25% Local Share
Where do these monies live?
This share is distributed directly to towns, cities, and counties according to Exhibit G of Maryland’s State-Subdivision Agreement, and each locality must establish a separate fund to hold its opioid settlement proceeds separate from other local government monies.[1]
What can this share be spent on?
With limited exceptions,[2] Maryland’s local share must be spent on the permitted uses described in the national settlement agreement’s (non-exhaustive) Exhibit E,[3] which includes prevention, harm reduction, treatment, recovery, and other strategies.
Excepting proceeds from Maryland’s Walgreens settlement, which limits reimbursement uses to 5%,[4] up to 60% of the local share (15% of statewide funds overall) may be used to reimburse past abatement expenditures.[5] The remaining must be spent only on forward-looking opioid remediation uses.[6]
Who ultimately decides how to spend this share (and how)?
State guides, localities decide. Decisionmakers for the towns, cities, and counties will ultimately decide for themselves how to spend their monies on permitted uses using non-binding recommendations from the state.[7] Counties must confer with their municipalities and the state on their planned uses of settlement monies,[8] but each locality has final say on its expenditures.[9]
Are supplantation uses prohibited for this share?
No, supplantation is not prohibited. Maryland does not explicitly prohibit supplantation uses of opioid settlement funds from its local share. This means that cities, counties, and towns may spend their monies from this share in ways that replace (or “supplant”) — rather than supplement — existing resources.
Can I see how this share has been spent?
Up to each locality (neither public nor intrastate reporting required). Though opioid settlement expenditures are not officially published in a centralized location for this share, legislation approved by the Governor in May 2024 requires the Maryland Department of Health to “examine and report … on the best process for making all of the expenditures of all opioid settlement agreements entered into by the State, counties, and municipal governments accessible to the public.”[10] The Department of Health must submit this report to the Maryland General Assembly by December 1, 2024.[11]
Visit OpioidSettlementTracker.com’s Expenditure Report Tracker for an updated collection of states’ and localities’ available expenditure reports.
What else should I know?
Excepting Walmart,[12] Baltimore City is not participating in most of Maryland’s statewide settlements and has opted to instead to pursue its own litigation against certain opioid corporations.[13] However, the state provides that “non-government organizations that operate in Baltimore City [are] eligible to receive State Discretionary Abatement Funds and funds from the State Allocation for eligible uses.”[14]
Citations
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. IV(a)(3) (“The Settlement Fund Administrator shall allocate 25 percent of all Annual Payments to the Subdivision Fund for distribution directly to the Local Abatement Funds established by participating Qualifying Exhibit G Subdivisions”), I(l) (defining “Qualifying Exhibit G Subdivision to mean “a subdivision listed on Exhibit G of the National Settlement Agreement that is not a Special District”). 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). ↑
See, e.g., 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”). ↑
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”), III(a) (requiring all settlement funds be used for “Permitted Uses”); 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 (“Funding under this agreement must comport with Exhibit E of the national settlement”). ↑
2023 Maryland State-Subdivision Agreement, Sec. II(d). ↑
2022 Maryland State-Subdivision Agreement, Secs. III(a) (requiring all settlement funds be used for “Permitted Uses that serve the purpose of Future Opioid Remediation” unless otherwise authorized), III(b) (providing that subdivisions receiving funds from the 25% local share “may use up to 15 percent [of total funds] to pay for past Opioid Remediation consistent with Permitted Uses”), IV(a)(3) (providing that localities may use up to 60% of their local share, which is “15 percent of all Base Payments and Incentive Payments overall[,] … for purposes other than Future Opioid Remediation”); 2023 Maryland State-Subdivision Agreement, Sec. II(d) (replacing Sec. III(b) of the 2022 State-Subdivision Agreement to specify that “[t]he State, and any Subdivision receiving settlement proceeds [from the local share], may use up to 15 percent received from the Walmart Agreement, the Teva Agreement, and/or the Allergan Agreement to pay for opioids-related measures (including past Opioid Remediation” and “up to 5 percent received from the Walgreens Agreement to pay for opioids-related measures (including past Opioid Remediation)”). ↑
2022 Maryland State-Subdivision Agreement, Secs. IV(b) (“each year, no later than 180 days before an Annual Payment is due, the Secretary shall provide nonbinding recommendations for County and Municipal Subdivision expenditure of Settlement Proceeds that, in the Secretary’s judgment, will serve an efficient and effective program of Future Opioid Remediation across Maryland”), I(r) (defining “Secretary” to mean the Secretary of Health), 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, Sec. IV(b) (providing that a county “shall meet with representatives from the Municipal Subdivisions that are located within the County and that receive Settlement Proceeds under this Agreement, plus any other Municipal Subdivisions that [are not receiving settlement funds but] express interest in a meeting and are located within the County, together with the Secretary or the Secretary’s designee”) (emphasis added); 2023 Maryland State-Subdivision Agreement, Sec. I (applying terms to later settlements). ↑
2022 Maryland State-Subdivision Agreement, Sec. IV(b) (“In the event of disagreement, the ultimate use of specific Settlement Proceeds shall be determined by the Subdivision that has been granted them in a manner consistent with the other provisions of this Agreement and applicable law”); 2023 Maryland State-Subdivision Agreement, Sec. I (applying terms to later settlements). ↑
2024 MD Laws Ch. 852, Sec. 2. ↑
2024 MD Laws Ch. 852, Sec. 2. ↑
See City of Baltimore Joins Settlement in Walmart Opioid Suits. Baltimore City Mayor press release. February 29, 2024. Accessed August 27, 2024; Baltimore City Executive Order – Administration of Baltimore City Opioid Restitution Funds. August 29, 2024. Accessed September 4, 2024. ↑
See OpioidSettlementTracker.com’s Global Settlement Tracker. ↑
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 (“Baltimore City is pursuing independent litigation against Johnson & Johnson and is not eligible to receive funding through Maryland’s settlement agreement”). ↑
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