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<br />26 <br />Although the Dissolution Act authorizes the Successor Agency to seek subordination of <br />its statutory pass-through payment obligations to payment of debt service on the 2014 Bonds, <br />the Successor Agency did not do so. Accordingly, payment of debt service on the 2014 Bonds <br />from Tax Revenues is subordinate to the payment of statutory pass-through payment <br />obligations. <br /> <br />Housing Set-Aside <br /> <br />Before it was amended by the Dissolution Act, the Redevelopment Law required the <br />Former Agency to set aside not less than 20% of all tax increment generated in the Project <br />Areas into a low and moderate income housing fund to be used for the purpose of increasing, <br />improving and/or preserving the supply of low and moderate income housing. These tax <br />increment revenues were commonly referred to as “Housing Set-Aside.” <br /> <br />The Dissolution Act eliminated the Housing Set-Aside requirement. As a result, and <br />because the Successor Agency has no obligations that are payable from Housing Set-Aside, <br />the former Housing Set-Aside is available to pay debt service on the 2014 Bonds; the projection <br />of Tax Revenues prepared by the Fiscal Consultant and set forth in the section of this Official <br />Statement entitled “THE PROJECT AREAS – Projected Available Net Tax Increment and <br />Estimated Debt Service Coverage,” assumes the availability of the former Housing Set-Aside for <br />this purpose. <br /> <br /> <br />PROPERTY TAXATION IN CALIFORNIA <br /> <br />Property Tax Collection Procedures <br /> <br />Classification. In the State, property which is subject to ad valorem taxes is classified <br />as “secured” or “unsecured.” Secured and unsecured property are entered on separate parts of <br />the assessment roll maintained by the County assessor. The secured classification includes <br />property on which any property tax levied by a county becomes a lien on that property. A tax <br />levied on unsecured property does not become a lien against the taxed unsecured property, but <br />may become a lien on certain other property owned by the taxpayer. Every tax which becomes <br />a lien on secured property has priority over all other liens on the secured property arising <br />pursuant to State law, regardless of the time of the creation of other liens. <br /> <br />Generally, ad valorem taxes are collected by a county (the “Taxing Authority”) for the <br />benefit of the various entities (e.g., cities, schools and special districts) that share in the ad <br />valorem tax (each a taxing entity) and successor agencies eligible to receive distributions from <br />the respective Redevelopment Property Tax Trust Funds. <br /> <br />Collections. Secured and unsecured property are entered separately on the <br />assessment roll maintained by the county assessor. The method of collecting delinquent taxes <br />is substantially different for the two classifications of property. The taxing authority has four <br />ways of collecting unsecured personal property taxes: (i) initiating a civil action against the <br />taxpayer, (ii) filing a certificate in the office of the county clerk specifying certain facts in order to <br />obtain a judgment lien on certain property of the taxpayer, (iii) filing a certificate of delinquency <br />for record in the county recorder’s office to obtain a lien on certain property of the taxpayer, and <br />(iv) seizing and selling personal property, improvements or possessory interests belonging or <br />assessed to the assessee. The exclusive means of enforcing the payment of delinquent taxes