As previously reported, Judge Michael Kenny dismissed the League’s petition finding that the case was not “ripe” because neither the League nor any of its members have suffered any harm or threat of imminent harm from implementation of the challenged provisions of AB 1484. The court did not reach the merits of any of the League’s legal arguments.
In this lawsuit, the League brought several challenges to AB 1484:
The “clawback” provisions, which allow the Department of Finance to order that a city’s property tax and sales tax be withheld if the successor agency fails to pay the entire amount demanded by DOF through the housing and other funds DDRs, are unconstitutional under Prop. 1A and Prop. 22;
AB 1484 is an unconstitutional delegation of legislative authority to DOF because of the lack of standards in the law to guide DOF’s implementation; and
DOF has failed to follow the requirements of the Administrative Procedures Act, which governs the process by which state agencies adopt regulations.
In support of the motions, the League is submitting new evidence that DOF is moving forward with withholding sales tax under the clawback provisions of AB 1484. This new evidence includes letters received by the City of Santa Rosa and the County of San Bernardino from DOF demanding payment of the disputed amount of their housing DDRs and threatening DOF would direct the Board of Equalization to withhold certain amounts for the payment of August sales tax. Subsequent letters from DOF to BOE ordered that withholding, and these letters were included with the League’s motion.
A hearing date on these motions is set for Sept. 6. The League will continue to monitor DOF’s implementation of the clawback provisions of AB 1484, and will offer our support to those cities that may be facing the loss of these important tax revenues.