This final rule revises the allotment formula contained in EPA's Clean Water Act (CWA) Section 106 Water Pollution Control grant regulations to include a financial incentive for States to voluntarily collect adequate National Pollutant Discharge Elimination System (NPDES) permit fees. EPA is amending its existing CWA Section 106 grant allotment. This amendment provides the Agency with the flexibility to annually allot separately an amount up to three percent of the FY 2008 base funds allocated to States from CWA Section 106 grants appropriated by Congress. This rule will begin in FY 2009. The incentive will not impact the FY 2008 base funds. It will be set-aside for allotment only if funds allotted to the States are greater than the amount allotted in FY 2008.