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LRB-3464/1
TJD&SWB:amn&wlj
2021 - 2022 LEGISLATURE
June 7, 2021 - Introduced by Senator Testin, cosponsored by Representative
Plumer. Referred to Committee on Health.
SB386,1,2 1An Act to create 165.12 of the statutes; relating to: settlement of the
2multidistrict opiate litigation.
Analysis by the Legislative Reference Bureau
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
settlement agreement of the multidistrict opiate litigation.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB386,1 1Section 1. 165.12 of the statutes is created to read:
SB386,2,4 2165.12 Opioid settlement. (1) Definition. In this section, “opiate litigation”
3means the proceedings titled In re: National Prescription Opiate Litigation, Case
4No.: MDL 2804.
SB386,2,11 5(2) Settlement proceeds. The attorney general shall cooperate with local
6governments in the state that are parties in the opiate litigation in entering into a
7joint settlement agreement of the legal or equitable claims of the state, subject to sub.
8(7), and the claims of local governments regarding opioids with any person that has
9engaged in the manufacture, marketing, promotion, distribution, or dispensing of an
10opioid product, including any person named as a defendant in the opiate litigation,
11if all of the following are satisfied:
SB386,3,2
1(a) The joint committee on finance approves the proposed settlement
2agreement under the procedure under s. 165.08 (1).
SB386,3,43 (b) The settlement agreement or any document that effectuates the settlement
4identifies 30 percent of the settlement proceeds as payable to the state.
SB386,3,75 (c) The settlement agreement or any document that effectuates the settlement
6identifies 70 percent of the settlement proceeds as payable to local governments in
7the state that are parties in the opiate litigation.
SB386,3,22 8(3) Moneys payable to the state. (a) Moneys payable to the state under sub.
9(2) (b) shall be allocated to the department of health services for expenditure for
10purposes that comply with any settlement agreement or order of the court. In order
11to expend moneys payable to the state under sub. (2) (b), the department of health
12services shall submit by April 1 of each year until the moneys are expended to the
13joint committee on finance a proposal of expenditure for the next fiscal year. If the
14cochairpersons of the joint committee on finance do not notify the department within
1514 working days after the date of the submittal under this paragraph that the
16committee has scheduled a meeting for the purpose of reviewing the expenditure
17proposal, the department may expend the moneys as described in the proposal. If,
18within 14 working days after the date of the submittal under this paragraph by the
19department, the cochairpersons of the committee notify the department that the
20committee has scheduled a meeting for the purpose of reviewing the expenditure
21proposal, the department may expend the moneys only upon approval by the
22committee.
SB386,4,223 (b) If the department of health services seeks to deviate from the expenditure
24proposal during the fiscal year for which the expenditure proposal approved under
25par. (a) applies, the department shall submit to the joint committee on finance a

1proposal for the deviation. The joint committee on finance shall review the
2expenditure proposal using the procedure described in par. (a).
SB386,4,6 3(4) Moneys payable to local governments. (a) No money paid or payable to
4the local governments under sub. (2) (c) may be considered moneys of the state.
5Moneys under sub. (2) (c) may be paid directly only to local governments that are
6parties in the opiate litigation.
SB386,4,97 (b) A local government that receives moneys payable to a local government
8under sub. (2) (c) shall deposit the moneys in a segregated account that is subject to
9all of the following:
SB386,4,1210 1. Moneys in the segregated account are considered moneys of the local
11government under s. 66.0603 (1m) and may not be commingled with any other
12moneys of the local government.
SB386,4,1513 2. A local government may expend moneys of the segregated account solely for
14purposes identified as approved uses for abatement in the settlement agreement or
15by court order, subject to sub. (6).
SB386,4,1716 3. A local government may not use moneys from the segregated account to
17substitute for budgeted moneys from the other sources.
SB386,4,2018 4. A local government may allocate moneys from the segregated account to any
19other political subdivision in the state if there is an agreement requiring the other
20political subdivision to expend the moneys for the purposes described in subd. 2.
SB386,4,2221 5. Local governments may combine moneys from their segregated accounts if
22each local government conforms to the reporting requirement under par. (c).
SB386,4,2423 6. A local government shall include the segregated account in the local
24government's typical audit process.
SB386,5,3
1(c) By May 1 annually, a local government that receives moneys under sub. (2)
2(c) shall submit a report to the department of justice and joint committee on finance
3that includes all of the following:
SB386,5,54 1. The amount of money in the local government's segregated account described
5under par. (b) as of December 31 of the previous year.
SB386,5,76 2. An accounting of the receipts and disbursements from the segregated
7account described under par. (b) in the previous year.
SB386,5,11 8(5) Sale of interest in proceeds. (a) Subject to par. (c), a local government may
9sell for cash or other consideration the right to receive any payment under a
10settlement agreement and this section if the proceeds of the sale are deposited in the
11segregated account described under sub. (4) (b).
SB386,5,1612 (b) A local government may pledge, grant a lien on, or grant security interest
13in payments to effectuate a sale under this subsection. Obligations issued under this
14subsection are governmental obligations that are issued for a public purpose but are
15not considered debt of the local government and are not calculated for the purposes
16of any constitutional or statutory debt limitation.
SB386,5,2117 (c) Any sale by a local government that is authorized under this subsection
18shall be approved by a majority vote of the governing body of the local government
19that is selling the payments. The governing body's approval of the sale under this
20paragraph is considered conclusive as to the adequacy of the consideration for the
21sale.
SB386,5,2422 (d) The limitations and provisions of s. 893.77 apply to any obligations issued
23under this subsection. This subsection is an alternative procedure to the procedures
24under ch. 67.
SB386,6,8
1(6) Responsibilities for attorney fees. If a separate fund created in a
2settlement agreement for the opiate litigation is insufficient to pay the entire amount
3of attorney fees and expenses owed by local governments, a local government may
4use a portion of the amounts payable to local governments under sub. (2) (c) to
5supplement amounts owed by the local government for attorney fees and expenses.
6The state has no responsibility for payment of a local government's attorney fees or
7expenses, and those local government attorney fees or expenses may not be paid from
8the amounts payable to the state under sub. (2) (b).
SB386,6,12 9(7) Claims by nonparties to opiate litigation. (a) Nothing in this section shall
10alter any local government's right to pursue, litigate, or resolve a lawsuit or claim as
11a party to the opiate litigation or a related proceeding if the lawsuit or claim was
12pending as of June 1, 2021.
SB386,6,1513 (b) A political subdivision of the state, or an officer or agent of any political
14subdivision of the state, that was not a party as of June 1, 2021, to the opiate
15litigation may not do any of the following:
SB386,6,1716 1. Maintain a claim to proceeds of any settlement agreement that is described
17under sub. (2).
SB386,6,2118 2. Maintain any claim or commence any action related to opioids against a
19person that is identified as a party defendant in the opiate litigation that would be
20released in a settlement agreement if the political subdivision, officer, or agent was
21a party to a settlement agreement that is described under sub. (2).
SB386,6,2222 (End)
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