The Department of Environmental Protection shall utilize $8,000,000.00 of the monies deposited in the “Water Supply Replacement Trust Fund” to provide loans to a qualifying municipality for the extension of a public water supply system to a residential area or to a municipally-owned or privately-owned public water supply system for the extension of a public water supply system to a residential area in a qualifying municipality. A qualifying municipality is one with a residential area of more than 1,500 residential units that has been found by the local department of health, or board of health, and the county board of health, or department of health, to have at least 25% of the wells supplying potable water to the area with contaminants at the Class II, Class III or Class IV interim action levels for hazardous contaminants in drinking water of the Department of Environmental Protection, or in excess of the maximum contaminant levels adopted by the department pursuant to P.L.1983, c.443 (C. 58:12A-12 et seq.), as may be applicable, and:

a. (1) The potable water supply for the residential area is deemed by the county board of health or department of health to be unfit for human consumption, and (2) the governing body of the municipality has adopted a resolution banning new construction in the area pending connection of the area to a public water supply system; or

b. The Department of Environmental Protection determines all or a portion of the ground water serving the residential area to be a well-restriction area.

A municipality applying for a loan under this section shall certify to the department the estimated costs for extending a public water supply system to an eligible residential area that satisfies the criteria of this section. Monies from a loan made hereunder are to be expended solely for the purpose of expanding the public water supply system to residences with contaminated wells.

L.1988, c.106, s.4; amended 1989,c.311,s.3.