Eligible California water systems have less than 5 months to secure their share of the multi-billion-dollar PFAS drinking water settlements or risk permanently losing access to these funds — after already waiving their right to sue the manufacturers in the future. This once-in-a-generation funding opportunity for local governments that manage drinking water utilities should not be missed.

In 2023, through the Aqueous Film-Forming Foam Multidistrict Litigation (AFFF MDL) against PFAS manufacturers, approximately $14 billion was set aside as part of settlements between manufacturers 3M and DuPont and drinking water systems. But the opportunity for water systems to submit certain claims to these funds will expire in 2026.

The settlements were structured in two phases:

Phase One: For water systems that had already detected PFAS in their source water by end of June 2023.
Phase Two: For water systems that did not detect PFAS in their water (any PFAS, at any concentration) until later, as long as they serve more than 3,300 people.

Throughout the country, water systems that submitted claims as part of Phase One have started receiving initial payments. Unlike the typical class action suit that offers very small amounts to individual claimants, the AFFF MDL has secured real money that will help thousands of U.S. water systems offset costs to remove PFAS from their drinking water and even support other budget needs. Municipalities must act quickly, as missing deadlines means missing out on these funds for good.

The Clock is Ticking for Phase Two Systems

Phase Two water systems (again, those who did not detect any PFAS until after June 2023) still have the opportunity to submit their claims – but time is running out. While eligible public water systems were automatically included in the settlements (unless they opted out in 2023), no payments will be made unless a complete and compliant claim is submitted by the 2026 deadlines. Only systems that complete required testing and submit properly documented claims before the 2026 deadlines will receive compensation.

Agencies hoping to receive settlement payouts should start immediately on the following steps to avoid missing out.

Step 1: Conduct PFAS Testing at Every Wellhead or Surface Water Intake

Before a water utility can submit a settlement claim, it must first test for PFAS at each individual wellhead or surface water intake. Some may assume that existing data from UCMR-5, a U.S. EPA program requiring testing of unregulated contaminants, will suffice.  However, UCMR-5 required testing only at the entry points to distribution systems, not individual water sources. This means many systems will need additional testing to satisfy claims requirements.

For many utilities, testing costs can reach tens of thousands of dollars, depending on the number of wells and surface water intakes.

Key Deadline #1: March 31, 2026

Settlement participants can submit separate claims requesting reimbursement for testing costs (even if no PFAS are detected), but the deadline is March 31, 2026. The claim must include complete documentation of sampling, analysis and related expenditures, so water systems should move quickly to complete testing and prepare their submissions.

Step 2: Act Now to Meet the 2026 Action Fund Deadline

Unless they opted out, municipalities that miss the Action Fund deadline will lose eligibility for settlement funds, after having already waived their right to file future lawsuits against 3M or DuPont for PFAS contamination in their drinking water. Municipalities must stay proactive and on schedule with all settlement requirements to avoid losing funds to which they may be entitled.

Key Deadline #2 July 31, 2026

To secure a share of the $14 billion settlements – which could be in the tens of millions of dollars for a single municipality– claims must be submitted July 31, 2026 for both 3M and DuPont settlements. Claims submissions require:

Baseline PFAS testing results for each water source
Documentation of the production capacity
Annual production data of each source.

Step 3: Seek Additional Funding for Expenses Already Incurred 

Many municipalities already have or are in the process of spending significant funds to address PFAS contamination. Examples include taking contaminated wells offline, constructing treatment facilities, drilling new wells, or purchasing replacement water to maintain safe service.

Key Deadline #3: August 1, 2026

Municipalities that incur such expenses by August 1, 2026 can submit a claim to receive additional funding under the Special Needs fund.

These claims can provide additional recovery beyond what’s available through the Action Fund. Applicants must supply detailed documentation demonstrating both the necessity of the project and the associated costs. For proactive municipalities and utilities that have already invested in PFAS mitigation, this program provides a critical chance to recover unexpected or extraordinary expenses.

Why Acting Now Matters

Time is critical: delaying action could jeopardize or limit recovery opportunities, and each month that passes narrows the window to claim these potentially substantial funds. Cities in California and across the country have already received eight and nine-figure payouts, demonstrating the scale of potential recovery available. With billions on the line, municipalities can’t afford to miss out on this opportunity, but it can be challenging to complete all the requirements within the limited timeline, especially when precision and accuracy are crucial.

Local governments do not have to go through the settlement process alone. By partnering with legal counsel experienced in water contamination litigation, systems can rest assured that their claims are completed optimally and their communities are not left behind.

“These settlements will help communities across the country address the devastating costs of PFAS contamination. While they represent only part of a wider effort needed to address the environmental and public health crises caused by decades of PFAS use, this financial recovery is a crucial first step. SL Environmental Law Group remains committed to holding the PFAS manufacturers – not utilities and their ratepayers – accountable for the costs of contamination caused by PFAS.” -Ken Sansone, Senior Partner, SL Environmental Law Group

The Next Step

Now is the appropriate time to seek clarification about eligibility, documentation requirements, or timing. If your agency would like to better understand where it stands, or is ready to begin preparing its claim, SL Environmental Law Group is available to provide guidance and answer questions. Early evaluation can help ensure no opportunities are missed.

To learn more or request additional information, contact Kyla Tengdin at ktengdin@slenvironment.com

Summary of Critical 2026 Deadlines

March 31, 2026 – Deadline to submit PFAS testing reimbursement claims
July 31, 2026 –Deadline to submit Action Fund claims
August 1, 2026 – Deadline to submit Special Needs Fund claims

About SL Environmental Law Group

SL Environmental Law Group is actively involved in representing more than 300 entities in the AFFF MDL, including many municipal drinking water providers. The firm anticipates recovering more than 1 billion for its clients from the first phase of the 3M and DuPont settlements alone, with additional recoveries expected from systems in phase 2 of the 3M and DuPont settlements and settlements with other manufacturers. For more information, please visit: www.slenvironment.com