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 for planning and design costs. Additionally, it emphasizes addressing combined sewer overflow issues with a maximum of $20 million allocated for related construction projects.

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 for principal forgiveness based on project types and borrower affordability criteria, ensuring that smaller systems receive adequate support. The bill also allocates significant funding for drinking water projects, including lead service line replacements, and allows the department to adjust loan amounts as additional funds become available. Overall, the amendments aim to enhance New Jersey's water infrastructure, facilitate access to funding for critical projects, and ensure compliance with environmental regulations.