Client Alert
Governor Signs Historic Legislation to Abolish Redevelopment Agencies
July 14, 2011
BY MITCHELL B. MENZER, JEFFREY S. HABER, KENNETH KRUG, & CHARLES V. THORNTON
On June 29, 2011, Governor Brown signed ABx1 26 into law, fulfilling his promise to abolish Californias nearly 400 redevelopment agencies (the RDAs) as part of his 2011-2012 budget. In conjunction with ABx1 26 (the RDA Abolition Bill), the Governor signed ABx1 27 (the Opt-In Program), through which RDAs wishing to continue their redevelopment activities may do so upon making certain voluntary payments to the State. The Governors budget office predicts that elimination of the RDAs will redirect $1.7 billion from the RDAs to the State treasury to pay for schools and other core governmental services. RDAs that opt-in to the voluntary program would be required to make payments to the State based on a formula which, if all RDAs opt-in, would total $1.7 billion during the current fiscal year and approximately $400 million in each subsequent year.
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