55% Local Share
Where do these monies live?
This share is distributed to participating cities and counties according to Exhibit A of Oregon’s state-local agreement.[1] Unless a city opts to receive its monies directly, this share is distributed to its county.[2]
Note: This 55% allocation to localities applies to the grand majority, but not all, of Oregon’s opioid settlements.[3]
What can this share be spent on?
Excepting administrative expenses and attorneys’ fees,[4] this share must be spent on the uses described in the national settlement agreement’s (non-exhaustive) Exhibit E,[5] which includes prevention, harm reduction, treatment, recovery, and other strategies.
Who ultimately decides how to spend this share (and how)?
Local governments decide autonomously. Decisionmakers for the counties and cities will ultimately decide for themselves how to spend their monies on Exhibit E uses.[6] Any amounts not spent or committed within five years of receipt are transferred to the Opioid Settlement Prevention, Treatment and Recovery Fund.[7]
Is this share attached to an explicit bar against supplantation?
No, supplantation is not prohibited. Like most states, Oregon does not explicitly prohibit supplantation uses of its opioid settlement funds. This means that the 55% local share may be spent in ways that replace (or “supplant”) — rather than supplement — existing resources.
Can I see how this share has been spent?
Yes (public reporting required). View the state’s annual reports on the OHA’s Oregon Opioid Settlement Funds page.[8] Localities must report on their expenditures to the state each year,[9] and the state must publish an annual report on use of settlement funds statewide, including the 55% local share.[10]
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
State of Oregon Subdivision Agreement Regarding Distribution and Use of Settlement Funds (Agreement) 4(a) (“55% of the Oregon Settlement Funds shall be allocated to the OR Participating Subdivisions”) and 4(c)(i) (“The percentage for each OR Participating Subdivision is set forth in Exhibit A in the column entitled ‘Abatement Percentage’ (the ‘Local Allocation’). For the avoidance of doubt, non-litigating Oregon towns, cities, and counties with a population less than 10,000 are not eligible to receive an allocation of OR Subdivision Funds”). The City of Portland automatically receives direct payment. Agreement 4(c)(iv). See also Oregon Supplement to Statement Allocation Agreement under the Mallinckrodt PLC, et al. Bankruptcy an Additional Settling Company Agreements (Supplement) 4(b) (“Fifty Five percent (55%) of total Additional Settlement Funds paid to Oregon will be allocated to OR Participating Subdivisions”). ↑
Agreement 4(c)(iii). “During [Fiscal Year 2022-2023], nine cities that were otherwise eligible to receive funds chose to reallocate their direct funds to their respective counties: Astoria, Central Point, Cornelius, Happy Valley, Hillsboro, Klamath Falls, Prineville, Redmond and Tigard.” Oregon Opioid Settlement Spending Report (FY 2022-2023). OHA. April 2024. Accessed September 1, 2024. ↑
See Oregon Opioid Settlement Funds. Oregon Health Authority (OHA). Accessed August 24, 2024 (describing Publicis and “[a]dditional restitution funds from Oregon Department of Justice” as “not subject to 55/45% split with subdivisions”). However, the state-local agreement and its subsequent supplement encompass most of Oregon’s opioid settlement funds. ↑
Agreement 4(d)(i) (“The OR Participating Subdivisions will establish an Oregon attorney fee back-stop fund (the ‘OR Back-Stop Fund’). The OR Back-Stop Fund will be funded by and deducted from OR Subdivision Funds prior to the distribution of any Local Allocation share to any OR Participating Subdivisions, shall be equal to no more than $2,500,000, and may be used only to pay the contingency fees due to Contingency Fee Counsel of the Litigating Local Governments”) and Agreement 4(e)(i) (capping administrative expenses at 5%). See also Supplement 5(a)(i) (imposing a 5% cap on administrative expenditures from the Mallinckrodt bankruptcy). Note: The carveouts for administrative spending and attorneys’ fees do not apply in the same way to monies received from the Mallinckrodt bankruptcy and other settlement agreements. Supplement 5(a)(ii) (prohibiting the use of funds from the Mallinckrodt bankruptcy for attorneys’ fees). Monies received by Oregon localities from the settlements with Allergan, CVS, Teva, Walgreens, and Walmart may not be spent on administrative costs or attorneys’ fees. Supplement 5(b)(i)-(ii). ↑
Agreement 4(c)(vii) (“Except as set forth in Sections 4.d [Provision for State Back-Stop Agreement] and 4.e [“Additional Costs”], Settlement Funds received by an OR Participating Subdivision shall be used for Approved Abatement Uses”), Agreement 2(e) (defining “Approved Abatement Uses” to mean “Opioid Remediation activities described in Exhibits E to the Distributor and Janssen Agreements”), and 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”). For example, the city of Salem plans to “use around $650,000 in opioid settlement money to avoid cutting services for addressing youth outreach and homelessness.” Joe Siess. Salem will continue youth, homeless outreach programs using opioid settlement money. Salem Reporter. July 13, 2024. Accessed August 24, 2024. ↑
Agreement 4(c)(ix). See also July 2023 Opioid Settlement Prevention, Treatment, and Recovery Update. OHA. July 2023. Accessed August 24, 2024 (“OHA is not overseeing local funds and cannot provide advice on how the funds should be spent”); Oregon Opioid Settlement Spending Report (FY 2022-2023). OHA. April 2024. Accessed September 1, 2024. (“Subdivisions will decide how their funds are used. These jurisdictions are required to report to the Oregon Department of Justice (DOJ) annually on how they have allocated their funds”); and Frequently Asked Questions: Oregon Opioid Settlement Funds. OHA. Updated April 16, 2024. Accessed August 24, 2024. (“Cities and counties will decide how their funds are used”; “All local allocation decisions are made locally”). ↑
Agreement 4(c)(vi). However, funds designated to support capital outlay projects must be expended or encumbered within seven years of receipt before they are transferred to the state. See also Supplement 4(b) (“Additional Settlement Funds allocated to OR Participating Subdivisions, whether NOAT II Funds or Additional Company Settlement Funds, shall be distributed to OR Participating Subdivisions in the same proportion and manner as OR Subdivision Funds are distributed under the Section 4(c) of the OSA).” ↑
See, e.g., Oregon Opioid Settlement Spending Report (FY 2022-2023) (hyperlinked as “Opioid Settlement Report ’22-‘23” on the OHA’s website). ↑
Agreement 5(a) (“Prior to September 1 of each year each OR Participating Subdivision … shall deliver an annual report to the Oregon Department of Justice … regarding how it expended OR Subdivision Funds during the prior fiscal year (July 1 - June 30)”). ↑
Agreement 5(d). See also Supplement 5(c) (applying Sections 5 (reporting and oversight) and 6 (audit) from the original state-local agreement to additional settlement funds). ↑
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