19-49% Discretionary Subfund Share
Where do these monies live?
South Carolina’s greater Opioid Recovery Fund is divided into two subfunds:[1] the Guaranteed Political Subdivision Subfund (GPSS) and Discretionary Subfund.[2]
The Discretionary Subfund holds 19% of the greater Recovery Fund through 2025.[3] From 2026-29, the Discretionary Subfund will hold 20%;[4] from 2030 onward, 49%.[5]
Non-participating subdivisions’ amounts are held in the Discretionary Subfund.[6] Participating counties and municipalities may optionally transfer their GPSS shares to the Discretionary Subfund, and any of their unused GPSS funds are transferred to the Discretionary Subfund after three years.[7]
What can this share be spent on?
Excepting up to 18% for attorneys’ fees,[8] plus other limited exceptions,[9] this share must be spent on Approved Abatement Strategies in Exhibit C of South Carolina’s state-local agreement,[10] which mirrors the national settlement agreements’ (non-exhaustive) Exhibit E and includes prevention, harm reduction, treatment, recovery, and other strategies.
The South Carolina Opioid Recovery Fund’s website breaks out approved uses by “Core Abatement Strategies” and “Approved Uses” here.
Who ultimately decides how to spend this share (and how)?
South Carolina Opioid Recovery Fund Board decides. The South Carolina Opioid Recovery Fund (SCORF) Board, an “independent, quasi-governmental agency,” is responsible for statewide distribution of the South Carolina Opioid Recovery Fund as a whole, including the Discretionary Subfund share.[11]
The Board exercises substantial discretion over the Discretionary Subfund and ultimately decides who may seek funding from this share.[12] As of September 1, 2024, the Board’s website listed the following entities as eligible to apply for monies from the Discretionary Subfund: state agencies, local governments, medical and mental health treatment providers, educational providers, non-profits, and “others helping to address the opioid epidemic.”[13]
The Board must ensure that funding is not only sought for approved abatement strategies,[14] but also that the request is, “in the judgment and discretion of the board, an appropriate, reasonable, and merited use of funds to help address issues caused by opioids.”[15]
In evaluating funding requests, the Board must consider a non-exhaustive list of criteria, including whether the proposal is regional or otherwise cooperative in nature, the “poverty level” of the area, the amount of direct payments received by municipalities within a county, and other unique abatement needs.[16] The Board is also free to develop additional criteria for evaluating funding requests.[17]
Upon approval, the Board authorizes payments from the Discretionary Subfund to the requesting entity.[18] Each of the whom is subject to the Board’s oversight and inspection to ensure that funds are only spent on approved purposes.[19] The Board is not required to explain why it rejected a request for funds, and its decisions are not subject to appeal or judicial review.[20]
Is this share attached to an explicit bar against supplantation?
Yes, supplantation is prohibited. The South Carolina Opioid Recovery Fund (SCORF) Board’s List of Prohibited Items for Funding states that “[m]oney in the Opioid Funds may not be used to replace existing state or local government funding.”[21] The SCORF Board’s website reiterates the prohibition of supplantation uses of SC Opioid Recovery Fund and adds “federal funds” as a source of monies that cannot be replaced.[22] Additionally, the SCORF Board’s technical proposal requirements provide that an application for monies from the Discretionary Subfund must describe how the proposal “will not be duplicative or will substantially expand existing efforts."[23]
Can I see how this share has been spent?
Yes (public reporting required). The SCORF Board is required to annually publish a report of all funds spent from the South Carlina Opioid Recovery Fund, including the Discretionary Subfund share.[24] View its annual reports here.
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
For clarity, this Guide will treat the state’s “Administrative Subfund,” which holds a static 2%, as an administrative set-aside. South Carolina Opioid Settlement Allocation Agreement (Agreement) II.5(a)-(d) (“two percent (2%) to the Administrative Subfund”). See next section for more. ↑
S.C. Code Ann. Sec. 11-58-40(A) (“The State Treasurer shall establish the Discretionary Subfund within the South Carolina Opioid Recovery Fund”) and Sec. 11-58-50(A) (“The State Treasurer shall establish the Guaranteed Political Subdivision Subfund within the South Carolina Opioid Recovery Fund”). See also Agreement II.5 (“The South Carolina Opioid Recovery Fund shall be divided into the Guaranteed Political Subdivision Subfund and the Discretionary Subfund”). ↑
Agreement II.5(b) (“For Opioid Settlement Funds paid by a Pharmaceutical Supply Chain Participant in 2023 through 2025, seventy-nine percent (79%) to the Guaranteed Political Subdivision Subfund, nineteen percent (19%) to the Discretionary Subfund, and two percent (2%) to the Administrative Subfund”). ↑
Agreement II.5(c) (“For Opioid Settlement Funds paid by a Pharmaceutical Supply Chain Participant in 2026 through 2029, seventy-eight percent (78%) to the Guaranteed Political Subdivision Subfund, twenty percent (20%) to the Discretionary Subfund, and two percent (2%) to the Administrative Subfund”). ↑
Agreement II.5(d) (“For Opioid Settlement Funds paid by a Pharmaceutical Supply Chain Participant in 2030 or thereafter, forty-nine percent (49%) to the Guaranteed Political Subdivision Subfund, forty-nine percent (49%) to the Discretionary Subfund, and two percent (2%) to the Administrative Subfund”). See also Agreement II.8(a)-(c) (describing separate allocation of “Additional Restitution Amount” and “Additional Remediation Amount,” which are “paid to the State … in lieu of attorneys’ fees”). ↑
Agreement Exhibit A II.A (“To the extent a Political Subdivision does not participate in an Opioid-Related Settlement, the Board shall transfer the share assigned to that Political Subdivision to the Discretionary Subfund”; “a Political Subdivision’s available allocation shall be calculated based only on the Opioid-Related Settlements in which that Political Subdivision participates”). See also Annual Report (January 1, 2023 – December 31, 2023) (“While thirty-four counties and municipalities submitted requests to the SCORF Board for opioid recovery funds during 2023, the SCORF Board looks forward to the nonparticipating subdivisions accessing funds in 2024. SCORF Board staff will target outreach to these nonparticipating subdivisions”). SCORF Board. Accessed September 1, 2024. ↑
Agreement Exhibit A II.A (“Any money allocated to a Political Subdivision in a given year which is unused at the end of that year will remain available to that Political Subdivision for three (3) additional years, after which the money shall be moved to the Discretionary Subfund. A Political Subdivision can elect to have some or its entire allocated share transferred to the Discretionary Subfund by informing the Board in writing of this election”). See also South Carolina’s Guide to Approved Uses for Investing Opioid Settlement Funds. South Carolina Department of Alcohol and other Drug Abuse Services (DAODAS) and South Carolina Institute of Medicine and Public Health. June 2022. Accessed August 25, 2024 (“All money allocated to counties and eligible municipalities that has not been used for three years will be moved to the Discretionary Subfund, from which any person or entity can request funding for approved abatement strategies"). ↑
Agreement II.4(a)-(b) (describing tiered allocation system by which the greater South Carolina Opioid Recovery Fund receives 82% of the state’s opioid litigation proceeds from 2021-22, 87.89% from 2023-29, and 100% in 2030 and thereafter, with the remaining transferred to the “South Carolina Opioid Fee Fund for the payment of attorney’s fees and unreimbursed expenses of outside counsel for the State and the Political Subdivisions”). See also Agreement III.5 (“In no event shall total attorney’s fees paid to counsel for the Litigating Political Subdivisions and the State from Opioid Settlement Funds, exclusive of funds received from any National Fund, exceed eight percent (8%) of the Opioid Settlement Funds”). ↑
S.C. Code Ann. Sec. 11-58-30(C) (up to 2% allocation to Administrative Subfund), Sec. 11-58-60(B) (“Funds allocated to the Administrative Subfund by the South Carolina Opioid Recovery Fund Board may be expended by the board and the State Fiscal Accountability Authority to pay for the costs associated with administering this chapter, in accordance with a budget adopted or amended pursuant to Section 11-58-80(E)”), and Sec. 11-58-80(E) (requiring budgeting for and publication of administrative expenses by the South Carolina Opioid Recovery Fund Board); See also Agreement II.5(a)-(d) (allocating 2% of the greater Recovery Fund for the Administrative Subfund”) and Agreement Exhibit A I.D (“These costs and expenses include educational activities, staff and equipment costs, as well as costs associated with developing a grant application process, transferring funds to grant recipients, reviewing grant submissions, publishing information to the public, and reporting as required under the Opioid-Related Settlements. This amount may also be used to reimburse Board members for reasonable costs and expenses associated with travel necessary to attend Board meetings and perform Board duties. A member of the Board may be reimbursed for actual expenses for meals, lodging, transportation, and incidental expenses in accordance with travel rates set by the South Carolina Comptroller General. The Board shall prepare an annual budget for administration costs and expenses to ensure proposed expenditures fall within these parameters and publish an annual report on these expenditures”). ↑
S.C. Code Ann. Sec. 11-58-20(2) (“‘Approved abatement strategies’ means those measures to address and remediate opioid-related issues that are set forth in opioid-related settlements between the State of South Carolina, its participating political subdivisions, and certain companies that market, promote, distribute, dispense, or supply opioids and incorporated herein”) and
Sec. 11-58-30(C) (“All funds in the South Carolina Opioid Recovery Fund must be spent on approved abatement strategies”). See Agreement I.3 (“‘Approved Abatement Strategy(ies)’ shall mean those uses identified in Exhibit C hereto”) and Agreement Exhibit A II.B (“The Board will use the Approved Abatement Strategies listed in Exhibit C for considering applications for funding from the Discretionary Subfund. The Board shall not approve any funding request unless it is for an Approved Abatement Strategy”). ↑
Agreement Exhibit A I.C(1) (“The Board is an independent, quasi-governmental agency responsible for the statewide distribution of the South Carolina Opioid Recovery Fund”). ↑
Agreement Ex. A II.B (“Unlike the Guaranteed Political Subdivision Subfund, requests for funding from the Discretionary Subfund need not be made by a Political Subdivision or on its behalf. By way of examples only, requests for funding from the Discretionary Subfund could be made by state agencies, medical treatment providers, mental health treatment providers, educational providers, legal services providers, researchers, nonprofits, and any other person or entity for an Approved Abatement Strategy, subject to the Board’s eligibility requirements”). ↑
Apply for Opioid Recovery Funds (see “Eligibility for Funding”). South Carolina Opioid Recovery Fund (SCORF) Board. Accessed August 25, 2024. ↑
S.C. Code Ann. Sec. 11-58-40(B)(2) (“The South Carolina Opioid Recovery Fund Board may authorize payments from the Discretionary Subfund to requesting entities, if … the request is for an approved abatement strategy) and Agreement Exhibit A II.B (“The Board shall not approve any funding request unless it is for an Approved Abatement Strategy”). ↑
S.C. Code Ann. Sec. 11-58-40(B)(4). ↑
S.C. Code Ann. Sec. 11-58-40(C). ↑
S.C. Code Ann. Sec. 11-58-40(B) (“The South Carolina Opioid Recovery Fund Board may authorize payments from the Discretionary Subfund to requesting entities, if all of the following requirements are met”). ↑
S.C. Code Ann. Sec. 11-58-70(Q) (“The board has the duty and authority to regulate the expenditure by requesting entities of authorized payments from the Discretionary Subfund to ensure authorized payments are used only for approved purposes, to facilitate accountability for their use, and to prevent fraud, waste, abuse, mismanagement, and misconduct”), Sec. 11-58-70(R) (“The board may enter assistance agreements with each requesting entity approved to receive authorized payments from the Discretionary Subfund. These agreements are enforceable. Without limitation, such agreements may impose restrictions on the appropriate use of payments and penalties for the misuse of such payments. In addition, such agreements may impose payment, purchasing, accounting, auditing, record keeping, performance and financial reporting, and compliance requirements. Without limitation, the application requirements adopted by the board may include the acceptance of such agreements by the requesting entity. The board may inspect, audit, and examine any requesting entity receiving authorized payments from the Discretionary Subfund”) (emphasis added). ↑
S.C. Code Ann. Sec. 11-58-40(C)-(D). ↑
List of Prohibited Items for Funding. SCORF Board. SCORF Board website. Accessed September 1, 2024. ↑
Apply for Opioid Recovery Funds (see “Eligibility for Funding”). SCORF Board website. Accessed September 1, 2024 (“Requests for funds from the SC Opioid Recovery Fund cannot be for purposes of supplanting —replacing/take the place of — existing local, state or federal funds for a project and its activities"). The Opioid Recovery Fund is inclusive of both the Discretionary Subfund and the Guaranteed Political Subdivision Subfund. See S.C. Code Ann. Secs. 11-58-40 and 11-58-50. ↑
Technical Proposal Requirements. SCORF Board. Accessed September 1, 2024. ↑
S.C. Code Ann. Sec. 11-58-70(J). ↑
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