HB3535 amends Section 8b of the Motor Fuel Tax Law to change how money in the Transportation Renewal Fund is split between state-level highway spending and local government transportation distributions. Under current law, a larger share is transferred to the State Construction Account Fund; this bill reverses that balance for the affected years by reducing the state transfer share from 60% to 40% and increasing the share distributed by the Department of Transportation to municipalities, counties, and road districts from 40% to 60%.
The bill also preserves the existing overall structure of the fund, which dedicates 80% of the Transportation Renewal Fund to highways, bridges, congestion relief, and aviation facilities, and 20% to rail and mass transit. The mass transit portion would continue to flow mostly to the Regional Transportation Authority Capital Improvement Fund, with a smaller share going to the Downstate Mass Transportation Capital Improvement Fund. The bill takes effect immediately and includes timing rules that apply the revised highway distribution percentages before Fiscal Year 2026 and again beginning in Fiscal Year 2031, while using the opposite split during Fiscal Years 2026 through 2030.
Impact
HB3535 would directly affect the distribution of motor fuel tax revenues in Illinois by shifting more Transportation Renewal Fund dollars to local governments and less to the State Construction Account Fund during the periods covered by the bill. That would likely increase funding available for municipal, county, and road district transportation projects, while reducing the amount available for state-controlled highway construction and maintenance through IDOT-awarded contracts. The bill does not change the 80/20 split between highway-related uses and transit-related uses, but it does alter which level of government receives the highway portion.
Sentiment
No committee transcript or recorded vote information was provided, so there is no direct evidence of debate or formal support/opposition in the available record. Based on the bill text alone, the measure appears to reflect a policy preference for directing a larger share of transportation revenue to local infrastructure needs rather than state construction accounts. The lack of voting history or discussion prevents a reliable assessment of legislative momentum or bipartisan sentiment.
Contention
The main point of contention is likely to be the tradeoff between state and local control of transportation funding. Supporters would likely favor the bill because it sends more money to municipalities, counties, and road districts for local roads and bridges, while opponents may argue that reducing the state share could limit funding for statewide highway projects and IDOT-managed construction. Another possible issue is the bill’s phased timing, which creates different allocation rules across fiscal years and may be viewed as complicating budget planning and long-term transportation programming.