RDA Dissolution Bill (ABx1 26)

Overview

On June 29, 2011, the Governor signed ABx1 26 (the RDA Dissolution Bill) into law, adding Parts 1.8 and 1.85 to the Health and Safety Code.  On December 29, 2011, the California Supreme Court released its decision in California Redevelopment Association et. al. v. Matosantos, upholding ABx1 26.

As a result, effective February 1, 2012, all RDAs and community development agencies were dissolved, and successor agencies, as defined by the law, were required to be appointed to oversee the distribution of tax proceeds that would have been paid to the RDAs.  The successor agency is the sponsoring community of the RDA, unless it elects not to serve in that capacity.  In that case, pursuant to California Health and Safety Code Section 34173, the successor agency will be the first taxing entity submitting a duly adopted resolution to the County Auditor-Controller electing to become the successor agency.  The successor agencies have various legal requirements imposed on them by ABx1 26, and their actions are subject to the review of oversight boards, which are also created by the new law.

Audit Requirements

ABx1 26 included California Health and Safety Code Section 34182(a), requiring the County Auditor-Controller to conduct or cause to be conducted an agreed-upon procedures audit of each RDA in the County, to be completed by July 1, 2012. The audits are to establish each redevelopment agency's assets and liabilities, to document and determine each redevelopment agency's pass-through payment obligations to other taxing agencies, and to document and determine both the amount and the terms of any indebtedness incurred by the RDA, and certify the initial Recognized Obligation Payment Schedule (ROPS).