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Assessment Appeals. Property taxable values may be reduced as a result of a successful appeal of the taxable value determined by the county assessor. An appeal may result in a reduction to the county assessor's original taxable value and a tax refund to the applicant property owner. A reduction in taxable values within the Project Area and the refund of taxes which may arise out of successful appeals by property owners will affect the amount of Tax Revenues under the Indenture. The Successor Agency has in the past experienced reductions in its tax increment revenues as a result of assessment appeals. The actual impact to tax increment is dependent upon the actual revised value of assessments resulting from values determined by the Orange County Assessment Appeals Board or through litigation and the ultimate timing of successful appeals. For a discussion of historical assessment appeals in the Project Area and summary information regarding pending and resolved assessment appeals for the Successor Agency, see "THE PROJECT AREA — Assessment Appeals" and APPENDIX C - "REPORT OF FISCAL CONSULTANT." Redevelopment Plan Limitations. In 1994, the California legislature made significant changes in the Redevelopment Law by the adoption of AB 1290, Chapter 942, statutes of 1993 "AB 1290"). I£ a new redevelopment project was formed by a redevelopment plan adopted on or after January 1, 1994 or if new territory was added to a redevelopment project on or after January 1, 1994, under Section 33607.5 of the Redevelopment Law, any affected taxing entity, including the City, would share in the Tax Revenues generated by such added area pursuant to a statutory formula ("Statutory Tax Sharing"). For a further discussion of AB 1290 see "THE PROJECT AREA — Tax Sharing Payments." In addition, with respect to redevelopment projects formed by adoption of a redevelopment plan prior to January 1, 1994, if the Former Agency deleted the time limit to incur indebtedness in a redevelopment project (pursuant to Section 33333.6(e) of the Redevelopment Law, as amended pursuant to SB 211) or increased the total amount of Tax Revenues to be allocated to the project area or increased the duration of the Redevelopment Plan and the period for receipt of Tax Revenues, Statutory Tax Sharing is required under Section 33607.7 of the Redevelopment Law with all affected Taxing Agencies not already a party to a tax sharing agreement, once the original limitations were reached. SB 107 clarifies that former tax increment limits set forth in redevelopment plans such as the Redevelopment Plan no longer apply for purposes of paying approved enforceable obligations such as the Bonds. Administrative Costs. In 1990, the Legislature enacted SB 2557 (Chapter 466, Statutes of 1990) which allows counties to charge for the cost of assessing, collecting and allocating property tax revenues to local government jurisdictions on a prorated basis. SB 1559 (Chapter 697, Statutes of 1992) explicitly includes redevelopment agencies among the jurisdictions which are subject to such charges. In addition, Sections 34182(e) and 34183(a) of the Dissolution Act allow administrative costs of the County Auditor -Controller for the cost of administering the provisions of the Dissolution Act, as well as the foregoing SB 1559 amounts, to be deducted from property tax revenues before moneys are deposited into the RPTTF. For Fiscal Year 2017/18, the County administrative fees charged to the Project Area including administration of the RPTTF were $530,235. In total, the fees represent approximately 0.77% of gross Tax Revenues. THE SUCCESSOR AGENCY Government Organization The Former Agency was established by the City Council in 1973 pursuant to the Redevelopment Law. On June 28, 2011, AB X1 26 was enacted, together with a companion bill, AB XI 27. A lawsuit was brought in the California Supreme Court, California Redevelopment Association, et al. v. Matosantos, et al., 53 Cal. 4th 231 (Cal. Dec. 29, 2011), challenging the constitutionality of AB XI 26 and AB Xl 27. In its December 29, 2011 decision, the California Supreme Court largely upheld AB X1 26, invalidated AB XI 27, and held that AB XI 26 may be severed from AB XI 27 and enforced independently. As a result of AB XI 26 and the decision of the California Supreme Court in the California Redevelopment Association case, as of February 1, 2012, all 22 SA -3-36