15% State Share

Where do these monies live?

The Opioid Settlement Fund holds the state government’s 15% California State Fund share.[1]

Note: This allocation applies to all of California’s opioid settlements except the Mallinckrodt bankruptcy, which allocates 60% of funds to local governments and 40% to the state.[2]

What can this share be spent on?

With limited exceptions,[3] California’s state share must be spent on the uses described in the national settlement agreements’ (non-exhaustive) Exhibit E,[4] which includes prevention, harm reduction, treatment, recovery, and other strategies. Monies from this 15% California State Fund share must be spent on forward-looking Exhibit E uses only.[5]

Who ultimately decides how to spend this share (and how)?

State legislature decides, California Department of Health Care Services oversees and administers. The California state legislature ultimately “determine[s] and appropriate[s]” the state’s 15% share,[6] and the California Department of Health Care Services (DHCS) “administer[s]” and “oversee[s]” its activities.[7]

Are supplantation uses prohibited for this share?

No, supplantation is not prohibited. Like most states, California does not explicitly prohibit supplantation uses of its opioid settlement funds. This means that the 15% state share may be spent in ways that replace (or “supplant”) — rather than supplement — existing resources.

Can I see how this share has been spent?

Eventually (public reporting required). You can view expenditures from the state share on the California Department of Health Care Services’ Opioid Settlements webpage, as well as on the DHCS Opioid Responses’ State Funded projects and the Current Projects webpages. The California Department of Health Care Services is required to prepare an annual report regarding settlement expenditures and make the report publicly available on its website.[8]

Visit OpioidSettlementTracker.com’s Expenditure Report Tracker for an updated collection of states’ and localities’ available expenditure reports.

What else should I know?

Not applicable.

Citations

1. See Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Distributor Settlement (“CA Distributor State-Subdivision Agreement”), Sec. 4.A (providing that (“[f]ifteen percent of the total Settlement Fund payments will be allocated to the State and used by the State for future Opioid Remediation”). See also California State-Subdivision Agreements Regarding Distribution and Use of Settlement Funds for the Allergan Settlement, CVS Settlement, Janssen Settlement, Kroger Settlement, Teva Settlement, Walgreens Settlement, and Walmart Settlement (substantively identical provisions). All other footnotes will cite to only the CA Distributor State-Subdivision Agreement. See also California’s Opioid Settlements (“California State Fund”). California Department of Health Care Services website. Accessed August 29, 2024. ↑
2. California Mallinckrodt Statewide Abatement Agreement In re: MALLINCKRODT PLC, et al. Bankruptcy Case No. 20-12522, Sec. 4 (allocating 40% to the state and 60% to local governments). See also Payment Information (“Mallinckrodt Bankruptcy Distribution”). California Department of Health Care Services website. Accessed August 28, 2024; OpioidSettlementTracker.com’s Global Settlement Tracker. ↑
3. See Distributor Settlement Agreement, Sec. I.SS (“Exhibit E provides a non-exhaustive list of expenditures that qualify as being paid for Opioid Remediation. Qualifying expenditures may include reasonable related administrative expenses”). ↑
4. Cal. Gov't Code Sec. 12534(g) (“Upon appropriation by the Legislature, moneys in the Opioid Settlements Fund shall be used for opioid remediation in accordance with the terms of the judgment or settlement from which the funds were received”). See also California’s Opioid Settlements (“California State Fund”). California Department of Health Care Services website. Accessed August 29, 2024 (“Statewide activities funded by the OSF are limited to opioid remediation activities per the National Opioid Settlement Agreements”). ↑
5. This means that reimbursement uses of opioid settlement funds are specifically prohibited for this share. See CA Distributor State-Subdivision Agreement, Sec. 4.A (“Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by the State for future Opioid Remediation”). ↑
6. Cal. Gov't Code Sec. 12534(g); California’s Opioid Settlements (“California State Fund”). California Department of Health Care Services website. Accessed August 29, 2024 (“Use of funds within the OSF are determined and appropriated by the California legislature and subject to normal state budgetary processes. Statewide activities funded by the OSF are limited to opioid remediation activities per the National Opioid Settlement Agreements”). ↑
7. Cal. Gov't Code Secs. 12534(g) (“Upon appropriation by the Legislature, moneys in the Opioid Settlements Fund shall be used for opioid remediation in accordance with the terms of the judgment or settlement from which the funds were received”), (h) (“The State Department of Health Care Services shall administer the Opioid Settlements Fund and shall oversee those activities funded by the Opioid Settlements Fund”). ↑

8. CA Distributor State-Subdivision Agreement, Sec. 5(a). ↑