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Redevelopment Agency of the City of Redwood City 6.1. B. - Page 194 Notes to Basic Financial Statements, Continued For the year ended June 30, 2011 11. RECENT CHANGES IN LEGISLATION AFFECTING CALIFORNIA REDEVELOPMENT AGENCIES, Continued The Agency has entered ulto agreenlents witlz developers and other governnlent entities for the purpose of ensuruzg the redevelopment of properties uz its area. The Agency's agreenlents with developers, termed disposition and developnlent agreenlents or owner participation agreenlents, generally require tlle Agency to assist in financing land acquisition or operating costs of a specific project, but are based on the developer's performance on that project as measured by increases u1 property taxes and sales taxes generated by the project or to provide affordable housing to the conununity. The increases in these taxes are the only source of Agency assistance for the project. The Agency has agreenlents ternled pass-throughs with governnlent entities. These agreenlents require the Agency to pass througll to these entities a portion of the property tax increases it collects, representing the increases these entities would have expected to collect if the Agency had not been formed. As part of t11e 2011-12 State budget package, the California Legislature enacted and the Governor signed two conlpanion bills addressulg redevelopment, AB1x 26 ("Dissolution Ac�') and AB1x 27 ("Volwltary Program Ac�'), whicll took effect on June 29, 2011. The Dissolution Act, which is discussed inore fully below, inunediately suspended all new redevelopnlent activities and incurrence of indebtedness, and elinunates redevelopnlent agencies as of October 1, 2011. The Voluntary Program Act, whicll is discussed more fully below, allows the community that created the redevelopnleilt agency to avoid dissolution by opting to pay a substailtial conlnlunity remittance ("Renuttance') beginning F`Y 2011/12 and eac11 year thereafter. If all conunwlities wit11 redevelopment agencies opt in to the Voltuztary Program Act, the total statewide remittance would Ue $1.7 Uillion in FY 2011/12. Remittance each succeeding year would be approxinlately $400 nlillion statewide. If Redwood City opts uz to tlle Voluntary Progranl Act, the FY 2011/12 paynlent is $4.9 inillion and eac11 subsequent year is approxinlately $1.16 nlillion based on preliminary estinlates by the California Redevelopnlent Association. Biannual paynlents would be due by January 15 and May 15 of each year. On July 18, 2011, the California Redevelopment Association, the League of California Cities, and others filed a Petition for Writ of Maildate in the Suprenle Court of t11e State of California (California Redevelopment Association, et al. v. Ana Matosantos, et al., Case No. 5194861), cllallengulg the constitutionality of t11e coinpanion bills, the Dissolution Act and the Voluntary Progranl Act, on bellalf of cities, counties a11d redevelopment agencies, and requestulg a stay of their enforcement. As of the date of this report, a partial stay of enforcenlent of the conlpanion bills 11as been granted by the California Suprenle Court. The partial stay continues to prohibit RDAs fronl taking on any new obligations or engaging uz any RDA activities (otller than meeting prior enforceable obligations) on or after the effective date of the compailion bills, but it is unclear whether cities nlay still adopt opt-in ordinances during the stay. 3�