In 1945, the California Legislature authorized local governments to create redevelopment agencies. As part of the redevelopment agency plan, tax increment revenue that had previously been directed to schools and other local agencies was re-directed to local governments to fund redevelopment of “urban blight”.
Responding to the State’s fiscal crisis, Governor Brown’s 2011/12 budget proposed the elimination of redevelopment agencies, with the purpose of redirecting increment property tax revenue from redevelopment agencies to schools in order to lessen the State’s financial burden toward school funding. In response to the Governor’s proposal, the California Legislature enacted two measures, AB 1X 26 and AB 1X 27. AB 1X 26 proposed the elimination of redevelopment agencies, and AB 1X 27 proposed some continuance of redevelopment agency activities in exchange for payments by the agency to the State for school and special district funding. In December 2011, the California Supreme Court upheld AB 1X 26, but found AB 1X 27 to be unconstitutional.
AB 1X 26 describes the procedure by which local redevelopment agencies shall be eliminated, including the establishment of a Successor Agency and a Successor Agency Oversight Board to oversee the agency’s dissolution. Colusa’s Successor Agency has been assembled to carry out the duties prescribed by State law in dissolving the former redevelopment agency.