85% Local Share
Where do these monies live?
California’s combined 85% local share is distributed to its cities and counties from two sources:[1]
Fifteen percent (15%) derives from the share and is distributed to certain local governments that filed litigation against opioid-related companies prior to October 1, 2020.[3]
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.[4]
What can this share be spent on?
In general, and with limited exceptions,[5] California’s local shares must be spent on the uses described in the national settlement agreements’ (non-exhaustive) ,[6] which includes prevention, harm reduction, treatment, recovery, and other strategies.
Monies from the 70% Abatement Accounts Fund must be spent on forward-looking Exhibit E uses only,[7] with at least half spent on the list.[8] Indirect costs are capped at 10%,[9] and several law enforcement uses of this share are prohibited outright.[10] Localities must spend or encumber funds from this share within five years of receiving them, or seven years for capital outlay projects, or the funds are returned to the state.[11]
Monies from the 15% California Subdivision Fund are not subject to the same restrictions. After certain fees and costs,[12] the remaining funds — “no less than 50% of the total CA Subdivision Fund received in any year” — may be spent on future opioid-related projects, to reimburse past opioid-related expenses, and attorneys’ fees.[13]
Who ultimately decides how to spend this share (and how)?
Localities decide autonomously (with California Department of Health Care Services oversight). Though decisionmakers for California’s cities and counties will ultimately decide for themselves how to spend their monies,[14] they must report their expenditures to the ,[15] which must monitor their compliance with the agreements.[16] Additionally, settlement funds allocated to a city from the Abatement Accounts Fund are paid to the county in which the city is located unless the city specifically requests direct payment(s).[17]
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 local governments may spend funds from their share in ways that replace (or “supplant”) — rather than supplement — existing resources.
Can I see how this share has been spent?
Eventually (public reporting required). Local expenditures will be published on the California Department of Health Care Services’ website each year.[18] Localities are required to report settlement expenditures to DHCS, and DHCS is then required to post an annual written report regarding the use of settlement funds on its website.[19]
Visit OpioidSettlementTracker.com’s for an updated collection of states’ and localities’ available expenditure reports.
What else should I know?
Not applicable.
See Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Distributor Settlement (“CA Distributor State-Subdivision Agreement”), Secs. (defining “CA Participating Subdivision” as “a Participating Subdivision that is also (a) Plaintiff Subdivision and/or (b) a Primary Subdivision with a population equal to or greater than 10,000” but excluding “Litigating Special Districts”), (defining “Plaintiff Subdivision” as “a Subdivision located in California, other than a Litigating Special District, that filed a lawsuit, on behalf of the Subdivision and/or through an official of the Subdivision on behalf of the People of the State of California, against one or more Opioid Defendants prior to October 1, 2020”), (defining “Litigating Special District” as “a school district, fire protection district, health authority, health plan, or other special district that has filed a lawsuit against an Opioid Defendant”), (allocating 70% share to “CA Participating Subdivision[s]”), (allocating 15% share to “Plaintiff Subdivisions that are Initial Participating Subdivisions”). See also California State-Subdivision Agreements Regarding Distribution and Use of Settlement Funds for the , , , , , , and (substantively identical provisions). All other footnotes will cite to only the CA Distributor State-Subdivision Agreement. ↑
