The bill amends Section 1 of P.L.2024, c.35, to allocate funds for clean and drinking water projects in New Jersey, drawing from various sources such as the "Clean Water State Revolving Fund" and the "Drinking Water State Revolving Fund." It allows for the transfer of funds between these two funds to address public health threats and meet financing needs for eligible projects. The bill also authorizes the Department of Environmental Protection to provide zero-interest and principal-forgiveness loans to local government units or public water utilities, with specific provisions for disadvantaged communities, including up to $60 million for principal forgiveness and grants of up to $2 million per applicant for planning and design costs.

Additionally, the bill outlines a framework for principal forgiveness and zero-interest loans for environmental infrastructure projects, with specific limits on the amount of forgiveness available per borrower. It emphasizes the importance of addressing emerging contaminants and climate change, prioritizing projects that meet environmental and affordability criteria. The bill also updates financing provisions, allowing loans to cover up to 100% of total allowable amounts under certain conditions, and establishes eligibility criteria for municipalities under State financial supervision. Overall, the bill aims to enhance water quality and resilience through targeted financial support while ensuring compliance with existing regulations.