This bill appropriates funds to the New Jersey Department of Environmental Protection (DEP) for various environmental infrastructure projects for the fiscal year 2026, utilizing resources from the Clean Water State Revolving Fund, the Drinking Water State Revolving Fund, and the Interim Environmental Financing Program Fund. The appropriations aim to support clean and drinking water project loans, technical assistance, and provide the necessary state match for federal grants under the Clean Water Act and Safe Drinking Water Act. 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 the DEP to offer zero-interest and principal-forgiveness loans to local government units and public water utilities, particularly for projects addressing combined sewer overflow issues, while emphasizing support for disadvantaged communities.

Furthermore, the bill establishes a framework for principal forgiveness and blended interest rate loans for various environmental infrastructure projects, with specific provisions for projects based on their costs and affordability scores. It allocates significant funding for principal forgiveness, including $27 million for emerging contaminant projects and $68 million for lead service line replacements. The bill also authorizes supplemental zero-interest loans for projects impacted by Hurricane Sandy and outlines requirements for financing loans, including compliance with environmental laws and regulations. The eligibility for loans will expire on July 1, 2026, unless a loan agreement is executed by that date, ensuring that the state can effectively support critical water infrastructure projects while adhering to federal and state regulations.