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Page 2 of 2 agreements to taxing agencies. Many such agreements required former redevelopment agencies to pay a specified percentage of tax increment to taxing agencies. Section 34171(d)(1)(D) specifically refers to such pass through payments, and excludes payments made by county auditor-controllers under Section 34183 from the purview of Section 34171(d)(1)(D), presumably to avoid double payments to taxing entities. This indicates that the California legislature intended judgments and settlements, like the Judgment Settlement Agreements, that are similar in structure to pass through agreements, to be considered enforceable obligations and included on the ROPS. Further, Section 34175(a) makes clear that the legislature intended to honor all pledges made by the Former Agency; that section specifically protects the "stream of revenues available to meet the requirements" of such protected pledges. The structure of the Settlement Agreements-pledging a percentage of tax increment to a specific person, entity or purpose, was typical of many redevelopment transactions, and there is no indication in the Dissolution Act that the legislature intended to invalidate these types of agreements (nor could they, without violating the constitutional prohibition against impairing contracts 3). In the May 24 letter, the DOF also challenges the Successor Agency's obligation to enter into agreements for. improvements as required by the Settlement Agreements, stating "ABx 1 26 does not allow successor agencies to enter into new contracts; any unencumbered balances should be remitted to the County Auditor Controller." The DOF cites language in Section 34176 that excludes low and moderate income housing funds from the housing assets to be transferred to the successor housing agency. This section does not purport to invalidate enforceable obligations or prevent payment of enforceable obligations using housing funds. In fact, Section 34177(1) expressly lists the Low and Moderate Income Housing Funds as one source of payment for enforceable obligations listed on the ROPS. Thus, the DOF's apparent position that otherwise legal and binding obligations payable using housing funds are not enforceable obligations is contrary to the intent of the legislature. To the extent DOF's determination that the Settlement Agreements are not enforceable obligations rests on an interpretation of the Dissolution Act to prohibit successor agencies from entering into new agreements for any purpose, even if required to do so by an enforceable obligation, AB 1484 clarified the legislature's intent to permit successor agencies to enter into such "new" obligations in Section 34177.3(a), which states: "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."a In response to the DOF's position that the Settlement Agreements are not enforceable obligations, a lawsuit has been filed in the Superior Court of the State of California, County of Sacramento (Gerald Peebler, et al, v. State of California Department of Finance et al, Case No. 34- 2012-80001172). See Article I, Section 10, Clause 1 of the United States Constitution ("No State shall ... pass any ... Law impairing the Obligation of Contracts ...") and Article 1, Section 9 of the California Constitution ("A ... law Impairing the obligation of contracts may not be passed.") Emphasis added. SA Resolution No. 2012-007 Page 14 of 24