50% State Share
Where do these monies live?
The Opioid Healing and Recovery Fund (“Recovery Fund”) holds the state’s 50% share of opioid settlement funds.[1]
What can this share be spent on?
With limited exceptions,[2] monies in the Recovery Fund must be spent on the opioid remediation uses described in the national settlement agreement’s (non-exhaustive) Exhibit E,[3] which includes prevention, harm reduction, treatment, recovery, and other strategies.
Who ultimately decides how to spend this share (and how)?
Opioid Advisory Commission recommends, state legislature appropriates, Michigan Department of Health and Human Services decides (within parameters established by the Michigan state legislature). The Michigan state legislature ultimately appropriates monies from the Recovery Fund,[4] with the Opioid Advisory Commission (OAC) providing non-binding recommendations.[5] In practice, Recovery Fund expenditures are determined by a complicated network of “key agencies,” including Michigan’s state legislature, the governor’s office, the Department of Health and Human Services (MDHHS), the OAC, and the Opioids Task Force, among others.[6]
MDHHS has previously described a decision-making process in which it drafted a spend plan, sought and incorporated community and partner feedback, and reached internal consensus on which subset of Exhibit E interventions to prioritize,[7] with the legislature ultimately appropriating funds after consulting the recommendations of the Opioid Advisory Commission.[8]
In past years, the legislature appropriated significant sums from the Recovery Fund to state departments, primarily MDHHS, and largely deferred to those departments on how to spend the funds.[9] The most recent FY2025 budget, however, includes both funding over which MDHHS maintains significant discretion and more targeted expenditures with varying levels of specificity from the state legislature.[10]
Please note: The OAC is different from the Michigan Opioids Task Force. The OAC was established via legislation, exists within the Michigan Legislative Council, and primarily advises the state legislature.[11] In contrast, the Michigan Opioids Task Force was established by executive order, operates as an advisory body within MDHHS, and primarily advises state departments.[12]
Are supplantation uses prohibited for this share?
Yes, supplantation is prohibited. The Michigan Opioid Healing and Recovery Fund, which holds the 50% state share, is explicitly required by state law to “be used to create or supplement programs or services” and explicitly prohibited from being “used to replace any other governmental funds that would otherwise have been appropriated or expended for any other program or service.”[13]
Can I see how this share has been spent?
Yes (no public reporting required, only intrastate). Visit Michigan’s Settlement Spending page, which includes a summary of initiatives funded with state settlement monies and annual reports. Annual financial reports are organized according to the subsets of Exhibit E categories prioritized by MDDHS each year (e.g., primary prevention, harm reduction, treatment, recovery support).[14]
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
Michigan State-Subdivision Agreement for Allocation of Distributor Settlement Agreement and Janssen Settlement Agreement (“Michigan Distributor and Janssen State-Subdivision Agreement”), Sec. II.3; Michigan State-Subdivision Agreement for Allocation of Allergan, Teva, CVS, Walmart, and Walgreens Settlement Agreements (“Michigan Subsequent Settlement State-Subdivision Agreement”), Sec. II.3; Mich. Comp. Laws Serv. Secs. 12.253(1)-(2). See also 2023 Annual Report: A Planning Guide for State Policy Makers. Michigan Opioid Advisory Committee. Accessed August 19, 2024 (noting that the State Share includes 100% of proceeds from the McKinsey settlement). ↑
Mich. Comp. Laws Serv. Sec. 12.253(8) (authorizing use of monies from the Opioid Healing and Recovery Fund for opioid-litigation costs and attorney fees). ↑
Mich. Comp. Laws Serv. Sec. 12.253(6) (“the department of treasury shall expend money from the Michigan opioid healing and recovery fund, on appropriation, in a manner and for purposes consistent with the opioid judgment, settlement, or compromise of claims from which the money was received”); Michigan Distributor and Janssen State-Subdivision Agreement, Secs. I.P (“‘Opioid Remediation’ is the term as defined by the Settlements”), II.2 (“All Settlement Payments shall be utilized by Participating Local Governments and the State for Opioid Remediation, except as otherwise allowed by the Settlements. A minimum of 70% of Settlement Payments must be used solely for future Opioid Remediation”); Michigan Subsequent Settlement State-Subdivision Agreement, Secs. I.O, II.2 (same). Note that non-opioid remediation expenditures are capped under the national settlement agreements. See, e.g., the Distributor and Janssen settlements, Secs. V.B.1, V.B.2 (requiring states and subdivisions to spend a minimum 85% of funds on opioid remediation, which the settlements define to mean Exhibit E); 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). 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”). See also Michigan’s Opioid Settlements Frequently Asked Questions. Resources for the Michigan Opioid Settlement. Accessed August 19, 2024 (“Exception: Specific to the Mallinckrodt settlement, Schedule A provides a list of allowable uses of funds”). ↑
Mich. Comp. Laws Serv. 12.253(6). ↑
Mich. Comp. Laws Serv. 4.1851(13)(c)(iv). See also 2023 MDHHS Opioid Annual Report. Michigan Department of Health and Human Services. Accessed August 20, 2024 (“The OAC’s role is advisory”). ↑
OAC: 2023 Annual Report (“A Planning Guide for State Policy Makers”) (“final spending authority [resides] with legislative appropriation, attorneys general, the Department of Health, or the state agencies responsible for substance use services”). ↑
See, e.g., Opioid Strategy and Implementation of Opioid Settlements, slide 12 (“Opioid Settlements Spend Plan Development”). Natasha Bagdasarian and Jared Welehodsky, Michigan Department of Health and Human Services. Undated presentation. Accessed August 20, 2024. See also 2023 Michigan Opioid Healing and Recovery Fund Annual Financial Report. Michigan Department of Health and Human Services. November 15, 2023. Accessed August 20, 2024; 2024 Michigan Opioid Healing and Recovery Fund Annual Financial Report. Michigan Department of Health and Human Services. March 31, 2023. Accessed August 20, 2024; Dr. Natasha Bagdasarian and Amy Epkey. Fiscal Year 2025 Opioid Settlement Budget. Michigan Department of Health and Human Services. February 28, 2024. Accessed August 20, 2024. ↑
Mich. Comp. Laws Serv. Secs. 4.1851(13)(a)-(c); Opioid Advisory Commission. Michigan Legislative Council. Accessed September 1, 2024 (“The commission makes an annual report to the Governor, the Attorney General, the Senate Majority Leader, the Speaker of the House, and the chairs of the Senate and House appropriation committees”). ↑
See, e.g., 2022 Mich. Pub. Acts 166, Sec. 917(1) (appropriating $23.2 million to MDHHS from the Opioid Healing and Recovery Fund “to create or supplement opioid-related programs and services in a manner consistent with the opioid judgement, settlement, or compromise of claims pertaining to violations, or alleged violations, of law related to the manufacture, marketing, distribution, dispensing, or sale of opioids”); 2023 Mich. Pub. Acts 119, Sec. 917(1) (same). See also, e.g., Michigan’s Opioids Settlement – MDHHS FY23 Spend Plan Programming Planning Overview. Michigan Department of Health and Human Services. Undated document. Accessed August 20, 2024 (“In July 2022, the Michigan Legislature approved the Opioid Healing and Recovery Fund (settlement funds) appropriation of the FY 22 supplemental request ($16 million) and FY 23 authorization ($23.2 million) to MDHHS without restrictions”). ↑
See 2024 Mich. Pub. Acts 121, Secs. 917(1) (appropriating approximately $19.2 million for MDHHS “to create or supplement opioid-related programs and services in a manner consistent with the opioid judgment, settlement, or compromise of claims pertaining to violations, or alleged violations, of law related to the manufacture, marketing, distribution, dispensing, or sale of opioids”), 917(2) (requiring MDHHS to allocate $4 million “to establish a peer recovery support services program for eligible participants”), 1930(a)-(d) (requiring MDHHS to allocate grants ranging from $2 to $3.62 million to organizations meeting very specific criteria such as “a nonprofit organization that is organized under the laws of this state, that is exempt from federal income tax under section 501(c)(3) of the internal revenue code of 1986, 26 USC 501, and is located in a city with a population greater than 10,000 that is located in a county with a population between 36,500 and 36,850, according to the most recent federal decennial census, to expand a women’s recovery center that provides residential substance use disorder services, behavioral and physical health care, social services, and housing assistance”), 1930(e) (requiring MDHHS to provide $1.88 million “to supplement grants to recovery community organizations”), 1930(f) (requiring MDHHS to provide $2 million for “tribal communities, with the distribution method and types of uses of these funds determined in collaboration with the United Tribes of Michigan and each sovereign nation”), 1930(g) (requiring MDDHS to provide $10 million “to department-designated community mental health entities for regional specific programming and supports to be used in collaboration with municipal opioid settlement funds”). ↑
Mich. Comp. Laws Serv. Secs. 4.1851(1), (13)(b). Note, however, that the OAC’s annual report is submitted to both the legislature and state executive branch. Mich. Comp. Laws Serv. Sec. 4.1851(13)(c) (“By March 30 of each year, provide a written report to the governor, the attorney general, the senate majority leader, the speaker of the house of representatives, and the chairs of the senate and house of representatives appropriations committees”). ↑
Michigan Executive Order 2022-12, Secs. 1(a), 2(b); 2023 MDHHS Opioid Annual Report. Michigan Department of Health and Human Services. Accessed August 20, 2024 (“The OAC is a legislative commission, whereas the Executive branch called for the formation of the Michigan Opioids Task Force. The OAC is tasked to review initiatives/activities related to SUD services and establish priorities to address SUD/co-occurring conditions for purpose of recommending funding initiatives to the legislature. The Michigan Opioids Task Force is charged with identifying root causes of the opioid epidemic and implementing response actions. The OAC reports to the Legislative Council Administrator and overall purpose is to advise the legislature, whereas the Michigan Opioids Task Force reports to MDHHS. The OAC’s role is advisory. The Michigan Opioids Task Force will be required to report to the Governor regularly and will be expected to issue an annual report”). ↑
Mich. Comp. Laws Serv. Sec. 12-253(7). ↑
See, e.g., 2023 Michigan Opioid Healing and Recovery Fund Annual Financial Report. Michigan Department of Health and Human Services. November 15, 2023. Accessed August 20, 2024; 2024 Michigan Opioid Healing and Recovery Fund Annual Financial Report. Michigan Department of Health and Human Services. March 31, 2023. Accessed August 20, 2024; Dr. Natasha Bagdasarian and Amy Epkey. Fiscal Year 2025 Opioid Settlement Budget. Michigan Department of Health and Human Services. February 28, 2024. Accessed August 20, 2024. ↑
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