Update on Redevelopment Law: The Supreme Court Makes it Official - Redevelopment is Dead in California

The California Supreme Court released its opinion today in California Redevelopment Association v. Matosantos, challenging the Legislature's adoption of AB 1X 26, providing for elimination of California redevelopment agencies (RDAs), and AB 1X 27, exempting from elimination any RDA that agrees to make its share of a $1.7 billion voluntary contribution of its revenues to other local government needs.

The Court has upheld the Constitutionality of AB 1X 26 and struck down AB 1X 27. The Court held that RDAs do not have a Constitutionally protected right to continue to exist, however, RDAs do have a protected right, pursuant to Proposition 22, to not be forced to make payments to other agencies. While the State argued that the payments under AB 1X 27 are voluntary, the Court disagreed. The Court found that the payments under AB 1X 27 are not in fact voluntary because an RDA would cease to exist if it did not make the payment. Because the defective provisions within AB 1X 27 cannot be severed, the entire bill fails. Conversely, AB 1X 26 can be severed from AB 1X 27.

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