Texas
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70% Opioid Abatement Fund Share

Where do these monies live?

The Opioid Abatement Trust Fund initially holds 85% of the state’s litigation proceeds.[1] After 15% is distributed to local governments,[2] the remaining 70% in the Trust Fund is allocated this way:[3]

The 84% of this share belonging to the OAFC — or 58.8% of Texas’ total statewide funds — is further broken down:[9]

  • Seventy-five percent (75%) of funds allocated to a grant cycle must be distributed among the state’s 20 healthcare partnership regions according to defined regional allocations.[10] The OAFC may reallocate monies between regions in certain circumstances.[11]

  • The remaining 25% of funds are allocated for “targeted interventions” in the regions approved by the OAFC.[12]

Note: Texas’ allocations of settlement funds between this Opioid Abatement Trust Fund and its Opioid Abatement Account (which contains a separate 15% state share) are often settlement-specific.[13] See Distribution of Opioid Settlement Proceeds for more information.

What can this share be spent on?

Aside from attorneys’ fees, administrative costs, and the set-asides for the Texas Access to Justice Foundation and hospital districts described above,[14] this share must be spent on an OAFC-approved list of uses “based on but not limited to the existing national list of abatement strategies” (i.e., Exhibit E).[15] OAFC regulations state further that in order to be eligible for funding, a strategy must be: an abatement strategy included in the national settlement agreements, supported by “evidence-based data,” and in compliance with applicable state and federal law.[16]

The OAFC’s grantmaking rules require it categorize its approved strategies into “treatment and coordination of care,” “prevention and public safety,” “recovery support services,” or “workforce development and training.”[17] The OAFC must also “rank each strategy in order of priority for grant funding,” [18] but is free to amend, recategorize, or reprioritize strategies.[19]

Who ultimately decides how to spend this share (and how)?

Texas Opioid Abatement Fund Council decides. The Texas Opioid Abatement Fund Council (OAFC) administers a grantmaking program to distribute monies from this share to abatement strategies.[20] The OAFC is the “sole decision-maker” on the allocation of these funds.[21]

Applicants from the state’s 20 healthcare partnership regions apply to the OAFC to receive funding from formulaically allocated regional shares.[22] “No single grant recipient” is allowed to receive 100% of the funds allocated to their respective region,[23] and each of the regions are required to “reserve” 25% of their grant allocations from the OAFC for “targeted interventions,”[24] which the OAFC establishes through parameters that include specific abatement strategies or certain geographic areas “based on opioid incidence information.”[25] The OAFC may use a portion of these targeted funds to develop an education and outreach program regarding opioid use, prevention, and interventions.[26]

The Opioid Abatement Fund Program rules describe a three-step grant application review process:

  1. An initial screening is conducted by program staff members to determine compliance with application requirements. Grants that meet these requirements are submitted to the peer review panel.[27]

  2. The peer review panel scores and recommends any changes to the applications to grant program staff.[28]

  3. The OAFC votes on and decides which applications are approved after consulting peer review scores and recommendations.[29] The OAFC must ensure that grants are “allocated fairly,”[30] and may consider a non-exhaustive list of factors in its review, including the grant applicant’s experience, project’s timeline, any matching funds or sustainability plans, geographic location of the project, community partnerships, and “any additional factors” listed in the grant application.[31]

Is this share attached to an explicit bar against supplantation?

No, supplantation is generally not prohibited.[32] Like most states, Texas does not explicitly prohibit supplantation uses of its opioid settlement funds. This means that monies from the 70% Texas Abatement Trust Fund generally may be spent in ways that replace (or “supplant”) — rather than supplement — existing resources. However, state law provides that the Trust Fund’s “[g]rant funds may not be used for costs that will be reimbursed by another funding source.”[33] This provision ostensibly prevents “double-dipping” on funding sources and may limit some, but not all, supplantation uses of grant awards made out of the state’s Opioid Abatement Trust Fund share.[34]

Can I see how this share has been spent?

No (no public reporting required, only intrastate). Opioid settlement expenditures are not officially published in a centralized location for this share.[35] The OAFC must submit a report detailing its expenditures each year only to the legislature.[36]

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

  1. Tex. Gov’t Code Sec. 403.506(a) (“The opioid abatement trust fund is a trust fund established outside of the state treasury”) and Tex. Gov’t Code Sec. 403.507(b)(2) (“Of money obtained under a statewide opioid settlement agreement … 85 percent shall be deposited into the fund”). See also Opioid Settlements at a Glance. Texas Opioid Abatement Fund Council (OAFC). Texas Comptroller website. Accessed August 27, 2024 (“Of the total amounts received from statewide opioid settlement agreements, 15 percent is deposited to the Opioid Abatement Account and 85 percent is deposited to the Opioid Abatement Trust Fund”). ↑

  2. Tex. Gov’t Code Sec. 403.506(c)(1) (“The trust company shall … distribute to counties and municipalities to address opioid-related harms in those communities an amount equal to 15 percent of the total amount of money obtained under a statewide opioid settlement agreement and distributed to the fund and the account under Section 403.507”) and Tex. Gov’t Code Sec. 403.507 (describing initial allocation of 85% to the Opioid Abatement Trust Fund). See also Opioid Settlements at a Glance. OAFC. Texas Comptroller website. Accessed August 27, 2024 (“15 percent is distributed through the Trust Fund to counties and municipalities to address opioid-related harms in those communities”). ↑

  3. Tex. Gov’t Code Sec. 403.506(c)(2) and Texas Opioid Abatement Fund Council and Settlement Allocation Term Sheet (Global Settlement Allocation Term Sheet) B.1-9 (“Allocation of Settlement Proceeds”). May 13, 2020. Accessed August 27, 2024. ↑

  4. Tex. Gov’t Code Sec. 403.506(c)(2)(A) (“$5 million of the amount distributed to the fund to the Texas Access to Justice Foundation to be expended only on the order of the Supreme Court of Texas for the purpose of providing basic civil legal services to indigent persons directly impacted by opioid-use disorders, including children who need basic civil legal services as a result of opioid-use disorders by a parent, legal guardian or caretaker”). ↑

  5. Tex. Gov’t Code Sec. 403.506(c)(2)(B) (“the remainder of that 70 percent to the council”). ↑

  6. Sec. 403.508(a)(1) (“one percent to the comptroller for the administration of the council and this subchapter”) and Global Settlement Allocation Term Sheet Exhibit A, Sec. I.D (up to 1% of funds set aside for “the administration of the [Texas Opioid Abatement Fund] Council” including compensation for its Executive Director and other personnel, travel expenses of OAFC members). See also Tex. Gov’t Code Sec. 403.508(b) (“If the comptroller determines that the [1%] allocation [for administrative expenses] exceeds the amount that is reasonable and necessary for the comptroller to administer the council and this subchapter, the comptroller may reallocate the excess money [to the OAFC’s opioid abatement strategy]”). ↑

  7. Tex. Gov’t Code Sec. 403.508(a)(2) (“15 percent to hospital districts”) and 34 Tex. Admin. Code Sec. 16.222 (“Hospital District Allocations”). See also Texas Comptroller Glenn Hegar Announces Opioid Abatement Fund Council's Approvals of Grant Plans and Proposed Rules. Texas Comptroller press release. November 29, 2023. Accessed August 27, 2024 (“During its regular meeting on Nov. 28, the OAFC approved … proposed rules to guide the fair and equitable distribution of an estimated $166.7 million in opioid settlement funds to more than 150 hospital districts over an estimated 18 years”). ↑

  8. Tex. Gov’t Code Sec. 403.508(a)(3) (“the remaining money based on the opioid abatement strategy developed by the council under Section 403.509”). ↑

  9. Tex. Gov’t Code Sec. 403.509(a)(1) and Global Settlement Allocation Term Sheet Exhibit A, Sec. II.D(1)-(3). ↑

  10. Tex. Gov’t Code Sec. 403.509(a)(1)(A) (“The council shall determine and approve one or more evidence-based opioid abatement strategies that include … an annual regional allocation methodology to distribute 75 percent of money distributed under Section 403.508(a)(3) based on population health information and prevalence of opioid incidences as provided by law”); 34 Tex. Admin. Code. Sec. 16.202(e)(1)(A) (“Of the funds allocated to a grant cycle, 75% shall be allocated among the regional healthcare partnership regions”; describing specific percentage allocations for regions 1-20). See also Global Settlement Allocation Term Sheet Exhibit A, Sec. II.D(1) (referring to “Exhibit C”) and Exhibit C (“TX Opioid Council & Health Care Region Allocations plus Administrative Costs”). The State of Texas has disagreed with this categorization in its communications with Vital Strategies and OpioidSettlementTracker.com. See Community Guides Methodology. ↑

  11. Tex. Gov’t Code Sec. 403.509(a)(2) (“The council shall … wholly or partly reallocate the targeted money between regions if a region for which targeted money is allocated is unable to use all of the targeted money”) and Sec. 403.509(b) (“The council may reallocate money between regions based on the funding needs of all regions if money allocated to a region lapses or is not used in the year that the money is allocated for use in the region”). See also Global Settlement Allocation Term Sheet Exhibit A, Sec. II.D(3) (“If a Region lapses its funds, the funds will be reallocated based on all Regions’ funding needs”). ↑

  12. Tex. Gov’t Code Sec. 403.509(a)(1)(B) (“The council shall determine and approve one or more evidence-based opioid abatement strategies that include … an annual targeted allocation to distribute 25 percent of money distributed under Section 403.508(a)(3) for targeted interventions as identified by opioid incidence information”) and Global Settlement Allocation Term Sheet Exhibit A, Sec. II.D(2) (“Each Region shall reserve twenty-five (25) percent of the overall funds, for targeted interventions in the specific Region as identified by opioid incidence data. The Council must approve on an annual basis the uses for the targeted abatement strategies and applications available to every Region, including education and outreach programs. Each Region without approved uses for the targeted funds from the Council, based upon a greater percentage of opioid incidents compared to its population, is subject to transfer of all or a portion of the targeted funds for that Region for uses based upon all Regions’ targeted funding needs as approved by the Council on an annual basis”). ↑

  13. See Tex. Gov’t Code Sec. 403.507(c) (“For the purposes of a statewide opioid settlement agreement in relation to a bankruptcy plan for a released entity, money is distributed in accordance with the bankruptcy plan”). ↑

  14. Global Settlement Allocation Term Sheet C.4 (describing set aside for an attorneys’ fee-related backstop fund: “the funds to be deposited in the Texas Opioid Fee and Expense Fund shall be 9.3925% of the combined Texas Political Subdivision and Texas Abatement Fund portions of each payment (annual or otherwise) to the State of Texas for that settlement, plus expenses from the National Fund”). Tex. Gov’t Code Sec. 403.508(a)(1) (“one percent to the comptroller for the administration of the council and this subchapter”) and 34 Tex. Admin. Code Sec. 16.211(a) (“Allowable costs are costs that are reasonable and necessary for the proper and efficient performance and administration of the grant project, and allocable to the grant project”). ↑

  15. See Global Settlement Allocation Term Sheet A.8 (“’Approved Purpose(s)’ shall mean those uses identified in Exhibit A hereto”); Global Settlement Allocation Term Sheet Exhibit A, Sec. II.A(1) (“The Council will develop the approved Texas list of [evidence-informed] abatement strategies based on but not limited to the existing national list of opioid abatement strategies”). Strategies on this list must be approved by a majority vote. Global Settlement Allocation Term Sheet Exhibit A, Sec. II.A(2). In practice, Texas refers to Exhibit E of the national settlements as the authority on what constitutes approved spending. See Funds Disbursements Eligible Uses of Opioid Abatement Funds). OAFC. Texas Comptroller website. Accessed August 27, 2024 (“Exhibit E - List of Opioid Remediation Uses (PDF) is a settlement document that contains a non-exhaustive list of Opioid Remediation Strategies that can guide states and political subdivisions in the spending of settlement funds”). ↑

  16. 34 Tex. Admin. Code Sec. 16.201(a)(1)-(3). ↑

  17. 34 Tex. Admin. Code Sec. 16.201(b)(1)-(4). ↑

  18. 34 Tex. Admin. Code Sec. 16.201(c). ↑

  19. 34 Tex. Admin. Code Sec. 16.201(d). ↑

  20. Tex. Gov’t Code Sec. 403.506(d) (“The trust company shall distribute money allocated under Subsection (c)(2) at the direction of the council”) and Secs. 403.509(a)(3) (OAFC must “develop an application and award process for funding”), 403.509(a)(4) (OAFC must “review grant funding applications and provide grant awards and funding allocations”) ”), 403.509(a)(5) (OAFC must "monitor grant agreements … and require each grant recipient to comply with the terms of the grant agreement or reimburse the grant to the council”). See also Global Settlement Allocation Term Sheet B.3 (“The Texas Abatement Fund Share shall be allocated to the Opioid Council”) and Exhibit A, Sec. II.D (“The Council will develop the application and award process”). ↑

  21. Global Settlement Allocation Term Sheet Exhibit A, Sec. II.D. ↑

  22. Global Settlement Allocation Term Sheet Exhibit A, Sec. II.D (“An entity seeking funds from the Council must apply for funds; no funds will be awarded without an application”); 34 Tex. Admin. Code Sec. 16.204 (“All grant funding is contingent upon the availability of funds and upon approval of a grant application by the council. Neither this subsection nor a grant agreement creates any entitlement or right to grant funds by a grant applicant”). On regional allocations, see Tex. Gov’t Code Sec. 403.509(a)(1)(A) (the “annual regional allocation methodology to distribute 75 percent of money distributed under Section 403.508(a)(3) [is] based on population health information and prevalence of opioid incidences as provided by law”) 34 Tex. Admin. Code Sec. 16.202(e)(1)(A) (describing specific percentage allocations for regions 1-20). ↑

  23. 34 Tex. Admin. Code Sec. 16.202(e)(1)(B). ↑

  24. Global Settlement Allocation Term Sheet Exhibit A, Sec. II.D(2) (“Each Region shall reserve twenty-five (25) percent of the overall funds, for targeted interventions in the specific Region as identified by opioid incidence data. The Council must approve on an annual basis the uses for the targeted abatement strategies and applications available to every Region, including education and outreach programs. Each Region without approved uses for the targeted funds from the Council, based upon a greater percentage of opioid incidents compared to its population, is subject to transfer of all or a portion of the targeted funds for that Region for uses based upon all Regions’ targeted funding needs as approved by the Council on an annual basis”). ↑

  25. 34 Tex. Admin. Code Sec. 16.202(e)(2)(A)(i)-(ii) (“Of the funds allocated to a grant cycle, 25% shall be allocated for targeted interventions. The council shall establish parameters for the authorized uses of the targeted intervention component of each grant cycle. … The parameters may include: … a limitation to one or more geographic areas based on opioid incidence information; and … a limitation to one or more eligible strategies based on opioid incidence”). For more elaboration on the OAFC’s process of ranking and prioritization, see 34 Tex. Admin. Code Sec. 16.202(e)(2)(B) (“The council shall rank the parameters relating to geographic areas and eligible strategies in order of priority for grant funding. For example, if the council limits targeted intervention grants to, in order of priority, locations A, B, C, and D and to, in order of priority, strategies X and Y, the council shall also specify whether a grant application from location A for strategy Y is a higher priority than a grant application from location B for strategy X”). See also Tex. Gov’t Code Sec. 403.509(a)(1)(B) (“The council shall determine and approve one or more evidence-based opioid abatement strategies that include … an annual targeted allocation to distribute 25 percent of money distributed under Section 403.508(a)(3) for targeted interventions as identified by opioid incidence information”) and Global Settlement Allocation Term Sheet Exhibit A, Sec. II.D(2) (“The Council must approve on an annual basis the uses for the targeted abatement strategies and applications available to every Region, including education and outreach programs”). ↑

  26. Tex. Gov’t Code Sec 403.509(a)(6) (“The council shall … determine the percentage of money that may be used for development of education and outreach programs to provide materials on the consequences of opioid drug use and prevention and intervention, including online resources and toolkits”) and Global Settlement Allocation Term Sheet Exhibit A, Sec. II.F (“The Council may determine that a percentage of the funds in the Abatement Fund from the targeted funds be used to develop an education and outreach program to provide materials on the consequences of opioid drug use, prevention and interventions. Any material developed will include online resources and toolkits for communities”) ↑

  27. 34 Tex. Admin. Code Sec. 16.208(b)(1)-(2) (“Initial screening”). ↑

  28. 34 Tex. Admin. Code Sec. 16.208(c)(1)-(4) (“Peer review”). ↑

  29. 34 Tex. Admin. Code Sec. 16.208(d)(1)-(7) (“Council review and approval”). ↑

  30. 34 Tex. Admin. Code Sec. 16.208(d)(3)(a) ↑

  31. 34 Tex. Admin. Code Sec. 16.208(d)(3)(b) ↑

  32. The State of Texas has disagreed with this categorization in its communications with Vital Strategies and OpioidSettlementTracker.com. See Community Guides Methodology. ↑

  33. 34 Tex. Admin. Code Sec. 16.212(c). See also Notice of Funding Availability Request for Applications (RFA No. OAFC-24-0001) for Texas Opioid Abatement Fund Council Naloxone Program Grant, Sect. 2.0 "Available Funding”). Texas Comptroller of Public Accounts. Accessed September 1, 2024 (“Grant funds may not be used for costs that will be reimbursed by another funding source. The Grant Recipient may be required to demonstrate through certification and accounting records that funds received from another funding source are not used for costs that will be reimbursed under the Grant Agreement"). ↑

  34. This regulation would, for example, prohibit the use of grant funds from the Texas Opioid Abatement Trust Fund to pay for expenses which will be reimbursed by Medicaid but would not prohibit a jurisdiction from redirecting general revenue funds if it receives a grant award for a program that it otherwise would have paid for with those general revenue funds. ↑

  35. The State of Texas has disagreed with this categorization in its communications with Vital Strategies and OpioidSettlementTracker.com. See Community Guides Methodology. ↑

  36. Tex. Gov’t Code Sec. 403.510. ↑

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