chairman:  Ald. Howard Brookins (21st Ward)

Vice Chair:  Ald. Michele Smith (43rd Ward)

 

Finance

Chairman:  Ald. Edward M. Burke (14th Ward)

Vice Chair:  Ald. Patrick O’Connor (40th Ward)

 

Health and Environmental Protection

Chairman:  Ald. George Cardenas (12th Ward)

Vice Chair:  Ald. Harry Osterman (48th Ward)

 

Housing and Real Estate

Chairman:  Ald. Joe Moore (49th Ward)

Vice Chair:  Ald. Gregory Mitchell (7th Ward)

 

Human Relations

Chairman:  Ald. Pat Dowell (3rd Ward)

Vice Chair:  Ald. Jason Ervin (28th Ward)

 

License and Consumer Protection

Chairman:  Ald. Emma Mitts (37th Ward)

Vice Chair:  Ald. Debra Silverstein (50th Ward)

 

Pedestrian and Traffic Safety

Chairman:  Ald. Walter Burnett (27th Ward)

Vice Chair:  Ald. Deborah Mell (33rd Ward)

 

Public Safety

Chairman:  Ald. Ariel Reboyras (30th Ward)

Vice Chair:  Ald. Willie Cochran (20th Ward)

 

Special Events, Cultural Affairs and Recreation

Chairman:  Ald.  Thomas Tunney (44th Ward)

Vice Chair:  Ald. Roderick Sawyer (6th Ward)

 

Transportation and Public Way

Chairman:  Ald. Anthony Beale (9th Ward)

Vice Chair:  Ald. Matthew O’Shea (19th Ward)

 

Workforce Development and Audit

Chairman:  Ald. Patrick O’Connor (40th Ward)

Vice Chair:  Ald. Roberto Maldonado (26th Ward)

 

Zoning, Landmarks and Building Standards

Chairman:  Ald. Daniel Solis (25th Ward)

Vice Chair:  James Cappleman (46th Ward)

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CITY COUNCIL AND COOK COUNTY ORDINANCES AND RESOLUTIONS

INTRODUCTIONS

 

Discrimination Regarding Public Accommodations

Sponsors:  Mayor Rahm Emanuel, Ald. Edward M. Burke (14th Ward), Ald. James Cappleman (46th Ward) and 4 others

Committee:  Human Relations

This proposal seeks to amend the city’s Human Rights ordinance to allow people to use the public accommodation in accordance with whatever gender the person identifies with.  People will no longer need to use a public accommodation in accordance with their government-issued form of identification.  This proposal is similar to the proposal passed in Charlotte, NC and subsequently overturned by the North Carolina legislature,  sparking a very heated national debate.

 

Proposal to Amend Spray Paint Ban

Sponsor:  Ald. Edward M. Burke (14th Ward) and Ald. Matthew O’Shea (19th Ward)

Committee:  License and Consumer Protection

The sale of spray paint, broad-tipped markers and etching materials have been banned in the city for many years.  Originally passed as a way to decrease the amount of graffiti in the city, the ban has done little to accomplish that goal as spray paint can easily be purchased across the city’s borders and online.  This initiative recognizes that there are legitimate uses for spray paint and Chicago residents would like to access this useful product at their local retailer.  The proposal continues to limit access to minors by requiring the written consent of a parent or legal guardian before purchase.  Retailers would be required to keep the products within eyesight of employees or under video surveillance or in a locked case accessible only by employees.  Lastly, retailers would have to display a sign warning of the consequences of vandalism.  Minors caught in possession of graffiti implements and others assisting such minors in obtaining the products illegally will be fined  and could be ordered to complete community service.

CRMA enthusiastically supports this measure and would like to thank Aldermen Burke and O’Shea for considering this amendment.

 

Proposal to Amend Mortgagee Requirements to Adequately Maintain Property in Default

Sponsor:  Ald. Edward M. Burke (14th Ward)

Committee:  Finance

This proposal requires the mortgagee of any building (residential or commercial) to register the building with the department within 10 days after a default.  The mortgagee will be required to annually renew the registration as long as the building remains in default.

Resolutions to Add Public Questions to the November Ballot

In each general election, the City Council poses questions to the voters regarding issues of public importance in order to influence the public discourse in advance of potential legislation.  The questions are sent to committees for consideration and voted on by the full Council before appearing on the November ballot.  Three questions are usually chosen, and will be of interest to CRMA members.

 

Should the State of Illinois provide full and equitable funding for the Chicago Public Schools?

Sponsor:  Ald. Howard Brookins, Jr. (21st Ward)

Committee:  Committees, Rules and Ethics

A number of fiscal issues still remain without a resolution in this legislative session, one being pension reform and school funding.  Both Sen. Andy Manar, D-Bunker Hill and Governor Bruce Rauner have put forth proposals to overhaul how schools are funded.  Sen. Manar’s plan has been criticized because it would decrease the amount going to many suburban school districts that are well-funded and that have high-performing students, in order to shift taxpayer money to poor downstate districts and the Chicago Public Schools (CPS).  Gov. Rauner’s plan has also been questioned because his formula would decrease the allotment for CPS and increase funding to wealthy suburban areas over time.  It is clear that legislators want school funding reform, but they are far from agreement on how it should be accomplished.  Considering the legislature only has two more weeks before it adjourns, it seems less likely that any further funding for CPS will be approved prior to the November elections.  If that happens, it is almost certain that Mayor Emanuel will seek to raise revenue from other sources.  This could spell an additional property tax increase along with any number of increases in existing taxes as well as new product-based taxes.  This question will be used to coerce lawmakers and the Governor to find a long-term solution to school funding before the legislative session adjourns on May 31st.

 

Shall the City of Chicago grant the people of Chicago the right to elect an Independent Airport Authority, to provide independent oversight and management of O’Hare and Midway International Airports?

Sponsor:  Ald. Scott Waguespack (32nd Ward)

Committee:  Aviation

This question comes in the wake of contract issues with unions at O’Hare and Mayor Emanuel’s decision to award the janitorial contract to a company that does not use union labor.  This question also comes after an ordinance passed last year to create a labor peace “agreement” which will give labor unions wider latitude to organize concessions at the airport.  Arguing that most major airports are not actually run by the city, but by boards or other independent authorities, the supporters of the proposal wish to take power away from the Mayor and put it in the hands of an elected board.  This question will be used to build momentum for a possible ordinance to redirect the power.

 

Should the State of Illinois strengthen penalties for the illegal trafficking of firearms and require background checks for gun dealers and their employees?

Sponsor:  Mayor Rahm Emanuel and 43 others
Committee:  Committees, Rules and Ethics

The General Assembly is currently considering a bill that would license gun dealers.  HB 1016 Amendment #1 and Amendment #2 (Rep. Kathleen Willis, D-Northlake) would require gun dealers to obtain two different licenses and all of their employees that sell guns to obtain an agent card.  It would also require an examination, training and continued education credits.  No other state that licenses gun dealers requires more than one license, nor do they require agent cards, exams or training.  This overly burdensome licensing scheme is currently being negotiated, and it is likely that the bill will be amended before being sent back to committee for consideration.

 

Resolution to Encourage Expanded Sealing of Criminal Records

Sponsors:  Ald. James Cappleman (46th Ward), Ald. Carrie Austin (34th Ward), Ald. Nicholas Sposato (38th Ward) and 8 others

Committee:  Public Safety

The resolution urges the General Assembly to broaden the number of crimes eligible for sealing.  Once criminal records are sealed, most employers (including retailers and restaurateurs) are unable to access them.  Conversely, state’s attorneys are able to unseal records.  CRMA opposes any measure that limits an employer’s ability to see a person’s criminal history unless that history pertains to crimes committed when the person was a minor.

PASSED INITIATIVES

Neighborhood Opportunity Fund

Sponsors:  Mayor Rahm Emanuel, Ald. Daniel Solis (25th Ward), Ald. Pat Dowell (3rd Ward) and 4 others

This ordinance will create a fund to encourage commercial development in critical areas on the south and west sides of the city through re-directing funds paid to the city from developers wishing to increase the floor area of buildings in the downtown zone.  The hope is that this fund will encourage more retail development in designated neighborhoods.  Here is the breakdown of the ordinance:

 

1.  Change and reallocate the FAR bonus system

Currently, developers in downtown who wish to increase the floor area of their building can do so if they contribute to the FAR bonus system fund and make specific design improvements aimed at beautification and allowing for more interaction with the local community.  For example, under the current zoning law, a developer submits a plan to build a condo building with 25 stories which is the maximum allowed in that particular area.  The city will allow the developer to increase the FAR to 28 stories if the developer pays into a fund and agrees to make improvements such as building a winter garden on the property or providing set-backs and open spaces.

While the FAR bonus system has worked well to create better design that is inclusive of the community at large, the city is no longer convinced that such an incentive is actually needed to encourage developers to make these design improvements.  Frankly, the city believes that these design improvements add value to the building and developers would probably do such improvements on their own.  The city now wishes to revamp the FAR bonus system to remove design-based improvements as a qualification for increased FAR and instead approve FAR bonuses under the condition that a contribution be made into the Neighborhood Opportunity Bonus fund.  This fund would be divided up into three separate funds to encourage commercial development, support the restoration of landmarked properties and fund local improvements within the immediate vicinity of the new commercial developments.

 

2.  Neighborhood Opportunity Bonus Fund

This fund would support commercial development in designated areas of the south and west sides of the city.  80% of the FAR bonus system will now be dedicated specifically to this fund.  Developers and business owners could apply for a grant from this fund and can use the money for such things as site preparation, rehabilitation of existing property, local hiring subsidies, building acquisition and other uses that will encourage commercial development in neighborhoods of need.  Grants under $250,000 would be approved directly by the Commissioner, and grants above that amount would have to go through city council for approval.  Preference for grant funding will go to projects that the city considers “catalytic.”  They want developments that will spur further development, for example, grocery stores that attract smaller stores to the immediate area.   According to their numbers, they expect that the fund could collect $50 million over the next 3-4 years.

 

3.  Expansion of Downtown Zoning

As a sweetener for developers to build and contribute to the FAR bonus system, the city will expand the current boundaries for “D” zoning on a case by case basis.

Effective Date:  June 1, 2016, but will not affect current proposals

 

Hours of Operation for Downtown Outdoor Patios

Sponsor:  Ald. Brendan Reilly (42nd Ward)

This ordinance will temporarily extend the hours of operation during the week for the busy downtown outdoor patio season.  Patios can close at midnight and open again at the legally established hour of opening until December 1, 2016.

Effective Date:  July 21, 2016

 

License Suspension Amendment for Low-Risk Food Establishments

Sponsor:  Mayor Rahm Emanuel

This ordinance will allow the Commissioner to immediately suspend a business license for failure to timely submit a self-inspection report.

Effective Date:  July 21, 2016

 

Cook County Home Rule Tax Clean-Up

Sponsor:  Cook County Board President Toni Preckwinkle

This ordinance is a clean-up ordinance initiated by the Department of Revenue to ensure the Cook County Code reflects current industry practices for certain taxes and revenue items and that compliance and payment efforts are uniform and standardized.  All changes are revenue neutral.

The next City Council meeting will take place on Wednesday, June 22, 2016 at 10am in the Council Chambers.

Contact Information

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TanyaTricheTanya Triche

Vice President & General Counsel

312/726-4600

ttriche@irma.org

 

121 Report – CRMA – April 2016

April 18, 2016          

In This Issue:

Council and County Legislative Activity

CITY COUNCIL AND COOK COUNTY ORDINANCES AND RESOLUTIONS

INTRODUCTIONS

 

Chicago Paid Sick Leave

Sponsors:  Alderman Toni Foulkes (15th Ward), Alderman Ameya Pawar (47th Ward), Alderman Joe Moreno
Committee:  Workforce Development and Audit

Almost a year after their first meeting, Mayor Rahm Emanuel’s Working Families Working Group (WFWG) issued a report that recommended the Chicago City Council pass an employer-funded paid sick leave ordinance.  This proposal closely follows that recommendation.  IRMA participated in the WFWG and, along with the Chicagoland Chamber of Commerce, opposed the recommendation that forces yet another unfunded mandate in a long list of mandates that the City Council has passed in the last two years.  There are many models available to address Paid Sick Leave.  It can be employer funded in whole or in part, it can be paid for through a social insurance program set up by the jurisdiction, and it can be paid for by the employer at a rate of less than 100%.  Without equal consideration of all options, the WFWG chose a wholly employer-funded mandate and the sponsors concurred.

Here are the main points of the proposal in Q & A form:

Who is covered?

Any employee that works at least 80 hours within a 120 day period and is at least 18 years of age.  Current collective bargaining agreements are exempt.  Future collective bargaining agreements must specifically exempt themselves from this law.

What type of leave must the employer provide?

The employer must provide either paid sick leave (PSL) or paid time off (PTO).  If the employer chooses to provide PSL, then the employee will be allowed to take the time to care for a) her/his own illness or medical care related to an illness/injury or case of domestic violence,b) the illness of a family member or c) cases of business or school shut down due to a public health emergency.  If the employer chooses to provide PTO, then the employee can take any eligible time earned for any reason.

How does PSL/PTO accrue?

The employer can give the employee 5 days upfront for the year (a year is calculated from the employee’s first day of work) or the effective date of the ordinance, whichever is later.  Or, the employer can choose to use an accrual system instead.  If so, then the employee will accrue PSL at the rate of 1 hour for every 40 hours worked.  The maximum number of hours an Employee can take will not exceed 40 hours of PSL per 12-month period.

Will an employee be allowed to carry over PSL/PTO?

Yes.  An employee can carry over a maximum of 20 hours to the following 12-month period.  However, if an employee works for an employer that must comply with FMLA, then the employee will be allowed to carryover up to 40 hours of PSL to use concurrently with FMLA and up to 20 hours of PSL accrued if eligible.

Will employers be required to pay out any PSL/PTO upon employee separation?  Will employers be required to pay out PSL/PTO at the end of an employee’s 12-month period?

No.  Employers will not be required to pay out any unused PSL/PTO.

How will this ordinance apply to tipped employees?

An employer must pay the tipped employee at the full minimum wage in effect at the time the employee takes leave.

How many days in a row can an employee take of PSL?

The employee can take as many days as have accrued up to 40 hours, but the proposal does specifically allow an employer to require documentation when an employee takes more than three consecutive days of PSL.

What kind of notice must I provide to my employees?

You must amend or replace the minimum wage sign to include notice of rights to PSL/PTO.

What recourse does an employee have if I fail to provide PSL/PTO?

The employee has a private right of action in the appropriate court of jurisdiction.  A fine can also be issued by the city for each violation at a rate of $500-$1000 for each violation.

If the proposal passes, when will it become effective?

July 1, 2017

Chicago Increased Gas Tax

Sponsor:  Alderman Gilbert Villegas

Committee:  Budget and Government Operations

Citing deteriorating roads in the city and the low price for gas, this proposal attempts to increase Chicago’s gas tax from the current $0.05/gallon to $0.12/gallon in order to pay for roads, bridges and other transportation infrastructure.  The additional $0.07/gallon would be sent to a special fund dedicated to pay for repairs and not to the Corporate Fund to be incorporated into general revenue.  There are a number of attempts by various levels of government to increase the gas tax.  Cook County’s $0.04/gallon increase is detailed below, and there is an effort at the state level to tax drivers at 1.5 cents for every mile driven.  On the heels of the city’s latest tobacco tax that disproportionately affects gas stations, CRMA is opposed to an increase in the gas tax.

Cook County Increased Gas Tax

Sponsor:  Commissioner Richard R. Boykin (1st District)

Committee:  Finance

This week, Commissioner Richard R. Boykin introduced the Community Stabilization & Anti-Violence Act of Cook County.  The proposal would add an additional $0.04/gallon to the county’s gas tax to be used specifically for the purpose of addressing anti-violence initiatives in the County.  Gas is currently taxed in the County at $0.06/gallon.  The funds from the tax, which the Commissioner estimates will bring in an additional $50 million in revenues, would be split between four different funds, three of which are new initiatives.  If the price of gas were to reach $5.00/gallon for 30 days, the additional tax would expire.

(a)   Cook County Jobs Council

This is a new council made up of 5 County Commissioners, the Board President, and three agency directors.   The Council would be tasked with identifying where unemployment is greatest (at least 10% unemployment) amongst residents between the ages of 16-24 and partner with private sector employers to employ more unskilled labor in the designated areas.  The pool of workers would also be pegged to work on highway and infrastructure projects.  The Council would also provide job training and hire additional staff to manage the program from the fund.

(b)  Cook County Parenting to Prevent Violence Initiative

This program would be administered by the Justice Advisory Council who would give grants to non-profit organizations that have parenting education programs.  At least $2 million annually will be given out annually for these programs.

(c)    Office for People with Disabilities

Creates a new office within the County to address the needs of people with disabilities in the County.  The office will commence studies, conduct research, issue publications and recommendations to further its mission.  The office would be appropriated a little over $1 million annually.

(d)   Cook County Community Policing Initiative

This initiative would be overseen by the Cook County Sheriff’s office and would hire an additional 15 Sheriff’s officers to police areas of the county with high crime rates.  At least $2 million annually would be expended on this effort.

Cook County Home Rule Tax Clean-Up

Sponsor:  Cook County Board President Toni Preckwinkle

Committee:  Finance

This ordinance is a clean-up ordinance initiated by the Department of Revenue to ensure the Cook County Code reflects current industry practices for certain taxes and revenue items and that compliance and payment efforts are uniform and standardized.  All changes are revenue neutral.

The next City Council meeting is scheduled for Wednesday, May 18 2016.

The next County Board meeting is scheduled for Wednesday, May 11, 2016.

TanyaTriche

 Tanya Triche

Vice President /General Counsel

312-726-4600

ttriche@irma.org

121 Report – CRMA – March 2016

In This Issue

CHICAGO PENSION UPDATE
COUNCIL AND COUNTY LEGISLATIVE ACTIVITY

CHICAGO PENSION REFORM EFFORT DENIED BY
IL SUPREME COURT

Last week, the Illinois Supreme Court decided that the city’s proposed fix to its pension problems was unconstitutional, sending the city back to the drawing board to find a solution. This outcome was not a surprise. The city’s bill was very similar to a state proposed pension fix that was denied by the IL Supreme Court last year.

In relevant part, the city’s bill proposed changes to the pension provisions of the Municipal Laborers Union fund as well as the Municipal Employees’ Union fund. The proposed changes would have recalculated how increases to benefits for retirees were determined which would have reduced the level of increases over time and would have required employees to contribute more to their pensions. On the other hand, it would have increased the city’s contributions to the pension funds over time. This is significant because with the city’s current rate of pay into the funds, the funds would have been depleted over time leaving many pensioners without their retirement plan.

The city hoped that its pension law would withstand a constitutional challenge as it claimed that the proposal did not diminish or impair rights guaranteed to each union member. It staked its claim on the fact that the city was now taking on the responsibility of paying out the benefits and becoming liable for the viability of the funds instead of just guaranteeing payment. This, the city argued, actually bestowed a net benefit on beneficiaries even considering the changes that diminished some benefits. In addition, the city claimed that the unions approved the new deal in an arms-length negotiation through a fair bargaining process.

The court ruled that pension contracts can indeed be altered and additional benefits conferred if there is bargained-for consideration that doesn’t involuntarily diminish benefits. The problem with the city’s bill was that it absolutely diminished benefits which the pension protection clause prohibits. Even in a case where the city clearly was not in a position to make the pension funds whole, and the funds were due to become insolvent in the next 10 years, that financial situation, however dire, does not allow the General Assembly to respond by reducing benefits to save the funds. Moreover, the court found that the there was not language sufficient in the Act to have the city act as a guarantor for the funds. Therefore, the promise could not be considered an overall benefit that offsets a diminishing other benefits.

With the IL Supreme Court decision in hand, the city has joined the state in the very difficult task of trying to find a fix that the court will find constitutional. We will keep members informed of how this situation may impact the bottom line of business owners as the city struggles to find the revenue to keep the pension funds from becoming insolvent.

CITY COUNCIL AND COOK COUNTY
ORDINANCES AND RESOLUTIONS

INTRODUCTIONS

Hearing to Track the Success of Redevelopment Agreements and Enterprise Zones

Sponsor: Alderman Edward M. Burke (14th Ward)

Committee: Finance

Mondelez announced last year that it would be closing its factory on the south side of the city and eliminating 600 jobs. It also announced that it would add jobs to its facility in Salinas, Mexico. Since Mondelez received a favorable redevelopment agreement from the city in 1994 to modernize its south side manufacturing plant, the council is interested in viewing reports related to compliance with the terms of this agreement and all such agreements for companies located within an Enterprise Zone. In particular, the Council is interested in knowing how much companies have received in tax breaks and other financial incentives, and how many jobs were created or retained as a result of the agreement. The resolution calls on the Department of Planning and Development as well as the Illinois Department of Commerce and Economic Opportunity to testify to the details and/or success of these programs in attracting or retaining jobs.

PASSED INITIATIVES

 

CHICAGO

Mayor Emanuel’s Tobacco Tax and Regulation Package

Sponsors: Mayor Rahm Emanuel, Alderman Proco Joe Moreno (1st Ward) and Alderman Ameya Pawar (47th Ward)

This item considered again after being deferred on the Council floor at the February meeting.

Yet another substitute was introduced and passed all at the same meeting. Since there were several versions considered throughout this process, we want to make sure that tobacco retailers understand what passed and when the changes will take effect.

  1. The Age to Purchase Will Increase to 21

The only change here is that a seller must be at least 18 years old.

  1. Chicago will now tax other tobacco products (OTP)

While the concern was raised that Chicago may not have the authority to implement its own OTP tax, the City Council decided to move forward with this portion of the ordinance. The rates for taxing OTP are as follows:

 Smoking Tobacco:  $1.80/oz

Smokeless Tobacco:  $1.80/oz

Little Cigars:  $0.20/unit

Large Cigars:  $0.20/unit

Pipe Tobacco: $0.60/oz

The ordinance then goes on to say that if the OTP tax is challenged in an appropriate court of law and found unlawful, then 90 days after the last court challenge the city will implement minimum floor pricing on tobacco products and packaging regulations for little cigars. Those items will be regulated as follows:

  1. Minimum Floor Pricing

Cigarettes and Little Cigars:  $11.50/pack

Large Cigars:  $1.36/cigar

Smoking Tobacco:  $11.29/oz

Smokeless Tobacco: $4.94/oz

Pipe Tobacco: $4.56/oz

  1. Packaging Regulations

All tobacco products must be sold in original packaging.  Little Cigars must be sold in packages of at least 10 units.

  1. Ban on Coupons and Discounts

Coupons and other discounts on tobacco products will be prohibited.

Fines for violations of the provisions of these sections have increased tremendously. If a person commits at least two violations of selling tobacco products outside of their original packaging within a 48-month period, then the license can be revoked. If the licensee violates any of the other tobacco sections three times within a 48-month period, then the licensee may have not be able to renew the license.

 

Eliminating the Tax on Feminine Hygiene Products

Sponsors: Alderman Edward M. Burke (14th Ward), Alderman Leslie Hairston (5th Ward) and City Clerk Susana Mendoza

Beginning January 1, 2017, the ordinance would eliminate the city’s portion of the sales tax (1.25%) on feminine hygiene products. It will re-categorize the products as medical appliances. The sponsors argue that such products were defined in relevant case law as “medical appliances” and should therefore be taxed similarly. In IL statute, medical appliances are taxed at the low rate (1%), but since the city cannot re-categorize these products for the state, it will just eliminate its portion of the tax.

Feminine hygiene products are currently categorized as “grooming and hygiene” products for the purpose of state taxation. This change was made as part of the state’s attempt to streamline its sales tax, so that the way Illinois taxes products is uniform with how such products are taxed in the majority of states. A bill was recently introduced in the Illinois Senate to exempt these products, along with incontinence products, from state tax. Upon IRMA’s request, the sponsor agreed to move the immediate effective date to January 1, 2017. This was done in order to give the state time to either lower or eliminate the tax on these products during the legislative session so that the tax is uniform.

Members with stores elsewhere in Cook County should note that the Board also passed a similar measure sponsored by Commissioner Richard Boykin, but instead of reclassifying the products, it simply removed them from taxation (1.75%). It also pushed its effective date back upon IRMA’s request. Both local laws will take effect on January 1, 2017.

 

Ban on the Use of Smokeless Tobacco at Professional Sporting Events

Sponsors: Alderman Edward M. Burke (14th Ward) and 7 co-sponsors

This ban was introduced directly into the Finance Committee which heard testimony from various health professionals, as well as US Sen. Dick Durbin, who has been pushing this issue in Congress. Citing several cities that have passed similar measures, Sen. Durbin urged for Chicago to pass the ordinance so that children wouldn’t be attracted to the product after seeing their favorite baseball player chew tobacco. The ban will take effect during the middle of the regular season for Major League Baseball.

Effective Date: June 11, 2016

 

COOK COUNTY

New Crane Operator Licensing and Exam

Sponsor: Commissioner Bridget Gainer (10th District)

Following a similar measure passed in Chicago in 2013, this ordinance will require any person that operates a crane or boom truck to take an exam and become licensed by the County. Applicants will have to register, although applicants that are already licensed by the city of Chicago or any other municipality in the county will not have to apply for the license.

Effective Date: December 1, 2016

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TanyaTriche

Contact Information:

Tanya Triche
Vice President/General Counsel
ttriche@irma.org
312-726-4600

121 Report – CRMA – February 2016

In This Issue

City Council Activity

CITY COUNCIL ORDINANCES AND RESOLUTIONS

 

INTRODUCTIONS

 

Proposal to Enact New Taxes and Regulations on the Sale of Tobacco Products

Sponsors:  Mayor Rahm Emanuel, Alderman Proco Joe Moreno (1st Ward), Alderman Will Burns (4th Ward) and Alderman Ameya Pawar (47th Ward)

This item passed out of committee, but was deferred on the Council floor

A substitute proposal was introduced into committee that made some interesting changes.  First the Mayor kept the ban on the sale of tobacco products to persons under the age of 21 as well as the OTP tax.  In addition, he added “invalidation” language which basically said that if the OTP tax was rendered invalid by the courts, then the minimum floor pricing (MFP), coupon/discount prohibition and packaging restrictions would become effective.  If the OTP tax was upheld, or maybe even never challenged, then there would be no MFP or packaging regulations.  The possession offense by minors was also deleted.

After a contentious committee hearing on the proposal which, in our opinion, made no substantive changes, the matter was not called for a vote and held for one day in order for the Mayor’s office to make changes to address concerns expressed by the Aldermen.  The Aldermen were concerned mostly about how an aggressive tax and ban policy on cigarettes has created a thriving market for the illegal sale of cigarettes whether by organized street gangs, entrepreneurial spirits driving across the border and selling on the street, or rogue retailers.  Another proposal to increase taxes, prices and regulations on tobacco would only add to the problem.

At the next committee hearing, which took place less than 48 hours after the first hearing, a second substitute proposal was introduced.  The language was basically unchanged from the first substitute with the addition of new enforcement provisions and department reporting requirements to tackle the illegal cigarette sale issue.  The proposal moved out of committee with a vote of 22-8.  When it was addressed at the city council meeting, five Aldermen (Ervin, Garza, Hairston, Reilly and Sposato) moved to defer the vote until the next meeting of the City Council which, as of this writing, meets on Wednesday, March 16, 2016.

As a reminder, here is a breakdown of the proposed taxes, minimum floor prices and packaging regulations:

Other Tobacco Products Tax

State law prohibits the city from taxing OTP.  It seems that, with this proposal, the city is welcoming a legal challenge to its authority.  It is our reading that state law grants that authority only to home rule jurisdictions that passed their own law prior to July 1st, 1993.  The OTP tax would be set according to the following rates:

Smoking Tobacco:  $6.60/oz

Smokeless Tobacco:  $1.80/oz

Little Cigars:  $0.15/unit

Large Cigars:  $0.90/unit

Minimum Floor Pricing

The sponsors are concerned that the “youth” are being enticed to purchase tobacco products and that the full effect of the tax is not being felt by this population.  They want to keep the price of tobacco products high as a discouragement to the “youth” from purchasing the products.  The MFP would be set at the following rates:

Cigarettes and Little Cigars:  $11.50/pack

Large Cigars:  $1.74/cigar

Smoking Tobacco:  $11.50 per 0.65oz ($17.70/oz)

Smokeless Tobacco: $4.00/oz

Packaging Regulations

All tobacco products must be sold in original packaging.  Cigars can only be sold in packages of four units unless each individual cigar has a listed price of more than $3.00.  Little Cigars must be sold in packages of at least 20 units.

Proposal to Eliminate the Tax on Feminine Hygiene Products

Sponsors:  Alderman Edward M. Burke (14th Ward), Alderman Leslie Hairston (5th Ward) and City Clerk Susana Mendoza

Committee:  Finance

This proposal would remove the city portion of the tax (1.25%) on feminine hygiene products.  The sponsors argue that such products were defined in relevant case law as “medical appliances” and therefore exempt from both city and state sales taxes.

Feminine hygiene products are currently categorized as “grooming and hygiene” products for the purpose of state taxation.  This change was made as part of the state’s attempt to streamline its sales tax, so that the way Illinois taxes products is uniform with how such products are taxed in the majority of states.  A bill was recently introduced in the Illinois Senate to exempt these products, along with incontinence products, from state tax.  It is our understanding that state law prohibits the city from removing individual products from its taxing authority that are not already removed under state law.  So the state bill would have to be passed before Chicago could have the authority to eliminate its tax.

Legacy Business Program

Sponsor:  Alderman Brian Hopkins (2nd Ward) and 9 co-sponsors

Committee:  Finance

This proposal would allow a business that was founded or is currently headquartered in Chicago, and that has had a location in the city for at least 30 years, to apply to become a legacy business.  Businesses that have been in Chicago for at least 20 years can apply as well if the business has contributed to the history of its neighborhood and if it can prove that, without being included in the Registry, it would face a significant risk of displacement.  The advantage to becoming a legacy business is that property taxes will be frozen for the business and its tenants.  The downside is that the tax burden will shift to other businesses. In order to help pay for the program, the business will pay a one-time fee of $50 and business license fees will be increased across the board for the overwhelming majority of license holders.  The proposal is modeled after a recently passed ballot initiative in San Francisco.

Nuisance Business and Chronic Illegal Activities

Sponsor:  Alderman Matt O’Shea (19th Ward) and Alderman Margaret Laurino (39th Ward)

Committee:  Public Safety

This proposal deletes several sections of the Code that pertain to illegal activity occurring inside or adjacent to a business.  The provisions being deleted will not have an effect on current operations of the department to conduct inspections, or negotiate plans of operation, voluntary closures and/or fines.  The sections of the Code that the department uses to enforce the nuisance law will remain in tact.

PASSED INITIATIVES

 

Addition of Grease Containers to Commercial Refuse Container ID Law

Sponsor:  Alderman Brendan Reilly (42nd Ward)

This ordinance will require grease containers to have the same kind of label required of commercial refuse containers. The label contains ownership identification information for the purposes of ticketing.

EFFECTIVE DATE:  March 15, 2016

TanyaTriche

Tanya Triche
Vice President/General Counsel
312-726-4600
ttriche@irma.org

121 Report – CRMA – January 2016

In This Issue

City Council Activity

CITY COUNCIL ORDINANCES AND RESOLUTIONS

INTRODUCTIONS

 

Proposal to Enact New Taxes and Regulations on the Sale of Tobacco Products

Sponsors:  Mayor Rahm Emanuel, Alderman Proco Joe Moreno (1st Ward), Alderman Will Burns (4th Ward) and Alderman Ameya Pawar (47th Ward)

Committee on Finance

This introduction is a sweeping proposal that would tax other tobacco products (OTP), establish minimum floor pricing (MFP) for all tobacco products, raise the age of purchase (AOP) to 21 years old (up from the current 18 years), ban coupons and other discounts on tobacco products and restrict how certain tobacco products are packaged.  New York City passed a similar set of laws in 2013 which became effective in 2014.  For those of you with locations in New York City, you know all too well that New York has the highest number of illegal sales of cigarettes in the country.  Following their lead will indeed create more problems for Chicago police and a number of neighborhoods where the illegal sales of tobacco products continue to reach new heights as more product is trafficked and sold by local street gangs.  While Chicago’s problems with illegal sales haven’t reached New York’s heights, the high tax rate, compared to the much lower tax rates of surrounding states, has positioned the underground market for tobacco sales to flourish.  The proposal addresses four issue areas which are detailed below:

Other Tobacco Products Tax

State law prohibits the city from taxing OTP.  It seems that, with this proposal, the city is welcoming a legal challenge to its authority.  It is our reading that state law grants that authority only to home rule jurisdictions that passed their own law prior to July 1st, 1993.  The OTP tax would be set according to the following rates:

Smoking Tobacco:  $6.60/oz

Smokeless Tobacco:  $1.80/oz

Little Cigars:  $0.15/unit

Large Cigars:  $0.90/unit

Minimum Floor Pricing

The sponsors are concerned that the “youth” are being enticed to purchase tobacco products and that the full effect of the tax is not being felt by this population.  They want to keep the price of tobacco products high as a discouragement to the “youth” from purchasing the products.  The MFP would be set at the following rates:

Cigarettes and Little Cigars:  $11.50/pack

Large Cigars:  $1.74/cigar

Smoking Tobacco:  $11.50 per 0.65oz ($17.70/oz)

Smokeless Tobacco: $4.00/oz

Discounting

Bans any and all discounts on tobacco products.

Packaging Regulations

All tobacco products must be sold in original packaging.  Cigars can only be sold in packages of four units unless each individual cigar has a listed price of more than $3.00.  Little Cigars must be sold in packages of at least 20 units.

PASSED INITIATIVES

Curbside Cafe Permits  

Sponsor:  Alderman Tom Tunney (44th Ward)

This ordinance establishes a two-year pilot program that authorizes restaurants that do not already have a sidewalk café permit to apply for a permit that would allow them to place outside seating in the parking lane immediately in front of the establishment.  Curbside cafes would not be allowed in the Central Business District or near Wrigley Field, along with other restrictions.  Applicants must have insurance, pay a permit fee of $600 and have restricted hours of operation.  There are a number of other operational requirements.

This ordinance will allow restaurants and other retail food establishments that generally do not have an appropriate outside space for a sidewalk café to still be able to reap the benefits of Chicago’s active outdoor eating season.  CRMA members interested in applying for a permit should contact the Department of Business Affairs and Consumer Protection for more information.

EFFECTIVE DATE:  Immediately upon passage

TanyaTriche

 

CONTACT INFORMATION:

Tanya Triche
Vice President/General Counsel
312-726-4600
ttriche@irma.org