3 - RECOGNIZED OBLIGATION PAYMENT SCHEDULE

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auditor-controller pursuant to Section 341 83. As noted above, the Judgment Settlement Agreements are binding and enforceable judgments isSUcd by California courts in favor of third party private entities, not affected taxing entities- The Judgment SCUlement Agreements are not paSSthrOUgh agreements. As with the Contractual Settlement Agreements. tile _11-Idgincrit Settlement Agreements were issued and became binding and enforceable long before the effective date 01-the Dissolution Act. In addition to the plain language of Section 341 71 , subdivisions (d)( I )(D) and (d)( I )(E), the DOF's statement that payments of tax increment are not permitted by A131 x 26 is patently false. Section 34183 specifically requires county auditor-controllers to make payments under pass through agreements to taxing agencies. Many such agreements required 161-Iller redevelopment agencies to pay a specified percentage of-tax increment to taxing agencies. Section 34171 (d)( I)(D) specifically refers to such pass through payments, and excludes payments made by county auditor-controllers under Section 341 83 Crone the purview of Section 341 71 (d)( 1 )(D), presumably to avoid double payments to taxing entities. This indicates that the California Iegislaturc 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 ora the ROPS_ Further, Section 341 75(a) makes clear that the legislature intended to honor all pledges made by the Dormer Agency; that section specifically protects the "stream of revenues available to elect the requirements" ofsUCh protected pledges_ The structure ofthe Settlement Agreements pledging.; a percentage (-W 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 contracts4). 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, staling "ABx 1 26 does not allow successor agencies to enter into new contracts; any unencUrnbered balances should be remitted to the County Auditor Controller." The DOF cites language in Section 34176 that excludes low and moderate income housing lands 11-0111 the housing assets to be transferred to the successor housing agency- This section does not purport to invalidate enforceable obli<ations or prevent payment ofenforceable obligations using housing funds. In Fact, Section 341 77(I) expressly lists the Low and Moderate Income I IOlaSin" Funds as one source of payment Ibr enforceable obligations listed on the BOPS. 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 Ofthe legislature To the extent DOI-s determination that the Settlement Agreements are not enforceable obligations rests on an interpretation oflhe Dissolution Act to prohibit successor agencies Front entering into new agreements for any purpose, even if required to do so by an enforceable obligation- Ala 1484 clarified the legislature's intent to permit successor agencies to enter into ' Identical language is tOllnd in subparagraph (4) ofSection 34167(d), which defines "enforceable obligation" for purposes of Part 18 of the Dissolution Act- 4 4ee Article 1, Section 10, Clause I of the United States Constitution ("No State shall _ pass any Law impairing the Obligation of Contracts and Article 1, Section 9 ofthe C'alilornia Constitution ("A law impairing the obligation ofcontracts may not be passed.") 3-27