Lawsuit Challenging Redevelopment Bills Imminent

Article by Lewis G. Feldman , Bruce J. Graham , Robert M. Haight, Jr. , Douglas A. Praw , Jung W. Han , Jessica M. Gill and Lauren M. Borella ,

The California Redevelopment Association ("CRA") recently announced that, in conjunction with the League of California Cities, it is nearing completion of a lawsuit (the "Lawsuit") that will challenge the constitutionality of Assembly Bill No. 26 ("ABX1 26") and Assembly Bill No. 27 ("ABX1 27") (collectively, the "Redevelopment Bills"). Governor Jerry Brown recently signed the Redevelopment Bills into law as part of California's budget package.

ABX1 26: the "Dissolution Bill"

ABX1 26 eliminates all California redevelopment agencies ("RDAs") as of October 1, 2011. As of the effective date of ABX1 26, (i.e., June 29, 2011), most RDA operations are suspended and RDAs are precluded from incurring additional debt or making payments on existing debt, with the exception of fulfilling enforceable obligations