New DOR Guidance on PFAS Settlement Funds

Communities that now or in the future receive settlement funds as a result of the class action litigation against 3M and DuPont for PFAS contamination of the public water supply may choose to treat those funds in one of two ways, according to a bulletin (DLS BUL-2025-4) issued by the Department of Revenue this month. As is the default rule, funds may be treated as general fund revenue and certified as free cash. Alternatively, towns may place the proceeds in a separate special revenue fund under G.L. c. 44, § 53 and expend those funds with appropriation. In either case, the funds must be used for the purposes of the settlement agreement—remediation of contaminated water supplies.