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<br />22 <br /> <br />Order of Priority of Distributions from Redevelopment Property Tax Trust Fund. <br />Typically, under the Redevelopment Property Tax Trust Fund distribution provisions of the <br />Dissolution Act, a county auditor-controller is to distribute funds for each six-month period in the <br />following order specified in Section 34183 of the Dissolution Act: <br /> <br />(i) first, subject to certain adjustments for subordinations to the extent <br />permitted under the Dissolution Act (if any, as described above under “SECURITY FOR <br />THE 2014 BONDS - Statutory Pass-Through Payments” and “- Pass-Through <br />Agreements”) and no later than each January 2 and June 1, to each local successor <br />agency and school entity, to the extent applicable, amounts required for pass-through <br />payments such entity would have received under provisions of the Redevelopment Law, <br />as those provisions read on January 1, 2011, including negotiated pass-through <br />agreements and statutory pass-through obligations; <br /> <br />(ii) second, on each January 2 and June 1, to the successor agency for <br />payments listed in its Recognized Obligation Payment Schedule, with debt service <br />payments scheduled to be made for tax allocation bonds having the highest priority over <br />payments scheduled for other debts and obligations listed on the Recognized Obligation <br />Payment Schedule; <br /> <br />(iii) third, on each January 2 and June 1, to the successor agency for the <br />administrative cost allowance, as defined in the Dissolution Act; and <br /> <br />(iv) fourth, on each January 2 and June 1, to taxing entities any moneys <br />remaining in the Redevelopment Property Tax Trust Fund after the payments and <br />transfers authorized by clauses (i) through (iii), in an amount proportionate to such taxing <br />entity’s share of property tax revenues in the tax rate area in that fiscal year (without <br />giving effect to any pass-through obligations that were established under the <br />Redevelopment Law). <br /> <br />Failure to Submit a Recognized Obligation Payment Schedule. The Recognized <br />Obligation Payment Schedule must be approved by the oversight board and must be submitted <br />by a successor agency to the county administrative office, the county auditor-controller, the <br />DOF, and the State Controller by 90 days before the date of the next January 2 or June 1 <br />property tax distribution. If the successor agency does not submit a Recognized Obligation <br />Payment Schedule by the applicable deadline, the city or county that established the former <br />redevelopment agency will be subject to a civil penalty equal to $10,000 per day for every day <br />the schedule is not submitted to the DOF. Additionally, the successor agency’s administrative <br />cost allowance is reduced by 25% if the successor agency did not submit a Recognized <br />Obligation Payment Schedule by the 80th day before the date of the next January 2 or June 1 <br />property tax distribution, as applicable, with respect to the Recognized Obligation Payment <br />Schedule for the subsequent six-month period. For additional information regarding procedures <br />under the Dissolution Act relating to late Recognized Obligation Payment Schedules and <br />implications thereof on the 2014 Bonds, see “RISK FACTORS – Recognized Obligation <br />Payment Schedule.” <br /> <br />Recognized Obligation Payment Schedule Covenant. In this regard, the Successor <br />Agency covenants in the Indenture that it will comply with all of the requirements of the <br />Redevelopment Law and the Dissolution Act. Pursuant to Section 34177 of the Dissolution Act,