Watershed Management PILOT Program Description and Legislation
The Watershed Management PILOT program is the method that the DCR compensates communities which contain the land and water bodies that comprise one of the nation's largest unfiltered water supply systems. The Payment in Lieu of Taxes program guarantees regular and stable payment to the 29 communities shown below.
The Watershed Management PILOT program is mandated by Massachusetts General Laws Chapter 59, Section 5G . This legislation updated old payment laws MGL Chapter 59 Sections D, E, & F, which were written in the 1940s, and did not value lands in all communities currently entitled to payments. The current PILOT law was first ratified in 1984 for the Quabbin Reservoir and Ware River watersheds. The law was amended in 1987 to include communities in the Wachusett and Sudbury Reservoir watershed.
How Watershed Management PILOT payments are determined
The Watershed Management PILOT amount is determined by multiplying the Department of Revenue (DOR) valuation of DCR Division of Water Supply Protection land by the local commercial tax rate. DOR is responsible for setting the value of state-owned land every four years, pursuant to their guidelines on segmenting lands into prime lots (the requisite frontage and area needed to build a single family home in each community), rear acreage and unbuildable acreage, as well as discount adjustments for the total number of prime lots and total acreage. DCR's permanently protected open space, therefore, is valued as if it is still potentially developable land and then the PILOT is calculated using the same rate structure as commercial or industrial property.
The latest DOR revaluation took place in the first half of the year 2013; the results are reflected in the FY2014 PILOT amounts. The revaluation takes into account all lands purchased by the DCR over the previous four years as well as any changes in land values.
Legislative provisions state that the Watershed Management PILOT payment can NEVER be less than that of the previous year, even if the value of the land or tax rates decrease.
Where Watershed Management PILOT funds come from
Money for the PILOT program comes from the Massachusetts Water Resources Authority (MWRA) rate payers who use the reservoir waters. They pay their water bills to the MWRA, which provides the DCR with the funds needed to make the PILOT payment. The DCR makes an annual payment in full to each community in the program.
Watershed Management PILOT values
Since 1985, over $125 million has been distributed in watershed protection PILOT payments. The significant increase every four years represents the integration of the DOR revaluation that takes into account land acquisition and changes in land values.
Please click on the appropriate date to see a break down by community of the Payment in Lieu of Taxes made by DCR Office of Watershed Management.