AB 374

This bill requires the attorney general to cooperate with local governments that

are parties to the multidistrict litigation titled In re: National Prescription Opiate

Litigation, Case No.: MDL 2804, in entering into a joint settlement agreement of the

claims of the state and local governments regarding opioids with any person engaged

in the manufacture, marketing, promotion, distribution, or dispensing of an opioid

product if all of the following are satisfied: 1) the Joint Committee on Finance

approves the proposed settlement agreement under the procedure specified in

current law; 2) the settlement agreement identifies 30 percent of the proceeds as

payable to the state; and 3) the settlement agreement identifies 70 percent of the

proceeds as payable to local governments that are parties to the multidistrict opiate

litigation.

The bill allocates the share of settlement proceeds payable to the state to the

Department of Health Services for expenditure for purposes that comply with the

settlement agreement or court order. DHS, to expend the moneys, must annually

submit to the Joint Committee on Finance a proposal of expenditure for the next

fiscal year. The Joint Committee on Finance must review the expenditure proposal

under its passive review process. If DHS, during the fiscal year, seeks to deviate from

its expenditure proposal, it must submit the deviation to the Joint Committee on

Finance for approval under its passive review process.

The bill requires that moneys payable in a settlement to local governments be

paid directly only to local governments that are parties to the multidistrict opiate

litigation. The share of settlement proceeds for such a local government must be

deposited by the local government in a segregated account; may not be commingled

with other moneys, except for settlement moneys of another local government; must

be expended for the purposes identified by the settlement agreement or court order;

may be allocated to another political subdivision if used for the same purposes as the

local government may expend the moneys; and must be included in the local

government's typical audit process. A local government may sell its right to receive

a payment under the settlement agreement, if approved by the governing body of the

local government. The local government may use a portion of the proceeds payable

to it for attorney fees and expenses if a separate fund created in the multidistrict

opiate litigation is insufficient to pay the entire amount.

Nothing in the bill alters a local government's right to litigate or resolve a

lawsuit or claim as a party to the multidistrict opiate litigation if the lawsuit or claim

was pending as of June 1, 2021. If the political subdivision of the state, or officer or

agent of the political subdivision, however, is not a party to the multidistrict opiate

litigation on or before June 1, 2021, the political subdivision, officer, or agent may not

maintain a claim to proceeds of a settlement of the multidistrict opiate litigation and

may not maintain any claim or commence any action against a person that is a

defendant in the multidistrict opiate litigation and that would be released in a