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Committee approves bill to let Kentucky collect opioid-settlement money after bankruptcies
Summary
The House Appropriations and Revenue Committee voted to report House Bill 537, amended by PHS 1, which adjusts how Kentucky receives opioid-settlement funds tied up by multistate bankruptcies so the state can accept and allocate those proceeds.
House Bill 537, as amended by PHS 1, was reported favorably by the House Standing Committee on Appropriations and Revenue on March 4, 2025, after committee members voted 17-0 to recommend the bill for consideration on the floor.
The measure aims to remove a legal barrier created by language in bankruptcy judgments in multistate opioid-related bankruptcies that has prevented Kentucky from receiving settlement funds under the distribution formula established by state law. "House Bill 427 set up the opioid abatement advisory commission committee," said Will Schroeder, senior counsel in the Office of the Attorney General, during the committee hearing. Schroeder said the 2021 law split settlement receipts 50% to the state and 50% to local governments, but recent bankruptcy judgments employed different formulas that have delayed or blocked Kentucky's receipt of money already due to the commonwealth.
The bill does not change the 50/50 allocation formula that governs how settlement money is divided; instead, it modifies statutory language to allow Kentucky to accept funds when bankruptcy court orders include alternative distribution mechanics. "This statute would allow Kentucky to receive the money. There's already money that we should receive as a result of the bankruptcies, but we can't because of our current formula," Schroeder said.
Committee members did not raise substantive amendments at the hearing. After a brief procedural discussion and adoption of the PHS 1 committee substitute, Chair Petrie called the roll for final committee passage. The committee recorded 17 yes votes, 0 nays and 0 passes; the committee report was favorable.
What happens next: the committee will forward House Bill 537, as amended, to the full House for floor consideration. The bill summary and the committee's favorable recommendation were recorded in committee minutes and will be available with other legislative documents.
Votes at a glance: House Bill 537 (PHS 1) — Committee report: favorable; committee vote: 17 yes, 0 no, 0 pass.
