50% Local Share
Where do these monies live?
Fifty percent (50%) of Indiana’s opioid settlement monies belong to its 648 towns, cities, and counties and are held in two separate accounts of the local opioid settlement fund:[1]
The local abatement opioid settlement account holds 35%.[2]
The local unrestricted opioid settlement account holds 15%.[3]
What can this share be spent on?
Funds from the local governments’ 35% abatement opioid settlement account must be used on the approved abatement uses described in the national settlement agreement’s (non-exhaustive) Exhibit E,[4] which includes prevention, harm reduction, treatment, recovery, and other strategies.
The remaining 15% of funds from the local unrestricted opioid settlement account is explicitly distributed for reimbursement uses,[5] and the local opioid settlement fund’s administrative expenses may be paid out of this share as well.[6]
Who ultimately decides how to spend this share (and how)?
Local governments decide autonomously (but must report uses). Decisionmakers for the towns, cities, and counties will ultimately decide for themselves how to spend their share of settlement funds,[7] including as sub-grants to local organizations and service providers.[8]
Are supplantation uses prohibited for this share?
No, supplantation is not prohibited. Like most states, Indiana does not explicitly prohibit supplantation uses of its opioid settlement funds. This means that the 50% local share may spend their shares in ways that replace (or “supplant”) — rather than supplement — existing resources.
Can I see how this share has been spent?
Yes (public reporting required). The Next Level Recovery’s Opioid Settlements website hosts a downloadable spreadsheet of local expenditures. Indiana’s towns, cities, and counties are required to report their uses to the Indiana Family and Social Services Administration.[9] The Office of the Secretary of Family and Social Services is required to compile and submit an annual report on the use of opioid settlement funds,[10] and this report must be posted online (see, e.g., Fall 2023 report).[11]
Visit OpioidSettlementTracker.com’s Expenditure Report Tracker for an updated collection of states’ and localities’ available expenditure reports.
What else should I know?
Indiana state law allows local governments to securitize their settlement funds.[12] This means that a local government may sell its right to future settlement distributions in exchange for a smaller sum provided up front if the cash or other payments received are still used for approved purposes.[13]
Citations
Ind. Code Ann. Secs. 4-6-15-4(a)(2), 4-6-15-4(a)(4), 4-12-16.3-2 (establishing local opioid settlement fund), 4-12-16.3-5 (establishing “local unrestricted opioid settlement account” and “local abatement opioid settlement account” and specifying their contents); Annual Opioid Settlement Report – Fall 2023. Indiana Family and Social Services Administration. Accessed August 13, 2024 (“In December 2022, the State of Indiana and 648 local units of government received a combined $107,381,021.29 as part of the 18-year settlement agreement. These funds were split 50-50 between the State and all 648 local units of government”). Distribution totals may be downloaded here. The Local Opioid Settlement Fund is continuously appropriated to the state Attorney General’s office, who then distributes these monies to Indiana’s towns, cities, and counties. Ind. Code Ann. Secs. 4-6-15-4(c), 4-12-16.3-5(1)-(2). Cities and towns with de minimis annual distributions have their shares distributed to their counties. Ind. Code Ann. Secs. 4-6-15-4(a)(4)(A)-(B). ↑
Ind. Code Ann. Sec. 4-6-15-4(a)(4). ↑
Ind. Code Ann. Sec. 4-6-15-4(a)(2). See also Ind. Code Ann. Secs. 4-6-15-4(d) (requiring shares otherwise belonging to cities, counties, and towns that have decided to pursue their own claims and have “opted out” of the state’s settlement agreement to be distributed to those that have “opted in”), 4-6-15-2 (political subdivisions generally bound by terms of litigation, processes for political subdivision to opt out and/or opt back in), 4-6-15-5 (requiring localities that opt back in to have attorneys’ fees withheld). ↑
Ind. Code Ann. Sec. 4-6-15-4(a)(4) (“Thirty-five percent (35%) … for programs of treatment, prevention, and care that are best practices as defined or required by the settlement documents or court order”). See also Opioid Settlement. Next Level Recovery Indiana website. Accessed August 13, 2024 (identifying and linking to Exhibit E as list of “approved abatement uses”); Distributor Settlement Agreement 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”). ↑
Ind. Code Ann. Sec. 4-6-15-4(a)(2) (“Fifteen percent (15%) … for distribution as reimbursement to cities, counties, and towns”). See also The County Bulletin and Uniform Compliance Guidelines Vol. No. 432. Indiana State Board of Accounts. September 2022 (providing that a locality’s “unrestricted portion may be spent in the same manner as money in the general fund”). Importantly, however, at least a portion of funds from the local unrestricted opioid settlement account must be used for either reimbursement of past or forward-looking opioid remediation expenditures. This is because settlement agreements entered after the distributor and Janssen settlements require a higher percentage of funds to be spent on opioid remediation. See, e.g., CVS Settlement Agreement, Sec. V(B)(1) (minimum 95.5% opioid remediation spending); Walgreens Settlement Agreement, Sec. V(B)(1) (minimum 95% opioid remediation spending); Walmart Settlement Agreement, Sec. V(B)(1) (minimum 85% opioid remediation spending). Even if the entirety of the state abatement opioid settlement account (35%), state unrestricted opioid settlement account (15%), and local abatement opioid settlement account (35%) were spent on opioid remediation, this total remediation spending (85%) would still fall short of these later settlement agreements minimum remediation spend thresholds, thereby requiring the use of monies from the local unrestricted opioid settlement account to make up the difference. ↑
Ind. Code Ann. Sec. 4-12-16.3-6. ↑
Ind. Code Ann. Secs. 4-6-15-4(a)(2), (a)(4). See also Attorney General Todd Rokita sends out $8.8 million in next round of opioid settlement funds to Hoosier communities. Indiana Attorney General press release. May 17, 2024. Accessed August 13, 2024 (“Local governments have discretion in choosing exactly how to use the opioid funds”). ↑
See, e.g., Evansville (announcing mayor’s Feb. 2024 request for proposals), Floyd County (reporting on county’s announcement of a new drug task force to oversee spend), Putnam County (Fall 2023 RFP), and Hamilton County (Spring 2024 RFP). ↑
Ind. Code Ann. Sec. 4-6-15-4(e). ↑
Ind. Code Ann. Secs. 4-6-15-4(e) (“All entities receiving opioid settlement funds shall monitor the use of those funds and provide an annual report to the office of the secretary of family and social services not later than a date determined by the office of the secretary of family and social services”), (f) (“The office of the secretary of family and social services shall compile and submit an annual comprehensive report of the information received under subsection (e) to the general assembly in an electronic format under IC 5-14-6 not later than October 1 of each year identifying all funds committed and used as specified by any settlement documents or court order”). ↑
Ind. Code Ann. Sec. 5-14-6-4(b)(1) (requiring agency that submits reports to the general assembly to post such reports on the internet). ↑
Ind. Code Ann. Sec. 4-6-15-4(i) (“Upon a majority vote of the legislative body, a city, county, or town receiving a distribution under subsection (a)(2) or (a)(4) may sell for cash or other consideration the right to receive the distribution. … A city, county, or town may pledge, grant a lien on, or grant a security interest in a distribution to effectuate a sale under this subsection. The legislative body’s approval of the sale is conclusive as to the adequacy of the consideration for the sale”). ↑
Ind. Code Ann. Sec. 4-6-15-4(i) (“the proceeds from the sale of a distribution received under subsection (a)(2) must be used for the purposes allowed for a distribution under subsection (a)(2), and the proceeds from the sale of a distribution received under subsection (a)(4) must be used for the purposes allowed for a distribution under subsection (a)(4)”). ↑
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