Bill Summary – FastDemocracy

SESSION OF 2021
    SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2412
          As Amended by House Committee on Judiciary

Brief*
     HB 2412, as amended, would create the Kansas Fights
Addiction Act (Act), which would address use of funds
received from opioid litigation and establish limits on future
opioid litigation by municipalities.

New Funds
     The bill would establish in the State Treasury two new
funds administered by the Attorney General: the Kansas
Fights Addiction Fund (KFA Fund) and the Municipalities Fight
Addiction Fund (MFA Fund). The bill would require the
Attorney General to remit to the State Treasurer all moneys
received by Kansas pursuant to opioid litigation in which the
Attorney General is involved that is dedicated by the terms of
such litigation for the abatement or remediation of substance
abuse or addiction. The bill would require 75 percent of these
moneys be credited to the KFA Fund and 25 percent be
credited to the MFA Fund, and would specify how
expenditures are to be made from the funds.
KFA Fund
     The bill would require moneys in the KFA Fund be
expended for grants approved by the Kansas Fights Addiction
Grant Review Board (Board), which also would be created by
the bill, to qualified applicants for projects and activities that
prevent, reduce, treat, or mitigate the effects of substance
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
abuse and addiction. Such grants could not supplant any
other source of funding, and no moneys from the KFA Fund
could be used for litigation costs, expenses, or attorney fees
related to opioid litigation.
MFA Fund
       Moneys in the MFA Fund would be expended subject to
an agreement among the Attorney General, the Kansas
Association of Counties (KAC), and the League of Kansas
Municipalities (LKM) for projects and activities that prevent,
reduce, treat, or mitigate the effects of substance abuse and
addiction, or to reimburse a municipality for previous
expenses related to substance abuse mitigation or arising
from covered conduct, defined by the bill to include any
conduct covered by opioid litigation that resulted in payment
of moneys into the KFA Fund. Moneys in the MFA Fund could
also be used to reimburse municipalities for payment of
litigation costs, expenses, or attorney fees related to opioid
litigation, after the municipality has first sought payment from
applicable outside settlement sources or settlement fee
funds.
      An agreement among the Attorney General, KAC, and
LKM would determine the method for disbursing money from
the MFA Fund, and the bill would require that moneys be
disbursed to municipalities that have not filed opioid litigation
and municipalities that have filed opioid litigation, but have
entered into an agreement with the Attorney General prior to
January 1, 2022, to release the municipality’s legal claims
arising from covered conduct to the Attorney General and
assign any future legal claims arising from covered conduct to
the Attorney General.

Kansas Fights Addiction Grant Review Board
      The bill would establish the Board under the jurisdiction
of the Attorney General.

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Membership
     The bill would require at least one member of the Board
reside in each of Kansas’ congressional districts. The Board
would consist of 11 members with expertise in the prevention,
reduction, treatment, or mitigation of the effects of substance
abuse and addiction, as follows:
     ●    Two members appointed by the Attorney General,
          one of whom would be designated as chairperson
          and at least one of whom would be appointed after
          consultation with the Kansas Association of
          Addiction Professionals;
     ●    One member appointed by the Governor;
     ●    One member appointed by the President of the
          Senate;
     ●    One member appointed by the Speaker of the
          House of Representatives;
     ●    One member appointed by the Minority Leader of
          the Senate;
     ●    One member appointed by the Minority Leader of
          the House of Representatives;
     ●    One member appointed by LKM;
     ●    One member appointed by KAC;
     ●    One member appointed by the Kansas County and
          District Attorneys Association; and
     ●    One member appointed by the Association of
          Community Mental Health Centers of Kansas.
    Each member would serve at the pleasure of the
appointing authority.

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Duties and Operation
     The bill would require the Board to receive and consider
applications for grants of money from the KFA Fund and
would provide a list of five mandatory and three permissive
factors to be considered or applied in awarding grants.
      The affirmative vote of six members would be required
to approve a grant. The Board could adopt rules and
procedures for its operation, conduct hearings, receive
testimony, and gather information to assist in its powers,
duties, and functions. Members would not receive
compensation or expenses for serving on the Board, would
be required to file a statement of substantial interest, and
would be prohibited from participating in the consideration of
any grant application for which such member has a conflict of
interest.
     The bill would require the Attorney General to provide
administrative support for the Board and to administer,
monitor, and assure compliance with grant conditions, and
would allow the Attorney General to enter into an agreement
with the Sunflower Foundation to provide such support and
administration. The bill would establish provisions regarding
transfer of moneys, fees, and earnings on moneys that could
be included in such agreement. The bill would state the
Attorney General could take any action necessary to ensure
the greatest possible recovery from opioid litigation and to
seek funds for the KFA Fund and the MFA Fund.
     The bill would require, not later than March 1 of each
year, the Board to submit to the Speaker of the House of
Representatives, the President of the Senate, the Governor,
and the Attorney General a report of the Board’s activities
during the prior calendar year, including:
     ●    An accounting of moneys deposited into and
          expended from the KFA Fund;

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     ●     A summary of each approved grant, including
           certain specified details;
     ●     An explanation of how the Board’s actions during
           the year have complied with the bill’s requirements;
           and
     ●     Any other relevant information the Board deems
           appropriate.
Responsibility for Costs
       The bill would provide that the Attorney General and
each municipality shall be solely responsible for paying all
costs, expenses, and attorney fees arising from opioid
litigation brought under their respective authorities, including
any attorney fees owed to private legal counsel, and may
seek payment or reimbursement of such costs, expenses,
and attorney fees from moneys not deposited in the KFA
Fund.

Limitation on Municipal Litigation
       The bill would prohibit municipalities, on and after
January 1, 2021, from filing or becoming a party to opioid
litigation in any court without the prior approval of the Attorney
General. The bill would require any municipality that filed
opioid litigation on or after January 1, 2021, through the
effective date of the Act, to withdraw from such litigation,
unless the municipality receives approval from the Attorney
General to maintain such litigation. The bill would specify
these provisions would not apply to or affect any municipality
that filed or became a party to opioid litigation litigation in
court prior to January 1, 2021.


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Definitions
     In addition to “covered conduct,” the bill would define
other relevant terms, including: “moneys that are received,”
“opioid litigation,” and “qualified applicant.”

Effective Date
    The bill would be in effect upon publication in the
Kansas Register.

Background
    The bill was introduced by the House Committee on
Appropriations at the request of Representative Finch on
behalf of the Attorney General.

House Committee on Judiciary
      In the House Committee hearing on March 22, 2021, the
Attorney General and representatives of the Association of
Community Mental Health Centers of Kansas, Behavioral
Health Association of Kansas (requesting for-profit treatment
providers be added to the list of qualified applicants), and the
Kansas Association of Addiction Professionals (requesting an
adjustment to the appointments to the Board) testified as
proponents, stating the bill would establish a mechanism for
distributing funds received from litigation against opioid
manufacturers and others who contributed to the opioid
addiction crisis. Under settlement terms, such funds must be
used for drug treatment and addiction abatement. The
Attorney General stated the provisions restricting the ability of
governmental entities to bring future opioid litigation against
settling defendants would maximize the amount of money
Kansas could receive in some future settlements.
Representatives of the KAC and the Kansas County and
District Attorneys Association provided written-only proponent
testimony.
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      Representatives of the following entities provided neutral
testimony:
     ●    City of Overland Park and LKM, with a proposed
          amendment regarding municipalities with separate
          opioid litigation;
     ●    Kansas Association of Criminal Defense Lawyers,
          with proposed amendments to match best
          practices recommended by health experts; and
     ●    Kansas Board of Pharmacy and Kansas State
          Board of Healing Arts (providing written-only
          testimony submitted after the hearing), requesting
          funding for the Kansas Prescription Drug
          Monitoring Program (K-TRACS).
     A representative of the Kansas Trial Lawyers
Association testified as an opponent, stating concerns with
the prohibitions on opioid litigation by municipalities.
       On March 25, 2021, the House Committee amended the
bill to:
     ●    Establish the MFA Fund and add related
          provisions, based on the suggestions of the
          municipality representatives;
     ●    Adjust the appointment authority regarding
          members of the Board, based on the suggestion of
          the Kansas Association of Addiction Professionals;
          and
     ●    Add a provision allowing the Attorney General to
          take any action necessary to ensure the greatest
          possible recovery from opioid litigation.


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Fiscal Information
      According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Office of the
Attorney General (OAG) indicates it is likely the funds
recovered by Kansas through opioid litigation could be in the
millions of dollars. Because the bill allows the OAG to
contract with the Sunflower Foundation for administration of
grant funds, the administrative costs to the OAG would be
negligible and could be absorbed within existing resources.
       The Office of Judicial Administration indicates enactment
of the bill could impact expenditures because it could force
the end of some opioid litigation or prohibit more such
litigation, resulting in fewer court cases. The bill could also
reduce docket fee revenues, but a fiscal effect cannot be
estimated.
     The Kansas Department of Health and Environment
(KDHE) indicates enactment of the bill would result in KDHE
requiring $67,009 in FY 2021 and $69,114 for FY 2022 from
the KFA Fund to support 1.0 FTE position to help coordinate
the program.
     The KAC indicates it would receive funds from grants to
address opioid addiction and associated costs, but it cannot
estimate a fiscal effect. The LKM states enactment of the bill
could have both positive and negative effects on cities,
depending on litigation status and whether a city is awarded a
grant, but it is unable to estimate a fiscal effect.
      Any fiscal effect associated with enactment of the bill is
not reflected in The FY 2022 Governor’s Budget Report.
Kansas Fights Addiction Act; opioid litigation; Attorney General; Kansas Fights
Addiction Fund; Municipalities Fight Addiction Fund; Kansas Fights Addiction Grant
Review Board; substance abuse or addiction; grants; Sunflower Foundation


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