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 (DEP) to provide zero-interest and principal-forgiveness loans to local government units or public water utilities for construction costs, 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 various environmental infrastructure projects, emphasizing affordability criteria and prioritizing projects that address emerging contaminants and lead service line replacements. It establishes maximum funding amounts for different project types, including $30 million for combined sewer overflow projects and $40 million for clean water projects. The bill also clarifies definitions related to funding programs and sets a deadline for loan eligibility, expiring on July 1, 2025, unless a loan agreement is executed. Overall, the bill aims to enhance New Jersey's water infrastructure and environmental health through targeted financial assistance and compliance with environmental regulations.