15% State Discretionary Abatement Fund
Where do these monies live?
The Opioid Restitution Fund (Fund) holds 75% of Maryland’s opioid settlement funds,[1] including the 15% of funds designated as State Discretionary Abatement Funds.[2]
What can this share be spent on?
Monies from this share must be spent on the forward-looking abatement uses specified in state law and consistently with the national settlement agreements’ (non-exhaustive) Exhibit E.[3] Permitted uses are specified by state law to include:
Eleven (11) evidence-based programs, services, supports, and resources for substance use disorder (SUD) prevention, harm reduction, treatment, or recovery[4]
“[S]upporting community-based nonprofit recovery organizations that provide nonclinical substance use recovery support services”[5]
Evidence-informed SUD prevention, harm reduction, treatment, or recovery pilot programs or demonstration studies that are not evidence-based, if approved by the Maryland Opioid Restitution Fund Advisory Council[6]
Evaluations of the effectiveness and impact of Fund expenditures[7]
Who ultimately decides how to spend this share (and how)?
Opioid Restitution Fund Advisory Council recommends, Maryland Secretary of Health decides. The State Discretionary Abatement Fund is spent on permitted uses that the Maryland Secretary of Health determines “best serve the purpose of Future Opioid Remediation in the State.”[8] Specifically,
The Maryland Secretary of Health is required to establish a program that allows Qualifying Non-Litigating Subdivisions (i.e., small local governments) to apply for grants from this share.[9] The Maryland State-Subdivision Agreement outlines factors that the Secretary may consider in making such grants,[10] but whether any grants are made is left to the Secretary’s discretion.[11]
This share is also distributed to state and local government agencies, public colleges or state universities, and other organizations through a competitive grants process administered by Maryland’s Department of Health.[12]
State Discretionary Abatement Fund amounts are subject to the recommendations of the Opioid Restitution Fund Advisory Council.[13] The Council, which is supported by Maryland’s Office of Overdose Response,[14] is responsible for annually recommending expenditures of the Fund to the Governor and Secretary of Health.[15]
Are supplantation uses prohibited for this share?
Yes, supplantation is prohibited. State law provides that monies expended from Opioid Restitution Fund — which houses this share — are “supplemental to and not intended to take the place of funding that otherwise would be appropriated for programs and services.”[16] This means that this share must only be used in ways that supplement — rather than replace (or “supplant”) — existing resources.[17]
Can I see how this share has been spent?
Yes (public reporting required). You can review the annual public reports published here. Maryland state law requires the Department of Health to post on its website decisions regarding the allocation of money from the Opioid Restitution Fund, including the 15% State Discretionary Abatement Fund.[18] The governor is also required to annually report to the Maryland General Assembly all expenditures from the Fund.[19]
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
Md. State Finance and Procurement Code Ann. Secs. 7-331(b) (establishing the Opioid Restitution Fund), (e) (providing that the fund includes all opioid settlement revenues received by the state); State-Subdivision Agreement Between the State of Maryland and Local Governments on Proceeds Relating to the Settlement of Opioids Litigation (“2022 Maryland State-Subdivision Agreement”), Secs. II(h) (requiring the state to maintain a Targeted Abatement Subfund in the Opioids Restitution Fund), IV(a)(1) (directing 15% state share to the Opioid Restitution Fund), IV(a)(2) (directing 60% of the state’s annual settlement payments to the Targeted Abatement Subfund). See also State-Subdivision Agreement Between the State of Maryland and Participating Local Governments on Proceeds from Settlement of Opioids Litigation Against Teva, Allergan, Walmart, and Walgreens (“2023 Maryland State-Subdivision Agreement”), Sec. I (providing that except as otherwise specified, the terms of the 2022 Maryland State-Subdivision Agreement apply to the settlements with Teva, Allergan, Walmart, and Walgreens). ↑
2022 Maryland State-Subdivision Agreement, Secs. IV(a)(2), IV(a)(2)(A); 2023 Maryland State-Subdivision Agreement, Sec. I (applying terms to later settlements). ↑
Md. State Finance and Procurement Code Ann. Secs. 7-331(f) (listing permitted uses of monies in the Opioid Restitution Fund), (i)(2) (prohibiting use of Fund monies for administrative expenses except as specified in subsection (f)); 2022 Maryland State-Subdivision Agreement, Secs. I(h) (defining “Permitted Use” to “mean any use permitted by the National Settlement Agreement and Section 7-331(f) of the State Finance and Procurement Article, as amended from time to time. Except as specifically provided otherwise by this Agreement, Permitted Uses shall be limited to Future Opioid Remediation”) (emphasis added), III(a) (requiring all settlement funds be used for “Permitted Uses that serve the purpose of Future Opioid Remediation” unless otherwise authorized), III(b) (authorizing reimbursement uses for only a portion of the 25% local share); IV(a)(2)(A) (requiring State Discretionary Abatement Fund monies be used for “Permitted Uses as determined by the Secretary to best serve the purpose of Future Opioid Remediation in the State”); 2023 Maryland State-Subdivision Agreement, Sec. I (applying terms to later settlements). See also 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”). See also Emily Keller. “Re: State Finance and Procurement Article § 7–331 (Chapter 537 of the Acts of 2019)—Opioid Restitution Fund Expenditure Report (MSAR # 14240).” Maryland Opioid Operational Command Center. November 1, 2023. Accessed August 27, 2024 (“to determine whether expenditures are approved and to identify the procedural and allocation requirements that apply to particular funds deposited in the ORF, the Maryland Department of Health must examine the requirements of Section 7-331, of the particular settlement agreement or judgment from which funds were derived, and of any applicable state-subdivision agreement entered by the Attorney General with one or more of the State’s subdivisions”). ↑
Md. State Finance and Procurement Code Ann. Sec. 7-331(f)(1). Note that administrative expenses are specifically authorized for four of the eleven enumerated uses: (1) “expanding the Heroin Coordinator Program”; (2) “organizing primary and secondary school education campaigns to prevent opioid use”; (3) “enforcing the laws regarding opioid prescriptions and sales”; and (4) “research regarding and training for substance use treatment and overdose prevention.” Md. State Finance and Procurement Code Ann. Secs. 7-331(f)(1)(iv), (f)(1)(vii)-(x). ↑
Md. State Finance and Procurement Code Ann. Sec. 7-331(f)(2). Note that this permitted use was added by legislation in 2024. See 2024 MD HB 980, Sec. 1. ↑
Md. State Finance and Procurement Code Ann. Sec. 7-331(f)(3) (providing that the Opioid Restitution Fund Advisory Council must both “determine[] that emerging evidence supports the distribution of money for the pilot program or that there is a reasonable basis for funding the demonstration study with the expectation of creating an evidence-based program” and “approve[] the use of money for the pilot program or demonstration study”). ↑
Md. State Finance and Procurement Code Ann. Sec. 7-331(f)(4) (“evaluations of the effectiveness and outcomes reporting for substance use disorder abatement infrastructure, programs, services, supports, and resources for which money from the Fund was used, including evaluations of the impact on access to harm reduction services or treatment for substance use disorders and the reduction in drug-related mortality”). ↑
2022 Maryland State-Subdivision Agreement, Secs. I(r) (defining “Secretary” to mean the Secretary of Health), III(c) (providing discretionary authority to the Secretary “to supplement grants to Qualifying Exhibit G Subdivisions for Permitted Uses with additional funding derived from Settlement Proceeds whose expenditure is committed to the discretion of the Secretary”), IV(a)(2)(A) (requiring State Discretionary Abatement Fund monies be used for “Permitted Uses as determined by the Secretary to best serve the purpose of Future Opioid Remediation in the State” and specifying that “nothing in this subsection shall require the Secretary to make any grant or restrict the Secretary’s discretion in utilizing funds deposited under this Subsection IV(a)(2)(A) as the Secretary believes will best serve the needs of Maryland residents and communities for opioids remediation”); 2023 Maryland State-Subdivision Agreement, Sec. I (applying terms to later settlements). See also 2022 Maryland State-Subdivision Agreement, Secs. II(d) (“Any power conferred by this Agreement upon the Secretary may be delegated by the Governor to the Executive Director or a similar official created by future executive order”), I(g) (defining “Executive Director” to mean “Executive Director of the Opioid Operational Command Center”); 2023 Maryland State-Subdivision Agreement, Secs. I (generally applying terms to later settlements), II(a) (but replacing the 2022 State-Subdivision Agreement’s definition of “Executive Director” with “Special Secretary for Opioids Response or her designee or such other person designated by the Governor or by law to direct the Opioid Operational Command Center or any successor agency having substantially similar responsibilities and duties”); Maryland Executive Order 01.01.2023.21. December 14, 2023 (establishing the Office of Overdose Response within the Maryland Department of Health as the successor to the Opioid Operational Command Center). ↑
2022 Maryland State-Subdivision Agreement, Secs. I(j) (defining “Qualifying Non-Litigating Subdivision” to mean “a Subdivision other than a Qualifying Exhibit G Subdivision or Special District that has established a Local Abatement Fund in accordance with the requirements of this Agreement”), IV(a)(2)(A) (“the Secretary shall establish a program that enables Qualifying Non-Litigating Subdivisions to apply for grants and may, in the Secretary’s discretion, make grants from this amount to participating Qualifying Non-Litigating Subdivisions … nothing in this subsection shall require the Secretary to make any grant or restrict the Secretary’s discretion in utilizing funds deposited under this Subsection IV(a)(2)(A) as the Secretary believes will best serve the needs of Maryland residents and communities for opioids remediation”) (emphasis added); 2023 Maryland State-Subdivision Agreement, Sec. I (applying terms to later settlements). See also Settlement Overview. Maryland’s Office of Overdose Response website. Accessed August 27, 2024 (describing State Discretionary Abatement Fund as “[f]unds that may be used at the discretion of the state for opioid abatement purposes after considering grant applications from local subdivisions with a population of less than 10,000 people”). ↑
2022 Maryland State-Subdivision Agreement, Sec. IV(a)(2)(A) (“In determining whether to make a grant under this subsection, the Secretary may consider: (i) whether a grant is consistent with the overall needs for abatement in the community and in Maryland; (ii) the experience of the Subdivision in providing programs for opioids remediation and for the public health generally; (iii) the feasibility of the program to be funded by the grant; (iv) the consistency of the program with State policy and its level of integration with State and County programs for abatement and the discussions required by Section IV(b) of this Agreement; and (v) other needs for Future Opioids Remediation across the State”); 2023 Maryland State-Subdivision Agreement, Sec. I (applying terms to later settlements). ↑
2022 Maryland State-Subdivision Agreement, Sec. IV(a)(2)(A) (“the Secretary shall establish a program that enables Qualifying Non-Litigating Subdivisions to apply for grants and may, in the Secretary’s discretion, make grants from this amount to participating Qualifying Non-Litigating Subdivisions … nothing in this subsection shall require the Secretary to make any grant or restrict the Secretary’s discretion in utilizing funds deposited under this Subsection IV(a)(2)(A) as the Secretary believes will best serve the needs of Maryland residents and communities for opioids remediation”) (emphasis added); 2023 Maryland State-Subdivision Agreement, Sec. I (applying terms to later settlements). ↑
Opioid Restitution Fund Announcement Request for Applications, Sec. 1.1.1. Maryland Department of Health. June 26, 2024. Accessed August 28, 2024; Opioid Restitution Fund Announcement Request for Applications, Sec. 2.1.1. Maryland Department of Health. June 26, 2024. Accessed August 28, 2024 (“The Applicant shall be a Social organization as defined per Section 7-402 of the State Finance and Procurement Article of the Annotated Code of Maryland or a Maryland local or state government agency, or public college or state university in Maryland”); Md. Code Ann., State Fin. & Proc. Sec. 7-402(a)(2) (defining “Social organization” to mean “an association or corporation that is operated for a charitable, cultural, educational, historical, humane, industrial, medical, or military purpose”). See Opioid Restitution Fund Announcement Request for Applications, Sec. 3.2.2.6. Maryland Department of Health. June 26, 2024. Accessed August 28, 2024 (describing allowable and unallowable costs). ↑
Md. Health-General Code Ann. Sec. 7.5-905. See also About [the Opioid Restitution Fund Advisory Council]. Maryland’s Office of Overdose Response website. Accessed August 28, 2024 (“Maryland’s Opioid Restitution Fund (ORF) was created in 2019 to receive all funds awarded to the State of Maryland through legal settlements with prescription opioid manufacturers and distributors. In 2022, Maryland established the Council to provide recommendations regarding the use of those funds”). ↑
Md. Health-General Code Ann. Sec. 7.5-904(b). ↑
Md. Health-General Code Ann. Sec. 7.5-905(a) (“On or before November 1 each year, the Council shall provide specific findings and recommendations in writing to the Governor and the Secretary regarding the allocations of money from the Fund for expenditures consistent with uses of the Fund and considering (1) [t]he number of people per capita with a substance use disorder in a jurisdiction; (2) [d]isparities in access to care in a jurisdiction that may preclude persons; (3) [t]he number of overdose deaths per capita in a jurisdiction; (4) [t]he programs, services, supports, or other resources currently available to individuals with substance use disorders in a jurisdiction; and (5) [d]isparities in access to care and health outcomes in a jurisdiction”), (b)(1) (requiring the Secretary of Health to present decisions on allocations of Fund monies to the Council within 6 months of receiving the Council’s findings and recommendations”); Md. State Finance and Procurement Code Ann. Sec. 7-331(j)(2) (requiring the Governor to consult with the Council on recommended appropriations from the Fund at least twice annually), (j)(3)(iii) (requiring the Governor’s annual report to the Maryland General Assembly to include “recommended appropriations from the Fund identified in accordance with” the governor’s responsibility to consult with the Council). See also Settlement Overview. Maryland’s Office of Overdose Response website. Accessed August 27, 2024 (describing the State Discretionary Abatement Fund as “[f]unds that may be used at the discretion of the state for opioid abatement purposes after considering grant applications from local subdivisions with a population of less than 10,000 people. Subject to ORF Advisory Council recommendations”). See, e.g., Memorandum from the Opioid Restitution Fund Advisory Council to Governor Wes Moore and Secretary Laura Herrera Scott. Opioid Restitution Fund Advisory Council. October 3, 2023. Accessed August 27, 2024 (2023 Council funding recommendations). ↑
Md. State Finance and Procurement Code Ann. Sec. 7-331(i)(1). Vital Strategies and OpioidSettlementTracker.com have confirmed with the Maryland Office of Overdose Response that this provision operates as a substantive prohibition on supplantation uses rather than a mere expression of intent. ↑
The 2024 Opioid Restitution Fund Announcement’s standard grant agreement reiterates this prohibition on supplantation uses of granted funds. Opioid Restitution Fund Request for Applications, Secs. 3.1 (“The focus of this RFA is to fund Opioid Remediation activities via the State Allocation and the State Discretionary Abatement Sub Fund under the National Settlement Agreement”), 3.2.2.6 (“The Grantee will … not [be] permitted to use funds under this program … [t]o supplant existing local, state, or federal funding” and “[a]pplicants may not use grant funds to supplant or supplement Medicaid funding for billable services”). Maryland Department of Health. June 26, 2024 (download “MDH BHA Opioid Restitution Fund Announcement.pdf” under “Attachments”). The call for proposals for FY2025 competitive grants also reiterates this prohibition, though it is unclear whether these grants are funded with opioid settlement monies. FY2025 Call for Proposals: Competitive Grant Program (“Funding Specifications”). Maryland’s Office of Overdose Response. January 9, 2023 (“Grantees are not permitted to use funds under this program … to supplant existing local, state, or federal funding”). See also FY2025 Call for Proposals: Competitive Grant Program, Exhibit 1 Grant Agreement, Sec. 5.C (“Grantees shall not use funds for the … [s]upplanting of existing local or federal funds activities described in this program. Supplanting is the use of MOOR grant funds to replace local or federal funds which were previously appropriated/budgeted for, or otherwise would have been spent on, the specific purpose(s) for which this award has been awarded. Any salaries, positions, personnel expenses, contractual expenses, equipment, travel, and other expenses paid for with MOOR grant funds must be used to supplement your organization's existing budget, and may not replace any funds that were already included in your entity's existing or projected budget“). ↑
Md. Health-General Code Ann. Sec. 7.5-905(b)(2). ↑
Md. State Finance and Procurement Code Ann. Sec. 7-331(j)(3). ↑
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