New JerseyS4221221st Legislature (2026-2027)SenateWALLET

Appropriates funds to DEP for environmental infrastructure projects for FY2027.

Sponsored By: Anthony Angelozzi (Democratic), Owen Henry (Republican), Vincent M. Kearney (Democratic), Nicholas P. Scutari (Democratic), Jerry Walker (Democratic), Benjie E. Wimberly (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

16 provisions identified: 14 benefits, 0 costs, 2 mixed.

Hundreds of water projects qualify for loans

The law lists 194 clean-water projects with estimated total loans of $2.601491599 billion, including $1.951118701 billion from DEP. It also lists 98 drinking-water projects with estimated total loans of $906.375952 million, including $679.781964 million from DEP. Each listed project has a stated loan limit. Another $15.343415 million in loans is authorized for four municipalities receiving Pinelands Infrastructure Trust Fund support. These are project financing opportunities, not direct household payments or guaranteed awards.

Disadvantaged communities get water project help

Disadvantaged communities in the Water Bank’s technical assistance program qualify for planning and design grants from a pool of up to $60 million. Each applicant can receive up to $2 million. A separate pool of up to $60 million forgives construction debt, also up to $2 million per applicant, for communities in DEP’s technical assistance program. Both pools use designated fiscal year 2021–2025 funds or capital funds appropriated or reappropriated for fiscal year 2027. DEP can also transfer up to $5 million in fiscal year 2027 water capital funds to the Infrastructure Bank for technical help.

Existing water projects get priority financing

Twelve listed clean-water projects qualify for supplemental loans: $236.7 million in estimated total loans, including $177.525 million from DEP. Four drinking-water projects qualify for $94.455 million in estimated total loans, including $70.84125 million from DEP. Their zero-interest loans take priority over the main project lists, subject to available funds and each project’s listed amount. DEP can finance 0%–100% of allowable costs; full-share loans use the applicable earlier interim-loan terms, or fiscal year 2027 terms without an interim loan. DEP can also increase specified financing totals by interest accrued on short-term or temporary Interim Environmental Financing Program loans.

Low-cost financing for New Jersey water projects

Effective July 8, 2026, the law funds New Jersey’s fiscal year 2027 water financing program through DEP and the Infrastructure Bank. It uses federal grants, State fund balances, repayments, and earnings for project loans, technical help, and required State matching funds. Listed projects can receive zero-interest loans or debt forgiveness, subject to available money and State and federal requirements. Repayment generally lasts up to 30 years, or 35 years for federal WIFIA loans and 45 years for sewer overflow cleanup. Lower project borrowing costs can ease pressure on water and sewer rates, but the law guarantees no household savings.

Water systems get lead replacement relief

The law provides up to $146 million for lead service line debt forgiveness, plus designated, unallocated fiscal year 2026 funds. Water systems must meet DEP’s affordability rules, which determine their tier. Tier 1 forgiveness reaches 80%, up to $16 million per system; Tier 2 reaches 50%, up to $10 million per system. For costs up to $20 million, the remaining loan carries 50% of the Infrastructure Bank’s market rate; higher costs carry 25%. When forgiveness funds are unavailable, the loan rate is 20% of the Bank’s market rate.

Sandy communities get financing with federal restrictions

Listed Sandy clean-water projects qualify for zero-interest or debt-forgiveness loans, with total Sandy financing capped at $300 million. Financing supports affected communities and projects reducing flood risk or improving resilience to natural disasters and rapid water changes. Sponsors must follow the federal Disaster Relief Appropriations Act of 2013 and additional Sandy loan restrictions. Project awards cannot exceed listed amounts and can be reduced for failure to meet the law’s requirements. The supplied description does not identify the additional restrictions in detail.

Communities get loans for stronger water systems

Stormwater resilience projects share up to $20 million in debt forgiveness, capped at $5 million per borrower whenever practicable. For costs up to $10 million, half is forgiven and the balance carries 50% of the Infrastructure Bank’s market rate. Higher stormwater costs, or stormwater projects without available forgiveness funds, receive loans at 25% of that rate. Water supply resilience improvements share up to $4.5 million, with a $2 million forgiveness cap per borrower whenever practicable. For water supply costs up to $4 million, half is forgiven and the balance carries 50% of the market rate; higher costs carry 25%.

Water systems get help removing emerging contaminants

Projects primarily addressing emerging contaminants—pollutants posing newly identified or returning risks—qualify for targeted debt relief. Clean-water projects share up to $34 million, with full forgiveness for costs up to $10 million whenever practicable. Drinking-water projects share up to $22 million, with forgiveness covering up to 100% of the fund loan, capped at $3 million per applicant. Costs above the respective limits receive loans at 25% of the Infrastructure Bank’s market rate. That same rate applies when forgiveness funds are unavailable.

Affordable communities get more water debt relief

Borrowers meeting DEP’s affordability rules qualify for targeted water project debt relief. Clean-water projects share up to $30 million, plus designated, unallocated fiscal year 2026 funds: full forgiveness reaches $3 million for Tier 1 or $2 million for Tier 2. Highly ranked drinking-water projects excluding lead and emerging contaminants share up to $10 million in federal infrastructure funds, allowing full forgiveness of loans up to $10 million. Another $19 million supports full drinking-water loan forgiveness up to $3 million for Tier 1 or $2 million for Tier 2. Excess clean-water costs and otherwise qualifying projects without available forgiveness funds receive loans at 25% of the Infrastructure Bank’s market rate.

Communities get relief for sewer overflows

Projects reducing or ending combined sewer overflows qualify for two separate $30 million debt-forgiveness pools, plus designated, unallocated fiscal year 2026 funds. The general pool caps forgiveness at $5 million per borrower whenever practicable. For costs over $5 million through $10 million, half is forgiven; the balance carries 50% of the Infrastructure Bank’s market rate. The affordability pool fully forgives costs up to $8 million for DEP Tier 1 borrowers or $7 million for Tier 2 borrowers. Costs above each pool’s upper limit, or projects without available forgiveness funds, receive loans at 25% of the Bank’s market rate.

Communities get water restoration and efficiency relief

Water quality restoration projects share up to $18 million in debt forgiveness; water and energy efficiency projects share up to $12 million. Each pool also accepts designated, unallocated fiscal year 2026 funds, and efficiency projects must meet EPA Green Project Reserve guidance. Whenever practicable, forgiveness is capped at $2 million per borrower. For costs up to $4 million, half is forgiven and the balance carries 50% of the Infrastructure Bank’s market rate. Higher costs, or projects without available forgiveness funds, receive loans at 25% of that market rate.

Grants help communities manage sewer and stormwater

DEP receives federal Sewer Overflow and Stormwater Reuse grant money available by June 30, 2027, for eligible clean-water projects. The law sets no fixed total for those federal grants. Qualifying sewer overflow or stormwater projects also share up to $4 million in debt forgiveness, plus designated, unallocated fiscal year 2026 funds. A fully forgiven loan can cover up to 20% of project costs. A DEP Sewer Overflow and Stormwater Reuse grant must cover the remaining costs.

Small water systems get discounted project loans

Drinking-water systems serving up to 10,000 residents qualify for a loan pool of up to $5 million. Designated, unallocated fiscal year 2026 funds can supplement the pool. Forgiveness cannot exceed $1 million in aggregate or 50% of a project’s total loan. A separate limit caps forgiveness at $2 million per sponsor. Project costs above $2 million receive loans at 25% of the Infrastructure Bank’s market rate.

Very small water systems get debt forgiveness

Drinking-water systems serving fewer than 1,000 people share up to $5 million in debt forgiveness. Systems participating in the Community Engineering Corp or New Jersey Water Association Engineering Contract receive full loan forgiveness. Other qualifying systems can receive full forgiveness up to $2 million per applicant. Their higher project costs receive loans at 25% of the Infrastructure Bank’s market rate.

Water bank gets financing and reserve support

DEP can transfer up to $25 million to the Infrastructure Bank for drinking-water sponsor financing, including reserves, guarantees, investments, or interest. Sources include a $48 million fiscal year 2026 appropriation and designated fiscal year 2021–2025 funds. Specified repayments, interest payments, federal funds, and earnings also support reserves in amounts certified by the Bank’s chairperson or secretary. The Bank can use specified State-fund repayments to recover sponsors’ unpaid bond payments or administrative fees. When sponsors later pay those overdue amounts, the Bank must restore matching deposits to the affected State funds; no new household payment is created.

Water sponsors face loan deadlines and checks

DEP must certify legal compliance before loan closing, and most DEP loans require Infrastructure Bank loan approval. Full-State-funding exceptions cover municipalities under State financial supervision, federal disaster recovery block-grant recipients, and qualifying sewer overflow and stormwater reuse projects. DEP can adjust individual loans by up to 10% for final bids or added compliance costs, and change allocations based on available funds. Many funding sources count only money available by June 30, 2027. Project lists and funding-use authority expire July 1, 2027; sponsors must execute and deliver loan agreements by that date to keep loan entitlement under this law.

Sponsors & Cosponsors

Cosponsors

Carmen F. Amato Jr.
Republican • Senate
Jon M. Bramnick
Republican • Senate
Katie Brennan
Democratic • House
Clinton Calabrese
Democratic • House
Dawn Fantasia
Republican • House
Andrew Macurdy
Democratic • House
Gregory E. Myhre
Republican • House
Joseph Pennacchio
Republican • Senate
Brian E. Rumpf
Republican • House
William B. Sampson IV
Democratic • House
Robert W. Singer
Republican • Senate
Balvir Singh
Democratic • House
Parker Space
Republican • Senate
Douglas J. Steinhardt
Republican • Senate
Michael L. Testa Jr.
Republican • Senate
Larry Wainstein
Democratic • House

Roll Call Votes

All Roll Calls

Yes: 114 • No: 0

House vote • 6/11/2026

3RDG FINAL PASSAGE

Yes: 79 • No: 0

Senate vote • 5/28/2026