Court Opinion

ID: 4095284
Source: CourtListenerOpinion
Date Created: 2016-11-03 17:02:52.617562+00
Date Added: 2024-06-11T07:45:30.317780
License: Public Domain

Filed 11/3/16
                               CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                THIRD APPELLATE DISTRICT
                                             (Sacramento)
                                                 ----

CITY OF SAN JOSE, as Successor Agency, etc.,                        C074539

                  Plaintiff and Appellant,                   (Super. Ct. No. 34-2012-
                                                            80001190-CU-WM-GDS)
        v.

VINOD K. SHARMA, as Director, etc., et al.,

                  Defendants and Appellants.

     APPEAL from a judgment of the Superior Court of Sacramento County, Allen
Sumner, Judge. Affirmed with directions.

      Richard Doyle, City Attorney, Nora Frimann, Assistant City Attorney, Ardell
Johnson and Margo Laskowska, Deputy City Attorneys for Plaintiff and Appellant.

       Kamala D. Harris, Attorney General, Douglas J. Woods, Assistant Attorney
General, Constance L. LeLouis and Aaron Jones, Deputy Attorneys General for
California Department of Finance as Amicus Curiae on behalf of Plaintiff and Appellant.

       Remcho, Johansen & Purcell, Robin B. Johansen, Karen Getman, Harry Berezin;
Orry P. Korb, County Counsel, and Steve Mitra, Assistant County Counsel for
Defendants and Appellants.

                                                  1
       This dispute is over who is entitled to real property tax increment revenue after the
statutory dissolution of the San Jose Redevelopment Agency. The trial court held that tax
increment revenue from a real property tax imposed to raise funds for the pension
obligations of Santa Clara County is properly distributed to the Redevelopment Property
Tax Trust Fund to pay the debts of the former redevelopment agency. Santa Clara
County, with its Director of Finance Vinod K. Sharma, contends on appeal that this
holding was erroneous. The trial court also held that statutes dissolving the former
redevelopment agency require that certain tax increment revenue be passed through from
the Redevelopment Property Tax Trust Fund to Santa Clara County instead of being used
to meet the enforceable obligations of the former redevelopment agency. The City of San
Jose, as the successor of the redevelopment agency, contends on appeal that this holding
was erroneous. Thus, both parties appeal.
       We conclude that the trial court did not err.
                                     BACKGROUND
       Some history of real property taxation, public finances, and redevelopment in
California and Santa Clara County will provide the framework for our discussion of the
issues presented in this case.
       In 1944, Santa Clara County voters approved Measure 13. The new law
authorized Santa Clara County (the County) to participate in what eventually became the
California Public Employees Retirement System. To finance this participation, the new
law imposed “a special tax sufficient to raise the amount required to provide sufficient
revenue,” which tax we refer to in this opinion as the retirement levy. This retirement
levy is an ad valorem tax on real property in the County, or, in other words, a tax
calculated as a percentage of the real property’s assessed value. While that percentage
has varied over the years, in recent years it has been .0338 percent, which means that, for
every $1,000 in assessed value, the retirement levy imposes a tax of 33.8 cents on real
property in the County.

                                              2
       In 1945, the California Legislature authorized local governments to create
redevelopment agencies to revitalize blighted communities. These agencies had authority
to acquire real property through purchase and eminent domain, dispose of property, build
infrastructure, and improve public facilities in the agency’s project area. But funding for
the agencies was scarce because they had no power to levy taxes. (California
Redevelopment Assn. v. Matosantos (2011) 53 Cal. 4th 231, 245-246 (Matosantos).)
       In 1952, California voters adopted Proposition 181 to fund redevelopment
agencies. This initiative created what eventually became article XVI, section 16 of the
California Constitution. The effect of this provision is to give to the redevelopment
agency the ad valorem tax receipts resulting from the increase of real property value in
the redevelopment area. This “tax increment financing,” along with the effect of
Proposition 132 adopted by the voters in 1978, was described by the California Supreme
Court in Matosantos:
       “Under [the tax increment financing] method, those public entities entitled to
receive property tax revenue in a redevelopment project area (the cities, counties, special
districts, and school districts containing territory in the area) are allocated a portion based
on the assessed value of the property prior to the effective date of the redevelopment
plan. Any tax revenue in excess of that amount—the tax increment created by the
increased value of project area property—goes to the redevelopment agency for
repayment of debt incurred to finance the project. (Cal. Const., art. XVI, § 16, subds. (a),
(b); [Health & Saf. Code,] § 33670, subds. (a), (b); [citation].) In essence, property tax
revenues for entities other than the redevelopment agency are frozen, while revenue from

1     California Constitution, article XIII, former section 19, added by initiative,
General Election (Nov. 4, 1952) (Proposition 18).
2     California Constitution, article XIII A, section 1, added by Proposition 13, as
approved by voters, Primary Election (June 6, 1978) (Proposition 13).

                                               3
any increase in value is awarded to the redevelopment agency on the theory that the
increase is the result of redevelopment. [Citation.]
       “The property tax increment revenue received by a redevelopment agency must be
held in a special fund for repayment of indebtedness ([Health & Saf. Code,] § 33670,
subd. (b)), but the law does not restrict the amount of tax increment received in a given
year to that needed for loan repayments in that year. [Citation.] The only limit on the
annual increment payment received is that it may not exceed the agency’s total debt, less
its revenue on hand. ([Health & Saf. Code,] § 33675, subd. (g).) Once the entire debt
incurred for a project has been repaid, all property tax revenue in the project area is
allocated to local taxing agencies according to the ordinary formula. ([Health & Saf.
Code,] § 33670, subd. (b).)
       “A powerful and flexible tool for community economic development, tax
increment financing nonetheless ‘has sometimes been misused to subsidize a city’s
economic development through the diversion of property tax revenues from other taxing
entities . . . .’ [Citations.] This practice became more common in the era of constricted
local tax revenue that followed the passage of Proposition 13. Some small cities with
blighted areas available for industrial redevelopment ‘were able to shield virtually all of
their property tax revenue from other government agencies,’ but ‘[e]ven in ordinary cities
. . . the temptation to use redevelopment as a financial weapon was considerable.
Because it limited increases in property tax rates, Proposition 13 created a kind of shell
game among local government agencies for property tax funds. The only way to obtain
more funds was to take them from another agency. Redevelopment proved to be one of
the most powerful mechanisms for gaining an advantage in the shell game.’ [Citation.]
. . . [Citation.]
       “Addressing these concerns, the Legislature has required redevelopment agencies
to make certain transfers of their tax increment revenue for other local needs. First, 20
percent of the revenue generally must be deposited in a fund for provision of low- and

                                              4
moderate-income housing. ([Health & Saf. Code,] §§ 33334.2, 33334.3, 33334.6;
[citation].) Second, redevelopment agencies must make a graduated series of pass-
through payments to local government taxing agencies such as cities, counties, and
school districts from tax increment on projects adopted or expanded after 1994. ([Health
& Saf. Code,] § 33607.5, subd. (a)(2); [citation].) The payments are distributed
according to the taxing agencies’ ordinary shares of property taxes. [Citation.]”
(Matosantos, supra, 53 Cal.4th at pp. 246-248, italics omitted.)
       In 1956, the City of San Jose established the San Jose Redevelopment Agency,
which began receiving tax increment revenue. The agency used its future entitlement to
tax increment as security for debt incurred for redevelopment projects. Since 1956, all
tax increment revenue associated with the retirement levy in the agency’s project area has
been distributed to the redevelopment agency.
       The continued imposition of the retirement levy, which is an ad valorem real
property tax over and above Proposition 13’s one percent limitation, is legal because it
was imposed to pay for “[i]ndebtedness” incurred before July 1, 1978, which is an
exception to Proposition 13’s one percent limitation. (Cal. Const., art. XIII A, § 1, subd.
(b)(1).)
       In 1986, California voters approved Proposition 62,3 which added sections 53722
and 53723, among others, to the Government Code. Government Code section 53722
prevented local governments from imposing a special tax without the approval of a two-
thirds majority of the local voters. Similarly, Government Code section 53723 prevented
local governments from imposing a general tax without the approval of a simple majority

3      Added by initiative measure, approved by the electorate, General Election (Nov. 4,
1986) (Proposition 62).

                                             5
of the local voters. In 1996, California voters approved Proposition 218,4 adding article
XIII C to the California Constitution, which placed in the Constitution what the voters
had done concerning special and general taxes with Proposition 62 in 1986. (Cal. Const.,
art. XIII C, § 2, subds. (b) & (d).)
       Finally, in 2011, the California Legislature dissolved redevelopment agencies and
provided for successor agencies to wind down the affairs of the redevelopment agencies.
This dissolution law is well described elsewhere. (See Matosantos, supra, 53 Cal.4th at
pp. 250-252.) In this case, the City of San Jose is the successor agency of the San Jose
Redevelopment Agency. We refer to the City of San Jose as the successor agency in the
remainder of this opinion.
       In the process of winding down the affairs of the San Jose Redevelopment
Agency, the successor agency and County disagreed on two issues, framed by the trial
court as follows: (1) “Is the City, successor agency to the San Jose Redevelopment
Agency, entitled to receive the tax increment portion of the property tax levied in 1944 to
fund the County’s retirement obligations [(the retirement levy)]?” And (2) “Is revenue
that would be allocated to the County pursuant to a ‘passthrough agreement’ between the
County and former redevelopment agency subject to payment of any debt of the
redevelopment agency, or only as needed to pay the agency’s bond debt?” (Original bold
text and italics.) The trial court responded that (1) the successor agency is entitled to the
tax increment portion of the retirement levy to put toward the winding down of the
former redevelopment agency, and (2) tax increment revenue not needed to pay bond
debt of the former redevelopment agency is subject to the passthrough agreement,
meaning that, instead of being used to pay nonbond debt of the former redevelopment

4     California Constitution, article XIII C, section 1, added by Proposition 218,
adopted by voters, General Election (Nov. 6, 1996) (Proposition 218).

                                              6
agency, the tax increment revenue not needed to pay bond debt is to be passed through to
the County.
       Instead of distributing tax increment revenue associated with the retirement levy,
the County retained those disputed funds and impounded them pending resolution of this
litigation.
       The County and the successor agency each filed a notice of appeal from the trial
court’s judgment on the successor agency’s petition for writ of mandate and the County’s
cross-petition for writ of mandate. The County contends the trial court erred on the first
issue, concerning the tax increment revenue on the retirement levy, and the successor
agency contends the trial court erred on the second issue, concerning what tax increment
revenues were to pass through to the County.5
                                STANDARD OF REVIEW
       The parties agree that the facts are undisputed, and that we must independently
apply statutory and constitutional law to determine whether the trial court was correct.
(Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal. 4th 1185, 1191.)
       “The rules governing statutory construction are well settled. We begin with the
fundamental premise that the objective of statutory interpretation is to ascertain and
effectuate legislative intent. [Citations.] ‘In determining intent, we look first to the
language of the statute, giving effect to its “plain meaning.” ’ [Citations.] Although we
may properly rely on extrinsic aids, we should first turn to the words of the statute to
determine the intent of the Legislature. [Citation.] Where the words of the statute are

5      The California Department of Finance filed an amicus brief supporting the
argument of the successor agency (and the finding of the trial court) that the tax
increment revenue from the retirement levy is properly allocated to pay the enforceable
obligations of the former redevelopment agency. The Department of Finance, however,
takes no position on the trial court’s resolution of the other issue involving the
passthrough agreement.

                                              7
clear, we may not add to or alter them to accomplish a purpose that does not appear on
the face of the statute or from its legislative history. [Citation.]” (Burden v. Snowden
(1992) 2 Cal. 4th 556, 562.)
       The same rules apply generally to our interpretation of the California Constitution.
We endeavor to ascertain and effectuate the voters’ intent. (Bighorn-Desert View Water
Agency v. Verjil (2006) 39 Cal. 4th 205, 212.)
                                       DISCUSSION
                                              I
                                      Retirement Levy
       The County contends the trial court erred by finding that the tax increment
revenue associated with the retirement levy in the redevelopment project area must be
allocated to the successor agency. The County argues that, because the retirement levy is
a special tax, it can be used only for the purpose for which it was enacted—that is, to
meet the County’s retirement obligations with the California Public Employees’
Retirement System (CalPERS). We disagree. The tax increment revenue associated with
the retirement levy is properly distributed to the successor agency under section 16 of
article XVI of the California Constitution (section 16).
       A.     Application of Section 16
       Section 16 provides in relevant part that the “portion of the levied taxes,” referring
to the tax increment, “shall be allocated to and when collected shall be paid into a special
fund of the redevelopment agency to pay the principal of and interest on loans, moneys
advanced to, or indebtedness (whether funded, refunded, assumed or otherwise) incurred
by the redevelopment agency to finance or refinance, in whole or in part, the
redevelopment project.” (§ 16, subd. (b).) Crucially, “the word ‘taxes’ as used herein
includes, but is not limited to, all levies on an ad valorem basis upon land or real
property.” (§ 16.) The Legislature implemented section 16 without attempting to

                                              8
redefine the word taxes, thus incorporating the constitutional definition. (Health & Saf.
Code, § 33670.)
       The retirement levy is an ad valorem tax because it is based on the assessed value
of the real property. Therefore, section 16, by its terms, applies to tax revenues collected
under the retirement levy. And because section 16 applies to tax revenues collected
under the retirement levy, the tax increment revenue “shall be allocated to” the
redevelopment agency or, as here, its successor, for payment of debts. So the application
of section 16 to this case is straightforward and supports the trial court’s conclusion that
tax increment revenue from the retirement levy is to be allocated to pay the former
redevelopment agency’s debts.
       B.     County’s Arguments
       Despite this straightforward application, the County’s arguments on appeal consist
of urging us to construe this unambiguous constitutional provision differently. Mainly,
the County argues that: (1) the retirement levy is a special tax that can be used only to
help satisfy the County’s retirement obligations, (2) payment of the tax increment portion
of the retirement levy to the redevelopment agency or its successor constitutes a
prohibited gift of public funds, and (3) diverting retirement levy funds violates the vested
rights of county employees. None of these arguments has merit.
              1.      Special Tax
       Under Proposition 218, approved in 1996, “ ‘[s]pecial tax’ means any tax imposed
for specific purposes . . . .” (Cal. Const., art. XIII C, § 1, subd. (d).) The retirement levy
is therefore a special tax, as that term is currently defined.
       As chronicled above, California voters approved Proposition 62 in 1986, which
added Government Code section 53724, subdivision (e), among other provisions. That
subdivision provides: “The revenues from any special tax shall be used only for the
purpose or service for which it was imposed, and for no other purpose whatsoever.”
(Gov. Code, § 53724, subd. (e).)

                                               9
       This provision of the Government Code would appear to support the County’s
argument that the retirement levy, as a special tax, may be used only for meeting the
County’s retirement obligations. However, this provision, though adopted by the voters,
is a statute, and statutes cannot amend the Constitution. (Smith v. Fair Employment &
Hous. Com. (1996) 12 Cal. 4th 1143, 1187, fn. 4.) Section 16, which applies to all ad
valorem taxes on real property, without regard to whether the tax is a general or special
tax, prevails over Government Code section 53724, subdivision (a).
       Also as chronicled above, Proposition 218 placed in the Constitution Proposition
62 with respect to votes necessary to imposing taxes, but it did not include the provision
limiting the purpose for which revenues from a special tax may be used. In other words,
Government Code section 53724, subdivision (e) did not become a constitutional
provision. The fact that Proposition 218 distinguished between new general and special
taxes in mandating their manner of approval does not logically lead to the conclusion that
a special tax such as the retirement levy, passed many years earlier, cannot also be used
to pay the obligations of a redevelopment agency.
       To the extent section 16 provided the mechanism for using tax increment revenue
to pay the obligations of a redevelopment agency, the tax increment revenue, even of
what originated as a special tax such as for the purpose of meeting a local government’s
retirement obligations, is converted by law to a tax, whether special or general is beside
the point, to pay the debts of the redevelopment agency. From that standpoint, there is no
problem of whether the funds are being used for the designated purpose because the
designated purpose of the tax increment revenue is to pay the debts of the redevelopment
agency.
       The County also asks us to look to the ballot arguments in favor of Proposition 18,
which is the 1952 initiative that eventually became section 16, to determine whether the
tax increment provisions were meant to apply to special taxes. But we need not do so
because the language of the constitutional provision is not ambiguous. It applies to “all

                                            10
levies on an ad valorem basis upon land or real property.” (§ 16.) This includes the
retirement levy.
       Finally, the County claims that the dissolution law somehow recognized that
special taxes such as the retirement levy are not included in the tax increment revenue
used to pay the debts of the former redevelopment agencies. The County focuses on two
provisions of the dissolution law that require that tax increment revenues necessary to
pay the debts of the former redevelopment agency be directed to pay those debts but that
tax increment revenues not needed to meet the enforceable obligations of the former
redevelopment agency be redirected to the usual recipients of property tax revenues.
(Health & Saf. Code, §§ 34172, subd. (d); 34182, subd. (c).)6 The language of those
provisions refers to real property taxes collected under Proposition 13’s one percent
limitation on real property taxes (Cal. Const., art. XIII A, § 1, subd. (a)), not under the
exception to the one percent limitation into which the retirement levy falls for

6      Health and Safety Code section 34172, subdivision (d) provides:

       “Revenues equivalent to those that would have been allocated pursuant to
subdivision (b) of Section 16 of Article XVI of the California Constitution shall be
allocated to the Redevelopment Property Tax Trust Fund of each successor agency for
making payments on the principal of and interest on loans, and moneys advanced to or
indebtedness incurred by the dissolved redevelopment agencies. Amounts in excess of
those necessary to pay obligations of the former redevelopment agency shall be deemed
to be property tax revenues within the meaning of subdivision (a) of Section 1 of Article
XIII A of the California Constitution.”

       Health and Safety Code section 34182, subdivision (c)(1) provides, in part:

        “The county auditor-controller shall determine the amount of property taxes that
would have been allocated to each redevelopment agency in the county had the
redevelopment agency not been dissolved pursuant to the operation of the act adding this
part. These amounts are deemed property tax revenues within the meaning of subdivision
(a) of Section 1 of Article XIII A of the California Constitution and are available for
allocation and distribution in accordance with the provisions of the act adding this part.”

                                              11
indebtedness approved by voters before Proposition 13 was passed (Cal. Const., art. XIII
A, § 1, subd. (b)(1)). According to the County, this reference to the one percent
limitation showed the Legislature’s recognition that the tax increment revenue from
special taxes, such as the retirement levy, cannot be used to meet the enforceable
obligations of the former redevelopment agencies because the retirement levy is an
exception to the one percent limitation of Proposition 13.
       We disagree with the County that the Legislature’s reference to tax increment
revenue associated with the one percent limitation of Proposition 13 provides any
evidence that the Legislature recognized a difference between general and special taxes in
allocating money to pay the debts of the former redevelopment agencies. As discussed
above, section 16, which provides funding for redevelopment agencies, applies to “all
levies on an ad valorem basis upon land or real property,” including to tax revenues
collected under the retirement levy, with no distinction between general and special taxes.
Furthermore, the provisions of the dissolution law cited by the County do not purport to
change what tax increment revenue is available to pay the debts of a former
redevelopment agency.
       In summary, nothing in the law concerning special taxes prohibits distribution of
the tax increment portion of the retirement levy to the successor agency to pay the former
redevelopment agency’s debts.
              2.     Gift of Public Funds
       The County’s argument that use of tax increment revenue associated with the
retirement levy constitutes an unconstitutional gift of public funds fails because those
funds never belonged to the County. The tax increment portion of the retirement levy
was collected within the former redevelopment agency’s project area, by law, for the
purpose of paying the obligations of the redevelopment agency.

                                             12
       “The Legislature shall have no power to . . . make any gift or authorize the making
of any gift, of any public money or thing of value to any individual, municipal or other
corporation whatever . . . .” (Cal. Const., art. XVI, § 6.)
       Interpreting this constitutional provision, the California Supreme Court has held:
“[A] contribution from one public agency to another for a purely local purpose of the
donee agency is in violation of the constitutional prohibition, but . . . such a contribution
is legal if it serves the public purpose of the donor agency even though it is beneficial to
local purposes of the donee agency.” (Santa Barbara etc. Agency v. All Persons (1957)
47 Cal. 2d 699, 707, revd. on other grounds, Ivanhoe Irrigation Dist. v. McCracken
(1958) 357 U.S. 275 [2 L. Ed. 2d 1313], mod., Santa Barbara County Water Agency v. All
Persons & Parties (1960) 53 Cal. 2d 743.)
       The County asserts that distributing the tax increment portion of the retirement
levy to the successor agency to pay debts of the former redevelopment agency is a gift of
public funds from the County to the successor agency. To the contrary, the tax increment
portion of the retirement levy has, since 1956, been a tax on real property within the
former redevelopment agency’s project area to finance redevelopment in that area. The
tax increment portion of the retirement levy never belonged to the County.
       The cases cited by the County do not support the County’s position.
       For example, in City of Oakland v. Garrison (1924) 194 Cal. 298, the California
Supreme Court held that use of Alameda County funds to improve a road in the City of
Oakland did not constitute a prohibited gift of public funds because the funds were to be
devoted to a public purpose and improvement of the street within the city is of general
interest to the county. (Id. at pp. 303-305.) Here, the situation is similar in that
redevelopment in the City is a public purpose and is of general interest to the County.
Thus, there is no prohibited gift of funds, even if we assume that the tax increment
portion of the retirement levy ever belonged to the County.

                                              13
       In Golden Gate Bridge etc. Dist. v. Luehring (1970) 4 Cal. App. 3d 204, the Golden
Gate Bridge and Highway District had surplus funds that the district’s directors desired to
transfer to the counties in the district, but the district’s general manager and auditor
opposed the transfer. (Id. at p. 206.) The Court of Appeal concluded that distribution of
the surplus funds to the counties would be a prohibited gift of public funds because there
was no showing the transfer of the funds “would promote the interests of the district in
any substantial way.” (Id. at p. 211.) Here, we need not determine whether the successor
agency’s use of the tax increment portion of the retirement levy would promote the
interests of the County because, by law, that portion of the retirement levy was collected
to pay the obligations of the former redevelopment agency. Again, it never belonged to
the County, and it was not collected to meet the County’s retirement obligations.
       Finally, the County argues that our interpretation “assume[s] that [section 16]
impliedly repealed the constitutional and common law principles [referring to restrictions
on special taxes and gifts of public funds].” To the contrary, we conclude that our
interpretation is not in conflict with those restrictions; therefore, there is no repeal-by-
implication argument to be considered.
               3.     County Employees’ Vested Rights
       The County argues that “diversion of retirement levy funds violates the vested
rights of County employees.” (Unnecessary capitalization omitted.) This argument
suffers from the same flaw as the other arguments—the tax increment portion of the
retirement levy was never designated to meet the County’s retirement obligations. By
law, the tax increment portion has always been designated to meet the obligations of the
former redevelopment agency. Since it has always been designated to meet the
obligations of the former redevelopment agency, County employees are not entitled to
those funds.
       In any event, use of the tax increment portion of the retirement levy to pay the
obligations of the former redevelopment agency does not impair any vested rights of

                                              14
County employees because the County has failed to show any actual impairment of any
vested right. “A public employee’s pension constitutes an element of compensation, and
a vested contractual right to pension benefits accrues upon acceptance of employment.
Such a pension right may not be destroyed, once vested, without impairing a contractual
obligation of the employing public entity. [Citation.]” (Betts v. Board of Administration
of Public Employees’ Retirement System (1978) 21 Cal. 3d 859, 863.) To support a claim
that a public employee’s pension rights have been impaired, the proponent of that claim
must present “a factual record disclosing . . . present, specific and substantial impairment
of [the] contract . . . .” (Amador Valley Joint Union High Sch. Dist. v. State Bd. of
Equalization (1978) 22 Cal. 3d 208, 241 (Amador Valley).)
       The County asserts: “Provisions that confer a pension benefit and establish a
means to pay for that benefit create vested, contractual rights not only to continuation of
benefits, but also to continuation of the funding.” To support this broad statement, the
County cites cases in which the government canceled or reduced the actual payment for
the pension benefit. (See Valdes v. Cory (1983) 139 Cal. App. 3d 773, 787 [funding to
CalPERS canceled or reduced]; Cal. Teachers Assn. v. Cory (1984) 155 Cal. App. 3d 494,
508-512 [funds not appropriated for Teachers’ Retirement Fund]; Teachers’ Retirement
Bd. v. Genest (2007) 154 Cal. App. 4th 1012, 1034-1039 [funding for vested benefit
reduced].) These cases are inapposite because distribution of the tax increment portion of
the retirement levy does not prevent the County from paying the required amount to
CalPERS for the County employees’ benefits. The County does not claim that it has
failed to make the required payments to CalPERS because of the distribution of the tax
increment portion of the retirement levy to the former redevelopment agency. Therefore,
there is no actual impairment of the rights of County employees to their pension benefits,
even though the tax increment portion of the retirement levy has been distributed to the
former redevelopment agency since 1956. (Amador Valley, supra, 22 Cal.3d at p. 241.)

                                             15
       The County argues, however, that its ability to fund the pension benefits without
the entirety of the retirement levy does not mean that the County employees’ vested
rights to their pension benefit have not been violated. In support of this proposition, the
County cites Patton v. City of Alameda (1985) 40 Cal. 3d 41, 43 (Patton). But that case is
unhelpful to the County on this issue. In Patton, the California Supreme Court was asked
to construe part of an exemption to the one percent ad valorem tax found in Proposition
13, which exemption allowed the county to impose an ad valorem tax in addition to the
one percent tax. That exemption applied, by the terms of the initiative, if the tax was
imposed to pay “[i]ndebtedness” incurred before Proposition 13 was approved. (Cal.
Const., art. XIII A, § 1, subd. (b)(1).) The Patton court held the “indebtedness”
exemption applied to indebtedness incurred before Proposition 13 for library services.
(Patton, supra, at pp. 43-48.)
       In this context, relating to whether the library services tax was exempt from the
one percent limitation of Proposition 13, the Patton court held:
       “[T]he issue is not whether the city can comply with [the provision mandating
support of library services] without imposing the override tax [in addition to the one
percent tax], but whether it must do so. In [Patton], the money for funding the pensions
might also have come from the 1 percent ad valorem tax levied under subdivision (a) [of
Proposition 13]. Yet the fact that the voters had obligated themselves to establish a
pension system and to tax themselves to fund it before article XIII A [of the California
Constitution] became effective was held to allow imposition of a tax in addition to the 1
percent allowed by subdivision (a).” (Patton, supra, 40 Cal.3d at p. 47.)
       Contrary to the County’s suggestion, this quote has nothing to do with the vested
rights of County employees. Instead, it relates only to whether the county could impose
the library services tax over and above Proposition 13’s one percent limitation.

                                             16
       The County has failed to establish that the distribution of the tax increment portion
of the retirement levy to pay the obligations of the former redevelopment agency since
1956 has violated the vested rights of County employees.
                                              II
                                   Priority of Distribution
       The second issue is similarly a question of determining what the text of the law (in
this instance, a statute) provides on its face and interpreting the law consistently with that
text because the language is unambiguous. This issue relates to how much of the tax
increment revenue must be passed through to the County rather than used to meet the
enforceable obligations of the former redevelopment agency. We conclude that the trial
court properly interpreted the relevant statute, Health and Safety Code section 34183, to
require the passthrough to the County.
       A.     Interpretation of Health and Safety Code Provisions
       Under the dissolution law, which includes Health and Safety Code section 34183,
the Legislature provided that tax increment funds would be paid into a trust fund called
the Redevelopment Property Tax Trust Fund (the trust fund). From the trust fund, the
county auditor-controller distributes the funds “for the benefit of the holders of former
redevelopment agency enforceable obligations and the taxing entities that receive
passthrough payments and distributions of property taxes . . . .” (Health & Saf. Code,
§ 34182, subd. (c).)
       Subdivision (a) of Health and Safety Code section 34183 provides the priority for
distribution of tax increment revenue from the trust fund. This priority of distribution is
called the “waterfall.” Subdivision (b) of the same statute provides for what to do if the
trust fund is not large enough to make all the distributions provided for in subdivision (a).
This priority of reallocating the distribution because the trust fund is not large enough is
called the “reverse waterfall.”

                                              17
       Subdivision (a) of Health and Safety Code section 34183 provides for the
following priority of trust fund allocations (the waterfall):7

7      Subdivision (a) of Health and Safety Code section 34183 provided:

       “(a) Notwithstanding any other law, from February 1, 2012, to July 1, 2012, and
for each fiscal year thereafter, the county auditor-controller shall, after deducting
administrative costs allowed under Section 34182 and Section 95.3 of the Revenue and
Taxation Code, allocate moneys in each Redevelopment Property Tax Trust Fund as
follows:

        “(1) Subject to any prior deductions required by subdivision (b), first, the county
auditor-controller shall remit from the Redevelopment Property Tax Trust Fund to each
local agency and school entity an amount of property tax revenues in an amount equal to
that which would have been received under Section 33401, 33492.140, 33607, 33607.5,
33607.7, or 33676, as those sections read on January 1, 2011, or pursuant to any
passthrough agreement between a redevelopment agency and a taxing entity that was
entered into prior to January 1, 1994, that would be in force during that fiscal year, had
the redevelopment agency existed at that time. The amount of the payments made
pursuant to this paragraph shall be calculated solely on the basis of passthrough payment
obligations, existing prior to the effective date of this part and continuing as obligations
of successor entities, shall occur no later than May 16, 2012, and no later than June 1,
2012, and each January 2 and June 1 thereafter. Notwithstanding subdivision (e) of
Section 33670, that portion of the taxes in excess of the amount identified in subdivision
(a) of Section 33670, which are attributable to a tax rate levied by a taxing entity for the
purpose of producing revenues in an amount sufficient to make annual repayments of the
principal of, and the interest on, any bonded indebtedness for the acquisition or
improvement of real property shall be allocated to, and when collected shall be paid into,
the fund of that taxing entity. The amount of passthrough payments computed pursuant to
this section, including any passthrough agreements, shall be computed as though the
requirement to set aside funds for the Low and Moderate Income Housing Fund was still
in effect.

       “(2) Second, on June 1, 2012, and each January 2 and June 1 thereafter, to each
successor agency for payments listed in its Recognized Obligation Payment Schedule for
the six-month fiscal period beginning January 1, 2012, and July 1, 2012, and each
January 2 and June 1 thereafter, in the following order of priority:

              “(A) Debt service payments scheduled to be made for tax allocation bonds.

                                              18
       1. Administrative costs incurred by the auditor-controller in administering the
dissolution law.
       2. Statutory and contractual passthroughs. The passthrough at issue in this case is
the result of an agreement between the former redevelopment agency and the County.
       3. Payments listed in the Recognized Obligation Payment Schedule (ROPS)
prepared by the successor agency. The ROPS, generally speaking, is a list of the former
redevelopment agency’s enforceable obligations. (City of Emeryville v. Cohen (2015)
233 Cal. App. 4th 293, 299.)
       4. Administrative costs of the successor agency.
       5. Distributions to local agencies and school entities (other than distributions
made under passthrough agreements) that ordinarily receive property tax revenues. This
distribution applies simply to the remainder after the first four priorities are satisfied.

              “(B) Payments scheduled to be made on revenue bonds, but only to the
extent the revenues pledged for them are insufficient to make the payments and only if
the agency's tax increment revenues were also pledged for the repayment of the bonds.

             “(C) Payments scheduled for other debts and obligations listed in the
Recognized Obligation Payment Schedule that are required to be paid from former tax
increment revenue.

       “(3) Third, on June 1, 2012, and each January 2 and June 1 thereafter, to each
successor agency for the administrative cost allowance, as defined in Section 34171, for
administrative costs set forth in an approved administrative budget for those payments
required to be paid from former tax increment revenues.

       “(4) Fourth, on June 1, 2012, and each January 2 and June 1 thereafter, any
moneys remaining in the Redevelopment Property Tax Trust Fund after the payments and
transfers authorized by paragraphs (1) to (3), inclusive, shall be distributed to local
agencies and school entities in accordance with Section 34188.”

       (Unless otherwise noted, this and other quotations of Health and Safety Code
section 34183 reflect the language of the statute as amended in 2012. (Stats. 2012, ch.
26, § 25.) The 2012 amendments did not affect the parts of the statute at issue in this
case.)

                                              19
Therefore, if there is no remainder, there is nothing to distribute. (Health & Saf. Code,
§ 34183, subd. (a).)
       Thus, the waterfall provides that the payment to the County under the contractual
passthrough agreement has priority over the payments to meet the former redevelopment
agency’s enforceable obligations listed in the ROPS. But the waterfall assumes that there
are sufficient funds to cover the allocations. Here, the parties agree that the tax increment
revenue in the trust fund is not sufficient to make all the payments listed in the waterfall.
That condition—the trust fund’s inability to make all the waterfall payments—brings into
play the reverse waterfall, provided for in Health and Safety Code section 34183,
subdivision (b).
       Subdivision (b) of Health and Safety Code section 34183 deducts the amount of
the deficiency from the waterfall in a prescribed order:8

8      Subdivision (b) of Health and Safety Code section 34183 provides:

        “If the successor agency reports, no later than April 1, 2012, and May 1, 2012, and
each December 1 and May 1 thereafter, to the county auditor-controller that the total
amount available to the successor agency from the Redevelopment Property Tax Trust
Fund allocation to that successor agency's Redevelopment Obligation Retirement Fund,
from other funds transferred from each redevelopment agency, and from funds that have
or will become available through asset sales and all redevelopment operations, are
insufficient to fund the payments required by paragraphs (1) to (3), inclusive, of
subdivision (a) in the next six-month fiscal period, the county auditor-controller shall
notify the Controller and the Department of Finance no later than 10 days from the date
of that notification. The county auditor-controller shall verify whether the successor
agency will have sufficient funds from which to service debts according to the
Recognized Obligation Payment Schedule and shall report the findings to the Controller.
If the Controller concurs that there are insufficient funds to pay required debt service, the
amount of the deficiency shall be deducted first from the amount remaining to be
distributed to taxing entities pursuant to paragraph (4), and if that amount is exhausted,
from amounts available for distribution for administrative costs in paragraph (3). If an
agency, pursuant to the provisions of Section 33492.15, 33492.72, 33607.5, 33671.5,
33681.15, or 33688 or as expressly provided in a passthrough agreement entered into
pursuant to Section 33401, made passthrough payment obligations subordinate to debt

                                             20
       1. The part of the tax increment revenue to be distributed to local agencies and
school entities after all other priorities have been satisfied.
       2. Administrative costs of the successor agency.
       3. Statutory and contractual passthrough agreements, but with a condition and a
limitation. To the extent that funds can be deducted from the statutory and contractual
passthrough agreements, they can be applied to the enforceable obligations of the former
redevelopment agency listed in the ROPS. (Health & Saf. Code, § 34183, subd. (b).)
       The condition for deducting a contractual passthrough agreement (the only type of
passthrough relevant here) from the deficiency in the waterfall is that the passthrough
agreement must be, by its own terms, subordinate to the former agency’s payments on
enforceable obligations. “If [a redevelopment] agency, . . . as expressly provided in a
passthrough agreement . . . , made passthrough payment obligations subordinate to debt
service payments required for enforceable obligations, [this provision applies].” (Health
& Saf. Code, § 34183, subd. (b).) Here, the contractual passthrough agreement between
the County and the former redevelopment agency made payment of passthrough funds to
the County subordinate to the former redevelopment agency’s other enforceable
obligations—its “debt service payments.” Thus, the statutory condition for deducting a
trust fund deficiency from payment of passthrough funds is met, and tax increment
revenue that would have passed through to the County may be used to pay the former
redevelopment agency’s enforceable obligations listed in the ROPS.
       That leaves a determination of what limitation is to be placed on the amount
deducted from payment of passthrough funds to pay the former redevelopment agency’s

service payments required for enforceable obligations, funds for servicing bond debt may
be deducted from the amounts for passthrough payments under paragraph (1), as
provided in those sections, but only to the extent that the amounts remaining to be
distributed to taxing entities pursuant to paragraph (4) and the amounts available for
distribution for administrative costs in paragraph (3) have all been exhausted.”

                                               21
enforceable obligations. This is the main dispute between the parties on the passthrough
issue. The successor agency asserts there is no limitation to what can be deducted to
service the former redevelopment agency’s debt, while the County argues that only funds
sufficient to service the former redevelopment agency’s bond debt may be deducted. The
plain language of the statute supports the County’s argument.
       When the condition just discussed is met, “funds for servicing bond debt may be
deducted from the amounts for passthrough payments under [the waterfall] . . . .” (Health
& Saf. Code, § 34183, subd. (b).) The reverse waterfall deduction is limited to “funds for
servicing bond debt.” The Legislature made this clear. As applied here, it means that
only the amount necessary to service the former redevelopment agency’s bond debt may
be deducted from the amount that passes through to the County under the passthrough
agreement.
       B.     Successor Agency’s Arguments
       Despite the clarity of the reverse-waterfall provision of Health and Safety Code
section 34183, subdivision (b) concerning passthrough agreements, the successor agency
argues that we should not apply it as written because (1) the dissolution law favors
payment of the former redevelopment agency’s enforceable obligations to third parties
over passthrough payments to the County, (2) enforcement of the plain language of the
provision impairs the contractual rights of third parties, (3) the plain language conflicts
with the State Controller’s order concerning disbursement of funds, and (4) the
contractual passthrough agreement does not support our interpretation (as well as the trial
court’s interpretation) of the reverse-waterfall provision.
              1.     Legislative Intent
       The successor agency’s first argument, that the plain language of Health and
Safety Code section 34183, subdivision (b) is inconsistent with the overall intent of the
dissolution law, fails because the plain, unambiguous language is what reflects the
Legislature’s intent. As we noted recently in another case involving the fallout from the

                                             22
dissolution of redevelopment agencies, the specific language of a statute must prevail
over a general, overarching policy that a party may perceive in the legislation. “ ‘[N]o
legislation pursues its purposes at all costs. Deciding what competing values will or will
not be sacrificed to the achievement of a particular objective is the very essence of
legislative choice—and it frustrates rather than effectuates legislative intent simplistically
to assume that whatever furthers the statute’s primary objective must be the law. Where,
as here, “the language of a provision . . . is sufficiently clear in its context and not at odds
with the legislative history, . . . ‘[we should not] examine the additional considerations of
“policy” . . . that may have influenced the lawmakers in their formulation of the
statute.’ ” ’ (Rodriguez v. United States (1987) 480 U.S. 522, 525–526 [94 L. Ed. 2d 533,
538]; accord, Foster v. Workers’ Comp. Appeals Bd. (2008) 161 Cal. App. 4th 1505, 1510
[purpose of law cannot supplant legislative intent expressed in particular statute].)”
(County of Sonoma v. Cohen (2015) 235 Cal. App. 4th 42, 48, italics omitted.)
       In any event, the successor agency’s description of the intent of the dissolution law
conveniently ignores other aspects of the law. The successor agency claims that the
Legislature’s intent was to insure that the enforceable obligations of the former
redevelopment agency are met, but it is also true that the intent of the dissolution law is to
redirect tax increment revenues to the local agencies and school entities otherwise
entitled to receive tax revenues. (Stats 2011-2012, 1st Ex. Sess., ch. 5, § 1.) Exactly how
that multifaceted intent is accomplished is the province of the Legislature. And when the
statutory language is plain, we enforce it as written.
               2.     Rights of Unsecured Third Party Creditors
       The successor agency argues that the plain language of Health and Safety Code
section 34183, subdivision (b) “impairs third party creditors from collecting payment for
enforceable obligations.” In connection with this argument, the successor agency denies
that it is trying to assert the rights of those unsecured third parties; instead, it claims that
we must interpret the statute so that it is consistent with the Constitution. This argument

                                               23
is not well taken because (1) the successor agency cannot assert the rights of third parties
and (2) other provisions allow loans to the trust fund to allow it to meet its obligations
listed in the ROPS.
       In another redevelopment case, the California Supreme Court considered a similar
argument. It wrote that it would not consider the impairment of contracts issue because
the successor agency had no standing to assert the impairment of contracts claims.
(Amador Valley, supra, 22 Cal.3d at pp. 239-240.) We also decline to consider the issue
without a proper party involved. In any event, we see no way to interpret the language in
the way that would satisfy the successor agency without doing violence to the statutory
language.
       Also, the Health and Safety Code allows the trust fund to obtain other funding to
meet the obligations of the former redevelopment agency. Health and Safety Code
section 34183, subdivision (c) provided: “The county treasurer may loan any funds from
the county treasury to the Redevelopment Property Tax Trust Fund of the successor
agency for the purpose of paying an item approved on the Recognized Obligation
Payment Schedule . . . .” And Health and Safety Code section 34173, subdivision (h)
provides: “The city, county, or city and county that authorized the creation of a
redevelopment agency may loan or grant funds to a successor agency for administrative
costs [and] enforceable obligations . . . .” (Stats. 2012, ch. 26, § 7.) With these possible
funding sources, the successor agency’s argument that it will not be able to meet its
enforceable obligations rings hollow.
              3.      State Controller’s Interpretation of the Statute
       The successor agency argues that the State Controller agrees with its interpretation
of Health and Safety Code section 34183. That argument is unsupported by the record.
       On June 22, 2012, the State Controller sent a letter to the County disagreeing with
some of the County’s analysis concerning the distribution of tax increment revenue. In
the sentence most applicable to this issue, the State Controller wrote: “Specifically, we

                                              24
do not concur that the planned county pass-through payment cannot be subordinated for
the purposes of servicing the bonded debt appearing on the successor’s Recognized
Obligation Payment Schedule.” The successor agency fails to quote this sentence and,
instead, overgeneralizes, as follows: “The State Controller’s analysis was consistent with
the Legislature’s intent to restrict auditor-controllers from withholding or deducting any
amount from [Health and Safety Code section] 34183[, subdivision] (a)(2) disbursements
for payment of enforceable obligations.” This general statement does not take into
account the State Controller’s limitation of its opinion to “servicing the bonded debt.”
Because (1) the State Controller’s letter does not appear to support the successor
agency’s argument that the County’s passthrough payment must be subordinated to all
enforceable obligations and (2) the successor agency does not quote this part of the letter
and explain how it supports the successor agency’s position, we cannot conclude that the
State Controller agrees with the successor agency’s interpretation of the effect of the
reverse-waterfall provisions.
       The successor agency rattles off several reasons why the County must comply with
the State Controller’s directions. Notably, no authority is proffered for any of these
reasons. Therefore, the argument is forfeited, even if we were to assume for the purpose
of argument that the State Controller’s interpretation of the reverse-waterfall provisions is
consistent with the successor agency’s argument on appeal.
       The successor agency argues: “The County had a mandatory duty to follow the
State Controller’s June 22, 2012 directions. If the County disagreed with the Controller’s
decision, it should have challenged it by brining a mandamus action, not by refusing to
comply with the Controller’s order. Unilaterally withholding money, as the County did
in this case, is not part of any procedure authorized by the dissolution law. The trial court
should not have countermanded the State Controller’s order by allowing the County to
retain funds after the Controller directed the County to make them available to [the
successor agency] for payment of enforceable obligations.” (Fn. omitted.)

                                             25
       This court is not obligated to act as counsel for the successor agency and search
for authority to support its legal contentions. We therefore reject these contentions as
unsupported. (See Regents of University of California v. Sheily (2004) 122 Cal. App. 4th
824, 826-827, fn. 1 [legal contentions unsupported by authority forfeited].)
              4.     Language of Passthrough Agreement
       Finally, the successor agency contends that the contractual passthrough agreement
does not support our interpretation of the reverse-waterfall provision. This contention is
without merit because the passthrough agreement provided that the County would be
entitled to passthrough funds provided by future legislation, such as the provisions of the
dissolution law.
       Even though the passthrough agreement between the County and the former
redevelopment agency stated that the passthrough was to be subordinated to all of the
former redevelopment agency’s enforceable obligations, the agreement also provided: “It
is hereby understood by and between the parties that under no circumstances shall the
amount of money paid to the County by virtue of any provisions of this Agreement be
less than the statutory pass through amount presently provided in Health and Safety Code
section 33607.5 [], or any other statutory amount provided by subsequent legislative
enactments.” (Italics added.)
       The dissolution law, as discussed above, with its waterfall and reverse-waterfall
provisions, resulted in the County’s entitlement to more passthrough funds because the
passthrough is now subordinated only to the former redevelopment agency’s bond debt.
This change in the law redounds to the benefit of the County under the passthrough
agreement’s clause that the revenue distributed to the County would not be less than
provided for by future legislation. Therefore, the passthrough agreement is consistent
with our conclusion that Health and Safety Code section 34183 governs the priority of tax
increment distribution.

                                            26
       Because we conclude that the passthrough agreement between the County and the
former redevelopment agency anticipated and incorporated future changes in the law, we
need not discuss at length the Legislature’s right to modify agreements made between the
state’s subordinate political entities. We note only that those subordinate political entities
are “ ‘creatures’ ” of the state and have no standing to challenge state action on due
process or impairment of contracts grounds. (Star-Kist Foods, Inc. v. County of Los
Angeles (1986) 42 Cal. 3d 1, 6.)
                                             III
                                     Senate Bill No. 107
       After the parties filed their briefs on appeal, the Legislature enacted Senate Bill
No. 107 (2015 Reg. Sess.) (SB 107), amending the dissolution law. The County asserts
that SB 107 applies to this case and requires allocation of the funds held in the impound
account (pending resolution of this litigation) to the County for payment of its retirement
obligations rather than to the trust fund.
       SB 107 provides that revenues raised pursuant to a local pension levy cannot be
paid to the trust fund unless the revenue is pledged as security for the payment of an
indebtedness obligation and is needed to pay that obligation.9 (Health & Saf. Code, §
34183, subd. (a)(1)(B); Stats. 2015, ch. 325, § 16.) Here, there is no dispute that the
retirement levy was enacted to support the County’s retirement program. However, two

9       SB 107 provides: “Notwithstanding subdivision (b) of Section 33670, that portion
of the taxes in excess of the amount identified in subdivision (a) of Section 33670, which
are attributable to a property tax rate approved by the voters . . . to make payments in
support of pension programs . . . and levied in addition to the property tax rate limited by
subdivision (a) of Section 1 of Article XIII A of the California Constitution, shall be
allocated to, and when collected shall be paid into, the fund of that taxing entity, unless
the amounts in question are pledged as security for the payment of any indebtedness
obligation, as defined in subdivision (e) of Section 34171, and needed for payment
thereof.” (Health & Saf. Code, 34183, subd. (a)(1)(B); Stats. 2015, ch. 325, § 16.)

                                             27
questions arise: (1) Does SB 107 apply to tax increment collected under the retirement
levy before SB 107? And (2) was tax increment from the retirement levy pledged as
security for indebtedness of the former redevelopment agency, which tax increment is
still needed to pay that indebtedness?
       We conclude: (1) SB 107 does not apply to taxes collected under the retirement
levy before SB 107 (Sept. 22, 2015), and (2) whether tax increment from the retirement
levy was pledged as security for indebtedness of the former redevelopment agency and
needed to pay that indebtedness is beyond the scope of appellate review.10
       A.     Property Taxes Collected Before Enactment of SB 107
       SB 107 took effect immediately because it provided for appropriations related to
the budget bill. (Stats. 2015, ch. 325, § 31; see Cal. Const., art. IV, § 12, subd. (e)(1).) It
was signed by the governor on September 22, 2015, which became its effective date.
(Ibid.) But nothing in SB 107 made it retroactive for taxes collected before September
22, 2015. Nonetheless, the County argues SB 107 “effectively resolves the County’s
appeal in favor of the County and moots the City’s [(successor agency’s)] cross-appeal.”
To support this argument, the County writes: “SB 107 . . . moots issues involving money

10      In its letter brief filed after the enactment of SB 107, the successor agency argues
that SB 107 does not change the definition of tax increment but instead applies only to
how the money is allocated after it has been paid to the trust fund. The successor agency
bases this argument on the fact that the relevant change made in SB 107 was to amend
Health and Safety Code section 34183, which governs how funds already in the trust fund
are distributed—for example, to pay the former redevelopment agency’s debts, to taxing
entities, and other destinations. This argument is without merit because, even though the
relevant change is to the statute governing how funds are distributed from the trust fund,
the language of the change makes it applicable to what funds are distributed to the trust
fund. SB 107 provides: “Notwithstanding subdivision (b) of Section 33670 . . . .” That
subdivision defines tax increment that must be distributed to the trust fund. Therefore,
SB 107 provides that, notwithstanding the statute that defines tax increment that must be
distributed to the trust fund, tax increment attributable to a tax to support a pension
program is to be distributed to the taxing agency (here, the County) and not to the trust
fund. (Health & Saf. Code, § 34183, subd. (a)(1)(B).)

                                              28
impounded from past tax years, because the legislation validates the allocations of
revenues made by any county auditor-controller prior to June 15, 2015. ([Health & Saf.
Code,] § 34183[, subd.] (a)(1)(B).)” (Fn. omitted.)
          This argument refers to additional language included in the provision of SB 107
just discussed concerning revenues raised pursuant to a local pension levy. The
additional language provides that all “allocations” of property tax revenue before June
15, 2015, “to make payments in support of pension programs . . . are valid and shall not
be affected by this section.” (Health & Saf. Code, 34183, subd. (a)(1)(B).) The
additional language also gives immunity to officials, including the county auditor-
controller, for such allocations made before June 15, 2015.11 (Ibid.)
          The County’s attempt to use this additional language in the statute to validate its
allocation of the tax increment revenue associated with the retirement levy to pay the
retirement obligations of the County rather than to the trust fund to put toward the
winding down of the former redevelopment agency (or to be distributed to other taxing
entities) fails because the county auditor-controller did not make that allocation. Instead,
the county auditor-controller simply impounded the funds pending the outcome of this
action.
          When this litigation began, the county auditor-controller, in the County’s words,
“impounded the funds so that they would not be spent pending resolution of the dispute

11      “Notwithstanding any other law, all allocations of revenues above one cent ($0.01)
derived from the imposition of a property tax rate . . . to make payments in support of
pension programs . . . and levied in addition to the property tax rate limited by
subdivision (a) of Section 1 of Article XIII A of the California Constitution, made by any
county auditor-controller prior to June 15, 2015, are valid and shall not be affected by
this section. A city, county, city and county, county auditor-controller, successor agency,
department, or affected taxing entity shall not be subject to any claim for money,
damages, or reallocated revenues based on any allocation of such revenues above one
cent ($0.01) prior to June 15, 2015.” (Health & Saf. Code, 34183, subd. (a)(1)(B); Stats.
2015, ch. 325, § 16.)

                                                29
with the City.” Impounding the funds so that they are not spent is different from
allocating the funds “to make payments in support of pension programs.” (Health & Saf.
Code, 34183, subd. (a)(1)(B).)
       The County claims that retaining the funds from the retirement levy tax increment
and impounding them rather than paying them to the trust fund constituted allocating
those funds, especially since the County did not turn the funds over to the trust fund.
This stretches too thin the definition of “allocation” and is entirely inconsistent with the
specific use of that word in the new statute. That statute validates “allocations of
revenues . . . to make payments in support of pension programs.” (Health & Saf. Code,
34183, subd. (a)(1)(B).) The funds were not allocated to that purpose; instead, they were
impounded to await the decision of the courts. We conclude that (1) the retirement levy
tax increment funds were not allocated by the County to make payments in support of the
County’s pension program, and, therefore, (2) the statute’s validation provision does not
apply to any funds before June 15, 2015.
       Because SB 107 was not made retroactive and the validation provision of Health
and Safety Code section 34183, subdivision (a)(1)(B) does not apply to the facts of this
case, SB 107 does not affect the trial court’s ruling with respect to pre-SB 107 taxes.
Having so concluded, we continue to the question of how to apply SB 107 to taxes
collected after its enactment.
       B.     Property Taxes Collected After Enactment of SB 107
       Under SB 107, revenues raised pursuant to a local pension levy cannot be paid to
the trust fund “unless the amounts in question are pledged as security for the payment of
any indebtedness obligation, as defined in subdivision (e) of Section 34171, and needed
for payment thereof.” (Health & Saf. Code, 34183, subd. (a)(1)(B); Stats. 2015, ch. 325,
§ 16.) Whether the retirement levy tax increment funds were pledged as security for
debts of the former redevelopment agency and whether that tax increment revenue is
needed to pay such debts were not issues litigated in the trial court.

                                             30
         The County contends: “Because the County’s pension levy is not needed for
payment of the former [redevelopment agency’s] [(RDA’s)] indebtedness, the Court need
not reach the issue of whether any part of the pension levy was pledged as security for the
former RDA’s indebtedness. . . . [And] no part of the pension levy either was or could
have been pledged as security for any of the former RDA’s debts.” As support for these
contentions, the County relies on evidence it wishes us to consider on appeal—namely, a
declaration by the current county auditor-controller that for the past two years there have
been sufficient funds to pay the debts of the former redevelopment agency without the tax
increment revenue associated with the retirement levy. The County writes: “This state of
affairs is almost certainly going to continue.”
         On the other hand, the successor agency wants us to take judicial notice of official
letters supporting a position that the trust fund has not had sufficient funds to meet all of
its obligations over the past several years.
         We are not well positioned to resolve these issues, which should be resolved in the
first instance, if necessary, in a trial court proceeding. (See In re Zeth S. (2003) 31
Cal. 4th 396, 414; Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal. 3d 180, 184, fn. 1
[evidence not presented in the trial proceeding is beyond the scope of appellate review].)
Therefore, we decline to consider what effect, if any, SB 107 has on tax increment
associated with the retirement levy after September 22, 2015, the date of enactment of SB
107.12

12     On October 26, 2015, the County filed a request for judicial notice of (1) a bill
analysis of SB 107 by the Senate Committee on Budget and Fiscal Review and (2) an
undated document entitled “Five-Year Economic Forecast and Revenue Projections–
2016-2020.” The request is granted as to the bill analysis and denied as to the economic
forecast and revenue projections document.

       The County also filed, on July 28, 2014, a request for judicial notice of (1) a letter
from the City of San Jose’s director of finance regarding the City’s ability to pay debt

                                               31
                                     DISPOSITION
       The judgment is affirmed as to tax increment funds before September 22, 2015,
and the matter is remanded for further proceedings as to tax increment funds after
September 22, 2015, if necessary. The parties must bear their own costs on appeal. (Cal.
Rules of Court, rule 8.278(a)(3).)

                                                      NICHOLSON             , Acting P. J.

We concur:

      ROBIE                 , J.

      MURRAY                , J.

service, (2) ballot pamphlet materials for Proposition 87 (Gen. Elec., Nov. 8, 1988),
(3) excerpts from Assembly Bill No. 26 X1, and (4) the Assembly Floor Analysis for
Assembly Bill No. 26 X1. The request is denied as to the first document and granted as
to the remaining documents.

        On November 25, 2015, the successor agency filed a request for judicial notice of
five letters from the county auditor-controller to the State Controller concerning the
sufficiency of funds to meet the trust fund’s obligations. The request is denied.

                                           32