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O-02-24 to Amended Ordinance O-44-23 which established a local motor fuel tax.o w 7- -zq 418 Main Street ( Lemont, IL 60439 TO: Village Board Meeting FROM: Darshana Prakash, Finance THROUGH: George Schafer, Village Administrator SUBJECT: An Amendment to Amended Ordinance 0-44-23 which established a local motor fuel tax. DATE: January 8, 2024 SUMMARY/BACKGROUND On September 25, 2023 the Village Board approved Ordinance 0-43-23 which established a local motor fuel tax. The original Ordinance was received by Illinois Department of Revenue (IDOR) before the October 1st filing deadline. Subsequent to IDOR's review and recommended language revisions to the original Ordinance (0-43-23), an amended Ordinance (0-44-23) was approved by the Village Board on October 23, 2023. IDOR's review rejected the amended Ordinance 0-44-23 as submitted and has requested that the Village resubmit another amended Ordinance with some additional language revisions. IDOR has accepted the original submittal date and the tax is implemented as of January 1, 2024. However, the attached amended Ordinance must be approved and submitted to IDOR before January 15, 2024. Attached is the letter received from IDOR with recommended language revisions to Ordinance 0-44-23. ANALYSIS Consistency with Village Policy STAFF RECOMMENDATION Approve Ordinance as amended BOARD ACTION REQUESTED Approve Ordinance as amended ATTACHMENTS IDOR letter received NOT accepting 0-44-23 - amendment request.pdf An Ordinance Amending An Ordinance Establishing A Motor Fuel Tax.pdf VILLAGE OF LEMONT ORDINANCE NUMBER O- -24 AN ORDINANCE AMENDING AN ORDINANCE ESTABLISHING A MOTOR FUEL TAX IN THE VILLAGE OF LEMONT, ILLINOIS JOHN EGOFSKE, Village President CHARLENE M. SMOLLEN, Clerk JANELLE KITTRIDGE DAVE MAHER KEN MCCLAFFERTY KEVIN SHAUGHNESSY RICK SNIEGOWSKI RON STAPLETON Trustees Published in pamphlet form by authority of the Village President and Board of Trustees of the Village of Lemont on 1- 5 -24 ORDINANCE NO. 0--24 AN ORDINANCE AMENDING AN ORDINANCE ESTABLISHING A MOTOR FUEL TAX IN THE VILLAGE OF LEMONT, ILLINOIS WHEREAS, the President and Board of Trustees of the Village of Lemont previously adopted ordinance 0-44-23 establishing a motor fuel tax pursuant to Section 8-11-2.3 of the Illinois Municipal Code (65 ILCS 5/8-11-2.3); and WHEREAS, the Illinois Department of Revenue has requested the Village to adopt this ordinance clarifying certain aspects of the imposition of the motor fuel tax. NOW THEREFORE, BE IT ORDAINED by the President and Board of Trustees of the Village of Lemont, Cook, DuPage and Will County, Illinois as follows: SECTION l: The foregoing recitals shall be and are hereby incorporated as findings of facts as if said recitals were fully set forth herein SECTION 2: Effective January 1, 2024 a tax is hereby imposed upon all persons engaged in the Village of Lemont, Illinois in the business of selling motor fuel, as defined in Section 8-11-2.3 of the Illinois Municipal Code (65 ILCS 5/8-11-2.3), at retail for the operation of motor vehicles upon public highways or for operation of recreational watercraft upon waterways, at the rate of three cents ($0.03) per gallon of motor fuel sold at retail in the Village for the purpose of use or consumption and not for the purpose of resale. The imposition of this municipal motor fuel tax is in accordance with and subject to the provisions of Section 8-11-2.3 of the Illinois Municipal Code (65 ILCS 5/8-11-2.3). 2 SECTION 3: The tax hereby imposed, and all civil penalties that may be assessed as an incident thereto, shall be collected and enforced by the Illinois Department of Revenue. The Illinois Department of Revenue shall have full power to administer and enforce the provisions of this ordinance. SECTION 4: The Village Clerk is hereby directed to file a certified copy of this ordinance with the Illinois Department of Revenue immediately following its adoption. SECTION 5. All ordinances and resolutions, or parts thereof, in conflict with the provisions of this ordinance are, to the extent of the conflict, expressly repealed on the effective date of this ordinance. SECTION 6: If any section, paragraph, clause or provision of this ordinance shall be held invalid, the invalidity thereof shall not affect any of the other provisions of this ordinance. SECTION 7: This ordinance shall be in full force and effect from and after its passage, approval and publication as provided by law. 3 ADOPTED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF LEMONT, COUNTIES OF COOK, WILL, AND DUPAGE, ILLINOIS, ON THIS DAY OF JANUARY 2024. PRESIDENT AND VILLAGE BOARD MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: Janelle Kittridge Dave Maher Ken McClafferty Kevin Shaughnessy V Rick Sniegowski V Ron Stapleton Attest: ��hairlcne—Z.­Smo'llen, Villag Jerk 4 John Egofs , illage Pr 'sident STATE OF ILLINOIS ) SS COUNTY OF COOK CERTIFICATION I, Charlene Smollen, do hereby certify that I am the duly qualified and elected Village Clerk of the Village of Lemont, Cook, DuPage and Will County, Illinois, and that as such Village Clerk I do have charge of and custody of the books and records of the Village of Lemont, Cook County, Illinois. I do hereby further certify that the foregoing is a fill, true and correct copy of Ordinance No. 0 `-" - 2-"AN ORDINANCE AMENDING AN ORDINANCE ESTABLISHING A MOTOR FUEL TAX IN THE VILLAGE OF LEMONT, ILLINOIS" adopted and approved by the President and Board of Trustees of the Village of Lemont, Illinois on January <6 , 2024. IN WITNESS WHEREOF, I have hereunto affixed my hand nd the Corporate Seal of the Village of Lemont, Cook, DuPage and Will County, Illinois this day of January 2024. Charlene Smollen Village Clerk Village of Lemont Cook County, Illinois ,: dE STATE 0�1, 04` Illinois Department of Revenue r.wt�ti o Legal Services Office 101 W. Jefferson St. MG 5-500 Springfield, IL 62794 December 14, 2023 Charlene M. Smollen Village Clerk Village of Lemont 418 Main St. Lemont, IL 60439 Re: Ordinance No. 0-44-23 Municipal Motor Fuel Tax Dear Ms. Smollen: This is to acknowledge receipt of the Village of Lemont's Ordinance No. 0-44-23, replacing Ordinance No. 0-43-23 and imposing a Municipal Motor Fuel Tax at the rate of 3 cents per gallon. While we are accepting this ordinance as substantially meeting the requirements for implementation of the Municipal Motor Fuel Tax, in accordance with Section 8-11-2.3 of the Illinois Municipal Code (65 ILCS 5/8-11-2.3), we must ask Lemont to again adopt and file a replacement or amended ordinance that conforms with the statute. While the Department will administer the Ordinance adopted, the ordinance still does not conform with the provisions of 65 ILCS 5/8-11-2.3, which may put Lemont's revenues at risk of challenge. L Section 3.37.01 adopts the definitions from the Motor Fuel Tax Law. The Municipal Motor Fuel Tax Law (65 ILCS 5/8-11-2.3) provides that "motor fuel" means that term as defined in the Motor Fuel Tas Law. All other operative definitions are those in the Retailers' Occupation Tax Act (35 ILCS 120/1 et seq.) as provided in the Municipal Motor Fuel Tax Law. There is no authority under the Municipal Motor Fuel Tax Law to codify definitions from the Motor Fuel Tax Law into this tax. Please limit the incorporation of definitions from the Motor Fuel Tax Law to the definition of "motor fuel" as provided in the Municipal Motor Fuel Tax Law. 2. Section 3.37.020, subsection (c), provides that the imposition of "these taxes is in accordance with and subject to ... Sections 2b, 2d, 6, 6a, 12, 12a, 13, 13a, 13a 2, 13a.8, 1.5.1 and 21 of the Motor Fuel Tax Law." Only one tax is being enacted. In addition, there is no statutory authority (or reason) to incorporate these Motor Fuel Tax Law provisions into Lemont's Municipal Motor Fuel Tax. Please make "taxes" singular and remove references to these Motor Fuel Tax Law Sections. 3. We also note that a WHEREAS clause indicates that this is being added as a "Local Motor Vehicle Tax." It is a "Local Motor Fuel Tax." Lemont - Municipal Motor Fuel Tax December 14, 2023 Page 2 You may use enclosed sample Municipal Motor Fuel Tax Ordinance as a model to impose the tax. This sample ordinance may also be found on the Department's website at tax.illinois.gov if you search "sample ordinances." You may, of course, use alternative language, provided that it meets the requirements of the statute, which we urge you to follow carefully. On or before January 15, 2024, please adopt an ordinance that conforms with the statute and submit a certified copy to: Local Tax Allocation Division Illinois Department of Revenue 101 W. Jefferson St. NIC 3-500 Springfield, IL 62702 If you have any questions regarding this letter, please call me at the number listed below. If you have questions concerning the distribution of the tax, please contact the Department's Local Tax Allocation Division at (217) 785-6518. Very truly yours, Samuel J. 4usel Associate (217) 782-2844 Cc: Aaron Allen, Local Tax Allocation Division Enc. SAMPLE Municipal Motor Fuel — Municipalities in Cook County ORDINANCE NO. Section 1. Tax imposed. A tax is hereby imposed upon all persons engaged in the (choose one: [Village] or [City]) of (name of municipality in Cook County) in the business of selling motor fuel, as defined in the Motor Fuel Tax Law, at retail for the operation of motor vehicles upon public highways or for the operation of recreational watercraft upon waterways, at the rate of (insert rate, in one cent increments, not to exceed $0.03) per gallon of motor fuel sold at retail in the municipality for the purpose of use or consumption and not for the purpose of resale. The imposition of this municipal motor fiiel tax is in accordance with and subject to the provisions of Sections 8-11-2.3 of the Illinois Municipal Code (65 ILCS 5/8-11-2.3). Section 2. Illinois Department of Revenue to administer. The tax hereby imposed, and all civil penalties that may be assessed as an incident thereto, shall be collected and enforced by the Department of Revenue of the State of Illinois. The Department of Revenue shall have full power to administer and enforce the provisions of this Ordinance. Section 3. Clerk to file Ordinance with Illinois Department of Revenue. The Municipal Clerk is hereby directed to file a certified copy of this Ordinance with the Illinois Department of Revenue on or before (choose one: [April 1, 201 or [October 1, 20_]). Section 4. Effective date. This Ordinance shall take effect on July 1, 2020 if filed with the Department of Revenue on or before April 1, 2020. For ordinances filed thereafter, this Ordinance shall take effect on (1) the first day of July next following the adoption and filing of this Ordinance with the Department of Revenue, if filed on or before the preceding April I" or (ii) the first day of January next following the adoption and filing of this Ordinance with the Department of Revenue, if filed on or before the preceding October Pt Section 5. Repeal of conflicting provisions. All ordinances and resolutions, or parts thereof, in conflict with the provisions of this Ordinance are, to the extent of the conflict, expressly repealed on the effective date of this Ordinance. Revised 01/08/2020 L Municipal Motor Fuel — Municipalities in Cook County THE FOLLOWING NOTES ARE NOT PART OF THE ORDINANCE AND SHOULD NOT APPEAR IN THE ADOPTED ORDINANCE, BUT SHOULD BE CONSIDERED WHEN DRAFTING THE ORDINANCE. DISCLAIMER: This sample document is offered as a service to units of local government to assist them in using a proper format when imposing a tax that the Illinois Department of Revenue is required by law to administer. This sample document does not take the place of legal advice. If you choose to use this sample document, however, and you properly complete and adopt it and timely file a certified copy of it with the Department, the Department will administer the tax. Please keep in mind that your local government attorney should always be consulted regarding the legality and appropriateness of the legislation that you are considering. He or she can help you modify sample documents, if necessary, to fit your community's specific needs. April 1 and October I deadlines: This tax will take effect on July 1, 2020 for all ordinances filed with the Department of Revenue on or before April 1, 2020. For ordinances filed after April 1, 2020, this tax may be imposed or discontinued or the tax rate changed at only one of two times each year - January 1 or July 1. • October 1 deadline: To take effect on January 1, an ordinance must be adopted and a certified copy filed with the Illinois Department of Revenue by October 1. • April I deadline: To take effect on July 1, an ordinance must be adopted and a certified copy filed with the Illinois Department of Revenue by April 1. Revised 01/08/2020 (65 ILCS 5/8-11-2.3) Sec. 8-11-2.3. Municipal Motor Fuel Tax Law. Notwithstanding any other provision of law, in addition to any other tax that may be imposed, a municipality in a county with a population of over 3,000,000 inhabitants may also impose, by ordinance, a tax upon all persons engaged in the municipality in the business of selling motor fuel, as defined in the Motor Fuel Tax Law, at retail for the operation of motor vehicles upon public highways or for the operation of recreational watercraft upon waterways. The tax may be imposed, in one cent increments, at a rate not to exceed $0.03 per gallon of motor fuel sold at retail within the municipality for the purpose of use or consumption and not for the purpose of resale. The tax may not be imposed under this Section on aviation fuel, as defined in Section 3 of the Retailers' Occupation Tax Act. Persons subject to any tax imposed under the authority granted in this Section may reimburse themselves for their seller's tax liability hereunder by separately stating that tax as an additional charge, which charge may be stated in combination, in a single amount, with State tax which sellers are required to collect under the Use Tax Act, pursuant to such bracket schedules as the Department may prescribe. A tax imposed pursuant to this Section, and all civil penalties that may be assessed as an incident thereof, shall be administered, collected, and enforced by the Department of Revenue in the same manner as the tax imposed under the Retailers' Occupation Tax Act, as now or hereafter amended, insofar as may be practicable; except that in the event of a conflict with the provisions of this Section, this Section shall control. The Department of Revenue shall have full power to: administer and enforce this Section; collect all taxes and penalties due hereunder; dispose of taxes and penalties so collected in the manner hereinafter provided; and determine all rights to credit memoranda arising on account of the erroneous payment of tax or penalty hereunder. Whenever the Department determines that a refund shall be made under this Section to a claimant instead of issuing a credit memorandum, the Department shall notify the State Comptroller, who shall cause the order to be drawn for the amount specified, and to the person named, in the notification from the Department. The refund shall be paid by the State Treasurer out of the Municipal Motor Fuel Tax Fund. The Department shall immediately pay over to the State Treasurer, ex officio, as trustee, all taxes and penalties collected under this Section. Those taxes and penalties shall be deposited into the Municipal Motor Fuel Tax Fund, a trust fund created in the State treasury. Moneys in the Municipal Motor Fuel Tax Fund shall be used to make payments to municipalities and for the payment of refunds under this Section. On or before the 25th day of each calendar month, the Department shall prepare and certify to the State Comptroller the disbursement of stated sums of money to named municipalities for which taxpayers have paid taxes or penalties hereunder to the Department during the second preceding calendar month. The amount to be paid to each municipality shall be the amount (not including credit memoranda) collected under this Section from retailers within the municipality during the second preceding calendar month by the Department, plus an amount the Department determines is necessary to offset amounts that were erroneously paid to a different municipality, and not including an amount equal to the amount of refunds made during the second preceding calendar month by the Department on behalf of the municipality, and not including any amount that the Department determines is necessary to offset any amounts that were payable to a different municipality but were erroneously paid to the municipality, less 1.5% of the remainder, which the Department shall transfer :into the Tax Compliance and Administration Fund. The Department, at the time of each monthly disbursement, shall prepare and certify to the State Comptroller the amount to be transferred into the Tax Compliance and Administration Fund uncles this Section. within 10 days after_ receipt by the Comptroller of the disbursement certification to the municipalities and the Tax Compliance and Administration Fund provided for in this Section to be given to the Comptroller by the Department, the Comptroller shall cause the orders to be drawn for the respective amounts in accordance with the directions contained in the certification. Nothing in this Section shall be construed to authorize a municipality to impose a tax upon the privilege of engaging in any business which under the Constitution of the United States may not be made the subject of taxation by this State. An ordinance or resolution imposing or discontinuing the tax Linder this Section or effecting a change in the rate thereof shall either: (i) be adopted and a certified copy thereof filed with the Department on or before the first day of April, whereupon the Department shall proceed to admi.ni.ster and enforce this Section as of the first day of: July next following the adopL_on and filing; or (i._i.) be adopted and a certified copy thereof filed with the Department on or before the first day of October, whereupon the Department shall proceed to administer and enforce this Section as of the first day of January next following the adoption and filing. An ordinance adopted in accordance with the provisions of this Section in effect before the effective date of this amendatory Act of the "I st General Assembly shall be deemed to impose the tax in accordance with the provisions of this Section as amended by this amendatory Act: of the 1.01st General Assembly and shall be administered by the Department of Revenue in accordance with the provisions of this Section as amended by this amendatory Act of the 1.01st General Assembly; provided that, on or before October 1, 2020, the municipality adopts and files a certified copy of a superseding ordinance that imposes the tax in accordance with the provisions of this Section as amended by this amendatory Act of the 101st General Assembly. If a superseding ordinance is not so adopted and filed, then the tax imposed in accordance with the provisions of this Section in effect before the effective date of this amendatory Act of the 1.01st General Assembly shall be discontinued on January 1, 2021. This Section shall be known and may be cited as the Municipal. Motor Friel Tax Law. (Source: P.A. 101.-32, eff. 6-28-19; 101-60V eff. 12-13-19.)