Bill
S 4426
Authorizes and funds NJDEP to finance FY2026 clean water and drinking water projects with loans (including zero‑interest/forgiveness) and flexible NJIB repayment handling.
Status: Enacted (P.L.2025, c.109), approved July 22, 2025
Introduced: May 19, 2025 | Final passage: June 30, 2025 (Senate & Assembly)
Primary sponsors (as reprinted): Sen. John J. Burzichelli; Sen. Robert W. Singer. Assembly cosponsors include Alexander “Avi” Schnall, Luanne M. Peterpaul, and Melinda Kane. Companion: A5622; related NJIB authorization bill: S.4467.
Purpose
- Appropriates federal and State funds to the New Jersey Department of Environmental Protection (DEP) to implement the State Fiscal Year 2026 New Jersey Environmental Infrastructure Financing Program (NJEIFP).
- Funds will be used to make loans (including zero‑interest and principal‑forgiveness loans where authorized) to local governments and privately‑owned water utilities for clean water and drinking water infrastructure projects.
Key provisions and changes
- Funding sources appropriated to DEP include:
- Clean Water State Revolving Fund (federal FY2025 capitalization grant and related funds, including IIJA amounts)
- Drinking Water State Revolving Fund (federal FY2025 capitalization grant and IIJA amounts)
- Interim Environmental Financing Program Fund, Disaster Relief Emergency Financing Program Fund, and multiple State bond‑related funds and unexpended balances through June 30, 2026.
- DEP authorized to transfer amounts between Clean Water and Drinking Water SRFs pursuant to applicable federal law (including Water Infrastructure Funding Transfer Act) and to use funds consistent with federal requirements; may charge interest on loans as permitted.
- Project lists and funding authorization:
- Supplemental clean water loans: 2 projects, ~$5.2 million total.
- Supplemental drinking water loans: 4 projects, ~$19 million total.
- “Storm Sandy and SFY2026 Clean Water Project Eligibility List”: 151 projects, ~$1.7 billion total.
- Pinelands clean water projects (under Pinelands Infrastructure Trust): 4 projects, ~$15.3 million total.
- “Storm Sandy and SFY2026 Drinking Water Project Eligibility List”: 59 projects, ~$651.7 million total.
- DEP’s authority to use the appropriated funds and the project lists expire July 1, 2026.
- Loan terms and special financing:
- DEP may structure loans to include zero percent interest or principal forgiveness for eligible project types (e.g., combined sewer overflow mitigation, water quality restoration, water/energy efficiency, emerging contaminants), subject to statutory funding limits and restrictions.
- Additional requirements and restrictions govern Sandy‑funded loans (loans using federal Disaster Relief Appropriations Act, 2013 funds).
- New Jersey Infrastructure Bank (NJIB) provisions:
- NJIB may execute loans using the funds appropriated to DEP (companion bill S.4467 authorizes NJIB execution).
- NJIB may temporarily apply loan repayments to recoup unpaid trust bond repayments and administrative fees rather than redepositing them immediately; if later collected from project sponsors, NJIB must make compensatory deposits to affected State funds.
- NJIB may deposit amounts certified by its leadership into reserve funds from repayments, interest, federal funds, and earnings as needed.
Who is affected
- Primary: municipal and county governments, water and wastewater authorities, and privately‑owned water companies that act as NJEIFP project sponsors.
- Secondary: DEP and NJIB (administration and oversight); ratepayers and local taxpayers (through loan terms, forgiveness, and State matching funds).
- Projects targeting public‑health threats, storm recovery (Sandy), combined sewer overflow, emerging contaminants, and efficiency upgrades are prioritized for favorable loan terms.
Fiscal and procedural notes
- Fiscal impact: bill not certified as requiring a fiscal note.
- DEP authorization to use the funds and the listed project eligibility expire July 1, 2026.
- Legislative actions: reported by Senate Budget & Appropriations Committee (June 9, 2025); Assembly floor amendment adopted June 30, 2025; enacted July 22, 2025 as P.L.2025, c.109.
Bottom line
S.4426 provides the FY2026 legal authority and appropriation of federal and State revolving‑fund and bond proceeds to finance a broad set of clean water and drinking water projects across New Jersey, including authorization for zero‑interest and principal‑forgiveness loans for prioritized project types and temporary flexibility for NJIB in handling certain loan repayments and fees.
Compiled from official sources — confirm details with the bill’s official record.
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