GUIDE FOR COMMUNITY ADVOCATES

ON THE OPIOID SETTLEMENT

North Carolina
Total Funds Allocation Mechanism

Allocation agreements between

the state and local governments
(Memorandum of Agreement
Between the State of North
Carolina and Local Governments

$750 million1
85% to counties and on Proceeds Relating to the
municipalities; 15% to the state2 Settlement of Opioid Litigation;
Supplemental Agreement for
Additional Funds from Additional
Settlements of Opioid Litigation),
legislation (N.C. S.L. 2022-74, §
9F.1)3

Key Takeaways

Local emphasis. North Carolina allocates 85% of its settlement funds to counties and municipalities,
with the remaining 15% allocated to the state.4

Option A vs. Option B. Localities may spend their settlement funds on specific “High-Impact Opioid Abatement
Strategies” (Option A), choose among a broader list of permissible uses after engaging in a collaborative strategic
planning process (Option B), or both.5

100% public reporting. Local governments that receive settlement funds must publicly report all settlement allocations
and expenditures, any reports and recommendations from collaborative strategic planning processes, and information
on the impact of their settlement expenditures.6 This information will be posted on the statewide opioid settlement
dashboard.7 Additionally, although neither state law nor the Agreement include any public reporting requirements
regarding the 15% state share, the state has committed to sharing how the General Assembly appropriates these funds.8

This resource is current as of

6/5/2023. For the most up-to-date
information, please visit https://
www.opioidsettlementtracker.com/
settlementspending.

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GUIDE FOR COMMUNITY ADVOCATES
ON THE OPIOID SETTLEMENT

North Carolina
Background The Memorandum of Agreement Between the State of North Carolina and
Local Governments on Proceeds Relating to the Settlement of Opioid Litigation
(Agreement) and Supplemental Agreement for Additional Funds from Additional
Settlements of Opioid Litigation (Supplemental Agreement) govern the allocation
and use of opioid settlement funds in North Carolina. The Agreement and
Supplemental Agreement allocate 15% of settlement funds to the state and 85%
of funds directly to local governments according to the percentages in Exhibit G
of the Agreement.9 The state’s 15% of settlement monies are held in the Opioid
Abatement Reserve (Reserve) established by state law and may be used only
as appropriated by the General Assembly.10 Except for litigation expenses, all
settlement funds, regardless of allocation, must be used for opioid remediation
activities, such as to expand prevention, harm reduction, treatment, and
recovery services.11

15+85
Decision-
Making Process ALLOCATION OF SETTLEMENT FUNDS

15%
State Share

85%
Local
Government
Share

15% STATE SHARE

Fifteen percent (15%) of North Carolina’s settlement funds are allocated to the
state and held in the Opioid Abatement Reserve (Reserve) established by state
law.12 Reserve monies may be used only to cover the state’s litigation expenses and
for opioid remediation, and the General Assembly must appropriate the monies
prior to their allocation or use.13 State law also established the Opioid Abatement
Fund (State Fund) in the North Carolina Department of Health and Human Services
(DHHS).14 The State Fund includes Reserve monies directly appropriated by
the General Assembly and all interest and investment earnings from State Fund
monies.15 The General Assembly has previously appropriated monies from the State
Fund to DHHS and other entities (e.g., the North Carolina Association of County
Commissioners) through the state’s annual budget process.16

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GUIDE FOR COMMUNITY ADVOCATES
ON THE OPIOID SETTLEMENT

North Carolina
Decision- 85% LOCAL GOVERNMENT SHARE
Eighty-five percent (85%) of North Carolina’s settlement funds are allocated
Making Process directly to local governments according to the percentages in Exhibit G of the
(Continued)
Agreement.17 Local governments receiving settlement funds may choose between
Option A and/or Option B.18 Localities that choose Option A must use their
settlement funds for the “High-Impact Opioid Abatement Strategies” specified
in Exhibit A of the Agreement such as to support naloxone distribution, syringe
service programs, and evidence-based addiction treatment.19 Localities that select
Option B may choose strategies from a broader list of permissible uses (i.e., Exhibit
B) but must engage in a collaborative, strategic planning process prior to spending
their settlement funds,20 at least every four years thereafter,21 and whenever the
locality seeks to implement a new strategy that is not a “High-Impact Opioid
Abatement Strategy.”22 The strategic planning process must result in a report and
non-binding recommendations.23 A local government may select a combination of
Option A and Option B strategies, with the collaborative, strategic planning process
required only for funds allocated to Option B strategies.24
Local governments must keep their opioid settlement funds in a designated special
revenue fund and are prohibited from commingling settlement funds with other
local government monies, selling their rights to future settlement payments, or
otherwise delegating responsibility for deciding how to use the funds.25 A local
government’s governing body (i.e., county board of commissioners or city council)
must authorize the spending of its opioid settlement funds in its budget or by
adopting a separate resolution.26 The budget and/or resolution must specify the
amount, purpose, and duration of the funding, and must identify each funded
strategy by citing the corresponding provision in the Agreement’s Exhibit A or
Exhibit B.27 Settlement monies may not be used to reimburse expenditures incurred
prior to a local government’s signing of the Agreement.28 A municipality receiving
funds may direct its share of settlement funds to the county or counties in which it
is located.29

LOCAL EXAMPLE
In January 2023, the Montgomery County Board of Commissioners approved
spending $350,000 in opioid settlement funds on increased naloxone
distribution ($220,000), recovery support services ($100,000), and early
intervention for youth ($30,000).30 FirstHealth of the Carolinas, which
received the bulk of the funding, said they will use the funds “to hire a full-
time certified peer support specialist in Montgomery County, ensure greater
distribution of harm reduction kits and work to address early intervention
and stigma through community education and outreach efforts.”31

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GUIDE FOR COMMUNITY ADVOCATES
ON THE OPIOID SETTLEMENT

North Carolina
Tracking Funds • Local governments must submit annual financial reports to the Attorney General
that detail their use of opioid settlement funds and include the information
and Accountability
specified in Exhibit E of the Agreement.32
• Each local government also must submit to the publicly accessible state opioid
settlement dashboard (1) any budget or resolution authorizing the expenditure
of settlement funds; (2) any reports and non-binding recommendations from
collaborative strategic planning; (3) their annual financial report; and (4) an annual
impact report as outlined in Exhibit F.33
• Although neither state law nor the Agreement include any explicit public
reporting requirements applicable to the 15% state share, the state has
committed to sharing how the General Assembly appropriates these funds.34
• Local settlement funds are subject to an annual audit, and local governments
must report any misspent funds to the Attorney General.35 If a local government
uses settlement funds for impermissible purposes, future payments to the local
government will be reduced by an equal amount or the Attorney General can
seek to recover and redistribute the misused funds.36

Engaging in • Each county is required to hold at least one annual meeting in which all
municipalities within the county are invited to receive input on how to use
the Process
its opioid settlement funds and encourage collaboration between local
governments. Attend these meetings, which must be open to the public.37
• Participate in the collaborative strategic planning process in counties and
municipalities selecting Option B; localities must engage stakeholders with lived
experience as part of the process.38 Advocate for robust community engagement
and the meaningful inclusion of people with lived experience in decision-making
about how to use settlement funds regardless of whether a locality chooses
Option A or B.
• Attend hearings and provide public comment to county boards of
commissioners and city councils as they develop budgets and/or consider
resolutions to allocate opioid settlement funds.
• Watch for future funding opportunities from the state and local governments. The
Agreement references the ability for local governments to contract with or make
grants to nonprofits and other entities,39 and the North Carolina Department of
Health and Human Services (DHHS) has previously solicited grant proposals for
settlement funds.

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GUIDE FOR COMMUNITY ADVOCATES
ON THE OPIOID SETTLEMENT

North Carolina
Engaging in • The North Carolina Department of Health and Human Services
([email protected]) and North Carolina Association of County
the Process
(Continued) Commissioners ([email protected]) offer technical assistance
on the planning, implementation, and evaluation of settlement spending and
abatement strategies. For legal questions about the opioid settlements, email
[email protected].
• Check out Community Education Group’s Appalachia Opioid Remediation (AOR)
Local Opioid Settlement Spending Database and sign up for their AOR email
alerts here. CEG’s AOR initiative provides opioid settlement spending updates
from the 13 states of Appalachia.40

Additional CORE-NC (COMMUNITY OPIOID RESOURCES ENGINE FOR NORTH

CAROLINA)
Resources North Carolina Opioid Settlements
General Support Resources (on Opioid Settlements)
Data Dashboard – NC Payment Schedule
Reporting Overview
MORE POWERFUL NC
NC Memorandum of Agreement Resource Center
NORTH CAROLINA DEPARTMENT OF JUSTICE
Frequently Asked Questions on the Memorandum
of Agreement On the Allocation and Use of Opioid
Settlement Funds in North Carolina
NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES
Opioid and Substance Use Action Plan Data Dashboard

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GUIDE FOR COMMUNITY ADVOCATES
ON THE OPIOID SETTLEMENT

North Carolina
References Last updated June 5, 2023.
1. From settlements with distributors McKesson, AmerisourceBergen, Cardinal Health and
manufacturer Johnson & Johnson only. North Carolina is also participating in several settlements that
are likely to be finalized later this year, e.g., CVS, Walgreens, Walmart, Allergan, and Teva. See KHN’s
“The Right to Know: Where Does Your State Stand on Public Reporting of Opioid Settlement Cash?”
interactive transparency map (located mid-article; click “North Carolina” for state-specific
participation information) and OpioidSettlementTracker.com’s Global Settlement Tracker for more
information.
2. Settlement funds governed by the Supplemental Agreement for Additional Funds from Additional
Settlements of Opioid Litigation (Supplemental Agreement) are allocated 15% to the state, 84.62% to
local governments, and 0.38% to a Local Counsel Fee Fund. Supplemental Agreement § III(B)(2). See
also Supplemental Agreement § IV (Local Counsel Fee Fund).
3. The Memorandum of Agreement Between the State of North Carolina and Local Governments on
Proceeds Relating to the Settlement of Opioid Litigation (Agreement) applies to settlements with
Johnson & Johnson (Janssen), AmerisourceBergen, Cardinal Health, and McKesson and various
bankruptcy resolutions, including the bankruptcy resolutions concerning Purdue and Mallinckrodt.
See Agreement § Background Statement (defining “Bankruptcy Resolution” and “MOA”), § A
(defining “National Settlement Agreement” and “Settling Defendants”), § H(5) (“Application of
MOA to settlements and bankruptcy resolutions”). The Supplemental Agreement for Additional
Funds from Additional Settlements of Opioid Litigation (Supplemental Agreement) applies to
settlements with Walmart, Teva, Allergan, CVS, and Walgreens. Supplemental Agreement § II(B).
The state law establishing the Opioid Abatement Reserve and Opioid Abatement Fund applies to
all opioid-related settlement agreements. See N.C. S.L. 2022-74, §§ 9F.1(a) (“The Opioid Abatement
Reserve (Reserve) is established in the General Fund to maintain (i) [McKinsey settlement] funds …
(ii) any other funds received by the State as a result of a settlement … relating to claims regarding
the manufacturing, marketing, distribution, dispensing, or sale of opioids, and (iii) funds received by
the State as a beneficiary of a confirmation order by a bankruptcy court relating to claims regarding
the manufacturing, marketing, distribution, dispensing, or sale of opioids”), 9F.1(a1). Note that many
states’ mechanisms for opioid settlement spending were designed to comply with the requirements
of the Distributor and Janssen settlement agreements, which require (among other provisions)
that a minimum of 85% of settlement funds be spent on opioid remediation expenditures. Section
V.B.1. Subsequent settlements require varying thresholds of opioid remediation spend; the CVS
and Walgreens agreements, for instance, require a minimum of 95.5% and 95% opioid remediation
spending, respectively. Section V.B.1. Keep an eye out for the ways states will amend their spending
mechanisms, if at all, to comply with subsequent settlement terms.
4. Agreement § B(2); Supplemental Agreement § III(B)(2). The Supplemental Agreement technically
allocates 15% to the state, 84.62% to local governments, and 0.38% to a Local Counsel Fee Fund.
Supplemental Agreement § III(B)(2).
5. Agreement § E(5).
6. Agreement § F(6)(c). See also Supplemental Agreement § III(F)(1).
7. Agreement § F(6)(c). See also Supplemental Agreement § III(F)(1).
8. See OpioidSettlementTracker.com’s “States’ Initial Promises to Publicly Report Their Opioid
Settlement Expenditures.”
9. Agreement § B(2)-(3); Supplemental Agreement § III(B)(2)-(3). The Supplemental Agreement
technically allocates 15% to the state, 84.62% to local governments, and 0.38% to a Local Counsel
Fee Fund. Supplemental Agreement § III(B)(2). But see Supplemental Agreement § IV (providing that
the full 85% will be allocated to local governments “[i]f one or more National Counsel fails to release
its North Carolina client counties and/or municipalities from any contractual obligation to pay legal
fees or costs relating to their representation of North Carolina counties and municipalities regarding
opioid claims and litigation against the Settling Defendants and Additional Settling Defendants…”).
10. N.C. S.L. 2021-180, § 9F.1(a), as amended by N.C. S.L. 2022-74, § 9F.1(a).
11. Agreement § B(5); Supplement Agreement § III(B)(5).
12. Agreement § B(2); Supplemental Agreement § III(B)(2); N.C. S.L. 2021-180, § 9F.1(a), as amended by N.C.
S.L. 2022-74, § 9F.1(a).
13. N.C. S.L. 2021-180, § 9F.1(a), as amended by N.C. S.L. 2022-74, § 9F.1(a). See also Agreement § B(5);
Supplemental Agreement § III(B)(5).
14. N.C. S.L. 2021-180, § 9F.1(a), as amended by N.C. S.L. 2022-74, § 9F.1(a1).

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GUIDE FOR COMMUNITY ADVOCATES
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North Carolina
References 15. N.C. S.L. 2021-180, § 9F.1(a), as amended by N.C. S.L. 2022-74, § 9F.1(a1).
16. See, e.g., N.C. S.L. 2021-180, § 9F.1(b); N.C. S.L. 2022-74, § 9F.1(c).
(Continued)
17. Agreement § B(2)-(3); Supplemental Agreement § III(B)(2)-(3). The Supplemental Agreement
technically allocates to local governments only 84.62% of funds from settlements with Walmart,
Teva, Allergan, CVS, and Walgreens, with the remaining 0.38% allocated to a Local Counsel Fee
Fund. Supplemental Agreement §§ II(B), III(A)(2)-(4), III(B)(2). But see Supplemental Agreement §
IV (providing that the full 85% will be allocated to local governments “[i]f one or more National
Counsel fails to release its North Carolina client counties and/or municipalities from any
contractual obligation to pay legal fees or costs relating to their representation of North Carolina
counties and municipalities regarding opioid claims and litigation against the Settling Defendants
and Additional Settling Defendants…”).
18. Agreement § E(5). See also Supplemental Agreement § III(E)(1) (“Local Governments shall expend
Additional Funds according to the requirements for Opioid Settlement Funds stated in [the
Agreement’s] section E.”)
19. Agreement § E(5)(a)(i); Agreement Ex. A.
20. Agreement § E(5)(b)(i)-(ii).
21. Agreement § E(5)(b)(iii).
22. Agreement § E(5)(b)(iv).
23. Agreement § E(5)(b)(ii).
24. See Question 39 of “Frequently Asked Questions on the Memorandum of Agreement on the
Allocation and Use of Opioid Settlement Funds in North Carolina” (Updated August 2022).
25. Agreement §§ D(1), (2) (“Although counties or municipalities may make contracts with or grants
to a nonprofit, charity, or other entity, counties or municipalities may not assign to another entity
their rights to receive payments from the national settlement or their responsibilities for funding
decisions”). See also Agreement § D(3) (“The funds in the special revenue fund may be invested,
consistent with the investment limitations for local governments, and may be placed in an
interest-bearing bank account. Any interest earned on the special revenue fund must be used in a
way that is consistent with this [Agreement].”); Supplemental Agreement § III(D).
26. Agreement § E(6)(a). See also Supplemental Agreement § III(E)(1) (“Local Governments shall
expend Additional Funds according to the requirements for Opioid Settlement Funds stated in
[the Agreement’s] section E.”)
27. Agreement § E(6)(b). See also Supplemental Agreement § III(E)(1).
28. Agreement § E(1). See also Supplemental Agreement § III(E)(1).
29. Agreement § B(4)(b); Supplemental Agreement § III(B)(4) (“Consistent with the manner in which
[the Agreement] section B.4.b has been interpreted by the parties to the [Agreement] with respect
to Opioid Settlement Funds, a municipality that directs Local Additional Abatement Funds to the
county or counties in which it is located pursuant to [Agreement] section B.4 shall be relieved of
any reporting or other obligations under the [Agreement] with respect to the redirected funds.”)
30. “A Resolution by the County of Montgomery to Direct the Expenditure of Opioid Settlement
Funds” (January 17, 2023).
31. FirstHealth of the Carolina’s efforts are supported by both county opioid settlement dollars and
a matching grant from Vital Strategies. See “Vital Strategies Grant Allows FirstHealth to Expand
Opioid Response Efforts in Montgomery County.”
32. Agreement § F(6)(a), (b) (“The annual financial report shall be provided to the North Carolina
Attorney General by emailing the report to [email protected], within 90 days of the last
day of the state fiscal year covered by the report.”) See also Supplemental Agreement § III(F)(1)
(applying the Agreement’s auditing, compliance, reporting, and accountability provisions to funds
covered by the Supplemental Agreement).
33. Agreement § F(6)(c). See also Supplemental Agreement § III(F)(1). Budgets or resolutions
authorizing expenditures must be submitted within 90 days of passage. Agreement § F(6)(c)
(i). Report(s) and non-binding recommendations from collaborative strategic planning must be
submitted within 90 days from when the report and recommendations are submitted to the local
governing body for consideration. Agreement § F(6)(c)(ii). Annual financial reports and impact
reports must be submitted within 90 days of the end of the fiscal year covered by the reports.
Agreement § F(6)(c)(iii)-(iv).
34. See OpioidSettlementTracker.com’s “States’ Initial Promises to Publicly Report Their Opioid
Settlement Expenditures.”
35. Agreement § F(1). See also Supplemental Agreement § III(F)(1).

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North Carolina
References 36. Agreement §§ E(2) (“If a Local Government spends any Opioid Settlement Funds on an
expenditure inconsistent with the terms of this [Agreement], the Local Government shall have 60
(Continued)
days after discovery of the expenditure to cure the inconsistent expenditure through payment of
such amount for opioid remediation activities through budget amendment or repayment”), E(3).
37. Agreement § E(4).
38. See Agreement Ex. C, § A-9.
39. Agreement § D(2).
40. AL, GA, KY, MD, MS, NY, NC, OH, PA, SC, TN, VA, WV.

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