A5588

An Act concerning opioid settlement funds, amending P.L.2023, c.25, and supplementing Title 26 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New Section) The Legislature finds and declares:

a. The opioid epidemic in the United States has resulted in a complex array of lawsuits across the country against pharmaceutical companies and other entities implicated in the crisis.

b. New Jersey and its local governments will be paid more than $1.1 billion through 2038 pursuant to settlement agreements with opioid manufacturers, distributors, and retailers. The State will receive half of the funds and the other half will be allocated directly to 262 local government entities, including all 21 counties in the State.

c. The national opioid settlement agreements, a State Attorney General’s memorandum of agreement, and State law govern the approved uses of the settlement funds in New Jersey.

d. The majority of the funds are intended for opioid abatement programs focused on treatment, prevention, and other strategies to combat the opioid epidemic and the harms it inflicts on New Jerseyans. A relatively small amount of the funds - no more than five percent - may be used for administrative purposes.

e. Under State law, the Department of Human Services administers the non-lapsing “Opioid Recovery and Remediation Fund,” where the State-portion of settlement-agreement payments are deposited, and functions as lead agency for allocating and disbursing State funds and for the reporting, public disclosure, and other compliance obligations of all funds under the settlements.

f. In a July 2025 report on an investigation of Irvington’s mismanagement of opioid settlement funds, the New Jersey Office of the State Comptroller asserted that the Department of Human Services should provide more guidance and oversight regarding the use of opioid settlement funds by local entities.

g. It is in the public’s interest for the Legislature to strengthen the law which governs the use of opioid settlement funds to hold recipients accountable, thereby ensuring that these important resources support the individuals, families, and communities impacted by the opioid crisis through expanding access to care and mitigating the ongoing harms of the epidemic.

2. Section 1 of P.L.2023, c.25 (C.26:2G-39) is amended to read as follows:

1. a. There is created in the Department of the Treasury a dedicated, non-lapsing fund to be known as the "Opioid Recovery and Remediation Fund."

b. To the extent consistent with the terms of a national opioid litigation resolution subject to this act, the State Treasurer shall deposit into the fund the State's share of moneys received as a result of such resolution. Any interest and other income earned on moneys in the fund, and any other moneys that may be appropriated or otherwise become available for purposes of the fund, shall be credited to and deposited in the fund. For the purposes of this section, moneys paid to counties or municipalities shall not be considered to be part of the State's share of moneys received as a result of a national opioid litigation resolution. Any moneys received by any State department pursuant to a national opioid litigation settlement subject to this act shall be transferred into the fund.

c. (1) Moneys in the fund are hereby appropriated, shall be subject to the applicable requirements of the relevant national opioid litigation resolution and any applicable agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41), and shall be dedicated and used only for:

(a) the purposes described in subsection e. of this section; and

(b) the payment of attorneys' fees, costs, and related litigation expenses related to the national opioid litigation resolution.

(2) The Department of Human Services shall be designated the lead agency for the State for purposes of directing the disbursement and allocation of the State's share of any moneys that are allocated to or otherwise received by the State as a result of a national opioid litigation resolution and for monitoring the use of moneys disbursed to counties or municipalities under a national opioid litigation resolution or under an agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41), to the extent required by such agreements, and, in coordination with the State Comptroller and the Attorney General, ensuring that the use of such moneys complies with the purposes set forth in this act and is consistent with the terms of the applicable national opioid litigation resolution and any applicable agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41).

(a) The department shall have primary responsibility for ensuring that the various reporting, compliance, and administrative functions imposed upon the State pursuant to the terms and conditions of any national opioid litigation resolution and any applicable agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41) are performed, and shall serve as the single point of contact for the State for settlement fund administrators and trustees to submit requests for disbursement of settlement funds.

(b) The department shall be authorized to make determinations regarding disbursement and allocation of the State's share of such proceeds in accordance with the requirements or terms of any national opioid litigation resolution and any applicable agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41), which may include designations of regions for the allocation of the State's share of such proceeds, in addition to taking such other actions as may be assigned or required to be performed by the lead agency or single point of contact for the State under the terms of any national opioid litigation resolution and any applicable agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41).

(c) The department shall receive and review reports from each county regarding the expenditure of any moneys received by the county as a result of a national opioid litigation resolution. During review of these reports, the department shall determine each county’s compliance with the provisions of subsection i. of this section and shall ensure, if necessary, that all applicable funds are returned or reimbursed in accordance with that section.

(d) (i) The department shall be authorized to adopt, amend, or repeal regulations as necessary to carry out the intent and provisions of P.L.2023, c.25 (C.26:2G-39 et seq.).

(ii) Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the department may, immediately upon filing proper notice with the Office of Administrative Law, adopt rules and regulations as shall be necessary to enable it to carry out the department's duties, functions, and powers with respect to this act. Rules and regulations adopted pursuant to this subsubparagraph shall be effective immediately upon filing with the Office of Administrative Law and shall be in effect for a period not to exceed 18 months, and shall, thereafter, be amended, adopted, or readopted by the department in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

(3) Notwithstanding any other law or regulation to the contrary, there is hereby appropriated: (a) moneys from the fund to the Department of Human Services, which shall allocate the appropriated funds in accordance with the provisions of subsections d., e., and f. of this section; and (b) to the extent applicable, moneys paid to the State as a result of a national opioid litigation resolution that have been allocated to a county or municipality in accordance with the terms of the national opioid litigation resolution or a related agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41), and to the extent necessary to effectuate such resolution, which shall be used in accordance with the provisions of subsections d., e., and f. of this section.

(4) Moneys from the fund may be transferred to other State departments as directed by the Commissioner of Human Services in support of the purposes provided for in this act, subject to the approval of the Director of Budget and Accounting.

d. Notwithstanding section 2 of P.L.1999, c.129 (C.56:8-14.3), section 15 of P.L.2003, c.76 (C.56:8-133), and the "New Jersey False Claims Act," P.L.2007, c.265 (C.2A:32C-1 et seq.), the department shall direct the allocation and disbursement of moneys in the Opioid Recovery and Remediation Fund established by this section, and shall do so in consultation with the Opioid Recovery and Remediation Advisory Council, established pursuant to section 2 of this act. The department shall allocate funds with an emphasis on supporting programs and strategies that are evidence-based or evidence-informed and, in making such allocations, shall consider equitable access for underserviced communities Statewide.

e. Moneys, other than attorneys' fees, costs, and expenses related to litigation, that are allocated to or otherwise received by the State or any county or municipality as a result of a national opioid litigation resolution, shall be dedicated and used, consistent with the terms of an applicable national opioid litigation resolution and any applicable agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41), for the purpose of addressing opioid use disorder and any co-occurring substance use disorder or mental health conditions through evidence-based or evidence-informed practices or strategies that may include, but shall not be limited to, the following:

(1) Supporting the treatment of opioid use disorders and any co-occurring substance use disorder or mental health conditions through evidence-based or evidence-informed programs or strategies;

(2) Supporting individuals in recovery from opioid use disorder, as well as any co-occurring substance use disorder or mental health conditions, through evidence-based or evidence-informed programs or strategies, including, but not limited to, providing support services to the families of such individuals;

(3) Providing connections to care for people who have, or are at risk of developing, an opioid use disorder or a co-occurring substance use disorder or mental health condition, through evidence-based or evidence-informed programs or strategies;

(4) Using evidence-based or evidence-informed programs or strategies to address the needs of persons with an opioid use disorder or a co-occurring substance use disorder or mental health condition who are involved in, are at risk of becoming involved in, or are transitioning out of, the criminal justice system;

(5) Using evidence-based or evidence-informed programs or strategies to address the needs of pregnant or parenting persons with opioid use disorder or a co-occurring substance use disorder or mental health condition, and the needs of the families of such individuals, including babies with neonatal abstinence syndrome;

(6) Supporting efforts to prevent over-prescribing and ensure appropriate prescribing and dispensing of opioids through evidence-based or evidence-informed programs or strategies;

(7) Using evidence-based or evidence-informed programs or strategies to support efforts to discourage or prevent the misuse of, and the development of substance use disorders involving, opioids;

(8) Using evidence-based or evidence-informed programs or strategies to support efforts to prevent or reduce overdose deaths or other opioid-related harms;

(9) Educating law enforcement or other first responders regarding appropriate practices and precautions when dealing with fentanyl and other drugs;

(10) Providing wellness and support services for first responders and others who experience secondary trauma associated with opioid-related emergency events;

(11) Supporting efforts to provide leadership, planning, coordination, facilitations, training, and technical assistance to abate the opioid epidemic through activities, programs, and strategies;

(12) Supporting training to abate the opioid epidemic through activities, programs, or strategies;

(13) Supporting opioid abatement research;

(14) Supporting such other strategies as may be expressly identified in any national opioid litigation resolution; and

(15) Administrative expenses, subject to limits imposed by any national opioid litigation resolution or by any agreement entered pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41).

f. Moneys, other than attorneys' fees, costs, and expenses related to litigation, that are allocated to or otherwise received by the State or any of its counties or municipalities as a result of a national opioid litigation resolution shall be used to supplement, and shall not supplant, federal, State, county, or municipal funds, as the case may be, that otherwise would have been used to carry out the purposes delineated in this act, and no amount of such moneys shall be used to reimburse the State or any of its counties or municipalities for past expenditures, except as may otherwise be required to refund to the federal government a portion of the moneys.

g. For the purposes of P.L.2023, c.25 (C.26:2G-39 et seq.), "national opioid litigation resolution" means a settlement agreement, entered into by the Attorney General of New Jersey on behalf of the State and by other state attorneys general on behalf of their respective states, which provides for the participation of states, counties, and municipalities to resolve claims by the State attorneys general and counties and municipalities against opioid manufacturers, opioid distributors, or pharmacies, or persons or entities affiliated with an opioid manufacturer, opioid distributor, or pharmacy, related to the manufacture, marketing, distribution, or dispensing of opioids, or a bankruptcy plan which is governed by an agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41) and which has received final approval and that channels, releases, or otherwise finally disposes of such claims including those of the State and its counties and municipalities.

h. Any moneys allocated to or otherwise received by the State or any of its counties or municipalities as a result of a national opioid litigation resolution, and subsequently distributed in accordance with subsection e. of this section, shall be expended within 18 months of receipt by the recipient unless the intended use of such funds is for a multi-year project, under which circumstance the funds shall be expended according to a pre-determined timeline approved by the Department of Human Services or the applicable oversight entity of the county or municipality. If, after 18 months or the conclusion of the pre-determined timeline for multi-year projects, the moneys are not expended, the recipient shall either: (a) seek approval from the Department of Human Services or the applicable oversight entity of the county or municipality for an extension; or (b) return the moneys to the "Opioid Recovery and Remediation Fund" or the applicable county or municipality fund for redistribution.

i. (1) A State executive branch department, division, or entity; a county or municipality located in the State; or a third-party entity, allocated, or otherwise in receipt of, moneys as a result of a national opioid litigation resolution shall be required to reimburse the "Opioid Recovery and Remediation Fund" or the applicable county or municipality fund of any moneys that are not expended in accordance with subsection e. of this section, as provided for in this subsection.

(2) If the Department of Human Services, the State Comptroller, the Attorney General, or the applicable oversight entity of a county or municipality determines that moneys allocated to or otherwise received by a State executive branch department, division, or entity; a county or municipality located in the State; or a third-party entity, as a result of a national opioid litigation resolution, were not expended in accordance with subsection e. of this section, the applicable oversight entity shall inform the recipient in writing of the determination. This notice shall include: the amount of funds that were determined misused; an explanation of how the funds were misused and any documentation to support the determination; and instructions on how the recipient is to reimburse the "Opioid Recovery and Remediation Fund" or the applicable county or municipality fund. The recipient shall have 60 days from the receipt of this notification to reimburse the misused funds. At any point during the 60-day period, the recipient may apply to the applicable oversight entity for an extension to the initial deadline on which the misused funds are to be reimbursed. If approved by the applicable oversight entity, the recipient shall have until the new deadline to reimburse the funds, which deadline shall be provided to the recipient in writing. The applicable oversight entity shall use discretion in approving multiple extension requests from the same recipient.

j. If a State executive branch department, division, or entity; a county or municipality located in the State; or a third-party entity, having received moneys as a result of a national opioid litigation resolution, determines that all or a portion of the funds cannot be spent in accordance with subsection e. of this section, the recipient shall be permitted to return the funds to the "Opioid Recovery and Remediation Fund" or the applicable county or municipality fund. Such funds shall be redistributed for purposes permitted under subsection e. of this section.

(cf: P.L.2023, c.25, s.1)

3. Section 2 of P.L.2023, c.25 (C.26:2G-40) is amended to read as follows:

2. a. There is established in the Department of Human Services the Opioid Recovery and Remediation Advisory Council. The council shall be advisory in nature and its purpose shall be to review proposals, data, and analyses, and engage with stakeholders and community members, to develop and provide recommendations on the allocation and distribution of the State's share of proceeds from national opioid litigation resolutions. The council shall provide information, advice, and general recommendations consistent with its purpose to the Governor, the Commissioner of Human Services, and other executive branch departments and agencies. To effectuate this goal, the council shall:

(1) gather and evaluate data regarding the availability of, gaps in, and barriers to substance use disorder prevention and treatment programs and recovery services;

(2) solicit feedback, in a manner and method established by the council, from stakeholders, local providers, advocates, individuals with lived experience with opioid use disorders, including people who have or are in recovery from an opioid use disorder and family members of people with an opioid use disorder, the academic community, individuals with expertise in areas related to substance use disorders, community groups, and members of the public, regarding the services needed to prevent and treat substance use disorders across the State;

(3) review and evaluate recommendations submitted by the public using the online portal that was established by the State on August 31, 2022 to enable members of the public to provide recommendations on the expenditure of proceeds from national opioid litigation resolutions;

(4) evaluate approaches taken by New Jersey and other states in administering proceeds from national opioid litigation resolutions;

(5) consult with experts and other knowledgeable individuals in both the public and private sectors on any aspect of its duties as the council deems necessary and appropriate; and

(6) take any other actions as the council deems appropriate to inform its recommendations, with the purpose of promoting the equitable and efficient distribution of settlement funds, including the distribution of funds using evidence-based and evidence-informed practices and strategies.

b. The council shall comprise:

(1) the Commissioner of Human Services, the Commissioner of Health, the Commissioner of Children and Families, and the Attorney General, or their designees, who shall serve ex-officio;

(2) at least 10 public members appointed by the Governor who reflect the diversity of New Jersey and who shall include public health and policy experts and two or more individuals who have lived experience with opioid use disorders, including one or more individuals who have or are in recovery from an opioid use disorder and one or more family members of a person with an opioid use disorder; and

(3) such additional ex officio and public members as the Governor deems appropriate.

c. The public members of the council shall serve at the pleasure of the Governor. No member shall take any official action or make a recommendation on any matter in which the member has a direct or indirect financial interest. The Commissioner of Human Services or the commissioner's designee shall serve as the chairperson of the council.

d. The council shall organize as soon as practicable following the appointment of its members and shall meet at such frequencies as shall be required by the Governor as well as at the call of the chairperson. The members of the council shall serve without compensation, but shall be eligible for reimbursement for necessary and reasonable expenses incurred in the performance of their official duties within the limits of funds appropriated or otherwise made available to the council for its purposes.

e. The council shall be entitled to receive assistance and services from any State, county, or municipal department, board, commission, or agency as may be made available to it for its purposes. The Department of Human Services shall provide such staff and administrative support to the council as it requires to carry out its responsibilities[.], which support shall constitute an administrative cost of the “Opioid Recovery and Remediation Fund.”

f. (1) To the extent permissible under the terms of a national opioid litigation resolution, the council shall not be required to, and may refrain from, making recommendations for expenditures that would primarily benefit counties or municipalities that were eligible to participate in the national opioid litigation resolution that yielded such funds but did not participate in the resolution, provided that nothing in this subsection shall be deemed to prevent the council from exercising its discretion to make such recommendations should it determine to do so.

(2) [The] Upon the request of a county or municipality for guidance, the council [may, but] shall [not] be required to[,] provide information and general recommendations [to counties and municipalities] concerning the expenditure of the share of proceeds from national opioid litigation resolutions allocated to [those counties and municipalities] the county or municipality, and may coordinate with any similarly situated county advisory council as the chairperson deems appropriate. In order to fulfill the provisions of this paragraph, the council shall establish a formal process by which a county or municipality may request guidance from the council.

(3) The council shall establish a training program, no less than 12 months after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), designed to educate counties and municipalities on the approved uses of opioid settlement funds, consistent with the terms of all applicable national opioid litigation resolutions and any applicable agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41), and in accordance with subsection e. of section 1 of P.L.2023, c.25 (C.26:2G-39). The training shall clearly define “evidence-based” and “evidence-informed” practices, and shall be led by a trainer, in real-time, either in person or via remote technology. The council shall provide the training program to a county or municipality that receives proceeds from national opioid litigation resolutions at least once within 24 months of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and upon request thereafter.

g. The council shall expire 180 days after all proceeds from opioid litigation resolutions are expended and the Department of Human Services issues the final report required pursuant to subsection b. of section 5 of P.L.2023, c.25 (C.26:2G-43).

(cf: P.L.2023, c.25, s.2)

4. Section 3 of P.L.2023, c.25 (C.26:2G-41) is amended to read as follows:

3. The Attorney General, in consultation with the Commissioner of Human Services, shall be authorized to enter into agreements with counties and municipalities concerning the allocation and expenditure of moneys allocated to the State and its counties and municipalities in any national opioid litigation resolution. Such agreements shall include provisions reflecting the requirements outlined under subsections h., i., and j. of section 1 of P.L.2023, c.25 (C.26:2G-39).

(cf: P.L.2023, c.25, s.3)

5. (New Section) a. The Department of Human Services shall include on the State’s Opioid Settlement Dashboard website a link to the New Jersey Office of the State Comptroller’s online form which allows members of the public to file a report regarding alleged fraud, waste, or abuse of State funds, along with instructions that this link may be used to report suspected fraud, waste, or abuse relating to the expenditure of national opioid settlement funds.

b. A county or municipality that receives proceeds from national opioid litigation resolutions shall include on the county or municipality’s website, in an easily accessible location and alongside any posted information regarding the opioid settlement funds, if applicable:

(1) a link to the New Jersey Office of the State Comptroller’s online form which allows members of the public to file a report regarding alleged fraud, waste, or abuse of State funds, along with instructions that this link may be used to report suspected fraud, waste, or abuse relating to the expenditure of national opioid settlement funds; and

(2) a link to any reports required to be compiled by the county or municipality by a national opioid litigation resolution, any applicable agreement entered into pursuant to section 3 of P.L.2023, c.25 (C.26:2G-41), or State law regarding the expenditure of moneys received as a result of a national opioid litigation resolution.

6. This act shall take effect immediately.

STATEMENT

This bill expands the oversight and transparency of funds received by the State and local entities due to national opioid settlements. Through 2038, New Jersey and its local governments will be paid more than $1.1 billion pursuant to settlement agreements with opioid manufacturers, distributors, and retailers for their responsibility in the nationwide opioid epidemic. The State will receive half of the funds and the other half will be allocated directly to 262 local government entities, including all 21 counties in the State.

Specifically, under the bill, any moneys allocated to or otherwise received by the State or any of its counties or municipalities as a result of a national opioid litigation resolution, and subsequently distributed in accordance with current law, are required to be expended within 18 months of receipt by the recipient unless the intended use of such funds is for a multi-year project, under which circumstance the funds are to be expended according to a pre-determined timeline approved by the Department of Human Services or the applicable oversight entity of the county or municipality. If, after 18 months or the conclusion of the pre-determined timeline for multi-year projects, the moneys are not expended, the recipient is required to either: 1) seek approval from the Department of Human Services or the applicable oversight entity of the county or municipality for an extension; or 2) return the moneys to the "Opioid Recovery and Remediation Fund," the repository of the State’s share of opioid settlement funds, or the applicable county or municipality fund for redistribution.

The bill also requires that any opioid settlement moneys not expended in accordance with current law, as determined by the Department of Human Services, the State Comptroller, the Attorney General, or the applicable oversight entity of the county or municipality, are to be reimbursed by the recipient and deposited into the "Opioid Recovery and Remediation Fund" or the applicable county or municipality fund within 60 days of the determination. Broadly, funds must support treatment of Opioid Use Disorder and any co-occurring Substance Use Disorder or Mental Health conditions through evidence-based or evidence-informed programs or strategies. The bill permits affected entities to request an extension on this 60-day deadline. The bill also permits entities in receipt of opioid settlement moneys, who determine that all or a portion of the funds cannot be spent in accordance with current law, to return such funds to the applicable account for redistribution.

The bill directs the existing Opioid Recovery and Remediation Advisory Council to establish a training program designed to educate counties and municipalities on the approved uses of opioid settlement funds, and to implement a formal process by which a county or municipality may request guidance from the council regarding the appropriate expenditure of funds. The bill also requires that no member of the council is to take any official action or make a recommendation on any matter in which the member has a direct or indirect financial interest. Additionally, the bill affirms that any staff or administrative support provided to the council by the Department of Human Services, as required under existing law, is to constitute an administrative cost of the “Opioid Recovery and Remediation Fund.”

Finally, the bill requires the Department of Human Services and a county or municipality that receives proceeds from national opioid litigation resolutions to post a link on the applicable websites to the New Jersey Office of the State Comptroller’s online form which allows members of the public to file a report regarding alleged fraud, waste, or abuse of State funds, along with instructions that this link may be used to report suspected fraud, waste, or abuse relating to the expenditure of national opioid settlement funds. Counties and municipalities must also post a link to any reports required to be compiled by the county or municipality regarding the expenditure of moneys received as a result of a national opioid litigation resolution.