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 Sta