CRA

Introduction

Community Redevelopment Agency of the City of Los Angeles (CRA) and the County of Los Angeles (County) dispute the manner in which property tax revenue is shared. The dispute centers on County’s interpretation of Revenue and Taxation Code section 95.3 (section 95.3), which reduces the amount of revenue that CRA receives. We uphold County’s interpretation and affirm.

Background

California law authorizes the creation of community redevelopment agencies to rehabilitate blighted areas. These agencies adopt plans for specific blighted areas, and pursuant to these plans the agencies become entitled to the increase in tax revenues attributable to the redevelopment area covered by the agencies’ plans. Generally, as property values in a redevelopment area increase, tax revenues also increase. These incremental increases are referred to as “tax revenue increments” or simply “tax increments.” Community redevelopment agencies typically use bonds to fund redevelopment projects and then use allocations of the tax increments to repay the bonds.

The Legislature, in accordance with the California Constitution (art. XVI, § 16), has provided that local taxing agencies…