CRMA – 121 Report – November 2018

Chicago City Council Ordinance and Resolution Introductions



Sponsors: Ald. Edward M. Burke (14th Ward) and Ald. Raymond Lopez (15th Ward) 

Joint Committee: Aviation and Finance


There were a number of ballot questions in this past election for Chicago residents to consider. Among them was a question asking if plastic straws should be banned. Of those voting on the question, 55% voted “Yes” and 45% voted “No.” With those results, the sponsors decided to move forward with a proposal to ban businesses from selling or otherwise providing plastic straws or stirrers to customers. Alternatives can be sold/offered as long as they are reusable and/or biodegradable.

There has been a push in the environmental advocacy community to ban plastic straws that it says has damaging effects to marine life. And while alternatives do exist, there have been significant challenges in being able to access the amount of alternatives needed to supply large, national/international companies. Seattle recently banned food service businesses from using and giving away plastic straws, utensils and cocktail picks in favor of compostable products. Seattle also mandates and provides composting services for a fee. In addition, the city allows businesses to keep plastic straws on hand to give to customers upon request. A number of large businesses have announced plans to change from plastic straws/stirrers to an alternative, but doing so takes time. Starbucks will have alternatives by 2020, Marriott will do the same by July 2019 and American Airlines switched this month. All of the companies went through rigorous testing and studied pricing and availability for over a year before making the transition. This proposal will require businesses to make the change in six months’ time.

IRMA has concerns that this proposal does not allow businesses to keep plastic straws upon request, especially for our customers that have developmental and/or medical challenges that make it difficult for them to use some of the more popular alternatives. We are also concerned that large companies are having a difficult time finding adequate supplies of alternatives which has made the price of those alternatives increase and made it more difficult for smaller businesses to access the alternatives. Lastly, we have concerns that this proposal is yet another increased cost of doing business in Chicago.


Sponsor: Ald. Raymond Lopez (15th Ward)

Committee: Finance

This proposal follows action taken by the city of San Francisco this year to ban the sale of tobacco products containing menthol. It is estimated that San Francisco will lose about $50 million in tobacco tax revenue in response to the measure. Chicago’s proposal was introduced a day before the FDA announced that it would begin procedures to look into banning cigarettes that contain menthol. The FDA is choosing not to move towards banning menthol in e-cigarettes and vaping products because it is concerned that such a move will act as a dis-incentive for adults to switch from smoking to vaping. The Chicago proposal would ban menthol in all products.

IRMA opposes this measure. If such an action does not occur on the federal level, Chicago will be ceding sales of the product to nearby jurisdictions as well as to the underground, illegal market. This will exacerbate the issue certain communities already have with the illegal, uncontrolled sale of unstamped cigarettes and would blow a hole in the already shrinking tobacco tax revenue the city is receiving.



The following questions were introduced for consideration on the next municipal ballot, but due to timing, none of them will be considered. All of them focus on increasing the real estate transfer tax as a way to generate more revenue to tackle very specific public policy issues. Mayor Emanuel publicly expressed reservations that Aldermen should refrain from treating home and business owners as continual sources for more revenue, even if the goal is to fund worthy projects. IRMA members should note what was being proposed and keep them in mind as Chicago works through its election season. Depending on the changes in the Mayor’s office and the Council, it is possible that we may see these themes again under a new administration:

1. Shall the City of Chicago impose a real estate transfer tax increase of 27% for all transfer price that is above $1 million to establish a new transfer tax rate of $3.75 per $500 of all of the transfer price that is at or below $1 million, and $4.75 per $500 of all of the transfer price that is above $1 million to be paid by the buyer of the real estate transferred? The increase in revenue would benefit the pension funds for fire fighters and police officers.

2. Shall the City of Chicago impose a real estate transfer tax increase of 160% to establish a new tax rate of $9.75 for every $500 of transfer price or fraction thereof for transfers over $1 million in transfer price to be paid by the buyer of the real estate transferred? The increase will be used to provide resources for housing and services to combat homelessness in the City of Chicago.

3. Shall the City of Chicago impose a real estate transfer tax increase of 133% to establish a new transfer tax rate of $9.75 for every $500 of transfer price, or fraction thereof, for transfers over $750,000 in transfer price to be paid by the buyer of the real estate transferred? The increased revenue would be used for the sole purpose of retrofitting and remediating the city’s water delivery pipes and infrastructure to eliminate lead and other harmful materials from the water delivered to the city’s residents, schools, parks, businesses and visitors.



2019 MANAGEMENT ORDINANCE (Effective Date: January 1, 2019)

The City’s annual Management Ordinance generally is amended during the budget season to clean up language that may conflict with state and/or federal law. It has also been used to add strengthen regulations and add new roles/responsibilities. For example, this year, the Council has added a new Department of Housing, recognizing the increasing costs of living in the city and the difficult process of trying to address gentrification.

Retail and restaurants will be most interested in the following changes:

Food Code: Minor, non-substantive changes have been made to ensure that definitions refer to the FDA’s Food Code (pages 48-52)

Benches on the Public Way: The department noticed that a number of businesses were affixing non-advertising benches to the public way for the comfort of their customers and other passers-by. While the benches are often a nice touch, they are illegal without a permit. This part of the ordinance ensures that business owners that wish to add benches must first seek a permit that must be approved by the City Council (pages 52-56)

Protesting a Tax Determination/Assessment: Allows a person to either pay the tax with interest under protest while they appeal, or they can pay $10,000, whichever is less. Also sets forth timing on appeals (pages 56-58)

Deceptive Practices (Food): Clarifies that retailers are allowed to sell out of date shelf-stable products as long as the products are clearly labeled and separated from merchandise that is not out of date; ultimately this kind of violation will be eligible for pre-payment so that business owners found in violation can avoid the administrative hearings process if they so choose (page 61)


2019 REVENUE ORDINANCE (Effective Date: January 1, 2019)

The annual Revenue Ordinance encapsulates all changes to revenue that were considered during the budget process. While the City Council can make changes to revenue throughout the year these changes reflect what the elected officials believe is necessary to have a balanced budget for the upcoming year.

Retail and restaurants will be most interested in the following changes:

Deceptive Practices: Changes the general fine from not less than $2000 and no more than $10,000 per offense, to not less than $500 and no more than $10,000 per offense (page 1)

Retail Tobacco Dealer License Fees: Doubles per location fees and cash register fees to $500 and $330 respectively (page 2)

City Council is scheduled to meet again on Wednesday, December 12, 2018.


Tanya TricheTanya Triche Dawood
Vice President, General Counsel
Illinois Retail Merchants Association