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SA Page 11 'CRA' Continued from PlI1Je 1... The suit before the court was brought by the CRA and the redevelopment agencies of the Cities' of Moreno Vaney and Madera which sought to block parts of budget trailer bill AB 1389. AB 1389 was approved In September 2008 as part of the FY 2008-09 budget package. Certain sections of the bill authorized a one-time raid of $350 million In redevelopment funds. Judge Connelly's ruling In favor of the petitioners Invalidates that aspect of AB 1389 and prohibits the state from forcing county auditors to divert $350 million In redevelopment funds to finance state obligations. ' The lawsuit argued that state raids of redevelopment funds to balance the state's budget are unconstitutional, violating ArtIcle XVI, Section 16 of the California Constitution which states that redevelopment funds can only be used to finance redevelopment project activities. Judge Connelly agreed, writing in his ruling Thursday that AB 1389, "...in its general and ordinary operation, Inevitably conflicts with and violates the tenns and Intent of Section 16, to allocate tax increment revenues to the financing of redevelopment projects.- Attorneys continue to review the case for additional Implications. It Is not yet known whether the state will appeal this ruling. 'SB 93' COntinued from Page 1... Although eRA and the League agree that current law affecting the issue of expenditures outside of project areas should be tightened and have offered amendments which address this Issue directly, those amendments have yet to be accepted. Moreover, significant concerns remain with provisions of the bill that create undue obstacles affecting development within project areas. The L.ague and CRA appreciate that during the negotiations, Sen. Kehoe has held the bill on the Senate Floor. Out of respect for these good-faith discussions. the League has also refrained from Issuing opposition floor alerts. While the bill was amended on Wednesday, April 28. numerous significant issues remain. The League and eRA appreciates that Sen. Kehoe has expressed interest In continuing to work on the Issues. Remaining Issues The following is what was sent to the Senator's office highlighting remaining issues: In Its current form, S8 93 would make the following major changes to the use of redevelopment funds to finance publicly owned facilities: (1) The findings required to be made in connection with facilities both Inside and outside the redevelopment project area would be subject ,to judicial challenge. These findings are very subjective (e.g., "no other reasonable means of financing" the facilities) and inherently difficult to prove, requiring In some cases the proof of a negative. This change would lead to Increased litigation and cause delay and Increased costs for public projects that will leverage private investment and create jobs. (2) The provision of housing for persons of low and moderate income would be eliminated as an alternative to a finding that the public facilities would assist In the elimination of blight. This could prohibit agencies from funding public facilities, such as flood control improvements or a community center that are needed for an affordable housing project. (3) For public facilities located outside a redevelopment project area, the agency would need to undertake costly. dupllcatl~e and tlme-consumlng surveys of blighting condltJons In order to prove, that significant blight remains In the project area. Under current law, blight studies must be performed before the redevelopment plan is adopted. Once the redevelopment plan Is adopted, the project area is conclusively deemed to be a blighted 2