Bill Text: HI HB2806 | 2024 | Regular Session | Amended

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Bill Title: Relating To Opioid Litigation Proceeds.

Spectrum: Partisan Bill (Democrat 10-0)

Status: (Introduced) 2024-02-28 - The committee(s) on FIN recommend(s) that the measure be deferred. [HB2806 Detail]

Download: Hawaii-2024-HB2806-Amended.html

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HOUSE OF REPRESENTATIVES	H.B. NO.	2806
THIRTY-SECOND LEGISLATURE, 2024		H.D. 2
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO OPIOID LITIGATION PROCEEDS.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that, according to KFF Health News, the State has received over $19,000,000 as of April 2023 in litigation proceeds from legal claims made against manufacturers and distributors of prescription opioids; pharmacies that have dispensed opioids; and other related parties for their alleged roles in contributing to the high rates of drug overdoses and other drug-related harms.  The Hawaii department of the attorney general estimates that the anticipated recovery of litigation proceeds will exceed $156,000,000.

     The legislature further finds that experience with the 1990s tobacco settlement funds suggests that without firm commitment and transparent planning, opioid litigation proceeds may not be directed toward preventing and addressing substance use disorders, overdoses, and other drug-related harms.  This would be an unacceptable outcome, as substance use disorders, overdoses, and drug-related harms have had a significant impact throughout the State.

     The purpose of this Act is to require transparency and ensure accountability through the creation of the Hawaii opioid litigation proceeds council to oversee the Hawaii opioid settlement advisory committee's expenditure of all opioid litigation proceeds received by the State as part of the historic nationwide lawsuits holding entities responsible for the opioid crisis devastating communities.

     SECTION 2.  The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

hawaii opioid litigation proceeds

     §   -1  Definitions.  As used in this chapter, unless the context otherwise requires:

     "Council" means the Hawaii opioid litigation proceeds council.

     "Department" means the department of health.

     "Director" means the director of health.

     "HOSAC" means the Hawaii opioid settlement advisory committee as described in the MOA.

     "MOA" means the memorandum of agreement between the State and local governments on proceeds relating to the settlement of opioid litigation, also referred to as the State-Subdivision Agreement, as amended.

     "Opioid remediation" shall have the same meaning and uses as set forth in exhibit "A" of the MOA.

     "Special fund" means the Hawaii opioid litigation proceeds special fund.

     "Substance use disorder" means a pattern of use of alcohol or other substances that meets the applicable diagnostic criteria delineated in the most recent publication of the Diagnostic and Statistical Manual of Mental Disorders of the American Psychiatric Association, or in any subsequent editions.

     §   -2  Hawaii opioid litigation proceeds special fund.  (a)  There shall be established in the state treasury the Hawaii opioid litigation proceeds special fund to be administered by the council and into which shall be deposited the following moneys:

     (1)  All opioid litigation proceeds received by the State, regardless of whether the proceeds are received as a lump sum or series of payments to be made over a period of time;

     (2)  Appropriations made by the legislature;

     (3)  Gifts, donations, grants, bequests, and other moneys received by the State on the special fund's behalf; and

     (4)  All interest earned or accrued from the investment of the moneys in the special fund.

     (b)  The moneys in the special fund shall be expended for the following purposes:

     (1)  At least eighty-five per cent of the special fund to address opioid remediation;

     (2)  Up to fifteen per cent of the special fund to address remediation for other substance use disorders, not limited to opioids;

     (3)  Moneys received into the special fund under subsection (a)(2), (3), and (4) shall be utilized for any opioid remediation purpose as deemed necessary by the council;

     (4)  Disbursement of funds allocated to the counties as their share of opioid litigation proceeds;

     (5)  The administration and staffing of the council, HOSAC, and special fund; provided that no more than eight per cent of the special fund's annual balance, as determined on December 31 of each year, shall be expended for this purpose;

     (6)  The management, investment, and disbursement of moneys from the special fund; provided that no more than two per cent of the special fund's annual balance, as determined on December 31 of each year, shall be expended for this purpose; and

     (7)  All spending with funds from the opioid settlement moneys will be decided by majority approval of both the council and HOSAC.

     (c)  Moneys in the special fund that are allocated to the counties as their share of proceeds shall be disbursed to the respective counties within ninety days of receipt of the litigation proceeds by the State.  The counties' authority to direct and determine how their respective shares are spent shall be consistent with the opioid remediation activities as stated in the MOA and shall not be subject to severability.

     (d)  Moneys in the special fund shall be used for prospective purposes and shall not be used to reimburse expenditures incurred before the effective date of this Act.

     (e)  All opioid litigation proceeds shall be spent, whether by the state or counties, consistent with the MOA, settlement agreements entered into by the State, and any court orders issued in relation to the MOA or settlement agreements.

     §   -3  Special fund disbursements; requirements; restrictions.

     (a)  Disbursements from the special fund shall be made promptly by the director upon the approval of the council and no later than ninety days after the approval of the council and HOSAC and execution of all required state procurement requirements.  The director shall not make or refuse to make any disbursement allowable under this subsection without the approval of the council and HOSAC.  The director shall adhere to the council's decisions regarding disbursement of moneys from the special fund so long as the disbursement is a permissible expenditure under the MOA.  The director's role in the distribution of moneys as approved by the council shall be ministerial and not discretionary.

     (b)  Moneys expended from the special fund for the purposes of section    ‑2(a) shall be supplemental to, and shall not supplant or take the place of any other funds provided to the department of health, including but not limited to insurance benefits or federal, state, or county funding.

     (c)  The State and director of finance shall not deduct or transfer to the general fund, or any other special fund or account, any opioid settlement or special fund moneys, including but not limited to a central service assessment, as allowed by section 36-27, or under any other statute or rule.

     §   -4  Special fund; investments.  The director shall have the responsibility for the investment and reinvestment of moneys in the special fund.  On or before December 31 of each year, the director shall issue a public report, which shall be made available online, specifying:

     (1)  An inventory of special fund investments as of December 31;

     (2)  The net income the special fund earned for the previous fiscal year;

     (3)  The dollar amount and the percentage of the special fund balance incurred for expenses of administering and staffing the special fund and the council during the previous fiscal year; and

     (4)  The dollar amount and the percentage of the special fund balance incurred for expenses associated with managing, investing, and disbursing moneys in the special fund during the previous fiscal year.

     §   -5  Hawaii opioid litigation proceeds council.  (a)  There shall be established a Hawaii opioid litigation proceeds council to be placed in the department of health for administrative purposes only.

     (b)  The purpose of the Hawaii opioid litigation proceeds council shall be to ensure that the proceeds received by the State are spent pursuant to the MOA and section    ‑2(b).

     (c)  The council shall be comprised of fifteen voting members as follows:

     (1)  The director of health, or the director's designee;

     (2)  The director of corrections and rehabilitation, or the director's designee;

     (3)  The superintendent of education, or the superintendent's designee;

     (4)  The dean of the John A. Burns school of medicine at the university of Hawaii at Manoa, or the dean's designee;

     (5)  The mayors of the counties of Hawaii, Kauai, and Maui, and the city and county of Honolulu, or the mayors' designees;

     (6)  One member appointed by the governor from a list of three nominees submitted by the president of the senate;

     (7)  One member appointed by the governor from a list of three nominees submitted by the speaker of the house of representatives; and

     (8)  Five community members appointed by the governor, who shall include:

          (A)  A person who is a member of the Hawaii Substance Abuse Coalition who has experience in providing substance use disorder prevention, treatment, recovery, and harm reduction services;

          (B)  A person who has expertise, experience, or education in public health policy or research;

          (C)  A person who has experience in mental health services;

          (D)  A person who has experience in public budgeting; and

          (E)  A person who has lived experience with substance use disorder recovery.

     (d)  To the extent practicable, council members shall also invite family members of persons who have a substance use disorder or family members of a decedent who had a substance use disorder and representatives of communities that have been disproportionately impacted by substance use disorders and disparities in access to care or health outcomes.

     (e)  The council shall elect a chair from among its members on January 15 of each year.

     (f)  Council members shall serve two-year terms.

     (g)  The council shall be responsible for:

     (1)  Recommending and approving policies and procedures for administration of the council and for the application, awarding, and disbursement of moneys from the special fund, to be used for purposes set forth in section    ‑2(b); and

     (2)  Approving suspensions of allocations of moneys from the special fund to recipients found by the council or the department to be substantially out of compliance with council policies or procedures; the policies, procedures, or rules of the department; or to have used the awards for a purpose other than an approved purpose.  The council may resume approval of allocations once the council or department has determined the recipient has adequately remedied the cause of the suspension.

     (h)  When approving an allocation of moneys from the special fund, the council shall consider, at a minimum, the following criteria:

     (1)  The number of people per capita with a substance use disorder in a community;

     (2)  Disparities in access to care in a community that may preclude persons with a substance use disorder from obtaining a diagnosis or receiving evidence-based treatment;

     (3)  The number of overdose deaths per capita in a community;

     (4)  The infrastructure, programs, services, supports, or other resources currently available to individuals with substance use disorders in a community; and

     (5)  Disparities in access to care and health outcomes in a community.

     (i)  The council shall hold at least four meetings per year.  Members may attend meetings in person, remotely by audiovisual means, or upon approval by the chair, by audio-only means.

     (j)  A majority of council members shall constitute a quorum for the transaction of business, and the affirmative vote of a majority of the members present shall be necessary for any action by the council.  Each council member shall have one vote.

     (k)  Members shall disclose to the council, refrain from participating in discussions, and recuse themselves from voting on any matter before the council where the member has a conflict of interest.

     (l)  For the purposes of this section, "conflict of interest" means a financial association involving a council member, HOSAC member, or the council or HOSAC member's immediate family that has the potential to influence a council or HOSAC member's actions, recommendations, or decisions related to the disbursement of opioid litigation proceeds or other council activity.

     §   -6  Recipients; reports.  Any recipient who receives an award of funds from the special fund shall prepare a report to the council one year after the award of any funds, and for each year thereafter that the recipient receives funds from the special fund, detailing the effectiveness of infrastructure, programs, services, supports, and resources funding.  The report shall include, at a minimum:

     (1)  How the recipient used the moneys for the intended purpose;

     (2)  The number of individuals serviced by race, age, gender, and other demographic factors reported in a de-identified manner;

     (3)  A specific analysis of whether the infrastructure, program, service, support, or resources reduced mortality or improved prevention, treatment, recovery, or harm reduction outcomes, or both; and

     (4)  If a plan to ensure the sustainability of the infrastructure, program, service, support, or resources funded exists, a summary of the plan.

     §   -7  Department of health; program director; duties; responsibilities.  The department shall:

     (1)  Employ a full-time program director of the council to plan and support the meetings and functions of the council and direct the day-to-day activities required to ensure that all opioid litigation proceeds received by the State and deposited in the special fund are allocated and spent on opioid remediation and substance use disorder abatement infrastructure, programs, services, supports, and resources for prevention, treatment, recovery, and harm reduction as described in the MOA; and to ensure robust public involvement, accountability, and transparency in allocating and accounting for moneys in the special fund;

     (2)  Provide public health research and policy expertise, support staff, facilities, technical assistance, and other resources to assist the program director of the council with the program director's duties;

     (3)  Utilize, where feasible, appropriations from the general fund and existing infrastructure, programs, services, supports, or other resources to address substance use disorders, overdoses, and drug-related harms in the State;

     (4)  Prepare, for review and approval by the council, goals and objectives and their rationales, sustainability plans, and performance indicators relating to substance use disorder prevention, treatment, recovery, and harm reduction efforts and reducing disparities in access to prevention, treatment, recovery, and harm reduction programs, services, supports, and resources;

     (5)  Evaluate applications and recommend to the council awards and disbursements of moneys from the special fund that meet the requirements of section    ‑2(b);

     (6)  Maintain oversight over the expenditure of moneys from the special fund to ensure special fund moneys are expended in accordance with the requirements of the MOA and this chapter;

     (7)  Recommend to the council any suspensions of allocations of moneys from the special fund to recipients found by the department to be substantially out of compliance with council policies or procedures; the department's policies, procedures, or rules; or to have used the awards for a purpose other than an approved purpose;

     (8)  Implement and publish on the council's or department's website the policies and procedures for administration of the council and for the application, awarding, and disbursement of moneys from the special fund; and

     (9)  Create and maintain a website that shall include, at a minimum:

          (A)  An annual report of the council's activities pursuant to section    ‑8;

          (B)  Council meeting attendance rolls and minutes, including but not limited to records of all votes on expenditures of moneys from the special fund, recipient agreements, and any reports made by a recipient pursuant to section    ‑6; and

          (C)  All policies and procedures approved by the council and any council-related policies, procedures, or rules adopted by the department.

     §   -8  Reporting.  (a)  Beginning on December 31 one year after the initial deposit of proceeds into the special fund, and every year thereafter, the department shall provide a written report to the governor, legislature, and attorney general detailing the council's activities during the previous calendar year.

     (b)  The report shall be published on the council's or department's website and shall include, at a minimum:

     (1)  The opening and closing balance of the special fund for the calendar year;

     (2)  An accounting of all credits to and expenditures from the special fund;

     (3)  The name and a description of each recipient of moneys from the special fund, and the amount awarded to each recipient;

     (4)  A description of each award's intended use, including the specific program, service, support, or resource funded; population served; and measures that the recipient will use to assess the impact of the award;

     (5)  The primary criteria used to determine each recipient and its respective award amount;

     (6)  A summary of the information included in the annual report prepared by the recipient required under section    ‑6;

     (7)  All applications for an award of moneys from the special fund received during the calendar year;

     (8)  A description of any finding or concern as to whether all moneys disbursed from the special fund pursuant to section    ‑2(a)(4) supplemented, and did not supplant or replace, any existing or future federal, state, or county funding; and

     (9)  The performance indicators and progress toward achieving the goals and objectives developed under this chapter, including metrics on improving outcomes and reducing mortality and other harms related to substance use disorders."

     SECTION 3.  There is appropriated out of the Hawaii opioid litigation proceeds special fund the sum of $           or so much thereof as may be necessary for fiscal year 2024-2025 for the purposes of drug policy and coordination the establishment of the following positions within the alcohol and drug abuse division of health:

     (1)  Two full-time equivalent (2.0 FTE) program director positions exempt from chapter 76, Hawaii Revised Statutes;

     (2)  Two full-time equivalent (2.0 FTE) outreach coordinator positions exempt from chapter 76, Hawaii Revised Statutes; and

     (3)  One full-time equivalent (1.0 FTE) administrative assistant position exempt from chapter 76, Hawaii Revised Statutes.

     The sum appropriated shall be expended by the department of health for the purposes of this Act.

     SECTION 4.  This Act shall take effect on July 1, 3000.

 

 

Report Title:

Opioid Litigation Proceeds; Special Fund; Council; Establishment; Appropriation

 

Description:

Establishes the Hawaii opioid litigation proceeds special fund.  Establishes the Hawaii opioid litigation proceeds council to oversee the Hawaii opioid settlement advisory committee's expenditure of opioid litigation proceeds.  Establishes standards for expenditure of opioid litigation proceeds received by the State.  Establishes and appropriates funds from the Hawaii opioid litigation proceeds special fund for staff positions.  Effective 7/1/3000.  (HD2)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.