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Background Summary

On June 28, 2011, Governor Jerry Brown signed into law two bills that amended California Community Redevelopment Law in order to address the state’s ongoing budget deficit.  ABx1 26 dissolved all California redevelopment agencies (RDAs) effective October 1, 2011.  This legislation prevented RDAs from engaging in new activities and outlined a process for winding down the RDA’s financial affairs.  It also set forth a process for distributing funds from the former RDAs to other local taxing entities.  A companion bill, ABx1 27, was also passed, which allowed individual RDAs to avoid dissolution if they agreed to make substantial annual payments into a Special District Allocation Fund and Educational Revenue Augmentation Fund.

In response, the California Redevelopment Association, the League of California Cities and other parties filed petitions with the California Supreme Court challenging the constitutionality of both ABx1 26 and ABx1 27.  On December 29, 2011, the California Supreme Court upheld the constitutionality of ABX1 26, while striking down ABx1 27 as unconstitutional.  The ruling in California Redevelopment Association v. Matosantos also extended some of the deadlines stipulated in ABx1 26 due to delays caused by the litigation.  As a result, approximately 400 RDAs were dissolved on February 1, 2012, with the assets and liabilities transferred to Successor Agencies and Successor Housing Agencies pursuant to ABx1 26. 

The California State Legislature made additional changes to the dissolution process when Governor Jerry Brown signed AB 1484 into law on June 27, 2012.  This legislation made a variety of substantive amendments to the original Dissolution Act.

The May 30 Tax Allocation Bond Refunding Program Webinar video is now available for viewing.
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