Filed 1/16/15
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
----
CITY OF EMERYVILLE et al., C074186
Plaintiffs and Respondents, (Super. Ct. No.
34201280001264CUWMGDS)
v.
MICHAEL COHEN, as Director, etc.
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of Sacramento County, Michael
P. Kenny, Judge. Affirmed.
Kamala D. Harris, Attorney General, Douglas J. Woods, Senior Assistant Attorney
General, Marc A. LeForestier, Deputy Attorney General, Ryan Marcroft, Deputy
Attorney General, for Defendant and Appellant.
Michael G. Biddle, City Attorney; and Burke, Williams & Sorensen, J. Leah
Castella, Matthew D. Visick, for Plaintiffs and Respondents.
1
The factual and legal setting of this case is complex, involving the Legislature’s
decision to dissolve the many redevelopment agencies which became a fixture of local
government financing over decades, and involving the way the moneys remaining in the
redevelopment agency coffers around the state would be redistributed.
But the narrow dispute on appeal turns on the straightforward interpretation of a
few statutes. As the trial court correctly reasoned, those statutes authorized plaintiffs
City of Emeryville and Successor Agency to the Emeryville Redevelopment Agency
(collectively, Emeryville) to “reenter” into three agreements entered into before the
dissolution of redevelopment agencies. And, contrary to the view of defendant California
Department of Finance (Department), nothing in the statutory scheme providing for the
orderly distribution of redevelopment funds subsequently invalidated these reentered
agreements. Accordingly, we shall affirm the judgment, which in effect compels the
Department to acknowledge the validity of those agreements.
BACKGROUND
General Legal Background
As briefly summarized by our Supreme Court: “In the aftermath of World War II,
the Legislature authorized the formation of community redevelopment agencies in order
to remediate urban decay. [Citations.] The Community Redevelopment Law ‘was
intended to help local governments revitalize blighted communities.’ [Citations.] It has
since become a principal instrument of economic development, mostly for cities, with
nearly 400 redevelopment agencies now active in California.” (California
Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231, 245-246 (Matosantos).)
However, as our Supreme Court explained, a perception had grown that some
redevelopment agencies were used as shams to divert property tax revenues that
otherwise would fund general local governmental services, and legislative efforts were
made to address these concerns. (Matosantos, supra, 53 Cal.4th at pp. 247-248; see
Meaney v. Sacramento Housing & Redevelopment Agency (1993) 13 Cal.App.4th 566,
2
579.) Ultimately, a more draconian measure was adopted by the Legislature:
“Responding to a declared state fiscal emergency, in the summer of 2011 the Legislature
enacted two measures intended to stabilize school funding by reducing or eliminating the
diversion of property tax revenues from school districts to the state’s community
redevelopment agencies. (Assem. Bill Nos. 26 & 27 (2011-2012 1st Ex. Sess.) enacted
as Stats. 2011, 1st Ex. Sess. 2011-2012, chs. 5-6 (hereafter Assembly Bill 1X 26 and
Assembly Bill 1X 27).) Assembly Bill 1X 26 bars redevelopment agencies from
engaging in new business and provides for their windup and dissolution. Assembly Bill
1X 27 offers an alternative: redevelopment agencies can continue to operate if the cities
and counties that created them agree to make payments into funds benefiting the state’s
schools and special districts.” (Matosantos, supra, 53 Cal.4th at p. 241.)
Our Supreme Court invalidated Assembly Bill 1X 27, because it conflicted with a
provision of the California Constitution forbidding the payments required thereunder.
(Matosantos, supra, 53 Cal.4th at pp. 242, 264-274.) Following that decision, the only
lawful option for redevelopment agencies was windup and dissolution, as provided by
Assembly Bill 1X 26, set forth in the Health and Safety Code, although Matosantos
judicially reformed certain dates in Assembly Bill 1X 26 to best effectuate the
Legislature’s intent. (Matosantos, at pp. 274-276.)
The Principal Statutes in Contention
Assembly Bill 1X 26 provided that successor agencies would “[e]xpeditiously
wind down the affairs of the redevelopment agency pursuant to the provisions of this part
and in accordance with the direction of the oversight board.” (Health & Saf. Code,
§ 34177, subd. (h).)1 Each oversight board consists of members appointed as set forth by
statute (§ 34179, subd. (a)), and has a fiduciary duty towards “holders of enforceable
1 Further undesignated statutory references are to the Health and Safety Code.
3
obligations and the taxing entities that benefit from distributions of property tax”
(§ 34179, subd. (i)) to carry out its duties, which include the duty to review specified
actions by the successor agencies, including “Establishment of the Recognized
Obligation Payment Schedule [ROPS].” (§ 34180, subd. (g).) The ROPS is “the
document setting forth the minimum payment amounts and due dates of payments
required by enforceable obligations for each six-month fiscal period . . . .” (§ 34171,
subd. (h).) The successor agency has a duty to “[c]ontinue to make payments due for
enforceable obligations.” (§ 34177, subd. (a).) Thus, to help insure the orderly windup
and dissolution of the redevelopment agencies, the ROPS lists what remaining
enforceable obligations exist.
To ensure each ROPS is accurate, both the Department and the State Controller,
not a party herein, have the authority to require documentation of purported enforceable
obligations, and they and any “taxing entity” have authority to sue “to prevent a violation
under this part . . . .” (§ 34177, subd. (a)(2).) The Department also has authority to
“review an oversight board action taken pursuant to” Assembly Bill 1X 26. (§ 34179,
subd. (h).)
Under Assembly Bill 1X 26, section 34178, subdivision (a) provided as follows:
“Commencing on the operative date of this part, agreements, contracts, or
arrangements between the city or county, or city and county that created the
redevelopment agency and the redevelopment agency are invalid and shall not be
binding on the successor agency; provided, however, that a successor entity
wishing to enter or reenter into agreements with the city, county, or city and
county that formed the redevelopment agency that it is succeeding may do so upon
obtaining the approval of its oversight board.” (Italics added.)
Further, section 34180, subdivision (h) requires oversight board approval of a
request by a successor agency to enter into such an agreement.
However, effective June 27, 2012, Assembly Bill No. 1484 (Stats. 2012, ch. 26,
§ 14) (hereafter Assembly Bill 1484) added the following sentence to section 34178,
subdivision (a):
4
“A successor agency or an oversight board shall not exercise the powers
granted by this subdivision to restore funding for an enforceable obligation that
was deleted or reduced by the [Department] pursuant to subdivision (h) of Section
34179 unless it reflects the decisions made during the meet and confer process
with the [Department] or pursuant to a court order.” (§ 31478, subd. (a), as
amended by Stats. 2012, ch. 26, §§ 14, 40.)2
Assembly Bill 1484 made other significant changes as well. Originally, section
34179, subdivision (h) in part provided, “The Department . . . may review an oversight
board action taken pursuant to the act adding this part. As such, all oversight board
actions shall not be effective for three business days, pending a request for review” by the
Department, and upon such review, the Department had “10 days from the date of its
request to approve the oversight board action or return it to the oversight board for
reconsideration and such oversight board action shall not be effective until approved by
the department.” (Stats. 2011-2012, 1st Ex. Sess., ch. 5, § 7, italics added.) Assembly
Bill 1484 delayed the effective date of oversight board action for five days, gave the
Department 40 days to review such action, and provided that, upon such review, the
Department “may eliminate or modify any item on that schedule prior to its approval”
and “shall provide notice . . . as to the reasons for its actions.” (§ 34179, subd. (h), as
amended by Stats. 2012, ch. 26, §§ 16, 40.)
Assembly Bill 1484 also added new section 34177.3, providing in part as follows:
“(a) Successor agencies shall lack the authority to, and shall not, create
new enforceable obligations . . . or begin new redevelopment work, except in
compliance with an enforceable obligation that existed prior to June 28, 2011 [i.e.,
before the effective date of Assembly Bill 1X 26].
“(b) Successor agencies may create enforceable obligations to conduct the
work of winding down the redevelopment agency . . . .
2 Assembly Bill 1484 was related to a budget bill, and took effect when signed. (Stats.
2012, ch. 26, § 40; see Cal. Const., art. IV, § 12, subd. (e).) Assembly Bill 1X 26, too,
was budget related, and was signed June 28, 2011. (Stats. 2011, 1st Ex. Sess. 2011-2012,
ch. 5, § 16.)
5
“(c) Successor agencies shall lack the authority to, and shall not, transfer
any powers or revenues of the successor agency to any other party, public or
private, except pursuant to an enforceable obligation on a [ROPS] approved by the
department. Any such transfers of authority or revenues that are not made
pursuant to an enforceable obligation on a [ROPS] approved by the Department of
Finance are hereby declared to be void, and the successor agency shall take action
to reverse any of those transfers. . . .
“(d) . . . Any actions taken by redevelopment agencies to create
obligations after June 27, 2011, are ultra vires and do not create enforceable
obligations.
“(e) The Legislature finds and declares that the provisions of this section
are declaratory of existing law.” (Stats. 2012, ch. 26, § 12.)
Emeryville’s Redevelopment Projects
On February 15, 2011 (before Assem. Bill 1X 26 had passed), Emeryville and its
redevelopment agency had entered into a contract under which the agency pledged funds
to Emeryville for redeveloping 27 projects. Emeryville realized that contract was
subsequently invalidated by Assembly Bill 1X 26--specifically, the first clause of section
34178, subdivision (a). However, it also realized that the statute also provided that “a
successor entity wishing to enter or reenter into agreements with the city . . . that formed
the redevelopment agency that it is succeeding may do so upon obtaining the approval of
its oversight board.” (§ 34178, subd. (a).)
On June 19, 2012, Emeryville and the successor agency executed five agreements,
restating the provisions as to five of the original projects, and on June 26, 2012 (one day
prior to the effective date of Assembly Bill 1484, discussed immediately above, and
purportedly under the earlier, Assembly Bill 1X 26 version of section 34178, subdivision
(a)), its oversight board approved three of these five agreements.3 These agreements
3 As the details and wisdom of these projects are not relevant to the issues on appeal, we
will not discuss them. Although the Department heads a section of its brief detailing each
6
were included in an amended ROPS submitted on June 28, 2012, the day after Assembly
Bill 1484 passed. On July 3, 2012, three business days later, the Department told
Emeryville it was reviewing the ROPS. On July 12, 2012, it sent a letter to all successor
agencies stating it would not accept ROPS revisions and rejected Emeryville’s amended
ROPS. The trial court found that this action effectively disapproved the agreements.
The Present Litigation
Emeryville sued the Department, seeking to compel the Department to recognize
the enforceability of the three reentered agreements, filing a combined petition for writ of
administrative mandamus and complaint for declaratory and injunctive relief. The trial
court issued a thorough written opinion in favor of Emeryville, and granted relief in a
formal judgment and writ of mandamus.4
The Department timely filed this appeal therefrom.
DISCUSSION
The original Assembly Bill 1X 26 statutes appeared to authorize Emeryville to
reenter into the agreements at issue, subject to approval by the oversight board and
review by the Department. Emeryville obtained approval by its oversight board for the
agreements, which, when so approved, were valid unless disapproved by the Department.
If disapproved, the Department was to “return [the ROPS] to the oversight board for
reconsideration” within 10 days. (Former § 34179, subd. (h), added by Stats. 2011-2012,
project, we reject its given reasons for invalidating each in Parts I and II of the
Discussion, post.
4 The trial court found the question of the validity of the three prior agreements was
moot “because the subject matter of those agreements was subsumed into” the three
reentered agreements validated by the trial court. The parties evidently agree that any
issues surrounding the prior agreements are moot if we uphold the three reentered
agreements.
7
1st Ex. Sess., ch. 5, § 7.) In this case, the Department did not substantively disapprove
the amended ROPS, it simply refused to process it, claiming it was untimely.5
We note that the Department asserts the reentered agreements covered the subject
matter of agreements disapproved in an earlier ROPS submission, but agrees they had
“new and different terms.” The Department’s point seems to be that they were not
merely reentered but different agreements. However, the Department does not articulate
any material differences, and it was the Department’s burden to explain any basis for
reversal on which it seeks to rely. (See Denham v. Superior Court (1970) 2 Cal.3d 557,
564; see also Estate of Palmer (1956) 145 Cal.App.2d 428, 431.)
The Department suggests throughout its briefing that Emeryville acted with
improper motives by rushing these agreements through with knowledge of a pending
legislative change. However, “It is presumed that official duty has been regularly
performed.” (Evid. Code, § 664; see Crowe v. Boyle (1920) 184 Cal. 117, 156; Southern
Cal. Underground Contractors, Inc. v. City of San Diego (2003) 108 Cal.App.4th 533,
5 In its opposition in the trial court, the Department briefly argued--without citing
authority--that the amended ROPS was properly rejected because it was untimely. That
theory has not been raised on appeal. We find it has been abandoned. (See 9 Witkin,
Cal. Procedure (5th ed. 2008) Appeal, § 701, pp. 769-771.)
We have recently commented on the importance of seeking the proper form of
relief in disputes about the dissolution of redevelopment agencies. (See City of Pasadena
v. Cohen (2014) 228 Cal.App.4th 1461.) Here, once the Department issued its blanket
notification that it was refusing to consider any revised ROPS, Emeryville arguably
should have filed a petition for writ of ordinary mandate (Code Civ. Proc., § 1085), to
compel the Department to exercise its duty to process the revised ROPS on the merits,
and await its discretionary decision. But the Department does not claim on appeal that
section 34179, subdivision (h) [“oversight board action shall not be effective until
approved by the department”] means that the ROPS never became effective, and, as
stated, does not provide any statutory or regulatory authority to defend its prior stance
that it could refuse to consider all revised ROPS as untimely. Accordingly, even if
Emeryville failed to properly seek relief, remand would be an idle act (cf. Civ. Code,
§ 3532), because the Department’s present stance is that the obligations at issue on the
revised ROPS are legally infirm, and therefore it would refuse to approve them.
8
548.) Even assuming, as the State alleges, that the oversight board disregarded legal
advice, as an elected body it was free to do so. Nor is it necessarily sinister for a party to
hasten to comply with a law before adverse changes occur. Finally, as the trial court
explicitly found, the oversight board thoroughly debated the issues, and approved only
three of the five agreements submitted to it, showing discretion was actually exercised.
Essentially, the Department’s arguments boil down to two claims. First, the
Department asserts that the statute allowing reentry of certain agreements, section 34178,
is too narrow to encompass the three agreements here, because of certain statutory
arguments we address in more detail in Part I, post, and because of the policy inherent in
Assembly Bill 1X 26. Second, the Department claims that Assembly Bill 1484--passed
after Emeryville reentered the three agreements--had retrospective effect, including
section 34177.3, quoted above. Emeryville conceded in the trial court and appellate
briefing that this claim, if correct, would invalidate those agreements. As we shall
explain, we are not persuaded by either of the Department’s claims.
I
Emeryville’s Legal Authority to Reenter into the Agreements
Citing various parts of Assembly Bill 1X 26 and its general goal, the Department
asserts section 34178, subdivision (a) did not authorize Emeryville to reenter into the
agreements at issue herein. We hold the statute unambiguously allowed Emeryville to do
what it did.
First, the Department’s policy claim cites several disparate sections of Assembly
Bill 1X 26 to establish the Legislature’s desire to halt redevelopment agency activity and
freeze existing assets. But an uncodified statement of legislative intent explicitly sets
forth the purposes of Assembly Bill 1X 26, which included barring “existing
redevelopment agencies from incurring new obligations,” and requiring “successor
agencies to expeditiously wind down the affairs of the dissolved redevelopment agencies
and to provide the successor agencies with limited authority that extends only to the
9
extent needed to implement a winddown of redevelopment agency affairs.” (Stats. 2011-
2012, 1st Ex. Sess., ch. 5, § 1, subd. (j)(1) & (4).) Our Supreme Court validated
Assembly Bill 1X 26’s purpose in these regards. (See Matosantos, supra, 53 Cal.4th at
pp. 254-262.)
But this general legislative purpose was implemented through specific statutes,
including section 34178, statutes that must be effectuated. “The will of the Legislature
must be determined from the statutes; intentions cannot be ascribed to it at odds with the
intentions articulated in the statutes.” (People v. Knowles (1950) 35 Cal.2d 175, 182.)
“[T]he meaning of a statute is to be sought in the language used by the Legislature.” (In
re Miller (1947) 31 Cal.2d 191, 198.) We see nothing in the undisputed policy of section
Assembly Bill 1X 26 to dissolve redevelopment agencies that changes the language of
section 34178, or raises any latent ambiguity therein. (See People v. Snook (1997)
16 Cal.4th 1210, 1215 [“If there is no ambiguity in the language, we presume the
Legislature meant what it said”]; Brown v. Gardner (1994) 513 U.S. 115, 118 [130
L.Ed.2d 462, 466] [“Ambiguity is a creature not of definitional possibilities but of
statutory context”].) “An ambiguity arises only if ‘there [is] more than one construction
in issue which is semantically permissible, i.e., more than one usage which makes sense
of the statutory language given the context and applicable rules of usage.’ ” (City of
Sacramento v. Public Employees’ Retirement System (1994) 22 Cal.App.4th 786, 795
(Sacramento).)
The Department’s reading of section 34178 as excluding the authority to maintain
existing redevelopment projects by means of reentering into agreements providing
therefor is not plausible, because it nullifies the language permitting a successor agency
to “enter or reenter” contracts. As the trial court reasoned: “The concept of ‘reentering’
into an agreement presupposes the existence of a prior agreement, in this case an
agreement between the former Redevelopment Agency and the City.” Thus, section
34178 was intended to allow prior agreements to be reentered, subject to oversight board
10
approval, and possible review by the Department. Nowhere in its briefing does the
Department tender an alternate meaning of “reenter.” Instead, its briefing reads that word
out of the statute. We reject that course. “An interpretation which gives effect is
preferred to one which makes void.” (Civ. Code, § 3541.) “ ‘If possible, significance
should be given to every word, phrase, sentence and part of an act in pursuance of the
legislative purpose[;]’ [citation] ‘a construction making some words surplusage is to be
avoided.’ ” (Moyer v. Workmen’s Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230.)
The Department cites a number of specific statutes in its effort to restrict the scope
of the authority to reenter into agreements under section 34178, but none raise an
ambiguity in the meaning of “reenter.” For example, one section prevents redevelopment
agencies from incurring or expanding monetary obligations, but contains the proviso
“except as provided in this part.” (§ 34161.) Other statutes would preclude incurring
debt or new obligations. (§§ 34162, 34163.) Nor were successor agencies to take any
actions “that would further deplete the corpus of the agencies’ funds.” (§ 34167, subd.
(a).) Asset transfers between a redevelopment agency and its organic body after
January 1, 2011, were to be restricted “to the extent not prohibited by state and federal
law,” and any such transfer was “deemed not to be in furtherance of the Community
Redevelopment Law and is thereby unauthorized.” (§ 34167.5.) Most agreements
between former redevelopment agencies and their organic bodies were invalidated
(§ 34178, subd. (a)), as Emeryville conceded. A definitional section provides: “For
purposes of this part, ‘enforceable obligation’ does not include any agreements, contracts,
or arrangements between the city, county, or city and county that created the
redevelopment agency and the former redevelopment agency.” (§ 34171, subd. (d)(2).)
As the Department explains, these provisions facilitate the dissolution and
winddown of the redevelopment agencies. But none of these statutes, individually or
collectively, change the fact that in the very same bill, Assembly Bill 1X 26, the
Legislature explicitly authorized successor agencies to enter or reenter into agreements,
11
subject to approval by oversight boards. And Emeryville points to a statute that partly
defines one kind of enforceable agreement as: “Any legally binding and enforceable
agreement or contract that is not otherwise void as violating the debt limit or public
policy.” (§ 34171, subd. (d)(1)(E).)6 Emeryville plausibly reads these statutes together
to provide a limitation on the types of agreements that may be reentered. This
undermines the Department’s argument that if section 34178 allows reentry of some
redevelopment agreements, all redevelopment agreements could be reentered,
undermining the point of Assembly Bill 1X 26. Emeryville concedes it could not
reconstitute its redevelopment agency because that would violate the public policy behind
the dissolution statute, in contravention of section 34171, subdivision (d)(1)(E). Further,
section 34179, subdivision (i) imposes a fiduciary duty on oversight boards “to holders of
enforceable obligations and the taxing entities that benefit from distributions of property
tax . . . .” Finally, the Department, the State Controller, and any adversely affected taxing
entity can sue the oversight board for a violation of such fiduciary duty. Thus, the
scenario posited by the Department has no basis in the law or reality.
The Department also makes the more nuanced claim that section 34178 refers to a
very narrow class of agreements capable of being reentered, and that the three at issue
here fall outside its ambit. The Department points out that section 34178, subdivision (b)
explicitly authorizes three types of agreements--none like the ones at issue in this case.
But that subdivision begins, “Notwithstanding subdivision (a), any of the following
agreements are not invalid and may bind the successor agency,” and then lists three types
6 We note that although Assembly Bill 1484 amended parts of section 34171, the
language we quote in this opinion was not changed. (See Stats. 2012, ch. 26, § 6.) In its
reply brief, the Department contends section 34171, subdivision (d)(1), which defines
“enforceable obligations,” defines enforceable obligations of the redevelopment agencies,
not the successor agencies--with one exception pertaining to administrative expenses--
and therefore has no relevance to the scope of section 34178. We see no such limitation
in section 34171, subdivision (d)(1).
12
of agreements. (§ 34178, subd. (b).)7 That is not language of limitation, i.e., language
limiting subdivision (a)’s authority (to reenter into agreements) to those agreements
specified in subdivision (b), but language of enlargement, permitting additional
agreements. As we read the statute, in addition to agreements permitted by subdivision
(a), subdivision (b) lists other agreements--“[n]otwithstanding subdivision (a)”--that
“may bind the successor agency.” This language does not raise any ambiguity about the
meaning of the word reenter as used in subdivision (a) of section 34178.
The Department also notes two sections permitting loans from a county treasury
“necessary to ensure prompt payments of redevelopment agency debts” (§ 34183, subd.
(c)), and agreements necessary to operate the successor agency, such as rent, equipment,
and supplies (§ 34171, subd. (d)(1)(F)), and contends those are the only agreements that
could be reentered under section 34178, subdivision (a). The Department then proceeds
to posit that if Emeryville’s view of the breadth of section 34178 were correct, there
would be no need to describe specific agreements. We disagree. The fact that a county
treasurer is vested with authority to loan funds to pay a redevelopment agency’s
enforceable debt does not equate to an enforceable agreement, nor does the provision
authorizing agreements to pay administrative expenses of successor agencies address
reentered agreements.
7 Section 34178, subdivision (b) partly provides: “Notwithstanding subdivision (a), any
of the following agreements are not invalid and may bind the successor agency: [¶] (1)
A duly authorized written agreement entered into at the time of issuance, but in no event
later than December 31, 2010, of indebtedness obligations . . . . [¶] (2) A written
agreement between a redevelopment agency and the city . . . that created it that provided
loans or other startup funds for the redevelopment agency that were entered into within
two years of the formation of the redevelopment agency. [¶] (3) A joint exercise of
powers agreement in which the redevelopment agency is a member . . . . However, upon
assignment to the successor agency . . . the successor agency’s rights, duties, and
performance obligations under that joint exercise of powers agreement shall be limited by
the constraints imposed on successor agencies by the act adding this part.”
13
Finally, although the Department asserts the reentered agreements “flatly
contradict other winddown provisions,” no citations follow this assertion, so we have no
other specific sections to address to refute the Department’s contention that Emeryville’s
reentered agreements violate Assembly Bill 1X 26, in letter or spirit.8
Instead, as the trial court found, by enacting section 34178, subdivision (a), the
Legislature provided a means to continue some redevelopment work, and the bulwark
against abuse is vested in the oversight board, subject to review by the Department.
Although the Department timely invoked its authority (§ 34179, subd. (h), as adopted by
Assem. Bill 1X 26), thereafter, it did not give Emeryville substantive grounds for denying
the enforceability of the reentered agreements, nor return the matter “for reconsideration”
(ibid.), but deemed the amended ROPS untimely and invalid therefor, a position
abandoned on appeal. (See fn. 5, ante.)
Accordingly, we reject the Department’s claim that section 34178 is limited either
by the general purpose of Assembly Bill 1X 26, or any of the specific statutes cited to
us.9
8 Elsewhere in its briefing, while attacking each reentered agreement in turn, the
Department points to section 34177, subdivision (d), which requires a successor agency
to “[r]emit unencumbered balances of redevelopment agency funds to the county auditor-
controller for distribution to the taxing entities.” This presupposes the balances are
unencumbered and adds nothing to the Department’s claim that section 34178 is severely
limited. Similarly, the fact the reentered agreements in part cited a statute (§ 33445)
made inoperative by Assembly Bill 1X 26 (see § 34189, subd. (a)), does not change the
scope of section 34178.
9 As described by our Supreme Court, Assembly Bill 1X 27 (passed in tandem with
Assembly Bill 1X 26), provided “an exemption from dissolution for cities and counties
that agree to make specified payments to both the county [Education Revenue
Augmentation Fund] and a new county special district augmentation fund on behalf of
their redevelopment agencies” which would allow such agencies “to continue in
operation without interruption.” (Matosantos, supra, 53 Cal.4th at p. 251.) The parties
have not briefed whether the anticipated ability of redevelopment agencies to continue in
14
II
Retrospectivity of Assembly Bill 1484
The Department contends that a portion of Assembly Bill 1484 retrospectively
invalidated the reentered agreements. We disagree.
As quoted earlier, section 34177.3, subdivision (c) partly provides that, “Successor
agencies shall lack the authority to . . . transfer any powers or revenues of the successor
agency to any other party . . . except pursuant to an enforceable obligation on a [ROPS]
approved by the department. Any such transfers of authority or revenues that are not
made pursuant to an enforceable obligation on a [ROPS] approved by the [Department]
are hereby declared to be void.” Subdivision (a) of section 34177.3 precludes “new
redevelopment work,” except as to enforceable obligations that existed before Assembly
Bill 1X 26 took effect. Subdivision (d) partly provides: “Any actions taken by
redevelopment agencies to create obligations after June 27, 2011, are ultra vires and do
not create enforceable obligations.” Subdivision (e) provides: “The Legislature finds
and declares that the provisions of this section are declaratory of existing law.” (See
Stats. 2012, ch. 26, § 12.)
Emeryville acknowledges section 34177.3, subdivision (c) grants the Department
veto authority over any obligation included in a ROPS. The Department contends it does
not matter that Emeryville reentered the three agreements before Assembly Bill 1484
passed, because the bill permits the Department to refuse to recognize as enforceable any
agreements between a successor agency and another party.
We reject the Department’s view that Assembly Bill 1484 has such retrospective
effect.
this fashion sheds light on the interpretive questions posed by this appeal, and we decline
to explore such possibilities in this opinion.
15
As summarized by our Supreme Court: “ ‘Generally, statutes operate
prospectively only.’ [Citations.] ‘[T]he presumption against retroactive legislation is
deeply rooted in our jurisprudence, and embodies a legal doctrine centuries older than our
Republic. Elementary considerations of fairness dictate that individuals should have an
opportunity to know what the law is and to conform their conduct accordingly . . . . For
that reason, the “principle that the legal effect of conduct should ordinarily be assessed
under the law that existed when the conduct took place has timeless and universal
appeal.” ’ [Citations.] ‘The presumption against statutory retroactivity has consistently
been explained by reference to the unfairness of imposing new burdens on persons after
the fact.’ ” (McClung v. Employment Development Dept. (2004) 34 Cal.4th 467, 475
(McClung).)
The general rule is that a “ ‘statute may be applied retroactively only if it contains
express language of retroactivity or if other sources provide a clear and unavoidable
implication that the Legislature intended retroactive application.’ ” (McClung, supra,
34 Cal.4th at p. 475.) Here, Assembly Bill 1484 does not state that it is to be applied
retrospectively.
The Department emphasizes that section 34177.3, subdivision (e) states the section
is declaratory of existing law. Further, the Department relies on section 34177.3,
subdivision (d), which states: “Any actions taken by redevelopment agencies to create
obligations after June 27, 2011, are ultra vires and do not create enforceable obligations,”
and section 34177.3, subdivision (a), which partly provides: “Successor agencies shall
lack the authority to, and shall not, create new enforceable obligations under the authority
of the Community Redevelopment Law . . . or begin new redevelopment work, except in
compliance with an enforceable obligation that existed prior to June 28, 2011.” The
Department claims the only extant obligations before that date were obligations of the
redevelopment agencies, not the successor agencies, and argues these last two provisions
16
reflect a clear legislative intention that section 34177.3 should apply retrospectively. We
do not agree.10
Taking the last point first, section 34177.3, subdivision (a) refers to “new”
obligations, and by its terms does not preclude reentry into “an enforceable obligation
that existed prior to June 28, 2011.” Such reentry is what section 34178 permits. And
subdivision (d) of section 34177.3 refers to “actions taken by redevelopment agencies to
create” new obligations, and does not refer to actions taken by successor agencies. If the
Legislature intended subdivision (d) to refer to successor agencies it would have said so.
“Where a statute referring to one subject contains a critical word or phrase, omission of
that word or phrase from a similar statute on the same subject generally shows a different
legislative intent.” (Craven v. Crout (1985) 163 Cal.App.3d 779, 783; see Tyrone W. v.
Superior Court (2007) 151 Cal.App.4th 839, 850.)
Turning to the declaration in section 34177.3, subdivision (e), that the provisions
of the section “are declaratory of existing law,” such statement is incorrect, because
10 The Department’s reference to section 34179.5, subdivision (b)(2), part of Assembly
Bill 1484, is puzzling. That section confirms that an enforceable obligation “includes any
of the items listed” in section 34171, subdivision (d) and adds two further types of
enforceable obligations, namely, “contracts detailing specific work to be performed that
were entered into by the former redevelopment agency prior to June 28, 2011, with a
third party that is other than the city . . . that created the former redevelopment agency,
and indebtedness obligations as defined in subdivision (e) of Section 34171.” (Italics
added.) But because section 34179.5 confirms that “any” enforceable obligation defined
by section 34171 remains enforceable, we fail to see how additional obligations
described by section 34179.5 are relevant. The fact the agreements at issue do not meet
the emphasized definition in section 34179.5 does not obviate the fact that they do meet
the definition in 34171, as explained above, because they fall within, “Any legally
binding and enforceable agreement or contract that is not otherwise void as violating the
debt limit or public policy.” (§ 34171, subd. (d)(1)(E), italics added.) The use of “any”
in both sections 34171 and 34179 reflect expansiveness, not limitation. “From the
earliest days of statehood the courts have interpreted ‘any’ to be broad, general, and all
embracing.” (Burnsed v. State Bd. of Control (1987) 189 Cal.App.3d 213, 217.)
17
section 34177.3 allows the Department to preclude what was permitted by Assembly Bill
1X 26.
A statement that a statute is declarative of existing law may bear on the
Legislature’s intent. (See, e.g., Western Security Bank v. Superior Court (1997)
15 Cal.4th 232, 243-245 (Western Security Bank).) But it is not within the Legislature’s
bailiwick to interpret laws previously passed. (See McClung, supra, 34 Cal.4th at pp.
472-473.) At best such a declaration “is but a factor for a court to consider and ‘is neither
binding nor conclusive in construing the statute.’ ” (Id. at p. 473; see California
Employment Stabilization Com. v. Payne (1947) 31 Cal.2d 210, 214; Del Costello v. State
of California (1982) 135 Cal.App.3d 887, 893, fn. 8.) As we have explained previously:
“The recognition of subsequent assertions of legislative intent is derived
from cases where the meaning of the earlier enactment is ‘unclear.’ [Citation.] It
cannot rest upon the notion that the (subsequent) Legislature has authority to
interpret the earlier statute for that is a judicial task. [Citation.]
“The doctrine’s legitimate ground is that, as to unsettled questions
concerning rules of decision and absent a good reason to the contrary, the
Legislature’s subsequent resolution should receive deference. [Citation.] It
presupposes a case in which the question of meaning is closely balanced, the
views of reasonable persons might well diverge, and no private rights have clearly
accrued under the earlier statute.” (Sacramento, supra, 22 Cal.App.4th at p. 798.)
We have found no ambiguity in the relevant portions of Assembly Bill 1X 26.
Assembly Bill 1484 changed the law, expanding the Department’s authority to nullify
reentered agreements. Accordingly, the statement in section 34177.3, subdivision (e) that
“the provisions of this section are declaratory of existing law” is incorrect.11 If the
Legislature wanted to make the change retrospective, it could easily have stated the
11 The Department also contends Assembly Bill 1484 merely “clarified” the law, largely
reiterating interpretive claims regarding Assembly Bill 1X 26 that we rejected in Part I,
ante. But the Department then concedes the contracts would “fail” under Assembly Bill
1484, even if they were otherwise enforceable under Assembly Bill 1X 26. That signals
a change in the law.
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changes applied to acts after a specific prior date. Indeed, other parts of Assembly Bill
1484 relied on by the Department did just that, as section 34179.5, subdivision (b)(2)
references contracts “entered into . . . prior to June 28, 2011,” and section 34178.8 refers
to asset transfers after January 31, 2012, and 34177.3 itself references dates in
subdivisions (a) and (d), as quoted earlier, showing the Legislature knows how to specify
the effective date of statutes.
Accordingly, we conclude section 34177.3 is prospective in application. (See
McClung, supra, 34 Cal.4th at pp. 473-477 [statute that changed existing law not applied
retrospectively, despite legislative declaration that it stated existing law]; Thurman v.
Bayshore Transit Management , Inc. (2012) 203 Cal.App.4th 1112, 1141 (Thurman)
[statement that a statute was declarative of existing law “insufficient to overcome the
strong presumption against retroactivity”].)
We endorse the trial court’s cogent summation on this point:
“The Legislature may well have changed its collective mind about the
wisdom of permitting such action [i.e., allowing the reentry of agreements], and
certainly had the authority to forbid it on a prospective basis. Indeed, the
Legislature had the authority to invalidate actions already taken on a retroactive
basis by making a proper declaration of its intent to do so. However, the
Legislature could not do what it did--interpret the law by asserting that it was only
restating the law as originally enacted.”
The lead case relied on by the Department for a contrary result is distinguishable.
The Department relies on part of the following quotation:
“ ‘[A] subsequent expression of the Legislature as to the intent of the prior
statute, although not binding on the court, may properly be used in determining the
effect of a prior act.’ [Citation.] Moreover, even if the court does not accept the
Legislature’s assurance that an unmistakable change in the law is merely a
‘clarification,’ the declaration of intent may still effectively reflect the
Legislature’s purpose to achieve a retrospective change. [Citation.] Whether a
statute should apply retrospectively or only prospectively is, in the first instance, a
policy question for the legislative body enacting the statute. [Citation.] Thus,
where a statute provides that it clarifies or declares existing law, ‘[i]t is obvious
that such a provision is indicative of a legislative intent that the amendment apply
19
to all existing causes of action from the date of its enactment. In accordance with
the general rules of statutory construction, we must give effect to this intention
unless there is some constitutional objection thereto.’ ” (Western Security Bank,
supra, 15 Cal.4th at p. 244; see Plotkin v. Sajahtera, Inc. (2003) 106 Cal.App.4th
953, 960-961 (Plotkin).)
However, no change in the law was made in that case. In Western Security Bank,
the Court of Appeal had interpreted the antideficiency laws, after which the Legislature
passed an urgency bill to abrogate the Court of Appeal’s holding while the matter was
pending before our Supreme Court. (Western Security Bank, supra, 15 Cal.4th at pp.
237-238, 241-242.) The bill provided a statement of legislative intent to confirm a
different interpretation of the antideficiency laws, and to abrogate the holding of the
Court of Appeal. (Id. at p. 242.) After reviewing the changes wrought by the bill,
Western Security Bank found a legislative intention to clarify and not to change the law,
and found such intention applied to the case before it. (Id. at pp. 243-253.) Thus, no
change in the law took place. (Id. at p. 252.) McClung, supra, 34 Cal.4th 467,
distinguished Western Security Bank on this very ground. (McClung, at pp. 475-476.)12
McClung held that where legislation changes the law, a legislative statement that it
did not change the law is insufficient “to overcome the strong presumption against
retroactivity.” (McClung, supra, 34 Cal.4th at p. 476; see id. at pp. 475-476; see also
Thurman, supra, 203 Cal.App.4th at p. 1141.) The trial court adhered to McClung.
(App. 237-238) So must we. (See Auto Equity Sales, Inc. v. Superior Court (1962)
57 Cal.2d 450, 455.)
It is true, as the Department points out, that one reason for the presumptive
prospective interpretation of statutes, e.g., reliance interests, would not apply to statutes
reorganizing state government. The Legislature is free, within the confines of the
California Constitution, to reconfigure and redistribute authority to its subdivisions as it
12 Nor did a local law change in Plotkin, supra, 106 Cal.App.4th 953, another case relied
on by the Department, it was merely clarified. (See id. at pp. 960-961.)
20
chooses. (See Star-Kist Foods, Inc. v. County of Los Angeles (1986) 42 Cal.3d 1, 6;
Mallon v. City of Long Beach (1955) 44 Cal.2d 199, 209.) But the fact one reason for the
presumptive rule does not apply on the facts of this specific case does not change the rule
itself. Assembly Bill 1484 does not apply retrospectively.
DISPOSITION
The judgment is affirmed. Emeryville shall recover costs on appeal. (See Cal.
Rules of Court, rule 8.278.)13
DUARTE , J.
We concur:
NICHOLSON , Acting P. J.
MURRAY , J.
13 We deny Emeryville’s pending request for judicial notice as moot, because the
proffered material is unnecessary to our decision.
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