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3 <br />allocated based on the allocation model developed in connection with the proposed <br />negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as <br />adjusted to reflect only those cities and counties that are eligible, based on population or <br />litigation status, to become a CA Participating Subdivision. The percentage from the CA <br />Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in <br />Appendix 1 in the column entitled abatement percentage (the “Local Allocation”). For <br />the avoidance of doubt, Litigating Special Districts and California towns, cities, and <br />counties with a population less than 10,000 are not eligible to receive an allocation of CA <br />Abatement Accounts Funds. <br />b)A CA Participating Subdivision that is a county, or a city and county, will be allocated its <br />Local Allocation share as of the date on which it becomes a Participating Subdivision, <br />and will receive payments as provided in the Distributor Settlement Agreement. <br />c)A CA Participating Subdivision that is a city will be allocated its Local Allocation share <br />as of the date on which it becomes a Participating Subdivision. The Local Allocation <br />share for a city that is a CA Participating Subdivision will be paid to the county in which <br />the city is located, rather than to the city, so long as: (a) the county is a CA Participating <br />Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it <br />requests direct payment at least 60 days prior to a Payment Date. A Local Allocation <br />share allocated to a city but paid to a county is not required to be spent exclusively for <br />abatement activities in that city, but will become part of the county’s share of the CA <br />Abatement Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of <br />CA Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA <br />Abatement Accounts Fund Oversight). <br />d)A city within a county that is a CA Participating Subdivision may opt in or out of direct <br />payment at any time, and it may also elect direct payment of only a portion of its share, <br />with the remainder going to the county, by providing notice to the Settlement Fund <br />Administrator at least 60 days prior to a Payment Date. For purposes of this CA <br />Distributor Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San <br />Jose and Eureka will be deemed to have elected direct payment if they become <br />Participating Subdivisions. <br />e)The State will receive the Local Allocation share of any payment to the Settlement Fund <br />that is attributable to a county or city that is eligible to become a CA Participating <br />Subdivision, but that has not, as of the date of that payment to the Settlement Fund, <br />become a Participating Subdivision. <br />f)Funds received by a CA Participating Subdivision, and not expended or encumbered <br />within five years of receipt and in accordance with the Distributor Settlement Agreement <br />and this CA Distributor Allocation Agreement shall be transferred to the State; provided <br />however, that CA Participating Subdivisions have seven years to expend or encumber CA <br />Abatement Accounts Funds designated to support capital outlay projects before they must <br />be transferred to the State. This provision shall not apply to the Cost Reimbursement <br />Funds, which shall be controlled by Appendix 2. <br />288