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Redevelopment Agency Dissolution: Next Steps

February 1, 2012

Despite the best efforts of a broad coalition of other organizations and the League to protect local economies, redevelopment agencies across the state were dissolved under AB 1x 26, effective today, leaving many unanswered legal and technical questions.


The League has been working to respond to the Court's decision since the Dec. 29 Supreme Court ruling which upheld AB 1x 26 and struck down AB 1x27. Sen. Alex Padilla (D-Pacoima) authored SB 659, which would have postponed the dissolution and given time to work out some of the serious flaws in AB 1x 26, but that measure was ultimately rejected by legislative leadership.

Yesterday, SB 654 (Steinberg), which seeks to protect affordable housing funds previously maintained by redevelopment agencies and requires several types of loans to be recognized as enforceable obligations, passed in the Senate. After rejecting a set of amendments which would have provided local agencies with helpful clarifications on several key issues involving interpretations of AB 1x 26, offered by Senate Republican Leader Bob Huff (R-Diamond Bar), the author dropped the bill's urgency clause and the measure was approved.

It is unclear if SB 654 will continue to move in its current form or be converted into a budget trailer bill. Also unknown is if Gov. Jerry Brown would sign a bill protecting housing funds.

The League will monitor developments with agency dissolution and continue to seek technical cleanups to AB 1x 26 which address concerns raised by local agencies. The League will also be working with local officials to explore possible options and alternatives for local economic development, including preparing for possible discussions that may emerge in the Capitol.

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