New JerseyS4426220th Legislature (2024-2025)SenateWALLET

Appropriates funds to DEP for environmental infrastructure projects for FY2026.

Sponsored By: John J. Burzichelli (Democratic), Melinda Kane (Democratic), Luanne M. Peterpaul Esq. (Democratic), Alexander Schnall (Democratic), Robert W. Singer (Republican)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

13 provisions identified: 13 benefits, 0 costs, 0 mixed.

Financing for local clean water projects

The law lists 151 clean-water projects with about $1.279 billion in estimated state loans and $1.705 billion in total loans. Listing does not guarantee funding. New Jersey’s Department of Environmental Protection can use federal grants, fund balances, and repayments for zero-interest or partly forgiven loans. The money also supports technical help and required state matches; specified balances must be available by June 30, 2026. Previously identified projects keep priority and prior financing terms if they received short-term funding before June 30, 2025.

Resilience loans for Sandy affected communities

The state can provide up to $300 million in Sandy financing loans for listed clean-water projects. Zero-interest and principal-forgiveness loans support communities affected by Superstorm Sandy. Projects must reduce flood risk or improve resilience to changing water conditions or natural disasters. Financing must follow federal disaster relief requirements and the law’s project standards.

Water project financing for listed communities

The drinking-water list includes estimated loans of $72 million for Passaic Valley Water Commission and $15 million for Lakewood Township’s utilities authority. It also includes $1.3 million for Orange City and $12 million for Red Bank Borough. Four listed Pinelands municipalities qualify for water project loans totaling about $15.343 million. The law also allows up to $25 million from specified fiscal year 2021–2025 funds to support drinking-water financing. The New Jersey Infrastructure Bank can invest that money, back loans, hold debt reserves, or pay sponsors’ interest.

Water project help for disadvantaged communities

Disadvantaged communities in the state’s technical assistance program can receive construction loan forgiveness for clean-water or drinking-water projects. That authority provides up to $60 million, with a $2 million limit per applicant. Planning and design grants also have an authority of up to $60 million and a $2 million applicant limit. Those grants require participation in the Water Bank’s technical assistance program; both authorities draw on specified fiscal year 2026 and 2021–2023 funds. The law also allows a transfer of up to $5 million from fiscal year 2026 water funds for technical help.

Affordable loans for drinking water upgrades

The law provides up to $41 million in federal loan forgiveness for drinking-water projects meeting state affordability rules. Lead and emerging-contaminant projects use separate programs. A $20 million pool offers full forgiveness on loans up to $10 million for qualifying, highest-ranked projects. Another $21 million pool offers full forgiveness on loans up to $3 million for Tier 1 and $2 million for Tier 2. Qualifying projects without forgiveness funds receive loans at 25% of the Infrastructure Bank’s market rate.

Cheaper loans for cleaner, resilient water

Forgiveness pools provide up to $8 million for water quality restoration, $10 million for water and energy efficiency, and $8 million for stormwater resilience. The first two also receive specified unused fiscal year 2025 funds; efficiency projects must meet federal Green Project Reserve guidance. Each program caps forgiveness at $2 million per borrower whenever practical. For costs through $4 million, half the principal is forgiven and the balance carries interest at half the Infrastructure Bank’s market rate. Higher costs, or loans without forgiveness funds, carry interest at 25% of that rate.

Cheaper loans for sewer overflow repairs

Projects reducing combined sewer overflow discharges can share up to $18 million in forgiveness, plus specified unused fiscal year 2025 funds. Whenever practical, forgiveness is capped at $5 million per borrower. For costs above $5 million through $10 million, half the loan is forgiven. The remaining half carries interest at 50% of the Infrastructure Bank’s market rate. Costs above $10 million, or loans without forgiveness funds, carry interest at 25% of that rate.

Extra loans for listed water projects

Supplemental zero-interest loans provide up to $3.15 million for Rutgers University and $750,000 for Ship Bottom Borough. Listed drinking-water projects receive up to $14.25 million in supplemental loan authority and priority over the regular drinking-water eligibility list. These loans address final building costs and increased allowable costs, subject to available funds and project requirements. The state can set its share from 0% to 100% of allowable loans; 100% funding does not mean full forgiveness. At 100%, terms follow the construction component’s certification and interim-financing year, or fiscal year 2026 without an interim loan. Qualifying accrued interim-loan interest can also increase the specified aggregate loan authorizations.

Grants help cover sewer project costs

The state can spend federal Sewer Overflow and Stormwater Reuse grant money available by June 30, 2026, on eligible projects. The law does not specify the total federal grant amount. For qualifying sewer overflow or stormwater projects, fully forgiven loans can cover up to 20% of eligible costs. Grants cover the remaining costs. The loan-forgiveness pool provides up to $2 million, plus specified unused fiscal year 2025 funds.

Loan relief for emerging contaminant cleanup

Projects mainly addressing contaminants with newly identified or returning health or environmental risks qualify for dedicated loan relief. The clean-water pool provides up to $27 million in forgiveness, with full forgiveness through $10 million whenever practical. The drinking-water pool provides up to $18 million, with full forgiveness capped at $3 million per applicant. Costs above those thresholds receive loans at 25% of the Infrastructure Bank’s market rate. That rate also applies when forgiveness funds are unavailable.

Loan relief for lead pipe replacement

The law provides up to $68 million, plus specified unused fiscal year 2025 funds, for lead service line loan forgiveness. Water systems must meet state affordability rules and take part in the state’s lead service line replacement program. Tier 1 systems can receive 80% forgiveness, capped at $16 million; Tier 2 systems can receive 50%, capped at $10 million. For costs through $20 million, the balance carries interest at half the Infrastructure Bank’s market rate; higher costs use 25%. Without forgiveness funds, loans carry interest at 20% of that market rate.

Loan relief for small water systems

Systems serving 10,000 people or fewer can access up to $5 million in loans, plus specified unused fiscal year 2025 funds. Total forgiveness is limited to $1 million, with forgiveness capped at half a sponsor’s loan and $2 million per sponsor. Systems serving fewer than 1,000 people have a separate $5 million forgiveness pool. Participants in the Community Engineering Corp or New Jersey Water Association Engineering Contract can receive full forgiveness. Nonparticipants can receive full forgiveness up to $2 million per applicant; costs above $2 million under either program use 25% of the Infrastructure Bank’s market rate.

Water loan relief for qualifying communities

Communities meeting clean-water affordability rules qualify for two forgiveness pools, each supplemented by specified unused fiscal year 2025 funds. The sewer overflow pool provides up to $18 million for projects reducing outfall discharges. It offers full forgiveness through $8 million for Tier 1 borrowers and $7 million for Tier 2. The broader clean-water pool provides up to $19 million, with full forgiveness through $3 million and $2 million, respectively. Higher costs, or projects without available forgiveness funds, use loans at 25% of the Infrastructure Bank’s market rate.

Sponsors & Cosponsors

Cosponsors

Carmen F. Amato Jr.
Republican • Senate
Clinton Calabrese
Democratic • House
Margie Donlon M.D.
Democratic • House
Mitchelle Drulis
Democratic • House
Dawn Fantasia
Republican • House
Roy Freiman
Democratic • House
Michael Inganamort
Republican • House
Carol A. Murphy
Democratic • House
Ramirez, Jessica
Affiliation unavailable
Parker Space
Republican • Senate
Sterley S. Stanley
Democratic • House

Roll Call Votes

All Roll Calls

Yes: 156 • No: 0

House vote • 6/30/2025

3RDG FINAL PASSAGE

Yes: 78 • No: 0 • Other: 1

Senate vote • 6/30/2025