IL SB3236

Limits surplus fund distributions from Tax Increment Financing (TIF) special tax allocation funds to no more than 5% of all surplus funds, reduced from the current requirement to distribute all surplus funds

Changes surplus fund distribution frequency from annually to no more than once every 10 years

Prohibits any surplus fund distributions after the 23rd calendar year if a redevelopment project area's termination date is extended beyond that 23-year mark, with funds held until the project area terminates

Amends the Tax Increment Allocation Redevelopment Act within the Illinois Municipal Code (65 ILCS 5/11-74.4-7 and 11-74.4-8)

Introduced February 2, 2026 by Sen. Bill Cunningham and takes effect immediately upon passage