The bill amends Section 1 of P.L.2024, c.35, to allocate funds from various state and federal sources for clean water and drinking water projects in New Jersey. It specifies that the Department of Environmental Protection will receive appropriations from several funds, including the "Clean Water State Revolving Fund" and the "Drinking Water State Revolving Fund," to support loans, technical assistance, and state matching requirements for federal grants. The bill also allows for the transfer of funds between the Clean Water and Drinking Water State Revolving Funds to address public health threats and meet financing needs for eligible projects. Additionally, it authorizes zero-interest and principal-forgiveness loans for local government units and public water utilities, with provisions for principal forgiveness for combined sewer overflow projects and grants for disadvantaged communities.

Furthermore, the bill establishes a framework for principal forgiveness and zero-interest loans for various environmental infrastructure projects, particularly focusing on clean water initiatives. It sets maximum amounts of principal forgiveness based on project types and borrower affordability, while also allocating significant funding for drinking water projects addressing emerging contaminants and lead service line replacements. The Department of Environmental Protection is empowered to adjust principal forgiveness amounts as additional funds become available, ensuring flexibility in meeting the state's infrastructure needs. The legislation emphasizes compliance with environmental laws and establishes a deadline for eligibility lists and loan authorizations, aiming to enhance the financing framework for critical environmental infrastructure projects across New Jersey.