49-79% Guaranteed Political Subdivision 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 GPSS holds 79% of the greater Recovery Fund through 2025.[3] From 2026-29, the GPSS will hold 78%;[4] from 2030 onward, 49%.[5]
The GPSS is annually allocated to 91 participating counties and municipalities according to Exhibit B of South Carolina’s state-local agreement,[6] with non-participating subdivisions’ amounts transferred to the Discretionary Subfund.[7] Entities approved by participating counties and municipalities may also apply for GPSS funds.[8]
Participating localities may transfer their shares to the Discretionary Subfund, and any unused GPSS funds are transferred to the Discretionary Subfund after three years.[9]
What can this share be spent on?
Excepting up to 18% for attorneys’ fees,[10] plus other limited exceptions,[11] this share must be spent on Approved Abatement Strategies in Exhibit C of South Carolina’s state-local agreement,[12] 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)?
Local governments decide, South Carolina Opioid Recovery Fund Board disburses. 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 GPSS share.[13] However, its duties and roles vis-à-vis the GPSS are ministerial only and not discretionary:[14] only subdivisions and their approved entities may apply to receive GPSS funds,[15] and the Board is required to approve their applications if the request conforms with the Board’s application requirements and if funding is sought for approved abatement strategies.[16]
The SCORF Board must approve or reject GPSS funding applications within 60 days or at its next meeting (“whichever period is longer”), then direct funds as requested by the county or municipality upon approval.[17] When the Board denies a request from a county or municipality, it must promptly explain its reasoning.[18]
If a locality does not spend allocated funds within three years, the funds will be transferred to the Discretionary Subfund described in the next section.[19] Localities are encouraged to apply for funding from the Discretionary Subfund to supplement their projects supported by GPSS funds.[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 on supplantation uses of SC Opioid Recovery Fund and adds “federal funds” as a source of monies that cannot be replaced.[22]
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 Carolina Opioid Recovery Fund, including the GPSS share.[23] 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?
In May 2023, the Board published a memo describing political subdivisions’ ability to submit a letter of intent (“rather than an application”) to receive $25,000 to “support the development of a community action plan.”[24]
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 I.16 (defining “Political Subdivision” to mean “any South Carolina county or municipality that participates in one or more Opioid-Related Settlements”); Agreement Exhibit A II.A (“Each Political Subdivision will be allocated funds from the Guaranteed Political Subdivision Subfund on an annual basis pursuant to the percentages in Exhibit B. However, a Political Subdivision’s available allocation shall be calculated based only on the Opioid-Related Settlements in which that Political Subdivision participates. 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”); and Annual Report (January 1, 2023 – December 31, 2023) (“The Guaranteed Political Subdivisions are comprised of ninety-one municipalities and counties”). SCORF Board. Accessed September 1, 2024. ↑
Agreement Exhibit A II.A (“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. ↑
S.C. Code Ann. Sec. 11-58-50(B)(3) and Agreement Ex. A II.A (providing that an entity may apply for GPSS funds with written authorization/approval of a political subdivision). ↑
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 I.7 (“‘Guaranteed Political Subdivision Fund’ shall mean that portion of the South Carolina Opioid Recovery Fund from which the Board will direct payments as requested by the Political Subdivisions for Approved Abatement Strategies as set forth in Exhibit A hereto”). See also
Agreement Exhibit A II.A (“Requests for funding from the Guaranteed Political Subdivision Subfund shall be approved by the Board if … [t]he request seeks funding for an Approved Abatement Strategy listed on Exhibit C”). ↑
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 Exhibit A II (“The duties and roles of the Board with respect to the Guaranteed Political Subdivision Subfund are ministerial only, and the Board has no discretion with respect to disbursing amounts allocated to the Political Subdivisions so long as the Political Subdivision’s application seeks funding for one of more of the Approved Abatement Strategies set forth in Exhibit C”). Compare S.C. Code Ann. Sec. 11-58-50(B) (“The South Carolina Opioid Recovery Fund Board shall authorize payments from the Guaranteed Political Subdivision Subfund to requesting entities, if all of the following requirements are met”) with 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”) (emphases added). ↑
S.C. Code Ann. Sec. 11-58-50(B)(3) and Agreement Exhibit A II.A (requiring funding requests to be made either by the political subdivision itself or an entity with the subdivision’s express written approval). ↑
S.C. Code Ann. Sec. 11-58-50(B)(1)-(2). See also Agreement Exhibit A II.A (“The Board shall have the mandatory ministerial obligation to distribute funds to the Political Subdivision upon receipt and review of an application that meets the requirements set forth herein”) (emphasis in original). ↑
S.C. Code Ann. Sec. 11-58-50(C) (“If the board denies a request under this section, it promptly shall notify the participating political subdivision that requested or authorized the request for funds and provide its grounds for denying the request”). ↑
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”). ↑
Agreement Exhibit A II.B (“Political Subdivisions are permitted and encouraged to seek funds from the Discretionary Subfund both for additional projects and to supplement projects funded by the Guaranteed Political Subdivision Subfund”). ↑
List of Prohibited Items for Funding. South Carolina Opioid Recovery Fund (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 Guaranteed Political Subdivision Subfund and the Discretionary Subfund. See S.C. Code Ann. Secs. 11-58-40 and 11-58-50. ↑
S.C. Code Ann. Sec. 11-58-70(J). ↑
Memorandum re: Opioid Remediation Planning Program. SCORF Board. May 26, 2023. Accessed September 1, 2024. ↑
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