Sweet Home Chicago
Aug 2, 2017


A judge dismissed a lawsuit challenging a new beverage tax in Cook County, Illinois that will charge an additional penny per ounce on any sweetened beverage, which includes soft drinks, lemonades, teas, and sports drinks. Cook County includes the City of Chicago. The beverage tax is set to begin today. 



In November 2016, the Cook County Board approved the beverage tax (a.k.a. pop tax) in a 9-8 vote. The additional taxes are projected to bring in $224 million a year and to balance the books. Originally set to take effect June 1, 2017, a judge put the tax on hold after a lawsuit challenged the tax as unconstitutional and too vague. The delay resulted in layoff notices being sent to hundreds of county workers. The county projected collecting about $67.5 million in revenue from the tax this year.



In 2015, Berkeley, CA was the first city to implement a soda tax. In 2016, six other cities approved a beverage tax on sweetened drinks. Philadelphia’s beverage tax took effect January 1 this year with a 1.5 penny per ounce tax. The tax has generated just over $39 million in revenue for the city in the first six months.  The other cities where the tax went into effect in 2017 include Albany and Oakland, CA and Boulder, CO. The beverage tax will go into effect in 2018 in San Francisco, CA and Seattle, WA.



Another legal challenge against the Cook County beverage tax was filed last night. The appeal challenges an earlier ruling deeming the tax constitutional.  However, the appeal is too late to stop the tax from taking effect today. We'll see if this tax picks up steam in other cities.

Natural Disasters


According to a federal audit, the Federal Emergency Management Agency (FEMA) should take back $2 billion in grants approved to fix New Orleans sewers and pipes damaged by Hurricane Katrina and subsequent street repairs. The audit contends the city didn't have the paperwork to prove the damages were disaster related. However, FEMA disagrees and will not request the funds. The city stated that it was the most comprehensive review of a road system for damage that FEMA has ever done.



So far this year, the U.S. has endured 49 separate weather, climate, and flood disasters, leading to the second-most disaster-laden season on record.  Severe thunderstorms with damaging hail and tornadoes caused $18.5 billion of damage. The total losses for the first half of 2017 were $21 million, of which $14.2 billion was insured. Hurricane season just started - be safe. 

Making Our Way Around The Country


The Nevada Division of Insurance published proposed regulations to implement A.B. 455, a bill authorizing electronic delivery of notices and other documents that passed earlier this year.  The draft rules would establish requirements for electronic submission of cancellation and nonrenewal notices.  In the draft rules, carriers would be required to obtain verification that a policyholder received notice of cancellation or nonrenewal.  If not, the carrier would be required to either mail or deliver in person the cancellation or nonrenewal notices.  The Division of Insurance will hold a public comment period prior to adoption once the draft rules are approved.



The Colorado Workers’ Compensation Division posted notice of a public hearing on proposed rules on physician accreditation and medical treatment guidelines.  The proposed rule related to physician accreditation standards would require physicians who treat injured workers to demonstrate that they understand the American Medical Association Guides to Evaluation of Permanent Impairment, in addition to workers’ compensation statutes and division rules.  The proposed rule would also add new requirements for obtaining a Level II accreditation.  The hearing is scheduled for Sept. 13. 



Insurance folks from around the nation will descend on Orlando to attend the Worker’s Compensation Educational Conference next week.  Hundreds of people will come early for a day of service at Give Kids the World, a non-profit organization that hosts children with life-threatening illnesses and their families to weeklong, cost-free vacations.  I’ve participated for the last several years, and I can honestly say it’s the best day of the year.  If you’re planning on attending in the future, sign up and volunteer.  You’ll love it.

About The Way

The Way is Gallagher Bassett's weekly governmental briefing on state and federal affairs that affect our industry. We thank you for starting your Wednesday morning with us. Please be sure to follow #GBTheWay for additional news and updates as we make our way throughout the country on the issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna or Cari Miller, directly.


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