[Federal Register Volume 64, Number 84 (Monday, May 3, 1999)]
[Rules and Regulations]
[Pages 23734-23739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10631]



[[Page 23733]]

_______________________________________________________________________

Part II





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 35



Revised Allotment Formulas for State and Interstate Monies Appropriated 
Under Section 106 of the Clean Water Act; Final Rule

  Federal Register / Vol. 64, No. 84 / Monday, May 3, 1999 / Rules and 
Regulations  

[[Page 23734]]



ENVIRONMENTAL PROTECTION AGENCY

40 CFR PART 35

[FRL-6332-1]


Revised Allotment Formulas for State and Interstate Monies 
Appropriated Under Section 106 of the Clean Water Act

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This regulation revises the formulas for allotting funds 
appropriated under Section 106 of the Clean Water Act (CWA) to States 
and to interstate agencies for administering water quality programs. 
Section 106 of the CWA authorizes the Environmental Protection Agency 
(EPA) to provide grants to States and interstate agencies, and Indian 
Tribes qualified under CWA Section 518(e), to assist them in 
administering programs for the prevention, reduction, and elimination 
of pollution.
    The allotment formula for the tribal portion of the Section 106 
Grant Program was revised in 1997 and is not affected by this action.
    The CWA directs EPA to allocate Section 106 funds ``on the basis of 
the extent of the pollution problem in the respective States.'' The 
Section 106 allotment formulas were previously based on data more than 
25 years old, including population data from the 1960s and data on 
pollution sources from the early 1970s. Reports of current water 
quality conditions around the country, provided by States under CWA 
Section 305(b), indicate that the location and nature of the sources of 
water pollution have changed significantly since the early 1970s. 
Utilizing the more recent data, EPA revised the CWA Section 106 State 
and interstate allotment formulas to better comply with the statutory 
directive to allocate funds to States and interstate agencies based on 
the ``extent of the pollution problem.'' Notice of revised State and 
interstate agency allotment formulas for Fiscal Year (FY) 1999 was 
published in the Federal Register (63 FR 59870 (1998)).
    Based on public comments received on the FY 1999 formulas, EPA has 
revised the CWA Section 106 State allotment formula to incorporate a 
perpetual ``hold harmless'' provision, which ensures that all States 
will receive an allotment at least equal to their FY 2000 allotment 
level for FY 2001 and beyond unless the appropriation for States under 
the Section 106 Grant Program decreases from its FY 2000 level.
    These revised Section 106 State and interstate allotment formulas 
will be effective for Fiscal Year 2000 and beyond.

DATES: This rule is effective May 3, 1999.

FOR FURTHER INFORMATION CONTACT: Carol Crow, Office of Wastewater 
Management (4201), 401 M Street, S.W., Washington, D.C. 20460; 
Telephone: (202) 260-6742; Facsimile: (202) 260-1156; E-mail: 
[email protected]

SUPPLEMENTARY INFORMATION:

Regulated Entities

    States, the District of Columbia, Puerto Rico, the Insular Areas, 
and interstate agencies eligible to receive grants under Section 106 of 
the Clean Water Act are regulated by this rule.

Background

    Section 106(a) provides general authority for grants to States, 
interstate agencies, and Indian Tribes qualified under CWA Section 
518(e), to assist them in administering programs for the prevention, 
reduction, and elimination of water pollution. Section 106(b) of the 
CWA requires the Administrator of the Environmental Protection Agency 
(EPA) to make allotments from sums appropriated by Congress in each 
fiscal year ``on the basis of the extent of the pollution problem in 
the respective States.''
    The Section 106 allotment formulas were previously based on data 
that is now more than 25 years old, including population data from the 
1960s and inventory data for large cattle feedlots, industrial and 
municipal point sources, and power plants dating from the early 1970s. 
Reports of current water quality conditions around the country, 
provided by States to EPA under CWA Section 305(b), indicate that the 
location and nature of the sources of water pollution have changed 
significantly since the early 1970s.
    For the FY 1999 formula revision process, EPA organized a work 
group consisting of geographically-balanced representation from the 
Agency, seven States, and an interstate agency to review the former 
formula and to consider other approaches. The State representatives 
were recommended by the Environmental Council of States (ECOS), the 
Association of State and Interstate Water Pollution Control 
Administrators (ASIWPCA) and the Ground Water Protection Council 
(GWPC). The representatives selected by these organizations were 
encouraged to share information and gather opinions from other States 
in their region and in their associations. The work group evaluated a 
wide range of alternative approaches and ultimately developed and 
recommended revised State and interstate allocation formulas for use in 
determining Section 106 State and interstate allotments for FY 1999.
    Utilizing the more recent data, EPA revised the allotment formulas 
for FY 1999 to ensure the allotment of funds to States and interstate 
agencies based on the ``extent of the pollution problem in the 
respective States.'' Notice of revised allotment formulas for States 
and interstate agencies for Fiscal Year (FY) 1999 was published in the 
November 5, 1998, Federal Register (63 FR 59870).
    Based on a significant increase in the appropriation for the 
Section 106 Grant Program in FY 1999, the revised formula specifically 
provided that no State's FY 1999 allotment would be less than its FY 
1998 allotment. For FY 1999, the funding increase also provided 
additional resources to most States. In subsequent years, under the FY 
1999 formula, States would not lose more than 5 percent of their 
Section 106 allotment in any one year, or more than a total of 20 
percent from their FY 1998 Section 106 allotment.
    The funding set-aside for interstate agencies was returned to its 
historical (FY 1976) high level of 2.6 percent of the total State 
monies appropriated for States under the Section 106 Grant Program.
    EPA published the revised FY 1999 formulas in the November 5, 1998, 
Federal Register Notice and requested public comments be submitted no 
later than January 4, 1999. In response to public comments, EPA 
reconvened an expanded Section 106 Formula work group comprised of EPA 
and State representatives to develop final Section 106 allotment 
formulas for FY 2000 and beyond. To ensure that States from each EPA 
Region were provided with an opportunity to participate directly in the 
development of the final revised allotment formulas, the membership of 
the original Section 106 Formula work group was expanded to include 
four additional State representatives. Work group representatives were 
encouraged to share information and gather opinions from other States 
in their regions and in their associations.
    In response to specific concerns raised in the comments, EPA 
recommended incorporation of a perpetual ``hold harmless'' provision in 
the final Section 106 State allotment formula. After extensive 
discussion, the work group members unanimously agreed to implement a 
perpetual ``hold harmless'' provision in the final State

[[Page 23735]]

formula. This provision will (1) ensure that all States will be 
eligible to receive an allotment at least equal to their FY 2000 
allotment for FY 2001 and beyond, provided that the appropriation for 
States under the Section 106 Grant Program does not decline from its FY 
2000 level; and (2) all States will be eligible to receive a portion of 
any increase in the appropriation for States under the Section 106 
Grant Program. For FY 2000, each of the 21 entities 1 that 
did not receive an increase in its allotment from FY 1998 to FY 1999 
(i.e., the entity received the same allotment in FY 1999 that it 
received in FY 1998) will receive at least its FY 1999 allotment plus 
an allowance for inflation based on the Consumer Price Index (CPI). 
Each of the 35 entities 2 that received a funding increase 
from FY 1998 to FY 1999 will receive its FY 1999 allotment minus a pro 
rata share of the funds necessary to ensure the inflation allowance for 
the aforementioned 21 entities.
---------------------------------------------------------------------------

    \1\ 17 States, the District of Columbia, Guam, Puerto Rico, and 
the U.S. Virgin Islands
    \2\ 33 States, American Samoa, and the Northern Mariana Islands
---------------------------------------------------------------------------

    Once the work group members reached agreement on the implementation 
of the ``hold harmless'' provision, accordingly they agreed to maintain 
the components, data sources, and weights used in the FY 1999 formula 
as published in the November 5, 1998, Federal Register in the final 
Section 106 allotment formulas for FY 2000 and beyond.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., 
as amended by SBREFA, EPA generally is required to conduct a regulatory 
flexibility analysis describing the impact of the regulatory action on 
small entities as part of rulemaking. However, under Section 605(b) of 
the RFA, if EPA certifies that the rule will not have a significant 
economic impact on a substantial number of small entities, EPA is not 
required to prepare a regulatory flexibility analysis. Pursuant to 
Section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 604(b), the 
Administrator certifies that this rule will not have a significant 
economic impact on a substantial number of small entities.
    This rule imposes no new requirements on small entities, nor does 
it adversely impact them. It updates existing funding allotment 
formulas for States and interstate agencies to ensure that the 
allotments of CWA Section 106 funds to States and interstate agencies 
are based on the ``extent of the pollution problem in the respective 
States.'' Based on the incorporation of a perpetual ``hold harmless'' 
provision in the State allotment formula, all States will receive an 
allotment at least equal to their FY 2000 allotment level for FY 2001 
and beyond, unless the appropriation for States under the Section 106 
Grant Program decreases from its FY 2000 level. The set-aside funding 
for interstate agencies was restored to its historical high of 2.6 
percent of the total funds appropriated for States under the Section 
106 Grant Program.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under Section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures by State, local, and tribal governments, in 
the aggregate, or by the private sector, of $100 million or more in any 
one year. The UMRA excludes from the definition of ``Federal 
intergovernmental mandate'' duties that arise from conditions of 
federal assistance. Thus, today's rule is not subject to the 
requirements of Sections 202 and 205 of the UMRA.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments, it must have developed under Section 203 of the UMRA a 
small government agency plan. The plan must provide for notifying 
potentially affected small governments, enabling officials of affected 
small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates, and informing, educating, and advising 
small governments on compliance with the regulatory requirements.
    EPA has determined that this rule contains no regulatory provisions 
that might significantly or uniquely affect small governments, as those 
are defined at 2 U.S.C. 658(11) (i.e. governments of cities, counties, 
towns, townships, villages, school districts, or special districts with 
populations of less than 50,000). The Section 106 allotment formula for 
the tribal portion of the Section 106 Grant Program is not affected by 
this rule. Thus, today's rule is not subject to the requirements of 
Section 203 of UMRA.

National Technology Transfer and Advancement Act

    Under Section 12(d) of the National Technology Transfer and 
Advancement Act of 1995 (NTTAA), EPA is required to use voluntary 
consensus standards in its regulatory activities unless to do so would 
be inconsistent with applicable law or otherwise impracticable. 
Voluntary consensus standards are technical standards (e.g., materials 
specifications, test methods, sampling procedures, business practices, 
etc.) that are developed or adopted by voluntary consensus standards 
bodies. Where available and potentially applicable voluntary consensus 
standards are not used, the Act requires EPA to provide Congress, 
through the Office of Management and Budget (OMB), an explanation of 
the reasons for not using such standards. This action does not involve 
technical standards. Therefore, EPA did not consider the use of any 
voluntary consensus standards.

Paperwork Reduction Act

    Under the Paperwork Reduction Act (PRA), as amended, 44 U.S.C. 3501 
et seq. information collection requirements contained in rules must be 
approved by OMB before they are effective. An agency may not conduct or 
sponsor, and a person is not required to respond to a collection of 
information unless it displays a current valid OMB control number. This 
rule does not contain any collection of information requirements. Since 
this action imposes no information collection, reporting or record-
keeping requirements, this rule is not subject to the PRA.

Executive Order 12866

    Under Executive Order 12866, [58 FR 51735 (October 4, 1993)] 
``Regulatory Planning and Review,'' the Agency must determine whether 
the regulatory action is ``significant'' and is therefore subject to 
OMB review and the requirements of the Executive Order. The Order 
defines ``significant regulatory action'' as one that is likely to 
result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or

[[Page 23736]]

    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject ot OMB review.''

Executive Order 13045

    Executive Order 13045 ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997), applies 
to any rule that is: (1) determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, EPA must evaluate the environmental health or 
safety effects of the planned rule on children and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that are based on health or safety risks, such that 
the analysis required under Section 5-501 of the Order has the 
potential to influence the regulation. EPA has determined that the 
proposed rule is not a covered regulatory action because it is not 
economically significant as defined under Executive Order 12866, and it 
does not establish an environmental standard to mitigate health or 
safety risks. As a result, this rule is not subject to the requirements 
of the Executive Order 13045.

Executive Order 12875

    Under Executive Order 12875, Enhancing the Intergovernmental 
Partnership, EPA may not issue a regulation that is not required by 
statute and that creates a mandate upon a State, local or tribal 
government, unless the Federal government provides the funds necessary 
to pay the direct compliance costs incurred by those governments, or 
EPA consults with those governments. If EPA complies by consulting, 
Executive Order 12875 requires EPA to provide to the OMB a description 
of the extent of EPA's prior consultation with representatives of 
affected State, local and tribal governments, the nature of their 
concerns, any written communications from the governments, and a 
statement supporting the need to issue the regulation. In addition, 
Executive Order 12875 requires EPA to develop an effective process 
permitting elected officials and other representatives of State, local 
and tribal governments ``to provide meaningful and timely input in the 
development of regulatory proposals containing significant unfunded 
mandates.'' This rule does not create a mandate on State, local or 
tribal governments. The rule does not impose any enforceable duties on 
these entities. The rule merely establishes formulas for the allotment 
of Federal funds to States and interstate agencies. Accordingly, the 
requirements of Section 1(a) of Executive Order 12875 do not apply to 
this rule.

Executive Order 13084

    Under Executive Order 13084, Consultation and Coordination with 
Indian tribal governments, EPA may not issue a regulation that is not 
required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 13084 
requires EPA to provide to the OMB, in a separately identified section 
of the preamble to the rule, a description of the extent of EPA's prior 
consultation with representatives of affected tribal governments, a 
summary of the nature of their concerns, and a statement supporting the 
need to issue the regulation. In addition, Executive Order 13084 
requires EPA to develop an effective process permitting elected and 
other representatives of Indian tribal governments ``to provide 
meaningful and timely input in the development of regulatory policies 
on matters that significantly or uniquely affect their communities.''
    This rule does not affect the communities of Indian tribal 
governments, because Tribes are covered under 40 CFR Part 35, 35.265, 
which remains in effect as published. Accordingly, the requirements of 
Section 3(b) of Executive Order 13084 do not apply to this rule.

Congressional Review Act

    The Congressional Review Act, 5 U.S.C. Section 801 et seq., as 
added by the Small Business Regulatory Enforcement Act of 1996, 
generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. EPA will submit a report containing this 
rule and other required information to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States 
prior to publication of the rule in the Federal Register. A major rule 
cannot take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
Section 804(2). This rule will be effective May 3, 1999.

List of Subjects in 40 CFR Part 35

    Environmental protection, Administrative practices and procedures, 
Evaluation of performance, Grant programs--environmental protection, 
Work plan requirements.

    Dated: April 20, 1999.
Carol M. Browner,
Administrator.

    EPA amends 40 CFR part 35 as follows:

PART 35--STATE AND LOCAL ASSISTANCE

    1. The authority citation for part 35, subpart A continues to read 
as follows:

    Authority: Secs. 105 and 301(a) of the Clean Air Act, as amended 
(42 U.S.C. 7405 and 7601(a)); Secs. 106, 205(g), 205(j), 208, 319, 
501(a) and 518 of the Clean Water Act, as amended (33 U.S.C. 1256, 
1285(g), 1285(j), 1288, 1361(a) and 1377); secs. 1443, 1450, and 
1451 of the Safe Drinking Water Act (42 U.S.C. 300j-2, 300j-9 and 
300j-11); secs. 202(a) and 3011 of the Solid Waste Disposal Act, as 
amended by the Resource Conservation and Recovery Act of 1976 (42 
U.S.C. 6912(a), 6931, 6947, and 6949); and secs. 4, 23, and 25(a) of 
the Federal Insecticide, Fungicide and Rodenticide Act, as amended 
(7 U.S.C. 136(b), 136(u) and 136w(a)).

    2. Subpart A is amended by adding Sec. 35.251 and Sec. 35.252 to 
read as follows:


Sec. 35.251  Definitions.

    As used herein, the following words and terms shall have the 
meaning set forth below:
    (a) The term allotment means the sum reserved for each State or 
interstate agency from funds appropriated by the Congress. The 
allotment is determined by formula based on the extent of the water 
pollution problem in the respective States. It represents the maximum 
amount of money potentially available to the State or interstate agency 
for its program grant.
    (b) The term program grant means the amount of federal assistance 
awarded to a State or interstate agency under Section 106 of the Clean 
Water Act to assist in administering programs for the prevention, 
reduction and elimination of water pollution.

[[Page 23737]]

    (c) The term State means a State, the District of Columbia (DC), 
the Commonwealth of Puerto Rico (PR), the U.S. Virgin Islands (VI), 
Guam (GU), American Samoa (AS), and the Commonwealth of the Northern 
Mariana Islands (CNMI).
    (d) The term interstate agency means an agency that meets the 
requirements of Section 502(2) of the Clean Water Act (CWA) and which 
is determined to be eligible for receipt of a grant under CWA Section 
106 and these regulations by the Administrator.
    (e) The term component refers to one of the six factors selected 
for use in the Section 106 State allotment formula. Each component of 
the formula was selected based on its potential contribution to the 
extent of water pollution problems within the respective States and to 
the workload of State water pollution control programs.
    (f) The term element refers to one of the constituent factors used 
to provide greater specificity to a component in the Section 106 State 
allotment formula. Certain components are composed of two or more 
``elements.'' For example, the nonpoint source component of the Section 
106 State allotment formula is composed of an agricultural element, a 
logging element, and an abandoned mine element.
    (g) The term sub-element refers to one of the constituent factors 
used to provide greater specificity to an element in the Section 106 
State allotment formula. Certain elements are composed of two or more 
``sub-elements.'' For example, the abandoned mine element of the 
nonpoint source component is composed of a soft-rock mining sub-element 
and a hard-rock mining sub-element.
    (h) The term funding floor refers to the minimum amount of funding 
that a State will be allotted in any fiscal year.
    (i) The term maximum level of funding refers to the ceiling on the 
amount of funding that a State can be allotted in any fiscal year.


Sec. 35.252  State and interstate allotments.

    (a) Allotments. Each fiscal year funds appropriated for States 
under Section 106 will be allotted to States and interstate agencies on 
the basis of the extent of the pollution problems in the respective 
States. A portion of the funds available to States under the Section 
106 Grant Program will be set-aside for allotment to eligible 
interstate agencies. For FY 2000 and subsequent years, the interstate 
set-aside will be set at the level of 2.6 percent of the total funds 
appropriated for States under the Section 106 Grant Program.
    (b) State allotment formula. The Section 106 State allotment 
formula establishes an allotment ratio for each State based on six 
components selected to reflect the extent of the water pollution 
problem in the respective States. A funding floor is established for 
each State with provisions for periodic adjustments for inflation. The 
formula also provides for a maximum funding level that a State can 
receive in any fiscal year (150% of its previous fiscal year 
allotment).
    (1) Components and component weights. (i) Components. The six 
components used in the Section 106 State allotment formula are: Surface 
Water Area; Ground Water Use; Water Quality Impairment; Point Sources; 
Nonpoint Sources; and Population of Urbanized Area. The components for 
the formula are presented in Table 1 of this section, with their 
associated elements, sub-elements, and supporting data sources.

BILLING CODE 6560-50-P

[[Page 23738]]

[GRAPHIC] [TIFF OMITTED] TR03MY99.000



BILLING CODE 6560-50-C

[[Page 23739]]

    (ii) Component weights. To account for the fact that not all of the 
selected formula components contribute equally to the extent of the 
pollution problem within the States, each formula component is weighted 
individually. Final component weights will be phased-in by FY 2004, 
according to the schedule presented in Table 2 of this section:

                     Table 2.--Component Weights in the Section 106 State Allotment Formula
----------------------------------------------------------------------------------------------------------------
                                                                      FY 2000         FY 2001        FY 2004+
                            Component                                (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
Surface Water Area..............................................              13              13              12
Ground Water Use................................................              11              12              12
Water Quality Impairment........................................              13              25              35
Point Sources...................................................              25              17              13
Nonpoint Sources................................................              18              15              13
Population of Urbanized Area....................................              20              18              15
                                                                 -----------------------------------------------
    Total.......................................................             100             100             100
----------------------------------------------------------------------------------------------------------------

    (2) Funding floor. A funding floor is established for each State. 
Each State's funding floor will be at least equal to its FY 2000 
allotment in all future years unless the appropriation for States under 
the Section 106 Grant Program decreases from its FY 2000 level.
    (3) Funding decrease. If the appropriation for the State Section 
106 Grant Program decreases in future years, the funding floor will be 
disregarded and all States allotments will be reduced by an equal 
percentage.
    (4) Inflation adjustment. Funding floors for each State will be 
adjusted for inflation when the appropriation for the State Section 106 
Grant Program increases from the preceding fiscal year. These 
adjustments will be made on the basis of the cumulative change in the 
Consumer Price Index (CPI), published by the U.S. Department of Labor, 
since the most recent year in which State Section 106 funding last 
increased. Inflation adjustments to State funding floors will be capped 
at the lesser of the percentage change in appropriated funds or the 
cumulative percentage change in the inflation rate.
    (5) Cap on annual funding increases. The maximum allotment to any 
State will be 150 percent of that State's allotment for the previous 
fiscal year.
    (6) Cap on component ratio. A component ratio is equal to each 
State's share of the national total of a single component. The cap on 
each of the six State formula components ratios is 10 percent. If a 
State's calculated component ratio for a particular component exceeds 
the 10 percent cap, the State will instead be assigned 10 percent for 
that component. The component ratios for all other States will be 
adjusted accordingly.
    (7) Update cycle. The data used in the State formula will be 
periodically updated. The first update will impact allotments for FY 
2001, and will consist of updating the data used to support the Water 
Quality Impairment component of the State formula. These data will be 
updated using the most currently available CWA Section 305(b) reports. 
After this initial update, the data used to support all six components 
of the Section 106 State allotment formula will be updated in FY 2003 
(for use in the determination of FY 2004 allotments). Thereafter, all 
data will be updated every five years (i.e., in FY 2008 for FY 2009 
allotments, in FY 2013 for FY 2014 allotments, etc.) Note there will be 
an annual adjustment to the funding floor for all States, based on the 
appropriation for the Section 106 Grant Program and changes in the CPI.
    (c) Interstate allotment formula. EPA will set-aside 2.6 percent of 
funds appropriated for States under the Section 106 Grant Program for 
interstate agencies. The Section 106 interstate allotment formula 
consists of two parts: a base allotment; and a variable allotment.
    (1) Base allotment. Each eligible interstate agency is provided 
with $125,000 as a base allotment to help fund coordination activities 
amongst its member States. However, no more than 50 percent of the 
total available interstate set-aside may be allocated as part of the 
base allotment. If, given the 50 percent limitation placed on the base 
allotment the amount of interstate set-aside funds is insufficient to 
provide each interstate agency with $125,000, then each interstate 
agency will receive a base allotment equal to 50 percent of the total 
interstate set-aside divided by the total number of eligible interstate 
agencies.
    (2) Variable allotment. The variable allotment provides for funds 
to be distributed to interstate agencies on the basis of ``the extent 
of the pollution problems in the respective States.'' Funds not 
allotted under the base allotment will be allotted to eligible 
interstate agencies based on each interstate agency's share of their 
member States' Section 106 formula allotment ratios. Updates of the 
data for the six components of the Section 106 State allocation formula 
will automatically result in corresponding updates to the variable 
allotment portion of the interstate allotments. The allotment ratios 
for those States involved in compacts with more than one interstate 
agency will be allocated amongst such interstate agencies based on the 
percentage of each State's territory that is situated within the 
drainage basin or watershed area covered by each compact.

[FR Doc. 99-10631 Filed 4-30-99; 8:45 am]
BILLING CODE 6560-50-P